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AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 28, 2000
BY AND AMONG
SABRE HOLDINGS CORPORATION
SABRE INC.
AND
GETTHERE INC.
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TABLE OF CONTENTS
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SECTION PAGE
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ARTICLE I CERTAIN DEFINITIONS................................................ 2
1.01 CERTAIN DEFINITIONS......................................... 2
ARTICLE II OFFER.............................................................. 7
2.01 THE OFFER................................................... 7
2.02 COMPANY ACTIONS............................................. 9
2.03 DIRECTORS OF THE COMPANY.................................... 9
ARTICLE III THE MERGER......................................................... 10
3.01 THE MERGER.................................................. 10
3.02 EFFECTIVE TIME.............................................. 11
3.03 CLOSING..................................................... 11
3.04 MERGER CONSIDERATION........................................ 11
3.05 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS..................... 11
3.06 EXCHANGE PROCEDURE.......................................... 12
3.07 OPTIONS; OTHER EQUITY AWARDS................................ 12
3.08 WARRANTS.................................................... 14
3.09 DISSENTING STOCKHOLDERS..................................... 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................... 14
4.01 DISCLOSURE SCHEDULES........................................ 14
4.02 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 15
4.03 REPRESENTATIONS AND WARRANTIES OF PARENT.................... 26
ARTICLE V ACTIONS PENDING THE EFFECTIVE TIME................................. 27
5.01 FORBEARANCES OF THE COMPANY................................. 27
ARTICLE VI COVENANTS.......................................................... 30
6.01 EFFORTS..................................................... 30
6.02 COMPANY PROXY STATEMENT..................................... 30
6.03 STOCKHOLDER MEETINGS........................................ 30
6.04 PUBLICITY................................................... 31
6.05 ACCESS; INFORMATION......................................... 31
6.06 ACQUISITION PROPOSALS....................................... 31
6.07 REGULATORY APPLICATIONS; CONSENTS........................... 32
6.08 EMPLOYEE MATTERS............................................ 33
6.09 NOTIFICATION OF CERTAIN MATTERS............................. 34
6.10 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE......... 34
6.11 TAX RETURNS................................................. 36
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................... 36
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER...................................................... 36
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ARTICLE VIII TERMINATION........................................................ 36
8.01 TERMINATION................................................. 36
8.02 EFFECT OF TERMINATION AND ABANDONMENT....................... 37
8.03 TERMINATION FEES............................................ 37
8.04 CHANGES IN FORBEARANCES..................................... 39
ARTICLE IX MISCELLANEOUS...................................................... 39
9.01 SURVIVAL.................................................... 39
9.02 WAIVER; AMENDMENT........................................... 39
9.03 COUNTERPARTS................................................ 39
9.04 GOVERNING LAW AND VENUE..................................... 39
9.05 EXPENSES.................................................... 39
9.06 NOTICES..................................................... 40
9.07 ENTIRE UNDERSTANDING; NO THIRD-PARTY BENEFICIARIES.......... 40
9.08 SEVERABILITY................................................ 40
9.09 ASSIGNMENT.................................................. 41
9.10 ENFORCEMENT................................................. 41
9.11 INTERPRETATION.............................................. 41
</TABLE>
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AGREEMENT AND PLAN OF MERGER, dated as of August 28, 2000 (this
"AGREEMENT"), by and among SABRE HOLDINGS CORPORATION, a Delaware corporation
("PARENT"), SABRE INC., a Delaware corporation and a wholly-owned subsidiary of
Parent ("MERGER SUB"), and GETTHERE INC., a Delaware corporation (the
"COMPANY").
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company each
have determined that it is advisable and in the best interests of their
respective corporations and their respective stockholders that Parent acquire
the Company upon the terms and subject to the conditions set forth;
WHEREAS, in furtherance thereof, it is proposed that the acquisition be
accomplished by Merger Sub commencing a cash tender offer (as it may be amended
from time to time as permitted by this Agreement, the "OFFER") to purchase all
of the issued and outstanding shares of common stock, par value $0.0001 per
share, of the Company (the "COMPANY COMMON STOCK") and preferred stock, par
value $0.0001 per share, of the Company (the "COMPANY PREFERRED STOCK") (the
shares of Company Common Stock and Company Preferred Stock are referred to
herein as "COMPANY SHARES"), for $17.75 per Company Share (such amount or any
greater amount per Company Shares paid pursuant to the Offer being hereinafter
referred to as the "OFFER PRICE"), net to the seller in cash, upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, by resolutions duly adopted in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), the respective Boards of
Directors of the Company, Parent and Merger Sub have approved and adopted this
Agreement, the merger of Merger Sub with and into the Company (the "MERGER") in
accordance with the DGCL, and the transactions contemplated hereby; and
WHEREAS, as further conditions and inducements to the willingness of Parent
to enter into this Agreement, (1) each of American Express Travel Related
Services Company, Inc. ("AMEX") and other corporate stockholders of the Company
collectively holding not less than 23% of the presently outstanding shares of
the Company Shares has entered into an agreement with Parent and Merger Sub,
substantially in the form of Exhibit A hereto and (2) each of Gadi Maier and
Richard D.C. Whilden, stockholders of the Company collectively holding the power
to vote not less than 5% of the outstanding Company Shares, has entered into an
agreement with Parent and Merger Sub, substantially in the form of Exhibit B
hereto (each of the foregoing agreements with AmEx, certain corporate
stockholders and the individual stockholders, a "STOCKHOLDERS AGREEMENT", and
collectively, the "STOCKHOLDERS AGREEMENTS"), concurrently with the execution of
this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:
"ACQUISITION PROPOSAL" means any offer or other proposal which, if
consummated, would result in an Acquisition Transaction; provided that
solely for purposes of the definition of Superior Proposal, all references
to 20% in the definition of Acquisition Transaction shall be deemed
references to 50%.
"ACQUISITION TRANSACTION" means a transaction or series of transactions
that, directly or indirectly, constitutes an acquisition by a Person
(including a group of Persons that would qualify as a "group" within the
meaning of Section 13(d) of the Exchange Act) of (A) assets or businesses
that constitute or represent more than 20% of the total revenue, operating
income, assets or
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earnings before interest, taxes, depreciation and amortization of the
Company and its Subsidiaries, taken as a whole, or (B) more than 20% of the
outstanding shares of the voting securities of the Company or capital stock
of, or other equity or voting interests in, any Subsidiary or Subsidiaries
of the Company which, taken together, directly or indirectly hold at least
the share of assets or businesses referred to in clause (A) above, whether
by means of (a) a merger, share exchange or consolidation, or any similar
transaction, (b) a purchase, lease or other sale, transfer or disposition,
or (c) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise).
"AFFILIATE" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of
this definition, "control," when used with respect to any specified Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
correlative meanings.
"AGREEMENT" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.
"ANTITRUST AUTHORITIES" has the meaning assigned in Section 6.07(c).
"BANKRUPTCY AND EQUITY EXCEPTION" has the meaning assigned in
Section 4.02(d)(i).
"BUSINESS DAY" means any day other than Saturday, Sunday and any day on
which banks in the State of New York are required or authorized by law or
regulation to be closed.
"BYLAWS" has the meaning assigned in Section 3.01(c).
"CERTIFICATE" has the meaning assigned in Section 3.04(b).
"CERTIFICATE OF INCORPORATION" has the meaning assigned in
Section 3.01(b).
"CLOSING" and "CLOSING DATE" have the meanings assigned in
Section 3.03.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning assigned in the preamble to this Agreement.
"COMPANY COMMON STOCK" has the meaning assigned in the recitals.
"COMPANY COMPENSATION AND BENEFIT PLANS" has the meaning assigned in
Section 4.02(n)(i).
"COMPANY FINANCIAL STATEMENTS" has the meaning assigned in
Section 4.02(g)(ii).
"COMPANY INTELLECTUAL PROPERTY" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereon, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof,
(b) all trademarks, service marks, trade dress, logos, trade names, domain
names, and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, (c) all copyrights and all applications, registrations and
renewals in connection therewith, (d) all mask works and all applications,
registrations and renewals in connection therewith, (e) all trade secrets
and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, methods, schematics, technology, technical data,
designs, drawings, flowcharts, block diagrams, specifications, customer and
supplier lists, pricing and cost information and business and marketing
plans and proposals), (f) all computer software (including source code,
object code, data and
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documentation related thereto), (g) all copies and tangible embodiments of
the foregoing categories of intellectual property listed in subsections
(a) through (f) herein (in whatever form or medium), and (h) all licenses,
sublicenses, agreements, or permissions related to the foregoing categories
of intellectual property listed in subsections (a) through (f) herein
(categories (a) through (h) herein are collectively referred to as
"INTELLECTUAL PROPERTY") which is owned by the Company or its Subsidiaries
or is used or has been used in connection with the Company or its
Subsidiaries to conduct their business.
"COMPANY OPTIONS" means, collectively, outstanding options to purchase
Company Shares under the Company Shares Plans.
"COMPANY PREFERRED STOCK" has the meaning assigned in the recitals.
"COMPANY PROXY STATEMENT" has the meaning assigned in Section 4.03(d).
"COMPANY REQUISITE VOTE" has the meaning assigned in
Section 4.02(d)(i).
"COMPANY SEC DOCUMENTS" has the meaning assigned in Section 4.02(g)(i).
"COMPANY SHAREHOLDERS MEETING" has the meaning assigned in
Section 6.03.
"COMPANY SHARES" has the meaning assigned in the recitals.
"COMPANY SHARES PLANS" has the meaning assigned in
Section 4.02(b)(iii).
"CONFIDENTIALITY AGREEMENT" has the meaning assigned in
Section 6.05(b).
"CONTENT DELIVERY AGREEMENT" means a Contract whereby the Company
provides certain travel information and travel reservation services to the
customers of another entity through such entity's wireless communications
services.
"CONSTITUTIVE DOCUMENTS" means, with respect to any Person (other than
an individual), such Person's articles or certificate of incorporation and
bylaws or similar organizational documents.
"CONTINUING EMPLOYEES" has the meaning assigned in Section 6.08(b).
"CONTRACT" means, with respect to any Person, any agreement, indenture,
debt instrument, contract, lease or legally binding commitment to which such
Person or any of its Subsidiaries is a party or by which any of them may be
bound or to which any of their properties may be subject.
"COSTS" has the meaning assigned in Section 6.10(a).
"DGCL" has the meaning assigned in the recitals.
"DISCLOSED CONTRACTS" has the meaning assigned in
Section 4.02(s)(i)(R).
"DISCLOSURE SCHEDULE" has the meaning assigned in Section 4.01.
"DISSENTERS' SHARES" means Company Shares the holders of which shall
have perfected and not withdrawn or lost their appraisal rights in
accordance with Section 262 of the DGCL.
"DLJ" has the meaning assigned in Section 4.02(m)(i).
"DROP DEAD DATE" has the meaning assigned in Section 8.01(c).
"EFFECTIVE TIME" means the time at which the Merger becomes effective in
accordance with Section 3.02.
"EMPLOYEE" means each current former, or retired employee, officer,
consultant, independent contractor or director of the Company or any of its
Subsidiaries.
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"ENVIRONMENTAL LAW(S)" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. SectionSection 9601 ET SEQ., the
Resource Conservation and Recovery Act, 42 U.S.C. SectionSection 6901 ET
SEQ., the Clean Air Act, 42 U.S.C. SectionSection 7401 ET. SEQ., the Clean
Water Act (Federal Water Pollution Control Act), 33 U.S.C. SectionSection
1251 ET SEQ., the Occupational Safety and Health Act, 29 U.S.C.
SectionSection 641, ET SEQ., all rules and regulations promulgated pursuant
to any of the above statutes, and any other foreign, federal, state or local
law, statute, ordinance, rule or regulation governing Environmental Matters,
including any common law cause of action providing any right or remedy
relating to Environmental Matters and all applicable judicial and
administrative decisions, orders, and decrees relating to Environmental
Matters.
"ENVIRONMENTAL MATTER" means any matter arising out of, relating to, or
resulting from pollution, contamination, protection of the environment,
human health or safety, sanitation, and any matter arising out of, relating
to, or resulting from emissions, discharges, disseminations, releases or
threatened releases, of Hazardous Substances into the air (indoor and
outdoor), surface water, groundwater, soil, land surface or subsurface,
buildings, facilities, real or personal property or fixtures or otherwise
arising out of, relating to, or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, handling,
release or threatened release of Hazardous Substances.
"ENVIRONMENTAL PERMITS" has the meaning assigned in Section 4.02(u).
"EPARTNER AGREEMENT" means a Contract whereby the Company provides
online travel reservation services through a private label web site hosted
by the Company through which the customers of another entity can access the
Company's reservation system.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" has, with respect to any Person, the meaning assigned
in Section 4.02(n)(iv).
"ESPP" has the meaning assigned in Section 6.08(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"EXCHANGE AGENT" has the meaning assigned in Section 3.06(a).
"EXCHANGE RATIO" means the Offer Price divided by the average closing
price of Parent Common Stock for the five (5) trading days immediately
preceding the Effective Time.
"FLIGHTREZ AGREEMENT" means a Contract pursuant to which the Company
provides online travel reservations services through a private label web
site hosted by the Company through which an airline's customers can access
the Company's reservation system.
"GAAP" means generally accepted accounting principles in the United
States.
"GLOBAL MANAGER AGREEMENT" means a Contract whereby the Company provides
online travel reservations services through a web site hosted by the Company
through which employees of another entity and other authorized users can
access the Company's reservation system.
"GOVERNMENTAL AUTHORITY" means any United States or foreign government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government, including, without limitation, the SEC, NYSE,
Nasdaq or any other government authority, agency, department, board,
commission or instrumentality and any court, tribunal or arbitrator(s) of
competent jurisdiction.
"HAZARDOUS SUBSTANCES" means any pollutants, contaminants, toxic or
hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals (including, without limitation, petroleum
or any by-products or fractions thereof, any form of natural gas, lead,
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asbestos and asbestos-containing materials, building construction materials
and debris, polychlorinated biphenyls ("PCBS") and PCB-containing equipment,
radon and other radioactive elements, ionizing radiation, electromagnetic
field radiation and other non-ionizing radiation, infectious, carcinogenic,
mutagenic, or etiologic agents, pesticides, defoliants, explosives,
flammables, corrosives and urea formaldehyde foam insulation) that are
regulated by, or may form the basis of liability under, any Environmental
Law.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"INDEMNIFIED PARTIES" has the meaning assigned in Section 6.10(a).
"INFORMATION STATEMENT" has the meaning assigned in Section 2.03.
"INSURANCE AMOUNT" has the meaning assigned in Section 6.10(c).
"IRS" means the United States Internal Revenue Service.
"LIENS" means a charge, mortgage, pledge, security interest, claim,
lien, or encumbrance of any nature whatsoever.
"LITIGATION" has the meaning assigned in Section 4.02(j).
"MATERIAL ADVERSE EFFECT" means, with respect to Parent, the Company or
the Surviving Corporation, respectively, an effect or change that,
individually or in the aggregate with other such effects or changes, is both
material and adverse with respect to the respective financial condition,
results of operations, assets or business of Parent and its Subsidiaries,
the Company and its Subsidiaries or the Surviving Corporation and its
Subsidiaries, in each case taken as a whole; provided that none of the
following alone shall be deemed, in and of itself, to constitute a Material
Adverse Effect: (a) a change in the market price or trading volume of
Company Shares, (b) a loss by the Company of its suppliers, customers or
employees that is directly and principally related to Parent being a party
to this Agreement or (c) changes in general economic conditions or changes
affecting the industry generally (as opposed to Parent-specific or
Company-specific changes) in which Parent or the Company operates.
"MATERIAL CONTRACT" has the meaning assigned in Section 4.02(s)(i)(R).
"MERGER" has the meaning assigned in the recitals.
"MERGER CONSIDERATION" has the meaning assigned in Section 3.04(a).
"MERGER SUB" has the meaning assigned in the preamble to this Agreement.
"MERGER SUB INSIDERS" has the meaning assigned in Section 2.03.
"MINIMUM TENDER CONDITION" has the meaning assigned in Annex A hereto.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotations System.
"NEW POTENTIAL DISNEY WARRANT" has the meaning assigned in
Section 3.08(b).
"NEW WARRANT" has the meaning assigned in Section 3.08(a).
"NYSE" means the New York Stock Exchange, Inc.
"OFFER" has the meaning assigned in the recitals.
"OFFER DOCUMENTS" has the meaning assigned in Section 2.01(b).
"OFFER PRICE" has the meaning assigned in the recitals.
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"OFFER TO PURCHASE" has the meaning assigned in Section 2.01(b).
"OLD POTENTIAL DISNEY WARRANT" has the meaning assigned in
Section 3.08(b).
"OLD WARRANT" has the meaning assigned in Section 3.08(a).
"ORIGINATORS" has the meaning assigned in Section 4.02(q)(iii).
"PARENT" has the meaning assigned in the preamble to this Agreement.
"PARENT COMMON STOCK" has the meaning assigned in Section 3.07(a).
"PENSION PLAN" has the meaning assigned in Section 4.02(n)(iii).
"PERSON" means any individual, bank, corporation, limited liability
company, partnership, association, joint-stock company, business trust,
unincorporated organization or other entity.
"REPORTS" has the meaning assigned in Section 4.02(f).
"REPRESENTATIVES" means, with respect to any Person, such Person's
directors, officers, employees, legal and financial advisors or any
representatives of such legal and financial advisors.
"RESTRAINTS" has the meaning assigned in Section 7.01(c).
"RESTRICTED SHARE" has the meaning assigned in Section 3.07(b).
"RESTRICTED STOCK AGREEMENT" has the meaning assigned in
Section 3.07(b).
"RIGHTS" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any Person
any preemptive or other right to subscribe for or acquire, or any Warrants
or options (including, in the case of the Company, the Company Options),
calls or commitments relating to, or any stock or equity appreciation right
or other instrument the value of which is determined in whole or in part by
reference to the market price or value of, shares of capital stock of such
Person.
"SCHEDULE 14D-9" has the meaning assigned in Section 2.02(b).
"SCHEDULE TO" has the meaning assigned in Section 2.01(b).
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"SECURITIES LAWS" means, collectively, the Securities Act and the
Exchange Act and all state securities laws and the rules and regulations
thereunder.
"STATE FILINGS" has the meaning assigned in Section 2.01(b).
"STOCKHOLDERS AGREEMENT" has the meaning assigned in the recitals.
"SUBSIDIARY" with respect to a Person, shall mean (x) any partnership of
which such Person or any of its Subsidiaries is a general partner or
(y) any other entity in which such Person or any of its Subsidiaries owns or
has the power to vote more than 50% of the equity interests in such entity
having general voting power to participate in the election of the governing
body of such entity.
"SUBSIDIARY COMMON STOCK" has the meaning assigned in Section 3.04(e).
"SUPERIOR PROPOSAL" has the meaning assigned in Section 6.06(a).
"SURVIVING CORPORATION" has the meaning assigned in Section 3.01(a).
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"TAX" means all federal, state, local, special Taxing Authority and
foreign income, profits, franchise, gross receipts, license, premium,
environmental (including taxes under Section 59A of the Code), capital
stock, severance, stamp, payroll, sales, employment, unemployment,
disability, use, transfer, property, withholding, excise, production,
occupation, windfall profits, customs duties, social security (or similar),
registration, value added, alternative or add-on minimum, estimated,
occupancy and other taxes, duties or governmental assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions; and the terms "TAXES" and "TAXABLE" have correlative meanings.
"TAXING AUTHORITY" means any Governmental Authority responsible for Tax
matters.
"TAX RETURNS" means all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns and
any amendment thereto) required to be supplied to a Tax authority relating
to Taxes.
"TREASURY SHARES" means shares of Company Common Stock, if any, owned by
the Company or any of its Subsidiaries.
"WARRANTS" means all outstanding warrants, and commitments to issue
warrants, to purchase equity interests in the Company.
ARTICLE II
OFFER
2.01 THE OFFER.
(a) Within a reasonable period of time after the date of the execution
of this Agreement, Merger Sub shall, as soon as practicable, but in no event
later than the tenth Business Day after the date of this Agreement, commence
and Parent shall cause Merger Sub to commence (within the meaning of
Rule 14d-2 under the Exchange Act), the Offer. The obligation of Merger Sub
to commence the Offer and to accept for payment, and pay for Company Shares
tendered pursuant to the Offer shall be subject to (i) those conditions set
forth in Annex A (any of which may be waived by Merger Sub in its sole
discretion; provided, however, that, without the consent of the Company,
except as contemplated by Section 2.01(e), Merger Sub shall not waive the
Minimum Tender Condition), and (ii) the receipt by Merger Sub of a
certificate signed by duly authorized officers of the Company (as provided
in Annex A(c)(iii)) to the effect that the condition to the obligation of
the Merger Sub set forth in Annex A(c)(iii) has been satisfied. Subject to
the provisions of this Agreement, the Offer shall initially expire on the
twentieth business day from and after the date the Offer is commenced,
including the date of the commencement of the Offer as the first business
day in accordance with Rule 14d-2, unless this Agreement is terminated in
accordance with Article VIII, in which case the Offer (whether or not
previously extended in accordance with the terms hereof) shall expire on
such date of termination.
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Merger Sub shall file with the SEC with respect to the Offer a
Tender Offer Statement on Schedule TO (together with all amendments and
supplements thereto, the "SCHEDULE TO"), which will comply in all material
respects with the provisions of applicable federal securities laws and will
contain an offer to purchase relating to the Offer (the "OFFER TO PURCHASE")
and forms of related letters of transmittal and summary advertisement (which
documents, together with any supplements or amendments thereto, are referred
to herein collectively as the "OFFER DOCUMENTS"). Parent and Merger Sub
shall make all filings required by applicable state law relating to the
Offer (the "STATE FILINGS") as and when required by applicable state law.
Parent and Merger Sub will deliver copies of the proposed forms of the
Schedule TO, the Offer Documents and the State Filings (as well as
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any change thereto) to the Company within a reasonable time prior to the
commencement of the Offer for prompt review and comment by the Company and
its counsel. Parent and Merger Sub will provide the Company and its counsel
in writing any comments that Merger Sub, Parent or their counsel may receive
from the SEC or its staff or any applicable state authority with respect to
the Offer Documents or the State Filings promptly after the receipt thereof.
Parent and Merger Sub shall promptly correct any information in the Schedule
TO, the Offer Documents or the State Filings that shall have become false or
misleading in any material respect and take all steps necessary to cause
such Schedule TO, Offer Documents or State Filings as so corrected to be
filed with the SEC and any applicable state authority and disseminated to
the stockholders of the Company, as and to the extent required by applicable
law. Parent and Merger Sub will provide copies of any amendments or
supplements to the Offer Documents, the Schedule TO or the State Filings
prior to any filing of such amendments or supplements with the SEC or any
applicable state authority in order to provide the Company and its counsel
with a reasonable opportunity to review and comment.
(c) Each of Parent and Merger Sub expressly reserves the right to modify
the terms of the Offer, except that neither Parent nor Merger Sub shall,
without the prior written consent of the Company, (i) decrease the price per
Company Shares payable in the Offer, (ii) change the form of consideration
payable in the Offer, (iii) decrease the number of Company Shares sought
pursuant to the Offer (except as contemplated by Section 2.01(e)),
(iv) change or modify the conditions to the Offer in a manner adverse to the
Company or holders of Company Shares, (v) impose additional conditions to
the Offer, or (vi) amend any term of the Offer in any manner adverse to the
Company or holders of Company Shares. So long as this Agreement is in effect
and the conditions contained in Annex A have not been satisfied or waived,
Parent shall cause Merger Sub to cause the Offer not to expire until 30
Business Days after such time as all of the conditions contained in Annex A
have been satisfied or waived, except for the Minimum Tender Condition.
Merger Sub may, without the consent of the Company, further extend the
Offer, (i) for any period required by any rule, regulation, interpretation
or position of the SEC or the staff thereof applicable to the Offer and
(ii) from time to time, for an aggregate period of not more than ten
(10) business days (for all such extensions under this clause (ii)) beyond
the latest expiration date that would be permitted under the preceding
sentence or clause (i) of this sentence. Subject to and in accordance with
the terms and conditions of the Offer and this Agreement (but subject to the
right of termination in accordance with Article VIII), Merger Sub shall, and
Parent shall cause Merger Sub to, accept for payment and pay for, in
accordance with the terms of the Offer, all Company Shares validly tendered
and not withdrawn pursuant to the Offer as soon as practicable after the
expiration of the Offer. In addition to the foregoing, Merger Sub may
provide for a "subsequent offering period" to the extent provided in
Rule 14d-11 under the Exchange Act after the purchase of Company Shares
pursuant to the Offer.
(d) On or prior to the date that Merger Sub becomes obligated to accept
for payment and pay for Company Shares pursuant to the Offer, Parent will
provide or cause to be provided to Merger Sub the funds necessary to pay for
all Company Shares that Merger Sub becomes obligated to accept for payment
and pay for pursuant to the Offer.
(e) Notwithstanding anything to the contrary in this Agreement, Merger
Sub may waive the Minimum Tender Condition without the consent of the
Company as long as Merger Sub is permitted by applicable law to and does
exercise the Options (as defined in the Stockholders Agreements) immediately
following the consummation of the Offer and acquires title to all of the
Company Shares subject thereto and as a result of such exercise and purchase
of Shares under the Offer, the aggregate amount of Company Shares acquired
by Merger Sub exceeds the Minimum Tender Condition.
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2.02 COMPANY ACTIONS.
(a) The Company hereby consents to the Offer and represents that the
Company's Board of Directors, at a meeting duly called and held, has adopted
resolutions approving the Offer, the Merger and this Agreement, determining
that the terms of the Offer and the Merger are fair to, and in the best
interests of, the Company's stockholders and recommending acceptance of the
Offer and approval of the Merger and this Agreement by the stockholders of
the Company; provided, however, that the Board of Directors of the Company
may modify, withdraw or change such recommendation solely to the extent that
the Company and the Board of Directors are permitted to do so under
Section 6.06 of this Agreement. Subject to the foregoing and Section 6.06,
the Company hereby consents to the inclusion in the Offer Documents of the
recommendations of the Company's Board of Directors described in this
Section.
(b) The Company shall file with the SEC on the date of the commencement
of the Offer a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, the
"Schedule 14D-9") containing such recommendations of the Board of Directors
in favor of the Offer and the Merger; provided, however, that the Board of
Directors of the Company may modify, withdraw or change such recommendation
solely to the extent that the Board of Directors and the Company are
permitted to do so under Section 6.06 of this Agreement. The Company will
deliver the proposed forms of the Schedule 14D-9 and the exhibits thereto to
Parent within a reasonable time prior to the commencement of the Offer for
prompt review and comment by Parent and its counsel. Parent and its counsel
shall be given a reasonable opportunity to review any amendments and
supplements to the Schedule 14D-9 prior to their filing with the SEC or
dissemination to stockholders of the Company. The Company will provide
Parent and its counsel in writing any comments that the Company or its
counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt thereof, and shall disseminate the
Schedule 14D-9 as required by Rule 14d-9 promulgated under the Exchange Act.
The Company shall promptly correct any information in the Schedule 14D-9
that shall have become false or misleading in any material respect and take
all steps necessary to cause such Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to the stockholders of the Company, as and to
the extent required by applicable federal securities laws.
(c) In connection with the Offer, the Company shall furnish to, or cause
to be furnished to, Parent mailing labels, security position listings and
any available listing or computer file containing the names and addresses of
the record holders and non-objecting beneficial owners of the Company Shares
as of a recent date and shall furnish Parent with such information and
assistance as Parent or its agents may reasonably request in communicating
the Offer to the stockholders of the Company. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate
the Offer Documents and any other documents necessary to consummate the
Offer or the Merger, Parent and Merger Sub shall, and shall cause each of
their Affiliates to, hold the information contained in any of such labels
and lists in confidence, use such information only in connection with the
Offer and the Merger, and, if this Agreement is terminated, promptly deliver
to the Company all copies of such information, labels, listings and files or
extracts therefrom then in their possession, in the possession of their
agents or representatives or under their control.
2.03 DIRECTORS OF THE COMPANY.
Promptly upon the acceptance of and payment for a number of Company
Shares by Merger Sub pursuant to the Offer that satisfies the Minimum Tender
Condition (and, to the extent the Minimum Tender Condition is waived
pursuant to Section 2.01(e), the exercise of the Options as contemplated by
Section 2.01(e)), Merger Sub shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
the Company as will
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give Merger Sub, subject to compliance with Section 14(f) of the Exchange
Act, representation on the Board of Directors of the Company equal to the
product of (a) the number of directors on the Board of Directors of the
Company and (b) the percentage that such number of votes represented by
Company Shares so purchased and Company Shares otherwise held by Parent and
its affiliates, if any, bears to the number of votes represented by Company
Shares outstanding, and the Company shall at such time, subject to
applicable law, cause Merger Sub's designees to be so elected by its
existing Board of Directors. Subject to applicable law, the Company shall
take all action requested by Parent necessary to effect any such election,
including mailing to its stockholders the information statement (the
"INFORMATION STATEMENT") containing the information required by
Section 14(f) of the Exchange Act and Rule 14(f)-1 promulgated thereunder,
and the Company shall make such mailing with the mailing of the
Schedule 14D-9 (provided that Parent and Merger Sub shall have provided to
the Company on a timely basis all information required to be included in the
Information Statement with respect to Merger Sub's designees). In connection
with the foregoing, the Company will, subject to applicable law, promptly
either increase the size of the Board of Directors of the Company and/or
obtain the resignation of such number of its current directors as is
necessary to enable Merger Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above; provided, however, that
prior to the Effective Time the Board of Directors of the Company shall
always have at least two (2) members who are neither officers, directors,
stockholders or designees of Merger Sub or any of its affiliates ("MERGER
SUB INSIDERS"). If the number of directors who are not Merger Sub Insiders
is reduced below two (2) for any reason prior to the Effective Time, then
the remaining director who is not a Merger Sub Insider shall be entitled to
designate a person to fill such vacancy who is not a Merger Sub Insider and
who shall be a director not deemed to be a Merger Sub Insider for all
purposes of this Agreement. Following the election of Merger Sub's designees
to the Company's Board of Directors pursuant to this Section 2.03 and prior
to the Effective Time, (i) any amendment or termination of this Agreement by
the Company, (ii) any extension or waiver by the Company of the time for the
performance of any of the obligations or other acts of Parent or Merger Sub
under this Agreement or (iii) any waiver of the Company's rights hereunder
shall, in any such case, require the concurrence of a majority of the
directors of the Company then in office who are not Merger Sub Insiders.
ARTICLE III
THE MERGER
3.01 THE MERGER. At the Effective Time:
(a) STRUCTURE AND EFFECTS OF THE MERGER. The Merger will occur and the
separate corporate existence of Merger Sub will thereupon cease. The Company
will be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "SURVIVING CORPORATION") and will continue to be governed
by the laws of the State of Delaware, and the separate corporate existence
of the Company, with all its rights, privileges, immunities, powers and
franchises, will continue unaffected by the Merger except as set forth in
this Article III. The Merger will have the effects specified in the DGCL.
(b) CERTIFICATE OF INCORPORATION. The certificate of incorporation of
the Surviving Corporation (the "CERTIFICATE OF INCORPORATION") shall be the
certificate of incorporation of Merger Sub as in effect immediately prior to
the Effective Time, until duly amended in accordance with the terms thereof
and the DGCL.
(c) BYLAWS. The bylaws of the Surviving Corporation (the "BYLAWS") will
be the bylaws of Merger Sub as in effect immediately prior to the Effective
Time, until duly amended in accordance with the terms thereof and the
Certificate of Incorporation.
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(d) DIRECTORS. The directors of the Surviving Corporation will be the
directors of Merger Sub immediately prior to the Effective Time, and such
directors, together with any additional directors as may thereafter be
elected, will hold such office until such time as their successors shall be
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Certificate of Incorporation
and the Bylaws.
3.02 EFFECTIVE TIME. The Merger will become effective upon the filing, in
the office of the Secretary of State of the State of Delaware, of a certificate
of merger in accordance with Section 251 of the DGCL, or at such later date and
time as may be set forth in such certificate (the "EFFECTIVE TIME"). Subject to
the satisfaction or waiver of the conditions set forth in Article VII, the
parties will cause the Merger to become effective (a) on a date that is not
later than three Business Days after the last of the conditions set forth in
Article VII (other than conditions that by their terms cannot be satisfied until
the time of Closing) shall have been satisfied or waived in accordance with the
terms of this Agreement or (b) on such other date as the parties may agree in
writing.
3.03 CLOSING. The closing of the Merger (the "CLOSING") will take place at
the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New
York, New York, or at such other place as the parties shall agree, on the date
(the "CLOSING DATE") when the Effective Time is to occur.
3.04 MERGER CONSIDERATION. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action
on the part of Parent, Merger Sub or any holder of shares of capital stock of
the Company:
(a) Each Company Share issued and outstanding immediately prior to the
Effective Time (other than Dissenters' Shares, Treasury Shares and shares
held directly or indirectly by Parent), will be converted into the right to
receive, from the Surviving Corporation, an amount of cash equal to the
Offer Price (the "MERGER CONSIDERATION").
(b) At the Effective Time, each Company Share, other than Dissenter's
Shares, shall no longer be outstanding, shall be canceled and retired and
shall cease to exist, and each certificate (a "CERTIFICATE") formerly
representing any of such Company Shares shall thereafter represent only the
right to receive the Offer Price.
(c) In the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the Company changes the number of Company
Shares issued and outstanding as a result of a stock split, stock
combination, stock dividend, recapitalization, redenomination of share
capital or other similar transaction, the Merger Consideration and other
items dependent thereon shall be appropriately adjusted to provide to the
holders of Company Shares the same economic effect as contemplated by this
Agreement prior to such stock split, stock combination, stock dividend,
recapitalization, redenomination of share capital or other similar
transaction.
(d) Each Company Share that, immediately prior to the Effective Time, is
a Treasury Share or is owned directly or indirectly by Parent, will be
canceled and retired and will cease to exist, and no exchange or payment
will be made therefor.
(e) At the Effective Time, each share of common stock, par value $0.01
per share ("SUBSIDIARY COMMON STOCK"), of Merger Sub issued and outstanding
immediately prior to the Effective Time shall remain outstanding and each
certificate therefor shall continue to evidence one share of common stock of
the Surviving Corporation.
3.05 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Company Shares (other than holders of Dissenters' Shares) will cease
to be, and will have no rights as, stockholders of the Company, other than the
right to receive (a) any dividend or other distribution with respect to such
Company Shares with a record date occurring prior to the Effective Time, and
(b) the Offer Price.
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After the Effective Time, there will be no transfers on the stock transfer books
of the Company or the Surviving Corporation of Company Shares.
3.06 EXCHANGE PROCEDURE.
(a) As of the Effective Time, Parent shall deposit or cause to be
deposited in trust with a bank or trust company (which has been organized
under the laws of the United States or any state of the United States and
which has capital and surplus of at least $500,000,000) designated by Parent
(the "EXCHANGE AGENT"), for the benefit of the holders of Certificates, the
aggregate consideration payable in the Merger in respect of Company Shares
outstanding as of the Effective Time. Such deposited funds shall be used for
no other purpose. As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a Certificate, other
than the Company, and any wholly-owned Subsidiary of the Company, (i) 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 a form
and have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for cash. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive cash in an
amount equal to the product of the number of Company Shares represented by
such Certificate multiplied by the Merger Consideration, less any applicable
withholding taxes, and such Certificate shall be forthwith canceled. Until
surrendered as contemplated by this Section 3.06(a), each Certificate shall
be deemed at any time after the Effective Time to represent only the right
to receive, upon surrender of such Certificate in accordance with this
Section 3.06(a), the applicable amount of cash.
(b) NO FURTHER OWNERSHIP RIGHTS IN COMPANY SHARES. All cash paid upon
the surrender of Certificates in accordance with the terms of this
Article III shall be deemed to have been exchanged and paid in full
satisfaction of all rights pertaining to the Company Shares theretofore
represented by such Certificates and there shall be no further registration
of transfers on the stock transfer books of the Surviving Corporation of the
Company Shares represented by such Certificates that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Article III, except as
otherwise provided by applicable law.
(c) NO LIABILITY. Neither Parent, Merger Sub nor the Company nor any of
their Subsidiaries shall be liable to any holder of Company Shares for any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(d) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit
setting forth that fact by the Person claiming such loss, theft or
destruction and, the granting of a reasonable indemnity against any claim
that may be made against Parent, Merger Sub or the Exchange Agent with
respect to such Certificate, Parent or Merger Sub shall cause the Exchange
Agent to issue to such Person the applicable amount of the Merger
Consideration with respect to such lost, stolen or destroyed Certificate to
which the holder thereof may be entitled pursuant to this Article III.
3.07 OPTIONS; OTHER EQUITY AWARDS.
(a) At the Effective Time, each then outstanding Company Option, whether
vested or unvested, will be converted into an option to acquire a number of
shares of Parent common stock, par value $0.01 per share ("PARENT COMMON
STOCK"), equal to the product, rounded to the nearest whole share, of
(i) the number of Company Shares subject to such Company Option and
(ii) the
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Exchange Ratio. Such converted Company Options shall have a per share
exercise price, rounded to the nearest whole cent, equal to (x) the
aggregate exercise price for the Company Shares purchasable pursuant to such
Company Option divided by (y) the number of shares of Parent Common Stock
deemed purchasable under such Company Option in accordance with the
foregoing; provided, however, that in the case of any Company Option which
is an "incentive stock option" as defined under Section 422 of the Code, the
adjustments provided by this Section 3.07 shall be effected in a manner
consistent with Section 424(a) of the Code. Prior to the Effective Time, the
Company and Parent will make all necessary arrangements with respect to the
Company Shares Plans and the stock plans of Parent to permit the assumption
of such Company Options by Parent pursuant to this Section 3.07.
Notwithstanding the foregoing, each Company Option held by a non-employee
director shall, at the election of each such director, at the Effective Time
be cancelled and such holder shall receive in settlement thereof a cash
payment in an amount, if any, equal to the product of (i) the Offer Price
minus the per share exercise price for such Company Option and (ii) the
total number of Company Shares which the holder of such Company Option is
entitled to purchase under such Company Option.
(b) At the Effective Time, each Company Share that has been acquired
pursuant to the exercise of a Company Option or a stock purchase agreement
entered into under any of the Company Shares Plans (a "RESTRICTED STOCK
AGREEMENT"), which share is then subject to a risk of forfeiture, including
a repurchase right by the Company at a price equal to the original price, if
any, paid for such share (a "RESTRICTED SHARE"), shall be converted into the
right to receive the Offer Price in accordance with Section 3.04, and such
Merger Consideration shall continue to be subject to the same terms,
conditions and restrictions as were applicable to such Restricted Share and
shall be paid to the holder of such Restricted Share, without interest, only
upon the lapse of any risk of forfeiture or repurchase rights in accordance
with the vesting schedule to which such Restricted Share is subject.
(c) At the Effective Time, Parent will assume each then outstanding
Company Option, as converted pursuant to this Section 3.07, in accordance
with the terms of the Company Shares Plan under which such Company Option
was granted and the agreement, if any, by which it is evidenced and each
Restricted Stock Agreement. At the Effective Time, the Company shall assign
to Parent and Parent shall assume the Company's repurchase rights under each
Company Option and each Restricted Stock Agreement. At or prior to the
Effective Time, Parent will take all corporate action necessary to reserve
for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Company Options assumed by it in accordance with
this Section 3.07. On the date on which the Merger occurs, Parent will
file a registration statement on Form S-8, or another appropriate form, with
respect to shares of Parent Common Stock subject to such Company Options,
and will use its reasonable efforts to maintain the effectiveness of that
registration statement (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such Company Options remain
outstanding. Except as otherwise specifically provided by this
Section 3.07, the terms of the Company Options and Restricted Stock
Agreements (including any vesting schedule), and the relevant Company Shares
Plans, as in effect on the Effective Time, shall remain in full force and
effect with respect to the Company Options and Restricted Shares after
giving effect to the Merger and the assumptions by Parent as set forth
above.
(d) As soon as practicable following the Effective Time, Parent shall
deliver to the holders of Company Options and Restricted Shares appropriate
notices setting forth such holders' rights pursuant to the respective
Company Shares Plans and the agreements evidencing the grants of such
Company Options and Restricted Shares.
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3.08 WARRANTS.
(a) At the Effective Time, Parent shall grant to Northwest Airlines and
Imperial Bank, each holders of outstanding warrants to purchase Company
Shares (an "OLD WARRANT"), a warrant to purchase Parent Shares (a "NEW
WARRANT"). With respect to any such New Warrant (i) the number of shares of
Parent Common Stock subject to such New Warrant will be determined by
multiplying the number of Company Shares for which the corresponding Old
Warrant was exercisable by the Exchange Ratio (for Northwest, this
calculation will be made upon exercise of the New Warrant), rounding any
fractional shares down to the nearest whole share, and (ii) the exercise
price per share of such New Warrant will be determined by dividing the
exercise price per share applicable to the Old Warrant by the Exchange
Ratio, and rounding the exercise price thus determined down to the nearest
whole cent. Except as provided above, the converted or substituted New
Warrants shall be subject to the same terms and conditions (including
expiration date, vesting and exercise provisions) as were applicable to the
Old Warrants immediately prior to the Effective Time.
(b) Disney has entered into an ePartner Agreement with the Company
through which under certain conditions, the Company will issue to Disney a
warrant (the "OLD POTENTIAL DISNEY WARRANT"). Parent hereby agrees to adopt
the agreement and under the conditions specified in the existing ePartner
Agreement and will issue to Disney a warrant (the "NEW POTENTIAL DISNEY
WARRANT"). With respect to the New Potential Disney Warrant (i) the number
of shares of Parent Common Stock subject to such New Potential Disney
Warrant will be determined by multiplying the number of Company Shares for
which the corresponding Old Potential Disney Warrant was exercisable by the
Exchange Ratio, rounding any fractional shares down to the nearest whole
share, and (ii) the exercise price per share of such New Potential Disney
Warrant will be determined by dividing the exercise price per share
applicable to the Old Potential Disney Warrant by the Exchange Ratio, and
rounding the exercise price thus determined down to the nearest whole cent.
Except as provided above, the converted or substituted New Potential Disney
Warrant shall be subject to the same terms and conditions (including
expiration date, vesting and exercise provisions) as were applicable to the
Old Potential Disney Warrant immediately prior to the Effective Time.
3.09 DISSENTING STOCKHOLDERS. Dissenters' Shares will be paid for by
Parent in accordance with Section 262 of the DGCL. The Company shall give Parent
(a) prompt notice of any written demands for fair value received by the Company,
withdrawals of such demands, and any other related instruments served pursuant
to Section 262 of the DGCL and received by the Company and (b) the opportunity
to direct all negotiations and proceedings with respect to demands for fair
value under the DGCL. The Company shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any demands for
fair value for Dissenters' Shares or offer to settle, or settle, any such
demands.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 DISCLOSURE SCHEDULES. On or prior to the date hereof, the Company
delivered to Parent, and Parent delivered to the Company, a schedule (with
respect to each such party, its "DISCLOSURE SCHEDULE") setting forth, among
other things, items the disclosure of which is necessary or appropriate either
(a) in response to an express informational requirement contained in or
requested by a provision hereof or (b) as an exception to one or more
representations or warranties contained in Section 4.02 or 4.03, respectively,
or to one or more of its covenants contained in Article V or VI.
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4.02 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. References below to
the "knowledge of the Company" shall mean the actual knowledge of Gadi Maier,
Ken Pelowski, Bob Brown, David Muhlitner, Eric Sirkin, David Breyfogle and John
Anderson. Except as specifically disclosed in the Company Disclosure Schedule
referencing the specific section, the Company hereby represents and warrants to
Parent as follows:
(a) DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER.
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted. The Company is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions where
the failure to be so qualified or licensed and in good standing could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company. The respective Constitutive
Documents of the Company do not contain any provision limiting or
otherwise restricting the ability of the Company to control its
Subsidiaries. The Company Disclosure Schedule sets forth a list of all
Subsidiaries of the Company and their respective jurisdictions of
incorporation or organization and identifies the Company's (direct or
indirect) percentage of equity ownership therein.
(ii) Each Subsidiary is a corporation duly organized, validly
existing and in good standing (with respect to jurisdictions which
recognize the concept of good standing) under the laws of the
jurisdiction of its incorporation and each has all requisite corporate
power and authority to own, lease and operate its properties and to carry
on its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and
authority could not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect on the Company. Each
Subsidiary is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be so qualified or licensed and in good standing could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect on the Company. The respective Constitutive Documents of the
Subsidiaries do not contain any provision limiting or otherwise
restricting the ability of the Company to control its Subsidiaries.
(b) CAPITAL STOCK.
(i) The Company has (A) 200,000,000 authorized shares of Company
Common Stock, of which 35,116, 995 shares were outstanding as of
August 23, 2000, and (B) 10,000,000 authorized shares of Company
Preferred Stock, of which one share of Series D1, par value $0.0001 per
share, one share of Series D2, par value $0.0001 per share and one share
of Series D3, par value $0.0001 per share were outstanding as of
August 23, 2000. All of the outstanding shares of Company Common Stock
and Company Preferred Stock have been duly authorized and are validly
issued, fully paid and nonassessable, and have not been issued in
violation of any preemptive rights.
(ii) Set forth on the Company Disclosure Schedule is a list of all
existing Rights of any kind with respect to the Company, and no other
securities or obligations evidencing Rights are authorized, issued or
outstanding. The Company does not have outstanding any bonds, debentures,
notes or other obligations the holders of which have the right to vote
(or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter.
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(iii) Set forth on the Company's Disclosure Schedule is a list of
each Company Compensation and Benefit Plan under which any shares of
capital stock of the Company or any Rights with respect thereto have been
or may be awarded or issued ("COMPANY SHARES PLANS"). As of August 23,
2000, the Company has outstanding Company Options representing the right
to acquire 8,559,076 shares of Company Common Stock. As of August 23,
2000, there were 21,014,599 shares of Company Common Stock authorized for
issuance pursuant to the Company Shares Plans. Except as described in the
immediately preceding sentence, the Company has no Company Common Stock
authorized for issuance pursuant to any Company Shares Plans.
(c) SUBSIDIARIES. No equity securities of any of the Company's
Subsidiaries are or may become required to be issued (other than to the
Company or a wholly-owned Subsidiary of the Company) by reason of any Rights
with respect thereto. There are no Contracts by which any of the Company's
Subsidiaries is or may be bound to sell or otherwise issue any shares of its
capital stock, and there are no Contracts relating to the rights of the
Company to vote or to dispose of such shares. All of the shares of capital
stock of each of the Company's Subsidiaries are validly issued, fully paid
and nonassessable and subject to no Rights and are owned by the Company or a
Subsidiary of the Company free and clear of any Liens.
(d) CORPORATE AUTHORITY AND ACTION.
(i) The Company has the requisite corporate power and authority, and
has taken all corporate action necessary, in order to authorize the
execution and delivery of, and performance of its obligations under this
Agreement and, subject only to obtaining the requisite adoption of this
Agreement by the holders of a majority of the Company Shares entitled to
vote at the Company Shareholders Meeting (the "COMPANY REQUISITE VOTE"),
to consummate the Merger. This Agreement constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (the "BANKRUPTCY AND EQUITY EXCEPTION").
(ii) The Company has taken all action necessary in order to exempt
this Agreement, the Stockholders Agreements and the Merger and the other
transactions contemplated hereby and thereby from, and this Agreement,
the Stockholders Agreements and the Merger and the other transactions
contemplated hereby and thereby are exempt from, the requirements of
Section 203 of the DGCL.
(e) GOVERNMENTAL FILINGS; NO VIOLATIONS. Other than those filings and/or
notices made (i) pursuant to Section 3.02, (ii) under the HSR Act, the
Exchange Act and the Securities Act, (iii) under state securities or "blue
sky" laws and (iv) under rules and regulations of Nasdaq, and (v) such other
filings and/or notices as to which any failure to file such filings or
notices could not be reasonably expected to be material to the Company, no
notices, reports, applications or other filings are required to be made by
the Company or any of its Subsidiaries with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained
by any of them from, any Governmental Authority in connection with the
execution and delivery of this Agreement by the Company and the consummation
by the Company of the Merger and the other transactions contemplated hereby.
Subject to obtaining the Company Requisite Vote, and the making or obtaining
of all filings, notices, applications, consents, registrations, approvals,
permits or authorizations with or of any relevant Governmental Authority
with respect to the Merger and the other transactions contemplated hereby,
the execution, delivery and performance by the Company of this Agreement and
the consummation by the Company of the Merger and the other transactions
contemplated hereby do not and will not (1) constitute a breach or violation
of, or a
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default under, any law, rule or regulation or any judgment, decree, order,
governmental or non-governmental permit or license, or (2) constitute a
breach or violation of, or a default under, or cause or allow the
acceleration or creation of a Lien (with or without the giving of notice,
passage of time or both) pursuant to, any Material Contract of it or of any
of its Subsidiaries or to which the Company or any of the Company's
Subsidiaries or its or their properties is subject or bound or
(3) constitute a breach or violation of, or a default under, the
Constitutive Documents of the Company or any of its Subsidiaries or
(4) require any consent or approval under any such law, rule, regulation,
judgment, decree, order, governmental or non-governmental permit or license
or the consent or approval of any other party to any such Contract except,
in the case of clauses (1) and (4), as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(f) REPORTS. The Company and its Subsidiaries have filed all reports,
registrations, statements and other filings, together with any amendments
required to be made with respect thereto, that they were required to file
since September 15, 1999 with (i) the SEC or (ii) any other applicable
Governmental Authority (all such reports and statements, including the
financial statements, exhibits and schedules thereto, being collectively
referred to herein as the "REPORTS"), including all Reports required under
the Securities Laws. Each of the Reports, when filed, complied as to form
with the statutes, rules, regulations and orders enforced or promulgated by
the Governmental Authority with which they were filed.
(g) COMPANY SEC DOCUMENTS AND FINANCIAL STATEMENTS.
(i) Since November 22, 1999, the Company has timely filed all
required reports, schedules, forms, statements and other documents
(including exhibits and all other information incorporated therein) with
the SEC ("COMPANY SEC DOCUMENTS"). As of their respective dates (and
without giving effect to any amendments or modifications filed after the
date of this Agreement), each of the Company SEC Documents, including the
financial statements, exhibits and schedules thereto, filed and publicly
available with the SEC prior to the date hereof complied (and each of the
Company SEC Documents filed after the date of this Agreement, will
comply) as to form with applicable Securities Laws and did not (or in the
case of statements, circulars or reports filed after the date of this
Agreement, will not) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(ii) Each of the Company's consolidated statements of financial
condition or balance sheets included in or incorporated by reference into
the Company SEC Documents, including the related notes and schedules,
fairly presented in all material respects (or, in the case of Company SEC
Documents filed after the date of this Agreement, will fairly present in
all material respects) the consolidated financial position of the Company
and its Subsidiaries as of the date of such balance sheet and each of the
Company's consolidated statements of income, cash flows and changes in
stockholders' equity included in or incorporated by reference into the
Company SEC Documents, including any related notes and schedules
(collectively, the foregoing financial statements and related notes and
schedules are referred to as the "COMPANY FINANCIAL STATEMENTS"), fairly
presented in all material respects (or, in the case of Company SEC
Documents filed after the date of this Agreement, will fairly present in
all material respects) the consolidated results of operations, cash flows
and changes in stockholders' equity, as the case may be, of the Company
and its Subsidiaries for the periods set forth therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments), in
each case in accordance with GAAP consistently applied during the periods
involved (except as may be noted therein and except, in the case of
unaudited statements, for the absence of notes).
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(h) ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in the
Company Financial Statements filed prior to the date hereof, none of the
Company or its Subsidiaries has any obligation or liability (absolute,
accrued, contingent or otherwise), that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect on
the Company.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as expressly
contemplated by this Agreement or the transactions contemplated hereby,
since January 31, 2000, the Company and its Subsidiaries have conducted
their business only in the ordinary and usual course consistent with past
practice, and there has not been (i) any Material Adverse Effect on the
Company or any development or combination of developments that
individually or in the aggregate has had or could reasonably be expected
to have a Material Adverse Effect on the Company, (ii) any declaration,
setting aside or payment of any dividend or other distribution (whether
in cash, stock or property) with respect to any of the Company's capital
stock, (iii) any split, dividend, combination, recapitalization or
similar transaction with respect to any of the Company's capital stock or
any issuance or the authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares of the Company's
capital stock, except for issuances of Company Shares upon the exercise
of Company Options awarded prior to the date hereof in accordance with
their terms, (iv) any granting by the Company or any of its Subsidiaries
to any Employee of any increase in compensation, bonus or other benefits
(including the right to accelerated vesting with respect to any Company
Option or Restricted Share or any other change in control related benefit
or compensation), except for normal increases in the ordinary course of
business and in accordance with past practice or as was required under
any employment agreements in effect as of January 31, 2000, (v) any
granting by the Company or any of its Subsidiaries to any Employee of any
increase in severance or termination pay, except in the ordinary course
of business and consistent with past practice, (vi) any entry by the
Company or any of its Subsidiaries into, or any amendments of, any
Company Compensation and Benefit Plan, (vii) except as required by a
change in GAAP and concurred in by the Company's independent auditors,
any change in accounting methods, principles or practices by the Company
materially affecting its assets, liabilities or business or (viii) any
tax election made or changed that would be Material to the Company or any
of its tax attributes or any settlement or compromise of any Material tax
audit.
(j) LITIGATION; REGULATORY ACTION. There are no material civil,
criminal, or administrative actions, suits or litigation, proceedings,
investigations or controversies ("LITIGATION") before any court, arbitrator,
mediator, or Governmental Authority pending against or involving the Company
or any of its Subsidiaries, and, to the Company's knowledge, no such
Litigation has been threatened.
(k) COMPLIANCE WITH LAWS. Each of the Company and its Subsidiaries:
(i) in the conduct of business is in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto
except, in each case, as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company;
(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made or obtained all filings, notices, applications,
consents, registrations or permits with, to or of all Governmental
Authorities that are required in order to permit it to own and operate
its businesses as presently conducted; and all such permits, licenses,
authorizations, orders and approvals are in full force and effect and, to
the Company's knowledge, no suspension or cancelation of any of them is
threatened or reasonably likely; and all such filings, applications and
registrations are current, except, in each of the foregoing cases, any
permits, licenses, authorizations, orders, approvals, filings, notices,
applications, consents, registrations, or
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permits the lack of which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
(l) VOTE REQUIRED. The Company Requisite Vote is the only vote of the
holders of any class or series of the Company capital stock necessary to
adopt this Agreement and approve the transactions contemplated hereby.
(m) BROKERS; FINANCIAL OPINION. (i) None of the Company or its Subsidiaries,
or any of their directors, officers or employees, has employed any broker or
finder, or incurred any broker's or finder's commissions or fees, in connection
with the transactions contemplated hereby, except that the Company has engaged
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") as its financial
advisors, the arrangements with which have been provided to Parent.
(ii) The Company has received the oral opinion (to be subsequently
confirmed in writing) of DLJ, on or prior to the date of this Agreement,
to the effect that, subject to certain qualifications and limitations
stated by DLJ, as of the date of such opinion, the consideration to be
received by the holders of Company Shares in the Offer and the Merger is
fair from a financial point of view to such holders (other than Parent
and its affiliates).
(n) EMPLOYEE BENEFIT PLANS.
(i) The Company Disclosure Schedule contains a complete list of all
material bonus, vacation, deferred compensation, severance, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans, all
employment, change-in-control, severance, consulting, employee loan, or
similar agreements or contracts, all medical, dental, disability, health
and life insurance plans, all other employee benefit and fringe benefit
plans, contracts or arrangements, whether written or oral and whether or
not legally binding, maintained, sponsored, contributed to or required to
be contributed to by the Company or any of its Subsidiaries for the
benefit of any Employee or the beneficiaries of any Employee, or pursuant
to which the Company or any of its Subsidiaries may have any material
liability (collectively, the "COMPANY COMPENSATION AND BENEFIT PLANS").
(ii) True and complete copies of the Company Compensation and Benefit
Plans, including, any trust instruments and/or insurance contracts, if
any, forming a part thereof, and all amendments thereto have been
supplied to Parent. Neither the Company nor any of its Subsidiaries has
any plan or commitment whether legally binding or not, to establish any
new Company Compensation and Benefit Plan or to modify or to terminate
any Company Compensation and Benefit Plan (except as required by this
Agreement or as may be necessary to ensure compliance with the qualifying
requirements imposed by the Code).
(iii) Each of the Company Compensation and Benefit Plans has in all
material respects been administered in accordance with the terms thereof
and all applicable law. Each Company Compensation and Benefit Plan which
is an "employee pension benefit plan" within the meaning of Section 3(2)
of ERISA (each such plan, a "PENSION PLAN") and which is intended to be
qualified under Section 401(a) of the Code is so qualified and has
received a favorable determination letter from the IRS, and the Company
is not aware of any circumstances which could result in the revocation or
denial of any such favorable determination letter. No Pension Plan is
subject to Title IV of ERISA or Section 412 of the Code and neither the
Company, nor any of its Subsidiaries nor any ERISA Affiliate of the
Company or any of its Subsidiaries has at any time sponsored, maintained,
contributed to or been required to contribute to any employee pension
benefit plan subject to Title IV of ERISA or Section 412 of the Code. No
"prohibited transaction," within the meaning of Section 4975 of the Code
or Section 406 of ERISA, has occurred with respect to any Company
Compensation and Benefit Plan that is not
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exempt from such provisions of the Code or ERISA pursuant to
Section 4975 of the Code or Section 404 of ERISA. Except as previously
disclosed in the Company Disclosure Schedule, there is no pending or, to
the Company's knowledge, threatened litigation or governmental audit,
examination or investigation relating to the Company Compensation and
Benefit Plans.
(iv) Neither the Company nor any of its Subsidiaries has at any time
had any ERISA Affiliates (other than the Company or any of its
Subsidiaries). For purposes of this Agreement, the term "ERISA AFFILIATE"
means, with respect to any Person, each business or entity which is a
member of a "controlled group of corporations," under "common control" or
an "affiliate service group" with such Person within the meaning of
Section 414(b), (c) or (m) of the Code, or is under "common control" with
such Person, within the meaning of Section 4001(a)(14) of ERISA.
(v) All contributions, premiums and payments required to be made
under the terms of any Company Compensation and Benefit Plan have been
made.
(vi) Neither the Company nor any of its Subsidiaries (A) maintains or
contributes to any Company Compensation and Benefit Plan which provides,
or has any liability to provide, life insurance, medical, severance or
other employee welfare benefits to any Employee upon his or her
retirement or termination of employment or service, except as may be
required by Section 4980B of the Code; or (B) has ever represented,
promised or contracted (whether in oral or written form) to any Employee
(either individually or to employees as a group) that such Employee(s)
would be provided with life insurance, medical, severance or other
employee welfare benefits upon their retirement or termination of
employment or service, except to the extent required by Section 4980B of
the Code.
(vii) The execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) (A) constitute an
event under any Company Compensation and Benefit Plan, trust or loan that
will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, deemed
satisfaction of goals or conditions, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any Employee,
(B) result in the triggering or imposition of any restrictions or
limitations on the right of the Company, any of its Subsidiaries or the
Surviving Corporation to amend or terminate any Company Compensation and
Benefit Plan and receive the full amount of any excess assets remaining
or resulting from such amendment or termination, subject to applicable
taxes, or (C) result in any payment or benefit that will or may be made
by the Company, any of its Subsidiaries, the Surviving Corporation or any
of their respective affiliates that will be characterized as an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code.
(viii) Each of the Company and its Subsidiaries (A) is in compliance
in all material respects with all applicable federal, state and local
laws, rules and regulations respecting employment, employment practices,
labor, terms and conditions of employment and wages and hours, in each
case, with respect to any Employee; (B) has withheld all amounts required
by law or by agreement to be withheld from the wages, salaries and other
payments to Employees; (C) is not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the foregoing; and
(D) except for liabilities arising in the ordinary course of business, is
not liable for any payment to any trust or other fund or to any
governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits for Employees.
(ix) The contributions of the Company and any of its Subsidiaries to
any trust described in Section 501(c)(9) of the Code have complied in all
respects with Section 419A of the Code.
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(x) There is no commitment covering any Employee that, individually
or in the aggregate, would be reasonably likely to give rise to the
payment of any amount that would result in a loss of tax deduction
pursuant to Section 162(m) of the Code.
(o) LABOR RELATIONS. Each of the Company and its Subsidiaries is in
compliance with all currently applicable laws respecting employment
including, without limitation, the Immigration Reform and Control Act, the
Worker Adjustment and Retraining Notification Act, any such laws respecting
employment discrimination, disability rights or benefits, equal opportunity,
plant closure issues, affirmative action, workers' compensation, employee
benefits, severance payments, labor relations, employee leave issues, wage
and hour standards, occupational safety and health requirements and
unemployment insurance and related matters, other than any requirements
where any noncompliance could not, individually or in the aggregate,
reasonably be expected to be material to the Company. Neither the Company
nor any of its Subsidiaries is a party to, is negotiating or is bound by any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is the Company
or any of its Subsidiaries the subject of a proceeding asserting that the
Company or any such Subsidiary has committed an unfair labor practice
(within the meaning of the National Labor Relations Act) or seeking to
compel it or such Subsidiary to bargain with any labor organization as to
wages and conditions of employment, nor is there any strike or other labor
dispute involving the Company or any of its Subsidiaries pending or, to its
knowledge, threatened, nor is it aware of any activity involving the
Company's or any of its Subsidiaries' employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
(p) TAX MATTERS.
(i) All Tax Returns required to be filed by the Company or its
Subsidiaries either on a separate or combined or consolidated basis on or
prior to the Effective Time have been or will be prepared in good faith
and timely filed with the appropriate Governmental Authority on or prior
to the Effective Time or by the due date thereof including extensions,
except where the failure to file such Tax Returns could not reasonably be
expected to be material to the Company. All such Tax Returns are (or, as
to Tax Returns not filed on the date hereof, will be) complete and
accurate in all material respects.
(ii) All Taxes required to be paid (whether or not shown as due on
the Tax Returns) either (i) have been fully paid (except with respect to
matters contested in good faith as set forth in the Company Disclosure
Schedule) or (ii) are adequately reflected as a liability on the
Company's or its Subsidiaries' books and records. Except for an
immaterial amount of Taxes, all Taxes required to be collected or
withheld from third parties have been collected or withheld.
(iii) With respect to any period for which Tax Returns have not yet
been filed, or for which Taxes are not yet due or owing, the Company and
its Subsidiaries have made, in accordance with past practice and custom,
due and sufficient accruals for such Taxes in their respective books and
records and financial statements.
(iv) The Company and getthere Limited, and to the knowledge of the
Company, its Subsidiaries other than getthere Limited, have not waived
any statute of limitations, or agreed to any extension of time, with
respect to federal income or state Taxes or a Tax assessment or
deficiency.
(v) As of this date, (i) there are not pending or, to the knowledge
of the Company, threatened, any audits, examinations, investigations or
other proceedings in respect of Taxes or Tax matters and (ii) there are
not any unresolved questions or claims concerning the
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<PAGE>
Company's or any of its Subsidiaries' Tax liability that were raised by
any Taxing Authority in a communication to the Company or any Subsidiary.
(vi) The Company has made available to Parent correct and complete
copies of the United States federal income and all state income or
franchise and sales or use Tax Returns filed by the Company for each of
its fiscal years ended on or about December 31, 1995, 1996, 1997 and
1998.
(vii) The Company has made available to Parent correct and complete
copies of the United States federal income and all state income or
franchise and sales or use Tax Returns filed by each Subsidiary in the
possession of the Company.
(viii) The Company has not distributed the stock of a "controlled
corporation" (within the meaning of that term as used in section 355(a)
of the Code) in a transaction subject to section 355 of the Code within
the past two years.
(ix) None of the Company and its Subsidiaries currently is the
beneficiary of any extension of time within which to file any Tax Return.
(x) No claim has ever been made in writing by an authority in a
jurisdiction where any of the Company and its Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction, nor is the Company aware of any facts that would give rise
to such a claim.
(xi) The Company Disclosure Schedule lists all federal, state, local
and foreign Tax Returns filed with respect to any of the Company and its
Subsidiaries for taxable periods ending on or after January 31, 2000,
indicates those Tax Returns of the Company that have been audited, and
indicates those Tax Returns of the Company and its Subsidiaries that
currently are subject of an audit.
(xii) None of the Company and its Subsidiaries is a party to any Tax
allocation or sharing agreement.
(xiii) As of January 31, 2000, the net operating loss carryforward of
the Company and its Subsidiaries for federal income Tax purposes was not
less than $40,000,000, and except as set forth in the Company Disclosure
Schedule, the Company and its Subsidiaries are not subject to any
limitations (e.g. Sections 382 and 384 of the Code or under the
consolidated return regulations pursuant to Section 1502 of the Code or
similar provisions of state laws affecting such net operating loss
carryforwards for state income tax or state franchise tax purposes) on
its ability to use the net operating loss carryforward other than those
that may arise as a result of the transactions contemplated by this
Agreement.
(xiv) The Company Disclosure Schedule lists, as of January 31, 2000,
all net operating loss carryforwards of the Company for state income tax
or state franchise tax purposes.
(q) INTELLECTUAL PROPERTY.
(i) Each item of Company Intellectual Property owned by the Company
or its Subsidiaries that is a patent, patent application, trademark,
trademark application, service mark, service mark application, logo,
trade name, domain name, corporate name, copyright registration,
copyright application, mask work registration, or mask work application
is set forth on the Company Disclosure Schedule.
(ii) The Company and its Subsidiaries possess all right, title and
interest in and to the Company Intellectual Property owned by the Company
or its Subsidiaries that is material to the business of the Company, free
and clear of any Liens, and have the right to require the applicant of
any Company Intellectual Property of the Company, its Subsidiaries, or
its
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<PAGE>
Employees that is material to the business of the Company that is an
application, including but not limited to patent applications, trademark
applications, service mark applications, copyright applications, or mask
work applications, to transfer ownership to the Company or its
Subsidiaries of the application and of the registration once it issues.
All registered patents, trademarks, service marks and copyrights listed
on the Company Disclosure Schedule that are material to the business of
the Company are valid and subsisting and in full force and effect.
(iii) The Company and its Subsidiaries have obtained valid and
effective assignments from all of their employees, former employees,
independent contractors and former independent contractors (collectively
defined herein as "ORIGINATORS") of all of such Originators' rights in
any Intellectual Property developed by such Originators while employed by
or under contract with the Company and its Subsidiaries, except where any
failure to obtain such assignments could not reasonably be expected to be
material to the Company and its Subsidiaries, taken as a whole.
(iv) The Company or its Subsidiaries own or have the right to use all
Company Intellectual Property that is necessary for the ownership,
maintenance and operation of the Company's and its Subsidiaries'
properties and assets and the conduct of the Company's and its
Subsidiaries' businesses as they have been and are currently conducted;
and the Company and its Subsidiaries have the right to use all of the
Company Intellectual Property in all jurisdictions in which the Company
and its Subsidiaries have conducted or presently conduct their
businesses; and the consummation of the transactions contemplated hereby
will not alter or impair any such rights in any manner that could
reasonably be expected to be material to the Company and its
Subsidiaries, taken as a whole.
(v) To the knowledge of the Company, the Company owns or has the
right to use all of the Intellectual Property that the Company reasonably
believes is necessary for the conduct of the businesses set forth on
Section 5.01(a)(ii)(A) of the Company's Disclosure Schedule.
(vi) To the Company's knowledge, the Company and its Subsidiaries
have not, and the continued operation of the businesses as presently
conducted will not interfere with, infringe upon, misappropriate or
otherwise come into conflict with any Intellectual Property rights of
third parties, and the Company or its Subsidiaries have not received any
charge, complaint, claim, demand or notice so alleging (including any
claim that the Company and its Subsidiaries must license or refrain from
using any Intellectual Property rights of any third party).
(vii) To the Company's knowledge, no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Company Intellectual Property in any manner that could reasonably be
expected to have a Material Adverse Effect on the Company.
(viii) No action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand has been made, is pending, or, to the
knowledge of the Company, is threatened which challenges the legality,
validity, enforceability, use or ownership of any Company Intellectual
Property owned by the Company that is material to the business of the
Company.
(ix) To the Company's knowledge, no action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand has been made,
is pending or is threatened, which challenges the legality, validity,
enforceability, use or ownership of any Company Intellectual Property
owned by a Person other than the Company or its Subsidiaries.
(r) NO TERMINATION OF BUSINESS RELATIONSHIP. As of the date hereof, none
of the Persons that are parties to the Contracts listed on Section 4.02(r)
of the Company Disclosure Schedule with which the Company or any Subsidiary
has a material business relationship has given notice in
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writing of any intention to cancel or otherwise terminate, prior to the end
of the applicable Contract term, its Contract with the Company or any
Subsidiary and, to the knowledge of the Company as of the date hereof, no
event has occurred or failed to occur which (i) would, to the knowledge of
the Company as of the date hereof, precipitate the cancelation or
termination of such Contract or (ii) would entitle any such entity or
customer to terminate such Contract.
(s) CONTRACTS. (i) Set forth in the Company Disclosure Schedule is a
true and complete list of the following Contracts, whether written or oral,
entered into by either the Company or any of its Subsidiaries, as of the
date hereof:
(A) Global Manager Agreements that are material to the business of the
Company;
(B) ePartner Agreements that are material to the business of the
Company;
(C) Content Delivery Agreements;
(D) FlightRez Agreements that are material to the business of the
Company;
(E) Contracts in respect of any joint venture, partnership or other
similar arrangement (including, without limitation, any joint development
agreement), other than Contracts referred to in the preceding paragraphs
(A) through (D) whether or not required to be scheduled;
(F) Contracts through which the Company committed to issue Warrants
after the date hereof if certain terms or milestones are achieved;
(G) Contracts under which the Company or any Subsidiary may have an
obligation to or has agreed to reimburse any Person for amounts in excess of
$25,000 received by the Company or such Subsidiary in the event certain
milestones or minimum requirements are not achieved;
(H) Contracts relating to the acquisition by the Company or any
Subsidiary of any operating business or the capital stock of any other
Person that have not been consummated or that have been consummated but
contain warranties, representations, covenants, guaranties, indemnities or
other obligations that remain in effect;
(I) Contracts relating to joint defense, settlement, compromise or other
actions or restrictions on actions by the Company that would materially
affect the Company's position with respect to any pending, or to the
knowledge of the Company, threatened litigation by or against the Company;
(J) Contracts (or group of related Contracts) relating to the purchase
of supplies, products, goods, or services if the termination of any such
Contract could individually or in the aggregate reasonably be expected to
have a Material Adverse Effect on the Company;
(K) Contracts relating to the lending or borrowing of money or other
indebtedness for borrowed money in excess of $75,000 or pursuant to which
the Company or any of its Subsidiaries' assets are or may become subject to
a lien, charge, mortgage or other encumbrance;
(L) Contracts under which the Company or any Subsidiary has agreed to
indemnify any person for in excess of $2 million, except for indemnification
obligations incurred in the ordinary course of business, it being understood
that business interruption is not in the ordinary course, and except those
contracts already set forth on the Company Disclosure Schedule pursuant to
clauses (A) through (K) above;
(M) Contracts that contain non-competition, exclusivity or other similar
provisions that would materially limit, impair or restrict the ability of
the Company, the Surviving Corporation or any of their Subsidiaries to do
business in any line of business or in any geographical area or with any
person;
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(N) Contracts relating to advertising arrangements, except those
contracts terminable (other than in the case of default by a party thereto)
on 90 days' or less notice without any penalty and those involving receipt
or payment of less than $75,000 in any year;
(O) Contracts pursuant to which the Company accesses the global
distribution system operated by another entity;
(P) Contracts pursuant to which the Company or any Subsidiary leases,
subleases or otherwise has the right to use any real property;
(Q) Contracts with any Employee of the Company or consultant relating to
severance, bonus or similar arrangements that become operative in connection
with or as a result of the Merger; and
(R) Contracts (other than those specified in any of clauses (A) through
(Q) of this clause (i)) if the termination of such Contract could reasonably
be expected to have a Material Adverse Effect on the Company (individually,
a "MATERIAL CONTRACT", and collectively, the "Material Contracts") (all
Contracts required to be listed in clauses (A) through (R) are collectively,
the "DISCLOSED CONTRACTS").
(ii) Unless precluded by an applicable confidentiality agreement or
except as specified in the Company Disclosure Schedule, true and complete
copies of all Disclosed Contracts listed on the Company Disclosure
Schedule have been made available to Parent. All of the Disclosed
Contracts referred to in the preceding paragraph (i) clauses (A) through
(R) are, and after giving effect to the Merger will be, legal, valid,
binding, in full force and effect and enforceable in accordance with
their terms against the Company, or the applicable Subsidiary (as the
case may be), and, to the knowledge of the Company, against the
respective counterparties to such Disclosed Contracts subject to (x) the
Bankruptcy and Equity Exception and (y) obtaining the consent of the
other party to such Disclosed Contract in connection with the Merger.
None of the Company or any of its Subsidiaries or, to the knowledge of
the Company as of the date hereof, any other party, is in breach,
violation or default under any Disclosed Contract listed or required to
be listed on the Company Disclosure Schedule where such breach, violation
or default could reasonably be expected to have a Material Adverse Effect
on the Company. To the knowledge of the Company, no event exists which,
with notice or lapse of time or both, would constitute a material breach,
violation or default, or give rise to any material lien, charge or
encumbrance or right of termination, modification, cancelation,
prepayment, suspension, limitation, revocation or acceleration, under any
Disclosed Contract listed or required to be listed on the Company
Disclosure Schedule.
(t) INSURANCE. The Company and each Subsidiary maintain in full force
and effect insurance with responsible and reputable insurance companies or
associations in such amounts, on such terms, with such deductibles, and
covering such risks (including fire, casualty, and liability), as is
consistent with industry practice. There is no material default with respect
to any provision contained in any insurance policy, nor has the Company or
any Subsidiary failed to give any notice or present any claim under any such
policy in due and timely fashion. All premiums due and payable with respect
to the insurance policies have been paid. All such policies are in full
force and effect. Neither the Company nor any Subsidiary has failed to give
any notice or present any claim under any such insurance policy in due and
timely fashion or as required by any of such insurance policies or has
otherwise, through any act, omission or non-disclosure, jeopardized or
impaired full recovery of any claim under such policies, and there are no
claims by the Company or any Subsidiary under any of such policies to which
any insurance company is denying liability or defending under a reservation
of rights or similar clause. No notice of cancelation or non-renewal of any
such policy has been received by the Company or any Subsidiary.
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(u) ENVIRONMENTAL. Except as could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company,
(i) the Company and its Subsidiaries are in compliance with all applicable
Environmental Laws, have obtained, and are in material compliance with, all
permits, licenses, authorizations, registrations and other governmental
consents required by applicable Environmental Laws ("ENVIRONMENTAL
PERMITS"), and have made all appropriate filings for issuance or renewal of
such Environmental Permits; (ii) to the knowledge of the Company, there is
no material contamination of, and there have been no material releases or
threatened releases of Hazardous Substances at, any real property owned,
leased or operated by the Company, or any of its Subsidiaries, and
(iii) there are no civil, criminal or administrative actions, suits or
proceedings pending against the Company before any court or Governmental
Authority or, to the knowledge of the Company, threatened against the
Company that are based on or related to any Environmental Matters.
4.03 REPRESENTATIONS AND WARRANTIES OF PARENT. Except as specifically
disclosed in the Parent SEC Documents or in the Parent Disclosure Schedule
referencing the specific Section, Parent hereby represents and warrants to the
Company as follows:
(a) DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER.
(i) Parent is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.
Parent is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be so qualified or licensed and in good standing could not reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect on Parent.
(ii) Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect on Parent. Merger Sub is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions where
the failure to be so qualified or licensed and in good standing could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on Parent.
(b) CORPORATE AUTHORITY AND ACTION. Parent and Merger Sub each have the
requisite corporate power and authority, and have taken all corporate action
necessary, in order to authorize the execution and delivery of, and
performance of their respective obligations under, this Agreement and to
consummate the Merger. This Agreement is a valid and binding agreement of
Parent and Merger Sub, enforceable in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(c) GOVERNMENTAL FILINGS; NO VIOLATIONS. Other than those filings and/or
notices made (i) pursuant to Section 3.02, (ii) under the HSR Act, the
Exchange Act and the Securities Act, (iii) under the rules and regulations
of the NYSE and (iv) such other filings and/or notices as to which any
failure to file such filings or notices could not be reasonably expected to
be material to Parent, no notices, reports, applications or other filings
are required to be made by Parent or Merger Sub with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained
by either of them from, any Governmental Authority in connection with the
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execution and delivery of this Agreement by Parent and by Merger Sub and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby. The making or obtaining of all filings,
notices, applications, consents, registrations, approvals, permits or
authorizations with or of any relevant Governmental Authority with respect
to the Merger and the other transactions contemplated hereby, the execution,
delivery and performance of this Agreement, and the consummation of the
Merger and other transactions contemplated hereby, does not and will not
(1) constitute a breach or violation of, or a default under, any law, rule
or regulation or any judgment, decree, order, governmental or
non-governmental permit or license, or any Contract of it or to which Parent
or its properties are subject or bound, (2) constitute a breach or violation
of, or a default under, the Constitutive Documents of Parent or Merger Sub,
or (3) require any consent or approval under any such law, rule, regulation,
judgment, decree, order, governmental permit or license, or the consent or
approval of any other party to any such Contract except, in the case of
clauses (1) and (3), as could not individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Parent.
(d) OFFER DOCUMENTS; COMPANY PROXY STATEMENT; SCHEDULE 14D-9. None of
the Offer Documents, the Schedule TO or the State Filings nor any
information supplied by Parent or Merger Sub for inclusion in the
Schedule 14D-9 will, at the time the Offer Documents, the Schedule TO, the
State Filings, the Schedule 14D-9 or any amendments or supplements thereto,
are filed with the SEC or any applicable state authority or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they are made, not misleading. The information supplied by Parent and Merger
Sub for inclusion in the letter to stockholders, notice of meeting, proxy
statement and form of proxy, or the information statement, as the case may
be, to be distributed to stockholders in connection with the Merger, or any
schedule required to be filed with the SEC in connection therewith
(collectively, the "COMPANY PROXY STATEMENT"), will not, on the date the
Company Proxy Statement (or any amendment or supplement thereto) is first
mailed to stockholders of the Company, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading, or shall, at
the time of the Company Shareholders Meeting, omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Company Shareholder Meeting
which shall have become false or misleading. Notwithstanding the foregoing,
Parent and Merger Sub make no representation or warranty with respect to any
information supplied by or on behalf of the Company which is contained in
any of the Offer Documents, the Schedule TO, the State Filings, the Company
Proxy Statement or any amendment or supplement thereto. The Offer Documents
and the Schedule TO shall comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder.
ARTICLE V
ACTIONS PENDING THE EFFECTIVE TIME
5.01 FORBEARANCES OF THE COMPANY. Except as set forth in the Company's
Disclosure Schedule or as expressly contemplated by this Agreement (including
Section 8.04), without the prior written consent of Parent (such consent not to
be unreasonably withheld or delayed), during the period from the date
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of this Agreement to the Effective Time, the Company will not, and will cause
each of its Subsidiaries not to:
(a) ORDINARY COURSE.
(i) Conduct the business of the Company and its Subsidiaries other
than in the ordinary and usual course, or fail to use reasonable efforts
to preserve intact its business organizations and assets and maintain its
rights, franchises and existing relations with clients, customers,
suppliers, employees and business associates.
(ii) (A) enter into any new line of business, (B) incur or commit to
any capital expenditures or (C) otherwise engage in any practice, take
any action, or enter into any transaction which would cause any
representation or warranty set forth in Section 4.02 (i) to be untrue in
any material respect.
(b) CAPITAL STOCK. Issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional shares of capital
stock of the Company or any of its Subsidiaries (other than issuances or
sales by a Subsidiary to the Company or a wholly-owned Subsidiary of the
Company) or any Rights in respect thereof (including any rights issued under
any stockholders rights plan or similar plan), or enter into any agreement
with respect to the foregoing other than (i) pursuant to Rights that are
described in Section 4.02(b)(ii), (ii) grants of options and stock purchase
rights to employees or replacements of executive officers (but no other
executive officers), under existing Company Shares Plans in the ordinary
course of business which (A) have vesting and termination provisions that
are consistent with past practice, but no more advantageous than, those
vesting and termination provisions provided in the Company's current forms
of option agreements and (B) have an exercise price not less than fair
market value.
(c) DIVIDENDS, ETC. (i) Declare, set aside for payment or pay any
dividend or other distribution (whether in cash, stock or property) on or in
respect of, or declare or make any distribution on, any shares of capital
stock of the Company or any of its Subsidiaries, other than dividends and
distributions from direct or indirect wholly-owned Subsidiaries of the
Company to the Company or another direct or indirect wholly-owned Subsidiary
of the Company, or (ii) directly or indirectly adjust, split, combine,
redeem, reclassify, purchase or otherwise acquire, any shares of its capital
stock.
(d) COMPENSATION; EMPLOYMENT AGREEMENTS; ETC.
(i) Hire or otherwise enter into any arrangement with any executive
officer or (ii) enter into, amend, modify or renew any employment,
consulting, severance or similar contract with any Employee (other than
an employee hired on an "at will" basis, who may be terminated by the
Company on no more than 30 days' noti