Exhibit B
to Agreement and Plan of Merger
STOCK OPTION AGREEMENT, dated as of December 21, 1999 (the
"Agreement"), between AMERICA ONLINE, INC., a Delaware corporation ("Parent"),
and XXXXXXXX.XXX, INC., a Delaware corporation (the "Company").
WHEREAS, Parent, the Company and MQ Acquisition, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"),
are, concurrently with the execution and delivery of this Agreement, entering
into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement;" capitalized terms used without definition herein having the meanings
assigned to them in the Merger Agreement), pursuant to which the Merger Sub will
merger with and into the Company (the "Merger"); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent and Merger Sub have required that the Company agree,
and believing it to be in the best interests of the Company, the Company has
agreed, among other things, to grant to Parent the Option (as hereinafter
defined) to purchase shares of common stock, par value $.001 per share, of the
Company ("Company Common Stock") at a price per share equal to the Exercise
Price (as hereinafter defined).
NOW THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
OPTION TO PURCHASE SHARES
1.1 Grant of Option.
(a) The Company hereby grants to Parent an irrevocable option to
purchase, in whole or in part, an aggregate of up to 3,571,661 duly authorized,
validly issued, fully paid and nonassessable shares of Company Common Stock
(representing 10% of the outstanding shares of Company Common Stock as of the
date hereof) on the terms and subject to the conditions set forth herein (the
"Option"); provided, however, that in no event shall the number of shares of
Company Common Stock for which this Option is exercisable exceed 10% of the
issued and outstanding shares of Company Common Stock at the time of exercise
without giving effect to the issuance of any Option Shares (as hereinafter
defined). The number of shares of Company Common Stock that may be received upon
the exercise of the Option and the Exercise Price are subject to adjustment as
herein set forth.
(b) In the event that any additional shares of Company Common
Stock are issued or otherwise become outstanding after the date of this
Agreement (other than pursuant to this Agreement and other than pursuant to an
event described in Section 3.1 hereof), the number of shares of Company Common
Stock subject to the Option shall be increased so that, after such issuance,
such number together with any shares of Company Common Stock previously issued
pursuant hereto, equals 10% of the number of shares of Company Common Stock then
issued and outstanding without giving effect to any shares subject or issued
pursuant to the Option. Nothing contained in this Section 1.1(b) or elsewhere in
this Agreement shall be deemed to authorize the Company to breach any provision
of the Merger Agreement. As used herein, the term "Option Shares" means the
shares of Company Common Stock issuable pursuant to the Option, as the number of
such shares shall be adjusted pursuant to the terms hereof.
1.2 Exercise of Option.
(a) The Option may be exercised by Parent, in whole or in part,
at any time, or from time to time, commencing upon the Exercise Date and prior
to the Expiration Date. As used herein, the term "Exercise Date" means the date
on which Parent becomes entitled to receive the Termination Fee pursuant to
Section 7.3(b) of the Merger Agreement. As used herein, the term "Expiration
Date" means the first to occur prior to Parent's exercise of the option pursuant
to Section 1.2(b) of:
(i) the Effective Time;
(ii) written notice of termination of this Agreement by
Parent to the Company;
(iii) the termination of the Merger Agreement under
circumstances where the Termination Fee could not become payable; or
(iv) the date that is twelve months from the date of
termination of the Merger Agreement.
Notwithstanding the termination of the Option, Parent shall be entitled to
purchase those Option Shares with respect to which it may have exercised the
Option in accordance with the terms hereof prior to the Expiration Date, and the
termination of the Option will not affect any rights hereunder which by their
terms do not terminate or expire prior to or at the Expiration Date.
(b) In the event Parent wishes to exercise the Option, Parent
shall send a written notice to the Company of its intention to so exercise the
Option (a "Notice"), specifying the number of Option Shares to be purchased (and
the denominations of the certificates, if more than one), whether the aggregate
Exercise Price will be paid in cash or by surrendering a portion of the Option
in accordance with Section 1.3(b) or a combination thereof, and the place in the
United States, time and date of the closing of such purchase (the "Option
Closing;" and the date of such Closing, the "Option Closing Date"), which date
shall not be less than two Business Days nor more than ten Business Days from
the date on which a Notice is delivered; provided, that the Option Closing shall
be held only if (i) such purchase would not otherwise violate or cause the
violation of, any applicable material Law (including the HSR Act or the rules of
the National Association of Securities Dealers, Inc. (the "NASD")) and (ii) no
material Law or Order shall have been promulgated, enacted, entered into, or
enforced by any Court or Governmental Authority which prohibits delivery of the
Option Shares, whether temporary, preliminary or permanent; provided, however,
that the parties hereto shall use their reasonable best efforts to (x) make all
necessary filings and obtain all Approvals and to comply with any such
applicable Law and (y) have any such Order vacated or reversed). In the event
the Option Closing is delayed pursuant to clause (i) or (ii) above, the Option
Closing shall be within five business days following the cessation of such
restriction, violation, Law or Order, as the case may be; provided, further,
that, notwithstanding any prior Notice, Parent shall be entitled to rescind such
Notice and shall not be obligated to purchase any Option Shares in connection
with such exercise upon written notice to such effect to the Company.
(c) At any Option Closing, (i) the Company shall deliver to
Parent all of the Option Shares to be purchased by delivery of a certificate or
certificates evidencing such Option Shares in the denominations designated by
Parent in the Notice, and (ii) if the Option is exercised in part and/or
surrendered in part to pay the aggregate Exercise Price, the Company and Parent
shall execute and deliver an amendment to this Agreement reflecting the Option
Shares for which the Option has not been exercised and/or surrendered. If at the
time of issuance of any Option Shares pursuant to an exercise of all or part of
the Option hereunder, the Company shall have issued any rights or other
securities which are attached to or otherwise associated with the Company Common
Stock, then each Option Share issued pursuant to such exercise shall also
represent such rights or other securities with terms substantially the same as
and at least as favorable to Parent as are provided under any shareholder rights
agreement or similar agreement of the Company then in effect. At the Option
Closing, Parent shall pay to the Company by wire transfer of immediately
available funds to an account specified by the Company to Parent in writing at
least two Business Days prior to the Option Closing an amount equal to the
Exercise Price multiplied by the number of Option Shares to be purchased for
cash pursuant to this Article I; provided that the failure or refusal of the
Company to specify an account shall not affect the Company's obligation to issue
the Option Shares.
(d) Upon the delivery by Parent to the Company of the Notice and
the tender of the applicable aggregate Exercise Price in immediately available
funds or the requisite portion of the Option, Parent shall be deemed to be the
holder of record of the Option Shares issuable upon such exercise,
notwithstanding that the stock transfer books of the Company may then be closed,
that certificates representing such Option Shares may not then have been
actually delivered to Parent, or the Company may have failed or refused to take
any action required of it hereunder. The Company shall pay all expenses that may
be payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 1.2 in the name of Parent or its designees,
stock certificates or a substitute option agreement in the name of the assignee,
transferee or designee of Parent and any filing fees and other expenses arising
from the performance of the transactions contemplated hereby, including pursuant
to the HSR Act.
1.3 Payments.
(a) The purchase and sale of the Option Shares pursuant to
Section 1.2 of this Agreement shall be at a purchase price equal to $27.00 per
Share (as such amount may be adjusted pursuant to the terms hereof, the
"Exercise Price"), payable at Parent's option in cash, by surrender of a portion
of the Option in accordance with Section 1.3(b), or a combination thereof.
(b) Parent may elect to purchase Option Shares issuable, and pay
some or all of the aggregate Exercise Price payable, upon an exercise of the
Option by surrendering a portion of the Option with respect to such number of
Option Shares as is determined by dividing the (i) aggregate Exercise Price
payable in respect of the number of Option Shares being purchased in such manner
by (ii) the excess of the Fair Market Value (as defined below) per share of
Company Common Stock as of the last trading day preceding the Option Closing
Date over the per share Exercise Price. The "Fair Market Value" per share of
Company Common Stock shall be (i) if the Company Common Stock is listed on the
Nasdaq National Market ("NASDAQ"), national securities exchange or other
nationally recognized exchange or trading system as of the Option Closing Date,
the average of last reported sale prices per share of Company Common Stock
thereon for the 10 trading days immediately preceding the Option Closing Date,
or (ii) if the Company Common Stock is not listed on the NASDAQ, any national
securities exchange or other nationally recognized exchange or trading system as
of the Option Closing Date, the amount determined by a mutually acceptable
independent investment banking firm as the value per share the Company Common
Stock would have if publicly traded on a nationally recognized exchange or
trading system (assuming the absence of unusual market conditions and no
discount for minority interest, illiquidity or restrictions on transfer.
ARTICLE I.1
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Parent. Parent hereby represents and
warrants to the Company that any Option Shares acquired by Parent upon exercise
of the Option will not be taken with a view to the public distribution thereof
and will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Act.
2.2 Representations and Warranties of the Company. The Company hereby
represents and warrants to Parent as follows:
(a) Due Authorization; Good Standing. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
(including the issuance and exercise of the Option) have been duly and validly
authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to execute and deliver this
Agreement.
(b) Option Shares. The Company has taken all necessary corporate
and other action to authorize and reserve for issuance, and to permit it to
issue, the Option Shares and all additional shares or other securities which may
be issued pursuant to Section 3.1 upon exercise of the Option, and, at all times
from the date hereof until such time as the obligation to deliver Option Shares
hereunder terminates, will have reserved for issuance upon exercise of the
Option the Option Shares and such other additional shares or securities, if any.
All of the Option Shares and all additional shares or other securities or
property which may be issuable pursuant to Section 3.1, upon exercise of the
Option and issuance pursuant hereto, shall be duly authorized, validly issued,
fully paid and nonassessable, shall be delivered free and clear of all Liens of
any nature whatsoever, and shall not be subject to any preemptive or similar
right of any Person.
(c) No Conflict; Required Filings and Consents. The execution
and delivery by the Company of this Agreement do not, and the performance of
this Agreement shall not, (i) conflict with or violate the Certificate of
Incorporation or Bylaws of the Company, (ii) conflict with or violate any Law or
Order in each case applicable to the Company or by which its properties or
assets is bound or affected, or (iii) result in any breach or violation of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair the Company's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company is a
party or by which the Company or its properties or assets is bound or affected,
except in the case of clause (ii) or (iii) above, for any such conflicts,
breaches, violations, defaults or other occurrences that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The execution and delivery by the Company of this Agreement do not, and the
performance of this Agreement shall not, require the Company to, obtain any
Approval of any Person or Approval of, observe any waiting period imposed by, or
make any filing with or notification to, any Governmental Authority, domestic or
foreign, except for compliance with applicable requirements of the Securities
Act, the Exchange Act and Blue Sky Laws, the pre-Merger notification
requirements of the HSR Act or Foreign Competition Laws or where the failure to
obtain such Approvals, or to make such filings or notifications, could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) Takeover Laws. The Board of Directors of the Company has,
prior to the date hereof, approved this Agreement, the Merger Agreement and the
Merger and the other transactions contemplated hereby and thereby and such
approval is sufficient to render inapplicable to this Agreement, the Merger
Agreement, the Merger and any other transactions contemplated hereby and
thereby, the restrictions of Section 203 of the DGCL. No Delaware law or other
takeover statute or similar Law and no provision of the Certificate of
Incorporation or Bylaws of the Company or any Material Agreement to which the
Company is a party (a) would or would purport to impose restrictions which might
adversely affect or delay the consummation of the transactions contemplated by
this Agreement, or (b) as a result of the consummation of the transactions
contemplated by this Agreement, the Company or the Surviving Corporation by
Parent or Merger Sub (i) would or would purport to restrict or impair the
ability of Parent to vote or otherwise exercise the rights of a shareholder with
respect to securities of the Company or any of its Subsidiaries that may be
acquired or controlled by Parent or (ii) would or would purport to entitle any
Person to acquire securities of the Company.
ARTICLE III
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
3.1 Adjustment Upon Changes in Capitalization. In addition to the
adjustment in the number of shares of Company Common Stock that may be purchased
upon exercise of the Option pursuant to Section 1.1 of this Agreement, the
number of shares of Company Common Stock that may be purchased upon the exercise
of the Option and the Exercise Price shall be subject to adjustment from time to
time as provided in this Section 3.1. In the event of any change in the number
of issued and outstanding shares of Company Common Stock by reason of any stock
dividend, split-up, merger, recapitalization, combination, conversion, exchange
of shares, spin-off or other change in the corporate or capital structure of the
Company which would have the effect of diluting or otherwise diminishing
Parent's rights hereunder, the number and kind of Option Shares or other
securities subject to the Option and the Exercise Price therefor shall be
appropriately adjusted so that Parent shall receive upon exercise (or, if such a
change occurs between exercise and Option Closing, upon Option Closing) of the
Option the number and kind of shares or other securities or property that Parent
would have received in respect of the Option Shares that Parent is entitled to
purchase upon exercise of the Option if the Option had been exercised (or the
purchase thereunder had been consummated, as the case may be) immediately prior
to such event or the record date for such event, as applicable. The rights of
Parent under this Section shall be in addition to, and shall in no way limit,
its rights against the Company for breach of any provision of the Merger
Agreement.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Registration of Option Shares Under the Securities Act.
(a) If requested by Parent at any time and from time to time
after receipt by Parent of Option Shares (the "Registration Period"), the
Company shall use its reasonable best efforts, as promptly as practicable, to
effect the registration under the Securities Act and any applicable state law (a
"Demand Registration") of such number of Option Shares owned by or issuable to
Parent in accordance with the method of sale or other disposition contemplated
by Parent, including a "shelf" registration statement under Rule 415 of the
Securities Act or any successor provision, and to obtain all consents or waivers
of other parties that are required therefor. Except with respect to such a
"shelf" registration, the Company shall keep such Demand Registration effective
for a period of not less than nine months, unless, in the written opinion of
counsel to the Company, which opinion shall be delivered to Parent and which
shall be satisfactory in form and substance to Parent and its counsel, such
registration under the Securities Act is not required in order to lawfully sell
and distribute such Option Shares in the manner contemplated by Parent. The
Company shall only have the obligation to effect four Demand Registrations
pursuant to this Section 4.1; provided, that only requests relating to a
registration statement that has become effective under the Securities Act shall
be counted for purposes of determining the number of Demand Registrations made.
The Company shall be entitled to postpone for up to 90 days from receipt of
Parent's request for a Demand Registration the filing of any registration
statement in connection therewith if the Board of Directors of the Company
determines in its good faith reasonable judgment, that such registration would
materially interfere with or require premature disclosure of, and have a
material adverse effect on, any material acquisition, reorganization or other
transaction involving the Company or any other material contract under active
negotiation by the Company; provided, that the Company shall not have postponed
any Demand Registration pursuant to this sentence during the twelve month period
immediately preceding the date of delivery of Parent's request for a Demand
Registration.
(b) If the Company effects a registration under the Securities
Act of Company Common Stock for its own account or for any other stockholders of
the Company (other than on Form S-4 or Form S-8, or any successor form), Parent
shall have the right to participate in such registration (an "Incidental
Registration" and, together with a Demand Registration, a "Registration");
provided, however, that, if the managing underwriters of such offering advise
the Company in writing that in their opinion the number of shares of Company
Common Stock requested to be included in such Incidental Registration exceeds
the number which can be sold in such offering, the Company shall include therein
(i) first all shares proposed to be included therein by the Company and (ii)
second the shares requested to be included therein by Parent pro rata with the
shares intended to be included therein by any other stockholder of the Company.
Participation by Parent in any Incidental Registration shall not affect the
obligation of the Company to effect Demand Registrations under this Section 4.1.
The Company may withdraw any registration under the Securities Act that gives
rise to an Incidental Registration without the consent of Parent.
(c) In connection with any Registration pursuant to this Section
4.1, (i) the Company and Parent shall provide each other and any underwriter of
the offering with customary representations, warranties, covenants,
indemnification and contribution obligations in connection with such
Registration, and (ii) the Company shall use reasonable best efforts to cause
any Option Shares included in such Registration to be approved for listing on
NASDAQ or any national securities exchange upon which the Company's securities
are then listed, subject to official notice of issuance, which notice shall be
given by the Company upon issuance. The costs and expenses incurred by the
Company in connection with any Registration pursuant to this Section 4.1
(including any fees related to Blue Sky qualifications and SEC filing fees) (the
"Registration Expenses") shall be borne by the Company, excluding legal fees of
Parent's counsel and underwriting discounts or commissions with respect to
Option Shares to be sold by Parent included in a Registration.
ARTICLE V
REPURCHASE RIGHTS; SUBSTITUTE OPTIONS
5.1 Repurchase Rights.
(a) Subject to Section 6.1, at any time on or after the Exercise
Date and prior to the Expiration Date, Parent shall have the right (the
"Repurchase Right") to require the Company to repurchase from Parent (i) the
Option or any part thereof as Parent shall designate at a price (the "Option
Repurchase Price") equal to the amount, subject at the sole discretion of Parent
to clause (iii) of Section 6.1(a), by which (A) the Market/Offer Price (as
defined below) exceeds (B) the Exercise Price, multiplied by the number of
Option Shares as to which the Option is to be repurchased and (ii) such number
of the Option Shares as Parent shall designate at a price (the "Option Share
Repurchase Price") equal to the Market/Offer Price multiplied by the number of
Option Shares so designated. The term "Market/Offer Price" shall mean the
highest of (i) the highest price per share of Company Common Stock offered or
paid in any Acquisition Proposal or any acquisition by any Person or group, in a
single transaction or a series of related transactions, after the date hereof of
10% or more of the outstanding shares of capital stock of the Company, (ii) the
highest closing price for shares of Company Common Stock during the 30 trading
days immediately preceding the date Parent gives the Repurchase Notice (as
hereinafter defined), or (iii) in the event of a sale of all or substantially
all of the Company's assets, the sum of the net price paid in such sale for such
assets plus the current market value of the remaining net assets of the Company
as determined by a nationally recognized investment banking firm selected by
Parent and reasonably acceptable to the Company, divided by the number of shares
of Company Common Stock issued and outstanding at the time of such sale, which
determination, absent manifest error, shall be conclusive for all purposes of
this Agreement. In determining the Market/Offer Price, the value of
consideration other than cash shall be determined by a nationally recognized
investment banking firm selected by Parent and reasonably acceptable to the
Company, which determination, absent manifest error, shall be conclusive for all
purposes of this Agreement.
(b) Parent shall exercise its Repurchase Right by delivering to
the Company written notice (a "Repurchase Notice") stating that Parent elects to
require the Company to repurchase all or a portion of the Option and/or the
Option Shares as specified therein. The closing of the Repurchase Right (the
"Repurchase Closing") shall take place in the United States at the place, time
and date specified in the Repurchase Notice, which date shall not be less than
two business days nor more than ten business days from the date on which the
Repurchase Notice is delivered. At the Repurchase Closing, subject to the
receipt of a writing evidencing the surrender of the Option and/or certificates
representing Option Shares, as the case may be, the Company shall deliver to
Parent the Option Repurchase Price therefor or the Option Share Repurchase Price
therefor, as the case may be, or the portion thereof that the Company is not
then prohibited under applicable law and regulation from so delivering. At the
Repurchase Closing, (i) the Company shall pay to Parent the Option Repurchase
Price for the portion of the Option which is to be repurchased or the Option
Shares Repurchase Price for the number of Option Shares to be repurchased, as
the case may be, by wire transfer of immediately available funds to an account
specified by Parent at least 24 hours prior to the Repurchase Closing and (ii)
if the Option is repurchased only in part, the Company and Parent shall execute
and deliver an amendment to this Agreement reflecting the Option Shares for
which the Option is not being repurchased.
(c) To the extent that the Company is prohibited under
applicable law or regulation from repurchasing the portion of the Option or the
Option Shares designated in such Repurchase Notice, the Company shall
immediately so notify Parent and thereafter deliver, from time to time, to
Parent the portion of the Option Repurchase Price and the Option Share
Repurchase Price, respectively, that it is no longer prohibited from delivering,
within five business days after the date on which the Company is no longer so
prohibited; provided, however, that if the Company at any time after delivery of
a Repurchase Notice is prohibited under applicable Law from delivering to Parent
the full amount of the Option Repurchase Price and the Option Share Repurchase
Price for the Option or Option Shares to be repurchased, respectively, Parent
may rescind the exercise of the Repurchase Right, whether in whole, in part or
to the extent of the prohibition, and, to the extent rescinded, no part of the
amounts, terms or the rights with respect to the Option or Repurchase Right
shall be changed or affected as if such Repurchase Right was not exercised.
5.2 Substitute Option.
(a) In the event that the Company enters into an agreement (i)
to consolidate with or merge into any person, other than Parent or any
Subsidiary of Parent (each an "Excluded Person"), and the Company is not the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any Person, other than an Excluded Person, to merge into the Company and
the Company shall be the continuing or surviving or acquiring corporation, but,
in connection with such merger, the then outstanding shares of Company Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property or the then outstanding shares of
Company Common Stock shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged or acquiring company, or
(iii) to sell or otherwise transfer all or substantially all of its assets to
any Person, other than an Excluded Person, then, and in each such case, the
agreement governing such transaction shall make proper provision so that, unless
earlier exercised by Parent, the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option") for Substitute
Option Shares (as hereinafter defined), at the election of Parent, of either (x)
the Acquiring Corporation (as hereinafter defined) or (y) any Person that
controls the Acquiring Corporation.
(b) The Substitute Option shall have the same terms as the
Option; provided, however, that if the terms of the Substitute Option cannot,
because of applicable Law, be the same as the Option, such terms shall be as
similar as possible and in no event less advantageous to Parent than the Option.
The issuer of the Substitute Option shall enter into an agreement with Parent in
substantially the same form and terms as this Agreement (including the terms of
this Article V) to memorialize the terms of the Substitute Option. The
Substitute Option shall be exercisable for such number of Substitute Option
Shares as is equal to the Market/Offer Price multiplied by the number of shares
of Company Common Stock for which the Option was exercisable immediately prior
to the event described in the first sentence of Section 5.2(a), divided by the
Average Price (as hereinafter defined). The exercise price of the Substitute
Option per Substitute Option Share shall then be equal to the Exercise Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Company Common Stock for which the Option was exercisable immediately prior
to the event described in the first sentence of Section 5.2(a) and the
denominator of which shall be the number of Substitute Option Shares for which
the Substitute Option is exercisable.
(c) In addition to any other restrictions or covenants, the
Company agrees that it shall not enter or agree to enter into any transaction
described in Section 5.2(a) unless the Acquiring Corporation and any Person that
controls the Acquiring Corporation assume in writing all the obligations of the
Company hereunder and agree for the benefit of Parent to comply with this
Article V.
(d) For purposes of this Section 5.2, the following terms have
the meanings indicated:
"Acquiring Corporation" shall mean (i) the continuing
or surviving Person of a consolidation or merger with the Company (if
other than the Company), (ii) the Company in a consolidation or merger
in which the Company is the continuing or surviving or acquiring
person, and (iii) the transferee of all or substantially all of the
Company's assets.
"Substitute Option Shares" shall mean the shares of
capital stock (or similar equity interest) with the greatest voting
power in respect of the election of directors (or other persons
similarly responsible for direction of the business and affairs) of a
Person.
"Average Price" shall mean the average closing price
per Substitute Option Share, on the principal trading market on which
such shares are traded as reported by a nationally recognized source,
for the 30 trading days immediately preceding the consolidation, merger
or sale in question, but in no event higher than the closing price of
the Substitute Option Shares on such market on the day preceding such
consolidation, merger or sale; provided, that if the Company is the
issuer of the Substitute Option, the Average Price shall be computed
with respect to a share of common stock issued by the Person merging
into the Company or by any entity which controls or is controlled by
such person, as Parent may elect.
ARTICLE VI
MISCELLANEOUS
6.1 Total Profit.
(a) Notwithstanding any other provision of this Agreement, in no
event shall Parent's Total Profit (as hereinafter defined) exceed $34,600,000,
less the amount of any Termination Fee paid pursuant to Section 7.2(b) of the
Merger Agreement, and, if it otherwise would exceed such amount, Parent, at its
sole election, shall either (i) reduce the number of shares of Company Common
Stock subject to this Option, (ii) deliver to the Company for cancellation
Option Shares previously purchased by Parent, (iii) limit the amount of the
Option Repurchase Price or the Option Share Repurchase Price, (iv) pay cash to
the Company, or (v) any combination thereof, so that Parent's actually realized
Total Profit shall not exceed such amount after taking into account the
foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount received by
Parent pursuant to the Company's repurchase of the Option (or any portion
thereof) pursuant to Section 5.1, (ii) (x) the amount received by Parent
pursuant to the Company's repurchase of Option Shares pursuant to Section 5.1,
less (y) Parent's purchase price for such Option Shares, (iii) (x) the net cash
amounts received by Parent pursuant to any consummated arm's-length sales of
Option Shares (or any other securities into which such Option Shares are
converted or exchanged) to any unaffiliated party, less (y) Parent's purchase
price of such Option Shares, (iv) any amounts received by Parent pursuant to any
consummated arm's-length transfers of the Option (or any portion thereof) to any
unaffiliated party, and (v) any amount equivalent to the foregoing with respect
to the Substitute Option.
6.2 Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Parent good and marketable title, free
and clear of all Liens, to any Option Shares purchased hereunder.
6.3 Division of Option; Lost Options. The Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Parent, upon
presentation and surrender of this Agreement at the principal office of the
Company, for other agreements providing for Options of different denominations
entitling the holder thereof to purchase, on the same terms and subject to the
same conditions as are set forth herein, in the aggregate the same number of
Option Shares purchasable hereunder. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft or destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, the Company will execute and deliver a new agreement of
like tenor and date.
6.4 Certain Filings; Listing.
(a) If so requested by Parent, promptly after the date hereof,
the Company shall make all filings which are required under the HSR Act and any
applicable Law, and the parties shall furnish to each other such necessary
information and reasonable assistance as may be requested in connection with the
preparation of filings and submissions to any Governmental Authority, including,
without limitation, filings under the provisions of the HSR Act and any
applicable Law. The Company shall supply Parent with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between the Company and its representatives and the Federal
Trade Commission, the Department of Justice and any other Governmental Authority
and members of their respective staff with respect to this Agreement and the
transactions contemplated hereby.
(b) If the Company Common Stock or any other securities to be
acquired upon exercise of the Option are then listed on NASDAQ (or any national
securities exchange or other nationally recognized exchange or trading system),
the Company, upon the request of parent, will promptly file an application to
list the shares of Company Common Stock or such other securities to be acquired
upon exercise of the Option on NASDAQ (and any such other national securities
exchange or other nationally recognized exchange or trading system) and will use
reasonable best efforts to obtain approval of such listing as promptly as
practicable.
6.5 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by nationally recognized overnight courier or by registered or certified
mail, postage prepaid, return receipt requested, or by electronic mail, with a
copy thereof to be delivered or sent as provided above or by facsimile or
telecopier, as follows:
(a) If to Parent:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, President - Business Affairs
With copies to:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, General Counsel; and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx III, Esq.
(b) If to the Company:
XxxXxxxx.xxx, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Chairman
and Chief Executive Officer
With copies to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (i) in the case of personal
delivery, nationally recognized overnight courier or registered or certified
mail, on the date of such delivery and (ii) in the case of facsimile or
telecopier or electronic mail, upon confirmed receipt.
6.6 Interpretation. When a reference is made in this Agreement to
Sections, subsections, Schedules or Exhibits, such reference shall be to a
Section, subsection, Schedule or Exhibit to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The word "herein" and similar references mean, except where a specific Section
or Article reference is expressly indicated, the entire Agreement rather than
any specific Section or Article. The table of contents and the headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
6.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
6.8 Entire Agreement; No Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and is not intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
6.9 Amendments; Assignment. This Agreement may not be amended except
by written agreement by all the parties. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by any
of the parties without the prior written consent of the other parties, and any
purported assignment without such consent shall be void; provided, that Parent
may assign its rights and obligations hereunder to any direct or indirect wholly
owned subsidiary of Parent without such consent.
6.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor will any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive to, and not exclusive
of, any rights or remedies otherwise available.
6.11 Governing Law; Enforcement. This Agreement and the rights and
duties of the parties hereunder shall be governed by, and construed in
accordance with, the Law of the State of New York. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Federal
District Court for the Southern District of New York, this being in addition to
any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto, (a) consents to submit itself to the personal
jurisdiction of the Federal District Court for the Southern District of New York
in the event any dispute arises out of this Agreement or any transaction
contemplated hereby, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement or any
transaction contemplated hereby in any court other than the Federal District
Court for the Southern District of New York and (d) waives any right to trial by
jury with respect to any action related to or arising out of this Agreement or
any transaction contemplated hereby.
6.12 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the Company and Parent have caused this
Agreement to be duly executed as of the date first above written.
AMERICA ONLINE, INC.
By: /s/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: President - Business Affairs
XXXXXXXX.XXX, INC.
By: /s/ XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman; CEO
