{"id":42993,"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-sift-inc.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-sift-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-24-7-media-inc-and-sift-inc.html","title":{"rendered":"Agreement and Plan of Merger &#8211; 24\/7 Media Inc. and Sift Inc."},"content":{"rendered":"<pre>                                 AGREEMENT AND PLAN OF MERGER\n                                         By and Among\n                                       24\/7 Media, Inc.\n                               Factor K Acquisition Corporation\n                                              and\n                                          Sift, Inc.\n\n\n\n\n\n\n\n\n\n\n               AGREEMENT AND PLAN OF MERGER, dated as of March 8, 1999 (this\n\"Agreement\"), among 24\/7 Media, Inc., a Delaware corporation (\"24\/7\"), Factor K\nAcquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of\n24\/7 (the \"Subsidiary\"), and Sift, Inc. (the \"Company\"), a California\ncorporation.\n\n               WHEREAS, the Boards of Directors of 24\/7, the Subsidiary, and the\nCompany have each approved the merger (the \"Merger\") of the Company with and\ninto the Subsidiary, in accordance with the Corporations Code of the State of\nCalifornia (\"California Law\") and 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(a) of the Internal Revenue Code of 1986, as amended (the \"Code\");\nand\n\n               WHEREAS, for accounting purposes, it is intended that the Merger\nshall be accounted for as a pooling of interests; and\n\n               WHEREAS, each shareholder of the Company is the owner of such\nnumber and classes of shares of capital stock (the \"Shares\") of the Company as\nis set forth in Schedule 1 hereto (the \"Ownership Table\"), such Shares\ncollectively represent 100% of the issued and outstanding shares of capital\nstock of the Company.\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 and the Company hereby agree as follows:\n\n\n               1.     The Merger.\n\n               (a) The Merger At the Effective Time (as defined in Section 1(b))\nand subject to and upon the terms and conditions of this Agreement, Delaware Law\nand California Law, the Company shall be merged with and into the Subsidiary,\nthe separate corporate existence of the Company shall cease, and the Subsidiary\nshall continue as the surviving corporation. The Subsidiary as the surviving\ncorporation after the Merger is hereinafter sometimes referred to as the\n\"Surviving Corporation.\" In connection with the Merger, the Surviving\nCorporation shall change its name to \"Sift, Inc.\"\n\n               (b) Effective Time; Closing. (i) As promptly as practicable after\nthe Closing (as defined in paragraph (ii) below), the parties hereto shall cause\nthe Merger to be consummated by (A) filing an, agreement of merger and any other\nrequired documents with the Secretary of State of the State of California, in\nsuch forms as required by, and executed in accordance with the relevant\nprovisions of, California Law and (B) filing a certificate of merger and any\nother required documents with the Secretary of State of the State of Delaware,\nin such forms as required by, and executed in\n\n\n\n\naccordance with the relevant provisions of, Delaware Law. When used in this\nAgreement, the term \"Effective Time\" shall mean the date and time at which the\nMerger shall be filing with and acceptance from the State of Delaware.\n\n                   (ii)   The Closing of the transactions contemplated by \nthis Agreement (the \"Closing\"), shall be held at the offices of Proskauer Rose\nLLP, 1585 Broadway, New York, New York 10036, at 1:00 P.M., New York time, on a\ndate designated by 24\/7 upon two business days' prior notice of the satisfaction\nor waiver of the conditions set forth in Sections 6 and 7 (the \"Closing Date\"),\nbut in no event later than March 15, 1999, unless the parties shall agree upon a\nlater date.\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 California Law\nand Delaware Law. Without limiting the generality of the foregoing, and subject\nthereto, at the Effective Time all the rights, privileges, powers, franchises,\nand property of the Company shall vest in the Surviving Corporation, and all\nrestrictions, disabilities, duties, debts, and liabilities of the Company shall\nbecome the restrictions, disabilities, duties, debts, and liabilities of the\nSurviving Corporation.\n\n               (d) Certificate of Incorporation; By-Laws. At the Effective Time,\nthe Certificate of Incorporation of the Subsidiary shall be the Certificate of\nIncorporation of the Surviving Corporation, except that the name of the\nSurviving Corporation shall be \"Sift, Inc.\" and the By-Laws of the Subsidiary\nshall be the By-Laws of the Surviving Corporation and shall continue in full\nforce and effect until thereafter amended.\n\n               (e) Directors and Officers. The directors and officers set forth\non Schedule 1(e) hereto shall be the directors and officers of the Surviving\nCorporation, in each case until their respective successors are duly elected or\nappointed and qualified.\n\n               (f) Consideration; Conversion of Securities. At the Effective\nTime, by virtue of the Merger and without any action on the part of 24\/7, the\nSubsidiary or the Company,\n\n                   (i)  each share of common stock of the Company held in the \ntreasury of the Company shall be cancelled and retired without payment of any\nconsideration therefor and cease to exist; and\n\n                   (ii) each share of capital stock of the Company shall be\nexchanged for validly issued, fully paid and non-assessable shares of common \nstock, par value $.01 per share, of 24\/7 (\"24\/7 Common Stock\") as follows (the\n\"Merger Consideration\"):\n\n                   (A) each share of common stock of the Company shall be\n               converted into the right to receive 0.54753537 shares of 24\/7\n               Common Stock,\n\n                   (B) each share of Series A Preferred Stock of the Company\n               shall be converted into the right to receive 0.54753537 shares of\n               24\/7 Common Stock,\n\n                                              2\n\n\n                   (C) each share of Series B Preferred Stock of the Company\n               shall be converted into the right to receive 0.54753537 shares of\n               24\/7 Common Stock, and\n\n                   (D) (1) the Company's obligations with respect to each\n               outstanding option, as set forth on Schedule 2(c) hereto, to\n               purchase shares of common stock of the Company issued pursuant to\n               the Company's 1994 Equity Incentive Plan and pursuant to non-plan\n               stock options (the \"Options\") , whether vested or unvested,\n               shall, by virtue of this Agreement and without any further action\n               of the Company, 24\/7 or the holder of any Option, be assumed by\n               24\/7. Unless otherwise elected by 24\/7 prior to the Effective\n               Time, 24\/7 shall make such assumption in such manner that (i)\n               24\/7 is a corporation \"assuming a stock option in a transaction\n               to which Section 424(a) applies\" within the meaning of Section\n               424 of the Code or (ii) to the extent that Section 424 of the\n               Code does not apply to such Option, 24\/7 would be such a\n               corporation were Section 424 of the Code applicable to such\n               Option; and, if not so otherwise elected, after the Effective\n               Time, all references to the Company in the Company's 1994 Equity\n               Incentive Plan and the applicable stock option agreements shall\n               be deemed to refer to 24\/7, which shall have assumed the\n               Company's 1994 Equity Incentive Plan and such non-plan stock\n               option agreements as of the Effective Time by virtue of this\n               Agreement and without any further action.\n\n\n                      (2) Each Option so assumed by 24\/7 under this Agreement\n               shall continue to have, and be subject to, the same terms and\n               conditions set forth in the Company's 1994 Equity Incentive Plan\n               and the applicable stock option agreements as in effect\n               immediately prior to the Effective Time, except that (i) such\n               Option will be exercisable for that number of shares of 24\/7\n               Common Stock equal to the product of the number of shares of\n               common stock of the Company that were purchasable under such\n               Option immediately prior to the Effective Time multiplied by the\n               quotient determined by dividing the fair market value of the\n               common stock of the Company by the fair market value of the 24\/7\n               Common Stock, rounded to the nearest whole number of shares of\n               24\/7 Common Stock and (ii) the per share exercise price for the\n               shares of 24\/7 Common Stock issuable upon exercise of such\n               assumed Option will be equal to the exercise price per share of\n               common stock of the Company at which such Option was exercisable\n               immediately prior to the Effective Time multiplied by the\n               quotient determined by dividing fair market value of 24\/7 Common\n               Stock by the fair market value of the common stock of the\n               Company, and rounding the resulting exercise price up to the\n               nearest whole cent. For purposes of this Section 1(f)(iii)(D),\n               the fair market value of 24\/7 Common Stock is based on the\n               closing price per share on the trading day immediately following\n               (but not including) the Closing Date, as reported in The Wall\n               Street Journal.\n\n               (3) As soon as reasonably practicable after the Effective Time,\n               the Company will deliver to Option holders appropriate notices\n               setting forth such holders' rights pursuant to the Company's 1994\n               Equity Incentive Plan and the applicable stock option agreements\n               evidencing the Options and confirming that the Company's 1994\n\n                                              3\n\n\n               Equity Incentive Plan and the Options have been assumed by 24\/7\n               in accordance with the terms and conditions required by this\n               Section 1(f)(iii)(D). 24\/7 hereby agrees to register such Options\n               with the Securities and Exchange Commission on Form S-8 within a\n               reasonable period subsequent to the Effective Time.\n\n               (g)  Surrender and Payment.\n\n                    (i)  Except as set forth in Section 1(h) below, each holder \nof Shares that have been converted into a right to receive the Merger\nConsideration, upon surrender at Closing of a certificate or certificates\nrepresenting such Shares, together with properly executed stock powers and stock\ntransfer stamps covering such Shares, will be entitled to receive the Merger\nConsideration payable in respect of such Shares, which Merger Consideration\nshall be delivered at the Closing.\n\n                    (ii) All certificates representing Shares outstanding\nprior to the Closing Date shall continue to evidence ownership of shares of 24\/7\nCommon Stock until such Shares are surrendered and exchanged as provided herein.\nAll certificates representing Shares outstanding prior to the Closing Date 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. The Merger Consideration delivered upon the surrender\nfor exchange of the Shares in accordance with the terms hereof shall be deemed\nto have been issued in full satisfaction of all rights pertaining to such\nShares, and after the Effective Time, there shall be no further registration or\ntransfers of Shares outstanding prior to the Closing Date.\n\n\n                    (iii) No fractional shares of 24\/7 Common Stock shall be\nissued upon conversion of Shares. In lieu of any fractional share of 24\/7 Common\nStock to which the holder of Shares would otherwise be entitled, 24\/7 shall\nround to the nearest whole share of 24\/7 Common Stock.\n\n               (h) Escrow Indemnity Account. Promptly after the Closing Date,\n24\/7 shall deliver to the escrow agent (the \"Escrow Agent\") under the escrow\nagreement dated the Closing Date, substantially in the form of Exhibit A hereto\n(the \"Escrow Indemnity Agreement\"), a certificate representing a number of\nshares of 24\/7 Common Stock equal to ten percent (10%) of the Merger\nConsideration, to be held pursuant to the provisions of Section 13(d) of this\nAgreement and the Escrow Indemnity Agreement to be held in an escrow account\n(the \"Escrow Indemnity Account\") pursuant to the terms of the Escrow Indemnity\nAgreement.\n\n               (i) Dissenter's Rights. The holders of Shares as to which\ndissenter's rights shall have been duly demanded under applicable law\n(\"Dissenting Shares\"), if any, shall be entitled to payment by the Surviving\nCorporation only of the fair value of such shares plus accrued interest to the\nextent permitted by and in accordance with the provisions of applicable law;\nprovided, however, that (i) if any holder of the Dissenting Shares shall, under\nthe circumstances permitted by applicable law, subsequently deliver a written\nwithdrawal of such holder's demand or (ii) if any holder fails to establish such\nholder's entitlement to rights to payment as provided under applicable law, such\nholder or holders\n\n                                              4\n\n\n(as the case may be) shall forfeit such right to payment for such shares and\nsuch shares shall thereupon be deemed to have been converted into 24\/7 Common\nStock as of the Effective Time.\n\n           2.  Representations and Warranties of the Company. The Company\nrepresents, warrants and agrees that:\n\n               (a)  Ownership and Delivery of the Shares and Execution and \nEffect of Agreement.\n                    (i)  The Company has all necessary rights, power and \nauthority to enter into and to deliver this Agreement and to perform the\nobligations hereunder and to consummate the transactions contemplated hereby, as\nwell as all other agreements, certificates and documents exe cuted or delivered,\nor to be executed or delivered, by the Company in connection herewith, including\nthe agreements listed pursuant to Section 6(c) hereof (collectively, with this\nAgreement, the \"Company Documents\"). The execution and delivery of this\nAgreement by the Company and the consummation by the Company of the transactions\ncontemplated hereby have been duly and validly authorized by all necessary\ncorporate action on the part of the Company, and no other corporate proceedings\nare necessary to authorize this Agreement or to consummate the transactions\ncontemplated hereby. Each of the Company Documents have been duly and validly\nexecuted and delivered by the Company, and, assuming the due authorization,\nexecution and delivery of this Agreement by 24\/7 and the Subsidiary, are (or\nwhen executed and delivered will be) legal, valid and binding obligations of the\nCompany.\n\n                    (ii) The board of directors of the Company (A) has declared \nthat this Agreement, the Merger and the other transactions contemplated hereby\nand thereby are advisable and in the best interests of the shareholders of the\nCompany, (B) has authorized, approved and adopted this Agreement, the Merger and\nthe other transactions contemplated hereby and thereby, and (C) has taken\nappropriate action, pursuant to California Law and Delaware Law, to cause the\nMerger to become effective at the Effective Time.\n\n                    (iii) This Agreement, the Merger and the other\ntransactions contemplated hereby and thereby have been authorized, approved and\nadopted by more than a majority of the shareholders of the Company.\n\n               (b)  Organization and Qualification. The Company is a corporation\nduly organized, validly existing and in good standing under the laws of the\nState of California and has the requisite power and authority to own, lease and\noperate its assets and properties and to conduct its business as it is now being\nconducted. The Company is duly qualified or licensed as a foreign corporation to\ndo business and is in good standing under the laws of those jurisdictions listed\non Schedule 2(b) hereto, constituting each jurisdiction in which the conduct of\nits business or the ownership or leasing of its assets requires such\nqualification. The copies of the Company's Articles of Incorporation, as amended\n(certified by the Secretary of State of California), and By-Laws (certified by\nthe Secretary of the Company) that have been previously delivered to 24\/7 are\ncorrect and complete.\n\n\n                                              5\n\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: 20,000,000 shares of common stock, no \npar value per share, of which 7,704,161 shares will be issued and outstanding.\n\n                    (ii)   Preferred Stock:  a total of 9,445,926 shares of \npreferred stock, no par value per share, of which 3,445,926 shares have been\ndesignated Series A Preferred Stock and 6,000,000 shares have been designated\nSeries B Preferred Stock. Of the authorized shares of preferred stock listed\nabove, 3,361,167 shares of Series A Preferred Stock and 2,870,426 shares of\nSeries B Preferred Stock are issued and outstanding.\n\n                    (iii)  Options and Reserved Shares:  as set forth on \nSchedule 2(c) hereto, Options to purchase 1,996,778 shares of common stock of\nthe Company, all issued to employees and contractors of the Company pursuant to\nthe Company's 1994 Equity Incentive Plan and non-plan stock options, are\noutstanding. Schedule 2(c) sets forth the exercise price, vesting dates, dates\nof grant and expiration dates of such Options and whether such Options are\nnonqualified stock options or \"incentive stock options\" within the meaning of\nSection 422(b) of the Code. No shares of restricted stock have been granted\nunder the 1994 Equity Incentive Plan or outside such plan.\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 Section 2(c), there are no out standing shares of capital\nstock or other equity or debt securities of the Company. Except as set forth in\nthis Section 2(c) and in Schedule 2(c), as of the Closing Date there will be no\nexisting option, warrant, call, commitment or other agreement requiring the\nissuance or sale of any additional shares of stock or other equity or debt\nsecurities of the Company and no shares of stock or other equity or debt\nsecurities of the Company are reserved for issuance for any purpose, and there\nwill be no agreements, commitments or restrictions relating to ownership or\nvoting of any shares of stock or other securities of the Company, other than\nthose agreements addressed in Section 4(e).\n\n               (d)  Subsidiaries and Affiliates. The term \"affiliate\" shall mean\nany person or entity that directly or indirectly, through one or more\nintermediaries, controls, is controlled by, or is under common control with, the\nCompany. The Company has no subsidiaries or affiliates and has no equity\ninterest in any corporation, partnership, joint venture or other entity. The\nCompany has conducted its business only through the Company.\n\n               (e)  Financial Statements. The Company has previously delivered \nto 24\/7 (i) the balance sheets of the Company as at August 31, 1997, and the\nrelated audited statements of operations and retained earnings and changes in\nfinancial position for the fiscal year then ended, as examined by Ireland, San\nFilippo, LLP; the Company's balance sheet as at August 31, 1997 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 (ii) the unaudited\nbalance sheet of the Company as at November 30, 1998 (the \"Unaudited Balance\nSheet\"), and the related unaudited statements of operations and retained\nearnings for the fifteen months then ended (together with the Unaudited Balance\nSheet, the\n\n                                              6\n\n\n\"Unaudited Financials\"). Each of the foregoing financial statements is complete\nand correct, is in accordance with the Company's books and records, has been\nprepared in accordance with generally accepted accounting principles applied on\na consistent basis (\"GAAP\"), and presents fairly the fin ancial 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               (f)  Liabilities. All liabilities of the Company (whether \naccrued, unmatured, contingent, or otherwise and whether due or to become due,\nbut not including the Company's obligations to perform under contracts other\nthan by the payment of money) are set forth or ade quately reserved against on\nthe face of the Audited Balance Sheet and the Unaudited Balance Sheet, in each\ncase in accordance with generally accepted accounting principles consistently\napplied, except for liabilities incurred since August 31, 1997 (with respect to\nthe Audited Balance Sheet), or since November 30, 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. The Company does not know of any basis for the assertion\nagainst the Company of any other loss contingency of a nature defined by GAAP.\n\n               (g)  No Adverse Change. To the Company's knowledge, since \nNovember 30, 1998, the Company has operated its business consistent with\nordinary commercial business practices and only in the ordinary course of\nbusiness as theretofore conducted, and consistent with a development stage\ncompany, there has been no:\n\n                    (i) amendments or changes to the Articles of Incorporation \nor By-Laws of the Company;\n\n                    (ii) material adverse change in the business, properties,\nassets, liabilities, commitments, earnings, financial condition or prospects of \nthe Company;\n\n                    (iii) damage or destruction to property or assets of the\nCompany resulting in a loss or cost to the Company of more than $50,000 in the\naggregate, whether or not covered by insurance; or\n\n                    (iv) act or omission which, if taken or omitted after the\ndate of this Agreement and before the Closing would conflict with Section 6(a).\n\n               (h)  Taxes. The Company has properly filed all federal, foreign,\nstate, local and other tax returns and reports which are required to be filed by\nit. All such tax returns were true, correct and complete, and all taxes,\ninterest and penalties due and payable as shown on such returns or claimed to be\ndue by any taxing authority have been timely paid. All unpaid federal, foreign,\nstate, local and other taxes, fees, assessments, duties and other similar\ngovernmental charges payable by the Company or which will, with the passage of\ntime, become payable by the Company (including interest and penalties) whether\nor not disputed (x) with respect to any period prior to August 31, 1997, have\nbeen adequately reserved against in accordance with generally accepted\n\n                                        7\n\n\naccounting principles on the face of the Audited Balance Sheet, and (y) with\nrespect to any period prior to November 30, 1998 have been adequately reserved\nagainst in accordance with generally accepted accounting principles on the face\nof the Unaudited Balance Sheet. There are no outstanding waivers or extensions\nof time with respect to the assessment or audit of any tax or tax return of the\nCompany, or audits, examinations or claims now pending or matters under\ndiscussion with any taxing authority in respect of any tax of the Company. The\nCompany has furnished to 24\/7 true copies of the federal, foreign, state and\nlocal tax returns of the Company for the fiscal years ended on August 31 for the\nyears 1995 through 1997, which tax returns have been filed with the relevant\ntaxing authorities. The Company has not at any time consented to have the\nprovisions of Section 341(f)(2) of the Code apply to it. All taxes to be\ncollected or withheld by the Company have been duly collected or withheld and\nany such amounts that were required to be remitted to any taxing authority have\nbeen duly remitted. There are no tax rulings, requests for ruling, closing\nagreements or changes of accounting method relating to the Company that could\naffects its tax liability for any period after the Effective Time. There will\nnot be includible in the Company's gross income for a taxable period after the\nEffective Time any amount attributable to a prior tax period, as a result of any\nof the following methods of accounting: installment, completed contract,\nlong-term contract, cash, or as a result of the application of Section 481 of\nthe Code or comparable provisions of state, local or foreign tax law. For\npurposes of this Agreement, \"tax\" or \"taxes\" means taxes of any kind, levies or\nother like assessments, customs, duties, imposts, charges or, including, without\nlimitation, income, gross receipts, ad valorem, value added, excise, real or\npersonal property, asset, sales, use, license, payroll, transaction, capital,\nnet worth and franchise taxes, estimated taxes, withholding, employment, social\nsecurity, workers compensation, occupation or other governmental taxes imposed\nor payable to the United States, or any state, local, or foreign government or\nsubdivision or agency thereof, and in each instance such term shall include any\ninterest, penalties or additions to tax attributable to any such tax.\n\n               (i)  Title to Properties; Absence of Encumbrances. The Company \nhas good and marketable title to or, in the case of leases and licenses, valid\nand subsisting leasehold interests or licenses in, all of its properties and\nassets of whatever kind (whether real or personal, tangible or intangible),\nincluding, without limitation, all properties and assets that are shown on the\nAudited Balance Sheet or the Unaudited Balance Sheet (except for assets sold in\nthe ordinary course of business since August 31, 1997, and November 30, 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 encumbrances of\nany kind whatsoever, except as may be set forth in Schedule 2(i) hereto and\nexcept for liens for current taxes and assessments not yet due and payable\n(which the Company will promptly pay when due if due prior to the Closing Date).\nAll assets, properties and rights relating to the Company's business are held\nby, and 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 2(j) 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's knowledge, all such real property,\nbuildings and structures, and the equipment therein, and the operations and\nmaintenance thereof,\n\n                                              8\n\n\ncomply with any applicable agreements and restrictive covenants and conform to\nall applicable legal requirements including those relating to the environment,\nhealth and safety, land use and zoning, and all work required to be done by the\nCompany as landlord or tenant has been duly performed. No condemnation or other\nproceeding is pending or, to the knowledge of the Company, after due investi\ngation, threatened, which would affect the use of any such property by the\nCompany. Schedule 2(j) hereto contains a complete and correct list and brief\ndescription of all equipment, machinery, computers, furniture, leasehold\nimprovements, vehicles and other personal property owned or leased by the\nCompany and all interests therein. The Company's buildings and other structures,\nequipment and other assets (whether leased or owned) are in good operating\ncondition 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 been used in the Company's\nbusiness, all applications for registration and registrations for such\ntrademarks, copyrights and patents, and all mask works, trade secrets,\nconfidential and proprietary information, compositions of matter, formulas,\ndesigns, proprietary rights, know-how and processes (all of the foregoing\ncollectively hereinafter referred to as the \"Proprietary Assets\") and all\nlicenses, contracts, rights and arrangements with respect to the foregoing, are\nset forth in Schedule 2(k) hereto. The Company has furnished to 24\/7 true and\ncomplete copies of each of the foregoing. Except as set forth in Schedule 2(k),\nthe Company owns the entire, unencumbered right, title and interest to all such\nproperties free and clear of all claims, and, except as set forth in Schedule\n2(k), no rights or licenses to others have been granted with respect to any of\nsuch prop erties. Except as set forth in Schedule 2(k), all filings and other\naction necessary to perfect the full legal right of the Company in the United\nStates to the foregoing have been effected. Except as set forth in Schedule\n2(k), the Company owns or possesses the right to use all the trademarks, service\nmarks, 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 2(k), the Company has not\nreceived notice of any claimed conflict with respect to any of the foregoing.\nThe Company has no knowledge of any default or alleged default which with notice\nor lapse of time or both would constitute a default on the part of any party in\nthe performance of any obligation to be performed or paid by any party under any\nlicenses, contracts, agreements or arrangements referred to in or submitted as a\npart of Schedule 2(k). The Company has taken, and until the Closing Date, the\nCompany will use its best efforts to take, all steps reasonably necessary to\npreserve its legal rights in, and the secrecy of, all its Proprietary Assets,\nexcept those for which disclosure is required for legitimate business or legal\nreasons. All intellectual property rights to all processes, systems and\ntechniques used by the Company that were developed by any employee of the\nCompany engaged in research or product development while such employee was\nemployed by the Company have, by virtue of an invention assignment agreement,\nbeen assigned to the Company. In addition, all intellectual property rights to\nall processes, systems and techniques used by the Company or which the Company\ncurrently intends to use in its business which were developed by any of its\nemployees at any time have been assigned by such employees to the Company.\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 2(l) hereto, includ-\n\n                                       9\n\n\ning summaries of the terms of any unwritten commitments. Except as set forth in \nSchedule 2(l):\n\n\n                    (i)  the Company, and to the knowledge of the Company, the \nother parties thereto, have complied in all material respects with such\ncontracts, leases and commitments, all of which are valid and enforceable;\n\n                    (ii) such contracts, leases and commitments are in full\nforce and effect and there exists no event or condition which with or without\nnotice or lapse of time would be a default thereunder, give rise to a right to\naccelerate or terminate any provision thereof or give rise to any lien, claim,\nencumbrance or restriction on any of the assets or properties of the Company;\nand\n\n                    (iii) all of such contracts, leases and commitments have\nbeen entered into on an arm's-length basis, and none is materially burdensome to\nthe Company's business.\n\nThe Company is not a party, nor is any of its assets or business subject, to any\ncontract, lease or commitment not listed in Schedule 2(l) (including without\nlimitation, purchase or sales commitments, financing or security agreements or\nguaranties, repurchase agreements, agency agree ments, manufacturers\nrepresentative agreements, commission agreements, employment or collective\nbargaining agreements, pension, bonus or profit-sharing agreements, group\ninsurance, medical or other fringe benefit plans, and leases of real or personal\nproperty), other than contracts terminable without penalty on not more than 30\ndays' notice that do not involve, individually or in the aggregate, the receipt\nor expenditure of more than $50,000 in any one year. The Company is en gaged in\nno material disputes with customers or suppliers. To the knowledge of the\nCompany, no customer or supplier is considering termination, non-renewal or any\nadverse modification of its ar rangements with the Company, and the Company has\nnot received any written notice that the transactions contemplated by this\nAgreement would have a material adverse effect on the Company's relationship\nwith any of its suppliers or customers.\n\n               (m)  No Conflicts, Required Filings or Consents; Permits; \nCompliance with Laws.\n\n                    (i) Except as set forth in Schedule 2(m) , the execution and\ndelivery of this Agreement by the Company does not, and the performance of this\nAgreement by the Company will not, (A) conflict with or violate the Articles of\nIncorporation or By-Laws of the Company, (B) conflict with or violate any law,\nrule, regulation, order, judgment or decree applicable to the Company or by\nwhich its properties are bound or affected or (C) result in any breach of or\nconstitute a default (or an event which with notice or lapse of time or both\nwould become a default) under, or impair the Company's rights or alter the\nrights or obligations of any third party under, or give to others any rights of\ntermination, amendment, acceleration or cancellation of, any contracts material\nto the business of the Company or result in the creation of a lien or\nencumbrance on any of the properties or assets of the Company pursuant to, any\nnote, bond, mortgage, indenture, contract, agreement, lease, license, permit,\nfranchise or other instrument or obligation to which the Company is a party or\nby which the Company or its properties are bound or affected.\n\n\n                                       10\n\n\n                    (ii) The execution and delivery of this Agreement by the\nCompany will not require any consent, approval, authorization or permit of, or\nfiling with or notification to, any governmental entity, except (A) for\napplicable requirements, if any, of the Securities Act of 1933, as amended (the\n\"Act\"), the Exchange Act, the Blue Sky Laws and the Hart Scott Rodino Antitrust\nImprovements Act of 1976, as amended and (B) where the failure to obtain such\nconsents, approvals, authorizations or permits, or to make such filings or\nnotifications, would not prevent or delay consummation of the Merger, or\notherwise prevent the Company from performing its obligations under this\nAgreement.\n\n                    (iii) The Company holds the governmental licenses, permits\nand authoriza tions listed in Schedule 2(m) hereto. Except as set forth in\nSchedule 2(m), such licenses, permits and authorizations are valid and\nunimpaired, will be unaffected by a transfer of all of the Shares 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 governmental\nauthorities have been properly made.\n\n               (n)  Employees. Schedule 2(n) hereto contains a list of the\nnames, office locations, compensation and years of credited service for\nseverance, vacation and pension plan purposes of all full- and part-time\nemployees of the Company as at February 15, 1999. The Company does not know of\nany efforts within the last three years to attempt to organize the Company's\nemployees, and no strike or labor dispute involving the Company has occurred\nduring the last three years or, to the knowledge of the Company, is threatened.\nNo key employee of the Company has indicated that he is considering terminating\nhis employment. The Company has complied with applicable wage and hour, equal\nemployment, safety and other legal requirements relating to its employees.\n\n               (o)  Employee Benefit Plans.\n\n                    (i) Except as set forth on Schedule 2(o) hereto, neither the\nCompany nor any entity that would be deemed a \"single employer\" with the Company\nunder Section 414(b), (c), (m) or (o) of the Code or Section 4001 of the\nEmployee Retirement Income Security Act of 1974, as amended (\"ERISA\") (an \"ERISA\nAffiliate\") maintains, sponsors, contributes to, or has or has had an obligation\nto, or otherwise participated in or participates in or in any way, directly or\nindirectly, has or has had any liability with respect to any \"employee benefit\nplan,\" as defined in Section 3(3) of ERISA, or any other bonus, profit sharing,\npension, deferred compensation, incentive, stock option, fringe benefit, health,\nwelfare, change in control, or other plan, agreement, policy, trust fund, or\narrangement, whether written or unwritten, insured or self-insured (each a\n\"Plan\"). None of the Company, any ERISA Affiliate or any of their respective\npredecessors has ever contributed to, contributes to, has ever been required to\ncontribute to, or otherwise participated in or participates in or in any way,\ndirectly or indirectly, has any liability with respect to any plan subject to\nSection 412 of the Code, Section 302 of ERISA or Title IV of ERISA, including,\nwithout limitation, any \"multiemployer plan\" (within the meaning of Sections\n(3)(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code), or any single\nemployer pension plan (within the meaning of Section 4001(a)(15)\n\n                                       11\n\n\nof ERISA). No amounts payable under the Company's 1994 Equity Incentive Plan\nwill fail to be deductible for federal income tax purposes by virtue of Section\n280G of the Code. The consummation of the transactions contemplated by this\nAgreement will not give rise to any liability of the Company for severance pay\nor termination pay or accelerate the time of payment or vesting or increase the\namount of compensation or benefits due to an employee, director, shareholder or\nbeneficiary of the Company (whether current, former or restricted) or their\nbeneficiaries solely by reason of such transactions or by reason of a\ntermination of employment following such transactions. No event, condition or\ncircumstance exists that would prevent the amendment or termination of any Plan.\nSchedule 2(o) hereto contains a list of all Plans, benefits or perks of the\nCompany and a description of the Company's severance pay policy. A copy of each\nsuch Plan has previously been delivered by the Company to 24\/7.\n\n                    (ii)  With respect to each of the Plans on Schedule 2(o):\n\n                    (A)  each Plan intended to qualify under Section 401(a) of\n        the Code has been qualified since its inception and has received a\n        determination letter from the Internal Revenue Service (\"IRS\") to the\n        effect that the Plan is qualified under Section 401 of the Code and any\n        trust maintained pursuant thereto is exempt from federal income taxation\n        under Section 501 of the Code and nothing has occurred or is expected to\n        occur through the date of the Closing that caused or could cause the\n        loss of such qualification or exemption or the imposition of any penalty\n        or tax liability;\n\n                    (B)  all payments required by any Plan, any collective\n        bargaining agreement or other agreement, or by law (including, without\n        limitation, all contributions, insurance premiums, or intercompany\n        charges) with respect to all periods through the date of the Closing\n        shall have been made prior to the Closing (on a pro rata basis where\n        such payments are otherwise discretionary at year end) or provided for\n        by the Company as applicable, by full accruals as if all targets\n        required by such Plan had been or will be met at maximum levels) on its\n        financial statements;\n\n                    (C)  no claim, lawsuit, arbitration or other action has\n        been threatened, asserted, instituted, or anticipated against the Plans\n        (other than non-material routine claims for benefits, and appeals of\n        such claims), any trustee or fiduciaries thereof, the Company, any ERISA\n        Affiliate, any director, officer, or employee thereof, or any of the\n        assets of any trust of the Plans;\n\n                    (D)  the Plan complies in all material respects and has\n        been maintained and administered at all times in accordance with its\n        terms and all applicable laws, rules and regulations, including, without\n        limitation, ERISA and the Code;\n\n                    (E)  no \"prohibited transaction,\" within the meaning of\n        Section 4975 of the Code and Section 406 of ERISA, has occurred or is\n        expected to occur with respect to the Plan (and the consummation of the\n        transactions contemplated by this Agreement will not constitute or\n        directly or indirectly result in a \"prohibited transaction\");\n\n\n                                       12\n\n\n                    (F)  no Plan is or is expected to be under audit or\n        investigation by the IRS, Department of Labor, or any other governmental\n        authority and no such completed audit, if any, has resulted in the\n        imposition of any tax or penalty;\n\n                    (G)  with respect to each Plan that is funded mostly or\n        partially through an insurance policy, neither the Company nor any ERISA\n        Affiliate has any liability in the nature of retroactive rate\n        adjustment, loss sharing arrangement or other actual or contingent\n        liability arising wholly or partially out of events occurring on or\n        before the Closing.\n\n                    (iii)  Neither the Company nor any ERISA Affiliate\nmaintains, contributes to, or in any way provides for any benefits of any kind\nwhatsoever (other than under Section 4980B of the Code, the Federal Social\nSecurity Act, or a plan qualified under Section 401(a) of the Code) to any\ncurrent or future retiree or terminee. Neither the Company nor any ERISA\nAffiliate has any unfunded liabilities pursuant to any Plan that is not intended\nto be qualified under Section 401(a) of the Code.\n\n               (p)  Insurance. Schedule 2(p) sets forth the Company's general\nliability, fire and casualty insurance policies and liability insurance\nproviding coverage in such amounts as is customary in the industry for a similar\ncompany. Such policies are in full force and effect, with extended coverage,\nsufficient in amount (subject to reasonable deductibles) to allow it to replace\nany of its properties that might be damaged or destroyed.\n\n               (q)  Litigation. Schedule 2(q) hereto contains a complete and\ncorrect list of all actions, suits, proceedings, claims or governmental\ninvestigations pending or, to the knowledge of the Company, threatened against,\nthe Company or any of its assets, or, in connection with the Company's business,\nor any of the Company's officers, directors or employees. Except as set forth on\nSchedule 2(q) hereto, neither the Company nor, in connection with the Company's\nbusiness, any of the Company's officers, directors or employees is subject or\nparty to any judgment, order, or other direction of or stipulation with any\ncourt or other governmental authority or tribunal, or in violation of any other\nlegal requirements (as defined below), and the Company does not know of any\nreasonable basis for a claim that such a violation exists. The Company is\nunaware of any proposed legal requirement that might adversely affect in any\nmaterial respect the operation or prospects of the Company's business.\nNotwithstanding the foregoing, the Company is aware that there have been various\nproposals to enact federal and state laws directed at regulating Internet\nadvertising.\n\n               (r)  Environmental Matters. (i) The Company's business, assets \nand properties 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 or condition\nexists which, with or without the passage of time or the giving of notice, or\nboth, would constitute a non-compliance by the Company with, or a violation by\nthe Company of, the Environmental Laws. To the Company's knowledge, no real\nproperty owned, leased, occupied or used by the Company contains any underground\nstorage tanks, asbestos, polychlorinated biphenyls, hazardous wastes or other\nhazardous substances, as such terms are defined in the Environmental Laws. To\nthe Company's knowledge, neither the Company nor any of its predecessor\ncompanies has caused or permitted to exist, as a result of an intentional or\nunintentional act or omission, a\n\n                                       13\n\n\ndisposal, discharge or release of solid wastes, hazardous wastes, pollutants or\nhazardous substances, as such terms are defined in the Environmental Laws, on or\nfrom any site which currently is or formerly was owned, leased, occupied or used\nby the Company or any predecessor company, except where such disposal, discharge\nor release was pursuant to and in compliance with the conditions of a permit\nissued by the appropriate federal, state and\/or local governmental agency or\notherwise in compliance with Environmental Laws.\n\n               (s)  Restrictions on Business Activities. Other than this\nAgreement, there is no material agreement, judgment, injunction, order or decree\nbinding upon the Company which has or could reasonably be expected to have the\neffect of prohibiting or impairing any material business of the Company as\ncurrently conducted.\n\n               (t)  Transactions with Affiliates. Except as set forth in\nSchedule 2(t) hereto and except for ordinary dealings with its employees, since\nAugust 31, 1997, the Company has had no direct or indirect dealings with any\nshareholder of the Company or with any key employee of the Company or with any\nof their affiliates, associates or relatives. Except as set forth in Schedule\n2(t) and except for employment arrangements with its employees, the Company has\nno obligation to or claim against any shareholder of the Company or any key\nemployee of the Company, or any of their affiliates, associates or relatives,\nand no such person or entity has any obligation to or claim against the Company.\nSchedule 2(t) reasonably describes the nature and extent of any products,\nservices or benefits provided to the Company by any such person or entity\nwithout a corresponding charge equal to the fair market value of such products,\nservices or benefits. Neither the shareholders of the Company, any key employee\nof the Company, nor any of their affiliates, associates or relatives has any\ndirect or indirect interest of any kind in any business or entity which is\ncompetitive with 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. The books and record of the Company for\nthe period from February 15, 1998 to the Closing Date have been delivered to\n24\/7.\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.\n\n               (w)  Officers and Directors; Bank Accounts, etc. Schedule 2(w)\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\nattorney from the Company.\n\n\n                                       14\n\n\n               (x)  Disclosure. No representation, warranty or other written\nstatement by the Company herein or in any other of the Company Documents or made\nin connection with the Company 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. The\nCompany has no knowledge of any matter that could reasonably be expected to have\na materially adverse effect on the Company's business or prospects that has not\nbeen disclosed in writing to 24\/7.\n\n               (y)  Legends. (i)The Company, on behalf of each shareholder of\nthe Company, understands that the certificates evidencing the Merger\nConsideration will bear the following legend:\n\n               \"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER\n        THE SECURITIES ACT OF 1933, AS AMENDED (THE \"SECURITIES ACT\"), OR ANY\n        STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST\n        THEREIN MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN\n        EXEMPTION THEREFROM UNDER SUCH SECURITIES ACT OR SUCH LAWS AND THE RULES\n        AND REGULATIONS THEREUNDER.\"\n\n                    (ii)   The certificates shall not be required to bear such \nlegend if an opinion of counsel reasonably satisfactory to 24\/7 is delivered to\n24\/7 to the effect that neither the legend nor the restrictions on transfer\ncontained in this Agreement are required to insure compliance with the\nSecurities Act. 24\/7 will bear the reasonable costs and expenses in connection\nwith such opinion where such opinion relates to compliance with Rule 144 under\nthe Securities Act. Whenever, pursuant to the preceding sentence, any\ncertificate 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 legend.\n\n\n               3.   Representations and Warranties of 24\/7. 24\/7 and Subsidiary\neach hereby represents and warrants to the Company that:\n\n               (a ) Organization and Qualification. (i) Each of 24\/7 and\nSubsidiary is a corporation duly organized, validly existing and in good\nstanding under the laws of the State of Delaware and has the requisite corporate\npower and authority to own, lease and operate its assets and properties and to\nconduct its business as it is now being conducted, except where the failure to\nbe so organized, existing and in good standing or to have such power, authority\nand approvals would not have a material adverse effect on the business, results\nof operations or financial condition of 24\/7 and its subsidiaries, taken as a\nwhole (a \"24\/7 Material Adverse Effect\"). Each of 24\/7 and Subsidiary is duly\nqualified or licensed as a foreign corporation to do business, and is in good\nstanding, in each jurisdiction where the conduct of its business or the\nownership or leasing of its properties requires such qualification, except for\nsuch failures to be so duly qualified or licensed and in good standing that\nwould not have a 24\/7 Material Adverse Effect.\n\n                    (ii)  24\/7 has heretofore furnished to the Company a \ncomplete and correct copy of 24\/7's and Subsidiary's Certificate of\nIncorporation and By-Laws, each as amended to date.\n\n                                       15\n\n\nSuch Certificates of Incorporation and By-Laws are in full force and effect.\nNeither 24\/7 nor the Subsidiary is in violation of any of the provisions of its\nCertificate of Incorporation or By-Laws, except for any such violations as would\nnot have a 24\/7 Material Adverse Effect.\n\n               (b)  Authority Relative to this Agreement. (i) Each of 24\/7 and\nSubsidiary has all necessary right, power and authority to enter into and\ndeliver this Agreement and to perform its obligations hereunder and to\nconsummate the transactions contemplated hereby. The execution and delivery of\nthis Agreement by 24\/7 and Subsidiary and the consummation by 24\/7 and\nSubsidiary of the transactions contemplated hereby have been duly and validly\nauthorized by all necessary corporate action on the part of 24\/7 and Subsidiary,\nand no other corporate proceedings on the part of 24\/7 and Subsidiary are\nnecessary to authorize this Agreement or to consummate the transactions so\ncontemplated hereby. This Agreement has been duly and validly executed and\ndelivered by 24\/7 and Subsidiary and, assuming the due authorization, execution\nand delivery of this Agreement by the Company, constitutes a legal, valid and\nbinding obligation of 24\/7 and Subsidiary.\n\n                    (ii)  The board of directors of 24\/7 (A) has declared that\nthis Agreement, the Merger and the other transactions contemplated hereby and\nthereby are advisable and in the best interests of the stockholders of 24\/7, (B)\nhas authorized, approved and adopted this Agreement, the Merger and the other\ntransactions contemplated hereby and thereby, and (C) has taken appropriate\naction, pursuant to California Law and Delaware Law, to cause the Merger to\nbecome effective at the Effective Time.\n\n               (c)  No Conflict, Required Filings and Consents. (i) The\nexecution and delivery of this Agreement by 24\/7 and Subsidiary do not, and the\nperformance of this Agreement by 24\/7 and Subsidiary will not, (A) conflict with\nor violate the Certificate of Incorporation or By-Laws of 24\/7 or the\nCertificate of Incorporation or By-Laws of Subsidiary, (B) conflict with or\nviolate any law, rule, regulation, order, judgment or decree applicable to 24\/7\nor any of its subsidiaries or by which its or their respective properties are\nbound or affected or (C) result in any breach of or constitute a default (or an\nevent which with notice or lapse of time or both would become a default) under,\nor impair 24\/7's or Subsidiary's rights or alter the rights or obligations of\nany third party under, or give to others any rights of termination, amendment,\nacceleration or cancellation of, any contracts material to the business of 24\/7\nand Subsidiary taken as a whole or result in the creation of a lien or\nencumbrance on any of the properties or assets of 24\/7 and Subsidiary pursuant\nto, any note, bond, mortgage, indenture, contract, agreement, lease, license,\npermit, franchise or other instrument or obligation to which 24\/7 and Subsidiary\nis a party or by which 24\/7 and Subsidiary or its or any of their respective\nproperties are bound or affected, except in any such case for any such breaches,\ndefaults or other occurrences that would not have a 24\/7 Material Adverse\nEffect.\n\n                    (ii)   The execution and delivery of this Agreement by 24\/7\nand Subsidiary will not require any consent, approval, authorization or permit\nof, or filing with or notification to, any governmental entity except (A) for\napplicable requirements, if any, of the Securities Act, the Exchange Act, the\nBlue Sky Laws and the Hart Scott Rodino Antitrust Improvements Act of 1976, as\namended and (B) where the failure to obtain such consents, approvals,\nauthorizations or permits, or to make such filings or notifications, would not\nprevent or delay consummation of the Merger,\n\n                                       16\n\n\nor otherwise prevent 24\/7 and Subsidiary from performing their respective\nobligations under this Agreement, and would not have a 24\/7 Material Adverse\nEffect.\n\n               (d)  Capitalization. (i) The authorized capital stock of 24\/7 as\nof January 15, 1999 consisted of (1) 70,000,000 shares of common stock, par\nvalue $.01 per share, of which 16,282,835 shares were issued and outstanding,\n2,155,305 shares will be issuable to key employees, officers and directors of\n24\/7 under stock options that have been granted pursuant to 24\/7's 1998 Stock\nIncentive Plan, and 721,400 shares have been reserved for issuance pursuant to\nfuture grants under 24\/7's 1998 Stock Incentive Plan; and (2) 10,000,000 shares\nof preferred stock, par value $.01 per share, none of which are outstanding.\n24\/7 also has 3,177,985 shares of common stock issuable upon exercise of\noutstanding warrants at January 15, 1999. The authorized capital stock of\nSubsidiary consists of 1,000 shares of common stock, par value $.01 per share,\n100 shares of which are issued and outstanding.\n\n                    (ii)  All of the outstanding shares of 24\/7's and \nSubsidiary's respective capital stock have been duly authorized and validly\nissued and are fully paid and non-assessable. The shares of 24\/7 Common Stock to\nbe issued in the Merger have been duly authorized and, when so issued in\naccordance with the terms hereof, such shares will be validly issued, fully paid\nand non-assessable and (assuming the due execution and accuracy of certificates\nor representations of the holders of the Company's common stock in respect of\nthe private placement rules of applicable securities laws) in compliance with\nall applicable securities laws.\n\n                    (iii)  Except as set forth in this Section 3(d) and except\nfor those options granted pursuant to 24\/7's 1998 Stock Incentive Plan, there\nare no existing options, warrants, calls, commitments or other agreements\nrequiring the issuance or sale of any additional shares of stock or other equity\nor debt securities of 24\/7 and no shares of stock or other equity or debt\nsecurities of 24\/7 are reserved for issuance for any purpose.\n\n               (f)  SEC Filings, Financial Statements. (i) 24\/7 has filed all\nforms, reports and documents required to be filed by it with the SEC since\nSeptember 30, 1998. 24\/7 has heretofore delivered to the Company, in the form\nfiled with the SEC, (A) its Quarterly Report on Form 10-Q for the fiscal quarter\nended September 30, 1998, (B) all other reports or registration statements\n(other than Reports on Form 10-Q and Reports on Form 3, 4 or 5 filed on behalf\nof affiliates of 24\/7) filed by 24\/7 with the SEC since September 30, 1998 and\n(C) all amendments and supplements to all such reports and registration\nstatements filed by 24\/7 with the SEC (collectively, the \"24\/7 SEC Reports\").\nThe 24\/7 SEC Reports (1) were prepared in accordance with the requirements of\nthe Securities Act or the Exchange Act, as the case may be and (2) did not at\nthe time they were filed (or if amended or superseded by a filing prior to the\ndate of this Agreement, then on the date of such filing) contain any untrue\nstatement of a material fact or omit to state a material fact required to be\nstated therein or necessary in order to make the statements therein, in the\nlight of the circumstances under which they were made, not misleading.\n\n                    (ii)  Each of the consolidated financial statements \n(including, in each case, any related notes thereto) contained in the 24\/7 SEC\nReports was prepared in accordance with GAAP applied on a consistent basis\nthroughout the periods involved (except as may be indicated in the\n\n                                       17\n\n\nnotes thereto) and each fairly presents in all material respects the\nconsolidated financial position of 24\/7 and its subsidiaries as at the\nrespective dates thereof and the consolidated results of its operations and cash\nflows for the periods indicated, except that the unaudited interim financial\nstatements were or are subject to normal and recurring year-end adjustments and\nsuch statements do not contain notes thereto.\n\n                    (iii)  24\/7 has heretofore furnished to the Company a\ncomplete and correct copy of any amendments or modifications, which have not yet\nbeen filed with the SEC but which are required to be filed, to agreements,\ndocuments or other instruments which previously had been filed by 24\/7 with the\nSEC pursuant to the Securities Act or the Exchange Act.\n\n               (g)  No Adverse Change. Except as set forth in the 24\/7 SEC\nReports, since September 30, 1998, 24\/7 has conducted its business in the\nordinary course and there has not occurred any:\n\n                    (i)  amendments or changes to the Certificate of \nIncorporation or By-Laws of 24\/7;\n\n                    (ii)  material adverse change in the business, properties,\nassets, liabilities, commitments, earnings, financial condition or prospects of\n24\/7;\n\n                    (iii) damage or destruction to property or assets of 24\/7\nresulting in a loss or cost to 24\/7 of more than $50,000 in the aggregate, \nwhether or not covered by insurance; or\n\n                    (iv) act or omission which, if taken or omitted after the\ndate of this Agreement and before the Closing would conflict with Section 7(a).\n\n               (h)  Restrictions on Business Activities. Other than this\nAgreement, there is no material agreement, judgment, injunction, order or decree\nbinding upon 24\/7 and Subsidiary which has or could reasonably be expected to\nhave the effect of prohibiting or impairing any material business of 24\/7 and\nSubsidiary as currently conducted.\n\n               (i)  Compliance, Permits. 24\/7 and its subsidiaries hold all\npermits, licenses, easements, variances, exemptions, consents, certificates,\norders and approvals from governmental authorities necessary for the operation\nof the business of 24\/7 and its subsidiaries taken as a whole (collectively, the\n\"24\/7 Permits\"), except to the extent that failure to have any such 24\/7 Permit\nwould not have a 24\/7 Material Adverse Effect. 24\/7 and its subsidiaries are in\ncompliance with the terms of the 24\/7 Permits, except where the failure so to\ncomply would not have a 24\/7 Material Adverse Effect. Except for such conflicts,\ndefaults and violations as have not had and would not have a 24\/7 Material\nAdverse Effect, neither 24\/7 nor any of its subsidiaries is in conflict with, or\nin default or violation of, any note, bond, mortgage, indenture, contract,\nagreement, lease, license, permit, franchise or other instrument or obligation\nto which 24\/7 or any of its subsidiaries is a party or by which 24\/7 or any of\nits subsidiaries or its or any of their respective properties is bound or\naffected.\n\n\n                                       18\n\n\n               (j)  Liabilities. Except as disclosed in the 24\/7 SEC Reports,\n24\/7 does not have any liabilities (absolute, accrued, contingent or otherwise)\nof the type that are required to be disclosed in financial statements, including\nthe notes thereto, prepared in accordance with GAAP which are, in the aggregate,\nmaterial to the business, operations or financial condition of 24\/7 and its\nsubsidiaries taken as a whole, except liabilities (i) adequately provided for or\nreferred to in 24\/7's balance sheet and the related notes thereto as of\nSeptember 30, 1998 (the \"September 30, 1998 Balance Sheet\"), (ii) incurred in\nthe ordinary course of business and not required under GAAP to be reflected on\nthe September 30, 1998 Balance Sheet or (iii) incurred since September 30, 1998\nin the ordinary course of business and consistent with past practice, and\nliabilities incurred in connection with this Agreement.\n\n               (k)  Litigation. Except as disclosed in the 24\/7 SEC Reports\nfiled prior to the date of this Agreement, as of the date hereof, there are no\nclaims, actions, suits, proceedings or investigations pending or, to the\nknowledge of 24\/7, threatened against 24\/7 or any of its subsidiaries, or any\nproperties or rights of the Company or any of its subsidiaries, before any\ncourt, arbitrator or governmental entity that is reasonably likely to have a\n24\/7 Material Adverse Effect.\n\n               (l)  Environmental Matters. 24\/7's business, assets and \nproperties are and have been operated and maintained in compliance in all\nmaterial respects with Environmental Laws. No event has occurred or condition\nexists which, with or without the passage of time or the giving of notice, or\nboth, would constitute a material non-compliance by 24\/7 with, or material\nviolation by 24\/7 of, the Environmental Laws. To the knowledge of 24\/7, no real\nproperty owned, leased, occupied or used by 24\/7 contains any underground\nstorage tanks, asbestos, polychlorinated biphenyls, hazardous wastes or other\nhazardous substances, as such terms are defined in the Environmental Laws. To\nthe knowledge of 24\/7, neither 24\/7 nor any of its predecessor companies has\ncaused or permitted to exist, as a result of an intentional or unintentional act\nor omission, a disposal, discharge or release of solid wastes, hazardous wastes,\npollutants or hazardous substances, as such terms are defined in the\nEnvironmental Laws, on or from any site which currently is or formerly was\nowned, leased, occupied or used by 24\/7 or any predecessor company, except where\nsuch disposal, discharge or release was pursuant to and in compliance with the\nconditions of a permit issued by the appropriate federal, state and\/or local\ngovernmental agency or otherwise in compliance with Environmental Laws.\n\n\n               4.   Covenants of the Company. The Company covenants and agrees\nthat between the date hereof and the Effective Time:\n\n               (a)  Actions. The Company will not voluntarily take any action\nthat would cause any of the representations and warranties made by it in the\nCompany Documents not to be true and correct in all material respects on and as\nof the Closing Date with the same force and effect as if such representations\nand 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 Ireland, San Filippo, LLP and the\n\n                                       19\n\n\nwork papers of the Company's accountants relating to the Audited Financials and\nthe Unaudited Financials, respectively, and the Company shall furnish 24\/7 with\nsuch information and copies of such documents as 24\/7 may reasonably request.\nThe Company shall promptly furnish to 24\/7 all financial statements of the\nCompany that are prepared in the ordinary course of business, including without\nlimitation monthly reports of sales, revenue and cash flow and quarterly balance\nsheets.\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 shall use commercially reasonable efforts to\nmaintain, preserve and protect the assets and goodwill of the Company. The\nCompany shall not, without the prior written consent of 24\/7, take or commit to\ntake any of following actions:\n\n                    (i) amend its By-Laws or Articles of Incorporation,\n\n                    (ii) issue any additional shares of capital stock or\nissue, sell or grant any option or right to acquire or otherwise dispose of any\nof its authorized but unissued capital stock or other corporate securities,\n\n                    (iii) declare or pay any dividends or make any other\ndistribution in cash or property on its capital stock,\n\n                    (iv) repurchase or redeem any shares of its capital stock,\n\n                    (v) incur, or perform, pay or otherwise discharge, any\nobligation or liability (absolute or contingent), except for current obligations\nand liabilities incurred in the ordinary course of business consistent with past\npractice,\n\n                    (vi) enter into any employment agreement with or increase\nthe compensation or benefits of, any of its officers, directors or employees, or\ngrant any severance pay or termination or establish, adopt or enter into any\nPlan,\n\n                    (vii) sell, transfer or acquire any properties or assets,\ntangible or intangible, other than in the ordinary course of business,\n\n                    (viii) make any material changes in its customary method\nof operations, including marketing, selling and pricing policies and maintenance\nof business premises, fixtures, furniture and equipment,\n\n                    (ix) modify, amend or cancel any of its existing leases or\nenter into any contracts, agreements, leases or understandings other than in the\nordinary course of business or enter into any loan agreements,\n\n                     (x) make any investments other than in certificates of\ndeposit or short-term commercial paper, or\n\n\n                                       20\n\n\n                    (xi) take any other action that would cause any of the\nrepresentations and warranties made by the Company in the Company Documents not\nto be true and correct in all material respects on and as of the Effective Time\nwith the same force and effect as if such representations and warranties had\nbeen made on and as of the Effective Time.\n\n               (d)  Notification of Certain Matters. The Company shall give\nprompt notice to 24\/7 of (i) the occurrence, or non-occurrence, of any event the\noccurrence, or non-occurrence, of which would be likely to cause any\nrepresentation or warranty contained in this Agreement to be untrue or\ninaccurate and (ii) any failure of the Company materially to comply with or\nsatisfy any covenant, condition or agreement to be complied with or satisfied by\nit hereunder; provided, however, that the delivery of any notice pursuant to\nthis Section 4(d) shall not limit or otherwise affect the remedies available\nhereunder to the party receiving such notice.\n\n               (e)  Termination of Agreements. The Company shall cause all\nprovisions of all purchase agreements, stockholder agreements, registration\nrights agreements, investors' rights agreements, co-sale agreements, rights of\nfirst refusal, and similar agreements between any shareholder of the Company and\nthe Company to terminate and be of no further force and effect upon consummation\nof the Closing. A list of such agreements is set forth on Schedule 4(e) hereto.\n\n               (f)  Further Action. Upon the terms and subject to the conditions\nhereof, the Company shall use all reasonable efforts to take, or cause to be\ntaken, all actions and to do, or cause to be done, all other things necessary,\nproper, or advisable to consummate and make effective as promptly as practicable\nthe transactions contemplated by this Agreement and to obtain in a timely manner\nall necessary waivers, consents, and approvals and to effect all necessary\nregistrations and filings.\n\n               (g)  Public Announcements. The Company shall consult with 24\/7\nbefore issuing any further press release or otherwise making any public\nstatements with respect to the Merger and it shall not issue any such press\nrelease or make any such public statement, except as may be required by law,\nwithout the prior consent of 24\/7.\n\n               (h)  Government Compliance. The Company agrees promptly to effect\nall necessary registrations, filings, applications, and submissions of\ninformation required or requested by governmental authorities.\n\n               (i)  Tax Free Reorganization. The Company agrees to use\nreasonable commercial efforts to cause the Merger to be treated as a\nreorganization within the meaning of Section 368 of the Code, including, but not\nlimited to, the execution of tax representation certificates documenting the\nfacts associated with the Merger which support a conclusion that Merger will be\ntreated as a reorganization within the meaning of Section 368 of the Code, and\nwill not (either before or after consummation of the Merger) take any actions\nwhich could prevent the Merger from being treated as a reorganization within the\nmeaning of Section 368 of the Code.\n\n\n               5.   Covenants of 24\/7.\n\n                                       21\n\n\n               (a)  Actions. 24\/7 covenants and agrees that between the date\nhereof and the Effective Time, 24\/7 will not take any action which would cause\nany of the representations and warranties made by it herein not to be true and\ncorrect in all material respects on and as of the Effective Time with the same\nforce and effect as if such representations and warranties had been made on and\nas of the Effective Time.\n\n               (b)  Notification of Certain Matters. 24\/7 shall give prompt\nnotice to the Company of (i) the occurrence, or non-occurrence, of any event the\noccurrence, or non-occurrence, of which would be likely to cause any\nrepresentation or warranty contained in this Agreement to be untrue or\ninaccurate and (ii) any failure of 24\/7 materially to comply with or satisfy any\ncovenant, condition or agreement to be complied with or satisfied by it\nhereunder; provided, however, that the delivery of any notice pursuant to this\nSection 5(b) shall not limit or otherwise affect the remedies available\nhereunder to the party receiving such notice.\n\n               (c)  Further Action. Upon the terms and subject to the conditions\nhereof, and subject to the exercise by the board 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.\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\nrequired or requested by governmental authorities.\n\n               (f)  Merger Consideration.  24\/7 agrees to pay the Merger \nConsideration as provided in Sections 1(f) and 1(g).\n\n               (g)  Tax Free Reorganization. 24\/7 agrees to use reasonable\ncommercial efforts to cause the Merger to be treated as a reorganization within\nthe meaning of Section 368 of the Code, including, but not limited to, the\nexecution of tax representation certificates documenting the facts associated\nwith the Merger which support a conclusion that Merger will be treated as a\nreorganization within the meaning of Section 368 of the Code, and will not\n(either before or after consummation of the Merger) take any actions which could\nprevent the Merger from being treated as a reorganization within the meaning of\nSection 368 of the Code.\n\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 Effective Time, of each of the following\n\n                                       22\n\n\nconditions, any of which may be waived by 24\/7 and the Subsidiary in writing,\nand the Company shall use commercially reasonable efforts to cause such\nconditions to be fulfilled:\n\n               (a)  Representations and Warranties. Each of the representations\nand warranties of the Company in the Company Documents shall be true and correct\nin all material respects on and as of the date hereof, and, except to the extent\nsuch representations and warranties speak as of an earlier date, as of the\nEffective Time as though made at and as of the Effective Time.\n\n               (b)  Performance of the Company. The Company shall have performed\nand complied in all material respects with all agreements, covenants and\nconditions required by the Company Documents to be performed or complied with by\nthe Company at or before the Effective Time.\n\n               (c)  Employment Agreements. Jack Zoken, Jeff Wilkins and Prashant\nDevdhar each shall have entered into an Employment Agreement with 24\/7 in the\nform attached hereto as Exhibit B and a Non-Competition and Non-Disclosure\nAgreement with 24\/7 in the form attached hereto as Exhibit C (collectively, the\n\"Employment Agreements\") and each other employee of the Company shall have\nentered into a Non-Disclosure Agreement in the form attached hereto as Exhibit D\n(the \"Non-Disclosure Agreements\").\n\n               (d)  Opinion of Counsel to the Company. The Company shall have\ndelivered to 24\/7 an opinion of Fenwick &amp; West LLP, counsel to the Company,\ndated the Closing Date, substantially in the form attached hereto as Exhibit E.\n\n               (e)  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\nSections 6(a), 6(b) and 6(c).\n\n               (f)  Consents. The Company shall have obtained or, to the\nreasonable satisfaction of 24\/7 obviated the need to obtain, all consents,\napprovals or waivers from regulatory authorities and third parties necessary for\nthe execution, delivery and performance of the Company Documents and the\ntransactions contemplated thereby, all without cost or other adverse\nconsequences to the Company.\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 or the Company, seeking to restrain or\nprohibit or to obtain damages or other relief in connection with the\nconsummation of the transactions contemplated by the Company Documents or this\nAgreement, or which might materially affect the business of the Company, which\nin the reasonably exercised opinion of 24\/7 makes it inadvisable to consummate\nsuch transactions.\n\n               (h)  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\n\n                                       23\n\n\nshall have been furnished with such certified copies of such corporate actions\nand proceedings and such other instruments and documents as it shall have\nreasonably requested.\n\n               (i)  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 any Federal or state government or\ngovernmental authority or court, which would (i) prohibit the Surviving\nCorporation's ownership or operation of all or a material portion the Company's\nbusiness or assets, or compel the Surviving Corporation or Company to dispose of\nor hold separate all or a material portion of the Company's business or assets,\nas a result of the Merger; (ii) render the Company unable to consummate the\nMerger; (iii) make such consummation illegal; or (iv) impose or confirm material\nlimitations on the ability of 24\/7 effectively to exercise full rights of\nownership of shares of the capital stock of the Surviving Corporation, including\nwithout limitation, the right to vote any such shares on all matters properly\npresented to the shareholders of the Surviving Corporation, and no such action\nshall have been taken or any such statute, rule, regulation, or order enacted,\npromulgated, issued, or deemed applicable to the Merger which in the reasonable\njudgment of 24\/7 will produce such result.\n\n               (j)  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\nArticles of Incorporation, By-laws, board of directors' resolutions relating to\nthe transactions contemplated hereby and the incumbency and signatures of each\nof the officers of the Company who shall execute on behalf of the Company any\ndocument delivered on the Closing Date.\n\n               (k)  Material Adverse Change. Since the date of this Agreement,\nthere shall have been no change, occurrence or circumstance in the business,\nresults of operations or financial condition of the Company having or reasonably\nlikely to have a material adverse effect on the Company.\n\n               (l)  Indemnity Escrow Agreement. 24\/7 shall have received from\nthe Company, on behalf of all of the shareholders of the Company, an executed\ncopy of the Indemnity Escrow Agreement dated the Closing Date in the form of\nExhibit A hereto.\n\n               (m)  Tax Certificate. 24\/7 shall have received a certificate of\nthe Company, dated the Closing Date, signed by the Chief Executive Officer of\nthe Company, as to the treatment of the Merger as a reorganization within the\nmeaning of Section 368 of the Code.\n\n\n               7.   Conditions Precedent to Obligations of the Company. The\nobligations of the Company to consummate the transactions contemplated by this\nAgreement are subject to the fulfillment, at or before the Effective Time, of\neach of the following conditions, any of which may be waived by the Company in\nwriting, and 24\/7 and the Subsidiary shall use their best efforts to cause such\nconditions to be fulfilled:\n\n\n                                       24\n\n\n               (a)  Representations and Warranties. The representations and\nwarranties of 24\/7 and the Subsidiary herein shall be true and correct in all\nmaterial respects on and as of the date hereof, and, except to the extent such\nrepresentations and warranties speak as of an earlier date, as of the Effective\nTime as though made at and as of the Effective Time.\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 this Agreement to be performed\nor complied with by them at or before the Effective Time.\n\n               (c)  Employment Agreements. 24\/7 shall have entered into the\nEmployment Agreements and the Non-Disclosure Agreements.\n\n               (d)  Opinion of 24\/7's Counsel. 24\/7 and the Subsidiary shall\nhave delivered to the Company an opinion of Proskauer Rose LLP, counsel to 24\/7\nand the Subsidiary, dated the Closing Date, substantially in the form attached\nhereto as Exhibit F.\n\n               (e)  Certificate. The Company shall have received a certificate\nexecuted by 24\/7, dated the Closing Date, certifying, in such detail as the\nCompany may reasonably request, as to the fulfillment of the conditions set\nforth in Sections 7(a) and 7(b).\n\n               (f)  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 or the Company, seeking\nto restrain or prohibit or to obtain damages or other relief in connection with\nthe consummation of the transactions contemplated hereby or the Company\nDocuments which in the reasonably exercised opinion of the Company makes it\ninadvisable to consummate such transaction.\n\n               (g)  Material Adverse Change. Since the date of this Agreement,\nthere shall have been no change, occurrence or circumstance in the business,\nresults of operations or financial condition of 24\/7 having or reasonably likely\nto have a material adverse effect on 24\/7.\n\n               (h)  Tax Certificate. The Company shall have received a\ncertificate of 24\/7, dated the Closing Date, signed by the Senior Vice President\nof 24\/7, as to the treatment of the Merger as a reorganization within the\nmeaning of Section 368 of the Code.\n\n\n               8.   Closing Deliveries.\n\n               (a)  Deliveries of the Company. At the Closing, the Company shall\ndeliver, or shall cause to be delivered, to 24\/7 and the Subsidiary the\nfollowing:\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\n\n                                       25\n\n\nin full, all at the expense of the Company.  Such Shares shall be delivered to \n24\/7 free and clear of all claims;\n\n                    (ii)    The Employment Agreements and the Non-Disclosure \nAgreements;\n\n                    (iii) The opinion of Fenwick &amp; West LLP, counsel to the\nCompany;\n\n                    (iv) The certificates referred to in Sections 6(e), 6(j)\nand 6(m), duly executed;\n\n                    (v) Duly executed resignations of such directors and\nfiduciaries of the Company as 24\/7 shall designate; and\n\n                    (vi) The Indemnity Escrow Agreement referred to in Section\n6(l).\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 the following:\n\n                    (i)   The Employment Agreements and the Non-Disclosure \nAgreements;\n\n                    (ii) The opinion of Proskauer Rose LLP, counsel to 24\/7\nand the Subsidiary;\n\n                    (iii) The certificates referred to in Section 7(e) and\n7(h) hereof, duly executed; and\n\n               9.   Restrictive Covenant; Confidentiality. (i) The Company shall\nnever use or divulge any trade secrets, customer or supplier lists, pricing\ninformation, marketing arrangements or strategies, business plans, internal\nperformance statistics, training manuals or other information concerning 24\/7 or\nits affiliates that is competitively sensitive or confidential; provided,\nhowever, that this prohibition shall not apply to any information that (A) is\npublicly available as of the date hereof, (B) becomes publicly available other\nthan as a result of prohibited disclosure by the Company, (C) is disclosed to\nthe Company by any person or entity that is not subject to any confidentiality\nrestrictions imposed by 24\/7 or (D) the Company is required to disclose by law\nor by order of any court of competent jurisdiction, but, in the case of (D), the\nCompany shall first give 24\/7 notice of such law or court order and an\nopportunity to object, if permitted by such law or court order. 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 Section 9 are in addition\nto and independent of any agreements or covenants contained in any employment,\nconsulting or other agreement between 24\/7 or the Company and any shareholder of\nthe Company.\n\n\n                                       26\n\n\n                    (ii) To the extent that any of the information furnished to\nthe Company would constitute material, nonpublic information for purposes of the\nSecurities Exchange Act of 1934, as amended, the Company covenants that it will\nnot engage in any purchase or sale of 24\/7's securities while in possession of\nsuch information and prior to the time that such information is made generally\nknown to the public and that the Company shall inform its agents and\nrepresentatives, who have been given access to such material, nonpublic\ninformation, of such requirements. The obligations in this Section 9 shall\nsurvive 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. Should any 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 the shareholders of the Company. To the\nextent solely of the shares of 24\/7 Common Stock deposited in the Escrow\nIndemnity Account, each shareholder of the Company shall severally, and not\njointly, and only in proportion to such shareholder's pro-rata share of\nownership of the Company immediately preceding the Closing Date, indemnify,\ndefend and hold harmless 24\/7 and its affiliates (including the Subsidiary and\nthe Company), promptly upon demand at any time and from time to time, against\nany and all losses, liabilities, claims, actions, damages and expenses\n(including without limitation, reasonable attorneys' fees and disbursements)\n(collectively, \"Losses\"), arising out of or in connection with any of the\nfollowing: (i) any material misrepresentation or breach of any warranty made by\nthe Company or any shareholder of the Company in any of the Company Documents;\n(ii) any material breach or nonfulfillment of any covenant or agreement made by\nthe Company or any shareholder of the Company in any of the Company Documents;\nor (iii) the claims of any broker or finder engaged by the Company or any\nshareholder of the Company.\n\n               12.  Indemnification By 24\/7. 24\/7 shall indemnify, defend and\nhold harmless the shareholders of the Company, promptly upon demand at any time\nand from time to time, against any and all Losses arising out of or in\nconnection with any of the following: (i) any misrepresentation or breach of any\nwarranty made by 24\/7 herein; (ii) any breach or nonfulfillment of any covenant\nor agreement made by 24\/7 herein; and (iii) the claims of any broker or finder\nengaged by 24\/7.\n\n               13.  Further Provisions Regarding Indemnification.\n\n               (a)  Survival. All representations, warranties, indemnities,\ncovenants and agreements made by the Company or the shareholders of the Company\nin the Company Documents or by 24\/7 herein shall survive the Closing for a\nperiod of one year after the Effective Date, notwith standing any examination or\ninvestigation made by or for any party.\n\n               (b)  Limitations.  Notwithstanding the foregoing,\n\n                                       27\n\n\n\n\n\n                    (i) the indemnification provided for in Section 11 above \nshall be paid solely out of the shares of 24\/7 Common Stock held in the Escrow\nIndemnity Account in accordance with Section 13(d) below and the Escrow\nIndemnity Agreement and such indemnification shall be the exclusive remedy of\n24\/7 with respect to claims for Losses.\n\n                    (ii) the indemnification provided for in Section 12 above\nshall be limited to an amount equal to ten percent (10%) of the Merger\nConsideration.\n\n                    (iii) the indemnification provided for in Sections 11 and\n12 above shall not be required unless and until the total amount of Losses\notherwise subject to indemnification under Sections 11 and 12 exceeds an\naggregate amount of fifty thousand dollars ($50,000), in which event the\nindemnified party or parties will be entitled to indemnification for the full\namount of their Losses; and\n\n                    (iv) neither the Company nor any shareholder of the \nCompany, on the one hand, nor 24\/7, on the other (such shareholders, on the one\nhand, and 24\/7 on the other, each is sometimes hereinafter referred to in this\nSection 13 as a \"party\") shall be entitled to indemnification for Losses arising\nout of matters referred to in Sections 11 or 12, as applicable, unless it shall\nhave given written notice to the other party, setting forth its claim for\nindemnification in reasonable detail, within one year after the Closing Date;\nprovided, however, that the foregoing limitations on each party's\nindemnification obligation shall not apply to Losses arising out of or in\nconnection with any material misrepresentation made in Section 2(c), Section 10\nand Paragraph (a) of the Letter Agreement of the Shareholders of the Company\nattached as Exhibit G hereto.\n\n                    (v) 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 Sections\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 proceeding, 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                    (vi) The indemnified party shall be kept fully informed by\nthe indemnifying party of such action, suit or proceeding at all stages thereof,\nwhether or not it is represented by counsel. The indemnifying party shall, at\nthe indemnifying party's expense, make available to the indemnified party and\nits attorneys and accountants all books and records of the indemnifing party\nrelating to such proceedings or litigation, and the parties hereto agree to\nrender to each other such assistance as they may reasonably require of each\nother in order to ensure the proper and adequate defense of any such action,\nsuit or proceeding.\n\n                                       28\n\n\n               (c)  Escrow Indemnity Procedures. Notwithstanding the foregoing\nand in accordance with the provisions of the Escrow Indemnity Agreement, the\nCompany shall from time to time, direct the Escrow Agent to deliver to 24\/7 the\nnumber of shares of 24\/7 Common Stock having a value equal to the Losses of 24\/7\nas to which 24\/7 is entitled to be indemnified pursuant to Section 11 above, all\nas more specifically set forth in the Escrow Indemnity Agreement. For purposes\nof this Section 13(c), the value of 24\/7 Common Stock shall be the value on the\nClosing Date.\n\n               14.  Registration Rights.\n\n               (a)  Incidental Registration. After (i) receipt by 24\/7 of a\nwritten request from one or more parties to registration rights agreements to\nwhich 24\/7 is a party on the date hereof (\"Existing Holders\"), requesting that\n24\/7 effect the registration of shares of 24\/7 Common Stock under the Securities\nAct (a \"Registration Request\") or (ii) 24\/7 proposes (but without obligation to\ndo so) to register any of its stock under the Securities Act in connection with\na public offering of such securities solely for cash (other than a registration\non Form S-8 or Form S-4) (a \"Company Registration\"), 24\/7 shall promptly notify\nthe shareholders of the Company in writing of the receipt of such Registration\nRequest or the Company Registration and such shareholders may elect (by written\nnotice sent to 24\/7 within five days from the date of such shareholder's receipt\nof the aforementioned notice from 24\/7) to have all or any of the 24\/7 Common\nStock owned by the shareholders of the Company (the \"Shareholder's Shares\")\nincluded in such registration thereof pursuant to this Section 14(a). If a\nmanaging underwriter of any proposed underwritten public offer ing shall advise\n24\/7 in writing that, in its opinion, the distribution of Shareholder's Shares\nrequested to be included in a registration statement concurrently with any\nsecurities being registered by 24\/7 would materially and adversely affect the\ndistribution by 24\/7, 24\/7 may limit the number (to zero if necessary) of\nShareholder's Shares to be registered in order to reduce the total number of\nshares in such registration to the number of shares recommended by the\nunderwriter. 24\/7 shall have no obligation under this Section 14(a) to make any\noffering of its securities, or to complete an offering of its securities that it\nproposes to register, and shall incur no liability to any shareholder of the\nCompany for its failure to do so. Notwithstanding the foregoing, such\nshareholders' rights to registration granted in this Section 14(a) are junior to\nand subject to any superior registration rights of Existing Holders.\n\n               (b)  Registration Procedure. If 24\/7 is required to effect the\nregistration of any Shareholder's Shares under the Securities Act, then 24\/7\nwill use it best efforts to take such actions as are reasonably required in\norder to expedite or facilitate the disposition of such Shareholder's Shares and\nshall furnish to such shareholders such number of copies of a prospectus, in\nconformity with the requirements of the Securities Act, and such other\ndocuments, as such shareholders may reasonably request. It shall be a condition\nprecedent to the obligation of 24\/7 to take any action pursuant to this Section\n14 on behalf of a shareholder that any such shareholder shall furnish to 24\/7\nsuch information regarding the Shareholder's Shares and the intended method of\ndisposition thereof as 24\/7 shall reasonably request.\n\n\n                                       29\n\n\n               (c)  Expenses of Registrations; Indemnification. The Company \nshall bear and pay all expenses incurred in connection with any registration\nwith respect to registration pursuant to Section 14(a), excluding underwriting\ndiscounts and commissions relating to the Shareholder's Shares. Such\nshareholders shall be entitled to the same indemnification from 24\/7 as the\nExisting Holders requesting registration pursuant to the existing registration\nrights agreement with such Existing Holders.\n\n               15.  Further Assurances. The parties shall cooperate and take\nsuch actions, and execute such other documents, at the Closing or subsequently,\nas either may reasonably request in order to carry out the provisions or purpose\nof this Agreement.\n\n               16.  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 the Company:\n                             Sift, Inc.\n                             155-A Moffet Park Drive\n                             Suite 210\n                             Sunnyvale, CA 94089\n\n        with a copy to:\n                             Fenwick &amp; West LLP\n                             Two Palo Alto Square\n                             Palo Alto, California 94306\n                             Attn: Robert B. Dellenbach\n\n        If to 24\/7:\n                             24\/7 Media, Inc.\n                             1250 Broadway, 27th Floor\n                             New York, NY  10001\n                             Attn: General Counsel\n\n        with a copy to:\n                             Proskauer Rose LLP\n                             1585 Broadway\n                             New York, New York  10036\n                             Attn:  Ronald R. Papa, Esq.\n\n               17.  Termination. (i) This Agreement may be terminated at any \ntime prior to the Effective Date by action by the respective Boards of Directors\nof the Company and 24\/7 by mutual written consent of the Company and 24\/7, or\n\n                                       30\n\n\n                    (ii) This Agreement shall terminate if the Merger shall\nhave not been declared effective and consummated by April 30, 1999.\n\n               18.  Year 2000. (i) In addition to any other warranties and\nrepresentations provided by either party hereto, whether pursuant to this\nAgreement, by law, equity, or otherwise, each party represents and warrants\nthat:\n\n                         (A) the computer systems of each party (including\n        without limitation all software, hardware, workstations and related \n        components, automated devices, products consisting of or containing one\n        or more thereof; and any and all enhancements, upgrades, customizations,\n        modifications or maintenance, embedded chips and other date sensitive\n        equipment such as security systems, alarms, elevators and other systems)\n        (\"Computer Systems\") are Year 2000 Compliant (as defined below) or will\n        be Year 2000 Compliant by December 31, 1999;\n\n                         (B) each party's supply of services through its\n        Computer Systems to the other Party shall not be interrupted, delayed,\n        decreased, or otherwise affected by dates\/times prior to, on, after or\n        spanning January 1, 2000;\n\n                         (C) each party's Computer Systems have the ability\n        to properly interface and will continue to properly interface with\n        internal and external applications and systems of third parties with\n        whom the company and its subsidiaries exchange data electronically\n        (including without limitation customers, clients, suppliers, service\n        providers, subcontractors, processors, converters, shippers,\n        warehousemen, outsourcers, data processors, regulatory agencies and\n        banks) whether or not they have achieved Year 2000 Compliance; and\n\n                         (D) each party has inquired of all such third parties \n        whose lack of Year 2000 Compliance would be materially or significantly \n        adverse to it.\n\nFor purposes of this Agreement, \"Year 2000 Compliant\" means that (1) the\nComputer Systems (1) are capable of recognizing, processing, managing,\nrepresenting, interpreting, and manipulating correctly date related data for\ndates earlier and later than January 1, 2000, including, but not limited to,\ncalculating, comparing, sorting, storing, tagging and sequencing, without\nresulting in or causing logical or mathematical errors or inconsistencies in any\nuser-interface functionalities or otherwise, including data input and retrieval,\ndata storage, data fields, calculations, reports, processing, or any other input\nor output, (2) have the ability to provide date recognition for any data element\nwithout limitation (including, but not limited to, date-related data represented\nwithout a century designation, date-related data whose year is represented by\nonly two digits and date fields assigned special values), (3) have the ability\nto automatically function into and beyond the year 2000 without human\nintervention and without any change in operations associated with the advent of\nthe year 2000, (4) have the ability to correctly interpret data, dates and time\ninto and beyond the year 2000, (5) have the ability not to produce noncompliance\nin existing information, nor otherwise corrupt such data into and beyond the\nyear 2000, (6) have the ability to correctly process after January 1, 2000 data\n\n                                       31\n\n\ncontaining dates before that date, (7) have the ability to recognize all \"leap\nyears,\" including February 29, 2000.\n\n                    (ii) No obligation of a party under this Agreement shall\nbe excused by reason of the failure of the other party's or any other person's\nComputer Systems to be Year 2000 Compliant, nor shall such occurrence(s) be\ndeemed a force majeure event.\n\n               19.  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               20.  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 or Subsidiary may\nassign this Agreement and its rights hereunder to any direct or indirect\nwholly-owned subsidiary of 24\/7.\n\n               21.  Paragraph Headings. The paragraph or section headings in\nthis Agreement are for reference purposes only and shall not affect in any way\nthe meaning or interpretation of this Agreement.\n\n               22.  Other Discussions. Unless this Agreement shall have been\nterminated, the Company (nor any representatives of the Company) shall not,\ndirectly or indirectly, initiate, solicit, encourage, consider, entertain or\notherwise consider any other offers for or inquiries about or hold discussions\nwith any person regarding, the acquisition of any assets or capital stock of the\nCompany. The Company (nor any representatives of the Company) will not, directly\nor indirectly, engage in any negotiations concerning, to provide any\nconfidential information or data to, or have any discussions with, any person\nrelating to the acquisition of any assets or capital stock of the Company,\nwhether initiated before or after this Agreement. The Company (and any\nrepresentatives of the Company) will immediately cease and cause to be\nterminated any existing activities, discussions or negotiations with any parties\nconducted heretofore with respect to the acquisition of any assets or capital\nstock of the Company. The Company will notify 24\/7 immediately of any such\ninquiries, proposals or negotiations and the name of such person and the\nmaterial terms and conditions of any proposals or offers.\n\n               23.  Legal Fees and Expenses. If the Closing occurs, the\nreasonable legal costs, fees and expenses solely and directly related to this\nAgreement and the Merger within the meaning of the Internal revenue Service Rev.\nRul. 73-54 incurred by the Company shall be borne by 24\/7. If the Closing does\nnot occur pursuant to the terms of this Agreement, each party will be\nresponsible for those expenses incurred directly by them in connection with this\nAgreement and the Merger.\n\n                                       32\n\n\n               24.  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 unenforceable, 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               25.  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 California in Santa Clara\nCounty and, if the jurisdictional prerequisites exist at the time, the United\nStates District Court for the Northern District of California, shall have sole\nand exclusive jurisdictions to hear and determine any dispute or controversy\narising under or concerning this Agreement. In any action or proceeding\nconcerning such dispute or controversy, the parties consent to jurisdiction and\nwaive personal service of any summons, complaint or other process; a summons or\ncomplaint in any such action or proceeding may be served by mail in accordance\nwith Section 15.\n\n               26.  Counterparts. This Agreement may be executed by facsimile\nand in one or more counterparts, each of which shall be deemed an original, but\nall of which taken together shall constitute one and the same instrument.\n\n\n\n\n                                       33\n\n\n                       [SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]\n\n               IN WITNESS WHEREOF, the parties have duly executed this Agreement\non the date first above written.\n\n\n24\/7 MEDIA, INC.\n\n\nBy: \/s\/David J. Moore\n    ---------------------\n    Name:  David J. Moore\n    Title:  Chief Executive Officer\n\nBy: \/s\/Mark E. Moran\n    ---------------------\n    Name:  Mark E. Moran\n    Title:  Senior Vice President\n\n\nFACTOR K ACQUISITION CORPORATION\n\n\nBy: \/s\/David J. Moore \n    ---------------------\n    Name:  David J. Moore\n    Title:  Chief Executive Officer\n\nBy: \/s\/Mark E. Moran\n    ---------------------\n    Name:  Mark E. Moran\n    Title:  Senior Vice President\n\n\nSIFT, INC.\n\n\nBy: \/s\/Jack Zoken\n    ---------------------\n    Name:  Jack Zoken\n    Title:   Chief Executive Officer\n\nBy: \/s\/Jeff Wilkins\n    ---------------------\n    Name:  Jeff Wilkins\n    Title:   President, Chief Financial Officer and Secretary\n\n\n\n                                       34\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6536],"corporate_contracts_industries":[9503],"corporate_contracts_types":[9622,9626],"class_list":["post-42993","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\/42993","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=42993"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42993"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42993"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}