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Agreement and Plan of Merger

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Title:

Agreement and Plan of Merger

Entities:

InterActiveCorp

Date:

2002

Size:

Preview shows 73KB of 198KB total

Price:

$75

ID:

#1128001

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AGREEMENT AND PLAN OF MERGER

AMONG

USA INTERACTIVE,

GEFFEN ACQUISITION SUB INC.,

UDATE.COM, INC.

AND, FOR THE PURPOSES OF SECTION 7.8 AND
ARTICLES X AND XI HEREOF,

TERRENCE LEE ZEHRER

AND

ATLAS TRUST COMPANY (JERSEY) LIMITED, AS
TRUSTEE OF THE INTERNET INVESTMENTS INC.
EMPLOYEE SHARES TRUST

DATED AS OF DECEMBER 19, 2002

TABLE OF CONTENTS

			Page
ARTICLE I THE MERGER			1
	1.1	The Merger	1
	1.2	Effective Time	1
	1.3	Effects of the Merger	1
ARTICLE II CONVERSION OF SHARES			1
	2.1	Conversion of Shares	1
	2.2	Surrender and Payment	2
	2.3	Dissenting Shares	4
	2.4	Stock Options and Warrants	4
	2.5	Escrow Amount	5
	2.6	Withholding Rights	5
ARTICLE III THE SURVIVING CORPORATION			6
	3.1	Certificate of Incorporation	6
	3.2	Bylaws	6
	3.3	Directors and Officers	6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY			6
	4.1	Corporate Organization	6
	4.2	Capitalization	7
	4.3	Authority; No Violation	8
	4.4	Consents and Approvals	9
	4.5	SEC Reports and Financial Statements	9
	4.6	Broker's Fees	10
	4.7	Absence of Certain Changes or Events	10
	4.8	Legal Proceedings	11
	4.9	Taxes and Tax Returns	11
	4.10	Employees	13
	4.11	Compliance with Applicable Law	14
	4.12	Certain Contracts	14
	4.13	Environmental Liability	15
	4.14	State Takeover Laws	15
	4.15	Intellectual Property; Proprietary Rights; Employee Restrictions	15
	4.16	Insurance	18
	4.17	Fairness Opinion	18
	4.18	Company Information	18
	4.19	No Existing Discussions	18
	4.20	Transactions with Affiliates	18
	4.21	Estimated Expenses	19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT			19
	5.1	Corporate Organization	19
	5.2	Capitalization	19
	5.3	Authority; No Violation	20
	5.4	Consents and Approvals	20
	5.5	SEC Reports and Financial Statements	21
	5.6	Broker's Fees	21
	5.7	Absence of Certain Changes or Events	21
	5.8	Legal Proceedings	22
	5.9	Taxes and Tax Returns	22
	5.10	Compliance with Applicable Law	22
	5.11	Parent Information	22

ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS			23
	6.1	Conduct of Company Business Prior to the Effective Time	23
	6.2	Company Forbearances	23
	6.3	Parent Obligations	25
	6.4	Financial Information	25
	6.5	Taxes	25
	6.6	UK Optionholders	25
	6.7	Expenses	25
	6.8	Data Center	25
	6.9	Merchant Services Agreement	26
	6.10	Noncompetition Agreements	26
ARTICLE VII ADDITIONAL AGREEMENTS			26
	7.1	Regulatory Matters	26
	7.2	Access to Information	27
	7.3	Stockholder Approval	27
	7.4	Employee Benefit Plans	28
	7.5	Indemnification; Directors' and Officers' Insurance	28
	7.6	Further Action; Certain Filings	29
	7.7	Advice of Changes	30
	7.8	No Solicitation; Takeover Proposals	30
	7.9	Transfer Taxes	32
	7.10	Nasdaq Listing	32
	7.11	Additional Agreements	33
	7.12	Additions to and Modifications of the Company Disclosure Schedule	33
	7.13	Broadview Opinion	33
ARTICLE VIII CONDITIONS PRECEDENT			33
	8.1	Conditions to Each Party's Obligation to Effect the Merger	33
	8.2	Conditions to Obligations of the Company	34
	8.3	Conditions to Obligations of Parent	34
ARTICLE IX TERMINATION AND AMENDMENT			36
	9.1	Termination	36
	9.2	Effect of Termination	37
	9.3	Amendment	38
ARTICLE X SURVIVAL PERIOD; INDEMNIFICATION			38
	10.1	Survival	38
	10.2	Indemnification	39
ARTICLE XI GENERAL PROVISIONS			41
	11.1	Closing	41
	11.2	Expenses	41
	11.3	Notices	41
	11.4	Interpretation	43
	11.5	Counterparts; Effectiveness	43
	11.6	Entire Agreement	43
	11.7	Governing Law	43
	11.8	Publicity	43
	11.9	Assignment; Third Party Beneficiaries	43
	11.10	Submission to Jurisdiction; Waivers; Consent to Service of Process	43
	11.11	Enforcement of Agreement	44
	11.12	Waiver of Jury Trial	44

Schedules:
	Company Disclosure Schedule
	Parent Disclosure Schedule
	Estimated Net Working Capital	Schedule A
	Estimated uDate Expenses	Schedule B
	Executive Employment Agreements	Schedule C
	uDate.com, Inc. 2003 Budget	Schedule D
	UK Optionholders	Schedule E
	Major Stockholders' Pro Rata Portions	Schedule F
Exhibits:
	Form of Escrow Agreement	Exhibit A
	Form of Certificate of Incorporation of the Surviving Corporation	Exhibit B
	Form of Legal Opinion of Hale and Dorr LLP	Exhibit C-1
	Form of Legal Opinion of Richards, Layton & Finger	Exhibit C-2
	Form of Legal Opinion of Eversheds	Exhibit C-3
	Form of Legal Opinion of Lawrence Graham	Exhibit D-1
	Form of Legal Opinion of Olsens	Exhibit D-2
	Form of Trust Agreement	Exhibit E
	Form of Rule 145 Letter	Exhibit F
	Form of UK Noncompetition Agreement	Exhibit G
	Form of Zehrer Noncompetition Agreement	Exhibit H
	Form of Legal Opinion of Baxendale Walker	Exhibit I

iii

INDEX OF DEFINED TERMS

Term		Section
2000 Plan		2.4(a)
2001 Plan		2.4(a)
2003 Budget		6.2(d)
Agreement		Recitals
Atlas Escrow Shares		2.5
Audited Financials		8.3(j)
Broadview		4.6
Broadview Opinion		4.17
CERCLA		4.13
Closing		11.1
Closing Date		11.1
Code		Recitals
Company		Recitals
Company Benefit Plans		4.10(a)
Company By-Laws		4.1(a)
Company Capital Stock		4.2(a)
Company Certificate		4.1(a)
Company Common Stock		2.1(a)
Company Contract		4.12(a)
Company Disclosure Schedule		Preamble to Art. IV
Company Employees		7.4(a)
Company ERISA Affiliate		4.10(a)
Company Financial Statements		4.5(b)
Company Insiders		7.8
Company Notes		4.2(a)
Company Preferred Stock		4.2(a)
Company Registered Intellectual Property		4.15(a)
Company SEC Reports		4.5(a)
Company Stock Plans		2.4(a)
Company Stockholder Approval		4.3(a)
Company Stockholder Meeting		7.3
Company Subsidiary		4.1(b)
Confidentiality Agreement		7.2(b)
Damages		10.2(a)
Designated Broker		2.6(b)
DGCL		1.1
Dissenting Shares		2.3
Effective Time		1.2
Employment Agreements		7.12(a)
ERISA		4.10(a)
Escrow Account		2.5
Escrow Agent		2.5
Escrow Agreement		2.5
Escrow Amount		10.2(d)
Escrowed Shares		2.5
Executives		7.13(a)
Exchange Act		4.5(a)
Exchange Agent		2.2(a)

Governmental Entity		4.4
HSR Act		4.4
In-The-Money Options		2.4(a)
Intellectual Property Right		4.15(a)
Indemnified Party		7.5(a)
Indemnitees		10.2(a)
Insurance Policies		4.16
Liens		4.2(b)
Market Value		2.6(b)
Major Stockholders		Recitals
Material Adverse Effect		4.9(d)
Maximum Liability		10.2(b)
Measurement Price		10.2(b)
Merger		1.1
Merger Consideration		2.1(c)
Merger Proceeds		2.1(c)
Merger Sub		Recitals
Merger Sub Common Stock		2.1(b)
NASD		4.4
NASDAQ		2.2(c)
Option		2.4(a)
Option Resale Restriction Agreements		7.13(c)
Option Tax Shares		2.6(b)
Parent		Recitals
Parent Common Stock		5.2
Parent Disclosure Schedule		Preamble to Art. V
Parent Financial Statements		5.5(b)
Parent Material Adverse Effect		5.1
Parent Preferred Stock		5.2
Parent Rights		5.2
Parent SEC Reports		5.5(a)
Parent Stock Plans		5.2
PAYE		2.6(b)
Person		2.2(e)
Personal Element		4.15(g)
Pre-Closing Claim		7.12
Privacy Policies		4.15(g)
Pro Rata Portion		10.2(b)
Proxy Statement		4.4
Registered Intellectual Property		4.15(a)
Restraints		8.1(d)
S-4		4.4
SEC		4.4
Section 16 Information		7.8
Securities Act		4.5(a)
Share		2.1(a)
Share Exchange Ratio		2.1(c)
Signing Price		2.4(a)
Signing Shares		10.2(b)
Stockholders' Agreement		Recitals

Subsidiary		4.1(a)
Superior Proposal		7.8(a)
Surviving Corporation		1.1
Surviving Corporation Common Stock		2.1(b)
Takeover Proposal		7.8(a)
Tax		4.9(c)
Taxes		4.9(c)
Termination Fee		9.2(b)
Threshold Amount		10.2(b)
Transfer Taxes		7.9
Trust		10.2(g)
Trustee		Recitals
UK Optionholders		2.6(b)
Underwater Options		2.4(a)
Unique Identifying Number		4.15(g)
U.S. GAAP		4.5(b)
User Data		4.15(g)
Warrant		2.4(b)
Zehrer		Recitals
Zehrer Escrow Shares		2.5

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of December 19, 2002 (this "Agreement"), among USA Interactive, a Delaware corporation ("Parent"), Geffen Acquisition Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), uDate.com, Inc., a Delaware corporation (the "Company"), and, for purposes of Section 7.8 and Articles X and XI hereof, Terrence Lee Zehrer, an individual ("Zehrer") and Atlas Trust Company (Jersey) Limited (the "Trustee"), as trustee of the Internet Investments Inc. Employee Shares Trust.

W I T N E S S E T H

WHEREAS, the Boards of Directors of each of Parent, Merger Sub and the Company have declared the advisability of this Agreement and approved the strategic business combination transaction provided for herein in which Merger Sub will, subject to the terms and conditions set forth herein, merge with and into the Company, with the Company surviving such merger as a wholly-owned direct subsidiary of Parent; and

WHEREAS, as a condition to the willingness of Parent to enter into this Agreement, Parent has required, among other things, that Zehrer and Trustee (together, the "Major Stockholders") agree to give Parent an irrevocable proxy to vote their shares in favor of the Merger (as defined below) and, in order to induce Parent to enter into this Agreement, such stockholders have so agreed with Parent in a separate written agreement entered into on the date hereof (the "Stockholders' Agreement");

WHEREAS, the parties intend that the Merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that this Agreement will constitute a plan of reorganization.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
THE MERGER

1.1 The Merger. At the Effective Time (as defined below), Merger Sub shall be merged (the "Merger") with and into the Company in accordance with the General Corporation Law of the State of Delaware (the "DGCL"), whereupon the separate existence of Merger Sub shall cease, and the Company shall be the surviving corporation (the "Surviving Corporation").

1.2 Effective Time. As soon as practicable after satisfaction or, to the extent permitted hereunder, waiver of all conditions to the Merger, the Company and Merger Sub shall file a certificate of merger with the Secretary of State of the State of Delaware and make all other filings or recordings required by the DGCL in connection with the Merger. The Merger shall become effective at such time as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or, if agreed by the parties hereto, at such later date or time as is specified in the certificate of merger (the "Effective Time").

1.3 Effects of the Merger. From and after the Effective Time, the Surviving Corporation shall possess all the property, rights, privileges, immunities, powers and franchises and be subject to all of the debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Merger Sub, all as provided under the DGCL.

ARTICLE II
CONVERSION OF SHARES

2.1 Conversion of Shares. At the Effective Time:

(a) each share of common stock of the Company, par value $0.001 per share (each a "Share" and collectively the "Company Common Stock"), held by the Company as treasury stock or owned by Parent

immediately prior to the Effective Time shall, by virtue of the Merger, cease to be outstanding and shall be canceled, and no payment shall be made with respect thereto;

(b) each share of common stock, par value $0.01 per share, of Merger Sub ("Merger Sub Common Stock") outstanding immediately prior to the Effective Time shall be converted into and become one share of common stock, par value $0.01 per share ("Surviving Corporation Common Stock"), of the Surviving Corporation; and

(c) each Share outstanding immediately prior to the Effective Time shall, except as otherwise provided in Section 2.2(c) with respect to fractional shares and Section 2.3 with respect to Shares as to which appraisal rights have been exercised, be converted into the right to receive 0.18956 shares of Parent Common Stock (as defined in Section 5.2) (the "Share Exchange Ratio"), upon surrender of the certificate representing such Share in the manner provided in Section 2.2. The Share Exchange Ratio shall be adjusted to reflect fully the effect of any reclassification, stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Common Stock), reorganization, recapitalization or other like change with respect to Parent Common Stock or Company Common Stock occurring (or for which a record date is established) after the date hereof and prior to the Effective Time. The shares of Parent Common Stock to be issued in respect of the Shares, together with the shares of Parent Common Stock to be issued in respect of In-The-Money Options (as defined in Section 2.4(a)), are referred to as the "Merger Consideration."

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