{"id":42994,"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-awardtrack-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-awardtrack-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-24-7-media-inc-awardtrack-inc.html","title":{"rendered":"Agreement and Plan of Merger &#8211; 24\/7 Media Inc., AwardTrack Inc., MemberWorks Inc., Brian Anderson, National Discount Brokers Group, Inc., Jeffrey Newhouse, John Watson, Gregory Hassett, Randy Moore and Jack Daley"},"content":{"rendered":"<pre>                          AGREEMENT AND PLAN OF MERGER\n\n\n                                  BY AND AMONG\n\n                                24\/7 MEDIA, INC.,\n\n                           24\/7 AWARDS HOLDING CORP.,\n\n                                AWARDTRACK, INC.\n\n                            MEMBERWORKS INCORPORATED,\n\n    BRIAN ANDERSON, NATIONAL DISCOUNT BROKERS GROUP, INC., JEFFREY NEWHOUSE,\n            JOHN WATSON, GREGORY HASSETT, RANDY MOORE AND JACK DALEY\n\n\n                          DATED AS OF FEBRUARY 2, 2000\n\n\n\n\n\n\n          AGREEMENT AND PLAN OF MERGER, dated as of February 2, 2000 (this\n\"AGREEMENT\"), by and among 24\/7 Media, Inc., a Delaware corporation (\"24\/7\"),\n24\/7 Awards Holding Corp., a Delaware corporation and a wholly-owned subsidiary\nof 24\/7 (the \"SUBSIDIARY\"), AwardTrack, Inc., a California corporation (the\n\"COMPANY\"), MemberWorks Incorporated (\"MemberWorks\"), Brian Anderson, National\nDiscount Brokers Group, Inc., Jeffrey Newhouse, John Watson, Gregory Hassett,\nRandy Moore and Jack Daley (the \"Other Shareholders;\" and, together with\nMemberWorks, shall be referred to collectively as the \"SHAREHOLDERS\").\n\n          WHEREAS, upon the terms and subject to the conditions of this\nAgreement and in accordance with the General Corporation Law of the State of\nCalifornia (\"California Law\") and the General Corporation Law of the State of\nDelaware (\"DELAWARE LAW\"), 24\/7, Subsidiary and the Company intend to enter into\na business combination transaction;\n\n          WHEREAS, the Board of Directors of the Company (i) has determined that\nthe Merger (as defined below) is fair to, and in the best interest of, the\nCompany and its shareholders, and (ii) has approved this Agreement, the Merger\nand the other transactions contemplated by this Agreement;\n\n          WHEREAS, the holders of all of the outstanding shares of the capital\nstock of the Company have authorized, approved and adopted this Agreement, the\nMerger and the other transactions contemplated by this Agreement;\n\n          WHEREAS, the Boards of Directors of 24\/7 and the Subsidiary (i) have\ndetermined that the Merger is fair to, and in the best interest of, 24\/7, the\nSubsidiary and their shareholders, and (ii) have approved this Agreement, the\nMerger and the other transactions contemplated by this Agreement;\n\n          WHEREAS, each Shareholder is the owner of such number of shares of\ncapital stock (the \"SHARES\") of the Company as is set forth in SCHEDULE 1 hereto\n(the \"OWNERSHIP TABLE\");\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\n                                       1\n\n\n                                    ARTICLE I\n                                   THE MERGER\n                              \n          1.1   THE MERGER. At the Effective Time (as defined in Section 1.2(a))\nand subject to and upon the terms and conditions of this Agreement and the\napplicable provisions of California Law and Delaware Law, the Subsidiary shall\nbe merged with and into the Company (the \"MERGER\"), the separate corporate\nexistence of the Subsidiary shall cease, and the Company shall continue as the\nsurviving corporation. The Company, as the surviving corporation after the\nMerger is hereinafter sometimes referred to as the \"SURVIVING CORPORATION.\" The\nparties intend that, for federal income tax purposes, the Merger shall\nconstitute a tax-free reorganization within the meaning of Section 368 of the\nInternal Revenue Code of 1986, as amended (the \"Code\").\n\n          1.2   EFFECTIVE TIME; CLOSING\n     \n                (a)   As promptly as  practicable  after the Closing (as defined\nin Section 1.2(b)),  the parties hereto shall cause the Merger to be consummated\nby filing a  certificate  of merger with the  Secretary of State of the State of\nDelaware  (the  \"Certificate  of  Merger\")  and  agreement  of  merger  with the\nSecretary of State of the State of California  (the  \"Agreement of Merger\"),  in\nsuch  form as  required  by,  and  executed  in  accordance  with  the  relevant\nprovisions of,  California  Law and Delaware Law . When used in this  Agreement,\nthe term \"EFFECTIVE TIME\" shall mean the date and time at which the Merger shall\nbecome effective under California Law and Delaware Law.\n\n               (b)   The closing of the  transactions  contemplated by this\nAgreement (the \"CLOSING\") shall be held at the offices of Proskauer Rose LLP,\n1585 Broadway, New York, New York 10036, on February 17, 2000, or at another\ntime and date to be specified by the parties, which shall be no later than the\nsecond business day after the satisfaction or waiver, as the case may be, of the\nconditions set forth in Article VI, or at such other time, date and location as\nthe parties hereto agree in writing (the \"CLOSING DATE\").\n\n          1.3   EFFECT OF THE MERGER. At the Effective Time, the effect of the \nMerger shall be as provided in this Agreement and the applicable provisions of\nCalifornia Law and Delaware Law. Without limiting the generality of the\nforegoing, and subject thereto, at the Effective Time all the rights,\nprivileges, powers, franchises and property of the Subsidiary and the Company\nshall vest in the Surviving Corporation, and all restrictions, disabilities,\nduties, debts and liabilities of the Subsidiary and the Company shall become the\nrestrictions, disabilities, duties, debts and liabilities of the Surviving\nCorporation.\n\n          1.4   CERTIFICATE OF INCORPORATION.\n\n                At the Effective Time, the Articles of Incorporation of the \nSurviving Corporation shall be amended and restated as set forth in the\nAgreement of Merger.\n\n\n                                       2\n\n\n\n          1.5   DIRECTORS AND OFFICERS. The directors and officers set forth on\nSCHEDULE 1.5 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          1.6   EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the\nMerger and without any action on the part of either the Subsidiary,  the Company\nor the holders of any of the following securities:\n\n                (a)  CONVERSION OF COMPANY COMMON STOCK.  Each share of common\nstock, no par value, of the Company (\"COMPANY COMMON STOCK\") issued and\noutstanding immediately prior to the Effective Time, other than any shares of\nCompany Common Stock to be canceled pursuant to Section 1.6(d), will be canceled\nand extinguished and automatically converted (subject to Sections 1.6(f) and\n(g)) into the right to receive the number of shares of validly issued, fully\npaid and nonassessable common stock, par value $0.01 per share, of 24\/7 (the\n\"24\/7 COMMON STOCK\"), equal to (i) $25,000,000 divided by the average closing\nprice per share of the 24\/7 Common Stock for the five (5) trading days preceding\nthe date of this Agreement divided by (ii) 9,699,190 (the \"Exchange Ratio\") ,\nupon surrender of the certificates representing such shares of Company Common\nStock in accordance with the Ownership Table. The aggregate number of shares of\n24\/7 Common Stock to be issued pursuant to this Section 1.6(a) is referred to\nherein as the \"Common Merger Consideration.\"\n\n                (b)  CONVERSION OF COMPANY PREFERRED STOCK.  All the shares of\npreferred stock, no par value, of the Company (\"COMPANY PREFERRED STOCK\"),\nissued and outstanding immediately prior to the Effective Time (including in\nconnection with the contribution referred to in Section 4.8), other than any\nshares of Company Preferred Stock to be canceled pursuant to Section 1.6(d), and\nall the rights of MemberWorks under the Agreement and Plan of Merger among\nMemberWorks Incorporated, AT Merger, Inc. and the Company, dated April 19, 1999,\nas amended by the Amendment to Agreement and Plan of Merger dated as of\nSeptember 30, 1999 and the Second Amendment to Agreement and Plan of Merger\ndated December 30, 1999, will be canceled and extinguished and automatically\nconverted (subject to Sections 1.6(f) and (g)) into the right to receive the\nnumber of shares of 24\/7 COMMON STOCK, equal to $50,180,000 divided by the\naverage closing price per share of the 24\/7 Common Stock for the five (5)\ntrading days preceding the date of this Agreement (the \"Preferred Merger\nConsideration;\" and, together with the Common Merger Consideration, shall be\nreferred to collectively as the \"Merger Consideration\"), upon surrender of the\ncertificates representing such shares of Company Preferred Stock.\n\n                (c)  (i)    The Company's obligations with respect to each\noutstanding option, as set forth on SCHEDULE 1.6(B) hereto (the \"ASSUMED\nOPTIONS\"), to purchase shares of common stock of the Company issued pursuant to\nthe Company's 1999 Stock Option Plan (the \"COMPANY OPTION PLAN\"), whether vested\nor unvested, shall, by virtue of this Agreement and without any further action\nof the Company, 24\/7 or the holder of any Assumed\n\n\n                                       3\n\n\n\nOption, be assumed by 24\/7 under its 1998 Stock Incentive Plan. Unless otherwise\nelected by 24\/7 prior to the Effective Time, 24\/7 shall make such assumption in\nsuch manner that (i) 24\/7 is a corporation \"assuming a stock option in a\ntransaction to which Section 424(a) applies\" within the meaning of Section 424\nof the Code or (ii) to the extent that Section 424 of the Code does not apply to\nsuch Assumed Option, 24\/7 would be such a corporation were Section 424 of the\nCode applicable to such Assumed Option; and, if not so otherwise elected, after\nthe Effective Time, all references to the Company Option Plan shall be deemed to\nrefer to 24\/7's 1998 Stock Incentive Plan as of the Effective Time by virtue of\nthis Agreement and without any further action.\n\n                     (ii)   Each Assumed Option so assumed by 24\/7 under this\nAgreement shall continue to have, and be subject to, similar terms and\nconditions (including vesting) set forth in the Company Option Plan and each\nindividual optionee's Option Agreement as in effect immediately prior to the\nEffective Time, except that (i) such Assumed Option shall be governed by 24\/7's\n1998 Stock Incentive Plan, (ii) such Assumed Option will be exercisable for that\nnumber of shares of 24\/7 Common Stock equal to the product of the number of\nshares of common stock of the Company that were purchasable under such Assumed\nOption immediately prior to the Effective Time multiplied by the Exchange Ratio,\nrounded down to the nearest whole number of shares of 24\/7 Common Stock, and\n(iii) the per share exercise price for the shares of 24\/7 Common Stock issuable\nupon exercise of such Assumed Option will be equal to the exercise price per\nshare of common stock of the Company at which such Assumed Option was\nexercisable immediately prior to the Effective Time divided by the Exchange\nRatio, and rounding the resulting exercise price up to the nearest whole cent.\nFor purposes of this Section 1.6(c)(ii), the fair market value of 24\/7 Common\nStock is based on the closing price per share on the trading day immediately\nfollowing the Closing Date, as reported on the Nasdaq National Market System\n(\"NASDAQ\").\n\n                     (iii)  As soon as reasonably  practicable  after the\nEffective Time, the Company will deliver to Assumed Option holders appropriate\nnotices setting forth such holders' rights pursuant to 24\/7's 1998 Stock\nIncentive Plan and confirming that the Assumed Options have been assumed by 24\/7\nunder its 1998 Stock Incentive Plan in accordance with the terms and conditions\nrequired by this Section 1.6(b).\n\n                (d)  CANCELLATION OF COMPANY-OWNED STOCK.  Each share of Company\nCommon Stock and Company Preferred Stock held by the Company immediately prior\nto the Effective Time shall be canceled and extinguished without any conversion\nthereof.\n\n                (e)  CAPITAL STOCK OF THE SUBSIDIARY. Each share of common \nstock, par value $0.01 per share, of the Subsidiary issued and outstanding\nimmediately prior to the Effective Time shall be exchanged for and converted\ninto one validly issued, fully paid and non-assessable share of common stock, no\npar value, of the Surviving Corporation. Each stock certificate of the\nSubsidiary evidencing ownership of any such shares shall evidence ownership of\nsuch shares of capital stock of the Surviving Corporation.\n\n                                       4\n\n\n\n\n                (f)  FRACTIONAL SHARES.  No fraction of a share of 24\/7 Common \nStock shall be issued by virtue of the Merger, but in lieu thereof each holder\nof a share of Company Common Stock or Company Preferred Stock who would\notherwise be entitled to a fraction of a share of 24\/7 Common Stock (after\naggregating all fractional shares of 24\/7 Common Stock that otherwise would be\nreceived by such holder) shall receive from 24\/7 an amount of cash (rounded to\nthe nearest whole cent) equal to the product of (i) such fraction, multiplied by\n(ii) the average closing price of one share of 24\/7 Common Stock for the five\n(5) most recent days that 24\/7 Common Stock has traded ending on the trading day\nimmediately prior to the Effective Time, as reported on Nasdaq.\n\n                (g)  ADJUSTMENTS TO EXCHANGE RATIO.  The Exchange Ratio shall be\nadjusted to reflect fully the appropriate effect of any stock split, reverse\nstock split, stock dividend (including any dividend or distribution of\nsecurities convertible into 24\/7 Common Stock), reorganization,\nrecapitalization, reclassification or other like change with respect to 24\/7\nCommon Stock occurring on or after the date hereof and prior to the Effective\nTime.\n\n                (h)  ALL OTHER CAPITAL STOCK OF THE COMPANY.  All other capital\nstock of the Company shall be canceled and retired and shall cease to exist, and\nno consideration shall be issued or delivered in exchange therefor.\n\n          1.7   SURRENDER AND PAYMENT.\n        \n                (a)  The Merger Consideration delivered upon the surrender for \nexchange of the shares of Company Common Stock and Company Preferred Stock in\naccordance with the terms hereof shall be deemed to have been issued in full\nsatisfaction of all rights pertaining to such shares, and after the Effective\nTime, there shall be no further registration or transfers of shares of Company\nCommon Stock and Company Preferred Stock that were outstanding prior to the\nClosing Date. If after the Effective Time certificates which immediately prior\nto the Effective Time represented outstanding shares of Company Common Stock and\nCompany Preferred Stock (the \"Certificates\") are presented to the Surviving\nCorporation for any reason, they shall be canceled and exchanged as provided in\nthis Article I.\n\n                (b)   If certificates for shares of 24\/7 Common Stock are to be\nissued in the name of a person other than the person in whose name the\nsurrendered Certificate is registered, it shall be a condition of the issuance\nthereof that the Certificates so surrendered shall be properly endorsed or shall\nbe otherwise in proper form for transfer and that the person requesting such\nexchange shall have paid to 24\/7 or any agent designated by it any transfer or\nother taxes required by reason of the issuance of certificates for shares of\n24\/7 Common Stock in the name of a person other than the registered holder of\nthe Certificate surrendered or shall have established to the satisfaction of\n24\/7 or any agent designated by it that such tax either has been paid or is not\napplicable.\n   \n          1.8   ESCROW INDEMNITY ACCOUNT. Promptly after the Closing Date, 24\/7 \nshall \n\n                                       5\n\n\n\n\ndeliver to the escrow agent (the \"ESCROW AGENT\") under the escrow agreement \ndated the Closing Date, substantially in the form of EXHIBIT A hereto (the\n\"ESCROW AGREEMENT\"), a certificate representing a number of shares of 24\/7\nCommon Stock equal to an aggregate of twenty-two percent (22%) of the Merger\nConsideration, to be held pursuant to the provisions of the Escrow Agreement to\nbe held in an escrow account (the \"ESCROW INDEMNITY ACCOUNT\") pursuant to the\nterms of the Escrow Agreement.\n\n\n          1.9   LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificates \nshall have been lost, stolen or destroyed, 24\/7 shall issue in exchange for such\nlost, stolen or destroyed Certificates, upon the making of an affidavit of that\nfact by the holder thereof, the Merger Consideration; PROVIDED, HOWEVER, that\n24\/7 may, in its discretion and as a condition precedent to the issuance and\ndelivery thereof, require the owner of such lost, stolen or destroyed\nCertificates to deliver a bond in such sum as it may reasonably direct as\nindemnity against any claim that may be made against 24\/7 or the Company with\nrespect to the Certificates alleged to have been lost, stolen or destroyed.\n\n          1.10   TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time \nafter the Effective Time, any such further action is necessary or desirable to\ncarry out the purposes of this Agreement and to vest the Surviving Corporation\nwith full right, title and possession to all assets, property, rights,\nprivileges, powers and franchises of the Company and the Subsidiary, the\nofficers and directors of the Company and the Subsidiary are fully authorized in\nthe name of their respective corporations or otherwise to take, and will take,\nall such lawful and necessary action. 24\/7 shall cause the Subsidiary to perform\nall of its obligations relating to this Agreement and the transactions\ncontemplated hereby.\n\n\n                                   ARTICLE II\n                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n          Except as disclosed in that section of the document of even date\nherewith delivered by the Company to 24\/7 prior to the execution and delivery of\nthis Agreement (the \"COMPANY DISCLOSURE SCHEDULE\") corresponding to the section\nof this Agreement to which any of the representations and warranties\nspecifically relate or as disclosed in another section of the Company Disclosure\nSchedule if it is reasonably apparent on the face of the disclosure that it is\napplicable to another section of this Agreement, the Company represents and\nwarrants to 24\/7 as follows:\n\n          2.1   ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is a\ncorporation or other legal entity duly organized, validly existing and in good\nstanding under the laws of the jurisdiction of its incorporation and has the\nrequisite power and authority to own, lease and operate the properties it\npurports to own, operate or lease and to carry on its business as it is now\nbeing conducted and as currently proposed to be conducted, except where the\nfailure to\n\n                                       6\n\n\n\nbe so organized, existing and in good standing or to have such power and\nauthority would not reasonably be expected to have a material adverse effect on\nthe business, results of operations or financial condition of the Company, taken\nas a whole, or on the ability of the parties to consummate the transactions\ncontemplated by this Agreement (a \"COMPANY MATERIAL ADVERSE EFFECT\"). The\nCompany is duly qualified or licensed as a foreign corporation or other legal\nentity to do business, and is in good standing, in each jurisdiction where the\ncharacter of its properties owned, leased or operated by it or the nature of its\nactivities makes such qualification or licensing necessary, except for such\nfailures to be so duly qualified or licensed and in good standing that would not\nreasonably be expected to have a Company Material Adverse Effect. The Company\ndoes not, directly or indirectly, own any equity or similar interest in, or any\ninterest convertible into or exchangeable or exercisable for, any equity or\nsimilar interest in, any corporation, partnership, joint venture or other\nbusiness association or entity. Except for a dormant subsidiary, a Texas\ncorporation with no assets or operations, the Company has no subsidiaries.\n\n          2.2   ARTICLES OF INCORPORATION AND BY-LAWS. The Company has\nheretofore furnished to 24\/7 a complete and correct copy of its Articles of\nIncorporation (certified by the Secretary of State of the State of California)\nand By-Laws, as amended to date. Such Articles of Incorporation and By-Laws of\nthe Company are in full force and effect. The Company is not in violation of any\nof the provisions of its Articles of Incorporation or By-Laws.\n  \n          2.3   COMPANY CAPITAL STRUCTURE.\n\n             (a)   The authorized capital stock of the Company consists of: (i)\n15,000,000 shares of Company Common Stock, of which there are 7,855,882 shares\nissued and outstanding as of date hereof and (ii) 2,000,000 shares of preferred\nstock, no par value, of which 1,713,614 shares are issued and outstanding. All\nof the outstanding shares of Company Common Stock and Company Preferred Stock\nare duly authorized, validly issued, fully paid and nonassessable and are not\nsubject to preemptive or similar rights created by statue, the Articles of\nIncorporation or Bylaws of the Company or any agreement or document to which the\nCompany is a party or by which it is bound. As of the date of this Agreement\nthere were no shares of Company Common Stock held in treasury by the Company.\n\n             (b)   As of the date of this Agreement  2,146,000  shares of\nCompany Common Stock are issuable pursuant to outstanding options (whether or\nnot currently exercisable) to purchase Company Common Stock granted under the\nCompany Option Plan for a weighted average price of $0.364, all of which shares\nof Company Common Stock were reserved for issuance pursuant to the Company's\nOption Plan.\n\n             (c)   As of the date of this  Agreement no shares of Company\nCommon Stock are issuable pursuant to outstanding warrants (whether or not\ncurrently exercisable) to purchase Company Common Stock.\n\n                                       7\n\n\n\n\n          2.4   OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth \nin Section 2.3 of this Agreement (including the related section of the Company\nDisclosure Schedule), there are no equity securities, partnership interests or\nsimilar ownership interests of any class of any Company equity security, or any\nsecurities exchangeable or convertible into or exercisable for such equity\nsecurities, partnership interests or similar ownership interests, issued,\nreserved for issuance or outstanding. Except as set forth in Section 2.3 of this\nAgreement, there are no subscriptions, options, warrants, equity securities,\npartnership interests or similar ownership interests, calls, rights (including\npreemptive rights), commitments or agreements of any character (contingent or\notherwise) to which the Company is a party or by which it is bound obligating\nthe Company to (i) issue, deliver or sell, or cause to be issued, delivered or\nsold, or repurchase, redeem or otherwise acquire, or cause the repurchase,\nredemption or acquisition of, any shares of capital stock, partnership interests\nor similar ownership interests of the Company; (ii) grant, extend, accelerate\nthe vesting of or enter into any such subscription, option, warrant, equity\nsecurity, call, right, commitment or agreement; or (iii) provide funds to or\nmake any investment (in the form of a loan, capital contribution or otherwise)\nin any entity. As of the date of this Agreement, there is no voting trust, proxy\nor other agreement or understanding to which the Company is a party or by which\nit is bound with respect to any equity security of any class of the Company.\n\n          2.5   AUTHORITY RELATIVE TO THIS AGREEMENT; OWNERSHIP.\n\n                (a)  The Company has all requisite power and authority to \nexecute and deliver this Agreement and to perform its obligations hereunder and\nto consummate the transactions contemplated hereby, as well as all other\nagreements, certificates and documents executed or delivered, or to be executed\nor delivered, by the Company in connection herewith (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\naction on the part of the Company, and no other proceedings are necessary to\nauthorize this Agreement or to consummate the transactions contemplated hereby,\nexcept for the filing of the Agreement of Merger and Certificate of Merger\npursuant to California Law and Delaware Law, respectively. Each of the Company\nDocuments to which the Company is, or will be, a party has been, or will be,\nduly and validly executed and delivered by the Company, and, assuming the due\nauthorization, execution and delivery of the Company Documents by 24\/7 and\/or\nthe Subsidiary, as applicable, are (or when executed and delivered will be)\nlegal, valid and binding obligations of the Company, enforceable against the\nCompany in accordance with their respective terms, except as limited by (i)\napplicable bankruptcy, insolvency, reorganization, moratorium and other laws of\ngeneral application affecting the enforcement of creditors' rights generally and\n(ii) general principles of equity, regardless of whether asserted in a\nproceeding in equity or at law.\n\n                (b)  The Board of Directors of the Company  (including  any\nrequired committee or subgroup of the Board of Directors of the Company) at a\nmeeting duly called at which all members were present or by unanimous written\nconsent as permitted by California Law\n\n                                       8\n\n\n\nhas (A) unanimously declared that this Agreement, the Merger and the other\ntransactions contemplated hereby are fair to, and in the best interests of, the\nCompany and its shareholders; (B) authorized, approved and adopted this\nAgreement, the Merger and the other transactions contemplated hereby; and (C) as\nof the date hereof, determined to recommend that the shareholders of the Company\napprove and adopt this Agreement and approve the Merger. None of the aforesaid\nactions by the Board of Directors of the Company has been amended, rescinded or\nmodified.\n\n                (c)  The holders of all of the outstanding shares of the Company\nCommon Stock have authorized, approved and adopted this Agreement, the Merger\nand the other transactions contemplated hereby and have authorized the taking of\nall appropriate action pursuant to California Law and Delaware Law to cause the\nMerger to be effective at the Effective Time. No other vote of the holders of\nany class or series of the Company's capital stock is necessary to authorize,\napprove and adopt this Agreement and the Merger.\n\n          2.6   NO CONFLICTS, REQUIRED FILINGS AND CONSENTS.\n\n                (a)  The execution and delivery of this Agreement by the Company\ndo not, and the performance of this Agreement by the Company will not, (i)\nconflict with or violate the Articles of Incorporation or By-Laws of the\nCompany; (ii) subject to compliance with the requirements set forth in Section\n2.6(b) below, conflict with or violate any law, rule, regulation, order,\njudgment or decree applicable to the Company or by which the Company or any of\nits respective properties is bound or affected; or (iii) except as set forth in\nSection 2.6 of the Company Disclosure Schedule, 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, or result in the\ncreation of an Encumbrance on any of the properties or assets of the Company\npursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,\nlicense, permit, franchise or other instrument or obligation to which the\nCompany is a party or by which the Company or any of its respective properties\nis bound or affected, except, in the case of clauses (ii) and (iii), for such\nbreaches, violations or defaults that would not have a Company Material Adverse\nEffect.\n\n                (b)  The  execution  and delivery of this  Agreement by the\nCompany does not, and the performance of this Agreement by the Company will not,\nrequire any consent, approval, authorization or permit of, or declaration,\nregistration or filing with or notification to, any court, administrative agency\nor commission or other governmental authority or instrumentality, foreign or\ndomestic (\"GOVERNMENTAL ENTITY\") except (i) such consents, approvals, orders,\nauthorizations, registrations and declarations and filings as may be required\nunder applicable federal and state securities (or related) laws, (ii) the filing\nof the Agreement of Merger and Certificate of Merger pursuant to California Law\nand Delaware Law, respectively, and (iii) such consents, approvals,\nauthorizations, filings and registrations which if not obtained or made, would\nnot prevent or delay consummation of the Merger or otherwise prevent the Company\nfrom \n\n                                       9\n\n\n\nperforming its obligations under this Agreement.\n\n          2.7   FINANCIAL STATEMENTS. The Company has delivered to 24\/7 the \nunaudited balance sheet of the Company as of December 31, 1999 and statement of\nprofit and loss for the 12-month period then ended(collectively, the \"Company\nFinancial Statements\"). Except as disclosed in Section 2.7 of the Company\nDisclosure Schedule, the Company Financial Statements are in accordance with the\nbooks and records of the Company, and reflect accurately in all material\nrespects the financial position and results of operations of the Company as at\nthe dates and for the periods indicated. Except as disclosed in Section 2.7 of\nthe Company Disclosure Schedule, the Company Financial Statements do not omit\nany material transactions involving the Company as at the dates and for the\nperiods indicated.. The accounts receivable of the Company (i) arose in the\nordinary course of business for goods or services which the Company has\ncontracted to deliver or render, (ii) constitute only valid, undisputed claims\nand are not subject to counterclaims or setoffs, (iii) except as is disclosed in\nSection 2.7 of the Company Disclosure Schedule, are good and the Company\ncurrently believes them to be collectible in full within 90 days of the date\nthey were created at the aggregate recorded amounts thereof net of the reserve\ntherefor and (iv) have not been extended or rolled over in order to make them\ncurrent.\n\n          2.8   NO UNDISCLOSED LIABILITIES. Except as is disclosed in Section\n2.8 of the Company Disclosure Schedule, the Company has no liabilities\n(absolute, accrued, contingent or otherwise) which are, individually or in the\naggregate, material to the business, operations or financial condition of the\nCompany, except liabilities (i) adequately provided for in the Company's\nunaudited balance sheet as of December 31, 1999 included in the Company\nFinancial Statements (the \"COMPANY BALANCE SHEET\"), (ii) incurred since the date\nof the Company Balance Sheet in the ordinary course of business and consistent\nwith past practice and (iii) incurred in connection with the transactions\ncontemplated by this Agreement. The Company does not know of any basis for the\nassertion against the Company of any other liability or loss contingency for\nwhich a reserve is required to be disclosed in the Company Financial Statements,\nin accordance with GAAP.\n\n          2.9   ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in\nSection 2.9 of the Company Disclosure Schedule, since December 31, 1999, the\nCompany has conducted its business in the ordinary course and there has not\noccurred: (i) any Company Material Adverse Effect, (ii) any declaration, setting\naside or payment of any dividend on, or other distribution (whether in cash,\nstock or property) in respect of any of the Company's capital stock, or any\npurchase, redemption or other acquisition by the Company of any of its capital\nstock or any other securities of the Company, (iii) any split, combination or\nreclassification of any of the Company's capital stock, (iv) any amendments or\nchanges in the Articles of Incorporation or By-Laws of the Company; (v) any\nchange by the Company in its accounting methods, principles or practices except\nas required by GAAP; (vi) any revaluation by the Company of any of its assets,\nincluding, without limitation, writing down the value of capitalized software or\ninventory or writing off notes or accounts receivable other than in the ordinary\ncourse of business; or (vii) any sale or transfer of a material amount of assets\nof the Company.\n\n                                       10\n\n\n\n\n          2.10  ABSENCE OF LITIGATION. Section 2.10 of the Company Disclosure \nSchedule contains a complete and correct list of all actions, suits,\nproceedings, claims or investigations pending or, to the knowledge of the\nCompany, threatened against the Company or any of its respective assets or, in\nconnection with the Company's business, any of the Company's officers, directors\nor employees before any Governmental Entity. Except as set forth in Section 2.10\nof the Company Disclosure Schedule, neither the Company nor, in connection with\nthe Company's business, any of the Company's officers, directors or employees is\nsubject or party to any judgment, order, decree or other direction of, or\nstipulation with, any Governmental Entity. As of the date hereof, there are no\nactions, suits or proceedings pending or, to the knowledge of the Company,\nthreatened against the Company or any of the shareholders that seek to prevent\nor challenge, or seek damages in connection with, the transactions contemplated\nby any of the Company Documents or otherwise arising out of or in any way\nrelated to any of the Company Documents.\n\n          2.11  EMPLOYEE BENEFIT PLANS.\n\n                (a)   Except as disclosed on Section 2.11(a) of the Company\nDisclosure Schedule, neither the Company nor any entity that would be deemed a\n\"single employer\" with the Company under Section 414(b), (c), (m) or (o) of the\nCode or Section 4001 of the Employee Retirement Income Security Act of 1974, as\namended (\"ERISA\") (an \"ERISA AFFILIATE\"), maintains, sponsors, contributes to,\nor has or has had an obligation to, or otherwise participated in or participates\nin, or in any way, directly or indirectly, has or has had any liability with\nrespect to, any \"employee benefit plan,\" as defined in Section 3(3) of ERISA, or\nany other bonus, profit sharing, pension, deferred compensation, incentive,\nstock option, fringe benefit, health, welfare, change in control, severance or\nother similar plan, policy, or arrangement, whether written or unwritten,\ninsured or self-insured (each, a \"PLAN\"). None of the Company, any ERISA\nAffiliate or any of their respective predecessors has ever contributed to,\ncontributes to, has ever been required to contribute to, or otherwise\nparticipated in or participates in, or in any way, directly or indirectly, has\nany liability with respect to, any plan subject to Section 412 of the Code,\nSection 302 of ERISA or Title IV of ERISA, including, without limitation, any\n\"multiemployer plan\" (within the meaning of Sections 3(37) or 4001(a)(3) of\nERISA or Section 414(f) of the Code) or any single employer pension plan (within\nthe meaning of Section 4001(a)(15) of ERISA). Except as disclosed on Section\n2.11(a) of the Company Disclosure Schedule, the consummation of the transactions\ncontemplated by this Agreement will not give rise to any liability of the\nCompany for severance pay or termination pay or accelerate the time of payment\nor vesting or increase the amount of compensation or benefits due to any\nemployee, director, shareholder or beneficiary of the Company (whether current,\nformer or retired) or their beneficiaries solely by reason of such transactions\nor by reason of a termination of employment following such transactions. Section\n2.11(a) of the Company Disclosure Schedule contains a list of all Plans. A copy\nof each such Plan has previously been delivered by the Company to 24\/7. No\nevent, condition or circumstance exists that will prevent the amendment or\ntermination of any Plan.\n\n                                       11\n\n\n\n\n                (b)  With  respect  to each of the Plans  listed in Section\n2.11(a) of the Company Disclosure Schedule:\n\n                     (i)    each Plan intended to qualify under Section 401(a) \nof the Code is qualified and has received a determination letter from the\nInternal Revenue Service (\"IRS\") to the effect that the Plan is qualified under\nSection 401 of the Code, any trust maintained pursuant thereto is exempt from\nfederal income taxation under Section 501 of the Code and to the knowledge of\nthe Company, nothing has occurred or is expected to occur through the Effective\nTime that caused or could cause the loss of such qualification or exemption or\nthe imposition of any penalty or tax liability;\n\n                     (ii)   all  payments  required by any Plan, any  collective\nbargaining agreement  or other  agreement or by law  (including,  without  \nlimitation, all contributions, insurance premiums or intercompany charges) with\nrespect to all periods through the date of the Effective Time shall have been\nmade prior to the Effective Time (on a pro rata basis where such payments are\notherwise discretionary at year end) or provided for by the Company, as\napplicable, by full accruals as if all targets required by such Plan had been or\nwill be met at maximum levels on its financial statements;\n\n                     (iii)  no  claim,  lawsuit,  arbitration or  other  action\n(other than non-material or routine claims for benefits and appeals of such \nclaims) has been asserted or instituted, or to the knowledge of the Company,\nthreatened or anticipated against any Plan, any trustee or fiduciaries thereof,\nthe Company, any ERISA Affiliate, any director, officer or employee thereof, or\nany of the assets of any trust of any Plan;\n\n                     (iv)   each Plan complies in all material  respects and has\nbeen maintained and administered at all times in all material respects in\naccordance with its terms and all applicable laws, rules and regulations,\nincluding, without limitation, ERISA and the Code;\n\n                     (v)    to the knowledge of the Company, no \"prohibited\ntransaction,\" within the meaning of Section 4975 of the Code and Section 406 of\nERISA, has occurred or is expected to occur with respect to each Plan (and the\nconsummation of the transactions contemplated by this Agreement will not\nconstitute or directly or indirectly result in such a \"prohibited transaction\");\n\n                     (vi)   no Plan is  under  audit or to the  knowledge of the\nCompany, investigation by the IRS,  Department of Labor or any other \nGovernmental Entity and no such completed audit, if any, has resulted in the\nimposition of any material tax or penalty; and\n\n                     (vii)  with  respect to each Plan that is funded  mostly or\npartially through an insurance policy, neither the Company nor any ERISA \nAffiliate has any liability in the nature of retroactive rate adjustment, loss\nsharing arrangement or other actual or contingent liability arising wholly or\npartially out of events occurring on or before the Effective Time.\n\n\n                                       12\n\n\n\n                (c)  Neither the Company nor any ERISA Affiliate maintains,\ncontributes to or in any way provides for any benefits of any kind whatsoever\n(other than under Section 4980B of the Code, the Federal Social Security Act or\na plan qualified under Section 401(a) of the Code) to any current or future\nretiree or terminee. Neither the Company nor any ERISA Affiliate has any\nunfunded liabilities pursuant to any Plan that is not intended to be qualified\nunder Section 401(a) of the Code. No amounts payable under any Plan will fail to\nbe deductible for federal income tax purposes by virtue of Section 280G of the\nCode.\n\n          2.12  LABOR MATTERS. Section 2.12 of the Company Disclosure Schedule\ncontains a list of the names, office locations, compensation and years of\ncredited service for severance, vacation and pension plan purposes of all full-\nand part-time employees of the Company as at January 30, 2000. The Company is\nnot a party to a collective bargaining agreement and does not know of any\nefforts 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.\nTo the knowledge of the Company, no key employee of the Company has indicated\nthat he is considering terminating his employment. The Company has complied in\nall material respects with all applicable wage and hour, equal employment,\nsafety and other legal requirements relating to its employees.\n\n          2.13  TAXES. Except as disclosed in Section 2.13 of the Company\nDisclosure Schedule, (A) the Company has timely and properly filed all federal,\nforeign, state, local and other tax returns and reports which are required to be\nfiled by it; (B) all such tax returns were true, correct and complete in all\nmaterial respects, and all taxes, interest and penalties due and payable as\nshown on such returns or claimed to be due by any taxing authority have been\ntimely paid; (C) all unpaid federal, foreign, state, local and other taxes,\nfees, assessments, duties and other similar governmental charges payable by the\nCompany or which will, with the passage of time, become payable by the Company\n(including interest and penalties), whether or not disputed, with respect to any\nperiod or a portion thereof ending at, on or prior to and including December 31,\n1999, have been adequately reserved against in accordance with GAAP on the face\nof the Company Balance Sheet; (D) 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; (E)\nthe Company has not at any time consented to have the provisions of Section\n341(f)(2) of the Code apply to it; (F) all taxes to be collected or withheld by\nthe Company have been duly collected or withheld and any such amounts that were\nrequired to be remitted to any taxing authority have been duly remitted; and (G)\nthere are no tax rulings, requests for rulings, closing agreements or changes of\naccounting method relating to the Company that could affect its tax liability\nfor any period after the Effective Time. Except as disclosed in Section 2.13 of\nthe Company Disclosure Schedule, he Company has not used any of the following\nmethods of accounting: installment, completed contract, or long-term contract.\nFor purposes of this Agreement, \"tax\" or \"taxes\" means taxes of any kind, levies\nor other like \n\n                                       13\n\n\n\nassessments, customs, duties, imposts, charges and including, without\nlimitation, income, gross receipts, ad valorem, value added, excise, real and\npersonal property, asset, sales, use, license, payroll, transaction, capital,\nnet worth and franchise taxes, estimated taxes, withholding, employment, social\nsecurity, workers compensation, occupation and 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          2.14  INTELLECTUAL PROPERTY. For the purposes of this Agreement, the\nfollowing terms have the following definitions:\n\n                \"INTELLECTUAL PROPERTY\" shall mean any or all of the following \nand all rights in, arising out of, or associated therewith: (i) all United\nStates, international and foreign patents and applications therefor and all\nreissues, divisions, renewals, extensions, provisionals, continuations and\ncontinuations-in-part thereof; (ii) all inventions (whether patentable or not),\ninvention disclosures, improvements, trade secrets, proprietary information,\nknow how, technology, technical data and customer lists, and all documentation\nrelating to any of the foregoing; (iii) all copyrights, copyright registrations\nand applications therefor, and all other rights corresponding thereto throughout\nthe world; (iv) all industrial designs and any registrations and applications\ntherefor throughout the world; (v) all trade names, logos, URLs, common law\ntrademarks and service marks, trademark and service mark registrations and\napplications therefor throughout the world (collectively, the \"TRADEMARKS\");\n(vi) all databases and data collections and all rights therein throughout the\nworld; (vii) all moral and economic rights of authors and inventors, however\ndenominated, throughout the world, and (viii) any similar or equivalent rights\nto any of the foregoing anywhere in the world.\n\n             \"COMPANY INTELLECTUAL PROPERTY\" shall mean any Intellectual \nProperty, including, without limitation, all Registered Intellectual Property,\nthat is owned by, or exclusively licensed to, the Company.\n\n             \"REGISTERED INTELLECTUAL PROPERTY\" means all United States,\ninternational and foreign: (i) patents and patent applications (including\nprovisional applications); (ii) registered trademarks, applications to register\ntrademarks, intent-to-use applications, or other registrations or applications\nrelated to trademarks; (iii) registered copyrights and applications for\ncopyright registration; and (iv) any other Intellectual Property that is the\nsubject of an application, certificate, filing, registration or other document\nissued, filed with, or recorded by any state, government or other public legal\nauthority.\n\n             \"COMPANY REGISTERED INTELLECTUAL PROPERTY\" means all of the \nRegistered Intellectual Property owned by, or filed in the name of, the Company.\n\n             (a)   A list and brief description of the Company Registered\nIntellectual Property, and all contracts, licenses and agreements to which the\nCompany is a party (i) with\n\n                                       14\n\n\n\n\nrespect to Company Intellectual Property licensed or transferred to any third\nparty; or (ii) pursuant to which a third party has licensed or transferred any\nIntellectual Property to the Company, other than licenses for general business\nsoftware purchased off the shelf is set forth in Section 2.14(a) of the Company\nDisclosure Schedule.\n\n                (b)  No Company Intellectual Property owned or developed by the\nCompany or product or service of the Company is subject to any proceeding or\noutstanding decree, order, judgment, agreement, or stipulation of any\nGovernmental Entity restricting in any manner the use, transfer, or licensing\nthereof by the Company, or which may affect the validity, use or enforceability\nof such Company Intellectual Property.\n\n                (c)  All necessary  registration,  maintenance  and renewal fees\ncurrently due in connection with Company Registered Intellectual Property have\nbeen made and all necessary documents, recordations and certificates in\nconnection with such Company Registered Intellectual Property have been filed\nwith the relevant patent, copyright, trademark or other authorities in the\nUnited States or foreign jurisdictions, as the case may be, for the purposes of\nmaintaining such Registered Intellectual Property.\n\n                (d)  The Company owns and has good and exclusive title to, or \nhas joint ownership or license (to the knowledge of the Company, sufficient for\nthe conduct of its business as currently conducted) to, each item of Company\nIntellectual Property free and clear of any Encumbrance (excluding licenses and\nrelated restrictions); and the Company is the exclusive owner of all Trademarks\ncurrently used in connection with the operation or conduct of the business of\nthe Company, including the sale of any products or the provision of any services\nby the Company.\n\n                (e)  The Company owns, and has good title to, or has valid (to \nthe knowledge of the Company) and licenses (to the knowledge of the Company,\nsufficient for the conduct of its business as currently conducted) for all\ncopyrightable works currently used in its business.\n\n                (f)  Except as set forth in Section 2.14(f) of the Company\nDisclosure Schedule, to the extent that any Intellectual Property currently used\nin the Company's business has been developed or created by a third party for the\nCompany, the Company has a written agreement with such third party with respect\nthereto which provides the Company either (i) joint or exclusive ownership of\nall such third party Intellectual Property, or (ii) a license (to the knowledge\nof the Company, sufficient for the conduct of its business as currently\nconducted) to all such third parties' Intellectual Property by operation of law\nor by valid (to the knowledge of the Company) assignment, transfer or license.\n\n                (g)  The Company has not transferred ownership of, or granted \nany exclusive license with respect to, any Intellectual Property currently used \nin the Company's business that is or was the Company Intellectual Property, to \nany third party.\n\n                                       15\n\n\n\n\n                (h)  All contracts, license agreements and other agreements\nrelating to the Company Intellectual Property currently used in the Company's\nbusiness are in full force and effect. The consummation of the transactions\ncontemplated by this Agreement will neither violate nor result in the breach,\nmodification, cancellation, termination, or suspension of such contracts,\nlicenses and agreements. The Company is in compliance with, and has not breached\nany material term of any such contracts, licenses and agreements and, to the\nknowledge of the Company, all other parties to such contracts, licenses and\nagreements are in compliance with, and have not breached any term of, such\ncontracts, licenses and agreements. Following the Closing Date, the Surviving\nCorporation will be permitted to exercise all of the Company's rights under such\ncontracts, licenses and agreements to the same extent the Company would have\nbeen able to had the transactions contemplated by this Agreement not occurred\nand without the payment of any additional amounts or consideration other than\nongoing fees, royalties or payments which the Company would otherwise be\nrequired to pay.\n\n                (i)  The  operation  of the business of the Company as such\nbusiness is currently conducted, including the Company's design, development,\nmarketing and sale of the products or services of the Company (including with\nrespect to products currently under development) and the Company's use of the\nCompany Intellectual Property, to the knowledge of the Company, has not, does\nnot and will not infringe, dilute or misappropriate the Intellectual Property of\nany third party or constitute unfair competition or trade practices under the\nlaws of any relevant jurisdiction.\n\n                (j)  Except as provided in Section 2.14(j) of the Company\nDisclosure Schedule, the Company has not received actual notice from any third\nparty and, to the knowledge of the Company, the Company has not received any\nthreat, that the operation of the business of the Company or any act, product or\nservice of the Company, infringes, dilutes or misappropriates the Intellectual\nProperty of any third party or constitutes unfair competition or trade practices\nunder the laws of any jurisdiction.\n\n                (k)  To the knowledge of the Company, no person has or is\ninfringing, diluting or misappropriating any Company Intellectual Property or\nunfairly competing with the Company.\n\n                (l)  The Company has taken  reasonable steps to protect the\nCompany's rights in the Company's confidential information and trade secrets\nthat it wishes to protect or any trade secrets or confidential information of\nthird parties provided to the Company or its subsidiaries. Except under\nconfidentiality obligations, there has not been disclosure by the Company of any\nsuch trade secrets or confidential information.\n\n          2.15  COMPLIANCE; PERMITS; RESTRICTIONS.\n\n                (a)  The Company is not in conflict with, or in default or in\nviolation of\n\n                                       16\n\n\n\n(i) any law, rule, regulation, order, judgment or decree applicable to the\nCompany or by which the Company or any of its business or properties is, or the\nCompany believes is reasonably likely to be, bound or affected, or (ii) 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 respective properties is bound or affected, except\nfor conflicts, violations and defaults that (individually or in the aggregate)\nwould not reasonably be expected to have a Company Material Adverse Effect. No\ninvestigation or review by any Governmental Entity is pending or, to the\nCompany's knowledge, has been threatened, against the Company, nor, to the\nCompany's knowledge, has any Governmental Entity indicated an intention to\nconduct an investigation of the Company. There is no agreement, judgment,\ninjunction, order or decree binding upon the Company which has or could\nreasonably be expected to have (after giving effect to the Merger) the effect of\nprohibiting or impairing any current or future business practice of the Company,\nany acquisition of property by the Company or the conduct of business by the\nCompany as currently conducted or as currently proposed to be conducted.\n\n                (b)  The Company holds, to the extent legally required, all\npermits, licenses, variances, exemptions, orders and approvals from Government\nEntities that are required for the operation of the business of the Company as\ncurrently conducted (collectively, the \"COMPANY PERMITS\") except for such\npermits, the failure of which to hold would not reasonably be expected to have a\nCompany Material Adverse Effect. The Company is in compliance in all respects\nwith the terms of the Company Permits, except where the failure to be in\ncompliance with the terms of the Company Permits would not reasonably be\nexpected to have a Company Material Adverse Effect.\n\n          2.16  AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as otherwise set \nforth in Section 2.16 of the Company Disclosure Schedule, as of the date hereof\nthe Company is not a party to or bound by:\n\n                (a)  any employment or consulting agreement, contract or \ncommitment with any officer or director or higher level employee or member of\nthe Company's Board of Directors, other than those that are terminable by the\nCompany on no more than 30 days notice without liability or financial\nobligation, except to the extent general principles of wrongful termination law\nmay limit the Company's ability to terminate employees at will;\n\n                (b)  any agreement of indemnification outside the ordinary \ncourse of the Company's business or any guaranty;\n\n                (c)  any agreement, contract or commitment containing any \ncovenant limiting the right of the Company to engage in any line of business or \nto compete with any person or granting any exclusive distribution rights;\n\n                (d)  any agreement, contract or commitment currently in force\nrelating to the disposition or acquisition by the Company after the date of this\nAgreement of assets not in \n\n\n                                       17\n\n\n\n\nthe ordinary course of business or pursuant to which the Company has any\nmaterial ownership interest in any corporation, partnership, joint venture or\nother business enterprise;\n\n                (e)  any agreement, contract or commitment currently in force to\nprovide source code to any third party for any product or technology; or\n\n                (f)  any other agreement,  contract or commitment currently in \neffect that is expected to represent more than 10% of the Company's revenue for\nthe calendar year 2000 or that requires the Company to make payments of greater\nthan $500,000 per year or more than $1,500,000 in the aggregate.\n\n          Neither the Company, nor to the Company's knowledge any other party to\na Company Contract (as defined below) is in breach, violation or default under,\nand the Company has not received written notice that it has breached, violated\nor defaulted under, any of the material terms or conditions of any of the\nagreements, contracts or commitments to which the Company is a party or by which\nit is bound that are required to be disclosed in the Company Disclosure Schedule\npursuant to clauses (a) through (f) above or pursuant to Section 2.14 hereof\n(any such agreement, contract or commitment, a \"COMPANY CONTRACT\") in such a\nmanner as would permit any other party to cancel or terminate any such Company\nContract, or would permit any other party to seek damages or other remedies\nwhich would have a Company Material Adverse Effect. The Company Contracts are in\nfull force and effect and the Company has performed all of the material\nobligations required to be performed by it and is entitled to all accrued\nbenefits under all the Company Contracts.\n\n          2.17  TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.\n\n                (a)  The Company owns no real property interests.  Section \n2.17(a) of the Company Disclosure Schedule lists all real property leases to\nwhich the Company is a party and each amendment thereto that is in effect as of\nthe date of this Agreement. All such current leases are in full force and\neffect, are valid and effective in accordance with their respective terms, and\nthere is not, under any of such leases, any existing default or event of default\n(or event which with notice or the lapse of time, or both, would constitute a\ndefault) that would give rise to a material claim.\n\n                (b)  The  Company  has good and  valid  title to, or in the case\nof leased properties and assets, valid leasehold interests in, all of its\ntangible properties and assets, real, personal and mixed, used or held for use\nin its business, free and clear of any Encumbrances, except as reflected in the\nCompany Financial Statements. The Company's equipment and assets (whether owned\nor leased) are in good operating condition and repair, subject to ordinary wear\nand tear. All assets, properties and rights relating to the Company's business\nwill, at the Closing, be held by, and all agreements, obligations and\ntransactions relating to the Company's business will, at the Closing, be entered\ninto, incurred and conducted by, the Company.\n\n                                       18\n\n\n\n\n          2.18  ENVIRONMENTAL MATTERS. \n\n                (a)  To the knowledge of the Company, all of the current \noperations of the Company and its assets, businesses and real property,\nincluding any operations at or from any real property presently or formerly\nowned, used, leased, occupied, managed or operated by the Company (collectively,\nthe \"REAL PROPERTY\"), comply in all material respects and have at all times\ncomplied in all material respects with all applicable Environmental Laws (as\ndefined below). \"Environmental Laws\" shall mean federal, foreign, state, local\nor common law, rule, regulation, ordinance, code, order or judgment (including\nany judicial or administrative interpretations, guidances, directives, policy\nstatements or opinions) relating to the injury to, or the pollution or\nprotection of, human health or the environment.\n\n                (b)  To the knowledge of the Company, none of the assets of the\nCompany, nor any of the Real Property, contains any hazardous substances in, on,\nover, under or at it, in concentrations which would violate in any material\nrespect any applicable Environmental Laws or reasonably would be likely to\nresult in the imposition of material liability or obligations on the Company\nunder any applicable Environmental Laws, including any material liability or\nobligations for the investigation, corrective action, remediation or monitoring\nof hazardous substances in, on, over, under or at the Real Property. The Company\nhas not received any written notice from any Governmental Entity or third party\nof any actual or threatened environmental liabilities.\n\n                (c)  To the knowledge of the Company, the Company has all the\npermits, licenses, authorizations and approvals necessary for the conduct of its\nbusiness and for the operations on, in or at the Real Property which are\nrequired under applicable Environmental Laws (the \"ENVIRONMENTAL PERMITS\") and\nit is in compliance in all material respects with the terms and conditions of\nall such Environmental Permits. To the knowledge of the Company, no reason\nexists why the Company would not be capable of continued operation of its\nbusiness in compliance in all material respects with the Environmental Permits\nand the applicable Environmental Laws.\n\n                (d)  To the knowledge of the Company, the Company has not\ncontractually, by operation of law, by the Environmental Laws, by common law or\notherwise assumed or succeeded to any environmental liabilities of any\npredecessors or any other person or entity.\n\n          2.19  INSURANCE. The Company has policies of insurance and bonds of \nthe  type and in amounts customarily carried by persons conducting businesses or\nowning assets similar to those of the Company. There is no material claim\npending under any of such policies or bonds as to which coverage had been\nquestioned, denied or disputed by the underwriters of such policies or bonds.\nAll premiums due and payable under all such policies and bonds have been paid\nand the Company is otherwise in compliance with the terms of such policies and\nbonds. The Company has no knowledge of any threatened termination of, or\nmaterial premium increase with \n\n                                       19\n\n\n\nrespect to, any such policies.\n\n          2.20  CHANGE OF CONTROL PAYMENTS. Section 2.20 of the Company\nDisclosure Schedule sets forth each plan or agreement pursuant to which any\namounts may become payable (whether currently or in the future) to current or\nformer officers and directors of the Company as a result of the Merger.\n\n          2.21  INTERESTED PARTY TRANSACTIONS. Except as provided in Section \n2.21 of the Company Disclosure Schedule, the Company is not indebted to any\ndirector, officer, employee or agent of the Company (except for amounts due as\nnormal salaries and bonuses and in reimbursement of ordinary expenses), and no\nsuch person is indebted to the Company.\n\n          2.22  BOOKS AND RECORDS. The minute books and records of the Company\nmade available to 24\/7 have been maintained in accordance with good business\npractices, contain a complete and accurate summary of all meetings of the\ndirectors or actions by written consent since the time of organization of the\nCompany, and reflect all transactions referred to in such minutes accurately in\nall material respects.\n\n          2.23  IMPROPER PAYMENTS. The Company and its officers and agents have\nnot 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          2.24  YEAR 2000.\n\n                (a)  The computer systems of the Company (including, without\nlimitation, all software, hardware, workstations and related components,\nautomated devices, products consisting of or containing one or more thereof, and\nany and all enhancements, upgrades, customizations, modifications or\nmaintenance, embedded chips and other date sensitive equipment such as security\nsystems, alarms, elevators and other systems) (\"COMPUTER SYSTEMS\") are Year 2000\nCompliant (as defined below), except to the extent that such Computer Systems\nreceive data from third party computer systems that are not Year 2000 Compliant.\n\n                (b)  The Company's supply of services through its Computer \nSystems has not been and shall not be interrupted, delayed, decreased or\notherwise affected in any material respect by the failure of its Computer\nSystems to be Year 2000 Compliant.\n\n                (c)  To the knowledge of the Company, the Company's Computer \nSystems have the ability to properly interface and will continue to properly\ninterface with internal and external applications and systems of third parties\nwith whom the Company exchanges data electronically (including, without\nlimitation, customers, clients, suppliers, service providers, subcontractors,\nprocessors, converters, shippers, warehousemen, outsourcers, data\n\n\n                                       20\n\n\n\nprocessors, regulatory agencies and banks), whether or not their Computer\nSystems are Year 2000 Compliant.\n\n                For purposes of this Agreement, \"YEAR 2000 COMPLIANT\" means that\nthe Company's Computer Systems (1) are capable of recognizing, processing,\nmanaging, representing, interpreting and manipulating correctly date-related\ndata for dates earlier and later than January 1, 2000, including, but not\nlimited to, calculating, comparing, sorting, storing, tagging and sequencing,\nwithout resulting in or causing logical or mathematical errors or\ninconsistencies in any user-interface functionalities or otherwise, including\ndata input and retrieval, data storage, data fields, calculations, reports,\nprocessing or any other input or output, (2) have the ability to provide date\nrecognition for any data element without limitation (including, but not limited\nto, date-related data represented without a century designation, date-related\ndata whose year is represented by only two digits and date fields assigned\nspecial values), (3) have the ability to automatically function into and beyond\nthe year 2000 without human intervention and without any change in operations\nassociated with the advent of the year 2000, (4) have the ability to correctly\ninterpret data, dates and time into and beyond the year 2000, (5) have the\nability not to produce noncompliance in existing information or otherwise\ncorrupt such data into and beyond the year 2000, (6) have the ability to\ncorrectly process after January 1, 2000 data containing dates before that date,\n(7) have the ability to recognize all \"leap years,\" including February 29, 2000.\n\n          2.25  DISCLOSURE. No representation, warranty or other written\nstatement by the Company herein contains or will contain an untrue statement of\na material fact or omits or will omit to state a material fact necessary to make\nthe statements contained herein or therein not misleading.\n\n          2.26  CONDITION AND SUFFICIENCY OF ASSETS. The Company owns or has the\nright to use all the tangible assets necessary for the conduct of its business\nas conducted prior to the date hereof. To the knowledge of the Company, the\nbuildings, plants, structures, and equipment of the Company are structurally\nsound, are in good operating condition and repair, and are adequate for the uses\nto which they are being put and are sufficient for the continued conduct of the\nCompany's businesses after the Closing in substantially the same manner as\nconducted prior to the Closing, and the Company has conducted, and continues to\nconduct, its business only through the Company.\n\n          2.27  HART-SCOTT RODINO. The Company has no ultimate parent entity and\ndoes not meet the \"size-of-the-parties\" jurisdiction test imposed by Section\n201(a)(2) of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as\namended (the \"HSR Act\"), and the regulations promulgated thereunder.\n\n          2.28  BROKERS.  No broker, finder or investment banker, other than\nThomas Weisel Partners LLC, is entitled to any brokerage, finder's or other fee\nor commission in connection with the transactions contemplated by this Agreement\nbased upon arrangements made\n\n                                       21\n\n\n\nby or on behalf of the Company.\n\n          2.29 EXPENSES. The Company's expenses in connection with the\nnegotiation of this Agreement and the transactions contemplated hereby,\nincluding any fees to Thomas Weisel Partners LLC and McCutchen, Doyle, Brown &amp; Enersen, LLP, shall not exceed $1,650,000, in the aggregate, and an estimate\nthereof is set forth in Section 2.29 of the Company Disclosure Schedule.\n\n\n                                   ARTICLE IIA\n               REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS\n\n        The Shareholders, severally, represent and warrant to 24\/7 as follows:\n\n        2A.1  Ownership.  Each  Shareholder  is,  and  immediately  prior to the\nClosing will be, the record and beneficial  owner of the number and class(es) of\nShares set forth next to such  Shareholder's  name on the Ownership Table,  free\nand clear of any and all  Encumbrances  (as defined below) or claims of any kind\nwhatsoever.  For the purposes of this Agreement,  \"ENCUMBRANCES\" means any lien,\npledge, hypothecation,  charge, mortgage, security interest, encumbrance, claim,\ninfringement,  interference,  option, right of first refusal,  preemptive right,\ncommunity  property  interest  or  restriction  of  any  nature  (including  any\nrestriction  on the voting of any security,  any  restriction on the transfer of\nany  security  or other  asset,  any  restriction  on the  receipt of any income\nderived  from  any  asset,  any  restriction  on the  use of any  asset  and any\nrestriction on the  possession,  exercise or transfer of any other  attribute of\nownership of any asset) but does not include  liens imposed by law in respect of\nobligations  not yet due which are owed in respect  of taxes or which  otherwise\nare owed to carriers,  warehousepersons  or laborers.  On the Closing Date, each\nShareholder  will have the full right,  power and authority to assign,  transfer\nand deliver such  Shareholder's  Shares as provided in this Agreement,  and such\ndelivery will convey to 24\/7 lawful,  valid and marketable title to such Shares,\nfree and clear of any and all Encumbrances or claims of any kind whatsoever.\n\n        2A.2 ACQUISITION OF STOCK FOR INVESTMENT.  Each of the Shareholders that\nreceives  24\/7  Common  Stock  as part  of the  Merger  Consideration  hereunder\nacknowledges that such shares of 24\/7 Common Stock may not be sold, transferred,\noffered for sale, pledged,  hypothecated,  lent, or otherwise disposed of by him\nor it  without  registration  under  the  Securities  Act of  1933,  as  amended\n(\"Securities  Act\"), except pursuant to an exemption from registration under the\nSecurities Act, and without  compliance  with  applicable  \"blue sky\" laws. Each\nShareholder  is an  \"accredited  investor\"  as that term is  defined in Rule 501\npromulgated  under  the  Securities  Act.  Each  Shareholder  has  received  all\nrequested  documents and other information from 24\/7, and has had an opportunity\nto ask  questions  of and to  receive  answers  from the  officers  of 24\/7 with\nrespect  to the  business,  results  of  operations,  financial  conditions  and\nprospects of 24\/7.\n\n                                       22\n\n\n\n\n\n                                   ARTICLE IIB\n            ADDITIONAL REPRESENTATIONS AND WARRANTIES OF MEMBERWORKS\n\n          MemberWorks represents and warrants to 24\/7 as follows:\n\n          MemberWorks is acquiring stock in 24\/7 solely for the purpose of\ninvestment for an indefinite period for its account, not as a nominee or agent,\nand not with a view to the sale or distribution of any part thereof, and has no\npresent intention of selling, granting participation in or otherwise\ndistributing the Merger Consideration. Memberworks does not intend to have its\nagents participate in the management, or serve as an officer or director, of\n24\/7. MemberWorks acknowledges that, immediately following the Closing, all its\nrights under the Agreement and Plan of Merger among MemberWorks Incorporated, AT\nMerger, Inc. and the Company, dated April 19, 1999, as amended by the Amendment\nto Agreement and Plan of Merger dated as of September 30, 1999 and the Second\nAmendment to Agreement and Plan of Merger dated December 30, 1999, will be\ncanceled and extinguished.\n\n\n\n                                   ARTICLE III\n            REPRESENTATIONS AND WARRANTIES OF 24\/7 AND THE SUBSIDIARY\n\n          24\/7 and the Subsidiary hereby represent and warrant to the Company as\nfollows:\n\n          3.1   ORGANIZATION AND QUALIFICATION; ORGANIZATIONAL DOCUMENTS.\n\n                (a)  Each of 24\/7 and the Subsidiary is a corporation duly\norganized, validly existing and in good standing under the laws of the State of\nDelaware and has the requisite power and authority to own, lease and operate the\nproperties it purports to own, operate or lease and to carry on its business as\nit is now being conducted, except where the failure to be so organized, existing\nand in good standing or to have such power and authority would not reasonably be\nexpected to have a material adverse effect on the business, results of\noperations or financial condition of 24\/7, taken as a whole, or on the ability\nof the parties to consummate the transactions contemplated by this Agreement (a\n\"24\/7 MATERIAL ADVERSE EFFECT\"). Each of 24\/7 and the Subsidiary is duly\nqualified or licensed as a foreign corporation to do business, and is in good\nstanding, in each jurisdiction where the character of its properties owned,\nleased or operated by it or the nature of its activities makes such\nqualification or licensing necessary, except for such failures to be so duly\nqualified or licensed and in good standing that would not reasonably be expected\nto have a 24\/7 Material Adverse Effect.\n\n                (b)  24\/7 has heretofore furnished to the Company a complete and\ncorrect copy of 24\/7's and the Subsidiary's Certificate of Incorporation\n(certified by the Secretary of State of the State of Delaware) and By-Laws, each\nas amended to date. Such Certificates of \n\n\n                                       23\n\n\n\nIncorporation and By-Laws are in full force and effect. Neither 24\/7 nor the\nSubsidiary is in violation of any of the provisions of its respective\nCertificate of Incorporation or By-Laws.\n\n          3.2   CAPITALIZATION.\n\n                (a)  The authorized capital stock of 24\/7 as of December 31,\n1999 consisted of: (i) 70,000,000 shares of 24\/7 Common Stock, of which\n22,421,516 shares were issued and outstanding; and (ii) 10,000,000 shares of\npreferred stock, par value $.01 per share, none of which were issued and\noutstanding. All of the outstanding shares of 24\/7 Common Stock are duly\nauthorized, validly issued and are fully paid and nonassessable and are not\nsubject to preemptive or similar rights created by statute, the Certificate of\nIncorporation or By-Laws of 24\/7 or any agreement or document to which 24\/7 is a\nparty or by which it is bound. As of December 31, 1999, there were options\noutstanding to purchase an aggregate of 3,235,538 shares of 24\/7 Common Stock\nunder 24\/7's stock option plans. The authorized capital stock of the Subsidiary\nconsists of 1,000 shares of common stock, par value $.01 per share, 100 shares\nof which are issued and outstanding, and wholly owned by 24\/7. The Subsidiary\nwas formed for the purpose of consummating the Merger and has no material assets\nor liabilities except as necessary for such purpose.\n\n                (b)  The shares of 24\/7 Common Stock to be issued in the Merger\nhave been duly authorized and, when so issued in accordance with the terms \nhereof, such shares will be validly issued, fully paid and nonassessable.\n\n\n                                       24\n\n\n\n\n          3.3   AUTHORITY RELATIVE TO THIS AGREEMENT.\n\n                (a)  Each of 24\/7 and the Subsidiary has all necessary corporate\npower and authority to execute and deliver this Agreement and to perform its\nobligations hereunder and to consummate the transactions contemplated hereby, as\nwell as all other agreements, certificates and documents executed or delivered,\nor to be executed or delivered, by 24\/7 and\/or the Subsidiary in connection\nherewith (collectively, with this Agreement, the \"24\/7 DOCUMENTS\"). The\nexecution and delivery of this Agreement by 24\/7 and the Subsidiary and the\nconsummation by 24\/7 and the Subsidiary of the transactions contemplated hereby\nhave been duly and validly authorized by all necessary corporate action on the\npart of 24\/7 and the Subsidiary, and no other corporate proceedings on the part\nof 24\/7 or the Subsidiary are necessary to authorize this Agreement or to\nconsummate the transactions so contemplated hereby, except for the filing of the\nAgreement of Merger and Certificate of Merger pursuant to California Law and\nDelaware Law, respectively. Each of the 24\/7 Documents to which 24\/7 and\/or the\nSubsidiary is, or will be, a party has been, or will be, duly and validly\nexecuted and delivered by 24\/7 and\/or the Subsidiary, and, assuming the due\nauthorization, execution and delivery of the 24\/7 Documents by the Company are\n(or when executed and delivered will be) legal, valid and binding obligations of\n24\/7 and\/or the Subsidiary, enforceable against 24\/7 and\/or the Subsidiary in\naccordance with their respective terms, except as limited by (i) applicable\nbankruptcy, insolvency, reorganization, moratorium and other laws of general\napplication affecting the enforcement of creditors' rights generally and (ii)\ngeneral principles of equity, regardless of whether asserted in a proceeding in\nequity or at law.\n\n                (b)  The  Board of  Directors  of 24\/7  (and  the  Board of\nDirectors of the Subsidiary, as necessary) at a meeting duly called at which all\nmembers were present has (i) unanimously declared that this Agreement, the\nMerger and the other transactions contemplated hereby are fair to and in the\nbest interests of 24\/7 and its shareholders; and (ii) authorized, approved and\nadopted this Agreement, the Merger and the other transactions contemplated\nhereby. None of the aforesaid actions by the Board of Directors of 24\/7 has been\namended, rescinded or modified.\n\n\n                                       25\n\n\n\n\n          3.4   NO CONFLICT, REQUIRED FILINGS AND CONSENTS.\n\n               (a)   The execution and delivery of this Agreement by 24\/7 and\nthe Subsidiary do not, and the performance of this Agreement by 24\/7 and the\nSubsidiary will not, (i) conflict with or violate the Certificate of\nIncorporation or By-Laws of 24\/7 or the Subsidiary; (ii) subject to compliance\nwith the requirements of Section 3.4(b), conflict with or violate any law, rule,\nregulation, order, judgment or decree applicable to 24\/7 or the Subsidiary or by\nwhich any of 24\/7's or the Subsidiary's respective properties is bound or\naffected; or (iii) result in any breach of or constitute a default (or an event\nwhich with notice or lapse of time or both would become a default) under, or\nimpair 24\/7's or the 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, or result in the creation of an Encumbrance on\nany of the properties or assets of 24\/7 or the Subsidiary pursuant to, any note,\nbond, mortgage, indenture, contract, agreement, lease, license, permit,\nfranchise or other instrument or obligation to which 24\/7 or the Subsidiary is a\nparty or by which 24\/7 or the Subsidiary or any of their respective properties\nis bound or affected, except in any such case for any such breaches, violations\nor defaults that would not have a 24\/7 Material Adverse Effect.\n\n                (b)  The execution  and delivery of this  Agreement by 24\/7 and \nthe Subsidiary does not, and the performance of this Agreement by 24\/7 and the\nSubsidiary will not, require any consent, approval, authorization or permit of,\nor declaration, registration or filing with or notification to, any Governmental\nEntity, (i) such consents, approvals, orders, authorizations, registrations and\ndeclarations and filings as may be required under applicable federal and state\nsecurities (or related) laws, (ii) the filing of the Agreement of Merger and\nCertificate of Merger pursuant to California Law and Delaware Law, respectively;\nand (iii) such consents, approvals, authorizations, filings and registrations\nwhich if not obtained or made, would not prevent or delay consummation of the\nMerger or otherwise prevent 24\/7 from performing its obligations under this\nAgreement.\n\n          3.5   SEC FILINGS, 24\/7 FINANCIAL STATEMENTS.\n\n                (a)  24\/7 has filed all forms, reports and documents required to\nbe filed by it with the Securities and Exchange Commission (the \"SEC\") since\nDecember 31, 1998 and has delivered or made available to the Company, in the\nform filed with the SEC, such forms, reports and documents. All such required\nforms, reports and documents (including those that 24\/7 may file subsequent to\nthe date hereof), as amended, are referred to herein as the \"24\/7 SEC REPORTS.\"\nThe 24\/7 SEC Reports (including any financial statements or schedules included\ntherein) (i) were prepared in accordance with the requirements of the Securities\nAct or the Securities Exchange Act of 1934, as amended (the \"Exchange Act\"), as\nthe case may be, and the rules and regulations of the SEC thereunder applicable\nto such 24\/7 SEC Reports, and (ii) did not at the time they were filed (or if\namended or superseded by a filing prior to the date of this Agreement, then on\nthe date of such filing) contain any untrue statement of a material fact or omit\nto state a material fact required to be stated therein or necessary in order to\nmake the \n\n                                       26\n\n\n\nstatements therein, in the light of the circumstances under which they were\nmade, not misleading. None of 24\/7's subsidiaries is required to file any forms,\nreports or other documents with the SEC.\n\n                (b)  Each of the consolidated financial statements (including,\nin each case, any related notes thereto) contained in the 24\/7 SEC Reports (the\n\"24\/7 FINANCIALS\"), including each 24\/7 SEC Report filed after the date hereof\nuntil Closing: (i) complied (or will comply) as to form in all material respects\nwith the rules and regulations of the SEC with respect thereto, (ii) was (or\nwill be) prepared in accordance with GAAP applied on a consistent basis\nthroughout the periods involved (except as may be indicated therein or in the\nnotes thereto or, in the case of unaudited interim financial statements, as may\nbe permitted by the SEC on Form 10-Q under the Exchange Act) and (iii) fairly\npresented (or will fairly present) in all material respects the consolidated\nfinancial position of 24\/7 and its consolidated 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                (c)  24\/7 has heretofore furnished to the Company a complete and\ncorrect copy of any amendments or modifications, which have not yet been filed\nwith the SEC but which are required to be filed, to agreements, documents or\nother instruments which previously had been filed by 24\/7 with the SEC pursuant\nto the Securities Act or the Exchange Act.\n\n          3.6   NO UNDISCLOSED LIABILITIES. Except as is disclosed in the 24\/7\nFinancials, neither 24\/7 nor any of its subsidiaries has any liabilities\n(absolute, accrued, contingent or otherwise) of the type that are required to be\ndisclosed in financial statements, including the notes thereto, prepared in\naccordance with GAAP which are, individually or in the aggregate, material to\nthe business, operations or financial condition of 24\/7 and its subsidiaries\ntaken as a whole, except liabilities (i) adequately provided for or referred to\nin the Company's balance sheet and the related notes thereto as of September 30,\n1999 included in 24\/7's Form 10-Q for the quarter ended September 30, 1999\n(which is part of the 24\/7 SEC Reports) (the \"24\/7 BALANCE SHEET\"), (ii)\nincurred since the date of the 24\/7 Balance Sheet in the ordinary course of\nbusiness and consistent with past practice and (iii) incurred in connection with\nthe transactions contemplated by this Agreement.\n\n          3.7   NO ADVERSE CHANGE. Since the date of the 24\/7 Balance Sheet, \n24\/7 has conducted its business in the ordinary course and there has not\noccurred any material adverse change in the business, properties, assets,\nliabilities, commitments, earnings or financial condition of 24\/7 and its\nsubsidiaries, taken as a whole.\n\n          3.8   LITIGATION. There are no claims, actions, suits or proceedings\npending or, to the knowledge of 24\/7, threatened that have a reasonable\nlikelihood of success on the merits relating to or affecting 24\/7 or any of its\nsubsidiaries before any Governmental Entity that seek to \n\n                                       27\n\n\n\nrestrain or enjoin the consummation of the transactions contemplated by this\nAgreement.\n\n                                   ARTICLE IV\n\n                            COVENANTS OF THE COMPANY\n\n          The Company covenants and agrees that between the date hereof and the\nEffective Time:\n\n          4.1   ACTIONS. The Company will not take any action that would cause\nany of the representations and warranties made by it in any of the Company\nDocuments not to be true and correct in all material respects on and as of the\nClosing Date with the same force and effect as if such representations and\nwarranties had been made on and as of the Closing Date.\n\n          4.2   ACCESS BY 24\/7. 24\/7 and its representatives and advisors shall,\nupon prior written notice to the Company, have reasonable access during normal\nbusiness hours to the Company's assets, premises, books and records, key\nemployees and accountants, including the work papers of the Company's\naccountants relating to the Company Financial Statements, and the Company shall\nfurnish 24\/7 with such information and copies of such documents as 24\/7 may\nreasonably request. The Company shall promptly furnish to 24\/7 all financial\nstatements of the Company that are prepared in the ordinary course of business,\nincluding, without limitation, monthly reports of sales, revenue and cash flow\nand balance sheets, if any are prepared.\n\n          4.3   CONDUCT OF BUSINESS. The business of the Company shall be\nconducted in all material respects in the ordinary course, consistent with the\npresent conduct of its business, and the Company shall use commercially\nreasonable efforts to maintain, preserve and protect the assets and goodwill of\nthe Company. Without limiting the generality of the foregoing, the Company shall\nnot, without the prior written consent of 24\/7, take or commit to take any of\nfollowing actions:\n\n                (a)  amend its By-Laws or Articles of Incorporation;\n\n                (b)  issue any additional shares of capital stock, or issue, \nsell or grant any option or right to acquire or otherwise dispose of any of its\nauthorized but unissued capital stock or other equity or debt securities;\n\n                (c)  declare or pay any dividends or make any other distribution\nin cash, property or securities on its capital stock;\n\n                (d)  repurchase or redeem any shares of its capital stock;\n\n                (e)  incur, or perform, pay or otherwise discharge, any material\nobligation or liability (absolute or contingent), except for obligations and\nliabilities incurred in\n\n                                       28\n\n\n\nthe ordinary course of business consistent with past practice;\n\n                (f)  enter into any employment agreement with or increase the\ncompensation or benefits of any of its officers or employees, or grant any\nseverance pay or termination pay or establish, adopt or enter into any employee\nbenefit plan, program or arrangement;\n\n                (g)  sell,  lease,  transfer  or  otherwise  dispose of, or \nacquire, any material properties or assets, tangible or intangible, other than\nin the ordinary course of business;\n\n                (h)  make any material changes in its customary method of\noperations, including marketing, selling and pricing policies and maintenance of\nbusiness premises, fixtures, furniture and equipment;\n\n                (i)  modify, amend or cancel any of its existing leases or enter\ninto any material contracts, agreements, leases or understandings other than in\nthe ordinary course of business or enter into any loan agreements;\n\n                (j)  make any material investments other than in certificates \nof deposit or short-term commercial paper; or\n\n                (k)  change any of the accounting principles or practices used \nby it, except to come into compliance with, or as required by GAAP.\n\n          4.4   NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt \nnotice 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 any of the Company Documents that is\nqualified as to materiality to be untrue or inaccurate or any such\nrepresentation or warranty that is not so qualified to be untrue or inaccurate\nin any material respect and (ii) any failure of the Company materially to comply\nwith or satisfy any covenant, condition or agreement to be complied with or\nsatisfied by it hereunder; PROVIDED, HOWEVER, that the delivery of any notice\npursuant to this Section 4.4 shall not limit or otherwise affect the remedies\navailable hereunder to the party receiving such notice.\n\n          4.5   FURTHER ACTION. Upon the terms and subject to the conditions\nhereof, the Company shall use all commercially reasonable efforts to take, or\ncause to 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          4.6   PUBLIC ANNOUNCEMENTS. The Company and MemberWorks shall consult\nwith 24\/7 before issuing any press release or otherwise making any public\nstatement with respect\n\n                                       29\n\n\n\nto the Merger and shall not issue any such press release or make any such public\nstatement, except as may be required by law, without the prior written consent\nof 24\/7, which may not be unreasonably withheld or delayed.\n\n          4.7   GOVERNMENT COMPLIANCE. The Company agrees promptly to effect all\nnecessary registrations, filings, applications and submissions of information\nrequired or requested by governmental authorities and to use commercially\nreasonable efforts to obtain any necessary approvals and early termination of\nany applicable waiting period.\n\n          4.8   MEMBERWORKS LOAN. Immediately prior to the Closing, MemberWorks \nshall contribute to the capital of the Company all the outstanding debt of the\nCompany to MemberWorksnet of the amount of a certain invoice (approximately\n$25,000) payable by MemberWorks to the Company, in exchange for additional\nshares of Company Preferred Stock.\n\n          4.9   PATENT OPINION. The Company shall promptly instruct Blakely \nSokoloff Taylor &amp; Zafman to prepare an opinion to the Company relating to the\nnon-infringement by the Company and\/or invalidity of U.S. Patent Number\n6,009,412 (the \"Patent Opinion\") and to use their best efforts to deliver such\nopinion no later than fifteen (15) days after the date of this Agreement.\nBetween the date of this Agreement and the Closing, the Company shall, not less\noften than every two days after the date of this Agreement (and in any event on\nthe last day prior to such fifteenth day), provide 24\/7 with a report as to the\nprogress of the preparation of the Patent Opinion and a summary of any\nsubstantive issues that have arisen that would or might adversely affect the\nability of such firm to deliver the Patent Opinion.\n\n                                    ARTICLE V\n\n                      COVENANTS OF 24\/7 AND THE SUBSIDIARY\n\n          24\/7 and the Subsidiary covenant and agree that between the date\nhereof and the Effective Time:\n\n          5.1   ACTIONS. Neither 24\/7 nor the Subsidiary will take any action \nthat would cause any of the representations and warranties made by it in any of\nthe 24\/7 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          5.2   NOTIFICATION OF CERTAIN MATTERS. 24\/7 shall give prompt notice \nto 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 any of the 24\/7 Documents to be untrue\nor inaccurate and (ii) any failure of 24\/7 or the Subsidiary materially to\ncomply with or satisfy any covenant, condition or agreement to be complied with\nor satisfied by it hereunder; provided, however, that the delivery of any notice\npursuant to this Section 5.2 shall not limit or otherwise affect the remedies\navailable hereunder to\n\n                                       30\n\n\n\nthe party receiving such notice.\n\n          5.3   FURTHER ACTION. Upon the terms and subject to the conditions\nhereof, 24\/7 and the Subsidiary shall use all commercially reasonable efforts to\ntake, or cause to be taken, all actions and to do, or cause to be done, all\nother things necessary, proper or advisable to consummate and make effective as\npromptly as practicable the transactions contemplated by this Agreement and to\nobtain in a timely manner all necessary waivers, consents and approvals and to\neffect all necessary registrations and filings.\n\n          5.4   PUBLIC ANNOUNCEMENTS. 24\/7 and the Subsidiary shall consult with\nthe Company before issuing any press release or otherwise making any public\nstatement with respect to the Merger and shall not issue any such press release\nor make any such public statement, except as may be required by law, without the\nprior written consent of the Company, which may not be unreasonably withheld or\ndelayed.\n\n          5.5   GOVERNMENT COMPLIANCE. 24\/7 and the Subsidiary agree promptly to\neffect all necessary registrations, filings, applications and submissions of\ninformation required or requested by governmental authorities and to use\ncommercially reasonable efforts to obtain any necessary approvals and early\ntermination of any applicable waiting period.\n\n          5.6   CERTAIN RESTRICTIONS. 24\/7 covenants and agrees that between the\ndate hereof and the Effective Time or termination of this Agreement, it will not\nenter into or conduct any discussions with any party other than the Company with\nrespect to any (a) acquisition or merger or similar transaction of a company\nprimarily engaged in a web-based or Internet-related business focused primarily\non reward programs, loyalty marketing solutions or point awards, or (b) license\nor purchase of technology for such a business.\n \n          5.7   PUBLIC ANNOUNCEMENTS. 24\/7 agrees that it shall not issue any\npress release or make any public statement with respect to the Merger prior to\nthe Closing, except as may be required by law.\n\n          5.8   ADVANCES.  Between the date of this  Agreement  and the Closing,\n24\/7 agrees to make  short-term  advances to the Company up to an  aggregate  of\n$1.0 million for working capital purposes in such amounts,  at such times and on\nother reasonable terms and conditions as are mutually agreed by the parties.\n\n\n                                   ARTICLE VI\n\n         CONDITIONS PRECEDENT TO OBLIGATIONS OF 24\/7 AND THE SUBSIDIARY\n\n          The obligations of 24\/7 and the Subsidiary to consummate the\ntransactions contemplated by the 24\/7 Documents are subject to the fulfillment,\nat or before the Effective\n\n                                       31\n\n\n\n\n\nTime, of each of the following conditions, any of which may be waived by 24\/7\nand the Subsidiary in writing, and the Company shall use commercially reasonable\nefforts to cause such conditions to be fulfilled:\n\n          6.1   REPRESENTATIONS AND WARRANTIES. Each of the representations and\nwarranties of the Company in the Company Documents shall be true and correct in\nall material respects on and as of the Effective Time as if made on and as of\nthe Effective Time, except to the extent that any such representation or\nwarranty is made as of a specified date, in which case such representation or\nwarranty shall have been true and correct in all material respects as of such\ndate.\n\n          6.2   PERFORMANCE BY THE COMPANY. The Company shall have performed and\ncomplied in all material respects with all agreements, covenants and conditions\nrequired by the Company Documents to be performed or complied with by the\nCompany at or before the Effective Time.\n\n          6.3   CERTIFICATE. 24\/7 shall have received a certificate executed by\nthe 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 6.1 and 6.2.\n                              \n          6.4   EMPLOYMENT AGREEMENT. Brian Anderson, Jack Daley, Randy Moore,\nPeter Sclafani and Russell Burnside shall have each entered into an Employment\nAgreement with 24\/7 in the form attached hereto as EXHIBIT B and a\nNon-Competition and Non-Disclosure Agreement with 24\/7 in the form attached\nhereto as EXHIBIT C (collectively, the \"Employment Agreements\").\n\n          6.5   REGISTRATION RIGHTS AGREEMENT. The Company and the Shareholders\nshall have entered into a Registration Rights Agreement with 24\/7 in the form\nattached hereto as EXHIBIT D (the \"Registration Rights Agreements\").\n\n          6.6   OPINION OF COUNSEL TO THE COMPANY. The Company shall have\ndelivered to 24\/7 an opinion of McCutchen, Doyle, Brown &amp; Enersen, LLP , counsel\nto the Company, dated the Closing Date, covering, in substance , the legal\nmatters described in Sections 2.1 (as relates to Company only), 2.5 (a), (b),\n(c) and (d), and 2.6 (a) (i) and (ii) and (b).\n\n          6.7   CONSENTS. The Company shall have obtained, or to the reasonable\nsatisfaction of 24\/7 obviated the need to obtain, all consents, approvals and\nwaivers from governmental and regulatory authorities and third parties necessary\nfor the execution, delivery and performance of the Company Documents and the\ntransactions contemplated thereby, without any material cost or adverse\nconsequences to the Company.\n\n          6.8   LITIGATION.   No  action  or  proceeding  shall  be  pending  or\nthreatened before any court,  tribunal or governmental  entity,  and no claim or\ndemand shall have been made against\n\n\n                                       32\n\n\n\n\n24\/7, the Subsidiary, any Shareholder 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 any of the Company Documents,\nor which might materially adversely affect the business of the Company, which in\nthe reasonably exercised opinion of 24\/7 makes it inadvisable to consummate such\ntransactions.\n\n          6.9   NO VIOLATION. There shall not have been any action taken, or any\nstatute, rule, regulation or order enacted, promulgated, issued or deemed\napplicable to the Merger by any federal or state government or governmental or\nregulatory authority or court, which would: (i) prohibit the Surviving\nCorporation's ownership or operation of all or a material portion of the\nCompany's business or assets, or compel the Surviving Corporation 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 any party hereto 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,\nincluding, without limitation, the right to vote any such shares on all matters\nproperly presented to the shareholders of the Surviving Corporation, and no such\naction shall have been taken or any such statute, rule, regulation or order\nenacted, promulgated, issued or deemed applicable to the Merger which is\nreasonably likely to produce such result.\n\n          6.10  PATENT OPINION. 24\/7 shall have received a copy of the Patent\nOpinion, and such opinion shall be reasonably satisfactory to 24\/7 and its\ncounsel; PROVIDED, HOWEVER, that such condition shall be deemed to have been\nwaived by 24\/7 unless it shall have notified the Company within one business day\nafter its receipt of the opinion that the opinion is not reasonably satisfactory\nto 24\/7.\n\n\n                                   ARTICLE VII\n\n               CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY\n\n          The obligations of the Company to consummate the transactions\ncontemplated by the Company Documents are subject to the fulfillment, at or\nbefore the Effective Time, of each of the following conditions, any of which may\nbe waived by the Company in writing, and 24\/7 and the Subsidiary shall use\ncommercially reasonable efforts to cause such conditions to be fulfilled:\n\n          7.1   REPRESENTATIONS AND WARRANTIES. Each of the representations and\nwarranties of 24\/7 and\/or the Subsidiary in the 24\/7 Documents shall be true and\ncorrect in all material respects on and as of the Effective Time as if made on\nand as of the Effective Time, except to the extent that any such representation\nor warranty is made as of a specified date, in which case such representation or\nwarranty shall have been true and correct in all material respects as of such\ndate.\n\n\n                                       33\n\n\n\n\n          7.2   PERFORMANCE BY 24\/7 AND THE SUBSIDIARY. 24\/7 and the Subsidiary\nshall have per formed and complied in all material respects with all agreements,\ncovenants and conditions required by the 24\/7 Documents to be performed or\ncomplied with by 24\/7 and\/or the Subsidiary at or before the Effective Time.\n\n          7.3   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 7.1 and 7.2.\n\n          7.4   EMPLOYMENT AGREEMENT. 24\/7 shall have entered into the \nAgreements and the Non-Disclosure Agreements.\n\n          7.5   REGISTRATION RIGHTS AGREEMENT. 24\/7 shall have entered into the\nRegistration Rights Agreement.\n\n          7.6   OPINION OF COUNSEL TO 24\/7 AND THE SUBSIDIARY. 24\/7 and the\nSubsidiary shall have delivered to the Company an opinion of Proskauer Rose LLP,\ncounsel to 24\/7 and the Subsidiary, dated the Closing Date, covering, in\nsubstance, the legal matters described in Sections 3.1(a), 3.2(b), 3.3(a),\n3.4(a)(i) and (ii) and (b).\n\n          7.7   NO VIOLATION. There shall not have been any action taken, or any\nstatute, rule, regulation or order enacted, promulgated, issued or deemed\napplicable to the Merger by any federal or state governmental or regulatory\nauthority or court, which would (i) render any party hereto unable to consummate\nthe Merger or (ii) make such consummation illegal.\n\n                                  ARTICLE VIII\n\n                               CLOSING DELIVERIES\n\n          8.1   DELIVERIES OF THE COMPANY.  At the Closing (or as provided\nbelow), the Company and the Shareholders shall deliver, or shall cause to be\ndelivered, to 24\/7 and the Subsidiary the following:\n\n                (a)  The Employment Agreements;\n\n                (b)  The Registration Rights Agreement;\n\n                (c)  The opinion of McCutchen, Doyle, Brown &amp; Enersen, LLP,\ncounsel to the Company;\n\n                (d)  The  certificate  referred  to in  Section  6.3,  duly\nexecuted;\n\n\n                                       34\n\n\n\n\n                (e)  The Escrow Agreement;\n\n                (f)  The minute books of the Company; and\n\n                (g)  Duly executed resignations of all directors, officers and\nfiduciaries of the Company.\n\n          8.2   24\/7 AND SUBSIDIARY DELIVERIES. At the Closing (or as provided\nbelow), 24\/7 and the Subsidiary shall deliver, or shall cause to be delivered,\nto the Company and the Shareholders, as the case may be, the following:\n\n                (a)  As promptly as practicable after the Closing, in accordance\nwith instructions received from the Company and the Shareholders, the Merger\nConsideration, including Certificates representing shares of 24\/7 Common Stock\nin payment of the Merger Consideration, registered in the name of each of the\nholders of the Shares, subject to Section 1.8;\n\n                (b)  The Employment Agreements;\n\n                (c)  The Registration Rights Agreement;\n\n                (d)  The opinion of Proskauer Rose LLP, counsel to 24\/7 and\nthe Subsidiary;\n\n                (e)  The Escrow Agreement; and\n\n                (f)  The certificate referred to in Section 7.3 hereof, duly\nexecuted.\n\n\n                                   ARTICLE IX\n\n                                 INDEMNIFICATION\n\n          9.1   INDEMNIFICATION BY THE COMPANY AND THE SHAREHOLDERS. Subject to\nthe limitations set forth in Article X below, the Company (prior to the Closing)\nand the Shareholders shall indemnify, defend and hold harmless 24\/7 and its\naffiliates (including the Surviving Corporation), promptly upon demand at any\ntime and from time to time, against any and all losses, liabilities, claims,\nactions, damages and expenses (including without limitation, reasonable\nattorneys' fees and disbursements) (collectively, \"LOSSES\"), arising out of or\nin connection with any of the following: (i) any misrepresentation or breach of\nany warranty made by the Company in any of the Company Documents; (ii) any\nbreach or non-fulfillment of any covenant or agreement made by the Company in\nany of the Company Documents; or (iii) the \n\n\n                                       35\n\n\n\n\nclaims of any broker or finder  engaged by the Company  other than Thomas Weisel\nPartners LLC.\n\n          9.2   INDEMNIFICATION BY THE SHAREHOLDERS. Each Shareholder shall\nseverally indemnify, defend and hold harmless 24\/7 and its affiliates (including\nthe Surviving Corporation), promptly upon demand at any time and from time to\ntime, against any and all Losses arising out of or in connection with any of the\nfollowing: (i) any misrepresentation or breach of any warranty made by such\nShareholder in any of the Company Documents; or (ii) any breach or\nnon-fulfillment of any covenant or agreement made by such Shareholder in any of\nthe Company Documents.\n\n          9.3   INDEMNIFICATION BY 24\/7. 24\/7 shall indemnify, defend and hold\nharmless the Shareholders, promptly upon demand at any time and from time to\ntime, against any and all Losses arising out of or in connection with any of the\nfollowing: (i) any misrepresentation or breach of any warranty made by 24\/7 or\nthe Subsidiary in this Agreement; (ii) any breach or nonfulfillment of any\ncovenant or agreement made by 24\/7 or the Subsidiary in this Agreement or in any\nof the 24\/7 Documents; or (iii) the claims of any broker or finder engaged by\n24\/7 or the Subsidiary.\n\n                                    ARTICLE X\n\n                  FURTHER PROVISIONS REGARDING INDEMNIFICATION\n\n          10.1  SURVIVAL. All representations and warranties made by the Company\nor the Shareholders in the Company Documents or by 24\/7 or the Subsidiary in\nthis Agreement shall survive the Closing until April 30, 2001; provided,\nhowever, that if at the Effective Time a party has knowledge of facts\nconstituting a breach by another party of any representation or warranty by such\nother party, the party having such knowledge shall not be entitled to assert a\nclaim for Losses under this Agreement arising out of such breach.\n\n          10.2  LIMITATIONS.  Notwithstanding the foregoing,\n\n                (a)  The indemnification in Sections 9.1, 9.2 and 9.3, as the \ncase may be, shall be the exclusive remedy of the Shareholders, the Company and\nof 24\/7 and its affiliates with respect to claims for Losses;\n\n                (b)  The indemnification provided for in Section 9.1(i) or\n9.3(i) above shall not be required unless and until, at the time of any such\ndetermination, the total amount of Losses otherwise subject to indemnification\nunder such section exceeds $500,000, in which event the indemnified party or\nparties will be entitled to indemnification for the amounts of their Losses\nexceeding $250,000; \n\n                (c)  The total amount of indemnification pursuant to Section\n9.1 shall \n\n\n                                       36\n\n\n\n\nin no event exceed an amount equal to the cash and number of shares of\n24\/7 Common Stock held in the Escrow Indemnity Account at the time a claim is\nmade by 24\/7;\n\n                (d)  Neither any Shareholder, on the one hand, nor 24\/7 or any\nof its affiliates, on the other, shall be entitled to indemnification for Losses\narising out of matters referred to in Section 9.1(i) or 9.3(i), as applicable,\nunless it shall have given written notice to the indemnifying party, setting\nforth its claim for indemnification in reasonable detail, within the period from\nthe Closing Date until April 30, 2001;\n\n                (e)  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\n9.1, 9.2 or 9.3. If the indemnifying party, within 30 days after the indemnified\nparty has given such notice (or within such shorter period of time as an answer\nor other responsive motion may be required), shall have acknowledged in writing\nhis or its obligation to indemnify, then the indemnifying party shall have the\nright to control the defense of such claim or proceeding, and the indemnifying\nparty shall not settle or compromise such claim or proceeding without the\nwritten consent of the indemnified party. The indemnified party may in any event\nparticipate in any such defense with his or its own counsel and at his or its\nown expense; and\n\n                (f)  The indemnified party shall be kept fully informed by the\nindemnifying party of such action, suit or proceeding at all stages thereof,\nwhether or not he or it is represented by counsel. The indemnifying party shall,\nat the indemnifying party's expense, make available to the indemnified party and\nits attorneys and accountants all books and records of the indemnifying party\nrelating to such action, suit or proceeding, 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          10.3  EXCLUSIVE REMEDY. In accordance with the provisions of the\nEscrow Agreement, 24\/7 shall be entitled, from time to time, to receive from the\nEscrow Agent the number of shares of 24\/7 Common Stock having a value equal to\nthe Losses of 24\/7 as to which 24\/7 is entitled to be indemnified pursuant to\n9.1 or 9.2 above, subject to the provisions of Section 10.2(c), as applicable.\nFor purposes of this Section 10.3 and the Escrow Agreement, the value of 24\/7\nCommon Stock to be delivered to cover Losses shall be the average of the closing\nprices of the 24\/7 Common Stock on the five trading days preceding the delivery\nof the shares to 24\/7 in accordance with the provisions of the Escrow Agreement.\nThe right to receive such shares and cash in accordance with the provisions of\nthis Article X shall be 24\/7's sole remedy for Losses that it is entitled to\nrecover under Section 9.1, and 24\/7 shall look solely to the property or cash\nheld in the Escrow Indemnity Account for all such Losses.\n\n          10.4  DELIVERY OF NOTICE. 24\/7 shall deliver such written notices to\nsuch parties and at such times as required by the provisions of the Escrow\nAgreement, and the releases of \n\n\n                                       37\n\n\n\n\nshares provided for in Article X shall be governed by the provisions of the\nEscrow Agreement. 24\/7 and the Company agree to promptly deliver a written\nnotice to the Shareholders upon any determination that a claim for Losses under\nSection 9.1 or 9.2 is reasonably likely to exist.\n\n          10.5  INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY. 24\/7\n(A) for a period of five years after the Effective Time, will not take or\nknowingly permit to be taken any action to alter or impair any exculpatory or\nindemnification provisions now existing in the Articles of Incorporation or\nBylaws of the Company for the benefit of any individual who served as officer or\ndirector of the Company at any time prior to the Effective Time, and (B) shall\ncause the Surviving Corporation to honor and fulfill such provisions.\n\n\n                                   ARTICLE XI\n\n                                  MISCELLANEOUS\n\n          11.1  NOTICES. All notices or other communications in connection with\nthis Agreement shall be in writing and shall be considered given when personally\ndelivered or three days after when mailed by registered or certified mail,\npostage prepaid, return receipt requested, or by overnight courier as follows:\n\n     If to the Company:\n\n                             AwardTrack, Inc.\n                             125 Bethany Drive\n                             Scotts Valley, CA  95066\n                             Attention: Brian Anderson\n\n     with a copy to:\n\n                             McCutchen, Doyle, Brown &amp; Enersen, LLP\n                             3150 Porter Drive\n                             Palo Alto, CA  94304\n                             Attention: Robert Cox, Esq.\n\n\n     If to 24\/7 or the Subsidiary:\n\n                             24\/7 Media, Inc.\n                             1250 Broadway, 28th Floor\n                             New York, NY  10001\n                             Attn:  General Counsel\n\n\n                                       38\n\n\n\n\n     with a copy to:\n\n                             Proskauer Rose LLP\n                             1585 Broadway\n                             New York, NY  10036\n                             Attn:  Ronald R. Papa, Esq.\n\nAny party may send any notice, request, demand, claim or other communication\nhereunder to the intended recipient at the address set forth above using any\nother means (including personal delivery, expedited courier, messenger service,\ntelecopy, telex, ordinary mail or electronic mail), but no such notice, request,\ndemand, claim or other communication shall be deemed to have been duly given\nunless and until it actually is received by the intended recipient. Any party\nmay change the address to which notices, requests, demands, claims and other\ncommunications hereunder are to be delivered by giving the other party notice in\nthe manner set forth in this Section 11.1.\n\n          11.2  TERMINATION. This Agreement shall terminate if the Closing shall\nhave not occurred by March 1, 2000; provided, however, that (a) 24\/7 may\nterminate this Agreement at any time after February 29, 2000, if the condition\nset forth in Section 6.10 is not satisfied by such date, and (b) the Company may\nterminate this Agreement on not less than one business day's notice to 24\/7 at\nany time after February 17, 2000, if (i) it has fully complied with the\nprovisions of Section 4.9, (ii) the condition set forth in Section 6.10 has not\nbeen satisfied or waived by such date, provided that such termination will not\nbe effective if, after receipt of the Company's notice of termination but before\nthe effective date of the termination, 24\/7 notifies the Company that it waives\nsuch condition and elects to complete the Merger, and (c) the Company may\nterminate this Agreement on notice to 24\/7 if the Patent Opinion has been timely\ndelivered but the condition set forth in Section 6.10 is not satisfied because\n24\/7 has delivered to the Company the notice contemplated by Section 6.10. The\nright to terminate this Agreement under this Section 11.2 shall not be available\nto any party whose action or failure to act has been the cause or resulted in\nthe failure of such condition or of the Closing to occur on or before such date.\n\n          11.3  ENTIRE AGREEMENT. This Agreement (which includes the schedules\nand exhibits hereto), sets forth the parties' final and entire agreement with\nrespect to its subject matter and supersedes any and all prior and\ncontemporaneous understandings, representations, warranties and agreements\n(whether oral or written) with respect to the subject matter herein. This\nAgreement can be amended, supplemented or changed, and any provision hereof can\nbe waived, only by a written instrument making specific reference to this\nAgreement signed by the party against whom enforcement of any such amendment,\nsupplement, change or waiver is sought.\n\n          11.4  SUCCESSORS. This Agreement shall be binding upon and shall inure\nto the benefit of the parties hereto and their respective heirs, executors,\nadministrators, personal \n\n\n                                       39\n\n\n\nrepresentatives, successors and assigns; PROVIDED, HOWEVER, that neither this\nAgreement nor any right or obligation hereunder may be assigned or transferred,\nexcept that 24\/7 or the Subsidiary may assign this Agreement and its rights\nhereunder to any direct or indirect wholly-owned subsidiary of 24\/7.\n\n          11.5  PARAGRAPH HEADINGS. The paragraph and section headings in this\nAgreement are for reference purposes only and shall not affect in any way the\nmeaning or interpretation of this Agreement.\n\n          11.6  OTHER DISCUSSIONS. Unless this Agreement shall have been\nterminated, the Company (and 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 (and any representatives of the Company) will not, directly\nor indirectly, engage in any negotiations concerning, provide any confidential\ninformation or data to, or have any discussions with, any person relating to the\nacquisition of any assets or capital stock of the Company, whether initiated\nbefore or after this Agreement. The Company (and any representatives of the\nCompany) will immediately cease and cause to be terminated any existing\nactivities, discussions or negotiations with any parties conducted heretofore\nwith respect to the acquisition of any assets or capital stock of the Company.\nThe Company will notify 24\/7 immediately of any inquiries or proposals received\nby the Company and the name of such person and the material terms and conditions\nof any proposals or offers.\n\n          11.7  FEES AND EXPENSES. If the Merger is consummated, 24\/7 shall pay\nup to $550,000 of fees and expenses incurred by the Company in connection with\nthe Merger. MemberWorks shall pay $1,000,000 towards any investment banking fee\nincurred by the Company in connection with the Merger and 66 2\/3% of other fees\nand expenses incurred by the Company in connection with the Merger. Other than\nas set forth in the preceding sentence, each party hereto will pay its own fees\nand expenses, including, without limitation, legal, accounting and other\nprofessional fees and expenses, incurred in connection with the execution,\ndelivery and performance of this Agreement, whether or not the Merger is\nconsummated.\n\n          11.8  SEVERABILITY. If any provision of this Agreement shall be held \nby any court of competent jurisdiction to be illegal, invalid or unenforceable,\nsuch provision shall be construed and enforced as if it had been more narrowly\ndrawn so as not to be illegal, invalid or unenforceable, and such illegality,\ninvalidity or unenforceability shall have no effect upon and shall not impair\nthe enforceability of any other provision of this Agreement.\n\n          11.9  GOVERNING LAW AND CONSENT TO JURISDICTION. This Agreement shall\nbe governed by and construed and interpreted in accordance with the internal\nlaws of the State of New York. The state courts of the State of New York in New\nYork County and, if the jurisdictional prerequisites exist at the time, the\nUnited States District Court for the Southern District of New York, shall have\nsole and exclusive jurisdiction to hear and determine any\n\n\n                                       40\n\n\n\ndispute or controversy arising under or concerning this Agreement. In any action\nor proceeding  concerning  such dispute or  controversy,  the parties consent to\nsuch jurisdiction and waive personal service of any summons,  complaint or other\nprocess;  a summons or complaint in any such action or proceeding  may be served\nby mail in accordance with Section 11.1.\n\n          11.10 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          11.11 DEFINITION OF KNOWLEDGE. As used herein, the words \"knowledge\",\n\"knowledge\" or \"known\" shall, (i) with respect to the Company or Company\nmanagement, mean the actual knowledge of the executive officers of the Company,\nin each case after such individuals have made due and diligent inquiry as to the\nmatters which are the subject of the statements which are \"known\" by the Company\nor made to the \"knowledge\" or \"knowledge\" of the Company, (ii) with respect to\n24\/7 or 24\/7 management, mean the actual knowledge of the executive officers of\n24\/7, in each case after such individuals have made due and diligent inquiry as\nto the matters which are the subject of the statements which are \"known\" by 24\/7\nor made to the \"knowledge\" or \"knowledge\" of 24\/7, and (iii) with respect to the\nSubsidiary or the Subsidiary management, mean the actual knowledge of the\ncorporate executive officers of 24\/7 or the Subsidiary, in each case after such\nindividuals have made due and diligent inquiry as to the matters which are the\nsubject of the statements which are \"known\" by the Subsidiary or made to the\n\"knowledge\" or \"knowledge\" of the Subsidiary.\n\n          11.12 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer\nany rights or remedies upon any person or entity other than the parties and\ntheir respective successors and permitted assigns; provided, however, that the\nprovisions in Sections 9.1 and 9.2 above concerning indemnification are intended\nfor the benefit of the individuals specified therein and their respective legal\nrepresentatives.\n\n                           [Signature pages to follow]\n\n\n\n                                       41\n\n\n\n\n                       [SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]\n\n          IN WITNESS WHEREOF, each of the parties has caused this Agreement to\nbe executed by a duly authorized officer as of the day and year first written\nabove.\n\n\nAWARDTRACK, INC.                        24\/7 MEDIA, INC.\n\n\nBy:  \/s\/ Brian Anderson                 By:  \/s\/ David J. Moore\n     --------------------------              ----------------------\n       Brian Anderson                          David J. Moore\n       President and CEO                       President and CEO\n\n\n24\/7 AWARDS HOLDING CORP.\n\n\nBy:  \/s\/ David J. Moore\n     --------------------------\n       David J. Moore\n       President\n\n\n\nSHAREHOLDERS:\n\nMEMBERWORKS INCORPORATED\n\nBy:  \/s\/ George W. M. Thomas \n     --------------------------\n       George W. M. Thomas\n       Sr. Vice President and \n          General Counsel\n\nNATIONAL DISCOUNT BROKERS GROUP, INC.\n\nBy:  \/s\/ Frank E. Lawatsch, Jr.\n     --------------------------\n       Frank E. Lawatsch, Jr.\n       EVP, Secretary and \n         General Counsel\n\n\n\/s\/ Brian Anderson\n---------------------\nBrian Anderson\n\n\n\n\n\n\n\n\n\n\/s\/ Jeffrey Newhouse\n---------------------\nJeffrey Newhouse\n\n\n\/s\/ John Watson\n---------------------\nJohn Watson\n\n\n\/s\/ Gregory Hassett\n---------------------\nGregory Hassett\n\n\/s\/ Randy Moore\n---------------------\nRandy Moore\n\n\n\/s\/ Jack Daley\n---------------------\nJack Daley\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6536,8290],"corporate_contracts_industries":[9503,9418],"corporate_contracts_types":[9622,9626],"class_list":["post-42994","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-247-media-inc","corporate_contracts_companies-national-discount-brokers-group-inc","corporate_contracts_industries-services__advertising","corporate_contracts_industries-financial__securities","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\/42994","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=42994"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42994"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42994"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}