{"id":42990,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-and-plan-of-merger-24-7-media-inc-and-exactis-com.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-24-7-media-inc-and-exactis-com","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-24-7-media-inc-and-exactis-com.html","title":{"rendered":"Agreement and Plan of Merger &#8211; 24\/7 Media Inc. and Exactis.com Inc."},"content":{"rendered":"<pre>==============================================================================\n\n\n                         AGREEMENT AND PLAN OF MERGER\n\n\n                         Dated as of February 29, 2000\n\n\n                                 By and Among\n\n\n                               24\/7 MEDIA, INC.,\n\n\n                        EVERGREEN ACQUISITION SUB CORP.\n\n\n                                      And\n\n\n                               EXACTIS.COM, INC.\n\n\n\n\n\n==============================================================================\n\n\n\n\n\n                                                                Contents, p. 1\n\n\n                               TABLE OF CONTENTS\n\n                                                                          Page\n\n\n                                   ARTICLE I\n\n                                  The Merger\n\nSECTION 1.01.  The Merger...................................................  2\nSECTION 1.02.  Closing   ...................................................  3\nSECTION 1.03.  Effective Time...............................................  3\nSECTION 1.04.  Effects of the Merger........................................  3\nSECTION 1.05.  Certificate of Incorporation and By-laws.....................  3\nSECTION 1.06.  Board of Directors and Officers..............................  3\n\n\n                                  ARTICLE II\n\n               Effect of the Merger on the Capital Stock of the\n              Constituent Corporations; Exchange of Certificates\n\nSECTION 2.01.  Effect on Capital Stock......................................  4\n               (a) Capital Stock of Sub.....................................  4\n               (b) Cancelation of Treasury Stock and Parent-\n                   Owned Stock..............................................  4\n               (c) Conversion of Target Common Stock........................  4\n               (d) Anti-Dilution Provisions.................................  4\nSECTION 2.02.  Exchange of Certificates.....................................  5\n               (a) Exchange Agent...........................................  5\n               (b) Exchange Procedures......................................  5\n               (c) Distributions with Respect to\n                      Unexchanged Shares....................................  6\n               (d) No Further Ownership Rights in Target\n                   Common Stock.............................................  6\n               (e) No Fractional Shares.....................................  7\n               (f) Termination of Exchange Fund.............................  7\n               (g) No Liability.............................................  7\n               (h) Investment of Exchange Fund..............................  7\n               (i) Lost Certificates........................................  8\n\n\n                                  ARTICLE III\n\n                        Representations and Warranties\n\nSECTION 3.01.  Representations and Warranties of Target.....................  8\n               (a) Organization, Standing and Corporate\n                   Power....................................................  8\n               (b) Subsidiaries.............................................  9\n               (c) Capital Structure........................................  9\n\n\n\n\n\n                                                                Contents, p. 2\n\n                                                                          Page\n\n\n\n               (d) Authority; Noncontravention.............................. 11\n               (e) SEC Documents; Undisclosed\n                      Liabilities........................................... 13\n               (f) Information Supplied..................................... 14\n               (g) Absence of Certain Changes or Events..................... 14\n               (h) Litigation............................................... 15\n               (i) Compliance with Applicable Laws.......................... 15\n               (j) Absence of Changes in Benefit Plans...................... 16\n               (k) ERISA Compliance; Excess Parachute\n                   Payments................................................. 17\n               (l) Taxes.................................................... 21\n               (m) Voting Requirements...................................... 23\n               (n) State Takeover Statutes.................................. 23\n               (o) Brokers.................................................. 23\n               (p) Opinion of Financial Advisor............................. 24\n               (q) Intellectual Property; Year 2000......................... 24\n               (r) Contracts................................................ 26\n               (s) Title to Properties...................................... 28\n               (t) Privacy Policy........................................... 29\nSECTION 3.02.  Representations and Warranties of Parent and\n               Sub.......................................................... 30\n               (a) Organization, Standing and Corporate\n                   Power.................................................... 31\n               (b) Subsidiaries............................................. 31\n               (c) Capital Structure........................................ 31\n               (d) Authority; Noncontravention.............................. 32\n               (e) SEC Documents; Undisclosed\n                      Liabilities........................................... 33\n               (f) Information Supplied..................................... 34\n               (g) Absence of Certain Changes or Events..................... 35\n               (h) Litigation............................................... 35\n               (i) Compliance with Applicable Laws.......................... 35\n               (j) ERISA Compliance......................................... 35\n               (k) Taxes.................................................... 35\n               (l) Voting Requirements...................................... 36\n               (m) State Takeover Statutes.................................. 36\n               (n) Intellectual Property; Year 2000......................... 36\n               (o) Title to Properties...................................... 37\n               (p) Privacy Policy........................................... 37\n               (q) Tax Matters.............................................. 38\n               (r) Interim Operations of Sub................................ 38\n\n\n                                     ARTICLE IV\n\n                     Covenants Relating to Conduct of Business\n\nSECTION 4.01.  Conduct of Business.......................................... 38\n               (a) Conduct of Business by Target............................ 38\n               (b) Conduct of Business by Parent............................ 42\n               (c) Advice of Changes........................................ 42\nSECTION 4.02.  No Solicitation by Target.................................... 43\n\n\n\n\n\n                                                                Contents, p. 3\n\n                                                                          Page\n\n\n\nSECTION 4.03.  Recommendation by Parent..................................... 43\n\n\n                                   ARTICLE V\n\n                             Additional Agreements\n\nSECTION 5.01.  Preparation of the Form S-4 and the Proxy\n               Statement; Target Stockholders Meeting;\n               Parent Stockholders Meeting.................................. 44\nSECTION 5.02.  Letters of Target's Accountants.............................. 46\nSECTION 5.03.  Letters of Parent's Accountants.............................. 46\nSECTION 5.04.  Access to Information; Confidentiality....................... 46\nSECTION 5.05.  Reasonable Efforts........................................... 47\nSECTION 5.06.  Stock Options; Warrants...................................... 48\nSECTION 5.07.  Employee Matters............................................. 50\nSECTION 5.08.  Indemnification, Exculpation and\n               Insurance.................................................... 51\nSECTION 5.09.  Fees and Expenses............................................ 52\nSECTION 5.10.  Public Announcements......................................... 53\nSECTION 5.11.  Affiliates................................................... 53\nSECTION 5.12.  Quotation.................................................... 54\nSECTION 5.13.  Litigation................................................... 54\nSECTION 5.14.  Tax Treatment................................................ 54\nSECTION 5.15.  Target Stockholder Agreement Legend; Parent\n               Stockholder Agreement Legend................................. 54\nSECTION 5.16.  Termination of Agreements.................................... 55\nSECTION 5.17.  Resignations................................................. 55\nSECTION 5.18.  Composition of Board of Directors of Parent.................. 55\n\n\n                                  ARTICLE VI\n\n                             Conditions Precedent\n\nSECTION 6.01.  Conditions to Each Party's Obligation To\n               Effect the Merger............................................ 55\n               (a) Stockholder Approval..................................... 55\n               (b) HSR Act.................................................. 55\n               (c) No Litigation............................................ 55\n               (d) Form S-4................................................. 56\nSECTION 6.02.  Conditions to Obligations of Parent\n               and Sub...................................................... 56\n               (a) Representations and Warranties........................... 56\n               (b) Performance of Obligations of Target..................... 56\nSECTION 6.03.  Conditions to Obligations of Target.......................... 57\n               (a) Representations and Warranties........................... 57\n               (b) Performance of Obligations of\n                      Parent and Sub........................................ 57\n               (c) Tax Opinion.............................................. 57\n               (d)    Nasdaq Quotation...................................... 57\nSECTION 6.04.  Frustration of Closing Conditions............................ 57\n\n\n\n\n\n                                                                Contents, p. 4\n\n                                                                          Page\n\n\n                                  ARTICLE VII\n\n                       Termination, Amendment and Waiver\n\nSECTION 7.01.  Termination.................................................. 58\nSECTION 7.02.  Effect of Termination........................................ 59\nSECTION 7.03.  Amendment.................................................... 59\nSECTION 7.04.  Extension; Waiver............................................ 59\nSECTION 7.05.  Procedure for Termination, Amendment,\n               Extension or Waiver.......................................... 60\n\n\n                                    ARTICLE VIII\n\n                              General Provisions\n\nSECTION 8.01.  Nonsurvival of Representations and\n               Warranties................................................... 60\nSECTION 8.02.  Notices...................................................... 60\nSECTION 8.03.  Definitions.................................................. 61\nSECTION 8.04.  Interpretation............................................... 62\nSECTION 8.05.  Counterparts................................................. 62\nSECTION 8.06.  Entire Agreement; No Third-Party\n               Beneficiaries................................................ 62\nSECTION 8.07.  Governing Law................................................ 63\nSECTION 8.08.  Assignment................................................... 63\nSECTION 8.09.  Enforcement.................................................. 63\nSECTION 8.10.  Severability................................................. 64\n\n\nAnnex I        -     Index of Defined Terms\nExhibit A      -     Form of Affiliate Letter\nExhibit B      -     Form of Tax Representation Letters\nSchedule I     -     Board of Directors of Parent\n\n\n\n\n\n                                    AGREEMENT AND PLAN OF MERGER (this\n                           \"Agreement\") dated as of February 29, 2000,\n                           among 24\/7 MEDIA, INC., a Delaware corpora\n                           tion (\"Parent\"), EVERGREEN ACQUISITION SUB\n                           CORP., a Delaware corporation and a wholly\n                           owned subsidiary of Parent (\"Sub\"), and\n                           EXACTIS.COM, INC., a Delaware corporation\n                           (\"Target\").\n\n\n          WHEREAS the respective Boards of Directors of\nParent, Sub and Target have approved and declared advisable\nthis Agreement and the merger of Sub with and into Target\n(the \"Merger\"), upon the terms and subject to the conditions\nset forth in this Agreement, whereby each issued and\noutstanding share of common stock, par value $0.01 per share,\nof Target (\"Target Common Stock\"), other than shares owned by\nParent, Sub or Target, will be converted into the right to\nreceive the Merger Consideration, and the Boards of Directors\nof Parent and Target have recommended that their respective\nstockholders adopt this Agreement;\n\n          WHEREAS the respective Boards of Directors of\nParent, Sub and Target have each determined that the Merger\nand the other transactions contemplated hereby are consistent\nwith, and in furtherance of, their respective business\nstrategies and goals;\n\n          WHEREAS Parent, Sub and Target desire to make\ncertain representations, warranties, covenants and agreements\nin connection with the Merger and also to prescribe various\nconditions to the Merger;\n\n          WHEREAS for U.S. federal income tax purposes, it is\nintended that (a) the Merger will qualify as a reorgani\nzation under the provisions of Section 368(a) of the Internal\nRevenue Code of 1986, as amended (the \"Code\"), and the rules\nand regulations promulgated thereunder and (b) this Agreement\nconstitutes a plan of reorganization;\n\n          WHEREAS simultaneously with the execution and\ndelivery of this Agreement and as a condition and inducement\nto the willingness of Parent and Sub to enter into this\nAgreement, Parent and certain stockholders of Target\n(collectively, the \"Target Stockholders\") are entering into\nan agreement (the \"Target Stockholder Agreement\") pursuant to\nwhich the Target Stockholders will agree to vote to adopt and\napprove this Agreement and to take certain other actions in\nfurtherance of the Merger upon the terms and subject to the\nconditions set forth in the Target Stockholder Agree ment;\n\n\n\n\n\n                                                            2\n\n\n          WHEREAS simultaneously with the execution and\ndelivery of this Agreement and as a condition and inducement\nto the willingness of Target to enter into this Agreement,\nTarget and certain stockholders of Parent (collectively, the\n\"Parent Stockholders\") are entering into an agreement (the\n\"Parent Stockholder Agreement\") pursuant to which the Parent\nStockholders will agree to vote to approve the issuance of\nshares of Parent Common Stock (as defined in Section 2.01(c))\nin connection with the Merger upon the terms and subject to\nthe conditions set forth in the Parent Stockholder Agreement;\n\n          WHEREAS simultaneously with the execution and\ndelivery of this Agreement, Parent and certain individuals\nare entering into employment agreements (the \"Employment\nAgreements\") pursuant to which Parent will agree to employ\nsuch individuals following the Effective Time (as defined in\nSection 1.03) and such individuals will agree to be subject\nto non-compete and non-solicitation obligations upon the\nterms and conditions set forth in the Employment Agreements;\nand\n\n          WHEREAS simultaneously with the execution and\ndelivery of this Agreement and as a condition and inducement\nto the willingness of Parent to enter into this Agreement,\nParent and the Target Stockholders have entered into Lock-Up\nAgreements (collectively, the \"Lock-Up Agreements\") pursuant\nto which the Target Stockholders have agreed to certain\nrestrictions relating to the disposition of Parent Common\nStock following the Effective Time under certain\ncircumstances.\n\n\n          NOW, THEREFORE, in consideration of the\nrepresentations, warranties, covenants and agreements\ncontained in this Agreement, the parties agree as follows:\n\n\n                          ARTICLE I\n\n                          The Merger\n\n          SECTION 1.01. The Merger. Upon the terms and\nsubject to the conditions set forth in this Agreement, and in\naccordance with the Delaware General Corporation Law (the\n\"DGCL\"), Sub shall be merged with and into Target at the\nEffective Time. Following the Effective Time, Target shall be\nthe surviving corporation (the \"Surviving Corporation\") and\nshall succeed to and assume all the rights and obligations of\nSub in accordance with the DGCL.\n\n          SECTION 1.02. Closing. The closing of the Merger\n(the \"Closing\") will take place at 10:00 a.m. on a date to\n\n\n\n\n\n                                                            3\n\n\nbe specified by the parties (the \"Closing Date\"), which shall\nbe no later than the second business day after satisfaction\nor waiver of the conditions set forth in Article VI (other\nthan those conditions that by their nature are to be\nsatisfied at the Closing, but subject to the satisfaction or\nwaiver of those conditions), unless another time or date is\nagreed to by the parties hereto. The Closing will be held at\nsuch location in the City of New York as is agreed to by the\nparties hereto.\n\n          SECTION 1.03. Effective Time. Subject to the\nprovisions of this Agreement, as soon as practicable on or\nafter the Closing Date, the parties shall file a certificate\nof merger or other appropriate documents (in any such case,\nthe \"Certificate of Merger\") executed in accordance with the\nrelevant provisions of the DGCL and shall make all other\nfilings or recordings required under the DGCL. The Merger\nshall become effective at such time as the Certificate of\nMerger is duly filed with the Delaware Secretary of State, or\nat such subsequent date or time as Parent and Target shall\nagree and specify in the Certificate of Merger (the time the\nMerger becomes effective being hereinafter referred to as the\n\"Effective Time\").\n\n          SECTION 1.04. Effects of the Merger. The Merger\nshall have the effects set forth in Section 259 of the DGCL.\n\n          SECTION 1.05. Certificate of Incorporation and\nBy-laws. (a) The certificate of incorporation of Target, as\nin effect immediately prior to the Effective Time, shall be\namended as of the Effective Time so that Article IV of such\ncertificate of incorporation reads in its entirety as\nfollows: \"The total number of shares of all classes of stock\nwhich the Corporation shall have authority to issue is 1,000\nshares of common stock, par value $0.01 per share.\", and, as\nso amended, such certificate of incorporation shall be the\ncertificate of incorporation of the Surviving Corporation\nuntil thereafter changed or amended as provided therein or by\napplicable law.\n\n          (b) The by-laws of Target, as in effect immediately\nprior to the Effective Time, shall be the by-laws of the\nSurviving Corporation until thereafter changed or amended as\nprovided therein or by applicable law.\n\n          SECTION 1.06. Board of Directors and Officers. (a)\nThe directors of Sub immediately prior to the Effective Time\nshall be the directors of the Surviving Corporation until the\nearlier of their resignation or removal or until their\nrespective successors are duly elected and qualified, as the\ncase may be.\n\n\n\n\n\n                                                            4\n\n\n          (b) The officers of Sub immediately prior to the\nEffective Time shall be the officers of the Surviving\nCorporation, until the earlier of their resignation or\nremoval or until their respective successors are duly elected\nand qualified, as the case may be.\n\n\n                          ARTICLE II\n\n       Effect of the Merger on the Capital Stock of the\n      Constituent Corporations; Exchange of Certificates\n\n          SECTION 2.01. Effect on Capital Stock. As of the\nEffective Time, by virtue of the Merger and without any\naction on the part of the holder of any shares of Target\nCommon Stock or any shares of capital stock of Sub:\n\n          (a) Capital Stock of Sub. Each issued and\n     outstanding share of capital stock of Sub shall be\n     converted into one share of common stock of the\n     Surviving Corporation.\n\n          (b) Cancelation of Treasury Stock and Parent- Owned\n     Stock. Each share of Target Common Stock that is owned\n     by Target, Sub or Parent shall automatically be canceled\n     and shall cease to exist, and no consideration shall be\n     delivered or deliverable in exchange therefor.\n\n          (c) Conversion of Target Common Stock. Subject to\n     Section 2.02(e), each issued and outstanding share of\n     Target Common Stock (other than shares to be canceled in\n     accordance with Section 2.01(b)) shall be converted into\n     the right to receive 0.60 (the \"Exchange Ratio\") fully\n     paid and nonassessable shares of common stock, par value\n     $0.01 per share, of Parent (\"Parent Common Stock\") (the\n     \"Merger Consideration\"). As of the Effective Time, all\n     such shares of Target Common Stock shall no longer be\n     outstanding and shall automatically be canceled and\n     shall cease to exist, and each holder of a certificate\n     representing any such shares of Target Common Stock\n     shall cease to have any rights with respect thereto,\n     except the right to receive the Merger Consideration to\n     be issued in consideration therefor upon surrender of\n     such certificate in accordance with Section 2.02,\n     without interest.\n\n          (d) Anti-Dilution Provisions. In the event Parent\n     changes (or establishes a record date for changing) the\n     number of shares of Parent Common Stock issued and\n     outstanding prior to the Effective Time as a result of a\n     stock split, stock dividend, recapitaliza tion,\n     subdivision, reclassification, combination, exchange of\n     shares or similar transaction with respect\n\n\n\n\n\n                                                            5\n\n\n     to the outstanding Parent Common Stock and the record\n     date therefor shall be prior to the Effective Time, the\n     Exchange Ratio shall be proportionately adjusted to\n     reflect such stock split, stock dividend, recapitaliza\n     tion, subdivision, reclassification, combination,\n     exchange of shares or similar transaction.\n\n          SECTION 2.02. Exchange of Certificates. (a)\nExchange Agent. As of the Effective Time, Parent shall enter\ninto an agreement with such bank or trust company as may be\ndesignated by Parent (the \"Exchange Agent\"), which shall\nprovide that Parent shall deposit with the Exchange Agent as\nof the Effective Time, for the benefit of the holders of\nshares of Target Common Stock, for exchange in accordance\nwith this Article II, through the Exchange Agent,\ncertificates representing the shares of Parent Common Stock\n(such shares of Parent Common Stock, together with any\ndividends or distributions with respect thereto with a record\ndate after the Effective Time being hereinafter referred to\nas the \"Exchange Fund\") issuable pursuant to Section 2.01 in\nexchange for outstanding shares of Target Common Stock.\n\n          (b) Exchange Procedures. As soon as reasonably\npracticable after the Effective Time, the Exchange Agent\nshall mail to each holder of record of a certificate or\ncertificates which immediately prior to the Effective Time\nrepresented outstanding shares of Target Common Stock (the\n\"Certificates\") whose shares were converted into the right to\nreceive the Merger Consideration pursuant to Section 2.01,\n(i) a letter of transmittal (which shall specify that\ndelivery shall be effected, and risk of loss and title to the\nCertificates shall pass, only upon delivery of the\nCertificates to the Exchange Agent and shall be in such form\nand have such other provisions as Parent and Target may\nreasonably specify) and (ii) instructions for use in\nsurrendering the Certificates in exchange for the Merger\nConsideration. Upon surrender of a Certificate for\ncancelation to the Exchange Agent, together with such letter\nof transmittal, duly executed, and such other documents as\nmay reasonably be required by the Exchange Agent, the holder\nof such Certificate shall receive in exchange therefor a\ncertificate representing that number of whole shares of\nParent Common Stock which such holder has the right to\nreceive pursuant to the provisions of this Article II and\ncertain dividends or other distributions in accordance with\nSection 2.02(c), and the Certificate so surrendered shall\nforthwith be canceled. In the event of a transfer of\nownership of Target Common Stock which is not registered in\nthe transfer records of Target, a certificate representing\nthe proper number of shares of Parent Common Stock may be\nissued to a person other than the person in whose name the\nCertificate so surrendered is registered if such Certificate\n\n\n\n\n\n                                                            6\n\n\nshall be properly endorsed or otherwise be in proper form for\ntransfer and the person requesting such issuance shall pay\nany transfer or other taxes required by reason of the\nissuance of shares of Parent Common Stock to a person other\nthan the registered holder of such Certificate or establish\nto the satisfaction of Parent that such tax has been paid or\nis not applicable. Until surrendered as contemplated by this\nSection 2.02(b), each Certificate shall be deemed at any time\nafter the Effective Time to represent only the right to\nreceive the Merger Consideration to be issued in\nconsideration therefor upon surrender of such certificate in\naccordance with this Section 2.02. No interest shall be paid\nor will accrue on any cash payable to holders of Certificates\npursuant to the provisions of this Article II.\n\n          (c) Distributions with Respect to Unexchanged\nShares. No dividends or other distributions with respect to\nParent Common Stock with a record date after the Effective\nTime shall be paid to the holder of any unsurrendered\nCertificate with respect to the shares of Parent Common Stock\nrepresented thereby, and all such dividends and other\ndistributions shall be paid by Parent to the Exchange Agent\nand shall be included in the Exchange Fund, until the\nsurrender of such Certificate in accordance with this Article\nII. Subject to the effect of applicable escheat or similar\nlaws, following surrender of any such Certificate there shall\nbe paid to the holder of the certificate representing whole\nshares of Parent Common Stock issued in exchange therefor,\nwithout interest, (i) at the time of such surrender, the\namount of dividends or other distributions with a record date\nafter the Effective Time theretofore paid with respect to\nsuch whole shares of Parent Common Stock and (ii) at the\nappropriate payment date, the amount of dividends or other\ndistributions with a record date after the Effective Time but\nprior to such surrender and with a payment date subsequent to\nsuch surrender payable with respect to such whole shares of\nParent Common Stock.\n\n          (d) No Further Ownership Rights in Target Common\nStock. All shares of Parent Common Stock issued upon the\nsurrender for exchange of Certificates in accordance with the\nterms of this Article II (including any cash paid pursuant to\nthis Article II) shall be deemed to have been issued (and\npaid) in full satisfaction of all rights pertaining to the\nshares of Target Common Stock theretofore represented by such\nCertificates, subject, however, to the Surviving\nCorporation's obligation to pay any dividends or make any\nother distributions with a record date prior to the Effective\nTime which may have been declared or made by Target on such\nshares of Target Common Stock which remain unpaid at the\nEffective Time, and there shall be no further registration of\ntransfers on the stock transfer books of the Surviving\nCorporation of the shares of Target Common Stock\n\n\n\n\n\n                                                            7\n\n\nwhich were outstanding immediately prior to the Effective\nTime. If, after the Effective Time, Certificates are\npresented to the Surviving Corporation or the Exchange Agent\nfor any reason, they shall be canceled and exchanged as\nprovided in this Article II, except as otherwise provided by\nlaw.\n\n          (e) No Fractional Shares. (i) No certificates or\nscrip representing fractional shares of Parent Common Stock\nshall be issued upon the surrender for exchange of\nCertificates, no dividend or distribution of Parent shall\nrelate to such fractional share interests and such fractional\nshare interests will not entitle the owner thereof to vote or\nto any rights of a stockholder of Parent.\n\n          (ii) Notwithstanding any other provision of this\nAgreement, each holder of shares of Target Common Stock\nexchanged pursuant to the Merger who would otherwise have\nbeen entitled to receive a fraction of a share of Parent\nCommon Stock (after taking into account all Certificates\ndelivered by such holder) shall receive, in lieu thereof,\ncash (without interest) in an amount, less the amount of any\nwithholding taxes that may be required thereon, equal to such\nfractional part of a share of Parent Common Stock multiplied\nby the per share last reported sale price of Parent Common\nStock on the Closing Date, as such price is quoted by Nasdaq.\n\n          (f) Termination of Exchange Fund. Any portion of\nthe Exchange Fund which remains undistributed to the holders\nof the Certificates for six months after the Effective Time\nshall be delivered to Parent, upon demand, and any holders of\nthe Certificates who have not theretofore complied with this\nArticle II shall thereafter look only to Parent for payment\nof their claim for Merger Consideration and any dividends or\ndistributions with respect to Parent Common Stock.\n\n          (g) No Liability. None of Parent, Sub, Target or\nthe Exchange Agent shall be liable to any person in respect\nof any shares of Parent Common Stock or any dividends or\ndistributions with respect thereto, in each case delivered to\na public official pursuant to any applicable abandoned\nproperty, escheat or similar law. If any Certificate shall\nnot have been surrendered prior to one year after the\nEffective Time (or immediately prior to such date on which\nany amounts payable pursuant to this Article II would\notherwise escheat to or become the property of any Govern\nmental Entity), any such amounts shall, to the extent\npermitted by applicable law, become the property of the\nSurviving Corporation, free and clear of all claims or\ninterest of any person previously entitled thereto.\n\n\n\n\n\n                                                            8\n\n\n          (h) Investment of Exchange Fund. The Exchange Agent\nshall invest any cash included in the Exchange Fund, as\ndirected by Parent, on a daily basis. Any interest and other\nincome resulting from such investments shall be paid to\nParent.\n\n          (i) Lost Certificates. If any Certificate shall\nhave been lost, stolen or destroyed, upon the making of an\naffidavit of that fact by the person claiming such Certifi\ncate to be lost, stolen or destroyed and, if required by\nParent, the posting by such person of a bond in such reason\nable amount as Parent may direct as indemnity against any\nclaim that may be made against it with respect to such\nCertificate, the Exchange Agent shall issue in exchange for\nsuch lost, stolen or destroyed Certificate the applicable\nMerger Consideration with respect thereto and, if appli\ncable, any unpaid dividends and distributions on shares of\nParent Common Stock deliverable in respect thereof, in each\ncase pursuant to this Agreement.\n\n\n                         ARTICLE III\n\n                Representations and Warranties\n\n          SECTION 3.01. Representations and Warranties of\nTarget. Except as disclosed in the Target Filed SEC Docu\nments or as set forth on the Disclosure Schedule delivered by\nTarget to Parent prior to the execution of this Agreement\n(the \"Target Disclosure Schedule\") (each section of which\nqualifies the correspondingly numbered representation and\nwarranty or covenant to the extent specified therein and such\nother representations and warranties or covenants to the\nextent a matter in such section is disclosed in such a way as\nto make its relevance to the information called for by such\nother representation and warranty or covenant reasonably\napparent), Target represents and warrants to Parent and Sub\nas follows:\n\n          (a) Organization, Standing and Corporate Power.\n     Target is a corporation duly organized, validly existing\n     and in good standing under the laws of the State of\n     Delaware and has the requisite corporate power and\n     authority to carry on its business as now being\n     conducted. Target is duly qualified or licensed to do\n     business and is in good standing in each jurisdiction in\n     which the nature of its business or the ownership,\n     leasing or operation of its assets makes such\n     qualification or licensing necessary, except for those\n     jurisdictions where the failure to be so qualified or\n     licensed or to be in good standing, individually and in\n     the aggregate, is not reasonably likely to have a\n     material adverse effect on Target. Target has made\n\n\n\n\n\n                                                            9\n\n\n     available to Parent prior to the execution of this\n     Agreement complete and correct copies of its certificate\n     of incorporation and by-laws, as amended to the date of\n     this Agreement.\n\n          (b) Subsidiaries. Target has no subsidiaries.\n\n          (c) Capital Structure. The authorized capital stock\n     of Target consists of 35,000,000 shares of Target Common\n     Stock and 3,500,000 shares of preferred stock, par value\n     $0.01 per share, of Target (\"Target Author ized\n     Preferred Stock\"). At the close of business on February\n     10, 2000, (i) 12,700,898 shares of Target Common Stock\n     were issued and outstanding; (ii) no shares of Target\n     Common Stock were held by Target in its treasury; (iii)\n     no shares of Target Authorized Preferred Stock were\n     issued and outstanding; (iv) 3,202,264 shares of Target\n     Common Stock were reserved for issuance pursuant to the\n     Target 1996 Stock Option Plan, the Target 1997 Stock\n     Option Plan, the Target 1999 Equity Incentive Plan and\n     the Target 1999 Employee Stock Purchase Plan (such\n     plans, collectively, the \"Target Stock Plans\") of which\n     2,073,548 are subject to outstanding Target Stock\n     Options; and (v) 1,275,158 shares of Target Common Stock\n     were reserved for issuance upon the exercise of the\n     warrants (the \"Warrants\") subject to the warrant\n     agreements listed in Section 3.01(c) of the Target\n     Disclosure Schedule. Except as set forth above, at the\n     close of business on February 10, 2000, no shares of\n     capital stock or other voting securities of Target were\n     issued, reserved for issuance or outstanding. There are\n     no outstanding stock appreciation rights (\"SARs\") or\n     rights (other than the Target Stock Options) to receive\n     shares of Target Common Stock on a deferred basis\n     granted under the Target Stock Plans or otherwise.\n     Target has delivered to Parent a complete and correct\n     list, as of February 10, 2000, of each holder of\n     outstanding stock options or other rights to purchase or\n     receive Target Common Stock granted under the Target\n     Stock Plans (collectively, \"Target Stock Options\") and\n     the Warrants, the number of shares of Target Common\n     Stock subject to each such Target Stock Option and\n     Warrant, the name of the Target Stock Plan pursuant to\n     which such Target Stock Options were granted, the grant\n     dates and exercise prices of such Target Stock Options\n     and Warrants and the dates on which such Target Stock\n     Options and Warrants become vested. All (i) outstanding\n     shares of Target Common Stock in respect of which Target\n     has a right under specified circumstances to repurchase\n     such shares at a fixed purchase price and (ii)\n     outstanding Target Stock Options, are evidenced by stock\n     option agreements and\n\n\n\n\n\n                                                           10\n\n\n     restricted stock purchase agreements in substantially\n     the forms attached as Exhibit A to Section 3.01(c) of\n     the Target Disclosure Schedule, and no stock option\n     agreement or restricted stock purchase agreement\n     contains terms that are substantially inconsistent with\n     such forms. No bonds, debentures, notes or other\n     indebtedness of Target having the right to vote (or\n     convertible into, or exchangeable for, securities having\n     the right to vote) on any matters on which stockholders\n     of Target may vote are issued or outstanding or subject\n     to issuance. All outstanding shares of capital stock of\n     Target are, and all shares which may be issued will be,\n     when issued, duly authorized, validly issued, fully paid\n     and nonassessable and will be delivered free and clear\n     of all pledges, claims, liens, charges, encumbrances and\n     security interests of any kind or nature whatsoever\n     (collectively, \"Liens\"), other than Liens created by or\n     imposed upon the holders thereof, and not subject to\n     preemptive rights. Except as set forth in this Section\n     3.01(c) (including pursuant to the conversion or\n     exercise of the securities referred to above), (x) there\n     are not issued, reserved for issuance or outstanding (A)\n     any shares of capital stock or other voting securities\n     of Target, (B) any securities of Target convertible into\n     or exchangeable or exercisable for shares of capital\n     stock or other voting securities of, or other ownership\n     interests in, Target or (C) any warrants, calls, options\n     or other rights to acquire from Target, and no\n     obligation of Target to issue, any capital stock or\n     other voting securities of, or other ownership interests\n     in, or any securities convertible into or exchangeable\n     or exercisable for any capital stock or other voting\n     securities of, or other ownership interests in, Target\n     and (y) there are not any outstanding obligations of\n     Target to repurchase, redeem or otherwise acquire any\n     such securities or to issue, deliver or sell, or cause\n     to be issued, delivered or sold, any such securities.\n     Target is not a party to any voting agreement with\n     respect to the voting of any such securities. Target\n     does not directly or indirectly beneficially own any\n     securities or other beneficial ownership interests in\n     any other entity. The Target Stockholders hold of record\n     over 50% of the outstanding shares of Target Common\n     Stock (calculated on a fully diluted basis assuming the\n     exercise of all outstanding securities of Target that\n     are currently, or may become on or prior to August 31,\n     2000, convertible into or exchangeable or exercisable\n     for, shares of capital stock or other voting securities\n     of Target).\n\n          (d) Authority; Noncontravention. Target has all\n     requisite corporate power and authority to enter into\n\n\n\n\n\n                                                           11\n\n\n     this Agreement and, subject to the Target Stockholder\n     Approval, to consummate the transactions contemplated by\n     this Agreement. The execution and delivery of this\n     Agreement by Target and the consummation by Target of\n     the transactions contemplated by this Agreement have\n     been duly authorized by all necessary corporate action\n     on the part of Target, subject, in the case of the\n     Merger, to the Target Stockholder Approval. This\n     Agreement has been duly executed and delivered by Target\n     and, assuming the due authorization, execution and\n     delivery by each of the other parties thereto,\n     constitutes a legal, valid and binding obligation of\n     Target, enforceable against Target in accordance with\n     its terms. The execution and delivery of this Agree ment\n     does not, and the consummation of the transactions\n     contemplated by this Agreement and compliance with the\n     provisions of this Agreement will not, conflict with, or\n     result in any violation of, or default (with or without\n     notice or lapse of time, or both) under, or give rise to\n     a right of termination, cancelation or acceleration of\n     any obligation or to the loss of a benefit under, or\n     result in the creation of any Lien upon any of the\n     properties or assets of Target under, (i) the\n     certificate of incorporation or by-laws of Target, (ii)\n     any loan or credit agreement, note, bond, mortgage,\n     indenture, lease or other contract, agreement,\n     obligation, commitment, arrangement, understanding,\n     instrument, permit, concession, franchise, license or\n     similar authorization (each, a \"Contract\") applicable to\n     Target or its properties or assets or (iii) subject to\n     the governmental filings and other matters referred to\n     in the following sentence, (A) any judgment, order or\n     decree or (B) any statute, law, ordinance, rule or\n     regulation, in each case applicable to Target or its\n     properties or assets, other than, in the case of clauses\n     (ii) and (iii), any such conflicts, violations,\n     defaults, rights, losses or Liens that, individually and\n     in the aggregate, are not reasonably likely to (x) have\n     a material adverse effect on Target, (y) impair the\n     ability of Target to perform its obligations under this\n     Agreement or (z) prevent or materially delay the\n     consummation of the transactions contemplated by this\n     Agreement. No consent, approval, order or authorization\n     of, action by or in respect of, or registration,\n     declaration or filing with, any federal, state, local or\n     foreign government, any court, administrative,\n     regulatory or other governmental agency, commission or\n     authority or any non-governmental self-regulatory\n     agency, commission or authority (each a \"Governmental\n     Entity\") is required by or with respect to Target in\n     connection with the execution and delivery of this\n     Agreement by Target or the consummation by Target of the\n     transactions contemplated by this\n\n\n\n\n\n                                                           12\n\n\n     Agreement, except for (1) the filing of a premerger\n     notification and report form by Target under the Hart-\n     Scott-Rodino Antitrust Improvements Act of 1976, as\n     amended (the \"HSR Act\"), and any applicable filings and\n     approvals under similar foreign antitrust or competition\n     laws and regulations; (2) the filing with the Securities\n     and Exchange Commission (the \"SEC\") of (A) a joint proxy\n     statement relating to the Target Stockholders Meeting\n     and the Parent Stockholders Meeting (such proxy\n     statement, as amended or supplemented from time to time,\n     the \"Proxy Statement\"), and (B) such reports under\n     Section 13(a), 13(d), 15(d) or 16(a) of the Securities\n     Exchange Act of 1934, as amended (the \"Exchange Act\"),\n     as may be required in connection with this Agreement,\n     the Target Stockholder Agreement, the Parent Stockholder\n     Agreement and the transactions contemplated by this\n     Agreement, the Target Stockholder Agreement and the\n     Parent Stockholder Agreement; (3) the filing of the\n     Certificate of Merger with the Delaware Secretary of\n     State and appropriate documents with the relevant\n     authorities of other states in which Target is qualified\n     to do business and such filings with Governmental\n     Entities to satisfy the applicable requirements of state\n     securities or \"blue sky\" laws; and (4) such other\n     consents, approvals, orders, authorizations,\n     registrations, declarations and filings the failure of\n     which to be made or obtained, individually and in the\n     aggregate, are not reasonably likely to (x) have a\n     material adverse effect on Target, (y) impair the\n     ability of Target to perform its obligations under this\n     Agreement or (z) prevent or materially delay the\n     consummation of the transactions contemplated by this\n     Agreement.\n\n          (e) SEC Documents; Undisclosed Liabilities. Target\n     has filed all required reports, schedules, forms,\n     statements and other documents (including exhibits and\n     all other information incorporated therein) with the SEC\n     since November 24, 1999 (together with Target's\n     Registration Statement on Form S-1 (Registration No.\n     333-85315), the \"Target SEC Documents\"). As of their\n     respective dates, the Target SEC Documents complied in\n     all material respects with the requirements of the\n     Securities Act of 1933 (the \"Securities Act\") or the\n     Exchange Act, as the case may be, and the rules and\n     regulations of the SEC promul gated thereunder\n     applicable to such Target SEC Documents, and none of the\n     Target SEC Documents when filed contained any untrue\n     statement of a material fact or omitted to state a\n     material fact required to be stated therein or necessary\n     in order to make the statements therein, in light of the\n     circumstances under which they were made, not\n     misleading. The financial\n\n\n\n\n\n                                                           13\n\n\n     statements of Target included in the Target SEC\n     Documents comply as to form, as of their respective\n     dates of filing with the SEC, in all material respects\n     with applicable accounting requirements and the\n     published rules and regulations of the SEC with respect\n     thereto (the \"Accounting Rules\"), have been prepared in\n     accordance with generally accepted accounting principles\n     (\"GAAP\") (except, in the case of unaudited statements,\n     as permitted by Form 10-Q of the SEC) applied on a\n     consistent basis during the periods involved (except as\n     may be indicated in the notes thereto) and fairly\n     present in all material respects the financial position\n     of Target as of the dates thereof and the results of its\n     operations and cash flows for the periods then ended\n     (subject, in the case of unaudited statements, to normal\n     recurring year-end audit adjustments). Except (i) as\n     reflected in the financial statements contained in the\n     Target Filed SEC Documents or in the notes thereto or\n     (ii) for liabilities incurred in connection with this\n     Agreement or the transactions contemplated hereby,\n     Target does not have any liabilities or obligations of\n     any nature (whether accrued, absolute, contingent or\n     otherwise) which, individually or in the aggregate, when\n     taken as a whole with any benefits or rights\n     corresponding to such liabilities or obligations, are\n     reasonably likely to have a material adverse effect on\n     Target.\n\n          (f) Information Supplied. None of the informa tion\n     supplied or to be supplied by Target specifically for\n     inclusion or incorporation by reference in (i) the\n     registration statement on Form S-4 to be filed with the\n     SEC by Parent in connection with the issuance of Parent\n     Common Stock in the Merger (the \"Form S-4\") will, at the\n     time the Form S-4 becomes effective under the Securities\n     Act, contain any untrue statement of a material fact or\n     omit to state any material fact required to be stated\n     therein or necessary to make the statements therein not\n     misleading or (ii) the Proxy Statement will, at the date\n     it is first mailed to Target's or Parent's stockholders\n     or at the time of the Target Stockholders Meeting or the\n     Parent Stockholders Meeting, contain any untrue\n     statement of a material fact or omit to state any\n     material fact required to be stated therein or necessary\n     in order to make the statements therein, in light of the\n     circumstances under which they are made, not misleading.\n     The Proxy Statement will comply as to form in all\n     material respects with the requirements of the Exchange\n     Act and the rules and regulations thereunder. No\n     representa tion or warranty is made by Target with\n     respect to statements made or incorporated by reference\n     therein based on information supplied by Parent\n     specifically\n\n\n\n\n\n                                                           14\n\n\n     for inclusion or incorporation by reference in the Proxy\n     Statement.\n\n          (g) Absence of Certain Changes or Events. Except\n     for liabilities incurred in connection with this\n     Agreement, the Parent Stockholder Agreement or the\n     transactions contemplated hereby or thereby and except\n     as disclosed in the Target SEC Documents filed and\n     publicly available prior to the date of this Agreement\n     (as amended to the date of this Agreement, the \"Target\n     Filed SEC Documents\"), from December 31, 1998 to the\n     date of this Agreement, Target has conducted its\n     business only in the ordinary course, and during such\n     period there has not been (1) any material adverse\n     change in Target, (2) any declaration, setting aside or\n     payment of any dividend or other distribution (whether\n     in cash, stock or property) with respect to any of\n     Target's capital stock, (3) any split, combination or\n     reclassification of any of Target's capital stock or any\n     issuance or the authorization of any issuance of any\n     other securities in respect of, in lieu of or in\n     substitution for shares of Target's capital stock, (4)\n     (A) any granting by Target to any current or former\n     director, consultant, executive officer or other\n     employee of Target of any increase in compensation,\n     bonus or other benefits, except for normal increases in\n     cash compensation in the ordinary course of business\n     consistent with past practice or as was required under\n     any employment agreements in effect as of the date of\n     the most recent audited financial statements included in\n     the Target Filed SEC Documents, (B) any granting by\n     Target to any such current or former director,\n     consultant, executive officer or employee of any\n     increase in severance or termination pay, (C) any entry\n     by Target into, or any amendments of, any Target Benefit\n     Agreement or (D) any amendment to, or modification of,\n     any Target Stock Option, (5) except insofar as may have\n     been required by a change in GAAP, any change in\n     accounting methods, principles or practices by Target\n     materially affecting their respective assets,\n     liabilities or businesses, (6) any tax election that\n     individually or in the aggregate is reasonably likely to\n     adversely affect in any material respect the tax\n     liability or tax attributes of Target or (7) any\n     settlement or compromise of any material income tax\n     liability. Except for liabilities incurred in connection\n     with this Agreement, the Parent Stock holder Agreement\n     or the transactions contemplated hereby or thereby and\n     except as disclosed in the Target Filed SEC Documents,\n     since December 31, 1998, there has not been any material\n     adverse change in Target.\n\n\n\n\n\n                                                           15\n\n\n          (h) Litigation. There is no suit, action or\n     proceeding pending or, to the knowledge of Target,\n     threatened against or affecting Target that,\n     individually or in the aggregate, is reasonably likely\n     to have a material adverse effect on Target nor is there\n     any judgment, decree, injunction, rule or order of any\n     Governmental Entity or arbitrator outstanding against\n     Target having, or which is reasonably likely to have,\n     individually or in the aggregate, a material adverse\n     effect on Target. Section 3.01(h) of the Target\n     Disclosure Schedule sets forth a true and complete list,\n     as of the date of this Agreement, of each settlement or\n     similar agreement in respect of any pending or\n     threatened suit, action, proceeding, judgment, decree,\n     injunction, rule or order of any Governmental Entity or\n     arbitrator which Target has entered into or become bound\n     by since June 30, 1999.\n\n          (i) Compliance with Applicable Laws. (i) Target\n     holds all material permits, licenses, variances,\n     exemptions, orders, registrations and approvals of all\n     Governmental Entities (the \"Target Permits\") that are\n     required for them to own, lease or operate their assets\n     and to carry on their businesses. Target is in\n     compliance with the terms of the Target Permits and all\n     applicable statutes, laws (including Environmental\n     Laws), ordinances, rules and regulations, except for\n     such failures to comply that, individually and in the\n     aggregate, are not reasonably likely to have a material\n     adverse effect on Target. No action, demand, requirement\n     or investigation by any Governmental Entity and no suit,\n     action or proceeding by any person, in each case with\n     respect to Target or any of its properties that,\n     individually or in the aggregate, is reasonably likely\n     to have a material adverse effect on Target, is pending\n     or, to the knowledge of Target, threatened.\n\n          (ii) To Target's knowledge, there have been no\n     Releases of any Hazardous Materials at, on or under any\n     facility or property currently or formerly owned,\n     leased, or operated by Target that, individually or in\n     the aggregate, are reasonably likely to have a material\n     adverse effect on Target. Target is not the subject of\n     any pending or, to Target's knowledge, threatened\n     investigation or proceeding under Environmental Law\n     relating in any manner to the off-site treatment,\n     storage or disposal of any Hazardous Materials generated\n     at any facility or property currently or formerly owned,\n     leased or operated by Target. The term \"Environmental\n     Law\" means any and all applicable laws or regulations or\n     other requirements of any Governmental Entity concerning\n     the protection of human\n\n\n\n\n\n                                                           16\n\n\n     health or the environment. The term \"Hazardous\n     Materials\" means all explosive or radioactive materials,\n     hazardous or toxic substances, wastes or chemicals,\n     petroleum (including crude oil or any fraction thereof)\n     or petroleum distillates, asbestos or\n     asbestos-containing materials, and all other materials\n     or chemicals regulated under any Environmental Law. The\n     term \"Release\" means any spill, emission, leaking,\n     pumping, injection, deposit, disposal, discharge,\n     dispersal, leaching, emanation or migration in, into,\n     onto, or through the environment.\n\n          (j) Absence of Changes in Benefit Plans. Since the\n     date of the most recent audited financial state ments\n     included in the Target Filed SEC Documents, there has\n     not been any adoption or amendment by Target of any\n     collective bargaining agreement or any bonus, pension,\n     profit sharing, deferred compensation, incentive\n     compensation, stock ownership, stock purchase, stock\n     option, phantom stock, retirement, thrift, savings,\n     stock bonus, restricted stock, cafeteria, paid time off,\n     perquisite, fringe benefit, vacation, severance,\n     disability, death benefit, hospitalization, medical,\n     welfare benefit or other plan, arrangement or\n     understanding (whether or not legally binding) providing\n     benefits to any current or former employee, officer,\n     consultant or director of Target (collectively, the\n     \"Target Benefit Plans\"), or any change in any actuarial\n     or other assumption used to calculate funding\n     obligations with respect to any Target pension plans, or\n     any change in the manner in which contributions to any\n     Target pension plans are made or the basis on which such\n     contributions are determined. Except as disclosed in the\n     Target Filed SEC Documents, there are not any\n     employment, consulting, deferred compensation,\n     indemnification, severance or termination agreements or\n     arrangements between Target and any current or former\n     employee, officer, consultant or director of Target\n     (collectively, the \"Target Benefit Agreements\").\n\n          (k) ERISA Compliance; Excess Parachute Payments.\n     (i) Section 3.01(k) of the Target Disclosure Schedule\n     contains a list of all \"employee pension benefit plans\"\n     (as defined in Section 3(2) of the Employee Retirement\n     Income Security Act of 1974, as amended (\"ERISA\"))\n     (sometimes referred to herein as \"Target Pension\n     Plans\"), \"employee welfare benefit plans\" (as defined in\n     Section 3(1) of ERISA) and all other Target Benefit\n     Plans and Target Benefit Agreements maintained, or\n     contributed to, by Target, or to which Target is a\n     party, for the benefit of any current or former\n     employees, officers or directors of Target. Target has\n\n\n\n\n\n                                                           17\n\n\n     made available to Parent or will make available to\n     Parent upon request true, complete and correct copies of\n     (a) each Target Benefit Plan and Target Benefit\n     Agreement (or, in the case of any unwritten Target\n     Benefit Plan or Target Benefit Agreement, a description\n     thereof), (b) the most recent annual report on Form 5500\n     filed with the Internal Revenue Service with respect to\n     each Target Benefit Plan (if any such report was\n     required), (c) the most recent summary plan description\n     for each Target Benefit Plan for which such summary plan\n     description is required and (d) each trust agreement and\n     group annuity contract relating to any Target Benefit\n     Plan.\n\n          (ii) Each Target Benefit Plan has been admini\n     stered in all material respects in accordance with its\n     terms. Target and each Target Benefit Plan are in\n     substantial compliance with the applicable provisions of\n     ERISA and the Code, and all other applicable laws and\n     the terms of all collective bargaining agreements. All\n     Target Pension Plans intended to be qualified have\n     received favorable determination letters from the\n     Internal Revenue Service with respect to \"TRA\" (as\n     defined in Section 1 of Rev. Proc. 93-39), to the effect\n     that such Target Pension Plans are qualified and exempt\n     from Federal income taxes under Sections 401(a) and\n     501(a), respectively, of the Code, and no such\n     determination letter has been revoked nor, to the\n     knowledge of Target, has revocation been threatened, nor\n     has any such Target Pension Plan been amended since the\n     date of its most recent determination letter or\n     application therefor in any respect that would adversely\n     affect its qualification or materially increase its\n     costs. There is no pending or, to the knowledge of\n     Target, threatened litigation relating to Target Benefit\n     Plans.\n\n          (iii) None of Target or any person which is\n     considered one employer with Target under Section 4001\n     of ERISA or Section 414 of the Code (an \"ERISA\n     Affiliate\") has or could reasonably be expected to have\n     any liability under Title IV of ERISA with respect to\n     any Target Benefit Plan. None of Target, any officer of\n     Target or any of the Target Benefit Plans which are\n     subject to ERISA, including the Target Pension Plans,\n     any trusts created thereunder or, to the knowledge of\n     Target, any trustee or administrator thereof, has\n     engaged in a \"prohibited transaction\" (as such term is\n     defined in Section 406 of ERISA or Section 4975 of the\n     Code) or any other breach of fiduciary responsibility\n     that could subject Target or any officer of Target to\n     the tax or penalty on prohibited transactions imposed by\n     such Section 4975 in an amount that would be\n\n\n\n\n\n                                                           18\n\n\n     material or to any material liability under Section\n     502(i) or 502(l) of ERISA. All contributions and\n     premiums required to be made under the terms of any\n     Target Benefit Plan as of the date hereof have been\n     timely made or have been reflected on the most recent\n     consolidated balance sheet filed or incorporated by\n     reference in the Filed Target SEC Documents. Neither any\n     Target Pension Plan nor any single-employer plan of an\n     ERISA Affiliate has an \"accumulated funding deficiency\"\n     (as such term is defined in Section 302 of ERISA or\n     Section 412 of the Code), whether or not waived.\n\n          (iv) With respect to any Target Benefit Plan that\n     is an employee welfare benefit plan, (a) no such Target\n     Benefit Plan is unfunded or funded through a \"welfare\n     benefit fund\" (as such term is defined in Section 419(e)\n     of the Code) and (b) each such Target Benefit Plan that\n     is a \"group health plan\" (as such term is defined in\n     Section 5000(b)(1) of the Code) complies with the\n     applicable requirements of Section 4980B(f) of the Code.\n     Target has no obligations for retiree health and life\n     benefits under any Target Benefit Plan or Target Benefit\n     Agreement.\n\n          (v) The consummation of the Merger or any other\n     transaction contemplated by this Agreement, the Target\n     Stockholder Agreement or the Parent Stockholder Agree\n     ment will not (x) entitle any employee, officer,\n     consultant or director of Target to severance pay, (y)\n     accelerate the time of payment or vesting or trigger any\n     payment or funding (through a grantor trust or\n     otherwise) of compensation or benefits under, increase\n     the amount payable or trigger any other material\n     obligation pursuant to, any of the Target Benefit Plans\n     or Target Benefit Agreements or (z) result in any breach\n     or violation of, or a default under, any of the Target\n     Benefit Plans or Target Benefit Agreements.\n\n          (vi) Other than payments that may be made to the\n     persons listed in Section 3.01(k)(vi) of the Target\n     Disclosure Schedule (the \"Primary Target Executives\"),\n     any amount or economic benefit that could be received\n     (whether in cash or property or the vesting of property)\n     as a result of the Merger or any other transaction\n     contemplated by this Agreement, the Target Stockholder\n     Agreement or the Parent Stockholder Agreement (including\n     as a result of termination of employment on or following\n     the Effective Time) by any employee, officer or director\n     of Target or any of its affiliates who is a\n     \"disqualified individual\" (as such term is defined in\n     proposed Treasury Regulation\n\n\n\n\n\n                                                           19\n\n\n     Section 1.280G-1) under any Target Benefit Plan or\n     Target Benefit Agreement or otherwise would not be\n     characterized as an \"excess parachute payment\" (as\n     defined in Section 280G(b)(1) of the Code), and no\n     disqualified individual is entitled to receive any\n     additional payment from Target or any other person in\n     the event that the excise tax under Section 4999 of the\n     Code is imposed on such disqualified individual. Set\n     forth in Section 3.01(k)(vi) of the Target Disclosure\n     Schedule is (a) the estimated maximum amount that could\n     be paid to each Primary Target Executive as a result of\n     the Merger and the other transactions contemplated by\n     this Agreement, the Target Stockholder Agreement and the\n     Parent Stockholder Agreement (including as a result of a\n     termination of employment on or following the Effective\n     Time) under all Target Benefit Plans and Target Benefit\n     Agreements and (b) the \"base amount\" (as defined in\n     Section 280G(b)(3) of the Code) for each Primary Target\n     Executive calculated as of the date of this Agreement.\n\n          (vii) Target is in compliance with all Federal,\n     state and local requirements regarding employment,\n     except for such failures to comply that, individually\n     and in the aggregate, are not reasonably likely to have\n     a material adverse effect on Target. As of the date of\n     this Agreement, Target is not a party to any collective\n     bargaining or other labor union contract applicable to\n     persons employed by Target and no collective bargaining\n     agreement is being negotiated by Target. As of the date\n     of this Agreement, there is no labor dispute, strike or\n     work stoppage against Target pending or, to the\n     knowledge of Target, threatened which may interfere with\n     the business activities of Target. As of the date of\n     this Agreement, to the knowledge of Target, none of\n     Target or any of its representatives or employees has\n     committed an unfair labor practice in connection with\n     the operation of the business of Target, and there is no\n     charge or complaint against Target by the National Labor\n     Relations Board or any comparable governmental agency\n     pending or threatened in writing.\n\n          (l) Taxes. (i) Target has filed all tax returns and\n     reports required to be filed by it and all such returns\n     and reports are complete and correct in all material\n     respects, or requests for extensions to file such\n     returns or reports have been timely filed, granted and\n     have not expired, except to the extent that such\n     failures to file, to be complete or correct or to have\n     extensions granted that remain in effect, individually\n     and in the aggregate, are not reasonably likely to have\n     a material adverse effect on Target. Target has paid all\n     taxes due with respect to such returns, and the\n\n\n\n\n\n                                                           20\n\n\n     most recent financial statements contained in the Target\n     Filed SEC Documents reflect an adequate reserve for all\n     taxes payable by Target for all taxable periods and\n     portions thereof accrued through the date of such\n     financial statements.\n\n          (ii) No deficiencies for any taxes have been\n     proposed, asserted or assessed against Target that are\n     not adequately reserved for, except for deficiencies\n     that individually or in the aggregate are not reasonably\n     likely to have a material adverse effect on Target. The\n     Federal income tax returns of Target for periods ending\n     on or before December 31, 1995, have closed by virtue of\n     the applicable statute of limitations and no requests\n     for waivers of the time to assess any such taxes are\n     pending, and, with respect to all subsequent periods, no\n     Federal or state tax return or report or any other\n     material tax return or report of Target is currently\n     under audit and no written or unwritten notice of any\n     such audit or similar examination has been received by\n     Target. There is no currently effective agreement or\n     other document extending, or having the effect of\n     extending, the period of assessment or collection of any\n     taxes and no power of attorney with respect to taxes has\n     been executed or filed with any taxing authority.\n\n          (iii) There are no material liens for taxes (other\n     than for current taxes not yet due and payable) on the\n     assets of Target. Target is not bound by any agreement\n     with respect to taxes.\n\n          (iv) Target has not been and is not a United States\n     real property holding corporation within the meaning of\n     Section 897(c)(2) of the Code during the applicable\n     period specified in Section 897(c)(1)(A)(ii).\n\n          (v) Section 3.01(l)(v) of the Target Disclosure\n     Schedule sets forth each state in which Target has filed\n     a tax return relating to state income, franchise,\n     license, excise, net worth, property and sales and use\n     taxes, except in a case where Target is or has been\n     required to file such a tax return and such failures to\n     file could not individually or in the aggregate\n     reasonably be expected to have a material adverse effect\n     on Target. To the knowledge of Target, it is not\n     required to file any tax return or report in any other\n     state and no claim has ever been made by a taxing\n     authority in a jurisdiction where Target does not file a\n     tax return that it is, or may be subject to, taxation in\n     that jurisdiction.\n\n\n\n\n\n                                                           21\n\n\n          (vi) Target has not taken any action or knows of\n     any fact, agreement, plan or other circumstance that is\n     reasonably likely to prevent the Merger from qualifying\n     as a reorganization within the meaning of Section 368(a)\n     of the Code.\n\n          (vii) Target has not paid and has not entered into\n     any binding agreement to pay any amount, nor will any\n     bonuses paid by Target with respect to which a deduction\n     is claimed for the 1999 fiscal year constitute amounts,\n     to which Section 162(m) of the Code will apply so as to\n     result in the disallowance of any material deduction.\n\n          (viii) Target has not constituted either a\n     \"distributing corporation\" or a \"controlled corporation\"\n     in a distribution of stock qualifying for tax-free\n     treatment under Section 355 of the Code (x) in the two\n     years prior to the date of this Agreement or (y) in a\n     distribution which could otherwise constitute part of a\n     \"plan\" or \"series of related transactions\" (within the\n     meaning of Section 355(e) of the Code) in conjunction\n     with the Merger.\n\n          (ix) As used in this Agreement, \"taxes\" shall\n     include all (x) Federal, state, local or foreign income,\n     property, sales, excise and other taxes or similar\n     governmental charges, including any interest, penalties\n     or additions with respect thereto, and (y) liability for\n     the payment of any amounts as a result of being party to\n     any tax sharing agreement or as a result of any express\n     or implied obligation to indemnify any other person with\n     respect to the payment of any amounts of the type\n     described in clause (x).\n\n          (m) Voting Requirements. The affirmative vote of\n     the holders of a majority of the voting power of all\n     outstanding shares of Target Common Stock to adopt this\n     Agreement (the \"Target Stockholder Approval\") is the\n     only vote of the holders of any class or series of\n     Target's capital stock necessary to approve and adopt\n     this Agreement and the transactions contemplated hereby.\n\n          (n) State Takeover Statutes. The Board of Directors\n     of Target has unanimously approved the terms of this\n     Agreement and the Target Stockholder Agreement and the\n     consummation of the Merger and the other trans actions\n     contemplated by this Agreement and the Target\n     Stockholder Agreement and such approval constitutes\n     approval of this Agreement and the Target Stockholder\n     Agreement and the Merger and the other transactions\n     contemplated by this Agreement and the Target Stock\n     holder Agreement by the Board of Directors of Target\n     under the provisions of Section 203 of the DGCL and\n     represents all the action necessary to ensure that the\n     restrictions contained in such Section 203 do not apply\n     to Parent or Sub in connection with the Merger and the\n     other transactions contemplated by this Agreement and\n     the Target Stockholder Agreement. To the knowledge of\n     Target, no other state takeover statute is applicable to\n     the Merger or the other transactions contemplated hereby\n     and by the Target Stockholder Agreement.\n\n          (o) Brokers. No broker, investment banker,\n     financial advisor or other person, other than Thomas\n     Weisel Partners LLC, the fees and expenses of which will\n     be paid by Target, is entitled to any broker's,\n     finder's, financial advisor's or other similar fee or\n     commission in connection with the transactions\n     contemplated by this Agreement based upon arrangements\n     made by or on behalf of Target. Target has furnished to\n     Parent true and complete copies of all agreements under\n     which any such fees or expenses are payable and all\n     indemnification and other agreements related to the\n     engagement of the persons to whom such fees are payable.\n\n          (p) Opinion of Financial Advisor. Target has\n     received the written opinion of Thomas Weisel Partners\n     LLC, dated the date of this Agreement, to the effect\n     that, as of such date, the Exchange Ratio is fair from a\n     financial point of view to the stockholders of Target, a\n     signed copy of which opinion has been or promptly will\n     be delivered to Parent.\n\n          (q) Intellectual Property; Year 2000. (i) As used\n     herein, \"Intellectual Property Rights\" shall mean all\n     trademarks, service marks, trade names, brands,\n     copyrights and patents, all applications for registra\n     tion and registrations for such trademarks, copyrights\n     and patents and all mask works, trade secrets,\n     confidential and proprietary information, compositions\n     of matter, formulas, designs, proprietary rights, know-\n     how and processes; and \"Target Intellectual Property\n     Rights\" shall mean all Intellectual Property Rights\n     owned by or licensed to or used by Target. A list and\n     brief description of all Target Intellectual Property\n     Rights that are material to the conduct of the business\n     of Target, and all licenses, contracts, rights and\n     arrangements with respect to the foregoing, are set\n     forth in Section 3.01(q) of the Target Disclosure\n     Schedule. To Target's knowledge, all the Target\n     Intellectual Property Rights which are material to the\n     conduct of its business are valid, enforceable and in\n     full force and effect. Target owns, free and clear of\n\n\n\n\n\n                                                           22\n\n\n     all Liens, or is validly licensed or otherwise has the\n     right to use all the Target Intellectual Property Rights\n     which are material to the conduct of its business.\n\n          (ii) To Target's knowledge, Target has not\n     interfered with, infringed upon, misappropriated or\n     otherwise come into conflict with any Intellectual\n     Property Rights or other proprietary information of any\n     other person. Target has not received any written\n     charge, complaint, claim, demand or notice alleging any\n     such interference, infringement, misappropriation or\n     other conflict (including any claim that Target or any\n     such subsidiary must license or refrain from using any\n     Intellectual Property Rights or other proprietary\n     information of any other person) which has not been\n     settled or otherwise fully resolved, except for such\n     charges, complaints, claims, demands or notices that,\n     individually and in the aggregate, are not reasonably\n     likely to have a material adverse effect on Target. To\n     Target's knowledge, no other person has materially\n     interfered with, infringed upon, misappropriated or\n     otherwise come into conflict with any Target\n     Intellectual Property Rights.\n\n          (iii) As the business of Target is presently\n     conducted, Parent's use after the Closing of the Target\n     Intellectual Property Rights which are material to the\n     conduct of the business of Target will not interfere\n     with, infringe upon, misappropriate or otherwise come\n     into conflict with the Intellectual Property Rights or\n     other proprietary information of any other person,\n     except for such interferences, infringements,\n     misappropriations or other conflicts that, individually\n     and in the aggregate, are not reasonably likely to have\n     a material adverse effect on Target.\n\n          (iv) Target has taken, and until the Closing Date,\n     Target will take all steps reasonably necessary to\n     preserve Target's legal rights in all the Target\n     Intellectual Property Rights, except for such steps the\n     failure of which to be taken, individually and in the\n     aggregate, are not reasonably likely to have a material\n     adverse effect on Target. In addition, each employee,\n     agent, consultant or contractor who has materially\n     contributed to or participated in the creation or\n     development of any copyrightable, patentable or trade\n     secret material on behalf of Target or any predecessor-\n     in-interest thereto either (x) is a party to a \"work-\n     for-hire\" relationship under which Target is deemed to\n     be the original owner\/author of all property rights\n     therein or (y) has executed an assignment or an\n     agreement to assign in favor of Target or such\n\n\n\n\n\n                                                           23\n\n\n     predecessor-in-interest, as applicable, all right, title\n     and interest in such material.\n\n          (v) Target has reviewed and assessed all areas\n     within its business and operations that could be\n     adversely affected by the \"Target Year 2000 Problem\"\n     (that is, the risk that computer applications used by\n     Target or used by any of the suppliers and vendors of\n     Target and that interface with a computer application\n     used by Target may be unable to recognize and perform\n     properly date-sensitive functions involving certain\n     dates prior to and any date after December 31, 1999).\n     Based on the foregoing, Target represents that all\n     computer applications used by Target and all computer\n     applications used by the suppliers and vendors of Target\n     that interface with any computer application used by\n     Target that are material to its business or operations\n     are Year 2000 Compliant, except for such failures to be\n     Year 2000 Compliant that, individually and in the\n     aggregate, are not reasonably likely to have a material\n     adverse effect on Target. The term \"Year 2000\n     Compliant\", with respect to a computer system or\n     software program, means that such computer system or\n     program: (a) is capable of correctly recognizing,\n     processing, managing, representing, interpreting and\n     manipulating accurate and correctly formatted date-\n     related data for dates earlier and later than January 1,\n     2000; (b) does not lack the ability to function\n     automatically into and beyond the year 2000 without\n     human intervention and without any change in operations\n     as a result of the advent of the year 2000; (c) has the\n     ability to interpret accurate and correctly formatted\n     date data correctly into and beyond the year 2000; (d)\n     does not lack the ability not to produce noncompliance\n     in existing data, nor otherwise corrupt such data, into\n     and beyond the year 2000 as a result of the advent of\n     the year 2000; (e) has the ability to process correctly\n     after January 1, 2000, accurate and correctly formatted\n     date data containing dates and times before that date;\n     and (f) has the ability to recognize all \"leap year\"\n     dates, including February 29, 2000.\n\n          (r) Contracts. Except for Contracts filed as\n     exhibits to the Target Filed SEC Documents, Target is\n     not a party to or bound by, and none of its properties\n     or assets are bound by or subject to, any written or\n     oral:\n\n               (i) Contract not made in the ordinary course\n          of business entered into prior to the date of this\n          Agreement;\n\n\n\n\n\n                                                           24\n\n\n               (ii) Contract pursuant to which Target has\n          agreed not to compete with any person or to engage\n          in any activity or business, or pursuant to which\n          any benefit is required to be given or lost as a\n          result of so competing or engaging;\n\n               (iii) Contract pursuant to which Target is\n          restricted in any material respect in the\n          development, marketing or distribution of its\n          products or services;\n\n               (iv) Contract with (A) any affiliate of Target\n          or (B) any current or former director or officer of\n          Target or of any affiliate of Target or any of the\n          25 most highly compensated employees of Target or\n          (C) any affiliate of any such person (other than\n          (w) contracts on arm's-length terms with companies\n          whose common stock is publicly traded, (x) offer\n          letters providing solely for \"at will\" employment,\n          (y) invention assignment and confidentiality\n          agreements relating to the assignment of inventions\n          to Target not involving the payment of money and\n          (z) Target Benefit Plans referred to in Section\n          3.01(j));\n\n               (v) license or franchise granted by Target\n          pursuant to which Target has agreed to refrain from\n          granting license or franchise rights to any other\n          person;\n\n               (vi) Contract under which Target has (i)\n          incurred any indebtedness that is currently owing\n          or (ii) given any guarantee in respect of\n          indebtedness, in each case having an aggregate\n          principal amount in excess of $250,000;\n\n               (vii) Contract that requires consent, approval\n          or waiver of or notice to a third party in the\n          event of or with respect to the Merger, including\n          in order to avoid termination of or a loss of\n          material benefit under any such Contract, except\n          for such Contracts the termination or loss of\n          material benefit under which, individually and in\n          the aggregate, are not reasonably likely to have a\n          material adverse effect on Target;\n\n               (viii) Contract or other agreement, whether\n          written or oral, that contains any guarantees as to\n          Target's future revenues;\n\n               (ix) Contract providing for payments of\n          royalties to third parties;\n\n\n\n\n\n                                                           25\n\n\n               (x) Contract granting a third party any\n          license to Intellectual Property Rights that is not\n          limited to the internal use of such third party;\n\n               (xi) Contract providing confidential treatment\n          by Target of third party information other than\n          non-disclosure agreements and provisions entered\n          into by Target in the ordinary course of business\n          consistent with past practice;\n\n               (xii) Contract granting the other party to\n          such Contract or a third party \"most favored\n          nation\" status that, following the Merger, would in\n          any way apply to Parent or any of its subsidiaries\n          (other than Target and its products or services\n          (other than any similar products or services\n          produced or offered by Parent or any of its\n          subsidiaries (other than Target))); and\n\n               (xiii) Contract which (i) has aggregate future\n          sums due from Target in excess of $250,000 and is\n          not terminable by Target for a cost of less than\n          $250,000 or (ii) is otherwise material to the\n          business of Target as presently conducted or as\n          proposed to be conducted.\n\n     Each Contract of Target is in full force and effect and\n     is a legal, valid and binding agreement of Target and,\n     to the knowledge of Target, of each other party thereto,\n     enforceable against Target and, to the knowledge of\n     Target, against the other party or parties thereto, in\n     each case, in accordance with its terms, except for such\n     failures to be in full force and effect or enforceable\n     that, individually and in the aggregate, are not\n     reasonably likely to have a material adverse effect on\n     Target. Target has performed or is performing all\n     material obligations required to be performed by it\n     under its Contracts and is not (with or without notice\n     or lapse of time or both) in breach or default in any\n     material respect thereunder, and, to the knowledge of\n     Target, no other party to any of its Contracts is (with\n     or without notice or lapse of time or both) in breach or\n     default in any material respect thereunder except, in\n     each case, for such breaches that, individually and in\n     the aggregate, are not reasonably likely to have a\n     material adverse effect on Target.\n\n          (s) Title to Properties. (i) Section 3.01(s) of the\n     Target Disclosure Schedule sets forth a true and\n     complete list, as of the date of this Agreement, of all\n     real property and leasehold property owned or leased by\n\n\n\n\n\n                                                           26\n\n\n     Target or any of its subsidiaries. Target has good and\n     valid title to, or valid leasehold interests in or valid\n     rights to, all its material properties and assets except\n     for such as are no longer used or useful in the conduct\n     of its businesses or as have been disposed of in the\n     ordinary course of business and except for defects in\n     title, easements, restrictive covenants and similar\n     encumbrances that, individually and in the aggregate, do\n     not materially interfere with its ability to conduct its\n     business as currently conducted. All such material\n     assets and properties, other than assets and properties\n     in which Target has a leasehold interest, are free and\n     clear of all Liens except for Liens that, individually\n     and in the aggregate, do not materially interfere with\n     the ability of Target to conduct its business as\n     currently conducted.\n\n          (ii) Target has complied in all material respects\n     with the terms of all leases to which it is a party and\n     under which it is in occupancy, and all such leases are\n     in full force and effect. Target enjoys peaceful and\n     undisturbed possession under all such leases, except for\n     failures to do so that, individually and in the\n     aggregate, are not reasonably likely to have a material\n     adverse effect on Target.\n\n          (t) Privacy Policy. (i) For purposes of this\n     Section 3.01(t):\n\n               (A) \"Privacy Statement\" means the written\n          privacy policy of Target to be established by\n          Target on or before the Policy Launch Date\n          regarding the collection, use and distribution of\n          personal information from visitors to its web site\n          as in effect from time to time;\n\n               (B) \"Policy Launch Date\" means the date on\n          which Target makes the Privacy Statement accessible\n          to visitors of its website, provided that such date\n          shall occur no later than March 15, 2000; and\n\n               (C) \"Terms and Conditions\" means Target's\n          written agreements with its customers that\n          establish the terms and conditions of Target's\n          services as in effect from time to time.\n\n          (ii) On and after the Policy Launch Date, the\n     Privacy Statement will be conspicuously linked at all\n     times on Target's homepage and from any page on Target's\n     website on which personal information is collected from\n     visitors to its web site. The Privacy Statement will\n     include at the minimum the\n\n\n\n\n\n                                                           27\n\n\n     following: (A) notice to visitors about Target's web\n     site's information collection policies and practices\n     prior to disclosing their personal information; (B)\n     options for the visitors regarding how their personal\n     information will be used, including any uses beyond\n     those for which the information was provided and the\n     option to choose whether or not to allow their personal\n     information to be disclosed and used for such purposes\n     and by third parties, but excluding the use and\n     disclosure of personal information to the extent that\n     Target believes in good faith (based on the advise of\n     outside counsel) that applicable law requires such use\n     or disclosure or for administrative purposes to the\n     extent that Target determines in good faith that such\n     use or disclosure is reasonably necessary to maintain or\n     service its site or its services; (C) a mechanism by\n     which visitors may view and correct their personal data\n     if it is inaccurate or incomplete; (D) representation\n     that Target uses industry standard security measures to\n     protect all data collected by Target from visitors; and\n     (E) a notice that visitors under the age of eighteen\n     should not disclose personal information without the\n     consent of a parent or guardian.\n\n          (iii) Except as set forth in the Terms and\n     Conditions, Target does not sell, rent or otherwise make\n     available to third parties any personal data submitted\n     by visitors and consumers; provided, however, that\n     Target does make use of non-personally identifiable\n     statistical information including, but not limited to,\n     browser-type, geographical location, age and gender,\n     solely for its own statistical analysis.\n\n          (iv) Target and its employees have (A) complied\n     with all privacy policies issued by Target, all\n     applicable privacy laws and all applicable Terms and\n     Conditions regarding the disclosure and use of data, (B)\n     not violated the Privacy Statement and (C) taken all\n     steps to protect and maintain the confidential nature of\n     the personal information provided to Target by visitors\n     who do not consent to the disclosure of such information\n     to third parties or have otherwise expressly requested\n     that Target not disclose such information. All personal\n     data collected by Target from time to time is or will be\n     used in accordance with the most current privacy\n     policies of Target or, to the extent applicable, the\n     Terms and Conditions.\n\n          SECTION 3.02. Representations and Warranties of\nParent and Sub. Except as disclosed in the Parent Filed SEC\nDocuments or as set forth on the Disclosure Schedule\ndelivered by Parent to Target prior to the execution of this\nAgreement (the \"Parent Disclosure Schedule\") (each section\n\n\n\n\n\n                                                           28\n\n\nof which qualifies the correspondingly numbered\nrepresentation and warranty or covenant to the extent\nspecified therein and such other representations and\nwarranties or covenants to the extent a matter in such\nsection is disclosed in such a way as to make its relevance\nto the information called for by such other representation\nand warranty or covenant reasonably apparent), Parent and Sub\nrepresent and warrant to Target as follows:\n\n          (a) Organization, Standing and Corporate Power.\n     Each of Parent and Sub is a corporation duly organized,\n     validly existing and in good standing under the laws of\n     the jurisdiction in which it is incorporated and has the\n     requisite corporate power and authority to carry on its\n     business as now being conducted. Each of Parent and Sub\n     is duly qualified or licensed to do business and is in\n     good standing (with respect to jurisdictions which\n     recognize such concept) in each jurisdiction in which\n     the nature of its business or the ownership, leasing or\n     operation of its assets makes such quali fication or\n     licensing necessary, except for those jurisdictions\n     where the failure to be so qualified or licensed or to\n     be in good standing, individually and in the aggregate,\n     is not reasonably likely to have a material adverse\n     effect on Parent. All outstanding shares of capital\n     stock of Parent are duly authorized, validly issued,\n     fully paid and nonassessable. Parent has made available\n     to Target prior to the execution of this Agreement\n     complete and correct copies of its certificate of\n     incorporation and by-laws and the certificate of\n     incorporation and by-laws of Sub, in each case as\n     amended to the date of this Agreement.\n\n          (b) Subsidiaries. Section 3.02(b) of the Parent\n     Disclosure Schedule sets forth a true and complete list,\n     as of the date of this Agreement, of each of Parent's\n     subsidiaries. All the outstanding shares of capital\n     stock of, or other equity interests in, each subsidiary\n     of Parent have been validly issued, are fully paid and\n     nonassessable and are owned directly or indirectly by\n     Parent, free and clear of all Liens.\n\n          (c) Capital Structure. The authorized capital stock\n     of Parent consists of 70,000,000 shares of Parent Common\n     Stock and 10,000,000 shares of preferred stock, par\n     value $0.01 per share, of Parent (\"Parent Authorized\n     Preferred Stock\"). At the close of business on January\n     31, 2000, (i) 22,615,709 shares of Parent Common Stock\n     were issued and outstanding; (ii) no shares of Parent\n     Authorized Preferred Stock were issued and outstanding;\n     (iii) 4,218,874 shares of Parent Common Stock were\n     reserved for issuance pursuant to Parent's 1998 Stock\n     Incentive Plan; and (iv) 3,411,832\n\n\n\n\n\n                                                           29\n\n\n     shares of Parent Common Stock were reserved for issuance\n     upon exercise of outstanding warrants. As of the date of\n     this Agreement, no bonds, debentures, notes or other\n     indebtedness of Parent having the right to vote (or\n     convertible into, or exchangeable for, securities having\n     the right to vote) on any matters on which stockholders\n     of Parent may vote are issued or outstanding or subject\n     to issuance. The authorized capital stock of Sub\n     consists of 1,000 shares of common stock, par value\n     $0.01 per share, all of which are issued and outstanding\n     and wholly owned by Parent. All outstanding shares of\n     capital stock of Parent and Sub are, and all shares\n     which may be issued will be, when issued, duly\n     authorized, validly issued, fully paid and nonassessable\n     and not subject to preemptive rights.\n\n          (d) Authority; Noncontravention. Each of Parent and\n     Sub has all requisite corporate power and authority to\n     enter into this Agreement and, subject to the Parent\n     Stockholder Approval, to consummate the transactions\n     contemplated by this Agreement. The execution and\n     delivery of this Agreement by Parent and Sub and the\n     consummation by Parent and Sub of the transactions\n     contemplated by this Agreement have been duly authorized\n     by all necessary corporate action on the part of Parent\n     and Sub, subject, in the case of the issuance of shares\n     of Parent Common Stock in connection with the Merger, to\n     the Parent Stockholder Approval. This Agreement has been\n     duly executed and delivered by Parent and Sub and,\n     assuming the due authorization, execution and delivery\n     by each of the other parties thereto, constitutes a\n     legal, valid and binding obligation of Parent and Sub,\n     enforceable against each of them in accordance with its\n     terms. The execution and delivery of this Agreement do\n     not, and the consummation of the transactions\n     contemplated by this Agreement and compliance with the\n     provisions of this Agreement will not, conflict with, or\n     result in any violation of, or default (with or without\n     notice or lapse of time, or both) under, or give rise to\n     a right of termination, cancelation or acceleration of\n     any obligation or loss of a benefit under, or result in\n     the creation of any Lien upon any of the properties or\n     assets of Parent or Sub under, (i) the certificate of\n     incorporation or by-laws of Parent or Sub, (ii) any\n     Contract applicable to Parent or Sub or their respective\n     properties or assets or (iii) subject to the\n     governmental filings and other matters referred to in\n     the following sentence, (A) any judgment, order or\n     decree or (B) any statute, law, ordinance, rule or\n     regulation, in each case applicable to Parent or any of\n     its subsidiaries or their respective properties or\n     assets, other than, in the case of clauses (ii) and\n\n\n\n\n\n                                                           30\n\n\n     (iii), any such conflicts, violations, defaults, rights,\n     losses or Liens that, individually and in the aggregate,\n     are not reasonably likely to (x) have a material adverse\n     effect on Parent, (y) impair the ability of Parent or\n     Sub to perform its obligations under this Agreement or\n     (z) prevent or materially delay the consummation of the\n     transactions contemplated by this Agreement. No consent,\n     approval, order or authorization of, action by or in\n     respect of, or registration, declaration or filing with,\n     any Governmental Entity is required by or with respect\n     to Parent or Sub in connection with the execution and\n     delivery of this Agreement by Parent and Sub or the\n     consummation by Parent and Sub of the transactions\n     contemplated by this Agreement, except for (1) the\n     filing of a premerger notification and report form by\n     Parent under the HSR Act and any applicable filings and\n     approvals under similar foreign antitrust or competition\n     laws and regulations; (2) the filing with the SEC of (A)\n     the Form S-4 and (B) such reports under Section 13(a),\n     13(d), 15(d) or 16(a) of the Exchange Act as may be\n     required in connection with this Agreement, the Target\n     Stockholder Agreement, the Parent Stockholder Agreement\n     and the transactions contemplated by this Agreement, the\n     Target Stockholder Agreement and the Parent Stockholder\n     Agreement; (3) the filing of the Certificate of Merger\n     with the Delaware Secretary of State and appropriate\n     documents with the relevant authorities of other states\n     in which Parent is qualified to do business and such\n     filings with Govern mental Entities to satisfy the\n     applicable requirements of state securities or \"blue\n     sky\" laws; (4) such filings with and approvals of The\n     Nasdaq National Market (\"Nasdaq\") to permit the shares\n     of Parent Common Stock that are to be issued in the\n     Merger to be quoted on Nasdaq; and (5) such other\n     consents, approvals, orders, authorizations,\n     registrations, declarations and filings the failure of\n     which to be made or obtained, individually and in the\n     aggregate, are not reasonably likely to (x) have a\n     material adverse effect on Parent, (y) impair the\n     ability of Parent or Sub to perform its obligations\n     under this Agreement or (z) prevent or materially delay\n     the consummation of the transactions contemplated by\n     this Agreement.\n\n          (e) SEC Documents; Undisclosed Liabilities. Parent\n     has filed all required reports, schedules, forms,\n     statements and other documents (including exhibits and\n     all other information incorporated therein) with the SEC\n     since December 31, 1997 (collectively, the \"Parent SEC\n     Documents\"). As of their respective dates, the Parent\n     SEC Documents complied in all material respects with the\n     requirements\n\n\n\n\n\n                                                           31\n\n\n     of the Securities Act or the Exchange Act, as the case\n     may be, and the rules and regulations of the SEC\n     promulgated thereunder applicable to such Parent SEC\n     Documents, and none of the Parent SEC Documents when\n     filed contained any untrue statement of a material fact\n     or omitted to state a material fact required to be\n     stated therein or necessary in order to make the\n     statements therein, in light of the circumstances under\n     which they were made, not misleading. The financial\n     statements of Parent included in the Parent SEC\n     Documents comply as to form, as of their respective\n     dates of filing with the SEC, in all material respects\n     with the Accounting Rules, have been prepared in\n     accordance with GAAP (except, in the case of unaudited\n     statements, as permitted by Form 10-Q of the SEC)\n     applied on a consistent basis during the periods\n     involved (except as may be indicated in the notes\n     thereto) and fairly present in all material respects the\n     consolidated financial position of Parent and its\n     consolidated subsidiaries as of the dates thereof and\n     the consolidated results of their operations and cash\n     flows for the periods then ended (subject, in the case\n     of unaudited statements, to normal recurring year-end\n     audit adjustments). Except (i) as reflected in the\n     financial statements contained in the Parent Filed SEC\n     Documents or in the notes thereto or (ii) for liabili\n     ties incurred in connection with this Agreement or the\n     transactions contemplated hereby, neither Parent nor any\n     of its subsidiaries has any liabilities or obligations\n     of any nature (whether accrued, absolute, contingent or\n     otherwise) which, individually or in the aggregate, when\n     taken as a whole with any benefits or rights\n     corresponding to such liabilities or obligations, are\n     reasonably likely to have a material adverse effect on\n     Parent.\n\n          (f) Information Supplied. None of the informa tion\n     supplied or to be supplied by Parent specifically for\n     inclusion or incorporation by reference in (i) the Form\n     S-4 will, at the time the Form S-4 becomes effective\n     under the Securities Act, contain any untrue statement\n     of a material fact or omit to state any material fact\n     required to be stated therein or necessary to make the\n     statements therein not misleading or (ii) the Proxy\n     Statement will, at the date it is first mailed to\n     Target's or Parent's stockholders or at the time of the\n     Target Stockholders Meeting or the Parent Stockholders\n     Meeting, contain any untrue statement of a material fact\n     or omit to state any material fact required to be stated\n     therein or neces sary in order to make the statements\n     therein, in light of the circumstances under which they\n     are made, not misleading. The Form S-4 will comply as to\n     form in all\n\n\n\n\n\n                                                           32\n\n\n     material respects with the requirements of the Exchange\n     Act and the rules and regulations thereunder. No\n     representation or warranty is made by Parent with\n     respect to statements made or incorporated by reference\n     therein based on information supplied by Target\n     specifically for inclusion or incorporation by reference\n     in the Form S-4.\n\n          (g) Absence of Certain Changes or Events. Except\n     for liabilities incurred in connection with this\n     Agreement, the Target Stockholder Agreement, the\n     Employment Agreements or the transactions contemplated\n     hereby or thereby and except as disclosed in the Parent\n     SEC Documents filed and publicly available prior to the\n     date of this Agreement (as amended to the date of this\n     Agreement, the \"Parent Filed SEC Documents\"), from\n     December 31, 1998 to the date of this Agreement, Parent\n     and its subsidiaries have conducted their business only\n     in the ordinary course, and during such period there has\n     not been (1) any material adverse change in Parent, (2)\n     any declaration, setting aside or payment of any\n     dividend or other distribution (whether in cash, stock\n     or property) with respect to any of Parent's capital\n     stock, (3) any split, combination or reclassification of\n     any of Parent's capital stock or any issuance or the\n     authorization of any issuance of any other securities in\n     respect of, in lieu of or in substitution for shares of\n     Parent's capital stock, (4) (A) any granting by Parent\n     or any of its subsidiaries to any current or former\n     director, consultant, executive officer or other\n     employee of Parent or its subsidiaries of any increase\n     in compensation, bonus or other benefits, except for\n     normal increases in cash compensation in the ordinary\n     course of business consistent with past practice or as\n     was required under any employment agreements in effect\n     as of the date of the most recent audited financial\n     statements included in the Parent Filed SEC Documents,\n     (B) any granting by Parent or any of its subsidiaries to\n     any such current or former director, consultant,\n     executive officer or employee of any increase in\n     severance or termination pay, (C) any entry by Parent or\n     any of its subsidiaries into, or any amendments of, any\n     Parent Benefit Agreement or (D) any amendment to, or\n     modification of, any Parent Stock Option, (5) except\n     insofar as may have been required by a change in GAAP,\n     any change in accounting methods, principles or\n     practices by Parent or any of its subsidiaries\n     materially affecting their respective assets,\n     liabilities or businesses, (6) any tax election that\n     individually or in the aggregate is reasonably likely to\n     adversely affect in any material respect the tax\n     liability or tax attributes of Parent or any of its\n     subsidiaries or (7) any settlement or compromise of any\n\n\n\n\n\n                                                           33\n\n\n     material income tax liability. Except for liabilities\n     incurred in connection with this Agreement, the Target\n     Stockholder Agreement, the Employment Agreements or the\n     transactions contemplated hereby or thereby and except\n     as disclosed in the Parent Filed SEC Documents, since\n     December 31, 1998, there has not been any material\n     adverse change in Parent.\n\n          (h) Litigation. There is no suit, action or\n     proceeding pending or, to the knowledge of Parent or any\n     of its subsidiaries, threatened against or affecting\n     Parent or any of its subsidiaries that, individually or\n     in the aggregate, is reasonably likely to have a\n     material adverse effect on Parent nor is there any\n     judgment, decree, injunction, rule or order of any\n     Governmental Entity or arbitrator outstanding against\n     Parent or any of its subsidiaries having, or which is\n     reasonably likely to have, individually or in the\n     aggregate, a material adverse effect on Parent. Section\n     3.02(h) of the Parent Disclosure Schedule sets forth a\n     true and complete list, as of the date of this\n     Agreement, of each settlement or similar agreement in\n     respect of any pending or threatened suit, action,\n     proceeding, judgment, decree, injunction, rule or order\n     of any Governmental Entity or arbitrator which Parent or\n     any of its subsidiaries has entered into or become bound\n     by since June 30, 1999.\n\n          (i) Compliance with Applicable Laws. (i) Parent and\n     its subsidiaries hold all material permits, licenses,\n     variances, exemptions, orders, registrations and\n     approvals of all Governmental Entities (the \"Parent\n     Permits\") that are required for them to own, lease or\n     operate their assets and to carry on their businesses.\n     Parent and its subsidiaries are in compliance with the\n     terms of the Parent Permits and all applicable statutes,\n     laws (including Environmental Laws), ordinances, rules\n     and regulations, except for such failures to comply\n     that, individually and in the aggregate, are not\n     reasonably likely to have a material adverse effect on\n     Parent. No action, demand, requirement or investigation\n     by any Governmental Entity and no suit, action or\n     proceeding by any person, in each case with respect to\n     Parent or any of its subsidiaries or any of their\n     respective properties that, individually or in the\n     aggregate, is reasonably likely to have a material\n     adverse effect on Parent, is pending or, to the\n     knowledge of Parent, threatened.\n\n          (ii) To Parent's knowledge, there have been no\n     Releases of any Hazardous Materials at, on or under any\n     facility or property currently or formerly owned,\n     leased, or operated by Parent or any of its subsidi\n     aries that, individually or in the aggregate, are\n     reasonably likely to have a material adverse effect on\n     Parent. Neither Parent nor any of its subsidiaries is\n     the subject of any pending or, to Parent's knowledge,\n     threatened investigation or proceeding under Environ\n     mental Law relating in any manner to the off-site\n     treatment, storage or disposal of any Hazardous\n     Materials generated at any facility or property\n     currently or formerly owned, leased or operated by\n     Parent or any of its subsidiaries.\n\n          (j) ERISA Compliance. (i) Section 3.02(j) of the\n     Parent Disclosure Schedule contains a list of all\n     \"employee pension benefit plans\" (as defined in Section\n     3(2) of ERISA) (sometimes referred to herein as \"Parent\n     Pension Plans\"), \"employee welfare benefit plans\" (as\n     defined in Section 3(1) of ERISA), all other collective\n     bargaining agreements or any bonus, pension, profit\n     sharing, deferred compensation, incentive compensation,\n     stock ownership, stock purchase, stock option, phantom\n     stock, retirement, thrift, savings, stock bonus,\n     restricted stock, cafeteria, paid time off, perquisite,\n     fringe benefit, vacation, severance, disability, death\n     benefit, hospitalization, medical, welfare benefit or\n     other plan, arrangement or under standing (whether or\n     not legally binding) providing benefits to any current\n     or former employee, officer, consultant or director of\n     Parent (collectively, the \"Parent Benefit Plans\"), and\n     employment, consulting, deferred compensation,\n     indemnification, severance or termination agreements or\n     arrangements between Parent and any current or former\n     employee, officer, consultant or director of Parent\n     (collectively, the \"Parent Benefit Agreements\")\n     maintained, or contributed to, by Parent or any of its\n     subsidiaries, or to which Parent or any of its\n     subsidiaries is a party, for the benefit of any current\n     or former employees, officers or directors of Parent or\n     any of its subsidiaries. Parent has made available to\n     Target or will make available to Target upon request\n     true, complete and correct copies of (a) each Parent\n     Benefit Plan and Parent Benefit Agreement (or, in the\n     case of any unwritten Parent Benefit Plan or Parent\n     Benefit Agreement, a description thereof), (b) the most\n     recent annual report on Form 5500 filed with the\n     Internal Revenue Service with respect to each Parent\n     Benefit Plan (if any such report was required), (c) the\n     most recent summary plan description for each Parent\n     Benefit Plan for which such summary plan description is\n     required and (d) each trust agreement and group annuity\n     contract relating to any Parent Benefit Plan.\n\n\n\n\n\n                                                           34\n\n\n          (ii) Each Parent Benefit Plan has been administered\n     in all material respects in accordance with its terms.\n     Parent, its subsidiaries and each Parent Benefit Plan\n     are in substantial compliance with the applicable\n     provisions of ERISA and the Code, and all other\n     applicable laws and the terms of all collective\n     bargaining agreements. All Parent Pension Plans intended\n     to be qualified have received favorable determination\n     letters from the Internal Revenue Service with respect\n     to \"TRA\" (as defined in Section 1 of Rev. Proc. 93-39),\n     to the effect that such Parent Pension Plans are\n     qualified and exempt from Federal income taxes under\n     Sections 401(a) and 501(a), respectively, of the Code,\n     and no such determination letter has been revoked nor,\n     to the knowledge of Parent, has revocation been\n     threatened, nor has any such Parent Pension Plan been\n     amended since the date of its most recent determination\n     letter or application therefor in any respect that would\n     adversely affect its qualification or materially\n     increase its costs. There is no pending or, to the\n     knowledge of Parent, threatened litigation relating to\n     Parent Benefit Plans.\n\n          (iii) None of Parent or any person which is\n     considered an ERISA Affiliate of Parent has or could\n     reasonably be expected to have any liability under Title\n     IV of ERISA with respect to any Parent Benefit Plan.\n     None of Parent, any of its subsidiaries, any officer of\n     Parent or any of its subsidiaries or any of the Parent\n     Benefit Plans which are subject to ERISA, including the\n     Parent Pension Plans, any trusts created thereunder or,\n     to the knowledge of Parent, any trustee or administrator\n     thereof, has engaged in a \"prohibited transaction\" (as\n     such term is defined in Section 406 of ERISA or Section\n     4975 of the Code) or any other breach of fiduciary\n     responsibility that could subject Parent, any of its\n     subsidiaries or any officer of Parent or any of its\n     subsidiaries to the tax or penalty on prohibited\n     transactions imposed by such Section 4975 in an amount\n     that would be material or to any material liability\n     under Section 502(i) or 502(l) of ERISA. All\n     contributions and premiums required to be made under the\n     terms of any Parent Benefit Plan as of the date hereof\n     have been timely made or have been reflected on the most\n     recent consolidated balance sheet filed or incorporated\n     by reference in the Filed Parent SEC Documents. Neither\n     any Parent Pension Plan nor any single-employer plan of\n     an ERISA Affiliate of Parent has an \"accumulated funding\n     deficiency\" (as such term is defined in Section 302 of\n     ERISA or Section 412 of the Code), whether or not\n     waived.\n\n\n\n\n\n                                                           35\n\n\n          (iv) With respect to any Parent Benefit Plan that\n     is an employee welfare benefit plan, (a) no such Parent\n     Benefit Plan is unfunded or funded through a \"welfare\n     benefit fund\" (as such term is defined in Section 419(e)\n     of the Code) and (b) each such Parent Benefit Plan that\n     is a \"group health plan\" (as such term is defined in\n     Section 5000(b)(1) of the Code) complies with the\n     applicable requirements of Section 4980B(f) of the Code.\n     Neither Parent nor any of its subsidiaries has any\n     obligations for retiree health and life benefits under\n     any Parent Benefit Plan or Parent Benefit Agreement.\n\n          (v) Parent and its subsidiaries are in compliance\n     with all Federal, state and local requirements regarding\n     employment, except for such failures to comply that,\n     individually and in the aggregate, are not reasonably\n     likely to have a material adverse effect on Parent. As\n     of the date of this Agreement, neither Parent nor any of\n     its subsidiaries is a party to any collective bargaining\n     or other labor union contract applicable to persons\n     employed by Parent or any of its subsidiaries and no\n     collective bargaining agreement is being negotiated by\n     Parent or any of its subsidiaries. As of the date of\n     this Agreement, there is no labor dispute, strike or\n     work stoppage against Parent or any of its subsidiaries\n     pending or, to the knowledge of Parent, threatened which\n     may interfere with the respective business activities of\n     Parent or its subsidiaries. As of the date of this\n     Agreement, to the knowledge of Parent, none of Parent,\n     any of its subsidiaries or any of their respective\n     representatives or employees has committed an unfair\n     labor practice in connection with the operation of the\n     respective businesses of Parent or any of its\n     subsidiaries, and there is no charge or complaint\n     against Parent or any of its subsidiaries by the\n     National Labor Relations Board or any comparable\n     governmental agency pending or threatened in writing.\n\n          (k) Taxes. (i) Each of Parent and its subsidiaries\n     has filed all tax returns and reports required to be\n     filed by it and all such returns and reports are\n     complete and correct in all material respects, or\n     requests for extensions to file such returns or reports\n     have been timely filed, granted and have not expired,\n     except to the extent that such failures to file, to be\n     complete or correct or to have extensions granted that\n     remain in effect, individually and in the aggregate, are\n     not reasonably likely to have a material adverse effect\n     on Parent. Parent and each of its subsidiaries has paid\n     (or Parent has paid on its behalf) all taxes due with\n     respect to such returns, and\n\n\n\n\n\n                                                           36\n\n\n     the most recent financial statements contained in the\n     Parent Filed SEC Documents reflect an adequate reserve\n     for all taxes payable by Parent and its subsidiaries for\n     all taxable periods and portions thereof accrued through\n     the date of such financial statements.\n\n          (ii) No deficiencies for any taxes have been\n     proposed, asserted or assessed against Parent or any of\n     its subsidiaries that are not adequately reserved for,\n     except for deficiencies that individually or in the\n     aggregate are not reasonably likely to have a material\n     adverse effect on Parent. The Federal income tax returns\n     of Parent and each of its subsidiaries consolidated in\n     such returns for periods ending on or before December\n     31, 1995, have closed by virtue of the applicable\n     statute of limitations and no requests for waivers of\n     the time to assess any such taxes are pending, and, with\n     respect to all subsequent periods, no Federal or state\n     tax return or report or any other material tax return or\n     report of Parent and such subsidiaries is currently\n     under audit and no written or unwritten notice of any\n     such audit or similar examination has been received by\n     Parent. There is no currently effective agreement or\n     other document extending, or having the effect of\n     extending, the period of assessment or collection of any\n     taxes and no power of attorney with respect to taxes has\n     been executed or filed with any taxing authority.\n\n          (iii) There are no material liens for taxes (other\n     than for current taxes not yet due and payable) on the\n     assets of Parent or any of its subsidiaries. Neither\n     Parent nor any of its subsidiaries is bound by any\n     agreement with respect to taxes.\n\n          (iv) Neither Parent nor any of its subsidiaries has\n     been or is a United States real property holding\n     corporation within the meaning of Section 897(c)(2) of\n     the Code during the applicable period specified in\n     Section 897(c)(1)(A)(ii).\n\n          (v) Section 3.02(k)(v) of the Parent Disclosure\n     Schedule sets forth each state in which Parent or any of\n     its subsidiaries has filed a tax return relating to\n     state income, franchise, license, excise, net worth,\n     property and sales and use taxes, except in a case where\n     Parent or any of its subsidiaries is or has been\n     required to file such a tax return and such failures to\n     file could not individually or in the aggregate\n     reasonably be expected to have a material adverse effect\n     on Parent or any of its subsidiaries. To the knowledge\n     of Parent, it is not required to file any tax return or\n     report in any other state and no claim has\n\n\n\n\n\n                                                           37\n\n\n     ever been made by a taxing authority in a jurisdiction\n     where any of Parent and each of its subsidiaries does\n     not file a tax return that it is, or may be subject to,\n     taxation in that jurisdiction.\n\n          (vi) Neither Parent nor any of its subsidiaries has\n     taken any action or knows of any fact, agreement, plan\n     or other circumstance that is reasonably likely to\n     prevent the Merger from qualifying as a reorganization\n     within the meaning of Section 368(a) of the Code.\n\n          (vii) The Parent Benefit Plans and other Parent\n     employee compensation arrangements in effect as of the\n     date of this Agreement have been designed so that the\n     disallowance of a material deduction under Section\n     162(m) of the Code for employee remuneration will not\n     apply to any amounts paid or payable by Parent or any of\n     its subsidiaries under any such plan or arrangement and,\n     to the knowledge of Parent, no fact or circumstance\n     exists that is reasonably likely to cause such\n     disallowance to apply to any such amounts.\n\n          (viii) Neither Parent nor any of its subsidiaries\n     has constituted either a \"distributing corporation\" or a\n     \"controlled corporation\" in a distribution of stock\n     qualifying for tax-free treatment under Section 355 of\n     the Code (x) in the two years prior to the date of this\n     Agreement or (y) in a distribution which could other\n     wise constitute part of a \"plan\" or \"series of related\n     transactions\" (within the meaning of Section 355(e) of\n     the Code) in conjunction with the Merger.\n\n          (l) Voting Requirements. The affirmative vote of a\n     majority of the votes cast at the Parent Stockholders\n     Meeting to approve the issuance of shares of Parent\n     Common Stock in connection with the Merger in accordance\n     with the rules and regulations of Nasdaq (the \"Parent\n     Stockholder Approval\") is the only vote of the holders\n     of any class or series of Parent's capital stock\n     necessary to approve such issuance and the transactions\n     contemplated hereby.\n\n          (m) State Takeover Statutes. The Board of Directors\n     of Parent has unanimously approved the terms of this\n     Agreement and the Parent Stockholder Agreement and the\n     consummation of the transactions contemplated by this\n     Agreement and the Parent Stockholder Agreement and such\n     approval constitutes approval of this Agreement and the\n     Parent Stockholder Agreement and the transactions\n     contemplated by this Agreement and the Parent\n     Stockholder Agreement by the Board of Directors of\n     Parent under the provisions of Section 203 of the DGCL\n     and represents all the action necessary to ensure\n\n\n\n\n\n                                                           38\n\n\n     that the restrictions contained in such Section 203 do\n     not apply to Target in connection with the transactions\n     contemplated this Agreement and the Parent Stockholder\n     Agreement. To the knowledge of Parent, no other state\n     takeover statute is applicable to the transactions\n     contemplated hereby and by the Parent Stockholder\n     Agreement.\n\n     (n) Intellectual Property; Year 2000. (i) As used\n     herein, \"Parent Intellectual Property Rights\" shall mean\n     all Intellectual Property Rights owned by or licensed to\n     or used by Parent as of the date of this Agreement. To\n     the knowledge of Parent, all the Parent Intellectual\n     Property Rights which are material to the conduct of its\n     business are valid, enforceable and in full force and\n     effect. Parent and its subsidiaries own, free and clear\n     of all Liens, or are validly licensed or otherwise have\n     the right to use all the Parent Intellectual Property\n     Rights which are material to the conduct of the business\n     of Parent and its subsidiaries.\n\n     (ii) To the knowledge of Parent, neither Parent nor any\n     of its subsidiaries has materially interfered with,\n     infringed upon, misappropriated or otherwise come into\n     conflict with any Intellectual Property Rights or other\n     proprietary information of any other person. Neither\n     Parent nor any of its subsidiaries has received any\n     written charge, complaint, claim, demand or notice\n     alleging any such interference, infringement, misappro\n     priation or other conflict (including any claim that\n     Parent or any such subsidiary must license or refrain\n     from using any Intellectual Property Rights or other\n     proprietary information of any other person) which has\n     not been settled or otherwise fully resolved, except for\n     such charges, complaints, claims, demands or notices\n     that, individually and in the aggregate, are not\n     reasonably likely to have a material adverse effect on\n     Parent. Except as set forth in Section 3.02(n) of the\n     Parent Disclosure Schedule, to Parent's knowledge, no\n     other person has materially interfered with, infringed\n     upon, misappropriated or otherwise come into conflict\n     with any Parent Intellectual Property Rights or any\n     Intellectual Property Rights of any of its subsidiaries.\n\n     (iii) Parent has reviewed and assessed all areas within\n     its business and operations that could be adversely\n     affected by the \"Parent Year 2000 Problem\" (that is, the\n     risk that computer applications used by Parent or used\n     by any of the suppliers and vendors of Parent and that\n     interface with a computer application used by Target\n     that may be unable to recognize and\n\n\n\n\n\n                                                           39\n\n\n     perform properly date-sensitive functions involving\n     certain dates prior to and any date after December 31,\n     1999). Based on the foregoing, Parent represents that\n     all computer applications used by Parent and all\n     computer applications used by the suppliers and vendors\n     of Parent that interface with any computer application\n     used by Target that are material to its business or\n     operations are Year 2000 Compliant, except for such\n     failures to be Year 2000 Compliant that, individually\n     and in the aggregate, are not reasonably likely to have\n     a material adverse effect on Parent.\n\n          (o) Title to Properties. (i) Each of Parent and its\n     subsidiaries has good and valid title to, or valid\n     leasehold interests in or valid rights to, all its\n     material properties and assets except for such as are no\n     longer used or useful in the conduct of its businesses\n     or as have been disposed of in the ordinary course of\n     business and except for defects in title, easements,\n     restrictive covenants and similar encumbrances that,\n     individually and in the aggregate, do not materially\n     interfere with its ability to conduct its business as\n     currently conducted. All such material assets and\n     properties, other than assets and properties in which\n     Parent or any of its subsidiaries has a leasehold\n     interest, are free and clear of all Liens except for\n     Liens that, individually and in the aggregate, do not\n     materially interfere with the ability of Parent and its\n     subsidiaries to conduct their respective businesses as\n     currently conducted.\n\n          (ii) Each of Parent and its subsidiaries has\n     complied in all material respects with the terms of all\n     leases to which it is a party and under which it is in\n     occupancy, and all such leases are in full force and\n     effect. Each of Parent and its subsidiaries enjoys\n     peaceful and undisturbed possession under all such\n     leases, except for failures to do so that, individually\n     and in the aggregate, are not reasonably likely to have\n     a material adverse effect on Parent.\n\n          (p) Privacy Policy. (i) For purposes of this\n     Section 3.02(p):\n\n               (A) \"Privacy Statement\" means Parent's written\n          privacy policies regarding the collection, use and\n          distribution of personal information from visitors\n          to its web site and consumers of its products and\n          services as in effect from time to time; and\n\n               (B) \"Data Collection and Security Statement\"\n          means Parent's written data collection and\n\n\n\n\n\n                                                           40\n\n\n          security statement, comprising a part of the\n          Privacy Statement as in effect from time to time.\n\n          (ii) The Privacy Statement is conspicuously linked\n     at all times on Parent's homepage. The Privacy Statement\n     is clearly written and includes at the minimum the\n     following: (A) notice to visitors about Parent's web\n     site's information collection policies and practices\n     prior to disclosing their personal information; (B)\n     options for the visitors regarding how their personal\n     information will be used, including any uses beyond\n     those for which the information was provided and the\n     option to choose whether or not to allow their personal\n     information to be disclosed and used for such purposes\n     and by third parties, but excluding the use and\n     disclosure of personal information to the extent that\n     Parent believes in good faith (based on the advise of\n     outside counsel) that applicable law requires such use\n     or disclosure or for administrative purposes to the\n     extent that Parent determines in good faith that such\n     use or disclosure is reasonably necessary to maintain or\n     service its site or its services; (C) a mechanism by\n     which visitors may view and correct their personal data\n     if it is inaccurate or incomplete; (D) representation\n     that Parent uses industry standard security measures to\n     protect all data collected by Parent from its visitors.\n\n          (iii) Parent and its employees have (A) complied\n     with all privacy policies issued by Parent, all\n     applicable privacy laws regarding the disclosure and use\n     of data, (B) not violated the Privacy Statement or the\n     Data Collection and Security Statement and (C) taken all\n     reasonable steps to protect and maintain the\n     confidential nature of the personal information provided\n     to Parent by visitors who do not consent to the\n     disclosure of such information to third parties or have\n     otherwise expressly requested that Parent not disclose\n     such information. All personal data collected by Parent\n     from time to time is used in accordance with the most\n     current privacy policies of Parent.\n\n          (q) Tax Matters. Neither Parent nor any of its\n     subsidiaries has taken any action or knows of any fact,\n     agreement, plan or other circumstance that is reason\n     ably likely to prevent the Merger from qualifying as a\n     reorganization within the meaning of Section 368(a) of\n     the Code.\n\n          (r) Interim Operations of Sub. Sub was formed\n     solely for the purpose of engaging in the transactions\n     contemplated hereby, has engaged in no other business\n\n\n\n\n\n                                                           41\n\n\n     activities and has conducted its operations only as\n     contemplated hereby.\n\n\n                          ARTICLE IV\n\n          Covenants Relating to Conduct of Business\n\n          SECTION 4.01. Conduct of Business. (a) Conduct of\nBusiness by Target. Except as set forth in Section 4.01(a) of\nthe Target Disclosure Schedule, as otherwise expressly\ncontemplated by this Agreement or as consented to in writing\nby Parent, during the period from the date of this Agreement\nto the Effective Time, Target shall carry on its business\nonly in the ordinary course consistent with past practice and\nin compliance in all material respects with all applicable\nlaws and regulations and, to the extent consistent therewith,\nuse all reasonable efforts to preserve intact its current\nbusiness organization, use reasonable efforts to keep\navailable the services of its current officers and other key\nemployees and preserve its relationships with those persons\nhaving business dealings with it to the end that its goodwill\nand ongoing business shall be unimpaired at the Effective\nTime. Without limiting the generality of the foregoing (but\nsubject to the above exceptions), during the period from the\ndate of this Agreement to the Effective Time, Target shall\nnot, without the prior written consent of Parent, which\nconsent shall not be unreasonably withheld:\n\n          (i) (x) declare, set aside or pay any dividends on,\n     or make any other distributions (whether in cash, stock,\n     property or otherwise) in respect of, any of its capital\n     stock, (y) split, combine or reclassify any of its\n     capital stock or issue or authorize the issuance of any\n     other securities in respect of, in lieu of or in\n     substitution for shares of its capital stock, or (z)\n     purchase, redeem or otherwise acquire, directly or\n     indirectly, any shares of capital stock of Target or any\n     other securities thereof or any rights, warrants or\n     options to acquire any such shares or other securities;\n\n          (ii) issue, deliver, sell, pledge or otherwise\n     encumber or subject to any Lien (w) any shares of its\n     capital stock, (x) any other voting securities, (y) any\n     securities convertible into, or any rights, warrants or\n     options to acquire, any such shares, voting securities\n     or convertible securities or (z) any \"phantom\" stock or\n     stock rights, SARs or stock-based performance units\n     other than (A) the issuance of Target Stock Options\n     granted in the ordinary course of business consistent\n     with past practice to new or promoted employees, so long\n     as (I) the vesting of such\n\n\n\n\n\n                                                           42\n\n\n     Target Stock Options will not accelerate as a result of\n     this Agreement, the Target Stockholder Agreement or the\n     transactions contemplated hereby or thereby and (II) the\n     exercise of such Target Stock Options would not result\n     in the Target Stockholders failing to hold of record\n     more than 50% of the outstanding shares of Target Common\n     Stock (calculated on a fully diluted basis assuming the\n     exercise of all outstanding securities of Target that\n     are then, or may become on or prior to August 31, 2000,\n     convertible into or exchangeable or exercisable for,\n     shares of capital stock or other voting securities of\n     Target), and (B) the issuance of Target Common Stock\n     upon the exercise of Target Stock Options or the\n     Warrants outstanding as of the date hereof in accordance\n     with their present terms, or upon the exercise of Target\n     Stock Options referred to in clause (A) in accordance\n     with their terms;\n\n          (iii) amend Target's certificate of incorporation\n     or by-laws;\n\n          (iv) acquire or agree to acquire by merging or\n     consolidating with, or by purchasing assets of, or by\n     any other manner, any business or any person;\n\n          (v) sell, lease, license, sell and leaseback,\n     mortgage or otherwise encumber or subject to any Lien or\n     otherwise dispose of any of its properties or assets\n     (including securitizations), other than sales or\n     licenses of finished goods or services in the ordinary\n     course of business consistent with past practice;\n\n          (vi) incur any indebtedness in excess of an\n     aggregate principal amount of $250,000 for borrowed\n     money or guarantee any such indebtedness of another\n     person, issue or sell any debt securities or warrants or\n     other rights to acquire any debt securities of Target,\n     guarantee any debt securities of another person, enter\n     into any \"keep well\" or other agreement to maintain any\n     financial statement condition of another person or enter\n     into any arrangement having the economic effect of any\n     of the foregoing, except for short-term borrowings\n     incurred in the ordinary course of business (or to\n     refund existing or maturing indebtedness) consistent\n     with past practice;\n\n          (vii) make any loans, advances or capital\n     contributions to, or investments in, any other person;\n\n          (viii) make or agree to make any new capital\n     expenditures, or enter into any agreements providing for\n     payments which, individually, are in excess of\n\n\n\n\n\n                                                           43\n\n\n     $500,000 or, in the aggregate, are in excess of\n     $5,000,000;\n\n          (ix) make any tax election that, individually or in\n     the aggregate, is reasonably likely to adversely affect\n     in any material respect the tax liability or tax\n     attributes of Target or settle or compromise any\n     material income tax liability;\n\n          (x) (A) pay, discharge, settle or satisfy any\n     claims, liabilities or obligations (absolute, accrued,\n     asserted or unasserted, contingent or otherwise), or\n     litigation (whether or not commenced prior to the date\n     of this Agreement) other than the payment, discharge,\n     settlement or satisfaction, in the ordinary course of\n     business consistent with past practice or in accordance\n     with their terms, of liabilities recognized or disclosed\n     in the most recent financial statements (or the notes\n     thereto) of Target included in the Target Filed SEC\n     Documents or incurred since the date of such financial\n     statements, or (B) waive the benefits of, agree to\n     modify in any manner, terminate, release any person from\n     or fail to enforce any confidentiality, standstill or\n     similar agreement to which Target is a party or of which\n     Target is a beneficiary;\n\n          (xi) except as required by law or contemplated\n     hereby and except for labor agreements negotiated in the\n     ordinary course, (x) establish, enter into, adopt or\n     amend or terminate any Target Benefit Plan or Target\n     Benefit Agreement, (y) change any actuarial or other\n     assumption used to calculate funding obligations with\n     respect to any Target Pension Plan, or change the manner\n     in which contributions to any Target Pension Plan are\n     made or the basis on which such contributions are\n     determined or (z) take any action to accelerate any\n     rights or benefits, or make any material determinations\n     not in the ordinary course of business consistent with\n     past practice, under any collective bargaining\n     agreement, Target Benefit Plan or Target Benefit\n     Agreement;\n\n          (xii) (w) increase the compensation, bonus or other\n     benefits of any current or former director, consultant,\n     officer or other employee, except for (A) salary\n     increases for non-officer employees as part of an annual\n     review process or part of a promotion in job title or\n     responsibility in an amount not to exceed 15% of such\n     employee's salary as of the date of this Agreement\n     individually and 5% of the total salary base of all\n     non-officer employees of Target in the aggregate for all\n     such increases or (B) salary increases for officers\n     consistent with the salary for the respective\n\n\n\n\n\n                                                           44\n\n\n     officer set forth in such officer's Employment Agreement\n     with Parent, (x) grant any current or former director,\n     consultant, officer or other employee any increase in\n     severance or termination pay, (y) amend or modify any\n     Target Stock Option or (z) pay any benefit or amount not\n     required by a plan or arrangement as in effect on the\n     date of this Agreement to any such person;\n\n          (xiii) transfer or license to any person or entity\n     or otherwise extend, amend or modify any rights to the\n     Intellectual Property Rights of Target other than in the\n     ordinary course of business consistent with past\n     practice; provided that in no event shall Target license\n     on an exclusive basis or sell any Intellectual Property\n     Rights of Target;\n\n          (xiv) enter into or amend any agreements pursuant\n     to which any person is granted exclusive marketing or\n     other exclusive rights with respect to any Target\n     product, process or technology;\n\n          (xv) enter into or amend any Contract or other\n     agreement, whether written or oral, that contains any\n     guarantees as to Target's future revenues or as to the\n     future revenues of any other party to such Contract or\n     other agreement;\n\n          (xvi) obtain, through acquisition, lease, sublease\n     or otherwise, any real property for use as an office or\n     similar facility of Target;\n\n          (xvii) hire additional employees in excess of the\n     limits set forth in Target's budget for the fiscal year\n     ending December 31, 2000 attached to Section\n     4.01(a)(xvii) of the Target Disclosure Schedule;\n\n          (xviii) except insofar as may be required by a\n     change in GAAP, make any changes in accounting methods,\n     principles or practices;\n\n          (xix) take any action that would, or that is\n     reasonably likely to, result in (x) any of the\n     representations and warranties made by Target in this\n     Agreement that are qualified as to materiality becoming\n     untrue, (y) any of such representations and warranties\n     that are not so qualified becoming untrue in any\n     material respect or (z) any condition to the Merger set\n     forth in Article VI not being satisfied; or\n\n          (xx) authorize, or commit, resolve or agree to\n     take, any of the foregoing actions.\n\n\n\n\n\n                                                           45\n\n\n          (b) Conduct of Business by Parent. Except as set\nforth in Section 4.01(b) of the Parent Disclosure Schedule,\nas otherwise expressly contemplated by this Agreement or as\nconsented to in writing by Target, during the period from the\ndate of this Agreement to the Effective Time, Parent shall,\nand shall cause its subsidiaries to, carry on their\nrespective businesses only in the ordinary course consistent\nwith past practice and in compliance in all material respects\nwith all applicable laws and regulations and, to the extent\nconsistent therewith, use all reasonable efforts to preserve\nintact their current business organizations, use reasonable\nefforts to keep available the services of their current\nofficers and other key employees and preserve their\nrelationships with those persons having business dealings\nwith them to the end that their goodwill and ongoing\nbusinesses shall be unimpaired at the Effective Time. Without\nlimiting the generality of the foregoing (but subject to the\nabove exceptions), during the period from the date of this\nAgreement to the Effective Time, Parent shall not, and shall\nnot permit any of its subsidiaries to, without the prior\nwritten consent of Target, which consent shall not be\nunreasonably withheld:\n\n          (i) take any action that would, or that is\n     reasonably likely to, result in (x) any of the\n     representations and warranties made by Parent in this\n     Agreement that are qualified as to materiality becoming\n     untrue, (y) any of such representations and warranties\n     that are not so qualified becoming untrue in any\n     material respect or (z) any condition to the Merger set\n     forth in Article VI not being satisfied; or\n\n          (ii) acquire any business entity, whether by\n     merger, consolidation, stock purchase or otherwise,\n     unless Parent's board of directors determines in good\n     faith that such acquisition would not materially delay\n     the consummation of the transactions contemplated by\n     this Agreement.\n\n          (c) Advice of Changes. Target and Parent shall\npromptly advise the other party orally and in writing to the\nextent it has knowledge of (i) any representation or warranty\nmade by it (and, in the case of Parent, made by Sub)\ncontained in this Agreement that is qualified as to\nmateriality becoming untrue or inaccurate in any respect or\nany such representation or warranty that is not so qualified\nbecoming untrue or inaccurate in any material respect, (ii)\nthe failure by it (and, in the case of Parent, by Sub) to\ncomply with or satisfy in any material respect any covenant,\ncondition or agreement to be complied with or satisfied by it\nunder this Agreement and (iii) any change or event having, or\nwhich is reasonably likely to have, a material adverse effect\non such party or on the truth of\n\n\n\n\n\n                                                           46\n\n\ntheir respective representations and warranties or the\nability of the conditions set forth in Article VI to be\nsatisfied; provided, however, that no such notification shall\naffect the representations, warranties, covenants or\nagreements of the parties (or remedies with respect thereto)\nor the conditions to the obligations of the parties under\nthis Agreement.\n\n          SECTION 4.02. No Solicitation by Target. (a) Target\nshall not, nor shall it permit any of its subsidiaries to,\nnor shall it authorize or permit any of its directors,\nofficers or employees or any investment banker, financial\nadvisor, attorney, accountant or other representa tive\nretained by it or any of its subsidiaries to, directly or\nindirectly through another person, (i) solicit, initiate or\nencourage (including by way of furnishing information), or\ntake any other action to facilitate, any inquiries or the\nmaking of any proposal that constitutes, or may reasonably be\nexpected to lead to, any Takeover Proposal or (ii) enter\ninto, continue or otherwise participate in any discussions or\nnegotiations regarding, or furnish to any person any\ninformation with respect to, any Takeover Proposal.\nNotwithstanding the foregoing, in the event that, notwith\nstanding compliance with the preceding sentence, Target\nreceives a Superior Proposal, Target may, to the extent that\nthe Board of Directors of Target determines in good faith\n(after consultation with outside counsel) that such action\nwould, in the absence of the foregoing proscriptions, be\nrequired by its fiduciary duties, participate in discussions\nregarding any Superior Proposal in order to be informed with\nrespect thereto in order to make any determination permitted\npursuant to Section 4.02(b)(i). In such event, Target shall,\n(i) no less than 48 hours prior to participating in any such\ndiscussions, inform Parent of the material terms and\nconditions of such Superior Proposal, including the identity\nof the person making such Superior Proposal, (ii) promptly\ninform Parent of the substance of any discussions relating to\nsuch Superior Proposal and (iii) promptly keep Parent fully\ninformed of the status, including any change to the details\nof, any such Superior Proposal.\n\n          For purposes of this Agreement, \"Takeover Proposal\"\nmeans any inquiry, proposal or offer from any person relating\nto any direct or indirect acquisition or purchase of 15% or\nmore of the assets of Target and its subsidiaries, taken as a\nwhole, or 15% or more of any class or series of equity\nsecurities of Target or any of its subsidiaries, any tender\noffer or exchange offer that if consummated would result in\nany person beneficially owning 15% or more of any class or\nseries of equity securities of Target or any of its\nsubsidiaries, or any merger, consolidation, business\ncombination, recapitalization,\n\n\n\n\n\n                                                           47\n\n\n\n\nliquidation, dissolution or similar transaction involving\nTarget or any of its subsidiaries, other than the\ntransactions contemplated by this Agreement.\n\n          For purposes of this Agreement, \"Superior Proposal\"\nmeans any offer not solicited by Target made by a third party\nto consummate a tender offer, exchange offer, merger,\nconsolidation or similar transaction which would result in\nsuch third party (or its shareholders) owning, directly or\nindirectly, more than 50% of the shares of Target Common\nStock then outstanding (or of the surviving entity in a\nmerger) or all or substantially all of the assets of Target\nand otherwise on terms which the Board of Directors of Target\ndetermines in good faith (following receipt of the advice of\na financial advisor of nationally recognized reputation) to\nprovide consideration to the holders of Target Common Stock\nwith a greater value than the consideration payable in the\nMerger.\n\n          (b) Neither Target nor the Board of Directors of\nTarget nor any committee thereof shall (i) withdraw or\nmodify, or propose to withdraw or modify, in a manner adverse\nto Parent, the approval or recommendation by such Board of\nDirectors or such committee of the Merger or this Agreement,\nexcept to the extent that such Board of Directors determines\nin good faith (after consultation with outside counsel) that\nsuch action would, in the absence of the foregoing\nproscriptions, be required by its fiduciary duties, (ii)\napprove or recommend, or propose to approve or recommend, any\nTakeover Proposal or (iii) approve or recommend, or propose\nto approve or recommend, or execute or enter into, any letter\nof intent, memorandum of under standing, agreement in\nprinciple, merger agreement, acquisition agreement, option\nagreement, joint venture agreement, partnership agreement or\nother similar agreement or propose or agree to do any of the\nforegoing constituting or related to, or which is intended to\nor is reasonably likely to lead to, any Takeover Proposal.\n\n          (c) In addition to the obligations of Target set\nforth in paragraphs (a) and (b) of this Section 4.02, Target\nshall immediately (and no later than 48 hours) advise Parent\norally and in writing of any request for information or of\nany inquiry with respect to a Takeover Proposal, the material\nterms and conditions of such request, inquiry or Takeover\nProposal and the identity of the person making such request,\ninquiry or Takeover Proposal. Target will promptly keep\nParent informed of the status and details (including\namendments or changes or proposed amendments or changes) of\nany such request, inquiry or Takeover Proposal.\n\n          (d) Nothing contained in this Section 4.02 shall\nprohibit Target from taking and disclosing to its stock\nholders a position contemplated by Rule 14e-2(a) promulgated\nunder the Exchange Act or from making any disclosure to\nTarget's stockholders if, in the good faith judgment of the\nBoard of Directors of Target, after consultation with outside\ncounsel, failure so to disclose would be inconsis tent with\nits obligations under applicable law; provided, however,\nthat, subject to Section 4.02(b)(i), neither Target nor its\nBoard of Directors nor any committee thereof shall withdraw\nor modify, or propose to withdraw or modify, its position\nwith respect to this Agreement or the Merger or approve or\nrecommend, or propose to approve or recommend, a Takeover\nProposal.\n\n          SECTION 4.03. Recommendation by Parent. Neither\nParent nor the Board of Directors of Parent nor any committee\nthereof shall withdraw or modify, or propose to withdraw or\nmodify, in a manner adverse to Target, the approval or\nrecommendation by such Board of Directors or such committee\nof the Merger or this Agreement, except to the extent that\nsuch Board of Directors determines in good faith (after\nconsultation with outside counsel) that such action would, in\nthe absence of the foregoing proscriptions, be required by\nits fiduciary duties. The foregoing sentence shall not\nprohibit Parent from taking and disclosing to its\nstockholders a position contemplated by Rule 14e-2(a)\npromulgated under the Exchange Act or from making any\ndisclosure to its stockholders if, in the good faith judgment\nof the Board of Directors of Parent, after consultation with\noutside counsel, failure so to disclose would be inconsistent\nwith its obligations under applicable law; provided, however,\nthat, subject to the first sentence of this Section 4.03,\nneither Parent nor its Board of Directors nor any committee\nthereof shall withdraw or modify, or propose to withdraw or\nmodify, its position with respect to this Agreement or the\nMerger.\n\n\n                          ARTICLE V\n\n                    Additional Agreements\n\n          SECTION 5.01. Preparation of the Form S-4 and the\nProxy Statement; Target Stockholders Meeting; Parent Stock\nholders Meeting. (a) As soon as practicable following the\ndate of this Agreement, Parent and Target shall prepare and\nfile with the SEC the Proxy Statement and Parent and Target\nshall prepare and Parent shall file with the SEC the Form\nS-4, in which the Proxy Statement will be included as a\nprospectus. Each of Target and Parent shall use all\nreasonable efforts to have the Form S-4 declared effective\nunder the Securities Act as promptly as practicable after\nsuch filing. Parent and Target will use all reasonable\nefforts to cause the Proxy Statement to be mailed to\n\n\n\n\n\n                                                           48\n\n\nParent's and Target's stockholders, respectively, as promptly\nas practicable after the Form S-4 is declared effective under\nthe Securities Act. Parent shall also take any action (other\nthan qualifying to do business in any jurisdiction in which\nit is not now so qualified or to file a general consent to\nservice of process) required to be taken under any applicable\nstate securities laws in connection with the issuance of\nParent Common Stock in the Merger and Target shall furnish\nall information concerning Target and the holders of capital\nstock of Target as may be reasonably requested in connection\nwith any such action and the preparation, filing and\ndistribution of the Proxy Statement. No filing of, or\namendment or supplement to, or correspondence to the SEC or\nits staff with respect to, the Form S-4 will be made by\nParent, or the Proxy Statement will be made by Target or\nParent, without providing the other party a reasonable\nopportunity to review and comment thereon. Parent will advise\nTarget, promptly after it receives notice thereof, of the\ntime when the Form S-4 has become effective or any supplement\nor amendment has been filed, the issuance of any stop order,\nthe suspension of the qualification of the Parent Common\nStock issuable in connection with the Merger for offering or\nsale in any jurisdiction, or any request by the SEC for\namendment of the Form S-4 or comments thereon and responses\nthereto or requests by the SEC for additional information.\nTarget or Parent will advise the other party, promptly after\nit receives notice thereof, of any request by the SEC for the\namendment of the Proxy Statement or comments thereon and\nresponses thereto or requests by the SEC for additional\ninformation. If at any time prior to the Effective Time any\ninformation relating to Target or Parent, or any of their\nrespective affiliates, officers or directors, should be\ndiscovered by Target or Parent which should be set forth in\nan amendment or supplement to any of the Form S-4 or the\nProxy Statement, so that any of such documents would not\ninclude any misstatement of a material fact or omit to state\nany material fact necessary to make the statements therein,\nin light of the circumstances under which they were made, not\nmisleading, the party which discovers such information shall\npromptly notify the other parties hereto and an appro priate\namendment or supplement describing such information shall be\npromptly filed with the SEC and, to the extent required by\nlaw, disseminated to the stockholders of Target.\n\n          (b) Target shall, as soon as practicable following\nthe date of this Agreement, establish a record date (which\nwill be as soon as practicable following the date of this\nAgreement) for, duly call, give notice of, convene and hold a\nmeeting of its stockholders (the \"Target Stockholders\nMeeting\") solely for the purpose of obtaining the Target\nStockholder Approval. Subject to Section 4.02(b)(i), Target\nshall, through its Board of\n\n\n\n\n\n                                                           49\n\n\nDirectors, recommend to its stockholders the approval and\nadoption of this Agreement, the Merger and the other\ntransactions contemplated hereby. Without limiting the\ngenerality of the foregoing, Target agrees that its\nobligations pursuant to the first sentence of this Section\n5.01(b) shall not be affected by (i) the commencement, public\nproposal, public disclosure or communication to Target of any\nTakeover Proposal or (ii) the withdrawal or modification by\nthe Board of Directors of Target or any committee thereof of\nsuch Board of Directors' or such committee's approval or\nrecommendation of the Merger or this Agreement.\n\n          (c) Parent shall, as soon as practicable following\nthe date of this Agreement, establish a record date (which\nwill be as soon as practicable following the date of this\nAgreement) for, duly call, give notice of, convene and hold a\nmeeting of its stockholders (the \"Parent Stockholders\nMeeting\") for the purpose of obtaining the Parent Stockholder\nApproval. Subject to the first sentence of Section 4.03,\nParent shall, through its Board of Directors, recommend to\nits stockholders the approval of the issuance of shares of\nParent Common Stock in connection with the Merger. Without\nlimiting the generality of the foregoing, Parent agrees that\nits obligations pursuant to the first sentence of this\nSection 5.01(c) shall not be affected by (i) the\ncommencement, public proposal, public disclosure or\ncommunication to Parent of any acquisition proposal involving\nParent or any of its subsidiaries or (ii) the withdrawal or\nmodification by the Board of Directors of Parent or any\ncommittee thereof of such Board of Directors' or such\ncommittee's approval or recommendation of the Merger or this\nAgreement.\n\n          SECTION 5.02. Letters of Target's Accountants.\nTarget shall use all reasonable efforts to cause to be\ndelivered to Parent two letters from Target's independent\npublic accountants, one dated a date within two business days\nbefore the date on which the Form S-4 shall become effective\nand one dated a date within two business days before the\nClosing Date, each addressed to Parent, in form and substance\nreasonably satisfactory to Parent and customary in scope and\nsubstance for comfort letters delivered by independent public\naccountants in connection with registration statements\nsimilar to the Form S-4.\n\n          SECTION 5.03. Letters of Parent's Accountants.\nParent shall use all reasonable efforts to cause to be\ndelivered to Target two letters from Parent's independent\naccountants, one dated a date within two business days before\nthe date on which the Form S-4 shall become effective and one\ndated a date within two business days before the Closing\nDate, each addressed to Target, in form and sub stance\nreasonably satisfactory to Target and customary in scope and\nsubstance for comfort letters delivered by independent public\naccountants in connection with registration statements\nsimilar to the Form S-4.\n\n          SECTION 5.04. Access to Information; Confi\ndentiality. Upon reasonable notice and subject to the\nConfidentiality Agreement dated as of January 5, 2000,\nbetween Parent and Target (the \"Confidentiality Agreement\"),\nTarget shall, and shall cause each of its subsidiaries to,\nafford to Parent and to its officers, employees, accountants,\ncounsel, financial advisors and other representatives,\nreasonable access during normal business hours during the\nperiod prior to the Effective Time to all its properties,\nbooks, contracts, commitments, personnel and records and,\nduring such period, Target shall, and shall cause each of its\nsubsidiaries to, furnish promptly to Parent (a) a copy of\neach report, schedule, registration statement and other\ndocument filed by it during such period pursuant to the\nrequirements of federal or state securities laws and (b) all\nother information concerning its business, properties and\npersonnel as Parent may reasonably request (including\nTarget's outside accountants work papers). Target shall not\nbe required to provide access to or disclose information\nwhere such access or disclosure would contravene any law,\nrule, regulation, order or decree. No review pursuant to this\nSection 5.04 shall have an effect for the purpose of\ndetermining the accuracy of any representation or warranty\ngiven by either party hereto to the other party hereto.\nParent will hold, and will cause its officers, employees,\naccountants, counsel, financial advisors and other\nrepresentatives and affiliates to hold, any nonpublic\ninformation in accordance with the terms of the\nConfidentiality Agreement.\n\n          SECTION 5.05. Reasonable Efforts. (a) Upon the\nterms and subject to the conditions set forth in this Agree\nment, each of the parties agrees to use reasonable efforts to\ntake, or cause to be taken, all actions, and to do, or cause\nto be done, and to assist and cooperate with the other\nparties in doing, all things necessary, proper or advisable\nto consummate and make effective, in the most expeditious\nmanner practicable, the Merger and the other transactions\ncontemplated by this Agreement, the Target Stockholder\nAgreement and the Parent Stockholder Agreement, including\nusing reasonable efforts to accomplish the following: (i) the\ntaking of all reasonable acts necessary to cause the\nconditions to Closing to be satisfied as promptly as\npracticable; (ii) the obtaining of all necessary actions or\nnonactions, waivers, consents and approvals from Govern\nmental Entities and the making of all necessary registra\ntions and filings (including filings with Governmental\nEntities, including under the HSR Act) and the taking of all\n\n\n\n\n\n                                                           50\n\n\nsteps as may be necessary to obtain an approval or waiver\nfrom, or to avoid an action or proceeding by, any\nGovernmental Entity; (iii) the obtaining of all necessary\nconsents, approvals or waivers from third parties; (iv) the\ndefending of any lawsuits or other legal proceedings, whether\njudicial or administrative, challenging this Agreement, the\nTarget Stockholder Agreement or the Parent Stockholder\nAgreement or the consummation of the transactions\ncontemplated by this Agreement, the Target Stockholder\nAgreement or the Parent Stockholder Agreement, including\nseeking to have any stay or temporary restraining order\nentered by any court or other Governmental Entity vacated or\nreversed; and (v) the execution and delivery of any\nadditional instruments necessary to consummate the\ntransactions contemplated by, and to fully carry out the\npurposes of, this Agreement, the Target Stockholder Agreement\nand the Parent Stockholder Agreement; provided, however, that\nParent will not be required to agree to, or proffer to, (i)\ndivest or hold separate any of Parent's, Target's or any of\ntheir respective affiliates' businesses or assets or (ii)\ncease to conduct business or operations in any jurisdiction\nin which Parent, Target or any of Parent's subsidiaries\nconducts business or operations as of the date of this\nAgreement.\n\n          (b) In connection with and without limiting the\nforegoing, Target and its Board of Directors and Parent and\nits Board of Directors shall (i) take all action necessary to\nensure that no state takeover statute or similar statute or\nregulation is or becomes applicable to the Merger, this\nAgreement, the Target Stockholder Agreement or the Parent\nStockholder Agreement or any other transactions contemplated\nby this Agreement, the Target Stockholder Agreement or the\nParent Stockholder Agreement and (ii) if any state takeover\nstatute or similar statute or regulation becomes applicable\nto the Merger, this Agreement, the Target Stockholder\nAgreement or the Parent Stockholder Agreement or any other\ntransaction contemplated by this Agreement, the Target\nStockholder Agreement or the Parent Stockholder Agreement,\ntake all action necessary to ensure that the Merger and the\nother transactions contemplated by this Agreement, the Target\nStockholder Agreement and the Parent Stockholder Agreement\nmay be consummated as promptly as practicable on the terms\ncontemplated by this Agreement, the Target Stockholder\nAgreement and the Parent Stockholder Agreement and otherwise\nto minimize the effect of such statute or regulation on the\nMerger and the other transactions contemplated by this\nAgreement, the Target Stockholder Agreement and the Parent\nStockholder Agreement.\n\n          SECTION 5.06. Stock Options; Warrants. (a) On or as\nsoon as practicable following the date of this Agreement, the\nBoard of Directors of Target (or, if\n\n\n\n\n\n                                                           51\n\n\nappropriate, any committee thereof administering the Target\nStock Plans) shall adopt such resolutions or take such other\nactions as may be required to effect the following:\n\n          (i) adjust the terms of all outstanding Target\n     Stock Options granted under the Target Stock Plans\n     (each, as so adjusted, an \"Adjusted Option\"), whether\n     vested or unvested, as necessary to provide that, at the\n     Effective Time, each Target Stock Option outstanding\n     immediately prior to the Effective Time shall be amended\n     and converted into an option to acquire, on the same\n     terms and conditions as were applicable under such\n     Target Stock Option, the number of shares of Parent\n     Common Stock (rounded down to the nearest whole share)\n     equal to (A) the number of shares of Target Common Stock\n     subject to such Target Stock Option immediately prior to\n     the Effective Time multiplied by (B) the Exchange Ratio,\n     at an exercise price per share of Parent Common Stock\n     (rounded up to the nearest tenth of a cent) equal to (x)\n     the exercise price per share of such Target Common Stock\n     immediately prior to the Effective Time divided by (y)\n     the Exchange Ratio; and\n\n          (ii) make such other changes to the Target Stock\n     Plans as Target and Parent may agree are appropriate to\n     give effect to the Merger.\n\n          (b) The adjustments provided in this Section 5.06\nwith respect to any Target Stock Option to which Section\n421(a) of the Code applies shall be and are intended to be\neffected in a manner which is consistent with Section 424(a)\nof the Code so that no such adjustment shall cause (other\nthan de minimis changes resulting from mathematical rounding)\n(i) the ratio of the exercise price of each Adjusted Option\nto the fair market value of the Parent Common Stock subject\nto such Adjusted Option immediately following the Effective\nTime to be more favorable to the optionee than the ratio of\nthe corresponding Target Stock Option exercise price to the\nfair market value of the Target Common Stock subject to such\ncorresponding Target Stock Option immediately prior to the\nEffective Time or (ii) the excess of the aggregate fair\nmarket value of all shares of Parent Common Stock subject to\neach Adjusted Option immediately following the Effective Time\nover the aggregate exercise price of such Adjusted Option to\nbe more than the excess of the aggregate fair market value of\nall shares of Target Common Stock subject to the\ncorresponding Target Stock Option immediately prior to the\nEffective Time over the aggregate exercise price of such\ncorresponding Target Stock Option. As soon as practicable\nafter the Effective Time, Parent shall deliver to the holders\nof Target Stock Options appropriate notices setting forth\nsuch holders'\n\n\n\n\n\n                                                           52\n\n\nrights pursuant to the respective Target Stock Plans and the\nagreements evidencing the grants of such Target Stock Options\nand that such Target Stock Options and agreements shall be\nassumed by Parent and shall continue in effect on the same\nterms and conditions (subject to the adjustments required by\nthis Section 5.06 after giving effect to the Merger).\n\n          (c) A holder of an Adjusted Option may exercise\nsuch Adjusted Option in whole or in part in accordance with\nits terms by following procedures to be communicated by\nParent with the notice contemplated by Section 5.06(b),\ntogether with the consideration therefor and the federal\nwithholding tax information, if any, required in accordance\nwith the related Target Stock Plan.\n\n          (d) Except as otherwise expressly provided by this\nSection 5.06 and except to the extent required under the\nrespective terms of the Target Stock Options, all\nrestrictions or limitations on transfer and vesting with\nrespect to Target Stock Options awarded under the Target\nStock Plans or any other plan, program or arrangement of\nTarget or any of its subsidiaries, to the extent that such\nrestrictions or limitations shall not have already lapsed,\nand all other terms thereof, shall remain in full force and\neffect with respect to such options after giving effect to\nthe Merger and the assumption by Parent as set forth above.\n\n          (e) Within two business days following the\nEffective Time, Parent shall prepare and file with the SEC a\nregistration statement on Form S-8 (or another appropriate\nform) registering a number of shares of Parent Common Stock\nequal to the number of shares subject to the Adjusted\nOptions. Target shall cooperate with, and assist Parent in\nthe preparation of, such registration statement. Prior to the\nEffective Time, Parent shall take all necessary actions in\nconnection with the assumption of the Adjusted Options,\nincluding the reservation, issuance and listing of Parent\nCommon Stock in a number at least equal to the number of\nshares of Parent Common Stock that will be subject to the\nAdjusted Options.\n\n          (f) Target shall take, or cause to be taken, all\naction necessary to cause the termination of Target's 1999\nEmployee Stock Purchase Plan and all future offering periods\nthereunder, in each case, effective as of the date that is no\nlater than five business days prior to the Closing Date.\n\n          (g) As soon as practicable following the date of\nthis Agreement, the Board of Directors of Target (or, if\n\n\n\n\n\n                                                           53\n\n\nappropriate, any committee thereof) shall adopt such\nresolutions or take such other actions as may be required to\neffect the following:\n\n          (i) adjust the terms of all outstanding Warrants\n     granted under the warrant agreements listed in Section\n     3.01(c) of the Target Disclosure Schedule as necessary\n     to provide that, at the Effective Time, each Warrant\n     outstanding immediately prior to the Effective Time\n     shall be amended and converted into a warrant to\n     acquire, on the same terms and conditions as were\n     applicable under such Warrant, the number of shares of\n     Parent Common Stock (rounded down to the nearest whole\n     share) equal to (A) the number of shares of Target\n     Common Stock subject to such Warrant immediately prior\n     to the Effective Time multiplied by (B) the Exchange\n     Ratio, at an exercise price per share of Parent Common\n     Stock (rounded up to the nearest tenth of a cent) equal\n     to (x) the exercise price per share of such Target\n     Common Stock immediately prior to the Effective Time\n     divided by (y) the Exchange Ratio; and\n\n          (ii) make such other changes to the warrant\n     agreements listed in Section 3.01(c) of the Target\n     Disclosure Schedule as Target and Parent may agree are\n     appropriate to give effect to the Merger.\n\n          SECTION 5.07. Employee Matters. (a) Parent shall\nprovide, or cause to be provided, from the Effective Time\nthrough December 31, 2000, to current employees of Target who\ncontinue employment through the Effective Time (the \"Target\nEmployees\"), employee benefits that are, in the aggregate, no\nless favorable than the employee benefits provided to\nsimilarly situated employees of Parent.\n\n          (b) For purposes of eligibility and vesting (but\nnot benefit accrual) under the employee benefit plans of\nParent and its subsidiaries providing benefits to Target\nEmployees, Parent shall credit, and shall cause the Surviving\nCorporation to credit, each Target Employee with his or her\nyears of service with Target before the Effective Time, to\nthe same extent as such Target Employee was entitled\nimmediately prior to the Effective Time to credit for such\nservice under any similar Target Benefit Plan. To the extent\npermitted by Parent's employee benefit plans and applicable\nlaw, Parent, the Surviving Corporation and its subsidiaries\nshall waive any pre-existing condition limitations, waiting\nperiods or similar limitations applicable to Target Employees\nand their covered dependents (other than limitations or\nwaiting periods that are already in effect with respect to\nsuch employees and dependents and that have not been\nsatisfied as of the Effective Time) under such employee\nbenefit plans of Parent and shall provide each\n\n\n\n\n\n                                                           54\n\n\nsuch Target Employee with credit for any co-payments\npreviously made and any deductibles previously satisfied.\n\n          (c) Nothing contained in this Section 5.07 or\nelsewhere in this Agreement shall be construed to prevent the\ntermination of employment of any individual Target Employee\nor any change in the employee benefits available to any\nindividual Target Employee or the amendment or termina tion\nof any particular Target Benefit Plan or Target Benefit\nAgreement to the extent permitted by its terms as in effect\nimmediately prior to the Effective Time.\n\n          SECTION 5.08. Indemnification, Exculpation and\nInsurance. (a) Parent agrees that all rights to indemni\nfication, advancement of expenses and exculpation from\nliabilities for acts or omissions occurring at or prior to\nthe Effective Time now existing in favor of the current or\nformer directors or officers of Target as provided in its\ncertificate of incorporation or by-laws and any indemnifi\ncation agreements of Target (as each is in effect on the date\nhereof), the existence of which does not constitute a breach\nof this Agreement, shall be assumed by the Surviving\nCorporation in the Merger, without further action, as of the\nEffective Time and shall survive the Merger and shall\ncontinue in full force and effect in accordance with their\nterms, and Parent shall cause the Surviving Corporation to\nhonor all such rights.\n\n          (b) In the event that the Surviving Corporation or\nany of its successors or assigns (i) consolidates with or\nmerges into any other person and is not the continuing or\nsurviving corporation or entity of such consolidation or\nmerger or (ii) transfers or conveys all or substantially all\nof its properties and assets to any person, or otherwise\ndissolves the Surviving Corporation, then, and in each such\ncase, Parent shall cause proper provision to be made so that\nthe successors and assigns of the Surviving Corporation\nassume the obligations set forth in this Section 5.08. Parent\nhereby guarantees to the current or former directors or\nofficers of Target the performance of the obligations of the\nSurviving Corporation under Section 5.08(a) up to a maximum\naggregate amount of $45,000,000.\n\n          (c) The Surviving Corporation shall, at its option,\neither (i) maintain for a period of not less than six years\nafter the Effective Time, Target's current directors' and\nofficers' liability insurance covering acts or omissions\noccurring prior to the Effective Time (\"D&amp;O Insurance\") with\nrespect to those persons who are currently covered by\nTarget's directors' and officers' liability insurance policy\non terms with respect to such coverage and amount no less\nfavorable than those of such policy in effect on the date\nhereof or (ii) cause to be provided coverage no\n\n\n\n\n\n                                                           55\n\n\nless favorable to such directors or officers, as the case may\nbe, than the D&amp;O Insurance, in each case so long as the\nannual premium therefor would not be in excess of 200% of the\nlast annual premium paid for the D&amp;O Insurance prior to the\ndate of this Agreement (such 200% amount the \"Maximum\nPremium\"). If the existing or substituted directors' and\nofficers' liability insurance expires, is terminated or\ncanceled during such six-year period, the Surviving\nCorporation will obtain as much D&amp;O Insurance as can be\nobtained for the remainder of such period for an annualized\npremium not in excess of the Maximum Premium. Target\nrepresents that (a) the Maximum Premium is $466,804 and (b)\nthe maximum amount payable under the D&amp;O Insurance is\n$20,000,000. At the option of Parent, Parent may assume the\nobligations of the Surviving Corporation set forth in\nSections 5.08(a) and (b), and thereafter neither Parent nor\nthe Surviving Corporation shall have any further obligations\npursuant to this Section 5.08(c) for so long as Parent\ncontinues to so assume the obligations of the Surviving\nCorporation.\n\n          (d) The provisions of this Section 5.08 (i) are\nintended to be for the benefit of, and will be enforceable\nby, each indemnified party, his or her heirs and his or her\nrepresentatives and (ii) are in addition to, and not in\nsubstitution for, any other rights to indemnification or\ncontribution that any such person may have by contract or\notherwise.\n\n          SECTION 5.09. Fees and Expenses. (a) All fees and\nexpenses incurred in connection with the Merger, this\nAgreement, the Target Stockholder Agreement, the Parent\nStockholder Agreement and the transactions contemplated by\nthis Agreement, the Target Stockholder Agreement and the\nParent Stockholder Agreement shall be paid by the party\nincurring such fees or expenses, whether or not the Merger is\nconsummated, except that each of Parent and Target shall bear\nand pay one-half of the costs and expenses incurred in\nconnection with the filing, printing and mailing of the Form\nS-4 and the Proxy Statement (including SEC filing fees).\nParent shall file any return with respect to, and shall pay,\nany state or local taxes (including any penalties or interest\nwith respect thereto), if any, which are attributable to the\ntransfer of the beneficial ownership of Target's real\nproperty (collectively, the \"Real Estate Transfer Taxes\") as\na result of the Merger (other than any such taxes that are\nsolely the obligations of a stockholder of Target, in which\ncase Target shall pay any such taxes). Target shall cooperate\nwith Parent in the filing of such returns including, in the\ncase of Target, supplying in a timely manner a complete list\nof all real property interests held by Target and any\ninformation with respect to such property that is reasonably\nnecessary to complete such\n\n\n\n\n\n                                                           56\n\n\nreturns. The fair market value of any real property of Target\nsubject to the Real Estate Transfer Taxes shall be as agreed\nto between Parent and Target.\n\n          (b) In the event that this Agreement is terminated\n(x) by Parent or Target pursuant to clause (B) of Section\n7.01(b)(ii) or (y) by Target pursuant to Section 7.01(d) as a\nresult of a breach of this Agreement by Parent by reason of\nParent's refusal to hold the Parent Stockholders Meeting in\naccordance with Section 5.01(c), then Parent shall promptly,\nbut in no event later than the date of such termination, pay\nTarget a fee equal to $12,800,000.00, payable by wire\ntransfer of same day funds. If Parent fails to pay any amount\ndue pursuant to this Section 5.09(b) and, in order to obtain\nsuch payment, Target commences a suit which results in a\njudgment against Parent for the payment of such fee, Parent\nshall pay to Target its out-of-pocket expenses incurred in\nconnection with such suit.\n\n          (c) In the event that this Agreement is terminated\nby Parent pursuant to Section 7.01(c) as a result of a breach\nof this Agreement by Target by reason of Target's refusal to\nhold the Target Stockholders Meeting in accordance with\nSection 5.01(b), then Target shall promptly, but in no event\nlater than the date of such termination, pay Parent a fee\nequal to $6,400,000.00, payable by wire transfer of same day\nfunds. If Target fails to pay any amount due pursuant to this\nSection 5.09(c) and, in order to obtain such payment, Parent\ncommences a suit which results in a judgment against Target\nfor the payment of such fee, Target shall pay to Parent its\nout-of-pocket expenses incurred in connection with such suit.\n\n          SECTION 5.10. Public Announcements. Parent and\nTarget will consult with each other before issuing, and\nprovide each other the opportunity to review, comment upon\nand concur with, any press release or other public state\nments with respect to the transactions contemplated by this\nAgreement, including the Merger, the Target Stockholder\nAgreement and the Parent Stockholder Agreement, and shall not\nissue any such press release or make any such public\nstatement prior to such consultation, except as either party\nmay determine is required by applicable law, the SEC, court\nprocess or by obligations pursuant to any listing or\nquotation agreement with any national securities exchange or\nnational trading system. The parties agree that the initial\npress release to be issued with respect to the transactions\ncontemplated by this Agreement, the Target Stockholder\nAgreement and the Parent Stockholder Agreement shall be in\nthe form heretofore agreed to by the parties. Promptly after\nthe date of this Agreement, Parent and Target shall each file\nwith the SEC, in a form agreed to by the parties,\n\n\n\n\n\n                                                           57\n\n\na Current Report on Form 8-K relating to the execution of\nthis Agreement and the transactions contemplated hereby,\nattaching as exhibits thereto a copy of this Agreement, the\nParent Stockholder Agreement, the Target Stockholder\nAgreement and the press release referred to in the previous\nsentence.\n\n          SECTION 5.11. Affiliates. Target shall deliver to\nParent at least 30 days prior to the Closing Date a letter\nidentifying all persons who are, at the time this Agreement\nis submitted for adoption by the stockholders of Target,\n\"affiliates\" of Target for purposes of Rule 145 under the\nSecurities Act. Target shall use reasonable efforts to cause\neach such person to deliver to Parent at least 30 days prior\nto the Closing Date a written agreement substantially in the\nform attached as Exhibit A hereto.\n\n          SECTION 5.12. Quotation. Parent shall use\nreasonable efforts to cause the Parent Common Stock issuable\nin the Merger to be approved for quotation on Nasdaq, subject\nto official notice of issuance, as promptly as practicable\nafter the date hereof, and in any event prior to the Closing\nDate.\n\n          SECTION 5.13. Litigation. Target shall give Parent\nthe reasonable opportunity to participate, at its expense, in\nthe defense of any litigation against Target and\/or its\ndirectors relating to the transactions contemplated by this\nAgreement and the Target Stockholder Agreement.\n\n          SECTION 5.14. Tax Treatment. Each of Parent and\nTarget shall use best efforts to cause the Merger to qualify\nas a reorganization under the provisions of Section 368 of\nthe Code, and each of Parent and Target shall use reasonable\nefforts to obtain the opinion of counsel referred to in\nSections 6.02(d) and 6.03(c), including the execution of the\nletters of representation referred to therein.\n\n          SECTION 5.15. Target Stockholder Agreement Legend;\nParent Stockholder Agreement Legend. (a) As soon as\npracticable after the date of this Agreement, Target will\ninscribe upon any certificate representing Target Subject\nShares (as defined in the Target Stockholder Agreement) the\nfollowing legend: \"THE SHARES OF COMMON STOCK, PAR VALUE\n$0.01 PER SHARE, OF TARGET REPRESENTED BY THIS CERTIFICATE\nARE SUBJECT TO A STOCKHOLDER AGREEMENT DATED AS OF FEBRUARY\n29, 2000, AND THE TRANSFER AND VOTING THEREOF ARE SUBJECT TO\nTHE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED\nAT THE PRINCIPAL EXECUTIVE OFFICES OF TARGET.\"; and Target\nwill return such certificate containing such inscription to\nthe Target Stockholders within three business days following\nTarget's receipt thereof.\n\n\n\n\n\n                                                           58\n\n\n\n\n          (b) As soon as practicable after the date of this\nAgreement, Parent will inscribe upon any certificate\nrepresenting Parent Subject Shares (as defined in the Parent\nStockholder Agreement) the following legend: \"THE SHARES OF\nCOMMON STOCK, PAR VALUE $0.01 PER SHARE, OF PARENT\nREPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDER\nAGREEMENT DATED AS OF FEBRUARY 29, 2000, AND THE VOTING\nTHEREOF ARE SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH\nAGREEMENT MAY BE OBTAINED AT THE PRINCIPAL EXECUTIVE OFFICES\nOF PARENT.\"; and Parent will return such certificate\ncontaining such inscription to the Parent Stockholders within\nthree business days following Parent's receipt thereof.\n\n          SECTION 5.16. Termination of Agreements. Target\nshall cause all provisions of all purchase agreements,\nstockholder agreements, registration rights agreements,\ninvestors' rights agreements, co-sale agreements, rights of\nfirst refusal and similar agreements between any stockholder\nof Target and Target to terminate and be of no further force\nand effect upon consummation of the Merger. A list of all of\nsuch agreements is set forth on Section 5.16 of the Target\nDisclosure Schedule.\n\n          SECTION 5.17. Resignations. Prior to the Effective\nTime, Target shall cause each member of its Board of\nDirectors to execute and deliver a letter effectuating his or\nher resignation as a director of such Board effective\nimmediately prior to the Effective Time.\n\n          SECTION 5.18. Composition of Board of Directors of\nParent. At or prior to the Effective Time, Parent shall take\nall action necessary to cause to be appointed to the Board of\nDirectors of Parent as of the Effective Time the two\ndesignees of Target referenced on Schedule I hereto in\naccordance with the terms set forth in such Schedule.\n\n\n          ARTICLE VI\n\n          Conditions Precedent\n\n          SECTION 6.01. Conditions to Each Party's Obli\ngation To Effect the Merger. The respective obligation of\neach party to effect the Merger is subject to the satisfac\ntion or waiver on or prior to the Closing Date of the\nfollowing conditions:\n\n          (a) Stockholder Approval. The Target Stockholder\n     Approval and the Parent Stockholder Approval shall have\n     been obtained.\n\n\n\n\n\n                                                           59\n\n\n          (b) HSR Act. The waiting period (and any extension\n     thereof) applicable to the Merger under the HSR Act\n     shall have been terminated or shall have expired.\n\n          (c) No Litigation. No judgment, order, decree,\n     statute, law, ordinance, rule or regulation, entered,\n     enacted, promulgated, enforced or issued by any court or\n     other Governmental Entity of competent jurisdiction or\n     other legal restraint or prohibition (collectively,\n     \"Restraints\") shall be in effect, and there shall not be\n     pending or threatened any suit, action or proceeding by\n     any Governmental Entity (i) preventing the consummation\n     of the Merger or (ii) prohibiting or limiting the\n     ownership or operation by Target or Parent and Parent's\n     subsidiaries of any material portion of the business or\n     assets of Target or Parent and Parent's subsidiaries\n     taken as a whole, or compelling Target or Parent and\n     Parent's subsidiaries to dispose of or hold separate any\n     material portion of the business or assets of Target or\n     Parent and Parent's subsidiaries taken as a whole, as a\n     result of the Merger or any of the other transactions\n     contemplated by this Agreement, the Target Stockholder\n     Agreement or the Parent Stockholder Agreement; provided,\n     however, that each of the parties shall have used its\n     reasonable efforts to prevent the entry of any such\n     Restraints and to appeal as promptly as possible any\n     such Restraints that may be entered.\n\n          (d) Form S-4. The Form S-4 shall have become\n     effective under the Securities Act and shall not be the\n     subject of any stop order or proceedings seeking a stop\n     order.\n\n          (e) Nasdaq Quotation. The shares of Parent Common\n     Stock issuable to Target's stockholders as contemplated\n     by this Agreement shall have been approved for quotation\n     on Nasdaq, subject to official notice of issuance.\n\n          SECTION 6.02. Conditions to Obligations of Parent\nand Sub. The obligation of Parent and Sub to effect the\nMerger is further subject to satisfaction or waiver of the\nfollowing conditions:\n\n          (a) Representations and Warranties. Each of the\n     representations and warranties of Target set forth in\n     this Agreement, disregarding all qualifications and\n     exceptions contained therein relating to materiality or\n     material adverse effect, shall be true and correct as of\n     the date hereof and as of the Effective Time, with the\n     same effect as if made at and as of such time (except to\n     the extent such representations and\n\n\n\n\n\n                                                           60\n\n\n     warranties were expressly made as of an earlier date, in\n     which case such representations and warranties shall be\n     true and correct as of such earlier date), except where\n     the failure of such representations and warranties to be\n     true and correct would not, individually or in the\n     aggregate, be reasonably likely to have a material\n     adverse effect on Target. Parent shall have received a\n     certificate signed on behalf of Target by the chief\n     executive officer of Target to such effect.\n\n          (b) Performance of Obligations of Target. Target\n     shall have performed in all material respects all\n     obligations required to be performed by it under this\n     Agreement at or prior to the Closing Date. Parent shall\n     have received a certificate signed on behalf of Target\n     by the chief executive officer of Target to such effect.\n\n          (c) Parent shall have received from Cravath, Swaine\n     &amp; Moore, counsel to Parent, on the date on which the\n     Form S-4 is declared effective by the SEC and on the\n     Closing Date, an opinion, in each case dated as of such\n     respective date and stating that the Merger will qualify\n     for U.S. federal income tax purposes as a reorganization\n     within the meaning of Section 368(a) of the Code. The\n     issuance of such opinion shall be conditioned upon the\n     receipt by such tax counsel of customary representation\n     letters from each of Target, Sub and Parent, in each\n     case, in the form and substance attached hereto as\n     Exhibits B-1 and B-2.\n\n          SECTION 6.03. Conditions to Obligations of Target.\nThe obligation of Target to effect the Merger is further\nsubject to satisfaction or waiver of the following\nconditions:\n\n          (a) Representations and Warranties. Each of the\n     representations and warranties of Parent and Sub set\n     forth in this Agreement, disregarding all qualifications\n     and exceptions contained therein relating to materiality\n     or material adverse effect, shall be true and correct as\n     of the date hereof and as of the Effective Time, with\n     the same effect as if made at and as of such time\n     (except to the extent such representations and\n     warranties were expressly made as of an earlier date, in\n     which case such representations and warranties shall be\n     true and correct as of such earlier date), except where\n     the failure of such representations and warranties to be\n     true and correct would not, individually or in the\n     aggregate, be reasonably likely to have a material\n     adverse effect on Parent. Target shall have received a\n     certificate\n\n\n\n\n\n                                                           61\n\n\n     signed on behalf of Parent by an authorized signatory of\n     Parent to such effect.\n\n          (b) Performance of Obligations of Parent and Sub.\n     Parent and Sub shall have performed in all material\n     respects all obligations required to be performed by\n     them under this Agreement at or prior to the Closing\n     Date. Target shall have received a certificate signed on\n     behalf of Parent by an authorized signatory of Parent to\n     such effect.\n\n          (c) Tax Opinion. Target shall have received from\n     Cooley Godward LLP, counsel to Target, on the date on\n     which the Form S-4 is declared effective by the SEC and\n     on the Closing Date, an opinion, in each case dated as\n     of such respective date and stating that the Merger will\n     qualify for U.S. federal income tax purposes as a\n     reorganization within the meaning of Section 368(a) of\n     the Code. The issuance of such opinion shall be\n     conditioned upon the receipt by such tax counsel of\n     customary representation letters from each of Target,\n     Sub and Parent, in each case, in the form and substance\n     attached hereto as Exhibits B-1 and B-2.\n\n          SECTION 6.04. Frustration of Closing Conditions.\nNone of Parent, Sub or Target may rely on the failure of any\ncondition set forth in Section 6.01, 6.02 or 6.03, as the\ncase may be, to be satisfied if such failure was caused by\nsuch party's failure to use reasonable efforts to consummate\nthe Merger and the other transactions contemplated by this\nAgreement, the Target Stockholder Agreement and the Parent\nStockholder Agreement, as required by and subject to Section\n5.05.\n\n\n                         ARTICLE VII\n\n              Termination, Amendment and Waiver\n\n          SECTION 7.01. Termination. This Agreement may be\nterminated at any time prior to the Effective Time,\nnotwithstanding any requisite approval and adoption of this\nAgreement by the stockholders of Parent, Sub or Target:\n\n          (a) by mutual written consent of Parent and Target;\n\n          (b) by either Parent or Target:\n\n               (i) if the Merger shall not have been\n          consummated by August 31, 2000; provided, however,\n          that the right to terminate this Agreement pursuant\n          to this Section 7.01(b)(i) shall not be\n\n\n\n\n\n                                                           62\n\n\n          available to any party whose failure to perform any\n          of its obligations under this Agreement results in\n          the failure of the Merger to be consummated by such\n          time;\n\n               (ii) if (A) the Target Stockholder Approval\n          shall not have been obtained at a Target\n          Stockholders Meeting duly convened therefor or at\n          any adjournment or postponement thereof or (B) the\n          Parent Stockholder Approval shall not have been\n          obtained at a Parent Stockholders Meeting duly\n          convened therefor or at any adjournment or\n          postponement thereof; or\n\n               (iii) if any Restraint having any of the\n          effects set forth in Section 6.01(c) shall be in\n          effect and shall have become final and nonappeal\n          able; provided that the party seeking to terminate\n          this Agreement pursuant to this Section\n          7.01(b)(iii) shall have used reasonable efforts to\n          prevent the entry of and to remove such Restraint;\n\n               (c) by Parent, if Target shall have breached\n          or failed to perform in any material respect any of\n          its representations, warranties, covenants or other\n          agreements contained in this Agreement, which\n          breach or failure to perform (A) would give rise to\n          the failure of a condition set forth in Section\n          6.02(a) or (b), and (B) is incapable of being or\n          has not been cured by Target within 30 calendar\n          days after giving written notice to Target of such\n          breach or failure to perform; or\n\n               (d) by Target, if Parent shall have breached\n          or failed to perform in any material respect any of\n          its representations, warranties, covenants or other\n          agreements contained in this Agreement, which\n          breach or failure to perform (A) would give rise to\n          the failure of a condition set forth in Section\n          6.03(a) or (b), and (B) is incapable of being or\n          has not been cured by Parent within 30 calendar\n          days after giving written notice to Parent of such\n          breach or failure to perform.\n\n          SECTION 7.02. Effect of Termination. In the event\nof termination of this Agreement by either Target or Parent\nas provided in Section 7.01, this Agreement shall forthwith\nbecome void and have no effect, without any liability or\nobligation on the part of Parent or Target, other than the\nprovisions of Section 3.01(o), the last sentence of Section\n5.04, Section 5.09, this Section 7.02 and Article VIII, which\nprovisions survive such termination, and except to the extent\nthat such termination results from the willful and material\nbreach by a party of any of its\n\n\n\n\n\n                                                           63\n\n\nrepresentations, warranties, covenants or agreements set\nforth in this Agreement.\n\n          SECTION 7.03. Amendment. This Agreement may be\namended by the parties at any time prior to the Effective\nTime; provided, however, that after the Target Stockholder\nApproval or the Parent Stockholder Approval has been\nobtained, there shall not be made any amendment that by law\nrequires further approval by the stockholders of Target or\nParent without the further approval of such stockholders.\nThis Agreement may not be amended except by an instrument in\nwriting signed on behalf of each of the parties.\n\n          SECTION 7.04. Extension; Waiver. At any time prior\nto the Effective Time, a party may (a) extend the time for\nthe performance of any of the obligations or other acts of\nthe other parties, (b) waive any inaccuracies in the\nrepresentations and warranties of the other parties contained\nin this Agreement or in any document delivered pursuant to\nthis Agreement or (c) subject to the proviso of Section 7.03,\nwaive compliance by the other party with any of the\nagreements or conditions contained in this Agreement. Any\nagreement on the part of a party to any such extension or\nwaiver shall be valid only if set forth in an instrument in\nwriting signed on behalf of such party. The failure of any\nparty to this Agreement to assert any of its rights under\nthis Agreement or otherwise shall not constitute a waiver of\nsuch rights.\n\n          SECTION 7.05. Procedure for Termination, Amendment,\nExtension or Waiver. A termination of this Agreement pursuant\nto Section 7.01, an amendment of this Agreement pursuant to\nSection 7.03 or an extension or waiver pursuant to Section\n7.04 shall, in order to be effective, require, in the case of\nParent or Target, action by its Board of Directors or, with\nrespect to any amendment to this Agreement, the duly\nauthorized committee of its Board of Directors to the extent\npermitted by law.\n\n\n                         ARTICLE VIII\n\n                      General Provisions\n\n          SECTION 8.01. Nonsurvival of Representations and\nWarranties. None of the representations and warranties in\nthis Agreement or in any instrument delivered pursuant to\nthis Agreement shall survive the Effective Time. This Section\n8.01 shall not limit any covenant or agreement of the parties\nwhich by its terms contemplates performance after the\nEffective Time.\n\n\n\n\n\n                                                           64\n\n\n          SECTION 8.02. Notices. All notices, requests,\nclaims, demands and other communications under this Agree\nment shall be in writing and shall be deemed given if\ndelivered personally, telecopied (which is confirmed) or sent\nby overnight courier (providing proof of delivery) to the\nparties at the following addresses (or at such other address\nfor a party as shall be specified by like notice):\n\n               (a) if to Parent or Sub, to\n\n                           24\/7 Media, Inc.\n                           1250 Broadway, 28th Floor\n                           New York, NY 10001-3701\n\n                           Telecopy No.:  (212) 760-1081\n\n                           Attention:  David Moore\n\n                           with a copy to:\n\n                           Cravath, Swaine &amp; Moore\n                           Worldwide Plaza\n                           825 Eighth Avenue\n                           New York, NY 10019\n\n                           Telecopy No.:  (212) 474-3700\n\n                           Attention:  Robert A. Kindler\n                                       Faiza J. Saeed; and\n\n               (b) if to Target, to\n\n                           Exactis.com, Inc.\n                           707-17th Street, Suite 2850\n                           Denver, CO 80202\n\n                           Telecopy No.:  (303) 675-2399\n\n                           Attention:  E. Thomas Detmer, Jr.\n\n                           with a copy to:\n\n                           Cooley Godward LLP\n                           2595 Canyon Boulevard\n                           Suite 250\n                           Boulder, CO 80302-6737\n\n                           Telecopy No.:  (303) 546-4099\n\n                           Attention:  James C. T. Linfield\n\n\n\n\n\n                                                           65\n\n\n          SECTION 8.03. Definitions. For purposes of this\nAgreement:\n\n          (a) an \"affiliate\" of any person means another\n     person that directly or indirectly, through one or more\n     intermediaries, controls, is controlled by, or is under\n     common control with, such first person, where \"control\"\n     means the possession, directly or indirectly, of the\n     power to direct or cause the direction of the management\n     policies of a person, whether through the ownership of\n     voting securities, by contract, as trustee or executor,\n     or otherwise;\n\n          (b) \"business day\" means any day other than\n     Saturday, Sunday or any other day on which banks are\n     legally permitted to be closed in New York;\n\n          (c) \"knowledge\" of any person which is not an\n     individual means the knowledge of such person's\n     executive officers after reasonable inquiry;\n\n          (d) \"material adverse change\" or \"material adverse\n     effect\" means, when used in connection with Target or\n     Parent, any change, effect, event, occurrence, condition\n     or development or state of facts that is materially\n     adverse to the business (viewed in its entirety),\n     results of operations or financial condition of such\n     party and its subsidiaries taken as a whole, other than\n     any change, effect, event, occurrence, condition,\n     development or state of facts (i) relating to the\n     economy or securities markets in general, (ii) relating\n     to the industries in which such party operates in\n     general or (iii) resulting from this Agreement or the\n     transactions contemplated hereby or the announcement\n     thereof;\n\n          (e) \"person\" means an individual, corporation,\n     partnership, limited liability company, joint venture,\n     association, trust, unincorporated organization or other\n     entity; and\n\n          (f) a \"subsidiary\" of any person means another\n     person, an amount of the voting securities, other voting\n     ownership or voting partnership interests of which is\n     sufficient to elect at least a majority of its Board of\n     Directors or other governing body (or, if there are no\n     such voting interests, 50% or more of the equity\n     interests of which) is owned directly or indirectly by\n     such first person.\n\n          SECTION 8.04. Interpretation. When a reference is\nmade in this Agreement to an Article, Section or Exhibit,\nsuch reference shall be to an Article or Section of, or an\n\n\n\n\n\n                                                           66\n\n\nExhibit to, this Agreement unless otherwise indicated. The\ntable of contents and headings contained in this Agreement\nare for reference purposes only and shall not affect in any\nway the meaning or interpretation of this Agreement. When\never the words \"include\", \"includes\" or \"including\" are used\nin this Agreement, they shall be deemed to be followed by the\nwords \"without limitation\". The words \"hereof\", \"herein\" and\n\"hereunder\" and words of similar import when used in this\nAgreement shall refer to this Agreement as a whole and not to\nany particular provision of this Agreement. All terms defined\nin this Agreement shall have the defined meanings when used\nin any certificate or other document made or delivered\npursuant hereto unless otherwise defined therein. The\ndefinitions contained in this Agreement are applicable to the\nsingular as well as the plural forms of such terms and to the\nmasculine as well as to the feminine and neuter genders of\nsuch term. Any agreement, instrument or statute defined or\nreferred to herein or in any agreement or instrument that is\nreferred to herein means such agree ment, instrument or\nstatute as from time to time amended, modified or\nsupplemented, including (in the case of agree ments or\ninstruments) by waiver or consent and (in the case of\nstatutes) by succession of comparable successor statutes and\nreferences to all attachments thereto and instruments\nincorporated therein. References to a person are also to its\npermitted successors and assigns.\n\n          SECTION 8.05. Counterparts. This Agreement may be\nexecuted in one or more counterparts, all of which shall be\nconsidered one and the same agreement and shall become\neffective when one or more counterparts have been signed by\neach of the parties and delivered to the other parties.\n\n          SECTION 8.06. Entire Agreement; No Third-Party\nBeneficiaries. This Agreement (including the documents and\ninstruments referred to herein), the Target Stockholder\nAgreement, the Parent Stockholder Agreement, the Employment\nAgreements, the Lock-Up Agreements and the Confidentiality\nAgreement (a) constitute the entire agreement, and supersede\nall prior agreements and understandings, both written and\noral, among the parties with respect to the subject matter of\nthis Agreement and (b) except for the provisions of Article\nII, Section 5.06, and Section 5.08, are not intended to\nconfer upon any person other than the parties any rights or\nremedies.\n\n          SECTION 8.07. Governing Law. This Agreement shall\nbe governed by, and construed in accordance with, the laws of\nthe State of Delaware, regardless of the laws that might\notherwise govern under applicable principles of conflict of\nlaws thereof.\n\n\n\n\n\n                                                           67\n\n\n          SECTION 8.08. Assignment. Neither this Agreement\nnor any of the rights, interests or obligations under this\nAgreement shall be assigned, in whole or in part, by\noperation of law or otherwise by any of the parties hereto\nwithout the prior written consent of the other parties. Any\nassignment in violation of the preceding sentence shall be\nvoid. Subject to the preceding two sentences, this Agree ment\nwill be binding upon, inure to the benefit of, and be\nenforceable by, the parties and their respective successors\nand assigns.\n\n          SECTION 8.09. Enforcement. Each of the parties\nhereto agrees that irreparable damage would occur and that\nthe parties would not have any adequate remedy at law in the\nevent that any of the provisions of this Agreement were not\nperformed in accordance with their specific terms or were\notherwise breached. It is accordingly agreed that the parties\nshall be entitled to an injunction or injunctions to prevent\nbreaches of this Agreement and to enforce specifi cally the\nterms and provisions of this Agreement in any federal court\nlocated in the State of Delaware or in Delaware state court,\nthis being in addition to any other remedy to which they are\nentitled at law or in equity. In addition, each of the\nparties hereto (a) consents to submit itself to the personal\njurisdiction of any federal court located in the State of\nDelaware or any Delaware state court in the event any dispute\narises out of this Agreement or any of the transactions\ncontemplated by this Agreement, (b) agrees that it will not\nattempt to deny or defeat such personal jurisdiction by\nmotion or other request for leave from any such court and (c)\nagrees that it will not bring any action relating to this\nAgreement or any of the trans actions contemplated by this\nAgreement in any court other than a federal court sitting in\nthe State of Delaware or a Delaware state court.\n\n          SECTION 8.10. Severability. If any term or other\nprovision of this Agreement is invalid, illegal or incapable\nof being enforced by any rule of law or public policy, all\nother conditions and provisions of this Agreement shall\nnevertheless remain in full force and effect. Upon such\ndetermination that any term or other provision is invalid,\nillegal or incapable of being enforced, the parties hereto\nshall negotiate in good faith to modify this Agreement so as\nto effect the original intent of the parties as closely as\npossible to the fullest extent permitted by applicable law in\nan acceptable manner to the end that the transactions\ncontemplated hereby are fulfilled to the extent possible.\n\n\n\n\n\n                                                           68\n\n\n          IN WITNESS WHEREOF, Parent, Sub and Target have\ncaused this Agreement to be signed by their respective\nofficers thereunto duly authorized, all as of the date first\nwritten above.\n\n                              24\/7 MEDIA, INC.,\n\n                              by \/s\/ C. Andrew Johns\n                                ---------------------------\n                                Name:  C. Andrew Johns\n                                Title: Executive Vice President\n\n\n                              EVERGREEN ACQUISITION SUB CORP.,\n\n                              by \/s\/ C. Andrew Johns\n                                ---------------------------\n                                Name:  C. Andrew Johns\n                                Title: Executive Vice President\n\n\n                              EXACTIS.COM, INC.,\n\n                              by \/s\/ E. Thomas Detmer, Jr.\n                                ----------------------------\n                                Name:E. Thomas Detmer, Jr.\n                                Title:Chief Executive Officer\n\n\n\n\n                                                                         ANNEX I\n                                                         TO THE MERGER AGREEMENT\n\n\n\n                                          Index of Defined Terms\n\nTerm Page\n\nAccounting Rules..................13 Parent Stockholder\nAdjusted Option...................55   Agreement.......................2\naffiliate.........................69 Parent Stockholder\nAgreement......................... 1   Approval        ...............40\nbusiness day......................70 Parent SEC Documents.............32\nCertificate of Merger............. 3 Parent Stockholder\nCertificates...................... 5          Approval................40\nClosing........................... 3 Parent Stockholders...............2\nClosing Date...................... 3 Parent Stockholders\nCode.............................  2          Meeting.................52\nConfidentiality Agreement.........53 person...........................70\ncontrol...........................69 Policy Launch Data...............27\nD &amp; O Insurance...................59 Primary Target Executives........18\nData Collection and Security         Privacy Statement................27\n  Policy..........................41 Proxy Statement..................12\nDGCL.............................. 2 Real Estate Transfer Taxes.......60\nEffective Time.................... 3 Release..........................16\nEmployment Agreements..............2 Restraints.......................63\nEnvironmental Law.................16 SARs..............................9\nERISA.............................16 SEC..............................12\nERISA Affiliate...................17 Securities Act...................17\nExchange Act......................12 Sub...............................1\nExchange Agent.................... 5 subsidiary.......................70\nExchange Fund..................... 5 Surviving Corporation.............2\nExchange Ratio.................... 4 Takeover Proposal................49\nForm S-4..........................13 Target........................... 1\nGAAP..............................13 Target Authorized Preferred\nGovernmental Entity...............12   Stock...........................9\nHazardous Materials...............16 Target Benefit Agreements........16\nHSR Act...........................12 Target Benefit Plans.............16\nIntellectual Property                Target Common Stock.............. 1\n  Rights..........................22 Target Disclosure Schedule....... 8\nknowledge.........................70 Target Filed SEC Documents.......14\nLiens.............................10 Target Intellectual Property\nLock-Up Agreements.................2          Rights..................22\nmaterial adverse change...........70 Target Pension Plans.............16\nmaterial adverse effect...........70 Target Permits...................15\nMaximum Premium...................59 Target SEC Documents.............12\nMerger.............................1 Target Stock Options..............9\nMerger Consideration...............4 Target Stock Plans................9\nNasdaq............................31 Target Stockholder\nParent.............................1   Agreement.......................1\nParent Authorized Preferred          Target Stockholder\n  Stock...........................30          Approval................21\nParent Benefit Agreements.........36 Target Stockholders\nParent Benefit Plans..............35          Meeting.................52\nParent Common Stock................4 taxes............................21\nParent Disclosure Schedule........29 Terms and Conditions.............28\nParent Filed SEC Documents........33 Warrants..........................9\nParent Intellectual Property         Year 2000 Compliant..............24\n  Rights..........................40\nParent Pension Plans..............35\nParent Permits....................34\n\n\n\n[996420.5:wpc5:03\/13\/2000--5:14p]\n\n\n\n\n\n\n\n\n\n                                                    EXHIBIT A\n                                      TO THE MERGER AGREEMENT\n\n\n\n\n                   Form of Affiliate Letter\n\n\nDear Sirs:\n\n          The undersigned, a holder of shares of common stock,\npar value $0.01 per share (\"Target Common Stock\"), of\nExactis.com, Inc., a Delaware corporation (\"Target\"), is entitled\nto receive in connection with the merger (the \"Merger\") of a\nsubsidiary of 24\/7 Media, Inc., a Delaware corporation\n(\"Parent\"), with and into Target, securities of Parent, as the\nparent of the surviving corporation in the Merger (the \"Parent\nSecurities\"). The undersigned acknowledges that the undersigned\nmay be deemed an \"affiliate\" of Target within the meaning of Rule\n145 (\"Rule 145\") promulgated under the Securities Act of 1933\n(the \"Securities Act\") by the Securities and Exchange Commission\n(the \"SEC\"), although nothing contained herein should be\nconstrued as an admission of such fact.\n\n          If in fact the undersigned were an affiliate under the\nSecurities Act, the undersigned's ability to sell, assign or\ntransfer the Parent Securities received by the undersigned in\nexchange for any shares of Target Common Stock in connection with\nthe Merger may be restricted unless such transaction is\nregistered under the Securities Act or an exemption from such\nregistration is available. The undersigned understands that such\nexemptions are limited and the undersigned has obtained or will\nobtain advice of counsel as to the nature and conditions of such\nexemptions, including information with respect to the\napplicability to the sale of such securities of Rules 144 and\n145(d) promulgated under the Securities Act. The undersigned\nunderstands that Parent will not be required to maintain the\neffectiveness of any registration statement under the Securities\nAct for the purposes of resale of Parent Securities by the\nundersigned.\n\n          The undersigned hereby represents to and covenants with\nParent that the undersigned will not sell, assign or transfer any\nof the Parent Securities received by the undersigned in exchange\nfor shares of Target Common Stock in connection with the Merger\nexcept (i) pursuant to an effective registration statement under\nthe Securities Act, (ii) in conformity with the volume and other\nlimitations of Rule 145 or (iii) in a transaction which, in the\nopinion of counsel reasonably acceptable to Parent or as\ndescribed in a \"no-action\" or interpretive letter from the Staff\nof the SEC specifically issued with respect to a transaction to\nbe engaged in by the undersigned, is not required to be\nregistered under the Securities Act.\n\n\n\n\n\n                                                                2\n\n\n          In the event of a sale or other disposition by the\nundersigned of Parent Securities pursuant to Rule 145, the\nundersigned will supply Parent with evidence of compliance with\nsuch Rule, in the form of a letter in the form of Annex I hereto\nand the opinion of counsel or no-action letter referred to above.\nThe undersigned understands that Parent may instruct its transfer\nagent to withhold the transfer of any Parent Securities disposed\nof by the undersigned, but that (provided such transfer is not\nprohibited by any other provision of this letter agreement) upon\nreceipt of such evidence of compliance, Parent shall cause the\ntransfer agent to effectuate the transfer of the Parent\nSecurities sold as indicated in such letter.\n\n          Parent covenants that it will take all such actions as\nmay be reasonably available to it to permit the sale or other\ndisposition of Parent Securities by the undersigned under Rule\n145 in accordance with the terms thereof.\n\n          The undersigned acknowledges and agrees that the\nlegends set forth below will be placed on certificates\nrepresenting Parent Securities received by the undersigned in\nconnection with the Merger or held by a transferee thereof, which\nlegends will be removed by delivery of substitute certificates\nupon receipt of an opinion in form and substance reasonably\nsatisfactory to Parent from independent counsel reasonably\nsatisfactory to Parent to the effect that such legends are no\nlonger required for purposes of the Securities Act.\n\n          There will be placed on the certificates for Parent\nSecurities issued to the undersigned, or any substitutions\ntherefor, a legend stating in substance:\n\n          \"The shares represented by this certificate were issued\n     in a transaction to which Rule 145 promulgated under the\n     Securities Act of 1933 (the \"Securities Act\") applies. The\n     shares have not been acquired by the holder with a view to,\n     or for resale in connection with, any distribution thereof\n     within the meaning of the Securities Act. The shares may not\n     be sold, pledged or otherwise transferred except (i)\n     pursuant to an effective registration under the Securities\n     Act, (ii) in conformity with the volume and other limita\n     tions of Rule 145 or (iii) in accordance with an exemption\n     from the registration requirements of the Securities Act.\"\n\n          The undersigned acknowledges that (i) the under signed\nhas carefully read this letter and understands the requirements\nhereof and the limitations imposed upon the\n\n\n\n\n\n                                                                3\n\n\ndistribution, sale, transfer or other disposition of Parent\nSecurities and (ii) the receipt by Parent of this letter is an\ninducement to Parent's obligations to consummate the Merger.\n\n\n                              Very truly yours,\n\n\n\nDated:\n\n\n\n\n\n                                                          ANNEX I\n                                                     TO EXHIBIT A\n\n\n\n\n\n[Name]                                                   [Date]\n\n\n          On , the undersigned sold the securities of 24\/7 Media,\nInc., a Delaware corporation (\"Parent\"), described below in the\nspace provided for that purpose (the \"Securities\"). The\nSecurities were received by the undersigned in connection with\nthe merger of a subsidiary of Parent with and into Exactis.com,\nInc., a Delaware corporation.\n\n          Based upon the most recent report or statement filed by\nParent with the Securities and Exchange Commission, the\nSecurities sold by the undersigned were within the prescribed\nlimitations set forth in paragraph (e) of Rule 144 promulgated\nunder the Securities Act of 1933 (the \"Securities Act\").\n\n          The undersigned hereby represents that the Securities\nwere sold in \"brokers' transactions\" within the meaning of\nSection 4(4) of the Securities Act or in transactions directly\nwith a \"market maker\" as that term is defined in Section 3(a)(38)\nof the Securities Exchange Act of 1934, as amended. The\nundersigned further represents that the undersigned has not\nsolicited or arranged for the solicitation of orders to buy the\nSecurities, and that the undersigned has not made any payment in\nconnection with the offer or sale of the Securities to any person\nother than to the broker who executed the order in respect of\nsuch sale.\n\n\n                                       Very truly yours,\n\n\n\n\n\n    [Space to be provided for description of the Securities.]\n\n\n\n\n\n                                                      EXHIBIT B-1\n                                          TO THE MERGER AGREEMENT\n\n\n\n\n            Form of Target's Tax Representation Letter\n\n\n                      [Letterhead of Target]\n\n\n\n\n\n                                                           [Date]\n\n\nCravath, Swaine &amp; Moore\nWorldwide Plaza\n825 Eighth Avenue\nNew York, New York 10019\n\nCooley Godward LLP\n2595 Canyon Boulevard\nSuite 250\nBoulder, CO 80302-6737\n\nLadies and Gentlemen:\n\n          In connection with the opinions to be delivered\npursuant to Sections 6.02(d) and 6.03(c) of the Agreement and\nPlan of Merger (the \"Merger Agreement\") dated as of February 29,\n2000, by and among 24\/7 Media, Inc., a Delaware corporation\n(\"Parent\"), Evergreen Acquisition Sub Corp., a Delaware\ncorporation and a wholly owned subsidiary of Parent (\"Sub\"), and\nExactis.com, Inc., a Delaware corporation (the \"Target\"), and in\nconnection with the filing with the Securities Exchange\nCommission (the \"SEC\") of the registration statement on Form S-4\n(the \"Registration Statement\") relating to the Merger Agreement,\nwhich includes the proxy statement\/prospectus of Parent and\nTarget, the undersigned certifies and represents on behalf of\nTarget, after due inquiry and investigation (including\nconsultation with Target's counsel and auditors regarding the\nmeaning of, and factual support for, such representations if and\nto the extent Target's management deems necessary), as follows\n(any capitalized term used but not defined herein having the\nmeaning given to such term in the Merger Agreement):\n\n          1. The facts relating to the contemplated merger (the\n\"Merger\") of Sub with and into Target as described in the\nRegistration Statement and the documents described in the\nRegistration Statement are and, as of the Effective\n\n\n\n\n\n                                                                2\n\n\nTime, will be, insofar as such facts pertain to Target, true,\ncorrect and complete in all material respects. The Merger will be\nconsummated substantially in accordance with the Merger Agreement\nand none of the material terms and conditions therein has been or\nwill be modified.\n\n          2. The formula set forth in the Merger Agreement\npursuant to which each issued and outstanding share of common\nstock, par value $.01 per share, of Target, (the \"Target Common\nStock\") will be converted into 0.60 of a common share, par value\n.01 per share, of Parent (\"Parent Common Stock\") is the result of\narm's length bargaining.\n\n          3. Cash payments to be made to stockholders of Target\nin lieu of fractional shares of Parent Common Stock that would\notherwise be issued to such stockholders in the Merger will be\nmade for the purpose of saving Parent the expense and\ninconvenience of issuing and transferring fractional shares of\nParent Common Stock, and do not represent separately bargained\nfor consideration. The total cash consideration that will be paid\nin the transaction to Target stockholders instead of issuing\nfractional shares of Parent Common Stock will not exceed [one\npercent (1%)] of the total consideration that will be issued in\nthe transaction to the Target stockholders in exchange for their\nshares of Target Common Stock. The fractional share interests of\neach Target stockholder will be aggregated, and no Target\nstockholder will receive cash in an amount equal to or greater\nthan the value of one full share of Parent Common Stock.\n\n          4. (i) Neither Target nor any corporation \"related\" to\nTarget has acquired or has any present plan or intention to\nacquire any Target Common Stock in contemplation of the Merger,\nor otherwise as part of a plan of which the Merger is a part.\n\n          (ii) For purposes of this representation, two\ncorporations shall be treated as related to one another if\nimmediately prior to or immediately after the Merger, (a) the\ncorporations are members of the same affiliated group (within the\nmeaning of Section 1504 of the Internal Revenue Code of 1986, as\namended (the \"Code\"), but determined without regard to Section\n1504(b) of the Code) or (b) one corporation owns 50% or more of\nthe total combined voting power of all classes of stock of the\nother corporation that are entitled to vote or 50% or more of the\ntotal value of shares of all classes of stock of the other\ncorporation (applying the attribution rules of Section 318 of the\nCode, as modified pursuant to Section 304(c)(3)(B) of the Code).\n\n\n\n\n\n                                                                3\n\n\n          5. Target has not made, and does not have any present\nplan or intention to make, any distributions (other than\ndividends made in the ordinary course of business) prior to, in\ncontemplation of or otherwise in connection with, the Merger.\n\n          6. Except for Transfer Taxes and filing fees with\nrespect to the Proxy Statement and the Form S-4 and the HSR Act,\nParent, Sub, Target and holders of Target Common Stock will each\npay their respective expenses, if any, incurred in connection\nwith the Merger. Except with respect to Transfer Taxes, Target\nhas not agreed to assume, nor will it directly or indirectly\nassume, any expense or other liability, whether fixed or\ncontingent, of any holder of Target Common Stock nor, to the best\nknowledge of (but not pursuant to due inquiry or investigation\nby) the management of Target, will any Target Common Stock\nacquired by Parent in the Merger be subject to any liabilities.\n\n          7. Immediately following the Merger, Target will hold\n(i) at least 90% of the fair market value of the net assets and\nat least 70% of the fair market value of the gross assets that\nwere held by Target immediately prior to the Merger and (ii) at\nleast 90% of the fair market value of the net assets and at least\n70% of the fair market value of the gross assets that were held\nby Sub immediately prior to the Merger. For purposes of this\nrepresentation, amounts paid to stockholders who receive cash or\nother property (including cash in lieu of fractional shares of\nParent Common Stock) in connection with the Merger, assets of\nTarget used to pay reorganization expenses, assets disposed of by\nTarget or Sub (other than assets transferred from Sub to Target\nin the Merger and asset transfers described in both Section\n368(1)(2)(C) of the Code and Treasury Regulations Section\n1.368-2(k)(2)) prior to or subsequent to the Merger and in\ncontemplation thereof (including without limitation, any asset\ndisposed of by Target, other than in the ordinary course of\nbusiness, pursuant to a plan or intent existing during the period\nbeginning with the commencement of negotiations (whether formal\nor informal) with Parent regarding the Merger (the \"Pre-Merger\nPeriod\") and ending at the Effective Time, except to the extent\nproceeds of such sale are retained in Target or Sub as the case\nmay be, and all redemptions and distributions made by Target\n(other than dividends made in the ordinary course of business)\nimmediately preceding, or in contemplation of, the Merger will be\nincluded as assets held by Target immediately prior to the\nMerger.\n\n          8. Except as provided in the Merger Agreement,\nimmediately prior to the time of the Merger, the only class of\nstock of the Company that will be outstanding will be the Target\nCommon Stock and Target will not have outstanding any\n\n\n\n\n\n                                                                4\n\n\nwarrants, options, convertible securities or any other type of\nright pursuant to which any person could acquire Target Common\nStock.\n\n          9. In connection with the Merger, all Target Common\nStock will be converted solely into Parent Common Stock (except\nfor cash paid in lieu of fractional shares of Parent Common\nStock). The shares of Target Common Stock converted into Parent\nCommon Stock will represent Control of Target. As used herein,\n\"Control\" shall consist of direct ownership of shares of stock\npossessing at least eighty percent (80%) of the total combined\nvoting power of shares of all classes of stock entitled to vote\nand at least eighty percent (80%) of the total number of shares\nof each other class of stock of Target. For purposes of\ndetermining Control, a person shall not be considered to own\nshares of voting stock if rights to vote such shares (or to\nrestrict or otherwise control the voting of such shares) are held\nby a third party (including a voting trust) other than an agent\nof such person. For purposes of this representation, Target\nCommon Stock redeemed for cash or other property furnished,\ndirectly or indirectly, actually or constructively, by Parent or\na person related to Parent will be considered as exchanged for\nother than Parent Common Stock. The total market value of all\nconsideration other than shares of Parent Common Stock that will\nbe paid for shares of Target stock in connection with the Merger\n(including without limitation cash paid to Target stockholders in\nlieu of fractional shares) will be less than [ten percent (10%)]\nof the aggregate fair market value of shares of Target stock\noutstanding immediately prior to the Merger.\n\n          10. Target is not an investment company as defined in\nSection 368(a)(2)(F)(iii) and (iv) of the Code.\n\n          11. Target will not take, and, to the best knowledge of\nthe management of Target, there is no present plan or intention\nby stockholders of Target to take, any position on any Federal,\nstate or local income or franchise tax return, or take any other\ntax reporting position, that is inconsistent with the treatment\nof the Merger as a reorganization within the meaning of Section\n368(a) of the Code, unless otherwise required by a\n\"determination\" (as defined in Section 1313(a)(1) of the Code) or\nby applicable state or local tax law (and then only to the extent\nrequired by such applicable state or local tax law).\n\n          12. None of the compensation to be received by any\nstockholder-employee or stockholder-independent contractor of\nTarget in respect of periods ending at or prior to the Effective\nTime will represent separate consideration for, or is allocable\nto, any of its Target Common Stock. None of the Parent Common\nStock that will be\n\n\n\n\n\n                                                                5\n\n\nreceived by any stockholder-employees or stockholder- independent\ncontractor of Target in the Merger represents separately\nbargained for consideration which is allocable to any employment\nagreement, consulting agreement, covenant not to compete, release\nor other similar arrangement. The compensation paid to any\nstockholder-employees or stockholder-independent contractors of\nTarget will be for services actually rendered and will be\ncommensurate with amounts paid to third parties bargaining at\narm's length for similar services.\n\n          13. There is no intercorporate indebtedness existing\nbetween Parent (or any of its subsidiaries, including Sub) and\nTarget (or any of its subsidiaries) that was issued or acquired,\nor will be settled, at a discount.\n\n          14. Target is not under the jurisdiction of a court in\na Title 11 or similar case within the meaning of Section\n368(a)(3)(A) of the Code.\n\n          15. The Merger Agreement, the Registration Statement\nand the other documents described in the Registration Statement\nrepresent the entire understanding of Target with respect to the\nMerger.\n\n          16. No assets of Target have been sold, transferred or\notherwise disposed of which would prevent Parent from continuing\nthe \"historic business\" of Target or from using a significant\nportion of the \"historic business assets\" of Target in a business\nfollowing the Merger (as such terms are defined in Treasury\nRegulations Section 1.368-1(d)), and Target intends to continue\nits historic business or use a significant portion of its\nhistoric business assets in a business following the Merger.\n\n          17. As of the time of the Merger, the fair market value\nof the assets of Target will equal or exceed the sum of its\nliabilities, plus the amount of liabilities, if any, to which\nsuch assets are subject.\n\n          18. No holders of Target Common Stock have dissenters'\nrights with respect to the Merger under applicable laws.\n\n          19. Other than in the ordinary course of business or\npursuant to its obligations under the Merger Agreement, Target\nhas made no transfer of any of its assets (including any\ndistribution of assets with respect to, or in redemption of,\nstock) in contemplation of the Merger or during the Pre- Merger\nPeriod. 20. Except for transfers described in both Section\n368(a)(2)(C) of the Code and Treasury Regulations Sections\n1.368-2(k)(2), the Target has no plan or intention\n\n\n\n\n\n                                                                6\n\n\nto sell or otherwise dispose of any of its assets or of any of\nthe assets acquired from Sub in the Merger, except for\ndispositions in made in the ordinary course of business or to pay\nexpenses incurred by Target pursuant to the Merger.\n\n          21. Target's principal reasons for participating in the\nMerger are bona fide business purposes unrelated to Taxes.\n\n          22. Target has no plan, obligation, understanding,\nagreement or intention to issue additional shares of stock after\nthe Merger, or to take any other action, that would result in\nParent losing Control of Target.\n\n          23. The liabilities of Target were incurred in the\nordinary course of Target's business.\n\n          24. The fair market value of the shares of Parent\nCommon Stock received by each stockholder of Target will be\napproximately equal to the fair market value of the shares of\nstock of Target surrendered in exchange therefor and the\naggregate consideration received by stockholders of Target in\nexchange for their shares of Target Common Stock will be\napproximately equal to the fair market value of all the\noutstanding shares of stock of Target immediately prior to the\nMerger.\n\n          25. With respect to each instance, if any, in which\nshares of stock of Target have been purchased by a stockholder of\nParent (a \"Parent Stockholder\") during the Pre-Merger Period (a\n\"Stock Purchase\"): (i) to the knowledge of Target, (A) the Stock\nPurchase was made by such Parent Stockholder on its own behalf,\nrather than as a representative, or for the benefit, of Parent,\n(B) the Stock Purchase was entered into solely to satisfy the\nseparate interests of such Parent Stockholder and the seller and\n(C) the purchase price paid by such Parent Stockholder pursuant\nto the Stock Purchase was the product of arm's length negotiation\nand was funded by such Parent Stockholder's own assets, and such\npurchase price was not advanced and will not be reimbursed,\neither directly or indirectly, by Parent; and (ii) the Stock\nPurchase was not a formal or informal condition to consummation\nof the Merger.\n\n          26. The undersigned is authorized by Target to make all\nthe representations set forth herein.\n\n          The undersigned acknowledges that (i) the opinions to\nbe delivered pursuant to Sections 6.02(d) and 6.03(c) of the\nMerger Agreement will be based on the accuracy of the\nrepresentations set forth herein and on the accuracy of the\nrepresentations and warranties and the satisfaction of the\n\n\n\n\n\n                                                                7\n\n\ncovenants and obligations contained in the Merger Agreement and\nthe various other documents related thereto, and (ii) such\nopinions will be subject to certain limitations and\nqualifications including that it may not be relied upon if any\nsuch representations or warranties are not accurate or if any\nsuch covenants or obligations are not satisfied in all material\nrespects.\n\n          The undersigned acknowledges that such opinions will\nnot address any tax consequences of the Merger or any action\ntaken in connection therewith except as expressly set forth in\nsuch opinions.\n\n          Notwithstanding anything herein to the contrary, the\nundersigned makes no representations regarding any actions or\nconduct of Target pursuant to Parent's exercise of control over\nTarget after the Merger, unless Target's management has actual\nknowledge of such actions or conduct.\n\n          Target undertakes to inform you immediately should any\nof the foregoing statements or representations become untrue,\nincorrect or incomplete in any respect on or prior to the\nEffective Time.\n\n\n                                     Very truly yours,\n\n                                     EXACTIS.COM, INC.,\n\n                                     by\n                                       ----------------------------\n                                       Title:\n\n\n\n\n\n                                                      EXHIBIT B-2\n                                          TO THE MERGER AGREEMENT\n\n\n\n            Form of Parent's Tax Representation Letter\n\n\n                      [Letterhead of Parent]\n\n\n\n\n\n                                                           [Date]\n\n\nCooley Godward LLP\n2595 Canyon Boulevard\nSuite 250\nBoulder, CO 80302-6737\n\nCravath, Swaine &amp; Moore\nWorldwide Plaza\n825 Eighth Avenue\nNew York, New York 10019\n\n\nLadies and Gentlemen:\n\n          In connection with the opinions to be delivered\npursuant to Sections 6.02(d) and 6.03(c) of the Agreement and\nPlan of Merger (the \"Merger Agreement\") dated as of February 29,\n2000, by and among 24\/7 Media, Inc., a Delaware corporation\n(\"Parent\"), Evergreen Acquisition Sub Corp., a Delaware\ncorporation and a wholly owned subsidiary of Parent (\"Sub\"), and\nExactis.com, Inc., a Delaware corporation (\"Target\"), and in\nconnection with the filing with the Securities Exchange\nCommission (the \"SEC\") of the registration statement on Form S-4\n(the \"Registration Statement\") relating to the Merger Agreement,\nwhich includes the proxy statement\/prospectus of Parent and\nTarget, the undersigned certifies and represents on behalf of\nParent and Sub, after due inquiry and investigation (including\nconsultations with Parent's counsel and auditors regarding the\nmeaning of, and factual support for, such representations if and\nto the extent Parent's management deems necessary), as follows\n(any capitalized term used but not defined herein having the\nmeaning given to such term in the Merger Agreement):\n\n          1. The facts relating to the contemplated merger (the\n\"Merger\") of Sub with and into Target as described in\n\n\n\n\n\n                                                                2\n\n\nthe Registration Statement and the documents described in the\nRegistration Statement are and, as of the Effective Time, will\nbe, insofar as such facts pertain to Parent and Sub, true,\ncorrect and complete in all material respects. The Merger will be\nconsummated substantially in accordance with the Merger Agreement\nand none of the material terms and conditions therein has been or\nwill be waived or modified.\n\n          2. The formula set forth in the Merger Agreement\npursuant to which each issued and outstanding share of common\nstock, par value $.01 per share, of Target (the \"Target Common\nStock\") will be converted into 0.60 of a common share, par value\n$.01 per share, of Parent (\"Parent Common Stock\") is the result\nof arm's length bargaining.\n\n          3. Cash payments to be made to stockholders of Target\nin lieu of fractional shares of Parent Common Stock that would\notherwise be issued to such stockholders in the Merger will be\nmade for the purpose of saving Parent the expense and\ninconvenience of issuing and transferring fractional shares of\nParent Common Stock, and do not represent separately bargained\nfor consideration. The total cash consideration that will be paid\nin the transaction to Target stockholders instead of issuing\nfractional shares of Parent Common Stock will not exceed [one\npercent (1%)] of the total consideration that will be issued in\nthe transaction to the Target stockholders in exchange for their\nshares of Target Common Stock. The fractional share interests of\neach Target stockholder will be aggregated, and no Target\nstockholder will receive cash in an amount equal to or greater\nthan the value of one full share of Parent Common Stock.\n\n          4. (i) Parent has no present plan or intention, after,\nbut in connection with, the Merger, to reacquire, or to cause any\ncorporation that is related to Parent to acquire, any Parent\nCommon Stock; provided, however, that Parent may adopt an open\nmarket stock repurchase program that satisfies the requirements\nof Revenue Ruling 99-58. To the best knowledge of the management\nof Parent, no corporation that is \"related\" to Parent has a\npresent plan or intention to purchase any Parent Common Stock\nfollowing the Merger.\n\n          (ii) For purposes of this representation, two\ncorporations shall be treated as related to one another if\nimmediately prior to or immediately after the Merger, (a) the\ncorporations are members of the same affiliated group (within the\nmeaning of Section 1504 of the Internal Revenue Code of 1986, as\namended (the \"Code\"), but determined without regard to Section\n1504(b) of the Code) or (b) one corporation owns 50% or more of\nthe total combined voting power of all classes of stock of the\nother\n\n\n\n\n\n                                                                3\n\ncorporation that are entitled to vote or 50% or more of the total\nvalue of shares of all classes of stock of the other corporation\n(applying the attribution rules of Section 318 of the Code, as\nmodified pursuant to Section 304(c)(3)(B) of the Code).\n\n          5. Parent has no present plan or intention to make any\ndistributions after, but in connection with, the Merger to\nholders of Parent Common Stock (other than dividends made in the\nordinary course of business).\n\n          6. Neither Parent nor Sub (nor any other subsidiary of\nParent) has acquired, or, except as a result of the Merger, will\nacquire, or has owned in the past five years, any Target Common\nStock.\n\n          7. Prior to the Merger, Parent will own all the capital\nstock of Sub. Parent has no plan or intention to cause Target to\nissue additional shares of its capital stock that would result in\nParent ceasing to have \"control\" of Target. As used herein,\n\"Control\" shall consist of direct ownership of shares of stock\npossessing at least eighty percent (80%) of the total combined\nvoting power of shares of all classes of stock entitled to vote\nand at least eighty percent (80%) of the total number of shares\nof each other class of stock of Target. For purposes of\ndetermining Control, a person shall not be considered to own\nshares of voting stock if rights to vote such shares (or to\nrestrict or otherwise control the voting of such shares) are held\nby a third party (including a voting trust) other than an agent\nof such person.\n\n          8. Parent has no present plan or intention, following\nthe Merger, to liquidate Target, to merge Target with and into\nanother corporation, to sell or otherwise dispose of any of the\nstock of Target, to cause Target to distribute to Parent or any\nof its subsidiaries any assets of Target or the proceeds of any\nborrowings incurred by Target, or to cause Target to sell or\notherwise dispose of any of the assets held by Target at the time\nof the Merger, except for dispositions of such assets in the\nordinary course of business and transfers described in Section\n368(a)(2)(C) of the Code or Treasury Regulations Sections\n1.368-1(d) or 1.368-2(k).\n\n          9. Immediately following the Merger, Target will hold\n(i) at least 90% of the fair market value of the net assets and\nat least 70% of the fair market value of the gross assets that\nwere held by Target immediately prior to the Merger and (ii) at\nleast 90% of the fair market value of the net assets and at least\n70% of the fair market value of the gross assets that were held\nby Sub immediately prior to the Merger. For purposes of this\nrepresentation, amounts\n\n\n\n\n\n                                                                4\n\npaid to stockholders who receive cash or other property\n(including cash in lieu of fractional shares of Parent Common\nStock) in connection with the Merger, assets of Target used to\npay reorganization expenses, assets disposed of by Target or Sub\n(other than assets transferred from Sub to Target in the Merger\nand asset transfers described in both Section 368(a)(2)(C) of the\nCode and Treasury Regulations Section 1.368-2(k)(2)) prior to or\nsubsequent to the Merger and in contemplation thereof (including\nwithout limitation any asset disposed of by Target, other than in\nthe ordinary course of business, pursuant to a plan or intent\nexisting during the period beginning with the commencement of\nnegotiations (whether formal or informal) with Parent regarding\nthe Merger (the \"Pre-Merger Period\") and ending at the Effective\nTime, except to the extent proceeds from such sale are retained\nin Target or Sub as the case may be, and all redemptions and\ndistributions made by Target (other than dividends made in the\nordinary course of business) immediately preceding, or in\ncontemplation of, the Merger will be included as assets held by\nTarget immediately prior to the Merger.\n\n          10. Except for Transfer Taxes and filing fees with\nrespect to the Proxy Statement and the Form S-4 and the HSR Act,\nParent, Sub, Target and holders of Target Common Stock will each\npay their respective expenses, if any, incurred in connection\nwith the Merger. Except to the extent specifically contemplated\nunder the Merger Agreement and Target Stockholder Agreement,\nneither Parent nor Sub has paid (directly or indirectly) or has\nagreed to assume any expenses or other liabilities, whether fixed\nor contingent, incurred or to be incurred by Target or any holder\nof Target Common Stock in connection with or as part of the\nMerger or any related transactions nor, to the best knowledge of\n(but not pursuant to due inquiry or investigation by) the\nmanagement of Parent, will any Target Common Stock acquired by\nParent in the Merger be subject to any liabilities.\n\n          11. Following the Merger, Parent intends to cause\nTarget to continue its \"historic business\" or to use a\nsignificant portion of its \"historic business assets\" in a\nbusiness (as such terms are defined in Treasury Regulations\nSection 1.368-1(d)).\n\n          12. Neither Parent nor Sub is an investment company as\ndefined in Section 368(a)(2)(F)(iii) and (iv) of the Code.\n\n          13. Neither Parent nor Sub will take any position on\nany Federal, state or local income or franchise tax return, or\ntake any other tax reporting position, that is inconsistent with\nthe treatment of the Merger as a reorganization within the\nmeaning of Section 368(a) of the\n\n\n\n\n\n                                                                5\n\nCode unless otherwise required by a \"determination\" (as defined\nin Section 1313(a)(1) of the Code) or by applicable state or\nlocal tax law (and then only to the extent required by such\napplicable state or local tax law).\n\n          14. None of the compensation to be received by any\nstockholder-employee or stockholder-independent contractor of\nTarget in respect of periods ending after the Effective Time will\nrepresent separate consideration for, or is allocable to, any of\ntheir Target Common Stock. None of the Parent Common Stock that\nwill be received by any stockholder-employee or\nstockholder-independent contractor of Target in the Merger\nrepresents separately bargained for consideration which is\nallocable to any employment agreement, consulting agreement,\ncovenant not to compete, release or similar arrangement. The\ncompensation paid to any stockholder-employees or\nstockholder-independent contractors of Parent after the Effective\nTime will be for services actually rendered and will be\ncommensurate with amounts paid to third parties bargaining at\narm's length for similar services.\n\n          15. There is no intercorporate indebtedness existing\nbetween Parent (or any of its subsidiaries, including Sub) and\nTarget (or any of its subsidiaries) that was issued or acquired,\nor will be settled, at a discount.\n\n          16. Neither Parent nor Sub is under the jurisdiction of\na court in a Title 11 or similar case. For purposes of the\nforegoing, a \"Title 11 or similar case\" means a case under Title\n11 of the United States Code or a receivership, foreclosure or\nsimilar preceding in a federal or state court.\n\n          17. In connection with the Merger, all Target Common\nStock will be converted solely into Parent Common Stock (except\nfor cash paid in lieu of fractional shares of Parent Common\nStock). The shares of Target Common Stock converted into Parent\nCommon Stock will represent Control of Target. For purposes of\nthis representation, Target Common Stock redeemed for cash or\nother property furnished, directly or indirectly, actually or\nconstructively, by Parent or a person related to Parent will be\nconsidered as acquired by Parent for other than Parent Common\nStock. The total market value of all consideration other than\nshares of Parent Common Stock that will be paid for shares of\nTarget stock in connection with the Merger (including without\nlimitation cash paid to Target stockholders in lieu of fractional\nshares) will be less than [ten percent (10%)] of the aggregate\nfair market value of shares of Target stock outstanding\nimmediately prior to the Merger.\n\n\n\n\n\n                                                                6\n\n          18. The Merger Agreement, the Registration Statement\nand the other documents described in the Registration Statement\nrepresent the entire understanding of Parent and Sub with respect\nto the Merger.\n\n          19. Sub is a corporation newly formed for the purpose\nof participating in the Merger and at no time prior to the Merger\nhas had assets (other than nominal assets contributed upon the\nformation of Sub, which assets will be held by Sub following the\nMerger) or business operations. Prior to the Merger, Parent will\nbe in Control of Sub. As used herein, \"Control\" shall consist of\ndirect ownership of shares of stock possessing at least eighty\npercent (80%) of the total combined voting power of shares of all\nclasses of stock entitled to vote and at least eighty percent\n(80%) of the total number of shares of each other class of stock\nof Sub. For purposes of determining Control, a person shall not\nbe considered to own shares of voting stock if rights to vote\nsuch shares (or to restrict or otherwise control the voting of\nsuch shares) are held by a third party (including a voting trust)\nother than an agent of such person.\n\n          20. The Merger is being undertaken for purposes of\nenhancing the business of Parent and for good and valid business\npurposes of Parent.\n\n          21. No Target stockholder is acting as agent for Parent\nin connection with the Merger or the approval thereof; Parent\nwill not reimburse any Target stockholder for any Target stock\nthat such stockholder may have purchased or for other obligations\nsuch stockholder may have incurred.\n\n          22. The fair market value of the shares of Parent\nCommon Stock received by each stockholder of Target will be\napproximately equal to the fair market value of the shares of\nstock of Target surrendered in exchange therefor and the\naggregate consideration received by stockholders of Target in\nexchange for their shares of Target Common Stock will be\napproximately equal to the fair market value of all the\noutstanding shares of stock of Target immediately prior to the\nMerger.\n\n          23. With respect to each instance, if any, in which\nshares of stock of Target have been purchased by a stockholder of\nParent (a \"Parent Stockholder\") during the Pre-Merger Period (a\n\"Stock Purchase\"): (i) to the knowledge of Parent, (A) the Stock\nPurchase was made by such Parent Stockholder on its own behalf,\nrather than as a representative, or for the benefit, of Parent,\n(B) the Stock Purchase was entered into solely to satisfy the\nseparate interests of such Parent Stockholder and the seller and\n(C) the purchase price paid by such Parent Stockholder\n\n\n\n\n\n                                                                7\n\npursuant to the Stock Purchase was the product of arm's length\nnegotiation and was funded by such Parent Stockholder's own\nassets, and such purchase price was not advanced and will not be\nreimbursed, either directly or indirectly, by Parent; and (ii)\nthe Stock Purchase was not a formal or informal condition to\nconsummation of the Merger.\n\n          24. The undersigned is authorized to make all the\nrepresentations set forth herein on behalf of Parent and Sub.\n\n          The undersigned acknowledges that (i) the opinions to\nbe delivered pursuant to Sections 6.02(d) and 6.03(c) of the\nMerger Agreement will be based on the accuracy of the\nrepresentations set forth herein and on the accuracy of the\nrepresentations and warranties and the satisfaction of the\ncovenants and obligations contained in the Merger Agreement and\nthe various other documents related thereto, and (ii) such\nopinions will be subject to certain limitations and\nqualifications including that it may not be relied upon if any\nsuch representations or warranties are not accurate or if any\nsuch covenants or obligations are not satisfied in all material\nrespects.\n\n          The undersigned acknowledges that such opinions will\nnot address any tax consequences of the Merger or any action\ntaken in connection therewith except as expressly set forth in\nsuch opinions.\n\n          Notwithstanding anything herein to the contrary, the\nundersigned makes no representations regarding any actions or\nconduct of Target prior to the Merger, unless Parent's management\nhas actual knowledge of such actions or conduct.\n\n          Parent undertakes to inform you immediately should any\nof the foregoing statements or representations become untrue,\nincorrect or incomplete in any respect on or prior to the\nEffective Time.\n\n\n                                       Very truly yours,\n\n\n                                       PARENT\n\n                                       by\n                                         ----------------------------\n                                         Name:\n                                         Title:\n\n\n\n\n\n                                                       SCHEDULE I\n                                          TO THE MERGER AGREEMENT\n\n\n\n\n                   Board of Directors of Parent\n\n\n      Name(1)                                         Class of Membership\n      ----                                            -------------------\nAdam Goldman                                                 II(2)\nLinda Fayne Levinson                                         III\n\n\n\n----------------\n\n          (1) If either or both of the individuals set forth in\nthe table are unavailable at the Effective Time to serve as\ndirectors of Parent, Target shall be entitled to substitute in\ntheir place any members of Target's Board of Directors as\nconstituted immediately prior to the date of the Merger\nAgreement; provided that any such new designees must qualify as\nindependent directors under the Nasdaq rules.\n\n          (2) Parent shall take all action to ensure that the\nindividual appointed to serve as a Class II director of Parent\nwill also be included in Parent's slate of directors nominated\nfor election at Parent's 2000 annual meeting of stockholders.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6536],"corporate_contracts_industries":[9503],"corporate_contracts_types":[9622,9626],"class_list":["post-42990","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-247-media-inc","corporate_contracts_industries-services__advertising","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42990"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42990"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42990"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}