\nARTICLE I THE MERGER 1
\n SECTION 1.1.The Merger……………………………………………………………………………1
\n SECTION 1.2.Effective Time………………………………………………………………………..2
\n SECTION 1.3.Effects of the Merger………………………………………………………………….2
\n SECTION 1.4.Certificate of Incorporation; By-Laws……………………………………………………2
\n SECTION 1.5.Directors and Officers…………………………………………………………………2
\n SECTION 1.6.Conversion of Securities……………………………………………………………….2
\n SECTION 1.7.Treatment of Employee Options and Stock Purchase Plan……………………………………..3
\n SECTION 1.8.Fractional Interests…………………………………………………………………..4
\n SECTION 1.9.Surrender of Shares of Company Common Stock; Stock Transfer Books…………………………..5
\n SECTION 1.10.Lost Certificates…………………………………………………………………….6
\n SECTION 1.11.Withholding Rights……………………………………………………………………6
\n SECTION 1.12.Closing and Closing Date………………………………………………………………7<\/p>\nARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
\n SECTION 2.1.Organization and Qualification………………………………………………………….7
\n SECTION 2.2.Certificate of Incorporation and By-Laws…………………………………………………8
\n SECTION 2.3.Capitalization; Subsidiaries……………………………………………………………8
\n SECTION 2.4.Authority Relative to This Agreement…………………………………………………….9
\n SECTION 2.5.No Conflict; Required Filings and Consents……………………………………………….9
\n SECTION 2.6.Compliance…………………………………………………………………………..10
\n SECTION 2.7.SEC Filings; Financial Statements………………………………………………………11
\n SECTION 2.8.Absence of Certain Changes or Events……………………………………………………12
\n SECTION 2.9.Absence of Litigation…………………………………………………………………12
\n SECTION 2.10.Employee Benefit Plans……………………………………………………………….12
\n SECTION 2.11.Tax Matters…………………………………………………………………………13
\n SECTION 2.12.Environmental Matters………………………………………………………………..15
\n SECTION 2.13.Form S-4; Proxy Statement…………………………………………………………….15
\n SECTION 2.14.Opinion of Financial Advisor………………………………………………………….16
\n SECTION 2.15.Brokers…………………………………………………………………………….16
\n SECTION 2.16.Affiliate Transactions……………………………………………………………….16
\n SECTION 2.17.Vote Required……………………………………………………………………….16
\n SECTION 2.18.DGCL Section 203; State Takeover Statutes………………………………………………16
\n SECTION 2.19.Material Contracts…………………………………………………………………..17
\n SECTION 2.20.Absence of Breaches or Defaults……………………………………………………….18
\n SECTION 2.21.Intellectual Property………………………………………………………………..18
\n SECTION 2.22.Insurance…………………………………………………………………………..20
\n SECTION 2.23.Labor Matters……………………………………………………………………….20
\n SECTION 2.24.Reorganization Qualification………………………………………………………….20
\n SECTION 2.25.Guides……………………………………………………………………………..20<\/p>\n
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB 21
\n SECTION 3.1.Corporate Organization………………………………………………………………..21
\n SECTION 3.2.Capitalization……………………………………………………………………….22<\/p>\n
i<\/p>\n
SECTION 3.3.Authority Relative to This Agreement……………………………………………………22
\n SECTION 3.4.No Conflict; Required Filings and Consents………………………………………………23
\n SECTION 3.5.Compliance…………………………………………………………………………..23
\n SECTION 3.6.SEC Filings; Financial Statements………………………………………………………24
\n SECTION 3.7.Absence of Certain Changes or Events……………………………………………………24
\n SECTION 3.8.Form S-4; Proxy Statement……………………………………………………………..25
\n SECTION 3.9.Absence of Litigation…………………………………………………………………25
\n SECTION 3.10.Opinion of Financial Advisor………………………………………………………….25
\n SECTION 3.11.Brokers…………………………………………………………………………….25
\n SECTION 3.12.Affiliate Transactions……………………………………………………………….26
\n SECTION 3.13.Reorganization Qualification………………………………………………………….26
\n SECTION 3.14.Stockholders’Consent and Approval Obtained……………………………………………..26
\n SECTION 3.15.Employee Benefit Plans……………………………………………………………….26
\n SECTION 3.16.Tax Matters…………………………………………………………………………26<\/p>\n
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER 26
\n SECTION 4.1.Conduct of Business of the Company Pending the Merger…………………………………….26
\n SECTION 4.2.Conduct of Business of Parent Pending the Merger…………………………………………29<\/p>\n
ARTICLE V ADDITIONAL AGREEMENTS 30
\n SECTION 5.1.Preparation of Form S-4 and the Proxy Statement; Stockholder Meeting……………………….30
\n SECTION 5.2.Accountants’Letters…………………………………………………………………..31
\n SECTION 5.3.Access to Information; Confidentiality………………………………………………….32
\n SECTION 5.4.No Solicitation of Transactions………………………………………………………..32
\n SECTION 5.5.Employee Benefits Matters……………………………………………………………..34
\n SECTION 5.6.Directors’and Officers’Indemnification; Insurance………………………………………..34
\n SECTION 5.7.Notification of Certain Matters………………………………………………………..35
\n SECTION 5.8.Further Action; Reasonable Best Efforts…………………………………………………35
\n SECTION 5.9.Public Announcements………………………………………………………………….36
\n SECTION 5.10.Stock Exchange Listing……………………………………………………………….36
\n SECTION 5.11.Affiliates………………………………………………………………………….36
\n SECTION 5.12.Board of Directors and Officers of Parent………………………………………………36
\n SECTION 5.13.Section 16b Approvals………………………………………………………………..36
\n SECTION 5.14.SEC Documents……………………………………………………………………….36
\n SECTION 5.15.Continued Employment…………………………………………………………………37
\n SECTION 5.16.Outstanding Company Securities………………………………………………………..37<\/p>\n
ARTICLE VI CONDITIONS OF MERGER 37
\n SECTION 6.1.Conditions to Obligation of Each Party to Effect the Merger……………………………….37
\n SECTION 6.2.Conditions to Obligations of the Company to Effect the Merger……………………………..37
\n SECTION 6.3.Conditions to Obligations of Parent and Sub to Effect the Merger…………………………..38<\/p>\n
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER 40
\n SECTION 7.1.Termination………………………………………………………………………….40<\/p>\n
ii<\/p>\n
SECTION 7.2.Effect of Termination…………………………………………………………………41
\n SECTION 7.3.Fees and Expenses…………………………………………………………………….41
\n SECTION 7.4.Amendment……………………………………………………………………………42
\n SECTION 7.5.Waiver………………………………………………………………………………42<\/p>\n
ARTICLE VIII GENERAL PROVISIONS 43
\n SECTION 8.1.Non-Survival of Representations, Warranties and Agreements………………………………..43
\n SECTION 8.2.Notices……………………………………………………………………………..43
\n SECTION 8.3.Certain Definitions…………………………………………………………………..44
\n SECTION 8.4.Severability…………………………………………………………………………45
\n SECTION 8.5.Entire Agreement; Assignment…………………………………………………………..45
\n SECTION 8.6.Parties in Interest…………………………………………………………………..45
\n SECTION 8.7.Governing Law………………………………………………………………………..45
\n SECTION 8.8.Headings…………………………………………………………………………….46
\n SECTION 8.9.Counterparts…………………………………………………………………………46
\n SECTION 8.10.Interpretation………………………………………………………………………46<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
AGREEMENT AND PLAN OF MERGER, dated as of October 29, 2000
\n(the “AGREEMENT”), among PRIMEDIA Inc., a Delaware corporation (“PARENT”),
\nAbracadabra Acquisition Corporation, a Delaware corporation and a direct wholly
\nowned subsidiary of Parent (“SUB”), and About.com, Inc., a Delaware corporation
\n(the “COMPANY”).<\/p>\n
WHEREAS, the Boards of Directors of Parent and Sub and the
\nCompany have declared this Agreement to be advisable, and the Boards of
\nDirectors of Parent, Sub and the Company have each approved the merger of Sub
\nwith and into the Company and the Company becoming a wholly owned direct
\nsubsidiary of Parent (the “MERGER”) in accordance with the General Corporation
\nLaw of the State of Delaware (“DGCL”) upon the terms and subject to the
\nconditions set forth herein;<\/p>\n
WHEREAS, certain stockholders of Parent holding not less than
\n70% of the outstanding voting securities of Parent have entered into a voting
\nagreement, dated as of the date hereof (the “PARENT VOTING AGREEMENT”), pursuant
\nto which they have agreed, among other things, to consent to the issuance of
\nParent Common Stock (as defined below) in the Merger;<\/p>\n
WHEREAS, concurrently with the execution and delivery of this
\nAgreement and as an inducement to the willingness of Parent and Sub to enter
\ninto this Agreement, certain holders of shares of common stock, par value $.001
\nper share (the “COMPANY COMMON STOCK”), of the Company have each entered into a
\nvoting agreement, dated as of the date hereof (the “SHAREHOLDER VOTING
\nAGREEMENT”), pursuant to which such holders have agreed to vote their shares of
\nCompany Common Stock in the manner set forth therein; and<\/p>\n
WHEREAS, for Federal income tax purposes, it is intended that
\nthe Merger shall qualify as a reorganization within the meaning of Section
\n368(a) of the Internal Revenue Code of 1986, as amended (the “CODE”);<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the
\nmutual covenants and agreements herein contained, and intending to be legally
\nbound hereby, Parent, Sub and the Company hereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
SECTION 1.1. THE MERGER. Upon the terms and subject to the
\nconditions of this Agreement and in accordance with the DGCL, at the Effective
\nTime (as defined in Section 1.2), Sub shall be merged with and into the Company.
\nAs a result of the Merger, the separate corporate existence of Sub shall cease
\nand the Company shall continue as the surviving corporation of the Merger (the
\n“SURVIVING CORPORATION”). At Parent’s election, the Merger may alternatively be
\nstructured so that any direct wholly owned subsidiary of Parent may be
\nsubstituted for Sub as a constituent corporation in the Merger. In the event of
\nsuch an election, the parties agree to execute an appropriate amendment to this
\nAgreement in order to reflect such election.<\/p>\n
SECTION 1.2. EFFECTIVE TIME. As soon as practicable after the
\nsatisfaction or waiver of the conditions set forth in Article VI, the parties
\nhereto shall cause the Merger to be consummated by filing a certificate of
\nmerger (the “CERTIFICATE OF MERGER”) with the Secretary of State of the State of
\nDelaware, in such form as required by and executed in accordance with the
\nrelevant provisions of the DGCL (the date and time of the filing of the
\nCertificate of Merger with the Secretary of State of the State of Delaware (or
\nsuch later time as is specified in the Certificate of Merger and agreed upon by
\nthe parties hereto) being the “EFFECTIVE TIME”).<\/p>\n
SECTION 1.3. EFFECTS OF THE MERGER. The Merger shall have the
\neffects set forth in the applicable provisions of the DGCL. Without limiting the
\ngenerality of the foregoing and subject thereto, at the Effective Time all the
\nproperty, rights, privileges, immunities, powers and franchises of the Company
\nand Sub shall vest in the Surviving Corporation, and all debts, liabilities and
\nduties of the Company and Sub shall become the debts, liabilities and duties of
\nthe Surviving Corporation.<\/p>\n
SECTION 1.4. CERTIFICATE OF INCORPORATION; BY-LAWS. (a) At the
\nEffective Time and without any further action on the part of the Company and
\nSub, the Restated Certificate of Incorporation of the Company (the “CERTIFICATE
\nOF INCORPORATION”) as in effect immediately prior to the Effective Time shall be
\nthe Restated Certificate of Incorporation of the Surviving Corporation until
\nthereafter and further amended as provided therein and under the DGCL.<\/p>\n
(b) At the Effective Time and without any further action on
\nthe part of the Company and Sub, the Amended and Restated By-Laws of the Company
\n(the “BY-LAWS”) shall be the Amended and Restated By-Laws of the Surviving
\nCorporation and thereafter may be amended or repealed in accordance with their
\nterms or the Certificate of Incorporation of the Surviving Corporation and as
\nprovided by law.<\/p>\n
SECTION 1.5. DIRECTORS AND OFFICERS. The directors of Sub
\nimmediately prior to the Effective Time shall be the initial directors of the
\nSurviving Corporation, each to hold office in accordance with the Certificate of
\nIncorporation and By-Laws of the Surviving Corporation, and the officers of the
\nCompany immediately prior to the Effective Time shall be the initial officers of
\nthe Surviving Corporation, in each case until their respective successors are
\nduly elected or appointed (as the case may be) and qualified.<\/p>\n
SECTION 1.6. CONVERSION OF SECURITIES. At the Effective Time,
\nby virtue of the Merger and without any action on the part of Sub, the Company
\nor the holders of any of the following securities:<\/p>\n
(a) Subject to Section 1.8, each share of Company Common Stock
\nissued and outstanding immediately prior to the Effective Time (other than
\nshares of Company Common Stock to be canceled in accordance with Section 1.6(b)
\nhereof) shall be converted into 2.3409 (the “EXCHANGE RATIO”) fully paid and
\nnonassessable shares of Common Stock, par value $0.01 per share (the “PARENT
\nCOMMON STOCK”), of Parent (the “MERGER CONSIDERATION”). As of the Effective
\nTime, all such shares of Company Common Stock shall no longer be outstanding and
\nshall automatically be canceled and shall cease to exist, and each holder of a
\ncertificate representing any such shares of Company Common Stock shall cease to
\nhave any rights with respect thereto, except the right to receive the Merger
\nConsideration and any cash in lieu of<\/p>\n
2<\/p>\n
fractional shares of Parent Common Stock to be issued or paid in consideration
\ntherefor upon surrender of such certificate in accordance with Section 1.9,
\nwithout interest.<\/p>\n
(b) Each share of Company Common Stock that is (i) held in the
\ntreasury of the Company or (ii) owned by Parent immediately prior to the
\nEffective Time shall be cancelled and retired without any conversion thereof and
\nno payment or distribution shall be made with respect thereto.<\/p>\n
(c) Each share of common stock of Sub issued and outstanding
\nimmediately prior to the Effective Time shall be converted into one validly
\nissued, fully paid and non-assessable share of common stock of the Surviving
\nCorporation and shall thereafter constitute all of the issued and outstanding
\ncapital stock of the Surviving Corporation.<\/p>\n
SECTION 1.7. TREATMENT OF EMPLOYEE OPTIONS AND STOCK PURCHASE
\nPLAN.<\/p>\n
(a) Prior to the Effective Time, the Board of Directors of the
\nCompany (or, if appropriate, any Committee thereof) and the Board of Directors
\nof Parent (or, if appropriate, any Committee thereof) shall adopt appropriate
\nresolutions and take all other actions necessary to provide that as of the
\nEffective Time all outstanding stock options of the Company (the “COMPANY STOCK
\nRIGHTS”) heretofore granted under any stock option plan of the Company or its
\nacquired subsidiaries (the “STOCK PLANS”) and which are outstanding immediately
\nprior to the Effective Time shall be assumed by Parent and be deemed to
\nconstitute an option to purchase shares of Parent Common Stock or, in the case
\nof Company Stock Rights which are in the form of restricted stock, shares of
\nrestricted Parent Common Stock (collectively, “NEW STOCK RIGHTS”) in an amount
\nand, if applicable, at an exercise price determined as provided below:<\/p>\n
(i) The number of shares of Parent Common Stock to be
\n subject to the New Stock Rights shall be equal to the product
\n of the number of shares of Company Common Stock remaining
\n subject (as of immediately prior to the Effective Time) to the
\n original Company Stock Right and the Exchange Ratio, PROVIDED
\n that any fractional shares of Parent Common Stock resulting
\n from such multiplication shall be rounded down to the nearest
\n share; and<\/p>\n
(ii) The exercise price per share of Parent Common
\n Stock under the New Stock Right shall be equal to the exercise
\n price per share of the Company Common Stock under the original
\n Company Stock Right divided by the Exchange Ratio, PROVIDED
\n that such exercise price shall be rounded down to the nearest
\n cent.<\/p>\n
The adjustment provided herein with respect to any options
\nwhich are “incentive stock options” (as defined in Section 422 of the Code)
\nshall be and is intended to be effected in a manner which is consistent with
\nSection 424(a) of the Code. Except as may be required by the terms of the
\nAutomatic Option Grant Program under the 1998 Stock Option\/Stock Issuance Plan
\nor any grants thereunder as of the date hereof to directors, the Company shall
\nnot accelerate the vesting, or otherwise amend the terms, of any unvested
\nCompany Stock Rights under any of the Stock Plans. After the Effective Time,
\neach New Stock Right shall be exercisable and shall vest upon the same terms and
\nconditions as were applicable to the related Company Stock Right <\/p>\n
3<\/p>\n
immediately prior to the Effective Time except that all references to the
\nCompany shall be deemed to be references to the Parent.<\/p>\n
(b) Immediately prior to the Effective Time, pursuant to the
\nterms of the Company’s 1999 Employee Stock Purchase Plan (the “ESPP”), each
\noutstanding purchase right under the ESPP shall be exercised for the purchase of
\nCompany Common Stock at the price per share set forth in the ESPP. The Company
\nCommon Stock purchased under the ESPP shall be considered issued and outstanding
\nimmediately prior to the Effective Time and shall be converted pursuant to
\nSection 1.6 hereof. In addition, prior to the Effective Time, the Company shall
\namend the ESPP to provide for (i) its continuation from and after the Effective
\nTime and (ii) a new offering period to commence from and after the Effective
\nTime and to terminate immediately prior to the start of the next succeeding
\noffering period under the PRIMEDIA Employee Stock Purchase Plan for which
\nparticipants in the ESPP are eligible to particpate.<\/p>\n
(c) The Company shall ensure that following the Effective Time
\nno holder of a Company Stock Right or any participant in any Stock Plans shall
\nhave any right thereunder to acquire capital stock of the Company, Sub, or the
\nSurviving Corporation. The Company will take all reasonable steps to ensure
\nthat, immediately following the Effective Time, none of Sub, the Company, the
\nSurviving Corporation or any of their respective subsidiaries is or will be
\nbound by any Company Stock Rights, other options, warrants, rights or agreements
\nwhich would entitle any person, other than Sub or its affiliates, to own any
\ncapital stock of the Company, Sub, the Surviving Corporation or any of their
\nrespective subsidiaries or to receive any payment in respect thereof.<\/p>\n
(d) In connection with the issuance of New Stock Rights and
\nthe assumption of the ESPP, Parent shall (i) reserve for issuance the aggregate
\nnumber of shares of Parent Common Stock that will become subject to New Stock
\nRights and the ESPP pursuant to this Section 1.7 from and after the Effective
\nTime, upon exercise of New Stock Rights and the purchase rights under the ESPP,
\n(ii) make available for issuance all shares of Parent Common Stock covered
\nthereby, subject to the terms and conditions applicable thereto, and (iii) if
\nnecessary, as soon as reasonably practicable following the Effective Time, file
\na registration statement on Form S-8 covering the shares to be issued upon
\nexercise of the New Stock Rights and the purchase rights under the ESPP.<\/p>\n
SECTION 1.8. FRACTIONAL INTERESTS. No certificates or scrip
\nrepresenting fractional shares of Parent Common Stock shall be issued in
\nconnection with the Merger, and such fractional interests will not entitle the
\nowner thereof to any rights of a stockholder of Parent. In lieu of any such
\nfractional interests, each holder of shares of Company Common Stock exchanged
\npursuant to Section 1.6(a) who would otherwise have been entitled to receive a
\nfraction of a share of Parent Common Stock (after taking into account all shares
\nof Company Common Stock then held of record by such holder) shall receive cash
\n(without interest) in an amount equal to the product of such fractional part of
\na share of Parent Common Stock multiplied by the closing price of a share of
\nParent Common Stock on the NYSE as reported by The Wall Street Journal (or if
\nnot reported thereby, any other authoritative source) on the Closing Date (as
\ndefined in Section 1.12), rounded down to the nearest cent.<\/p>\n
4<\/p>\n
SECTION 1.9. SURRENDER OF SHARES OF COMPANY COMMON STOCK;
\nSTOCK TRANSFER BOOKS. (a) Prior to the Closing Date, Sub shall designate a bank
\nor trust company to act as agent for the holders of shares of Company Common
\nStock in connection with the Merger (the “EXCHANGE AGENT”) to receive the shares
\nof Parent Common Stock (and any cash payable in lieu of any fractional shares of
\nParent Common Stock) to which holders of shares of Company Common Stock shall
\nbecome entitled pursuant to Sections 1.6(a) and 1.8. When and as needed, Parent
\nor Sub will make available to the Exchange Agent sufficient shares of Parent
\nCommon Stock and cash to make all exchanges pursuant to Section 1.9(b).<\/p>\n
(b) Promptly after the Effective Time, the Surviving
\nCorporation shall cause to be mailed to each record holder, as of the Effective
\nTime, of an outstanding certificate or certificates which immediately prior to
\nthe Effective Time represented shares of Company Common Stock (the
\n“CERTIFICATES”), a form of letter of transmittal (which shall specify that
\ndelivery shall be effected, and risk of loss and title to the Certificates shall
\npass, only upon proper delivery of the Certificates to the Exchange Agent) and
\ninstructions for use in effecting the surrender of the Certificates in exchange
\nfor certificates representing shares of Parent Common Stock therefor and for
\ncash payable in lieu of any fractional shares of Parent Common Stock. Upon
\nsurrender to the Exchange Agent of a Certificate, together with such letter of
\ntransmittal, duly completed and validly executed in accordance with the
\ninstructions thereto, and such other documents as may be required pursuant to
\nsuch instructions, the holder of such Certificate shall be entitled to receive
\nin exchange therefor, (i) a certificate representing that number of whole shares
\nof Parent Common Stock which such holder has the right to receive pursuant to
\nthe provisions of Section 1.6(a) and (ii) cash in lieu of any fractional shares
\nof Parent Common Stock to which such holder is entitled pursuant to Section 1.8,
\nafter giving effect to any required tax withholdings, and the Certificate so
\nsurrendered shall forthwith be cancelled. If the exchange of certificates
\nrepresenting shares of Parent Common Stock is to be made to a person other than
\nthe person in whose name the surrendered Certificate is registered, it shall be
\na condition of exchange that the Certificate so surrendered shall be properly
\nendorsed or shall be otherwise in proper form for transfer and that the person
\nrequesting such exchange shall have paid any transfer and other taxes required
\nby reason of the exchange of certificates representing shares of Parent Common
\nStock to a person other than the registered holder of the Certificate
\nsurrendered or shall have established to the satisfaction of the Surviving
\nCorporation that such tax either has been paid or is not applicable.<\/p>\n
(c) At any time following six months after the Effective Time,
\nthe Surviving Corporation shall be entitled to require the Exchange Agent to
\ndeliver to it any shares of Parent Common Stock (and any cash payable in lieu of
\nany fractional shares of Parent Common Stock) which had been made available to
\nthe Exchange Agent and which have not been disbursed to holders of Certificates,
\nand thereafter such holders shall be entitled to look to the Surviving
\nCorporation (subject to abandoned property, escheat or other similar laws) only
\nas general creditors thereof with respect to the shares of Parent Common Stock
\n(and any cash payable in lieu of any fractional shares of Parent Common Stock)
\npayable upon due surrender of their Certificates. Notwithstanding the foregoing,
\nnone of the Surviving Corporation, Parent or the Exchange Agent shall be liable
\nto any holder of a Certificate for shares of Parent Common Stock (and any cash
\npayable in lieu of any fractional shares of Parent Common Stock) delivered to a
\npublic official pursuant to any applicable abandoned property, escheat or
\nsimilar law.<\/p>\n
5<\/p>\n
(d) At the Effective Time, the stock transfer books of the
\nCompany shall be closed and thereafter there shall be no further registration of
\ntransfers of shares of Company Common Stock on the records of the Company. From
\nand after the Effective Time, the holders of Certificates evidencing ownership
\nof shares of Company Common Stock outstanding immediately prior to the Effective
\nTime shall cease to have any rights with respect to such shares of Company
\nCommon Stock except as otherwise provided for herein or by applicable law.<\/p>\n
(e) No dividends or other distributions declared or made after
\nthe Effective Time with respect to shares of Parent Common Stock shall be paid
\nto the holder of any unsurrendered Certificate with respect to the whole shares
\nof Parent Common Stock it is entitled to receive and no cash payment in lieu of
\nfractional interests shall be paid pursuant to Section 1.8 until the holder of
\nsuch Certificate shall surrender such Certificate in accordance with the
\nprovisions of this Agreement. Upon such surrender, there shall be paid to the
\nperson in whose name the certificates representing such whole shares of Parent
\nCommon Stock shall be issued, any dividends or distributions with respect to
\nsuch shares of Parent Common Stock which have a record date after the Effective
\nTime and shall have become payable between the Effective Time and the time of
\nsuch surrender. In no event shall the person entitled to receive such dividends
\nor distributions be entitled to receive interest thereon.<\/p>\n
(f) If, at any time after the Effective Time, the Surviving
\nCorporation shall consider or be advised that any deeds, bills of sale,
\nassignments, assurances or any other actions 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, to or under any of the rights,
\nproperties or assets of either Sub or the Company acquired or to be acquired by
\nthe Surviving Corporation as a result of, or in connection with, the Merger or
\notherwise to carry out this Agreement, the officers of the Surviving Corporation
\nshall be authorized to execute and deliver, in the name and on behalf of each of
\nSub and the Company or otherwise, all such deeds, bills of sale, assignments and
\nassurances and to take and do, in such names and on such behalves or otherwise,
\nall such other actions and things as may be necessary or desirable to vest,
\nperfect or confirm any and all right, title and interest in, to and under such
\nrights, properties or assets in the Surviving Corporation or otherwise to carry
\nout the purposes of this Agreement.<\/p>\n
SECTION 1.10. LOST CERTIFICATES. If any Certificate shall have
\nbeen lost, stolen or destroyed, upon the making of an affidavit of that fact by
\nthe holder claiming such Certificate to be lost, stolen or destroyed and, if
\nrequired by the Surviving Corporation, the posting by such holder of a bond in
\nsuch reasonable amount as the Surviving Corporation may direct as indemnity
\nagainst any claim that may be made against it with respect to such Certificate,
\nthe Exchange Agent will deliver in exchange for such lost, stolen or destroyed
\nCertificate the applicable Merger Consideration with respect to the shares of
\nCompany Common Stock formerly represented thereby, any cash in lieu of
\nfractional shares of Parent Common Stock and unpaid dividends and distributions
\non shares of Parent Common Stock deliverable in respect thereof pursuant to this
\nAgreement.<\/p>\n
SECTION 1.11. WITHHOLDING RIGHTS. Each of the Surviving
\nCorporation and Parent shall be entitled to deduct and withhold from the
\nconsideration otherwise payable pursuant to this Agreement to any holder of
\nshares of Company Common Stock such amounts as it is required to deduct and
\nwithhold with respect to the making of such payment under the Code<\/p>\n
6<\/p>\n
and the rules and regulations promulgated thereunder, or any provision of state,
\nlocal or foreign tax law. To the extent that amounts are so withheld by the
\nSurviving Corporation or Parent, as the case may be, such withheld amounts shall
\nbe treated for all purposes of this Agreement as having been paid to the holder
\nof the shares of Company Common Stock in respect of which such deduction and
\nwithholding was made by the Surviving Corporation or Parent, as the case may be.<\/p>\n
SECTION 1.12. CLOSING AND CLOSING DATE. Unless this Agreement
\nshall have been terminated and the transactions herein contemplated shall have
\nbeen abandoned pursuant to the provisions of Section 7.1, the closing (the
\n“CLOSING”) of this Agreement shall take place (a) at 10:00 a.m. (New York time)
\non the second business day after all of the conditions to the respective
\nobligations of the parties set forth in Article VI hereof shall have been
\nsatisfied or waived or (b) at such other time and date as Parent and the Company
\nshall agree (such date and time on and at which the Closing occurs being
\nreferred to herein as the “CLOSING DATE”). The Closing shall take place at such
\nlocation as Parent and the Company shall agree.<\/p>\n
ARTICLE II<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to Parent and Sub
\nthat, except as set forth in the corresponding sections or subsections of the
\nDisclosure Schedule delivered by the Company to Parent and Sub prior to the
\nexecution of this Agreement (the ” COMPANY DISCLOSURE SCHEDULE”) or in any other
\nsection or subsection of the Company Disclosure Schedule if it is reasonably
\napparent that such disclosure applies:<\/p>\n
SECTION 2.1. ORGANIZATION AND QUALIFICATION. Each of the
\nCompany and each of its subsidiaries is a corporation duly organized, validly
\nexisting and in good standing under the laws of the jurisdiction of its
\nincorporation and has the requisite corporate power and authority and any
\nnecessary governmental approvals to own, lease and operate its properties and to
\ncarry on its business as it is now being conducted, except where the failure to
\nhave such power, authority and governmental approvals could not, individually or
\nin the aggregate, reasonably be expected to have a Material Adverse Effect (as
\ndefined below). Each of the Company and each of its subsidiaries is duly
\nqualified or licensed as a foreign corporation to do business, and is in good
\nstanding, in each jurisdiction where the character of its properties owned,
\nleased or operated by it or the nature of its activities makes such
\nqualification or licensing necessary, except for such failures to be so duly
\nqualified or licensed or in good standing which could not, individually or in
\nthe aggregate, reasonably be expected to have a Material Adverse Effect. When
\nused in this Article II or otherwise in connection with the Company or any of
\nits subsidiaries, the term “MATERIAL ADVERSE EFFECT” means any change or effect
\nthat would be materially adverse to the business, properties, assets, condition
\n(financial or otherwise) or results of operations of the Company and its
\nsubsidiaries taken as a whole or that would materially impair the ability of the
\nCompany to perform its obligations hereunder; PROVIDED that none of the
\nfollowing shall be taken into account in determining whether there has been or
\ncould be a Material Adverse Effect: (w) any employee attrition after the date
\nhereof; (x) any change arising from the public announcement of the Merger and
\nthe other transactions contemplated by this Agreement; (y) any change in the
\nmarket price or trading volume of the Company Common <\/p>\n
7<\/p>\n
Stock after the date hereof; or (z) any adverse effect on the Company
\nattributable solely to conditions affecting the business to consumer Internet
\nindustry, the United States economy as a whole or foreign economies in any
\nlocations where the Company or any of its subsidiaries has material operations
\nor sales (and not having a materially disproportionate effect on the Company).<\/p>\n
SECTION 2.2. CERTIFICATE OF INCORPORATION AND BY-LAWS. The
\nCompany has heretofore furnished or made available to Parent a complete and
\ncorrect copy of the Certificate of Incorporation and the By-Laws as currently in
\neffect. Such Certificate of Incorporation and By-Laws are in full force and
\neffect and no other organizational documents are applicable to or binding upon
\nthe Company.<\/p>\n
SECTION 2.3. CAPITALIZATION; SUBSIDIARIES. (a) The authorized
\ncapital stock of the Company consists of 105,000,000 shares, consisting of (i)
\n5,000,000 shares of preferred stock, par value $0.001 per share (“PREFERRED
\nSTOCK”), and (ii) 100,000,000 shares of Company Common Stock. As of September
\n30, 2000, (i) 18,462,290 shares of Company Common Stock were issued and
\noutstanding, all of which shares were duly authorized, validly issued, fully
\npaid and nonassessable and were issued free of preemptive (or similar) rights,
\n(ii) no shares of Company Common Stock were held in the treasury of the Company,
\n(iii) no shares of Company Common Stock which are restricted stock issued
\npursuant to the ESPP were issued and outstanding, (iv) an aggregate of 8,024,872
\nshares, of Company Common Stock were reserved and available for issuance in
\nconnection with the exercise of stock options issuable pursuant to the Stock
\nPlans (other than the ESPP); (v) an aggregate of 125,000 shares of Company
\nCommon Stock were reserved for issuance and issuable upon or otherwise
\ndeliverable in connection with the exercise of purchase rights under the ESPP;
\nand (vi) an aggregate of 5,369,591 shares of Company Common Stock are issuable
\nupon or otherwise deliverable in connection with the exercise of all outstanding
\nCompany Stock Rights issued pursuant to the Stock Plans or otherwise identified
\non Section 2.3(a) of the Company Disclosure Schedule. All of the shares of
\nCompany Common Stock that may be issued pursuant to the Stock Plans will be,
\nwhen issued, duly authorized, validly issued, fully paid and nonassessable and
\nnot subject to preemptive (or similar) rights. No shares of preferred stock of
\nthe Company are outstanding or held in the treasury of the Company. Except as
\nset forth above or in Section 2.3(a) of the Company Disclosure Schedule, there
\nare outstanding (A) no shares of capital stock or other voting securities
\n(including indebtedness having the right to vote) of the Company, (B) no
\nsecurities of the Company convertible into or exchangeable for shares of capital
\nstock or voting securities (including indebtedness having the right to vote) of
\nthe Company, (C) no options, warrants or other rights to acquire from the
\nCompany, and no obligation of the Company to issue, any capital stock, voting
\nsecurities (including indebtedness having the right to vote) or securities
\nconvertible into or exchangeable for capital stock or voting securities
\n(including indebtedness having the right to vote) of the Company and (D) no
\nequity equivalents, interests in the ownership or earnings of the Company or
\nother similar rights (collectively, “COMPANY SECURITIES”). Except pursuant to
\nthe Stock Plans and the Company Securities issued thereunder, there are no
\noutstanding obligations of the Company or any of its subsidiaries to repurchase,
\nredeem or otherwise acquire any Company Securities and there is no voting trust
\nor other agreement or understanding to which the Company or any of its
\nsubsidiaries is a party or is bound with respect to the voting of the capital
\nstock of the Company of any of its subsidiaries. There are no other options,
\ncalls, warrants or other rights, agreements, arrangements or commitments of any<\/p>\n
8<\/p>\n
character relating to the issued or unissued capital stock of the Company or any
\nof its subsidiaries to which the Company or any of its subsidiaries is a party.<\/p>\n
(b) Each of the outstanding shares of capital stock of each of
\nthe Company’s subsidiaries is duly authorized, validly issued, fully paid and
\nnonassessable and all such shares are owned by the Company or another wholly
\nowned subsidiary of the Company and are owned free and clear of all security
\ninterests, liens, claims, pledges, agreements, limitations in voting rights,
\nlicenses, charges or other encumbrances of any nature whatsoever (“LIENS”).
\nThere are no outstanding contractual obligations of the Company or any of its
\nsubsidiaries to repurchase, redeem or otherwise acquire any shares of capital
\nstock of any subsidiary or, except as set forth in Section 2.3(b) of the Company
\nDisclosure Schedule, to provide funds to or make any investment (in the form of
\na loan, capital contribution or otherwise) in any such subsidiary or any other
\nentity. Section 2.3(b) of the Company Disclosure Schedule sets forth a complete
\nand correct list of all of the subsidiaries of the Company and all other
\nentities in which the Company owns, directly or indirectly, any equity interest.
\nSuch list sets forth the amount of capital stock or other equity interests owned
\nby the Company, directly or indirectly, in such subsidiaries or other entities.<\/p>\n
(c) The signatories to the Shareholder Voting Agreement hold
\nat least 10% of the outstanding shares of Company Common Stock (on a fully
\ndiluted basis).<\/p>\n
SECTION 2.4. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company
\nhas all necessary corporate power and authority to execute and deliver this
\nAgreement, to perform its obligations hereunder and to consummate the
\ntransactions contemplated hereby. The execution, delivery and performance of
\nthis Agreement by the Company and the consummation by the Company of the
\ntransactions contemplated hereby has been duly and validly authorized by all
\nnecessary corporate action and no other corporate proceedings on the part of the
\nCompany are necessary to authorize this Agreement, or to consummate the
\ntransactions so contemplated (other than, with respect to the Merger, the
\nadoption of this Agreement by the holders of a majority of the outstanding
\nshares of Company Common Stock, and the filing of appropriate merger documents
\nas required by the DGCL). This Agreement has been duly and validly executed and
\ndelivered by the Company and, assuming the due authorization, execution and
\ndelivery hereof by Parent and Sub (as applicable), constitutes a legal, valid
\nand binding obligations of the Company enforceable against the Company in
\naccordance with its terms (except insofar as enforceability may be limited by
\napplicable bankruptcy, insolvency, reorganization, moratorium or similar laws
\naffecting creditors’ rights generally or by principles governing the
\navailability of equitable remedies).<\/p>\n
SECTION 2.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a)
\nThe execution, delivery and performance of this Agreement by the Company do not
\nand will not: (i) conflict with or violate the Certificate of Incorporation or
\nBy-Laws of the Company or the equivalent organizational documents of any of its
\nsubsidiaries; (ii) conflict with or violate any law, statute, rule, regulation,
\norder, writ, award, judgment, directive, decree, injunction, determination,
\nsettlement or stipulation (“ORDER”) applicable to the Company or any of its
\nsubsidiaries or by which its or any of their respective properties are bound or
\naffected (assuming that all consents, approvals and authorizations contemplated
\nby clauses (i), (ii) and (iii) of subsection (b) below have been obtained and
\nall filings described in such clauses have been made); or (iii) result in <\/p>\n
9<\/p>\n
any breach or violation of or constitute a default (or an event which with
\nnotice or lapse of time or both could become a default) or result in the loss of
\na benefit or creation of additional liabilities or fees under, or give rise to
\nany right of termination, amendment, acceleration or cancellation of, or result
\nin the creation of a Lien on any of the properties or assets of the Company or
\nany of its subsidiaries pursuant to, any note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit, franchise or other instrument or
\nobligation to which the Company or any of its subsidiaries is a party or by
\nwhich the Company or any of its subsidiaries or any of their respective
\nproperties are bound or affected, except, in the case of clauses (ii) and (iii),
\nfor any such conflicts, violations, breaches, defaults or other occurrences
\nwhich could not, individually or in the aggregate, reasonably be expected to
\nhave a Material Adverse Effect.<\/p>\n
(b) The execution, delivery and performance of this Agreement
\nby the Company and the consummation of the Merger by the Company do not and will
\nnot require any consent, approval, authorization or permit of, action by, filing
\nwith or notification to, any governmental or regulatory authority, domestic or
\nforeign, except for (i) applicable requirements of the Securities Act of 1933,
\nas amended (the “SECURITIES ACT”), and the rules and regulations promulgated
\nthereunder, the Securities Exchange Act of 1934, as amended (the “EXCHANGE
\nACT”), and the rules and regulations promulgated thereunder, the
\nHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
\nACT”), the rules and regulations of the NYSE, Nasdaq National Market (“NASDAQ”)
\nand state securities, takeover and Blue Sky laws, (ii) the filing and
\nrecordation of appropriate merger or other documents as required by the DGCL and
\n(iii) such consents, approvals, authorizations, permits, actions, filings or
\nnotifications the failure of which to make or obtain could not, individually or
\nin the aggregate, reasonably be expected to (x) prevent or delay consummation of
\nthe Merger or (y) have a Material Adverse Effect.<\/p>\n
SECTION 2.6. COMPLIANCE. The Company and each of its
\nsubsidiaries are in compliance with, and are not in default or violation of, (i)
\nthe Certificate of Incorporation and By-Laws of the Company or the equivalent
\norganizational documents of such subsidiary, (ii) all laws (including, without
\nlimitation, Environmental Laws) and Orders applicable to them or by which any of
\ntheir respective properties or businesses are bound or affected and (iii) all
\nnotes, bonds, mortgages, indentures, contracts, agreements, leases, licenses,
\npermits, franchises and other instruments or obligations to which any of them
\nare a party or by which any of them or any of their respective properties are
\nbound or affected (including all of the foregoing respecting the privacy
\ninformation of users or visitors to their web sites, including minors), except,
\nin the case of clauses (ii) and (iii), for any such failures of compliance,
\ndefaults and violations which could not, individually or in the aggregate,
\nreasonably be expected to have a Material Adverse Effect. Except as disclosed
\nwith reasonable specificity prior to the date hereof in the Company SEC Reports
\n(as defined in Section 2.7), neither the Company nor any of its subsidiaries has
\nreceived notice of any revocation or modification of any federal, state, local
\nor foreign governmental license, certification, tariff, permit, authorization or
\napproval material to the Company and its subsidiaries taken as a whole. The
\nCompany and its subsidiaries have all permits, licenses, authorizations,
\nconsents, approvals and franchises from governmental agencies required to
\nconduct their businesses as now being conducted, except for such permits,
\nlicenses, authorizations, consents, approvals, and franchises the absence of
\nwhich could not, individually or in the aggregate, reasonably be expected have a
\nMaterial Adverse Effect.<\/p>\n
10<\/p>\n
SECTION 2.7. SEC FILINGS; FINANCIAL STATEMENTS. (a) The
\nCompany and, to the extent applicable, each of its then or current subsidiaries,
\nhas filed all forms, reports, statements and documents required to be filed with
\nthe Securities and Exchange Commission (the “SEC”) since January 1, 1999
\n(collectively, the “COMPANY SEC REPORTS”), each of which has complied in all
\nmaterial respects with the applicable requirements of the Securities Act and the
\nrules and regulations promulgated thereunder, or the Exchange Act and the rules
\nand regulations promulgated thereunder, each as in effect on the date so filed.
\nNone of such Company SEC Reports (including but not limited to any financial
\nstatements or schedules included or incorporated by reference therein)
\ncontained, when filed, any untrue statement of a material fact or omitted to
\nstate a material fact required to be stated or incorporated by reference therein
\nor necessary in order to make the statements therein, in the light of the
\ncircumstances under which they were made, not misleading. Except to the extent
\nrevised or superseded by a subsequent filing with the SEC made prior to the date
\nhereof (a copy of which has been provided or made available to Parent), none of
\nthe Company SEC Reports filed by the Company since January 1, 1999, contains any
\nuntrue statement of a material fact or omits to state a material fact required
\nto be stated or incorporated by reference therein or necessary in order to make
\nthe statements therein, in the light of the circumstances under which they were
\nmade, not misleading.<\/p>\n
(b) Each of the unaudited consolidated financial statements of
\nthe Company and its subsidiaries (including any audited and related notes
\nthereto) included in the Company SEC Reports, complies or, if not yet filed,
\nwill comply as to form in all material respects with all applicable accounting
\nrequirements and with the published rules and regulations of the SEC with
\nrespect thereto, has been or, if not yet filed, will have been prepared in
\naccordance with generally accepted accounting principles (except, in the case of
\nunaudited consolidated quarterly statements, as permitted by Form 10-Q of the
\nSEC) applied on a consistent basis throughout the periods involved (except as
\nmay be indicated in the notes thereto) and fairly presents in all material
\nrespects or, if not yet filed, will fairly present in all material respects the
\nconsolidated financial position of the Company and its subsidiaries at the
\nrespective date thereof and the consolidated results of its and their operations
\nand changes in cash flows for the periods indicated (subject, in the case of
\nunaudited quarterly statements, to normal year-end audit adjustments).<\/p>\n
(c) Except as and to the extent set forth on the consolidated
\nbalance sheet of the Company and its subsidiaries at June 30, 2000, including
\nthe notes thereto, included in the Company’s Quarterly Report on Form 10-Q for
\nthe fiscal quarter ended June 30, 2000 (the “JUNE 30 10Q”), neither the Company
\nnor any of its subsidiaries has any liabilities or obligations of any nature
\n(whether accrued, absolute, contingent or otherwise), except for liabilities or
\nobligations incurred in the ordinary course of business since June 30, 2000
\nwhich could not, individually or in the aggregate, reasonably be expected to
\nhave a Material Adverse Effect.<\/p>\n
(d) The Company has heretofore furnished to Parent a complete
\nand correct copy of any amendments or modifications which have not yet been
\nfiled with the SEC to agreements, documents or other instruments which
\npreviously had been filed by the Company with the SEC pursuant to the Securities
\nAct and the rules and regulations promulgated thereunder or the Exchange Act and
\nthe rules and regulations promulgated thereunder.<\/p>\n
11<\/p>\n
SECTION 2.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
\nDecember 31, 1999, except as specifically disclosed in the Company SEC Reports
\nfiled and publicly available prior to the date of this Agreement or set forth in
\nSection 2.8 of the Company Disclosure Schedule, the Company and its subsidiaries
\nhave conducted their businesses only in the ordinary course and in a manner
\nconsistent with past practice and since such date there has not been (i) any
\nchange in the financial condition, results of operations, assets, business or
\noperations of the Company or any of its subsidiaries, individually or in the
\naggregate, having or which could be reasonably likely to have a Material Adverse
\nEffect, (ii) any condition, event or occurrence which, individually or in the
\naggregate, having or which could reasonably be expected to have a Material
\nAdverse Effect, (iii) any damage, destruction or loss (whether or not covered by
\ninsurance) with respect to any assets of the Company or any of its subsidiaries,
\nindividually or in the aggregate, having or which could reasonably be expected
\nto have a Material Adverse Effect or (iv) any other action which, if it had been
\ntaken after June 30, 2000, would have required the consent of Parent under
\nSection 4.1 hereof.<\/p>\n
SECTION 2.9. ABSENCE OF LITIGATION. Except as specifically
\ndisclosed in the Company SEC Reports filed and publicly available prior to the
\ndate of this Agreement or Section 2.9 of the Company Disclosure Schedule, there
\nare no suits, claims, actions, arbitrations, proceedings or investigations
\n(“ACTIONS”) pending or, to the best knowledge of the Company, threatened against
\nthe Company or any of its subsidiaries, or any properties or rights of the
\nCompany or any of its subsidiaries, before any court, arbitrator or
\nadministrative, governmental or regulatory authority or body, domestic or
\nforeign. To the Company’s knowledge, neither the Company nor any of its
\nsubsidiaries nor any of their respective properties is or are subject to any
\nOrder having, or which could, individually or in the aggregate, reasonably be
\nexpected to have a Material Adverse Effect.<\/p>\n
SECTION 2.10. EMPLOYEE BENEFIT PLANS. (a) Section 2.10(a) of
\nthe Company Disclosure Schedule contains a true and complete list of each
\n“employee benefit plan” (within the meaning of section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”), (including without
\nlimitation multiemployer plans within the meaning of ERISA section 3(37)), stock
\npurchase, stock option, severance, employment, change-of-control, fringe
\nbenefit, collective bargaining, bonus, incentive, deferred compensation and all
\nother employee benefit plans, agreements, programs, policies or other
\narrangements, whether or not subject to ERISA, whether formal or informal, oral
\nor written, legally binding or not under which any employee or former employee
\nof the Company or any of its subsidiaries has any present or future right to
\nbenefits (with respect to his or her relationship to the Company or any of its
\nsubsidiaries) or under which the Company or any of its subsidiaries has any
\npresent or future liability. All such plans, agreements, programs, policies and
\narrangements shall be collectively referred to as the “PLANS”.<\/p>\n
(b) With respect to each Plan, the Company has delivered or
\nmade available to Parent a current, accurate and complete copy (or, to the
\nextent no such copy exists, an accurate description) thereof and, to the extent
\napplicable, (i) any related trust agreement, annuity contract or other funding
\ninstrument; (ii) the most recent determination letter; (iii) any summary plan
\ndescription and other material written communications (or a description of any
\noral communications) by the Company or any of its subsidiaries to its employees
\nconcerning the extent of the benefits provided under a Plan; and (iv) for the
\nthree most recent years: (I) the Form 5500 <\/p>\n
12<\/p>\n
and attached schedules; (II) audited financial statements; and (III) actuarial
\nvaluation reports.<\/p>\n
(c) Except as could not, individually or in the aggregate,
\nreasonably be expected to have a Material Adverse Effect, (i) each Plan has been
\nestablished and administered in accordance with its terms, and in compliance
\nwith the applicable provisions of ERISA, the Code and other applicable laws,
\nrules and regulations and if intended to be qualified within the meaning of
\nsection 401(a) of the Code has received a favorable determination letter (or
\nopinion or notification letter, if applicable) from the Internal Revenue Service
\nor there is a period of time remaining under applicable Internal Revenue Service
\nregulations or pronouncements in which to apply for such a letter and make any
\nretroactive amendments necessary to obtain a favorable determination as to the
\nqualified status of each such Plan, and the Company is not aware of any
\ncircumstances which could result in the revocation or denial of any such
\nfavorable determination letter; (ii) with respect to any Plan, no Actions (other
\nthan routine claims for benefits in the ordinary course) are pending or, to the
\nknowledge of the Company, threatened; (iii) neither the Company nor any other
\nparty has engaged in a prohibited transaction, as such term is defined under
\nsection 4975 of the Code or section 406 of ERISA, which would subject the
\nCompany, the Surviving Corporation, any of their subsidiaries, Sub or Parent to
\nany taxes, penalties or other liabilities under section 4975 of the Code or
\nsections 409 or 502(i) of ERISA; (iv) no Plan provides for an increase in
\nbenefits on or after the Closing Date; and (v) each Plan may be amended or
\nterminated without obligation or liability (other than those obligations and
\nliabilities for which specific assets have been set aside in a trust or other
\nfunding vehicle or reserved for on the Company’s June 30, 2000 balance sheet
\nincluded in the June 30 10Q).<\/p>\n
(d) No Plan is, or at any time was, subject to Title IV of
\nERISA, and neither the Company, nor any member of its “CONTROLLED GROUP”
\n(defined as any organization which is a member of a controlled group of
\norganizations within the meaning of sections 414(b), (c), (m) or (o) of the
\nCode), has any liability or will have any liability under Title IV of ERISA.
\nNeither the Company, nor any member of its Controlled Group, has any liability
\nor will have any liability in connection with any multiemployer plan (within the
\nmeaning of section 4001(a)(3) of ERISA).<\/p>\n
(e) Except as set forth on Section 2.10(e) of the Company
\nDisclosure Schedule, no Plan exists which could result in the payment to any
\nemployee of the Company or any of its subsidiaries of any money or other
\nproperty or rights or accelerate or provide any other rights or benefits to any
\nsuch employee as a result of the transactions contemplated by this Agreement.
\nNeither the Company nor any of its subsidiaries has made any payments, is
\nobligated to make any payments, or is a party to any agreement that under
\ncertain circumstances could obligate it to make any payments that will not be
\ndeductible under Sections 162(m) or 280G of the Code.<\/p>\n
SECTION 2.11. TAX MATTERS. (a) The Company and each of its
\nsubsidiaries have (i) filed all material Tax Returns (as hereinafter defined)
\nrequired to be filed by them (taking into account extensions) and all such Tax
\nReturns were true, correct and complete in all material respects, (ii) paid or
\nprovided adequate reserves for all material Taxes whether or not shown to be due
\non such Returns or which are otherwise due and payable and (iii) paid or
\nprovided adequate reserves for all material Taxes for which a notice of
\nassessment or collection has been received. Neither the Internal Revenue Service
\nnor any other taxing authority has<\/p>\n
13<\/p>\n
asserted in writing any claim for Taxes, or to the Company’s knowledge, is
\nthreatening to assert any claims for Taxes, against the Company or any of its
\nsubsidiaries. The Company and each of its subsidiaries have withheld or
\ncollected and paid over to the appropriate governmental, administrative or
\nregulatory bodies or authorities (or are properly holding for such payment) all
\nmaterial Taxes required by law to be withheld or collected. There are no
\noutstanding contracts, undertakings or agreements extending or waiving the
\nstatutory period of limitation applicable to any material Tax Return of the
\nCompany or any of its subsidiaries. Neither the Company nor any of its
\nsubsidiaries has made an election under Section 341(f) of the Code. There are no
\nLiens for Taxes upon the assets of the Company or any of its subsidiaries, other
\nthan Liens for Taxes that are not yet due, Liens that are being contested in
\ngood faith in accordance with applicable law and disclosed in Section 3.14(a) of
\nthe Company Disclosure Schedule (and for which adequate reserves have been
\nprovided) and Liens which would not, individually or in the aggregate, have a
\nMaterial Adverse Effect. Neither the Company nor any of its subsidiaries (i) has
\nbeen a member of an affiliated group filing a consolidated federal income Tax
\nReturn (other than a group the common parent of which was the Company), (ii) has
\nany liability for the Taxes of any Person, including under Treasury Regulation
\nSection 1.1502-6 or analogous state, local or foreign law for any Taxes, other
\nthan for Taxes of the Company or its subsidiaries or (iii) is a party to, is
\nbound by or has any obligation under a Tax sharing or Tax indemnity contract,
\nundertaking, or agreement or any other contract of a similar nature with any
\nentity other than the Company or any of its subsidiaries that remains in effect.
\nNo claim has been made in writing by a taxing authority in a jurisdiction where
\nthe Company or any of its subsidiaries does not file Tax Returns that the
\nCompany or any of its subsidiaries is or may be subject to taxation by that
\njurisdiction where such claim, if determined adversely to the Company or such
\nsubsidiary, would, individually or in the aggregate, have a Material Adverse
\nEffect. Neither the Company nor any of its subsidiaries is the subject of any
\ncurrently ongoing audit or examination with respect to Taxes, nor, to the
\nCompany’s knowledge, has any such audit been threatened or proposed by any
\ntaxing authority.<\/p>\n
(b) The Company does not know of any fact relating to the
\nCompany or its stockholders that could reasonably be expected to prevent the
\nMerger from qualifying as a reorganization within the meaning of Section 368(a)
\nof the Code.<\/p>\n
(c) For purposes of this Agreement: (i) “TAXES” shall mean any
\nand all federal, state, local, foreign or other taxes of any kind (together with
\nany and all interest, penalties, additions to tax and additional amounts imposed
\nwith respect thereto) imposed by any taxing authority, including but not limited
\nto taxes or other charges on or with respect to income, franchises, windfall or
\nother profits, gross receipts, property, sales, use, capital stock, payroll,
\nemployment, license, disability, severance, stamp, occupation, social security,
\nworkers’ compensation, unemployment compensation, or net worth, and taxes or
\nother charges in the nature of excise, withholding, ad valorem or value added,
\nand includes any liability for Taxes of another person, as a transferee or
\nsuccessor, under Treasury Regulation Section 1.1502-6 or analogous provision of
\nlaw or otherwise; and (ii) “TAX RETURN” shall mean any return, report or similar
\nstatement (including the attached schedules) required to be filed with any
\ngovernmental authority with respect to any Tax, including any information
\nreturn, claim for refund, amended return or declaration of estimated Tax.<\/p>\n
14<\/p>\n
SECTION 2.12. ENVIRONMENTAL MATTERS. (a) Except as could not,
\nindividually or in the aggregate, reasonably be expected to have a Material
\nAdverse Effect, (i) the operations of the Company and its subsidiaries has been
\nand is in compliance with all applicable Environmental Laws and with all
\nEnvironmental Permits and (ii) there are no pending or, to the knowledge of the
\nCompany, threatened actions, suits, claims, investigations or other proceedings
\n(collectively, “ACTIONS”) under or pursuant to Environmental Laws against the
\nCompany or any of its subsidiaries or involving any real property currently or
\nformerly owned, operated or leased by the Company.<\/p>\n
(b) For the purpose of this Agreement:<\/p>\n
“ENVIRONMENTAL LAWS” means any and all Orders, ordinances,
\nguidelines, codes, decrees, or other legally enforceable requirements
\n(including, without limitation, common law) of any international authority,
\nforeign government, the United States, or any state, local, municipal or other
\ngovernmental authority, regulating, relating to or imposing liability or
\nstandards of conduct concerning protection of the environment or of human
\nhealth, or employee health and safety, including without limitation the
\nComprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
\nss.ss. 9601 ET seq., the Hazardous Materials Transportation Act, 49 U.S.C.
\nss.ss. 1801 ET seq., the Resource Conservation and Recovery Act, 42 U.S.C.
\nss.sS. 6901 et seq., the Clean Water Act, 33 U.S.C. ss.ss. 1251 ET seq., the
\nClean Air Act, 42 U.S.C. ss.sS. 7401 et seq., the Toxic Substances Control Act,
\n15 U.S.C. SS.ss. 2601 et SEQ., the Federal Insecticide, Fungicide and
\nRodenticide Act, 7 U.S.C., ss.ss. 136 ET seq., Occupational Safety and Health
\nAct 29 U.S.C. ss.ss. 651 ET seq. and the Oil Pollution Act of 1990, 33 U.S.C.
\nss.sS. 2701 et seq., as such laws have been amended or supplemented, and the
\nregulations promulgated pursuant thereto, and all analogous state or local
\nstatutes.<\/p>\n
“ENVIRONMENTAL PERMITS” means any and all permits, consents,
\nlicenses, approvals, registrations, notifications, exemptions and any other
\nauthorization required under any applicable Environmental Law.<\/p>\n
SECTION 2.13. FORM S-4; PROXY STATEMENT. None of the information supplied by the
\nCompany for inclusion or incorporation by reference in (i) the registration
\nstatement on Form S-4 to be filed with the SEC by Parent in connection with the
\nissuance of shares of Parent Common Stock in connection with the Merger, or any
\nof the amendments or supplements thereto (collectively, the “FORM S-4”), will,
\nat the time the Form S-4 is filed with the SEC, at any time it is amended or
\nsupplemented and at the time it becomes effective under the Securities Act,
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary to make the statements therein
\nnot misleading, and (ii) the proxy statement for use relating to the adoption by
\nthe stockholders of the Company of this Agreement and the proxy or information
\nstatement to be sent to the stockholders of Parent in connection with the
\nMerger, or any of the amendments or supplements thereto (collectively, the
\n“PROXY STATEMENT”), will, at the date it is first mailed to the Company’s
\nstockholders and Parent’s stockholders and at the time of the meeting of the
\nCompany’s stockholders held to vote on the adoption of this Agreement, contain
\nany untrue statement of a material fact or omit to state any material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not
\nmisleading. The Proxy Statement will comply as to form in all material respects
\nwith the requirements of the Exchange Act and the <\/p>\n
15<\/p>\n
rules and regulations thereunder. No representation is made by the Company in
\nthis Section 2.13 with respect to statements made or incorporated by reference
\ntherein or in the Form S-4 based on information supplied by Parent or Sub
\nspecifically for inclusion or incorporation by reference in the Proxy Statement
\nor in the Form S-4.<\/p>\n
SECTION 2.14. OPINION OF FINANCIAL ADVISOR. The Company has received the written
\nopinion of Donaldson, Lufkin & Jenrette Securities Corporation (the “COMPANY
\nFINANCIAL ADVISOR”), dated the date hereof, to the effect that the consideration
\nto be received in the Merger by the Company’s stockholders is fair to such
\nstockholders from a financial point of view. An executed copy of such opinion
\nhas been delivered to Parent. The Company has been authorized by the Company
\nFinancial Advisor to permit, subject to prior review and consent by such Company
\nFinancial Advisor (such consent not to be unreasonably withheld), the inclusion
\nof such fairness opinion in the Form S-4 and the Proxy Statement.<\/p>\n
SECTION 2.15. BROKERS. No broker, finder or investment banker
\n(other than the Company Financial Advisor) is entitled to any brokerage,
\nfinder’s or other fee or commission in connection with the transactions
\ncontemplated by this Agreement based upon arrangements made by or on behalf of
\nthe Company. The Company has heretofore furnished to Parent a complete and
\ncorrect copy of all agreements between the Company and the Company Financial
\nAdvisor pursuant to which such firm would be entitled to any payment relating to
\nthe transactions contemplated hereby.<\/p>\n
SECTION 2.16. AFFILIATE TRANSACTIONS. Except as set forth in
\nSection 2.16 of the Company Disclosure Schedule or as disclosed in the Company
\nSEC Reports filed and publicly available prior to the date of this Agreement,
\nthere are no material contracts, commitments, agreements, arrangements or other
\ntransactions between the Company or any of its subsidiaries, on the one hand,
\nand any (i) officer or director of the Company or any of its subsidiaries, (ii)
\nrecord or beneficial owner of five percent or more of the voting securities of
\nthe Company or (iii) affiliate (as such term is defined in Regulation 12b-2
\npromulgated under the Exchange Act) of any such officer, director or beneficial
\nowner, on the other hand.<\/p>\n
SECTION 2.17. VOTE REQUIRED. The affirmative vote of the
\nholders of a majority of the outstanding shares of Company Common Stock entitled
\nto vote thereon is the only vote of the holders of any class or series of the
\nCompany’s capital stock necessary to adopt this Agreement. The Board of
\nDirectors of the Company (the “COMPANY BOARD”) (at a meeting duly called and
\nheld) has (i) approved and declared advisable this Agreement, (ii) determined
\nthat the transactions contemplated hereby are advisable, fair to and in the best
\ninterests of the holders of Company Common Stock, (iii) resolved to recommend
\nadoption of this Agreement, the Merger and the other transactions contemplated
\nhereby to such holders and (iv) directed that adoption of this Agreement be
\nsubmitted to the Company’s stockholders. Subject to the provisions of Section
\n5.4, the Company hereby agrees to the inclusion in the Form S-4 and the Proxy
\nStatement of the recommendations of the Company Board described in this Section
\n2.17.<\/p>\n
SECTION 2.18. DGCL SECTION 203; STATE TAKEOVER STATUTES. Prior
\nto the date hereof, the Board of Directors of the Company has approved this
\nAgreement and the Merger and the other transactions contemplated hereby and such
\napproval is sufficient to render the restrictions on “business combinations” set
\nforth in Section 203 of the DGCL inapplicable to this <\/p>\n
16<\/p>\n
Agreement, the Merger and any of such other transactions contemplated hereby. No
\nother state takeover statute or similar statute or regulation applies or
\npurports to apply to the Merger, this Agreement or any of the transactions
\ncontemplated by this Agreement, and no provision of the Certificate of
\nIncorporation or By-Laws of the Company or similar governing instruments of any
\nof the Company’s subsidiaries would, directly or indirectly, restrict or impair
\nthe ability of Parent to vote, or otherwise to exercise the rights of a
\nstockholder with respect to, shares of the Company and its subsidiaries that may
\nbe acquired or controlled by Parent.<\/p>\n
SECTION 2.19. MATERIAL CONTRACTS. (a) Section 2.19 of the
\nCompany Disclosure Schedule contains a complete list of all material contracts
\n(written or oral), plans, undertakings, commitments or agreements to which the
\nCompany or any of its subsidiaries is a party or by which any of them is bound
\nas of the date of this Agreement.<\/p>\n
(b) Section 2.19 of the Company Disclosure Schedule contains a
\ncomplete and accurate list of the following:<\/p>\n
(i) promissory notes, loans, agreements, indentures,
\n evidences of indebtedness or other instruments providing for
\n the lending of money, whether as borrower, lender or guarantor
\n (excluding trade payables or receivables arising in the
\n ordinary course of business);<\/p>\n
(ii) contracts or agreements containing covenants
\n limiting the freedom of the Company or any of its subsidiaries
\n or affiliates to engage in any line of business or compete
\n with any person or operate at any location;<\/p>\n
(iii) change in control or similar arrangements with
\n any officers, employees or agents of the Company that will
\n result in any obligation (absolute or contingent) of the
\n Company or any of its subsidiaries to make any payment to any
\n officers, employees or agents of the Company following either
\n the consummation of the transactions contemplated hereby,
\n termination of employment, or both (other than as set forth in
\n Section 2.10(e) of the Company Disclosure Schedule);<\/p>\n
(iv) labor contracts;<\/p>\n
(v) license, consent, royalty and other agreements
\n concerning Intellectual Property (as defined below) (other
\n than agreements with guides and other providers of content
\n entered into in the ordinary course of business);<\/p>\n
(vi) distribution and syndication partnerships or
\n arrangements;<\/p>\n
(vii) joint venture or partnership agreements or joint
\n development or similar agreements pursuant to which any third
\n party is entitled to develop any products on behalf of the
\n Company or its subsidiaries (other than agreements with guides
\n and other providers of content entered into in the ordinary
\n course of business);<\/p>\n
17<\/p>\n
(viii) any contract or agreement for the acquisition,
\n directly or indirectly (by merger or otherwise), of material
\n assets (other than inventory) or capital stock of another
\n person; and<\/p>\n
(ix) contracts or agreements involving the issuance or
\n repurchase of any capital stock of the Company or any of its
\n subsidiaries (other than the Stock Plans and the ESPP and the
\n Company’s repurchase rights with respect to Company Common
\n Stock issued in connection with any of the foregoing).<\/p>\n
(c) For the purpose of this Agreement, the term “CONTRACTS”
\nshall mean all of the contracts (written or oral), plans, undertakings,
\ncommitments and agreements are, or are required to be, contained in Section 2.19
\nof the Company Disclosure Schedule. True and complete copies of the written
\nContracts identified on Section 2.19 of the Company Disclosure Schedule have
\nbeen delivered or made available to Parent.<\/p>\n
SECTION 2.20. ABSENCE OF BREACHES OR DEFAULTS. Except as set
\nforth in Section 2.20 of the Company Disclosure Schedule, neither the Company
\nnor any of its subsidiaries is and, to the knowledge of the Company, no other
\nparty is in default under, or in breach or violation of, any Contract, Guide
\nAgreement (as defined below) or other content agreement and, to the knowledge of
\nthe Company, no event has occurred which, with the giving of notice or passage
\nof time or both would constitute a default under any Contract or Guide Agreement
\nexcept for defaults, breaches, violations or events which could not,
\nindividually or in the aggregate, reasonably be expected to have a Material
\nAdverse Effect. Other than Contracts and Guide Agreements which have terminated
\nor expired in accordance with their terms, and except as set forth in Section
\n2.20 of the Company Disclosure Schedule, each of the Contracts and Guide
\nAgreements is in full force and effect, and assuming all consents required by
\nthe terms thereof or applicable law have been obtained, such Contracts and Guide
\nAgreements will continue to be in full force and effect immediately following
\nthe consummation of the transactions contemplated hereby, in each case except
\nwhere the failure to be in full force and effect could not, individually or in
\nthe aggregate, reasonably be expected to have a Material Adverse Effect. No
\nevent has occurred which either entitles, or would, on notice or lapse of time
\nor both, entitle the holder of any indebtedness for borrowed money affecting the
\nCompany or any of its subsidiaries (except for the execution of this Agreement)
\nto accelerate, or which does accelerate, the maturity of any indebtedness
\naffecting the Company or any of its subsidiaries, except as set forth in Section
\n2.20 of the Company Disclosure Schedule.<\/p>\n
SECTION 2.21. INTELLECTUAL PROPERTY. Each patent, patent
\napplication, registered trademark, material unregistered trademark, trademark
\napplication, registered service mark, material unregistered service mark,
\nservice mark application, registered trade name, material unregistered trade
\nname, material domain name, copyright registration and copyright application
\nowned by the Company is set forth on Section 2.21 of the Company Disclosure
\nSchedule. Except as set forth on Section 2.21 of the Company Disclosure
\nSchedule:<\/p>\n
(a) The Company (i) owns all right, title and interest in and
\nto, free and clear of any Lien, or (ii) has a valid license to use, all the
\nIntellectual Property necessary to carry out the Company’s current activities.
\nThe Company is not in breach of any such licenses except for breaches which
\ncould not, individually or in the aggregate, reasonably be expected to have a<\/p>\n
18<\/p>\n
Material Adverse Effect. To the Company’s knowledge, all registered patents,
\ntrademarks, service marks and copyrights listed on Section 2.21 of the Company
\nDisclosure Schedule are valid and subsisting and in full force and effect, and
\nall applications are currently pending;<\/p>\n
(b) The Company Intellectual Property is all the Intellectual
\nProperty that is necessary for the ownership, maintenance and operation of the
\nCompany’s business as currently conducted, and the consummation of the
\ntransactions contemplated hereby will not alter or impair any such rights;<\/p>\n
(c) The Company has not, and the continued operation of the
\nCompany’s business as presently conducted and as presently proposed to be
\nconducted will not, to the Company’s knowledge, interfere with, infringe upon or
\nmisappropriate (“INFRINGE”) any Intellectual Property rights of third parties.
\nTo the best knowledge of the Company, there are no material pending charges,
\ncomplaints, claims, demands or notices alleging that the Company’s use of its
\nmaterial Intellectual property Infringes upon the Intellectual Property rights
\nof any third party;<\/p>\n
(d) To the Company’s knowledge, no third party has Infringed
\nupon any material Company Intellectual Property;<\/p>\n
(e) No Action or Order has been made, is pending, or, to the
\nknowledge of the Company, is threatened which challenges the legality, validity,
\nenforceability, use or ownership of any Company Intellectual Property that,
\nindividually or in the aggregate, could be expected to have a Material Adverse
\nEffect; and<\/p>\n
(f) The Company takes reasonable steps necessary to maintain
\nand protect its Intellectual Property and has executed non-disclosure agreements
\nand Intellectual Property assignments with all employees and independent
\ncontractors who contribute to or create Intellectual Property, alone or with
\nothers, that is owned or used by the Company.<\/p>\n
(g) As used in this Agreement, “INTELLECTUAL PROPERTY” means
\n(i) all inventions (whether patentable or unpatentable and whether or not
\nreduced to practice), all improvements thereon, and all patents, patent
\napplications and patent disclosures, together with all reissuances,
\ncontinuations, continuations-in-part, revisions, extensions and reexaminations
\nthereof, (ii) all trademarks, service marks, trade dress, logos, trade names,
\ndomain names, and corporate names, together with all translations, adaptations,
\nderivations and combinations thereof and including all goodwill associated
\ntherewith, and all applications, registrations and renewals in connection
\ntherewith, (iii) all copyrightable works, all copyrights and all applications,
\nregistrations and renewals in connection therewith, (iv) all trade secrets and
\nconfidential business information (including ideas, know-how, customer and
\nsupplier lists, pricing and cost information and business and marketing plans
\nand proposals), (v) all computer software (including data and related
\ndocumentation), (vi) all other proprietary rights, (vii) all copies and tangible
\nembodiments of the foregoing categories of intellectual property listed in
\nsubsections (i) through (vi) herein (in whatever form or medium), and (viii) all
\nrights under licenses, sublicenses, agreements, or permissions related to the
\nforegoing categories of intellectual property listed in subsections (i) through
\n(vii) herein. As used in this Agreement, “COMPANY INTELLECTUAL PROPERTY” means
\nall Intellectual Property currently owned or used by Company.<\/p>\n
19<\/p>\n
(h) The Company utilizes industry standard measures and
\npractices to protect (i) the security and integrity of its networks, software,
\nWeb sites and related systems from unauthorized use or access and (ii) the
\nprivacy of all information stored thereon.<\/p>\n
SECTION 2.22. INSURANCE. The Company has provided or made
\navailable to the Parent true, correct and complete copies of all policies of
\ninsurance to which the Company or any of its subsidiaries is a party or is a
\nbeneficiary or named insured. The Company and its subsidiaries maintain
\ninsurance coverage with reputable insurers in such amounts and covering such
\nrisks as are in accordance with normal industry practice for companies engaged
\nin businesses similar to that of the Company (taking into account the cost and
\navailability of such insurance).<\/p>\n
SECTION 2.23. LABOR MATTERS. The Company and each of its
\nsubsidiaries is in compliance with all applicable laws (domestic and foreign),
\nagreements, contracts, and policies relating to employment, employment
\npractices, wages, hours, and terms and conditions of employment except for
\nfailures so to comply, if any, that could not, individually or in the aggregate,
\nreasonably be expected to have a Material Adverse Effect. The Company has
\ncomplied in all material respects with its payment obligations to all employees
\nof the Company and its subsidiaries in respect of all wages, salaries,
\ncommissions, bonuses, benefits and other compensation due and payable to such
\nemployees under any Company policy, practice, agreement, plan, program or any
\nstatute or other law. Except as set forth in Section 2.23 of the Company
\nDisclosure Schedule, the Company is not liable for any severance pay or other
\npayments to any employee or former employee arising from the termination of
\nemployment under any benefit or severance policy, practice, agreement, plan, or
\nprogram of the Company, nor will the Company have any liability that exists or
\narises, or may be deemed to exist or arise, under any applicable law or
\notherwise, as a result of or in connection with the transactions contemplated
\nhereunder or as a result of the termination by the Company of any persons
\nemployed by the Company or any of its subsidiaries on or prior to the Effective
\nTime of the Merger except as required by Code Section 4980B. The Company is in
\ncompliance with its obligations pursuant to the Worker Adjustment and Retraining
\nNotification Act of 1988 and part 6 and 7 of Title I of ERISA, to the extent
\napplicable, and all other employee notification and bargaining obligations
\narising under any collective bargaining agreement or statute. To the knowledge
\nof the Company, the employment of any employee or independent contractor by the
\nCompany does not violate any legal or contractual rights of any third party,
\nincluding any rights with respect to Intellectual Property.<\/p>\n
SECTION 2.24. REORGANIZATION QUALIFICATION. Neither the
\nCompany nor, to its knowledge, any of its affiliates has taken or agreed to take
\nany action, or knows of any circumstances, that (without regard to any action
\ntaken or agreed to be taken by Parent or any of its affiliates) would prevent
\nthe Merger from qualifying as a reorganization within the meaning of Sections
\n368(a)(1)(A) and 368(a)(2)(E) of the Code.<\/p>\n
SECTION 2.25. GUIDES. The Company has made available to Parent
\nforms of its guide agreements (the “FORM GUIDE AGREEMENTS”) and each guide has
\nexecuted and delivered to the Company a guide agreement in one of such forms
\nwithout material modification (each, a “GUIDE AGREEMENT”).<\/p>\n
20<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF
\n PARENT AND SUB<\/p>\n
Parent and Sub hereby, jointly and severally, represent and
\nwarrant to the Company that, except as set forth in the corresponding sections
\nor subsections of the Disclosure Schedule delivered by Parent and Sub to the
\nCompany prior to the execution of this Agreement (the “PARENT DISCLOSURE
\nSchedule”), or in any other section or subsection of the Parent Disclosure
\nSchedule if it is reasonably apparent that such disclosure applies:<\/p>\n
SECTION 3.1. CORPORATE ORGANIZATION. (a) Each of Parent and
\nSub is a corporation duly organized, validly existing and in good standing under
\nthe laws of the jurisdiction in which it is incorporated and has the requisite
\ncorporate power and authority and any necessary governmental authority to own,
\noperate or lease its properties and to carry on its business as it is now being
\nconducted, except where the failure to have such power, authority and
\ngovernmental approvals could not, individually or in the aggregate, reasonably
\nbe expected to have a Parent Material Adverse Effect (as defined below). Each of
\nParent and Sub is duly qualified or licensed as a foreign corporation to do
\nbusiness, and is in good standing, in each jurisdiction where the character of
\nits properties owned, leased or operated by it or the nature of its activities
\nmakes such qualification or licensing necessary, except for such failures to be
\nso duly qualified or licensed or in good standing which could not, individually
\nor in the aggregate, reasonably be expected to have a Parent Material Adverse
\nEffect. When used in this Article III or otherwise in connection with Parent or
\nany of its subsidiaries (including Sub), the term “PARENT MATERIAL ADVERSE
\nEFFECT” means any change or effect that would be materially adverse to the
\nbusiness, properties, assets, condition (financial or otherwise) or results of
\noperations of Parent and its subsidiaries taken as a whole or that would
\nmaterially impair the ability of Parent to perform its obligations hereunder;
\nPROVIDED that none of the following shall be taken into account in determining
\nwhether there has been or could be a Parent Material Adverse Effect: (w) any
\nemployee attrition after the date hereof, (x) any change arising from the public
\nannouncement of the Merger and the other transactions contemplated by this
\nAgreement; (y) any change in the market price or trading volume of the Parent
\nCommon Stock after the date hereof; or (z) any adverse effect on Parent
\nattributable solely to conditions affecting the publishing business, the United
\nStates economy as a whole or foreign economies in any locations where Parent or
\nany of its subsidiaries has material operations or sales (and not having a
\nmaterially disproportionate effect on Parent).<\/p>\n
(b) Parent has heretofore furnished to or made available to
\nthe Company a complete and correct copy of its certificate of incorporation and
\nby-laws as currently in effect. Such certificate of incorporation and by-laws
\nare in full force and effect and no other organizational documents are
\napplicable to or binding upon Parent.<\/p>\n
(c) Sub has heretofore furnished to or made available to the
\nCompany a complete and correct copy of the certificate of incorporation of Sub
\nand the by-laws of Sub as currently in effect. Such certificate of incorporation
\nand bylaws are in full force and effect and no other organizational documents
\nare applicable to or binding upon Sub.<\/p>\n
21<\/p>\n
SECTION 3.2. CAPITALIZATION. (a) The authorized capital stock
\nof Parent consists of 255,750,000 shares, consisting of 250,000,000 shares of
\nParent Common Stock and 5,750,000 shares of preferred stock, par value $.01 per
\nshare. As of September 30, 2000, (i) 166,765,849 shares of Parent Common Stock
\nwere issued and outstanding, all of which were duly authorized, validly issued,
\nfully paid and nonassessable and were issued free of preemptive (or similar)
\nrights, (ii) 123,848 shares of Parent Common Stock were held in the treasury of
\nParent, (iii) an aggregate of 13,620,464 shares of Parent Common Stock were
\nreserved for issuance and issuable upon or otherwise deliverable in connection
\nwith the exercise of outstanding stock options to purchase shares of Parent
\nCommon Stock (“PARENT OPTIONS”) identified on Section 3.2(a) of the Parent
\nDisclosure Schedule and issued pursuant to the employee benefit plans of Parent,
\n(iv) 2,000,000 shares of $10.00 Series D Exchangeable Preferred Stock of Parent
\nwere issued and outstanding, (v) 1,250,000 shares of $9.20 Series F Exchangeable
\nPreferred Stock of Parent were issued and outstanding and (vi) 2,500,000 shares
\nof $8.625 Series H Exchangeable Preferred Stock of Parent were issued and
\noutstanding. Except (i) as set forth above or (ii) as a result of the exercise
\nof the Parent Options outstanding as of the date hereof and identified on
\nSection 3.2(a) of the Parent Disclosure Schedule, as of the date hereof there
\nare outstanding (a) no shares of capital stock or other voting securities
\n(including indebtedness having the right to vote) of Parent, (b) no securities
\nof Parent convertible into or exchangeable for shares of capital stock or voting
\nsecurities (including indebtedness having the right to vote) of Parent, (c) no
\noptions, warrants, or other rights to acquire from Parent, and no obligation of
\nParent to issue, any capital stock, voting securities (including indebtedness
\nhaving the right to vote) or securities convertible into or exchangeable for
\ncapital stock or voting securities (including indebtedness having the right to
\nvote) of Parent and (d) no equity equivalents, interests in the ownership or
\nearnings of Parent or other similar rights (collectively, “PARENT SECURITIES”).
\nExcept as set forth in Section 3.2(a) of the Parent Disclosure Schedule, as of
\nthe date hereof, there are no outstanding obligations of Parent or any of its
\nsubsidiaries to repurchase, redeem or otherwise acquire any Parent Securities
\nexcept pursuant to existing arrangements with employees. As of the date hereof,
\nthere are no other options, calls, warrants or other rights, agreements,
\narrangements or commitments of any character relating to the issued or unissued
\ncapital stock of Parent or any of its subsidiaries to which Parent or any of its
\nsubsidiaries is a party.<\/p>\n
(b) The authorized capital stock of Sub consists of 100 shares
\nof common stock, par value $0.01 per share, 100 shares of which are duly
\nauthorized, validly issued and outstanding, fully paid and nonassessable and
\nowned by Parent free and clear of all Liens. Sub was formed solely for the
\npurpose of engaging in a business combination transaction with the Company and
\nhas engaged in no other business activities and has conducted its operations
\nonly as contemplated hereby.<\/p>\n
SECTION 3.3. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of
\nParent and Sub has all necessary corporate power and authority to execute and
\ndeliver this Agreement, to perform their respective obligations hereunder and to
\nconsummate the transactions contemplated hereby. The execution, delivery and
\nperformance of this Agreement by each of Parent and Sub and the consummation by
\neach of Parent and Sub of the transactions contemplated hereby have been duly
\nand validly authorized by all necessary corporate action on the part of Parent
\nand Sub and no other corporate proceedings on the part of Parent or Sub are
\nnecessary to authorize this Agreement or to consummate the transactions so
\ncontemplated (other than (i) the effectiveness of <\/p>\n
22<\/p>\n
a registration statement on Form S-4 relating to the Parent Common Stock to be
\nissued in the Merger, (ii) stockholder approval of the issuance of Parent Common
\nStock in the Merger, and (iii) the filing of appropriate merger documents as
\nrequired by the DGCL). This Agreement has been duly and validly executed and
\ndelivered by Parent and Sub and, assuming due authorization, execution and
\ndelivery hereof by the Company, constitutes a legal, valid and binding
\nobligation of each such corporation enforceable against such corporation in
\naccordance with its terms (except insofar as enforceability may be limited by
\napplicable bankruptcy, insolvency, reorganization, moratorium or similar laws
\naffecting creditors’ rights generally or by principles governing the
\navailability of equitable remedies).<\/p>\n
SECTION 3.4. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a)
\nThe execution, delivery and performance of this Agreement by Parent and Sub do
\nnot and will not: (i) conflict with or violate the respective certificates of
\nincorporation or by-laws of Parent or Sub; (ii) assuming that all consents,
\napprovals and authorizations contemplated by clauses (i), (ii) and (iii) of
\nsubsection (b) below have been obtained and all filings described in such
\nclauses have been made, conflict with or violate any Order applicable to Parent
\nor Sub or by which either of them or any of their respective properties are
\nbound or affected; or (iii) result in any breach or violation of or constitute a
\ndefault (or an event which with notice or lapse of time or both could become a
\ndefault) or result in the loss of a material benefit under, or give rise to any
\nright of termination, amendment, acceleration or cancellation of, or result in
\nthe creation of a Lien on any of the property or assets of Parent or Sub
\npursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
\nlicense, permit, franchise or other instrument or obligation to which Parent or
\nSub is a party or by which Parent or Sub or any of their respective properties
\nare bound or affected, except, in the case of clauses (ii) and (iii), for any
\nsuch conflicts, violations, breaches, defaults or other occurrences which could
\nnot, individually or in the aggregate, reasonably be expected to prevent the
\nconsummation of the Merger or to have a Parent Material Adverse Effect. All of
\nthe conflicts, violations, breaches, defaults and other occurrences referred to
\nin the immediately preceding sentence are identified in Section 3.4(a) of the
\nParent Disclosure Schedule.<\/p>\n
(b) The execution, delivery and performance of this Agreement
\nby Parent and Sub do not and will not require any consent, approval,
\nauthorization or permit of, action by, filing with or notification to, any
\ngovernmental or regulatory authority, domestic or foreign, except (i) for
\napplicable requirements of the Securities Act and the rules and regulations
\npromulgated thereunder, the Exchange Act and the rules and regulations
\npromulgated thereunder, the HSR Act, the rules and regulations of Nasdaq, the
\nNYSE and state securities, takeover and Blue Sky laws, (ii) the filing and
\nrecordation of appropriate merger or other documents as required by the DGCL,
\nand (iii) such consents, approvals, authorizations, permits, actions, filings or
\nnotifications the failure of which to make or obtain could not, individually or
\nin the aggregate, be expected to (x) prevent the consummation of the Merger or
\n(y) have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.5. COMPLIANCE. Parent is in compliance with, and is
\nnot in default or violation of, its certificate of incorporation and by-laws.
\nParent and each of its subsidiaries are in compliance with, and are not in
\ndefault or violation of (i) all laws (including, without limitation,
\nEnvironmental Laws) and Orders applicable to them or by which any of their
\nrespective properties are bound or affected and (ii) all notes, bonds,
\nmortgages, indentures, <\/p>\n
23<\/p>\n
contracts, agreements, leases, licenses, permits, franchises and other
\ninstruments or obligations to which any of them are a party or by which any of
\nthem or any of their respective properties are bound or affected, except, in the
\ncase of clauses (i) and (ii), for any such failures of compliance, defaults and
\nviolations which could not, individually or in the aggregate, reasonably be
\nexpected to have a Parent Material Adverse Effect. Except as disclosed prior to
\nthe date hereof in the Parent SEC Reports (as defined in Section 3.6), neither
\nParent nor any of its subsidiaries has received notice of any revocation or
\nmodification of any federal, state, local or foreign governmental license,
\ncertification, tariff, permit, authorization or approval material to Parent and
\nits subsidiaries taken as a whole. Parent and its subsidiaries have all permits,
\nlicenses, authorizations, consents, approvals and franchises from governmental
\nagencies required to conduct their businesses as now being conducted, except for
\nsuch permits, licenses, authorizations, consents, approvals, and franchises the
\nabsence of which could not, individually or in the aggregate, reasonably be
\nexpected have a Parent Material Adverse Effect.<\/p>\n
SECTION 3.6. SEC FILINGS; FINANCIAL STATEMENTS. (a) Parent
\nand, to the extent applicable, each of its then or current subsidiaries, has
\nfiled all forms, reports, statements and documents required to be filed with the
\nSEC since January 1, 1999 (collectively, the “PARENT SEC REPORTS”), each of
\nwhich has complied in all material respects with the applicable requirements of
\nthe Securities Act and the rules and regulations promulgated thereunder, or the
\nExchange Act and the rules and regulations promulgated thereunder, each as in
\neffect on the date so filed. None of such Parent SEC Reports (including but not
\nlimited to any financial statements or schedules included or incorporated by
\nreference therein) contained, when filed, any untrue statement of a material
\nfact or omitted to state a material fact required to be stated or incorporated
\nby reference therein or necessary in order to make the statements therein, in
\nthe light of the circumstances under which they were made, not misleading.
\nExcept to the extent revised or superseded by a subsequent filing with the SEC
\nprior to the date hereof, none of the Parent SEC Reports filed by Parent since
\nJanuary 1, 1999 and prior to the date hereof contains any untrue statement of a
\nmaterial fact or omits to state a material fact required to be stated or
\nincorporated by reference therein or necessary in order to make the statements
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading.<\/p>\n
(b) Each of the audited and unaudited consolidated financial
\nstatements of Parent and its subsidiaries (including any related notes thereto)
\nincluded in Parent SEC Reports complies or, if not yet filed, will comply as to
\nform in all material respects with all applicable accounting requirements and
\nwith the published rules and regulations of the SEC with respect thereto, has
\nbeen or, if not yet filed, will have been prepared in accordance with generally
\naccepted accounting principles (except, in the case of unaudited consolidated
\nquarterly statements, as permitted by Form 10-Q of the SEC) applied on a
\nconsistent basis throughout the periods involved (except as may be indicated in
\nthe notes thereto) and fairly presents in all material respects or, if not yet
\nfiled, will fairly present in all material respects the consolidated financial
\nposition of Parent and its subsidiaries at the respective date thereof and the
\nconsolidated results of its operations and changes in cash flows for the periods
\nindicated (subject, in the case of unaudited quarterly statements, to normal
\nyear-end audit adjustments).<\/p>\n
SECTION 3.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
\nDecember 31, 1999, except as specifically disclosed in the Parent SEC Reports
\nfiled and publicly available prior to the date of this Agreement or disclosed in
\nSection 3.7 of the Parent Disclosure Schedule, <\/p>\n
24<\/p>\n
Parent and its subsidiaries have conducted their businesses only in the ordinary
\ncourse and in a manner consistent with past practice and since such date there
\nhas not been (i) any change in the financial condition, results of operations,
\nassets, business or operations of Parent or any of its subsidiaries having or
\nwhich could be reasonably likely to have a Parent Material Adverse Effect or
\n(ii) any condition, event or occurrence which, individually or in the aggregate,
\nhaving or which could reasonably be expected to have a Parent Material Adverse
\nEffect.<\/p>\n
SECTION 3.8. FORM S-4; PROXY STATEMENT. None of the
\ninformation supplied by Parent or Sub for inclusion or incorporation by
\nreference in (i) the Form S-4 will, at the time the Form S-4 is filed with
\nthe SEC, at any time it is amended or supplemented and at the time it becomes
\neffective under the Securities Act, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated
\ntherein or necessary to make the statements therein not misleading, and (ii)
\nthe Proxy Statement will, at the date it is first mailed to the Company’s
\nstockholders and Parent’s stockholders and at the time of the meeting of the
\nCompany’s stockholders held to vote on adoption of this Agreement, contain
\nany untrue statement of a material fact or omit to state any material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not
\nmisleading. The Form S-4 will comply as to form in all material respects with
\nthe requirements of the Securities Act and the rules and regulations
\nthereunder, except that no representation is made by Parent or Sub with
\nrespect to statements made or incorporated by reference therein based on
\ninformation supplied by the Company specifically for inclusion or
\nincorporation by reference in the Form S-4.<\/p>\n
SECTION 3.9. ABSENCE OF LITIGATION. Except as specifically
\ndisclosed in the Parent SEC Reports filed and publicly available prior to the
\ndate of this Agreement or in Section 3.9 of the Parent Disclosure Schedule,
\nthere are no Actions pending or, to the best knowledge of Parent, threatened
\nagainst Parent or any of its subsidiaries, or any properties or rights of Parent
\nor any of its subsidiaries, before any court, arbitrator or administrative,
\ngovernmental or regulatory authority or body, domestic or foreign, that could,
\nindividually or in the aggregate, reasonably be expected to have a Parent
\nMaterial Adverse Effect. To Parent’s knowledge, neither Parent nor any of its
\nsubsidiaries nor any of their respective properties is or are subject to any
\nOrder having, or which, insofar as can be reasonably foreseen, in the future
\ncould, individually or in the aggregate, reasonably be expected to have a Parent
\nMaterial Adverse Effect or to prevent or delay the consummation of the
\ntransactions contemplated hereby.<\/p>\n
SECTION 3.10. OPINION OF FINANCIAL ADVISOR. Parent has
\nreceived the opinion of Wit Capital, dated the date of this Agreement, to the
\neffect that the consideration to be paid by Parent in connection with the Merger
\nis fair to Parent and the holders of the Parent Common Stock from a financial
\npoint of view, a signed copy of which has been delivered to the Company.<\/p>\n
SECTION 3.11. BROKERS. No broker, finder or investment banker
\n(other than Wit Capital, Merrill Lynch & Co. and the others identified on
\nSection 3.11 of the Parent Disclosure Schedule, the fees and expenses of which
\nshall be paid by Parent) is entitled to any brokerage, finder’s or other fee or
\ncommission in connection with the transactions contemplated by this Agreement
\nbased upon arrangements made by or on behalf of Parent or Sub.<\/p>\n
25<\/p>\n
SECTION 3.12. AFFILIATE TRANSACTIONS. Except as set forth in
\nSection 3.12 of the Parent Disclosure Schedule or as disclosed in the Parent SEC
\nReports filed and publicly available prior to the date of this Agreement, as of
\nthe date hereof there are no material contracts, commitments, agreements,
\narrangements or other transactions between Parent or any of its subsidiaries, on
\nthe one hand, and any (i) officer or director of Parent or (ii) record or
\nbeneficial owner of five percent or more of the voting securities of Parent, on
\nthe other hand.<\/p>\n
SECTION 3.13. REORGANIZATION QUALIFICATION. Neither Parent nor
\nSub, nor to Parent’s knowledge, any affiliate of Parent, has taken or agreed to
\ntake any action, or knows of any circumstances, that (without regard to any
\naction taken or agreed to be taken by the Company or any of its affiliates)
\nwould prevent the Merger from qualifying as a reorganization within the meaning
\nof Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.<\/p>\n
SECTION 3.14. STOCKHOLDERS’ CONSENT AND APPROVAL OBTAINED.
\nStockholders of Parent holding not less than 70% of the outstanding shares of
\nParent Common Stock have executed voting agreements agreeing to consent to and
\napprove the issuance of Parent Common Stock in the Merger. Such consent and
\napproval are the only consent and approval of the holders of any class or series
\nof Parent’s capital stock necessary to adopt and approve of the terms of this
\nAgreement, the Merger and the transactions contemplated herein.<\/p>\n
SECTION 3.15. EMPLOYEE BENEFIT PLANS. Except as could not,
\nindividually or in the aggregate, reasonably be expected to have a Parent
\nMaterial Adverse Effect, each “employee benefit plan” (within the meaning of
\nsection 3(3) of ERISA) under which any employee or former employee of Parent has
\nany present or future right to benefits or under which Parent has any present or
\nfuture liability has been established and administered in accordance with its
\nterms, and in compliance with the applicable provisions of ERISA, the Code and
\nother applicable laws, rules and regulations.<\/p>\n
SECTION 3.16. TAX MATTERS. Parent has (i) filed all material
\nTax Returns required to be filed by it (taking into account extensions) and all
\nsuch Tax Returns were true, correct and complete in all material respects, (ii)
\npaid or provided adequate reserves for all material Taxes whether or not shown
\nto be due on such Returns or which are otherwise due and payable and (iii) paid
\nor provided adequate reserves for all material Taxes for which a notice of
\nassessment or collection has been received, except, in the case of clause (i),
\n(ii) or (iii), for any such filings, payments or accruals which would not,
\nindividually or in the aggregate, have a Parent Material Adverse Effect.<\/p>\n
ARTICLE IV<\/p>\n
CONDUCT OF BUSINESS PENDING THE MERGER<\/p>\n
SECTION 4.1. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE
\nMERGER. The Company covenants and agrees that, during the period from the date
\nhereof to the Effective Time, unless Parent shall otherwise consent in writing
\nin advance, the businesses of the Company and its subsidiaries shall be
\nconducted only in, and the Company and its subsidiaries shall not take any
\naction except in, the ordinary course of business and in a manner consistent
\nwith past practice and in compliance with applicable laws; and the Company and
\nits subsidiaries<\/p>\n
26<\/p>\n
shall each use its commercially reasonable efforts to preserve substantially
\nintact the business organization of the Company and its subsidiaries, to keep
\navailable the services of the present officers, employees and consultants of the
\nCompany and its subsidiaries and to preserve the present relationships of the
\nCompany and its subsidiaries with customers, suppliers, licensors, licensees,
\nadvertisers, distributors and other persons with which the Company or any of its
\nsubsidiaries has significant business relations. By way of amplification and not
\nlimitation, neither the Company nor any of its subsidiaries shall, between the
\ndate of this Agreement and the Effective Time, directly or indirectly do, or
\npropose or commit to do, any of the following without the prior written consent
\nof Parent:<\/p>\n
(a) Amend its Certificate of Incorporation or By-Laws or
\nequivalent organizational documents;<\/p>\n
(b) Issue, deliver, sell, pledge, dispose of or encumber, or
\nauthorize or commit to the issuance, sale, pledge, disposition or encumbrance
\nof, any shares of capital stock of any class, or any options, warrants,
\nconvertible securities or other rights of any kind to acquire any shares of
\ncapital stock, or any other ownership interest (including but not limited to
\nstock appreciation rights or phantom stock), of the Company or any of its
\nsubsidiaries (except for the issuance of shares of Company Common Stock in
\naccordance with the terms of (i) outstanding Company Stock Rights, (ii)
\nbeginning in November 2000, up to 100,000 options per calendar month to be
\nissued to new hires and up to 25,000 options (net of options forfeited) per
\ncalendar month to be issued to non-officer employees; PROVIDED that, for the
\nperiod from the date hereof until the Closing, no existing employee shall
\nreceive more than 3,000 options pursuant to this clause (ii), (iii) the ESPP,
\nand (iv) the securities on Section 2.3(a) of the Company Disclosure Schedule);<\/p>\n
(c) Declare, set aside, make or pay any dividend or other
\ndistribution, payable in cash, stock, property or otherwise, with respect to any
\nof its capital stock;<\/p>\n
(d) Reclassify, combine, split, subdivide or redeem, purchase
\nor otherwise acquire, directly or indirectly, any of its capital stock or any
\ncapital stock of any of its subsidiaries (other than pursuant to the Company’s
\nrepurchase rights for departing employees with respect to Company Common Stock
\nissued in connection with the ESPP or the Company Stock Rights);<\/p>\n
(e) (i) Acquire (by merger, consolidation or acquisition of
\nstock or assets) any corporation, partnership or other business organization or
\ndivision thereof or (except for the purchase of inventory, equipment, content
\nand other rights or properties in the ordinary course of business) any material
\nassets; (ii) sell, transfer, lease, mortgage, pledge, license, encumber or
\notherwise dispose of or subject to any Lien any of its assets or rights
\n(including capital stock of subsidiaries), except the disposition of obsolete
\nassets or otherwise unused or immaterial assets and the licensing of names in
\nthe ordinary course of business consistent with past practice; (iii) except as
\nset forth in Section 4.1(e) of the Company Disclosure Schedule, incur any
\nindebtedness for borrowed money or issue any debt securities or assume,
\nguarantee or endorse, or otherwise as an accommodation become responsible for,
\nthe obligations of any person, or make any loans, advances or capital
\ncontributions to, or investments in, any other person (other than trade payables
\nand receivables incurred in the ordinary course of business); (iv) except in <\/p>\n
27<\/p>\n
the ordinary course of business consistent with past practice, enter into,
\namend, terminate or renew any material contract or agreement (including, without
\nlimitation, the Contracts) or enter into, or amend or terminate any joint
\nventure arrangements (including distribution and syndication agreements); (v)
\nenter into any transaction, contract, commitment, arrangement or understanding
\nwith any affiliate of the Company other than with its subsidiaries; (vi) enter
\ninto any commitments or transactions or related commitments or transactions
\nmaterial, individually, to the Company and its subsidiaries taken as a whole;
\n(vii) enter into any new material line of business; (viii) change the Form Guide
\nAgreements used by the Company and its subsidiaries, except for changes
\nconsistent with past practice; (ix) authorize any single capital expenditure
\nwhich is in excess of $500,000 or capital expenditures which are, in the
\naggregate, in excess of $4,000,000 for the Company and its subsidiaries taken as
\na whole; or (x) enter into or amend any contract, agreement, commitment or
\narrangement with respect to any of the matters set forth in this Section 4.1(e);<\/p>\n
(f) Except to the extent required under existing employee and
\ndirector benefit plans, agreements or arrangements as in effect on the date of
\nthis Agreement, (i) increase or otherwise amend the compensation or fringe
\nbenefits of any of its directors, officers or employees, except for merit
\nincreases in salary or wages of employees of the Company or its subsidiaries who
\nare not officers of the Company in the ordinary course of business in accordance
\nwith past practice, or (ii) grant any retention, severance or termination pay
\nnot currently required to be paid under existing severance plans or (iii) enter
\ninto, or amend, any employment, consulting or severance agreement or arrangement
\nwith any present or former director, officer or other employee of the Company or
\nits subsidiaries except for severance arrangements consistent with past practice
\noffered in the ordinary course to employees who have been terminated, or (iv)
\nestablish, adopt, enter into or amend or terminate any collective bargaining,
\nbonus, profit sharing, thrift, compensation, stock option, restricted stock,
\npension, retirement, deferred compensation, employment, termination, severance
\nor other plan, agreement, trust, fund, policy or arrangement for the benefit of
\nany directors, officers or employees, or (v) amend the terms of any outstanding
\noptions to purchase any equity of the Company or any subsidiary (including
\naccelerating the vesting or lapse of repurchase rights or obligations);<\/p>\n
(g) Except as may be required as a result of a change in law
\nor in generally accepted accounting principles, change any of the accounting
\npractices or principles used by it;<\/p>\n
(h) Take any action that (without regard to any action taken
\nor agreed to be taken by Parent or any of its affiliates) would prevent the
\nMerger from qualifying as a reorganization within the meaning of Sections
\n368(a)(1)(A) and 368(a)(2)(E) of the Code;<\/p>\n
(i) Make or change any material Tax election, file any amended
\nTax Return with respect to any material Taxes, settle or compromise any material
\nfederal, state, local or foreign Tax liability, change any annual Tax accounting
\nperiod, change any method of Tax accounting, enter into any closing agreement
\nrelating to any material Tax, surrender any right to claim a material Tax
\nrefund, or consent to any extension or waiver of the limitations period
\napplicable to any Tax claim or assessment; PROVIDED, HOWEVER, that an action
\npermitted as a result of the materiality qualifiers in this clause (i) shall not
\nbe taken if such action could be taken after the Effective Time without causing
\nan adverse effect on the Company;<\/p>\n
28<\/p>\n
(j) Settle or compromise any pending or threatened Action
\nwhich is material or which relates to the transactions contemplated hereby;<\/p>\n
(k) Adopt a plan of complete or partial liquidation,
\ndissolution, merger, consolidation, restructuring, recapitalization or other
\nreorganization of the Company or any of its subsidiaries (other than the
\nMerger);<\/p>\n
(l) Pay, discharge or satisfy any claims, liabilities or
\nobligations (absolute, accrued, asserted or unasserted, contingent or
\notherwise), other than the payment, discharge or satisfaction in the ordinary
\ncourse of business and consistent with past practice of liabilities reflected or
\nreserved against in the financial statements of the Company or incurred in the
\nordinary course of business and consistent with past practice;<\/p>\n
(m) Effectuate a “plant closing” or “mass layoff”, as those
\nterms are defined in WARN, affecting in whole or in part any site of employment,
\nfacility, operating unit or employee of the Company or any of its subsidiaries;<\/p>\n
(n) Fail to maintain in full force and effect the existing
\ninsurance policies covering the Company and its subsidiaries and their
\nrespective properties, assets and businesses; or<\/p>\n
(o) Take, or offer or propose to take, or agree to take in
\nwriting or otherwise, any of the actions described in Section 4.1 clauses (a)
\nthrough (n) which would make any of the representations or warranties of the
\nCompany contained in this Agreement untrue and incorrect as of the date when
\nmade if such action had then been taken or would result in any of the conditions
\nset forth in Article VI not being satisfied.<\/p>\n
SECTION 4.2. CONDUCT OF BUSINESS OF PARENT PENDING THE MERGER.
\n(a) During the period from the date of this Agreement to the Effective Time
\n(except as otherwise contemplated by the terms of this Agreement), Parent shall
\nuse its commercially reasonable efforts to preserve intact its and its
\nsubsidiaries’ current business organizations, keep available the services of
\ntheir current officers and employees and preserve their relationships with
\ncustomers, suppliers, licensors, licensees, advertisers, distributors and other
\npersons with which the Company or any of its subsidiaries has significant
\nbusiness relations. By way of amplification and not limitation, without limiting
\nthe generality of the foregoing, during the period from the date of this
\nAgreement to the Effective Time, Parent shall not, without the prior consent of
\nthe Company:<\/p>\n
(i) Amend Parent’s certificate of incorporation
\n (except to change the number of authorized shares of capital
\n stock or to permit the issuance of a series preferred stock)
\n or by-laws in a manner that would be materially adverse to the
\n holders of Parent Common Stock;<\/p>\n
(ii) Reclassify, combine, split or subdivide any of
\n its capital stock;<\/p>\n
(iii) Take, or offer or propose to take, or agree to
\n take in writing or otherwise, any of the actions described in
\n Sections 4.2(b)(i) and (ii) or any action which would make any
\n of the representations or warranties of Parent contained in<\/p>\n
29<\/p>\n
this Agreement untrue and incorrect as of the date when made
\n if such action had then been taken or (except as otherwise
\n provided herein) would result in any of the conditions set
\n forth in Article VI not being satisfied;<\/p>\n
(iv) Issue, deliver, sell, pledge, dispose of or
\n encumber, or authorize or commit to the issuance, sale,
\n pledge, disposition or encumbrance of, any shares of capital
\n stock of any class, or any options, warrants, convertible
\n securities or other rights of any kind to acquire any shares
\n of capital stock, or any other ownership interest (including,
\n but not limited to stock appreciation rights or phantom stock)
\n of Parent or any of its subsidiaries to any record or
\n beneficial owner of five percent or more of the voting
\n securities of Parent, except on an arms-length basis; or<\/p>\n
(v) Adopt a plan of complete or partial liquidation or
\n dissolution of Parent (other than the Merger).<\/p>\n
(b) Parent shall not, and shall not permit any of its
\nsubsidiaries to, intentionally take any action that (without regard to any
\naction taken or agreed to be taken by the Company or any of its affiliates)
\nwould prevent the Merger from qualifying as a reorganization within the meaning
\nof Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.<\/p>\n
ARTICLE V<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 5.1. PREPARATION OF FORM S-4 AND THE PROXY STATEMENT;
\nSTOCKHOLDER MEETING. (a) Promptly following the date of this Agreement, the
\nCompany and Parent shall prepare and file with the SEC the Proxy Statement, and
\nParent shall prepare and file with the SEC the Form S-4, in which the Proxy
\nStatement will be included as a prospectus. Each of the Company and Parent shall
\nuse its reasonable best efforts to have the Form S-4 declared effective under
\nthe Securities Act as promptly as practicable after such filing. Each of the
\nCompany and Parent will use its reasonable best efforts to cause the Proxy
\nStatement to be mailed to its respective stockholders as promptly as practicable
\nafter the Form S-4 is declared effective under the Securities Act. Parent shall
\nalso take any action (other than qualifying to do business in any jurisdiction
\nin which it is not now so qualified) required to be taken under any applicable
\nstate securities law in connection with the issuance of Parent Common Stock in
\nconnection with the Merger, and the Company shall furnish all information
\nconcerning the Company and the holders of the Company Common Stock and rights to
\nacquire Company Common Stock pursuant to the Stock Plans as may be reasonably
\nrequired in connection with any such action. Each of Parent and the Company
\nshall furnish all information concerning itself to the other as may be
\nreasonably requested in connection with any such action and the preparation,
\nfiling and distribution of the Form S-4 and the preparation, filing and
\ndistribution of the Proxy Statement. The Company, Parent and Sub each agree to
\ncorrect any information provided by it for use in the Form S-4 or the Proxy
\nStatement that shall have become false or misleading.<\/p>\n
(b) The Company, acting through its Board of Directors, shall,
\nsubject to and in accordance with its Certificate of Incorporation and By-Laws,
\npromptly and duly call, give <\/p>\n
30<\/p>\n
notice of, convene and hold as soon as practicable following the date upon which
\nthe Form S-4 becomes effective a meeting of the holders of Company Common Stock
\nfor the purpose of voting to approve and adopt this Agreement and the
\ntransactions contemplated hereby, and (i) recommend approval and adoption of
\nthis Agreement and the transactions contemplated hereby, by the stockholders of
\nthe Company and include in the Proxy Statement such recommendation and (ii) take
\nall reasonable and lawful action to solicit and obtain such approval. The Board
\nof Directors of the Company shall not withdraw, amend or modify in a manner
\nadverse to Parent its recommendation referred to in clause (i) of the preceding
\nsentence (or announce publicly its intention to do so), except that such Board
\nof Directors shall be permitted to withdraw, amend or modify its recommendation
\n(or publicly announce its intention to do so) if: (i) the Company has complied
\nwith Section 5.4; (ii) an unsolicited Superior Proposal (as defined in Section
\n5.4) shall have been proposed by any person other than Parent and such proposal
\nis pending at the time of such withdrawal, amendment or modification and (iii)
\nthe Company shall have notified Parent of such Superior Proposal at least three
\nbusiness days in advance of such withdrawal, amendment or modification; PROVIDED
\nthat, in the event that, during the period prior to such withdrawal, amendment
\nor modification, Parent offers to enter into a transaction with the Company on
\nsubstantially the same or more favorable financial terms to the Company as such
\nSuperior Proposal, as determined in good faith by a financial advisor to the
\nCompany of nationally recognized standing, the Company shall not be permitted to
\nwithdraw, amend or modify its recommendation (or publicly announce its intention
\nto do so) or accept such Superior Proposal. Without limiting the generality of
\nthe foregoing, (i) the Company agrees that its obligation to duly call, give
\nnotice of, convene and hold a meeting of the holders of Company Common Stock, as
\nrequired by this Section 5.1, shall not be affected by the withdrawal, amendment
\nor modification of the Board of Directors’ recommendation of approval and
\nadoption of this Agreement and the transactions contemplated hereby and (ii)
\nsubject to the Company’s rights pursuant to Section 5.4, the Company agrees that
\nits obligations under this Section 5.1(b) shall not be affected by the
\ncommencement, public proposal, public disclosure or communication to the Company
\nof any Acquisition Proposal (as defined in Section 5.4).<\/p>\n
(c) The Company will cause its transfer agent to make stock
\ntransfer records relating to the Company available to the extent reasonably
\nnecessary to effectuate the intent of this Agreement.<\/p>\n
(d) Parent, acting through its Board of Directors, shall,
\nsubject to and in accordance with its certificate of incorporation and by-laws,
\nduly as soon as possible, set a record date for the determination of
\nstockholders of Parent entitled to vote by written consent to approve the
\nissuance of Parent Common Stock in the Merger. Parents shall take all other
\nactions necessary or advisable to cause the execution of such consent as soon as
\npossible thereafter.<\/p>\n
(e) Parent, acting through its Board of Directors, shall, in
\naccordance with its certificate of incorporation and by-laws, send the Proxy
\nStatement to its other stockholders pursuant to Rule 14C of the Exchange Act.<\/p>\n
SECTION 5.2. ACCOUNTANTS’ LETTERS. (a) The Company shall use
\nits reasonable best efforts to cause to be delivered to Parent a “comfort”
\nletter of each of Ernst & Young LLP, the Company’s independent public
\naccountants, and KPMG LLP, the Company’s previous independent public
\naccountants, dated a date within two business days before the date on which <\/p>\n
31<\/p>\n
the Form S-4 shall become effective and addressed to Parent, in form and
\nsubstance reasonably satisfactory to Parent and customary in scope and substance
\nfor letters delivered by independent public accountants in connection with
\nregistration statements similar to the Form S-4. In connection with the
\nCompany’s efforts to obtain such letter, if requested by Ernst & Young LLP
\nand\/or KPMG LLP, Parent shall provide a representation letter to Ernst & Young
\nLLP and\/or KPMG LLP, complying with the Statement on Auditing Standards No. 72
\n(“SAS 72”), if then required.<\/p>\n
(b) Parent shall use its reasonable best efforts to cause to
\nbe delivered to the Company a “comfort” letter of Deloitte & Touche LLP,
\nParent’s independent public accountants, dated a date within two business days
\nbefore the date on which the Form S-4 shall become effective and addressed to
\nthe Company, in form and substance reasonably satisfactory to the Company and
\ncustomary in scope and substance for letters delivered by independent public
\naccountants in connection with registration statements similar to the Form S-4.
\nIn connection with the Parent’s efforts to obtain such letter, if requested by
\nDeloitte & Touche LLP, the Company shall provide a representation letter to
\nDeloitte & Touche LLP complying with SAS 72, if then required.<\/p>\n
SECTION 5.3. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From
\nthe date hereof to the Effective Time, each of the Company and Parent shall, and
\nshall cause its subsidiaries, officers, directors, employees, auditors and other
\nagents to, afford the officers, employees, auditors and other agents of Parent
\nor the Company, respectively, who shall agree to be bound by the provisions of
\nthis Section 5.3 as though a party hereto, complete access at all reasonable
\ntimes to its officers, employees, agents, properties, offices, plants and other
\nfacilities and to all books and records, and shall furnish Parent or the
\nCompany, respectively, with all financial, operating and other data and
\ninformation as Parent or the Company, respectively, through its officers,
\nemployees or agents may from time to time request. In addition, subsequent to
\nthe date of this Agreement, Parent and\/or any of its subsidiaries may initiate
\ncommunications with any officer or key employee of the Company for the purpose
\nof addressing the prospective retention of such officer or employee following
\nthe Closing, PROVIDED that Parent believes, in good faith, that there is a
\ncompelling, legitimate business need to initiate such communication prior to the
\nClosing Date.<\/p>\n
(b) Each of the Company and Parent will hold and will cause
\nits directors, officers, employees, agents, advisors (including, without
\nlimitation, counsel and auditors) and controlling persons to hold any such
\ninformation which is nonpublic in confidence on the same terms and conditions as
\nthe confidentiality provisions set forth in the Confidentiality Agreement dated
\nJuly 27, 2000, as amended from time to time, between the Company and Parent (the
\n“CONFIDENTIALITY AGREEMENT”).<\/p>\n
(c) No investigation pursuant to this Section 5.3 shall affect
\nany representations or warranties of the parties herein or the conditions to the
\nobligations of the parties hereto.<\/p>\n
SECTION 5.4. NO SOLICITATION OF TRANSACTIONS. The Company
\nagrees that neither it nor any of its subsidiaries nor any of the officers and
\ndirectors of it or its subsidiaries shall, and that it shall direct and cause
\nits and its subsidiaries’ employees, agents and <\/p>\n
32<\/p>\n
representatives (including any investment banker, attorney or accountant
\nretained by it or any of its subsidiaries) not to, directly or indirectly,
\ninitiate, solicit, knowingly encourage or otherwise facilitate (including by way
\nof furnishing information) any inquiries or the making of any proposal or offer
\nwith respect to (i) a merger, reorganization, share exchange, consolidation,
\nbusiness combination, recapitalization, liquidation, dissolution or similar
\ntransaction involving it or any of its subsidiaries, or (ii) any purchase or
\nsale of all or any significant portion of the assets or 15% or more of the
\nequity securities of it or any of its subsidiaries (any such proposal or offer
\nbeing hereinafter referred to as an “ACQUISITION PROPOSAL”), and agrees that
\nneither it nor any of its subsidiaries nor any of the officers and directors of
\nit or its subsidiaries shall, and that it shall direct and cause its and its
\nsubsidiaries’ employees, agents and representatives (including any investment
\nbanker, attorney or accountant retained by it or any of its subsidiaries) not
\nto, directly or indirectly, have any discussion with or provide any confidential
\ninformation or data to any person relating to an Acquisition Proposal, or engage
\nin any negotiations concerning an Acquisition Proposal, or otherwise knowingly
\nfacilitate any effort or attempt to make or implement an Acquisition Proposal or
\naccept an Acquisition Proposal. Notwithstanding the foregoing, the Company or
\nits Board of Directors shall be permitted to (A) to the extent applicable,
\ncomply with Rule 14e-2(a) promulgated under the Exchange Act with regard to an
\nAcquisition Proposal, or (B) engage in any discussions or negotiations with, or
\nprovide any information to, any person in response to an unsolicited bona fide
\nwritten Acquisition Proposal by any such person, if and only to the extent that,
\nin the case of the actions referred to in clause (B), (i) the Company’s
\nstockholders meeting relating to the adoption of this Agreement by the
\nstockholders of the Company shall not have occurred, (ii) such Acquisition
\nProposal constitutes a Superior Proposal and was not solicited by it and did not
\notherwise result from a breach of this Section 5.4, (iii) the Board of Directors
\nof the Company determines in good faith, based on the advice of its outside
\nlegal advisors, that in light of this Superior Proposal, if the Company fails to
\nparticipate in such discussions or negotiations with, or provide such
\ninformation to, the person making such Superior Proposal, it would be in
\nviolation of its fiduciary duties under applicable law, (iv) prior to providing
\nany information or data to any person in connection with an Acquisition Proposal
\nby any such person, the Board of Directors of the Company receives from such
\nperson an executed confidentiality agreement on terms no less favorable to the
\nCompany than those contained in the Confidentiality Agreement and (v) prior to
\nproviding any information or data to any person or entering into discussions or
\nnegotiations with any person, the Board of Directors of the Company notifies
\nParent promptly of such inquiries, proposals or offers received by, any such
\ninformation requested from, or any such discussions or negotiations sought to be
\ninitiated or continued with, any of its representatives indicating, in
\nconnection with such notice, the name of such person and the material terms and
\nconditions of any proposals or offers. The Company agrees that it will keep
\nParent informed reasonably promptly of any material change in the terms of any
\nsuch proposals or offers and will notify Parent 24 hours in advance before an
\nagreement is reached. The Company agrees that it will immediately cease and
\ncause to be terminated any existing activities, discussions or negotiations with
\nany parties conducted heretofore with respect to any Acquisition Proposal or
\nsimilar transaction or arrangement. The Company agrees that it will take the
\nnecessary steps to promptly inform the individuals or entities referred to in
\nthe first sentence of this Section 5.4 of the obligations undertaken in this
\nSection 5.4. Nothing in this Section 5.4 shall (x) permit the Company to
\nterminate this Agreement (except as specifically provided in Article VII hereof)
\nor (y) affect any other obligation of the Company under this Agreement. For
\npurposes of this Section 5.4, “SUPERIOR <\/p>\n
33<\/p>\n
PROPOSAL” shall mean a bona fide written Acquisition Proposal which the Board of
\nDirectors of the Company concludes in good faith, upon the advice of a financial
\nadvisor of nationally recognized reputation, taking into account all legal,
\nfinancial, regulatory and other aspects of the proposal and the person making
\nthe proposal (including any break-up fees, expense reimbursement provisions and
\nconditions to consummation), (i) would, if consummated, result in a transaction
\nthat is more favorable to all of the Company’s stockholders (in their capacities
\nas stockholders), from a financial point of view, than the transactions
\ncontemplated by this Agreement and (ii) is reasonably capable of being completed
\n(PROVIDED that for purposes of this definition of “Superior Proposal,” the term
\nAcquisition Proposal shall have the meaning assigned to such term in this
\nSection 5.4, except that the reference to “15%” in the definition of
\n“Acquisition Proposal” shall be deemed to be a reference to “51%” and
\n“Acquisition Proposal” shall only be deemed to refer to a transaction involving
\nthe Company, and the reference to “assets” (including the shares of any
\nsubsidiary of the Company) shall refer to the assets of the Company and its
\nsubsidiaries, taken as a whole, and not the assets of any of the subsidiaries
\nalone).<\/p>\n
SECTION 5.5. EMPLOYEE BENEFITS MATTERS. (a) The Company shall
\nor Parent shall cause the Company and the Surviving Corporation to promptly pay
\nor provide when due all compensation and benefits earned through or prior to the
\nEffective Time as provided pursuant to the terms of any Plans in existence as of
\nthe date hereof and set forth on Section 2.10 of the Company Disclosure
\nSchedule. Parent and the Company agree that the Company and the Surviving
\nCorporation shall pay promptly or provide when due all compensation and benefits
\nrequired to be paid pursuant to the terms of any individual agreement with any
\nemployee, former employee, director or former director in effect and disclosed
\nto Parent as of the date hereof. Nothing herein shall require the continued
\nemployment of any person or prevent the Company and\/or the Surviving Corporation
\nfrom taking any action or refraining from taking any action that the Company
\ncould take or refrain from taking prior to the Effective Time.<\/p>\n
(b) Parent shall, for the period ending on December 31, 2001,
\nmaintain (or cause the Surviving Corporation to maintain) employee benefit plans
\n(other than with respect to equity-based compensation, except as contemplated by
\nSection 1.7(b)) for the benefit of each employee of the Company or its
\nsubsidiaries who continues employment with the Surviving Corporation as of the
\nEffective Time that are no less favorable in the aggregate to the Plans in
\neffect immediately prior to the Effective Time with respect to each such
\nemployee; provided, that nothing herein shall require Parent and\/or the
\nSurviving Corporation to continue to maintain any Plan or grant any such
\nemployee any equity-based compensation in the Surviving Corporation or Parent.
\nFor purposes of determining eligibility to participate, eligibility for benefit
\nforms and subsidies and the vesting of benefits under such plans (without
\nduplication of benefits as a result thereof), the Surviving Corporation shall
\ngive effect to years of service with the Company and its subsidiaries in respect
\nof years of service for which credit was given by the Company and its
\nsubsidiaries. No employee electing coverage under the medical insurance plans of
\nthe Surviving Corporation shall be excluded from coverage thereunder (for such
\nemployee and any person covered by virtue of such employee’s employment) on the
\nbasis of a pre-existing condition that was not also excluded under the Company’s
\nmedical insurance plan.<\/p>\n
SECTION 5.6. DIRECTORS’ AND OFFICERS’ INDEMNIFICATION;
\nINSURANCE. (a) The By-Laws of the Surviving Corporation shall contain provisions
\nno less favorable with respect to <\/p>\n
34<\/p>\n
indemnification and exculpation from liability than are set forth in the
\nCertificate of Incorporation of the Company, which provisions shall not be
\namended, repealed or otherwise modified for a period of six years from the
\nEffective Time in any manner that would adversely affect the rights thereunder
\nof individuals who at the Effective Time were directors, officers or employees
\nof the Company.<\/p>\n
(b) For six years from the Effective Time, the Surviving
\nCorporation shall, unless Parent agrees in writing to guarantee the
\nindemnification obligations set forth in Section 5.6(a), maintain in effect the
\ncurrent directors’ and officers’ liability insurance covering those persons who
\nare currently covered by the Company’s directors’ and officers’ liability
\ninsurance policy to the extent that it provides coverage for events occurring
\nprior to the Effective Time (a copy of which has been heretofore delivered to
\nParent), so long as the annual premium therefor would not be in excess of 150%
\nof the last annual premium paid prior to the date of this Agreement (the
\n“COMPANY’S CURRENT PREMIUM”). If such premiums for such insurance would at any
\ntime exceed 150% of the Company’s Current Premium, then the Surviving
\nCorporation shall cause to be maintained policies of insurance that in the
\nSurviving Corporation’s good faith determination, provide the maximum coverage
\navailable at an annual premium equal to 150% of the Company’s Current Premium.<\/p>\n
SECTION 5.7. NOTIFICATION OF CERTAIN MATTERS. The Company
\nshall give prompt notice to Parent, and Parent shall give prompt notice to the
\nCompany, of (i) the occurrence or non-occurrence of any event the occurrence or
\nnon-occurrence of which could be likely to cause any representation or warranty
\ncontained in this Agreement to be untrue or inaccurate in any material respect
\nand (ii) any failure of the Company, Parent or Sub, as the case may be, to
\ncomply with or satisfy in any material respect any covenant, condition or
\nagreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
\nthat the delivery of any notice pursuant to this Section 5.7 shall not limit or
\notherwise affect the remedies available hereunder to the party receiving such
\nnotice.<\/p>\n
SECTION 5.8. FURTHER ACTION; REASONABLE BEST EFFORTS. Upon the
\nterms and subject to the conditions hereof, each of the parties hereto shall use
\nits reasonable best efforts to take, or cause to be taken, all appropriate
\naction, and to do or cause to be done, all things necessary, proper or advisable
\nunder applicable laws and regulations to consummate and make effective the
\ntransactions contemplated by this Agreement as soon as practicable after the
\ndate hereof, including but not limited to (i) cooperation in the preparation and
\nfiling of the Form S-4, the Proxy Statement, and required filings under the HSR
\nAct and any amendments to any thereof and (ii) using its reasonable best efforts
\nto make all required regulatory filings and applications and to obtain all
\nlicenses, permits, consents, approvals, authorizations, qualifications and
\norders of governmental authorities and parties to contracts with the Company and
\nits subsidiaries as are necessary for the consummation of the transactions
\ncontemplated by this Agreement and to fulfill the conditions to the Merger. In
\nfurtherance and not in limitation of the foregoing, each party hereto agrees to
\nmake, to the extent it has not already done so, an appropriate filing of a
\nNotification and Report Form pursuant to the HSR Act with respect to the
\ntransactions contemplated hereby as promptly as practicable and in any event
\nwithin five business days of the date hereof and to supply as promptly as
\npracticable any additional information and documentary material that may be
\nrequested pursuant to the HSR Act. In case at any time after the Effective Time
\nany further action is necessary or desirable to carry out the purposes of this
\nAgreement, the <\/p>\n
35<\/p>\n
proper officers and directors of each party to this Agreement shall use their
\nreasonable best efforts to take all such necessary action. In the event that a
\nsuit or objection is instituted by any person or governmental authority
\nchallenging this Agreement and the transactions contemplated hereby as violative
\nof applicable competition and antitrust laws, each of Parent and the Company
\nshall use their reasonable best efforts to resist or resolve such suit or
\nobjection. Notwithstanding the foregoing, in connection with any such objection
\nor suit instituted by such person or governmental authority (including, but not
\nlimited to, the Federal Trade Commission or the Antitrust Division of the
\nDepartment of Justice), neither Parent nor Sub shall be required to provide any
\nundertakings or agree to any condition that could reasonably be expected to
\nresult in a substantial detriment to Parent’s or the Company’s business or
\nresults of operations (a “SUBSTANTIAL DETRIMENT”).<\/p>\n
SECTION 5.9. PUBLIC ANNOUNCEMENTS. Parent and the Company
\nshall consult with each other before issuing any press release or otherwise
\nmaking any public statements with respect to the Merger and shall not issue any
\nsuch press release or make any such public statement prior to such consultation,
\nexcept as may be required by law or any listing agreement with its securities
\nexchange.<\/p>\n
SECTION 5.10. STOCK EXCHANGE LISTING. Parent shall use its
\nreasonable best efforts to have approved for listing on the NYSE prior to the
\nEffective Time, subject to official notice of issuance, the Parent Common Stock
\nto be issued pursuant to the Merger.<\/p>\n
SECTION 5.11. AFFILIATES. Prior to the Closing Date, the
\nCompany shall deliver to Parent a letter identifying all persons who are, at the
\ntime this Agreement is submitted for adoption by the stockholders of the
\nCompany, “affiliates” of the Company for purposes of Rule 145 under the
\nSecurities Act. The Company shall use its reasonable best efforts to cause each
\nsuch person to deliver to Parent on or prior to the Closing Date a written
\nagreement substantially in the form attached as Exhibit A hereto.<\/p>\n
SECTION 5.12. BOARD OF DIRECTORS AND OFFICERS OF PARENT.
\nParent shall use its reasonable efforts to appoint the Company’s Chief Executive
\nOfficer to the Board of Directors of Parent, effective immediately following the
\nEffective Time. The Board of Directors of Parent also shall appoint the
\nCompany’s Chief Executive Officer as Chief Internet Officer of Parent, effective
\nimmediately following the Effective Time.<\/p>\n
SECTION 5.13. SECTION 16B APPROVALS. The Board of Directors or
\nCompensation Committee of Parent shall grant all approvals and take all other
\nactions required pursuant to Rules 16b-3(d) and 16b-3(e) under the Exchange Act
\nto cause the Parent Common Stock and New Stock Rights to be exempt from the
\nprovisions of Section 16(b) of the Exchange Act.<\/p>\n
SECTION 5.14. SEC DOCUMENTS. From the date hereof to the
\nEffective Time, each of Parent and the Company shall furnish to the Company and
\nParent, respectively, a complete and correct copy of any agreements, documents
\nor other instruments, or amendment or modifications thereto, which are filed by
\nParent or the Company, respectively, with the SEC pursuant to the Securities Act
\nand the rules and regulations promulgated thereunder or the Exchange Act and the
\nrules and regulations promulgated thereunder.<\/p>\n
36<\/p>\n
SECTION 5.15. CONTINUED EMPLOYMENT. The Company shall take no
\naction to terminate the employment of Messrs. Kurnit and Day in their current
\njobs and shall not diminish their respective responsibilities or compensation,
\nexcept that the Company may, after consultation with Parent, terminate either
\nindividual “for cause.”<\/p>\n
SECTION 5.16. OUTSTANDING COMPANY SECURITIES. The Company
\nshall use commercially reasonable efforts to cause the Company Securities listed
\nin Section 5.16 of the Company Disclosure Schedule to be exercised or cancelled,
\nand the Company’s obligations thereunder to be discharged, prior to the Closing.<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS OF MERGER<\/p>\n
SECTION 6.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT
\nTHE MERGER. The respective obligations of each party to effect the Merger shall
\nbe subject to the satisfaction at or prior to the Closing Date of the following
\nconditions:<\/p>\n
(a) This Agreement shall have been adopted by the affirmative
\nvote of the holders of a majority of the outstanding shares of Company Common
\nStock.<\/p>\n
(b) No Order (whether temporary, preliminary or permanent)
\nshall have been enacted, entered, promulgated or enforced by any court or
\ngovernmental authority of competent jurisdiction which prohibits, restrains,
\nenjoins or restricts the consummation of the Merger; PROVIDED, HOWEVER, that the
\nparties shall use their reasonable best efforts to cause any such Order to be
\nvacated or lifted.<\/p>\n
(c) Any waiting period applicable to the Merger under the HSR
\nAct shall have terminated or expired.<\/p>\n
(d) The Form S-4 and any required post-effective amendment
\nthereto shall have become effective under the Securities Act and shall not be
\nthe subject of any stop order or proceedings seeking a stop order, and any
\nmaterial “blue sky” and other state securities laws applicable to the
\nregistration of the Parent Common Stock to be exchanged for Company Common Stock
\nshall have been complied with.<\/p>\n
(e) The shares of Parent Common Stock issuable to the holders
\nof Company Common Stock pursuant to this Agreement shall have been approved for
\nlisting on the NYSE, subject to official notice of issuance.<\/p>\n
(f) Any waiting period under the proxy rules applicable to
\nParent shall have expired.<\/p>\n
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY TO
\nEFFECT THE MERGER. The obligation of the Company to effect the Merger shall be
\nsubject to the fulfillment at or prior to the Closing Date of the following
\nadditional conditions:<\/p>\n
37<\/p>\n
(a) (i) Parent and Sub shall have performed or complied with
\nin all material respects their agreements and covenants contained in this
\nAgreement required to be performed or complied with at or prior to the Closing
\nDate; (ii) the representations and warranties of Parent and Sub contained in
\nthis Agreement shall be true in all respects (without regard to materiality or
\nMaterial Adverse Effect qualifiers), in each case when made and, unless a
\nrepresentation speaks of a specific date, on and as of the Closing Date with the
\nsame force and effect as if made on and as of such date, except where failures
\nto be so true could not, individually or in the aggregate, reasonably be
\nexpected to have a Parent Material Adverse Effect; PROVIDED HOWEVER, such Parent
\nMaterial Adverse Effect qualification shall be inapplicable with respect to the
\nrepresentations and warranties contained in Sections 3.2 and 3.10 (which
\nrepresentations shall be true and correct at the applicable times in all
\nmaterial respects) and (iii) the Company shall have received a certificate
\nsigned on behalf of Parent by the chief executive officer and chief financial
\nofficer of Parent to such effect.<\/p>\n
(b) The opinion, based on appropriate representations of the
\nCompany and Parent, of Brobeck, Phleger & Harrison LLP, counsel to the Company,
\nto the effect that (i) the Merger will be treated for Federal income Tax
\npurposes as a reorganization within the meaning of Section 368(a) of the Code
\nand (ii) Parent, Sub and the Company will each be a party to the reorganization
\nunder the meaning of Section 368(b) of the Code, dated on or about the date of
\nand referred to in the Proxy Statement as first mailed to stockholders of the
\nCompany, which shall not have been withdrawn or modified in any material respect
\nas of the Closing Date.<\/p>\n
(c) At any time on or after the date of this Agreement there
\nshall not have occurred any condition, event or occurrence which could,
\nindividually or in the aggregate, reasonably be likely to cause a Parent
\nMaterial Adverse Effect.<\/p>\n
(d) There shall not be pending or threatened by any
\ngovernmental authority any Action before any United States court or other
\ngovernmental body of competent jurisdiction, which challenges or seeks to
\nrestrain or prohibit the consummation of the Merger.<\/p>\n
(e) All approvals or consents of any governmental authority
\n(whether domestic, foreign or supranational) in connection with the Merger and
\nthe consummation of the other transactions contemplated hereby (including all
\nrelevant statutory, regulatory or other governmental waiting period expirations)
\nreferred to in Section 2.5(a) of the Company Disclosure Schedule shall have been
\nobtained, have been declared or filed or be deemed to have occurred, as the case
\nmay be, and all such approvals or consents shall be in full force and effect.<\/p>\n
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO
\nEFFECT THE MERGER. The obligations of Parent and Sub to effect the Merger shall
\nbe subject to the fulfillment at or prior to the Closing Date of the following
\nadditional conditions:<\/p>\n
(a) (i) The Company shall have performed or complied with in
\nall material respects its agreements and covenants contained in this Agreement
\nrequired to be performed or complied with at or prior to the Closing Date; (ii)
\nthe representations and warranties of the Company contained in this Agreement
\nshall be true in all respects (without regard to materiality or Material Adverse
\nEffect qualifiers), in each case when made and unless a representation speaks of
\na specific date, on and as of the Closing Date with the same force and effect as
\nif made <\/p>\n
38<\/p>\n
on and as of such date, except where failures to be so true could not,
\nindividually or in the aggregate, reasonably be expected to have a Material
\nAdverse Effect; PROVIDED HOWEVER, such Material Adverse Effect qualification
\nshall be inapplicable with respect to the representations and warranties
\ncontained in Sections 2.3, 2.14, 2.17 and 2.18 (which representations shall be
\ntrue and correct at the applicable times in all material respects); and (iii)
\nParent shall have received a certificate signed on behalf of the Company by the
\nchief executive officer and chief financial officer of the Company to such
\neffect.<\/p>\n
(b) At any time on or after the date of this Agreement there
\nshall not have occurred any condition, event or occurrence which could,
\nindividually or in the aggregate, reasonably be likely to cause a Material
\nAdverse Effect.<\/p>\n
(c) The opinion, based on appropriate representations of the
\nCompany and Parent, of Simpson Thacher & Bartlett, counsel to Parent, to the
\neffect that (i) the Merger will be treated for Federal income Tax purposes as a
\nreorganization within the meaning of Section 368(a) of the Code and (ii) Parent,
\nSub and the Company will each be a party to the reorganization within the
\nmeaning of Section 368(b) of the Code, dated on or about the date of and
\nreferred to in the Proxy Statement as first mailed to the stockholders of the
\nCompany, which shall not have been withdrawn or modified in any material respect
\nas of the Closing Date.<\/p>\n
(d) There shall not be pending or threatened by any
\ngovernmental authority any Action before any United States court or other
\ngovernmental body of competent jurisdiction (i) challenging or seeking to
\nrestrain or prohibit the consummation of the Merger or seeking to obtain from
\nParent or any of its subsidiaries or the Company any material damages, (ii)
\nseeking to prohibit or limit the ownership or operation by the Company, Parent
\nor any of their respective subsidiaries of any material portion of the business
\nor assets of the Company, Parent or any of their respective subsidiaries, to
\ndispose of or hold separate any significant portion of the business or assets of
\nthe Company, Parent or any of their respective subsidiaries, as a result of the
\nMerger or any of the other transactions contemplated by this Agreement, or (iii)
\nseeking to prohibit Parent or any of its subsidiaries from effectively
\ncontrolling in any material respect the business or operations of the Company or
\nits subsidiaries.<\/p>\n
(e) All approvals or consents of any governmental authority
\n(whether domestic, foreign or supranational) in connection with the Merger and
\nthe consummation of the other transactions contemplated hereby (including all
\nrelevant statutory, regulatory or other governmental waiting period
\nexpirations), which if not obtained in connection with the consummation of the
\ntransactions contemplated hereby, could reasonably be expected to result in a
\nSubstantial Detriment (each a “REQUIRED REGULATORY APPROVAL”), shall have been
\nobtained, have been declared or filed or be deemed to have occurred, as the case
\nmay be, and all such Required Regulatory Approvals shall be in full force and
\neffect; provided, however, that a Required Regulatory Approval shall not be
\ndeemed to have been obtained if in connection with the grant thereof there shall
\nhave been an imposition by any governmental authority of any condition,
\nrequirement, restriction or change of regulation, or any other action directly
\nor indirectly related to such grant taken by such governmental authority
\n(including with respect to divestitures of assets or subsidiaries), which could
\nreasonably be expected to result in a Substantial Detriment.<\/p>\n
39<\/p>\n
(f) All third party consents set forth on Schedule 6.3(f)
\nattached hereto shall have been obtained.<\/p>\n
(g) Parent shall have received the agreements referred to in
\nSection 5.11.<\/p>\n
(h) Parent shall have received the letters referred to in
\nSection 5.2(a).<\/p>\n
(i) Each of the members of the Board of Directors of the
\nCompany shall have duly delivered to the Company their written resignations,
\neffective as of the Effective Time, as directors of the Company, and Parent
\nshall have received copies of each such resignation and prior to such
\nresignation, the Board of Directors of the Company shall have fixed the
\nauthorized number of directors of the Company, effective as of the Effective
\nTime, at three (3) and shall have appointed, effective as of the Effective Time,
\nThomas Rogers, Charles McCurdy and Beverly Chell as the members of the Board of
\nDirectors of the Surviving Corporation, and Parent shall have received evidence
\nof such actions.<\/p>\n
(j) For all times prior to the Closing, each of Messrs. Kurnit
\nand Day (absent death or disability) shall have been employed by the Company in
\naccordance with the terms of Section 5.15 and, as of the Closing, each of
\nMessrs. Kurnit and Day shall be ready, willing and able (absent death or
\npermanent disability) to commence employment with Parent in accordance with the
\nterms of their respective employment agreements with Parent.<\/p>\n
ARTICLE VII<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 7.1. TERMINATION. This Agreement may be terminated and
\nthe Merger contemplated hereby may be abandoned at any time prior to the Closing
\nDate, whether before or after approval of matters presented in connection with
\nthe Merger by the stockholders of the Company (except as otherwise stated
\nherein):
\n (a) By mutual written consent of Parent and the Company;<\/p>\n
(b) By either Parent or the Company, if the Merger shall not
\nhave been consummated on or before June 30, 2001 (other than due to the failure
\nof the party seeking to terminate this Agreement to perform its obligations
\nunder this Agreement required to be performed at or prior to the Effective
\nTime);<\/p>\n
(c) By either Parent or the Company, if any required approval
\nof the stockholders of the Company for this Agreement or the Merger shall not
\nhave been obtained by reason of the failure to obtain the required vote upon a
\nvote held at a duly held meeting of stockholders or at any adjournment thereof;<\/p>\n
(d) By either Parent or the Company, if any court or other
\ngovernmental body of competent jurisdiction shall have issued a final Order or
\nruling or taken any other final action restraining, enjoining or otherwise
\nprohibiting the Merger and such Order, ruling or other action is or shall have
\nbecome final and nonappealable;<\/p>\n
40<\/p>\n
(e) By the Company, if prior to the Closing Date (i) there
\nshall have been a breach of any representation or warranty on the part of Parent
\ncontained in this Agreement which could reasonably be expected to have a Parent
\nMaterial Adverse Effect or which could reasonably be expected to materially
\nadversely affect (or materially delay) the consummation of the Merger, or (ii)
\nthere shall have been a breach of any covenant or agreement on the part of
\nParent contained in this Agreement which could reasonably be expected to have a
\nParent Material Adverse Effect or which could reasonably be expected to
\nmaterially adversely affect (or materially delay) the consummation of the
\nMerger, which breach shall not have been cured prior to 10 days following notice
\nthereof; or<\/p>\n
(f) By Parent, if prior to the Closing Date (i) there shall
\nhave been a breach of any representation or warranty on the part of the Company
\ncontained in this Agreement which could reasonably be expected to have a
\nMaterial Adverse Effect or which could reasonably be expected to materially
\nadversely affect (or materially delay) the consummation of the Merger, or (ii)
\nthere shall have been a breach of any covenant or agreement on the part of the
\nCompany contained in this Agreement which could reasonably be expected to have a
\nMaterial Adverse Effect or which could reasonably be expected to materially
\nadversely affect (or materially delay) the consummation of the Merger, which
\nbreach shall not have been cured prior to 10 days following notice thereof; or<\/p>\n
(g) By Parent, (i) if the Board of Directors of the Company
\nshall have (A) failed to recommend or withdrawn, modified or amended in any
\nrespect adverse to Parent or Sub its approval or recommendation of this
\nAgreement, the Merger or any of the other transactions contemplated herein or
\nresolved to do so, or (B) approved or recommended a Superior Proposal from a
\nperson (other than Parent) or resolved to do so, or (ii) the Company breaches
\nany of its agreements set forth in Section 5.4; or<\/p>\n
(h) By Parent, if any person or group (as defined in Section
\n13(d)(3) of the Exchange Act) (other than Parent, Sub or any of their
\naffiliates) shall have become (x) the beneficial owner (as defined in Rule 13d-3
\npromulgated under the Exchange Act) of at least 25% of the outstanding shares of
\nCompany Common Stock or (y) shall have acquired 25% or more of the assets of the
\nCompany and its subsidiaries, taken as a whole.<\/p>\n
SECTION 7.2. EFFECT OF TERMINATION. In the event of the
\ntermination of this Agreement pursuant to Section 7.1, this Agreement shall
\nforthwith become void and there shall be no liability on the part of any party
\nhereto except as set forth in Sections 5.3(b), 7.3 and 8.1; provided, however,
\nthat nothing herein shall relieve any party from liability for any willful
\nbreach hereof.<\/p>\n
SECTION 7.3. FEES AND EXPENSES. (a) If:<\/p>\n
(i) This Agreement is terminated pursuant to Section
\n 7.1(g) or (h); or<\/p>\n
(ii) (x) (A) Parent or the Company terminate this
\n Agreement pursuant to Section 7.1(c), or (B) Parent terminates
\n this Agreement pursuant to Section 7.1(f) and (y) in the case
\n of (A) or (B), within 18 months thereafter, the Company<\/p>\n
41<\/p>\n
enters into an agreement with respect to an Alternative
\n Transaction or an Alternative Transaction is consummated;<\/p>\n
then the Company shall pay to Parent and Sub, (A) within two business days
\nfollowing any termination by Parent contemplated by Section 7.3(a)(i) and (B)
\nwithin two business days following the occurrence of one of the events described
\nin clause (y) of Section 7.3(a)(ii), a fee, in cash, of $23.5 million (the
\n“FEE”), PROVIDED, HOWEVER, that the Company shall in no event be obligated to
\npay more than one such fee with respect to all such occurrences and such
\ntermination.<\/p>\n
(b) Within two business days after the termination of this
\nAgreement pursuant to Section 7.1(c), (f), (g) or (h), the Company shall pay all
\nof Parent’s and Sub’s Expenses (as defined below) up to a maximum payment
\npursuant to this Section 7.3(b) of $1.0 million. The term “Expenses” shall
\ninclude all out-of-pocket expenses and fees (including without limitation fees
\nand expenses payable to all banks, investment banking firms and other financial
\ninstitutions and their respective agents and counsel for arranging or providing
\nfinancial advice with respect to the Merger and all reasonable fees and expenses
\nof counsel, accountants, experts and consultants to Parent and Sub) actually
\nincurred by Parent or Sub or on their behalf in connection with the consummation
\nof all transactions contemplated by this Agreement, including the Merger.<\/p>\n
For purposes of this Section 7.3, “ALTERNATIVE TRANSACTION”
\nmeans any of the following events: (i) the acquisition of the Company by merger,
\nreorganization, share exchange, consolidation, business combination,
\nrecapitalization, dissolution or otherwise by any person other than Parent, Sub
\nor any affiliate thereof (a “THIRD PARTY”); (ii) the acquisition by a Third
\nParty of 25% or more of the assets of the Company and its subsidiaries, taken as
\na whole; (iii) the acquisition by a Third Party of 25% or more of the
\noutstanding shares of Company Common Stock; (iv) the adoption by the Company of
\na plan of liquidation or the declaration or payment of an extraordinary
\ndividend; or (v) the repurchase by the Company or any of its subsidiaries of 25%
\nor more of the outstanding shares of Company Common Stock.<\/p>\n
(c) Except as otherwise specifically provided herein, each
\nparty shall bear its own expenses in connection with this Agreement and the
\ntransactions contemplated hereby, except that each of Parent and the Company
\nshall bear and pay one-half of the costs and expenses incurred in connection
\nwith the printing and mailing of the Form S-4 and the Proxy Statement.<\/p>\n
SECTION 7.4. AMENDMENT. This Agreement may be amended by the
\nparties hereto by action taken by or on behalf of their respective Boards of
\nDirectors at any time before or after any required approval of matters presented
\nin connection with the Merger by the stockholders of the Company; provided,
\nhowever, that after any such approval, there shall be made no amendment that by
\nlaw requires further approval by such stockholders without the further approval
\nof such stockholders. This Agreement may not be amended except by an instrument
\nin writing signed by the parties hereto.<\/p>\n
SECTION 7.5. WAIVER. At any time prior to the Closing Date,
\nany party hereto may (a) extend the time for the performance of any of the
\nobligations or other acts of the other <\/p>\n
42<\/p>\n
parties hereto, (b) waive any inaccuracies in the representations and warranties
\ncontained herein or in any document delivered pursuant hereto and (c) waive
\ncompliance with any of the agreements or conditions contained herein, subject to
\nthe requirements of applicable law. Any such extension or waiver shall be valid
\nif set forth in an instrument in writing signed by the party or parties to be
\nbound thereby. The failure of any party to this Agreement to assert any of its
\nrights under this Agreement or otherwise shall not constitute a waiver of such
\nrights.<\/p>\n
ARTICLE VIII<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 8.1. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
\nAGREEMENTS. The representations, warranties and agreements in this Agreement
\nshall terminate at the Effective Time or upon the termination of this Agreement
\npursuant to Section 7.1, as the case may be, except that the agreements set
\nforth in Article I and Sections 5.5 and 5.6 shall survive the Effective Time and
\nthose set forth in Section 5.3(b) and Section 7.3 shall survive termination of
\nthis Agreement.<\/p>\n
SECTION 8.2. NOTICES. All notices, requests, claims, demands
\nand other communications hereunder shall be in writing and shall be given (and
\nshall be deemed to have been duly given upon receipt) by delivery in person, by
\ntelecopy or by registered or certified mail (postage prepaid, return receipt
\nrequested) to the respective parties at the following addresses (or at such
\nother address for a party as shall be specified by like notice):<\/p>\n
if to Parent or Sub:
\n PRIMEDIA Inc.
\n 745 Fifth Avenue
\n New York, New York 10151
\n Attention: Charles McCurdy
\n Fax: (212) 745-0199<\/p>\n
with an additional copy to:
\n Simpson Thacher & Bartlett
\n 425 Lexington Avenue
\n New York, New York 10017
\n Attention: Gary I. Horowitz, Esq.
\n Fax: (212) 455-2502<\/p>\n
if to the Company:<\/p>\n
About.com, Inc.
\n 1440 Broadway, 19th Floor
\n New York, New York 10018
\n Attention: Alan Blaustein
\n President-Corporate Development
\n Fax: (212) 204-1521<\/p>\n
43<\/p>\n
with an additional copy to:
\n Brobeck, Phleger & Harrison LLP
\n 1633 Broadway, 47th Floor
\n New York, New York 10019
\n Attention: Eric Simonson, Esq.
\n Fax: (212) 586-7878<\/p>\n
SECTION 8.3. CERTAIN DEFINITIONS. For purposes of this
\nAgreement, the term:<\/p>\n
(a) “AFFILIATE” of a person means a person that directly or
\nindirectly, through one or more intermediaries, controls, is controlled by, or
\nis under common control with, the first mentioned person;<\/p>\n
(b) “BENEFICIAL OWNER” with respect to any shares of Company
\nCommon Stock means a person who shall be deemed to be the beneficial owner of
\nsuch shares of Company Common Stock (i) which such person or any of its
\naffiliates or associates beneficially owns, directly or indirectly, (ii) which
\nsuch person or any of its affiliates or associates (as such term is defined in
\nRule 12b-2 of the Exchange Act) has, directly or indirectly, (A) the right to
\nacquire (whether such right is exercisable immediately or subject only to the
\npassage of time), pursuant to any agreement, arrangement or understanding or
\nupon the exercise of conversion rights, exchange rights, warrants or options, or
\notherwise, or (B) the right to vote pursuant to any agreement, arrangement or
\nunderstanding, or (iii) which are beneficially owned, directly or indirectly, by
\nany other persons with whom such person or any of its affiliates or person with
\nwhom such person or any of its affiliates or associates has any agreement,
\narrangement or understanding for the purpose of acquiring, holding, voting or
\ndisposing of any shares;<\/p>\n
(c) “CONTROL” (including the terms “CONTROLLED BY” and “UNDER
\nCOMMON CONTROL WITH”) means the possession, directly or indirectly or as trustee
\nor executor, of the power to direct or cause the direction of the management
\npolicies of a person, whether through the ownership of stock, as trustee or
\nexecutor, by contract or credit arrangement or otherwise;<\/p>\n
(d) “GENERALLY ACCEPTED ACCOUNTING PRINCIPLES” means the
\ngenerally accepted accounting principles set forth in the opinions and
\npronouncements of the Accounting Principles Board of the American Institute of
\nCertified Public Accountants and statements and pronouncements of the Financial
\nAccounting Standards Board or in such other statements by such other entity as
\nmay be approved by a significant segment of the accounting profession in the
\nUnited States, in each case applied on a basis consistent with the manner in
\nwhich the audited financial statements for the fiscal year of the Company or the
\nParent ended December 31, 1999 were prepared;<\/p>\n
(e) “PERSON” means an individual, corporation, limited
\nliability company, partnership, association, trust, unincorporated organization,
\nother entity or group (as defined in Section 13(d)(3) of the Exchange Act); and<\/p>\n
(f) “SUBSIDIARY” or “SUBSIDIARIES” of the Company, the
\nSurviving Corporation, Parent or any other person means any corporation,
\npartnership, joint venture or other legal entity of which the Company, the
\nSurviving Corporation, Parent or such other person, as the case may <\/p>\n
44<\/p>\n
be (either alone or through or together with any other subsidiary), owns,
\ndirectly or indirectly, 50% or more of the stock or other voting or economic
\nequity interests.<\/p>\n
SECTION 8.4. SEVERABILITY. If any term or other provision of
\nthis Agreement is invalid, illegal or incapable of being enforced by any rule of
\nlaw or public policy, all other conditions and provisions of this Agreement
\nshall nevertheless remain in full force and effect so long as the economic or
\nlegal substance of the transactions contemplated hereby is not affected in any
\nmanner adverse to any party. Upon such determination that any term or other
\nprovision is invalid, illegal or incapable of being enforced, the parties hereto
\nshall negotiate in good faith to modify this Agreement so as to effect the
\noriginal intent of the parties as closely as possible in an acceptable manner to
\nthe end that the transactions contemplated hereby are fulfilled to the fullest
\nextent possible.<\/p>\n
SECTION 8.5. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement,
\ntogether with the Confidentiality Agreement, the Parent Voting Agreement and the
\nShareholder Voting Agreement, constitutes the entire agreement among the parties
\nwith respect to the subject matter hereof and supersedes all prior agreements
\nand undertakings, both written and oral, among the parties, or any of them, with
\nrespect to the subject matter hereof. This Agreement shall not be assigned by
\noperation of law or otherwise, except that Parent and Sub may assign all or any
\nof their respective rights and obligations hereunder to any direct or indirect
\nwholly owned subsidiary or subsidiaries of Parent, PROVIDED that no such
\nassignment shall relieve the assigning party of its obligations hereunder if
\nsuch assignee does not perform such obligations. Any attempted assignment that
\ndoes not comply with the provisions of this Section 8.5 shall be null and void
\nAB INITIO.<\/p>\n
SECTION 8.6. PARTIES IN INTEREST. This Agreement shall be
\nbinding upon and inure solely to the benefit of each party hereto, and, except
\nas provided in the following sentence, nothing in this Agreement, express or
\nimplied, is intended to or shall confer upon any other person any rights,
\nbenefits or remedies of any nature whatsoever under or by reason of this
\nAgreement. The parties hereto expressly intend the provisions of Section 5.6 to
\nconfer a benefit upon and be enforceable by, as third party beneficiaries of
\nthis Agreement, the third persons referred to in, or intended to be benefited
\nby, such provisions.<\/p>\n
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed
\nby, and construed in accordance with, the laws of the State of Delaware, without
\nregard to principles of conflicts of laws.<\/p>\n
45<\/p>\n
SECTION 8.8. HEADINGS. The descriptive headings contained in
\nthis Agreement are included for convenience of reference only and shall not
\naffect in any way the meaning or interpretation of this Agreement.<\/p>\n
SECTION 8.9. COUNTERPARTS. This Agreement may be executed in
\none or more counterparts, and by the different parties hereto in separate
\ncounterparts, each of which when executed shall be deemed to be an original
\nbut all of which taken together shall constitute one and the same agreement.<\/p>\n
SECTION 8.10. INTERPRETATION. The parties hereto agree that in
\ninterpreting this Agreement there shall be no inferences against the drafting
\nparty.<\/p>\n
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
\nthis Agreement to be executed as of the date first written above by their
\nrespective officers thereunto duly authorized.<\/p>\n
PRIMEDIA INC.<\/p>\n
By: \/S\/ BEVERLY C. CHELL
\n ——————————————
\n Name: Beverly C. Chell
\n Title: Vice Chairman<\/p>\n
ABRACADABRA ACQUISITION CORPORATION<\/p>\n
By: \/S\/ BEVERLY C. CHELL
\n —————————————–
\n Name: Beverly C. Chell
\n Title: Vice Chairman<\/p>\n
ABOUT.COM, INC.<\/p>\n
By: \/S\/ SCOTT KURNIT
\n ——————————————
\n Name: Scott Kurnit
\n Title: Chairman and Chief Executive Officer<\/p>\n
[Signature page to Agreement and Plan of Merger]<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8579],"corporate_contracts_industries":[9464],"corporate_contracts_types":[9622,9626],"class_list":["post-43106","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-primedia-inc","corporate_contracts_industries-media__books","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\/43106","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=43106"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43106"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43106"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}