Exhibit 3.1(a)
MERGER AGREEMENT
This MERGER AGREEMENT is made and entered into as of this 19th
day of January, 2000, by and among OPUS360 CORPORATION, a Delaware corporation
("PARENT") ITHORITY ACQUISITION CORP., a Delaware corporation ("ACQUISITION
SUB"), ITHORITY CORPORATION, a California corporation (the "COMPANY"), and
Xxxxxx Xxxxxxxxx, III, as attorney-in-fact (the "SELLER'S REPRESENTATIVE") for
the following stockholders of the Company: Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxxxx, III (collectively, the "INDEMNIFYING
SELLERS").
R E C I T A L S :
A. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
full corporate power and authority to carry on its business as presently
conducted and to enter into this Merger Agreement.
B. The Stockholders own in the aggregate in excess of 50% of
the capital stock of the Company.
C. Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to carry on its business as presently
conducted and to enter into this Merger Agreement.
D. Parent is the sole stockholder of Acquisition Sub.
E. The respective boards of directors of the Company and
Acquisition Sub deem it advisable and in the best interests of the Company and
Acquisition Sub, and their respective stockholders, that Acquisition Sub be
merged with and into the Company as authorized by the provisions of this Merger
Agreement and the laws of the States of California and Delaware (the "MERGER"),
and each such board of directors has duly approved this Merger Agreement.
F. The respective shareholders of the Company and Acquisition
Sub have duly approved, in accordance with the applicable laws of the State of
Delaware and the State of California, respectively, the principal terms and
provisions of this Merger Agreement.
NOW, THEREFORE, in consideration of the promises and the
mutual covenants and agreements herein set forth and for the purpose of
prescribing the terms and conditions of the Merger, the parties hereto agree as
follows:
SECTION 1. THE MERGER. Acquisition Sub shall be merged with and into
the Company, which, at and after the Effective Time, shall be and is hereinafter
sometimes referred to as the
"SURVIVING CORPORATION." Acquisition Sub and the Company are hereinafter
sometimes collectively referred to as the "CONSTITUENT CORPORATIONS."
SECTION 2. EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective upon the filing of an executed copy of this Merger Agreement and all
requisite accompanying certificates with the Secretary of State of the State of
California. The time when the Merger shall become effective is referred to
herein as the "EFFECTIVE Time."
SECTION 3. EFFECT OF THE MERGER. At the Effective Time, the identity,
existence, corporate organization, purposes, powers, objects, franchises,
privileges, rights, immunities, restrictions, debts, liabilities and duties
(collectively, the "CORPORATE RIGHTS") of the Company shall continue in effect
and be unimpaired by the Merger, and the Corporate Rights of Acquisition Sub
shall be merged with and into the Company, which shall, as the Surviving
Corporation, be fully vested therewith. At the Effective Time, the separate
existence and corporate organization of Acquisition Sub shall cease, and
Acquisition Sub shall be merged with and into the Surviving Corporation.
SECTION 4. ARTICLES; OFFICERS AND DIRECTORS OF SURVIVING CORPORATION.
From and after the Effective Time, (a) the articles of incorporation of the
Company shall be amended and restated in its entirety to read as set forth in
EXHIBIT A attached hereto and, as so amended, such articles of incorporation
shall be the articles of incorporation of the Surviving Corporation until
altered, amended or repealed as provided in the California General Corporation
Law (the "CALIFORNIA STATUTE"); and (b) the officers and directors of
Acquisition Sub shall become the officers and directors of the Surviving
Corporation, respectively, unless and until removed or until their respective
terms of office shall have expired in accordance with the California Statute or
the Surviving Corporation's articles of incorporation or by-laws, as applicable.
SECTION 5. EFFECT OF THE MERGER ON CAPITAL STOCK. (a) The following
terms used in this Agreement shall have the following respective meanings:
"ACCRUED BONUS AMOUNT" means the aggregate amount of all
accrued but unpaid bonus amounts due to employees of the Company as of the
Closing Date, which amount equals the sum of $48,335.00 and the applicable
amounts for the employer federal and state withholding taxes due on such amount.
"ADDITIONAL SHARES" means that number of shares of Parent
Common Stock determined by dividing (x) an amount equal to $4,000,000 by (y) the
Parent Additional Share Price.
"CASH CONSIDERATION" means the sum of the Closing Amount and
the Deferred Amount.
"CLOSING AMOUNT" means $250,000.
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"CLOSING SHARES" means that number of shares of Parent Common
Stock determined by dividing (i) an amount equal to $2,000,000 by (ii) the
Parent Initial Share Price.
"DEFERRED AMOUNT" means $250,000.
"DEFERRED PAYMENT" means an amount equal to the Deferred
Amount less the Accrued Bonus Amount.
"MERGER CONSIDERATION" means the Cash Consideration and the
Stock Consideration.
"MERGER SHARE ADDITIONAL SHARES" means the Additional Shares
less the Nonconsenting Share Additional Shares.
"MERGER SHARE NUMBER" means the Share Number less the
Nonconsenting Share Number.
"MERGER SHARE RESERVED SHARES" means the Reserved Shares less
the Nonconsenting Share Reserved Shares.
"MERGER SHARES" means the Shares beneficially owned by the
Indemnifying Sellers.
"NONCONSENTING SELLERS" means all stockholders of the Company
other than the Indemnifying Sellers.
"NONCONSENTING SHARE ADDITIONAL SHARES" means the Per
Nonconsenting Share Additional Shares times the Nonconsenting Share Number.
"NONCONSENTING SHARE NUMBER" means the number of Nonconsenting
Shares PLUS the number of shares of Company Common Stock issuable upon exercise
of the Options and Warrants held by Nonconsenting Sellers.
"NONCONSENTING SHARE RESERVED SHARES" means the Per
Nonconsenting Share Reserved Shares times the Nonconsenting Share Number.
"NONCONSENTING SHARES" means the Shares beneficially owned by
any Nonconsenting Seller.
"OPTIONS" means the options to purchase shares of Company
Common Stock under the Company's 1998 Stock Plan that are outstanding
immediately prior to the Effective Time.
"PARENT ADDITIONAL SHARE PRICE" as of the Escrow Release Date,
means the value of a share of Parent Common Stock determined in accordance with
the following: (i) if the Parent Common Stock is then listed on the NASDAQ Stock
Market, the average closing price per share of Parent Common Stock as reported
by the NASDAQ Stock Market for the ten trading days
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immediately preceding the Escrow Release Date or, if there have been no sales on
any such day, the average of the highest bid and lowest asked prices as reported
by the NASDAQ Stock Market at the end of such day; or (ii) if the Parent Common
Stock is not then listed on the NASDAQ Stock Market, the fair market value of a
share of Parent Common Stock as determined by the Board of Directors of Parent
in good faith at such time.
"PARENT INITIAL SHARE PRICE" of a share of Parent Common Stock
means $350,000,000 divided by the number of shares of Parent Common Stock
outstanding on a Fully Diluted Basis immediately prior to the Effective Time,
using the treasury method of accounting.
"PER MERGER SHARE ADDITIONAL SHARES" means a number of shares
of Parent Common Stock equal to (i) the number of Additional Shares less the
Nonconsenting Share Additional Shares divided by (ii) the Merger Share Number.
"PER MERGER SHARE RESERVED SHARES" means a number of shares of
Parent Common Stock equal to the number of Merger Share Reserved Shares divided
by the Merger Share Number.
"PER NONCONSENTING SHARE ADDITIONAL SHARES" means a number of
shares of Parent Common Stock equal to the number of Additional Shares divided
by the Share Number.
"PER NONCONSENTING SHARE RESERVED SHARES" means a number of
shares of Parent Common Stock equal to the number of Reserved Shares divided by
the Share Number.
"PER SHARE CLOSING AMOUNT" means an amount in cash equal to
the quotient obtained by dividing Closing Amount by the Share Number, rounded to
the nearest $.0001.
PER SHARE CLOSING SHARES" means a number of shares of Parent
Common Stock equal to the number of Closing Shares divided by the Share Number.
"RESERVED SHARES" means that number of shares of Parent Common
Stock determined by dividing an amount equal to $1,500,000 by the Parent Initial
Share Price.
"SELLERS" means the Indemnifying Sellers and the Nonconsenting
Sellers.
"SHARE NUMBER" means the number of Shares PLUS the number of
shares of Company Common Stock issuable upon exercise of the Options and
Warrants.
"SHARES" means the shares of Company Common Stock that are
issued and outstanding immediately prior to the Effective Time that are owned by
any Person other than the Company.
"STOCK CONSIDERATION" means the Closing Shares, the Reserved
Shares and the Additional Shares.
"WARRANTS" means the warrants to purchase shares of Company
Common Stock that are outstanding immediately prior to the Effective Time.
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(b) The manner and basis of converting, exchanging or canceling the
shares of capital stock of each of the Constituent Corporations into or for cash
(or the contingent right to receive cash) or securities of the Surviving
Corporation shall be as follows:
(i) each share of common stock, $.01 par value, of Acquisition
Sub issued and outstanding immediately prior to the Effective Time
shall be converted into one share of common stock, $.01 par value, of
the Surviving Corporation;
(ii) each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time and owned directly or
indirectly by the Company (whether as treasury stock or otherwise)
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be canceled and no consideration shall be delivered
in exchange therefor;
(iii) each Merger Share shall, by virtue of the Merger and
without any action on the part of the holder thereof, cease to be
outstanding and be converted into (A) the right to receive, at the
Effective Time, the Per Share Closing Amount; (B) the right to receive,
at the Effective Time, the Per Share Closing Shares; (C) the right to
receive, pursuant to Section 7 hereof an amount equal to the Deferred
Payment divided by the Share Number; (D) the right to receive, subject
to the terms and conditions of this Merger Agreement and the Escrow
Agreement (as hereinafter defined), the Per Merger Share Reserved
Shares, if any; and (E) the right to receive, subject to the terms and
conditions of this Agreement, the Per Merger Share Additional Shares,
if any;
(iv) each Nonconsenting Share shall, by virtue of the Merger
and without any action on the part of the holder thereof, cease to be
outstanding and be converted into (A) the right to receive, at the
Effective Time, the Per Share Closing Amount; (B) the right to receive,
at the Effective Time, the Per Share Closing Shares; (C) the right to
receive, pursuant to Section 7 hereof an amount equal to the Deferred
Payment divided by the Share Number; (D) the right to receive at the
Effective Time, subject to the terms and conditions of this Merger
Agreement, the Per Nonconsenting Share Reserved Shares; and (E) the
right to receive, subject to the terms and conditions of this
Agreement, the Per Nonconsenting Share Additional Shares;
(v) each Option shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into (A) the
right to receive, at the Effective Time, an amount in cash equal to (1)
the Per Share Closing Amount per share of Company Common Stock issuable
upon the exercise of such Option LESS (2) the exercise price for each
such share, which exercise price will be deducted from the amount of
Closing Amount otherwise payable to the holder thereof; (B) the right
to receive, the Per Share Closing Shares per share of Company Common
Stock issuable upon the exercise of such Option; (C) the right to
receive, pursuant to Section 7 hereof, an amount in cash equal to the
Deferred Payment divided by the Share Number per share of Company
Common Stock issuable upon the exercise of such Option; (D) the right
to receive, subject to the terms and conditions of this Merger
Agreement and the Escrow Agreement, the Per Merger Share Reserved
Shares, if any; or the Per Nonconsenting Share Reserved
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Shares, as applicable, per share of Company Common Stock issuable upon
the exercise of such Option and (E) the right to receive, subject to
the terms and conditions of this Agreement, the Per Merger Share
Additional Shares, if any, or the Per Nonconsenting Share Additional
Shares, as applicable, per share of Company Common Stock issuable upon
the exercise of such Option; and
(vi) each Warrant shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into (A) the
right to receive, at the Effective Time, an amount in cash equal to (1)
the Per Share Closing Amount per share of Company Common Stock issuable
upon the exercise of such Warrant LESS (2) the exercise price for each
such share, which exercise price will be deducted from the amount of
Closing Amount otherwise payable to the holder thereof; (B) the right
to receive, the Per Share Closing Shares per share of Company Common
Stock issuable upon the exercise of such Warrant; (C) the right to
receive, pursuant to Section 7 hereof, an amount in cash equal to the
Deferred Payment divided by the Share Number per share of Company
Common Stock issuable upon the exercise of such Warrant; (D) the right
to receive, subject to the terms and conditions of this Agreement and
the Escrow Agreement, the Per Merger Share Reserved Shares, if any, or
the Per Nonconsenting Share Reserved Shares, as applicable, per share
of Company Common Stock issuable upon the exercise of such Warrant; and
(E) the right to receive, subject to the terms and conditions of this
Merger Agreement, the Per Merger Share Additional Shares, if any, or
the Per Nonconsenting Share Additional Shares, as applicable, per share
of Company Common Stock issuable upon the exercise of such Warrant.
SECTION 6. DELIVERY OF CLOSING AMOUNT; EXCHANGE OF CERTIFICATES. At the
Effective Time, upon surrender by each Seller to the Surviving Corporation of
the certificate(s) which, immediately prior to the Effective Time, represented
Shares and Options and Warrants, Parent shall deliver to each such Seller in
exchange therefor (a) an amount equal to the Closing Amount due such Seller; (b)
a certificate representing the number of Closing Shares due such Seller; (c) if
such Seller is a Nonconsenting Seller, a certificate representing the number of
Nonconsenting Share Reserved Shares due such Seller; and (d) pursuant to the
provisions of Section 10, cash in lieu of fractional shares which such Seller
would otherwise have the right to receive; PROVIDED THAT the Sellers'
Representative may direct Parent to deliver a portion of the Closing Amount to
certain third parties for fees, expenses, costs or other obligations arising out
of or in connection with the transactions contemplated in this Merger Agreement.
Until surrendered as contemplated by this Section 6, each certificate
representing Shares and each Option and Warrant shall be deemed, at and after
the Effective Time, to represent only the right to receive upon such surrender
cash and shares of Parent Common Stock as contemplated by this Merger Agreement
and the California Statute.
SECTION 7. DELIVERY OF DEFERRED AMOUNT.
(a) Within five Business Days after the earlier to occur of (i) the
date on which the integration results described on SCHEDULE II attached hereto
are attained and (ii) the date that is 120 days after the Closing Date
(regardless of whether the above-referenced integration has been
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completed), Parent shall pay the Sellers in the aggregate an amount equal to the
Deferred Payment in accordance with Section 2.1(b), rounded to the nearest
$.0001.
(b) Subject to the further provisions of this Section 2.3, the
Indemnifying Sellers hereby instruct Parent to pay the accrued Bonus Amount to
Xxxxxxx Xxxxxx, and, within two Business Days after the Effective Time, Parent
shall pay the Accrued Bonus Amount in accordance with such instructions;
PROVIDED, HOWEVER, that Parent shall deduct from such payment the applicable
amount of withholding for income and employment Tax purposes (which amounts
shall be paid to the Company to be applied to such Taxes for the benefit of the
employees receiving such payments). The payment of the Accrued Bonus Amount by
the Parent pursuant to the foregoing sentence shall be treated as (i) a payment
on behalf of the Sellers to the Company and (ii) a payment by the Company of
bonuses payable.
SECTION 8. ESCROW; MERGER SHARE RESERVED SHARES.
(a) Prior to the Closing, Parent and Acquisition Sub shall appoint an
entity reasonably acceptable to the Sellers' Representative to act as escrow
agent (the "ESCROW AGENT") pursuant to an escrow agreement (the "ESCROW
AGREEMENT") in connection with the Merger and the other transactions
contemplated hereby. At the Closing, Parent will deliver to the Escrow Agent a
certificate or certificates representing the Merger Share Reserved Shares.
(b) The Escrow Agreement shall provide that the Escrow Agent will
deliver certificates representing the Merger Share Reserved Shares to Parent or
the Sellers' Representative (on behalf of the Indemnifying Sellers) in
accordance with the terms and conditions set forth therein, provided that, any
Indemnifying Seller entitled to receive fractional shares shall, upon
distribution of the Merger Share Reserved Shares at the Escrow Release Date,
receive cash in lieu thereof pursuant to the provisions of Section 10.
SECTION 9. ADDITIONAL SHARES.
(a) On the Escrow Release Date, Parent shall deliver to the Sellers'
Representative (i) certificates registered in the names of the Nonconsenting
Sellers in accordance with their respective Percentage Interests, representing
in the aggregate the Nonconsenting Share Additional Shares and (ii) pursuant to
the provisions of Section 10, cash in lieu of fractional shares which each such
Nonconsenting Seller would otherwise have the right to receive.
(b) On the Escrow Release Date, Parent shall also deliver to the
Sellers' Representative (i) certificates registered in the names of the
Indemnifying Sellers in accordance with their respective Proportionate
Percentages, representing in the aggregate the Merger Share Additional Shares
remaining after deduction of any Merger Share Additional Shares (and/or shares
of Parent Common Stock derived from or issued in respect of the Merger Share
Additional Shares) that have been forfeited and (ii) pursuant to the provisions
of Section 10, cash in lieu of fractional shares which each such Indemnifying
Seller would otherwise have the right to receive.
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(c) The Sellers' Representative shall deliver the foregoing
consideration to the Sellers in accordance with the terms of this Merger
Agreement.
SECTION 10. FRACTIONAL SHARES. Notwithstanding any other provision of
this Merger Agreement, no certificates or scrip representing fractional shares
of Parent Common Stock shall be issued to any Seller and such fractional shares
shall not entitle the owner thereof to vote or to any other rights of a holder
of Parent Common Stock. A holder of Company Common Stock who would otherwise
have been entitled to a fractional share of Parent Common Stock shall be
entitled to receive a cash payment in lieu of such fractional share in an amount
equal to the product of such fraction multiplied by the Parent Initial Share
Price or the Parent Additional Share Price, as applicable.
SECTION 11. NO FURTHER OWNERSHIP.
(a) Until surrendered as contemplated by Section 6, each certificate
representing shares of Company Common Stock and each Option and Warrant shall be
deemed, at and after the Effective Time, to represent only the right to receive
upon such surrender cash and Parent Common Stock as contemplated by this Merger
Agreement and the California Statute.
(b) No dividends or other distributions declared or made after the
Effective Time with respect to shares of Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
certificate with respect to such shares and no cash payment in lieu of
fractional shares shall be paid to any such holder until the holder of record of
such certificate shall surrender such certificate. Subject to the effect of
unclaimed property, escheat and other applicable laws, following surrender of
any such certificate, there shall be paid to the record holder of the
certificates representing whole shares of Parent Common Stock issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of any
cash payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to shares of
Parent Common Stock issued to the holder on the Closing Date; and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of Parent
Common Stock held by the holder as of the applicable record date.
(c) The Merger Consideration paid in respect of the surrender of
Options, Warrants and certificates representing shares of Company Common Stock
in accordance with the provisions of this Agreement shall be deemed to have been
paid in full satisfaction of all rights pertaining to such Options, Warrants and
shares of Company Common Stock. From and after the Effective Time the stock
transfer books of the Company shall be closed and no transfer of any capital
stock thereof shall thereafter be made. If, after the Effective Time, Warrants
or certificates for the Company Common Stock are presented to the Company, they
shall be canceled and exchanged for certificates representing the appropriate
number of Shares of Parent Common Stock as provided herein.
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(d) Parent shall not be liable to any person for such shares or funds
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
SECTION 12. OTHER PROVISIONS WITH RESPECT TO THE MERGER.
(a) The principal terms of this Merger Agreement may not be amended,
modified or supplemented without the approval of the shareholders of Acquisition
Sub and the Company. Except as set forth in the preceding sentence, the Company
and Acquisition Sub, by mutual consent of their respective boards of directors,
to the extent permitted by law, may amend, modify, supplement and interpret this
Merger Agreement in such manner as may be mutually agreed upon by them in
writing at any time and, in the case of an interpretation, the actions of such
boards of directors shall be binding; PROVIDED, HOWEVER, that no amendment,
modification or supplement shall affect the rights of the shareholders of
Acquisition Sub or the Company in any manner which is materially adverse to such
shareholders in the judgment of such respective boards of directors.
(b) The captions of this Merger Agreement are for convenience of
reference only and shall not restrict or modify the meaning of any terms or
provisions hereof.
(c) Whenever the context of this Merger Agreement requires, the gender
of all words used herein shall include the masculine, feminine and neuter, and
the number of all words shall include the singular and plural.
(d) This Merger Agreement may be executed in counterparts, each of
which when so executed shall be deemed an original and such counterparts shall
together constitute one and the same instrument.
* * * *
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SCHEDULE II
INTEGRATION REQUIREMENTS
1. e*Portfolio: Xxxxxxxxx.xxx members will have a single profile within the
system. e*Portfolio will also integrate to the Company's reputation system
data so users can properly qualify each other. The Company's reputation
system will be one component of the overall XxxxXxxxx.xxx
reputation/certification system.
2. Authorization system will be merged. Xxxxxxxxx.xxx members will have a
single username/password for logging into the system and accessing the
Ithority functionality.
3. Billing system: The Company will pass Xxxxxxxxx.xxx billing events for
completed transactions, which will be processed by Xxxxxxxxx.xxx. The
Company needs to be able to support XxxxXxxxx.xxx's multiple billing
scenarios (up front listing payment, subscription, invoicing, credit card,
and account balance). Account management information will be consolidated
into one single display across all services for XxxxXxxxx.xxx users.
4. The systems will appear as one system through unified design.
5. The Ithority functionality will be accessible through the same overall
Xchange interface, "questions" or "expert advice" should be a type
accessible, browseable, searchable, in the vein of all of the other Xchange
opportunities.
IN WITNESS WHEREOF, the parties, pursuant to approval and authority
duly given by resolutions adopted by their respective boards of directors, have
each caused this Merger Agreement to be signed by their respective officers duly
authorized, all as of the date first written above.
ITHORITY CORPORATION ITHORITY ACQUISITION CORP.
a California corporation a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxx, III By: /s/ Xxx Xxxxxxxx
------------------------------ ------------------------------
Name: Xxxxxx Xxxxxxxxx, III Name: Xxx Xxxxxxxx
Title: President Title: President
ITHORITY CORPORATION ITHORITY ACQUISITION CORP.
a California corporation a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx XxXxxx
------------------------------ ------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx XxXxxx
Title: Secretary Title: Secretary
OPUS360 CORPORATION OPUS360 CORPORATION
a Delaware corporation a Delaware corporation
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxxx XxXxxx
------------------------------ ------------------------------
Name: Xxx Xxxxxxxx Name: Xxxxxxx XxXxxx
Title: Chief Executive Officer Title: Secretary
/s/ Xxxxxx Xxxxxxxxx III
------------------------------
Xxxxxx Xxxxxxxxx, III,
as the Sellers' Representative
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