AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION (the "Amendment") is dated and effective as of the 12th day of
June, 2000, by and among InterNAP Network Services Corporation ("Parent"),
Cowboy Acquisition Corp. ("Merger Sub") and CO Space, Inc. (the "Company").
WHEREAS, the Company has entered into an Agreement and Plan of
Merger and Reorganization, dated May 26, 2000, with Parent and Merger Sub
(the "Agreement");
WHEREAS, the Company, Parent and Merger Sub desire to amend the
Agreement pursuant to Section 5.7 and Section 10.13 of the Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Agreement.
NOW THEREFORE, in consideration of the promises and the mutual
agreements hereinafter set forth, the parties agree as follows:
1. Sections 1.5(a) and 1.5(b) of the Agreement are hereby deleted in
their entirety and replaced by the following provisions:
"1.5 Merger Consideration; Conversion of Shares.
(a) Subject to Sections 1.8(c) and 1.9, the
consideration payable in the Merger to holders of (i) shares of Company
Common Stock (including all shares of Company Common Stock issued upon
conversion of all preferred stock ($0.01 par value per share) of the Company
("Company Preferred Stock") and upon exercise of any Company Warrant prior to
the Closing) and (ii) shares of Company Preferred Stock that have not
previously been converted to Company Common Stock, outstanding immediately
prior to the Effective Time, shall consist of the consideration in Section
1.5(f) (payable to the Stockholders' Agent) and of shares of the common stock
(par value $0.001 per share) of Parent ("Parent Common Stock"), such shares
of Parent Common Stock to have such rights as are set forth in the
Certificate of Incorporation of Parent and to be issuable solely in
accordance with the terms of this Agreement. The Parent Common Stock to be
received as consideration pursuant to the Merger by each holder of shares of
Company Common Stock (including all shares of Company Common Stock issued
upon conversion of all Company Preferred Stock and upon exercise of any
Company Warrant prior to the Closing, together with cash in lieu of
fractional shares of Parent Common Stock, as specified below) and Company
Preferred Stock is referred to herein as the "Merger Consideration."
(b) Subject to Sections 1.8(c) and 1.9, at the
Effective Time, by virtue of the Merger and without any further action on the
part of Parent, Merger Sub, the Company or any stockholder of the Company:
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(i) each share of Company Common Stock
(including (x) all shares of Company Common Stock issued upon
conversion of all Company Preferred Stock and (y) all shares of Company
Common Stock issued upon exercise of any Company Warrant prior to the
Closing) and each share of Company Preferred Stock that has not
previously been converted to Company Common Stock, outstanding
immediately prior to the Effective Time and for which appraisal rights
have not been exercised under the Delaware General Corporation Law
shall be automatically converted into the right to receive the
Applicable Fraction (as defined below) of a share of Parent Common
Stock and a cash payment (payable to the Stockholders' Agent) as set
forth in Section 1.5(f) below. The "Applicable Fraction" shall be the
fraction (rounded to the nearest five decimal points) (A) having a
numerator equal to the Merger Consideration Shares (as defined below)
and (B) having a denominator equal to the Fully Diluted Number of
Company Shares. The number of "Merger Consideration Shares" shall be
calculated as follows:
(1) In the event the Parent Average
Closing Price (as defined below) shall be less than $27.72550 (the
"Lower Collar"), then the number of Merger Consideration Shares shall
be equal to 8,799,605;
(2) In the event the Parent Average
Closing Price shall be greater than $34.02675 (the "Upper Collar"),
then the number of Merger Consideration Shares shall be equal to
7,170,048; and
(3) In the event the Parent Average
Closing Price shall be equal to or greater than the Lower Collar and
equal to or less than the Upper Collar, then the number of Merger
Consideration Shares shall be equal to 243,973,438 divided by the
Parent Average Closing Price.
For purposes of this Agreement, "Parent Average Closing Price" means the average
of the closing sale price of a share of Parent Common Stock as reported on the
Nasdaq National Market for the ten trading days ending on the second trading day
immediately preceding the Closing Date (rounded to the nearest hundredth).
(ii) each share of the common stock (par value
$0.001 per share) of Merger Sub outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the
Surviving Corporation."
2. A new Section 1.5(f), which shall be as follows, is hereby created:
"(f) In addition to the payment of the Merger
Consideration Shares as provided in Section 1.5(b) above, for each share of
Company Common Stock (including (x) all shares of Company Common Stock issued
upon conversion of all Company Preferred Stock and (y) all shares of Company
Common Stock issued upon exercise of any Company Warrant prior to the
Closing) and each share of Company Preferred Stock that has not previously
been converted to Company Common Stock, outstanding immediately prior to the
Effective Time, Parent shall pay a cash payment equal to the
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sum of Two Hundred Thousand United States Dollars ($200,000.00) multiplied by
the Stockholder Fraction. In each case, such payment shall be made to the
Stockholders' Agent on behalf of the holder of the applicable share and shall
be available to the Stockholders' Agent to fund the activities of the
Stockholders' Agent as contemplated by Section 10.1 of this Agreement. The
"Stockholder Fraction" shall be the fraction (rounded to the nearest five
decimal points) (A) having a numerator equal to the number of shares of
Company Common Stock such Person owns (including the number of shares of
Company Preferred Stock such Person owns, if such Company Preferred Stock has
not been converted to Company Common Stock prior to the Effective Time) and
(B) having a denominator equal to the sum of the total number of shares of
Company Common Stock outstanding immediately prior to the Effective Time plus
the total number of shares of Company Preferred Stock that are outstanding
immediately prior to the Effective Time."
3. The heading for Section 1.8 of the Agreement is hereby amended by
deleting the word "Exchange" from the first part thereof and replacing it
with the word "Delivery."
4. Section 1.8(a) of the Agreement is hereby deleted in its entirety
and replaced by the following provision:
(a) At or prior to the Effective Time, Parent shall
reserve for exchange in accordance with this Section 1, (i) the aggregate
number of shares of Parent Common Stock issuable pursuant to Section 1.5 in
exchange for outstanding shares of Company Common Stock and Company Preferred
Stock and (ii) cash for fractional shares in the amount described in Section
1.8(c). At or after the Effective Time, each former holder of Company Common
Stock or Company Preferred Stock that has not retained its appraisal rights
and is otherwise entitled to receive shares of Parent Common Stock pursuant
to Section 1.5 (a "Merger Stockholder") shall surrender to Parent all
certificates formerly representing shares of Company Common Stock and Company
Preferred Stock and accompanied by a completed and executed letter of
transmittal in a form to be agreed upon by Parent and the Company. As soon as
practicable after the expiration of the period during which appraisal rights
can be exercised under the Delaware General Corporation Law, Parent shall (i)
deliver to each Merger Stockholder a certificate representing 90% of the
number of whole shares of Parent Common Stock that such Merger Stockholder
has the right to receive pursuant to provisions of Section 1.5 and (ii)
deliver to the escrow agent under the Escrow Agreement substantially in the
form of Exhibit D hereto (the "Escrow Agreement"), on behalf and in the name
of each such Merger Stockholder, a certificate representing 10% of the number
of whole shares of Parent Common Stock that such Merger Stockholder has the
right to receive pursuant to the provisions of Section 1.5 (the "Escrow
Shares"). If any Company Stock Certificate shall have been lost, stolen or
destroyed, Parent may, in its discretion and a condition precedent to the
issuance of any certificate representing Parent Common Stock, require the
owner of such lost, stolen or destroyed Company Stock Certificate to provide
an appropriate affidavit and indemnity agreement against any claim that may
be made against Parent or the Surviving Corporation with respect to such
Company Stock Certificate.
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5. Exhibit C to the Agreement (Form of Registration Rights Agreement)
is hereby deleted in its entirety and replaced by a new Form of Registration
Rights Agreement attached hereto as EXHIBIT 1.
6. Exhibit D to the Agreement (Form of Escrow Agreement) is hereby
deleted in its entirety and replaced by a new Form of Escrow Agreement
attached hereto as EXHIBIT 2.
7. Section 10.5 of the Agreement is hereby supplemented to include the
following information regarding notices to be sent to the Stockholders' Agent:
IF TO THE STOCKHOLDERS' AGENT OR ANY OF THE INDEMNITORS:
CO Space Stockholders' Agent LLC
c/o Xxxx Xxxxxxx
Beacon Capital Partners
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
(ph) 617.457.0400
(fax) 000.000.0000
8. This Amendment may be executed in several counterparts, each of
which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
9. The Agreement, as amended hereby, shall remain in full force and
effect.
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The parties hereto have caused this Amendment No. 1 To Agreement and
Plan of Merger and Reorganization to be executed and delivered as of the date
first written above.
INTERNAP NETWORK SERVICES
CORPORATION,
a Washington corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Chief Executive Officer
and President
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COWBOY ACQUISITION CORP.,
a Delaware corporation
By: /s/ Xxxx X XxXxxxx
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Name: Xxxx X XxXxxxx
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Title: President and Chief
Financial Officer
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CO SPACE, INC.,
a Delaware corporation
By: /s/ G. Xxxxxxx Xxxx
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Name: G. Xxxxxxx Xxxx
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Title: President
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EXHIBIT 1
FORM OF REGISTRATION RIGHTS AGREEMENT
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EXHIBIT 2
FORM OF ESCROW AGREEMENT
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