{"id":43087,"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-whowhere-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-and-plan-of-merger-lycos-inc-and-whowhere-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/agreement-and-plan-of-merger-lycos-inc-and-whowhere-inc.html","title":{"rendered":"Agreement and Plan of Merger &#8211; Lycos Inc. and WhoWhere? Inc."},"content":{"rendered":"<pre>\n                          AGREEMENT AND PLAN OF MERGER\n                                  BY AND AMONG\n                                   LYCOS, INC.\n                             WHAT ACQUISITION CORP.\n                                 WHOWHERE? INC.\n                                       AND\n                             CERTAIN SHAREHOLDERS OF\n                                 WHOWHERE? INC.\n                                      DATED\n                                 AUGUST 7, 1998\n                            \n                                      - 1 -\n\n\n\n\n\n\n                                TABLE OF CONTENTS\n\n                                                                         Page\n\n\nARTICLE I\n\n         THE MERGER.....................................................- 1 -\n         1.1      The Merger............................................- 1 -\n         1.2      Effective Time........................................- 2 -\n         1.3      Effect of the Merger..................................- 2 -\n         1.4      Articles of Incorporation; By-Laws....................- 2 -\n         1.5      Directors and Officers................................- 2 -\n         1.6      Additional Actions....................................- 3 -\n\nARTICLE II\n\n         CONSIDERATION; CONVERSION OF SHARES............................- 3 -\n         2.1      Merger Consideration..................................- 3 -\n         2.2      Conversion of Shares..................................- 3 -\n         2.3      Exchange of Certificates..............................- 6 -\n         2.4      No Fractional Securities..............................- 7 -\n         2.5      Stock Transfer Books..................................- 7 -\n         2.6      No Further Ownership Rights in Company Stock..........- 7 -\n         2.7      Adjustment Event......................................- 7 -\n         2.8      Escrow................................................- 8 -\n         2.9      Tax Consequences......................................- 8 -\n\nARTICLE III\n\n         REPRESENTATIONS AND WARRANTIES OF THE\n         COMPANY AND THE PRINCIPAL SHAREHOLDERS\n          .............................................................- 8 -\n         3.1      Corporate Organization...............................- 8 -\n         3.2      Authorization........................................- 9 -\n         3.3      Consents and Approvals; No Violations................- 9 -\n         3.4      Capitalization......................................- 10 -\n         3.5      Financial Statements................................- 11 -\n         3.6      Absence of Undisclosed Liabilities..................- 11 -\n         3.7      Absence of Certain Changes or Events................- 11 -\n         3.8      Legal Proceedings, etc..............................- 12 -\n         3.9      Taxes...............................................- 12 -\n         3.10     Title to Properties and Related Matters.............- 14 -\n\n                                       (i)\n\n\n\n\n\n\n         3.11     Intellectual Property; Proprietary Rights; Employee \n                  Restrictions........................................- 15 -\n         3.12     Contracts...........................................- 16 - \n         3.13     Employees; Employee Benefits........................- 18 -  \n         3.14     Compliance with Applicable Law......................- 21 - \n         3.15     Ability to Conduct the Business.....................- 21 - \n         3.16     Major Customers.....................................- 22 -   \n         3.17     Consultants, Sales Representatives and Other Agents.- 22 - \n         3.18     Accounts Receivable.................................- 22 -  \n         3.19     Insurance...........................................- 23 -\n         3.20     Bank Accounts; Powers of Attorney...................- 23 -   \n         3.21     Minute Books, etc...................................- 23 - \n         3.22     Related Person Indebtedness and Contracts...........- 23 -\n         3.23     Brokers; Payments...................................- 23 -\n         3.24     Company Action......................................- 24 - \n         3.25     Disclosure..........................................- 24 -\n\nARTICLE IV\n\n         REPRESENTATIONS AND WARRANTIES\n         OF THE PRINCIPAL SHAREHOLDERS...............................- 24 -\n\nARTICLE V\n\n         REPRESENTATIONS AND WARRANTIES\n         OF THE PARENT AND ACQUISITION...............................- 25 -\n         5.1      Corporate Organization.............................- 25 -\n         5.2      Authorization......................................- 26 -\n         5.3      Consents and Approvals; No Violations..............- 26 -\n         5.4      Capitalization.....................................- 27 -\n         5.5      SEC Reports and Financial Statements...............- 27 -\n         5.6      Absence of Certain Changes.........................- 28 -\n         5.7      Litigation.........................................- 28 -\n         5.8      Tax Treatment of Merger............................- 28 -\n         5.9      Disclosure.........................................- 28 -\n\nARTICLE VI\n\n         CONDUCT OF BUSINESS OF THE COMPANY AND\n         THE PARENT PRIOR TO THE EFFECTIVE TIME......................- 29 -\n         6.1      Conduct of Business of the Company.................- 29 -\n         6.2      Conduct of Business of the Parent..................- 30 -\n         6.3      Conduct of Business of Acquisition.................- 31 -\n         6.4      Other Negotiations.................................- 31 -\n\n\n                                      (ii)\n\n\n\n\n\n\nARTICLE VII\n\n         ADDITIONAL AGREEMENTS.......................................- 31 -\n         7.1      Access to Properties and Records...................- 31 -\n         7.2      Shareholder Approval...............................- 32 -\n         7.3      Reasonable Efforts; etc............................- 32 -\n         7.4      Material Events....................................- 33 -\n         7.5      Registration Statement on Form S-8.................- 33 -\n         7.6.     Fees and Expenses..................................- 33 -\n         7.7      Employees..........................................- 33 -\n         7.8      Nasdaq National Market Listing.....................- 34 -\n         7.9      Tax Treatment......................................- 34 -\n         7.10     Indemnification....................................- 34 -\n         7.11     Shares of Parent Common Stock......................- 34 -\n\nARTICLE VIII\n\n         CONDITIONS TO THE OBLIGATIONS OF\n         THE PARENT AND ACQUISITION..................................- 35 -\n         8.1      Representations and Warranties True................- 35 -\n         8.2      Performance........................................- 35 -\n         8.3      Absence of Litigation..............................- 35 -\n         8.4      Consents...........................................- 36 -\n         8.5      Additional Agreements..............................- 36 -\n         8.6      Opinion of Venture Law Group.......................- 36 -\n         8.7      Appraisal Rights...................................- 36 -\n         8.8      Termination of Agreements..........................- 36 -\n         8.9      Certificate of Merger..............................- 37 -\n         8.10     Completion of Due Diligence........................- 37 -\n         8.11     Conversion of Company Preferred Stock..............- 37 -\n\nARTICLE IX\n\n         CONDITIONS TO THE OBLIGATIONS OF THE\n         COMPANY AND THE PRINCIPAL SHAREHOLDERS.....................- 37 -\n         9.1      Representations and Warranties True...............- 37 -\n         9.2      Performance.......................................- 37 -\n         9.3      Absence of Litigation.............................- 38 -\n         9.4      Consents..........................................- 38 -\n         9.5      Additional Agreements.............................- 38 -\n         9.6      Opinion of Hutchins, Wheeler &amp; Dittmar............- 38 -\n         9.7      Certificate of Merger.............................- 38 -\n         9.8      Tax Opinion.......................................- 38 -\n\n                                      (iii)\n\n\n\n\n\n\n\nARTICLE X\n\n         TERMINATION...............................................- 39 -\n         10.1     Termination......................................- 39 -\n         10.2     Effect of Termination............................- 39 -\n\nARTICLE XI\n\n         INDEMNIFICATION; SURVIVAL OF\n         REPRESENTATIONS AND WARRANTIES............................- 39 -\n         11.1     Indemnity Obligations of the Holders.............- 39 -\n         11.2     Appointment of Representative....................- 40 -\n         11.3     Notification of Claims...........................- 40 -\n         11.4     Duration.........................................- 41 -\n         11.5     Escrow...........................................- 41 -\n         11.6     No Contribution..................................- 42 -\n         11.7.    Liability of Principal Shareholders..............- 42 -\nARTICLE XII\n\n         REGISTRATION RIGHTS.......................................- 42 -\n         12.1     Registration Rights..............................- 42 -\n         12.2     Indemnification..................................- 45 -\n         12.3     Current Public Information.......................- 46 -\n         12.4     Termination of Registration Rights...............- 46 -\n         12.5     Transferability of Registration Rights...........- 46 -\n\nARTICLE XIII\n\n         MISCELLANEOUS PROVISIONS..................................- 46 -\n         13.1     Amendment........................................- 46 -\n         13.2     Waiver of Compliance.............................- 47 -\n         13.3     Notices..........................................- 47 -\n         13.4     Assignment.......................................- 48 -\n         13.5     No Third Party Beneficiaries.....................- 48 -\n         13.6     Public Announcements.............................- 48 -\n         13.7     Brokers and Finders..............................- 48 -\n         13.8     Counterparts.....................................- 49 -\n         13.9     Headings.........................................- 49 -\n         13.10    Entire Agreement.................................- 49 -\n         13.11    Governing Law....................................- 49 -\n         13.12    Survival.........................................- 49 -\n\n                                      (iv)\n\n\n\n\n\n\n\n\nEXHIBITS\n\n         Exhibit A         Voting Agreement\n         Exhibit B-1       Certificate of Merger (Delaware\n         Exhibit B-2       Agreement of Merger (California)\n         Exhibit C         Form of Letter of Transmittal\n         Exhibit D         Escrow Agreement\n         Exhibit E         Forms of Offer Letters\n         Exhibit F         Form of Nondisclosure and Inventions Agreement\n         Exhibit G         Opinion of Venture Law Group, A Professional \n                              Corporation\n         Exhibit H         Opinion of Hutchins, Wheeler &amp; Dittmar\n         Exhibit I         Form of Stock Option Assumption Agreement\n         Exhibit J         Form of Warrant Assumption Agreement\n         Exhbit K          Tax Opinion of Venture Law Group, A Professional \n                               Corporation\n\n                                       (v)\n\n\n\n\n\n\n                          AGREEMENT AND PLAN OF MERGER\n\n         AGREEMENT  AND PLAN OF MERGER  dated August 7, 1998 by and among Lycos,\nInc.,  a  corporation  organized  under the laws of the State of  Delaware  (the\n\"Parent\"), What Acquisition Corp., a corporation organized under the laws of the\nState of Delaware and a wholly-owned  subsidiary of the Parent  (\"Acquisition\"),\nWhoWhere?  Inc.,  a  corporation  organized  under  the  laws  of the  State  of\nCalifornia (the  \"Company\"),  and certain  shareholders of the Company,  each of\nwhom is listed on the  signature  page hereto (each a \"Principal  Shareholder  \"\nand, collectively, the \"Principal Shareholders\").\n\n         WHEREAS, the respective Boards of Directors of the Parent,  Acquisition\nand the  Company  have  approved  the  merger of  Acquisition  with and into the\nCompany  (the  \"Merger\"),  pursuant to which the Company  will be the  surviving\ncorporation  and the  shareholders of the Company and all holders of options and\nwarrants to purchase capital stock of the Company (collectively,  the \"Holders\")\nwill be entitled to receive the  consideration  provided for in this  Agreement,\nall upon the terms and subject to the conditions set forth herein;\n\n         WHEREAS,  it  is  intended  that  the  Merger  qualify  as  a  tax-free\nreorganization within the meaning of Section 368(a) of the Internal Revenue Code\nof 1986, as amended (the \"Code\"); and\n\n         WHEREAS, as a condition and inducement to Parent's willingness to enter\ninto this Agreement,  the Principal  Shareholders and certain other shareholders\nof the Company have, concurrently with the execution of this Agreement, executed\nand  delivered  a Voting  Agreement  in the form  attached  hereto as Exhibit A,\npursuant to which the Principal  Shareholders and such other  shareholders  have\nagreed to vote  their  shares  of the  Company's  capital  stock in favor of the\nMerger and to grant Parent irrevocable proxies to vote such shares.\n\n         NOW,   THEREFORE,   in   consideration   of   the   mutual   covenants,\nrepresentations, warranties and agreements set forth herein, and intending to be\nlegally bound hereby, the parties hereby agree as follows:\n\n                                    ARTICLE I\n\n                                   THE MERGER\n\n         1.1 The Merger.  (a) At the Effective Time (as defined in Section 1.2),\nand  subject  to and  upon the  terms  and  conditions  of this  Agreement,  the\nCalifornia  General  Corporation  Law  (the  \"CGCL\")  and the  Delaware  General\nCorporation  Law (the  \"DGCL\"),  Acquisition  shall be merged  with and into the\nCompany,  the separate  corporate  existence of Acquisition shall cease, and the\nCompany  shall  continue  as  the  surviving  corporation.  The  Company  as the\nsurviving  corporation after the Merger is hereinafter  sometimes referred to as\nthe \"Surviving Corporation.\"\n\n                  (b) Closing.  Unless this Agreement shall have been terminated\nand the transactions  herein  contemplated shall have been abandoned pursuant to\nArticle X and subject to the  satisfaction or waiver of the conditions set forth\nin Articles VIII and IX, the consummation of\n\n                                      - 1 -\n\n\n\n\n\n\nthe Merger (the  \"Closing\")  will take place as promptly as practicable  (and in\nany  event  within  two  business  days)  after  satisfaction  or  waiver of the\nconditions  set forth in  Articles  VIII and IX,  at the  offices  of  Hutchins,\nWheeler &amp; Dittmar,  A  Professional  Corporation,  101 Federal  Street,  Boston,\nMassachusetts, unless another date, time or place is agreed to in writing by the\nCompany  and the Parent.  The date of such  Closing is referred to herein as the\n\"Closing Date\".\n\n         1.2 Effective Time. As promptly as practicable  after the  satisfaction\nor waiver of the  conditions  set forth in  Articles  VIII and IX,  the  parties\nhereto  shall  cause  the  Merger to be  consummated  by  filing  agreements  or\ncertificates  of merger as contemplated by the CGCL and the DGCL in the forms of\nExhibit B-1 and Exhibit B-2 hereto (collectively,  the \"Certificate of Merger\"),\ntogether with any required related certificates,  with the Secretary of State of\nthe State of California and the Secretary of State of the State of Delaware,  in\nsuch  form as  required  by,  and  executed  in  accordance  with  the  relevant\nprovisions  of,  the  CGCL and the  DGCL  (the  time of such  filing  being  the\n\"Effective Time\").\n\n         1.3 Effect of the  Merger.  At the  Effective  Time,  the effect of the\nMerger shall be as provided in this Agreement, the Certificate of Merger and the\napplicable  provisions of the CGCL and the DGCL. Without limiting the generality\nof the foregoing,  and subject thereto,  at the Effective Time all the property,\nrights,  privileges,  powers and franchises of the Company and Acquisition shall\nvest in the Surviving Corporation,  and all debts, liabilities and duties of the\nCompany and  Acquisition  shall become the debts,  liabilities and duties of the\nSurviving Corporation.\n\n         1.4      Articles of Incorporation; By-Laws.\n\n                  (a) Articles of Incorporation.  Unless otherwise determined by\nthe Parent prior to the Effective  Time, at the Effective  Time, the Articles of\nIncorporation of the Company,  as in effect  immediately  prior to the Effective\nTime, shall be the Articles of Incorporation of the Surviving  Corporation until\nthereafter   amended  in   accordance   with  the  CGCL  and  such  Articles  of\nIncorporation.\n\n                  (b) By-Laws.  Unless otherwise  determined by the Parent prior\nto the  Effective  Time,  the By-Laws of the Company,  as in effect  immediately\nprior to the Effective Time,  shall be the By-Laws of the Surviving  Corporation\nuntil  thereafter   amended  in  accordance  with  the  CGCL,  the  Articles  of\nIncorporation of the Surviving Corporation and such By-Laws.\n\n         1.5 Directors and Officers.  The directors of  Acquisition  immediately\nprior to the  Effective  Time shall be the initial  directors  of the  Surviving\nCorporation,  each  to  hold  office  in  accordance  with  the  Certificate  of\nIncorporation  and By-Laws of the  Surviving  Corporation,  and the  officers of\nAcquisition  immediately  prior  to the  Effective  Time  shall  be the  initial\nofficers  of the  Surviving  Corporation,  in each case until  their  respective\nsuccessors are duly elected or appointed and qualified.\n\n\n                                      - 2 -\n\n\n\n\n\n\n         1.6 Additional  Actions.  If, at any time after the Effective Time, the\nSurviving  Corporation  shall  consider or be advised  that any deeds,  bills of\nsale,  assignments,  assurances  or any other  acts or things are  necessary  or\ndesirable to vest, perfect or confirm, of record or otherwise,  in the Surviving\nCorporation, its right, title or interest in or to any of the rights, properties\nor assets of Acquisition or the Company acquired or to be acquired by reason of,\nor as a result of, the Merger,  or  otherwise  to carry out the purposes of this\nAgreement, the Surviving Corporation and its proper officers and directors shall\nbe authorized to execute and deliver,  in the name and on behalf of  Acquisition\nor the Company, all such deeds, bills of sale, assignments and assurances and to\ndo, in the name and on behalf of Acquisition or the Company, all such other acts\nand things necessary or desirable to vest, perfect or confirm any and all right,\ntitle or  interest  in, to or under  such  rights,  properties  or assets in the\nSurviving Corporation or otherwise to carry out the purposes of this Agreement.\n\n                                   ARTICLE II\n\n                       CONSIDERATION; CONVERSION OF SHARES\n\n         2.1 Merger Consideration. Except as set forth in Section 2.2(f) hereof,\nthe  consideration  payable in the Merger to holders of shares of the  Company's\nCommon Stock, par value $.001 per share (\"Company Common Stock\"),  and shares of\neach series of the  Company's  Preferred  Stock,  par value $.001 per share (the\n\"Company  Preferred  Stock\" and,  together with the Company  Common  Stock,  the\n\"Company Stock\"),  shall consist solely of shares of the Common Stock, par value\n$.01 per share, of the Parent  (\"Parent  Common  Stock\"),  such shares of Parent\nCommon Stock to be issuable at the Closing in accordance  with the terms of this\nAgreement.\n\n         2.2      Conversion of Shares.\n\n                  (a)  Conversion  of  Shares.   Each  share  of  Company  Stock\n(treating all shares of Company Preferred Stock as having been converted,  as of\nthe  Effective  Time,  into  shares of Company  Common  Stock at the  respective\nconversion  ratios  therefor)  issued and  outstanding  as of the Effective Time\n(other than shares owned by holders who have properly  exercised their rights of\nappraisal  within the meaning of Chapter 13 of the CGCL  (\"Dissenting  Shares\"))\nshall,  by virtue of the Merger and without any action on the part of the holder\nthereof,  automatically be converted into that number of shares of Parent Common\nStock  as  shall  be  obtained   by  dividing   (A)   2,419,006   (the   \"Merger\nConsideration\")  minus any Expense Shares (as defined in Section 7.6) by (B) the\nnumber of Fully  Diluted  Shares (as  hereinafter  defined),  with the resulting\nquotient  (carried  to four  decimal  places)  being  referred  to herein as the\n\"Exchange  Ratio.\" \"Fully Diluted  Shares\" shall be equal to the total number of\noutstanding shares of Company Common Stock calculated on a fully diluted,  fully\nconverted basis as though all convertible debt and equity securities  (including\nthe  Company  Preferred  Stock and Company  Preferred  Stock  issuable  upon the\nexercise of any outstanding warrants) and outstanding options (whether vested or\nunvested) and  outstanding  warrants had been converted or exercised into Common\nStock,\n\n                                      - 3 -\n\n\n\n\n\n\nprovided that the term \"Fully Diluted  Shares\" shall exclude forty percent (40%)\nof the sum of (x) the number of shares of Company Common Stock issuable upon the\nexercise of outstanding  stock options which are unvested as of the Closing Date\nafter giving effect to the Merger and (y) the number of shares of Company Common\nStock  outstanding  on the Closing  Date which are  unvested  and subject to the\nright of  repurchase  as of the Closing Date after giving  effect to the Merger.\nSchedule 2.2(a) sets forth the number of outstanding  unvested stock options and\nunvested shares after giving effect to the Merger and the holders  thereof.  The\nExchange Ratio shall not change as a result of  fluctuations in the market price\nof Parent  Common Stock  between the date of this  Agreement  and the  Effective\nTime. The aggregate  number of shares of Parent Common Stock issued  pursuant to\nthis  Section  2.2(a)  shall be  referred  to in this  Agreement  as the \"Merger\nShares.\"\n\n                  (b)      Treasury Shares.  Each share of Company Common Stock \nheld in the Company's treasury as of the Effective Time, if any, shall, by \nvirtue of the Merger, be canceled without payment of any consideration therefor.\n\n                  (c) Stock  Options.  At the Effective  Time,  the  outstanding\noptions to purchase an  aggregate of up to  3,545,662  shares of Company  Common\nStock (each a \"Stock  Option\")  granted under the Company's 1995 Stock Plan (the\n\"Company Stock Plan\"),  whether  vested or unvested,  shall be deemed assumed by\nthe Parent and deemed to constitute an option to acquire,  on the same terms and\nconditions  as were  applicable  under such Stock Option prior to the  Effective\nTime  (including  terms and  conditions  relating to such Stock  Option's  term,\nexercisability, vesting schedule and status as an \"incentive stock option\" under\nSection 422 of the Code),  the number (rounded down to the nearest whole number)\nof shares of Parent Common Stock equal to the aggregate of that number of shares\nof Parent Common Stock (based on the Exchange Ratio) as the holder of such Stock\nOption  would  have been  entitled  to receive  pursuant  to the Merger had such\nholder  exercised  such Option in full  immediately  prior to the Effective Time\n(not taking into  account  whether or not such Option was in fact  exercisable).\nThe exercise  price for such Stock Options shall be the price per share equal to\n(x) the aggregate exercise price for Company Common Stock otherwise  purchasable\npursuant  to such  Stock  Option  divided  by (y) the number of shares of Parent\nCommon Stock  deemed  purchasable  pursuant to such Stock  Option (the  exercise\nprice per share,  so determined,  being rounded up to the nearest full cent). No\npayment shall be made for fractional  shares.  The aggregate number of shares of\nParent  Common Stock  issuable  upon the  exercise of Options  assumed by Parent\npursuant to this Section  2.2(c)  shall be referred to in this  Agreement as the\n\"Option  Shares.\" Any  adjustment  to an incentive  stock option made under this\nSection  2.2(c)  shall  comply with  Section  424(a) of the Code.  The  Parent's\nassumption of each Stock Option pursuant to this Section 2.2(c) shall be subject\nto the holder of such Stock Option  executing  and  delivering to the Parent the\nStock Option Assumption Agreement in the form of Exhibit I hereto providing that\nten  percent  (10%) of the Option  Shares  subject to such Stock  Option will be\ndeposited  in escrow as  security  for the  indemnification  obligations  of the\nHolders under Article XI hereof.\n\n\n                                      - 4 -\n\n\n\n\n\n\n                  (d) Warrants.  At the Effective Time, each outstanding warrant\nto purchase  Company Stock (each, a \"Warrant\" and  collectively  the \"Warrants\")\nshall, by virtue of the Merger and without any further action on the part of the\nCompany or the holder of any of Warrants  (unless further action may be required\nby the terms of any of the  Warrants),  be assumed  by Parent  and each  Warrant\nassumed by Parent shall be  exercisable  upon the same terms and  conditions  as\nunder the applicable  warrant  agreements with respect to such Warrants,  except\nthat (A) each such Warrant shall be exercisable  for that whole number of shares\nof Parent Common Stock  (rounded down to the nearest whole share) into which the\nnumber of shares of Company  Stock  subject to such  Warrant  would be converted\nunder Section 2.2(a) and (B) the exercise price per share of Parent Common Stock\nshall be equal to (x) the aggregate exercise price for the Company Stock subject\nto such Warrant in effect immediately prior to the Effective Time divided by (y)\nthe number of shares of Parent Common Stock deemed purchasable  pursuant to such\nWarrant (the exercise price per share, so determined,  being rounded down to the\nnearest full cent).  From and after the Effective  Time,  all  references to the\nCompany in the warrant  agreement  underlying  the  Warrants  shall be deemed to\nrefer to Parent.  Parent  further agrees that if required under the terms of the\nWarrants  it will  execute a  supplemental  agreement  with the  holders  of the\nWarrants to effectuate  the  foregoing.  No payment shall be made for fractional\nshares.  The aggregate number of shares of Parent Common Stock issuable upon the\nexercise of Warrants  assumed by Parent pursuant to this Section 2.2(d) shall be\nreferred to in this Agreement as the \"Warrant  Shares.\" The Parent's  assumption\nof each Warrant  pursuant to this Section  2.2(d) shall be subject to the holder\nof such Warrant  executing and  delivering to the Parent the Warrant  Assumption\nAgreement in the form of Exhibit J hereto  providing  that ten percent  (10%) of\nthe  Warrant  Shares  subject to such  Warrant  will be  deposited  in escrow as\nsecurity for the  indemnification  obligations  of the Holders  under Article XI\nhereof.\n\n                  (e) Acquisition  Shares. Each share of common stock, par value\n$0.01 per share,  of  Acquisition  issued and  outstanding at the Effective Time\nshall,  by virtue of the Merger and without any action on the part of the holder\nthereof,  automatically be converted into one fully paid and nonassessable share\nof common stock of the Surviving Corporation, as such shares of common stock are\nconstituted immediately following the Effective Time.\n\n                  (f)  Dissenting   Shares.   Any  Dissenting  Shares  shall  be\nconverted  into  the  right  to  receive  from the  Surviving  Corporation  such\nconsideration  as  may be  determined  to be  due  with  respect  to  each  such\nDissenting Share pursuant to Chapter 13 of the CGCL; provided,  however,  Shares\nthat are Dissenting Shares at the Effective Time of the Merger and are held by a\nholder who shall,  after the Effective  Time of the Merger,  withdraw his demand\nfor  appraisal  or lose his right of  appraisal as provided in the Chapter 13 of\nthe CGCL,  shall be  deemed to be  converted,  as of the  Effective  Time of the\nMerger,  into the right to receive  the  Merger  Shares in  accordance  with the\nprocedures  specified in Section  2.3. The Company  shall give Parent (i) prompt\nnotice  of any  written  demands  for  appraisal,  withdrawals  of  demands  for\nappraisal and any other  instruments  served  pursuant to Chapter 13 of the CGCL\nreceived by the Company and (ii) the opportunity to direct all  negotiations and\nproceedings  with respect to demands for appraisal under Chapter 13 of the CGCL.\nThe Company will not voluntarily make any payment\n\n                                      - 5 -\n\n\n\n\n\n\nwith respect to any demands for  appraisal  and will not,  except with the prior\nwritten  consent of Parent,  settle or offer to settle any such  demands.  It is\nunderstood  and agreed that the  obligation to make any payment under Chapter 13\nof the CGCL shall be  exclusively  that of the  Surviving  Corporation  and that\nParent shall be under no obligation to perform and discharge any such obligation\nor to  reimburse  or make  any  contribution  to the  capital  of the  Surviving\nCorporation to enable it to perform and discharge any such obligation.\n\n         2.3      Exchange of Certificates.\n\n                  (a) From and  after  the  Effective  Time,  each  holder of an\noutstanding  certificate or certificates (the \"Certificates\")  which represented\nshares of Company Common Stock or Company  Preferred Stock  immediately prior to\nthe Effective Time shall have the right to surrender each Certificate to Parent,\nand receive in exchange for all  Certificates  held by such holder a certificate\nrepresenting  the number of whole shares of Parent  Common Stock (other than the\nEscrow Shares (as defined below)) into which the Company Common Stock or Company\nPreferred  Stock evidenced by the  Certificates  so surrendered  shall have been\nconverted  pursuant  to  Section  2.2(a) of this  Agreement.  The  surrender  of\nCertificates  shall be  accompanied  by duly  completed and executed  Letters of\nTransmittal in the form of Exhibit C attached hereto.  Until  surrendered,  each\noutstanding  Certificate which prior to the Effective Time represented shares of\nCompany  Common  Stock  or  Company  Preferred  Stock  shall be  deemed  for all\ncorporate purposes to evidence ownership of the number of whole shares of Parent\nCommon Stock into which the shares of Company Common Stock or Company  Preferred\nStock have been  converted  but shall,  subject to applicable  appraisal  rights\nunder the CGCL and Section  2.2(f),  have no other rights.  Subject to appraisal\nrights under the CGCL and Section 2.2(f), from and after the Effective Time, the\nholders of shares of Company Common Stock or Company Preferred Stock shall cease\nto have any rights in respect of such shares and their rights shall be solely in\nrespect of the Parent  Common  Stock  into which such  shares of Company  Common\nStock or Company Preferred Stock have been converted.\n\n                  (b) If any shares of Parent  Common  Stock are to be issued in\nthe name of a person  other  than the  person in whose  name the  Certificate(s)\nsurrendered in exchange  therefor is registered,  it shall be a condition to the\nissuance of such  shares that (i) the  Certificate(s)  so  surrendered  shall be\nproperly assigned, endorsed or accompanied by appropriate stock powers, and (ii)\nthe person requesting such transfer shall pay Parent, or its exchange agent, any\ntransfer or other taxes  payable by reason of the  foregoing or establish to the\nsatisfaction  of Parent that such taxes have been paid or are not required to be\npaid.  Notwithstanding  the  foregoing,  neither  Parent or the Company shall be\nliable to a holder of shares of Company Common Stock or Company  Preferred Stock\nfor shares of Parent or the  Company  issuable  to such  holder  pursuant to the\nprovisions of Section  2.2(a) of this  Agreement  that are delivered to a public\nofficial pursuant to applicable abandoned property, escheat or similar laws.\n\n                  (c) In the event 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\n\n                                      - 6 -\n\n\n\n\n\n\ndestroyed,  Parent  shall issue in exchange  for such lost,  stolen or destroyed\nCertificate  the shares of Parent  Common  Stock  issuable in exchange  therefor\npursuant to the  provisions of Section  2.2(a) of this  Agreement.  The Board of\nDirectors of Parent may in its  discretion  and as a condition  precedent to the\nissuance  thereof,   require  the  owner  of  such  lost,  stolen  or  destroyed\nCertificate to provide to Parent an indemnity agreement,  reasonable in form and\nsubstance, against any claim that may be made against Parent with respect to the\nCertificate alleged to have been lost, stolen or destroyed.\n\n         2.4 No Fractional  Securities.  No  fractional  shares of Parent Common\nStock shall be issuable by the Parent upon the  conversion  of shares of Company\nCommon Stock or the Company  Preferred  Stock in the Merger  pursuant to Section\n2.2(a) hereof.  In lieu of any such  fractional  shares,  each holder of Company\nCommon Stock or Company  Preferred  Stock who would otherwise have been entitled\nto receive a fraction  of a share of Parent  Common  Stock  shall be entitled to\nreceive  instead  an amount in cash  equal to such  fraction  multiplied  by the\nClosing Market Price (as defined  below).  For purposes of this  Agreement,  the\nterm \"Closing Market Price\" shall mean the average of the last quoted sale price\nfor shares of Parent Common Stock on The Nasdaq  National Market for each of the\ntwenty trading days preceding the third trading day prior to the Effective Time.\n\n         2.5 Stock  Transfer  Books.  At the Effective  Time, the stock transfer\nbooks of the Company shall be closed, and there shall be no further registration\nof transfers  of Company  Stock or Company  Preferred  Stock  thereafter  on the\nrecords of the Company.\n\n         2.6 No Further  Ownership  Rights in Company  Stock.  The Merger Shares\ndelivered  upon the  surrender  for  exchange  of  shares  of  Company  Stock in\naccordance  with the terms  hereof  shall be deemed to have been  issued in full\nsatisfaction  of all rights  pertaining  to such  shares,  and there shall be no\nfurther registration of transfers on the records of the Surviving Corporation of\nshares  of  Company  Stock  which  were  outstanding  immediately  prior  to the\nEffective Time. If, after the Effective Time,  certificates are presented to the\nSurviving  Corporation  for any reason,  they shall be canceled and exchanged as\nprovided in this Article II.\n\n         2.7  Adjustment  Event.  If,  between the date hereof and the Effective\nTime, the issued and  outstanding  shares of Parent Common Stock shall have been\ncombined,  split,  reclassified or otherwise  changed into a different number of\nshares or a different class of shares, an appropriate adjustment to the Exchange\nRatio shall be made to fully reflect such change in such manner as is reasonably\nacceptable to the Parent and the Company. Specifically, if the Parent's proposed\ntwo-for-one  stock split is effected  prior to the Effective  Time, the Exchange\nRatio shall be adjusted to give effect to such split.  In  addition,  during the\nperiod  beginning on the date of this Agreement and ending on the earlier of the\ntermination of this Agreement and the Effective Time,  Parent shall not, without\nthe prior  written  consent  of the  Company,  declare  or pay any  dividend  or\ndistribution on Parent Common Stock unless prior thereto either (i) Parent shall\nhave provided that holders of Company  Stock,  upon the  Effective  Time,  shall\nreceive  such  dividend or  distribution  to the same extent they would have had\ntheir shares of Company Stock been\n\n                                      - 7 -\n\n\n\n\n\n\nconverted  into shares of Parent  Common Stock  immediately  prior to the record\ndate of any such dividend or distribution,  or (ii) Parent and the Company shall\nhave mutually  agreed upon an adjustment of the Exchange  Ratio to fully reflect\nthe effect of any such dividend or distribution.\n\n         2.8  Escrow.  At the  Effective  Time,  Parent  will  deposit in escrow\ncertificates  representing  ten percent  (10%) of the Merger Shares (which shall\nreduce on a pro rata basis the Merger Shares  otherwise  issuable to the Holders\nof Company  Stock under Section  2.2(a))  registered in the name of State Street\nBank and Trust Company,  as Escrow Agent, and instruments or other documentation\nrepresenting  Stock  Options to purchase ten percent  (10%) of the Option Shares\nand Warrants to purchase  ten percent  (10%) of the Warrant  Shares  issuable to\neach Holder under Section  2.2(c) or 2.2(d),  as the case may be  (collectively,\nthe  \"Escrow  Shares\").  The Escrow  Shares  shall be held as  security  for the\nindemnification  obligations  under Article XI pursuant to the  provisions of an\nEscrow  Agreement  (the  \"Escrow  Agreement \") in the form of Exhibit D attached\nhereto.\n\n         2.9 Tax  Consequences.  For Federal income tax purposes,  the Merger is\nintended to constitute a reorganization  within the meaning of Section 368(a) of\nthe Code, and that this Agreement  shall  constitute a \"plan of  reorganization\"\nwithin the meaning of Section 368(a) of the Code.\n\n                                   ARTICLE III\n\n                      REPRESENTATIONS AND WARRANTIES OF THE\n                     COMPANY AND THE PRINCIPAL SHAREHOLDERS\n\n         The  Company  and  each of the  Principal  Shareholders  represent  and\nwarrant  to the  Parent  and  Acquisition  as set forth  below,  subject  to the\nexceptions  set  forth  in  the  disclosure   schedules   attached  hereto  (the\n\"Disclosure Schedules\"),  the section numbers and letters of which correspond to\nthe  section   and   subsection   numbers   and   letters  of  this   Agreement.\nNotwithstanding  anything  to the  contrary  contained  in this  Agreement,  any\ninformation  disclosed in one section of the Disclosure  Schedules shall, should\nthe  existence  of the  information  be  relevant  to any other  section  of the\nDisclosure  Schedules,  be  deemed  to be  disclosed  in  all  sections  of  the\nDisclosure  Schedules,  but  only  to the  extent  that  the  relevance  of such\ninformation to such other section is apparent. The disclosure of any information\nshall not be deemed to constitute an  acknowledgment  that such  information  is\nrequired to be disclosed in connection with the  representations  and warranties\nmade by the Company in this  Agreement  or that it is  material,  nor shall such\ninformation be deemed to establish a standard of materiality\n\n         3.1      Corporate Organization.  (a) The Company is a corporation\nduly organized, validly existing and in good standing under the laws of the \nState of California.  The Company has no Subsidiaries (as that term is \nhereinafter defined).  The Company has all requisite corporate power and \nauthority to own, operate and lease the properties and assets it now owns, \noperates and leases and to carry on its business as presently conducted.  \nThe Company  is duly qualified to\n\n                                      - 8 -\n\n\n\n\n\n\ntransact  business  as a  foreign  corporation  and  in  good  standing  in  the\njurisdictions set forth in Schedule 3.1, which are the only jurisdictions  where\nsuch  qualification  is required by reason of the nature of the  properties  and\nassets  currently  owned,  operated  or leased by the  Company  or the  business\ncurrently conducted by it, except for such jurisdictions where the failure to be\nso  qualified  would not have a Company  Material  Adverse  Effect  (as  defined\nbelow). The Company has previously  delivered to the Parent complete and correct\ncopies of its Articles of Incorporation  (certified by the secretary of state of\nthe  jurisdiction  in which it was formed as of a recent  date) and its  By-Laws\n(certified by the  Secretary of the Company as of a recent date).  Except as set\nforth in Schedule 3.1, neither the Articles of Incorporation  nor the By-Laws of\nthe  Company  have been  amended  since the  respective  dates of  certification\nthereof,  nor has any  action  been  taken  for the  purpose  of  effecting  any\namendment of such instruments. The term \"Company Material Adverse Effect\" means,\nfor  purposes of this  Agreement,  any change,  event or effect that is, or that\nwould be, materially adverse to the business,  operations,  assets, liabilities,\nfinancial condition or results of operations of the Company; provided,  however,\nthat a Company Material Adverse Effect shall not include any adverse effect that\nis attributable  to the Merger or the  announcement of the Merger or that is due\nto any downturn in the Internet industry or any national economic downturn.\n\n         3.2  Authorization.  The Company has full corporate power and authority\nto enter into this  Agreement and to consummate  the  transactions  contemplated\nhereby. The execution and delivery of this Agreement and the consummation of the\ntransactions  contemplated  hereby  have  been  duly  approved  by the  Board of\nDirectors  of the  Company,  and no other  corporate  action  on the part of the\nCompany is necessary to approve and authorize the execution and delivery of this\nAgreement or (subject to the  approval of this  Agreement  and the  transactions\ncontemplated  hereby by the  Holders  which will be  obtained  in the manner set\nforth in Section 7.2 hereof and the filing of the Certificate of Merger pursuant\nto the CGCL and the  DGCL) the  consummation  of the  transactions  contemplated\nhereby.  This  Agreement has been duly executed and delivered by the Company and\nconstitutes  the valid and binding  agreement  of the  Company,  enforceable  in\naccordance  with its terms,  except to the  extent  that  enforceability  may be\nlimited by  applicable  bankruptcy,  reorganization,  insolvency,  moratorium or\nother laws  affecting  the  enforcement  of creditors,  rights  generally and by\ngeneral  principles  of equity,  regardless  of whether such  enforceability  is\nconsidered in a proceeding in law or in equity.\n\n         3.3 Consents and Approvals; No Violations. Subject to the filing of the\nCertificate of Merger with the Secretary of State of the State of California and\nthe Secretary of State of the State of Delaware and compliance  with  applicable\nfederal and state  securities laws, the execution and delivery of this Agreement\nand the  consummation  of the  transactions  contemplated  hereby will not:  (i)\nviolate or conflict  with any  provision  of the  Articles of  Incorporation  or\nBy-Laws of the Company,  (ii) breach,  violate or constitute an event of default\n(or an event  which with the lapse of time or the giving of notice or both would\nconstitute an event of default)  under,  give rise to any right of  termination,\ncancellation,  modification or acceleration under, or require any consent or the\ngiving of any  notice  under,  any note,  bond,  indenture,  mortgage,  security\nagreement, lease, license,  franchise,  permit, agreement or other instrument or\nobligation to which\n\n                                      - 9 -\n\n\n\n\n\n\nthe  Company is a party,  or by which the  Company or any of its  properties  or\nassets may be bound, or result in the creation of any lien, claim or encumbrance\nor other right of any third party of any kind  whatsoever upon the properties or\nassets  of  the  Company  pursuant  to  the  terms  of any  such  instrument  or\nobligation,   other   than  any   breach,   violation,   default,   termination,\ncancellation,  modification  or  acceleration  which  would  not have a  Company\nMaterial  Adverse  Effect,  (iii)  violate or  conflict  with any law,  statute,\nordinance, code, rule, regulation,  judgment, order, writ, injunction, decree or\nother instrument of any Federal,  state,  local or foreign court or governmental\nor regulatory  body,  agency or authority  applicable to the Company or by which\nany of its  properties or assets may be bound,  except for such  violations  and\nconflicts which would not have a Company  Material Adverse Effect or result in a\nfine or penalty in excess of $10,000  individually or in the aggregate,  or (iv)\nrequire, on the part of the Company, any filing or registration with, or permit,\nlicense, exemption, consent,  authorization or approval of, or the giving of any\nnotice to, any governmental or regulatory  body,  agency or authority other than\nany filing, registration,  permit, license, exemption,  consent,  authorization,\napproval  or  notice  which if not  obtained  or made  would  not have a Company\nMaterial  Adverse  Effect or result in a fine or  penalty  in excess of  $10,000\nindividually or in the aggregate. Without limiting the generality of clause (ii)\nabove,  except for the  finder's  agreements  described  in Section 13.7 hereof,\nneither  the  Company  nor  any of the  Holders  is a  party  to any  agreement,\narrangement or understanding  which contemplates the sale of the business of the\nCompany,  in whole or in part,  whether  by means of a sale of  shares,  sale of\nassets, merger, consolidation or otherwise.\n\n         3.4      Capitalization.\n\n                  (a) The  authorized  capital stock of the Company  consists of\n40,000,000  shares of Company Common Stock, of which 5,650,047 shares are issued\nand  outstanding  and 10,000,000  shares of Company  Preferred  Stock,  of which\n1,444,162  shares of Series A Convertible  Preferred Stock, and 5,231,577 shares\nof Series B Convertible  Preferred Stock,  are issued and outstanding.  Schedule\n3.4(a) sets forth a complete  and correct  list of the record  ownership  of the\nissued  and  outstanding  shares  of  Company  Stock.  All  of  the  issued  and\noutstanding  shares of Company Stock were duly authorized and validly issued and\nare  fully  paid and  nonassessable,  and were not  issued in  violation  of any\npreemptive  rights or Federal or state securities  laws.  Except as disclosed in\nSchedule 3.4(a) hereto, the Company has never repurchased or redeemed any shares\nof its capital stock,  and there are no amounts owed or which may be owed to any\nperson by the Company as a result of any  repurchase  or redemption of shares of\nits capital stock.  Except as disclosed in Schedule 3.4(a) hereto,  there are no\nagreements, arrangements or understandings to which the Company is a party or by\nwhich it is bound to redeem or  repurchase  any  shares  of its  capital  stock.\nExcept as set  forth in  Schedule  3.4(a),  there  are no  outstanding  options,\nwarrants or other  rights to purchase,  or any  securities  convertible  into or\nexchangeable  for, shares of the capital stock of the Company,  and there are no\nagreements, arrangements or understandings to which the Company is a party or by\nwhich it is bound  pursuant  to which the Company is or may be required to issue\nadditional shares of its capital stock.\n\n\n                                     - 10 -\n\n\n\n\n\n\n                  (b) Schedule  3.4(b) sets forth a complete and correct list of\nall  indebtedness  for borrowed money of the Company  outstanding as of the date\nhereof,  including,  the  name  of the  lender,  the  principal  amount  of such\nindebtedness,  together with all accrued and unpaid  interest  thereon,  and any\nprepayment penalties or premiums payable if such indebtedness is repaid prior to\nits stated maturity date.\n\n                  (c) The  Company  does not own,  directly or  indirectly,  any\nequity  securities,  or  options,  warrants  or other  rights to acquire  equity\nsecurities,   or  securities   convertible   into  or  exchangeable  for  equity\nsecurities, of any other corporation, or any partnership interest in any general\nor limited partnership or unincorporated joint venture (a \"Subsidiary\").\n\n         3.5  Financial  Statements.  Attached  hereto as  Schedule  3.5 are the\nbalance  sheets of the  Company as of June 28,  1998,  December  31,  1997,  and\nDecember 31, 1996 and the  statements of income and  statements of cash flows of\nthe Company for the fiscal  years or periods  then  ended,  including  the notes\nthereto (hereinafter  collectively  referred to as the \"Financial  Statements\").\nThe  Financial  Statements  (i) have been prepared from the books and records of\nthe Company,  (ii) have been  prepared in  accordance  with  generally  accepted\naccounting principles consistently applied (except as may be expressly indicated\ntherein or on the face of the schedules or notes to such  Financial  Statements)\nduring the periods  covered  thereby and (iii)  present  fairly in all  material\nrespects the financial  condition,  results of operations  and cash flows of the\nCompany as at the dates,  and for the periods,  stated therein,  except that the\nFinancial  Statements are subject to normal year-end  adjustments which will not\nbe  individually  or in the  aggregate  material  in amount or effect and do not\ninclude footnotes.  At July 31, 1998, the Company's total assets (as computed in\naccordance  with  generally  accepted  accounting  principles)  did not equal or\nexceed $10 million.\n\n         3.6  Absence  of  Undisclosed  Liabilities.  Except (i) as set forth or\nreserved  against in the balance sheet of the Company dated as of June 28, 1998,\nincluded in the Financial Statements (the \"Balance Sheet\"), (ii) for obligations\nincurred since June 28, 1998 in the ordinary  course of business,  which are not\nindividually or in the aggregate,  material in amount, and (iii) as set forth in\nSchedule 3.6, the Company does not have any  liabilities  or  obligations of the\nnature that would be reasonably required,  in accordance with generally accepted\naccounting principles applied on a consistent basis, to be reflected on the face\nof a balance  sheet or, in the case of the  financial  statements  for the years\nended December 31, 1996 and December 31, 1997, the notes thereto.\n\n         3.7  Absence  of  Certain  Changes  or  Events.  Except as set forth in\nSchedule  3.7,  since June 28, 1998,  the Company has carried on its business in\nthe ordinary  course and consistent  with past practice.  Except as set forth on\nSchedule 3.7 hereto,  since June 28, 1998, the Company has not: (i) incurred any\nmaterial  obligation  or liability  (whether  absolute,  accrued,  contingent or\notherwise)  except in the ordinary  course of business and consistent  with past\npractice;   (ii)  experienced  any  Company   Material  Adverse  Effect;   (iii)\naccelerated receivables or delayed payables or made any change in any accounting\nprinciple or practice or in its methods of\n\n                                     - 11 -\n\n\n\n\n\n\napplying  any such  principle or practice;  (iv)  suffered any material  damage,\ndestruction  or  loss,  whether  or not  covered  by  insurance,  affecting  its\nproperties, assets or business; (v) mortgaged, pledged or subjected to any lien,\ncharge or other  encumbrance,  or granted to third parties any rights in, any of\nits assets, tangible or intangible;  (vi) sold or transferred any of its assets,\nexcept in the ordinary course of business and consistent with past practice,  or\ncanceled or  compromised  any debts or waived any claims or rights of a material\nnature;  (vii)  issued any  additional  shares of capital  stock or any  rights,\noptions or warrants to purchase, or securities  convertible into or exchangeable\nfor,  shares of its  capital  stock other than  shares of Company  Common  Stock\nissued upon  exercise of employee  stock  options;  (viii)  declared or paid any\ndividends on or made any  distributions  (however  characterized)  in respect of\nshares of its capital  stock;  (ix)  repurchased  or redeemed  any shares of its\ncapital stock; (x) granted any general or specific  increase in the compensation\npayable  or to  become  payable  to any of  their  Employees  (as  that  term is\nhereinafter  defined) or any bonus or service  award or other like  benefit,  or\ninstituted,  increased,  augmented or improved any Benefit Plan (as that term is\nhereinafter  defined);  or (xi)  entered  into  any  agreement  to do any of the\nforegoing.\n\n         3.8 Legal Proceedings, etc. Except as set forth in Schedule 3.8 hereto,\nthere are no suits, actions, claims, proceedings (including, without limitation,\narbitral or  administrative  proceedings) or  investigations  pending or, to the\nbest knowledge of the Company or any Principal  Shareholder,  threatened against\nthe Company or its  properties,  assets or business or, to the best knowledge of\nthe Company or any Principal  Shareholder,  pending or threatened against any of\nthe officers,  directors,  employees,  agents or  consultants  of the Company in\nconnection with the business of the Company.  There are no such suits,  actions,\nclaims,  proceedings or investigations pending, or, to the best knowledge of the\nCompany or any Principal  Shareholder,  threatened  challenging  the validity or\npropriety  of the  transactions  contemplated  by this  Agreement.  There  is no\njudgment,  order,  injunction,  decree or award (whether  issued by a court,  an\narbitrator  or an  administrative  agency) to which the  Company is a party,  or\ninvolving the Company's properties,  assets or business, which is unsatisfied or\nwhich requires continuing compliance therewith by the Company.\n\n         3.9      Taxes.\n\n                  (a) Except as set forth in Schedule  3.9, the Company has duly\nand timely  filed,  or will duly and in a timely  manner file,  all material Tax\nreturns  and other  filings  in  respect  of Taxes (as that term is  hereinafter\ndefined)  required to be filed by it or which are  required to be filed by it on\nor prior to the  Effective  Time,  and has in a timely manner paid (or will in a\ntimely manner pay) all material Taxes which are (or will be) due for all periods\nending on or before the  Effective  Time,  whether or not shown on such returns.\nAll such Tax returns have been, or will be when filed, accurately and completely\nprepared  in all  material  respects  in  compliance  with all  laws,  rules and\nregulations.  The  provisions  for  Taxes  payable  reflected  in the  Financial\nStatements are adequate under generally accepted accounting principles.\n\n\n                                     - 12 -\n\n\n\n\n\n\n                  (b) Except as set forth in Schedule  3.9 hereto,  there are no\nactions  or  proceedings  currently  pending  or, to the best  knowledge  of the\nCompany or any  Principal  Shareholder,  threatened  against  the Company by any\ngovernmental  authority for the assessment or collection of Taxes,  no claim for\nthe assessment or collection of Taxes has been asserted against the Company, and\nthere are no matters under discussion with any governmental  authority regarding\nclaims  for the  assessment  or  collection  of Taxes.  Any Taxes that have been\nclaimed  or  imposed  as a result of any  examinations  of any tax return of the\nCompany by any governmental authority are being contested in good faith and have\nbeen  disclosed in writing to the Parent.  Except as set forth in Schedule  3.9,\nthere are no agreements or  applications by the Company for an extension of time\nfor the  assessment  or payment of any Taxes nor any  outstanding  waiver of the\nstatute of limitations in respect of Taxes. There are no Tax liens on any of the\nassets of the Company, except for liens for Taxes not yet due or payable or that\nare being contested in good faith in appropriate proceedings.\n\n                  (c) For  purposes  of this  Agreement,  the  terms  \"Tax\"  and\n\"Taxes\" shall mean and include any and all United States,  state, local, foreign\nor other income, sales, use, withholding,  employment, payroll, social security,\nproperty  taxes and all other  taxes of any  kind,  deficiencies,  fees or other\ngovernmental charges in the nature of taxes, including,  without limitation, any\ninstallment payment for taxes and contributions or other amounts determined with\nrespect to compensation  paid to directors,  officers,  employees or independent\ncontractors  from  time  to  time  imposed  by or  required  to be  paid  to any\ngovernmental  authority  (including  penalties  and  additions  to tax  thereon,\npenalties  for  failure to file a return or report,  and  interest on any of the\nforegoing).\n\n                  (d) The Company has not, with regard to any assets or property\nheld,  acquired  or to be  acquired  by the  Company,  filed  a  consent  to the\napplication of Section 341(f) of the Code.\n\n                  (e) The  Company has not been a United  States  real  property\nholding  corporation  within the meaning of Section 897(c)(2) of the Code during\nthe applicable period specified in Section 897(c)(1)(A)(2)(i) of the Code.\n\n                  (f) There is no agreement,  plan or  arrangement  covering any\nemployee or independent  contractor or former employee or independent contractor\nof the Company that, considered individually or considered collectively with any\nother such agreement, plan or arrangement, will, or could reasonably be expected\nto, give rise directly or indirectly to the payment of any amount that would not\nbe  deductible  pursuant to Section 280G of the Code or that would be subject to\nan excise tax under Section 4999 of the Code.\n\n                  (g) The  Company is not and has never been a party to or bound\nby any tax indemnity agreement,  tax sharing agreement, tax allocation agreement\nor similar agreement or arrangement and does not have any liability for Taxes of\nany person (other than the Company) under Treasury  Regulation  1.1502-6 (or any\nsimilar provision of state, local or foreign law).\n\n                                     - 13 -\n\n\n\n\n\n\n                  (h) The Company has withheld  amounts from its  employees  and\nother  persons   required  to  be  withheld  under  the  tax,  social  security,\nunemployment and other withholding  provisions of all federal,  state, local and\nforeign laws.\n\n         3.10 Title to Properties and Related  Matters.  (a) Except as set forth\non  Schedule  3.10(a),  the  Company  has good and valid  title to all  personal\nproperty,  tangible or intangible,  which the Company purports to own, including\nthe properties reflected on the Balance Sheet or acquired after the date thereof\n(other than properties and assets sold or otherwise  disposed of in the ordinary\ncourse of business and consistent with past practice since June 28, 1998),  free\nand clear of any claims, liens,  pledges,  security interests or encumbrances of\nany kind whatsoever (other than (i) purchase money security interests and common\nlaw  vendor's  liens,  in each case for goods  purchased  on open account in the\nordinary  course of business and having a fair market value of less than $10,000\nin each  individual  case),  (ii) liens for Taxes not yet due and  payable,  and\n(iii)  such  imperfections  of  title  and  encumbrances,  if any,  that are not\nmaterial in character,  amount or extent and that do not materially detract from\nthe value, or materially interfere with the use of, the property subject thereto\nor affected thereby.\n\n                  (b) The Company does not own any real property or any interest\nin real property,  except for the leasehold created under the leases referred to\nin Schedule 3.10(d).\n\n                  (c) Schedule 3.10(c) sets forth a complete and correct list of\nall equipment, machinery,  instruments,  vehicles, furniture, fixtures and other\nitems of personal property currently owned, leased or used by the Company with a\nbook  value as of June 28,  1998,  in each  case of  $10,000  or more.  All such\npersonal  property  is  in  satisfactory   operating   condition  (ordinary  and\nreasonable wear and tear excepted), is physically located in or about one of the\nCompany's  places of  business  and is owned by the  Company or is leased by the\nCompany  under one of the leases  set forth in  Schedule  3.10(d).  None of such\npersonal  property is subject to any agreement or commitment  for its use by any\nperson other than the Company.  The  maintenance  and operation of such personal\nproperty is appropriate for personal property of such nature and is and has been\nin material  conformance  with all applicable  laws and  regulations,  except as\nwould not have a Company  Material Adverse Effect or result in a fine or penalty\nin excess  of  $10,000  individually  or in the  aggregate.  There are no assets\nleased by the Company or used in the  business  of the  Company  that are owned,\ndirectly  or  indirectly,  by any  Related  Person (as that term is  hereinafter\ndefined).\n\n                  (d) Schedule 3.10(d) sets forth a complete and correct list of\nall real property and personal  property leases to which the Company is a party.\nThe Company has previously  delivered to the Parent  complete and correct copies\nof each lease (and any  amendments or  supplements  thereto)  listed in Schedule\n3.10(d).  With respect to such leases,  (i) each such lease is valid and binding\nand in full  force  and  effect;  (ii)  neither  the  Company  nor (to the  best\nknowledge  of the Company or any  Principal  Shareholder)  any other party is in\ndefault under any such lease,  and no event has occurred which  constitutes,  or\nwith the  lapse of time or the  giving of notice  or both  would  constitute,  a\ndefault by the Company or (to the best knowledge of the\n\n                                     - 14 -\n\n\n\n\n\n\nCompany or any  Principal  Shareholder)  a default by any other party under such\nlease,  other than any default which would not have a Company  Material  Adverse\nEffect; (iii) to the best knowledge of the Company or any Principal Shareholder,\nthere are no disputes or  disagreements  between the Company and any other party\nwith  respect to any such lease;  and (iv) the lessor  under each such lease has\nconsented or been given notice (or prior to the Closing shall have  consented or\nbeen  given  notice),  where  such  consent  or the  giving  of such  notice  is\nnecessary,  sufficient  that such  lease  shall  remain in full force and effect\nfollowing the  consummation of the  transactions  contemplated by this Agreement\nwithout requiring  modification in the rights or obligations of the lessee under\nany such lease.\n\n         3.11 Intellectual Property;  Proprietary Rights; Employee Restrictions.\n(a) The  Company  has  disclosed  in Schedule  3.11 all  registered  copyrights,\ncopyright registrations and copyright applications,  trademark registrations and\napplications  for  registration,  patents and patent  applications,  trademarks,\nservice   marks,   trade  names,   or  Internet   domain  names   (collectively,\n\"Intellectual Property Rights\") used by the Company in the Company's business as\npresently conducted, including all other registered Intellectual Property Rights\nused in connection with or contained in all versions of the Company's World Wide\nWeb sites (including  www.whowhere.com and  www.angelfire.com) and all licenses,\nassignments and releases of Intellectual Property Rights of others without which\nthe Company could not offer the services it currently  offers.  All Intellectual\nProperty  Rights  used by the  Company  in the  Company's  business  held by any\nemployee,  officer or consultant are owned by the Company by operation of law or\nhave been  validly  assigned  to the  Company.  The  Company  believes  that the\nIntellectual  Property  Rights are  sufficient  to carry on the  business of the\nCompany as  presently  conducted.  The Company  has  exclusive  ownership  of or\nlicense to use all Intellectual  Property Rights  identified in Schedule 3.11 or\nhas obtained any licenses,  releases or assignments  reasonably necessary to use\nall  third  parties'  Intellectual  Property  Rights  in works  embodied  in its\nservices.  The  present  business  activities  or products of the Company do not\ninfringe any Intellectual  Property Rights of others, except as would not have a\nCompany  Material  Adverse  Effect or result in a liability,  fine or penalty in\nexcess of $10,000 individually or in the aggregate. The Company has not received\nany notice or other claim from any person  asserting  that any of the  Company's\npresent activities infringe or may infringe any Intellectual  Property Rights of\nsuch person.\n\n                  The Company has the right to use all trade  secrets,  customer\nlists, hardware designs,  programming processes,  software and other information\nrequired  for  its   services  or  its   business  as  presently   conducted  or\ncontemplated.  The  Company  has taken all  reasonable  measures  to protect and\npreserve  the  security  and  confidentiality  of its  trade  secrets  and other\nconfidential information.  All employees and consultants of the Company involved\nin the design,  review,  evaluation or development  of products or  Intellectual\nProperty  Rights  have  executed  nondisclosure  and  assignment  of  inventions\nagreements to protect the  confidentiality  of the  Company's  trade secrets and\nother confidential information and to vest in the Company exclusive ownership of\nsuch  Intellectual  Property  Rights.  To the  knowledge  of the Company and the\nPrincipal Shareholders,  all trade secrets and other confidential information of\nthe  Company  are not  part of the  public  domain  or  knowledge,  nor,  to the\nknowledge of the Company and the\n\n                                     - 15 -\n\n\n\n\n\n\nPrincipal  Shareholders,  have they been misappropriated by any person having an\nobligation to maintain such trade secrets or other  confidential  information in\nconfidence  for the Company.  To the  knowledge of the Company and the Principal\nShareholders,  no  employee  or  consultant  of the  Company  has used any trade\nsecrets or other  confidential  information of any other person in the course of\ntheir work for the Company.\n\n                  The  Company is the  exclusive  owner of all right,  title and\ninterest in its  Intellectual  Property  Rights as  purported to be owned by the\nCompany, and to the Company's and the Principal  Shareholders'  knowledge,  such\nIntellectual  Property  Rights  are  valid  and in full  force  and  effect.  No\nuniversity,  government agency (whether federal or state) or other  organization\nsponsored research and development  conducted by the Company or has any claim of\nright to or ownership of or other  encumbrance  upon the  Intellectual  Property\nRights of the Company. The Company is not aware of any infringement by others of\nits copyrights or other Intellectual Proprietary Rights in any of its technology\nor services,  or any violation of the  confidentiality of any of its proprietary\ninformation.  To the Company's and the Principal  Shareholders'  knowledge,  the\nCompany is not making  unlawful  use of any  confidential  information  or trade\nsecrets of any past or present employees of the Company.\n\n                  Neither the Company  nor, to the  knowledge of the Company and\nthe Principal Shareholders,  any of the Company's employees, have any agreements\nor arrangements with former employers of such employees relating to confidential\ninformation  or trade secrets of such  employers or are bound by any  consulting\nagreement  relating  to  confidential  information  or trade  secrets of another\nentity that are being violated by such persons.  The activities of the Company's\nemployees on behalf of the \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-43087","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\/43087","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=43087"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43087"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43087"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}