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Published: 2008-03-26

Agreement and Plan of Reorganization and Merger - iVillage Inc. and Health Responseability Systems Inc.



                AGREEMENT AND PLAN OF REORGANIZATION AND MERGER

                                  DATED AS OF

                               JANUARY 31, 1997,

                                     AMONG

                                iVILLAGE, INC.

                          HRS ACQUISITION CORPORATION

                     HEALTH RESPONSEABILITY SYSTEMS, INC.

          THE SECURITYHOLDERS OF HEALTH RESPONSEABILITY SYSTEMS, INC.

                                      AND

                                  ALLEN DOUMA

===============================================================================





                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----

ARTICLE I      GENERAL ...................................................   1
     1.1       The Merger ................................................   1
     1.2       The Effective Time of the Merger ..........................   2
     1.3       Effect of Merger ..........................................   2
     1.4       Charter and By-Laws of Surviving Corporation ..............   2
     1.5       Taking of Necessary Action ................................   2
     1.6       Tax-Free Reorganization ...................................   2
     1.7       Closing ...................................................   3

ARTICLE II     EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
               THE CONSTITUENT CORPORATIONS ..............................   3
     2.1       Total Consideration .......................................   3
     2.2       Approval of Transaction; Exchange of Securities ...........   5
     2.3       Escrow Deposits ...........................................   5

ARTICLE III    REPRESENTATIONS AND WARRANTIES ............................   6
     3.1       Representations and Warranties of the Company, the
               Shareholder and Douma .....................................   6
     3.2       Several Representations and Warranties of the
               Shareholder, Douma and AOL ................................  23
     3.3       Representations and Warranties of Purchaser ...............  27

ARTICLE IV     CONDUCT AND TRANSACTIONS PRIOR TO EFFECTIVE TIME;
               ADDITIONAL AGREEMENTS .....................................  31
     4.1       Access to Records and Properties of Each Party;
               Confidentiality ...........................................  31
     4.2       Operation of Business of the Company ......................  32
     4.3       Negotiations With Others ..................................  32
     4.4       Advice of Changes .........................................  33
     4.5       Company Financial Information Update ......................  34
     4.6       Purchaser Financial Information Update ....................  34
     4.7       Legal Conditions to Merger ................................  34
     4.8       Consents ..................................................  35
     4.9       Efforts to Consummate .....................................  35
     4.10      Notice of Prospective Breach ..............................  35
     4.11      Public Announcements ......................................  35
     4.12      No Transfers ..............................................  36
     4.13      Confidentiality ...........................................  36

ARTICLE V      CONDITIONS PRECEDENT ......................................  36
     5.1       Conditions to Each Party's Obligations ....................  36
     5.2       Conditions to Obligations of Purchaser and
               Acquisition Sub ...........................................  37
     5.3       Conditions to Obligations of the Company ..................  39

ARTICLE VI     ADDITIONAL AGREEMENTS .....................................  41
     6.1       Compliance With the Code ..................................  41
     6.2       Restriction on Transfer ...................................  41
     6.3       Piggyback Registration ....................................  43




                                                                          Page
                                                                          ----

     6.4       Disclosure of Information; Non-Competition ................  47
     6.5       Employee Options ..........................................  49

ARTICLE VII    INDEMNIFICATION ...........................................  49
     7.1       Definitions ...............................................  49
     7.2       Indemnification Generally .................................  50
     7.3       Assertion of Claims .......................................  50
     7.4       Notice and Defense of Third Party Claims ..................  50
     7.5       Survival of Representations and Warranties ................  51
     7.6       Limitation on Indemnification .............................  52

ARTICLE VIII   TERMINATION; AMENDMENT, MODIFICATION AND WAIVER ...........  53
     8.1       Termination ...............................................  53
     8.2       Effect of Termination .....................................  53

ARTICLE IX     MISCELLANEOUS .............................................  54
     9.1       Expenses ..................................................  54
     9.2       Entire Agreement ..........................................  54
     9.3       Descriptive Headings ......................................  54
     9.4       Notices ...................................................  54
     9.5       Counterparts ..............................................  55
     9.6       Governing Law .............................................  56
     9.7       Benefits of Agreement .....................................  56
     9.8       Pronouns ..................................................  56
     9.9       Amendment, Modification and Waiver ........................  56



                                     -ii-




                                  SCHEDULES

Purchaser Disclosure Schedule
Company Disclosure Schedule
     Schedule 3.1(a)  -  Organization, Good Standing, Qualification and Power
     Schedule 3.1(c)  -  Capital Stock, Securities
     Schedule 3.1(e)  -  Financial Statements
     Schedule 3.1(g)  -  Absence of Changes
     Schedule 3.1(i)  -  Title to Assets, Properties and Rights and Related
                           Matters
     Schedule 3.1(j)  -  Real Property - Owned or Leased
     Schedule 3.1(k)  -  Intellectual Property
     Schedule 3.1(l)  -  Company Software
     Schedule 3.1(m)  -  Agreements
     Schedule 3.1(p)  -  Accounts and Notes Receivable
     Schedule 3.1(r)  -  Compliance, Governmental Authorities
     Schedule 3.1(s)  -  Employees
     Schedule 3.1(t)  -  Employee Benefit Plans and Contracts
     Schedule 3.1(v)  -  Insurance
     Schedule 3.1(w)  -  Bank Accounts; Powers of Attorney
     Schedule 3.1(y)  -  Related Transactions
     Schedule 3.1(af) -  Officers and Directors
     Schedule 3.1(ah) -  Marketing Materials
Schedule 6.6          -  Options


                                   EXHIBITS

Exhibit A      -    Form of Articles of Merger
Exhibit B      -    [Intentionally Omitted]
Exhibit C      -    [Intentionally Omitted]
Exhibit D-1    -    Form of Silveous Employment Agreement
Exhibit D-2    -    Form of Douma Employment Agreement
Exhibit E      -    Form of Non-Disclosure Agreement
Exhibit F      -    [Intentionally Omitted]
Exhibit G-1    -    Form of Silveous Option Agreement
Exhibit G-2    -    Form of Douma Option Agreement



                                    -iii-




                                   GLOSSARY

         The following terms used in this Agreement are defined in the
following Sections:

                                                                   Section or
Term                                                             Other Location
----                                                             --------------

Acquisition Sub ...................................................    Caption 
Acquisition Transaction ...........................................     4.3(a) 
Actions ...........................................................     3.1(o) 
Affiliate .........................................................     7.1(a) 
Agreement .........................................................   Preamble 
Articles of Merger ................................................   Preamble 
AOL ...............................................................    Caption 
AOL Note ..........................................................     2.2(a) 
AOL Warrant .......................................................     2.2(a) 
Basket Amount .....................................................     7.6(a) 
Benefit Arrangements ..............................................     3.1(t) 
Business Day ......................................................        1.7 
Charter ...........................................................     3.1(a) 
Closing ...........................................................        1.7 
Closing Date ......................................................        1.7 
Code ..............................................................        1.6 
Commission ........................................................        1.2 
Company ...........................................................    Caption 
Company Balance Sheet .............................................     3.1(e) 
Company Balance Sheet Date ........................................     3.1(e) 
Company Common Stock ..............................................   Preamble 
Company Disclosure Schedule .......................................        3.1 
Company Expenses ..................................................        9.1 
Company Financial Statements ......................................     3.1(e) 
Company Preferred Stock ...........................................     2.2(a) 
Company Principals ................................................    Caption 
Company Returns ...................................................     3.1(h) 
Company Rights ....................................................     3.1(k) 
Competitive Business ..............................................     6.4(b) 
Confidential Information ..........................................     6.4(a) 
Constituent Corporations ..........................................        1.1 
Designated Persons ................................................     3.1(o) 
Douma .............................................................    Caption 
Douma Employment Agreement ........................................     5.2(o) 
Effective Time ....................................................        1.2 
Employee ..........................................................     3.1(t) 
Employee Plans ....................................................     3.1(t) 
Encumbrances ......................................................        3.1 
Equity Rights .....................................................     2.1(a) 
ERISA .............................................................     3.1(t) 
ERISA Affiliate ...................................................     3.1(t) 
Escrow Agent ......................................................     2.3(a) 
Escrow Agreement ..................................................     2.3(a) 
Escrow Shares .....................................................     2.3(b) 
Event of Indemnification ..........................................     7.1(b) 
Executory Period ..................................................     4.1(a) 
FAS No. 5 .........................................................     3.1(f) 


                                     -iv-




                                                                   Section or
Term                                                             Other Location
----                                                             --------------

Financing .........................................................     5.1(e) 
Fully Diluted Company Shares ......................................     2.1(a) 
GAAP ..............................................................     3.1(e) 
Governmental Authority ............................................     3.1(o) 
Indemnified Persons ...............................................     7.1(c) 
Indemnifying Persons ..............................................     7.1(d) 
Intellectual Property Rights ......................................     3.1(k) 
Interested Securityholder .........................................    3.1(ad) 
Leased Real Property ..............................................     3.1(j) 
Leases ............................................................     3.1(j) 
Liability .........................................................     3.1(f) 
Licensed Software .................................................     3.1(l) 
LOI Deposit .......................................................     4.3(b) 
LOI Escrow Agent ..................................................     2.3(c) 
LOI Escrow Agreement ..............................................     2.3(c) 
Losses ............................................................     7.1(e) 
Material Adverse Change ...........................................     3.1(g) 
Material Adverse Effect ...........................................     3.1(a) 
Merger ............................................................        1.1 
Merger Shares .....................................................     2.1(b) 
Non-Disclosure Agreements .........................................     5.2(p) 
Offering Memorandum ...............................................     3.3(f) 
OGK ...............................................................     5.3(d) 
Option Agreement ..................................................     5.3(f) 
Option Agreements .................................................     5.3(f) 
Other Shares ......................................................     6.3(a) 
Owned Software ....................................................     3.1(l) 
Party .............................................................        4.7 
Preferred Stock ...................................................     3.3(c) 
Primary Shares ....................................................     6.3(a) 
Purchaser .........................................................    Caption 
Purchaser Common Stock ............................................   Preamble 
Purchaser Disclosure Schedule .....................................        3.3 
Registrable Founder's Shares ......................................     6.3(a) 
Registrable Shares ................................................     6.3(a) 
Restricted Securities .............................................     6.2(a) 
Rule 144 ..........................................................     6.3(a) 
Schedule of Expenses ..............................................     5.2(g) 
Series A Preferred Stock ..........................................     3.3(c) 
Series B Preferred Stock ..........................................     3.3(c) 
Series B-1 Preferred Stock ........................................     3.3(c) 
Shareholder .......................................................    Caption 
Silveous Employment Agreement .....................................     5.2(o) 
Site ..............................................................     3.1(z) 
Software ..........................................................     3.1(l) 
SPPT ..............................................................     5.2(d) 
Stockholders' Agreement ...........................................     5.2(n) 
Subject Business ..................................................     6.4(a) 
Subsidiary ........................................................     3.1(b) 
Survival Date .....................................................        7.5 
Surviving Corporation .............................................        1.1 


                                     -v-


                                                                   Section or
Term                                                             Other Location
----                                                             --------------

Tax ...............................................................     3.1(h) 
Taxes .............................................................     3.1(h) 
Third Party Claim .................................................        7.4 
to the best knowledge of the Company ..............................    3.1(ah) 
Transaction Costs .................................................        9.1 
Transfer ..........................................................     6.2(a) 
transferee ........................................................     3.1(h) 
Virginia Statute ..................................................   Preamble 
Warrant Shares ....................................................     3.3(c) 




                                     -vi-




                                    AGREEMENT AND PLAN OF REORGANIZATION AND
                                    MERGER dated as of January 31, 1997, among
                                    iVILLAGE, INC., a Delaware corporation
                                    ("Purchaser"), HEALTH RESPONSEABILITY
                                    SYSTEMS, INC., a Virginia corporation (the
                                    "Company"), ELIN SILVEOUS, the sole
                                    shareholder of the Company (the
                                    "Shareholder"), HRS ACQUISITION
                                    CORPORATION, a Virginia corporation and a
                                    direct, wholly-owned subsidiary of
                                    Purchaser ("Acquisition Sub"), AMERICA
                                    ONLINE, INC. ("AOL"), a Delaware
                                    corporation and the holder of the AOL
                                    Warrant (as defined below), and ALLEN
                                    DOUMA, the Chief Executive Officer of the
                                    Company ("Douma" and together with the
                                    Shareholder, the "Company Principals").

                  The Boards of Directors of Purchaser, Acquisition Sub and the
Company have each duly approved and adopted this Agreement and Plan of
Reorganization and Merger (the "Agreement"), the Articles of Merger in
substantially the form of Exhibit A attached hereto (the "Articles of Merger")
and the proposed merger of the Company with and into Acquisition Sub in
accordance with this Agreement, the Articles of Merger and the Virginia Stock
Corporation Act (the "Virginia Statute"), whereby, among other things, the
issued and outstanding shares of common stock, $.01 par value, of the Company
(the "Company Common Stock"), will be exchanged and converted into shares of
common stock, $.0005 par value, of Purchaser (the "Purchaser Common Stock") in
the manner set forth in Article II hereof and in the Articles of Merger, upon
the terms and subject to the conditions set forth in this Agreement and the
Articles of Merger.

                  NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Articles of Merger and the representations,
warranties, covenants, agreements, conditions and promises contained herein and
therein, the parties hereby agree as follows:

                                   ARTICLE I


                                    GENERAL


                  1.1. The Merger. In accordance with the provisions of this
Agreement, the Articles of Merger, and the Virginia Statute, the Company shall
be merged with and into Acquisition Sub (the 





"Merger"), which at and after the Effective Time shall be, and is sometimes
hereinafter referred to as the "Surviving Corporation." For convenience of
reference, Acquisition Sub and the Company are sometimes collectively
hereinafter referred to as the "Constituent Corporations."

                  1.2. The Effective Time of the Merger. Subject to the
provisions of this Agreement, the Articles of Merger shall be executed and
delivered to and filed with the State Corporation Commission of the
Commonwealth of Virginia (the "Commission") by each of the Constituent
Corporations on the Closing Date in the manner provided under Section 13.1-720
of the Virginia Statute. The Merger shall become effective (the "Effective
Time") upon the issuance by the Commission of a Certificate of Merger (as
defined in the Virginia Statute) in accordance with Virginia Statute.

                  1.3. Effect of Merger. At the Effective Time, the separate
existence of the Company shall cease and the Company shall be merged with and
into the Surviving Corporation, and the Surviving Corporation shall possess all
of the rights, privileges, powers and franchises as well of a public as of a
private nature, and be subject to all the restrictions, disabilities and duties
of each of the Constituent Corporations as provided in Section 13.1-721 of the
Virginia Statute.

                  1.4. Charter and By-Laws of Surviving Corporation. From and
after the Effective Time and pursuant to the Articles of Merger: (i) the Charter
of Acquisition Sub shall be the Charter of the Surviving Corporation, unless
and until altered, amended or repealed as provided in the Virginia Statute,
(ii) the By-Laws of Acquisition Sub shall be the By-Laws of the Surviving
Corporation, unless and until altered, amended or repealed as provided in the
Virginia Statute, the Charter or such By-Laws, (iii) the directors of
Acquisition Sub shall be the directors of the Surviving Corporation, unless and
until removed, or until their respective terms of office shall have expired, in
accordance with the Virginia Statute, the Charter and the By-Laws of the
Surviving Corporation, as applicable and (iv) the officers of Acquisition Sub
shall be the officers of the Surviving Corporation, unless and until removed,
or until their terms of office shall have expired, in accordance with the
Virginia Statute, the Charter and the By-Laws of the Surviving Corporation, as
applicable.

                  1.5. Taking of Necessary Action. Prior to the Effective Time,
the parties hereto shall do or cause to be done all such acts and things as may
be necessary or appropriate in order to effectuate the Merger as expeditiously
as reasonably practicable, in accordance with this Agreement, the Articles of
Merger and the Virginia Statute.

                  1.6. Tax-Free Reorganization. For Federal income tax
purposes, the parties intend that the Merger be treated as a tax-free
reorganization within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"), by 




reason of Section 368(a)(2)(D) of the Code. Each party shall not take a
position on any tax return or reports inconsistent with this Section 1.6, and
shall use their reasonable efforts to maintain such reporting in the context of
an audit. Each party shall give the other prompt notice of any challenges or
investigations undertaken by any taxing agency in connection with such
reporting, and shall keep such other party fully informed of all aspects of
such ongoing challenge or investigation.

                  1.7. Closing. Unless this Agreement shall have been
terminated and the transactions contemplated by this Agreement abandoned
pursuant to the provisions of Article VIII, and subject to the provisions of
Article V, the closing of the Merger (the "Closing") will take place at 10:00
a.m. (New York time) on a date (the "Closing Date") to be mutually agreed upon
by the parties, which date shall be not later than the third Business Day after
all the conditions set forth in Article V shall have been satisfied (or waived
in accordance with Section 9.9, to the extent the same may be waived), unless
another date is agreed to in writing by the parties. The Closing shall take
place at the offices of O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza,
New York, New York 10112, unless another place is agreed to in writing by the
parties. As used herein, the term "Business Day" shall mean any day other than
a Saturday, Sunday or day on which banks are permitted to close in the City and
State of New York.

                                   ARTICLE II


                EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
                            CONSTITUENT CORPORATIONS

                  2.1. Total Consideration.

                   (a) Payment of Consideration. The entire consideration
payable by Purchaser with respect to all outstanding shares of capital stock of
the Company and for all options, warrants, rights, calls, commitments or
agreements of any character to which the Company is a party or by which it is
bound calling for the issuance of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for, or representing
the right to purchase or otherwise receive, directly or indirectly, any such
capital stock, or other arrangement to acquire, at any time or under any
circumstance, capital stock of the Company or any such other securities (such
options, warrants, rights, calls, commitments, agreements or arrangements being
sometimes hereinafter collectively referred to as "Equity Rights"; and the
Equity Rights, together with all such outstanding shares of capital stock of
the Company, being sometimes collectively hereinafter referred to as the "Fully
Diluted Company Shares") shall be an aggregate consideration payable as
follows:




          (i)  an aggregate amount of $4,600,000 in cash;

     and

          (ii) 1,038,000 shares of Purchaser Common Stock,

payable or issuable (as the case may be) as provided in Section 2.1(b).

                   (b) Effect on Capital Stock. At the Effective Time, subject
and pursuant to the terms and conditions of this Agreement and the Articles of
Merger, by virtue of the Merger and without any action on the part of the
Constituent Corporations or the holders of the capital stock of the Constituent
Corporations:

               (i) The shares of Company Common Stock issued and outstanding
      as of the Effective Time shall be exchanged for and converted into
      the right to receive shares of Purchaser Common Stock and/or cash as
      follows:

                    (A) all shares of Company Common Stock held by the
            Shareholder shall be exchanged and converted into the right to
            receive in the aggregate: (1) $2,600,000 in cash, and (2) 1,038,000
            shares of Purchaser Common Stock; and

                    (B) all Equity Rights held by AOL shall be surrendered and
            cancelled in exchange for the right to receive in the aggregate
            $2,000,000 in cash.

               (ii) In the event that any time during the Executory Period,
      the Company shall issue any capital stock or Equity Rights, the foregoing
      allocations of consideration shall be proportionately and equitably
      adjusted and reallocated among all holders of Company Common Stock.

               (iii) All Equity Rights not theretofore converted, exercised or
      exchanged for such shares shall cease to be outstanding and shall be
      canceled, terminated and extinguished effective immediately upon the
      Effective Time.

                (iv) Each share of Company Common Stock that is authorized but
      unissued shall cease to exist and no Purchaser Common Stock or other
      consideration shall be delivered in exchange therefor.

                 (v) For convenience of reference, the shares of Purchaser
      Common Stock to be issued upon the exchange and conversion of Company
      Common Stock in accordance with this Section 2.1 are sometimes
      hereinafter collectively referred to as the "Merger Shares."

                   (c) No Liability. Neither Purchaser, Acquisition Sub nor 
the Company shall be liable to any holder of shares of and/or 





rights to Company Common Stock or Purchaser Common Stock, as the case may be,
for shares (or dividends or distributions with respect thereto) and/or rights
to such shares of Purchaser Common Stock to be issued in exchange for Company
Common Stock and/or rights thereto pursuant to this Section 2.1, if, on or
after the expiration of six months following the Effective Date, such shares
and/or rights thereto are delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.

                  2.2. Approval of Transaction; Exchange of Securities.

                   (a) AOL Warrant and Note. Reference is made to that certain
warrant dated March 31, 1995 (the "AOL Warrant") for Series A Preferred Stock
of the Company (the "Company Preferred Stock") and the note of the Company,
dated April 2, 1995 (the "AOL Note") made in connection therewith in the
original principal amount of $270,000. Immediately prior to the Effective Time
and subject to and contingent upon the effectiveness of the Merger, AOL shall
surrender, terminate and cancel the AOL Note and relinquish its security
interest in the assets of the Company pursuant to the security agreement
entered into in connection with the AOL Note (which will concurrently be
terminated) and the AOL Warrant in exchange for the right to receive $2,000,000
in cash at Closing as full consideration.

                   (b) Agreement to Vote Shares. Prior to the Effective Time
and subject to and contingent upon the effectiveness of the Merger, the
Shareholder shall vote all of her shares of Company Common Stock, or execute
and deliver a written consent in favor of the approval of this Agreement, the
Articles of Merger and the Merger and any matter that could reasonably be
expected to facilitate the Merger.

                  2.3. Escrow Deposits.

                   (a) Escrow Agreement. Reference is made to the Escrow
Agreement which shall be dated as of the Effective Time among the Shareholder,
the Purchaser and the escrow agent named therein (the "Escrow Agent") in a form
mutually acceptable to the parties hereto (the "Escrow Agreement"). The Escrow
Agreement is being entered into for the purpose of securing the indemnification
obligations of the Company Principals under Article VII.

                   (b) Escrow Deposit. At the Effective Time, Purchaser shall
cause to be deposited with the Escrow Agent to be held by the Escrow Agent and
distributed subject to the terms of the Escrow Agreement (i) $130,000 from the
Shareholder in cash and (ii) certificates representing 103,800 Merger Shares
(of which all of the cash and all of the Purchaser Common Stock shall be
deposited on behalf of the Shareholder), together with stock powers duly
endorsed in blank for transfer on behalf of the Shareholder, who by her
execution and delivery of this Agreement, hereby authorizes and directs
Purchaser to make such deposit on her behalf (collectively, the "Escrow
Shares").




                   (c) Letter of Intent Escrow. Reference is also made to that
certain escrow agreement dated January 31, 1997 (the "LOI Escrow Agreement")
among the Company, the Purchaser and the escrow agent named therein (the "LOI
Escrow Agent"). The monies deposited with the LOI Escrow Agent pursuant to the
terms of the LOI Escrow Agreement (minus any and all fees and expenses payable
to the LOI Escrow Agent pursuant to the LOI Escrow Agreement) will, at the
Effective Time, be released and distributed by the LOI Escrow Agent pursuant to
the terms of the LOI Escrow Agreement.

                                  ARTICLE III


                         REPRESENTATIONS AND WARRANTIES


                  3.1. Representations and Warranties of the Company, the
Shareholder and Douma. The Company and the Company Principals hereby jointly
and severally represent and warrant to Purchaser and Acquisition Sub that,
except as disclosed in the disclosure schedule dated the date hereof, certified
as being such disclosure schedule by the President and Chief Executive officer
of the Company and delivered by the Company to Purchaser and Acquisition Sub
simultaneously herewith (which disclosure schedule shall reference with
specificity the representations and warranties to which the disclosures
contained therein relate) (the "Company Disclosure Schedule"):

                   (a) Organization; Good Standing; Qualification and Power.
The Company (i) is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia, (ii) has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now being conducted and as proposed to
be conducted to enter into this Agreement and the Articles of Merger, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby and (iii) is duly qualified and in
good standing to do business in those jurisdictions listed in the Company
Disclosure Schedule and in all other jurisdictions in which the failure to be
so qualified and in good standing could reasonably be expected to have a
material adverse effect on the business, properties, Liabilities, assets,
operations, results of operations, condition (financial or otherwise) or
affairs (a "Material Adverse Effect") of the Company. The Company has delivered
to Purchaser true and complete copies of the Charter and By-Laws of the
Company, in each case as amended to the date hereof. As used herein, "Charter"
shall mean, with respect to any corporation, those instruments that at the time
constitute its corporate charter as filed or recorded under the general
corporation law of the jurisdiction of its incorporation, including the
articles or certificate of incorporation or organization, and any amendments
thereto, as the same may have been restated, and any amendments thereto
(including any articles or certificates of merger or consolidation or
certificates of designation or similar 




instruments which effect any such amendment) which became effective after the
most recent such restatement.

                   (b) Equity Investments. The Company has never had, nor does
it currently have, any Subsidiaries, nor has it ever owned, nor does it
currently own, any capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership, joint venture
or other entity. As used herein, a "Subsidiary" of any corporation means
another corporation an amount of whose voting securities sufficient to elect at
least a majority of its Board of Directors is owned directly or indirectly by
such corporation.

                   (c) Capital Stock; Securities. The authorized capital stock
of the Company consists of 10,000 shares of Company Common Stock, of which
1,000 shares are outstanding. The Company has not authorized nor reserved any
shares of Company Preferred Stock for issuance upon exercise of the AOL
Warrant. All outstanding shares of Company Common Stock are validly issued and
outstanding, fully paid and non-assessable and not subject to preemptive
rights. The Company Disclosure Schedule sets forth a true and complete list of
the holders of shares of Company Common Stock and the number and class or
series of such shares owned of record and beneficially by each such holder.
There are no Equity Rights (other than the AOL Warrant). Except as set forth in
the Company Disclosure Schedule, there are no voting trusts, voting agreements,
proxies, first refusal rights, first offer rights, co-sale rights, transfer
restrictions or other agreements, instruments or understandings (whether
written or oral, formal or informal) with respect to the voting, transfer or
disposition of Company Common Stock to which the Company or any Company
Principal is a party or by which it is bound, or, to the best knowledge of the
Company, among or between any persons other than the Company. All shares of
Company capital stock and all other securities previously issued by the Company
have been issued in compliance with and pursuant to an exemption from all
applicable Federal and State securities or "blue sky" laws.

                   (d) Authority; No Consents. The execution, delivery and
performance by the Company of this Agreement, the Articles of Merger and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of the
Company; and this Agreement and the Articles of Merger have been, and the
Articles of Merger when executed and delivered by the Company will be duly and
validly executed and delivered by the Company, and this Agreement and the
Articles of Merger are the valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors, rights and remedies generally from time to time
in effect and to general equitable principles. Neither the execution, delivery
and performance of this Agreement or the Articles of Merger nor the
consummation by the Company of the transactions contemplated hereby or thereby
nor compliance by the 




Company with any provision hereof or thereof will (A) conflict with, (B) result
in any violations of, (C) cause a default under (with or without due notice,
lapse of time or both), (D) give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under or (E) result in the creation of any Encumbrance on or
against any assets, rights or property of the Company under any term, condition
or provision of (x) any instrument or agreement to which the Company is a party,
or by which the Company or any of its properties, assets or rights may be
bound, (y) any law, statute, rule, regulation, order, writ, injunction, decree,
permit, concession, license or franchise of any Governmental Authority
applicable to the Company or any of its properties, assets or rights or (z) the
Company's Charter or By-Laws. Except as contemplated by this Agreement, no
permit, authorization, consent or approval of or by, or any notification of or
filing with, any Governmental Authority or other person is required in
connection with the execution, delivery and performance by the Company of this
Agreement or the Articles of Merger or the consummation of the transactions
contemplated hereby or thereby, except for (i) the filing of the Articles of 
Merger with the Secretary of State of the State of Virginia and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business and (ii) such other consents, waivers, authorizations,
filings, approvals and registrations which if not obtained or made would not 
have a Material Adverse Effect on the Company or impair the ability of the 
Company and the Company Principals to consummate the transactions contemplated
by this Agreement or the Articles of Merger, including, without limitation, the
Merger.

                  (e) Financial Information.

               (i) The Company has previously delivered to Purchaser the
      following financial statements (collectively, the "Company Financial
      Statements"), the unaudited balance sheets of the Company as at December
      31, 1995 and December 31, 1996 (the "Company Balance Sheets"; and the date
      of the Company 1996 balance sheet being the "Company Balance Sheet Date"),
      and the related statements of income, respective years then ended
      (including footnotes thereto).

               (ii) The Company Financial Statements (A) are in accordance 
      with the books and records of the Company, (B) fairly present the 
      financial condition of the Company as at the respective dates indicated 
      and the results of operations of the Company for the respective periods 
      indicated and (C) except as set forth in the Company Disclosure Schedule, 
      have been prepared in accordance with generally accepted accounting 
      principles consistently applied ("GAAP").

                   (f) Absence of Undisclosed Liabilities. At the Company
Balance Sheet Date, (i) the Company had no liability or obligation of any
nature (whether known or otherwise 




discoverable, matured or unmatured, fixed or contingent, secured or unsecured,
accrued, absolute or otherwise ("Liability")) required to be set forth on the
Company Balance Sheet in order for the Company Balance Sheet to fairly present
the financial condition of the Company at the respective dates thereof in
accordance with GAAP, which was not provided for or disclosed thereon, and (ii)
all liability reserves established by the Company and set forth thereon were
adequate for all such Liabilities at the respective dates thereof. There were
no material loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 issued by the Financial Accounting Standards Board
in March, 1975 ("FAS No. 5")) which were not adequately provided for on the
Company Balance Sheet as required by FAS No. 5.

                   (g) Absence of Changes. Since the Company Balance Sheet
Date, the Company has been operated in the ordinary course, consistent with
past practice, and there has not been:

          (i) any material adverse change in the business, assets, properties,
     Liabilities, operations, results of operations, condition (financial or
     otherwise) or affairs (a "Material Adverse Change") of the Company;

          (ii) any damage, destruction or loss, whether or not covered by
     insurance, having or which could reasonably be expected to have a Material
     Adverse Effect;

          (iii) (A) any Liability created, assumed, guaranteed or incurred,
     or (B) any transaction, contract or commitment entered into, by the
     Company, in the case of either clause (A) or (B) other than in the
     ordinary course of business;

          (iv) any payment, discharge or satisfaction of any material
     Encumbrance by the Company or any cancellation by the Company of any
     material debts or claims or any amendment, termination or waiver of any
     rights of material value to the Company;

          (v) any declaration, setting aside or payment of any dividend or
     other distribution of any assets of any kind whatsoever with respect to
     any shares of the capital stock of the Company, or any direct or indirect
     redemption, purchase or other acquisition of any such shares of the
     capital stock of the Company;

          (vi) any stock split, reverse stock split, combination,
      reclassification or recapitalization of any Company Common Stock, or any
      issuance of any other security in respect of or in exchange for, any
      shares of Company Common Stock;

          (vii) any issuance by the Company of any shares of its capital stock
     or any debt security or any Equity Rights;





          (viii) any license, sale, transfer, pledge, mortgage or other
     disposition of any material tangible or intangible asset (including any
     Intellectual Property Rights) of the Company;

          (ix) any termination of, or written indication of an intention to
     terminate or not renew, any material contract, license, commitment or
     other agreement between the Company and any other person;

          (x) any material write-down or write-up of the value of any asset
     of the Company, or any material write-off of any accounts receivable or
     notes receivable of the Company or any portion thereof;

          (xi) any increase in or modification of compensation payable or to
     become payable to any director, officer, employee, consultant or agent of
     the Company, or the entering into of any employment contract with any
     officer or employee;

          (xii) any increase in or modification or acceleration of any benefits
     payable or to become payable under any bonus, pension, severance,
     insurance or other benefit plan, payment or arrangement (including, but
     not limited to, the granting of stock options, restricted stock awards or
     stock appreciation rights) made to, for or with any director, officer,
     employee, consultant or agent of the Company;

          (xiii) the making of any loan, advance or capital contribution to or
     investment in any person or the engagement in any transaction with any
     employee, officer, director or securityholder of the Company, other than
     advances to employees in the ordinary course of business for travel and
     similar business expenses;

          (xiv) any change in the accounting methods or practices followed by
     the Company or any change in depreciation or amortization policies or
     rates theretofore adopted;

          (xv) any forward sales commitments at a price less than the Company's
     cost of sales for such commitments;

          (xvi) any termination of employment of any officer or key employee of
     the Company or any expression of intention by any officer or key employee
     of the Company to resign from such office or employment with the Company;

          (xvii) any amendments or changes in the Company's Charter or By-Laws;

          (xviii) any labor dispute or any union organizing campaign;



          (xix) the commencement of any litigation or other action by the
     Company or the commencement or threat of commencement of any litigation or
     other action against the Company; or

          (xx) any agreement, understanding, authorization or proposal, whether
     in writing or otherwise, for the Company to take any of the actions
     specified in items (i) through (xx) above.

                  (h) Tax Matters. The Company: (i) has filed in a timely and
proper manner, consistent with then applicable laws, all Federal, state, local
and foreign Tax returns and Tax reports required to be filed by them through
the Closing Date, taking into account all appropriate extensions (the "Company
Returns"), with the appropriate governmental agencies in all jurisdictions in
which Company Returns are required to be filed and has paid all amounts shown
thereon to be due; and (ii) has paid all Taxes required to have been paid on or
before the Closing Date. All Taxes attributable to all taxable periods of the
Company ending on or before the Closing Date, to the extent not required to
have been previously paid have been adequately provided for on the Company
Balance Sheet. The Company will not accrue a Tax liability from the date of the
Company Balance Sheet up to and including the Closing Date, other than a Tax
liability accrued in the ordinary course of business. No Federal, state, local
or foreign tax audits or other administrative or court proceedings are
presently pending with respect to any of the Company Returns. The Company has
not been notified by any taxing authority that any such audit or proceeding is
going to be commenced. No waivers of statutes of limitations have been given or
requested with respect to the Company. Except as contested in good faith and
disclosed in the Company Disclosure Schedule, any deficiencies asserted or
assessments (including interest and penalties) made through the date of the
Company Balance Sheet as a result of any examination by the Internal Revenue
Service or by any other taxing authorities of any Company Return have been
fully paid or are adequately provided for on the Company Balance Sheet. No
additional Taxes have been proposed or asserted since the Company Balance Sheet
Date. The Company has not made an election to be treated as a "consenting
corporation" under Section 341(f) of the Code. The Company has not and will
not, on or before the Closing Date, incur any Tax liability pursuant to Section
541 of the Code. The Company has not agreed to, nor is required to make any
adjustment under Section 481(a) of the Code by reason of a change in accounting
method or otherwise. The Company is not now, nor has it ever been, a member of
a consolidated or combined group for Federal, state, local or foreign tax
purposes nor has it ever been included in a consolidated or combined tax return
for Federal, state, local or foreign tax purposes. The Company is not a party
to any agreement or contract with any "disqualified individual" (as defined in
Section 280G (c) of the Code) that, individually or taking into account any 
other agreements or contracts currently in effect between the Company and such
disqualified individual,




will result in the disallowance of any deduction for any payment under such
agreement or contract as an "excess parachute payment" (as defined in Section
280G(b)(1) of the Code). The Company and each of its predecessors have complied
with all applicable Laws relating to the payment and withholding of Taxes, and
has withheld and paid over all amounts required by Laws to be withheld and paid
from the wages and salaries of employees, and the Company is not liable for any
Taxes for failure to comply with such Laws. As used in this Agreement, "Tax"
means any of the Taxes and "Taxes" means, with respect to any entity, (A) all
income taxes (including any tax on or based upon net income, gross income,
income as specially defined, earnings, profits or selected items of income,
earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, alternative or add-on
minimum taxes, customs duties and other taxes, fees, assessments or charges of
any kind whatsoever, together with all interest and penalties, additions to 
tax and other additional amounts imposed by any taxing authority (domestic or
foreign) on such entity and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of (i) 
being a "transferee" (within the meaning of Section 6901 of the Code or any
other applicable law) of another entity, (ii) a member of an affiliated or
combined group or (iii) any contractual obligation.

                   (i) Title to Assets, Properties and Rights and Related
Matters. The Company has good and marketable title to all assets, properties
and interests in properties, real, personal or mixed, reflected, respectively,
on the Company Balance Sheet acquired after the Company Balance Sheet Date
(except property sold or otherwise disposed of since the Company Balance Sheet
Date, in the ordinary course of business and accounts receivable and notes
receivable paid in full subsequent to the Company Balance Sheet Date), or not
so reflected therein but used or useful in the conduct or operation of the
Company's business free and clear of all Encumbrances, of any kind or character,
except for (i) those Encumbrances set forth in the Company Disclosure  Schedule
and (ii) liens for current taxes not yet due and payable and (iii) statutory
mechanics and materialmen's liens. The assets, properties and interests in
properties of the Company are in good operating condition and repair in all
material respects (ordinary wear and tear excepted). The assets, properties and
interests in properties of the Company to be owned, leased or licensed by the
Surviving Corporation at the Effective Time shall include all assets, properties
and interests in properties (real, personal and mixed, tangible and intangible)
and all rights, leases, licenses and other agreements necessary to enable the
Surviving Corporation to carry on the business of the Company as presently
conducted by the Company. As used herein, the term "Encumbrances" shall mean and
include security interests, mortgages, liens, pledges, guarantees, charges,
easements, reservations, restrictions, clouds, equities, rights of way, options,
rights of first refusal and all other 




encumbrances, whether or not relating to the extension of credit or the
borrowing of money. Acquisition Sub will acquire at least 90% of the fair
market value of the net assets and at least 70% of the fair market value of the
gross assets held by the Company immediately prior to the Effective Date.

                   (j) Real Property-Owned or Leased. The Company does not
currently own, nor has it or any of its predecessors ever owned, any real
property. The Company Disclosure Schedule contains a list and brief description
of (i) all real property leased by the Company, together with all buildings and
other structures and material improvements located on such real property (the
"Leased Real Property"), and (ii) with respect to each lease covering the
Leased Real Property (collectively, the "Leases"), (A) the name of the lessor,
(B) any requirement of consent of the lessor to assignment (including
assignment by way of merger or change of control) and (C) the termination date 
of the Lease. The Company is the owner and holder of all the leasehold estates
purported to be granted by each Lease and all Leases are in full force an d
effect and constitute valid and binding obligations of the Company. The Company
has made available to Purchaser true and complete copies of all Leases. Except
as set forth in the Company Disclosure Schedule, all improvements included in
the Leased Real Property are in good operating condition and repair in all
material respects (ordinary wear and tear excepted) and there does not exist any
condition which interferes with the economic value or use of such property and
improvements.

                   (k) Intellectual Property.

          (i) The Company owns free and clear of all Encumbrances, has the
     exclusive right to use, sell, license (or sublicense) transmit, broadcast,
     deliver (electronically or otherwise) and dispose-of, and has the right to
     bring actions for the infringement of, all Intellectual Property Rights
     (other than the Licensed Software) necessary or required for the conduct
     of its business as currently conducted and as proposed to be conducted
     (collectively, the "Company Rights") (which rights are described in the
     Company Disclosure Schedule);

          (ii) the execution, delivery and performance of this Agreement and
     the Articles of Merger and the consummation of the Merger and the
     consummation of the other transactions contemplated hereby and thereby,
     will not breach, violate or conflict with any instrument or agreement
     governing any Company Rights, will not cause the forfeiture or termination
     or give rise to a right of forfeiture or termination of any Company Right
     or in any way impair the right of the Company or the Surviving Corporation
     to use, sell, license (or sublicense), transmit, broadcast, deliver
     (electronically or otherwise) or dispose of or to bring any action for the
     infringement of, any Company Right or portion thereof;





          (iii) there are no royalties, honoraria, fees or other payments
     payable by the Company to any person by reason of the ownership, use,
     license (or sublicense), sale, transmission, broadcast, delivery
     (electronically or otherwise) or disposition of the Company Rights;

          (iv) neither the manufacture, marketing, license, sale, transmission,
     broadcast, distribution, delivery (electronically or otherwise) or use of
     any product or service currently or currently proposed to be licensed,
     sold, marketed, transmitted, broadcast, distributed, delivered
     (electronically or otherwise) or used by the Company or currently under
     development by the Company, violates any license or agreement of the
     Company with any third party or infringes any common law or statutory
     rights of any other party, including, without limitation, rights relating
     to defamation, contractual rights, Intellectual Property Rights and rights
     of privacy or publicity; nor, to the best knowledge of the Company, is any
     third party infringing upon, or violating any license or agreement with
     the Company relating to, any Company Right; and, to the best knowledge of
     the Company, there is no pending or threatened claim or litigation
     contesting the validity, ownership or right to use, sell, license,
     transmit, broadcast, distribute, deliver (electronically or otherwise) or
     dispose of any Company Right, nor to the best knowledge of the Company, is
     there a basis for any such claim, nor has the Company received any notice
     asserting that any Company Right or the proposed use, manufacture, sale,
     license, transmission, broadcast, distribution, delivery (electronically
     or otherwise) or disposition thereof conflicts or will conflict with the
     rights of any other party, nor, to the best knowledge of the Company, is
     there any basis for any such assertion; and

          (v) The Company has made and will continue through the Effective Time
     to take all reasonable steps necessary, appropriate or desirable to
     safeguard and maintain the secrecy and confidentiality of, and its
     proprietary rights in, all Company Rights.

The Company Disclosure Schedule contains a true and complete list of all (A) of
the Company's patents, patent applications, trademarks, trademark applications,
trade names, service marks, service mark applications, copyrights and copyright
applications and (B) other filings and formal actions made or taken pursuant to
Federal, state, local and foreign laws by the Company to perfect or protect its
interest in the Company Rights. As used herein, the term "Intellectual Property
Rights" shall mean all industrial and intellectual property rights, including,
without limitation, patents, patent applications, patent rights, trademarks,
trademark applications, trade names, service marks, service mark applications,
copyrights, copyright applications, franchises, licenses, databases, computer
programs and other computer software (including, but not limited to, the
Software), 




user interfaces, know-how, trade secrets, customer lists, proprietary
technology, processes and formulae, source code, object code, algorithms,
architecture, structure, display screens, layouts, development tools,
instructions, templates, marketing materials, inventions, trade dress, logos
and designs and all documentation and media constituting, describing or
relating to the foregoing.

                   (l)     Company Software.

          (i) The Company Disclosure Schedule sets forth a true and complete
     list and description of all software systems and applications (A) designed
     or developed by employees of the Company or by consultants or independent
     contractors on the Company's behalf (the "Owned Software") or (B) licensed
     by the Company from any third party or constituting "off-the-shelf"
     software (the "Licensed Software"), in each case that is manufactured or
     used by the Company in the operation of its business or marketed, licensed
     or sold or proposed to be marketed, licensed or sold by the Company to
     third parties (collectively, the "Software") and, in the case of Licensed
     Software, the Company Disclosure Schedule identifies each license
     agreement with respect thereto.

          (ii) All of the Owned Software is original and is protected by the
     copyright laws of the United States. The Company owns the Owned Software
     free and clear of Encumbrances (other than valid third party patent rights
     of which the Company is unaware) and has not sold, assigned, licensed,
     distributed or in any other way disposed of or Encumbered the Owned
     Software other than licenses granted in the ordinary course of business as
     disclosed on the Company Disclosure Schedule.

          (iii) The Licensed Software is validly held and used by the Company
     and is currently, and after giving effect to the Merger, will be, fully
     utilizable by the Company pursuant to the applicable license agreement
     with respect thereto without the consent of or notice to any third party.
     To the best knowledge of the Company, all of the Company's computer
     hardware has validly licensed software installed therein and the Company's
     use thereof does not conflict with or violate any such license.

          (iv) The Company has not knowingly altered its data, or any Software
     or supporting software that may in turn damage the integrity of the data,
     whether stored in electronic, optical or magnetic or other form. To the
     best knowledge of the Company, the Software does not contain any viruses
     (the Company having employed standard virus checkers to identify the
     same). The Company has furnished Purchaser with all existing documentation
     relating to the use, maintenance and operation of the Software.




                  (m) Agreements, Etc. The Company Disclosure Schedule sets
forth a true and complete list of all contracts, agreements and other
instruments to which the Company is a party which either have (i) an
ascertainable aggregate value, or involve, payments or assets, of at least
$10,000 or (ii) in the case of contracts, agreements and other instruments
which do not have reasonably ascertainable values, such contracts, agreements
and other instruments which are otherwise material to the business and/or
operations of the Company. The Company has furnished to Purchaser true and
complete copies of all such agreements listed in the Company Disclosure
Schedule and (i) each such agreement (A) is the legal, valid and binding
obligation of the Company and, to the best knowledge of the Company, the legal,
valid and binding obligation of each other party thereto, in each case
enforceable in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights and remedies generally from time to time in effect and to general
equitable principles, (B) is in full force and effect and (ii) neither the
Company nor the other party or parties thereto is or are in material default
thereunder.

                  (n) No Defaults. The Company has in all material respects
performed all the obligations required to be performed by it to date and is not
in default or alleged to be in default under (i) its Charter or By-Laws or (ii)
any material agreement, lease, contract, commitment, instrument or obligation
to which the Company is a party or by which any of its properties, assets or
rights are or may be bound or affected, and there exists no event, condition or
occurrence which, with or without due notice or lapse of time, or both, would
constitute such a default by it of any of the foregoing.

                  (o) Litigation, Etc. There are no (i) actions, suits, claims,
investigations or legal or administrative or arbitration proceedings
(collectively, "Actions") pending, or to the best knowledge of the Company,
threatened against the Company, whether at law or in equity, or before or by
any Federal, state, local, municipal, foreign or other governmental court,
department, commission, board, bureau, agency or instrumentality ("Governmental
Authority") or (ii) judgments, decrees, injunctions or orders of any
Governmental Authority or arbitrator against the Company. There are no Actions
pending or, to the best knowledge of the Company, threatened, nor, to the best
knowledge of the Company, any basis therefor, with respect to (A) the current
employment by, or association with, the Company, or future employment by, or
association with, Purchaser or the Surviving Corporation, of any of the present
officers or employees of or consultants to the Company (collectively, the
"Designated Persons"), (B) the use, in connection with any business presently
conducted or proposed to be conducted by the Company or the Surviving
Corporation, of any information, techniques or processes presently utilized or
proposed to be utilized by the Company, Purchaser, the Surviving Corporation or
any of the Designated Persons, that the Company, Purchaser, the




Surviving Corporation or any of the Designated Persons are or would be
prohibited from using as the result of a violation or breach of, or conflict
with any agreements or arrangements between any Designated Person and any other
person, or any legal considerations applicable to unfair competition, trade
secrets or confidential or proprietary information or (C) the validity,
ownership or right to use, sell, license or dispose of, under any Company
Rights. The Company has delivered to Purchaser all material documents and
correspondence relating to such matters referred to in the Company Disclosure
Schedule.

                  (p) Accounts and Notes Receivable. All the accounts
receivable and notes receivable owing to the Company as of the date hereof
constitute, and as of the Effective Time will constitute, valid and enforceable
claims arising from bona fide transactions in the ordinary course of business,
and there are no known or asserted claims, refusals to pay or other rights of
set-off against any thereof. There is (a) no account debtor or note debtor
delinquent in its payment by more than 90 days, (b) no account debtor or note
debtor that has refused (or, to the best knowledge of the Company, threatened
to refuse) to pay its obligations for any reason, (c) to the best knowledge of
the Company, no account debtor or note debtor that is insolvent or bankrupt and
(d) no account receivable or note receivable which is pledged to any third
party by the Company. Except to the extent of a reserve which the Company has
established specifically for doubtful accounts receivable and notes receivable
(which reserve is set forth on the Company Balance Sheet is reasonable under
the circumstances and is consistent with past practice), all of the accounts
receivable of the Company existing at the Closing shall be paid in full by not
later than the ninetieth (90th) day after the Closing and all of the notes
receivable shall be paid in accordance with the terms thereof.

                   (q) Accounts and Notes Payable. All accounts payable and
notes payable by the Company to third parties as of the date hereof arose in
the ordinary course of business, and, except as set forth in the Company
Disclosure Schedule, there is no such account payable or note payable
delinquent in its payment, except those contested in good faith and already
disclosed in the Company Disclosure Schedule.

                   (r) Compliance; Governmental Authorizations. The Company has
complied and is presently in compliance in all material respects with all
material Federal, state, local or foreign laws, statutes, ordinances,
judgments, regulations and orders applicable to it or its business, properties,
facilities or operations (including, by way of example and not in limitation
thereof, any of the foregoing that concern the protection of the environment or
human health). The Company has all material Federal, state, local and foreign
governmental authorizations, consents, approvals, licenses and permits necessary
in the conduct of its business as presently conducted or as proposed to be
conducted, such authorizations, consents, approvals, licenses





and permits are in full force and effect, no violations are or have been
recorded in respect of any thereof and no proceeding is pending or, to the best
knowledge of the Company, threatened to revoke or limit any thereof. The
Company Disclosure Schedule contains a true and complete list of all such
governmental licenses, authorizations, consents, approvals, permits, orders,
decrees and other compliance agreements under which the Company is operating or
bound, the Company is not in default or alleged to be in default under any
thereof and the Company has furnished to Purchaser true and complete copies
thereof. None of such authorizations, consents, approvals, licenses and permits
shall be affected in any material respect by the Merger or the transactions
contemplated hereby.

                   (s) Employees. etc. Except as set forth in the Company
Disclosure Schedule, (i) the Company is not delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by them to date or amounts required to
be reimbursed to such employees, (ii) upon termination of the employment of any
such employees, neither the Company, Purchaser, Acquisition Sub nor the
Surviving Corporation will by reason of anything done prior to the Closing be
liable to any of such employees for so-called "severance pay" or any other
payments, (iii) the Company is in compliance in all material respects with all
material Federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices, terms and conditions of employment
and wages and hours, and (iv) no employee has notified the Company that such
employee will terminate his or her employment or engagement with the Company or
the Surviving Corporation. To the best knowledge of the Company, no employee of
the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of such employee with the Company or any other party because of
the nature of the business conducted or proposed to be conducted by the Company
or the execution and delivery of the Non-Disclosure Agreement by such employee.

                   (t)      Employee Benefit Plans and Contracts.

          (i) Except as set forth on the Company Disclosure Schedule, the
     Company has no "employee benefit plan," as defined in Section 3 (3) of the
     Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
     no other material written or formal plans or agreements involving direct
     or indirect compensation (including any employment agreements entered into
     between the Company and any Employee of the Company) currently or
     previously maintained, contributed to or entered into by the Company or
     any ERISA Affiliate thereof for the benefit of any Employee or former
     Employee under which the Company or any ERISA Affiliate thereof has any
     present or future obligation or liability (the "Employee Plans"). For
     purposes of the preceding sentence, "ERISA Affiliate" shall mean any
     entity which is a 




     member of (A) a "controlled group of corporations," as defined in Section
     414(b) of the Code, (B) a group of entities under "common control," as
     defined in Section 414(c) of the Code or (C) an "affiliated service 
     group," as defined in Section 414(m) of the Code or treasury regulations 
     promulgated under Section 414(o) of the Code, any of which includes the 
     Company. For purposes of this Section 3.1(t), "Employee" means any common 
     law employee, consultant or director of the Company.

          (ii) The Company Disclosure Schedule lists each employment, severance
     or other similar contract, arrangement or policy and each plan or
     arrangement (written or oral) providing for insurance coverage (including
     any self-insured arrangements), workers, benefits, vacation benefits,
     retirement benefits, deferred compensation, profit-sharing, bonuses, stock
     options, stock appreciation or other forms of incentive compensation or
     post-retirement insurance, compensation or benefits which (A) is not an
     Employee Plan, (B) is entered into, maintained or contributed to, as the
     case may be, by the Company, (C) covers any Employee or former Employee, 
     and (D) under which the Company has any present or future obligation or
     liability. Such contracts, plans and arrangements as are described above,
     are hereinafter referred to collectively as the "Benefit Arrangements."
     Each Benefit Arrangement has been maintained in substantial compliance
     with its terms and with the requirements prescribed by any and all
     material laws, statutes, rules, regulations, orders and judgments which
     are applicable to such Benefit Arrangements.

          (iii) Except as set forth on the Company Disclosure Schedule, (A)
     each Employee Plan and Benefit Arrangement has been operated and
     administered in compliance with ERISA, the Code and in accordance with the
     provisions of all other applicable federal and state laws; (B) all
     reporting and disclosure obligations imposed under ERISA and the Code have
     been satisfied with respect to each Employee Plan and Benefit Arrangement;
     (C) each Employee Plan which is a "group health plan" within the meaning
     of Section 5000 of the Code has been maintained in compliance with Section
     4980(B) of the Code and Title I, Subtitle B, Part 6 of ERISA and no tax
     payable on account of Section 4908B of the Code has been or is expected to
     be incurred; (D) all contributions due and payable on or before the
     Closing Date in respect of any Employee Plan or Benefit Arrangement have
     been made in full and proper form, or adequate accruals have been provided
     for in the financial statements for all other contributions or amounts in
     respect of the Employee Plans or Benefit Arrangements for periods ending
     on the Closing Date; (E) neither the Company nor any of its ERISA
     Affiliates, nor to the knowledge of the Company and its ERISA Affiliates,
     any other "disqualified person" or "party in interest" (as defined in
     Section 4975 of the Code and Section 3(14) of ERISA, respectively) with
     respect to an Employee Plan has 




     breached the fiduciary rules of the ERISA or engaged in a prohibited
     transaction which could subject the Company or its ERISA Affiliates to any
     tax or penalty imposed under Sections 4975 of the Code or Section 502(i),
     (j) or (1) of ERISA; (F) neither the Company nor any of its ERISA
     Affiliates currently is or has ever maintained or been obligated to
     contribute to (1) a "multiple employer plan" (within the meaning of
     Section 413 of the Code); (2) a "multiemployer plan" (as defined in
     Section 3(37) of ERISA); (3) a "defined benefit plan" (as defined in
     Section 3(35) of ERISA) or (4) any Employee Plan that provides
     post-retirement health of life insurance benefits; or (G) no benefit or
     amount payable or which may become payable by the Company or its ERISA
     Affiliates pursuant to any Employee Plan or Benefit Arrangement, shall
     constitute an "excess parachute payment," within the meaning of Section
     280G of the Code, which is or may be subject to the imposition of an
     excise tax under Section 4999 of the Code or which would not be deductible
     by reason of Section 280G of the Code.

                   (u) Certain Agreements. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, bonus or otherwise) becoming due
to any director or employee of the Company from the Company, under any Employee
Plan, Benefit Arrangement or otherwise, (ii) materially increase any benefits
otherwise payable under any Employee Plan or the Benefit Arrangement or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.

                   (v) Insurance. The Company Disclosure Schedule contains a
list of all policies of liability, theft, fidelity, fire, product liability,
errors and omissions, workmen's compensation, indemnification of directors and
officers and other similar forms of insurance held by the Company (specifying
the insurer, the amount of coverage, the type of insurance, the policy number
and any pending claims thereunder) and a history of all claims made by the
Company thereunder and the status thereof. All such policies of insurance are
in full force and effect and all premiums with respect thereto are currently
paid and, to the best knowledge of the Company, no basis exists for termination
of any thereof on the part of the insurer. The amounts of coverage under such
policies of insurance are adequate for the assets and properties of the
Company. The Company has not, during the last three fiscal years, been denied
or had revoked or rescinded any policy of insurance.

                   (w) Bank Accounts; Powers of Attorney. The Company
Disclosure Schedule sets forth a true and complete list of (i) all bank accounts
and safe deposit boxes of the Company and all persons who are signatories
thereunder or who have access thereto and (ii) the names of all persons, firms,
associations, corporations or business organizations holding general or special




powers of attorney from the Company and a summary of the terms thereof.

                   (x) Brokers. The Company has not, nor have any of its
officers, directors, securityholders or employees, employed any broker or
finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby.

                   (y) Related Transactions. Except as set forth in the Company
Disclosure Schedule, no current or former director, officer or securityholder
that is an affiliate of the Company or any associate (as defined in the rules
promulgated under the Exchange Act) thereof, is now, or since the inception of
the Company has been, (i) a party to any transaction with the Company 
(including, but not limited to, any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal
property from, or borrowing money from, or otherwise requiring payments to, any
such director, officer or affiliated securityholder of the Company or associate
thereof), or (ii) the direct or indirect owner of an interest in any
corporation, firm, association or business organization which is a present or
potential competitor, supplier or customer of the Company (other than
non-affiliated holdings in publicly-held companies), nor does any such person
receive income from any source other than the Company which relates to the
business of, or should properly accrue to, the Company.

                   (z) Traffic/Usage. BetterHealth.com, the Company's site on
AOL (the "Site"), on average receives approximately 98,000 hours of usage per
month and experiences 2,000,000 entries per month, which numbers represent the
Company's good faith estimate of the monthly average of hours of usage and
entries since October 1, 1996.

                   (aa) Minute Books. The minute books of the Company provided
to Purchaser for review contain a complete summary of all meetings of and
actions by directors and securityholders of the Company from the time of its
incorporation to the date of such review and reflect all actions referred to in
such minutes accurately in all material respects.

                   (ab) Board Approval. The Board of Directors of the Company
has unanimously (i) approved this Agreement, the Articles of Merger and each of
the other documents executed and delivered in connection with the Merger
Agreements to which the Company is a party and the transactions contemplated
hereby and thereby, (ii) determined that the Merger is in the best interests of
the Shareholder and is on terms that are fair to the Shareholder and (iii)
recommended that the Shareholder approves the Merger in accordance with the
Virginia Statute.

                   (ac) Vote Recquired. The affirmative vote of at least 51% of
the outstanding shares of the Company Common Stock approving the Merger and
this Agreement are the only votes and/or 




consents of the holders of any class or series of the Company's capital stock
necessary to approve this Agreement and the transactions contemplated hereby.

                   (ad) Company Not an Interested Securityholder or an
Acquiring Person. As of the date of this Agreement, neither the Company nor, to
the best knowledge of the Company, any of its Affiliates (other than AOL) is an
"Interested Securityholder" of Purchaser as such term is defined in Section 203
of the Delaware Statute or Purchaser's Charter.

                   (ae) Company Expenses. The Schedule of Expenses being
delivered at the Closing sets forth a true, correct and complete schedule of
all Company Expenses that have been incurred or paid by or on behalf of the
Company (whether or not theretofore billed) through the Effective Time, and
there are no Company Expenses other than as set forth therein.

                   (af) Officers and Directors. Set forth on Schedule 3.1(af)
is a list of current officers and directors of the Company.

                   (ag) Disclosure. Neither Section 3.1 of this Agreement
(including the Company Disclosure Schedule) nor any written information,
written statement, certificate or exhibit furnished to Purchaser or Acquisition
Sub by or on behalf of the Company pursuant hereto, contains or will contain
any untrue statement of a material fact or, when taken together, omits or will
omit to state a material fact internal to the business of the Company necessary
in order to make the statements or facts contained herein and therein not
misleading in light of the circumstances under which they were made.

                   (ah) Knowledge Definition. As used herein, "to the best
knowledge of the Company" and like phrases shall mean and include (i) actual
knowledge and (ii) that knowledge which each of the Company Principals should
have obtained in the management of his or her business affairs after reasonable
inquiry. In connection therewith, the knowledge (both actual and constructive)
of any of the Company Principals and/or any other officer or director of the
Company shall be imputed to be the knowledge of the Company.

                  3.2. Several Representations and Warranties of the 
Shareholder, Douma and AOL.

                   (a) Representations and Warranties of the Shareholder. The
Shareholder represents and warrants to Purchaser and Acquisition Sub with
respect to herself as follows:

          (i) Title; Absence of Certain Agreements. The Shareholder is the
     lawful and record owner of, and has good and marketable title to all of
     the shares of Company Common Stock with the full power and authority to
     vote such Company Common Stock and transfer and otherwise dispose of such




     Company Common Stock, free and clear of all Encumbrances. There are no
     agreements or understandings between the Shareholder or any other person
     with respect to the voting, sale or other disposition of Company Common
     Stock or any other matter relating to Company Common Stock.

          (ii) Authority - General. The Shareholder has full and absolute power
     and authority to enter into this Agreement and the Escrow Agreement and
     this Agreement and the Escrow Agreement are valid and binding obligations
     of the Shareholder enforceable against the Shareholder in accordance with
     their respective terms, subject to applicable bankruptcy, reorganization,
     insolvency, moratorium and other laws affecting creditors' rights and
     remedies generally from time to time in effect and to general equitable
     principles. Neither the execution, delivery and performance of this
     Agreement and the Escrow Agreement, nor the consummation of the
     transactions contemplated hereby or thereby nor compliance by the
     Shareholder with any of the provisions hereof or thereof will (i) (A)
     conflict with, (B) result in any violations of, (C) cause a default under
     (with or without due notice, lapse of time or both), (D) give rise to any
     right of termination, amendment, cancellation or acceleration of any
     obligation contained in or the loss of any material benefit under or (E)
     result in the creation of any Encumbrance upon or against any assets,
     rights or property of the Company (or against any Company Common Stock,
     Purchaser capital stock or common stock of the Surviving Corporation),
     under any term, condition or provision of (x) any agreement or instrument 
     to which the Shareholder is a party, or by which the Shareholder or her
     properties, assets or rights may be bound, or (y) any law, statute, rule,
     regulation, order, writ, injunction, decree, permit, concession, license
     or franchise of any Governmental Authority applicable to the Shareholder
     or any of her properties, assets or rights, which conflict, breach,
     default or violation or other event would prevent the consummation of the
     transactions contemplated by this Agreement, the Articles of Merger or the
     Escrow Agreement, as the case may be. Except as specified in Section
     3.1(d) hereof or otherwise contemplated by this Agreement, no permit,
     authorization, consent or approval of or by, or any notification of or
     filing with, any Governmental Authority or other person is required in
     connection with the execution, delivery and performance by the Shareholder
     of this Agreement or the Escrow Agreement, or the consummation by the
     Shareholder of the transactions contemplated hereby or thereby.

              (iii) Investment Representations.

                    (A) The Shareholder (i) is acquiring the shares of the
            Purchaser Common Stock, being issued to her pursuant to the Merger
            for investment and for her own account and not as a 




            nominee or agent for any other person and with no present
            intention of distributing or reselling such shares or any part
            thereof in any transactions that would be in violation of the
            Securities Act or any state securities or "blue-sky" laws, (ii) has
            had an opportunity to ask questions of and has received
            satisfactory answers from the officers of Purchaser or persons
            acting on Purchaser's behalf concerning Purchaser and the terms and
            conditions of an investment in Purchaser Common Stock, (iii) has
            sufficient knowledge and experience in financial affairs and is
            capable of evaluating the risks of acquiring and holding shares of
            Purchaser Common Stock, (iv) is aware of Purchaser's business
            affairs and financial condition and has acquired sufficient
            information about Purchaser to reach an informed and knowledgeable
            decision to acquire the shares of Purchaser Common Stock to be
            issued to her in the Merger, (v) can afford to suffer a complete
            loss of her investment in shares of Purchaser Common Stock and (vi)
            understands (1) that the shares of Purchaser Common Stock to be
            issued to her in the Merger have not been registered for sale under
            the Securities Act or any state securities or "blue-sky" laws in
            reliance upon an exemption therefrom, which exemption depends upon,
            among other things, the bona fide nature of the investment intent
            of the Shareholder as expressed hereunder, (2) that such shares of
            Purchaser Common Stock must be held indefinitely and not sold until
            such shares are registered under the Securities Act and any
            applicable state securities or "blue-sky" laws, unless an exemption
            from such registration is available, (3) that, except as provided
            in Section 6.3, Purchaser is under no obligation to so register
            such shares and (4) that the certificates evidencing such shares
            will be imprinted with a legend in the form set forth in Section
            6.2(b) that prohibits the transfer of such shares, except as
            provided in Section 6.2. The Shareholder is an "accredited
            investor" within the meaning of Rule 501(a) under the Securities
            Act. The Shareholder has no plan or intention to sell, exchange or
            dispose of any of the shares of Company Common Stock received in
            connection with the transactions contemplated herein.

                   (b) Representation and warranties of Douma. Douma represents
and warrants to Purchaser and Acquisition Sub with respect to himself that he
has full and absolute power and authority to enter into this Agreement and the
Escrow Agreement and this Agreement and the Escrow Agreement are valid and
binding obligations of Douma enforceable against him in accordance with their
respective terms, subject to applicable bankruptcy, 




reorganization, insolvency, moratorium and other laws affecting creditors'
rights and remedies generally from time to time in effect and to general
equitable principles. Neither the execution, delivery and performance of this
Agreement and the Escrow Agreement, nor the consummation of the transactions
contemplated hereby or thereby nor compliance by Douma with any of the
provisions hereof or thereof will (i) conflict with, (ii) result in any
violations of, (iii) cause a default under (with or without due notice, lapse
of time or both), (iv) give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under or (v) result in the creation of any Encumbrance upon or
against any assets, rights or property of the Company (or against any Company
Common Stock, Purchaser capital stock or common stock of the Surviving
Corporation), under any term, condition or provision of (x) any agreement or
instrument to which Douma is a party, or by which he or any of his properties,
assets or rights may be bound, or (y) any law, statute, rule, regulation,
order, writ, injunction, decree, permit, concession, license or franchise of
any Governmental Authority applicable to him or any of his properties, assets
or rights, which conflict, breach, default or violation or other event would
prevent the consummation of the transactions contemplated by this Agreement or
the Escrow Agreement, as the case may be. Except as specified in Section 3.1(d)
hereof or otherwise contemplated by this Agreement, no permit, authorization,
consent or approval of or by, or any notification of or filing with, any
Governmental Authority or other person is required in connection with the
execution, delivery and performance by Douma of this Agreement or the Escrow
Agreement or the consummation by him of the transactions contemplated hereby or
thereby.

                   (c) Representations and Warranties of AOL. AOL represents
and warrants to Purchaser and Acquisition Sub with respect to itself as
follows:

          (i) Title; Absence of Certain Agreements. AOL is the lawful and record
     owner of, and has good and marketable title to the AOL Warrant and the AOL
     Note with the full power and authority to exercise the rights under and
     transfer and otherwise dispose of the AOL Warrant and/or the AOL Note,
     free and clear of all Encumbrances. There are no agreements or
     understandings between AOL or any other person with respect to the
     exercise, sale or other disposition of the AOL Warrant and the AOL Note or
     any other matter relating to the AOL Warrant and the AOL Note.

          (ii) Authority - General. AOL has full and absolute power and
     authority to enter into this Agreement and this Agreement is a valid and
     binding obligation of AOL enforceable against AOL in accordance with its
     terms, subject to applicable bankruptcy, reorganization, insolvency,
     moratorium and other laws affecting creditors' rights and remedies
     generally from time to time in effect and to general equitable principles.
     Neither the execution, 




     delivery and performance of this Agreement, nor the consummation of
     the transactions contemplated hereby nor compliance by AOL with any of the
     provisions hereof will (i) conflict with, (ii) result in any violations
     of, (iii) cause a default under (with or without due notice, lapse of
     time or both), (iv) give rise to any right of termination, amendment,
     cancellation or acceleration of any obligation contained in or the loss of
     any material benefit under or (v) result in the creation of any
     Encumbrance upon or against any assets, rights or property of the Company
     (or against any Company Common Stock, Purchaser capital stock or common
     stock of the Surviving Corporation), under any term, condition or
     provision of (x) any agreement or instrument to which AOL is a party, or by
     which AOL or any of its properties, assets or rights may be bound, or (y)
     any law, statute, rule, regulation, order, writ, injunction, decree,
     permit, concession, license or franchise of any Governmental Authority
     applicable to AOL or any of its properties, assets or rights, which
     conflict, breach, default or violation or other event would prevent the
     consummation of the transactions contemplated by this Agreement, or the
     Articles of Merger, as the case may be. Except as specified in Section
     3.1(d) hereof or otherwise contemplated by this Agreement, no permit,
     authorization, consent or approval of or by, or any notification of or
     filing with, any Governmental Authority or other person is required in
     connection with the execution, delivery and performance by AOL of this
     Agreement or the consummation by AOL of the transactions contemplated
     hereby.

                  3.3. Representations and Warranties of Purchaser. Purchaser
represents and warrants to each of the Shareholder and AOL, except as disclosed
in the disclosure schedule dated the date hereof, certified as being such
disclosure schedule by the Chief Executive Officer of the Purchaser and
delivered by the Purchaser to the Company and each of the Shareholder and AOL
simultaneously herewith (which disclosure schedule shall reference with
specificity the representations and warranties to which the disclosures
contained therein relate) (the "Purchaser Disclosure Schedule"):

                   (a) Organization; Good Standing; Qualification and Power.
Each of Purchaser and Acquisition Sub (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of its
incorporation and (ii) has all requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its business as now
being conducted, to enter into this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. Purchaser has delivered to the Company true and complete copies of
the Charter and By-Laws of each of Purchaser and Acquisition Sub, in each case
as amended to the date hereof.







                   (b) Authority. The execution, delivery and performance by
Purchaser of this Agreement and the Escrow Agreement and the execution,
delivery and performance of this Agreement and the Articles of Merger by
Acquisition Sub, and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on the
part of Purchaser and Acquisition Sub, respectively. This Agreement and the
Escrow Agreement are valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms; and this Agreement
and the Articles of Merger are the valid and binding obligations of Acquisition
Sub, subject to applicable bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights and remedies generally from time to
time in effect and to general equitable principles. Neither the execution,
delivery and performance by Purchaser of this Agreement and the Escrow
Agreement, the execution, delivery and performance of this Agreement and the
Articles of Merger by Acquisition Sub, nor the consummation of the transactions
contemplated hereby or thereby, will (A) conflict with, (B) result in any
violations of, (C) cause a default under (with or without due notice, lapse of
time or both), (D) give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under, (E) result in the creation of any Encumbrance on or
against any assets, rights or property of Purchaser or Acquisition Sub, as the
case may be, under any term, condition or provision of (x) any instrument or
agreement to which Purchaser or Acquisition Sub is a party, or by which
Purchaser or Acquisition Sub any of its respective properties, assets or rights
may be bound, (y) any law, statute, rule, regulation, order, writ, injunction,
decree, permit, concession, license or franchise of any Governmental Authority
applicable to Purchaser or Acquisition Sub any of its respective properties,
assets or rights or (z) Purchaser's Charter or By-Laws, as amended through the
date hereof, respectively, which conflict, breach, default, violation or other
event would prevent the consummation of the transactions contemplated by this
Agreement, the Escrow Agreement. Except as contemplated by this Agreement, no
permit, authorization, consent or approval of or by, or any notification of or
filing with, any Governmental Authority or other person is required in
connection with the execution, delivery and performance by Purchaser of this
Agreement or the Escrow Agreement or the execution, delivery and performance by
Acquisition Sub of this Agreement and the Articles of Merger or the
consummation of the transactions contemplated hereby or thereby, except for (i)
the filing with the SEC of such reports and information under the Securities
Act, and the rules and regulations promulgated by the SEC thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby, (ii) the filing of such documents with, and the obtaining of such
orders from, various state securities and blue-sky authorities as are required
in connection with the transactions contemplated hereby, (iii) the filing of
the Articles of Merger with the Commissioner and (iv) such other 




consents, waivers, authorizations, filings, approvals and registrations which
if not obtained or made would not have a Material Adverse Effect on Purchaser
or materially impair the ability of Purchaser to consummate the transactions
contemplated by this Agreement, including, without limitation, the Merger.

                   (C)     Capital Stock.

          (i) The authorized capital stock of Purchaser consists of 25,000,000
     shares of Purchaser Common Stock and 15,000,000 shares of Preferred Stock,
     $.0005 par value (the "Preferred Stock"), of which 1,000,000 shares have
     been designated as Series A Preferred Stock, $.0005 par value (the "Series
     A Preferred Stock"), 5,669,846 shares have been designated as Series B
     Preferred Stock, $.0005 par value (the "Series B Preferred Stock") and
     300,000 shares have been designated as Series B-1 Preferred Stock, $.0005
     par value (the "Series B-1 Preferred Stock"). On the date hereof, (i)
     3,475,005 shares of Common Stock are issued and outstanding, (ii) 
     1,000,000 shares of Series A Preferred Stock are issued and outstanding,
     (iii) 4,477,746 shares of Series B Preferred Stock are issued and
     outstanding, (iv) 300,000 shares of Series B-1 Preferred Stock are issued
     and outstanding, (v) 300,000 shares of Series B Preferred Stock are
     reserved for issuance upon conversion of shares of Series B-1 Preferred
     Stock, (vi) 120,000 shares of Series B Preferred Stock are reserved for
     issuance in accordance with a Series B Preferred Stock Purchase Agreement
     dated as of May 6, 1996, among Purchaser and the other parties thereto,
     (vii) 852,100 shares (the "Warrant Shares") of Series B Preferred Stock
     are reserved for issuance upon exercise or exchange of (A) the stock
     subscription warrants dated September 19, 1995 issued to and held by AOL
     and (B) the stock subscription warrants dated May 6, 1996 issued to and
     held by AOL, (viii) 1,000,000 shares of Common Stock are reserved for
     conversion of shares of Series A Preferred Stock, (ix) 4,897,746 shares of
     Common Stock are reserved for conversion of Series B Preferred Stock and
     Series B-1 Preferred Stock, (ix) 852,100 shares of Common Stock are
     reserved for conversion of the Warrant Shares and (x) 1,550,000 shares of
     Common Stock are reserved for future issuance upon exercise of options or
     as restricted stock granted to employees of Purchaser. All outstanding
     shares of Purchaser Common Stock are validly issued, fully paid and
     non-assessable and not subject to preemptive rights. Purchaser has duly
     authorized and reserved for issuance the Merger Shares, and, when issued
     in accordance with the terms of Article II, the Merger Shares will be
     validly issued, fully paid and nonassessable and free of preemptive
     rights. Purchaser directly owns all the outstanding shares of capital
     stock of Acquisition Sub, and all of such shares are validly issued, fully
     paid and nonassessable and not subject to preemptive rights.



          (ii) Except as set forth in paragraph (i) above and on the Purchaser
     Disclosure Schedule, immediately after the Closing, there are no
     outstanding (A) securities convertible into or exchangeable for shares of
     capital stock or other securities of the Company, (B) options, warrants,
     or other rights to purchase or otherwise acquire from the Company shares
     of such capital stock, or securities convertible into or exchangeable for
     shares of such capital stock, or (iii) contracts, agreements or
     commitments relating to the issuance by the Company of any shares of such
     capital stock, any such convertible or exchangeable securities, or any
     such options, warrants or other rights. on the date hereof and in
     accordance with the Certificate of Incorporation of Purchaser, as amended
     and in effect on the date hereof, each one share of Preferred Stock is
     convertible into one share of Common Stock.

                   (d) Litigation, Except as set forth in the Purchaser
Disclosure Schedule, there are no (i) Actions pending, or to the best knowledge
of the Purchaser, threatened against the Purchaser, whether at law or in
equity, or before or by any Governmental Authority or (ii) judgments, decrees,
injunctions or orders of any Governmental Authority or arbitrator against the
Purchaser. There are no Actions pending or, to the best knowledge of the
Purchaser, threatened, nor, to the best knowledge of the Purchaser, any basis
therefor, with respect to (A) the current employment by, or association with,
the Purchaser, of any of the present officers or employees of or consultants to
the Purchaser (collectively, the "Purchaser Designated Persons"), or (B) the
use, in connection with any business presently conducted or proposed to be
conducted by the Purchaser, of any information, techniques or processes
presently utilized or proposed to be utilized by the Purchaser or any of the
Purchaser Designated Persons, that the Purchaser, the Purchaser Designated
Persons are or would be prohibited from using as the result of a violation or
breach of, or conflict with any agreements or arrangements between any
Purchaser Designated Person and any other person, or any legal considerations
applicable to unfair competition, trade secrets or confidential or proprietary
information or (C) the validity, ownership or right to use, sell, license or
dispose of, under any material Purchaser intellectual property. The Purchaser
has delivered to the Company all material documents and correspondence relating
to such matters referred to in the Purchaser Disclosure Schedule.

                   (e) Brokers. Neither Purchaser nor any of its officers,
directors or employees have employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection
with the transactions contemplated hereby.

                   (f) Offering Memorandum. To the knowledge of the Purchaser,
the factual statements (exclusive of any opinions, projections or expectations
expressed therein) in the business description set forth in the Purchaser's
offering Memorandum (a 




copy which was provided to the Company), dated as of January 10, 1997
("Offering Memorandum"), and which was prepared in connection with the
Financing, did not contain any misrepresentation of a material fact at the date
thereof and did not omit to make any statement, the omission of which would
otherwise make the factual statements made therein misleading at the date
thereof in light of the circumstances in which they were made. Notwithstanding
anything herein to the contrary, the Purchaser makes no representation or
warranty whatsoever as to any information in the offering Memorandum with
respect to the Company, the Company Principals and/or AOL.

                                   ARTICLE IV


                         CONDUCT AND TRANSACTIONS PRIOR
                    TO EFFECTIVE TIME; ADDITIONAL AGREEMENTS


                  4.1. Access to Records and Properties of Each Party; 
Confidentiality.

                   (a) Access to the Company. From and after the date hereof
until the Effective Time or the earlier termination of this Agreement pursuant
to Section 8.1 hereof (the "Executory Period"), the Company shall afford: (i) to
the officers, independent certified public accountants, counsel and other
representatives of the Purchaser, free and full access at all reasonable times
to all properties, books and records (including tax returns filed and those in
preparation) of the Company, in order that the Purchaser and such other persons
may have full opportunity to make such investigations as they shall reasonably
desire to make of the business and affairs of the Company; and (ii) to the
independent certified public accountants of the Company, free and full access
at all reasonable times to the work papers of the independent certified public
accountants for the Company. Additionally, the Company will permit the
Purchaser to make such reasonable inspections of the Company and its operations
during normal business hours as the Purchaser may reasonably require and the
Company will cause its officers to furnish to the Purchaser and such other
persons, such additional financial and operating data and other information as
to the business and properties of the Company as the Purchaser or such other
persons shall from time to time reasonably request. No investigation pursuant
to this Section 4.1(a), or made prior to the date hereof, shall affect or
otherwise diminish or obviate in any respect any of the representations and
warranties of the Company.

                   (b) Access to the Purchaser. The Purchaser will make
available to the Company on a confidential basis (i) the Offering Memorandum and
(ii) access to its senior personnel and pertinent books and records so long as
such access is reasonable in light of the due diligence the Purchaser will be
preparing in connection with the Financing. No investigation pursuant to this
Section 4.1(b),or made prior to the date hereof, shall affect or 




otherwise diminish or obviate in any respect any of the representations and
warranties of the Purchaser.

                  4.2. Operation of Business of the Company. During the
Executory Period, the Company will operate its business as now operated and
only in the normal and ordinary course and, consistent with such operation,
will use its best efforts to preserve intact its present business organization,
to keep available the services of its officers and employees and to maintain
satisfactory relationships with licensors, franchisees, licensees, suppliers,
contractors, distributors, customers and other persons having business dealings
with it. Without limiting the generality of the foregoing, during the Executory
Period, the Company shall not, without the prior written consent of Purchaser,
(a) take any action that would result in any of the representations and
warranties of the Company herein becoming untrue or in any of the conditions to
the Merger not being satisfied, or (b) take or cause to occur any of the
actions or transactions described in Section 3.1(g) hereof. The parties hereto
will, during the Executory Period, jointly consider the extent to which the
Information Provider Agreement dated as of March 31, 1995 (the "Company IPA")
between the Company and AOL should be amended, modified or otherwise revised,
as appropriate in order to reflect the transactions contemplated herein and
the mutual intent of the parties.

                   4.3. Negotiations With Others.

                   (a) Company Negotiations. During the Executory Period
neither the Company, any Company Principal or AOL shall, nor shall the Company
authorize any of its employees, officers, directors, shareholders or agents to,
directly or indirectly, solicit, initiate or engage in discussions or
negotiations with, or provide any information to, or take any other action to
facilitate the efforts of, any third party with respect to a financing of or
investment in the Company (including by way of the purchase of any capital
stock or other securities from the Company or any securityholder of the 
Company) or the acquisition of the Company (including by way of merger, purchase
of capital stock or purchase of assets), or that would otherwise be inconsistent
with the terms of this Agreement, or that would prohibit the performance of the
Company's obligations hereunder or that could be expected to diminish the
likelihood of or render impracticable the consummation of the transactions
contemplated hereby (each as described above) (other than the Merger and the
hereby (each as described above (other than the Merger and the transactions
contemplated herein), an "Acquisition Transaction")), or enter into any
agreement or arrangement with respect to, or authorize or consummate, an
Acquisition Transaction. If the Company or any of its Subsidiaries or any
Company Principal, or AOL or any employee, officer, director, shareholder or
agent of the Company receives an unsolicited offer or proposal to enter
negotiations relating to any of the above, such party shall immediately notify
the Purchaser of such offer or proposal and shall not entertain any such offer
and shall communicate its unwillingness to entertain such offer to such 




offering party. Upon the execution and delivery of this Agreement, the Company,
the Company Principals and AOL, shall terminate any and all discussions, if any,
it or they may be having with respect to an Acquisition Transaction. Neither the
Company, any of the Company Principals or AOL shall, nor shall the Company
authorize any of its employees, officers, directors, shareholders or agents to,
directly or indirectly, negotiate or discuss with any person or entity that
provides or proposes to provide online services, the provision of financing to
the Company by such person or entity or any merger, consolidation, business
combination or similar transaction with any such person or entity, directly or
indirectly.

                   (b) Purchaser Negotiations. During the Executory Period, 
the Purchaser will not, without the prior consent of the Company (such consent
not to be unreasonably withheld), actively solicit or negotiate with any third
party whose business includes the provision of health specific content on the
Internet with a view to the acquisition thereof unless such business is a niche
component of the Purchaser's "Vices and Virtues" product. In the event the
Purchaser enters into serious and detailed negotiations with any unaffiliated
third party with respect to a proposed transaction involving the acquisition of
the Purchaser (by way of merger, sale of all outstanding capital stock or sale
of all or substantially all of the assets of the Purchase) the Purchaser will,
to the extent it is permitted to do so (provided that the Purchaser will use
best efforts to attain such permission), notify the Company Principals of the
fact of such negotiations (all information with respect to which shall be
maintained by the Company Principals and by the Company as strictly
confidential) and will give the Company a reasonable opportunity (but in no
event in excess of 10 days from the date of such notice) to terminate this
Agreement in its entirety, provided that in the event of any such termination
by the Company, the Company will not, pursuant to the terms of the LOI Escrow
Agreement, be entitled to retain any part of the monies deposited with the LOI
Escrow Agent (the "LOI Deposit"). Furthermore, in the event of any such
negotiations, the Purchaser will similarly have the right to terminate this
Agreement in its entirety, provided that in the event of any such termination
by the Purchaser, the Company will be entitled to retain the LOI Deposit.

                   4.4 Advice of Changes. The Company shall confer on a regular
and frequent basis with Purchaser, report on operational matters and promptly
advise Purchaser orally and in writing of any change, event or circumstance
having, or which could have, a Material Adverse Effect on the Company or which
could impair (negatively or positively) its financial projections, forecasts
or prospects.




                  4.5. Company Financial Information Update. During the 
Executory Period, the Company shall:

                  (a) prepare and deliver to the Purchaser, within ten (10)
business days after the end of each calendar month during the Executory Period,
(i) its unaudited balance sheet as at the end of such calendar month and the
related statements of income, cash flow and shareholders' equity for the period
then ended, which shall be (A) in accordance with the books and records of the
Company and (B) fairly present the financial condition of the Company as at the
respective dates indicated and the results of operations of the Company for the
respective periods indicated, and (ii) updated financial projections and
forecasts for the Company;

                   (b) prepare and deliver on a weekly basis, a summary of the
material developments (if any) in the business or prospects of the Company
occurring during such period; and

                   (c) furnish upon request of the Purchaser, such other
financial information as is available to management of the Company.

                  4.6. Purchaser Financial Information Update. During the
Executory Period, the Purchaser shall prepare and deliver to the Company,
within ten (10) business days after the end of each calendar month during the
Executory Period, its unaudited balance sheet as at the end of such calendar
month and the related statements of income, cash flow and shareholders' equity
for the period then ended, which shall be (A) in accordance with the books and
records of the Purchaser, (B) fairly present the financial condition of the
Purchaser as at the respective dates indicated and the results of operations of
the Purchaser for the respective periods indicated, and (C) have been prepared
in accordance with GAAP, except for the absence of complete footnote disclosure
as required by GAAP and subject to changes resulting from normal year-end audit
adjustments, which adjustments shall not in any event result in a material
adverse change to any item of revenue or expense.

                  4.7. Legal Conditions to Merger. Each Party hereto shall take
all reasonable actions necessary to comply promptly with all legal requirements
that may be imposed on such Party with respect to the Merger and will take all
reasonable action necessary to cooperate with and furnish information to the
other Party in connection with any such requirements imposed upon such other
Party in connection with the Merger. Each Party hereto shall take all
reasonable actions necessary (a) to obtain (and will take all reasonable
actions necessary to promptly cooperate with the other Party (in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Authority, or other third Party, required to be obtained or made
by such Party (or by the other Parties) in connection with the Merger or the
taking of any action contemplated by this Agreement, (b) to defend, lift,
rescind or mitigate the effect of 




any lawsuit, order, injunction or other action adversely affecting the ability
of such Party to consummate the transactions contemplated hereby and (b) to
fulfill all conditions precedent applicable to such Party pursuant to this
Agreement. As used herein, the term "Party" shall mean and refer to the
Company, on the one hand, and Purchaser and Acquisition Sub, on the other hand.

                  4.8. Consents. Each Party hereto shall use its best efforts,
and the other Parties shall cooperate with such efforts, to obtain any consents
and approvals of, or effect the notification of or filing with, each person or
authority, whether private or governmental, whose consent or approval is
required in order to permit the consummation of the Merger and the transactions
contemplated hereby and to enable the Surviving Corporation to conduct and
operate the business of the Company substantially as presently conducted and as
proposed to be conducted.

                  4.9. Efforts to Consummate. Subject to the terms and
conditions herein provided, the parties hereto shall use their best efforts to
do or cause to be done all such acts and things as may be necessary, proper or
advisable, consistent with all applicable laws and regulations, to consummate
and make effective the transactions contemplated hereby and to satisfy or cause
to be satisfied all conditions precedent that are set forth in Article V as
soon as reasonably practicable.

                  4.10. Notice of Prospective Breach. Each Party hereto shall
immediately notify the other parties in writing upon the occurrence of any act,
event, circumstance or thing that is reasonably likely to cause or result in a
representation or warranty hereunder to be untrue at the Closing, the failure
of a closing condition to be achieved at the Closing, or any other breach or
violation hereof or default hereunder.

                  4.11. Public Announcements. The parties hereto agree that,
except with respect to any Purchaser disclosure in connection with the
Financing, they shall obtain each others' consent prior to the issuance (and
provide copies to the other party prior to issuance) of any public
announcements, reports, statements or releases pertaining to the Merger, this
Agreement or any of the transactions contemplated herein, provided that the
parties shall not disclose (other than any Purchaser disclosure in connection
with the Financing) the consideration payable in connection with the Merger in
any such public announcements.

                  4.12. No Transfers. During the Executory Period, the Company,
any of the Company Principals and AOL shall not sell, transfer (except in the
case of AOL, any transfer necessary to effect the transactions contemplated by
Section 2.2(a) hereof), assign, pledge, encumber or otherwise dispose of any of
the Company Common Stock or any other Equity Security (including in the case of
AOL, the AOL Warrant, the AOL Note and the Company 




Preferred Stock) other than in connection with and pursuant to the transactions
contemplated by this Agreement and the Merger.

                  4.13. Confidentiality. The parties understand and agree that
to the extent not otherwise provided herein, Section 5(e) of that certain
Letter of Intent dated December 5, 1996, among the Purchaser, the Company and
Silveous shall survive the execution of this Agreement and shall govern during
the Executory Period.

                                   ARTICLE V


                              CONDITIONS PRECEDENT


                  5.1. Conditions to Each Party's Obligations. The obligations
of each Party to perform this Agreement and to effect the Merger are subject to
the satisfaction of the following conditions unless waived (to the extent such
conditions can be waived) by all parties hereto:

                   (a) Shareholder Approval; Articles of Merger. This Agreement
and the Merger shall have been duly and validly approved and adopted by
Shareholder and AOL in accordance with the Virginia Statute and the Company's
Charter and By-Laws, and the Articles of Merger shall have been executed and
delivered by Acquisition Sub and the Company and filed with and accepted by the
Secretary of State of the State of Virginia.

                   (b) Approvals. All authorizations, consents, orders or
approvals of, or declarations or filings with or expiration of waiting periods
imposed by any Governmental Authority necessary for the consummation of the
transactions contemplated hereby shall have been obtained or made or shall have
occurred.

                   (c) Legal Action. No temporary restraining order,
preliminary injunction or permanent injunction or other order preventing the
consummation of the Merger shall have been issued by any Federal or state court
or other Governmental Authority and remain in effect.

                  (d) Legislation. No Federal, state, local or foreign statute,
rule or regulation shall have been enacted which prohibits, restricts or delays
the consummation of the transactions contemplated by this Agreement or any of
the conditions to the consummation of such transactions.

                   (e) Consummation of the Financing. On or before the Closing,
the Purchaser will have successfully completed a private placement of at least
$12,000,000 aggregate amount of its equity securities (the "Financing").

                  5.2. Conditions to Obligations of Purchaser and Acquisition
Sub. The obligations of Purchaser to perform this Agreement and of Acquisition
Sub to perform this Agreement and the Articles of Merger are subject to the
satisfaction of the 




following conditions unless waived (to the extent such conditions can be
waived) by Purchaser and Acquisition Sub:

                  (a) Representations and Warranties of the Company, the
Shareholder, Douma and AOL. The representations and warranties of the Company,
the Shareholder, Douma and AOL shall be true and correct in all material
respects (except for any representation or warranty that by its terms is
qualified by materiality, in which case it shall be true and correct in all
respects) as of the date of this Agreement and as of the Closing Date, as
though made at and as of such dates, respectively, and Purchaser and
Acquisition Sub shall have received a certificate signed by the Chairman, Chief
Executive Officer and the President of the Company to that effect.

                  (b) Performance of Obligations of the Company. The Company
shall have performed in all material respects the obligations required to be
performed by it under this Agreement prior to or as of the Closing Date, and
Purchaser and Acquisition Sub shall have received a certificate signed by the
Chief Executive Officer of the Company to that effect.

                   (c) Authorization of Merger. All action necessary to 
authorize the execution, delivery and performance of this Agreement, the
Articles of Merger and the other documents to be executed and delivered by the
Company in connection with the Merger and the consummation of the Merger and the
other transactions contemplated hereby and thereby shall have been duly and
validly taken by the Board of Directors of the Company, and the Company and the
Shareholder shall have full power and right to effect the Merger on the terms
provided herein.

                   (d) Opinion of the Company's Counsel. Purchaser and
Acquisition Sub shall have received an opinion dated as of the Closing Date of
Shaw Pittman Potts & Trowbridge ("SPPT") in a form reasonably acceptable to
the Purchaser and its counsel.

                   (e) Consents and Approvals. Purchaser and Acquisition Sub
shall have received duly executed copies of all consents and approvals
contemplated by this Agreement or the Company Disclosure Schedule, in form and
substance satisfactory to Purchaser and Acquisition Sub, which such consents
shall include, but not be limited to, the consent of (i) the National Library
of Medicine pursuant to its agreement with the Company dated March 10, 1995 and
(ii) the Company's current commercial landlord pursuant to the Company's office
lease dated June 30, 1995. Furthermore, the Company shall have provided the
Purchaser written evidence satisfactory to the Purchaser of the termination of
the Company's services contract with Hill and Knowlton.

                   (f) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are required for or in connection with the
execution and delivery by the Company of this Agreement and the consummation by
the Company of 






the transactions contemplated hereby shall have been obtained or made.

                     (g) Payment of Company Expenses. The Company shall have
   delivered to Purchaser and Acquisition Sub a true, correct and complete
   schedule (the "Schedule of Expenses") of all Company Expenses paid or
   incurred by or on behalf of the Company, the Shareholder or AOL through the
   Closing Date, and Purchaser and Acquisition Sub shall have received a
   certificate signed by the Chief Executive Officer of the Company certifying
   the accuracy and completeness thereof.

                     (h) Company Expenses Release. Purchaser, Acquisition Sub
   and the Surviving Corporation shall have received from each third Party
   identified on the Schedule of Expenses a written instrument in form and
   substance reasonably satisfactory to Purchaser, Acquisition Sub and the
   Surviving Corporation, (i) acknowledging receipt by each such Party of full
   payment of all fees and expenses of such Party constituting Company Expenses
   and (ii) releasing Purchaser, Acquisition Sub, the Surviving Corporation and
   their Affiliates from any liabilities or obligations in respect of the
   payment of any fees and expenses.

                     (i) Absence of Material Adverse Change. There shall not
   have been any Material Adverse Change as to the Company since the date
   hereof.

                     (j) Resignation of Directors. The directors of the Company
   immediately prior to the Effective Time shall have resigned as directors of
   the Surviving Corporation effective as of the Effective Time.

                     (k) Escrow Agreement. The Shareholder and the Escrow Agent
   shall have executed and delivered an Escrow Agreement in a form mutually
   acceptable to the Purchaser, the Shareholder and the Escrow Agent, securing
   the indemnification obligations of the Shareholder pursuant to Article VII
   hereof.

                   (l) AOL Instruments. AOL and the Company shall have
effectuated the transactions contemplated in Section 2.2(a). The Purchaser
shall have received evidence satisfactory to the Purchaser of the termination,
cancellation and/or surrender of each of (i) the Note and Warrant Purchase
Agreement dated March 31, 1995, among AOL, the Company, the Shareholder and
Douma, (ii) the Note dated April 3, 1995, of the Company to AOL in the
principal amount of $270,000, (iii) the Stock Purchase Warrant dated March 31,
1995 issued by the Company to AOL, (iv) the Security Agreement dated March 31,
1995 (the "AOL Security Agreement") by and between the Company and AOL. The
Purchaser shall also have received evidence satisfactory to it of the
termination of the employee agreement among the Company, the Shareholder and
AOL and the termination of the employee agreement among the Company, Douma and
AOL. Furthermore, the Purchaser shall have received evidence satisfactory to it
that any and all security interests filed against the Company and/or any of its




assets in connection with or pursuant to the AOL Security Agreement shall have
been fully released and terminated.

                  (m) Board Election. The Shareholder shall have been elected
to the Board of Directors of the Purchaser.

                  (n) Stockholders' Agreement. The Shareholder and the
Purchaser shall have, pursuant to an amendment in a form mutually acceptable to
the Purchaser and the Shareholder, become parties to the Amended and Restated
Stockholders' Agreement among the Purchaser and the investors named therein
(the "Stockholders' Agreement"), as the same may be amended, restated or
modified in connection with the Financing.

                   (o) Employment Agreements. Each of the Purchaser and the
Shareholder shall have executed and delivered the employment agreement
substantially in the form of Exhibit D-1 hereto (the "Silveous Employment
Agreement") and each of the Purchaser and Douma shall have executed and
delivered the employment agreement substantially in the form of Exhibit D-2
hereto (the "Douma Employment Agreement").

                  (p) Non-Disclosure Agreements. Each of the employees of the
Company (other than the Shareholder and Douma) in their prospective capacity as
an employee of Purchaser effective immediately upon the Closing, shall have
executed and delivered an agreement with Purchaser, effective as of the
Effective Time, in the form of Exhibit Z attached hereto (the "Non-Disclosure
Agreements," each a "Non-Disclosure Agreement"), providing for, among other
things, non-disclosure of confidential information, assignment of proprietary
rights and restrictions upon such person from competing with the Surviving
Corporation and Purchaser as provided therein.

                  5.3. Conditions to obligations of the Company. The
obligations of the Company, the Shareholder and AOL to perform this Agreement
and the Articles of Merger are subject to the satisfaction of the following
conditions unless waived (to the extent such conditions can be waived) by the
Company:

                   (a) Representations and Warranties of Purchaser. The
representations and warranties of Purchaser and Acquisition Sub set forth in
Section 3.3 hereof shall be true and correct in all material respects (except
for any representation or warranty that by its terms is qualified by
materiality, in which case it shall be true and correct in all respects) as of
the date of this Agreement and as of the Closing Date as though made at and as
of such dates, respectively, and the Company shall have received a certificate
signed by the Chief Financial Officer of each of Purchaser and Acquisition Sub
to that effect.

                   (b) Performance of Obligations of Purchaser and Acquisition
Sub. Purchaser and Acquisition Sub shall have performed in all material
respects their respective obligations required to be performed by them under
this Agreement and the



Articles of Merger prior to or as of the Closing Date and the Company shall have
received a certificate signed by the Chief Financial Officer of each of
Purchaser and Acquisition Sub to that effect.

                   (c) Authorization of Merger. All action necessary to 
authorize the execution, delivery and performance of this Agreement by
Purchaser, the execution, delivery and performance of this Agreement and the
Articles of Merger by Acquisition Sub, and the consummation of the transactions
contemplated hereby and by the Articles of Merger shall have been duly and
validly taken by Purchaser and Acquisition Sub and by Purchaser as the sole
shareholder of Acquisition Sub.

                   (d) Opinions of Counsel to Purchaser and Acquisition Sub.
The Company shall have received an opinion dated as of the Closing Date of
O'Sullivan Graev & Karabell, LLP ("OGK"), in a form reasonably acceptable to
the Company and its counsel.

                   (e) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are required for or in connection with the
execution and delivery by Purchaser and Acquisition Sub of this Agreement and
the Articles of Merger and the consummation by Purchaser and Acquisition Sub of
the transactions contemplated hereby or thereby shall have been obtained or
made.

                   (f) Option Agreements. Purchaser shall have executed and
delivered an option agreement with each of the Shareholder and Douma (each, an
"Option Agreement" and collectively, the "Option Agreements"), substantially
in the form of Exhibit G-1 and Exhibit G-2 hereto, effective as of the
Effective Time, providing for the grant of options for Purchaser Common Stock
to each of the Shareholder and Douma.

                   (g) Stockholders' Agreement. The Purchaser shall have
executed and delivered the amendment to the Stockholders' Agreement in a form
mutually acceptable to the Purchaser and the Shareholder.

                   (h) Employment Agreements. The Purchaser shall have executed
and delivered the Silveous Employment Agreement and the Douma Employment
Agreement to the respective Company Principals.

                   (i) The Company Principals shall have received a letter
reasonably satisfactory to them from the then Chief Executive Officer of the
Purchaser with respect to the matters set forth in Paragraphs 3(a)(v), (vi) and
(vii) of the LOI.




                                   ARTICLE VI


                             ADDITIONAL AGREEMENTS


                  6.1. Compliance With the Code. The parties shall comply with
Section 1060(e) of the Code and any regulations promulgated thereunder, as
applicable.

6.2.       Restriction on Transfer.

                   (a) The Merger Shares to be issued at the Effective Time
pursuant to the Merger and any shares of capital stock or other securities
received with respect thereto (collectively, the "Restricted Securities") shall
not be sold, transferred, assigned, pledged, encumbered or otherwise disposed
of (each, a "Transfer") except upon the conditions specified in this Section
6.2, which conditions are intended to insure compliance with the provisions of
the Securities Act. Each of the Shareholder and AOL shall observe and comply
with the Securities Act and the rules and regulations promulgated by the SEC
thereunder as now in effect or hereafter enacted or promulgated, and as from
time to time amended, in connection with any Transfer of Restricted Securities
beneficially owned by them.

                   (b) Each certificate representing Restricted Securities
issued to the Shareholder and each certificate for such securities issued to
subsequent transferees of any such certificate shall (unless otherwise
permitted by the provisions of Sections 6.2(c) and 6.2(d) hereof) be stamped or
otherwise imprinted with a legend in substantially the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES OR "BLUE-SKY"
         LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
         PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
         REGISTRATION OR AN EXEMPTION THEREFROM. ADDITIONALLY, THE TRANSFER OF
         THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN SECTION 6.2
         OF TEE AGREEMENT AND PLAN OF REORGANIZATION DATED AS OF JANUARY 31,
         1997 AMONG iVILLAGE, INC., HRS ACQUISITION CORPORATION, HEALTH
         RESPONSEABILITY SYSTEMS, INC. AND THE OTHER SIGNATORIES THERETO AND NO
         TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH
         CONDITIONS HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF CERTAIN OF
         SUCH CONDITIONS, iVILLAGE, INC. HAS AGREED TO DELIVER TO THE HOLDER
         HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE SECURITIES
         REPRESENTED HEREBY REGISTERED IN THE NAME OF THE HOLDER HEREOF. COPIES
         OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE
         BY THE 




         HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF iVILLAGE, 
         INC."

                  (c) The Shareholder agrees, prior to any Transfer of
Restricted Securities, to give written notice to Purchaser of her intention to
effect such Transfer and to comply in all other respects with the provisions of
this Section 6.2. Each such notice shall describe the manner and circumstances
of the proposed Transfer and shall be accompanied by the written opinion,
addressed to Purchaser, of counsel for the holder of such Restricted
Securities, stating that in the opinion of such counsel (which opinion and
counsel shall be reasonably satisfactory to Purchaser) such proposed transfer
does not involve a transaction requiring registration or qualification of such
Restricted Securities under the Securities Act or the securities or "blue-sky"
laws of any relevant state of the United States; provided, however, that no
such opinion of counsel shall be necessary for a Transfer pursuant to Rule 144.
The holder thereof shall thereupon, with the written consent of Purchaser, be
entitled to Transfer such Restricted Securities in accordance with the terms of
the notice delivered by it to Purchaser. Each certificate or other instrument
evidencing the securities issued upon the Transfer of any such Restricted
Securities (and each certificate or other instrument evidencing any
untransferred balance of such Restricted Securities) shall bear the legend set
forth in Section 6.2(b) unless (x) in such opinion of counsel of Purchaser
registration of any future Transfer is not required by the applicable
provisions of the Securities Act or (y) Purchaser shall have waived the
requirement of such legends. The Shareholder shall not Transfer any Restricted
Securities until such opinion of counsel has been given (unless waived by
Purchaser or unless such opinion is not required in accordance with the
provisions of this Section 6.2(c)).

                   (d) Notwithstanding the foregoing provisions of this Section
6.2, the restrictions imposed by this Section 6.2 upon the transferability of
Restricted Securities shall cease and terminate when (i) any such shares are 
sold or otherwise disposed of pursuant to an effective registration statement
under the Securities Act or as otherwise contemplated by Section 6.2(c) and,
pursuant to Section 6.2(c), the securities so transferred are not required to
bear the legend set forth in Section 6.2(c) or (ii) the holder of such
Restricted Securities has met the requirements for Transfer of such Restricted
Securities pursuant to subparagraph (k) of Rule 144. Whenever the restrictions
imposed by this Section 6.2 shall terminate, as herein provided, the holder of
Restricted Securities as to which such restrictions have terminated shall be
entitled to receive from Purchaser, without expense, a new certificate not
bearing the restrictive legend set forth in Section 6.2(b) and not containing
any other reference to the restrictions imposed by this Section 6.2.

                   (e) The Shareholder understands and agrees that Purchaser,
at its discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to certificates




for Restricted Securities owned by such Securityholder but not as to
certificates for such shares of Purchaser Common Stock as to which the legend
set forth in paragraph (b) of this Section 6.2 is no longer required because one
or more of the conditions set forth in Section 6.2(d) shall have been satisfied.

                   6.3. Piggyback Registration.

                   (a) As used in this Section 6.3, the following terms shall
have the following meanings:

                          (i) "Other Shares" shall mean at any time those
          shares of Purchaser Common Stock that do not constitute Primary
          Shares, Registrable Shares or Registrable Founders Shares.

                          (ii) "Primary Shares" shall mean at any time the
          authorized but unissued shares of Purchaser Common Stock or shares of
          Purchaser Common Stock held in treasury.

                          (iii) "Registrable Founder's Shares" shall have the
          meaning as set forth in that certain Amended and Restated
          Registration Rights Agreement dated as of May 6, 1996 among the
          Purchaser and the stockholders identified therein.

                          (iv) "Registrable Shares" shall mean the shares of
          Purchaser Common Stock that constitute Restricted Securities that are
          held by the Shareholder and that have not theretofore been sold to
          the public pursuant to a registration statement under the Securities
          Act or pursuant to Rule 144.

                          (v) "Rule 144" shall mean Rule 144 promulgated under
          the Securities Act, as amended from time to time, or any successor or
          complementary provision thereto.

                   (b) Subject to the provisions set forth below and to the
last sentence of this Section 6.3(b),.if Purchaser at any time or times
following six months after an initial underwritten public offering of shares of
Purchaser Common Stock proposes for any reason to register Primary Shares under
the Securities Act (other than on Form S-4 or Form S-8 promulgated under the
Securities Act or any successor forms thereto), it shall promptly give written
notice to the Shareholder of its intention so to register such shares and, upon
the written request, given within 30 days after delivery of such notice by
Purchaser, of any Securityholder to include in such registration Registrable
Shares (which request shall specify the number of Registrable Shares proposed
to be included in such registration by the Shareholder), Purchaser shall use
its best efforts to cause all such Registrable Shares to be included in such
registration on the same terms and conditions as the securities otherwise being
sold in such registration; provided, however, that the rights granted to the
Shareholder hereunder shall be subject at all times to the contractual rights
of any third parties now or hereafter granted;




further provided, however, that if the managing underwriter in the good faith
exercise of its reasonable judgment advises Purchaser in writing that the
inclusion of all Registrable Shares proposed to be included in such
registration would interfere with the successful marketing (including pricing)
of Primary Shares or Other Shares proposed to be registered by Purchaser, then
the number of Primary Shares, Registrable Shares and Other Shares proposed to
be included in such registration shall be included in the following order:

                          (i) first, the Primary Shares and Other Shares; and

                          (ii) second, the Registrable Shares and the
          Registrable Founders Shares requested to be included in such
          registration, pro rata based upon the number of Registrable Shares
          and Registrable Founders Shares proposed to be included in such
          registration; provided that it is agreed that for purpose of this
          subsection 6.3 and the rights granted herein, the Registrable Shares
          shall be treated on a pari passu basis with and with respect to the
          Registrable Founders' Shares.

If any registration hereunder is to be underwritten, Purchaser and each holder
of Registrable Shares to be registered by such registration statement shall, as
a condition to participating in such registration, enter into an underwriting
agreement in customary form with a managing underwriter selected for such
underwriting by Purchaser. If any such holder elects not to include any or all
of its, his or her Registrable Shares in any registration statement filed by
the Purchaser, such holder shall nevertheless continue to have the right to
include any of its, his or her Registrable Shares in any subsequent
registration statement or registration statements as may be filed by the
Purchaser with respect to offerings of its securities, subject to the terms and
conditions set forth in this Section 6. Anything to the contrary contained
herein notwithstanding, Purchaser shall not be required to take any action to
effect any such registration, qualification or compliance pursuant to this
Section 6.3 after Purchaser has effected four (4) such requested registrations
pursuant to this Section 6.3 in which any such requesting holder has been given
the opportunity to "participate"; provide that for the purposes of this
sentence "participate" shall mean the registration of at least 50% of the
amount of Registrable Shares originally requested to be registered in each such
election pursuant to this subsection 6.3.

                   (c) In consideration for Purchaser agreeing to its
obligations under this Section 6.3, if Purchaser shall include Registrable
Shares in a registration pursuant to Section 6.3(b)) for the sale thereof to
the public, the Shareholder agrees, upon the request of the managing
underwriter of such registration, to enter into an agreement not to sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of, any Registrable Shares, other than those Registrable Shares




actually included in such registration pursuant to Section 6.3(b) and sold to
the public thereunder, without the prior written consent of the underwriters
which period shall not begin more than 10 days prior to the effectiveness of
the registration statement pursuant to which such public offering shall be made
and shall not last more than 180 days after the effective date of such
registration statement; provided, that the Shareholder shall be bound by this
provision only if, and to the extent, the executive officers of Purchaser
owning Purchaser Common Stock shall be bound by such a provision.

                  (d) In connection with any registration pursuant to this
Section 6.3, Purchaser shall in its sole discretion determine the terms and
conditions of such registration, including, without limitation, the timing
thereof; the scope of the offering contemplated thereby (i.e., whether the
offering shall be a combined primary offering and a secondary offering or
limited only to a secondary offering); the manner of distribution of
Registrable Shares; the period of effectiveness of registration for permissible
sales of Registrable Securities thereunder consistent with the plan of
distribution agreed upon by Purchaser and the Shareholder; and all other
material aspects of the registration and the registration process. In
connection therewith, Purchaser may require that any such registration be
underwritten, in which event the managing underwriter shall be selected by
Purchaser.

                  (e) In connection with any registration of any Registrable
Shares under the Securities Act pursuant to this Agreement, Purchaser shall
indemnify and hold harmless the Shareholder against any losses, claims, damages
or liabilities, joint or several (or actions in respect thereof), to which the
Shareholder may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the registration statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein or otherwise filed with the
Commission, any amendment or supplement thereto or any document incident to
registration or qualification of any Registrable Shares, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or, with respect to any prospectus, necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, or any violation by Purchaser of the Securities Act or state
securities or "blue-sky" laws applicable to Purchaser and relating to action or
inaction required of Purchaser in connection with such registration or
qualification under state securities or "blue-sky" laws; provided, however,
that Purchaser shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged 




omission made in said registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to Purchaser by the Shareholder with respect to
information regarding the Shareholder for use in the preparation thereof.

                          (ii) In connection with any registration of
          Registrable Shares under the Securities Act pursuant to this
          Agreement, the Shareholder shall indemnify and hold harmless (in the
          same manner and to the same extent as set forth in the preceding
          paragraph of this Section 6.3(d)) Purchaser, each director of
          Purchaser, each officer of Purchaser who shall sign such registration
          statement, each underwriter, broker or other person acting on behalf
          of Purchaser and each person who controls any of the foregoing
          persons within the meaning of the Securities Act with respect to any
          statement or omission from such registration statement, any
          preliminary prospectus or final prospectus contained therein or
          otherwise filed with the Commission, any amendment or supplement
          thereto or any document incident to registration or qualification of
          any Registrable Share, if such statement or omission was made in
          reliance upon and in conformity with written information furnished to
          Purchaser or such underwriter by the Shareholder for use in
          connection with the preparation of such registration statement,
          preliminary prospectus, final prospectus, amendment, supplement or
          document; provided that the maximum liability in respect of such
          indemnification shall be limited, in the case of the Shareholder, to
          an amount equal to the net proceeds received by the Shareholder from
          the sale of such Registrable Shares effected pursuant to such
          registration statement.

                   (f) The Shareholder shall furnish to Purchaser such written
information regarding the Shareholder as Purchaser shall reasonably deem
necessary in connection with any registration, qualification or compliance
contemplated by this Section 6.3.

                   (g) Anything to the contrary contained herein
notwithstanding, the rights of the holders of Registrable Shares and the
obligations of Purchaser under Section 6.3(b) hereof shall terminate and be of
no further force or effect (i) as to any holder of Registrable Shares, at such
time as all Registrable Shares held by such holder may be sold under Rule 144
during any three-month period and (ii) as to all holders of Registrable Shares,
on the third anniversary of the Effective Date.

                   (h) The Shareholder may not assign her rights under this
Section 6.3 to any purchaser or transferee of Restricted Securities without the
prior written consent of Purchaser; pr vided, however, that any such purchaser
or transferee shall, as a condition to the effectiveness of such assignment if
consented to by Purchaser, be required to execute a counterpart to this
Agreement agreeing to be treated as the Shareholder is 




treated hereunder solely for purposes of this Section 6.3, whereupon such
purchaser or transferee shall have the benefits of, and shall be subject to the
restrictions contained in, this Section 6.3.

                   (i) All expenses incurred by Purchaser in complying with
this Section 6.3, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the NASD), fees and
expenses of complying with securities and "blue-sky" laws, printing expenses
and fees and expenses of Purchaser's counsel and accountants, shall be borne by
Purchaser; provided, however, that all fees and expenses of counsel for the
holders of Registrable Shares or any of them and all underwriting discounts,
taxes and selling commissions applicable to the Registrable Shares, and any
expenses and fees that would not have been incurred by Purchaser but for
inclusion of Registrable Shares in such registration, shall not be borne by
Purchaser but shall be borne by the holders of Registrable Shares pro rata
based on the number of Registrable Shares so registered.

                  6.4. Disclosure of Information; Non-Competition. Each of the
Company Principals acknowledges and recognizes that the Subject Business has
been conducted or is currently planned to be conducted by the Company
throughout the world, and further acknowledges and recognizes the highly
competitive nature of the industry in which the Subject Business is involved
and that, accordingly, in consideration of the premises contained herein, the
consideration to be received hereunder and the direct and indirect benefits to
each of the Company Principals of the transactions contemplated hereby, and in
consideration of and as an inducement to Purchaser and Acquisition Sub to enter
into to this Agreement and to consummate the transactions contemplated hereby:

                   (a) From and after the Effective Time, neither of the
Company Principals shall use or disclose to any Person, except as required by
law or judicial process, any Confidential Information, for any reason or
purpose whatsoever, nor shall he or she make use of any of the Confidential
Information for his or her own purposes or for the benefit of any Person except
Purchaser and the Surviving Corporation. For purposes of this Agreement,
"Confidential Information" shall mean Intellectual Property Rights of the
Company, the Surviving Corporation or Purchaser or its Affiliates and all
information of a proprietary nature relating to the Company and/or its business
or operations, the Surviving Corporation or Purchaser or its Affiliates or the
Subject Business (other than information that is in the public domain at the
time of receipt thereof by the Company Principals, or otherwise becomes public
other than as a result of the breach by either of the Company Principals of his
or her agreement hereunder or is rightfully received from a third party without
any obligation of confidentiality to Purchaser or the Company or is
independently developed by either of the Company Principals). As used herein,
the term "Subject Business" means and includes any business located anywhere in
the world that develops or




produces any internet channel the content Of which is similar to any internet
channel produced or under active development by the Company.

                  (b) Neither of the Company Principals shall, during the
two-year period beginning at the Effective Time, (i) directly or indirectly
engage, whether such engagement shall be as an officer, director, partner,
shareholder, Affiliate or other participant, in any business that competes with
the Subject Business (a "Competitive Business") or represent in any way any
Competitive Business, whether such engagement or representation shall be for
profit or not (provided, that nothing contained herein shall prevent either of
the Company Principals from holding up to 2% of the outstanding voting capital
stock of any company), (ii) interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between Purchaser and the Company and
the Surviving Corporation, on the one hand, and any third party, on the other
hand, including, without limitation, any licensee, licensor, customer,
supplier, consultant or employee of Purchaser or any Affiliate thereof, the
Company or the Surviving Corporation, or (iii) affirmatively assist or induce
others to engage in any Competitive Business in any manner described in the
foregoing clauses (i) and (ii); provided, however, that at such time and in the
event that the employment of either of the Company Principals, with the
Purchaser or the Company is involuntary terminated without "cause" by Purchaser
("cause" being as defined in the applicable employment agreement for each of
the Company Principals) and Purchaser is not compensating the Shareholder or
Douma, as the case may be, with salary, severance, bonuses or similar payments
in an amount commensurate with their respective salaries on the date of such
termination, such agreement not to compete shall thereupon be limited, as to
the Shareholder or Douma, as the case may be, to the conduct of a Competitive
Business with respect to any healthcare or health-related products, services or
content on Internet/online and narrowband and broadband delivery systems.

                  6.5. Employee Options. Within a reasonable time following the
Closing, the Purchaser will grant (i) 69,000 non-transferable, incentive stock
options to the employees listed on Schedule 6.6 hereto in the amounts set forth
opposite the name of each such employee and (ii) 21,000 non-transferable, non-
qualified stock options to the persons named on Schedule 6.6 hereto in the
amounts set forth opposite the name of each such person. Any options granted
pursuant to this subsection 6.6 will be granted in accordance with and subject
to the Purchaser's then effective stock option plan and the Code. The incentive
stock options granted pursuant to the terms hereof will also be granted in
accordance with and be subject to the requirements of the Code. The
non-qualified stock options will be granted on substantially the same terms as
non-qualified stock options granted by the Purchaser to other non-employee
consultants.




                                  ARTICLE VII


                                INDEMNIFICATION


                  7.1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:

                   (a) "Affiliate" as to any person means any entity,
directly or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such person.

                  (b) "Event of Indemnification" shall mean and include (i) the
untruth, inaccuracy or breach of any representation or warranty of the Company,
any of the Company Principals or AOL (including the underlying facts and
circumstances related thereto) contained in Section 3.1, or 3.2, any Exhibit
hereto or any document delivered in connection herewith, (ii) the breach of
covenants and agreements by the Company, any of the Company Principals or AOL
and (iii) any claim by any person or entity heretofore providing content or
services to the Company for use by the Company in its BetterHealth.com service
with respect to consideration for, or authority to use any such content or
services.

                   (c) "Indemnified Persons" shall mean and include Purchaser,
Acquisition Sub and the Surviving Corporation and their respective Affiliates
(but shall not include the Shareholder or AOL), successors and assigns, and the
respective officers and directors of each of the foregoing.

                   (d) "Indemnifying Persons" shall mean and include each of
the Company Principals (but shall not include the Company) and their respective
successors and assigns, heirs or personal representatives.

                   (e) "Losses" shall mean any and all losses, claims, damages,
liabilities, expenses, assessments and Taxes sustained, suffered or incurred by
any Indemnified Person arising from or in connection with any such matter which
is the subject of indemnification under Section 7.2 hereof.

                  7.2. Indemnification Generally. Subject to Section 7.6
hereof, the Indemnifying Persons shall indemnify the Indemnified Persons for,
and hold each of them harmless from and against, any and all Losses arising
from or in connection with any Event of Indemnification; provided that each of
the Company Principals' liability under this Section 7.2 shall be on a joint
and several basis with each other.

                   The indemnifications set forth herein of the Shareholder
shall be secured pursuant to and in accordance with the Escrow Agreement. Any
claims for Losses hereunder may be satisfied pursuant to and in accordance with
the terms of the 




Escrow Agreement, notwithstanding the foregoing allocations of
responsibilities.

                  7.3. Assertion of Claims. No claim shall be brought under
Section 7.2 hereof unless the Indemnified Persons, or any of them, at any time
prior to the applicable Survival Date, if any, give the Indemnifying Persons
(a) written notice of the existence of any such claim, specifying the nature
and basis of such claim and the amount thereof, to the extent known or (b)
written notice pursuant to Section 7.4 of any third party claim, the existence
of which might give rise to such a claim. Upon the giving of such written
notice as aforesaid prior to the applicable Survival Date, the Indemnified
Persons, or any of them, shall have the right to commence legal proceedings
subsequent to the Survival Date for the enforcement of their rights under
Section 7.2 hereof.

                   7.4. Notice and Defense of Third Party Claims. The
obligations and liabilities of the Indemnifying Persons with respect to Losses
resulting from the assertion of liability by third parties (each, a "Third
Party Claim") shall be subject to the following terms and conditions:

                   (a) The Indemnified Persons shall promptly (and, in any
event, within five Business Days) give written notice to the Indemnifying
Persons of any Third Party Claim which might give rise to any Loss by the
Indemnified Persons, stating the nature and basis of such Third Party Claim,
and the amount thereof to the extent known. Such notice shall be accompanied by
copies of all relevant documentation with respect to such Third Party Claim,
including, without limitation, any summons, complaint or other pleading which
may have been served, any written demand or any other document or instrument.

                   (b) The Indemnified Persons shall assume the defense of any
Third Party Claims with counsel of their own choosing, which counsel shall be
reasonably satisfactory to the Indemnifying Persons, and shall act reasonably
and in with their good faith business judgment in handling such Third Party
Claims and shall not effect any settlement without the written consent of the
Indemnifying Persons, which consent shall not unreasonably be withheld or
delayed. The Indemnifying Persons shall have the right to participate at their
own expense in the defense of any Third Party Claims. The Indemnifying Persons
and the Indemnified Persons shall make available to each other and their
counsel and accountants all books and records and information relating to any
Third Party Claims, keep each other fully apprised as to the details and
progress of all proceedings relating thereto and render to each other such
assistance as may be reasonably required to ensure the proper and adequate
defense of any and all Third Party Claims.

                   7.5. Survival of Representations and Warranties. Subject to 
the further provisions of this Section 7.5, the respective representations and
warranties of (a) each of the Company Principals, AOL and the Purchaser set
forth in Sections 3.1, 3.2 and 3.3, respectively, shall survive the Effective
Time until eighteen (18) months following the Closing Date, except that the
representations and warranties contained in (i) Sections 3.1(h), 3.2(a),  and
3.2(c) shall not so terminate but shall survive the Closing indefinitely and
(ii) Section 3.1(o) shall not so terminate but shall survive the Closing until
the applicable statute of limitations shall have expired with respect to all
matters referenced therein and (b) the Company shall be deemed to be conditions
to the Closing and shall not survive the Closing and shall cease and terminate
upon the Closing and shall be of no further force or effect thereafter. For
convenience of reference, the date upon which any representation or warranty
contained herein shall terminate is referred to herein as the "Survival Date."
All covenants and agreements of Purchaser or the Shareholder contained herein
shall survive the Closing in accordance with their respective terms. Anything
contained herein to the contrary notwithstanding, the representations and
warranties of the Company contained in this Agreement (including, without
limitation, the Company Disclosure Schedule) (i) are being given by the Company
on behalf of the Shareholder and for the purpose of binding the Shareholder to
the terms and provisions of this Article VII and the Escrow Agreement, and as an
inducement to Purchaser and Acquisition Sub to enter into this Agreement and to
approve the Merger (and the Company acknowledges that Purchaser and Acquisition
Sub have expressly relied thereon) and (ii) are solely for the benefit of the
Indemnified Persons and each of them. Accordingly, no third party (including,
without limitation, the Shareholder) or any other holder of Company Common Stock
or anyone acting on behalf of any thereof) other than the Indemnified Persons,
and each of them, shall be a third party or other beneficiary of such
representations and warranties and no such third party shall have any rights of
contribution against the Company or the Surviving Corporation with respect to
such representations or warranties or any matter subject to or resulting in
indemnification under this Article Vil or otherwise.

                   7.6.    Limitation on Indemnification.

                   (a) Anything to the contrary contained in Article VII
notwithstanding, the Indemnifying Persons shall not be obligated to indemnify
the Indemnified Persons pursuant to this Article VII with respect to any Losses
pursuant to Section 7.1(b)(i) until the aggregate amount of such Losses exceeds
seventy-five thousand dollars ($75,000) (the "Basket Amount"), whereupon the
Shareholder shall be obligated to indemnify the Indemnified Persons for all
Losses in excess of the Basket Amount; provided, however, that the Shareholder
shall be obligated to indemnify the Indemnified Persons for the first dollar of
all Losses arising out of or related to a breach of the representation and
warranty contained in Sections 3.1(c), 3.1(e), 3.1(x), 3.1(ah), 3.1(af) and
3.2(a); provided further, however, that the aggregate maximum indemnification
liability of the Indemnifying Persons pursuant to this Article VII with respect
to any Losses pursuant to an Event 




of Indemnification under subsection 7.2 (except with respect to the
indemnification by the Shareholder set forth in Section 6.3(e)(ii) which shall
not be subject to the limitation set forth herein) shall be the total fair
market value of the aggregate consideration received by the Shareholder
pursuant to subsection 2.1(a). Notwithstanding anything stated herein to the
contrary, the Indemnifying Persons will not be liable to the Indemnified
Persons pursuant to this Article VII for any consequential or incidental
damages.

                   (b) For purposes of satisfying an indemnification obligation
of the Shareholder under this Article VII, each share of Purchaser Common Stock
tendered by or on behalf of the Shareholder in satisfaction of any
indemnification of the Shareholder under this Article VII shall have a value
determined as set forth in the Escrow Agreement.

                                  ARTICLE VIII


                TERMINATION; AMENDMENT, MODIFICATION AND WAIVER

                  8.1. Termination. This Agreement may be terminated, and the
Merger abandoned, notwithstanding the approval by Purchaser, Acquisition Sub
and the Company of this Agreement, at any time prior to the Effective Time, by:

                   (a) the mutual consent of Purchaser, Acquisition Sub and the
Company; or

                   (b) any Party, if the conditions set forth in Section 5.1
hereof shall not have been met by March 31, 1997, except if such conditions
have not been met solely as a result of the action or inaction of the party
seeking to terminate; or

                   (c) Purchaser and Acquisition Sub if the conditions set forth
in Section 5.2 hereof shall not have been met, and the Company if the
conditions set forth in Section 5.3 hereof shall not have been met, in either
case by March 31, 1997, except if such conditions have not been met solely as a
result of the action or inaction of the party seeking to terminate; or

                   (d) either Party, if such party shall have determined in its
sole discretion, exercised in good faith, that the Merger contemplated by this
Agreement has become impracticable by reason of the institution of any
litigation, proceeding or investigation to restrain or prohibit the
consummation of the Merger, or which questions the validity or legality of the
transactions contemplated by this Agreement.

Any termination pursuant to this Section 8.1 (other than a termination pursuant
to Section 8.1(a) hereof) shall be effected by written notice from the party or
parties so terminating to the other parties hereto.




         8.2. Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, this Agreement shall be of no further
force or effect, except for Section 6.4(a), Section 4.13, Article VII, this
Section 8.2, and Article IX, each of which shall survive the termination of this
Agreement; provided, however, that the liability of any party for any breach by
such party of the representations, warranties, covenants or agreements of such
party set forth in this Agreement occurring prior to the termination of this
Agreement shall survive the termination of this Agreement.

                                   ARTICLE IX


                                 MISCELLANEOUS

              9.1. Expenses. As used in this Agreement, "Transaction Costs"
shall mean, with respect to any party, all actual, out-of-pocket expenses
incurred by such party to third parties, in connection with this Agreement, the
Merger and all other transactions provided for herein and therein; but shall
not in any event include general overhead; the time spent by employees of such
party internally; postage, telephone, telecopy, photocopy and delivery expenses
of such party; permit and filing fees; and other non-material expenses that are
incidental to the ordinary course of business. Each party hereto shall bear its
own fees and expenses in connection with the transactions contemplated hereby;
provided, however, that in the event the Merger shall be consummated, Purchaser
and Acquisition Sub shall bear all Transaction Costs of Purchaser and
Acquisition Sub and the Shareholder shall bear all Transaction Costs of the
Company (to be effected by either direct payment of such Transaction Costs or a
contribution of cash to the Company by the Shareholder immediately prior to the
Effective Time in an amount equal to all such Transaction Costs of the
Company), that have not been paid by the Company before the Closing Date and
whether or not such fees and expenses are reflected in the Company Disclosure
Schedule or the Schedule of Expenses (such Transaction Costs of the Company
being herein collectively referred to as the "Company Expenses").

                  9.2. Entire Agreement. This Agreement (including the Company
Disclosure Schedule and the Exhibits attached hereto) and the other writings
referred to herein contain the entire agreement among the parties hereto with
respect to the transactions contemplated hereby and supersede all prior
agreements or understandings, written or oral, among the parties with respect
thereto.

                  9.3. Descriptive Headings. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement.

                  9.4. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and 




sufficient if delivered personally or sent by nationally-recognized overnight
courier or by registered or certified mail, postage prepaid, return receipt
requested or by telecopier, with confirmation as provided above addressed as
follows:

             if to Purchaser or Acquisition Sub, to:

                     iVillage, Inc.
                     170 Fifth Avenue
                     New York, New York 10010
                     Attention: Candice Carpenter,
                                Chairman and Chief Executive
                                Officer
                     Telecopier: (212) 604-9133;

                     with copies to:

                     O'Sullivan Graev & Karabell, LLP
                     30 Rockefeller Plaza
                     New York, New York 10112
                     Attention: Martin H. Levenglick, Esq.
                     Telecopier: (212) 408-2420;

             if to the Company, to:

                     Health ResponseAbility Systems, Inc.
                     585 Grove Street
                     Herndon, Virginia 22170
                     Attention:
                     Telecopier: (703) 904-6908

                     with a copy to:

                     Shaw Pittman Potts & Trowbridge
                     1501 Farm Credit Drive, Suite 400
                     McLean, Virginia 22102
                     Attention: Steven L. Meltzer, Esq.
                     Telecopier: (703) 821-2397; and

             if to the Shareholder, Douma or AOL, at their respective addresses 
             set forth on the signature pages attached hereto;

or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such
notices or communications shall be deemed to be received (a) in the case of
personal delivery or telecopy, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the
date when sent and (c) in the case of mailing, on the third business day
following the date on which the piece of mail containing such communication was
posted.

                  9.5. Counterparts. This Agreement may be executed in any
number of counterparts by original or facsimile signature, 




each such counterpart shall be an original instrument, and all such
counterparts together shall constitute one and the same agreement.

                  9.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the Virginia Statute and with the laws of the
State of New York applicable to contracts made and to be performed wholly
therein (without regard to principles of conflicts of laws).

                  9.7. Benefits of Agreement. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Except as
expressly provided herein, no person other than the parties hereto shall be or
shall be deemed to be third party beneficiaries of any provision or term of
this Agreement.

                  9.8. Pronouns. As used herein, all pronouns shall include the
masculine, feminine, neuter, singular and plural thereof whenever the context
and facts require such construction.

                  9.9. Amendment, Modification and Waiver. This Agreement shall
not be altered or otherwise amended except pursuant to (a) an instrument in
writing signed by all of the parties hereto and (b) in the case of a waiver or
consent, an instrument in writing signed by the party against whom enforcement
is sought; provided, however, that after the approval and adoption of this
Agreement and the Merger by the Shareholder and AOL, no amendment of this
Agreement shall be made which pursuant to the Virginia Statute or other law
requires the further approval of the Shareholder or AOL; provided further,
however, that any party to this Agreement may waive any obligation owed to it
by any other party under this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach.





                  IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement and Plan of Reorganization to be executed on its behalf as of
the day and year first above written.

                                           iVILLAGE, INC.


                                           By: /s/ Candice Carpenter
                                               -------------------------
                                               Name:  Candice Carpenter
                                               Title:  CEO


                                           HRS ACQUISITION CORPORATION


                                           By: /s/ Candice Carpenter
                                               -------------------------
                                               Name:  Candice Carpenter
                                               Title:  President


                                           HEALTH RESPONSEABILITY SYSTEMS, INC.


                                           By:
                                               -------------------------
                                               Name:
                                               Title:


                                               -------------------------
                                               Elin Silveous
                                               585 Grove Street
                                               Herndon, Virginia 22170


                                               -------------------------
                                               Allen Douma
                                               585 Grove Street
                                               Herndon, Virginia 22170





                 IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Reorganization to be executed on its behalf as of the day
and year first above written.

                                   iVILLAGE, INC.


                                   By:
                                      ---------------------------------
                                      Name:
                                      Title:



                                   HRS ACQUISITION CORPORATION


                                   By:
                                      ---------------------------------
                                      Name:
                                      Title:


                                   HEALTH RESPONSEABILITY SYSTEMS, INC.


                                   By: /s/ Elin V. Silveous
                                      ---------------------------------
                                       Name:   Elin V. silveous
                                       Title:  President

                                       /s/ Elin Silveous
                                       -------------------------------
                                       Elin Silveous
                                       585 Grove Street
                                       Herndon, Virginia  22170

                                       /s/ Allen Douma
                                       -------------------------------
                                       Allen Douma
                                       585 Grove Street
                                       Herndon, Virginia  22170





                                       AMERICA ONLINE, INC.


                                       By: /s/ Lennert J. Leader
                                       -------------------------------
                                           Name:  Lennert J. Leader
                                           Title:  Senior Vice President,
                                                   Chief Financial Officer
                                                   and Treasurer
                                             22000 AOL Way
                                             Dulles, Virginia  20166
                                             Attention:
                                             Telecopier:








                                          AMENDMENT NO. 1 dated as of March 31,
                                    1997, to the AGREEMENT AND PLAN OR
                                    REORGANIZATION AND MERGER dated as of
                                    January 31, 1997 (the "Agreement"), among 
                                    iVILLAGE, INC., a Delaware corporation,
                                    HEALTH RESPONSEABILITY SYSTEMS, INC., a
                                    Virginia corporation ("Better Health"),
                                    ELIN SILVEOUS, the sole shareholder of
                                    Better Health, and the other signatories
                                    thereto.

                  The parties desire to amend the Agreement to extend the
termination date thereof to May 15, 1997. All capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the
Agreement.

                  NOW, THEREFORE, pursuant to Section 9.10 of the Agreement,
the undersigned hereby amend the Agreement as follows:

                  Section 8.1(b) of the Agreement is hereby amended by deleting
                  any reference to the date "March 31, 1997" and inserting in
                  place thereof the reference to the date "May 15, 1997."

                  EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL
REMAIN IN FULL FORCE AND EFFECT.

                  This Amendment shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly therein.

                  This Amendment may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts shall constitute one agreement.

                                    * * * * *







                  IN WITNESS WHEREOF, the undersigned have duly executed this
Amendment No. 1 as of the date first written above.


SHAREHOLDER:                           iVILLAGE, INC.

/s/ Elin Silveous                      By: /s/ Candice Carpenter
---------------------------               -------------------------
    Elin Silveous                         Name: Candice Carpenter
                                          Title: CEO

                                       HEALTH RESPONSEABILITY
                                        SYSTEMS, INC.


                                       By: /s/ Elin V. Silveous
                                           -----------------------
                                           Name:   Elin V. Silveous
                                           Title:  President

                                       AMERICA ONLINE, INC.


                                       By:
                                           -----------------------
                                           Name:
                                           Title


                                      -2-




                  IN WITNESS WHEREOF, the undersigned have duly executed this
Amendment No. 1 as of the date first written above.


SHAREHOLDER:                           iVILLAGE, INC.

                                       By: 
---------------------------               -------------------------
   Elin Silveous                          Name: 
                                          Title:

                                          HEALTH RESPONSEABILITY
                                           SYSTEMS, INC.


                                        By:
                                            -------------------------
                                              Name:
                                              Title:

                                          AMERICA ONLINE, INC.


                                          By: /s/ Miles Gilburne
                                             -----------------------
                                             Name: Miles Gilburne
                                             Title

                                      -2-




                                          AMENDMENT NO. 2 dated as of May 15,
                                    1997, to the AGREEMENT AND PLAN OR
                                    REORGANIZATION AND MERGER dated as of
                                    January 31, 1997 (the "Agreement") (as
                                    amended by that certain Amendment No. 1
                                    dated as of March 31, 1997), among
                                    iVILLAGE, INC., a Delaware corporation,
                                    HEALTH RESPONSEABILITY SYSTEMS, INC., a
                                    Virginia corporation, ELIN SILVEOUS, the
                                    sole shareholder of Better Health, and the
                                    other signatories thereto.

                  The parties desire to amend the Agreement to, among other
things, extend the termination date thereof to May 23, 1997 and to modify
certain terms of the Agreement in order to reflect the conversion of certain
cash consideration payable to AOL into rights to receive Purchaser Common
Stock. All capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Agreement.

                  NOW, THEREFOR, pursuant to Section 9.10 of the Agreement, the
undersigned hereby amend the Agreement as follows:

1.       Subsection 2.1(b)(i)(B) is hereby amended by deleting in line 3 of
         such subsection after the word "receive" the words "in the aggregate
         $2,000,000 in cash" and inserting in lieu thereof the words "609,000
         shares of Purchaser Common stock";

2.       Subsection 2.2(a) is hereby amended by deleting in line 12 of such
         subsection after the word "receive" the words "$2,000,000 in cash"
         and inserting in lieu thereof the words "609,000 shares of Purchaser
         Common Stock";

3.       Subsection 3.2(c) is hereby amended by inserting the following clause
         (iii) after clause (ii) thereof:

                  "(iii) Investment Representations.

                  AOL (a) is acquiring the shares of the Purchaser Common
         Stock, being issued to it pursuant to the Merger for investment and for
         its own account and not as a nominee or agent for any other person and
         with no present intention of distributing or reselling such shares or
         any part thereof in any transactions that would be in violation of the
         Securities Act or any state securities or "blue-sky" laws, (b) has had
         an opportunity to ask questions of and has received satisfactory
         answers from the officers of Purchaser or persons acting on Purchaser's
         behalf concerning Purchaser






         and the terms and conditions of an investment in Purchaser Common
         Stock, (c) has sufficient knowledge and experience in financial
         affairs and is capable of evaluating the risks of acquiring and
         holding shares of Purchaser Common Stock, (d) is aware of Purchaser's 
         business affairs and financial condition and has acquired sufficient
         information about Purchaser to reach an informed and knowledgeable
         decision to acquire the shares of Purchaser Common Stock to be issued
         to it in the Merger, (e) can afford to suffer a complete loss of its
         investment in shares of Purchaser Common Stock and (f) understands (i)
         that the shares of Purchaser Common Stock to be issued to it in the
         Merger have not been registered for sale under the Securities Act or
         any state securities or "blue-sky" laws in reliance upon an exemption
         therefrom, which exemption depends upon, among other things, the bona
         fide nature of the investment intent of AOL as expressed hereunder,
         (ii) that such shares of Purchaser Common Stock must be held
         indefinitely and not sold until such shares are registered under the
         Securities Act and any applicable state securities or "blue-sky" laws,
         unless an exemption from such registration is available, (iii) that,
         except as provided in Section 6.3, Purchaser is under no obligation to
         so register such shares and (iv) that the certificates evidencing such
         shares will be imprinted with a legend in the form set forth in Section
         6.2(b) that prohibits the transfer of such shares, except as provided
         in Section 6.2. AOL is an "accredited investor" within the meaning of
         Rule 501(a) under the Securities Act. AOL has no plan or intention to
         sell, exchange or dispose of any of the shares of Company Common Stock
         received in connection with the transactions contemplated herein.";


4.       Subsection 6.2(c) is hereby amended by deleting such subsection in 
         its entirety and inserting the following in lieu thereof:
         

               "(c) The Shareholder and AOL agree, prior to any Transfer of
         Restricted Securities, to give written notice to Purchaser of their
         intention to effect such Transfer and to comply in all other respects
         with the provisions of this Section 6.2. Each such notice shall
         describe the manner and circumstances of the proposed Transfer and
         shall be accompanied by the written opinion, addressed to Purchaser,
         of counsel for the holder of such Restricted Securities, stating that
         in the opinion of such counsel (which opinion and counsel shall be
         reasonably satisfactory to Purchaser) such proposed transfer does not
         involve a transaction requiring registration or qualification of such
         Restricted Securities under the Securities Act or the securities or
         "blue-sky" laws of any relevant state of the Untied States; provided,
         however, that no such opinion of counsel shall be necessary for a
         Transfer pursuant to Rule 144. The holder thereof shall thereupon,
         with the written consent of

                                      -2-




         Purchaser, be entitled to Transfer such Restricted Securities in
         accordance with the terms of the notice delivered by it to Purchaser.
         Each certificate or other instrument evidencing the securities issued
         upon the Transfer of any such Restricted Securities (and each
         certificate or other instrument evidencing any untransferred balance
         of such Restricted Securities) shall bear the legend set forth in
         Section 6.2(b) unless (x) in such opinion of counsel of Purchaser
         registration of any future Transfer is not required by the applicable
         provisions of the Securities Act or (y) Purchaser shall have waived
         the requirement of such legends. Neither the Shareholder nor AOL shall
         Transfer any Restricted Securities until such opinion of counsel has
         been given (unless waived by Purchaser or unless such opinion is not
         required in accordance with the provisions of this Section 6.2(c)).";

5.       Subsection 6.2(e) is hereby amended by deleting such subsection in its 
         entirety and inserting the following in lieu thereof:

                "(e) Each of the Shareholder and AOL understand and agree that
         Purchaser, at its discretion, may cause stop transfer orders to be
         placed with its transfer agent with respect to certificates for
         Restricted Securities owned by such Securityholder but not as to
         certificates for such shares of Purchaser Common Stock as to which the
         legend set forth in paragraph (b) of this Section 6.2 is no longer
         required because one or more of the conditions set forth in Section
         6.2(d) shall have been satisfied.";

6.       Section 6.3 is hereby amended by deleting such section in its entirety 
         and inserting the following in lieu thereof:

               (a) "As used in this Section 6.3, the following terms shall
have the following meanings:

                   (i) "Other Shares" shall mean at any time those shares of
         Purchaser Common Stock that do not constitute Primary Shares,
         Registrable Shares or Registrable Founders Shares.

                   (ii) "Primary Shares" shall mean at any time the authorized
         but unissued shares of Purchaser Common Stock or shares of Purchaser
         Common Stock held in treasury.

                   (iii) "Registrable Founder's Shares" shall have the meaning
         as set forth in that certain Amended and Restated Registration Rights
         Agreement dated as of May 6, 1996 among the Purchaser and the
         stockholders identified therein.

                   (v) "Registrable Shares" shall mean the shares of Purchaser
         Common Stock that constitute Restricted Securities

                                     -3-




         that are held by the Shareholder or AOL and that have not theretofore
         been sold to the public pursuant to a registration statement under the
         Securities Act or pursuant to Rule 144.

                   (v) "Rule 144" shall mean Rule 144 promulgated under the
         Securities Act, as amended from time to time, or any successor or
         complementary provision thereto.

               (b) Subject to the provisions set forth below and to the last
sentence of this Section 6.3(b), if Purchaser at any time or times following six
months after an initial underwritten public offering of shares of Purchaser
Common Stock proposes for any reason to register Primary Shares under the
Securities Act (other than on From S-4 or Form S-8 promulgated under the
Securities Act or any successor forms thereto), it shall promptly give written
notice to the Shareholder and AOL of its intention so to register such shares
and, upon the written request, given within 30 days after delivery of such
notice by Purchaser, of any Securityholder to include in such registration
Registrable Shares (which request shall specify the number of Registrable Shares
proposed to be included in such registration by such Securityholder),
Purchaser shall use its best efforts to cause all such Registrable Shares to be
included in such registration on the same terms and conditions as the securities
otherwise being sold in such registration; provided, however, that the rights
granted to the Shareholder and AOL hereunder shall be subject at all times to
the contractual rights of any third parties now or hereafter granted; further
provided, however, that if the managing underwriter in the good faith exercise
of its reasonable judgment advises Purchaser in writing that the inclusion of
all Registrable Shares proposed to be included in such registration would
interfere with the successful marketing (including pricing) of Primary Shares or
Other Shares proposed to be registered by Purchaser, then the number of Primary
Shares, Registrable Shares and Other Shares proposed to be included in such
registration shall be included in the following order:

                   (i) first, the primary Shares and Other Shares; and

                   (ii) second, the Registrable Shares and the Registrable
         Founders Shares requested to be included in such registration, pro
         rata based upon the number of Registrable Shares and Registrable
         Founders Shares proposed to be included in such registration; provided
         that it is agreed that for purpose of this subsection 6.3 and the
         rights granted herein, the Registrable Shares shall be treated on a
         pari passu basis with and with respect to the Registrable Founders'
         Shares.

                   If any registration hereunder is to be underwritten,
Purchaser and each holder of Registrable Shares to be registered by such
registration statement shall, as a condition to 

                                     -4-




participating in such registration, enter into an underwriting agreement in
customary form with a managing underwriter selected for such underwriting by
Purchaser. If any such holder elects not to include any or all of its, his or
her Registrable Shares in any registration statement filed by the Purchaser,
such holder shall nevertheless continue to have the right to include any of its,
his or her Registrable Shares in any subsequent registration statement or
registration statements as may be filed by the Purchaser with respect to
offerings of its securities, subject to the terms and conditions set forth in
this Section 6. Anything to the contrary contained herein notwithstanding,
Purchaser shall not be required to take any action to effect any such
registration, qualification or compliance pursuant to this Section 6.3 after
Purchaser has effected four (4) such requested registrations pursuant to this
Section 6.3 in which any such requesting holder has been given the opportunity
to "participate"; provided that for the purposes of this sentence "participate"
shall mean the registration of at lease 50% of the amount of Registrable Shares
originally requested to be registered in each such election pursuant to this
subsection 6.3.

                   (c) In consideration for Purchaser agreeing to its
obligations udner this Section 6.3, if Purchaser shall include Registrable
Shares in a registration pursuant to Section 6.3(b)) for the sale thereof to
the public, each of the Shareholder and AOL agrees, upon the request of the
managing underwriter of such registration, to enter into an agreement not to
sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of, any Registrable Shares, other than those Registrable
Shares actually included in such registration pursuant to Section 6.3(b) and
sold to the public thereunder, without the prior written consent of the
underwriters which period shall not begin more than 10 days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the
effective date of such registration statement; provided, that the Shareholder
and AOL shall be bound by this provision only if, and to the extent, the
executive officers of Purchaser owning Purchaser Common Stock shall be bound by
such a provision.

                   (d) In connection with any registration pursuant to this
Section 6.3, Purchaser shall in its sole discretion determine the terms and
conditions of such registration, including, without limitation, the timing
thereof; the scope of the offering contemplated thereby (i.e., whether the
offering shall be a combined primary offering and a secondary offering or
limited only to a secondary offering); the manner of distribution of
Registrable Shares; the period of effectiveness of registration for permissible
sales of Registrable Securities thereunder consistent with the plan of
distribution agreed upon by Purchaser, the Shareholder and AOL; and all other
material aspects of the registration and the registration process. In

                                     -5-




connection therewith, Purchaser may require that any such registration be
underwritten, in which event the managing underwriter shall be selected by
Purchaser.

         (e) (i) In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, Purchaser shall indemnify
and hold harmless the Shareholder and AOL against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof), to which the
Shareholder and/or AOL may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the registration statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Shares, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or, with respect to any prospectus, necessary to make the
statements therein in light of the circumstances under with they were made not
misleading, or any violation by Purchaser of the Securities Act or state
securities or "blue-sky" laws applicable to Purchaser and relating to action or
inaction required of Purchaser in connection with such registration or
qualification under state securities or "blue-sky" laws; provided however, that
Purchaser shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
said registration statement, preliminary prospectus, final prospectus,
amendment, supplement or document incident to registration or qualification of
any Registrable Shares in reliance upon and in conformity with written
information furnished to Purchaser by the Shareholder or AOL, as the case may
be, with respect to information regarding the Shareholder or AOL, as the case
may be, for use in the preparation thereof.

                  (ii) In connection with any registration of Registrable Shares
         under the Securities Act pursuant to this Agreement, the Shareholder
         shall indemnify and hold harmless (in the same manner and to the same
         extent as set forth in the preceding paragraph of this Section 6.3 (e))
         Purchaser, each director of Purchaser, each officer of Purchaser who
         shall sign such registration statement, each underwriter, broker or
         other person acting on behalf of Purchaser and each person who controls
         any of the foregoing persons within the meaning of the Securities Act
         with respect to any statement or omission from such registration, any
         preliminary prospectus or final prospectus contained therein

                                      -6-




         or otherwise filed with the Commission, any amendment or supplement
         thereto or any document incident to registration or qualification of
         any Registrable Share, if such statement or omission was made in
         reliance upon and in conformity with written information furnished to
         Purchaser or such underwriter by the Shareholder for use in connection
         with the preparation of such registration statement, preliminary
         prospectus, final prospectus, amendment, supplement or document;
         provided that the maximum liability in respect of such indemnification
         shall be limited, in the case of the Shareholder, to an amount equal to
         the net proceeds received by the Shareholder from the sale of such
         Registrable Shares effective pursuant to such registration statement.

                  (iii) In connection with any registration of Registrable
         Shares under the Securities Act pursuant to this Agreement, AOL shall
         indemnify and hold harmless (in the same manner and to the same extent
         as set forth in clause (i) of this Section 6.3(c)) Purchaser, each
         director of Purchaser, each officer of Purchaser, who shall sign such
         registration statement, each underwriter, broker or other person acting
         on behalf of Purchaser and each person who controls any for the
         foregoing persons within the meaning of the Securities Act with respect
         to any statement or omission from such registration statement, any
         preliminary prospectus or final prospectus contained therein or
         otherwise filed with the Commission, any amendment or supplement
         thereto or any document incident to registration or qualification of
         any Registrable Share, if such statement or omission was made in
         reliance upon and in conformity with written information furnished to
         Purchaser or such underwriter by AOL for use in connection with the
         preparation of such registration statement, preliminary prospectus,
         final prospectus, amendment, supplement or document; provided that the
         maximum liability in respect of such indemnification shall be limited,
         in the case of AOL, to an amount equal to the net proceeds received by
         AOL from the sale of such Registrable Shares effected pursuant to such
         registration statement.

     (f) The Shareholder and/or AOL, as applicable, shall furnish to Purchaser
such written information regarding the Shareholder or AOL, as the case may be,
as Purchaser shall reasonably deem necessary in connection with any
registration, qualification or compliance contemplated by this Section 6.3.

     (g) Anything to the contrary contained herein notwithstanding, the rights
of the holders of Registrable Shares and the obligations of Purchaser under
Section 6.3(b) hereof shall terminate and be of no further force or effect (i)
as to any holder of Registrable Shares, at such time as all Registrable Shares
held by such holder may be sold under Rule 144 during any

                                      -7-




three-month period and (ii) as to all holders of Registrable Shares, on the
third anniversary of the Effective Date.

     (h) Neither the Shareholder nor AOL may assign their respective rights
under this Section 6.3 to any purchaser or transferee of Restricted Securities
without the prior written consent of Purchaser; provided, however, that any such
purchaser or transferee shall, as a condition to the effectiveness of such
assignment if consented to by Purchaser, be required to execute a counterpart to
this Agreement agreeing to be treated as the Shareholder or AOL, as the case may
be, is treated hereunder solely for purposes of this Section 6.3, whereupon such
purchaser or transferee shall have the benefits of, and shall be subject to the
restrictions contained in, this Section 6.3.

     (i) All expenses incurred by Purchaser in complying with this Section 6.3,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), fees and expenses of complying with
securities and "blue-sky" laws, printing expenses and fees and expenses of
Purchaser's counsel and accountants, shall be borne by Purchaser; provided,
however, that all fees and expenses of counsel for the holders of Registrable
Shares or any of them and all underwriting discounts, taxes and selling
commissions applicable to the Registrable Shares, and any expenses and fees that
would not have been incurred by Purchaser but for inclusion of Registrable
Shares in such registration, shall not be borne by Purchaser but shall be borne
by the holders of Registrable Shares pro rata based on the number of Registrable
Shares so registered.";

7.  Section 6.5 is hereby amended by deleting in line 8 of such section after 
    the word "this" the words "subsection 6.6" and inserting in lieu thereof the
    words "subsection 6.5";

8.  Section 8.1(b) and (c) are hereby amended by deleting any reference to the
    date "March 31, 1997" (as amended by Amendment No. 1 to be "May 15, 1997) 
    and inserting in place thereof the reference to the date "May 23, 1997.";

9.  EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL FORCE
    AND EFFECT.

10. This Amendment shall be governed by and construed in accordance with the
    laws of the State of New York applicable to contracts made and to be
    performed wholly therein.

11. This Amendment may be executed in any number of counterparts, and each such
    counterpart shall be deemed to be an original instrument, but all such
    counterparts shall constitute one agreement.

                                      -8-




         IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
No. 2 as of the date first written above.


SHAREHOLDER                        iVILLAGE, INC.


/s/ Elin Silveous                  By: /s/ Steven Ellis
------------------------              -------------------------
Elin Silveous                         Name:  Steven Ellis
                                      Title: VP, Finance


                                   HEALTH RESPONSEABILITY SYSTEMS, INC.


                                   By: /s/ Allen Douma
                                      -------------------------
                                      Name:  Allen Douma
                                      Title: CEO


                                   AMERICA ONLINE, INC.


                                   By: /s/ Lennert J. Leader
                                      -------------------------
                                      Name:  Lennert J. Leader
                                      Title: Senior Vice President,
                                             Chief Financial Officer




                                     -10-





                         AMENDMENT NO. 3 dated as of May 16, 1997, to the
                    AGREEMENT AND PLAN OR REORGANIZATION AND MERGER dated as
                    of January 31, 1997 (the "Agreement") (as amended by that
                    certain Amendment No. 1 dated as of March 31, 1997 and
                    that certain Amendment No. 2 dated as of May 15, 1997),
                    among iVILLAGE, INC., a Delaware corporation, HEALTH
                    RESPONSEABILITY SYSTEMS, INC., a Virginia corporation,
                    ELIN SILVEOUS, the sole shareholder of Better Health, and
                    the other signatories thereto.

         The parties desire to amend the Agreement to, among other things, to
modify certain terms of the Agreement in order to reflect the increase in the
number of Purchaser Common Stock that Elin Silveous will receive. All
capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.

         NOW, THEREFORE, pursuant to Section 9.10 of the Agreement, the
undersigned hereby amend the Agreement as follows:

1.   Subsection 2.1(a)(ii) is hereby amended by deleting the words "1,038,000
     shares of Purchaser Common Stock" and inserting in lieu thereof the words
     "1,300,200 shares of Purchaser Common Stock";

2.   Subsection 2.1(b)(1)(A) is hereby amended by deleting the words
     "1,038,000 shares of Purchaser Common Stock" and inserting in lieu
     thereof the words "1,300,200 shares of Purchaser Common Stock";

3.   Subsection 2.2(b) is hereby amended by inserting the following sentence
     after the last sentence thereof: "Of the Purchaser Common Stock being
     issued to AOL hereunder, the first shares of Purchaser Common Stock with
     a total aggregate value of $270,000 shall be paid to AOL as repayment of
     the AOL Note, and the remaining shares of Purchaser Common Stock shall be
     consideration in exchange for the AOL Warrant.";

4.   Subsection 2.3(b)(ii) is hereby amended by deleting the words "103,800
     Merger Shares" and inserting in lieu thereof the words "130,020 Merger
     Shares";

5.   Section 5.3 is hereby amended by inserting the following subsection after
     the last subsection thereof:




     "(j) Acquisition Stock Option Plan. The proposed 1997 Acquisition Stock
     Option Plan will have been approved by the requisite number of
     shareholders pursuant to a shareholder written consent."

6.   EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL
     FORCE AND EFFECT.

7.   This Amendment shall be governed by and construed in accordance with the
     laws of the State of New York applicable to contracts made and to be
     performed wholly therein.

8.   This Amendment may be executed in any number of counterparts, and each
     such counterpart shall be deemed to be an original instrument, but all
     such counterparts shall constitute one agreement.




                                     -2-





         IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
No. 3 as of the date first written above.


SHAREHOLDER                        iVILLAGE, INC.


/s/ Elin Silveous                  By: /s/ [ILLEGIBLE]
------------------------              -------------------------
Elin Silveous                         Name:  [ILLEGIBLE]
                                      Title: Chief Executive Officer


                                   HEALTH RESPONSEABILITY SYSTEMS, INC.


                                   By: /s/ Allen Douma
                                      -------------------------
                                      Name:  Allen Douma
                                      Title: Chief Executive Officer


                                   AMERICA ONLINE, INC.


                                   By: /s/ Lennert J. Leader
                                      -------------------------
                                      Name:  Lennert J. Leader
                                      Title: Senior Vice President,
                                             Chief Financial Officer







                         AMENDMENT NO. 4 dated as of May 23, 1997, to the
                    AGREEMENT AND PLAN OR REORGANIZATION AND MERGER dated as
                    of January 31, 1997 (the "Agreement") (as amended by that
                    certain Amendment No. 1 dated as of March 31, 1997, 
                    that certain Amendment No. 2 dated as of May 15, 1997 and
                    that certain Amendment No. 3 dated May 23, 1997), among
                    iVILLAGE, INC., a Delaware corporation, HEALTH
                    RESPONSEABILITY SYSTEMS, INC., a Virginia corporation,
                    ELIN SILVEOUS, the sole shareholder of Better Health, and
                    the other signatories thereto.

         The parties desire to amend the Agreement to, among other things,
extend the termination date thereof to May 28, 1997 and to modify certain
terms of the Agreement in order to reflect the conversion of certain cash
consideration payable to AOL into rights to receive Purchaser Common Stock.
All capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement.

         NOW, THEREFORE, pursuant to Section 9.10 of the Agreement, the
undersigned hereby amend the Agreement as follows:

1.   Subsection 8.1(b) and (c) are hereby amended by deleting any reference to
     the date "March 31, 1997" (as amended by Amendment No. 2 to be "May 23,
     1997) and inserting in place thereof the reference to the date "May 28,
     1997.";

2.   EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL
     FORCE AND EFFECT.

3.   This Amendment shall be governed by and construed in accordance with the
     laws of the State of New York applicable to contracts made and to be
     performed wholly therein.

4.   This Amendment may be executed in any number of counterparts, and each
     such counterpart shall be deemed to be an original instrument, but all
     such counterparts shall constitute one agreement.





         IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
No. 4 as of the date first written above.


SHAREHOLDER                        iVILLAGE, INC.


/s/ Elin Silveous                  By: /s/ Steven Ellis
------------------------              -------------------------
Elin Silveous                         Name:  Steven Ellis
                                      Title: Vice President, Finance


                                   HEALTH RESPONSEABILITY SYSTEMS, INC.


                                   By: /s/ Allen Douma
                                      -------------------------
                                      Name:  Allen Douma
                                      Title: Chief Executive Officer


                                   AMERICA ONLINE, INC.


                                   By: /s/ [ILLEGIBLE]
                                      -------------------------
                                      Name:  [ILLEGIBLE]
                                      Title: President and Chief Executive
                                             Officer; [ILLEGIBLE]



                                      -2-







EX-2.2

4

AGREEMENT AND PLAN OF REORGANIZATION






                      AGREEMENT AND PLAN OF REORGANIZATION

                                   DATED AS OF

                               DECEMBER 10, 1996,

                                      AMONG

                                 iVILLAGE, INC.

                           PP ACQUISITION CORPORATION

                             PARENTSPLACE.COM, INC.

                                       AND

                    THE STOCKHOLDER OF PARENTSPLACE.COM, INC.






SCHEDULES

Schedule I -            Escrow Shares

Schedule II -           Company Shares

Schedule 3.1(ah) -      Officers and Directors of the Company

EXHIBITS

Exhibit A - Form of Merger Agreement

Exhibit B - Form of Non-Competition Agreements

Exhibit C - Form of Escrow Agreement

Exhibit D - Form of Termination Agreement

Exhibit E - Termination of Burst!Media Agreement

Exhibit F - Form of Release

                                      -vii-






Term                                                       Section or
                                                         Other Location

Acquisition Sub........................................     Caption
Actions................................................     3.1(o)(i)
Affiliate..............................................     6.1(a)
Agreement..............................................     Preamble
Agreement of Merger....................................     Preamble
AOL....................................................     3.3 (d)(vii)(A)
Basket Amount..........................................     6.6(a)
Benefit Arrangements...................................     3.1(t)(ii)
Business Day...........................................     1.7
Business Plan..........................................     3.1(a)(ii)
Charter................................................     3.1(a)(iii)
Closing................................................     1.7
Closing Date...........................................     1.7
Code...................................................     1.6
Cohen..................................................     Caption
Company................................................     Caption
Company Balance Sheet..................................     3.1(e)(i)
Company Common Stock...................................     Preamble
Company Disclosure Schedule                                 3.1
Company Expenses.......................................     7.1
Company Financial Statements...........................     3.1(e)(i)
Company Returns........................................     3.1(h)(i)
Company Rights.........................................     3.1(k)(i)
Company Stock Fraction.................................     2.1(c)(ii)
Competitive Business...................................     5.5(b)
Confidential Information...............................     5.5(a)
Confidentiality Agreements.............................     3.1(k)(v)
Constituent Corporations...............................     1.1
Delaware Statute.......................................     Preamble
Designated Persons.....................................     3.1(o)(iii)
Effective Time.........................................     1.2
Employee...............................................     3.1(t)(i)
Employee Plans.........................................     3.1(t)(i)
Encumbrances...........................................     3.1(i)(iii)
ERISA..................................................     3.1(t)(i)
ERISA Affiliate........................................     3.1(t)(i)
Escrow Agreement.......................................     4.2(h)
Escrow Shares..........................................     2.2(a)
Event of Indemnification...............................     6.1(b)
FAS No. 5..............................................     3.1(f)(ii)
Form 10-Q..............................................     3.3(b)
Fully Diluted Company Share Amount.....................     2.1
Fully Diluted Company Shares...........................     2.1
Governmental Authority.................................     3.1(o)(i)
Indemnification Amount.................................     6.2
Indemnified Persons....................................     6.1(c)
Intellectual Property Rights...........................     3.1(k)

                                     -viii-






Term                                                        Section or
                                                          Other Location

Leased Real Property...................................     3.1(j)(i)
Leases.................................................     3.1(j)(ii)
Liability..............................................     3.1(f)(i)
Licensed Software......................................     3.1(l)(i)
Losses.................................................     6.1(d)
Material Adverse Change................................     3.1(g)(i)
Material Adverse Effect................................     3.1(a)(iii)
Merger.................................................     1.1
Merger Shares..........................................     2.1(c)(i)
Needleman..............................................     Caption
New Certificate........................................     2.2(b)
Non-Competition Agreements.............................     4.2(a)
Old Certificate........................................     2.2(b)
Option Agreement.......................................     4.3(e)
Option Agreements......................................     4.3(e)
Other Shares...........................................     5.3(a)(i)
Owned Software.........................................     3.1(1)(i)
Preferred Stock........................................     Preamble
Primary Shares.........................................     5.3(a)(ii)
Purchaser..............................................     Caption
Purchaser Common Stock.................................     Preamble
Purchaser Disclosure Schedule..........................     3.3
Registrable Shares.....................................     5.3(a)(iii)
Restricted Securities..................................     5.2(a)
Rule 144...............................................     5.3(d)(iv)
Schedule of Expenses...................................     4.2(e)
Series A Preferred Stock...............................     3.3(d)(i)
Series B Preferred Stock...............................     3.3(d)(i)
Series B-1 Preferred Stock.............................     3.3(d)(i)
Site...................................................     3.1(z)
Software...............................................     3.1(l)(i)
Stockholders...........................................     Caption
Subject Business.......................................     5.5(a)
Subsidiary.............................................     3.1(b)
Survival Date..........................................     6.5
Surviving Corporation..................................     1.1
Tax....................................................     3.1(h)(ii)
Taxes..................................................     3.1(h)(ii)
Termination Agreement..................................     4.2(l)
Third Party Claim......................................     6.4
to the best knowledge of the Company
and the Stockholder....................................     3.1(aj)
Total Purchaser Share Amount                                2.1
Transaction Costs......................................     7.1
Transfer...............................................     5.2(a)
TZM&M..................................................     4.2(b)
Warrant Shares.........................................     3.3(d)(vii)
World Wide Web.........................................     3.1(z)

                                      -ix-



                                        AGREEMENT AND PLAN OF REORGANIZATION
                                        dated as of December 10, 1996, among
                                        iVILLAGE, INC., a Delaware corporation
                                        ("Purchaser"), PP ACQUISITION
                                        CORPORATION, a Delaware corporation and
                                        a direct, wholly-owned subsidiary
                                        of Purchaser ("Acquisition Sub"),
                                        PARENTSPLACE.COM, INC., a Delaware
                                        corporation (the "Company"), and the
                                        sole stockholder of the Company (the
                                        "Stockholder"). For purposes of this
                                        Agreement, the term "Stockholder" shall
                                        mean (i) the sole stockholder of the
                                        Company set forth on Schedule II hereto,
                                        Jacqueline B. Needleman ("Needleman")
                                        and David L. Cohen ("Cohen"), jointly
                                        and severally.

                  The Boards of Directors of Purchaser, Acquisition Sub and the
Company have each duly approved and adopted this Agreement and Plan of
Reorganization (this "Agreement"), the Agreement of Merger in substantially the
form of Exhibit A attached hereto (the "Agreement of Merger") and the proposed
merger of Acquisition Sub with and into the Company in accordance with this
Agreement, the Agreement of Merger and the Delaware General Corporation Law (the
"Delaware Statute"), whereby, among other things, the issued and outstanding
shares of common stock, no par value, of the Company (the "Company Common
Stock"), will be exchanged and converted into shares of common stock, $.0005
par value, of Purchaser (the "Purchaser Common Stock") in the manner set forth
in Article II hereof and in the Agreement of Merger, upon the terms and subject
to the conditions set forth in this Agreement and the Agreement of Merger.

                  NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Agreement of Merger and the
representations, warranties, covenants, agreements, conditions and promises
contained herein and therein, the parties hereby agree as follows:






                                   ARTICLE I

                                    GENERAL

1.1.     The Merger.

         In accordance with the provisions of this Agreement, the Agreement of
Merger and the Delaware Statute, Acquisition Sub shall be merged with and into
the Company (the "Merger"), which at and after the Effective Time shall be, and
is sometimes herein referred to as, the "Surviving Corporation". Acquisition Sub
and the Company are sometimes referred to as the "Constituent Corporations".

1.2.     The Effective Time of the Merger.

         Subject to the provisions of this Agreement, the Agreement of Merger
shall be executed and delivered to and filed with the Secretary of State of the
State of Delaware by each of the Constituent Corporations on the Closing Date in
the manner provided under Section 251 of the Delaware Statute. The Merger shall
become effective (the "Effective Time") upon the filing of the Agreement of
Merger with the Secretary of State of the State of Delaware.

1.3.     Effect of Merger.

         At the Effective Time the separate existence of Acquisition Sub shall
cease and Acquisition Sub shall be merged with and into the Surviving
Corporation, and the Surviving Corporation shall possess all of the rights,
privileges, powers and franchises as well of a public as of a private nature,
and be subject to all the restrictions, disabilities and duties of each of the
Constituent Corporations as provided in Section 259 of the Delaware Statute.

1.4.     Charter and By-Laws of Surviving Corporation.

         From and after the Effective Time and pursuant to the Agreement of
Merger: (i) the Charter of the Company shall be amended so that Article IV of
the Company's Certificate of Incorporation shall read in its entirety as
follows: "The total number of shares of all classes of stock which the
corporation shall have authority to issue is 1,000, all of which shall consist
of Common Stock, $.O1 par value per share", and, as so amended, shall be the
Charter of the Surviving Corporation, unless and until altered, amended or
repealed as provided in the Delaware Statute, (ii) the by-laws of Acquisition
Sub shall be the by-laws of the Surviving Corporation, unless and until altered,
amended or repealed as provided in the Delaware Statute, the Charter or such
by-laws, (iii) the directors of Acquisition Sub shall be the directors of the
Surviving Corporation, unless  

                                     -2-





and until removed, or until their respective terms of office shall have expired,
in accordance with the Delaware Statute, the Charter and the by-laws of the
Surviving Corporation, as applicable and (iv) the officers of Acquisition Sub
shall be the officers of the Surviving Corporation, unless and until removed, or
until their terms of office shall have expired, in accordance with the Delaware
Statute, the Charter and the by-laws of the Surviving Corporation, as
applicable.

1.5.     Taking of Necessary Action.

         Prior to the Effective Time, the parties hereto shall do or cause to be
done all such acts and things as may be necessary or appropriate in order to
effectuate the Merger as expeditiously as reasonably practicable, in accordance
with this Agreement, the Agreement of Merger and the Delaware Statute.

1.6.     Tax-Free Reorganization.

         For Federal income tax purposes, the parties intend that the Merger be
treated as a tax-free reorganization within the meaning of Section 368(a)(1)(A) 
of the Internal Revenue Code of 1986, as amended (the "Code"), by reason of
Section 368(a)(2)(E) of the Code. Each party shall not take a position on any
tax return or reports inconsistent with this Section 1.6, and shall use their
reasonable efforts to maintain such reporting in the context of an audit. Each
party shall give the other prompt notice of any challenges or investigations
undertaken by any taxing agency in connection with such reporting, and shall
keep such other party fully informed of all aspects of such ongoing challenge or
investigation.

1.7.     Closing.

         Subject to the provisions of Article V, the closing of the Merger (the
"Closing") will take place at 1:00 p.m. (Eastern Standard Time) on December 10,
1996 (the "Closing Date"), unless another date is agreed to in writing by the
parties. The Closing shall take place at the offices of O'Sullivan Graev & Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112, unless another
place is agreed to in writing by the parties. As used herein, the term "Business
Day" shall mean any day other than a Saturday, Sunday or day on which banks are
permitted to close in the State of New York.

                                      -3-




                                   ARTICLE II

                  EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
             THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

2.1.     Total Consideration; Effect on Capital Stock.

         The entire consideration payable by Purchaser with respect to all
outstanding shares of capital stock of the Company and for all options,
warrants, rights, calls, commitments or agreements of any character to which the
Company is a party or by which it is bound calling for the issuance of shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for, or representing the right to purchase or otherwise receive,
directly or indirectly, any such capital stock, or other arrangement to acquire,
at any time or under any circumstance, capital stock of the Company or any such
other securities (the "Fully Diluted Company Shares") shall be an aggregate of
200,000 shares of Purchaser Common Stock (the "Total Purchaser Share Amount").
For purposes of the calculation of the exchange ratio for Purchaser Common Stock
under Section 2.1(c) hereof, it is assumed that the number of Fully Diluted
Company Shares is 1,500 (the "Fully Diluted Company Share Amount"). At the
Effective Time, subject and pursuant to the terms and conditions of this
Agreement and the Agreement of Merger, by virtue of the Merger and without any
action on the part of the Constituent Corporations or the holders of the capital
stock of the Constituent Corporations:

         (a) Capital Stock of Acquisition Sub. Each issued and outstanding share
of common stock, par value $.01 per share, of Acquisition Sub shall be converted
into one share of common stock, par value $.01 per share, of the Surviving
Corporation.

         (b) Cancellation of Certain Shares of Company Stock. Each share of
Company Stock that is authorized but unissued shall cease to exist and no
Purchaser Common Stock or other consideration shall be delivered in exchange
therefor.

         (c) Exchange Ratio for Company Stock. Subject to Section 2.2, each
share of Company Common Stock issued and outstanding at the Effective Time,
including all accrued and unpaid dividends thereon, shall be exchanged and
converted into the right to receive the Company Stock Fraction of a share of
Purchaser Common Stock in accordance with Section 2.2(b); provided, however,
that the aggregate number of shares of Purchaser Common Stock issuable to the
Stockholder of the Company shall be rounded to the nearest whole share and no
fractional shares of Purchaser Common Stock shall be issued in the Merger. For
convenience of reference, the shares of Purchaser Common Stock to be issued upon
the exchange and conversion of Company Common Stock in accordance with this
Section 2.1(c) are sometimes hereinafter collectively referred to as the "Merger
Shares".

                                      -4-



         (i) For purposes of this Agreement,

                  (A) The term "Company Stock Fraction" shall be equal to the
     fraction representing the ratio obtained by dividing (x) the Total 
     Purchaser Share Amount by (y) the Fully Diluted Company share Amount; and

                  (B) all calculations under this Section 2.1(c) shall be
     rounded to the nearest one billionth (.000000001).

2.2.     Escrow Deposit; Exchange of Certificates.

         (a) Escrow Deposit. At the Effective Time, Purchaser shall cause to be
deposited with the Escrow Agent a certificate together with a stock power duly
endorsed in blank for transfer on behalf of the Stockholder and the Stockholder,
by its execution and delivery of this Agreement, hereby authorizes and directs
Purchaser to make such deposit on its behalf, representing that number of Merger
Shares to be issued to the Stockholder as is set forth opposite the
Stockholder's name on Schedule I hereto (constituting in the aggregate one
hundred percent (100%) of the total number of Merger Shares being issued in the
Merger to the Stockholder (collectively, the "Escrow Shares")).

         (b) Procedure for Exchange. Immediately following the Effective Time,
Purchaser shall deliver to each holder of record, other than the Company or any
subsidiary of the Company and Purchaser or any subsidiary of Purchaser, of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock (each, an "Old
Certificate") a certificate (a "New Certificate") representing that number of
Merger Shares which such holder has the right to receive, if any, pursuant to
Section 2.1(c)(i) with respect to such Old Certificate against receipt by
Purchaser of such Old Certificate for cancellation and (ii) an executed letter
of transmittal, and the Old Certificate so surrendered shall forthwith be
canceled (the certificates representing the Escrow Shares having theretofore
been deposited on behalf of the Stockholder into escrow as contemplated by
Section 2.2(a) hereof). In the event of a transfer of ownership of shares of
Company Common Stock which is not registered on the transfer records of the
Company, a New Certificate representing the proper number of shares of Purchaser
Common Stock may be issued to a transferee if the Old Certificate representing
such Company Common Stock is presented to Purchaser, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock or other transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Old Certificate shall be deemed, on and
after the Effective Time, to represent only the right to receive upon such
surrender, New Certificates representing Merger Shares (other

                                      -5-



than the Escrow Shares) as contemplated by Section 2.1(c)(i), without interest.
All Escrow Shares shall be held by, and distributed in accordance with, the
terms and provisions of the Escrow Agreement.

         (c) No Further Ownership Rights in Company Stock. All shares of
Purchaser Common Stock issued upon the surrender for exchange of shares of 
Company Common Stock in accordance with the terms of this Article II shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Company Common Stock. If, after the Effective Time, any Old
Certificate is presented to the Surviving Corporation for any reason, such Old
Certificate shall be canceled and exchanged as provided in this Article II.

         (d) No Liability. Neither Purchaser, Acquisition Sub nor the Company
shall be liable to any holder of shares of Company Common Stock or Purchaser
Common Stock, as the case may be, for shares (or dividends or distributions with
respect thereto) of Purchaser Common Stock to be issued in exchange for Company
Common Stock pursuant to this Section 2.2, if, on or after the expiration of
six months following the Effective Date, such shares are delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

3.1.     Representations and Warranties of the Company.

         The Company and the Stockholder hereby jointly and severally represent
and warrant to Purchaser and Acquisition Sub that, except as disclosed in the
disclosure schedule dated the date hereof, certified as being such disclosure
schedule by the President of the Company and delivered by the Company to
Purchaser and Acquisition Sub simultaneously herewith (which disclosure schedule
shall reference with specificity the representations and warranties to which the
disclosures contained therein relate) (the "Company Disclosure Schedule"):

         (a) Organization; Good Standing; Qualification and Power. The Company 
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, (ii) has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as proposed to be conducted pursuant to
the Preliminary Business Plan dated September 25, 1996 (the "Business Plan") and
the Related Agreements, to enter into this Agreement and the Agreement of
Merger, to perform its obligations hereunder and thereunder, and to consummate
the

                                      -6-



transactions contemplated hereby and thereby and (iii) except as set forth on
the Company Disclosure Schedule, is duly qualified and in good standing to do
business in those jurisdictions listed in the Company Disclosure Schedule and in
all other jurisdictions in which the failure to be so qualified and in good
standing could reasonably be expected to have a material adverse effect on the
business, properties, Liabilities, assets, operations, results of operations,
condition (financial or otherwise), prospects or affairs (a "Material Adverse
Effect") of the Company. The Company has delivered to Purchaser true and
complete copies of the Charter and by-laws of the Company, in each case as
amended to the date hereof. As used herein, "Charter" shall mean, with respect
to any corporation, those instruments that at the time constitute its corporate
charter as filed or recorded under the general corporation law of the
jurisdiction of its incorporation, including the articles or certificate of
incorporation or organization, and any amendments thereto, as the same may have
been restated, and any amendments thereto (including any articles or
certificates of merger or consolidation or certificates of designation or
similar instruments which effect any such amendment) which became effective
after the most recent such restatement.

         (b) Equity Investments. The Company has never had, nor does it
currently have, any subsidiaries, nor has it ever owned, nor does it currently
own, any capital stock or other proprietary interest, directly or indirectly, in
any corporation, association, trust, partnership, joint venture or other
entity. There are no options, warrants, rights, calls, commitments or
agreements of any character to which the Company is a party or by which it is
bound calling for the issuance of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for, or representing
the right to purchase or otherwise receive, any such capital stock, or other
arrangement to acquire, at any time or under any circumstance, capital stock of
the Company or any such other securities. As used herein, a "subsidiary" of any
corporation means another corporation an amount of whose voting securities
sufficient to elect at least a majority of its Board of Directors is owned
directly or indirectly by such corporation.

         (c) Capital Stocks Securities. The authorized capital stock of the
Company consists of 1,500 shares of Company Common Stock, of which 1,500 shares
are outstanding. All outstanding shares of Company Common Stock are validly
issued and outstanding, fully paid and non-assessable and not subject to
preemptive rights. The Company Disclosure Schedule sets forth a true and
complete list of the holders of shares of Company Common Stock and the number
and class or series of such shares owned of record and beneficially by each such
holder. Except as set forth in the Company Disclosure Schedule, there are no
voting trusts, voting agreements, proxies, first refusal rights, first offer
rights, co-sale rights, transfer restrictions or other

                                      -7-



agreements, instruments or understandings (whether written or oral, formal or
informal) with respect to the voting, transfer or disposition of Company Stock
to which the Company is a party or by which it is bound, or, to the best
knowledge of the Company and the Stockholder, among or between any persons other
than the Company.

         (d) Authority; No Consents. The execution, delivery and performance by
the Company of this Agreement and the Agreement of Merger and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Company; and
this Agreement and the Agreement of Merger have been, and the Agreement of
Merger when executed and delivered by the Company will be, duly and validly
executed and delivered by the Company, and this Agreement and the Agreement of
Merger are the valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws affecting
creditors' rights and remedies generally from time to time in effect and to
general equitable principles. Neither the execution, delivery and performance of
this Agreement or the Agreement of Merger nor the consummation by the Company of
the transactions contemplated hereby or thereby nor compliance by the Company
with any provision hereof or thereof will (A) conflict with, (B) result in any
violations of, (C) cause a default under (with or without due notice, lapse of
time or both), (D) give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under or (E) result in the creation of any Encumbrance on or
against any assets, rights or property of the Company under any term, condition
or provision of (X) any instrument or agreement to which the Company is a party,
or by which the Company or any of its properties, assets or rights may be bound,
(y) any law, statute, rule, regulation, order, writ, injunction, decree, permit,
concession, license or franchise of any Governmental Authority applicable to the
Company or any of its properties, assets or rights or (z) the Company's Charter
or by-laws. Except as contemplated by this Agreement, no permit, authorization,
consent or approval of or by, or any notification of or filing with, any
Governmental Authority or other person is required in connection with the
execution, delivery and performance by the Company of this Agreement or the
Agreement of Merger or the consummation of the transactions contemplated hereby
or thereby, except for (i) the filing of the Agreement of Merger with the
Secretary of State of the State of Delaware and appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business and (ii) such other consents, waivers, authorizations, filings,
approvals and registrations which if not obtained or made would not have a
Material Adverse Effect on the Company or materially impair the ability of the
Company and the Stockholder to

                                      -8-



consummate the transactions contemplated by this Agreement or the Agreement of
Merger, including, without limitation, the Merger.

         (e) Financial Information.

             (i) The Company has previously delivered to Purchaser the unaudited
     balance sheet of the Company as at September 30, 1996 (the "Company Balance
     Sheet") and the related statements of operations, cash flow and
     stockholders' equity for the period June 25, 1996 to September 30, 1996,
     prepared by the Company (the "Company Financial Statements").

             (ii) The Company Financial Statements (A) are true and complete,
     (B) are in accordance with the books and records of the Company, and (C)
     fairly present the financial condition of the Company as at the respective
     dates thereof and the results of operations of the Company for respective
     periods then ended.

         (f) Absence of Undisclosed Liabilities. At September 30, 1996, (i) the
Company had no liability or obligation of any nature (whether known or unknown,
matured or unmatured, fixed or contingent, secured or unsecured, accrued,
absolute or otherwise ("Liability")) required to be set forth on the Company
Balance Sheet, in order for the Company Balance Sheet to fairly present the
financial condition of the Company at September 30, 1996, which was not provided
for or disclosed thereon, and (ii) all liability reserves established by the
Company and set forth thereon were adequate for all such Liabilities at
September 30, 1996. There were no material loss contingencies (as such term is
used in Statement of Financial Accounting Standards No. 5 issued by the
Financial Accounting Standards Board in March, 1975 "FAS No. 5" which were
not adequately provided for on the Company Balance Sheet as required by FAS No.
5.

         (g) Absence of Changes. Since September 30, 1996, the Company has been
operated in the ordinary course, consistent with past practice, and there has
not been:

             (i) any material adverse change in the business, assets,
     properties, Liabilities, operations, results of operations, condition
     (financial or otherwise), prospects or affairs (a "Material Adverse
     Change") of the Company;

             (ii) any damage, destruction or loss, whether or not covered by
     insurance, having or which could reasonably be expected to have a Material
     Adverse Effect;

             (iii) (A) any Liability created, assumed, guaranteed or incurred,
     or (B) any material transaction, contract or commitment entered into, by
     the Company, in the case of

                                      -9-




     either clause (A) or (B) other than in the ordinary course of business;

             (iv) any payment, discharge or satisfaction of any material
     Encumbrance or Liability by the Company or any cancellation by the Company
     of any material debts or claims or any amendment, termination or waiver of
     any rights of material value to the Company;

             (v) any declaration, setting aside or payment of any dividend or
     other distribution of any assets of any kind whatsoever with respect to any
     shares of the capital stock of the Company, or any direct or indirect
     redemption, purchase or other acquisition of any such shares of the capital
     stock of the Company;

             (vi) any stock split, reverse stock split, combination,
     reclassification or recapitalization of any Company Common Stock, or any
     issuance of any other security in respect of or in exchange for, any shares
     of Company Common Stock;

             (vii) any issuance by the Company of any shares of its capital
     stock or any debt security or securities, rights, options or warrants
     convertible into or exercisable or exchangeable for any shares of its
     capital stock or debt security;

             (viii) any license, sale, transfer, pledge, mortgage or other
     disposition of any material tangible or intangible asset (including any
     Intellectual Property Rights) of the Company, other than licenses, sales
     and transfers in the ordinary course of business;

             (ix) any termination of, or written indication of an intention to
     terminate or not renew, any material contract, license, commitment or other
     agreement between the Company and any other person;

             (x) any material write-down or write-up of the value of any asset
     of the Company, or any material write-off of any accounts receivable or
     notes receivable of the Company or any portion thereof;

             (xi) any increase in or modification of compensation payable or to
     become payable to any director, officer, employee, consultant or agent of
     the Company, or the entering into of any employment contract with any
     officer or employee;

                                      -10-



             (xii) any change in the manner in which inventory of the Company is
     valued or any increase in inventory levels in excess of historical levels
     for comparable periods;

             (xiii) any increase in or modification or acceleration of any
     benefits payable or to become payable under any bonus, pension, severance,
     insurance or other benefit plan, payment or arrangement (including, but not
     limited to, the granting of stock options, restricted stock awards or stock
     appreciation rights) made to, for or with any director, officer, employee,
     consultant or agent of the Company;

             (xiv) the making of any loan advance or capital contribution to or
     investment in any person or the engagement in any transaction with any
     employee, officer, director or stockholder of the Company, other than (A)
     advances to employees in the ordinary course of business for travel and
     similar business expenses or (B) other loans and advances in an aggregate
     amount which did not exceed $25,000 outstanding at any one time;

             (xv) any change in the accounting methods or practices followed by
     the Company or any change in depreciation or amortization policies or rates
     theretofore adopted;

             (xvi) any forward sales commitments at a price less than the
     Company's cost of sales for such commitments;

             (xvii) any termination of employment of any officer or key employee
     of the Company or any expression of intention by any officer or key
     employee of the Company to resign from such office or employment with the
     Company;

             (xviii) any amendments or changes in the Company's Charter or
     by-laws;

             (xix) any labor dispute or, to the best knowledge of the Company
     and the Stockholder, any union organizing campaign;

             (xx) the commencement of any litigation or other action by the
     Company or, to the best knowledge of the Company and the Stockholder, the
     commencement or threat of commencement of any litigation or other action
     against the Company; or

             (xxi) any agreement, understanding, authorization or proposal,
     whether in writing or otherwise, for the Company to take any of the actions
     specified in items (i) through (xx) above.

                                      -11-



         (h) Tax Matters. The Company: (i) has filed in a timely and proper
manner, consistent with then applicable laws, all Federal, state and local Tax
returns and Tax reports required to be filed by them through the Closing Date,
taking into account all appropriate extensions (the "Company Returns"), with the
appropriate governmental agencies in all jurisdictions in which Company Returns
are required to be filed and has paid all amounts shown thereon to be due; and
(ii) has paid all Taxes required to have been paid on or before the Closing
Date. All Taxes attributable to all taxable periods of the Company ending on or
before September 30, 1996, to the extent not required to have been previously
paid have been adequately provided for on the Company Balance Sheet. The Company
will not accrue a Tax liability from the date of the Company Balance Sheet up to
and including the Closing Date, other than a Tax liability accrued in the
ordinary course of business. No federal, state or local tax audits or other
administrative or court proceedings are presently pending with respect to any of
the Company Returns. The Company has not been notified by any taxing authority
that any such audit or proceeding is going to be commenced. No waivers of
statutes of limitations have been given or requested with respect to the
Company. Except as contested in good faith and disclosed in the Company
Disclosure Schedule, any deficiencies asserted or assessments (including
interest and penalties) made through the date of the Company Balance Sheet as a
result of any examination by the Internal Revenue Service or by any other taxing
authorities of any Company Return have been fully paid or are adequately
provided for on the Company Balance Sheet. No additional Taxes have been
proposed or asserted since September 30, 1996. The Company has not made an 
election to be treated as a  "consenting corporation" under Section 341(f) of
the  Code. The Company has not and will not, on or before the Closing Date,
incur any Tax liability pursuant to Section 541 of the Code. The Company has not
agreed to, nor is required to make any adjustment under Section 481(a) of the
Code by reason of a change in accounting method or otherwise. The Company is not
now, nor has it ever been, a member of a consolidated or combined group for
Federal, state or local tax purposes nor has it ever been included in a
consolidated or combined tax return for Federal, state or local tax purposes.
The Company is not a party to any agreement or contract with any "disqualified
individual" (as defined in Section 280G(c) of the Code) that, individually or
taking into account any other agreements or contracts currently in effect
between the Company and such disqualified individual, will result in the
disallowance of any deduction for any payment under such agreement or contract
as an "excess parachute payment" (as defined in Section 280G(b)(1) of the
Code). The Company and each of its predecessors have complied with all
applicable Laws relating to the payment and withholding of Taxes, and has
withheld and paid over all amounts required by Laws to be withheld and paid from
the wages and salaries of employees, and the Company is not liable for any Taxes
for failure to comply with such Laws. As used in this Agreement, "Tax" means any
of

                                      -12-



the Taxes and "Taxes" means, with respect to any entity, (A) all income taxes
(including any tax on or based upon net income, gross income, income as
specially defined, earnings, profits or selected items of income, earnings or
profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, alternative or add-on minimum
taxes, customs duties and other taxes, fees, assessments or charges of any kind
whatsoever, together with all interest and penalties, additions to tax and other
additional amounts imposed by any taxing authority (domestic or foreign) on such
entity and (B) any liability for the payment of any amount of the type described
in the immediately preceding clause (A) as a result of (i) being a "transferee"
(within the meaning of Section 6901 of the Code or any other applicable law) of
another entity, (ii) a member of an affiliated or combined group or (iii) any
contractual obligation.

             (i) Title to Assets, Properties and Rights and Related Matters. The
Company has good and marketable title to all assets, properties and interests in
properties, real, personal or mixed, reflected, respectively, on the Company
Balance Sheet or acquired after September 30, 1996 (except property sold or
otherwise disposed of since September 30, 1996, in the ordinary course of
business and accounts receivable and notes receivable paid in full subsequent to
September 30, 1996), or not so reflected therein but used or useful in the
conduct or operation of the Company's business, free and clear of all
Encumbrances, of any kind or character, except for (i) those Encumbrances set
forth in the Company Disclosure Schedule and (ii) liens for current taxes not
yet due and payable and (iii) statutory mechanics and materialmen's liens. The
assets, properties and interests in properties of the Company are in good
operating condition and repair in all material respects (ordinary wear and tear
excepted). The assets, properties and interests in properties of the Company to
be owned, leased or licensed by the Surviving Corporation at the Effective Time
shall include all assets, properties and interests in properties (real, personal
and mixed, tangible and intangible) and all rights, leases, licenses and other
agreements necessary to enable the Surviving Corporation to carry on the
business of the Company as presently conducted by the Company. As used herein,
the term "Encumbrances" shall mean and include security interests, mortgages,
liens, pledges, guarantees, charges, easements, reservations, restrictions,
clouds, equities, rights of way, options, rights of first refusal and all other
encumbrances, whether or not relating to the extension of credit or the
borrowing of money.

             (j) Real Property-Owned or Leased. The Company does not currently
own, nor has it or any of its predecessors ever owned, any real property. The
Company Disclosure Schedule contains a list and brief description of (i) all
real property leased by the

                                      -13-



Company, together with all buildings and other structures and material
improvements located on such real property (the "Leased Real Property"), and
(ii) with respect to each lease covering the Leased Real Property (collectively,
the "Leases"), (A) the name of the lessor, (B) any requirement of consent of the
lessor to assignment (including assignment by way of merger or change of
control) and (C) the termination date of the Lease. The Company is the owner and
holder of all the leasehold estates purported to be granted by each Lease and
all Leases are in full force and effect and constitute valid and binding
obligations of the Company. The Company has made available to Parent true and
complete copies of all Leases. Except as set forth in the Company Disclosure
Schedule, all improvements included in the Leased Real Property are in good
operating condition and repair in all material respects (ordinary wear and tear
excepted) and there does not exist any condition which interferes with the
economic value or use of such property and improvements.

         (k) Intellectual Property.

             (i) The Company owns free and clear of all Encumbrances, has the
     exclusive right to use, sell, license (or sublicense) transmit, broadcast,
     deliver (electronically or otherwise) and dispose of, and has the right to
     bring actions for the infringement of, all Intellectual Property Rights
     (other than the Licensed Software) necessary or required for the conduct of
     its business as currently conducted and as proposed to be conducted as
     described in the Business Plan (collectively, the "Company Rights") (which
     rights are described in the Company Disclosure Schedule).

             (ii) the execution, delivery and performance of this Agreement and
     the Agreement of Merger and the consummation of the Merger and the
     consummation of the other transactions contemplated hereby and thereby,
     will not breach, violate or conflict with any instrument or agreement
     governing any Company Rights, will not cause the forfeiture or termination
     or give rise to a right of forfeiture or termination of any Company Right
     or in any way impair the right of the Company or the Surviving Corporation
     to use, sell, license (or sublicense), transmit, broadcast, deliver
     (electronically or otherwise) or dispose of or to bring any action for the
     infringement of, any Company Right or portion thereof;

             (iii) there are no royalties, honoraria, fees or other payments
     payable by the Company to any person by reason of the ownership, use,
     license (or sublicense), sale, transmission, broadcast, delivery
     (electronically or otherwise) or disposition of the Company Rights, other
     than sales commissions paid in the ordinary course of business;

                                      -14-



             (iv) neither the manufacture, marketing, license, sale,
     transmission, broadcast, delivery (electronically or otherwise) or use of
     any product or service currently or currently proposed to be licensed,
     sold, marketed, transmitted, broadcast, delivered (electronically or
     otherwise) or used by the Company or currently under development by the
     Company, violates any license or agreement of the Company with any third
     party or infringes any common law or statutory rights of any other party,
     including, without limitation, rights relating to defamation, contractual
     rights, Intellectual Property Rights and rights of privacy or publicity;
     nor, to the best knowledge of the Company and the Stockholder, is any third
     party infringing upon, or violating any license or agreement with the
     Company relating to, any Company Right; and there is no pending or
     threatened claim or litigation contesting the validity, ownership or right
     to use, sell, license, transmit, broadcast, deliver (electronically or
     otherwise) or dispose of any Company Right, nor to the best knowledge of
     the Company and the Stockholder, is there a basis for any such claim, nor
     has the Company received any notice asserting that any Company Right or the
     proposed use, manufacture, sale, license, transmission, broadcast, delivery
     (electronically or otherwise) or disposition thereof conflicts or will
     conflict with the rights of any other party, nor, to the best knowledge of
     the Company and the Stockholder, is there any basis for any such assertion;
     and

             (v) all officers, employees and consultants of or to the Company
     have executed and delivered to and in favor of the Company an agreement
     regarding the protection of confidential and proprietary information and
     the assignment to the Company of all Intellectual Property Rights arising
     from the services performed for the Company by such persons (collectively,
     the "Confidentiality Agreements"). The Company has made and will continue
     through the Effective Time to make commercially reasonable efforts to
     safeguard and maintain the secrecy and confidentiality of, and its
     proprietary rights in, all Company Rights.

The Company Disclosure Schedule contains a true and complete list of all (A) of
the Company's patents, patent applications, trademarks, trademark applications,
trade names, service marks, service mark applications, copyrights and copyright
applications and (B) other filings and formal actions made or taken pursuant to
Federal, state, local and foreign laws by the Company to perfect or protect its
interest in the Company Rights. As used herein, the term "Intellectual Property
Rights" shall mean all industrial and intellectual property rights, including,
without limitation, patents, patent applications, patent rights, trademarks,
trademark applications, trade names, service marks, service mark applications,
copyrights, copyright applications,

                                      -15-



franchises, licenses, databases, computer programs and other computer software
(including, but not limited to, the Software), user interfaces, know-how, trade
secrets, customer lists, proprietary technology, processes and formulae, source
code, object code, algorithms, architecture, structure, display screens,
layouts, development tools, instructions, templates, marketing materials,
inventions, trade dress, logos and designs and all documentation and media
constituting, describing or relating to the foregoing.

         (1) Company Software.

             (i) The Company Disclosure Schedule sets forth a true and complete
     list and description of all software systems and applications (A) designed
     or developed by employees of the Company or by consultants or independent
     contractors on the Company's behalf (the "Owned Software") or (B) licensed
     by the Company from any third party or constituting "off-the-shelf"
     software (the "Licensed Software"), in each case that is manufactured or
     used by the Company in the operation of its business or marketed, licensed
     or sold or proposed to be marketed, licensed or sold by the Company to
     third parties (collectively, the "Software") and, in the case of Licensed
     Software, the Company Disclosure Schedule identifies each license agreement
     with respect thereto.

             (ii) All of the owned Software is original and is protected by the
     copyright laws of the United States. The Company owns the Owned Software
     free and clear of Encumbrances (other than valid third party patent
     rights of which the Company is unaware) and has not sold, assigned,
     licensed, distributed or in any other way disposed of or Encumbered the
     Owned Software other than licenses granted in the ordinary course of
     business as disclosed on the Company Disclosure Schedule.

             (iii) The Licensed Software is validly held and used by the Company
     and is currently, and after giving effect to the Merger, will be, fully
     utilizable by the Company pursuant to the applicable license agreement with
     respect thereto without the consent of or notice to any third party. To the
     best knowledge of the Company and the Stockholder, all of the Company's
     computer hardware has validly licensed software installed therein and the
     Company's use thereof does not conflict with or violate any such license.

             (iv) The Company has not knowingly altered its data, or any
     Software or supporting software that may in turn damage the integrity of
     the data, whether stored in electronic, optical or magnetic or other form.
     To the best knowledge of the Company and the Stockholder, the Software does
     not contain any viruses (the Company having employed

                                      -16-



     standard virus checkers to identify the same). The Company has furnished
     Purchaser with all existing documentation relating to the use, maintenance
     and operation of the Software, all of which, to the best knowledge of the
     Company and the Stockholder, is true and accurate.

         (m) Agreements, Etc. The Company Disclosure Schedule sets forth a true
and complete list of all written or oral contracts, agreements and other
instruments to which the Company is a party. The Company has furnished to
Purchaser true and complete copies of all such agreements listed in the Company
Disclosure Schedule and (x) each such agreement (A) is the legal, valid and
binding obligation of the Company and, to the best knowledge of the Company and
the Stockholder, the legal, valid and binding obligation of each other party
thereto, in each case enforceable in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights and remedies generally from time to time in effect
and to general equitable principles, (B) is in full force and effect and (y)
neither the Company nor, to the best knowledge of the Company, the other party
or parties thereto is or are in material default thereunder.

         (n) No Defaults. The Company has in all material respects performed all
the obligations required to be performed by it to date and is not in default or
alleged to be in default under (x) its Charter or by-laws or (ii) any material
agreement, lease, contract, commitment, instrument or obligation to which the
Company is a party or by which any of its properties, assets or rights are or
may be bound or affected, and, to the best knowledge of the Company and the
Stockholder, there exists no event, condition or occurrence which, with or
without due notice or lapse of time, or both, would constitute such a default by
it of any of the foregoing.

         (o) Litigation, Etc. There are no (i) actions, suits, claims,
investigations or legal or administrative or arbitration proceedings
(collectively, "Actions") pending, or to the best knowledge of the Company and
the Stockholder, threatened against the Company, whether at law or in equity, or
before or by any Federal, state, municipal, foreign or other governmental court,
department, commission, board, bureau, agency or instrumentality ("Governmental
Authority"), (ii) judgments, decrees, injunctions or orders of any Governmental
Authority or arbitrator against the Company or (iii) disputes with vendors. 
There are no Actions pending or, to the best knowledge of the Company and the
Stockholder, threatened, nor, to the best knowledge of the Company and the
Stockholder, any basis therefor, with respect to (A) the current employment by,
or association with, the Company, or future employment by, or association with,
Purchaser or the Surviving Corporation, of any of the present officers or
employees of or consultants to the Company (collectively, "Designated Persons"),
(B) the use, in connection with any

                                      -17-



business presently conducted or proposed to be conducted by the Company or the
Surviving Corporation, of any information, techniques or processes presently
utilized or proposed to be utilized by the Company, Purchaser, the Surviving
Corporation or any of the Designated Persons, that the Company, Purchaser, the
Surviving Corporation or any of the Designated Persons are or would be
prohibited from using as the result of a violation or breach of, or conflict
with any agreements or arrangements between any Designated Person and any other
person, or any legal considerations applicable to unfair competition, trade
secrets or confidential or proprietary information or (C) the validity,
ownership or right to use, manufacture, sell, license or dispose of, with
respect to or under any Company Rights. The Company has delivered to Purchaser
all material documents and correspondence relating to such matters referred to
in the Company Disclosure Schedule.

         (p) Accounts and Notes Receivable. All the accounts receivable and
notes receivable owing to the Company as of the date hereof constitute, and as
of the Effective Time will constitute, valid and enforceable claims arising from
bona fide transactions in the ordinary course of business, and there are no
known or asserted claims, refusals to pay or other rights of set-off against any
thereof. There is (a) no account debtor or note debtor delinquent in its payment
by more than 90 days, (b) no account debtor or note debtor that has refused (or,
to the best knowledge of the Company and the Stockholder, threatened to refuse)
to pay its obligations for any reason, (c) to the best knowledge of the Company
and the Stockholder, no account debtor or note debtor that is insolvent or
bankrupt and (d) no account receivable or note receivable which is pledged to
any third party by the Company. Except to the extent of a reserve which the
Company has established specifically for doubtful accounts receivable and notes
receivable (which reserve is set forth on the Company Balance Sheet, is
reasonable under the circumstances and is consistent with past practice), all of
the accounts receivable of the Company existing at the Closing shall be paid in
full by not later than the ninetieth (90th) day after the Closing and all of the
notes receivable shall be paid in accordance with the terms thereof.

         (q) Accounts and Notes Payable. All accounts payable and notes payable
by the Company to third parties as of the date hereof arose in the ordinary
course of business, and, except as set forth in the Company Disclosure Schedule,
there is no such account payable or note payable delinquent in its payment,
except those contested in good faith and already disclosed in the Company
Disclosure Schedule.

         (r) Compliance; Governmental Authorizations. The Company has complied 
and is presently in compliance in all material respects with all material
Federal, state, local or foreign laws, statutes, ordinances, judgments,
regulations and orders 

                                      -18-



applicable to it or its business, properties, facilities or operations
(including, by way of example and not in limitation thereof, any of the
foregoing that concern the protection of the environment or human health). The
Company has all material Federal, state, local and foreign governmental
authorizations, consents, approvals, licenses and permits necessary in the
conduct of its business as presently conducted or as proposed to be conducted as
described in the Business Plan, such authorizations, consents, approvals,
licenses and permits are in full force and effect, no violations are or have
been recorded in respect of any thereof and no proceeding is pending or, to the
best knowledge of the Company and the Stockholder, threatened to revoke or limit
any thereof. The Company Disclosure Schedule contains a true and complete list
of all such governmental licenses, authorizations, consents, approvals, permits,
orders, decrees and other compliance agreements under which the Company is
operating or bound, the Company is not in default or alleged to be in default
under any thereof and the Company has furnished to Purchaser true and complete
copies thereof. None of such authorizations, consents, approvals, licenses and
permits shall be affected in any material respect by the Merger or the
transactions contemplated hereby.

         (s) Labor Relations; Employees. Except as set forth in the Company
Disclosure Schedule, (A) the Company is not delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by them to date or amounts required to
be reimbursed to such employees, (B) upon termination of the employment of any
such employees, neither the Company, Purchaser, Purchaser, Acquisition Sub nor
the Surviving Corporation will by reason of anything done prior to the Closing
be liable to any of such employees for so-called "severance pay" or any other
payments, (C) the Company is in compliance in all material respects with all
material Federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices, terms and conditions of employment
and wages and hours, (D) no employee has notified the Company that such employee
will terminate his or her employment or engagement with the Company or the
Surviving Corporation. To the best knowledge of the Company and the Stockholder,
no employee of the Company is in violation of any term of any employment
contract, patent disclosure agreement or any other contract or agreement
relating to the relationship of such employee with the Company or any other
party because of the nature of the business conducted or proposed to be
conducted by the Company pursuant to the Business Plan or the execution and
delivery of the Confidentiality Agreement by such employee.

         (t) Employee Benefit Plans and Contracts.

             (i) The Company has no "employee benefit plan", as defined in
     Section 3(3) of the Employee Retirement Income

                                      -19-



     Security Act of 1974, as amended ("ERISA"), and no other material written
     or formal plans or agreements involving direct or indirect compensation
     (including any employment agreements entered into between the Company and
     any Employee of the Company) currently or previously maintained,
     contributed to or entered into by the Company or any ERISA Affiliate
     thereof for the benefit of any Employee or former Employee under which the
     Company or any ERISA Affiliate thereof has any present or future obligation
     or liability (the "Employee Plans"). For purposes of the preceding
     sentence, "ERISA Affiliate" shall mean any entity which is a member of (A)
     a "controlled group of corporations", as defined in Section 414(b) of the
     Code, (B) a group of entities under "common control", as defined in Section
     414(c) of the Code or (C) an "affiliated service group", as defined in
     Section 414(m) of the Code or treasury regulations promulgated under
     Section 414(o) of the Code, any of which includes the Company. For purposes
     of this Section 3.1(t), "Employee" means any common law employee,
     consultant or director of the Company.

             (ii) The Company Disclosure Schedule lists each employment,
     severance or other similar contract, arrangement or policy and each plan or
     arrangement (written or oral) providing for insurance coverage (including
     any self-insured arrangements), workers' benefits, vacation benefits,
     retirement benefits, deferred compensation, profit-sharing, bonuses, stock
     options, stock appreciation or other forms of incentive compensation or
     post-retirement insurance, compensation or benefits which (A) is not an
     Employee Plan, (B) is entered into, maintained or contributed to, as the
     case may be, by the Company, (C) covers any Employee or former Employee,
     and (D) under which the Company has any present or future obligation or
     liability. Such contracts, plans and arrangements as are described above,
     are hereinafter referred to collectively as the "Benefit Arrangements".
     Each Benefit Arrangement has been maintained in substantial compliance with
     its terms and with the requirements prescribed by any and all material
     laws, statutes, rules, regulations, orders and judgments which are 
     applicable to such Benefit Arrangements.

         (u) Certain Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due, to any 
director or employee of the Company from the Company, under any Employee Plan,
Benefit Arrangement or otherwise, (ii) materially increase any benefits
otherwise payable under any Employee Plan or the Benefit Arrangement or (iii)
result in the  acceleration of the time of payment or vesting of any such
benefits.

                                      -20-



         (v) Insurance. The Company Disclosure Schedule contains a list of all
policies of liability, theft, fidelity, fire, product liability, errors and
omissions, workmen's compensation, indemnification of directors and officers and
other similar forms of insurance held by the Company (specifying the insurer,
the amount of coverage, the type of insurance, the policy number and any pending
claims thereunder) and a history of all claims made by the Company thereunder
and the status thereof. All such policies of insurance are in full force and
effect and all premiums with respect thereto are currently paid and, to the best
knowledge of the Company and the Stockholder, no basis exists for termination of
any thereof on the part of the insurer. The amounts of coverage under such
policies of insurance are adequate for the assets and properties of the Company.
The Company has not, during the last three fiscal years, been denied or had
revoked or rescinded any policy of insurance.

         (w) Bank Accounts; Powers of Attorney. The Company Disclosure Schedule
sets forth a true and complete list of (i) all bank accounts and safe deposit
boxes of the Company and all persons who are signatories thereunder or who have
access thereto and (ii) the names of all persons, firms, associations,
corporations or business organizations holding general or special powers of
attorney from the Company and a summary of the terms thereof.

         (x) Brokers. The Company has not, nor have any of its officers,
directors, stockholders or employees, employed any broker or, finder or incurred
any liability for any brokerage fees, commissions or finders fees in connection
with the transactions contemplated hereby.

         (y) Related Transactions. Except as set forth in the Company Disclosure
Schedule, no current or former director, officer or stockholder that is an
affiliate of the Company or any associate (as defined in the rules promulgated
under the Exchange Act) thereof, is now, or since the inception of the Company
has been, (i) a party to any transaction with the Company (including, but not
limited to, any contract, agreement or other arrangement providing for the
furnishing of services by, or rental of real or personal property from, or
borrowing money from, or otherwise requiring payments to, any such director,
officer or affiliated stockholder of the Company or associate thereof), or (ii)
the direct or indirect owner of an interest in any corporation, firm,
association or business organization which is a present or potential competitor,
supplier or customer of the Company (other than non-affiliated holdings in
publicly-held companies), nor does any such person receive income from any
source other than the Company which relates to the business of, or should
properly accrue to, the Company.

         (z) Traffic/Usage. The Company Disclosure Schedule set forth the number
of page views per month and the number of visits

                                      -21-



of unique hosts per month to ParentsPlace.com, the Company's site on the World
Wide Web (the "Site"), which numbers represent such monthly page views and
unique hosts since July 16, 1995. The Company Disclosure Schedule describes the
Company's usage statistics. "World Wide Web" means the specific part of the
Internet that contains, among other things, documents written in HTML and from
which a world wide web document can provide links to other documents or sites on
the Internet.

         (aa) Business Plan. The Company has heretofore delivered to purchaser
and Acquisition Sub a true and complete copy of Business Plan. The Company
acknowledges that the Business Plan, historical financials of the Company and
site usage statistics have been material to Purchaser and Acquisition Sub in
their decision to enter into this Agreement and to enter into the transactions
contemplated hereby.

         (ab) Minute Books. The minute books of the Company provided to
Purchaser for review contain a complete summary of all meetings of and actions
by directors and stockholders of the Company from the time of its incorporation
to the date of such review and reflect all actions referred to in such minutes
accurately in all material respects.

         (ac) Board Approval. The Board of Directors of the Company has
unanimously (i) approved this Agreement and each of the Related Agreements to
which the Company is a party and the transactions contemplated hereby and
thereby, (ii) determined that the Merger is in the best interests of the
Stockholder of the Company and is on terms that are fair to such Stockholder and
(iii) recommended that the Stockholder of the Company approve the Merger in
accordance with the Delaware Statute.

         (ad) Vote Required. The affirmative vote of at least 51% of the
outstanding shares of the Company Stock approving the Merger and this Agreement
is the only vote of the holders of any class or series of the Company's capital
stock necessary to approve this Agreement and the transactions contemplated
hereby.

         (ae) Company Not an Interested Stockholder or an Acquiring Person. As
of the date of this Agreement, neither the Company nor, to the best knowledge of
the Company and the Stockholder, any of its Affiliates is an "Interested
Stockholder" of Purchaser as such term is defined in Section 203 of the Delaware
Statute or Purchaser's Charter.

         (af) Section 1203 of the California Statute Not Applicable. The
provisions of Section 1203 of the California Statute do not apply to this
Agreement, the Agreement of Merger, the Merger or the transactions contemplated
hereby or thereby.

         (ag) Company Expenses. The Schedule of Expenses being delivered at the
Closing sets forth a true, correct and complete

                                      -22-



schedule of all Company Expenses that have been incurred or paid by or on behalf
of the Company (whether or not theretofore billed) through the Effective Time,
and there are no Company Expenses other than as set forth therein.

         (ah) Officers and Directors. Set forth on Schedule 3.1(ah) is a list of
current officers and directors of the Company.

         (ai) Disclosure. Neither Section 3.1 of this Agreement (including the
Company Disclosure Schedule) nor any document, written information, written
statement, financial statement, certificate or exhibit furnished to Purchaser or
Acquisition Sub by or on behalf of the Company pursuant hereto (including,
without limitation, the Business Plan, except in such case as otherwise set
forth in the Company Disclosure Schedule), contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements or facts contained herein and therein
not misleading in light of the circumstances under which they were made. All
information and documentation requested by the Purchaser of the Company in
connection with the Purchaser's due diligence investigation of the Company has
been furnished to the Purchaser.

         (aj) Knowledge Definition. As used herein, "to the best knowledge of
the Company and the Stockholder" and like phrases shall mean and include (i)
actual knowledge and (ii) that knowledge which a prudent business person
(including the officers and directors of the Company) could have obtained in the
management of his or her business affairs after making due inquiry and
exercising due diligence with respect thereto. In connection therewith, the
knowledge (both actual and constructive) of any officer or director of the
Company shall be imputed to be the knowledge of the Company.

3.2.     Several Representations and Warranties of the Stockholder.

         The Stockholder represents and warrants to Purchaser and Acquisition
Sub with respect to himself and herself as follows:

         (a) Title; Absence of Certain Agreements. The Stockholder is the lawful
and record owner of, and has good and marketable title to the shares of Company
Common Stock set forth opposite the name of the Stockholder on Schedule II
attached hereto, with the full power and authority to vote such Company Common
Stock and transfer and otherwise dispose of such Company Common Stock, free and
clear of all Encumbrances. There are no agreements or understandings between the
Stockholder or any other person with respect to the voting, sale or other
disposition of Company Common Stock or any other matter relating to Company
Common Stock.

                                      -23-



         (b) Authority - General. The Stockholder has full and absolute power
and authority to enter into this Agreement and the Escrow Agreement being
executed and delivered by the Stockholder simultaneously herewith and this
Agreement and the Escrow Agreement is the valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors, rights and remedies generally from time to time
in effect and to general equitable principles. Neither the execution, delivery
and performance of this Agreement and the Escrow Agreement, nor the consummation
of the transactions contemplated hereby or thereby nor compliance by the
Stockholder with any of the provisions hereof or thereof will (i) (A) conflict
with, (B) result in any violations of, (C) cause a default under (with or
without due notice, lapse of time or both), (D) give rise to any right of
termination, amendment, cancellation or acceleration of any obligation contained
in or the loss of any material benefit under or (E) result in the creation of
any Encumbrance upon or against any assets, rights or property of the Company
(or against any Company Common Stock, Purchaser capital stock or common stock of
the Surviving Corporation), under any term, condition or provision of (x) any
agreement or instrument to which the Stockholder is a party, or by which the
Stockholder or any of his or its properties, assets or rights may be bound, or
(y) any law, statute, rule, regulation, order, writ, injunction, decree, permit,
concession, license or franchise of any Governmental Authority applicable to the
Stockholder or any of his or its properties, assets or rights, which conflict,
breach, default or violation or other event would prevent the consummation of
the transactions contemplated by this Agreement, the Agreement of Merger or the
Escrow Agreement. Except as specified in Section 3.1(d) hereof or otherwise
contemplated by this Agreement, no permit, authorization, consent or approval
of or by, or any notification of or filing with, any Governmental Authority or
other person is required in connection with the execution, delivery and
performance by the Stockholder of this Agreement, the Escrow Agreement or the
consummation by the Stockholder of the transactions contemplated hereby or
thereby.

         (c) Investment Representations.

             (i) The Stockholder (A) is acquiring the shares of the Purchaser
     Common Stock being issued to the Stockholder pursuant to the Merger for
     investment and for the Stockholder's own account and not as a nominee or
     agent for any other person and with no present intention of distributing or
     reselling such shares or any part thereof in any transactions that would be
     in violation of the Securities Act or any state securities or "blue-sky"
     laws, (B) has had an opportunity to ask questions of and has received
     satisfactory answers from the officers of Purchaser or persons acting on
     Purchaser's behalf concerning Purchaser

                                      -24-



     and the terms and conditions of an investment in Purchaser Common Stock,
     (C) has sufficient knowledge and experience in financial affairs and is
     capable of evaluating the risks of acquiring and holding shares of
     Purchaser Common Stock, (d) is aware of Purchaser's business affairs and
     financial condition and has acquired sufficient information about Purchaser
     to reach an informed and knowledgeable decision to acquire the shares of
     Purchaser Common Stock to be issued to him or it in the Merger, (E) can
     afford to suffer a complete loss of his or her investment in shares of
     Purchaser Common Stock and (F) understands (1) that the shares of Purchaser
     Common Stock to be issued to him or her in the Merger have not been
     registered for sale under the Securities Act or any state securities or
     "blue-sky" laws in reliance upon an exemption therefrom, which exemption
     depends upon, among other things, the bona fide nature of the investment
     intent of the Stockholder as expressed hereunder, (2) that such shares of
     Purchaser Common Stock must be held indefinitely and not sold until such
     shares are registered under the Securities Act and any applicable state
     securities or "blue-sky" laws, unless an exemption from such registration
     is available, (3) that, except as provided in Section 7.3, Purchaser is
     under no obligation to so register such shares and (4) that the
     certificates evidencing such shares will be imprinted with a legend in the
     form set forth in Section 7.3(c) that prohibits the transfer of such
     shares, except as provided in Section 7.2.

         (d) Employee - Stockholder Representation. If the Stockholder is also
an employee of the Company, to the best of the Stockholder's knowledge (i) none
of the compensation to be received by the Stockholder in connection with the
Merger will be separate consideration for, or allocable to, any of his or its
shares of Company Common Stock; (ii) none of the shares of Purchaser Common
Stock received by the Stockholder pursuant to the Merger will be separate
consideration for, or allocable to, any employment agreement between the 
Stockholder and Purchaser or the Surviving Corporation; and (iii) the
compensation to be paid to the Stockholder by Purchaser or the Surviving
Corporation will be for services actually rendered and will be commensurate with
amounts paid to third parties bargaining at arm's length for similar serices.

3.3      Representations and Warranties of Purchaser.

         Purchaser represents and warrants to the Stockholder, except as
disclosed in the disclosure schedule dated the date hereof, certified as being
such disclosure schedule by the Chief Executive Officer of the Purchaser and
delivered by the Purchaser to the Company and the Stockholder simultaneously
herewith (which disclosure schedule shall reference with specificity the
representations and warranties to which the disclosures contained therein
relate) (the "Purchaser Disclosure Schedule"):

                                      -25-



         (a) Organization; Good Standing; Qualification and Power. Each of
Purchaser and Acquisition Sub (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and (ii)
has all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as now being conducted, to
enter into this Agreement and each of the Related Agreements to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Purchaser has delivered to the
Company true and complete copies of the Charter and by-laws of each of Purchaser
and Acquisition Sub, in each case as amended to the date hereof.

         (b) Authority. The execution, delivery and performance by Purchaser of
this Agreement and the Escrow Agreement and the execution, delivery and
performance of this Agreement and the Agreement of Merger by Acquisition Sub,
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Purchaser
and Acquisition Sub, respectively. This Agreement and the Escrow Agreement are
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms; and this Agreement and the Agreement of
Merger are the valid and binding obligations of Acquisition Sub, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights and remedies generally from time to time in effect
and to general equitable principles. Neither the execution, delivery and
performance by Purchaser of this Agreement and the Escrow Agreement, the
execution, delivery and performance of this Agreement and the Agreement of
Merger by Acquisition Sub, nor the consummation of the transactions contemplated
hereby or thereby, will (A) conflict with, (B) result in any violations of, (C)
cause a default under (with or without due notice, lapse of time or both), (D)
give rise to any right of termination, amendment, cancellation or acceleration
of any obligation contained in or the loss of any material benefit under, (E)
result in the creation of any Encumbrance on or against any assets, rights or
property of Purchaser or Acquisition Sub, as the case may be, under any term,
condition or provision of (x) any instrument or agreement to which Purchaser or
Acquisition Sub is a party, or by which Purchaser or Acquisition Sub any of its
respective properties, assets or rights may be bound, (y) any law, statute,
rule, regulation, order, writ, injunction, decree, permit, concession, license
or franchise of any Governmental Authority applicable to Purchaser or
Acquisition Sub any of its respective properties, assets or rights or (z)
Purchaser's Charter or by-laws, as amended through the date hereof,
respectively, which conflict, breach, default, violation or other event would
prevent the consummation of the transactions contemplated by this Agreement, the
Escrow Agreement. Except as contemplated by this Agreement, no permit,
authorization, consent or approval of or by, or any notification of or filing
with, any Governmental Authority or other person is

                                      -26-



required in connection with the execution, delivery and performance by Purchaser
of this Agreement or the Escrow Agreement or the execution, delivery and
performance by Acquisition Sub of this Agreement and the Agreement of Merger or
the consummation of the transactions contemplated hereby or thereby, except for
(i) the filing with the SEC of such reports and information under the Securities
Act, and the rules and regulations promulgated by the SEC thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby, (ii) the filing of such documents with, and the obtaining of such orders
from, various state securities and blue-sky authorities as are required in
connection with the transactions contemplated hereby, (iii) the filing of the
Agreement of Merger with the Secretary of State of the State of Delaware and
(iv) such other consents, waivers, authorizations, filings, approvals and
registrations which if not obtained or made would not have a Material Adverse
Effect on Purchaser or materially impair the ability of Purchaser to consummate
the transactions contemplated by this Agreement, including, without limitation,
the Merger.

         (c) Litigation. Except as set forth in the Purchaser Disclosure
Schedule, there is no claim, action, suit, litigation, proceeding, arbitration,
or, to the knowledge of Purchaser, investigation of any kind to which Purchaser
is a party, at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the knowledge of Purchaser, threatened
against Purchaser, except for claims, suits, litigations, proceedings,
arbitrations or investigations which individually or in the aggregate cannot
reasonably be expected to have a material adverse effect on Purchaser's
operations or financial condition; and (ii) Purchaser is not subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of Purchaser, continuing
investigation by, any Governmental Authority, or any judgment, order, writ,
injunction, decree or award of any Governmental Authority or arbitrator,
including, without limitation, cease-and-desist or other orders, except for such
matters which are not reasonably expected to have a material adverse effect on
Purchaser's operations or financial condition.

         (d) Capital Stock.

             (i) The authorized capital stock of Purchaser consists of 
     25,000,000 shares of Purchaser Common Stock and 15,000,000 shares of 
     Preferred Stock, $.0005 par value (the "Preferred Stock"), of which 
     1,000,000 shares have been designated as Series A Preferred Stock, $.0005 
     par value (the "Series A Preferred Stock"), 5,669,846 shares have been 
     designated as Series B Preferred Stock, $.0005 par value (the "Series B 
     Preferred Stock") and 300,000 shares have been designated as Series B-1 
     Preferred Stock, $.0005 par value (the "Series B-1 Preferred Stock"). On 
     the date

                                      -27-



     hereof, (i) 3,250,005 shares of Common Stock are issued and outstanding,
     (ii) 1,000,000 shares of Series A Preferred Stock are issued and
     outstanding, (iii) 4,477,746 shares of Series B Preferred Stock are issued
     and outstanding, (iv) 300,000 shares of Series B-1 Preferred Stock are
     issued and outstanding, (v) 300,000 shares of Series B Preferred Stock are
     reserved for issuance upon conversion of shares of Series B-1 Preferred
     Stock, (vi) 120,000 shares of Series B Preferred Stock are reserved for
     issuance in accordance with a Series B Preferred Stock Purchase Agreement
     dated as of May 6, 1996, among Purchaser and the other parties thereto,
     (vii) 852,100 shares (the "Warrant Shares") of Series B Preferred Stock are
     reserved for issuance upon exercise or exchange of (A) the stock
     subscription warrants dated September 19, 1995 issued to and held by
     America Online, Inc. ("AOL") and (B) the stock subscription warrants dated
     May 6, 1996 issued to and held by AOL, (viii) 1,000,000 shares of Common
     Stock are reserved for conversion of shares of Series A Preferred Stock,
     (ix) 4,897,746 shares of Common Stock are reserved for conversion of Series
     B Preferred Stock and Series B-1 Preferred Stock, (ix) 852,100 shares of
     Common Stock are reserved for conversion of the Warrant Shares and (x)
     1,550,000 shares of Common Stock are reserved for future issuance upon
     exercise of options or as restricted stock granted to employees of
     Purchaser. All outstanding shares of Purchaser Common Stock are validly
     issued, fully paid and non-assessable and not subject to preemptive rights.
     Purchaser has duly authorized and reserved for issuance the Merger Shares,
     and, when issued in accordance with the terms of Article II, the Merger
     Shares will be validly issued, fully paid and nonassessable and free of
     preemptive rights. Purchaser directly owns all the outstanding shares of
     capital stock of Acquisition Sub, and all of such shares are validly
     issued, fully paid and nonassessable and not subject to preemptive rights.

             (ii) Except as set forth in paragraph (i) above and on the 
     Purchaser Disclosure Schedule, immediately after the Closing, there are no
     outstanding (A) securities convertible into or exchangeable for shares of
     capital stock or other securities of the Company, (B) options, warrants,
     or other rights to purchase or otherwise acquire from the Company shares
     of such capital stock, or securities convertible into or exchangeable for
     shares of such capital stock, or (iii) contracts, agreements or commitments
     relating to the issuance by the Company of any shares of such capital
     stock, any such convertible or exchangeable securities, or any such
     options, warrants or other rights. On the date hereof and in accordance
     with the Certificate of Incorporation of Purchaser, as amended and in
     effect on the date hereof, each one share of Preferred Stock is convertible
     into one share of Common Stock.

                                      -28-



         (e) Brokers. Neither Purchaser nor any of its officers, directors or
employees have employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated hereby.

         (f) Tax-Free Reorganization

             (i) Prior to the Merger, Purchaser will be in Control of
     Acquisition Sub. As used in this Agreement, "Control" shall have the
     meaning found in Section 368(c) of the Code ("Control").

             (ii) Purchaser has no present plan or intention to cause the
     Company to issue additional shares of its stock, or to take any other
     action, that would result in Purchaser ceasing to Control the Company.

             (iii) Purchaser has no present plan or intention to reacquire any
     of the Merger Shares issued pursuant to the Merger (other than to the
     extent contemplated by the provisions of Article VI hereof).

             (iv) Neither Purchaser nor Acquisition Sub is or will be at the
     Effective Time in investment company with the meaning of Section 368(a)
     (2)(F)(iii) and (iv) of the Code.

             (v) Neither Purchaser nor Acquisition Sub is, or will be at the
     Effective Time, under the jurisdiction of a court in Title 11 or similar
     case within the meaning of Section 368(a)(3)(A) of the Code.

             (vi) Purchaser formed Acquisition Sub solely for the purpose of
     effecting the Merger, and, at all times prior to the Effective Time,
     Acquisition Sub has not conducted any business or investment activities and
     will have no liabilities other than in the ordinary course of business
     (other than as related to the consummation of the transaction contemplated
     thereby).

             (vii) Purchaser has no present plan or intention to (A) liquidate
     the Company, to merge the Company with or into another corporation,
     including the Purchaser or its affiliates, to sell, distribute, or
     otherwise dispose of the capital stock of the Company, except for transfers
     of stock to corporations controlled by Purchaser, as described in both
     Section 368(a)(2)(C) of the Code or Treasury Regulation Section
     1.368-2(j)(4), or (B) cause the Company to sell or otherwise dispose of
     any of its assets or of any of the assets acquired from Acquisition Sub in
     the Merger, except for dispositions made in the ordinary course of business
     or transfers of assets to a corporation controlled by the

                                      -29-



     Company, as described in both Section 368(a)(2)(C) and Treasury Regulation
     Section 1.368-2(j)(4).

             (viii) Purchaser has a current intention to directly or indirectly
     continue the historic business of the Company or use a significant portion
     of its historic business assets in a business.

                                   ARTICLE IV

                          CLOSING ACTIONS, DELIVERABLES

4.1.     Actions Being Taken At Or Prior To Closing.

         The following actions are being taken at or prior to the Closing:

         (a) Stockholder Approval; Agreement of Merger. This Agreement and the
Merger shall have been duly and validly approved and adopted by the stockholders
of the Company in accordance with the Delaware Statute and the Company's
Charter and By-laws, and the Agreement of Merger shall have been executed and
delivered by Acquisition Sub and the Company and filed with and accepted by the
Secretary of State of the State of Delaware.

         (b) Approvals. All authorizations, consents, orders or approvals of, or
declarations or filings with or expiration of waiting periods imposed by any
Governmental Authority necessary for the consummation of the transactions
contemplated hereby shall have been obtained or made or shall have occurred.

4.2.     Deliverables To Purchaser and Acquisition Sub.

         The following documents and other items are being delivered to the
Purchaser and Acquisition Sub at the Closing:

         (a) Non-Competition Agreements. Each of Cohen and Needleman, in their
prospective capacity as an employee of Purchaser effective immediately upon the
Closing, is executing and delivering an agreement with Purchaser, effective as
of the Effective Time, in the form of Exhibit B attached hereto (the "Non-
Competition Agreements"), providing for, among other things, non-disclosure of
confidential information and restrictions upon such person from competing with
the Surviving Corporation and Purchaser as provided therein.

         (b) Opinion of the Company's and the Stockholder's Counsel. A favorable
opinion dated the Closing Date is being delivered by Tomlinson, Zisko, Morosoli
& Maser, LLP ("TZM&H"),

                                      -30-



counsel to the Company and the Stockholder, in form and substance reasonably
satisfactory to Purchaser and Acquisition Sub.

         (c) Consents and Approvals. Duly executed copies of all consents and
approvals contemplated by this Agreement or the Company Disclosure Schedule, in
form and substance satisfactory to Purchaser and Acquisition Sub, are being
delivered by the Company.

         (d) Government Consents, Authorizations, Etc. Copies of all consents,
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are required for or in connection with the
execution and delivery by the Company of this Agreement and the Stockholders'
Agreements and the consummation by the Company of the transactions contemplated
hereby, are being delivered by the Company.

         (e) Company Expenses. A true, correct and complete schedule (the
"Schedule of Expenses") of all Company Expenses paid or incurred by or on behalf
of the Company through the Closing Date, accompanied by a certificate signed by
the President of the Company certifying the accuracy and completeness thereof,
is being delivered by the Company; and the Company is furnishing evidence
satisfactory to Purchaser and Acquisition Sub that the Stockholder has either
paid directly or contributed to the Company in cash an amount equal, in the
aggregate, to the amount of Company Expenses that exceed the amount of Company
Expenses to be paid by Purchaser pursuant to Section 5.4.

         (f) Company Expenses Release. A written instrument in form and
substance reasonably satisfactory to Purchaser and Acquisition Sub is being
delivered by each third party identified on the Schedule of Expenses (i)
acknowledging receipt by each such party of full payment of all fees and
expenses of such party constituting Company Expenses and (ii) releasing
Purchaser, Acquisition Sub, the Surviving Corporation and their Affiliates from
any liabilities or obligations in respect of the payment of any fees and
expenses that are or may be characterized as Company Expenses.

         (g) Resignation of Directors. Resignations are being delivered by each
of the directors of the Company immediately prior to the Effective Time,
effective as of the Effective Time.

         (h) Escrow Agreement. The Stockholder and Purchaser are executing and
delivering an Escrow Agreement in the form of Exhibit C attached hereto (the
"Escrow Agreement"), securing the indemnification obligations of the Stockholder
pursuant to Article VI hereof.

         (i) Officers' Certificates. Certain officers, certificates are being
delivered by the Company.

                                      -31-



         (j) Conversion, Exercise and Exchange of Certain Securities into
Capital Stock of the Company. All outstanding rights, options (other than
employee stock options), warrants and other securities (whether debt or equity),
directly or indirectly exercisable or exchangeable for, or convertible into,
shares of capital stock of the Company shall have either been exercised or
exchanged for or converted into capital stock of the Company or canceled and
terminated effective as of the date hereof.

         (k) Termination Agreement. Cohen and Needleman are each executing and
delivering a Termination Agreement in the form of Exhibit D attached hereto
(each a "Termination Agreement"), providing for the termination of the
Indemnification Agreements each dated as of June 26, 1996, by and between the
Company and each of Cohen and Needleman.

         (l) Termination of Burst!Media Agreement. The Company is executing and
delivering an agreement in the form of Exhibit E attached hereto, terminating
the Agreement dated June 10, 1996, between the Company and Burst!Media.

         (m) Releases. The Company is delivering to Purchaser releases in the
form of Exhibit F attached hereto executed by each person or entity that has
provided content or services to the Company for use by the Company in its
ParentsPlace.com service.

4.3.     Deliverables to the Stockholder.

         The following documents and other items are being delivered to the
Stockholder at the Closing:

         (a) Opinion of Counsel to Purchaser and Acquisition Sub. A favorable
opinion dated the Closing Date is being delivered by O'Sullivan Graev
& Karabell, LLP, counsel to Purchaser and Acquisition Sub, in form and substance
reasonably satisfactory to the Company.

         (b) Government Consents, Authorizations, Etc. Copies of all consents,
authorizations, orders or approvals of, and filings or registrations with, any
Governmental Authority which are required for or in connection with the
execution and delivery by Purchaser and Acquisition Sub of this Agreement and
the Related Agreements and the consummation by Purchaser and Acquisition Sub of
the transactions contemplated hereby or thereby, are being delivered by
Purchaser.

         (c) Payment of Expenses. Evidence satisfactory to the Stockholder of
payment by Purchaser or Surviving Corporation of the Company Expenses in
accordance with the first sentence of Section 5.4, is being delivered by
Purchaser.

                                      -32-



         (d) Representation Letter, Consents and Certificates. Certain Officers
certificates are being delivered by Purchaser

         (e) Option Agreements. Purchaser is executing and delivering an option
agreement with each of Cohen and Needleman (each, an "Option Agreement" and
collectively, the "Option Agreements"), effective as of the Effective Time, in
substantially the form previously approved by the Board of Directors of
Purchaser, providing for the grant of Incentive Stock Options of Purchaser to
each of Cohen and Needleman.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

5.1.     Compliance With the Code.

         The parties shall comply with Section 1060(e) of the Code and any
regulations promulgated thereunder, as applicable.

5.2.     Restriction on Transfer.

         (a) The shares of Purchaser Common Stock to be issued to the
Stockholder at the Effective Time pursuant to the Merger and any shares of
capital stock or other securities received with respect thereto (collectively,
the "Restricted Securities") shall not be sold, transferred, assigned, pledged,
encumbered or otherwise disposed of (each, a "Transfer") except upon the
conditions specified in this Section 5.2, which conditions are intended to
insure compliance with the provisions of the Securities Act. The Stockholder
shall observe and comply with the Securities Act and the rules and regulations
promulgated by the SEC thereunder as now in effect or hereafter enacted or
promulgated, and as from time to time amended, in connection with any Transfer
of Restricted Securities beneficially owned by the Stockholder.

         (b) Each certificate representing Restricted Securities issued to the
Stockholder and each certificate for such securities issued to subsequent
transferees of any such certificate shall (unless otherwise permitted by the
provisions of Sections 5.2(c) and 5.2(d) hereof) be stamped or otherwise
imprinted with a legend in substantially the following form:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
         BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
         OR ANY APPLICABLE STATE SECURITIES OR "BLUE-SKY" LAWS.
         THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
         ASSIGNED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
         IN THE ABSENCE OF SUCH REGISTRATION OR AN

                              -33-



         EXEMPTION THEREFROM. ADDITIONALLY, THE TRANSFER OF THESE
         SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN
         SECTION 5.2 OF THE AGREEMENT AND PLAN OF REORGANIZATION
         DATED AS OF DECEMBER 10, 1996 AMONG iVILLAGE, INC., PP
         ACQUISITION CORPORATION, PARENTSPLACE.COM, INC. AND THE
         OTHER SIGNATORIES THERETO AND NO TRANSFER OF THESE
         SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL SUCH
         CONDITIONS HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF
         CERTAIN OF SUCH CONDITIONS, iVILLAGE, INC. HAS AGREED TO
         DELIVER TO THE HOLDER HEREOF A NEW CERTIFICATE, NOT
         BEARING THIS LEGEND, FOR THE SECURITIES REPRESENTED
         HEREBY REGISTERED IN THE NAME OF THE HOLDER HEREOF.
         COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
         WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
         CERTIFICATE TO THE SECRETARY OF iVILLAGE, INC."

         (c) The Stockholder agrees, prior to any Transfer of Restricted
Securities, to give written notice to Purchaser of the Stockholder's intention
to effect such Transfer and to comply in all other respects with the provisions
of this Section 5.2. Each such notice shall describe the manner and
circumstances of the proposed Transfer and shall be accompanied by the written
opinion, addressed to Purchaser, of counsel for the holder of such Restricted
Securities, stating that in the opinion of such counsel (which opinion and
counsel shall be reasonably satisfactory to Purchaser) such proposed transfer
does not involve a transaction requiring registration or qualification of such
Restricted Securities under the Securities Act or the securities or "blue-sky"
laws of any relevant state of the United States; provided; however, that no such
opinion of counsel shall be necessary for a Transfer pursuant to Rule 144. The
holder thereof shall thereupon, with the written consent of Purchaser, be
entitled to Transfer such Restricted Securities in accordance with the terms of
the notice delivered by it to Purchaser. Each certificate or other instrument
evidencing the securities issued upon the Transfer of any such Restricted
Securities (and each certificate or other instrument evidencing any
untransferred balance of such Restricted Securities) shall bear the legend set
forth in Section 5.2(b) unless (x) in such opinion of counsel of Purchaser
registration of any future Transfer is not required by the applicable provisions
of the Securities Act or (y) Purchaser shall have waived the requirement of such
legends. No Stockholder shall Transfer any Restricted Securities until such
opinion of counsel has been given (unless waived by Purchaser or unless such
opinion is not required in accordance with the provisions of this Section
5.2(c)).

         (d) Notwithstanding the foregoing provisions of this Section 5.2, the
restrictions imposed by this Section 5.2 upon the transferability of Restricted
Securities shall cease and terminate when (i) any such shares are sold or
otherwise disposed of pursuant to an effective registration statement under the

                                      -34-



Securities Act or as otherwise contemplated by Section 5.2 (c) and, pursuant to
Section 5.2 (c) , the securities so transferred are not required to bear the
legend set forth in Section 5.2(c) or (ii) the holder of such Restricted
Securities has met the requirements for Transfer of such Restricted Securities
pursuant to subparagraph (k) of Rule 144. Whenever the restrictions imposed by
this Section 5.2 shall terminate, as herein provided, the holder of Restricted
Securities as to which such restrictions have terminated shall be entitled to
receive from Purchaser, without expense, a new certificate not bearing the
restrictive legend set forth in Section 5.2(b) and not containing any other
reference to the restrictions imposed by this Section 5.2.

         (e) The Stockholder understands and agrees that Purchaser, at its
discretion, may cause stop transfer orders to be placed with its transfer agent
with respect to certificates for Restricted Securities owned by the Stockholder
but not as to certificates for such shares of Purchaser Common Stock as to which
the legend set forth in paragraph (b) of this Section 5.2 is no longer required
because one or more of the conditions set forth in Section 5.2(d) shall have
been satisfied.

5.3.     Piggyback Registration.

         (a) As used in this Section 5.3, the following terms shall have the
following meanings:

             (i) "Other Shares" shall mean at any time those shares of Purchaser
     Common Stock that do not constitute Primary Shares or Registrable Shares.

             (ii) "Primary Shares" shall mean at any time the authorized but
     unissued shares of Purchaser Common Stock or shares of Purchaser Common
     Stock held in Treasury.

             (iii) "Registrable Shares" shall mean the shares of Purchaser
     Common Stock that constitute Restricted Securities that are held by any
     Stockholder and that have not theretofore been sold to the public pursuant
     to a registration statement under the Securities Act or pursuant to Rule
     144.

             (iv) "Rule 144" shall mean Rule 144 promulgated under the
     Securities Act, as amended from time to time, or any successor or
     complementary provision thereto.

         (b) Subject to the provisions set forth below and to the last sentence
of this Section 5.3(b), if Purchaser at any time following six months after an
initial underwritten public offering of shares of Purchaser Common Stock
proposes for any reason to register Primary Shares under the Securities Act
(other than on Form S-4 or Form S-8 promulgated under the Securities Act

                                      -35-



or any successor forms thereto), it shall promptly give written notice to the
Stockholder of its intention so to register such shares and, upon the written
request, given within 30 days after delivery of such notice by Purchaser, of the
Stockholder to include in such registration Registrable Shares (which request
shall specify the number of Registrable Shares proposed to be included in such
registration by the Stockholder), Purchaser shall use its best efforts to cause
all such Registrable Shares to be included in such registration on the same
terms and conditions as the securities otherwise being sold in such
registration; provided, however, that the rights granted to the Stockholder
hereunder shall be subject at all times to the contractual rights of any third
parties now or hereafter granted; further provided, however, that if the 
managing underwriter in the good faith exercise of its reasonable judgment
advises Purchaser in writing that the inclusion of all Registrable Shares
proposed to be included in such registration would interfere with the successful
marketing (including pricing) of Primary Shares or Other Shares proposed to be
registered by Purchaser, then the number of Primary Shares, Registrable Shares
and Other Shares proposed to be included in such registration shall be included
in the following order:

             (i) first, the Primary Shares and Other Shares.and

             (ii) second, the Registrable Shares requested to be included in
     such registration, pro rata based upon the number of Registrable Shares
     proposed to be included in such registration.

If any registration hereunder is to be underwritten, Purchaser and the
Stockholder holding Registrable Shares to be registered by such registration
statement shall, as a condition to participating in such registration, enter
into an underwriting agreement in customary form with a managing underwriter
selected for such underwriting by Purchaser. If the Stockholder elects not to
include any or all of its Registrable Shares in any registration statement filed
by the Purchaser, the Stockholder shall nevertheless continue to have the right
to include any of its Registrable Shares in any subsequent registration
statement or registration statements as may be filed by the Purchaser with
respect to offerings of its securities, subject to the terms and conditions set
forth in this Section 5. Anything to the contrary contained herein
notwithstanding, Purchaser shall not be required to take any action to effect
any such registration, qualification or compliance pursuant to this Section 5.3
after Purchaser has effected four (4) such requested registrations pursuant to
this Section 5.3 in which the Stockholder has been given the opportunity to
participate.

         (c) In consideration for Purchaser agreeing to its obligations under
this Section 5.3, if Purchaser shall include Registrable Shares in a
registration pursuant to Section 5.3(b))

                                      -36-



for the sale thereof to the public, the Stockholder agrees, upon the request of
the managing underwriter of such registration, to enter into an agreement not to
sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of, any Registrable Shares, other than those Registrable
Shares actually included in such registration pursuant to Section 5.3(b) and
sold to the public thereunder, without the prior written consent of the
underwriters which period shall not begin more than 10 days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall not last more than 180 days after the effective
date of such registration statement; provided, that the Stockholder shall be
bound by this provision only if, and to the extent, the executive officers of
Purchaser owning Purchaser Common Stock shall be bound by such a provision.

         (d) In connection with any registration pursuant to this Section 5.3,
Purchaser shall in its sole discretion determine the terms and conditions of
such registration, including, without limitation, the timing thereof; the scope
of the offering contemplated thereby (i.e., whether the offering shall be a
combined primary offering and a secondary offering or limited only to a
secondary offering); the manner of distribution of Registrable Shares; the
period of effectiveness of registration for permissible sales of Registrable
Securities thereunder consistent with the plan of distribution agreed upon by
Purchaser and the Stockholder; and all other material aspects of the
registration and the registration process. In connection therewith, Purchaser
may require that any such registration be underwritten, in which event the
managing underwriter shall be selected by Purchaser.

         (e) (i) In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, Purchaser shall indemnify
and hold harmless the Stockholder against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof), to which the
Stockholder may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the registration statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein or otherwise filed with the
Commission, any amendment or supplement thereto or any document incident to
registration or qualification of any Registrable Shares, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or, with respect to any prospectus, necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
or any violation by Purchaser of the Securities Act or state securities

                                      -37-



or "blue-sky" laws applicable to Purchaser and relating to action or inaction
required of Purchaser in connection with such registration or qualification
under state securities or "blue-sky" laws; provided, however, that Purchaser
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in said
registration statement, preliminary prospectus, final prospectus, amendment,
supplement or document incident to registration or qualification of any
Registrable Shares in reliance upon and in conformity with written information
furnished to Purchaser by the Stockholder with respect to information regarding
such Stockholder for use in the preparation thereof.

              (ii) in connection with any registration of Registrable Shares
under the Securities Act pursuant to this Agreement, the Stockholder shall
indemnify and hold harmless (in the same manner and to the same extent as set
forth in the preceding paragraph of this Section 5.3(d)) Purchaser, each
director of Purchaser, each officer of Purchaser who shall sign such
registration statement, each underwriter, broker or other person acting on
behalf of Purchaser and each person who controls any of the foregoing persons
within the meaning of the Securities Act with respect to any statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Registrable Share, if such statement or omission was made
in reliance upon and in conformity with written information furnished to
Purchaser or such underwriter by such Stockholder for use in connection with the
preparation of such registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document; provided that the maximum
liability in respect of such indemnification shall be limited, in the case of
the Stockholder, to an amount equal to the net proceeds received by the
Stockholder from the sale of such Registrable Shares effected pursuant to such
registration statement.

         (f) The Stockholder shall furnish to Purchaser such written information
regarding the Stockholder as Purchaser shall reasonably deem necessary in
connection with any registration, qualification or compliance contemplated by
this Section 5.3.

         (g) Anything to the contrary contained herein notwithstanding, the
rights of the holders of Registrable Shares and the obligations of Purchaser
under Section 5.3(b) hereof shall terminate and be of no further force or
effect (i) as to any holder of Registrable Shares, at such time as all
Registrable Shares held by such holder may be sold under Rule 144 during any
three-month period and (ii) as to all holders of Registrable Shares, on the
third anniversary of the Effective Date.

                                      -38-



         (h) The Stockholder may not assign its rights under this Section 5.3 to
any purchaser or transferee of Restricted Securities without the prior written
consent of Purchaser; provided, however, that any such purchaser or transferee
shall, as a condition to the effectiveness of such assignment if consented to by
Purchaser, be required to execute a counterpart to this Agreement agreeing to be
treated as a Stockholder hereunder solely for purposes of this Section 5.3,
whereupon such purchaser or transferee shall have the benefits of, and shall be
subject to the restrictions contained in, this Section 5.3.

         (i) All expenses incurred by Purchaser in complying with this Section
5.3, including, without limitation, all registration and filing fees (including
all expenses incident to filing with the NASD), fees and expenses of complying
with securities and "blue-sky" laws, printing expenses and fees and expenses of
Purchaser's counsel and accountants, shall be borne by Purchaser; provided,
however, that all fees and expenses of counsel for the Registrable Shares or any
of them and all underwriting taxes and selling commissions applicable to the
Registrable Shares, and any expenses and fees that would not have been incurred
by Purchaser but for inclusion of Registrable Shares in such registration, shall
not be borne by Purchaser but shall be borne by the holders of Registrable
Shares pro rata based on the number of Registrable Shares so registered.

5.4.     Payment of Certain Fees and Expenses.

         At the Closing, Purchaser is paying, or causing the Surviving
Corporation to pay, in cash, against presentation of statements therefore, to
TZM&M, counsel to the Company, $19,000 in respect of legal fees and expenses
incurred in connection with the Merger. Except as expressly provided in this
Section 5.4, neither Purchaser, Acquisition Sub, the Company nor the Surviving
Corporation shall pay or in any respect be liable for any Company Expenses.

5.5.     Disclosure of Information; Non-Competition.

         Each of Cohen and Needleman acknowledges and recognizes that the
Subject Business has been conducted or is currently planned to be conducted by
the Company throughout the world, and further acknowledge and recognize the
highly competitive nature of the industry in which the Subject Business is
involved and that, accordingly, in consideration of the premises contained
herein, the consideration to be received hereunder and the direct and indirect
benefits to each of Cohen and Needleman of the transactions contemplated hereby,
and in consideration of and as an inducement to Purchaser and Acquisition Sub to
enter into to this Agreement and to consummate the transactions, contemplated
hereby:

                                      -39-



         (b) "Event of Indemnification shall mean and include (i) the untruth,
inaccuracy or breach of any representation or warranty of the Company or the
Stockholder (including the underlying facts and circumstances related thereto)
contained in Section 3.1, or 3.2 any Exhibit hereto or any document delivered in
connection herewith, (ii) the breach of covenants and agreements by the
Stockholder, (iii) any claim by any person or entity heretofore providing
content or services to the Company for use by the Company in its ParentsPlace
service with respect to agreement for, or authority to use any such content or
services.

         (c) "Indemnified Persons" shall mean and include Purchaser, Acquisition
Sub and the Surviving Corporation and their respective Affiliates (but shall not
include the Stockholder), successors and assigns, and the respective officers
and directors of each of the foregoing.

         (d) "Losses" shall mean any and all losses, claims, damages,
liabilities, expenses (including reasonable attorneys' and accountants' fees),
assessments and Taxes sustained, suffered or incurred by any Indemnified Person
arising from or in connection with any such matter which is the subject of
indemnification under Section 6.2 hereof.

6.2.     Indemnification Generally.

         Subject to Section 6.6 hereof, the Stockholder shall indemnify the
Indemnified Persons for, and hold each of them harmless from and against, any
and all Losses arising from or in connection with any Event of Indemnification.
The sole and exclusive remedy for an Event of Indemnification shall be (i) by
recourse to the Escrow Fund (as defined in the Escrow Agreement), (ii) by
cancellation of up to fifty percent (50%) of the options granted to each of
Needleman and Cohen pursuant to the Option Agreements and (iii) by recourse to
up to fifty percent (50%) of the shares of Purchaser Common Stock hereafter
acquired by either Needleman or Cohen upon exercise of their respective options
pursuant to their respective Option Agreements; provided, however, that in no
event shall more than fifty percent of the shares of Purchaser Common Stock
(subject to equitable adjustment for stock splits, dividends, combinations,
reclassifications and like occurrences) referred to in clauses (i) and (ii) 
above, in the aggregate (or options therefor) be canceled and/or transferred in
connection with this Section 6.2. An indemnification pursuant to this Section
6.2 shall be effected solely in accordance with the terms and provisions of the
Escrow Agreement and the Option Agreements, as the case may be, and shall be
subject to the qualifications and limitations set forth therein (it being
understood that nothing contained in this Section 6.2 shall in any way limit,
impair, modify or otherwise affect the rights of the Indemnified Persons
(including rights available under the Securities Act or the Exchange Act), (A)
to

                                      -42-



bring any claim, demand, suit or cause of action otherwise available to the
Indemnified Persons based upon an allegation or allegations that the Company or
the Stockholder, or either of them, had an intent to defraud or made a willful
misrepresentation or willful omission of a material fact in connection with this
Agreement, the Agreement of Merger or the Escrow Agreement and the transactions
contemplated hereby or thereby or (B) to enforce any judgment of a court of
competent jurisdiction which finds or determines that the Company or the
Stockholder, or either of them, had an intent to defraud or made a willful
misrepresentation or omission of a material fact in connection with this
Agreement or the Agreement of Merger and the transactions contemplated hereby or
thereby).

6.3.     Assertion of Claims.

         No claim shall be brought under Section 6.2 hereof unless the
Indemnified Persons, or any of them, at any time prior to the applicable
Survival Date, if any, give the Stockholder (a) written notice of the existence
of any such claim, specifying the nature and basis of such claim and the amount
thereof, to the extent known or (b) written notice pursuant to Section 6.4 of
any third party claim, the existence of which might give rise to such a claim.
Upon the giving of such written notice as aforesaid prior to the applicable
Survival Date, the Indemnified Persons, or any of them, shall have the right to
commence legal proceedings subsequent to the Survival Date for the enforcement
of their rights under Section 6.2 hereof.

6.4.     Notice and Defense of Third Party Claims.

         The obligations and liabilities of a Stockholder with respect to Losses
resulting from the assertion of liability by third parties (each, a "Third Party
Claim") shall be subject to the following terms and conditions:

         (a) The Indemnified Persons shall promptly (and, in any event, within
five Business Days) give written notice to the Stockholder of any Third Party
Claim which might give rise to any Loss by the Indemnified Persons, stating the
nature and basis of such Third Party Claim, and the amount thereof to the extent
known. Such notice shall be accompanied by copies of all relevant documentation
with respect to such Third Party Claim, including, without limitation, any
summons, complaint or other pleading which may have been served, any written
demand or any other document or instrument.

         (b) The Indemnified Persons shall assume the defense of any Third Party
Claims with counsel of their own choosing, which counsel shall be reasonably
satisfactory to the Stockholder, and shall act reasonably and in accordance with
their good faith business judgment in handling such Third Party Claims and
shall not effect any settlement without the written consent of the

                                      -43-



Stockholder, which consent shall not unreasonably be withheld or delayed. The
Stockholder shall have the right to participate at their own expense in the
defense of any Third Party Claims. The Stockholder and the indemnified Persons
shall make available to each other and their counsel and accountants all books
and records and information relating to any Third Party Claims, keep each other
fully apprised as to the details and progress of all proceedings relating
thereto and render to each other such assistance as may be reasonably required
to ensure the proper and adequate defense of any and all Third Party Claims.

6.5.     Survival of Representations and Warranties.

         Subject to the further provisions of this Section 6.5, the respective
representations and warranties of the parties set forth in Sections 3.1, 3.2 and
3.3 shall survive the Effective Time until the second anniversary following the
Closing Date, except that the representation and warranty contained in (a)
sections 3.2(a), and 3.2(d) shall not so terminate but shall survive the
Closing indefinitely and (b) Section 3.1(h) shall not so terminate but shall
survive the Closing until the applicable statute of limitations shall have
expired with respect to all matters referenced therein. For convenience of
reference, the date upon which any representation or warranty contained herein
shall terminate is referred to herein as the "Survival Date." All covenants and
agreements of Purchaser or the Stockholder contained herein shall survive the
Closing in accordance with their respective terms. Anything contained herein to
the contrary notwithstanding, the representations and warranties of the Company
contained in this Agreement (including, without limitation, the Company
Disclosure Schedule) (i) are being given by the Company on behalf of the
Stockholder and for the purpose of binding the Stockholder to the terms and
provisions of this Article VI and the Escrow Agreement, and as an inducement to
Purchaser and Acquisition Sub to enter into this Agreement and to approve the
Merger (and the Company acknowledges that Purchaser and Acquisition Sub have
expressly relied thereon) and (ii) are solely for the benefit of the
Indemnified Persons and each of them. Accordingly, no third party (including,
without limitation, the Stockholder) or any other holder of Company Common Stock
or anyone acting on behalf of any thereof) other than the Indemnified Persons,
and each of them, shall be a third party or other beneficiary of such
representations and warranties and no such third party shall have any rights of
contribution against the Company or the Surviving Corporation with respect to
such representations or warranties or any matter subject to or resulting in
indemnification under this Article VI or otherwise.

6.6.     Limitation on Indemnification.

         (a) Anything to the contrary contained in Article VI notwithstanding,
the Stockholder shall not be obligated to indemnify the Indemnified Persons
pursuant to this Article VI

                                      -44-



with respect to any Losses pursuant to Section 6.1(b)(i) until the aggregate
amount of such Losses exceeds twenty-five thousand dollars ($25,000) (the
"Basket Amount"), whereupon the Stockholder shall be obligated to indemnify the
Indemnified Persons for all Losses in excess of the Basket Amount; provided,
however, that the Stockholder shall be obligated to indemnify the Indemnified
Persons for the first dollar of all Losses arising out of or related to a breach
of the representation and warranty contained in Sections 3.1(c), 3.1(ah) and
3.2(a); provided further, however, that the aggregate maximum indemnification
liability of the Stockholder pursuant to this Article VI with respect to any
Losses pursuant to Section 6.1(b)(i) shall be $662,500.

         (b) For purposes of satisfying an indemnification obligation of the
Stockholder under this Article VI and for determining whether or not the maximum
indemnification liability of the Stockholder under this Article VI has been
satisfied, each share of Purchaser Common Stock tendered by or on behalf of the
Stockholder in satisfaction of any indemnification of the Stockholder under this
Article VI shall have a value determined as set forth in the Escrow Agreement
and options canceled in satisfaction of any indemnification of the Stockholder
under this Article VI shall be deemed to have a value equal to $2.50 per share
purchasable under such options (subject to equitable adjustment for stock
splits, stock dividends, reverse stock splits, combinations or similar actions).
In the event that the maximum indemnification liability of the Stockholder under
this Article VI has been satisfied, Purchaser agrees to instruct the Escrow
Agent to release to the Stockholder any remaining Escrow Shares or other funds
held by the Escrow Agent under the Escrow Agreement.

                                   ARTICLE VII

                                  MISCELLANEOUS

7.1.     Expenses.

         As used in this Agreement, "Transaction Costs" shall mean, with respect
to any party, all actual, out-of-pocket expenses incurred by such party to third
parties, in connection with this Agreement, the Merger and all other
transactions provided for herein and therein; but shall not in any event include
general overhead; the time spent by employees of such party internally; postage,
telephone, telecopy, photocopy and delivery expenses of such party; permit and
filing fees; and other non-material expenses that are incidental to the ordinary
course of business. Each party hereto shall bear its own fees and expenses in
connection with the transactions contemplated hereby; provided, however, that
in the event the Merger shall be consummated, (a) Purchaser and Acquisition Sub
shall bear all

                                      -45-



Transaction Costs of Purchaser and Acquisition Sub and (b) except as expressly
provided in Section 5.4, which provides for certain specified expenses to be
paid by Purchaser or the Surviving Corporation, the Stockholder shall bear all
Transaction Costs of the Company (to be effected by either direct payment of
such Transaction Costs or a contribution of cash to the Company by the
Stockholder immediately prior to the Effective Time in an amount equal to all
such Transaction Costs of the Company), whether or not such fees and expenses
have been paid by the Company on or before the Closing Date and whether or not
such fees and expenses are reflected in the Company Disclosure Schedule or the
Schedule of Expenses (such Transaction Costs of the Company being herein
collectively referred to as the "Company Expenses").

7.2.     Entire Agreement.

         This Agreement (including the Company Disclosure Schedule and the
Exhibits attached hereto) and the other writings referred to herein contain the
entire agreement among the parties hereto with respect to the transactions
contemplated hereby and supersede all prior agreements or understandings,
written or oral, among the parties with respect thereto.

7.3.     Descriptive Headings.

         Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.

7.4.     Public Announcements.

         The parties hereto agree that, to the maximum extent feasible, they
shall advise and confer with each other prior to the issuance (and provide
copies to the other party prior to issuance) of any public announcements,
reports, statements or releases pertaining to the Merger; provided that the
parties shall not disclose the purchase price of the Merger in any such public
announcements.

7.5.     Notices.

         All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
nationally-recognized overnight courier or by registered or certified mail,
postage prepaid, return receipt requested or by telecopier, with confirmation as
provided above addressed as follows:

         if to Purchaser or Acquisition Sub, to:

         iVillage, Inc.
         170 Fifth Avenue

                                      -46-



         New York, New York 10010
         Attention:   Candice Carpenter,
                      Chairman and Chief Executive
                      Officer
         Telecopier:  (212) 604-9133;

         with copies to:

         O'Sullivan Graev & Karabell, LLP
         30 Rockefeller Plaza
         New York, New York 10112
         Attention:  Martin H. Levenglick, Esq.
         Telecopier: (212) 408-2420;

         if to the Company, to:

         ParentsPlace.com, Inc.
         1129 Bancroft Way
         Berkeley, California 94702
         Attention:
         Telecopier:

         with a copy to:

         Tomlinson, Zisko, Morosoli & Maser, LLP
         200 Page Mill Road, Second Floor
         Palo Alto, California 94306
         Attention: William E. Zisko, Esq.
         Telecopier: (415) 324-1808; and

         if to the Stockholder, at its address set forth on
         Schedule I attached hereto;

or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (a) in the case of personal
delivery or telecopy, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent and (c) in the case of mailing, on the third business day following
the date on which the piece of mail containing such communication was posted.

7.6.     Counterparts.

         This Agreement may be executed in any number of counterparts by
original or facsimile signature, each such counterpart shall be an original
instrument, and all such counterparts together shall constitute one and the same
agreement.

                                      -47-



7.7.     Governing Law.

         This Agreement shall be governed by and construed in accordance with
the Delaware Statute and with the laws of the State of New York applicable to
contracts made and to be performed wholly therein (without regard to principles
of conflicts of laws).

7.8.     Benefits of Agreement

         All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

7.9.     Pronouns.

         As used herein, all pronouns shall include the masculine, feminine,
neuter, singular and plural thereof whenever the context and facts require such
construction.

7.10.    Amendment, Modification and Waiver.

         This Agreement shall not be altered or otherwise amended except
pursuant to (a) an instrument in writing signed by Purchaser and the
Stockholder, if Article VI is not affected by such alteration or amendment and
(b) an instrument in writing signed by (i) Purchaser, (ii) the Company and (iii)
the Stockholder, if Article VI is affected thereby; provided, however, that
after the approval and adoption of this Agreement and the Merger by the
Stockholder, no amendment of this Agreement shall be made which pursuant to the
Delaware Statute or other law requires the further approval of the Stockholder;
provided further, however, that any party to this Agreement may waive any
obligation owed to it by any other party under this Agreement. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.

                                      -48-



         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Plan of Reorganization to be executed on its behalf as of the day
and year first above written.

                               iVILLAGE, INC.

                               By:/s/ Steve Ellis
                                  ----------------------------
                                  Name:  Steve Ellis
                                  Title:  VP Finance


                               PP ACQUISITION CORPORATION

                               By: /s/ Steve Ellis
                                   ---------------------------
                                   Name:  Steve Ellis
                                   Title:  VP Finance


                               PARENTSPLACE.COM, INC.

                               By:
                                  -----------------------------
                                  Name:
                                  Title:


                               STOCKHOLDER:

                               --------------------------------
                               David L. Cohen and Jacqueline B.
                               Needleman, as Community Property

AGREED AND ACCEPTED AS TO
SECTION 5.5 AND ARTICLE VI ONLY


-------------------------
Jacqueline B. Needleman

--------------------------
David L. Cohen

                                      -49-



         IN WITNESS WHEREOF, each of the parties hereto has caused this 
Agreement and Plan of Reorganization to be executed on its behalf as of the 
day and year first above written.

                                 iVILLAGE, INC.

                                 By:
                                    -----------------------------
                                    Name:
                                    Title:


                                 PP ACQUISITION CORPORATION


                                 By:
                                    ------------------------------
                                    Name:
                                    Title:


                                 PARENTSPLACE.COM, INC.


                                 By: /s/ Jacqueline Needleman
                                    -------------------------------
                                    Name:  Jacqueline Needleman
                                    Title: CEO


                                 STOCKHOLDER:

                                 /s/ David L. Cohen
                                 /s/ Jacqueline B. Needleman
                                 -----------------------------------
                                     David L. Cohen and Jacqueline B.
                                     Needleman, as Community Property

AGREED AND ACCEPTED AS TO
SECTION 5.5 AND ARTICLE VI ONLY


/s/ Jacqueline b. Needleman
---------------------------
Jacqueline B. Needleman,


/s/  David L. Cohen
---------------------------
David L. Cohen