- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
MYPOINTS.COM, INC.
(Name of Subject Company (Issuer))
UNV ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED NEWVENTURES, INC.
(Name of Filing Persons (Offeror))
Common Stock, Par Value $.001 Per Share
Rights to Purchase Series A Participating Preferred Stock
(Title of Class of Securities)
62855T102
(CUSIP Number of Class of Securities)
Francesca M. Maher
Senior Vice President, General
Counsel and Secretary
UAL Corporation
1200 E. Algonquin Rd.
Elk Grove Township, IL 60007
(847) 700-4000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Person(s))
Copy to:
Elizabeth A. Raymond
Marc F. Sperber
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
(312) 782-0600
CALCULATION OF FILING FEE
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
- ---------------------------------------------------------------------------
$105,968,405 $21,194
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee only.
This calculation assumes (a) the purchase of all of the issued and
outstanding shares of common stock, par value $.001 per share of MyPoints.com,
Inc., a Delaware corporation (the "Company"), together with the associated
preferred stock purchase rights issued pursuant to the Preferred Stock Rights
Agreement, dated as of December 13, 2000, between the Company and Wells Fargo
Shareholder Services, as rights agent (the "Shares"),
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
at a price per Share of $2.60 in cash. As of June 1, 2001, based on the
Company's representation of its capitalization as of such date, there were
40,757,079 Shares outstanding. The amount of the filing fee, calculated in
accordance with Rule 0-11 of the Securities Exchange Act of 1934, equals
1/50th of one percent of the value of the Shares proposed to be acquired.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Form or Registration No.: Not applicable. Date Filed: Not applicable.
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes to designate any transactions to which this
statement relates:
[X]third party tender offer subject to Rule 14d-1
[_]issuer tender offer subject to Rule 13e-4
[_]going-private transaction subject to Rule 13e-3
[_]amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
This Tender Offer Statement on Schedule TO is filed by United NewVentures,
Inc., a Delaware corporation ("Parent"), and UNV Acquisition Corp., a Delaware
corporation ("Sub") and a wholly owned subsidiary of Parent. This statement
relates to the tender offer (the "Offer") by Sub to purchase all of the Shares
of the Company, at a price per Share of $2.60 (the "Offer Price"), net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated June 13, 2001 (the "Offer to
Purchase") and in the related Letter of Transmittal (the "Letter of
Transmittal" which, together with the Offer to Purchase, as each may be
amended or supplemented from time to time, collectively constitute the
"Offer"), copies of which are attached as Exhibit (a)(1)(i) and (a)(1)(ii),
respectively.
2
Items 1 through 11.
As permitted by General Instruction F to Schedule TO, the information set
forth in the entire Offer to Purchase (including Schedules I and II attached),
is incorporated by reference into this Tender Offer Statement on Schedule TO.
Item 12. Exhibits.
(a)(1)(i) Offer to Purchase.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and other Nominees.
(a)(1)(v) Letter to Clients.
(a)(1)(vi) Instructions
(a)(1)(vii) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(1)(viii) Summary Advertisement as published in the New York Times.
(a)(2)-(4) Not applicable.
(a)(5)(i) Press release issued by Parent on June 4, 2001 (incorporated by
reference to Schedule TO-C filed with the Securities and
Exchange Commission on June 4, 2001).
(b) None.
(c) Not applicable.
(d)(1) Agreement and Plan of Merger, dated June 1, 2001, among Parent,
Sub and the Company.
(d)(2) Nondisclosure Agreement, dated April 4, 2001, by and between
Parent and the Company.
(d)(3) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Crystal Asset Management, LLC.
(d)(4) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Noah Doyle.
(d)(5) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Primedia Inc.
(d)(6) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Experian Capital Corporation.
(d)(7) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Steve Markowitz.
(d)(8) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Nat Goldhaber.
(d)(9) Redemption Agreement, date June 1, 2001, by and between United
Air Lines, Inc. and the Company.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law (included as
Schedule II to the Offer to Purchase).
(g) None.
(h) None.
Item 13. Information Required by Schedule 13E-3
Not Applicable.
3
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
UNV Acquisition Corp.
/s/ Douglas A. Hacker
By: _________________________________
Name: Douglas A. Hacker
Title: President
United NewVentures, Inc.
/s/ Douglas A. Hacker
By: _________________________________
Name: Douglas A. Hacker
Title: President
Dated: June 13, 2001
4
EXHIBIT INDEX
(a)(1)(i) Offer to Purchase.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and other Nominees.
(a)(1)(v) Letter to Clients.
(a)(1)(vi) Instructions
(a)(1)(vii) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(1)(viii) Summary Advertisement as published in the New York Times.
(a)(2)-(4) Not applicable.
(a)(5)(i) Press release issued by Parent on June 4, 2001 (incorporated by
reference to Schedule TO-C filed with the Securities and
Exchange Commission on June 4, 2001).
(b) None.
(c) Not applicable.
(d)(1) Agreement and Plan of Merger, dated June 1, 2001, among Parent,
Sub and the Company.
(d)(2) Nondisclosure Agreement, dated April 4, 2001, by and between
Parent and the Company.
(d)(3) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Crystal Asset Management, LLC.
(d)(4) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Noah Doyle.
(d)(5) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Primedia Inc.
(d)(6) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Experian Capital Corporation.
(d)(7) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Steve Markowitz.
(d)(8) Stock Option and Tender Agreement, dated June 1, 2001, by and
between Parent and Nat Goldhaber.
(d)(9) Redemption Agreement, date June 1, 2001, by and between United
Air Lines, Inc. and the Company.
(e) Not applicable.
(f) Section 262 of the Delaware General Corporation Law (included as
Schedule II to the Offer to Purchase).
(g) None.
(h) None.
5
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
by
UNV ACQUISITION CORP.
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JULY 11, 2001
UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED
AS OF JUNE 1, 2001 (THE "MERGER AGREEMENT"), AMONG UNITED NEWVENTURES, INC.
("PARENT"), UNV ACQUISITION CORP. ("SUB") AND MYPOINTS.COM, INC. (THE
"COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS
APPROVED AND DECLARED ADVISABLE THE MERGER AGREEMENT, THE OFFER, THE MERGER
(EACH AS DEFINED HEREIN) AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER, THE MERGER AND THE
OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR TO AND IN THE
BEST INTERESTS OF THE COMPANY AND THE STOCKHOLDERS OF THE COMPANY AND
RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER
THEIR SHARES OF COMMON STOCK OF THE COMPANY, TOGETHER WITH THE ASSOCIATED
PREFERRED STOCK PURCHASE RIGHTS ISSUED PURSUANT TO THE PREFERRED STOCK RIGHTS
AGREEMENT, DATED AS OF DECEMBER 13, 2000, BETWEEN THE COMPANY AND WELLS FARGO
SHAREHOLDER SERVICES, AS RIGHTS AGENT (THE "SHARES") PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SHARES
REPRESENTING AT LEAST A MAJORITY OF THE TOTAL OUTSTANDING VOTING SECURITIES OF
THE COMPANY ON A FULLY-DILUTED BASIS AFTER GIVING EFFECT TO THE EXERCISE,
CONVERSION OR TERMINATION OF ALL OPTIONS, WARRANTS, RIGHTS AND SECURITIES
EXERCISABLE OR CONVERTIBLE INTO SUCH VOTING SECURITIES (THE "MINIMUM TENDER
CONDITION") AND (2) THE APPLICABLE WAITING PERIOD (AND ANY EXTENSION THEREOF)
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED
(THE "HSR ACT") SHALL HAVE TERMINATED OR EXPIRED AND ANY CONSENTS, APPROVALS
AND FILINGS UNDER ANY FOREIGN ANTITRUST LAW, THE ABSENCE OF WHICH WOULD
PROHIBIT THE PURCHASE OF ALL SHARES TENDERED PURSUANT TO THE OFFER, SHALL HAVE
BEEN OBTAINED OR MADE PRIOR TO THE ACCEPTANCE OF SHARES PURSUANT TO THE OFFER.
IMPORTANT
ANY STOCKHOLDER WISHING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES IN THE OFFER SHOULD EITHER: (1) COMPLETE AND SIGN THE LETTER OF
TRANSMITTAL (OR A FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN
THE LETTER OF TRANSMITTAL AND MAIL OR DELIVER THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE DEPOSITARY (AS DEFINED HEREIN) TOGETHER
WITH CERTIFICATES REPRESENTING THE SHARES; (2) FOLLOW THE PROCEDURE FOR BOOK-
ENTRY TRANSFER SET FORTH IN SECTION 3 OF THIS OFFER TO PURCHASE ENTITLED
"PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES;" OR (3) REQUEST SUCH
STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE
TO EFFECT THE TRANSACTION FOR THE STOCKHOLDER. A STOCKHOLDER HAVING SHARES
REGISTERED IN THE NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY, OR
OTHER NOMINEE MUST CONTACT SUCH PERSON IF THEY DESIRE TO TENDER SUCH SHARES.
ANY STOCKHOLDER WHO WISHES TO TENDER SHARES AND CANNOT DELIVER CERTIFICATES
REPRESENTING SUCH SHARES AND ALL OTHER REQUIRED DOCUMENTS TO THE DEPOSITARY ON
OR PRIOR TO THE DATE ON WHICH THE OFFER EXPIRES OR WHO CANNOT COMPLY WITH THE
PROCEDURES FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS MAY TENDER SUCH SHARES
PURSUANT TO THE GUARANTEED DELIVERY PROCEDURE SET FORTH IN SECTION 3 OF THIS
OFFER TO PURCHASE ENTITLED "PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING
SHARES."
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT AT THE ADDRESS AND TELEPHONE NUMBER SET FORTH BELOW. ADDITIONAL COPIES
OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED
DELIVERY AND OTHER RELATED MATERIALS MAY BE OBTAINED FROM THE INFORMATION
AGENT. STOCKHOLDERS MAY ALSO CONTACT THEIR BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE.
June 13, 2001
TABLE OF CONTENTS
Page
----
1. Terms of the Offer................................................. 3
2. Acceptance of Payment and Payment for Shares....................... 4
3. Procedures for Accepting the Offer and Tendering Shares............ 5
4. Withdrawal Rights.................................................. 8
5. Material United States Federal Income Tax Considerations........... 9
6. Price Range of Shares.............................................. 10
7. Certain Information Concerning the Company......................... 10
8. Certain Information Concerning UAL, Parent and Sub................. 11
9. Source and Amount of Funds......................................... 12
10. Background of the Offer; Past Contacts or Negotiations with the
Company............................................................ 12
11. The Merger Agreement; Other Arrangements........................... 13
12. Purpose of the Offer; Plans for the Company........................ 20
13. Certain Effects of the Offer....................................... 20
14. Dividends and Distributions........................................ 21
15. Certain Conditions of the Offer.................................... 22
16. Certain Legal Matters; Regulatory Approvals........................ 23
17. Appraisal Rights................................................... 25
18. Fees and Expenses.................................................. 28
19. Miscellaneous...................................................... 28
SCHEDULE I: DIRECTORS AND EXECUTIVE OFFICERS OF UAL, PARENT AND SUB..... 29
1. Directors and Executive Officers of UAL............................ 29
2. Directors and Executive Officers of Parent and Sub................. 31
SCHEDULE II: SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW........ 33
SUMMARY
The following is a summary of some of the key terms of this offer to
purchase all of the outstanding common stock of MyPoints.com, Inc. for $2.60
per share in cash. We urge you to read carefully the remainder of this offer
to purchase and the accompanying letter of transmittal because the information
in this Summary is not complete. Additional important information is contained
in the remainder of this offer to purchase and the letter of transmittal.
The Sub.
The Sub referred to in this offer to purchase is UNV Acquisition Corp., a
Delaware corporation formed for the purpose of making this tender offer and
the merger described in this offer to purchase. UNV Acquisition Corp. is a
wholly owned subsidiary of United NewVentures, Inc., a Delaware corporation.
See Section 8 of this offer to purchase--"Certain Information Concerning UAL,
Parent and Sub."
Class and Amount of Shares Sought.
We are seeking to purchase all of the outstanding shares of MyPoints.com
common stock, together with the associated preferred stock purchase rights
issued pursuant to the Preferred Stock Rights Agreement, dated as of December
13, 2000, between the Company and Wells Fargo Shareholder Services, as rights
agent. See "Introduction" and Section 1 of this offer to purchase--"Terms of
the Offer."
Offer Prices; Fees and Commissions.
We are offering to pay $2.60 per share, net to you in cash, less any
required withholding of taxes and without the payment of interest. If you are
the record owner of your shares and you tender your shares to us in the offer,
you will not have to pay brokerage fees or similar expenses. If you own your
shares through a broker or other nominee, and your broker tenders your shares
on your behalf, your broker or nominee may charge you a fee for doing so. You
should consult your broker or nominee to determine whether any charges will
apply. We will not be obligated to pay for or reimburse you for such broker or
nominee charges. See the "Introduction" to this offer to purchase. In
addition, if you do not complete and sign the Substitute Form W-9 included in
the letter of transmittal, you may be subject to required backup federal
income tax withholding. See Instruction 9 to the letter of transmittal.
Source of Funds.
UNV Acquisition Corp. will be provided funds of approximately $113.5 million
by its parent company, United NewVentures, for the purchase of shares in the
offer and to pay related fees and expenses. This offer is not conditioned on
any financing arrangements. See Section 9 of this offer to purchase--"Source
and Amount of Funds." United NewVentures expects to obtain these funds from
cash on hand and its other working capital sources. See Section 8 of this
offer to purchase--"Certain Information Concerning Parent and Sub."
Time For Acceptance.
You will have until 12:00 midnight, New York City time, on Wednesday, July
11, 2001, to tender your shares in the offer. If you cannot deliver everything
that is required in order to make a valid tender by that time, you may be able
to use a guaranteed delivery procedure, which is described later in this offer
to purchase. See Sections 1 and 3 of this offer to purchase--"Terms of the
Offer" and "Procedures for Accepting the Offer and Tendering Shares."
Extension of the Offer.
Subject to the terms of the merger agreement, we can extend the offer. We
have agreed in the merger agreement that we can extend the offer without
MyPoints.com's consent if on the initial expiration date any of
i
the conditions to our offer are not satisfied or waived. We may also extend
the offer for any period required by the U.S. securities laws or the SEC or if
the waiting period under the Hart-Scott-Rodino Act has not terminated or
expired.
We may, if all conditions to the offer have been satisfied or waived but the
number of shares tendered in the offer is less than 90% of the fully diluted
shares outstanding, provide a "subsequent offering period" for the offer. A
subsequent offering period will be an additional period of time not to exceed
20 business days, beginning after we have purchased shares tendered during the
offer, during which shareholders may tender, but not withdraw, their shares
and receive the offer consideration.
See Section 1 of this offer to purchase--"Terms of the Offer."
Notification of Extensions.
We will make a public announcement if we extend the offer, and we will
inform Computershare Trust Company of New York, the depositary for the offer,
of the extension by not later than 9:00 a.m., New York City time, on the next
business day after the day on which the offer was scheduled to expire. See
Section 1 of this offer to purchase--"Terms of the Offer."
Significant Conditions to the Offer.
We are not obligated to purchase any tendered shares if the total number of
shares validly tendered and not withdrawn is less than a majority of the total
outstanding number of shares of MyPoints.com voting stock on a fully-diluted
basis. We are not obligated to purchase shares that are validly tendered if
there is a material adverse change in MyPoints.com's business. The offer is
also subject to a number of other conditions, including the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino Act
or a similar provision of any foreign antitrust law. See Sections 1 and 15 of
this offer to purchase--"Terms of the Offer" and "Certain Conditions of the
Offer."
Method of Tender.
To tender shares, you must deliver the certificates representing your
shares, together with a completed letter of transmittal or a facsimile of one,
to Computershare Trust Company of New York, the depositary for the offer, not
later than the time the tender offer expires. If your shares are held in
street name, the shares can be tendered by your nominee through the
depositary. If you cannot deliver everything that is required by the
depositary by the expiration of the offer, you may get a little extra time to
do so by having a broker, bank or other fiduciary which is a member of the
Securities Transfer Agents Medallion Program or other eligible institution,
guarantee that the missing items will be received by the depositary within
three National Association of Securities Dealers Automated Quotation System
trading days. However, the depositary must receive the missing items within
that three trading day period. See Section 3 of this offer to purchase--
"Procedures for Accepting the Offer and Tendering Shares.
Time of Payment.
If all of the conditions of the offer are satisfied or waived and your
shares are accepted for payment, we will pay you promptly after the expiration
of the offer. See Section 2 of this offer to purchase--"Acceptance of Payment
and Payment for Shares."
Withdrawal of Tendered Shares.
You can withdraw previously tendered shares at any time until the offer has
expired and, if we have not agreed to accept your shares for payment by August
12, 2001, you can withdraw them at any time after that time until we accept
the shares for payment. This right to withdraw does not apply to any
subsequent offering period. See Section 4 of this offer to purchase--
"Withdrawal Rights."
ii
To withdraw previously tendered shares, you must deliver a written notice of
withdrawal, or a facsimile of one, with the required information to the
depositary while you still have the right to withdraw the shares. If you
tendered by giving instructions to a broker or nominee, you must instruct the
broker or nominee to arrange for the withdrawal of your shares. See Sections 1
and 4 of this offer to purchase--"Terms of the Offer" and "Withdrawal Rights."
Board of Directors Recommendation.
The offer is being made pursuant to an agreement and plan of merger, dated
as of June 1, 2001, among MyPoints.com, United NewVentures and UNV Acquisition
Corp. The Board of Directors of MyPoints.com has approved and declared
advisable the merger agreement, the offer, the merger and the other
transactions contemplated by the merger agreement. The Board of Directors of
MyPoints.com recommends that holders of shares of MyPoints.com common stock
accept the offer and tender their shares. See Section 10 of this offer to
purchase--"Background of the Offer; Past Contacts or Negotiations with the
Company."
Merger After Tender Offer.
If we purchase at least a majority of the total outstanding number of shares
of MyPoints.com common stock on a fully-diluted basis in the offer, and all
other applicable conditions are met, UNV Acquisition Corp. will be merged into
MyPoints.com and all remaining stockholders (other than stockholders who have
properly perfected appraisal rights under Delaware state law) will receive the
same price per share paid in the offer. See "Introduction" and Section 12 of
this offer to purchase--"Purpose of the Offer; Plans for the Company."
Appraisal Rights.
No appraisal rights are available in connection with the offer. After the
offer, appraisal rights will be available to holders of shares who do not vote
in favor of the merger if a stockholder vote is required, subject to and in
accordance with Delaware state law. A holder of shares must properly perfect
its right to seek an appraisal under Delaware state law in connection with the
merger in order to exercise the appraisal rights provided under Delaware state
law. See Section 17 of this offer to purchase--"Appraisal Rights."
Market for Shares After the Offer.
If we purchase all of the tendered shares and the merger takes place, there
will no longer be a trading market for the shares of MyPoints.com common
stock. Even if the merger does not take place, if we purchase all of the
tendered shares of MyPoints.com common stock:
. there may be so few remaining stockholders and publicly held shares that
the shares will no longer be eligible to be traded through the National
Association of Securities Dealers Automated Quotation System;
. there may not be any public trading market for the shares or, even if
there is a public market for the shares, the shares may be very thinly
traded and your ability to buy or sell shares may be very limited; and
. MyPoints.com may cease to make quarterly reports, annual reports and
other disclosures with the SEC or otherwise cease being required to
comply with the SEC's rules relating to publicly held companies. See
Section 13 of this offer to purchase--"Certain Effects of the Offer."
Taxes.
The receipt of cash by you pursuant to the offer or the merger will
constitute a taxable transaction for United States federal income tax
purposes. For United States federal income tax purposes, by tendering shares
you generally would recognize gain or loss in an amount equal to the
difference between the cash received by you pursuant to the offer or merger
and your tax basis in the shares. In addition, under the United States federal
iii
income tax laws, the payments made by the depositary to you pursuant to the
offer or merger may, under certain circumstances, be subject to backup
withholding at a rate of 31%. To avoid backup withholding with respect to
payments made pursuant to the offer or merger, you must provide the depositary
with proof of an applicable exemption from backup withholding or a correct
taxpayer identification number, and you must otherwise comply with the
applicable requirements of the backup withholding rules. See Section 5 of this
offer to purchase--"Material United States Federal Income Tax Considerations."
Return of Tendered Shares.
If any of the shares you tender are not accepted for purchase for any
reason, certificates representing such shares will be returned to you or to
the person you specify in your tendering documents. See Section 2 of this
offer to purchase--"Acceptance of Payment and Payment for Shares."
Recent Market Prices.
On June 1, 2001, the last trading day before United NewVentures and
MyPoints.com announced that they had signed the merger agreement, the last
sale price of the shares of MyPoints.com common stock reported on the National
Association of Securities Dealers Automated Quotation System was $1.60 per
share. On June 12, 2001, the last trading day before UNV Acquisition Corp.
commenced the offer, the last sale price of the shares of MyPoints.com common
stock reported on the National Association of Securities Dealers Automated
Quotation System was $2.56 per share. We advise you to obtain a recent
quotation for shares of MyPoints.com in deciding whether to tender your
shares. See Section 6 of this offer to purchase--"Price Range of Shares."
Questions and Information.
You can call Georgeson Shareholder Communications Inc. at (800) 223-2064
(toll free). Georgeson Shareholder Communications Inc. is acting as the
information agent for our tender offer. See the back cover page of this offer
to purchase.
iv
To: The Holders of Outstanding Shares of Common Stock of MyPoints.com, Inc.:
INTRODUCTION
UNV Acquisition Corp., a Delaware corporation ("Sub") and a wholly owned
subsidiary of United NewVentures, Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all of the outstanding shares of common stock, par
value $.001 per share of MyPoints.com, Inc., a Delaware corporation (the
"Company"), together with the associated preferred stock purchase rights
issued pursuant to the Preferred Stock Rights Agreement, dated as of December
13, 2000, between the Company and Wells Fargo Shareholder Services, as rights
agent ("Shares"), at a purchase price of $2.60 per Share (the "Offer Price"),
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in this Offer to Purchase (as amended or
supplemented from time to time, the "Offer to Purchase") and the related
Letter of Transmittal (the "Letter of Transmittal," which, together with the
Offer to Purchase, as each may be amended or supplemented from time to time,
collectively constitute the "Offer").
Tendering stockholders who are record owners of the Shares and tender their
Shares directly to the Depositary (as defined below) will not be obligated to
pay brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect
to the purchase of Shares by Sub pursuant to the Offer. Stockholders who hold
their Shares through a broker or nominee should consult such institution as to
whether it charges any service fees. Parent or Sub will pay all charges and
expenses of Computershare Trust Company of New York, as depositary (the
"Depositary"), and Georgeson Shareholder Communications Inc., as information
agent (the "Information Agent"), incurred in connection with the Offer. See
Section 18 of this Offer to Purchase--"Fees and Expenses."
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer Shares
representing at least a majority of the total outstanding voting securities of
the Company on a fully-diluted basis after giving effect to the exercise,
conversion or termination of all options, warrants, rights and securities
exercisable or convertible into such voting securities (the "Minimum Tender
Condition") and (2) the applicable waiting period (and any extension thereof)
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") shall have terminated or expired and any consents, approvals
and filings under any foreign antitrust law, the absence of which would
prohibit the purchase of all Shares tendered pursuant to the Offer, shall have
been obtained or made prior to the acceptance of Shares pursuant to the Offer.
The Offer also is subject to certain other terms and conditions. See Section 1
"Terms of the Offer," Section 15 "Certain Conditions of the Offer" and Section
16 "Certain Legal Matters; Regulatory Approvals" of this Offer to Purchase.
The Offer will expire at Midnight, New York City time, on Wednesday, July
11, 2001 (the "Expiration Date") unless the Offer is extended, in which case
the Expiration Date will be the latest time and date the Offer, as extended,
expires.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of June 1, 2001, among the Company, Parent and Sub (the "Merger Agreement")
pursuant to which, after completion of the Offer and satisfaction or waiver of
specified conditions, Sub will be merged with and into the Company (the
"Merger") and the Company will be the surviving corporation (the "Surviving
Corporation"). On the effective date of the Merger (the "Effective Time"),
each outstanding Share (other than Shares owned by Parent, Sub or any
subsidiary or affiliate of Parent, Sub or the Company or held in the treasury
of the Company or by stockholders who have properly perfected appraisal rights
under Delaware state law) will by virtue of the Merger, and without any action
by the holder thereof, be cancelled and converted into the right to receive
$2.60 per Share in cash, or any higher price per Share paid pursuant to the
Offer, without interest thereon (the "Merger Consideration"). The Merger
Agreement is more fully described in Section 11 of this Offer to Purchase
entitled "The Merger Agreement; Other Arrangements." Certain United States
federal income tax consequences of the sale of the
1
Shares pursuant to the Offer and the Merger, as the case may be, are discussed
in Section 5 of this Offer to Purchase entitled "Material United States
Federal Income Tax Considerations."
The Company Board has by a unanimous vote of those directors present (i)
approved and declared advisable the Merger Agreement, the Offer, the Merger
and the other transactions contemplated by the Merger Agreement, (ii)
determined that the Offer, the Merger and the other transactions contemplated
by the Merger Agreement are fair to, and in the best interests of, the Company
and the stockholders, (iii) recommended that stockholders accept the Offer and
tender their Shares pursuant to the Offer, and (iv) recommended that the
Company's stockholders approve and adopt the Merger Agreement.
Robertson Stephens, Inc. ("Robertson Stephens"), has delivered to the
Company Board a written opinion dated as of May 31, 2001 to the effect that,
as of that date and based on and subject to the matters described in the
opinion, the $2.60 per Share cash consideration to be received by the Company
Stockholders in the Offer and the Merger, taken together, was fair to such
holders from a financial point of view. A copy of Robertson Stephens' written
opinion, which describes the assumptions made, procedures followed, matters
considered and limitations on the review undertaken, is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") concurrently filed with the Securities and Exchange
Commission (the "SEC") on the date of the Offer to Purchase in connection with
the Offer, a copy of which (without certain exhibits) is being furnished to
stockholders of the Company at the same time as this Offer to Purchase.
Stockholders are urged to carefully read the full text of such opinion in its
entirety.
In the Merger Agreement the Company has represented to each of Parent and
Sub that, as of June 1, 2001, there were (i) 40,757,079 Shares issued and
outstanding (excluding 241,000 Shares held in the Company's treasury), (ii)
8,642,444 Shares reserved for issuance pursuant to outstanding options under
the Company's employee stock option plans, (iii) 161,408 Shares reserved for
issuance under outstanding warrants and (iv) 182,451 Shares reserved for
issuance under to the Company's employee stock purchase plan.
As of the date of this Offer to Purchase, Parent may be deemed to
beneficially own 7,999,488 Shares (approximately 19.6% of the Shares issued
and outstanding) by virtue of its rights under the Stock Option and Tender
Agreements entered into with the following Company stockholders (or authorized
agents): Crystal Asset Management, LLC, Noah Doyle, Primedia Inc., Experian
Capital Corporation, Steve Markowitz and Nat Goldhaber (the "Major
Stockholders"). The Stock Option and Tender Agreements require each of the
Major Stockholders to tender their respective Shares and to vote all of their
respective Shares in favor of the Merger and against any alternative
acquisition proposal. In addition, each Major Stockholder has granted Parent a
proxy to vote its Shares and an option to purchase its Shares, which is
exercisable under specified conditions. See Section 12 of this Offer to
Purchase--"Purpose of the Offer; Plans for the Company."
The Merger is subject to the satisfaction or waiver of certain conditions,
including, among other things, the approval and adoption of the Merger
Agreement by the requisite vote of the stockholders of the Company, if
required. If the Minimum Tender Condition is satisfied, Sub would have
sufficient voting power to approve the Merger without the affirmative vote of
any other stockholder of the Company. Under the Delaware General Corporation
Law (the "DGCL") if, after consummation of the Offer, Sub owns at least 90% of
the Shares then outstanding, Sub will be able to cause the Merger to occur
without a vote of the Company's stockholders. However, if Sub owns less than
90% of the Shares then outstanding after consummation of the Offer, a vote of
the Company's stockholders will be required under the DGCL to approve the
Merger. The Company has agreed, if required, to duly call, give notice of,
convene and hold a meeting of its stockholders, to be held as promptly as
practicable after the expiration of the Offer for the purpose of obtaining
stockholder approval of the Merger Agreement. See Section 11 of this Offer to
Purchase--"The Merger Agreement; Other Arrangements."
No appraisal rights are available in connection with the Offer. Stockholders
may have appraisal rights in connection with the Merger if they comply with
applicable Delaware state law and do not vote such Shares in favor of the
Merger or, if no such vote is required, if they comply with the requirements
of Delaware state law regarding the perfection of available appraisal rights.
See Section 17 of this Offer to Purchase--"Appraisal Rights."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
2
THE TENDER OFFER
1. Terms of the Offer.
Upon the terms and subject to the conditions of the Offer (including the
terms and conditions of any extension or amendment, if the Offer is extended
or amended), Sub will accept for payment and pay the Offer Price for all
Shares validly tendered and not properly withdrawn prior to the Expiration
Date as permitted under Section 4 of this Offer to Purchase entitled
"Withdrawal Rights."
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer Shares
representing at least the Minimum Tender Condition and (2) the applicable
waiting period (and any extension thereof) under the HSR Act shall have
terminated or expired and any consents, approvals and filings under any
foreign antitrust law, the absence of which would prohibit the purchase of all
Shares tendered pursuant to the Offer shall have been obtained or made prior
to the acceptance of Shares pursuant to the Offer. The Offer also is subject
to certain other terms and conditions. See Section 1 "Terms of the Offer,"
Section 15 "Certain Conditions of the Offer" and Section 16 "Certain Legal
Matters; Regulatory Approvals" of this Offer to Purchase.
Extension of the Offer.
Subject to the limitations set forth in this Offer, the Merger Agreement and
the applicable rules and regulations of the SEC described below, Sub reserves
the right, at any time and from time to time in its sole discretion, to extend
the period during which the Offer is open by giving oral or written notice of
such extension to the Depositary. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the
Offer, subject to the right, if any, of a tendering stockholder to withdraw
such stockholder's Shares. See Section 4 of this Offer to Purchase--
"Withdrawal Rights." There can be no assurance that Sub will exercise its
right to extend the Offer.
Sub has agreed that it will not, without the prior consent of the Company
(a) reduce the number of Shares subject to the Offer, (b) reduce the
consideration per Share to be paid pursuant to the Offer below the Offer
Price, (c) modify or add to the conditions set forth in Section 15 of this
Offer to Purchase in a manner adverse to the holders of Shares, (d) except as
provided in the next paragraph, extend the Offer, or (e) change the form of
consideration payable in the Offer.
Pursuant to the Merger Agreement, Sub may, without the consent of the
Company, (a) extend the Offer, if at the initial scheduled expiration date of
the Offer any of the conditions to Sub's obligation to purchase Shares are not
satisfied or waived, until such time as such conditions are satisfied or
waived, (b) extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer, and (c) extend the Offer for a period not to exceed 20 business days in
order to respond to any matter arising after the date of the Merger Agreement
and required to be disclosed to Parent and that causes Parent to amend the
tender offer documents. In addition, Sub may extend the Offer after the
acceptance of Shares in the Offer to provide for a "subsequent offering
period" under Rule 14d-11 under the Securities Exchange Act of 1934 (the
"Exchange Act") of not more than 20 business days to meet the objective (which
is not a condition to the Offer) that there be validly tendered, in accordance
with the terms of the Offer, prior to the expiration date of the Offer (as so
extended) and not withdrawn a number Shares, together with Shares then owned
by Parent and Sub, which represents at least 90% of the then outstanding
number of Shares on a fully-diluted basis.
The rights reserved in the foregoing paragraphs are in addition to any
additional rights described in Section 15 of this Offer to Purchase entitled
"Certain Conditions of the Offer."
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement. An announcement, in the case
of an extension, will be made no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration of the Offer,
in accordance with the public announcement requirements of Rule 14e-1(d).
Subject to applicable law (including
3
Rules 14d-4(d), and 14d-6(c) under the Exchange Act, which require that
material changes be promptly disseminated to stockholders in a manner
reasonably designed to inform them of such changes) and without limiting the
manner in which Sub may choose to make any public announcement, Sub shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
Subject to the Merger Agreement, if Sub makes a material change in the terms
of the Offer or the information concerning the Offer or waives any material
condition of the Offer, Sub will disseminate additional tender offer materials
(including by public announcement as set forth below) and extend the Offer to
the extent required by Rules 14d-4(d) and 14e-1 under the Exchange Act. These
rules generally provide that the minimum period during which a tender offer
must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. In the SEC's view, an offer should remain open for a
minimum of five (5) business days from the date the material change is first
published, sent or given to stockholders, and, if material changes are made
with respect to information that approaches the significance of price and the
percentage of securities sought, a minimum of ten (10) business days may be
required to allow for adequate dissemination and investor response. With
respect to a change in price, a minimum ten (10) business day period from the
date of the change is generally required to allow for adequate dissemination
to stockholders. Accordingly, if, prior to the Expiration Date, Sub increases
or decreases the consideration offered pursuant to the Offer, and if the Offer
is scheduled to expire at any time earlier than the tenth business day from
the date that notice of the increase or decrease is first published, sent or
given to holders of Shares, Sub will extend the Offer at least until the
expiration of such tenth business day. For purposes of the Offer, a "business
day" means any day other than a Saturday, Sunday or a federal holiday and
consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
Pursuant to, but subject to certain conditions in, the Merger Agreement, Sub
has agreed to (i) accept for payment all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as permitted under applicable law, and
(ii) pay for such Shares promptly thereafter.
The Company has provided Sub with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Acceptance of Payment and Payment for Shares.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), Sub will accept for payment, purchase and pay for all Shares
which have been validly tendered and not properly withdrawn pursuant to the
Offer at the earliest time following expiration of the Offer when all
conditions to the Offer described in Section 15 of this Offer to Purchase
entitled "Certain Conditions of the Offer" have been satisfied or waived by
Sub. Subject to the Merger Agreement and any applicable rules and regulations
of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Sub's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), Sub expressly reserves the right to delay the
acceptance for payment of or the payment for any tendered Shares in order to
comply in whole or in part with any applicable laws, including, without
limitation, the HSR Act and similar foreign statutes and regulations. See
Section 16 of this Offer to Purchase--"Certain Legal Matters; Regulatory
Approvals." For the avoidance of doubt, the immediately preceding sentence
means that Sub may delay the acceptance for payment of or the payment for
tendered Shares in anticipation of governmental regulatory approvals, but not
to effect general legal compliance.
4
For purposes of the Offer, Sub will be deemed to have accepted for payment
(and thereby purchased) Shares tendered and not properly withdrawn as, if and
when Sub gives oral or written notice to the Depositary of Sub's acceptance
for payment of such Shares pursuant to the Offer. Upon the terms and subject
to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price for the
Shares with the Depositary, which will act as agent for tendering stockholders
for the purposes of receiving payments from Sub and transmitting payments to
tendering stockholders. Under no circumstances will Sub pay interest on the
purchase price for any Shares accepted for payment, regardless of any
extension of the Offer or any delay in making payment.
The reservation by Sub of the right to delay the acceptance, purchase of or
payment for Shares is subject to the terms of the Merger Agreement and the
provisions of Rule 14e-1(c) under the Exchange Act, which requires Sub to pay
the consideration offered or return the Shares deposited by or on behalf of
tendering stockholders promptly after the termination or withdrawal of the
Offer.
In all cases, Sub will pay for Shares purchased in the Offer only after
timely receipt by the Depositary of (i) the certificates representing the
Shares (the "Share Certificates") or confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3 of this Offer to Purchase
entitled "Procedures for Accepting the Offer and Tendering Shares;" (ii) the
appropriate Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message (as defined below) in lieu of the
Letter of Transmittal; and (iii) any other documents required under the Letter
of Transmittal.
"Agent's Message" means a message transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-
Entry Confirmation, which message states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of the Book-Entry
Confirmation that the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Sub may enforce the Letter of
Transmittal against the participant.
If Sub does not purchase any tendered Shares pursuant to the Offer for any
reason, or if a holder of Shares submits Share Certificates representing more
Shares than are tendered, Share Certificates representing unpurchased or
untendered Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedure set forth in Section 3 of this Offer to Purchase entitled
"Procedures for Accepting the Offer and Tendering Shares," such Shares will be
credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration or termination of the Offer.
If, prior to the Expiration Date, Sub increases the Offer Price, Sub will
pay the increased Offer Price to all holders of Shares that are purchased in
the Offer, whether or not the Shares were tendered before the increase in the
Offer Price.
Sub reserves the right to transfer or assign, in whole or in part, from time
to time, to one or more direct or indirect subsidiaries of Parent, the right
to purchase all or any portion of the Shares tendered pursuant to the Offer,
but any such transfer or assignment will not relieve Sub of its obligations
under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. Procedures for Accepting the Offer and Tendering Shares.
Valid Tenders
To tender Shares pursuant to the Offer, a stockholder must comply with one
of the following: (a) a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions of
5
the Letter of Transmittal, with any required signature guarantees, Share
Certificates to be tendered and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, (b) such Shares must be properly delivered pursuant to the procedures
for book-entry transfer, as described below, and a confirmation of such
delivery received by the Depositary, which confirmation must include an
Agent's Message if the tendering stockholder has not delivered a Letter of
Transmittal, prior to the Expiration Date, or (c) the tendering stockholder
must comply with the guaranteed delivery procedures set forth below.
Book-Entry Transfer
The Depositary will establish an account with respect to the Shares at the
Book-Entry Transfer Facility for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that
is a participant in the system of the Book-Entry Transfer Facility may make a
book-entry delivery of Shares by causing the Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer at the Book-Entry Transfer Facility, either the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in lieu
of the Letter of Transmittal, and any other required documents, must, in any
case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase on or prior to the Expiration Date, or
the tendering stockholder must comply with the guaranteed delivery procedure
set forth below.
Signature Guarantees
No signature guarantee is required on the Letter of Transmittal where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box labeled "Special Delivery Instructions" or the box labeled "Special
Payment Instructions" on the Letter of Transmittal or (ii) for the account of
a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of a recognized Medallion Program approved
by the Securities Transfer Association Inc., including the Securities Transfer
Agents Medallion Program ("STAMP"), the Stock Exchange Medallion Program
("SEMP") and the New York Stock Exchange Medallion Signature Program ("MSP"),
or any other "eligible guarantor institution" as defined in Rule 17Ad-15 under
the Exchange Act (each of the foregoing, an "Eligible Institution"). In all
other cases, all signatures on a Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If a Share Certificate is registered in the name of a person or persons
other than the signer of the Letter of Transmittal, or if payment is to be
made or delivered to a person other than the registered holder, or if a Share
Certificate for unpurchased Shares is to be issued or returned to a person
other than the registered holder, then the Share Certificate must be endorsed
or accompanied by a duly executed stock power, in either case signed exactly
as the name of the registered holder appears on the Share Certificate, with
the signature on such Share Certificate or stock power guaranteed by an
Eligible Institution as provided in the Letter of Transmittal. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery
If a stockholder desires to tender Shares pursuant to the Offer and the
Share Certificates evidencing such stockholder's Shares are not immediately
available or such stockholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or
such stockholder cannot complete the procedure for delivery by book-entry
transfer on a timely basis, the stockholder's Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
6
(ii) the Depositary receives, as described below, a properly completed and
duly executed notice of guaranteed delivery (the "Notice of Guaranteed
Delivery"), substantially in the form made available by Sub, on or
prior to the Expiration Date; and
(iii) the Depositary receives the Share Certificates (or a Book-Entry
Confirmation) evidencing all tendered Shares, in proper form for
transfer, in each case together with the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any
required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message), and any other documents required by
the Letter of Transmittal, within three National Association of
Securities Dealers Automated Quotation System trading days after the
date of execution of such Notice of Guaranteed Delivery.
Notice of Guaranteed Delivery
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Sub.
Notwithstanding any other provision of the Offer, Sub will pay for Shares
only after timely receipt by the Depositary of: (i) Share Certificates
representing, or Book-Entry Confirmation with respect to, the Shares, (ii) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), together with any required signature guarantees (or, in the case of
a book-entry transfer, an Agent's Message), and (iii) any other documents
required by the Letter of Transmittal.
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Sub in its sole discretion, which determination will be final and binding
on all parties. Sub reserves the absolute right to reject any and all tenders
determined by it not to be in proper form or the acceptance for payment of
which may, in the opinion of its counsel, be unlawful. Subject to the terms of
the Merger Agreement, Sub also reserves the absolute right to waive any
condition of the Offer or any defect or irregularity in the tender of any
Shares of any particular stockholder of the Company, whether or not similar
defects or irregularities are waived in the case of other stockholders of the
Company.
Subject to the Merger Agreement, Sub's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Shares will be
deemed to have been validly made until all defects and irregularities have
been cured or waived. None of Parent, Sub, or any of their respective
affiliates or assigns, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
Appointment as Proxy
By executing the Letter of Transmittal, a tendering stockholder irrevocably
appoints designees of Sub as such stockholder's agents, attorneys-in-fact and
proxies, with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such stockholder's rights with
respect to the Shares tendered by such stockholder and accepted for payment by
Sub and with respect to any and all other Shares or other securities or rights
issued or issuable in respect of those Shares or after the date of this Offer
to Purchase. All such powers of attorney and proxies will be considered
irrevocable and coupled with an interest in the tendered Shares, as the case
may be. This appointment will be effective when, and only to the extent that,
Sub accepts such Shares for payment. Upon such acceptance for payment, all
other powers of attorney and proxies given by such stockholder with respect to
such Shares and such other securities or rights prior to such payment will be
revoked without further action, and no subsequent powers of attorney or
proxies may be given, nor may any subsequent written consent be executed by
such stockholder (and, if given or executed, will not be deemed to be
effective) with respect thereto. With respect to the Shares for which the
appointment is effective, the designees of Sub will be
7
empowered to exercise all voting and other rights of such stockholder as the
designees, in their sole discretion, may deem proper at any annual or special
meeting of the Company's stockholders or any adjournment or postponement
thereof, or by written consent in lieu of any such meeting or otherwise. In
order for Shares to be deemed validly tendered, immediately upon the
acceptance for payment of such Shares, Sub or its designee must be able to
exercise full voting rights to the extent permitted under applicable law with
respect to such Shares.
Tender Constitutes Binding Agreement
Sub's acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between Sub and
the tendering stockholder upon the terms and subject to the conditions of the
Offer.
Risk of Loss
Delivery of documents to the Book-Entry Transfer Facility in accordance with
the Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary. The method of delivery of Share Certificates, the Letter of
Transmittal and all other required documents, including delivery through the
Book-Entry Transfer Facility, is at the option and risk of the tendering
stockholder, and the delivery will be deemed made only when actually received
by the Depositary (including, in the case of a book-entry transfer, a Book-
Entry Confirmation). If delivery is by mail, registered mail with return
receipt requested and properly insured is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
4. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn (i) at any time prior to the Expiration Date and
(ii) at any time after August 12, 2001 (or such later date as may apply if the
Offer is extended), unless accepted for payment by Sub pursuant to the Offer
prior to that date. However, pursuant to Rule 14d-7 under the Exchange Act, no
withdrawal rights apply to Shares tendered during any subsequent offering
period and no withdrawal rights apply during a subsequent offering period with
respect to Shares tendered in the Offer and accepted for payment. See Section
1 of this Offer to Purchase--"Terms of the Offer."
If Sub extends the Offer, is delayed in its acceptance for payment of
Shares, or is unable to accept Shares for payment pursuant to the Offer for
any reason, then, without prejudice to Sub's rights under the Offer, the
Depositary may nevertheless retain tendered Shares on behalf of Sub, and such
Shares may not be withdrawn, except to the extent that tendering stockholders
are entitled to and duly exercise their withdrawal rights as described in this
Section 4. Any such delay will be by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and (if Share
Certificates have been tendered) the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If
Share Certificates representing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case
of Shares tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth
in Section 3 of this Offer to Purchase entitled "Procedures for Accepting the
Offer and Tendering Shares," the notice of withdrawal must specify the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described
in the first sentence of this paragraph.
8
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will be considered not validly tendered for purposes of the Offer. However,
withdrawn Shares may be tendered again at any time prior to the Expiration
Date by following one of the procedures described in Section 3 of this Offer
to Purchase entitled "Procedures for Accepting the Offer and Tendering
Shares."
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Sub in its sole discretion, whose
determination will be final and binding. None of Parent, Sub, or their
respective affiliates or assigns, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
5. Material United States Federal Income Tax Considerations.
The following is a summary of the material United States federal income tax
consequences that are generally applicable to holders of Shares who exchange
such Shares for cash pursuant to the Offer and to holders of Shares who
exchange such shares for cash pursuant to the Merger. This discussion is based
on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, and judicial and administrative decisions, all of which are
subject to change possibly with retroactive effect. Holders of Shares should
be aware that this discussion does not deal with all federal income tax
considerations that may be relevant to particular holders in light of their
individual circumstances. For example, this discussion does not address the
tax consequences of the Offer and the Merger to holders of Shares who are
dealers in securities or foreign persons, or do not hold their Shares as
capital assets. Nor does it address the tax consequences of the Offer or the
Merger to holders of Shares who acquired such Shares through the exercise of
employee stock options or otherwise as compensation or holders who are
otherwise subject to special tax treatment under the Code (such as insurance
companies, tax-exempt entities and regulated investment companies). In
addition, the following discussion does not address the tax consequences of
the Offer or the Merger to the holders of Shares under foreign, state, or
local tax laws. No ruling will be requested from the Internal Revenue Service
regarding the tax consequences of the Offer and thus there can be no assurance
that the Internal Revenue Service will agree with the discussion below.
Accordingly, all holders of Shares are urged to consult their own tax advisors
to determine the particular tax consequences to them of the Offer and the
Merger, including the applicable federal, state, local and foreign tax
consequences.
In general, the receipt of cash by the holders of Shares pursuant to the
Offer and/or the Merger will constitute a taxable transaction for United
States federal income tax purposes. For United States federal income tax
purposes, a holder tendering Shares generally would recognize gain or loss in
an amount equal to the difference between the amount of cash received by the
holder pursuant to the Offer and/or the Merger and the holder's tax basis in
the Shares. Generally, gain or loss must be calculated separately for each
identifiable block of Shares (i.e., shares acquired at the same per share cost
in a single transaction). Generally, a holder's gain or loss will be a capital
gain or loss. Any such capital gain or loss will be long term if, as of the
date of the disposition of its Shares, the holder held such Shares for more
than one year. In the case of holders of Shares who are individuals, long term
capital gains are currently subject to tax at a lower maximum tax rate than
ordinary income or short-term capital gains. There are limitations on the
deductibility of capital losses.
Backup United States Federal Income Tax Withholding.
Under the United States federal income tax laws, the payments made by the
Depositary to holders of Shares, pursuant to the Offer and/or the Merger may,
under certain circumstances, be subject to backup withholding at a rate of
31%. To avoid backup withholding with respect to payments made pursuant to the
Offer and/or the Merger, each holder must provide the Depositary with proof of
an applicable exemption from backup withholding or a correct taxpayer
identification number, and must otherwise comply with the applicable
requirements of the backup withholding rules. The Letter of Transmittal
provides instructions on how to provide the Depositary with information to
prevent backup withholding with respect to cash received pursuant to the Offer
and/or the Merger. See Instruction 9 of the Letter of Transmittal. Any amount
withheld under the backup
9
withholding rules is not an additional tax. Rather, the tax liability of the
persons subject to backup withholding will be reduced by the amount of tax
withheld.
The foregoing is intended as a general summary only. Because the tax
consequences to a particular holder may differ based on that holder's
particular circumstances, each holder should consult his or her own tax
advisor regarding the tax consequences of the Offer and the Merger.
6. Price Range of Shares.
The Shares trade on the National Association of Securities Dealers Automated
Quotation System under the symbol "MYPT." The following tables set forth, for
the calendar quarters shown, the high and low bid prices for the Shares on the
National Association of Securities Dealers Automated Quotation System based on
published financial sources.
MyPoints.com, Inc. Common Stock
High Low
------- -------
Calendar 1999
Third Quarter................................................ $26.500 $ 8.000
Fourth Quarter............................................... 97.690 11.500
Calendar 2000
First Quarter................................................ 76.875 25.250
Second Quarter............................................... 36.50 10.188
Third Quarter................................................ 21.000 4.875
Fourth Quarter............................................... 6.625 1.125
Calendar 2001
First Quarter................................................ 1.938 0.500
Second Quarter (through June 1, 2001)........................ 1.600 0.594
In the Merger Agreement, the Company has represented to each of Parent and
Sub that, as of June 1, 2001, there were 40,757,079 Shares (excluding 241,000
Shares held in the Company's treasury). On June 1, 2001, the last full day of
trading before the public announcement of the execution of the Merger
Agreement, the closing price of the Shares on the National Association of
Securities Dealers Automated Quotation System was $1.60 per Share. On June 12,
2001, the last full day of trading before the commencement of the Offer, the
closing price of the Shares on the National Association of Securities Dealers
Automated Quotation System was $2.56 per Share.
Stockholders are urged to obtain a current market quotation for the Shares.
The Company has never paid dividends on its capital stock. The Merger
Agreement prohibits the Company from declaring or paying any dividends, except
for the payment of dividends or distributions by a wholly owned subsidiary of
the Company to the Company, from the date of the Merger Agreement until the
Effective Time.
7. Certain Information Concerning the Company.
The Company is a Delaware corporation with its principal executive offices
located at 100 California Street, 12th floor, San Francisco, CA 94111 and its
telephone number is (415) 676-3700.
The Company is a leading provider of Internet direct marketing services. Its
database-driven direct marketing services, marketed under the trademarks
MyPoints(R) and Cybergold(R) offer direct marketers an approach to internet
advertising that integrates targeted email and web-based offers with
incentives to respond to those offers. Points earned in the MyPoints program
may be redeemed for a wide variety of products and servicers, such as gift
certificates, travel awards and prepaid phone cards. The Cybergold program
offers a cash-based reward system. MyPoints' approach to direct marketing
provides internet consumers with the opportunity
10
to earn rewards by responding to direct offers and by participating in other
online and offline activities, and provides businesses with an integrated set
of online customer acquisition and retention tools. In addition, MyPoints
builds and manages on a select basis co-branded and private label consumer
loyalty programs for MyPoints' loyalty partners.
8. Certain Information Concerning UAL, Parent and Sub.
Sub is a Delaware corporation and, to date, has engaged in no activities
other than those incident to its formation and the Offer and the Merger. Sub
is currently a wholly owned subsidiary of Parent. The principal executive
offices of Sub are located at 1200 E. Algonquin Rd., Elk Grove Township, IL
60007 and Sub's telephone number is (847) 700-4000.
Parent is a Delaware corporation with its principal executive offices
located at 1200 E. Algonquin Rd., Elk Grove Township, IL 60007. The telephone
number of Parent is (847) 700-4000. Parent, founded in October 2000, is a
wholly owned subsidiary of UAL Corporation ("UAL") that was created to focus
the Internet initiatives and investments of United Air Lines, Inc. ("United")
into one company. Parent provides United's customers with technologies and
services for their business and leisure travel needs.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of UAL, Parent and Sub and certain other information are set forth in
Schedule I to this Offer to Purchase.
Except as described elsewhere in this Offer to Purchase, (i) none of UAL,
Parent, Sub nor, to the best knowledge of UAL, Parent and Sub, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of UAL, Parent or Sub or any of the persons so
listed beneficially owns or has any right to acquire, directly or indirectly,
any Shares; and (ii) none of UAL, Parent, Sub nor, to the best knowledge of
UAL, Parent and Sub, any of the persons or entities referred to above nor any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement or as otherwise described in this
Offer to Purchase, none of UAL, Parent, Sub nor, to the best knowledge of UAL,
Parent and Sub, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with
any other person with respect to any securities of the Company, including, but
not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss, guarantees of profits, division of profits or loss or
the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, (i) none of UAL, Parent, Sub
nor, to the best knowledge of UAL, Parent and Sub, any of the persons listed
on Schedule I hereto, has had any business relationship or transaction with
the Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the SEC applicable
to the Offer, and (ii) there have been no contracts, negotiations or
transactions between Parent or any of its subsidiaries or, to the best
knowledge of UAL, Parent, any of the persons listed in Schedule I to this
Offer to Purchase, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer
or other acquisition of securities, an election of directors or a sale or
other transfer of a material amount of assets.
None of the persons listed in Schedule I to this Offer to Purchase has,
during the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). None of the persons listed in
Schedule I has, during the past five years, been a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to federal or state securities laws, or a finding of any violation of
federal or state securities laws.
11
9. Source and Amount of Funds.
The Offer is not conditioned upon any financing arrangements.
Parent and Sub estimate that the total amount of funds required to purchase
all of the outstanding Shares that Parent or its affiliates do not own
pursuant to the Offer and the Merger and to pay related fees and expenses will
be approximately $113,500,000. Parent expects to obtain such funds from cash
on hand and its other working capital sources.
10. Background of the Offer; Past Contacts or Negotiations with the Company.
In late February 2001, management of the Company was contacted by
representatives of Parent regarding the possibility of acquiring the Company.
The fact that management had been approached was reported to the Board of
Directors of the Company at the March 2, 2001 Board meeting. The Company's
legal counsel made a presentation regarding the directors' fiduciary duties
and management was authorized to continue preliminary discussions with Parent.
Discussions proceeded between Parent and the Company through mid-March 2001.
Management updated the Board of Directors of the Company on March 14, 2001.
Management was authorized to continue with discussions.
In later March 2001, while discussions continued, Parent requested that it
be allowed to begin a preliminary due diligence review of the Company to
determine if it wanted to proceed to negotiation of a definitive agreement
with the Company. The Board of Directors of the Company authorized the due
diligence review by Parent and a Non-Disclosure Agreement, dated April 4,
2001, between the Company and Parent was executed. That Non-Disclosure
Agreement is filed as Exhibit (d)(2) and is incorporated by reference herein.
Parent began its preliminary due diligence review in early April of 2001.
After the preliminary due diligence review, the parties entered into a non-
binding letter of intent on April 30, 2001. Pursuant to the letter of intent,
the Company agreed that, for a period of 30 days from the date of the letter
of intent, it would not directly or indirectly solicit or accept offers for
the purchase of the Company.
During the early and middle part of May 2001, Parent completed its due
diligence review and entered into negotiations with the Company of a
definitive Merger Agreement and a Redemption Agreement. The Company also
retained Robertson Stephens, Inc. ("Robertson Stephens") to opine as to the
fairness of the Offer Price and the Merger Consideration. Negotiations of the
Merger Agreement and the Redemption Agreement continued through May 30, 2001
at which time the Board of Directors received an opinion (as updated as of May
31, 2001, the "Fairness Opinion") from Robertson Stephens, that, subject to
and based upon the matters described in the Fairness Opinion, the $2.60 per
share in cash to be received in the Offer and the Merger was fair from a
financial point of view to the Company's stockholders.
Based upon the Fairness Opinion which was updated and issued effective on
May 31, 2001 and acceptable negotiations to date, the Board approved the
Merger Agreement, the Stock Option and Tender Agreements and the Redemption
Agreement on May 31, 2001. The Merger Agreement and the Redemption Agreement
were executed on June 1, 2001. On June 1, 2001 the Stock Option and Tender
Agreements were signed by the respective stockholders. The Stock Option and
Tender Agreements are filed as Exhibits (d)(3) through (d)(8) to the Schedule
TO and are incorporated by reference herein. On June 1, 2001, the employment
agreements with Messrs. Fullmer, Han and Steuart were signed by the Company
and the respective employees.
The execution of the Merger Agreement was announced by a joint press release
on Monday, June 4, 2001 before the opening of the market.
On June 13, 2001, Parent and Sub commenced the Offer.
12
11. The Merger Agreement; Other Arrangements.
The Merger Agreement
The following is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as exhibit (d)(1) to the Tender Offer
Statement on Schedule TO (the "Schedule TO") filed by Parent and Sub on June
13, 2001 with the SEC in connection with the Offer. The following summary may
not contain all of the information important to you, and is qualified in its
entirety by reference to the Merger Agreement, which is incorporated by
reference into this Offer to Purchase. Accordingly, we encourage you to read
the entire Merger Agreement. Capitalized terms used in this summary and not
otherwise defined in this Offer to Purchase have the meanings set forth in the
Merger Agreement.
The Offer. The Merger Agreement provides that, following the satisfaction or
waiver of the conditions of the Offer set forth in Section 15 of this Offer to
Purchase entitled "Certain Conditions of the Offer," Sub will purchase all
shares of Company Common Stock validly tendered and not withdrawn. Parent and
Sub have agreed not to, without the prior consent of the Company (a) reduce the
number of shares of Company Common Stock subject to the Offer (b) reduce the
consideration per share of Company Common Stock to be paid pursuant to the
Offer below the Offer Price, (c) modify or add to the conditions of the Offer,
in a manner adverse to the holders of shares of Company Common Stock, (d)
except for the specific instances described below, extend the Offer, or (e)
change the form of consideration payable in the Offer.
Sub may, however, without the consent of the Company, extend the Offer (a) if
at the initial expiration date of the Offer any of the conditions to the Offer
are not satisfied or waived, (b) for any period required by any rule,
regulation, interpretation or position of the SEC, or (c) for up to 20 business
days in order to respond to any matter arising after the date of the Merger
Agreement and required to be disclosed to Parent and that causes Parent to
amend the Offer Documents. In addition, Sub may extend the Offer after the
acceptance of shares of Company Common Stock in the Offer to provide for a
"subsequent offering period" under Rule 14d-11 under the Exchange Act of not
more than 20 business days to meet the objective (which is not a condition to
the Offer) that there be validly tendered, in accordance with the terms of the
Offer, prior to the expiration date of the Offer (as so extended) and not
withdrawn a number of Fully-Diluted Shares, together with any shares of Company
Common Stock then owned by Parent and Sub, which represents at least 90% of the
then outstanding number of any shares of Company Common Stock.
Directors. The Merger Agreement provides that promptly after Sub purchases
and pays for that number of shares of Company Common Stock which represents at
least a majority of the Fully Diluted Shares, Sub will be entitled to designate
such number of directors, rounded up to the next whole number, on the Company
Board which is equal to the product of the total number of directors on the
Company Board after giving effect to the directors designated pursuant to this
sentence multiplied by the percentage that the number of shares of Company
Common Stock so accepted for payment by Sub bears to total number of Fully
Diluted Shares, and the Company shall, at such time, cause Sub's designees to
be so appointed or elected. Following the election or appointment of Sub's
designees and prior to the Effective Time, any amendment or termination of the
Merger Agreement, extension for the performance or waiver of the obligations of
Parent or Sub or waiver of the Company's rights under the Merger Agreement,
requires the concurrence of a majority of the members of the Company Board who
were a member on the date of the Merger Agreement.
The Merger. The Merger Agreement provides that, following satisfaction or
waiver of the conditions set forth in the Merger Agreement, Sub will be merged
with and into the Company in accordance with the DGCL, with the Company
surviving and becoming a wholly owned subsidiary of Parent. Each issued and
outstanding share of Company Common Stock (other than shares owned by the
Company, the Company Subsidiaries, Parent or Sub or stockholders, if any, who
are entitled to and who exercise their appraisal rights under the DGCL) will be
converted into the right to receive Merger Consideration, without interest.
Company Stock Options. (a) Each Company Employee Stock Option outstanding
immediately prior to the Effective Time, whether or not then vested, will be
canceled in exchange for a cash payment (subject to any required withholding of
Taxes and without interest) of an amount equal to the excess, if any, of the
price per
13
share of Company Common Stock to be paid pursuant to the Offer over the
exercise price per share of Company Common Stock subject to such Company
Employee Stock Option, multiplied by the number of shares of Company Common
Stock that otherwise would have been issued upon exercise of such Company
Employee Stock Option. In addition, each of the Company Option Plans will be
terminated and any provision in a Company Plan that provides for the issuance,
transfer or grant of or an interest in the capital stock of the Company will be
deleted to ensure that after the Effective Time a holder of a Company Employee
Stock Option or a participant in any Company Plan will not have any right to
acquire capital stock of the Company or the Surviving Corporation.
(b) The Company Board has agreed to take such actions as are required to
adjust the terms of all outstanding Company Employee Stock Options granted
pursuant to the Company 1999 Stock Plan to provide that such options which are
held by individuals who are employed as of the Effective Time will become fully
vested as of the Effective Time to the extent such Company Employee Stock
Options would have become vested in accordance with Section 12(c) of the
Company 1999 Stock Plan had the option holder's employment with the Company
been constructively terminated (as defined in the Company 1999 Stock Plan). Any
Company Employee Stock Options that became vested pursuant this paragraph (b)
will be cancelled as of the Effective Time in exchange for a cash payment by
the Company in accordance with paragraph (a) above.
Company Warrants. The Company will provide notice to each holder of Company
Warrants in accordance with Section 8 of each holder's respective warrant
agreement. All Company Warrants not exercised prior to the Effective Time will
be terminated without consideration.
Employee Stock Purchase Plan. The Company Board has agreed to take such
actions under the Company's Employee Stock Purchase Plan ("ESPP") as may be
necessary or desirable in Parent's reasonable judgment to cause the ESPP to be
terminated effective with the exercise date occurring on June 30, 2001 pursuant
to Section 20 of the ESPP.
Stockholder Approval. The DGCL requires that the Merger be adopted by the
Company Board and, if the "short-form" merger procedure described below is not
available, approved by the holders of a majority of the Company's outstanding
voting securities. The Company Board unanimously adopted and approved the
Offer, the Merger and the Merger Agreement. As a result, the only additional
action that may be necessary to effect the Merger is approval of the Merger
Agreement by the Company's stockholders if a "short-form" merger procedure is
not available. If required by the DGCL, the Company will call and hold a
special meeting of its stockholders as promptly as practicable following the
consummation of the Offer for the purposes of considering and voting upon the
adoption of the Merger Agreement. At any such meeting, all shares of Company
Common Stock then owned by Sub or any other Subsidiary of Parent will be voted
in favor of the approval of the Merger Agreement and the Merger. If Sub
acquires through the Offer voting power with respect to at least a majority of
the Fully Diluted Shares (which would be the case if the Minimum Tender
Condition were satisfied and Sub were to accept for payment shares of Company
Common Stock tendered pursuant to the Offer), Sub will have sufficient voting
power to effect the Merger without the affirmative vote of any other
stockholder of the Company.
The DGCL also provides for a "short-form" merger procedure if a corporation
owns at least 90% of the outstanding shares of each class of voting stock of a
corporation. A "short-form" merger may be consummated without prior notice to,
or the approval of, the other stockholders. Accordingly, if, as a result of the
Offer, Sub or any other Subsidiary of Parent acquires or controls the voting
power of at least 90% of the outstanding shares of Company Common Stock, Sub
intends to effect the Merger without prior notice to, or any action by, any
other stockholder of the Company.
Conditions to Each Party's Obligation to Effect the Merger. The Merger
Agreement provides that the respective obligations of each party to effect the
Merger is subject to the satisfaction or waiver of the following conditions:
(i) if required, the Company has obtained the Company Stockholder Approval;
(ii) the waiting period under the HSR Act has been terminated or has expired
and any consents, approvals and filings under any foreign antitrust law, the
absence of which would prohibit the consummation of Merger, have been obtained
or made; (iii) no temporary restraining order, preliminary or permanent
injunction or other Order or other legal restraint or prohibition preventing or
imposing any conditions or limitations on the consummation of the Offer, the
Merger
14
or any of the transactions contemplated by the Merger Agreement, the Stock
Option and Tender Agreements or the Redemption Agreement (the "Transactions")
is in effect; and (iv) Sub has accepted shares of Company Common Stock for
payment pursuant to the Offer.
Representations and Warranties. The Merger Agreement contains representations
and warranties of the parties that expire as of the Effective Time. These
include representations and warranties of the Company with respect to, among
other things, organization, standing and power; company subsidiaries and equity
interests; capital structure; authorizations, validity of the Merger Agreement
and necessary action; no conflicts and consents; SEC documents, financial
statements and undisclosed liabilities; information supplied; absence of
certain changes or events; taxes; benefit plans, ERISA compliance and excess
parachute payments; litigation; compliance with applicable laws; contracts and
debt instruments; the Company's rights agreement; intellectual property;
takeover laws; affiliate transactions; real property; insurance; compensation;
privacy; receivables; copies of certain documents; underlying documents; and
brokers, fees and expenses.
The Merger Agreement also contains representations and warranties of Parent
and Sub, including, among other things, organization, standing and power;
financing; ownership of Company Common Stock; authorization, validity of the
Merger Agreement and necessary action; no conflicts and consents; information
supplied; brokers; and litigation.
Conduct of Business by the Company. The Merger Agreement provides that from
the date of the Merger Agreement until the Effective Time the Company will, and
will cause each of its Subsidiaries to, conduct its business in the ordinary
and usual course of business. Except for matters expressly permitted by the
Merger Agreement or disclosed in the Company Disclosure Letter, the Company
will not, and will not permit its Subsidiaries to, do any of the following
without the prior written consent of Parent: (i) (A) declare, set aside or pay
any dividends, (B) split, combine or reclassify any of its capital stock, (C)
purchase, redeem or otherwise acquire any shares of capital stock or (D) adopt
a plan of complete or partial liquidation or otherwise reorganize its
operations; (ii) authorize for issuance, deliver, sell or grant (A) any shares
of its capital stock, (B) any Voting Company Debt or other voting securities,
(C) any securities convertible into or exchangeable for, or any options
warrants or rights to acquire, any such share, voting securities or convertible
or exchangeable securities or (D) any "phantom" stock, "phantom" stock rights,
stock appreciation rights or stock-based performance units, other than the
issuance of Company Common Stock under the ESPP, or upon exercise of Company
Employee Stock Options or Company Warrants outstanding on the date of the
Merger Agreement; (iii) amend its organizational documents; (iv) acquire any
business, assets or any Person in any manner; (v) (A) grant any increase in
compensation or fringe benefits, (B) grant any increase in severance or
termination pay, (C) enter into or amend any employment, consulting,
indemnification, severance or termination agreement with any such present or
former employee, officer or director, (D) enter into or amend in any material
respect any Company Plan, (E) accelerate any rights or benefits, or make any
material determinations under any Company Plan, (F) loan or advance money or
other property to any present or former employees, officers or directors or (G)
grant or amend any Company Employee Stock Option; (vi) make any change in
accounting methods, principles or practices, except as required by a change in
GAAP; (vii) sell or otherwise dispose of (or permit to become subject to any
Lien, other than a Permitted Lien) any properties or assets; (viii) (A) incur
any indebtedness or guarantee any indebtedness of another Person or enter into
any arrangement having the economic effect of any of the foregoing, or (B) make
any loans, advances or capital contributions to, or investments in, any other
Person; (ix) make any expenditures that, individually, is in excess of $150,000
or in the aggregate, are in excess of $500,000; (x) make any Tax election or
settle or compromise any Tax liability or refund; (xi) (A) pay, discharge or
satisfy any claims, liabilities or obligations, other than payment, discharge
or satisfaction in accordance with their terms, of liabilities reflected or
reserved against in the most recent consolidated financial statements, (B)
cancel any material indebtedness or waive any claims or rights of substantial
value or (C) waive the benefits of, or modify in any manner, any
confidentiality, standstill or similar agreement to which it is a party; (xii)
amend any Material Contract or Contract providing for payments or otherwise
involving amounts in excess of $150,000 or enter into any Material Contract;
(xiii) initiate, compromise or settle any Proceeding; (xiv) close any facility
or office; and (xv) authorize any of, or commit or agree to take any of, the
foregoing actions; and (b) take any action that
15
could reasonably be expected to result in (i) any of the Company's
representations and warranties becoming untrue or (ii) any condition to the
Offer or the Merger not being satisfied.
Commercially Reasonable Efforts; Notification. Each of the parties to the
Merger Agreement have agreed, subject to the satisfaction or waiver of the
conditions to the Merger, to use their respective commercially reasonable
efforts to take all actions necessary, proper or advisable to consummate the
Offer, the Merger and the other Transactions, including (i) obtaining all
necessary consents and approvals from Governmental Entities, and making all
necessary registrations and filings with any Governmental Entity, including
under the HSR Act, (ii) obtaining all necessary consents, approvals or waivers
from third parties, (iii) defending any lawsuit or other legal proceeding
challenging the Merger Agreement or any other Transaction Agreement or the
consummation of the Transactions, and (iv) the execution and delivery of any
additional instruments necessary to consummate the Transactions.
In addition, the Company and the Company Board have agreed to (A) take all
commercially reasonable action necessary to ensure that no state takeover
statute or regulation is or becomes applicable, and (B) if any state takeover
statute or regulation should become applicable, take all commercially
reasonable action necessary to ensure that the Offer, the Merger and the other
Transactions may be consummated as promptly as practicable on the terms
contemplated by the Transaction Agreements.
Without Parent's prior written consent, the Company shall not (and will not
allow any Company Subsidiary to), commit to any divestitures, licenses, hold
separate arrangements or similar matters affecting business operating
practices. If such divestitures, licenses, hold separate arrangements or
similar matters are contingent on consummation of the Offer, the Company will
commit to, and will use its reasonable best efforts to effect (and will cause
its Subsidiaries to commit to and use their reasonable best efforts to effect),
any such divestitures, licenses, hold separate arrangements or similar matters.
However, neither Parent nor any of its Subsidiaries will be required to agree
(with respect to Parent, the Company or any of their respective Subsidiaries)
to any divestitures, licenses, hold separate arrangements or similar matters,
including covenants affecting business operating practices.
No Solicitation. The Merger Agreement provides that until the earlier of the
Effective Time or the termination of the Merger Agreement, the Company and the
Company Subsidiaries will not (and the Company will not permit any of its or
any of its Company Subsidiaries' officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to) directly or
indirectly (i) solicit, encourage, engage in discussions or negotiate with,
provide information with respect to the Company, enter into an agreement, or
take any other action intended to facilitate any inquiry or effort relating to
an Alternative Acquisition (an "Alternative Acquisition Proposal"), or (ii)
make or authorize any statement, recommendation or solicitation in support of
any possible Alternative Acquisition. However, prior to Sub accepting any
shares of Company Common Stock for payment pursuant to the Offer, the Company
Board may, to the extent required by the its fiduciary obligations under
Delaware law, in response to a proposal for an Alternative Acquisition (as
defined below) that the Company Board determines, in good faith after
consultation with independent counsel and an independent financial advisor, is
or is reasonably likely to result in a Superior Company Proposal (as defined in
below), that was not solicited by the Company or otherwise resulted from a
breach of the Merger Agreement (subject to providing prior written notice to
Parent), (x) furnish information with respect to the Company to the Person or
group making such Alternative Acquisition Proposal and its representatives
pursuant to a confidentiality agreement with terms not materially more
favorable than those applicable to Parent under the Confidentiality Agreement
and (y) participate in discussions and negotiations with such Person regarding
such Alternative Acquisition Proposal to the extent required by the Company
Board's fiduciary duties.
The Company Board may not (i) withdraw or modify its approval or
recommendation of the Merger Agreement, the Offer or the Merger in a manner
adverse to Parent or Sub, (ii) approve or permit the Company to enter into any
letter of intent, agreement in principle, definitive agreement or similar
agreement which is intended to or is reasonably likely to lead to any
Alternative Acquisition Proposal, (iii) approve or recommend any Alternative
Acquisition Proposal or (iv) propose, agree or resolve to take any of the
foregoing actions. However,
16
if prior to Sub's acceptance for payment of the Company Common Stock pursuant
to the Offer, the Company Board receives a Superior Company Proposal and the
Company Board determines in good faith after consultation with independent
counsel, that it is necessary to do so in order to comply with its fiduciary
obligations under Delaware law, the Company Board may, during such period, in
response to a Superior Company Proposal that was unsolicited and did not
otherwise result from a breach of its no solicitation covenant, withdraw or
modify its approval or recommendation of the Offer, the Merger and the Merger
Agreement and approve or recommend such Superior Company Proposal.
The Company must, within 24 hours, advise Parent orally and in writing of any
Alternative Acquisition Proposal or any inquiry that could lead to any
Alternative Acquisition Proposal, which writing shall include the identity of
the Person making such Alternative Acquisition Proposal or inquiry and the
material terms of any such Alternative Acquisition Proposal or inquiry. The
Company has also agreed to keep Parent reasonably informed of the status of any
Alternative Acquisition Proposal or inquiry and to provide to Parent copies of
all material correspondence provided to or provided by the Company in
connection with any Alternative Acquisition Proposal.
"Alternative Acquisition" means any possible acquisition of the Company
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its capital stock or assets.
"Superior Company Proposal" means any proposal made by a third party to
acquire all or substantially all the equity securities or assets of the Company
(i) that is not subject to a financing contingency and (ii) that is on terms
that the Company Board determines in its good faith judgment (after
consultation with an independent financial adviser, with only customary
qualifications, and independent legal counsel) to be superior for the holders
of Company Common Stock, from a financial point of view, to the Offer and the
Merger, taking into account all the terms and conditions of such proposal and
the Merger Agreement (including any proposal made by Parent to amend the terms
of the Merger Agreement, the Offer and the Merger) taking into account the
likelihood of consummation in light of all financial, regulatory, legal and
other aspects of such proposal (including, without limitation, any antitrust or
competition law approvals or non-objections).
Termination. The Merger Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time, whether before or after approval by
the stockholders of the Company:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if Sub has not accepted for payment any shares of Company Common
Stock pursuant to the Offer on or before September 30, 2001 (the
"Outside Date"), unless the failure to consummate the Merger is the
result of a breach of the Merger Agreement by the party seeking to
terminate the Merger Agreement;
(ii) if any Governmental Entity issues an Order or takes any other
action (that has become final and nonappealable) permanently
enjoining, restraining or otherwise prohibiting the Merger;
(iii) if Sub has failed to commence the Offer within ten business days
following the date of the Merger Agreement or the Offer has
terminated or expired without Sub having purchased any shares of
Company Common Stock, provided that this right to terminate is
not available to any party whose failure to fulfill its
obligations under the Merger Agreement or the failure of whose
representations and warranties to be true results in the failure
of any such condition; or
(iv) if the Company Stockholder Approval is not obtained;
(c) by Parent, if Sub has not accepted for payment any shares of Company
Common Stock pursuant to the Offer and the Company breaches or fails to
perform in any material respect any of its representations, warranties,
covenants or agreements contained in the Merger Agreement, and this breach
or failure to perform gives rise to the failure of a condition to the Offer
that cannot be cured within 30 days of receiving written notice from Parent
(provided that Parent is not then in material breach of the Merger
Agreement);
17
(d) by Parent, if the Company Board withdraws or modifies in a manner
adverse to Parent its approval or recommendation of the Offer, the Merger
or the Merger Agreement or fails to recommend that its stockholders accept
the Offer or give the Company Stockholder Approval or if the Company Board
fails to reaffirm publicly and unconditionally its recommendation to the
Company's stockholders within 10 business days of Parent's written request
to do so;
(e) by the Company, if Sub has not accepted for payment any shares of
Company Common Stock pursuant to the Offer and the Company Board has
finally determined to approve, endorse or recommend an Alternative
Acquisition Proposal that constitutes a Superior Company Proposal provided
that the Company may not terminate the Merger Agreement unless (i) the
Company has complied with its non solicitation covenant, (ii) at least five
business days prior to terminating the Merger Agreement the Company has
provided written notice to Parent advising it that it has received a
Superior Company Proposal it intends to accept, specifying the material
terms and conditions of such proposal, (iii) the Company has caused its
financial and legal advisors to negotiate in good faith with respect to any
attempt or proposal by Parent to make such adjustments in the financial
terms of the Merger Agreement that are equal or superior to the financial
terms of the Superior Company Proposal and the Company and Parent have not
agreed upon any such adjustment, and (iv) the Company has paid or
concurrently pays the Termination Fee described below (provided the Company
has paid or concurrently pays to Parent the Termination Fee described
below); or
(f) by the Company, if Sub has not accepted for payment any shares of
Company Common Stock pursuant to the Offer and Parent or Sub breaches or
fails to perform in any material respect any of its representations,
warranties, covenants or agreements contained in the Merger Agreement and
this breach or failure to perform gives rise to the failure of a condition
to the Merger that cannot be cured within 30 days of receiving written
notice from the Company (provided that the Company is not then in material
breach of the Merger Agreement).
Effect of Termination; Fees and Expenses. The Company must pay to Parent a
fee in an amount equal to $4,500,000 (the "Termination Fee") if the Merger
Agreement is terminated under paragraphs (c) (d) or (e) described above under
"--Termination." The Company must also pay the Termination Fee to Parent if (a)
after the date of the Merger Agreement any Person communicates in a manner
which is or becomes public prior to or during the pendency of the Offer an
intention to make an Alternative Acquisition Proposal that is not withdrawn at
least five business days prior to the expiration of the Offer, (b) the Merger
Agreement is terminated pursuant to paragraphs (b)(i) or (b)(iii) (with respect
to the Offer expiring without Sub having purchased any shares of Company Common
Stock pursuant to the Offer) described above under "- Termination" and (c)
within 12 months of such termination the Company enters into a letter of intent
or agreement for an Alternative Acquisition Proposal. Parent must pay the
Termination Fee to the Company if the Merger Agreement is terminated pursuant
to the paragraph (f) described above under "--Termination." If Parent or the
Company receives the Termination Fee, this fee will be the exclusive remedy for
any breach of the representations, warranties or covenants contained in the
Merger Agreement.
Indemnification; D&O Insurance. The Merger Agreement provides that all rights
to indemnification in favor of the current or former directors, officers or
employees of the Company and its Subsidiaries under their respective
organizational documents (or in any indemnification agreement to which it is a
party) for acts or omissions occurring prior to the Effective Time will survive
the Merger and continue for a period of not less than six years from the
Effective Time.
In addition, Parent will maintain for a period of six years from the
Effective Time the Company's current D&O Insurance policy to the extent that it
provides coverage for events occurring prior to the Effective Time, provided
the annual premium is not in excess of 200% of the last annual premium paid
prior to the date of the Merger Agreement (the "Maximum Premium"). Parent may,
however, satisfy its obligations by requesting that the Company extend coverage
under its D&O Insurance by obtaining a six-year "tail" policy on terms and
conditions no less advantageous than the existing D&O Insurance, provided the
cost of such coverage does not exceed three times the Maximum Premium. Finally,
Parent may satisfy its obligations under this provision if Parent's D&O
Insurance provides (or is amended to provide) substantially similar coverage
for events occurring
18
prior to the Effective Time for persons who are directors and officers of the
Company on the date of the Merger Agreement.
Going Private Transactions.
The Merger would have to comply with any applicable federal law operative at
the time of its consummation, including Rule 13e-3 under the Exchange Act that
applies to certain "going private" transactions. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
fairness of the Merger and the consideration offered to minority stockholders
in the Merger be filed with the SEC and disclosed to stockholders prior to the
consummation of the Merger. Sub does not believe that Rule 13e-3 will be
applicable to the Merger unless the Merger is consummated more than one year
after the termination of the Offer.
Nondisclosure Agreement.
The Company and Parent entered into the Nondisclosure Agreement on April 4,
2001 whereby the Company agreed to provide confidential information about the
Company to Parent exclusively for purposes of evaluating a potential
acquisition of the Company. For a term of five years from the date confidential
information is received, Parent has agreed not to, among other things, copy,
distribute, disclose or disseminate in any way or form any confidential
information received from the Company without the Company's prior written
consent. If Parent becomes legally compelled to disclose any confidential
information, Parent has agreed to notify the Company so that it may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of the Nondisclosure Agreement. For purposes of the Nondisclosure
Agreement, "confidential information" means all information disclosed, directly
or indirectly, through any means of communication or observation by the Company
to or for the benefit of Parent, that relates to or is derived from the
Company's technical, business, strategic, marketing or creative affairs, or to
any other matter Parent is advised or has reason to know is the confidential or
proprietary information of the Company.
Stock Option and Tender Agreements.
Parent has entered into Stock Option and Tender Agreements with the following
stockholders (or their authorized agents): Crystal Asset Management, LLC, Noah
Doyle, Primedia Inc., Experian Capital Corporation, Steve Markowitz and Nat
Goldhaber (collectively, the "Major Stockholders"). The following is a summary
of certain provisions of the Stock Option and Tender Agreements. This summary
does not purport to be complete and is qualified in its entirety by reference
to the complete text of the Stock Option and Tender Agreements, copies of which
are filed with the SEC as Exhibits (d)(3)-(8) to the Schedule TO and
incorporated herein by reference. Capitalized terms not otherwise defined below
shall have the meanings set forth in the Stock Option and Tender Agreements.
The Stock Option and Tender Agreements require each of the Major Stockholders
to tender their respective Shares to Parent as soon as practicable after
commencement of the Offer. In addition, the Major Stockholders have granted
Parent the Option to purchase all of their respective Shares for the higher of
the Offer Price in cash or such higher price per Share in cash as Parent or any
of its subsidiaries may offer to pay for Shares in the Offer (the "Option
Price"), beginning on the date that the Merger Agreement is terminated and
Parent is or may become entitled to the Termination Fee (an "Applicable
Termination"), and ending on the date (the "Expiration Date") that is ten
business days following such termination of the Merger Agreement, provided that
the closing of this purchase must in any event follow the receipt by Parent of
any of the governmental consents or the expiration of any waiting periods which
would otherwise prevent the consummation of the Merger. If Parent exercises the
Option, but does not acquire a number of Shares representing at least the
Minimum Tender Condition within twelve months after such exercise, and within
such twelve-month period Parent sells the Shares acquired upon exercise of the
Option pursuant to a merger, liquidation, reorganization or business
combination involving the Company, then upon consummation of such disposition,
Parent will pay to the Major Stockholders in cash the amount, if any, by which
the consideration per Share received by Parent in the disposition exceeds the
Option Price, multiplied by the number of Shares sold in the disposition.
19
The Major Stockholders have also agreed to vote all of their respective
Shares in favor of approval of the Merger Agreement and the Merger and against
any alternative acquisition. In addition, the Major Stockholders have granted
Parent an irrevocable proxy to vote all of their respective Shares in favor of
approval of the Merger Agreement and the Merger and against any alternative
acquisition.
The Stock Option and Tender Agreements may be terminated at any time (1) by
mutual written consent of the parties, (2) by either party on or after a
termination of the Merger Agreement other than pursuant to an Applicable
Termination or (3) by either party on or after the Expiration Date.
Redemption Agreement.
The Company also entered into a Redemption Agreement with United, an
affiliate of Parent, pursuant to which, subject to specific exceptions for the
Company's existing business, the Company granted United the exclusive right to
provide air travel certificates to the Company during the term of the
Redemption Agreement. The Redemption Agreement has a two year term and can only
be terminated by United upon 90 days prior written notice to the Company. The
Company cannot terminate the Redemption Agreement.
12. Purpose of the Offer; Plans for the Company.
Purpose of the Offer. The purpose of the Offer is to acquire control of, and
the entire common stock equity interest in, the Company. The purpose of the
Merger is to acquire all outstanding Shares not tendered and purchased pursuant
to the Offer. If the Offer is successful, Sub intends to consummate the Merger
as soon as practicable following the satisfaction or waiver of each of the
conditions to the Merger set forth in the Merger Agreement.
Plans for the Company. If at least enough Shares equal to the Minimum Tender
Condition are purchased pursuant to the Offer, Parent will designate its
representatives to be a majority of the Company Board. It is also expected
that, initially following the Merger, the business operations of the Company
will be continued by the surviving corporation substantially as they are
currently being conducted. The directors of Sub will be the initial directors
of the surviving corporation, and the officers of the Company will be the
initial officers of the surviving corporation. Upon completion of the Offer and
the Merger, Parent intends to conduct a review of the Company and its assets,
corporate structure, capitalization, operations, policies, management and
personnel. After such review, Parent will determine what actions or changes, if
any, would be desirable in light of the circumstances which then exist.
Except as described in this Offer to Purchase, neither UAL, Parent nor Sub
has any present plans or proposals that would relate to or result in: (i) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, (ii) a purchase,
sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Company Board or management, including,
but not limited to, any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Company Board or to change
any material term of the employment contract of any executive officer, (iv) any
material change in the Company's capitalization, indebtedness or dividend
policy, (v) any other material change in the Company's corporate structure or
business, (vi) a class of securities being delisted from a national securities
exchange or ceasing to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association, or (vii) a class of
equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act. See Sections 11
and 13 of this Offer to Purchase--"The Merger Agreement; Other Arrangements"
and "Certain Effects of the Offer," respectively.
13. Certain Effects of the Offer.
Market for the Shares of Company Common Stock. The purchase of Shares
pursuant to the Offer will reduce the number of holders of Shares and the
number of Shares that might otherwise trade publicly and could adversely affect
the liquidity and market value of the remaining Shares held by stockholders
other than Sub. Sub cannot predict whether the reduction in the number of
Shares that might otherwise trade publicly would have an
20
adverse or beneficial effect on the market price for, or marketability of, the
Shares or whether such reduction would cause future market prices to be greater
or less than the Offer Price.
Stock Quotation. Listing the Shares on the National Association of Securities
Dealers Automated Quotation System is voluntary, so the Company may terminate
such listing at any time. Neither Parent nor Sub has any intention to cause the
Company to terminate the inclusion of the Shares on the National Association of
Securities Dealers Automated Quotation System prior to the Merger. However,
depending upon the number of Shares purchased pursuant to the Offer, the Shares
may no longer meet the standards for continued inclusion on the National
Association of Securities Dealers Automated Quotation System. According to its
published guidelines, the National Association of Securities Dealers considers
delisting the Shares if, among other things, the number of publicly held
Shares, as the case may be, falls below 750,000 or the number of holders of
round lots of Shares falls below 400. Shares held by officers or directors of
the Company or their immediate families, or by any beneficial owner of more
than 10% of the Shares, ordinarily will not be considered as being publicly
held for this purpose. In the event the Shares are no longer eligible for
listing on the National Association of Securities Dealers Automated Quotation
System, quotations might still be available from other sources. The extent of
the public market for the Shares and the availability of such quotations would,
however, depend upon the number of holders of such shares at such time, the
interest in maintaining a market in such shares on the part of securities
firms, the possible termination of registration of such shares under the
Exchange Act as described below and other factors. If, as a result of the
purchase of Shares pursuant to the Offer, the Shares no longer meet the
criteria for continued inclusion in the National Association of Securities
Dealers Automated Quotation System, the market for the Shares could be
adversely affected.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of the Shares pursuant to the Offer may result in
the Shares becoming eligible for deregistration under the Exchange Act. Such
registration of the Shares may be terminated upon application of the Company to
the SEC if the Shares are not listed on a national securities exchange and
there are fewer than 300 holders of record of the Shares. Termination of
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its stockholders and
to the SEC and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit recovery provisions
of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy
statement pursuant to Section 14(a) of the Exchange Act in connection with
stockholders' meetings and the related requirement of furnishing an annual
report to stockholders, and the requirements of Rule 13e-3 under the Exchange
Act with respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933 may be impaired or eliminated. If registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
be "margin securities" or be eligible for inclusion on the National Association
of Securities Dealers Automated Quotation System
Sub believes that the purchase of the Shares pursuant to the Offer may result
in the Shares becoming eligible for deregistration under the Exchange Act and
it would be the intention of Sub to cause the Company to make an application
for termination of registration of the Shares as soon as possible after
successful completion of the Merger, if the Shares are then eligible for such
termination.
Margin Regulations. The Shares are currently "margin securities" under the
Regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon
factors similar to those described above regarding the market for the Shares
and stock quotations, it is possible that, following the Offer, the Shares
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
14. Dividends and Distributions.
The Merger Agreement provides that from the date of the Merger Agreement
until the Effective Time, unless Parent has consented in writing, the Company
may not declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock.
21
15. Certain Conditions of the Offer.
Notwithstanding any other term of the Offer or the Merger Agreement, Sub will
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares promptly
after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (i) there has been validly tendered and
not withdrawn prior to the expiration of the Offer that number of Shares which
would represent at least a majority of the Fully Diluted Shares (the "Minimum
Tender Condition") and (ii) the waiting period (and any extension thereof)
applicable to the purchase of Shares pursuant to the Offer under the HSR Act
has been terminated or has expired and any consents, approvals and filings
under any foreign antitrust law, the absence of which would prohibit the
purchase of all Shares tendered pursuant to the Offer, shall have been obtained
or made prior to the acceptance of Shares pursuant to the Offer. The term
"Fully Diluted Shares" means all outstanding securities entitled generally to
vote in the election of directors of the Company on a fully diluted basis,
after giving effect to the exercise, conversion or termination of all options,
warrants, rights and securities exercisable or convertible into such voting
securities. Furthermore, notwithstanding any other term of the Offer or the
Merger Agreement, Sub will not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment, and may
terminate or amend the Offer, with the consent of the Company or if, at any
time on or after the date of the Merger Agreement and before the acceptance of
such Shares for payment, any of the following conditions exists:
(a) there has been threatened in writing, instituted or pending any suit,
action or proceeding by any Governmental Entity (as defined in the Merger
Agreement) (i) challenging the acquisition by Parent or Sub of any Company
Common Stock, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or any other transactions contemplated by the
Merger Agreement, or seeking to obtain from the Company, Parent or Sub any
damages that are material in relation to the Company and its subsidiaries
taken as a whole, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
any material portion of the business or assets of the Company, Parent or
any of their respective subsidiaries, or to compel the Company, Parent or
any of their respective subsidiaries to dispose of or hold separate any
material portion of the business or assets of the Company, Parent or any of
their respective subsidiaries, as a result of the Offer, the Merger or any
of the other transactions contemplated by the Merger Agreement, (iii)
seeking to impose limitations on the ability of Parent or Sub to acquire or
hold, or exercise full rights of ownership of, any Shares, including the
right to vote the Shares purchased by it on all matters properly presented
to the stockholders of the Company, (iv) seeking to prohibit Parent or any
of its subsidiaries from effectively controlling in any material respect
the business or operations of the Company and the subsidiaries of the
Company, or (v) which otherwise is reasonably likely to have a Parent
Material Adverse Effect or a Company Material Adverse Effect (both as
defined in the Merger Agreement);
(b) any statute, rule, regulation, legislation, interpretation, judgment,
order or injunction is threatened, proposed, enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed applicable to, or
any consent or approval withheld with respect to the Offer, the Merger or
any of the other transactions contemplated by the Merger Agreement, by any
Governmental Entity that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in paragraph (a) above;
(c) except as disclosed in all Company SEC Documents that were filed and
publicly available prior to the date of the Merger Agreement (the "Filed
Company SEC Documents") or the letter, dated as of the date of the Merger
Agreement, delivered by the Company to Parent and Sub (the "Company
Disclosure Letter"), since the date of the most recent audited financial
statements included in the Filed Company SEC Documents there has occurred
any event, change, effect or development that, individually or in the
aggregate, has had or could reasonably be expected to have, a Company
Material Adverse Effect;
(d) the Company Board or any committee thereof has withdrawn or modified
in a manner adverse to Parent its approval or recommendation of the Offer
and the Merger Agreement or the Company Board or any committee thereof has
resolved to take any of the foregoing actions;
(e) the representations and warranties of Company contained in the Merger
Agreement will not have been true and correct in all respects as of the
date of the Merger Agreement and on and as of the date of the
22
expiration of the Offer with the same force and effect as if made on or as
of such date (except for those representations and warranties that address
matters only as of a particular date, which representations and warranties
will have been true and correct as of such particular date), except (A) for
such failures to be true and correct as would not, individually or in the
aggregate, have or could reasonably be expected to have a Company Material
Adverse Effect; provided, however, that such Company Material Adverse
Effect qualifier will be inapplicable with respect to the representations
and warranties contained in Sections 4.03, 4.04, 4.05(i), 4.06, 4.14, 4.15,
4.16 and 4.25 of the Merger Agreement, each of which individually shall
have been true and correct in all material respects as of the date of the
Merger Agreement and will be true and correct in all material respects on
and as of the date of the expiration of the Offer and (B) for changes
contemplated by, Merger Agreement (it being understood that, for purposes
of determining the accuracy of such representations and warranties, (x) all
"Company Material Adverse Effect" and materiality qualifications and other
qualifications based on the word "material" or similar phrases contained in
such representations and warranties will be disregarded, and (y) any update
of or modification to the Company Disclosure Letter made or purported to
have been made after the date of the Merger Agreement will be disregarded);
(f) the Company has failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(g) the Merger Agreement has been terminated in accordance with its
terms;
(h) any of the Stock Option and Tender Agreements are not in full force
and effect or any of the Major Stockholders shall have failed to perform in
any material respect any obligation or to comply in any material respect
with any agreement or covenant to be performed or complied with by them
under any such agreement; or
(i) the Rights Plan Amendment (as defined in the Merger Agreement) is not
in full force and effect;
which, in the reasonable judgment of Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition (including
any action or inaction by Parent or any of its affiliates) makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent and may
be asserted by Sub or Parent regardless of the circumstances giving rise to
such condition or may be waived by Sub and Parent in their sole discretion in
whole or in part at any time and from time to time prior to the expiration of
the Offer. The failure by Parent, Sub or any other affiliate of Parent at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
such right, the waiver of any such right with respect to particular facts and
circumstances will not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time prior to the expiration of the
Offer.
16. Certain Legal Matters; Regulatory Approvals.
General. Sub is not aware of any material pending legal proceeding relating
to the Offer. Based on its examination of publicly available information filed
by the Company with the SEC and other publicly available information concerning
the Company, Sub is not aware of any governmental license or regulatory permit
that is material to the Company's business that might be adversely affected by
Sub's purchase of the Shares as contemplated herein or, except as set forth
below, of any approval or other action by any government or governmental
administrative or regulatory authority or agency, domestic or foreign, that
would be required for the purchase or ownership of Shares by Sub or Parent as
contemplated in the Offer. Should any such approval or other action be
required, Sub currently contemplates that, except as described below under
"State Takeover Statutes," such approval or other action will be sought. There
can be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that if such
approval were not obtained or such other action were not taken, adverse
consequences might not result to the Company's business, or certain parts of
the Company's business might not have to be disposed of, any of which
23
could cause Sub to elect to terminate the Offer without the purchase of Shares
under certain conditions. See Section 15 of this Offer to Purchase--"Certain
Conditions of the Offer."
State Takeover Statutes. A number of states (including Delaware, where the
Company is incorporated), have adopted laws which purport, to varying degrees,
to apply to attempts to acquire corporations that are incorporated in, or which
have substantial assets, stockholders, principal executive offices or principal
places of business or whose business operations otherwise have substantial
economic effects in, such states. Except as described herein, Sub does not know
whether any of these laws will, by their terms, apply to the Offer or the
Merger or any other business combination between Sub or any of its affiliates
and the Company. To the extent that certain provisions of these laws purport to
apply to the Offer or the Merger or other business combination, Sub believes
that there are reasonable bases for contesting such laws. In 1982, in Edgar v.
MITE Corp., the Supreme Court of the United States invalidated on
constitutional grounds the Illinois Business Takeover Statute which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of
America, the Supreme Court held that the State of Indiana could, as a matter of
corporate law, constitutionally disqualify a potential acquiror from voting
shares of a target corporation without the prior approval of the remaining
stockholders where, among other things, the corporation is incorporated in, and
has a substantial number of stockholders in, the state. Subsequently, in TLX
Acquisition Corp. v. Telex Corp., a Federal District Court in Oklahoma ruled
that the Oklahoma statutes were unconstitutional insofar as they apply to
corporations incorporated outside Oklahoma in that they would subject such
corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v.
McReynolds, a Federal District Court in Tennessee ruled that four Tennessee
takeover statutes were unconstitutional as applied to corporations incorporated
outside Tennessee. This decision was affirmed by the United States Court of
Appeals for the Sixth Circuit.
Section 203 of the DGCL ("Section 203"), in general, prevents an "interested
stockholder" (including a person who owns or has the right to acquire 15% or
more of the corporation's outstanding voting stock) from engaging in a
"business combination" (defined to include mergers and certain other actions)
with a Delaware corporation for a period of three years following the date such
person became an interested stockholder. The Company Board has taken all
appropriate action so that neither Parent nor Sub is or will be considered an
"interested stockholder" pursuant to Section 203.
Neither Parent nor Sub has determined whether any other state takeover laws
or regulations will by their terms apply to the Offer or the Merger, and except
as set forth above, neither Sub nor Parent have attempted to comply with any
state takeover statutes in connection with the Offer or the Merger. Sub and
Parent reserve the right to challenge the validity or applicability of any
state law allegedly applicable to the Offer or the Merger, and nothing in this
Offer to Purchase nor any action taken by Parent or Sub in connection with the
Offer is intended as a waiver of that right. If it is asserted that one or more
state takeover statutes is applicable to the Offer or the Merger and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Merger, Sub might be required to file certain
information with, or to receive approvals from, the relevant state authorities
or holders of Shares, and Sub might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in continuing or
consummating the Offer or the Merger. In such case, Sub may not be obligated to
accept for payment or pay for any tendered Shares. See Section 15 of this Offer
to Purchase--"Certain Conditions of the Offer."
Antitrust in the United States
Under the HSR Act and the rules that have been promulgated thereunder by the
FTC, specified acquisition transactions may not be consummated unless specified
information has been furnished to the Antitrust Division and the FTC and
applicable waiting period requirements have been satisfied. The purchase of
Shares pursuant to the Offer is subject to these requirements.
Pursuant to the requirements of the HSR Act, Sub filed a Notification and
Report Form with respect to the Offer and Merger with the Antitrust Division
and the FTC on June 11, 2001. The waiting period applicable to the purchase of
Shares pursuant to the Offer is scheduled to expire at 11:59 p.m., New York
City time, fifteen
24
days after this filing. However, prior to that time, the Antitrust Division or
the FTC may extend the waiting period by requesting additional information or
documentary material relevant to the Offer from Sub. If such a request is made,
the waiting period will be extended until 11:59 p.m., New York City time, on
the tenth day after substantial compliance by Sub with such request.
Thereafter, the waiting period can be extended only by court order.
Any extension of the waiting period will not give rise to any withdrawal
rights not otherwise provided for by applicable law. See Section 4 of this
Offer to Purchase--"Withdrawal Rights." If Sub's purchase of Shares is delayed
pursuant to a request by the Antitrust Division or the FTC for additional
information or documentary material pursuant to the HSR Act, the Offer will be
extended in certain circumstances. See Section 15 of this Offer to Purchase--
"Certain Conditions of the Offer."
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the purchase of Shares by Sub pursuant
to the Offer. At any time before or after the consummation of any such
transactions, the Antitrust Division or the FTC could take such action under
the antitrust laws of the United States as it deems necessary or desirable in
the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or seeking divestiture of the Shares so acquired or
divestiture of substantial assets of Parent or the Company. Private parties
(including individual states) may also bring legal actions under the antitrust
laws of the United States. Sub does not believe that the consummation of the
Offer will result in a violation of any applicable antitrust laws. However,
there can be no assurance that a challenge to the Offer on antitrust grounds
will not be made, or if such a challenge is made, what the result will be. See
Section 15 of this Offer to Purchase--"Certain Conditions of the Offer,"
including conditions with respect to litigation and certain governmental
actions and Section 11 of this Offer to Purchase--"The Merger Agreement; Other
Arrangements" for certain termination rights.
Foreign Regulatory Matters.
Completion of the transaction also may require certain approvals by foreign
regulatory authorities. The parties conduct business in a number of foreign
countries. Under the laws of certain foreign nations and multinational
authorities, the transaction may not be completed unless certain filings are
made with these nations' antitrust regulatory authorities or multinational
antitrust authorities and these antitrust authorities approve or clear closing
of the transaction. Other foreign nations and multinational authorities have
voluntary and/or post-merger notification systems. Should any such approval or
action be required, the parties currently contemplate that this approval or
action would be sought.
Although the parties believe that they will obtain all material required
regulatory approvals in a timely manner, it is not certain that all these
approvals will be received in a timely manner or at all or that foreign or
multinational antitrust authorities will not impose unfavorable conditions for
granting the required approvals.
17. Appraisal Rights.
No appraisal rights are available in connection with the Offer.
If Sub acquires at least 90% of the Shares pursuant to the Offer, the Merger
may be consummated without a stockholders' meeting and without the approval of
the Company's stockholders.
Holders of Shares at the Effective Time who do not wish to accept the Merger
Consideration pursuant to the Merger will have the right to seek an appraisal
and to be paid the "fair value" of their Shares at the Effective Time
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) judicially determined and paid to it in cash
provided that such holder complies with the provisions of such Section 262 of
the DGCL.
The following is a brief summary of the statutory procedures to be followed
in order to dissent from the Merger and perfect appraisal rights under Delaware
law. This summary is not intended to be complete and is qualified in its
entirety by reference to Section 262, the text of which is set forth in
Schedule II hereto. Any stockholder considering demanding appraisal is advised
to consult legal counsel. Dissenters' rights, if any, will not be available
unless and until the Merger (or a similar business combination) is consummated.
25
Stockholders of record who desire to exercise their appraisal rights must
fully satisfy all of the following conditions. A written demand for appraisal
of Shares must be delivered to the Secretary of the Company (x) before the
taking of the vote on the approval and adoption of the Merger Agreement if the
Merger is not being effected without a vote of stockholders pursuant to Section
253 of the DGCL (a "short-form merger"), but rather is being consummated
following approval thereof at a meeting of the Company's stockholders (a "long-
form merger") or (y) within twenty days after the date that the Surviving
Corporation mails to the stockholders a notice (the "Notice of Merger") to the
effect that the Merger is effective and that appraisal rights are available
(and includes in such notice a copy of Section 262 and any other information
required thereby) if the Merger is being effected as a short-form merger
without a vote or meeting of the Company's stockholders. If the Merger is
effected as a long-form merger, this written demand for appraisal must be in
addition to and separate from any proxy or vote abstaining from or against the
approval and adoption of the Merger Agreement, and neither voting against,
abstaining from voting, nor failing to vote on the Merger Agreement will
constitute a demand for appraisal within the meaning of Section 262. In the
case of a long-form merger, any stockholder seeking appraisal rights must hold
the Shares for which appraisal is sought on the date the demand is made and,
continuously hold such Shares through the Effective Time, and otherwise comply
with the provisions of Section 262.
In the case of both a short-form merger and a long-form merger, a demand for
appraisal must be executed by or for the stockholder of record, fully and
correctly, as such stockholder's name appears on the stock certificates. If
Shares are owned of record in a fiduciary capacity, such as by a trustee,
guardian or custodian, such demand must be executed by the fiduciary. If Shares
are owned of record by more than one person, as in a joint tenancy or tenancy
in common, such demand must be executed by all joint owners. An authorized
agent, including an agent for two or more joint owners, may execute the demand
for appraisal for a stockholder of record; however, the agent must identify the
record owner and expressly disclose the fact that, in exercising the demand, he
is acting as agent for the record owner.
A record owner, such as a broker, who holds Shares as a nominee for others,
may exercise appraisal rights with respect to the Shares held for all or less
than all beneficial owners of Shares as to which the holder is the record
owner. In such case the written demand must set forth the number of Shares
covered by such demand. Where the number of Shares is not expressly stated, the
demand will be presumed to cover all Shares outstanding in the name of such
record owner. Beneficial owners who are not record owners and who intend to
exercise appraisal rights should instruct the record owner to comply strictly
with the statutory requirements with respect to the exercise of appraisal
rights before the date of any meeting of stockholders of the Company called to
approve the Merger in the case of a long-form merger and within twenty days
following the mailing of the Notice of Merger in the case of a short-form
merger.
Stockholders who elect to exercise appraisal rights must mail or deliver
their written demands to: General Counsel, MyPoints.com, Inc., 1375 East
Woodfield Road, Suite 300, Schaumburg, IL 60173. The written demand for
appraisal should specify the stockholder's name and mailing address, the number
of Shares covered by the demand and that the stockholder is thereby demanding
appraisal of such shares. In the case of a long-form merger, the Company must,
within ten days after the Effective Time, provide notice of the Effective Time
to all stockholders who have complied with Section 262 and have not voted for
approval and adoption of the Merger Agreement.
In the case of a long-form merger, stockholders electing to exercise their
appraisal rights under Section 262 must not vote for the approval and adoption
of the Merger Agreement or consent thereto in writing. Voting in favor of the
approval and adoption of the Merger Agreement, or delivering a proxy in
connection with the stockholders meeting called to approve the Merger Agreement
(unless the proxy votes against, or expressly abstains from the vote on, the
approval and adoption of the Merger Agreement), will constitute a waiver of the
stockholder's right of appraisal and will nullify any written demand for
appraisal submitted by the stockholder.
Regardless of whether the Merger is effected as a long-form merger or a
short-form merger, within 120 days after the Effective Time, either the Company
or any stockholder who has complied with the required conditions of Section 262
and who is otherwise entitled to appraisal rights may file a petition in the
Delaware Court of Chancery demanding a determination of the fair value of the
shares of the dissenting stockholders. If a
26
petition for an appraisal is timely filed, after a hearing on such petition,
the Delaware Court of Chancery will determine which stockholders are entitled
to appraisal rights and thereafter will appraise the Shares owned by such
stockholders, determining the fair value of such Shares exclusive of any
element of value arising from the accomplishment or expectation of the Merger,
together with a fair rate of interest to be paid, if any, upon the amount
determined to be the fair value. In determining fair value, the Delaware Court
of Chancery is to take into account all relevant factors. In Weinberger v. UOP,
Inc., et al., the Delaware Supreme Court discussed the factors that could be
considered in determining fair value in an appraisal proceeding, stating that
"proof of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court" should
be considered and that "[f]air price obviously requires consideration of all
relevant factors involving the value of a company." The Delaware Supreme Court
stated that in making this determination of fair value the court must consider
"market value, asset value, dividends, earnings prospects, the nature of the
enterprise and any other facts which were known or which could be ascertained
as of the date of merger which throw any light on future prospects of the
merged corporation ...." The Delaware Supreme Court has construed Section 262 to
mean that "elements of future value, including the nature of the enterprise,
which are known or susceptible of proof as of the date of the merger and not
the product of speculation, may be considered." However, the court noted that
Section 262 provides that fair value is to be determined "exclusive of any
element of value arising from the accomplishment or expectation of the merger."
Stockholders who in the future consider seeking appraisal should have in mind
that the fair value of their Shares determined under Section 262 could be more
than, the same as, or less than the Merger Consideration if they do seek
appraisal of their Shares, and that opinions of investment banking firms as to
fairness from a financial point of view are not necessarily opinions as to fair
value under Section 262. Moreover, Parent intends to cause the Surviving
Corporation to argue in any appraisal proceeding that, for purposes thereof,
the "fair value" of the Shares is less than that paid in the Offer. The cost of
the appraisal proceeding may be determined by the Delaware Court of Chancery
and taxed upon the parties as the Delaware Court of Chancery deems equitable in
the circumstances. Upon application of a dissenting stockholder, the Delaware
Court of Chancery may order that all or a portion of the expenses incurred by
any dissenting stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys' fees and the fees and
expenses of experts, be charged pro rata against the value of all Shares
entitled to appraisal. In the absence of such a determination or assessment,
each party bears its own expenses.
Any stockholder who has duly demanded appraisal in compliance with Section
262 will not, after the Effective Time, be entitled to vote for any purpose the
Shares subject to such demand or to receive payment of dividends or other
distributions on such Shares, except for dividends or other distributions
payable to stockholders of record at a date prior to the Effective Time.
At any time within 60 days after the Effective Time, any former holder of
Shares shall have the right to withdraw his or her demand for appraisal and to
accept the Merger Consideration. After this period, such holder may withdraw
his or her demand for appraisal only with the consent of the Company as the
Surviving Corporation. If no petition for appraisal is filed with the Delaware
Court of Chancery within 120 days after the Effective Time, stockholders'
rights to appraisal shall cease and all stockholders shall be entitled to
receive the Merger Consideration. Inasmuch as the Company has no obligation to
file such a petition, and Parent has no present intention to cause or permit
the Surviving Corporation to do so, any stockholder who desires such a petition
to be filed is advised to file it on a timely basis. However, no petition
timely filed in the Delaware Court of Chancery demanding appraisal shall be
dismissed as to any stockholder without the approval of the Delaware Court of
Chancery, and such approval may be conditioned upon such terms as the Delaware
Court of Chancery deems just.
Failure to take any required step in connection with the exercise of
appraisal rights may result in the termination or waiver of such rights.
APPRAISAL RIGHTS CANNOT BE EXERCISED AT THIS TIME. THE INFORMATION SET FORTH
ABOVE IS FOR INFORMATIONAL PURPOSES ONLY WITH RESPECT TO ALTERNATIVES AVAILABLE
TO STOCKHOLDERS IF THE MERGER IS CONSUMMATED. STOCKHOLDERS WHO WILL BE
27
ENTITLED TO APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER WILL RECEIVE
ADDITIONAL INFORMATION CONCERNING APPRAISAL RIGHTS AND THE PROCEDURES TO BE
FOLLOWED IN CONNECTION THEREWITH BEFORE SUCH STOCKHOLDERS HAVE TO TAKE ANY
ACTION RELATING THERETO.
STOCKHOLDERS WHO SELL SHARES IN THE OFFER WILL NOT BE ENTITLED TO EXERCISE
APPRAISAL RIGHTS WITH RESPECT THERETO BUT, RATHER, WILL RECEIVE THE PRICE PAID
IN THE OFFER THEREFOR.
The foregoing summary of the rights of objecting stockholders under the DGCL
does not purport to be a complete statement of the procedures to be followed by
stockholders of the Company desiring to exercise any available dissenters'
rights. The foregoing summary is qualified in its entirety by reference to
Section 262. The preservation and exercise of dissenters' rights require strict
adherence to the applicable provisions of the DGCL.
18. Fees and Expenses.
Parent and Sub have retained Georgeson Shareholder Communications Inc. to be
the Information Agent and Computershare Trust Company of New York to be the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominees to forward
materials relating to the Offer to beneficial owners of Shares. The Information
Agent and the Depositary each will receive reasonable and customary
compensation for their respective services in connection with the Offer, will
be reimbursed for reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under federal securities laws. Neither Parent nor Sub will
pay any fees or commissions to any broker or dealer or to any other person
(other than to the Depositary and the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will, upon request, be reimbursed by Sub
for customary mailing and handling expenses incurred by them in forwarding
Offering materials to their customers.
19. Miscellaneous.
Neither Sub nor Parent is aware of any jurisdiction where the making of the
Offer is prohibited by any administrative or judicial action pursuant to any
valid state statute. If either Sub or Parent becomes aware of any valid state
statute prohibiting the making of the Offer or the acceptance of the Shares,
Parent and Sub will make a good faith effort to comply with that state statute.
If, after a good faith effort, Sub and Parent cannot comply with the state
statute, the Offer will not be made to, nor will tenders be accepted from or on
behalf of, the holders of Shares in that state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Sub by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR SUB NOT CONTAINED HEREIN IN THE OFFER
DOCUMENTS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED.
Sub has filed with the SEC a Tender Offer Statement on Schedule TO pursuant
to Rule 14d-3 of the General Rules and Regulations under the Exchange Act,
together with exhibits furnishing certain additional information with respect
to the Offer, and may file amendments thereto. In addition, the Company has
filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9,
together with exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting
forth the recommendations of the Company Board with respect to the Offer and
the reasons for such recommendations and furnishing certain additional related
information.
UNV Acquisition Corp.
June 13, 2001
28
SCHEDULE I:
DIRECTORS AND EXECUTIVE OFFICERS OF UAL, PARENT AND SUB
1. Directors and Executive Officers of UAL.
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for
the past five years of each director and executive officer of UAL. Unless
otherwise indicated, the business address of each such person is c/o UAL
Corporation at 1200 East Algonquin Road, Elk Grove Township, Illinois 60007
and each such person is a citizen of the United States.
Directors and Present Principal and Five-Year Employment History
Executive Officers
Rono J. Dutta Director and President. Rono J. Dutta, 49, has been
President of UAL and United since July 1999. Prior to
his current position, Mr. Dutta served as a Senior
Vice President-Planning of United from 1994-1999. Mr.
Dutta also serves as the Trustee of The Marisco
Investment Fund. Mr. Dutta has served as a director
of UAL since 1999.
James E. Goodwin Director, Chairman and Chief Executive Officer. James
E. Goodwin, 56, has been Chairman and Chief Executive
Officer of UAL and United since July 1999. Prior to
his current position, Mr. Goodwin served as President
and Chief Operating Officer of UAL and United from
September 1998 and from April 1995 until September
1998 he served as Senior Vice President--North
America of United. Mr. Goodwin has served as a
director of UAL since 1998.
W. James Farrell Director. W. James Farrell, 59, has been the Chairman
of Illinois Tool Works Inc. ("ITW"), a manufacturer
of engineered components, since 1996, and Chief
Executive Officer of ITW since 1995. The address of
ITW is 3600 West Lake Avenue, Glenview, Illinois
60025. Mr. Farrell is a director of Allstate
Insurance Company, The Quaker Oats Company, Sears,
Roebuck & Co. and the Federal Reserve Bank of
Chicago.
James J. O'Connor Director. James J. O'Connor, 64, was the Chairman and
Chief Executive Officer of Unicom Corporation, from
1994 until 1998 and Chairman and Chief Executive
Officer of its wholly owned subsidiary Commonwealth
Edison Company, a supplier of electricity, from 1980
until 1998. Mr. O'Connor is a director of Corning
Inc., Smurfit-Stone Container Corp. and Tribune Co.
Mr. O'Connor has served as a director of UAL since
1984.
Paul E. Tierney, Jr. Director. Paul E. Tierney, Jr., 58, has been the
General Partner of Darwin Capital Partners, an
investment management firm, since 1999 and the
Managing Member of Development Capital, LLC, an
investment management firm, since 1997. The address
of Darwin Capital Partners and Development Capital is
500 Park Avenue, Suite 510, New York, New York 10022.
Prior to his current positions, Mr. Tierney served as
a Managing Director of Gollust, Tierney and Oliver,
Inc., an investment banking company, from 1992 until
1996. Mr. Tierney is a director of Liz Claiborne,
Inc. Mr. Tierney has been a director of UAL since
1990.
John W. Creighton, Director. John W. Creighton, Jr., 68, served as Chief
Jr. Executive Officer and President of Weyerhaeuser
Company, a manufacturer of forest products, from 1988
until 1997 as Chief Executive Officer and from 1991
until 1997 as President. Mr. Creighton is the
Chairman of Unocal Corp. Mr. Creighton has been a
director of UAL since 1998.
29
Directors and Present Principal and Five-Year Employment History
Executive Officers
Richard D. McCormick Director. Richard D. McCormick, 60, has been Chairman
Emeritus since 1999 and served as Chairman from 1992
until 1999, of US West, Inc., a telecommunications
company. The address of US West, Inc. is 3200 Cherry
Creek South Drive, Suite 230, Denver, Colorado 80209.
Mr. McCormick is a Director of Wells Fargo & Co. and
United Technologies Corporation. Mr. McCormick has
been a director of UAL since 1994.
Hazel R. O'Leary Director. Hazel R. O'Leary, 64, has been President
and Chief Operating Officer of Blaylock & Partners,
an investment banking partnership, since 2000. The
address of Blaylock & Partners is 609 5th Avenue,
Suite 911, New York, NY 10017. Prior to her current
position, Ms. O'Leary served as President of O'Leary
Associates, an energy services and investment
strategy company, from 1997 until 2000 and Secretary
of the U.S. Department of Energy from 1993 until
1997. Ms. O'Leary is a director of The AES Corp. Ms.
O'Leary has been a Director of UAL since 1999.
John K. Van de Kamp Director. John K. Van de Kamp, 65, has been President
of Thoroughbred Owners of California, a trade
association, since 1996 and Of Counsel for Dewey
Ballantine, a law firm, since 1996. The address for
the Thoroughbred Owners of California is 2260 Jimmy
Durante Boulevard, Del Mar, California 92014 and the
address for Dewey Ballantine is 333 South Grand
Avenue, 26th Floor, Los Angeles, California 90071.
Mr. Van de Kamp has been a director of UAL since
1994.
Frederick C. Director. Frederick C. Dubinsky, 58, has been
Dubinsky Chairman of the ALPA-MEC, a labor union, since 2000
and a Captain for United since 1996. The address for
ALPA-MEC is 6400 Shafer Court, Suite 700, Rosemont,
Illinois 60018. Mr. Dubinsky has been a director of
UAL since 2000.
John F. Peterpaul Director. John F. Peterpaul, 65, served as General
Vice President of IAM, a labor union, from 1996 until
2001. The address for IAM is 9000 Machinists Place,
Upper Marlboro, Maryland 20772. Mr. Peterpaul has
been a director of UAL since 1994.
Deval L. Patrick Director. Deval L. Patrick, 44, has been Executive
Vice President and General Counsel of The Coca Cola
Company, Inc., a beverage company, since April 1,
2001. The address for the Coca Cola Company is 1
Coca-Cola Plaza, Atlanta, Georgia 30313. Prior to his
current position, Mr. Patrick served as Vice
President & General Counsel of Texaco, Inc., an
oil/energy company, from 1999 until March 31, 2001, a
Partner of Day, Berry & Howard, a law firm, from
1997-1999 and Assistant Attorney General, Civil
Rights Division, U.S. Department of Justice from 1994
until 1997. Mr. Patrick has been a director of UAL
since 1997.
Francesca M. Maher Senior Vice President, General Counsel and Secretary
of UAL and United. Francesca M. Maher, 43, has been
Senior Vice President, General Counsel and Secretary
of UAL and United since October 1998. Prior to her
current position, Ms. Maher served as Vice President,
General Counsel, and Secretary of UAL and United from
1997 until 1998 and prior to that position she served
as Vice President--Law and Corporate Secretary of UAL
and Vice President--Law, Deputy General Counsel and
Corporate Secretary of United.
30
Directors and Present Principal and Five-Year Employment History
Executive Officers
Andrew P. Studdert Executive Vice President and Chief Operating Officer
of UAL and United. Andrew P. Studdert, 44, has been
Executive Vice President and Chief Operating Officer
of UAL and of United since July 1999. Prior to his
current position, Mr. Studdert served as President
and Chief Operating Officer of UAL and United from
1998 until 1999, Senior Vice President--Fleet
Operations of United from 1997 until 1998 and Senior
Vice President--North America of United from 1995
until 1998.
Douglas A. Hacker Executive Vice President and Chief Financial Officer
of UAL and Executive Vice President--Finance &
Planning and Chief Financial Officer of United.
Douglas A. Hacker, 45, has been Executive Vice
President and Chief Financial Officer of UAL and
Executive Vice President--Finance & Planning and
Chief Financial Officer of United since July 1999.
Prior to his current position, Mr. Hacker served as
Senior Vice President and Chief Financial Officer for
UAL and United.
William P. Hobgood Senior Vice President--People of United and Senior
Vice President of UAL. William P. Hobgood, 62, has
been Senior Vice President--People of United since
March 1997 and Senior Vice President of UAL since
September 1999. Prior to his current position, Mr.
Hobgood was in private practice as an attorney
specializing in mediation and arbitration, including
labor-management issues.
Frederic F. Brace Senior Vice President Finance & Treasurer of United.
Frederic F. Brace, 43, has been Senior Vice
President--Finance & Treasurer of United since July
1999. Prior to his current position, Mr. Brace served
as Vice President--Finance from February 1998 to July
1999. Prior to that he served as Vice President--
Financial Analysis and Controller from March 1995 to
February 1998.
2. Directors and Executive Officers of Parent and Sub.
The following table sets forth the name and present principal occupation or
employment, and material occupations, positions, offices or employments for
the past five years of each director and executive officer of Parent and Sub.
Unless otherwise indicated below, each occupation set forth opposite each
person refers to employment with Parent. Unless otherwise indicated, the
business address of each such person is c/o United NewVentures, Inc. at 1200
East Algonquin Road, Elk Grove Township, Illinois 60007 and each such person
is a citizen of the United States.
Directors and
Executive Officers Present Principal and Five-Year Employment History
James E. Goodwin Director, Parent and Sub. James E. Goodwin, 56, has
been Chairman and Chief Executive Officer of UAL and
United since July 1999. Prior to his current
position, Mr. Goodwin served as President and Chief
Operating Officer of UAL and United from September
1998 and from April 1995 until September 1998 he
served as Senior Vice President--North America of
United. Mr. Goodwin has served as a director of UAL
since 1998.
Douglas A. Hacker Director and President of Parent and Sub. Douglas A.
Hacker, 45, has been Executive Vice President and
Chief Financial Officer of UAL and Executive Vice
President--Finance & Planning and Chief Financial
Officer of United since July 1999. Prior to his
current position, Mr. Hacker served as Senior Vice
President and Chief Financial Officer for UAL and
United.
31
Directors and
Executive Officers Present Principal and Five-Year Employment History
Francesca M. Maher Director and Vice President, General Counsel and
Secretary of Parent and Sub. Francesca M. Maher, 43,
has been Senior Vice President, General Counsel and
Secretary of UAL and United since October 1998. Prior
to her current position, Ms. Maher served as Vice
President, General Counsel, and Secretary of UAL and
United from 1997 until 1998 and prior to that
position she served as Vice President--Law and
Corporate Secretary of UAL and Vice President--Law,
Deputy General Counsel and Corporate Secretary of
United.
Richard J. Poulton Chief Financial Officer and Treasurer of Parent and
Sub. Richard J. Poulton, 36, has been Chief Financial
Officer and Treasurer of Parent and Sub since August
2000. Prior to his current position, Mr. Poulton
served as Vice President, Finance and Controller of
OurHouse, Inc., an internet company, from August 1999
to August 2000. He also served as Director, Financial
Planning of United from August 1998 to August 1999
and as Director, Financial Accounting from 1996 to
August 1998.
32
SCHEDULE II:
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
DELAWARE CODE ANNOTATED
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER, CONSOLIDATION OR CONVERSION
8 Del. C. (S) 262 (2000)
Section 262. Appraisal rights
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant
to (S) 228 of this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholder's shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to (S) 251 (other than a merger effected pursuant to (S)
251(g) of this title), (S) 252, (S) 254, (S) 257, (S) 258, (S) 263 or (S) 264
of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (S) 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to (S)(S)
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of
the merger or consolidation will be either listed on a national
securities exchange or designated as a national market system
security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more
than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this
paragraph; or
33
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S) 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsection (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the
merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to (S) 228 or
(S) 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in
34
accordance with this subsection. An affidavit of the secretary or assistant
secretary or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the absence of
fraud, be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied
with subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger
or consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the
merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholder's written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal
under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder
35
entitled to an appraisal. Any stockholder whose name appears on the list filed
by the surviving or resulting corporation pursuant to subsection (f) of this
section and who has submitted such stockholder's certificates of stock to the
Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder is not
entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of
the certificates representing such stock. The Court's decree may be enforced
as other decrees in the Court of Chancery may be enforced, whether such
surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
36
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, Share Certificates and
any other required documents should be sent by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
By Mail: By Hand or Overnight Delivery:
Computershare Trust Company of New York Computershare Trust Company of New York
Wall Street Station Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005
By Facsimile Transmission: Confirmation Receipt of Facsimile
(For Eligible Institutions Only) by Telephone Only:
(212) 701-7636 (212) 701-7624
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers as set forth below. Additional
copies of this Offer to Purchase, the Letter of Transmittal, or other related
tender offer materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
The Information Agent for the Offer is:
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
Pursuant to the Offer to Purchase
Dated June 13, 2001
of
UNV ACQUISITION CORP.
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, JULY 11, 2001, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Computershare Trust Company of New York
By Mail: By Hand or Overnight Delivery:
Computershare Trust Company of New York Computershare Trust Company of New York
Wall Street Station Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005
By Facsimile Transmission Confirm Receipt of Facsimile by
(for Eligible Institutions Only) Telephone Only:
(212) 701-7636 (212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS
SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED. YOU MUST SIGN THIS LETTER OF TRANSMITTAL
IN THE APPROPRIATE SPACE PROVIDED THEREFOR, WITH SIGNATURE GUARANTEE IF
REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. SEE
INSTRUCTION 9.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
Name(s) and address(es) of
registered holders(s)
(Please fill in, if blank,
exactly as name(s)
appear(s) Certificate(s) (attach additional list if
on Certificates(s) necessary). See Instruction 3.
- -----------------------------------------------------------------------
Total Number of
Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Total Number
of
Shares
- -------------------------------------------------------------------------------
* Need not be completed by stockholder delivering by book-entry transfer.
** Unless otherwise indicated it will be assumed that all shares evidenced
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
1
This Letter of Transmittal is to be completed by Stockholders. Certificates
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in the Offer to Purchase, as referred to below) is utilized, if
tenders of Shares (as defined below) are to be made by book-entry transfer
into the account of Computershare Trust Company of New York, as Depositary
(the "Depositary"), at the Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase. Stockholders who tender their shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders." Stockholders whose
Certificates are not immediately available or who cannot deliver their
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedure for book-entry transfer on a timely basis, must tender
their shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
SPECIAL TENDER INSTRUCTIONS
[_]CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-
ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: ________________________________________
Account Number: _______________________________________________________
Transaction Code Number: ______________________________________________
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING (please enclose a photocopy of such notice of guaranteed
delivery):
Name(s) of Registered Owner(s): _______________________________________
Window Ticket Number (if any): ________________________________________
Date of Execution of Notice of Guaranteed Delivery: ___________________
Name of Institution that Guaranteed Delivery: _________________________
Account Number: _______________________________________________________
Transaction Code Number: __________________________________________________
2
NOTE: SIGNATURES MUST BE PROVIDED ON PAGE 6
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to UNV Acquisition Corp., a Delaware
corporation ("Sub") and a wholly owned subsidiary of United NewVentures, Inc.,
a Delaware corporation, the above described shares of common stock, par value
$.001 per share of MyPoints.com, Inc., a Delaware corporation (the "Company"),
together with the associated preferred stock purchase rights issued pursuant
to the Preferred Stock Rights Agreement, dated as of December 13, 2000,
between the Company and Wells Fargo Shareholder Services, as rights agent (the
"Shares" and the certificates representing such shares, the "Certificates") of
the Company, at a price of $2.60 per Share, net to the seller in cash, less
any required withholding of taxes and without the payment of interest, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 13, 2001 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (the "Letter of Transmittal,"
which, together with the Offer to Purchase, as each may be amended or
supplemented from time to time, collectively constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Sub all right,
title and interest in and to all of the Shares that are being tendered hereby,
and irrevocably appoints the Depositary the true and lawful agent, attorney-
in-fact and proxy of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (a) deliver such Certificates
or transfer ownership of such Shares on the account books maintained by the
Book-Entry Transfer Facility, together, in either case, with appropriate
evidences of transfer, to the Depositary for the account of Sub, (b) present
such Shares for transfer on the books of the Company, and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms and subject to the conditions of the
Offer.
The undersigned irrevocably appoints designees of Sub as such undersigned's
agents, attorneys-in-fact and proxies, with full power of substitution, to the
full extent of the undersigned's rights with respect to the Shares tendered by
the undersigned and accepted for payment by Sub. All such powers of attorney
and proxies shall be considered irrevocable and coupled with an interest. Such
appointment will be effective when, and only to the extent that, Sub accepts
such Shares for payment. Upon such acceptance for payment, all prior powers of
attorney, proxies and consents given by the undersigned with respect to such
Shares will be revoked without further action, and no subsequent powers of
attorney and proxies may be given nor any subsequent written consents executed
(and, if given or executed, will not be deemed effective). The designees of
Sub will, with respect to the Shares for which such appointment is effective,
be empowered to exercise all voting and other rights of the undersigned as
they in their sole discretion may deem proper at any annual or special meeting
of Company stockholders or any adjournment or postponement thereof, by written
consent in lieu of any such meeting or otherwise. Sub reserves the right to
require that, in order for the Shares to be deemed validly tendered,
immediately upon Sub's acceptance of such Shares, Sub must be able to exercise
full voting rights with respect to such Shares, including, without limitation,
voting at any meeting of stockholders.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the
undersigned's Shares tendered hereby, and (b) when the Shares are accepted for
payment by Sub, Sub will acquire good, marketable and unencumbered title to
the Shares, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim and will
not have been transferred to Sub in violation of any contractual or other
restriction on the transfer thereof. The undersigned, upon request, will
execute and deliver any additional documents deemed by the Depositary or Sub
to be necessary or desirable to complete the sale, assignment and transfer of
the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
3
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date, and, unless theretofore accepted for payment by the Sub
pursuant to the Offer, may also be withdrawn at any time after August 12,
2001. See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the
undersigned and Sub upon the terms and subject to the conditions set forth in
the Offer, including the undersigned's representation that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or issue or return any
Certificate(s) not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares." Similarly,
unless otherwise indicated herein under "Special Delivery Instructions,"
please mail the check for the purchase price and/or any Certificate(s) not
tendered or not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please
issue the check for the purchase price and/or any Certificate(s) not tendered
or accepted for payment in the name of, and deliver such check and/or such
Certificates to, the person or persons so indicated. Unless otherwise
indicated herein under "Special Payment Instructions," please credit any
Shares tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility
designated above. The undersigned recognizes that Sub has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name(s) of the registered holder(s) thereof if Sub does not accept for payment
any of the Shares so tendered.
[_]CHECK HERE IF ANY CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN
LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, STOLEN OR DESTROYED CERTIFICATES:
* YOU MUST CONTACT THE TRANSFER AGENT TO HAVE ALL LOST, STOLEN OR DESTROYED
CERTIFICATES REPLACED IF YOU WANT TO TENDER SUCH SHARES. SEE INSTRUCTION
11 OF THE ATTACHED INSTRUCTIONS FOR CONTACT INFORMATION FOR THE TRANSFER
AGENT.
4
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if Certifi- To be completed ONLY if Certifi-
cate(s) not tendered and/or the cate(s) not tendered or not ac-
check for the purchase price of cepted for payment and/or the
shares accepted for payment are check for the purchase price of
to be issued in the name of some- Shares accepted for payment are
one other than the undersigned or to be issued in the name of some-
if Shares tendered by book-entry one other than the undersigned or
transfer that are not accepted to the undersigned at an address
for payment are to be returned by other than that shown above.
credit to an account maintained
at the Book-Entry Transfer Facil- Issue[_] Check
ity other than that designated [_] Certificate(s) to:
above.
Name: ____________________________
Issue[_] Check (Please Print)
[_] Certificate(s) to:
Address: _________________________
Name: ____________________________
(Please Print) __________________________________
Address: _________________________ __________________________________
(Include Zip Code)
__________________________________
__________________________________
__________________________________ (Tax Identification or Social
(Include Zip Code) Security No.)
(See Substitute Form W-9 Included
__________________________________ Herein)
(Tax Identification or Social
Security No.)
(See Substitute Form W-9 Included
Herein)
[_]Credit Shares tendered by
book-entry transfer that are
not accepted for payment to
Depositary to the account set
forth below:
__________________________________
__________________________________
(Depositary Account Number)
5
SIGN HERE
AND COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9
.............................................................
.............................................................
Signature(s) of Holder(s)
(See guarantee requirement below)
Dated: ................................................. 2001
(Must be signed by registered holder(s) exactly as name(s)
appear(s) on the Certificate(s). If signed by person(s) to
whom the Shares represented hereby have been assigned or
transferred as evidenced by endorsement or stock powers
transmitted herewith, the signatures must be guaranteed. If
signature is by an officer on behalf of a corporation or by
an executor, administrator, trustee, guardian, attorney,
agent or any other person acting in a fiduciary or
representative capacity, please provide the following
information. See Instructions 1, 2, 3 and 5.)
Name(s): ....................................................
.....................................................
(Please Print)
Capacity (full title): ......................................
Address: ....................................................
.....................................................
(Zip Code)
Area Code and Telephone Number: .............................
Tax Identification or
Social Security Number: .....................................
Guarantee of Signature(s) (See Instructions 1, 2 and 5)
Authorized Signature: .......................................
Name: .......................................................
(Please Print)
Capacity (full title): ......................................
Name of Firm: ...............................................
Address: ....................................................
.....................................................
(Zip Code)
Area Code and Telephone Number: .............................
Dated: ................................................. 2001
6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal if: (a) this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of the shares) tendered
herewith, unless such holder(s) has completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions," or
(b) such Shares are tendered for the account of a firm which is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of a recognized Medallion Program approved by the
Securities Transfer Association Inc., including the Securities Transfer Agents
Medallion Program ("STAMP"), the Stock Exchange Medallion Program ("SEMP") and
the New York Stock Exchange Medallion Signature Program ("MSP"), or any other
"eligible guarantor institution" (as defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934) (each of the foregoing, an "Eligible
Institution"'). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5
of this Letter of Transmittal.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
stockholders either if Certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the
Offer to Purchase. Certificates evidencing tendered Shares, or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares
into the Depositary's account at the Book-Entry Transfer Facility, as well as
this Letter of Transmittal (or a facsimile hereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein on or prior to the Expiration Date. Stockholders
whose Certificates are not immediately available or who cannot deliver their
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date or who cannot complete the procedure for delivery by book-
entry transfer on a timely basis may tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedure: (a) such tender must be made by or through an
Eligible Institution; (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by Sub, must be
received by the Depositary on or prior to the Expiration Date; and (c) the
Certificates (or a Book-Entry Confirmation) representing all tendered Shares
in proper form for transfer, in each case, together with this Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
delivery, an Agent's Message) and any other documents required by this Letter
of Transmittal, must be received by the Depositary within three National
Association of Securities Dealers Automated Quotation System trading days
after the date of execution of such Notice of Guaranteed Delivery. If
Certificates are forwarded separately in multiple deliveries to the
Depositary, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND
PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT
TENDERS WILL BE ACCEPTED AND NO FRACTIONAL SHARES WILL BE PURCHASED. ALL
TENDERING STOCKHOLDERS, BY EXECUTION OF THIS LETTER OF TRANSMITTAL (OR A
FACSIMILE HEREOF IF BY AN ELIGIBLE INSTITUTION), WAIVE ANY RIGHT TO RECEIVE
ANY NOTICE OF THE ACCEPTANCE OF THEIR SHARES FOR PAYMENT.
7
3. Inadequate Space. If the space provided herein is inadequate, the
Certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. Partial Tenders (Not Applicable to Stockholders Who Tender by Book-Entry
Transfer). If fewer than all the Shares evidenced by any Certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in
the box entitled "Number of Shares Tendered" in the "Description of Shares
Tendered." In such cases, new Certificates for the Shares that were evidenced
by your old Certificates, but were not tendered by you, will be sent to you,
unless otherwise provided in the appropriate box on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by Certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any of
the tendered Shares are registered in different names on several Certificates,
it will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of Certificates.
If this Letter of Transmittal or any Certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and proper evidence satisfactory
to Sub of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Certificates or
separate stock powers are required unless payment is to be made to, or
Certificates for Shares not tendered or not purchased are to be issued in the
name of, a person other than the registered holder(s). In such latter case,
signatures on such Certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Certificate(s) listed, the Certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the
Certificate(s). Signatures on such Certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Sub will pay any stock transfer taxes with respect to the transfer and sale of
Shares to it or its order pursuant to the Offer. If, however, payment is to be
made to, or if Certificates for Shares not tendered or accepted for payment
are to be registered in the name of, any person other than the registered
holder(s), or if tendered Certificates are registered in the name of any
person other than the person(s) signing this Letter of Transmittal, the amount
of any stock transfer taxes (whether imposed on the registered holder(s) or
such person) payable on account of the transfer to such person will be
deducted from the purchase price, unless satisfactory evidence of the payment
of such taxes or an exemption therefrom is submitted. Except as otherwise
provided in this Instruction 6, it will not be necessary for transfer tax
stamps to be affixed to the Certificate(s) listed in this Letter of
Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of, and/or Certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of
this Letter of Transmittal or if a check and/or such Certificates are to be
returned to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown in this Letter of
Transmittal, the appropriate boxes on this Letter of Transmittal must be
completed. A Book-Entry Stockholder may request that Shares not accepted for
payment be credited to such account maintained at the Book-Entry
8
Transfer Facility as such Book-Entry Stockholder may designate under "Special
Payment Instructions." If no such instructions are given, such shares not
accepted for payment will be returned by crediting the account at the Book-
Entry Transfer Facility designated above.
8. Waiver of Conditions. Subject to the terms and conditions of the
Agreement and Plan of Merger (as defined in the Offer to Purchase), the
conditions of the Offer may be waived by Sub in whole or in part at any time
and from time to time in its sole discretion prior to the expiration of the
Offer.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. federal income
tax law, a stockholder whose tendered Shares are accepted for payment pursuant
to the Offer may be subject to backup withholding at a rate of 31%. To prevent
backup withholding on any payment made to a stockholder pursuant to the Offer,
the stockholder is required to notify the Depositary of the stockholder's
current taxpayer identification number ("TIN") by completing the enclosed
Substitute Form W-9, certifying that the TIN provided on that form is correct
(or that such stockholder is awaiting a TIN), and that (i) the stockholder has
not been notified by the Internal Revenue Service that the stockholder is
subject to backup withholding as a result of failure to report all interest or
dividends or (ii) after being so notified, the Internal Revenue Service has
notified the stockholder that the stockholder is no longer subject to backup
withholding. If the Depositary is not provided with the correct TIN, such
stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such stockholder with respect to shares
pursuant to the Offer may be subject to backup withholding (see below).
Each stockholder is required to give the Depositary the TIN (e.g., Social
Security number or employer identification number) of the record holder of the
Shares. If the Shares are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional guidance on which number to report. A stockholder who does not
have a TIN may check the box in Part 3 of the Substitute Form W-9 if such
stockholder has applied for a number or intends to apply for a TIN in the near
future. If the box in Part 3 is checked, the stockholder must also complete
the "Certificate of Awaiting Taxpayer Identification Number" below in order to
avoid backup withholding. If the box is checked, payments made will be subject
to backup withholding unless the stockholder has furnished the Depositary with
his or her TIN by the time payment is made. A stockholder who checks the box
in Part 3 in lieu of furnishing such stockholder's TIN should furnish the
Depositary with such stockholder's TIN as soon as it is received.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding requirements.
To avoid possible erroneous backup withholding, a stockholder who is exempt
from backup withholding should complete the Substitute Form W-9 by providing
his or her correct TIN, signing and dating the form, and writing "exempt" on
the face of the form. A stockholder who is a foreign individual or a foreign
entity should submit to the Depositary a properly completed Form W-8BEN,
Certificate of Foreign Status of Beneficial Owner for United States Tax
Withholding (which the Depositary will provide upon request), instead of Form
W-9, signed under penalty of perjury, attesting to the stockholder's exempt
status. Stockholders are urged to consult their own tax advisors to determine
whether they are exempt from these backup withholding and reporting
requirements.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments to be made to the stockholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained by filing a tax
return with the Internal Revenue Service. The Depositary cannot refund amounts
withheld by reason of backup withholding.
10. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to the Information Agent at the address and
telephone numbers set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery also may be
obtained from the Information Agent or from brokers, dealers, commercial banks
or trust companies.
9
11. Lost, Stolen or Destroyed Certificates. If any Certificate has been
lost, stolen or destroyed, the stockholder should promptly notify the Transfer
Agent, Wells Fargo Shareowner Services at (651) 450-4045. The stockholder then
will be instructed as to the steps that must be taken in order to replace the
Certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed Certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers set forth below. Additional copies
of the Offer to Purchase, this Letter of Transmittal or other related tender
offer materials may be obtained from the Information Agent or from brokers,
dealers, commercial banks or trust companies.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO OF GEORGESON SHAREHOLDER]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
10
Part I--Taxpayer
Identification Number
(TIN).
----------------------
SUBSTITUTE Social security number
Form W-9 Enter your TIN in the OR
appropriate box. For
individuals, this is your
social security number
(SSN). However, if you are
a resident alien, sole
proprietor or disregarded
entity, see the
Instructions to Form W-9.
For other entities, it is
your employer
identification number
(EIN). If you do not have a
number, see Obtaining a
Number in the Guidelines.
Department of ----------------------
the Treasury Employer identification
Internal number
Revenue
Service
----------------------
For Payees Exempt From
Payer's Request for Backup
Taxpayer Withholding (See the
Identification Guidelines).
Number (TIN)
--------------------------------------------------------
(1) The number shown on this form is my correct
taxpayer identification number (or I am waiting
for a number to be issued to me);
Part II--Certification--Under penalties of perjury, I
certify that:
Note: If the account is in
more than one name, see the
chart on whose number to
enter.
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup
withholding as a result of a failure to report
all interests or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding; and
(3) I am a U.S. person (including resident alien).
--------------------------------------------------------
Certification Instructions--You must
cross out item 2 above if you have
been notified by the IRS that you are
currently subject to backup withhold-
ing because you have failed to report
all interest and dividends on your
tax return and you have not been no-
tified by the IRS that you are no
longer subject to backup withholding.
For real estate transactions, item 2
does not apply. For mortgage interest Part III
paid, acquisition or abandonment of Awaiting
secured property, cancellation of TIN [_]
debt, contributions to an individual
retirement arrangement (IRA), and
generally, payments other than inter-
est and dividends, you are not re-
quired to sign the Certification, but
you must provide your correct TIN.
(See the Guidelines.)
Sign Here
Signature: _____________ Date: ______
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS OF CASH MADE TO YOU. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE AWAITING FOR
TIN BOX ON SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all payments made to
me will be withheld until I provide a taxpayer identification number to the
Depositary and that, if I do not provide my taxpayer identification number
within 60 days, such retained amounts shall be remitted to the Internal
Revenue Service as backup withholding and 31% of all reportable payments
made to me thereafter will be withheld and remitted to the Internal Revenue
Service until I provide a taxpayer identification number.
Date: ____________________________
Signature: _______________________
11
NOTICE OF GUARANTEED DELIVERY
(Not to Be Used for Signature Guarantees)
for
TENDER OF SHARES OF COMMON STOCK
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
to
UNV ACQUISITION CORP.
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, par value $.001 per share of
MyPoints.com, Inc., a Delaware corporation (the "Company") together with the
associated preferred stock purchase rights issued pursuant to the Preferred
Stock Rights Agreement, dated as of December 13, 2000, between the Company and
Wells Fargo Shareholder Services, as rights agent ("Shares") (the
"Certificates") are not immediately available or time will not permit the
Certificates and all required documents to reach the Depositary (as defined in
the Offer to Purchase) on or prior to the Expiration Date (as defined in the
Offer to Purchase) or if the procedures for delivery by book-entry transfer,
as set forth in the Offer to Purchase, cannot be completed on a timely basis.
This Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary. See Section 3 of the Offer
to Purchase.
The Depositary for the Offer is:
Computershare Trust Company of New York
By Mail: By Hand or Overnight Delivery:
Computershare Trust Company of New York Computershare Trust Company of New York
Wall Street Station Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005
By Facsimile Transmission Confirm Receipt of Facsimile by
(for Eligible Institutions Only) Telephone Only:
(212) 701-7636 (212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
1
Ladies and Gentlemen:
The undersigned hereby tenders to UNV Acquisition Corp., a Delaware
corporation ("Sub") and a wholly owned subsidiary of United NewVentures, Inc.,
a Delaware corporation, in accordance with the terms and subject to the
conditions set forth in Sub's Offer to Purchase, dated June 13, 2001 (the
"Offer to Purchase"), and in the related Letter of Transmittal (the "Letter of
Transmittal," which, together with the Offer to Purchase, as each may be
amended or supplemented from time to time, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares
indicated below pursuant to the procedures for guaranteed delivery set forth
in Section 3 of the Offer to Purchase.
Certificate Nos. (If Available): __________________________________________
Number of Shares: _________________________________________________________
(Check if Shares will be tendered by book-entry transfer) [_]
Account Number: ___________________________________________________________
Dated: ______________________________________________________________, 2001
Name(s) of Record Holder(s): ______________________________________________
(Please type or print)
Address(es): ______________________________________________________________
Zip Code: _________________________________________________________________
Area Code and Tel. No(s): _________________________________________________
Signature(s): _____________________________________________________________
2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of a recognized Medallion
Program approved by the Securities Transfer Association Inc., including the
Securities Transfer Agents Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP") and the New York Stock Exchange Medallion Signature
Program ("MSP"), or any other "eligible guarantor institution" as defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934 ("Exchange Act"), (a)
represents that the above named person(s) "own(s)" the Shares tendered hereby
within the meaning of Rule 14e-4 promulgated under Exchange Act, (b)
represents that such tender of Shares complies with Rule 14e-4 under the
Exchange Act, and (c) guarantees to deliver to the Depositary either the
Certificates evidencing all tendered Shares, in proper form for transfer, or a
Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to
such Shares, in either case, together with the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery, and any other required
documents, all within three National Association of Securities Dealers
Automated Quotation System trading days after the date hereof.
The eligible guarantor institution that completes this form must communicate
the guarantee to the Depositary and must deliver the Letter of Transmittal and
Certificates to the Depositary within the time period indicated herein.
Failure to do so may result in financial loss to such eligible guarantor
institution.
Name of Firm: _________________________________________________________________
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
(Please Print or Type)
Title: ________________________________________________________________________
Address: ______________________________________________________________________
Zip Code: _____________________________________________________________________
Area Code and Telephone Number: _______________________________________________
Dated: , 2001
NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE. CERTIFICATES MUST BE SENT
WITH YOUR LETTER OF TRANSMITTAL.
3
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
by
UNV ACQUISITION CORP.
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, JULY 11, 2001, UNLESS THE OFFER IS EXTENDED.
June 13, 2001
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We are writing in connection with the tender offer commenced by UNV
Acquisition Corp., a Delaware corporation ("Sub") and a wholly owned
subsidiary of United NewVentures, Inc., a Delaware corporation, to purchase
all of the outstanding shares of common stock, par value $.001 per share of
MyPoints.com, Inc. (the "Company"), together with the associated preferred
stock purchase rights issued pursuant to the Preferred Stock Rights Agreement,
dated as of December 13, 2000, between the Company and Wells Fargo Shareholder
Services, as rights agent ("Shares") at a price of $2.60 per share, net to the
seller in cash, less any required withholding of taxes and without payment of
any interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated June 13, 2001 (an "Offer to Purchase") and in the
related Letter of Transmittal (which, together with the Offer to Purchase, as
each may be amended or supplemented from time to time, collectively constitute
the "Offer").
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer Shares
representing at least a majority of the total outstanding voting securities of
the Company on a fully-diluted basis after giving effect to the exercise,
conversion or termination of all options, warrants, rights and securities
exercisable or convertible into such voting securities and (2) the applicable
waiting period (and any extension thereof) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have terminated or
expired and any consents, approvals and filings under any foreign antitrust
law, the absence of which would prohibit the purchase of all Shares tendered
pursuant to the Offer, shall have been obtained or made prior to the
acceptance of Shares pursuant to the Offer. The Offer also is subject to
certain other terms and conditions.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee or who hold
Shares registered in their own names, we enclose the following documents:
1. Offer to Purchase, dated June 13, 2001.
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients who hold Shares. Facsimile copies of the Letter
of Transmittal may be used to tender Shares.
3. Letter to Clients, which may be sent to your clients for whose account
you hold Shares, registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer.
1
4. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates are not immediately available or time will not permit the
certificates and all required documents to reach the Depositary on or prior
to the Expiration Date (as defined in the Offer to Purchase) or if the
procedures for delivery by book-entry transfer, as set forth in the Offer
to Purchase, cannot be completed on a timely basis.
5. Letter to stockholders of the Company from John Fullmer, the Company's
Chief Executive Officer and Chairman of the Board of Directors accompanied
by the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
7. Return envelope addressed to Computershare Trust Company of New York.
In accordance with the terms and subject to the satisfaction or waiver
(where applicable) of the conditions to the Offer, Sub will accept for
payment, purchase and pay for, all Shares validly tendered and not properly
withdrawn pursuant to the Offer at the earliest time following expiration of
the Offer when all such conditions shall have been satisfied or waived (where
applicable). For purposes of the Offer, Sub will be deemed to have accepted
for payment (and thereby purchased), Shares validly tendered and not properly
withdrawn if, as and when Sub gives oral or written notice to the Depositary
of Sub's acceptance for payment of such Shares pursuant to the Offer. Upon the
terms and subject to the conditions of the Offer, payment for Shares accepted
for payment pursuant to the Offer will be made only after timely receipt by
the Depositary of (1) the certificates or a Book-Entry Confirmation (as
defined in the Offer to Purchase) of a book-entry transfer of such Shares into
the Depositary's account at the Book-Entry Transfer Facility (as defined in
the Offer to Purchase) pursuant to the procedures set forth in Section 3 of
the Offer to Purchase; (2) the Letter of Transmittal to tender Shares (or a
facsimile thereof) properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) in lieu of the Letter of
Transmittal; and (3) any other documents required under the Letter of
Transmittal.
Sub will not pay any commissions or fees to any broker, dealer or other
person (other than the Depositary and the Information Agent, as described in
the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. Sub will, however, upon request, reimburse you
for customary clerical and mailing expenses incurred by you in forwarding any
of the enclosed materials to your clients.
Sub will pay any stock transfer taxes with respect to the transfer and sale
of Shares to it or to its order pursuant to the Offer, except as otherwise
provided in Instruction 6 of the enclosed Letter of Transmittal.
Your prompt action is requested. We urge you to contact your clients as
promptly as possible. Please note that Offer and withdrawal rights expire at
12:00 midnight, New York City time, on Wednesday, July 11 2001, unless the
Offer is extended.
In order for a stockholder of the Company to take advantage of the Offer,
the Letter of Transmittal to tender Shares (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message in lieu of the
Letter of Transmittal) and any other documents required by such Letter of
Transmittal should be sent to the Depositary and certificates should be
delivered, or Shares should be tendered pursuant to the procedure for book-
entry transfer, all in accordance with the instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
Holders of Shares whose certificates are not immediately available or who
cannot deliver their certificates and all other required documents to the
Depositary on or prior to the Expiration Date of the Offer, or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis,
must tender their Shares according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase.
2
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent as set forth below. Requests for copies of the Offer to
Purchase, the Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent.
Very truly yours,
United NewVentures, Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY OTHER PERSON AS AN AGENT OF SUB, THE DEPOSITARY, THE
INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS
AND THE STATEMENTS CONTAINED THEREIN.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
3
Offer to Purchase for Cash
All Outstanding Shares Of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
by
UNV ACQUISITION CORP.
wholly owned subsidiary of
UNITED NEWVENTURES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY JULY 11, 2001, UNLESS THE OFFER IS EXTENDED.
June 13, 2001
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated June 13, 2001
(the "Offer to Purchase") and the related Letter of Transmittal (the "Letter
of Transmittal," which, together with the Offer to Purchase, as each may be
amended or supplemented from time to time, collectively constitute the
"Offer") relating to the tender offer by UNV Acquisition Corp., a Delaware
corporation ("Sub") and a wholly owned subsidiary of United NewVentures, Inc.,
a Delaware corporation ("Parent"), to purchase all of the outstanding shares
of common stock, par value $.001 per share of MyPoints.com, Inc. (the
"Company"), together with the associated preferred stock purchase rights
issued pursuant to the Preferred Stock Rights Agreement, dated as of December
13, 2000, between the Company and Wells Fargo Shareholder Services, as rights
agent ("Shares") at a price of $2.60 per Share (the "Offer Price"), net to the
seller in cash, less any required withholding of taxes and without the payment
of any interest, upon the terms and subject to the conditions set forth in the
Offer.
We are the holder of record of Shares held by us for your account. The
Letter of Transmittal is furnished to you for your information only and cannot
be used by you to tender Shares held by us for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us for your account, in
accordance with the terms and subject to the conditions set forth in the
Offer.
Your attention is directed to the following:
1. The Offer Price is $2.60 per Share, net to the seller in cash, without
interest and less any required withholding of taxes, upon the terms and
subject to the conditions set forth in the Offer.
2. The Offer is being made for all outstanding Shares of the Company.
3. The Offer is being made pursuant to the terms of an Agreement and Plan
of Merger, dated as of June 1, 2001, among Parent, the Company and Sub (the
"Merger Agreement"). The Merger Agreement provides, among other things, for
the making of the Offer by Sub. The Merger Agreement further provides
that Sub will be merged with and into the Company (the "Merger") following
the completion of the Offer and promptly after satisfaction or waiver of
certain conditions. The Company will continue as the surviving corporation
after the Merger and will become a wholly owned subsidiary of Parent.
4. The Board of Directors of the Company has by a unanimous vote of those
directors present (i) approved and declared advisable the Merger Agreement,
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement, (ii) determined that the Offer, the Merger and the other
transactions contemplated by the Merger Agreement are fair to, and in the
best interests of, the Company and the stockholders, (iii) recommended that
stockholders accept the Offer and tender their Shares pursuant to the
Offer, and (iv) recommended that the Company's stockholders approve and
adopt the Merger Agreement.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, July 11, 2001, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay any commissions or
fees to any broker, dealer or other person or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the transfer and sale of Shares to Sub or to its order pursuant
to the Offer.
7. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer
Shares representing a total of at least a majority of the total outstanding
voting securities of the Company on a fully-diluted basis after giving
effect to the exercise, conversion or termination of all options, warrants,
rights and securities exercisable or convertible into such voting
securities and (2) the applicable waiting period (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have terminated or expired and any consents, approvals and
filings under any foreign antitrust law, the absence of which would
prohibit the purchase of all Shares tendered pursuant to the Offer, shall
have been obtained or made prior to the acceptance of Shares pursuant to
the Offer. The Offer also is subject to certain other terms and conditions.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all your Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf on or prior to the expiration of
the Offer.
2
Instructions With Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
by
UNV ACQUISITION CORP.
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase, dated June 13, 2001, and the related Letter of Transmittal, in
connection with the offer by UNV Acquisition Corp., a Delaware corporation
("Sub") and a wholly owned subsidiary of United NewVentures, Inc., to purchase
all of the outstanding shares of common stock, par value $.001 per share of
MyPoints.com, Inc., a Delaware corporation (the "Company") together with the
associated preferred stock purchase rights issued pursuant to the Preferred
Stock Rights Agreement, dated as of December 13, 2000, between the Company and
Wells Fargo Shareholder Services, as rights agent ("Shares") at $2.60 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase and related Letter of
Transmittal.
This will instruct you to tender to Sub the number of Shares indicated below
(or, if no number is indicated below, all Shares) which are held by you for
the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
SIGN BELOW
_____________________________________
Signature(s)
Number of
Shares to
be Total Number of
Tendered: Shares*
_____________________________________
Please Print Name(s)
_____________________________________
Address
- --------------------- ------------
_____________________________________
* Unless otherwise indicated, it Account Number
will be assumed that all of
your Shares held by us for your
account are to be tendered.
_____________________________________
Area Code and Telephone Number
_____________________________________
Taxpayer Identification Numbers(s)
or Social Security Number(s)
_____________________________________
Dated: , 2001
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give to
Computershare Trust Company of New York. Social Security numbers have nine
digits separated by two hyphens: i.e., 000-00-0000. Employer identification
numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The
table below will help determine the number to give to Computershare Trust
Company of New York.
- ------------------------------------- -------------------------------------
Give the
SOCIAL SECURITY
For this type of account: number of--
- ------------------------------------------------
1. Individual The individual
2. Two or more individuals The actual owner
(joint account) (joint account) of
the account or, if
combined funds, the
first individual on
the account (1)
3. Custodian account of a The minor (2)
minor (Uniform Gift to
Minors Act)
4.a. The usual revocable The grantor-trustee
savings trust account (1)
(grantor is also
trustee)
b. So-called trust account The actual owner (1)
that is not a legal or
valid trust under state
law
5. Sole proprietorship The owner (4)
Give the
Employee
Identification
For this type of account: number of--
------
6. Sole proprietorship The owner (4)
7. A valid trust, estate The legal entity (4)
or pension trust
8. Corporate The corporation
9. Association, club, The organization
religious, charitable
or educational tax-
exempt organization
10. Partnership The partnership
11. A broker or registered The broker or
nominee nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district or prison)
that receives
agricultural program
payments
- ------------------------------------- -------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person has a social security number, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business
or "doing business as" name. You may use either your social security
number or employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated on the account title.)
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Obtaining a Number
If you don't have a TIN or you don't know your number, obtain Form SS-5,
Application for a Social Security Card, or Form SS-4, Application for Employer
Identification Number, at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
Payees Exempt From Backup Withholding
Payees specifically exempted from backup withholding include the following:
. An organization exempt from tax under section 501(a), any IRA, or a
custodial account under section 403(b)(7) if the account satisfies the
requirements of section 401(f)(2).
. The United States or any of its agencies or instrumentalities. A state,
the District of Columbia, a possession of the United States, or any of
their political subdivisions or instrumentalities.
. A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
. An international organization or any of its agencies or instrumentalities.
Other payees that may be exempt from backup withholding include:
. A corporation.
. A foreign central bank of issue.
. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
. A futures commission merchant registered with the Commodity Futures
Trading Commission.
. A real estate investment trust.
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A common trust fund operated by a bank under section 584(a).
. A financial institution.
. A middleman known in the investment community as a nominee or custodian.
. A trust exempt from tax under section 664 or described in section 4947.
Payments Exempt From Backup Withholding
Dividends and patronage dividends that generally are exempt from backup
withholding include:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 404(k) distributions made by an ESOP.
Interest payments that generally are exempt from backup withholding include:
. Payments of interest on obligations issued by individuals. Note: you may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided a correct TIN to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
.Payments made by certain foreign organizations.
. Mortgage or student loan interest paid to you.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TIN, WRITE
"EXEMPT" ON THE FACE OF THE FORM AND SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends not
subject to information reporting are also not subject to backup withholding.
For details, see the regulations under Internal Revenue Code sections 6041,
6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.
Privacy Act Notice.--Section 6109 of the Internal Revenue Code requires you to
give your correct TIN to persons who must file information returns with the
IRS to report, among other things, interest, dividends, and certain other
income paid to you, mortgage interest you paid, the acquisition or abandonment
of secured property, cancellation of debt, or contributions you made to an IRA
or MSA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. The IRS may also provide this
information to the Department of Justice for civil and criminal litigation,
and to cities, states and the District of Columbia to carry out their tax
laws.
You must provide your TIN whether or not you are required to file a tax
return. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not give a TIN to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish TIN.--If you fail to furnish your correct
TIN to a requester, you are subject to a penalty of $50 for each such failure
unless your failure is due to reasonable cause and not to willful neglect.
(2) Civil and Criminal Penalties for False Information.--If you make a false
statement with no reasonable basis that results in no backup withholding, you
are subject to a $500 penalty. Willfully falsifying certifications or
affirmations may also subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
June 13, 2001, and the related Letter of Transmittal (and any amendments or
supplements thereto) and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall
be deemed to be made on behalf of UNV Acquisition Corp. by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Together with Associated Preferred Stock Purchase Rights)
of
MYPOINTS.COM, INC.
at
$2.60 Net Per Share
by
UNV ACQUISITION CORP.,
a wholly owned subsidiary of
UNITED NEWVENTURES, INC.
UNV Acquisition Corp., a Delaware corporation ("Sub") and wholly owned
subsidiary of United NewVentures, Inc., a Delaware corporation ("Parent"), is
offering to purchase all of the outstanding shares, together with the
associated preferred stock purchase rights issued pursuant to the Preferred
Stock Rights Agreement, dated as of December 13, 2000, between the Company and
Wells Fargo Shareholders Services, as rights agent (the "Shares") of common
stock, par value $.001 per share, of MyPoints.com, Inc., a Delaware
corporation (the "Company"), at a purchase price of $2.60 per Share, net to
the seller in cash, without interest thereon. The Offer is being made by Sub
upon the terms and subject to the conditions set forth in the Offer to
Purchase dated June 13, 2001 and in the related Letter of Transmittal (which,
together with the Offer to Purchase and any amendments or supplements thereto,
collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON WEDNESDAY, JULY 11, 2001, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the expiration of the Offer Shares
representing at least a majority of the total outstanding voting securities of
the Company on a fully-diluted basis after giving effect to the exercise,
conversion or termination of all options, warrants, rights and securities
exercisable or convertible into such voting securities and (ii) the applicable
waiting period (and any extension thereof) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have terminated or
expired and any consents, approvals and filings under any foreign antitrust
law, the absence of which would prohibit the purchase of all Shares tendered
pursuant to the Offer, shall have been obtained or made prior to the
acceptance of the Shares pursuant to the Offer. The Offer also is subject to
certain other terms and conditions contained in the Offer to Purchase.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of June 1, 2001 (the "Merger Agreement"), among Parent, Sub and the
Company. The purpose of the Offer is for Sub to acquire control of, and the
entire equity interest in, the Company. The Merger Agreement provides that,
among other things, Sub will make the Offer and that, as promptly as
practicable after completion of the Offer and the satisfaction or waiver of
the other conditions set forth in the Merger Agreement and in accordance with
the
1
relevant provisions of the Delaware General Corporation Law ("Delaware law"),
Sub will be merged with and into the Company (the "Merger"), and the Company
will be the surviving corporation. At the effective time of the Merger (the
"Effective Time"), each outstanding Share (other than Shares owned by Parent,
Sub or any subsidiary or affiliate of Parent, Sub or the Company or held in
the treasury of the Company or by stockholders who have properly perfected
appraisal rights under Delaware law) will, by virtue of the Merger and without
any action by the holder thereof, be cancelled and converted into the right to
receive $2.60 per Share in cash, or any higher price per Share paid pursuant
to the Offer, without interest thereon.
The Board of Directors of the Company has by unanimous vote of those
directors present (i) approved and declared advisable the Merger Agreement,
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement, (ii) determined that the Offer, the Merger and the other
transactions contemplated by the Merger Agreement are fair to and in the best
interests of the stockholders, (iii) recommended that stockholders accept the
Offer and tender their Shares pursuant to the Offer, and (iv) recommended that
the Company's stockholders approve and adopt the Merger Agreement.
For purposes of the Offer, Sub will be deemed to have accepted for payment
(and thereby purchased) Shares tendered and not properly withdrawn as, if and
when Sub gives oral or written notice to Computershare Trust Company of New
York (the "Depositary") of Sub's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price for the Shares with the Depositary,
which will act as agent for tendering stockholders for the purposes of
receiving payments from Sub and transmitting payments to tendering
stockholders. Under no circumstances will Sub pay interest on the purchase
price for any Shares accepted for payment, regardless of any extension of the
Offer or any delay in making payment. In all cases, Sub will pay for Shares
purchased in the Offer only after timely receipt by the Depositary of (i) the
certificates representing the Shares (the "Share Certificates") or
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Depositary Trust Company ("DTC") pursuant to the procedures set
forth in the Offer to Purchase, (ii) the appropriate Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase) in lieu of the Letter of
Transmittal and (iii) any other documents required under the Letter of
Transmittal.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Wednesday, July 11, 2001, unless the Offer is extended, in which case the
"Expiration Date" will be the latest time and date the Offer, as extended,
expires. Subject to the limitations set forth in the Offer to Purchase, the
Merger Agreement and the applicable rules and regulations of the Securities
and Exchange Commission, Sub reserves the right, at any time and from time to
time in its sole discretion, to extend the period during which the Offer is
open by giving oral or written notice of such extension to the Depositary.
During any such extension, all Shares previously tendered and not properly
withdrawn will remain subject to the Offer, subject to the right, if any, of a
tendering stockholder to withdraw such stockholder's Shares. Any such
extension will be followed as promptly as practicable by public announcement,
which will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration of the Offer, in
accordance with the public announcement requirements of Rule 14e-1(d) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn (i) at any time prior to the Expiration Date and
(ii) at any time after August 12, 2001, unless accepted for payment by Sub
pursuant to the Offer prior to that date. However, pursuant to Rule 14d-7
under the Exchange Act, no withdrawal rights apply to Shares tendered during
any subsequent offering period and no withdrawal rights apply during a
subsequent offering period with respect to Shares tendered in the Offer and
accepted for payment. Sub reserves the right to allow a subsequent offering
period in compliance with the Merger Agreement and
Rule 14d-11 but has not determined whether it will do so at this time. If Sub
extends the Offer, is delayed in its acceptance for payment of Shares, or is
unable to accept Shares for payment pursuant to the Offer for any reason,
then, without prejudice to Sub's rights under the Offer, the Depositary may
nevertheless retain tendered Shares on behalf of Sub, and such Shares may not
be withdrawn, except to the extent that tendering stockholders are
2
entitled to and duly exercise their withdrawal rights as described in the
Offer to Purchase. Any such delay will be by an extension of the Offer to the
extent required by law.
If Sub does not purchase any tendered Shares pursuant to the Offer for any
reason, or if a holder of Shares submits Share Certificates representing more
Shares than are tendered, Share Certificates representing unpurchased or
untendered Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedure set forth in the Offer to Purchase, such Shares will be credited to
an account maintained at the Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover page of the Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and (if Share
Certificates have been tendered) the name of the registered holder of such
Shares, if different from that of the person who tendered such Shares. If
Share Certificates representing Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case
of Shares tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth
in the Offer to Purchase, the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn Shares, in
which case a notice of withdrawal will be effective if delivered to the
Depositary by any method of delivery described in the first sentence of this
paragraph.
In general, the receipt of cash by the holders of Shares pursuant to the
Offer and/or the Merger will constitute a taxable transaction for United
States federal income tax purposes. Because the tax consequences to a
particular holder may differ based on that holder's particular circumstances,
each holder should consult his or her own tax advisor regarding the tax
consequences of the Offer and the Merger.
The information required to be disclosed by Rule 14d-6(d)(1) of the General
Rules and Regulations under the Exchange Act is contained in the Offer to
Purchase and is incorporated herein by reference.
The Company has provided Sub with its stockholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials are being mailed to record holders of Shares whose names
appear on the stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names appear, or
whose nominees appear, on the stockholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is
made with respect to the Offer.
3
Questions and requests for assistance and requests for copies of the Offer
to Purchase and the related Letter of Transmittal and all other tender offer
materials may be directed to the Information Agent at the address and
telephone number set forth below and will be furnished promptly at Sub's
expense. Sub will not pay any fees or commissions to any broker or dealer or
any other person (other than the Information Agent) for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
June 13, 2001
4
EXECUTION COPY
--------------
AGREEMENT AND PLAN OF MERGER
Dated as of June 1, 2001
Among
UNITED NEWVENTURES, INC.
UNV ACQUISITION CORP.
and
MYPOINTS.COM, INC.
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................................................... 1
SECTION 1.01 Definitions............................................................................ 1
ARTICLE II THE OFFER AND THE MERGER.................................................................. 9
SECTION 2.01 The Offer.............................................................................. 9
SECTION 2.02 Company Actions........................................................................ 11
SECTION 2.03 Board of Directors; Section 14(f)...................................................... 12
SECTION 2.04 The Merger............................................................................. 12
SECTION 2.05 Closing................................................................................ 13
SECTION 2.06 Effective Time......................................................................... 13
SECTION 2.07 Certificate of Incorporation and By-laws............................................... 13
SECTION 2.08 Directors.............................................................................. 13
SECTION 2.09 Officers............................................................................... 13
ARTICLE III EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES.............................................................................. 14
SECTION 3.01 Effect on Capital Stock................................................................ 14
SECTION 3.02 Exchange of Certificates............................................................... 15
SECTION 3.03 Adjustments............................................................................ 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................. 17
SECTION 4.01 Organization, Standing and Power....................................................... 17
SECTION 4.02 Company Subsidiaries; Equity Interests................................................. 17
SECTION 4.03 Capital Structure...................................................................... 18
SECTION 4.04 Authorization; Validity of Agreement; Necessary Action................................. 19
SECTION 4.05 No Conflicts; Consents................................................................. 20
SECTION 4.06 SEC Documents; Financial Statements; Undisclosed Liabilities........................... 20
SECTION 4.07 Information Supplied................................................................... 21
SECTION 4.08 Absence of Certain Changes or Events................................................... 21
SECTION 4.09 Taxes.................................................................................. 22
SECTION 4.10 Benefit Plans; ERISA Compliance; Excess Parachute Payments............................. 23
SECTION 4.11 Litigation............................................................................. 24
SECTION 4.12 Compliance with Applicable Laws........................................................ 25
SECTION 4.13 Contracts; Debt Instruments............................................................ 25
i
SECTION 4.14 Company Rights Agreement............................................................. 26
SECTION 4.15 Intellectual Property................................................................ 27
SECTION 4.16 Takeover Laws........................................................................ 30
SECTION 4.17 Affiliate Transactions............................................................... 30
SECTION 4.18 Real Property........................................................................ 30
SECTION 4.19 Insurance............................................................................ 31
SECTION 4.20 Compensation......................................................................... 31
SECTION 4.21 Privacy.............................................................................. 32
SECTION 4.22 Receivables.......................................................................... 32
SECTION 4.23 Copies of Certain Documents.......................................................... 32
SECTION 4.24 Underlying Documents................................................................. 32
SECTION 4.25 Brokers; Fees and Expenses........................................................... 32
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB........................................ 33
SECTION 5.01 Organization, Standing and Power..................................................... 33
SECTION 5.02 Sub.................................................................................. 33
SECTION 5.03 Financing............................................................................ 33
SECTION 5.04 Ownership of Company Common Stock.................................................... 33
SECTION 5.05 Authorization; Validity of Agreement; Necessary Action............................... 33
SECTION 5.06 No Conflicts; Consents............................................................... 34
SECTION 5.07 Information Supplied................................................................. 34
SECTION 5.08 Brokers.............................................................................. 34
SECTION 5.09 Litigation........................................................................... 35
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS............................................... 35
SECTION 6.01 Conduct of Business.................................................................. 35
SECTION 6.02 No Solicitation...................................................................... 38
ARTICLE VII ADDITIONAL AGREEMENTS................................................................... 40
SECTION 7.01 Preparation of Proxy Statement; Stockholders Meeting................................. 40
SECTION 7.02 Access to Information; Confidentiality............................................... 41
SECTION 7.03 Commercially Reasonable Efforts; Notification........................................ 42
SECTION 7.04 Company Employee Stock Options and Company Warrants.................................. 43
SECTION 7.05 Employee Stock Purchase Plan......................................................... 44
SECTION 7.06 Indemnification; D&O Insurance....................................................... 44
ii
SECTION 7.07 Public Announcements.................................................................. 45
SECTION 7.08 Transfer Taxes........................................................................ 45
SECTION 7.09 Potential Litigation.................................................................. 45
SECTION 7.10 Other Actions by the Company and Parent............................................... 45
ARTICLE VIII CONDITIONS PRECEDENT..................................................................... 46
SECTION 8.01 Conditions to Each Party's Obligation to Effect the Merger............................ 46
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER........................................................ 46
SECTION 9.01 Termination........................................................................... 46
SECTION 9.02 Effect of Termination; Fees and Expenses.............................................. 48
SECTION 9.03 Amendment............................................................................. 49
SECTION 9.04 Extension; Waiver..................................................................... 49
SECTION 9.05 Procedure for Termination, Amendment, Extension or Waiver............................. 49
ARTICLE X GENERAL PROVISIONS....................................................................... 50
SECTION 10.01 Nonsurvival of Representations and Warranties......................................... 50
SECTION 10.02 Notices............................................................................... 50
SECTION 10.03 Interpretation........................................................................ 51
SECTION 10.04 Severability.......................................................................... 51
SECTION 10.05 Counterparts.......................................................................... 51
SECTION 10.06 Entire Agreement; No Third-Party Beneficiaries........................................ 51
SECTION 10.07 Governing Law......................................................................... 52
SECTION 10.08 Assignment............................................................................ 52
SECTION 10.09 Enforcement........................................................................... 52
iii
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of June 1, 2001 (the
"Agreement"), among United NewVentures, Inc., a Delaware corporation ("Parent"),
--------- ------
UNV Acquisition Corp., a Delaware corporation ("Sub") and a wholly owned
---
subsidiary of Parent, and MyPoints.com, Inc., a Delaware corporation (the
"Company").
-------
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all of the issued and outstanding
-----
shares of Company Common Stock (as defined herein) for U.S. $2.60 per share of
Company Common Stock (the "Offer Price"), net to the Seller in cash, upon the
-----------
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of Sub and the Company
have approved the merger (the "Merger") of Sub into the Company on the terms and
------
subject to the conditions set forth in this Agreement, whereby each issued share
of Company Common Stock not owned directly or indirectly by Parent or the
Company, will be converted into the right to receive an amount in cash equal to
the Offer Price; and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Parent and the Principal Company Stockholders (as defined herein) are
entering into Stock Option and Tender Agreements (as defined herein).
NOW, THEREFORE, in consideration of the representations, warranties,
covenants, agreements and conditions set forth herein, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Definitions. (a) As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate" means, for any Person, another Person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise.
"Alternative Acquisition" has the meaning set forth in Section 6.02(a).
----------------------- ---------------
"Alternative Acquisition Proposal" has the meaning set forth in Section
-------------------------------- -------
6.02(a).
- -------
"Applicable Law" means any statute, law (including common law), ordinance,
--------------
rule or regulation applicable to the Company or any Company Subsidiary or their
respective properties or assets.
"Applicable Tax Law" means any Applicable Law relating to Taxes, including,
------------------
without limitation, regulations and other official pronouncements of any
Governmental Entity or political subdivision of such jurisdiction charged with
interpreting such Applicable Law.
"Certificate" or "Certificates" mean the certificate or certificates that
----------- ------------
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock.
"Certificate of Merger" means a certificate of merger, or other appropriate
---------------------
documents, to be filed with the Secretary of State of the State of Delaware to
effect the Merger.
"Closing" means the closing of the Merger.
-------
"Closing Date" means the date on which the Closing occurs.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company" has the meaning set forth in the heading hereof.
-------
"Company 1999 Stock Plan" means the MyPoints.com, Inc. 1999 Stock Plan, as
-----------------------
amended and restated effective as of May 18, 2000, as further amended by the
Company Board on April 26, 2001 and May 23, 2001.
"Company Board" means the Board of Directors of the Company.
-------------
"Company By-laws" means the by-laws of the Company, as amended to the date
---------------
of this Agreement.
"Company Capital Stock" has the meaning set forth in Section 4.03.
--------------------- ------------
"Company Charter" means the certificate of incorporation of the Company, as
---------------
amended to the date of this Agreement.
"Company Common Stock" means the common stock, $.001 par value per share,
--------------------
of the Company, together with the associated Company Rights.
"Company Disclosure Letter" means the letter, dated as of the date of this
-------------------------
Agreement, delivered by the Company to Parent and Sub, which shall describe an
exception to, or otherwise qualify or respond to, the representations and
warranties of the Company specifically identified in each section of the letter
and, to the extent a disclosure by the Company is sufficient to reasonably
inform Parent and Sub of information required to be disclosed in another section
of the letter, such disclosure shall be deemed, for purposes of this Agreement,
to have been made with respect to such other section of the disclosure letter.
2
"Company Employee Stock Option" means any option to purchase Company
-----------------------------
Common Stock granted under any Company Option Plan.
"Company Intellectual Property Rights" means Intellectual Property
------------------------------------
Rights that are owned by, or exclusively licensed to, the Company and the
Company Subsidiaries.
"Company Investment" has the meaning set forth in Section 4.02(b).
------------------ ---------------
"Company Leased Real Property" has the meaning set forth in Section
---------------------------- -------
4.18(a).
- -------
"Company Material Adverse Effect" means (a) a material adverse effect
-------------------------------
on the business, assets, results of operations or financial condition of the
Company and the Company Subsidiaries taken as a whole (except where any change,
event, effect or development results from (i) changes affecting the U.S. economy
generally, (ii) changes affecting the member-driven Internet marketing services
industry in which the Company operates as a whole, and (iii) the announcement of
the existence and terms of this Agreement; provided, with respect to clauses
-------- -------
(a)(i) and (a)(ii) above, that such change, event, effect or development shall
- ------ -------
include a decline in the Company's stock price, increasing operating losses or
the failure to meet revenue earnings estimates to the extent such change, event,
effect or development does not affect the Company to a greater extent than other
participants in the member-driven Internet marketing services industry in the
U.S. in which the Company operates generally), or (b) a material adverse effect
on the ability of the Company to perform its obligations under the Transaction
Agreements to which it is a party or on the ability of the Company to consummate
the Offer, the Merger and the other Transactions.
"Company Option Plans" means the Company's 1999 Stock Plan, the
--------------------
Company's 1996 Stock Plan, the Company's 1999 Supplemental Stock Plan, the
Cybergold 1996 Stock Plan and the Cybergold 1999 Omnibus Equity Incentive Plan,
adopted May 18, 1999.
"Company Plans" has the meaning set forth in Section 4.10(a).
------------- ---------------
"Company Preferred Stock" has the meaning set forth in Section 4.03.
----------------------- ------------
"Company Products" has the meaning set forth in Section 4.15(b).
---------------- ---------------
"Company Rights" means the preferred share purchase rights issued
--------------
pursuant to the Company Rights Agreement.
"Company Rights Agreement" means the Preferred Stock Rights Agreement,
------------------------
dated as of December 13, 2000, as the same may be amended from time to time,
between the Company and Wells Fargo Shareholder Services, as Rights Agent.
"Company SAR" means any stock appreciation right linked to the price of
-----------
Company Common Stock and granted under any Company Option Plan.
"Company SEC Documents" means all reports, schedules, forms, statements
---------------------
and other documents filed or required to be filed by the Company with the SEC
since December 31, 1999.
3
"Company Stockholder Approval" has the meaning set forth in Section
---------------------------- -------
4.04(c).
- -------
"Company Stockholders Meeting" means a meeting of the Company's
----------------------------
stockholders for the purpose of seeking Company Stockholder Approval.
"Company Subsidiaries" means all the Subsidiaries of the Company.
--------------------
"Company Warrants" means warrants to purchase Company Common Stock.
----------------
"Confidentiality Agreement" means the confidentiality agreement, dated
-------------------------
April 4, 2001, between the Company and Parent.
"Consent" means any consent, approval, license, Permit, Order or
-------
authorization.
"Contract" means any Permit, indenture, note, bond, mortgage,
--------
agreement, concession, franchise, instrument, undertaking, commitment,
understanding or other arrangement (whether written or oral).
"DGCL" means the Delaware General Corporation Law, as amended from time
----
to time.
"D&O Insurance" means directors' and officers' insurance.
---
"Dissenters' Shares" means shares of Company Common Stock that are
------------------
outstanding immediately prior to the Effective Time and that are held by any
Person who is entitled to and properly demands payment of the fair value of such
shares pursuant to, and who complies in all respects with, Section 262 of the
DGCL.
"Effective Time" has the meaning set forth in Section 2.06.
-------------- ------------
"ERISA" means the Employment Retirement Income Security Act of 1974, as
-----
amended.
"ERISA Affiliate" means, with respect to any Person, any corporation,
---------------
trade or business which, together with such Person, is a member of a controlled
group of corporations or a group of trades or businesses under common control
within the meaning of section 414 of the Code.
"ESPP" has the meaning set forth in Section 7.05.
---- ------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Fund" has the meaning set forth in Section 3.02(a).
------------- ---------------
"Filed Company SEC Documents" means all Company SEC Documents that were
---------------------------
filed and publicly available prior to the date of this Agreement.
"Financial Statements" means the consolidated financial statements of
--------------------
the Company and its Subsidiaries included in each of the Company's Annual Report
on Form 10-K for the fiscal years ended December 31, 1998, December 31, 1999 and
December 31, 2000, the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001 and any consolidated
4
financial statements of the Company filed with the SEC after the date hereof,
including in each case the footnotes thereto.
"Fully Diluted Shares" has the meaning set forth in Exhibit A.
-------------------- ---------
"GAAP" as to any Person means generally accepted United States
----
accounting principles, applied on a basis consistent with the basis on which the
most recent audited financial statements of such Person were prepared prior to
the date of this Agreement.
"Governmental Entity" means any:
-------------------
(i) federal, state, local, municipal or foreign government;
(ii) governmental or quasi-governmental authority of any nature
(including, without limitation, any governmental agency, branch,
department, official, instrumentality or entity and any court or
other tribunal);
(iii) multi-national organization or body; or
(iv) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
---
1976, as amended.
"Indebtedness" means, without duplication, (i) all obligations for
------------
borrowed money, or with respect to deposits or advances of any kind, (ii) all
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations under conditional sale or other title retention agreements
relating to purchased property, (iv) all obligations issued or assumed as the
deferred purchase price of property or services (excluding obligations to
creditors for raw materials, inventory, services and supplies incurred in the
ordinary and usual course of business), (v) all capitalized lease obligations,
(vi) all obligations under interest rate or currency hedging transactions
(valued at the termination value thereof), (vii) all letters of credit and
(viii) all guarantees and arrangements having the economic effect of a guarantee
of any indebtedness of any other Person (other than a Company Subsidiary).
"Indemnified Party" has the meaning set forth in Section 7.06(a).
----------------- ---------------
"Intellectual Property Rights" means any or all of the following and
----------------------------
all worldwide common law and statutory rights in, arising out of, or associated
with: (i) patents and applications therefore and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof (collectively referred to as "Patents"); (ii) inventions (whether
-------
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know-how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing; (iii) copyrights,
copyrights registrations and applications therefore, and all other rights
corresponding thereto throughout the world; (iv) domain names, uniform resource
locators and other names and locators associated with the Internet; (v)
industrial designs and any registrations and applications therefore; (vi) trade
names,
5
logos, common law trademarks and service marks, trademark and service mark
registrations and applications therefore; (vii) all databases and data
collections and all rights therein; (viii) all moral and economic rights of
authors and inventors, however denominated, (ix) any similar or equivalent
rights to any of the foregoing (as applicable), and (x) software (in source code
and object code form) in all phases of development and all programming, user,
system and other documentation relating to the same.
"IRS" means the Internal Revenue Service.
---
"Liens" means pledges, liens, charges, mortgages, encumbrances and
-----
security interests of any kind or nature whatsoever.
"Material Contracts" means Contracts that are material to the business,
------------------
properties, assets, financial condition or results of operations of the Company
and the Company Subsidiaries taken as a whole and those which are set forth in
Section 4.13(a) of the Company Disclosure Letter.
- ---------------
"Material Intellectual Property Rights" means all Intellectual Property
-------------------------------------
Rights that are material to the business, properties, assets, financial
condition or results of operations of the Company and the Company Subsidiaries
taken as a whole.
"Maximum Premium" has the meaning set forth in Section 7.06(b).
--------------- ---------------
"Merger" has the meaning set forth in the recitals hereto.
------
"Merger Consideration" means the U.S. dollar cash amount equal to the
--------------------
price per share of Company Common Stock paid pursuant to the Offer.
"Minimum Tender Condition" has the meaning set forth in Exhibit A.
------------------------ ---------
"Offer" has the meaning set forth in the recitals hereto.
-----
"Offer Documents" has the meaning set forth in Section 2.01(b).
--------------- ---------------
"Offer Price" has the meaning set forth in the recitals hereto.
-----------
"Order" means with respect to any Person, any award, decision,
-----
injunction, judgment, stipulation, order, ruling, subpoena, writ, decree,
consent decree, or verdict entered, issued, made, or rendered by any
Governmental Entity affecting such Person or any of its properties.
"ordinary and usual course of business" means an action taken by a
-------------------------------------
Person that is consistent with the past practices of such Person and is taken in
the ordinary course of normal day-to-day operations of such Person.
"Outside Date" has the meaning set forth in Section 9.01(b)(i).
------------ ------------------
"Parent" has the meaning set forth in the heading hereof.
------
"Parent Board" has the meaning set forth in Section 5.05.
------------ ------------
6
"Parent Disclosure Letter" means the letter, dated as of the date of
------------------------
this Agreement, delivered by Parent to the Company.
"Parent Material Adverse Effect" means a material adverse effect on the
------------------------------
ability of Parent or Sub to perform its obligations under the Transaction
Documents to which it is a party or on the ability of Parent or Sub to
consummate the Offer, the Merger and the other Transactions.
"Paying Agent" means the bank or trust company selected by Parent prior
------------
to the Effective Time to act as paying agent for the payment of the Merger
Consideration.
"Permit" means all necessary licenses, franchises, permits, consents,
------
approvals, Orders, certificates, authorizations, declarations and filings
required by all Governmental Entities for the conduct of the business and
operations of the Company and each Company Subsidiary as now conducted.
"Permitted Liens" means (i) statutory Liens of carriers, warehousemen,
---------------
mechanics, repairmen, workmen and materialmen incurred in the ordinary and usual
course of business for amounts not yet overdue or being contested in good faith,
(ii) Liens for Taxes not yet due and payable or being contested in good faith in
appropriate proceedings during which collection or enforcement is stayed and
(iii) Liens that, in the aggregate, do not and will not materially interfere
with the ability of the Company and the Company Subsidiaries to conduct business
as currently conducted.
"Person" means any individual, firm, corporation (including any
------
non-profit corporation), general or limited partnership, limited liability
company, trust, joint venture, estate, association, organization, labor union,
or other entity or Governmental Entity.
"Principal Company Stockholders" means those stockholders of the
------------------------------
Company identified in Part A of the Parent Disclosure Letter.
------
"Proceedings" means any action, arbitration, audit, hearing,
-----------
proceeding, investigation, litigation or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Entity or arbitrator.
"Proxy Statement" means a proxy or information statement of the Company
---------------
relating to the approval of this Agreement and the Merger by the Company's
stockholders.
"Receivables" has the meaning set forth in Section 4.22.
----------- ------------
"Redemption Agreement" means the Redemption Agreement, dated as of the
--------------------
date hereof, between the Company and United Air Lines, Inc., a Delaware
corporation.
"Registered Intellectual Property Rights" means all of the registered
---------------------------------------
Intellectual Property Rights owned by, or filed in the name of, the Company or
any of the Company Subsidiaries.
"Rights Plan Amendment" has the meaning set forth in Section 4.14.
--------------------- ------------
7
"Schedule 14D-9" means the Solicitation/Recommendation Statement on
--------------
Schedule 14D-9 with respect to the Offer, as amended from time to time.
"Schedule TO" means the Tender Offer Statement on Schedule TO with
-----------
respect to the Offer, as amended from time to time.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Stock Option and Tender Agreements" means the agreements entered into
----------------------------------
by Parent and the Principal Company Stockholders pursuant to which each of the
Principal Company Stockholders has agreed to take specified actions in
furtherance of the Offer and the Merger.
"Stock Transfer Taxes" means any state, local, foreign or provincial
--------------------
Tax that is attributable to the transfer of Company Common Stock pursuant to
this Agreement.
"Sub" has the meaning set forth in the heading hereof.
---
"Sub Board" has the meaning set forth in Section 5.05.
--------- ------------
"Subsidiary" means, with respect to any Person, any corporation,
----------
association, general or limited partnership, limited liability company, trust,
joint venture, organization or other entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Superior Company Proposal" has the meaning set forth in Section
------------------------- -------
6.02(e).
- -------
"Surviving Corporation" has the meaning set forth in Section 2.04.
--------------------- ------------
"Takeover Statute" has the meaning set forth in Section 4.16.
---------------- ------------
"Tax" or "Taxes" means: (i) any income, corporation, gross income,
--- -----
gross receipts, franchise, profits, gains, capital stock, capital duty,
withholding, social security (or similar), employment, unemployment, disability,
real property, personal property, wealth, welfare, stamp, excise, license,
severance, environmental (including taxes under Section 59A of the Code),
customs duties, occupation, sales, use, transfer, registration, value added,
payroll, premium, property, or windfall profits tax, estimated, ad valorem or
excise tax, alternative or add-on minimum tax or other tax of any kind
whatsoever (whether or not measured in whole or in part by net income and
including any fee, assessment or other charge in the nature of or in lieu of any
tax) imposed by any Tax Authority, including any interest, penalty, or addition
thereto, whether disputed or not; and (ii) any liability for the payment of any
amount of the type described in clause (i) as a result of the Company or any
Company Subsidiary being a successor to or transferee of any other corporation
at any time on or prior to the Closing Date, and any interest, penalties,
additions to tax (whether imposed by law, contractual agreement or otherwise)
and any
8
liability in respect of any tax as a result of being a member of any affiliated,
consolidated, combined, unitary or similar group.
"Tax Authority" means, with respect to any Tax, the Governmental Entity
-------------
or political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Taxes for such entity or subdivision,
including any Governmental Entity that imposes, or is charged with collecting,
social security or similar charges or premiums.
"Tax Period" means, with respect to any Tax, the period for which the
----------
Tax is reported as provided under any Applicable Tax Law.
"Tax Return" means all Federal, state, local, provincial and foreign
----------
tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax return relating to Taxes.
"Termination Fee" has the meaning set forth in Section 9.02(b).
--------------- ---------------
"Transactions" means, collectively, the Offer, the Merger and the other
------------
transactions contemplated by the Transaction Agreements.
"Transaction Agreements" means this Agreement, the Stock Option and
----------------------
Tender Agreements and the Redemption Agreement.
"Transfer Taxes" means any state, local, foreign or provincial Tax that
--------------
is attributable to the transfer of the beneficial ownership of the Company's or
the Company's Subsidiaries' real or personal property.
"Valid Consents" has the meaning set forth in Section 4.15(i).
-------------- ---------------
"Virus" has the meaning set forth in Section 4.15(k).
----- ---------------
"Voting Company Debt" means any bonds, debentures, notes or other
-------------------
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote.
ARTICLE II
The Offer and the Merger
SECTION 2.01 The Offer.
(a) (i) As promptly as practicable but in no event later than ten
business days after the date of this Agreement, Sub shall, and Parent shall
cause Sub to, commence the Offer within the meaning of the applicable rules and
regulations of the SEC. The initial expiration date of the Offer shall be the
twentieth business day from and after the date the Offer is commenced. The
obligation of Sub to, and of Parent to cause Sub to, accept for payment, and pay
for, any shares of Company Common Stock tendered pursuant to the Offer shall be
subject to the conditions set forth in Exhibit A (any of which may be waived by
---------
Sub in its sole discretion) and to the other
9
conditions in this Agreement. Sub expressly reserves the right to modify the
terms of the Offer, except that, without the prior written consent of the
Company (such consent to be authorized by the Company Board), Sub shall not (A)
reduce the number of shares of Company Common Stock subject to the Offer, (B)
reduce the consideration per share of Company Common Stock to be paid pursuant
to the Offer below the Offer Price, (C) modify or add to the conditions set
forth in Exhibit A in any manner adverse to the holders of Company Common Stock,
---------
(D) except as provided in Section 2.01 (ii), extend the Offer or (E) change the
-----------------
form of consideration payable in the Offer.
(ii) Notwithstanding the restriction in Section 2.01(a)(i)(D), Sub
---------------------
may, without the consent of the Company, extend the Offer: (A) if at the
scheduled expiration date of the Offer any of the conditions to Sub's obligation
to purchase shares of Company Common Stock are not satisfied or waived, until
such time as such conditions are satisfied or waived; (B) for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer; and (C) in order to provide sufficient
time to respond to any matter hereafter arising and required to be disclosed to
Parent pursuant to Section 6.01(c)(ii) and which causes Parent or Sub to amend
-------------------
the Offer Documents; provided that any extension pursuant to this clause (C)
-------- ----------
shall not exceed 20 business days. In addition, Sub may extend the Offer after
the acceptance of shares of Company Common Stock thereunder for a further period
of time by means of a subsequent offering period under Rule 14d-11 promulgated
under the Exchange Act of not more than 20 business days to meet the objective
(which is not a condition to the Offer) that there be validly tendered, in
accordance with the terms of the Offer, prior to the expiration date of the
Offer (as so extended) and not withdrawn a number of shares of Company Common
Stock, together with shares of Company Common Stock then owned by Parent and
Sub, which represents at least 90% of the Fully Diluted Shares.
(iii) On The Terms And Subject To The Conditions Of The Offer And
This Agreement, Sub Shall Pay For All Shares Of Company Common Stock Validly
Tendered And Not Withdrawn Pursuant To The Offer As Soon As Practicable After
The Expiration Of The Offer And, With Respect To Any Extension Of The Offer, As
Soon As Practicable After Shares Of Company Common Stock Are Validly Tendered.
Sub May, At Any Time, Transfer Or Assign To One Or More Subsidiaries Of Parent
The Right To Purchase All Or Any Portion Of The Shares Of Company Common Stock
Tendered Pursuant To The Offer, But Any Such Transfer Or Assignment Shall Not
Relieve Sub Or Parent Of Their Respective Obligations Under The Offer Or
Prejudice The Rights Of Tendering Stockholders To Receive Payment For Shares Of
Company Common Stock Validly Tendered And Accepted For Payment.
(b) On The Date Of Commencement Of The Offer, Parent And Sub Shall File
With The Sec A Tender Offer Statement On Schedule To With Respect To The Offer,
Which Shall Contain An Offer To Purchase And A Related Letter Of Transmittal And
Summary Advertisement (Such Schedule To And The Documents Included Therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"). The Offer Documents will comply as
---------------
to form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations promulgated thereunder. Parent shall deliver
copies of the proposed forms of the Offer Documents to the Company within a
reasonable time prior to the commencement of the Offer for review and comment by
the Company and its counsel. Each of Parent, Sub and the Company shall promptly
correct any information provided by it for use in
10
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and each of Parent and Sub shall
take all steps necessary to amend or supplement the Offer Documents and to cause
the Offer Documents, as so amended or supplemented, to be filed with the SEC and
to be disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. Parent and Sub shall
provide the Company and its counsel in writing with any comments Parent, Sub or
their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
SECTION 2.02 Company Actions.
(a) The Company hereby approves of and consents to each of the
Transactions and has provided Parent with a signed copy of the written opinion
of Robertson Stephens, Inc. that the Offer Price to be received in the Offer and
the Merger Consideration to be received pursuant to the Merger is fair, from a
financial point of view, to the holders of Company Common Stock. The Company has
been authorized by Robertson Stephens, Inc. to include such fairness opinion (or
a reference thereto with the consent of Robertson Stephens, Inc.) in the
Schedule 14D-9 referred to below and the Proxy Statement.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC the Schedule 14D-9 containing the recommendations
described in Section 4.04(b) and shall mail the Schedule 14D-9 to the holders of
---------------
Company Common Stock. The Schedule 14D-9 will comply as to form in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations promulgated thereunder. The Company shall deliver copies of the
proposed form of the Schedule 14D-9 to Parent within a reasonable time prior to
the filing thereof with the SEC for review and comment by Parent and its
counsel. Each of the Company, Parent and Sub shall promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect, and the Company shall take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by applicable Federal securities laws. The
Company shall provide Parent and its counsel in writing with any comments the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Sub promptly with mailing labels containing the names and
addresses of the record holders of Company Common Stock as of a recent date and
of those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders, security position listings, computer files
and all other information in the Company's possession or control regarding the
beneficial owners of Company Common Stock, and shall furnish to Sub such
information and assistance (including, without limitation, updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of Applicable Law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Transactions, Parent and Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in
11
connection with the Offer and the Merger and, if this Agreement shall be
terminated, shall deliver to the Company or destroy all copies of such
information then in their possession.
SECTION 2.03 Board of Directors; Section 14(f).
(a) If requested by Parent, promptly after the acceptance for payment of
the shares of Company Common Stock to be purchased pursuant to the Offer, Sub
shall be entitled to designate such number of directors on the Company Board
(and on each committee of the Company Board and on each board of directors of
each Company Subsidiary designated by Parent) as will give Sub representation on
the Company Board (or such committee or Company Subsidiary board of directors)
equal to at least that number of directors, rounded up to the next whole number,
which is the product of (a) the total number of directors on the Company Board
(or such committee or Company Subsidiary board of directors) giving effect to
the directors appointed or elected pursuant to this sentence multiplied by (b)
the percentage that (i) such number of shares of Company Common Stock so
accepted for payment and paid for by Sub plus the number of shares of Company
Common Stock otherwise owned by Sub or any other subsidiary of Parent bears to
(ii) the number of shares of Company Common Stock then outstanding, and the
Company shall, at such time, cause Sub's designees to be so appointed or
elected. The Company shall take all actions necessary to cause the persons
designated by Parent to be directors on the Company Board (or a committee of the
Company Board or the board of directors of a Company Subsidiary designated by
Parent) pursuant to the preceding sentence to be so appointed or elected
(whether, at the request of Parent, by means of increasing the size of the
Company Board (or such committee or Company Subsidiary board of directors) or
seeking the resignation of directors and causing Parent's designees to be
appointed or elected).
(b) The Company's obligation to appoint designees of Parent and/or Sub to
the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all actions
required pursuant to Section 14(f) and Rule l4f-1 in order to fulfill its
obligations under this Section 2.03, and shall include in the Schedule 14D-9
------------
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1. Parent and Sub will supply to
the Company any information with respect to any of them and their nominees,
officers, directors and Affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Parent's and/or Sub's
designees pursuant to this Section 2.03 and prior to the Effective Time, any
------------
amendment or termination of this Agreement, extension for the performance or
waiver of the obligations or other acts of Parent or Sub or waiver of the
Company's rights hereunder, will require the concurrence of a majority of the
members of the Company Board who are members of the Company Board on the date of
this Agreement.
SECTION 2.04 The Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, Sub shall be merged
with and into the Company at the Effective Time. At the Effective Time, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "Surviving Corporation"). At the election of
---------------------
Parent, any direct or indirect Subsidiary or other Affiliate of Parent may be
12
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties shall execute an appropriate amendment to this Agreement in order to
reflect the foregoing.
SECTION 2.05 Closing. The Closing shall take place at the offices of Mayer,
Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603 at 10:00 a.m.
on the second business day following the satisfaction (or, to the extent
permitted by Applicable Law, waiver by all parties) of the conditions set forth
in Article VIII (or, to the extent permitted by law, waived by the parties
------------
entitled to the benefits thereof), or at such other place, time and date as
shall be agreed in writing between Parent and the Company.
SECTION 2.06 Effective Time. At the Closing, Parent and the Company will
cause the Certificate of Merger to be executed and filed with the Secretary of
State of the State of Delaware as provided in Section 251 or 253 of the DGCL.
The Merger shall become effective at the time when the Certificate of Merger has
been duly filed with the Secretary of State of the State of Delaware or such
other time as shall be agreed upon by the parties and set forth in the
Certificate of Merger in accordance with the DGCL (the "Effective Time"). From
--------------
and after the Effective Time, the Merger shall have all the effects provided by
Section 259 of the DGCL, including without limitation, the effect that the
Surviving Corporation shall possess all of the assets, rights, privileges,
powers and franchises and shall be subject to all of the liabilities,
restrictions, disabilities and duties of the Company and Sub, all as provided
under the DGCL.
SECTION 2.07 Certificate of Incorporation and By-laws.
(a) The Company Charter, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by Applicable Law;
provided, however, that such Company Charter shall be amended to become
- -------- -------
identical to the Certificate of Incorporation of Sub as in effect immediately
prior to the Effective Time except that Article I thereof shall be amended to
change the name of the Surviving Corporation to the name of the Company.
(b) The by-laws of Sub as in effect immediately prior to the Effective
Time shall be the by-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by Applicable Law.
SECTION 2.08 Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
SECTION 2.09 Officers. The officers of the Company shall, from and after
the Effective Time, be the officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
13
ARTICLE III
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share of
Company Common Stock that is owned by the Company, the Company Subsidiaries,
Parent or Sub shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Company Common Stock, Company Employee Stock Options and
Company Warrants.
(i) Subject to Sections 3.01(b), and 3.01(d), each issued and
---------------- -------
outstanding share of Company Common Stock shall be converted into the
Merger Consideration.
(ii) As of the Effective Time, all such shares of Company Common
Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration upon surrender of such certificate in accordance with Section
-------
3.02, without interest.
----
(iii) Company Employee Stock Options and Company Warrants shall be
treated as set forth in Section 7.04.
------------
(d) Dissenters' Rights. Notwithstanding anything in this Agreement to the
contrary, Dissenters' Shares shall not be converted into Merger Consideration as
provided in Section 3.01(c), but rather the holders of Dissenters' Shares shall
---------------
be entitled to payment of the fair value of such Dissenters' Shares in
accordance with Section 262 of the DGCL; provided, however, that if any such
-------- -------
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to receive payment of fair value under Section 262 of the DGCL, then the
right of such holder to be paid the fair value of such holder's Dissenters'
Shares shall cease and such Dissenters' Shares shall be treated as if they had
been converted as of the Effective Time into Merger Consideration as provided in
Section 3.01(c). The Company shall provide prompt notice to Parent of any
- ---------------
demands received by the Company for appraisal of any shares of Company Common
Stock, attempted withdrawals of any such demands and any other documents
received in connection with any assertion of rights to payment of fair value
under Section 262 of the DGCL, and Parent shall have the right to participate in
and direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Parent, make any
14
payment with respect to, or settle or offer to settle, any such demands, or
agree to do any of the foregoing.
SECTION 3.02 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select a bank
or trust company reasonably acceptable to the Company to act as the Paying Agent
for the payment of the Merger Consideration upon surrender of Certificates
representing Company Common Stock. The Surviving Corporation shall provide to
the Paying Agent on a timely basis, as and when needed after the Effective Time,
cash necessary to pay for the shares of Company Common Stock converted into the
right to receive the Merger Consideration pursuant to Section 3.01(c) (such cash
---------------
being hereinafter referred to as the "Exchange Fund").
-------------
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
Certificate or Certificates, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and shall
be in a form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration into which the shares of Company Common Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
-------
3.01(c), and the Certificate so surrendered shall forthwith be canceled. In the
- -------
event of a transfer of ownership of Company Common Stock which is not registered
in the transfer records of the Company, payment may be made to a Person other
than the Person in whose name the Certificate so surrendered is registered, if
such Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the Person requesting such payment shall (A) pay any transfer or
other Taxes required by reason of the payment to a Person other than the
registered holder of such Certificate, or (B) establish to the satisfaction of
the Surviving Corporation that such Tax has been paid or is otherwise not
applicable. Until surrendered as contemplated by this Section 3.02, each
------------
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration, without
interest, into which the shares of Company Common Stock theretofore represented
by such Certificate shall have been converted pursuant to Section 3.01(c). No
---------------
interest shall be paid or shall accrue on any Merger Consideration payable upon
the surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid in accordance with the terms of this Article III upon
-----------
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares, and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, any
certificates formerly representing shares of Company Common Stock are presented
to the Surviving
15
Corporation or the Paying Agent for any reason, they shall be canceled and
exchanged as provided in this Article III.
-----------
(d) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of Company Common Stock six months after
the Effective Time shall be delivered to the Surviving Corporation, and any
holder of Company Common Stock who has not theretofore complied with this
Article III shall thereafter look only to the Surviving Corporation for payment
- -----------
of its claim for Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any Person in respect of any
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Applicable Law. If any
Certificate has not been surrendered prior to the date that is five years after
the Effective Time (or immediately prior to such earlier date on which Merger
Consideration in respect of such Certificate would otherwise escheat to or
become the property of any Governmental Entity), any such shares, cash,
dividends or distributions in respect of such Certificate shall, to the extent
permitted by Applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously entitled
thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) Withholding Rights. The Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable to any holder of
Company Common Stock pursuant to this Agreement such amounts as may be required
to be deducted and withheld with respect to the making of such payment under the
Code, or under any provision of applicable state, local or foreign tax law. To
the extent that amounts are so withheld and paid over to the appropriate Tax
Authority, the Surviving Corporation will be treated as though it withheld an
appropriate amount of the type of consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock, sold such consideration
for an amount of cash equal to the fair market value of such consideration at
the time of such deemed sale and paid such cash proceeds to the appropriate Tax
Authority.
(h) Lost, Stolen or Destroyed Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed, the Paying
Agent shall issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration deliverable in respect thereof as determined in accordance
with Section 3.01 hereof, provided that the Person to whom the Merger
------------
Consideration is paid shall, as a condition precedent to the payment thereof,
indemnify the Surviving Corporation in a manner satisfactory to it (including,
without limitation, the posting by such Person of such bond and security as the
Surviving Corporation may reasonably request) against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.
16
SECTION 3.03 Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
Company Capital Stock (other than by virtue of the issuance of Company Common
Stock under the ESPP in accordance with this Agreement, upon the exercise of
Company Employee Stock Options or Company Warrants outstanding on the date of
this Agreement and in accordance with their present terms) shall occur that is
not otherwise consented to by Parent in writing, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or stock dividend thereon, in any of these cases with a
record date during such period, the cash payable pursuant to the Offer, the
Merger Consideration and any other amounts payable pursuant to this Agreement
shall be appropriately adjusted.
ARTICLE IV
Representations and Warranties of the Company
Except as otherwise disclosed in the Company Disclosure Letter, the Company
represents and warrants to Parent and Sub, as follows:
SECTION 4.01 Organization, Standing and Power. The Company and each of the
Company Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has full power
and authority and possesses all Permits necessary to enable it to own, lease or
otherwise hold its properties and assets and to conduct its business as
presently conducted, other than such Permits the lack of which, individually or
in the aggregate, has not had and could not reasonably be expected to have a
Company Material Adverse Effect. The Company and each Company Subsidiary is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership of its properties make such qualification necessary or
beneficial, except in such jurisdictions where the failure to be so qualified,
individually or in the aggregate, has not had and could not reasonably be
expected to have a Company Material Adverse Effect. True and complete copies of
the Company Charter, the Company By-laws and the charter documents, by-laws,
organizational documents and partnership, limited liability company and joint
venture agreements (and in each case all amendments thereto) of each of the
Company Subsidiaries as in effect immediately prior to the date hereof have been
delivered to Parent. Neither the Company nor any of the Company Subsidiaries is
in violation of any term of its respective certificate of incorporation or by-
laws (or other organizational documents).
SECTION 4.02 Company Subsidiaries; Equity Interests.
(a) The Company owns directly or indirectly each of the outstanding shares
of capital stock or a 100% ownership interest, as applicable, of each of the
Company Subsidiaries free and clear of all Liens. Each of the outstanding shares
of capital stock of each of the Company Subsidiaries having corporate form is
duly authorized, validly issued, fully paid and nonassessable. The following
information for each Company Subsidiary is set forth in Section 4.02 of the
------------
Company Disclosure Letter: (i) its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock or share capital; and (iii) the
name of each stockholder or owner and the number of issued and outstanding
shares of capital stock or share capital held by it or the type and amount of
any ownership interest.
17
(b) Except for its interests in the Company Subsidiaries, neither the
Company nor any Company Subsidiary (i) owns, has any right to, or, except as set
forth in Section 4.02 of the Company Disclosure Letter, is, or during the last
90 days has been involved in any material negotiations to, acquire, directly or
indirectly, any capital stock, membership interest, partnership interest, joint
venture interest or other equity interest in any Person, except through barter
transactions entered into in the ordinary and usual course of business and where
the amount of the transaction is less than $100,000 or (ii) has the ability to
control (whether through the ownership of voting securities or otherwise) any
other Person (any of such interests under clause (i) or (ii) other than a
---------- ----
Company Subsidiary, a "Company Investment"). No Company Investment is,
------------------
individually or when taken together with all other Company Investments, material
to the business of the Company and the Company Subsidiaries taken as a whole.
SECTION 4.03 Capital Structure. The authorized capital stock of the Company
consists of 100,000,000 shares of Company Common Stock, 10,000,000 shares of
preferred stock and 100,000 shares of Series A Participating Preferred Stock,
$0.001 par value per share ("Company Preferred Stock" and collectively with the
-----------------------
Company Common Stock, "Company Capital Stock"). As of the date hereof, (i)
---------------------
40,757,079 shares of Company Common Stock and no shares of Company Preferred
Stock were issued and outstanding, (ii) 241,000 shares of Company Common Stock
and no shares of Company Preferred Stock were held by the Company in its
treasury, (iii) 8,642,444 shares of Company Common Stock were subject to
outstanding Company Employee Stock Options and the weighted average exercise
price of such options was $1.3285 per share, and (iv) 161,408 shares of Company
Common Stock were subject to outstanding Company Warrants and the weighted
average exercise price of such warrants was $2.06 per share and 182,451 shares
of Company Common Stock reserved for issuance pursuant to the ESPP. Section 4.03
------------
of the Company Disclosure Letter sets forth a full list of all outstanding
Company Employee Stock Options and Company Warrants, including the name of the
Person to whom such options (or warrants) have been granted, the number of
shares subject to each option (or warrant), the per share exercise price for
each option (or warrant), the vesting schedule for each option (or warrant) and
whether such option (or warrant) automatically terminate in the event of a
change in control of the Company. Except as set forth above, and except for the
ESPP, as of the date hereof, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of Company Capital Stock are, and all such shares that may be
issued prior to the Effective Time will be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, the
Company Charter, the Company By-laws or any Contract to which the Company is a
party or otherwise bound. Except as set forth above, there are no Voting Company
Debts, Company Warrants or Company SARs issued or outstanding and the only
rights outstanding under any Company Option Plan are Company Employee Stock
Options. Except as set forth above or pursuant to the Company Rights Agreement,
as of the date of this Agreement, there are no options, warrants, rights,
convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (A) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other
18
equity interest in, the Company or of any Company Subsidiary or any Voting
Company Debt, (B) obligating the Company or any Company Subsidiary to issue,
grant, extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (C) that give any Person the
right to receive any economic benefit or right similar to or derived from the
economic benefits and rights occurring to holders of Company Capital Stock.
There are not any (1) outstanding contractual obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any Company Subsidiary, or (2) voting trusts or
other agreements or understandings to which the Company or any of the Company
Subsidiaries is a party with respect to the voting or transfer of capital stock
of the Company or any of the Company Subsidiaries.
SECTION 4.04 Authorization; Validity of Agreement; Necessary Action.
(a) The Company has full corporate power and authority to execute and
deliver each Transaction Agreement to which it is a party and each agreement,
document and instrument to be executed and delivered by or on behalf of it
pursuant to, or in connection with or as contemplated by the Transaction
Agreements and to consummate the Transactions. The execution, delivery and
performance by the Company of each Transaction Agreement to which it is a party
and the consummation by the Company of the Transactions have been duly
authorized by all necessary corporate action on the part of the Company, and
except for the Company Stockholder Approval in the case of the Merger, no other
corporate action on the part of the Company is necessary to authorize the
consummation of the Transactions. The Transaction Agreements to which the
Company is a party have been duly executed and delivered by the Company and
constitute (assuming the due authorization, execution and delivery by Parent and
Sub), valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to general principles of equity.
(b) The Company Board, at a meeting duly called and held prior to
execution of any of the Transaction Agreements, duly and unanimously adopted
resolutions (i) approving and declaring advisable this Agreement and the other
Transaction Agreements, the Merger and the other Transactions, (ii) determining
that the terms of the Offer, the Merger and the other Transactions are fair to
and in the best interests of the Company and its stockholders, (iii)
recommending that the holders of Company Common Stock accept the Offer and
tender their shares of Company Common Stock pursuant to the Offer, (iv)
recommending that the Company's stockholders approve and adopt this Agreement
and (v) adopting this Agreement and the other Transaction Agreements. Such
resolutions are sufficient to render inapplicable to Parent and Sub, to this
Agreement and the other Transaction Agreements to which the Company is a party,
and to the Offer, the Merger and the other Transactions the provisions of
Section 203 of the DGCL. The Company has been advised by each of its directors,
executive officers, affiliates or Subsidiaries that each such Person intends to
tender all shares of Company Common Stock owned by such Person pursuant to the
Offer, except to the extent of any restrictions created by Section 16(b) of the
Exchange Act.
(c) The only vote of holders of any class or series of Company Capital
Stock necessary to approve and adopt this Agreement and the Merger is the
approval and adoption of
19
this Agreement by the holders of a majority of the outstanding shares of Company
Common Stock (the "Company Stockholder Approval"). No vote or approval of any
----------------------------
holder of Company Capital Stock is necessary to approve any Transaction
Agreement other than this Agreement or to consummate the Offer or any
Transaction other than the Merger.
SECTION 4.05 No Conflicts; Consents. Except as set forth in Section 4.05 of
------------
the Company Disclosure Letter, the execution and delivery by the Company of each
Transaction Agreement to which it is a party do not, and the consummation of the
Offer, the Merger and the other Transactions and compliance with the terms
hereof and thereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or to
a loss of a material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any Person under, or result in the creation
of any Lien (other than Permitted Liens) upon any of the properties or assets of
the Company or any Company Subsidiary under, any provision of (i) the Company
Charter, the Company By-laws or the comparable charter or organizational
documents of any Company Subsidiary, (ii) any Contract to which the Company or
any Company Subsidiary is a party or by which any of their respective properties
or assets is bound or (iii) subject to the filings and other matters referred to
in the following sentence, any provision of any Order or Applicable Law
applicable to the Company or any Company Subsidiary or their respective
properties or assets, other than, in the cases of clause (ii) or (iii) above,
----------- -----
any such items that, individually or in the aggregate, have not had and could
not reasonably be expected to have a Company Material Adverse Effect. No Consent
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to the Company or any Company
Subsidiary in connection with the execution, delivery and performance of any
Transaction Agreement to which it is a party or the consummation of the
Transactions, other than (A) compliance with and filings under the HSR Act, (B)
the filing with the SEC of (1) the Schedule 14D-9, (2) a Proxy Statement, if
such approval is required by Applicable Law, and (3) such reports under Section
13 of the Exchange Act as may be required in connection with this Agreement and
the other Transaction Agreements, the Offer, the Merger and the other
Transactions, (C) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of the other jurisdictions in which the Company is qualified to do
business, (D) such filings as may be required in connection with the Taxes
described in Section 7.08, and (E) such other items as are set forth in Section
------------ -------
4.05 of the Company Disclosure Letter.
- ----
SECTION 4.06 SEC Documents; Financial Statements; Undisclosed Liabilities.
(a) The Company has timely filed with the SEC all Company SEC Documents.
As of its respective date, each Company SEC Document, including, without
limitation, any financial statements or schedules included therein, complied in
all material respects with the requirements of the Securities Act and Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents, and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Except to the
extent that information contained in any Company SEC Document has been revised
or superseded by a later filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material
20
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The Financial Statements comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(c) The Company and the Company Subsidiaries have no material liabilities
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, and whether or not required to be disclosed on a balance sheet
prepared in accordance with GAAP, except liabilities (i) stated or adequately
reserved against in the Financial Statements of the Company included in the
Filed Company SEC Documents or disclosed in Section 4.06(c) of the Company
---------------
Disclosure Letter, or (ii) incurred in the ordinary and usual course of business
since March 31, 2001, or (iii) provided for in footnotes to the Financial
Statements.
SECTION 4.07 Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in (i)
the Offer Documents or the Schedule 14D-9 will, at the time such document is
filed with the SEC, at any time it is amended or supplemented or at the time it
is first published, sent or given to the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (ii) the Proxy Statement will, at the date it is first mailed to the
Company's stockholders or at the time of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9 and the Proxy Statement will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations promulgated thereunder, except that no representation is made by
the Company with respect to statements made or incorporated by reference therein
based on information supplied by Parent or Sub for inclusion or incorporation by
reference therein.
SECTION 4.08 Absence of Certain Changes or Events. Except as disclosed in
the Filed Company SEC Documents or in Section 4.08 of the Company Disclosure
------------
Letter, from the date of the most recent audited financial statements included
in the Filed Company SEC Documents to the date of this Agreement, the Company
has conducted its business only in the ordinary and usual course of business,
and during such period none of the Company or any Company Subsidiary has:
(i) experienced or been affected by any event, change, effect or
development that, individually or in the aggregate, has had or could
reasonably be expected to have a Company Material Adverse Effect; or
21
(ii) taken any action that would not be permitted to be taken after
the date hereof under Section 6.01.
------------
SECTION 4.09 Taxes.
(a) All Tax Returns required to be filed or sent through the date hereof
and which have not otherwise been validly extended, by or with respect to the
Company and the Company Subsidiaries, have been filed or sent and all Taxes
required to be paid through the date hereof by the Company and the Company
Subsidiaries, whether disputed or not and whether or not shown on any Tax
Return, have been paid, except Taxes which have not yet accrued or otherwise
become due, for which adequate provision has been made in the pertinent
financial statements referred to in Section 4.06 hereof. All such Tax Returns
------------
were correct and complete in all material respects. The provisions for Taxes on
the Financial Statements and on the latest balance sheet included in the Company
SEC Documents are sufficient as of their respective dates for the payment of all
accrued and unpaid Taxes of any nature of the Company and the Company
Subsidiaries, whether or not assessed or disputed. All Taxes and other
assessments and levies which the Company or any of the Company Subsidiaries is
required to withhold or collect have been withheld and collected and have been
paid over to the proper Governmental Entities in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party. There is no pending dispute or claim concerning any Tax liability
of the Company or any of the Company Subsidiaries either (A) claimed or raised
by any Tax Authority or (B) as to which the Company has knowledge based upon
personal contact with any agent of or other Person acting on behalf of or for
such Tax Authority. Except as provided in Section 4.09 of the Company Disclosure
------------
Letter, neither the Company nor any of the Company Subsidiaries has received
notice of any audit of any Tax Return filed by such Person. Except as provided
in Section 4.09 of the Company Disclosure Letter, neither the Company nor any of
------------
the Company Subsidiaries has received notice of any claim made by any authority
in a jurisdiction where the Company or such Company Subsidiary does not file Tax
Returns that the Company or such Company Subsidiary is or may be subject to
taxation by that jurisdiction. There are no Liens recorded or asserted on any of
the assets or properties of the Company or any of the Company Subsidiaries that
arose in connection with any failure (or alleged failure) to pay any Tax.
(b) The Company has made available to Parent correct and complete copies
of all Tax Returns, examination reports, statements of deficiencies assessed
against or agreed to by the Company or any of the Company Subsidiaries and all
other communications relating thereto since December 31, 1998.
(c) Except as set forth in Section 4.09 of the Company Disclosure Letter,
------------
neither the Company nor any of the Company Subsidiaries has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency, nor has any such waiver or agreement
been requested by the IRS or any other Tax Authority; and neither the Company
nor any of the Company Subsidiaries currently is the beneficiary of any
extension of time within which to file any Tax Return.
(d) Except as set forth in Section 4.09 of the Company Disclosure Letter:
------------
(i) neither the Company nor any of the Company Subsidiaries has filed a consent
under Section 341(f) of
22
the Code concerning collapsible corporations or agreed to have Section 341(f)(2)
of the Code apply; (ii) neither the Company nor any of the Company Subsidiaries
has made any payments, is obligated to make any payments, or is party to any
agreement that under any circumstances could obligate it to make any payments
that will not be deductible under Section 280G or Section 162(m) of the Code;
(iii) neither the Company nor any of the Company Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code; (iv) neither the Company nor any of the Company Subsidiaries is a
party to any Tax allocation or sharing agreement; (v) neither the Company nor
any of the Company Subsidiaries (A) has been a member of an affiliated group
filing a consolidated federal income Tax return (other than such a group of
which the Company is the common parent) or (B) will be required to pay the Taxes
of any other Person under Treasury Regulation ss.1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, agreement or otherwise; and (vi) neither the Company nor any of the
Company Subsidiaries is or will be required to include in income any adjustment
pursuant to Section 481(a) of the Code by reason of a voluntary change in
accounting method initiated by the Company or a Company Subsidiary (nor does the
Company have any knowledge that the Internal Revenue Service has proposed any
such adjustment or change of accounting method). There are no requests for
rulings or determinations in respect of any Tax or Tax matter pending between
the Company or any of the Company Subsidiaries and any Tax Authority.
SECTION 4.10 Benefit Plans; ERISA Compliance; Excess Parachute Payments.
(a) Section 4.10 of the Company Disclosure Letter contains a true and
------------
complete list of each "employee benefit plan" (within the meaning of Section
3(3) of ERISA), stock purchase, stock option, severance, employment, change-in-
control, fringe benefit, collective bargaining, unemployment compensation,
bonus, incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including, without limitation, any funding mechanism therefor now in
effect or required in the future as a result of any Transaction, including the
Offer or the Merger or otherwise), whether formal or informal, oral or written,
legally binding or not, under which any employee or former employee of the
Company or the Company Subsidiaries or any of their respective ERISA Affiliates
has any present or future right to benefits or under which the Company or the
Company Subsidiaries or any of their respective ERISA Affiliates has any present
or future liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "Company Plans."
-------------
(b) With respect to each Company Plan, the Company has delivered to Parent
a current, accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) any related
trust agreement or other funding instrument; (ii) the most recent IRS
determination or opinion letter, if applicable; (iii) any summary plan
description and other written communications (or a description of any oral
communications) by the Company, the Company Subsidiaries or any of their ERISA
Affiliates concerning the extent or nature of the benefits provided under a
Company Plan; and (iv) for the three most recent years (A) the Form 5500 and
attached schedules, (B) audited financial statements, (C) actuarial valuation
reports and (D) attorney's response to an auditor's request for information.
23
(c) (i) Each Company Plan has been established and complies and has been
administered in form and operation in accordance with its terms, and in
compliance with the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (ii) each Company Plan which is intended
to be qualified within the meaning of Code Section 401(a) is so qualified and
has received a favorable determination letter or, in the case of a prototype
plan, opinion letter from the IRS as to its qualification under Section 401(a)
of the Code and the tax-exempt status of any trust which forms a part of such
plan under Section 501(a) of the Code, which favorable determination letter or,
in the case of a prototype plan, opinion letter covers all amendments to the
plan for which the remedial amendment period (within the meaning of Section
401(b) of the Code and applicable regulations) has expired, and nothing has
occurred, whether by action or failure to act, that could reasonably be expected
to cause the loss of such qualification; (iii) no event has occurred and no
condition exists that would subject the Company or the Company Subsidiaries or
any of their respective ERISA Affiliates, to any tax, fine, Lien, penalty or
other liability imposed by ERISA, the Code or other applicable laws, rules and
regulations; (iv) for each Company Plan with respect to which a Form 5500 has
been filed, no material change has occurred with respect to the matters covered
by the most recent Form since the date thereof; (v) no "prohibited transaction"
(as such term is defined in ERISA Section 406 and Code Section 4975) has
occurred with respect to any Company Plan; (vi) no Company Plan provides retiree
welfare benefits (and none of the Company or any Company Subsidiaries has any
obligations to provide any retiree welfare benefits) except, in either case, to
the extent required by Section 4980B of the Code; and (vii) all awards, grants
or bonuses made pursuant to any Company Plan have been, or will be, fully
deductible to the Company or the Company Subsidiaries notwithstanding the
provisions of Section 162(m) of the Code and the regulations promulgated
thereunder.
(d) With respect to any Company Plan (or the assets thereof), (i) no
actions, suits or claims (other than routine claims for benefits in the ordinary
and usual course of business) are pending or threatened in writing, (ii) no
facts or circumstances exist that could give rise to any such actions, suits or
claims and (iii) none of the assets of any Company Plan are invested in employer
securities or employer real property.
(e) Except as set forth in Section 4.10 of the Company Disclosure Letter,
------------
no Company Plan exists that could result in the payment to any present or former
employee of the Company or the Company Subsidiaries or any of their respective
ERISA Affiliates of any money or other property or accelerate or provide any
other rights or benefits to any present or former employee of the Company or any
Company Subsidiary or any of their respective ERISA Affiliates as a result of
the Transactions, including the Offer and the Merger. None of the payments
contemplated by the Company Plans would, individually or in the aggregate,
constitute excess parachute payments (as defined in Section 280G of the Code
(without regard to subsection (b)(4) thereof)).
(f) None of the Company Plans is subject to Title IV of ERISA and none of
the Company Plans is a multiemployer plan (as defined in Section 3(37) of
ERISA).
SECTION 4.11 Litigation. Except as set forth in Section 4.11 of the Company
------------
Disclosure Letter, there are (i) no continuing Orders, to which the Company or
any Company Subsidiary is a party or by which any of their respective properties
or assets are bound or to
24
which any of their respective directors, officers, employees or agents, in such
capacities, is a party or by which any of their respective properties or assets
are bound, and (ii) no Proceedings pending and for which service of process has
been made against the Company or any Company Subsidiary or against any of their
respective directors, officers, employees or agents, in such capacities or, to
the knowledge of the Company, threatened or pending against the Company or any
Company Subsidiary, or against any of their respective directors, officers,
employees or agents, at law or in equity, or before or by any Governmental
Entity. There are no Proceedings pending or, to the knowledge of the Company,
threatened against the Company or any Company Subsidiary which may call into
question the validity or hinder the enforceability or performance of this
Agreement or any of the Transaction Agreements, and, to the knowledge of the
Company, there has occurred no event, and there does not exist any condition or
state of facts, on the basis of which any such claim may be asserted.
SECTION 4.12 Compliance with Applicable Laws.
(a) The business of the Company and each Company Subsidiary has been and
is being conducted in compliance in all material respects with all Applicable
Laws and Orders, including, without limitation, ERISA, all Applicable Laws and
Orders relating to antitrust or trade regulation, employment practices and
procedures and the health and safety of employees. Except as set forth in
Section 4.12(a) of the Company Disclosure Letter, none of the Company or the
- ---------------
Company Subsidiaries has, since December 31, 1997, been subject to any Order
with respect to any of the foregoing or received any notice, demand letter,
inquiry or formal complaint or claim with respect to any of the foregoing or the
enforcement of any of the foregoing, nor has the Company or any Company
Subsidiary been the subject of any criminal Proceedings or convicted of any
felony or misdemeanor.
(b) The Company and the Company Subsidiaries employ the number of full-
time and part-time employees as are indicated in Section 4.12(b) of the Company
---------------
Disclosure Letter. Except as set forth in Section 4.12(b) of the Company
---------------
Disclosure Letter: (i) none of the Company or any of the Company Subsidiaries is
delinquent in payments to any of its employees for any wages, salaries,
commissions, fees, bonuses or other direct compensation for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees; (ii) there are no charges of employment discrimination, retaliation,
or unfair labor practices or strikes, slowdowns, stoppages of work, or any other
concerted interference with normal operations existing, pending or, to the
knowledge of the Company, threatened against or involving the Company or any of
the Company Subsidiaries; and (iii) there are no claims or charges relating to
or alleging violations of any Applicable Laws and Orders, including, without
limitation, ERISA, all Applicable Laws and Orders relating to antitrust or trade
regulation, employment practices and procedures and the health and safety of
employees, existing, pending or, to the knowledge of the Company, threatened
against the Company or any of the Company Subsidiaries nor, to the knowledge of
the Company, has there occurred any event nor does there exist any condition on
the basis of which any such claim is reasonably likely to be asserted.
SECTION 4.13 Contracts; Debt Instruments.
(a) Except as disclosed in Section 4.13(a) or 4.15(h) of the Company
--------------- -------
Disclosure Letter, there are no Material Contracts relating to the business of
the Company. Neither the
25
Company nor any of the Company Subsidiaries is in violation of or in default
under (nor does there exist any condition which with the passage of time or the
giving of notice or both would cause such a violation of or default under) any
Material Contract to which it is a party or by which it or any of its properties
or assets is bound, except for violations or defaults that have not and could
not, individually or in the aggregate, reasonably be expected to result in a
Company Material Adverse Effect. Each Material Contract is in full force and
effect, and is a legal, valid and binding obligation of the Company or a Company
Subsidiary and, to the knowledge of the Company, each of the other parties
thereto, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and general principles of equity (regardless of whether considered in a
proceeding in equity or at law). No condition exists or event has occurred which
(whether with or without notice or lapse of time or both) would constitute a
default by the Company or a Company Subsidiary or, to the knowledge of the
Company, any other party thereto under any Material Contract or result (other
than due to consummation of the Offer or the Merger) in a right of termination
of any Material Contract.
(b) Set forth in Section 4.13(b) of the Company Disclosure Letter is (i) a
---------------
list of all loan or credit agreements, notes, bonds, mortgages, indentures and
other agreements and instruments pursuant to which any Indebtedness of the
Company or the Company Subsidiaries in an aggregate principal amount in excess
of $150,000 is outstanding or may be incurred, and (ii) the respective principal
amounts currently outstanding thereunder.
(c) Except as disclosed in Section 4.13(c) of the Company Disclosure
---------------
Letter, neither the Company nor any of the Company Subsidiaries has entered into
any Contract and there is no commitment, judgment, injunction, Order or decree
to which the Company or any Company Subsidiary is a party or subject to that has
or could reasonably be expected to have the effect of prohibiting or impairing
the conduct of business by the Company or any Company Subsidiary or any Contract
that may be terminable as a result of Parent's status as a competitor of any
party to such Contract or arrangement. Except as disclosed in Section 4.13(c) of
---------------
the Company Disclosure Letter, the Company and the Company Subsidiaries have not
entered into any Contract under which the Company or any Company Subsidiary is
restricted from selling, licensing or otherwise distributing any of their
respective technology or products to, or providing services to, customers or
potential customers or any class of customers, in any geographic area, during
any period of time or in any segment of the market or line of business.
SECTION 4.14 Company Rights Agreement. The Company has taken all necessary
action, including, without limitation, amending the Company Rights Agreement
with respect to all of the outstanding Company Rights, (a) to render the Company
Rights Agreement inapplicable to this Agreement, the Offer, the Merger and the
other Transactions (including the execution of the Stock Option and Tender
Agreements), (b) to ensure that in connection with the Merger, the Offer and the
Transactions that (i) Parent and Sub, or either of them, are not deemed to be an
Acquiring Person (as defined in the Company Rights Agreement) pursuant to the
Company Rights Agreement and (ii) no "Share Acquisition Date," "Section
11(a)(ii) Trigger Date" or "Section 13 Event" (as such terms are defined in the
Company Rights Agreement) occurs by reason of the execution and delivery of this
Agreement or the consummation of the Offer, the Merger or other Transactions
(including the execution of the Stock Option and Tender Agreements) and (c) so
that the Company will have no obligations under the Company Rights or
26
the Company Rights Agreement in connection with the Offer, the Merger or the
Transactions and the holders of Company Common Stock and the associated Company
Rights will have no rights under the Company Rights or the Company Rights
Agreement in connection with the Offer, the Merger or the Transactions
(including the execution of the Stock Option and Tender Agreements) (the "Rights
Plan Amendment"). The Company Rights Agreement, as so amended, has not been
further amended or modified. Copies of all such amendments to the Company Rights
Agreement have been and will be provided to Parent and its counsel for their
approval prior to the adoption of any such amendments.
SECTION 4.15 Intellectual Property.
(a) Section 4.15(a) of the Company Disclosure Letter is a complete and
---------------
accurate list of all Registered Intellectual Property Rights and specifies,
where applicable, the jurisdictions in which each such item of Registered
Intellectual Property Rights has been issued or registered.
(b) Section 4.15(b) of the Company Disclosure Letter is a complete and
---------------
accurate list (by name and version number) of all current products or service
offerings of the Company or any of the Company Subsidiaries. Such list set forth
in Section 4.15(b) of the Company Disclosure Letter, together with any products
---------------
or service offerings of the Company or any Company Subsidiary that have been
distributed or provided in the two year period preceding the date hereof or
which are intended to be distributed in the future or are under development are
referred to herein as the "Company Products".
----------------
(c) The Company and the Company Subsidiaries own, or are validly licensed
or otherwise have the enforceable right to use, all Material Intellectual
Property Rights that are currently used in the conduct of the business of the
Company and the Company Subsidiaries. The Company has sole and exclusive rights
(and is not contractually obligated to pay any compensation to any third party
in respect thereof) to the use of all the Material Intellectual Property Rights
or the material covered thereby in connection with the services or products in
respect of which the Material Intellectual Property Rights are being used.
Without limiting the foregoing: (i) the Company owns or has a license to use all
trade names, logos, common law and statutory trademarks and service marks used
in connection with the operation or conduct of the business of the Company and
the Company Subsidiaries, including the sale, distribution or provision of any
Company Products by the Company or the Company Subsidiaries and (ii) the Company
owns or has a license to use all copyrighted works that are Company Products and
used in connection with the operation or conduct of the business of the Company
and the Company Subsidiaries, including the sale, distribution or provision of
any Company Products by the Company or the Company Subsidiaries.
(d) No claims with respect to any Intellectual Property Rights owned or
used by the Company and the Company Subsidiaries have been asserted or are
threatened in writing by any Person, and to the knowledge of the Company there
is no basis for any Person to make any claim, (i) to the effect that the sale,
licensing or use of any of the Company Products as now manufactured, sold or
licensed or used or proposed for manufacture, use, sale or licensing by the
Company or any of the Company Subsidiaries infringes on any Intellectual
Property Rights of another Person, (ii) against the use by the Company or any of
the Company Subsidiaries of any Intellectual Property Rights of another Person,
(iii) challenging the ownership by the Company
27
or any of the Company Subsidiaries or the validity of any of Intellectual
Property Rights owned or used by the Company or any of the Company Subsidiaries,
or (iv) to the effect that the Company or any Company Subsidiary is engaged in
any unfair competition or trade practices under any jurisdiction, except claims
which have not had and could not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. To the Company's knowledge,
there is no material unauthorized use, infringement or misappropriation of any
of the Intellectual Property Rights owned or used by the Company and the Company
Subsidiaries by any third party, including, without limitation, any employee or
former employee of the Company or any of the Company Subsidiaries, which has had
or could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. No Intellectual Property Rights owned or used
by the Company and the Company Subsidiaries or Company Product is subject to any
Proceeding or outstanding Order restricting in any manner the use, licensing or
transfer thereof by the Company or any of the Company Subsidiaries or which may
affect the validity, enforceability or use of such Intellectual Property Rights,
except to the extent any such restriction has not had and could not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
(e) To the Company's knowledge and except as set forth in Section 4.15(e)
---------------
of the Company Disclosure Letter, each material item of Registered Intellectual
Property Rights is valid and subsisting, all necessary registration, maintenance
and renewal fees currently due in connection with such Registered Intellectual
Property Rights have been made and all necessary documents, recordations and
certificates in connection with such Registered Intellectual Property Rights
have been filed with the relevant patent, copyright, trademark or other
Governmental Entity, as the case may be, for the purposes of maintaining such
Registered Intellectual Property Rights in the ordinary and usual course of the
Company's or any Company Subsidiary's business.
(f) Except as set forth in Section 4.15(f) of the Company Disclosure
---------------
Letter, neither the Company nor any Company Subsidiary has knowingly permitted
the Company's rights in any Material Intellectual Property Rights to lapse or
enter the public domain.
(g) Section 4.15(g) of the Company Disclosure Letter lists all Material
---------------
Contracts to which the Company or any Company Subsidiary is a party: (i) with
respect to Company Intellectual Property Rights licensed or transferred to any
third party (other than end-user licenses in the ordinary and usual course of
business); or (ii) pursuant to which a third party has licensed or transferred
any Material Intellectual Property Rights to the Company or any Company
Subsidiary (other than end-user licenses in the ordinary and usual course of
business). Except as set forth in Section 4.15(g) of the Company Disclosure
---------------
Letter, all Material Contracts relating to either (i) the Company Intellectual
Property Rights or (ii) Intellectual Property Rights of a third party licensed
to the Company or any Company Subsidiary, are in full force and effect. Except
as set forth in Section 4.15(g) of the Company Disclosure Letter, the
---------------
consummation of the Offer, the Merger and the other Transactions and compliance
with the terms hereof and thereof will not, conflict with, or result in any
violation or default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any Person
under, or result in the creation of any Lien (other than Permitted Liens) upon
any of the properties or assets of the Company or any Company
28
Subsidiary under such Material Contracts. To the Company's knowledge, it and
each of its Subsidiaries is in compliance with, and has not materially breached
any term of any such Material Contracts and, to the knowledge of Company, all
other parties to such Material Contracts are in compliance with, and have not
materially breached any term of, such Material Contracts. Except with respect to
the nontransferable Contracts listed in Section 4.15(g) of the Company
---------------
Disclosure Letter, following the Closing Date, the Surviving Corporation will be
permitted to exercise all of the Company's rights under such Contracts to the
same extent the Company and the Company Subsidiaries would have been able to had
the Transactions not occurred and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments that the Company
would otherwise be required to pay. Neither this Agreement nor the Transactions,
including the assignment to Parent or Sub by operation of law or otherwise of
any Contracts to which any Company Subsidiary is a party, will result in (i)
either Parent's or the Sub's granting to any third party any right to or with
respect to any Material Intellectual Property Rights owned by, or licensed to,
either of them, (ii) either Parent or Sub being bound by, or subject to, any
non-compete or other material restriction on the operation or scope of their
respective businesses, or (iii) either Parent or Sub being obligated to pay any
royalties or other material amounts to any third party in excess of those
otherwise payable by the Company or any of its Subsidiaries.
(h) The Company and each of its Subsidiaries have taken reasonable steps
under the relevant circumstances to protect their respective rights in the
confidential information and trade secrets that they wish to protect or any
trade secrets or confidential information of third parties provided to the
Company or any of the Company Subsidiaries.
(i) The Company and each Company Subsidiary have received Valid Consents
(as defined below) from all Persons who have provided personal information,
which are sufficient to give the Company or any Company Subsidiary the right to
use such personal information for the purposes of conducting the Company's or
any Company Subsidiary's current activities, and the Company's or any Company
Subsidiary's future activities to the extent such future activities are already
planned. For the purposes of this Section 4.15(i), "Valid Consents" shall mean
--------------- --------------
consents obtained from persons aged 18 and over, using only the Company's "True-
Opt-In" or double opt-in method by which the persons providing personal
information to the Company or any Company Subsidiary have both (a) indicated
their consent by checking a box which signifies his or her desire to have his or
her personal information registered with the site and used by the Company or any
Company Subsidiary, and (b) thereafter responded to a confirmatory e-mail
message to signify his or her desire to have his or her personal information
registered with the site and used by the Company or any Company Subsidiary. To
the knowledge of the Company and each Company Subsidiary, the Company and its
Subsidiaries have not used any personal information without or beyond the scope
of a Valid Consent. The Company and each Company Subsidiary have placed all
personal information relating to Persons who have signified that they do not
grant or later revoke a Valid Consent in an unsubscribed archive file where such
data is stored but not used by the Company or any Company Subsidiary. The
Company and each Company Subsidiary have not collected and do not maintain any
personal information about persons outside the United States in violation of any
Applicable Law.
(j) Except as disclosed in Section 4.15(j) of the Company Disclosure
---------------
Letter, all personnel, including, without limitation, employees, agents,
consultants and contractors, who
29
have contributed to or participated in any material respect in the conception
and development of the Company's Intellectual Property have executed
nondisclosure agreements in the form set forth in Section 4.15(j) of the Company
---------------
Disclosure Letter and either (i) have been a party to a "work-for-hire"
arrangement or agreements with the Company or a Company Subsidiary in accordance
with Applicable Law that has accorded the Company or any Company Subsidiary
full, effective, exclusive and original ownership of all tangible and intangible
property thereby arising, or (ii) have executed appropriate instruments of
assignment in favor of the Company or any Company Subsidiary as assignee that
have conveyed to the Company or any Company Subsidiary effective and exclusive
ownership of all tangible and intangible property thereby arising.
(k) The Company and the Company Subsidiaries use commercially reasonable
efforts to regularly scan its software programs and the Material Intellectual
Property with "best-in-class" virus detection software. As of the date hereof,
to the Company's knowledge, the Company's software programs and other Material
Intellectual Property Rights of the Company contain no Viruses. For the purposes
of this Agreement, "Virus" means any computer code intentionally designed to
-----
disrupt, disable or harm in any manner the operation of any software or
hardware. None of the foregoing contains any worm, bomb, backdoor, clock, timer
or other disabling device code, design or routine which causes the software to
be erased, inoperable or otherwise incapable of being used, either automatically
or upon command by any party.
SECTION 4.16 Takeover Laws. The Company's Board of Directors has taken all
action necessary to ensure that Section 203 of the DGCL will not impose any
additional procedural, voting, approval, fairness or other restrictions on the
timely consummation of the Transactions or restrict, impair or delay the ability
of Parent to engage in any transaction with the Company or to vote or otherwise
exercise all rights as a stockholder of the Company. No other "fair price,"
"moratorium," "control share acquisition" or other anti-takeover statute or
regulation of any Governmental Entity (together with Section 203 of the DGCL,
each individually referred to as a "Takeover Statute") is applicable to the
----------------
Company or the Transactions.
SECTION 4.17 Affiliate Transactions. There are no loans, leases or other
Contracts between the Company or any of the Company Subsidiaries and any present
or former stockholder, director or officer thereof or any member of such
officer's, director's or stockholder's family, or any Person controlled by such
officer, director or stockholder or his or her family, including, without
limitation, any transaction that would be disclosable pursuant to Item 404 of
SEC Regulation S-K. No director or officer of the Company or any of the Company
Subsidiaries nor any of their respective spouses or family members, owns
directly or indirectly on an individual or joint basis any interest in, or
serves as an officer or director or in another similar capacity of, any supplier
or other independent contractor of the Company or any of the Company
Subsidiaries, or any Person that has a Contract with the Company or any of the
Company Subsidiaries.
SECTION 4.18 Real Property. (a) Neither the Company nor any Company
Subsidiary owns any real property. The Company and each Company Subsidiary has
valid leasehold interests in all real properties used or occupied by them,
except for such as are no longer used or useful in the conduct of its businesses
or as have been disposed of in the ordinary and usual course of business and
except for encumbrances or impediments that, in the aggregate, do not
30
and will not materially interfere with its ability to conduct its business as
currently conducted. Neither the Company nor any Company Subsidiary has an
option to purchase any real property. All of the real property leased by the
Company and each of the Company Subsidiaries is identified in Section 4.18(a) of
---------------
the Company Disclosure Letter (herein referred to as the "Company Leased Real
-------------------
Property").
- --------
(b) Status of Leases. All leases of the Company Leased Real Property are
identified in Section 4.18(b) of the Company Disclosure Letter, and true and
---------------
complete copies thereof have been delivered to Parent. Each of said leases has
been duly authorized and executed by the Company or the Company Subsidiary party
thereto, is in full force and effect and constitutes the legal, valid and
binding obligation of the Company or the Company Subsidiary party thereto, and
is enforceable in accordance with its respective terms. The Company or the
Company Subsidiary party thereto has not received notice of any default under
any of said leases, nor has any event occurred which, with notice or the passage
of time, or both, would give rise to such a default. To the knowledge of the
Company, the other party to each of said leases is not in default under any of
said leases and there is no event which, with notice or the passage of time, or
both, would give rise to such a default.
(c) Condition of Real Property. Except as set forth in Section 4.18(c) of
---------------
the Company Disclosure Letter, all premises constituting a part of the Company
Leased Real Property are in good operating condition and repair, have been well
maintained and there are no material defects in the physical condition of any
land, buildings or improvements constituting part of the Company Leased Real
Property.
SECTION 4.19 Insurance. No notice of cancellation or termination has been
received by the Company or any Company Subsidiary with respect to any insurance
policy. The Company and each Company Subsidiary carry insurance in amounts and
types of coverage which are adequate and customary in the industry and against
risks and losses which are usually insured against by Persons holding or
operating similar properties and similar businesses. No claims have been
asserted by the Company or any Company Subsidiary under any of the insurance
policies of the Company or any Company Subsidiary or relating to their
properties, assets or operations. Each such insurance policy shall continue to
be in full force and effect following consummation of the Transactions.
SECTION 4.20 Compensation. Section 4.20 of the Company Disclosure Letter
------------
constitutes a full and complete list of each director, officer or employee of
the Company or any Company Subsidiary whose total compensation from the Company
or the Company Subsidiaries on an annualized basis exceeds $100,000 specifying
their names and job designations, the total compensation paid or payable, the
basis of such compensation, whether fixed or commission or a combination
thereof, and their current rate of pay. Except as otherwise disclosed in Section
-------
4.20 of the Company Disclosure Letter, since December 31, 2000 there has been no
- ----
material change in compensation, by means of wages, salaries, bonuses,
gratuities or otherwise, to any such director, officer or employee of the
Company or any Company Subsidiary or any change in compensation, either material
in amount or other than in the ordinary and usual course of business, to any
other director, officer or employee of the Company or any Company Subsidiary.
31
SECTION 4.21 Privacy. The Company and each Company Subsidiary uses, and since
December 31, 1999 has always used, commercially reasonable efforts to comply
with its then-current privacy policy, including, without limitation, those
posted on Company's and each Company Subsidiary's web site(s). The Company and
each Company Subsidiary has conducted their respective businesses and used
commercially reasonable efforts to maintain its data at all times in accordance
with (i) the standards promulgated by the Online Privacy Alliance, (ii) the
standards promulgated by the Direct Marketing Association, and (iii) all
Applicable Laws, including, without limitation, those relating to the use of
information collected from or about consumers. The Company and each Company
Subsidiary are, and have always been, in compliance with their respective
customers' privacy policies, when required to do so by Contract.
SECTION 4.22 Receivables. Except for Receivables (as defined below) that are
reserved for and properly reflected on the Financial Statements, all receivables
of the Company and the Company Subsidiaries that are reflected on the most
recently filed Company SEC Documents as of the Closing Date (collectively, the
"Receivables") represent or will represent valid obligations arising from
-----------
transactions actually made or services actually performed in the ordinary and
usual course of business. Subject to such reserves and offsets for offsetting
current liability balances for the same customer, each of the Receivables either
has been collected in full, or will be collected in full, without any discount,
within 90 days after the day at which it first becomes due and payable in full.
There is no contest, claim or right of set-off, other than returns in the
ordinary and usual course of business, under any Contract with any obligor of
any Receivables relating to the amount or validity of such Receivables.
SECTION 4.23 Copies of Certain Documents. The Company has previously made
available to the Parent true and complete copies of: (i) all Contracts entered
into by the Company or any Company Subsidiary, if any, providing for any
acquisition or disposition of any businesses or products of any Person or the
Company or any Company Subsidiary; and (ii) a complete list of all investments
of the Company and the Company Subsidiaries, if any, in marketable or other
securities (whether debt or equity) for investments made in the twelve months
prior to the date hereof.
SECTION 4.24 Underlying Documents. All documents listed or described in the
Company Disclosure Letter referred to in this Agreement have previously been
furnished or made available to Parent or its representatives.
SECTION 4.25 Brokers; Fees and Expenses.
(a) No broker, investment banker, financial advisor or other Person, other
than Robertson Stephens, Inc., the fees and expenses of which will be paid by
the Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the Offer, the Merger and or any
other Transaction based upon arrangements made by or on behalf of the Company.
The amount of the fees of the Company's counsel, accountants and financial
advisors which are payable in connection with the Transactions and the estimated
amount of all other fees and expenses incurred and to be incurred by the Company
in connection with the Offer, the Merger and the other Transactions are set
forth and itemized in Section 4.25 of the Company Disclosure Letter. The Company
------------
has furnished to Parent a true and
32
complete copy of all Contracts between the Company and Robertson Stephens, Inc.
relating to the Offer, the Merger and the other Transactions.
ARTICLE V
Representations and Warranties of Parent and Sub
Parent and Sub jointly and severally represent and warrant to the Company
as follows:
SECTION 5.01 Organization, Standing and Power.
(a) Each of Parent and Sub is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and has all
requisite corporate power and authority to conduct its businesses as presently
conducted, other than such Permits the lack of which, individually or in the
aggregate, has not had and could not reasonably be expected to have a Parent
Material Adverse Effect.
SECTION 5.02 Sub. Sub is a wholly owned Subsidiary of Parent and, since the
date of its incorporation, has not carried on any business or conducted any
operations other than the execution of the Transaction Agreements to which it is
a party, the performance of its obligations hereunder and thereunder and matters
ancillary thereto.
SECTION 5.03 Financing. Parent has or has available to it, and will make
available to Sub, all funds necessary to consummate all the Transactions and pay
the related fees and expenses of Parent and Sub.
SECTION 5.04 Ownership of Company Common Stock. Except for the transactions
contemplated by the Stock Option and Tender Agreements, as of the date of this
Agreement, neither Parent nor Sub beneficially owns any Company Common Stock.
SECTION 5.05 Authorization; Validity of Agreement; Necessary Action. Each
of Parent and Sub has full corporate power and authority to execute and deliver
each Transaction Agreement to which it is a party and each agreement, document
and instrument to be executed and delivered by or on behalf of Parent and/or
Sub, as the case may be, pursuant to or in connection with the Transaction
Agreements and to consummate the Transactions. The Board of Directors of Sub
(the "Sub Board") has adopted a resolution approving this Agreement. The
---------
execution, delivery and performance by Parent and Sub of this Agreement and the
Transaction Agreements to which either is a party and the consummation of the
Transactions have been duly authorized by the Board of Directors of Parent (the
"Parent Board") and the Sub Board and by Parent as the sole stockholder of Sub
------------
and, except as set forth in the Section 5.05 of the Parent Disclosure Letter, no
------------
other corporate action on the part of Parent or Sub or any other Person is
necessary to authorize the execution and delivery by Parent and Sub of this
Agreement, any Transaction Agreement or the consummation of the Transactions.
This Agreement, assuming due and valid authorization, execution and delivery
thereof by the Company, constitutes, and when executed and delivered by the
Parent and/or Sub, as the case may be, each other Transaction Agreement will
constitute, legal, valid and binding obligations of each of Parent and Sub, as
the case may be, enforceable against each of them in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium
33
or other similar laws affecting the enforcement of creditors' rights generally
and subject to general principles of equity.
SECTION 5.06 No Conflicts; Consents. The execution and delivery by each of
Parent and Sub of each Transaction Agreement to which it is a party, do not, and
the consummation of the Offer, the Merger and the other Transactions and
compliance with the terms hereof and thereof will not, conflict with, or result
in any violation of or default (with or without notice or lapse of time, or
both) under any provision of (i) the charter or organizational documents of
Parent or Sub, (ii) any material Contract to which Parent or Sub is a party or
by which any of their respective properties or assets is bound or (iii) subject
to the filings and other matters referred to in the following sentence, any
Order or Applicable Law applicable to Parent or Sub or their respective
properties or assets, other than, in the case of clauses (ii) and (iii) above,
------------ -----
any such items that, individually or in the aggregate, have not had and could
not reasonably be expected to have a Parent Material Adverse Effect. No Consent
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Parent or Sub in
connection with the execution, delivery and performance of any Transaction
Agreement to which Parent or Sub is a party or the consummation of the
Transactions, other than (A) compliance with and filings under the HSR Act, (B)
the filing with the SEC of (x) the Offer Documents and (y) such reports under
Sections 13 and 16 of the Exchange Act as may be required in connection with
this Agreement and the other Transaction Agreements, the Offer, the Merger and
the other Transactions, (C) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (D) such filings as may be required
in connection with the taxes described in Section 7.08 and (E) such other items
------------
as are set forth in Section 5.06 of the Parent Disclosure Letter.
------------
SECTION 5.07 Information Supplied. None of the information supplied or to
be supplied in writing by Parent or Sub for inclusion or incorporation by
reference in (i) Offer Documents or the Schedule 14D-9 will, at the time such
document is filed with the SEC, at any time it is amended or supplemented or at
the time it is first published, sent or given to the Company's stockholders,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, or (ii)
the Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The Offer
Documents will comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, except that no
representation is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
SECTION 5.08 Brokers. Neither Parent nor Sub has entered into any contract,
agreement, arrangement or understanding with any Person which may result in the
obligation of Parent or Sub to pay any finder's fees, brokerage or agent's
commission or other like payments in connection with the negotiations leading to
the Transaction Agreements or consummation of the Transactions. Parent is not
aware of any claim for payment of any finder's fees, brokerage or
34
agent's commissions or other like payments against Parent or Sub in connection
with the negotiations leading to the Transaction Agreements or consummation of
the Transactions.
SECTION 5.09 Litigation. As of the date of this Agreement, there are no
Proceedings pending or, to the knowledge of Parent, threatened against Parent or
Sub which may call into question the validity or hinder the enforceability or
performance of this Agreement or any of the Transaction Agreements.
ARTICLE VI
Covenants Relating to Conduct of Business
SECTION 6.01 Conduct of Business.
(a) Conduct of Business by the Company. Except for matters (i) expressly
permitted by the Transaction Agreements, (ii) specifically identified in Section
-------
6.01 of the Company Disclosure Letter, or (iii) taken with Parent's prior
- ----
written consent, from the date of this Agreement to the Effective Time the
Company shall, and shall cause each Company Subsidiary to, conduct its
operations in the ordinary and usual course of business and use its commercially
reasonable efforts to preserve intact its current business organization, assets
and properties and keep available the services of its present officers and
employees and maintain its existing relationships with customers, suppliers,
vendors, licensors, licensees, distributors and agents and others having
business dealings with them. In addition, and without limiting the generality of
the foregoing, except for matters expressly permitted by this Agreement, from
the date of this Agreement to the Effective Time, the Company shall not, and
shall not permit any Company Subsidiary to, do any of the following without the
prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends
and distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent, (B) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, (C)
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any Company Subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities
or (D) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization of the
Company or any of the Company Subsidiaries;
(ii) authorize for issuance, issue, deliver, sell or grant (A) any
shares of its capital stock, (B) any Voting Company Debt or other voting
securities, (C) any securities convertible into or exchangeable for, or any
options, warrants or rights to acquire, any such shares, voting securities
or convertible or exchangeable securities or (D) any "phantom" stock,
"phantom" stock rights, stock appreciation rights or stock-based
performance units, other than the issuance of Company Common Stock under
the ESPP in accordance with this Agreement or upon the exercise of Company
Employee Stock
35
Options or Company Warrants outstanding on the date of this Agreement and
in accordance with their present terms;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of, or
by any other manner, any business or any Person or division thereof or (B)
any assets outside the ordinary and usual course of business;
(v) (A) grant to any present or former employee, officer or
director of the Company or any Company Subsidiary any increase in
compensation or fringe benefits, except for increases in salary for current
non-officer employees in the ordinary and usual course of business, (B)
grant to any present or former employee, officer or director of the Company
or any Company Subsidiary any increase in severance or termination pay, (C)
other than entering into employment agreements with employees of the
Company approved in advance by Parent in the ordinary and usual course of
business, enter into or amend any employment, consulting, indemnification,
severance or termination agreement with any such present or former
employee, officer or director, (D) establish, adopt, enter into or amend in
any material respect any Company Plan, (E) except as permitted or required
under Section 7.04 or Section 7.05, take any action to accelerate any
------------ ------------
rights or benefits, or make any material determinations not in the ordinary
and usual course of business, under any Company Plan, (F) loan or advance
money or other property to any present or former employees, officers or
directors of the Company or (G) except as permitted or required under
Section 7.04 or Section 7.05, grant any new, or amend any existing, Company
------------ ------------
Employee Stock Option or enter into any agreement under which any Company
Employee Stock Option would be required to be issued;
(vi) make any change in accounting methods, principles or practices
affecting the reported consolidated assets, liabilities or results of
operations of the Company, except insofar as may have been required by a
change in GAAP;
(vii) sell, lease, license or otherwise dispose of or permit to
become subject to any Lien, other than a Permitted Lien, any properties or
assets, tangible or intangible;
(viii) (A) incur any Indebtedness or guarantee any Indebtedness of
another Person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any Company
Subsidiary, guarantee any debt securities of another Person, enter into any
"keep well," support or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, except for short-term borrowings
incurred in the ordinary and usual course of business, or (B) make any
loans, advances or capital contributions to, or investments in, any other
Person, other than to or in the Company or any direct or indirect wholly
owned subsidiary of the Company or to customers of the Company or a Company
Subsidiary in the ordinary and usual course of business;
36
(ix) make or agree to make any new capital expenditure or
expenditures that, individually, is in excess of $150,000 or, in the
aggregate, are in excess of $500,000;
(x) make any Tax election or settle or compromise any Tax
liability or refund;
(xi) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
and usual course of business or in accordance with their terms, of liabilities
reflected or reserved against in the most recent consolidated financial
statements of the Company included in the Filed SEC Documents or incurred in the
ordinary and usual course of business, (B) cancel any material Indebtedness
(individually or in the aggregate) or waive any claims or rights of substantial
value or (C) waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or any
Company Subsidiary is a party;
(xii) (A) amend any Material Contract or Contract providing for
payments or otherwise involving amounts in excess of $150,000 or, except in
the ordinary and usual course of business, enter into any Material
Contract, (B) waive, release or assign any material right or claim, or (C)
license any Material Intellectual Property Right to or from any third
party;
(xiii) initiate, compromise or settle any Proceeding;
(xiv) close any facility or office; or
(xv) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Other Actions. The Company shall not, and shall not permit any Company
Subsi diary to, take any action that would, or that could reasonably be expected
to, result in (i) any of the representations and warranties of the Company set
forth in any Transaction Agreement becoming untrue or (ii) any condition to the
Offer set forth in Exhibit A or any condition to the Merger set forth in Article
--------- -------
VIII not being satisfied.
- ----
(c) Advice of Changes.
(i) The Company shall promptly advise Parent orally and in writing
of any change or event having, or which, insofar as can reasonably be
foreseen, would have, a Company Material Adverse Effect.
(ii) After the date hereof, the Company shall have the continuing
obligation promptly to inform Parent in writing, and shall use its
reasonable best efforts to prevent, or promptly remedy (i) any matter
hereafter arising or discovered which would have been required to be
set forth or described in the Company Disclosure Letter or would have
been required to be taken as an exception to any representation or
warranty of the Company in order for the representations and warranties
of the Company to be true and correct at and as of the times such
representations and warranties are required to be true and correct in
accordance with this Agreement or (ii) the failure by it to comply with
or
37
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under any Transaction Agreement; provided,
--------
however, that no such notification supplied to Parent shall be deemed to
-------
amend or supplement the Company Disclosure Letter or to correct or cure any
breach of any representations, warranties, covenants, agreements or
conditions of the Company made under any Transaction Agreement.
SECTION 6.02 No Solicitation.
(a) From the date of this Agreement until the earlier of the Effective
Time or the termination of this Agreement, the Company and the Company
Subsidiaries shall not (and the Company will not permit any of its or any of its
Company Subsidiaries' officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its Subsidiaries to), directly or indirectly, (i) solicit, encourage,
engage in discussions or negotiate with any Person (whether such discussions or
negotiations are initiated by the Company or otherwise) or take any other action
intended or designed to facilitate any inquiry or effort of any Person (other
than Parent) relating to any possible acquisition of the Company (whether by way
of merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its capital stock or assets (with any such efforts by any
such Person, including a firm proposal to make such an acquisition, to be
referred to as an "Alternative Acquisition"), (ii) provide information with
-----------------------
respect to the Company to any Person, other than Parent, relating to a possible
Alternative Acquisition by any Person, other than Parent, (iii) enter into an
agreement with any Person, other than Parent, providing for a possible
Alternative Acquisition, or (iv) make or authorize any statement, recommendation
or solicitation in support of any possible Alternative Acquisition by any
Person, other than by Parent. Notwithstanding the foregoing, prior to the
acceptance for payment of Company Common Stock pursuant to, and subject to the
conditions of, the Offer, the Company Board (or any committee thereof) may, to
the extent required by the fiduciary obligations of the Company Board under
Delaware law, as determined in good faith by the Company Board (or any committee
thereof), in response to a proposal for an Alternative Acquisition ("Alternative
-----------
Acquisition Proposal") that the Company Board (or any committee thereof)
- --------------------
determines, in good faith after consultation with independent counsel and an
independent financial advisor, is or is reasonably likely to result in a
Superior Company Proposal (as defined in Section 6.02(e)), that was not
----------------
solicited by the Company and that did not otherwise result from a breach of this
Section 6.02(a) and subject to providing prior written notice of its decision to
- ---------------
take such action to Parent, (x) furnish information with respect to the Company
to the Person making such Alternative Acquisition Proposal and its
representatives pursuant to a confidentiality agreement with terms not
materially more favorable to the Person making the Alternative Acquisition
Proposal than those applicable to Parent under the Confidentiality Agreement and
(y) participate in discussions and negotiations with such Person and its
representatives to the extent required by the fiduciary duties of the Company
Board regarding such Alternative Acquisition Proposal. The Company shall, and
shall cause its representatives to, cease immediately all discussions and
negotiations that may have occurred prior to the date of this Agreement
regarding any proposal that constitutes, or may reasonably be expected to lead
to, an Alternative Acquisition Proposal. For purposes of this Section 6.02 and
-------------
Section 9.02(b)(ii), the term "Person" shall include any "group" as defined in
- -------------------
Section 13(a)(3) of the Exchange Act. Without limiting the foregoing, it is
- ----------------
understood that any violation of the restrictions set forth in this Section 6.02
------------
by any director,
38
officer or employee of the Company or any of its subsidiaries or any investment
banker, financial advisor, attorney, accountant or other representative of the
Company or any Company Subsidiary shall be deemed to be a breach of this Section
-------
6.02 by the Company.
- ----
(b) Neither the Company Board nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Parent or
Sub, the approval or recommendation by the Company Board or any such committee
of this Agreement, the Offer or the Merger, (ii) approve or cause or permit the
Company to enter into any letter of intent, agreement in principle, definitive
agreement or similar agreement constituting or relating to, or which is intended
to or is reasonably likely to lead to any Alternative Acquisition Proposal,
(iii) approve or recommend, or propose to approve or recommend, any Alternative
Acquisition Proposal or (iv) agree or resolve to take actions set forth in
clauses (i), (ii) or (iii) of this sentence. Notwithstanding the foregoing, if,
- ----------- ---- -----
during the period prior to the acceptance for payment of the Company Common
Stock pursuant to the Offer, the Company Board receives a Superior Company
Proposal and the Company Board determines, in good faith after consultation with
independent counsel, that it is necessary to do so in order to comply with its
fiduciary obligations under Delaware law, the Company Board may, during such
period, in response to a Superior Company Proposal that was unsolicited and did
not otherwise result from a breach of Section 6.02(a), withdraw or modify its
---------------
approval or recommendation of the Offer, the Merger and this Agreement and, in
connection therewith, approve or recommend such Superior Company Proposal.
(c) The Company promptly, and in any event within 24 hours, shall advise
Parent orally and in writing of any Alternative Acquisition Proposal or any
inquiry with respect to or that could lead to any Alternative Acquisition
Proposal, the identity of the Person making any such Alternative Acquisition
Proposal or inquiry and the material terms of any such Alternative Acquisition
Proposal or inquiry. The Company shall (i) keep Parent reasonably informed of
the status, including any change to the details, of any such Alternative
Acquisition Proposal or inquiry and (ii) provide to Parent as soon as
practicable after receipt or delivery thereof with copies of all material
correspondence and other written material sent or provided to the Company from
any third party in connection with any Alternative Acquisition Proposal or sent
or provided by the Company to any third party in connection with any Alternative
Acquisition Proposal.
(d) Nothing contained in this Section 6.02 shall prohibit the Company from
------------
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's stockholders if, in the good faith judgment of the
Company Board after consultation with independent counsel, failure so to
disclose could be inconsistent with its obligations under Applicable Law.
Notwithstanding the foregoing, except as set forth in Section 6.02(b), in no
---------------
event shall the Company Board or any committee thereof withdraw or modify, or
propose to withdraw or modify its position with respect to this Agreement, the
Offer or the Merger or adopt, approve or recommend, or propose to adopt, approve
or recommend any Alternative Acquisition Proposal.
(e) For purposes of this Agreement, "Superior Company Proposal" means any
-------------------------
proposal made by a third party to acquire all or substantially all the equity
securities or assets of the Company, or other transaction for the acquisition of
all or substantially all the equity securities or assets of the Company through
a tender or exchange offer, a merger, a
39
consolidation, a liquidation or dissolution, a recapitalization, a sale or a
joint venture, (i) that is not subject to a financing contingency, (ii) that is
on terms which the Company Board determines in its good faith judgment (after
consultation with an independent financial adviser, with only customary
qualifications, and independent legal counsel) to be superior for the holders of
the Company Common Stock, from a financial point of view, to the Offer and the
Merger, taking into account all the terms and conditions of such proposal and
this Agreement (including any proposal made by Parent to amend the terms of this
Agreement, the Offer and the Merger) taking into account the likelihood of
consummation in light of all financial, regulatory, legal and other aspects of
such proposal (including, without limitation, any antitrust or competition law
approvals or non-objections).
(f) The Company and the Company Board shall not (i) redeem the Company
Rights under the Company Rights Agreement, or (ii) waive or amend any provision
of the Company Rights Agreement, in any such case to permit or facilitate the
consummation of any Alternative Acquisition Proposal, unless this Agreement has
been terminated in accordance with its terms.
ARTICLE VII
Additional Agreements
SECTION 7.01 Preparation of Proxy Statement; Stockholders Meeting.
(a) If the approval of this Agreement by the Company's stockholders is
required by Applicable Law, the Company shall, as soon as practicable following
the expiration of the Offer, prepare in accordance with the rules and
regulations of the SEC and file with the SEC the Proxy Statement in preliminary
form, and each of the Company and Parent shall use its reasonable best efforts
to respond as promptly as practicable to any comments of the SEC with respect
thereto. The Company shall notify Parent promptly of the receipt of any comments
from the SEC or its staff and of any request by the SEC or its staff for
amendments or supplements to the Proxy Statement or for additional information
and shall supply Parent with copies of all correspondence between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to the Proxy Statement. If at any time prior to receipt
of Company Stockholder Approval there shall occur any event that should be set
forth in an amendment or supplement to the Proxy Statement, the Company shall
promptly prepare and mail to its stockholders such an amendment or supplement.
The Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects. The Company shall use its
reasonable best efforts to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after filing with the SEC.
(b) If the approval of this Agreement by the Company's stockholders is
required by Applicable Law, the Company shall, as soon as practicable following
the expiration of the Offer, duly call, give notice of, convene and hold the
Company Stockholders Meeting for the purpose of seeking Company Stockholder
Approval. The Company shall, through the Company Board, recommend to its
stockholders that they approve this Agreement and the Merger, except to the
extent that the Company Board shall have withdrawn or modified its approval or
recommendation of this Agreement, the Offer or the Merger as permitted by
Section 6.02(b). Notwithstanding the foregoing, if Sub or any other Subsidiary
- ---------------
of Parent shall acquire at least
40
90% of the outstanding shares of Company Common Stock, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a stockholders meeting in accordance with Section 253 of the DGCL.
(c) Parent shall cause all shares of Company Common Stock purchased
pursuant to the Offer and all other shares of Company Common Stock owned by Sub
or any other Subsidiary of Parent to be voted in favor of the approval of this
Agreement and the Merger.
SECTION 7.02 Access to Information; Confidentiality.
(a) The Company shall, and shall cause each of the Company Subsidiaries
to, afford to Parent, and to Parent's officers, employees, accountants, counsel,
financial advisers and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, Contracts, commitments, personnel and records and,
during such period, the Company shall, and shall cause each of the Company
Subsidiaries to, furnish promptly to Parent (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of Federal or state securities laws and (ii) all
other information concerning its business, properties and personnel as Parent
may reasonably request. Without limiting the generality of the foregoing, the
Company shall, within two business days of request therefor, provide to Parent
the information described in Rule 14a-7(a)(2)(ii) under the Exchange Act and any
information to which a holder of Company Common Stock would be entitled under
Section 220 of the DGCL (assuming such holder met the requirements of such
section). All information exchanged pursuant to this Section 7.02 shall be
------------
subject to the Confidentiality Agreement and the Confidentiality Agreement shall
remain in full force and effect in accordance with its terms.
(b) Except as otherwise provided in the Confidentiality Agreement, prior
to the Effective Time and after any termination of this Agreement, each party
hereto will hold, and will use its best efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of Applicable Law, all confidential documents
and information concerning other parties hereto furnished to it or its
Affiliates in connection with the Transactions, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by such party, (ii) in the public domain through no fault of such party or
(iii) later lawfully acquired by such party from sources other than other
parties to this Agreement; provided that each party may disclose such
--------
information to its Parent and the Company shall be responsible for a breach of
this Section 7.02(b) by any of their respective officers, directors, employees,
accountants, counsel, consultants, representatives, advisors and agents.
officers, directors, employees, accountants, counsel, consultants,
representatives, advisors and agents in connection with the Transactions so long
as such party informs such Persons of the confidential nature of such
information and directs them to treat it confidentially. Each party shall
satisfy its obligation to hold any such information in confidence if it
exercises the same care with respect to such information as it would take to
preserve the confidentiality of its own similar information. If this Agreement
is terminated, each party will, and will use its best efforts to cause its
officers, directors, employees, accountants, counsel, consultants,
representatives, advisors and agents to, destroy or deliver to the other party,
upon request, all documents and other materials, and all copies thereof, that it
or its Affiliates obtained, or that were obtained on their behalf, from the
other party in connection with this Agreement and that are subject to such
confidence. Each of
41
Parent and the Company shall be responsible for a breach of this Section 7.02(b)
---------------
by any of their respective officers, directors, employees, accountants, counsel,
consultants, representatives, advisors and agents.
SECTION 7.03 Commercially Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties shall use their respective commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Offer, the Merger and the other
Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all
reasonable steps as may be necessary to obtain any necessary approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity,
including, without limitation, under the HSR Act, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or any other Transaction Agreement or the
consummation of the Transactions, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the Transactions and to fully carry out the
purposes of the Transaction Agreements. In connection with and without limiting
the foregoing, the Company and the Company Board shall (A) take all commercially
reasonable action necessary to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to any Transaction or this
Agreement or any other Transaction Agreement, and (B) if any state takeover
statute or similar statute or regulation becomes applicable to this Agreement or
any other Transaction Agreement, take all commercially reasonable action
necessary to ensure that the Offer, the Merger and the other Transactions may be
consummated as promptly as practicable on the terms contemplated by the
Transaction Agreements and otherwise to minimize the effect of such statute or
regulation on the Offer, the Merger and the other Transactions.
(b) Notwithstanding anything to the contrary in this Agreement, (i) the
Company shall not, without Parent's prior written consent, commit to any
divestitures, licenses, hold separate arrangements or similar matters,
including, without limitation, covenants affecting business operating practices
(or allow its Subsidiaries to commit to any divestitures, licenses, hold
separate arrangements or similar matters), and the Company shall commit to, and
shall use its reasonable best efforts to effect (and shall cause its
Subsidiaries to commit to and use their reasonable best efforts to effect), any
such divestitures, licenses, hold separate arrangements or similar matters as
Parent shall request, but solely if such divestitures, licenses, hold separate
arrangements or similar matters are contingent on consummation of the Offer and
(ii) neither Parent nor any of its Subsidiaries shall be required to agree (with
respect to (A) Parent or its Subsidiaries or (B) the Company or its
Subsidiaries) to any divestitures, licenses, hold separate arrangements or
similar matters, including, without limitation, covenants affecting business
operating practices.
42
(c) The Company and Parent each shall keep the other apprised of the
status of matters relating to completion of the transactions contemplated by the
Transaction Agreements, including promptly furnishing the other with copies of
notice or other communications received by Parent or the Company, as the case
may be, or any of its Subsidiaries, from any Governmental Entity with respect to
Transactions.
SECTION 7.04 Company Employee Stock Options and Company Warrants.
(a) As soon as practicable following the date of this Agreement, the
Company Board (or, if appropriate, any committee administering the Company
Option Plans) shall adopt, or shall cause to be adopted, such resolutions or
take, or cause to be taken, all such other actions as are required to adjust the
terms of all outstanding Company Employee Stock Options heretofore granted under
any Company Option Plan or otherwise, to provide that each Company Employee
Stock Option outstanding immediately prior to the Effective Time, to the extent
then vested and exercisable in accordance with its terms, shall be canceled as
of the Effective Time in exchange for a cash payment by the Company to be made
on the date following the Effective Time (or as soon as practicable thereafter)
of an amount equal to (i) the excess, if any, of (A) the price per share of
Company Common Stock to be paid pursuant to the Offer over (B) the exercise
price per share of Company Common Stock subject to such Company Employee Stock
Option, multiplied by (ii) the number of shares of Company Common Stock for
which such Company Employee Stock Option shall not theretofore have been
exercised. Any Company Employee Stock Option for which the calculation in the
preceding sentence results in an amount equal to zero or a negative amount shall
be canceled as of the Effective Time in exchange for a cash payment equal to
zero.
(b) As soon as practicable after the date of this Agreement, the Company
Board (or, if appropriate, the committee administering the Company 1999 Stock
Plan) shall adopt, or shall cause to be adopted, such resolutions or take, or
cause to be taken, all such other actions as are required to adjust the terms of
all outstanding Company Employee Stock Options heretofore granted under the
Company 1999 Stock Plan to provide that such options which are held by
individuals who are employed by the Company as of the Effective Time will become
fully vested as of the Effective Time to the extent that such Company Employee
Stock Options would have become vested in accordance with the provisions of
Section 12(c) of the Company 1999 Stock Plan had the optionholder's employment
with the Company been Constructively Terminated (as defined in the Company 1999
Stock Plan) as of the Effective Time. Any Company Employee Stock Options which
become vested pursuant to this paragraph (b) shall be canceled as of the
-------------
Effective Time in exchange for a cash payment by the Company in accordance with
the provisions of paragraph (a).
-------------
(c) Prior to the Effective Time, the Company Board (or, if appropriate,
any committee administering the Company Option Plans) shall take all actions as
are required to cause each Company Employee Stock Options which are not vested
as of the Effective Time to be cancelled as of the Effective Time.
(d) All amounts payable pursuant to this Section 7.04 shall be subject to
------------
any required withholding of Taxes and shall be paid without interest. The
Company shall use its reasonable best efforts to obtain all consents of the
holders of the Company Employee Stock Options as
43
shall be necessary to effectuate the foregoing. Notwithstanding anything to the
contrary contained in this Agreement, payment shall, at Parent's request, be
withheld in respect of any Company Employee Stock Option until all necessary
consents are obtained.
(e) The Company Board shall adopt, or shall cause to be adopted, such
resolutions or take such other actions as are required so that the Company
Option Plans shall terminate as of the Effective Time, and the provisions in any
other Company Plan providing for the issuance, transfer or grant of any capital
stock of the Company or any interest in respect of any capital stock of the
Company shall be deleted as of the Effective Time, and to ensure that following
the Effective Time no holder of a Company Employee Stock Option or any
participant in any Company Option Plan or other Company Plan shall have any
right thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
(f) The Company shall as soon as practicable but in no event later than
the date the Offer is commenced, provide to each holder of Company Warrants in a
form reasonably acceptable to Parent the notice contemplated by Section 8 of
each such holders' respective warrant agreement. All Company Warrants not
exercised prior to the Effective Time shall be terminated without consideration.
SECTION 7.05 Employee Stock Purchase Plan. The Company Board (or any
committee thereof) shall take such action as may be necessary or desirable in
the reasonable judgment of Parent under the Company's 1999 Employee Stock
Purchase Plan, as the same may be amended (the "ESPP"), to cause the ESPP to be
----
terminated effective with the Exercise Date occurring on June 30, 2001 pursuant
to Section 20 of the ESPP.
SECTION 7.06 Indemnification; D&O Insurance.
(a) Parent and Sub agree that all rights to indemnification for acts or
omissions occurring prior to the Effective Time now existing in favor of the
current or former directors, officers or employees of the Company and the
Company Subsidiaries (each, an "Indemnified Party") as provided in their
-----------------
respective certificates of incorporation or by-laws or in any indemnification
agreement between the Company and any Indemnified Party as in effect immediately
prior to the date of this Agreement shall survive the Merger and shall continue
in full force and effect in accordance with their terms for a period of not less
than six years from the Effective Time.
(b) Parent shall cause to be maintained for a period of six years from the
Effective Time the Company's current D&O Insurance policy to the extent that it
provides coverage for events occurring prior to the Effective Time for all
persons who are directors and officers of the Company on the date of this
Agreement, so long as the annual premium therefor would not be in excess of 200%
of the last annual premium paid prior to the date of this Agreement (such
amount, the "Maximum Premium"). Upon request by Parent, the Company shall use
---------------
its reasonable best efforts to extend coverage under the Company's D&O Insurance
by obtaining a six-year "tail" policy (provided that the lump sum payment to
purchase such coverage does not exceed three times the Maximum Premium) and such
"tail" policy shall satisfy Parent's obligations under this Section 7.06(b).
---------------
Parent's obligations under this Section 7.06(b) shall also be satisfied if
---------------
Parent's D&O Insurance provides (or is amended to provide) substantially similar
44
coverage for events occurring prior to the Effective Time for persons who are
directors and officers of the Company on the date of this Agreement. If the
Company's existing D&O Insurance expires, is terminated or canceled during such
six-year period or a "tail" policy cannot be purchased on the terms set forth
above and Parent cannot or determines not to satisfy its obligations under this
Section 7.06(b) pursuant to the preceding sentence, Parent shall use reasonable
- ---------------
best efforts to cause to be obtained as much D&O Insurance as can be obtained
for the remainder of such period for an annualized premium not in excess of the
Maximum Premium, on terms and conditions no less advantageous than the existing
D&O Insurance. The Company represents to Parent that the last annual premium
paid prior to the date of this Agreement is not greater than $639,045.
(c) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and assets
to any Person, then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of Surviving
Corporation assume the obligations set forth in this Section 7.06.
------------
(d) The provisions of this Section 7.06 are intended to be for the benefit
------------
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
SECTION 7.07 Public Announcements. Parent and Sub, on the one hand, and
the Company, on the other hand, shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the Offer, the Merger and the
other Transactions and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
Applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
SECTION 7.08 Transfer Taxes. Either Sub or the Surviving Corporation
shall pay all Transfer Taxes, if any, and any penalties or interest with respect
to the Transfer Taxes, payable in connection with the consummation of the Offer
or the Merger, and all Stock Transfer Taxes, if any, and any penalties or
interest with respect to any such Stock Transfer Taxes. The Company acknowledges
that the amount of the Transfer Taxes payable with respect to any shares of
Company Common Stock may be withheld by Sub from the amount to be paid pursuant
to the Offer and the Merger with respect to such shares, unless the date on
which the beneficial owner of such shares acquired beneficial ownership thereof
is certified to Sub.
SECTION 7.09 Potential Litigation. The Company shall give Parent the
opportunity to participate fully in the conduct of the defense or the settlement
of any litigation against the Company and its directors relating to any
Transaction. No settlement of any such litigation shall be agreed to without
Parent's prior written consent.
SECTION 7.10 Other Actions by the Company and Parent. If requested by
Parent prior to the Effective Time, the Company Board shall take all necessary
action to terminate or redeem all of the outstanding Company Rights and to
terminate the Company Rights Agreement, effective immediately prior to the
Effective Time.
45
ARTICLE VIII
Conditions Precedent
SECTION 8.01 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. If required by Applicable Law, the Company shall
have obtained Company Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof) applicable
to any of the Transactions under the HSR Act shall have been terminated or shall
have expired and any consents, approvals and filings under any foreign antitrust
law, the absence of which would prohibit the consummation of Merger, shall have
been obtained or made.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other Order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing or
imposing any conditions or limitations on the consummation of any of the
Transactions shall be in effect; provided, however, that each of the parties
-------- -------
shall have used its reasonable best efforts to prevent the entry of any such
injunction or other Order and to appeal as promptly as possible any such
injunction or other order that may be entered.
(d) Acceptance of Shares. Sub shall have accepted shares of Company Common
Stock for payment pursuant to the Offer.
ARTICLE IX
Termination, Amendment and Waiver
SECTION 9.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after Company Stockholder
Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before September 30, 2001
(the "Outside Date"), unless the failure to consummate the Merger is the
------------
result of a breach of this Agreement by the party seeking to terminate this
Agreement; provided, however, that this Agreement may not be terminated
-------- -------
pursuant to this clause (i) if Sub has accepted shares of Company Common
Stock for payment pursuant to the Offer;
(ii) if any Governmental Entity issues an Order or takes any other
action permanently enjoining, restraining or otherwise prohibiting the
Merger and such Order or other action shall have become final and
nonappealable;
46
(iii) (A) Sub shall have failed to commence the Offer within ten
business days following the date of this Agreement or (B) the Offer shall
have terminated or expired in accordance with its terms without Sub having
purchased any shares of Company Common Stock pursuant to the Offer;
provided, however, that the right to terminate this Agreement pursuant to
-------- -------
this clause (iii) shall not be available to any party whose failure to
------------
fulfill any of its obligations under this Agreement or the failure of whose
representations and warranties to be true results in the failure of any
such condition; or
(iv) if, upon a vote at a duly held stockholders meeting to obtain
Company Stockholder Approval, Company Stockholder Approval is not obtained.
(c) by Parent, if the Company breaches or fails to perform in any material
respect any of its representations, warranties, covenants or agreements
contained in this Agreement, which breach or failure to perform (i) would give
rise to the failure of a condition set forth in Exhibit A, and (ii) cannot be or
---------
has not been cured within 30 days after the giving of written notice to the
Company of such breach (provided that Parent is not then in material breach of
any representation, warranty or covenant contained in this Agreement); provided,
--------
however, that this Agreement may not be terminated pursuant to this clause (c)
- ------- ----------
if Sub has accepted shares of Company Common Stock for payment pursuant to the
Offer;
(d) by Parent:
(i) if the Company Board or any committee thereof withdraws or
modifies in a manner adverse to Parent its approval or recommendation of
the Offer, the Merger or this Agreement or fails to recommend to the
Company's stockholders that they accept the Offer or give Company
Stockholder Approval, or the Company Board or any committee thereof
resolves to take any of the foregoing actions; or
(ii) if the Company Board fails to reaffirm publicly and
unconditionally its recommendation to the Company's stockholders that they
accept the Offer and give Company Stockholder Approval within 10 business
days of Parent's written request to do so (which request may be made at any
time following public disclosure of an Alternative Acquisition Proposal),
which public reaffirmation must also include the unconditional rejection of
such Alternative Acquisition Proposal;
(e) by the Company prior to the acceptance of shares of Company Common
Stock for payment pursuant to the Offer if, prior to the consummation of the
Offer, the Company Board shall have finally determined to approve, endorse or
recommend an Alternative Acquisition Proposal that constitutes a Superior
Company Proposal; provided, however, that the Company may not terminate this
-------- -------
Agreement pursuant to this Section 9.01(e) unless (i) the Company has complied
--------------
with all of its obligations under Section 6.02 in accordance with the terms
------------
thereof, (ii) at least five business days prior to terminating this Agreement
pursuant to this Section 9.01(e) the Company has provided Parent with written
---------------
notice advising Parent that the Company Board has received a Superior Company
Proposal that it intends to accept, specifying the material terms and conditions
of such Superior Company Proposal, and identifying the Person making such
Superior Company Proposal, (iii) the Company has caused its financial and legal
advisors to negotiate in good faith with Parent with respect to any attempt or
proposal by Parent to make
47
such adjustments in the financial terms of this Agreement that are equal or
superior to the financial terms of such Superior Company Proposal and the
Company and Parent have not agreed upon any such adjustment, and (iv) the
Company has paid to (or concurrently pays to) Parent the Termination Fee in
accordance with this Section 9.01(e) and Section 9.02.; or
--------------- --------------
(f) by the Company, if Parent or Sub breaches or fails to perform in any
material respect any of its representations, warranties, covenants or agreements
contained in this Agreement, which breach or failure to perform (i) would give
rise to the failure of a condition set forth in Article VIII and (ii) cannot be
------------
cured or has not been cured within 30 days after the giving of written notice to
Parent of such breach (provided that Company is not then in material breach of
any representation, warranty or covenant contained in this Agreement); provided,
--------
however, that this Agreement may not be terminated pursuant to this clause (f)
- ------- ----------
if Sub has accepted shares of Company Common Stock pursuant to the Offer.
SECTION 9.02 Effect of Termination; Fees and Expenses.
(a) In the event of termination of this Agreement by either the Company or
Parent as provided in Section 9.01, this Agreement shall forthwith become void
------------
and have no effect, without any liability or obligation on the part of Parent,
Sub or the Company, other than the last sentence of Section 7.02(a), this
---------------
Section 9.02 and Article X and except to the extent that such termination
- ------------ ---------
results from the breach by a party of any representation, warranty or covenant
set forth in this Agreement.
(b) The Company shall pay to Parent a fee in an amount equal to $4,500,000
(the "Termination Fee") if:
---------------
(i) Parent terminates this Agreement pursuant to Section 9.01(c) or
---------------
Section 9.01(d) or the Company terminates this Agreement pursuant to
---------------
Section 9.01(e); or
---------------
(ii) (A) after the date of this Agreement, any Person shall have made,
or proposed, communicated or disclosed in a manner which is or otherwise
becomes public prior to or during the pendency of the Offer (which shall
include being known by stockholders of the Company) an intention to make
an Alternative Acquisition Proposal, and such proposal shall not have been
withdrawn at least five business days prior to the scheduled expiration
date of the Offer;
(B) this Agreement is terminated pursuant to Sections 9.01(b)(i)
-------------------
or (b)(iii)(B); and
-----------
(C) within 12 months of such termination the Company enters into
a letter of intent or agreement in principle for an Alternative
Acquisition Proposal or a definitive agreement to consummate an
Alternative Acquisition Proposal, or the transactions contemplated by
an Alternative Acquisition Proposal are consummated.
(c) Parent shall pay to the Company the Termination Fee if the
Company terminates this Agreement pursuant to Section 9.01(f).
---------------
48
Except for any fee due because of a termination of this Agreement pursuant to
Section 9.01(c) (but not including a breach of Section 6.02) or Section 9.01(f),
- --------------- ------------- ---------------
which shall be paid no later than one business day after the date of
termination, any fee due under this Section 9.02 shall be paid by wire transfer
------------
of same-day funds on the date of termination of this Agreement (except that in
the case of a payment pursuant to clause (ii) above such payment shall be made
-----------
on the date of execution of such letter of intent, agreement in principle or
definitive agreement or, if earlier, consummation of such transaction).
(d) Except as provided below, all fees and expenses incurred in connection
with the Merger and the other Transactions shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated; provided,
--------
however, that Parent and the Company shall share equally the filing fees in
- -------
connection with the HSR Act and the filing fees in connection with the Offer
Documents.
(e) If the Company or Parent shall become obligated to pay the Termination
Fee pursuant to Section 9.02 (it being understood that such obligation shall
------------
arise only if this Agreement is validly terminated pursuant to Section 9.01),
-------------
such Termination Fee shall constitute the exclusive remedy for any breach by the
Company or Parent of any of their respective representations, warranties or
covenants contained in this Agreement.
SECTION 9.03 Amendment. This Agreement may be amended by the parties at
any time before or after receipt of Company Stockholder Approval; provided,
--------
however, that after receipt of Company Stockholder Approval, there shall be made
- -------
no amendment that by law requires further approval by such stockholders without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 9.04 Extension; Waiver. At any time prior to the Effective Time,
the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties, (ii) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (iii) subject to the proviso of
Section 9.03, waive compliance with any of the agreements or conditions
- ------------
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 9.05 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 9.01, an amendment of this
------------
Agreement pursuant to Section 9.03 or an extension or waiver pursuant to Section
------------ -------
9.04 shall, in order to be effective, be in writing and require in the case of
- ----
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors.
49
ARTICLE X
General Provisions
SECTION 10.01 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement shall survive the Effective
Time. This Section 10.01 shall not limit any covenant or agreement contained in
-------------
any Transaction Agreement which by its terms contemplates performance after the
Effective Time.
SECTION 10.02 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given upon receipt by the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
United New Ventures
1200 East Algonquin Road
P.O. Box 66100
Elk Grove Township, IL 60007
Tel: (847) 700-4000
Fax: (847) 700-4683
Attention: General Counsel
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
Tel: (312) 782-0600
Fax: (312) 701-7711
Attention: Elizabeth A. Raymond
Marc F. Sperber
50
(b) if to the Company, to
MyPoints.com, Inc.
1375 East Woodfield Road, Suite 300
Schaumburg, IL 60173
Tel: (847) 969-8150
Fax: (847) 969-8164
Attention: General Counsel
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
Tel: (650) 493-9300
Fax: (650) 493-6811
Attention: Mario M. Rosati
SECTION 10.03 Interpretation. When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
SECTION 10.04 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or 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
materially 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.
SECTION 10.05 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. Delivery of an executed
counterpart of this Agreement by facsimile shall be effective to the fullest
extent permitted by applicable law.
SECTION 10.06 Entire Agreement; No Third-Party Beneficiaries. The
Transaction Agreements, the Company Disclosure Letter, the Parent Disclosure
Letter and all exhibits and schedules hereto and the Confidentiality Agreement,
taken together, (i) constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, among
51
the parties with respect to the Transactions and (ii) from and after the
Effective Time, Section 3.01(c)(i), Section 7.04, Section 7.05 and Section
------------------ ------------ ------------ -------
9.02(c) are not intended to confer upon any Person other than the parties hereto
- -------
any rights or remedies.
SECTION 10.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 10.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 10.09 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of any Transaction 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 any Transaction Agreement and
to enforce specifically the terms and provisions of each Transaction Agreement
in the courts of the State of Delaware and of the United States of America
located in Wilmington, Delaware, 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 courts
of the State of Delaware and of the United States of America located in
Wilmington, Delaware in the event any dispute arises out of any Transaction
Agreement or any Transaction, (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 any
Transaction Agreement or any Transaction in any court other than the courts of
the State of Delaware and of the United States of America located in Wilmington,
Delaware and (d) waives any right to trial by jury with respect to any action
related to or arising out of any Transaction Agreement or any Transaction.
52
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
------------------------------
Name: Douglas A. Hacker
Title: President
UNV ACQUISITION CORP.
By: /s/ Douglas A. Hacker
------------------------------
Name: Douglas A. Hacker
Title: President
MYPOINTS.COM, INC.
By: /s/ John Fullmer
------------------------------
Name: John Fullmer
Title: CEO
53
EXHIBIT A
Conditions of the Offer
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Agreement and Plan of Merger (the "Agreement") of
---------
which this Exhibit A is a part. Notwithstanding any other term of the Offer or
this Agreement, Sub shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-l(c) under
the Exchange Act (relating to Sub's obligation to pay for or return tendered
shares of Company Common Stock promptly after the termination or withdrawal of
the Offer), to pay for any shares of Company Common Stock tendered pursuant to
the Offer unless (i) there shall have been validly tendered and not withdrawn
prior to the expiration of the Offer that number of shares of Company Common
Stock which would represent at least a majority of the Fully Diluted Shares (the
"Minimum Tender Condition") and (ii) the waiting period (and any extension
------------------------
thereof) applicable to the purchase of shares of Company Common Stock pursuant
to the Offer under the HSR Act shall have been terminated or shall have expired
and any consents, approvals and filings under any foreign antitrust law, the
absence of which would prohibit the purchase of all shares of Company Common
Stock tendered pursuant to the Offer, shall have been obtained or made prior to
the acceptance of shares of Company Common Stock pursuant to the Offer. The term
"Fully Diluted Shares" means all outstanding securities entitled generally to
--------------------
vote in the election of directors of the Company on a fully diluted basis, after
giving effect to the exercise, conversion or termination of all options,
warrants, rights and securities exercisable or convertible into such voting
securities. Furthermore, notwithstanding any other term of the Offer or this
Agreement, Sub shall not be required to accept for payment or, subject as
aforesaid, to pay for any shares of Company Common Stock not theretofore
accepted for payment or paid for, and may terminate or amend the Offer, with the
consent of the Company or if, at any time on or after the date of this Agreement
and before the expiration of the Offer, any of the following conditions exists:
(a) there shall be threatened in writing, instituted or pending any
suit, action or proceeding by any Governmental Entity, (i) challenging the
acquisition by Parent or Sub of any Company Common Stock, seeking to
restrain or prohibit the making or consummation of the Offer or the Merger
or any other Transaction, or seeking to obtain from the Company, Parent or
Sub any damages that are material in relation to the Company and its
subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries of any material portion of the business or assets of the
Company, Parent or any of their respective subsidiaries, or to compel the
Company, Parent or any of their respective subsidiaries to dispose of or
hold separate all or any material portion of the business or assets of the
Company, Parent or any of their respective subsidiaries, as a result of the
Offer, the Merger or any of the other Transactions, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership of, any shares of Company Common Stock, including
the right to vote the Company Common Stock purchased by it on all matters
properly presented to the stockholders of the Company, (iv) seeking to
prohibit Parent or any of its subsidiaries from effectively controlling in
any material respect the business or operations of the Company and the
A-1
Company Subsidiaries, or (v) which otherwise is reasonably likely to have a
Parent Material Adverse Effect or a Company Material Adverse Effect;
(b) any statute, rule, regulation, legislation, interpretation,
judgment, Order or injunction shall be threatened, proposed, enacted,
entered, enforced, promulgated, amended or issued with respect to, or
deemed applicable to, or any consent or approval withheld with respect to
the Offer, the Merger or any of the other Transactions, by any Governmental
Entity that is reasonably likely to result, directly or indirectly, in any
of the consequences referred to in paragraph (a) above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of the most recent audited
financial statements included in the Filed Company SEC Documents there
shall have occurred any change, event, effect or development that,
individually or in the aggregate, has had or could reasonably be expected
to have, a Company Material Adverse Effect;
(d) the Company Board or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent its approval or recommendation of
the Offer and this Agreement or the Company Board or any committee thereof
shall have resolved to take any of the foregoing actions;
(e) the representations and warranties of Company contained in this
Agreement shall not have been true and correct in all respects as of the
date of this Agreement and on and as of the date of the expiration of the
Offer with the same force and effect as if made on or as of such date
(except for those representations and warranties that address matters only
as of a particular date, which representations and warranties shall have
been true and correct as of such particular date), except (A) for such
failures to be true and correct as would not, individually or in the
aggregate, have or could reasonably be expected to have a Company Material
Adverse Effect; provided, however, that such Company Material
-------- -------
Adverse Effect qualifier shall be inapplicable with respect to the
representations and warranties contained in Sections 4.03, 4.04, 4.05(i),
------------- ---- ----
4.06, 4.14, 4.15, 4.16 and 4.25, each of which individually shall have been
---- ---- ---- ---- ----
true and correct in all material respects as of the date of this Agreement
and shall be true and correct in all material respects on and as of the
date of the expiration of the Offer and (B) for changes contemplated by
this Agreement (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (x) all "Company Material
Adverse Effect" and materiality qualifications and other qualifications
based on the word "material" or similar phrases contained in such
representations and warranties shall be disregarded, and (y) any update of
or modification to the Company Disclosure Letter made or purported to have
been made after the date of this Agreement shall be disregarded).
(f) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement;
(g) this Agreement shall have been terminated in accordance with its
terms;
A-2
(h) any of the Stock Option and Tender Agreements shall not be in
full force and effect or any of the Principal Company Stockholders shall
have failed to perform in any material respect any obligation or to comply
in any material respect with any agreement or covenant to be performed or
complied with by them under any such agreement; or
(i) the Rights Plan Amendment shall not be in full force and effect;
which, in the reasonable judgment of Sub or Parent, in any such case, and
regardless of the circumstances giving rise to any such condition (including,
without limitation, any action or inaction by Parent or any of its Affiliates),
makes it inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent and
may be asserted by Sub or Parent regardless of the circumstances giving rise to
such condition or may be waived by Sub and Parent in whole or in part at any
time and from time to time in their sole discretion prior to the expiration of
the Offer. The failure by Parent, Sub or any other Affiliate of Parent at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time prior to the expiration of the Offer.
A-3
Exhibit 99(D)(2)
NON-DISCLOSURE AGREEMENT
This Agreement, made and entered into as of the 30th day of March, 2001, by
and between MyPoints.com, Inc., a corporation organized under the laws of the
State of Delaware, having a place of business at 100 California St., 12th Floor,
San Francisco, CA 94111 ("MyPoints.com"), and United NewVentures, a division of
United Airlines, Inc. with its principal place of business at 1200 E. Algonquin
Rd, Elk Grove Village, IL 60007 ("Receiving Party").
WHEREAS, MyPoints.com is engaged in the business of marketing and selling
online business programs and services, and owns and operates the MyPoints(R)
Program, BonusMail(R) Program and other internet related programs;
WHEREAS, Receiving Party, in conjunction with OurHouse, Inc., has indicated
an interest in potentially acquiring MyPoints.com and in this regard has
requested certain financial, business, technical and other information about
MyPoints.com which information is proprietary to, and held as the confidential
information of, MyPoints.com (hereinafter referred to as the "Confidential
Information");
WHEREAS, MyPoints.com has agreed to provide the Confidential Information to
Receiving Party, and Receiving Party agrees to accept such Confidential
Information only in strict accordance with the provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby mutually acknowledged, the parties agree as follows:
1. This Agreement shall bind Receiving Party and those taking under it with
regard to all Confidential Information disclosed to, or obtained by,
Receiving Party hereunder. For the purposes of this Agreement Confidential
Information shall include all information disclosed, directly or indirectly,
through any means of communication or observation, by MyPoints.com to or for
the benefit of Receiving Party, that relates to or is derived from
MyPoints.com's technical, business, strategic, marketing or creative affairs,
or to any other matter that the Receiving Party is advised or has reason to
know is the confidential or proprietary information of MyPoints.com. Any
material provided by MyPoints.com to Receiving Party which is clearly
designated "Confidential" (or other similar legend) will be presumed to be
Confidential Information. The absence of any such legend, however, will not
preclude the same from being deemed Confidential Information.
2. Receiving Party agrees that receipt of Confidential Information, pursuant to
this Agreement, is exclusively for the purpose of evaluating a potential
acquisition of
MyPoints.com and Receiving Party shall not use the Confidential Information
for any other purpose.
3. Confidential Information disclosed to Receiving Party hereunder shall:
a. not be copied or distributed, disclosed, or disseminated in any way or
form by the Receiving Party to any third party without the written
permission of MyPoints.com first obtained;
b. be treated by the Receiving Party with the same degree of care to avoid
disclosure to any third party as is used with respect to the Receiving
Party's own proprietary and confidential information of like importance;
c. remain the property of the MyPoints.com, and shall be returned by the
Receiving Party to MyPoints.com (along with all copies thereof) promptly
upon its receipt of a request from MyPoints.com to do so;
d. not be used by Receiving Party for any purpose other than as specified
herein or otherwise approved by MyPoints.com in writing.
4. The obligations set forth in Paragraph 3 above shall not apply to any
information which:
a. is already in the public domain at the time of disclosure to the
Receiving Party or becomes available to the public through no breach of
this Agreement by the Receiving Party;
b. was lawfully in the Receiving Party's possession prior to receipt from
the MyPoints.com;
c. is disclosed to Receiving Party by a third party with the right to do
so.
For the purposes of this Paragraph 4, information shall not be deemed to be
in the public domain merely because any part of said information is embodied
in general disclosures or because individual features, components or
combinations thereof are now, or become, known to the public, provided,
however, that the obligations of Paragraph 3 hereof shall not apply to any
such part of said information.
5. Unless otherwise mutually agreed in writing, the Receiving Party's
obligations with respect to each item of Confidential Information shall
terminate five (5) years from the date of the receipt thereof by the
Receiving Party.
6. Nothing contained herein shall obligate MyPoints.com to disclose any
particular information to Receiving Party nor require Receiving Party to
accept such information.
7. This Agreement shall be effective as of the date first set forth above
8. Receiving Party warrants and represents that it possesses all necessary
power, right and authority to lawfully execute and perform the obligations
set forth herein.
2
9. This Agreement represents the entire understanding and agreement of the
parties and supersedes all prior communications, agreements and
understandings relating to the subject matter hereof. The provisions of this
Agreement may not be modified, amended nor waived, except by a written
instrument duly executed by both parties. This Agreement may not be assigned
by Receiving Party without the prior written consent of the MyPoints.com.
This Agreement is made subject to, and shall be construed under, the laws of
the State of Illinois.
10.Receiving Party agrees to keep the existence and nature of this Agreement
confidential.
11.In the event that Receiving Party becomes legally compelled to disclose any
of the Confidential Information, Receiving Party shall provide MyPoints.com
with prompt notice so that it may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. In the event MyPoints.com is unable to obtain such protective
order or other appropriate remedy, only that portion of the Confidential
Information which has been deemed by a written opinion of counsel to be
legally required to be furnished, shall be disclosed, and Receiving Party
will cooperate with the MyPoints.com to obtain a protective order or other
reliable assurance that confidential treatment will be accorded the
Confidential Information so disclosed.
12.It is understood and agree that monetary damages will not be a sufficient
remedy for any breach of this Agreement by the Receiving Party, and that
MyPoints.com shall be entitled to specific performance and/or injunctive
relief as a remedy for any such breach of this Agreement, but said remedies
shall be in addition to all other remedies available at law or in equity. It
is further agreed that this Agreement is made for the benefit of
MyPoints.com, and that no failure or delay by MyPoints.com to enforce its
rights hereunder shall operate as a waiver of any right, power or privilege
under this Agreement, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof.
IN WITNESS WHEREOF, an authorized representative of each respective party has
executed this Agreement on the dates following their respective signatures.
MyPoints.com, Inc. ("MyPoints.com") United NewVentures ("Receiving Party")
By: /s/ Craig S. Stevens By: Rick Poulton
----------------------------- -----------------------------------
Title: Sr. Vice President Title: Chief Financial Officer
and General Counsel --------------------------------
-------------------------
Date: 4\4\01 Date: 4\4\01
--------------------------- --------------------------------
3
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Crystal Asset Management, LLC
VIA FACSIMILE: 415-956-0478
Dear Crystal Asset Management:
This letter is to confirm our agreement regarding all of the 696,012
shares, $.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware
------------
corporation (the "Company"), beneficially owned (within the meaning of Rule 13d-
-------
3 under the Securities Exchange Act of 1934, as amended) by you and any other
shares of Common Stock as to which you may hereafter acquire beneficial
ownership prior to the Expiration Date (as defined below)(individually a "Share"
-----
and collectively the "Shares"). In order to induce United NewVentures, a
------
Delaware corporation ("Buyer"), to enter into an Agreement and Plan of Merger,
-----
dated as of the date hereof, between the Company, UNV Acquisition Corp., and
Buyer (the "Merger Agreement"), you hereby agree as follows (capitalized terms
----------------
used herein but not otherwise defined shall have the meanings ascribed to them
in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
---------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination" shall mean any termination of the Merger Agreement pursuant to
- -----------
which Buyer is or may
become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value of
such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii) Buyer or its subsidiary shall, upon purchase of the Shares,
receive good and marketable
2
title to the Shares, free and clear of all liens, claims, encumbrances and
security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination shall
relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
----------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Charles D. Hartley
- ------------------------------------------------------
Crystal Asset Management (by Charles D. Hartley)
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Mr. Noah Doyle
5618 LaSalle Avenue
Oakland, CA 94611
Dear Mr. Doyle:
This letter is to confirm our agreement regarding all of the 543,364
shares, $.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware
------------
corporation (the "Company"), beneficially owned (within the meaning of Rule 13d-
-------
3 under the Securities Exchange Act of 1934, as amended) by you and any other
shares of Common Stock as to which you may hereafter acquire beneficial
ownership prior to the Expiration Date (as defined below)(individually a "Share"
-----
and collectively the "Shares"). In order to induce United NewVentures, a
------
Delaware corporation ("Buyer"), to enter into an Agreement and Plan of Merger,
-----
dated as of the date hereof, between the Company, UNV Acquisition Corp., and
Buyer (the "Merger Agreement"), you hereby agree as follows (capitalized terms
----------------
used herein but not otherwise defined shall have the meanings ascribed to them
in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
----------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination" shall mean any termination of the Merger Agreement pursuant to
- -----------
which Buyer is or may
become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value
of such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii) Buyer or its subsidiary shall, upon purchase of the Shares,
receive good and marketable
2
title to the Shares, free and clear of all liens, claims, encumbrances and
security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination
shall relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
-----------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Noah Doyle
- -----------------------------------------------
Noah Doyle
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Mr. Larry Phillips
Primedia
745 5/th/ Avenue, 22/nd/ Floor
NewYork, NY 10151
Dear Mr. Phillips:
This letter is to confirm our agreement regarding all of the 988,184
shares, $.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware
------------
corporation (the "Company"), beneficially owned (within the meaning of Rule 13d-
-------
3 under the Securities Exchange Act of 1934, as amended) by you and any other
shares of Common Stock as to which you may hereafter acquire beneficial
ownership prior to the Expiration Date (as defined below)(individually a "Share"
-----
and collectively the "Shares"). In order to induce United NewVentures, a
------
Delaware corporation ("Buyer"), to enter into an Agreement and Plan of Merger,
-----
dated as of the date hereof, between the Company, UNV Acquisition Corp., and
Buyer (the "Merger Agreement"), you hereby agree as follows (capitalized terms
----------------
used herein but not otherwise defined shall have the meanings ascribed to them
in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
----------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination"
- -----------
shall mean any termination of the Merger Agreement pursuant to which Buyer is or
may become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value
of such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii)
2
Buyer or its subsidiary shall, upon purchase of the Shares, receive good and
marketable title to the Shares, free and clear of all liens, claims,
encumbrances and security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination
shall relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
-----------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Larry Phillips
- ------------------------------------------------
Larry Phillips
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Mr. Thomas R. Newkirk
Experian Capital Corporation
5 Sand Creek Road
Albany, NY 1205
Dear Mr. Newkirk:
This letter is to confirm our agreement regarding all of the 3,674,356
shares, $.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware
------------
corporation (the "Company"), beneficially owned (within the meaning of Rule 13d-
-------
3 under the Securities Exchange Act of 1934, as amended) by you and any other
shares of Common Stock as to which you may hereafter acquire beneficial
ownership prior to the Expiration Date (as defined below)(individually a "Share"
-----
and collectively the "Shares"). In order to induce United NewVentures, a
------
Delaware corporation ("Buyer"), to enter into an Agreement and Plan of Merger,
-----
dated as of the date hereof, between the Company, UNV Acquisition Corp., and
Buyer (the "Merger Agreement"), you hereby agree as follows (capitalized terms
----------------
used herein but not otherwise defined shall have the meanings ascribed to them
in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
----------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination"
- -----------
shall mean any termination of the Merger Agreement pursuant to which Buyer is or
may become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value of
such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii)
2
Buyer or its subsidiary shall, upon purchase of the Shares, receive good and
marketable title to the Shares, free and clear of all liens, claims,
encumbrances and security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination shall
relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
------------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Thomas R. Newkirk
- --------------------------------------------------------------
Thomas R. Newkirk
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Mr. Steve Markowitz
1531 Shattuck Avenue, #204
Berkley, CA 94709-1511
Dear Mr. Markowitz:
This letter is to confirm our agreement regarding all of the 50,000 shares,
$.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware corporation
------------
(the "Company"), beneficially owned (within the meaning of Rule 13d-3 under the
-------
Securities Exchange Act of 1934, as amended) by you and any other shares of
Common Stock as to which you may hereafter acquire beneficial ownership prior to
the Expiration Date (as defined below)(individually a "Share" and collectively
-----
the "Shares"). In order to induce United NewVentures, a Delaware corporation
------
("Buyer"), to enter into an Agreement and Plan of Merger, dated as of the date
-----
hereof, between the Company, UNV Acquisition Corp., and Buyer (the "Merger
------
Agreement"), you hereby agree as follows (capitalized terms used herein but not
- ---------
otherwise defined shall have the meanings ascribed to them in the Merger
Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
----------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination" shall mean any termination of the Merger Agreement pursuant to
- -----------
which Buyer is or may
become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value
of such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii) Buyer or its subsidiary shall, upon purchase of the Shares,
receive good and marketable
2
title to the Shares, free and clear of all liens, claims, encumbrances and
security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination
shall relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
------------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Steve Markowitz
- -------------------------------------------------
Steve Markowitz
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
United NewVentures
1200 E. Algonquin Road
P.O. Box 66100
Elk Grove Township, Illinois 60007
June 1, 2001
Mr. Nat Goldhaber
261 Stonewall Road
Berkley, CA 94705
Dear Mr. Goldhaber:
This letter is to confirm our agreement regarding all of the 2,047,572
shares, $.001 par value ("Common Stock"), of MyPoints.com, Inc., a Delaware
------------
corporation (the "Company"), beneficially owned (within the meaning of Rule 13d-
-------
3 under the Securities Exchange Act of 1934, as amended) by you and any other
shares of Common Stock as to which you may hereafter acquire beneficial
ownership prior to the Expiration Date (as defined below)(individually a "Share"
-----
and collectively the "Shares"). In order to induce United NewVentures, a
------
Delaware corporation ("Buyer"), to enter into an Agreement and Plan of Merger,
-----
dated as of the date hereof, between the Company, UNV Acquisition Corp., and
Buyer (the "Merger Agreement"), you hereby agree as follows (capitalized terms
----------------
used herein but not otherwise defined shall have the meanings ascribed to them
in the Merger Agreement):
Subject to the terms and conditions hereof, as soon as practicable after
the commencement of the tender offer to be commenced by Buyer pursuant to the
Merger Agreement (the "Tender Offer"), but in no event later than the scheduled
------------
expiration date of the Tender Offer as of the date hereof, you will tender to
Buyer, or cause to be tendered, all of the Shares, regardless of whether another
offer for such Shares has been made. If you withdraw your tender of Shares in
the Tender Offer, you shall immediately, but in no event later than the
scheduled expiration date of the Tender Offer as of the date hereof, re-tender
such Shares to Buyer.
You hereby grant to Buyer the option (the "Option") to purchase any or all
------
the Shares, at the higher of U.S. $2.60 per Share in cash or such higher price
per Share in cash as Buyer or any of its subsidiaries may offer to pay for
shares of Common Stock in the Tender Offer (the "Per Share Option Price"),
----------------------
beginning on the date of an Applicable Termination (as defined below) and ending
on the date (the "Expiration Date") that is ten business days following such
----------------
Applicable Termination; provided that the closing of such purchase shall in any
--------
event follow the receipt by Buyer of any applicable governmental consents or
approvals or the termination or expiration of any applicable waiting periods
referred to in Section 8.01(b) of the Merger Agreement. An "Applicable
--------------- ----------
Termination" shall mean any termination of the Merger Agreement pursuant to
- -----------
which Buyer is or may
become entitled to the Termination Fee (as defined in the Merger Agreement),
including, without limitation, pursuant to Section 9.02(b)(ii) of the Merger
Agreement.
If (i) Buyer acquires the Shares upon exercise of the Option, (ii) Buyer
does not acquire a number of shares of Common Stock representing at least the
Minimum Tender Condition within twelve months after such exercise of the Option
and (iii) within such twelve-month period, Buyer or any affiliate of Buyer,
directly or indirectly, sells, transfers or otherwise disposes of (including,
without limitation, pursuant to a merger, liquidation, reorganization or
business combination involving the Company) the Shares acquired by Buyer upon
exercise of the Option, other than to any affiliate of Buyer (any of the
foregoing, a "Covered Disposition"), then upon consummation of any such Covered
-------------------
Disposition, Buyer shall pay to you in cash the amount, if any, by which the
aggregate of the cash consideration per Share and the fair market value (as of
the time of such Covered Disposition) of any securities or other property or
assets obtained by Buyer in the Covered Disposition exceeds the Per Share Option
Price, multiplied by the number of Shares sold, transferred or disposed of in
the Covered Disposition (the amount so payable to you, the "Covered Amount").
--------------
In the case of any securities so obtained by Buyer in a Covered Disposition that
are traded on any national securities exchange or through any inter-dealer
quotation system, the "fair market value" of such securities as of the time of
such Covered Disposition shall be the closing market price as reported on the
securities exchange or quotation system that is the principal trading market for
such securities on the last trading day before the Covered Disposition. In the
case of any other non-cash consideration so obtained by Buyer in a Covered
Disposition, the "fair market value" of such consideration shall be the value
actually attributed to such consideration under the terms of the Covered
Disposition or, if no such attribution was made under the terms of the Covered
Disposition, the fair market value of such consideration as determined by Buyer
and you in good faith. If Buyer and you cannot agree on the fair market value
of such consideration within ten (10) days after the consummation of the Covered
Disposition, then the fair market value shall be determined by arbitration in
accordance with the rules of the American Arbitration Association. The Covered
Amount shall be treated as additional purchase price paid for the Shares for tax
and other purposes.
You hereby agree not to sell, transfer or encumber the Shares (except in
the Tender Offer or to Buyer) prior to the Expiration Date.
You hereby represent and warrant as to the Shares issued, outstanding and
beneficially owned by you as of the date of this letter agreement that except as
disclosed on Schedule I hereto: (i) you are the sole owner of and have full
----------
right, power and authority to sell and vote the Shares, or if you are not the
sole owner, you have the full right, power and authority to sell the Shares, and
in either event, this letter agreement is a valid and binding agreement,
enforceable against you in accordance with its terms; (ii) neither the execution
of this letter agreement nor the consummation by you of the transactions
contemplated hereby will constitute a violation of, or conflict with, or default
under, any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which you are a party or by which you or the Shares
are bound; and (iii) Buyer or its subsidiary shall, upon purchase of the Shares,
receive good and marketable
2
title to the Shares, free and clear of all liens, claims, encumbrances and
security interests of any kind.
Buyer hereby represents and warrants that it is has corporate power and
authority to execute, deliver and perform this letter agreement.
You hereby agree to vote or cause to be voted all of the Shares (i) in the
manner directed by Buyer with respect to any matters related to the acquisition
of the Company by Buyer and (ii) against any other mergers, recapitalizations,
business combinations, sales of assets, liquidations or similar transactions
involving the Company, or any other matters which would be inconsistent with
Buyer's intended acquisition of the Company. In furtherance of your voting
agreement in this paragraph, you hereby revoke any and all previous proxies with
respect to any of the Shares and grant to Buyer, and such individuals or
corporations as Buyer may designate, an irrevocable proxy to vote all of the
Shares owned by you in accordance with this paragraph on any matters which may
be presented to shareholders of the Company with respect to the matters referred
to in clause (i) or (ii) above in this paragraph. You hereby acknowledge that
---------- ----
the proxy granted by the foregoing is coupled with an interest and is
irrevocable. In addition, you hereby agree to execute such additional documents
as Buyer may reasonably request to effectuate its proxy and voting rights under
this paragraph.
We each hereby agree that this letter agreement creates legally binding
commitments, enforceable in accordance with their terms. This letter agreement
(i) constitutes the entire agreement among the parties hereto with respect to
the subject matter hereof and (ii) supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof. This letter agreement is not intended to confer upon any
other person any rights or remedies hereunder.
This letter agreement may be terminated at any time (i) by mutual written
consent of the parties hereto, (ii) by either party on or after the termination
of the Merger Agreement other than pursuant to an Applicable Termination or
(iii) by either party on or after the Expiration Date; provided, however, that
-------- -------
the provisions of the fourth paragraph of this letter agreement (related to
Covered Dispositions) shall survive any such termination in accordance with its
terms. Notwithstanding the foregoing, such right of termination shall not be
available to any party whose breach of any representation, warranty, agreement
or obligation hereunder has been the cause of or resulted in the failure of the
transactions contemplated hereunder to be consummated. No such termination
shall relieve any party from liability for any breach of this letter agreement.
Each party shall be entitled, without prejudice to the rights and remedies
otherwise available to such party, to specific performance of all of the other
party's obligations hereunder. This letter agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the State of Delaware. Each of the parties shall pay its own expenses in
connection with the execution and performance of this letter agreement.
3
If any term, provision, covenant or restriction of this letter agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
letter agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Please indicate your agreement to the foregoing by signing this letter
agreement in the space provided below, whereupon a binding agreement will have
been formed between us in respect of the foregoing.
Sincerely,
UNITED NEWVENTURES, INC.
By: /s/ Douglas A. Hacker
---------------------
Name: Douglas A. Hacker
Title: President
Acknowledged and agreed as of the date first written above:
/s/ Nat Goldhaber
- -----------------------------------------------
Nat Goldhaber
4
SCHEDULE I
----------
[LIST ANY EXCEPTIONS]
5
EXECUTION COPY
--------------
REDEMPTION AGREEMENT
THIS REDEMPTION AGREEMENT (this "Agreement") is made and entered into
---------
on this 1st day of June, 2001 (the "Effective Date"), by and between United Air
--------------
Lines, Inc., a Delaware corporation ("United"), and MyPoints.com, Inc., a
------
Delaware corporation ("MyPoints").
--------
WHEREAS, United is one of the world's largest airline companies; and
WHEREAS, MyPoints owns, operates and administers MyPoints(R), an online
incentive loyalty program (the "Program"), which allows qualified individuals
-------
who have enrolled as members to earn points redeemable for products and services
by participating in consumer-based web activity; and
WHEREAS, United intends to sell (either by itself or through an agent)
discount travel certificates, companion travel certificates and roundtrip travel
certificates which are redeemable for air travel in accordance with the terms
and conditions of this Agreement and the attachments hereto (collectively, the
"Certificates") to MyPoints for use in the Program; and
------------
WHEREAS, in order to induce United to enter into this Agreement, MyPoints
has agreed to designate United as the exclusive airline company for the Program
during the term of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
1. Term and Termination.
--------------------
A. This Agreement is made and is effective as of the Effective Date. The
term of this Agreement will commence as of the Effective Date and will
expire on June 1, 2003 (the "Expiration Date").
---------------
B. This Agreement may be terminated by United, without cause and for any
reason it deems appropriate, upon 90 days prior written notice to
MyPoints (the "Early Termination Date").
----------------------
C. Any payment, fulfillment or other administrative provisions shall
remain in effect for a period of three months following the Expiration
Date or the Early Termination Date, whichever is applicable, of this
Agreement.
2. The Certificates.
----------------
A. The Certificates shall be subject to the terms and conditions set
forth on Attachment B hereto, and MyPoints shall be responsible for
------------
informing and advising consumers that participate in the Program of
the terms and conditions of the Certificates.
B. As of the earlier of the Expiration Date or the Early Termination
Date, MyPoints shall cease all distribution of Certificates, as well
as cease all promotion of United's involvement in the Program. Any and
all Certificates purchased by MyPoints but not distributed to its
members will remain valid (for the purposes provided for in the next
sentence) but are non-refundable and no longer eligible for
distribution under the Program. MyPoints may, however, with United's
prior written consent, give Certificates to its personnel for non-
business travel.
C. MyPoints agrees that it will only distribute Certificates pursuant to
the Program and will not distribute the Certificates in any manner
inconsistent with the terms and conditions of
1 of 20
this Agreement or the attachments hereto, and MyPoints further agrees
that it will not issue, sell or otherwise convey Certificates in any
manner, including, without limitation, pursuant to its offline
services group.
D. MyPoints acknowledges and agrees that once a Certificate has been
distributed to a consumer pursuant to the Program, MyPoints cannot
control the consumer's subsequent use of such Certificate. MyPoints'
rights under this Agreement are solely for the purchase of
Certificates under this Agreement for distribution pursuant to the
Program.
E. MyPoints understands and agrees that it is solely responsible for the
appropriate use and control of the Certificates once they have been
provided to MyPoints.
F. MyPoints shall establish its own internal control systems to protect
against the improper distribution of Certificates or any other
activity that is inconsistent with this Section 2. If either party
---------
discovers or learns of any improperly distributed Certificates or
other activity inconsistent with this Section 2, such party shall so
---------
advise the other party and cooperate with the other party in resolving
the matter. MyPoints shall prevent any Certificates that it purchases
under this Agreement from being brokered or otherwise used for
corporate travel or flight upgrades on United, or any of its Star
Alliance or other airline partners, by employees or agents of
MyPoints. MyPoints agrees to provide United and its agents, upon three
business days prior notice from United, with access during normal
business hours to such documents and other records as United may
reasonably request in order to confirm that MyPoints is in compliance
with its obligations in this Section 2F (an "Audit"); provided,
---------- ----- --------
however, that United may not conduct an Audit more than one time in
-------
any quarterly period during the term of this Agreement.
3. Purchase of Certificates.
------------------------
A. Beginning on the Effective Date and terminating on the earlier of the
Expiration Date or the Early Termination Date, United, by itself or
through an agent, agrees to sell Certificates to MyPoints and MyPoints
agrees to purchase from United, at the prices and on the terms and
conditions as set forth in this Agreement and the attachments hereto,
Certificates, that are to be distributed exclusively to qualified
consumers desiring to participate in the Program.
B. (i) MyPoints may purchase a maximum of 40,000 Certificates from United
or its affiliates each month during the term of this Agreement, on the
terms and subject to the conditions set forth on Attachment B.
------------
Notwithstanding the foregoing, United may reduce the maximum number of
Certificates MyPoints may purchase upon 72 hours notice, provided,
--------
that in no event will United reduce the number of Certificates
MyPoints may purchase below 25,000 Certificates each month.
MyPoints may re-order and pre-pay for additional Certificates during
the term of this Agreement, on the same terms and subject to the same
conditions, in subsequent blocks of not less than 500 Certificates of
each category of Certificates ordered (for example, each type of
discount travel certificate, each type of companion travel certificate
and each type of roundtrip travel certificate). Notwithstanding the
foregoing, MyPoints may re-order Certificates with a per Certificate
price in excess of $200 in blocks of not less than 100 Certificates.
United shall provide MyPoints with the Certificates promptly after
receiving MyPoints' payment for such re-ordered Certificates.
2 of 20
4. Payment.
-------
A. Exclusive of any and all applicable taxes and surcharges levied,
MyPoints shall pay United the amounts described on Attachment B,
------------
subject to the terms and conditions described therein. United shall
have the right, upon 30 days prior written notice, to change the terms
and conditions of the Certificates, except as otherwise provided in
the next sentence. In addition, beginning on the date that is six
months from the Effective Date and continuing through the term of this
Agreement, United shall have the right to increase the individual
price of each Certificate set forth herein one time in an amount not
to exceed the greater of $5 or 15%; provided, however, that in no
-------- -------
event will the prices of Certificates exceed the lowest prices offered
by United to any other third party who has entered into an agreement
with United on terms substantially similar to those described herein
(including, without limitation, substantially similar volume
commitments and terms and conditions for the Certificates) to offer
travel certificates pursuant to an incentive loyalty program.
Notwithstanding the foregoing, United's obligation in the previous
sentence shall not apply to any special promotions United may offer
from time to time nor shall it apply to any agreement United may have
entered into prior to the date hereof.
B. MyPoints shall pay all applicable sales, use or excise taxes, but no
party shall pay any taxes or tax-related surcharges determined by
another party's income, net worth, franchise, property or purchases,
which shall be borne solely by that other party.
C. (i) MyPoints will pay all amounts due in full prior to the issuance
of any Certificates. MyPoints shall remit its pre-paid orders for
Certificates, in the block amounts and at the fees specified herein,
by wire transfer of immediately available funds to an account so
designated by United in writing.
(ii) Upon receipt of payment, United shall promptly send the
Certificates to MyPoints.
D. All Certificate orders must be approved by United prior to
fulfillment. Certificates, once issued to MyPoints, will be re-issued
to MyPoints if lost for a fee of USD $25.00 per Certificate that must
be voided and re-issued. Certificates that are lost, stolen or
otherwise misplaced by consumers will not be replaced by United, and
MyPoints shall not replace any Certificates lost by, stolen from or
otherwise misplaced by consumers. Certificates have no cash or other
value. The Certificates are not refundable by United, but may be
refundable by MyPoints to consumers. Certificates are not
transferable, except as otherwise provided by the terms and conditions
on the Certificates.
5. Promotion.
---------
A. United shall have full editorial and creative control over all
communications contemplated by this Article 5 and MyPoints shall
---------
submit copy and layout of all marketing, advertising and promotional
materials (including e-mail correspondence) featuring the use of
United's or any of its affiliate's or any other names, logos,
logotypes, insignia, service marks, trademarks, trade names, trade
dress, copyrights, or any other intellectual property for review at
least 72 hours prior to publication, printing or other broadcast.
Except as provided below, MyPoints shall not directly or indirectly
refer or associate United or any of its parents, subsidiaries,
affiliates or agents, with any solicitation, mailing or customer list
unless otherwise authorized by the appropriate party hereto in
advance, in writing, in each instance.
B. During the term of this Agreement, MyPoints shall be entitled to list
United as a redemption partner in press releases and other Program
materials relating to the Program.
3 of 20
For example, MyPoints will mention United in the following context:
Rewards are provided by premier brands, including United [and a list
of redemption partners].
C. Within 30 days of the date hereof, MyPoints shall make a direct
announcement to all of its Program members to the effect that United
is the official airline redemption partner of MyPoints and that
members of the Program can now redeem their points for discounted
travel on United.
D. United shall be featured on MyPoints' website and in its general
communications with its members throughout the term of this Agreement
in a manner that is no less prominent than any other MyPoints partner,
including, without limitation, Barnes & Noble, Hilton, Macy's,
Blockbuster and the Olive Garden.
E. For a period of ninety days from the date hereof (the "Promotional
-----------
Period"), MyPoints agrees to promote United as its official airline
------
redemption partner through special redemption emails to participants
in the Program. In addition, MyPoints further agrees to promote United
in all general communications to its members during the Promotional
Period. Upon expiration of the Promotional Period, MyPoints agrees to
promote United in the manner contemplated by Section 5D above.
----------
6. Exclusivity.
-----------
A. During the term of this Agreement, MyPoints and its affiliates agree
not to enter into any contract, agreement or any other arrangement
whatsoever with another airline company or other company that offers
air travel tickets, certificates or air miles in any form to provide
any of the foregoing services without United's prior written consent,
which may be withheld in United's sole discretion. MyPoints further
agrees, subject to Section 6D below, not to amend or change the terms
----------
of, or expand or supplement the activities conducted in any manner
under the following agreements: (i) the agreement dated June 11, 1998
between MyPoints (f/k/a Intellipost Corporation) and Alaska Airlines,
Inc. (the "Alaska Agreement"); (ii) the agreement dated February 2,
----------------
2001 between MyPoints and Lifestyle Vacation Incentives (the
"Lifestyle Agreement"); and (iii) the agreement dated July 24, 2000
-------------------
between MyPoints and HMI, Inc. (the "VacationMiles Agreement" and
-----------------------
together with the Alaska Agreement and the Lifestyle Agreement
collectively referred to as the "Excluded Agreements"). MyPoints
-------------------
further agrees that none of the activities currently conducted within
MyPoints Offline Services (f/k/a Alliance Development Group) ("Offline
-------
Services") will be promoted, marketed, featured, affiliated or
--------
participate in any way in the Program. Except for the Excluded
Agreements and agreements within Offline Services, MyPoints represents
and warrants that neither it nor any of its affiliates has any
existing contract, agreement or other arrangement of any type with any
other airline company or other company that offers air travel tickets,
certificates or air miles in any form to provide any of the foregoing
services.
B. Within 30 days of the date hereof, United shall have the right to
require MyPoints to terminate, fail to renew (and no longer perform
under) or amend the VacationMiles Agreement (such that MyPoints will
no longer have the right to offer air travel tickets, certificates or
air miles in any form pursuant thereto); provided, however that if
-------- -------
MyPoints chooses to terminate or fail to renew the VacationMiles
Agreement, MyPoints may enter into a new agreement with HMI, Inc. not
otherwise inconsistent with the terms of this Article VI.
----------
C. During the term of this Agreement, if MyPoints wishes to expand or
supplement the activities conducted in any manner under the Lifestyle
Agreement, United shall have a right of first refusal to provide such
services as expanded or supplemented.
4 of 20
D. MyPoints agrees not to market, feature or promote in anyway any other
airline company (other than Alaska) on its website or in connection
with the Program. Until October 1, 2001, MyPoints may not engage in
target/direct marketing that is not otherwise connected with the
Program on behalf of Delta Airlines or American Airlines without
United's prior written consent, which shall not be unreasonably
withheld. After October 1, 2001, if United pays to MyPoints $100,000
for each quarter thereafter, MyPoints agrees not to engage in
target/direct marketing that is not otherwise connected with the
Program on behalf of Delta Airlines or American Airlines without
United's prior written consent, which shall not be unreasonably
withheld.
7. Use of Customer Information. Subject in all instances to MyPoints' then
---------------------------
current privacy policy and, to the extent applicable, to each predecessor
policy and to applicable law, MyPoints shall provide (i) aggregated data on
point of redemption (by zip code) to United on a monthly basis for all
participants in the Program that redeem points for Certificates, and (ii)
the responses to the questions set forth under "Travel-Related Questions"
on Attachment C from each Program participant that redeems points for
------------
Certificates. With respect to clause (ii) above, United agrees to cooperate
-----------
with MyPoints, and MyPoints agrees within thirty days of the date of this
Agreement, to develop a plan to imbed the "Travel-Related Questions" into
the Certificate redemption process and, upon completion of such plan,
MyPoints agrees to use its commercially reasonable efforts to implement
such plan as promptly as practicable. Notwithstanding the foregoing, until
such time as MyPoints has imbedded the "Travel-Related Questions" into the
Certificate redemption process, MyPoints shall use its commercially
reasonable efforts to collect the "Travel-Related Questions" through any
other means available to it. In addition, MyPoints agrees to use its
commercially reasonable efforts to obtain any additional information United
may request from time to time to the extent such information is consistent
with MyPoints' then current privacy policy and, to the extent applicable,
each predecessor policy and applicable law. With respect to clauses (i) and
-----------
(ii) above, United and MyPoints agree to share equally any increased costs
----
reasonably incurred by MyPoints in collecting such data. If United requests
information not contemplated by clauses (i) and (ii) above, the sole cost
----------- ----
of collecting such data shall be borne by United. MyPoints further grants
to United and its affiliates a non-transferable, non-exclusive, world-wide,
perpetual, irrevocable, royalty-free license to use the information
contemplated by this Section 7 or any information United may request
---------
MyPoints to collect pursuant to this Section 7.
---------
8. Other Terms and Conditions.
--------------------------
A. All tickets issued upon the redemption of Certificates distributed
pursuant to the Program will be subject to the tariffs, United's
contract of carriage, ticket terms and re-accommodation policies, and
all other rules and regulations applicable to the public for the
applicable fare class in which the ticket is issued. United's
obligation to issue tickets upon redemption of Certificates
distributed pursuant to the Program is subject to the terms and
conditions of this Agreement.
B. All tickets issued by United pursuant to Certificates distributed
pursuant to the Program are exclusive of all taxes and fees applicable
to the passenger itinerary, including passenger facility charges,
international departure taxes and fees, federal inspection fees,
federal excise segment taxes, and any other applicable taxes or fees,
which will be calculated and assessed at the time of ticketing and
which will be the responsibility of the passenger redeeming the
Certificate(s).
C. All Certificates distributed pursuant to the Program, and subsequently
redeemed, are subject to the rules, regulations, terms and conditions
described herein. Other rules, regulations, terms and conditions, as
determined by the parties hereto, may apply.
5 of 20
D. United and all of its parents, subsidiaries, affiliates and agents
shall not be responsible or liable for any products or services that
are offered by MyPoints.
E. MyPoints shall be solely responsible for communicating directly with
any consumer to resolve any problems that the consumer may have
regarding the Program. If a consumer contacts United about the Program
or any Certificates distributed pursuant thereto, then United shall
direct the consumer to MyPoints so that MyPoints may address and
resolve the problem on behalf of the consumer.
F. This Agreement, including Attachments A, B and C hereto, constitute
------------- - -
the entire agreement and understanding of the parties on the specific
subject matter hereof, and, as of the Effective Date, supersedes all
prior agreements, whether written or oral, between the parties
concerning the specific subject matter hereof. This Agreement may be
modified only by further written agreement signed by all of the
parties hereto.
6 of 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the Effective Date.
MYPOINTS.COM, INC. UNITED AIR LINES, INC.
By: /s/ John Fullmer By: /s/ Douglas A. Hacker
---------------------------- -------------------------------
Name: John Fullmer Name: Douglas A. Hacker
Title: Chief Executive Officer Title: Executive Vice President-Finance and
Planning and Chief Financial Officer
7 of 20
ATTACHMENT A
Standard Terms And Conditions
-----------------------------
8 of 20
ATTACHMENT A
1. Confidentiality
A. Except in any proceeding to enforce any of the provisions of this
Agreement, neither party (the "User") shall, without the prior written
----
consent of the other party (the "Owner"), publicize or disclose to any
-----
third party, either directly or indirectly, any of the following (the
"Confidential Information"):
------------------------
(i) This Agreement or any of the terms or conditions of this
Agreement, including the attachments hereto; or
(ii) Any confidential or proprietary information or data, either oral
or written, received from and designated as such by the Owner.
B. If either party is served with a subpoena or other legal process
requiring the production or disclosure of any Confidential
Information, then that party, before complying, shall immediately
notify the Owner and shall use its reasonable efforts to permit the
Owner a reasonable period of time to intervene and contest production
or disclosure.
C. Upon termination or expiration of this Agreement, the User must return
or destroy all copies of any and all Confidential Information received
from the Owner.
D. Each party shall restrict all Confidential Information provided to its
respective employees and agents on a "need to know" basis.
E. If the User breaches this Article 1, then the Owner may terminate this
---------
Agreement immediately, upon written notice to the User.
F. Except as expressly provided herein, each party shall use the
Confidential Information of the other party solely to perform its
obligations under this Agreement.
G. Each party hereto acknowledges that any failure by it to maintain the
complete confidentiality of the Confidential Information hereunder
will have a direct and severe adverse impact on the other party's
business, which will subject the other party to irreparable harm, and
that the other party may, without jeopardizing any other rights or
remedies such other party may have, seek a court order or injunction
without further notice to protect the confidentiality of its
information and to halt any unauthorized disclosure thereof.
H. The confidentiality obligations of the parties hereto pursuant to this
Article 1 are of a continuing nature and shall survive the termination
---------
or expiration of this Agreement.
2. Logos and Service Marks
A. Neither party hereto shall use any of the other party's names, logos,
logotype, insignia, service marks, trademarks, trade names, trade
dress, copyrights, corporate goodwill or other proprietary
intellectual property, including without limitation the names "United
Air Lines, Inc.," "United Airlines," "United," "United NewVentures,"
"Mileage Plus," or "MyPoints," in any marketing, advertising or
promotional collateral, including without limitation credit card or
similar solicitations (which are expressly forbidden), except when
each specific use has been approved in advance, in writing, by the
other party. When such approval is granted, either party shall comply
with any and all conditions that the other party may impose to protect
the use of any of that party's names, logos, logotype, insignia,
service marks, trademarks, trade names, copyrights, corporate goodwill
or other proprietary intellectual property. All goodwill accruing as a
result of the use of a party's names, logos, logotype, insignia,
service marks, trademarks, trade names, trade dress and copyrights,
shall inure to the benefit of such party.
B. Except as expressly provided herein, no right, property, license,
permission or interest of
9 of 20
ATTACHMENT A
any kind in the use of any name, logo, logotype, insignia, service
mark, trademark, trade name, copyright, corporate goodwill or other
proprietary intellectual property owned by United or any of its
affiliates or MyPoints is intended to be given to or acquired by the
other party hereto, its agents, servants, and/or other employees by
the execution or performance of this Agreement.
3. Title to Data
United acknowledges that MyPoints has full title and complete ownership
rights to data and information developed by MyPoints or any of its
affiliates, wherever located, and such title shall remain with MyPoints
during the term of this Agreement. Full title and complete ownership rights
to data and information developed by United or any of its affiliates,
wherever located, shall remain with United. MyPoints understands and agrees
that such data and information constitutes United's proprietary information
whether or not any portion thereof is or may be validly copyrighted. Any
membership lists, labels, data or other compiled membership information
supplied to MyPoints in any form by United or any of its affiliates and any
and all copies thereof are to be used by MyPoints exclusively in its
performance of its obligations pursuant to this Agreement as agreed to by
United, and will not be otherwise used, sold, licensed, leased,
transferred, e-mailed, bartered, traded, stored in a retrieval system,
duplicated, or transmitted, in any form by any means, without prior written
consent of United.
4. Disclaimer
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE PARTIES EXPRESSLY DISCLAIM ANY
AND ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY, DESIGN, TITLE, NON-
INFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE. TO THE EXTENT THAT A
PARTY MAY NOT, AS A MATTER OF LAW, DISCLAIM ANY WARRANTY, THE PARTIES AGREE
THAT THE SCOPE AND DURATION OF ANY SUCH WARRANTY SHALL BE THE MINIMUM
PERMITTED UNDER APPLICABLE LAW.
10 of 20
ATTACHMENT A
5. Indemnification
A. Except as otherwise provided for in this Agreement, each party (the
"Indemnitor") shall indemnify, defend and hold harmless the other
----------
party, its subsidiaries and affiliates, and their officers, directors,
employees and agents (the "Indemnitees") from and against any and all
-----------
liabilities, damages, losses, expenses, claims, demands, suits, fines,
or judgments, including but not limited to reasonable attorneys' fees,
costs, and related expenses, which may be suffered by, accrue against,
or be recovered from any of the Indemnitees resulting from any claim
or suit brought by any third party or parties arising out of or in
connection with:
(i) Any failure of performance or wrongful performance by the
Indemnitor of any of its obligations under this Agreement; or
(ii) Any negligence or willful misconduct of the Indemnitor relating
to, arising out of or in connection with this Agreement.
B. Notwithstanding any language in this Agreement to the contrary,
MyPoints shall indemnify, defend and hold harmless United or any of
its affiliates from and against any liability resulting from any U.S.
federal excise tax, interest or penalty due by law under this
Agreement, and MyPoints shall reimburse United or any of its
affiliates if any of them have properly remitted such tax, interest or
penalty on behalf of MyPoints.
C. For the purposes of this Article 4, United and each of its affiliates
---------
shall be deemed the Indemnitees of MyPoints.
D. The indemnity, defend and hold harmless obligations of the parties
pursuant to this Article 4 are of a continuing nature and shall
---------
survive the expiration of this Agreement.
E. The Indemnitor's obligations are conditioned upon the Indemnitee: (i)
giving the Indemnitor prompt written notice of any claim, action, suit
or proceeding for which the Indemnitee is seeking indemnity; (ii)
granting control of the defense and settlement to the Indemnitor
(provided that no claim, action, suit or proceeding shall be settled
without the prior written consent of the Indemnitee, which consent
shall not be unreasonably withheld or delayed); and (iii) reasonably
cooperating with the Indemnitor at the Indemnitor's sole expense.
Notwithstanding anything contained herein to the contrary, the
Indemnitee retains the right to participate in the defense of and/or
settlement negotiations related to any indemnifiable claim with
counsel of its own selection at its sole cost and expense.
6. Governing Law and Jurisdiction
This Agreement and any dispute arising under or in connection with this
Agreement, including any action in tort, shall be governed by and construed
in accordance with the laws of the State of Illinois, U.S.A., without
regard to any conflicts of law principles which may direct the application
of the laws of any other jurisdiction. The courts of the State of Illinois,
U.S.A., shall have non-exclusive jurisdiction to settle any dispute
relating to, arising out of or in connection with this Agreement.
7. Compliance with Applicable Laws
Each party hereto shall comply with all applicable federal, state and local
laws and regulations with respect to its performance under this Agreement.
11 of 20
ATTACHMENT A
8. EXCLUSION OF CONSEQUENTIAL DAMAGES
EXCEPT AS PROVIDED UNDER "INDEMNIFICATION," ABOVE, NEITHER PARTY SHALL BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
INCLUDING LOST REVENUES, LOST PROFITS, OR LOST PROSPECTIVE ECONOMIC
ADVANTAGE, WHETHER OR NOT FORESEEABLE AND WHETHER OR NOT BASED ON CONTRACT,
TORT, WARRANTY CLAIMS OR OTHERWISE, ARISING FROM ANY PERFORMANCE OR FAILURE
TO PERFORM UNDER THIS AGREEMENT, AND EACH PARTY HEREBY RELEASES AND WAIVES
ANY CLAIMS AGAINST THE OTHER REGARDING SUCH DAMAGES.
9. Non-Assignment
Neither party shall assign or otherwise transfer any of its rights or
obligations under this Agreement to any third party without the prior
written consent of the other party hereto (the "Non-Assigning Party"),
-------------------
except that either party (the "Assigning Party") may assign this Agreement
---------------
to its direct or indirect parent corporation, or any majority-owned
subsidiary or affiliate of its parent corporation or its holding
corporation, without consent of the Non-Assigning Party; provided, however,
-------- -------
that such parent corporation, subsidiary or affiliate assumes all of the
obligations of the Assigning Party hereunder. Any violation of this
provision will be cause for immediate termination of this Agreement or, at
the option of the Non-Assigning Party, the Non-Assigning Party may declare
the assignment of any of the rights or obligations under this Agreement
null and void as of the date of the purported assignment. This Agreement
shall be binding upon and shall inure to the benefit of the permitted
successors and assigns of each party hereto.
10. Force Majeure
Except for any payment obligations, neither party shall be liable for
delays or failure in performance under this Agreement caused by acts of
God, war, strike, labor dispute, work stoppage, fire, act of government, or
any other cause, whether similar or dissimilar, beyond the control of that
party.
11. Relationship of the Parties
This Agreement is not intended to nor shall it be construed to create or
establish any employer-employee, agency, partnership, or joint venture
relationship between the parties. Neither party shall have any right to
enter into any contract or commitment in the name of the other party, to
incur any obligation for, create any liability for, or bind the other party
in any respect whatsoever.
12. Non-Waiver
Any previous waiver, forbearance, or course of dealing shall not operate as
or be deemed a waiver of any subsequent default or breach and will not
affect the right of either party to require strict performance and
observance of any provision of this Agreement.
13. Post-Expiration Rights
All obligations of each party that have accrued before expiration of this
Agreement or that are of a continuing nature, including without limitation
any indemnity or confidentiality provisions herein, shall survive the
expiration of this Agreement.
12 of 20
ATTACHMENT A
14. Severability
Should any clause or any part of any clause of this Agreement be found
invalid or unenforceable, the remainder of this Agreement shall continue to
remain valid and enforceable unless the provision in its modified state
would materially and adversely affect the essence of the Agreement. The
invalid or unenforceable provision shall be deemed modified to the limited
extent required to permit its enforcement in a manner which comes as close
as possible to achieving the intended result of the original provision.
15. Captions
The captions appearing in this Agreement have been inserted as a matter of
convenience and in no way define, limit or enlarge the scope of this
Agreement.
13 of 20
ATTACHMENT A
16. Notices
Any notices required to be sent under this Agreement shall be sent by first
class mail, postage prepaid, or by a nationally recognized overnight
courier. Notices sent via electronic means (e.g., e-mail or facsimile) will
be effective immediately if received prior to 5:00 p.m. local time of the
recipient. All other notices shall be effective the first business day
after receipt. Notices shall be addressed as follows:
---------------------------------------------------------------------------------------------
If to MyPoints, address as follows: If to United, address as follows:
MyPoints.com United Air Lines, Inc.
100 California Street, 12/th/ Floor 1200 E. Algonquin Road
San Francisco, CA 94111 P.O. Box 66100
Attn: Layton Han Elk Grove Township, IL 60007
Facsimile: Attn: Scott Garner
Facsimile: (847) 700-9569
---------------------------------------------------------------------------------------------
14 of 20
ATTACHMENT B
TRAVEL REDEMPTION OPTIONS FOR MYPOINTS CUSTOMERS
Type Description ($ Fare Restriction Other Restriction Cost to MyPoints
off or % off)
Discount Travel Certificates
1 $ 25.0 >$200, WW None $ 8.0
2 $ 50.0 >$300, WW None $ 15.0
3 $ 50.0 >$200, WW None $ 30.0
4 $ 75.0 >$350, WW None $ 45.0
5 $100.0 >$450, WW None $ 70.0
Companion Travel Certificates
6 25% Coach, US None $ 50.0
7 50% Coach, US None $125.0
8 75% Coach, US None $175.0
9 100% Coach, US None $250.0
10 25% Coach, NA None $100.0
11 50% Coach, NA None $200.0
12 75% Coach, NA None $300.0
13 100% Coach, NA None $450.0
Roundtrip Travel Certificates
14 100% Q/V Class, US None $380.0
15 100% Q/V Class, Shuttle None $140.0
Note: US = Contiguous US 48 States; NA = North America including Hawaii and
Alaska; WW = Worldwide; Shuttle = Any United Shuttle Flight
Note: In general all standard mileage plus award travel restrictions would
apply to these certificates in addition to ones listed above
15 of 20
ATTACHMENT B
Terms and Conditions of the Certificates
----------------------------------------
United Discount Travel Certificates
- -----------------------------------
1. Valid Carrier: This discount may be applied to United Airlines, United
Shuttle(R), United Express(R) operated flights and United Ground Link(R),
but not to flights operated by other airlines (such as United-marketed code
share and Star Alliance flights).
2. Valid Routing: To take advantage of this discount you must begin your
travel in the 50 United States, Puerto Rico or U.S. Virgin Islands and fly
to any city served by United Airlines, United Shuttle or United Express
worldwide.
3. Allowable Fares: This discount may be used on published United Economy (H,
Q, V or W) class fares of $125 or more. These qualifying fares are the
lower, more restrictive fares for travel in the economy cabin. Since these
fares are booked in a special class of service, they might not be available
on all flights or on all days of the week when you travel.
4. Restricted Fares: This discount may not be used on the following fare
types: United First(R) (F, A, P) class, United Business (C, D) class,
United Economy (Y, B, M) class, companion, travel industry, G class,
contract, bulk, convention, tour conductor, children, family plan,
government, group, military, senior citizen, student, youth, infant, tour
basing, Around-the-World, Circle-the-Pacific, Visit USA Fares or any non-
published fares.
5. Fare Rules: The published fare you qualify for depends on what class of
service is available on the days you travel. Some markets may have lower
fares available without the discount. Keep in mind, you must travel round-
trip on United (open jaw & circle trips are allowed too). The discount may
not be used when you travel one way. Other restrictions may apply.
6. Blackout Dates: This discount is not allowed on certain days of the year
depending on your destination. To check these blackout days (which are the
same as United's Mileage Plus blackouts) contact United Airlines or your
travel professional.
7. Mileage Plus Accrual: The passenger may accrue Mileage Plus miles, even
with this discount.
8. Upgrades: To determine if an upgrade certificate may be used together with
this discount, refer to the terms, conditions and booking class
restrictions associated with each upgrade.
9. Ticketing: You may redeem this certificate using United's Electronic
Ticketing by calling United Airlines or your travel professional. You may
also ticket by mail or through a United Airlines city ticket office or
airport location. Discount only applies when ticket is purchased within the
50 United States, Puerto Rico or U.S. Virgin Islands. Certificate must be
surrendered at time of initial ticketing and can not be redeemed via the
internet.
10. Changes/Refunds: The rules of the United Economy fare you purchase
determine what changes or refunds are allowed. Any refund due is based on
the amount actually paid. The certificate discount may not be reapplied
toward the purchase of another ticket when exchanging or refunding your
original ticket, except when the original ticket qualifies for a reduced
fare (guaranteed airfare rule applies). Check with United Airlines or your
travel professional.
11. Other Important Notes: This discount may only be applied to the purchase of
one new ticket and may not be applied to previously ticketed reservations.
Certificate has no cash value and may not be altered or duplicated. Lost,
stolen, expired or destroyed certificates will not be replaced. Only one
discount certificate, discount voucher or discount may be used per ticket.
The senior citizen 10% discount may not be used with this discount. This
certificate is void if sold or bartered.
United Companion Travel Certificates:
- -------------------------------------
1. Valid Carrier: This discount may be applied to United Airlines, United
Shuttle, United Express operated flights and United Ground Link, but not to
flights operated by other airlines (such as United-marketed code share and Star
Alliance flights).
16 of 20
ATTACHMENT B
2. Valid Routing: To take advantage of this discount you must begin your travel
in the 50 United States, Puerto Rico or U.S. Virgin Islands and fly to a city
served by United Airlines, United Shuttle or United Express. Some certificates
are valid for travel only within the 48 continental United States. Other
certificates may permit travel outside the continental United States (see
certificate for complete details).
3. Allowable Fares: Paid ticket must be a valid, published fare in Economy
Class only with a minimum fare value of $300. Seats are capacity controlled and
certain classes may not be available on all flights or on all days of the week
when you travel.
4. Restricted Fares: This discount may not be used when the paid ticket is one
of the following fare types: United First (F,A,P) or United Business (C,D),
travel industry, G class, contract, bulk, convention, tour conductor, children,
family plan, government, group, military, senior citizen, student, youth,
infant, tour basing, Around-the World, Circle-the Pacific, Visit USA Fares or
any non-published fare.
5. Fare Rules: Companion ticket is only valid for travel when accompanied by
the fare-paying passenger. Travel must be roundtrip on United, with both
passengers traveling together on the same itinerary. Both passengers must
confirm reservations, purchase tickets and travel together on the same flights,
on the same dates, and in the same cabin of service. No further discounts may be
used toward the fare paying passenger's ticket.
6. Blackout Dates: This discount is not allowed on certain days of the year
depending on your destination. To check these blackout days (which are the same
as United's Mileage Plus blackouts) contact United Airlines or your travel
professional.
7. Mileage Plus Accrual: The passenger may not accrue Mileage Plus miles while
traveling on this companion ticket.
8. Upgrades: Upgrades may not be used when traveling on this companion ticket.
9. Ticketing: You may redeem this certificate using United's Electronic
Ticketing by calling United Airlines or your travel professional. You may also
ticket by mail or through a United Airlines city ticket office or airport
location. Discount only applies when ticket is purchased within the 50 United
States, Puerto Rico or U.S. Virgin Islands. Certificate must be surrendered at
time of initial ticketing and can not be redeemed via the internet.
10. Changes/Refunds: Once ticketed, companion ticket is nonrefundable. You may
change your flight dates and time for a $100 service fee. No changes to origin
or destination are allowed.
11. Other Important Notes: This discount may only be applied to the purchase of
one new ticket and may not be applied to previously ticketed reservations.
Certificate has no cash value and may not be altered or duplicated. Lost,
stolen, expired or destroyed certificates will not be replaced. This certificate
is void if sold or bartered.
17 of 20
ATTACHMENT B
United Roundtrip Travel Certificates:
- -------------------------------------
1. The Certificates will be offered to members of the Program during the term
of this Agreement. Members accumulate points that may be redeemed for
Certificates.
2. Certificates are redeemable for discounted round-trip air transportation on
United, United Shuttle(R) ,United Express(R) and United Ground Link in the
48 contiguous United States, subject to the following travel restrictions:
A. Valid for travel for twelve months from the date of issuance.
B. Travel with this certificate is not allowed on certain days of the
year depending on your destination. To check these blackout days
(which are the same as United's Mileage Plus blackouts) contact United
Airlines or your travel professional.
3. 14 day advance purchase ticketing is required, and ticketing must take
place at any designated United ticketing location or by mail. Tickets must
be issued using United Airline ticket stock.
4. Round-trip travel and a Saturday night stay is required (except for Las
Vegas, Reno and certain ski cities where a 2 night minimum stay is
required). The maximum stay is 30 days.
5. Tickets, once purchased/ticketed, are non-refundable, non-transferable and
non-endorsable. Certificates are non-refundable and non-transferable,
except as provided herein and on the Certificates.
6. Travel is booked United Economy(R), in "W" class of service, subject to
availability.
7. Redemption is limited to one Certificate per ticket.
8. Tickets issued pursuant to the redemption of Certificates are valid for
travel on United, United Shuttle(R), United Express(R) and United
Ground Link.. Certificates are not redeemable for travel on United-marketed
code share flights and Star Alliance flights.
9. No stopovers or open jaws or circle trips are permitted on tickets redeemed
pursuant to Certificates.
10. Not combinable with any other offers. Other restrictions may apply as
determined by the parties hereto.
Other Terms and Conditions:
- --------------------------
1. Certificates are non-refundable by United, but are refundable by MyPoints,
to the consumer. The Certificates are non-transferable, except as provided
on the Certificates. Certificates, if lost, will only be voided and re-
issued upon payment of a USD $25.00 fee per voided Certificate and re-
issued a new Certificate. MyPoints is solely responsible for the
Certificates once they are printed.
2. Qualified Mileage Plus Members traveling on tickets issued upon redemption
of a Certificate are eligible to earn Mileage Plus Miles in accordance with
the rules and regulations of the Mileage Plus Program.
3. Certificates are void if altered and where prohibited by applicable law.
Certificates are redeemable only for air transportation and have no cash
value, and are void if sold for cash or other consideration.
4. Certificates are for individual and personal use only, and may not be used
for business or corporate travel.
5. Previously purchased tickets may not be issued pursuant to the redemption
of Certificates.
6. Certificates will not be replaced if lost, stolen or destroyed.
18 of 20
ATTACHMENT B
7. All tickets issued by United pursuant to the redemption of Certificates are
exclusive of all taxes and fees applicable to the passenger itinerary,
including passenger facility charges, international departure taxes and
fees, federal inspection fees, federal excise segment taxes, and any other
applicable taxes or fees, which will be calculated and assessed at the time
of ticketing and which will be the responsibility of the passenger
redeeming the Certificate(s). Such tickets are non-refundable.
8. All tickets issued upon the redemption of Certificates issued pursuant to
the Program will be subject to the tariffs, United's contract of carriage,
ticket terms, and re-accommodation policies, and all other rules and
regulations applicable to the public for the applicable fare class ("W") in
which the ticket is issued. Certificates issued pursuant to the Program are
subject to the terms and conditions of this Agreement and are subject to
certain blackout dates (see above) and to the availability of seats on the
specified dates and for the specified class of service.
9. United shall be the final authority on the interpretation of these rules
and regulations.
19 of 20
ATTACHMENT C
Customer Data
-------------
Basic Demographic Information
. Zip Code
Travel-Related Questions
. How many air round trips have you taken in the past 12 months for business
purposes? [None][1-2] [3-4][5-7][8-11][12-24][More than 25]
. How many air round trips have you taken in the past 12 months for leisure
purposes? ? [None][1-2] [3-4][5-7][8-11][12-24][More than 25]
. Which airline do you use most frequently?
. Please indicate your interest in traveling: [Not Interested][Somewhat
Interested][Very Interested]
. Have you purchased Travel Services over the Internet in the past 12 months?
[Yes][No]
. Which of the following travel services have you purchased over the Internet
in the past 12 months? [airline] [car rental] ][hotel] [package tours]
[travel books] [luggage] [other]
20 of 20
