AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER, (this
"Amendment"), dated as of February 22, 2001, by and among iVillage Inc., a
Delaware corporation (the "Parent"), Stanhope Acquisition Sub, LLC, a Delaware
limited liability company (the "Merger Sub") and wholly owned subsidiary of the
Parent, and Xxxxx.xxx Networks, Inc., a Delaware corporation (the "Company").
BACKGROUND
A. The parties hereto are parties to an Agreement and Plan of Merger,
dated as of February 5, 2001 (the "Original Agreement").
B. The parties hereto wish to amend certain provisions of the Original
Agreement, as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Article I, Section (n), hereby is amended to read in its entirety as
follows: `"Closing" and "Closing Date" shall mean the date on which the Merger
becomes effective.'
2. Article I, Section (uu), hereby is amended to read in its entirety as
follows: `"Exchange Ratio" shall mean 0.322, as may be decreased pursuant to
Schedule 7.2(g).'
3. The defined term "Fair Market Value" in Section (vv) of Article I of
the Original Agreement hereby is deleted in its entirety and replaced with the
following: "[intentionally omitted]".
4. Article I, Section (ww), hereby is amended to read in its entirety as
follows: `"Final Statement of Working Capital" shall mean a statement of
estimated working capital prepared by the Parent based on the Estimated
Statement of Working Capital and relating to March 31, 2001 and the day before
the Closing, which statement of Parent is delivered to the Company pursuant to
Schedule 7.2(g).'
5. Article I, Section (eeee), hereby is amended to read in its entirety as
follows: `"Per Share Merger Consideration" shall mean a fraction of a share of
Parent Common Stock calculated in accordance with the Exchange Ratio (as may be
adjusted downward pursuant to Schedule 7.2(g)), plus the Cash Amount.'
6. Article I, Section (nnnn), hereby is amended to read in its entirety as
follows: "Shortfall" shall mean the amount by which the Working Capital or cash
of the Company as at March 31, 2001, is less than the amounts set forth in
Section 7.2(g)(i); provided however, that any amount of Working Capital in
excess of the amount set forth in Section 7.2(g)(i) shall be added to the amount
of cash of the Company as at March 31, 2001 when determining any cash
Shortfall.'
7. Section 2.4(a) of the Original Agreement hereby is amended to read in
its entirety as follows:
"(a) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other
than shares canceled pursuant to Section 2.4(b) or shares as
to which appraisal rights have been demanded, exercised or
perfected in accordance with Section 262 of the DGCL, which
shares shall be converted into the right to receive any amount
required by such Section 262, except as otherwise provided in
Section 2.14) shall be canceled and shall by virtue of the
Merger and without any action on the part of the holder
thereof be converted automatically into the right to receive
the Per Share Merger Consideration (as may be adjusted
downward pursuant to Schedule 7.2(g)), upon the surrender of
the Certificate representing such share in the manner set
forth in Section 2.5. All such shares of Company Common Stock,
when so converted (including shares as to which appraisal
rights have been demanded, exercised or perfected), shall no
longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a
Certificate representing such shares shall cease to have any
rights with respect thereto, except the right to receive that
amount of cash and number of shares of Parent Common Stock
into which such shares of Company Common Stock have been
converted, cash in lieu of fractional shares as provided in
Section 2.6(c) and any dividends or other distributions
payable pursuant to Section 2.6 (and any amount required by
Section 262 of the DGCL, except as otherwise provided in
Section 2.14)."
8. Article II of the Original Agreement hereby is amended by adding to the
end thereof the following new Section 2.14:
"2.14 Appraisal Rights. Notwithstanding Section 2.4,
if appraisal rights are available to the holders of Company
Common Stock pursuant to Section 262 of the DGCL as a result
of the Merger, shares of Company Common Stock outstanding
immediately prior to the Effective Time and held by a holder
who has demanded appraisal for such shares in accordance with
Section 262 of the DGCL shall not be converted into a right to
receive from Parent the Per Share Merger Consideration for
each share held as provided in Section 2.4(a), unless such
holder fails to perfect or withdraws or otherwise loses such
right to appraisal. If after the Effective Time such holder
fails to perfect or withdraws or loses such right to
appraisal, such holder's shares of Company Common Stock shall
be treated as if they had been converted as of the Effective
Time into a right to receive from Parent the Per Share Merger
Consideration. The Company shall give Parent prompt notice of
any demands received by the Company for appraisal of shares of
Company Common Stock, and Parent shall have the right to
participate in all negotiations and proceedings with respect
to such demands. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to,
or settle or offer to settle, any such demands. Any amounts
paid to a holder of Company Common Stock pursuant to a right
of appraisal under Section 262 of the DGCL will be paid by the
Company out of the Company's assets and in no event shall
Parent or any affiliate thereof reimburse the Company for such
payments."
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9. The reference to Section 5.16 in the definition of "Required Vote"
hereby is amended to be a reference to Section 5.15.
10. The reference to Section 2.6(c) in the last line of Section 2.4(a)
hereby is amended to be a reference to Section 2.5(c).
11. Section 1 of Schedule 7.2(g) of the Original Agreement hereby is
amended to read in its entirety as follows:
"1. On or prior to (a) the earlier of (i) April 2, 2001 and (ii) three
days prior to the Closing, the Company shall deliver to the Parent a statement
of its estimated or actual Working Capital as at March 31, 2001 and (b) three
days prior to the Closing, the Company shall deliver to the Parent a statement
of its estimated Working Capital as of the day before the Closing (collectively,
the "Estimated Statement of Working Capital"), both of which shall be prepared
in accordance with GAAP consistently applied and in the same manner and using
the same principles as used in preparing Schedule 2. The Company shall deliver
to the Parent all work papers and other supporting documentation used in or
relevant to the creation of the Estimated Statement of Working Capital along
with the delivery of the Estimated Statement of Working Capital."
12. Section 3 of Schedule 7.2(g) of the Original Agreement hereby is
amended to read in its entirety as follows:
"3. In the event that there is less cash or Working Capital on the
Final Statement of Working Capital than the amounts set forth in
Section 7.2(g)(i):
(a) if the Shortfall in the case of cash and/or
Working Capital is $2,000,000 or less, (i) the Exchange Ratio
shall be adjusted downward such that the aggregate number of
shares to be issued pursuant to the Merger in exchange for
Company Common Stock is decreased by the number of shares of
Parent Common Stock equal to the quotient of the Shortfall
with respect to cash or the Shortfall with respect to Working
Capital, whichever is greater, divided by $1.875, and (ii)
Investor may, at its option, purchase from the Parent pursuant
to the Securities Purchase Agreement such number of Shares (as
defined in the Securities Purchase Agreement) as Investor
shall elect equal to or less than the quotient of (x) the
Shortfall with respect to cash or the Shortfall with respect
to Working Capital, whichever is greater, (y) divided by
$1.875, which Shares shall be purchased at a price of $1.875
per Share.
(b) if the Shortfall in the case of either cash or
Working Capital is more than $2,000,000 but less than
$4,000,000 (i) the Exchange Ratio shall be adjusted downward
such that the aggregate number of shares to be issued pursuant
to the Merger in exchange for Company Common Stock is
decreased by the number of shares of Parent Common Stock equal
to the quotient of the Shortfall with respect to cash or the
Shortfall with respect to Working Capital, whichever is
greater, divided by $1.875; (ii) Investor shall purchase from
the Parent pursuant to the Securities Purchase Agreement a
number of Shares equal to
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the quotient of (x) the amount by which the Shortfall with
respect to cash or the Shortfall with respect to Working
Capital, whichever is greater, exceeds $2,000,000 divided by
(y) $1.875, which Shares shall be purchased at a price of
$1.875 per Share; and (iii) Investor may, at its option,
purchase from the Parent pursuant to the Securities Purchase
Agreement such additional number of Shares as Investor shall
elect equal to or less than the quotient of (x) $2,000,000
divided by (y) $1.875, which Shares shall be purchased at a
price of $1.875 per Share.
(c) if the Shortfall in the case of either cash or
Working Capital is more than $4,000,000, the condition to
Parent's obligation to effect the Merger in Section 7.2(g)(i)
shall not have been satisfied."
13. The Company hereby consents, for the purposes of Section 6.1(c) of the
Original Agreement, to the amendment of Parent's Certificate of Incorporation to
authorize a total of 200,000,000 shares of Parent Common Stock, and to the
submission of such amendment to Parent's stockholders for approval.
14. The parties hereto hereby agree that notwithstanding the Company's
representation in Section 4.24 of the Original Agreement, the holders of Company
Common Stock may be entitled to appraisal rights under Section 262 of the DGCL.
15. Section 7.1(e) of the Original Agreement hereby is amended to read in
its entirety as follows:
(e) The Parent shall have received the Tax Opinion
and the Company shall have received a legal opinion from
Xxxxxx Godward LLP to the effect that for United States
federal income tax purposes each Company stockholder will
recognize gain or loss as a result of the Merger; provided
however, that if the counsel to either Parent or Company does
not render such opinion, this condition shall nonetheless be
deemed to be satisfied with respect to such party if counsel
to the other party renders such opinion to such party. The
parties to this Agreement agree to make such reasonable
representations as requested by such counsel for the purpose
of rendering such opinions.
16. The Original Agreement, as amended hereby, remains in full force and
effect.
17. Capitalized terms used but not defined herein shall have the meanings
designated in the Original Agreement.
18. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
.
XXXXX.XXX NETWORKS, INC.
By: /s/ A. Xxxx Xxxxx
--------------------------------------
Name: A. Xxxx Xxxxx
Title: Senior Vice President,
Business Development
iVILLAGE INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President --
Operations and Business
Affairs
STANHOPE ACQUISITION SUB, LLC
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President --
Operations and Business
Affairs