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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[ X ] Preliminary Proxy Statement [ ] Definitive Proxy Statement
[ ] Definitive Additional Materials [ ] Soliciting Materials Pursuant to
[ ] Confidential, for use of the Commission Rule 14a-12
Only (as permitted by Rule 14a-6(e)(2))
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NETCREATIONS, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ X ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
Common stock, par value $0.01 per share, of NetCreations, Inc., and
options to acquire shares of common stock.
(2) Aggregate number of securities to which transaction applies:
15,538,425 shares of common stock and options to
acquire 527,070 shares of common stock.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth amount on which the
filing fee is calculated and state how it was determined):
Each share of common stock will be converted into the right to receive
$7.00 as a result of the merger described in this proxy statement. For
the purposes of calculating the filing fee, each option to acquire
shares of common stock has been deemed exercised or converted into the
shares of common stock subject to such option or right.
The underlying value of the transaction is equal to $112,458,465,
determined by adding (i) $108,768,975 payable to holders of shares
of common stock and (ii) $3,689,490 payable to option holders.
In accordance with Exchange Act Rule 0-11, the filing fee equals
one-fiftieth of one percent of the underlying value of the transaction.
(4) Proposed maximum aggregate value of transaction:
$112,458,465
(5) Total fee paid:
$22,492
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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[NetCreations Logo]
January [__], 2001
Dear Shareholder:
I am writing to you today about our proposed merger with SEAT Pagine
Gialle S.p.A. In the merger, each share of NetCreations common stock will be
converted into the right to receive $7.00 cash. As of the close of business on
December 20, 2000, the last trading day prior to the public disclosure of a
binding offer, the merger price represented a 60% premium to the closing price
per share of NetCreations common stock and a 71% premium to the consideration to
be received by NetCreations shareholders pursuant to the previously proposed
merger with DoubleClick Inc. (which was terminated on December 21, 2000 by
DoubleClick) based upon the price per share of DoubleClick common stock on that
date. NetCreations' merger with SEAT is described more fully in this proxy
statement.
The Board of Directors of NetCreations has called a special meeting of
NetCreations shareholders to be held on [______], February __, 2001 at 9:30
a.m., local time, at the TriBeCa Grand Hotel, 2 Avenue of the Americas, New
York, New York 10013 for the purpose of considering the transaction. At the
special shareholders meeting, you will be asked to consider and vote upon a
proposal to adopt the merger agreement.
Adoption of the proposal requires the affirmative vote, in person or by
proxy, of 66 2/3% of the outstanding shares of NetCreations common stock. To
adopt the merger agreement, you MUST vote `FOR' the proposal by following the
instructions stated on the enclosed proxy card. If you do not vote at all, your
non-vote will, in effect, count as a vote against the merger agreement and the
merger. Rosalind Resnick and Ryan Druckenmiller have agreed to vote 10,098,601
shares of NetCreations common stock, or approximately 65% of NetCreations common
stock outstanding as of January 18, 2001, for adoption of the SEAT merger
agreement.
All shareholders are invited to attend the special shareholders meeting
in person. Whether or not you plan to attend, in order that your shares may be
represented at the special shareholders meeting, please complete, sign and date
the enclosed proxy and return it in the enclosed envelope as soon as possible.
If you attend the special shareholders meeting in person, you may, if you wish,
vote in person on all matters brought before the special shareholders meeting
even if you have previously returned your proxy.
This proxy statement provides detailed information about NetCreations
and the merger. Please give all of this information your careful attention.
The Board of Directors believes that the terms and conditions of the
merger are fair to you and that the merger is in the best interests of
NetCreations and its shareholders and has therefore unanimously adopted the
merger agreement and unanimously recommends that all shareholders vote `FOR'
adoption of the merger agreement.
Sincerely,
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ROSALIND B. RESNICK
Chairman and Chief Executive Officer
This proxy statement is dated January __ , 2001, and is first being
mailed to NetCreations shareholders on or about January __, 2001.
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NetCreations, Inc.
379 WEST BROADWAY, SUITE 202
NEW YORK, NEW YORK 10012
(212) 625-1370
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AT 9:30 A.M., FEBRUARY [__], 2001
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To the Shareholders of NetCreations, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of
NetCreations will be held at the TriBeCa Grand Hotel, 2 Avenue of the Americas,
New York, New York 10013 at 9:30 a.m., local time on February [__], 2001 for the
following purposes:
1. The Merger. To consider and vote upon a proposal to adopt the
Agreement and Plan of Merger, dated December 22, 2000, among SEAT Pagine Gialle
S.p.A., Sogerim, Societe Anonyme, Nickel Acquisition Corp. and NetCreations,
under which Nickel Acquisition will merge with and into NetCreations, in which
each outstanding share of NetCreations common stock, par value $0.01 per share,
would be converted into the right to receive $7.00 in cash.
2. Authority to Adjourn. To grant NetCreations' board of directors
discretionary authority to adjourn the special meeting to solicit additional
votes for adoption of the merger agreement.
3. Other Business. To transact such other business as may properly come
before the special shareholders meeting or any adjournment or postponement
thereof.
Only shareholders of record at the close of business on January 18,
2001 are entitled to receive notice of and to vote at the special shareholders
meeting or any adjournment or postponement thereof. Holders of shares of
NetCreations common stock held of record at the close of business on the record
date are entitled to one vote per share on each matter considered and voted on
at the special shareholders meeting. The affirmative vote of the holders of 66
2/3% of the outstanding shares of common stock entitled to vote at the special
shareholders meeting is required to adopt the merger agreement. Rosalind Resnick
and Ryan Druckenmiller have agreed to vote 10,098,601 shares of NetCreations
common stock, or approximately 65% of NetCreations common stock outstanding as
of January 18, 2001, for adoption of the SEAT merger agreement. A list of
shareholders as of the record date will be open for examination during the
special shareholders meeting.
THE BOARD OF DIRECTORS OF NETCREATIONS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE `FOR' ADOPTION OF THE MERGER AGREEMENT AND `FOR' GRANTING THE BOARD OF
DIRECTORS AUTHORITY TO ADJOURN THE SPECIAL MEETING.
Your vote is important regardless of the number of shares you own. To
ensure that your shares are represented at the special shareholders meeting, we
urge you to complete, date and sign the enclosed proxy and mail it promptly in
the postage-paid envelope provided whether or not you plan to attend the special
shareholders meeting in person. You may revoke your proxy in the manner
described in this proxy statement at any time before it has been voted at the
special shareholders meeting. You may vote in person at the special shareholders
meeting even if you have returned a proxy.
By Order of the Board of Directors,
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BRIAN BURLANT
Secretary
New York, New York
January [__] , 2001
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TABLE OF CONTENTS
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QUESTIONS AND ANSWERS ABOUT THE MERGER....................................................................vii
SUMMARY OF THE PROXY STATEMENT..............................................................................1
FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT..........................................................4
THE SPECIAL SHAREHOLDERS MEETING............................................................................4
General.................................................................................................4
Date, Time and Place....................................................................................4
Matters to be Considered at the Special Shareholders Meeting............................................4
Record Date.............................................................................................5
Voting of Proxies.......................................................................................5
Vote Required...........................................................................................5
Quorum; Abstentions and Broker Non-Votes...............................................................5
Solicitation of Proxies and Expenses....................................................................6
No Dissenters' Rights...................................................................................6
THE MERGER..................................................................................................6
Background of the Merger................................................................................6
NetCreations' Reasons for the Merger; Unanimous Recommendation of NetCreations' Board of
Directors.........................................................................................12
Opinion of NetCreations' Financial Advisor.............................................................15
Interests of Certain Persons in the Merger.............................................................20
Applicable Waiting Periods and Regulatory Approvals....................................................20
Federal Income Tax Considerations......................................................................20
Delisting and Deregistration of NetCreations Common Stock Following the Merger.........................21
THE MERGER AGREEMENT AND RELATED AGREEMENTS................................................................21
The Merger.............................................................................................21
Effective Time.........................................................................................22
Directors and Officers of NetCreations after the Merger................................................22
Conversion of NetCreations Shares in the Merger........................................................22
NetCreations' Stock Option and Employee Stock Purchase Plans...........................................22
Payment of Merger Consideration........................................................................22
Representations and Warranties.........................................................................22
Netcreations' Conduct of Business before Completion of the Merger......................................24
No Solicitation of Transactions........................................................................25
Director and Officer Indemnification and Insurance.....................................................26
Benefit Plans and Arrangements.........................................................................27
Conditions to the Merger...............................................................................27
Termination of the Merger Agreement....................................................................27
Payment of Fees and Expenses...........................................................................29
Extension, Waiver and Amendment of the Merger Agreement................................................30
Related Agreements.....................................................................................30
SECURITY OWNERSHIP OF NETCREATIONS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS...............................33
COMPARATIVE PER SHARE MARKET PRICE DATA....................................................................34
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Where You Can Find More Information........................................................................34
Shareholder Proposals......................................................................................35
APPENDICES
A -- Agreement and Plan of Merger .............................................................................A-1
B -- Form of NetCreations Shareholders' Agreement..............................................................B-1
C -- Opinion of Robertson Stephens, Inc., Financial Advisor to NetCreations....................................C-1
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QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: What am I voting for?
A: We are asking for your vote to adopt the merger agreement that we entered
into with SEAT Pagine Gialle S.p.A. and certain of its affiliates pursuant to
which our company will be merged with an affiliate of SEAT Pagine Gialle.
Q: What will NetCreations shareholders receive in the merger?
A: If the merger is completed, NetCreations shareholders will receive $7.00 cash
for each share of NetCreations common stock.
Q: When do you expect to complete the merger?
A: We are working to complete the merger as quickly as possible. We anticipate
completing the merger shortly after NetCreations' special shareholders meeting,
assuming that the shareholders adopt the merger agreement.
Q: How do I vote?
A: After you have carefully read this proxy statement, mail your signed proxy
card in the enclosed return envelope as soon as possible so that your shares may
be represented at the special shareholders meeting. You may also attend the
meeting in person instead of submitting a proxy. If your shares are held in
`street name' by your broker, your broker will vote your shares only if you
provide instructions on how to vote. You should follow the directions provided
by your broker regarding how to instruct your broker to vote your shares.
Q: Should I send in my stock certificates now?
A: No. After the merger is completed, you will receive written instructions for
exchanging your stock certificates. You will also be able to obtain written
instructions directly from the paying agent upon the consummation of the merger.
PLEASE DO NOT SEND YOUR STOCK CERTIFICATES WITH YOUR PROXY.
Q: Will the merger be taxable to me?
A: The merger generally will be taxable to NetCreations shareholders.
Q: Can I change my vote after mailing my proxy?
A: Yes. You may change your vote by delivering a signed notice of revocation or
a later-dated, signed proxy card to NetCreations, Inc. 379 West Broadway, Suite
202, New York, New York 10012, Attention: Brian Burlant before the special
shareholders meeting, or by attending the special shareholders meeting and
voting in person.
Q: Whom can I call with questions?
A: If you have questions about the merger, please call NetCreations Investor
Relations at (212) 625-1370.
Q: Am I entitled to dissenters' rights?
A: Under New York law, NetCreations shareholders are not entitled to dissenters'
rights, rights of appraisal or similar rights in connection with the merger.
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SUMMARY OF THE PROXY STATEMENT
The following summary highlights selected information from this proxy
statement relating to the proposed merger and may not contain all of the
information that is important to you. You should carefully read this entire
proxy statement, including the appendices, and the other documents we refer to
for a more complete understanding of the merger. You may obtain additional
information about NetCreations without charge by following the instructions in
the section entitled "Where You Can Find More Information" on page 34.
NetCreations, Inc.
379 West Broadway, Suite 202
New York, New York 10012
(212) 625-1370
Attention: Investor Relations
NetCreations, Inc., the leader in 100% Opt-In(R) e-mail marketing
services, specializes in e-mail address list management, brokerage and delivery.
Through its PostMasterDirect.com service, NetCreations has conducted marketing
campaigns on behalf of over 2,000 direct marketing clients to targeted consumers
in its database of over 24 million 100% Opt-In(R) e-mail addresses. These
addresses belong to Internet users who have requested promotional information
related to specific topics of interest (opt-in) and confirmed their request
(double opt-in). NetCreations manages opt-in e-mail lists for more than 390
third-party Web sites, such as CNET, Uproar, About.com, internet.com, CBS
Sportsline, CDROM Guide and LuckySurf.com. NetCreations protects the privacy of
consumers on the Internet by not disclosing e-mail addresses or any other
personally identifiable information to direct marketers. NetCreations is a
corporation organized and existing under the laws of the State of New York.
SEAT Pagine Gialle S.p.A
Via Aurlio Saffi 18
10138 Torino, Italy
Attention: Investor Relations
SEAT Pagine Gialle S.p.A. is the European leader in telephone directory
publishing and the sixth largest publisher worldwide. In addition to its
publishing activities, SEAT Pagine Gialle is engaged in online advertising
services, holding approximately a 70% share of the Italian market for Internet
advertising with over 82,000 advertisers. SEAT Pagine Gialle is a limited
company organized under the laws of the Republic of Italy. SEAT Pagine Gialle is
a majority-owned subsidiary of Telecom Italia S.p.A.
Sogerim, Societe Anonyme
c/o SEAT Pagina Gialle S.p.A.
Via Aurlio Saffi 18
10138 Torino, Italy
Attention: Investor Relations
Sogerim, Societe Anonyme is a corporation organized and existing under
the laws of Luxembourg. Telecom Italia S.p.A. owns 100% of Sogerim.
Nickel Acquisition Corp.
c/o SEAT Pagina Gialle S.p.A.
Via Aurlio Saffi 18
10138 Torino, Italy
Attention: Investor Relations
Nickel Acquisition is a newly formed corporation organized and existing
under the laws of the State of New York. Sogerim directly owns 100% of Nickel
Acquisition. Nickel Acquisition was organized solely for the purpose of entering
into the merger agreement with NetCreations and has not conducted any business
operations.
The Merger (See page 6)
SEAT, Sogerim, Nickel Acquisition and NetCreations have entered into a
merger agreement that provides for the merger of NetCreations and Nickel
Acquisition. Following the completion of the merger, NetCreations will become a
wholly owned subsidiary of Sogerim. Shareholders of NetCreations will receive
$7.00 cash for each share of NetCreations common stock. We urge you to read the
merger agreement, which is included as Appendix A, carefully and in its
entirety.
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Unanimous Recommendation Of NetCreations' Board Of Directors (See page 12)
NetCreations' board of directors has adopted the merger agreement and
determined that the terms and conditions of the merger are fair to, and in the
best interests of, NetCreations and its shareholders. NetCreations' board of
directors unanimously recommends that NetCreations shareholders vote `FOR'
adoption of the merger agreement.
Opinion Of NetCreations' Financial Advisor (See page 15)
In deciding to adopt the merger agreement, NetCreations' board of
directors considered the opinion of its financial advisor, Robertson Stephens,
Inc.
On December 22, 2000, Robertson Stephens delivered its oral opinion to
the board of directors of NetCreations, subsequently confirmed in writing, that,
as of such date, the consideration to be received by the NetCreations
shareholders in the merger was fair to the holders of NetCreations common stock
from a financial point of view. The full text of Robertson Stephens' written
opinion, dated December 22, 2000, is attached to this proxy statement as
Appendix C. We encourage you to read this opinion carefully in its entirety for
a description of the procedures followed, assumptions made, matters considered
and limitations on the review undertaken.
Vote Required (See page 5)
The affirmative vote of 66 2/3% of the outstanding shares of
NetCreations common stock is required to adopt the merger agreement.
NetCreations shareholders are entitled to cast one vote per share of
NetCreations common stock owned at the close of business on January 18, 2001. On
January 18, 2001, NetCreations directors and executive officers and their
affiliates held 10,984,535 shares of NetCreations common stock (excluding
417,909 shares which may be acquired upon exercise of options), or approximately
70.7% of the outstanding shares entitled to vote on such date. Pursuant to the
NetCreations shareholders agreement in the form attached as Appendix B, Ms.
Rosalind Resnick and Mr. Ryan Scott Druckenmiller have agreed to vote 10,098,601
shares of NetCreations common stock, or approximately 65% of NetCreations common
stock outstanding as of January 18, 2001, for adoption of the merger agreement.
The Special Shareholders Meeting (See page 4)
NetCreations' special shareholders meeting will be held at the TriBeCa
Grand Hotel, 2 Avenue of the Americas, New York, New York 10013 on February
[__], 2001. NetCreations shareholders may vote at this special shareholders
meeting if they owned shares of NetCreations common stock at the close of
business on January 18, 2001. In order for us to complete the merger, the
affirmative vote of 66 2/3% of the outstanding shares of NetCreations common
stock must vote to adopt the merger agreement.
Interests Of Certain Persons In The Merger (See page 20)
When considering the unanimous recommendation of NetCreations' board of
directors, you should be aware that some directors and executive officers of
NetCreations have interests in the merger that may be different from, or in
addition to, yours. In particular, as part of the merger, NetCreations has
entered into employment agreements with certain officers of NetCreations that
will only become effective if the merger is completed.
Federal Income Tax Considerations (See page 20)
The receipt of the cash merger consideration by a holder of our shares
generally will be a taxable transaction for U.S. federal income tax purposes. We
urge you to consult your tax advisor to determine the effect of the merger under
applicable federal, state, local and foreign tax laws.
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Conditions To The Merger (See page 27)
The respective obligations of the parties to complete the merger are
subject to the prior satisfaction or waiver of conditions specified in the
merger agreement. If either party to the merger agreement waives any conditions,
we will consider the facts and circumstances at that time and determine whether
completion of the merger requires a resolicitation of proxies from NetCreations
shareholders.
Termination Of The Merger Agreement (See page 27)
The merger agreement may be terminated under circumstances that are
described on page 27 under `The Merger Agreement and Related Agreements --
Termination of the Merger Agreement.'
Termination Fee And Expenses (See page 29)
NetCreations has agreed to pay SEAT a termination fee of $6.5 million,
plus SEAT's expenses, in cash if the merger agreement terminates under
circumstances that are described on page 29 under `The Merger Agreement and
Related Agreements -- Payment of Fees and Expenses. SEAT has agreed to pay
NetCreations' expenses in cash if the merger agreement is terminated under
circumstances that are described on page 29 under `The Merger Agreement and
Related Agreements -- Payment of Fees and Expenses.'
Restrictions On Alternate Transactions (See page 25)
The merger agreement prohibits NetCreations from soliciting or
participating in discussions with third parties about transactions alternative
to the merger, except as discussed on page 25 under `The Merger Agreement and
Related Agreements -- No Solicitation of Transactions.'
Applicable Waiting Periods And Regulatory Approvals (See page 20)
The merger is subject to United States antitrust laws. We are making
the required filings with the Department of Justice and Federal Trade
Commission. The Department of Justice and the Federal Trade Commission, as well
as a state antitrust authority or a private person, may challenge the merger at
any time before or after it is completed. We are not aware of any other
significant regulatory approvals required for the merger other than compliance
with applicable corporate law of New York.
No Dissenters' Rights (See page 6)
Under New York law, shareholders of NetCreations are not entitled to
dissenters' or appraisal rights as a result of the merger.
Source of Funds
SEAT has represented and guaranteed in the merger agreement that the
merger consideration of approximately $111 million will be immediately available
at the effective time of the merger. There is no financing contingency with
respect to the consummation of the merger.
Trademarks
This document contains trademarks of NetCreations and may contain
trademarks of others.
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Recent Developments
NetCreations' Fourth Quarter Earnings Expectations
On November 22, 2000, NetCreations announced that it anticipated net
revenues for the fourth quarter of 2000 would be in the range of $12.0 million
to $14.0 million. As a result of the lower net revenue expectations, as well as
certain one-time non-recurring charges, NetCreations announced that it
anticipated that earnings per share would range from a loss of $0.04 to $0.06
per diluted share, and that, excluding such one-time charges, earnings per share
would range from $0.00 to a loss of $0.02 per diluted share. NetCreations also
announced that its PostMasterDirect.com database had increased from 15.7 million
e-mail addresses at September 30, 2000 to over 19.8 million e-mail addresses at
November 22, 2000 and is growing at a rate of more than 80,000 net new e-mail
addresses per day.
FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT
This proxy statement and the documents incorporated by reference into
this proxy statement contain forward-looking statements within the `safe harbor'
provisions of the Private Securities Litigation Reform Act of 1995 with respect
to NetCreations' financial condition, results of operations and businesses and
the expected impact of the merger on NetCreations. Words such as `anticipates,'
`expects,' `intends,' `plans,' `believes,' `seeks,' `estimates' and similar
expressions indicate forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially from the
results contemplated by the forward-looking statements. In evaluating the
merger, you should carefully consider the discussion of risks and uncertainties
set forth under `The Merger -- Background of the Merger,' `The Merger -
NetCreations' Reasons For the Merger; Unanimous Recommendation of NetCreations'
Board of Directors' and `The Merger -- Opinion of NetCreations' Financial
Advisor,' and included elsewhere in this proxy statement. Accordingly, you
should not place undue reliance on forward-looking statements, which speak only
as of the date of this proxy statement.
All subsequent written and oral forward-looking statements attributable
to NetCreations or any person acting on their behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this
section. NetCreations does not assume any obligation to update any such
forward-looking statements to reflect events or circumstances after the date of
this proxy statement.
THE SPECIAL SHAREHOLDERS MEETING
General
We are furnishing this proxy statement to holders of NetCreations
common stock in connection with the solicitation of proxies by NetCreations'
board of directors for use at the NetCreations special shareholders meeting to
be held on February [__], 2001, and any adjournment or postponement of the
special shareholders meeting.
Date, Time and Place
The NetCreations special shareholders meeting will be held on February
[__], 2001 at 9:30 a.m., local time, at the TriBeCa Grand Hotel, 2 Avenue of the
Americas, New York, New York 10013.
Matters to be Considered at the Special Shareholders Meeting
At the NetCreations special shareholders meeting and any adjournment or
postponement of the special shareholders meeting, NetCreations shareholders will
be asked:
o to consider and vote upon the adoption of the merger agreement;
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o to grant NetCreations' board of directors discretionary authority if they
deem it to be necessary to adjourn the special shareholders meeting
to solicit additional votes for adoption of the merger agreement; and
o to transact such other business as may properly come before the special
meeting.
Record Date
NetCreations' board of directors has fixed the close of business on
January 18, 2001 as the record date for determination of NetCreations'
shareholders entitled to notice of and to vote at the special meeting.
Voting of Proxies
NetCreations requests that its shareholders complete, date and sign the
accompanying proxy and promptly return it in the accompanying envelope or
otherwise mail it to NetCreations. Brokers holding shares in `street name' may
vote the shares only if the shareholder provides instructions on how to vote.
Brokers will provide instructions to beneficial owners on how to direct the
broker to vote the shares. All properly executed proxies that NetCreations
receives prior to the vote at the special shareholders meeting, and that are not
revoked, will be voted in accordance with the instructions indicated on the
proxies or, if no direction is indicated, to adopt the merger agreement.
NetCreations' board of directors does not currently intend to bring any other
business before the special shareholders meeting, and NetCreations' board of
directors is not aware of any other matters to be brought before the special
shareholders meeting. If other business properly comes before the special
shareholders meeting, the proxies will be voted in accordance with the judgment
of the proxyholders.
A shareholder may revoke his or her proxy at any time prior to its use:
o by delivering to NetCreations, Inc., 379 West Broadway, Suite 202, New
York, New York 10012, Attention: Brian Burlant a signed notice of
revocation or a later-dated, signed proxy; or
o by attending the special shareholders meeting and voting in person.
Attendance at the special shareholders meeting does not in itself
constitute the revocation of a proxy.
Vote Required
As of the close of business on January 18, 2001, there were
15,538,425 shares of NetCreations common stock outstanding and entitled to vote.
The holders of 66 2/3% of the outstanding shares of NetCreations common stock
outstanding as of the close of business on February [__], 2001 must adopt the
merger agreement. NetCreations shareholders have one vote per share of
NetCreations common stock owned on the record date.
As of January 18, 2001, directors and executive officers of
NetCreations and their affiliates beneficially owned an aggregate of 10,984,535
shares of NetCreations common stock (exclusive of any shares issuable upon the
exercise of options) or approximately 70.7% of the shares of NetCreations common
stock outstanding on such date. Pursuant to the NetCreations shareholders
agreement in the form attached as Appendix B, two shareholders of NetCreations,
Rosalind Resnick and Ryan Scott Druckenmiller, have agreed to vote approximately
65% of the shares of NetCreations common stock outstanding on December 22, 2000
for adoption of the merger agreement. See "The Merger -- Interests of Certain
Persons in the Merger."
Quorum; Abstentions and Broker Non-Votes
The required quorum for the transaction of business at the NetCreations
special shareholders meeting is a majority of the shares of NetCreations common
stock issued and outstanding on the record date. Abstentions and broker
non-votes each will be included in determining the number of shares present at
the meeting for the purpose of determining the presence of a quorum. Because
adoption of the merger agreement requires the affirmative vote of 66 2/3% of the
outstanding shares of NetCreations common stock entitled to vote, abstentions
and broker non-votes will have the same effect as votes against adoption of the
merger agreement. In addition, the failure of a NetCreations shareholder to
return a proxy or otherwise vote will have the effect of a vote against adoption
of the merger agreement. Brokers holding shares for beneficial owners cannot
vote on the actions proposed in this proxy
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statement without the owners' specific instructions. Accordingly, NetCreations
shareholders are urged to return the enclosed proxy card marked to indicate
their vote.
Solicitation of Proxies and Expenses
In addition to solicitation by mail, the directors, officers and
employees of NetCreations may solicit proxies from NetCreations shareholders by
telephone, facsimile or in person. No additional compensation will be paid to
directors, officers or employees of NetCreations for any solicitations.
NetCreations has retained Georgeson Shareholder Communications, Inc., a proxy
soliciting firm, to assist in the solicitation of proxies and will pay such firm
a fee of $6,500. Brokerage houses, nominees, fiduciaries and other custodians
will be requested to forward soliciting materials to beneficial owners and will
be reimbursed for their reasonable expenses incurred in sending proxy materials
to beneficial owners. The expenses of soliciting proxies, including expenses
related to the printing and mailing of this proxy statement, will be the
responsibility of NetCreations.
No Dissenters' Rights
NetCreations is organized under New York law. Under New York law,
NetCreations shareholders do not have a right to receive the appraised value of
their shares in connection with the merger.
THE MERGER
This section of the proxy statement describes material aspects of the
proposed merger. While we believe that the description covers the material terms
of the merger and the related transactions, this summary may not contain all of
the information that is important to you. NetCreations shareholders should read
the entire merger agreement and the other documents we refer to carefully and in
their entirety for a more complete understanding of the merger.
Background of the Merger
From January 2000 through August 2000, NetCreations explored a number
of strategies to grow its business, including organic growth, international and
domestic joint ventures and domestic acquisitions. During that time,
representatives of NetCreations had preliminary discussions with representatives
of Consodata Societe Anonyme, a French corporation which is presently in the
process of being acquired by SEAT, concerning opportunities for expanding their
respective businesses. Consodata is in the business of direct marketing,
primarily in Western Europe, and management of the two companies believed that
the companies might benefit from joint efforts. However, after entering into a
Non-Disclosure Agreement on February 3, 2000 and having a few preliminary
discussions, NetCreations and Consodata mutually agreed to discontinue such
discussions in April 2000.
On September 11, 2000, NetCreations' board of directors met to discuss
NetCreations' third quarter performance and the state of its business and
industry generally. Scott Wolf, NetCreations' Senior Vice President of Sales and
Business Development, Robert Mattes, NetCreations' Chief Financial Officer, and
Brian Burlant, NetCreations' General Counsel, also attended the meeting. After
the close of trading on September 12, 2000, NetCreations issued a press release
indicating that while it continued to be profitable it did not expect to meet
its analysts' targets for the third quarter. During the next day, the price of
NetCreations common stock fell by approximately 50%.
A special meeting of NetCreations' board of directors was held on
September 15, 2000. Messrs. Mattes and Burlant also attended the meeting. The
board of directors authorized NetCreations' management to explore various
business opportunities and strategic alternatives to improve revenue growth and
profitability, including without limitation, joint ventures, acquisitions and
business combinations.
On September 18, 2000, Rosalind Resnick, Chairman and Chief Executive
Officer of NetCreations, contacted a representative of DoubleClick, Inc.
expressing an interest in a strategic transaction with DoubleClick.
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Between September 19 and October 2, 2000, representatives of
DoubleClick negotiated the terms of an Agreement and Plan of Merger and
Reorganization among DoubleClick, Genesis Merger Sub, Inc., and NetCreations.
NetCreations retained Robertson Stephens, Inc. to act as its financial advisor
in connection with a possible sale of NetCreations to, or business combination
with, DoubleClick. The DoubleClick merger agreement and related transaction
documents were signed by the parties on the evening of October 2, 2000.
DoubleClick and NetCreations jointly announced the merger on the morning of
October 3, 2000.
On November 10, 2000, NetCreations received an unsolicited written
acquisition proposal from SEAT to acquire NetCreations at a price that valued
NetCreations common stock at $10.00 per share in cash. This initial written
proposal was non-binding and stated that SEAT was prepared to execute agreements
substantially similar to the agreements NetCreations entered into with
DoubleClick on October 2, 2000. The initial written proposal was not accompanied
by definitive agreements and was contingent upon both the execution of mutually
agreed upon definitive agreements and completion by SEAT of certain diligence on
NetCreations. The proposal also differed from NetCreations' proposed merger with
DoubleClick in that it proposed a fixed amount of cash per share of NetCreations
common stock and was not structured as a tax-free transaction for NetCreations
shareholders.
Under Section 6.04 of the DoubleClick merger agreement, which was still
in full force and effect, NetCreations had the right to address a competing
acquisition proposal if it was a "superior proposal", that is a proposal with
respect to which (i) NetCreations' board of directors concluded in good faith,
based upon the advice of outside counsel, that taking action with respect to
that proposal was necessary to prevent it from violating its fiduciary duties to
NetCreations or its shareholders under applicable law, (ii) NetCreations' board
of directors determined, based upon the advice of the Company's independent
financial advisors, that the acquiring party was reasonably capable of
consummating the proposed transaction and (iii) NetCreations' board of directors
reasonably believed in good faith, based upon the advice of the Company's
independent financial advisors, that the acquisition proposal was more favorable
to NetCreations' shareholders from a financial point of view than the
DoubleClick merger, that the acquisition proposal was more favorable to
NetCreations' shareholders than the DoubleClick merger, taking into account all
the terms and conditions of the acquisition proposal and the DoubleClick merger.
Promptly upon receipt of the initial SEAT proposal, NetCreations
delivered copies of the written acquisition proposal to each director. In
accordance with the then-existing DoubleClick merger agreement, NetCreations
also delivered a copy to DoubleClick. NetCreations' management subsequently
reviewed the proposal with its financial advisor, Robertson Stephens.
NetCreations asked whether Robertson Stephens could advise it as to whether (i)
SEAT was reasonably capable of consummating its proposal on the terms proposed
and (ii) the SEAT proposal was more favorable to the NetCreations' shareholders
from a financial point of view than the merger with DoubleClick.
On November 10, 2000, NetCreations' board held a special meeting during
which the board discussed the initial SEAT proposal with NetCreations'
management team. Representatives of Robertson Stephens and Piper Marbury Rudnick
& Wolfe LLP were also present at that meeting. Based upon the limited terms
contained in the SEAT proposal at that time and given the uncertainty of such
proposal, including the conditions contained therein, Robertson Stephens was
unable to advise the Board as to whether (i) SEAT was reasonably capable of
consummating its proposal on the terms proposed or (ii) the SEAT proposal was at
that time more favorable to the NetCreations' shareholders from a financial
point of view than the merger with DoubleClick. In light of Robertson Stephens'
response and the board's review and discussion, NetCreations' board of directors
determined that it was unable to conclude that the SEAT proposal was at that
time a superior proposal within the meaning of the then-existing DoubleClick
merger agreement.
Following receipt of the November 10 proposal, members of NetCreations'
board and NetCreations' management had ongoing discussions regarding the initial
written proposal from SEAT. Representatives of Robertson Stephens were also
consulted from time to time during this period.
On November 14, 2000, SEAT delivered to NetCreations a supplemental
letter regarding its initial acquisition proposal. The supplemental letter
provided a description of the due diligence items and issues which SEAT wished
to address and reaffirmed that SEAT was prepared to perform its diligence and
execute definitive documents on an expedited basis thereafter. Later that day,
each member of NetCreations' board was informed of the November 14th letter, and
the letter was delivered to each member of NetCreations' board and Robertson
Stephens for their review and to DoubleClick as required under Section 6.04 of
the then-existing DoubleClick
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merger agreement. Robertson Stephens indicated that its views concerning the
initial written SEAT proposal had not changed as a result of the supplemental
letter, given the limited terms contained in the SEAT proposal and the
uncertainty of such proposal, including the due diligence condition contained
therein.
On November 15, 2000, NetCreations requested a waiver from DoubleClick
of certain provisions in the then-existing DoubleClick merger agreement in order
to reply to SEAT's due diligence request conveyed in the November 14th letter.
On November 16, 2000, DoubleClick declined to grant such a waiver.
On November 17, 2000, SEAT delivered to NetCreations a revised written
proposal to acquire NetCreations. The second SEAT proposal contemplated a
transaction structure identical to the transaction contemplated by SEAT's
initial written proposal but proposed a reduced price of $9 per share in cash
and removed the due diligence condition contained in the original SEAT proposal.
The revised written proposal again stated that SEAT was prepared to execute
agreements substantially similar to the agreements NetCreations and DoubleClick
entered into on October 2, 2000. However, as was the case with the original SEAT
proposal, the November 17th letter was non-binding and was not accompanied by
definitive documents. NetCreations furnished the November 17th letter to each
member of NetCreations' board and to Robertson Stephens, as well as to
DoubleClick pursuant to Section 6.04 of the then-existing DoubleClick merger
agreement. NetCreations' management discussed the revised SEAT proposal with
Robertson Stephens. NetCreations again asked whether Robertson Stephens could,
in light of the revised SEAT written proposal, advise as to whether (i) SEAT was
reasonably capable of consummating its proposal on the terms proposed and (ii)
the SEAT proposal was more favorable to NetCreations shareholders from a
financial point of view than the merger with DoubleClick.
On November 21, 2000, in connection with a board meeting scheduled for
that day, NetCreations requested a confirmation from DoubleClick that it would
not deem an inquiry by NetCreations to SEAT to violate the provisions of the
merger agreement. Later that day, DoubleClick notified NetCreations that it
declined to grant such confirmation.
NetCreations' board of directors met on November 21, 2000. Also present
at the meeting were Messrs. Burlant and Mattes, representatives of Robertson
Stephens and representatives of Piper Marbury Rudnick & Wolfe LLP. At the
meeting, Robertson Stephens advised the NetCreations board that, based upon the
limited terms contained in the November 17th SEAT proposal and given the
uncertainty of such proposal, Robertson Stephens was unable to advise the
NetCreations' board of directors as to whether the SEAT proposal was at that
time more favorable to the NetCreations shareholders from a financial point of
view than the merger with DoubleClick. Also at the meeting, representatives of
Piper Marbury Rudnick & Wolfe LLP advised the directors as to their fiduciary
-duties and NetCreations' rights and obligations under the then-existing
DoubleClick merger agreement with DoubleClick. The board of directors discussed
the terms of the November 17th SEAT proposal and also discussed the uncertain
effect of the decline in NetCreations' anticipated fourth quarter net revenues
and NetCreations' evolving lower-than-expected earnings per share estimates,
which estimates had not been publicly disclosed at the time, on the likely
willingness of SEAT to proceed with the proposed transaction. In light of the
response from Robertson Stephens and the board's review and discussion, the
board of directors determined that it was unable to conclude that the SEAT
proposal was at that time a superior proposal within the meaning of the merger
agreement.
The November 17th SEAT proposal expired by its terms on November 22,
2000. On November 23, 2000, an officer of NetCreations received a telephone call
from a representative of SEAT stating that NetCreations would be receiving
documents from SEAT shortly. Later on November 23, 2000, NetCreations and its
representatives received a draft merger agreement and a draft shareholders'
agreement from SEAT. According to the draft merger agreement, the shareholders
of the acquired company referred to in the draft merger agreement would receive
$9.00 in cash for each share of common stock. Such documents were not executed,
were marked `draft', and were not accompanied by a binding proposal of any kind
from SEAT.
On November 24, 2000, NetCreations again asked whether Robertson
Stephens could advise as to whether (i) SEAT was reasonably capable of
consummating an acquisition transaction on the terms described in the draft
merger documents just received from SEAT and (ii) any SEAT proposal was at that
time more favorable to the NetCreations shareholders from a financial point of
view than the merger with DoubleClick. Based upon the fact that there was no
definitive binding proposal from SEAT before NetCreations, Robertson Stephens
was unable to advise NetCreations as to whether any SEAT proposal was at that
time more favorable to the NetCreations shareholders from a financial point of
view than the merger with DoubleClick.
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By November 27, 2000, Ms. Resnick had contacted each member of the
board of directors to discuss the documents received from SEAT on November 23,
2000. Each director was informed that NetCreations had still not received a
binding proposal or executed definitive documents and that Robertson Stephens
was therefore unable to advise NetCreations as to whether the SEAT proposal was
at that time more favorable to the NetCreations shareholders from a financial
point of view than the merger with DoubleClick. In light of the response of
Robertson Stephens and following some discussion, each director agreed that the
board continued to be unable to conclude that the SEAT proposal was at that time
a superior proposal within the meaning of the DoubleClick merger agreement.
On December 13, 2000, SEAT delivered to NetCreations a package
containing a written binding proposal to acquire NetCreations, a merger
agreement and a shareholders' agreement. The December 13th SEAT proposal
contemplated an identical transaction structure to the transaction structures
that SEAT had proposed before, but proposed a reduced purchase price of $7.00
per share in cash. The December 13th SEAT proposal stated that SEAT was prepared
to execute the draft merger agreement and the shareholders' agreement attached
thereto, subject only to (i) the execution of appropriate employment agreements
with Ms. Resnick and Mr. Druckenmiller, which were to be in substance
substantially similar to the agreements signed in connection with the
then-existing DoubleClick merger agreement and (ii) SEAT's review of and
satisfaction with any disclosure schedules NetCreations might attach to the
merger agreement. SEAT stated in the December 13th SEAT proposal that the
attachment of the final schedules prepared for the then-existing DoubleClick
merger agreement (with each schedule being modified as appropriate to account
for any structural differences between the then-existing DoubleClick merger
agreement and SEAT's proposed agreement) would satisfy the disclosure schedule
condition. NetCreations furnished the December 13th SEAT proposal and documents
to each member of NetCreations' board of directors and to Robertson Stephens, as
well as to DoubleClick pursuant to Section 6.04 of the then-existing DoubleClick
merger agreement.
NetCreations' management discussed the December 13th SEAT proposal with
Robertson Stephens and again asked whether Robertson Stephens could, in light of
the December 13th SEAT proposal, advise as to whether (i) SEAT was reasonably
capable of consummating its proposal on the terms proposed and (ii) the December
13th SEAT proposal was at that time more favorable to NetCreations shareholders
from a financial point of view than the merger with DoubleClick.
NetCreations' board of directors met on the morning of December 15,
2000 to consider the December 13th SEAT proposal. All board members other than
Mr. York attended. Also present at the meeting were Messrs. Burlant and Mattes,
and representatives of Robertson Stephens and Piper Marbury Rudnick & Wolfe LLP.
The board and NetCreations' management reviewed the December 13th SEAT proposal,
the then-existing DoubleClick merger agreement (including, but not limited to,
the restrictions under Section 6.04 of the DoubleClick merger agreement and the
termination and termination fee provisions of the DoubleClick merger agreement),
and related issues. The financial and legal advisors present made presentations,
and then addressed questions raised by the board on these matters, and the board
discussed various related matters, including the following:
o a comparison of the December 13th SEAT proposal and the
DoubleClick merger agreement:
o an analysis of DoubleClick's daily trading volume and stock
price;
o historical exchange ratio analyses;
o an analysis of the valuation of comparable public companies and
comparable precedent acquisitions;
o an analysis of NetCreations' trading volume;
o a summary of financial analysts' commentary on DoubleClick,
including reference to the volatility and adverse developments in
the industry and the stock market; and
o a summary description of SEAT and its financial capability to
consummate the transaction proposed by SEAT.
Robertson Stephens then advised the board that as of December 15, 2000 (i) based
upon publicly
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available information, SEAT was reasonably capable of consummating the December
13th SEAT proposal on the terms proposed and (ii) the December 13th SEAT
proposal was more favorable to NetCreations shareholders from a financial point
of view than the proposed merger with DoubleClick. Representatives of Piper
Marbury Rudnick & Wolfe LLP responded to questions from the directors and
discussed various aspects of the December 13th SEAT proposal, the then-existing
DoubleClick merger agreement and the fiduciary responsibilities of NetCreations
board of directors. NetCreations' board of directors then decided to reconvene
later that afternoon.
NetCreations' board of directors met again on the afternoon of December
15, 2000 to continue its discussion and consideration of the December 13th SEAT
proposal with NetCreations' management and advisors. Also present at the meeting
were Messrs. Burlant and Mattes, representatives of Robertson Stephens and
representatives of Piper Marbury Rudnick & Wolfe LLP. The NetCreations' board of
directors authorized Robertson Stephens to ask DoubleClick if it would increase
its price for NetCreations in light of the December 13th SEAT proposal, which
was at a substantial premium both to the price per share of NetCreations common
stock and to the consideration to be received by NetCreations shareholders under
the then-existing DoubleClick merger agreement, based on the price per share of
DoubleClick common stock, in each case based upon the closing price per share on
that day as well as recent day trailing averages. The board of directors agreed
to convene again on the evening of December 17, 2000.
On December 17, 2000, DoubleClick informed Robertson Stephens that it
would not revise the terms of the DoubleClick merger agreement to increase the
consideration to be paid to NetCreations shareholders. NetCreations' board of
directors met on the evening of December 17, 2000. All board members other than
Mr. Slayton attended. Also present were Messrs. Burlant and Mattes,
representatives of Robertson Stephens and representatives of Piper Marbury
Rudnick & Wolfe LLP. The board resumed its discussion and consideration of the
December 13th SEAT proposal, the relevant provisions of the DoubleClick merger
agreement, the fiduciary responsibilities of NetCreations' directors, and
related matters discussed at the December 15, 2000 board meetings with
NetCreations' management, investment bankers and counsel. At the conclusion of
the meeting, the board agreed to retain Greenberg Traurig P.C. as special
outside counsel to advise the outside directors of NetCreations in connection
with various matters pertaining to the SEAT proposal and the DoubleClick merger
agreement.
Following the meeting on December 17, 2000 and through December 19,
2000, individual members of NetCreations' board, NetCreations' management,
representatives of Robertson Stephens, representatives of Piper Marbury Rudnick
& Wolfe LLP and representatives of Greenberg Traurig P.C. held conversations to
continue to discuss and examine the December 13th SEAT proposal and the
DoubleClick merger agreement.
NetCreations' board of directors met again late on the evening of
December 19, 2000 to consider the December 13th SEAT proposal. All board members
other than Mr. Slayton attended. Also present at the meeting were Messrs.
Burlant and Mattes, representatives of Robertson Stephens, representatives of
Piper Marbury Rudnick & Wolfe LLP and representatives of Greenberg Traurig P.C.
NetCreations' board of directors continued its previous discussions of the
December 13th SEAT proposal, the relevant provisions of the DoubleClick merger
agreement, the fiduciary responsibilities of the NetCreations directors, and
related matters. The financial and legal advisors present addressed questions
raised by the board on these matters and made presentations, and the board
discussed various related matters, including the following:
o the terms and conditions and financial aspects of the December 13th SEAT
proposal;
o the terms and conditions and financial aspects of the then-existing
DoubleClick merger agreement (including future performance of DoubleClick
and NetCreations);
o SEAT's apparent intent to, and financial ability to, consummate the
proposed SEAT merger;
o the effect upon NetCreations' employees, customers and suppliers of
pursuing the December 13th SEAT proposal rather than the DoubleClick merger
agreement;
o the deterioration of DoubleClick's stock price and outlook for DoubleClick
common stock in the context of volatile and adverse industry; stock market
conditions; and
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o the premium represented by the December 13th SEAT proposal to the price of
NetCreations common stock and to the consideration to be received by
NetCreations stockholders under the then-existing DoubleClick merger
agreement, based upon the closing stock prices of NetCreations common stock
and DoubleClick common stock on December 19, 2000 and trailing average
closing prices for recent periods.
Management and various professional advisors next reviewed with the board the
terms of the proposed merger agreement and ancillary documents, including, among
other provisions:
o the representations and warranties of the parties; the post-execution
covenants and agreements, including the non-solicitation provision,
the closing conditions, the termination and break-up fee provisions;
and
o the ancillary documents that would be required by SEAT, including the
shareholder voting agreements that were to be executed by Ms. Resnick
and Mr. Druckenmiller covering approximately 65% of NetCreations'
outstanding voting stock and the post-closing employment agreements
pertaining to Ms. Resnick and Mr. Druckenmiller.
NetCreations inquired of Robertson Stephens whether, and Robertson
Stephens advised the board that as of December 19, 2000 (i) based upon publicly
available information, SEAT was reasonably capable of consummating the December
13th SEAT proposal on the terms proposed and (ii) the December 13th SEAT
proposal was more favorable to NetCreations shareholders from a financial point
of view than the proposed merger with DoubleClick. In addition, Robertson
Stephens stated its opinion that the transaction proposed by SEAT was fair, from
a financial point of view, to NetCreations shareholders. The NetCreations' board
of directors determined that (i) entering into negotiations with SEAT regarding
the December 13th SEAT proposal was necessary in order for the board to fulfill
its fiduciary duty to NetCreations or its shareholders under applicable law,
(ii) SEAT was reasonably capable of consummating the December 13th SEAT proposal
on the terms proposed by SEAT, and (iii) the December 13th SEAT proposal was
more favorable to the shareholders of NetCreations from a financial point of
view than the then-proposed merger with DoubleClick and that the merger proposed
by SEAT was more favorable to the shareholders of NetCreations than the merger
proposed by DoubleClick, taking into account all the terms and conditions of the
December 13th SEAT proposal and the DoubleClick merger agreement. The board
further determined, as a consequence, that the December 13th SEAT proposal
constituted a "superior proposal" within the meaning of Section 6.04 of the
DoubleClick merger agreement.
On December 20, 2000, representatives of Piper Marbury Rudnick & Wolfe
LLP met with representatives of Cravath Swaine & Moore, counsel to SEAT, to
discuss the December 13th SEAT proposal and the related merger agreement and
shareholders' agreement. At the conclusion of the meeting which lasted into the
evening, SEAT presented a revised binding proposal, including a revised form of
merger agreement and shareholders' agreement. The December 20th SEAT proposal
contemplated a transaction structure substantially the same as the December 13th
SEAT proposal, and the proposed merger consideration continued to be $7.00 per
share in cash for each NetCreations share. The December 20th SEAT proposal
stated that SEAT was prepared to execute the merger agreement and the
shareholders' agreement attached to the proposal, subject only to the execution
of appropriate employment agreements with Ms. Resnick and Mr. Druckenmiller to
be in substance substantially similar to the agreements signed in connection
with the DoubleClick merger agreement. SEAT also agreed to reimburse
NetCreations if, prior to the expiration of SEAT's binding proposal,
NetCreations incurred liability to DoubleClick in the form of a termination fee
as a result of actions taken by NetCreations pursuant to Section 6.04 of the
DoubleClick merger agreement and SEAT did not subsequently enter into the
proposed merger agreement (and related agreements) with NetCreations or breached
those agreements.
NetCreations' board of directors met on the afternoon of December 20,
2000 to review the status of the discussions with Cravath Swaine & Moore. All
members of the Board other than Mr. Slayton attended. Also present at the
meeting were Messrs. Burlant and Mattes, representatives of Robertson Stephens,
representatives of Piper Marbury Rudnick & Wolfe LLP and representatives of
Greenberg Traurig P.C. Representatives of Piper Marbury Rudnick & Wolfe LLP
responded to questions from directors, discussed various aspects of the December
20th SEAT proposal and informed the board that they expected to receive a
revised proposal from SEAT shortly. NetCreations' board of directors then
decided to reconvene later that evening. Shortly after the conclusion of the
meeting, NetCreations furnished the December 20th SEAT proposal and related
forms of merger agreement and shareholders' agreement to each member of
NetCreations' board, its investment bankers, and its outside counsel, including
counsel to the outside directors.
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NetCreations' board of directors met on the evening of December 20,
2000 to consider the December 20th SEAT proposal, including the related merger
agreement and shareholders agreement, which were substantially similar to the
merger agreement and shareholders agreement previously proposed by SEAT and
considered by NetCreations' board. Also present were Messrs. Burlant and Mattes,
representatives of Robertson Stephens, representatives of Piper Marbury Rudnick
& Wolfe LLP and representatives of Greenberg Traurig P.C. NetCreations'
financial and legal advisors present addressed various questions raised by the
board on these matters and made presentations, and the board discussed various
related matters, including substantially the same matters as were addressed at
the December 19th board meeting. NetCreations inquired of Robertson Stephens,
and Robertson Stephens stated to the board that as of December 20, 2000 (i)
based upon publicly available information, SEAT was reasonably capable of
consummating the December 20th SEAT proposal on the terms proposed and (ii) the
December 20th SEAT proposal was more favorable to NetCreations shareholders from
a financial point of view than the merger with DoubleClick. In addition,
Robertson Stephens stated its opinion that the proposed transaction with SEAT
was fair, from a financial point of view, to NetCreations shareholders. At the
conclusion of those discussions and based upon the advice received NetCreations'
board of directors determined that (i) entering into negotiations with SEAT
regarding the December 20th SEAT proposal was necessary in order for the board
to fulfill its fiduciary duty to NetCreations or its shareholders under
applicable law, (ii) SEAT was reasonably capable of consummating the December
20th SEAT proposal on the terms proposed by SEAT, and (iii) the December 20th
SEAT proposal was more favorable to the shareholders of NetCreations from a
financial point of view than the then-proposed merger with DoubleClick and that
the merger proposed by SEAT was more favorable to the shareholders of
NetCreations than the merger proposed by DoubleClick, taking into account all
the terms and conditions of the December 20th SEAT proposal and the DoubleClick
merger agreement. The board further determined, as a consequence, that the
December 20th SEAT proposal constituted a "superior proposal" within the meaning
of Section 6.04 of the DoubleClick merger agreement.
The board then determined, in accordance with Section 9.01(h) of the
then-existing DoubleClick merger agreement, to authorize NetCreations to enter
into a binding written agreement to effect the proposed merger with SEAT subject
to complying with the applicable terms and conditions of the DoubleClick merger
agreement. In accordance with Sections 6.04 and 9.01(h) of the DoubleClick
merger agreement, the board authorized the delivery of notice to DoubleClick of
NetCreations' intention to enter into a binding agreement with respect to the
December 20th SEAT proposal as soon as NetCreations was contractually permitted
to do so under the DoubleClick merger agreement. That notice was delivered to
DoubleClick, along with notice of the December 20th SEAT proposal and copies of
the related agreements, late in the evening of December 20th, 2000.
On December 21, 2000, DoubleClick informed NetCreations that, pursuant
to Section 9.01(d), it was terminating the DoubleClick merger agreement.
NetCreations' board of directors met on December 22, 2000 to consider
and vote upon the proposed merger agreement with SEAT and related shareholders'
agreement and exhibits. Also present at the meeting were Messrs. Burlant and
Mattes, representatives of Robertson Stephens, representatives of Piper Marbury
Rudnick & Wolfe LLP and representatives of Greenberg Traurig P.C. NetCreations'
financial and legal advisors present addressed various questions raised by the
board on these matters and made presentations, and the board discussed various
related matters, including substantially the same matters as were addressed at
the December 19th and December 20th board meetings. NetCreations inquired of
Robertson Stephens, and Robertson Stephens stated to the board its opinion, that
the proposed transaction with SEAT was fair, from a financial point of view, to
NetCreations shareholders. At the conclusion of the discussions, the board
unanimously adopted the terms of the merger and authorized management to
continue to negotiate the final terms of the merger agreement and related
agreements and to execute and deliver those agreements as finalized.
The SEAT merger agreement and related transaction documents were signed
by the parties on the evening of December 22, 2000. SEAT and NetCreations
jointly announced the merger on the morning of December 26, 2000.
NetCreations' Reasons for the Merger; Unanimous Recommendation of NetCreations'
Board of Directors
NetCreations' board of directors has unanimously adopted the SEAT
merger agreement, has unanimously determined that the merger is fair to, and in
the best interests of, NetCreations and its shareholders, and has determined to
recommend that the shareholders adopt the SEAT merger agreement and the SEAT
merger.
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At a meeting held on December 22, 2000, the NetCreations' board, with
the assistance of NetCreations' outside financial and legal advisors, considered
the legal, financial and other terms of the merger.
The decision by NetCreations' board of directors was based on several
potential benefits of the SEAT merger and involved the consideration of a number
of factors, many of which had been considered, as well, at prior board meetings
during the preceding week, commencing with the board meetings on December 15,
2000, including the following:
o under the SEAT merger agreement, NetCreations shareholders will receive for
their shares merger consideration which is all cash, which provides
certainty of value to NetCreations shareholders in a time period which has
been characterized by a high degree of volatility and adversity in our
industry and in the prices of stocks of public companies in our industry;
o the merger consideration offered by SEAT, which consists of $7.00 in cash
per each share of NetCreations stock, represented a 60% premium over the
closing price per share of NetCreations common stock at the close of
business on December 20, 2000, the last trading day prior to the public
disclosure that NetCreations had received a binding $7.00 cash per share
offer, a 39% premium over the average closing price per share of
NetCreations common stock over the ten preceding trading days ending on
December 20, 2000, and a 30% premium over the average closing price per
share of NetCreations common stock over the twenty preceding trading days
ending on December 20, 2000;
o the $7.00 cash per share merger consideration offered by SEAT represented a
71% premium over the consideration per share which would have been received
by NetCreations shareholders pursuant to the DoubleClick merger agreement,
based on the closing price per share of DoubleClick common stock on
December 20, 2000, the last trading day prior to the public announcement
that NetCreations had received a binding $7.00 cash per share offer from
SEAT, a 40% premium over the consideration per share which would have been
received by NetCreations shareholders pursuant to the DoubleClick merger
agreement, based on the average closing price per share of DoubleClick
common stock over the ten trading days preceding December 20, 2000, and a
35% premium over the average closing price per share of DoubleClick common
stock over the twenty trading days preceding December 20, 2000;
o financial analysts' commentary on DoubleClick, including reference to the
volatility and adverse developments in the industry and the stock market
generally;
o the fact that, under the terms of the SEAT merger agreement, the completion
of the merger is not conditioned on SEAT's ability to obtain financing and
the board's view of the likelihood that the proposed acquisition would be
consummated in light of the experience, reputation and financial capability
of SEAT;
o the fact that the $7.00 cash price per share merger consideration to be
received by NetCreations shareholders under the SEAT merger agreement
compared favorably, according to a number of applicable valuation
methodologies, to the consideration received by shareholders of other
companies in a number of comparable transactions;
o the opinion of Robertson Stephens, delivered orally on December 22, 2000,
and later confirmed in writing and more fully described in `Opinion of
NetCreations' Financial Advisor,' that as of such date, and subject to
assumptions made, matters considered and limitations on the review set
forth in its opinion, the cash consideration in the merger was fair to
NetCreations shareholders from a financial point of view;
o NetCreations' board's belief that, based upon, among other things, the
analyses of Robertson Stephens, the merger consideration was fair, from a
financial point of view, to, and in the best interest of, NetCreations
shareholders;
o historical information concerning NetCreations' respective businesses,
financial performance and condition, operations, technology and management;
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o NetCreations' management's view of the financial condition, competitive
position and prospects, results of operations and businesses of
NetCreations before and after the expected closing date of the merger;
o the trading prices and volumes (as well as prospects for future growth in
value) of NetCreations common stock;
o current financial market conditions and historical stock market prices,
volatility and trading information;
o the belief that the terms of the merger agreement were reasonable;
o results of the due diligence investigation of SEAT conducted by
NetCreations' investment bankers; and
o the competitive environment for online email direct marketing, online
advertising and interactive marketing companies generally.
NetCreations' board also reviewed with its legal advisors:
o the terms and conditions of the SEAT merger agreement;
o the terms and conditions of the shareholders' agreement;
o the terms and conditions of the proposed employment agreements of Rosalind
Resnick and Ryan Druckenmiller with NetCreations following the proposed
merger;
o the amount of the termination fee and the events triggering payment of the
termination fee under both the SEAT merger agreement and the DoubleClick
merger agreement; and
o the provisions of the SEAT merger agreement limiting the ability of
NetCreations to negotiate with other companies regarding an alternative
transaction, and the potential effect these provisions would have on
NetCreations' receipt of alternative proposals that could be superior to
the merger with SEAT.
NetCreations' board also considered a number of potentially negative
factors in its deliberations concerning the merger, including:
o the risk that between the date of executing the merger agreement with SEAT
and the date on which the DoubleClick merger would have been consummated,
the price per share at which DoubleClick common stock is traded might
increase so that the consideration per share which would have been received
by NetCreations shareholders pursuant to the DoubleClick merger might be
significantly more than the $7.00 cash price per share to be received by
NetCreations shareholders upon consummation of the merger;
o the risk that the merger might not be consummated; and
o the fact that an all cash transaction would be taxable to NetCreations
shareholders for United States federal income tax purposes.
The decision of NetCreations' board was the result of its careful
consideration of a range of strategic alternatives, including joint ventures,
acquisitions and business combinations and relationships with SEAT, DoubleClick
and other companies in the pursuit of a long-term business strategy for
NetCreations. The NetCreations' board's primary consideration was to identify
and secure the alternative that would provide the best strategic fit for
NetCreations and the best value to NetCreations shareholders. In this regard,
NetCreations' board concluded that the merger with SEAT represented the best
course of action among several alternatives considered by the board.
NetCreations' board concluded that the SEAT merger's potential benefits
to NetCreations and its shareholders outweighed the associated risks as well as
the potential benefits of the DoubleClick merger to NetCreations and its
shareholders. The discussion of the information and factors considered by
NetCreations' board is not intended to be exhaustive. In view of the variety of
factors considered in connection with its evaluation of the merger,
NetCreations' board did not find it practicable to, and did not quantify or
otherwise assign relative weight to, the specific factors considered in reaching
its determination.
Following the board meeting on December 22, 2000, the board unanimously
adopted the merger agreement and approved the merger. Accordingly, the board
unanimously recommends that NetCreations shareholders vote "FOR" the adoption of
the merger agreement.
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Opinion of NetCreations' Financial Advisor
Under a letter agreement dated September 22, 2000, as amended,
NetCreations engaged Robertson Stephens to act as its financial advisor in
connection with a possible sale of, or business combination involving,
NetCreations, and to render an opinion as to the fairness of a transaction, from
a financial point of view, to holders of shares of NetCreations common stock.
On December 22, 2000, at a meeting of the NetCreations board held to
consider and vote upon the proposed merger agreement and related agreements,
Robertson Stephens delivered to NetCreations' board of directors its oral
opinion, subsequently confirmed in writing, that, as of December 22, 2000, and
based on the matters considered and the limitations on the review undertaken
described in the opinion, the $7.00 per share cash offer from SEAT was fair,
from a financial point of view, to holders of shares of NetCreations common
stock. Robertson Stephens' opinion included the opinion that the financial terms
of the SEAT merger are more favorable to NetCreations' shareholders than the
DoubleClick merger's exchange ratio, as well as that SEAT is reasonably capable
of completing the SEAT merger. Robertson Stephens has consented to the use of
its opinion in this proxy statement and the full text of this opinion is
reprinted as Appendix C to this proxy statement. No limitations were imposed by
NetCreations' board on Robertson Stephens with respect to the investigations
made or procedures followed by it in furnishing its opinion. Although Robertson
Stephens did assist the management of NetCreations in those negotiations, it was
not asked by NetCreations to propose or recommend and did not propose or
recommend, any specific cash price per share as the appropriate cash price per
share for the merger.
You should consider the following when reading the discussion of the
opinion of NetCreations' financial advisor in this document:
o We urge you to read carefully the entire opinion of Robertson
Stephens, which is set forth in Appendix C to this proxy
statement and is incorporated by reference.
o The following description of the opinion of Robertson Stephens
is qualified by reference to the full opinion located in
Appendix C to this proxy statement. The full opinion sets
forth, among other things, the assumptions made by Robertson
Stephens, the matters it considered and the limitations on the
review undertaken.
o The Robertson Stephens opinion was prepared for the benefit and
use of the NetCreations board in its consideration of the merger
and does not constitute a recommendation to shareholders of
NetCreations as to how they should vote at the special meeting,
or take any other action, in connection with the SEAT merger.
Although developments following the date of the Robertson Stephens
opinion may affect the opinion, Robertson Stephens assumed no obligation to
update, revise or reaffirm its opinion. The Robertson Stephens opinion is
necessarily based upon market, economic and other conditions that were in effect
on, and information made available to Robertson Stephens as of, the date of the
opinion. You should understand that subsequent developments may affect the
conclusion expressed in the Robertson Stephens opinion, and that Robertson
Stephens disclaims any undertaking or obligation to advise any person of any
change in any fact or matter affecting its opinion. The Robertson Stephens
opinion is limited to the fairness, from a financial point of view and as of the
date thereof, as well as the other matters referred to above, of the $7.00 per
share cash offer to the holders of shares of NetCreations common stock.
Opinion and Analysis of Robertson Stephens
In connection with the preparation of the Robertson Stephens opinion, Robertson
Stephens:
(i) reviewed certain publicly available financial statements and other
business and financial information of the Company and SEAT and some related
companies;
(ii) reviewed certain internal financial statements and other financial
and operating data, including certain financial forecasts and other forward
looking information, concerning the Company prepared by the management of the
Company;
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(iii) reviewed with the Company certain publicly available estimates of
research analysts relating to NetCreations and DoubleClick;
(iv) held discussions with the management of NetCreations concerning
the business, past and current operations, financial condition and future
prospects of NetCreations and DoubleClick;
(v) reviewed the financial terms and conditions set forth in the SEAT
Merger Agreement;
(vi) reviewed the stock price and trading history of NetCreations
Common Stock and DoubleClick common stock;
(vii) compared the financial performance of NetCreations and the prices
and trading activity of NetCreations Common Stock with that of certain other
publicly traded companies comparable with NetCreations;
(viii) compared the financial terms of the SEAT merger with the
financial terms, to the extent publicly available, of other transactions that
Robertson Stephens deemed relevant; and
(ix) made such other studies and inquiries, and took into account such
other matters as Robertson Stephens deemed relevant, including its assessment of
general economic, market and monetary conditions.
In Robertson Stephens' review and analysis, and in arriving at its
opinion, Robertson Stephens has assumed and relied upon the accuracy and
completeness of all of the financial and other information provided to it
(including information furnished to us orally or otherwise discussed with it by
NetCreations' management) or publicly available and has neither attempted to
verify, nor assumed responsibility for verifying, any of such information.
Robertson Stephens has relied upon the assurances of NetCreations' management
that it is not aware of any facts that would make such information inaccurate or
misleading. Furthermore, Robertson Stephens did not obtain or make, or assume
any responsibility for obtaining or making, any independent evaluation or
appraisal of the properties, assets or liabilities (contingent or otherwise) of
NetCreations, nor was it furnished with any such evaluation or appraisal. With
respect to the financial forecasts and projections (and the assumptions and
bases therefor) for NetCreations that Robertson Stephens reviewed, Robertson
Stephens assumed that such forecasts and projections were reasonably prepared in
good faith on the basis of reasonable assumptions and reflect the best currently
available estimates and judgments of the management of NetCreations as to the
future financial condition and performance of NetCreations, and Robertson
Stephens has further assumed that such projections and forecasts will be
realized in the amounts and in the time periods currently estimated. Robertson
Stephens has assumed that the SEAT merger will be consummated upon the terms set
forth in the SEAT Merger Agreement without material alteration thereof. In
addition, Robertson Stephens has assumed that the historical financial
statements of NetCreations reviewed by it have been prepared and fairly
presented in accordance with U.S. generally accepted accounting principles
consistently applied.
Robertson Stephens' opinion is necessarily based upon market, economic
and other conditions as in effect on, and information made available to
Robertson Stephens as of the date of the opinion. You should understand that
subsequent developments may affect the conclusion expressed in Robertson
Stephens' opinion and that Robertson Stephens did not agree to update its
opinion in any way. Robertson Stephens' opinion is limited to the fairness, from
a financial point of view, of the $7.00 per share contemplated by the SEAT
merger, as well as the other matters referred to above. Robertson Stephens did
not express any opinion as to (i) the value of any employee agreement or other
arrangement entered into in connection with the SEAT merger, (ii) any tax or
other consequences that might result from the SEAT merger or (iii) the price at
which shares of DoubleClick common stock will be traded in the future, nor any
other comparison of any kind between the DoubleClick merger agreement and the
merger agreement as of a future date. Except as set forth below, the opinion did
not address the relative merits of the SEAT merger and the other business
strategies that NetCreations' board of directors has considered or may be
considering, nor does it address the decision of NetCreations' board of
directors to proceed with the SEAT merger.
The following is a summary of the material financial analyses performed
by Robertson Stephens in connection with rendering its opinion. The summary of
the financial analyses is not a complete description of all of the analyses
performed by Robertson Stephens. Certain of the information in this section is
presented in tabular form. IN ORDER TO UNDERSTAND BETTER THE FINANCIAL ANALYSES
PERFORMED BY ROBERTSON STEPHENS, THESE TABLES MUST BE READ TOGETHER WITH THE
TEXT OF EACH SUMMARY. THE ROBERTSON STEPHENS OPINION IS BASED ON THE TOTALITY OF
THE VARIOUS
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<PAGE>
ANALYSES THAT IT PERFORMED, AND NO PARTICULAR PORTION OF THE ANALYSIS HAS ANY
MERIT STANDING ALONE.
COMPARISON OF DOUBLECLICK AND SEAT OFFERS.
<TABLE>
<CAPTION>
DoubleClick Offer Based on Implied
Timeframe 0.41 Exchange Ratio SEAR Offer - Cash SEAT Premium
--------- ------------------- ----------------- ------------
<S> <C> <C> <C>
12/20/00 -- Spot $4.10 $7.00 71.0%
12/22/00 -- Spot $4.11 $7.00 70.2%
10-Day Trailing Avg $4.81 $7.00 45.6%
20-Day Trailing Avg $5.06 $7.00 38.4%
30-Day Trailing Avg $5.40 $7.00 29.6%
Avg Since DoubleClick/
NetCreations Merger
Announcement on 10/3/00 $6.31 $7.00 10.9%
</TABLE>
COMPARABLE COMPANY ANALYSIS. Using publicly available information,
Robertson Stephens analyzed, among other things, the trading multiples of
NetCreations and the following selected publicly traded companies in the
Internet advertising/marketing-serving segment:
<TABLE>
<S> <C> <C>
o 24/7 Media o Be Free o MyPoints.com
o Aptimus o Engage o Netcentives
o Avenue A o L90 o Promotions.com
o coolsavings.com o LifeMinders o ValueClick
</TABLE>
REVENUES. As set forth in the following table, applying a range of
total capitalization multiples for these companies for calendar years 2000 and
2001 to corresponding revenue data for NetCreations resulted in the following
range of implied share prices and equity values for calendar years 2000 and
2001. Robertson Stephens defined total capitalization as the equity market
capitalization plus funded debt less cash and cash equivalents. If total
capitalization was a negative value, then no multiple was assigned.
<TABLE>
<CAPTION>
Implied
Calendar Range of NetCreations Implied
Year Multiples Equity Value (Millions) Share Price
---- --------- ----------------------- -----------
<S> <C> <C> <C>
Based on Trading Values
2000 0.1x to 0.4x $33.0-$50.8 $2.12-$3.27
2001 0.0x to 0.2x $31.3-$41.1 $2.01-$2.64
Mean: $2.51
Based on Acquisition Values
2000 40%-60% Premiums 0.1x to 0.6x $34.1-$63.3 $2.19-$4.07
2000 40%-60% Premiums 0.0x to 0.3x $31.8-$47.8 $2.04-$3.07
Mean: $2.84
</TABLE>
SELECTED PRECEDENT TRANSACTION ANALYSIS. Robertson Stephens analyzed
the aggregate value and implied transaction value multiples paid or proposed to
be paid in selected precedent transactions in the Internet advertising/marketing
and related Internet service segments, including:
Click Agents / ValueClick (November 1, 2000)
@plan / DoubleClick (September 25, 2000)
MineShare / Digital Impact (July 19, 2000)
Cybergold / MyPoints (April 17, 2000)
Exactis.com / 24/7 Media (February 29, 2000)
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Post Communications / Netcentives (February 15, 2000)
Direct Hit / Ask Jeeves (January 25, 2000)
Yesmail.com / CMGI (December 15, 1999)
Flycast / CMGI (September 30, 1999)
NetGravity / DoubleClick (July 13, 1999)
Abacus Direct / DoubleClick (June 14, 1999)
Encompass / Yahoo! (May 27, 1999)
Robertson Stephens compared, among other things, the aggregate value in
these transactions as a multiple of the latest twelve months' revenues (`LTM')
and the projected next 12 months' revenues (`NTM'). The multiples used were
adjusted to reflect the most recent closing acquiror stock prices at the time of
the opinion, as contrasted with the prevailing acquiror prices at the time of
the respective transaction's announcement. Applying these multiples to similar
revenue figures for NetCreations resulted in the following range of implied
values per share. In addition, the implied equity values derived from the 1-Day
and 30-Day Premiums analyses assumed that NetCreations' share price would have
declined by the average percentage decline experienced by that of its comparable
company peer group since the DoubleClick merger agreement was announced on
October 3, 2000. The premiums listed below were then applied to the
hypothetically constructed share price for NetCreations. The purpose of these
adjustments was to eliminate the "tandem trading" impact the DoubleClick merger
agreement has on NetCreations common stock.
<TABLE>
<CAPTION>
Implied
Range of NetCreations Implied
Multiples Equity Value (Millions) Value Per Share
--------- ----------------------- ---------------
<S> <C> <C> <C>
LTM 1.0x to 2.0x $85.3-$140.6 $5.48-$9.04
NTM 0.5x to 1.5x $58.5-$115.5 $3.76-$7.42
1 Day Premium to 20% to 30% $68.1-$73.8 $4.38-$4.74
Market
30 Day Premium to 40% to 60% $79.4-$90.8 $5.10-$5.83
Market
Mean: $5.72
<CAPTION>
Stock Stock
Comparable Price Price
Company 10/2/00 12/22/00 % Change
------- ------- -------- --------
<S> <C> <C> <C>
24/7 Media 9.44 0.66 -93%
Aptimus 3.00 1.09 -64%
Avenue A 4.19 1.19 -72%
Coolsavings.com 4.19 2.38 -43%
Be Free 2.63 0.75 -71%
Engage 7.50 1.03 -86%
L90 7.69 3.63 -53%
LifeMinders 22.13 3.06 -86%
MyPoints.com 5.25 1.31 -75%
Netcentives 9.00 3.78 -58%
Promotions.com 1.78 0.22 -88%
ValueClick 6.50 4.78 -26%
Mean: -68%
</TABLE>
No company, transaction or business used in the comparable company
analysis or the selected precedent transaction analysis as a comparison is
identical to NetCreations or the SEAT merger. Accordingly, an analysis of the
results of the foregoing is not entirely mathematical; rather it involves
complex considerations and judgments concerning differences in financial and
operating characteristics and other factors and trends that could affect the
acquisition, public trading and other values of the comparable companies or the
business segment, company or
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<PAGE>
transactions to which they are compared. In addition, while the foregoing
summary describes the analyses and factors that Robertson Stephens deemed
material in its presentation to NetCreations' board of directors, it is not a
comprehensive description of all analysis and factors considered by Robertson
Stephens.
The preparation of a fairness opinion is a complex process that
involves various determinations as to the most appropriate and relevant methods
of financial analysis and to the particular circumstances. Therefore, a fairness
opinion is not readily susceptible to partial analysis or summary description.
In arriving at its opinion, Robertson Stephens did not attribute any particular
weight to any analysis or factor considered by it, but rather made qualitative
judgments as to the significance and relevance of each analysis and factor.
Accordingly, Robertson Stephens believes that its analyses must be considered as
a whole and that selecting portions of its analyses and of the factors
considered by it, without considering all analyses and factors, could create a
misleading or incomplete view of the evaluation process underlying its opinion.
Several analytical methodologies were employed and no one method of analysis
should be regarded as critical to the overall conclusion reached by Robertson
Stephens. Each analytical technique has inherent strengths and weaknesses, and
the nature of the available information may further affect the value of
particular techniques. The conclusion reached by Robertson Stephens is based on
all analyses and factors taken as a whole and also on application of Robertson
Stephens' own experience and judgment. This conclusion may involve significant
elements of subjective judgment and qualitative analysis. Robertson Stephens
therefore gives no opinion as to the value or merit standing alone of any one or
more parts of the analysis it performed. In performing its analyses, Robertson
Stephens made numerous assumptions with respect to anticipated industry
performance, general business and other conditions and matters, and present
industry and transaction trends, many of which are beyond the control of
NetCreations or Robertson Stephens and their likely impact on the future
performance of NetCreations on a stand-alone basis, or of DoubleClick. Any
estimates contained in these analyses are not necessarily indicative of actual
values or predicative of future results or values, which may be significantly
more or less favorable than those suggested by these analyses. Accordingly,
analyses relating to the value of businesses do not purport to be appraisals or
to reflect the prices at which these businesses actually may be sold in the
future, and these estimates are inherently subject to uncertainty. NetCreations
engaged Robertson Stephens under a letter agreement dated September 22, 2000 as
amended. The agreement provides that, for its services, Robertson Stephens is
entitled to receive a transaction fee of approximately $1.5 million.
NetCreations has also agreed to reimburse Robertson Stephens for its
out-of-pocket expenses and to indemnify and hold harmless Robertson Stephens and
its affiliates and any other person, director, employee or agent of Robertson
Stephens or any of its affiliates, or any person controlling Robertson Stephens
or its affiliates, for certain losses, claims, damages, expenses and liabilities
relating to or arising out of services provided by Robertson Stephens as
financial advisor to NetCreations.
The terms of the fee arrangement with Robertson Stephens, which
NetCreations and Robertson Stephens believe are customary in transactions of
this nature, were negotiated at arm's length between NetCreations and Robertson
Stephens, and the NetCreations board of directors was aware of these fee
arrangements. Robertson Stephens was retained based on Robertson Stephens'
experience as a financial advisor in connection with mergers and acquisitions
and in securities valuations generally, as well as Robertson Stephens'
investment banking relationship and familiarity with NetCreations.
Robertson Stephens is an internationally recognized investment banking
firm. As part of its investment banking business, Robertson Stephens is
frequently engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of securities, private placements and other purposes.
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Interests of Certain Persons in the Merger
In considering the recommendation of NetCreations' board, NetCreations
shareholders should be aware that certain officers and directors of NetCreations
have interests in the merger that may be different from, or are in addition to,
those of NetCreations shareholders generally. NetCreations' board was aware of
these potential conflicts and considered them.
In connection with the closing of the merger, Rosalind Resnick,
NetCreations' Chairman and Chief Executive Officer and one of its directors, and
Ryan Scott Druckenmiller, NetCreations' Chief Technology Officer and one of its
directors, will receive approximately $40 million and $37 million, respectively,
for their NetCreations common stock. If NetCreations had remained a stand alone
entity Ms. Resnick and Mr. Druckenmiller would not likely have been able to sell
or transfer their entire holdings either in the same timeframe or in one
transaction pursuant to the volume restrictions of Rule 144 under the Securities
Act.
NetCreations has entered into employment agreements with Ms. Resnick
and Mr. Druckenmiller which will become effective upon the closing of the
merger. See `The Merger Agreement and Related Agreements - Related Agreements.'
The merger agreement provides that, from and after the effective time,
SEAT will, and SEAT will cause NetCreations, for a period of six years after the
effective time of the merger, to indemnify each person who is or was a director
or officer of NetCreations or any of its subsidiaries at or at any time prior to
the effective time of the merger against losses incurred as a result of actions
or omissions (or alleged actions or omissions) occurring on or prior to the
effective time of the merger. During this period, the provisions with respect to
immunities and indemnification that are set forth in NetCreations' certificate
of incorporation, by-laws and contractual arrangements in effect on the date of
the merger agreement, with certain exceptions, will survive the merger and not
be amended, repealed or otherwise modified for a period of six years from the
effective time of the merger in any manner that would affect adversely the
rights thereunder of individuals who at or at any time prior to the effective
time of the merger were directors, officers, employees or agents of
NetCreations. In addition, the merger agreement provides that for a period of
three years after the effective time, SEAT will use best efforts to maintain
NetCreations' existing directors' and officers' liability insurance. See `The
Merger Agreement and Related Agreements -- Director and Officer Indemnification
and Insurance.'
Applicable Waiting Periods and Regulatory Approvals
The merger is subject to U.S. antitrust laws. We are making the
required filings with the Department of Justice and the Federal Trade
Commission. The Department of Justice and the Federal Trade Commission, as well
as a state antitrust authority or private person, may challenge the merger at
any time before or after it is completed.
Neither NetCreations, SEAT nor Sogerim is aware of any other material
governmental or regulatory approval required for completion of the merger, other
than compliance with applicable corporate law of New York.
Federal Income Tax Considerations
The following discussion is a summary of material U.S. federal income
tax consequences of the merger to holders of common stock who are U.S. persons
and hold their shares as capital assets. This summary is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), U.S. Treasury regulations,
administrative pronouncements of the U.S. Internal Revenue Service (the "IRS")
and judicial decisions in effect on the date hereof, all of which are subject to
change, retroactively and prospectively, and to possibly differing
interpretations. For purposes hereof, a U.S. person is (i) a U.S. citizen or
resident alien individual, (ii) a corporation created or organized in or under
the laws of the United States or any state, (iii) an estate the income of which
is subject to U.S. federal income tax without regard to the source and (iv) a
trust if a court within the United States is able to exercise primary
supervision over its administration and one or more U.S. persons have authority
to control all substantial decisions relating to the trust. The discussion set
forth below is for general information only and, thus, does not address all of
the U.S. federal income tax consequences of the merger that may be relevant to
the holders of NetCreations common stock based upon their particular
circumstances. Moreover, this summary does not apply to certain categories of
holders of common stock that may be subject to special tax rules, including, but
not limited to, banks, tax-exempt
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<PAGE>
organizations, insurance companies, regulated investment companies, non-U.S.
persons and holders who acquired such shares pursuant to the exercise of
employee stock options or otherwise as compensation. Nor does this discussion
address the state, local or foreign tax consequences of the merger.
EACH HOLDER OF NETCREATIONS COMMON STOCK IS URGED TO CONSULT WITH HIS OR HER TAX
ADVISOR WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF THE MERGER.
General Federal Income Tax Consequences of the Merger. The receipt of
cash in exchange for common stock pursuant to the merger will be a taxable sale
for U.S. federal income tax purposes. Accordingly, a NetCreations shareholder
who receives cash pursuant to the merger will recognize taxable gain or loss
equal to the difference between the amount of cash received and the
shareholder's adjusted tax basis in the shares surrendered. The gain or loss
will be a long-term capital gain or loss if, as of the date of the sale, such
shareholder's holding period for such shares is more than one year. Under
current law, an individual is subject to a maximum federal income tax rate of
20% on any net long-term capital gains, and a corporation is subject to a
maximum U.S. federal income tax rate of 35% on any net capital gain. Short-term
capital gain is taxed to individuals at the same rate as the individual's
ordinary income. If the receipt of cash in exchange for shares results in
recognition of a capital loss, deductibility of such loss may be subject to some
limitations.
Backup Withholding. Unless a NetCreations shareholder complies with
certain reporting or certification procedures or an exemption applies under
applicable provisions of the Code and Treasury regulations, such shareholder may
be subject to a backup withholding tax of 31% with respect to the cash payments
received pursuant to the merger. Therefore, each NetCreations shareholder should
complete and sign the substitute Form W-9 included as part of the letter of
transmittal to be sent to each NetCreations shareholder, so as to provide the
information and certification necessary to avoid backup withholding, unless it
is demonstrated in a manner satisfactory to the exchange agent that an exemption
applies. A non-U.S. NetCreations shareholder should consult such shareholder's
tax advisor with respect to the application of withholding rules to such
shareholder on cash payments received pursuant to the merger.
Delisting and Deregistration of NetCreations Common Stock Following the Merger
If the merger is completed, NetCreations common stock will be delisted
from the Nasdaq National Market and will be deregistered under the Securities
Exchange Act of 1934.
THE MERGER AGREEMENT AND RELATED AGREEMENTS
The following is a brief summary of the material provisions of the
merger agreement, a copy of which is attached as Appendix A to this proxy
statement and incorporated herein by reference. We urge you to read the merger
agreement in its entirety for a more complete description of the merger. In the
event of any discrepancy between the terms of the merger agreement or other
agreements and the following summary, the merger agreement and other agreements
will control.
The Merger
Nickel Acquisition will merge with and into NetCreations following:
o the adoption of the merger agreement by the NetCreations shareholders; and
o the satisfaction or waiver of the other conditions to the merger.
NetCreations will be the surviving corporation following the merger.
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Effective Time
At the time of the closing of the merger, the parties will cause the
merger to become effective by filing a certificate of merger with the New York
Secretary of State. NetCreations and SEAT are working toward completing the
merger as soon as possible and hope to complete the merger during the first
quarter of 2001. Because the merger is subject to the satisfaction or waiver of
conditions specified in the merger agreement, however, we cannot predict the
exact timing of the completion of the merger.
Directors and Officers of NetCreations after the Merger
The directors and officers of Nickel Acquisition will become the new
directors and officers of NetCreations at the effective time. It is the
expectation of NetCreations and SEAT that the current officers of NetCreations
will continue in their respective roles as officers of NetCreations, the
surviving company of the merger, after the effective time.
Conversion of NetCreations Shares in the Merger
At the effective time, each outstanding share of NetCreations common
stock will automatically be converted into the right to receive $7.00 cash.
NetCreations' Stock Option and Employee Stock Purchase Plans
At the effective time of the merger, NetCreations' stock option plan
and each outstanding and unexercised option to purchase shares of NetCreations
common stock issued under NetCreations' stock option plan shall be canceled with
the holder thereof becoming entitled to receive a cash payment from the
surviving corporation of the merger at the effective time of an amount equal to
(i) the excess, if any, of (x) the merger consideration over (y) the exercise
price per share of NetCreations common stock subject to such NetCreations stock
option, multiplied by (ii) the number of shares of NetCreations common stock for
which such NetCreations stock option shall not yet have been exercised
(irrespective of whether and the extent to which any or all such NetCreations
stock options are exercisable or will be exercisable at the effective time).
Payment of Merger Consideration
As of the effective time, Sogerim will deposit with its paying agent
the cash necessary to pay for the total merger consideration, and such cash will
be available, as of the effective time, to the paying agent for delivery to
holders of NetCreations common stock upon the exchange of their shares of
NetCreations together with other appropriate documentation described below.
As promptly as practicable after the effective time of the merger, the
paying agent will mail to each holder of NetCreations common stock (to the
extent such certificates have not already been submitted for exchange) (i) a
letter of transmittal (which specifies that delivery will be effected, and risk
of loss and title to the NetCreations common stock certificates shall pass, only
upon proper delivery of the certificates to the paying agent) and (ii)
instructions for use in effecting the surrender of the certificates in exchange
for the merger consideration. Holders of NetCreations common stock also will be
able to obtain the letter of transmittal and the related instructions directly
from the paying agent as of the effective time.
Upon surrender to the paying agent of a NetCreations common stock
certificate for cancellation, together with a letter of transmittal, duly
executed and completed in accordance with the instructions, and such other
documents as may be reasonably required pursuant to such instructions, the
holder of such certificates shall be entitled to receive the appropriate cash
consideration.
NetCreations shareholders should not submit their stock certificates
for exchange until receipt of the letter of transmittal and instructions
referred to above.
Representations and Warranties
SEAT, Sogerim and NetCreations each made a number of representations
and warranties in the merger agreement.
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NetCreations made representations about the following topics:
o NetCreations' organization, qualification to do business, good standing,
and absence of subsidiaries;
o NetCreations' certificate of incorporation and by-laws;
o NetCreations' capitalization;
o NetCreations' corporate power to enter into and its authorization of the
merger agreement and the transactions contemplated by the merger agreement;
o the non-violation of the certificate of incorporation or by-laws of
NetCreations, laws or agreements as a result of the merger agreement;
o required approvals of governmental authorities relating to the merger
agreement;
o possession of and compliance with permits required to conduct NetCreations'
business, and compliance with laws applicable to NetCreations;
o NetCreations' filings and reports with the Securities and Exchange
Commission;
o NetCreations' financial statements;
o absence of any NetCreations material adverse effect in NetCreations'
business since December 31, 1999. However, none of the following constitute
a NetCreations material adverse effect: (i) changes in general economic
conditions or our industry generally, (ii) any loss that occurred primarily
from the announcement of NetCreations entering into the merger agreement,
(iii) any claim arising as a result of the termination of the DoubleClick
merger agreement, (iv) a decrease in the trading price of NetCreations
common stock or related litigation, (v) a matter publicly disclosed prior
to December 22, 2000 or (vi) the termination of certain NetCreations'
agreements with third parties.
o NetCreations' employee benefit plans and matters relating to NetCreations'
employees;
o certain of NetCreations' contracts and obligations;
o litigation involving NetCreations;
o environmental matters concerning NetCreations;
o intellectual property used or owned by NetCreations;
o NetCreations' taxes;
o NetCreations' insurance;
o NetCreations' properties;
o the opinion of NetCreations' financial advisor;
o NetCreations' brokers' and finders' fees in connection with the merger;
o the absence of certain business practices;
o restrictions on NetCreations' business;
o NetCreations' privacy policy; and
o the inapplicability of state anti-takeover statutes to the merger.
SEAT and Sogerim made representations about the following topics:
o SEAT's, Sogerim's and Nickel Acquisition's organization, qualification to
do business and good standing;
o SEAT's, Sogerim's and Nickel Acquisition's corporate power to enter into
and their authorization of the merger agreement and the transactions
contemplated by the merger agreement;
o non-violation of certificate of incorporation or bylaws of SEAT, Sogerim
and Nickel Acquisition, laws or agreements as a result of the merger
agreement; and
o Sogerim having immediately available at the effective time of the merger
sufficient cash funds for the acquisition of all shares of NetCreations
common stock pursuant to the merger agreement.
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The representations and warranties in the merger agreement are
complicated and not easily summarized. We urge you to read carefully the
provisions in the merger agreement captioned `Representations and Warranties of
Company' and `Representations and Warranties of Parent.'
NetCreations' Conduct of Business before Completion of the Merger
NetCreations has agreed that, until the completion of the merger,
unless SEAT consents in writing and except as contemplated by the merger
agreement, NetCreations will conduct its businesses in the ordinary course of
business consistent with past practice and will use its best efforts:
o to keep available the services of its present officers, significant
employees and consultants; and
o to preserve its relationships with corporate partners, customers, suppliers
and other persons with which it has significant business dealings in order
to preserve substantially intact its business organization.
NetCreations has also agreed that, until the completion of the merger,
unless SEAT consents in writing and except as contemplated by the merger
agreement, NetCreations will conduct its business in compliance with the
specific restrictions set forth in the merger agreement, including not
permitting:
o the modification of NetCreations' certificate of incorporation or by-laws;
o the issuance, sale, pledge or encumbrance of NetCreations' material
property or assets, except sales of inventory in the ordinary course of
business consistent with past practice and the providing of opt-in e-mail
addresses to direct marketers and brokers in the ordinary course of
business, or shares of NetCreations capital stock or securities convertible
into NetCreations capital stock, except for limited issuances of securities
in connection with grants and exercises of stock options or purchase
rights;
o the acquisition of any interest in any entities;
o the incurrence of any indebtedness, other than a de minimis amount, or
issuance of any debt securities;
o the amendment or premature termination of certain contracts;
o the making or authorization of certain capital expenditures;
o the declaration or payment of dividends or other distributions on its
capital stock;
o any split, combination, purchase or reclassification of any of its capital
stock;
o the modification or acceleration of any stock options or authorization of
cash payments in exchange for stock options;
o the amendment of the terms of, repurchase or redemption of any of its
securities;
o the increase of compensation payable to directors, officers, consultants or
employees;
o the granting of any severance arrangements or entering into of any
agreement providing benefits upon a change of control that would be
triggered by the merger with any person who is not currently entitled to
such benefits from the merger;
o the adoption, entering into or amendment in a material respect of any plan,
agreement, policy or arrangement for the benefit of any director, officer
or employee, except to the extent required by law or the terms of a
collective bargaining agreement;
o the payment, discharge or satisfaction of certain claims, liabilities or
obligations;
o the making of any changes with respect to NetCreations' accounting policies
or methods, except as required by generally accepted accounting principles
or by any governmental entity;
o the making of any tax election or settlement or compromise of any tax
liability; or
o the agreement in writing or otherwise to do any of the above or to take any
action which would make NetCreations' representations and warranties untrue
or prevent NetCreations from performing its covenants under the merger
agreement or result in any of the conditions to the merger not being
satisfied.
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The agreements related to the conduct of NetCreations' business
contained in the merger agreement are complicated and not easily summarized. We
urge you to read carefully the provision of the merger agreement captioned
"Conduct of Business by Company Pending the Closing."
NetCreations has also agreed:
o to give prompt notice to SEAT of any legal actions, investigations or
proceedings relating to or involving or otherwise affecting NetCreations or
the merger;
o to give prompt notice to SEAT of any change that could reasonably be
expected to have a NetCreations material adverse effect;
o to give prompt notice to SEAT of a default under certain NetCreations
contracts;
o to give access to SEAT to NetCreations' officers, employees, agents,
properties, offices and other facilities to NetCreations' books and
records; and
o to furnish promptly to SEAT such information concerning NetCreations as
SEAT may reasonably request.
SEAT has also agreed to give prompt notice to NetCreations of any legal
actions, investigations or proceedings relating to the merger.
Each of SEAT and NetCreations have also agreed to promptly notify the
other party of certain notices and communications relating to the merger and
to promptly notify the other party of any change that could reasonably be
expected to delay or impede the ability of such party to perform its
obligations under the merger agreement and to effect the closing of the
merger.
No Solicitation of Transactions
Until the merger agreement is terminated, NetCreations has agreed not
to take any of the following actions, directly or indirectly, and shall cause
its representatives not to, directly or indirectly:
o solicit, initiate or knowingly encourage any inquiries or the making of any
proposal or offer that constitutes or could lead to a competing
transaction;
o enter into or maintain or continue discussions or negotiate with any person
in furtherance of such inquiries or to obtain a competing transaction; or
o agree to or endorse any competing transaction, or authorize or permit any
of its representatives to take any such action.
Further, NetCreations is required to notify SEAT promptly if any
proposal, offer or inquiry regarding a competing transaction is made, including
the identity of the person making the proposal, offer or inquiry, and the terms
of the competing transaction. NetCreations is required to keep SEAT apprised of
any modifications to the terms of any competing transaction. Prior to accepting
a competing proposal, NetCreations will provide SEAT with 24 hours' written
notice of its intention to do so.
NetCreations agreed, as of December 22, 2000, to immediately cease and
cause to be terminated all existing discussions or negotiations with any parties
with respect to a competing transaction.
A "competing transaction" is defined in the merger agreement as any of
the following involving NetCreations (other than the contemplated merger with
Nickel Acquisition Corp.):
o any merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or other similar transaction;
o any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of 20% or more of the assets of NetCreations in a single transaction or
series of transactions (excluding for this purpose the providing of opt-in
e-mail addresses to direct marketers and brokers by NetCreations in the
ordinary course of business);
o any tender offer or exchange offer for 20% or more of the outstanding
voting securities of NetCreations or the filing of a registration statement
in connection therewith;
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o any person having acquired beneficial ownership or the right to acquire
beneficial ownership of, or any group having been formed which beneficially
owns, or has the right to acquire beneficial ownership of, 20% or more of
the outstanding voting securities of NetCreations; or
o any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
NetCreations' board of directors is not prohibited, however, from
taking and disclosing to NetCreations' shareholders a position with respect to a
tender or exchange offer under Rules 14d-9 and 14e-2(a) under the Exchange Act
not made in violation of the merger agreement.
Prior to the adoption of the merger agreement by NetCreations
shareholders, NetCreations, however, may provide information to, and negotiate a
competing transaction with, a third party if:
o NetCreations' board of directors concludes in good faith, based on the
advice from outside legal counsel that this action is necessary to prevent
the board from violating its fiduciary duties under applicable law;
o NetCreations' board of directors determines, based upon advice of its
independent financial advisors, in the exercise of its fiduciary duties
that the third party is reasonably capable of consummating the competing
transaction as proposed; and
o NetCreations' board of directors reasonably believes in good faith, based
on the advice of NetCreations' independent financial advisors, that the
competing transaction is more favorable to NetCreations' shareholders from
a financial point of view than the SEAT merger, and that the competing
transaction is more favorable to NetCreations' shareholders than the SEAT
merger taking into account all the terms and conditions of the competing
transaction and the SEAT merger.
A "superior proposal" is defined in the merger agreement as a competing
transaction with respect to which NetCreations' board of directors reasonably
believes in good faith, based on the advice of NetCreations' independent
financial advisors, that such competing transaction is more favorable to
NetCreations shareholders than the merger taking into account all the terms and
conditions of the competing transaction and the merger.
The agreements related to NetCreations' non-solicitation of
transactions contained in the merger agreement are complicated and not easily
summarized. We urge you to read carefully the provisions of the merger agreement
captioned `No Solicitation of Transactions.'
Director and Officer Indemnification and Insurance
The merger agreement provides that:
o the provisions with respect to immunities and indemnification that are set
forth in NetCreations' certificate of incorporation, by-laws and
contractual arrangements in effect on the date of the merger agreement,
with certain exceptions, will survive the merger and not be amended,
repealed or otherwise modified for a period of six years from the effective
time of the merger in any manner that would affect adversely the rights
thereunder of individuals who at or at any time prior to the effective time
of the merger were directors, officers, employees or agents of
NetCreations;
o in the event that NetCreations or any of its successors or assigns
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 transfers a material amount of its properties and assets to any
person in a single transaction or a series of transactions, then, and in
each such case, SEAT will either guaranty the indemnification obligations
described in the merger agreement or will make or cause to be made proper
provision so that the successors and assigns of NetCreations or the
surviving corporation, as the case may be, assume the indemnification
obligations described in the merger agreement for the benefit of the
indemnified parties and have substantially equal financial ability as
NetCreations (immediately prior to the effective time of the merger) to
satisfy the obligations of the parties pursuant to the merger agreement as
a condition to any such future merger, consolidation or transfer becoming
effective; and
o for three years after the effective time of the merger, subject to certain
exceptions, SEAT will use its best efforts to maintain in effect the
directors' and officers' liability insurance policies maintained by
NetCreations.
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Benefit Plans and Arrangements
After the effective time of the merger, for all purposes under the
employee benefit plans of SEAT and its subsidiaries or affiliates providing
benefits to former NetCreations employees, each such employee will be credited
with his or her years of service with NetCreations before the effective time, to
the same extent as such employee was entitled, before the effective time, to
credit for such service under any similar NetCreations benefit plans, except for
purposes of benefit accrual under defined benefit pension plans, if any.
Conditions to the Merger
SEAT's and NetCreations' respective obligations to complete the merger
and the related transactions are subject to the satisfaction or waiver, if
permitted by law, of each of the following conditions:
o the merger agreement and the merger must have been duly adopted by the
requisite vote of NetCreations shareholders in accordance with the New York
Business Corporation Law;
o no court of competent jurisdiction shall have issued or entered any order,
writ, injunction or decree, and no other government entity shall have
issued any order, which is then in effect and has the effect of making the
merger illegal or otherwise prohibiting its consummation;
o any waiting period (and any extension thereof) applicable to the
consummation of the merger under U.S. antitrust laws must have expired or
been terminated; and
o all material consents, approvals and authorizations legally required to be
obtained to consummate the merger must have been obtained from all
governmental entities.
NetCreations' obligations to consummate the merger, or to permit the
consummation of the merger are subject to the satisfaction or waiver, if
permitted by law, of each of the following additional conditions:
o subject to certain materiality exceptions, each of the representations and
warranties of SEAT and Sogerim contained in the merger agreement must be
true, complete and correct;
o SEAT and Sogerim must have performed or complied in all material respects
with all covenants required by the merger agreement; and
o NetCreations shall have received a certificate signed by the chief
executive officer and chief financial officer of SEAT and Sogerim to the
effect that the two conditions above have been satisfied.
SEAT's and Sogerim's obligations to consummate the merger are subject
to the satisfaction or waiver of the following additional conditions:
o subject to certain materiality exceptions, each of the representations and
warranties of NetCreations contained in the merger agreement must be true,
complete and correct;
o NetCreations must have performed or complied in all material respects with
all covenants required by the merger agreement;
o there shall have been no NetCreations material adverse effect since the
date of the merger agreement;
o NetCreations must have received from certain persons, a valid and effective
assignment, in a form reasonably acceptable to SEAT, of all intellectual
property rights in all work created by such persons on behalf of
NetCreations; and
o Rosalind Resnick and Ryan Scott Druckenmiller must not have terminated, or
given notice of termination of, such employees' employment with
NetCreations.
Termination of the Merger Agreement
The merger agreement may be terminated and the merger may be abandoned
at any time before the completion of the merger, notwithstanding the adoption of
the merger agreement by NetCreations' shareholders, as summarized below:
o by mutual written consent of NetCreations and SEAT;
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o by either NetCreations or SEAT, if, without the fault of the terminating
party, the merger has not been consummated before April 30, 2001;
o by either NetCreations or SEAT, if any governmental order, writ, injunction
or decree preventing the consummation of the merger has been entered by any
court of competent jurisdiction and has become final and nonappealable; or
o by NetCreations or SEAT, if the merger agreement and the merger fail to
receive the requisite votes for adoption at the NetCreations shareholders
meeting or any adjournment or postponement thereof.
Furthermore, the merger agreement may be terminated by SEAT if any of
the following occurs:
o the board of directors of NetCreations withdraws, modifies or changes its
recommendation of the merger agreement or the merger in a manner adverse to
SEAT;
o the board of directors of NetCreations recommends a competing transaction
to the shareholders of NetCreations;
o NetCreations fails to comply in all material respects with provisions in
the merger agreement dealing with non-solicitation of transactions and
holding the NetCreations shareholders meeting;
o a competing transaction is announced and the board of directors of
NetCreations:
o fails to recommend against acceptance of such competing
transaction by its shareholders (including by taking no position,
or indicating its inability to take a position, with respect to
the acceptance of a company competing transaction involving a
tender offer or exchange offer by its shareholders) within five
business days of delivery of written request from SEAT for such
action, or
o fails to reconfirm its approval and recommendation of the merger
agreement and the transactions contemplated thereby within five
business days of delivery of a written request from SEAT of such
action;
o the board of directors of NetCreations determines that a competing
transaction is a superior proposal and the board, prior to termination of
the merger agreement, does not reconfirm its approval and recommendation of
the merger agreement and does not recommend against acceptance of such
superior proposal by its shareholders; or
o upon the breach of or failure to perform in any material respect any of
NetCreations' representations, warranties, covenants or other agreements
contained in the merger agreement, which breach or failure to perform (i)
would give rise to the failure of a condition to the obligations of SEAT or
Sogerim to close the merger and (ii) is incapable of being or has not been
cured by NetCreations within 30 calendar days after SEAT has given written
notice to NetCreations of such breach or failure to perform;
Furthermore, the merger agreement may be terminated by NetCreations
if any of the following occur:
o upon the breach of or failure to perform in any material respect any of
SEAT's or Sogerim's representations, warranties, covenants or other
agreements contained in the merger agreement, which breach or failure to
perform (i) would give rise to the failure of a condition to the
obligations of NetCreations to close the merger and (ii) is incapable of
being or has not been cured by SEAT within 30 calendar days after
NetCreations has given written notice to SEAT of such breach or failure to
perform;
o if (i) the board of directors of NetCreations authorizes NetCreations,
subject to complying with the terms of the merger agreement, to enter into
a binding written agreement concerning a transaction that constitutes a
superior proposal and NetCreations notifies SEAT in writing that it intends
to enter into such an agreement, attaching the most current version of such
agreement (or description of all material terms and conditions thereof) to
such notice, and (ii) SEAT does not make, within three business days of
receipt of NetCreations' written notification of its intention to enter
into a binding agreement for a superior proposal, an offer that the board
of directors of NetCreations determines, in good faith after consultation
with its financial advisors, is at least as favorable to the shareholders
of NetCreations as the superior proposal, it being understood that
NetCreations shall not enter into any such binding agreement during such
three-day period. NetCreations, will not, however, be permitted to
terminate the merger agreement for this reason if such superior proposal is
attributable to a violation by NetCreations of its obligations under
provisions of the merger agreement dealing with non-solicitation of
competing transactions, and such termination by NetCreations will not be
effective until after the payment of the termination fee, as provided in
the merger agreement.
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Payment of Fees and Expenses
Except as described below, all expenses incurred in connection with the
merger agreement and the merger will be paid by the party incurring such
expenses, whether or not the merger is consummated, except that SEAT and
NetCreations each will pay one-half of all expenses incurred in connection with
printing, filing and mailing this proxy statement, and all Securities and
Exchange Commission and other regulatory filing fees incurred in connection with
such documents and any fees required to be paid under U.S. antitrust laws.
NetCreations will pay SEAT an amount equal to $6.5 million and an
additional amount equal to SEAT's expenses, in the event that:
o SEAT terminates the merger agreement following the occurrence of any of the
following events:
o the board of directors of NetCreations withdraws, modifies or
changes its recommendation of the merger agreement or the merger
in a manner adverse to SEAT;
o the board of directors of NetCreations recommends a competing
transaction to the shareholders of NetCreations;
o NetCreations fails to comply in all material respects with
certain provisions in the merger agreement dealing with
non-solicitation of transactions and holding the NetCreations
shareholders meeting;
o a competing transaction is announced or becomes otherwise
publicly known and the board of directors of NetCreations:
o fails to recommend against acceptance of such competing
transaction by its shareholders (including by taking no
position, or indicating its inability to take a position,
with respect to the acceptance of a company competing
transaction involving a tender offer or exchange offer by
its shareholders) within five business days of delivery of a
written request from SEAT for such action, or
o fails to reconfirm its approval and recommendation of the
merger agreement and the transactions contemplated thereby
within five business days of the first announcement or other
public knowledge of such proposal for a company competing
transaction;
o the board of directors of NetCreations determines that a
competing transaction is a superior proposal and does not
reconfirm its approval and recommendation of the merger agreement
and does not recommend against acceptance of such superior
proposal by its shareholders prior to termination of the merger
agreement; or
o NetCreations resolves to do any of the foregoing;
o NetCreations terminates the merger agreement following the
authorization by its board of directors, subject to complying with the
terms of the merger agreement, to enter into a binding written
agreement concerning a transaction that constitutes a superior
proposal;
o SEAT properly terminates the merger agreement following receipt by
NetCreations of a written notice from SEAT of a breach of any covenant
or agreement on the part of NetCreations set forth in the merger
agreement; or
o at or prior to the time of termination (pursuant to the following
events), either a competing transaction was proposed or publicly
announced and within 12 months after such termination, NetCreations
enters into a definitive agreement with respect to any competing
transaction or any competing transaction involving NetCreations is
consummated, and the merger agreement is terminated in either of the
following ways:
o either NetCreations or SEAT terminates the merger agreement,
without the fault of the terminating party, because the merger
has not been consummated before April 30, 2001; or
o either NetCreations or SEAT terminates the merger agreement
because the merger agreement and the merger fail to receive the
requisite votes for adoption at the NetCreations special
shareholders meeting.
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In the event NetCreations terminates the merger agreement due to a
breach by SEAT of its representations, warranties, covenants and agreements
contained in the merger agreement, then SEAT will reimburse NetCreations for
NetCreations' expenses associated with the merger.
Extension, Waiver and Amendment of the Merger Agreement
At any time prior to the completion of the merger, either SEAT or
NetCreations may extend the time for or waive compliance with the performance of
any obligation or other act of the other party, waive any inaccuracy in the
representations and warranties contained in the merger agreement or in any
document delivered pursuant to the merger agreement and, subject to applicable
law, waive compliance by the other party with any of the agreements or
conditions contained in the merger agreement.
The merger agreement may be amended by SEAT and NetCreations at any
time prior to the completion of the merger. However, after the adoption of the
merger agreement by NetCreations' shareholders, no amendment may be made that
decreases the amount or changes the type of consideration into which
NetCreations common stock will be converted pursuant to the merger agreement.
Related Agreements
Shareholders' Agreement
In connection with the merger, Rosalind Resnick and Ryan Scott
Druckenmiller, as shareholders of NetCreations, have entered into a
shareholders' agreement with SEAT, Sogerim and Nickel Acquisition. The terms of
the shareholders' agreement provide that these shareholders will vote the shares
of NetCreations common stock specified in the shareholders' agreement,
representing, in the aggregate, approximately 65% of NetCreations' outstanding
common stock as of December 22, 2000, at every meeting of the shareholders of
NetCreations at which the merger agreement or the merger is considered or voted
upon, and at every adjournment and on every action or approval by written
resolution of the shareholders of NetCreations with respect to the merger
agreement or the merger, in favor of approval of the merger agreement and of the
merger. In addition, except in certain circumstances, each such shareholder has
agreed not to do the following:
o initiate or solicit, directly or indirectly, any proposal, plan or offer to
acquire all or any material part of the business or properties or capital
stock of NetCreations;
o initiate, directly or indirectly, any contact with any person in an effort
to or with a view towards soliciting any such transaction;
o furnish information regarding NetCreations' business, properties or assets
to any person or group (other than SEAT, or any associate, agent or
representative of SEAT) under any circumstances that could reasonably be
expected to relate to such a transaction; or
o negotiate or enter into discussions or an agreement, directly or
indirectly, with any entity or group with respect of any such potential
transaction.
The NetCreations shareholders who are parties to the shareholders'
agreement have retained the right to vote their shares of NetCreations common
stock on all matters other than those identified in the shareholders' agreement.
Nothing in the shareholders' agreement will limit the discretion of either
shareholder a party thereto with respect to any action which may be taken by him
or her acting in his or her fiduciary duty as a director of NetCreations.
The shareholders who are parties to the shareholders' agreement were not paid
additional consideration in connection with such shareholders' agreement.
Employment and Non-Compete Agreements
Concurrently with the execution of the merger agreement, SEAT entered
into employment agreements with Ms. Resnick and Mr. Druckenmiller. The terms and
conditions of each of these new employment agreements, which will become
effective upon the consummation of the merger, are substantially similar to the
terms and conditions contained in Ms. Resnick's and Mr. Druckenmiller's existing
employment agreements with NetCreations,
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provided, however, that the new employment agreements do not provide equity
based compensation and each has a term of one year, while the existing
employment agreements do provide equity based compensation and each has a term
of three years.
Under the terms of the employment agreements, Ms. Resnick and Mr.
Druckenmiller each agreed to be employed by NetCreations for a term of one year
and on an at-will basis thereafter. Ms. Resnick will be employed in the position
of President and Chief Executive Officer of NetCreations, with an annual salary
of $175,000. Ms. Resnick will be eligible to receive a bonus of up to $175,000,
contingent upon meeting certain agreed upon performance targets, for the year
2001 and, thereafter, will be eligible for a year-end bonus in an amount up to
30% of her base salary. Mr. Druckenmiller will be employed as Chief Technology
Officer of NetCreations, with an annual salary of $175,000. Mr. Druckenmiller
will be eligible to receive a bonus of up to $175,000, contingent upon meeting
certain agreed upon performance targets, for the year 2001 and, thereafter, will
be eligible for a year-end bonus in an amount up to 30% of his base salary. If
the employment of either Ms. Resnick or Mr. Druckenmiller is terminated by
NetCreations without cause or by such employee for good reason prior to twelve
months after the closing date of the merger, that employee will be entitled to
receive salary continuation until the later of six (6) months after the last
date of employment or the first anniversary of the closing date of the merger.
"Cause" as used in these employment agreements, means termination of
employment based upon:
o the employee's breach of any material provision contained in the employment
agreement;
o misconduct, which includes misappropriating NetCreations funds or property,
obtaining any personal profit from any transaction in which the employee
has an interest that is adverse to NetCreations or any material breach of
the duty of loyalty and fidelity to NetCreations, or any other act or
omission by the employee which substantially impairs NetCreations' ability
to conduct its ordinary business in its usual manner;
o willful neglect or refusal to perform the material duties assigned to the
employee under or pursuant to the terms of the employment agreement;
o conviction of, or plea of guilty or nolo contendere to, criminal charges
involving moral turpitude or conduct that concerns the business in which
NetCreations is engaged, or conduct which, if prosecuted, would warrant
conviction on such charges under a `beyond a reasonable doubt' standard of
proof;
o acts of dishonesty or moral turpitude by the employee that NetCreations
reasonably believes are materially detrimental to NetCreations;
o any act or omission which subjects NetCreations or any of its affiliates to
substantial public disrespect, scandal, or ridicule, or that causes
NetCreations to be in violation of governmental regulations that subjects
NetCreations either to sanctions by governmental authority or to civil
liability to its employees or third parties; or
o disclosure or use of NetCreations' confidential information, other than as
specifically authorized and required (or as the employee reasonably
believes to be authorized and required) in the performance of the
employee's duties.
If an employee declares bankruptcy, such declaration will not
constitute grounds for termination for Cause under the employee's employment
agreement.
"Good reason" as used in the employment agreements, means resignation
by the employee within thirty days after the occurrence of any of the following
events:
o any reduction in the employee's base salary as specified in the employment
agreement;
o a requirement by NetCreations that the employee relocate to an office more
than a fifty (50) mile radius from the employee's office at the time of the
execution of the employment agreement; or
o an adverse change in the employee's job title.
The employment agreements also contain customary non-competition and
non-solicitation provisions which provide that Ms. Resnick and Mr. Druckenmiller
will not:
o Engage in any activity in certain markets specified in the employment
agreements.
o Permit such employee's name to be used in connection with a business which
is competitive or substantially similar to a business specified in the
employment agreements.
o Acquire any debt, equity, or other ownership interest in any person or
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<PAGE>
entity engaged in a business, except that such employee may own, in the
aggregate, not more than one percent (1%) of the outstanding shares of any
publicly held corporation which is competitive with NetCreations.
o Request or otherwise attempt to induce or influence, directly or
indirectly, any present or prospective customer of NetCreations, its
affiliates, or other persons sharing a business relationship with
NetCreations to cancel, limit, or postpone their business with
NetCreations, or otherwise take action which might be to the material
disadvantage of NetCreations.
o Solicit for employment, directly or indirectly, or induce or attempt to
influence any employee, agent, officer, director, contractor, consultant,
or other business associate of NetCreations to terminate his or her
employment or discontinue such person's consultant, contractor, or other
business association with NetCreations.
Each of the restrictions listed above will apply during the employee's period of
employment and for a period of two years following the end of such employment,
except that, with respect to Ms. Resnick, the initial three restrictions listed
above will continue for a period of three years following the end of her
employment.
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<PAGE>
SECURITY OWNERSHIP OF NETCREATIONS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
For the purposes of calculating percentage ownership of NetCreation, as
of January 18, 2001, 15,538,425 shares were issued and outstanding and, for any
individual who beneficially owns shares represented by options exercisable on or
before March 19, 2001, these shares are treated as if outstanding for that
person, but not for any other person. Unless otherwise indicated, the address of
each of the individuals and entities named below is: c/o NetCreations, Inc., 379
West Broadway, Suite 202, New York, New York 10012.
The following table sets forth certain information with respect to the
beneficial ownership of NetCreations common stock as of January 18, 2001, as
to:
o each person known by NetCreations to own beneficially more than 5% of its
outstanding common stock;
o each of NetCreations' directors and executive officers; and
o all of NetCreations' directors and executive officers as a group.
In addition, as a result of entering into the shareholders' agreement
with two NetCreations shareholders, a form of which is attached as Appendix B to
this proxy statement, SEAT and its affiliates may be deemed to be the beneficial
owner of 10,098,601 shares of NetCreations common stock. SEAT disclaims
beneficial ownership of such shares.
Unless otherwise indicated, NetCreations believes that each beneficial
owner set forth in the table below has sole voting and investment power with
respect to the number of shares set forth opposite such NetCreations
shareholder's name.
<TABLE>
<CAPTION>
Number of Shares
Name Beneficially Owned Percent of Class
---- ------------------ ----------------
<S> <C> <C>
Rosalind B. Resnick........................................................ 5,754,500 37.0%
Ryan Scott Druckenmiller................................................... 5,230,035 33.7%
Gary Sindler (1)........................................................... -- *
Robert A. Mattes (2)....................................................... 13,333 *
Scott Wolf (2)............................................................. 66,664 *
Tej Anand (2)(3)........................................................... 66,664 *
Brian Burlant (2).......................................................... 24,999 *
Nicolle Comeforo (2)....................................................... 21,249 *
Michael Levy (2)........................................................... 75,000 *
Gregory W. Slayton (2).................................................... 75,000 *
Mitchell York (2).......................................................... 75,000 *
All directors and executive officers ......................................
as a group (11 persons).................................................... 11,402,444 73.4%
</TABLE>
---------------------------
* Less than 1% of the outstanding common stock
(1) Resigned as Chief Financial Officer, effective August 15, 2000.
(2) Consists of options to purchase shares of common stock which are
exercisable within 60 days of January 18, 2001.
(3) Resigned as Chief Information Officer, effective November 22, 2000.
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<PAGE>
COMPARATIVE PER SHARE MARKET PRICE DATA
Market Price Information
NetCreations Market Price Data
NetCreations common stock has traded on the Nasdaq National Market
under the symbol "NTCR" since November 12, 1999. The following table sets forth
the range of high and low sales prices reported on the Nasdaq National Market
for NetCreations common stock for the periods indicated.
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
Fiscal 1999
Fourth Quarter (from November 12, 1999)............. $69.750 $17.500
Fiscal 2000
First Quarter ...................................... $64.625 29.875
Second Quarter...................................... 60.375 20.141
Third Quarter....................................... 53.250 8.875
Fourth Quarter...................................... 11.625 3.5625
Fiscal 2001
First Quarter (through close of business on
January 18, 2001)................................. 6.9688 6.8438
</TABLE>
Recent Closing Prices
As of December 20, 2000, the last trading day before the public
disclosure of a binding offer, the closing price per share of NetCreations
common stock on the Nasdaq National Market was $4.375. On January 18, 2001, the
closing price per share of NetCreations common stock on the Nasdaq National
Market was $6.9062. We urge NetCreations shareholders to obtain current market
quotations for NetCreations common stock. We cannot give you any assurance as to
the future prices or markets for NetCreations common stock.
Dividend Policy
NetCreations has never paid cash dividends on its stock and anticipates
that it will continue to retain any earnings for the foreseeable future for use
in the operation of its business.
Where You Can Find More Information
NetCreations files reports, proxy statements and other information with
the Securities and Exchange Commission. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. You may read and copy this information at the following locations of the
Securities and Exchange Commission:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, DC 20549, at prescribed rates. The Securities and
Exchange Commission also maintains an Internet World Wide Web site that contains
reports, proxy statements and other information about issuers, including
NetCreations, who file electronically with the Securities and Exchange
Commission. The address of that site is http://www.sec.gov. You can also inspect
reports, proxy
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<PAGE>
statements and other information about NetCreations at the offices of the
National Association of Securities Dealers, 1735 K Street, N.W., Washington, DC
20006.
NetCreations will send you copies of documents it has filed with the
Securities and Exchange Commission, excluding exhibits, without charge. You may
contact NetCreations at:
NetCreations, Inc.
Investor Relations
379 West Broadway, Suite 202
New York, NY 10012
(212) 625-1370
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY FEBRUARY [__],
2001 IN ORDER TO RECEIVE THEM BEFORE THE SPECIAL SHAREHOLDERS MEETING.
NetCreations shareholders should rely only on the information contained
in this proxy statement to vote on adoption of the merger agreement.
NetCreations has not authorized anyone to provide information that is different
from what is contained in this proxy statement. This proxy statement is dated
January , 2001. Stockholders should not assume that the information contained in
this proxy statement is accurate as of any other date, and neither the mailing
of this proxy statement to NetCreations shareholders nor the delivery of cash to
NetCreations shareholders pursuant to the merger shall create any implication to
the contrary.
Shareholder Proposals
NetCreations intends to hold an annual meeting in 2001 only if the SEAT
merger is not consummated. If the merger is not consummated, shareholders of
NetCreations may submit proposals for consideration at the next annual meeting
of NetCreations shareholders. In order to be so included for the next annual
meeting, shareholder proposals must have been received by NetCreations no later
than November 15, 2000 and must have complied with the requirements of Rule
14a-8 under the Securities Exchange Act of 1934. In addition, NetCreations'
by-laws establish an advance notice procedure with regard to certain matters,
including shareholder proposals not included in NetCreations' proxy statement,
to be brought before an annual meeting of shareholders. In general, notice must
be received by NetCreations' secretary not less than 60 days prior to the date
NetCreations' proxy statement was released to shareholders in connection with
the previous year's annual meeting and must contain specified information
concerning the matters to be brought before such meeting and concerning the
shareholder proposing such matters.
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<PAGE>
Appendix A
EXECUTION COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
among
SEAT PAGINE GIALLE S.P.A.,
SOGERIM, SOCIETE ANONYME,
NICKEL ACQUISITION CORP.
and
NETCREATIONS, INC.
Dated as of December 22, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms...................................... 2
ARTICLE II
THE MERGER
SECTION 2.01 The Merger................................................. 8
SECTION 2.02 Closing.................................................... 8
SECTION 2.03 Effective Time............................................. 9
SECTION 2.04 Effect of the Merger....................................... 9
SECTION 2.05 Certificate of Incorporation; Bylaws;
Directors and Officers of Surviving
Corporation................................................ 9
ARTICLE III
EFFECT OF MERGER ON CAPITAL STOCK OF
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01 Effect on Capital Stock.................................... 10
SECTION 3.02 Exchange of Shares Other than
Treasury Shares............................................ 11
SECTION 3.03 Stock Transfer Books....................................... 15
SECTION 3.04 Options to Purchase Company Common Stock................... 15
SECTION 3.05 Employee Stock Purchase Plan............................... 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
SECTION 4.01 Organization and Qualification;
Subsidiaries............................................... 17
SECTION 4.02 Certificate of Incorporation and Bylaws.................... 17
SECTION 4.03 Capitalization............................................. 18
SECTION 4.04 Authority Relative to This Agreement....................... 19
SECTION 4.05 No Conflict; Required Filings and
Consents................................................... 20
SECTION 4.06 Permits; Compliance with Laws.............................. 20
SECTION 4.07 SEC Filings; Financial Statements.......................... 21
SECTION 4.08 Absence of Certain Changes or Events....................... 22
SECTION 4.09 Employee Benefit Plans; Labor Matters...................... 24
SECTION 4.10 [Intentionally Omitted].................................... 28
ii
<PAGE>
SECTION 4.11 Contracts.................................................. 28
SECTION 4.12 Litigation................................................. 30
SECTION 4.13 Environmental Matters...................................... 30
SECTION 4.14 Intellectual Property...................................... 31
SECTION 4.15 Taxes...................................................... 36
SECTION 4.16 Insurance.................................................. 39
SECTION 4.17 Properties................................................. 39
SECTION 4.18 [Intentionally Omitted].................................... 40
SECTION 4.19 Opinion of Financial Advisor............................... 40
SECTION 4.20 Brokers.................................................... 40
SECTION 4.21 Certain Business Practices................................. 40
SECTION 4.22 Section 912 of New York Law Not
Applicable................................................. 41
SECTION 4.23 Business Activity Restriction.............................. 41
SECTION 4.24 Privacy.................................................... 42
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 5.01 Organization and Qualification;
Subsidiaries............................................... 42
SECTION 5.02 Authority Relative to this Agreement....................... 43
SECTION 5.03 No Conflict; Required Filings and
Consents................................................... 44
SECTION 5.04 Financing.................................................. 44
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business by Company Pending
the Closing................................................ 45
SECTION 6.02 Notices of Certain Events.................................. 48
SECTION 6.03 Access to Information; Confidentiality..................... 49
SECTION 6.04 No Solicitation of Transactions............................ 49
SECTION 6.05 [Intentionally Omitted].................................... 52
SECTION 6.06 Control of Operations...................................... 52
SECTION 6.07 Further Action; Consents; Filings.......................... 52
SECTION 6.08 Additional Reports......................................... 53
SECTION 6.09 Tax Information............................................ 54
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Proxy Statement............................................ 54
iii
<PAGE>
SECTION 7.02 Company Shareholders' Meeting.............................. 56
SECTION 7.03 Directors' and Officers' Indemnification
and Insurance.............................................. 57
SECTION 7.04 Public Announcements....................................... 59
SECTION 7.05 Employee Benefit Matters................................... 59
SECTION 7.06 Shareholder Agreement Legend............................... 60
SECTION 7.07 Guaranty of Performance.................................... 60
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each
Party to Consummate the Merger............................. 60
SECTION 8.02 Conditions to the Obligations of Company................... 61
SECTION 8.03 Conditions to the Obligations of Parent
and Lux Sub................................................ 62
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination................................................ 63
SECTION 9.02 Effect of Termination...................................... 67
SECTION 9.03 Amendment.................................................. 67
SECTION 9.04 Waiver..................................................... 67
SECTION 9.05 Termination Fee; Expenses.................................. 68
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Non-Survival of Representations and
Warranties................................................. 69
SECTION 10.02 Notices.................................................... 70
SECTION 10.03 Severability............................................... 71
SECTION 10.04 Assignment; Binding Effect; Benefit........................ 71
SECTION 10.05 Incorporation of Exhibits.................................. 72
SECTION 10.06 Governing Law.............................................. 72
SECTION 10.07 Waiver of Jury Trial....................................... 72
SECTION 10.08 Headings; Interpretation................................... 72
SECTION 10.09 Counterparts............................................... 73
SECTION 10.10 Entire Agreement........................................... 73
SECTION 10.11 Enforcement................................................ 73
ANNEXES
ANNEX A Form of Shareholders' Agreement
iv
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 22, 2000
(as amended, supplemented or otherwise modified from time to time, this
"Agreement"), among SEAT PAGINE GIALLE S.P.A. ("Parent"), a limited company
organized under the laws of the Republic of Italy and a majority owned
subsidiary of Telecom Italia S.p.A., a limited company organized under the laws
of the Republic of Italy, SOGERIM, SOCIETE ANONYME ("Lux Sub"), a Luxembourg
corporation and a wholly owned subsidiary of Telecom Italia S.p.A., NICKEL
ACQUISITION CORP., a New York corporation and a direct wholly owned subsidiary
of Lux Sub ("Merger Sub"), and NETCREATIONS, INC., a New York corporation
("Company"):
W I T N E S S E T H:
WHEREAS, the respective boards of directors of Parent, Lux Sub
and Company have each determined that it is advisable and in the best interests
of their respective companies and shareholders to enter into a business
combination by means of the merger of Merger Sub with and into Company (the
"Merger") and have approved and adopted this Agreement; and
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to Parent to enter into this Agreement, certain shareholders of
Company have entered into a shareholders' agreement (the "Shareholders'
Agreement") in the form attached hereto as Annex A.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms
Unless the context otherwise requires, the following terms,
when used in this Agreement, shall have the respective meanings specified below
(such meanings to be equally applicable to the singular and plural forms of the
terms defined):
"Affiliate" shall mean, with respect to any person, any other
person that controls, is controlled by or is under common control with the first
person.
<PAGE>
"Business Day" shall mean any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which banks are
not required or authorized by Law or executive order to close in New York.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, together with the rules and regulations promulgated thereunder.
"Company Disclosure Schedule" shall mean the disclosure
schedule delivered by Company to Parent prior to the execution of this Agreement
and forming a part hereof.
"Company Material Adverse Effect" shall mean any change in or
effect on the business of Company that, individually or in the aggregate (taking
into account all other such changes or effects), is, or is reasonably likely to
be, materially adverse to the business, assets, liabilities, financial condition
or results of operations of Company, taken as a whole, except to the extent any
such change or effect results from or is attributable to (i) changes in general
economic conditions or changes affecting the industry generally in which Company
operates (provided that such changes do not affect Company in a materially
disproportionate manner) or (ii)(A) any litigation or loss of current or
prospective customers, employees or revenues as to which Company furnishes
reasonable evidence that it occurred primarily from the announcement of Company
entering into this Agreement or (B) any claim or litigation as a result of the
determination by the Company's board of directors that the proposal for the
Merger is a "Superior Proposal" within the meaning of the Company's prior merger
agreement with DoubleClick, Inc. ("DoubleClick"), dated as of October 2, 2000
(the "DoubleClick Merger Agreement") or alleging breach of the DoubleClick
Merger Agreement or arising as a result of the termination of the DoubleClick
Merger Agreement or the entry by the Company into this Merger Agreement or (C)
the payment by the Company of any termination fees or expenses pursuant to the
DoubleClick Merger Agreement; provided, however, that in no event shall (x) a
decrease in the trading price of Company Common Stock or litigation relating
thereto, (y) any matter publicly disclosed in a Company Report (as defined in
Section 4.07) or otherwise, in any case prior to the date hereof, or (z) the
termination of any agreement listed on Schedule I to the Company Disclosure
Schedule, be considered a Company Material Adverse Effect.
2
<PAGE>
"Company Stock Plan" shall mean Company's 1999 Employee Stock
Option Plan, as amended.
"Company Stock Purchase Plan" shall mean Company's 2000
Employee Stock Purchase Plan.
"Company Shareholders' Meeting" shall mean the special meeting
of Company shareholders to consider approval of this Agreement and the Merger.
"Competing Transaction" shall mean any of the following
involving Company (other than the Merger):
(i) any merger, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or other
similar transaction;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 20% or more of the assets (including, without
limitation, any equity securities of subsidiaries) of Company and its
subsidiaries, taken as a whole, in a single transaction or series of
related transactions (excluding for this purpose the providing of
opt-in e-mail addresses to direct marketers and brokers by Company in
the ordinary course of business);
(iii) any tender offer or exchange offer for 20% or more of
the outstanding voting securities of Company or the filing of a
registration statement under the Securities Act in connection
therewith;
(iv) any person having acquired beneficial ownership or the
right to acquire beneficial ownership of, or any "group" (as such terms
are defined under Section 13(d) of the Exchange Act) having been formed
3
<PAGE>
that beneficially owns or has the right to acquire beneficial ownership
of, 20% or more of the outstanding voting securities of Company; and
(v) any public announcement of a proposal, plan or intention
to do any of the foregoing or any agreement to engage in any of the
foregoing.
"Confidentiality Agreement" shall mean the confidentiality
agreement, dated as of December 20, 2000, between Parent and Company.
"$" shall mean United States Dollars.
"Environmental Law" shall mean any Law and any enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to pollution or
protection of the environment or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Material, as in effect as
of the date hereof.
"Environmental Permit" shall mean any permit, approval,
identification number, license or other authorization required under or issued
pursuant to any applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
"Expenses" shall mean, with respect to any party hereto, all
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its Affiliates) incurred by such party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of its obligations pursuant to this Agreement and the consummation
of the Merger, the preparation, printing, filing and mailing of the Proxy
Statement, the solicitation of shareholder approvals, the filing of HSR Act
notice, if any, and all other matters related to the transactions contemplated
hereby and the closing of the Merger.
4
<PAGE>
"Governmental Entity" shall mean any United States Federal,
state or local or any foreign governmental, regulatory or administrative
authority, agency or commission or any court, tribunal or arbitral body.
"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Entity.
"Hazardous Material" shall mean (i) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.
"HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, together with the rules and regulations promulgated
thereunder.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge of Company" shall mean that any officer of Company
is actually aware of a fact or other matter, or should have been aware of a fact
or other matter based upon due inquiry and investigation.
"Knowledge of Parent" shall mean that any executive officer of
Parent is actually aware of a fact or other matter, or should have been aware of
a fact or other matter based upon due inquiry and investigation.
"Law" shall mean any Federal, state, foreign or local statute,
law, ordinance, regulation, rule, code, order, judgment, decree or other
requirement or rule of law of the United States or any other jurisdiction, and
any similar act or law.
"NNM" shall mean The Nasdaq National Market.
"New York Law" shall mean the New York Business Corporation
Law.
5
<PAGE>
"Parent Material Adverse Effect" shall mean any change in or
effect on the business of Parent or Lux Sub and their respective subsidiaries
that would prevent, or is reasonably likely to prevent, Parent or Lux Sub from
performing their respective obligations under this Agreement or the consummation
of the transactions contemplated hereby.
"person" shall mean an individual, corporation, partnership,
limited partnership, limited liability company, limited liability partnership,
syndicate, person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"subsidiary" shall mean, with respect to any person, and
corporation, partnership, limited partnership, limited liability company,
limited liability partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary of such
person), owns, directly or indirectly, a majority of the stock or other equity
interests, the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
"Tax" shall mean (i) any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Entity or taxing authority,
including, without limitation, taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges; (ii) any liability for the payment of any amounts of the type
6
<PAGE>
described in (i) as a result of being a member of an affiliated, combined,
consolidated or unitary group for any Taxable period; and (iii) any liability
for the payment of amounts of the type described in (i) or (ii) as a result of
being a transferee of, or a successor in interest to, any person or as a result
of an express or implied obligation to indemnify any person.
"Tax Authority" shall mean any domestic, foreign, Federal,
national, state, county or municipal or other local government body (including
any subdivision, agency or commission thereof), or any quasi-governmental body,
in each case, exercising regulatory authority in respect of Taxes.
"Tax Return" shall mean any return, statement or form
(including, without limitation, any estimated tax reports or return, withholding
tax reports or return and information report or return) required to be filed
with respect to any Taxes.
"U.S. GAAP" shall mean generally accepted accounting
principles as applied in the United States.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with New York Law, at the Effective Time (as
defined in Section 2.03), Merger Sub shall be merged with and into Company. As a
result of the Merger, the separate corporate existence of Merger Sub shall cease
and Company shall continue as the surviving corporation in the Merger as a
wholly owned subsidiary of Lux Sub (the "Surviving Corporation").
SECTION 2.02 Closing
Unless this Agreement shall have been terminated and the
Merger herein contemplated shall have been abandoned pursuant to Section 9.01
and subject to the satisfaction or waiver of the conditions set forth in Article
VIII, the consummation of the Merger shall take place as promptly as practicable
(and in any event within three Business Days) after satisfaction or waiver of
7
<PAGE>
the conditions set forth in Article VIII, at a closing (the "Closing") to be
held at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New
York 10019, unless another date, time or place is agreed to by Parent and
Company.
SECTION 2.03 Effective Time
Immediately upon the closing, the parties shall cause the
Merger to be consummated by filing a certificate of merger (the "Certificate of
Merger") with the Secretary of State of the State of New York in such form as
required by, and executed in accordance with the relevant provisions of, New
York Law (the date and time of such filing, or such later date and time as may
be set forth therein, being the "Effective Time").
SECTION 2.04 Effect of the Merger
At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of New York Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, except
as otherwise provided herein, all the property, rights, privileges, powers and
franchises of Company and Merger Sub shall vest in Company as the Surviving
Corporation, and all debts, liabilities and duties of Company and Merger Sub
shall become the debts, liabilities and duties of Company as the Surviving
Corporation.
SECTION 2.05 Certificate of Incorporation; Bylaws;
Directors and Officers of Surviving Corporation
Unless otherwise agreed by Parent and Company before the
Effective Time, at the Effective Time:
(a) the certificate of incorporation of Merger Sub as of the
Effective Time shall constitute the certificate of incorporation of the
Surviving Corporation until thereafter amended;
(b) subject to the requirements of Section 7.03(a) hereof, the
bylaws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be adopted as the bylaws of the Surviving Corporation until
thereafter amended;
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(c) the officers of Merger Sub immediately prior to the
Effective Time shall serve in their respective offices of the Surviving
Corporation from and after the Effective Time, in each case until their
successors are elected or appointed and qualified or until their
resignation or removal; and
(d) the directors of Merger Sub immediately prior to the
Effective Time shall serve as the directors of the Surviving
Corporation from and after the Effective Time, in each case until their
successors are elected or appointed and qualified or until their
resignation or removal.
ARTICLE III
EFFECT OF MERGER ON CAPITAL STOCK OF 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 Parent, Lux Sub, Merger Sub, Company or the holders of
any of the following securities:
(a) each share of common stock, $.01 par value per share, of
Company ("Company Common Stock") issued and outstanding immediately before the
Effective Time (excluding those held in the treasury of Company and those owned
by any wholly owned subsidiary of Company) and all rights in respect thereof,
shall, forthwith cease to exist and be converted into the right to receive $7.00
in cash (the "Merger Consideration"); and 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, without
interest;
(b) each share of Company Common Stock held in the treasury of
Company immediately prior to the Effective Time shall be canceled and retired
and shall cease to exist, and no consideration shall be delivered in exchange
therefor, and each share of Company Common Stock owned by any subsidiary of
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either Company or Parent (other than Merger Sub) shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation;
(c) each issued and outstanding share of capital stock of
Merger Sub shall be converted into and become one fully paid and nonassessable
share of common stock of the Surviving Corporation; and
(d) from and after the Effective Time, each outstanding
certificate theretofore representing shares of Merger Sub common stock shall be
deemed for all purposes to evidence ownership of and to represent the number of
shares of Surviving Corporation common stock into which such shares of Merger
Sub common stock shall have been converted.
SECTION 3.02 Exchange of Shares Other than Treasury Shares
(a) Paying Agent. Prior to the Effective Time, Lux Sub shall
select a bank or trust company reasonably satisfactory to Company to act as
paying agent (the "Paying Agent") for the payment of the Merger Consideration
upon surrender of Company Certificates (as defined in Section 3.02(c)).
(b) Lux Sub to Provide Cash. Lux Sub shall take all steps
necessary to provide to the Paying Agent immediately following the Effective
Time all the 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(a) (such cash, including any interest earned thereon, being hereinafter
referred to as the "Exchange Fund").
(c) Exchange Procedures. The Paying Agent shall mail to each
holder of record of a certificate or certificates that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock ("Company
Certificates"), whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 3.01(a), promptly after the Effective Time
(and in any event no later than three Business Days after the later to occur of
the Effective Time and receipt by Parent and Lux Sub of a complete list from
Company of the names and addresses of its holders of record): (i) a letter of
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transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificates shall pass, only upon receipt of the
Company Certificates by the Paying Agent, and shall be in such form and have
such other provisions as Parent or Lux Sub may reasonably specify); and (ii)
instructions for use in effecting the surrender of the Company Certificates in
exchange for the Merger Consideration. Upon surrender of a Company Certificate
for cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Lux Sub, together with such letter of transmittal, duly completed
and validly executed, and such other documents as may be reasonably required by
the Paying Agent, the holder of such Company Certificate shall be entitled to
receive in exchange therefor the amount of cash into which the shares of Company
Common Stock theretofore represented by such Company Certificate shall have been
converted pursuant to Section 3.01(a), and the Company Certificate so
surrendered shall forthwith be canceled. Until surrendered as contemplated by
this Section 3.02(c), each Company Certificate shall be deemed at any time after
the Effective Time to represent only the right to receive upon such surrender
the amount of cash, without interest, into which the shares of Company Common
Stock theretofore represented by such Company Certificate shall have been
converted pursuant to Section 3.01(a). No interest will be paid or will accrue
on the cash payable upon the surrender of any Company Certificate.
(d) No Further Ownership Rights in Company Common Stock. The
Merger Consideration paid upon surrender of Company Certificates in accordance
with the terms of this Article III shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
theretofore represented by such Company Certificates. If, after the Effective
Time, any Company Certificate is presented to the Surviving Corporation or the
Paying Agent for any reason, it shall be canceled and exchanged as provided in
this Article III (subject, in the case of any Company Certificate presented to
the Paying Agent, to the provisions of Section 3.02(f)).
(e) Transfer of Ownership. In the event of a transfer of
ownership of Company Common Stock that is not registered in the transfer records
of Company, payment of the Merger Consideration may be made to a person other
than the person in whose name the Company Certificate surrendered in accordance
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with this Article III is registered, if such Company Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the Company
Certificate so surrendered, or establish to the satisfaction of Lux Sub or any
agent designated by it that such tax has been paid or is not applicable.
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to holders of Company Certificates pursuant to
this Article III for six months after the Effective Time shall promptly be paid
to Parent, and thereafter holders of Company Certificates who have not
theretofore complied with the exchange procedures outlined in and contemplated
by this Section 3.02 shall thereafter look only to Parent (subject to abandoned
property, escheat and similar laws) only as general creditors thereof with
respect to any Merger Consideration that may be payable upon due surrender of
the Company Certificates held by them.
(g) No Liability. Notwithstanding anything to the contrary in
this Section 3.02, none of the Paying Agent, the Surviving Corporation or any
party hereto 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 Law. If any Company Certificate shall not
have been surrendered prior to the thirty-first day of December in the fifth
calendar year after the Effective Time (or immediately prior to such earlier
date on which the Merger Consideration in respect of such Company Certificate
would otherwise escheat to or become the property of any Governmental Entity),
the payment in respect of such Company 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.
(h) Lost, Stolen or Destroyed Company Certificates. In the
event any Company Certificates shall have been lost, stolen or destroyed, the
Paying Agent shall deliver in exchange for such lost, stolen or destroyed
Company Certificates, upon the making of an affidavit of that fact by the holder
thereof, the Merger Consideration payable in respect thereto pursuant to this
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Article III; provided, however, that Parent may, in its discretion and as a
condition precedent to the delivery thereof, require the owner of such lost,
stolen or destroyed Company Certificates to indemnify Parent and Lux Sub against
any claim that may be made against Parent, Lux Sub, the Surviving Corporation or
the Paying Agent with respect to the Company Certificates alleged to have been
lost, stolen or destroyed.
(i) Investment of Exchange Fund. The Paying Agent shall invest
any cash included in the Exchange Fund, as directed by Lux Sub, on a daily
basis. If for any reason (including investment losses), the Exchange Fund is
inadequate to pay the amounts to which holders of Company Certificates shall be
entitled under this Section 3.02, Parent, Lux Sub and the Surviving Corporation
shall nevertheless be liable for the payment thereof. The Exchange Fund shall
not be used except as provided in this Agreement. Any interest and other income
resulting from such investments shall be the property of, and shall be paid to,
Lux Sub.
(j) Withholding Rights. Lux Sub, Parent and the Paying Agent
shall be entitled to deduct and withhold from the Merger 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 state, local or
foreign tax law. In the event Lux Sub, Parent or the Paying Agent shall be
required to deduct or withhold any taxes under the federal or local laws of
Italy or Luxembourg ("Foreign Taxes") from the Merger Consideration otherwise
payable to any holder of Company Common Stock, the relevant amount of Merger
Consideration payable to such holder shall be increased by the amount necessary
to make the actual amount received by such holder after such Foreign Taxes are
withheld equal to the amount that would have been received had no such
withholding for Foreign Taxes been required.
SECTION 3.03 Stock Transfer Books
At the Effective Time, the stock transfer books of Company
shall each be closed, and there shall be no further registration of transfers of
shares of Company Common Stock thereafter on the records of any such stock
transfer books. In the event of a transfer of ownership of shares of Company
Common Stock that is not registered in the stock transfer records of Company at
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the Effective Time, the Merger Consideration into which such shares of Company
Common Stock shall have been converted shall be paid to the transferee if the
certificate or certificates representing such shares of Company Common Stock is
or are surrendered as provided in Section 3.02(c) hereof, accompanied by all
documents required to evidence and effect such transfer and by evidence of
payment of any applicable stock transfer tax.
SECTION 3.04 Options to Purchase Company Common Stock
(a) At the Effective Time (and without any action by the Board
of Directors of the Company or any committee administering the Company Stock
Plan), the Company Stock Plan and each option granted by Company to purchase
shares of Company Common Stock pursuant to the Company Stock Plan ("Company
Stock Options") which is outstanding and unexercised immediately prior to the
Effective Time, shall be canceled with the holder thereof becoming entitled to
receive a cash payment from the Surviving Corporation at the Effective Time of
an amount equal to (i) the excess, if any, of (x) the Merger Consideration over
(y) the exercise price per share of Company Common Stock subject to such Company
Stock Option, multiplied by (ii) the number of shares of Company Common Stock
for which such Company Stock Option shall not theretofore have been exercised
(the "Option Consideration") (irrespective of whether and to the extent to which
any or all such Company Stock Options are exercisable or will be exercisable at
the Effective Time).
(b) All amounts payable pursuant to this Section 3.04 shall be
subject to any required withholding of Taxes and shall be paid without interest.
Company shall obtain all consents of the holders of Company Stock Options as
shall be necessary to effectuate the actions contemplated by this Section 3.04.
Notwithstanding anything to the contrary contained in this Agreement, payment of
the Option Consideration in respect of any Company Stock Option shall, at
Parent's request, be withheld until all necessary consents with respect to such
Company Stock Option have been obtained.
(c) The Company Stock Plan shall terminate as of the Effective
Time, and the provisions in any other Company Benefit Plan (as defined in
Section 4.09(a)) providing for the issuance, transfer or grant of any capital
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stock of Company or any interest in respect of any capital stock of Company
shall be deleted effective as of the Effective Time, and the Company shall
ensure that following the Effective Time no holder of a Company Stock Option or
any participant in the Company Stock Plan or any other Company Benefit Plan
shall have any right thereunder to acquire any capital stock of the Surviving
Corporation.
SECTION 3.05 Employee Stock Purchase Plan
At the Effective Time, the Company Stock Purchase Plan and
each outstanding purchase right under the Company Stock Purchase Plan shall
terminate, and all accumulated funds shall be distributed to participants as
though such participants had elected to withdraw therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent, Lux Sub and
Merger Sub, subject to the exceptions specifically disclosed in writing in the
Company Disclosure Schedule, all such exceptions to be referenced to a specific
representation set forth in this Article IV or to otherwise be reasonably
apparent to relate to representations hereof not specifically referenced, that:
SECTION 4.01 Organization and Qualification; Subsidiaries
(a) Company has been duly organized and is validly existing
and in good standing (to the extent applicable) under the laws of the State of
New York and has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Company is duly qualified or licensed to do business, and is in good
standing (to the extent applicable), in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. The name of Company under which it was formed was NetCreations Inc.
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(b) Company does not own an equity interest in any
corporation, partnership, joint venture arrangement or other business entity and
has no subsidiaries.
SECTION 4.02 Certificate of Incorporation and Bylaws
The copies of Company's certificate of incorporation and
bylaws previously provided to Parent by Company are true, complete and correct
copies thereof. Such certificate of incorporation and bylaws are in full force
and effect. Company is not in violation of any of the provisions of its
certificate of incorporation or bylaws.
SECTION 4.03 Capitalization
The authorized capital stock of Company consists of 50,000,000
shares of Company Common Stock and 5,000,000 shares of preferred stock, no par
value ("Company Preferred Stock"). As of the date hereof, (i) 15,534,000 shares
of Company Common Stock are issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (ii) no shares of Company Common Stock are
held in the treasury of Company, (iii) 2,961,000 shares of Company Common Stock
are reserved for future issuance pursuant to Company Stock Options, (iv)
1,000,000 shares of Company Common Stock are reserved for issuance under the
Company Stock Purchase Plan and (v) no shares of Company Preferred Stock are
outstanding. The name of each holder of a Company Stock Option as of the date
hereof, the grant date of each Company Stock Option, the number of shares of
Company Common Stock for which each Company Stock Option is exercisable, the
exercise price of each Company Stock Option and the vesting schedule of each
Company Stock Option are set forth in Section 4.03 of the Company Disclosure
Schedule. Except for shares of Company Common Stock issuable pursuant to the
Company Stock Plan or the Company Stock Purchase Plan as set forth in the second
sentence above, there are not issued, reserved for issuance or outstanding (A)
any shares of capital stock or other voting securities of Company or (B) any
options, warrants, convertible or exchangeable securities or other rights,
agreements, arrangements or commitments of any character to which Company is a
party or by which Company is bound relating to the issued or unissued capital
stock of Company or obligating Company to issue or sell any shares of capital
stock of, or other equity or voting interests in, Company. All shares of Company
Common
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Stock subject to issuance as aforesaid, upon issuance prior to the Effective
Time on the terms and conditions specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of Company to
repurchase, redeem or otherwise acquire any shares of Company Common Stock.
There are no material outstanding contractual obligations of Company to provide
funds to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any entity or person.
SECTION 4.04 Authority Relative to This Agreement
Company has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Company and the consummation by Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Company are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than, with respect to the Merger, the approval of
this Agreement by the holders of two-thirds (2/3) of the outstanding shares of
Company Common Stock entitled to vote with respect thereto at the Company
Shareholders' Meeting (the "Company Shareholder Approval"), and the filing and
recordation of the Certificate of Merger as required by New York Law). This
Agreement has been duly executed and delivered by Company and, assuming the due
authorization, execution and delivery by the other parties hereto, constitutes
legal, valid and binding obligations of Company, enforceable against Company in
accordance with its terms, subject to the effect of any applicable bankruptcy,
moratorium, insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of general
principles of equity which may limit the availability of remedies (whether in a
proceeding at law or in equity).
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SECTION 4.05 No Conflict; Required Filings and Consents
(a) The execution and delivery of this Agreement by Company do
not, and the performance by Company of its obligations hereunder and the
consummation of the Merger will not, (i) conflict with or violate any provision
of the certificate of incorporation or bylaws of Company, (ii) assuming that all
filings and notifications described in Section 4.05(b) have been made, conflict
with or violate any Law applicable to Company or by which any material property
or asset of Company is bound or affected or (iii) result in any material breach
of or constitute a material default (or an event which with the giving of notice
or lapse of time or both could reasonably be expected to become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
material property or asset of Company pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation.
(b) The execution and delivery of this Agreement by Company do
not, and the performance by Company of its obligations hereunder and the
consummation of the Merger will not, require any consent, approval,
authorization or permit of, or filing by Company with or notification by Company
to, any Governmental Entity, except pursuant to applicable requirements of the
Exchange Act, the rules and regulations of the NNM, state takeover laws, the
premerger notification requirements of the HSR Act, and the filing and
recordation of the Certificate of Merger as required by New York Law.
SECTION 4.06 Permits; Compliance with Laws
Company is in possession of all material franchises, grants,
authorizations, licenses, establishment registrations, product listings,
permits, easements, variances, exceptions, consents, certificates,
identification and registration numbers, approvals and orders of any
Governmental Entity necessary for Company to own, lease and operate its
properties or to produce, store, distribute and market its products or otherwise
to carry on its business as it is now being conducted (collectively, the
"Company Permits"), and, as of the date of this Agreement, none of the Company
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Permits has been suspended or cancelled nor is any such suspension or
cancellation pending or, to the Knowledge of Company, threatened. Company is not
in conflict in any material respect with, or in material default or violation
of, (i) any Law applicable to Company or by which any property or asset of
Company is bound or affected or (ii) any Company Permits. Section 4.06 of the
Company Disclosure Schedule sets forth, as of the date of this Agreement, all
actions, proceedings, investigations or surveys pending or, to the Knowledge of
Company, threatened against Company that could reasonably be expected to result
in the suspension or cancellation of any other Company Permit. Since January 17,
1996, Company has not received from any Governmental Entity any written
notification with respect to possible conflicts, defaults or violations of Laws.
SECTION 4.07 SEC Filings; Financial Statements
(a) Company has timely filed all forms, reports, statements
and documents required to be filed by it (A) with the SEC and the NNM since
November 12, 1999 (collectively, together with any such forms, reports,
statements and documents Company may file subsequent to the date hereof until
the Closing, the "Company Reports") and (B) with any other Governmental
Entities. Each Company Report (i) was prepared in all material respects in
accordance with the requirements of the Securities Act, the Exchange Act or the
rules and regulations of the NNM, as the case may be, and (ii) did not at the
time it was filed (or, in the case of registration statements filed under the
Securities Act, at the time of effectiveness) 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 made therein, in the light of the
circumstances under which they were made, not misleading. Each material form,
report, statement and document referred to in clause (B) of this paragraph was
prepared in all material respects in accordance with the requirements of
applicable Law.
(b) Each of the financial statements (including, in each case,
any notes thereto) contained in the Company Reports was prepared in accordance
with U.S. GAAP (except as may be permitted by Form 10-Q under the Exchange Act)
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each presented fairly, in
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all material respects, the financial position of Company as at the respective
dates thereof and its results of operations, shareholders' equity and cash flows
for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against
on the balance sheet of Company as reported in the Company Reports, including
the notes thereto, Company has no liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on a balance sheet or in notes thereto prepared in accordance with
U.S. GAAP, except for immaterial liabilities or obligations incurred in the
ordinary course of business consistent with past practice since December 31,
1999.
SECTION 4.08 Absence of Certain Changes or Events
Since December 31, 1999, Company has conducted its business in
all material respects only in the ordinary course consistent with past practice
and, since such date, there has not been (i) any Company Material Adverse
Effect, (ii) any event that could reasonably be expected to prevent or
materially delay the performance of Company's obligations pursuant to this
Agreement and the consummation of the Merger by Company, (iii) any material
change by Company in its accounting methods, principles or practices, (iv) any
declaration, setting aside or payment of any dividend or distribution in respect
of the shares of Company Common Stock or any redemption, purchase or other
acquisition of any of Company's securities, (v) except for changes in the
ordinary course of business consistent with past practice that only affect
non-officer employees of the Company, any increase in the compensation or
benefits or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any employees, officers, consultants or directors of Company, (vi)
any issuance or sale of any stock, notes, bonds or other securities other than
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pursuant to offerings registered under the Securities Act or pursuant to the
exercise of outstanding securities, or entering into any agreement with respect
thereto, (vii) any amendment to the Company's certificate of incorporation or
bylaws, (viii) other than in the ordinary course of business consistent with
past practice, any (x) purchase, sale, assignment or transfer of any material
assets, (y) mortgage, pledge or creation of any lien, encumbrance or charge on
any material assets or properties, tangible or intangible, except for liens for
Taxes not yet delinquent and such other liens, encumbrances or charges which,
individually or in the aggregate, have not had, and cannot reasonably be
expected to lead to, a Company Material Adverse Effect, or (z) waiver of any
rights of material value or cancellation or any material debts or claims, (ix)
any incurrence of any material liability (absolute or contingent), except for
current liabilities and obligations incurred in the ordinary course of business
consistent with past practice, (x) any incurrence of any damage, destruction or
similar loss, whether or not covered by insurance, materially affecting the
business or properties of Company, or (xi) any entering into any transaction of
a material nature other than in the ordinary course of business, consistent with
past practice.
SECTION 4.09 Employee Benefit Plans; Labor Matters
(a) The Company Disclosure Schedule lists each employee
benefit fund, plan, program, arrangement and contract (including, without
limitation, any "pension" plan, fund or program, as defined in Section 3(2) of
ERISA, and any "employee benefit plan," as defined in Section 3(3) of ERISA and
any plan, program, arrangement or contract providing for severance; medical,
dental or vision benefits; life insurance or death benefits; disability
benefits, sick pay or other wage replacement; vacation, holiday or sabbatical;
pension or profit-sharing benefits; stock options or other equity compensation;
bonus or incentive pay or other material fringe benefits), whether written or
not ("Benefit Plans"), maintained, sponsored or contributed to or required to be
contributed to by Company (the "Company Benefit Plans"). With respect to each
Company Benefit Plan, Company has delivered or made available to Parent a true,
complete and correct copy of (i) such Company Benefit Plan (or, if not written,
a written summary of its material terms) and the most recent summary plan
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description, if any, related to such Company Benefit Plan, (ii) each trust
agreement or other funding arrangement, if any, relating to such Company Benefit
Plan, (iii) the most recent annual report (Form 5500), if any, filed with the
IRS with respect to such Company Benefit Plan (and, if the most recent annual
report is a Form 5500R, the most recent Form 5500C filed with respect to such
Company Benefit Plan), (iv) the most recent actuarial report or financial
statement, if any, relating to such Company Benefit Plan and (v) the most recent
determination, notification, advisory or opinion letter, issued by the IRS with
respect to such Company Benefit Plan and any pending request for such a
determination letter. Neither Company nor, to the Knowledge of Company, any
other person or entity, has any express or implied commitment, whether legally
enforceable or not, to modify, change or terminate any Company Benefit Plan,
other than with respect to a modification, change or termination required by
ERISA or the Code.
(b) Each Company Benefit Plan has been administered in all
material respects in accordance with its terms and all applicable Laws,
including ERISA and the Code, and all contributions required to be made under
the terms of any of the Company Benefit Plans as of the date of this Agreement
have been timely made or, if not yet due, have been properly reflected on the
most recent balance sheet filed or incorporated by reference in the Company
Reports prior to the date of this Agreement. With respect to the Company Benefit
Plans, no event has occurred and, to the Knowledge of Company, there exists no
condition or set of circumstances in connection with which Company could be
subject to any material liability (other than for routine benefit liabilities)
under the terms of, or with respect to, such Company Benefit Plans, under ERISA,
the Code or any other applicable Law.
(c) Company on behalf of itself and each Company ERISA
Affiliate (as defined below) hereby represents that: (i) each Company Benefit
Plan which is intended to qualify under Section 401(a), Section 401(k), Section
401(m) or Section 4975(e)(5) of the Code has received a favorable determination,
notification, advisory or opinion letter from the IRS as to its qualified
status, and each trust established in connection with any Company Benefit Plan
which is intended to be exempt from Federal income taxation under Section 501(a)
of the Code has received a determination letter from the IRS that it is so
exempt, and to the Knowledge of Company no fact or event has occurred that could
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adversely affect the qualified status of any such Company Benefit Plan or the
exempt status of any such trust; (ii) to the Knowledge of Company there has been
no prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code and other than a transaction that is exempt under a statutory
or administrative exemption) with respect to any Company Plan that could result
in liability to Company and (iii) each Company Benefit Plan can be amended,
terminated or otherwise discontinued after the Effective Time in accordance with
its terms, without material liability (other than (A) liability for ordinary
administrative expenses typically incurred in a termination event or (B)
liability for the accrued benefits as of the date of such termination to the
extent that either there are sufficient assets set aside in a trust or insurance
contract to satisfy such liability or such liability is reflected on the most
recent consolidated balance sheet filed or incorporated by reference in the
Company Reports prior to the date of this Agreement). No suit, administrative
proceeding, action or other litigation has been brought, or to the Knowledge of
Company is threatened, against or with respect to any such Company Benefit Plan,
including any audit or inquiry by the IRS or United States Department of Labor
(other than routine benefits claims).
(d) No Company Benefit Plan is a multiemployer pension plan
(as defined in Section 3(37) of ERISA) or other pension plan subject to Title IV
of Part 3 of Title I of ERISA or Section 412 of the Code and neither Company nor
any other trade or business (whether or not incorporated) that is under "common
control" with Company (within the meaning of ERISA Section 4001) or with respect
to which Company could otherwise incur liability under Title IV of ERISA (a
"Company ERISA Affiliate") has sponsored or contributed to or been required to
contribute to a multiemployer pension plan or other pension plan subject to
Title IV of ERISA. No material liability under Title IV of ERISA has been
incurred by Company or any Company ERISA Affiliate that has not been satisfied
in full, and no condition exists that presents a material risk to Company of
incurring or being subject (whether primarily, jointly or secondarily) to a
material liability thereunder. None of the assets of Company is, or may
reasonably be expected to become, the subject of any lien arising under ERISA or
Section 412(n) of the Code.
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(e) Company has delivered to Parent true, complete and correct
copies of (i) all employment agreements with officers and all consulting
agreements of Company providing for annual compensation in excess of $100,000
(ii) all severance plans, agreements, programs and policies of Company with or
relating to its employees, directors or consultants, and (iii) all plans,
programs, agreements and other arrangements of Company with or relating to its
employees, directors or consultants which contain "change of control"
provisions. No payment or benefit which may be required to be made by Company or
which otherwise may be required to be made under the terms of any Company
Benefit Plan or other arrangement will constitute a parachute payment under Code
Section 280(G)(1), and the consummation of the transactions contemplated by this
Agreement will not, alone or in conjunction with any other possible event
(including termination of employment), (i) entitle any current or former
employee or other service provider of Company to severance benefits or any other
payment, compensation or benefit (including forgiveness of indebtedness), except
as expressly provided by this Agreement, or (ii) accelerate the time of payment
or vesting, or increase the amount of compensation or benefit due any such
employee or service provider.
(f) Company is not a party to, and has no obligations under or
with respect to, any collective bargaining or other labor union contract
applicable to persons employed by Company and no collective bargaining agreement
is being negotiated by Company or any person or entity that may obligate the
Company thereunder. As of the date of this Agreement, there is no labor dispute,
strike or work stoppage against Company pending or, to the Knowledge of Company,
threatened which may interfere with the business activities of Company. As of
the date of this Agreement, to the Knowledge of Company, none of Company or any
of its representatives or employees has committed any unfair labor practice in
connection with the operation of the business of Company, and there is no charge
or complaint against Company by the National Labor Relations Board or any
comparable Governmental Entity pending or threatened in writing.
(g) Except as required by Law, no Company Benefit Plan
provides any of the following retiree or post- employment benefits to any
person: medical, disability or life insurance benefits. To the Knowledge of
Company, Company and the Company ERISA Affiliates are in compliance in all
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material respects with (i) the requirements of the applicable health care
continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and the regulations (including
proposed regulations) thereunder and (ii) the applicable requirements of the
Health Insurance Portability and Accountability Act of 1996, as amended, and the
regulations (including the proposed regulations) thereunder.
SECTION 4.10 [Intentionally Omitted]
SECTION 4.11 Contracts
Except for the contracts and agreements described in Section
4.11 of the Company Disclosure Schedule (collectively, the "Listed Contracts"),
Company is not a party to any of the following:
(a) any list owners agreement, purchase agreement or bill of
sale relating to the purchase of e-mail user lists, customer marketing agreement
(or similar agreement with brokers) or agreement with non-standard payment
terms, in each case, which ranks in Company's 25 largest customer or supplier
relationships, as measured by dollar value, for each of these categories of
agreements;
(b) any continuing contract for the purchase of materials,
supplies, equipment or services involving in the case of any such contact more
than $100,000 over the life of the contract;
(c) any contract that expires more than one year after the
date of this Agreement or any contract that may be renewed at the option of any
person other than the Company so as to expire more than one year after the date
of this Agreement;
(d) any trust indenture, mortgage, promissory note, loan
agreement or other contract for the borrowing of money, any currency exchange,
commodities or other hedging arrangement or any leasing transaction of the type
required to be capitalized in accordance with U.S. GAAP in excess of $100,000;
(e) any contract for capital expenditures in excess of
$100,000 in the aggregate;
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(f) any contract limiting the freedom of Company to engage in
any line of business or to compete with any other corporation, partnership,
limited liability company, trust, individual or other entity, or any
confidentiality, secrecy or non-disclosure contract or any contract that may be
terminable as a result of Parent's status as a competitor of any party to such
contract;
(g) any contract pursuant to which Company is a lessor of any
machinery, equipment, motor vehicles, office furniture, fixtures or other
personal property, pursuant to which payments in excess of $100,000 remain
outstanding;
(h) any contract with an Affiliate;
(i) any agreement of guarantee, support, indemnification,
assumption or endorsement of, or any similar commitment with respect to, the
obligations, liabilities (whether accrued, absolute, contingent or otherwise) or
indebtedness of any other person other than customary customer agreements made
in the ordinary course of business; or
(j) any employment contract, arrangement or policy (including
without limitation any collective bargaining contract or union agreement) which
may not be immediately terminated without penalty (or any augmentation or
acceleration of benefits).
Company has performed all of the obligations required to be
performed by it and is entitled to all benefits under, and is not alleged to be
in default in respect of any Listed Contract. Each of the Listed Contracts is
valid and binding and in full force and effect, and there exists no default or
event of default or event, occurrence, condition or act, with respect to
Company, or to the Knowledge of Company, with respect to any other contracting
party, which, with the giving of notice, the lapse of the time or the happening
of any other event or conditions, would become a default or event of default
under any Listed Contract. True, correct and complete copies of all Listed
Contracts have been delivered to Parent.
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SECTION 4.12 Litigation
There is no suit, claim, action, proceeding or investigation
pending or, to the Knowledge of Company, threatened against Company that could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect or materially interfere with Company's ability to
consummate the transactions contemplated hereby, and, to the Knowledge of
Company, there are no existing facts or circumstances that could reasonably be
expected to result in such a suit, claim, action, proceeding or investigation.
Company is not aware of any facts or circumstances which could reasonably be
expected to result in the denial of insurance coverage under policies issued to
Company in respect of such suits, claims, actions, proceedings and
investigations, except in any case as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Company is
not subject to any outstanding order, writ, injunction or decree which could
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect or materially interfere with Company's ability to
consummate the transactions contemplated hereby.
SECTION 4.13 Environmental Matters
Except as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) Company
is in compliance with all applicable Environmental Laws and all Company Permits
required by Environmental Laws; (ii) all past noncompliance of Company with
Environmental Laws or Environmental Permits has been resolved without any
pending, ongoing or future obligation, cost or liability; and (iii) Company has
not released a Hazardous Material at, or transported a Hazardous Material to or
from, any real property currently or formerly owned, leased or occupied by
Company in violation of any Environmental Law.
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SECTION 4.14 Intellectual Property
(a) All patents (including, without limitation, all U.S. and
foreign patents, patent applications, patent disclosures, and all divisions,
continuations, continuations-in-part, reissues, re-examinations and extensions
thereof), design rights, trademarks, trade names and service marks (whether or
not registered), trade dress, Internet domain names, copyrights (whether or not
registered) and any renewal rights therefor, technology, supplier lists, trade
secrets, know-how, computer software programs or applications in both source and
object code form, technical documentation of such software programs, statistical
models, supplier lists, e-mail lists, inventions, sui generis database rights,
databases, data ("Technical Documentation"), registrations and applications for
any of the foregoing and all other tangible or intangible proprietary
information or materials that are or have been used (including without
limitation in the development of) Company's business and/or in any product,
technology or process (i) currently being or formerly manufactured, published,
marketed or used by Company or (ii) previously or currently under development
for possible future manufacturing, publication, marketing or other use by
Company are hereinafter referred to as the "Company Intellectual Property."
(b) Section 4.14(b) of the Company Disclosure Schedule
contains a true and complete list of Company's patents, patent applications,
registered trademarks, trademark applications, common law trademarks, trade
names, registered service marks, service mark applications, common law service
marks, material Internet domain names, Internet domain name applications,
copyright registrations and applications and other filings and formal actions
made or taken pursuant to Federal, state, local and foreign laws by Company to
protect its interests in Company Intellectual Property, and includes details of
all due dates for further filings, maintenance, payments or other actions
falling due in respect of Company Intellectual Property within twelve (12)
months of the Closing Date. All of Company's patents, patent applications,
registered trademarks, trademark applications, registered service marks and
service mark registrations, and registered copyrights remain in good standing
with all fees and filings due as of the Closing Date having been duly made and
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the due dates specified in the Company Disclosure Schedule are accurate and
complete in all material respects.
(c) Section 4.14(c) of the Company Disclosure Schedule
contains a true and complete list of the registrations that Company has obtained
anywhere in the world in relation to the processing of data. Company has made
all such registrations which it is required to have made and is in good standing
with respect to such registrations with all fees due as of the Effective Time
having been duly made. Company has received Valid Consents (as defined below)
from all persons who have provided personal information which are sufficient to
give Company (i) the right to use such personal information for the purposes of
conducting Company's current activities, and Company's future activities to the
extent such future activities are already planned, and (ii) the right to assign
the personal information and the applicable consents to Parent or its
Affiliates. For the purposes of this Section 4.14(c), "Valid Consents" shall
mean consents obtained (i) for persons aged 13 and over, using Company's double
opt-in method by which the persons providing personal information to Company
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 Company, 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 Company and (ii) for persons under the age of 13, in
accordance with the Children's Online Privacy Protection Act of 1998. Company
has not used any personal information without or beyond the scope of a Valid
Consent. Company has 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 Company.
Company has not collected and maintains no personal information about persons
outside the United States in violation of any local, state or Federal law.
(d) Company Intellectual Property consists solely of items and
rights which are: (i) owned by Company; (ii) in the public domain; or (iii)
rightfully used by Company pursuant to a valid license (the "Company Licensed
Intellectual Property"), the parties and date of each such license agreement
(each, a "License Agreement") being set forth on Section 4.14(c) of the Company
Disclosure Schedule. Company has all rights in Company Intellectual Property
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necessary to carry out Company's current activities (and had all rights
necessary to carry out its former activities at the time such activities were
being conducted), including without limitation, to the extent required to carry
out such activities, rights to make, use, reproduce, modify, adopt, create
derivative works based on, translate, distribute (directly and indirectly),
transmit, display and perform publicly, license, rent and lease and, other than
with respect to the Company Licensed Intellectual Property, assign and sell, the
Company Intellectual Property.
(e) The reproduction, manufacturing, distribution, licensing,
sublicensing, sale, use or any other exercise of rights in any Company
Intellectual Property, product, service, work, technology or process as now used
or offered or proposed for use, licensing or sale by Company does not infringe
on any copyright, trade secret, trademark, service mark, trade name, trade
dress, firm name, Internet domain name, logo, mask work or other proprietary or
personal right of any person or, to the actual knowledge of Company, the patent
of any person anywhere in the world. No claims (i) challenging the validity,
effectiveness or, other than with respect to the Company Licensed Intellectual
Property, ownership by Company of any of the Company Intellectual Property, or
(ii) to the effect that the use, distribution, licensing, sublicensing, sale or
any other exercise of rights in any product, service, work, technology or
process as now used or offered or proposed for use, licensing, sublicensing, use
or sale by Company infringes or will infringe on any intellectual property or
other proprietary or personal right of any person have been asserted or, to the
Knowledge of Company, are threatened by any person, nor are there, to the
Knowledge of Company, any valid grounds for any bona fide claim of any such
kind. All registered, granted or issued patents, trademarks, Internet domain
names and copyrights held by Company are subsisting and, to the Knowledge of
Company, enforceable. To the Knowledge of Company, there is no unauthorized use,
infringement or misappropriation of any of the Company Intellectual Property by
any third party, employee or former employee.
(f) All personnel, including employees, agents, consultants
and contractors, who have contributed to or participated in the conception and
development of the Company Intellectual Property on behalf of Company, have
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executed nondisclosure agreements in the form set forth in Section 4.14(f) of
the Company Disclosure Schedule and either (i) have been a party to a
"work-for-hire" arrangement or agreements with Company in accordance with
applicable Federal and state law that has accorded Company 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
Company as assignee that have conveyed to Company effective and exclusive
ownership of all tangible and intangible property thereby arising.
(g) Company is not, nor as a result of the execution or
delivery of this Agreement, or performance of Company's obligations hereunder,
will Company be, in violation of any license, sublicense, agreement or
instrument relating to Company Intellectual Property to which Company is a party
or otherwise bound, nor will execution or delivery of this Agreement, or
performance of Company's obligations hereunder, cause the diminution,
termination or forfeiture of any Company Intellectual Property.
(h) Section 4.14(h) of the Company Disclosure Schedule
contains a true and complete list of all of Company's software programs (the
"Company Software Programs"). Except with respect to software or technology
licensed by Company (to which Company holds appropriate and valid licenses),
Company owns full and unencumbered right and good, valid and marketable title to
such Company Software Programs free and clear of all mortgages, pledges, liens,
security interests, conditional sales agreements, encumbrances or charges of any
kind.
(i) The source code and system documentation relating to the
Company Software Programs (i) have at all times been maintained in strict
confidence, (ii) have been disclosed by Company only to employees who have a
"need to know" the contents thereof in connection with the performance of their
duties to Company and who have executed the nondisclosure agreements referred to
in Section 4.14(f), and (iii) have not been disclosed to any third party, except
those third parties set forth in Section 4.14(i) of the Company Disclosure
Schedule who have executed nondisclosure agreements with Company.
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(j) Company has taken all reasonable steps, in accordance with
normal industry practice, to preserve and maintain complete notes and records
relating to Company Intellectual Property necessary or appropriate to cause the
same to be readily understood, identified and available.
(k) The Company Software Programs (i) have been designed to
ensure year 2000 compatibility, which includes, but is not limited to, date data
century recognition, and calculations that accommodate same century and
multi-century formulas and date values; (ii) operate and will operate in
accordance with their specifications prior to, during and after the calendar
year 2000 AD; and (iii) shall not end abnormally or provide invalid or incorrect
results as a result of date data, specifically including date data which
represents or references different centuries or more than one century.
(l) The Company Intellectual Property is free and clear of any
and all mortgages, pledges, liens, security interests, conditional sale
agreements, charges or encumbrances of any kind.
(m) Company does not owe any royalties or other payments to
third parties in respect of Company Intellectual Property. All royalties or
other payments set forth in Section 4.14(m) of the Company Disclosure Schedule
that have accrued or will accrue prior to the Effective Time have been or will
be paid.
(n) Company uses commercially reasonable efforts to regularly
scan the Company Software Programs and, to, the extent applicable, the other
Company Intellectual Property, with "best-in-class" virus detection software. To
the Knowledge of Company, the Company Software Programs and other Company
Intellectual Property 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. To the Knowledge
of Company, 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.
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(o) Company has implemented all reasonable steps which are
known in the information systems industry in the physical and electronic
protection of its information assets from unauthorized disclosure, use or
modification. Section 4.14(o) of the Company Disclosure Schedule sets forth (i)
each breach of security of which Company is aware, (ii) its known or anticipated
consequences, and (iii) the steps Company has taken to remedy such breach.
SECTION 4.15 Taxes
(a) Company and any consolidated, combined, unitary or
aggregate group for Tax purposes of which Company is or has been a member, have
properly completed and timely filed all Tax Returns required to be filed by them
and have paid all Taxes due with respect to the taxable periods covered by such
Tax Returns and all other material Taxes. Such Tax Returns are complete and
correct. Company has provided adequate accruals in accordance with U.S. GAAP in
its latest financial statements included in the Company Reports for any Taxes
payable by Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements, whether or not shown as
being due on any Tax Returns. Other than Taxes incurred in the ordinary course
of business, Company has no material liability for unpaid Taxes accruing after
the date of the Company's latest financial statements included in the Company
Reports.
(b) There is (i) no material claim for Taxes that is a lien
against the property of Company or is being asserted against Company other than
liens for Taxes not yet due and payable, (ii) no audit of any Tax Return of
Company being conducted by a Tax Authority, (iii) no extension of the statute of
limitations on the assessment of any Taxes that has been granted to Company and
is currently in effect, (iv) no deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing by
Company and (v) no agreement, contract or arrangement to which Company is a
party that may result in the payment of any amount that would not be deductible
by reason of Section 280G or Section 404 of the Code.
(c) There has been no change in ownership of Company that has
caused the utilization of any losses of Company to be limited pursuant to
Section 382 of the Code, and any loss carryovers reflected on the latest
financial statements included in the Company Reports are properly computed and
reflected.
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(d) Company has not been and will not be required by reason of
the Merger to include any material adjustment in Taxable income for any Tax
period (or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Merger.
(e) Company has not filed and will not file any consent to
have the provisions of paragraph 341(f)(2) of the Code (or comparable provisions
of any state Tax laws) apply to Company.
(f) Company is not a party to any Tax sharing or Tax
allocation agreement nor does Company have any liability or potential liability
to another party under any such agreement.
(g) Company has not filed any disclosures under Section 6662
or comparable provisions of state, local or foreign law to prevent the
imposition of penalties with respect to any Tax reporting position taken on any
Tax Return.
(h) Company has not ever been a member of a consolidated,
combined or unitary group of which Company was not the ultimate parent
corporation.
(i) Company has in its possession receipts for any Taxes paid
to foreign Tax authorities. Company has not ever been a "personal holding
company" within the meaning of Section 542 of the Code or a "United States real
property holding corporation" within the meaning of Section 897 of the Code.
(j) Neither Company nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation"
(within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (i) in the
two years prior to the date of this Agreement or (ii) in a distribution which
could otherwise constitute part of a "plan" or "series of related transactions"
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(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
(k) Company and its subsidiaries have complied with all
applicable statutes, laws, ordinances, rules and regulations relating to the
payment and withholding of taxes and have, within the time and the manner
prescribed by law, withheld from and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over under
applicable laws.
SECTION 4.16 Insurance
Company is presently insured, and since its inception has been
insured, against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured. The policies of
fire, theft, liability and other insurance maintained with respect to the assets
or businesses of Company, in Company's reasonable estimation, provide adequate
coverage against loss. Company has heretofore furnished to Parent a complete and
correct list as of the date hereof of all insurance policies maintained by
Company, and has made available to Parent complete and correct copies of all
such policies, together with all riders and amendments thereto. All such
policies are in full force and effect and all premiums due thereon have been
paid to the date hereof. Company has complied in all material respects with the
terms of such policies.
SECTION 4.17 Properties
Company has good and marketable title, free and clear of all
material mortgages, liens, pledges, charges or other encumbrances to all its
material tangible properties and assets, whether tangible or intangible, real,
personal or mixed, reflected in the Company's financial statements contained in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, as being owned by Company as of the date thereof, other than (i) any
properties or assets that have been sold or otherwise disposed of in the
ordinary course of business since the date of such financial statements, (ii)
liens disclosed in the notes to such financial statements, and (iii) liens
arising in the ordinary course of business after the date of such financial
statements. All buildings, and all fixtures, equipment and other property and
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assets that are material to its business on a consolidated basis, held under
leases or sub-leases by Company are held under valid instruments enforceable in
accordance with their respective terms, subject to applicable laws of
bankruptcy, insolvency or similar laws relating to creditors' rights generally
and to general principles of equity (whether applied in a proceeding in law or
equity). Substantially all of Company's equipment in regular use which is
material to the operation of Company has been reasonably maintained and is in
serviceable condition, reasonable wear and tear excepted.
SECTION 4.18 [Intentionally Omitted]
SECTION 4.19 Opinion of Financial Advisor
BancBoston Robertson Stephens Inc. ("Robertson Stephens") has
delivered to the Board of Directors of Company its written opinion to the effect
that, as of the date hereof, the Merger Consideration is fair to the holders of
shares of Company Common Stock from a financial point of view.
SECTION 4.20 Brokers
No broker, finder or investment banker (other than Robertson
Stephens and Friedman, Billings, Ramsey & Co., Inc., the fees and expenses of
each of which will be paid by Company) is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger based upon arrangements
made by or on behalf of Company. Company has heretofore made available to Parent
true, complete and correct copies of all agreements between Company and
Robertson Stephens pursuant to which such firm would be entitled to any payment
relating to the Merger.
SECTION 4.21 Certain Business Practices
Neither Company nor any directors, officers, agents or
employees of Company (in their capacities as such) has (i) used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
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SECTION 4.22 Section 912 of New York Law Not Applicable
The Board of Directors of Company, at a meeting duly called
and held, duly adopted resolutions (i) unanimously approving the Merger, this
Agreement and the Shareholders' Agreement, (ii) determining that the terms of
the Merger are fair to, and in the best interests of, Company and its
shareholders, (iii) recommending that Company's shareholders adopt this
Agreement and (iv) adopting this Agreement. Such resolutions and approval
constitutes approval of the Merger, this Agreement and the Shareholders'
Agreement and the transactions contemplated by this Agreement and the
Shareholders' Agreement by the Board of Directors of Company under Section 912
of New York Law and represents all the action necessary to ensure that the
restrictions contained in such Section 912 do not apply to any of Parent, Lux
Sub or Merger Sub in connection with the Merger, this Agreement and the
Shareholders' Agreement and the transactions contemplated by this Agreement and
the Shareholders' Agreement. To the Knowledge of Company, no other state
takeover statute or similar statute or regulation applies or purports to apply
to the Merger, this Agreement, the Shareholders' Agreement or the transactions
contemplated by this Agreement and the Shareholders' Agreement.
SECTION 4.23 Business Activity Restriction
There is no non-competition or other similar agreement,
commitment, judgment, injunction, order or decree to which Company 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 Company in any material
respect. Company has not entered into any agreement under which Company is
restricted in any material respect from selling, licensing or otherwise
distributing any of its 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.
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SECTION 4.24 Privacy
Company is, and has always been, in compliance with its
then-current privacy policy, including those posted on Company's Web site(s).
Company has conducted its business and maintained 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 Federal, state and other laws, including, but not limited to,
those relating to the use of information collected from or about consumers.
Company is, and has always been, in compliance with its customers' privacy
policies, when required to do so by contract.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent and Lux Sub hereby represent and warrant to Company
that:
SECTION 5.01 Organization and Qualification; Subsidiaries
Parent, Lux Sub and Merger Sub have each been duly organized
and each is validly existing and in good standing (to the extent applicable)
under the laws of the jurisdiction of its incorporation or organization, as the
case may be, and has the requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each of Parent, Lux Sub and
Merger Sub is duly qualified or licensed to do business, and is in good standing
(to the extent applicable), in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its business makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed and in good standing that could not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect. The
name of Merger Sub under which it was formed was Nickel Acquisition Corp.
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SECTION 5.02 Authority Relative to this Agreement
Each of Parent, Lux Sub and Merger Sub has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by each of Parent, Lux Sub
and Merger Sub and the consummation by Parent, Lux Sub and Merger Sub of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Parent, Lux Sub or Merger Sub are necessary to authorize this Agreement or to
consummate such transactions (other than the consent of Lux Sub as sole
shareholder of Merger Sub and the filing and recordation of the Certificate of
Merger as required by New York Law). This Agreement has been duly executed and
delivered by each of Parent, Lux Sub and Merger Sub and, assuming the due
authorization, execution and delivery by Company, constitutes a legal, valid and
binding obligation of each of Parent, Lux Sub and Merger Sub enforceable against
Parent and Merger Sub in accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization or other similar
law affecting the enforceability of creditors' rights generally and to the
effect of general principles of equity which may limit the availability of
remedies (whether in a proceeding at law or in equity).
SECTION 5.03 No Conflict; Required Filings and Consents
(a) The execution and delivery of this Agreement by Parent,
Lux Sub and Merger Sub does not, and the performance by Parent and Merger Sub of
their obligations hereunder and the consummation of the Merger will not, (i)
conflict with or violate any provision of the certificate of incorporation or
bylaws (or any equivalent organizational document) of Parent, Lux Sub or Merger
Sub, (ii) assuming that all consents, approvals, authorizations and permits
described in Section 5.05(b) have been obtained and all filings and
notifications described in Section 5.05(b) have been made, conflict with or
violate any Law applicable to Parent, Lux Sub or Merger Sub or by which any
property or asset of Parent, Lux Sub or Merger Sub is bound or affected or (iii)
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result in any material breach of or constitute a material default (or an event
which with the giving of notice or lapse of time or both could reasonably be
expected to become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any material property or asset of Parent, Lux Sub or
Merger Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by Parent,
Lux Sub and Merger Sub does not, and the performance by Parent, Lux Sub and
Merger Sub of their respective obligations hereunder and the consummation of the
Merger will not, require any consent, approval, authorization or permit of, or
filing by Parent, Lux Sub or Merger Sub with or notification by Parent, Lux Sub
or Merger Sub to, any Governmental Entity, except pursuant to the premerger
notification requirements of the HSR Act, if any, and the filing and recordation
of the Certificate of Merger as required by New York Law.
SECTION 5.04 Financing
At the Effective Time, Lux Sub will have available sufficient cash in
immediately available funds necessary for the acquisition of all shares of
Company Common Stock pursuant to the Merger.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business by Company Pending the
Closing
Company agrees that, between the date of this Agreement and
the Effective Time, except as contemplated by this Agreement, unless Parent
shall otherwise agree in writing, (x) the business of Company shall be conducted
only in, and Company shall not take any action except in, the ordinary course of
business consistent with past practice and (y) Company shall use its best
efforts to keep available the services of such of the current officers,
significant employees and consultants of Company and to preserve the current
relationships of Company with such of the corporate partners, customers,
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suppliers and other persons with which Company has significant business
relations in order to preserve substantially intact its business organization.
By way of amplification and not limitation, Company shall not, between the date
of this Agreement and the Effective Time, except as contemplated by this
Agreement, directly or indirectly, do, or agree to do, any of the following
without the prior written consent of Parent:
(a) amend or otherwise change its certificate of incorporation
or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee or encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license or encumbrance of, (i) any shares
of capital stock of Company of any class, or securities convertible into or
exchangeable or exercisable for any shares of such capital stock, or any
options, warrants or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without limitation,
any phantom interest), of Company, other than the issuance of shares of Company
Common Stock pursuant to the exercise of stock options therefor outstanding as
of the date of this Agreement or pursuant to the Company Stock Purchase Plan or
(ii) any material property or assets of Company except sales of inventory in the
ordinary course of business consistent with past practice and the providing of
opt-in e-mail addresses to direct marketers and brokers by Company in the
ordinary course of business;
(c) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or person or any division
thereof; (ii) incur any indebtedness for borrowed money (other than in de
minimis amounts) or issue any debt securities or assume, guarantee or endorse,
or otherwise as an accommodation become responsible for, the obligations of any
person for borrowed money or make any loans or advances material to the
business, assets, liabilities, financial condition or results of operations of
Company; (iii) terminate, cancel or request any material change in, or agree to
any material change in, any Company Listed Contract or License Agreement; (iv)
make or authorize any capital expenditure, other than capital expenditures in
the ordinary course of business consistent with past practice that have been
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described in the Company Disclosure Schedule and that are not, in the aggregate,
in excess of $250,000 for Company; or (v) enter into or amend any contract,
agreement, commitment or arrangement that, if fully performed, would not be
permitted under this Section 6.01(c);
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
(e) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock except
repurchases of unvested shares at cost in connection with the termination of the
employment relationship with any employee pursuant to stock option or purchase
agreements in effect on the date hereof;
(f) amend or change the period (or permit any acceleration,
amendment or change) of exercisability of options granted under the Company
Stock Plan or authorize cash payments in exchange for any Company Stock Options
granted under the Company Stock Plan;
(g) amend the terms of, repurchase, redeem or otherwise
acquire any of its securities or propose to do any of the foregoing;
(h) increase the compensation payable or to become payable to
its directors, officers, consultants or employees, grant any rights to severance
or termination pay to, or enter into any employment or severance agreement which
provides benefits upon a change in control of Company that would be triggered by
the Merger with, any director, officer, consultant or other employee of Company
who is not currently entitled to such benefits from the Merger, establish,
adopt, enter into or amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer, consultant or employee of Company, except to the extent required by
applicable Law or the terms of a collective bargaining agreement, or enter into
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or amend any contract, agreement, commitment or arrangement between Company and
any of Company's directors, officers, consultants or employees;
(i) 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
course of business and consistent with past practice of liabilities reflected or
reserved against on the balance sheet of Company dated as of June 30, 2000
included in Company's quarterly report on Form 10-Q for the period then ended;
(j) except as required by any Governmental Entity, make any
change with respect to Company's accounting policies, principles, methods or
procedures, including, without limitation, revenue recognition policies, other
than as required by U.S. GAAP;
(k) make any Tax election or settle or compromise any Tax
liability; or
(l) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing or to take any
action which would make any of the representations or warranties of Company
contained in this Agreement untrue or incorrect or prevent Company from
performing or cause Company not to perform its covenants hereunder in any
maternal respect or result in any of the conditions to the Merger set forth
herein not being satisfied or prevent Company from performing or cause Company
not to perform its covenants hereunder.
SECTION 6.02 Notices of Certain Events
(a) Each of Parent and Company shall give prompt notice to the
other of (i) any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with the Merger; (ii)
any notice or other communication from any Governmental Entity in connection
with the Merger; and (iii) any change that could reasonably be expected to delay
or impede the ability of either Parent or Lux Sub, on the one hand, or Company,
on the other, to perform their respective obligations pursuant to this Agreement
and to effect the consummation of the Merger.
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(b) In addition, Company shall give Parent prompt notice of
(i) any actions, suits, claims, investigations or proceedings commenced or, to
the Knowledge of Company, threatened against, relating to or involving or
otherwise affecting Company, or that relate to the consummation of the Merger;
(ii) the occurrence of a default or event that, with the giving of notice or
lapse of time or both, will become a default under any Listed Contract; and
(iii) any change that could reasonably be expected to have a Company Material
Adverse Effect.
(c) In addition, Parent shall give Company prompt notice of
any actions, suits, claims, investigations or proceedings commenced or, to the
Knowledge of Parent, threatened, in each case that relate to the consummation of
the Merger.
SECTION 6.03 Access to Information; Confidentiality
(a) From the date of this Agreement to the Effective Time,
Company shall (i) provide to Parent (and its officers, directors, employees,
accountants, financial advisors, consultants, legal counsel, agents and other
representatives (collectively, "Representatives")) access at reasonable times
upon prior notice to Company's officers, employees, agents, properties, offices
and other facilities and to the books and records thereof, and (ii) furnish
promptly such information concerning its business, properties, contracts,
assets, liabilities and personnel as Parent or its Representatives may
reasonably request. No investigation conducted pursuant to this Section 6.03
shall affect or be deemed to modify any representation or warranty made in this
Agreement.
(b) Parent shall comply with, and shall cause its
Representatives to comply with, all of its obligations under the Confidentiality
Agreement with respect to any nonpublic information disclosed pursuant to this
Section 6.03 or otherwise.
SECTION 6.04 No Solicitation of Transactions
(a) Until this Agreement has been terminated as provided
herein, Company shall not, directly or indirectly, and shall cause its
Representatives not to, directly or indirectly, solicit, initiate or knowingly
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encourage (including by way of furnishing nonpublic information), any inquiries
or the making of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders) that constitutes, or may reasonably be
expected to lead to, any Competing Transaction, or enter into or maintain or
continue discussions or negotiate with any person in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of Company's Representatives
or subsidiaries, or any Representative retained by Company's subsidiaries, to
take any such action; provided, however, that nothing contained in this
Agreement, including this Section 6.04, shall prohibit Company or the Board of
Directors of Company (i) from complying with Rule 14d-9 or 14e-2(a) promulgated
under the Exchange Act with regard to a tender or exchange offer not made in
violation of this Section 6.04, (ii) referring any third party to this Section
6.04 or making a copy of this Section 6.04 available to any third party solely
in response to an unsolicited inquiry; (iii) prior to receipt of the Company
Shareholder Approval, from providing information (subject to a confidentiality
agreement at least as restrictive as the Confidentiality Agreement) in
connection with, and negotiating, another unsolicited, bona fide proposal
regarding a Competing Transaction that (i) Company's Board of Directors shall
have concluded in good faith, based upon the advice of independent outside
counsel of nationally recognized reputation (who may be the Company's regularly
engaged independent legal counsel), that such action is necessary to prevent
Company's Board of Directors from violating its fiduciary duties to the Company
or its shareholders under applicable law, (ii) with respect to which Company's
Board of Directors shall have determined, based upon the advice of Company's
independent financial advisors of nationally recognized reputation (who may be
the Company's regularly engaged independent financial advisors), in the proper
exercise of its fiduciary duties to the Company and its shareholders that the
acquiring party is reasonably capable of consummating such Competing Transaction
on the terms proposed, and (iii) Company's Board of Directors reasonably
believes in good faith, based on the advice of the Company's independent
financial advisors of nationally recognized reputation (who may be the Company's
regularly engaged independent financial advisors), that such Competing
Transaction is more favorable to the shareholders of Company from a financial
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point of view than the Merger and that such Competing Transaction is more
favorable to the shareholders of Company than the Merger taking into account all
the respective terms and conditions of the Competing Transaction and the Merger
(any such Competing Transaction being referred to herein as a "Superior
Proposal"). Any violation of the restrictions set forth in this Section 6.04 by
any Representative of Company, whether or not such person is purporting to act
on behalf of Company or otherwise, shall be deemed to be a breach of this
Section 6.04 by Company. Company shall notify Parent promptly if any proposal or
offer, or any inquiry or contact with any person with respect thereto, regarding
a Competing Transaction is made, such notice to include the identity of the
person making such proposal, offer, inquiry or contact, and the terms of such
Competing Transaction, and shall keep Parent apprised, as promptly as reasonably
practicable, of any modifications to the terms thereof. Company shall not submit
any Competing Transaction to the vote of its shareholders. Prior to accepting a
Superior Proposal, Company shall provide Parent with 24 hours' written notice of
such intention. Notwithstanding the foregoing, nothing contained in this Section
6.04 shall prevent the Board of Directors of Company from withdrawing or
modifying its recommendation of this Agreement, provided that the Company has
complied with this Section 6.04, following the receipt of a proposal that
constitutes, or may reasonably be expected to lead to, a Superior Proposal if
the Board of Directors of the Company, after consultation with independent
outside counsel of nationally recognized reputation (who may be the Company's
regularly engaged independent legal counsel) determines in good faith that such
action is necessary for the directors of Company to comply with their fiduciary
duties to the Company or its shareholders under applicable law.
(b) Company immediately shall cease and cause to be terminated
all existing discussions or negotiations with any parties conducted heretofore
with respect to a Competing Transaction. Company shall not release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which it is a party.
SECTION 6.05 [Intentionally Omitted]
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SECTION 6.06 Control of Operations
Nothing contained in this Agreement shall give Parent or Lux
Sub, directly or indirectly, the right to control or direct the operations of
Company prior to the Effective Time. Prior to the Effective Time, Company shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision over its operations.
SECTION 6.07 Further Action; Consents; Filings
(a) Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use all reasonable efforts to (i) take, or cause to
be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the Merger, (ii) obtain from Governmental Entities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by Parent, Lux Sub or Company in connection with
the authorization, execution and delivery of this Agreement and the consummation
of the Merger and (iii) make all necessary filings, and thereafter make any
other required or appropriate submissions, with respect to this Agreement and
the Merger required under (A) the rules and regulations of the NNM, (B) the
Exchange Act and any other applicable Federal or state securities laws, (C) the
HSR Act, if any, and (D) any other applicable Law. The parties hereto shall
cooperate and consult with each other in connection with the making of all such
filings, including by providing copies of all such documents to the nonfiling
parties and their advisors prior to filing, and none of the parties shall file
any such document if any of the other parties shall have reasonably objected to
the filing of such document. No party shall consent to any voluntary extension
of any statutory deadline or waiting period or to any voluntary delay of the
consummation of the Merger at the behest of any Governmental Entity without the
consent and agreement of the other parties hereto, which consent shall not be
unreasonably withheld or delayed.
(b) Each of Company, Parent and Lux Sub will give any notices
to third persons, and use, and cause their respective subsidiaries to use,
reasonable efforts to obtain any consents from third persons necessary, proper
or advisable (as determined in good faith by Parent with respect to such notices
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or consents to be delivered or obtained by Company) to consummate the
transactions contemplated by this Agreement.
SECTION 6.08 Additional Reports
Company shall each furnish to Parent copies of any reports of
the type referred to in Section 4.07, which it files with the SEC on or after
the date hereof, and Company covenants and warrants that as of the respective
dates thereof, such reports will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Any unaudited consolidated interim financial
statements included in such reports (including any related notes and schedules)
will fairly present in all material respects the financial position of Company
and its consolidated subsidiaries as of the dates thereof and the results of
operations and changes in financial position or other information included
therein for the periods or as of the date then ended (subject, where
appropriate, to normal year-end adjustments), in each case in accordance with
past practice and U.S. GAAP consistently applied during the periods involved
(except as otherwise disclosed in the notes thereto).
SECTION 6.09 Tax Information
Company shall provide the following information to Parent not
later than two weeks after the date of this Agreement: (i) a complete list of
the types of Tax Returns being filed by Company in each taxing jurisdiction,
(ii) a list of all closed years with respect to each such type of Tax Return
filed in each jurisdiction, (iii) a list of any deferred intercompany gain with
respect to transactions to which Company has been a party and (iv) a list of the
acquisition date, original cost, accumulated depreciation, adjusted tax basis
and methods of depreciation for all depreciable and amortizable assets of the
Company. Company shall provide Parent and its accountants, counsel and other
Representatives reasonable access, during normal business hours during the
period prior to the Effective Time, to all of Company's Tax Returns and other
records and workpapers relating to Taxes.
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ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Proxy Statement
(a) As promptly as practicable after the execution of this
Agreement, Parent and Company shall jointly prepare and Company shall file with
the SEC a proxy statement with respect to the Merger relating to the special
meeting of Company's shareholders to be held to consider approval and adoption
of this Agreement and the Merger (the "Company Shareholders' Meeting") (together
with any amendments thereto, the "Proxy Statement"). No filing of, or amendment
or supplement to, the Proxy Statement will be made by Company without providing
Parent with the opportunity to review and comment thereon. Company shall use its
best efforts to respond as promptly as practicable to any comments of the SEC
with respect to the Proxy Statement. Copies of the Proxy Statement shall be
provided to the NNM in accordance with its rules. Parent, Lux Sub or Company, as
the case may be, shall furnish all information concerning Parent, Lux Sub or
Company as any other party may reasonably request in connection with the
preparation of the Proxy Statement. Company shall notify Parent promptly of the
receipt of any comments from the SEC on the Proxy Statement and of any requests
by the SEC for any amendments or supplements thereto or for additional
information and shall promptly provide Parent copies of all correspondence
between Company or any of its representatives or advisors and the SEC with
respect to the Proxy Statement. Company shall use its best efforts to cause the
Proxy Statement to be mailed to Company's shareholders as promptly as
practicable after filing thereof with the SEC. Each of the parties hereto shall
cause the Proxy Statement to comply as to form and substance as to matters
relating to, and supplied for inclusion therein by, such party in all material
respects with the applicable requirements of (i) the Exchange Act and (ii) the
rules and regulations of the NNM.
(b) The Proxy Statement shall include (i) information with
respect to Company and its shareholders, the approval and adoption of the Merger
and the recommendation of the Board of Directors of Company to Company's
shareholders that they vote in favor of approval of this Agreement and the
Merger, subject to the right of the Board of Directors of Company to withdraw
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its recommendation in compliance with Section 6.04 of this Agreement, and (ii)
the opinion of Robertson Stephens referred to in Section 4.19.
(c) None of the information supplied by Company for inclusion
or incorporation by reference in the Proxy Statement will, at the time it is
filed with the SEC or any other regulatory agency, at the date it is or any
amendments or supplements thereto are mailed to shareholders of Company or at
the time of the Company Shareholders' 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. If at any time prior to
receipt of the Company Shareholder Approval, any event or circumstance relating
to Company, or its officers, directors or shareholders, should occur or be
discovered by Company that should be set forth in an amendment or a supplement
to the Proxy Statement, Company shall promptly prepare and mail to its
shareholders such an amendment or supplement. Company shall not mail any Proxy
Statement, or any amendment or supplement thereto, to which Parent reasonably
objects. All documents that Company is responsible for filing with the SEC in
connection with the Merger will comply as to form in all material respects with
the applicable requirements of the rules and regulations of the Exchange Act.
(d) None of the information supplied by Parent or Lux Sub for
inclusion in the Proxy Statement will, at the time it is filed with the SEC or
any other regulatory agency, at the date it is or any amendments or supplements
thereto are mailed to shareholders of Company or at the time of Company
Shareholders' 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. If, at any time prior to receipt of the Company
Shareholder Approval, any event or circumstance relating to Parent, Lux Sub or
Merger Sub, or their respective officers or directors, should occur or be
discovered by Parent or Lux Sub that should be set forth in an amendment or a
supplement to the Proxy Statement, Parent or Lux Sub, as the case may be, shall
promptly inform Company.
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SECTION 7.02 Company Shareholders' Meeting
Subject to the provisions of Section 9.01 herein, Company
shall call and hold the Company Shareholders' Meeting as promptly as practicable
after the date hereof for the purpose of voting upon the approval of this
Agreement and the Merger pursuant to the Proxy Statement, and Company shall use
all reasonable efforts to hold the Company Shareholders' Meeting as soon as
practicable after the date on which the Proxy Statement is mailed to Company's
shareholders. Unless Company's Board of Directors has withdrawn its
recommendation of this Agreement and the Merger in compliance with Section 6.04,
Company shall use all reasonable efforts to solicit from its shareholders
proxies in favor of the approval and adoption of this Agreement and the Merger
pursuant to the Proxy Statement and shall take all other action necessary or
advisable to secure the Company Shareholder Approval. Company shall take all
other action necessary or, in the reasonable opinion of Parent, advisable to
promptly and expeditiously secure any vote or consent of shareholders required
by applicable Law and Company's certificate of incorporation and bylaws to
effect the Merger. Subject to the right of Company to terminate this Agreement
set forth in Section 9.01 hereof, Company shall call and hold the Company
Shareholders' Meeting for the purpose of voting upon the approval and adoption
of this Agreement and the Merger whether or not Company's Board of Directors at
any time subsequent to the date hereof determines that this Agreement is no
longer advisable or recommends that Company's shareholders reject it.
SECTION 7.03 Directors' and Officers' Indemnification and
Insurance
(a) Parent, Lux Sub and Merger Sub agree that all rights to
indemnification, advancement of expenses, exculpation, limitation of liability
and any and all similar rights now existing in favor of each present and former
director, officer, employee and agent of Company (collectively, the "Indemnified
Parties") as provided in Company's present certificate of incorporation, by-laws
or contractual arrangement in effect on the date hereof, shall survive the
Merger and shall continue in full force and effect for a period of six years
from the Effective Time, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
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manner that would affect adversely the rights thereunder of individuals who at
any time prior to the Effective Time were directors, officers, employees or
agents of the Company, unless such modification shall be required by Law, and
Parent and Lux Sub agree to cause the Surviving Corporation to comply with its
obligations thereunder and hereby guarantee the indemnification obligations
referred to in this Section 7.03.
(b) In the event the Company or the Surviving Corporation or
any of their respective 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 a material amount of
its properties and assets to any person in a single transaction or a series of
transactions, then, and in each such case, Parent will either guaranty the
indemnification obligations referred to in this Section 7.03 or will make or
cause to be made proper provision so that the successors and assigns of the
Company or the Surviving Corporation, as the case may be, assume the
indemnification obligations described herein for the benefit of the Indemnified
Parties and have substantially equal financial ability as the Company
(immediately prior to the Effective Time) to satisfy the obligations of the
parties pursuant to this Section 7.03 as a condition to such merger,
consolidation or transfer becoming effective.
(c) The provisions of this Section 7.03 are (i) intended to be
for the benefit of, and will be enforceable by, each of the Indemnified Parties
and (ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract or
otherwise.
(d) For a period of three years after the Effective Time,
Parent and Lux Sub shall use their respective best efforts to maintain in effect
the directors' and officers' liability insurance policies maintained by Company;
provided, however, that in no event shall Parent or Lux Sub be required to
expend in any one year in excess of 150% of the annual premium currently paid by
Company for such coverage and provided further, that if the premium for such
coverage exceeds such amount, Parent or Lux Sub shall purchase a policy with the
greatest coverage available for such 150% of the annual premium.
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SECTION 7.04 Public Announcements
The initial press release concerning the Merger shall be a
joint press release and, thereafter, Parent and Company shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement or the Merger and shall not issue any such press
release or make any such public statement without the prior written approval of
the other, except to the extent required by applicable Law or the requirements
of the rules and regulations of the NNM, in which case the issuing party shall
use all reasonable efforts to consult with the other party before issuing any
such release or making any such public statement.
SECTION 7.05 Employee Benefit Matters
(a) For all purposes (including, without limitation,
eligibility, vesting, and benefit accrual) under the employee benefit plans of
Parent and its subsidiaries or Affiliates providing benefits to former Company
employees after the Effective Time, each such employee shall be credited with
his or her years of service with Company before the Effective Time, to the same
extent as such employee was entitled, before the Effective Time, to credit for
such service under any similar Company Benefit Plan, except for purposes of
benefit accrual under defined benefit pension plans, if any. Following the
Effective Time, Parent shall, or shall cause its subsidiaries or Affiliates to,
waive any pre-existing condition limitation under any welfare benefit plan
maintained by Parent or any of its subsidiaries or Affiliates in which such
employees and their eligible dependents participate (except to the extent that
such pre-existing condition limitation would have been applicable under the
comparable Company welfare benefit plans immediately prior to the Effective
Time).
(b) Parent and Lux Sub shall consider in their sole discretion
instituting a Company profit sharing plan, annual bonus plan or other incentive
program for Company employees.
SECTION 7.06 Shareholder Agreement Legend
As soon as practicable after the date of this Agreement,
Company shall inscribe upon any certificate representing Shares (as such term is
defined in the Shareholders' Agreement) the following legend: "THE SHARES OF
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COMMON STOCK, PAR VALUE $.01 PER SHARE, OF NETCREATIONS, INC. REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS' AGREEMENT AND AN IRREVOCABLE
PROXY CREATED THEREBY DATED AS OF DECEMBER 22, 2000, AND THE TRANSFER AND VOTING
THEREOF ARE SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES OF NETCREATIONS, INC. FROM THE
SECRETARY OF NETCREATIONS, INC."; and Company will return such each such
certificate containing such inscription to the shareholders of Company who are
parties to the Shareholders' Agreement within three Business Days following
Company's receipt thereof.
SECTION 7.07 Guaranty of Performance
Parent shall take all necessary steps to ensure that Lux Sub
and Merger Sub take any and all actions required to be taken by them pursuant to
this Agreement.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each Party to
Consummate the Merger
The respective obligations of the parties hereto to consummate
the Merger are subject to the satisfaction or, if permitted by applicable Law,
waiver of the following conditions by joint action of the parties hereto:
(a) this Agreement and the Merger shall have been
duly approved by the requisite vote of shareholders of Company
in accordance with New York Law;
(b) no court of competent jurisdiction shall have
issued or entered any order, writ, injunction or decree, and
no other Governmental Entity shall have issued any order,
which is then in effect and has the effect of making the
Merger illegal or otherwise prohibiting its consummation;
(c) any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act
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or any other applicable competition, merger control or similar
Law shall have expired or been terminated; and
(d) all consents, approvals and authorizations
legally required to be obtained to consummate the Merger shall
have been obtained from all Governmental Entities, except
where the failure to obtain any such consent, approval or
authorization could not reasonably be expected to result in a
Parent Material Adverse Effect or a Company Material Adverse
Effect.
SECTION 8.02 Conditions to the Obligations of Company
The obligation of Company to consummate the Merger is subject
to the satisfaction or, if permitted by applicable Law, waiver of the following
further conditions:
(a) each of the representations and warranties of
Parent and Lux Sub contained in this Agreement shall be true,
complete and correct both (i) when made and (ii) on and as of
the Effective Time as if made at and as of the Effective Time
(except for representations and warranties which address
matters only as of a certain date which shall have been true,
complete and correct as of such certain date), except in the
case of each of clauses (i) and (ii) for such failures to be
true, complete and correct (without giving effect to any
qualification or standard relating to materiality or a Parent
Material Adverse Effect contained in any such representations
and warranties) which, individually or in the aggregate, would
not have a Parent Material Adverse Effect, and Company shall
have received a certificate of the Chief Executive Officer and
Chief Financial Officer of each of Parent and Lux Sub to such
effect; and
(b) Each of Parent and Lux Sub shall have performed
or complied in all material respects with all covenants
required by this Agreement to be performed or complied with by
it an or prior to the Effective Time and Company shall have
received a certificate of the Chief Executive Officer and
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Chief Financial Officer of Parent and Lux Sub to that effect.
SECTION 8.03 Conditions to the Obligations of Parent and Lux
Sub
The respective obligations of Parent and Lux Sub to
consummate the Merger is subject to the satisfaction or waiver of the following
further conditions:
(a) each of the representations and warranties of
Company contained in this Agreement shall be true, complete
and correct both (i) when made and (ii) on and as of the
Effective Time as if made at and as of the Effective Time
(except for representations and warranties which address
matters only as of a certain date which shall have been true,
complete and correct as of such certain date), except in the
case of each of clauses (i) and (ii) for such failures to be
true, complete and correct (without giving effect to any
qualification or standard relating to materiality or a Company
Material Adverse Effect contained in any such representations
and warranties) which, individually or in the aggregate, would
not have a Company Material Adverse Effect, and Parent shall
have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Company to such effect;
(b) Company shall have performed or complied in all
material respects with all covenants required by this
Agreement to be performed or complied with by it on or prior
to the Effective Time and Parent shall have received a
certificate of the Chief Executive Officer and Chief Financial
Officer of Company to that effect;
(c) There shall have been no Company Material Adverse
Effect since the date of this Agreement;
(d) Company shall have received from each of the
parties set forth on Section 8.03(d) of the Company Disclosure
Schedule (each such party, an "Assigning Party"), a valid and
effective assignment, in form reasonably acceptable to Parent,
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of all intellectual property rights in all work created by
such Assigning Party on behalf of Company; and
(e) Each of the employees listed on Schedule 8.03(e)
of the Company Disclosure Schedule hereto shall have
terminated their respective employment agreements with Company
and shall have agreed to the terms of employment set forth in
their respective offer letters from Parent, and no employee
listed an Schedule I shall have terminated, or given notice of
termination of, such employee's employment with Company.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination
This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
adoption and approval of this Agreement, as follows:
(a) by mutual written consent duly authorized by the
boards of directors of each of Parent and Company;
(b) by either Parent or Company, if the Effective
Time shall not have occurred on or before April 30, 2001;
provided, however, that the right to terminate this Agreement
under this Section 9.01(b) shall not be available to any party
whose material breach of this Agreement shall have caused, or
resulted in, the failure of the Effective Time to occur on or
before such date;
(c) by either Parent or Company, if any Governmental
Order preventing the consummation of the Merger shall have
been entered by any court of competent jurisdiction and shall
have become final and nonappealable;
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(d) by Parent, if (i) the Board of Directors of
Company withdraws, modifies or changes its recommendation of
this Agreement or the Merger in a manner adverse to Parent or
its stockholders, (ii) the Board of Directors of Company shall
have recommended to the shareholders of Company a Competing
Transaction, (iii) the Company fails to comply in all material
respects with Section 6.04 or Section 7.02, (iv) a Competing
Transaction shall have been announced or otherwise publicly
known and the Board of Directors of Company shall have (A)
failed to recommend against acceptance of such by its
shareholders (including by taking no position, or indicating
its inability to take a position, with respect to the
acceptance by its shareholders of a Competing Transaction
involving a tender offer or exchange offer) within 5 Business
Days of delivery of a written request from Parent for such
action or (B) failed to reconfirm its approval and
recommendation of this Agreement and the transactions
contemplated hereby within 5 Business Days of delivery of a
written request from Parent for such action, (v) the Board of
Directors of Company shall have determined that a Competing
Transaction was a Superior Proposal and to take any of the
actions allowed by clause (iii) of Section 6.04 (and shall not
have, prior to Parent's termination of this Agreement pursuant
to this Section 9.01(d)(v), (x) reconfirmed its approval and
recommendation of this Agreement and the Merger and (y)
recommended against acceptance of such Superior Proposal by
its shareholders), or (vi) the Board of Directors of Company
resolves to take any of the actions described above;
(e) by Parent or Company, if the Company Shareholder
Approval shall not have been obtained at the Company
Shareholders' Meeting duly convened therefor or at any
adjournment or postponement thereof;
(f) by Parent, if Company shall have breached or
failed to perform in any material respect any of its
representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to
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perform (i) would give rise to the failure of a condition set
forth in Section 8.03(a) or (b) and (ii) is incapable of being
or has not been cured by Company within 30 calendar days after
Parent has given written notice to Company of such breach or
failure to perform;
(g) by Company, if Parent or Lux Sub shall have
breached or failed to perform in any material respect any of
its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set
forth in Section 8.02(a) or (b) and (ii) is incapable of being
or has not been cured by Parent within 30 calendar days after
Company has given written notice to Parent of such breach or
failure to perform; or
(h) by Company, if (i) the Board of Directors of
Company authorizes Company, subject to complying with the
terms of this Agreement, to enter into a binding written
agreement concerning a transaction that constitutes a Superior
Proposal and Company notifies Parent in writing that it
intends to enter into such an agreement, attaching the most
current version of such agreement (or description of all
material terms and conditions thereof) to such notice, (ii)
Parent does not make, within three Business days of receipt of
Company's written notification of its intention to enter into
a binding agreement for a Superior Proposal, an offer that the
Board of Directors of Company determines, in good faith after
consultation with its financial advisors, is at least as
favorable to the shareholders of Company as the Superior
Proposal, it being understood that Company shall not enter
into any such binding agreement during such three-day period
and (iii) Company prior to such termination pursuant to this
clause (h) pays to Parent in immediately available funds the
fees required to be paid pursuant to Section 9.05(b),
provided, that Company shall not be permitted to terminate
this Agreement pursuant to this Section 9.01(h) if such
Superior Proposal is attributable to a violation by Company of
its obligations under Section 6.04 or if such Superior
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Proposal otherwise resulted from a breach of any of Company's
obligations under this Agreement.
The right of any party hereto to terminate this Agreement
pursuant to this Section 9.01 will remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
person controlling any such party or any of their respective officers,
directors, representatives or agents, whether prior to or after the execution of
this Agreement.
SECTION 9.02 Effect of Termination
In the event of termination of this Agreement pursuant to
Section 9.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation under this Agreement on the part of any
party hereto or any of its Affiliates or any of its or their officers or
directors, other than the provisions of Section 4.20, Section 6.03(b), this
Section 9.02, Section 9.05 and Article X, which provisions shall survive such
termination; provided, however, that nothing herein shall relieve any party
hereto from liability for the willful or intentional breach of any of its
representations and warranties or the willful or intentional breach of any of
its covenants or agreements set forth in this Agreement. No termination of this
Agreement shall affect the obligation of the parties contained in the
Confidentiality Agreement, which shall survive termination of this Agreement and
remain in full force and effect in accordance with their terms.
SECTION 9.03 Amendment
This Agreement may be amended by the parties hereto by action
taken try or on behalf of their respective boards of directors at any time prior
to the Effective Time; provided, however, that, after the approval of this
Agreement by the shareholders of Company, no amendment may be made that changes
the amount or type of consideration into which Company Common Stock will be
converted pursuant to this Agreement. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
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SECTION 9.04 Waiver
At any time prior to the Effective Time, any party hereto may
(a) extend the time for or waive compliance with the performance of any
obligation or other act of any other party hereto, (b) waive any inaccuracy in
the representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance by any other party with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
SECTION 9.05 Termination Fee; Expenses
(a) Except as set forth in this Section 9.05, all Expenses
incurred in connection with this Agreement and the Merger shall be paid by the
party incurring such Expenses, whether or not the Merger is consummated, except
that Parent and Company each shall pay one-half of all Expenses (other than
attorneys' and accountants' fees and expenses) incurred solely for printing,
filing and mailing the Proxy Statement and all SEC and other regulatory filing
fees incurred in connection with the Proxy Statement and any fees required to be
paid under the HSR Act.
(b) In the event that (i) Parent shall terminate this
Agreement pursuant to Section 9.01(d), (ii) Parent shall terminate this
Agreement pursuant to Section 9.01(f), (iii) Company shall terminate this
Agreement pursuant to Section 9.01(h) or (iv) this Agreement shall be terminated
pursuant to Section 9.01(b) or pursuant to Section 9.01(e) as a result of the
failure to obtain the Company Shareholder Approval and, in the case of this
clause (iv), (A) at or prior to such termination, there shall exist or have been
publicly proposed a Competing Transaction with respect to Company and (B) within
12 months after such termination, Company shall enter into a definitive
agreement with respect to any Competing Transaction or any Competing Transaction
involving Company shall be consummated, then, in the case of (x) clauses (i) or
(ii), promptly after such termination, (y) in the case of clause (iii) prior to
such termination or (z) in the case of clause (iv), immediately before the
execution and delivery of such agreement or such consummation, as applicable,
Company shall pay to Parent (the "Termination Fee") a sum equal to all of
Parent's Expenses (payable promptly upon receipt of a written statement thereof
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from Parent) and an additional amount equal to $6,500,000. In the event of
termination of this Agreement by Company pursuant to Section 9.01(g), Parent
shall pay to Company an amount equal to all of Company's Expenses (payable
promptly upon receipt of a written statement thereof from Company).
(c) Parent and Company agree that the agreements contained in
Section 9.05(b) above are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not enter into
this Agreement or the Shareholders Agreements. Accordingly, if Company fails to
pay to Parent any amounts due under Section 9.05(b), Company shall pay the fees
and expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit of other legal action, taken to collect
payment, together with interest on such amounts at the prime rate of Citibank,
N.A. in effect on the date such payment was required to be made.
(d) In the event that the Company properly terminates this
Agreement pursuant to 9.01(g), in addition to any other claims for damages or
expenses the Company may commence against Parent or one of its Affiliates,
Parent shall be specifically obligated to reimburse Company for the termination
fee due from Company to DoubleClick, not to exceed $8.6 million, if such
termination fee has not already been paid by Parent or one of its Affiliates.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Non-Survival of Representations and Warranties
The representations and warranties in this Agreement shall
terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 9.01, as the case may be. This Section 10.01 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
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SECTION 10.02 Notices
All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or facsimile, by registered or certified mail postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.02):
(a) if to Company:
NetCreations, Inc.
379 West Broadway, Suite 202
New York, New York 10012
Attention: Brian Burlant, Esq.
Telecopier: 212 274 9266
with a copy to:
Piper, Marbury, Rudnick & Wolfe LLP
1251 Avenue of the Americas
New York, New York 10020
Attention: Andrew J. Cosentino
Telecopier: 212 835 6001
(b) if to Parent, Lux Sub or Merger Sub:
SEAT Pagine Gialle S.p.A.
Via Aurelio Saffi 18
10138 Turin, Italy
Attention: Mr. Paolo Gonano
Telecopier: 011 39 011 435 2882
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Faiza J. Saeed
Telecopier: 212 474 3700
SECTION 10.03 Severability
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of Law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
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full force and effect so long as the economic or legal substance of the Merger
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 a mutually acceptable manner to the fullest extent permitted by
applicable Law in order that the Merger may be consummated as originally
contemplated to the fullest extent possible.
SECTION 10.04 Assignment; Binding Effect; Benefit
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of Law or otherwise) without the prior written consent of the other
parties hereto. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Notwithstanding anything contained
in this Agreement to the contrary, other than Section 7.03, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective successors and permitted assigns any
rights or remedies under or by reason of this Agreement.
SECTION 10.05 Incorporation of Exhibits
The Company Disclosure Schedule and all Annexes attached
hereto and referred to herein are hereby incorporated herein and made a part of
this Agreement for all purposes as if fully set forth herein.
SECTION 10.06 Governing Law
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK OTHER THAN
CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY LAW OTHER
THAN THAT OF NEW YORK.
SECTION 10.07 Waiver of Jury Trial
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EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT
CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
SECTION 10.08 Headings; Interpretation
The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
SECTION 10.09 Counterparts
This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed and
delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 10.10 Entire Agreement
This Agreement (including the Annexes, the Schedules and the
Company Disclosure Schedule) and the Confidentiality Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
SECTION 10.11 Enforcement
Each of the parties hereto agrees that irreparable damage
would occur and that the parties would not have any adequate remedy at law in
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the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of New York or in any New York state court, 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 (i) consents to submit itself to the personal jurisdiction
of any Federal court located in the State of New York or any New York state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (iii) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a Federal court sitting in the State of New
York or a New York state court.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be executed as of the date first written above
by their respective officers thereunto duly authorized.
SEAT PAGINE GIALLE S.P.A.
by /s/ Lorenzo Pelliccioli
----------------------------
Name: Lorenzo Pelliccioli
Title: CEO
SOGERIM, SOCIETE ANONYME
by /s/ Jacques Loesch
----------------------------
Name: Jacques Loesch
Title: Administrateur
by /s/ Fabio Morvilli
----------------------------
Name: Fabio Morvilli
Title: President
NICKEL ACQUISITION CORP.
by /s/ Filippo Zamparelli
----------------------------
Name: Filippo Zamparelli
Title: President
NETCREATIONS, INC.
by /s/ Rosalind Resnick
----------------------------
Name: Rosalind Resnick
Title: CEO
<PAGE>
Annex A
FORM OF SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of December 22, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), among SEAT PAGINE GIALLE S.P.A. ("Parent"), a limited company
organized under the laws of the Republic of Italy and a majority owned
subsidiary of Telecom Italia S.p.A., a limited company organized under the laws
of the Republic of Italy, SOGERIM, SOCIETE ANONYME ("Lux Sub"), a Luxembourg
corporation and a wholly owned subsidiary of Telecom Italia S.p.A., NICKEL
ACQUISITION CORP., a New York corporation and a direct wholly owned subsidiary
of Lux Sub ("Merger Sub"), and the undersigned SHAREHOLDERS (each, a
"Shareholder" and, collectively, the "Shareholders") of NetCreations, Inc., a
New York corporation ("Company").
Capitalized and other terms used and not otherwise defined
herein shall have the respective meanings set forth in the Merger Agreement
described below.
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of the date hereof, among Parent, Lux Sub, Merger Sub and Company (as amended,
supplemented or otherwise modified from time to time, the "Merger Agreement"),
Parent has agreed to acquire, through Lux Sub and Merger Sub, all the
outstanding securities of Company pursuant to a statutory merger of Merger Sub
with and into Company in which each outstanding share of common stock, $.01 par
value per share, of Company (the "Company Common Stock") will be converted into
the right to receive $7.00 in cash as set forth in the Merger Agreement (the
"Merger");
WHEREAS, in order to induce Parent, Lux Sub and Merger Sub to
enter into the Merger Agreement and consummate the Merger, the Shareholders
desire to execute and deliver to Parent, Lux Sub and Merger Sub a shareholders'
agreement upon the terms set forth herein; and
<PAGE>
2
WHEREAS, each Shareholder is the registered and beneficial
owner of such number of shares of the outstanding capital stock of Company as is
indicated on the signature page of this Agreement under the heading "Total
Number of Shares of Company Capital Stock Owned on the Date Hereof", and such
Shareholder desires to make the number of shares indicated on the signature page
of this Agreement under the heading "Total Number of Shares of Company Capital
Stock Subject to this Agreement" (such shares, together with any other shares of
capital stock of Company acquired by such Shareholder after the date hereof and
during the term of this Agreement (including through the exercise of any stock
options, warrants or similar instruments), being collectively referred to herein
as the "Shares") subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Ownership of Shares; Transfer. (a) Each Shareholder
represents and warrants to Parent, Lux Sub and Merger Sub (collectively, the
"Acquirors") that such Shareholder is the record and beneficial owner of, and
has good and marketable title to, the Shares. The Shares constitute a portion of
such Shareholder's interest in the outstanding capital stock and voting
securities of Company. The Shares are free and clear of any liens, claims,
options, charges or other encumbrances. Shareholder has the sole right to vote
the Shares and, except as contemplated by this Agreement, none of the Shares is
subject to any voting trust or other agreement, arrangement or restriction with
respect to the voting of such Shares. Such Shareholder's principal residence or
place of business is accurately set forth on the signature page hereto. As used
herein, the term "Expiration Date" shall mean the earlier to occur of (i) the
Effective Time or (ii) termination of the Merger Agreement in accordance with
the terms thereof.
<PAGE>
3
(b) Other than pursuant to this Agreement, Shareholder shall
not (i) sell, transfer, pledge, assign or otherwise dispose of (including by
gift) (collectively, "Transfer"), or enter into any contract, agreement, option
or other arrangement (including any profit sharing arrangement) with respect to
the Transfer of, any Shares to any person (other than pursuant to the Merger) or
(ii) enter into any voting arrangement, whether by proxy, voting agreement or
otherwise, with respect to any Shares and shall not commit or agree to take any
of the foregoing actions. Shareholder shall not, nor shall Shareholder permit
any entity under such Shareholder's control to, deposit any Shares in a voting
trust.
2. Agreement to Vote Shares. (a) Prior to the Expiration Date,
at every meeting of the shareholders of Company at which any of the following is
considered or voted upon, and at every adjournment or postponement thereof, and
on every action or approval by written consent of the shareholders of Company
with respect to any of the following, each Shareholder shall vote (or cause to
be voted) the Shares in favor of adoption of the Merger Agreement and approval
of the Merger and any other transactions contemplated by the Merger Agreement.
(b) Prior to the Expiration Date, at every meeting of the
shareholders of Company at which any of the following is considered or voted
upon, and at every adjournment or postponement thereof, and on every action or
approval by written consent of the shareholders of Company with respect to any
of the following, each Shareholder shall vote (or cause to be voted) the Shares
against (i) any merger agreement or merger (other than the Merger Agreement and
the Merger), consolidation, combination, share exchange, sale of substantial
assets, reorganization, recapitalization, dissolution, liquidation or winding up
of or by or involving Company, (ii) any Competing Transaction and (iii) any
amendment of Company's certificate of incorporation or by-laws or other proposal
or transaction involving Company or any of its subsidiaries, which amendment or
other proposal or transaction would in any manner impede, frustrate, prevent or
<PAGE>
4
nullify any provision of the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement or change in any manner the
voting rights of any class of capital stock of Company (each a "Frustrating
Transaction"). No Shareholder shall commit or agree to take any action
inconsistent with the foregoing.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall limit or restrict any Shareholder from (i) acting in his or her capacity
as a director or officer of Company, to the extent applicable, it being
understood that this Agreement shall apply to each Shareholder solely in his or
her capacity as a shareholder of Company or (ii) voting in his or her sole
discretion on any matter other than those matters referred to in Section 2(a) or
2(b).
3. IRREVOCABLE PROXY. Each Shareholder hereby irrevocably
grants to, and appoints, Parent, Lux Sub and Merger Sub, or any of them, and any
individual designated in writing by any of them, and each of them individually,
as the Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Shareholder, to vote
the Shares of such Shareholder, or grant a consent or approval in respect of the
Shares of such Shareholder in a manner consistent with Sections 2(a) and 2(b).
Each Shareholder understands and acknowledges that each of the Acquirors is
entering into the Merger Agreement in reliance upon such Shareholder's execution
and delivery of this Agreement. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 3 is given in connection with the
agreement of Merger Sub to purchase the Shares of the Shareholder pursuant to
the Merger Agreement. Each Shareholder hereby further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Each Shareholder hereby ratifies and confirms all that such irrevocable
proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable
proxy is executed and intended to be irrevocable in accordance with the
provisions of Section 609 of the New York Business Corporation Law. The
irrevocable proxy granted hereunder shall automatically terminate upon the
<PAGE>
5
termination of Sections 2(a) and 2(b) in accordance with Section 8. Upon the
execution of this Agreement by each Shareholder, such Shareholder hereby revokes
any and all prior proxies or powers of attorney given by such Shareholder with
respect to the Shares and agrees not to grant any subsequent proxies or powers
of attorney with respect to the Shares until after the Expiration Date.
4. Representations, Warranties and Covenants of Shareholder.
Each Shareholder hereby represents, warrants and covenants to each Acquiror as
follows:
(a) Each Shareholder has full power, authority and legal
capacity to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by such Shareholder and
constitutes the valid and binding obligation of such Shareholder, enforceable
against such Shareholder in accordance with its terms, except as may be limited
by (i) the effect of bankruptcy, insolvency, conservatorship, arrangement,
moratorium or other laws affecting or relating to the rights of creditors
generally, or (ii) the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general principles of equity,
regardless of whether considered in a proceeding in equity or at law. The
execution and delivery of this Agreement by such Shareholder does not, and the
performance of such Shareholder's obligations hereunder will not, result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any right to terminate,
amend, accelerate or cancel any right or obligation under, or result in the
creation of any lien or encumbrance on any Shares pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Shareholder is a party or by which
such Shareholder or the Shares are or will be bound or affected. If Shareholder
<PAGE>
6
is married and the Shares constitute community property or if there otherwise is
a need for spousal or other approval of this Agreement for it to be legal, valid
and binding, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, Shareholder's spouse,
enforceable against such spouse in accordance with its terms.
(b) Except to the extent otherwise permitted under Section
6.04 of the Merger Agreement, until the Expiration Date, each Shareholder, in
the Shareholder's capacity as a shareholder of Company, will not (and will use
such Shareholder's reasonable best efforts to cause its affiliates, officers,
directors and employees and any investment banker, attorney, accountant or other
agent retained by such Shareholder, not to): (i) initiate or solicit, directly
or indirectly, any proposal, plan or offer to acquire all or any material part
of the business or properties or capital stock of Company, whether by merger,
purchase of assets, tender offer or otherwise, or to liquidate Company or
otherwise distribute to the shareholders of Company all or any substantial part
of the business, properties or capital stock of Company (each, an "Acquisition
Proposal"); (ii) initiate, directly or indirectly, any contact with any person
in an effort to or with a view towards soliciting any Acquisition Proposal;
(iii) furnish information concerning Company's business, properties or assets to
any corporation, partnership, person or other entity or group (other than
Parent, or any affiliate, associate, agent or representative of Parent) under
any circumstances that could reasonably be expected to relate to an actual or
potential Acquisition Proposal; (iv) negotiate or enter into discussions or an
agreement, directly or indirectly, with any entity or group with respect to any
potential Acquisition Proposal or (v) either alone or together with any other
shareholder of Company, request that a special meeting of the shareholders of
Company be held to consider and vote on any Competing Transaction or Frustrating
Transaction. In the event any Shareholder, in such Shareholder's capacity as a
shareholder of Company, shall receive or become aware of any Acquisition
Proposal subsequent to the date hereof, such Shareholder shall promptly inform
Parent as to any such matter and the details thereof to the extent possible
<PAGE>
7
without breaching any other agreement to which such Shareholder is a party or
violating its fiduciary duties.
(c) Each Shareholder understands and agrees that if any
Shareholder attempts to vote or provide any other person with the authority to
vote any of the Shares held by such Shareholder as of the record date for any
meeting at which such Shares are to be voted other than in compliance with this
Agreement, Company shall not, and such Shareholder hereby unconditionally and
irrevocably instructs Company to not, record such vote unless and until such
Shareholder shall have complied with the terms of this Agreement.
5. No Limitation on Discretion as Director. If any Shareholder
is a natural person and is a member of the board of directors of Company, then
this Agreement will apply to the exercise by such Shareholder in his or her
individual capacity of rights attaching to ownership of the Shares, and nothing
herein shall be deemed to apply to, or to limit in any manner the discretion of
such Shareholder with respect to, any action which may be taken or omitted by
him or her acting in his or her fiduciary capacity as a member of the board of
directors of Company.
6. Additional Documents. Each Shareholder hereby covenants and
agrees to execute and deliver any additional documents necessary or desirable,
in the reasonable opinion of Parent, to carry out the purpose and intent of this
Agreement.
7. Consent and Waiver. Each Shareholder hereby consents to and
approves the actions taken by the board of directors of Company in approving the
Merger and adopting the Merger Agreement and gives any consents or waivers that
are reasonably required for the consummation of the Merger under the terms of
any agreement to which such Shareholder is a party; provided, however, that such
Shareholder shall not be required by this Section 7 to give any consent or
waiver in his or her capacity as a director or officer of Company.
<PAGE>
8
8. Termination. This Agreement and the proxy granted in
connection herewith shall terminate and shall have no further force or effect as
of the Expiration Date.
9. Confidentiality. Each Shareholder agrees (i) to hold any
information regarding this Agreement and the Merger in strict confidence and
(ii) not to divulge any such information to any third person, except to the
extent any of the same is hereafter publicly disclosed by Parent.
10. Obligations Attach to Shares; Survival; Acquisition of
Additional Shares of Capital Stock of Company. Each Shareholder agrees that this
Agreement and the obligations hereunder shall attach to such Shareholder's
Shares and shall be binding upon any person to which or whom legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including such Shareholder's heirs, guardians, administrators or successors, and
that each certificate representing such Shares will be inscribed with a legend
to such effect. All authority herein conferred by a Shareholder shall survive
the death or incapacity of such Shareholder and any obligation of a Shareholder
hereunder shall be binding upon the heirs, guardians, administrators, personal
representatives, successors and assigns of a Shareholder. In the event of any
stock split, stock dividend, merger, reorganization, recapitalization or other
change in the capital structure of Company affecting the Shares, or the
acquisition of additional shares of capital stock of Company by any Shareholder,
the number of shares of capital stock of Company listed under the heading "Total
Number of Shares of Company Capital Stock Subject to this Agreement" shall be
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of capital stock of Company issued to or
acquired by such Shareholder.
11. Miscellaneous.
11.1 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
<PAGE>
9
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
11.2 Binding Effect and Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without the prior written consent of the other. This
Agreement is intended to bind each Shareholder solely as a securityholder of
Company only with respect to the specific matters set forth herein.
11.3 Amendment and Modification. This Agreement may not be
modified, amended, altered or supplemented except by the execution and delivery
of a written agreement executed by the parties hereto.
11.4 Enforcement. The parties hereto acknowledge and agree
that irreparable damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any Federal court
located in the State of New York or in any New York state court, the foregoing
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of any Federal court located in the State of New York
or any New York state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
<PAGE>
10
or other request for leave from any such court, (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal court sitting
in the State of New York or any New York state court and (iv) waives any right
to trial by jury with respect to any claim or proceeding related to or arising
out of this Agreement or any transaction contemplated by this Agreement.
11.5 Notices. All notices, requests, demands or other
communications that are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given (a)
when delivered, if delivered by hand, (b) one business day after transmitted, if
transmitted by a nationally recognized overnight courier service, (c) when
telecopied, if telecopied (which is confirmed), or (d) three business days after
mailing, if mailed by registered or certified mail (return receipt requested),
to the parties at the following addresses:
(i) If to any Shareholder, at the address set forth below
such Shareholder's signature at the end hereof.
(ii) if to Parent, Lux Sub or Merger Sub, to:
SEAT Pagine Gialle S.p.A.
Via Aurelio Saffi 18
10138 Turin, Italy
Attention: Mr. Paolo Gonano
Telecopier: 011 39 011 435 2882
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Faiza J. Saeed
Telecopier: (212) 474-3700
<PAGE>
11
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
11.7 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
11.8 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
11.9 Effect of Headings. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
[Remainder of page intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first above written.
SEAT PAGINE GIALLE S.P.A. SHAREHOLDER
By:
-------------------- -------------------------------
Name: (Signature)
------------------
Title:
----------------- -------------------------------
(Print Name of Shareholder)
SOGERIM, SOCIETE ANONYME
-------------------------------
(Print Street Address)
By: -------------------------------
-------------------- (Print City, State and Zip)
Name:
------------------ -------------------------------
Title: (Print Telephone Number)
-----------------
-------------------------------
(Print Facsimile Number)
NICKEL ACQUISITION CORP. -------------------------------
(Social Security or Tax
I.D. Number)
By:
--------------------
Name:
------------------
Title:
-----------------
Total Number of Shares of Company Capital Stock Owned on the
Date Hereof:
Company Common Stock:
------------------------------
State of Residence:
-------------------------------
Total Number of Shares of Company Capital Stock Subject to
this Agreement:
Company Common Stock:
------------------------------
SIGNATURE PAGE TO SHAREHOLDERS' AGREEMENT
<PAGE>
Appendix B
Execution Copy
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of December 22, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), among SEAT PAGINE GIALLE S.P.A. ("Parent"), a limited company
organized under the laws of the Republic of Italy and a majority owned
subsidiary of Telecom Italia S.p.A., a limited company organized under the laws
of the Republic of Italy, SOGERIM, SOCIETE ANONYME ("Lux Sub"), a Luxembourg
corporation and a wholly owned subsidiary of Telecom Italia S.p.A., NICKEL
ACQUISITION CORP., a New York corporation and a direct wholly owned subsidiary
of Lux Sub ("Merger Sub"), and the undersigned SHAREHOLDERS (each, a
"Shareholder" and, collectively, the "Shareholders") of NetCreations, Inc., a
New York corporation ("Company").
Capitalized and other terms used and not otherwise defined
herein shall have the respective meanings set forth in the Merger Agreement
described below.
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of the date hereof, among Parent, Lux Sub, Merger Sub and Company (as amended,
supplemented or otherwise modified from time to time, the "Merger Agreement"),
Parent has agreed to acquire, through Lux Sub and Merger Sub, all the
outstanding securities of Company pursuant to a statutory merger of Merger Sub
with and into Company in which each outstanding share of common stock, $.01 par
value per share, of Company (the "Company Common Stock") will be converted into
the right to receive $7.00 in cash as set forth in the Merger Agreement (the
"Merger");
WHEREAS, in order to induce Parent, Lux Sub and Merger Sub to
enter into the Merger Agreement and consummate the Merger, the Shareholders
desire to execute and deliver to Parent, Lux Sub and Merger Sub a shareholders'
agreement upon the terms set forth herein; and
<PAGE>
2
WHEREAS, each Shareholder is the registered and beneficial
owner of such number of shares of the outstanding capital stock of Company as is
indicated on the signature page of this Agreement under the heading "Total
Number of Shares of Company Capital Stock Owned on the Date Hereof", and such
Shareholder desires to make the number of shares indicated on the signature page
of this Agreement under the heading "Total Number of Shares of Company Capital
Stock Subject to this Agreement" (such shares, together with any other shares of
capital stock of Company acquired by such Shareholder after the date hereof and
during the term of this Agreement (including through the exercise of any stock
options, warrants or similar instruments), being collectively referred to herein
as the "Shares") subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1. Ownership of Shares; Transfer. (a) Each Shareholder
represents and warrants to Parent, Lux Sub and Merger Sub (collectively, the
"Acquirors") that such Shareholder is the record and beneficial owner of, and
has good and marketable title to, the Shares. The Shares constitute a portion of
such Shareholder's interest in the outstanding capital stock and voting
securities of Company. The Shares are free and clear of any liens, claims,
options, charges or other encumbrances. Shareholder has the sole right to vote
the Shares and, except as contemplated by this Agreement, none of the Shares is
subject to any voting trust or other agreement, arrangement or restriction with
respect to the voting of such Shares. Such Shareholder's principal residence or
place of business is accurately set forth on the signature page hereto. As used
herein, the term "Expiration Date" shall mean the earlier to occur of (i) the
Effective Time or (ii) termination of the Merger Agreement in accordance with
the terms thereof.
<PAGE>
3
(b) Other than pursuant to this Agreement, Shareholder shall
not (i) sell, transfer, pledge, assign or otherwise dispose of (including by
gift) (collectively, "Transfer"), or enter into any contract, agreement, option
or other arrangement (including any profit sharing arrangement) with respect to
the Transfer of, any Shares to any person (other than pursuant to the Merger) or
(ii) enter into any voting arrangement, whether by proxy, voting agreement or
otherwise, with respect to any Shares and shall not commit or agree to take any
of the foregoing actions. Shareholder shall not, nor shall Shareholder permit
any entity under such Shareholder's control to, deposit any Shares in a voting
trust.
2. Agreement to Vote Shares. (a) Prior to the Expiration Date,
at every meeting of the shareholders of Company at which any of the following is
considered or voted upon, and at every adjournment or postponement thereof, and
on every action or approval by written consent of the shareholders of Company
with respect to any of the following, each Shareholder shall vote (or cause to
be voted) the Shares in favor of adoption of the Merger Agreement and approval
of the Merger and any other transactions contemplated by the Merger Agreement.
(b) Prior to the Expiration Date, at every meeting of the
shareholders of Company at which any of the following is considered or voted
upon, and at every adjournment or postponement thereof, and on every action or
approval by written consent of the shareholders of Company with respect to any
of the following, each Shareholder shall vote (or cause to be voted) the Shares
against (i) any merger agreement or merger (other than the Merger Agreement and
the Merger), consolidation, combination, share exchange, sale of substantial
assets, reorganization, recapitalization, dissolution, liquidation or winding up
of or by or involving Company, (ii) any Competing Transaction and (iii) any
amendment of Company's certificate of incorporation or by-laws or other proposal
or transaction involving Company or any of its subsidiaries, which amendment or
other proposal or transaction would in any manner impede, frustrate, prevent or
<PAGE>
4
nullify any provision of the Merger Agreement, the Merger or any other
transaction contemplated by the Merger Agreement or change in any manner the
voting rights of any class of capital stock of Company (each a "Frustrating
Transaction"). No Shareholder shall commit or agree to take any action
inconsistent with the foregoing.
(c) Notwithstanding the foregoing, nothing in this Agreement
shall limit or restrict any Shareholder from (i) acting in his or her capacity
as a director or officer of Company, to the extent applicable, it being
understood that this Agreement shall apply to each Shareholder solely in his or
her capacity as a shareholder of Company or (ii) voting in his or her sole
discretion on any matter other than those matters referred to in Section 2(a) or
2(b).
3. IRREVOCABLE PROXY. Each Shareholder hereby irrevocably
grants to, and appoints, Parent, Lux Sub and Merger Sub, or any of them, and any
individual designated in writing by any of them, and each of them individually,
as the Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Shareholder, to vote
the Shares of such Shareholder, or grant a consent or approval in respect of the
Shares of such Shareholder in a manner consistent with Sections 2(a) and 2(b).
Each Shareholder understands and acknowledges that each of the Acquirors is
entering into the Merger Agreement in reliance upon such Shareholder's execution
and delivery of this Agreement. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 3 is given in connection with the
agreement of Merger Sub to purchase the Shares of the Shareholder pursuant to
the Merger Agreement. Each Shareholder hereby further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Each Shareholder hereby ratifies and confirms all that such irrevocable
proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable
proxy is executed and intended to be irrevocable in accordance with the
provisions of Section 609 of the New York Business Corporation Law. The
irrevocable proxy granted hereunder shall automatically terminate upon the
<PAGE>
5
termination of Sections 2(a) and 2(b) in accordance with Section 8. Upon the
execution of this Agreement by each Shareholder, such Shareholder hereby revokes
any and all prior proxies or powers of attorney given by such Shareholder with
respect to the Shares and agrees not to grant any subsequent proxies or powers
of attorney with respect to the Shares until after the Expiration Date.
4. Representations, Warranties and Covenants of Shareholder.
Each Shareholder hereby represents, warrants and covenants to each Acquiror as
follows:
(a) Each Shareholder has full power, authority and legal
capacity to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by such Shareholder and
constitutes the valid and binding obligation of such Shareholder, enforceable
against such Shareholder in accordance with its terms, except as may be limited
by (i) the effect of bankruptcy, insolvency, conservatorship, arrangement,
moratorium or other laws affecting or relating to the rights of creditors
generally, or (ii) the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general principles of equity,
regardless of whether considered in a proceeding in equity or at law. The
execution and delivery of this Agreement by such Shareholder does not, and the
performance of such Shareholder's obligations hereunder will not, result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any right to terminate,
amend, accelerate or cancel any right or obligation under, or result in the
creation of any lien or encumbrance on any Shares pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Shareholder is a party or by which
such Shareholder or the Shares are or will be bound or affected. If Shareholder
<PAGE>
6
is married and the Shares constitute community property or if there otherwise is
a need for spousal or other approval of this Agreement for it to be legal, valid
and binding, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, Shareholder's spouse,
enforceable against such spouse in accordance with its terms.
(b) Except to the extent otherwise permitted under Section
6.04 of the Merger Agreement, until the Expiration Date, each Shareholder, in
the Shareholder's capacity as a shareholder of Company, will not (and will use
such Shareholder's reasonable best efforts to cause its affiliates, officers,
directors and employees and any investment banker, attorney, accountant or other
agent retained by such Shareholder, not to): (i) initiate or solicit, directly
or indirectly, any proposal, plan or offer to acquire all or any material part
of the business or properties or capital stock of Company, whether by merger,
purchase of assets, tender offer or otherwise, or to liquidate Company or
otherwise distribute to the shareholders of Company all or any substantial part
of the business, properties or capital stock of Company (each, an "Acquisition
Proposal"); (ii) initiate, directly or indirectly, any contact with any person
in an effort to or with a view towards soliciting any Acquisition Proposal;
(iii) furnish information concerning Company's business, properties or assets to
any corporation, partnership, person or other entity or group (other than
Parent, or any affiliate, associate, agent or representative of Parent) under
any circumstances that could reasonably be expected to relate to an actual or
potential Acquisition Proposal; (iv) negotiate or enter into discussions or an
agreement, directly or indirectly, with any entity or group with respect to any
potential Acquisition Proposal or (v) either alone or together with any other
shareholder of Company, request that a special meeting of the shareholders of
Company be held to consider and vote on any Competing Transaction or Frustrating
Transaction. In the event any Shareholder, in such Shareholder's capacity as a
shareholder of Company, shall receive or become aware of any Acquisition
Proposal subsequent to the date hereof, such Shareholder shall promptly inform
Parent as to any such matter and the details thereof to the extent possible
<PAGE>
7
without breaching any other agreement to which such Shareholder is a party or
violating its fiduciary duties.
(c) Each Shareholder understands and agrees that if any
Shareholder attempts to vote or provide any other person with the authority to
vote any of the Shares held by such Shareholder as of the record date for any
meeting at which such Shares are to be voted other than in compliance with this
Agreement, Company shall not, and such Shareholder hereby unconditionally and
irrevocably instructs Company to not, record such vote unless and until such
Shareholder shall have complied with the terms of this Agreement.
5. No Limitation on Discretion as Director. If any Shareholder
is a natural person and is a member of the board of directors of Company, then
this Agreement will apply to the exercise by such Shareholder in his or her
individual capacity of rights attaching to ownership of the Shares, and nothing
herein shall be deemed to apply to, or to limit in any manner the discretion of
such Shareholder with respect to, any action which may be taken or omitted by
him or her acting in his or her fiduciary capacity as a member of the board of
directors of Company.
6. Additional Documents. Each Shareholder hereby covenants and
agrees to execute and deliver any additional documents necessary or desirable,
in the reasonable opinion of Parent, to carry out the purpose and intent of this
Agreement.
7. Consent and Waiver. Each Shareholder hereby consents to and
approves the actions taken by the board of directors of Company in approving the
Merger and adopting the Merger Agreement and gives any consents or waivers that
are reasonably required for the consummation of the Merger under the terms of
any agreement to which such Shareholder is a party; provided, however, that such
Shareholder shall not be required by this Section 7 to give any consent or
waiver in his or her capacity as a director or officer of Company.
<PAGE>
8
8. Termination. This Agreement and the proxy granted in
connection herewith shall terminate and shall have no further force or effect as
of the Expiration Date.
9. Confidentiality. Each Shareholder agrees (i) to hold any
information regarding this Agreement and the Merger in strict confidence and
(ii) not to divulge any such information to any third person, except to the
extent any of the same is hereafter publicly disclosed by Parent.
10. Obligations Attach to Shares; Survival; Acquisition of
Additional Shares of Capital Stock of Company. Each Shareholder agrees that this
Agreement and the obligations hereunder shall attach to such Shareholder's
Shares and shall be binding upon any person to which or whom legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including such Shareholder's heirs, guardians, administrators or successors, and
that each certificate representing such Shares will be inscribed with a legend
to such effect. All authority herein conferred by a Shareholder shall survive
the death or incapacity of such Shareholder and any obligation of a Shareholder
hereunder shall be binding upon the heirs, guardians, administrators, personal
representatives, successors and assigns of a Shareholder. In the event of any
stock split, stock dividend, merger, reorganization, recapitalization or other
change in the capital structure of Company affecting the Shares, or the
acquisition of additional shares of capital stock of Company by any Shareholder,
the number of shares of capital stock of Company listed under the heading "Total
Number of Shares of Company Capital Stock Subject to this Agreement" shall be
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of capital stock of Company issued to or
acquired by such Shareholder.
11. Miscellaneous.
11.1 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
<PAGE>
9
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
11.2 Binding Effect and Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without the prior written consent of the other. This
Agreement is intended to bind each Shareholder solely as a securityholder of
Company only with respect to the specific matters set forth herein.
11.3 Amendment and Modification. This Agreement may not be
modified, amended, altered or supplemented except by the execution and delivery
of a written agreement executed by the parties hereto.
11.4 Enforcement. The parties hereto acknowledge and agree
that irreparable damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any Federal court
located in the State of New York or in any New York state court, the foregoing
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to submit itself to
the personal jurisdiction of any Federal court located in the State of New York
or any New York state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
<PAGE>
10
or other request for leave from any such court, (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal court sitting
in the State of New York or any New York state court and (iv) waives any right
to trial by jury with respect to any claim or proceeding related to or arising
out of this Agreement or any transaction contemplated by this Agreement.
11.5 Notices. All notices, requests, demands or other
communications that are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given (a)
when delivered, if delivered by hand, (b) one business day after transmitted, if
transmitted by a nationally recognized overnight courier service, (c) when
telecopied, if telecopied (which is confirmed), or (d) three business days after
mailing, if mailed by registered or certified mail (return receipt requested),
to the parties at the following addresses:
(i) If to any Shareholder, at the address set forth below
such Shareholder's signature at the end hereof.
(ii) if to Parent, Lux Sub or Merger Sub, to:
SEAT Pagine Gialle S.p.A.
Via Aurelio Saffi 18
10138 Turin, Italy
Attention: Mr. Paolo Gonano
Telecopier: 011 39 011 435 2882
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Faiza J. Saeed
Telecopier: (212) 474-3700
<PAGE>
11
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
11.7 Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of the subject matter hereof and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
11.8 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
11.9 Effect of Headings. The section headings herein are
for convenience only and shall not affect the construction or interpretation of
this Agreement.
[Remainder of page intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first above written.
SEAT PAGINE GIALLE S.P.A. SHAREHOLDER
By: /s/ Lorenzo Pellicciolli
------------------------- -------------------------------
Name: Lorenzo Pellicciolli (Signature)
-----------------------
Title: CEO /s/ ROSALIND RESNICK
----------------- -------------------------------
(Print Name of Shareholder)
SOGERIM, SOCIETE ANONYME
-------------------------------
(Print Street Address)
By: /s/ Jacques Loesch, /s/ Fabio Morvillo -------------------------------
--------------------------------------- (Print City, State and Zip)
Name: Jacques Loesch, Fabio Morvillo
------------------------------------ -------------------------------
Title: Administrator, President (Print Telephone Number)
-----------------------------------
-------------------------------
(Print Facsimile Number)
NICKEL ACQUISITION CORP. -------------------------------
(Social Security or Tax
I.D. Number)
By: /s/ Filippo Zamparelli
-----------------------
Name: Filippo Zamparelli
---------------------
Title: President
-----------------
Total Number of Shares of Company Capital Stock Owned on the
Date Hereof:
Company Common Stock: 5,754,500
------------------------------
State of Residence: New York
-------------------------------
Total Number of Shares of Company Capital Stock Subject to
this Agreement:
Company Common Stock: 5,290,383
------------------------------
SIGNATURE PAGE TO SHAREHOLDERS' AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first above written.
SEAT PAGINE GIALLE S.P.A. SHAREHOLDER
By: /s/ Lorenzo Pelliccioli
------------------------ -------------------------------
Name: Lorenzo Pelliccioli (Signature)
----------------------
Title: CEO /s/ RYAN SCOTT DRUCKENMILLER
----------------- -------------------------------
(Print Name of Shareholder)
SOGERIM, SOCIETE ANONYME
-------------------------------
(Print Street Address)
By: /s/ Jacques Loesch, /s/ Fabio Morvillo -------------------------------
--------------------------------------- (Print City, State and Zip)
Name: Jacques Loesch, Fabio Morvillo
------------------------------------- -------------------------------
Title: President (Print Telephone Number)
------------------------------------
-------------------------------
(Print Facsimile Number)
NICKEL ACQUISITION CORP. -------------------------------
(Social Security or Tax
I.D. Number)
By: /s/ Filippo Zamparelli
------------------------
Name: Filippo Zamparelli
----------------------
Title: President
---------------------
Total Number of Shares of Company Capital Stock Owned on the
Date Hereof:
Company Common Stock: 5,230,035
------------------------------
State of Residence: New York
-------------------------------
Total Number of Shares of Company Capital Stock Subject to
this Agreement:
Company Common Stock: 4,808,218
------------------------------
SIGNATURE PAGE TO SHAREHOLDERS' AGREEMENT
<PAGE>
Appendix C
December 22, 2000
Board of Directors
NetCreations, Inc.
379 West Broadway, Suite 202
New York, New York 10012
Members of the Board:
We understand that NetCreations, Inc. (the "Company"), SEAT Pagine Gialle S.P.A.
("SEAT"), Sogerim, Societe Anonyme, a sister company wholly-owned by the
majority owner of SEAT ("Acquiror"), and Nickel Acquisition Corp. (a
wholly-owned subsidiary of Acquiror, "Merger Sub") are proposing to enter into
an Agreement and Plan of Merger (the "Agreement") which will provide, among
other things, for the merger (the "Merger") of Merger Sub with and into the
Company. Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Acquiror. Under the terms, and subject to the conditions, set
forth in the Agreement dated as of December 22, 2000 (the "Agreement"), at the
effective time of the Merger, (i) the outstanding shares of common stock of the
Company, $0.01 par value ("Company Common Stock") will be converted into the
right to receive an aggregate of $7.00 per share in cash (the "Merger
Consideration"), and all of the outstanding options to purchase Company Common
Stock will be cancelled and the holders thereof will be entitled to the
difference, if any, between $7.00 and the exercise price thereof. The terms and
conditions of the Merger are set out more fully in the Agreement. We understand
that the Company intends, substantially concurrently with execution of the
Agreement, to terminate the Agreement and Plan of Reorganization among the
Company, DoubleClick Inc. ("DoubleClick") and Genesis Merger Sub, Inc. dated as
of October 2, 2000 (the "DoubleClick Agreement") pursuant to the provisions
thereof entitling the Company to accept a Superior Proposal (as defined in the
DoubleClick Agreement).
You have asked us whether, in our opinion, as of the date hereof, the Merger
Consideration (i) is fair to the Holders of Company Common Stock, and (ii) is
more favorable to the Holders of Company Common Stock than the Exchange Ratio
(as defined in the DoubleClick Agreement), in each case from a financial point
of view. In addition, you have asked whether we are of the opinion that SEAT is
reasonably capable of consummating the Merger. The "Holders of Company Common
Stock" shall be defined as all holders of Company Common Stock other than
Acquiror, Merger Sub, any affiliates of Acquiror or Merger Sub or any holders of
Dissenting Shares.
For purposes of this opinion we have, among other things:
(i) reviewed certain publicly available financial statements and
other business and financial information of the Company and
publicly-traded Affiliates of the Acquiror;
(ii) reviewed certain internal financial statements and other
financial and operating data, including certain financial
forecasts and other forward looking information, concerning
the Company prepared by the management of the Company;
(iii) reviewed with the Company certain publicly available estimates
of research analysts relating to the Company and DoubleClick;
(iv) held discussions with the management of the Company concerning
the business, past and current operations, financial condition
and future prospects of the Company and DoubleClick;
<PAGE>
Board of Directors
NetCreations, Inc.
December 22, 2000
Page 2
(v) reviewed the financial terms and conditions set forth in the
Agreement;
(vi) reviewed the stock price and trading history of Company Common
Stock and DoubleClick's common stock;
(vii) compared the financial performance of the Company and the
prices and trading activity of Company Common Stock with that
of certain other publicly traded companies comparable with the
Company;
(viii) compared the financial terms of the Merger with the financial
terms, to the extent publicly available, of other transactions
that we deemed relevant; and
(ix) made such other studies and inquiries, and took into account
such other matters as we deemed relevant, including our
assessment of general economic, market and monetary
conditions.
In our review and analysis, and in arriving at our opinion, we have assumed and
relied upon the accuracy and completeness of all of the financial and other
information provided to us (including information furnished to us orally or
otherwise discussed with us by the Company's management) or publicly available
and have neither attempted to verify, nor assumed responsibility for verifying,
any of such information. We have relied upon the assurances of the Company's
management that it is not aware of any facts that would make such information
inaccurate or misleading. Furthermore, we did not obtain or make, or assume any
responsibility for obtaining or making, any independent evaluation or appraisal
of the properties, assets or liabilities (contingent or otherwise) of the
Company, nor were we furnished with any such evaluation or appraisal. With
respect to the financial forecasts and projections (and the assumptions and
bases therefor) for the Company that we have reviewed, we have assumed that such
forecasts and projections have been reasonably prepared in good faith on the
basis of reasonable assumptions and reflect the best currently available
estimates and judgments of the management of the Company as to the future
financial condition and performance of the Company, and we have further assumed
that such projections and forecasts will be realized in the amounts and in the
time periods currently estimated. We have assumed that the Merger will be
consummated upon the terms set forth in the Agreement without material
alteration thereof. In addition, we have assumed that the historical financial
statements of the Company reviewed by us have been prepared and fairly presented
in accordance with U.S. generally accepted accounting principles consistently
applied.
This opinion is necessarily based upon market, economic and other conditions as
in effect on, and information made available to us as of, the date hereof. It
should be understood that subsequent developments may affect the conclusion
expressed in this opinion and that we disclaim any undertaking or obligation to
advise any person of any change in any matter affecting this opinion which may
come or be brought to our attention after the date of this opinion. Our opinion
is limited to the fairness, from a financial point of view and as to the date
hereof, to the Holders of Company Common Stock of the Merger Consideration. We
do not express any opinion as to (i) the value of any employee agreement or
other arrangement entered into in connection with the Merger, (ii) any tax or
other consequences that might result from the Merger or (iii) the price at which
shares of DoubleClick Common Stock will be traded in the future, nor any other
comparison of any kind between the DoubleClick Agreement and the Merger
Agreement as of a future date. Except as set forth in the final sentence of this
letter, our opinion does not address the relative merits of the Merger and the
other business strategies that the Company's Board of Directors has considered
or may be considering, nor does it address the decision of the Company's Board
of Directors to proceed with the Merger. Neither does our opinion address any
legal or accounting matters, as to which we understand that Acquiror obtained
such advice as it deemed necessary from qualified professionals.
In connection with the preparation of our opinion, we were not authorized to
solicit, and did not solicit, third-parties regarding alternatives to the
Merger.
<PAGE>
Board of Directors
NetCreations, Inc.
December 22, 2000
Page 3
We are acting as financial advisor to the Company in connection with the Merger
and will receive (i) a fee contingent upon the delivery of this opinion and (ii)
an additional fee contingent upon the consummation of the Merger. In addition,
the Company has agreed to indemnify us for certain liabilities that may arise
out of our engagement. In the ordinary course of business, we may trade in the
Company's securities and affiliates of Acquiror's securities for our own account
and the account of our customers and, accordingly, may at any time hold a long
or short position in the Company's securities or affiliates of Acquiror's
securities.
Our opinion expressed herein is provided for the information of the Board of
Directors of the Company in connection with its evaluation of the Merger. Our
opinion is not intended to be and does not constitute a recommendation to any
stockholder of the Company as to how such stockholder should vote, or take any
other action, with respect to the Merger. This opinion may not be summarized,
described or referred to or furnished to any party except with our express prior
written consent.
Based upon and subject to the foregoing considerations, it is our opinion that,
as of the date hereof, the Merger Consideration (i) is fair to the Holders of
Company Common Stock, and (ii) is more favorable to the Holders of Company
Common Stock than the Exchange Ratio (as defined in the DoubleClick Agreement),
in each case from a financial point of view. In addition, based solely on the
inquiry described in subclause (i) in the third paragraph of this letter, we are
of the opinion that SEAT is reasonably capable of consummating the Merger.
Very truly yours,
ROBERTSON STEPHENS, INC.
/s/ Robertson Stephens, Inc.
------------------------------
<PAGE>
NETCREATIONS, INC. PROXY
FOR SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY [--], 2001
(This Proxy Is Solicited By The Board Of Directors Of NetCreations)
The undersigned shareholder of NetCreations, Inc. hereby appoints
Rosalind Resnick and Ryan Scott Druckenmiller, and each of them, with full power
of substitution, proxies to vote the shares of stock which the undersigned could
vote if personally present at the Special Meeting of Shareholders of
NetCreations, Inc. to be held at 9:30 a.m., local time, on [_______], February
[__], 2001, at the TriBeCa Grand Hotel, 2 Avenue of the Americas, New York, New
York 10013.
(Continued and to be signed on reverse side)
<PAGE>
Please Date, Sign And Mail Your
Proxy Card Back As Soon As Possible!
Special Meeting Of Shareholders
NETCREATIONS, INC.
FEBRUARY [__], 2001
Please Detach And Mail In The Envelope Provided
A [x] Please Mark Your
Vote As In This
Example.
1. ADOPTION OF THE MERGER AGREEMENT AMONG SEAT PAGINE GIALLE S.p.A., SOGERIM,
SOCIETE ANONYME, NICKEL ACQUISITION CORP. AND NETCREATIONS, INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. GRANTING THE BOARD OF DIRECTORS DISCRETIONARY AUTHORITY TO ADJOURN THE
SPECIAL MEETING TO SOLICIT ADDITIONAL VOTES FOR ADOPTION OF THE MERGER
AGREEMENT
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING
[ ] FOR [ ] AGAINST [ ] ABSTAIN
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1,
PROPOSAL 2 AND PROPOSAL 3.
-------------------------------
Name(s) of Shareholder
-------------------------------
Signature(s) of Shareholder
-------------------------------
Date
NOTE: Please date and sign exactly as your name appears on the envelope in which
this material was mailed. If shares are held jointly, each shareholder should
sign. Executors, administrators, trustees, etc. should use full title and, if
more than one, all should sign. If the shareholder is a corporation, please sign
full corporate name by an authorized officer. If the shareholder is a
partnership, please sign full partnership name by an authorized person.
