{"id":42991,"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-intelligent.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-intelligent","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-24-7-media-inc-and-intelligent.html","title":{"rendered":"Agreement and Plan of Merger &#8211; 24\/7 Media Inc. and Intelligent Interactions Corp."},"content":{"rendered":"<pre>                          AGREEMENT AND PLAN OF MERGER\n\n                                  By and Among\n\n                                24\/7 Media, Inc.,\n\n                         Interactions Acquisition Corp.\n\n                                       and\n\n                      Intelligent Interactions Corporation\n\n\n\n                          AGREEMENT AND PLAN OF MERGER\n\n               AGREEMENT AND PLAN OF MERGER, dated as of April 9, 1998 (this\n\"Agreement\"), among 24\/7 Media, Inc., a Delaware corporation (\"24\/7\"),\nInteractions Acquisition Corp., a Delaware corporation and a wholly-owned\nsubsidiary of 24\/7 (the \"Subsidiary\"), and Intelligent Interactions Corporation\n(\"the Company\"), a Delaware corporation, and each of the stockholders of the\nCompany set forth on the signature pages hereto (each, a \"Seller\").\n\n               WHEREAS, the Boards of Directors of 24\/7, the Subsidiary, and the\nCompany have each approved the merger (the \"Merger\") of the Subsidiary with and\ninto the Company, in accordance with the General Corporation Law of the State of\nDelaware (\"Delaware Law\") and upon the terms and subject to the conditions set\nforth herein; and\n\n               WHEREAS, for federal income tax purposes, it is intended that the\nMerger, as defined herein, shall qualify as a reorganization within the meaning\nof Section 368(c) of the Internal Revenue Code of 1986, as amended (the \"Code\");\n\n               WHEREAS, each Seller is the owner of such number and class(es) of\nshares of capital stock (the \"Shares\") of the Company as is set forth on the\nOwnership Table following the signatures pages hereto (\"Ownership Table\"), such\nShares collectively constituting all of the issued and outstanding shares of\ncapital stock of the Company; and\n\n               NOW, THEREFORE, in consideration of the foregoing and the mutual\ncovenants and agreements herein contained, and intending to be legally bound\nhereby, 24\/7, the Subsidiary, the Company and the Sellers hereby agree as\nfollows:\n\n               1.     The Merger.\n\n               (a) The Merger At the Effective Time (as defined in subparagraph\n1(b) and subject to and upon the terms and conditions of this Agreement and\nDelaware Law, the Subsidiary shall be merged with and into the Company, the\nseparate corporate existence of the Subsidiary shall cease, and the Company\nshall continue as the surviving corporation. The Company as the surviving\ncorporation after the Merger is hereinafter sometimes referred to as the\n\"Surviving Corporation.\"\n\n               (b) Effective Time. As promptly as practicable after the\nsatisfaction or waiver of the conditions set forth in Article VII and after the\nClosing referred to in subparagraph 1(g), the parties hereto shall cause the\nMerger to be consummated by delivering a Certificate of Merger (the \"Certificate\nof Merger\") to the Secretary of State of the State of Delaware, in such form as\nrequired by, and executed in accordance with the relevant provisions of,\nDelaware Law, for filing by the Secretary of State (the time of such filing\nbeing the \"Effective Time\").\n\n\n                                       i\n\n\n\n               (c) Effect of the Merger. At the Effective Time, the effect of\nthe Merger shall be as provided in the applicable provisions of Delaware Law.\nWithout limiting the generality of the foregoing, and subject thereto, at the\nEffective Time all the rights, privileges, powers, franchises, and property of\nthe Subsidiary shall vest in the Surviving Corporation, and all restrictions,\ndisabilities, duties, debts, and liabilities of the Subsidiary shall become the\nrestrictions, disabilities, duties, debts, and liabilities of the Surviving\nCorporation.\n\n               (d) Certificate of Incorporation; By-Laws. At the Effective Time,\nthe Certificate of Incorporation and By-Laws of the Subsidiary shall be the\nCertificate of Incorporation and By-Laws of the Surviving Corporation until\nthereafter amended.\n\n               (e) Directors and Officers. The directors of the Subsidiary\nimmediately prior to the Effective Time shall be the directors of the Surviving\nCorporation and the officers of the Company immediately prior to the Effective\nTime shall be the officers of the Surviving Corporation, in each case until\ntheir respective successors are duly elected or appointed and qualified.\n\n               (f) Conversion of Securities. At the Effective Time, by virtue of\nthe Merger and without any action on the part of 24\/7, the Subsidiary or the\nCompany, or the Sellers, each share of capital stock of the Company shall be\nexchanged for shares of capital stock of 24\/7 (the \"Merger Consideration\") as\nfollows:\n\n                    (i) For each share of common stock, par value $.01 per\nshare, of the Company owned by a Seller and delivered to 24\/7, 24\/7 shall issue\nto such Seller 16.253539 shares of common stock, par value $.01 per share,\n2.303962 Class A Warrants, 2.303962 Class B Warrants and 1.18654 Class C\nWarrants of 24\/7;\n\n                    (ii) for each share of Preferred Stock, Series A Preferred\nStock, Series AA Preferred Stock or Series AAA Preferred Stock of the Company\nowned by a Seller, 24\/7 shall issue to such Seller 18.0644 shares of Series A\nConvertible Voting Preferred Stock, par value $.01 per share (the \"Series A\nStock\"), which Series A Stock shall have the terms and provisions as are set\nforth in 24\/7's Certificate of Incorporation, as amended, a copy of which has\nbeen provided to Seller, and 2.68891 Class A Warrants, 2.68891 Class B Warrants\nand 1.384778 Class C Warrants of 24\/7; provided, however, that the Sellers agree\nto contribute a pro-rata portion of such Class A, B and C Warrants to\nInteractive Capital Partners LLC as more fully described in Section 10 hereof,\nwith the result that Sellers shall receive the number of shares and warrants\nindicated by the Ownership Table; and\n\n                    (iii) In addition, each option to purchase shares of Common\nStock of the Company issued pursuant to the Company's 1996 Equity Incentive Plan\nshall be converted into an option to purchase 16.4964 shares of common stock of\n24\/7, under the terms and pursuant to the conditions of the 24\/7 Media, Inc.\n1998 Stock Incentive Plan, the exercise price per share of\n\n\n                                        2\n\n\n\nsuch options shall be proportionately decreased, and all such options shall vest\nin accordance with their existing vesting schedules.\n\n                    (iv) The shares of common stock, par value $.01 per share of\nthe Subsidiary issued and outstanding immediately prior to the Effective Time\nshall, by virtue of the Merger and without any action on the part of the holder\nthereof, be converted into and become at the Effective Time 100 shares of common\nstock, par value $.01 per share, of the Company.\n\n               (g) Surrender and Payment.\n\n                    (i) Each holder of Shares that have been converted into a\nright to receive the Merger Consideration, upon surrender at Closing of a\ncertificate or certificates representing such shares, together with properly\nexecuted stock powers and stock transfer stamps covering such shares, will be\nentitled to receive the Merger Consideration payable in respect of such shares,\nwhich Merger Consideration shall be delivered at Closing.\n\n                    (ii) After the Effective Time, there shall be no further\nregistration or transfers of Shares outstanding prior to the Effective Time. All\ncertificates representing Shares outstanding prior to the Effective Time shall\nbe presented to 24\/7 at the Closing and shall be canceled and exchanged for the\nMerger Consideration provided for, and in accordance with the procedures set\nforth, in this Agreement.\n\n                    (iii) No fractional shares of 24\/7 capital stock or\nfractional warrants shall be issued upon conversion of Shares. In lieu of any\nfractional share of 24\/7 capital stock or fractional warrant to which the holder\nof Shares would otherwise be entitled, 24\/7 shall round to the nearest whole\nshare of 24\/7 capital stock or nearest whole warrant.\n\n               (h) Closing. The Closing of the transactions contemplated by this\nAgreement (the \"Closing\"), shall be held at the offices of Proskauer Rose LLP,\n1585 Broadway, New York, New York 10036, at 11:00 A.M., New York time, on a date\ndesignated by 24\/7 upon two business days' prior notice (the \"Closing Date\"),\nbut in no event later than April 15, 1998, unless the parties shall agree upon a\nlater date.\n\n        2. Representations and Warranties of the Company and the Sellers. The\nCompany and each Seller severally and not jointly represents, warrants and\nagrees (as to itself only with respect to such Seller's ownership of the Shares\nand its authority to enter into this Agreement) that:\n\n               (a) Ownership and Delivery of the Shares and Execution and Effect\nof Agreement. Each Seller is, and immediately prior to the Closing will be, the\nrecord and beneficial owner of the number and class(es) of Shares set forth\nbelow such Seller's name on the signature pages hereto, free and clear of any\nand all liens, pledges, security interests, options, encumbrances, charges,\nagreements or claims of any kind whatsoever (\"claims\"), other than those\nagreements described in subparagraph 4(d) hereof, which agreements each Seller\nagrees to cause\n\n\n                                        3\n\n\n\nto be terminated upon consummation of the Closing. Each of the Company and the\nSeller has the full right, power and authority to enter into and to perform this\nAgreement and all other agreements, certificates and documents executed or\ndelivered, or to be executed or delivered, by the Company and such Seller in\nconnection herewith including the Stockholders' Agreement and the Registration\nRights Agreement (each defined in subparagraph 7(h) hereof) (collectively, with\nthis Agreement, the \"Company Documents\"). Neither the authorization, execution,\ndelivery nor performance of any of the Company's Documents will violate,\nconflict with, result in a breach of, constitute a default under, or require any\nnotice, consent, approval or order under the Company's organizational documents,\nor, if Seller is an entity, under such Seller's organizational documents. On the\nClosing Date, each Seller will have the full right, power and authority to\nassign, transfer and deliver such Seller's Shares as provided in this Agreement,\nand such delivery will convey to 24\/7 lawful, valid and marketable title to such\nShares, free and clear of any and all claims. This Agreement has been duly\nauthorized, executed and delivered by the Company and the Seller, and the\nCompany's Documents are (or when executed and delivered will be) legal, valid\nand binding obligations of the Company and the Seller, enforceable in accordance\nwith their respective terms, subject to equitable considerations which may be\napplicable to specific performance.\n\n               (b) Organization, Good Standing, Authority. The Company is a\ncorporation duly organized, validly existing and in good standing under the laws\nof the State of Delaware and has full power and authority to own and lease its\nassets and properties and to conduct its business as it is now being conducted.\nThe Company is duly qualified or licensed to do business and is in good standing\nas a foreign corporation under the laws of those jurisdictions listed on\nSchedule 1 hereto, constituting each jurisdiction in which the conduct of its\nbusiness or the ownership or leasing of its assets requires such qualification\nexcept for jurisdictions in which the failure to so qualify would not have a\nmaterial adverse effect on the business and operations of the Company taken as a\nwhole. The copies of the Company's Certificate of Incorporation, as amended\n(certified by the Secretary of State of Delaware), and By-Laws (certified by the\nSecretary of the Company) which have been previously delivered to 24\/7 are\ncorrect and complete.\n\n               (c) Capitalization. Immediately prior to the Closing, the\nauthorized capital stock of the Company will consist of the following:\n\n                    (i) Common Stock: 930,000 shares of common stock, $.01 par\nvalue, of which 230,170 shares will be issued and outstanding.\n\n                    (ii) Preferred Stock: a total of 408,648 shares of Preferred\nStock, $0.01 par value per share, of which 71,870 shares have been designated\nSeries A Preferred Stock, 71,870 shares have been designated Series A-1\nPreferred Stock, 54,150 shares have been designated Series AA Preferred Stock,\n54,150 shares have been designated Series AA-1 Preferred Stock, 78,304 shares\nhave been designated Series AAA Stock and 78,304 shares have been designated\nSeries AAA-1 Preferred Stock. Of all of the authorized shares of Preferred Stock\nlisted above, only 71,870 shares of Series A Preferred Stock, 54,142 shares of\nSeries AA Preferred Stock, and 71,210 shares of Series AAA Preferred Stock are\nissued and outstanding.\n\n\n                                        4\n\n\n\nAll of the outstanding shares of capital stock of the Company are duly\nauthorized, validly issued and outstanding, fully paid and nonassessable. Except\nas set forth in this Subparagraph 2(c), there are no outstanding shares of\ncapital stock or other equity or debt securities of the Company.\n\n                    (iii) Options, Warrants, Reserved Shares. Options to\npurchase 51,600 shares of common stock of the Company, all issued to employees\nof the Company pursuant to the Company's 1996 Equity Incentive Plan, are\noutstanding. All convertible promissory notes of the Company issued in December\n1997 have been converted to Series AAA Preferred Stock, the shares issuable upon\nsuch conversion are reflected in the share numbers set forth above, and all\nstock purchase warrants issued in connection with such convertible promissory\nnotes have been canceled. Except as set forth in this Subparagraph 2(c) and in\nSchedule 1, as of the Closing Date there will be no existing option, warrant,\ncall, commitment or other agreement requiring the issuance or sale of any\nadditional shares of stock or other equity or debt securities of the Company and\nno shares of stock or other equity or debt securities of the Company are\nreserved for issuance for any purpose, and there will be no agreements,\ncommitments or restrictions relating to ownership or voting of any shares of\nstock or other securities of the Company, other than those agreements addressed\nin Subparagraph 4(d).\n\n               (d) Subsidiaries and Affiliates. The term \"affiliate\" shall mean\nany entity which the Company owns or controls. The Company has no subsidiaries\nor affiliates and has no equity interest in any corporation, partnership, joint\nventure or other entity. The Company has conducted its business only through the\nCompany.\n\n               (e) Financial Statements.\n\n                    (i) The Company has previously delivered to 24\/7 (x) the\nbalance sheets of the Company as at December 31, 1995 and December 31, 1996, and\nthe related audited statements of operations and retained earnings and changes\nin financial position for the fiscal years then ended, as examined by Arthur\nAndersen LLP; the Company's balance sheet as at December 31, 1996 is hereinafter\nreferred to as the \"Audited Balance Sheet\" and, together with the related\nstatements of operations and retained earnings and changes in financial position\nfor the fiscal year then ended, the \"Audited Financials\") and (y) the unaudited\nbalance sheet of the Company as at February 28, 1998 (the \"Unaudited Balance\nSheet\"), and the related unaudited statements of operations and retained\nearnings for the fourteen months then ended (together with the Unaudited Balance\nSheet, the \"Unaudited Financials\"). Each of the foregoing financial state ments\nis complete and correct, is in accordance with the Company's books and records,\nhas been prepared in accordance with generally accepted accounting principles\napplied on a consistent basis, and presents fairly the financial position,\nresults of operations and changes in financial position of the Company as at the\ndates and for the fiscal years indicated, subject, in the case of the Unaudited\nBalance Sheet, to year-end adjustments and notes required by generally accepted\naccounting principles.\n\n\n                                        5\n\n\n\n                    (ii) 24\/7 and its accountants shall be entitled to review\nthe Company's preparation of the Unaudited Financials, including the related\nwork papers of the Company's accountants, at all reasonable times in advance of\nand after the delivery thereof to 24\/7.\n\n               (f) Liabilities. All liabilities of the Company (whether accrued,\nunmatured, contingent, or otherwise and whether due or to become due, but not\nincluding the Company's obligations to perform under contracts other than by the\npayment of money) are set forth or ade quately reserved against on the face of\nthe Audited Balance Sheet and the Unaudited Balance Sheet, in each case in\naccordance with generally accepted accounting principles consistently applied,\nexcept for liabilities incurred since December 31, 1996 (with respect to the\nAudited Balance Sheet), or since February 28, 1998 (with respect to the\nUnaudited Balance Sheet) in the ordinary course of business as theretofore\nconducted, which are not materially adverse to the operations or prospects of\nthe Company's business. Neither the Company nor any Seller knows of any basis\nfor the assertion against the Company of any other liability or loss\ncontingency.\n\n               (g) No Adverse Change. To Seller's best knowledge, since December\n31, 1996, the Company has operated its business consistent with ordinary\ncommercial business practices and only in the ordinary course of business as\ntheretofore conducted, and consistent with a development stage company, there\nhas been no: (i) material adverse change in the business, properties, assets,\nliabilities, commitments, earnings, financial condition or prospects of the\nCompany; (ii) property damage or destruction resulting in a loss or cost to the\nCompany of more than $50,000 in the aggregate, whether or not covered by\ninsurance; or (iii) act or omission which, if taken or omitted after the date of\nthis Agreement and before the Closing would conflict with Subparagraph 6(b)\nbelow.\n\n               (h) Taxes. To Seller's best knowledge, the Company has properly\nfiled all fed eral, foreign, state, local and other tax returns and reports\nwhich are required to be filed by it, all of the foregoing are true, correct and\ncomplete, and all taxes, interest and penalties due and payable as shown on such\nreturns or claimed to be due by any taxing authority have been timely paid. All\nunpaid federal, foreign, state, local and other taxes, fees, assessments, duties\nand other similar governmental charges payable by the Company or which will,\nwith the passage of time, become payable by the Company (including interest and\npenalties) whether or not disputed (x) with respect to any period prior to\nDecember 31, 1996, have been adequately reserved against in accordance with\ngenerally accepted accounting principles on the face of the Audited Balance\nSheet, and (y) with respect to any period prior to February 28, 1998, have been\nadequately reserved against in accordance with generally accepted accounting\nprinciples on the face of the Unaudited Balance Sheet. There are no outstanding\nwaivers or extensions of time with respect to the assessment or audit of any tax\nor tax return of the Company, or claims now pending or matters under discussion\nwith any taxing authority in respect of any tax of the Company. The Company has\nfurnished to 24\/7 true copies of the federal, foreign, state and local tax\nreturns of the Company for the fiscal years ended on December 31 for the years\n1995 through 1996. Such federal, foreign, state and local income tax returns\nhave been examined by the relevant taxing authorities for the fiscal years ended\non for the years 1995 and 1996, respectively. The Company has not at any time\nconsented to have the provisions of Section 341(f)(2) of the Code apply to it.\n\n\n                                        6\n\n\n\n               (i) Title to Properties; Absence of Encumbrances. The Company has\ngood and marketable title to or, in the case of leases and licenses, valid and\nsubsisting leasehold interests or licenses in, all of its properties and assets\nof whatever kind (whether real or personal, tangible or intangible), including,\nwithout limitation, all properties and assets that are shown on the Audited\nBalance Sheet or the Unaudited Balance Sheet (except for assets sold in the\nordinary course of business since December 31, 1996, and February 28, 1998,\nrespectively) and to properties and assets that are shown on any schedule\nhereto, in each case free and clear of any and all liens, mortgages, pledges,\nsecurity interests, restrictions, prior assignments, claims and encum brances of\nany kind whatsoever, except as may be set forth in Schedule 2 hereto and except\nfor liens for current taxes and assessments not yet due and payable (which the\nCompany will promptly pay when due if due prior to the Closing Date). All\nassets, properties and rights relating to the Company's business are held by,\nand all agreements, obligations and transactions relating to the Company's\nbusiness have been entered into, incurred and conducted by, the Company.\n\n               (j) Real and Personal Property. Schedule 3 hereto contains a\ncomplete and correct list of all real property (including buildings and\nstructures) owned or leased by the Company and all interests therein (including\na brief description of the property, the record title holder, the location and\nthe improvements thereon). To the Company and the Seller's best knowledge, all\nsuch real property, buildings and structures, and the equipment therein, and the\noperations and maintenance thereof, comply with any applicable agreements and\nrestrictive covenants and conform to all applicable legal requirements including\nthose relating to the environment, health and safety, land use and zoning, and\nall work required to be done by the Company as landlord or tenant has been duly\nperformed. No condemnation or other proceeding is pending or, to the knowledge\nof any Seller, after due investigation, threatened, which would affect the use\nof any such property by the Company. Schedule 3 hereto contains a complete and\ncorrect list and brief description of all equipment, machinery, computers,\nfurniture, leasehold improvements, vehicles and other personal property owned or\nleased by the Company and all interests therein. The Company's buildings and\nother structures, equipment and other assets (whether leased or owned) are in\ngood operating condition and repair, subject to ordinary wear and tear.\n\n               (k) Patents, Trademarks and Copyrights. A list and brief\ndescription of all trademarks, service marks, trade names, brands, copyrights\nand patents which are presently being used or have since December 31, 1995, been\nused in the Company's business, all applications for registration and\nregistrations for such trademarks, copyrights, patents, patent applications,\nmoral rights, mask works, trade secrets, confidential and proprietary\ninformation, compositions of matter, formulas, designs, proprietary rights,\nknow-how and processes (all of the foregoing collectively hereinafter referred\nto as the \"Proprietary Assets\") and all licenses, contracts, rights and\narrangements with respect to the foregoing, are set forth in Schedule 4 hereto.\nThe Company has furnished to 24\/7 true and complete copies of each of the\nforegoing. Except as set forth in Schedule 4, the Company owns the entire,\nunencumbered right, title and interest to all such properties free and clear of\nall claims, and, except as set forth in Schedule 4, no rights or licenses to\nothers have been granted with respect to any of such properties. Except as set\nforth in Schedule 4, all filings and other action necessary to perfect the full\nlegal right of the Company in\n\n\n                                        7\n\n\n\nthe United States to the foregoing have been effected. Except as set forth in\nSchedule 4, the Company owns or possesses the right to use all the trademarks,\nservice marks, trade names, brands, copyrights, patents, franchises, permits and\nlicenses, and rights with respect to the foregoing, necessary for the conduct of\nits business as now conducted, without any conflict with or infringement of the\nrights of others. Except as set forth in Schedule 4, the Company has not\nreceived notice of any claimed conflict with respect to any of the foregoing.\nNeither the Company nor any Seller has any knowledge of any default or alleged\ndefault or state of facts which with notice or lapse of time or both would\nconstitute a default on the part of any party in the perform ance of any\nobligation to be performed or paid by any party under any licenses, contracts,\nagreements or arrangements referred to in or submitted as a part of Schedule 4,\nthe Company has taken, and until the Closing Date, the Company will use its best\nefforts to take, all steps reasonably necessary to preserve its legal rights in,\nand the secrecy of, all its Proprietary Assets, except those for which\ndisclosure is required for legitimate business or legal reasons. All\nintellectual property rights to all processes, systems and techniques used by\nthe Company which were developed by any employee of the Company engaged in\nresearch or product development while such employee was employed by the Company\nhave, by virtue of an invention assignment agreement, been assigned to the\nCompany. In addition, all intellectual property rights to all processes, systems\nand techniques used by the Company or which the Company intends to use in its\nproposed business which were developed by Yale Brown, Matthew Walker, John\nGonzalez and Robert Lippmann at any time have been assigned by them to the\nCompany.\n\n               (l) Contracts, Leases and Commitments. The Company has furnished\nto 24\/7 true copies of the material contracts, leases and commitments listed in\nSchedule 5 hereto, includ ing summaries of the terms of any unwritten\ncommitments. Except as set forth in that Schedule: (1) the Company (and to the\nbest knowledge of the Company and each Seller, the other parties thereto) have\ncomplied in all material respects with such contracts, leases and commitments,\nall of which are valid and enforceable; (2) such contracts, leases and\ncommitments are in full force and effect and there exists no event or condition\nwhich with or without notice or lapse of time would be a default thereunder,\ngive rise to a right to accelerate or terminate any provision thereof or give\nrise to any lien, claim, encumbrance or restriction on any of the assets or\nproperties of the Company; and (3) all of such contracts, leases and commitments\nhave been entered into on an arm's-length basis, and none is materially\nburdensome to the Company's business. The Company is not a party, nor is any of\nits assets or business subject, to any contract, lease or commitment not listed\nin such Schedule (including without limitation purchase or sales commitments,\nfinancing or security agreements or guaranties, repurchase agreements, agency\nagreements, manufacturers representative agreements, commission agreements,\nemployment or collective bargaining agree ments, pension, bonus or\nprofit-sharing agreements, group insurance, medical or other fringe benefit\nplans, and leases of real or personal property), other than contracts terminable\nwithout penalty on not more than 30 days' notice that do not involve,\nindividually or in the aggregate, the receipt or expenditure of more than\n$50,000 in any one year. The Company is engaged in no material disputes with\ncustomers or suppliers. To the best knowledge of the Company and each Seller, no\ncustomer or supplier is considering termination, non-renewal or any adverse\nmodification of its arrangements with the Company, and the transactions\ncontemplated by this\n\n\n                                        8\n\n\n\nAgreement will not have a material adverse effect on the Company's relationship\nwith any of its suppliers or customers.\n\n               (m) Permits; Compliance with Laws. The Company holds the\ngovernmental licenses, permits and authorizations listed in Schedule 6 hereto\nwhich, except as set forth in that Schedule, are valid and unimpaired, will be\nunaffected by a transfer of all of the shares of the Company to 24\/7, and\nconstitute all of the licenses, permits and authorizations required for the\nownership or occupancy of its properties and assets and the operation of its\nbusiness. The Company's business is and has been operated in compliance\ntherewith and all laws and regulations (federal, state, local and foreign)\napplicable to it, and all required reports and filings with govern mental\nauthorities have been properly made. The consummation of the transactions\ncontemplated by this Agreement will not give rise to any liability of the\nCompany for severance pay or term ination pay.\n\n               (n) Employees. Schedule 7 hereto contains a list of the names,\noffice locations, compensation and years of credited service for severance,\nvacation and pension plan purposes of all full- and part-time employees of the\nCompany as at March 31, 1998; a list of all pension, re tirement,\nprofit-sharing, deferred compensation, option, bonus, medical, insurance and\nother benefit or incentive plans covering such employees; a description of all\nemployee \"perks\" or other benefit practices not set forth in such plans or in\nagreements; and a description of the Company's severance pay policy. Neither the\nCompany nor any Seller knows of any efforts within the last three years to\nattempt to organize the Company's employees, and no strike or labor dispute\ninvolving the Company has occurred during the last three years or, to the best\nknowledge of the Company and each Seller, is threatened. No key employee of the\nCompany has indicated that he is considering terminating his employment. The\nCompany has complied with applicable wage and hour, equal employment, safety and\nother legal requirements relating to its employees. Neither the Company nor any\nmember of any affiliated group of which the Company was at any time a member,\nhas ever maintained or currently maintains any \"employee benefit plan\" subject\nto the Employee Retirement Income Security Act of 1974, as amended (\"ERISA\").\nNeither the Company nor its predecessors has ever contributed to or otherwise\nparticipated in or has been required to contribute to or otherwise participate\nin any \"multi-employer plan\", as defined in Section 4001(a)(3) of ERISA. The\nCompany has not withdrawn from any such employee benefit plan or multi-employer\nplan prior to the date hereof.\n\n               (o) Employee Benefit Plans. The Company is not, and never has\nbeen, subject to any pension, profit sharing or other similar plan which is\nsubject to ERISA, or, to the extent the Company is or has been subject to any of\nthe requirements of ERISA, it has fully complied with all such requirements.\n\n               (p) Insurance. The Company has in full force and effect fire and\ncasualty insurance policies, with extended coverage, sufficient in amount\n(subject to reasonable deductibles) to allow it to replace any of its properties\nthat might be damaged or destroyed and liability insurance providing coverage in\nsuch amounts as is customary in the industry for a similar company.\n\n\n                                        9\n\n\n\n               (q) Litigation. Schedule 8 hereto contains a complete and correct\nlist of all actions, suits, proceedings, claims or governmental investigations\npending or, to the best knowledge of the Company and each Seller, threatened\nagainst, the Company or any of its assets, or, in connection with the Company's\nbusiness, any Seller or any of the Company's officers, directors or employees.\nExcept as set forth on Schedule 8 hereto, neither the Company nor, in connection\nwith the Company's business, any Seller or any of the Company's officers,\ndirectors or employees is subject or party to any judgment, order, or other\ndirection of or stipulation with any court or other governmental authority or\ntribunal, or in violation of any other legal require ments (as defined below),\nand neither the Company nor any Seller knows of any reasonable basis for a claim\nthat such a violation exists. Neither the Company nor any Seller is aware of any\nproposed legal requirement that might adversely affect in any material respect\nthe operation or prospects of the Company's business.\n\n               (r) Environmental Matters. The Company's business, assets and\nproperties are and have been operated and maintained in compliance with all\napplicable federal, state and local environmental protection laws and\nregulations (the \"Environmental Laws\"). No event has occurred which, with or\nwithout the passage of time or the giving of notice, or both, would constitute a\nnon-compliance by the Company with, or a violation by the Company of, the\nEnvironmental Laws. To the Company's and the Seller's best knowledge, no real\nproperty owned, leased, occupied or used by the Company contains any underground\nstorage tanks, asbestos, polychlorinated biphenyls, solid wastes or other\nhazardous substances, as such terms are defined in the Environmental Laws. To\nthe Company's and the Seller's best knowledge, neither the Company nor any of\nits predecessor companies has caused or permitted to exist, as a result of an\nintentional or unintentional act or omission, a disposal, discharge or release\nof solid wastes, pollutants or hazardous substances, as such terms are defined\nin the Environmental Laws, on or from any site which currently is or formerly\nwas owned, leased, occupied or used by the Company or any predecessor company,\nexcept where such disposal, discharge or release was pursuant to and in\ncompliance with the conditions of a permit issued by the appropriate federal,\nstate and\/or local governmental agency.\n\n               (s) Restrictions. The authorization, execution, delivery and\nperformance of the Company's Documents and the consummation of the transactions\ncontemplated hereby and thereby do not and will not violate, conflict with,\nresult in a breach of or constitute a default under, require any notice or\nconsent under, give rise to a right of termination of, or accelerate the\nperformance required by, any terms or provisions of any agreement, instrument or\nwriting of any nature to which the Company or such Seller is a party or is\nbound, or any of their assets or business is subject.\n\n               (t) Transactions with Affiliates. Except as set forth in Schedule\n9 hereto and except for ordinary dealings with its employees, since December 31,\n1996, the Company has had no direct or indirect dealings with any Seller or with\nany other key employee of the Company or with any of their affiliates,\nassociates or relatives. Except as set forth in Schedule 9 and except for\nemployment arrangements with its employees, the Company has no obligation to or\nclaim against any Seller or any other key employee of the Company, or any of\ntheir affiliates, associates\n\n\n                                       10\n\n\n\nor relatives, and no such person or entity has any obligation to or claim\nagainst the Company. Schedule 9 reasonably describes the nature and extent of\nany products, services or benefits pro vided to the Company by any such person\nor entity without a corresponding charge equal to the fair market value of such\nproducts, services or benefits. Neither of Sellers, any other key employee of\nthe Company, nor any of their affiliates, associates or relatives has any direct\nor in direct interest of any kind in any business or entity which is competitive\nwith the Company.\n\n               (u) Books and Records. The books and records of the Company are\ncomplete and correct in all material respects and have been maintained in\naccordance with good business practices. The minute books of the Company, as\npreviously made available to 24\/7, contain com plete and accurate records of all\nmeetings and accurately reflect all other corporate action of the shareholders\nand board of directors of the Company.\n\n               (v) Improper Payments. The Company and its officers and agents\nhave not made any illegal or improper payments to, or provided any illegal or\nimproper benefit or inducement for, any governmental official, supplier,\ncustomer or other person, in an attempt to influence any such person to take or\nto refrain from taking any action relating to the Company. The Company's\nemployees may from time to time have made customary holiday gifts of nominal\nvalue to suppliers or customers.\n\n               (w) Officers and Directors; Bank Accounts, etc. Schedule 10\nhereto lists all officers, directors and fiduciaries of the Company; all bank\naccounts and safe deposit boxes maintained by the Company and all authorized\nsignatories therefor, specifying their respective authority; and all credit\ncards under which employees of the Company may incur liability, and the persons\nholding such cards. No person or entity holds any general or special power of at\ntorney from the Company.\n\n               (x) Disclosure. No representation, warranty or other statement by\nthe Company or Seller herein or in any other of the Company's Documents or made\nin connection with the Company's Documents, contains or will contain an untrue\nstatement of a material fact, or omits or will omit to state a material fact\nnecessary to make the statements contained herein or therein not misleading.\nNeither the Company nor any Seller is aware of any matter that could reasonably\nbe expected to have a materially adverse effect on the Company's business or\nprospects that has not been disclosed in writing to 24\/7.\n\n               (y) Legends.\n\n                    (i) Each Seller understands that the certificates evidencing\nthe Merger Consideration will bear the following legends:\n\n               \"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER\n        THE SECURITIES ACT OF 1933, AS AMENDED (THE \"ACT\"), OR ANY STATE\n        SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY\n        BE TRANSFERRED IN THE ABSENCE OF\n\n\n                                       11\n\n\n\n        SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR SUCH LAWS\n        AND THE RULES AND REGULATIONS THEREUNDER.\"\n                                                                           \n                \"TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS\n        RESTRICTED BY AN AGREEMENT, DATED APRIL _, 1998, A COPY OF WHICH IS ON\n        FILE AT THE OFFICE OF THE CORPORATION. ANY PURPORTED TRANSFER IN\n        VIOLATION OF THIS AGREEMENT IS VOID AND WILL NOT BE RECOGNIZED BY THE\n        CORPORATION OR ITS TRANSFER AGENT.\"\n\n                                                                                \n        \n                    (ii) The certificates shall not be required to bear such\nlegends if an opinion of counsel reasonably satisfactory to 24\/7 is delivered to\n24\/7 to the effect that neither the legends nor the restrictions on transfer\ncontained in this Agreement are required to insure compliance with the Act.\nWhenever, pursuant to the preceding sentence, any certificate for any of the\nSecurities is no longer required to bear the foregoing legend, 24\/7 may, and if\nrequested by the holder thereof, shall, issue to the holder, at 24\/7's expense,\na new certificate not bearing the foregoing legends.\n\n                    (c) Any and all shares of Common Stock issued prior to\nJanuary 31, 1999 or which 24\/7 is obligated to issue as a result of events\noccurring prior to such date, in each case upon conversion of Series A Stock as\na result of accrued dividends with respect to such Series A Stock shall be\ncanceled and cease to exist without further action by 24\/7 or any other person\nupon the closing of a Qualified Public Offering prior to January 31, 1999, and\nshall bear a legend to such effect.\n\n               3. Representations and Warranties of 24\/7. 24\/7 represents,\nwarrants and agrees that:\n\n               (a) Capitalization. Immediately prior to the Closing, the capital\nstock of 24\/7, as authorized by its Certificate of Incorporation, as amended,\nwill consist of: (i) 100,000,000 shares of Common Stock, of which 27,481,201\nshares will be issued and outstanding, 10,567,229 shares will be reserved for\nissuance upon conversion of issued and outstanding Shares, 5,283,615 shares will\nbe reserved for issuance upon exercise of issued and outstanding Class A\nWarrants, 5,283,615 shares will be reserved for issuance upon exercise of issued\nand outstanding Class B Warrants, 2,575,000 will be reserved for issuance upon\nexercise of issued and outstanding Class C Warrants, 142,421 will be reserved\nfor issuance upon exercise of issued and outstanding unclassified warrants,\napproximately 275,000 (subject to adjustment) will be reserved for issuance upon\nexercise of issued and outstanding convertible debentures, and 5,750,000 shares\nwill be reserved for issuance to key employees, officers and directors of, and\nconsultants to, 24\/7 under stock incentives that have been granted or are\navailable for grant by 24\/7 pursuant to 24\/7's 1998 Stock Incentive Plan; and\n(ii) 30,000,000 preferred shares, of which 10,060,002 will be outstanding and\nhave been designated as Series A Convertible Voting Preferred Stock (\"Series A\nStock\"). The rights, privileges and preferences of the Common Stock and Series A\nStock are as stated in the Certificate of Incorporation of 24\/7. Except for the\nStock Incentives specified above, the conversion rights of issued and\noutstanding Series A Stock, the conversion rights of\n\n\n                                       12\n\n\n\noutstanding convertible debentures specified above, and the exercise rights of\nissued and outstanding Class A, Class B, Class C Warrants and unclassified\nwarrants specified above, as of the Closing, 24\/7 will not (i) have outstanding\nany capital stock or other securities convertible into or exchangeable for any\nshares of its capital stock and, except for the preemptive rights contained in\nthis Agreement, no person will have any right to subscribe for or to purchase\n(including conversion or preemptive rights), or any Options for the purchase of,\nor any agreements providing for the issuance (contingent or otherwise) of, any\ncalls, commitments or other claims of any character relating to, any capital\nstock or any stock or securities convertible into or exchangeable for any\ncapital stock of 24\/7; (ii) have any capital stock, equity interests or other\nsecurities reserved for issuance for any purpose; or (iii) be subject to any\nobligation (contingent or otherwise) to repurchase or otherwise acquire or\nretire any shares of its capital stock or any convertible securities, rights or\noptions of the type described in the preceding clause (i). \"Option\" with respect\nto any person means any security, right, subscription, warrant, option,\n\"phantom\" stock right or other Contract that gives the right directly or\nindirectly to (i) purchase or otherwise receive or be issued any shares of\ncapital stock of such person or any security of any kind convertible into or\nexchangeable or exercisable for any shares of capital stock of such person or\n(ii) receive or exercise any benefits or rights similar to any rights enjoyed by\nor accruing to the holder of shares of capital stock of such person, including\nany rights to participate in the equity or income of such person or to\nparticipate in or direct the election of any directors or officers of such\nperson or the manner in which any shares of capital stock of such person are\nvoted. Neither this Agreement nor the transactions contemplated hereby or by the\nMerger will cause any anti-dilution adjustment or accelerated vesting of any\nOptions. All issued and outstanding shares of Common Stock are duly and validly\nissued and are fully paid and nonassessable and were issued in accordance with\nthe registration or qualification provisions of the Securities Act and any\napplicable state securities laws or pursuant to valid exemptions therefrom, and\nall shares of Common Stock, when issued as contemplated hereby, will be duly and\nvalidly issued and fully paid and nonassessable and issued in accordance with\nthe registration or qualification provisions of the Securities Act and any\napplicable state securities laws or pursuant to valid exemptions therefrom. All\nof the issued and outstanding Series A Stock (and shares of Common Stock\nissuable upon conversion thereof), are validly issued and fully paid and\nnonassessable and were issued in accordance with the registration or\nqualification provisions of the Securities Act and any applicable state\nsecurities laws or pursuant to valid exemptions therefrom, and all of the Series\nA Stock (and shares of Common Stock issuable upon conversion thereof), when\nissued as contemplated hereby and pursuant to the terms of the Certificate of\nIncorporation, will be validly issued and fully paid and nonassessable and will\nbe issued in accordance with the registration or qualification provisions of the\nSecurities Act and any applicable state securities laws or pursuant to valid\nexemptions therefrom. The delivery of a certificate or certificates at the\nClosing representing the Shares and the Warrants will transfer to each Seller\ngood and valid title to the Shares and the Warrants, respectively, free and\nclear of all liens, pledges, assessments, leases, security interests, claims,\nencumbrances, or other restrictions of any kind (collectively, \"Liens\"). To the\nbest knowledge of 24\/7, there are no agreements among 24\/7's shareholders with\nrespect to the voting or transfer of 24\/7's capital stock, other than the\nagreements relating to transfer contained in the Stockholders' Agreement and the\nRegistration Rights Agreement. The authorized capital stock of the Subsidiary\nconsists of 10,000 shares of common stock, par value $.01 per\n\n\n                                       13\n\n\n\nshare, of which 100 are outstanding as of the date hereof, and 1,000 shares of\npreferred stock, par value $.01 per share, none of which are outstanding as of\nthe date hereof. 24\/7 owns, beneficially and of record, all of the issued and\noutstanding shares of capital stock of the Subsidiary, free and clear of all\nLiens. All of the issued and outstanding shares of capital stock of the\nSubsidiary have been duly and validly issued and are fully paid and\nnonassessable and were issued in accordance with the registration or\nqualification provisions of the Securities Act and any relevant state securities\nlaws or pursuant to valid exemptions therefrom. There are no outstanding Options\nwith respect to the Subsidiary.\n\n               (b) Organization, Good Standing, Authority. Each of 24\/7 and the\nSubsidiary is a corporation duly organized, validly existing and in good\nstanding under the laws of the State of Delaware and has full power and\nauthority to own and lease its assets and properties and to conduct its business\nas it is now being conducted. Each of 24\/7 and the Subsidiary is duly qualified\nor licensed to do business and is in good standing as a foreign corporation\nunder the laws of each jurisdiction in which the conduct of its business or the\nownership or leasing of its assets requires such qualification. The Subsidiary\nis newly-formed and has not conducted any business or owned any assets prior to\nthe date hereof. The copies of 24\/7's Certificate of Incorporation, as amended\n(certified by the Secretary of State of Delaware), and By-Laws, as amended\n(certified by the Secretary of 24\/7) which have been previously delivered to the\nCompany are correct and complete. The copies of the Subsidiary's Certificate of\nIncorporation, as amended (certified by the Secretary of State of Delaware), and\nBy-Laws, as amended (certified by the Secretary of the Subsidiary) which have\nbeen previously delivered to the Company are correct and complete.\n\n               (c) Subsidiaries and Affiliates. The term \"affiliate\" shall mean\nany entity which 24\/7 owns or controls. Other than the Subsidiary, 24\/7 has no\nsubsidiaries or affiliates and has no equity interest in any corporation,\npartnership, joint venture or other entity. 24\/7 has conducted its business only\nthrough 24\/7.\n\n               (d) Unaudited Pro Forma Balance Sheet.\n\n                    (i) 24\/7 has previously delivered to the Company an\nunaudited pro forma balance sheet (the \"Balance Sheet\") of 24\/7 as at December\n31, 1997. The Balance Sheet is in accordance with the Company's books and\nrecords and has been prepared in good faith. All liabilities of the Company\n(whether accrued, unmatured, contingent, or otherwise and whether due or to\nbecome due) are set forth or adequately reserved against on the face of the\nBalance Sheet except for liabilities incurred since December 31, 1997 in the\nordinary course of business as theretofore conducted, which are not materially\nadverse to the operations or prospects of 24\/7's business. 24\/7 does not know of\nany basis for the assertion against 24\/7 of any other liability or loss\ncontingency. Since December 31, 1997, 24\/7 has operated its business consistent\nwith ordinary commercial business practices and only in the ordinary course of\nbusiness as theretofore conducted, and there has been no: (i) material adverse\nchange in the business, properties, assets, liabilities, commitments, earnings,\nfinancial condition or prospects of the Company; or (ii) prop erty damage or\ndestruction resulting in a loss or cost to the Company of more than $50,000 in\nthe aggregate, whether or not covered by insurance.\n\n\n                                       14\n\n\n\n               (e) Taxes. 24\/7 has properly filed all federal, foreign, state,\nlocal and other tax returns and reports which are required to be filed by it,\nall of the foregoing are true, correct and complete, and all taxes, interest and\npenalties due and payable as shown on such returns or claimed to be due by any\ntaxing authority have been timely paid. 24\/7 has not at any time consented to\nhave the provisions of Section 341(f)(2) of the Code apply to it.\n\n               (f) Title to Properties; Absence of Encumbrances. 24\/7 has good\nand marketable title to or, in the case of leases and licenses, valid and\nsubsisting leasehold interests or licenses in, all of its properties and assets\nof whatever kind (whether real or personal, tangible or intangible), free and\nclear of any and all liens, mortgages, pledges, security interests, restric\ntions, prior assignments, claims and encumbrances of any kind whatsoever, except\nfor liens for current taxes and assessments not yet due and payable. All assets,\nproperties and rights relating to 24\/7's business are held by, and all\nagreements, obligations and transactions relating to 24\/7's business have been\nentered into, incurred and conducted by, 24\/7 rather than any of its affiliates.\n\n               (g) Real and Personal Property. All real property (including\nbuildings and structures) owned or leased by 24\/7 and all interests therein and\nthe equipment therein, and the operations and maintenance thereof, comply with\nany applicable agreements and restrictive covenants and conform to all\napplicable legal requirements including those relating to the environment,\nhealth and safety, land use and zoning, and all work required to be done by 24\/7\nas landlord or tenant has been duly performed. No condemnation or other\nproceeding is pending or, to the knowledge of any Seller, after due\ninvestigation, threatened, which would affect the use of any such property by\n24\/7. 24\/7's buildings and other structures, equipment and other assets (whether\nleased or owned) are in good operating condition and repair, subject to ordinary\nwear and tear.\n\n               (h) Patents, Trademarks and Copyrights. 24\/7 owns the entire,\nunencumbered right, title and interest to all trademarks, service marks, trade\nnames, brands, copyrights and patents which are presently being used or have\nsince December 31, 1995, been used in 24\/7's business, all applications for\nregistration and registrations for such trademarks, copyrights, patents, patent\napplications, moral rights, mask works, trade secrets, confidential and\nproprietary information, compositions of matter, formulas, designs, proprietary\nrights, know-how and processes (all of the foregoing collectively hereinafter\nreferred to as the \"Proprietary Assets\") and all licenses, contracts, rights and\narrangements with respect to the foregoing, free and clear of all claims, and no\nrights or licenses to others have been granted with respect to any of such prop\nerties. All filings and other action necessary to perfect the full legal right\nof 24\/7 in the United States to the foregoing have been effected. 24\/7 owns or\npossesses the right to use all the trademarks, service marks, trade names,\nbrands, copyrights, patents, franchises, permits and licenses, and rights with\nrespect to the foregoing, necessary for the conduct of its business as now\nconducted, without any conflict with or infringement of the rights of others.\n24\/7 has not received notice of any claimed conflict with respect to any of the\nforegoing. 24\/7 has no knowledge of any default or alleged default or state of\nfacts which with notice or lapse of time or both would con stitute a default on\nthe part of any party in the performance of any obligation to be performed or\npaid by any party under any licenses, contracts, agreements or arrangements\nreferred to above.\n\n                                       15\n\n\n\n24\/7 has taken, and in the future 24\/7 will use its best efforts to take, all\nsteps reasonably necessary to preserve its legal rights in, and the secrecy of,\nall its Proprietary Assets, except those for which disclosure is required for\nlegitimate business or legal reasons. All intellectual property rights to all\nprocesses, systems and techniques used by 24\/7 which were developed by any\nemployee of 24\/7 engaged in research or product development while such employee\nwas employed by 24\/7 have, by virtue of an invention assignment agreement, been\nassigned to 24\/7. In addition, all intellectual property rights to all\nprocesses, systems and techniques used by 24\/7 or which 24\/7 intends to use in\nits proposed business which were developed by its employees at any time have\nbeen assigned by them to 24\/7.\n\n               (i) Contracts, Leases and Commitments. 24\/7 and the other parties\nthereto have complied in all material respects with all material contracts,\nleases and commitments of 24\/7, all of which are valid and enforceable; (2) all\nmaterial contracts, leases and commitments of 24\/7 are in full force and effect\nand there exists no event or condition which with or without notice or lapse of\ntime would be a default thereunder, give rise to a right to accelerate or\nterminate any provision thereof or give rise to any lien, claim, encumbrance or\nrestriction on any of the assets or properties of 24\/7; and (3) all material\ncontracts, leases and commitments of 24\/7 have been entered into on an\narm's-length basis, and none is materially burdensome to 24\/7's business. 24\/7\nis engaged in no material disputes with customers or suppliers. To the best\nknowledge of 24\/7, no customer or supplier is considering termination,\nnon-renewal or any adverse modification of its arrangements with 24\/7, and the\ntransactions contemplated by this Agreement will not have a material adverse\neffect on 24\/7's relationship with any of its suppliers or customers.\n\n               (j) Permits; Compliance with Laws. The governmental licenses,\npermits and authorizations held by 24\/7 are valid and unimpaired, will be\nunaffected by a transfer of all of the shares of 24\/7 to 24\/7, and constitute\nall of the licenses, permits and authorizations required for the ownership or\noccupancy of its properties and assets and the operation of its business. 24\/7's\nbusiness is and has been operated in compliance therewith and all laws and\nregulations (federal, state, local and foreign) applicable to it, and all\nrequired reports and filings with governmental authorities have been properly\nmade. The consummation of the transactions contemplated by this Agreement will\nnot give rise to any liability of 24\/7 for severance pay or termination pay.\n\n               (k) Employees. 24\/7 knows of any efforts within the last three\nyears to attempt to organize 24\/7's employees, and no strike or labor dispute\ninvolving 24\/7 has occurred during the last three years or, to the best\nknowledge of 24\/7, is threatened. No key employee of 24\/7 has indicated that he\nis considering terminating his employment. 24\/7 has complied with applic able\nwage and hour, equal employment, safety and other legal requirements relating to\nits employ ees. Neither 24\/7 nor any member of any affiliated group of which\n24\/7 was at any time a member, has ever maintained or currently maintains any\n\"employee benefit plan\" subject to the Employee Retirement Income Security Act\nof 1974, as amended (\"ERISA\"). Neither 24\/7 nor its predecessors has ever\ncontributed to or otherwise participated in or has been required to contribute\nto or otherwise participate in any \"multi-employer plan\", as defined in Section\n4001(a)(3) of ERISA. 24\/7 has not withdrawn from any such employee benefit plan\nor multi-employer plan prior to the date hereof.\n\n\n                                       16\n\n\n\n               (l) Employee Benefit Plans. 24\/7 is not, and never has been,\nsubject to any pension, profit sharing or other similar plan which is subject to\nERISA, or, to the extent 24\/7 is or has been subject to any of the requirements\nof ERISA, it has fully complied with all such requirements.\n\n               (m) Insurance. 24\/7 has in full force and effect fire and\ncasualty insurance policies, with extended coverage, sufficient in amount\n(subject to reasonable deductibles) to allow it to replace any of its properties\nthat might be damaged or destroyed and liability insurance providing coverage in\nsuch amounts as is customary in the industry for a similar company.\n\n               (n) Litigation. Neither 24\/7 nor, in connection with 24\/7's\nbusiness, any of 24\/7's officers, directors or employees is subject or party to\nany judgment, order, or other direction of or stipulation with any court or\nother governmental authority or tribunal, or in violation of any other legal\nrequirements, and 24\/7 knows of no reasonable basis for a claim that such a\nviolation exists. 24\/7 is not aware of any proposed legal requirement that might\nadversely affect in any material respect the operation or prospects of 24\/7's\nbusiness.\n\n               (o) Environmental Matters. 24\/7's business, assets and properties\nare and have been operated and maintained in compliance with all applicable\nfederal, state and local environmental protection laws and regulations (the\n\"Environmental Laws\"). No event has occurred which, with or without the passage\nof time or the giving of notice, or both, would constitute a non-compliance by\n24\/7 with, or a violation by 24\/7 of, the Environmental Laws. No real property\nowned, leased, occupied or used by 24\/7 contains any underground storage tanks,\nasbestos, polychlorinated biphenyls, solid wastes or other hazardous substances,\nas such terms are defined in the Environmental Laws. Neither 24\/7 nor any of its\npredecessor companies has caused or permitted to exist, as a result of an\nintentional or unintentional act or omission, a disposal, discharge or release\nof solid wastes, pollutants or hazardous substances, as such terms are defined\nin the Environmental Laws, on or from any site which currently is or formerly\nwas owned, leased, occupied or used by 24\/7 or any predecessor company, except\nwhere such disposal, discharge or release was pursuant to and in compliance with\nthe conditions of a permit issued by the appropriate federal, state and\/or local\ngovernmental agency.\n\n               (p) Restrictions. The authorization, execution, delivery and\nperformance of 24\/7's Documents and the consummation of the transactions\ncontemplated hereby and thereby do not and will not violate, conflict with,\nresult in a breach of or constitute a default under, require any notice or\nconsent under, give rise to a right of termination of, or accelerate the\nperformance required by, any terms or provisions of any agreement, instrument or\nwriting of any nature to which 24\/7 is a party or is bound, or any of their\nassets or business is subject.\n\n               (q) Transactions with Affiliates. 24\/7 has not had any direct or\nindirect dealings with any principal owner of 24\/7 or with any of its\naffiliates, associates or relatives (or affiliates thereof) nor does 24\/7\nbeneficially own, directly or indirectly, any investment assets of any such\ncurrent or former principal owner of 24\/7 or any of their respective Affiliates,\nassociates or relatives (or Affiliates thereof). 24\/7 does not have any\nobligation to or claim against any\n\n\n                                       17\n\n\n\nprincipal owner of 24\/7, or any of his or its affiliates, associates or\nrelatives, and no such person has any obligation to or claim against 24\/7. All\nproducts, services or benefits provided to 24\/7 by any such person, or provided\nby 24\/7 to any such person, are provided at a charge equal to the fair market\nvalue of such products, services or benefits. To the best knowledge of 24\/7, no\nprincipal owner of 24\/7, nor any of its affiliates, associates or relatives, has\nany direct or indirect interest of any kind in any business or entity which is\ncompetitive with 24\/7 or with which 24\/7 has a business relationship.\n\n               (r) Books and Records. The books and records of 24\/7 are complete\nand correct in all material respects and have been maintained in accordance with\ngood business practices. The minute books of 24\/7 contain complete and accurate\nrecords of all meetings and accurately reflect all other corporate action of the\nshareholders and board of directors of 24\/7.\n\n               (s) Improper Payments. 24\/7 and its officers and agents have not\nmade any illegal or improper payments to, or provided any illegal or improper\nbenefit or inducement for, any governmental official, supplier, customer or\nother person, in an attempt to influence any such person to take or to refrain\nfrom taking any action relating to 24\/7. 24\/7's employees may from time to time\nhave made customary holiday gifts of nominal value to suppliers or customers.\n\n               (t) Disclosure. No representation, warranty or other statement by\n24\/7 or the Subsidiary herein or in any other of 24\/7's Documents or made in\nconnection with 24\/7's Documents, contains or will contain an untrue statement\nof a material fact, or omits or will omit to state a material fact necessary to\nmake the statements contained herein or therein not misleading. 24\/7 is not\naware of any matter that could reasonably be expected to have a materi ally\nadverse effect on 24\/7's business or prospects that has not been disclosed in\nwriting to the Company.\n\n               4. Covenants of the Company and the Sellers. The Company and the\nSellers severally and not jointly covenant and agree as to itself and only as to\nthe covenants affecting itself) that between the date hereof and the Closing:\n\n               (a) Actions. The Company and Sellers will not voluntarily take\nany action which would cause any of the representations and warranties made by\nit in the Company's Documents not to be true and correct in all material\nrespects on and as of the Closing Date with the same force and effect as if such\nrepresentations and warranties had been made on and as of the Closing Date.\n\n               (b) Access by 24\/7. 24\/7 and its representatives and advisers\nshall have free and full access during normal business hours to the Company's\nassets, premises, books and records, key employees and accountants, including\nthe audit work papers of Arthur Andersen LLP and the work papers of the\nCompany's accountants relating to the Audited Financials and the Unaudited\nFinancials, respectively, and the Company and Sellers shall furnish 24\/7 with\nsuch information and copies of such documents as 24\/7 may reasonably request.\nSellers shall promptly furnish to 24\/7 all financial statements of the Company\nthat are prepared in the ordinary course\n\n\n                                       18\n\n\n\nof business, including without limitation monthly reports of sales, revenue and\ncash flow and quarterly balance sheets.\n\n               (c) Conduct of Business. The business of the Company shall be\nconducted only in the ordinary course, consistent with the present conduct of\nits business, and the Company and Sellers shall use commercially reasonable\nefforts to maintain, preserve and protect the assets and goodwill of the\nCompany. The Company shall not, without the prior written consent of 24\/7, take\nor commit to take any of following actions: (i) amend its By-Laws or Certificate\nof Incorporation, (ii) issue any additional shares of capital stock or issue,\nsell or grant any option or right to acquire or otherwise dispose of any of its\nauthorized but unissued capital stock or other corporate securities, (iii)\ndeclare or pay any dividends or make any other distribution in cash or property\non its capital stock, (iv) repurchase or redeem any shares of its capital stock,\n(v) incur, or perform, pay or otherwise discharge, any obligation or liability\n(absolute or contingent), except for current obligations and liabilities\nincurred in the ordinary course of business consistent with past practice, (vi)\nenter into any employment agreement with, or become liable for any bonus,\nprofit-sharing or incentive payment to, or increase the compensation or benefits\nof, any of its officers, directors or employees, except pursuant to presently\nexisting plans, arrangements or agreements disclosed herein or in a schedule\nhereto, (vii) sell, transfer or acquire any properties or assets, tangible or\nintangible, other than in the ordinary course of business, (viii) make any\nmaterial changes in its customary method of operations, including marketing,\nselling and pricing policies and maintenance of business premises, fixtures,\nfurniture and equipment, (ix) modify, amend or cancel any of its existing leases\nor enter into any contracts, agreements, leases or understandings other than in\nthe ordinary course of business or enter into any loan agreements, (x) make any\ninvestments other than in certificates of deposit or short-term commercial\npaper, (xi) make any payments or incur any liability in connection with expenses\nincident to the negotiation or preparation of the Company's Documents, or (xii)\ntake any other action which would cause any of the representations and\nwarranties made by any Seller in the Company's Documents not to be true and\ncorrect in all material respects on and as of the Closing Date with the same\nforce and effect as if such representations and warranties had been made on and\nas of the Closing Date.\n\n               (d) Supplements. If any representation, warranty or statement of\nany Seller, or any schedule delivered to 24\/7, shall be or become incorrect,\nSellers shall deliver to 24\/7 a supplement in order that said representation,\nwarranty, statement, or schedule, as so supple mented, shall be true and\ncorrect. It is understood and agreed that the delivery of such a supple ment to\n24\/7 shall not in any manner constitute a waiver by 24\/7 of any of its rights\nunder this Agreement.\n\n               (e) Termination of Agreements. Sellers shall cause all provisions\nof all purchase agreements, stockholder agreements, registration rights\nagreements, investors' rights agreements, co-sale agreements, rights of first\nrefusal, and similar agreements between Sellers and the Company to terminate and\nbe of no further force and effect upon consummation of the Closing.\n\n\n                                       19\n\n\n\n               (f) \"Market-Stand Off\" Agreement. Each Seller hereby agrees that\nit shall not, to the extent requested by 24\/7 or an underwriter of securities of\n24\/7, sell or otherwise transfer or dispose of any Registrable Securities or\nother shares of stock of 24\/7 then owned by such Seller (other than to donees or\npartners of the Seller who agree to be similarly bound) for up to ninety (90)\ndays following the effective date of a registration statement of 24\/7 filed\nunder the Securities Act; provided, however, that all executive officers and\ndirectors and employees of 24\/7 then holding Common Stock of 24\/7 and all other\npersons or entities holding at least five percent (5%) of the outstanding Common\nStock of 24\/7 enter into similar agreements. In order to enforce the foregoing\ncovenant, 24\/7 shall have the right to place restrictive legends on the\ncertificates representing the shares subject to this Subparagraph and to impose\nstop transfer instructions with respect to such shares(and the shares or\nsecurities of every other person subject to the foregoing restriction) until the\nend of such period.\n\n               (g) Further Action. Upon the terms and subject to the conditions\nhereof, and subject to the exercise by the Boards of Directors of the Company of\ntheir fiduciary obligations, each of the Sellers and the Company hereto shall\nuse all reasonable efforts to take, or cause to be taken, all actions and to do,\nor cause to be done, all other things necessary, proper, or advisable to\nconsummate and make effective as promptly as practicable the transactions\ncontemplated by this Agreement and to obtain in a timely manner all necessary\nwaivers, consents, and approvals and to effect all necessary registrations and\nfilings, including, but not limited to: (i) reasonable efforts to lift or\nrescind any injunction or restraining order or other order which may be entered;\n(ii) cooperation in reasonable tax planning measures in light of the\ntransactions contemplated hereby so long as no action shall be required to be\ntaken which would result in adverse tax consequences to the stockholders of the\nCompany or, if the Merger does not occur, to the Company; and (iii) reasonable\ncooperation in respect of any filings to be made in connection with the Merger\nand the transactions contemplated hereby.\n\n               (h) Public Announcements. The Company and the Sellers shall\nconsult with 24\/7 before issuing any further press release or otherwise making\nany public statements with respect to the Merger and neither shall issue any\nsuch press release or make any such public state ment, except as may be required\nby law, without the prior consent of 24\/7.\n\n               (i) Government Compliance. The Company and the Sellers agree\npromptly to effect all necessary registrations, filings, applications, and\nsubmissions of information requested by governmental authorities.\n\n               5. Covenants of 24\/7.\n\n               (a) Actions. 24\/7 each covenants and agrees that between the date\nhereof and the Closing 24\/7 will not take any action which would cause any of\nthe representations and warranties made by it in 24\/7's Documents not to be true\nand correct in all material respects on\n\n\n                                       20\n\n\n\nand as of the Closing Date with the same force and effect as if such\nrepresentations and warranties had been made on and as of the Closing Date.\n\n               (b) Supplements. If any representation, warranty or statement of\n24\/7 or any schedule delivered by 24\/7, shall be or become incorrect, 24\/7 shall\ndeliver to the Company a supplement in order that said representation, warranty,\nstatement, or schedule, as so supple mented, shall be true and correct. It is\nunderstood and agreed that the delivery of such a supple ment to the Company\nshall not in any manner constitute a waiver by the Company of any of its rights\nunder this Agreement.\n\n               (c) Further Action. Upon the terms and subject to the conditions\nhereof, and subject to the exercise by the Boards of Directors of 24\/7 of their\nfiduciary obligations, 24\/7 shall use all reasonable efforts to take, or cause\nto be taken, all actions and to do, or cause to be done, all other things\nnecessary, proper, or advisable to consummate and make effective as promptly as\npracticable the transactions contemplated by this Agreement and to obtain in a\ntimely manner all necessary waivers, consents, and approvals and to effect all\nnecessary registrations and filings, including, but not limited to: (i)\nreasonable efforts to lift or rescind any injunction or restraining order or\nother order which may be entered; (ii) cooperation in reasonable tax planning\nmeasures in light of the transactions contemplated hereby so long as no action\nshall be required to be taken which would result in adverse tax consequences to\nthe stockholders of 24\/7 or, if the Merger does not occur, to 24\/7; and (iii)\nreasonable cooperation in respect of any filings to be made in connection with\nthe Merger and the transactions contemplated hereby.\n\n               (d) Public Announcements. 24\/7 shall consult with the Company\nbefore issuing any further press release or otherwise making any public\nstatements with respect to the Merger and neither shall issue any such press\nrelease or make any such public statement, except as may be required by law,\nwithout the prior consent of the Company.\n\n               (e) Government Compliance. 24\/7 agrees promptly to effect all\nnecessary registrations, filings, applications, and submissions of information\nrequested by governmental authorities.\n\n               (f)    Information Rights\n\n                    (i) Monthly and Quarterly Statements. 24\/7 shall deliver to\neach Seller, as soon as practicable, and in any event within 30 days after the\nclose of each month of each fiscal year of 24\/7 in the case of monthly\nstatements and 45 days after the close of each of the first three fiscal\nquarters of each fiscal year of 24\/7 in the case of quarterly statements, true\nand complete copies of the consolidated balance sheets, and the related\nconsolidated statements of income, stockholders' equity and cash flows of 24\/7\nand its subsidiaries (which shall include all affiliates controlled by 24\/7\ndirectly or indirectly through one or more intermediaries including, without\nlimitation, any person in which 24\/7, directly or indirectly, through a\nsubsidiary or otherwise, beneficially owns more than fifty percent (50%) of\neither the equity interest in, or the voting control of such persons, whether or\nnot existing on the date hereof) as at the close of such month or quarter\n\n\n                                       21\n\n\n\nand covering operations for such month or quarter, as the case may be, and the\nportion of 24\/7's fiscal year ending on the last day of such month or quarter,\nsetting forth in each case in comparative form the figures for the comparable\nperiod of the previous fiscal year and accompanied by a narrative description of\n24\/7's business and results of operations for such month or quarter. All such\nfinancial statements shall be prepared in accordance with GAAP (except for the\nomission of normal year-end adjustments and footnote disclosures) consistently\napplied throughout the periods involved, shall be true and correct in all\nmaterial respects and shall fairly present the financial condition, income,\nchanges in stockholders' equity and cash flow of 24\/7 on a consolidated basis,\nas applicable, as of the respective dates thereof and for the respective periods\ncovered thereby. Each financial statement delivered by 24\/7 shall be certified\nby 24\/7's chief executive officer, president, treasurer or chief financial\nofficer.\n\n                    (ii) Annual Statements. 24\/7 shall deliver to each Seller,\nas soon as practicable after the end of each fiscal year of 24\/7, and in any\nevent within 90 days thereafter, true and complete copies of the consolidated\nand consolidating balance sheets of 24\/7 and its Subsidiary at the end of such\nyear and the consolidated and consolidating statements of income, stockholders'\nequity and cash flows of 24\/7 and its Subsidiary for such year, setting forth in\neach case in comparative form the figures for the previous fiscal year, all in\nreasonable detail and accompanied by an opinion thereon of a firm of independent\ncertified public accountants of recognized national standing selected by 24\/7\nand reasonably acceptable to the Sellers, which opinion shall state that such\nfinancial statements fairly present the financial condition, income, changes in\nstockholders' equity and cash flow of 24\/7 and its Subsidiary on a consolidated\nbasis, as applicable, and have been prepared in accordance with GAAP and that\nthe examination of such accountants in connection with such financial statements\nhas been made in accordance with generally accepted auditing standards, and\naccordingly included such tests of the accounting records and such other\nauditing procedures as were considered necessary in the circumstances. Each\nfinancial statement delivered by 24\/7 shall be certified by 24\/7's chief\nexecutive officer, president, treasurer or chief financial officer.\n\n                    (iii) Audit Reports. 24\/7 shall deliver to each Seller,\npromptly upon receipt thereof, one copy of each other financial report and\ninternal control letter submitted to 24\/7 by independent accountants in\nconnection with any annual, interim or special audit made by them of the books\nof 24\/7 and its Subsidiary, as applicable, as well as any responses of 24\/7\nthereto.\n\n                    (iv) Other Reports. 24\/7 shall deliver to each Seller,\npromptly upon their becoming available, one copy of each financial statement,\nreport, notice or proxy statement sent by 24\/7 to stockholders generally, of\neach financial statement, report, notice or proxy statement sent by 24\/7 or any\nof its Subsidiaries to the SEC or any successor agency, if applicable, of each\nregular or periodic report and any registration statement, prospectus or written\ncommunication (other than transmittal letters) in respect thereof filed by 24\/7\nor any of its subsidiaries with, or received by such person in connection\ntherewith from, any securities exchange or the SEC or any successor agency, of\nany press release issued by 24\/7 or any of its subsidiaries, and of any material\nof any nature whatsoever prepared by the SEC or any successor agency thereto or\nany state blue sky or securities law commission which relates to or affects in\nany way 24\/7 or any of its subsidiaries.\n\n\n                                       22\n\n\n\n                    (v) Requested Information. 24\/7 shall deliver to each\nSeller, with reasonable promptness, such other documents, reports, data and\ninformation as from time to time may be reasonably requested by such Seller.\n\n                    (vi) Access. 24\/7 shall permit, and shall cause its\nsubsidiaries to permit, representatives designated by any Seller, upon\nreasonable prior notice to 24\/7 and at the such Seller's expense, to visit and\ninspect each of 24\/7's and its subsidiaries' properties, to examine their\nrespective corporate and financial records (and make copies thereof or extracts\ntherefrom), to discuss their respective affairs, finances and accounts with\n24\/7's and its subsidiaries' directors, officers, key employees and accountants,\nall at such reasonable times as may be requested by such Seller.\n\n                    (vii) Other Information. 24\/7 shall provide, from time to\ntime, such additional information regarding 24\/7 or its Subsidiaries as any\nSeller reasonably may request, including without limitation, any information or\nreports required by reason of reporting or regulatory requirements to which any\nSeller, its general partner (if applicable), or any person having an interest in\nsuch Seller is subject.\n\n               6. Conditions Precedent to Obligations of 24\/7 and the\nSubsidiary. The obligations of 24\/7 and the Subsidiary to consummate the\ntransactions contemplated by this Agreement are subject to the fulfillment, at\nor before the Closing, of each of the following conditions, any of which may be\nwaived by 24\/7 and the Subsidiary in writing, and the Company and Sellers shall\nuse commercially reasonable efforts to cause such conditions to be fulfilled:\n\n               (a) Representations and Warranties. Each of the representations\nand warranties of the Company and the Sellers in the Company's Documents shall\nbe true and correct in all ma terial respects on and as of the Closing Date with\nthe same force and effect as though made on and as of the Closing Date.\n\n               (b) Termination of Agreements. The Company and the Sellers shall\nhave complied with their covenant set forth in Subparagraph 4(d) hereof.\n\n               (c) Execution of Stockholders' Agreement. All Sellers shall have\nexecuted the Stockholders' Agreement substantially in the form attached hereto\nas Exhibit A.\n\n               (d) Performance of the Company and the Sellers. The Company and\nthe Sellers shall have performed and complied in all material respects with all\nagreements, covenants and conditions required by the Company's Documents to be\nperformed or complied with by any Seller at or before the Closing.\n\n               (e) Delivery of Shares. All of the issued and outstanding Shares\nshall have been delivered to 24\/7 for purchase by it on the Closing Date.\n\n               (f) Employment Agreements. Yale Brown and Matthew Walker each\nshall have entered into an employment agreement and Non-Competition and\nNon-Disclosure Agreement (the\n\n\n                                       23\n\n\n\n\"Employment Agreements\") with 24\/7 in the form of Exhibit B hereto and each\nother employee of the Company shall have entered into a Non-Disclosure and\nNon-Competition Agreement in the form attached hereto as Exhibit C.\n\n               (g) Key Man Life Insurance. The Company and the Sellers shall\nhave delivered to 24\/7 evidence reasonably satisfactory to 24\/7 that there is in\nforce a key man life insurance policy, owned by the Company and under which the\nCompany (and any financial institution designated by 24\/7) is the beneficiary,\ninsuring the life of Yale Brown in the amount of $1,000,000.\n\n               (h) Opinion of Counsel to the Company and the Sellers. The\nCompany and the Sellers shall have delivered to 24\/7 an opinion of Fenwick &amp; West LLP, counsel to the Company and the Sellers, dated the Closing Date, in the\nform of Exhibit D hereto.\n\n               (i) Certificate. 24\/7 shall have received a certificate executed\nby the Company dated the Closing Date, certifying, in such detail as 24\/7 may\nreasonably request, as to the fulfillment of the conditions set forth in\nsubparagraphs (a), (b) and (d).\n\n               (j) Consents. The Company and the Sellers shall have obtained or,\nto the reasonable satisfaction of 24\/7 obviated the need to obtain, all\nconsents, approvals or waivers from regulatory authorities and third parties\nnecessary for the execution, delivery and performance of the Company's Documents\nand the transactions contemplated thereby, all without cost or other adverse\nconsequences to the Company.\n\n               (k) Litigation. No action or proceeding shall be pending or\nthreatened before any court, tribunal or governmental body, and no claim or\ndemand shall have been made against 24\/7, any Seller or the Company, seeking to\nrestrain or prohibit or to obtain damages or other relief in connection with the\nconsummation of the transactions contemplated by the Company's Documents or\n24\/7's Documents, or which might materially affect the business of the Company,\nwhich in the reasonably exercised opinion of 24\/7 makes it inadvisable to\nconsummate such transactions.\n\n               (l) Stockholder Approval. The stockholders of the Company shall\nhave approved and adopted this Agreement by the unanimous written consent in\naccordance with its Certificate of Incorporation, By-laws and Delaware General\nCorporation Law.\n\n               (m) Proceedings. All actions, proceedings, instruments, and\ndocuments required to carry out the transactions contemplated hereby or\nincidental hereto and all other related legal matters shall have been reasonably\nsatisfactory to and approved by counsel of 24\/7 and such counsel shall have been\nfurnished with such certified copies of such corporate actions and proceedings\nand such other instruments and documents as it shall have reasonably requested.\n\n               (n) No Violation. There shall not have been any action taken, or\nany statute, rule, regulation, or order enacted, promulgated, or issued or\ndeemed applicable to the Merger by\n\n\n                                       24\n\n\n\nany Federal or state government or governmental authority or court, which would\n(i) prohibit the Surviving Corporation's ownership or operation of all or a\nmaterial portion the Subsidiary's business or assets, or compel the Surviving\nCorporation or Subsidiary to dispose of or hold separate all or a material\nportion of the Subsidiary's business or assets, as a result of the Merger; (ii)\nrender the Subsidiary unable to consummate the Merger; (iii) make such\nconsummation illegal; or (iv) impose or confirm material limitations on the\nability of 24\/7 effectively to exercise full rights of ownership of shares of\nthe capital stock of the Surviving Corporation, including without limitation,\nthe right to vote any such shares on all matters properly presented to the\nstockholders of the Surviving Corporation, and no such action shall have been\ntaken or any such statute, rule, regulation, or order enacted, promulgated,\nissued, or deemed applicable to the Merger which in the reasonable judgment of\n24\/7 will produce such result.\n\n               (o) Certificate. 24\/7 shall have received a certificate of the\nCompany, dated the Closing Date, signed by the Chief Executive Officer of the\nCompany, as to such other matters as may be reasonably requested by 24\/7,\nincluding, but not limited to, certificates with respect to the Company's\nCertificate of Incorporation, By-laws, Board of Directors' resolutions relating\nto the transactions contemplated hereby and the incumbency and signatures of\neach of the officers of the Company who shall execute on behalf of the Company\nany document delivered on the Closing Date.\n\n               (p) Escrow Agreement. Each Seller shall have entered into an\nescrow agreement in substantially the form annexed hereto as Exhibit G and,\npursuant thereto, shall have delivered to the Escrow Agent thereunder, the\nportion of the Merger Consideration referred to therein.\n\n               7. Conditions Precedent to Obligations of the Company and each\nSeller . The obligations of the Company and each Seller to consummate the\ntransactions contemplated by this Agreement are subject to the fulfillment, at\nor before the Closing, of each of the following conditions, any of which may be\nwaived by the Company and the Sellers in writing, and 24\/7 and the Subsidiary\nshall use their best efforts to cause such conditions to be fulfilled:\n\n               (a) Representations and Warranties. The representations and\nwarranties of 24\/7 and the Subsidiary in 24\/7's Documents shall be true and\ncorrect in all material respects on and as of the Closing Date with the same\nforce and effect as though the same had been made on and as of the Closing Date.\n\n               (b) Performance by 24\/7 and the Subsidiary. 24\/7 and the\nSubsidiary shall have performed and complied in all material respects with the\nagreements, covenants and conditions required by 24\/7's Documents to be\nperformed or complied with by them at or before the Closing.\n\n               (c) Merger Consideration. The Merger Consideration shall have\nbeen paid as provided in subparagraphs 1(g) and (f) above.\n\n\n                                       25\n\n\n\n               (d) Employment Agreements. 24\/7 shall have entered into the\nEmployment Agreements.\n\n               (e) Opinion of 24\/7's Counsel. 24\/7 and the Subsidiary shall have\ndelivered to the Company and the Sellers an opinion of Proskauer Rose LLP,\ncounsel to 24\/7 and the Subsidiary, dated the Closing Date, in the form of\nExhibit E hereto.\n\n               (f) Certificate. The Company and the Sellers shall have received\na certificate executed by 24\/7, dated the Closing Date, certifying, in such\ndetail as the Company and the Sellers may reasonably request, as to the\nfulfillment of the conditions set forth in subparagraphs (a) and (b).\n\n               (g) Litigation. No action or proceeding shall be pending or\nthreatened before any court, tribunal or governmental body, and no claim or\ndemand shall have been made against 24\/7, the Subsidiary, the Sellers or the\nCompany, seeking to restrain or prohibit or to obtain damages or other relief in\nconnection with the consummation of the transactions contemplated by 24\/7's\nDocuments or the Company's Documents which in the reasonably exercised opinion\nof Sellers makes it inadvisable to consummate such transaction.\n\n               (h) Execution of Related Agreements. 24\/7 and Seller shall have\nentered into the Stockholders' Agreement and Registration Rights Agreement in\nthe form attached hereto as Exhibits A and F respectively.\n\n               8. Closing Deliveries.\n\n               (a) Deliveries of the Company and the Sellers. At the Closing,\nthe Company and the Sellers shall deliver, or shall cause to be delivered, to\n24\/7 and the Subsidiary the following:\n\n                    (i) Certificates representing the Shares, as 24\/7 may\ndesignate, with any required stock transfer tax stamps affixed and canceled and\nall taxes on such transfer, if any, paid in full, all at the expense of Sellers.\nSuch Shares shall be delivered to 24\/7 free and clear of all claims;\n\n                    (ii) Where a Seller is an entity: appropriate documentary\nevidence establishing the capacity and authority of such Seller to sell, assign,\ntransfer and deliver the Shares hereunder and to enter into this Agreement;\n\n                    (iii) The Employment Agreements;\n\n                    (iv) The evidence as to Key Man Life Insurance;\n\n                    (v) The opinion of Fenwick &amp; West LLP, counsel to Sellers;\n\n\n                                       26\n\n\n\n                    (vi) The certificate referred to in subparagraph 6(i)\nhereof, duly executed by each Seller;\n\n                    (vii) Copies of the consents, approvals or waivers referred\nto in subparagraph 6(j) hereof;\n\n                    (viii) duly executed resignations of such directors and\nfiduciaries of the Company as 24\/7 shall designate.\n\n               (b) 24\/7 and Subsidiary Deliveries. At the Closing, 24\/7 and the\nSubsidiary shall deliver or cause to be delivered to the Company and the Sellers\nthe following:\n\n                    (i) Certificates representing shares of capital stock of\n24\/7 and warrants in payment of the Merger Consideration.\n\n                    (ii) The Employment Agreements;\n\n                    (iii) The opinion of Proskauer Rose LLP, counsel to 24\/7 and\nthe Subsidiary;\n\n                    (iv) The certificate referred to in subparagraph 7(f)\nhereof;\n\n                    (v) The agreements referenced in Subparagraph 7(h) hereof.\n\n               9. Restrictive Covenant.\n\n               (a) Confidentiality. The Company and the Sellers shall never use\nor divulge any trade secrets, customer or supplier lists, pricing information,\nmarketing arrangements or strategies, business plans, internal performance\nstatistics, training manuals or other information concerning 24\/7 or the Company\nor its affiliates that is competitively sensitive or confidential. Because the\nbreach or attempted or threatened breach of this restrictive covenant will\nresult in immediate and irreparable injury to 24\/7 for which 24\/7 will not have\nan adequate remedy at law, 24\/7 shall be entitled, in addition to all other\nremedies, to a decree of specific performance of this covenant and to a\ntemporary and permanent injunction enjoining such breach, without posting bond\nor furnishing similar security. The provisions of this paragraph 9 are in\naddition to and in dependent of any agreements or covenants contained in any\nemployment, consulting or other agreement between 24\/7 or the Company and any\nSeller.\n\n               (b) Non-public Information. From and after the consummation of an\ninitial public offering, if any, of 24\/7's securities, to the extent that any of\nthe information furnished pursuant to Section 5(f) hereof would constitute\nmaterial, nonpublic information for purposes of the Securities Exchange Act of\n1934, as amended, each Seller covenants that it will not engage in any purchase\nor sale of 24\/7's securities while in possession of such information and prior\nto the time that such information is made generally known to the public and that\neach Seller shall\n\n\n                                       27\n\n\n\ninform its agents and representatives, who have been given access to such\nmaterial, nonpublic information, of such requirements. The obligations in this\nsubparagraph 9(b) shall survive termination of this Agreement.\n\n               10. Brokers. Each party represents to the other that it has had\nno dealings with any broker or finder in connection with the transactions\ncontemplated by this Agreement other than Interactive Capital Partners LLC. The\nCompany acknowledges and agrees that any commission or other fee that may be due\nto Interactive Capital Partners LLC is its responsibility and shall be paid on\nthe Closing Date in accordance with the terms of a letter dated March 15, 1998\nwhich has been furnished to 24\/7. Should any other claim be made for a broker's,\nfinder's or similar fee, on account of any actions or dealings by a party or its\nagents, such party shall indemnify and hold the other party harmless from and\nagainst any and all liability and expenses, including reasonable attorneys' fees\nincurred by reason of any claim made by such broker.\n\n               11. Indemnification by Sellers. Each Seller shall severally and\nnot jointly and only in proportion to such Seller's pro-rata share of ownership\nof the Company immediately preceding the Closing Date indemnify, defend and hold\nharmless 24\/7 and its affiliates (including the Subsidiary and the Company),\npromptly upon demand at any time and from time to time, against any and all\nlosses, liabilities, claims, actions, damages and expenses, including without\nlimitation reasonable attorneys' fees and disbursements exceeding in the\naggregate more than $50,000 (collectively, \"Losses\"), arising out of or in\nconnection with any of the following: (a) any material misrepresentation or\nbreach of any warranty made by such Seller in any of the Company's Documents;\n(b) any material breach or nonfulfillment of any covenant or agreement made by\nsuch Seller in any of the Company's Documents; (c) the claims of any broker or\nfinder engaged by any Seller other than Interactive Capital Partners LLC; (d)\nany customer claims relating to services provided prior to the Closing, to the\nextent not covered by insurance or reserved against in the Unaudited Balance\nSheet; and (e) without in any manner limiting the foregoing, any liabilities or\nobligations of, or claims or causes of action against, the Company which arise\nwith respect to or relate to any period or periods on or prior to the Closing\nDate, except for those which are set forth or reserved against in the Unaudited\nBalance Sheet or are set forth in a schedule hereto, or were incurred subsequent\nto February 28, 1998, in the ordinary course of business as theretofore\nconducted and are not materially adverse to the operations or prospects of the\nCompany's business. In no event shall the total of any Seller's liability under\nthis paragraph 11 be greater than the portion of the Merger Consideration\ndeposited with the Escrow Agent pursuant to the Escrow Agreement, as provided by\nsubparagraph 13(d), and as shown on Exhibit A to the Escrow Agreement.\n\n               12. Indemnification By 24\/7. 24\/7 shall indemnify, defend and\nhold harmless Sellers, promptly upon demand at any time and from time to time,\nagainst any and all Losses arising out of or in connection with any of the\nfollowing: (a) any misrepresentation or breach of any warranty made by 24\/7 in\nany of 24\/7's Documents; (b) any breach or nonfulfillment of any covenant or\nagreement made by 24\/7 in 24\/7's Documents; and (c) the claims of any broker or\nfinder engaged by 24\/7.\n\n\n                                       28\n\n\n\n               13. Further Provisions Regarding Indemnification.\n\n               (a) Survival. All representations, warranties, indemnities,\ncovenants and agreements made by the Company or the Sellers and 24\/7 in the\nCompany's or 24\/7's Documents shall survive the Closing, notwithstanding any\nexamination or investigation made by or for any party.\n\n               (b) Limitations. Notwithstanding the foregoing, neither the\nCompany nor any Seller, on the one hand, nor 24\/7, on the other (Sellers, on the\none hand, and 24\/7 on the other, each is sometimes hereinafter referred to in\nthis paragraph 13 as a \"party\") shall be entitled to indemnification for Losses\narising out of matters referred to in subparagraphs 11(a) or 12(a), as\napplicable, unless it shall have given written notice to the other party,\nsetting forth its claim for indemnification in reasonable detail, within two\nyears after the Closing Date; provided, however, that the foregoing limitations\non each party's indemnification obligation shall not apply to Losses arising out\nof or in connection with any material misrepresentation made in subparagraphs\n2(a) and 2(c)and paragraph 10 .\n\n               (c) Defense. An indemnified party shall promptly give written\nnotice to the indemnifying party after the indemnified party has knowledge that\nany legal proceeding has been instituted or any claim has been asserted in\nrespect of which indemnification may be sought under the provisions of paragraph\n11 or 12. If the indemnifying party, within 10 days after the indemnified party\nhas given such notice (or within such shorter period of time as an answer or\nother responsive motion may be required), shall have acknowledged in writing his\nor its obligation to indemnify and shall have furnished to the indemnified party\na bond, letter of credit, escrow or similar arrangement in an amount equal to\nthe total amount demanded in such claim or proceed ing, then the indemnifying\nparty shall have the right to control the defense of such claim or proceeding,\nand the indemnified party shall not settle or compromise such claim or\nproceeding without the written consent of the indemnifying party. The\nindemnified party may in any event participate in any such defense with his or\nits own counsel and at his or its own expense.\n\n               (d) Escrow of Shares of 24\/7 Capital Stock. Upon receipt of the\nMerger Consideration pursuant to Paragraph 2 of this Agreement, Sellers shall\ndeliver to the Escrow Agent, pursuant to the Escrow Agreement, a number of\nshares of 24\/7 capital stock and warrants equal to 30% of the Merger\nConsideration, with each Seller to deliver its share of the Merger Consideration\nspecified in Exhibit A to the Escrow Agreement. The shares of 24\/7 capital stock\nand warrants together with any earnings on or accretions thereto shall be held\nby the Escrow Agent pursuant to the terms of the Escrow Agreement. Except for\nshares of 24\/7 capital stock declared as dividends or distributions on the\nescrowed shares in connection with a stock split or other reorganization of\n24\/7, all earnings on or accretions to the Merger Consideration held by the\nEscrow Agent pursuant to the terms of the Escrow Agreement shall be for the\nbenefit of Seller. The Escrow Agreement shall provide the Sellerswith the power\nto direct the sale of escrowed shares (but not the distribution or release of\nthe net monetary proceeds therefrom), to invest the net proceeds from such sales\nin U.S. government securities or investment grade debt securities and to receive\nmonthly payments of the interest from such investments. All interest or other\nincome to such investments shall be for the\n\n\n                                       29\n\n\n\nbenefit of the Seller. 24\/7 shall be entitled to delivery from the Escrow Agent\nof such number of shares of 24\/7 capital stock as shall have a value equal to\nthe amount due 24\/7 pursuant to Paragraph 11 (or an equivalent amount in cash),\nand the Sellers shall give the Escrow Agent all such notices as shall be\nnecessary to obtain such delivery from the Escrow Agent. Subject to any demand\nhereunder that may be pending at such time, each Sellers shall be entitled to\ndelivery from the Escrow Agent of one-half of its share of the escrow fund as\nset forth on Exhibit A to the Escrow Agreement (after giving effect to the\ndelivery, if any, of shares of 24\/7 capital stock and earnings on and accretions\nthereto pursuant to the preceding sentence) on the first anniversary of the\nEffective Time and the balance of its share of the escrow fund upon the second\nanniversary of the Effective Time.\n\n               14. Further Assurances. The parties shall cooperate and take such\nactions, and execute such other documents, at the Closing or subsequently, as\neither may reasonably request in order to carry out the provisions or purpose of\nthis Agreement.\n\n               15. Notices. All notices or other communications in connection\nwith this Agreement shall be in writing and shall be considered given when\npersonally delivered or when mailed by registered or certified mail, postage\nprepaid, return receipt requested, or by overnight courier as follows:\n\n        If to a Seller at the address set forth with respect to such Seller on\nthe signature page hereto.\n\n        With a copy to:\n\n               Fenwick &amp; West LLP\n               1920 N. Street N.W., Suite 650\n               Washington, DC  20036\n               Attn: J.T. Westermeier, Esq.\n\n        If to 24\/7:\n\n               24\/7 Media, Inc.\n               1290 Avenue of the Americas\n               New York, NY  10104\n               Attn: Chief Executive Officer\n\n        With a copy to:\n\n               Proskauer Rose LLP\n               1585 Broadway\n               New York, New York  10036\n               Attn:  Ronald R. Papa, Esq.\n\n\n                                       30\n\n\n\n               16. Entire Agreement. This Agreement (which includes the\nschedules and exhibits hereto) sets forth the parties' final and entire\nagreement with respect to its subject matter and supersedes any and all prior\nunderstandings and agreements. This Agreement can be amended, supplemented or\nchanged, and any provision hereof can be waived, only by a written instrument\nmaking specific reference to this Agreement signed by the party against whom\nenforcement of any such amendment, supplement, change or waiver is sought.\n\n               17. Successors. This Agreement shall be binding upon and shall\ninure to the benefit of the parties hereto and their respective heirs,\nexecutors, administrators, personal representatives, successors and assigns;\nprovided, however, that neither this Agreement nor any right or obligation\nhereunder may be assigned or transferred, except that 24\/7 may assign this\nAgreement and its rights hereunder to any direct or indirect wholly-owned\nsubsidiary of 24\/7.\n\n               18. Paragraph Headings. The paragraph headings in this Agreement\nare for reference purposes only and shall not affect in any way the meaning or\ninterpretation of this Agreement.\n\n               19. Other Discussions. Unless this Agreement shall have been\nterminated, neither the Company nor any Seller shall consider or entertain any\nother offers for, or hold discussions with any person regarding, the acquisition\nof any assets or capital stock of the Company.\n\n               20. Legal Fees and Expenses. If the Closing occurs, up to $40,000\nof legal costs, fees or expenses incurred by Sellers and the Company shall be\nborne by 24\/7.\n\n               21. Severability. If any provision of this Agreement shall be\nheld by any court of competent jurisdiction to be illegal, invalid or\nunenforceable, such provision shall be construed and enforced as if it had been\nmore narrowly drawn so as not to be illegal, invalid or unenforce able, and such\nillegality, invalidity or unenforceability shall have no effect upon and shall\nnot impair the enforceability of any other provision of this Agreement.\n\n               22. Governing Law and Consent to Jurisdiction. This Agreement\nshall be gov erned by and construed and interpreted in accordance with the\ninternal law of the State of New York (without reference to its rules as to\nconflicts of law). The state courts of the State of New York in the New York\nCounty and, if the jurisdictional prerequisites exist at the time, the United\nStates District Court for the Southern District of New York, shall have sole and\nexclusive jurisdictions to hear and determine any dispute or controversy arising\nunder or concerning this Agreement. In any action or proceeding concerning such\ndispute or controversy, the parties consent to jurisdiction and waive personal\nservice of any summons, complaint or other process; a summons or complaint in\nany such action or proceeding may be served by mail in accordance with paragraph\n15.\n\n\n                                       31\n\n\n\n               23. Counterparts. This Agreement may be executed by facsimile and\nin one or more counterparts, each of which shall be deemed an original, but all\nof which taken together shall constitute one and the same instrument.\n\n\n                                       32\n\n\n\n               IN WITNESS WHEREOF, the parties have duly executed this Agreement\non the date first above written.\n\n24\/7 MEDIA, INC.\n\nBy: \/s\/ David J. Moore\n    ------------------------------\n    Name:  David J. Moore\n    Title: Chief Executive Officer\n\nINTERACTIONS ACQUISITION CORP.\n\nBy: \/s\/ David J. Moore\n    ------------------------------\n    Name:  David J. Moore\n    Title: Chief Executive Officer\n\nINTELLIGENT INTERACTIONS CORPORATION\n\nBy: \/s\/ Yale R. Brown\n    ------------------------------\n    Name:  Yale R. Brown\n    Title: Chief Executive Officer\n\n    Sellers:\n\n\n<\/pre>\n<table>\n<caption>\n<s>        <c>                         <c>        <c><br \/>\n           \/s\/ Yale R. Brown                      \/s\/ John N. Gonzalez<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n           Yale Brown                             John N. Gonzalez<br \/>\nAddress:   201 N. Union Street         Address:   Versant Object Technology<br \/>\n           Suite 110                              1380 Willow Rd., Suite 210<br \/>\n           Alexandria, VA  22314                  Menlo Park, CA  94025<\/p>\n<p>           \/s\/ Robert Lippmann                    \/s\/ Alison Lynch<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n           Robert Lippmann                        Alison Lynch<br \/>\nAddress:   201 N. Union Street         Address:   201 N. Union Street<br \/>\n           Suite 110                              Suite 110<br \/>\n           Alexandria, VA  22314                  Alexandria, VA  22314<\/p>\n<p>                                       33<\/p>\n<p>           \/s\/ Matthew B. Walker                  \/s\/ David Banks<br \/>\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n           Matthew B. Walker                      David Banks<br \/>\nAddress:   201 N. Union Street         Address:   Versant Object Technology<br \/>\n           Suite 110                              1380 Willow Rd., Suite 210<br \/>\n           Alexandria, VA  22314                  Menlo Park, CA  94025<br \/>\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n<p>    Trinity Ventures V, L.P.<br \/>\n    A California Limited Partnership<\/p>\n<p>    By: Trinity TVL Partners V, L.P.<\/p>\n<p>    A California Limited Partnership, its General Partner<\/p>\n<p>By: \/s\/ Trinity TVL Partners V, L.P.<br \/>\n    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n    Name:<br \/>\n               A General Partner<\/p>\n<p>    Address:   300 Sand Hill Road<br \/>\n               Building 1, Suite 240<br \/>\n               Menlo Park, CA  94025<br \/>\n               Attn:  Noel Fenton<\/p>\n<p>    Trinity V Side-By-Side Fund, L.P.<\/p>\n<p>    By: Trinity TVL Partners V, L.P.<br \/>\n    A California Limited Partnership, its General Partner<\/p>\n<p>By: \/s\/ Trinity TVL Partners V, L.P.<br \/>\n    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<br \/>\n    Name:<\/p>\n<p>               A General Partner<\/p>\n<p>    Address:   300 Sand Hill Road<br \/>\n               Building 1, Suite 240<br \/>\n               Menlo Park, CA  94025<br \/>\n               Attn:  Noel Fenton<\/p>\n<p>                                       34<\/p>\n<p>    Zero Stage Capital V Limited Partnership<\/p>\n<p>    By: Zero Stage Capital Associates Limited Partnership, General Partner<\/p>\n<p>    By: \/s\/ Zero Stage Capital Associates Limited Partnership<br \/>\n        &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;<\/p>\n<p>    Name:<\/p>\n<p>    Address:   101 Main Street, 17th fl<br \/>\n               Kendall Square<br \/>\n               Cambridge, MA  02142-1519<br \/>\n               Attn:  Stanley Fung<\/p>\n<p>    F&amp;W Investments 1996<br \/>\n    A California Partnership<\/p>\n<p>By: \/s\/ F&amp;W Investments<br \/>\n    &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;<\/p>\n<p>               A General Partner<\/p>\n<p>    Address:   Two Palo Alto Square<br \/>\n               Palo Alto, CA  94306<br \/>\n               Attn:  Laird Simons<\/p>\n<p>                                       35<\/p>\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-42991","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\/42991","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=42991"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42991"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42991"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}