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Published: 2008-03-26

Agreement and Plan of Merger - Lycos Inc. and WhoWhere? Inc.



                          AGREEMENT AND PLAN OF MERGER
                                  BY AND AMONG
                                   LYCOS, INC.
                             WHAT ACQUISITION CORP.
                                 WHOWHERE? INC.
                                       AND
                             CERTAIN SHAREHOLDERS OF
                                 WHOWHERE? INC.
                                      DATED
                                 AUGUST 7, 1998
                            
                                      - 1 -






                                TABLE OF CONTENTS

                                                                         Page


ARTICLE I

         THE MERGER.....................................................- 1 -
         1.1      The Merger............................................- 1 -
         1.2      Effective Time........................................- 2 -
         1.3      Effect of the Merger..................................- 2 -
         1.4      Articles of Incorporation; By-Laws....................- 2 -
         1.5      Directors and Officers................................- 2 -
         1.6      Additional Actions....................................- 3 -

ARTICLE II

         CONSIDERATION; CONVERSION OF SHARES............................- 3 -
         2.1      Merger Consideration..................................- 3 -
         2.2      Conversion of Shares..................................- 3 -
         2.3      Exchange of Certificates..............................- 6 -
         2.4      No Fractional Securities..............................- 7 -
         2.5      Stock Transfer Books..................................- 7 -
         2.6      No Further Ownership Rights in Company Stock..........- 7 -
         2.7      Adjustment Event......................................- 7 -
         2.8      Escrow................................................- 8 -
         2.9      Tax Consequences......................................- 8 -

ARTICLE III

         REPRESENTATIONS AND WARRANTIES OF THE
         COMPANY AND THE PRINCIPAL SHAREHOLDERS
          .............................................................- 8 -
         3.1      Corporate Organization...............................- 8 -
         3.2      Authorization........................................- 9 -
         3.3      Consents and Approvals; No Violations................- 9 -
         3.4      Capitalization......................................- 10 -
         3.5      Financial Statements................................- 11 -
         3.6      Absence of Undisclosed Liabilities..................- 11 -
         3.7      Absence of Certain Changes or Events................- 11 -
         3.8      Legal Proceedings, etc..............................- 12 -
         3.9      Taxes...............................................- 12 -
         3.10     Title to Properties and Related Matters.............- 14 -

                                       (i)






         3.11     Intellectual Property; Proprietary Rights; Employee 
                  Restrictions........................................- 15 -
         3.12     Contracts...........................................- 16 - 
         3.13     Employees; Employee Benefits........................- 18 -  
         3.14     Compliance with Applicable Law......................- 21 - 
         3.15     Ability to Conduct the Business.....................- 21 - 
         3.16     Major Customers.....................................- 22 -   
         3.17     Consultants, Sales Representatives and Other Agents.- 22 - 
         3.18     Accounts Receivable.................................- 22 -  
         3.19     Insurance...........................................- 23 -
         3.20     Bank Accounts; Powers of Attorney...................- 23 -   
         3.21     Minute Books, etc...................................- 23 - 
         3.22     Related Person Indebtedness and Contracts...........- 23 -
         3.23     Brokers; Payments...................................- 23 -
         3.24     Company Action......................................- 24 - 
         3.25     Disclosure..........................................- 24 -

ARTICLE IV

         REPRESENTATIONS AND WARRANTIES
         OF THE PRINCIPAL SHAREHOLDERS...............................- 24 -

ARTICLE V

         REPRESENTATIONS AND WARRANTIES
         OF THE PARENT AND ACQUISITION...............................- 25 -
         5.1      Corporate Organization.............................- 25 -
         5.2      Authorization......................................- 26 -
         5.3      Consents and Approvals; No Violations..............- 26 -
         5.4      Capitalization.....................................- 27 -
         5.5      SEC Reports and Financial Statements...............- 27 -
         5.6      Absence of Certain Changes.........................- 28 -
         5.7      Litigation.........................................- 28 -
         5.8      Tax Treatment of Merger............................- 28 -
         5.9      Disclosure.........................................- 28 -

ARTICLE VI

         CONDUCT OF BUSINESS OF THE COMPANY AND
         THE PARENT PRIOR TO THE EFFECTIVE TIME......................- 29 -
         6.1      Conduct of Business of the Company.................- 29 -
         6.2      Conduct of Business of the Parent..................- 30 -
         6.3      Conduct of Business of Acquisition.................- 31 -
         6.4      Other Negotiations.................................- 31 -


                                      (ii)






ARTICLE VII

         ADDITIONAL AGREEMENTS.......................................- 31 -
         7.1      Access to Properties and Records...................- 31 -
         7.2      Shareholder Approval...............................- 32 -
         7.3      Reasonable Efforts; etc............................- 32 -
         7.4      Material Events....................................- 33 -
         7.5      Registration Statement on Form S-8.................- 33 -
         7.6.     Fees and Expenses..................................- 33 -
         7.7      Employees..........................................- 33 -
         7.8      Nasdaq National Market Listing.....................- 34 -
         7.9      Tax Treatment......................................- 34 -
         7.10     Indemnification....................................- 34 -
         7.11     Shares of Parent Common Stock......................- 34 -

ARTICLE VIII

         CONDITIONS TO THE OBLIGATIONS OF
         THE PARENT AND ACQUISITION..................................- 35 -
         8.1      Representations and Warranties True................- 35 -
         8.2      Performance........................................- 35 -
         8.3      Absence of Litigation..............................- 35 -
         8.4      Consents...........................................- 36 -
         8.5      Additional Agreements..............................- 36 -
         8.6      Opinion of Venture Law Group.......................- 36 -
         8.7      Appraisal Rights...................................- 36 -
         8.8      Termination of Agreements..........................- 36 -
         8.9      Certificate of Merger..............................- 37 -
         8.10     Completion of Due Diligence........................- 37 -
         8.11     Conversion of Company Preferred Stock..............- 37 -

ARTICLE IX

         CONDITIONS TO THE OBLIGATIONS OF THE
         COMPANY AND THE PRINCIPAL SHAREHOLDERS.....................- 37 -
         9.1      Representations and Warranties True...............- 37 -
         9.2      Performance.......................................- 37 -
         9.3      Absence of Litigation.............................- 38 -
         9.4      Consents..........................................- 38 -
         9.5      Additional Agreements.............................- 38 -
         9.6      Opinion of Hutchins, Wheeler & Dittmar............- 38 -
         9.7      Certificate of Merger.............................- 38 -
         9.8      Tax Opinion.......................................- 38 -

                                      (iii)







ARTICLE X

         TERMINATION...............................................- 39 -
         10.1     Termination......................................- 39 -
         10.2     Effect of Termination............................- 39 -

ARTICLE XI

         INDEMNIFICATION; SURVIVAL OF
         REPRESENTATIONS AND WARRANTIES............................- 39 -
         11.1     Indemnity Obligations of the Holders.............- 39 -
         11.2     Appointment of Representative....................- 40 -
         11.3     Notification of Claims...........................- 40 -
         11.4     Duration.........................................- 41 -
         11.5     Escrow...........................................- 41 -
         11.6     No Contribution..................................- 42 -
         11.7.    Liability of Principal Shareholders..............- 42 -
ARTICLE XII

         REGISTRATION RIGHTS.......................................- 42 -
         12.1     Registration Rights..............................- 42 -
         12.2     Indemnification..................................- 45 -
         12.3     Current Public Information.......................- 46 -
         12.4     Termination of Registration Rights...............- 46 -
         12.5     Transferability of Registration Rights...........- 46 -

ARTICLE XIII

         MISCELLANEOUS PROVISIONS..................................- 46 -
         13.1     Amendment........................................- 46 -
         13.2     Waiver of Compliance.............................- 47 -
         13.3     Notices..........................................- 47 -
         13.4     Assignment.......................................- 48 -
         13.5     No Third Party Beneficiaries.....................- 48 -
         13.6     Public Announcements.............................- 48 -
         13.7     Brokers and Finders..............................- 48 -
         13.8     Counterparts.....................................- 49 -
         13.9     Headings.........................................- 49 -
         13.10    Entire Agreement.................................- 49 -
         13.11    Governing Law....................................- 49 -
         13.12    Survival.........................................- 49 -

                                      (iv)








EXHIBITS

         Exhibit A         Voting Agreement
         Exhibit B-1       Certificate of Merger (Delaware
         Exhibit B-2       Agreement of Merger (California)
         Exhibit C         Form of Letter of Transmittal
         Exhibit D         Escrow Agreement
         Exhibit E         Forms of Offer Letters
         Exhibit F         Form of Nondisclosure and Inventions Agreement
         Exhibit G         Opinion of Venture Law Group, A Professional 
                              Corporation
         Exhibit H         Opinion of Hutchins, Wheeler & Dittmar
         Exhibit I         Form of Stock Option Assumption Agreement
         Exhibit J         Form of Warrant Assumption Agreement
         Exhbit K          Tax Opinion of Venture Law Group, A Professional 
                               Corporation

                                       (v)






                          AGREEMENT AND PLAN OF MERGER

         AGREEMENT  AND PLAN OF MERGER  dated August 7, 1998 by and among Lycos,
Inc.,  a  corporation  organized  under the laws of the State of  Delaware  (the
"Parent"), What Acquisition Corp., a corporation organized under the laws of the
State of Delaware and a wholly-owned  subsidiary of the Parent  ("Acquisition"),
WhoWhere?  Inc.,  a  corporation  organized  under  the  laws  of the  State  of
California (the  "Company"),  and certain  shareholders of the Company,  each of
whom is listed on the  signature  page hereto (each a "Principal  Shareholder  "
and, collectively, the "Principal Shareholders").

         WHEREAS, the respective Boards of Directors of the Parent,  Acquisition
and the  Company  have  approved  the  merger of  Acquisition  with and into the
Company  (the  "Merger"),  pursuant to which the Company  will be the  surviving
corporation  and the  shareholders of the Company and all holders of options and
warrants to purchase capital stock of the Company (collectively,  the "Holders")
will be entitled to receive the  consideration  provided for in this  Agreement,
all upon the terms and subject to the conditions set forth herein;

         WHEREAS,  it  is  intended  that  the  Merger  qualify  as  a  tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"); and

         WHEREAS, as a condition and inducement to Parent's willingness to enter
into this Agreement,  the Principal  Shareholders and certain other shareholders
of the Company have, concurrently with the execution of this Agreement, executed
and  delivered  a Voting  Agreement  in the form  attached  hereto as Exhibit A,
pursuant to which the Principal  Shareholders and such other  shareholders  have
agreed to vote  their  shares  of the  Company's  capital  stock in favor of the
Merger and to grant Parent irrevocable proxies to vote such shares.

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

                                    ARTICLE I

                                   THE MERGER

         1.1 The Merger.  (a) At the Effective Time (as defined in Section 1.2),
and  subject  to and  upon the  terms  and  conditions  of this  Agreement,  the
California  General  Corporation  Law  (the  "CGCL")  and the  Delaware  General
Corporation  Law (the  "DGCL"),  Acquisition  shall be merged  with and into the
Company,  the separate  corporate  existence of Acquisition shall cease, and the
Company  shall  continue  as  the  surviving  corporation.  The  Company  as the
surviving  corporation after the Merger is hereinafter  sometimes referred to as
the "Surviving Corporation."

                  (b) Closing.  Unless this Agreement shall have been terminated
and the transactions  herein  contemplated shall have been abandoned pursuant to
Article X and subject to the  satisfaction or waiver of the conditions set forth
in Articles VIII and IX, the consummation of

                                      - 1 -






the Merger (the  "Closing")  will take place as promptly as practicable  (and in
any  event  within  two  business  days)  after  satisfaction  or  waiver of the
conditions  set forth in  Articles  VIII and IX,  at the  offices  of  Hutchins,
Wheeler & Dittmar,  A  Professional  Corporation,  101 Federal  Street,  Boston,
Massachusetts, unless another date, time or place is agreed to in writing by the
Company  and the Parent.  The date of such  Closing is referred to herein as the
"Closing Date".

         1.2 Effective Time. As promptly as practicable  after the  satisfaction
or waiver of the  conditions  set forth in  Articles  VIII and IX,  the  parties
hereto  shall  cause  the  Merger to be  consummated  by  filing  agreements  or
certificates  of merger as contemplated by the CGCL and the DGCL in the forms of
Exhibit B-1 and Exhibit B-2 hereto (collectively,  the "Certificate of Merger"),
together with any required related certificates,  with the Secretary of State of
the State of California and the Secretary of State of the State of Delaware,  in
such  form as  required  by,  and  executed  in  accordance  with  the  relevant
provisions  of,  the  CGCL and the  DGCL  (the  time of such  filing  being  the
"Effective Time").

         1.3 Effect of the  Merger.  At the  Effective  Time,  the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable  provisions of the CGCL and 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 the Company and Acquisition shall
vest in the Surviving Corporation,  and all debts, liabilities and duties of the
Company and  Acquisition  shall become the debts,  liabilities and duties of the
Surviving Corporation.

         1.4      Articles of Incorporation; By-Laws.

                  (a) Articles of Incorporation.  Unless otherwise determined by
the Parent prior to the Effective  Time, at the Effective  Time, the Articles of
Incorporation of the Company,  as in effect  immediately  prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving  Corporation until
thereafter   amended  in   accordance   with  the  CGCL  and  such  Articles  of
Incorporation.

                  (b) By-Laws.  Unless otherwise  determined by the Parent prior
to the  Effective  Time,  the By-Laws of the Company,  as in effect  immediately
prior to the Effective Time,  shall be the By-Laws of the Surviving  Corporation
until  thereafter   amended  in  accordance  with  the  CGCL,  the  Articles  of
Incorporation of the Surviving Corporation and such By-Laws.

         1.5 Directors and Officers.  The directors of  Acquisition  immediately
prior to the  Effective  Time shall be the initial  directors  of the  Surviving
Corporation,  each  to  hold  office  in  accordance  with  the  Certificate  of
Incorporation  and By-Laws of the  Surviving  Corporation,  and the  officers of
Acquisition  immediately  prior  to the  Effective  Time  shall  be the  initial
officers  of the  Surviving  Corporation,  in each case until  their  respective
successors are duly elected or appointed and qualified.


                                      - 2 -






         1.6 Additional  Actions.  If, at any time after the Effective Time, the
Surviving  Corporation  shall  consider or be advised  that any deeds,  bills of
sale,  assignments,  assurances  or any other  acts or things are  necessary  or
desirable to vest, perfect or confirm, of record or otherwise,  in the Surviving
Corporation, its right, title or interest in or to any of the rights, properties
or assets of Acquisition or the Company acquired or to be acquired by reason of,
or as a result of, the Merger,  or  otherwise  to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors shall
be authorized to execute and deliver,  in the name and on behalf of  Acquisition
or the Company, all such deeds, bills of sale, assignments and assurances and to
do, in the name and on behalf of Acquisition or the Company, all such other acts
and things necessary or desirable to vest, perfect or confirm any and all right,
title or  interest  in, to or under  such  rights,  properties  or assets in the
Surviving Corporation or otherwise to carry out the purposes of this Agreement.

                                   ARTICLE II

                       CONSIDERATION; CONVERSION OF SHARES

         2.1 Merger Consideration. Except as set forth in Section 2.2(f) hereof,
the  consideration  payable in the Merger to holders of shares of the  Company's
Common Stock, par value $.001 per share ("Company Common Stock"),  and shares of
each series of the  Company's  Preferred  Stock,  par value $.001 per share (the
"Company  Preferred  Stock" and,  together with the Company  Common  Stock,  the
"Company Stock"),  shall consist solely of shares of the Common Stock, par value
$.01 per share, of the Parent  ("Parent  Common  Stock"),  such shares of Parent
Common Stock to be issuable at the Closing in accordance  with the terms of this
Agreement.

         2.2      Conversion of Shares.

                  (a)  Conversion  of  Shares.   Each  share  of  Company  Stock
(treating all shares of Company Preferred Stock as having been converted,  as of
the  Effective  Time,  into  shares of Company  Common  Stock at the  respective
conversion  ratios  therefor)  issued and  outstanding  as of the Effective Time
(other than shares owned by holders who have properly  exercised their rights of
appraisal  within the meaning of Chapter 13 of the CGCL  ("Dissenting  Shares"))
shall,  by virtue of the Merger and without any action on the part of the holder
thereof,  automatically be converted into that number of shares of Parent Common
Stock  as  shall  be  obtained   by  dividing   (A)   2,419,006   (the   "Merger
Consideration")  minus any Expense Shares (as defined in Section 7.6) by (B) the
number of Fully  Diluted  Shares (as  hereinafter  defined),  with the resulting
quotient  (carried  to four  decimal  places)  being  referred  to herein as the
"Exchange  Ratio." "Fully Diluted  Shares" shall be equal to the total number of
outstanding shares of Company Common Stock calculated on a fully diluted,  fully
converted basis as though all convertible debt and equity securities  (including
the  Company  Preferred  Stock and Company  Preferred  Stock  issuable  upon the
exercise of any outstanding warrants) and outstanding options (whether vested or
unvested) and  outstanding  warrants had been converted or exercised into Common
Stock,

                                      - 3 -






provided that the term "Fully Diluted  Shares" shall exclude forty percent (40%)
of the sum of (x) the number of shares of Company Common Stock issuable upon the
exercise of outstanding  stock options which are unvested as of the Closing Date
after giving effect to the Merger and (y) the number of shares of Company Common
Stock  outstanding  on the Closing  Date which are  unvested  and subject to the
right of  repurchase  as of the Closing Date after giving  effect to the Merger.
Schedule 2.2(a) sets forth the number of outstanding  unvested stock options and
unvested shares after giving effect to the Merger and the holders  thereof.  The
Exchange Ratio shall not change as a result of  fluctuations in the market price
of Parent  Common Stock  between the date of this  Agreement  and the  Effective
Time. The aggregate  number of shares of Parent Common Stock issued  pursuant to
this  Section  2.2(a)  shall be  referred  to in this  Agreement  as the "Merger
Shares."

                  (b)      Treasury Shares.  Each share of Company Common Stock 
held in the Company's treasury as of the Effective Time, if any, shall, by 
virtue of the Merger, be canceled without payment of any consideration therefor.

                  (c) Stock  Options.  At the Effective  Time,  the  outstanding
options to purchase an  aggregate of up to  3,545,662  shares of Company  Common
Stock (each a "Stock  Option")  granted under the Company's 1995 Stock Plan (the
"Company Stock Plan"),  whether  vested or unvested,  shall be deemed assumed by
the Parent and deemed to constitute an option to acquire,  on the same terms and
conditions  as were  applicable  under such Stock Option prior to the  Effective
Time  (including  terms and  conditions  relating to such Stock  Option's  term,
exercisability, vesting schedule and status as an "incentive stock option" under
Section 422 of the Code),  the number (rounded down to the nearest whole number)
of shares of Parent Common Stock equal to the aggregate of that number of shares
of Parent Common Stock (based on the Exchange Ratio) as the holder of such Stock
Option  would  have been  entitled  to receive  pursuant  to the Merger had such
holder  exercised  such Option in full  immediately  prior to the Effective Time
(not taking into  account  whether or not such Option was in fact  exercisable).
The exercise  price for such Stock Options shall be the price per share equal to
(x) the aggregate exercise price for Company Common Stock otherwise  purchasable
pursuant  to such  Stock  Option  divided  by (y) the number of shares of Parent
Common Stock  deemed  purchasable  pursuant to such Stock  Option (the  exercise
price per share,  so determined,  being rounded up to the nearest full cent). No
payment shall be made for fractional  shares.  The aggregate number of shares of
Parent  Common Stock  issuable  upon the  exercise of Options  assumed by Parent
pursuant to this Section  2.2(c)  shall be referred to in this  Agreement as the
"Option  Shares." Any  adjustment  to an incentive  stock option made under this
Section  2.2(c)  shall  comply with  Section  424(a) of the Code.  The  Parent's
assumption of each Stock Option pursuant to this Section 2.2(c) shall be subject
to the holder of such Stock Option  executing  and  delivering to the Parent the
Stock Option Assumption Agreement in the form of Exhibit I hereto providing that
ten  percent  (10%) of the Option  Shares  subject to such Stock  Option will be
deposited  in escrow as  security  for the  indemnification  obligations  of the
Holders under Article XI hereof.


                                      - 4 -






                  (d) Warrants.  At the Effective Time, each outstanding warrant
to purchase  Company Stock (each, a "Warrant" and  collectively  the "Warrants")
shall, by virtue of the Merger and without any further action on the part of the
Company or the holder of any of Warrants  (unless further action may be required
by the terms of any of the  Warrants),  be assumed  by Parent  and each  Warrant
assumed by Parent shall be  exercisable  upon the same terms and  conditions  as
under the applicable  warrant  agreements with respect to such Warrants,  except
that (A) each such Warrant shall be exercisable  for that whole number of shares
of Parent Common Stock  (rounded down to the nearest whole share) into which the
number of shares of Company  Stock  subject to such  Warrant  would be converted
under Section 2.2(a) and (B) the exercise price per share of Parent Common Stock
shall be equal to (x) the aggregate exercise price for the Company Stock subject
to such Warrant in effect immediately prior to the Effective Time divided by (y)
the number of shares of Parent Common Stock deemed purchasable  pursuant to such
Warrant (the exercise price per share, so determined,  being rounded down to the
nearest full cent).  From and after the Effective  Time,  all  references to the
Company in the warrant  agreement  underlying  the  Warrants  shall be deemed to
refer to Parent.  Parent  further agrees that if required under the terms of the
Warrants  it will  execute a  supplemental  agreement  with the  holders  of the
Warrants to effectuate  the  foregoing.  No payment shall be made for fractional
shares.  The aggregate number of shares of Parent Common Stock issuable upon the
exercise of Warrants  assumed by Parent pursuant to this Section 2.2(d) shall be
referred to in this Agreement as the "Warrant  Shares." The Parent's  assumption
of each Warrant  pursuant to this Section  2.2(d) shall be subject to the holder
of such Warrant  executing and  delivering to the Parent the Warrant  Assumption
Agreement in the form of Exhibit J hereto  providing  that ten percent  (10%) of
the  Warrant  Shares  subject to such  Warrant  will be  deposited  in escrow as
security for the  indemnification  obligations  of the Holders  under Article XI
hereof.

                  (e) Acquisition  Shares. Each share of common stock, par value
$0.01 per share,  of  Acquisition  issued and  outstanding at the Effective Time
shall,  by virtue of the Merger and without any action on the part of the holder
thereof,  automatically be converted into one fully paid and nonassessable share
of common stock of the Surviving Corporation, as such shares of common stock are
constituted immediately following the Effective Time.

                  (f)  Dissenting   Shares.   Any  Dissenting  Shares  shall  be
converted  into  the  right  to  receive  from the  Surviving  Corporation  such
consideration  as  may be  determined  to be  due  with  respect  to  each  such
Dissenting Share pursuant to Chapter 13 of the CGCL; provided,  however,  Shares
that are Dissenting Shares at the Effective Time of the Merger and are held by a
holder who shall,  after the Effective  Time of the Merger,  withdraw his demand
for  appraisal  or lose his right of  appraisal as provided in the Chapter 13 of
the CGCL,  shall be  deemed to be  converted,  as of the  Effective  Time of the
Merger,  into the right to receive  the  Merger  Shares in  accordance  with the
procedures  specified in Section  2.3. The Company  shall give Parent (i) prompt
notice  of any  written  demands  for  appraisal,  withdrawals  of  demands  for
appraisal and any other  instruments  served  pursuant to Chapter 13 of the CGCL
received by the Company and (ii) the opportunity to direct all  negotiations and
proceedings  with respect to demands for appraisal under Chapter 13 of the CGCL.
The Company will not voluntarily make any payment

                                      - 5 -






with respect to any demands for  appraisal  and will not,  except with the prior
written  consent of Parent,  settle or offer to settle any such  demands.  It is
understood  and agreed that the  obligation to make any payment under Chapter 13
of the CGCL shall be  exclusively  that of the  Surviving  Corporation  and that
Parent shall be under no obligation to perform and discharge any such obligation
or to  reimburse  or make  any  contribution  to the  capital  of the  Surviving
Corporation to enable it to perform and discharge any such obligation.

         2.3      Exchange of Certificates.

                  (a) From and  after  the  Effective  Time,  each  holder of an
outstanding  certificate or certificates (the "Certificates")  which represented
shares of Company Common Stock or Company  Preferred Stock  immediately prior to
the Effective Time shall have the right to surrender each Certificate to Parent,
and receive in exchange for all  Certificates  held by such holder a certificate
representing  the number of whole shares of Parent  Common Stock (other than the
Escrow Shares (as defined below)) into which the Company Common Stock or Company
Preferred  Stock evidenced by the  Certificates  so surrendered  shall have been
converted  pursuant  to  Section  2.2(a) of this  Agreement.  The  surrender  of
Certificates  shall be  accompanied  by duly  completed and executed  Letters of
Transmittal in the form of Exhibit C attached hereto.  Until  surrendered,  each
outstanding  Certificate which prior to the Effective Time represented shares of
Company  Common  Stock  or  Company  Preferred  Stock  shall be  deemed  for all
corporate purposes to evidence ownership of the number of whole shares of Parent
Common Stock into which the shares of Company Common Stock or Company  Preferred
Stock have been  converted  but shall,  subject to applicable  appraisal  rights
under the CGCL and Section  2.2(f),  have no other rights.  Subject to appraisal
rights under the CGCL and Section 2.2(f), from and after the Effective Time, the
holders of shares of Company Common Stock or Company Preferred Stock shall cease
to have any rights in respect of such shares and their rights shall be solely in
respect of the Parent  Common  Stock  into which such  shares of Company  Common
Stock or Company Preferred Stock have been converted.

                  (b) If any shares of Parent  Common  Stock are to be issued in
the name of a person  other  than the  person in whose  name the  Certificate(s)
surrendered in exchange  therefor is registered,  it shall be a condition to the
issuance of such  shares that (i) the  Certificate(s)  so  surrendered  shall be
properly assigned, endorsed or accompanied by appropriate stock powers, and (ii)
the person requesting such transfer shall pay Parent, or its exchange agent, any
transfer or other taxes  payable by reason of the  foregoing or establish to the
satisfaction  of Parent that such taxes have been paid or are not required to be
paid.  Notwithstanding  the  foregoing,  neither  Parent or the Company shall be
liable to a holder of shares of Company Common Stock or Company  Preferred Stock
for shares of Parent or the  Company  issuable  to such  holder  pursuant to the
provisions of Section  2.2(a) of this  Agreement  that are delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.

                  (c) In the event any Certificate  shall have been lost, stolen
or  destroyed,  upon the  making  of an  affidavit  of that  fact by the  person
claiming such Certificate to be lost, stolen or

                                      - 6 -






destroyed,  Parent  shall issue in exchange  for such lost,  stolen or destroyed
Certificate  the shares of Parent  Common  Stock  issuable in exchange  therefor
pursuant to the  provisions of Section  2.2(a) of this  Agreement.  The Board of
Directors of Parent may in its  discretion  and as a condition  precedent to the
issuance  thereof,   require  the  owner  of  such  lost,  stolen  or  destroyed
Certificate to provide to Parent an indemnity agreement,  reasonable in form and
substance, against any claim that may be made against Parent with respect to the
Certificate alleged to have been lost, stolen or destroyed.

         2.4 No Fractional  Securities.  No  fractional  shares of Parent Common
Stock shall be issuable by the Parent upon the  conversion  of shares of Company
Common Stock or the Company  Preferred  Stock in the Merger  pursuant to Section
2.2(a) hereof.  In lieu of any such  fractional  shares,  each holder of Company
Common Stock or Company  Preferred  Stock who would otherwise have been entitled
to receive a fraction  of a share of Parent  Common  Stock  shall be entitled to
receive  instead  an amount in cash  equal to such  fraction  multiplied  by the
Closing Market Price (as defined  below).  For purposes of this  Agreement,  the
term "Closing Market Price" shall mean the average of the last quoted sale price
for shares of Parent Common Stock on The Nasdaq  National Market for each of the
twenty trading days preceding the third trading day prior to the Effective Time.

         2.5 Stock  Transfer  Books.  At the Effective  Time, the stock transfer
books of the Company shall be closed, and there shall be no further registration
of transfers  of Company  Stock or Company  Preferred  Stock  thereafter  on the
records of the Company.

         2.6 No Further  Ownership  Rights in Company  Stock.  The Merger Shares
delivered  upon the  surrender  for  exchange  of  shares  of  Company  Stock in
accordance  with the terms  hereof  shall be deemed to have been  issued in full
satisfaction  of all rights  pertaining  to such  shares,  and there shall be no
further registration of transfers on the records of the Surviving Corporation of
shares  of  Company  Stock  which  were  outstanding  immediately  prior  to the
Effective Time. If, after the Effective Time,  certificates are presented to the
Surviving  Corporation  for any reason,  they shall be canceled and exchanged as
provided in this Article II.

         2.7  Adjustment  Event.  If,  between the date hereof and the Effective
Time, the issued and  outstanding  shares of Parent Common Stock shall have been
combined,  split,  reclassified or otherwise  changed into a different number of
shares or a different class of shares, an appropriate adjustment to the Exchange
Ratio shall be made to fully reflect such change in such manner as is reasonably
acceptable to the Parent and the Company. Specifically, if the Parent's proposed
two-for-one  stock split is effected  prior to the Effective  Time, the Exchange
Ratio shall be adjusted to give effect to such split.  In  addition,  during the
period  beginning on the date of this Agreement and ending on the earlier of the
termination of this Agreement and the Effective Time,  Parent shall not, without
the prior  written  consent  of the  Company,  declare  or pay any  dividend  or
distribution on Parent Common Stock unless prior thereto either (i) Parent shall
have provided that holders of Company  Stock,  upon the  Effective  Time,  shall
receive  such  dividend or  distribution  to the same extent they would have had
their shares of Company Stock been

                                      - 7 -






converted  into shares of Parent  Common Stock  immediately  prior to the record
date of any such dividend or distribution,  or (ii) Parent and the Company shall
have mutually  agreed upon an adjustment of the Exchange  Ratio to fully reflect
the effect of any such dividend or distribution.

         2.8  Escrow.  At the  Effective  Time,  Parent  will  deposit in escrow
certificates  representing  ten percent  (10%) of the Merger Shares (which shall
reduce on a pro rata basis the Merger Shares  otherwise  issuable to the Holders
of Company  Stock under Section  2.2(a))  registered in the name of State Street
Bank and Trust Company,  as Escrow Agent, and instruments or other documentation
representing  Stock  Options to purchase ten percent  (10%) of the Option Shares
and Warrants to purchase  ten percent  (10%) of the Warrant  Shares  issuable to
each Holder under Section  2.2(c) or 2.2(d),  as the case may be  (collectively,
the  "Escrow  Shares").  The Escrow  Shares  shall be held as  security  for the
indemnification  obligations  under Article XI pursuant to the  provisions of an
Escrow  Agreement  (the  "Escrow  Agreement ") in the form of Exhibit D attached
hereto.

         2.9 Tax  Consequences.  For Federal income tax purposes,  the Merger is
intended to constitute a reorganization  within the meaning of Section 368(a) of
the Code, and that this Agreement  shall  constitute a "plan of  reorganization"
within the meaning of Section 368(a) of the Code.

                                   ARTICLE III

                      REPRESENTATIONS AND WARRANTIES OF THE
                     COMPANY AND THE PRINCIPAL SHAREHOLDERS

         The  Company  and  each of the  Principal  Shareholders  represent  and
warrant  to the  Parent  and  Acquisition  as set forth  below,  subject  to the
exceptions  set  forth  in  the  disclosure   schedules   attached  hereto  (the
"Disclosure Schedules"),  the section numbers and letters of which correspond to
the  section   and   subsection   numbers   and   letters  of  this   Agreement.
Notwithstanding  anything  to the  contrary  contained  in this  Agreement,  any
information  disclosed in one section of the Disclosure  Schedules shall, should
the  existence  of the  information  be  relevant  to any other  section  of the
Disclosure  Schedules,  be  deemed  to be  disclosed  in  all  sections  of  the
Disclosure  Schedules,  but  only  to the  extent  that  the  relevance  of such
information to such other section is apparent. The disclosure of any information
shall not be deemed to constitute an  acknowledgment  that such  information  is
required to be disclosed in connection with the  representations  and warranties
made by the Company in this  Agreement  or that it is  material,  nor shall such
information be deemed to establish a standard of materiality

         3.1      Corporate Organization.  (a) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the 
State of California.  The Company has no Subsidiaries (as that term is 
hereinafter defined).  The Company has all requisite corporate power and 
authority to own, operate and lease the properties and assets it now owns, 
operates and leases and to carry on its business as presently conducted.  
The Company  is duly qualified to

                                      - 8 -






transact  business  as a  foreign  corporation  and  in  good  standing  in  the
jurisdictions set forth in Schedule 3.1, which are the only jurisdictions  where
such  qualification  is required by reason of the nature of the  properties  and
assets  currently  owned,  operated  or leased by the  Company  or the  business
currently conducted by it, except for such jurisdictions where the failure to be
so  qualified  would not have a Company  Material  Adverse  Effect  (as  defined
below). The Company has previously  delivered to the Parent complete and correct
copies of its Articles of Incorporation  (certified by the secretary of state of
the  jurisdiction  in which it was formed as of a recent  date) and its  By-Laws
(certified by the  Secretary of the Company as of a recent date).  Except as set
forth in Schedule 3.1, neither the Articles of Incorporation  nor the By-Laws of
the  Company  have been  amended  since the  respective  dates of  certification
thereof,  nor has any  action  been  taken  for the  purpose  of  effecting  any
amendment of such instruments. The term "Company Material Adverse Effect" means,
for  purposes of this  Agreement,  any change,  event or effect that is, or that
would be, materially adverse to the business,  operations,  assets, liabilities,
financial condition or results of operations of the Company; provided,  however,
that a Company Material Adverse Effect shall not include any adverse effect that
is attributable  to the Merger or the  announcement of the Merger or that is due
to any downturn in the Internet industry or any national economic downturn.

         3.2  Authorization.  The Company has full corporate power and authority
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions  contemplated  hereby  have  been  duly  approved  by the  Board of
Directors  of the  Company,  and no other  corporate  action  on the part of the
Company is necessary to approve and authorize the execution and delivery of this
Agreement or (subject to the  approval of this  Agreement  and the  transactions
contemplated  hereby by the  Holders  which will be  obtained  in the manner set
forth in Section 7.2 hereof and the filing of the Certificate of Merger pursuant
to the CGCL and the  DGCL) the  consummation  of the  transactions  contemplated
hereby.  This  Agreement has been duly executed and delivered by the Company and
constitutes  the valid and binding  agreement  of the  Company,  enforceable  in
accordance  with its terms,  except to the  extent  that  enforceability  may be
limited by  applicable  bankruptcy,  reorganization,  insolvency,  moratorium or
other laws  affecting  the  enforcement  of creditors,  rights  generally and by
general  principles  of equity,  regardless  of whether such  enforceability  is
considered in a proceeding in law or in equity.

         3.3 Consents and Approvals; No Violations. Subject to the filing of the
Certificate of Merger with the Secretary of State of the State of California and
the Secretary of State of the State of Delaware and compliance  with  applicable
federal and state  securities laws, the execution and delivery of this Agreement
and the  consummation  of the  transactions  contemplated  hereby will not:  (i)
violate or conflict  with any  provision  of the  Articles of  Incorporation  or
By-Laws of the Company,  (ii) breach,  violate or constitute an event of default
(or an event  which with the lapse of time or the giving of notice or both would
constitute an event of default)  under,  give rise to any right of  termination,
cancellation,  modification or acceleration under, or require any consent or the
giving of any  notice  under,  any note,  bond,  indenture,  mortgage,  security
agreement, lease, license,  franchise,  permit, agreement or other instrument or
obligation to which

                                      - 9 -






the  Company is a party,  or by which the  Company or any of its  properties  or
assets may be bound, or result in the creation of any lien, claim or encumbrance
or other right of any third party of any kind  whatsoever upon the properties or
assets  of  the  Company  pursuant  to  the  terms  of any  such  instrument  or
obligation,   other   than  any   breach,   violation,   default,   termination,
cancellation,  modification  or  acceleration  which  would  not have a  Company
Material  Adverse  Effect,  (iii)  violate or  conflict  with any law,  statute,
ordinance, code, rule, regulation,  judgment, order, writ, injunction, decree or
other instrument of any Federal,  state,  local or foreign court or governmental
or regulatory  body,  agency or authority  applicable to the Company or by which
any of its  properties or assets may be bound,  except for such  violations  and
conflicts which would not have a Company  Material Adverse Effect or result in a
fine or penalty in excess of $10,000  individually or in the aggregate,  or (iv)
require, on the part of the Company, any filing or registration with, or permit,
license, exemption, consent,  authorization or approval of, or the giving of any
notice to, any governmental or regulatory  body,  agency or authority other than
any filing, registration,  permit, license, exemption,  consent,  authorization,
approval  or  notice  which if not  obtained  or made  would  not have a Company
Material  Adverse  Effect or result in a fine or  penalty  in excess of  $10,000
individually or in the aggregate. Without limiting the generality of clause (ii)
above,  except for the  finder's  agreements  described  in Section 13.7 hereof,
neither  the  Company  nor  any of the  Holders  is a  party  to any  agreement,
arrangement or understanding  which contemplates the sale of the business of the
Company,  in whole or in part,  whether  by means of a sale of  shares,  sale of
assets, merger, consolidation or otherwise.

         3.4      Capitalization.

                  (a) The  authorized  capital stock of the Company  consists of
40,000,000  shares of Company Common Stock, of which 5,650,047 shares are issued
and  outstanding  and 10,000,000  shares of Company  Preferred  Stock,  of which
1,444,162  shares of Series A Convertible  Preferred Stock, and 5,231,577 shares
of Series B Convertible  Preferred Stock,  are issued and outstanding.  Schedule
3.4(a) sets forth a complete  and correct  list of the record  ownership  of the
issued  and  outstanding  shares  of  Company  Stock.  All  of  the  issued  and
outstanding  shares of Company Stock were duly authorized and validly issued and
are  fully  paid and  nonassessable,  and were not  issued in  violation  of any
preemptive  rights or Federal or state securities  laws.  Except as disclosed in
Schedule 3.4(a) hereto, the Company has never repurchased or redeemed any shares
of its capital stock,  and there are no amounts owed or which may be owed to any
person by the Company as a result of any  repurchase  or redemption of shares of
its capital stock.  Except as disclosed in Schedule 3.4(a) hereto,  there are no
agreements, arrangements or understandings to which the Company is a party or by
which it is bound to redeem or  repurchase  any  shares  of its  capital  stock.
Except as set  forth in  Schedule  3.4(a),  there  are no  outstanding  options,
warrants or other  rights to purchase,  or any  securities  convertible  into or
exchangeable  for, shares of the capital stock of the Company,  and there are no
agreements, arrangements or understandings to which the Company is a party or by
which it is bound  pursuant  to which the Company is or may be required to issue
additional shares of its capital stock.


                                     - 10 -






                  (b) Schedule  3.4(b) sets forth a complete and correct list of
all  indebtedness  for borrowed money of the Company  outstanding as of the date
hereof,  including,  the  name  of the  lender,  the  principal  amount  of such
indebtedness,  together with all accrued and unpaid  interest  thereon,  and any
prepayment penalties or premiums payable if such indebtedness is repaid prior to
its stated maturity date.

                  (c) The  Company  does not own,  directly or  indirectly,  any
equity  securities,  or  options,  warrants  or other  rights to acquire  equity
securities,   or  securities   convertible   into  or  exchangeable  for  equity
securities, of any other corporation, or any partnership interest in any general
or limited partnership or unincorporated joint venture (a "Subsidiary").

         3.5  Financial  Statements.  Attached  hereto as  Schedule  3.5 are the
balance  sheets of the  Company as of June 28,  1998,  December  31,  1997,  and
December 31, 1996 and the  statements of income and  statements of cash flows of
the Company for the fiscal  years or periods  then  ended,  including  the notes
thereto (hereinafter  collectively  referred to as the "Financial  Statements").
The  Financial  Statements  (i) have been prepared from the books and records of
the Company,  (ii) have been  prepared in  accordance  with  generally  accepted
accounting principles consistently applied (except as may be expressly indicated
therein or on the face of the schedules or notes to such  Financial  Statements)
during the periods  covered  thereby and (iii)  present  fairly in all  material
respects the financial  condition,  results of operations  and cash flows of the
Company as at the dates,  and for the periods,  stated therein,  except that the
Financial  Statements are subject to normal year-end  adjustments which will not
be  individually  or in the  aggregate  material  in amount or effect and do not
include footnotes.  At July 31, 1998, the Company's total assets (as computed in
accordance  with  generally  accepted  accounting  principles)  did not equal or
exceed $10 million.

         3.6  Absence  of  Undisclosed  Liabilities.  Except (i) as set forth or
reserved  against in the balance sheet of the Company dated as of June 28, 1998,
included in the Financial Statements (the "Balance Sheet"), (ii) for obligations
incurred since June 28, 1998 in the ordinary  course of business,  which are not
individually or in the aggregate,  material in amount, and (iii) as set forth in
Schedule 3.6, the Company does not have any  liabilities  or  obligations of the
nature that would be reasonably required,  in accordance with generally accepted
accounting principles applied on a consistent basis, to be reflected on the face
of a balance  sheet or, in the case of the  financial  statements  for the years
ended December 31, 1996 and December 31, 1997, the notes thereto.

         3.7  Absence  of  Certain  Changes  or  Events.  Except as set forth in
Schedule  3.7,  since June 28, 1998,  the Company has carried on its business in
the ordinary  course and consistent  with past practice.  Except as set forth on
Schedule 3.7 hereto,  since June 28, 1998, the Company has not: (i) incurred any
material  obligation  or liability  (whether  absolute,  accrued,  contingent or
otherwise)  except in the ordinary  course of business and consistent  with past
practice;   (ii)  experienced  any  Company   Material  Adverse  Effect;   (iii)
accelerated receivables or delayed payables or made any change in any accounting
principle or practice or in its methods of

                                     - 11 -






applying  any such  principle or practice;  (iv)  suffered any material  damage,
destruction  or  loss,  whether  or not  covered  by  insurance,  affecting  its
properties, assets or business; (v) mortgaged, pledged or subjected to any lien,
charge or other  encumbrance,  or granted to third parties any rights in, any of
its assets, tangible or intangible;  (vi) sold or transferred any of its assets,
except in the ordinary course of business and consistent with past practice,  or
canceled or  compromised  any debts or waived any claims or rights of a material
nature;  (vii)  issued any  additional  shares of capital  stock or any  rights,
options or warrants to purchase, or securities  convertible into or exchangeable
for,  shares of its  capital  stock other than  shares of Company  Common  Stock
issued upon  exercise of employee  stock  options;  (viii)  declared or paid any
dividends on or made any  distributions  (however  characterized)  in respect of
shares of its capital  stock;  (ix)  repurchased  or redeemed  any shares of its
capital stock; (x) granted any general or specific  increase in the compensation
payable  or to  become  payable  to any of  their  Employees  (as  that  term is
hereinafter  defined) or any bonus or service  award or other like  benefit,  or
instituted,  increased,  augmented or improved any Benefit Plan (as that term is
hereinafter  defined);  or (xi)  entered  into  any  agreement  to do any of the
foregoing.

         3.8 Legal Proceedings, etc. Except as set forth in Schedule 3.8 hereto,
there are no suits, actions, claims, proceedings (including, without limitation,
arbitral or  administrative  proceedings) or  investigations  pending or, to the
best knowledge of the Company or any Principal  Shareholder,  threatened against
the Company or its  properties,  assets or business or, to the best knowledge of
the Company or any Principal  Shareholder,  pending or threatened against any of
the officers,  directors,  employees,  agents or  consultants  of the Company in
connection with the business of the Company.  There are no such suits,  actions,
claims,  proceedings or investigations pending, or, to the best knowledge of the
Company or any Principal  Shareholder,  threatened  challenging  the validity or
propriety  of the  transactions  contemplated  by this  Agreement.  There  is no
judgment,  order,  injunction,  decree or award (whether  issued by a court,  an
arbitrator  or an  administrative  agency) to which the  Company is a party,  or
involving the Company's properties,  assets or business, which is unsatisfied or
which requires continuing compliance therewith by the Company.

         3.9      Taxes.

                  (a) Except as set forth in Schedule  3.9, the Company has duly
and timely  filed,  or will duly and in a timely  manner file,  all material Tax
returns  and other  filings  in  respect  of Taxes (as that term is  hereinafter
defined)  required to be filed by it or which are  required to be filed by it on
or prior to the  Effective  Time,  and has in a timely manner paid (or will in a
timely manner pay) all material Taxes which are (or will be) due for all periods
ending on or before the  Effective  Time,  whether or not shown on such returns.
All such Tax returns have been, or will be when filed, accurately and completely
prepared  in all  material  respects  in  compliance  with all  laws,  rules and
regulations.  The  provisions  for  Taxes  payable  reflected  in the  Financial
Statements are adequate under generally accepted accounting principles.


                                     - 12 -






                  (b) Except as set forth in Schedule  3.9 hereto,  there are no
actions  or  proceedings  currently  pending  or, to the best  knowledge  of the
Company or any  Principal  Shareholder,  threatened  against  the Company by any
governmental  authority for the assessment or collection of Taxes,  no claim for
the assessment or collection of Taxes has been asserted against the Company, and
there are no matters under discussion with any governmental  authority regarding
claims  for the  assessment  or  collection  of Taxes.  Any Taxes that have been
claimed  or  imposed  as a result of any  examinations  of any tax return of the
Company by any governmental authority are being contested in good faith and have
been  disclosed in writing to the Parent.  Except as set forth in Schedule  3.9,
there are no agreements or  applications by the Company for an extension of time
for the  assessment  or payment of any Taxes nor any  outstanding  waiver of the
statute of limitations in respect of Taxes. There are no Tax liens on any of the
assets of the Company, except for liens for Taxes not yet due or payable or that
are being contested in good faith in appropriate proceedings.

                  (c) For  purposes  of this  Agreement,  the  terms  "Tax"  and
"Taxes" shall mean and include any and all United States,  state, local, foreign
or other income, sales, use, withholding,  employment, payroll, social security,
property  taxes and all other  taxes of any  kind,  deficiencies,  fees or other
governmental charges in the nature of taxes, including,  without limitation, any
installment payment for taxes and contributions or other amounts determined with
respect to compensation  paid to directors,  officers,  employees or independent
contractors  from  time  to  time  imposed  by or  required  to be  paid  to any
governmental  authority  (including  penalties  and  additions  to tax  thereon,
penalties  for  failure to file a return or report,  and  interest on any of the
foregoing).

                  (d) The Company has not, with regard to any assets or property
held,  acquired  or to be  acquired  by the  Company,  filed  a  consent  to the
application of Section 341(f) of the Code.

                  (e) The  Company has not been a United  States  real  property
holding  corporation  within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(2)(i) of the Code.

                  (f) There is no agreement,  plan or  arrangement  covering any
employee or independent  contractor or former employee or independent contractor
of the Company that, considered individually or considered collectively with any
other such agreement, plan or arrangement, will, or could reasonably be expected
to, give rise directly or indirectly to the payment of any amount that would not
be  deductible  pursuant to Section 280G of the Code or that would be subject to
an excise tax under Section 4999 of the Code.

                  (g) The  Company is not and has never been a party to or bound
by any tax indemnity agreement,  tax sharing agreement, tax allocation agreement
or similar agreement or arrangement and does not have any liability for Taxes of
any person (other than the Company) under Treasury  Regulation  1.1502-6 (or any
similar provision of state, local or foreign law).

                                     - 13 -






                  (h) The Company has withheld  amounts from its  employees  and
other  persons   required  to  be  withheld  under  the  tax,  social  security,
unemployment and other withholding  provisions of all federal,  state, local and
foreign laws.

         3.10 Title to Properties and Related  Matters.  (a) Except as set forth
on  Schedule  3.10(a),  the  Company  has good and valid  title to all  personal
property,  tangible or intangible,  which the Company purports to own, including
the properties reflected on the Balance Sheet or acquired after the date thereof
(other than properties and assets sold or otherwise  disposed of in the ordinary
course of business and consistent with past practice since June 28, 1998),  free
and clear of any claims, liens,  pledges,  security interests or encumbrances of
any kind whatsoever (other than (i) purchase money security interests and common
law  vendor's  liens,  in each case for goods  purchased  on open account in the
ordinary  course of business and having a fair market value of less than $10,000
in each  individual  case),  (ii) liens for Taxes not yet due and  payable,  and
(iii)  such  imperfections  of  title  and  encumbrances,  if any,  that are not
material in character,  amount or extent and that do not materially detract from
the value, or materially interfere with the use of, the property subject thereto
or affected thereby.

                  (b) The Company does not own any real property or any interest
in real property,  except for the leasehold created under the leases referred to
in Schedule 3.10(d).

                  (c) Schedule 3.10(c) sets forth a complete and correct list of
all equipment, machinery,  instruments,  vehicles, furniture, fixtures and other
items of personal property currently owned, leased or used by the Company with a
book  value as of June 28,  1998,  in each  case of  $10,000  or more.  All such
personal  property  is  in  satisfactory   operating   condition  (ordinary  and
reasonable wear and tear excepted), is physically located in or about one of the
Company's  places of  business  and is owned by the  Company or is leased by the
Company  under one of the leases  set forth in  Schedule  3.10(d).  None of such
personal  property is subject to any agreement or commitment  for its use by any
person other than the Company.  The  maintenance  and operation of such personal
property is appropriate for personal property of such nature and is and has been
in material  conformance  with all applicable  laws and  regulations,  except as
would not have a Company  Material Adverse Effect or result in a fine or penalty
in excess  of  $10,000  individually  or in the  aggregate.  There are no assets
leased by the Company or used in the  business  of the  Company  that are owned,
directly  or  indirectly,  by any  Related  Person (as that term is  hereinafter
defined).

                  (d) Schedule 3.10(d) sets forth a complete and correct list of
all real property and personal  property leases to which the Company is a party.
The Company has previously  delivered to the Parent  complete and correct copies
of each lease (and any  amendments or  supplements  thereto)  listed in Schedule
3.10(d).  With respect to such leases,  (i) each such lease is valid and binding
and in full  force  and  effect;  (ii)  neither  the  Company  nor (to the  best
knowledge  of the Company or any  Principal  Shareholder)  any other party is in
default under any such lease,  and no event has occurred which  constitutes,  or
with the  lapse of time or the  giving of notice  or both  would  constitute,  a
default by the Company or (to the best knowledge of the

                                     - 14 -






Company or any  Principal  Shareholder)  a default by any other party under such
lease,  other than any default which would not have a Company  Material  Adverse
Effect; (iii) to the best knowledge of the Company or any Principal Shareholder,
there are no disputes or  disagreements  between the Company and any other party
with  respect to any such lease;  and (iv) the lessor  under each such lease has
consented or been given notice (or prior to the Closing shall have  consented or
been  given  notice),  where  such  consent  or the  giving  of such  notice  is
necessary,  sufficient  that such  lease  shall  remain in full force and effect
following the  consummation of the  transactions  contemplated by this Agreement
without requiring  modification in the rights or obligations of the lessee under
any such lease.

         3.11 Intellectual Property;  Proprietary Rights; Employee Restrictions.
(a) The  Company  has  disclosed  in Schedule  3.11 all  registered  copyrights,
copyright registrations and copyright applications,  trademark registrations and
applications  for  registration,  patents and patent  applications,  trademarks,
service   marks,   trade  names,   or  Internet   domain  names   (collectively,
"Intellectual Property Rights") used by the Company in the Company's business as
presently conducted, including all other registered Intellectual Property Rights
used in connection with or contained in all versions of the Company's World Wide
Web sites (including  www.whowhere.com and  www.angelfire.com) and all licenses,
assignments and releases of Intellectual Property Rights of others without which
the Company could not offer the services it currently  offers.  All Intellectual
Property  Rights  used by the  Company  in the  Company's  business  held by any
employee,  officer or consultant are owned by the Company by operation of law or
have been  validly  assigned  to the  Company.  The  Company  believes  that the
Intellectual  Property  Rights are  sufficient  to carry on the  business of the
Company as  presently  conducted.  The Company  has  exclusive  ownership  of or
license to use all Intellectual  Property Rights  identified in Schedule 3.11 or
has obtained any licenses,  releases or assignments  reasonably necessary to use
all  third  parties'  Intellectual  Property  Rights  in works  embodied  in its
services.  The  present  business  activities  or products of the Company do not
infringe any Intellectual  Property Rights of others, except as would not have a
Company  Material  Adverse  Effect or result in a liability,  fine or penalty in
excess of $10,000 individually or in the aggregate. The Company has not received
any notice or other claim from any person  asserting  that any of the  Company's
present activities infringe or may infringe any Intellectual  Property Rights of
such person.

                  The Company has the right to use all trade  secrets,  customer
lists, hardware designs,  programming processes,  software and other information
required  for  its   services  or  its   business  as  presently   conducted  or
contemplated.  The  Company  has taken all  reasonable  measures  to protect and
preserve  the  security  and  confidentiality  of its  trade  secrets  and other
confidential information.  All employees and consultants of the Company involved
in the design,  review,  evaluation or development  of products or  Intellectual
Property  Rights  have  executed  nondisclosure  and  assignment  of  inventions
agreements to protect the  confidentiality  of the  Company's  trade secrets and
other confidential information and to vest in the Company exclusive ownership of
such  Intellectual  Property  Rights.  To the  knowledge  of the Company and the
Principal Shareholders,  all trade secrets and other confidential information of
the  Company  are not  part of the  public  domain  or  knowledge,  nor,  to the
knowledge of the Company and the

                                     - 15 -






Principal  Shareholders,  have they been misappropriated by any person having an
obligation to maintain such trade secrets or other  confidential  information in
confidence  for the Company.  To the  knowledge of the Company and the Principal
Shareholders,  no  employee  or  consultant  of the  Company  has used any trade
secrets or other  confidential  information of any other person in the course of
their work for the Company.

                  The  Company is the  exclusive  owner of all right,  title and
interest in its  Intellectual  Property  Rights as  purported to be owned by the
Company, and to the Company's and the Principal  Shareholders'  knowledge,  such
Intellectual  Property  Rights  are  valid  and in full  force  and  effect.  No
university,  government agency (whether federal or state) or other  organization
sponsored research and development  conducted by the Company or has any claim of
right to or ownership of or other  encumbrance  upon the  Intellectual  Property
Rights of the Company. The Company is not aware of any infringement by others of
its copyrights or other Intellectual Proprietary Rights in any of its technology
or services,  or any violation of the  confidentiality of any of its proprietary
information.  To the Company's and the Principal  Shareholders'  knowledge,  the
Company is not making  unlawful  use of any  confidential  information  or trade
secrets of any past or present employees of the Company.

                  Neither the Company  nor, to the  knowledge of the Company and
the Principal Shareholders,  any of the Company's employees, have any agreements
or arrangements with former employers of such employees relating to confidential
information  or trade secrets of such  employers or are bound by any  consulting
agreement  relating  to  confidential  information  or trade  secrets of another
entity that are being violated by such persons.  The activities of the Company's
employees on behalf of the