PURCHASE AND CONTRIBUTION AGREEMENT
BY AND AMONG
CMGI, INC.,
and
ZOOM NEWCO INC.,
and
COMPAQ COMPUTER CORPORATION,
DIGITAL EQUIPMENT CORPORATION,
and
ALTAVISTA COMPANY
JUNE 29, 1999
PURCHASE AND CONTRIBUTION AGREEMENT
ARTICLE I
PURCHASE AND SALE; CONTRIBUTION; MERGER; CLOSING 1
1.1 Purchase and Sale of Assets 1
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1.2 Contributions by CMGI and Digital 1
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1.3 Merger of AV and Newco 2
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1.4 Options 3
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1.5 No Further Rights 3
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1.6 Dilution Protection 3
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1.7 Closing. 4
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CMGI TO NEWCO AND REPRESENTATIONS AND
WARRANTIES OF NEWCO TO COMPAQ 4
2.1 Organization; Qualification of CMGI 4
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2.2 Subsidiaries and Affiliates 5
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2.3 Capitalization 5
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2.4 Authorization of Agreement 6
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2.5 Consents and Approvals; No Violations 6
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2.6 Financial Statements 7
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2.7 Absence of Certain Changes or Events 7
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2.8 Litigation 7
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2.9 Compliance with Laws 8
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2.10 Environmental Matters 8
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2.11 Intellectual Property 11
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2.12 Year 2000 11
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2.13 ERISA Compliance 12
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2.14 Brokers 12
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2.15 Opinion of Financial Advisor 12
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2.16 Taxes 12
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2.17 Information in Proxy Statement 13
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPAQ, DIGITAL AND AV TO NEWCO;
REPRESENTATIONS AND WARRANTIES OF NEWCO TO CMGI 13
3.1 Organization Qualification of AV 13
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3.2 Subsidiaries 14
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3.3 Capitalization 14
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3.4 Authorization of Agreement 15
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3.5 Consents and Approvals No Violations 16
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3.6 Financial Statements 16
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3.7 Absence of Certain Changes or Events 17
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3.8 Litigation 17
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3.9 Compliance with Laws 17
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3.10 Environmental Matters 17
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3.11 Intellectual Property 19
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3.12 Year 2000 20
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3.13 ERISA Compliance 21
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3.14 Brokers 22
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3.15 Opinion of Financial Advisor 23
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3.16 Taxes 23
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3.17 Information in Proxy Statement 24
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3.18 Undisclosed Liabilities 24
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3.19 Assets 25
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3.20 Owned Real Property 25
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3.21 Contracts 25
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS 26
4.1 Funding of the AV Business 26
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4.2 Conduct of the AV Business 26
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ARTICLE V
SALE OF SHARES; BOARD MEMBERSHIP; VOTING AGREEMENT; STANDSTILL 28
5.1 Lock-Up 29
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5.2 Rights of First Offer 29
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5.3 Registration Rights 30
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5.4 Board Designee 30
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5.5 Voting Agreement 30
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5.6 Standstill 31
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5.7 Investment Company Act 31
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ARTICLE VI
ADDITIONAL AGREEMENTS 31
6.1 Stockholders' Meeting 31
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6.2 Access and Information 32
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6.3 HSR Act Filing 33
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6.4 Reasonable Best Efforts 33
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6.5 Publicity 33
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6.6 Employee Benefit Plans 34
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6.7 Restriction on Transfer of AV Shares 34
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6.8 Funding 35
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ARTICLE VII
CLOSING CONDITIONS 35
7.1 Conditions to Each Party's Obligation to Complete the Transaction 35
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7.2 Additional Conditions to the Obligation of CMGI and Newco 35
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7.3 Additional Conditions to the Obligation of Compaq Digital and AV 36
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ARTICLE VIII
TERMINATION, AMENDMENT AND EXPENSES 37
8.1 Termination 37
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8.2 Effect of Termination 38
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8.3 Amendment 38
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8.4 Waiver 38
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8.5 Expenses 39
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ARTICLE IX
TAX MATTERS 39
9.1 Preparation and Filing of Tax Returns 39
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9.2 Payment of Taxes 40
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9.3 Tax Indemnification 40
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9.4 Allocation of Certain Taxes 41
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9.5 Cooperation on Tax Matters 41
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9.6 Termination of Tax-Sharing Agreements 42
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9.7 Certain Tax Elections 42
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9.8 Tax Claims 43
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9.9 Refunds 44
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9.10 Treatment of the Contributions 44
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9.11 Allocation of Considerations 44
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9.12 Tax Disputes 44
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9.13 Adjustment to Consideration 44
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ARTICLE X
DEFINITIONS AND INTERPRETATION 45
10.1 Certain Definitions 45
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10.2 Interpretation 49
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ARTICLE XI
GENERAL PROVISIONS 50
11.1 Survival of Representations 50
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11.2 Notices 50
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11.3 Entire Agreement No Assignment Governing Law 51
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11.4 Parties in Interest 51
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11.5 Counterparts 51
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11.6 Headings 52
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11.7 Severability 52
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Exhibit A - Terms of Promissory Note
Exhibit B - Terms of Series D Preferred Stock
Exhibit C - Form of Assignment Agreement
Exhibit D - Form of Registration Rights Agreement
53
PURCHASE AND CONTRIBUTION AGREEMENT
PURCHASE AND CONTRIBUTION AGREEMENT dated as of June 29, 1999 (the
"Agreement") by and among Compaq Computer Corporation, a Delaware corporation
("Compaq"), Digital Equipment Corporation, a Massachusetts corporation and a
wholly owned subsidiary of Compaq ("Digital"), AltaVista Company, a Delaware
corporation and a wholly owned subsidiary of Digital ("AV"), CMGI, Inc., a
Delaware corporation ("CMGI"), and Zoom Newco Inc., a Delaware corporation and a
wholly owned subsidiary of CMGI ("Newco").
WHEREAS, for federal income tax purposes, the contribution by CMGI of the
Digital Assets (as defined below) and the contribution by Compaq and Digital of
the Assigned Assets (as defined below) shall together constitute a transaction
described in Section 351 of the Code.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE; CONTRIBUTION; MERGER; CLOSING
1.1 Purchase and Sale of Assets . Subject to and upon the terms and
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conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), Digital or Compaq shall sell, transfer, convey,
assign and deliver to CMGI, and CMGI shall purchase from Digital or Compaq, such
number of shares of capital stock of Shopping.com, a California corporation
("SDC"), and, if necessary, such number of shares of capital stock of ZIP2
Corporation, a California corporation ("ZIP2") (collectively, the "Digital
Assets"), as have an aggregate fair market value, as of the Closing, as
determined by an independent appraiser mutually acceptable to the parties
hereto, equal to $220,000,000. In consideration for the Digital Assets, CMGI
shall deliver to Compaq or Digital, as directed, a promissory note, on
substantially the terms set forth on Exhibit A attached hereto, in the principal
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amount of $220,000,000.
1.2 Contributions by CMGI and Digital . Subject to and upon the terms
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and conditions of this Agreement, at the Closing, immediately following the
consummation of the transaction contemplated by Section 1.1:
(a) CMGI shall contribute to Newco (i) the Digital Assets, (ii)
18,994,975 shares of common stock, par value $0.01, of CMGI ("CMGI Common
Stock"), and (iii) 18,090.45 shares of preferred stock of CMGI to be designated
as Series D Preferred Stock, par value $.01 per share (the "Series D Preferred
Stock"), which shall have the rights and preferences described on Exhibit B
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attached hereto, in exchange for the issuance by Newco to CMGI of 81,495,116
shares of common stock, par value $0.01, of Newco ("Newco Common Stock"); and
(b) Compaq and Digital shall contribute to Newco (i) the
properties, assets and other rights and interests to be transferred pursuant to
the Assignment Agreement attached hereto as Exhibit C (the "Assignment
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Agreement") and (ii) all of the outstanding shares of capital stock of SDC and
ZIP2 not owned by Newco, if any, after giving effect to the transaction
described in Sections 1.1 and 1.2(a) (collectively, the "Assigned Assets"), in
exchange for (A) the issuance by Newco to Digital or Compaq, as directed, of
18,504,884 shares of Newco Common Stock, (B) the transfer by Newco to Digital or
Compaq, as directed, of 18,994,975 shares of CMGI Common Stock and (C) the
transfer by Newco to Digital or Compaq, as directed, 18,090.45 shares of Series
D Preferred Stock.
1.3 Merger of AV and Newco .
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(a) Immediately following the consummation of the transactions
described in Section 1.2, AV and Newco shall consummate a merger (the "Merger")
pursuant to which (i) AV shall be merged with and into Newco and the separate
corporate existence of AV shall thereupon cease, (ii) Newco shall be the
successor or surviving corporation in the Merger (the "Surviving Corporation")
and shall continue to be governed by the Laws of the State of Delaware and (iii)
the separate corporate existence of Newco with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger. The
Merger shall have the effects set forth in the Delaware General Corporation Law
(the "DGCL"). As a result of the Merger, all shares of outstanding capital
stock of AV shall be canceled without payment of any consideration therefor.
(b) Immediately following the Closing, the Surviving Corporation
will cause the Merger to be consummated by filing a Certificate of Ownership and
Merger (the "Certificate of Merger") with the Secretary of the State of
Delaware, in such form as required by, and executed in accordance with, the
relevant portions of the DGCL. The Merger shall become effective at the time at
which the Certificate of Merger has been duly filed with the Secretary of State
of the State of Delaware, and such time is hereinafter referred to as the
"Effective Time."
(c) The Certificate of Incorporation of the Surviving Corporation
immediately following the Effective Time shall be the same as the Certificate of
Incorporation of Newco immediately prior to the Effective Time, except that (1)
the name of the corporation set forth therein shall be changed to the name of AV
and (2) the identity of the incorporator shall be deleted. The By-laws of the
Surviving Corporation immediately following the Effective Time shall be the same
as the By-laws of Newco immediately prior to the Effective Time, except that the
name of the corporation set forth therein shall be changed to the name of AV.
1.4 Options .
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(a) As of the Effective Time, all options to purchase common
stock, par value $0.01 per share, of AV ("AV Common Stock") issued by AV
pursuant to its stock option plans or otherwise ("AV Options"), whether vested
or unvested, shall be assumed by Newco. Immediately after the Effective Time,
each AV Option outstanding immediately prior to the Effective Time shall be
deemed to constitute an option to acquire, on the same terms and conditions as
were applicable under such AV Option at the Effective Time, such number of
shares of Newco Common Stock as is equal to the number of shares of AV Common
Stock subject to the unexercised portion of such AV Option. The exercise price
per share of each AV Option assumed in accordance with this Section 1.4 ("Newco
Options") shall be equal to the exercise price of such Newco Option immediately
prior to the Effective Time. The term, exercisability, vesting schedule, status
as an "incentive stock option" under Section 422 of the Code, if applicable, and
all of the other terms of the Newco Options shall otherwise remain unchanged.
(b) As soon as practicable after the Effective Time, the Surviving
Corporation shall deliver to the holders of Newco Options appropriate notices
setting forth such holders' rights pursuant to such Newco Options, and the
agreements evidencing such Newco Options shall continue in effect on the same
terms and conditions (subject to the terms provided for in this Section 1.4 and
such notice).
(c) The Surviving Corporation shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Newco Common
Stock for delivery upon exercise of the Newco Options.
1.5 No Further Rights . From and after the Effective Time, no shares
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of AV Common Stock shall be deemed to be outstanding, and holders of
certificates evidencing such shares shall cease to have any rights with respect
thereto, except as provided herein or by law.
1.6 Dilution Protection . If between the date of this Agreement and
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the Effective Time the outstanding shares of the common stock of CMGI or AV
shall have been changed into a different number of shares or a different class,
by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, conversion, consolidation, combination or exchange of
shares or similar transaction, then appropriate adjustments to reflect any such
action shall be made to the numbers and implied exchange ratios contained in
Section 1.2 and/or Section 1.4.
1.7 Closing. Compaq and CMGI shall as promptly as possible notify
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each other when the conditions to such party's obligations to complete the
transactions contemplated by this Agreement have been satisfied or waived. The
Closing shall take place at the offices of Hale and Dorr LLP, 60 State Street,
Boston, Massachusetts at 10:00 a.m. Boston time on the second business day
following the satisfaction or waiver of the conditions set forth in Article VII
(other than conditions involving actions which will take place at the Closing)
or at such other time, date and place as CMGI and Compaq shall agree in writing.
The date on which the Closing occurs is hereafter referred to as the "Closing
Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CMGI TO NEWCO AND REPRESENTATIONS
AND WARRANTIES OF NEWCO TO COMPAQ
Except as specifically set forth in the CMGI Disclosure Schedule delivered
to Compaq and Newco simultaneously with the execution hereof, CMGI represents
and warrants to Newco, and Newco represents and warrants to Compaq, that all of
the statements contained in this Article II are true and complete as of the date
of this Agreement (or, if made as of a specified date, as of such date), and
will be true and complete as of the Closing Date as though made on the Closing
Date. Each exception and each other response set forth in the CMGI Disclosure
Schedule is identified by reference to, or has been grouped under a heading
referring to, a specific section of this Agreement and, except as otherwise
specifically stated with respect to such exception, relates only to such
referenced section. CMGI guarantees to Compaq the accuracy of the
representations and warranties of Newco in this Article II.
2.1 Organization; Qualification of CMGI . CMGI (a) is a corporation
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duly organized, validly existing and in good standing under the laws of the
state of Delaware; (b) has all required Permits and full corporate power and
authority to carry on its business as it is now being conducted and to own the
properties and assets it now owns; and (c) is duly qualified to do business as a
foreign corporation and is in good standing in every jurisdiction in which
ownership of property or the conduct of its business requires such qualification
or, if CMGI is not so qualified in any such jurisdiction, it can become so
qualified in such jurisdiction without causing a CMGI Material Adverse Effect.
CMGI has heretofore delivered to Compaq complete and correct copies of the
certificate of incorporation and by-laws of CMGI as presently in effect.
2.2 Subsidiaries and Affiliates . Section 2.2 of the CMGI Disclosure
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Schedule sets forth, as of the date hereof, the name and jurisdiction of
incorporation of each CMGI Subsidiary and, as of the date hereof, the
approximate percent of the outstanding shares of each CMGI Subsidiary owned by
CMGI. Section 2.2(a) of the CMGI Disclosure Schedule lists each other entity of
which, as of the date hereof, CMGI has a direct or indirect equity ownership
interest. Each CMGI Subsidiary (a) is a corporation or limited liability
company duly organized or formed, validly existing and in good standing under
the laws of its state of incorporation; (b) has all required Permits and full
corporate or limited liability company power and authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns; and (c) is duly qualified to do business as a foreign corporation or
limited liability company in good standing in every jurisdiction in which
ownership of property or the conduct of its business requires such qualification
or, if a CMGI Subsidiary is not so qualified in any such jurisdiction, it can
become so qualified in such jurisdiction without causing a CMGI Material Adverse
Effect. CMGI has heretofore made available to Compaq complete and correct
copies of the Organizational Documents, of each CMGI Subsidiary, as presently in
effect.
2.3 Capitalization .
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(a) The authorized capital stock of CMGI consists of (i)
400,000,000 shares of CMGI Common Stock, of which, as of the date hereof,
95,364,292 shares were issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights of any Person and (ii) 5,000,000 shares of
preferred stock, par value $0.01 per share, of which, as of the date hereof, 250
are designated as Series A Convertible Preferred Stock, of which none are issued
and outstanding, and 50,000 are designated as Series B Convertible Preferred
Stock, of which 35,000 are issued and outstanding.
(b) Except as set forth above and except for the transactions
contemplated by this Agreement and the issuance of shares under employee and
director stock option plans and employee stock purchase plans of CMGI and its
affiliates, as of the date hereof, (i) there are no securities outstanding which
are convertible into or exercisable or exchangeable for shares of capital stock
of CMGI, and (ii) there are no outstanding options, rights, Contracts, warrants,
subscriptions, conversion rights or other agreements or commitments pursuant to
which CMGI may be required to purchase, redeem, issue or sell any shares of
capital stock or other securities of CMGI.
(c) The issued and outstanding shares of capital stock of, or
other equity interests in, each of the CMGI Subsidiaries that are owned by CMGI
or any of its Subsidiaries have been duly authorized and are validly issued,
and, with respect to capital stock, are fully paid and nonassessable, and were
not issued in violation of any preemptive or similar rights of any Person. All
such issued and outstanding shares or other equity interests that are indicated
as owned by CMGI or one of the CMGI Subsidiaries in Section 2.2 of the CMGI
Disclosure Schedule are owned beneficially by CMGI or such Subsidiaries as set
forth therein and free and clear of all Liens.
(d) As of the date hereof, the authorized capital stock of Newco
consists of (i) 100 shares of Newco Common Stock of which 100 shares are issued,
outstanding and owned by CMGI, all of which are duly authorized, validly issued,
fully paid and nonassessable and were not issued in violation of any preemptive
or similar rights of any Person.
2.4 Authorization of Agreement . CMGI and Newco (collectively, the
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"Buyers") have all requisite corporate power and authority to execute and
deliver this Agreement and each instrument required hereby to be executed and
delivered by them at the Closing, to perform their obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The Board of Directors of CMGI has approved the Transaction. The execution and
delivery by the Buyers of this Agreement and each instrument required hereby to
be executed and delivered by them at the Closing and the performance of their
obligations hereunder and thereunder have been duly and validly authorized by
all requisite corporate action on the part of the Buyers. This Agreement has
been duly executed and delivered by the Buyers and, assuming due authorization,
execution and delivery hereof by CDA, constitutes the legal, valid and binding
obligation of the Buyers, enforceable against the Buyers in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar
Laws now or hereafter in effect relating to creditors' rights generally or to
general principles of equity.
2.5 Consents and Approvals; No Violations . Except for the Consents as
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may be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act") and the filing of the Certificate of Merger as required by the
DGCL, none of the execution, delivery or performance of this Agreement by the
Buyers, or the consummation by the Buyers of any of the transactions
contemplated hereby, will (i) conflict with or result in any breach of any
provision of the Organizational Documents of the Buyers or any CMGI Subsidiary,
(ii) require any Consent of any Governmental Entity, (iii) require any Consent
of any other Person (including consents from parties to loans, Contracts, leases
and other agreements to which CMGI or any affiliate of CMGI is a party), (iv)
result in a violation or breach of, or constitute (with or without due notice or
the passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract, or (v) violate any Law, Order or
Permit applicable to CMGI or any affiliate of CMGI or any of their properties or
assets, excluding from the foregoing clauses (iii), (iv) and (v) such absences
of required consents, violations, breaches or defaults which would not,
individually or in the aggregate, have a CMGI Material Adverse Effect or
adversely affect the Buyers' ability to consummate the Transaction.
2.6 Financial Statements .
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(a) Since February 1, 1998, CMGI has timely filed as of the date
hereof and will file as of the Effective Time all reports required to be filed
by it with the Securities and Exchange Commission (the "SEC") pursuant to the
federal securities Laws and the SEC rules and regulations thereunder. Each of
such reports complied in all material respects with applicable requirements of
the Exchange Act (collectively, the "CMGI SEC Reports"). None of the CMGI SEC
Reports, as of their respective dates, contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The consolidated statements of financial position and the
related consolidated statements of operations, stockholders' equity and cash
flows (including the related notes thereto) of CMGI included in the CMGI SEC
Reports (the "CMGI Financial Statements") complied in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in conformity with United
States generally accepted accounting principles ("GAAP") (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a basis
consistent with prior periods (except as otherwise noted therein), and present
fairly the consolidated financial position of CMGI as at their respective dates,
and the consolidated results of its operations and its cash flows for the
periods presented therein subject, in the case of the unaudited interim
financial statements, to normal and recurring year-end adjustments.
2.7 Absence of Certain Changes or Events . Since April 30, 1999 (i)
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the business of CMGI and its Subsidiaries has been carried on only in the
ordinary and usual course consistent with past practice and (ii) there has not
occurred any event, development or change which, individually or in the
aggregate, has resulted in or is reasonably likely to result in a CMGI Material
Adverse Effect.
2.8 Litigation . There is no Litigation pending, or to the Knowledge
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of CMGI, threatened, against or involving CMGI or any CMGI Subsidiary or any of
their respective assets as to which there is a reasonable possibility of an
adverse determination and that, if determined adversely to CMGI or any CMGI
Subsidiary, would reasonably be expected, individually or in the aggregate, to
have a CMGI Material Adverse Effect or, as of the date hereof, which in any way
may prevent, enjoin, alter or delay the Transaction.
2.9 Compliance with Laws . CMGI and each CMGI Subsidiary is and since
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February 1, 1997 has been in compliance with all applicable Laws, except for
violations which do not, and would not reasonably be expected to have,
individually or in the aggregate, a CMGI Material Adverse Effect. Since January
1, 1997, neither CMGI nor any CMGI Subsidiary has received any notice or other
communication (whether written or oral) from any Person regarding any actual,
alleged, possible or potential violation of or failure to comply with any Law,
except for violations which do not, and would not reasonably be expected to
have, individually or in the aggregate, a CMGI Material Adverse Effect. Neither
CMGI, any person controlling, controlled by or under common control with CMGI,
nor any Venture Fund is now or at any time since February 1, 1995 has been an
investment company as defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act"), or required to be registered under the
Investment Company Act, in each case, after giving effect to Rule 3a-2
thereunder. Immediately after giving effect to the closing of the Transaction,
none of CMGI, Newco nor any Person controlling, controlled by or under common
control with, CMGI will be an investment company as defined in Section 3(a) of
the Investment Company Act, without giving effect to Rule 3a-2 thereunder.
2.10 Environmental Matters . Except as is not reasonably likely to
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result in a CMGI Material Adverse Effect:
(a) CMGI and each of the CMGI Subsidiaries (i) has been and is in
compliance with all applicable Environmental Laws; (ii) has obtained all Permits
required for the operation of its businesses by any applicable Environmental Law
(collectively "Environmental Permits") and all such Environmental Permits are in
full force and in effect, no appeal nor any other action is pending to revoke
any such Environmental Permit; and (iii) is in compliance with all such
Environmental Permits, and has filed in a timely manner all applications to
renew such Environmental Permits or to obtain new Environmental Permits to the
extent such applications are currently required.
(b) There has been no Release of any Hazardous Material that would
reasonably be likely to form the basis of any Environmental Claim against CMGI
or any CMGI Subsidiary at the properties owned or leased by CMGI or any CMGI
Subsidiary (the "CMGI Properties"). To the Knowledge of CMGI, CMGI Properties
are not adversely affected by any Release or threatened Release of a Hazardous
Material originating or emanating from any other property. There were no
Releases of Hazardous Materials on properties formerly owned or operated by CMGI
or any CMGI Subsidiary, or any predecessors thereof, during the period of such
operation or ownership, that would reasonably be likely to result in an
Environmental Claim against CMGI or any CMGI Subsidiary.
(c) Neither CMGI nor any CMGI Subsidiary has manufactured, used,
generated, stored, treated, transported, disposed of, released, or otherwise
managed any Hazardous Material at any of the CMGI Properties.
(d) Neither CMGI nor any CMGI Subsidiary: (i) has any liability
for response or corrective action for natural resources damage, or any other
harm pursuant to any Environmental Law, (ii) is subject to, or has Knowledge of,
any Environmental Claim involving CMGI or any CMGI Subsidiary, or (iii) has any
Knowledge of any condition or occurrence at any of the CMGI Properties which
could form the basis of an Environmental Claim against CMGI or any CMGI
Subsidiary, or any of the CMGI Properties.
(e) The CMGI Properties are not subject to any, and neither CMGI
nor any CMGI Subsidiary has any Knowledge of any, imminent restriction on the
ownership, occupancy, use or transferability of the CMGI Properties in
connection with any (i) Environmental Law or (ii) Release or threatened Release
of any Hazardous Material.
(f) There are no conditions or circumstances at the CMGI
Properties that pose a risk to the environment or the health and safety of any
Person, or would require any remedial action.
(g) Neither CMGI nor any CMGI Subsidiary has been subject to any
inquiry or request for information related to its disposal, treatment, storage
or recycling, or the arrangement for said activities, of any Hazardous Material
or waste, at any property other than the CMGI Properties.
(h) To the Knowledge of CMGI, neither CMGI nor any CMGI Subsidiary
or any predecessor thereto has disposed, recycled, treated, stored, or arranged
for said activities, at any property that is listed or proposed for listing on
the Federal National Priorities List, the Federal CERCLIS list, or any list
compiled pursuant to state statutes or Laws that are analogous to the Federal
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601 et seq.
(i) The CMGI Properties do not contain any underground storage
tanks, landfills, electrical equipment containing polychlorinated biphenyls,
surface impoundments, friable asbestos-containing materials, or hazardous waste
treatment, storage or disposal units that either have or require a Permit
pursuant to any Law.
(j) Since January 1, 1997, neither CMGI nor any CMGI Subsidiary
has received a communication (written or oral) that alleges that CMGI or any
CMGI Subsidiary is not in compliance with any Environmental Law.
(k) As used in this Agreement:
(i) "Environmental Claim" means any investigation, notice of
violation, demand, allegation, action, suit, Order, consent decree, penalty,
fine, Lien, proceeding or claim (whether administrative, judicial or private in
nature) arising: (i) pursuant to, or in connection with, an actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or actual or alleged activity associated with any Hazardous Material;
(iii) from any abatement, removal, remedial, corrective or other response action
in connection with any Hazardous Material, Environmental Law or Order; or (iv)
from any actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.
(ii) "Environmental Law" means any Law pertaining to: (i) the
protection of health, safety and the indoor or outdoor environment; (ii) the
conservation, management or use of natural resources and wildlife; (iii) the
protection or use of surface water and ground water; (iv) the management,
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal, remediation
or handling of, or exposure to, any Hazardous Material; or (v) pollution
(including any release to air, land, surface water and ground water); and
includes the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. 9601 et seq., and the Solid Waste Disposal Act, 42
U.S.C. 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
5101, et seq. The Clean Water Act, 33 U.S.C. 1251 et seq., the Clean Air Act,
42 U.S.C. 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. 2601 et
seq., the Emergency Planning and Community Right to Know Act, 42 U.S.C. 1986,
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 136 et seq.,
the Occupational Safety and Health Act, 29 U.S.C. 651 et seq., any similar
state laws and the regulations related thereto or other Laws.
(iii) "Hazardous Material" shall mean any substance,
chemical, compound, product, solid, gas, liquid, waste, by-product, pollutant,
contaminant or material which is hazardous or toxic, and includes asbestos or
any substance containing asbestos, polychlorinated biphenyls, petroleum
(including crude oil or any fraction thereof), and any hazardous or toxic waste,
material or substance regulated under any Environmental Law.
(iv) "Release" means any release, spill, emission, leak,
injection, deposit, disposal, discharge, dispersal, leaching, or migration into
the atmosphere, soil, surface water, groundwater or property (indoors or
outdoors).
2.11 Intellectual Property .
----------------------
(a) To the Knowledge of CMGI, CMGI and its Subsidiaries own or
otherwise have valid rights to use all Intellectual Property (as defined in
Section 3.11(a)) material to their business and operations as currently
conducted.
(b) There is no pending or, to the Knowledge of CMGI, threatened
(in writing) claim, suit, arbitration or other adversarial proceeding
(collectively, "Claims") before any court, agency, arbitral tribunal, or
registration authority in any jurisdiction (i) involving any item of material
Intellectual Property owned by CMGI or a CMGI Subsidiary, (ii) alleging that the
activities or the conduct of CMGI's or a CMGI Subsidiary's business does or will
infringe upon, violate or constitute the unauthorized use of the intellectual
property rights of any third party or (iii) challenging the ownership, use,
validity, enforceability or registrability of any material Intellectual Property
by CMGI or a CMGI Subsidiary. There are no settlements, forebearances to sue,
consents, judgments, or orders or similar obligations (other than license
agreements in the ordinary course of business) which (a) restrict CMGI's or a
CMGI Subsidiary's rights to use any material Intellectual Property, (b) restrict
CMGI's or a CMGI Subsidiary's business in order to accommodate a third party's
intellectual property rights or (c) permit third parties to use any Intellectual
Property owned by CMGI or a CMGI Subsidiary, except for such Claims as have not
resulted, and could not reasonably be expected to result, in a CMGI Material
Adverse Effect.
(c) To the Knowledge of CMGI, no third party is making
unauthorized use of or infringing in any material respect upon any material
Intellectual Property owned by CMGI or a CMGI Subsidiary.
(d) CMGI and its Subsidiaries have taken commercially reasonable
actions to protect each item of material Intellectual Property owned by any of
them, except where the failure to take such actions has not resulted and could
not reasonably be expected to result in a CMGI Material Adverse Effect.
(e) Neither CMGI nor any CMGI Subsidiary is in material violation
of any agreement relating to any Intellectual Property material to its business
or operations, except for such violations as have not resulted, and could not
reasonably be expected to result, in a CMGI Material Adverse Effect. The
consummation of the transactions contemplated hereby will not result in the loss
or material impairment of CMGI's or a CMGI Subsidiary's rights to own or use any
Intellectual Property material to its business or operations, except where such
loss or impairment could not reasonably be expected to result in a CMGI Material
Adverse Effect.
2.12 Year 2000 . All software, hardware, databases and embedded
----------
control systems (collectively, "Systems") used by CMGI and its Subsidiaries are
Year 2000 Compliant (as defined in Section 3.12) and, to the Knowledge of CMGI,
all Systems used by its material suppliers and facilities providers are Year
2000 Compliant, except in each case for failures to be Year 2000 Compliant that,
individually or in the aggregate, have not resulted and would not reasonably be
likely to result in a CMGI Material Adverse Effect.
2.13 ERISA Compliance . All "employee benefit plans," as defined in
-----------------
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained or contributed to by CMGI or its Subsidiaries are in
compliance with all applicable provisions of ERISA and the Code, and CMGI and
its Subsidiaries do not have any liabilities or obligations with respect to
employee benefit plans, arrangement, agreements or programs, whether or not
accrued, contingent or otherwise, except (a) as previously disclosed in writing
to Compaq and (b) for instances of noncompliance or liabilities or obligations
that would not, individually or in the aggregate, have a CMGI Material Adverse
Effect.
2.14 Brokers . No broker, finder, investment banker or other Person
-------
(other than BancBoston Robertson Stephens Inc.) is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
CMGI.
2.15 Opinion of Financial Advisor . The Board of Directors of CMGI has
----------------------------
received the opinion of BancBoston Robertson Stephens Inc., CMGI's financial
advisor, substantially to the effect that the consideration to be paid by CMGI
for the shares which it is to receive pursuant to this Agreement is fair to CMGI
from a financial point of view.
2.16 Taxes .
-----
(a) Except as set forth in Section 2.16 of the CMGI Disclosure
Schedule, each of CMGI and its Subsidiaries has (i) duly and timely filed
(including all applicable extensions granted without penalty) all material Tax
Returns required to be filed, and such Tax Returns are true, correct and
complete in all material respects, and (ii) paid in full or made adequate
provision in the financial statements of CMGI (in accordance with GAAP) for all
material Taxes shown to be due on such Tax Returns.
(b) Except as set forth in Section 2.16 of the CMGI Disclosure
Schedule, (i) neither CMGI nor its Subsidiaries has requested any extension of
time within which to file any Tax Return in respect of any taxable period and no
request for waivers of the time to assess any Taxes are pending or outstanding,
(ii) with respect to each taxable period of CMGI and its Subsidiaries, the
federal and state income Tax Returns of CMGI and its Subsidiaries have been
audited by the Internal Revenue Service or the appropriate state Tax Authorities
or the time for assessing and collecting income Tax with respect to such taxable
period has closed and such taxable period is not subject to review, (iii) all
Taxes due with respect to completed and settled examinations or concluded
litigation relating to CMGI or any of its Subsidiaries have been paid in full or
adequate provision has been made for any such amounts in the financial
statements of CMGI (in accordance with GAAP) and (iv) there are no material
liens for Taxes upon the assets or property of any of CMGI or its Subsidiaries
except for statutory liens for Taxes not yet due.
(c) CMGI does not know of any fact and has not taken any action
that could reasonably be expected to prevent the contributions referenced in
Section 1.2 from constituting a transaction described in Section 351 of the
Code.
2.17 Information in Proxy Statement . The proxy statement with respect
------------------------------
to the Conversion (as defined in Section 6.1) ( the "Proxy Statement") at the
date to be mailed to CMGI's shareholders and at the time of the special meeting
provided for in the Proxy Statement (i) will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading and (ii) will comply in
all material respects with the provisions of applicable federal securities laws;
provided, however, that no representation is made by CMGI with respect to
-------- -------
statements made therein based on information furnished by Compaq for inclusion
in the Proxy Statement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPAQ, DIGITAL AND AV TO NEWCO;
REPRESENTATIONS AND WARRANTIES OF NEWCO TO CMGI
Except as specifically set forth in the Compaq Disclosure Schedule
delivered to Newco and CMGI simultaneously with the execution hereof, Compaq,
Digital and AV represent and warrant to Newco, and Newco represents and warrants
to CMGI, that all of the statements contained in this Article III are true and
complete as of the date of this Agreement (or, if made as of a specified date,
as of such date), and will be true and complete as of the Closing Date as though
made on the Closing Date. Each exception and each other response set forth in
the Compaq Disclosure Schedule is identified by reference to, or has been
grouped under a heading referring to, a specific section of this Agreement and,
except as otherwise specifically stated with respect to such exception, relates
only to such referenced section. Compaq hereby guarantees to CMGI the accuracy
of the representations and warranties of Newco in this Article III.
3.1 Organization Qualification of AV . AV (a) is a corporation duly
-----------------------------------
organized, validly existing and in good standing under the laws of the state of
Delaware; (b) has all required Permits and full corporate power and authority to
carry on its business as it is now being conducted and to own the properties and
assets it now owns; and (c) is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which ownership of
property or the conduct of its business requires such qualification or, if AV is
not so qualified in any such jurisdiction, it can become so qualified in such
jurisdiction without any AV Material Adverse Effect. AV has heretofore
delivered to CMGI complete and correct copies of the certificate of
incorporation and by-laws of AV as presently in effect.
3.2 Subsidiaries . Section 3.2 of the Compaq Disclosure Schedule sets
------------
forth the name, jurisdiction of incorporation, capitalization, and the name of
each record holder of the capital stock of each Subsidiary which is part of the
AV Business and, for each Subsidiary which is material to the AV Business, the
jurisdictions in which each such Subsidiary is qualified to do business.
Section 3.2(a) of the Compaq Disclosure Schedule lists each entity which is part
of the AV Business and in which Compaq or any of its Subsidiaries has a direct
or indirect equity ownership interest and sets forth the approximate percent of
outstanding shares or other equity interests owned by Compaq, Digital and AV.
Each AV Subsidiary (a) is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation; (b) has all required
Permits and full corporate power and authority to carry on its business as it is
now being conducted and to own the properties and assets it now owns; and (c) is
duly qualified to do business as a foreign corporation in good standing in every
jurisdiction in which ownership of property or the conduct of its business
requires such qualification or, if an AV Subsidiary is not so qualified in any
such jurisdiction, it can become so qualified in such jurisdiction without any
AV Material Adverse Effect. AV has heretofore made available to CMGI and Newco
complete and correct copies of the Organizational Documents, of each AV
Subsidiary, as presently in effect.
3.3 Capitalization .
--------------
(a) As of the date hereof, the authorized capital stock of AV
consists of (i) 1,000 shares of AV Common Stock of which 1,000 shares are
issued, outstanding and owned by Digital, all of which are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation of
any preemptive or similar rights of any Person.
(b) Except as set forth above and except for, the transactions
contemplated by this Agreement and the options set forth in Section 3.3(f) of
the Compaq Disclosure Schedule, as of the date hereof, (i) there are no
securities outstanding which are convertible into or exercisable or exchangeable
for shares of capital stock of AV or any AV Subsidiary, and (ii) there are no
outstanding options, rights, Contracts, warrants, subscriptions, conversion
rights or other agreements or commitments pursuant to which AV or any AV
Subsidiary may be required to purchase, redeem, issue or sell any shares of
capital stock or other securities of AV or any AV Subsidiary (collectively,
"Options").
(c) The authorized, issued and outstanding capital stock of, or
other equity interest in, each of the AV Subsidiaries and the names of the
holders of record of the capital stock or other equity interest in each such AV
Subsidiary, in each case as of the date hereof, are set forth in Section 3.3(c)
of the Compaq Disclosure Schedule. The issued and outstanding shares of capital
stock of, or other equity interest in, each of the AV Subsidiaries have been
duly authorized and validly issued, and, with respect to capital stock, are
fully paid and non-assessable, and were not issued in violation of any
pre-emptive or similar rights of any Person. All the issued and outstanding
shares or other equity interests of the AV Subsidiaries are owned beneficially
as set forth therein, free and clear of all Liens.
(d) Except as set forth in Section 3.3(d) of the Compaq Disclosure
Schedule, there are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to AV or any AV Subsidiary.
(e) There are no agreements to which AV or any AV Subsidiary are
party or by which it is bound with respect to the voting (including without
limitation voting trusts, or proxy), registration under the Securities Act, or
sale or transfer (including without limitation agreements relating to
pre-emptive rights, rights of first refusal, co-sale rights or "drag along"
rights) of any securities of AV or any AV Subsidiary.
(f) Section 3.3(f) of the Compaq Disclosure Schedule sets forth a
complete list of (i) all outstanding Options to purchase shares of capital stock
of AV or any AV Subsidiary, indicating the holder thereof, the number of shares
subject to each such Option, the exercise price, date of grant, vesting
schedule, expiration date and terms regarding the acceleration of vesting, and
(ii) all stock option plans and other equity-related plans of AV or any AV
Subsidiary.
(g) As of the date hereof, Options to purchase an aggregate of
9,794,554 shares of AV Common Stock are outstanding.
3.4 Authorization of Agreement . Compaq, Digital and AV (collectively,
--------------------------
"CDA") have all requisite corporate power and authority to execute and deliver
this Agreement and each instrument required hereby to be executed and delivered
by them at the Closing, to perform their obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by CDA of this Agreement and each instrument required
hereby to be executed and delivered by them at the Closing and the performance
of their obligations hereunder and thereunder have been duly and validly
authorized by all requisite corporate action on the part of CDA. This Agreement
has been duly executed and delivered by CDA and, assuming due authorization,
execution and delivery hereof by the Buyers, constitutes legal, valid and
binding obligations of CDA, enforceable against CDA in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar
Laws now or hereafter in effect relating to creditors' rights generally or to
general principles of equity.
3.5 Consents and Approvals No Violations . Except for the Consents as
-------------------------------------
may be required under the HSR Act and the filing of the Certificate of Merger as
required by the DGCL, none of the execution, delivery or performance of this
Agreement by CDA, or the consummation by CDA of any of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the Organizational Documents of CDA, (ii) require any Consent of
any Governmental Entity, (iii) require any Consent of any other Person
(including consents from parties to loans, Contracts, leases and other
agreements to which AV, Digital or any affiliate of AV is a party), (iv) or
result in a violation or breach of, or constitute (with or without due notice or
the passage of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract, or (v) violate any Law, Order or
Permit applicable to CDA or any of their properties or assets, excluding from
the foregoing clauses (iii), (iv) and (v) such absences of consents, violations,
breaches or defaults which would not, individually or in the aggregate, have an
AV Material Adverse Effect or adversely affect CDA's ability to consummate the
Transaction.
3.6 Financial Statements . Compaq has delivered to CMGI and Newco
---------------------
copies of the following draft financial statements prepared by management on a
carve-out basis which have not been reviewed or audited by independent
accountants (collectively the "AV Financial Statements"):
(a) statements of operations and cash flows for the years ended
December 31, 1996 and December 31, 1997 and the period commencing January 1,
1998 and ending June 11, 1998 for the AltaVista division of Digital;
(b) a balance sheet as at December 31, 1997 for the AltaVista
division of Digital; and
(c) a balance sheet as at December 31, 1998 and statements of
operations and cash flows for the period commencing June 12, 1998 and ending
December 31, 1998 for the AltaVista division of Digital.
Except for (a) the fact that the AV Financial Statements do not contain all of
the required adjustments relating to the final allocation of purchase price in
connection with the acquisitions by Compaq of Digital, (b) any non-cash
compensatory charges related to stock compensation arrangements, (c) other final
adjustments, which other final adjustments will not be material in amount, and
(d) the fact that the notes are in draft form and not complete, the AV Financial
Statements have been prepared in conformity with GAAP on a carve-out basis and
present fairly the financial position of the AltaVista division as at their
respective dates and the statements of operations and cash flows for the periods
presented therein.
3.7 Absence of Certain Changes or Events . Since December 31, 1998 (i)
------------------------------------
the AV Business has been carried on only in the ordinary and usual course
consistent with past practice and (ii) there has not occurred any event,
development or change which, individually or in the aggregate, has resulted in
or is reasonably likely to result in an AV Material Adverse Effect.
3.8 Litigation . There is no Litigation pending, or to the Knowledge
----------
of Compaq, Digital or AV, threatened, against or involving AV, any AV Subsidiary
or any of their respective assets or the AV Business, which is not a Retained
Liability (as defined in the Assignment Agreement).
3.9 Compliance with Laws . Each of CDAS is, and since January 1, 1997
---------------------
has been, in compliance, with respect to AV Business, with all applicable Laws,
except for any violations which would not reasonably be expected to have an AV
Material Adverse Effect. Since January 1, 1997, none of CDAS has received any
notice or other communication (whether written or oral) from any Person
regarding any actual, alleged, possible or potential violation of or failure to
comply with any Law with respect to the AV Business, except in connection with
Retained Liabilities (as defined in the Assignment Agreement) and for violations
which do not, and would not reasonably be expected to have, individually or in
the aggregate, an AV Material Adverse Effect.
3.10 Environmental Matters . Except as is not reasonably likely to
----------------------
result in an AV Material Adverse Effect:
(a) AV, each of the AV Subsidiaries and the AV Business (i) have
been and are in compliance with all applicable Environmental Laws; (ii) have
obtained all Permits required for the operation of their businesses by any
applicable Environmental Law (collectively "Environmental Permits") and all such
Environmental Permits are in full force and effect, no appeal nor any other
action is pending to revoke any such Environmental Permit; and (iii) are in
compliance with all such Environmental Permits, and have filed in a timely
manner all applications to renew such Environmental Permits or to obtain new
Environmental Permits to the extent such applications are currently required.
(b) There has been no Release of any Hazardous Material that would
reasonably be likely to form the basis of any Environmental Claim against AV or
any AV Subsidiary at the properties owned or leased by AV, any AV Subsidiary or
the AV Business (the "AV Properties"). AV Properties are not, to the Knowledge
of CDAS adversely affected by any Release or threatened Release of a Hazardous
Material originating or emanating from any other property. There were no
Releases of Hazardous Materials on properties formerly owned or operated by AV,
any AV Subsidiary or the AV Business, or any predecessors thereof, during the
period of such operation or ownership, that would reasonably be likely to result
in an Environmental Claim against AV or any AV Subsidiary.
(c) Neither AV, any AV Subsidiary nor AV Business has
manufactured, used, generated, stored, treated, transported, disposed of,
released, or otherwise managed any Hazardous Material at any of the AV
Properties.
(d) Neither AV, any AV Subsidiary nor AV Business: (i) has any
liability for response or corrective action for natural resources damage, or any
other harm pursuant to any Environmental Law, (ii) is subject to, or has
Knowledge of, any Environmental Claim involving AV or any AV Business, or (iii)
has any Knowledge of any condition or occurrence at any of the AV Properties
which could form the basis of an Environmental Claim against AV, any AV
Subsidiary or any AV Business, or any of the AV Properties.
(e) The AV Properties are not subject to any, and AV has no
Knowledge of any, imminent restriction on the ownership, occupancy, use or
transferability of the AV Properties in connection with any (i) Environmental
Law or (ii) Release or threatened Release of any Hazardous Material.
(f) There are no conditions or circumstances at the AV Properties
that pose a risk to the environment or the health and safety of any Person, or
would require any remedial action.
(g) Neither AV, any AV Subsidiary nor AV Business has been subject
to any inquiry or request for information related to its disposal, treatment,
storage or recycling, or the arrangement for said activities, of any Hazardous
Material or waste, at any property other than the AV Properties.
(h) To the Knowledge of AV, neither AV, any AV Subsidiary nor AV
Business or any predecessor thereto has disposed, recycled, treated, stored, or
arranged for said activities, at any property that is listed or proposed for
listing on the Federal National Priorities List, the Federal CERCLIS list, or
any list compiled pursuant to state statutes or Laws that are analogous to the
Federal Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601 et seq.
(i) The AV Properties do not contain any underground storage
tanks, landfills, electrical equipment containing polychlorinated biphenyls,
surface impoundments, friable asbestos-containing materials, or hazardous waste
treatment, storage or disposal units that either have or require a Permit
pursuant to any Law.
(j) Since January 1, 1997, neither AV nor any AV Business has
received communication (written or oral) that alleges that AV or any AV Business
is not in compliance with any Environmental Law.
3.11 Intellectual Property .
----------------------
(a) To the Knowledge of CDAS, CDAS with respect to the AV Business
own or otherwise have the right to use all Intellectual Property necessary to
(a) provide the services currently provided, and currently planned to be
provided, by the AV Business, AV and its Subsidiaries to third parties; (b) use,
manufacture, copy, modify, market and distribute the products currently, and
currently planned to be, manufactured, marketed, sold, licensed or otherwise
distributed by the AV Business, AV and its Subsidiaries; and (c) to operate the
internal systems of the AV Business, AV and its Subsidiaries that are material
to the business or operations of the AV Business, AV and its Subsidiaries,
including without limitation, computer hardware systems and software
applications. Except for third party licenses that are not assignable, each item
of such Intellectual Property will be owned or available for use by Newco
immediately following the Closing on substantially identical terms and
conditions as it was available to the AV Business immediately prior to the
Closing, except where the failure to own or have available for use such item,
individually or in the aggregate, could not reasonably be expected to result in
an AV Material Adverse Effect. For purposes of this Agreement, "Intellectual
Property" shall mean any and all of the following: trademarks, service marks,
trade names, Internet domain names, designs, logos, slogans, and general
intangibles of like nature, together with all goodwill, registrations and
applications related to the foregoing; patents and patent applications
(including any continua-tions, divisions, continuations-in-part, renewals,
reissues, and applications for any of the foregoing), industrial design
registrations and applications (including any renewals thereof); copyrights
(including any registrations and applications therefor ); software; data;
documentation; "mask works" (as defined under 17 USC 901) and any
registrations and applications for "mask works"; technology, trade secrets and
other confidential information, know-how, proprietary processes, formulae,
algorithms, models and methodologies; and other property of like nature.
(b) To the Knowledge of CDAS, the activities and the conduct of
the AV Business do not infringe upon, violate or constitute the unauthorized use
of the intellectual property rights of any third party. There is no pending
or, to the Knowledge of CDAS, threatened (in writing) Claim before any court,
agency, arbitral tribunal, or registration authority in any jurisdiction (i)
involving any item of Intellectual Property owned or used by CDAS with respect
to the AV Business, (ii) alleging that the activities or the conduct of the AV
Business does or will infringe upon, violate or constitute the unauthorized use
of the intellectual property rights of any third party or (iii) challenging the
ownership, use, validity, enforceability or registrability of any Intellectual
Property by CDAS with respect to the AV Business, except for such Claims as have
not resulted and could not reasonably be expected to result, individually or in
the aggregate, in an AV Material Adverse Effect. There are no settlements,
forebearances to sue, consents, judgments, or orders or similar obligations
(other than license agreements in the ordinary course of business) which (a)
restrict the rights of CDAS to use any material Intellectual Property with
respect to the AV Business, (b) restrict the AV Business in order to accommodate
a third party's intellectual property rights or (c) permit third parties to use
any material Intellectual Property owned by CDAS with respect to the AV
Business.
(c) To the Knowledge of CDAS, no third party is making
unauthorized use of or infringing in any material respect upon any material
Intellectual Property owned by CDAS with respect to the AV Business.
(d) CDAS have taken commercially reasonable actions to protect
each item of material Intellectual Property owned by any of them with respect to
the AV Business, except where the failure to take such actions has not resulted
and could not reasonably be expected to result, individually or in the
aggregate, in an AV Material Adverse Effect.
(e) None of CDAS is in violation of any agreement relating to any
Intellectual Property with respect to the AV Business, except for such
violations as have not resulted, and could not reasonably be expected to result,
individually or in the aggregate, in an AV Material Adverse Effect. The
consummation of the transactions contemplated hereby will not result in the loss
or impairment of the rights of any of CDAS to own, use or enforce any
Intellectual Property used in its business or operations with respect to the AV
Business, except where such loss or impairment could not reasonably be expected
to result, individually or in the aggregate, in an AV Material Adverse Effect.
(f) To the Knowledge of CDAS, none of CDAS has disclosed the
source code for any of the software owned by any of CDAS and used in the AV
Business (the "Software") or other confidential information constituting,
embodied in or pertaining to the Software to any person or entity, except
pursuant to nondisclosure agreements, and CDAS have taken reasonable
commercially reasonable measures to prevent disclosure of such source code.
3.12 Year 2000 . All Systems used in the AV Business or used by AV or
----------
its Subsidiaries are, or will be prior to August 31, 1999, Year 2000 Compliant
and, to the Knowledge of CDAS, all Systems used by the material suppliers and
facilities providers of the AV Business are Year 2000 Compliant, except in each
case for failures to be Year 2000 Compliant that, individually or in the
aggregate, have not resulted and could not reasonably be expected to result in
an AV Material Adverse Effect. For purposes of this Agreement, "Year 2000
Compliant" means that the Systems (i) accurately receive, record, store,
provide, recognize and process date data (including calculating, comparing and
sequencing) from, into and between the twentieth and twenty-first centuries, the
years 1999 and 2000, and leap year calculations, (ii) operate accurately with
otherwise compatible software and hardware that use four-digit date format for
representation of the year, and (iii) will not malfunction, cease to function or
provide invalid or incorrect results as a result of (x) the change of years from
1999 to 2000, (y) date data, including date data which represents or references
different centuries, different dates during 1999 and 2000, or more than one
century or (z) the occurrence of any particular date.
3.13 ERISA Compliance .
-----------------
(a) For purposes of this Agreement, the following terms shall have
the following meanings:
(i) "Employee Benefit Plan" means any "employee pension
benefit plan" (as defined in Section 3(2) of ERISA), any "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA), and any other written or
oral plan, agreement or arrangement (excluding agreements with individual
employees) involving compensation, including without limitation insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock appreciation or
other forms of incentive compensation or post-retirement compensation maintained
or contributed to by AV, any AV Subsidiary, or any ERISA Affiliate with respect
to present or former employees of AV or any AV Subsidiary.
(ii) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(iii) "ERISA Affiliate" means any entity which is, or at any
applicable time was, a member of (1) a controlled group of corporations (as
defined in Section 414(b) of the Code), (2) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code), or (3) an
affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes or included
AV or any of its Subsidiaries.
(b) Section 3.13(b) of the Compaq Disclosure Schedule contains a
complete and accurate list of all Employee Benefit Plans. All Employee Benefit
Plans are in compliance with all applicable provisions of ERISA and the Code.
AV, the AV Subsidiaries, and the Employee Benefit Plans do not have any
liabilities or obligations with respect to the Employee Benefit Plans, whether
or not accrued, contingent or otherwise, except (a) as previously disclosed in
writing to CMGI, and (b) for instances of noncompliance or liabilities or
obligations that would not, individually or in the aggregate, have an AV
Material Adverse Effect. Other than acceleration of vesting of options, no
employee of AV or any of its Subsidiaries will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any benefits
under any Employee Benefit Plan as a result of the transactions contemplated by
this Agreement, either alone or in combination with another event.
(c) Neither AV, any of its Subsidiaries, nor any ERISA Affiliate
has ever maintained an Employee Benefit Plan subject to Section 412 of the Code
or Title IV of ERISA.
(d) No Employee Benefit Plan is funded by, associated with or
related to a "voluntary employee's beneficiary association" within the meaning
of Section 501(c)(9) of the Code.
(e) Section 3.13(e) of the Compaq Disclosure Schedule discloses
each: (i) agreement with any director, executive officer or other key employee
of AV or any of the AV Subsidiaries (A) the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of a transaction
involving AV or any of the AV Subsidiaries of the nature of any of the
transactions contemplated by this Agreement, (B) providing any term of
employment or compensation guarantee or (C) providing severance benefits or
other benefits after the termination of employment of such director, executive
officer or key employee; (ii) agreement, plan or arrangement under which any
person may receive payments from AV or any of the AV Subsidiaries that may be
subject to the tax imposed by Section 4999 of the Code or included in the
determination of such person's "parachute payment" under Section 280G of the
Code; and (iii) agreement or plan binding AV or any of the AV Subsidiaries,
including without limitation any stock option plan, stock appreciation right
plan, restricted stock plan, stock purchase plan, severance benefit plan or
Employee Benefit Plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
(f) All Options are subject to a right of first refusal and a
buyback right upon termination of employment of the optionee.
3.14 Brokers . No broker, finder, investment banker or other Person
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(other than Greenhill & Co., LLC and Morgan Stanley & Co. Incorporated) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of any of CDAS.
3.15 Opinion of Financial Advisor . The Board of Directors of Compaq
------------------------------
has received the opinions of Greenhill & Co., LLC and Morgan Stanley & Co.
Incorporated, Compaq's financial advisor, substantially to the effect that the
consideration to be paid by CDAS for the shares which Digital is to receive
pursuant to this Agreement is fair to Compaq from a financial point of view.
3.16 Taxes .
-----
(a) Each of the Companies has timely filed all material Tax
Returns that it was required to file, and all such Tax Returns were correct and
complete in all material respects. Each group of corporations with which any of
the Companies has filed (or was required to file) consolidated, combined,
unitary or similar Tax Returns, other than the Compaq Group (an "Affiliated
Group") has timely filed all material Tax Returns that it was required to file
with respect to any period in which any of the Companies was a member of such
Affiliated Group (an "Affiliated Period"), and all such Tax Returns were true,
correct and complete in all material respects. Each of the Companies has paid
all material Taxes (whether or not shown on such Tax Returns) that were due and
payable and each Affiliated Group has paid all material Taxes (whether or not
shown on such Tax Returns) that were due and payable with respect to all
Affiliated Periods. All Taxes that any of the Companies is or was required by
law to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper taxing authority, except where the
failure to withhold or collect could not reasonably be expected to have an AV
Material Adverse Effect.
(b) Compaq's taxable year ends November 30. Each of AV, SDC and
ZIP2 joined the Compaq Group in the taxable year beginning December 1, 1998. No
examination or audit of any Tax Return of the Companies or any Affiliated Group
with respect to an Affiliated Period by any Governmental Entity is currently in
progress or, to the Knowledge of the Companies and the members of any Affiliated
Group, threatened or contemplated. None of the Companies nor the members of any
Affiliated Group has been informed by any jurisdiction that the jurisdiction
believes that any of the Companies or the Affiliated Group was required to file
any Tax Return that was not filed.
(c) None of the Companies or any Affiliated Group has waived any
statute of limitations with respect to Taxes or agreed to an extension of time
with respect to a Tax assessment or deficiency.
(d) None of the Companies is a "consenting corporation" within the
meaning of Section 341(f) of the Code, and none of the assets of any of the
Companies is subject to an election under Section 341(f) of the Code.
(e) None of the assets, or any beneficial interest therein, to be
transferred to Newco pursuant to this Agreement, has been transferred by Digital
to any of its Subsidiaries prior to the Closing.
(f) None of the Companies has any actual or potential liability
for any Taxes of any person (other than the Companies) under Treasury Regulation
Section 1.1502-6 (or any similar provision of federal, state, local, or foreign
law), or as a transferee or successor, by contract, or otherwise.
(g) None of the Companies has undergone a change in its method of
accounting resulting in an adjustment to its taxable income pursuant to Section
481(h) of the Code.
(h) None of the Companies is or has been required to make a basis
reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury
Regulation Section 1.337(d)-2(b).
(i) None of Compaq, Digital or the Companies knows of any fact or
has taken any action that could reasonably be expected to prevent the
contributions referenced in Section 1.2 from constituting a transaction
described in Section 351 of the Code.
3.17 Information in Proxy Statement . The information to be provided
--------------------------------
to CMGI by Compaq for inclusion in the Proxy Statement to be mailed to CMGI's
shareholders with respect to the Conversion will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made in the
information to be provided by Compaq, in the light of the circumstances under
which they were made, not misleading.
3.18 Undisclosed Liabilities . None of CDAS, with respect to the AV
------------------------
Business, has any liability (whether absolute or contingent), except for (a)
liabilities shown on the most recent balance sheet referred to in Section 3.6
(the "Most Recent Balance Sheet"), (b) liabilities which have arisen since the
date of the Most Recent Balance Sheet in the ordinary course of business, (c)
contractual and other liabilities incurred in the ordinary course of business
which are not required by GAAP to be reflected on a balance sheet, (d)
liabilities of SDC and ZIP2, (e) compensation expense in connection with the
issuance of Options and (f) liabilities which would not reasonably be expected,
individually or in the aggregate, to have an AV Material Adverse Effect.
3.19 Assets . Except as would reasonably not be expected to have an AV
------
Material Adverse Effect, Newco, after the consummation of the Transaction, will
own or lease all tangible assets necessary for the conduct of the AV Business as
presently conducted. Each such tangible asset which is personal property is
free from material defects, has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to normal
wear and tear) and is suitable for the purposes for which it is presently used,
other than defects and failures which would not, individually or in the
aggregate, have an AV Material Adverse Effect. Except as would reasonably not
be expected to have an AV Material Adverse Effect, no material asset of CDAS
with respect to the AV Business is subject to any Lien.
3.20 Owned Real Property . Section 3.20 of the Compaq Disclosure
---------------------
Schedule lists all real property owned by any of CDAS which is used primarily in
the AV Business. With respect to each parcel of such owned real property,
Newco, after the consummation of the Transaction, will have good and clear
record and marketable title to such parcel, free and clear of any Lien, except
for easements, covenants and other restrictions which do not materially impair
the uses and occupancy of such parcel, and a lease to a portion of property
referenced in the Compaq Disclosure Schedule.
3.21 Contracts .
---------
(a) Section 3.21 of Compaq Disclosure Schedule lists the following
agreements (written or oral) to which any of CDAS with respect to the AV
Business is a party as of the date of this Agreement:
(i) any agreement, or group of related agreements, which
involves more than $1,000,000;
(ii) any agreement under which the AV Business, AV or any AV
Subsidiary has incurred, assumed or guaranteed, or may assume or guarantee,
indebtedness for borrowed money (including capitalized lease obligations) of
more than $1,000,000;
(iii) any agreement restricting the AV Business, AV or any AV
Subsidiary from competing in any manner;
(iv) any agreement with an officer or director of the AV
Business; and
(v) any agreement under which the consequences of a default
or termination would be reasonably expected to have an AV Material Adverse
Effect.
(b) Compaq has made available to CMGI a copy of each agreement
listed in Section 3.21 of the Compaq Disclosure Schedule. None of CDAS, nor, to
the Knowledge of CDAS, any other party, is in breach or violation of, or default
under, any such agreement, which would reasonably be expected to result in an AV
Material Adverse Effect.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Funding of the AV Business .
------------------------------
(a) During the period prior to the Closing Date, Compaq will
provide cash for the AV Business in monthly amounts equal to one-third of the AV
Budget (as previously furnished to CMGI) for the applicable quarter. Any
funding in excess of that amount shall be subject to agreement by CMGI and
Compaq.
(b) On the Closing Date and prior to the Effective Time, Compaq
will make a cash capital contribution to the AV Business or the AV Business will
pay a cash dividend (or otherwise transfer cash) to Compaq such that the
remainder of the cash and cash equivalents of the AV Business minus its
indebtedness for borrowed money will be equal to zero.
4.2 Conduct of the AV Business . Except as set forth in Section 4.2 of
--------------------------
the Compaq Disclosure Schedule, during the period from the date of this
Agreement to the Closing Date (unless CMGI shall otherwise agree in writing and
except as otherwise contemplated by this Agreement), CDAS will conduct the
operations of the AV Business in the ordinary course of business consistent with
past practice and shall use all reasonable efforts to preserve intact its
current business organizations, keep available the services of their current
officers and employees, maintain its material contracts and preserve its
relationships with customers, suppliers and others having business dealings with
it. Without limiting the generality of the foregoing, and except as otherwise
contemplated by this Agreement, or as set forth in Section 4.2 of the Compaq
Disclosure Schedule, or as agreed to in writing by CMGI, CDAS with respect to
the AV Business agree that:
(a) Issuance of Securities. Except for issuing options to
------------------------
purchase up to 500,000 shares of stock under the AltaVista 1999 Stock Option
Plan (upon terms to be mutually approved by CMGI), neither AV nor any AV
Subsidiary shall issue, sell, grant, dispose of or authorize or propose the
issuance, sale or disposition of (i) any additional shares of capital stock of
any class, or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for any shares of capital stock, or any
rights, warrants, options, calls, commitments or any other agreements of any
character to purchase or acquire any shares of capital stock or any securities
or rights convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock or (ii) any other securities in
respect of, in lieu of, or in substitution for, shares outstanding on the date
hereof.
(b) Restructuring. Neither AV nor any AV Subsidiary shall adopt a
-------------
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization.
(c) Governing Documents. Except for an amendment to the AV
--------------------
Certificate of Incorporation to increase its authorized common stock, AV shall
not adopt any amendments to its Organizational Documents, or alter through
merger, liquidation, reorganization, restructuring or in any other fashion its
corporate structure or ownership of any AV Subsidiary.
(d) No Acquisitions. None of CDAS, with respect to the AV
----------------
Business, shall acquire or agree to acquire (i) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, limited liability company, partnership,
association or other business organization or division thereof or (ii) any
assets that, individually or in the aggregate, are material to the AV Business.
(e) No Dispositions. Except in the ordinary course of business
----------------
consistent with past practice, neither AV nor any AV Subsidiary shall sell,
lease, license or otherwise encumber or subject to any Lien or otherwise dispose
of any of its properties or assets with respect to the AV Business.
(f) Capital Expenditures. None of CDAS shall commit to make any
---------------------
capital expenditures with respect to the AV Business relating to a single
project in excess of $1,000,000 or in the aggregate in excess of $15,000,000.
(g) Employee Matters. Except as required by Law or in accordance
-----------------
with this Agreement, none of CDAS, with respect to the AV Business, shall (i)
increase the compensation of any of its respective employees, other than
non-officer employees in the ordinary course of business consistent with past
practice as to both frequency and amount, (ii) amend or enter into any Contract
with any of its respective employees regarding his or her employment,
compensation or benefits, other than offer letters to prospective employees in
the ordinary course of business and stock options permitted by Section 4.2(a),
or (iii) adopt any employee benefit plan as defined in Section 3(3) of ERISA
("Plan"), arrangement or policy which would become a Plan or amend any Plan.
(h) Liens. None of CDAS shall create, incur or assume any
-----
material Lien on any of their material assets with respect to the AV Business.
(i) Claims. None of CDAS shall settle any material claim, action
------
or proceeding involving money damages or waive or release any material rights or
claims with respect to the AV Business, except in the ordinary course of
business.
(j) Representations and Warranties. Neither Compaq nor AV shall
--------------------------------
(i) take, or agree or commit to take any action that would make any
representation and warranty of Compaq and AV hereunder inaccurate in any
material respect on the Closing Date, or (ii) omit, or agree to omit, to take
any action necessary to prevent any such representation or warranty from being
inaccurate in any material respect on the Closing Date; provided, however, that
-------- -------
Compaq and AV shall be permitted to take or omit to take such action which can
be cured, and in fact is cured, at or prior to the Closing Date.
(k) Intellectual Property. None of CDAS shall transfer or license
---------------------
to any Person any rights to Intellectual Property used primarily in the AV
Business, other than to customers in the ordinary course of business.
(l) Contracts. None of CDAS shall enter into (i) any Contract
---------
which, if entered into prior to the date of this Agreement, would have been
required to be disclosed in Section 3.21 of the Compaq Disclosure Schedule or
(ii) any Contract with a party other than a majority-owned CMGI Subsidiary for
services to be used in the AV Business that could be provided on reasonably
comparable terms from a majority-owned CMGI Subsidiary.
(m) No Agreements. None of CDAS shall enter into any Contract to
--------------
do any of the foregoing.
4.3 Conduct of Business of CMGI. CMGI shall not (i) take, or agree or
----------------------------
commit to take any action that would make any representation and warranty of
CMGI hereunder inaccurate in any material respect on the Closing Date, or (ii)
omit, or agree to omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect on the
Closing Date; provided, however, that CMGI shall be permitted to take or omit to
-------- -------
take such action which can be cured, and in fact is cured, at or prior to the
Closing Date.
ARTICLE V
SALE OF SHARES; BOARD MEMBERSHIP; VOTING AGREEMENT; STANDSTILL
5.1 Lock-Up . Without the prior written consent of CMGI, neither
-------
Compaq nor any of its Subsidiaries may offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge, transfer or grant any rights with
respect to, or enter into any short sale or otherwise hedge against
(collectively, a "Share Disposition") any Acquisition Shares on or prior to the
first anniversary of the Closing Date; provided, however, that the provisions of
-------- -------
this Section 5.1 shall not prohibit any Share Disposition among Compaq and its
Subsidiaries, provided that any such transferee agrees to be bound by the terms
--------
of this Agreement, including without limitation this Section 5.1. After the
first anniversary of the Closing Date, Compaq or its Subsidiaries may transfer
or otherwise dispose of the Acquisition Shares only: (i) pursuant to the
Registration Rights Agreement, (ii) pursuant to Rule 144 promulgated under the
Securities Act, to the extent applicable, or (iii) pursuant to privately
negotiated sales; provided that (A) neither Compaq nor any of its Subsidiaries
--------
shall knowingly sell a number of Acquisition Shares equal to more than 5% of the
then outstanding shares of Common Stock of CMGI to any single Person (or
affiliates of such Person) other than to a broker-dealer for resale, (B) during
the period from twelve months to eighteen months after the Closing, Compaq and
its Subsidiaries shall not sell more than 50% of the Acquisition Shares and
during the period from eighteen months to twenty-four months after the Closing,
Compaq and its Subsidiaries shall not sell more than 50% of the Acquisition
Shares, and (C) Compaq and its Subsidiaries shall not, other than pursuant to an
underwritten public offering pursuant to the Registration Rights Agreement, sell
a number of Acquisition Shares on any day equal to more than 10% of the average
daily trading volume for CMGI Common Stock during the prior week.
5.2 Rights of First Offer . In the event of a proposed Share
------------------------
Disposition to any single Person (or affiliates of such Person) of 3,000,000 or
more Acquisition Shares (subject to appropriate adjustment in the case of a
stock split, stock dividend, reclassification or similar event) by (i) Compaq,
(ii) Subsidiaries of Compaq who shall have acquired Acquisition Shares from
Compaq or any other Subsidiaries of Compaq or (iii) Compaq and one or more of
such Subsidiaries together, other than in connection with a registration
pursuant to the Registration Rights Agreement, Compaq or such Subsidiary shall
first offer such Acquisition Shares to CMGI by delivery of a written notice (the
"Offer Notice") to CMGI specifying the number of Acquisition Shares proposed to
be sold or transferred, the price to be paid for such shares and the other
material terms and conditions of the proposed sale. CMGI shall have the right to
purchase all but not less than all of the Acquisition Shares specified in the
Offer Notice, which right may be exercised only by delivery to Compaq within 10
business days after the Offer Notice shall have been delivered to CMGI of a
written notice (the "Acceptance Notice) setting forth its acceptance of Compaq's
offer. In the event that CMGI does not deliver an Acceptance Notice to Compaq
by the close of business on the tenth business day following Compaq's delivery
of an Offer Notice (the "Last Acceptance Day"), Compaq (or Compaq's Subsidiaries
or Compaq and its affiliates) shall be free to sell or transfer up to the number
of Acquisition Shares specified in the Offer Notice for a period of 90 days
after the Last Acceptance Day to one or more Persons; provided, however, that
-------- -------
any Acquisition Shares not sold within such 90 day period shall, if proposed to
be sold or transferred in sale or transfer of 3,000,000 or more Acquisition
Shares (subject to appropriate adjustment in the case of stock split, stock
dividend, reclassification or similar event), shall thereafter be offered to
CMGI in accordance with this Section 5.2. In the event that CMGI delivers an
Acceptance Notice prior to the Last Acceptance Day, the closing of the purchase
of Acquisition Shares by CMGI shall take place 30 days after the date of
Acceptance Notice.
5.3 Registration Rights . Compaq and CMGI will at the Closing enter
--------------------
into a Registration Rights Agreement substantially in the form attached hereto
as Exhibit D (the "Registration Rights Agreement").
----------
5.4 Board Designee .
---------------
(a) The Board of Directors of CMGI (the "Board"), shall elect,
effective as of the Effective Time, a member of the Board designated by Compaq
(the "Compaq Designee"). In connection with any meeting of the stockholders of
Newco at which members of the Board are to be elected and at which the term of
the Compaq Designee expires, the Board, or the applicable committee, shall
nominate and recommend to its stockholders one Compaq Designee. In the event
that a Compaq Designee dies, retires, or is otherwise removed from the Board,
the Board shall elect as a replacement a new Compaq Designee. If at any time
Compaq or an affiliate of Compaq owns less than 5% of the issued and outstanding
stock of CMGI, the Compaq Designee shall resign from the Board, and Compaq shall
no longer have any rights under this section to designate a member of the Board.
(b) The Board of Directors of Newco (the "AV Board"), shall elect,
effective as of the Effective Time, a member of the AV Board designated by
Compaq (the "Compaq AV Designee"). In connection with any meeting of the
stockholders of Newco at which members of the AV Board are to be elected and at
which the term of the Compaq AV Designee expires, the Board or the applicable
committee shall nominate and recommend to its stockholders one Compaq AV
Designee. In the event that a Compaq AV Designee dies, retires, or is otherwise
removed from the AV Board, the AV Board shall elect as a replacement a new
Compaq AV Designee. If at any time Compaq or an affiliate of AV Compaq owns
less than 5% of the issued and outstanding stock of Newco, the Compaq AV
Designee shall resign from the AV Board and Compaq shall no longer have any
rights under this section to designate a member of the AV Board.
5.5 Voting Agreement . On the date hereof David S. Wetherell is
-----------------
entering into a Voting Agreement.
5.6 Standstill . Until June 30, 2009, neither Compaq nor any of its
----------
Subsidiaries shall, alone with others, in any manner (i) acquire or agree to
acquire, or make any proposal (or request permission to make any proposal) to
acquire any securities or indirect rights, warrants to acquire any securities,
or any significant portion of the assets of, CMGI (other than property
transferred in the ordinary course of CMGI's business), (ii) solicit or propose
to solicit proxies from stockholders of CMGI, (iii) form, join or in any way
participate in "group" (within the meaning of Section 13d(3) of the Exchange
Act) with respect to any voting securities of CMGI, (iv) publicly announce or
refer to any possible business combination with CMGI or disclose any intention,
plan or arrangement for such a business combination, (v) participate in any
discussions or negotiations with any third party regarding, or furnish a third
party with information with respect to, any such business combination, (vi) make
any request or proposal to amend, modify or waive any provisions of this Section
5.6 except in a non-public and confidential matter or (vi) assist any other
person in doing any of the foregoing; provided, however, that the provisions of
-------- -------
this Section 5.6 shall cease to be binding on Compaq and its Subsidiaries in the
event that (a) any competitor of Compaq acquires more than 10% of the
outstanding voting securities of CMGI, (b) a third party makes a bona fide
unsolicited offer, which is publicly announced, to acquire more than 10% of the
outstanding voting securities of CMGI, or (c) CMGI enters into an agreement
providing for a merger or combination as a result which all or substantially all
the individuals and entities that are holders of voting securities of CMGI
immediately prior to such merger or combination own less than a majority of the
outstanding voting securities of the surviving or acquiring entity immediately
after such merger or consolidation.
5.7 Investment Company Act . For so long as Compaq and its
------------------------
Subsidiaries own 5% or more of the outstanding common stock of CMGI, CMGI shall
use its reasonable best efforts to avoid becoming an investment company (as
defined in Section 3(a) of the Investment Company Act).
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Stockholders' Meeting .
----------------------
(a) CMGI, acting through its Board of Directors, shall, in
accordance with applicable law, as promptly as practicable following the
execution of this Agreement:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders for the purpose of considering and taking action
upon the approval of the conversion of the Series D Preferred Stock into CMGI
Common Stock (the "Conversion");
(ii) prepare and file with the SEC a preliminary form of the
Proxy Statement relating to the Conversion and use its best efforts to obtain
and furnish the information required by the SEC to be included in the Proxy
Statement and, after consultation with Compaq, to respond promptly to any
comments made by the SEC with respect to the preliminary form of the Proxy
Statement;
(iii) file a definitive form of the Proxy Statement
reflecting compliance with comments and requests of the SEC in accordance with
the Exchange Act as CMGI and Compaq shall deem appropriate;
(iv) cause a definitive Proxy Statement, including any
amendment or supplement thereto to be mailed to its stockholders, provided that
--------
no amendment or supplement to such Proxy Statement will be made by CMGI without
consultation with Compaq and its counsel;
(v) the Proxy Statement shall include therein (x) the
recommendation of CMGI's Board of Directors that stockholders of CMGI vote in
favor of the Conversion; and
(vi) use all reasonable efforts to solicit from its
stockholders proxies in favor of the Conversion.
(b) Compaq will provide CMGI with the information concerning
Compaq and AV required by the Exchange Act to be included in the Proxy
Statement.
(c) Each of CMGI and Compaq shall consult and confer with the
other and the other's counsel regarding the Proxy Statement and each shall have
the opportunity to comment on such Proxy Statement and any amendments and
supplements thereto before the Proxy Statement, and any amendments or
supplements thereto, are filed with the SEC or mailed to CMGI stockholders.
Each of CMGI and Compaq will provide to the other copies of all correspondence
between it (or its advisors) and the SEC relating to the Proxy Statement.
6.2 Access and Information . Each of the parties will, and will cause
-----------------------
its Subsidiaries to (i) afford to the other party and its officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Representatives") full access, at reasonable
times upon reasonable prior notice, to the officers, employees, agents,
properties, offices and other facilities of such party and its Subsidiaries and
to their books and records, (ii) furnish promptly to the other party and its
Representatives such information concerning the business, properties, contracts,
records and personnel of such party and its Subsidiaries (including financial,
operating and other data and information) as may be reasonably requested, from
time to time, by or on behalf of the other party; provided, however, that Compaq
and its Subsidiaries shall provide information and documents only with respect
to the AV Business. No investigation by any party hereto shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All information obtained by
Compaq or CMGI pursuant to this Section 6.2 shall be kept confidential in
accordance with the Confidentiality Agreement.
6.3 HSR Act Filing . Each party hereto shall, as promptly as
----------------
practicable, file, or cause to be filed, any required notification and report
forms under the HSR Act with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") in connection with the transactions contemplated by this Agreement,
and will use their respective reasonable best efforts to respond as promptly as
practicable to all inquiries received from the FTC or the Antitrust Division for
additional information or documentation and to cause the waiting periods under
the HSR Act to terminate or expire at the earliest possible date. Each party
hereto will each furnish to the other such necessary information and reasonable
assistance as the other may reasonably request in connection with its
preparation of necessary filings or submissions to any governmental or
regulatory agency, including, without limitation, any filings necessary under
the provisions of the HSR Act.
6.4 Reasonable Best Efforts . Upon the terms and subject to the
-------------------------
conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement including (i) the obtaining of all necessary
actions or nonactions, waivers or Consents from Governmental Entities and the
making of all necessary registrations and filings and the taking of all steps as
may be necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
Consents or waivers from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement.
6.5 Publicity . The parties will consult with each other and will
---------
mutually agree upon any press releases pertaining to the Transaction and shall
not issue any such press releases prior to such consultation and agreement,
except as may be required by applicable Law or by obligations pursuant to any
listing agreement with any national securities exchange, in which case the party
proposing to issue such press release shall use its reasonable efforts to
consult in good faith with the other party before issuing any such press
releases.
6.6 Employee Benefit Plans .
------------------------
(a) CMGI agrees that individuals who are employed by AV
immediately prior to the Effective Time shall become employees of the Surviving
Corporation following the Effective Time (each such employee, an "Affected
Employee"); provided, however, that this Section 6.6(a) shall not be construed
-------- -------
to limit the ability of the applicable employer to terminate the employment of
any Affected Employee at any time.
(b) CMGI will, or will cause the Surviving Corporation to, give
Affected Employees full credit for purposes of eligibility (including service
and waiting period requirements), vesting, benefit accrual and determination of
the level of benefits under any employee benefit plans or arrangements
maintained by CMGI or the Surviving Corporation for such Affected Employees'
service with AV or any affiliate of AV to the same extent recognized by AV
immediately prior to the Effective Time.
(c) CMGI will, or will cause the Surviving Corporation to, (i)
waive all limitations as to preexisting conditions, exclusions and waiting
periods and service requirements with respect to participation and coverage
requirements applicable to the Affected Employees under any welfare benefit
plans that such employees may be eligible to participate in after the Effective
Time, other than limitations or waiting periods that are already in effect with
respect to such employees and that have not been satisfied as of the Effective
Time under any welfare plan maintained for the Affected Employees immediately
prior to the Effective Time, and (ii) provide each Affected Employee with credit
for any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time.
(d) For a period of one year immediately following the Effective
Time, the coverage and benefits provided to Affected Employees pursuant to
employee benefit plans or arrangements maintained by CMGI or AV shall be, in the
aggregate, not less favorable than those provided to such employees immediately
prior to the Effective Time.
6.7 Restriction on Transfer of AV Shares . In no event shall Compaq or
------------------------------------
any of its Subsidiaries knowingly transfer any AV Shares to any competitor of
AV, the AV Business or the Surviving Corporation.
6.8 Funding . To the extent that Newco, after the Closing and prior to
-------
an initial public offering of Newco Common Stock, requires funding for its
operations and CMGI is willing to provide such funds, CMGI shall provide such
funding in exchange for shares of convertible preferred stock or convertible
secured notes of Newco upon terms equivalent to the terms upon which CMGI
typically provides funds to CMGI Subsidiaries; provided that, Compaq shall have
--------
the right to purchase from Newco a pro rata portion of such preferred stock or
convertible notes, as the case may be, based on the relative voting securities
then held by CMGI and Compaq except to the extent CMGI is required to purchase
such securities to be able to consolidate the results of Newco for tax purposes.
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Each Party's Obligation to Complete the Transaction .
-----------------------------------------------------------------
The respective obligations of each party to complete the Transaction are subject
to the satisfaction at or prior to the Closing Date of the following conditions:
(a) Injunction. There shall not be in effect any Law or Order of
----------
a court or governmental or regulatory agency of competent jurisdiction directing
that the transactions contemplated hereby not be consummated; provided, however
--------- -------
that prior to invoking this condition each party shall use its reasonable
efforts to have any such Order vacated.
(b) HSR Governmental Consents. The applicable waiting period under
-------------------------
the HSR Act shall have expired or terminated.
7.2 Additional Conditions to the Obligation of CMGI and Newco . The
------------------------------------------------------------
obligation of CMGI and Newco to complete the Transaction is subject to the
satisfaction at or prior to the Closing Date of the following conditions, any or
all of which may be waived in whole or in part by CMGI to the extent permitted
by applicable Law:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of Compaq and AV contained in Article III of this Agreement shall be
true and correct on the date of this Agreement and on the Closing Date as though
made on and as of the Closing Date (except to the extent that a representation
or warranty expressly speaks as of a specified date or period of time);
provided, however, that for purposes of this Section 7.2(a), such
-------- -------
representations and warranties shall be deemed to be true and correct unless the
failure or failures of such representations and warranties to be so true and
correct, without regard to any materiality qualifiers contained therein,
individually or in the aggregate, results or would reasonably be likely to
result in an AV Material Adverse Effect.
(b) Performance. Except as would not be reasonably likely to have
-----------
an AV Material Adverse Effect, CDAS shall have performed and complied with or
caused to be performed or complied with their covenants and agreements under
this Agreement to be performed or complied with at or prior to Closing.
(c) Officer's Certificate. CMGI shall have received on the
----------------------
Closing Date a certificate dated the Closing Date and executed by an executive
officer of Compaq and an executive officer of AV certifying to the fulfillment
of the conditions specified in Sections 7.2(a) and (b) hereof.
(d) Material Adverse Effect. There shall not have occurred any
-------------------------
event or condition which individually or in the aggregate has resulted in, or is
reasonably likely to result in, an AV Material Adverse Effect.
(e) Assignment Agreement. The Assignment Agreement shall have
---------------------
been executed and delivered by Compaq.
7.3 Additional Conditions to the Obligation of Compaq Digital and AV .
-----------------------------------------------------------------
The obligation of Compaq, Digital and AV to complete the Transaction is subject
to the satisfaction at or prior to the Closing Date of the following conditions,
any and all of which may be waived in whole or in part by Compaq to the extent
permitted by applicable Law:
(a) Representations and Warranties. The representations and
--------------------------------
warranties of CMGI and Newco set forth in Article Ill of this Agreement shall be
true and correct on the date of this Agreement and on the Closing Date as though
made on and as of the Closing Date (except to the extent that a representation
or warranty expressly speaks as of a specified date or period of time);
provided, however, that for purposes of this Section 7.3(a), such
-------- --------
representations and warranties shall be deemed to be true and correct unless the
failure or failures of such representations and warranties to be so true and
correct, without regard to any materiality qualifiers contained therein,
individually or in the aggregate, results or would reasonably be likely to
result in a CMGI Material Adverse Effect.
(b) Performance. Except as would not be reasonably likely to have
-----------
a CMGI Material Adverse Effect, CMGI shall have performed and complied with or
caused to be performed or complied with its respective covenants and agreements
under this Agreement to be performed or complied with at or prior to the
Closing.
(c) Officer's Certificate. CDA shall have received on the Closing
---------------------
Date a certificate dated the Closing Date and executed by an executive officer
of CMGI certifying to the fulfillment of the conditions specified in Sections
7.3(a) and (b) hereof.
(d) Material Adverse Effect. There shall not have occurred any
-------------------------
event or condition which individually or in the aggregate has resulted in, or is
reasonably be likely to result in a CMGI Material Adverse Effect.
(e) Registration Rights Agreement. The Registration Rights
-------------------------------
Agreement shall have been executed and delivered by CMGI.
(f) Assignment Agreement. The Assignment Agreement shall have
---------------------
been executed and delivered by Newco.
ARTICLE VIII
TERMINATION, AMENDMENT AND EXPENSES
8.1 Termination . This Agreement may be terminated at any time prior
-----------
to the Closing Date:
(a) by mutual written consent of CMGI and Compaq;
(b) by either CMGI or Compaq:
(i) if there shall be any Order of a Court or Governmental
Entity having jurisdiction over a party hereto which is final and nonappealable
permanently enjoining, restraining or prohibiting the consummation of the Merger
or issuance of the Acquisition Shares, unless the party relying on such Order
has not complied with its obligations under Section 7.1(b); or
(ii) if the Closing shall not have been consummated before
November 15, 1999 (the "Termination Date"); provided, however, that the right to
--------- -------
terminate this Agreement under this Section shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been a cause
of; or resulted in, the failure of the Effective Time to occur on or before the
Termination Date.
(c) by Compaq:
(i) upon a material breach of any covenant or agreement on
the part of CMGI set forth in this Agreement, or if any representation or
warranty is or becomes inaccurate in a manner such that the conditions set forth
in Section 7.3(a) would not be satisfied (a "Terminating CMGI Breach"); provided
--------
that, if such Terminating CMGI Breach is curable by CMGI through the exercise of
its reasonable efforts, provided it continues to exercise such reasonable
efforts, Compaq may not terminate this Agreement under this Section 8.1(c)(i)
until September 1, 1999; or
(ii) if there has occurred a CMGI Material Adverse Effect.
(d) by CMGI:
(i) upon a material breach of any contract or agreement on
the part of Compaq or AV set forth in this Agreement, or if any representation
or warranty is or becomes inaccurate in a manner such that the conditions set
forth in Section 7.2(a) would not be satisfied (a "Terminating Compaq Breach");
provided that, if such Terminating Compaq Breach is curable by Compaq through
--------
the exercise of its reasonable efforts, provided Compaq continues to exercise
such reasonable efforts, CMGI may not terminate this Agreement under this
Section 8.1(d)(i) until September 1, 1999; or
(ii) if there has occurred an AV Material Adverse Effect.
8.2 Effect of Termination . In the event of termination of this
-----------------------
Agreement and the abandonment of the Transaction pursuant to this Article VIII,
written notice thereof shall as promptly as practicable be given to the other
parties to this Agreement, and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto except as provided in this Section 8.2. If this
Agreement is terminated as provided herein, this Agreement shall forthwith
become void and have no effect except that (i) the obligations of the parties
set forth in the Confidentiality Agreement shall remain in effect and (ii) no
party shall be relieved from any liabilities or damages arising out of a willful
and material breach of any provision of this Agreement.
8.3 Amendment . This Agreement may be amended by the parties hereto at
---------
any time prior to the Effective Time. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
8.4 Waiver . At any time prior to the Effective Time, any party hereto
------
may (a) extend the time for the performance of any of the obligations or other
acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension
or waiver will be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
8.5 Expenses . All expenses incurred by the parties hereto will be
--------
borne solely and entirely by the party which has incurred such expenses,
provided that any legal, accounting, investment banking or similar fees and
-------- ----
expenses of AV or any AV Subsidiary in connection with the Transaction shall be
paid by Compaq.
ARTICLE IX
TAX MATTERS
9.1 Preparation and Filing of Tax Returns .
------------------------------------------
(a) Compaq shall prepare (or cause to be prepared) and timely file
or cause to be timely filed (taking into account extensions) all Tax Returns
with respect to any Pre-Closing Period that includes any of the Companies
(including all Tax Returns filed on a consolidated, combined, or unitary basis).
Compaq shall have sole discretion as to the positions in and with respect to any
Tax Return described in the preceding sentence; provided, however, that such Tax
Returns shall be prepared on a basis consistent with the past practices of
Compaq, Digital, and the Companies, unless in the opinion of CMGI's counsel,
reasonably satisfactory to Compaq, any position taken on such Tax Returns would
be likely to subject any of the Companies to penalties. Compaq shall deliver
(or cause to be delivered) to CMGI a pro forma set of Tax Returns for each of
the Pre-Closing Periods ending on the Closing Date at least twenty business days
prior to the Due Date thereof.
(b) CMGI shall prepare (or cause to be prepared) and timely file
or cause to be filed (taking into account extensions) all Tax Returns of the
Companies relating to any Post-Closing Period.
(c) CMGI shall prepare (or cause to be prepared) and timely file
or cause to be filed (taking into account extensions) all Tax Returns of the
Companies with respect to any Straddle Period. Any Straddle Period Tax Return
shall be prepared on a basis consistent with the last previous similar Tax
Return. CMGI shall cause the Companies to provide Compaq with a copy of each
such proposed Tax Return (and such additional information regarding such Tax
Return as may reasonably be requested by Compaq) at least 25 days prior to the
filing of such Tax Return, except that (i) in the case of a Tax Return relating
to a monthly taxable period, the copy shall be provided to Compaq at least 5
days prior to the filing of such Tax Return and (ii) in the case of a Tax Return
due within 90 days following the Closing Date, the copy shall be provided to
Compaq in such shorter period of time prior to filing as CMGI shall reasonably
determine to be practicable. CMGI shall permit Compaq to review and comment on
each such Tax Returns and to recommend any changes, modifications, additions, or
deletions to the extent they relate to a Pre-Closing Straddle Period, provided
that such changes, modifications, additions, or deletions are consistent with
past practice and that such reporting, in the opinion of CMGI's counsel,
reasonably satisfactory to Compaq, would not be likely to subject any of the
Companies to penalties; and provided, further, that Compaq's comments are
received by CMGI at least five business days prior to the Due Date of the
applicable Tax Return. If any dispute has not been resolved prior to the Due
Date for filing of the Tax Return, the Tax Return shall be filed as originally
proposed by CMGI, reflecting any items agreed to by the parties at such time.
Compaq shall cause to be paid to CMGI the amount of Taxes relating to any
Pre-Closing Straddle Period based on the Tax Returns filed.
9.2 Payment of Taxes .
------------------
(a) Compaq shall cause to be paid in a timely manner to the
appropriate Tax Authority all Taxes due with respect to Tax Returns which it is
required to cause to be filed pursuant to Section 9.1(a). For all Taxes in
respect of Straddle Periods for which CMGI is required to cause to be filed the
applicable Tax Returns pursuant to Section 9.1(c), Compaq shall pay CMGI the
amount of such Taxes relating to any Pre-Closing Straddle Period (as determined
in accordance with Section 9.4(b)) at least five business days prior to the Due
Date of the Tax Return reporting such Taxes.
(b) CMGI shall cause to be paid in a timely manner to the appropriate
Tax Authority all Taxes due in respect of any Tax for which it is required to
cause to be filed a Tax Return pursuant to Sections 9.1(b) and 9.1(c).
9.3 Tax Indemnification .
--------------------
(a) Indemnification by Compaq. Compaq shall indemnify CMGI in
respect of, and hold CMGI harmless on an after-Tax basis, against (x) Taxes
resulting from, relating to, or constituting a breach of any representation
contained in Section 3.16 hereof, (y) the failure to perform any covenant or
agreement set forth in this Article IX, and (z), without duplication, the
following Taxes with respect to the Companies:
(i) Any and all Taxes due and payable by any of the Companies
for any Pre-Closing Period or any Pre-Closing Straddle Period; and
(ii) Any liability of any of the Companies for Taxes of other
entities whether pursuant to Treasury Regulation Section 1.1502-6 (or comparable
or similar provisions under state, local or foreign law), as transferee or
successor or pursuant to any contractual obligation for any Pre-Closing Period
or any Pre-Closing Straddle Period.
The amounts specified in paragraphs (i) and (ii) shall be reduced (but not below
zero) by the amount of any estimated Tax payments made on or before the Closing
Date.
(b) Indemnification by CMGI. CMGI shall indemnify Compaq in
respect of, and hold Compaq harmless on an after-Tax basis, against (x) Taxes
resulting from, relating to, or constituting a breach of any representation
contained in Section 2.16 hereof, (y) the failure to perform any covenant or
agreement set forth in this Article IX, and (z) any and all Taxes due and
payable by the Companies for any Post-Closing Period or Post-Closing Straddle
Period.
(c) Transfer Taxes. Any sales, use, transfer, stamp, conveyance,
value added, recording, registration, documentary, filing or other similar Taxes
and fees, whether levied on CMGI, Compaq, any of the Companies or any of their
respective Affiliates, resulting from this Agreement or the transactions
contemplated hereby shall be shared equally by CMGI and Compaq.
(d) Limitation on Indemnification. Notwithstanding anything to
the contrary in this Agreement, (i) Compaq's indemnification obligation for
Taxes resulting from, relating to or constituting a breach of, the
representation contained in Section 3.16(e) hereof, shall not exceed $110
million plus interest thereon (compounded semi-annually at an annual rate of
10.5%) from the Closing through the date payment is made to CMGI pursuant to
this Section 9.3, and (ii) the representation contained in Section 3.16(e) shall
survive indefinitely.
9.4 Allocation of Certain Taxes .
------------------------------
(a) CMGI and Compaq agree that if any of the Companies is
permitted but not required under applicable foreign, state or local Tax laws to
treat the Closing Date as the last day of a taxable period, CMGI and Compaq
shall treat such day as the last day of a taxable period.
(b) Any Taxes for a Straddle Period with respect to the Companies
shall be apportioned for purposes of Article IX between the Pre-Closing Straddle
Period and the Post-Closing Straddle Period on the basis of an interim closing
of the books, except that Taxes imposed on a periodic basis (such as real
property Taxes) shall be allocated on a daily basis.
9.5 Cooperation on Tax Matters .
-----------------------------
(a) CMGI and Compaq and their respective Affiliates shall
cooperate in the preparation of all Tax Returns for any Tax periods for which
one party could reasonably require the assistance of the other party in
obtaining any necessary information. Such cooperation shall include, but not be
limited to, furnishing the relevant portions of prior years' Tax Returns or
return preparation packages illustrating previous reporting practices or
containing historical information relevant to the preparation of such Tax
Returns, and furnishing such other information within such party's possession
requested by the party filing such Tax Returns as is relevant to their
preparation. Such cooperation and information also shall include without
limitation provision of powers of attorney for the purpose of signing Tax
Returns and defending audits, promptly forwarding copies of appropriate notices
and forms or other communications received from or sent to any Taxing Authority
which relate to the Companies, and providing copies of the relevant portions of
all relevant Tax Returns, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by any Taxing
Authority and records concerning the ownership and tax basis of property, which
the requested party may possess. Compaq shall make its employees and facilities
available on a mutually convenient basis to provide explanation of any documents
or information provided hereunder.
(b) For a period of six (6) years after the Closing Date or such
longer period as may be required by law, CMGI shall, and shall cause the
Companies to, retain and not destroy or dispose of all Tax Returns (including
supporting materials), books and records (including computer files) of, or with
respect to the activities or Taxes of, such entities for all taxable periods
ending (or deemed, pursuant to Section 9.4, to end) on or prior to the Closing
Date to the extent CMGI, or any of the Companies received or had possession of
such records on the Closing Date. Thereafter, CMGI shall not destroy or dispose
of any such Returns, books or records unless it first offers such Returns, books
and records to Compaq in writing and Compaq fails to accept such offer within
sixty (60) days of its being made.
(c) For a period of six (6) years after the Closing Date or such
longer period as may be required by law, Compaq (or its Affiliates) shall retain
and not destroy or dispose of all Tax Returns (including supporting materials),
books and records (including computer files) of, or with respect to the
activities or Taxes of, any of the Companies for all taxable periods ending (or
deemed, pursuant to Section 9.4, to end) on or prior to the Closing Date to the
extent Compaq did not deliver such records to CMGI or the Companies.
Thereafter, Compaq shall not destroy or dispose of any such Tax Returns, books
or records unless it first offers them to CMGI in writing and CMGI fails to
accept such offer within sixty (60) days of its being made.
9.6 Termination of Tax-Sharing Agreements . All Tax sharing agreements
-------------------------------------
or similar arrangements with respect to or involving any of the Companies shall
be terminated prior to the Closing Date and, after the Closing Date, the
Companies shall not be bound thereby or have any liability thereunder.
9.7 Certain Tax Elections . To the maximum extent permitted by
-----------------------
applicable law, neither CMGI nor any of its Affiliates will carry back to any
taxable period of Compaq or any of its Subsidiaries or Affiliates any loss,
credit or deduction incurred or generated in, or attributable to any period
commencing after the Closing Date that would affect any Tax Return or Tax of
Compaq or any of its Subsidiaries or Affiliates, and CMGI agrees to make or
exercise, or cause to be made or exercised, any and all necessary or permitted
elections (including elections pursuant to Section 172(b)(3)(C) of the Code)
available under applicable law to avoid any such carryback.
9.8 Tax Claims .
-----------
(a) Compaq shall have exclusive control over Tax Claims for which
Compaq is liable pursuant to Section 9.1(a).
(b) CMGI and Compaq shall jointly have control (at each party's
own expense) over Tax Claims that relate to any Straddle Period. Neither party
may settle, concede or make any concession without the other party's written
consent.
(c) CMGI shall have exclusive control over all other Tax Claims.
(d) The party controlling a Tax Claim pursuant to this Section 9.8
shall have the sole right to contest, litigate and Dispose of such Tax Claim and
to employ counsel of its choice at its sole expense.
(e) CMGI or Compaq, as the case may be, shall promptly notify the
other party in writing of any Tax Claim that may reasonably be likely to result
in liability of the other party under this Agreement; provided, however, that
the failure to provide such notice shall not diminish the indemnifying party's
obligation hereunder except to the extent such failure actually prejudices the
indemnifying party's position as a result thereof. With respect to any such Tax
Claim, the party not controlling such Tax Claim shall (i) not make any
submission to any Tax Authority without offering the other party the opportunity
to review such submission, (ii) not take any action or make (or purport to
make) any representations in connection with such Tax Claim with respect to
issues affecting the other party's indemnity hereunder, (iii) keep the other
party informed as to any information that it receives regarding the progress of
such Tax Claim, (iv) provide the other party with any information that it
receives regarding the nature and amounts of any proposed Disposition of the Tax
Claim, (v) permit the other party to participate in all conferences, meetings or
proceedings with any Tax Authority in which the indemnified Tax Claim is or may
be a subject, solely to the extent such conference, meeting, or proceedings
relate to the Tax Claim, and (vi) notify the other party of all court
appearances in which the indemnified Tax Claim is or may be a subject. With
respect to any Tax Claim relating to a Pre-Closing Period for which Compaq is
liable pursuant to this Agreement, CMGI shall cause to be filed submissions at
Compaq's direction or cause to be appointed Compaq or its authorized
representatives as additional authorized representatives entitled to communicate
fully with the Internal Revenue Service solely with respect to such Tax Claim.
9.9 Refunds . Compaq shall be entitled to any refund of Taxes of any
-------
of the Companies attributable to any Pre-Closing Period and any Pre-Closing
Straddle Period. If CMGI, any of the Companies, or any of their Affiliates
receives any refund of Tax to which Compaq is entitled pursuant to this Section
9.9, CMGI shall promptly notify Compaq and shall pay the amount of any such
refund promptly after the receipt of such refund. If Compaq, or any of its
Affiliates, received any refund of Tax to which CMGI is entitled pursuant to
this Section 9.9, Compaq shall promptly notify CMGI and shall pay the amount of
any such refund promptly after the receipt of such refund.
9.10 Treatment of the Contributions . Each of the parties hereto shall
------------------------------
treat the contributions referenced in Section 1.2 as a transaction described in
Section 351 of the Code for all tax purposes, and shall take no position
inconsistent therewith in any Tax Return, any proceeding before any Governmental
Entity , Taxing Authority or otherwise. The parties will promptly notify each
other of any audits, examinations, actions, or proceedings by any Taxing
Authority regarding the transactions contemplated or referred to herein.
9.11 Allocation of Considerations . The parties will allocate the
------------------------------
consideration referenced in Article I in accordance with the fair market value
of the assets, as determined mutually by CMGI and Compaq.
9.12 Tax Disputes . If the parties disagree as to the calculation of a
------------
Tax or the amount of any payment to be made under this Agreement or disagree as
to the application or interpretation of any provision under this Article IX, the
parties shall cooperate in good faith to resolve any such dispute, and any
agreed-upon amount shall be paid to the appropriate party. If the parties are
unable to resolve any such dispute within fifteen business days thereafter, such
dispute shall be resolved by an internationally recognized accounting firm
acceptable to both CMGI and Compaq. The decision of such firm shall be final
and binding. The fees and expenses incurred in connection with such decision
shall be shared by CMGI and Compaq in accordance with the final allocation of
the Tax liability in dispute. Following the decision of such accounting firm,
the parties shall each take (or cause to be taken) any action that is necessary
or appropriate to implement such decision, including, without limitation, the
filing of amended Tax Returns and the prompt payment of underpayments or
overpayment, with interest calculated on such underpayments or overpayment at
the prime rate from the date such payment was due.
9.13 Adjustment to Consideration . Any payments made pursuant to this
----------------------------
Article IX shall be treated as an adjustment to the consideration payable under
this Agreement for all Tax purposes.
ARTICLE X
DEFINITIONS AND INTERPRETATION
10.1 Certain Definitions . For purposes of this Agreement, except as
--------------------
otherwise provided or unless the context clearly requires otherwise:
"Acquisition Shares" shall mean the shares of CMGI Common Stock received by
Compaq and/or Digital pursuant to the Transaction.
"AV Business" shall mean the business of Compaq's AltaVista division,
including without limitation, SDC, ZIP2 and AV, and future business operations
contemplated with respect to such business.
"AV Material Adverse Effect" shall mean a material adverse effect on the
business, operations, condition (financial or otherwise) or results of
operations of the AV Business, other than any such effect arising out of,
attributable to or resulting from (i) any change in conditions in U.S., European
or Asian economies (including in currency exchange rates), (ii) any change in
conditions affecting the industries in which the AV Business operates, and (iii)
the effect of the public announcement of the pendency of the Transaction.
"AV Shares" shall mean shares of Newco Common Stock.
"AV Subsidiary" shall mean a Subsidiary of Compaq or Digital which is part
of the AV Business, including without limitation, ZIP2, SDC, Zip2 Bay Area, Inc.
and Shopping.com Europe B.V.
"CDAS" shall mean Compaq, Digital, AV and the AV Subsidiaries.
"CMGI Disclosure Schedule" shall mean the disclosure schedule prepared by
CMGI and delivered to Compaq concurrently with the execution of this Agreement.
"CMGI Material Adverse Effect" shall mean a material adverse effect on the
business, operations, condition (financial or otherwise) or results of
operations of CMGI and the CMGI Subsidiaries taken as a whole, other than any
such effect arising out of; attributable to or resulting from (i) any change in
conditions in U.S., European or Asian economies (including in currency exchange
rates), (ii) any change in conditions affecting the industries in which CMGI and
its Subsidiaries operate, and (iii) the effect of the public announcement of the
pendency of the Transaction; provided, however, that a failure by CMGI to meet
-------- -------
the revenue or earning predictions of equity analysts or a decline in the market
price of the CMGI Common Stock, shall not be deemed by itself to constitute a
CMGI Material Adverse Effect but the underlying causes of such failure relating
to the business of CMGI or decline may be considered in determining whether a
CMGI Material Adverse Effect occurred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Companies" shall mean AV, SDC, ZIP2 and all of their Subsidiaries.
"Compaq Disclosure Schedule" shall mean the disclosure schedule prepared by
Compaq and delivered to CMGI concurrently with the execution of this Agreement.
"Compaq Group" means the affiliated, consolidated, combined or unitary
group of which Compaq is the common parent.
"Confidentiality Agreement" shall mean a letter agreement between Compaq
and CMGI entered into in connection with the matters contemplated hereby.
"Consent" shall mean any consent, registration, approval, authorization,
waiver or similar affirmation by or of; or filing with or notification to, a
Person pursuant to any Contract, Law, Order or Permit (as such terms are defined
below).
"Contract" shall mean any written or oral agreement, arrangement,
commitment, contract, indenture, instrument, lease, license or other obligation
of any kind or character, that is binding on any Person or its capital stock,
properties or business.
"Dispose" (and with correlative meaning, "Disposition") shall mean pay,
discharge, settle or otherwise dispose.
"Due Date" shall mean, with respect to any Tax Return or payment, the date
on which such Tax Return is due to be filed with or such payment is due to be
made to the appropriate Tax Authority pursuant to applicable law, giving effect
to any applicable extensions of the time for such filing or payment.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Governmental Entity" shall mean a court, arbitral tribunal, administrative
agency or commission or other governmental or other regulatory authority or
agency.
"Knowledge" - an individual will be deemed to have "knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter. An entity (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
currently serving as an executive officer of such entity (or if the entity is
one of CDAS, an executive officer of any of CDAS with respect to the AV
Business) has Knowledge of such fact or other matter.
"Law" shall mean any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, judgment or decree, administrative or
judicial decision, and any other executive or legislative proclamation.
"Lien" shall mean any mortgage, pledge, security interest, attachment,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing) or right of others of whatever nature; provided, however, that
-------- -------
the term "Lien" shall not include (i) statutory liens for Taxes, which are not
yet due and payable or are being contested in good faith by appropriate
proceedings, (ii) statutory or common law liens to secure landlords, lessors or
renters under leases or rental agreements confined to the premises rented, (iii)
deposits or pledges made in connection with, or to secure payment of; worker's
compensation, unemployment insurance, old age pension or other social security
programs mandated under applicable Laws, (iv) statutory or common law liens in
favor of carriers, warehousemen, mechanics and materialman, to secure claims for
labor, materials or supplies and other like liens, and (v) restrictions on
transfer of securities imposed by applicable state and federal securities Laws.
"Litigation" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, demand letter, governmental or other
administrative or other proceeding, whether at law or at equity, before or by
any federal, state or foreign court, tribunal, or agency or before any
arbitrator.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other Governmental Entity.
"Organizational Documents" shall mean (a) the articles or certificate of
incorporation and the by-laws of a corporation or other equivalent
organizational documents; (b)the partnership agreement and any statement of
partnership of a general partnership; (c) the limited partnership agreement and
the certificate of limited partnership; (d) any charter or similar document
adopted or filed in connection with the creation, formation, or organization of
a Person, and (e) any amendment to any of the foregoing.
"Permit" shall mean any federal, state, local or foreign governmental
approval, authorization, certificate, license, permit or exemption to which any
Person is a party or that is or may be binding upon or inure to the benefit of
any Person or its securities, properties or business.
"Person" shall mean any individual, corporation, limited liability company,
partnership, joint venture, trust, association, Organization, Governmental
Entity or other entity.
"Post-Closing Period" shall mean any taxable period beginning after the
Closing Date.
"Post-Closing Straddle Period" shall mean with respect to a Straddle
Period, that portion of such Straddle Period that begins on the day immediately
following the Closing Date.
"Pre-Closing Period" shall mean any taxable period that ends on or prior to
the Closing Date.
"Pre-Closing Straddle Period" shall mean with respect to a Straddle Period,
that portion of such Straddle Period ending on and including the Closing Date.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Straddle Period" shall mean any taxable period that begins before and ends
after the Closing Date.
"Subsidiary" with respect to any party shall mean any corporation, limited
liability company, partnership, or other business association or entity, at
least a majority of the voting securities or economic interests of which is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries.
"Tax Authority" shall mean the Internal Revenue Service and any other
state, local or foreign governmental authority responsible for the
administration of Taxes.
"Tax Claim" shall mean a notice of deficiency, proposed adjustment,
assessment, audit, examination, suit, dispute or other claim with respect to
Taxes or a Tax Return.
"Tax Returns" will mean any declaration, return, report, schedule,
certificate, statement or other similar document (including relating or
supporting information) required to be filed with a Governmental Entity, or
where none is required to be filed with a Governmental Entity, the statement or
other document issued by a Governmental Entity in connection with any Tax,
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
"Taxes" will mean any and all federal, state, local, foreign, provincial,
territorial or other taxes, imposts, tariffs, fees, levies or other similar
assessments or liabilities and other charges of any kind, including income
taxes, ad valorem taxes, excise taxes, withholding taxes, stamp taxes or other
taxes of or with respect to gross receipts, premiums, real property, personal
property, windfall profits, sales, use, transfers, licensing, employment, social
security, workers' compensation, unemployment, payroll and franchises imposed by
or under any Law; and such terms will include any interest, fines, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any such tax or any contest or dispute thereof.
"Transaction" shall mean the transactions described in Section 1.1 and
Section 1.2, and the Merger.
"Venture Fund" means any venture capital fund controlled by CMGI.
10.2 Interpretation .
--------------
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The plural of any defined term shall have a meaning
correlative to such defined term, and words denoting any gender shall include
all genders. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any amendment, modification or re-enactment thereof;
any legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(g) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
11.1 Survival of Representations . The representations and warranties
----------------------------
in this Agreement shall survive the Effective Time for a period of 24 months.
This Section 11.1 shall not limit any covenant or agreement of the parties which
by its terms shall survive the Effective Time.
11.2 Notices . Any notice, request, instruction or other document to
-------
be given hereunder by any party to another party shall be in writing and shall
be deemed given when delivered personally, upon receipt of a transmission
confirmation (with a confirming copy sent by overnight courier) if sent by
facsimile or like transmission, and on the next business day when sent by
Federal Express, United Parcel Service, Express Mail, or other reputable
overnight courier, to the party at the following addresses (or such other
addresses for a party as shall be specified by like notice):
(a) If to Compaq, Digital or AV:
Compaq Computer Corporation
20555 State Highway 2-19
Houston, Texas 77070
Attention: General Counsel
Facsimile: (978) 493-4222
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
Facsimile: (617) 573-4822
and
AltaVista Company
529 Bryant Street
Palo Alto, California 94311
Attention: General Counsel
Facsimile: (650) 617-3526
(b) If to CMGI or Newco, to:
CMGI, Inc.
100 Brickstone Square
Andover, Massachusetts 01810
Attention: William Williams II, Esq.
Facsimile: (978) 684-3601
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Mark G. Borden, Esq.
Facsimile: (617) 526-5000
11.3 Entire Agreement No Assignment Governing Law . This Agreement (a)
--------------------------------------------
constitutes the entire agreement and supersedes all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof; (b) shall not be assigned by any party (by operation of
law or otherwise) without the prior written consent of the other parties, and
(c) shall be governed by and be construed in accordance with the laws of the
State of Delaware without giving effect to the principles of conflicts of laws
thereof.
11.4 Parties in Interest . This Agreement shall be binding upon and
---------------------
inure solely to the benefit of each party hereto and their respective successors
and assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
11.5 Counterparts . This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.6 Headings . The section and other headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.7 Severability . In case any term, provision, covenant or
------------
restriction contained in this Agreement is held to be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining terms, provisions, covenants or restrictions contained herein, and
of such term, provision, covenant or restriction in any other jurisdiction,
shall not in any way be affected or impaired thereby.
END OF AGREEMENT EXCEPT FOR SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CMGI, INC.
By: s David S. Wetherell
---------------------------
David S. Wetherell
Chairman of the Board, President and
Chief Executive Officer
COMPAQ COMPUTER CORPORATION
By: s William Strecker
------------------------
DIGITAL EQUIPMENT CORPORATION
By: s William Strecker
------------------------
ALTAVISTA COMPANY
By: s Rodney Schrock
----------------------
ZOOM NEWCO INC.
By: s William Williams II
----------------------------
William Williams II
Vice President
signature page to purchase and contribution agreement
EXHIBIT A
TERM SHEET FOR
$220,000,000 THREE YEAR NOTE
----------------------------
SUMMARY OF NOTE TERMS
Maker: CMGI, Inc., a Delaware corporation (the "Corporation")
Title: $220,000,000 Three Year Note (the "Note")
Principal Amount: $220,000,000
Term: 3 years
Interest Rate: Annual rate of 10.5% on outstanding principal, compounded
semiannually on the basis of a 360 day year.
Interest Payments: The holder of the Note is entitled to interest payments,
payable semiannually in arrears from the date of making, at
the applicable interest rate. Interest is payable at the
option of the Corporation in cash, marketable securities or
common stock of the Corporation.
Non-cash
Payments: The valuation of interest or principal payments made in
common stock of the Corporation or in marketable securities
shall be determined using the average closing trading price
for the respective security for the 10 trading days
immediately subsequent to such non-cash payment. Any shares
of common stock or marketable securities constituting an
interest or principal payment are to be freely tradeable.
Principal Payments: Principal must be paid in full upon Note expiration;
principal may be prepaid, either in whole or in part,
without penalty. Principal is payable at the option of the
Corporation in cash, marketable securities or common stock
of the Corporation.
Ranking: The Note will not be subordinated.
Default: If any interest payment is not made in full amount or when
due (subject to cure within ten business days from the date
of scheduled payment), the applicable interest rate will
increase by 3% and at the sole option of the Holder, the
term will accelerate so that all outstanding principal and
interest will become payable in full immediately.
EXHIBIT B
TERM SHEET FOR
SERIES D PREFERRED STOCK
------------------------
SUMMARY OF PREFERRED STOCK TERMS
Issuer: CMGI, Inc., a Delaware corporation (the
"Corporation")
Title: Series D Preferred Stock ("Preferred Shares")
Stated Value: $180,000,000 in the aggregate
Par Value: $.01 per share
Number of Shares
Issued: 18,090.45
Return Rate:
Annual rate of 11.0% of the stated value per share for the first six months
after issuance; 14.0% thereafter, increasing by an additional 50 basis
points for every subsequent six month period, to a maximum annual rate of
16.0%.
Record Date:
One business day prior to the scheduled quarterly dividend payment date.
Dividends:
Each holder of a Preferred Share is entitled to cumulative dividends,
payable quarterly from the date of issuance, at the applicable return rate
plus any dividend paid on the common stock, through the date of conversion.
No quarterly dividends will accrue or be payable for the first six months
after issuance in the event that the conversion occurs prior to the second
record date. The dividends are payable at the option of the Corporation in
cash, marketable securities or common stock of the Corporation.
Non-cash
Dividends:
The valuation of dividends of common stock of the Corporation or of
marketable securities shall be determined using the average closing trading
prices for the respective security for the 10 trading days immediately
subsequent to the payment of such non-cash dividends. Any shares of common
stock or marketable securities constituting a dividend are to be freely
tradeable.
Ranking:
The Preferred Shares will rank junior to Series B Convertible Preferred
Stock and Series C Convertible Preferred Stock; senior to common stock; at
least pari passu with any other class or series of capital stock thereafter
created, in each case as to distribution of assets upon voluntary or
involuntary liquidation or dissolution.
Voting:
Holders of Preferred Shares are entitled to one vote per Preferred Share on
all matters submitted to stockholders for a vote. A majority vote of the
holders of the Preferred Shares, voting as a separate series, is required
to (1) redeem or purchase any Preferred Shares, (2) issue any equity
security senior to or on a parity with the Preferred Shares (including
additional issuances of Preferred Shares), (3) approve any sale or transfer
of all or substantially all of the assets of the Company or any subsidiary,
or any consolidation or merger involving the Company or any subsidiary, or
any recapitalization, dissolution or liquidation of the Company (other than
the merger of AltaVista into Zoom Newco), and (4) amend the charter of the
Company to change the seniority rights, liquidation preferences, dividend
and conversion rights of the Preferred Shares.
Liquidation Preference:
Upon voluntary or involuntary liquidation or dissolution, the stated value
per share plus accrued and unpaid dividends and the ratable distribution,
if any, made in respect of the common stock. Certain events, including a
consolidation or merger with the original shareholders retaining 50% or
less of the voting power, or a sale of all or substantially all of the
assets of the Corporation, are deemed a liquidation.
Mandatory Redemption:
Seven years after the initial issuance of the Preferred Shares, the
Corporation must redeem all of the Preferred Shares outstanding, at a
redemption price of the stated value per share, plus accrued and unpaid
dividends.
Automatic Conversion:
In the event that the stockholders of the Corporation shall at any meeting
of stockholders approve, by a majority of votes cast and in accordance with
law and the rules and regulations applicable to the Corporation's
securities, the conversion of the Preferred Shares, the Preferred Shares
automatically will be converted into an aggregate of 1,809,045 shares of
common stock, which is the number of shares of common stock calculated by
dividing the aggregate stated value of the Preferred Shares by a price of
$99.50 per share of common stock, subject to customary adjustments for
stock splits and similar events.
EXHIBIT C
[*] Confidential treatment has been requested for certain portions of this
document. Such portions have been redacted and marked with a [*]. The
non-redacted version of this document has been sent to the Securities
and Exchange Commission pursuant to an application for confidential treatment.
ASSIGNMENT AGREEMENT
BY AND AMONG
COMPAQ COMPUTER CORPORATION,
DIGITAL EQUIPMENT CORPORATION
AND
ZOOM NEWCO INC.
ASSIGNMENT AGREEMENT (the "AGREEMENT") dated as of ________, 1999, (the
"Effective Date") by and among Compaq Computer Corporation, a Delaware
corporation ("COMPAQ"), Digital Equipment Corporation, a Massachusetts
corporation and a wholly-owned subsidiary of Compaq ("DIGITAL") and Zoom Newco
Inc., a Delaware corporation ("NEWCO").
WHEREAS, Compaq, through a wholly-owned subsidiary, currently owns a World
Wide Web site with the URL www.altavista.com that provides, among other things,
Internet search and navigation functionality;
WHEREAS, Newco intends to own and operate a premier e-commercee-service
and information hub World Wide Web platform using the technology of the
AltaVista Business (as defined below), provided by Compaq;
WHEREAS, Compaq and Digital agree, as appropriate, to contribute, transfer,
assign or license or cause its Affiliates to contribute, transfer, assign or
license the rights and assets contemplated by this Agreement and the attached
Schedules (the "CONTRIBUTION"), to Newco for the operation of the AltaVista
Platform;
NOW THEREFORE, in consideration of the premises, the mutual agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
The following definitions shall apply throughout this Agreement:
1.1 "AFFILIATE" shall mean, with respect to any specified Person, any
other Person that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
1.2 "AGREEMENT" shall have the meaning set forth in the preamble.
1.3 "ALTAVISTA" shall mean AltaVista Company, a Delaware corporation
and wholly-owned subsidiary of Digital.
1.4 "ALTAVISTA BUSINESS" shall mean the business operations for
Compaq's AltaVista division as of June 29, 1999, including without limitation,
AltaVista, Zip2 and SDC, and future business operations contemplated, in a
written development plan, as of June 29, 1999 and implemented within twelve (12)
months of such date.
1.5 "ALTAVISTA DOMAIN NAMES" shall have the meaning set forth in
Section 2.1.2(d).
1.6 "ALTAVISTA MARKS" shall have the meaning set forth in Section
2.1.2(a).
1.7 "ALTAVISTA PATENT" shall mean a patent that has been assigned to
Newco hereunder.
1.8 "ALTAVISTA PLATFORM" shall mean a Web site operated by or for
AltaVista that includes any or all of search and navigation functionality,
directories, indices, content aggregation channeling, e-commerce and e-services,
and the software implementing the foregoing.
1.9 "ALTAVISTA SHARES" shall mean the issued and outstanding shares of
common stock of AltaVista, par value $0.01 per share.
1.10 "ASSIGNED INTELLECTUAL PROPERTY" shall have the meaning set forth
in Section 2.1.2.
1.11 "ASSUMED LIABILITIES" shall have the meaning set forth in Section
2.1.8.
1.12 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.13 "COMPAQ" shall have the meaning set forth in the preamble.
1.14 "COMPAQ'S AREA OF BUSINESS" shall mean all business segments in
which Compaq sells goods or services during the applicable period, including but
not limited to all customer segments to whom Compaq sells such goods or
services.
1.15 "COMPAQ PROPERTY" shall have the meaning set forth in Section 5.1.
1.16 "COMPAQ RESERVED RIGHTS" shall mean a royalty-free, non-exclusive,
worldwide, perpetual and irrevocable right for Compaq to use, make, have made,
sell, copy, modify, display, distribute, prepare derivative works of,
sublicense, or otherwise exploit in any manner the Assigned Intellectual
Property (other than the AltaVista Marks, except as provided in Article 6),
provided, however, that the Compaq Reserved Rights shall not include the right
----
for Compaq to sublicense its rights in any Assigned Intellectual Property
assigned to Newco hereunder other than (i) in connection with products and
services of Compaq distributed or provided to end users or distributors in the
ordinary course of business or (ii) as part of a derivative work created by or
on behalf of Compaq, and provided further, that Compaq may not grant a
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sublicense to any AltaVista Patent as part of any cross-license of substantially
the entire portfolio of Compaq or Digital patents. The foregoing rights shall
not be transferable, other than to Affiliates of Compaq, except in connection
with the sale of all or substantially all of Compaq's assets, whether by merger,
asset purchase, or otherwise.
1.17 "DIGITAL" shall have the meaning set forth in the preamble.
1.18 "GOVERNMENTAL ENTITY" shall have the meaning set forth in Section
4.1
1.19 "INDEMNIFIED PARTY" shall have the meaning set forth in Section
10.3.
1.20 "INDEMNIFYING PARTY" shall have the meaning set forth in Section
10.3.
1.21 "CONTRIBUTION" shall have the meaning set forth in the preamble.
1.22 "INTELLECTUAL PROPERTY" shall mean all trademarks, service marks,
trade names, Internet domain names, designs, logos, slogans and general
intangibles of like nature, together with goodwill, patents, copyrights
(including registrations and applications for each of the foregoing); inventions
(both patentable and not patentable); computer programs, including any and all
software implementations of algorithms, models and methodologies in both source
code and object code form, all documentation, including user manuals and
training materials, related to any of the foregoing; confidential information,
technology, know-how, processes, formulae, algorithms, models and methodologies.
1.23 "MARKS" shall mean trademarks, service marks, Internet domain
names, trade names, logos and designs, together with applications and
registrations of the foregoing.
1.24 "NEWCO" shall have the meaning set forth in the preamble.
1.25 "PERSON" shall mean any individual, bank, partnership, firm,
corporation, limited liability company, association, trust, or any other entity
or organization.
1.26 "RETAINED INTELLECTUAL PROPERTY" shall have the meaning set forth
in Section 2.1.7.
1.27 "RETAINED LIABILITIES" shall have the meaning set forth in Section
2.1.8.
1.28 "SDC" shall mean Shopping.com, a California corporation.
1.29 "THIRD PERSON ASSERTION" shall have the meaning set forth in
Section 10.3.
1.30 "ZIP2" shall mean Zip2 Corporation, a California corporation.
2. DELIVERIES
2.1 Deliveries of Compaq and Digital.
------------------------------------
2.1.1 Digital and Compaq hereby transfer and deliver the shares of
stock listed on Schedule A to Newco.
-----------
2.1.2 Intellectual Property. Subject to the Compaq Reserved Rights,
----------------------
Compaq itself, or through its Affiliates, hereby assigns, transfers, and
delivers to Newco, and Newco hereby accepts all of Compaq's and its Affiliates'
right, title, and interest in and to the intellectual property listed below (the
"ASSIGNED INTELLECTUAL PROPERTY"), including without limitation, (w) all rights
of priority under international agreements to which the United States adheres;
(x) the rights to enforce the Assigned Intellectual Property; (y) all income,
royalties, damages, claims, and payments now or hereafter due or payable with
respect thereto, and all rights corresponding thereto throughout the world; and
(z) (subject to Section 2.1.8) all of Compaq's and its Affiliates' obligations
under any existing license agreements.
(a) All Marks used primarily in the AltaVista Business including but
not limited to those set forth on Schedule 2.1.2(a) (the "ALTAVISTA MARKS"),
together with the goodwill connected with the use of and symbolized by the
AltaVista Marks, and all renewals thereof, and all intent-to-use applications
for the AltaVista Marks, together with the portion of the AltaVista Business to
which such Marks apply;
(b) All copyrights used primarily in the AltaVista Business and known
by AltaVista as of June 29, 1999, including but not limited to those set forth
on Schedule 2.1.2(b), and all renewals thereof, as determined pursuant to the
Letter Agreement by and among Compaq, Digital, Newco, CMGI, Inc. and AltaVista
dated as of [ ] (hereinafter, the "Letter Agreement");
(c) (i) The patents and patent applications, and the inventions
described therein, set forth on Schedule 2.1.2(c), and all patent applications
entitled to claim priority thereof (including, but not limited to continuations,
continuations-in-part, continued prosecution applications, divisions, reissues,
and reexaminations and all foreign counterparts thereof); (ii) certain
inventions as set forth on Schedule 2.1.2(c); and (iii) any additional patents
and patent applications agreed upon pursuant to the Letter Agreement;
(d) All Internet domain names used primarily in the AltaVista
Business including but not limited to those set forth on Schedule 2.1.1(d) (the
"ALTAVISTA DOMAIN NAMES"); and
(e) All technology, software (including but not limited to source
code, object code, content, supporting documentation and other data), know-how,
trade secrets, methods, algorithms and formulae used primarily in the AltaVista
Business and known by AltaVista as of June 29, 1999;
(f) All Intellectual Property developed by employees of AltaVista
between June 29, 1999 and the Effective Date.
2.1.3 [RESERVED]
2.1.4 Third-Party Agreements. To the extent permissible under their
-----------------------
terms, Compaq, itself or through its Affiliates, hereby assigns, transfers, and
delivers to Newco, Compaq's and its Affiliates' rights in the third-party
agreements used primarily in the AltaVista Business, including without
limitation those third-party agreements listed on Schedule 2.1.4. In the event
such agreements cannot be assigned, Compaq shall use commercially reasonable
efforts to assign the rights thereunder to Newco. If Compaq is not able to
obtain the right to assign such agreements to Newco despite the use of
commercially reasonable efforts, Compaq shall use commercially reasonable
efforts to sublicense the rights thereunder to Newco. Compaq and Newco shall
split equally any fees imposed by the party to each such agreement with respect
to such assignment or sublicense. In the event that there are any third party
agreements used (other than primarily used) in the AltaVista Business and also
used in Compaq's Area of Business, such agreements shall not be assigned, but
Compaq shall either: (i) sublicense the rights to Newco, if so permitted under
the Agreement; or (ii) use commercially reasonable efforts to obtain from the
applicable vendor the right for Newco to be included in such agreement(s) until
the conclusion of their then current term(s). Compaq shall have no obligation
to pay any fees to secure such rights for Newco.
2.1.5 Hardware, Equipment and Real Estate. Compaq, itself or through
-----------------------------------
its Affiliates, hereby assigns, transfers, and delivers to Newco, all of
Compaq's and its Affiliates' right, title, and interest in and to the hardware
and equipment (including any third-party software contained thereon to the
extent assignable) and real estate (including leases) used exclusively in the
AltaVista Business, including without limitation the hardware, equipment and
real estate listed on Schedule 2.1.5, provided that the transfer to Newco of any
--------
item of hardware or equipment hereunder (i) shall not be deemed to transfer any
ownership rights with respect to Intellectual Property included therewith or
incorporated therein and (ii) shall be subject to Compaq's or the relevant
Compaq Affiliate's standard terms and conditions of sale for such item. The
parties will work together in good faith to determine whether hardware and
equipment (including any software contained thereon to the extent assignable)
used primarily in the AltaVista Business should be transferred to Newco. The
parties will agree in good faith on an orderly transition, including an
equitable allocation of costs, with respect to any hardware and equipment used
in the AltaVista Business and not transferred to Newco hereunder.
2.1.6 Third Party Consents. If any transfer or assignment by
----------------------
Compaq, or any assumption by Newco, of any interest in, or liability, obligation
or commitment under, any asset requires the consent of a third party, then such
assignment or assumption is hereby made subject to such consent being obtained,
and Compaq shall use commercially reasonable efforts to obtain such consents.
2.1.7 License from Compaq to Newco. Subject to the terms and
--------------------------------
conditions of this Agreement, Compaq, itself or through its Affiliates, hereby
grants to Newco a royalty-free, non-exclusive, non-transferable, worldwide,
perpetual and irrevocable license and right to use, make, have made, sell, copy,
modify, display, distribute, prepare derivative works of, or otherwise exploit
the Intellectual Property existing as of the Effective Date, and that is
currently used or currently planned (as of June 29, 1999) to be used in the
AltaVista Business (other than the Assigned Intellectual Property) (the
"RETAINED INTELLECTUAL PROPERTY") and known as of June 29, 1999 by AltaVista,
provided that the foregoing rights may be exploited solely in connection with
--------
the operation of the AltaVista Platform. For purposes of this Section 2.1.7,
"currently planned" means there is recorded, tangible documentation of a
development plan to use such Intellectual Property and the plan is implemented
within 12 months of June 29, 1999. Newco shall have the right to sublicense the
Retained Intellectual Property solely as part of the AltaVista Platform, whether
or not that Platform is incorporated into a Newco product or service. The
foregoing rights shall not be transferable, other than to Affiliates of Newco,
except in connection with the sale of all or substantially all of Newco's
assets, whether by merger, asset purchase or otherwise. Notwithstanding
anything in this Agreement to the contrary, Newco's use of any software owned by
Compaq or an Affiliate and licensed to Newco hereunder that is commercially
available or currently planned for commercial release shall be subject to
Compaq's standard terms and conditions for such software, except that Newco will
not be required to pay any fees in connection with its use of such software in
connection with the AltaVista Business.
2.1.8 Liabilities. Compaq shall retain (i) all pending or threatened
-----------
causes of action, claims and demands relating to the AltaVista Business and
Compaq that arose prior to the Effective Date and all future claims relating to
the subject matter of such pending or threatened litigation including without
limitation relating to Shopping.com, Inc. (collectively, "LITIGATION") and (ii)
fees and expenses related to transactions between CMGI Inc. and Compaq, any
proposed spinoff transaction of assets to Newco by Compaq, any acquisition by
Compaq relating to the AltaVista Business, and any proposed initial public
offering (the foregoing subsections (i) and (ii) are hereinafter referred to
collectively as the "RETAINED LIABILITIES"). Subject to the foregoing, Newco
shall assume all liabilities relating to the assets that accrue or that arise
after the Effective Date (including performance obligations under the agreements
set forth on Schedule 2.1.4 and, subject to 2.1.8(i), any claims or demands made
after the Effective Date and relating to or arising from facts and circumstances
occurring prior to the Effective Date) being transferred to it by Compaq
pursuant to this Agreement (the "ASSUMED LIABILITIES"). Assumed Liabilities
shall also include claims where certain of the facts giving rise to the claim
occurred after the Effective Date. Newco shall reasonably cooperate fully with
Compaq in the defense of any Litigation and shall make available to Compaq all
information and documentation in its possession or control relating to any
Litigation.
2.1.9 Compaq shall maintain in confidence all Assigned Intellectual
Property that was maintained in confidence by Compaq prior to the Effective
Date.
3. REPRESENTATIONS AND WARRANTIES
3.1 Compaq Warranties. Compaq hereby represents and warrants to Newco
-------------------
as of the Effective Date that:
3.1.1 Compaq is a corporation duly organized and validly existing
under the laws of the state of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted;
3.1.2 The execution, delivery and performance by Compaq of this
Agreement are within the corporate powers of Compaq and have been duly
authorized by all necessary corporate action on the part of Compaq. This
Agreement constitutes a valid and binding agreement of Compaq enforceable
against Compaq in accordance with its terms;
3.1.3 The execution, delivery and performance by Compaq of this
Agreement requires no action by or in respect of, or filing with, any
governmental body, agency or official; and
3.1.4 The execution, delivery and performance by Compaq of this
Agreement do not and will not (i) violate the organizational documents of
Compaq, (ii) violate any applicable law, judgment, injunction, order or decree,
or (iii) require any notice or consent or other action by any person or entity,
constitute a default, or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Compaq or to a loss of any benefit to
which Compaq is entitled, under any agreement or other instrument binding upon
Compaq or any license, franchise, permit or other similar authorization held by
Compaq.
3.1.5 To the knowledge of Compaq, the Assigned Intellectual Property,
the license to the Retained Intellectual Property, and Compaq's third party
agreements (on the assumption they are all assignable) are the intellectual
property rights sufficient to operate the AltaVista Business, except where the
absence of such rights would not have an AltaVista Material Adverse Effect (as
defined in the Purchase and Contribution Agreement).
3.2 Newco Warranties. Newco hereby represents and warrants to Compaq
-----------------
as of the Effective Date that:
3.2.1 Newco is a corporation duly organized and validly existing
under the laws of the state of its incorporation and has all corporate powers
and all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted;
3.2.2 The execution, delivery and performance by Newco of this
Agreement are within the corporate powers of Newco and have been duly authorized
by all necessary corporate action on the part of Newco. This Agreement
constitutes a valid and binding agreement of Newco enforceable against Newco in
accordance with its terms;
3.2.3 The execution, delivery and performance by Newco of this
Agreement require no action by or in respect of, or filing with, any
governmental body, agency or official;
3.2.4 The execution, delivery and performance by Newco of this
Agreement does not and will not (i) violate the organizational documents of
Newco, (ii) violate any applicable law, judgment, injunction, order or decree,
or (iii) require any notice or consent or other action by any person under,
constitute a default under, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Newco or to a loss of
any benefit to which Newco is entitled under, any agreement or other instrument
binding upon Newco or any license, franchise, permit or other similar
authorization held by Newco.
4. COVENANTS
4.1 Maintenance. Newco shall bear all expenses incurred after the
-----------
Effective Date in connection with the maintenance and prosecution of the
Assigned Intellectual Property.
4.2 Employment.
----------
4.2.1 Employees. Effective as of a date which is as soon as
---------
practicable after the Effective Date (such date, the "TRANSFER DATE"), Newco
shall employ approximately 400 employees. Nothing in this Agreement shall
require Newco to employ any such employee on other than an exclusively "at will"
basis, except as otherwise required by any employment contract or union contract
with or covering such employees. Similar treatment will apply to other
employees who commence employment with Newco from a Compaq Affiliate after the
Transfer Date.
4.3 [RESERVED]
4.4 Connectivity. For a period of three years from the Effective Date,
------------
Compaq agrees to continue to provide to Newco at no charge to Newco, backbone
Internet connectivity via the Palo Alto Internet Exchange to the same extent as
Compaq is providing such connectivity for the AltaVista Business immediately
prior to June 29, 1999.
5. OWNERSHIP.
5.1 Compaq's Ownership Rights. The parties hereby acknowledge and
---------------------------
agree that, as between Compaq and its Affiliates, on the one hand, and Newco, on
the other hand: (i) all right, title and interest to all Retained Intellectual
Property (the "COMPAQ PROPERTY") is the sole and exclusive property of Compaq
(or the relevant Compaq Affiliate); (ii) Newco has no rights in the Compaq
Property except as expressly granted herein; and (iii) Newco will not take any
action or permit any action to be taken with respect to such Compaq Property
inconsistent with the foregoing acknowledgment.
5.2 Newco Ownership Rights. The parties hereby acknowledge and agree
------------------------
that, as between Compaq and Newco: (i) all right, title and interest to all
Assigned Intellectual Property is the sole and exclusive property of Newco; (ii)
except for the Compaq Reserved Rights, Compaq and its Affiliates have no rights
in the Assigned Intellectual Property; and (iii) Compaq and its Affiliates will
not take any action or permit any action to be taken with respect to such
Assigned Intellectual Property inconsistent with the foregoing acknowledgment.
Compaq acknowledges that it and its Affiliates are not joint owners of any of
the Assigned Intellectual Property.
6. TRADEMARK LICENSE.
6.1 Use of AltaVista Marks. Newco hereby grants to Compaq and its
-------------------------
Affiliates a non-exclusive, royalty-free license to use, reproduce, distribute
and display the AltaVista Marks in connection with any Compaq products or
services incorporating such Marks as of the Effective Date. Such license shall
terminate six (6) months after the Effective Date.
6.2 Quality Control. Newco shall have the right to exercise quality
----------------
control over the use of the AltaVista Marks by Compaq and its Affiliates and the
Compaq products and services with which the Marks are used to the degree
necessary, in the sole opinion of Newco, to maintain the validity and
enforceability of such Marks and to protect the goodwill associated therewith.
In the event that Newco finds that use of any Mark by Compaq and/or its
Affiliates in the reasonable opinion of Newco materially threatens the goodwill
of such Mark or fails to comply with Newco's reasonable quality standards for
such products and services, Compaq shall, upon notice from Newco, immediately,
and no later than ten (10) days after receipt of Newco's notice, take all
measures reasonably necessary to correct the identified deviations or
misrepresentation in, or misuse of, the relevant items.
7. TERMINATION.
7.1 Termination for Breach. This Agreement may be terminated by a
------------------------
party upon the material breach of this Agreement by the other party which breach
is not cured within 30 days of notice of such breach.
7.2 Survival. The terms of Articles 1, 5 and 10 and Sections 2.1.7,
--------
2.1.8 and 2.1.9 of this Agreement shall survive the termination or expiration of
this Agreement. Nothing herein, including the survivability of any license
shall preclude a party from seeking damages for breach of this Agreement.
8. EXPORT CONTROL PROVISION.
Each party shall be responsible for compliance with all applicable export
regulations relating to its export of any of the technology covered by this
Agreement.
9. TAXES.
Each of the parties hereto shall treat the contributions referenced in Section
1.2 of the Purchase and Contribution Agreement to which this Assignment
Agreement is attached as Exhibit C (the "Purchase Agreement"), as a transaction
---------
described in Section 351 of the Internal Revenue Code of 1986, as amended, for
all tax purposes, and shall take no position inconsistent therewith in any Tax
Return (as defined in the Purchase Agreement), any proceeding before any
Governmental Authority (as defined in the Purchase Agreement), Taxing Authority
(as defined in the Purchase Agreement), or otherwise. The parties will promptly
notify each other of any audits, examinations, actions or proceedings by any
Taxing Authority (as defined in the Purchase Agreement), regarding the
transactions contemplated or referred to in the Purchase Agreement.
10. INDEMNIFICATION.
10.1 Indemnification by Newco. Except as provided in this Article or
-------------------------
in Section 2.1.8 (Retained Liabilities), Newco will indemnify and hold Compaq
and its Affiliates, officers, directors and employees harmless from and against
any and all damages, costs, or expenses resulting from any claim, action, or
complaint brought by a third party against any indemnitee under this Section
10.1 ("DAMAGES"), to the extent that such claim arises from or out of (a) any
activities of Newco with respect to the AltaVista Business after the Effective
Date, other than claims of infringement of any intellectual property rights of
any third person that could have been brought by such third person prior to the
Effective Date; (b) the Assumed Liabilities; (c) any misrepresentation or breach
of representation or warranty of Newco contained herein; or (d) any breach of
any covenant or agreement to be performed by Newco hereunder.
10.2 Indemnification by Compaq. Compaq will indemnify and hold Newco
---------------------------
and its Affiliates (other than Compaq), officers, directors and employees
harmless from and against any and all damages, costs, or expenses resulting from
any claim, action, or complaint brought by a third party against any indemnitee
under this Section 10.2, to the extent that such claim arises from or out of (a)
any activities of Compaq with respect to the AltaVista Business after the
Effective Date; (b) the Retained Liabilities; (c) any misrepresentation or
breach of representation or warranty of Compaq contained herein; (d) any breach
of any covenant or agreement to be performed by Compaq or its Affiliates (other
than Newco) hereunder; or (e) any indemnification obligation of Newco or any
Newco Affiliate to officers, directors or employees arising out of activities
prior to the Effective Date.
10.3 Notice of Indemnification. A party seeking indemnification
---------------------------
pursuant to this Section 10.3 (an "INDEMNIFIED PARTY") from or against the
assertion of any claim by a third person (a "THIRD PERSON ASSERTION") will give
prompt notice to the party from whom indemnification is sought (the
"INDEMNIFYING PARTY"); provided that failure to give prompt notice will not
--------
relieve the Indemnifying Party of any liability hereunder (except to the extent
the Indemnifying Party has suffered actual material prejudice by such failure).
10.4 Assumption of Defense. Within twenty (20) business days of
-----------------------
receipt of notice from the Indemnified Party pursuant to this Section, the
Indemnifying Party will have the right, exercisable by written notice to the
Indemnified Party, to assume the defense of a Third Person Assertion. If the
Indemnifying Party assumes such defense, the Indemnifying Party may select
counsel, which counsel will be reasonably acceptable to the Indemnified Party.
10.5 Appointment of Counsel. After notice from the Indemnifying Party
-----------------------
to the Indemnified Party of its election to assume the defense of such Third
Party Assertion, the Indemnifying Party shall not be liable to the Indemnified
Party under this Article for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation, provided, that if there may be reasonable
--------
legal defenses available to it that are different from or in addition to those
available to the Indemnifying Party the reasonable fees, disbursements and other
charges of counsel for the Indemnified Party will be at the expense of the
Indemnifying Party or parties. It is understood that the Indemnifying Party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such Indemnified Party or parties.
10.6 Failure to Defend. If the Indemnifying Party (a) does not assume
------------------
the defense of any Third Person Assertion in accordance with this Article 10; or
(b) having so assumed such defense, unreasonably fails to defend against such
Third Person Assertion, then, upon five (5) days' written notice to the
Indemnifying Party, the Indemnified Party may assume the defense of such Third
Person Assertion. In such event, the Indemnified Party will be entitled under
this Article 10 to indemnification for the costs of such defense.
10.7 Settlement. The party controlling the defense of a Third Person
----------
Assertion will have the right to consent to the entry of judgment with respect
to, or otherwise settle, such Third Person Assertion with the prior written
consent of the other party, which consent will not be unreasonably withheld;
provided that such other party may withhold its consent if any such judgment or
--------------
settlement imposes a monetary obligation on such other party that is not covered
by the indemnification, imposes any material non-monetary obligation, materially
affects the rights of such other party in any Intellectual Property or does not
include an unconditional release of such other party and its Affiliates from all
claims of the Third Person Assertion.
10.8 Participation. The Indemnifying Party and the Indemnified Party
-------------
will cooperate, and cause their Affiliates to cooperate, in the defense or
prosecution of any Third Person Assertion. The Indemnifying Party or the
Indemnified Party, as the case may be, will have the right to participate, at
its own expense, in the defense or settlement of any Third Person Assertion.
11. LIMITATIONS OF LIABILITY
11.1 Limitation of Liability. EXCEPT FOR INDEMNIFICATION OBLIGATIONS,
------------------------
IF ANY, OF A PARTY PURSUANT TO ARTICLE 10, NO PARTY SHALL BE LIABLE TO ANOTHER
PARTY OR ANY OTHER PERSON OR ENTITY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR
INDIRECT DAMAGES (INCLUDING LOSS OF GOOD WILL OR BUSINESS PROFITS), OR EXEMPLARY
OR PUNITIVE DAMAGES. NO OFFICER, DIRECTOR, MANAGER, MEMBER, OR EMPLOYEE OF ANY
PARTY SHALL HAVE ANY PERSONAL LIABILITY UNDER THIS AGREEMENT.
11.2 Limitation of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
--------------------------
AGREEMENT, EACH OF DIGITAL, COMPAQ AND NEWCO EXPRESSLY DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
SPECIFIC PURPOSE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PARTY
ENDORSES, WARRANTS, OR GUARANTEES ANY PRODUCT OR SERVICE OFFERED THROUGH ITS
SITE, OR IN THE CASE OF NEWCO THE ALTAVISTA PLATFORM.
12. MISCELLANEOUS
12.1 Governing Law. Any question as to the validity, construction or
--------------
performance of this Agreement shall be construed in accordance with and subject
to the substantive laws (as opposed to the conflicts of laws provisions) of the
State of Delaware and, where applicable, the laws of the United States.
12.2 Entire Agreement. Except for the Letter Agreement, this Agreement
----------------
contains the entire understanding between Newco and Compaq with respect to its
subject matter, supersedes all previous oral or written agreements or
understandings between them with respect thereto, and shall not be modified
except by a writing signed by all parties hereto. Neither the course of conduct
between the parties nor trade usage shall act to modify or alter the provisions
of this Agreement.
12.3 No Waiver. No waiver by any party or any breach of this Agreement
---------
by any other shall be deemed to be a waiver of any preceding, or subsequent
breach thereof. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing
executed by the waiving party.
12.4 Partial Invalidity. If any portion of the Agreement shall be held
------------------
to be illegal, invalid or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Agreement shall be constructed as if such invalid, illegal or unenforceable
provision had never been contained herein.
12.5 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications required or desired to be served, given, or
delivered hereunder shall be made in writing or by a telecommunications device
capable of creating a written record and shall be addressed to the President
(with a copy sent to the General Counsel) of each party to be notified at the
respective addresses set forth on the signature page hereto or, as to each of
the parties, at such other address as designated by such party in a written
notice to the other party. Notices shall be deemed to have been duly given (i)
if delivered personally or otherwise actually received, (ii) if sent by
overnight delivery service, (iii) if mailed by first class United States mail,
postage prepaid, registered or certified, with return receipt requested, or (iv)
if sent by telecopy. Notice mailed as provided in clause (iii) above shall be
effective upon the expiration of seven days after its deposit in the United
States mail and notice sent as provided in clause (iv) above shall be effective
upon transmission. Notice given in any other manner described in this section
shall be effective upon receipt by the addressee thereof; provided, however,
-------- -------
that if any notice is tendered to an addressee and delivery thereof is refused
by such addressee, such notice shall be effective upon such tender.
12.6 Section Headings. Section headings used herein are for
-----------------
informational purposes only and shall not define nor limit the provisions of
this Agreement.
12.7 Successors and Assigns. This Agreement shall be binding upon and
-----------------------
inure to the benefit of Newco and its successors and assignees and Compaq and
its successors and assignees permitted hereunder. Neither party hereto shall
assign, subcontract or otherwise delegate its obligations hereunder without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld, except that either party may assign, subcontract or
otherwise delegate all of its rights and obligations hereunder without such
consent in connection with the sale of all or substantially all of such
assigning party's assets related to this Agreement, whether by merger, asset
purchase or otherwise.
12.8 Independent Contractors. Each party agrees it is and will be an
------------------------
independent contractor as to the other Party and not an agent, employee, partner
or joint venturer of or with the other party. Without limiting the foregoing,
no party nor any officer or employee of such will have any right to bind any
other party, to make any representations or warranties on behalf of any other
party, to accept service of process, to receive notice, or to perform any act or
thing on behalf of any other party other than as expressly authorized by such
other party in its sole discretion.
12.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each such counterpart shall be an original instrument, and all
such counterparts shall together constitute the same agreement. Execution may be
effectuated by delivery of facsimiles of signature pages (and the parties shall
follow such delivery by prompt delivery or originals of such pages).
12.10 Further AssurancesActions. At any time and from time to time,
---------------------------
each party hereto agrees, without further consideration, to take such actions
and to execute and deliver such documents as any other party hereto may
reasonably request as may be necessary effectuate the terms of this Agreement
and to consummate the transactions contemplated hereby.
12.11 Press ReleasesStatements. Except as may be required by law or by
-------------------------
the rules of any national securities exchange, no party hereto shall issue a
press release or other similar public announcement making reference to any other
party, such other party's products or the services provided hereunder, unless
such party has received the approval of the other party with respect to the
proposed text of such press release or announcement, which approval shall not be
unreasonably withheld or delayed. No party shall make or publish any statement
which is, or may be reasonably considered to be, disparaging of any other party
or its Affiliates, directors, employees, products or services.
12.12 Remedies Cumulative. No remedy conferred upon any of the parties
-------------------
by this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Assignment Agreement as of the day and year first above written.
COMPAQ COMPUTER CORPORATION
By: _________________________
Name: _______________________
Title: ______________________
20555 State Highway 249
Houston, Texas 77070
DIGITAL EQUIPMENT CORPORATION
By: _________________________
Name: _______________________
Title: ______________________
40 Old Bolton Road
Stow, Massachusetts 01775
ZOOM NEWCO INC.
By: _________________________
Name: _______________________
Title: ______________________
100 Brickstone Square
Andover, Massachusetts 01810
SCHEDULE A
1. All the issued and outstanding capital stock of AltaVista Company.
2. All the issued and outstanding capital stock of Zip2 Corporation and SDC,
except for the shares of Zip2 and SDC, if any, otherwise sold pursuant to the
Purchase and Contribution Agreement dated as of June 29, 1999 among CMGI, Inc.,
Newco, Compaq, Digital and AltaVista Company.
3. All of the shares of the capital stock of Central Corporation owned by
Compaq or its Affiliates.
4. All of the shares of the capital stock of Virage, Inc. owned by Compaq
or its Affiliates.
5. All the shares of the capital stock of Mail.com owned by Compaq or its
Affiliates.
6. One million shares of the capital stock of FreePC, Inc. owned by Compaq
or its Affiliates.
SCHEDULE 2.1.2(A)
ALTAVISTA TRADEMARKS
--------------------
MARK APPLICATION NUMBER REGISTRATION NUMBER U.S. REPORT REF PAGE FOREIGN REPORT REF PAGE
---------------- ------------------- ------------------- -------------------- ------------------------
ALTAVISTA. . . . 75-060,960 2,112,885 26 152
ALTAVISTA LOGO . 75-168,716 2,130,077 27 185
ALTA VISTA . . . 75-060,939 2,052,345 108 110
ALTAVISTA. . . . 75-100,586 2,047,808 109 152
ALTAVISTA. . . . 75-100,587 2,181,100 115 152
ALTAVISTA LOGO . 75-168,715 Pending 128 185
ALPHAVISTA . . . 75-045,919 Abandoned 270 NA
AV Photo Finder. (Common Law) NA NA
SCHEDULE 2.1.2(B)
Assigned Copyrights
-------------------
Arachne
Microscooter
Primescooter
Vscooter
Filter
Dupelim (depages, mergepairs, sortpairs, modules)
Webindexer (webindexer, module)
Babelfish
Ffscat
Vision
Pav
AVN
Marvin
Pathfinder
Gillette
Thetrip
Worklife
Tarantula
Queryfwd
SCHEDULE 2.1.2(C)
Patents and Applications to be Assigned to AltaVista
----------------------------------------------------
Patent # (US) Docket #
Issue Date Serial # Title Inventor(s)
IndTotal Claims Filing Date
=== ================= ============= ========================================== =======================
1 5,724,033 . . . . PD96-0207 Method for Encoding Delta Values M. Burrows
3398. . . . . . 08695,059
8996
2 5,745,889 . . . . PD96-0204 Method for Parsing Information of M. Burrows
42898 . . . . . 08694,793 Databases Records Using Word Location
121. . . . . . . 8996 Pairs and Metaword Location Pairs
3 5,745,890 . . . . PD96-0216 Sequential Searching of a Database Index M. Burrows
42898 . . . . . 08694,912 Using Constraints on Word Location Pairs
15 . . . . . . . 8996
4 5,745,894 . . . . PD96-0212 Method for Generating and Searching a M. Burrows
42898 . . . . . 08696,408 Range-Based Index of Word Locations A. Hisgen
14 . . . . . . . 8996
5 5,745,898 . . . . PD96-0217 Method for Generating a Compressed M. Burrows
42898 . . . . . 08695,906 Index of Information of Records of a
11 . . . . . . . 8996 Database
6 5,745,899 . . . . PD96-0206 Method for Indexing Information of a M. Burrows
42898 . . . . . 08689,541 Database
11 . . . . . . . 8996
7 5,745,900 . . . . PD96-0214 Method for Indexing Duplicate Database M. Burrows
42898 . . . . . 08711,192 Records Using a Full-Record Fingerprint
13 . . . . . . . 8996
8 5,765,149 . . . . PD96-0213 Modified Collection Frequency Ranking M. Burrows
6998. . . . . . 08695,057 Method
13 . . . . . . . 8996
9 5,765,150 . . . . PD96-0218 Method for Statistically Projecting the M. Burrows
6998. . . . . . 08695,905 Ranking of Information
13 . . . . . . . 8996
10 5,765,158 . . . . PD96-0208 Method for Sampling a Compressed Index M. Burrows
6998. . . . . . 08696,409 to Create a Summarized Index
13 . . . . . . . 8996
11 5,765,168 . . . . PD96-0215 Method for Maintaining an Index M. Burrows
6998. . . . . . 08696,816
315. . . . . . . 8996
12 5,787,435 . . . . PD96-0209 Method for Mapping an Index of a M. Burrows
72898 . . . . . 08700,748 Database into an Array of Files
8996
13 5,797,008 . . . . PD96-0205 Memory Storing an Integrated Index of M. Burrows
81898 . . . . . 08694,919 Database Records
11 . . . . . . . 8996
14 5,809,502 . . . . PD96-0211 Object-Oriented Interface for an Index M. Burrows
91598 . . . . . 08695,904
110. . . . . . . 8996
15 5,832,500 . . . . PD96-0210 Method for Searching an Index M. Burrows
11398 . . . . . 08695,060
11 . . . . . . . 8996
16 5,852,820 . . . . PD96-0219 Method for Optimizing Entries for M. Burrows
122298. . . . . 08689,542 Searching an Index
11 . . . . . . . 8996
18 na . . . . . . . PD96-119 A Method for Determining the A. Broder
na . . . . . . . 665,709 Resemblance of Documents C. Nelson
na . . . . . . . 61896
17 na . . . . . . . PD96-0069 System and Method for Creating and
na . . . . . . . 08571,748 Maintaining a Current Directory of Louis Monier
na . . . . . . . 121395 Web Pages Located on the World
Wide Web
19 na . . . . . . . PD96-0070 Method for Parsing, Indexing and M. Burrows
na . . . . . . . 08696,406 Searching World-Wide-Web Pages
na . . . . . . . 8996
21 [*] . . . . . . . [*] [*] [*]
24 [*] . . . . . . . [*] [*] [*]
26 [*] . . . . . . . [*] [*] [*]
27 [*] . . . . . . . [*] [*] [*]
28 na . . . . . . . PD96-0207-CNT Method for Encoding Delta Values M. Burrows
na . . . . . . . 09032,826
na . . . . . . . 22798
29 [*] . . . . . . . [*] [*] [*]
31 [*] . . . . . . . [*] [*] [*]
32 [*] . . . . . . . [*] [*] [*]
33 [*] . . . . . . . [*] [*] [*]
34 [*] . . . . . . . [*] [*] [*]
35 na . . . . . . . PD96-0212-CNT Method for Searching Range-Based M. Burrows
na . . . . . . . 09054,445 Values of an Index A. Hisgen
na . . . . . . . 4398
36 [*] . . . . . . . [*] [*] [*]
38 [*] . . . . . . . [*] [*] [*]
39 [*] . . . . . . . [*] [*] [*]
40 [*] . . . . . . . [*] [*] [*]
41 [*] . . . . . . . [*] [*] [*]
42 [*] . . . . . . . [*] [*] [*]
43 [*] . . . . . . . [*] [*] [*]
44 [*] . . . . . . . [*] [*] [*]
52 [*] . . . . . . . [*] [*] [*]
SCHEDULE 2.1.2(D)
Domain Names
------------
1. www.altavista.com
2. www.av.com
SCHEDULE 2.1.4
Third Party Agreements
----------------------
1. Value-Added Link Agreement between Digital Equipment Corp. and Starting
Point, LLC dated 72897.
2. Value-Added Link Agreement between Digital Equipment Corp. and The
Internet Solution (Pty) Ltd., dated 61597.
3. Value-Added Link Agreement between Digital Equipment Corp. and Thomson & Thomson, dated 10197.
4. Value-Added Link Agreement between Digital Equipment Corp. and Yahoo!
Inc., dated 7396.
5. Value-Added Link Agreement between Digital Equipment Corp. and Videotex
Nederland NV (World AccessPlanet Internet), dated 72197.
6. Value-Added Link Agreement between Digital Equipment Corp. and CNET,
Inc., dated 8__96.
7. Value-Added Link Agreement between Digital Equipment Corp. and CMP Media
Inc., dated 121696.
8. Value-Added Link Agreement between Digital Equipment Corp. and Belgium Ad
Valvas BVBA, dated 10197.
9. Value-Added Link Agreement between Digital Equipment Corp. and Belgacom
SA de Droit Public, dated 102697.
10. Value-Added Link Agreement between Digital Equipment Corp. and Digital
Insight Corporation, dated 112097.
11. Value-Added Link Agreement between Digital Equipment Corp. and
Encyclopedia Britannica, Inc., dated 6__98.
12. Value-Added Link Agreement between Digital Equipment Corp. and Findlaw
Inc., dated 91896.
13. Value-Added Link Agreement between Digital Equipment Corp. and Go2net,
Inc., dated 102797.
14. Value-Added Link Agreement between Digital Equipment Corp. and G+J
Electronic Media Service GmbH, dated 42397.
15. Value-Added Link Agreement between Digital Equipment Corp. and Kaare
Danielsen, dated 42497.
16. Value-Added Link Agreement between Digital Equipment Corp. and LookSmart
Ltd., dated 42597.
17. Value-Added Link Agreement between Digital Equipment Corp. and Modern
Technologies, dated 102497.
18. Value-Added Link Agreement between Digital Equipment Corp. and Medialink
Interactive Limited Partnership, dated 6497.
19. Value-Added Link Agreement between Digital Equipment Corp. and Objectif
Net, dated 12998.
20. Value-Added Link Agreement between Digital Equipment Corp. and Mediaone,
Inc., dated 92397.
21. Value-Added Link Agreement between Digital Equipment Corp. and Pinnacle
Publishing, Inc., dated 10197.
22. Value-Added Link Agreement between Digital Equipment Corp. and Time Inc.
New Media, dated 31298.
23. Value-Added Link Agreement between Digital Equipment Corp. and Telecom
PTT, dated 91296.
24. Value-Added Link Agreement between Digital Equipment Corp. and Info
Media Systems, dated 122096.
25. Value-Added Link Agreement between Digital Equipment Corp. and Internet
Business Connection, dated 121796.
26. Value-Added Link Agreement between Digital Equipment Corp. and General
Internet, Inc., dated 31697.
27. Value-Added Link Agreement between Digital Equipment Corp. and
Scandinavia On Line, A.B., dated 93098.
28. Value-Added Link Agreement between Digital Equipment Corp. and Netway,
dated [4196].
29. Value-Added Link Agreement between Compaq Computer Corp. and Apple
Computer, Inc., dated 92498.
30. Premier Search Services Agreement between Digital Equipment Corp. (a
wholly-owned subsidiary of Compaq Computer Corp.) and Microsoft Corporation,
dated 91698.
31. Internet Services Agreement between Compaq Computer Corp. and Cybernet
Data Systems, dated 11298.
32. Internet Services Agreement between Digital Equipment Corp. and
MarketGuide Inc., dated 5198.
33. Internet Services Agreement between Digital Equipment Corp. and II
Interactive Group, dated 52598.
34. Internet Services Agreement between Digital Equipment Corp. and iName, a
division of GlobeComm, Inc., dated 7198.
35. Internet Services Agreement between Digital Equipment Corp. and Wall
Street on Demand, dated 51598.
36. Internet Services Agreement between Digital Equipment Corp. and Centraal
Corporation, dated 4298.
37. Internet Services Agreement between Digital Equipment Corp. (a
wholly-owned subsidiary of Compaq Computer Corp.) and Hoover's Inc., dated
63098.
38. Category Supply Agreement between Digital Equipment Corp. (and its
participating majority-owned subsidiaries, affiliates) and LookSmart, Inc.,
dated 33098.
39. AltaVista Category Supply Agreement between Digital Equipment Corp. (and
its participating majority-owned subsidiaries, affiliates, and any future
parent) and Interim Services, Inc., dated 51298.
40. Procurement and Trafficking Agreement between Digital Equipment Corp.
(and its wholly-owned and majority-owned subsidiaries and affiliates) and
DoubleClick, Inc., dated 121696, as amended on 11899.
41. Premier Search Program between Digital Equipment Corp. and Yahoo! Inc.,
dated 63098.
42. Advertising Agreement between Digital Equipment Corp. acting through its
AltaVista division and Amazon.com, Inc., dated 92497.
43. Network Affiliate Agreement between Digital Equipment Corp. and Telstra
Corporation, Ltd, dated 9_96.
44. Network Affiliate Agreement between Digital Equipment Corp. and
Telefonica Publicidad e Informacion, dated 13197.
45. Network Affiliate Agreement between Digital Equipment Corp. and Alam
Teknocrat Sdn. Bhd., Ltd, dated 121396.
46. Authorized AltaVista Country Search Affiliate Agreement between Digital
Equipment Corp. (and its participating majority-owned subsidiaries and
affiliates) and Telus Advertising Services, Inc., dated 4198.
47. Mapping Service and Linking Agreement between Digital Equipment Corp.
and Vicinity, dated 5198.
48. Directory Services Agreement between Digital Equipment Corp. (and its
subsidiaries and affiliates) and Switchboard, Inc., dated 43098.
49. Co-Branded Site and Linking Agreement between Digital Equipment Corp.
and ABCNewsStarwave AIV's dba ABCNews Internet Ventures, dated 6198.
50. Digital Research Agreement between Digital Equipment Corp. (and all
subsidiary and related companies which it then or thereafter owned or
controlled) and Armines at Ecole Des Mines de Paris, dated 101196.
51. Technology License Agreement between Digital Equipment Corp. and Armines
at Ecole des Mines de Paris, dated 10696.
52. Joint Promotion Agreement between Digital Equipment Corp. and
TheTrip.com, dated 33198.
53. Consulting Services Purchase Order between Digital Corporation and
Teragram Corporation, dated 121497.
54. OEM License and Marketing Agreement between Digital Equipment Corp. and
Teragram Corp, dated 21398.
55. License Agreement between Digital Equipment Corp. (a wholly owned
subsidiary of Compaq Computer Corp.) and Surfwatch Software, Inc., dated
83198.
56. Honorary Research Agreement between Digital Equipment Corp. and Patrice
Berlin, dated 21198.
57. Consulting Services Agreement between Digital Equipment Corp. and Franz
Guenthner, dated 1198.
58. Co-Branded Site and Linking Agreement between Digital Equipment Corp.
and InteliHealth, Inc., dated 32598.
59. Agreement between Compaq Computer Corp. and Mark Kim, dated 92598.
60. Equipment Software Distribution and License Agreement between Digital
Equipment Corp. and Inxight Software, Inc. (a Xerox New Enterprise Company),
dated 123097.
61. Agreement between Digital Equipment Corp. (a wholly owned subsidiary of
Compaq Computer Corp.) and Corbis Corporation, dated 81398.
62. Agreement between Digital Equipment Corp. and Digimarc, dated 33198.
63. AltaVista Visual Search Service Agreement between Digital Equipment
Corp. (including its AltaVista Internet Software business unit and its
participating majority-owned subsidiaries and affiliates) and Virage, Inc.,
dated 63097.
64. Services Agreement between Digital Equipment Corp. (and its subsidiaries
and affiliates which it then or thereafter controls) and Systran SA, dated
6998.
65. Internet Site Agreement between Digital Equipment Corp. and Reuters
Newmedia, Inc, dated 51598.
66. U.S. Language Net Search Services Agreement -Premier Provider, between
Digital Equipment Corp. and Netscape Communications Corp., dated 52098.
67. AltaVista Rating Data Supply Agreement between Digital Equipment Corp.
(including its AltaVista search services business unit and its participating
majority-owned subsidiaries and affiliates) and Net Shepherd, Inc., dated
91997.
68. Castanet UpdateNow Integration and Distribution Agreement between
Digital Equipment Corp. and Marimba, Inc., dated 121997.
69. Technology Service Agreement between Ask Jeeves, Inc. and Compaq
Computer Corporation, dated 100298.
My AltaVista Agreements
-------------------------
Compaq is currently in the process of negotiating content agreements
for a new service called "My AltaVista" with the following parties:
1. Talk City
2. Real News
3. Astrology.net
4. Accuweather
5. CNN SI
6. CNN Sports
7. CNNfn
SCHEDULE 2.1.5
Hardware, Equipment and Real Estate
-----------------------------------
Hardware:
---------
Equipment:
---------
Real Estate:
------------
529 Bryant Street
Palo Alto, CA
Leases:
------
1825 S. Grant Street
San Mateo, CA
111 Theory Street
Irvine, CA
122 E. 42nd Street
New York, NY
1455 Frazee Road
San Diego, CA
444 Castro Street
Mountain View, CA
2101 West Coast Highway
Corona Del Mar, Irvine, CA
510 Magnolia
Stockton, CA
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of [ ], 1999 (the
"Agreement") by and among Compaq Computer Corporation, a Delaware corporation
("Compaq"), Digital Equipment Corporation, a Massachusetts corporation and a
wholly-owned subsidiary of Compaq ("Digital"), CMGI, Inc., a Delaware
corporation ("CMGI"), and Zoom Newco Inc., a Delaware corporation and a wholly-
owned subsidiary of CMGI ("Newco").
The parties have entered into a Purchase and Contribution Agreement
dated as of June 29, 1999 (the "Purchase Agreement") which provides for the
contribution of the AltaVista division of Digital to Newco.
The parties desire to provide for certain registration rights with
respect to the common stock of CMGI held by Digital or Compaq on the Closing
Date (as defined in the Purchase Agreement) and any shares of common stock of
CMGI acquired by the Compaq Group (as defined herein) from CMGI after the
Closing Date, including any shares of common stock of CMGI issued as a dividend
or other distribution with respect to such shares (including any equity
securities of CMGI for which such common stock is exchanged) (collectively, the
"CMGI Registrable Securities").
The parties also desire to provide for certain registration rights
with respect to the common stock of Newco held by the Digital or Compaq on the
Closing Date and any shares of such common stock issued as a dividend or other
distribution with respect to such shares (including any equity securities of
Newco for which such common stock is exchanged) (the "Newco Registrable
Securities").
NOW THEREFORE, in consideration of the foregoing and the agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
Section 1. Exercisability of Registration Rights.
----------------------------------------
Section 1.1 Effectiveness. The registration rights provided for in this
-------------
Agreement shall be effective as of the date hereof, except as set forth below.
Section 1.2 Permitted Transferees; Exercise of Rights.
---------------------------------------------
(a) Subject to Sections 5.1 and 5.2 of the Purchase Agreement, any
Investor (as defined below) may transfer the registration rights granted
hereunder in respect of all or any portion of the CMGI Registrable
Securities or Newco Registrable Securities by transferring such securities
and, if such transfer is not to Compaq, Digital or an affiliate of Compaq
or Digital, sending a written notice of such transfer to CMGI or Newco, as
the case may be. Compaq, Digital and their respective affiliates are
referred to herein, collectively, as the "Compaq Group". Compaq, Digital,
the affiliates of Compaq or Digital which hold CMGI Registrable Securities
or Newco Registrable Securities, the transferees of CMGI Registrable
Securities or Newco Registrable Securities and the successors and assigns
of any of the foregoing are referred to herein, collectively, as the
"Investors" and, individually, as an "Investor".
(b) The written notice required by Section 1.2(a) hereof shall
comply with Section 9.6 hereof, be signed by both the transferor and the
transferee of the securities and include an executed counterpart of this
Agreement pursuant to which the transferee: (a) shall become a party to
this Agreement, (b) shall be deemed to be an Investor for all purposes
hereunder with respect to the securities transferred to it and (c) shall be
bound by all the provisions hereof applicable to Investors with respect to
the securities transferred to it.
(c) The registration rights provided for in this Agreement shall
not be exercisable by an Investor if and to the extent that such Investor
is restricted from transferring or disposing of the CMGI Registrable
Securities or Newco Registrable Securities, as applicable, under a lock-up
agreement entered into pursuant to Section 6.3(b) hereof.
Section 1.3 Duration of Registration Rights. As to any particular
-------------------------------
CMGI Registrable Securities or Newco Registrable Securities, such securities
shall cease to be CMGI Registrable Securities or Newco Registrable Securities,
as applicable, when: (a) a registration statement with respect to the sale of
such securities shall have become effective under the Securities Act of 1933, as
amended (the "Securities Act") and such securities shall have been sold under
such registration statement; (b) such securities shall have been sold pursuant
to Rule 144 (or any successor provision to such Rule) under the Securities Act;
(c) such securities are eligible for sale under Rule 144(k) (or any successor
provision to such Rule) under the Securities Act; or (d) such securities shall
have ceased to be outstanding.
Section 2. Demand Registration of CMGI Registrable Securities.
--------------------------------------------------
Section 2.1 Notice and Registration. At any time or from time to
-----------------------
time on or after the thirtieth day preceding the first anniversary of the
Effective Time (as defined in the Purchase Agreement) upon written notice by one
or more Investors requesting that CMGI effect the registration under the
Securities Act of some or all of the CMGI Registrable Securities held by the
Investors, which notice shall specify the intended method or methods of
disposition of such CMGI Registrable Securities, CMGI will use its reasonable
best efforts to effect (at the earliest possible date but the effectiveness of
such registration shall not be earlier than such first anniversary) the
registration, under the Securities Act, of such CMGI Registrable Securities for
disposition in accordance with the intended method or methods of disposition
stated in such request, provided that:
--------
(a) CMGI shall not be required to effect a registration under this
Section 2.1, prior to eighteen (18) months after the Effective Time, of
more than fifty percent (50%) of the maximum aggregate amount of CMGI
Registrable Securities held at any time since the date of this Agreement by
the Compaq Group;
(b) if an Investor previously has disposed of CMGI Registrable
Securities pursuant to a registration under this Section 2.1, CMGI shall
not be required to effect a registration under this Section 2.1 until a
period of at least 90 days shall have elapsed from the effective date of
the most recent preceding registration pursuant to this Section 2.1;
(c) if, upon receipt of a registration request pursuant to this
Section 2.1, CMGI is advised by a recognized independent investment banking
firm selected by CMGI that, in such firm's opinion, a registration at that
time and on the terms requested of any of the CMGI Registrable Securities
proposed to be offered would adversely affect a public offering by CMGI of
shares of its common stock (other than in connection with employee benefit
and similar plans) (an "CMGI Company Offering") that had been planned by
CMGI prior to the date of the written registration request under this
Section 2.1, provided that CMGI complies with Section 3 hereof with respect
to such CMGI Company Offering, CMGI shall not be required to effect a
registration pursuant to this Section 2.1 until the earliest of (i) the
later of (A) 90 days after the completion of such CMGI Company Offering or
(B) the termination of any "lock-up" period required by the underwriters,
if any, to be applicable to the Investors that made the registration
request in connection with such CMGI Company Offering, (ii) five Business
Days (as defined below) after abandonment of such CMGI Company Offering
and, for this purpose, such CMGI Company Offering shall be deemed to have
been abandoned if the registration statement therefor has not become
effective within 90 days after the date of the written registration request
under this Section 2.1 and (iii) four months after the date of the written
registration request under this Section 2.1(c); provided that CMGI shall
only be permitted to delay registration pursuant to this Section 2.1(c) if,
in the aggregate, CMGI's exercise of such rights under this Section 2.1(c)
will not result in more than four months of delayed registrations or sales
by Investors within any twelve (12) month period;
(d) if, while a registration request is pending under this Section 2.1,
the board of directors of CMGI determines in good faith that (i) the filing
of a registration statement would require the disclosure of material,
nonpublic information regarding CMGI and (ii) public disclosure of such
material information would have a significant adverse impact on CMGI, on
written notice given to each Investor that made the registration request
setting forth details regarding the basis for such determination, CMGI
shall not be required to effect a registration pursuant to this Section 2.1
until the earlier of (x) the date upon which such material information is
disclosed to the public or ceases to be material to CMGI, and (y) 90 days
after CMGI provides such written notice of such determination to such
Investors;
(e) CMGI shall not be required to register any CMGI Registrable
Securities under this Section 2.1 unless the approximate aggregate offering
price of the CMGI Registrable Securities proposed to be registered by the
Investors shall be at least $25,000,000; and
(f) Investors holding a majority of the CMGI Registrable Securities
then held by all Investors shall have the right, with the approval of CMGI
(which approval shall not be unreasonably withheld), to select the managing
and other underwriters for any underwritten offering pursuant to this
Section 2.1.
For all purposes of this Agreement, "Business Day" means any day other than a
Saturday, Sunday or a day on which the Securities and Exchange Commission (the
"SEC") is not open to receive filings.
Section 2.2 Time for Calculation. The determination of the number
--------------------
of CMGI Registrable Securities which, pursuant to Section 2.1(a), CMGI need not
include in a registration shall be made immediately prior to the effectiveness
of the applicable registration.
Section 2.3 Third Person Shares. CMGI may register shares of CMGI
-------------------
common stock for sale for the account of another person in a registration of
CMGI Registrable Securities under Section 2.1, provided that, except as
otherwise required under the terms of currently outstanding registration rights
agreements of CMGI, CMGI shall not have the right to register any such shares to
the extent that the Investors that made the registration request under Section
2.1 are advised in writing (with a copy to CMGI) by the managing underwriter for
the offering of such CMGI Registrable Securities that, in such firm's opinion,
registration of such other shares may adversely affect the offering and sale of
such CMGI Registrable Securities.
Section 2.4 Number of Demands. The Investors shall have the right to
-----------------
twelve registrations pursuant to Section 2.1. If after CMGI has exercised
its right to delay a registration pursuant to Section 2.1(c) or (d), the
Investors determine to withdraw their demand for such registration, such
withdrawn demand shall not be counted as a demand under this Section 2.
Section 3. "Piggyback" Registration of CMGI Registrable Securities.
-----------------------------------------------------------
Section 3.1 Notice and Registration. If at any time after the
-------------------------
first anniversary of the Effective Time, CMGI proposes to register for public
sale under the Securities Act (other than a registration on Form S-4 or S-8 or
any successor or similar forms thereto), whether proposed to be offered for sale
by CMGI or any other person, including, without limitation, pursuant to the
exercise by any other person or entity of any registration rights (other than
registration rights that, as of the date hereof, prohibit the inclusion of
securities other than those held by such other person or entity), any equity
securities of CMGI (the "Other CMGI Securities") on a form and in a manner which
would permit registration of CMGI Registrable Securities for sale to the public
under the Securities Act, CMGI will give prompt written notice to each Investor
of its intention to do so, describing such securities, and specifying the form
and manner and the other relevant facts involved in such registration
(including, without limitation, (x) whether or not such registration will be in
connection with an underwritten offering of equity securities and, if so, the
identity of the managing underwriter and whether such offering will be pursuant
to a "best efforts" or "firm commitment" underwriting and (y) the anticipated
price range at which such securities are reasonably expected to be sold to the
public). Upon the written request of an Investor, delivered to CMGI by such
Investor within 15 Business Days after the giving of any such notice by CMGI,
which request shall specify the maximum number of CMGI Registrable Securities
intended to be disposed of by such Investor, CMGI will use its reasonable best
efforts to effect, in connection with the registration of the Other CMGI
Securities, the registration under the Securities Act of all CMGI Registrable
Securities which CMGI has been so requested to register by such Investor, to the
extent required to permit the disposition (in accordance with the intended
method or methods thereof as aforesaid) of CMGI Registrable Securities so to be
registered; provided that:
--------
(a) CMGI will not be required to effect any registration of CMGI
Registrable Securities pursuant to this Section 3.1 if (i) the registration
involves a "firm commitment" underwriting, (ii) no securities of any other
selling stockholders are to be included in the registration and (iii) CMGI
shall have been advised by a recognized independent investment banking firm
selected by CMGI that, in such firm's opinion, a registration at that time
of any of the CMGI Registrable Securities proposed to be offered would
adversely affect the proposed CMGI Company Offering;
(b) if CMGI shall have been advised by a recognized independent
investment banking firm selected by CMGI that, in such firm's opinion, the
number of securities offered by such Investors and other selling
stockholders, if any, in a registration which includes CMGI Registrable
Securities under this Section 3.1 is greater than the number of securities
which can be offered without adversely affecting the offering, (i) CMGI may
reduce pro rata the number of securities (including without limitation CMGI
Registrable Securities) offered for the account of selling stockholders
(except to the extent that such reductions are required to be made on a
different basis pursuant to registration rights agreements outstanding on
the date hereof, if any) to a number deemed satisfactory by such investment
banking firm and (ii) in the event that CMGI so reduces the number of
securities offered for the account of selling stockholders, each such
Investor agrees to reduce pro rata the number of CMGI Registrable
Securities offered for its account accordingly;
(c) CMGI may, in its sole discretion, delay any offering of Other CMGI
Securities for which registration of CMGI Registrable Securities also is
effected under this Section 3.1 by giving written notice of the delay to
each Investor that made a registration request under this Section 3.1 in
respect of the offering; provided, however, that if (i) the registration
statement with respect to the offering is not yet effective and the delay
extends for more than 30 days from the date of the written notice of delay
under this Section 3.1 or (ii) the registration statement with respect to
the offering has been declared effective by the SEC and the closing of the
offering is delayed for more than 24 hours, any such Investor may withdraw
its CMGI Registrable Securities from the offering, and thereupon CMGI shall
be relieved of its obligation to register such CMGI Registrable Securities
(but not from its obligation to pay Registration Expenses to the extent
incurred in connection therewith as provided in this Agreement), without
prejudice, however, to the rights (if any) of such Investor immediately to
request that such registration be effected as a registration under Section
2.1 hereof;
(d) CMGI shall not be require to register any CMGI Registrable
Securities under this Section 3.1 unless the approximate aggregate offering
price of the CMGI Registrable Securities proposed to be registered by the
Investor shall be at least (i) $15,000,000 in the event that such Investor
is the only selling stockholder for whom or which securities are being
registered or (ii) $5,000,000 in the event that such Investor is not the
only selling stockholder for whom or which securities are being registered;
and
(e) CMGI shall have the right to select the managing underwriter for
any underwritten offering for which any Investor shall have requested
registration pursuant to this Section 3.1.
No registration of CMGI Registrable Securities effected under this Section 3.1
shall relieve CMGI of its obligation to effect a registration of CMGI
Registrable Securities pursuant to Section 2.1.
Section 4. Demand Registration of Newco Registrable Securities.
---------------------------------------------------
Section 4.1 Notice and Registration. Commencing six months after
-----------------------
Newco has completed an initial underwritten public offering of equity securities
(the "IPO"), at any time or from time to time, upon written notice by one or
more Investors requesting that Newco effect the registration under the
Securities Act of some or all of the Newco Registrable Securities held by them,
which notice shall specify the intended method or methods of disposition of such
Newco Registrable Securities, Newco will use its reasonable best efforts to
effect (at the earliest possible date) the registration, under the Securities
Act, of such Newco Registrable Securities for disposition in accordance with the
intended method or methods of disposition stated in such request, provided that:
--------
(a) if an Investor previously has disposed of Newco Registrable
Securities pursuant to a registration under this Section 4.1, Newco shall
not be required to effect a registration under this Section 4.1 until a
period of at least 90 days shall have elapsed from the effective date of
the most recent such preceding registration;
(b) if, upon receipt of a registration request pursuant to this
Section 4.1, Newco is advised by a recognized independent investment
banking firm selected by Newco that, in such firm's opinion, a registration
at that time and on the terms requested of any of the Newco Registrable
Securities proposed to be offered would adversely affect a then planned
public offering by Newco of shares of its common stock (other than in
connection with employee benefit and similar plans) (an "Newco Company
Offering") that had been planned by Newco prior to the date of the written
registration request under this Section 4.1, provided that Newco and CMGI
comply with Section 5 hereof with respect to such Newco Company Offering,
Newco shall not be required to effect a registration pursuant to this
Section 4.1 until the earliest of (i) the later of (A) 90 days after the
completion of such Newco Company Offering or (B) the termination of any
"lock-up" period required by the underwriters, if any, to be applicable to
the Investors that made the registration request in connection with such
Newco Company Offering, (ii) five Business Days after abandonment of such
Newco Company Offering and, for this purpose, such Newco Company Offering
shall be deemed to have been abandoned if the registration statement
therefor has not become effective within 90 days after the date of the
written registration request of Compaq under this Section 4.1 and (iii)
four months after the date of the written notice from Compaq requesting
such registration; provided that Newco shall only be permitted to delay
registration pursuant to this Section 4.1(b) if, in the aggregate, Newco's
exercise of such rights under this Section 4.1(b) will not result in more
than four months of delayed registrations or sales by Investors within any
twelve (12) month period;
(c) if while a registration request is pending under this Section 4.1,
the board of directors of Newco determines in good faith that (i) the
filing of a registration statement would require the disclosure of
material, nonpublic information regarding Newco and (ii) public disclosure
of such material information would have a significant adverse impact on
Newco, on written notice given to each Investor that made the registration
request setting forth details regarding the basis for such determination,
Newco shall not be required to effect a registration pursuant to this
Section 4.1 until the earlier of (x) the date upon which such material
information is disclosed to the public or ceases to be material to Newco
and (y) 90 days after Newco provides such written notice of such
determination to such Investors;
(d) Newco shall not be required to register any Newco Registrable
Securities under this Section 4.1 unless the proposed approximate aggregate
offering price of the Newco Registrable Securities to be registered by the
Investors shall be at least $25,000,000; and
(e) Investors holding a majority of the Newco Registrable Securities
then held by all Investors shall have the right, with the approval of
Newco, which approval shall not be unreasonably withheld, to select the
managing and other underwriters for any underwritten offering pursuant to
this Section 4.1.
Section 4.2 Third Person Shares. Newco may register shares of
---------------------
Newco common stock for sale for the account of another person in a registration
of Newco Registrable Securities under Section 4.1 provided that Newco shall not
have the right to register such shares to the extent that the Investors that
made the registration request under Section 2.1 are advised in writing (with a
copy to Newco) by the managing underwriter for the offering of such Newco
Registrable Securities that, in such firm's opinion, registration of such other
shares may adversely affect the offering and sale of such Newco Registrable
Securities.
Section 4.3 Number of Demands. The Investors shall have the right
-----------------
to five registrations pursuant to Section 4.1. If after Newco has exercised its
right to delay a registration pursuant to Section 4.1(b) or (c), the Investors
determine to withdraw their demand for such registration, such withdrawn
registration shall not be counted as a demand under this Section 4.
Section 5. "Piggyback" Registration of Newco Registrable Securities.
------------------------------------------------------------
Section 5.1 Notice and Registration. If Newco proposes to
-------------------------
register for public sale under the Securities Act (other than a registration on
Form S-4 or S-8 or any successor or similar forms thereto), whether proposed to
be offered for sale by CMGI, Newco or any other person, including, without
limitation, pursuant to the exercise by any other person or entity of any
registration rights, any equity securities of Newco (the "Other Newco
Securities") on a form and in a manner which would permit registration of Newco
Registrable Securities for sale to the public under the Securities Act, Newco
will give prompt written notice to each Investor of its intention to do so,
describing such securities, and specifying the form and manner and the other
relevant facts involved in such registration (including, without limitation, (x)
whether or not such registration will be in connection with an underwritten
offering of equity securities and, if so, the identity of the managing
underwriter and whether such offering will be pursuant to a "best efforts" or
"firm commitment" underwriting and (y) the anticipated price range at which such
securities are reasonably expected to be sold to the public). Upon the written
request of an Investor delivered to Newco by such Investor within 15 Business
Days after the giving of any such notice by CMGI, which request shall specify
the maximum number of CMGI Registrable Securities intended to be disposed of by
such Investor and the intended method of disposition thereof, Newco will use its
reasonable best efforts to effect, in connection with the registration of the
Other Newco Securities, the registration under the Securities Act of all Newco
Registrable Securities which Newco has been so requested to register by such
Investor, to the extent required to permit the disposition (in accordance with
the intended method or methods thereof as aforesaid) of Newco Registrable
Securities so to be registered; provided that:
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(a) Newco will not be required to effect any registration of Newco
Registrable Securities pursuant to this Section 5.1 if (i) the registration
involves a "firm commitment" underwriting, (ii) no securities of any other
selling stockholders are to be included in the registration and (iii) Newco
shall have been advised by a recognized independent investment banking firm
selected by Newco that, in such firm's opinion, a registration at that time
of any of the Newco Registrable Securities proposed to be offered would
adversely affect the proposed Newco Company Offering;
(b) if Newco shall have been advise by a recognized independent
investment banking firm selected by Newco that, in such firm's opinion, the
number of securities offered by such Investors and other selling
stockholders, if any, in a registration which includes Newco Registrable
Securities under this Section 5.1 is greater than the number of securities
which can be offered without adversely affecting the offering, (i) Newco
may reduce pro rata the number of securities (including without limitation
Newco Registrable Securities) offered for the account of selling
stockholders to a number deemed satisfactory by such investment banking
firm and (ii) in the event that Newco so reduces the number of securities
offered for the account of selling stockholders, each such Investor agrees
to reduce pro rata the number of Newco Registrable Securities offered for
its account accordingly;
(c) Newco may, in its sole discretion, delay any offering of Other
Newco Securities for which registration of Newco Registrable Securities
also is effected under this Section 5.1 by giving written notice of the
delay to each Investor that made a registration request under this Section
5.1; provided, however, that if (i) the registration statement with respect
to the offering is not yet effective and the delay extends for more than 30
days from the date of the written notice of delay under this Section 5.1 or
(ii) the registration statement with respect to the offering has been
declared effective by the SEC and the closing of the offering is delayed
for more than 24 hours, any such Investor may withdraw its Newco
Registrable Securities from the offering, and thereupon CMGI shall be
relieved of its obligation to register such Newco Registrable Securities
(but not from its obligation to pay Registration Expenses to the extent
incurred in connection therewith as provided in this Agreement), without
prejudice, however, to the rights (if any) of such Investor immediately to
request that such registration be effected as a registration under Section
4.1 hereof;
(d) Newco shall not be required to register any Newco Registrable
Securities under this Section 5.1 unless the approximate aggregate offering
price of the Newco Registrable Securities proposed to be registered by the
Investor shall be at least (i) $2,000,000 in the event that such Investor
is the only selling stockholder for whom or which securities are being
registered or (ii) $1,000,000 in the event that such Investor is not the
only selling stockholder for whom or which securities are being registered;
and
(e) Newco shall have the right to select the managing underwriter for
any underwritten offering for which any Investor shall have requested
registration pursuant to this Section 5.1.
No registration of Newco Registrable Securities effected under this Section 5.1
shall relieve Newco of its obligation to effect a registration of Newco
Registrable Securities pursuant to Section 4.1.
Section 6. Registration Procedures.
------------------------
Section 6.1 Registration and Qualification. If and whenever CMGI
------------------------------
or Newco is required to use its reasonable best efforts to effect the
registration under the Securities Act of, as to CMGI, any CMGI Registrable
Securities, or, as to Newco, any Newco Registrable Securities, as provided in
Sections 2, 3, 4 or 5 hereof, CMGI or Newco, as the case may be, will as
expeditiously as is practicable:
(a) prepare and promptly file with the SEC a registration
statement under the Securities Act on Form S-3 (or its successor or any
similar short-form registration statement), if available, and if Form
S-3 (or its successor or any similar short-form registration statement)
is not available, then on Form S-1 (or its successor) with respect
to such securities to be offered and use its reasonable best efforts to
cause such registration statement to become and remain effective;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of such securities,
until such time as all such securities have been disposed of in
accordance with the intended methods of disposition by the Investor(s)
set forth in such registration statement or, in the case of registration
statements not governed by Rule 415 under the Securities Act, the
expiration of three months after such registration statement becomes
effective, if earlier;
(c) furnish to the Investor(s) that made the registration request
copies of any such registration statement, any prospectus included therein
(including any preliminary prospectus or summary prospectus) and any
amendment or supplement thereto (including all documents incorporated by
reference therein prior to the effectiveness of such registration statement
and all exhibits), which documents (other than documents incorporated by
reference) will be subject to the prior review of such Investor(s) for a
period of at least five Business Days, and (i) with respect to a
registration under Section 2 or 4 hereof, CMGI or Newco, as the case may
be, shall not file with the SEC any such registration statement,
prospectus, amendment or supplement to which such Investor(s), shall
reasonably object within five Business Days of receipt thereof and (ii)
with respect to a registration under Sections 3 or 5 hereof, prior to
filing with the SEC any such registration statement, prospectus, amendment
or supplement, CMGI or Newco, as the case may be, will consider the
reasonable objections of such Investor(s) which are conveyed to it;
(d) furnish to the Investor(s) that made the registration request and
to any underwriter of such securities, such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) in conformity with
the requirements of the Securities Act, such documents incorporated by
reference in such registration statement or prospectus and such other
documents as such Investor(s) or such underwriter may reasonably request
in order to facilitate the public sale or other disposition of such
securities;
(e) use its reasonable best efforts to register or qualify all the
securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Investor(s)
that made the registration request or any underwriter of such securities
shall reasonably request and do any and all other acts and things which may
be reasonably necessary or advisable to enable such Investor(s) or any
underwriter to consummate the disposition in such jurisdictions of the
securities covered by such registration statement; provided that CMGI or
--------
Newco, as the case may be, shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any
jurisdiction where it is not so qualified or to subject itself to any
taxation in any such jurisdiction or to consent to general or unlimited
service of process in any jurisdiction where it is not then so subject;
(f) use its reasonable best efforts to cause the securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Investor(s) that made the registration request to consummate the
disposition of such securities;
(g) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to
its securityholders, in each case as soon as practicable, but not later
than 45 calendar days after the close of the period covered thereby (90
calendar days in case the period covered corresponds to a fiscal year), an
earnings statement of Newco or CMGI, as the case may be, which will satisfy
the provisions of Section 11(a) of the Securities Act;
(h) use its reasonable best efforts to list such securities on each
securities exchange or quote such securities on each quotation system as
the Investor(s) that made the registration request or the underwriters of
the offering may reasonably designate;
(i) (x) immediately notify the Investor(s) that made the registration
request at any time when a prospectus relating to a registration pursuant
to Section 2, 3, 4 or 5 hereof is required to be delivered under the
Securities Act of the happening of any event as a result of which the
Prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances then existing, not
misleading and (y) at the request of any such Investor, prepare and furnish
to such Investor a reasonable number of copies of a supplement to, or an
amendment of, such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances then existing, not misleading. Each
Investor agrees not to sell any CMGI Registrable Securities or Newco
Registrable Securities, as the case may be, registered under Section 2, 3,
4 or 5 hereof if such Investor has been notified of the happening of an
event under clause (x) of this Section 6.1(i) until such Investor has
received such copies of the supplement or amendment as aforesaid and is
further notified by CMGI or Newco, as the case may be, that the prospectus
included in the registration statement, as then in effect, no longer
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances then existing, not
misleading. Upon the happening of an event under clause (x) of this
Section 6.1(i), the three-month time period set forth in paragraph (b) of
this Section 6.1, if applicable, shall be extended for a number of days
equal to the number of days that such Investor is prohibited from selling
such CMGI Registrable Securities or Newco Registrable Securities, as the
case may be, under this Section 6.1(i);
(j) (x) furnish to the Investor(s) that participate in the preparation
of the registration statement, addressed to each of them, an opinion of
counsel for CMGI or Newco, as the case may be, dated the date of the
closing of the sale of the securities under the underwriting agreement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered
in opinions of issuer's counsel delivered to underwriters in underwritten
public offerings of securities and such other matters as such Investor(s)
may reasonably request, and (y) if permitted by applicable accounting
standards, use its reasonable best efforts to furnish to such Investor(s),
addressed to each of them, a "cold comfort" letter signed by the
independent public accountants who have certified CMGI's or Newco's, as the
case may be, financial statements included in or incorporated by
reference into such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus
included therein), and with respect to events subsequent to the date of
such financial statements, as are customarily covered in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as such Investor(s) may reasonably
request; and
(k) execute and deliver all instruments and documents and take such
other actions and obtain all such other certificates and opinions as is
customary in an underwriter offering.
CMGI or Newco, as the case may be, may require any such Investor to furnish to
it such information regarding such Investor and the distribution of such CMGI
Registrable Securities or Newco Registrable Securities, as the case may be, that
it may from time to time reasonably request in writing and as shall be required
by law or by the SEC or the National Association of Securities Dealers, Inc.
("NASD") in connection with any such registration.
Section 6.2 Underwriting.
------------
(a) If requested by the underwriters for any underwritten offering of
CMGI Registrable Securities or Newco Registrable Securities, as the case
may be, pursuant to a registration requested by one or more Investor(s)
hereunder, CMGI or Newco, as the case may be, will enter into an
underwriting agreement with such underwriters for such offering, such
agreement to contain such representations, warranties, covenants and
indemnities by CMGI or Newco, as the case may be, and such other terms and
provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including without limitation such
underwriters' form of indemnities and contribution and the provision of an
opinion of counsel and, if applicable, a "cold comfort" letter, in each
case to the effect and to the extent provided in Section 6.1(j) hereof.
The Investor(s) on whose behalf CMGI Registrable Securities or Newco
Registrable Securities, as the case may be, are to be distributed by
such underwriters, shall be a party to any such underwriting agreement, and
the representations and warranties by, and the other agreements on the part
of, CMGI or Newco, as the case may be, to and for the benefit of such
underwriters shall also be made to and for the benefit of each such
Investor.
(b) In the event that any registration pursuant to Sections 3 or 5
hereof shall involve, in whole or in part, an underwritten offering, CMGI
or Newco, as the case may be, may require that the CMGI Registrable
Securities or Newco Registrable Securities, as the case may be, be
included in such underwriting on the same terms and conditions as shall
be applicable to the Other CMGI Securities or Other Newco Securities being
sold through underwriters under such registration. In such case, each
Investor on whose behalf such securities are to be distributed by such
underwriters shall be a party to any such underwriting agreement. Such
agreement shall contain such representations, warranties, covenants and
indemnities by each such Investor and such other terms and provisions as
are customarily contained in underwriting agreements with respect to the
selling shareholders in a secondary distributions, including without
limitation the underwriters' form of indemnities and contribution,
provided that the aggregate amount of any indemnification and contribution
--------
to be provided by any Investor thereunder shall be limited to the net
proceeds to such Investor from the offering under such registration. The
representations and warranties in such underwriting agreement by, and the
other agreements on the part of, CMGI or Newco, as the case may be, to
and for the benefit of such underwriters shall also be made to and for
the benefit of such Investor(s).
(c) In the event that any registration shall involve an underwritten
offering of CMGI Registrable Securities or Newco Registrable Securities, as
the case may be, with an aggregate current market value (calculated based
on the per share closing price of the CMGI Common Stock or Newco Common
Stock, as the case may be, on the trading day immediately prior to the day
on which the request for registration is given under Section 2.1, 3.1, 4.1
or 5.1) equal to or in excess of $250,000,000, CMGI or Newco, as the case
may be, will, for a period not longer than one week, (i) market the
securities to be offered by the Investors in such registration with the
same diligence as it would devote to the marketing of a primary
registration of its securities and (ii) cause its management to participate
in any efforts by the underwriters to market such securities to be offered
by such Investors in such registration, if and as required by such
underwriters; provided that each of CMGI and Newco, as the case may be,
shall only be required to market such securities pursuant to this Section
6.2(c) once every twenty-four (24) month period.
Section 6.3 Lock-up.
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(a) If a registration pursuant hereto involves an under-written
offering, CMGI and Newco agree, if so required by the managing
underwriter of such offering, (i) not to effect any public sale or
distribution of any of its equity securities or securities convertible
into or exchangeable or exercisable for any of such equity securities
during a period of up to 90 calendar days after the effective date of such
registration, except for securities sold in such underwritten offering or
except in connection with a stock option plan, purchase plan, savings or
similar plan, or an acquisition, merger or exchange offer and (ii) to use
its reasonable best efforts to cause its officers and directors to agree
not to effect any sale or distribution (other than a private sale to a
transferee who or which agrees to the same restrictions to which the
transferor is subject) of any (x) equity securities of CMGI or Newco, as
the case may be, owned or controlled by any of them or their respective
family members or (y) securities convertible into or exchangeable or
exercisable for any of such equity securities owned or controlled by any of
them or their respective family members, during a period of up to 90 days
after the effective date of the registration statement, except as part of
and pursuant to such underwritten offering; provided that neither CMGI,
Newco nor their respective officers and directors shall be subject to the
foregoing more than once in any twelve (12) month period.
(b) If a registration pursuant hereto involves an under-written
offering, each Investor, whether or not such Investor's CMGI Registrable
Securities or Newco Registrable Securities are included in such
registration, will, if and to the extent requested by the managing
underwriter in such offering, enter into an agreement not to effect
any public sale or distribution, including any sale pursuant to Rule 144
under the Securities Act (but excluding those securities sold in such
underwritten offering), of, in the case of an underwritten offering by
CMGI, any of the equity securities of CMGI owned by such Investor, and, in
the case of an underwritten offering by Newco, any of the equity securities
of Newco owned by such Investor, without the consent of such managing
underwriter, during a period commencing on the effective date of such
registration and ending a number of calendar days thereafter not exceeding
90 days (or, in the case of the initial underwritten public offering of
common stock of Newco, not to exceed 180 days) as such managing underwriter
shall reasonably determine is required to effect a successful offering;
provided such agreement is substantially identical in form and substance to
other "lock-up" agreements of the other stockholders of CMGI or Newco, as
applicable, who execute such agreements in connection with such offering;
provided that the Investors shall not be subject to the foregoing more
than once in any twelve (12) month period.
Section 7. Registration Expenses.
----------------------
(a) CMGI (as between CMGI and the Investors) will pay all
Registration Expenses in connection with any registration of CMGI
Registrable Securities pursuant to this Agreement, except that CMGI
shall not bear underwriting discounts or commissions attributable to
CMGI Registrable Securities or transfer taxes applicable thereto.
(b) Newco (as between Newco and the Investor(s) will pay all
Registration Expenses in connection with any registration of Newco
Registrable Securities pursuant to this Agreement, except that Newco shall
not bear underwriting discounts or commissions attributable to Newco
Registrable Securities or transfer taxes applicable thereto.
(c) As used in this Agreement, "Registration Expenses" shall include
all expenses incident to the performance of or compliance by CMGI or
Newco, as the case may be, with the registration requirements set forth in
this Agreement, including, without limitation, the following: (i) the fees,
disbursements and expenses of its counsel, accountants and transfer agent
in connection with the registration of securities to be disposed of under
the Securities Act; (ii) all expenses in connection with the preparation,
printing and filing of the registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments
and supplements thereto and the mailing and delivering of copies thereof
to the underwriters and dealers; (iii) the cost of printing or producing
any agreement(s) among underwriters, underwriting agreement(s) and blue
sky or legal investment memoranda, any selling agreements and any other
documents in connection with the offering, sale or delivery of the
securities to be disposed of; (iv) the cost of printing or producing and
the issuance and delivery of certificates for the securities, (v) all
expenses in connection with the qualification of the securities for
offering and sale under state securities laws, including the fees and
disbursements of counsel for the underwriters in connection with such
qualification and in connection with any blue sky and legal investment
surveys; and (vi) the filing fees incident to securing any required review
by the NASD of the terms of the sale of the securities and; (vii) the
listing or quotation of the securities on stock exchanges or quotation
systems.
Section 8. Indemnification and Contribution.
----------------------------------
Section 8.1 Indemnification by CMGI. In the event of any
-------------------------
registration of any CMGI Registrable Securities, CMGI agrees to indemnify and
hold harmless each Investor whose CMGI Registrable Securities are covered by
such registration, its directors, officers or general or limited partners (as
applicable), each person who participates as an underwriter in the offering or
sale of such securities, each officer and director of each underwriter and each
person, if any, who controls such Investor or any such underwriter within the
meaning of the Securities Act or the Securities Exchange Act, as amended (the
"Exchange Act"), against:
(a) any and all loss, claim, damage, liability and expense
whatsoever arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement, any preliminary prospectus or final prospectus included therein,
any amendment or supplement thereto or any document incorporated by
reference therein or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(b) any and all loss, claim, damage, liability and expense whatsoever
to the extent of the aggregate amount paid in settlement of any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
CMGI; and
(c) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, to the extent that any such expense is
not paid under paragraph (a) or (b) of this Section 8.1;
provided, however, that CMGI shall not be liable in any such case to the extent
-------- -------
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary prospectus,
final prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to CMGI by or on behalf of such Investor,
underwriter or control person expressly for inclusion in such registration
statement, prospectus, amendment or supplement. The foregoing indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Investor, underwriter or control person or any such director,
officer, partner or person and shall survive the transfer of such securities by
such Director.
Section 8.2 Indemnification by Newco. In the event of any
--------------------------
registration of any Newco Registrable Securities, Newco agrees to indemnify and
hold harmless each Investor whose Newco Registrable Securities are covered by
such registration, its respective directors, officers or general and limited
partners (as applicable), each person who participates as an underwriter in the
offering or sale of such securities, each officer and director of each
underwriter and each person, if any, who controls such Investor or any such
underwriter within the meaning of the Securities Act or the Exchange Act
against:
(a) any and all loss, claim, damage, liability and expense whatsoever
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement,
any preliminary prospectus or final prospectus included therein, any
amendment or supplement thereto or any document incorporated by reference
therein or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading;
(b) any and all loss, claim, damage, liability and expense whatsoever
to the extent of the aggregate amount paid in settlement of any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Newco; and
(c) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, to the extent that any such expense is not
paid under paragraph (a) or (b) of this Section 8.2;
provided, however, that Newco shall not be liable in any such case to the extent
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that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary prospectus,
final prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to Newco by or on behalf of such Investor,
underwriter or control person expressly for inclusion in such registration
statement, prospectus, amendment or supplement. The foregoing indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Investor, underwriter or control person or any such director,
officer, partner or person and shall survive the transfer of such securities by
such Investor.
Section 8.3 Indemnification by the Investors
-----------------------------------
(a) CMGI may require, as a condition to including CMGI Registrable
Securities of an Investor in any registration pursuant to Section 2.1 or
3.1, that such Investor agree to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 8.1) CMGI, each
director of CMGI, each officer of CMGI who signed such registration
statement, each person who participates as an underwriter in the offering
or sale of such securities, each officer and director of each underwriter,
and each person, if any, who controls CMGI or any such underwriter within
the meaning of the Securities Act or the Exchange Act, with respect to any
statement in or omission from such registration statement, any preliminary
prospectus or final prospectus included therein, or any amendment or
supplement thereto, if such statement or omission was made in reliance upon
and in conformity with written information furnished by or on behalf of
such Investor to CMGI expressly for inclusion in such registration
statement, prospectus, amendment or supplement. Any such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of CMGI or any such director, officer or controlling person and
shall survive the transfer of the such securities by such Investor.
(b) Newco may require, as a condition to including any Newco
Registrable Securities of an Investor in a registration pursuant to
Section 4.1 or 5.1, that such Investor agree to indemnify and hold
Harmless (in the same manner and to the same extent as set forth in
Section 8.2) Newco, each director of Newco, each officer of Newco who
signed such registration statement, each person who participates as an
underwriter in the offering or sale of such securities, each officer and
director of each underwriter, and each person, if any, who controls Newco
or any such underwriter within the meaning of the Securities Act or the
Exchange Act, with respect to any statement in or omission from such
registration statement, any preliminary prospectus or final prospectus
included therein, or any amendment or supplement thereto, if such
statement or omission was made in reliance upon and in conformity with
written information furnished by or on behalf of such Investor to Newco
expressly for inclusion in such registration statement, prospectus,
amendment or supplement. Any such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of Newco
or any such director, officer or controlling person and shall survive the
transfer of the such securities by such Investor.
(c) Notwithstanding the provisions of paragraphs (a) and (b) of this
Section 8.3, no Investor shall be required to provide indemnification under
this Section 8.3 in an aggregate amount in excess of the net proceeds
received by such Investor in the offering.
Section 8.4 Indemnification Procedures.
---------------------------
(a) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a
claim referred to in this Section 8, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party, give
written notice to such indemnifying party of the commencement of such
action; provided, however, that the failure of any indemnified party to
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give notice as provided herein shall not relieve the indemnifying party
of its obligations under this Section 8, except to the extent (not
including any such notice of an underwriter) that the indemnifying party
is actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim (in which case
the indemnifying party shall not be liable for the fees and expenses of
more than one firm of counsel for the Investors or more than one firm of
counsel for the under-writers in connection with any one action or separate
but similar or related actions, in addition in each case, to any local
counsel), the indemnifying party will be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof.
No indemnified party shall consent to the entry of any judgment or enter
into any settlement of any such action, the defense of which has been
assumed by an indemnifying party and for which an indemnifying party may
have indemnification liability hereunder with the consent of such
indemnifying party.
(b) CMGI or Newco, as the case may be, and the Investors shall provide
for the fore-going indemnities (with appropriate modifications) in any
underwriting agreement with respect to any required registration or other
qualification of securities under any federal or state law or regulation of
any governmental authority.
Section 8.5 Contribution. If the indemnification provided for in
------------
Section 8.1 or Section 8.3(a) hereof is required by its terms but is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party under such Section in respect to any losses, claims, damages,
liabilities or expenses referred to therein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
therein (a) in such proportion as is appropriate to reflect the relative
benefits received by CMGI, the Investors which held the CMGI Registrable
Securities subject to the registration and the underwriters from the offering or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but also the relative fault of
CMGI, such Investors and the underwriters in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by CMGI, such Investors and the underwriters shall be deemed to be in
the same proportion, in the case of CMGI and such Investors, as the total price
paid to CMGI and to such Investors, respectively, for the securities sold by
them to the underwriters (net of underwriting commissions and discounts but
before deducting expenses), and in the case of the underwriters, as the
underwriting commissions or discounts received by them bears to the total of
such amounts paid to CMGI and to such Investors, and received by the
underwriters as underwriting commissions or discounts. The relative fault of
CMGI, such Investors and the underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by CMGI, such Investors or the underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. CMGI and each Investor agrees
that it would not be just and equitable if contribution pursuant to this Section
8.5 were determined solely by pro rata allocation (even if the underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8.5, (i) the foregoing contribution agreement shall not inure to the benefit of
any indemnified party if indemnification would be available to such party by
reason of Section 8.1 or 8.3(a) hereof, and (ii) no Investor shall be required
to contribute any amount in excess of the net proceeds received by Compaq in the
offering. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
Section 8.6 Contribution. If the indemnification provided for in
------------
Section 8.2 or Section 8.3(b) hereof is required by its terms but is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party under such Section in respect to any losses, claims, damages,
liabilities or expenses referred to therein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
therein (a) in such proportion as is appropriate to reflect the relative
benefits received by Newco, the Investors which held the Newco Registrable
Securities subject to the registration and the underwriters from the offering or
(b) if the allocation provided by clause (a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (a) above but also the relative fault of
Newco, such Investors and the underwriters in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by Newco, such Investors and the underwriters shall be deemed to be in
the same proportion, in the case of Newco and such Investors, as the total price
paid to Newco and to such Investors, respectively, for the securities sold by
them to the underwriters (net of underwriting commissions and discounts but
before deducting expenses), and in the case of the underwriters, as the
underwriting commissions or discounts received by them bears to the total of
such amounts paid to Newco and to such Investors, and received by the
underwriters as underwriting commissions or discounts. The relative fault of
Newco, such Investors and the underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by Newco, such Investors or the underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Newco and each Investor agrees
that it would not be just and equitable if contribution pursuant to this Section
8.6 were determined solely by pro rata allocation (even if the underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8.6, (i) the foregoing contribution agreement shall not inure to the benefit of
any indemnified party if indemnification would be available to such party by
reason of Section 8.2 or 8.3(b) hereof, and (ii) no Investor shall be required
to contribute any amount in excess of the net proceeds received by such Investor
in the offering. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Section 9. Miscellaneous
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Section 9.1 Defined Terms. The term "person," as used in this
--------------
Agreement shall mean a natural person, corporation, association, partnership
(general or limited), joint venture, trust, joint-stock company, estate, limited
liability company, unincorporated organization or other legal entity or
organization.
Section 9.2 Preparation; Reasonable Investigation. In connection
-------------------------------------
with the preparation and filing of each registration statement registering CMGI
Registrable Securities or Newco Registrable Securities, as the case may be,
under the Securities Act, CMGI or Newco, as the case may be, will give the
Investors and the underwriters, if any, and their respective counsel and
accountants, such reasonable and customary access after reasonable notice to its
books and records and such opportunities to discuss its business with its
officers and the independent public accountants who have certified its financial
statements and perform such other diligence as shall be necessary, in the
opinion of such Investors and such underwriters or their respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
Section 9.3 Legends; Stop Transfer Restriction.
-------------------------------------
(a) Each Investor hereby acknowledges that each certificate
representing CMGI Registrable Securities or Newco Registrable Securities
may be stamped or otherwise imprinted with a legend in substantially the
following form:
"This common stock has not been registered under the Securities
Act of 1933, as amended, and may not be transferred in the absence
of such registration or an exemption therefrom under such Act."
(b) The legend referenced in this Section 9.3, shall be applicable to
any disposition of CMGI Registrable Securities or Newco Registrable
Securities while transfer of such securities is restricted by the
Securities Act or the Purchase Agreement. CMGI or Newco, as the case may
be, agrees that, upon receipt of a written request from an Investor,
executed and delivered to CMGI or Newco, as the case may be, and its
transfer agent and accompanied by an opinion of counsel reasonably
acceptable to CMGI or Newco, as the case may be, to the effect that some or
all of the CMGI Registrable Securities or Newco Registrable Securities, as
the case may be, may lawfully be publicly offered and sold in the United
States without registration under the Securities Act, CMGI or Newco, as the
case may be, will, or will cause its transfer agent or warrant agent (if
any) to, remove such legend from the certificates representing such
securities.
Section 9.4 No Inconsistent Agreements. CMGI and Newco have not
---------------------------
entered into, and shall not on or after the date of this Agreement enter into,
any agreement with respect to its securities that compromises, negates or
violates the rights expressly granted to the Investors under this Agreement.
Section 9.5 Amendment and Waiver. No amendment of any provision
---------------------
of this Agreement shall be effective, unless the same shall be in writing and
signed by: (i) in a case of an amendment affecting CMGI's rights and obligations
hereunder, CMGI and Investors holding at least a majority of the CMGI
Registrable Securities then held by all Investors, and (ii) in the case of an
amendment affecting the rights and obligations of Newco hereunder, Newco and
Investors holding at least a majority of the Newco Registrable Securities then
held by all Investors. Any failure of any party to comply with any obligation,
agreement or condition hereunder may only be waived in writing by the other
parties, but such waiver shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. No failure by any party to take
any action with respect to any breach of this Agreement or default by another
party shall constitute a waiver of such party's right to enforce any provision
hereof or to take any such action.
Section 9.6 Notices. Any notice, request, instruction or other
-------
document to be given hereunder by any party to another party shall be in writing
and shall be deemed given when delivered personally, upon receipt of a
transmission confirmation (with a confirming copy sent by overnight courier) if
sent by facsimile or like transmission, and on the next business day when sent
by Federal Express, United Parcel Service, Express Mail, or other reputable
overnight courier, to the party at the following addresses (or such other
addresses for a party as shall be specified by like notice):
(a) If to Compaq:
20555 State Highway 249
Houston, Texas 77070
Attention: William D. Strecker
Fax No.: (281) 514-5512
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
Fax No.: (617) 573-4822
(b) If to Digital:
40 Old Bolton Road
Stowe, Massachusetts 01775
Attention: William D. Strecker
Fax No.: (281) 514-5521
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
Fax No.: (617) 573-4822
(c) If to CMGI, to:
100 Brickstone Square
Andover, Massachusetts 01810-1428
Attention: William Williams II, Esq.
Fax No.: (978) 684-3601
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Mark G. Borden, Esq.
Fax No.: (617) 526-5000
(d) if to Newco, to:
100 Brickstone Square
Andover, Massachusetts 01810-1428
Attention: William Williams II, Esq.
Fax No.: (978) 684-3601
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Mark G. Borden, Esq.
Fax No.: (617) 526-5000
Section 9.7 Entire Agreement; Governing Law. This Agreement (a)
--------------------------------
constitutes the entire agreement and supersedes all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) shall be governed by and be construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of laws thereof.
Section 9.8 Successors and Assigns. Except as otherwise provided
----------------------
herein, all of the terms and provisions of this Agreement shall be binding upon
and enure to the benefit of and be enforceable against the respective successors
and assigns of the parties hereto.
Section 9.9 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 9.10 Headings. The section and other headings contained in
--------
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 9.11 Severability. In case any term, provision, covenant
------------
or restriction contained in this Agreement is held to be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining terms, provisions, covenants or restrictions contained herein, and
of such term, provision, covenant or restriction in any other jurisdiction,
shall not in any way be affected or impaired thereby.
Section 9.12 Termination. CMGI shall have no obligations pursuant
-----------
to this Agreement with respect to any CMGI Registrable Securities if, after a
period of not less than five years from the date hereof, the Investors hold less
than an amount equal to 15% of the CMGI Registrable Securities held by them on
the date of this Agreement. Newco shall have no obligations pursuant to this
Agreement with respect to any Newco Registrable Securities if, after a period of
not less than seven years from the date hereof, the Investors hold less than 25%
of the Newco Registrable Securities held by them on the date of this Agreement.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the date first written above.
COMPAQ COMPUTER CORPORATION
By:
Name:
Title:
DIGITAL EQUIPMENT CORPORATION
By:
Name:
Title:
CMGI, INC.
By:
Name:
Title:
ZOOM NEWCO INC.
By:
Name:
Title:
Purchase and Contribution Agreement - CMGI Inc., Compaq Computer Corp., Digital Equipment Corp. and AltaVista Co.
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