{"id":43041,"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-cmgi-inc-and-flycast.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-cmgi-inc-and-flycast","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-cmgi-inc-and-flycast.html","title":{"rendered":"Agreement and Plan of Merger &#8211; CMGI Inc. and Flycast Communications Corp."},"content":{"rendered":"<pre> \n                         AGREEMENT AND PLAN OF MERGER\n\n                                 by and among\n\n                                  CMGI, INC.,\n\n                             FREEMONT CORPORATION\n\n                                      and\n\n                      FLYCAST COMMUNICATIONS CORPORATION\n\n\nDated as of September 29, 1999\n\n \n                               TABLE OF CONTENTS\n                                                                         Page\n                                                                         ----\nARTICLE I THE MERGER                                                       3    \n          1.1      Effective Time of the Merger                            3\n          1.2      Closing                                                 3\n          1.3      Effects of the Merger                                   3\n          1.4      Directors and Officers                                  4\n \nARTICLE II CONVERSION OF SECURITIES                                        4\n          2.1      Conversion of Capital Stock                             4\n          2.2      Exhange of Certificates                                 5\n\nARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY                  9\n          3.1      Organization, Standing and Power; Subsidiaries          9\n          3.2      Capitalization                                         10\n          3.3      Authority; No Conflict; Required Filings and Consents  12\n          3.4      SEC Filings; Financial Statements                      14\n          3.5      No Undisclosed Liabilities                             15\n          3.6      Absence of Certain Changes or Events                   15\n          3.7      Taxes                                                  15\n          3.8      Owned and Leased Real Properties                       17\n          3.9      Intellectual Property                                  17\n          3.10     Agreements, Contracts and Commitments                  19\n          3.11     Litigation                                             19\n          3.12     Environmental Matters                                  19\n          3.13     Employee Benefit Plans                                 21\n          3.14     Compliance With Laws                                   23\n          3.15     Permits                                                23\n          3.16     Registration Statement; Proxy Statement\/Prospectus     23\n          3.17     Labor Matters                                          24\n          3.18     Insurance                                              24\n          3.19     Business Activity Restrictions                         24\n          3.20     Year 2000 Compliance                                   25\n          3.21     Assets                                                 26\n          3.22     Customers                                              26\n          3.23     No Existing Discussions                                27\n          3.24     Opinion of Financial Advisor                           27\n          3.25     Section 203 of the DGCL Not Applicable                 27\n          3.26     Tax Matters                                            27\n          3.27     Transactions with Affiliate                            27\n          3.28     Brokers; Schedule of Fees and Expenses                 27\n\n                                      ii\n\n \nARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER AND            \n        THE TRANSITORY SUBSIDIARY                                         28\n          4.1      Organization, Standing and Power                       28\n          4.2      Capitalization                                         29\n          4.3      Authority; No Conflict; Required Filings and Consents  29\n          4.4      SEC Filings; Financial Statements                      30\n          4.5      Absence of Certain Changes or Events                   31\n          4.6      Tax Matters                                            31\n          4.7      Litigation                                             31\n          4.8      Compliance with Laws                                   31\n          4.9      Registration Statement; Proxy Statement\/Prospectus     32\n          4.10     Operations of the Transitory Subsidiary                32\n \nARTICLE V CONDUCT OF BUSINESS                                             32\n          5.1      Covenants of the Company                               32\n          5.2      Cooperation                                            36\n          5.3      Confidentiality                                        36\n\nARTICLE VI ADDITIONAL AGREEMENTS                                          36\n          6.1      No Solicitation                                        36\n          6.2      Proxy Statement\/Prospectus; Registration Statement     38\n          6.3      Nasdaq Quotation                                       39\n          6.4      Access to Information                                  39\n          6.5      Stockholders Meeting                                   40\n          6.6      Legal Conditions to the Merger                         41\n          6.7      Public Disclosure                                      42\n          6.8      Tax-Free Reorganization                                42\n          6.9      Affiliate Agreements                                   42\n          6.10     Nasdaq National Market Listing                         43\n          6.11     Company Stock Plans and the Company Warrants           43\n          6.12     Stockholder Litigation                                 44\n          6.13     Indemnification                                        44\n          6.14     Notification of Certain Matters                        44\n\nARTICLE VII CONDITIONS TO MERGER                                          45\n          7.1      Conditions to Each Party's Obligation To Effect the\n                   Merger                                                 45\n          7.2      Additional Conditions to Obligations of the Buyer and\n                   the Transitory Subsidiary                              46\n          7.3      Additional Conditions to Obligations of the Company    47\n\n ARTICLE VIII TERMINATION AND AMENDMENT                                   48\n          8.1                 Termination                                 48\n\n                                      iii\n\n \n          8.2      Effect of Termination                                  49\n          8.3      Fees and Expenses                                      50\n          8.4      Amendment                                              51\n          8.5      Extension; Waiver                                      51\n\nARTICLE IX MISCELLANEOUS                                                  51\n          9.1      Nonsurvival of Representations and Warranties          51\n          9.2      Notices                                                52\n          9.3      Entire Agreement.                                      53\n          9.4      No Third Party Beneficiaries                           53\n          9.5      Assignment                                             53\n          9.6      Severability                                           54\n          9.7      Counterparts and Signature                             54\n          9.8      Interpretation                                         54\n          9.9      Governing Law                                          55\n          9.10     Remedies                                               55\n          9.11     Waiver of Jury Trial                                   55\n \nEXHIBITS\n\nExhibit A          Form of Company Stock Option Agreement\nExhibit B          Form of Stockholder Agreement\nExhibit C-1        Form of Employee Lock-up\nExhibit C-2        Form of Stockholder Lock-up\nExhibit D          Form of Company Affiliate Agreement\n\n\n                                      iv\n\n \n                            TABLES OF DEFINED TERMS\n\n                                                       Cross Reference\nTerms                                                   in Agreement\n-----                                                  ---------------   \nAffiliate                                              Section 6.9\nAffiliate Agreement                                    Section 6.9\nAgreement                                              Preamble\nAlternative Transaction                                Section 6.1\nAntitrust Laws                                         Section 6.6(b)\nAntitrust Order                                        Section 6.6(b)\nBuyer                                                  Preamble\nBuyer Balance Sheet                                    Section 4.4(b)\nBuyer Common Stock                                     Section 2.1(c)\nBuyer Disclosure Schedule                              Article IV\nBuyer Material Adverse Effect                          Section 4.1\nBuyer Preferred Stock                                  Section 4.2\nBuyer Rights                                           Section 2.1(c)\nBuyer Rights Plan                                      Section 2.1(c)\nBuyer SEC Reports                                      Section 4.4(a)\nCertificates                                           Section 2.2(b)\nClosing                                                Section 1.2\nClosing Date                                           Section 1.2\nCode                                                   Preamble\nCompany                                                Preamble\nCompany Balance Sheet                                  Section 3.4(b)\nCompany Common Stock                                   Section 2.1(b)\nCompany Disclosure Schedule                            Article III\nCompany Employee Plans                                 Section 3.13(a)\nCompany Intellectual Property Rights                   Section 3.9(a)\nCompany Leases                                         Section 3.8(b)\nCompany Material Adverse Effect                        Section 3.1\nCompany Material Contracts                             Section 3.10\nCompany Meeting                                        Section 3.16\n\n                                       v\n\n \nCompany Permits                                        Section 3.15\nCompany Preferred Stock                                Section 3.2(a)\nCompany Products                                       Section 3.20(b)\nCompany SEC Reports                                    Section 3.4(a)\nCompany Stock Options                                  Section 3.2(b)\nCompany Stock Option Agreement                         Preamble\nCompany Stock Plans                                    Section 3.2(b)\nCompany Systems                                        Section 3.20(b)\nCompany Voting Proposal                                Section 6.5(a)\nCompany Warrants                                       Section 3.2(b)\nConfidentiality Agreement                              Section 5.3\nConstituent Corporations                               Section 1.3\nDGCL                                                   Section 1.1\nEffective Time                                         Section 1.1\nEmployee Benefit Plans                                 Section 3.13(a)\nEnvironmental Law                                      Section 3.12(b)\nERISA Affiliate                                        Section 3.13(a)\nERISA                                                  Section 3.13(a)\nExchange Agent                                         Section 2.2(a)\nExchange Fund                                          Section 2.2(a)\nExchange Act                                           Section 3.3(c)\nExchange Ratio                                         Section 2.1(c)\nGovernmental Entity                                    Section 3.3(c)\nHazardous Substance                                    Section 3.12(c)\nHSR Act                                                Section 3.3(c)\nIndemnified Parties                                    Section 6.13\nInsurance Policies                                     Section 3.18\nLiens                                                  Section 3.22\nLock-up Agreements                                     Preamble\nMerger                                                 Preamble\nOutside Date                                           Section 8.1(b)\nProxy Statement                                        Section 3.16\n\n                                      vi\n\n \nRegistration Statement                                 Section 3.16\nRule 145                                               Section 6.10\nSEC                                                    Section 3.3(c)\nSecurities Act                                         Section 3.4(a)\nStockholder Agreements                                 Preamble\nSubsidiary                                             Section 3.1\nSuperior Proposal                                      Section 6.1(a)\nSurviving Corporation                                  Section 1.3\nTax Returns                                            Section 3.7(a)\nTaxes                                                  Section 3.7(a)\nThird Party                                            Section 8.3(g)\nTransitory Subsidiary                                  Preamble\nYear 2000 Compliant                                    Section 3.20\n\n                                      vii\n\n \n                          AGREEMENT AND PLAN OF MERGER\n\n     THIS AGREEMENT AND PLAN OF MERGER (this \"Agreement\"), dated as of September\n29, 1999, is by and among CMGI, Inc., a Delaware corporation (the \"Buyer\"),\nFreemont Corporation, a Delaware corporation and a wholly owned subsidiary of\nBuyer (the \"Transitory Subsidiary\"), and Flycast Communications Corporation, a\nDelaware corporation (the \"Company\").\n\n     WHEREAS, the Boards of Directors of the Buyer and the Company deem it\nadvisable and in the best interests of each corporation and its respective\nstockholders that the Buyer and the Company combine in order to advance the\nlong-term business interests of the Buyer and the Company;\n\n     WHEREAS, the combination of the Buyer and the Company shall be effected by\nthe terms of this Agreement through a merger of the Transitory Subsidiary into\nthe Company, as a result of which the stockholders of the Company will become\nstockholders of the Buyer (the \"Merger\");\n\n     WHEREAS, concurrently with the execution and delivery of this Agreement and\nas a condition and inducement to the Buyer's willingness to enter into this\nAgreement, the Company has entered into a Stock Option Agreement dated as of the\ndate of this Agreement and attached hereto as Exhibit A (the \"Company Stock\n                                              ---------                    \nOption Agreement\"), pursuant to which the Company granted the Buyer an option to\npurchase shares of common stock of the Company under certain circumstances;\n\n     WHEREAS, concurrently with the execution and delivery of this Agreement and\nas a condition and inducement to the Buyer's willingness to enter into this\nAgreement, the stockholders of the Company specified in Section 6.5(c) of this\nAgreement have entered into a Stockholder Agreement dated as of the date of this\nAgreement in the form attached as Exhibit B (the \"Stockholder Agreement\"),\n                                  ---------                               \npursuant to which such stockholders agreed to give the Buyer a proxy to vote all\nof the shares of capital stock of the Company that such stockholders own; and\n \n     WHEREAS, concurrently with the execution and delivery of this Agreement and\nas a condition and inducement to the Buyer's willingness to enter into this\nAgreement, certain employees and stockholders of the Company have entered into\nStock Lock-Up Agreements dated as of the date of this Agreement and attached\nhereto as Exhibit C-1 and C-2, respectively (collectively, the \"Lock-Up\n          -----------     ---                                          \nAgreements\"), pursuant to which such parties have agreed to certain restrictions\nrelating to the disposition of Buyer Common Stock following the Effective Time\n(as defined in Section 1.1) under certain circumstances;\n\n                                       2\n\n \n     WHEREAS, for federal income tax purposes, it is intended that the Merger\nshall qualify as a reorganization within the meaning of Section 368(a) of the\nInternal Revenue Code of 1986, as amended (the \"Code\").\n\n     NOW, THEREFORE, in consideration of the foregoing and the respective\nrepresentations, warranties, covenants and agreements set forth below, the\nBuyer, the Transitory Subsidiary and the Company agree as follows:\n \n                                   ARTICLE I\n                                   THE MERGER\n\n     1.1  Effective Time of the Merger .  Subject to the provisions of this\n          ----------------------------                                     \nAgreement, prior to the Closing (as defined in Section 1.2), the Buyer shall\nprepare, and on the Closing Date (as defined in Section 1.2) or as soon as\npracticable thereafter the Buyer shall cause to be filed with the Secretary of\nState of the State of Delaware, a certificate of merger (the \"Certificate of\nMerger\") in such form as is required by, and executed by the Surviving\nCorporation (as defined in Section 1.3) in accordance with, the relevant\nprovisions of the Delaware General Corporation Law (\"DGCL\") and shall make all\nother filings or recordings required under the DGCL.  The Merger shall become\neffective upon the filing of the Certificate of Merger with the Secretary of\nState of the State of Delaware or at such later time as is established by the\nBuyer and the Company and set forth in the Certificate of Merger (the \"Effective\nTime\").\n\n     1.2  Closing .  The closing of the Merger (the \"Closing\") shall take place\n          -------                                                              \nat 10:00 a.m., Boston time, on a date to be specified by the Buyer and the\nCompany (the \"Closing Date\"), which shall be no later than the second business\nday after satisfaction or waiver of the conditions set forth in Article VII\n(other than delivery of items to be delivered at the Closing), at the offices of\nHale and Dorr LLP, 60 State Street, Boston, Massachusetts, unless another date,\nplace or time is agreed to in writing by the Buyer and the Company.\n\n     1.3  Effects of the Merger .  At the Effective Time (i) the separate\n          ---------------------                                          \nexistence of the Transitory Subsidiary shall cease and the Transitory Subsidiary\nshall be merged with and into the Company (the Transitory Subsidiary and the\nCompany are sometimes referred to below as the \"Constituent Corporations\" and\nthe Company following the Merger is sometimes referred to below as the\n\"Surviving Corporation\"), (ii) the Certificate of Incorporation of the Company\nshall be amended so that Article FOURTH of such Certificate of Incorporation\nreads in its entirety as follows:  \"The total number of shares of all classes of\nstock which the Corporation shall have authority to issue is 1,000, all of which\nshall consist of common stock, $.01 par value per share,\" and, as so amended,\nsuch Certificate of Incorporation shall be the Certificate of Incorporation of\nthe Surviving Corporation, and (iii) the By-laws of the Transitory Subsidiary as\nin effect \n\n                                       3\n\n \nimmediately prior to the Effective Time shall be the By-laws of the\nSurviving Corporation.  The Merger shall have the effects set forth in Section\n259 of the DGCL.\n\n     1.4  Directors and Officers .  The directors and officers of the Transitory\n          ----------------------                                                \nSubsidiary immediately prior to the Effective Time shall be the initial\ndirectors and officers of the Surviving Corporation, each to hold office in\naccordance with the Certificate of Incorporation and By-laws of the Surviving\nCorporation.\n\n                                   ARTICLE II\n                            CONVERSION OF SECURITIES\n\n     2.1  Conversion of Capital Stock .  As of the Effective Time, by virtue of\n          ---------------------------                                          \nthe Merger and without any action on the part of the holder of any shares of the\ncapital stock of the Company or capital stock of the Transitory Subsidiary:\n\n          (a) Capital Stock of the Transitory Subsidiary.  Each issued and\n              ------------------------------------------                  \noutstanding share of the capital stock of the Transitory Subsidiary shall be\nconverted into and become one fully paid and nonassessable share of common\nstock, $.01 par value per share, of the Surviving Corporation.\n\n          (b) Cancellation of Treasury Stock and Buyer-Owned Stock. All shares\n              ----------------------------------------------------  \nof common stock, $.0001 par value per share, of the Company (\"Company Common\nStock\") that are owned by the Company as treasury stock or by any wholly owned\nSubsidiary (as defined in Section 3.1) of the Company and any shares of Company\nCommon Stock owned by the Buyer, the Transitory Subsidiary or any other wholly\nowned Subsidiary of the Buyer shall be canceled and retired and shall cease to\nexist and no stock of the Buyer or other consideration shall be delivered in\nexchange therefor.\n\n          (c) Exchange Ratio for Company Common Stock. Subject to Section 2.2,\n              ---------------------------------------\neach share of Company Common Stock (other than shares to be canceled in\naccordance with Section 2.1(b)) issued and outstanding immediately before the\nEffective Time, and all rights in respect thereof, shall be automatically\nconverted into 0.4738 shares (the \"Exchange Ratio \") of common stock, $.01 par\nvalue per share, of the Buyer (\"Buyer Common Stock\"). As of the Effective Time,\nall such shares of Company Common Stock shall no longer be outstanding and shall\nautomatically be canceled and retired and shall cease to exist, and each holder\nof a certificate representing any such shares of Company Common Stock shall\ncease to have any rights with respect thereto, except the right to receive the\nshares of Buyer Common Stock and any cash in lieu of fractional shares of Buyer\nCommon Stock to be issued or paid in consideration therefor upon surrender of\nsuch certificate in accordance with Section 2.2, without interest.\n\n          (d) Adjustments to Exchange Ratio. The Exchange Ratio shall be\n              -----------------------------\nadjusted to reflect fully the effect of any stock split, reverse split, stock\ndividend\n\n                                       4\n\n \n(including any dividend or distribution of securities convertible into Buyer\nCommon Stock or Company Common Stock), reorganization, recapitalization or other\nlike change with respect to Buyer Common Stock or Company Common Stock occurring\nafter the date hereof and prior to the Effective Time.\n\n          (e) Unvested Stock. At the Effective Time, any unvested shares of\n              --------------\nCompany Common Stock awarded to employees, directors or consultants pursuant to\nany of the Company's plans or arrangements and outstanding immediately prior to\nthe Effective Time shall be converted to unvested shares of Buyer Common Stock\nin accordance with the Exchange Ratio and shall remain subject to the same\nterms, restrictions and vesting schedule as in effect immediately prior to the\nEffective Time, except to the extent by the terms such unvested shares of\nCompany Common Stock vest at the Effective Time and copies of the relevant\nagreements governing such vesting had been provided to Buyer. All outstanding\nrights which the Company may hold immediately prior to the Effective Time to\nrepurchase unvested shares of Company Common Stock shall be assigned to the\nBuyer in the Merger and shall thereafter be exercisable by Buyer by Buyer upon\nthe same terms and conditions in effect immediately prior to the Effective Time,\nexcept that the shares purchasable pursuant to such rights and the purchase\nprice payable per share shall be adjusted to reflect the Exchange Ratio.\n\n          (f) Treatment of Company Options and Company Warrants.\n              ------------------------------------------------- \nOutstanding Company Options and Company Warrants (in each case as defined in\nSection 3.2(b)) shall be treated following the Effective Time in the manner set\nforth in Section 6.11.\n\n     2.2  Exchange of Certificates.  The procedures for exchanging outstanding\n          ------------------------                                             \nshares of Company Common Stock for Buyer Common Stock pursuant to the Merger are\nas follows:\n\n          (a) Exchange Agent.  As of the Effective Time, the Buyer shall deposit\n              --------------\nwith a bank or trust company designated by the Buyer (the \"Exchange Agent\"), for\nthe benefit of the holders of shares of the Company Common Stock, for exchange\nin accordance with this Section 2.2, through the Exchange Agent, (i)\ncertificates representing the shares of Buyer Common Stock (such shares of Buyer\nCommon Stock, together with any dividends or distributions with respect thereto,\nbeing hereinafter referred to as the \"Exchange Fund\") issuable pursuant to\nSection 2.1 in exchange for outstanding shares of the Company Common Stock, (ii)\ncash in an amount sufficient to make payments required pursuant to Section\n2.2(e), and (iii) any dividends or distributions to which holders of\nCertificates (as defined below) may be entitled pursuant to Section 2.2(c)\n\n          (b) Exchange Procedures.  As soon as reasonably practicable after the\n              -------------------                                              \nEffective Time, the Exchange Agent shall mail to each holder of record of a\ncertificate or\n\n                                       5\n\n \ncertificates which immediately prior to the Effective Time represented\noutstanding shares of the Company Common Stock (the \"Certificates\") whose shares\nwere converted pursuant to Section 2.1 into the right to receive shares of Buyer\nCommon Stock (i) a letter of transmittal (which shall specify that delivery\nshall be effected, and risk of loss and title to the Certificates shall pass,\nonly upon delivery of the Certificates to the Exchange Agent and shall be in\nsuch form and have such other provisions as the Buyer may reasonably specify)\nand (ii) instructions for effecting the surrender of the Certificates in\nexchange for certificates representing shares of Buyer Common Stock (plus cash\nin lieu of fractional shares, if any, of Buyer Common Stock and any dividends or\ndistributions as provided below). Upon surrender of a Certificate for\ncancellation to the Exchange Agent or to such other agent or agents as may be\nappointed by the Buyer, together with such letter of transmittal, duly executed,\nand such other documents as may reasonably be required by the Exchange Agent,\nthe holder of such Certificate shall be entitled to receive in exchange therefor\na certificate representing that number of whole shares of Buyer Common Stock\nwhich such holder has the right to receive pursuant to the provisions of this\nArticle II plus cash in lieu of fractional shares pursuant to Section 2.2(e) and\nany dividends or distributions pursuant to Section 2.2(c), and the Certificate\nso surrendered shall immediately be canceled. In the event of a transfer of\nownership of Company Common Stock which is not registered in the transfer\nrecords of the Company, a certificate representing the proper number of shares\nof Buyer Common Stock plus cash in lieu of fractional shares pursuant to Section\n2.2(e) and any dividends or distributions pursuant to Section 2.2(c) may be\nissued and paid to a person other than the person in whose name the Certificate\nso surrender is registered, if such Certificate is presented to the Exchange\nAgent, accompanied by all documents required to evidence and effect such\ntransfer and by evidence that any applicable stock transfer taxes have been\npaid. Until surrendered as contemplated by this Section 2.2, each Certificate\nshall be deemed at any time after the Effective Time to represent only the right\nto receive upon such surrender the certificate representing shares of Buyer\nCommon Stock plus cash in lieu of fractional shares pursuant to Section 2.2(e)\nand any dividends or distributions pursuant to Section 2.2(c) as contemplated by\nthis Section 2.2.\n\n          (c) Distributions with Respect to Unexchanged Shares.  No dividends or\n              ------------------------------------------------                  \nother distributions declared or made after the Effective Time with respect to\nBuyer Common Stock with a record date after the Effective Time shall be paid to\nthe holder of any unsurrendered Certificate with respect to the shares of Buyer\nCommon Stock represented thereby and no cash payment in lieu of fractional\nshares shall be paid to any such holder pursuant to Section 2.2(e) until the\nholder of record of such Certificate shall surrender such Certificate.  Subject\nto the effect of applicable laws, following surrender of any such Certificate,\nthere shall be issued and paid to the record holder of the Certificate, (i)\ncertificates representing whole shares of Buyer Common Stock issued in exchange\ntherefor, without interest, (ii) at the time of such surrender, the amount of\nany cash payable in lieu of a fractional share of Buyer Common Stock to which\nsuch \n\n                                       6\n\n \nholder is entitled pursuant to Section 2.2(e) and the amount of dividends\nor other distributions with a record date after the Effective Time previously\npaid with respect to such whole shares of Buyer Common Stock, and (iii) at the\nappropriate payment date, the amount of dividends or other distributions with a\nrecord date after the Effective Time but prior to surrender and a payment date\nsubsequent to surrender payable with respect to such whole shares of Buyer\nCommon Stock.\n\n          (d) No Further Ownership Rights in Company Common Stock. All shares of\n              ---------------------------------------------------\nBuyer Common Stock issued upon the surrender for exchange of Certificates in\naccordance with the terms hereof (including any cash or other distributions paid\npursuant to Sections 2.2(c) or 2.2(e)) shall be deemed to have been issued in\nfull satisfaction of all rights pertaining to such shares of Company Common\nStock, and from and after the Effective Time there shall be no further\nregistration of transfers on the stock transfer books of the Surviving\nCorporation of the shares of Company Common Stock which were outstanding\nimmediately prior to the Effective Time. If, after the Effective Time,\nCertificates are presented to the Surviving Corporation or the Exchange Agent\nfor any reason, they shall be canceled and exchanged as provided in this Article\nII.\n\n          (e) No Fractional Shares. No certificate or scrip representing\n              --------------------\nfractional shares of Buyer Common Stock shall be issued upon the surrender for\nexchange of Certificates, and such fractional share interests will not entitle\nthe owner thereof to vote or to any other rights of a stockholder of the Buyer.\nNotwithstanding any other provision of this Agreement, each holder of shares of\nCompany Common Stock exchanged pursuant to the Merger who would otherwise have\nbeen entitled to receive a fraction of a share of Buyer Common Stock (after\ntaking into account all Certificates delivered by such holder) shall receive, in\nlieu thereof, cash (without interest) in an amount equal to such fractional part\nof a share of Buyer Common Stock multiplied by the average of the last reported\nsales prices of the Buyer Common Stock on the Nasdaq National Market during the\nten (10) consecutive trading days ending on and including the last trading day\nprior to the Effective Time.\n\n          (f) Termination of Exchange Fund. Any portion of the Exchange Fund\n              ----------------------------\nwhich remains undistributed to the holders of Company Common Stock for 180 days\nafter the Effective Time shall be delivered to the Buyer, upon demand, and any\nholder of Company Common Stock who has not previously complied with this Section\n2.2 shall thereafter look only to the Buyer for payment of its claim for Buyer\nCommon Stock, any cash in lieu of fractional shares of Buyer Common Stock and\nany dividends or distributions with respect to Buyer Common Stock.\n\n          (g) No Liability.  To the extent permitted by applicable law, none of\n              ------------\nthe Buyer, the Transitory Subsidiary, the Company, the Surviving Corporation or\nthe Exchange Agent shall be liable to any holder of shares of Company Common\nStock or\n\n                                       7\n\n \nBuyer Common Stock, as the case may be, for such shares (or dividends or\ndistributions with respect thereto) delivered to a public official pursuant to\nany applicable abandoned property, escheat or similar law.  If any Certificate\nshall not have been surrendered prior to one year after the Effective Time (or\nimmediately prior to such earlier date on which any shares of Buyer Common\nStock, and any cash payable to the holder of such Certificate pursuant to this\nArticle II or any dividends or distributions payable to the holder of such\nCertificate would otherwise escheat to or become the property of any\nGovernmental Entity (as defined in Section 3.3(c))), any such shares of Buyer\nCommon Stock or cash, dividends or distributions in respect of such Certificate\nshall, to the extent permitted by applicable law, become the property of the\nSurviving Corporation, free and clear of all claims or interest of any person\npreviously entitled thereto.\n\n          (h) Withholding Rights.  Each of the Buyer and the Surviving\n              ------------------\nCorporation shall be entitled to deduct and withhold from the consideration\notherwise payable pursuant to this Agreement to any holder of shares of Company\nCommon Stock such amounts as it is required to deduct and withhold with respect\nto the making of such payment under the Code, or any other applicable provision\nof law. To the extent that amounts are so withheld by the Surviving Corporation\nor the Buyer, as the case may be, such withheld amounts shall be treated for all\npurposes of this Agreement as having been paid to the holder of the shares of\nCompany Common Stock in respect of which such deduction and withholding was made\nby the Surviving Corporation or the Buyer, as the case may be.\n\n          (i) Lost Certificates. If any Certificate shall have been lost, stolen\n              -----------------\nor destroyed, upon the making of an affidavit of that fact by the person\nclaiming such Certificate to be lost, stolen or destroyed and, if required by\nthe Surviving Corporation, the posting by such person of a bond in such\nreasonable amount as the Surviving Corporation may direct as indemnity against\nany claim that may be made against it with respect to such Certificate, the\nExchange Agent will issue in exchange for such lost, stolen or destroyed\nCertificate the shares of Buyer Common Stock and any cash in lieu of fractional\nshares, and unpaid dividends and distributions on shares of Buyer Common Stock\ndeliverable in respect thereof pursuant to this Agreement.\n\n                                  ARTICLE III\n                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n     The Company represents and warrants to the Buyer and the Transitory\nSubsidiary that the statements contained in this Article III are true and\ncorrect, except as set forth herein or in the disclosure schedule delivered by\nthe Company to the Buyer on or before the date of this Agreement (the \"Company\nDisclosure Schedule\").  The Company Disclosure Schedule shall be arranged in\nparagraphs corresponding to the\n\n                                       8\n\n \nnumbered and lettered paragraphs contained in this Article III and the\ndisclosure in any paragraph shall qualify other paragraphs in this Article III\nonly to the extent that it is reasonably apparent from a reading of such\ndisclosure that it also qualifies or applies to such other paragraphs.\n\n     3.1  Organization, Standing and Power; Subsidiaries.\n          ----------------------------------------------  \n\n          (a) Each of the Company and its Subsidiaries (as defined below) is a\ncorporation duly organized, validly existing and in good standing under the laws\nof the jurisdiction of its incorporation, has all requisite corporate power and\nauthority to own, lease and operate its properties and assets and to carry on\nits business as now being conducted and as proposed to be conducted, and is duly\nqualified to do business and is in good standing as a foreign corporation in\neach jurisdiction in which the failure to be so qualified, individually or in\nthe aggregate, would have a Company Material Adverse Effect.  \"Company Material\nAdverse Effect\" shall mean a material adverse effect on the business,\nproperties, financial condition, results of operations or prospects of the\nCompany and its Subsidiaries, taken as a whole, or a material adverse effect on\nthe ability of the Company to consummate the transactions contemplated by this\nAgreement or the Company Stock Option Agreement, excluding any material adverse\neffect (a) demonstrably shown to have been proximately caused by the public\nannouncement of this Agreement, the Company Stock Option Agreement or any of the\ntransactions contemplated thereby, (b) attributable to any legal proceeding\nbrought by or on behalf of stockholders of the Company alleging that the Board\nof Directors of the Company breached its fiduciary duties in connection with its\napproval of this Agreement or the Company Stock Option Agreement, or (c) arising\nor resulting from general industry, economic or stock market conditions that\naffect the Company (or the markets in which the Company competes) in a manner\nnot disproportionate to the manner in which such conditions affect other\ncompanies in the industries or markets in which the Company competes.\n\n          (b) Except as set forth in the Company SEC Reports (as defined in\nSection 3.4) filed prior to the date of this Agreement, neither the Company nor\nany of its Subsidiaries directly or indirectly owns any equity, membership,\npartnership or similar interest in, or any interest convertible into or\nexchangeable or exercisable for any equity, membership, partnership or similar\ninterest in, any corporation, partnership, joint venture, limited liability\ncompany or other business association or entity, whether incorporated or\nunincorporated. As used in this Agreement, the word \"Subsidiary\" means, with\nrespect to a party, any corporation, partnership, joint venture, limited\nliability company or other business association or entity, whether incorporated\nor unincorporated, of which (i) such party or any other Subsidiary of such party\nis a general partner (excluding partnerships, the general partnership interests\nof which held by such party and\/or one or more of its Subsidiaries do not have a\nmajority of the voting interest in such partnership), (ii) such party and\/or one\nor more of its Subsidiaries holds voting power to elect a majority of the board\nof directors or other governing body performing similar functions, or (iii) such\nparty and\/or one or more of its\n\n                                       9\n\n \nSubsidiaries holds voting power to elect a majority of the board of directors or\nother governing body performing similar functions, or (iii) such party and\/or\none or more of its Subsidiaries, directly or indirectly, owns or controls more\nthan 50% of the equity, membership, partnership or similar interests.\n\n          (c) The Company has delivered to the Buyer complete and accurate\ncopies of the Certificate of Incorporation and By-laws of the Company and of the\ncharter, by-laws or other organization documents of each Subsidiary of the\nCompany.\n\n     3.2  Capitalization .\n          --------------  \n\n          (a) The authorized capital stock of the Company consists of 50,000,000\nshares of Company Common Stock and 2,000,000 shares of preferred stock, $.0001\npar value per share (\"Company Preferred Stock\"). As of the close of business on\nthe date of this Agreement, (i) 15,260,089 shares of Company Common Stock were\nissued and outstanding, (ii) no shares of Company Common Stock were held in the\ntreasury of the Company or by Subsidiaries of the Company, and (iii) no shares\nof the Company Preferred Stock were issued and outstanding.\n\n          (b) Section 3.2(b) of Company Disclosure Schedule lists the number of\nshares of Company Common Stock reserved for future issuance pursuant to stock\noptions granted and outstanding as of the date of this Agreement and the plans\nunder which such options were granted (collectively, the \"Company Stock Plans\")\nand sets forth a complete and accurate list of all holders of outstanding\noptions to purchase shares of Company Common Stock (such outstanding options,\nthe \"Company Stock Options\") under the Company Stock Plans, indicating the\nnumber of shares of Company Common Stock subject to each Company Stock Option,\nand the exercise price, the date of grant, vesting schedule and the expiration\ndate thereof.  Section 3.2 of the Company Disclosure Schedule shows the number\nof shares of Company Common Stock reserved for future issuance pursuant to\nwarrants or other outstanding rights to purchase shares of Company Common Stock\noutstanding as of the date of this Agreement (such outstanding warrants or other\nrights, the \"Company Warrants\") and the agreement or other document under which\nsuch Company Warrants were granted and sets forth a complete and accurate list\nof all holders of Company Warrants indicating the number and type of shares of\nCompany Common Stock subject to each Company Warrant, and the exercise price,\nthe date of grant and the expiration date thereof.  Except (x) as set forth in\nthis Section 3.2 and (y) as reserved for future grants under Company Stock\nPlans,  (i) there are no equity securities of any class of the Company or any of\nits Subsidiaries, or any security exchangeable into or exercisable for such\nequity securities, issued, reserved for issuance or outstanding and (ii) there\nare no options, warrants, equity securities, calls, rights, commitments or\nagreements of any character to which the Company or any of its Subsidiaries is a\nparty or by which the Company or any of its Subsidiaries is bound obligating the\nCompany or any of its\n\n                                      10\n\n \nSubsidiaries to issue, transfer, deliver or sell, or cause to be issued,\ntransferred, delivered or sold, additional shares of capital stock of the\nCompany or any of its Subsidiaries or any security or rights convertible into or\nexchangeable or exercisable for any such shares, or obligating the Company or\nany of its Subsidiaries to grant, extend, accelerate the vesting of, otherwise\nmodify or amend or enter into any such option, warrant, equity security, call,\nright, commitment or agreement. Neither the Company nor any of its Subsidiaries\nhas issued and outstanding any stock appreciation rights, phantom stock,\nperformance based rights or similar rights or obligations. To the knowledge of\nthe Company, other than the Stockholders Agreements, there are no agreements or\nunderstandings with respect to the voting (including voting trusts and proxies)\nor sale or transfer (including agreements imposing transfer restrictions) of any\nshares of capital stock of the Company or any of its Subsidiaries.\n\n          (c) All outstanding shares of Company Common Stock are, and all shares\nof Company Common Stock subject to issuance as specified above, upon issuance on\nthe terms and conditions specified in the instruments pursuant to which they are\nissuable, will be, duly authorized, validly issued, fully paid and nonassessable\nand not subject to or issued in violation of any purchase option, call option,\nright of first refusal, preemptive right, subscription right or any similar\nright under any provision of the DGCL, the Company's Certificate of\nIncorporation or By-laws or any agreement to which the Company is a party or is\notherwise bound. There are no obligations, contingent or otherwise, of Company\nor any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares\nof the Company Common Stock or the capital stock of the Company or any of its\nSubsidiaries or to provide funds to or make any material investment (in the form\nof a loan, capital contribution or otherwise) in the Company or any Subsidiary\nof the Company or any other entity, other than guarantees of bank obligations of\nSubsidiaries of the Company entered into in the ordinary course of business.\n\n          (d) All of the outstanding shares of capital stock of each of the\nCompany's Subsidiaries are duly authorized, validly issued, fully paid,\nnonassessable and free of preemptive rights and all such shares (other than\ndirectors' qualifying shares in the case of non-U.S. Subsidiaries, all of which\nthe Company has the power to cause to be transferred for no or nominal\nconsideration to the Buyer or the Buyer's designee) are owned, of record and\nbeneficially, by the Company or another Subsidiary of the Company free and clear\nof all security interests, liens, claims, pledges, agreements, limitations in\nthe Company's voting rights, charges or other encumbrances of any nature.\n\n          (e) No consent of the holders of Company Stock Options is required in\nconnection with the conversion of such options contemplated by Section 6.11.\n\n     3.3  Authority; No Conflict; Required Filings and Consents .\n          -----------------------------------------------------  \n\n                                      11\n\n \n          (a) The Company has all requisite corporate power and authority to\nenter into this Agreement and the Company Stock Option Agreement and to\nconsummate the transactions contemplated by this Agreement and the Company Stock\nOption Agreement. The execution and delivery of this Agreement and the Company\nStock Option Agreement and the consummation of the transactions contemplated by\nthis Agreement and the Company Stock Option Agreement by the Company have been\nduly authorized by all necessary corporate action on the part of the Company,\nsubject only to the approval of the Merger by the Company's stockholders under\nthe DGCL. This Agreement and the Company Stock Option Agreement have been duly\nexecuted and delivered by the Company and constitute the valid and binding\nobligations of the Company, enforceable in accordance with their respective\nterms.\n\n          (b) The execution and delivery of this Agreement and the Company Stock\nOption Agreement by the Company does not, and the consummation of the\ntransactions contemplated by this Agreement and the Company Stock Option\nAgreement will not, (i) conflict with, or result in any violation or breach of,\nany provision of the Certificate of Incorporation or By-laws of the Company or\nthe charter, by-laws, or other organizational document of any Subsidiary of the\nCompany, (ii) conflict with, or result in any violation or breach of, or\nconstitute (with or without notice or lapse of time, or both) a default (or give\nrise to a right of termination, cancellation or acceleration of any obligation\nor loss of any material benefit) under, or require a consent or waiver under,\nany of the terms, conditions or provisions of any note, bond, mortgage,\nindenture, lease, license, contract or other agreement, instrument or obligation\nto which the Company or any of its Subsidiaries is a party or by which any of\nthem or any of their properties or assets may be bound, or (iii) subject to\ncompliance with the requirements specified in clauses (i), (ii), (iii), (iv) and\n(v) of Section 3.3(c), conflict with or violate any permit, concession,\nfranchise, license, judgment, injunction, order, decree, statute, law,\nordinance, rule or regulation applicable to the Company or any of its\nSubsidiaries or any of its or their properties or assets, except in the case of\n(ii) and (iii) for any such conflicts, violations, breaches, defaults,\nterminations, cancellations or accelerations which, individually or in the\naggregate, would not have a Company Material Adverse Effect.\n\n          (c) No consent, approval, license, permit, order or authorization of,\nor, registration, declaration, notice or filing with, any court, arbitrational\ntribunal, administrative agency or commission or other governmental or\nregulatory authority or agency (a \"Governmental Entity\") is required by or with\nrespect to the Company or any of its Subsidiaries in connection with the\nexecution and delivery of this Agreement and the Company Stock Option Agreement\nby the Company or the consummation of the transactions contemplated by this\nAgreement or the Company Stock Option Agreement, except for (i) the filing of a\npre-merger notification report under the Hart-Scott-Rodino Antitrust\nImprovements Act of 1976, as amended (the \"HSR Act\"),\n\n                                      12\n\n \n(ii) the filing of the Certificate of Merger with the Delaware Secretary of\nState, (iii) the filing of the Proxy Statement (as defined in Section 3.16\nbelow) with the Securities and Exchange Commission (the \"SEC\") in accordance\nwith the Securities Exchange Act of 1934, as amended (the \"Exchange Act\"), (iv)\nthe filing of such reports or schedules under Section 13 of the Exchange Act as\nmay be required in connection with this Agreement and the transactions\ncontemplated hereby and (v) such consents, approvals, orders, authorizations,\nregistrations, declarations and filings as may be required under applicable\nstate securities laws.\n\n          (d) The affirmative vote of the holders of a majority of the\noutstanding shares of Company Common Stock on the record date for the Company\nMeeting (as defined below) is the only vote of the holders of any class or\nseries of the Company's capital stock or other securities necessary to approve\nthe Merger. There are no bonds, debentures, notes or other indebtedness of the\nCompany having the right to vote (or convertible into, or exchangeable for,\nsecurities having the right to vote) on any matters on which stockholders of the\nCompany may vote.\n\n     3.4  SEC Filings; Financial Statements .\n          ---------------------------------  \n\n          (a) The Company has filed and made available to the Buyer all forms,\nreports and other documents required to be filed by the Company with the SEC\nsince May 4, 1999.  All such required forms, reports and other documents\n(including those that the Company may file after the date hereof until the\nClosing) are referred to herein as the \"Company SEC Reports.\"  The Company SEC\nReports (i) were or will be filed on a timely basis, (ii) were or will be\nprepared in compliance in all material respects with the applicable requirements\nof the Securities Act of 1933, as amended (the \"Securities Act\"), and the\nExchange Act, as the case may be, and the rules and regulations of the SEC\nthereunder applicable to such Company SEC Reports, and (iii) did not or will not\nat the time they were or are filed contain any untrue statement of a material\nfact or omit to state a material fact required to be stated in such Company SEC\nReports or necessary in order to make the statements in such Company SEC\nReports, in the light of the circumstances under which they were made, not\nmisleading.  No Subsidiary of the Company is required to file any forms, reports\nor other documents with the SEC.\n\n          (b) Each of the consolidated financial statements (including, in each\ncase, any related notes and schedules) contained or to be contained in the\nCompany SEC Reports (i) complied or will comply as to form in all material\nrespects with applicable accounting requirements and the published rules and\nregulations of the SEC with respect thereto, (ii) were or will be prepared in\naccordance with generally accepted accounting principles applied on a consistent\nbasis throughout the periods involved (except as may be indicated in the notes\nto such financial statements or, in the case of unaudited statements, as\npermitted by the SEC on Form 10-Q under the Exchange Act) and (iii) fairly\npresented or will fairly present the consolidated financial position of\n\n                                      13\n\n \nCompany and its Subsidiaries as of the dates and the consolidated results of its\noperations and cash flows for the periods indicated, consistent with the books\nand records of the Company and its Subsidiaries, except that the unaudited\ninterim financial statements were or are subject to normal and recurring year-\nend adjustments which were not or are not expected to be material in amount. The\nunaudited balance sheet of the Company as of August 31, 1999 is referred to\nherein as the \"Company Balance Sheet.\"\n\n     3.5  No Undisclosed Liabilities .  Except as disclosed in the Company SEC\n          --------------------------                                          \nReports filed prior to the date of this Agreement, and except for normal or\nrecurring liabilities incurred since the date of the Company Balance Sheet in\nthe ordinary course of business consistent with past practices, the Company and\nits Subsidiaries do not have any liabilities, either accrued, contingent or\notherwise (whether or not required to be reflected in financial statements in\naccordance with generally accepted accounting principles), and whether due or to\nbecome due, which, individually or in the aggregate, would have a Company\nMaterial Adverse Effect.\n\n     3.6  Absence of Certain Changes or Events .  Except as disclosed in the\n          ------------------------------------                              \nCompany SEC Reports filed prior to the date of this Agreement, since the date of\nthe Company Balance Sheet, the Company and its Subsidiaries have conducted their\nrespective businesses only in the ordinary course and in a manner consistent\nwith past practice and, since such date, there has not been (i) any event,\nchange or development in the business, properties, financial condition, results\nof operations or prospects of the Company and its Subsidiaries, taken as a\nwhole, which, individually or in the aggregate, has had, or is reasonably likely\nto have, a Company Material Adverse Effect; (ii) any damage, destruction or loss\n(whether or not covered by insurance) with respect to the Company or any of its\nSubsidiaries which, individually or in the aggregate, has had, or is reasonably\nlikely to have, a Company Material Adverse Effect; or (iii) any other action or\nevent that would have required the consent of the Buyer pursuant to Section 5.1\nof this Agreement had such action or event occurred after the date of this\nAgreement.\n\n     3.7  Taxes .\n          -----  \n\n          (a) The Company and each of its Subsidiaries has filed all Tax Returns\n(as defined below) that it was required to file, and all such Tax Returns were\ncorrect and complete except for any errors or omissions which would not,\nindividually or in the aggregate, have a Company Material Adverse Effect. The\nCompany and each of its Subsidiaries has paid on a timely basis all Taxes (as\ndefined below) that are shown to be due on any such Tax Returns. The unpaid\nTaxes of the Company and its Subsidiaries for Tax periods through the date of\nthe Company Balance Sheet do not exceed the accruals and reserves for Taxes set\nforth on the Company Balance Sheet exclusive of any accruals and reserves for\n\"deferred taxes\" or similar items that reflect timing differences\n\n                                      14\n\n \nbetween Tax and financial accounting principles. All Taxes that the Company or\nany of its Subsidiaries is or was required by law to withhold or collect have\nbeen duly withheld or collected and, to the extent required, have been paid to\nthe proper Governmental Entity. For purposes of this Agreement, (i) \"Taxes\"\nmeans all taxes, charges, fees, levies or other similar assessments or\nliabilities, including income, gross receipts, ad valorem, premium, value-added,\nexcise, real property, personal property, sales, use, services, transfer,\nwithholding, employment, payroll and franchise taxes imposed by the United\nStates of America or any state, local or foreign government, or any agency\nthereof, or other political subdivision of the United States or any such\ngovernment, and any interest, fines, penalties, assessments or additions to tax\nresulting from, attributable to or incurred in connection with any tax or any\ncontest or dispute thereof and (ii) \"Tax Returns\" means all reports, returns,\ndeclarations, statements or other information required to be supplied to a\ntaxing authority in connection with Taxes.\n\n          (b) The Company has delivered to the Buyer correct and complete copies\nof all federal income Tax Returns, examination reports and statements of\ndeficiencies assessed against or agreed to by the Company or any of its\nSubsidiaries since inception. The federal income Tax Returns of the Company and\neach of its Subsidiaries have been audited by the Internal Revenue Service or\nare closed by the applicable statute of limitations for all taxable years\nthrough the taxable year specified in Section 3.7(b) of the Company Disclosure\nSchedule. The Company has made available to the Buyer correct and complete\ncopies of all other Tax Returns of the Company and its Subsidiaries together\nwith all related examination reports and statements of deficiency for all\nperiods from and after January 1, 1996. No examination or audit of any Tax\nReturn of the Company or any of its Subsidiaries by any Governmental Entity is\ncurrently in progress or, to the knowledge of the Company, threatened or\ncontemplated. Neither the Company nor any of its Subsidiaries has been informed\nby any Governmental Entity that the Governmental Entity believes that the\nCompany or any of its Subsidiaries was required to file any Tax Return that was\nnot filed. Neither the Company nor any of its Subsidiaries has waived any\nstatute of limitations with respect to Taxes or agreed to an extension of time\nwith respect to a Tax assessment or deficiency.\n\n          (c) Neither the Company nor any of its Subsidiaries: (i) is a\n\"consenting corporation\" within the meaning of Section 341(f) of the Code, and\nnone of the assets of the Company or its Subsidiaries are subject to an election\nunder Section 341(f) of the Code; (ii) has been a United States real property\nholding corporation within the meaning of Section 897(c)(2) of the Code during\nthe applicable period specified in Section 897(c)(l)(A)(ii) of the Code; (iii)\nhas made any payments, is obligated to make any payments, or is a party to any\nagreement that could obligate it to make any payments that may be treated as an\n\"excess parachute payment\" under Section 280G of the Code; (iv) has any actual\nor potential liability for any Taxes of any\n\n                                      15\n\n \nperson (other than the Company and its Subsidiaries) under Treasury Regulation\nSection 1.1502-6 (or any similar provision of law in any jurisdiction), or as a\ntransferee or successor, by contract, or otherwise; or (v) is or has been\nrequired to make a basis reduction pursuant to Treasury Regulation Section\n1.1502-20(b) or Treasury Regulation Section 1.337(d)-2(b).\n\n          (d) None of the assets of the Company or any of its Subsidiaries: (i)\nis property that is required to be treated as being owned by any other person\npursuant to the provisions of former Section 168(f)(8) of the Code; (ii) is\n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code; or\n(iii) directly or indirectly secures any debt the interest on which is tax\nexempt under Section 103(a) of the Code.\n\n          (e) Neither the Company nor any of its Subsidiaries has undergone, or\nwill undergo as a result of the transactions contemplated by the Agreement, a\nchange in its method of accounting resulting in an adjustment to its taxable\nincome pursuant to Section 481(h) of the Code.\n\n          (f) No state or federal \"net operating loss\" of the Company determined\nas of the Closing Date is subject to limitation on its use pursuant to Section\n382 of the Code or comparable provisions of state law as a result of any\n\"ownership change\" within the meaning of Section 382(g) of the Code or\ncomparable provisions of any state law occurring prior to the Closing Date.\n\n          (g) Neither the Company nor any of its Subsidiaries (i) is or has ever\nbeen a member of a group of corporations with which it has filed (or been\nrequired to file) consolidated, combined or unitary Tax Returns, other than a\ngroup of which only the Company and its Subsidiaries are or were members or (ii)\nis a party to or bound by any Tax indemnity, Tax sharing or Tax allocation\nagreement.\n\n     3.8  Owned and Leased Real Properties .\n          --------------------------------  \n\n          (a) The Company does not and has never owned any real property.\n\n          (b) The Company has provided to the Buyer a complete and accurate list\nof all real property leased by the Company or its Subsidiaries (collectively\n\"Company Leases\") and the location of the premises. The Company is not in\ndefault under any of the Company Leases. Each of the Company Leases is in full\nforce and effect and will not cease to be in full force and effect as a result\nof the transactions contemplated by this Agreement.\n\n     3.9  Intellectual Property .\n          ---------------------  \n\n          (a) The Company and its Subsidiaries exclusively own, or are licensed\nor otherwise possess legally enforceable rights to use on an exclusive basis,\nwithout any\n\n                                      16\n\n \nobligation to make any fixed or contingent payments, including any royalty\npayments, all patents, trademarks, trade names, domain names, service marks and\ncopyrights, any applications for and registrations of such patents, trademarks,\ntrade names, domain names, service marks and copyrights, and all processes,\nformulae, methods, schematics, technology, know-how, computer software programs\nor applications and tangible or intangible proprietary information or material\nthat are used or necessary to conduct the business of the Company and its\nSubsidiaries as currently conducted (the \"Company Intellectual Property\nRights\").\n\n          (b) The execution and delivery of this Agreement and consummation of\nthe Merger will not result in the breach of, or create on behalf of any third\nparty the right to terminate or modify, any material license, sublicense or\nother agreement relating to the Company Intellectual Property Rights, or any\nlicense, sublicense and other agreement as to which the Company or any of its\nSubsidiaries is a party and pursuant to which the Company or any of its\nSubsidiaries is authorized to use any third party patents, trademarks,\ncopyrights or trade secrets (the \"Company Third Party Intellectual Property\nRights\"), including software that is used in the manufacture of, incorporated\nin, or forms a part of any product or service sold by or expected to be sold by\na Company or any of its Subsidiaries.\n\n          (c) All patents, registered trademarks, service marks and copyrights\nwhich are held by the Company or any of its Subsidiaries and which are material\nto the business of the Company and its Subsidiaries, taken as a whole, are valid\nand subsisting. The Company and its Subsidiaries have taken reasonable measures\nto protect the proprietary nature of the Company Intellectual Property Rights\nthat are material to the business of the Company and its Subsidiaries, taken as\na whole, and to maintain in confidence all trade secrets and confidential\ninformation owned or used by the Company or any of its Subsidiaries and that are\nmaterial to the business of the Company and its Subsidiaries, taken as a whole.\nTo the knowledge of the Company, no other person or entity is infringing,\nviolating or misappropriating any of the Company Intellectual Property Rights.\nNone of the activities or business previously or currently conducted by the\nCompany or any of the Subsidiaries infringes, violates or constitutes a\nmisappropriation of, any patents, trademarks, trade names, service marks and\ncopyrights, any applications for and registrations of such patents, trademarks,\ntrade names, service marks and copyrights, and all processes, formulae, methods,\nschematics, technology, know-how, computer software programs or applications and\ntangible or intangible proprietary information or material of any other person\nor entity, except for any infringement, violation or misappropriation that would\nnot have a Company Material Adverse Effect. Neither the Company nor any of its\nSubsidiaries has received any complaint, claim or notice alleging any such\ninfringement, violation or misappropriation.\n\n     3.10  Agreements, Contracts and Commitments .\n           -------------------------------------  \n\n                                      17\n\n \n          (a) There are no contracts or agreements that are material contracts\n(as defined in Item 601(b)(10) of Regulation S-K) with respect to the Company\nand its Subsidiaries (the \"Company Material Contracts\"), other than the Company\nMaterial Contracts identified on the exhibit indices of the Company SEC Reports\nfiled prior to the date of this Agreement. Each Company Material Contract has\nnot expired by its terms and is in full force and effect. Neither the Company\nnor any of its Subsidiaries is in violation of or in default under (nor does\nthere exist any condition which, upon the passage of time or the giving of\nnotice or both, would cause such a violation of or default under) any loan or\ncredit agreement, note, bond, mortgage, indenture, lease, permit, concession,\nfranchise, license or other contract, arrangement or understanding to which it\nis a party or by which it or any of its properties or assets is bound, except\nfor violations or defaults which, individually or in the aggregate, have not\nresulted in, and would not result in, a Company Material Adverse Effect.\n\n          (b) Section 3.10(b) of the Company Disclosure Schedule sets forth a\ncomplete list of each contract or agreement to which the Company or any of its\nSubsidiaries is a party or bound with any Affiliate of the Company (other than\nany Subsidiary which is a direct or indirect wholly owned Subsidiary of the\nCompany).\n\n          (c) The Company is not a party to any agreement under which a third\nparty would be entitled to receive a license or any other right to intellectual\nproperty of the Buyer or any of the Buyer's affiliates (as such term is defined\nin Rule 405 promulgated under the Securities Act) following the Closing.\n\n     3.11 Litigation .  Except as disclosed in the Company SEC Reports filed\n          ----------                                                        \nprior to the date of this Agreement, there is no action, suit, proceeding,\nclaim, arbitration or investigation pending or, to the knowledge of the Company,\nthreatened against or affecting the Company or any of its Subsidiaries which,\nindividually or in the aggregate, has had, or is reasonably likely to have, a\nCompany Material Adverse Effect.  There are no judgments, orders or decrees\noutstanding against the Company.\n\n                                      18\n\n \n     3.12  Environmental Matters.\n           ---------------------  \n\n           (a) Except as disclosed in the Company SEC Reports filed prior to the\ndate of this Agreement and except for such matters which, individually or in the\naggregate, have not had, and would not have a Company Material Adverse Effect:\n(i) the Company and each of its Subsidiaries has complied with, and is not in\nviolation of, any applicable Environmental Laws (as defined in Section 3.12(b));\n(ii) the properties currently owned or operated by the Company and its\nSubsidiaries (including soils, groundwater, surface water, buildings or other\nstructures) are not contaminated with any Hazardous Substances (as defined in\nSection 3.12(c)); (iii) the properties formerly owned or operated by the Company\nor any of its Subsidiaries were not contaminated with Hazardous Substances prior\nto or during the period of ownership or operation by the Company or any of its\nSubsidiaries; (iv) neither the Company nor its Subsidiaries are subject to\nliability for any Hazardous Substance disposal or contamination on the property\nof any third party; (v) neither the Company nor any of its Subsidiaries have\nreleased any Hazardous Substance to the environment; (vi) neither the Company\nnor any of its Subsidiaries has received any notice, demand, letter, claim or\nrequest for information alleging that the Company or any of its Subsidiaries may\nbe in violation of, liable under or have obligations under any Environmental\nLaw; (vii) neither the Company nor any of its Subsidiaries is subject to any\norders, decrees, injunctions or other arrangements with any Governmental Entity\nor is subject to any indemnity or other agreement with any third party relating\nto liability under any Environmental Law or relating to Hazardous Substances;\nand (viii) there are no circumstances or conditions involving the Company or any\nof its Subsidiaries that could reasonably be expected to result in any claims,\nliability, obligations, investigations, costs or restrictions on the ownership,\nuse or transfer of any property of the Company or any of its Subsidiaries\npursuant to any Environmental Law.\n\n           (b) For purposes of this Agreement, \"Environmental Law\" means any\nlaw, regulation, order, decree, permit, authorization, opinion, common law or\nagency requirement of any jurisdiction relating to: (A) the protection,\ninvestigation or restoration of the environment, human health and safety, or\nnatural resources, (B) the handling, use, presence, disposal, release or\nthreatened release of any Hazardous Substance or (C) noise, odor, wetlands,\npollution, contamination or any injury or threat of injury to persons or\nproperty.\n\n           (c) For purposes of this Agreement, \"Hazardous Substance\" means any\nsubstance that is: (A) listed, classified, regulated or which falls within the\ndefinition of a \"hazardous substance\" or \"hazardous material\" pursuant to any\nEnvironmental Law; (B) any petroleum product or by-product, asbestos-containing\nmaterial, lead-containing paint or plumbing, polychlorinated biphenyls,\nradioactive materials or radon; or (C)\n\n                                      19\n\n \nany other substance which is the subject of regulatory action by any\nGovernmental Entity pursuant to any Environmental Law.\n\n           (d) Section 3.12(d) of the Company Disclosure Schedule sets forth a\ncomplete and accurate list of all documents (whether in hard copy or electronic\nform) that contain any environmental reports, investigations and audits relating\nto premises currently or previously owned or operated by the Company or any of\nits Subsidiaries (whether conducted by or on behalf of the Company or one of its\nSubsidiaries or a third party, and whether done at the initiative of the Company\nor one of its Subsidiaries or directed by a Governmental Entity or other third\nparty) which were issued or conducted during the past five years and which the\nCompany has possession of or access to.  A complete and accurate copy of each\nsuch document has been provided to the Buyer.\n\n     3.13  Employee Benefit Plans .\n           ----------------------  \n\n           (a) Section 3.13(a) of the Company Disclosure Schedule sets forth a\ncomplete and accurate list of all Employee Benefit Plans (as defined below)\nmaintained, or contributed to, by the Company, any Subsidiary of the Company or\nany ERISA Affiliate (as defined below) (together, the \"Company Employee Plans\").\nFor purposes of this Agreement, the following terms shall have the following\nmeanings:  (i) \"Employee Benefit Plan\" means any \"employee pension benefit plan\"\n(as defined in Section 3(2) of ERISA), any \"employee welfare benefit plan\" (as\ndefined in Section 3(1) of ERISA), and any other written or oral plan, agreement\nor arrangement involving direct or indirect compensation, including insurance\ncoverage, severance benefits, disability benefits, deferred compensation,\nbonuses, stock options, stock purchase, phantom stock, stock appreciation or\nother forms of incentive compensation or post-retirement compensation;  (ii)\n\"ERISA\" means the Employee Retirement Income Security Act of 1974, as amended;\nand (iii) \"ERISA Affiliate\" means any entity which is, or at any applicable time\nwas, a member of (1) a controlled group of corporations (as defined in Section\n414(b) of the Code), (2) a group of trades or businesses under common control\n(as defined in Section 414(c) of the Code), or (3) an affiliated service group\n(as defined under Section 414(m) of the Code or the regulations under Section\n414(o) of the Code), any of which includes or included the Company or a\nSubsidiary.\n\n           (b) With respect to each Company Employee Plan, the Company has\nfurnished to the Buyer, a complete and accurate copy of (i) such Company\nEmployee Plan (or a written summary of any unwritten plan), (ii) the most recent\nannual report (Form 5500) filed with the IRS, (iii) each trust agreement, group\nannuity contract and summary plan description, if any, relating to such Company\nEmployee Plan and (iv) all reports regarding the satisfaction of the\nnondiscrimination requirements of Sections 410(b), 401(k) and 401(m) of the\nCode.\n\n                                      20\n\n \n     (c)  Each Company Employee Plan has been administered in all material\nrespects in accordance with its terms and each of the Company, the Company's\nSubsidiaries and their ERISA Affiliates has in all material respects met its\nobligations with respect to such Company Employee Plan and has made all\nrequired contributions thereto. With respect to the Company Employee Plans, no\nevent has occurred, and to the knowledge of the Company, there exists no\ncondition or set of circumstances in connection with which the Company or any\nof its Subsidiaries could be subject to any liability under ERISA, the Code or\nany other applicable law which, individually or in the aggregate, would have a\nCompany Material Adverse Effect.\n\n     (d) With respect to the Company Employee Plans, there are no funded benefit\nobligations for which contributions have not been made or properly accrued and\nthere are no unfunded benefit obligations which have not been accounted for by\nreserves, or otherwise properly footnoted in accordance with generally accepted\naccounting principles, on the financial statements of the Company.\n\n     (e) All the Company Benefit Plans that are intended to be qualified under\nSection 401(a) of the Code have received determination letters from the Internal\nRevenue Service to the effect that such Company Benefit Plans are qualified and\nthe plans and trusts related thereto are exempt from federal income taxes under\nSections 401(a) and 501(a), respectively, of the Code, no such determination\nletter has been revoked and revocation has not been threatened, and no such\nEmployee Benefit Plan has been amended or operated since the date of its most\nrecent determination letter or application therefor in any respect, and no act\nor omission has occurred, that would adversely affect its qualification or\nmaterially increase its cost.\n\n     (f) Neither the Company, any Subsidiary of the Company nor any ERISA\nAffiliate has (i) ever maintained a Company Employee Plan which was ever subject\nto Section 412 of the Code or Title IV of ERISA or (ii) ever been obligated to\ncontribute to a \"multiemployer plan\" (as defined in Section 4001(a)(3) of\nERISA).  No Company Benefit Plan is funded by, associated with or related to a\n\"voluntary employee's beneficiary association\" within the meaning of Section\n501(c)(9) of the Code.\n\n     (g) Each Company Benefit Plan is amendable and terminable unilaterally by\nthe Company at any time without liability to the Company as a result thereof and\nno Company Benefit Plan, plan documentation or agreement, summary plan\ndescription or other written communication distributed generally to employees by\nits terms prohibits the Company from amending or terminating any such Company\nBenefit Plan.\n\n     (h) Except as disclosed in the Company SEC Reports filed prior to the date\nof this Agreement, neither the Company nor any of its Subsidiaries is a party to\nany oral or written (i) agreement with any stockholders, director, executive\nofficer or other key employee of the Company or any of its Subsidiaries (A) the\nbenefits of which are contingent, or the terms of which are materially altered,\nupon the occurrence of a transaction involving the Company or any of its\nSubsidiaries of the nature of any of the transactions contemplated by this\nAgreement, (B) providing any term of employment or compensation guarantee or (C)\nproviding severance benefits or other benefits after the termination of\nemployment of such director, executive officer or key employee; (ii) agreement,\nplan or arrangement under which any person may receive payments from the Company\nor any of its Subsidiaries that may be subject to the tax imposed by Section\n4999 of the Code or included in the determination of such person's \"parachute\npayment\" under Section 280G of the Code; and (iii) agreement or plan binding the\nCompany or any of its Subsidiaries, including any stock option plan, stock\nappreciation right plan, restricted stock plan, stock purchase plan or severance\nbenefit plan, any of the benefits of which will be increased, or the vesting of\nthe benefits of which will be accelerated, by the occurrence of any of the\ntransactions contemplated by this Agreement or the value of any of the benefits\nof which will be calculated on the basis of any of the transactions contemplated\nby this Agreement.\n\n     3.14  Compliance With Laws.  The Company and each of its Subsidiaries has\n           --------------------                                                \ncomplied with, is not in violation of, and has not received any notice alleging\nany violation with respect to, any applicable provisions of any statute, law or\nregulation with respect to the conduct of its business, or the ownership or\noperation of its properties or assets, except for failures to comply or\nviolations which, individually or in the aggregate, have not had, and would not\nhave, a Company Material Adverse Effect.\n\n     3.15  Permits.  The Company and each of its Subsidiaries have all permits,\n           -------                                                              \nlicenses and franchises from Governmental Entities required to conduct their\nbusinesses as now being conducted or as presently contemplated to be conducted\n(the \"Company Permits\"), except for such permits, licenses and franchises the\nabsence of which, individually or in the aggregate, have not resulted in, and\nwould not result in, a Company Material Adverse Effect.  The Company and its\nSubsidiaries are in compliance, in all material respects, with the terms of the\nCompany Permits.\n\n     3.16  Registration Statement; Proxy Statement\/Prospectus.  The information\n           --------------------------------------------------                   \nto be supplied by the Company for inclusion in the registration statement on\nForm S-4 pursuant to which shares of Buyer Common Stock issued in the Merger\nwill be registered under the Securities Act (the \"Registration Statement\"),\nshall not at the time the Registration Statement is declared effective by the\nSEC contain any untrue statement of a material fact or omit to state any\nmaterial fact required to be stated in the Registration Statement or necessary\nin order to make the statements in the Registration Statement, in light of the\ncircumstances under which they were made, not misleading.  The information to be\nsupplied by the Company for inclusion in the proxy statement\/prospectus (the\n\"Proxy Statement\") to be sent to the stockholders of the Company in connection\nwith the meeting of the Company's stockholders to consider this Agreement and\nthe Merger (the \"Company Meeting\") shall not, on the date the \n\n                                      21\n\n \nProxy Statement is first mailed to stockholders of the Company, at the time of\nthe Company Meeting and at the Effective Time, contain any statement which, at\nsuch time and in light of the circumstances under which it shall be made, is\nfalse or misleading with respect to any material fact, or omit to state any\nmaterial fact necessary in order to make the statements made in the Proxy\nStatement not false or misleading; or omit to state any material fact necessary\nto correct any statement in any earlier communication with respect to the\nsolicitation of proxies for the Company Meeting which has become false or\nmisleading. If at any time prior to the Effective Time any event relating to the\nCompany or any of its Affiliates, officers or directors should be discovered by\nthe Company which should be set forth in an amendment to the Registration\nStatement or a supplement to the Proxy Statement, the Company shall promptly\ninform the Buyer.\n\n     3.17  Labor Matters.  Neither the Company nor any of its Subsidiaries is a\n           -------------                                                        \nparty to or otherwise bound by any collective bargaining agreement, contract or\nother agreement or understanding with a labor union or labor organization.\nNeither the Company nor any of its Subsidiaries is the subject of any proceeding\nasserting that the Company or any of its Subsidiaries has committed an unfair\nlabor practice or is seeking to compel it to bargain with any labor union or\nlabor organization, nor is there pending or, to the knowledge of the Company,\nthreatened, any labor strike, dispute, walkout, work stoppage, slow-down or\nlockout involving the Company or any of its Subsidiaries.\n\n     3.18  Insurance.  Each of the Company and its Subsidiaries maintains the\n           ---------                                                           \ninsurance policies (the \"Insurance Policies\") set forth in Section 3.18 of the\nCompany Disclosure Schedule.  Each Insurance Policy is in full force and effect\nand is valid, outstanding and enforceable, and all premiums due thereon have\nbeen paid in full.  None of the Insurance Policies will terminate or lapse (or\nbe affected in any other materially adverse manner) by reason of the\ntransactions contemplated by this Agreement.  The Company and its Subsidiaries\nhave complied in all material respects with the provisions of each Insurance\nPolicy under which it is the insured party.  No insurer under any Insurance\nPolicy has canceled or generally disclaimed liability under any such policy or\nindicated any intent to do so or not to renew any such policy.  All material\nclaims under the Insurance Policies have been filed in a timely fashion.\n\n     3.19  Business Activity Restrictions.  There is no non-competition or \n           ------------------------------                                  \nother similar agreement, commitment, judgment, injunction, order to create to\nwhich the Company or any Subsidiary of the Company is a party or subject to that\nhas or could reasonably be expected to have the effect of prohibiting or\nimpairing the conduct of the business by the Company in any material respect.\nThe Company has not entered into any agreement under which it is restricted in\nany material respect from selling, licensing or otherwise distributing any of\nits technology or products, or providing services to, customers or potential\ncustomers or any class of customers, in any \n\n                                      22\n\n \ngeographic area, during any period of time or any segment of the market or line\nof business.\n\n     3.20  Year 2000 Compliance.\n           --------------------  \n\n           (a) The Company has conducted \"year 2000\" audits with respect to (i)\nall of the internal systems of the Company and each of its Subsidiaries used in\nthe business or operations of the Company or any of its Subsidiaries, including,\nwithout limitation, computer hardware systems, software applications, firmware,\nequipment firmware and other embedded systems, and (ii) the software, hardware,\nfirmware and other technology which constitute part of the products and services\nmarketed or sold by the Company or any of its Subsidiaries or licensed by the\nCompany or any of its Subsidiaries to third parties. The Company has obtained\n\"year 2000\" certificates with respect to all material third-party systems used\nin connection with the business or operations of the Company and its\nSubsidiaries.\n\n           (b) All of (i) the material internal systems of the Company and each\nof its Subsidiaries used in the business or operations of the Company or any of\nits Subsidiaries, as the case may be, including, without limitation, computer\nhardware systems, software applications, firmware, equipment containing embedded\nmicrochips and other embedded systems (collectively, the \"Company Systems\"), and\n(ii) the software, hardware, firmware and other technology which constitute part\nof the products and services marketed or sold by the Company or any of its\nSubsidiaries or licensed by the Company or any of its Subsidiaries to third\nparties (collectively, the \"Company Products\") are Year 2000 Compliant.\n\n           (c) The Company has no knowledge of any failure to be Year 2000\nCompliant of any material third-party system used in connection with the\nbusiness or operations of the Company and its Subsidiaries.\n\n           (d) For purposes of this Agreement, \"Year 2000 Compliant\" means that\nthe applicable system or item:\n\n               (i)  accurately receives, records, stores, provides, recognizes\nand processes all date and time data from, during, into and between the\ntwentieth and twenty-first centuries, the years 1999 and 2000 and all leap\nyears;\n\n               (ii) accurately performs all date-dependent calculations and\noperations (including, without limitation, mathematical operations, sorting,\ncomparing and reporting) from, during, into and between the twentieth and \ntwenty-first centuries, the years 1999 and 2000 and all leap years; and\n\n                                      23\n\n \n               (iii) does not malfunction, cease to function or provide invalid\nor incorrect results as a result of (x) the change of years from 1999 to 2000 or\nfrom 2000 to 2001, (y) date data, including date data which represents or\nreferences different centuries, different dates during 1999 and 2000, or more\nthan one century or (z) the occurrence of any particular date;\n\nin each case without human intervention, other than original data entry;\nprovided, in each case, that all applications, hardware and other systems used\nin conjunction with such system or item which are not owned or licensed by the\nCompany or any of its Subsidiaries correctly exchange date data with or provide\ndata to such system or item.\n\n           (e) Neither the Company nor any of its Subsidiaries has provided any\nguarantee or warranty for any product sold or licensed, or service provided, by\nthe Company or any Subsidiary to the effect that such product or service (i)\ncomplies with or accounts for the fact of the arrival of the year 2000, (ii)\nwill not be adversely affected with respect to functionality, interoperability,\nperformance or volume capacity (including, without limitation, the processing\nand reporting of data) by virtue of the arrival of the year 2000 or (iii) is\notherwise Year 2000 Compliant.\n\n     3.21  Assets.  Each of the Company and its Subsidiaries owns or leases all\n           ------                                                               \ntangible assets necessary for the conduct of its businesses as presently\nconducted and as presently proposed to be conducted.  All of such tangible\nassets which are owned, are owned free and clear of all mortgages, security\ninterest, pledges, liens and encumbrances (\"Liens\") except for (i) Liens which\nare disclosed in the Company SEC Reports filed prior to the date of this\nAgreement and (ii) other Liens which, individually and in the aggregate, do not\nmaterially interfere with the ability of the Company and its Subsidiaries to\nconduct their business as currently conducted and as presently proposed to be\nconducted and have not resulted in, and would not result in, a Company Material\nAdverse Effect.  The tangible assets of the Company and its Subsidiaries, taken\nas a whole, are free from material defects, have been maintained in accordance\nwith normal industry practice, are in good operating condition and repair\n(subject to normal wear and tear) and are suitable for the purpose for which\nthey are presently used.\n\n     3.22  Customers. No customer of the Company or any of its Subsidiaries \n           ---------                                                         \nthat represented 5% or more of the Company's consolidated revenues in the fiscal\nyear ended December 31, 1998 or in the six-month period ended June 30, 1999 has\nindicated to the Company or any of its Subsidiaries that it will stop, or\ndecrease the rate of, buying products or services from the Company or any of its\nSubsidiaries.\n\n     3.23  No Existing Discussions.   As of the date of this Agreement, neither\n           -----------------------                                             \nthe Company nor any of its Subsidiaries is engaged, directly or indirectly, in\nany \n\n                                      24\n\n \ndiscussions or negotiations with any other party with respect to an Alternative\nTransaction (as defined in Section 6.1).\n\n     3.24  Opinion of Financial Advisor.  The financial advisor of the Company,\n           ----------------------------                                         \nDeutsche Banc Alex. Brown, has delivered to the Company an opinion dated the\ndate of this Agreement to the effect, as of such date, that the Exchange Ratio\nis fair to the holders of the Company Common Stock from a financial point of\nview, a signed copy of which opinion has been delivered to the Buyer.\n\n     3.25  Section 203 of the DGCL Not Applicable.  The Board of Directors of\n           --------------------------------------                             \nthe Company has taken all actions necessary so that the restrictions contained\nin Section 203 of the DGCL applicable to a \"business combination\" (as defined in\nSection 203) will not apply to the execution, delivery or performance of this\nAgreement, the Company Stock Option Agreement, the Stockholder Agreements or the\nconsummation of the Merger or the other transactions contemplated by this\nAgreement, the Company Stock Option Agreement or the Stockholder Agreements.\n\n     3.26  Tax Matters.  To the Company's knowledge, after consulting with its\n           -----------                                                         \nindependent auditors, neither the Company nor any of its Affiliates has taken or\nagreed to take any action which would prevent the Merger from constituting a\ntransaction qualifying as a reorganization under Section 368(a) of the Code.\n\n     3.27  Transactions with Affiliates.  Except as disclosed in the Company SEC\n           ---------------------------                                       \nReports filed prior to the date of this Agreement, neither the Company nor any\nof its Subsidiaries has entered into any transaction with any director, officer\nor other affiliate of the Company or any of its Subsidiaries or any transaction\nthat would be subject to proxy statement disclosure pursuant to Item 404 of\nRegulation S-K.\n\n     3.28  Brokers; Schedule of Fees and Expenses.\n           --------------------------------------  \n\n           (a) No agent, broker, investment banker, financial advisor or other\nfirm or person is or will be entitled to any broker's, finder's, financial\nadvisor's or other similar fee or commission in connection with any of the\ntransactions contemplated by this Agreement, except Deutsche Banc Alex. Brown,\nwhose fees and expense will be paid by the Company. The Company has delivered to\nthe Buyer a complete and accurate copy of all agreements pursuant to which\nDeutsche Banc Alex. Brown is entitled to any fees and expenses in connection\nwith any of the transactions contemplated by this Agreement.\n\n           (b) Section 3.28(b) of the Company Disclosure Schedule sets forth a\ncomplete and accurate list of the estimated fees and expenses incurred and to be\nincurred by the Company and any of its Subsidiaries in connection with this\nAgreement \n\n                                      25\n\n \nand the transactions contemplated by this Agreement (including the fees and\nexpenses of Deutsche Banc Alex. Brown and of the Company's legal counsel and\naccountants).\n\n\n                                  ARTICLE IV\n                REPRESENTATIONS ANCD WARRANTIES OF THE BUYER AND\n                           THE TRANSITORY SUBSIDIARY\n\n     The Buyer and the Transitory Subsidiary represent and warrant to the\nCompany that the statements contained in this Article IV are true and correct,\nexcept as set forth herein or in the disclosure schedule delivered by the Buyer\nto the Company on or before the date of this Agreement (the \"Buyer Disclosure\nSchedule\"). The Buyer Disclosure Schedule shall be arranged in paragraphs\ncorresponding to the numbered and lettered paragraphs contained in this Article\nIV and the disclosure in any paragraph shall qualify other paragraphs in this\nArticle IV only to the extent that it is reasonably apparent from a reading of\nsuch document that it also qualifies or applies to such other paragraphs.\n\n     4.1  Organization, Standing and Power.  Each of the Buyer and the \n          --------------------------------      \nTransitory Subsidiary and the Buyer's other Subsidiaries is a corporation duly\norganized, validly existing and in good standing under the laws of the\njurisdiction of its incorporation, has all requisite corporate power and\nauthority to own, lease and operate its properties and assets and to carry on\nits business as now being conducted and as proposed to be conducted, and is duly\nqualified to do business and is in good standing as a foreign corporation in\neach jurisdiction in which the failure to be so qualified, individually or in\nthe aggregate, would be reasonably likely to have a material adverse effect on\nthe business, properties, financial condition, results of operations or\nprospects of the Buyer and its Subsidiaries, taken as a whole, or to have a\nmaterial adverse effect on the ability of the Buyer to consummate the\ntransactions contemplated by this Agreement, excluding any material adverse\neffect (a) demonstrably shown to have been proximately caused by the public\nannouncement of, this Agreement, the Buyer Stock Option Agreement or any of the\ntransactions contemplated thereby, or (b) arising or resulting from general\nindustry, economic or stock market conditions that affect the Buyer (or the\nmarkets in which the Buyer competes) in a manner not disproportionate to the\nmanner in which such conditions affect other companies in the industries or\nmarkets in which the Buyer competes.\n\n     4.2  Capitalization.  The authorized capital stock of the Buyer consists of\n          --------------\n400,000,000 shares of Buyer Common Stock and 5,000,000 shares of preferred\nstock, $.01 par value per share (the \"Buyer Preferred Stock\"), of which (i) 250\nshares are designated Series A Preferred Stock, (ii) 50,000 shares are\ndesignated Series B Preferred Stock, (iii) 375,000 shares have been designated\nas Series C Preferred Stock and (iv) 18,090.45 shares have been designated as\nSeries D Preferred Stock. As of the close of business on September 20, 1999,\n116,177,788 shares of Buyer Common Stock were issued and outstanding, and (i) no\nshares of Series A Preferred Stock, (ii) 35,000 shares of Series B Preferred\nStock (convertible into an aggregate of 1,384,538 shares of Buyer Common Stock),\n(iii) 375,000 shares of Series C Preferred Stock (convertible into an aggregate\nof 3,925,674 shares of Buyer Common Stock), and (iv) 18,090.45 \n\n                                      26\n\n \nshares of Series D Preferred Stock (convertible into an aggregate of 1,809,045\nshares of Buyer Common Stock) were issued and outstanding. All outstanding\nshares of Buyer Common Stock are, and all shares of Buyer Common Stock subject\nto issuance upon conversion of outstanding shares of Buyer Preferred Stock will\nbe, upon issuance, duly authorized, validly issued, fully paid and\nnonassessable. All of the shares of Buyer Common Stock issuable in connection\nwith the Merger, when issued in accordance with this Agreement, will be duly\nauthorized, validly issued, fully paid and nonassessable.\n\n     4.3  Authority; No Conflict; Required Filings and Consents.\n          -----------------------------------------------------  \n\n          (a) Each of the Buyer and the Transitory Subsidiary has all requisite\ncorporate power and authority to enter into this Agreement and to consummate the\ntransactions contemplated by this Agreement.  The execution and delivery of this\nAgreement and the consummation of the transactions contemplated by this\nAgreement by the Buyer and the Transitory Subsidiary have been duly authorized\nby all necessary corporate action on the part of each of the Buyer and the\nTransitory Subsidiary (including the approval of the Merger by the Buyer as the\nsole stockholder of the Transitory Subsidiary).  This Agreement and has been\nduly executed and delivered by each of the Buyer and the Transitory Subsidiary\nand constitutes the valid and binding obligation of each of the Buyer and the\nTransitory Subsidiary, enforceable in accordance with its terms.\n\n          (b) The execution and delivery of this Agreement by each of the Buyer\nand the Transitory Subsidiary does not, and the consummation of the transactions\ncontemplated by this Agreement will not, (i) conflict with, or result in any\nviolation or breach of, any provision of the Certificate of Incorporation or By-\nlaws of the Buyer or the Transitory Subsidiary, (ii) conflict with, or result in\nany violation or breach of, or constitute (with or without notice or lapse of\ntime, or both) a default (or give rise to a right of termination, cancellation\nor acceleration of any obligation or loss of any material benefit) under, or\nrequire a consent or waiver under, any of the terms, conditions or provisions of\nany note, bond, mortgage, indenture, lease, license, contract or other\nagreement, instrument or obligation to which the Buyer or any of its\nSubsidiaries is a party or by which any of them or any of their properties or\nassets may be bound, or (iii) subject to compliance with the requirements\nspecified in clause (i), (ii), (iii), (iv), (v) and (vi) of Section 4.3(c),\nconflict with or violate any permit, concession, franchise, license, judgment,\ninjunction, order, decree, statute, law, ordinance, rule or regulation\napplicable to the Buyer or any of its Subsidiaries or any of its or their\n\n                                      27\n\n \nproperties or assets, except in the case of (ii) and (iii) for any such\nconflicts, violations, breaches, defaults, terminations, cancellations or\naccelerations which, individually or in the aggregate, are not reasonably likely\nto have a Buyer Material Adverse Effect.\n\n          (c) No consent, approval, license, permit, order or authorization of,\nor registration, declaration, notice or filing with, any Governmental Entity is\nrequired by or with respect to the Buyer or any of its Subsidiaries in\nconnection with the execution and delivery of this Agreement by the Buyer or the\nTransitory Subsidiary or the consummation of the transactions contemplated by\nthis Agreement, except for (i) the filing of a pre-merger notification report\nunder the HSR Act, (ii) the filing of the Certificate of Merger with the\nDelaware Secretary of State, (iii) the filing of the Registration Statement with\nthe SEC in accordance with the Securities Act, (iv) the filings of such reports\nor schedules under Section 13 of the Exchange Act as may be required in\nconnection with this Agreement and the transactions contemplated hereby, (v)\nsuch consents, approvals, orders, authorizations, registrations, declarations\nand filings as may be required under applicable state securities laws and (vi)\nthe filing with the Nasdaq National Market of a Notification Form for Listing of\nAdditional Shares with respect to the Buyer Common Stock issuable in connection\nwith the Merger.\n\n     4.4  SEC Filings; Financial Statements.\n          ---------------------------------  \n\n          (a) The Buyer has filed and made available to the Company all forms,\nreports and other documents required to be filed by the Buyer with the SEC since\nJanuary 1, 1998.  All such required forms, reports and other documents\n(including those that the Buyer may file after the date hereof until the\nClosing) are referred to herein as the \"Buyer SEC Reports.\"  The Buyer SEC\nReports (i) were or will be filed on a timely basis, (ii) were or will be\nprepared in compliance in all material respects with the applicable requirements\nof the Securities Act and the Exchange Act, as the case may be, and the rules\nand regulations of the SEC thereunder applicable to such Buyer SEC Reports, and\n(iii) did not or will not at the time they were or are filed contain any untrue\nstatement of a material fact or omit to state a material fact required to be\nstated in such Buyer SEC Reports or necessary in order to make the statements in\nsuch Buyer SEC Reports, in the light of the circumstances under which they were\nmade, not misleading.\n\n          (b) Each of the consolidated financial statements (including, in each\ncase, any related notes and schedules) contained or to be contained in the Buyer\nSEC Reports (i) complied or will comply as to form in all material respects with\napplicable accounting requirements and the published rules and regulations of\nthe SEC with respect thereto, (ii) were or will be prepared in accordance with\ngenerally accepted accounting principles applied on a consistent basis\nthroughout the periods involved (except as may be indicated in the notes to such\nfinancial statements or, in the case of unaudited statements, as permitted by\nthe SEC on Form 10-Q under the Exchange Act) \n\n                                      28\n\n \nand (iii) fairly presented or will fairly present the consolidated financial\nposition of the Buyer and its Subsidiaries as of the dates and the consolidated\nresults of its operations and cash flows for the periods indicated, consistent\nwith the books and records of the Buyer and its Subsidiaries, except that the\nunaudited interim financial statements were or are subject to normal and\nrecurring year-end adjustments which were not or are not expected to be material\nin amount. The unaudited balance sheet of the Buyer as of April 30, 1999 is\nreferred to herein as the \"Buyer Balance Sheet.\"\n\n     4.5  Absence of Certain Changes or Events.  Except as disclosed in the\n          ------------------------------------                              \nBuyer SEC Reports filed prior to the date of this Agreement, since the date of\nthe Buyer Balance Sheet, there has not been any event, change or development in\nthe business, properties, financial condition, results of operations or\nprospects of the Buyer and its Subsidiaries, taken as a whole, which has had, or\nis reasonably likely to have, a Buyer Material Adverse Effect.\n\n     4.6  Tax Matters.  To the Buyer's knowledge, after consulting with its\n          -----------                                                       \nindependent auditors, neither the Buyer nor any of its Affiliates has taken or\nagreed to take any action which would prevent the Merger from constituting a\ntransaction qualifying as a reorganization under Section 368(a) of the Code.\n\n     4.7  Litigation.  Except as disclosed in the Buyer SEC Reports filed prior\n          ----------                                                            \nto the date of this Agreement, there is no action, suit, proceeding, claim,\narbitration or investigation pending or, to the knowledge of the Buyer,\nthreatened against or affecting the Buyer or any of its Subsidiaries which,\nindividually or in the aggregate, has had, or is reasonably likely to have, a\nBuyer Material Adverse Effect.  There are no judgments, orders or decrees\noutstanding against the Buyer.\n\n     4.8  Compliance with Laws.  Each of the Buyer and the Transitory \n          --------------------                                        \nSubsidiary has complied with, is not in violation of, and has not received any\nnotice alleging any violation with respect to, any applicable provisions of any\nstatute, law or regulation with respect to the conduct of its business, or the\nownership or operation of its properties or assets, except for failures to\ncomply or violations which, individually or in the aggregate, have not had, and\nwould not have, a Buyer Material Adverse Effect.\n\n     4.9  Registration Statement; Proxy Statement\/Prospectus.  The information\n          --------------------------------------------------                   \nin the Registration Statement (except for information supplied by the Company\nfor inclusion in the Registration Statement, as to which the Buyer makes no\nrepresentation and which shall not constitute part of the Buyer SEC Report for\npurposes of this Agreement) shall not at the time the Registration Statement is\ndeclared effective by the SEC contain any untrue statement of a material fact or\nomit to state any material fact required to be stated in the Registration\nStatement or necessary in order to make the statements in the Registration\nStatement, in light of the circumstances under which they were made, not\nmisleading.  If at any time prior to the Effective Time any event relating \n\n                                      29\n\n \nto the Buyer or any of its Affiliates, officers or directors should be\ndiscovered by the Buyer which should be set forth in an amendment to the\nRegistration Statement, the Buyer shall promptly inform the Company.\n\n     4.10  Operations of the Transitory Subsidiary.  The Transitory Subsidiary\n           ---------------------------------------                             \nwas formed solely for the purpose of engaging in the transactions contemplated\nby this Agreement, has engaged in no other business activities and has conducted\nits operations only as contemplated by this Agreement.\n\n\n                                   ARTICLE V\n                              CONDUCT OF BUSINESS\n\n     5.1  Covenants of the Company.  Except as expressly provided herein or in\n          ------------------------                                             \nSection 5.1 of the Company Disclosure Schedule, as consented to in writing by\nthe Buyer, from and after the date of this Agreement until the earlier of the\ntermination of this Agreement in accordance with its terms or the Effective\nTime, the Company shall, and shall cause each of its Subsidiaries to, act and\ncarry on its business in the usual, regular and ordinary course in substantially\nthe same manner as previously conducted, pay its debts and Taxes and perform its\nother obligations when due (subject to good faith disputes over such debts,\nTaxes or obligations), and use all reasonable efforts, consistent with past\npractices, to maintain and preserve its and each Subsidiary's business\norganization, assets and properties, and preserve its advantageous business\nrelationships with customers, suppliers, distributors and others having business\ndealings with it.  Without limiting the generality of the foregoing, from and\nafter the date of this Agreement until the earlier of the termination of this\nAgreement in accordance with its terms or the Effective Time, the Company shall\nnot, and shall not permit any of its Subsidiaries to, directly or indirectly, do\nany of the following without the prior written consent of the Buyer:\n\n          (a) (A)  declare, set aside or pay any dividends on, or make any other\ndistributions (whether in cash, securities or other property) in respect of, any\nof its capital stock (other than dividends and distributions by a direct or\nindirect wholly owned subsidiary of the company to its parent); (B) split,\ncombine or reclassify any of its capital stock or issue or authorize the\nissuance of any other securities in respect of, in lieu of or in substitution of\nshares of its capital stock; or (C) purchase, redeem or otherwise acquire any\nshares of its capital stock or any other securities thereof or any rights,\nwarrants or options to acquire any such shares or other securities;\n\n          (b) issue, deliver, sell, grant, pledge or otherwise dispose of or\nencumber any shares of its capital stock, any other voting securities or any\nsecurities convertible into or exchangeable for, or any rights, warrants or\noptions to acquire, any such shares, voting securities or convertible or\nexchangeable securities (other than the \n\n                                      30\n\n \nissuance of shares of Company Common Stock upon the exercise of Company Options\nor Company Warrants outstanding on the date of this Agreement in accordance with\ntheir present terms) and granting of options to new employees in the ordinary\ncourse of business for an aggregate number of shares of Company Common Stock\nequal to 200,000 (\"Permitted New Options\");\n\n     (c) amend its certificate of incorporation, by-laws or other comparable\ncharter or organizational documents, except as expressly provided by this\nAgreement;\n\n     (d) acquire (A) by merging or consolidating with, or by purchasing a\nsubstantial portion of the assets or any stock of, or by any other manner, any\nbusiness or any corporation, partnership, joint venture, limited liability\ncompany, association or other business organization or division thereof or (B)\nany assets that are material, in the aggregate, to the Company and the\nSubsidiaries, taken as a whole, except purchases of inventory in the ordinary\ncourse of business consistent with past practice;\n\n     (e) except in the ordinary course of business consistent with past\npractice, sell, lease, license, pledge, or otherwise dispose of or encumber any\nproperties or assets of the Company or of any of its Subsidiaries;\n\n     (f) whether or not in the ordinary course of business or consistent with\npast practice, sell or dispose of any assets material to the Company and its\nSubsidiaries, taken as a whole (including any accounts, leases, contracts or\nintellectual property or any assets or the stock of any Subsidiaries, but\nexcluding the sale of products in the ordinary course of business consistent\nwith past practice);\n\n     (g) adopt or implement any stockholder rights plan;\n\n     (h) except as permitted by Section 6.1, enter into an agreement with\nrespect to any merger, consolidation, liquidation or business combination, or\nany acquisition or disposition of all or substantially all of the assets or\nsecurities of the Company or any of its Subsidiaries;\n\n     (i) (A) incur or suffer to exist any indebtedness for borrowed money other\nthan such indebtedness which existed as of June 30, 1999 as reflected on the\nCompany Balance Sheet or guarantee any such indebtedness of another person, (B)\nissue or sell any debt securities or warrants or other rights to acquire any\ndebt securities of the Company or any of its Subsidiaries, guarantee any debt\nsecurities of another person, enter into any \"keep well\" or other agreement to\nmaintain any financial statement condition of another person or enter into any\narrangement having the economic effect of any of the foregoing, or (C) make any\nloans, advances (other than routine advances to employees of the company in the\nordinary course of business \n\n                                      31\n\n \nconsistent with post practice) or capital contributions to, or investment in,\nany other person;\n\n     (j) make any capital expenditures or expenditures with respect to property,\nplant or equipment in excess of $2,000,000 in the aggregate for the Company and\nits Subsidiaries, taken as a whole;\n\n     (k) make any changes in accounting methods, principles or practices, except\ninsofar as may have been required by a change in generally accepted accounting\nprinciples or, except as so required, change any assumption underlying, or\nmethod of calculating, any bad debt, contingency or other reserve;\n\n     (l) (A) pay, discharge, settle or satisfy any claims, liabilities or\nobligations (absolute, accrued, asserted or unasserted, contingent or\notherwise), other than the payment, discharge or satisfaction, in the ordinary\ncourse of business consistent with past practice or in accordance with their\nterms, of liabilities reflected or reserved against in, or contemplated by, the\nmost recent consolidated financial statements (or the notes thereto) of the\nCompany included in the Company SEC Reports filed prior to the date of this\nAgreement (to the extent so reflected or reserved against) or incurred\nthereafter in the ordinary course of business consistent with past practice, or\n(B) waive any material benefits of any confidentiality, standstill or similar\nagreements to which the Company or any of its Subsidiaries is a party;\n\n     (m) modify, amend or terminate any material contract or agreement to which\nthe Company or any of its Subsidiaries is party, or knowingly waive, release or\nassign any material rights or claims (including any write-off or other\ncompromise of any accounts receivable of the Company of any of its\nSubsidiaries);\n\n     (n) (A) except in the ordinary course of business consistent with past\npractice enter into any material contract or agreement or (B) license any\nmaterial intellectual property rights to or from any third party;\n\n     (o) except as required to comply with applicable law or agreements, plans\nor arrangements existing on the date hereof, (A) adopt, enter into, terminate or\namend any employment, severance or similar agreement or benefit plan for the\nbenefit or welfare of any current or former director, officer or employee or any\ncollective bargaining agreement, (B) increase in any material respect the\ncompensation or fringe benefits of, or pay any bonus to, any director, officer\nor key employee, (C) accelerate the payment, right to payment or vesting of any\ncompensation or benefits, including any outstanding options or restricted stock\nawards, (D) pay any material benefit not provided for as of the date of this\nAgreement under any benefit plan, (E) grant any awards under any bonus,\nincentive, performance or other compensation plan or arrangement or benefit plan\n(including the grant of stock options, stock appreciation \n\n                                      32\n\n \nrights, stock based or stock related wards, performance units or restricted\nstock, or the removal of existing restrictions in any benefit plans or\nagreements or awards made thereunder), or (F) take any action other than in the\nordinary course of business consistent with past practice to fund or in any\nother way secure the payment of compensation or benefits under any employee\nplan, agreement, contract or arrangement or benefit plan, except for the grant\nof Permitted New Options;\n\n          (p) make or rescind any Tax election, settle or compromise any Tax\nliability or amend any Tax return;\n\n          (q) initiate, compromise or settle any material litigation or\narbitration proceeding;\n\n          (r) close any material facility or office;\n\n          (s) invest funds in debt securities or other instruments maturing more\nthan 90 days after the date of investment;\n\n          (t) fail to pay accounts payable and other obligations in the ordinary\ncourse of business consistent with past practice; or\n\n          (u) authorize any of, or commit or agree, in writing or otherwise, to\ntake any of, the foregoing actions or any action which would make any\nrepresentation or warranty in Article III untrue or incorrect in any material\nrespect, or would materially impair or prevent the occurrence of any conditions\nArticle VII hereof.\n\n     5.2  Cooperation.  Subject to compliance with applicable law, from and\n          -----------                                                       \nafter the date of this Agreement and continuing until the earlier of the\ntermination of this Agreement in accordance with its terms or the Effective\nTime, the Company and each of its Subsidiaries shall make its officers available\nto confer on a regular and frequent basis with one or more representatives of\nthe Buyer to report on the general status of ongoing operations and shall\npromptly provide the Buyer or its counsel with copies of all filings made by\nsuch party with any Governmental Entity in connection with this Agreement, the\nMerger and the transactions contemplated hereby.\n\n     5.3  Confidentiality.  The parties acknowledge that the Buyer and the\n          ---------------                                                  \nCompany have previously executed a Mutual Confidentiality Agreement, dated as of\nSeptember 21, 1999 (the \"Confidentiality Agreement\"), which Confidentiality\nAgreement will continue in full force and effect in accordance with its terms,\nexcept as expressly modified herein.\n\n                                      33\n\n \n                                   ARTICLE VI\n                             ADDITIONAL AGREEMENTS\n\n     6.1  No Solicitation.\n          ---------------  \n\n          (a) From and after the date of this Agreement until the earlier of the\ntermination of this Agreement in accordance with its terms or the Effective\nTime, the Company and its Subsidiaries shall not, directly or indirectly,\nthrough any officer, director, employee, financial advisor, representative or\nagent (i) solicit, initiate, or encourage any inquiries or proposals that\nconstitute, or could reasonably be expected to lead to, an Alternative\nTransaction (as defined below), other than the transactions contemplated by this\nAgreement, (ii) engage in negotiations or discussions concerning, or provide any\nnon-public information to any person or entity relating to, any Alternative\nTransaction, or (iii) agree to or recommend any Alternative Transaction;\nprovided, however, that, if the Company has not breached this Section 6.1,\n-------- --------                                                         \nnothing contained in this Agreement shall prevent the Company or its Board of\nDirectors, from:\n\n              (A) furnishing non-public information to, or entering into\ndiscussions or negotiations with, any person or entity in connection with an\nunsolicited bona fide written proposal for an Alternative Transaction by such\nperson or entity or recommending an unsolicited bona fide written Alternative\nTransaction to the stockholders of the Company, if and only to the extent that\n\n                  (1) the Board of Directors of the Company believes in good\nfaith (after consultation with its financial advisor) that such Alternative\nTransaction is reasonably capable of being completed on the terms proposed and\nwould, if consummated, result in a transaction more favorable than the\ntransaction contemplated by this Agreement (any such more favorable Alternative\nTransaction being referred to in this Agreement as a \"Superior Proposal\") and\nthe Company's Board of Directors determines in good faith after consultation\nwith outside legal counsel that failure to take such action would be reasonably\nlikely to constitute a breach of its fiduciary duties to stockholders under\napplicable law,\n\n                  (2) prior to furnishing such non-public information to, or\nentering into discussions or negotiations with, such person or entity, such\nBoard of Directors receives from such person or entity an executed\nconfidentiality agreement with terms no less favorable to such party than those\ncontained in the Confidentiality Agreement, and\n\n                  (3) prior to recommending a Superior Proposal, the Company\nshall provide the Buyer with at least five business days' prior notice of its\nproposal to do so, during which time the Buyer may make, and in such event the\nCompany shall consider, a counterproposal to such Superior Proposal, and the\n\n                                      34\n\n \nCompany shall itself and shall cause its financial and legal advisors to\nnegotiate in good faith on its behalf with the Buyer with respect to the terms\nand conditions of such counterproposal; or\n\n          (B) complying with Rule 14d-9 and 14e-2 promulgated under the Exchange\nAct with regard to an Alternative Transaction.\n\nAs used in this Agreement, \"Alternative Transaction\" means either (i) a\ntransaction pursuant to which any person (or group of persons) other than the\nBuyer or its affiliates (a \"Third Party\"), acquires more than 20% of the\noutstanding shares of the Company Common Stock pursuant to a tender offer or\nexchange offer or otherwise, (ii) a merger or other business combination\ninvolving the Company pursuant to which any Third Party acquires more than 20%\nof the outstanding shares of Company Common Stock or of the entity surviving\nsuch merger or business combination, (iii) any other transaction pursuant to\nwhich any Third Party acquires control of assets (including for this purpose the\noutstanding equity securities of Subsidiaries of the Company, and the entity\nsurviving any merger or business combination including any of them) of the\nCompany having a fair market value equal to more than 20% of the fair market\nvalue of all the assets of the Company immediately prior to such transaction, or\n(iv) any public announcement by a Third Party of a proposal, plan or intention\nto do any of the foregoing or any agreement to engage in any of the foregoing.\n\n     (b) The Company will immediately cease any and all existing activities,\ndiscussions or negotiations with any parties conducted heretofore of the nature\ndescribed in Section 6.1(a) and will use reasonable efforts to obtain the return\nof any confidential information furnished to any such parties.\n\n     (c) The Company shall notify the Buyer immediately (but in any event,\nwithin 24 hours) after receipt by the Company (or its advisors) of any proposal\nfor an Alternative Transaction or any request for nonpublic information in\nconnection with an Alternative Transaction or for access to the properties,\nbooks or records of the Company by any person or entity that informs the Company\nthat it is considering making, or has made, an Alternative Transaction.  Such\nnotice shall be made orally and in writing and shall indicate in reasonable\ndetail the identity of the offer or and the terms and conditions of such\nproposal, inquiry or contact.  The Company shall continue to keep the Buyer\ninformed, on a current basis, of the status of any such discussions or\nnegotiations and the terms being discussed or negotiated.\n\n     (d) Nothing in this Section 6.1 shall (i) permit the Company to terminate\nthis Agreement (except as specifically provided in Section 8.1 hereof), (ii)\npermit the Company to enter into any agreement with respect to an Alternative\nTransaction during the term of this Agreement (it being agreed that during the\nterm of this Agreement, the Company shall not enter into any agreement with any\nperson that \n\n                                      35\n\n \nprovides for, or in any way facilitates, an Alternative Transaction (other than\na confidentiality agreement of the type referred to in Section 6.1(a) above)) or\n(iii) affect any other obligation of the Company under this Agreement.\n\n     6.2  Proxy Statement\/Prospectus; Registration Statement.\n          --------------------------------------------------  \n\n          (a) As promptly as practicable after the execution of this Agreement,\nthe Buyer and the Company shall prepare and the Company shall file with the SEC\nthe Proxy Statement, and the Buyer shall prepare and file with the SEC the\nRegistration Statement, in which the Proxy Statement will be included as a\nprospectus, provided that the Buyer may delay the filing of the Registration\nStatement until approval of the Proxy Statement by the SEC. The Buyer and the\nCompany shall use reasonable efforts to cause the Registration Statement to\nbecome effective as soon after such filing as practicable. Each of the Buyer and\nthe Company will respond to any comments of the SEC and will use its respective\nreasonable efforts to have the Proxy Statement cleared by the SEC and the\nRegistration Statement declared effective under the Securities Act as promptly\nas practicable after such filings and the Company will cause the Proxy Statement\nand the prospectus contained within the Registration Statement to be mailed to\nits stockholders at the earliest practicable time after both the Proxy Statement\nis cleared by the SEC and the Registration Statement is declared effective under\nthe Securities Act. Each of the Buyer and the Company will notify the other\npromptly upon the receipt of any comments from the SEC or its staff or any other\ngovernment officials and of any request by the SEC or its staff or any other\ngovernment officials for amendments or supplements to the Registration\nStatement, the Proxy Statement or any filing pursuant to Section 6.2(b) or for\nadditional information and will supply the other with copies of all\ncorrespondence between such party or any of its representatives, on the one\nhand, and the SEC, or its staff or any other government officials, on the other\nhand, with respect to the Registration Statement, the Proxy Statement, the\nMerger or any filing pursuant to Section 6.2(b). Each of the Buyer and the\nCompany will cause all documents that it is responsible for filing with the SEC\nor other regulatory authorities under this Section 6.2 to comply in all material\nrespects with all applicable requirements of law and the rules and regulations\npromulgated thereunder. Whenever any event occurs which is required to be set\nforth in an amendment or supplement to the Proxy Statement, the Registration\nStatement or any filing pursuant to Section 6.2(b), the Buyer or the Company, as\nthe case may be, will promptly inform the other of such occurrence and cooperate\nin filing with the SEC or its staff or any other government officials, and\/or\nmailing to stockholders of the Company, such amendment or supplement.\n\n     (b) The Buyer and the Company shall make all necessary filings with respect\nto the Merger under the Securities Act, the Exchange Act, applicable state blue\nsky laws and the rules and regulations thereunder.\n\n                                      36\n\n \n     6.3  Nasdaq Quotation.  The Company agrees to continue the quotation of\n          ----------------                                                   \nthe Company Common Stock on the Nasdaq National Market during the term of this\nAgreement.\n\n     6.4  Access to Information.  The Company shall (and shall cause each of its\n          ---------------------                                              \nSubsidiaries to) afford to the Buyer's officers, employees, accountants, counsel\nand other representatives, reasonable access, during normal business hours\nduring the period prior to the Effective Time, to all its properties, books,\ncontracts, commitments, personnel and records and, during such period, the\nCompany shall (and shall cause each of its Subsidiaries to) furnish promptly to\nthe Buyer (a) a copy of each report, schedule, registration statement and other\ndocument filed or received by it during such period pursuant to the requirements\nof federal or state securities laws and (b) all other information concerning its\nbusiness, properties, assets and personnel as the Buyer may reasonably request.\nUnless otherwise required by law, the Buyer will hold any such information which\nis nonpublic in confidence in accordance with the Confidentiality Agreement. No\ninformation or knowledge obtained in any investigation pursuant to this Section\nor otherwise shall affect or be deemed to modify any representation or warranty\ncontained in this Agreement or the conditions to the obligations of the parties\nto consummate the Merger.\n\n     6.5  Stockholders Meeting's; Lock-Up Agreements.\n          --------------------                        \n\n          (a) The Company, acting through its Board of Directors, shall, subject\nto and according to applicable law and its Certificate of Incorporation and By-\nlaws, promptly and duly call, give notice of, convene and hold as soon as\npracticable following the date on which the Registration Statement becomes\neffective the Company Meeting for the purpose of voting to approve and adopt\nthis Agreement and the Merger (the \"Company Voting Proposal\"). The Board of\nDirectors of the Company shall (i) recommend approval and adoption of the\nCompany Voting Proposal by the stockholders of the Company and include in the\nProxy Statement such recommendation and (ii) take all reasonable and lawful\naction to solicit and obtain such approval; provided, however, that in response\nto a proposal for an Alternative Transaction the Board of Directors of the\nCompany may withdraw such recommendation if (but only if) (i) the Board of\nDirectors of the Company has received a Superior Proposal, (ii) such Board of\nDirectors upon advice of its outside legal counsel determines that failure to\nrecommend such Superior Proposal to the stockholders of the Company would be\nreasonably likely to constitute a breach of its fiduciary duties under\napplicable law, and (iii) the Company has complied with the provisions of\nSection 6.1.\n\n          (b) The Company shall call and hold the Company Meeting for the\npurpose of voting upon the approval of this Agreement and the Merger whether its\nBoard of Directors at any time subsequent to the date hereof determines that\nthis \n\n                                      37\n\n \nAgreement is no longer advisable or recommends that the Company's stockholders\nreject it.\n\n          (c) The stockholders of the Company listed on Section 6.5(c) of the\nCompany Disclosure Schedule have each executed and delivered a Stockholder\nAgreement to the Buyer concurrently with the signing of this Agreement.\n\n          (d) The Company shall use its reasonable best efforts to cause the\nemployees of the Company designated on Section 6.5(d) of the Company Disclosure\nSchedule to execute and deliver to the Buyer (i) an Employee Lock-Up Agreement\nand (ii) a Non-Compete Agreement (in a form agreed upon by the Buyer and the\nCompany).  The stockholders of the Company designated on Section 6.5(d) of the\nCompany Disclosure Schedule have each executed and delivered a Stockholder Lock-\nUp Agreement to the Buyer.\n\n     6.6  Legal Conditions to the Merger.\n          ------------------------------  \n\n          (a) Subject to the terms hereof, the Company and the Buyer shall each\nuse its reasonable efforts to (i) take, or cause to be taken, all actions, and\ndo, or cause to be done, and to assist and cooperate with the other parties in\ndoing, all things necessary, proper or advisable to consummate and make\neffective the transactions contemplated hereby as promptly as practicable, (ii)\nobtain from any Governmental Entity or any other third party any consents,\nlicenses, permits, waivers, approvals, authorizations, or orders required to be\nobtained or made by the Company or the Buyer or any of their Subsidiaries in\nconnection with the authorization, execution and delivery of this Agreement and\nthe consummation of the transactions contemplated hereby, (iii) as promptly as\npracticable, make all necessary filings, and thereafter make any other required\nsubmissions, with respect to this Agreement and the Merger required under (A)\nthe Securities Act and the Exchange Act, and any other applicable federal or\nstate securities laws, (B) the HSR Act and any related governmental request\nthereunder, and (C) any other applicable law and (iv) execute or deliver any\nadditional instruments necessary to consummate the transactions contemplated by,\nand to fully carry out the purposes of, this Agreement. The Company and the\nBuyer shall cooperate with each other in connection with the making of all such\nfilings, including providing copies of all such documents to the non-filing\nparty and its advisors prior to filing and, if requested, to accept all\nreasonable additions, deletions or changes suggested in connection therewith.\nThe Company and the Buyer shall use their respective reasonable efforts to\nfurnish to each other all information required for any application or other\nfiling to be made pursuant to the rules and regulations of any applicable law\n(including all information required to be included in the Proxy Statement and\nthe Registration Statement) in connection with the transactions contemplated by\nthis Agreement.\n\n                                      38\n\n \n          (b) Subject to the terms hereof, the Buyer and the Company agree, and\nshall cause each of their respective Subsidiaries, to cooperate and to use their\nrespective reasonable efforts to obtain any government clearances or approvals\nrequired for Closing under the HSR Act, the Sherman Act, as amended, the Clayton\nAct, as amended, the Federal Trade Commission Act, as amended, and any other\nfederal, state or foreign law or, regulation or decree designed to prohibit,\nrestrict or regulate actions for the purpose or effect of monopolization or\nrestraint of trade (collectively \"Antitrust Laws\"), to respond to any government\nrequests for information under any Antitrust Law, and to contest and resist any\naction, including any legislative, administrative or judicial action, and to\nhave vacated, lifted, reversed or overturned any decree, judgment, injunction or\nother order (whether temporary, preliminary or permanent) (an \"Antitrust Order\")\nthat restricts, prevents or prohibits the consummation of the Merger or any\nother transactions contemplated by this Agreement under any Antitrust Law. The\nparties hereto will consult and cooperate with one another, and consider in good\nfaith the views of one another, in connection with any analyses, appearances,\npresentations, memoranda, briefs, arguments, opinions and proposals made or\nsubmitted by or on behalf of any party hereto in connection with proceedings\nunder or relating to any Antitrust Law. The Buyer shall be entitled to direct\nany proceedings or negotiations with any Governmental Entity relating to any of\nthe foregoing, provided that it shall afford the Company a reasonable\nopportunity to participate therein. Notwithstanding anything to the contrary in\nthis Section, neither the Buyer nor any of its Subsidiaries shall be required to\n(i) divest any of their respective businesses, product lines or assets, or to\ntake or agree to take any other action or agree to any limitation, that could\nreasonably be expected to have a material adverse effect on the Buyer or on the\nBuyer combined with the Company after the Effective Time or (ii) take any action\nunder this Section if the United States Department of Justice or the United\nStates Federal Trade Commission authorizes its staff to seek a preliminary\ninjunction or restraining order to enjoin consummation of the Merger.\n\n          (c) Each of the Company and the Buyer shall give (or shall cause their\nrespective Subsidiaries to give) any notices to third parties, and use, and\ncause their respective Subsidiaries to use, their reasonable efforts to obtain\nany third party consents related to or required in connection with the Merger\nthat are (A) necessary to consummate the transactions contemplated hereby, (B)\ndisclosed or required to be disclosed in the Company Disclosure Schedule or the\nBuyer Disclosure Schedule, as the case may be, or (C) required to prevent a\nCompany Material Adverse Effect or a Buyer Material Adverse Effect from\noccurring prior to or after the Effective Time.\n\n     6.7  Public Disclosure.  The Buyer and the Company shall each use its\n          -----------------                                                \nreasonable efforts to consult with the other before issuing any press release or\notherwise making any public statement with respect to the Merger or this\nAgreement and shall not issue any such press release or make any such public\nstatement prior to using such efforts, except as may be required by law.\n\n                                      39\n\n \n     6.8  Tax-Free Reorganization.  The Buyer and the Company shall each use\n          -----------------------                                            \nits reasonable efforts to cause the Merger to be treated as a reorganization\nwithin the meaning of Section 368(a) of the Code.  The parties hereto hereby\nadopt this Agreement as a plan of reorganization.\n\n     6.9  Affiliate Agreements.  Upon the execution of this Agreement, the\n          --------------------                                             \nCompany will provide the Buyer with a list of those persons who are, in the\nCompany's reasonable judgment, \"affiliates\" of the Company, within the meaning\nof Rule 145 (each such person who is an \"affiliate\" of the Company within the\nmeaning of Rule 145 is referred to as an \"Affiliate\") promulgated under the\nSecurities Act (\"Rule 145\").  The Company shall provide to the Buyer such\ninformation and documents as the Buyer shall reasonably request for purposes of\nreviewing such list and shall notify the Buyer in writing regarding any change\nin the identity of its Affiliates prior to the Closing Date.  The Company shall\nuse its reasonable efforts to deliver or cause to be delivered to the Buyer by\nOctober 21, 1999 (and in any case prior to the mailing of the Proxy Statement)\nfrom each of its Affiliates, an executed Affiliate Agreement, in substantially\nthe form appended hereto as Exhibit D (the \"Affiliate Agreement\").  The Buyer\n                            ---------                                        \nshall be entitled to place appropriate legends on the certificates evidencing\nany shares of Buyer Common Stock to be received by Rule 145 Affiliates of the\nCompany pursuant to the terms of this Agreement, and to issue appropriate stop\ntransfer instructions to the transfer agent for the Buyer Common Stock (provided\nthat such legends or stop transfer instructions shall be removed, two years\nafter the Effective Date, upon the request of any stockholder that is not then\nan Affiliate of the Buyer).\n\n     6.10 Nasdaq National Market Listing.  The Buyer shall file with the\n          ------------------------------                                 \nNasdaq National Market a Notification Form for Listing of Additional Shares with\nrespect to the Buyer Common Stock issuable in connection with the Merger.\n\n     6.11 Company Stock Plans and the Company Warrants.\n          --------------------------------------------  \n\n          (a) At the Effective Time, each outstanding Company Stock Option under\nCompany Stock Plans, whether vested or unvested, shall be deemed to constitute\nan option to acquire, on the same terms and conditions as were applicable under\nthe Company Stock Option immediately prior to the Effective Time, the same\nnumber of shares of Buyer Common Stock as the holder of the Company Stock Option\nwould have been entitled to receive pursuant to the Merger had such holder\nexercised such option in full immediately prior to the Effective Time (rounded\ndown to the nearest whole number), at a price per share (rounded up to the\nnearest whole cent) equal to (y) the aggregate exercise price for the shares of\nCompany Common Stock purchasable pursuant to the Company Stock Option\nimmediately prior to the Effective Time divided by (z) the number of full shares\nof Buyer Common Stock deemed purchasable pursuant to the Company Stock Option in\naccordance with the foregoing.\n\n                                      40\n\n \n           (b) As soon as practicable after the Effective Time, the Buyer shall\ndeliver to the participants in the Company Stock Plans appropriate notice\nsetting forth such participants' rights pursuant thereto and the grants pursuant\nto the Company Stock Plans shall continue in effect on the same terms and\nconditions (subject to the adjustments required by this Section after giving\neffect to the Merger).\n\n           (c) The Buyer shall take all corporate action necessary to reserve\nfor issuance a sufficient number of shares of Buyer Common Stock for delivery\nunder the Company Stock Plans assumed in accordance with this Section. As soon\nas practicable after the Effective Time, the Buyer shall file a registration\nstatement on Form S-8 (or any successor form) or another appropriate form with\nrespect to the shares of Buyer Common Stock subject to such options and shall\nuse its best efforts to maintain the effectiveness of such registration\nstatement or registration statements (and maintain the current status of the\nprospectus or prospectuses contained therein) for so long as such options remain\noutstanding.\n\n           (d) The Board of Directors of the Company shall, prior to or as of\nthe Effective Time, take all necessary actions, pursuant to and in accordance\nwith the terms of Company Stock Plans and the instruments evidencing the Company\nStock Options, to provide for the conversion of the Company Stock Options into\noptions to acquire Buyer Common Stock in accordance with this Section, and that\nno consent of the holders of the Company Stock Options is required in connection\nwith such conversion.\n\n           (e) The Company shall terminate its Employee Stock Purchase Plan in\naccordance with its terms as of or prior to the Effective Time.\n\n     6.12  Stockholder Litigation.  Until the earlier of the termination of\n           ----------------------                                           \nthis Agreement in accordance with its terms or the Effective Time, the Company\nshall give the Buyer the opportunity to participate in the defense or settlement\nof any stockholder litigation against the Company or its Board of Directors\nrelating to this Agreement or any of the transactions contemplated by this\nAgreement, and shall not settle any such litigation without the Buyer's prior\nwritten consent, which will not be unreasonably withheld or delayed.\n\n     6.13  Indemnification.  From and after the Effective Time, the Buyer\n           ---------------                                                \nshall, to the fullest extent permitted by law, cause the Surviving Corporation,\nfor a period of six years from the Effective Time, to honor all of the Company's\nobligations to indemnify and hold harmless each present and former director and\nofficer of the Company (the \"Indemnified Parties\"), against any costs or\nexpenses (including attorneys' fees), judgments, fines, losses, claims, damages,\nliabilities or amounts paid in settlement incurred in connection with any claim,\naction, suit, proceeding or investigation, whether civil, criminal,\nadministrative or investigative, arising out of or pertaining to\n\n                                      41\n\n \nmatters existing or occurring at or prior to the Effective Time, whether\nasserted or claimed prior to, at or after the Effective Time, to the extent that\nsuch obligations to indemnify and hold harmless exist on the date of this\nAgreement.\n\n     6.14  Notification of Certain Matters.  The Buyer will give prompt notice\n           -------------------------------                                     \nto the Company, and the Company will give prompt notice to the Buyer, of the\noccurrence, or failure to occur, of any event, which occurrence or failure to\noccur would be reasonably likely to cause (a) (i) any representation or warranty\nof such party contained in this Agreement that is qualified as to materiality to\nbe untrue or inaccurate in any respect or (ii) any other representation or\nwarranty of such party contained in this Agreement to be untrue or inaccurate in\nany material respect, in each case at any time from and after the date of this\nAgreement until the Effective Time, or (b) any material failure of the Buyer and\nthe Transitory Subsidiary or the Company, as the case may be, or of any officer,\ndirector, employee or agent thereof, to comply with or satisfy any covenant,\ncondition or agreement to be complied with or satisfied by it under this\nAgreement.  Notwithstanding the above, the delivery of any notice pursuant to\nthis Section will not limit or otherwise affect the remedies available hereunder\nto the party receiving such notice or the conditions to such party's obligation\nto consummate the Merger.\n\n\n                                  ARTICLE VII\n                             CONDITIONS TO MERGER\n\n     7.1  Conditions to Each Party's Obligation To Effect the Merger.  The\n          ----------------------------------------------------------       \nrespective obligations of each party to this Agreement to effect the Merger\nshall be subject to the satisfaction prior to the Closing Date of the following\nconditions:\n\n         (a) Stockholder Approval.  The Company Voting Proposal shall have been\n             --------------------                                              \napproved and adopted at the Company Meeting, at which a quorum is present, by\nthe affirmative vote of the holders of a majority of the shares of the Company\nCommon Stock outstanding on the record date for the Company Meeting.\n\n         (b) HSR Act.  The waiting period applicable to the consummation of the\n             -------                                                           \nMerger under the HSR Act shall have expired or been terminated.\n\n         (c) Governmental Approvals.  Other than the filings provided for by\n             ----------------------\nSection 1.1, all authorizations, consents, orders or approvals of, or\ndeclarations or filings with, or expirations of waiting periods imposed by, any\nGovernmental Entity, the failure of which to file, obtain or occur is reasonably\nlikely to have a Buyer Material Adverse Effect or a Company Material Adverse\nEffect shall have been filed, been obtained or occurred.\n\n                                      42\n\n \n          (d) Registration Statement.  The Registration Statement shall have\n              ---------------------- \nbecome effective under the Securities Act and shall not be the subject of any\nstop order or proceedings seeking a stop order.\n\n          (e) No Injunctions.  No Governmental Entity of competent jurisdiction\n              -------------- \nshall have enacted, issued, promulgated, enforced or entered any order,\nexecutive order, stay, decree, judgment or injunction (each an \"Order\") or\nstatute, rule or regulation which is in effect and which has the effect of\nmaking the Merger illegal or otherwise prohibiting consummation of the Merger.\n\n     7.2  Additional Conditions to Obligations of the Buyer and the Transitory\n          --------------------------------------------------------------------\nSubsidiary.  The obligations of the Buyer and the Transitory Subsidiary to\n----------                                                                 \neffect the Merger are subject to the satisfaction of each of the following\nadditional conditions, any of which may be waived in writing exclusively by the\nBuyer and the Transitory Subsidiary:\n\n          (a) Representations and Warranties.  The representations and\n              ------------------------------\nwarranties of the Company set forth in this Agreement shall be true and correct\n(i) as of the date of this Agreement (except to the extent such representations\nand warranties are specifically made as of a particular date, in which case such\nrepresentations and warranties shall be true and correct as of such date) and\n(ii) as of the Closing Date as though made on and as of the Closing Date (except\n(x) to the extent such representations and warranties are specifically made as\nof a particular date, in which case such representations and warranties shall be\ntrue and correct as of such date, (y) for changes contemplated by this Agreement\nand (z) where the failures to be true and correct (without regard to any\nmateriality, Company Material Adverse Effect or knowledge qualifications\ncontained therein), individually or in the aggregate, have not had, and are not\nreasonably likely to have, a Company Material Adverse Effect); and the Buyer\nshall have received a certificate signed on behalf of the Company by the chief\nexecutive officer and the chief financial officer of the Company to such effect.\n\n          (b) Performance of Obligations of the Company.  The Company shall have\n              -----------------------------------------                         \nperformed in all material respects all obligations required to be performed by\nit under this Agreement at or prior to the Closing Date; and the Buyer shall\nhave received a certificate signed on behalf of the Company by the chief\nexecutive officer and the chief financial officer of the Company to such effect.\n\n          (c) Tax Opinion. The Buyer shall have received a written opinion from\n              ----------- \nHale and Dorr LLP, counsel to the Buyer, to the effect that the Merger will be\ntreated for federal income tax purposes as a tax-free reorganization within the\nmeaning of Section 368(a) of the Code; provided that if Hale and Dorr LLP does\nnot render such opinion, this condition shall nonetheless be deemed satisfied if\nWilson Sonsini Goodrich &amp; Rosati, P.C. renders such opinion to the Buyer (it\nbeing agreed that the Buyer and the\n\n                                      43\n\n \nCompany shall each provide reasonable cooperation, including making reasonable\nrepresentations, to Hale and Dorr LLP and Wilson Sonsini Goodrich &amp; Rosati, P.C.\nas the case may be, to enable them to render such opinion).\n\n          (d) Third Party Consents.  The Company shall have obtained (i) all\n              --------------------\nconsents and approvals of third parties referred to in Section 3.3(b) of the\nCompany Disclosure Schedule and (ii) any other consent or approval of any third\nparty (other than a Governmental Entity) the failure of which to obtain,\nindividually or in the aggregate, is reasonably likely to have a Company\nMaterial Adverse Effect.\n\n          (e) Resignations.  The Buyer shall have received copies of the\n              ------------                                              \nresignations, effective as of the Effective Time, of each director of the\nCompany and its Subsidiaries.\n\n          (f) Year 2000 Matters.  (i) In the event that the Closing occurs on or\n              -----------------                                                 \nprior to December 31, 1999, the Buyer shall have received a report from Whitman\nHart to the effect that each of the Company Systems and Company Products is Year\n2000 Compliant. (ii) In the event that the Closing occurs on or after January 1,\n2000, each of the Company Systems and Company Products is Year 2000 Compliant.\n\n          (g) Releases.  The Buyer shall have received executed general releases\n              --------\nin a form acceptable to the Buyer from each of Lawrence Braitman and Richard\nThompson.\n\n     7.3  Additional Conditions to Obligations of the Company.  The obligation\n          ---------------------------------------------------                  \nof the Company to effect the Merger is subject to the satisfaction of each of\nthe following additional conditions, any of which may be waived, in writing,\nexclusively by the Company:\n\n         (a) Representations and Warranties.  The representations and warranties\n             ------------------------------\nof the Buyer and the Transitory Subsidiary set forth in this Agreement shall be\ntrue and correct (i) as of the date of this Agreement (except to the extent such\nrepresentations are specifically made as of a particular date, in which case\nsuch representations and warranties shall be true and correct as of such date)\nand (ii) as of the Closing Date as though made on and as of the Closing Date\n(except (x) to the extent such representations and warranties are specifically\nmade as of a particular date, in which case such representations and warranties\nshall be true and correct as of such date, (y) for changes contemplated by this\nAgreement and (z) where the failures to be true and correct (without regard to\nany materiality, Buyer Material Adverse Effect or knowledge qualifications\ncontained therein), individually or in the aggregate, have not had, and are not\nreasonably likely to have, a Buyer Material Adverse Effect); and the Company\nshall have received a certificate signed on behalf of the Buyer by the chief\nexecutive officer or the chief financial officer of the Buyer to such effect.\n\n                                      44\n\n \n     (b) Performance of Obligations of the Buyer and the Transitory Subsidiary.\n         ---------------------------------------------------------------------  \nThe Buyer and Sub shall have performed in all material respects all obligations\nrequired to be performed by them under this Agreement at or prior to the Closing\nDate, and the Company shall have received a certificate signed on behalf of the\nBuyer by the chief executive officer or the chief financial officer of the Buyer\nto such effect.\n\n     (c) Tax Opinion.  The Company shall have received the opinion of Wilson\n         -----------                                                        \nSonsini Goodrich &amp; Rosati, P.C. counsel to the Company, to the effect that the\nMerger will be treated for federal income tax purposes as a tax-free\nreorganization within the meaning of Section 368(a) of the Code; provided that\nif Wilson Sonsini Goodrich &amp; Rosati, P.C. does not render such opinion, this\ncondition shall nonetheless be deemed satisfied if Hale and Dorr LLP renders\nsuch opinion to the Company (it being agreed that the Buyer and the Company\nshall each provide reasonable cooperation, including making reasonable\nrepresentations, to Wilson Sonsini Goodrich &amp; Rosati, P.C. and Hale and Dorr LLP\nto enable them to render such opinion).\n\n\n                                 ARTICLE VIII\n                           TERMINATION AND AMENDMENT\n                                        \n     8.1  Termination.  This Agreement may be terminated at any time prior to\n          -----------                                                         \nthe Effective Time (with respect to Sections 8.1(b) through 8.1(f), by written\nnotice by the terminating party to the other party), whether before or after\napproval of the Merger by the stockholders of the Company:\n\n     (a) by mutual written consent of the Buyer and the Company; or\n\n     (b) by either the Buyer or the Company if the Merger shall not have been\nconsummated by April 30, 2000 (the \"Outside Date\") (provided that the right to\nterminate this Agreement under this Section 8.1(b) shall not be available to any\nparty whose failure to fulfill any obligation under this Agreement has been a\nprincipal cause of or resulted in the failure of the Merger to occur on or\nbefore such date); or\n\n     (c) by either the Buyer or the Company if a Governmental Entity of\ncompetent jurisdiction shall have issued a nonappealable final order, decree or\nruling or taken any other nonappealable final action, in each case having the\neffect of permanently restraining, enjoining or otherwise prohibiting the\nMerger; or\n\n     (d) by either the Buyer or the Company if at the Company Meeting (including\nany adjournment or postponement), the requisite vote of the stockholders of the\nCompany in favor of the Company Voting Proposal shall not have been obtained\n(provided that the right to terminate this Agreement under this Section 8.1(d)\nshall not\n\n                                      45\n\n \nbe available to any party seeking termination who at the time is in breach of or\nhas failed to fulfill its obligations under this Agreement); or\n\n          (e) by the Buyer, if: (i) the Board of Directors of the Company shall\nhave failed to recommend approval of the Company Voting Proposal in the Proxy\nStatement or shall have withdrawn or modified its recommendation of the Company\nVoting Proposal; (ii) the Board of Directors of the Company fails to reconfirm\nits recommendation of this Agreement or the Merger within five business days\nafter the Buyer requests in writing that the Board of Directors of the Company\ndo so; (iii) the Board of Directors of the Company shall have approved or\nrecommended to the stockholders of the Company an Alternative Transaction (as\ndefined in Section 6.1); or (iv) a tender offer or exchange offer for\noutstanding shares of the Company Common Stock is commenced (other than by the\nBuyer or an Affiliate of the Buyer) and the Board of Directors of the Company\nrecommends that the stockholders of the Company tender their shares in such\ntender or exchange offer or, within 10 days after such tender or exchange offer,\nfails to recommend against acceptance of such offer or takes no position with\nrespect to the acceptance thereof; or (v) for any reason the Company fails to\ncall and hold the Company Meeting by the date which is one business day prior to\nthe Outside Date; or\n\n          (f) by either the Buyer or the Company, if there has been a breach of\nany representation, warranty, covenant or agreement on the part of the other\nparty set forth in this Agreement, which breach (i) causes the conditions set\nforth in Section 7.2(a), 7.2(b) or 7.2(f) (in the case of termination by the\nBuyer) or Section 7.3(a) or 7.3(b) (in the case of termination by the Company)\nnot to be satisfied, and (ii) shall not have been cured within 45 days following\nreceipt by the breaching party of written notice of such breach from the other\nparty.\n\n     8.2  Effect of Termination.  In the event of termination of this Agreement\n          ---------------------                                                 \nas provided in Section 8.1, this Agreement shall immediately become void and\nthere shall be no liability or obligation on the part of the Buyer, the Company,\nthe Transitory Subsidiary or their respective officers, directors, stockholders\nor Affiliates, except as set forth in Sections 3.29, 5.3, 8.3 and Article IX;\nprovided that any such termination shall not relieve any party from liability\nfor any willful breach of this Agreement (which includes without limitation the\nmaking of any representation or warranty by a party in this Agreement that the\nparty knew was not true and accurate when made) and the provisions of the\nCompany Stock Option Agreement, Sections 3.29, 5.3, 8.3 and Article IX of this\nAgreement and the Confidentiality Agreement shall remain in full force and\neffect and survive any termination of this Agreement.\n\n     8.3  Fees and Expenses.\n          -----------------\n                                      46\n\n\n \n     (a) Except as set forth in this Section 8.3, all fees and expenses incurred\nin connection with this Agreement and the transactions contemplated hereby shall\nbe paid by the party incurring such fees and expenses, whether or not the Merger\nis consummated; provided however, that the Company and the Buyer shall share\nequally all fees and expenses, other than attorneys' fees, incurred with respect\nto the printing and filing of the Proxy Statement (including any related\npreliminary materials) and the Registration Statement and any amendments or\nsupplements thereto.\n\n     (b) The Company shall pay the Buyer up to $500,000 as reimbursement for\nexpenses of the Buyer actually incurred relating to the transactions\ncontemplated by this Agreement prior to termination (including, but not limited\nto, fees and expenses of the Buyer's counsel, accountants and financial\nadvisors, but excluding any discretionary fees paid to such financial advisors),\nupon the termination of this Agreement by the Buyer pursuant to Section 8.1(b)\nas a result of the failure to satisfy the condition set forth in Section 7.2(a)\nor Section 7.2(f).\n\n     (c) The Company shall pay the Buyer a termination fee of $20,000,000 upon\nthe earliest to occur of the following events:\n\n         (i)   the termination of this Agreement by the Buyer pursuant to\nSection 8.1(e); or\n\n         (ii)  the termination of this Agreement by the Buyer pursuant to\nSection 8.1(f) after a breach by the Company of this Agreement; or\n\n         (iii) the termination of the Agreement by the Buyer or the Company\npursuant to Section 8.1(d) as a result of the failure to receive the requisite\nvote for approval of the Company Voting Proposal by the stockholders of the\nCompany at the Company Meeting.\n\n     (d) The Buyer shall pay the Company up to $500,000 as reimbursement for\nexpenses of the Company actually incurred relating to the transactions\ncontemplated by this Agreement prior to termination (including, but not limited\nto, but excluding any discretionary fees paid to such financial advisors), upon\nthe termination of this Agreement by the Company pursuant to Section 8.1(b) as a\nresult of the failure to satisfy the condition set forth in Section 7.3(a).\n\n     (e) The Buyer shall pay the Company a termination fee of $20,000,000 upon\nthe termination of this Agreement by the Company pursuant to Section 8.1(f)\nafter a breach by the Buyer of this Agreement.\n\n     (f) The expenses and fees, if applicable, payable pursuant to Section\n8.3(b), 8.3(c), 8.3(d) and 8.3(e) shall be paid within one business day after\ndemand\n\n                                      47\n\n \ntherefor following the first to occur of the events giving rise to the payment\nobligation described in Section 8.3(b), 8.3(c)(i), (ii) or (iii), 8.3(d) or\n8.3(e). If one party fails to promptly pay to the other any expense\nreimbursement or fee due hereunder, the defaulting party shall pay the costs and\nexpenses (including legal fees and expenses) in connection with any action,\nincluding the filing of any lawsuit or other legal action, taken to collect\npayment, together with interest on the amount of any unpaid fee at the publicly\nannounced prime rate of Fleet Bank, N.A. plus five percent per annum, compounded\nquarterly, from the date such expense reimbursement or fee was required to be\npaid.\n\n     8.4  Amendment.  This Agreement may be amended by the parties hereto, by\n          ---------                                                           \naction taken or authorized by their respective Boards of Directors, at any time\nbefore or after approval of the matters presented in connection with the Merger\nby the stockholders of the Company, but, after any such approval, no amendment\nshall be made which by law requires further approval by such stockholders\nwithout such further approval.  This Agreement may not be amended except by an\ninstrument in writing signed on behalf of each of the parties hereto.\n\n     8.5  Extension; Waiver.  At any time prior to the Effective Time, the\n          -----------------                                                \nparties hereto, by action taken or authorized by their respective Boards of\nDirectors, may, to the extent legally allowed, (i) extend the time for the\nperformance of any of the obligations or other acts of the other parties hereto,\n(ii) waive any inaccuracies in the representations and warranties contained\nherein or in any document delivered pursuant hereto and (iii) waive compliance\nwith any of the agreements or conditions contained herein.  Any agreement on the\npart of a party hereto to any such extension or waiver shall be valid only if\nset forth in a written instrument signed on behalf of such party.\n\n\n                                  ARTICLE IX\n                                 MISCELLANEOUS\n\n     9.1  Nonsurvival of Representations and Warranties.  The respective\n          ---------------------------------------------                  \nrepresentations and warranties of the Company, the Buyer and the Transitory\nSubsidiary contained in this Agreement or in any instrument delivered pursuant\nto this Agreement shall expire with, and be terminated and extinguished upon,\nthe Effective Time.\n\n     9.2  Notices.  All notices and other communications hereunder shall be in\n          -------                                                              \nwriting and shall be deemed duly delivered (i) four business days after being\nsent by registered or certified mail, return receipt requested, postage prepaid,\nor (ii) one business day after being sent for next business day delivery, fees\nprepaid, via a\n\n                                      48\n\n \nreputable nationwide overnight courier service, in each case to the intended\nrecipient as set forth below:\n\n          (a)  if to the Buyer or Transitory Subsidiary, to\n\n               CMGI, Inc.\n               100 Brickstone Square\n               Andover, MA 01810\n               Attn:  General Counsel\n               Telecopy:  (978) 684-3814\n\n               with a copy to:\n\n               Hale and Dorr LLP\n               60 State Street\n               Boston, MA 02109\n               Attn:  Mark G. Borden, Esq.\n               Telecopy: (617) 526-5000\n\n          (b)  if to the Company, to\n\n               Flycast Communications Corporation\n               181 Fremont Street\n               San Francisco, CA   94105\n               Attn:  President\n               Telecopy:  (650) 561-9082\n\n               with a copy to:\n\n               Wilson Sonsini Goodrich &amp; Rosati, P.C.\n               650 Page Mill Road\n               Palo Alto, CA 94306\n               Attn:  Larry W. Sonsini, Esq.\n               Telecopy: (650) 461-5375\n\nAny party may give any notice or other communication hereunder using any other\nmeans (including personal delivery, messenger service, telecopy, telex, ordinary\nmail or electronic mail), but no such notice or other communication shall be\ndeemed to have been duly given unless and until it actually is received by the\nparty for whom it is intended.  Any party may change the address to which\nnotices and other communications hereunder are to be delivered by giving the\nother parties notice in the manner herein set forth.\n\n                                      49\n\n \n     9.3  Entire Agreement.   This Agreement (including the Schedules and\n          ----------------                                               \nExhibits hereto and the documents and instruments referred to herein that are to\nbe delivered at the Closing) constitutes the entire agreement among the parties\nhereto and supersedes any prior understandings, agreements or representations by\nor among the parties hereto, or any of them, written or oral, with respect to\nthe subject matter hereof; provided that the Confidentiality Agreement shall\nremain in effect in accordance with its terms.\n\n     9.4  No Third Party Beneficiaries.  Except as provided in Section 6.13,\n          ----------------------------                                       \nthis Agreement is not intended, and shall not be deemed, to confer any rights or\nremedies upon any person other than the parties hereto and their respective\nsuccessors and permitted assigns, to create any agreement of employment with any\nperson or to otherwise create any third-party beneficiary hereto.\n\n     9.5  Assignment.  Neither this Agreement nor any of the rights, interests\n          ----------                                                           \nor obligations under this Agreement may be assigned or delegated, in whole or in\npart, by operation of law or otherwise by any of the parties hereto without the\nprior written consent of the other parties, and any such assignment without such\nprior written consent shall be null and void, except that the Buyer and\/or the\nTransitory Subsidiary may assign this Agreement to any direct or indirect wholly\nowned Subsidiary of the Buyer without consent of the Company, provided that the\nBuyer and\/or the Transitory Subsidiary, as the case may be, shall remain liable\nfor all of its obligations under this Agreement.  Subject to the preceding\nsentence, this Agreement shall be binding upon, inure to the benefit of, and be\nenforceable by, the parties hereto and their respective successors and permitted\nassigns.\n\n     9.6  Severability.  Any term or provision of this Agreement that is\n          ------------                                                   \ninvalid or unenforceable in any situation in any jurisdiction shall not affect\nthe validity or enforceability of the remaining terms and provisions hereof or\nthe validity or enforceability of the offending term or provision in any other\nsituation or in any other jurisdiction.  If the final judgment of a court of\ncompetent jurisdiction declares that any term or provision hereof is invalid or\nunenforceable, the parties agree hereto that the court making such determination\nshall have the power to limit the term or provision, to delete specific words or\nphrases, or to replace any invalid or unenforceable term or provision with a\nterm or provision that is valid and enforceable and that comes closest to\nexpressing the intention of the invalid or unenforceable term or provision, and\nthis Agreement shall be enforceable as so modified.  In the event such court\ndoes not exercise the power granted to it in the prior sentence, the parties\nhereto agree to replace such invalid or unenforceable term or provision with a\nvalid and enforceable term or provision that will achieve, to the extent\npossible, the economic, business and other purposes of such invalid or\nunenforceable term.\n\n                                      50\n\n \n     9.7  Counterparts and Signature.  This Agreement may be executed in two or\n          --------------------------                                            \nmore counterparts, each of which shall be deemed an original but all of which\ntogether shall be considered one and the same agreement and shall become\neffective when counterparts have been signed by each of the parties hereto and\ndelivered to the other parties, it being understood that all parties need not\nsign the same counterpart.  This Agreement may be executed and delivered by\nfacsimile transmission.\n\n     9.8  Interpretation.  When reference is made in this Agreement to an\n          --------------                                                  \nArticle or a Section, such reference shall be to an Article or Section of this\nAgreement, unless otherwise indicated.  The table of contents, table of defined\nterms and headings contained in this Agreement are for convenience of reference\nonly and shall not affect in any way the meaning or interpretation of this\nAgreement.  The language used in this Agreement shall be deemed to be the\nlanguage chosen by the parties hereto to express their mutual intent, and no\nrule of strict construction shall be applied against any party.  Whenever the\ncontext may require, any pronouns used in this Agreement shall include the\ncorresponding masculine, feminine or neuter forms, and the singular form of\nnouns and pronouns shall include the plural, and vice versa.  Any reference to\nany federal, state, local or foreign statute or law shall be deemed also to\nrefer to all rules and regulations promulgated thereunder, unless the context\nrequires otherwise.  Whenever the words \"include\", \"includes\" or \"including\" are\nused in this Agreement, they shall be deemed to be followed by the words\n\"without limitation\".\n\n     9.9  Governing Law.  This Agreement shall be governed by and construed in\n          -------------                                                        \naccordance with the internal laws of the State of Delaware without giving effect\nto any choice or conflict of law provision or rule (whether of the State of\nDelaware or any other jurisdiction) that would cause the application of laws of\nany jurisdictions other than those of the State of Delaware.\n\n     9.10 Remedies.  Except as otherwise provided herein, any and all remedies\n          --------                                                             \nherein expressly conferred upon a party will be deemed cumulative with and not\nexclusive of any other remedy conferred hereby, or by law or equity upon such\nparty, and the exercise by a party of any one remedy will not preclude the\nexercise of any other remedy.  The parties hereto agree that irreparable damage\nwould occur in the event that any of the provisions of this Agreement were not\nperformed in accordance with their specific terms or were otherwise breached.\nIt is accordingly agreed that the parties shall be entitled to an injunction or\ninjunctions to prevent breaches of this Agreement and to enforce specifically\nthe terms and provisions hereof this being in addition to any other remedy to\nwhich they are entitled at law or in equity.\n\n     9.11 Waiver of Jury Trial.  EACH OF THE BUYER, THE TRANSITORY SUBSIDIARY\n          --------------------                                                \nAND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY\nACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR\nOTHERWISE) ARISING OUT OF OR\n\n                                      51\n\n \nRELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE\nACTIONS OF THE BUYER, THE TRANSITORY SUBSIDIARY OR THE COMPANY IN THE\nNEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.\n\n\n                          [Signature Page to follow]\n\n                                      52\n\n \n     IN WITNESS WHEREOF, the Buyer, the Transitory Subsidiary and the Company\nhave caused this Agreement to be signed by their respective officers thereunto\nduly authorized as of the date first written above.\n\n\n                                  CMGI, INC.\n\n\n\n                                  By:   \/s\/ Andrew J. Hajducky III\n                                     ---------------------------------\n                                  Title:    CFO\n                                        ------------------------------\n\n\n                                  FREEMONT CORPORATION\n\n\n                                  By:   \/s\/ Andrew J. Hajducky III\n                                     ---------------------------------\n                                  Title:    CFO\n                                        ------------------------------\n\n \n                                  FLYCAST COMMUNICATIONS\n                                  CORPORATION\n\n\n\n                                  By:   \/s\/ George R. Garrick\n                                     ---------------------------------\n                                  Title: CEO and Chairman\n                                        ------------------------------  \n\n \n                                      53\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7128,7557],"corporate_contracts_industries":[9503,9417],"corporate_contracts_types":[9622,9626],"class_list":["post-43041","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-cmgi-inc","corporate_contracts_companies-flycast-communications-corp","corporate_contracts_industries-services__advertising","corporate_contracts_industries-financial__holding","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\/43041","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=43041"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43041"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43041"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}