{"id":43086,"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-lycos-inc-and-gamesville-com-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-lycos-inc-and-gamesville-com-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-lycos-inc-and-gamesville-com-inc.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Lycos Inc. and Gamesville.com Inc."},"content":{"rendered":"<pre>\n                          AGREEMENT AND PLAN OF MERGER\n\n\n                                      Among\n\n\n                                   LYCOS, INC.\n\n\n                           BARBADOS ACQUISITION CORP.\n\n\n                                       and\n\n\n                              GAMESVILLE.COM, INC.\n\n\n\n                          Dated as of November 22, 1999\n\n\n\n\n\n\n\n-------------------------------------------------------------------------------\n\n\n\n\n\n                               TABLE OF CONTENTS\n\n                                                                            Page\n\n                                   ARTICLE I\n\n                                   The Merger\n\nSECTION 1.01.  Effective Time of the Merger...................................2\nSECTION 1.02.  Closing........................................................2\nSECTION 1.03.  Effect of the Merger...........................................3\nSECTION 1.04.  Certificate of Incorporation and By-laws.......................3\nSECTION 1.05.  Directors......................................................3\nSECTION 1.06.  Officers.......................................................3\n\n\n                                   ARTICLE II\n\n                            Conversion of Securities\n\nSECTION 2.01. Conversion of Capital Stock.....................................3\nSECTION 2.02. Exchange of Certificates........................................5\n\n\n                                  ARTICLE III\n\n                         Representations and Warranties\n                                 of the Company\n\nSECTION 3.01.  Organization and Standing of the Company.......................9\nSECTION 3.02.  Authority; Noncontravention...................................10\nSECTION 3.03. Capital Stock of the Company...................................11\nSECTION 3.04. Equity Interests...............................................13\nSECTION 3.05. Financial Statements...........................................13\nSECTION 3.06. Undisclosed Liabilities........................................14\nSECTION 3.07. Taxes..........................................................14\nSECTION 3.08. Assets.........................................................18\nSECTION 3.09. Intellectual Property, Etc.....................................18\nSECTION 3.10. Contracts......................................................21\nSECTION 3.11. Litigation; Decrees............................................25\nSECTION 3.12. Operation of the Business; Absence of Changes or Events........25\nSECTION 3.13. Compliance with Applicable Laws................................27\nSECTION 3.14. Certain Employee Matters.......................................27\nSECTION 3.15. Benefit Plans..................................................30\nSECTION 3.16. Insurance......................................................32\nSECTION 3.17. Customers; Effect of Transaction...............................33\nSECTION 3.18. Disclosure.....................................................34\nSECTION 3.19. Information Supplied...........................................34\nSECTION 3.20. Consent Solicitation; Voting Requirements......................35\n\n\n\n\n\n\n                                                                            Page\n\nSECTION 3.21. Brokers........................................................35\nSECTION 3.22. State Takeover Statutes........................................35\nSECTION 3.23. Year 2000 Compliance...........................................36\nSECTION 3.24. Customer Accounts Receivable...................................36\nSECTION 3.25. Corporate Name.................................................36\nSECTION 3.26. Accounts; Safe Deposit Boxes; Powers of Attorney; Officers\n              and Directors..................................................37\nSECTION 3.27. Traffic........................................................37\nSECTION 3.28. Underdeliveries under Advertising Contracts....................37\n\n\n                                   ARTICLE IV\n\n                Representations and Warranties of Parent and Sub\n\nSECTION 4.01. Organization...................................................38\nSECTION 4.02. Authority; Noncontravention....................................38\nSECTION 4.03. Capital Stock of Parent........................................39\nSECTION 4.04. Parent SEC Documents...........................................40\nSECTION 4.05. Absence of Certain Changes or Events...........................40\nSECTION 4.06. Litigation.....................................................40\nSECTION 4.07. Taxes..........................................................40\nSECTION 4.08. Interim Operations of Sub......................................41\nSECTION 4.09. Information Supplied...........................................41\nSECTION 4.10. Brokers........................................................41\n\n\n                                   ARTICLE V\n\n                                   Covenants\n\nSECTION 5.01. Covenants of the Company.......................................41\nSECTION 5.02. No Solicitation................................................46\nSECTION 5.03. Other Actions..................................................47\n\n\n                                   ARTICLE VI\n\n                             Additional Agreements\n\nSECTION 6.01. Access to Information..........................................47\nSECTION 6.02. Legal Conditions to Merger.....................................48\nSECTION 6.03. Stock Options; Warrants........................................48\nSECTION 6.04. Fees and Expenses..............................................50\nSECTION 6.05. Additional Agreements..........................................51\nSECTION 6.06. Indemnification................................................51\n\n\n\n\n                                                                           Page\n\nSECTION 6.07. Litigation.....................................................51\nSECTION 6.08. Tax Treatment..................................................51\nSECTION 6.09. Letter of the Company's Accountants............................51\nSECTION 6.10. Letter of Parent's Accountants.................................52\nSECTION 6.11. Affiliates.....................................................52\nSECTION 6.12. Employee Benefits..............................................52\n\n\n                                  ARTICLE VII\n\n                                   Conditions\n\nSECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.....53\nSECTION 7.02. Conditions of Obligations of Parent and Sub....................53\nSECTION 7.03. Conditions of Obligations of the Company.......................55\nSECTION 7.04. Frustration of Closing Conditions..............................56\n\n\n                                  ARTICLE VIII\n\n                           Termination and Amendment\n\nSECTION 8.01. Termination....................................................56\nSECTION 8.02. Effect of Termination..........................................57\nSECTION 8.03. Amendment......................................................57\nSECTION 8.04. Extension; Waiver..............................................57\n\n\n                                   ARTICLE IX\n\n                                 Miscellaneous\n\nSECTION 9.01. Survival of Representations, Warranties and Covenants..........58\nSECTION 9.02. Notices........................................................58\nSECTION 9.03. Definitions....................................................59\nSECTION 9.04. Entire Agreement; No Third Party Beneficiaries; Rights of\n              Ownership......................................................60\nSECTION 9.05. GOVERNING LAW..................................................60\nSECTION 9.06. Publicity......................................................60\nSECTION 9.07. Assignment.....................................................60\nSECTION 9.08. Counterparts...................................................61\nSECTION 9.09. Exhibits and Schedules; Interpretation.........................61\nSECTION 9.10. Consent to Jurisdiction........................................61\nSECTION 9.11. Waiver of Jury Trial...........................................62\n\n\n\n\n\n\nSECTION 9.12. Enforcement....................................................62\n\n\nExhibit A    Form of Proprietary Information and Inventions Assignment Agreement\nExhibit B    Form of Letter \nExhibit C    Form of Affiliate Letter\nExhibit D    Form of Indemnification and Escrow Agreement\nExhibit E    Form of Company Representation Letter\nExhibit F    Form of Parent Representation Letter \nExhibit G    Form of Registration Rights Agreement\n\n\n\n\n\n\n\n\n\n                                    AGREEMENT AND PLAN OF MERGER dated as of\n                           November 22, 1999 (this \"Agreement\"), by and among\n                           LYCOS, INC., a Delaware corporation (\"Parent\"),\n                           BARBADOS ACQUISITION CORP., a Delaware corporation\n                           and a wholly owned subsidiary of Parent (\"Sub\"), and\n                           GAMESVILLE.COM, INC., a Delaware corporation (the\n                           \"Company\").\n\n          WHEREAS the respective Boards of Directors of Parent, Sub and the\nCompany have approved and declared advisable this Agreement and the merger (the\n\"Merger\"), upon the terms and subject to the conditions set forth herein, of Sub\nwith and into the Company, all in accordance with the General Corporation Law of\nthe State of Delaware (the \"DGCL\");\n\n          WHEREAS, for Federal income tax purposes, it is intended that (a) the\nMerger will qualify as a reorgani zation under the provisions of Section 368(a)\nof the Internal Revenue Code of 1986, as amended, and the rules and regulations\npromulgated thereunder (the \"Code\"), (b) this Agreement constitutes a plan of\nreorganization and (c) Parent, Sub and the Company will each be a party to such\nreorganization within the meaning of Section 368(b) of the Code;\n\n          WHEREAS, for financial accounting purposes, it is intended that the\nMerger will be accounted for as a pooling of interests transaction;\n\n          WHEREAS, contemporaneously with the execution hereof, (a) holders of\n100% of the shares of Series A Convertible Preferred Stock, par value $0.01 per\nshare, of the Company (the \"Company Series A Preferred Stock\") issued and\noutstanding as of the date hereof (the \"Record Date\") have delivered to the\nSecretary of the Company written consents (the \"Preferred Stock Consents\") with\nrespect to all such shares approving the execution and delivery of this\nAgreement by the Company and (b) holders of (i) 100% of the shares of Class A\nCommon Stock, par value $0.01 per share, of the Company (the \"Company Class A\nCommon Stock\") and (ii) 100% of the shares of Company Series A Preferred Stock,\nin each case issued and outstanding as of the Record Date, have delivered to the\nSecretary of the Company written consents (the \"Stockholder Consents\" and,\ntogether with the Preferred Stock Consents, the \"Consents\") with respect to all\nsuch shares adopting this Agreement, in each case in accordance with the Amended\nand Restated Certificate of\n\n\n\n\n\n\nIncorporation of the Company, as amended to the date of this\nAgreement, and the DGCL;\n\n          WHEREAS, concurrently with the execution of this Agreement and as a\ncondition to the willingness of Parent and Sub to enter into this Agreement,\nParent, the Stockholders, the Representative (as defined therein) and the Escrow\nAgent named therein entered into an Indemnification and Escrow Agreement (the\n\"Escrow Agreement\") pursuant to which, among other things, the holders of all\noutstanding shares of Company Capital Stock (the \"Stockholders\") agreed to the\nescrow of 10% of the aggregate Merger Consideration otherwise issuable hereunder\nto secure certain indemnification obligations; and\n\n          WHEREAS, concurrently with the execution of this Agreement, Parent,\nthe Stockholders and the Representative entered into a Registration Rights\nAgreement (the \"Registration Rights Agreement\") pursuant to which Parent has\nagreed to provide to the Stockholders certain registration rights with respect\nto shares of Parent Common Stock issued in the Merger.\n\n          NOW, THEREFORE, in consideration of the foregoing and the respective\nrepresentations, warranties, covenants and agreements set forth herein, the\nparties hereto agree as follows:\n\n\n                                    ARTICLE I\n\n                                   The Merger\n\n          SECTION 1.01. Effective Time of the Merger. Subject to the provisions\nof this Agreement, as soon as practicable on the Closing Date, a certificate of\nmerger and all other appropriate documents (collectively, the \"Certificate of\nMerger\") shall be duly prepared, executed, acknowledged and filed with the\nSecretary of State of the State of Delaware by the parties hereto as provided in\nthe DGCL. The Merger shall become effective upon the filing of the Certificate\nof Merger with the Secretary of State of the State of Delaware or at such time\nthereafter as is agreed upon by Parent and the Company and provided in the\nCertificate of Merger (the \"Effective Time\").\n\n          SECTION 1.02. Closing. The closing of the Merger (the \"Closing\") will\ntake place at 10:00 a.m., New York time, on a date to be specified by the\nparties (the \"Closing Date\"), which shall be not later than the second business\nday after satisfaction or waiver of the conditions set forth in Article VII\n(other than those conditions that by their\n\n\n\n\n\n\n\nnature are to be satisfied at the Closing, but subject to the satisfaction or\nwaiver of those conditions), at the offices of Parent, unless another time, date\nor place is agreed to in writing by the parties hereto.\n\n          SECTION 1.03. Effect of the Merger. At the Effective Time, Sub shall\nbe merged with and into the Company, and the Company shall continue as the\nsurviving corporation in the Merger (the \"Surviving Corporation\"). The Merger\nshall have the effects set forth in Section 259 of the DGCL.\n\n          SECTION 1.04. Certificate of Incorporation and By-laws. (a) The\nCertificate of Incorporation of Sub, as in effect immediately prior to the\nEffective Time, shall be the Certificate of Incorporation of the Surviving\nCorporation until thereafter changed or amended as provided therein or by\napplicable law, except that Article I of the Certificate of Incorporation of the\nSurviving Corporation shall be amended to read in its entirety as follows: \"The\nname of the corporation is Gamesville.com, Inc.\"\n\n          (b) The By-laws of Sub as in effect immediately prior to the Effective\nTime shall be the By-laws of the Surviving Corporation until thereafter changed\nor amended as provided therein or by applicable law.\n\n          SECTION 1.05. Directors. The directors of Sub immediately prior to the\nEffective Time shall be the directors of the Surviving Corporation until the\nearlier of their resignation or removal or until their respective successors are\nduly elected and qualified, as the case may be.\n\n          SECTION 1.06. Officers. The officers of the Company immediately prior\nto the Effective Time shall be the officers of the Surviving Corporation until\nthe earlier of their resignation or removal or until their respective successors\nare duly elected and qualified, as the case may be.\n\n\n                                   ARTICLE II\n\n                            Conversion of Securities\n\n          SECTION 2.01. Conversion of Capital Stock. As of the Effective Time,\nby virtue of the Merger and without any action on the part of the holder of any\nshares of Company Class A Common Stock, Class B Common Stock, par value $0.01\nper share, of the Company (the \"Company Class B Common Stock\" and, together with\nthe Company Class A Common Stock, the \"Company Common Stock\") or the Company\nSeries A\n\n\n\n\n\n\n\nPreferred Stock (together with the Company Common Stock, the \"Company Capital\nStock\") or any shares of capital stock of Sub:\n\n          (a) Capital Stock of Sub. Each issued and outstanding share of the\n     capital stock of Sub shall be converted into and become one fully paid and\n     nonassess able share of common stock, par value $0.01 per share, of the\n     Surviving Corporation.\n\n          (b) Cancelation of Treasury Stock. All shares of Company Capital Stock\n     owned by the Company, as treasury stock, immediately prior to the Effective\n     Time shall automatically be canceled and retired and shall cease to exist\n     and no consideration shall be delivered in exchange therefor.\n\n          (c) Conversion of Company Common Stock. Subject to Sections 2.01(d),\n     2.01(e), 2.01(f) and 2.02(e), each share of Company Common Stock issued and\n     outstanding immediately prior to the Effective Time (other than shares to\n     be canceled in accordance with Section 2.01(b)) shall be converted into the\n     right to receive a number of fully paid and nonassessable shares of Common\n     Stock, par value $0.01 per share, of Parent (\"Parent Common Stock\") equal\n     to the Exchange Ratio (the \"Merger Consideration\"). For purposes of this\n     Agreement, (i) \"Exchange Ratio\" means the number of shares of Parent Common\n     Stock obtained by dividing (x) the Merger Shares by (y) the sum of (A) the\n     aggregate number of shares of Company Common Stock issued and outstanding\n     and (B) the aggregate number of shares of Company Common Stock subject to\n     Stock Options and Warrants, in each case as of the Effective Time and (ii)\n     \"Merger Shares\" means a number of shares of Parent Common Stock obtained by\n     dividing (x) the sum of (A) $232,000,000 minus (B) the aggregate amount of\n     (1) fees and expenses incurred by Company or any of its subsidiaries prior\n     to the Effective Time relating to the pursuit or consummation of the\n     Merger, including all attorneys' fees, brokers' fees, accountants' fees and\n     consultants' fees and (2) without duplication, fees and expenses required\n     to be paid by the Company to Advest, Inc. upon consummation of the Merger,\n     by (y) the average of the last quoted sale price per share of Parent Common\n     Stock on The Nasdaq National Market (\"Nasdaq\") (as reported in The Wall\n     Street Journal or, if not reported thereby, any other source to which the\n     Company and Parent may agree) for each of the 20 consecutive trading days\n     ending on and including November 30, 1999 (the \"Closing Date Average\n     Closing Price\"), provided that the Closing Date Average Closing Price shall\n     not be less than $44.00 or greater than\n\n\n\n\n\n\n\n     $66.00. As of the Effective Time, all such shares of Company Common\n     Stock shall no longer be outstanding and shall automatically be canceled\n     and shall cease to exist, and each holder of a certificate that immediately\n     prior to the Effective Time represented any such shares (a \"Certificate\")\n     shall cease to have any rights with respect thereto, except the right to\n     receive the Merger Consideration with respect thereto and any cash in lieu\n     of fractional shares of Parent Common Stock to be issued or paid in\n     consideration therefor upon surrender of such certificate in accordance\n     with Section 2.02 (subject, in the case of such shares, to the terms of the\n     Escrow Agreement), without interest.\n\n          (d) Escrow of Merger Shares. At the Closing, on behalf of the\n     Stockholders and pursuant to the terms of the Escrow Agreement, Parent will\n     deposit with the Escrow Agent that number of shares of Parent Common Stock\n     equal to 10% of the total number of shares of Parent Common Stock issuable\n     to the Stockholders pursuant to Section 2.01(c). Such deposit shall be on\n     behalf of the Stockholders and with the same effect as if Parent had\n     delivered such shares to the Stockholders and the Stockholders had\n     delivered such shares to the Escrow Agent.\n\n          (e) Anti-Dilution Provisions. In the event Parent changes (or\n     establishes a record date for changing) the number of shares of Parent\n     Common Stock issued and outstanding prior to the Effective Time as a result\n     of a stock split, stock dividend, recapitalization, subdivision,\n     reclassification, combination, exchange of shares or similar transaction\n     with respect to the outstanding Parent Common Stock and the record date\n     therefor shall be prior to the Effective Time, the number of Merger Shares\n     shall be appropriately adjusted to reflect such stock split, stock\n     dividend, recapitalization, subdivision, reclassification, combination,\n     exchange of shares or similar transaction.\n\n          (f) Appraisal Rights. Notwithstanding anything in this Agreement to\n     the contrary, shares (the \"Appraisal Shares\") of Company Common Stock\n     issued and outstanding immediately prior to the Effective Time that are\n     held by any holder who properly demands appraisal of such Appraisal Shares\n     pursuant to, and who complies in all respects with, the provisions of\n     Section 262 of the DGCL (\"Section 262\") shall not be converted into the\n     right to receive the Merger Consideration as provided in Section 2.01(c),\n     but instead the holders of Appraisal Shares shall be\n\n\n\n\n\n\n\n\n     entitled to payment of the fair value of such Appraisal Shares in\n     accordance with the provisions of Section 262; provided, however, that if\n     any such holder shall fail to perfect or otherwise shall waive, withdraw or\n     lose the right to appraisal under Section 262 or a court of competent\n     jurisdiction shall determine that such holder is not entitled to the relief\n     provided by Section 262, then the right of such holder to be paid the fair\n     value of such holder's Appraisal Shares under Section 262 shall cease and\n     such Appraisal Shares shall be deemed to have been converted at the\n     Effective Time into, and shall have become, the right to receive the Merger\n     Consideration as provided in Section 2.01(c). The Company shall serve\n     prompt notice to Parent of any demands for appraisal of any shares of\n     Company Common Stock, and Parent shall have the right to participate in and\n     direct all negotiations and proceedings with respect to such demands. Prior\n     to the Effective Time, the Company shall not, without the prior written\n     consent of Parent, make any payment with respect to, or settle or offer to\n     settle, any such demands, or agree to do any of the foregoing.\n\n          SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. As of the\nEffective Time, Parent shall enter into an agreement with a bank or trust\ncompany designated by Parent and reasonably acceptable to the Company (the\n\"Exchange Agent\"), which shall provide that Parent shall, subject to Section\n2.01(d), deposit with the Exchange Agent as of the Effective Time, for the\nbenefit of the holders of shares of Company Common Stock, for exchange in\naccordance with this Article II, through the Exchange Agent, certificates\nrepresenting the shares of Parent Common Stock issuable pursuant to Section 2.01\nin exchange for outstanding shares of Company Common Stock. Parent shall make\navailable to the Exchange Agent from time to time as requested after the\nEffective Time cash necessary to pay dividends and other distributions in\naccordance with Section 2.02(c) and to make payments in lieu of any fractional\nshares of Parent Common Stock in accordance with Section 2.02(e).\n\n          (b) Exchange Procedures. As soon as reasonably practicable after the\nEffective Time, the Exchange Agent shall mail to each holder of record of a\nCertificate whose shares were converted into the right to receive the Merger\nConsideration with respect thereto pursuant to Section 2.01 (i) a letter of\ntransmittal (which shall specify that delivery shall be effected, and risk of\nloss and title to the Certificates shall pass, only upon delivery of the\nCertificates to the Exchange Agent and shall be in such form and have such other\nprovisions as Parent and the Company may reasonably specify) and (ii)\ninstructions for use in\n\n\n\n\n\n\n\nsurrendering the Certificates in exchange for the Merger\nConsideration. Upon surrender of a Certificate for cancelation to the Exchange\nAgent, together with such letter of transmittal, duly completed and validly\nexecuted, and such other documents as may reasonably be required by the Exchange\nAgent, the holder of such Certificate shall receive, subject to Section 2.01(d),\nin exchange therefor a certificate representing that number of whole shares of\nParent Common Stock which such holder has the right to receive pursuant to the\nprovisions of this Article II, certain dividends or other distributions as and\nto the extent specified in Section 2.02(c) and cash in lieu of any fractional\nshare of Parent Common Stock as and to the extent specified in Section 2.02(e),\nand the Certificate so surrendered shall forthwith be canceled. In the event of\na transfer of ownership of Company Common Stock which is not registered in the\ntransfer books of the Company, a certificate representing the proper number of\nshares of Parent Common Stock may be issued to a person other than the person in\nwhose name the Certificate so surrendered is registered if such Certificate\nshall be properly endorsed or otherwise be in proper form for transfer and the\nperson requesting such issuance shall pay any transfer or other taxes required\nby reason of the issuance of shares of Parent Common Stock to a person other\nthan the registered holder of such Certificate or establish to the satisfaction\nof Parent that such tax has been paid or is not applicable. Until surrendered as\ncontemplated by this Section 2.02(b), each Certificate shall be deemed at any\ntime after the Effective Time to represent only the right to receive upon such\nsurrender the Merger Consideration with respect thereto, certain dividends or\ndistributions as and to the extent specified in Section 2.02(c) and any cash in\nlieu of fractional shares of Parent Common Stock to be issued or paid in\nconsideration therefor upon surrender of such certificate as and to the extent\nspecified in Section 2.02(e). No interest shall be paid or will accrue on any\ncash payable to holders of Certificates pursuant to the provisions of this\nArticle II.\n\n          (c) Distributions with Respect to Unexchanged Shares. No dividends or\nother distributions with respect to Parent Common Stock with a record date after\nthe Effective Time shall be paid to the holder of any unsurrendered Certificate\nwith respect to the shares of Parent Common Stock represented thereby, and no\ncash payment in lieu of fractional shares of Parent Common Stock shall be paid\nto any such holder pursuant to Section 2.02(e), in each case until the surrender\nof such Certificate in accordance with this Article II. Subject to the effect of\napplicable escheat or similar laws, following surrender of any such Certificate\nthere shall be paid to the holder of the certificate representing whole shares\nof Parent Common Stock\n\n\n\n\n\n\n\nissued in exchange therefor, without interest, (i) at the time of such\nsurrender, the amount of dividends or other distributions with a record date\nafter the Effective Time theretofore paid with respect to such whole shares of\nParent Common Stock, and the amount of any cash payable in lieu of a fractional\nshare of Parent Common Stock to which such holder is entitled as and to the\nextent specified in Section 2.02(e) and (ii) at the appropriate payment date,\nthe amount of dividends or other distributions with a record date after the\nEffective Time but prior to such surrender and with a payment date subsequent to\nsuch surrender payable with respect to such whole shares of Parent Common Stock.\n\n          (d) No Further Ownership Rights in Company Capital Stock. Subject to\nSection 2.01(d), all shares of Parent Common Stock issued upon the surrender for\nexchange of Certificates in accordance with the terms of this Article II\n(including any cash paid pursuant to this Article II) shall be deemed to have\nbeen issued (and paid) in full satisfaction of all rights pertaining to the\nshares of Company Common Stock theretofore represented by such Certificates, and\nthere shall be no further registration of transfers on the stock transfer books\nof the Surviving Corporation of the shares of Company Common Stock which were\noutstanding immediately prior to the Effective Time. If, after the Effective\nTime, Certificates are presented to the Surviving Corporation or the Exchange\nAgent for any reason, they shall be canceled and exchanged as provided in this\nArticle II, except as otherwise provided by law.\n\n          (e) No Fractional Shares. (i) No certificates or scrip representing\nfractional shares of Parent Common Stock shall be issued upon the surrender for\nexchange of Certificates, no dividend or distribution of Parent shall relate to\nsuch fractional share interests and such fractional share interests will not\nentitle the owner thereof to the right to vote or to any other rights of a\nstockholder of Parent.\n\n          (ii) In lieu of such fractional share interests, Parent shall pay to\n     each former holder of Company Common Stock an amount in cash equal to the\n     product obtained by multiplying (A) the fractional share interest to which\n     such former holder (after taking into account all shares of Company Common\n     Stock held at the Effective Time by such holder) would otherwise be\n     entitled by (B) the last quoted sale price for a share of Parent Common\n     Stock on Nasdaq (as reported in The Wall Street Journal, or, if not\n     reported thereby, any other authoritative source) on the Closing Date.\n\n          (f) No Liability. None of Parent, Sub, the Company or the Exchange\nAgent shall be liable to any person\n\n\n\n\n\n\n\nin respect of any shares of Parent Common Stock, any dividends or distributions\nwith respect thereto or any cash in lieu of fractional shares of Parent Common\nStock, in each case delivered to a public official pursuant to any applicable\nabandoned property, escheat or similar law.\n\n          (g) Lost Certificates. If any Certificate shall have been lost, stolen\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\nParent, the posting by such person of a bond in such reasonable amount as Parent\nmay direct as indemnity against any claim that may be made against it with\nrespect to such Certificate, the Exchange Agent shall issue in exchange for such\nlost, stolen or destroyed Certificate the Merger Consideration with respect\nthereto and, if applicable, any unpaid dividends and distributions on shares of\nParent Common Stock deliverable in respect thereof and any cash in lieu of\nfractional shares, in each case pursuant to this Agreement.\n\n          (h) Withholding Rights. The Exchange Agent shall be entitled to deduct\nand withhold from the consideration otherwise payable to any holder of Company\nCommon Stock pursuant to this Agreement such amounts as may be required to be\ndeducted and withheld with respect to the making of such payment under the Code,\nor under any provision of state, local or foreign Tax law. To the extent that\namounts are so withheld and paid over to the appropriate Taxing Authority, the\nExchange Agent will be treated as though it withheld an appropriate amount of\nthe type of consideration otherwise payable pursuant to this Agreement to any\nholder of Company Common Stock, sold such consideration for an amount of cash\nequal to the fair market value of such consideration at the time of such deemed\nsale and paid such cash proceeds to the appropriate Taxing Authority.\n\n\n                                   ARTICLE III\n\n                         Representations and Warranties\n                                 of the Company\n\n          Except for items disclosed on the disclosure schedule (with specific\nreference to the Section of this Agreement to which the information stated in\nsuch disclosure relates, provided that an item included on the disclosure\nschedule with respect to any Section of this Agreement shall be deemed to relate\nto each other Section of this Agreement to the extent such relationship is\nobvious) delivered by the Company to Parent prior to the execution and delivery\nof this Agreement (the \"Company Disclosure Schedule\"), the Company represents\nand warrants to Parent as follows:\n\n\n\n\n\n\n          SECTION 3.01. Organization and Standing of the Company. Each of the\nCompany and its subsidiaries is duly organized, validly existing and in good\nstanding under the laws of its jurisdiction of incorporation. Each of the\nCompany and its subsidiaries has all requisite corporate or other power and\nauthority necessary to enable it to use its corporate name and to own, lease or\notherwise hold and operate its properties or assets and to carry on its business\nas now being conducted and proposed to be conducted. Each of the Company and its\nsubsidiaries is duly qualified or licensed to do business as a foreign\ncorporation in each jurisdiction in which the nature of its business, or the\nownership, leasing or operation of its properties or assets, requires such\nqualification or licensing, except where the failure to be so qualified is not\nreasonably more likely than not to have a material adverse effect on the\nCompany. The Company has delivered to Parent true and complete copies of its\nAmended and Restated Certificate of Incorporation and By-laws, and the\ncertificates of incorporation and by-laws or other similar organizational\ndocuments of each of its subsidiaries, in each case as amended to the date\nhereof. The respective certificates of incorporation and by-laws or other\nsimilar organizational documents of the subsidiaries of the Company do not\ncontain any provision limiting or otherwise restricting the ability of (i) the\nCompany to control such subsidiaries or (ii) the Company or any of its\nsubsidiaries to engage in any lawful business or activity. The share certificate\nand transfer books and the minute books of the Company and each of its\nsubsidiaries, which have been made available to Parent and its representatives,\nare true and complete in all material respects.\n\n          SECTION 3.02. Authority; Noncontravention. The Company has the\nrequisite corporate or other power and authority to enter into this Agreement\nand to consummate the transactions contemplated hereby. The execution, delivery\nand performance of this Agreement and the consummation by the Company of the\ntransactions contemplated hereby have been duly authorized by all necessary\ncorporate action on the part of the Company and no other corporate proceedings\non the part of the Company are necessary to authorize this Agreement or to\nconsummate the transactions contemplated hereby. This Agreement has been duly\nexecuted and delivered by the Company and, when executed and delivered by Parent\nand Sub, will constitute a legal, valid and binding obligation of the Company,\nenforceable against the Company in accordance with its terms, subject to\napplicable bank ruptcy, insolvency, reorganization, fraudulent transfer and\nsimilar laws of general application relating to or affecting creditors rights\nand to general equitable principles or public policy. The execution and delivery\nof this Agreement do not, and the consummation of the transactions\n\n\n\n\n\n\n\ncontemplated by this Agreement and compliance with the provisions of this\nAgreement will not, conflict with, or result in any violation of or default\n(with or without notice or lapse of time, or both) under, or give rise to a\nright of termination, cancelation or acceleration of any obligation or to loss\nof a material benefit under, or result in the creation of any pledge, claim,\nlien, charge, encumbrance or security interest of any kind or nature whatsoever\n(a \"Lien\") in or upon any of the properties or assets of the Company or any of\nits subsidiaries under, any provision of (i) the Amended and Restated\nCertificate of Incorporation or the By-laws of the Company or the certificates\nof incorporation or by-laws or other similar organizational documents of any of\nits subsidiaries, in each case as amended to the date hereof, (ii) any loan or\ncredit agreement, bond, debenture, note, mortgage, indenture, lease or other\ncontract, commitment, agreement, arrangement, obligation, undertaking,\ninstrument, permit, concession, franchise or license (each a \"Contract\") to\nwhich the Company or any of its subsidiaries is a party or any of their\nrespective properties or assets is subject or (iii) subject to the governmental\nfilings and other matters referred to in the following sentence, any (A)\nstatute, law, ordinance, rule or regulation (a \"Law\") or (B) order, writ,\ninjunction, decree, judgment or stipulation (an \"Order\"), in each case,\napplicable to the Company or any of its subsidiaries or any of their respective\nproperties or assets, other than, in the case of clauses (ii) and (iii), any\nsuch conflicts, violations, defaults, rights, losses or Liens that individually\nor in the aggregate are not reasonably more likely than not to (x) have a\nmaterial adverse effect on the Company or affect Parent in a material and\nadverse way, (y) impair in any material respect the ability of the Company to\nperform its obligations under this Agreement or (z) prevent or materially delay\nthe consummation of any of the transactions contemplated by this Agreement. No\nconsent, approval, order or authorization of, or registration, declaration or\nfiling with, any Federal, state or local, domestic or foreign, government or any\ncourt, administrative agency or commission or other governmental authority or\nagency, domestic or foreign (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 by the Company or the consummation by\nthe Company of the Merger or the other transactions contemplated by this\nAgreement, except for (1) the filing of a premerger notification and report form\nby the Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,\nas amended (the \"HSR Act\"), (2) the filing of the Certificate of Merger with the\nSecretary of State of the State of Delaware and the filing of appropriate\ndocuments with the relevant authorities of other states in which the Company or\nany of its subsidiaries\n\n\n\n\n\n\n\n\nis qualified to do business and (3) such other consents, approvals, orders,\nauthorizations, registrations, declarations and filings the failure of which to\nbe obtained or made individually or in the aggregate are not reasonably more\nlikely than not to (x) have a material adverse effect on the Company, (y) impair\nin any material respect the ability of the Company to perform its obligations\nunder this Agreement or (z) prevent or materially delay the consummation of any\nof the transactions contemplated by this Agreement.\n\n          SECTION 3.03. Capital Stock of the Company. The authorized capital\nstock of the Company consists of 23,236,610 shares of Company Common Stock, of\nwhich (x) 19,372,776 shares have been designated as Company Class A Common Stock\nand (y) 3,863,834 shares have been designated as Company Class B Common Stock,\nand 6,564,610 shares of Convertible Preferred Stock, par value $0.01 per share\n(the \"Company Convertible Preferred Stock\"), all of which have been designated\nas Company Series A Preferred Stock. As of the date hereof (i) 12,500,000 shares\nof Company Class A Common Stock (excluding treasury shares) were issued and\noutstanding, (ii) no shares of Company Class A Common Stock were held by the\nCompany in its treasury, (iii) 720,000 shares of Company Class B Common Stock\n(excluding treasury shares) were issued and outstanding, (iv) no shares of\nCompany Class B Common Stock were held by the Company in its treasury, (v)\n6,564,610 shares of Company Series A Preferred Stock (excluding treasury shares)\nwere issued and outstanding, (vi) no shares of Company Series A Preferred Stock\nwere held by the Company in its treasury, (vii) warrants to acquire 39,070\nshares of Company Class B Common Stock from the Company pursuant to the warrant\nagreements set forth on Section 3.03(a) of the Company Disclosure Schedule (the\n\"Warrants\") were outstanding and (viii) options to acquire 2,282,929 shares of\nCompany Class B Common Stock from the Company pursuant to the 1997 Stock Option\nPlan and the 1999 Stock Option Plan (such plans, collectively, the \"Company\nStock Plans\") were issued and outstanding. Except as set forth above, as of the\ndate of this Agreement no shares of capital stock or other voting securities of\nthe Company or options, warrants or other rights to acquire any such stock or\nsecurities were issued, reserved for issuance or outstanding. There are no\noutstanding stock appreciation rights with respect to shares of Company Capital\nStock. There are no bonds, debentures, notes or other indebtedness of the\nCompany or any of its subsidiaries having the right to vote (or convertible\ninto, or exchangeable for, securities having the right to vote) on any matters\non which stockholders of the Company may vote. Except as set forth above and\nexcept as expressly permitted by Section 5.01(a)(ii), there are no securities,\noptions, warrants, calls, rights or Contracts of any kind to which\n\n\n\n\n\n\n\nthe Company or any of its subsidiaries are a party, or by which the Company or\nany of its subsidiaries is bound, obligating the Company or any of its\nsubsidiaries to issue, deliver or sell, or cause to be issued, delivered or\nsold, shares of capital stock or other securities of the Company or any of its\nsubsidiaries or obligating the Company or any of its subsidiaries to issue,\ngrant, extend or enter into any such security, option, warrant, call, right or\nContract. There are not any outstanding contractual or other obligations of the\nCompany or any of its subsidiaries to (i) repurchase, redeem or otherwise\nacquire any shares of capital stock or other securities of the Company or (ii)\nvote or to dispose of any shares of capital stock or other securities of any of\nits subsidiaries. Section 3.03(b) of the Company Disclosure Schedule sets forth\na true and complete list, as of the date hereof, of all outstanding stock\noptions granted under the Company Stock Plans (collectively, the \"Stock\nOptions\") and the Warrants, the number of shares subject to each such Stock\nOption or Warrant, the grant dates, exercise prices and vesting periods of each\nsuch Stock Option and Warrant and the names of the holders thereof. Section\n3.03(c) of the Company Disclosure Schedule sets forth a true and complete list,\nas of the date hereof, of the identify of each holder of shares of Company\nCapital Stock and the number of shares of each class of Company Common Stock\nowned of record by such holder. All outstanding shares of Company Capital Stock\nare, and all shares that may be issued pursuant to the Company Stock Plans and\nthe Warrants will be, when issued in accordance with the terms thereof, duly\nauthorized, validly issued, fully paid and nonassessable. All the outstanding\nindebtedness for borrowed money of the Company or its subsidiaries is prepayable\nwithout prepayment penalty or premium (other than the payment of customary LIBOR\nbreakage costs), and no indebtedness for borrowed money of the Company or its\nsubsidiaries contains any restriction upon the incurrence of indebtedness for\nborrowed money by the Company or any of its subsidiaries or restricts the\nability of the Company or any of its subsidiaries to grant any Liens on its\nproperties or assets. The Company has outstanding Indebtedness (as defined in\nSection 3.10) (the \"Company Indebtedness\") in the aggregate principal amount of\n$1,101,852.55 as of the date of this Agreement.\n\n          SECTION 3.04. Equity Interests. Section 3.04 of the Company Disclosure\nSchedule lists each subsidiary of the Company. All the outstanding shares of\ncapital stock or other voting or equity interests of each subsidiary of the\nCompany are owned by the Company, by another wholly owned subsidiary of the\nCompany or by the Company and another wholly owned subsidiary of the Company,\nfree and clear of all Liens, and are duly authorized, validly issued, fully paid\nand nonassessable. Except for the capital stock of its\n\n\n\n\n\n\n\n\nsubsidiaries, the Company does not own, directly or indirectly, any capital\nstock or other ownership interest in any person.\n\n          SECTION 3.05. Financial Statements. The Company has delivered to\nParent the audited balance sheet of the Company as of December 31, 1998, and the\nrelated audited statement of income, statement of stockholders' deficit and\nstatement of cash-flows of the Company and its consolidated subsidiaries for the\nfiscal year ended on such date (the financial statements described above are\ncollectively referred to as the \"Financial Statements\"). The Financial\nStatements were derived from and are in accordance in all material respects with\nthe books and records of the Company and its consolidated subsidiaries, have\nbeen prepared in conformity with generally accepted accounting principles\n(\"GAAP\") consistently applied and fairly present the financial condition of the\nCompany and its subsidiaries as of the dates thereof and the results of\noperations of the Company and its subsidiaries for the periods then ended.\n\n          The Company has also delivered to Parent unaudited balance sheets and\nrelated unaudited income statements of income and statements of cash-flows of\nthe Company and its consolidated subsidiaries as of and for the three-month\nperiods ended March 31, June 30 and September 30, 1999 (collectively, the\n\"Unaudited Statements\"). The Unaudited Statements have been prepared in\naccordance in all material respects with GAAP and on a consistent basis with the\nFinancial Statements (except that they do not contain footnotes and are subject\nto normal recurring year-end audit adjustments). There were no changes in the\nmethod of application of the Company's accounting policies or changes in the\nmethod of applying the Company's use of estimates in the preparation of the\nUnaudited Statements as compared with the Financial Statements. Section 3.05 of\nthe Company Disclosure Schedule sets forth, for each fiscal period indicated,\nthe barter revenues generated by the Company and its consolidated subsidiaries\nduring such period.\n\n          SECTION 3.06. Undisclosed Liabilities. Except as set forth or\nreflected on the Financial Statements or the Unaudited Statements (or\nspecifically described in the notes thereto), none of the Company or its\nsubsidiaries has any material liabilities or obligations of any nature (whether\naccrued, absolute, contingent, unasserted or otherwise) except for liabilities\nand obligations incurred since the date of the most recent balance sheet\nincluded in the Unaudited Statements in the ordinary course of business.\n\n          SECTION 3.07. Taxes. (a) As used in this Agreement, (i) \"Taxes\" shall\nmean all Federal, state and local, domestic and foreign, income, franchise,\nproperty,\n\n\n\n\n\n\n\n\nsales, excise, employment, payroll, social security, value-added, ad valorem,\ntransfer, withholding and other taxes, including taxes based on or measured by\ngross receipts, profits, sales, use or occupation, tariffs, levies, impositions,\nassessments or other governmental charges of any nature, including any interest,\npenalties or additions with respect thereto and any obligations under any\nagreements or arrangements with any other person with respect to such amounts;\n(ii) \"Taxing Authority\" shall mean any domestic, foreign, federal, national,\nstate, county or municipal or other local governmental body (including any\nsubdivision, agency or commission thereof), or any quasi-governmental body, in\neach case, exercising regulatory authority in respect of Taxes; and (iii) \"Tax\nReturn\" shall mean all returns, reports and forms, including information\nreturns, with respect to Taxes.\n\n          (b) The Company and each of its subsidiaries, and any affiliated group\n(within the meaning of Section 1504 of the Code) of which the Company or any of\nits subsidiaries is or has ever been a member or any group of corporations with\nwhich the Company or any of its subsidiaries files, has filed or is or was\nrequired to file an affiliated, consolidated, combined, unitary or aggregate Tax\nReturn (each such group, a \"Company Consolidated Group\"), has timely filed or\ncaused to be filed all income and franchise Tax Returns and all other material\nTax Returns required to be filed by each such entity. All such Tax Returns are\ntrue and complete in all material respects. The Company, each of its\nsubsidiaries and each Company Consolidated Group has timely paid or caused to be\ntimely paid (or the Company has timely paid on its subsidiaries' behalf) all\nTaxes due from it or them with respect to the taxable periods covered by such\nTax Returns, and, in accordance with GAAP, the balance sheet of the Company as\nof December 31, 1998, reflects an adequate reserve for all Taxes payable by the\nCompany and each of its subsidiaries for all taxable periods and portions\nthereof through its date. None of the Company, any of its subsidiaries or any\nCompany Consolidated Group has requested any extension of time within which to\nfile any Tax Return which Tax Return has not yet been filed.\n\n          (c) No income or franchise or other material Tax Return of the\nCompany, any of its subsidiaries or any Company Consolidated Group is or has\never been under audit or examination by any Taxing Authority, and no written or\nunwritten notice of such an audit or examination has been received by the\nCompany, any of its subsidiaries or any Company Consolidated Group. Each\nmaterial deficiency, if any, resulting from any audit or examination relating to\nTaxes by any Taxing Authority has been timely paid. The Company has not received\nnotice of any material issues relating to Taxes from the relevant Taxing\nAuthority during\n\n\n\n\n\n\n\n\nany presently pending audit or examination, nor has the Company received notice\nof any material issues relating to Taxes from the relevant Taxing Authority in\nany completed audit or examination that can reasonably be expected to recur in a\nlater taxable period. The relevant statute of limitations is open with respect\nto all Federal income Tax Returns of the Company and each of its subsidiaries.\nThe Company has made available to Parent documents, if any, setting forth the\nyears in which the statute of limitations has not yet expired for the income,\nfranchise and other material Tax Returns of the Company, any of its subsidiaries\nor any Company Consolidated Group and listing the last year in which the\nCompany, any of its subsidiaries or any Company Consolidated Group is subject to\naudit with respect to all income, franchise and other material Tax Returns.\n\n          (d) There is no currently effective agreement or other document\nextending, or having the effect of extending, the period of assessment or\ncollection of any Taxes and no power of attorney with respect to any Taxes has\nbeen executed or filed with any Taxing Authority.\n\n          (e) No material Liens for Taxes exist with respect to any assets or\nproperties of the Company or any of its subsidiaries, except for statutory Liens\nfor Taxes not yet due.\n\n          (f) None of the Company or any of its subsidiaries is a party to or\nbound by any Tax sharing agreement, Tax indemnity obligation or similar\nagreement, arrangement or practice with respect to Taxes (including any advance\npricing agreement, closing agreement or other agreement relating to Taxes with\nany Taxing Authority).\n\n          (g) None of the Company or any of its subsidi aries will be required\nto include in a taxable period ending after the Effective Time taxable income\nattributable to income that accrued in a prior taxable period but was not\nrecognized in any prior taxable period as a result of the installment method of\naccounting, the completed contract method of accounting, the long-term contract\nmethod of accounting, the cash method of accounting or Section 481 of the Code\nor any comparable provision of any other Tax law or for any other reason.\n\n          (h) No amount or other entitlement that could be received (whether in\ncash or property or the vesting of property) as a result of any of the\ntransactions contemplated by this Agreement by any officer, director or employee\nof the Company or its subsidiaries who is a \"disqualified individual\" (as such\nterm is defined in proposed Treasury Regulation Section 1.280G-1) would be\ncharacterized as an \"excess parachute payment\" or a\n\n\n\n\n\n\n\n\"parachute payment\" (as such terms are defined in\nSection 280G(b)(1) of the Code).\n\n          (i) Each of the Company and its subsidiaries has complied in all\nmaterial respects with all applicable laws relating to the payment and\nwithholding of Taxes (including withholding of Taxes pursuant to Sections 1441,\n1442, 3121 and 3402 of the Code or similar provisions of state, local, domestic\nor foreign Tax law) and has, within the time and the manner prescribed by law,\nwithheld from and paid over to the proper governmental authorities all amounts\nrequired to be so withheld and paid over under applicable laws.\n\n          (j) No consent under Section 341(f) of the Code has been filed with\nrespect to the Company or any of its subsidiaries.\n\n          (k) None of the Company or any of its subsidiaries has been a United\nStates real property holding corporation within the meaning of Section 897(c)(2)\nof the Code during the applicable period specified in Section 897(c)(1)(A)(ii)\nof the Code.\n\n          (l) No property owned by the Company or any of its subsidiaries (i)\nconstitutes \"tax exempt use property\" within the meaning of Section 168(h)(1) of\nthe Code or (ii) is tax exempt bond financed property within the meaning of\nSection 168(g) of the Code.\n\n          (m) None of the Company or any of its subsidi aries has ever (i) made\nan election under Section 1362 of the Code to be treated as an S corporation for\nFederal income tax purposes or (ii) made a similar election under any comparable\nprovision of any state, local or foreign Tax law.\n\n          (n) None of the Company or any of its subsidi aries is or ever has\nbeen a personal holding company within the meaning of Section 542 of the Code.\n\n          (o) Section 3.07(o) of the Company Disclosure Schedule sets forth each\nstate, county, local, municipal or foreign jurisdiction in which the Company and\neach of its subsidiaries files, is required or has been required to file a Tax\nReturn relating to state and local income, franchise, license, excise, net worth\nproperty and sales and use Taxes except in a case where the Company or any of\nits subsidiaries is or has been required to file such a Tax Return and such\nfailure to file is not reasonably more likely than not to have a material\nadverse effect on the Company or any of its subsidiaries. No claim has ever been\nmade by a Taxing Authority in a jurisdiction where any of the Company and each\nof its subsidiaries does not file a Tax\n\n\n\n\n\n\n\n\nReturn that it is, or may be subject to, taxation in that jurisdiction.\n\n          (p) None of the Company or any of its subsidi aries has constituted\neither a \"distributing corporation\" or a \"controlled corporation\" (within the\nmeaning of Section 355(a)(1)(A) of the Code) in any distribution of stock\nqualifying for tax-free treatment under Section 355 of the Code (i) within the\ntwo-year period ending on the date of this Agreement or (ii) in a distribution\nwhich could otherwise constitute part of a \"plan\" or \"series of related\ntransactions\" (within the meaning of Section 355(e) of the Code) in conjunction\nwith the purchase of Company Capital Stock contemplated by this Agreement.\n\n          (q) None of the Company or any of its subsidi aries has taken or\nagreed to take any action or knows of any fact, agreement, plan or other\ncircumstance that is reasonably likely to prevent the Merger from qualifying as\na reorganization within the meaning of Section 368(a) of the Code.\n\n          SECTION 3.08. Assets. (a) Each of the Company and its subsidiaries has\ngood and marketable title to, or good and valid leasehold interests in, all of\nits material personal properties and assets (including with respect to all real\nproperty and interests in real property leased by it), in each case, free and\nclear of any Liens, except for such property and assets as are no longer used or\nuseful in the conduct of its businesses and except for defects in title,\neasements, restrictive covenants and similar encumbrances that individually or\nin the aggregate could not reasonably be expected to materially affect the\nability of the Company and its subsidiaries to use such property or assets in\ntheir intended manner.\n\n          (b) Each of the Company and its subsidiaries has complied in all\nmaterial respects with the terms of all material leases to which it is a party\nand under which it is in occupancy, and all such leases are in full force and\neffect, except for such noncompliance or failure to be in full force and effect\nas could not reasonably be expected to materially affect the ability of the\nCompany to obtain the benefit of such leases. Each of the Company and its\nsubsidiaries enjoys peaceful and undisturbed possession in all material respects\nunder all material real property leases to which it is a party.\n\n          (c) None of the Company or any of its subsidi aries holds any fee or\nother ownership interest in any real property. Section 3.08 of the Company\nDisclosure Schedule sets forth a complete list of all real property and\ninterests in real property leased by the Company.\n\n\n\n\n\n\n\n          SECTION 3.09. Intellectual Property, Etc. (a) Section 3.09(a) of the\nCompany Disclosure Schedule sets forth a true and complete list of all patents,\npatent applications, trademark applications and registrations, trade names,\nservice marks, domain names and registered copyrights and mask work rights and\napplications therefor, if any, owned by or licensed to the Company or any of its\nsubsidiaries. All patents, patent applications, trademarks, service marks,\ncopyrights and mask work rights of the Company or any of its subsidiaries have\nbeen duly registered and\/or filed with or issued by each appropriate\nGovernmental Entity in the jurisdictions indicated in Section 3.09(a) of the\nCompany Disclosure Schedule, all necessary affidavits of continuing use have\nbeen filed, and all necessary mainte nance fees have been paid to continue all\nsuch rights in effect. Each of the Company and each of its subsidiaries owns or\nis licensed or otherwise has the right to use, without payment to any other\nperson except for fees set forth in Section 3.09(b) of the Company Disclosure\nSchedule, all Intellectual Property used in or necessary for the conduct of its\nbusiness as presently conducted or as proposed to be conducted by the Company in\naccordance with its business plan dated February 1999, a true and complete copy\nof which has been provided to Parent prior to the date of this Agreement (the\n\"Business Plan\"), in each case free and clear of all Liens. The conduct of the\nCompany's business, as presently conducted and as proposed to be conducted by\nthe Company in accordance with the Business Plan, does not in any material\nrespect conflict with, or result in any violation of or default (with or without\nnotice or lapse of time, or both) under, or give rise to a right of termination,\ncancelation or acceleration of any obligation or loss of a material benefit\nunder, or result in the creation of any Lien in or upon any of the properties or\nassets of the Company or any of its subsidiaries under, any Contract between the\nCompany or any of its subsidiaries and any person or any other Intellectual\nProperty rights of any other person.\n\n          (b) Section 3.09(b) of the Company Disclosure Schedule sets forth a\ntrue and complete list of all options, rights, licenses or interests of any kind\nrelating to Intellectual Property granted to the Company or any of its\nsubsidiaries, other than software licenses for generally available software\n(such as Lotus 1-2-3, WordPerfect and the like) and generally available system\ndevelopment tools, or granted by the Company to any other person.\n\n          (c) All software, other than generally available software (such as\nLotus 1-2-3, WordPerfect and the like) and generally available system\ndevelopment tools, that is either marketed to customers of the Company or any of\nits subsidiaries as a program or as part of a product or service\n\n\n\n\n\n\n\n\nor is used by the Company or any of its subsidiaries to\nsupport its business:\n\n          (i) is owned by the Company or any of its subsidiaries or the Company\n     or any of its subsidiaries has the right to use, modify, copy, sell,\n     distribute, sublicense and make Derivative Works from such software, free\n     and clear of any limitations or Liens; and\n\n          (ii) is free from any interest of any former or present employees of,\n     or contractors or consultants to, the Company or any of its subsidiaries.\n\n          (d) To the extent third party software is marketed to customers of the\nCompany or any of its subsidiaries together with the Intellectual Property of\nthe Company or any of its subsidiaries, (i) the third party rights have been\nidentified in Section 3.09(d) of the Company Disclosure Schedule, (ii) all\nnecessary licenses have been obtained and (iii) no royalties or payments are due\nother than the royalties and payments that are identified in Section 3.09(d) of\nthe Company Disclosure Schedule.\n\n          (e) No material trade secret of the Company or any of its subsidiaries\nhas been published or disclosed by the Company or any of its subsidiaries or, to\nthe knowledge of the Company or any of its subsidiaries, by any other person to\nany person except pursuant to licenses or Contracts requiring such other persons\nto keep such trade secrets confidential.\n\n          (f) None of the Company and its subsidiaries is, and to the knowledge\nof the Company, no other party to any licensing, distributorship or other\nsimilar arrangements with the Company or any of its subsidiaries relating to\nIntellectual Property is, in breach of or default under its obligations under\nsuch arrangements in any material respect.\n\n          (g) No person has any marketing rights to the Intellectual Property of\nthe Company or any of its subsidiaries pursuant to a written agreement.\n\n          (h) None of the Company or any of its subsidi aries has received any\nwritten communications, and no executive officer of the Company has received any\noral communication, alleging the Company or any of its subsidiaries has\ninfringed or violated or, by conducting its businesses as presently conducted\nand as proposed to be conducted by the Company in accordance with the Business\nPlan by the Company or any of its subsidiaries, would\n\n\n\n\n\n\n\ninfringe or violate any of the Intellectual Property of any\nother person.\n\n          (i) To the knowledge of the Company, no person is infringing on or\notherwise violating any right of the Company or any of its subsidiaries in any\nmaterial respect with respect to any material Intellectual Property owned by or\nlicensed to the Company or any of its subsidiaries.\n\n          (j) Each of the Company and its subsidiaries has taken reasonable\nsteps to protect its Intellectual Property consistent with industry practice.\n\n          (k) No licenses or rights have been granted to distribute the source\ncode of, or to use source code to create Derivative Works of, any product\ncurrently marketed by, commercially available from or under development by the\nCompany or any of its subsidiaries for which the Company or any of its\nsubsidiaries possesses the source code. As used herein, \"Derivative Work\" shall\nmean a work that is based upon one or more preexisting works, such as a\nrevision, enhancement, modification, abridgement, condensation, expansion or any\nother form in which such preexisting works may be recast, transformed or\nadapted, and which, if prepared without authorization of the owner of the\ncopyright in such preexisting work, would constitute a copyright infringement.\nFor purposes hereof, a Derivative Work shall also include any compilation that\nincorporates such a preexisting work as well as translations from one human\nlanguage to another and from one type of code to another.\n\n          (l) None of the Company or any of its subsidi aries has assigned, sold\nor otherwise transferred ownership of any Intellectual Property owned by the\nCompany.\n\n          (m) For purposes of this Agreement, \"Intellectual Property\" shall mean\npatents, trademarks (registered or unregistered), service marks, brand names,\ntrade dress, trade names, copyrights, the goodwill associated with the foregoing\nand registrations in any jurisdiction of, and applications in any jurisdiction\nto register, the foregoing, including any extension, modification or renewal of\nany such registration or application; inventions, whether patented, patentable\nor not patentable in any jurisdiction; mask works, trade secrets and\nconfidential proprietary information and rights in any jurisdiction to limit the\nuse or disclosure thereof by any person; writings and other works of commercial\nvalue, whether copyrighted, copyrightable or not copyrightable in any\njurisdiction; registration or applications for registration of copyrights in any\njurisdiction, and any renewals or extensions thereof; any similar intellectual\nproperty or proprietary rights; any computer programs or software (including\nsource code, object\n\n\n\n\n\n\n\ncode and data), other than commercially available computer programs and\nsoftware; and licenses relating to the foregoing.\n\n          SECTION 3.10. Contracts. None of the Company or any of its\nsubsidiaries is a party to or bound by, and none of their properties or assets\nare bound by or subject to, any written or oral:\n\n          (a) Contract not made in the ordinary course of business;\n\n          (b) employment agreement or employment Contract that is not terminable\n     at will by the Company or such subsidiary both without any penalty and\n     without any obligation of the Company or any of its subsidiaries to pay\n     severance or other amounts (including any bonus) other than base salary,\n     accrued commissions, vacation pay and legally mandated benefits;\n\n          (c)(i) employee collective bargaining agreement or other Contract with\n     any labor union, (ii) plan, program or Contract that provides for the\n     payment of bonus, severance, termination or similar type of compensation or\n     benefits upon the termination or resignation of any employee of the Company\n     or such subsidiary or (iii) plan, program or Contract that provides for\n     medical or life insurance benefits for former employees of the Company or\n     such subsidiary or for current employees of the Company or such subsidiary\n     upon their retirement from, or termination of employment with, the Company\n     or such subsidiary (other than health coverage continuation provided under\n     the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended);\n\n          (d) Contract pursuant to which the Company or any of its subsidiaries\n     has agreed not to compete with any person or to engage in any activity or\n     business, or pursuant to which any benefit is required to be given or lost\n     as a result of so competing or engaging;\n\n          (e) Contract with (i) any stockholder of the Company or any of its\n     subsidiaries, (ii) any affiliate of the Company or any of its subsidiaries\n     or of any stockholder of the Company or any of its subsidiaries or (iii)\n     any director, officer or employee of the Company or any of its subsidiaries\n     or of any affiliate of the Company or any of its subsidiaries (other than\n     employment agreements covered by clause (b) above);\n\n          (f) license or franchise pursuant to which the Company or any such\n     subsidiary has agreed to refrain\n\n\n\n\n\n\n\n          from granting license or franchise rights to any other person;\n\n          (g) Contract under which the Company or such subsidiary has (i)\n     incurred any Indebtedness that is currently owing or (ii) given any\n     Guarantee;\n\n          (h) Contract expressly creating or granting a Lien (including Liens\n     upon properties acquired under conditional sales, capital leases or other\n     title retention or security devices);\n\n          (i) Contract providing for future performance by the Company or such\n     subsidiary in consideration of amounts previously paid in excess of $50,000\n     (including any provision requiring \"make good\" or recovery of advertising\n     shortfall (including advertising banners, buttons or account e-mercials));\n\n          (j) Contract providing for payments of royalties to third parties;\n\n          (k) Contract granting a third party any license to Intellectual\n     Property that is not limited to the internal use of such third party;\n\n          (l) Contract providing confidential treatment by the Company or such\n     subsidiary of material third party information;\n\n          (m) Contract which is material in any respect containing (whether in\n     the Contract itself or by operation of law) any provisions dealing with a\n     \"change of control\" or similar event with respect to the Company or such\n     subsidiary;\n\n          (n) Contract granting the other party or any third person \"most\n     favored nation\" status;\n\n          (o) Contract providing for monetary liquidated damages (but not\n     including other kinds of provisions that provide for limiting the maximum\n     amounts payable or for refunds of amounts in the event of a breach or\n     termination of the Contract);\n\n          (p) Contract that expressly guarantees that the materials and\/or\n     services to be provided under the Contract will be Year 2000 Ready (as\n     defined in Section 3.22);\n\n          (q) Contract pursuant to which the Company or any of its subsidiaries\n     is restricted in any material respect in the development, marketing or\n     distribution\n\n\n\n\n\n\n\n     of their respective products or services in competition with that of\n     another;\n\n          (r) Contract which (i) has aggregate future sums due from the Company\n     or such subsidiary in excess of $25,000 and is not terminable by the\n     Company or such subsidiary for a cost of less than $25,000 or (ii) is\n     otherwise material to the business of the Company or such subsidiary as\n     presently conducted or as proposed to be conducted by the Company in\n     accordance with the Business Plan; and\n\n          (s) Contract providing for future performance by the Company or such\n     subsidiary with less than the standard Company or subsidiary charges to be\n     due for such performance.\n\nEach material Contract of the Company and each of its subsidiaries is in full\nforce and effect and is a legal, valid and binding agreement of the Company or\nsuch subsidiary and, to the knowledge of the Company or such subsidiary, of each\nother party thereto, enforceable against the Company or any of its subsidiaries,\nas the case may be, and, to the knowledge of the Company, against the other\nparty or parties thereto, in each case, in accordance with its terms. The\nCompany and each of its subsidiaries has performed or is performing all material\nobligations required to be performed by it under each of its Contracts and is\nnot (with or without notice or lapse of time or both) in breach or default in\nany material respect thereunder; and, to the knowledge of the Company or such\nsubsidiary, no other party to any of its Contracts is (with or without notice or\nlapse of time or both) in breach or default in any material respect thereunder.\nNeither the Company nor any of its subsidiaries knows of any circumstances\nexisting on the date of this Agreement that is reasonably likely to (x) materi\nally adversely affect its ability to perform its obligations under any material\nContract or (y) require the Company to provide advertising or similar services\nunder any provision contained in any Contract requiring \"make good\" or recovery\nof advertising shortfall (including advertising banners, buttons or account\ne-mercials).\n\n          \"Guarantee\" of or by any person shall mean any obligation, contingent\nor otherwise, of such person guaranteeing any indebtedness of any other person\n(the \"primary obligor\") in any manner, whether directly or indirectly, and\nincluding any obligation of such person, direct or indirect, (a) to purchase or\npay (or advance or supply funds for the purchase or payment of) such\nindebtedness or to purchase (or to advance or supply funds for the purchase of)\nany security for the payment of such indebtedness, (b) to purchase property,\nsecurities or\n\n\n\n\n\n\nservices for the purpose of assuring the owner of such indebtedness of the\npayment of such indebtedness or (c) to maintain working capital, equity capital\nor other financial statement condition or liquidity of the primary obligor so as\nto enable the primary obligor to pay such indebtedness; provided, however, that\nthe term Guarantee shall not include endorsements for collection or deposit, in\neither case in the ordinary course of business.\n\n          \"Indebtedness\" of any person shall mean, without duplication, (a) all\nobligations of such person for borrowed money or with respect to deposits or\nadvances of any kind, (b) all obligations of such person evidenced by bonds,\ndebentures, notes or similar instruments, (c) all obligations of such person\nupon which interest charges are customarily paid, (d) all obligations of such\nperson under conditional sale or other title retention agreements relating to\nproperty or assets purchased by such person, (e) all obligations of such person\nissued or assumed as the deferred purchase price of property or services, (f)\nall indebtedness of others secured by (or for which the holder of such\nindebtedness has an existing right, contingent or otherwise, to be secured by)\nany Lien on property owned or acquired by such person, whether or not the\nobligations secured thereby have been assumed, (g) all guarantees by such\nperson, (h) all capital lease obligations of such person, (i) all obligations of\nsuch person in respect of interest rate protection agreements, foreign currency\nexchange agreements or other interest or exchange rate hedging arrangements and\n(j) all obligations of such person as an account party in respect of letters of\ncredit and bankers' acceptances to the extent of any drawdowns thereon.\n\n          SECTION 3.11. Litigation; Decrees. There are no lawsuits, claims,\narbitration or other proceedings or, to the knowledge of the Company,\ninvestigations (\"Litigation\") pending or threatened by or against or affecting\n(other than litigation to which the Company or any of its subsidiaries is not a\nparty that may generally affect the lines of business in which the Company or\nany of its subsidiaries operates) the Company or any of its subsidiaries, or any\nof their respective properties or assets. There is no outstanding Order\napplicable to the Company or any of its subsidiaries or any of their respective\nproperties, assets or businesses having, or that is reasonably more likely than\nnot to have, a material adverse effect on the Company. Section 3.11 of the\nCompany Disclosure Schedule sets forth a complete list of Litigation for which\nlegal process has been served upon the Company or any of its subsidiaries and\nwhich has not been settled or disposed on the date hereof.\n\n\n\n\n\n\n\n\n          SECTION 3.12. Operation of the Business; Absence of Changes or Events.\n(a) Since December 31, 1998, the Company and each of its subsidiaries has\nconducted its business only in the ordinary course and there has not been (i)\nany state of facts, change, effect, condition, development, event or occurrence\nthat has had or is reason ably more likely than not to have a material adverse\neffect with respect to the Company, (ii) any declaration, setting aside or\npayment of any dividend on, or other distribution (whether in cash, stock or\nproperty) in respect of, any of the Company's or any of its subsidiaries'\ncapital stock, or any purchase, redemption or other acquisition of any of the\nCompany's or any of its subsidiaries' capital stock or any other securities of\nthe Company or its subsidiaries or any options, warrants, calls or rights to\nacquire any such shares or other securities, (iii) any split, combination or\nreclassification of any of the Company's or any of its subsidiaries' capital\nstock or any issuance or the authorization of any issuance of any other\nsecurities in respect of, in lieu of or in substitution for shares of the\nCompany's or any of its subsidiaries' capital stock or other securities, (iv)\n(A) any granting by the Company or any of its subsidiaries of any increase in\ncompensation or fringe benefits, except for normal increases of cash\ncompensation in the ordinary course of business, or any payment by (or entering\ninto of any obligation or Contract with respect to any payment by) the Company\nor any of its subsidiaries of any bonus, except for bonuses made in the ordinary\ncourse of business, in each case to any current or former director, officer,\nemployee or consultant, (B) any granting by the Company or any of its\nsubsidiaries to any current or former director, officer or employee of any\nincrease in severance or termination pay, (C) any entry by the Company or any of\nits subsidiaries into, or any amendment of, (1) any currently effective\nemployment, severance, termination or indemnification or consulting agreement\nwith any current or former director, officer, employee or consultant, or (2) any\nagreement with any current or former director, officer, employee or consultant\nthe benefits of which are contingent, or the terms of which are materially\naltered, upon the occurrence of a transaction involving the Company of the type\ndescribed in this Agreement, (D) any adoption of, or amendment to, a Benefit\nPlan (other than amendments required by law or required to maintain the\nqualified status of a Benefit Plan), (v) any damage, destruction or loss,\nwhether or not covered by insurance, that individually or in the aggregate is\nreasonably more likely than not to have a material adverse effect on the\nCompany, (vi) any change in financial or tax accounting methods, principles or\npractices by the Company or any of its subsidiaries, except insofar as may have\nbeen required by a change in GAAP or applicable law, (vii) any Tax election that\nindividually or in the aggregate is reasonably more likely than not to have a\n\n\n\n\n\n\n\n\nmaterial adverse effect on the Tax liabilities or Tax attributes of the Company\nor any of its subsidiaries or any settlement or compromise with respect to any\nmaterial income Tax liability, (viii) any revaluation by the Company or any of\nits subsidiaries of any of its material assets or (ix) any Contract with regard\nto the acquisition or disposition of any material Intellectual Property or\nrights thereto other than licenses in the ordinary course of business.\n\n          (b) Since December 31, 1998, except for transactions between the\nCompany and Parent, each of the Company and its subsidiaries has continued all\npricing, sales, receivables and payables production practices substantially in\naccordance with the ordinary course of business and has not engaged in (i) any\ntrade loading practices or any other promotional sales or discount activity with\nany customers or distributors with the effect of accelerating to pre-Closing\nperiods sales to the trade or otherwise that would otherwise be expected (based\non past practice) to occur in post-Closing periods, (ii) any practice which\nwould have the effect of accelerating to preClosing periods collections of\nreceivables that would otherwise be expected (based on past practice) to be made\nin post-Closing periods, (iii) any practice which would have the effect of\npostponing to post-Closing periods payments by the Company or any of its\nsubsidiaries that would otherwise be expected (based on past practice) to be\nmade in pre- Closing periods or (iv) any other promotional sales, discount\nactivity or inventory overstocking or understocking in a manner outside the\nordinary course of business.\n\n          SECTION 3.13. Compliance with Applicable Laws. (a) The Company and\neach of its subsidiaries and their respective properties, assets, operations and\nbusinesses have been and are being operated and have been and are in compliance\nwith all applicable Laws, except to the extent the failure to so comply is not\nreasonably more likely than not to have a material adverse effect on the\nCompany.\n\n          (b) The Company and each of its subsidiaries has obtained all material\nfranchises, licenses, permits, authorizations and approvals (\"Permits\") that are\nrequired with respect to the operation of its business and the ownership of its\nassets under Federal, state, local and foreign Laws, including environmental,\nhealth and safety laws and import\/export laws, other than any Permits the\nfailure of which to obtain individually or in the aggregate are not reasonably\nmore likely than not to have a material adverse effect on the Company. The\nCompany and each of its subsidiaries is in compliance in all material respects\nwith all terms and conditions of such Permits.\n\n\n\n\n\n\n\n\n          (c) There are no past or present conditions, circumstances,\nactivities, practices, incidents, actions or plans that are reasonably likely to\n(i) interfere with or prevent compliance or continued compliance by the Company\nor any of its subsidiaries with any environmental, health and safety laws\ngoverning the Company's or any of its subsidiaries' present and currently\ncontemplated future operations or with any Law, Order, notice or demand letter\nissued, entered, promulgated or approved thereunder or (ii) give rise to any\nliability of the Company or any of its subsidiaries under any environmental,\nhealth and safety law governing the Company's or any of its subsidiaries' past,\npresent and currently contemplated future operations, other than, in each case,\ncircumstances, activities, practices, incidents, actions or plans that are\nreasonably more likely than not to have a material adverse effect on the\nCompany.\n\n          SECTION 3.14. Certain Employee Matters. (a) To the knowledge of the\nCompany, no director, officer or other employee of the Company or any of its\nsubsidiaries is a party to or bound by any Contract, or subject to any Order of\nany Governmental Entity, that may interfere with the use of such director's,\nofficer's or other employee's best efforts to promote the interests of the\nCompany and its subsidiaries, conflict with the business of the Company or any\nof its subsidiaries (as now conducted or as proposed to be conducted) or the\ntransactions contemplated by this Agreement or is reasonably more likely than\nnot to have a material adverse effect on the Company. To the knowledge of the\nCompany, no activity of any employee of the Company or any of its subsidiaries\nas or while an employee of the Company or any such subsidiary has caused a\nviolation of any employment agreement, confidentiality agreement, patent\ndisclosure agreement or other Contract. To the knowledge of the Company, the\nexecution and delivery of this Agreement do not, and the consummation of the\ntransactions contemplated by this Agreement and compliance with the provisions\nof this Agreement will not, conflict with, or result in any violation of, or\ndefault (with or without notice or lapse of time, or both) under, or give rise\nto a right of termination, cancelation or acceleration of any obligation to or\nloss of a material benefit under, any Contract under which any such employees\nare now obligated.\n\n          (b) All former and current employees, contractors and consultants of\nthe Company and each of its subsidiaries, including all employees, contractors\nand consultants involved in the development of Intellectual Property of the\nCompany and each of its subsidiaries, have executed and delivered to the Company\na confidential information agreement that is substantially similar in content to\nthe form attached as Exhibit A hereto restricting such person's right to use and\ndisclose confidential information of the\n\n\n\n\n\n\n\n\nCompany and its subsidiaries. All such persons have been party to a proprietary\nrights agreement that is substantially similar in content to the form attached\nas Exhibit A hereto with the Company or any of its subsidiaries, during the\nentire term of each such person's employment with or retention by the Company or\nby such subsidiary, pursuant to which either (i) in accordance with applicable\nFederal, state and foreign law, the Company or such subsidiary has been accorded\nfull, effective, exclusive and original ownership of all material Intellectual\nProperty thereby arising or (ii) there has been conveyed to the Company or such\nsubsidiary by appropriately executed instruments of assignment full, effective\nand exclusive ownership of all tangible and intangible property, including\ninventions relating to the business of the Company and its subsidiaries and\nthereby arising within the scope of their employment or engagement by or with\nthe Company or such subsidiary, copies of which agreements have been made\navailable to Parent prior to the date hereof. No employee, contractor or\nconsultant has made any material alteration or modification to the form of\nagreement attached as Exhibit A hereto. No employee, contractor or consultant of\nthe Company who has contributed to, or participated in, the conception and\ndevelopment of Intellectual Property for the Company or any of its subsidiaries\nhas asserted or threatened any claim against the Company or such subsidiary in\nconnection with such person's involvement in the conception and development of\nsuch Intellectual Property and to the knowledge of the Company no such person\nhas a reasonable basis for any such claim.\n\n          (c) None of the officers, employees or (to the knowledge of the\nCompany) contractors or consultants of the Company or any of its subsidiaries\nhas any patents issued or applications pending for any device, process, method,\ndesign or invention of any kind that was developed after the date on which such\nperson became an officer or employee of the Company or any of its subsidiaries\nor, to the knowledge of the Company, prior to the date on which such person\nbecame such an officer or employee, in each case that is now used or needed by\nthe Company or such subsidiary in the furtherance of its business operations as\npresently conducted or as proposed to be conducted by the Company or such\nsubsidiary in accordance with the Business Plan, which patents or applications\nhave not been assigned to the Company or such subsidiary with such assignment\nduly recorded in the United States Patent and Trademark Office or with the\napplicable foreign Governmental Entity.\n\n          (d) None of the employees of the Company or any of its subsidiaries\nare represented by any union with respect to their employment by the Company or\nsuch subsidiary. Since the date of its incorporation, neither\n\n\n\n\n\n\n\nthe Company nor any of its subsidiaries has experienced any labor disputes,\nunion organization attempts or work stoppage due to labor disagreements. Each of\nthe Company and its subsidiaries is in compliance in all material respects with\nall applicable Laws respecting employment and employment practices, occupational\nsafety and health standards, terms and conditions of employment and wages and\nhours, and is not engaged in any unfair labor practice. The Company has not\nreceived notice of any unfair labor practice charge or complaint against the\nCompany or any of its subsidiaries which is pending and, to the knowledge of the\nCompany, there is no unfair labor practice charge or complaint against the\nCompany threatened before the National Labor Relations Board or any comparable\nstate or foreign agency or authority. There is no labor strike, dispute, request\nfor representation, slowdown or stoppage actually pending or threatened against\nor affecting the Company or any of its subsidiaries. No question concerning\nrepresentation has been raised or is, to the knowledge of the Company,\nthreatened respecting the employees of the Company or any of its subsidiaries.\nNo employment-related grievance which is reasonably more likely than not to have\na material adverse effect on the Company, nor any arbitration proceeding arising\nout of collective bargaining agreements, is pending or, to the knowledge of the\nCompany, threatened against the Company or any of its subsidiaries.\n\n          (e) Section 3.14(e) of the Company Disclosure Schedule sets forth a\ncomplete and accurate list of all current employees of the Company and each of\nits subsidiaries, including their title, current compensation, bonus and\ncommission structure and whether any such employee was, to the knowledge of the\nCompany, formerly an employee of Parent.\n\n          (f) Section 3.14(f) of the Company Disclosure Schedule sets forth (i)\nthe name of each employee of the Company entitled to severance benefits payable\nas of the Effective Time or upon termination of employment after the Effective\nTime pursuant to any individual employment, severance, termination or change of\ncontrol agreement or arrangement between the Company or any of its subsidiaries\nand such employee, (ii) the category or type of each such severance benefit to\nwhich such employee is entitled, (iii) the aggregate value of each such\nseverance benefit payable as of the Effective Time and each such severance\nbenefit that would be payable upon termination of employment after the Effective\nTime, other than the acceleration of Stock Options issued pursuant to the 1999\nStock Option Plan, and (iv) the aggregate value of severance that would be paid\nto each employee set forth on Section 3.14(f) of the Company Disclosure Schedule\nupon termination of employment based on the terms of any severance plan or plans\napplicable to such\n\n\n\n\n\n\nemployee in effect at the Effective Time other than the acceleration of Stock\nOptions issued pursuant to the 1999 Stock Option Plan, as described in Section\n3.14(f) of the Company Disclosure Schedule.\n\n          SECTION 3.15. Benefit Plans. (a) Section 3.15(a) of the Company\nDisclosure Schedule contains a list of each \"employee pension benefit plan\" (as\ndefined in Section 3(2) of the Employee Retirement Income Security Act of 1974,\nas amended (\"ERISA\")) (hereinafter a \"Pension Plan\"), \"employee welfare benefit\nplan\" (as defined in Section 3(1) of ERISA, hereinafter a \"Welfare Plan\"), stock\noption, stock purchase, deferred compensation plan or arrangement, and other\nemployee fringe benefit plan or arrangement maintained, contributed to or\nrequired to be maintained or contributed to by the Company and its subsidiaries\nor any other person or entity that, together with the Company, is treated as a\nsingle employer under Section 414(b), (c), (m) or (o) of the Code (each a\n\"Commonly Controlled Entity\") or any entity that is considered a co-employer\nwith the Company or any Commonly Controlled Entity for the benefit of any\npresent or former officers, employees, directors or independent contractors of\nthe Company or any of its subsidiaries (all the foregoing being herein called\n\"Benefit Plans\"). The Company has delivered to Parent true and complete copies\nof (1) each Benefit Plan (or, in the case of any unwritten Benefit Plans,\ndescriptions thereof), (2) the two most recent annual reports on Form 5500 filed\nwith the Internal Revenue Service with respect to each Benefit Plan (if any such\nreport was required by applicable law), (3) the most recent summary plan\ndescription for each Benefit Plan for which such a summary plan description is\nrequired by applicable law and (4) each trust agreement and insurance or annuity\ncontract relating to any Benefit Plan. No Benefit Plan is a defined benefit plan\n(within the meaning of Section 3(35) of ERISA) or is subject to Title IV of\nERISA or the minimum funding requirements of Section 412 of the Code or Section\n302 of ERISA.\n\n          (b) Each Benefit Plan has been administered in all material respects\nin accordance with its terms. The Company, its subsidiaries and all the Benefit\nPlans are in compliance in all material respects with the applicable provisions\nof ERISA and the Code. All reports, returns and similar documents with respect\nto the Benefit Plans required to be filed with any governmental agency or\ndistributed to any Benefit Plan participant have been duly and timely filed or\ndistributed. The Company has received no notice, and to the Company's knowledge,\nthere are no investigations by any governmental agency, termination proceedings\nor other claims (except claims for benefits payable in the normal operation of\nthe Benefit Plans), suits or proceedings against or\n\n\n\n\n\n\n\n\ninvolving any Benefit Plan or asserting any rights or claims to benefits under\nany Benefit Plan that could give rise to any material liability, and there are\nnot any facts that could give rise to any material liability in the event of any\nsuch investigation, claim, suit or proceeding.\n\n          (c) All contributions to, and payments from, the Benefit Plans that\nmay have been required to be made in accordance with the terms of the Benefit\nPlans and any applicable collective bargaining agreement have been timely made.\n\n          (d) Each Benefit Plan that is a Pension Plan (hereinafter, a \"Company\nPension Plan\") has been the subject of a determination letter from the Internal\nRevenue Service to the effect that such Company Pension Plan, or the prototype\ndocument on which it is based, is qualified and exempt from Federal income taxes\nunder Sections 401(a) and 501(a), respectively, of the Code; no such\ndetermination letter has been revoked, and, to the knowledge of the Company,\nrevocation has not been threatened; and such Company Pension Plan has not been\namended since the effective date of its most recent determination letter in any\nrespect that might adversely affect its qualification, materially increase its\ncost or require security under Section 307 of ERISA. The Company has delivered\nto Parent a copy of the most recent determination letter received with respect\nto each Company Pension Plan for which such a letter has been issued, as well as\na copy of any pending application for a determination letter. The Company has\nalso provided to Parent a list of all Company Pension Plan amendments as to\nwhich a favorable determination letter has not yet been received. No event has\noccurred that could subject any Company Pension Plan to tax under Section 511 of\nthe Code.\n\n          (e) With respect to each Benefit Plan, (i) there has not occurred any\nprohibited transaction in which the Company or any of its employees has engaged\nthat could subject the Company or any of its employees, or, to the knowledge of\nthe Company, a trustee, administrator or other fiduciary of any trust created\nunder any Benefit Plan to the tax or penalty on prohibited transactions imposed\nby Section 4975 of ERISA or the sanctions imposed under Title I of ERISA, and\n(ii) neither the Company or, to the knowledge of the Company, any trustee,\nadministrator or other fiduciary of any Benefit Plan nor any agent of any of the\nforegoing has engaged in any transaction or acted in a manner that could, or\nfailed to act so as to, subject the Company or, to the knowledge of the Company,\nany trustee, administrator or other fiduciary to any liability for breach of\nfiduciary duty under ERISA or any other applicable law.\n\n\n\n\n\n\n\n\n          (f) The list of Welfare Plans in Section 3.15(f) of the Company\nDisclosure Schedule discloses whether each Welfare Plan is (i) unfunded, (ii)\nfunded through a \"welfare benefit fund\", as such term is defined in Section\n419(e) of the Code, or other funding mechanism or (iii) insured. Each such\nWelfare Plan may be amended or terminated without material liability to the\nCompany at any time after the Closing Date. The Company and its subsidiaries\ncomply in all material respects with the applicable requirements of Section\n4980B(f) of the Code with respect to each Benefit Plan that is a group health\nplan, as such term is defined in Section 5000(b)(1) of the Code.\n\n          (g) No employee of the Company will be entitled to any additional\nbenefits or any acceleration of the time of payment or vesting of any benefits\nunder any Benefit Plan as a result of the transactions contemplated by this\nAgreement.\n\n          SECTION 3.16. Insurance. Section 3.16 of the Company Disclosure\nSchedule sets forth a complete and accurate list and description, including\nannual premiums and deductibles, of all policies of fire, liability, product\nliability, workmen's compensation, health and other forms of insurance presently\nin effect on the date hereof with respect to the Company's and its subsidiaries'\nbusiness, true and complete copies of which have been delivered to, or made\navailable for review by, Parent. All such policies are valid, outstanding and\nenforceable policies. The Company reasonably believes such policies are\nsufficient to protect the properties, assets, operations and business of the\nCompany and each of its subsidiaries against the risks of the sort normally\ninsured by similar businesses. No notice of cancelation or termination has been\nreceived with respect to any such policy.\n\n          SECTION 3.17. Customers; Effect of Transaction. (a) The Company does\nnot have any customer to whom it made more than 5% of its sales during its most\nrecent six-month period. During the past two years, the Company has received no\ncustomer complaints concerning its products and services, nor has it had any of\nits products returned by a purchaser thereof, other than complaints and returns\nin the ordinary course of business.\n\n          (b) No creditor, supplier, employee, client or other customer or other\nperson having a material business relationship with the Company or any of its\nsubsidiaries has informed any officer of the Company or such subsidiary orally\nor in writing or has informed the Company or such subsidiary in writing that\nsuch person intends to materially change the relationship because of the\ntransactions contemplated by this Agreement.\n\n\n\n\n\n\n\n\n          SECTION 3.18. Disclosure. Neither the Company nor any of its\nsubsidiaries has failed to disclose to Parent any fact that is reasonably more\nlikely than not to have a material adverse effect on the Company or any of its\nsubsidiaries or impede or impair the ability of the Company to perform its\nobligations under this Agreement in any material respect. The representations or\nwarranties of the Company contained in this Agreement, together with the\nstatements contained in the Company Disclosure Schedule, and the certificates\nand other documents or instruments delivered or to be delivered pursuant to this\nAgreement by or on behalf of the Company or any of its subsidiaries to Parent or\nany of its representatives, taken as a whole, do not contain any untrue\nstatement of a material fact, or omit to state any material fact necessary, in\nlight of the circumstances under which they were or will be made, in order to\nmake the statements herein or therein not misleading.\n\n          SECTION 3.19. Information Supplied. None of the information supplied\nby the Company specifically for and delivered in connection with the\nsolicitation by the Company of the Consents (the \"Consent Solicitation\")\ncontained any untrue statement of a material fact or omitted to state any\nmaterial fact as of the date such information was given to the Stockholders\nrequired to be stated therein or necessary in order to make the statements\ntherein, in light of the circumstances under which they are made, taken as a\nwhole, not misleading. Notwithstanding the foregoing, no representation or\nwarranty is made by the Company with respect to information supplied by Parent\nspecifically for and delivered in connection with the Consent Solicitation.\n\n          SECTION 3.20. Consent Solicitation; Voting Requirements. Section 3.20\nof the Company Disclosure Schedule sets forth a list of the stockholders of the\nCompany who executed and delivered Consents, the number of shares of each class\nof Company Capital Stock owned of record by each such stockholder on the Record\nDate and the number of shares of each class of Company Capital Stock held of\nrecord by such Stockholder on the Record Date with respect to which a Consent\nwas delivered to the Secretary of the Company. The affirmative vote or consent\nof the holders of a majority of the outstanding shares of Company Series A\nPreferred Stock, voting separately as a class (the \"Preferred Stock Approval\"),\nis the only vote or consent of the holders of any class or series of Company\nCapital Stock necessary to approve the execution and delivery of this Agreement\nby the Company. The affirmative vote or consent of each of (a) the holders of a\nmajority of the outstanding shares of Company Series A Preferred Stock and (b)\nthe holders of a majority of the outstanding shares of Company Series A\nPreferred Stock and Company Class A Common Stock,\n\n\n\n\n\n\n\nin each case voting as a class (the \"Capital Stock Approval\" and, together with\nthe Preferred Stock Approval, the \"Stockholder Approval\"), are the only votes or\nconsents of the holders of any class or series of Company Capital Stock\nnecessary to adopt this Agreement. As of the date hereof (x) holders\nrepresenting 100% of the shares of Company Series A Preferred Stock outstanding\nas of the Record Date have delivered the Preferred Stock Consents to the\nSecretary of the Company and (y) holders representing 100% of the shares of\nCompany Series A Preferred Stock and Company Class A Common Stock outstanding as\nof the Record Date have delivered the Stockholder Consents to the Secretary of\nthe Company. The record date under the DGCL and the Amended and Restated\nCertificate of Incorporation and the By-laws of the Company for purposes of\ndetermining stockholders of the Company entitled to give consents with respect\nto the Stockholder Approval is the Record Date. The Company has delivered to\neach Stockholder a copy of the letter attached as Exhibit B hereto, together in\nthe same package with the form of written consent to be executed and delivered\nby such person. The Consents were obtained in accordance with applicable Law and\nthe Stockholder Approval has been obtained.\n\n          SECTION 3.21. Brokers. No broker, investment banker, financial advisor\nor other person is entitled to any broker's, finder's, financial advisor's or\nother similar fee or commission in connection with the transactions contemplated\nby this Agreement based upon arrangements made by or on behalf of the Company.\n\n          SECTION 3.22. State Takeover Statutes. The Board of Directors of the\nCompany has approved the Merger and this Agreement and the other transactions\ncontemplated by this Agreement, and such approval is sufficient to render\ninapplicable to the Merger and this Agreement and the other transactions\ncontemplated by this Agreement, any state takeover statute or similar Law that\nwould otherwise be applicable to the Merger and this Agreement and the other\ntransactions contemplated by this Agreement.\n\n          SECTION 3.23. Year 2000 Compliance. All computer and other systems,\nsoftware (whether embedded or otherwise), hardware and other products (other\nthan motherboards) owned or licensed by the Company or any of its subsidiaries\nand used in connection with the services provided by the Company and, to the\nCompany's knowledge, all computer and other systems, software (whether embedded\nor otherwise), hardware and other products (other than motherboards) produced by\nany third party that are licensed by the Company or any of its subsidiaries\nunder a license that does not explicitly disclaim liability with respect to\nfailures of such products to be Year 2000 Ready, in each case have been written,\n\n\n\n\n\n\n\nmanufactured and tested to be Year 2000 Ready, except where the failure to be\nYear 2000 Ready individually or in the aggregate is not reasonably more likely\nthan not to have a material adverse effect on the Company. For purposes of this\nAgreement, \"Year 2000 Ready\" shall mean, with respect to any system, software\n(whether embedded or otherwise), product, equipment or facility, that such\nsystem, product, equipment or facility is capable of correctly processing,\nproviding, receiving and manipulating date data within and between the twentieth\nand twenty-first centuries, and its operation and functionality has not been\nadversely affected and will not be adversely affected in any respect as a result\nof the advent of the Year 2000.\n\n          SECTION 3.24. Customer Accounts Receivable. All customer accounts\nreceivable of the Company, whether reflected on the Unaudited Statements or\nsubsequently created, have arisen from bona fide transactions in the ordinary\ncourse of business. The Company reasonably believes all such customer accounts\nreceivable are good and collectible at the aggregate recorded amounts thereof,\nnet of any applicable reserves for doubtful accounts reflected on the Unaudited\nStatements. The Company has good and marketable title to its accounts\nreceivable, free and clear of all Liens. Since the September 30, 1999, there\nhave not been any write-offs as uncollectible of any accounts receivable of the\nCompany, except for write-offs in the ordinary course of business.\n\n          SECTION 3.25. Corporate Name. The Company (i) has the exclusive right\nto use its name as the name of a corporation in any jurisdiction in which the\nCompany does business and (ii) has not received any notice of conflict during\nthe past two years with respect to the rights of others regarding the corporate\nname of the Company. To the knowledge of the Company, no person is presently\nauthorized by the Company to use the name of the Company.\n\n          SECTION 3.26. Accounts; Safe Deposit Boxes; Powers of Attorney;\nOfficers and Directors. Section 3.26 of the Company Disclosure Schedule sets\nforth (i) a true and correct list of all bank and savings accounts, certificates\nof deposit and safe deposit boxes of the Company and its subsidiaries and those\npersons authorized to sign thereon, (ii) a true and correct list of all powers\nof attorney granted by the Company and its subsidiaries and those persons\nauthorized to act thereunder and (iii) a true and correct list of all officers\nand directors of the Company and its subsidiaries.\n\n          SECTION 3.27. Traffic. Section 3.27 of the Company Disclosure Schedule\nsets forth for each of August, September and October of 1999, true and complete\ntraffic\n\n\n\n\n\n\n\n\nmetrics relating to (a) banner impressions in inventory,1 (b) paid pop-up\nimpressions,2 (c) e-mercial impressions in inventory, (d) sent Gamesville Times\nnewsletter e-mails and (e) game starts for each game. The Company has not paid\nany third party any fee for traffic referrals.\n\n          SECTION 3.28. Underdeliveries under Advertising Contracts. The Company\nhas no underdelivered services in amounts in excess of 100,000 advertising\nbanners per month under any of its advertising Contracts during the six-month\nperiod ended September 30, 1999.\n\n\n                                   ARTICLE IV\n\n                Representations and Warranties of Parent and Sub\n\n          Except for items disclosed on the disclosure schedule (with specific\nreference to the SECTION of this Agreement to which the information stated in\nsuch disclosure relates) delivered by Parent to the Company prior to the\nexecution and delivery of this Agreement (the \"Parent Disclosure Schedule\"),\nParent and Sub represent and warrant to the Company as follows:\n\n          SECTION 4.01. Organization. Each of Parent and Sub is a corporation\nduly organized, validly existing and in good standing under the laws of its\njurisdiction of incorporation and has all requisite power and authority to own,\nlease and otherwise hold and operate its assets and to carry on its business as\nnow being conducted.\n\n          SECTION 4.02. Authority; Noncontravention. Eachof Parent and Sub has\nthe requisite corporate power and authority to enter into this Agreement, the\nEscrow Agreement and the Registration Rights Agreement and to consummate the\ntransactions contemplated hereby and thereby. The execution, delivery and\nperformance of this Agreement, the Escrow Agreement and the Registration Rights\nAgreement and the consummation by Parent and Sub of the transactions\ncontemplated hereby and thereby have been duly authorized by all necessary\ncorporate action on the part of Parent and Sub and no other corporate\nproceedings on the part of Parent and Sub are necessary to authorize this\nAgreement or to consummate the transactions contemplated hereby. Each of this\nAgreement, the Escrow Agreement and the Registration \n\n--------- \n1 This number should be calculated assuming no more than one 468 x 60 banner \n  per page.\n\n2 This number should be exclusive of the e-mercial navigation pop-up.\n\n\n\n\n\n\n\nRights Agreement has been duly executed and delivered by Parent and Sub and,\nwhen executed and delivered by the Company, constitutes a legal, valid and\nbinding obligation of each of Parent and Sub, enforceable against Parent and Sub\nin accordance with its terms. The execution and delivery of each of this\nAgreement, the Escrow Agreement and the Registration Rights Agreement do not,\nand the consummation of the transactions contemplated by this Agreement, the\nEscrow Agreement and the Registration Rights Agreement and compliance with the\nprovisions hereof and thereof will not, conflict with, or result in any\nviolation of, or default (with or without notice or lapse of time, or both)\nunder, or give rise to a right of termination, cancelation or acceleration of\nany obligation or to loss of a material benefit under, or result in the creation\nof any Lien, in or upon any of the properties or assets of Parent under, any\nprovision of (i) the certificate of incorporation or by-laws of Parent or Sub,\nin each case as amended to the date hereof, (ii) any Contract applicable to\nParent or Sub or their respective properties or assets or (iii) subject to the\ngovernmental filings and other matters referred to in the following sentence,\nany (A) Law or (B) Order, in each case, applicable to Parent or Sub or their\nrespective properties or assets, other than, in the case of clauses (ii) and\n(iii), any such conflicts, violations, defaults, rights, losses or Liens that\nindividually or in the aggregate is not reasonably more likely than not to (x)\nimpair in any material respect the ability of Parent or Sub to perform its\nobligations under this Agreement, (y) prevent or materially delay the\nconsummation of any of the transactions contemplated by this Agreement or (z)\nhave a material adverse effect on Parent. No consent, approval, order or\nauthorization of, or registration, declaration or filing with, any Governmental\nEntity is required by or with respect to Parent or Sub in connection with the\nexecution and delivery of this Agreement, the Escrow Agreement or the\nRegistration Rights Agreement by Parent or Sub or the consummation by Parent or\nSub of the Merger or the other transactions contemplated by this Agreement,\nexcept for (1) the filing by the Company of a premerger notification and report\nform by Parent under the HSR Act, (2) the filing of the Certificate of Merger\nwith the Secretary of State of the State of Delaware and (3) such other\nconsents, approvals, orders, authorizations, registrations, declarations and\nfilings the failure of which to be obtained or made individually or in the\naggregate is not reasonably more likely than not to have a material adverse\neffect on Parent or impair in any material respect the ability of Parent or Sub\nto perform its obligations under this Agreement, the Escrow Agreement or the\nRegistration Rights Agreement or prevent or materially delay the consummation of\nany of the transactions contemplated by this Agreement, the Escrow Agreement or\nthe Registration Rights Agreement.\n\n\n\n\n\n\n\n          SECTION 4.03. Capital Stock of Parent. (a) The authorized capital\nstock of Parent consists of 300,000,000 shares of Parent Common Stock, of which\n96,323,590 shares were issued and outstanding on November 19, 1999, and\n5,000,000 shares of Preferred Stock, par value $0.01 per share, none of which\nwere issued or outstanding on November 19, 1999. Except as set forth in Section\n4.03 of the Parent Disclosure Schedule, all the issued and outstanding shares of\nParent Common Stock are (and all shares of Parent Common Stock to be issued in\nconnection with the Merger, including shares to be issued upon the exercise of\nthe Adjusted Options when issued in accordance with this Agreement, shall be)\nduly authorized, validly issued, fully paid and nonassessable, and none of such\nshares has been or will be issued in violation of any applicable preemptive\nrights or applicable Federal securities laws.\n\n          (b) The authorized capital stock of Sub consists of 1,000 shares of\ncommon stock, par value $0.01 per share, of which 1,000 shares are issued and\noutstanding, all of which shares are owned beneficially and of record by Parent.\n\n          SECTION 4.04. Parent SEC Documents. Parent has filed with the\nSecurities and Exchange Commission (the \"SEC\") all reports, schedules, forms,\nstatements and other documents required to be filed with the SEC since August 1,\n1998 (collectively, the \"Parent SEC Documents\"). Copies of all such documents\nfiled after November 12, 1999 shall be provided to the Company promptly\nfollowing the filing thereof. As of their respective dates, the Parent SEC\nDocuments complied in all material respects with the requirements of the\nSecurities Act or the Exchange Act, as the case may be, and the rules and\nregulations of the SEC promulgated thereunder applicable to such Parent SEC\nDocuments, and none of the Parent SEC Documents at the time they were filed and\nas of the date hereof contained or contain any untrue statement of a material\nfact or omitted or omit to state a material fact required to be stated therein\nor necessary in order to make the statements therein, in light of the\ncircumstances under which they were made, not misleading. The financial\nstatements of Parent included in the Parent SEC Documents complied, as of their\nrespective dates of filing with the SEC, in all material respects with\napplicable accounting requirements and the published rules and regulations of\nthe SEC with respect thereto, have been prepared in accordance with GAAP\n(except, in the case of unaudited statements, as permitted by Form 10-Q of the\nSEC) applied on a consistent basis during the periods involved (except as may be\nindicated in the notes thereto) and fairly presented in all material respects\nthe consolidated financial position of Parent and its consolidated subsidiaries\nas of the dates thereof and the\n\n\n\n\n\n\n\nconsolidated results of their operations and cash flows for the periods then\nended (subject, in the case of unaudited statements, to normal year-end audit\nadjustments and the absence of footnotes).\n\n          SECTION 4.05. Absence of Certain Changes or Events. Except for its\nobligations under this Agreement or the transactions contemplated hereby and\nexcept as disclosed in the Parent SEC Documents filed and publicly available\nprior to the date of this Agreement (the \"Parent Filed SEC Documents\"), since\nthe date of the most recent audited financial statements included in the Parent\nFiled SEC Documents, Parent has conducted its business only in the ordinary\ncourse and there has not been any material adverse change with respect to\nParent.\n\n          SECTION 4.06. Litigation. There is no Litigation pending, threatened\nor to the knowledge of Parent investigation pending or threatened nor has Parent\nnor any of its subsidiaries received any notice that in any manner challenges or\nseeks to prevent, enjoin, alter or delay the Merger.\n\n          SECTION 4.07. Taxes. Neither Parent nor any of its subsidiaries has\ntaken or agreed to take any action or knows of any fact, agreement, plan or\nother circumstance that is likely to prevent the Merger from qualifying as a\nreorganization within the meaning of Section 368(a) of the Code.\n\n          SECTION 4.08. Interim Operations of Sub. Sub was formed solely for the\npurpose of engaging in the transactions contemplated hereby, has engaged in no\nother business activities and has conducted its operations only as contemplated\nhereby.\n\n          SECTION 4.09. Information Supplied. None of the information supplied\nby Parent or Sub in writing specifically for and delivered in connection with\nthe Consent Solicitation contained any untrue statement of a material fact or\nomitted to state any material fact required to be stated therein or necessary to\nmake the statements therein, in light of the circumstances under which they are\nmade, not misleading.\n\n          SECTION 4.10. Brokers. No broker, investment banker, financial advisor\nor other person is entitled to any broker's, finder's, financial advisor's or\nsimilar fee or commission, in connection with the transactions contemplated by\nthis Agreement based upon arrangements made by or on behalf of Parent or Sub.\n\n\n\n\n\n\n\n                                    ARTICLE V\n\n                                    Covenants\n\n          SECTION 5.01. Covenants of the Company. (a) During the period from the\ndate of this Agreement to the Effective Time, except as consented to in writing\nby Parent or as specifically contemplated by this Agreement, the Company shall,\nand shall cause its subsidiaries to, carry on their respective businesses in the\nordinary course consistent with past practice and use their commercially\nreasonable efforts to comply with all applicable Laws and, to the extent\nconsistent therewith, use their commercially reasonable efforts to preserve\ntheir assets and technology and preserve their relationships with material\ncustomers, suppliers, licensors, licensees, distributors and others having\nbusiness dealings with them. Without limiting the generality of the foregoing,\nduring the period from the date of this Agreement to the Effective Time, except\nas consented to in writing by Parent or as specifically contemplated by this\nAgreement, the Company shall not, and shall not permit any of its subsidiaries\nto:\n\n          (i) (x) declare, set aside or pay any dividends on, or make other\n     distributions in respect of, any of its capital stock, (y) split, combine\n     or reclassify any of its capital stock or issue or authorize or propose the\n     issuance of any other securities in respect of, in lieu of or in\n     substitution for shares of its capital stock or (z) purchase, redeem or\n     otherwise acquire any shares of capital stock or any other securities of\n     the Company or any of its subsidiaries, or any options, warrants, calls or\n     rights to acquire any such shares or other securities;\n\n          (ii) issue, deliver, sell, pledge or otherwise encumber, or authorize\n     or propose the issuance, delivery, sale, pledge or other encumbrance of,\n     any shares of its capital stock, or any other securities of any class or\n     any securities convertible into, or any options, warrants, calls or rights\n     to acquire, any such shares or convertible securities, other than (x) the\n     conversion of shares of Company Series A Preferred Stock in accordance with\n     their terms as of the date of this Agreement and (y) the issuance of\n     Company Class B Common Stock upon the exercise of Stock Options and\n     Warrants in accordance with their respective terms as of the date of this\n     Agreement.\n\n          (iii) amend or propose to amend its certificate of incorporation or\n     by-laws or similar organizational documents;\n\n\n\n\n\n\n\n\n          (iv) acquire or agree to acquire (x) by merging or consolidating with,\n     or by purchasing a substantial portion of the assets of, or by any other\n     manner, any business or any corporation, partnership, joint venture,\n     association or other entity or division thereof or (y) any assets which, in\n     the aggregate, are in excess of $10,000;\n\n          (v) sell, lease, license, mortgage or otherwise encumber or subject to\n     any Lien or otherwise dispose of any of its properties or assets, except\n     sales of obsolete equipment in the ordinary course of business consistent\n     with past practice;\n\n          (vi) repurchase, prepay or incur any Indebtedness or Guarantee any\n     such Indebtedness of another person, issue or sell any options, warrants,\n     calls or other rights to acquire any Indebtedness of the Company or any of\n     its subsidiaries, enter into any \"keep well\" or other agreement to maintain\n     any financial statement condition of another person or enter into any\n     arrangement having the economic effect of any of the foregoing, or make any\n     loans, advances or capital contributions to, or investments in, any other\n     person;\n\n          (vii) make or agree to make any new capital expenditure or\n     expenditures which, in the aggregate, are in excess of $10,000;\n\n          (viii) (A) pay, discharge, settle or satisfy any claims, liabilities\n     or obligations (whether absolute, accrued, asserted or unasserted,\n     contingent or otherwise), other than the payment, discharge or satisfaction\n     (x) of all amounts outstanding under the Loan and Security Agreement by and\n     between the Company and the Silicon Valley Bank dated as of October 8, 1999\n     (the \"Loan and Security Agreement\") and (y) in the ordinary course of\n     business or in accordance with their terms as of the date hereof, of\n     claims, liabilities or obligations reflected or reserved against on the\n     balance sheet of the Company as of September 30, 1999 (for amounts not in\n     excess of such reserves), or incurred since September 30, 1999, in the\n     ordinary course of business consistent with past practice, (B) waive,\n     release, grant or transfer any right of material value outside the ordinary\n     course of business consistent with past practice or (C) waive any material\n     benefits of, or agree to modify in any adverse respect, or fail to enforce,\n     any confidentiality, standstill or similar agreement to which the Company\n     or any of its subsidiaries is a party;\n\n\n\n\n\n\n\n\n          (ix) modify, amend or terminate any material Contract to which the\n     Company or such subsidiary is a party or waive, release or assign any\n     material rights or claims thereunder other than the Contracts set forth on\n     Schedule 5.01;\n\n          (x) enter into any material Contracts, including any Contracts\n     relating to any material Intellectual Property;\n\n          (xi) except as otherwise contemplated by this Agreement or as required\n     to comply with applicable law or agreements, plans or arrangements existing\n     on the date hereof, (A) terminate, adopt, enter into or amend any\n     collective bargaining agreement or Benefit Plan, (B) increase in any manner\n     the compensation or fringe benefits of, or pay any bonus to, any director,\n     officer, employee or consultant, (C) pay any material benefit not provided\n     for under any Benefit Plan, (D) increase in any manner the severance or\n     termination pay of any director, officer or employee, (E) enter into (I)\n     any employment, severance, termination or indemnification agreement, or\n     consulting agreement (other than in the ordinary course of business), with\n     any current or former director, officer, employee or consultant or (II) any\n     agreements with any current or former director, officer, employee or\n     consultant the benefits of which are contingent, or the terms of which are\n     materially altered, upon the occurrence of a transaction involving the\n     Company or any of its subsidiaries of the nature contemplated by this\n     Agreement, (F) grant any awards under any Benefit Plan (including the grant\n     of Stock Options, stock appreciation rights, stock based or stock related\n     awards, performance units or restricted stock or the removal of existing\n     restrictions in any Benefit Plans or agreements or awards made thereunder),\n     (G) take any action to fund or in any other way secure the payment of\n     compensation or benefits under any employee plan, contract, agreement or\n     arrangement or Benefit Plan or (H) take any action to accelerate the\n     vesting or payment of any compensation or benefit under any Benefit Plan;\n\n          (xii) revalue any of its material assets or, except as required by\n     GAAP, make any change in accounting methods, principles or practices;\n\n          (xiii) commence any Litigation (other than Litigation relative to\n     collections of accounts receivable Litigation commenced in order to comply\n     with Section 5.01(a)(viii) hereof or as a result of\n\n\n\n\n\n\n\n\n          Litigation commenced against the Company or any of its subsidiaries);\n\n          (xiv) hire any employees; and\n\n          (xv) authorize any of, or commit, resolve or agree to take any of, the\n     actions prohibited by clauses (i) through (xiv) above.\n\n          (b) Certain Tax Matters. (i) Tax Returns. (A) During the period from\nthe date of this Agreement to the Effective Time, each of the Company, its\nsubsidiaries and Company Consolidated Groups shall timely file or cause to be\ntimely filed all Tax Returns (\"Post-Signing Returns\") required to be filed by it\n(after taking into account any applicable extensions) and may file a Tax Return\nthat is a short period S corporation return for the period from January 1, 1999\nto May 25, 1999 (in each case, at the Company's own cost and expense and in a\nmanner that is consistent with past practice and that is not reasonably likely\nto defer income to a taxable period that ends after the Closing Date or to\naccelerate deductions to a taxable period that ends on or before the Closing\nDate; provided, however, that use of the cash method of accounting will be\ndeemed not to be reasonably likely to defer income to a taxable period that ends\nafter the Closing date or to accelerate deductions to a taxable period that ends\non or before the Closing Date).\n\n          (B) The Company and each of its subsidiaries shall timely pay all\nTaxes due and payable in respect of such Post-Signing Returns that are filed\npursuant to Section 5.01(b)(i)(A) of this Agreement.\n\n          (ii) Company Covenants. (A) The Company shall accrue a reserve in its\n     books and records and financial statements in accordance with past practice\n     for all Taxes payable by the Company and each of its subsidiaries for which\n     no Post-Signing Return is due prior to the Effective Time.\n\n               (B) Prior to the Effective Time, the Company and each of its\n          subsidiaries shall promptly notify Parent of any suit, claim, action,\n          investigation, proceeding or audit (collectively, \"Actions\") pending\n          against or with respect to the Company or any of its subsidiaries in\n          respect of any Tax. None of the Company or any of its subsidiaries\n          shall settle or compromise any such Action without Parent's prior\n          written consent.\n\n               (C) Prior to the Effective Time, none of the Company or any of\n          its subsidiaries shall make or\n\n\n\n\n\n\n\n\n          change any material Tax election, amend any Tax Return or take\n          any other action (or fail to take any other action) in respect of\n          Taxes, in each case, if such action (or failure to take action) could\n          reasonably be expected to have the effect of increasing the Tax\n          liability of Parent or any of its affiliates (including, after the\n          Closing Date, the Company and its subsidiaries) with respect to a\n          taxable period that ends after the Closing Date.\n\n          (iii) Additional Tax Matters. (A) Any and all existing Tax sharing\n     agreements or arrangements between the Company and\/or any subsidiary, on\n     the one hand, and any other party, on the other hand, shall be terminated\n     as of the Closing Date. After such date, none of the Company or any of its\n     subsidiaries shall have any obligations thereunder.\n\n               (B) All stock transfer, real property transfer, documentary,\n          sales, use, registration, value-added and other similar Taxes\n          (including interest, penalties and additions thereto) incurred in\n          connection with the transactions contemplated by the Agreement shall\n          be borne by the Company, and the Company shall indemnify Parent or any\n          of its affiliates for any such Taxes incurred as a result of the\n          Company's failure timely to pay such Taxes.\n\n               (C) The Company shall deliver to Parent at or prior to the\n          Closing a certificate, in form and substance reasonably satisfactory\n          to Parent and the Company, certifying that the transactions\n          contemplated by this Agreement are not subject to the Foreign\n          Investment in Real Property Tax Act.\n\n          (c) Advice of Changes; Filings. The Company and each of its\nsubsidiaries shall (i) confer on a regular and frequent basis with Parent to\nreport on operational matters and other matters requested by Parent and (ii)\npromptly advise Parent orally and in writing of any change or event which is\nreasonably more likely than not to have a material adverse effect on the\nCompany. The Company and Parent shall promptly provide the other copies of all\nfilings made by such party with any Federal, state, local or foreign\nGovernmental Entity in connection with this Agreement and the transactions\ncontemplated hereby, other than the portions of such filings that include\nconfidential information not directly related to the transactions contemplated\nby this Agreement.\n\n          SECTION 5.02. Other Actions. The Company shall not, nor shall it\npermit any of its subsidiaries to, take\n\n\n\n\n\n\n\nany action that would, or that could reasonably be expected to, result in (i)\nany of the representations and warranties of the Company set forth in this\nAgreement that are qualified as to materiality becoming untrue, (ii) any of such\nrepresentations and warranties that are not so qualified becoming untrue in any\nmaterial respect or (iii) any of the conditions set forth in Article VII not\nbeing satisfied.\n\n\n                                   ARTICLE VI\n\n                              Additional Agreements\n\n          SECTION 6.01. Access to Information. Upon reasonable notice, the\nCompany shall, and shall cause each of its subsidiaries to, afford to the\nofficers, employees, accountants, counsel and other representatives of Parent,\nreasonable access, during normal business hours during the period prior to the\nEffective Time, to all its employees, properties, books, contracts, commitments\nand records and, during such period, the Company shall, and shall cause each of\nits subsidiaries, accountants, counsel and other advisors to, furnish promptly\nto Parent all information concerning its business, properties and personnel as\nParent may reasonably request. Parent will treat any such information which is\nnonpublic as \"Proprietary Information\" in accordance with the terms of the\nConfidentiality and Nondisclosure Agreement dated as of October 22, 1999 (the\n\"Confidentiality Agreement\"), between Parent and the Company and in the event of\ntermination of this Agreement for any reason Parent shall promptly upon request\nreturn or destroy all nonpublic documents obtained from the Company, and any\ncopies made of such documents, to the Company.\n\n          SECTION 6.02. Legal Conditions to Merger. Each of the Company, Parent\nand Sub will use reasonable efforts to take, and will cause each of its\nsubsidiaries to use reasonable efforts to take, all actions and to do, or cause\nto be done, all things necessary, proper and advisable under applicable laws and\nregulations promptly to consummate and make effective the transactions\ncontemplated by this Agreement (including cooperating fully with the other\nparties hereto, furnishing all information to each other in connection with any\nrequirements imposed upon any party in connection with the Merger). Each of the\nCompany, Parent and Sub will, and will cause each of its subsidiaries to, take\nall reasonable actions necessary to obtain (and will cooperate with each other\nin obtaining) any consent, authorization, order or approval of, or any exemption\nby, any Governmental Entity or other public or private third party, required to\nbe obtained or made by Parent or the Company in connection with the Merger or\nthe taking of any\n\n\n\n\n\n\n\naction contemplated thereby or by this Agreement, except that no party need\nwaive any substantial rights or agree to any substantial limitation on its\noperations or to dispose of, or enter into any licensing or similar arrangement\nwith respect to, any material assets.\n\n          SECTION 6.03. Stock Options; Warrants. (a) As soon as practicable\nfollowing the date of this Agreement, the Board of Directors of the Company (or,\nif appropriate, any committee administering the Company Stock Plans) shall adopt\nsuch resolutions or take such other actions (if any) as may be required to\neffect the following:\n\n          (i) adjust the terms of all outstanding Stock Options granted under\n     the Company Stock Plans, whether vested or unvested, as necessary to\n     provide that, at the Effective Time, each such Stock Option outstanding\n     immediately prior to the Effective Time shall be converted into an option\n     to acquire, on the same terms and conditions as were applicable under such\n     Stock Option, the number of shares of Parent Common Stock (rounded down to\n     the nearest whole share), determined by multiplying the number of shares of\n     Company Class B Common Stock subject to such Stock Option by the Exchange\n     Ratio, at an exercise price per share of Parent Common Stock equal to (1)\n     the per share exercise price for the shares of Company Class B Common Stock\n     otherwise purchasable pursuant to such Stock Option divided by (2) the\n     Exchange Ratio (each, as so adjusted, an \"Adjusted Option\"), provided that\n     such exercise price shall be rounded up to the nearest whole cent; and\n\n          (ii) make such other changes to the Company Stock Plans as Parent and\n     the Company may agree are appropriate to give effect to the Merger.\n\n          (b) The adjustments provided herein with respect to any Stock Options\nthat are \"incentive stock options\" as defined in Section 422 of the Code shall\nbe and are intended to be effected in a manner which is consistent with Section\n424(a) of the Code.\n\n          (c) At the Effective Time, by virtue of the Merger and without the\nneed of any further corporate action, Parent shall assume the Company Stock\nPlans, with the result that all obligations of the Company under the Company\nStock Plans, including with respect to Stock Options outstanding at the\nEffective Time, shall be obligations of Parent following the Effective Time.\n\n          (d) Prior to the Effective Time, Parent shall prepare and file with\nthe SEC a registration statement on\n\n\n\n\n\n\n\n\nForm S-8 (or another appropriate form) registering a number of shares of Parent\nCommon Stock equal to the number of shares subject to the Adjusted Options. Such\nregistration statement shall be kept effective (and the current status of the\nprospectus or prospectuses required thereby shall be maintained) as long as any\nAdjusted Options may remain outstanding.\n\n          (e) As soon as practicable and in any event within 30 days after the\nEffective Time, Parent shall deliver to the holders of unvested Stock Options\nappropriate notices setting forth such holders' rights pursuant to the\nrespective Company Stock Plan and the agreements evidencing the grants of such\nStock Options and that such Stock Options and agreements have been assumed by\nParent and shall continue in effect on the same terms and conditions (subject to\nthe adjustments required by this Section 6.03 after giving effect to the\nMerger).\n\n          (f) A holder of an Adjusted Option may exercise such Adjusted Option\nin whole or in part in accordance with its terms by delivering a properly\nexecuted notice of exercise to Parent, together with the consideration therefor\nand the Federal withholding tax information, if any, required in accordance with\nthe related Company Stock Plan.\n\n          (g) Except as otherwise contemplated by this Section 6.03 and except\nto the extent required under the respective terms of the Stock Options or\nCompany Stock Plans, all restrictions or limitations on transfer with respect to\nStock Options awarded under the Company Stock Plans or any other plan, program\nor arrangement of the Company, to the extent that such restrictions or\nlimitations shall not have already lapsed, shall remain in full force and effect\nwith respect to such options after giving effect to the Merger and the\nassumption by Parent as set forth above.\n\n          (h) At the Effective Time, by virtue of the Merger and without the\nneed for any further corporate action, each Warrant outstanding immediately\nprior to the Effective Time shall be automatically converted into a warrant to\nacquire, on the same terms and conditions as were applicable under such Warrant,\nthe number of shares of Parent Common Stock (rounded down to the nearest whole\nshare) determined by multiplying the number of shares of Company Class B Common\nStock subject to such Warrant by the Exchange Ratio, at a price per share of\nParent Common Stock equal to (A) the per share exercise price for the shares of\nCompany Class B Common Stock otherwise purchasable pursuant to such Warrant\ndivided by (B) the Exchange Ratio; provided, however, that such exercise price\nshall be rounded up to the nearest whole cent.\n\n\n\n\n\n\n\n\n          (i) This Section 6.03 shall survive the consummation of the Merger, is\nintended to benefit the holders of the Stock Options and Warrants and shall be\nenforceable by such persons.\n\n          SECTION 6.04. Fees and Expenses. Except as provided in Section\n5.01(b), all fees and expenses incurred in connection with the Merger, this\nAgreement and the transactions contemplated by this Agreement shall be paid by\nthe party incurring such fees or expenses, whether or not the Merger is\nconsummated; provided, however, that such attorneys' fees, brokers' fees,\naccountants' fees and consultants' fees incurred by the Company in excess of any\namount deducted from the aggregate purchase price pursuant to Section 2.01(c)\nshall be paid by the Stockholders.\n\n          SECTION 6.05. Additional Agreements. In case at any time after the\nEffective Time any further action is necessary or desirable to carry out the\npurposes of this Agreement or to vest the Surviving Corporation with full title\nto all properties, assets, rights, approvals, immunities and franchises of\neither the Company or Sub, the proper officers and directors of each party to\nthis Agreement shall take all such necessary action.\n\n          SECTION 6.06. Indemnification. From and after the Effective Time,\nParent shall cause the Surviving Corporation to (and, in the event of the\nliquidation, dissolution or winding up of the Surviving Corporation, Parent\nshall) fulfill and honor in all respects any indemnification obligations of the\nCompany owed to each person who is or was a director or officer of the Company\nat or prior to the Effective Time (the \"Indemnified Parties\") under the\nCompany's Amended and Restated Certificate of Incorporation and By-laws as in\neffect on the date hereof. The Certificate of Incorporation and By-laws of the\nSurviving Corporation will at all times during a period of not fewer than six\nyears following the Effective Time, contain provisions with respect to\nexculpation and indemnification that are at least as favorable to the\nIndemnified Parties as those contained in the Amended and Restated Certificate\nof Incorporation and Bylaws of the Company as in effect on the date hereof. This\nSection 6.06 shall survive the consummation of the Merger, is intended to\nbenefit each Indemnified Party, shall be binding upon the successors and assigns\nof Parent and the Surviving Corporation, and shall be enforceable by the\nIndemnified Parties.\n\n          SECTION 6.07. Litigation. The Company shall give Parent the\nopportunity to participate in the defense of any litigation against the Company\nand\/or its directors relating to the transactions contemplated by this\nAgreement.\n\n\n\n\n\n\n\n          SECTION 6.08. Tax Treatment. Each of Parent, Sub and the Company shall\nuse reasonable efforts to cause the Merger to qualify as a reorganization under\nthe provisions of Section 368 of the Code and the Company shall use reasonable\nefforts to obtain the opinion of counsel referred to in Section 7.03(c),\nincluding the execution of the letters of representation referred to therein.\n\n          SECTION 6.09. Letter of the Company's Accountants. The Company shall\nuse its reasonable efforts to cause to be delivered to Parent a letter from\nArthur Andersen LLP, addressed to Parent and the Company, dated as of the\nClosing Date, stating that (i) Arthur Andersen LLP concurs with the conclusion\nof the Company's management that, subject to customary qualifications, the\nCompany meets the requirements to be a party to a pooling of interests\ntransaction for financial reporting purposes under Opinion 16 of the Accounting\nPrinciples Board and applicable SEC rules and regulations and (ii) the basis for\nsuch concurrence is Arthur Andersen LLP's belief that the criteria for such\naccounting treatment have been met.\n\n          SECTION 6.10. Letter of Parent's Accountants. Parent shall use its\nreasonable efforts to cause to be delivered to the Company a letter from KPMG\nLLP, addressed to the Company and Parent dated as of the Closing Date, stating\nthat (i) KPMG LLP concurs with the conclusion of Parent's management that,\nsubject to customary qualifications, the Merger qualifies for pooling of\ninterests treatment for financial reporting purposes under Opinion 16 of the\nAccounting Principles Board and applicable SEC rules and regulations and (ii)\nthe basis for such concurrence is KPMG LLP's belief that the criteria for such\naccounting treatment have been met.\n\n          SECTION 6.11. Affiliates. Prior to the Closing Date, the Company shall\ndeliver to Parent a letter identifying all persons who may be deemed, in the\nCompany's reasonable judgment, at the time this Agreement is submitted for\napproval and adoption to the stockholders of the Company, \"affiliates\" of the\nCompany for purposes of Rule 145 under the Securities Act. The Company shall use\nits reasonable efforts to cause each such person to deliver to Parent as\npromptly as practicable after the date of this Agreement a written agreement\nsubstantially in the form attached as Exhibit C hereto.\n\n          SECTION 6.12. Employee Benefits. (a) During the six-month period\nfollowing the Effective Time (the \"Transition Period\"), Parent shall cause the\nSurviving Corporation to either maintain the benefit programs provided by the\nCompany and its subsidiaries in effect immediately prior to the Effective Time\nor replace all or any such\n\n\n\n\n\n\n\n\nprograms with programs maintained for similarly situated employees of Parent,\nprovided that the aggregate level of benefits provided during the Transition\nPeriod shall be substantially similar to the aggregate level of benefits\nprovided by the Company and its subsidiaries before the Effective Time. To the\nextent that any plan of Parent or any of its affiliates (a \"Parent Plan\")\nbecomes applicable to any employee or former employee of the Company or its\nsubsidiaries, Parent shall grant, or cause to be granted, to such employees or\nformer employees credit for their service with the Company and its subsidiaries\nfor the purpose of determining eligibility to participate and nonforfeitability\nof benefits under such Parent Plan and for purposes of benefit accrual under\nvacation and severance pay plans (but only to the extent such service was\ncredited under similar plans of the Company and its subsidiaries).\n\n          (b) With respect to any welfare benefit plan of Parent or its\naffiliates made available to individuals who immediately prior to the Closing\nDate were employees of the Company or any of its Subsidiaries, Parent shall, or\nshall cause the Surviving Corporation to, waive any waiting periods,\npre-existing condition exclusions and actively-at- work requirements to the\nextent such provisions were inapplicable under the Company Plans immediately\nbefore such plan of Parent was made available and provide that any expenses\nincurred on or before the date such plan was made available by any such\nindividual or such individual's covered dependents shall be taken into account\nfor purposes of satisfying applicable deductible, coinsurance and maximum\nout-of-pocket provisions.\n\n          SECTION 6.13. Indemnity Insurance. Parent and the Company shall\ndiscuss the merits of substituting, in lieu of the Escrow Fund, an insurance\npolicy insuring the obligations of the Stockholders under the Escrow Agreement\nfor the benefit of the Parent and the other Indemnitees thereunder. This Section\ndoes not create any obligation of either party to obtain any such insurance.\n\n                                   ARTICLE VII\n\n                                   Conditions\n\n          SECTION 7.01. Conditions to Each Party's Obligation to Effect the\nMerger. The respective obligation of each party hereto to effect the Merger\nshall be subject\n\n\n\n\n\n\n\n\nto the satisfaction on or prior to the Closing Date of the\nfollowing conditions:\n\n          (a) HSR Act. The waiting period (and any extension thereof) applicable\n     to the Merger under the HSR Act shall have been terminated or expired.\n\n          (b) No Injunctions or Restraints. No temporary restraining order,\n     preliminary or permanent injunction or other Order issued by any court of\n     competent jurisdiction or other legal restraint or prohibition\n     (collectively, \"Legal Restraints\") preventing the consummation of the\n     Merger shall be in effect.\n\n          (c) Pooling Letters. Parent and the Company shall have received\n     letters from KPMG LLP and Arthur Andersen LLP, in each case dated as of the\n     Closing Date, addressed to Parent and the Company, stating in substance the\n     matters to be stated by KPMG LLP and Arthur Andersen LLP, pursuant to\n     Sections 6.09 and 6.10, respectively.\n\n          SECTION 7.02. Conditions of Obligations of Parent and Sub. The\nobligations of Parent and Sub to effect the Merger shall be subject to the\nsatisfaction on or prior to the Closing Date of the following conditions unless\nwaived by Parent and Sub:\n\n          (a) Representations and Warranties. The representations and warranties\n     of the Company contained in this Agreement shall be true and correct as of\n     the date of this Agreement and as of the Closing Date with the same effect\n     as though made as of the Closing Date (except that the accuracy of\n     representations and warranties that by their terms speak as of a specified\n     date will be determined as of such date), except where the failure of such\n     representations and warranties to be so true and correct (without giving\n     effect to any limitation as to \"materiality\" or \"material adverse effect\"\n     set forth herein) does not have, and is not reasonably more likely than not\n     to have, individually or in the aggregate, a material adverse effect on the\n     Company. Parent shall have received a certificate signed on behalf of the\n     Company by the chief executive officer of the Company to such effect.\n\n          (b) Performance of Obligations of the Company. The Company shall have\n     performed in all material respects all obligations required to be performed\n     by it under this Agreement at or prior to the Closing Date. Parent shall\n     have received a certificate signed on behalf of the Company by the chief\n     executive officer of the Company to such effect.\n\n\n\n\n\n\n\n          (c) No Litigation. There shall not be pending or threatened any suit,\n     action or proceeding brought by any Governmental Entity, or any suit,\n     action or proceeding with a reasonable probability of success brought by\n     any other third party, (i) seeking to restrain or prohibit the consummation\n     of the Merger; (ii) seeking to prohibit or limit in any material respect\n     the ownership or operation by the Company, Parent or any of their\n     respective affiliates of a material portion of the business or assets of\n     the Company and its subsidiaries, taken as a whole, or Parent and its\n     subsidiaries, taken as a whole, or to require any such person to dispose of\n     or hold separate any material portion of the business or assets of the\n     Company and its subsidiaries, taken as a whole, or Parent and its\n     subsidiaries, taken as a whole, as a result of the Merger; or (iii) seeking\n     to prohibit Parent or any of its affiliates from effectively controlling in\n     any material respect a substantial portion of the business or operations of\n     the Company or its subsidiaries.\n\n          (d) Legal Restraint. No Legal Restraint that could reasonably be\n     expected to result, directly or indirectly, in any of the effects referred\n     to in clauses (i) through (iii) of paragraph (c) of this Section 7.02 shall\n     be in effect.\n\n          (e) Appraisal Shares. No more than five percent of the shares of\n     Company Capital Stock outstanding immediately prior to the Effective Time\n     shall be Appraisal Shares.\n\n          (f) Indemnification and Escrow Agreement. The Indemnification and\n     Escrow Agreement in the form attached hereto as Exhibit E shall be in full\n     force and effect.\n\n          (g) Termination of Loan and Security Agreement. All amounts due and\n     owing under the Loan and Security Agreement shall have been repaid in full\n     and the Loan and Security Agreement shall have been terminated and all\n     Liens related thereto shall have been released.\n\n          (h) Termination of Founder's Agreements. The Founder's Agreements\n     between the Company and each of Steven N. Kane, Stuart Roseman and John L.\n     Furse shall have been terminated.\n\n          SECTION 7.03. Conditions of Obligations of the Company. The obligation\nof the Company to effect the Merger shall be subject to the satisfaction on or\nprior to the\n\n\n\n\n\n\n\n\nClosing Date of the following conditions unless waived by the Company:\n\n          (a) Representations and Warranties. The representations and warranties\n     of Parent contained in this Agreement shall be true and correct as of the\n     date of this Agreement and as of the Closing Date with the same effect as\n     though made as of the Closing Date (except that the accuracy of\n     representations and warranties that by their terms speak as of a specified\n     date will be determined as of such date), except where the failure of such\n     representations and warranties to be so true and correct (without giving\n     effect to any limitation as to \"materiality\" or \"material adverse effect\"\n     set forth therein) does not have, and is not reasonably more likely than\n     not to have, individually or in the aggregate, a material adverse effect on\n     Parent. The Company shall have received a certificate signed on behalf of\n     Parent by an authorized signatory of Parent to such effect.\n\n          (b) Performance of Obligations of Parent and Sub. Parent and Sub shall\n     have performed in all material respects all obligations required to be\n     performed by them under this Agreement at or prior the Closing Date. The\n     Company shall have received a certificate signed on behalf of Parent by an\n     authorized signatory of Parent to such effect.\n\n          (c) Tax Opinion. The Stockholders shall have received from Testa,\n     Hurwitz &amp; Thibeault, LLP, counsel to the Company, on the Closing Date, an\n     opinion, dated as of such date and stating that the Merger qualifies for\n     Federal income tax purposes as a \"reorganization\" within the meaning of\n     Section 368(a) of the Code and that Parent, Sub and the Company will each\n     be a party to that reorganization within the meaning of Section 368(b) of\n     the Code. The issuance of such opinion shall be conditioned upon the\n     receipt by such counsel of customary representation letters from each of\n     the Company and Parent, which shall be in substantially the same form as\n     Exhibits F and G, respectively, with such changes as such counsel may\n     reasonably request.\n\n          SECTION 7.04. Frustration of Closing Conditions. None of the Company,\nParent or Sub may rely on the failure of any condition set forth in Section\n7.01, 7.02 or 7.03, as the case may be, to be satisfied if such failure was\ncaused by such party's failure to use reasonable efforts to consummate the\nmerger and the other transactions contemplated by this Agreement, as required by\nand subject to Section 7.03.\n\n\n\n\n\n\n\n\n                                  ARTICLE VIII\n\n                            Termination and Amendment\n\n          SECTION 8.01. Termination. (a) This Agreement may be terminated at any\ntime prior to the Effective Time:\n\n          (i) by mutual consent of Parent and the Company;\n\n          (ii) by either Parent or the Company if the other party shall have\n     breached any of its representations, warranties, covenants or agreements\n     set forth in this Agreement, which breach (i) would give rise to the\n     failure of a condition to the obligation of such party set forth in Article\n     VII of this Agreement and (ii) has not been, or is incapable of being,\n     cured by such other party within 30 calendar days after such other party\n     receives written notice of such breach from Parent or the Company, as the\n     case may be;\n\n          (iii) by either Parent or the Company if any Legal Restraint\n     preventing the consummation of the Merger shall have become final and\n     nonappealable;\n\n          (iv) by either Parent or the Company if the Merger shall not have been\n     consummated on or before December 31, 1999; provided, however, that the\n     right to terminate this Agreement pursuant to this Section 8.01(d) shall\n     not be available to any party whose failure to perform any of its\n     obligations under this Agreement results in the failure of the Merger to be\n     consummated by such time; and\n\n          (b) This Agreement may be terminated by the Company within five days\nafter Parent enters into a definitive acquisition agreement, merger agreement or\nsimilar agreement that provides for the sale or transfer to any person of all or\nsubstantially all the assets or capital stock of Parent.\n\n          SECTION 8.02. Effect of Termination. In the event of a termination of\nthis Agreement by either the Company or Parent as provided in Section 8.01, this\nAgreement shall forthwith become void and there shall be no liability or\nobligation on the part of Parent, Sub or the Company or their respective\nofficers or directors, except with respect to any wilful breach of any\nrepresentation, warranty, covenant or agreement contained in this Agreement\nprior to such termination; and except that Section 6.04, this Section 8.02,\nArticle IX and the last sentence of Section 6.01 shall continue in effect.\n\n\n\n\n\n\n\n          SECTION 8.03. Amendment. This Agreement may be amended by the parties\nhereto, by action taken or authorized by their respective Boards of Directors\nprior to the Effective Time, but no amendment shall be made which by law\nrequires further approval by the stockholders of the Company without such\nfurther approval. This Agreement may not be amended except by an instrument in\nwriting signed on behalf of each of the parties hereto.\n\n          SECTION 8.04. Extension; Waiver. At any time prior to the Effective\nTime, each of the parties hereto, by action taken or authorized by their\nrespective Boards of Directors, may, to the extent legally allowed, (i) extend\nthe time for the performance of any of the obligations or other acts of the\nother parties hereto, (ii) waive any inaccuracies in the representations and\nwarranties of the other party contained herein or in any document delivered\npursuant hereto and (iii) waive compliance of the other party with any of the\nagreements or conditions to its obligations contained herein. Any agreement on\nthe part of the party hereto to any such extension or waiver shall be valid only\nif set forth in a written instrument signed on behalf of such party.\n\n\n                                   ARTICLE IX\n\n                                  Miscellaneous\n\n          SECTION 9.01. Survival of Representations, Warranties and Covenants.\nThe representations, warranties and covenants of the Company in this Agreement\nand in any instrument delivered pursuant to this Agreement shall survive the\nEffective Time, for a period of one year after the Effective Time, for purposes\nof the Escrow Agreement. The covenant of Parent set forth in Section 6.03 shall\nsurvive the Effective Time for a period of one year after the Effective Time.\n\n          SECTION 9.02. Notices. All notices and other communications hereunder\nshall be in writing and shall be deemed given if delivered personally,\ntelecopied (which is confirmed) or mailed by registered or certified mail\n(return receipt requested) to the parties to this Agreement at the following\naddresses (or at such other address for a party as shall be specified by like\nnotice):\n\n                  (a)      if to Parent or Sub, to\n\n                           Lycos, Inc.\n                           400-2 Totten Pond Road\n                           Waltham, MA 02451\n                           Attention:  Jeffrey M. Snider\n\n\n\n\n\n\n                           Telecopy No.:  (781) 370-2600\n\n                           with a copy to\n\n                           Cravath, Swaine &amp; Moore\n                           Worldwide Plaza\n                           825 Eighth Avenue\n                           New York, NY 10019-7475\n\n                           Attention:  Robert A. Kindler, Esq.\n                           Telecopy:   (212) 474-3700\n\n                  (b)      if to the Company, to\n\n                           Gamesville.com, Inc.\n                           One Arsenal Marketplace\n                           Watertown, MA 02472\n                           Attention:  Steven N. Kane\n                           Telecopy:   (617) 673-1199\n\n                           with a copy to:\n\n                           Testa, Hurwitz &amp; Thibeault, LLP\n                           125 High Street\n                           Oliver Street Tower\n                           Boston, MA 02110\n                           Attention: Michael Conza, Esq.\n                           Telecopy:  (617) 248-7100\n\n          SECTION 9.03. Definitions. For purposes of this Agreement:\n\n          (a) an \"affiliate\" of any person means another person that directly or\n     indirectly, through one or more intermediaries, controls, is controlled by,\n     or is under common control with, such first person and, for purposes of\n     Section 3.10(e) only, shall include (i) any director or officer of such\n     person and (ii) any person owning 5% or more of the voting securities of\n     such person;\n\n          (b) \"executive officers\" has the meaning ascribed to it in the\n     Exchange Act and, in any event, shall include Steven Kane, Stuart Roseman,\n     Jon Furse, Mark Herrmann, Paul La Rocca and Jasan Yanowitz.\n\n          (c) \"knowledge\" of any person which is not an individual means the\n     knowledge of such person's executive officers after reasonable inquiry and\n     investigation.\n\n          (d) \"material adverse effect\" means, when used in connection with the\n     Company or Parent, any state of\n\n\n\n\n\n\n\n\n     facts, change, effect, condition, development, event or occurrence\n     that has been, is or is reasonably more likely than not to be materially\n     adverse to the business, assets, financial condition or results of\n     operations of such party and its subsidiaries, taken as a whole, other than\n     (i) any state of facts, change, effect, condition, development, event or\n     occurrence (A) arising directly as a result of (1) material changes in (x)\n     general economic or business conditions in the internet or media market or\n     (y) international or domestic economic conditions or (2) any political,\n     economic or social instability or (B) resulting from the announcement of\n     this Agreement or the effects of the pendency of the transactions\n     contemplated by this Agreement, including (1) any attrition of the\n     Company's employees, (2) any termination or modification of any existing\n     Contract between the Company and any of its customers or (3) any refusal of\n     any of the Company's suppliers to continue to do business with the Company\n     or (ii) in the case of Parent, any decrease in the price per share of\n     Parent Common Stock;\n\n          (e) \"person\" means an individual, corporation, company, limited\n     liability company, partnership, joint venture, association, trust,\n     unincorporated organization or other entity; and\n\n          (f) a \"subsidiary\" of any person means another person, an amount of\n     the voting securities or other voting ownership or voting partnership\n     interests of which is sufficient to elect at least a majority of its Board\n     of Directors or other governing body (or, if there are no such voting\n     interests, more than 50% of the equity interests of which) is owned\n     directly or indirectly by such first person.\n\n          SECTION 9.04. Entire Agreement; No Third Party Beneficiaries; Rights\nof Ownership. This Agreement and the Confidentiality Agreement (including the\ndocuments and the instruments referred to herein) (a) constitute the entire\nagreement and supersede all prior agreements and understandings, both written\nand oral, among the parties with respect to the subject matter hereof and (b)\nexcept as expressly set forth in Sections 6.03 and 6.06 of this Agreement, are\nnot intended to confer upon any person other than the parties hereto any rights\nor remedies hereunder.\n\n          SECTION 9.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND\nCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF\nTHE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF\nLAWS THEREOF.\n\n\n\n\n\n\n\n\n          SECTION 9.06. Publicity. Except as otherwise required by law or the\nrules of Nasdaq, for so long as this Agreement is in effect, neither the Company\nnor Parent shall issue or cause the publication of any press release or other\npublic announcement with respect to the transactions contemplated by this\nAgreement without the consent of the other party, which consent shall not be\nunreasonably withheld. The parties hereto have agreed upon the form of a joint\npress release announcing the execution of this Agreement and the transactions\ncontemplated hereby.\n\n          SECTION 9.07. Assignment. Neither this Agreement nor any of the\nrights, interests or obligations hereunder shall be assigned by any of the\nparties hereto without the prior written consent of the other parties, except\nthat Sub may assign, in its sole discretion, any or all of its rights, interests\nand obligations hereunder to Parent or to any direct or indirect wholly owned\nsubsidiary of Parent. Subject to the preceding sentence, this Agreement will be\nbinding upon, inure to the benefit of and be enforceable by the parties and\ntheir respective successors and assigns.\n\n          SECTION 9.08. Counterparts. This Agreement may be executed in any\nnumber of counterparts, each of which shall be deemed to be an original and all\nof which together shall be deemed to be a single agreement.\n\n          SECTION 9.09. Exhibits and Schedules; Interpretation. The headings\ncontained in this Agreement or in any Exhibit or Schedule hereto and in the\ntable of contents to this Agreement are for reference purposes only and shall\nnot affect in any way the meaning or interpretation of this Agreement. All\nExhibits and Schedules annexed to this Agreement or referred to herein are\nhereby incorporated in and made a part of this Agreement as if set forth in full\nherein. Any capitalized terms used in any Schedule or Exhibit to this Agreement\nbut not otherwise defined herein, shall have the meaning as defined in this\nAgreement. When a reference is made in this Agreement to a Section, Article,\nExhibit or Schedule, this reference shall be to a Section or Article of, or an\nExhibit or Schedule to, this Agreement unless otherwise indicated. For all\npurposes hereof, (a) the words \"include\", \"includes\" and \"including\" shall be\ndeemed followed by the words \"without limitation\" and (b) the words \"hereof\",\n\"herein\" and \"hereunder\" and words of similar import when used in this Agreement\nshall refer to this Agreement as a whole and not to any particular provision of\nthis Agreement.\n\n          SECTION 9.10. Consent to Jurisdiction. Each of the parties hereto\nirrevocably and unconditionally submits to the exclusive jurisdiction of (a) any\nDelaware State court and (b) any Federal court of the United States of\n\n\n\n\n\n\n\n\nAmerica sitting in the State of Delaware, for the purposes of any suit, action\nor other proceeding arising out of this Agreement or any transaction\ncontemplated hereby (and each agrees that no such action, suit or proceeding\nrelating to this Agreement shall be brought by it or any of its affiliates\nexcept in such courts). Each of the parties hereto further agrees that service\nof any process, summons, notice or document by U.S. registered mail to such\nperson's respective address set forth above shall be effective service of\nprocess for any action, suit or proceeding in Delaware with respect to any\nmatters to which it has submitted to jurisdiction as set forth above in the\nimmediately preceding sentence. Each of the parties hereto irrevocably and\nunconditionally waives (and agrees not to plead or claim) any objection to the\nlaying of venue of any action, suit or proceeding arising out of this Agreement\nor the transactions contemplated hereby in (a) any Delaware State court or (b)\nany Federal court of the United State of America sitting in the State of\nDelaware, or that any such action, suit or proceeding brought in any such court\nhas been brought in an inconvenient forum.\n\n          SECTION 9.11. Waiver of Jury Trial. Each party hereto hereby waives,\nto the fullest extent permitted by applicable law, any right it may have to a\ntrial by jury in respect of any Litigation directly or indirectly arising out\nof, under or in connection with this Agreement. Each party hereto (a) certifies\nthat no representative, agent or attorney of any other party has represented,\nexpressly or otherwise, that such party would not, in the event of Litigation,\nseek to enforce the foregoing waiver and (b) acknowledges that it and the other\nparties hereto have been induced to enter into this Agreement, by, among other\nthings, the mutual waiver and certifications in this Section 9.11.\n\n          SECTION 9.12. Enforcement. The parties hereto agree that irreparable\ndamage would occur in the event that any of the provisions of this Agreement\nwere not performed in accordance with their specific terms or were otherwise\nbreached. It is accordingly agreed that the parties hereto shall be entitled to\nan injunction or injunctions to prevent breaches of this Agreement and to\nenforce specifically the terms and provisions of this Agreement in any Federal\ncourt sitting in the State of Delaware or in any Delaware State court, this\nbeing in addition to any other remedy to which they are entitled at law or in\nequity.\n\n\n\n\n\n\n\n\n          IN WITNESS WHEREOF, Parent, Sub and the Company have caused this\nAgreement to be signed by their respective officers thereunto duly authorized as\nof the date first written above.\n\n                                        LYCOS, INC.,\n\n                                          by \/s\/ Edward M. Philip \n                                             ---------------------------------\n                                             Name:  Edward M. Philip\n                                             Title: Chief Operating Officer,\n                                                    Chief Financial Officer\n\n\n                                        BARBADOS ACQUISITION CORP.,\n\n                                          by \/s\/ Edward M. Philip\n                                             ---------------------------------\n                                             Name:  Edward M. Philip\n                                             Title: Chief Operating Officer,\n                                                    Chief Financial Officer\n\n\n\n                                        GAMESVILLE.COM, INC.,\n\n                                          by\n                                             \/s\/ Steven N. Kane\n                                             ---------------------------------\n                                             Name:  Steven N. Kane\n                                             Title: CEO\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8096],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43086","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-lycos-inc","corporate_contracts_industries-technology__programming","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\/43086","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=43086"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43086"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43086"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}