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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 7, 1999
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Date of report (Date of earliest event reported)
NewsEdge Corporation
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(Exact name of Registrant as specified in its charter)
Delaware 0-26540 04-3016142
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(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification No.)
80 Blanchard Road
Burlington, Massachusetts 01803
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(Address of Principal Executive Offices)
(781) 229-3000
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Registrant's telephone number, including area code
Exhibit Index Located on Page 3
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Item 5. Other Events
On December 7, 1999, NewsEdge Corporation ("NewsEdge"), a Delaware
corporation, RoweCom Inc., a Delaware corporation ("RoweCom"), and RoweCom
Merger Corporation, a Delaware corporation and wholly-owned subsidiary of
RoweCom ("Merger Sub") entered into an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement"), providing for the merger (the "Merger")
of Merger Sub with and into NewsEdge, after which the separate corporate
existence of Merger Sub shall cease and NewsEdge shall continue as the surviving
corporation and a wholly-owned subsidiary of RoweCom.
Pursuant to the Merger Agreement, at the effective time of the Merger (the
"Effective Time"), each share of common stock of NewsEdge ("NewsEdge Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than treasury shares) will be converted automatically into the right to receive
0.26 of a share of the common stock of RoweCom ("RoweCom Common Stock"). The
consummation of the Merger is subject to various conditions precedent, including
approval of the stockholders of both RoweCom and NewsEdge and expiration or
early termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act and regulations promulgated thereunder, as well as
other customary conditions. The Merger Agreement is attached hereto as Exhibit
2.1 and is hereby incorporated by reference.
Donald L. McLagan, NewsEdge's Chairman, Chief Executive Officer, and
Director and holder of approximately 12.3% of the outstanding NewsEdge Common
Stock, and Dr. Richard Rowe, Chief Executive Officer and Chairman of the Board
RoweCom and holder of approximately 15.49% of the outstanding RoweCom Common
Stock have agreed to vote in favor of the approval of the Merger Agreement
pursuant to the terms of a voting agreement. The voting agreement is attached
hereto as Exhibit 99.2 and is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
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Exhibit No. Description
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2.1 Agreement and Plan of Merger and Reorganization dated December 7,
1999, by and among NewsEdge Corporation, RoweCom Inc., and
RoweCom Merger Corporation.
99.1 Joint Press Release of NewsEdge Corporation and RoweCom Inc.,
dated December 7, 1999.
99.2 Voting Agreement dated December 7, 1999, by and among NewsEdge
Corporation, RoweCom Inc., RoweCom Merger Corporation, Donald L.
McLagan and Dr. Richard Rowe.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEWSEDGE CORPORATION
Date: December 17, 1999 By: /s/ Donald L. McLagan
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Donald L. McLagan
Chairman and Chief
Executive Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Agreement and Plan of Merger and Reorganization dated December 7,
1999, by and among NewsEdge Corporation, RoweCom Inc., and
RoweCom Merger Corporation.
99.1 Joint Press Release of NewsEdge Corporation and RoweCom Inc.,
dated December 7, 1999.
99.2 Voting Agreement dated December 7, 1999, by and among NewsEdge
Corporation, RoweCom Inc., RoweCom Merger Corporation, Donald L.
McLagan and Dr. Richard Rowe.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This Agreement and Plan of Merger and Reorganization (this "Agreement")
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dated as of December 7, 1999, is by and among RoweCom Inc. ("RoweCom"), a
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Delaware corporation; RoweCom Merger Corporation ("Merger Sub"), a Delaware
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corporation that is a wholly owned subsidiary of RoweCom; and NewsEdge
Corporation ("NewsEdge"), a Delaware corporation.
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Whereas, the parties desire that Merger Sub be merged with and into
NewsEdge in accordance with this Agreement (the "Merger"); and
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Whereas, for Federal income tax purposes, the parties intend and expect
that the Merger qualify as a reorganization under the provisions of Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"); and
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The parties hereby agree as follows:
(Certain terms used in this Agreement are defined in Section 13.)
1. Closing. Subject to the other provisions of this Agreement, the
Closing will be held as soon as is reasonably practicable following satisfaction
or waiver of the conditions set forth in Sections 9 through 11.
At the Closing, NewsEdge will execute the Merger Certificate and file it
with the Delaware Secretary of State. The Merger will be effective upon filing
of the Merger Certificate (the "Effective Time").
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2. Effect of Merger. At the Effective Time, automatically and without
further action:
2.1. Surviving Corporation. Merger Sub will be merged with and into
NewsEdge and the separate existence of Merger Sub will cease. NewsEdge will
continue in existence as the surviving corporation in the Merger (the "Surviving
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Corporation"). The effects of the Merger will be as provided in this Agreement
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and the applicable provisions of the DGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of NewsEdge will vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of NewsEdge will
become the debts, liabilities, obligations and duties of the Surviving
Corporation.
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2.2. Certificate of Incorporation. NewsEdge's certificate of incorporation
will be amended and restated to read in its entirety as provided in the Merger
Certificate (including, if RoweCom so elects, to change its corporate name to a
name selected by RoweCom) and as so amended and restated will be the certificate
of incorporation of the Surviving Corporation.
2.3. By-Laws. NewsEdge's by-laws will be amended and restated to read in
their entirety as did the by-laws of Merger Sub in effect immediately before the
Effective Time, and as so amended and restated will be the by-laws of the
Surviving Corporation.
2.4. Directors and Officers. The initial officers and members of the Board
of Directors of the Surviving Corporation will consist of those persons named as
such in the Merger Certificate.
2.5. Conversion of NewsEdge Stock.
(a) NewsEdge Stock. Each share of NewsEdge Stock that is issued and
outstanding immediately before the Effective Time (other than any shares held
directly or indirectly by RoweCom or NewsEdge or any of their respective
Subsidiaries) will be converted into and become 0.26 shares (such number of
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shares, as adjusted pursuant to Section 2.5(b), the "Exchange Ratio") of RoweCom
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Stock, subject to adjustment in accordance with Section 2.5(b) and to the
payment of cash adjustments in lieu of the issuance of fractional shares in
accordance with Section 3.5.
After the Effective Time, holders of NewsEdge Stock will cease to be, and
will have no rights as, stockholders of NewsEdge, and will have only the rights
to receive shares of RoweCom Stock into which such shares have been converted
and payments in lieu of fractional shares, in accordance with this Agreement.
(b) Adjustment of Exchange Ratio. In the event that, subsequent to the
date of this Agreement but before the Effective Time, the shares of RoweCom
Stock or NewsEdge Stock issued and outstanding as of the date of this Agreement
are changed into or exchanged for a different number or kind of shares or
securities through reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other similar changes in
RoweCom's or NewsEdge's capitalization, then an appropriate and proportionate
adjustment will be made to the Exchange Ratio so that each holder of NewsEdge
Stock immediately before the Effective Time will receive pursuant to this
Section 2.5: (i) in the event of
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any such change with respect to NewsEdge Stock, that number of shares of RoweCom
Stock that such holder would have received if such change had never occurred and
(ii) in the event of any such change with respect to RoweCom Stock, that number
of shares of RoweCom Stock that such holder would have received as a result of
such change if such change had occurred immediately after the Effective Time
(and such holders were treated for purposes of such change as holders of RoweCom
Stock).
2.6. Cancellation of Treasury Stock. Each share of NewsEdge Stock held
directly or indirectly by RoweCom or NewsEdge or any of their respective
Subsidiaries will be canceled and will cease to exist, and no payment will be
made with respect thereto.
2.7. Conversion of Merger Sub's Shares. Each share of Merger Sub Stock
that was issued and outstanding immediately before the Effective Time will be
converted into and become one share of the common stock of the Surviving
Corporation.
3. Procedures.
3.1. Termination of Rights; Certificates. After the Effective Time, stock
certificates ("NewsEdge Stock Certificates") representing shares of NewsEdge
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Stock that have been converted into shares of RoweCom Stock in the Merger will
represent only such shares of RoweCom Stock.
3.2. Exchange of Certificates. As promptly as practicable after the
Effective Time, RoweCom or its transfer agent will send to each NewsEdge
stockholder of record transmittal materials for use in exchanging NewsEdge Stock
Certificates for certificates for the shares of RoweCom Stock into which such
shares of NewsEdge Stock have been converted. Upon surrender of a NewsEdge
Stock Certificate to RoweCom or its transfer agent, as the case may be, together
with a duly executed letter of transmittal and any other reasonably required
documents, the holder of that NewsEdge Stock Certificate will be entitled to
receive, in exchange therefor, a certificate for the number of shares of RoweCom
Stock to which such holder is entitled, plus cash in lieu of any fractional
shares in accordance with Section 3.5, and that NewsEdge Stock Certificate will
be canceled.
Shares of RoweCom Stock that are issued upon conversion of shares of
NewsEdge Stock owned by any Rule 145 Affiliate will be subject to the transfer
restrictions imposed by SEC Rule 145. Each certificate representing such shares
of RoweCom Stock will bear an appropriate restrictive legend referring to such
transfer restrictions; and RoweCom may
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also place appropriate "stop-transfer" instructions with its transfer agent to
ensure compliance with such restrictions.
3.3. Distributions. No dividend or other distribution payable after the
Effective Time with respect to RoweCom Stock will be paid to the holder of any
unsurrendered NewsEdge Stock Certificate until the holder surrenders that
NewsEdge Stock Certificate, at which time such holder will receive all dividends
and distributions, without interest thereon, previously payable to but withheld
from such holder in accordance with this section.
3.4. No Transfers. After the Effective Time, no transfers of shares of
NewsEdge Stock will be made in the stock transfer books of NewsEdge. If, after
the Effective Time, NewsEdge Stock Certificates are presented (for transfer or
otherwise) to the Surviving Corporation or its transfer agent for NewsEdge
Stock, they will be canceled and exchanged for shares of RoweCom Stock in
accordance with this Agreement.
3.5. No Fractional Shares. In lieu of the issuance of fractional shares of
RoweCom Stock, cash adjustments will be paid (without interest) to the
Stockholders in respect of any fractional share of RoweCom Stock that would
otherwise be issuable to them and the amount of such cash adjustments will be
determined by multiplying each relevant holder's fractional interest by $46
(such amount to be proportionately adjusted to reflect stock splits, stock
dividends, reverse stock splits, and other recapitalizations, reorganizations,
and similar events affecting RoweCom Stock and occurring after the date of this
Agreement). For purposes of determining whether, and in what amounts, a
particular Stockholder is entitled to receive cash adjustments under this
section, shares held of record by such holder and represented by multiple
NewsEdge Stock Certificates will be aggregated.
3.6. Abandoned Property. Neither RoweCom nor NewsEdge nor any other person
will be liable to any holder or former holder of shares of NewsEdge Stock for
any shares, or any dividends or other distributions with respect thereto,
properly delivered to a public official pursuant to applicable abandoned
property, escheat, or similar laws.
3.7. Lost Certificates, Etc. In the event that any NewsEdge Stock
Certificate has been lost, stolen, or destroyed, then upon receipt of
appropriate evidence as to the ownership, loss, theft, or destruction of the
NewsEdge Stock Certificate and of a customary indemnification agreement, RoweCom
or its transfer agent will issue in exchange for the lost, stolen, or
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destroyed NewsEdge Stock Certificate shares of RoweCom Stock and cash in lieu of
any fractional shares in accordance with this Agreement.
NewsEdge Stock.
4.1 NewsEdge Stock Options and Warrants. After the Effective Time, each
option (a "NewsEdge Option") or warrant (a "NewsEdge Warrant") to purchase
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shares of NewsEdge Stock that is outstanding immediately before the Effective
Time and listed in Section 5.4 of the attached Disclosure Schedule (each, a
"NewsEdge Stock Option") will cease to entitle its holder to acquire shares of
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NewsEdge Stock, and instead such holder will be entitled, in accordance with the
terms of such NewsEdge Stock Option, to purchase from RoweCom up to the greatest
number of whole shares of RoweCom Stock that is less than the product of (i) the
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number of shares of NewsEdge Stock subject to such NewsEdge Stock Option,
multiplied by (ii) the Exchange Ratio; at a price per share of RoweCom Stock
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equal to the quotient of (x) the exercise price per share of NewsEdge Stock
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provided for in such NewsEdge Stock Option, divided by (z) the Exchange Ratio.
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No scrip or fractional share interests will be issued in connection with
the exercise of any NewsEdge Stock Option.
Except as provided above, each NewsEdge Stock Option will remain subject
after the Effective Time to the same terms and conditions (including those with
respect to dates on which and the proportionate extent to which the NewsEdge
Stock Option may be exercised) as were applicable to the NewsEdge Stock Option
immediately before the Effective Time.
The adjustments provided herein with respect to any NewsEdge Stock Options
that are "incentive stock options" within the meaning of Section 422 of the Code
will be and are intended to be effected in a manner which is consistent with
Section 424(a) of the Code.
As promptly as practicable, but in any event within five business days,
following the Effective Time, RoweCom will prepare and file with the SEC a
registration statement on Form S-8 covering the issuance of all of the shares of
RoweCom Stock issuable upon exercise of NewsEdge Options. RoweCom will use its
best reasonable efforts to cause this registration statement to remain effective
for so long as any NewsEdge Options remain outstanding.
RoweCom will reserve sufficient shares of RoweCom Stock for issuance under
this Section 4.1 hereof.
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4.2 NewsEdge Employee Stock Purchase Plan.
(a) NewsEdge will use all reasonable efforts, to the extent permitted by
law and the provisions of the NewsEdge Employee Stock Purchase Plan (including
the amendment provision thereof) to cause the exercise date (as such term is
used in the NewsEdge Employee Stock Purchase Plan) applicable to the then
current offering period (as such term is used in the NewsEdge Employee Stock
Purchase Plan) to be the last trading day on which the shares of NewsEdge Common
Stock are traded on Nasdaq immediately prior to the Effective Time (the "Final
NewsEdge Purchase Date"); provided, that, such change in the Final NewsEdge
Purchase Date will be conditioned upon the consummation of the Merger. On the
Final NewsEdge Purchase Date, NewsEdge will apply the funds credited as of such
date under the NewsEdge Stock Purchase Plan within each participant's payroll
withholdings account to the purchase of whole shares of NewsEdge Common Stock in
accordance with the terms of the NewsEdge Employee Stock Purchase Plan. The
cost to each participant in the NewsEdge Stock Purchase Plan for shares of
NewsEdge Common Stock will be the lower of 85% of the average market price of
NewsEdge Common Stock on Nasdaq on (i) the first day of the then current
offering period or (ii) the Final NewsEdge Purchase Date, in either event
rounded up to the nearest quarter.
(b) RoweCom will use all reasonable efforts to amend RoweCom's Employee
Stock Purchase Plan so that Employees of NewsEdge as of the Effective Time will
be permitted to participate in RoweCom's Employee Stock Purchase Plan commencing
on the first enrollment date following the Effective Time, subject to compliance
with the eligibility provisions of such plan (with employees receiving credit,
for purposes of such eligibility provisions, for service with NewsEdge).
(c) It is the intention of the parties that notwithstanding anything
contained in this Agreement, the exercise price, the number of shares
purchasable and the terms and conditions applicable to any adjustments to the
NewsEdge Employee Stock Purchase Plan and any employee stock purchase plan
maintained by RoweCom will be determined so as to comply with Sections 423 and
424 of the Code and the regulations promulgated thereunder (specifically the
provisions of Code Section 424(a) and 424(h)(3)(A) and Treasury Regulation
Section 1.425-1) such that the arrangement implemented under the NewsEdge
Employee Stock Purchase Plan by reason of the Merger not constitute a
"modification."
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(d) RoweCom will reserve sufficient shares of RoweCom Stock for issuance
under this Section 4.2.
5. Representations and Warranties.
Each of RoweCom and NewsEdge hereby represents and warrants to the other as
follows, subject in each case to such exceptions as are specifically
contemplated by this Agreement or as are set forth in (i) its attached
Disclosure Schedule, (ii) in its SEC Reports, or (iii) except as provided in the
final sentence of Section 7.11, the disclosure supplements contemplated by that
section.
Except as provided in the final sentence of Section 7.11, each exception
set forth in a party's Disclosure Schedule or any such disclosure supplement of
that party will be deemed to qualify each representation and warranty of that
party set forth in this Agreement (i) that is specifically identified (by cross-
reference or otherwise) in its Disclosure Schedule or disclosure supplement as
being qualified by such exception, or (ii) with respect to which the relevance
of such exception is apparent on the face of the disclosure of such exception
set forth in its Disclosure Schedule or disclosure supplement, provided, in
either case, that the relevant facts are set forth in reasonable detail in its
Disclosure Schedule or disclosure supplement.
5.1. Incorporation; Authority. It is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted. It has delivered to
the other copies of its certificate of incorporation and by-laws, in each case
with all amendments thereto and as in full force and effect.
5.2. Authorization and Enforceability. It has all requisite power and full
legal right and authority (including due approval of its Board of Directors) to
enter into this Agreement, to perform all of its agreements and obligations
hereunder, and (subject to its Stockholders' Approval) to consummate the Merger
and the other transactions contemplated hereby.
This Agreement has been duly executed and delivered by it and constitutes
its legal, valid, and binding obligation, enforceable against it in accordance
with the terms hereof, except as enforceability may be subject to the effect of
any applicable bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization, marshaling, or other similar laws or rules of
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law affecting creditors' rights and remedies generally, and to general
principles of equity.
5.3. Governmental and Other Third-Party Consents, Non-Contravention, Etc.
Except for its Stockholders' Approval and the filing of the Merger Certificate
and the S-4, and except as required under the HSR Act, the Securities Act, and
the Exchange Act no consent, approval, or authorization of or registration,
designation, declaration, or filing with any governmental authority, federal or
other, or any other person, is required on its part in connection with the
execution, delivery, and performance of this Agreement or its consummation of
the Merger and the other transactions contemplated hereby.
Its execution, delivery, and performance of its obligations under this
Agreement and (subject to compliance with the HSR Act and to its Stockholders'
Approval) its consummation of the Merger and the other transactions contemplated
hereby will not violate any (i) provision of its certificate of incorporation
or by-laws, (ii) contract, or (iii) law.
5.4. Capitalization.
(a) Its authorized and outstanding capital stock and other securities are
as set forth in Section 5.4 of its Disclosure Schedule. All of the outstanding
shares of its capital stock are duly authorized, validly issued, fully paid, and
non-assessable, and were issued in compliance with all applicable laws,
including securities laws, and all applicable preemptive or similar rights.
(b) Other than as set forth in Section 5.4 of its Disclosure Schedule,
there are no contracts to which it is a party or by which it is bound to
purchase or sell any shares of its capital stock or other securities, and no
convertible or exchangeable securities, options, warrants, or other rights to
acquire from it any such shares or securities.
(c) It has obtained an executed Voting Agreement from its Chief Executive
Officer and delivered a copy of that Voting Agreements to the other. Its Chief
Executive Officer owns (of record, and to its knowledge, beneficially) the
numbers of shares of its capital stock indicated in Section 5.4 of its
Disclosure Schedule.
(d) Other than the Voting Agreements, there are no voting trusts, proxies,
or other contracts (contingent or otherwise) to which it is a party, by which it
is bound, or of which it is aware, with respect to the voting of any shares of
its capital stock.
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(e) The affirmative vote of the holders of a majority of the shares of its
common stock entitled to vote at its stockholder meeting to be held in
accordance with Section 7.2 (its "Stockholders' Approval") is the only vote or
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consent of the holders of any class or series of its capital stock necessary to
approve the Merger and the other transactions contemplated by this Agreement.
(f) None of its stockholders will have any appraisal or dissenters' rights
by reason of the Merger or the other transactions contemplated hereby.
5.5. Subsidiaries. Section 5.5 of its Disclosure Schedule lists each of
its Subsidiaries; and except for those listed Subsidiaries, it does not own any
legal and/or beneficial interests in or to any other business enterprise or
other person. It owns all of the issued and outstanding capital stock of each
of its Subsidiaries.
5.6. Qualification. Each of it and each of its Subsidiaries is duly
qualified and in corporate good standing as a foreign corporation in all
jurisdictions in which the character of its or such Subsidiary's owned or leased
properties or the nature of its or such Subsidiary's activities makes such
qualification necessary, except for such failures to be so qualified or in good
standing as would not, either individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on it.
5.7. SEC Statements, Reports, and Documents. Since its IPO Date, it has
timely filed with the SEC all forms, reports, registration statements, and
documents required to be filed by it.
As of their respective dates, its SEC Reports complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations promulgated thereunder, and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
its SEC Reports is required to be amended or supplemented as of the date hereof.
Its financial statements (including any related notes) included in its SEC
Reports were prepared in conformity with generally accepted accounting
principles applied on a consistent basis (except as otherwise stated in the
financial statements or, in the case of audited statements, the
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related report of its independent certified public accountants) and present
fairly in all material respects its and its Subsidiaries' consolidated financial
position, results of operations, changes in stockholders' equity, and cash flows
as of the dates and for the periods indicated; subject, in the case of unaudited
interim consolidated financial statements, to condensation, the absence of
footnote disclosure, and normal, recurring end-of-period adjustments, the effect
of which is not material.
Except to the extent (a) reflected or reserved against in its consolidated
balance sheet as of September 30, 1999, included in its SEC Reports (its "Most
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Recent Balance Sheet"), or (b) incurred with persons other than any of its
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Affiliates in the ordinary course of business after the date of such balance
sheet, it does not have any liabilities or obligations of any nature, whether
accrued, absolute, contingent, or otherwise (including liabilities, as guarantor
or otherwise, in respect of obligations of others) that would be required to be
reflected or reserved against in a balance sheet prepared in accordance with
generally accepted accounting principles or referred to in the notes thereto.
5.8. Absence of Certain Changes. Since September 30, 1999, there has not
been any: (i) material change in its or any of its Subsidiaries' assets,
liabilities, revenues, expenses, income, or business or its or any of its
Subsidiaries' relationships with its or their suppliers, customers, or lessors,
other than changes that were both in the ordinary course of business and have
not caused, either in any case or in the aggregate, a Material Adverse Effect on
it; (ii) acquisition or disposition by it or any of its Subsidiaries of any
material asset or property other than in the ordinary course of business; (iii)
declaration, setting aside, or payment of any dividend or any other
distributions in respect of any shares of its or any of its Subsidiaries capital
stock; (iv) issuance of any shares of its or any of its Subsidiaries' capital
stock (other than issuances of shares of its common stock upon exercise of stock
options granted by it to its or its Subsidiaries' employees, directors, and/or
contractors for compensatory purposes) or any direct or indirect redemption,
purchase, or other acquisition by it or its Subsidiaries of the capital stock of
any of them; (v) bonus payments or arrangements made to or with, or increase in
the compensation, pension, or other benefits payable or to become payable to,
any of its or its Subsidiaries' officers or key employees or consultants, except
in the ordinary course of business consistent with past practice; (vi)
forgiveness or cancellation by it or its Subsidiaries of any debts, or claims or
waivers by it or its Subsidiaries of any rights, in each case having a value of
more than $50,000 in any single instance and/or more than $250,000 in the
aggregate, and in each case other than compromises of accounts receivable in the
ordinary course
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of business; (vii) entry by it or any of its Subsidiaries into any material
transaction with any Affiliate; (viii) incurrence by it or any of its
Subsidiaries of any material obligations or liabilities, whether absolute,
accrued, contingent or otherwise (including liabilities as guarantor or
otherwise with respect to obligations of others), other than obligations and
liabilities incurred in the ordinary course of business with persons other than
Affiliates; (ix) incurrence or imposition of any material Lien on any of its
assets, tangible or intangible; or (x) discharge or satisfaction by it of any
Lien or payment by it of any obligation or liability (fixed or contingent) other
than (A) current liabilities included in its Most Recent Balance Sheet, (B)
current liabilities to persons other than Affiliates incurred since its Most
Recent Balance Sheet Date in the ordinary course of business, and (C) current
liabilities incurred in connection with the this Agreement and the transactions
contemplated hereby.
5.9. Properties and Assets. It and its Subsidiaries have good and
marketable title or leasehold title, as the case may be, to all of their
respective assets and properties that they purport to own or lease, including
all those reflected in its Most Recent Balance Sheet (except for properties or
assets sold, consumed, or otherwise disposed of in the ordinary course of
business since the Most Recent Balance Sheet Date) and all those acquired since
the date of the Most Recent Balance Sheet; all free and clear of material Liens.
All such properties and assets are in good condition and repair, reasonable
wear-and-tear excepted, and are adequate to carry on the business of it and its
Subsidiaries as currently conducted.
5.10. Intellectual Properties.
(a) It and its Subsidiaries own, or have the right to use, sell or
license all intellectual property utilized in their respective businesses as
presently conducted (such intellectual property and the rights thereto are
collectively referred to herein as the "IP Rights"), except for any failure to
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own or have the right to use, sell or license that would not have a Material
Adverse Effect on it.
(b) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
breach of any instrument or agreement governing any of its IP Rights (the "IP
--
Rights Agreements"), will not cause the forfeiture or termination or give rise
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to a right of forfeiture or termination of any of its IP Rights or impair its
right or the right of its Subsidiaries or the Surviving Corporation to use, sell
or license any of its IP Rights or portion thereof, except for the occurrence of
any such breach, forfeiture, termination or
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impairment that would not individually or in the aggregate, result in a Material
Adverse Effect on it.
(c) (i) neither the manufacture, marketing, license, sale or intended
use of any product or technology currently licensed or sold or under development
by it or any of its Subsidiaries violates any license or agreement between it or
any of its Subsidiaries and any third party or, to its knowledge infringes any
intellectual property right of any other party; and (ii) there is no pending or,
to its knowledge, threatened claim or litigation contesting the validity,
ownership or right to use, sell, license or dispose of any of its IP Rights, nor
has it received any written notice asserting that any of its IP Rights or the
proposed use, sale, license or disposition thereof conflicts or will conflict
with the rights of any other party, except, with respect to clauses (i) and
(ii), for any violations, infringements, claims or litigation that would not
have a Material Adverse Effect on it.
(d) It has taken reasonable and practicable steps designed to safeguard
and maintain the secrecy and confidentiality of, and its proprietary rights in,
all of its IP Rights.
5.11. Indebtedness. At the date of this Agreement, neither it nor its
Subsidiaries has any Indebtedness outstanding except as set forth in its SEC
Reports or in Section 5.11 of its Disclosure Schedule. It is not in default or
material breach with respect to any outstanding Indebtedness or any related
contract, and no such Indebtedness or related contract purports to limit the
issuance of any securities by it or its Subsidiaries, or (except for customary
representations and warranties and affirmative and negative covenants, and
except as set forth in Section 5.11 of its Disclosure Schedule) the operation of
its or its Subsidiaries businesses. Copies of all contracts (including all
amendments, supplements, waivers, and consents) relating to any Indebtedness of
it or its Subsidiaries have been furnished or made available to the other.
5.12. Absence of Undisclosed Liabilities. Except to the extent (a)
reflected or reserved against in the Most Recent Balance Sheet, or (b) described
in Section 5.12 of its Disclosure Schedule, neither it nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether accrued,
absolute, contingent, or otherwise (including liabilities, as guarantor or
otherwise, in respect of obligations of others) that would be required to be
reflected or reserved against in a balance sheet prepared in accordance with
generally accepted accounting principles or referred to in the notes thereto.
<PAGE>
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5.13. Taxes.
(a) Filing of Tax Returns and Payment of Taxes. It and its Subsidiaries
have timely filed all material Tax Returns required to be filed by them, each
such Tax Return has been prepared in compliance with all applicable laws and
regulations, and all such Tax Returns are true and accurate in all material
respects. All Taxes due and payable by it and its Subsidiaries have been paid,
and neither it nor its Subsidiaries will be liable for any additional Taxes in
respect of any taxable period ending before the Closing Date in an amount that
exceeds the corresponding reserve therefor, if any, reflected in their
accounting records.
(b) Deficiencies. No deficiency or proposed adjustment in respect of
Taxes that has not been settled or otherwise resolved has been by written notice
asserted or assessed by any taxing authority against it or its Subsidiaries.
(c) Liens. There are no Liens for Taxes (other than current Taxes not
yet due and payable) on the assets of it or its Subsidiaries.
(d) Extensions to Statute of Limitations for Assessment of Taxes.
Neither it nor its Subsidiaries has consented to extend the time in which any
Tax may be assessed or collected by any taxing authority.
(e) Extensions of the Time for Filing Tax Returns. Neither it nor any of
its Subsidiaries has requested or been granted an extension of the time for
filing any Tax Return to a date on or after the Closing Date.
(f) Pending Proceedings. There is no action, suit, taxing authority
proceeding, or audit with respect to any Tax now in progress, pending, or to the
best of its knowledge, threatened, against or with respect to (i) it or its
Subsidiaries, or (ii) any Affiliated Group with respect to a taxable period
during which it or any of its Subsidiaries was a member of such Affiliated
Group.
(g) No Failures to File Tax Returns. No claim has ever been made by a
taxing authority in a jurisdiction where it or any of its Subsidiaries does not
pay Tax or file Tax Returns that it or such Subsidiary is or may be subject to
Taxes assessed by such jurisdiction.
<PAGE>
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(h) Membership in Affiliated Groups, Etc. Neither it nor its
Subsidiaries has ever been a member of any Affiliated Group, or filed or been
included in a combined, consolidated, or unitary Tax Return (other than one of
which it was the common parent).
(i) Tax Sharing, Allocation, or Indemnity Agreements. Neither it nor
its Subsidiaries is a party to or bound by any Tax sharing or allocation
agreement or has any current or potential contractual obligation to indemnify
any other person with respect to Taxes.
(j) Withholding Taxes. It and its Subsidiaries have withheld and paid
all Taxes required to have been withheld and paid by them in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other person.
(k) Section 341(f) Consent. Neither it nor its Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations.
(l) Parachute Payments. Prior to entering into this Agreement, neither
it nor any of its Subsidiaries made any payments, was obligated to make any
payments, or was a party to any contract that could obligate any of them to make
any payments that will not be deductible under Sections 162(m) or 280G of the
Code.
(m) Tax Reorganization. Neither it nor its Subsidiaries has taken or
agreed to take any action or knows of any fact, agreement, plan, or other
circumstance that may prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
5.14. Employee Benefit Plans.
(a) Except as described in Section 5.14(a) of its Disclosure Schedule,
neither it nor its Subsidiaries now maintains or contributes to, or has any
liability in respect of, any pension, profit-sharing, deferred compensation,
bonus, stock option, share appreciation right, severance, group or individual
health, dental, medical, life insurance, survivor benefit, or similar plan,
policy, or arrangement, whether formal or informal, for the benefit of any
director, officer, consultant or employee, whether active or terminated, of any
of them. (Each of the arrangements set forth in Section 5.14(a) of its
Disclosure Schedule is hereinafter referred to as an "Employee Benefit Plan.")
---------------------
(b) It has delivered to the other copies of each Employee Benefit Plan,
and with respect to each such Plan (i) any associated trust, custodial,
insurance, or service agreements, (ii) any annual report, actuarial report, or
disclosure materials (including specifically any summary plan descriptions)
<PAGE>
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submitted to any governmental agency or distributed to participants or
beneficiaries thereunder in the current or any of the three preceding calendar
years, and (iii) the most recently received Internal Revenue Service ("IRS")
---
determination letters and any governmental advisory opinions or rulings.
(c) To the best of its knowledge, each Employee Benefit Plan is and has
been maintained and operated in substantial compliance with the terms of such
Plan and with the requirements prescribed (whether as a matter of substantive
law or as necessary to secure favorable tax treatment) by any and all laws,
including but not limited to ERISA and the Code and applicable to such Plan.
Each Employee Benefit Plan that is intended to qualify under Section 401(a) of
the Code and each trust forming part of an Employee Benefit Plan which is
intended to qualify under Section 501(c)(9) of the Code is specifically so
identified in Section 5.14(a) of its Disclosure Schedule and has been determined
by the IRS to be so qualified, and to the best of its knowledge, nothing has
occurred that has resulted or is likely to result in the revocation of such
determination as to such Plan or trust.
(d) (i) There is no pending, or to the best of its knowledge,
threatened, legal action, proceeding, or investigation, other than routine
claims for benefits, concerning any Employee Benefit Plan, or to the best
of its knowledge, any fiduciary or service provider thereof, and to the
best of its knowledge, there is no basis for any such legal action,
proceeding, or investigation.
(ii) No liability (contingent or otherwise) to the PBGC or any
multi-employer plan has been incurred by it or its Subsidiaries or any of
their respective ERISA affiliates (other than insurance premiums satisfied
in due course).
(iii) To the best of its knowledge, no Employee Benefit Plan nor any
party in interest with respect thereof, has engaged in a prohibited
transaction that could subject it or its Subsidiaries directly or
indirectly to liability under Section 409 or 502(i) of ERISA or Section
4975 of the Code.
(iv) To the best of its knowledge, no communication, report, or
disclosure has been made that, at the time made, did not reflect accurately
in all material respects the terms and operations of any Employee Benefit
Plan.
<PAGE>
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(v) No Employee Benefit Plan provides welfare benefits subsequent
to termination of employment to employees or their beneficiaries (except to
the extent required by applicable state insurance laws and Title I, Part 6
of ERISA), other than (A) coverage mandated by applicable law, (B) benefits
the full cost of which is borne by the current or former employees (or
their beneficiaries), and (C) benefits that have already been satisfied in
full.
(e) With respect to each Employee Benefit Plan for which a separate fund
of assets is or is required to be maintained, full payment has been made of all
amounts that it or its Subsidiaries are required, under the terms of each such
Plan, to have paid as contributions to that Plan. The current value of the
assets of each such Employee Benefit Plan, as of the end of the most recently
ended plan year of that Plan, exceeded the current value of all accrued benefits
under that Plan.
(f) Except as provided in Section 5.14(f) of the Disclosure Schedule,
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not result in any payment (whether of severance pay or
otherwise) becoming due from any Employee Benefit Plan to any current or former
director, officer, consultant, or employee of it or its Subsidiaries or result
in the vesting, acceleration of payment, or increases in the amount of any
benefit payable to or in respect of any such current or former director,
officer, consultant, or employee.
(g) No Employee Benefit Plan is a multi-employer plan or subject to
Section 412 of the Code or Title IV of ERISA.
(h) For purposes of this Section 5.14, "multi-employer plan," "party in
------------------- --------
interest," "current value," "accrued benefit," "reportable event," and "benefit
- -------- ------------- --------------- ---------------- -------
liability" have the same meaning assigned such terms under Sections 3, 4043(b)
- ---------
or 4001(a) of ERISA, and "ERISA affiliate" means any entity that under Section
---------------
414 of the Code is treated as a single employer with the person making the
relevant representation.
5.15. Safety and Environmental Matters.
(a) None of the plants, offices, or properties in or on which it or its
Subsidiaries carries on business nor any of the activities carried on by it or
its Subsidiaries are in violation of any zoning, health, or safety law,
including the Occupational Safety and Health Act of 1970, as amended, excluding
only such violations as will not, either individually or in the aggregate, have
a Material Adverse Effect on it.
<PAGE>
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(b) Neither it nor its Subsidiaries, nor to the best of its knowledge,
any operator of any real property presently or formerly owned, leased, or
operated by it or its Subsidiaries is in violation or alleged violation of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including the Environmental Laws, excluding only such
violations as will not, either individually or in the aggregate, have a Material
Adverse Effect on it.
(c) Neither it nor any of its Subsidiaries has received notice from any
third party, including any federal, state, foreign, or local governmental
authority, that (i) any of them has been identified by the EPA as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) any Hazardous
Substance that it or any of its Subsidiaries has generated, transported,
handled, used, or disposed of has been found at any site at which a federal,
state, foreign, or local agency or other third party has conducted or has
ordered that it or its Subsidiaries conduct a remedial investigation, removal,
or other response action pursuant to any Environmental Law; or (iii) it or any
of its Subsidiaries is or will be a named party to any claim, action, cause of
action, complaint (contingent or otherwise), or legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses, or damages of any kind whatsoever in connection with the release of any
Hazardous Substance.
(d) (i) No portion of any real property presently or formerly owned,
leased, or operated by it or any of its Subsidiaries has been used by it or any
of its Subsidiaries, or to the best of its knowledge, by any other person, for
the handling, usage, manufacturing, processing, storage, or disposal of any
Hazardous Substance except in accordance in all material respects with
applicable Environmental Laws; and no underground tank or other underground
storage receptacle for any Hazardous Substance is located on any real property
presently owned, leased, or operated by it or any of its Subsidiaries, or to the
best of its knowledge, any real property formerly owned, leased, or operated by
it or any of its Subsidiaries; (ii) in the course of the activities conducted by
it or any of its Subsidiaries, and to the best of its knowledge, those of any
other operators of any real property presently or formerly owned, leased, or
operated by it or any of its Subsidiaries, no Hazardous Substance has been
generated, stored, or used on such properties except in accordance with
applicable Environmental Laws; (iii) to the best of its knowledge, there have
been no releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing, or dumping) or
<PAGE>
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threatened releases of any Hazardous Substance on, upon, into, or from any real
property presently or formerly owned, leased, or operated by it or any of its
Subsidiaries; (iv) to the best of its knowledge, there have been no releases on,
upon, from, or into any real property in the vicinity of any real property
presently or formerly owned, leased, or operated by it or any of its
Subsidiaries that, through soil or groundwater contamination, may have come to
be located on, any of the real property presently or formerly owned, leased, or
operated by it or any of its Subsidiaries; and (v) any Hazardous Substance that
have been generated by it or any of its Subsidiaries, or to its knowledge, by
any other person, on any real property presently or formerly owned, leased, or
operated by it or any of its Subsidiaries, has been transported offsite only by
carriers having an identification number issued by the EPA and treated or
disposed of only by treatment or disposal facilities having, to its knowledge,
valid permits as required under applicable Environmental Laws, which
transporters and facilities, to its, have been and are operating in compliance
with such permits and applicable Environmental Laws.
(e) No real property presently owned, leased, or operated by it or any
of its Subsidiaries, and to the best of its knowledge, no real property formerly
owned, leased, or operated by it or any of its Subsidiaries, is subject to any
Environmental Law requiring the performance of any Hazardous Substance site
assessment, the removal or remediation of any Hazardous Substance, the giving of
notice to any governmental agency or other person, or the recording and/or
delivery to any governmental agency or other person of any environmental
disclosure statement or document, by reason of, or as a condition to the
effectiveness of, the Merger or the other transactions contemplated hereby.
5.16. Labor Relations. It and its Subsidiaries are and have been in
compliance in all material respects with all federal and state laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours, and nondiscrimination in employment, and are not and have not been
engaged in any unfair labor practice. There is no charge or proceeding pending,
or to the best of its knowledge, threatened, against it or any of its
Subsidiaries alleging unlawful discrimination in employment practices or unfair
labor practice before any court or agency, including the National Labor
Relations Board. There is no labor strike, dispute, work slow-down, or work
stoppage pending, or to the best of its knowledge, threatened against or
involving it or any of its Subsidiaries. No one has petitioned within the last
five years or is now petitioning for union representation of any of the
employees of it or any of its Subsidiaries. No grievance or arbitration
proceeding arising out of or under any collective
<PAGE>
- 19 -
bargaining agreement is pending against it or any of its Subsidiaries and no
claim therefor has been asserted. Except for employees covered by the collective
bargaining agreements listed in Section 5.16 of its Disclosure Schedule, none of
the employees of it or any of its Subsidiaries is covered by any collective
bargaining agreement, and no collective bargaining agreement is currently being
negotiated by it or any of its Subsidiaries. It has not experienced any work
stoppage or other material labor difficulty during the last five years.
5.17. Litigation. No litigation, arbitration, action, suit, proceeding,
or investigation (whether conducted by any judicial or regulatory body,
arbitrator, or other person) is pending (as evidenced by its or any of its
Subsidiaries' receipt of service of process or other written notice of such
pendency), or to the best of its knowledge, threatened, against it or any of its
Subsidiaries, nor is there any basis therefor known to it.
5.18. Agreements, Contracts and Commissions. Except as set forth in
Section 5.18 of its Disclosure Schedule, neither it nor any of its Subsidiaries
is a party to or is bound by:
(a) any collective bargaining agreements;
(b) any bonus, deferred compensation, incentive compensation, pension,
profit sharing or retirement plans, or any other employee benefit plans or
arrangements;
(c) any employment or consulting agreement contract or commitment with
any officer or director level employee, not terminable by it or any of its
Subsidiaries on thirty (30) days notice without liability, except to the extent
general principles of wrongful termination law may limit it's or any of its
Subsidiaries' ability to terminate employees at will;
(d) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which all will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(e) any agreement of indemnification or guaranty not entered into in the
ordinary course of business other than indemnification agreements between it or
any of its Subsidiaries and any of its officers or directors;
<PAGE>
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(f) any agreement, contract or commitment containing any covenant
limiting the freedom of it or any of its Subsidiaries to engage in any line of
business or compete with any person;
(g) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $100,000 and not
cancelable without penalty;
(h) any agreement, contract or commitment currently in force relating to
the disposition or acquisition of assets not in the ordinary course of business
or any ownership interest in any corporation, partnership, joint venture or
other business enterprise;
(i) any mortgage, indenture, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of money
or extension of credit;
(j) any joint marketing or development agreement;
(k) any distribution agreement (identifying any that contain exclusivity
provisions);
(l) any other agreement, contract or commitment (excluding real and
personal property leases) which involve payment by it or any of its Subsidiaries
under any such agreement, contract or commitment of $100,000 or more in the
aggregate and is not cancelable without penalty within thirty (30) days.
Neither it nor any of its Subsidiaries, nor to it's knowledge any other
party to a Significant Contract (as defined below), has breached, violated or
defaulted under, or received notice that it has breached violated or defaulted
under, any of the material terms or conditions of any of the agreements,
contracts or commitments to which it is a party or by which it is bound of the
type described in clauses (a) through (1) above (any such agreement, contract or
commitment, a "Significant Contract") in such a manner as would permit any other
--------------------
party to cancel or terminate any such Significant Contract, or would permit any
other party to seek damages, which would have a Material Adverse Effect on it.
5.19. Potential Conflicts of Interest. No officer, director, or
stockholder of it or any of its Subsidiaries (a) owns, directly or indirectly,
in whole or in part, any tangible or intangible property that it or any of its
Subsidiaries is using or the use of which is necessary for the business of it or
any of its Subsidiaries; or (b) to the best of its knowledge, has any cause of
action or other claim whatsoever against, or owes any amount to, it or
<PAGE>
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any of its Subsidiaries, except for claims in the ordinary course of business,
such as for accrued vacation pay, accrued benefits under its Employee Benefit
Plans, accrued expense reimbursements, and similar matters and agreements.
5.20. Employment of Officers, Employees. The name and current annual
salary and other compensation payable by it or any of its Subsidiaries to each
exempt non-hourly employee whose current total annual compensation or estimated
compensation (including but not limited to wages, salary, commissions, normal
bonus, profit sharing, deferred compensation, and other extra compensation, but
excluding the value of employee stock options and employee stock purchase rights
granted) is $120,000 or more, with the exception of sales personnel who are not
officers, are as set forth in Section 5.20 of its Disclosure Schedule.
5.21. Brokers. Except as indicated in Section 5.21 of its Disclosure
Schedule, no finder, broker, agent, or other intermediary has acted for or on
behalf of it or any of its Subsidiaries in connection with the negotiation,
preparation, execution, or delivery of this Agreement or the consummation of the
Merger or the other transactions contemplated hereby.
5.22. Compliance with Other Agreements, Laws, Etc. It and its
Subsidiaries have complied with, and are in compliance with, (a) all laws, (b)
all unwaived terms and provisions of all contracts to which any of them is a
party, or by which any of them or any of their respective properties is subject,
and (c) its certificate of incorporation and by-laws or other constating
documents, respectively, each as amended to date; in the case of the preceding
clauses (a) and (b), excepting only any such noncompliances that, both
individually and in the aggregate, have not resulted and will not result in any
Material Adverse Effect on it. Neither it nor any of its Subsidiaries has been
charged with, or to the best of its knowledge, been under investigation with
respect to, any violation of any provision of any law. It has and maintains all
such licenses, permits, and other authorizations of governmental authorities as
are necessary for or material to the conduct of its or its Subsidiaries'
businesses or in connection with its or its Subsidiaries' ownership or use of
their respective properties (other than those the absence of which would not
have a Material Adverse Effect on it), all of which are in full force and
effect, and except as described in Section 5.22 of its Disclosure Schedule, none
of which will terminate or otherwise be adversely affected as a result of the
consummation of the Merger and the other transactions contemplated hereby.
<PAGE>
- 22 -
5.23. Ownership of Other's Stock. Neither it nor any of its Subsidiaries,
nor to the best of its knowledge, any of its affiliates or associates (as such
terms are defined under the Exchange Act) beneficially owns, directly or
indirectly, or is a party to or bound by any contract (other than this Agreement
and the Voting Agreements) with respect to the acquisition, holding, voting, or
disposition of any shares of the capital stock or other securities of the other,
other than through any mutual fund or other similar investment vehicle over
which no investment discretion is retained.
5.24. Fairness Opinion. Its board of directors has received the oral
opinion of its Financial Advisor that the Exchange Ratio is fair, from a
financial point of view, to it and its stockholders.
5.25. Disclosure. None of its representations and warranties set forth in
this Agreement or in any other agreement, instrument, certificate, or other
document delivered by it in connection with this Agreement, the Merger, or any
of the other transactions contemplated hereby contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein not false or misleading.
6. Additional Representations and Warranties of RoweCom and Merger Sub.
RoweCom and Merger Sub, jointly and severally, hereby represent and warrant to
NewsEdge as follows:
6.1. Incorporation; Authority. Merger Sub is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted. Merger Sub
has delivered to NewsEdge copies of its certificate of incorporation and by-
laws, in each case with all amendments thereto and as in full force and effect.
6.2. New Company. Merger Sub has been organized for the specific purpose
of engaging in the Merger and the other transactions contemplated hereby and has
not incurred any material liabilities, conducted any material business, or
entered into any material contracts or commitments, in each case except such as
are in furtherance of or incidental to such transactions.
6.3. Authorization and Enforceability. Merger Sub has all requisite power
and full legal right and authority (including due approval of its Board of
Directors and of RoweCom, its sole stockholder) to enter into this Agreement, to
perform all of its agreements and obligations hereunder,
<PAGE>
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and to consummate the Merger and the other transactions contemplated hereby.
This Agreement has been duly executed and delivered by Merger Sub and
constitutes its legal, valid, and binding obligation, enforceable against it in
accordance with the terms hereof, except as enforceability may be subject to the
effect of any applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization, marshaling, or other similar laws or rules of law
affecting creditors' rights and remedies generally, and to general principles of
equity.
6.4. Governmental and Other Third-Party Consents, Non-Contravention, Etc.
Except as required under the HSR Act, no consent, approval, or authorization of
or registration, designation, declaration, or filing with any governmental
authority, federal or other, or any other person, is required on Merger Sub's
part in connection with the execution, delivery, and performance of this
Agreement or the consummation of the Merger and the other transactions
contemplated hereby.
Subject to compliance with the HSR Act, Merger Sub's execution, delivery,
and performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby will not violate any (i) provision of
its certificate of incorporation or by-laws, (ii) contract, or (iii) law.
6.5. Capitalization.
(a) Merger Sub's authorized capital stock consists of one share of common
stock, $0.01 par value per share, which is issued and outstanding and held and
owned (of record and beneficially) by RoweCom. Such outstanding share is duly
authorized, validly issued, fully paid, and non-assessable, and was issued in
compliance with all applicable laws, including securities laws, and all
applicable preemptive or similar rights.
(b) There are no contracts to which Merger Sub is a party or by which it
is bound to purchase or sell, and no convertible or exchangeable securities,
options, warrants, or other rights to acquire from it any shares of its capital
stock or other securities.
(c) There are no voting trusts, proxies, or other contracts (contingent or
otherwise) to which Merger Sub is a party or by which it is bound with respect
to the voting of any shares of its capital stock.
<PAGE>
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(d) None of Merger Sub's stockholders will have any appraisal or
dissenters' rights by reason of the Merger or the other transactions
contemplated hereby.
6.6. Qualification. Merger Sub is not required to be qualified as a
foreign corporation in any jurisdiction.
6.7. Subsidiaries. Merger Sub has no Subsidiaries and does not own any
legal and/or beneficial interests in or to any other business enterprise or
other person.
7. Mutual Covenants. From and after the date of this Agreement and until
the Closing, except as otherwise specifically agreed by RoweCom and NewsEdge:
7.1. S-4.
(a) RoweCom and NewsEdge will cooperate in the preparation of the S-4, and
RoweCom will file it with the SEC. The parties will use their best reasonable
efforts to have the S-4 declared effective by the SEC as promptly as
practicable.
(b) Each of RoweCom and NewsEdge will promptly:
(i) provide the other with drafts of all correspondence intended to
be sent to the SEC in connection with the S-4, the Merger, or the other
transactions contemplated by this Agreement, and will permit the other a
reasonable opportunity to comment thereon prior to delivery to the SEC;
(ii) notify the other promptly of the receipt of any comments of or
requests by the SEC or any governmental official with respect to the S-4,
the Merger, or the other transactions contemplated by this Agreement;
(iii) provide the other with copies of correspondence between such
party and its representatives, on the one hand, and the SEC or members of
its staff or any other appropriate governmental officials, on the other
hand, with respect to the S-4, the Merger, or the other transactions
contemplated by this Agreement;
(iv) use its best reasonable efforts to obtain and provide the
information requested to be included in the S-4, to respond promptly
<PAGE>
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to any comments made by the SEC or any other governmental official with
respect to the S-4, the Merger, or the other transactions contemplated by
this Agreement, and to cause the applicable proxy statement contained
within the S-4 to be mailed to its stockholders at the earliest practicable
time;
(v) advise the other of receiving notice of the time when the
Registration Statement has become effective, of the issuance or any stop
order, of the initiation or threat of any proceeding for any such purpose,
or of any request by the SEC for the amendment or supplement of the S-4 or
for any additional information; and
(vi) provide the other with copies of all documents of the types
referred to in the definition of its "SEC Reports" that are filed by it
with the SEC after the date hereof and prior to the Closing.
(c) Each of RoweCom and NewsEdge warrants that none of the information
provided or to be provided by it for inclusion in the S-4 will, at the time the
S-4 is declared effective, or as of the time the proxy statement/prospectus is
mailed to its or the other's stockholders, or as of the times of the respective
meetings of its and the other's stockholders held in accordance with Section
7.2, 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.
7.2. Stockholders' Approvals. Each of RoweCom and NewsEdge will (i) as
promptly as practicable, take all steps necessary duly to call, give notice of,
convene, and hold a meeting of its stockholders for the purposes of approving
this Agreement, the Merger, and the other transactions contemplated hereby, and
for such other purposes (not inconsistent with any of the foregoing) as may be
necessary or desirable in connection therewith, (ii) (in the case of NewsEdge,
subject to Section 8.16) recommend to its stockholders and solicit proxies for,
the approval of such matters to be submitted by it to its stockholders, and
(iii) (in the case of NewsEdge, subject to Section 8.16) use its best efforts to
obtain the necessary approvals by its stockholders of such matters.
7.3. HSR Act. Each of RoweCom and NewsEdge will:
(a) as promptly as is practicable, but in any event within five business
days following the execution of this Agreement, make its required filings under
the HSR Act;
<PAGE>
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(b) as promptly as is practicable after receiving any governmental request
under the HSR Act for additional information, documents, or other materials, use
its best reasonable efforts to comply with such request;
(c) cooperate with the other in connection with resolving any governmental
inquiry or investigation relating to their respective HSR Act filings, the
Merger, or any related inquiry or investigation;
(d) promptly inform the other of any communication with, and any proposed
understanding, agreement, or undertaking with any governmental entity relating
to their respective HSR Act filings, the Merger, or any related inquiry or
investigation; and
(e) to the extent reasonably practicable, give the other reasonable
advance notice of, and the opportunity to participate in (directly or through
its representatives), any meeting or conference with any governmental entity
relating to their respective HSR Act filings, the Merger, or any related inquiry
or investigation.
7.4. Other Required Consents. Each of the parties will cooperate with the
others and use all reasonable efforts to prepare all necessary documentation, to
effect all necessary filings, and to obtain all necessary permits, consents,
approvals, and authorizations of all governmental bodies and other third parties
(public or private) necessary to consummate the Merger or the other transactions
contemplated by this Agreement. Each party will have the right to review and
approve in advance all descriptions of or with respect to it that appear in any
filing with any governmental body made in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, the parties
will act reasonably and as promptly as practicable.
7.5. Satisfaction of Conditions. Each of the parties will use its best
reasonable efforts to cause the satisfaction as promptly as possible of each of
the conditions contained in Sections 9 through 11 that impose obligations on it
or require action on its part or the part of any of its stockholders or
Affiliates.
7.6. Tax-Free Reorganization Treatment. No party will take or cause or
permit to be taken any action, whether before or after the Effective Time, that
would disqualify the Merger as a "reorganization" within the meaning of Section
368(a) of the Code.
<PAGE>
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7.7. [Reserved].
7.8. Tax Matters. The parties intend that the Merger constitute a "tax-
free reorganization" under Section 368(a) of the Code, and agree to report the
Merger as such on their respective tax returns. The parties understand and
agree that none of them is making any representation or warranty with respect to
the tax consequences of this Agreement, the Merger, or the other transactions
contemplated hereby, provided, however, that each of RoweCom and NewsEdge will
(a) provide representations as to factual matters in a certificate to be
furnished to the other party's tax counsel or accountants to permit such counsel
or accountants to determine whether they may render the tax matters opinion
referred to in Section 9.6, and (b) use its best reasonable efforts to obtain,
as promptly as is practicable following the date hereof and in any event before
the Effective Time of the Merger, such oral or written assurances as it
reasonably deems sufficient to enable it to execute and deliver such certificate
substantially in the form of that attached as an exhibit to the tax matters
opinion of the other party's tax counsel or accountants referred to in Section
9.6.
7.9. Further Assurances. Subject to the terms and conditions set forth in
this Agreement, from time to time both before and after the Effective Time, each
of the parties will use his or its best reasonable efforts, as promptly as is
practicable to take or cause to be taken all actions, and to do or cause to be
done all other things, as are necessary, proper, or advisable to consummate and
make effective the Merger and the other transactions contemplated hereby.
7.10. NASDAQ/NMS Application. RoweCom will promptly prepare and submit to
the National Association of Securities Dealers, Inc. a listing application
covering the shares of RoweCom Stock into which shares of NewsEdge Stock are to
be converted in the Merger, and will use its best reasonable efforts to cause
such shares to be approved for listing in The NASDAQ National Market, subject to
official notice of issuance.
7.11. Disclosure Supplements. From time to time before the Closing, and
in any event immediately before the Closing, each of RoweCom and NewsEdge will
promptly advise the other in writing of any matter hereafter arising or becoming
known to the disclosing party that, if existing, occurring, or known at or
before the date of this Agreement, would have been required to be set forth or
described in its Disclosure Schedule, or that is necessary to correct any
information in its Disclosure Schedule that is or has become inaccurate.
<PAGE>
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No such disclosure will be taken into account in determining whether the
conditions to the other party's obligations to consummate the transactions
contemplated by this Agreement have been satisfied.
7.12. Public Announcements. RoweCom and NewsEdge will consult with each
other before issuing any press release or otherwise making any public statements
with respect to the Merger or this Agreement and will not issue any such press
release or make any such public statement without the prior consent of the other
party, which will not be unreasonably withheld or delayed; provided, however,
that a party may, without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of counsel be
required by law or the National Association of Securities Dealers, Inc. if it
has used all reasonable efforts to consult with the other party.
7.13. Conveyance Taxes. RoweCom and NewsEdge will cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed on or before the Effective Time.
7.14. Indemnification and Insurance.
(a) From and after the Effective Time, RoweCom and the Surviving
Corporation will fulfill and honor in all respects the obligations of NewsEdge
which exist prior to the date hereof to indemnify NewsEdge's present and former
directors and officers and their heirs, executors and assigns. The Certificate
of Incorporation and By-laws of RoweCom and the Surviving Corporation will
contain provisions with respect to indemnification and elimination of liability
for monetary damages at least as favorable to directors, officers, employees,
and agents of NewsEdge as those set forth in the certificate of incorporation
and by-laws of NewsEdge, which provisions will not be amended, repealed, or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who, at
the Effective Time, were directors, officers, employees, or agents of NewsEdge,
unless such modification is required by law.
(b) After the Effective Time RoweCom and the Surviving Corporation will,
to the fullest extent permitted under applicable law or under their Certificates
of Incorporation or By-laws, indemnify and hold harmless, each present or former
director or officer of NewsEdge or any of its subsidiaries
<PAGE>
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and his or her heirs, executors and assigns (collectively, the "Indemnified
Parties") against any costs or expenses (including attorneys' fees), judgments,
fines, losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, to the extent arising out of
or pertaining to any action or omission in his or her capacity as a director,
officer, employee or agent of NewsEdge occurring prior to the Effective Time
(including without limitation actions or omissions relating to the Merger) for a
period of six years after the date hereof. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) any counsel retained by the Indemnified Parties for any
period after the Effective Time will be reasonably satisfactory to RoweCom, (ii)
after the Effective Time, RoweCom will pay the reasonable fees and expenses of
such counsel, promptly after statements therefor are received and (iii) RoweCom
will cooperate in the defense of any such matter; provided, however, that
-------- -------
RoweCom and the Surviving Corporation will not be liable for any settlement
effected without its written consent (which consent will not be unreasonably
withheld or delayed); and provided, further, that, in the event that any claim
-------- -------
or claims for indemnification are asserted or made within such six-year period,
all rights to indemnification in respect of any such claim or claims will
continue until the disposition of any and all such claims. The Indemnified
Parties as group may retain only one law firm (in addition to local counsel) to
represent them with respect to any single action unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties.
(c) For a period of six years after the Effective Time, the Surviving
Corporation will use all commercially reasonable efforts to maintain in effect,
if available, directors' and officers' liability insurance covering those
persons who are currently covered by NewsEdge's Directors, Officers and Company
Liability insurance policies on terms comparable to those applicable to the
current directors of NewsEdge; provided, however, that in no event will RoweCom
-------- -------
or the Surviving Corporation be required to expend per year an amount in excess
of two times the annual premium currently paid by RoweCom for its directors and
officers' liability insurance coverage.
(d) NewsEdge will use best efforts, after consultation with RoweCom, to
negotiate and secure a "tail" on its existing Directors, Officers and Company
Liability insurance policies for a period of one year, at a total cost not to
exceed $150,000.
<PAGE>
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(e) This Section 7.14 will survive any termination of this Agreement and
the consummation of the Merger at the Effective Time, is intended to benefit
NewsEdge, the Surviving Corporation and the Indemnified Parties, and will be
binding on all successors and assigns of the Surviving Corporation.
8. Conduct of Businesses Pending the Closing. Except as indicated in
Section 8 of its Disclosure Schedule, from and after the date of this Agreement
and until the Closing, except as otherwise specifically agreed by RoweCom and
NewsEdge:
8.1. Full Access. Each of RoweCom and NewsEdge will afford to the other
and its authorized representatives full access, upon request and reasonable
notice and during normal business hours, to all of the properties, books,
records, contracts, and documents of the requested party, and a reasonable
opportunity to make such investigations as the requesting party desires to make,
and will furnish or cause to be furnished to the requesting party and its
authorized representatives all such information with respect to the requested
party's affairs and businesses as the requesting party reasonably requests.
8.2. Carry on in Regular Course. Except as otherwise consented to by the
other party, each of RoweCom and NewsEdge will and will cause its Subsidiaries
to (i) use its best reasonable efforts to maintain its owned and leased
properties in good operating condition and repair and to make all necessary
renewals, additions, and replacements thereto; (ii) carry on its businesses
diligently and substantially in the same manner as heretofore; (iii) in the case
of NewsEdge, not make or institute any new, unusual, or novel methods of
manufacture, purchase, sale, lease, management, accounting, or operation or take
or permit to occur or exist any action or circumstance referred to in Section
5.8, other than the scheduled repayment of Indebtedness of NewsEdge in the
ordinary course of business from cash generated by operations and the scheduled
payment of annual bonuses, increases in salaries and promotions of employees;
(iv) in the case of NewsEdge, until December 31, 1999, pursue (but not effect
without RoweCom's prior consent) a variety of options with respect to NewsEdge's
Subsidiary individual.com, including the possible sale of that company or a
significant equity interest therein; and (v) in the case of NewsEdge, after
December 31, 1999, not provide additional funding to individual.com, and seek as
quickly and efficiently as possible to wind-down individual.com's operations in
accordance with a plan to be agreed upon by NewsEdge and RoweCom.
<PAGE>
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8.3. No Dividends, Issuances, Repurchases, Etc. Neither RoweCom nor
NewsEdge will:
(a) declare, set aside, or pay any dividends (whether in cash, shares of
stock, other property, or otherwise) on, or make any other distribution in
respect of, any shares of its capital stock or other securities, or issue,
purchase, redeem, or otherwise acquire for value any shares of its capital stock
or other securities, other than repurchases of unvested restricted stock from
former employees or consultants at not more than the purchase price originally
paid therefor (appropriately adjusted for any intervening stock dividends, stock
splits, reverse stock splits, recapitalizations, and other similar transactions)
in accordance with the terms of repurchase agreements entered into before the
date of this Agreement; or
(b) issue any shares of its capital stock or other securities (including
any options, warrants, or other rights to acquire shares of its capital stock),
other than issuances of shares of its common stock and stock options to purchase
such shares, in each case for compensatory purposes and within the limits set
forth in Section 5.4 of its Disclosure Schedule, and other than issuances of
shares of its common stock upon exercise of stock options or employee stock
purchase rights disclosed in Section 5.4 of its Disclosure Schedule (which
exercises, in the aggregate, will be disclosed in a supplement to its Disclosure
Schedule delivered pursuant to Section 7.11).
8.4. No Compensation Changes. NewsEdge will not increase the compensation
payable or to become payable to any of its officers, directors, key employees,
or agents, or increase any bonus, insurance, pension, or other benefit plan,
payment, or arrangement made to, for, or with any such officers, directors, key
employees, or agents, nor will it effect any general or uniform increase in the
compensation payable or to become payable to its employees or consultants,
including any increase in the benefits under any bonus or pension plan or other
contract or commitment, other than ordinary annual increases, annual bonuses and
retention bonuses.
8.5. Contracts and Commitments with Affiliates. Neither RoweCom nor
NewsEdge will enter into any contract or commitment, or engage in any other
transaction, with any of its Affiliates, other than in the usual and ordinary
course of business and consistent with its normal past business practices.
8.6. Purchase and Sale of Capital Assets. NewsEdge will not purchase,
lease as lessee, license as licensee, or otherwise acquire any interest in, or
sell, lease as lessor, license as licensor, or otherwise dispose
<PAGE>
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of any interest in, any capital asset(s) (i) other than in the ordinary course
of business, or (ii) having a market value in excess of $50,000 in any instance,
or in excess of $500,000 in the aggregate.
8.7. Preservation of Organization. Each of RoweCom and NewsEdge will use
its best reasonable efforts to preserve its business organization intact, to
keep available its present officers and key employees and consultants, and to
preserve its present business relationships with its suppliers and customers and
others having business relationships with it, provided, that neither of them
will be obligated to pay its present officers and key employees any amounts in
excess of their current compensation to retain them as employees.
8.8. No Default. Neither RoweCom nor NewsEdge will take or omit to take
any action, or permit any action or omission to act, that would cause a default
under or a material breach of any of its material contracts, commitments, or
obligations.
8.9. Compliance with Laws. RoweCom and NewsEdge will duly comply in all
material respects with all applicable laws, regulations, and orders of courts
and other governmental authorities.
8.10. Advice of Change. Each of RoweCom and NewsEdge will promptly advise
the other in writing of any Material Adverse Change with respect to it.
8.11. No Charter or By-Law Changes. Neither RoweCom nor NewsEdge may
amend or otherwise change its Certificate of Incorporation or By-Laws;
8.12. Acquisitions and Debt Financings. Neither RoweCom nor NewsEdge may
acquire (by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership, or other business organization or division thereof,
except, in the case of RoweCom, for any acquisition in which the value of the
total consideration paid by RoweCom is less than $500,000,000.
NewsEdge will not incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee (other than guarantees of bank debt of its
subsidiaries entered into in the ordinary course of business) or endorse or
otherwise as an accommodation become responsible for, the obligations of any
person, or make any loans or advances, except in the ordinary course of business
consistent with past practice.
<PAGE>
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8.13. No Change in Accounting Policies. Neither RoweCom nor NewsEdge may
take any action, other than as required by GAAP, to change accounting policies
or procedures (including, without limitation, procedures with respect to revenue
recognition, capitalization of software development costs, payments of accounts
payable and collection of accounts receivable).
8.14. No Tax Elections. Neither RoweCom nor NewsEdge may make any
material tax election inconsistent with past practices or settle or compromise
any material federal, state, local or foreign tax liability or agree to an
extension of a statute of limitations for any assessment of any tax, except to
the extent the amount of any such settlement has been reserved for on its most
recent SEC Report.
8.15. No Changes in Employee Plans. Neither RoweCom nor NewsEdge may,
except as may be required by law, take any action to terminate or amend any of
its Employee Plans other than in connection with the Merger.
8.16. No Shopping.
(a) Neither NewsEdge nor any of its Subsidiaries will (or will propose
to) directly or indirectly solicit, initiate, encourage, or facilitate (by
furnishing non-public information or otherwise) any inquiry or the making of any
proposal that is or may reasonably be expected to lead to an Acquisition
Proposal, or discuss or negotiate any Acquisition Proposal with any third party;
nor will NewsEdge or any of its Subsidiaries authorize or permit any of their
respective officers, directors, employees, bankers, attorneys, accountants, or
other representatives (regardless of whether acting or purporting to act on
behalf of NewsEdge or any of its Subsidiaries or otherwise) to do any of these
things; provided, however, that if before obtaining its Stockholders' Approval,
NewsEdge receives an unsolicited written Acquisition Proposal that did not
result from a breach of this Section 8.16 and that is or is reasonably likely to
lead to a Superior Proposal, NewsEdge may furnish non-public information to and
negotiate with the person who made the Acquisition Proposal, but only if and
after (i) NewsEdge's Board of Directors determines in good faith, after
consultation with outside legal counsel, that failure to do so would be
reasonably likely to constitute a breach of its fiduciary duties to NewsEdge's
stockholders under applicable law; (ii) NewsEdge gives RoweCom at least three
business days' written notice before doing so; and (iii) the person who made the
Acquisition Proposal enters into a customary confidentiality agreement with
NewsEdge.
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(b) NewsEdge's Board of Directors will not do or propose to do any of the
following things:
(i) withdraw or modify its recommendation of the Merger unless a
Superior Proposal has been received by NewsEdge or publicly announced and
NewsEdge has terminated this Agreement in accordance with Section 12(d);
(ii) approve or recommend an Acquisition Proposal unless it is a
Superior Proposal, and then only if NewsEdge has terminated this Agreement
in accordance with Section 12(d); or
(iii) cause or permit NewsEdge or any of its Subsidiaries to enter
into any contract, letter of intent, agreement in principle, or similar
agreement or understanding (regardless of whether legally binding) relating
to an Acquisition Proposal that is not a Superior Proposal unless
NewsEdge's Board of Directors first determines in good faith, after
consultation with outside legal counsel, that failure to do so would be
reasonably likely to constitute a breach of its fiduciary duties to
NewsEdge's stockholders under applicable law, and NewsEdge has terminated
this Agreement in accordance with Section 12(d).
(c) Notwithstanding any other provision of this Section 8.16, NewsEdge may
at any time take and disclose to its stockholders a position contemplated by
Rule 14e-2(a) under the Exchange Act, provided, however, that except as
permitted by Section 8.16(b), neither NewsEdge nor its Board of Directors will
(or will propose to) approve or recommend an Acquisition Proposal (by taking or
disclosing a position described in Rule 14e-2(a)(1) or otherwise).
(d) NewsEdge will as promptly as practicable, but in any event within one
day, notify RoweCom orally and in writing of any Acquisition Proposal or any
inquiry in connection with or that might reasonably be expected to lead to an
Acquisition Proposal, (including any request for information), including the
identity of the person making the Acquisition Proposal or inquiry and the
material terms and conditions thereof. Thereafter, unless and until this
Agreement is terminated in accordance with Section 12, NewsEdge will keep
RoweCom promptly and fully informed of the status and details of the Acquisition
Proposal or inquiry, including any changes or proposed changes thereto.
<PAGE>
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8A. Registration Rights.
8A.1 Certain Definitions. As used in this Section 8A, the following terms
-------------------
will have the following respective meanings:
(a) "Resale Holder" means a stockholder of NewsEdge to whom shares of
RoweCom Stock are issued pursuant to this Agreement and the Merger who, by
reason of such stockholder's status as an Affiliate of NewsEdge at the time of
the Merger, cannot resell shares of RoweCom Stock without compliance with the
restrictions set forth in Rule 145 under the Securities Act. A list of such
Affiliates is set forth in Section 8A of NewsEdge's Disclosure Schedule.
(b) "Registrable Securities" means for any Resale Holder, 50% of the
shares of RoweCom Stock issued to such Resale Holder pursuant to this Agreement
and the Merger (appropriately adjusted for any stock split, reverse stock split,
stock dividend, or other similar event), and for all Resale Holders the sum of
the Registrable Securities held by them; provided, however, that if RoweCom
completes a firmly underwritten registered public offering of RoweCom Stock
before the Closing Date (or is in the process of doing so and any Resale Holder
will not be entitled hereunder to include Registrable Securities in such
offering in accordance with Section 8A.3), then such 50% figure will instead be
100%, and provided, further, that in any case all such shares of RoweCom Stock
held by a particular Resale Holder will cease to be Registrable Securities at
such time as such Resale Holder is free to sell such shares (including all
Registrable Securities held by Affiliates of such Resale Holder) in their
entirety within a single 90 day period under Rule 145 of the Securities Act.
8A.2 Resale Holder Registration.
(a) RoweCom will use its reasonable best efforts to cause the Registrable
Securities then held by each Resale Holder to be registered under the Securities
Act so as to permit the sale thereof as set forth in this Section 8A.2. RoweCom
will prepare and file with the Commission as soon as practicable after the
Effective Time, but in any event within 30 days following the Effective Time, a
registration statement in such form as is then available under the Securities
Act covering the Registrable Securities of all Resale Holders not previously
sold pursuant to Section 8A.3 hereof (the "Shelf Registration Statement") and
----------------------------
will use best efforts to cause it to be declared effective as promptly as
practicable thereafter provided, that each Resale Holder will provide all such
information and materials and take all such action as may be required in order
to permit RoweCom to comply with all applicable requirements of the Securities
Act and the Exchange Act and
<PAGE>
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to obtain any desired acceleration of the effective date of such Initial Shelf
Registration Statement. Upon the effectiveness of the Shelf Registration
Statement, RoweCom will provide a prospectus (within the meaning of Rule 429 of
the Rules and Regulations under the Securities Act) for the Shelf Registration
Statement to the Resale Holders pursuant to Section 8A.2(b). The offerings made
pursuant to such registrations will not be underwritten.
(b) RoweCom will use its reasonable best efforts to keep the Shelf
Registration Statement effective until the soonest to occur of (A) the date on
which all Registrable Securities included within the Shelf Registration
Statement have been sold or (B) the first date following the first anniversary
of the Effective Time as to which no Registrable Securities exist as a result of
the proviso to Section 8A.1(b) or (C) the first anniversary of the Effective
Time; (ii) prepare and file with the Commission such amendments to such
registration statements and amendments or supplements to the prospectuses used
in connection therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities
registered by such registration statement (including such amendments as may be
necessary to reflect different or additional selling stockholders as a result of
any distribution of Registrable Securities by the Resale Holders to the
beneficial owners of such Registrable Securities); (iii) furnish to each Resale
Holder such number of copies of any prospectuses (including any preliminary
prospectus and any amended, combined or supplemented prospectus) in conformity
with the requirements of the Securities Act, and such other documents, as each
Resale Holder may reasonably request in order to effect the offering and sale of
the Registrable Securities to be offered and sold, but only while RoweCom will
be required under the provisions hereof to cause the registration statement to
remain effective; (iv) use its reasonable best efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each Resale Holder will
reasonably request (provided that RoweCom will not be required in connection
therewith or as a condition thereto to subject itself to taxation, qualify to do
business, or file a general consent to service of process in any such
jurisdiction where it has not been qualified), and do any and all other acts or
things which may be necessary or advisable to enable each Resale Holder to
consummate the public sale or other disposition of such Registrable Securities
in such jurisdictions; (v) notify each Resale Holder, promptly after it will
receive notice thereof, of the date and time the registration statement and each
post-effective amendment to such registration statement becomes effective or a
supplement to any prospectus forming a part of such registration statement has
been filed; and (vi) promptly reissue, or promptly authorize and instruct its
transfer agent to
<PAGE>
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reissue, unlegended certificates at the request of any Resale Holder thereof
upon such Resale Holder's delivery of original certificates representing
Registrable Securities tendered for sale pursuant to such effective registration
statement, and to promptly respond to broker's inquiries made of RoweCom in
connection with such sales, in each case with a view to reasonably assisting the
Resale Holder to complete such sale during such period of effectiveness.
(c) Notwithstanding the foregoing obligation of RoweCom under this Section
8A.2, if RoweCom will furnish to the Resale Holder or Resale Holders requesting
a registration statement pursuant to this Section 8A.2 a certificate signed by
the President of RoweCom stating that in the good faith judgment of RoweCom, it
would be materially adverse to RoweCom and its stockholders for such
registration statement to be filed at such time and it is therefore essential to
defer the filing of such registration statement, RoweCom will have the right to
defer such filing for a period of not more than 30 days beyond the date
specified under Section 8A.2(a) above.
8A.3 Piggyback Registration.
(a) RoweCom may determine to provide for the firmly underwritten sale of
RoweCom Stock for its own account and/or the account of other stockholders, and
in connection with such determination, will file with the Commission a
registration statement to register such Common Stock (an "Underwritten Sale").
-----------------
In the event of such a determination, RoweCom will give to each Resale Holder
written notice thereof at least 15 days prior to the filing of such registration
statement, and will include in the Underwritten Sale (and any related
qualification under blue sky laws or other related compliance) all the
Registrable Securities specified by the Resale Holders in their written request
or requests to RoweCom, made within 10 days after receipt of such written notice
from RoweCom, subject, however, to the marketing and other limitations set forth
in Section 8A.3(b) below; provided, however, that no Registrable Securities will
be included in a registration statement filed with the Commission if (i) the
Registrable Securities have been sold in a registration statement pursuant to
Section 8A.2 or (ii) RoweCom reasonably determines that the Underwritten Sale
will not be completed (i.e., the registration statement is not declared
effective) within one year of the Effective Time. An Underwritten Sale,
including the form of underwriting agreement to be entered into by RoweCom, the
underwriter(s) and any selling stockholders, will be on customary terms. The
underwriter(s) for an Underwritten Sale will be selected by RoweCom in its sole
discretion.
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(b) The right of any Resale Holder to registration pursuant to this
Section 8A.3 will be conditioned upon such Resale Holder's participation in the
Underwritten Sale and the inclusion of Registrable Securities in the
Underwritten Sale to the extent provided herein. All Resale Holders distributing
Registrable Securities through the Underwritten Sale will (together with RoweCom
and the other holders distributing their securities through the Underwritten
Sale) enter into an underwriting agreement in customary form with the managing
underwriter. To facilitate the allocation of shares in accordance with the above
provision, RoweCom or the underwriters may round the number of shares allocated
to any Resale Holder to the nearest 100 shares. If any Resale Holder disapproves
of the terms of the Underwritten Sale, he or she may elect to withdraw therefrom
by written notice to RoweCom and the managing underwriter.
8A.4 Suspension of Prospectus. Under any registration statement filed
------------------------
pursuant to Section 8A.2 hereof, RoweCom may restrict disposition of Registrable
Securities, and a Resale Holder will not be able to dispose of such Registrable
Securities, if RoweCom will have delivered a notice in writing to such Resale
Holder stating that a delay in the disposition of such Registrable Securities is
necessary because RoweCom, in its reasonable judgment, has determined in good
faith that such sales would require public disclosure by RoweCom of material
nonpublic information that is not included in such registration statement and
that immediate disclosure of such information would be materially adverse to
RoweCom. In the event of the delivery of the notice described above by RoweCom,
RoweCom will use its reasonable best efforts to amend such registration
statement and/or amend or supplement the related prospectus if necessary and to
take all other actions necessary to allow the proposed sale to take place as
promptly as possible, subject, however, to the right of RoweCom to delay further
sales of Registrable Securities until the conditions or circumstances referred
to in the notice have ceased to exist or have been disclosed. Such right to
delay sales of Registrable Securities will not exceed 75 days in the aggregate
and no longer than 30 days as to any single delay (any such period of delay
herein referred to as a "blackout period"); after the registration statement is
---------------
declared effective, no blackout period may be imposed during the 15-day period
following the date of effectiveness or the termination date of the last blackout
period. In addition, each Resale Holder who becomes an officer, director, or
employee of RoweCom will be subject to the trading restrictions related to the
release of quarterly results of operations in the same manner as other officers,
directors, and employees of RoweCom.
8A.5 Expenses. All of the out-of-pocket expenses incurred in connection
--------
with any registration of Registrable Securities pursuant to this
<PAGE>
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Section 8A, including, without limitation, all Commission, Nasdaq National
Market and blue sky registration and filing fees, printing expenses, transfer
agents' and registrars' fees, and the reasonable fees and disbursements of
RoweCom's outside counsel and independent accountants will be paid by RoweCom.
RoweCom will not be responsible to pay any legal fees for any Resale Holder or
any selling expenses of any Resale Holder or any broker's fees or commissions,
including underwriter commissions.
8A.6 Indemnification. In the event of any offering registered pursuant to
---------------
this Section 8A:
(a) RoweCom will indemnify each Resale Holder, each of its officers,
directors and partners and such Resale Holder's legal counsel and independent
accountants, and each person controlling such Resale Holder within the meaning
of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 8A, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they are made, not misleading, or any
violation by RoweCom of any rule or regulation promulgated under the Securities
Act, or state securities laws, or common law, applicable to RoweCom in
connection with any such registration, qualification or compliance, and will
reimburse (and advance the same to) each such Resale Holder, each of its
officers, directors and partners and such Resale Holder's legal counsel and
independent accountants, and each person controlling such Resale Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, provided that RoweCom will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based in any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to RoweCom by such Resale Holder or underwriter and stated to be
specifically for use therein; provided, however, that the foregoing is subject
to the condition that, insofar as it relates to any such untrue statement,
<PAGE>
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alleged untrue statement, omission or alleged omission made in a preliminary
prospectus on file with the Commission at the time the registration statement
becomes effective or the amended prospectus is filed with the Commission
pursuant to Rule 424(b) (the "Final Prospectus"), the provisions hereof will not
----------------
inure to the benefit of any Resale Holder, if RoweCom had complied with its
obligations under Section 8A.2(b)(iii) with respect to such Final Prospectus and
a copy of the Final Prospectus was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is required
by the Securities Act, and if the Final Prospectus would have cured the defect
giving rise to the loss, liability, claim or damage.
(b) Each Resale Holder will, if Registrable Securities held by such Resale
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify RoweCom, each of its
directors and officers and its legal counsel and independent accountants, each
underwriter, if any, of RoweCom's securities covered by such a registration
statement, each person who controls RoweCom or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Resale Holder,
each of its officers and directors and each person controlling such Resale
Holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse RoweCom, such Resale
Holders, such directors, officers, legal counsel, independent accountants,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to RoweCom by such Resale Holder and stated to be specifically for use
therein; provided, however, that the obligations of such Resale Holders
hereunder will be limited to an amount equal to the net proceeds received by
each such Resale Holder of Registrable Securities actually sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section 8A.6 (the
"Indemnified Party") will give notice to the party required to provide
-----------------
indemnification (the "Indemnifying Party") promptly after such Indemnified
------------------
<PAGE>
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Party has written notice of any claim as to which indemnity may be sought, and
will permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who will conduct the defense of such claim or litigation, will be
approved by the Indemnified Party (whose approval will not be unreasonably
withheld or delayed), and the Indemnified Party may participate in such defense
at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its obligations under this Section 8A except to the
extent, if any, that the Indemnifying Party is actually prejudiced thereby;
provided that if the Indemnified Party has claims against the Indemnifying Party
or otherwise has claims or defenses different from or in addition to those of
the Indemnifying Party, the Indemnified Party may retain counsel of its own
choice for all Resale Holders, and the reasonable fees and expenses of such
counsel will be paid by the Indemnifying Party to the extent provided in
paragraphs (a) and (b) of this section. No Indemnifying Party, in the defense of
any such claim or litigation, will, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the Indemnified Party of a release from all liability in respect to such
claim or litigation.
(d) The obligations of RoweCom and each Resale Holder under this Section
8A.6 will survive the completion of any offering of Registrable Securities in a
registration statement under this Section 8A and otherwise.
(e) Notwithstanding the foregoing, to the extent the provisions of this
Section 8A.6 are inconsistent with or conflict with the terms of any
underwriting, indemnification, selling or similar agreement entered into by a
Resale Holder in connection with the offer and sale of Registrable Securities
pursuant to a registration effected pursuant to this Section 8A, the terms of
such agreement will govern and will supersede the provisions of this Section 8A.
8A.7 Limitation on Assignment of Registration Rights. The rights to cause
------------------------------------------------
RoweCom to register Registrable Securities pursuant to this Section 8A may not
be assigned by a Resale Holder unless such a transfer complies with applicable
securities laws and is to stockholders, partners, or retired partners, or
members or retired members of a Resale Holder (including spouses and ancestors,
lineal descendants, and siblings of such stockholders, partners, members or
spouses who acquire Registrable Securities by right, will, or intestate
succession) and all such transferees or assignees agree in writing to appoint a
single representative as their
<PAGE>
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attorney-in-fact for the purpose of receiving any notices and exercising their
rights under this Section 8A. Prior to a permitted transfer of registration
rights under this Section 8A, a Resale Holder must furnish RoweCom with written
notice of the name and address of such transferee and the Registrable Securities
with respect to which such registration rights are being assigned and a copy of
a duly executed written instrument in form reasonably satisfactory to RoweCom by
which such transferee assumes all of the obligations and liabilities of its
transferor hereunder and agrees itself to be bound hereby. No transfer of
registration rights under this Section 8A will be permitted if immediately
following such transfer the disposition of such Registrable Securities by the
transferee is not restricted under the Securities Act; provided that RoweCom
will have provided such transferee with certificates representing such
Registrable Securities free of any transfer restrictions and RoweCom will have
instructed the transfer agent for such Registrable Securities to remove any stop
transfer or other instructions.
9. Mutual Conditions to the Parties' Obligations. The parties'
obligations to consummate the Merger are subject to the satisfaction (or waiver
by each such party, in his or its sole discretion) of each of the conditions set
forth in this section on or before the Closing Date. If the Merger is
consummated, such conditions will conclusively be deemed to have been satisfied
or waived.
9.1. S-4. The S-4 will have been filed with and declared effective by the
SEC, and as of the Closing Date will remain effective and not be subject to any
stop order.
9.2. Stockholder's Approval. Each of RoweCom and NewsEdge will have
obtained its Stockholders' Approval.
9.3. HSR Act. All filings and other submissions required under the HSR Act
will have been made and all applicable waiting periods (including extensions)
under the HSR Act will have expired or been terminated.
9.4. No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction, or other legal restraint or prohibition preventing the
consummation of the Merger, will be in effect, and no petition or request for
any such injunction or other order will be pending.
9.5. Tax Matters. Each of RoweCom and NewsEdge will have received a
written opinion of its tax counsel or accountants, addressed to it, dated as of
the Closing Date, in a form reasonably acceptable to the receiving party, and to
the effect that in such counsel's or accountants'
<PAGE>
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opinion, the Merger will constitute a "reorganization" under Section 368(a) of
the Code. In rendering such opinions, the tax counsel or accountants for each of
RoweCom and NewsEdge will require delivery of and rely upon representations set
forth in certificates delivered by each of RoweCom and NewsEdge substantially in
the form attached as exhibits to the tax matters opinion of each party's counsel
or accountants.
9.6. Blue Sky Compliance. Any filings necessary under applicable state
securities laws to permit the issuance and delivery to the Stockholders of the
shares of RoweCom Stock into which shares of NewsEdge Stock will be converted in
the Merger will have been made, and any authorizations in connection therewith
from all applicable securities regulatory authorities will have been obtained.
9.7. NMS Listing. The shares of RoweCom Stock into which shares of
NewsEdge Stock will be converted in the Merger will have been authorized for
listing on the NASDAQ National Market, subject to official notice of issuance.
9.8. Proceedings and Documents Satisfactory. All proceedings in connection
with the transactions contemplated by this Agreement and all certificates and
other documents delivered to such party pursuant to this Agreement or in
connection with the Closing will be reasonably satisfactory to such party and
his or its counsel.
10. Additional Conditions to NewsEdge's Obligations. NewsEdge's
obligations to consummate the Merger are subject to the satisfaction (or waiver
by NewsEdge, in its sole discretion) of each of the conditions set forth in this
section on or before the Closing Date. If the Merger is consummated, such
conditions will conclusively be deemed to have been satisfied or waived.
10.1. Representations and Warranties. Each of the representations and
warranties made by RoweCom and/or Merger Sub in or pursuant to this Agreement or
in any statement, certificate, or other document delivered to NewsEdge in
connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby will have been true and correct in all material respects
when made and will be true and correct in all material respects at and as of the
Closing (in each case, except that any representation or warranty that expressly
includes a materiality standard will have been and be true and correct in all
respects, giving effect to such standard), subject only to the effect of any
activities or transactions occurring after the date hereof and either expressly
contemplated by this Agreement or consented to in writing by NewsEdge.
<PAGE>
-44-
10.2. Compliance with Agreement. RoweCom and Merger Sub will have performed
and complied in all material respects with all of their respective obligations
under this Agreement to be performed or complied with by them before or at the
Closing, including the execution and delivery of all documents to be executed
and delivered by any of them in connection with this Agreement and/or the
consummation of the Merger and the other transactions contemplated hereby.
10.3. Closing Certificate. RoweCom and Merger Sub will have executed and
delivered to NewsEdge, at and as of the Closing, a certificate (without
qualification as to knowledge or materiality) certifying that the conditions
referred to in Sections 10.1 and 10.2 have been satisfied.
10.4. Opinion of Counsel. Bingham Dana LLP, counsel to RoweCom and Merger
Sub, will have delivered to NewsEdge a written legal opinion addressed to
NewsEdge, dated on and as of the Closing Date, and substantially in the form of
the attached Exhibit A.
---------
10.5. Board of Directors. Two current directors of NewsEdge, proposed by
NewsEdge and reasonably acceptable to RoweCom, will have been elected or
appointed to RoweCom's Board of Directors as members of the class of RoweCom's
directors who will stand for election for a two-year term at Rowecom's next
annual meeting of stockholders following the Effective Time, such election or
appointment to be subject to the consummation of the Merger and effective as of
the Effective Time.
10.6. Employment Agreements. RoweCom will have executed and delivered the
employment agreements described in the attached Exhibit E.
---------
11. Additional Conditions to RoweCom's and Merger Sub's Obligations.
RoweCom's and Merger Sub's respective obligations to consummate the Merger are
subject to the satisfaction (or waiver by RoweCom, in its sole discretion) of
each of the conditions set forth in this section on or before the Closing Date.
If the Merger is consummated, such conditions will conclusively be deemed to
have been satisfied or waived.
11.1. Representations and Warranties. Each of the representations and
warranties made by NewsEdge in or pursuant to this Agreement or in any
statement, certificate, or other document delivered to RoweCom in connection
with this Agreement, the Merger, or any of the other transactions contemplated
hereby will have been true and correct in all material respects when made and
will be true and correct in all material
<PAGE>
-45-
respects at and as of the Closing (in each case, except that any representation
or warranty that expressly includes a materiality standard will have been and be
true and correct in all respects, giving effect to such standard), subject only
to the effect of any activities or transactions occurring after the date hereof
and either expressly contemplated by this Agreement or consented to in writing
by RoweCom.
11.2. Compliance with Agreement. NewsEdge will have performed and complied
in all material respects with all of its obligations under this Agreement to be
performed or complied with by it before or at the Closing, including the
execution and delivery of all documents to be executed and delivered by it in
connection with this Agreement and/or the consummation of the Merger and the
other transactions contemplated hereby.
11.3. Closing Certificate. NewsEdge will have executed and delivered to
RoweCom, at and as of the Closing, a certificate (without qualification as to
knowledge or materiality) certifying with respect to themselves that the
conditions referred to in Sections 11.1 and 11.2 have been satisfied.
11.4. Opinion of Counsel. Testa, Hurwitz & Thibeault LLP, counsel to
NewsEdge, will have delivered to RoweCom a written legal opinion addressed to
RoweCom, dated on and as of the Closing Date, and substantially in the form of
the attached Exhibit B.
---------
11.5. Employment Agreements. Each of the NewsEdge executives referred to
in the attached Exhibit E will have executed and delivered an employment
---------
agreement containing the terms described in the attached Exhibit E.
---------
11.6. Non-Competition Agreement. Donald L. McLagan will have executed and
delivered an agreement reasonably acceptable to RoweCom, by which Mr. McLagan
agrees for a period of 18 months following the Closing Date not to (i) compete
with RoweCom or any of its Subsidiaries in any business carried on by NewsEdge
at the Closing Date, (ii) solicit or induce or attempt to induce any of the
employees or independent contractors of RoweCom or any of its Subsidiaries to
terminate their employment or contractual relationship with RoweCom, or (iii)
solicit or induce or attempt to induce any of the customers, clients, or
suppliers of RoweCom or any of its Subsidiaries to terminate or reduce the
amount of business they do with RoweCom.
<PAGE>
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12. Termination. Notwithstanding the approval of this Agreement and/or of
the Merger by the Board of Directors and/or stockholders of any party:
(a) This Agreement may be terminated at any time before the Effective Time
by written agreement of RoweCom and NewsEdge.
(b) Either RoweCom or NewsEdge may terminate this Agreement by written
notice to the other, if:
(i) any restraining order, injunction, or other order issued by any
court of competent jurisdiction, or other binding legal restraint or
prohibition permanently preventing the consummation of the Merger has
become final and non-appealable; or
(ii) the Closing does not occur on or before April 30, 2000; but only
if the terminating party is not in material breach of this Agreement.
(c) Either RoweCom or NewsEdge may terminate this Agreement by written
notice to the other if the other has materially breached any of its
representations, warranties, covenants, promises, and other agreements set forth
in this Agreement and has not cured such breach within ten days after written
notice thereof from the terminating party.
(d) NewsEdge may terminate this Agreement by written notice to RoweCom if:
(i) a Superior Proposal has been received by NewsEdge or publicly
announced and NewsEdge's Board of Directors is going to withdraw or modify
its recommendation of the Merger;
(ii) NewsEdge's Board of Directors is going to approve or recommend
an Acquisition Proposal that is a Superior Proposal; or
(iii) in the circumstances described in Section 8.16(b)(iii);
but in any such case, NewsEdge will pay RoweCom a Break-Up Fee at the time of
such termination.
(e) Either NewsEdge or RoweCom may terminate this Agreement by written
notice to the other if a meeting of either party's stockholders (including
adjournments and postponements) has been held in accordance
<PAGE>
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with Section 7.2 and such party's Stockholders' Approval has not been obtained,
provided, that if such termination occurs by reason of the failure to obtain
RoweCom's Stockholders' Approval, then RoweCom will pay NewsEdge a Break-Up Fee
within three business days following such termination, and if such termination
occurs by reason of the failure to obtain NewsEdge's Stockholders' Approval,
then NewsEdge will pay RoweCom a Break-Up Fee within three business days
following such termination.
(f) If any party fails to pay a Break-Up Fee when due, then such party
will be liable for the costs and expenses (including attorneys' fees and court
costs) incurred by the party entitled to the Break-Up Fee in collecting payment,
together with interest on the unpaid amount of the Break-Up Fee at the rate of
10% per annum from the date due until paid in full.
(g) Any termination of this Agreement will not affect the rights or
obligations of any party arising, or based on actions or omissions occurring,
before termination.
(h) In the event of the termination of this Agreement pursuant to this
Section 12, this Agreement will forthwith become void and there will be no
liability on the part of any party hereto or any of its affiliates, directors,
officers or stockholders except (i) as set forth in Sections 12 and 14.2 hereof,
and (ii) nothing herein will relieve any party from liability for any willful
breach hereof. No termination of this Agreement will affect the obligations of
the parties contained in any confidentiality agreement between RoweCom and
NewsEdge, all of which obligations will survive termination of this Agreement in
accordance with its terms.
13. Definitions. As used in this Agreement:
All terms are gender-neutral.
Where a term is defined in the singular, its plural has a comparable
meaning, and vice versa.
"Affiliate" means, with respect to any person, any other person (i) that
---------
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such person, or (ii) who is a
family member or relative (by blood or marriage) of any person described in the
preceding clause (i).
<PAGE>
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"Affiliated Group" has the meaning ascribed to it in Section 1504 of the
----------------
Code, and in addition includes any analogous combined, consolidated, or unitary
group, as defined under any applicable state, local, or foreign income Tax law.
"Acquisition Proposal" means any tender or exchange offer, merger,
--------------------
consolidation, business combination, purchase, or similar transaction or series
of transactions involving the capital stock or assets (other than sales of
inventory in the ordinary course of business) of NewsEdge or any of its
Subsidiaries; but does not include the Merger.
"Break-Up Fee" means a fee of $6,000,000 payable by wire transfer of
------------
immediately available funds to an account designated by the receiving party.
"CERCLA" means the Compensation and Liability Act of 1980, as amended (if
------
applicable) and currently in effect.
"Closing" means the closing of the Merger, which will be held at the
-------
offices of Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts 02110,
or such other place as the parties may agree. All of the document deliveries
and other actions to occur at the Closing will be conclusively deemed to have
occurred at the same time, immediately before the Effective Time.
"Closing Date" means the date on which the Closing occurs.
------------
"contract," when used with reference to any person, means a contract,
--------
agreement, instrument, or understanding, regardless of whether in writing, that
is legally enforceable by or against, or otherwise binding on, that person.
"copies," when used with reference to documents delivered or made available
------
or to be delivered or made available pursuant to this Agreement, means true and
complete copies including all related amendments, consents, and waivers.
"Damages" means all damages, losses, claims, demands, actions, causes of
-------
action, suits, litigations, arbitrations, liabilities, costs, and
<PAGE>
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expenses, including court costs and the reasonable fees and expenses of legal
counsel.
"DGCL" means the Delaware General Corporation Law.
----
"Environmental Laws" means RCRA, CERCLA, SARA, the Federal Clean Water Act,
------------------
the Federal Clean Air Act, the Toxic Substances Control Act, and other laws
relating to health, safety, or the environment.
"EPA" means the United States Environmental Protection Agency.
---
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations of the SEC thereunder, as in effect as of the relevant
time of reference.
"Financial Advisor," when used with reference to RoweCom, means J.P. Morgan
-----------------
& Co., and when used with reference to NewsEdge, means Volpe Brown Whelan &
Company, LLC.
"Hazardous Substance" means any hazardous waste as defined by 42 U.S.C.
-------------------
(S)6903(5), any hazardous substance as defined by 42 U.S.C. (S) 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. (S) 9601(33) or any toxic
substance, oil, or hazardous material or other chemical or substance regulated
by any Environmental Laws.
"HSR Act" means the Hart-Scott Rodino Antitrust Improvements Act of 1976,
-------
as amended.
"including" (regardless of whether capitalized) means "including without
---------
limitation."
"Indebtedness," as applied to any person, means (a) all indebtedness of
------------
such person for borrowed money, whether current or funded, or secured or
unsecured, (b) all indebtedness of such person for the deferred purchase price
of property or services represented by a note or other security, (c) all
indebtedness of such person created or arising under any conditional sale or
other title retention agreement (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of specific property), (d) all indebtedness of such person
secured by a purchase money mortgage or other Lien to secure all or part of
<PAGE>
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the purchase price of property subject to such mortgage or other Lien, (e) all
obligations of such person under leases that have been or must be, in accordance
with generally accepted accounting principles, recorded as capital leases in
respect of which such person is liable as lessee, (f) any liability of such
person in respect of banker's acceptances or letters of credit, and (g) all
indebtedness referred to in clauses (a), (b), (c), (d), (e), or (f) above that
is directly or indirectly guaranteed by such person or which such person has
agreed (contingently or otherwise) to purchase or otherwise acquire or in
respect of which such person has otherwise assured a creditor against loss.
"IPO Date," when used with reference to RoweCom, means March 8, 1999; and
--------
when used with reference to NewsEdge, means August 11, 1995.
"knowledge," when used to qualify a representation or warranty in this
---------
Agreement, has the following meaning:
Where a representation or warranty is made to the best of RoweCom's
knowledge, or with a similar qualification, RoweCom will be conclusively
deemed to have knowledge of any matter with respect to which Richard M.
Rowe, Jeffrey Sands, Kevin Fahey, or Paul Hands has actual knowledge.
Where a representation or warranty is made to the best of NewsEdge's
knowledge, or with a similar qualification, NewsEdge will be conclusively
deemed to have knowledge of any matter with respect to which Donald L.
McLagan, Clifford Pollan, Ronald Benanto, Thomas Barone, or Ilene H. Lang
has actual knowledge.
"laws" (regardless of whether capitalized) means all applicable legal
----
requirements, including statutes, rules, regulations, judgments, decrees,
orders, and administrative requirements.
"Liens" means any and all liens, claims, mortgages, security interests,
-----
pledges, options, rights of first offer or refusal, charges, encumbrances,
limitations on voting rights, and restrictions on transfer of any kind;
excluding, in the case of references to securities, those arising under
applicable securities laws solely by reason of the fact that such securities
were issued pursuant to exemptions from registration under such securities laws.
"Material Adverse Effect" means, with reference to any person, any material
-----------------------
adverse effect on the condition (financial or otherwise), operations,
<PAGE>
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business, assets, rights, liabilities, obligations, or prospects of such person
and its Subsidiaries as a whole, or on such person's ability to consummate the
Merger or the other transactions hereby contemplated or to perform its
obligations under this Agreement.
"Merger Certificate" means a certificate of merger substantially in the
------------------
form of the attached Exhibit D."
---------
"Merger Sub Stock" means Merger Sub's common stock, $0.01 par value per
----------------
share.
"NewsEdge Stock" means NewsEdge's common stock, $.01 par value per share.
--------------
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"person" (regardless of whether capitalized) means any natural person,
------
entity, or association, including any corporation, partnership, limited
liability company, government (or agency or subdivision thereof), trust, joint
venture, or proprietorship.
"RCRA" means the Resource Conservation and Recovery Act, as amended (if
----
applicable) and currently in effect..
"RoweCom Stock" means RoweCom's common stock, $0.01 par value per share.
-------------
"S-4" means a joint proxy statement and registration statement on SEC Form
---
S-4, including all amendments and supplements thereto, relating to the
solicitation of the approval of the Merger by the stockholders of RoweCom and
NewsEdge, respectively, and the registration under the Securities Act of the
shares of RoweCom Stock to be issued in the Merger.
"SARA" means the Superfund Amendments and Reauthorization Act of 1986, as
----
amended (if applicable) and currently in effect.
"SEC" means the United States Securities and Exchange Commission.
---
"SEC Reports," when used with reference to a party, means any and all of
-----------
that party's (i) Annual Reports on Form 10-K or Form 10-KSB relating to its last
three fiscal years, (ii) proxy or information statements relating to any
meetings (annual or special) of its stockholders held during its last three
fiscal years, (iii) other forms, reports, (including annual reports
<PAGE>
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pursuant to Exchange Act rule 14a-3), registration statements, and documents
filed with or provided to the SEC by it (or required to be filed with or
provided to the SEC by it) during its last three fiscal years.
"section" and "sections" (regardless of whether capitalized) refer to the
------- --------
indicated section or sections of this Agreement, unless otherwise indicated.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC thereunder, as in effect as of the relevant
time of reference.
"Stockholders' Approval" is defined in Section 5.4(e).
----------------------
"Subsidiary" means, with respect to any person, any corporation or other
----------
enterprise or non-natural person, a majority (in economic interest and/or voting
power) of the outstanding shares of any class or series of capital stock or
other equity interests are owned by such person or by any Subsidiary of such
person.
"Superior Proposal" means a written Acquisition Proposal that NewsEdge's
-----------------
Board of Directors determines in good faith, based on advice of outside legal
counsel and its Financial Advisor or another reputable investment banking firm
of national reputation, and taking into account the availability of financing
for and likelihood of consummation of such Acquisition Proposal, will yield a
significantly higher value to NewsEdge's stockholders than will the Merger.
"Tax" means any federal, state, local, or foreign income, gross receipts,
---
franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, intangibles, social security,
unemployment, disability, payroll, license, employee, or other tax or levy, of
any kind whatsoever, including any interest, penalties, or additions to tax in
respect of the foregoing.
"Tax Return" means any return, declaration, report, claim for refund,
----------
information return, or other document (including any related or supporting
estimates, elections, schedules, statements, or information) filed or required
to be filed in connection with the determination, assessment, or collection of
any Tax or the administration of any laws relating to any Tax.
<PAGE>
-53-
"Voting Agreement" means a binding written agreement substantially in the
----------------
form of the attached Exhibit E, by which a stockholder of RoweCom or NewsEdge
---------
irrevocably agrees to vote in favor of approving this Agreement and the Merger
and the other transactions contemplated hereby, and not to sell, transfer, or
otherwise dispose of any shares of the capital stock of RoweCom or NewsEdge or
any voting rights of such shares, until after the Effective Time.
14. General.
14.1. Cooperation. Each of the parties will cooperate with the others and
use its best reasonable efforts to prepare all necessary documentation, to
effect all necessary filings, and to obtain all necessary permits, consents,
approvals, and authorizations of all governmental bodies and other third parties
necessary to consummate the transactions contemplated by this Agreement.
14.2. Non-Survival of Provisions. The respective representations,
warranties, rights, obligations, covenants, promises, and other agreements of
the parties set forth in this Agreement or in any other agreement, instrument,
certificate, or other document delivered by any of them in connection with this
Agreement, the Merger, or any of the other transactions contemplated hereby,
(other than those provisions of Sections 2 through 4, 7.14, and 8A that by their
terms are to be performed by RoweCom or the Surviving Corporation after the
Effective Time of the Merger) will terminate as of the Effective Time.
14.3. Expenses. Each of the parties will be responsible for and will pay
all of its own expenses in connection with the negotiation and preparation of
this Agreement and the consummation of the Merger and the other transactions
contemplated hereby; it being understood that if the Merger is consummated, the
expenses of NewsEdge effectively will be borne by the Surviving Corporation.
NewsEdge agrees that its expenses in connection with the negotiation and
preparation of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby will not materially exceed $4,000,000.
14.4. Benefits of Agreement; No Assignments; No Third-Party Beneficiaries.
(a) This Agreement will bind and inure to the benefit of the parties
hereto and their respective successors, and permitted assigns.
<PAGE>
-54-
(b) No party will assign any rights or delegate any obligations hereunder
without the consent of the other parties, and any attempt to do so will be void.
(c) Nothing in this Agreement is intended to or will confer any rights or
remedies on any person other than the parties hereto and their respective
successors, and permitted assigns, except that the persons who immediately
before the Effective Time hold shares of NewsEdge Stock and/or NewsEdge Stock
Options are intended third-party beneficiaries of those provisions of Sections 2
through 4 that by their terms are to be performed by RoweCom or the Surviving
Corporation after the Effective Time of the Merger.
14.5. Notices. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed as follows (or to such other address as the recipient party may
have furnished to the sending party for the purpose pursuant to this section):
(a) If to RoweCom or Merger Sub:
RoweCom Inc.
15 Southwest Park
Westwood, Massachusetts 02090
Attention: Dr. Richard R. Rowe
Chairman and Chief Executive Officer
Telecopier No. (781) 497-6825
with a copy sent at the same time and by the same means to:
Brian Keeler, Esq.
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
<PAGE>
-55-
Telecopier No. (617) 951-8736
(b) If to NewsEdge:
NewsEdge Corporation
80 Blanchard Road
Burlington, Massachusetts 01803
Attention: Donald L. McLagan
Chairman and Chief Executive Officer
Telecopier No. (781) 229-3060
with a copy sent at the same time and by the same means to:
Lawrence S. Wittenberg, Esq.
Testa, Hurwitz & Thibeault LLP
125 High Street
Boston, Massachusetts 02110
Telecopier No. (617) 248-7100
14.6. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
14.7. Captions. The captions of sections or subsections of this Agreement
are for reference only and will not affect the interpretation or construction of
this Agreement.
14.8. Equitable Relief. Each of the parties hereby acknowledges that any
breach of its obligations under this Agreement would cause substantial and
irreparable damage to the parties, and that money damages would be an inadequate
remedy therefor, and accordingly, acknowledges and agrees that each other party
will be entitled to an injunction, specific performance, and/or other equitable
relief to prevent the breach of such obligations.
14.9. Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.
<PAGE>
-56-
14.10. Amendments and Waivers. This Agreement may not be amended, modified,
or supplemented except by a writing duly executed by RoweCom, Merger Sub, and
NewsEdge.
No waiver of any breach or default hereunder will be valid unless in a
writing signed by the waiving party. No failure or other delay by any party
exercising any right, power, or privilege hereunder will be or operate as a
waiver thereof, nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege.
14.11. Entire Agreement. This Agreement, together with the exhibits and
schedules hereto and the other agreements, instruments, certificates, and other
documents referred to herein as having been or to be executed and delivered in
connection with the transactions contemplated hereby, contains the entire
understanding and agreement among the parties, and supersedes any prior
understandings or agreements among them, or between or among any of them, with
respect to the subject matter hereof. Notwithstanding the foregoing, the
provisions of any confidentiality agreement between NewsEdge and RoweCom, will
survive the execution and delivery of this Agreement.
14.12. Governing Law. This Agreement will be governed by and interpreted
and construed in accordance with the internal laws of the State of Delaware, as
applied to contracts under seal made, and entirely to be performed, within
Delaware, and without reference to principles of conflicts or choice of laws.
[The rest of this page is intentionally left blank.]
<PAGE>
- Signature Page to Merger Agreement-
Executed and delivered under seal as of the date first above written.
ROWECOM: ROWECOM INC.
By /s/ Richard R. Rowe
------------------------------
Richard R. Rowe
Chairman and Chief Executive Officer
MERGER SUB: ROWECOM MERGER CORPORATION
By /s/ Richard R. Rowe
------------------------------
Richard R. Rowe
President
NEWSEDGE: NEWSEDGE CORPORATION
By /s/ Donald L. McLagan
------------------------------
Donald L. McLagan
Chairman and Chief Executive Officer
<PAGE>
EXHIBIT 99.1
RoweCom Announces Acquisition Of NewsEdge Corporation
Addition of customized global news applications provide the centerpiece of e-
commerce knowledge offering
CAMBRIDGE, Mass.--December 7, 1999 - RoweCom Inc. (Nasdaq: ROWE), the leading
----
provider of business-to-business e-commerce solutions for managing the purchase
of knowledge resources, today announced the execution of a definitive binding
agreement for the acquisition of NewsEdge Corporation (Nasdaq: NEWZ), a leader
----
in global news and current awareness solutions for business.
Building on the core competencies of both companies and a mutual commitment to
quality service, the acquisition is intended to further RoweCom's strategic
vision of creating a comprehensive e-media news, information and services
environment for managing knowledge resources across the enterprise. Simple,
easy-to-use Web e-commerce tools and excellent client support coupled with
relevant, personalized content offerings deliver immediate value-added benefits
and fiscal control over the deluge of information bombarding today's
organizations. The combination of RoweCom and NewsEdge will facilitate the
emergence of RoweCom's next-generation of information and knowledge management
solutions covering the spectrum of intelligence on which today's professionals
rely.
"The merger of RoweCom and NewsEdge should create a true industry leader and
result in a perfect marriage of content and commerce," said Dr. Richard Rowe,
RoweCom's President and CEO. "The corporate need for information is expanding
rapidly and is accelerating exponentially. The addition of NewsEdge's news and
current awareness services should greatly enhance the appeal of RoweCom's
offerings and will spur the growth of our core knowledge management business
while further satisfying the informational needs of our clients."
The acquisition is intended to permit RoweCom to provide its clients with timely
and customized business, technical and political news from hundreds of sources,
organized into thousands of topics of interest contextually integrated from
NewsEdge into RoweCom's Knowledge Store (kStore) service. Conversely, embedded
links within NewsEdge stories would provide immediate access to related kStore
offerings including over 200,000 magazines and journals; 5,300 electronic
journals; 4,000 market research reports and 12 million article abstracts and
citations from RoweCom's vast catalog; as well as millions of books via RoweCom
partner barnesandnoble.com.
NewsEdge Corporation is the leading independent provider of global news and
current awareness solutions. The NewsEdge Refinery(TM) processes tens of
thousands of news stories each day, categorizing, prioritizing and organizing
them into real-time news services and topics that are delivered directly to the
client's desktop. The company consists of two core business units: "Enterprise,"
which derives its revenues from corporate subscribers; and "Individual.com,
Inc.(TM)," a free Web-based service for individual business people, which
derives its revenues from advertising and e-commerce.
Under the terms of the agreement, RoweCom will exchange .26 shares of common
stock for each share of NewsEdge stock. Based on RoweCom's closing price on
December 6th, the transaction is valued at about $227 million. In addition,
NewsEdge and RoweCom will pursue over the remainder of the month a number of
options for Individual.com, Inc., including the sale of a significant portion of
the company to an investor. The acquisition is expected to be completed in the
1st quarter of 2000. The transaction is subject to customary closing conditions,
including approval by both RoweCom and NewsEdge stockholders, and is subject to
expiration or termination of the waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act.
"The deluge of information on the Internet has proven to be too much for the
average business person to sift through efficiently and effectively," said Don
McLagan, NewsEdge's
<PAGE>
Chairman and CEO. "Together, RoweCom and NewsEdge solutions will help our
clients solve the twin problems of information overload and information
overlook. Our clients and shareholders alike will benefit from the synergies
created by the combination of our two companies."
The acquisition of NewsEdge will represent an example of the achievement of all
three tenets of RoweCom's growth strategy as it was stated during the company's
IPO early in 1999.
. Expand Market Share. RoweCom would instantly add 1,000 new corporate
clients to its global client base and over 650,000 new business end
users, at a cost lower than that of organic growth via sales efforts.
NewsEdge enterprise clients include 43 of the Business Week global 50.
RoweCom would leverage NewsEdge's large enterprise sales team of nearly 100
individuals, who are dedicated to promoting the company's many services and
products to new accounts as well as servicing and up-selling to existing
ones. The company's solution-based sales method focuses on meeting the
individual needs of each of its clients.
RoweCom's leading presence in global markets will be bolstered by
NewsEdge's direct client-focused operations in the U.S., Canada, the United
Kingdom, the Netherlands, Switzerland and Japan, and by NewsEdge agency
relationships in markets such as Israel, Argentina and South Africa.
The addition of such a significant number of corporate and business end
users would greatly mitigate the seasonality currently experienced by
RoweCom and inherent to the sale of serials to corporate and academic
institutions.
. Deepen Content. RoweCom intends to offer its clients access to news
and current awareness services from the NewsEdge Refinery. This
includes real-time newswires, newspapers, magazines, trade journals
and specialty news services, delivered electronically either real-
time, pre-publication or at the time of publication. The NewsEdge
Refinery enhances news value for clients by normalizing content
structure and adding metadata to stories making the news easier to
search. The addition of contextual links pointed to kStore resources
will add even greater value to clients. NewsEdge will also deliver
NewsEdge Review topics to RoweCom clients.
The acquisition would supplement RoweCom's current market-leading
electronic text database both with respect to the number of titles as well
as the subject matter. Whereas the content offered by RoweCom's IQ service
focuses primarily on science, technical and medical publications, NewsEdge
would add content centered on business and financial information.
NewsEdge's subscription-based real-time news and current awareness services
creates for RoweCom an additional revenue stream while at the same time
providing kStore clients with more incentives to visit
<PAGE>
the service repeatedly, creating "stickiness." The addition of content will
also facilitate the migration of RoweCom's traditional corporate clients to
the company's online service. Due to their increasing need for information
on a timely basis, RoweCom's academic and government clients are expected
to benefit as well.
. Increase Functionality. The customizable nature of NewsEdge's offering
would enhance RoweCom's ability to provide its clients with a broad
range of personalized knowledge products and services. The use of
personalized information enhances the company's ability to cross-sell
other products its clients may want or need.
"Our Enterprise clients require the most rigorous and comprehensive knowledge
environments," said Cliff Pollan, NewsEdge's President and COO. "The merger
leverages our joint strengths, empowering our users with a 21/st/ Century
solution."
Dr. Rowe concluded, "The acquisition would create significant operational
benefits for our company. We will expand our client base, create another
distribution channel for our core products, introduce new sources of revenue,
add content and services that will create significant operating leverage, and
enhance our ability to foster sales via increased customization."
About RoweCom
A first mover in business-to-business e-commerce, RoweCom Inc. develops and
operates Web-based services that enable businesses and academic institutions to
manage the acquisition of print and electronic knowledge resources such as
magazines, newspapers, articles and books. RoweCom's flagship services,
Knowledge Store (kStore), Knowledge Library (kLibrary), Subscription Depot and
Information Quest provide new levels of control, convenience, and cost-savings,
allowing companies to order, pay for and manage 200,000 titles online as well as
millions of discounted books via RoweCom partner barnesandnoble.com. With
clients ranging from Fortune 1000 companies to large academic libraries, RoweCom
serves organizations with intensive knowledge requirements and high-volume
purchases. The publicly held company (Nasdaq: ROWE) is headquartered in
Westwood, Mass. and has several offices in North America, Europe and Australia.
In the corporate arena, RoweCom focuses on knowledge intensive industries such
as professional services, financial services, health services and high
technology. RoweCom's over 20,000 clients include industry leaders such as
PricewaterhouseCoopers, Arthur Andersen, Ernst & Young, KPMG, Prudential
Securities, John Hancock, Charles Schwab (NYSE: SCH), Dun & Bradstreet (NYSE:
DNB), BASF (GF: BAS), Hewlett Packard (NYSE: HWP), Owens Corning (NYSE: OWC),
First Union (NYSE: FTU), Aurora Healthcare and Johns Hopkins University. RoweCom
also has an impressive partner list that includes barnesandnoble.com (Nasdaq:
BNBN), Ariba (Nasdaq: ARBA), Commerce One (Nasdaq: CMRC) and Sun-Netscape
Alliance. For more information about RoweCom, please visit the company's Web
site at http://www.rowe.com.
About NewsEdge Corporation
NewsEdge Corporation (Nasdaq: NEWZ) is the leader in global news and current
awareness solutions for business. The Company's mission is to make news valuable
for business by helping people find the most important, relevant stories from an
overwhelming volume of daily news and enabling them to act on the most current
information possible. NewsEdge's Enterprise unit serves approximately 1,450
organizations, including 43 of Business Week's 50 largest global companies with
award-winning news and information solutions including NewsEdge Insight(TM),
NewsEdge Live(TM), and NewsEdge Review(TM) topics. NewsEdge is headquartered in
Burlington, Massachusetts with sales offices and distributors throughout North
America, South America, Europe, Japan and the Middle East. Wholly owned
subsidiary, Individual.com, Inc(TM) - formerly NewsPage.com, Inc. - provides
over 1 million
<PAGE>
business professionals with the most precise and highly customized free
collection of specialized trade and industry news, combined with business, world
and financial news available on the Internet today. For more information about
NewsEdge Corporation, please visit the company's Web site at
http://www.newsedge.com.
- -----------------------
##
Except for the historical information contained herein, the matters discussed in
this news release may contain forward-looking statements made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. All
forward-looking statements involve risks and uncertainties. RoweCom's or
NewsEdge's actual results may differ materially from the results discussed in
the forward-looking statements. Factors that might cause such a difference
include, but are not limited to, those discussed in the companies' SEC filings.
RoweCom Contact NewsEdge Contact
Paul Hands Sarah Garnsey
RoweCom Inc NewsEdge Corporation
(617) 497-5800 (781) 229-3351
[email protected] [email protected]
Investor Contact (RoweCom) Media Contact
Gene Marbach Joanne Gallucci
Makovsky & Co Makovsky & Co.
(212) 508-9645 (212) 508-9648
[email protected] [email protected]
<PAGE>
Exhibit 99.2
VOTING AGREEMENT
This Voting Agreement (this "Agreement") dated as of December 7, 1999, is by
---------
and among RoweCom Inc. ("RoweCom"), a Delaware corporation; RoweCom Merger
-------
Corporation ("Merger Sub"), a Delaware corporation that is a wholly owned
----------
subsidiary of RoweCom; NewsEdge Corporation ("NewsEdge"), a Delaware
--------
corporation; Dr. Richard R. Rowe, who is a stockholder and the Chairman of the
Board and Chief Executive Officer of RoweCom; and Donald L. McLagan, who is a
stockholder and the Chairman of the Board and Chief Executive Officer of
NewsEdge (each of Dr. Rowe and Mr. McLagan, a "Stockholder," and both of them,
-----------
collectively, the "Stockholders").
------------
RoweCom, Merger Sub, and NewsEdge want to enter into an Agreement and Plan of
Merger and Reorganization (the "Merger Agreement") dated or to be dated as of or
about the date of this Agreement, pursuant to which Merger Sub will be merged
with and into NewsEdge (the "Merger"), with NewsEdge being the surviving
------
corporation in the Merger and becoming a wholly owned subsidiary of RoweCom.
RoweCom, Merger Sub, and NewsEdge would not be willing to enter into the
Merger Agreement or to incur the significant out-of-pocket and opportunity costs
of proceeding with the actions necessary to consummate the Merger unless each of
Dr. Rowe and Mr. McLagan enters into this Agreement. Each of Dr. Rowe and Mr.
McLagan believes the Merger will benefit him, and is entering into this
Agreement to induce RoweCom, Merger Sub, and NewsEdge to enter into the Merger
Agreement.
Accordingly, the parties agree as follows:
As used in this Agreement, the term "his Company," when used with reference
to Dr. Rowe, means RoweCom, and when used with reference to Mr. McLagan, means
NewsEdge; and the term "Other Company," when used with reference to Dr. Rowe,
means NewsEdge, and when used with reference to Mr. McLagan, means RoweCom.
Notwithstanding any other provision of this Agreement, the obligations of
each of the Stockholders hereunder are several and not joint or joint and
several.
1. Representations and Warranties. Each of the Stockholders severally
represents and warrants, with respect to himself only, as follows:
<PAGE>
-2-
(a) The Stockholder is the record and beneficial owner of the number of
shares (his "Shares") of his Company's Common Stock ("Capital Stock")
------ -------------
indicated below his name in the attached signature pages. This Agreement has
been duly authorized, executed, and delivered by him, and constitutes his
valid and binding agreement, enforceable against him in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws of general
application respecting creditors' rights and by general equitable principles.
(b) His execution and delivery of this Agreement, performance of his
obligations hereunder, and consummation of the transactions contemplated
hereby will not: (i) result in a violation of, default under, or conflict
with any contract, trust, commitment, agreement, understanding, arrangement,
or restriction of any kind to which he is a party or by which he is bound or
to which his Shares are subject, or (ii) violate or require any consent,
approval, or notice under any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to him or his Shares.
(c) His Shares and the certificates representing them are now, and at all
times during the term hereof will be, held by him (or by a nominee or
custodian for his benefit), free and clear of all liens, security interests,
proxies, voting trusts or agreements, or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
(d) He understands and acknowledges that RoweCom, Merger Sub, and
NewsEdge are entering into the Merger Agreement in reliance upon his
execution and delivery of this Agreement, and that that the irrevocable proxy
set forth in Section 4 is granted to induce RoweCom, Merger Sub, and NewsEdge
to do so.
2. Voting Agreement. Each of the Stockholders, severally, irrevocably
agrees as follows:
(a) At any meeting (including adjournments and postponements) of
stockholders of his Company called to vote upon the Merger, and in any
other circumstances upon which a vote, consent, or other approval with
respect to the Merger is sought (a "Stockholders' Meeting"), he will vote
---------------------
(or cause to be voted) all of his Shares in favor of the Merger, the Merger
Agreement, and each of the other transactions contemplated by the Merger
Agreement that is submitted to a vote of his Company's stockholders.
<PAGE>
-3-
(b) At any meeting (including adjournments and postponements) of
stockholders of his Company or in any other circumstances upon which their
vote, consent, or other approval is sought, he will vote (or cause to be
voted) all of his Shares against: (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation,
combination, sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding-up of or by his Company, and (ii) any
amendment of his Company's certificate of incorporation or bylaws or other
proposal or transaction involving his Company or any of its subsidiaries
that would in any way impede, frustrate, prevent, or nullify the Merger,
the Merger Agreement, or any of the other transactions contemplated by the
Merger Agreement (each of the foregoing in clause (i) or (ii) above, a
"Competing Transaction").
---------------------
3. Covenants. Each Stockholder, severally, agrees not to: (i) transfer
(which term for purposes of this Agreement includes without limitation any
sale, gift, pledge, or other disposition), or consent to or permit any
transfer of any of his Shares or any interest therein, except pursuant to
the Merger; (ii) enter into any contract, option, or other agreement or
understanding with respect to any transfer of any of his Shares or any
interest therein; (iii) grant any proxy, power of attorney, or other
authorization in or with respect to his Shares, except for this Agreement;
(iv) deposit his Shares into a voting trust or enter into a voting
agreement or arrangement with respect to his Shares; (v) initiate, solicit,
or encourage, or take any action to facilitate the making of, any offer or
proposal that constitutes or is reasonably likely to lead to an Acquisition
Proposal (as defined in the Merger Agreement); or (vi) in the event of any
unsolicited proposed Acquisition Proposal, engage in negotiations with or
discussions with, or provide any information or data to, any person or
entity (other than RoweCom and its representatives) relating to any
Acquisition Proposal.
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each of the Stockholders hereby irrevocably grants to and appoints
the other, in the other's capacity as Chief Executive Officer of the Other
Company, and any individual who hereafter may succeed to such office of the
Other Company, as such Stockholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place, and stead of such Stockholder, to
vote such Stockholder's Shares, or grant a consent or approval in respect of
such Stockholder's Shares: (i) in favor of the Merger, the Merger Agreement,
and each of the other transactions contemplated by the Merger
<PAGE>
-4-
Agreement, and (ii) against any Competing Transaction.
(b) Each Stockholder represents that any proxies heretofore given (not
including the proxy granted herein) in respect of such Stockholder's Shares are
not irrevocable, and that any such proxies are hereby revoked.
(c) Each Stockholder hereby acknowledges and agrees that his irrevocable
proxy set forth in this Section 4: (i) is given in connection with and to
induce the execution of the Merger Agreement and to secure the performance of
the duties of the Stockholder under this Agreement, and (ii) is coupled with an
interest on the part of each of the other parties to this Agreement, and may not
be revoked. Each Stockholder hereby ratifies and confirms all that his proxy
and attorney-in-fact may lawfully do or cause to be done by virtue of the
granting of such Stockholder's irrevocable proxy.
5. Certain Events. Each of Stockholders severally agrees that this
Agreement and his obligations hereunder will attach to his Shares and will be
binding on any person or entity to which legal or beneficial ownership of any of
his Shares may pass, whether by operation of law or otherwise, including without
limitation his heirs, legatees, successors, and assigns. If either Stockholder
acquires additional shares of his Company's Capital Stock or other voting
securities, whether by purchase, gift, by reason of any stock split, stock
dividend, merger, reorganization, recapitalization, or other change in the
capital structure of his Company affecting its Capital Stock, or otherwise, his
obligations hereunder will apply to any and all such additional shares of
Capital Stock and other voting securities.
6. Stop Transfer. Each of RoweCom and NewsEdge agrees not to register or
permit the registration of, or in any way to recognize or give effect to, any
transfer or purported transfer of any Shares made or purported to have been made
other than compliance with this Agreement.
7. Further Assurances. Each of the Stockholders, upon the Other Company's
request, will execute and deliver such additional documents and take such
further actions as may reasonably be requested by the Other Company to carry out
the purposes of this Agreement.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; will terminate, and the proxies granted under paragraph 4
will expire, upon the earlier of the "Effective Time" (as defined in the Merger
Agreement) or termination of the Merger Agreement in accordance with Section 12
thereof.
<PAGE>
-5-
9. Enforcement Costs. If any party to this Agreement institutes an action
against any other party for the enforcement of this Agreement, the prevailing
party in such action will be entitled to reimbursement from the non-prevailing
party, on demand, of all costs and expenses incurred by the prevailing party in
connection with such action, including court costs and reasonable legal fees.
10. Miscellaneous.
10.1. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
10.2. Captions. The captions of sections or subsections of this Agreement
are for reference only and will not affect the interpretation or construction of
this Agreement.
10.3. Equitable Relief. Each of the parties hereby acknowledges that any
breach of his or its obligations under this Agreement would cause substantial
and irreparable damage to the other parties, and that money damages would be an
inadequate remedy therefor, and accordingly, acknowledges and agrees that each
other party will be entitled to an injunction, specific performance, and/or
other equitable relief to prevent the breach of such obligations.
10.4. Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.
10.5. Amendments and Waivers. This Agreement may not be amended, modified,
or supplemented except by a writing duly executed by RoweCom, Merger Sub,
NewsEdge, and each of the Stockholders.
No waiver of any breach or default hereunder will be valid unless in a
writing signed by the waiving party. No failure or other delay by any party
exercising any right, power, or privilege hereunder will be or operate as a
waiver thereof, nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege.
10.6. Entire Agreement. This Agreement, together with the Merger
Agreement, contains the entire understanding and agreement among the
<PAGE>
-6-
parties, and supersedes any prior understandings or agreements among them, or
between or among any of them, with respect to the subject matter hereof.
10.7. Governing Law. This Agreement will be governed by and interpreted and
construed in accordance with the internal laws of the State of Delaware, as
applied to contracts under seal made, and entirely to be performed, within
Delaware, and without reference to principles of conflicts or choice of laws.
[The rest of this page is intentionally left blank.]
<PAGE>
- Signature Page to Voting Agreement -
Executed and delivered as an agreement under seal as of the date first above
written.
ROWECOM: ROWECOM INC.
By /s/ Richard R. Rowe
------------------------------------------
Dr. Richard R. Rowe
Chairman and Chief Executive Officer
MERGER SUB: ROWECOM MERGER CORPORATION
By /s/ Richard R. Rowe
------------------------------------------
Dr. Richard R. Rowe
President
NEWSEDGE: NEWSEDGE CORPORATION
By /s/ Donald L. McLagan
------------------------------------------
Donald L. McLagan
Chairman and Chief Executive Officer
DR. ROWE:
/s/ Richard R. Rowe
---------------------------------------------
(signature)
Numbers of shares of RoweCom's Capital Stock
owned of record and beneficially: 1,441,848.
(An additional 258,993 shares are in the process of being
issued to Dr. Rowe. Pursuant to Section 5, once issued,
these additional shares will be subject to this
Agreement.)
MR. MCLAGAN:
/s/ Donald L. McLagan
---------------------------------------------
(signature)
Numbers of shares of NewsEdge's Capital Stock
owned of record and beneficially: 1,759,602
