\n SECTION 9.02 Effect of Termination………………………………………………..45
\n SECTION 9.03 Amendment…………………………………………………………..45
\n SECTION 9.04 Waiver……………………………………………………………..46
\n SECTION 9.05 Termination Fee; Expenses…………………………………………….46<\/p>\nARTICLE X GENERAL PROVISIONS………………………………………………………………………….47
\n SECTION 10.01 Non-Survival of Representations and Warranties………………………….47
\n SECTION 10.02 Notices…………………………………………………………….47
\n SECTION 10.03 Severability………………………………………………………..48
\n SECTION 10.04 Assignment; Binding Effect; Benefit……………………………………48
\n SECTION 10.05 Incorporation of Exhibits…………………………………………….48
\n SECTION 10.06 Governing Law……………………………………………………….48
\n SECTION 10.07 Waiver of Jury Trial…………………………………………………49
\n SECTION 10.08 Headings; Interpretation……………………………………………..49
\n SECTION 10.09 Counterparts………………………………………………………..49
\n SECTION 10.10 Entire Agreement…………………………………………………….49<\/p>\n
ANNEXES<\/p>\n
ANNEX A Form of Company Shareholders’ Agreement
\nANNEX B Certificate of Incorporation of Surviving Corporation
\nANNEX C Form of Company Affiliate Agreement
\n<\/c><\/c><\/s><\/table>\n
iii<\/p>\n
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION<\/p>\n
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of
\nOctober 2, 2000 (as amended, supplemented or otherwise modified from time to
\ntime, this “AGREEMENT”), among DOUBLECLICK INC., a Delaware corporation
\n(“PARENT”), NETCREATIONS, INC., a New York corporation (“COMPANY”), and GENESIS
\nMERGER SUB, INC., a New York corporation and a direct wholly owned subsidiary of
\nParent (“MERGER SUB”):<\/p>\n
W I T N E S S E T H:<\/p>\n
WHEREAS, the boards of directors of Parent and Company have
\ndetermined that it is advisable and in the best interests of their respective
\ncompanies and shareholders to enter into a business combination by means of the
\nmerger of Merger Sub with and into Company (the “MERGER”) and have approved and
\nadopted this Agreement;<\/p>\n
WHEREAS, concurrently with the execution of this Agreement and
\nas an inducement to Parent to enter into this Agreement, certain shareholders of
\nCompany have entered into a company shareholders’ agreement (the “SHAREHOLDERS’
\nAGREEMENT”) in the form attached hereto as Annex A; and<\/p>\n
WHEREAS, for United States Federal income tax purposes, it is
\nintended that the Merger shall qualify as a tax-free reorganization under
\nSection 368(a) of the Internal Revenue Code of 1986, as amended (together with
\nthe rules and regulations promulgated thereunder, the “Code”), and that this
\nAgreement shall be, and hereby is, adopted as a plan of reorganization for
\npurposes of Section 368 of the Code;<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the
\nrepresentations, warranties, covenants and agreements set forth herein, and
\nother good and valuable consideration, the receipt and adequacy of which are
\nhereby acknowledged, and intending to be legally bound hereby, the parties
\nhereto hereby agree as follows:<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
SECTION 1.01 Certain Defined Terms<\/p>\n
Unless the context otherwise requires, the following terms,
\nwhen used in this Agreement, shall have the respective meanings specified below
\n(such meanings to be equally applicable to the singular and plural forms of the
\nterms defined):<\/p>\n
“AFFILIATE” shall mean, with respect to any person, any other
\nperson that controls, is controlled by or is under common control with the first
\nperson.<\/p>\n
“BLUE SKY LAWS” shall mean state securities or “blue sky”
\nlaws.<\/p>\n
“BUSINESS DAY” shall mean any day on which the principal
\noffices of the SEC in Washington, D.C. are open to accept filings, or, in the
\ncase of determining a date when any payment is due, any day on which banks are
\nnot required or authorized by law or executive order to close in New York.<\/p>\n
“COMPANY DISCLOSURE SCHEDULE” shall mean the disclosure
\nschedule delivered by Company to Parent prior to the execution of this Agreement
\nand forming a part hereof.<\/p>\n
“COMPANY MATERIAL ADVERSE EFFECT” shall mean any change in or
\neffect on the business of Company that, individually or in the aggregate (taking
\ninto account all other such changes or effects), is, or is reasonably likely to
\nbe, materially adverse to the business, assets, liabilities, financial condition
\nor results of operations of Company, taken as a whole, except to the extent any
\nsuch change or effect results from or is attributable to (i) changes in general
\neconomic conditions or changes affecting the industry generally in which Company
\noperates (provided that such changes do not affect Company in a materially
\ndisproportionate manner) or (ii) any litigation or loss of current or
\nprospective customers, employees or revenues as to which Company furnishes
\nreasonable evidence that it occurred primarily from the announcement of Company
\nentering into this Agreement; provided, however, that in no event shall (x) a
\ndecrease in the trading price of Company Common Stock or litigation relating
\nthereto (y) any matter publicly disclosed in a Company Report (as defined in
\nSection 4.07) or otherwise, in any case prior to the date hereof, or (z) the
\ntermination of any agreement listed on Schedule I to the Company Disclosure
\nSchedules be considered a Company Material Adverse Effect.<\/p>\n
“COMPANY STOCK PLAN” shall mean Company’s 1999 Employee Stock
\nOption Plan, as amended.<\/p>\n
“COMPANY STOCK PURCHASE PLAN” shall mean Company’s 2000
\nEmployee Stock Purchase Plan.<\/p>\n
“COMPANY SHAREHOLDERS’ Meeting” shall mean the special meeting
\nof Company shareholders to consider approval of this Agreement and the Merger.<\/p>\n
“COMPETING TRANSACTION” shall mean any of the following
\ninvolving Company (other than the Merger):<\/p>\n
(i) any merger, consolidation, share exchange,
\n business combination or other similar transaction;<\/p>\n
(ii) any sale, lease, exchange, mortgage, pledge,
\n transfer or other disposition of 20% or more of the assets of Company
\n and its subsidiaries, taken as a whole, in a single transaction or
\n series of related transactions (excluding for this purpose the
\n providing of opt-in e-mail addresses to direct marketers and brokers by
\n Company in the ordinary course of business);<\/p>\n
(iii) any tender offer or exchange offer for 20% or
\n more of the outstanding voting securities of Company or the filing of a
\n registration statement under the Securities Act in connection
\n therewith;<\/p>\n
2<\/p>\n
(iv) any person having acquired beneficial ownership
\n or the right to acquire beneficial ownership of, or any “group” (as
\n such term is defined under Section 13(d) of the Exchange Act) having
\n been formed that beneficially owns or has the right to acquire
\n beneficial ownership of, 20% or more of the outstanding voting
\n securities of Company; and<\/p>\n
(v) any public announcement of a proposal, plan or
\n intention to do any of the foregoing or any agreement to engage in any
\n of the foregoing.<\/p>\n
“CONFIDENTIALITY AGREEMENT” shall mean the confidentiality
\nagreement, dated as of September 20, 2000, between Parent and Company.<\/p>\n
“$” shall mean United States Dollars.<\/p>\n
“ENVIRONMENTAL LAW” shall mean any Law and any enforceable
\njudicial or administrative interpretation thereof, including any judicial or
\nadministrative order, consent decree or judgment, relating to pollution or
\nprotection of the environment or natural resources, including, without
\nlimitation, those relating to the use, handling, transportation, treatment,
\nstorage, disposal, release or discharge of Hazardous Material, as in effect as
\nof the date hereof.<\/p>\n
“ENVIRONMENTAL PERMIT” shall mean any permit, approval,
\nidentification number, license or other authorization required under or issued
\npursuant to any applicable Environmental Law.<\/p>\n
“ERISA” shall mean the Employee Retirement Income Security Act
\nof 1974, as amended.<\/p>\n
“EXCHANGE ACT” shall mean the Securities Exchange Act of 1934,
\nas amended, together with the rules and regulations promulgated thereunder.<\/p>\n
“EXPENSES” shall mean, with respect to any party hereto, all
\nout-of-pocket expenses (including, without limitation, all fees and expenses of
\ncounsel, accountants, investment bankers, experts and consultants to a party
\nhereto and its Affiliates) incurred by such party or on its behalf in connection
\nwith or related to the authorization, preparation, negotiation, execution and
\nperformance of its obligations pursuant to this Agreement and the consummation
\nof the Merger, the preparation, printing, filing and mailing of the Registration
\nStatement and the Proxy Statement, the solicitation of shareholder approvals,
\nthe filing of HSR Act notice, if any, and all other matters related to the
\ntransactions contemplated hereby and the closing of the Merger.<\/p>\n
“GOVERNMENTAL ENTITY” shall mean any United States Federal,
\nstate or local or any foreign governmental, regulatory or administrative
\nauthority, agency or commission or any court, tribunal or arbitral body.<\/p>\n
“GOVERNMENTAL ORDER” shall mean any order, writ, judgment,
\ninjunction, decree, stipulation, determination or award entered by or with any
\nGovernmental Entity.<\/p>\n
3<\/p>\n
“HAZARDOUS MATERIAL” shall mean (i) any petroleum, petroleum
\nproducts, by-products or breakdown products, radioactive materials,
\nasbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
\nmaterial or substance defined or regulated as toxic or hazardous or as a
\npollutant or contaminant or waste under any applicable Environmental Law.<\/p>\n
“HSR ACT” shall mean Hart-Scott-Rodino Antitrust Improvements
\nAct of 1976, as amended, together with the rules and regulations promulgated
\nthereunder.<\/p>\n
“IRS” shall mean the United States Internal Revenue Service.<\/p>\n
“KNOWLEDGE OF COMPANY” shall mean that any officer of Company
\nis actually aware of a fact or other matter, or should have been aware of a fact
\nor other matter based upon due inquiry and investigation.<\/p>\n
“KNOWLEDGE OF PARENT” shall mean that any executive officer of
\nCompany is actually aware of a fact or other matter, or should have been aware
\nof a fact or other matter based upon due inquiry and investigation.<\/p>\n
“LAW” shall mean any Federal, state, foreign or local statute,
\nlaw, ordinance, regulation, rule, code, order, judgment, decree, other
\nrequirement or rule of law of the United States or any other jurisdiction, and
\nany other similar act or law.<\/p>\n
“NNM” shall mean the Nasdaq National Market.<\/p>\n
“NEW YORK LAW” shall mean the New York Business Corporation
\nLaw.<\/p>\n
“PARENT CONVERTIBLE NOTES” shall mean the $250,000,000 4.75%
\nConvertible Notes of Parent Due 2006.<\/p>\n
“PARENT DISCLOSURE SCHEDULE” shall mean the disclosure
\nschedule delivered by Parent to Company prior to the execution of this Agreement
\nand forming a part hereof.<\/p>\n
“PARENT MATERIAL ADVERSE EFFECT” shall mean any change in or
\neffect on the business of Parent and the Parent Subsidiaries that, individually
\nor in the aggregate (taking into account all other such changes or effects), is,
\nor is reasonably likely to be, materially adverse to the business, assets,
\nliabilities, financial condition or results of operations of Parent and the
\nParent Subsidiaries, taken as a whole, except to the extent any such change or
\neffect results from or is attributable to (i) changes in general economic
\nconditions or changes affecting the industry generally in which Parent operates
\n(provided that such changes do not affect Parent in a materially
\ndisproportionate manner) or (ii) any litigation or loss of current or
\nprospective customers, employees or revenues that Parent successfully bears the
\nburden of proving arose solely from the announcement of Parent entering into
\nthis Agreement; provided, however, that in no event shall (x) a decrease in the
\ntrading price of Parent Common Stock or litigation relating thereto or (y) a
\nmatter publicly disclosed in a Parent Report (as defined in Section 5.06) or
\notherwise, in any case prior to the date hereof, be considered a Parent Material
\nAdverse Effect.<\/p>\n
4<\/p>\n
“PARENT STOCK PLANS” shall mean Parent’s 1996 Stock Plan, 1997
\nStock Incentive Plan, 1999 Non-Officer Stock Option\/Stock Issuance Plan and
\nEmployee Stock Purchase Plan.<\/p>\n
“PERSON” shall mean an individual, corporation, partnership,
\nlimited partnership, limited liability company, limited liability partnership,
\nsyndicate, person (including, without limitation, a “person” as defined in
\nSection 13(d)(3) of the Exchange Act), trust, association, entity or government
\nor political subdivision, agency or instrumentality of a government.<\/p>\n
“SECURITIES ACT” shall mean the Securities Act of 1933, as
\namended, together with the rules and regulations promulgated thereunder.<\/p>\n
“SUBSIDIARY” shall mean, with respect to any person, any
\ncorporation, partnership, limited partnership, limited liability company,
\nlimited liability partnership, joint venture or other legal entity of which such
\nperson (either alone or through or together with any other subsidiary of such
\nperson) owns, directly or indirectly, a majority of the stock or other equity
\ninterests, the holders of which are generally entitled to vote for the election
\nof the board of directors or other governing body of such corporation or other
\nlegal entity.<\/p>\n
“TAX” shall mean (i) any and all taxes, fees, levies, duties,
\ntariffs, imposts and other charges of any kind (together with any and all
\ninterest, penalties, additions to tax and additional amounts imposed with
\nrespect thereto) imposed by any Governmental Entity or taxing authority,
\nincluding, without limitation, taxes or other charges on or with respect to
\nincome, franchises, windfall or other profits, gross receipts, property, sales,
\nuse, capital stock, payroll, employment, social security, workers’ compensation,
\nunemployment compensation or net worth; taxes or other charges in the nature of
\nexcise, withholding, ad valorem, stamp, transfer, value-added or gains taxes;
\nlicense, registration and documentation fees; and customers’ duties, tariffs and
\nsimilar charges; (ii) any liability for the payment of any amounts of the type
\ndescribed in (i) as a result of being a member of an affiliated, combined,
\nconsolidated or unitary group for any Taxable period; and (iii) any liability
\nfor the payment of amounts of the type described in (i) or (ii) as a result of
\nbeing a transferee of, or a successor in interest to, any person or as a result
\nof an express or implied obligation to indemnify any person.<\/p>\n
“TAX RETURN” shall mean any return, statement or form
\n(including, without limitation, any estimated tax reports or return, withholding
\ntax reports or return and information report or return) required to be filed
\nwith respect to any Taxes.<\/p>\n
ARTICLE II<\/p>\n
THE MERGER<\/p>\n
SECTION 2.01 The Merger<\/p>\n
Upon the terms and subject to the conditions set forth in this
\nAgreement, and in accordance with New York Law, at the Effective Time (as
\ndefined in Section 2.03), Merger Sub shall be merged with and into Company. As a
\nresult of the Merger, the separate corporate existence of Merger Sub shall cease
\nand Company shall continue as the surviving corporation of the Merger as a
\nwholly owned subsidiary of Parent (the “SURVIVING CORPORATION”).<\/p>\n
5<\/p>\n
SECTION 2.02 Closing<\/p>\n
Unless this Agreement shall have been terminated and the
\nMerger herein contemplated shall have been abandoned pursuant to Section 9.01
\nand subject to the satisfaction or waiver of the conditions set forth in Article
\nVIII, the consummation of the Merger shall take place as promptly as practicable
\n(and in any event within three Business Days) after satisfaction or waiver of
\nthe conditions set forth in Article VIII, at a closing (the “CLOSING”) to be
\nheld at the offices of Brobeck, Phleger & Harrison LLP, 1633 Broadway, 47th
\nFloor, New York, New York 10019, unless another date, time or place is agreed to
\nby Parent and Company.<\/p>\n
SECTION 2.03 Effective Time<\/p>\n
Immediately upon the Closing, the parties shall cause the
\nMerger to be consummated by filing a certificate of merger (the “CERTIFICATE OF
\nMERGER”) with the Secretary of State of the State of New York in such form as
\nrequired by, and executed in accordance with the relevant provisions of, New
\nYork Law (the date and time of such filing, or such later date and time as may
\nbe set forth therein, being the “EFFECTIVE TIME”).<\/p>\n
SECTION 2.04 Effect of the Merger<\/p>\n
At the Effective Time, the effect of the Merger shall be as
\nprovided in the applicable provisions of New York Law. Without limiting the
\ngenerality of the foregoing, and subject thereto, at the Effective Time, except
\nas otherwise provided herein, all the property, rights, privileges, powers and
\nfranchises of Company and Merger Sub shall vest in Company as the Surviving
\nCorporation, and all debts, liabilities and duties of Company and Merger Sub
\nshall become the debts, liabilities and duties of Company as the Surviving
\nCorporation.<\/p>\n
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors
\nand Officers of Surviving Corporation<\/p>\n
Unless otherwise agreed by Parent and Company before the
\nEffective Time, at the Effective Time:<\/p>\n
(a) the certificate of incorporation of Company shall be
\n amended and restated as of the Effective Time to read in its entirety
\n as set forth on Annex B hereto and, as so amended, shall constitute the
\n certificate of incorporation of the Surviving Corporation until
\n thereafter amended;<\/p>\n
(b) subject to the requirements of Section 7.04(a) herein, the
\n bylaws of Merger Sub, as in effect immediately prior to the Effective
\n Time, shall be adopted as the bylaws of the Surviving Corporation until
\n thereafter amended;<\/p>\n
(c) the officers of Merger Sub immediately prior to the
\n Effective Time shall serve in their respective offices of the Surviving
\n Corporation from and after the Effective Time, in each case until their
\n successors are elected or appointed and qualified or until their
\n resignation or removal; and<\/p>\n
6<\/p>\n
(d) the directors of Merger Sub immediately prior to the
\n Effective Time shall serve as the directors of the Surviving
\n Corporation from and after the Effective Time, in each case until their
\n successors are elected or appointed and qualified or until their
\n resignation or removal.<\/p>\n
ARTICLE III<\/p>\n
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES<\/p>\n
SECTION 3.01 Conversion of Shares<\/p>\n
At the Effective time, by virtue of the Merger, and without
\nany action on the part of Parent, Merger Sub, Company or the holders of any of
\nthe following securities:<\/p>\n
(a) each share of common stock, $.01 par value per share, of
\nCompany (“COMPANY COMMON STOCK”) issued and outstanding immediately before the
\nEffective Time (excluding those held in the treasury of Company and those owned
\nby any wholly owned Subsidiary of Company) and all rights in respect thereof,
\nshall, forthwith cease to exist and be converted into and become exchangeable
\nfor 0.41 of a share (the “EXCHANGE RATIO”) of common stock, $.001 par value, of
\nParent (“PARENT COMMON STOCK”);<\/p>\n
(b) each share of Company Common Stock held in the treasury of
\nCompany or owned by any wholly owned Subsidiary of Company immediately prior to
\nthe Effective Time shall be canceled and retired and no shares of stock or other
\nsecurities of Parent, the Surviving Corporation or any other corporation shall
\nbe issuable, and no payment of other consideration shall be made, with respect
\nthereto;<\/p>\n
(c) each issued and outstanding share of capital stock of
\nMerger Sub shall be converted into and become one fully paid and nonassessable
\nshare of common stock of the Surviving Corporation; and<\/p>\n
(d) from and after the Effective Time, each outstanding
\ncertificate theretofore representing shares of Merger Sub common stock shall be
\ndeemed for all purposes to evidence ownership of and to represent the number of
\nshares of Surviving Corporation common stock into which such shares of Merger
\nSub common stock shall have been converted.<\/p>\n
SECTION 3.02 Exchange of Shares Other than Treasury Shares<\/p>\n
(a) Exchange Agent. As of the Effective Time, Parent shall
\nenter into an agreement with a bank or trust company to act as exchange agent
\nfor the Merger (the “EXCHANGE AGENT”) as may be designated by Parent and shall
\nbe reasonably acceptable to Company.<\/p>\n
(b) Parent to Provide Common Stock and Cash. Promptly after
\nthe Effective Time, Parent shall make available to the Exchange Agent for the
\nbenefit of the holder of Company Common Stock: (i) certificates of Parent Common
\nStock (“PARENT CERTIFICATES”) representing the number of whole shares of Parent
\nCommon Stock issuable pursuant to Section 3.01(a) in exchange for shares of
\nCompany Common Stock outstanding immediately<\/p>\n
7<\/p>\n
prior to the Effective Time; and (ii) sufficient funds to permit payment in lieu
\nof fractional shares pursuant to Section 3.04.<\/p>\n
(c) Exchange Procedures. The Exchange Agent shall mail to each
\nholder of record of certificates of Company Common Stock (“COMPANY
\nCERTIFICATES”), whose shares were converted into the right to receive shares of
\nParent Common Stock (and cash in lieu of fractional shares pursuant to Section
\n3.04) promptly after the Effective Time (and in any event no later than three
\nBusiness Days after the later to occur of the Effective Time and receipt by
\nParent of a complete list from Company of the names and addresses of its holders
\nof record): (i) a letter of transmittal (which shall specify that delivery shall
\nbe effected, and risk of loss and title to the Company Certificates shall pass,
\nonly upon receipt of the Company Certificates by the Exchange Agent, and shall
\nbe in such form and have such other provisions as Parent may reasonably
\nspecify); and (ii) instructions for use in effecting the surrender of the
\nCompany Certificates in exchange for Parent Certificates (and cash in lieu of
\nfractional shares). Upon surrender of a Company Certificate for cancellation to
\nthe Exchange Agent or to such other agent or agents as may be appointed by
\nParent, together with such letter of transmittal, duly completed and validly
\nexecuted, and such other documents as may be reasonably required by the Exchange
\nAgent, the holder of such Company Certificate shall be entitled to receive in
\nexchange therefor a Parent Certificate representing the number of whole shares
\nof Parent Common Stock that such holder has the right to receive pursuant to
\nthis Article III and payment of cash in lieu of fractional shares which such
\nholder has the right to receive pursuant to Section 3.04, and the Company
\nCertificate so surrendered shall forthwith be canceled. Until so surrendered,
\neach outstanding Company Certificate that, prior to the Effective Time,
\nrepresented shares of Company Common Stock will be deemed from and after the
\nEffective Time, for all corporate purposes other than the payment of dividends
\nand distributions, to evidence the ownership of the number of full shares of
\nParent Common Stock into which such shares of Company Common Stock shall have
\nbeen so converted and the right to receive an amount in cash in lieu of the
\nissuance of any fractional shares in accordance with Section 3.04.
\nNotwithstanding any other provision of this Agreement, no interest will be paid
\nor will accrue on any cash payable to holders of Company Certificates pursuant
\nto the provisions of this Article III.<\/p>\n
(d) Distributions With Respect to Unexchanged Shares. No
\ndividends or other distributions with respect to Parent Common Stock with a
\nrecord date after the Effective Time will be paid to the holder of any
\nunsurrendered Company Certificate with respect to the shares of Parent Common
\nStock represented thereby until the holder of record of such Company Certificate
\nshall surrender such Company Certificate. Subject to the effect of applicable
\nescheat or similar laws, following surrender of any such Company Certificate,
\nthere shall be paid to the record holder of the Parent Certificates issued in
\nexchange therefor, without interest, at the time of such surrender, the amount
\nof any such dividends or other distributions with a record date after the
\nEffective Time theretofore payable (but for the provisions of this Section
\n3.02(d)) with respect to such shares of Parent Common Stock.<\/p>\n
(e) Transfer of Ownership. If any Parent Certificate is to be
\nissued in a name other than that in which the Company Certificate surrendered in
\nexchange therefor is registered, it will be a condition of the issuance thereof
\nthat the Company Certificate so surrendered will be properly endorsed and
\notherwise in proper form for transfer and that the person requesting such
\nexchange will have paid to Parent or any agent designated by it any transfer or
\nother taxes<\/p>\n
8<\/p>\n
required by reason of the issuance of a Parent Certificate for shares of Parent
\nCommon Stock in any name other than that of the registered holder of the Company
\nCertificate surrendered, or established to the satisfaction of Parent or any
\nagent designated by it that such tax has been paid or is not payable.<\/p>\n
(f) Termination of Exchange Agent Funding. Any portion of
\nfunds (including any interest earned thereon) or Parent Certificates held by the
\nExchange Agent which have not been delivered to holders of Company Certificates
\npursuant to this Article III within six months after the Effective Time shall
\npromptly be paid or delivered, as appropriate, to Parent, and thereafter holders
\nof Company Certificates who have not theretofore complied with the exchange
\nprocedures outlined in and contemplated by this Section 3.02 shall thereafter
\nlook only to Parent (subject to abandoned property, escheat and similar laws)
\nonly as general creditors thereof for their claim for shares of Parent Common
\nStock, any cash in lieu of fractional shares of Parent Common Stock and any
\ndividends or distributions (with a record date after the Effective Time) with
\nrespect to Parent Common Stock to which they are entitled.<\/p>\n
(g) No Liability. Notwithstanding anything to the contrary in
\nthis Section 3.02, none of the Exchange Agent, the Surviving Corporation or any
\nparty hereto shall be liable to any person in respect of any shares of Parent
\nCommon Stock or cash delivered to a public official pursuant to any applicable
\nabandoned property, escheat or similar law.<\/p>\n
(h) Lost, Stolen or Destroyed Company Certificates. In the
\nevent any Company Certificates shall have been lost, stolen or destroyed, the
\nExchange Agent shall issue in exchange for such lost, stolen or destroyed
\nCompany Certificates, upon the making of an affidavit of that fact by the holder
\nthereof, a Parent Certificate representing such shares of Parent Common Stock
\n(and cash in lieu of fractional shares) as may be required pursuant to this
\nArticle III; provided, however, that Parent may, in its discretion and as a
\ncondition precedent to the issuance thereof, require the owner of such lost,
\nstolen or destroyed Company Certificates to indemnify Parent against any claim
\nthat may be made against Parent, the Surviving Corporation or the Exchange Agent
\nwith respect to the Company Certificates alleged to have been lost, stolen or
\ndestroyed.<\/p>\n
SECTION 3.03 Stock Transfer Books<\/p>\n
(a) At the Effective Time, the stock transfer books of Company
\nshall each be closed, and there shall be no further registration of transfers of
\nshares of Company Common Stock thereafter on the records of any such stock
\ntransfer books. In the event of a transfer of ownership of shares of Company
\nCommon Stock that is not registered in the stock transfer records of Company at
\nthe Effective Time, a certificate or certificates representing the number of
\nfull shares of Parent Common Stock into which such shares of Company Common
\nStock shall have been converted shall be issued to the transferee together with
\na cash payment in lieu of fractional shares, if any, in accordance with Section
\n3.04 hereof, and a cash payment in the amount of dividends, if any, in
\naccordance with Section 3.02(d) hereof, if the certificate or certificates
\nrepresenting such shares of Company Common Stock is or are surrendered as
\nprovided in Section 3.02(c) hereof, accompanied by all documents required to
\nevidence and effect such transfer and by evidence of payment of any applicable
\nstock transfer tax.<\/p>\n
9<\/p>\n
(b) Notwithstanding anything to the contrary herein,
\ncertificates surrendered for exchange by any person constituting an Affiliate of
\nCompany shall not be exchanged until Parent shall have received from such person
\nan affiliate letter as provided in Section 7.03.<\/p>\n
SECTION 3.04 No Fractional Share Certificates<\/p>\n
No scrip or fractional share Parent Certificate shall be
\nissued upon the surrender for exchange of Company Certificates, and an
\noutstanding fractional share interest shall not entitle the owner thereof to
\nvote, to receive dividends or to any rights of a stockholder of Parent or of
\nSurviving Corporation with respect to such fractional share interest. As
\npromptly as practicable following the Effective Time, Parent shall deposit with
\nthe Exchange Agent an amount in cash, rounded to the nearest whole cent,
\nsufficient for the Exchange Agent to pay each holder of Company Common Stock an
\namount in cash equal to the product obtained by multiplying (i) the fractional
\nshare interest to which such holder would otherwise be entitled (after taking
\ninto account all shares of Company Common Stock held at the Effective Time by
\nsuch holder) by (ii) the closing price for a share of Parent Common Stock on the
\nNNM on the first Business Day immediately prior to the Effective Time. As soon
\nas practicable after the determination of the amount of cash, if any, to be paid
\nto holders of Company Common Stock with respect to any fractional share
\ninterests, the Exchange Agent shall make available such amounts, net of any
\nrequired withholding Taxes, to such holders of Company Common Stock, subject to
\nand in accordance with the terms of Section 3.02 hereof.<\/p>\n
SECTION 3.05 Options to Purchase Company Common Stock<\/p>\n
At the Effective Time, the Company Stock Plan and each option
\ngranted by Company to purchase shares of Company Common Stock pursuant to the
\nCompany Stock Plan (“COMPANY STOCK OPTIONS”) which is outstanding and
\nunexercised immediately prior to the Effective Time, shall be assumed by Parent,
\nand the Company Stock Options shall be converted into an option to purchase
\nshares of Parent Common Stock in such number and at such exercise price as
\nprovided below and otherwise having the same terms and conditions as in effect
\nimmediately prior to the Effective Time (except to the extent that such terms,
\nconditions and restrictions may be altered in accordance with their terms as a
\nresult of the Merger contemplated hereby and except that all references in each
\nsuch Company Stock Option to Company shall be deemed to refer to Parent):<\/p>\n
(a) the number of shares of Parent Common Stock to be subject
\n to the new option shall be equal to the product of (x) the number of
\n shares of Company Common Stock subject to the original Company Stock
\n Option immediately prior to the Effective Time and (y) the Exchange
\n Ratio;<\/p>\n
(b) the exercise price per share of Parent Common Stock under
\n the new option shall be equal to (x) the exercise price per share of
\n Company Common Stock in effect under the original Company Stock Option
\n immediately prior to the Effective Time divided by (y) the Exchange
\n Ratio; and<\/p>\n
(c) in effecting such assumption and conversion, the aggregate
\n number of shares of Parent Common Stock to be subject to each assumed
\n Company Stock Option<\/p>\n
10<\/p>\n
will be rounded down, if necessary, to the next whole share and the
\n aggregate exercise price shall be rounded up, if necessary, to the next
\n whole cent.<\/p>\n
The adjustments provided herein with respect to any options
\nthat are “incentive stock options” (as defined in Section 422 of the Code) shall
\nbe effected in a manner consistent with the requirements of Section 424(a) of
\nthe Code. The assumption of the outstanding Company Stock Options in the Merger
\nand their conversion into options for Parent Common Stock will not result in any
\naccelerated vesting of those options or the shares purchasable thereunder, and
\nthe vesting schedule in effect for each Company Stock Option immediately prior
\nto the Effective Time shall remain in full force after the assumption thereof by
\nParent.<\/p>\n
SECTION 3.06 Unvested Stock<\/p>\n
At the Effective Time, any unvested shares of Company Common
\nStock awarded to employees, directors or consultants pursuant to any of the
\nCompany’s plans or arrangements and outstanding immediately prior to the
\nEffective Time shall be converted into unvested shares of Parent Common Stock in
\naccordance with the Exchange Ratio and shall remain subject to the same terms,
\nrestrictions and vesting schedule as in effect immediately prior to the
\nEffective Time. All outstanding rights which Company may hold immediately prior
\nto the Effective Time to repurchase unvested shares of Company Common Stock
\nshall be assigned to the Parent in the Merger and shall thereafter be
\nexercisable by Parent upon the same terms and conditions in effect immediately
\nprior to the Effective Time, except that the shares purchasable pursuant to such
\nrights and the purchase price payable per share shall be adjusted to reflect the
\nExchange Ratio.<\/p>\n
SECTION 3.07 Employee Stock Purchase Plan<\/p>\n
At the Effective Time, the Company Stock Purchase Plan and
\neach outstanding purchase right under the Company Stock Purchase Plan shall be
\nassumed by Parent. Section 3.07 of the Company Disclosure Schedule sets forth a
\ntrue and complete list as of the date hereof of all holders of outstanding
\npurchase rights under the Company Stock Purchase Plan, including the payroll
\ndeduction amount elected by each holder and the price per share of Company
\nCommon Stock at the start of the current purchase periods. On the Closing Date,
\nCompany shall deliver to Parent an updated version of such schedule, current as
\nof such date. Each such purchase right so assumed by Parent under this Agreement
\nshall continue to have, and be subject to, the terms and conditions set forth in
\nthe Company Stock Purchase Plan and the documents governing the outstanding
\npurchase rights under the Company Stock Purchase Plan immediately prior to the
\nEffective Time, except that the purchase price of shares of Parent Common Stock
\nand the number of shares of Parent Common Stock to be issued upon the exercise
\nof each such purchase right shall be adjusted in accordance with the Exchange
\nRatio (with the number of shares rounded down to the nearest whole share and the
\npurchase price rounded up to the nearest whole cent). The assumed outstanding
\npurchase rights under the Company Stock Purchase Plan shall be exercised at such
\ntimes following the Effective Time as set forth in the Company Stock Purchase
\nPlan, and each participant shall, accordingly, be issued shares of Parent Common
\nStock at such times. The Company Stock Purchase Plan, and all outstanding
\npurchase rights thereunder, shall terminate with the exercise of the last
\nassumed purchase right, and no additional<\/p>\n
11<\/p>\n
purchase rights shall be granted under the Company Stock Purchase Plan following
\nthe Effective Time.<\/p>\n
SECTION 3.08 Certain Adjustments<\/p>\n
If between the date of this Agreement and the Effective Time,
\n(i) the outstanding shares of Parent Common Stock or Company Common Stock shall
\nbe changed into a different number of shares by reason of any reclassification,
\nrecapitalization, split-up, combination or exchange of shares, or any dividend
\npayable in stock or other securities shall be declared thereon with a record
\ndate within such period, or (ii) the number of shares of Company Common Stock on
\na fully diluted basis is in excess of that specified in Section 4.03 and
\ndisclosed in Section 4.03 of the Company Disclosure Schedule (regardless of
\nwhether such excess is a result of an additional issuance of capital stock or a
\ncorrection to such Sections) other than changes caused by issuances of Company
\nCommon Stock pursuant to the Company Stock Purchase Plan, then the Exchange
\nRatio established pursuant to the provisions of Section 3.01 shall be adjusted
\naccordingly to provide to Parent the same economic effect as contemplated by
\nthis Agreement prior to such reclassification, recapitalization, split-up,
\ncombination, exchange, dividend or increase.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF COMPANY<\/p>\n
Company hereby represents and warrants to Parent and Merger
\nSub, subject to the exceptions specifically disclosed in writing in the Company
\nDisclosure Schedule, all such exceptions to be referenced to a specific
\nrepresentation set forth in this Article IV or to otherwise be reasonably
\napparent to relate to representations hereof not specifically referenced, that:<\/p>\n
SECTION 4.01 Organization and Qualification; Subsidiaries<\/p>\n
(a) Company has been duly organized and is validly existing
\nand in good standing (to the extent applicable) under the laws of the State of
\nNew York and has the requisite corporate power and authority to own, lease and
\noperate its properties and to carry on its business as it is now being
\nconducted. Company is duly qualified or licensed to do business, and is in good
\nstanding (to the extent applicable), in each jurisdiction where the character of
\nthe properties owned, leased or operated by it or the nature of its business
\nmakes such qualification or licensing necessary, except for such failures to be
\nso qualified or licensed and in good standing that could not reasonably be
\nexpected to have, individually or in the aggregate, a Company Material Adverse
\nEffect.<\/p>\n
(b) Company does not own an equity interest in any
\ncorporation, partnership, joint venture arrangement or other business entity.<\/p>\n
SECTION 4.02 Certificate of Incorporation and Bylaws<\/p>\n
The copies of Company’s certificate of incorporation and
\nbylaws previously provided to Parent by Company are true, complete and correct
\ncopies thereof. Such certificate of<\/p>\n
12<\/p>\n
incorporation and bylaws are in full force and effect. Company is not in
\nviolation of any of the provisions of its certificate of incorporation or
\nbylaws.<\/p>\n
SECTION 4.03 Capitalization<\/p>\n
The authorized capital stock of Company consists of 50,000,000
\nshares of Company Common Stock and 5,000,000 shares of preferred stock, no par
\nvalue (“COMPANY PREFERRED STOCK”). As of the date hereof, (i) 15,534,000 shares
\nof Company Common Stock are issued and outstanding, all of which are validly
\nissued, fully paid and nonassessable, (ii) no shares of Company Common Stock are
\nheld in the treasury of Company, (iii) 2,961,000 shares of Company Common Stock
\nare reserved for future issuance pursuant to Company Stock Options, (iv)
\n1,000,000 shares of Company Common Stock are reserved for issuance under the
\nCompany Stock Purchase Plan and (v) no shares of Company Preferred Stock are
\noutstanding. The name of each holder of a Company Stock Option as of the date
\nhereof, the grant date of each Company Stock Option, the number of shares of
\nCompany Common Stock for which each Company Stock Option is exercisable, the
\nexercise price of each Company Stock Option and the vesting schedule of each
\nCompany Stock Option are set forth in Section 4.03 of the Company Disclosure
\nSchedule. Except for shares of Company Common Stock issuable pursuant to Company
\nStock Plan or the Company Stock Purchase Plan, there are no options, warrants or
\nother rights, agreements, arrangements or commitments of any character to which
\nCompany is a party or by which Company is bound relating to the issued or
\nunissued capital stock of Company or obligating Company to issue or sell any
\nshares of capital stock of, or other equity interests in, Company. All shares of
\nCompany Common Stock subject to issuance as aforesaid, upon issuance prior to
\nthe Effective Time on the terms and conditions specified in the instruments
\npursuant to which they are issuable, will be duly authorized, validly issued,
\nfully paid and nonassessable. There are no outstanding contractual obligations
\nof Company to repurchase, redeem or otherwise acquire any shares of Company
\nCommon Stock. There are no material outstanding contractual obligations of
\nCompany to provide funds to, or make any material investment (in the form of a
\nloan, capital contribution or otherwise) in, any entity or Person.<\/p>\n
SECTION 4.04 Authority Relative to This Agreement<\/p>\n
Company has all necessary corporate power and authority to
\nexecute and deliver this Agreement, to perform its obligations hereunder and to
\nconsummate the transactions contemplated hereby. The execution and delivery of
\nthis Agreement by Company and the consummation by Company of the transactions
\ncontemplated hereby have been duly and validly authorized by all necessary
\ncorporate action, and no other corporate proceedings on the part of Company are
\nnecessary to authorize this Agreement or to consummate the transactions
\ncontemplated hereby (other than, with respect to the Merger, the approval of
\nthis Agreement by the holders of two-thirds (2\/3) of the outstanding shares of
\nCompany Common Stock entitled to vote with respect thereto at the Company
\nShareholders’ Meeting, and the filing and recordation of the Certificate of
\nMerger as required by New York Law). This Agreement has been duly executed and
\ndelivered by Company and, assuming the due authorization, execution and delivery
\nby the other parties hereto, constitutes legal, valid and binding obligations of
\nCompany, enforceable against Company in accordance with its terms, subject to
\nthe effect of any applicable bankruptcy, moratorium, insolvency, reorganization
\nor other similar law affecting the<\/p>\n
13<\/p>\n
enforceability of creditors’ rights generally and to the effect of general
\nprinciples of equity which may limit the availability of remedies (whether in a
\nproceeding at law or in equity).<\/p>\n
SECTION 4.05 No Conflict; Required Filings and Consents<\/p>\n
(a) The execution and delivery of this Agreement by Company do
\nnot, and the performance by Company of its obligations hereunder and the
\nconsummation of the Merger will not, (i) conflict with or violate any provision
\nof the certificate of incorporation or bylaws of Company, (ii) assuming that all
\nfilings and notifications described in Section 4.05(b) have been made, conflict
\nwith or violate any Law applicable to Company or by which any material property
\nor asset of Company is bound or affected or (iii) result in any material breach
\nof or constitute a material default (or an event which with the giving of notice
\nor lapse of time or both could reasonably be expected to become a default)
\nunder, or give to others any right of termination, amendment, acceleration or
\ncancellation of, or result in the creation of a lien or other encumbrance on any
\nmaterial property or asset of Company pursuant to, any material note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit, franchise or
\nother instrument or obligation.<\/p>\n
(b) The execution and delivery of this Agreement by Company do
\nnot, and the performance by Company of its obligations hereunder and the
\nconsummation of the Merger will not, require any consent, approval,
\nauthorization or permit of, or filing by Company with or notification by Company
\nto, any Governmental Entity, except pursuant to applicable requirements of the
\nExchange Act, the Securities Act, Blue Sky Laws, the rules and regulations of
\nthe NNM, state takeover laws, the premerger notification requirements of the HSR
\nAct, and the filing and recordation of the Certificate of Merger as required by
\nNew York Law.<\/p>\n
SECTION 4.06 Permits; Compliance with Laws<\/p>\n
Company is in possession of all material franchises, grants,
\nauthorizations, licenses, establishment registrations, product listings,
\npermits, easements, variances, exceptions, consents, certificates,
\nidentification and registration numbers, approvals and orders of any
\nGovernmental Entity necessary for Company to own, lease and operate its
\nproperties or to produce, store, distribute and market its products or otherwise
\nto carry on its business as it is now being conducted (collectively, the
\n“COMPANY PERMITS”), and, as of the date of this Agreement, none of the Company
\nPermits has been suspended or cancelled nor is any such suspension or
\ncancellation pending or, to the Knowledge of Company, threatened. Company is not
\nin conflict in any material respect with, or in material default or violation
\nof, (i) any Law applicable to Company or by which any property or asset of
\nCompany is bound or affected or (ii) any Company Permits. Section 4.06 of the
\nCompany Disclosure Schedule sets forth, as of the date of this Agreement, all
\nactions, proceedings, investigations or surveys pending or, to the Knowledge of
\nCompany, threatened against Company that could reasonably be expected to result
\nin the suspension or cancellation of any other Company Permit. Since January 17,
\n1996, Company has not received from any Governmental Entity any written
\nnotification with respect to possible conflicts, defaults or violations of Laws.<\/p>\n
14<\/p>\n
SECTION 4.07 SEC Filings; Financial Statements<\/p>\n
(a) Company has timely filed all forms, reports, statements and
\ndocuments required to be filed by it (A) with the SEC and the NNM since November
\n12, 1999 (collectively, together with any such forms, reports, statements and
\ndocuments Company may file subsequent to the date hereof until the Closing, the
\n“COMPANY REPORTS”) and (B) with any other Governmental Entities. Each Company
\nReport (i) was prepared in all material respects in accordance with the
\nrequirements of the Securities Act, the Exchange Act or the rules and
\nregulations of the NNM, as the case may be, and (ii) did not at the time it was
\nfiled (or, in the case of registration statements filed under the Securities
\nAct, at the time of effectiveness) contain any untrue statement of a material
\nfact or omit to state a material fact required to be stated therein or necessary
\nin order to make the statements made therein, in the light of the circumstances
\nunder which they were made, not misleading. Each material form, report,
\nstatement and document referred to in clause (B) of this paragraph was prepared
\nin all material respects in accordance with the requirements of applicable Law.<\/p>\n
(b) Each of the financial statements (including, in each case, any
\nnotes thereto) contained in the Company Reports was prepared in accordance with
\nU.S. GAAP (except as may be permitted by Form 10-Q under the Exchange Act)
\napplied on a consistent basis throughout the periods indicated (except as may be
\nindicated in the notes thereto) and each presented fairly, in all material
\nrespects, the financial position of Company as at the respective dates thereof
\nand its results of operations, shareholders’ equity and cash flows for the
\nrespective periods indicated therein, except as otherwise noted therein
\n(subject, in the case of unaudited statements, to normal and recurring
\nimmaterial year-end adjustments).<\/p>\n
(c) Except as and to the extent set forth or reserved against on the
\nbalance sheet of Company as reported in the Company Reports, including the notes
\nthereto, Company has no liabilities or obligations of any nature (whether
\naccrued, absolute, contingent or otherwise) that would be required to be
\nreflected on a balance sheet or in notes thereto prepared in accordance with
\nU.S. GAAP, except for immaterial liabilities or obligations incurred in the
\nordinary course of business consistent with past practice since December 31,
\n1999.<\/p>\n
SECTION 4.08 Absence of Certain Changes or Events<\/p>\n
Since December 31, 1999, Company has conducted its business in all
\nmaterial respects only in the ordinary course consistent with past practice and,
\nsince such date, there has not been (i) any Company Material Adverse Effect,
\n(ii) any event that could reasonably be expected to prevent or materially delay
\nthe performance of Company’s obligations pursuant to this Agreement and the
\nconsummation of the Merger by Company, (iii) any material change by Company in
\nits accounting methods, principles or practices, (iv) any declaration, setting
\naside or payment of any dividend or distribution in respect of the shares of
\nCompany Common Stock or any redemption, purchase or other acquisition of any of
\nCompany’s securities, (v) except for changes in the ordinary course of business
\nconsistent with past practice that only affect non-officer employees of the
\nCompany, any increase in the compensation or benefits or establishment of any
\nbonus, insurance, severance, deferred compensation, pension, retirement, profit
\nsharing, stock option (including, without limitation, the granting of stock
\noptions, stock appreciation rights, performance awards or restricted stock
\nawards), stock purchase or other employee benefit<\/p>\n
15<\/p>\n
plan, or any other increase in the compensation payable or to become payable to
\nany employees, officers, consultants or directors of Company, (vi) any issuance
\nor sale of any stock, notes, bonds or other securities other than pursuant to
\nofferings registered under the Securities Act or pursuant to the exercise of
\noutstanding securities, or entering into any agreement with respect thereto,
\n(vii) any amendment to the Company’s certificate of incorporation or bylaws,
\n(viii) other than in the ordinary course of business consistent with past
\npractice, any (x) purchase, sale, assignment or transfer of any material assets,
\n(y) mortgage, pledge or existence of any lien, encumbrance or charge on any
\nmaterial assets or properties, tangible or intangible, except for liens for
\nTaxes not yet delinquent and such other liens, encumbrances or charges which do
\nnot, individually or in the aggregate, have a Company Material Adverse Effect,
\nor (z) waiver of any rights of material value or cancellation or any material
\ndebts or claims, (ix) any incurrence of any material liability (absolute or
\ncontingent), except for current liabilities and obligations incurred in the
\nordinary course of business consistent with past practice, (x) any incurrence of
\nany damage, destruction or similar loss, whether or not covered by insurance,
\nmaterially affecting the business or properties of Company, or (xi) any entering
\ninto any transaction of a material nature other than in the ordinary course of
\nbusiness, consistent with past practice.<\/p>\n
SECTION 4.09 Employee Benefit Plans; Labor Matters<\/p>\n
(a) The Company Disclosure Schedule lists each employee benefit fund,
\nplan, program, arrangement and contract (including, without limitation, any
\n“pension” plan, fund or program, as defined in Section 3(2) of ERISA, and any
\n“employee benefit plan,” as defined in Section 3(3) of ERISA and any plan,
\nprogram, arrangement or contract providing for severance; medical, dental or
\nvision benefits; life insurance or death benefits; disability benefits, sick pay
\nor other wage replacement; vacation, holiday or sabbatical; pension or
\nprofit-sharing benefits; stock options or other equity compensation; bonus or
\nincentive pay or other material fringe benefits), whether written or not
\n(“BENEFIT PLANS”), maintained, sponsored or contributed to or required to be
\ncontributed to by Company (the “COMPANY BENEFIT PLANS”). With respect to each
\nCompany Benefit Plan, Company has delivered or made available to Parent a true,
\ncomplete and correct copy of (i) such Company Benefit Plan (of, if not written,
\na written summary of its material terms) and the most recent summary plan
\ndescription, if any, related to such Company Benefit Plan, (ii) each trust
\nagreement or other funding arrangement, if any, relating to such Company Benefit
\nPlan, (iii) the most recent annual report (Form 5500), if any, filed with the
\nIRS with respect to such Company Benefit Plan (and, if the most recent annual
\nreport is a Form 5500R, the most recent Form 5500C filed with respect to such
\nCompany Benefit Plan), (iv) the most recent actuarial report or financial
\nstatement, if any, relating to such Company Benefit Plan and (v) the most recent
\ndetermination, notification, advisory or opinion letter, issued by the IRS with
\nrespect to such Company Benefit Plan and any pending request for such a
\ndetermination letter. Company nor, to the Knowledge of Company, any other person
\nor entity, has any express or implied commitment, whether legally enforceable or
\nnot, to modify, change or terminate any Company Benefit Plan, other than with
\nrespect to a modification, change or termination required by ERISA or the Code.<\/p>\n
(b) Each Company Benefit Plan has been administered in all material
\nrespects in accordance with its terms and all applicable laws, including ERISA
\nand the Code, and all contributions required to be made under the terms of any
\nof the Company Benefit Plans as of the date of this Agreement have been timely
\nmade or, if not yet due, have been properly reflected on<\/p>\n
16<\/p>\n
the most recent balance sheet filed or incorporated by reference in the Company
\nReports prior to the date of this Agreement. With respect to the Company Benefit
\nPlans, no event has occurred and, to the Knowledge of Company, there exists no
\ncondition or set of circumstances in connection with which Company could be
\nsubject to any material liability (other than for routine benefit liabilities)
\nunder the terms of, or with respect to, such Company Benefit Plans, ERISA, the
\nCode or any other applicable Law.<\/p>\n
(c) Company on behalf of itself and each Company ERISA Affiliate (as
\ndefined below) hereby represents that: (i) each Company Benefit Plan which is
\nintended to qualify under Section 401(a), Section 401(k), Section 401(m) or
\nSection 4975(e)(5) of the Code has received a favorable determination,
\nnotification, advisory or opinion letter from the IRS as to its qualified
\nstatus, and each trust established in connection with any Company which is
\nintended to be exempt from federal income taxation under Section 501(a) of the
\nCode has received a determination letter from the IRS that it is so exempt, and
\nto the Knowledge of Company no fact or event has occurred that could adversely
\naffect the qualified status of any such Company Benefit Plan or the exempt
\nstatus of any such trust; (ii) to the Knowledge of Company there has been no
\nprohibited transaction (within the meaning of Section 406 of ERISA or Section
\n4975 of the Code and other than a transaction that is exempt under a statutory
\nor administrative exemption) with respect to any Company Plan that could result
\nin liability to the Company and (iii) each Company Benefit Plan can be amended,
\nterminated or otherwise discontinued after the Effective Time in accordance with
\nits terms, without material liability (other than (A) liability for ordinary
\nadministrative expenses typically incurred in a termination event or (B)
\nliability for the accrued benefits as of the date of such termination to the
\nextent that either there are sufficient assets set aside in a trust or insurance
\ncontract to satisfy such liability or such liability is reflected on the most
\nrecent consolidated balance sheet filed or incorporated by reference in the
\nCompany Reports prior to the date of this Agreement. No suit, administrative
\nproceeding, action or other litigation has been brought, or to the Knowledge of
\nCompany is threatened, against or with respect to any such Company Benefit Plan,
\nincluding any audit or inquiry by the IRS or United States Department of Labor
\n(other than routine benefits claims).<\/p>\n
(d) No Company Benefit Plan is a multiemployer pension plan (as defined
\nin Section 3(37) of ERISA) or other pension plan subject to Title IV of Part 3
\nof Title I of ERISA or Section 412 of the Code and neither the Company nor any
\nother trade or business (whether or not incorporated) that is under “common
\ncontrol” with Company (within the meaning of ERISA Section 4001) or with respect
\nto which Company could otherwise incur liability under Title IV of ERISA (a
\n“COMPANY ERISA AFFILIATE”) has sponsored or contributed to or been required to
\ncontribute to a multiemployer pension plan or other pension plan subject to
\nTitle IV of ERISA. No material liability under Title IV of ERISA has been
\nincurred by Company or any Company ERISA Affiliate that has not been satisfied
\nin full, and no condition exists that presents a material risk to Company of
\nincurring or being subject (whether primarily, jointly or secondarily) to a
\nmaterial liability thereunder. None of the assets of Company is, or may
\nreasonably be expected to become, the subject of any lien arising under ERISA or
\nSection 412(n) of the Code.<\/p>\n
(e) Company has delivered to Parent true, complete and correct copies
\nof (i) all employment agreements with officers and all consulting agreements of
\nCompany providing for annual compensation in excess of $100,000, (ii) all
\nseverance plans, agreements, programs and policies of Company with or relating
\nto their respective employees, directors or<\/p>\n
17<\/p>\n
consultants, and (iii) all plans, programs, agreements and other arrangements of
\nCompany with or relating to their respective employees, directors or consultants
\nwhich contain “change of control” provisions. No payment or benefit which may be
\nrequired to be made by Company or which otherwise may be required to be made
\nunder the terms of any Company Benefit Plan or other arrangement will constitute
\na parachute payment under Code Section 280(G)(1), and the consummation of the
\ntransactions contemplated by this Agreement will not, alone or in conjunction
\nwith any other possible event (including termination of employment), (i) entitle
\nany current or former employee or other service provider of Company to severance
\nbenefits or any other payment, compensation or benefit (including forgiveness of
\nindebtedness), except as expressly provided by this Agreement, or (ii)
\naccelerate the time of payment or vesting, or increase the amount of
\ncompensation or benefit due any such employee or service provider.<\/p>\n
(f) Company is not a party to, and has no obligations under or with
\nrespect to, any collective bargaining or other labor union contract applicable
\nto persons employed by Company and no collective bargaining agreement is being
\nnegotiated by Company or any person or entity that may obligate the Company
\nthereunder. As of the date of this Agreement, there is no labor dispute, strike
\nor work stoppage against Company pending or, to the Knowledge of Company,
\nthreatened which may interfere with the respective business activities of
\nCompany. As of the date of this Agreement, to the Knowledge of Company, none of
\nCompany or any of its representatives or employees has committed any unfair
\nlabor practice in connection with the operation of the respective businesses of
\nCompany, and there is no charge or complaint against Company by the National
\nLabor Relations Board or any comparable Governmental Entity pending or
\nthreatened in writing.<\/p>\n
(g) Except as required by Law, no Company Benefit Plan provides any of
\nthe following retiree or post-employment benefits to any person: medical,
\ndisability or life insurance benefits. To the Knowledge of Company, Company and
\nthe Company ERISA Affiliates are in compliance in all material respects with (i)
\nthe requirements of the applicable health care continuation and notice
\nprovisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
\namended (“COBRA”) and the regulations (including proposed regulations)
\nthereunder and (ii) the applicable requirements of the Health Insurance
\nPortability and Accountability Act of 1996, as amended, and the regulations
\n(including the proposed regulations) thereunder.<\/p>\n
SECTION 4.10 Certain Tax Matters<\/p>\n
Neither Company nor, to the Knowledge of Company, any of its Affiliates
\nhas taken or agreed to take any action (other than actions contemplated by this
\nAgreement) that could be expected to prevent the Merger from constituting a
\n“reorganization” under Section 368 of the Code. Company is not aware of any
\nagreement or plan to which Company or any of its Affiliates is a party or other
\ncircumstances relating to Company or any of its Affiliates that could reasonably
\nbe expected to prevent the Merger from so qualifying as a reorganization under
\nSection 368 of the Code.<\/p>\n
18<\/p>\n
SECTION 4.11 Contracts<\/p>\n
Except for the contracts and agreements described in Section 4.11 of
\nthe Company Disclosure Schedule (collectively, the “LISTED CONTRACTS”), Company
\nis not a party to any of the following:<\/p>\n
(a) any list owners agreement, purchase agreement and bill of sale
\nrelating to the purchase of e-mail user lists, customer marketing agreement (or
\nsimilar agreement with brokers) or agreement with non-standard payment terms, in
\neach case, which ranks in Company’s 25 largest customer or supplier
\nrelationships, as measured by dollar value, for each of these categories of
\nagreements;<\/p>\n
(b) any continuing contract for the purchase of materials, supplies,
\nequipment or services involving in the case of any such contact more than
\n$100,000 over the life of the contract;<\/p>\n
(c) any contract that expires more than one year after the date of this
\nAgreement or any contract that may be renewed at the option of any person other
\nthan the Company so as to expire more than one year after the date of this
\nAgreement;<\/p>\n
(d) any trust indenture, mortgage, promissory note, loan agreement or
\nother contract for the borrowing of money, any currency exchange, commodities or
\nother hedging arrangement or any leasing transaction of the type required to be
\ncapitalized in accordance with GAAP in excess of $100,000;<\/p>\n
(e) any contract for capital expenditures in excess of $100,000 in the
\naggregate;<\/p>\n
(f) any contract limiting the freedom of Company to engage in any line
\nof business or to compete with any other corporation, partnership, limited
\nliability company, trust, individual or other entity, or any confidentiality,
\nsecrecy or non-disclosure contract or any contract that may be terminable as a
\nresult of Parent’s status as a competitor of any party to such contract;<\/p>\n
(g) any contract pursuant to which Company is a lessor of any
\nmachinery, equipment, motor vehicles, office furniture, fixtures or other
\npersonal property, pursuant to which payments in excess of $100,000 remain
\noutstanding;<\/p>\n
(h) any contract with an Affiliate;<\/p>\n
(i) any agreement of guarantee, support, indemnification, assumption or
\nendorsement of, or any similar commitment with respect to, the obligations,
\nliabilities (whether accrued, absolute, contingent or otherwise) or indebtedness
\nof any other person other than customary customer agreements made in the
\nordinary course of business; or<\/p>\n
(j) any employment contract, arrangement or policy (including without
\nlimitation any collective bargaining contract or union agreement) which may not
\nbe immediately terminated without penalty (or any augmentation or acceleration
\nof benefits).<\/p>\n
19<\/p>\n
Company has performed all of the obligations required to be performed
\nby it and is entitled to all benefits under, and is not alleged to be in default
\nin respect of any Listed Contract. Each of the Listed Contracts is valid and
\nbinding and in full force and effect, and there exists no default or event of
\ndefault or event, occurrence, condition or act, with respect to Company, or to
\nthe Knowledge of Company, with respect to the other contracting party, which,
\nwith the giving of notice, the lapse of the time or the happening of any other
\nevent or conditions, would become a default or event of default under any Listed
\nContract. True, correct and complete copies of all Listed Contracts have been
\ndelivered to Parent.<\/p>\n
SECTION 4.12 Litigation<\/p>\n
There is no suit, claim, action, proceeding or investigation pending
\nor, to the Knowledge of Company, threatened against Company that could
\nreasonably be expected to have, individually or in the aggregate, a Company
\nMaterial Adverse Effect or materially interfere with Company’s ability to
\nconsummate the transactions contemplated hereby, and, to the Knowledge of
\nCompany, there are no existing facts or circumstances that could reasonably be
\nexpected to result in such a suit, claim, action, proceeding or investigation.
\nCompany is not aware of any facts or circumstances which could reasonably be
\nexpected to result in the denial of insurance coverage under policies issued to
\nCompany in respect of such suits, claims, actions, proceedings and
\ninvestigations, except in any case as could not reasonably be expected to have,
\nindividually or in the aggregate, a Company Material Adverse Effect. Company is
\nnot subject to any outstanding order, writ, injunction or decree which could
\nreasonably be expected to have, individually or in the aggregate, a Company
\nMaterial Adverse Effect or materially interfere with Company’s ability to
\nconsummate the transactions contemplated hereby.<\/p>\n
SECTION 4.13 Environmental Matters<\/p>\n
Except as could not reasonably be expected to have, individually or in
\nthe aggregate, a Company Material Adverse Effect, (i) Company is in compliance
\nwith all applicable Environmental Laws and all Company Permits required by
\nEnvironmental Laws; (ii) all past noncompliance of Company with Environmental
\nLaws or Environmental Permits has been resolved without any pending, ongoing or
\nfuture obligation, cost or liability; and (iii) Company has not released a
\nHazardous Material at, or transported a Hazardous Material to or from, any real
\nproperty currently or formerly owned, leased or occupied by Company in violation
\nof any Environmental Law.<\/p>\n
SECTION 4.14 Intellectual Property<\/p>\n
(a) All patents (including, without limitation, all U.S. and foreign
\npatents, patent applications, patent disclosures, and all divisions,
\ncontinuations, continuations-in-part, reissues, re-examinations and extensions
\nthereof), design rights, trademarks, trade names and service marks (whether or
\nnot registered), trade dress, Internet domain names, copyrights (whether or not
\nregistered) and any renewal rights therefor, technology, supplier lists, trade
\nsecrets, know-how, computer software programs or applications in both source and
\nobject code form, technical documentation of such software programs, statistical
\nmodels, supplier lists, e-mail lists, inventions, sui generis database rights,
\ndatabases, data (“TECHNICAL DOCUMENTATION”), registrations and applications for
\nany of the foregoing and all other tangible or intangible<\/p>\n
20<\/p>\n
proprietary information or materials that are or have been used (including
\nwithout limitation in the development of) Company’s business and\/or in any
\nproduct, technology or process (i) currently being or formerly manufactured,
\npublished, marketed or used by Company or (ii) previously or currently under
\ndevelopment for possible future manufacturing, publication, marketing or other
\nuse by Company are hereinafter referred to as the “COMPANY INTELLECTUAL
\nPROPERTY.”<\/p>\n
(b) Section 4.14(b) of the Company Disclosure Schedule contains a true
\nand complete list of Company’s patents, patent applications, registered
\ntrademarks, trademark applications, common law trademarks, trade names,
\nregistered service marks, service mark applications, common law service marks,
\nmaterial Internet domain names, Internet domain name applications, copyright
\nregistrations and applications and other filings and formal actions made or
\ntaken pursuant to Federal, state, local and foreign laws by Company to protect
\nits interests in Company Intellectual Property, and includes details of all due
\ndates for further filings, maintenance, payments or other actions falling due in
\nrespect of Company Intellectual Property within twelve (12) months of the
\nClosing Date. All of Company’s patents, patent applications, registered
\ntrademarks, trademark applications, registered service marks and service mark
\nregistrations, and registered copyrights remain in good standing with all fees
\nand filings due as of the Closing Date duly made and the due dates specified in
\nthe Company Disclosure Schedule are accurate and complete in all material
\nrespects.<\/p>\n
(c) Section 4.14(c) of the Company Disclosure Schedule contains a true
\nand complete list of the registrations that Company has obtained anywhere in the
\nWorld in relation to the processing of data. Company has made all such
\nregistrations which it is required to have made and is in good standing with
\nrespect to such registrations with all fees due as of the Effective Time duly
\nmade. Company has received Valid Consents from all persons who have provided
\npersonal information which are sufficient to give Company (i) the right to use
\nsuch personal information for the purposes of conducting Company’s current
\nactivities, and Company’s future activities to the extent such future activities
\nare already planned, and (ii) the right to assign the personal information and
\nthe applicable consents to Parent. For the purposes of this Section 4.14(c),
\n“VALID CONSENTS” shall mean consents obtained (i) for persons aged 13 and over,
\nusing Company’s double opt-in method by which the persons providing personal
\ninformation to Company have both (a) indicated their consent by checking a box
\nwhich signifies his or her desire to have his or her personal information
\nregistered with the site and used by Company, and (b) thereafter responded to a
\nconfirmatory e-mail message to signify his or her desire to have his or her
\npersonal information registered with the site and used by Company and (ii) for
\npersons under the age of 13, in accordance with the Children’s Online Privacy
\nProtection Act of 1998. Company has not used any personal information without or
\nbeyond the scope of a Valid Consent. Company has placed all personal information
\nrelating to persons who have signified that they do not grant or later revoke a
\nValid Consent in an unsubscribed archive file where such data is stored but not
\nused by Company. Company has not collected and maintains no personal information
\nabout persons outside the United States in violation of any local, state or
\nfederal law.<\/p>\n
(d) Company Intellectual Property consists solely of items and rights
\nwhich are: (i) owned by Company; (ii) in the public domain; or (iii) rightfully
\nused by Company pursuant to a valid license (the “COMPANY LICENSED INTELLECTUAL
\nPROPERTY”), the parties and date<\/p>\n
21<\/p>\n
of each such license agreement (each, a “LICENSE AGREEMENT”) being set forth on
\nSection 4.14(c) of the Company Disclosure Schedule. Company has all rights in
\nCompany Intellectual Property necessary to carry out Company’s current
\nactivities (and had all rights necessary to carry out its former activities at
\nthe time such activities were being conducted), including without limitation, to
\nthe extent required to carry out such activities, rights to make, use,
\nreproduce, modify, adopt, create derivative works based on, translate,
\ndistribute (directly and indirectly), transmit, display and perform publicly,
\nlicense, rent and lease and, other than with respect to the Company Licensed
\nIntellectual Property, assign and sell, the Company Intellectual Property.<\/p>\n
(e) The reproduction, manufacturing, distribution, licensing,
\nsublicensing, sale, use or any other exercise of rights in any Company
\nIntellectual Property, product, service, work, technology or process as now used
\nor offered or proposed for use, licensing or sale by Company does not infringe
\non any copyright, trade secret, trademark, service mark, trade name, trade
\ndress, firm name, Internet domain name, logo, mask work or other proprietary or
\npersonal right of any person or, to the actual knowledge of Company, the patent
\nof any person anywhere in the world. No claims (i) challenging the validity,
\neffectiveness or, other than with respect to the Company Licensed Intellectual
\nProperty, ownership by Company of any of the Company Intellectual Property, or
\n(ii) to the effect that the use, distribution, licensing, sublicensing, sale or
\nany other exercise of rights in any product, service, work, technology or
\nprocess as now used or offered or proposed for use, licensing, sublicensing, use
\nor sale by Company infringes or will infringe on any intellectual property or
\nother proprietary or personal right of any person have been asserted or, to the
\nKnowledge of Company, are threatened by any person, nor are there, to the
\nKnowledge of Company, any valid grounds for any bona fide claim of any such
\nkind. All registered, granted or issued patents, trademarks, Internet domain
\nnames and copyrights held by Company are subsisting and, to the Knowledge of
\nCompany, enforceable. To the Knowledge of Company, there is no unauthorized use,
\ninfringement or misappropriation of any of the Company Intellectual Property by
\nany third party, employee or former employee.<\/p>\n
(f) All personnel, including employees, agents, consultants and
\ncontractors, who have contributed to or participated in the conception and
\ndevelopment of the Company Intellectual Property on behalf of Company, have
\nexecuted nondisclosure agreements in the form set forth in Section 4.14(f) of
\nthe Company Disclosure Schedule and either (i) have been a party to a
\n“work-for-hire” arrangement or agreements with Company in accordance with
\napplicable national and state law that has accorded Company full, effective,
\nexclusive and original ownership of all tangible and intangible property thereby
\narising, or (ii) have executed appropriate instruments of assignment in favor or
\nCompany as assignee that have conveyed to Company effective and exclusive
\nownership of all tangible and intangible property thereby arising.<\/p>\n
(g) Company is not, nor as a result of the execution or delivery of
\nthis Agreement, or performance of Company’s obligations hereunder, will Company
\nbe, in violation of any license, sublicense, agreement or instrument relating to
\nCompany Intellectual Property to which Company is a party or otherwise bound,
\nnor will execution or delivery of this Agreement, or performance of Company’s
\nobligations hereunder, cause the diminution, termination or forfeiture of any
\nCompany Intellectual Property.<\/p>\n
22<\/p>\n
(h) Section 4.14(h) of the Company Disclosure Schedule contains a true
\nand complete list of all of Company’s software programs (the “COMPANY SOFTWARE
\nPROGRAMS”). Except with respect to software or technology licensed by Company
\n(to which Company holds appropriate and valid licenses), Company owns full and
\nunencumbered right and good, valid and marketable title to such Company Software
\nPrograms free and clear of all mortgages, pledges, liens, security interests,
\nconditional sales agreements, encumbrances or charges of any kind.<\/p>\n
(i) The source code and system documentation relating to the Company
\nSoftware Programs (i) have at all times been maintained in strict confidence,
\n(ii) have been disclosed by Company only to employees who have a “need to know”
\nthe contents thereof in connection with the performance of their duties to
\nCompany and who have executed the nondisclosure agreements referred to in
\nSection 4.14(f), and (iii) have not been disclosed to any third party, except
\nthose third parties set forth in Section 4.14(i) of the Company Disclosure
\nSchedule who have executed nondisclosure agreements with Company.<\/p>\n
(j) Company has taken all reasonable steps, in accordance with normal
\nindustry practice, to preserve and maintain complete notes and records relating
\nto Company Intellectual Property to cause the same to be readily understood,
\nidentified and available.<\/p>\n
(k) The Company Software Programs (i) have been designed to ensure year
\n2000 compatibility, which includes, but is not limited to, date data century
\nrecognition, and calculations that accommodate same century and multi-century
\nformulas and date values; (ii) operate and will operate in accordance with their
\nspecifications prior to, during and after the calendar year 2000 AD; and (iii)
\nshall not end abnormally or provide invalid or incorrect results as a result of
\ndate data, specifically including date data which represents or references
\ndifferent centuries or more than one century.<\/p>\n
(l) The Company Intellectual Property is free and clear of any and all
\nmortgages, pledges, liens, security interests, conditional sale agreements,
\ncharges or encumbrances of any kind.<\/p>\n
(m) Company does not owe any royalties or other payments to third
\nparties in respect of Company Intellectual Property. All royalties or other
\npayments set forth in Section 4.14(m) of the Company Disclosure Schedule that
\nhave accrued prior to the Effective Time have been paid.<\/p>\n
(n) Company uses commercially reasonable efforts to regularly scan the
\nCompany Software Programs and the Company Intellectual Property with
\n“best-in-class” virus detection software. To the Knowledge of Company, the
\nCompany Software Programs and other Company Intellectual Property contain no
\n“VIRUSES.” For the purposes of this Agreement, “VIRUS” means any computer code
\nintentionally designed to disrupt, disable or harm in any manner the operation
\nof any software or hardware. To the Knowledge of Company, none of the foregoing
\ncontains any worm, bomb, backdoor, clock, timer, or other disabling device code,
\ndesign or routine which causes the software to be erased, inoperable, or
\notherwise incapable of being used, either automatically or upon command by any
\nparty.<\/p>\n
23<\/p>\n
(o) Company has implemented all reasonable steps which are known in the
\ninformation systems industry in the physical and electronic protection of its
\ninformation assets from unauthorized disclosure, use or modification. Section
\n4.14(o) of the Company Disclosure Schedule sets forth (i) each breach of
\nsecurity of which Company is aware, (ii) its known or anticipated consequences,
\nand (iii) the steps Company has taken to remedy such breach.<\/p>\n
SECTION 4.15 Taxes<\/p>\n
(a) Company and any consolidated, combined, unitary or aggregate group
\nfor Tax purposes of which Company is or has been a member, have properly
\ncompleted and timely filed all Tax Returns required to be filed by them and have
\npaid all Taxes shown thereon to be due. Company has provided adequate accruals
\nin accordance with generally accepted accounting principles in its latest
\nfinancial statements included in the Company Reports for any Taxes that have not
\nbeen paid, whether or not shown as being due on any Tax Returns. Other than
\nTaxes incurred in the ordinary course of business, Company has no material
\nliability for unpaid Taxes accruing after the date of the Company’s latest
\nfinancial statements included in the Company Reports.<\/p>\n
(b) There is (i) no material claim for Taxes that is a lien against the
\nproperty of Company or is being asserted against Company other than liens for
\nTaxes not yet due and payable, (ii) no audit of any Tax Return of Company being
\nconducted by a Tax Authority; (iii) no extension of the statute of limitations
\non the assessment of any Taxes granted by Company and currently in effect, and
\n(iv) no agreement, contract or arrangement to which Company is a party that may
\nresult in the payment of any amount that would not be deductible by reason of
\nSection 280G or Section 404 of the Code.<\/p>\n
(c) There has been no change in ownership of Company that has caused
\nthe utilization of any losses of such entities to be limited pursuant to Section
\n382 of the Code, and any loss carryovers reflected on the latest financial
\nstatements included in the Company Reports are properly computed and reflected.<\/p>\n
(d) Company has not been and will not be required by reason of the
\nMerger to include any material adjustment in Taxable income for any Tax period
\n(or portion thereof) pursuant to Section 481 or 263A of the Code or any
\ncomparable provision under state or foreign Tax laws as a result of
\ntransactions, events or accounting methods employed prior to the Merger.<\/p>\n
(e) Company has not filed and will not file any consent to have the
\nprovisions of paragraph 341(f)(2) of the Code (or comparable provisions of any
\nstate Tax laws) apply to Company.<\/p>\n
(f) Company is not a party to any Tax sharing or Tax allocation
\nagreement nor does Company have any liability or potential liability to another
\nparty under any such agreement.<\/p>\n
(g) Company has not filed any disclosures under Section 6662 or
\ncomparable provisions of state, local or foreign law to prevent the imposition
\nof penalties with respect to any Tax reporting position taken on any Tax Return.<\/p>\n
24<\/p>\n
(h) Company has not ever been a member of a consolidated, combined or
\nunitary group of which Company was not the ultimate parent corporation.<\/p>\n
(i) Company has in its possession receipts for any Taxes paid to
\nforeign Tax authorities. Company has not ever been a “personal holding company”
\nwithin the meaning of Section 542 of the Code or a “United Sates real property
\nholding corporation” within the meaning of Section 897 of the Code.<\/p>\n
SECTION 4.16 Insurance<\/p>\n
Company is presently insured, and since its inception has been insured,
\nagainst such risks as companies engaged in a similar business would, in
\naccordance with good business practice, customarily be insured. The policies of
\nfire, theft, liability and other insurance maintained with respect to the assets
\nor businesses of Company, in Company’s reasonable estimation, provide adequate
\ncoverage against loss. Company has heretofore furnished to Parent a complete and
\ncorrect list as of the date hereof of all insurance policies maintained by
\nCompany, and has made available to Parent complete and correct copies of all
\nsuch policies, together with all riders and amendments thereto. All such
\npolicies are in full force and effect and all premiums due thereon have been
\npaid to the date hereof. Company has complied in all material respects with the
\nterms of such policies.<\/p>\n
SECTION 4.17 Properties<\/p>\n
Company has good and marketable title, free and clear of all material
\nmortgages, liens, pledges, charges or other encumbrances to all their material
\ntangible properties and assets, whether tangible or intangible, real, personal
\nor mixed, reflected in the Company’s financial statements contained in the
\nCompany’s Annual Report on Form 10-K for the fiscal year ended December 31,
\n1999, as being owned by Company as of the date thereof, other than (i) any
\nproperties or assets that have been sold or otherwise disposed of in the
\nordinary course of business since the date of such financial statements, (ii)
\nliens disclosed in the notes to such financial statements, and (iii) liens
\narising in the ordinary course of business after the date of such financial
\nstatements. All buildings, and all fixtures, equipment and other property and
\nassets that are material to its business on a consolidated basis, held under
\nleases or sub-leases by Company are held under valid instruments enforceable in
\naccordance with their respective terms, subject to applicable laws of
\nbankruptcy, insolvency or similar laws relating to creditors’ rights generally
\nand to general principles of equity (whether applied in a proceeding in law or
\nequity). Substantially all of Company’s equipment in regular use which is
\nmaterial to the operation of Company has been reasonably maintained and is in
\nserviceable condition, reasonable wear and tear excepted.<\/p>\n
SECTION 4.18 Affiliates<\/p>\n
Section 4.18 of the Company Disclosure Schedule sets forth the names
\nand addresses of each person who is, in Company’s reasonable judgment, an
\nAffiliate (as such term is used in Rule 145 under the Securities Act) of
\nCompany.<\/p>\n
25<\/p>\n
SECTION 4.19 Opinion of Financial Advisor<\/p>\n
BancBoston Robertson Stephens Inc. (“ROBERTSON STEPHENS”) has delivered
\nto the board of directors of Company its written opinion to the effect that, as
\nof the date hereof, the Exchange Ratio is fair to the holders of shares of
\nCompany Common Stock from a financial point of view.<\/p>\n
SECTION 4.20 Brokers<\/p>\n
No broker, finder or investment banker (other than Robertson Stephens
\nand Friedman, Billings, Ramsey & Co., Inc.) is entitled to any brokerage,
\nfinder’s or other fee or commission in connection with the Merger based upon
\narrangements made by or on behalf of Company. Company has heretofore made
\navailable to Parent true, complete and correct copies of all agreements between
\nCompany and Robertson Stephens pursuant to which such firm would be entitled to
\nany payment relating to the Merger.<\/p>\n
SECTION 4.21 Certain Business Practices<\/p>\n
Neither Company nor any directors, officers, agents or employees of
\nCompany (in their capacities as such) has (i) used any funds for unlawful
\ncontributions, gifts, entertainment or other unlawful expenses relating to
\npolitical activity, (ii) made any unlawful payment to foreign or domestic
\ngovernment officials or employees or to foreign or domestic political parties or
\ncampaigns or violated any provision of the Foreign Corrupt Practices Act of
\n1977, as amended, or (iii) made any other unlawful payment.<\/p>\n
SECTION 4.22 Section 912 of New York Law Not Applicable<\/p>\n
The board of directors of Company has approved the Merger, this
\nAgreement and the Shareholders’ Agreement, and such approval is sufficient to
\nrender inapplicable to the Merger, this Agreement and the Shareholders’
\nAgreement and the transactions contemplated by this Agreement and the
\nShareholders’ Agreement the provisions of Section 912 of New York Law. To the
\nKnowledge of Company, no other state takeover statute or similar statute or
\nregulation applies or purports to apply to the Merger, this Agreement, the
\nShareholders’ Agreement or the transactions contemplated by this Agreement and
\nthe Shareholders’ Agreement.<\/p>\n
SECTION 4.23 Business Activity Restriction<\/p>\n
There is no non-competition or other similar agreement, commitment,
\njudgment, injunction, order or decree to which Company is a party or subject to
\nthat has or could reasonably be expected to have the effect of prohibiting or
\nimpairing the conduct of business by Company in any material respect. Company
\nhas not entered into any agreement under which Company is restricted in any
\nmaterial respect from selling, licensing or otherwise distributing any of its
\ntechnology or products to, or providing services to, customers or potential
\ncustomers or any class of customers, in any geographic area, during any period
\nof time or in any segment of the market or line of business.<\/p>\n
26<\/p>\n
SECTION 4.24 Privacy<\/p>\n
Company is, and has always been, in compliance with its then-current
\nprivacy policy, including those posted on Company’s Web site(s). Company has
\nconducted its business and maintained its data at all times in accordance with
\n(i) the standards promulgated by the Online Privacy Alliance, (ii) the standards
\npromulgated by the Direct Marketing Association, and (iii) all applicable
\nFederal, state and other laws, including, but not limited to, those relating to
\nthe use of information collected from or about consumers. Company is, and has
\nalways been, in compliance with its customers’ privacy policies, when required
\nto do so by contract.<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT<\/p>\n
Parent hereby represents and warrants to Company that:<\/p>\n
SECTION 5.01 Organization and Qualification; Subsidiaries<\/p>\n
Parent and Merger Sub have each been duly organized and each is validly
\nexisting and in good standing (to the extent applicable) under the laws of the
\njurisdiction of its incorporation or organization, as the case may be, and has
\nthe requisite corporate power and authority and all necessary governmental
\napprovals to own, lease and operate its properties and to carry on its business
\nas it is now being conducted. Each of Parent and Merger Sub is duly qualified or
\nlicensed to do business, and is in good standing (to the extent applicable), in
\neach jurisdiction where the character of the properties owned, leased or
\noperated by it or the nature of its business makes such qualification or
\nlicensing necessary, except for such failures to be so qualified or licensed and
\nin good standing that could not reasonably be expected to have, individually or
\nin the aggregate, a Parent Material Adverse Effect.<\/p>\n
SECTION 5.02 Certificate of Incorporation and Bylaws<\/p>\n
The copies of each of Parent’s and Merger Subs’ certificate of
\nincorporation and bylaws previously provided to Company by Parent are true,
\ncomplete and correct copies thereof. Such certificates of incorporation and
\nbylaws are in full force and effect.<\/p>\n
SECTION 5.03 Capitalization<\/p>\n
(a) The authorized capital stock of Parent consists of 400,000,000
\nshares of Parent Common Stock and 5,000,000 shares of preferred stock, no par
\nvalue (“PARENT PREFERRED STOCK”). As of the close of business on September 18,
\n2000, (i) 122,867,958 shares of Parent Common Stock are issued and outstanding,
\nall of which are validly issued, fully paid and nonassessable, (ii) no shares of
\nParent Common Stock are held in the treasury of the Company, (iii) no shares of
\nParent Common Stock are held by any directly owned or indirectly owned
\nsubsidiary of Parent, including Merger Sub (each a “PARENT SUBSIDIARY”), and
\n(iv) no shares of Parent Preferred Stock are issued and outstanding. Except for
\nthe shares of Parent Common Stock issuable pursuant to the Parent Stock Plans
\nand shares of Parent Common Stock issuable upon conversion of the Parent
\nConvertible Notes, there are no options, warrants or other rights, agreements,
\narrangements or commitments of any character to which Parent is a party or by<\/p>\n
27<\/p>\n
which Parent is bound relating to the issued or unissued capital stock of Parent
\nor any Parent Subsidiary or obligating Parent or any Parent Subsidiary to issue
\nor sell any shares of capital stock of, or other equity interests in, Parent or
\nany Parent Subsidiary. All shares of Parent Common Stock subject to issuance as
\naforesaid, upon issuance prior to the Effective Time on the terms and conditions
\nspecified in the instruments pursuant to which they are issuable, will be duly
\nauthorized, validly issued, fully paid and nonassessable. There are no
\noutstanding contractual obligations of Parent or any Parent Subsidiary to
\nrepurchase, redeem or otherwise acquire any shares of Parent Common Stock.
\nExcept as have been otherwise publicly disclosed by Parent, there are no
\nmaterial outstanding contractual obligations of Parent to provide funds to, or
\nmake any material investment (in the form of a loan, capital contribution or
\notherwise) in, any Parent Subsidiary or any other Person.<\/p>\n
(b) All of the shares of Parent Common Stock to be issued (i) in
\nconnection with the Merger, when issued in accordance with this Agreement, and
\n(ii) upon the conversion of any Company Stock Option into an option to purchase
\nshares of Parent Common Stock in accordance with Section 3.05, when issued upon
\nexercise thereof following the Effective Time, will be validly issued, fully
\npaid and nonassessable and will not be subject to preemptive rights or similar
\ncontractual rights granted by Parent.<\/p>\n
SECTION 5.04 Authority Relative to this Agreement<\/p>\n
Each of Parent and Merger Sub has all necessary corporate power and
\nauthority to execute and deliver this Agreement, to perform its obligations
\nhereunder and to consummate the transactions contemplated hereby. The execution
\nand delivery of this Agreement by each of Parent and Merger Sub and the
\nconsummation by Parent and Merger Sub of the transactions contemplated hereby
\nhave been duly and validly authorized by all necessary corporate action, and no
\nother corporate proceedings on the part of Parent or Merger Sub are necessary to
\nauthorize this Agreement or to consummate such transactions (other than the
\nconsent of Parent as sole shareholder of Merger Sub and the filing and
\nrecordation of the Certificate of Merger as required by New York Law). This
\nAgreement has been duly executed and delivered by each of Parent and Merger Sub
\nand, assuming the due authorization, execution and delivery by Company,
\nconstitutes a legal, valid and binding obligation of each of Parent and Merger
\nSub enforceable against Parent and Merger Sub in accordance with its terms,
\nsubject to the effect of any applicable bankruptcy, moratorium, insolvency,
\nreorganization or other similar law affecting the enforceability of creditors’
\nrights generally and to the effect of general principles of equity which may
\nlimit the availability of remedies (whether in a proceeding at law or in
\nequity).<\/p>\n
SECTION 5.05 No Conflict; Required Filings and Consents<\/p>\n
(a) The execution and delivery of this Agreement by Parent and Merger
\nSub does not, and the performance by Parent and Merger Sub of their obligations
\nhereunder and the consummation of the Merger will not, (i) conflict with or
\nviolate any provision of the certificate of incorporation or bylaws of Parent or
\nany equivalent organizational documents of any Parent Subsidiary, (ii) assuming
\nthat all consents, approvals, authorizations and permits described in Section
\n5.05(b) have been obtained and all filings and notifications described in
\nSection 5.05(b) have been made, conflict with or violate any Law applicable to
\nParent or any other Parent Subsidiary or by which any property or asset of
\nParent or any Parent Subsidiary is bound or<\/p>\n
28<\/p>\n
affected or (iii) result in any material breach of or constitute a material
\ndefault (or an event which with the giving of notice or lapse of time or both
\ncould reasonably be expected to become a default) under, or give to others any
\nright of termination, amendment, acceleration or cancellation of, or result in
\nthe creation of a lien or other encumbrance on any material property or asset of
\nParent or any Parent Subsidiary pursuant to, any note, bond, mortgage,
\nindenture, contract, agreement, lease, license, permit, franchise or other
\ninstrument or obligation.<\/p>\n
(b) The execution and delivery of this Agreement by Parent and Merger
\nSub does not, and the performance by Parent and Merger Sub of their obligations
\nhereunder and the consummation of the Merger will not, require any consent,
\napproval, authorization or permit of, or filing by Parent with or notification
\nby Parent to, any Governmental Entity, except pursuant to applicable
\nrequirements of the Exchange Act, the Securities Act, Blue Sky Laws, the rules
\nand regulations of the NNM, state takeover laws, the premerger notification
\nrequirements of the HSR Act, if any, and the filing and recordation of the
\nCertificate of Merger as required by New York Law.<\/p>\n
SECTION 5.06 SEC Filings; Financial Statements<\/p>\n
(a) Parent has timely filed all forms, reports, statements and
\ndocuments required to be filed by it (A) with the SEC and the NNM since February
\n20, 1998 (collectively, together with any such forms, reports, statements and
\ndocuments Parent may file subsequent to the date hereof until the Closing, the
\n“PARENT REPORTS”) and (B) with any other Governmental Entities. Each Parent
\nReport (i) was prepared in all material respects in accordance with the
\nrequirements of the Securities Act, the Exchange Act or the NNM, as the case may
\nbe, and (ii) did not at the time it was filed (or, in the case of registration
\nstatements filed under the Security Act, at the time of effectiveness) contain
\nany untrue statement of a material fact or omit to state a material fact
\nrequired to be stated therein or necessary in order to make the statements made
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading. Each material form, report, statement and document referred to in
\nclause (B) of this paragraph was prepared in all material respects in accordance
\nwith the requirements of applicable Law. No Parent Subsidiary is subject to the
\nperiodic reporting requirements of the Exchange Act or required to file any
\nform, report or other document with the SEC, the NNM, any other stock exchange
\nor any other comparable Governmental Entity.<\/p>\n
(b) Except as is provided in the Parent Reports, each of the
\nconsolidated financial statements (including, in each case, any notes thereto)
\ncontained in the Parent Reports was prepared in accordance with U.S. GAAP
\napplied on a consistent basis throughout the periods indicated (except as may be
\nindicated in the notes thereto) and each presented fairly, in all material
\nrespects, the consolidated financial position of Parent and the consolidated
\nParent Subsidiaries as at the respective dates thereof and for the respective
\nperiods indicated therein, except as otherwise noted therein (subject, in the
\ncase of unaudited statements, to normal and recurring immaterial year-end
\nadjustments).<\/p>\n
(c) Except as and to the extent set forth or reserved against on the
\nconsolidated balance sheet of Parent and the Parent Subsidiaries as reported in
\nthe Parent Reports, including the notes thereto, none of Parent or any Parent
\nSubsidiary has any liabilities or obligations of any nature (whether accrued,
\nabsolute, contingent or otherwise) that would be<\/p>\n
29<\/p>\n
required to be reflected on a balance sheet or in notes thereto prepared in
\naccordance with U.S. GAAP, except for liabilities or obligations incurred in the
\nordinary course of business consistent with past practice since December 31,
\n1999 that have not had and could not reasonably be expected to have,
\nindividually or in the aggregate, a Parent Material Adverse Effect.<\/p>\n
SECTION 5.07 Certain Tax Matters<\/p>\n
Neither Parent nor, to the Knowledge of Parent, any of its Affiliates
\nhas taken or agreed to take any action (other than actions contemplated by this
\nAgreement) that could reasonably be expected to prevent the Merger from
\nconstituting a “reorganization” under Section 368 of the Code. Parent is not
\naware of any agreement, plan or other circumstance that could reasonably be
\nexpected to prevent the Merger from so qualifying as a reorganization under
\nSection 368 of the Code.<\/p>\n
SECTION 5.08 Brokers<\/p>\n
No broker, finder or investment banker is entitled to any brokerage,
\nfinder’s or other fee or commission in connection with the Merger based upon
\narrangements made by or on behalf of Parent.<\/p>\n
ARTICLE VI<\/p>\n
COVENANTS<\/p>\n
SECTION 6.01 Conduct of Business by Company Pending the Closing<\/p>\n
Company agrees that, between the date of this Agreement and the
\nEffective Time, except as contemplated by this Agreement, unless Parent shall
\notherwise agree in writing, (x) the business of Company shall be conducted only
\nin, and Company shall not take any action except in, the ordinary course of
\nbusiness consistent with past practice and (y) Company shall use best efforts to
\nkeep available the services of such of the current officers, significant
\nemployees and consultants of Company and to preserve the current relationships
\nof Company with such of the corporate partners, customers, suppliers and other
\npersons with which Company has significant business relations in order to
\npreserve substantially intact its business organization. By way of amplification
\nand not limitation, Company shall not, between the date of this Agreement and
\nthe Effective Time, except as contemplated by this Agreement, directly or
\nindirectly, do, or agree to do, any of the following without the prior written
\nconsent of Parent:<\/p>\n
(a) amend or otherwise change its certificate of incorporation or
\nbylaws or equivalent organizational documents;<\/p>\n
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
\nguarantee or encumber, or authorize the issuance, sale, pledge, disposition,
\ngrant, transfer, lease, license or encumbrance of, (i) any shares of capital
\nstock of Company of any class, or securities convertible into or exchangeable or
\nexercisable for any shares of such capital stock, or any options, warrants or
\nother rights of any kind to acquire any shares of such capital stock, or any
\nother ownership interest (including, without limitation, any phantom interest),
\nof Company, other than the issuance of shares of Company Common Stock pursuant
\nto the exercise of stock options therefor<\/p>\n
30<\/p>\n
outstanding as of the date of this Agreement or pursuant to the Company Stock
\nPurchase Plan or (ii) any material property or assets of Company except sales of
\ninventory in the ordinary course of business consistent with past practice and
\nthe providing of opt-in e-mail addresses to direct marketers and brokers by
\nCompany in the ordinary course of business;<\/p>\n
(c) (i) acquire (including, without limitation, by merger,
\nconsolidation, or acquisition of stock or assets) any interest in any
\ncorporation, partnership, other business organization or Person or any division
\nthereof; (ii) incur any indebtedness for borrowed money (other than in de
\nminimus amounts) or issue any debt securities or assume, guarantee or endorse,
\nor otherwise as an accommodation become responsible for, the obligations of any
\nperson for borrowed money or make any loans or advances material to the
\nbusiness, assets, liabilities, financial condition or results of operations of
\nCompany; (iii) terminate, cancel or request any material change in, or agree to
\nany material change in, any Company Listed Contract or other License Agreement;
\n(iv) make or authorize any capital expenditure, other than capital expenditures
\nin the ordinary course of business consistent with past practice that have been
\ndescribed in the Disclosure Schedule and that are not, in the aggregate, in
\nexcess of $250,000 for Company; or (v) enter into or amend any contract,
\nagreement, commitment or arrangement that, if fully performed, would not be
\npermitted under this Section 6.01(c);<\/p>\n
(d) declare, set aside, make or pay any dividend or other distribution,
\npayable in cash, stock, property or otherwise, with respect to any of its
\ncapital stock;<\/p>\n
(e) reclassify, combine, split, subdivide or redeem, purchase or
\notherwise acquire, directly or indirectly, any of its capital stock except
\nrepurchases of unvested shares at cost in connection with the termination of the
\nemployment relationship with any employee pursuant to stock option or purchase
\nagreements in effect on the date hereof;<\/p>\n
(f) amend or change the period (or permit any acceleration, amendment
\nor change) of exercisability of options granted under the Company Stock Plan or
\nauthorize cash payments in exchange for any Company Stock Options granted under
\nthe Company Stock Plan;<\/p>\n
(g) amend the terms of, repurchase, redeem or otherwise acquire any of
\nits securities or propose to do any of the foregoing;<\/p>\n
(h) increase the compensation payable or to become payable to its
\ndirectors, officers, consultants or employees, grant any rights to severance or
\ntermination pay to, or enter into any employment or severance agreement which
\nprovides benefits upon a change in control of Company that would be triggered by
\nthe Merger with, any director, officer, consultant or other employee of Company
\nwho is not currently entitled to such benefits from the Merger, establish,
\nadopt, enter into or amend any collective bargaining, bonus, profit sharing,
\nthrift, compensation, stock option, restricted stock, pension, retirement,
\ndeferred compensation, employment, termination, severance or other plan,
\nagreement, trust, fund, policy or arrangement for the benefit of any director,
\nofficer, consultant or employee of Company, except to the extent required by
\napplicable Law or the terms of a collective bargaining agreement, or enter into
\nor amend any contract, agreement, commitment or arrangement between Company and
\nany of Company’s directors, officers, consultants or employees;<\/p>\n
31<\/p>\n
(i) pay, discharge or satisfy any claims, liabilities or obligations
\n(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
\nthe payment, discharge or satisfaction in the ordinary course of business and
\nconsistent with past practice of liabilities (A) reflected or reserved against
\non the balance sheet of Company dated as of June 30, 2000 included in Company’s
\nquarterly report on Form 10-Q for the period then ended;<\/p>\n
(j) except as required by any Governmental Entity, make any change with
\nrespect to Company’s accounting policies, principles, methods or procedures,
\nincluding, without limitation, revenue recognition policies, other than as
\nrequired by U.S. GAAP;<\/p>\n
(k) make any Tax election or settle or compromise any Tax liability; or<\/p>\n
(l) authorize or enter into any formal or informal agreement or
\notherwise make any commitment to do any of the foregoing or to take any action
\nwhich would make any of the representations or warranties of Company contained
\nin this Agreement untrue or incorrect or prevent Company from performing or
\ncause Company not to perform its covenants hereunder in any material respect or
\nresult in any of the conditions to the Merger set forth herein not being
\nsatisfied or prevent Company from performing or cause Company not to perform its
\ncovenants hereunder.<\/p>\n
SECTION 6.02 Notices of Certain Events<\/p>\n
(a) Each of Parent and Company shall give prompt notice to the other of
\n(i) any notice or other communication from any person alleging that the consent
\nof such person is or may be required in connection with the Merger; (ii) any
\nnotice or other communication from any Governmental Entity in connection with
\nthe Merger; (iii) any actions, suits, claims, investigations or proceedings
\ncommenced or, to its Knowledge, threatened against, relating to or involving or
\notherwise affecting Parent or Company, respectively, or that relate to the
\nconsummation of the Merger; (iv) the occurrence of a default or event that, with
\nthe giving of notice or lapse of time or both, will become a default under any
\nParent Listed Contract or Company Listed Contract, respectively; and (v) any
\nchange that could reasonably be expected to have a Parent Material Adverse
\nEffect or a Company Material Adverse Effect, respectively, or to delay or impede
\nthe ability of either Parent or Company, respectively, to perform their
\nrespective obligations pursuant to this Agreement and to effect the consummation
\nof the Merger.<\/p>\n
SECTION 6.03 Access to Information; Confidentiality<\/p>\n
(a) Except as required pursuant to any confidentiality agreement or
\nsimilar agreement or arrangement to which Parent or Company is a party or
\npursuant to applicable Law or the regulations or requirements of any stock
\nexchange or other regulatory organization with whose rules a party hereto is
\nrequired to comply, from the date of this Agreement to the Effective Time,
\nParent and Company shall (i) provide to the other (and its officers, directors,
\nemployees, accountants, consultants, legal counsel, agents and other
\nrepresentatives (collectively, “REPRESENTATIVES”)) access at reasonable times
\nupon prior notice to its and its subsidiaries’ officers, employees, agents,
\nproperties, offices and other facilities and to the books and records thereof,
\nand (ii) furnish promptly such information concerning its and its subsidiaries’
\nbusiness, properties, contracts, assets, liabilities and personnel as the other
\nparty or its Representatives may<\/p>\n
32<\/p>\n
reasonably request. No investigation conducted pursuant to this Section 6.03
\nshall affect or be deemed to modify any representation or warranty made in this
\nAgreement.<\/p>\n
(b) The parties hereto shall comply with, and shall cause their
\nrespective Representatives to comply with, all of their respective obligations
\nunder the Confidentiality Agreement with respect to the information disclosed
\npursuant to this Section 6.03.<\/p>\n
SECTION 6.04 No Solicitation of Transactions<\/p>\n
(a) Until this Agreement has been terminated as provided herein,
\nCompany shall not, directly or indirectly, and shall cause its Representatives
\nnot to, directly or indirectly, solicit, initiate or knowingly encourage
\n(including by way of furnishing nonpublic information), any inquiries or the
\nmaking of any proposal or offer (including, without limitation, any proposal or
\noffer to its shareholders) that constitutes, or may reasonably be expected to
\nlead to, any Competing Transaction, or enter into or maintain or continue
\ndiscussions or negotiate with any person in furtherance of such inquiries or to
\nobtain a Competing Transaction, or agree to or endorse any Competing
\nTransaction, or authorize or permit any of Company’s Representatives or
\nsubsidiaries, or any Representative retained by Company’s subsidiaries, to take
\nany such action; provided, however, that nothing contained in this Agreement,
\nincluding this Section 6.04, shall prohibit the Company or the board of
\ndirectors of Company (i) from complying with Rule 14d-9 or 14e-2(a) promulgated
\nunder the Exchange Act with regard to a tender or exchange offer not made in
\nviolation of this Section 6.04, (ii) referring any third party to this Section
\n6.04 or making a copy of this Section 6.04 available to any third party solely
\nin response to an unsolicited inquiry; (iii) prior to receipt of the approval by
\nthe shareholders of Company of this Agreement and the Merger, from providing
\ninformation (subject to a confidentiality agreement at least as restrictive as
\nthe Confidentiality Agreement) in connection with, and negotiating, another
\nunsolicited, bona fide proposal regarding a Competing Transaction that (i)
\nCompany’s board of directors shall have concluded in good faith, based upon the
\nadvice of independent outside counsel of nationally recognized reputation (who
\nmay be the Company’s regularly engaged independent legal counsel), that such
\naction is necessary to prevent Company’s board of directors from violating its
\nfiduciary duties to the Company or its shareholders under applicable law, (ii)
\nwith respect to which Company’s board of directors shall have determined, based
\nupon the advice of Company’s independent financial advisors of nationally
\nrecognized reputation (who may be the Company’s regularly engaged independent
\nfinancial advisors), in the proper exercise of its fiduciary duties to the
\nCompany and its shareholders that the acquiring party is reasonably capable of
\nconsummating such Competing Transaction on the terms proposed, and (iii)
\nCompany’s board of directors reasonably believes in good faith, based on the
\nadvice of the Company’s independent financial advisors of nationally recognized
\nreputation (who may be the Company’s regularly engaged independent financial
\nadvisors), that such Competing Transaction is more favorable to the shareholders
\nof the Company from a financial point of view than the Merger, that such
\nCompeting Transaction is more favorable to the shareholders of Company than the
\nMerger taking into account all the terms and conditions of the Competing
\nTransaction and the Merger (any such Competing Transaction being referred to
\nherein as a “SUPERIOR PROPOSAL”). Any violation of the restrictions set forth in
\nthis Section 6.04 by any Representative of Company, whether or not such Person
\nis purporting to act on behalf of Company or otherwise, shall be deemed to be a
\nbreach of this Section 6.04 by Company. Company shall notify Parent promptly if
\nany proposal or offer, or any inquiry or contact with any person with respect
\nthereto, regarding<\/p>\n
33<\/p>\n
a Competing Transaction is made, such notice to include the identity of the
\nperson making such proposal, offer, inquiry or contact, and the terms of such
\nCompeting Transaction, and shall keep Parent apprised, as promptly as reasonably
\npracticable, of any modifications to the terms thereof. Prior to accepting a
\nCompany Superior Proposal, Company shall provide Parent with 24 hours’ written
\nnotice of such intention. Notwithstanding the foregoing, nothing contained in
\nthis Section 6.04 shall prevent the Board of Directors of Company from
\nwithdrawing or modifying its recommendation of this Agreement, provided that the
\nCompany has complied with this Section 6.04, following the receipt of a proposal
\nthat constitutes, or may reasonably be expected to lead to, a Competing
\nTransaction if the Board of Directors of the Company, after consultation with
\nindependent legal counsel (who may be the Company’s regularly engaged
\nindependent legal counsel) determines in good faith that such action is
\nnecessary for the directors of Company to comply with their fiduciary duties to
\nthe Company or its shareholders under applicable law.<\/p>\n
(b) Company immediately shall cease and cause to be terminated all
\nexisting discussions or negotiations with any parties conducted heretofore with
\nrespect to a Competing Transaction. Company shall not release any third party
\nfrom, or waive any provision of, any confidentiality or standstill agreement to
\nwhich it is a party.<\/p>\n
SECTION 6.05 Tax-Free Transaction<\/p>\n
(a) From and after the date of this Agreement, each party hereto shall
\nuse all reasonable efforts to cause the Merger to qualify, and shall not take
\nany actions or cause any actions to be taken which could reasonably be expected
\nto prevent the Merger from qualifying as a “reorganization” under Section 368(a)
\nof the Code.<\/p>\n
(b) Each of Company and Parent shall execute and deliver to the other a
\ncertificate, in form reasonably acceptable to Company and Parent, as the case
\nmay be, signed by an officer of Company or Parent, as the case may be, setting
\nforth factual representations and covenants that will serve as a basis for the
\ntax opinion required under Section 8.02(c) hereof. Company shall use its
\nreasonable efforts to obtain a tax opinion that would satisfy the condition to
\nthe Closing set forth in Section 8.02(c).<\/p>\n
SECTION 6.06 Control of Operations<\/p>\n
Nothing contained in this Agreement shall give Parent, directly or
\nindirectly, the right to control or direct the operations of Company prior to
\nthe Effective Time. Prior to the Effective Time, Company shall exercise,
\nconsistent with the terms and conditions of this Agreement, complete control and
\nsupervision over its operations.<\/p>\n
SECTION 6.07 Further Action; Consents; Filings<\/p>\n
(a) Upon the terms and subject to the conditions hereof, each of the
\nparties hereto shall use all reasonable efforts to (i) take, or cause to be
\ntaken, all appropriate action, and do, or cause to be done, all things
\nnecessary, proper or advisable under applicable Law or otherwise to consummate
\nand make effective the Merger, (ii) obtain from Governmental Entities any
\nconsents, licenses, permits, waivers, approvals, authorizations or orders
\nrequired to be obtained or made by Parent or Company in connection with the
\nauthorization, execution and delivery of this Agreement and the consummation of
\nthe Merger and (iii) make all necessary<\/p>\n
34<\/p>\n
filings, and thereafter make any other required or appropriate submissions, with
\nrespect to this Agreement and the Merger required under (A) the rules and
\nregulations of the NNM, (B) the Securities Act, the Exchange Act and any other
\napplicable Federal or state securities Laws, (C) the HSR Act, if any, and (D)
\nany other applicable Law. The parties hereto shall cooperate and consult with
\neach other in connection with the making of all such filings, including by
\nproviding copies of all such documents to the nonfiling parties and their
\nadvisors prior to filing, and none of the parties shall file any such document
\nif any of the other parties shall have reasonably objected to the filing of such
\ndocument. No party shall consent to any voluntary extension of any statutory
\ndeadline or waiting period or to any voluntary delay of the consummation of the
\nMerger at the behest of any Governmental Entity without the consent and
\nagreement of the other parties hereto, which consent shall not be unreasonably
\nwithheld or delayed.<\/p>\n
(b) Each of Company and Parent will give any notices to third persons,
\nand use, and cause their respective subsidiaries to use, reasonable efforts to
\nobtain any consents from third persons necessary, proper or advisable (as
\ndetermined in good faith by Parent with respect to such notices or consents to
\nbe delivered or obtained by Company) to consummate the transactions contemplated
\nby this Agreement.<\/p>\n
SECTION 6.08 Additional Reports<\/p>\n
Company and Parent shall each furnish to the other copies of any
\nreports of the type referred to in Sections 4.07 and 5.06, which it files with
\nthe SEC on or after the date hereof, and Company and Parent, as the case may be,
\ncovenant and warrant that as of the respective dates thereof, such reports will
\nnot contain any untrue statement of a material fact or omit to state a material
\nfact required to be stated therein or necessary to make the statements therein,
\nin light of the circumstances under which they were made, not misleading. Any
\nunaudited consolidated interim financial statements included in such reports
\n(including any related notes and schedules) will fairly present in all material
\nrespects the financial position of Company and its consolidated subsidiaries or
\nParent and its consolidated subsidiaries, as the case may be, as of the dates
\nthereof and the results of operations and changes in financial position or other
\ninformation including therein for the periods or as of the date then ended
\n(subject, where appropriate, to normal year-end adjustments), in each case in
\naccordance with past practice and U.S. GAAP consistently applied during the
\nperiods involved (except as otherwise disclosed in the notes thereto).<\/p>\n
SECTION 6.09 Tax Information<\/p>\n
Company shall provide the following information to Parent not later
\nthan two weeks after the date of this Agreement: (i) a complete list of the
\ntypes of Tax Returns being filed by Company in each taxing jurisdiction, (ii) a
\nlist of all closed years with respect to each such type of Tax Return filed in
\neach jurisdiction, (iii) a list of any deferred intercompany gain with respect
\nto transactions to which Company has been a party and (iv) a list of the
\nacquisition date, original cost, accumulated depreciation, adjusted tax basis
\nand methods of depreciation for all depreciable and amortizable assets of the
\nCompany. Company shall provide Parent and its accountants, counsel and other
\nrepresentatives reasonable access, during normal business hours during the
\nperiod prior to the Effective Time, to all of Company’s Tax Returns and other
\nrecords and workpapers relating to Taxes.<\/p>\n
35<\/p>\n
ARTICLE VII<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 7.01 Registration Statement; Proxy Statement<\/p>\n
(a) As promptly as practicable after the execution of this Agreement,
\nParent and Company shall jointly prepare and shall file with the SEC a document
\nor documents that will constitute (i) the prospectus forming part of the
\nregistration statement on Form S-4 of Parent (together with all amendments
\nthereto, the “REGISTRATION STATEMENT”), in connection with the registration
\nunder the Securities Act of Parent Common Stock to be issued to Company’s
\nshareholders pursuant to the Merger and (ii) the proxy statement with respect to
\nthe Merger relating to the special meeting of Company’s shareholders to be held
\nto consider approval and adoption of this Agreement and the Merger (the “COMPANY
\nSHAREHOLDERS’ MEETING”) (together with any amendments thereto, the “PROXY
\nSTATEMENT”). Copies of the Proxy Statement shall be provided to the NNM in
\naccordance with its rules. Each of the parties hereto shall use all reasonable
\nefforts to cause the Registration Statement to become effective as promptly as
\npracticable after the date hereof, and, prior to the effective date of the
\nRegistration Statement, the parties hereto shall take all action required under
\nany applicable Laws in connection with the issuance of shares of Parent Common
\nStock pursuant to the Merger. Parent or Company, as the case may be, shall
\nfurnish all information concerning Parent or Company as the other party may
\nreasonably request in connection with such actions and the preparation of the
\nRegistration Statement and the Proxy Statement. Each of Parent and Company shall
\nnotify the other of the receipt of any comments from the SEC on the Registration
\nStatement and the Proxy Statement and of any requests by the SEC for any
\namendments or supplements thereto or for additional information and shall
\nprovide to each other promptly copies of all correspondence between Parent,
\nCompany or any of their representatives and advisors and the SEC. As promptly as
\npracticable after the effective date of the Registration Statement, the Proxy
\nStatement shall be mailed to the shareholders of Company. Each of the parties
\nhereto shall cause the Proxy Statement to comply as to form and substance as to
\nsuch party in all material respects with the applicable requirements of (i) the
\nExchange Act, (ii) the Securities Act and (iii) the rules and regulations of the
\nNNM.<\/p>\n
(b) The Proxy Statement shall include with respect to Company and its
\nshareholders, (i) the approval and adoption of the Merger and the recommendation
\nof the board of directors of Company to Company’s shareholders that they vote in
\nfavor of approval of this Agreement and the Merger, subject to the right of the
\nboard of directors of Company to withdraw its recommendation and recommend a
\nSuperior Proposal in compliance with Section 6.04 of this Agreement, and (ii)
\nthe opinion of Robertson Stephens referred to in Section 4.19.<\/p>\n
(c) No amendment or supplement to the Proxy Statement or the
\nRegistration Statement shall be made without the approval of Parent and Company,
\nwhich approval shall not be unreasonably withheld or delayed. Each of the
\nparties hereto shall advise the other parties hereto, promptly after it receives
\nnotice thereof, of the time when the Registration Statement has become effective
\nor any supplement or amendment has been filed, of the issuance of any stop
\norder, of the suspension of the qualification of the Parent Common Stock
\nissuable in connection with the Merger for offering or sale in any jurisdiction,
\nor of any request by the SEC for<\/p>\n
36<\/p>\n
amendment of the Proxy Statement or the Registration Statement or comments
\nthereon and responses thereto or requests by the SEC for additional information.<\/p>\n
(d) None of the information supplied by Company for inclusion or
\nincorporation by reference in the Registration Statement or the Proxy Statement
\nshall, at the respective times filed with the SEC or other regulatory agency
\nand, in addition, (A) in the case of the Proxy Statement, at the date it or any
\namendments or supplements thereto are mailed to shareholders of Company, at the
\ntime of the Company Shareholders’ Meeting and at the Effective Time and (B) in
\nthe case of the Registration Statement, when it becomes effective under the
\nSecurities Act and at the Effective Time, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein, in light of the
\ncircumstances under which they are made, not misleading. If at any time prior to
\nthe Effective Time any event or circumstance relating to Company, or their
\nrespective officers or directors, should be discovered by Company that should be
\nset forth in an amendment or a supplement to the Registration Statement or the
\nProxy Statement, Company shall promptly inform Parent. All documents that
\nCompany is responsible for filing with the SEC in connection with the Merger
\nwill comply as to form in all material respects with the applicable requirements
\nof the rules and regulations of the Securities Act and the Exchange Act.<\/p>\n
(e) None of the information supplied by Parent for inclusion or
\nincorporation by reference in the Registration Statement or the Proxy Statement
\nshall, at the respective times filed with the SEC or other regulatory agency
\nand, in addition, (A) in the case of the Proxy Statement, at the date it or any
\namendments or supplements thereto are mailed to shareholders of Company, at the
\ntime of Company Shareholders’ Meeting and at the Effective Time and (B) in the
\ncase of the Registration Statement, when it becomes effective under the
\nSecurities Act and at the Effective Time, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein, in light of the
\ncircumstances under which they are made, not misleading. If, at any time prior
\nto the Effective Time, any event or circumstance relating to Parent or any
\nParent Subsidiary, or their respective officers or directors, should be
\ndiscovered by Parent that should be set forth in an amendment or a supplement to
\nthe Registration Statement or the Proxy Statement, Parent shall promptly inform
\nCompany. All documents that Parent is responsible for filing with the SEC in
\nconnection with the Merger will comply as to form in all material respects with
\nthe applicable requirements of the rules and regulations of the Securities Act
\nand the Exchange Act.<\/p>\n
SECTION 7.02 Company Shareholders’ Meeting<\/p>\n
Subject to the provisions of Section 6.04 and 9.01 herein, Company
\nshall call and hold the Company Shareholders’ Meeting as promptly as practicable
\nafter the date hereof for the purpose of voting upon the approval of this
\nAgreement and the Merger pursuant to the Proxy Statement, and Company shall use
\nall reasonable efforts to hold the Company Shareholders’ Meeting as soon as
\npracticable after the date on which the Registration Statement becomes
\neffective. Unless Company’s board of directors has withdrawn its recommendation
\nof this Agreement and the Merger in compliance with Section 6.04, Company shall
\nuse all reasonable efforts to solicit from its shareholders proxies in favor of
\nthe approval and adoption of this Agreement and the Merger pursuant to the Proxy
\nStatement and shall take all other action necessary or advisable to secure the
\nvote or consent of shareholders required by New York Law<\/p>\n
37<\/p>\n
or applicable other stock exchange requirements to obtain such approval. Company
\nshall take all other action necessary or, in the reasonable opinion of Parent,
\nadvisable to promptly and expeditiously secure any vote or consent of
\nshareholders required by applicable Law and Company’s certificate of
\nincorporation and bylaws to effect the Merger. Subject to the right of Company
\nto terminate this Agreement set forth in Section 9.01 hereof, Company shall call
\nand hold the Company Shareholders’ Meeting for the purpose of voting upon the
\napproval and adoption of this Agreement and the Merger whether or not Company’s
\nboard of directors at any time subsequent to the date hereof determines that
\nthis Agreement is no longer advisable or recommends that Company’s shareholders
\nreject it.<\/p>\n
SECTION 7.03 Affiliates<\/p>\n
Company will use reasonable efforts to obtain an executed letter
\nagreement substantially in the form of Annex C hereto from (i) each person
\nidentified in Section 4.18 of the Company Disclosure Schedule within 15 days
\nfollowing the execution and delivery of this Agreement and (ii) from any person
\nwho, to the Knowledge of Company, may be deemed to have become an Affiliate of
\nCompany after the date of this Agreement and prior to the Effective Time as soon
\nas practicable after attaining such status. The foregoing notwithstanding,
\nParent shall be entitled to place legends as specified in the Affiliate
\nAgreement on the certificates evidencing any of the Parent Common Stock to be
\nreceived by (i) any Affiliate of Company or (ii) any person Parent reasonably
\nidentifies (by written notice to Company) as being a person who may be deemed an
\n“affiliate” within the meaning of Rule 145 promulgated under the Securities Act,
\nand to issue appropriate stop transfer instructions to the transfer agent for
\nsuch Parent Common Stock, consistent with the terms of the Affiliate Agreement,
\nregardless of whether such person has executed Affiliate Agreement and
\nregardless of whether such person’s name and address appear on Section 4.18 of
\nthe Company Disclosure Schedule.<\/p>\n
SECTION 7.04 Directors’ and Officers’ Indemnification and Insurance<\/p>\n
(a) Parent and the Merger Sub agree that all rights to indemnification,
\nadvancement of expenses, exculpation, limitation of liability and any and all
\nsimilar rights now existing in favor of each present and former director,
\nofficer, employee and agent of Company (collectively, the “Indemnified Parties”)
\nas provided in Company’s present certificate of incorporation, by-laws or
\ncontractual arrangement in effect on the date hereof, shall survive the Merger
\nand shall continue in full force and effect for a period of six years from the
\nEffective Time, which provisions shall not be amended, repealed or otherwise
\nmodified for a period of six years from the Effective Time in any manner that
\nwould affect adversely the rights thereunder of individuals who at any time
\nprior to the Effective Time were directors, officers, employees or agents of the
\nCompany, unless such modification shall be required by Law, and Parent agrees to
\ncause the Surviving Corporation to comply with its obligations thereunder and
\nhereby guarantees the indemnification obligations referred to in this Section
\n7.04.<\/p>\n
(b) In the event the Company or the Surviving Corporation or any of
\ntheir respective successors or assigns (i) consolidates with or merges into any
\nother person and shall not be the continuing or surviving corporation or entity
\nof such consolidation or merger or (ii) transfers a material amount of its
\nproperties and assets to any person in a single transaction or a series of
\ntransactions, then, and in each such case, Parent will either guaranty the
\nindemnification<\/p>\n
38<\/p>\n
obligations referred to in this Section 7.04 or will make or cause to be made
\nproper provision so that the successors and assigns of the Company or the
\nSurviving Corporation, as the case may be, assume the indemnification
\nobligations described herein for the benefit of the Indemnified Parties and have
\nsubstantially equal financial ability as the Company (immediately prior to the
\nEffective Time) to satisfy the obligations of the parties pursuant to this
\nSection 7.04 as a condition to such merger, consolidation or transfer becoming
\neffective.<\/p>\n
(c) The provisions of this Section 7.04 are (i) intended to be for the
\nbenefit of, and will be enforceable by, each of the Indemnified Parties and (ii)
\nin addition to, and not in substitution for, any other rights to indemnification
\nor contribution that any such person may have by contract or otherwise.<\/p>\n
(d) For a period of three years after the Effective Time, Parent shall
\nuse its best efforts to maintain in effect the directors’ and officers’
\nliability insurance policies maintained by Company; provided, however, that in
\nno event shall Parent be required to expend in any one year in excess of 150% of
\nthe annual premium currently paid by Company for such coverage and provided
\nfurther, that if the premium for such coverage exceeds such amount, Parent shall
\npurchase a policy with the greatest coverage available for such 150% of the
\nannual premium.<\/p>\n
SECTION 7.05 No Shelf Registration<\/p>\n
Parent shall not be required to amend or maintain the effectiveness of
\nthe Registration Statement for the purpose of permitting resale of the shares of
\nParent Common Stock received pursuant hereto by the persons who may be deemed to
\nbe “affiliates” of Company within the meaning of Rule 145 promulgated under the
\nSecurities Act.<\/p>\n
SECTION 7.06 Public Announcements<\/p>\n
The initial press release concerning the Merger shall be a joint press
\nrelease and, thereafter, Parent and Company shall consult with each other before
\nissuing any press release or otherwise making any public statements with respect
\nto this Agreement or the Merger and shall not issue any such press release or
\nmake any such public statement without the prior written approval of the other,
\nexcept to the extent required by applicable Law or the requirements of the rules
\nand regulations of the NNM, in which case the issuing party shall use all
\nreasonable efforts to consult with the other party before issuing any such
\nrelease or making any such public statement.<\/p>\n
SECTION 7.07 NNM Listing<\/p>\n
Prior to the Effective Time, Parent shall use all reasonable efforts to
\nhave the shares of Parent Common Stock issued or issuable in connection with the
\nMerger and approved for quotation on the NNM.<\/p>\n
39<\/p>\n
SECTION 7.08 Company Stock Options\/Registration Statements on
\nForm S-8.<\/p>\n
(a) Prior to the Effective Time, Company shall take, or cause
\nto be taken, all action necessary and appropriate to effect the assumption of
\nCompany Stock Options as contemplated by Section 3.05, including, if applicable,
\namending the Company Stock Plan and Company Stock Options to provide that no
\n“cash-out” will be made in connection with the Merger and obtaining the consent
\nof affected optionees and warrant holders. Parent shall reserve for issuance the
\nnumber of shares of Parent Common Stock that will be issuable upon exercise of
\nCompany Stock Options assumed pursuant to Section 3.05 hereof. As soon as
\nreasonably practicable following the Effective Time, Parent shall file with the
\nSEC one or more registration statements on Form S-8 for the shares of Parent
\nCommon Stock issuable with respect to Company Stock Options and will maintain
\nthe effectiveness of such registration statements for so long as any of such
\noptions or other rights remain outstanding.<\/p>\n
(b) Assuming that Company delivers to Parent the Section 16
\nInformation (as defined below) in a timely fashion, the board of directors of
\nParent or a committee of two or more “non-employee directors” (as such term is
\ndefined for purposes of Rule 16b-3 under the Exchange Act) thereof, shall adopt
\nresolutions prior to the Effective Time providing that, and shall take other
\nappropriate action such that, the deemed grant to Company Insiders (as defined
\nbelow) of options to purchase Parent Common Stock under the Company Stock
\nOptions (as converted into options to acquire Parent Common Stock pursuant to
\nSection 3.05 and the receipt by Company Insiders of Parent Common Stock in
\nexchange for Company Common Stock pursuant to the Merger, are intended to be
\nexempt from liability pursuant to Section 16(b) of the Exchange Act. Such
\nresolutions shall comply with the approval conditions of Rule 16b-3 under the
\nExchange Act for purposes of such Section 16(b) exemptions, including specifying
\nthe name of each Company Insider, the number of equity securities to be acquired
\nor disposed of by each Company Insider, the material terms of any derivative
\nsecurities, and that the approval is intended to make the receipt of such
\nsecurities exempt pursuant to Rule 16b-3(d) under the Exchange Act. “SECTION 16
\nINFORMATION” shall mean the names of the Company Insiders, the number of shares
\nof Company Common Stock held by each Company Insider and expected to be
\nexchanged for Parent Common Stock in the Merger and the number and a description
\nof Company Stock Options held by each Company Insider and expected to be
\nconverted into options to acquire Parent Common Stock in connection with the
\nMerger. “COMPANY INSIDERS” shall mean those officers and directors of the
\nCompany who will be subject to the reporting requirements of Section 16(b) of
\nthe Exchange Act with respect to Parent and whose names are included in the
\nSection 16 Information.<\/p>\n
SECTION 7.09 Employee Benefit Matters<\/p>\n
(a) For all purposes (including, without limitation,
\neligibility, vesting, and benefit accrual) under the employee benefit plans of
\nParent and its Subsidiaries providing benefits to former Company employees after
\nthe Effective Time, each such employee shall be credited with his or her years
\nof service with Company before the Effective Time, to the same extent as such
\nemployee was entitled, before the Effective Time, to credit for such service
\nunder any similar Company Benefit Plan, except for purposes of benefit accrual
\nunder defined benefit pension plans, if any. Following the Effective Time,
\nParent shall, or shall cause its Subsidiaries<\/p>\n
40<\/p>\n
to, waive any pre-existing condition limitation under any welfare benefit plan
\nmaintained by Parent or any of its Subsidiaries in which such employees and
\ntheir eligible dependents participate (except to the extent that such
\npre-existing condition limitation would have been applicable under the
\ncomparable Company welfare benefit plans immediately prior to the Effective
\nTime).<\/p>\n
(b) Unless Parent consents otherwise in writing, Company shall
\ntake all action necessary to terminate, or cause to terminate, before the
\nEffective Time, any Company Benefit Plan that is a 401(k) plan or other defined
\ncontribution retirement plan. Parent and Company shall take all action necessary
\nto permit Company employees to elect direct rollovers of their account balances
\nin Company’s terminated 401(k) plan or other defined contribution plan
\n(including outstanding participant loans, if any) to a qualified relevant plan
\nof Parent or its Subsidiaries.<\/p>\n
ARTICLE VIII<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
SECTION 8.01 Conditions to the Obligations of Each Party to
\nConsummate the Merger<\/p>\n
The obligations of the parties hereto to consummate the Merger
\nare subject to the satisfaction or, if permitted by applicable Law, waiver of
\nthe following conditions:<\/p>\n
(a) the Registration Statement shall have been declared
\n effective by the SEC under the Securities Act and no stop order
\n suspending the effectiveness of the Registration Statement shall have
\n been issued by the SEC and no proceeding for that purpose shall have
\n been initiated by the SEC and not concluded or withdrawn;<\/p>\n
(b) this Agreement and the Merger shall have been duly
\n approved by the requisite vote of shareholders of Company in
\n accordance with New York Law;<\/p>\n
(c) no court of competent jurisdiction shall have issued or
\n entered any order, writ, injunction or decree, and no other
\n Governmental Entity shall have issued any order, which is then in
\n effect and has the effect of making the Merger illegal or otherwise
\n prohibiting its consummation;<\/p>\n
(d) any waiting period (and any extension thereof) applicable
\n to the consummation of the Merger under the HSR Act or any other
\n applicable competition, merger control or similar Law shall have
\n expired or been terminated; and<\/p>\n
(e) all consents, approvals and authorizations legally
\n required to be obtained to consummate the Merger shall have been
\n obtained from all Governmental Entities, except where the failure to
\n obtain any such consent, approval or authorization could not
\n reasonably be expected to result in a Parent Material Adverse Effect
\n or a Company Material Adverse Effect.<\/p>\n
41<\/p>\n
SECTION 8.02 Conditions to the Obligations of Company<\/p>\n
The obligations of Company to consummate the Merger, or to
\npermit the consummation of the Merger are subject to the satisfaction or, if
\npermitted by applicable Law, waiver of the following further conditions:<\/p>\n
(a) each of the representations and warranties of Parent
\n contained in this Agreement shall be true, complete and correct in all
\n respects (other than representations and warranties subject to
\n “materiality” or “Material Adverse Effect” qualifiers, which shall be
\n true, complete and correct in all respects) both when made and on and
\n as of the Effective Time as if made at and as of the Effective Time
\n (other than (i) representations and warranties which address matters
\n only as of a certain date which shall have been true, complete and
\n correct as of such certain date, and (ii) failures to be true,
\n complete and correct that do not, in the aggregate, constitute a
\n Parent Material Adverse Effect), and Company shall have received a
\n certificate of the Chief Executive Officer and Chief Financial Officer
\n of Parent to such effect;<\/p>\n
(b) Parent shall have performed or complied in all material
\n respects with all covenants required by this Agreement to be performed
\n or complied with by it on or prior to the Effective Time and Company
\n shall have received a certificate of the Chief Executive Officer and
\n Chief Financial Officer of Parent to that effect;<\/p>\n
(c) Piper, Marbury, Rudnick & Wolfe LLP, legal counsel to
\n Company, shall have issued its opinion, such opinion dated on the date
\n of the Closing, addressed to Company, and reasonably satisfactory to
\n it, based upon customary representations of Company and Parent and
\n customary assumptions, to the effect that the Merger will constitute a
\n “reorganization” within the meaning of Section 368(a) of the Code,
\n which opinion shall not have been withdrawn or modified in any
\n material respect; provided, however, that if such firm does not render
\n such opinion, this condition shall nonetheless be deemed satisfied if
\n such opinion, dated as of the date of the Closing, is rendered to
\n Company by Brobeck, Phleger & Harrison LLP, counsel to Parent; and<\/p>\n
(d) There shall have been no Parent Material Adverse Effect
\n since the date of this Agreement.<\/p>\n
SECTION 8.03 Conditions to the Obligations of Parent<\/p>\n
The obligations of Parent to consummate the Merger are subject
\nto the satisfaction or waiver of the following further conditions:<\/p>\n
(a) each of the representations and warranties of Company
\n contained in this Agreement shall be true, complete and correct in all
\n respects (other than representations and warranties subject to
\n “materiality” or “Material Adverse Effect” qualifiers, which shall be
\n true, complete and correct in all respects) both when made and on and
\n as of the Effective Time as if made at and as of the Effective Time
\n (other than (i) representations and warranties which address matters
\n only as of a certain date which shall have been true, complete and
\n correct as of such certain date, and (ii) failures to be true,
\n complete and correct that do not, in the aggregate, constitute a
\n Company Material Adverse Effect), and <\/p>\n
42<\/p>\n
Parent shall have received a certificate of the Chief Executive
\n Officer and Chief Financial Officer of Company to such effect;<\/p>\n
(b) Company shall have performed or complied in all material
\n respects with all covenants required by this Agreement to be performed
\n or complied with by it on or prior to the Effective Time and Parent
\n shall have received a certificate of the Chief Executive Officer and
\n Chief Financial Officer of Company to that effect;<\/p>\n
(c) There shall have been no Company Material Adverse Effect
\n since the date of this Agreement;<\/p>\n
(d) Company shall have received from each of the parties set
\n forth on Section 8.03(d) of the Company Disclosure Schedule (each such
\n party, an “ASSIGNING PARTY”), a valid and effective assignment, in
\n form reasonably acceptable to Parent, of all intellectual property
\n rights in all work created by such Assigning Party on behalf of
\n Company; and<\/p>\n
(e) Each of the employees listed on Schedule 8.03(e) of the
\n Company Discosure Schedule hereto shall have terminated their
\n respective employment agreements with Company and shall have agreed to
\n the terms of employment set forth in their respective offer letters
\n from Parent, and no employee listed on Schedule I shall have
\n terminated, or given notice of termination of, such employee’s
\n employment with Company.<\/p>\n
ARTICLE IX<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 9.01 Termination<\/p>\n
This Agreement may be terminated and the Merger may be
\nabandoned at any time prior to the Effective Time, notwithstanding any requisite
\nadoption and approval of this Agreement, as follows:<\/p>\n
(a) by mutual written consent duly authorized by the boards of
\n directors of each of Parent and Company;<\/p>\n
(b) by either Parent or Company, if the Effective Time shall
\n not have occurred on or before February 28, 2001; provided, however,
\n that the right to terminate this Agreement under this Section 9.01(b)
\n shall not be available to any party whose material breach of this
\n Agreement shall have caused, or resulted in, the failure of the
\n Effective Time to occur on or before such date;<\/p>\n
(c) by either Parent or Company, if any Governmental Order,
\n writ, injunction or decree preventing the consummation of the Merger
\n shall have been entered by any court of competent jurisdiction and
\n shall have become final and nonappealable;<\/p>\n
(d) by Parent, if (i) the board of directors of Company
\n withdraws, modifies or changes its recommendation of this Agreement or
\n the Merger in a manner adverse to <\/p>\n
43<\/p>\n
Parent or its stockholders, (ii) the board of directors of Company
\n shall have recommended to the shareholders of Company a Competing
\n Transaction, (iii) the Company fails to comply in all material
\n respects with Section 6.04 or Section 7.02, (iv) a Competing
\n Transaction shall have been announced or otherwise publicly known and
\n the board of directors of Company shall have (A) failed to recommend
\n against acceptance of such by its shareholders (including by taking no
\n position, or indicating its inability to take a position, with respect
\n to the acceptance by its shareholders of a Competing Transaction
\n involving a tender offer or exchange offer) within 5 Business Days of
\n delivery of a written request from Parent for such action or (B)
\n failed to reconfirm its approval and recommendation of this Agreement
\n and the transactions contemplated hereby within 5 Business Days of
\n delivery of a written request from Parent for such action, (v) the
\n board of directors of Company shall have determined that a Competing
\n Transaction was a Superior Proposal and to take any of the actions
\n allowed by clause (ii) of Section 6.04 (and shall not have, prior to
\n Parent’s termination of this Agreement pursuant to this Section
\n 9.01(d)(v), (x) reconfirmed its approval and recommendation of this
\n Agreement and (y) recommended against acceptance of such Superior
\n Proposal by its shareholders), or (vi) the board of directors of
\n Company resolves to take any of the actions described above;<\/p>\n
(e) by Parent or Company, if this Agreement and the Merger
\n shall fail to receive the requisite votes for approval at the Company
\n Shareholders’ Meeting or any adjournment or postponement thereof;<\/p>\n
(f) by Parent, 10 Business Days after receipt by Company of a
\n written notice from Parent of a breach of any representation,
\n warranty, covenant or agreement on the part of Company set forth in
\n this Agreement, or if any representation or warranty of Company shall
\n have become untrue, incomplete or incorrect, in either case such that
\n the conditions set forth in Section 8.03 would not be satisfied (a
\n “TERMINATING COMPANY BREACH”); provided, however, that if such
\n Terminating Company Breach is curable by Company through the exercise
\n of its reasonable efforts within 10 days and for so long as Company
\n continues to exercise such reasonable efforts, Parent may not
\n terminate this Agreement under this Section 9.01(f); and provided,
\n further that the preceding proviso shall not in any event be deemed to
\n extend any date set forth in paragraph (b) of this Section 9.01;<\/p>\n
(g) by Company, 10 Business Days after receipt by Parent of a
\n written notice from Company of breach of any representation, warranty,
\n covenant or agreement on the part of Parent set forth in this
\n Agreement, or if any representation or warranty of Parent shall have
\n become untrue, incomplete or incorrect, in either case such that the
\n conditions set forth in Section 8.02 would not be satisfied (a
\n “TERMINATING PARENT BREACH”); provided, however, that if such
\n Terminating Parent Breach is curable by Parent through the exercise of
\n its reasonable efforts within 10 days and for so long as Parent
\n continues to exercise such reasonable efforts, Company may not
\n terminate this Agreement under this Section 9.01(g); and provided,
\n further that the preceding proviso shall not in any event be deemed to
\n extend any date set forth in paragraph (b) of this Section 9.01; or<\/p>\n
44<\/p>\n
(h) by Company, if (i) the board of directors of Company
\n authorizes Company, subject to complying with the terms of this
\n Agreement, to enter into a binding written agreement concerning a
\n transaction that constitutes a Superior Proposal and Company notifies
\n Parent in writing that it intends to enter into such an agreement,
\n attaching the most current version of such agreement (or description
\n of all material terms and conditions thereof) to such notice, (ii)
\n Parent does not make, within three Business Days of receipt of
\n Company’s written notification of its intention to enter into a
\n binding agreement for a Superior Proposal, an offer that the board of
\n directors of Company determines, in good faith after consultation with
\n its financial advisors, is at least as favorable to the shareholders
\n of Company as the Superior Proposal, it being understood that Company
\n shall not enter into any such binding agreement during such three-day
\n period and (iii) Company prior to such termination pursuant to this
\n clause (h) pays to Parent in immediately available funds the fees
\n required to be paid pursuant to Section 9.05(b), provided, that
\n Company shall not be permitted to terminate this Agreement pursuant to
\n this Section 9.01(h) if such Superior Proposal is attributable to a
\n violation by Company of its obligations under Section 6.05 and such
\n Superior Proposal did not otherwise result from a breach of any of
\n Company’s obligations under this Agreement.<\/p>\n
The right of any party hereto to terminate this Agreement
\npursuant to this Section 9.01 will remain operative and in full force and effect
\nregardless of any investigation made by or on behalf of any party hereto, any
\nperson controlling any such party or any of their respective officers,
\ndirectors, representatives or agents, whether prior to or after the execution of
\nthis Agreement.<\/p>\n
SECTION 9.02 Effect of Termination<\/p>\n
Except as provided in Section 9.05, in the event of
\ntermination of this Agreement pursuant to Section 9.01, this Agreement shall
\nforthwith become void, there shall be no liability under this Agreement on the
\npart of any party hereto or any of its Affiliates or any of its or their
\nofficers or directors, and all rights and obligations of each party hereto shall
\ncease; provided, however, that nothing herein shall relieve any party hereto
\nfrom liability for the willful or intentional breach of any of its
\nrepresentations and warranties or the willful or intentional breach of any of
\nits covenants or agreements set forth in this Agreement. No termination of this
\nAgreement shall affect the obligation of the parties contained in the
\nConfidentiality Agreement, which shall survive termination of this Agreement and
\nremain in full force and effect in accordance with their terms.<\/p>\n
SECTION 9.03 Amendment<\/p>\n
This Agreement may be amended by the parties hereto by action
\ntaken by or on behalf of their respective boards of directors at any time prior
\nto the Effective Time; provided, however, that, after the approval of this
\nAgreement by the shareholders of Company, no amendment may be made that changes
\nthe amount or type of consideration into which Company Common Stock will be
\nconverted pursuant to this Agreement. This Agreement may not be amended except
\nby an instrument in writing signed by the parties hereto.<\/p>\n
45<\/p>\n
SECTION 9.04 Waiver<\/p>\n
At any time prior to the Effective Time, any party hereto may
\n(a) extend the time for or waive compliance with the performance of any
\nobligation or other act of any other party hereto, (b) waive any inaccuracy in
\nthe representations and warranties contained herein or in any document delivered
\npursuant hereto and (c) waive compliance by the other party with any of the
\nagreements or conditions contained herein. Any such extension or waiver shall be
\nvalid if set forth in an instrument in writing signed by the party or parties to
\nbe bound thereby.<\/p>\n
SECTION 9.05 Termination Fee; Expenses<\/p>\n
(a) Except as set forth in this Section 9.05, all Expenses
\nincurred in connection with this Agreement and the Merger shall be paid by the
\nparty incurring such Expenses, whether or not the Merger is consummated, except
\nthat Parent and Company each shall pay one-half of all Expenses (other than
\nattorneys’ and accountants’ fees and expenses) incurred solely for printing,
\nfiling and mailing the Registration Statement and the Proxy Statement and all
\nSEC and other regulatory filing fees incurred in connection with the
\nRegistration Statement and the Proxy Statement and any fees required to be paid
\nunder the HSR Act.<\/p>\n
(b) In the event that (i) Parent shall terminate this
\nAgreement pursuant to Section 9.01(d), (ii) Parent shall terminate this
\nAgreement due to a Terminating Company Breach of any covenant or agreement
\ncontained in this Agreement pursuant to Section 9.01(f), (iii) Company shall
\nterminate this Agreement pursuant to Section 9.01(h) or (iv) this Agreement
\nshall be terminated pursuant to Section 9.01(b) or pursuant to Section 9.01(e)
\nas a result of the failure to obtain the requisite approval of the Company
\nshareholders and (A) at or prior to such termination, there shall exist or have
\nbeen publicly proposed a Competing Transaction with respect to Company and (B)
\nwithin 12 months after such termination, Company shall enter into a definitive
\nagreement with respect to any Competing Transaction or any Competing Transaction
\ninvolving Company shall be consummated, then, in the case of (i), (ii) or (iii),
\npromptly after such termination, or in the case of (iv), immediately before the
\nexecution and delivery of such agreement or such consummation, Company shall pay
\nto Parent (the “TERMINATION FEE”) a sum equal to all of Parent’s Expenses and an
\nadditional amount equal to $8,600,000. In the event of termination of this
\nAgreement by Company pursuant to Section 9.01(g), Parent shall pay to Company an
\namount equal to all of Company’s Expenses.<\/p>\n
(c) Parent and Company agree that the agreements contained in
\nSection 9.05(b) above are an integral part of the transaction contemplated by
\nthis Agreement and constitute liquidated damages and not a penalty. Accordingly,
\nif Company fails to pay to Parent any amounts due under Section 9.05(b), Company
\nshall pay the cash and expenses (including legal fees and expenses) in
\nconnection with any action, including the filing of any lawsuit of other legal
\naction, taken to collect payment, together with interest on such amounts at the
\nprime rate of Citibank, N.A. in effect on the date such payment was required to
\nbe made.<\/p>\n
46<\/p>\n
ARTICLE X<\/p>\n
GENERAL PROVISIONS<\/p>\n
SECTION 10.01 Non-Survival of Representations and Warranties<\/p>\n
The representations and warranties in this Agreement shall
\nterminate at the Effective Time or upon the termination of this Agreement
\npursuant to Section 9.01, as the case may be. This Section 10.01 shall not limit
\nany covenant or agreement of the parties which by its terms contemplates
\nperformance after the Effective Time.<\/p>\n
SECTION 10.02 Notices<\/p>\n
All notices, requests, claims, demands and other
\ncommunications hereunder shall be in writing and shall be given (and shall be
\ndeemed to have been duly given upon receipt) by delivery in person, by telecopy
\nor facsimile, by registered or certified mail (postage prepaid, return receipt
\nrequested) or by a nationally recognized courier service to the respective
\nparties at the following addresses (or at such other address for a party as
\nshall be specified in a notice given in accordance with this Section 10.02):<\/p>\n
(a) if to Company:<\/p>\n
NetCreations, Inc.
\n 379 West Broadway, Suite 202
\n New York, New York 10012
\n Attention: Brian Burlant
\n Telecopier: (212) 274-9266<\/p>\n
with a copy to:<\/p>\n
Piper, Marbury, Rudnick & Wolfe LLP
\n 1251 Avenue of the Americas
\n New York, New York 10020
\n Attention: Andrew J. Cosentino
\n Telecopier: (212) 835-6001<\/p>\n
(b) if to Parent or Merger Sub:<\/p>\n
DoubleClick Inc.
\n 450 West 33rd Street
\n New York, New York 10001
\n Attention: Elizabeth Wang, General Counsel
\n Telecopier: (212) 287-9704<\/p>\n
47<\/p>\n
with a copy to:<\/p>\n
Brobeck, Phleger & Harrison LLP
\n 1633 Broadway, 47th Floor
\n New York, New York 10019
\n Attention: Eric Simonson
\n Telecopier: (212) 586-7878<\/p>\n
SECTION 10.03 Severability<\/p>\n
If any term or other provision of this Agreement is invalid,
\nillegal or incapable of being enforced by any rule of Law or public policy, all
\nother conditions and provisions of this Agreement shall nevertheless remain in
\nfull force and effect so long as the economic or legal substance of the Merger
\nis not affected in any manner materially adverse to any party. Upon such
\ndetermination that any term or other provision is invalid, illegal or incapable
\nof being enforced, the parties hereto shall negotiate in good faith to modify
\nthis Agreement so as to effect the original intent of the parties as closely as
\npossible in a mutually acceptable manner to the fullest extent permitted by
\napplicable Law in order that the Merger may be consummated as originally
\ncontemplated to the fullest extent possible.<\/p>\n
SECTION 10.04 Assignment; Binding Effect; Benefit<\/p>\n
Neither this Agreement nor any of the rights, interests or
\nobligations hereunder shall be assigned by any of the parties hereto (whether by
\noperation of Law or otherwise) without the prior written consent of the other
\nparties hereto. Subject to the preceding sentence, this Agreement shall be
\nbinding upon and shall inure to the benefit of the parties hereto and their
\nrespective successors and permitted assigns. Notwithstanding anything contained
\nin this Agreement to the contrary, other than Section 7.04, nothing in this
\nAgreement, expressed or implied, is intended to confer on any person other than
\nthe parties hereto or their respective successors and permitted assigns any
\nrights or remedies under or by reason of this Agreement.<\/p>\n
SECTION 10.05 Incorporation of Exhibits<\/p>\n
The Parent Disclosure Schedule, the Company Disclosure
\nSchedule and all Annexes attached hereto and referred to herein are hereby
\nincorporated herein and made a part of this Agreement for all purposes as if
\nfully set forth herein.<\/p>\n
SECTION 10.06 Governing Law<\/p>\n
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
\nENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK OTHER THAN
\nCONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY LAW OTHER
\nTHAN THAT OF NEW YORK. COURTS WITHIN THE STATE OF NEW YORK (LOCATED WITHIN THE
\nCITY OF NEW YORK) WILL HAVE JURISDICTION OVER ALL DISPUTES BETWEEN THE PARTIES
\nHERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS,
\nINSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES HEREBY CONSENT TO AND
\nAGREE TO SUBMIT TO THE JURISDICTION OF SUCH<\/p>\n
48<\/p>\n
COURTS. EACH OF THE PARTIES HERETO WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH
\nDISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I)
\nSUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II)
\nSUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED
\nBY SUCH COURTS OR (III) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN
\nAN INCONVENIENT FORUM.<\/p>\n
SECTION 10.07 Waiver of Jury Trial<\/p>\n
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
\nBY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
\nOUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT
\nCONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION,
\nADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.<\/p>\n
SECTION 10.08 Headings; Interpretation<\/p>\n
The descriptive headings contained in this Agreement are
\nincluded for convenience of reference only and shall not affect in any way the
\nmeaning or interpretation of this Agreement. The parties have participated
\njointly in the negotiation and drafting of this Agreement. In the event an
\nambiguity or question of intent or interpretation arises, this Agreement shall
\nbe construed as if drafted jointly by the parties, and no presumption or burden
\nof proof shall arise favoring or disfavoring any party by virtue of the
\nauthorship of any provisions of this Agreement.<\/p>\n
SECTION 10.09 Counterparts<\/p>\n
This Agreement may be executed and delivered (including by
\nfacsimile transmission) in one or more counterparts, and by the different
\nparties hereto in separate counterparts, each of which when executed and
\ndelivered shall be deemed to be an original but all of which taken together
\nshall constitute one and the same agreement.<\/p>\n
SECTION 10.10 Entire Agreement<\/p>\n
This Agreement (including the Annexes, the Schedules, the
\nParent Disclosure Schedule and the Company Disclosure Schedule) and the
\nConfidentiality Agreement constitute the entire agreement among the parties with
\nrespect to the subject matter hereof and supersede all prior agreements and
\nunderstandings among the parties with respect thereto. No addition to or
\nmodification of any provision of this Agreement shall be binding upon any party
\nhereto unless made in writing and signed by all parties hereto.<\/p>\n
49<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this
\nAgreement and Plan of Merger and Reorganization to be executed as of the date
\nfirst written above by their respective officers thereunto duly authorized.<\/p>\n
DOUBLECLICK INC.<\/p>\n
By: \/s\/ Jeff Epstein
\n ———————————
\n Name: Jeff Epstein
\n Title: Executive Vice President<\/p>\n
NETCREATIONS, INC.<\/p>\n
By: \/s\/ Rosalind Resnick
\n ———————————
\n Name: Rosalind Resnick
\n Title: Chief Executive Officer<\/p>\n
GENESIS MERGER SUB, INC.<\/p>\n
By: \/s\/ Jeff Epstein
\n ———————————
\n Name: Jeff Epstein
\n Title: Executive Vice President
\n and Secretary<\/p>\n
ANNEX A<\/p>\n
FORM OF COMPANY SHAREHOLDERS’ AGREEMENT<\/p>\n
This COMPANY SHAREHOLDERS’ AGREEMENT (this “Agreement”) is
\nmade and entered into as of October 2, 2000 by and among DoubleClick Inc., a
\nDelaware corporation (“Parent”), and the undersigned shareholders (each, a
\n“Shareholder” and collectively, the “Shareholders”) of NetCreations, Inc., a New
\nYork corporation (“Company”). Capitalized terms used and not otherwise defined
\nherein shall have the respective meanings set forth in the Merger Agreement
\ndescribed below.<\/p>\n
RECITALS<\/p>\n
WHEREAS, pursuant to an Agreement and Plan of Merger and
\nReorganization, dated as of the date hereof, among Parent, Genesis Merger Sub,
\nInc., a New York corporation and a wholly owned subsidiary of Parent (“Merger
\nSub”), and Company (such agreement as it may be amended is hereinafter referred
\nto as the “Merger Agreement”), Parent has agreed to acquire the outstanding
\nsecurities of Company pursuant to a statutory merger of Merger Sub with and into
\nCompany (the “Merger”) in which each outstanding share of capital stock of
\nCompany (the “Company Capital Stock”) will be converted into shares of common
\nstock, par value $0.001 per share, of Parent (the “Parent Shares”) at the
\nExchange Ratio set forth in the Merger Agreement (the “Transaction”);<\/p>\n
WHEREAS, in order to induce Parent to enter into the Merger
\nAgreement and consummate the Transaction, Company has agreed to use its
\nreasonable best efforts to cause certain shareholders of Company to execute and
\ndeliver to Parent a Company Shareholders’ Agreement upon the terms set forth
\nherein; and<\/p>\n
WHEREAS, each Shareholder is the registered and beneficial
\nowner of such number of shares of the outstanding capital stock of Company as is
\nindicated on the signature page of this Agreement under the heading “Total
\nNumber of Shares of Company Capital Stock owned on the date hereof”, and such
\nShareholder desires to make the number of shares indicated on the signature page
\nof this Agreement under the heading “Total Number of Shares of Company Capital
\nStock subject to this Agreement” (the “Shares”) subject to the terms of this
\nAgreement.<\/p>\n
NOW, THEREFORE, the parties agree as follows:<\/p>\n
1. Ownership of Shares; Transfer. (a)Each Shareholder
\nrepresents and warrants to Parent that such Shareholder is the beneficial owner
\nof (i.e., has sole or shared voting or investment power with respect to) the
\nShares. The Shares constitute a portion of such Shareholder’s interest in the
\noutstanding capital stock and voting securities of Company. The Shares are free
\nand clear of any liens, claims, options, charges or other encumbrances. Such
\nShareholder’s principal residence or place of business is accurately set forth
\non the signature page hereto. As used herein, the term “Expiration Date” shall
\nmean the earlier to occur of (i) the Effective Time or (ii) termination of the
\nMerger Agreement in accordance with the terms thereof.<\/p>\n
A-1<\/p>\n
(b) Shareholder agrees not to transfer (except as may be
\nspecifically required by court order or by operation of law, in which case any
\nsuch transferee shall agree to be bound hereby), sell, exchange, pledge or
\notherwise dispose of or encumber any Shares, or to make any offer or agreement
\nrelating thereto, at any time prior to the Expiration Date.<\/p>\n
2. Agreement to Vote Shares. Prior to the Expiration Date, at
\nevery meeting of the shareholders of Company at which any of the following is
\nconsidered or voted upon, and at every adjournment thereof, and on every action
\nor approval by written resolution of the shareholders of Company with respect to
\nany of the following, each Shareholder shall vote, or, using such Shareholder’s
\nbest efforts, and to the full extent legally permitted, cause the holder of
\nrecord to vote the Shares as to which such Shareholder then has voting control,
\nin favor of approval and adoption of the Merger Agreement and of the
\nTransaction.<\/p>\n
Notwithstanding the foregoing, nothing in this Agreement shall
\nlimit or restrict any Shareholder from (i) acting in his or her capacity as a
\ndirector or officer of Company, to the extent applicable, it being understood
\nthat this Agreement shall apply to each Shareholder solely in his or her
\ncapacity as a shareholder of Company or (ii) voting in his or her sole
\ndiscretion on any matter other than those matters referred to in the first
\nparagraph of this Section 2.<\/p>\n
3. Irrevocable Proxy. Each Shareholder hereby agrees to timely
\ndeliver to Parent a duly executed proxy in the form attached hereto as Annex A
\n(the “Proxy”), such Proxy to cover the Shares in respect of which such
\nShareholder is entitled to vote at each meeting of the shareholders of Company
\nand held by such Shareholder as of the record date for such meeting (including,
\nwithout limitation, each written consent in lieu of a meeting). In the event
\nthat any Shareholder is unable to provide any such Proxy in a timely manner,
\nsuch Shareholder hereby grants Parent a power of attorney to execute and deliver
\nsuch Proxy for and on behalf of such Shareholder, such power of attorney, which
\nbeing coupled with an interest, shall survive any death, disability, bankruptcy
\nor any other such impediment of such Shareholder. Upon the execution of this
\nAgreement by each Shareholder, such Shareholder hereby revokes any and all prior
\nproxies or powers of attorney given by such Shareholder with respect to the
\nShares and agrees not to grant any subsequent proxies or powers of attorney with
\nrespect to the Shares until after the Expiration Date.<\/p>\n
4. Representations, Warranties and Covenants of Shareholder.
\nEach Shareholder hereby represents, warrants and covenants to Parent as follows:<\/p>\n
(a) Each Shareholder has full power, authority and legal
\ncapacity to execute and deliver this Agreement, to perform its obligations
\nhereunder and to consummate the transactions contemplated hereby. This Agreement
\nhas been duly and validly executed and delivered by such Shareholder and
\nconstitutes the valid and binding obligation of such Shareholder, enforceable
\nagainst such Shareholder in accordance with its terms, except as may be limited
\nby (i) the effect of bankruptcy, insolvency, conservatorship, arrangement,
\nmoratorium or other laws affecting or relating to the rights of creditors
\ngenerally, or (ii) the rules governing the availability of specific performance,
\ninjunctive relief or other equitable remedies and general principles of equity,
\nregardless of whether considered in a proceeding in equity or at law. The
\nexecution and delivery of this Agreement by such Shareholder does not, and the
\nperformance of such Shareholder’s obligations hereunder will not, result in any
\nbreach of or constitute a default <\/p>\n
A-2<\/p>\n
(or an event that with notice or lapse of time or both would become a default)
\nunder, or give to others any right to terminate, amend, accelerate or cancel any
\nright or obligation under, or result in the creation of any lien or encumbrance
\non any Shares pursuant to, any note, bond, mortgage, indenture, contract,
\nagreement, lease, license, permit, franchise or other instrument or obligation
\nto which such Shareholder is a party or by which such Shareholder or the Shares
\nare or will be bound or affected.<\/p>\n
(b) Except to the extent otherwise permitted under Section
\n6.04 of the Merger Agreement, until the Expiration Date, each Shareholder, in
\nthe Shareholder’s capacity as a Shareholder, will not (and will use such
\nShareholder’s reasonable best efforts to cause its affiliates, officers,
\ndirectors and employees and any investment banker, attorney, accountant or other
\nagent retained by such Shareholder, not to): (i) initiate or solicit, directly
\nor indirectly, any proposal, plan or offer to acquire all or any material part
\nof the business or properties or capital stock of Company, whether by merger,
\npurchase of assets, tender offer or otherwise, or to liquidate Company or
\notherwise distribute to the shareholders of Company all or any substantial part
\nof the business, properties or capital stock of Company (each, an “Acquisition
\nProposal”); (ii) initiate, directly or indirectly, any contact with any person
\nin an effort to or with a view towards soliciting any Acquisition Proposal;
\n(iii) furnish information concerning Company’s business, properties or assets to
\nany corporation, partnership, person or other entity or group (other than
\nParent, or any associate, agent or representative of Parent) under any
\ncircumstances that could reasonably be expected to relate to an actual or
\npotential Acquisition Proposal; or (iv) negotiate or enter into discussions or
\nan agreement, directly or indirectly, with any entity or group with respect of
\nany potential Acquisition Proposal. In the event any Shareholder, in such
\nShareholder’s capacity as a Shareholder, shall receive or become aware of any
\nAcquisition Proposal subsequent to the date hereof, such Shareholder shall
\npromptly inform Parent as to any such matter and the details thereof to the
\nextent possible without breaching any other agreement to which such Shareholder
\nis a party or violating its fiduciary duties.<\/p>\n
(c) Each Shareholder understands and agrees that if any
\nShareholder attempts to vote or provide any other person with the authority to
\nvote any of the Shares held by such Shareholder as of the record date for any
\nmeeting at which such Shares are to be voted other than in compliance with this
\nAgreement, Company shall not, and such Shareholder hereby unconditionally and
\nirrevocably instructs Company to not record such vote unless and until such
\nShareholder shall have complied with the terms of this Agreement.<\/p>\n
5. No Limitation on Discretion as Director. If any Shareholder
\nis a natural person and is a member of the board of directors of Company, then
\nthis Agreement will apply to the exercise by such Shareholder in his or her
\nindividual capacity of rights attaching to ownership of the Shares, and nothing
\nherein shall be deemed to apply to, or to limit in any manner the discretion of
\nsuch Shareholder with respect to, any action which may be taken or omitted by
\nhim or her acting in his or her fiduciary capacity as a director of Company.<\/p>\n
6. Additional Documents. Each Shareholder hereby covenants and
\nagrees to execute and deliver any additional documents necessary or desirable,
\nin the reasonable opinion of Parent, to carry out the purpose and intent of this
\nAgreement.<\/p>\n
A-3<\/p>\n
7. Consent and Waiver. Each Shareholder hereby gives any
\nconsents or waivers that are reasonably required for the consummation of the
\nTransaction under the terms of any agreement to which such Shareholder is a
\nparty; provided, however, that such Shareholder shall not be required by this
\nSection 7 to give any consent or deliver in his or her capacity as a director or
\nofficer of Company.<\/p>\n
8. Termination. This Agreement and the Proxy delivered in
\nconnection herewith shall terminate and shall have no further force or effect as
\nof the Expiration Date.<\/p>\n
9. Confidentiality. Each Shareholder agrees (i) to hold any
\ninformation regarding this Agreement and the Transaction in strict confidence,
\nand (ii) not to divulge any such information to any third person, except to the
\nextent any of the same is hereafter publicly disclosed by Parent.<\/p>\n
10. Miscellaneous.<\/p>\n
10.1 Severability. If any term, provision, covenant or
\nrestriction of this Agreement is held by a court of competent jurisdiction to be
\ninvalid, void or unenforceable, then the remainder of the terms, provisions,
\ncovenants and restrictions of this Agreement shall remain in full force and
\neffect and shall in no way be affected, impaired or invalidated.<\/p>\n
10.2 Binding Effect and Assignment. This Agreement and all of
\nthe provisions hereof shall be binding upon and inure to the benefit of the
\nparties hereto and their respective successors and permitted assigns, but,
\nexcept as otherwise specifically provided herein, neither this Agreement nor any
\nof the rights, interests or obligations of the parties hereto may be assigned by
\neither of the parties without the prior written consent of the other. This
\nAgreement is intended to bind each Shareholder solely as a securityholder of
\nCompany only with respect to the specific matters set forth herein.<\/p>\n
10.3 Amendment and Modification. This Agreement may not be
\nmodified, amended, altered or supplemented except by the execution and delivery
\nof a written agreement executed by the parties hereto.<\/p>\n
10.4 Specific Performance; Injunctive Relief. The parties
\nhereto acknowledge that Parent will be irreparably harmed and that there will be
\nno adequate remedy at law for a violation of any of the covenants or agreements
\nof each Shareholder set forth herein. Therefore, it is agreed that, in addition
\nto any other remedies that may be available to Parent upon any such violation,
\nParent shall have the right to enforce such covenants and agreements by specific
\nperformance, injunctive relief or by any other means available to Parent at law
\nor in equity.<\/p>\n
10.5 Notices. All notices, requests, demands or other
\ncommunications that are required or may be given pursuant to the terms of this
\nAgreement shall be in writing and shall be deemed to have been duly given (a)
\nwhen delivered, if delivered by hand, (b) one business day after transmitted, if
\ntransmitted by a nationally recognized overnight courier service, (c) when
\ntelecopied, if telecopied (which is confirmed), or (d) three business days after
\nmailing, if mailed by registered or certified mail (return receipt requested),
\nto the parties at the following addresses:<\/p>\n
A-4<\/p>\n
(a) If to any Shareholder, at the address set forth below such
\nShareholder’s signature at the end hereof.<\/p>\n
(b) if to Parent, to:<\/p>\n
DoubleClick Inc.
\n 450 West 33rd Street
\n New York, New York 1001
\n Attention: Elizabeth Wang, General Counsel
\n Facsimile No: (212) 287-9704<\/p>\n
with a copy to:<\/p>\n
Brobeck, Phleger & Harrison LLP
\n 1633 Broadway, 47th Floor
\n New York, New York 10019
\n Attention: Eric Simonson
\n Facsimile No.: (212) 586-7878<\/p>\n
or to such other address as any party hereto may designate for itself by notice
\ngiven as herein provided.<\/p>\n
10.6 Governing Law. This Agreement shall be governed by,
\nconstrued and enforced in accordance with the internal laws of the State of New
\nYork without giving effect to the principles of conflicts of law thereof.<\/p>\n
10.7 Entire Agreement. This Agreement and the Proxy contain
\nthe entire understanding of the parties in respect of the subject matter hereof,
\nand supersede all prior negotiations and understandings between the parties with
\nrespect to such subject matter.<\/p>\n
10.8 Counterpart. This Agreement may be executed in several
\ncounterparts, each of which shall be an original, but all of which together
\nshall constitute one and the same agreement.<\/p>\n
10.9 Effect of Headings. The section headings herein are for
\nconvenience only and shall not affect the construction or interpretation of this
\nAgreement.<\/p>\n
[Remainder of page intentionally left blank.]<\/p>\n
A-5<\/p>\n
Annex A<\/p>\n
IRREVOCABLE PROXY<\/p>\n
TO VOTE STOCK OF<\/p>\n
NETCREATIONS, INC.<\/p>\n
The undersigned shareholder of NetCreations, Inc., a New York
\ncorporation (“Company”), hereby irrevocably (to the full extent permitted by New
\nYork Business Corporation Law) appoints the members of the board of directors of
\nDoubleClick Inc., a Delaware corporation (“Parent”), and each of them, or any
\nother designee of Parent, as the sole and exclusive attorneys and proxies of the
\nundersigned, with full power of substitution and resubstitution, to vote and
\nexercise all voting and related rights (to the full extent that the undersigned
\nis entitled to do so) with respect to the shares of capital stock of Company
\nindicated on the signature page hereto that are beneficially owned by the
\nundersigned (collectively, the “Shares”) in accordance with the terms of this
\nIrrevocable Proxy until the Expiration Date (as defined below). Upon the
\nundersigned’s execution of this Irrevocable Proxy, any and all prior proxies
\ngiven by the undersigned with respect to any Shares are hereby revoked and the
\nundersigned agrees not to grant any subsequent proxies with respect to the
\nShares until after the Expiration Date.<\/p>\n
This Irrevocable Proxy is irrevocable (to the extent provided
\nin New York Business Corporation Law) until the Expiration Date, is coupled with
\nan interest and is granted in consideration of Parent entering into that certain
\nAgreement and Plan of Merger and Reorganization (the “Merger Agreement”), among
\nParent, Genesis Merger Sub, Inc., a New York corporation and a wholly owned
\nsubsidiary of Parent (“Merger Sub”), and Company, which Merger Agreement
\nprovides for the merger of Merger Sub with and into Company (the “Merger”). As
\nused herein, the term “Expiration Date” shall mean the earlier to occur of (i)
\nsuch date and time as the Merger shall become effective in accordance with the
\nterms and provisions of the Merger Agreement, and (ii) the date of termination
\nof the Merger Agreement.<\/p>\n
The attorneys and proxies named above, and each of them are
\nhereby authorized and empowered by the undersigned, at any time prior to the
\nExpiration Date, to act as the undersigned’s attorney and proxy to vote the
\nShares, and to exercise all voting and other rights of the undersigned with
\nrespect to the Shares (including, without limitation, the power to execute and
\ndeliver written consents pursuant to the New York Business Corporation Law), at
\nevery annual, special or adjourned meeting of the shareholders of Company and in
\nevery written consent in lieu of such meeting, in favor of approval and adoption
\nof the Merger Agreement and of the transactions contemplated thereby.<\/p>\n
The attorneys and proxies named above may not exercise this
\nIrrevocable Proxy on any other matter except as provided above. The undersigned
\nshareholder may vote the Shares on all other matters.<\/p>\n
All authority herein conferred shall survive the death or
\nincapacity of the undersigned and any obligation of the undersigned hereunder
\nshall be binding upon the heirs, personal representatives, successors and
\nassigns of the undersigned.<\/p>\n
This Irrevocable Proxy is coupled with an interest as
\naforesaid and is irrevocable.<\/p>\n
Dated: October 2, 2000
\n ————————————-
\n (Signature of Shareholder)<\/p>\n
————————————-
\n (Print Name of Shareholder)<\/p>\n
Shares subject to this Irrevocable Proxy :<\/p>\n
__________ shares of Company Common Stock<\/p>\n
2<\/p>\n
ANNEX B<\/p>\n
RESTATED CERTIFICATE OF INCORPORATION<\/p>\n
OF<\/p>\n
NETCREATIONS, INC.<\/p>\n
(Pursuant to Section 807 of the New York Business Corporation Law)<\/p>\n
1. The name of the Corporation is NetCreations, Inc. The
\nCorporation’s Certificate of Incorporation was originally filed with the
\nSecretary of State of the State of New York on January 17, 1996.<\/p>\n
2. The amendments to the Certificate of Incorporation set
\nforth herein in full were authorized in the following manner: This Restated
\nCertificate of Incorporation was approved in its entirety by the consent in
\nwriting of all of the members of the Board of Directors of the Corporation,
\nfollowed by the requisite vote of the holders of outstanding shares of the
\nCorporation.<\/p>\n
3. This Restated Certificate of Incorporation amends and
\nchanges the Corporation’s Certificate of Incorporation as authorized by the
\nCorporation’s Board of Directors and shareholders in accordance with the
\nrequirements of the New York Business Corporation Law. The amendments to the
\nCertificate of Incorporation set forth in full herein relate to the following:<\/p>\n
(a) Article Fourth. Article Fourth is amended to cancel
\n5,000,000 Preferred shares of stock, none of which are issued or outstanding.<\/p>\n
(b) Article Fifth. Article Fifth, which disallows preemptive
\nor preferential rights, is hereby revoked.<\/p>\n
(c) Article Sixth. Article Sixth, which expressly authorizes
\nthe Board of Directors to adopt, amend or repeal the By-Laws of the Corporation,
\nis hereby revoked.<\/p>\n
(d) Article Eighth. Article Eighth is hereby renumbered
\nArticle Sixth, and the provisions of Article Eighth delineating indemnification
\nprocedures are hereby revoked and replaced with a general provision that
\nprovides for indemnification of any and all persons whom the corporation shall
\nhave power to indemnify from and against any and all expenses and liabilities
\npursuant to Article 7 of the Business Corporation Law.<\/p>\n
(e) Article Ninth. Article Ninth, which sets forth the right
\nof shareholders to nominate and introduce business at shareholder meetings, is
\nhereby revoked.<\/p>\n
(f) Article Tenth. Article Tenth, is hereby renumbered Article
\nEighth and is amended to eliminate the requirement for a meeting to take action,
\npermitting, instead, written consent, signed by the holders of outstanding
\nshares having not less than the minimum number of votes that would be necessary
\nto authorize or take such action at a meeting pursuant to Section 615 of the
\nBusiness Corporation Law.<\/p>\n
(g) Article Eleventh. Article Eleventh, which governs the
\nrights of certain persons to call special meetings of shareholders, is hereby
\nrevoked.<\/p>\n
(h) Article Twelfth. Article Twelfth is hereby renumbered
\nArticle Fifth and amended to change the post office address where service of
\nprocess shall be mailed from 379 West Broadway, Suite 202, New York, New York
\n10012 to Elizabeth Wang, General Counsel, DoubleClick Inc., 450 West 33rd
\nStreet, New York, New York 10001.<\/p>\n
(i) Article Thirteenth. Article Thirteenth, which reserves the
\nright to amend, alter, change or repeal any provision contained in the
\ncertificate, is hereby revoked.<\/p>\n
4. The text of the Certificate of Incorporation is hereby
\namended and restated to read as herein set forth in full:<\/p>\n
FIRST: The name of the corporation is NetCreations, Inc.<\/p>\n
SECOND: The corporation is formed for the following purpose or
\npurposes:<\/p>\n
To engage in any lawful act or activity for which corporations
\n may be organized under the Business Corporation Law, provided that the
\n corporation is not formed to engage in any act or activity requiring
\n the consent or approval of any state official, department, board,
\n agency, or other body without such consent or approval first being
\n obtained.<\/p>\n
THIRD: The office of the corporation is to be located in the
\nCounty of New York, State of New York.<\/p>\n
FOURTH: The aggregate number of shares which the corporation
\nshall have authority to issue is 50,000,000 shares, all of which are of a par
\nvalue $0.01 per share, and all of which are of the same class.<\/p>\n
FIFTH: The Secretary of State is designated as the agent of
\nthe corporation upon whom process against the corporation may be served. The
\npost office address within the State of New York to which the Secretary of State
\nshall mail a copy of any process against the corporation served upon him is:
\nElizabeth Wang, DoubleClick Inc., 450 West 33rd Street, New York, NY 10001.<\/p>\n
SIXTH: The corporation shall, to the fullest extent permitted
\nby Article 7 of the Business Corporation Law, as the same may be amended and
\nsupplemented, indemnify any and all persons whom it shall have power to
\nindemnify under said Article from and against any and all of the expenses,
\nliabilities, or other matters referred to in or covered by said Article, and the
\nindemnification provided for herein shall not be deemed exclusive of any other
\nrights to which any person may be entitled under any By-Law, resolution of
\nshareholders, resolution of directors, agreement, or otherwise, as permitted by
\nsaid Article, as to action in any capacity in which he served at the request of
\nthe corporation.<\/p>\n
B-2<\/p>\n
SEVENTH: The personal liability of the directors of the
\ncorporation is eliminated to the fullest extent permitted by the provisions of
\nparagraph (b) of Section 402 of the Business Corporation Law, as the same may be
\namended and supplemented.<\/p>\n
EIGHTH: Whenever under the provisions of the Business
\nCorporation Law shareholders are required or permitted to take any action by
\nvote, such action may be taken without a meeting on written consent, signed by
\nthe holders of outstanding shares having not less than the minimum number of
\nvotes that would be necessary to authorize or take such action at a meeting at
\nwhich all shares entitled to vote thereon were present and voted, in accordance
\nwith the provisions of Section 615 of the Business Corporation Law.<\/p>\n
B-3<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Company
\nShareholders’ Agreement to be executed as of the date first above written.<\/p>\n
DOUBLECLICK INC. SHAREHOLDER<\/p>\n
By:
\n ————————– ——————————-
\nName: (Signature)
\n ————————
\nTitle:
\n ———————–
\n ——————————-
\n (Print Name of Shareholder)<\/p>\n
——————————-
\n (Print Street Address)<\/p>\n
——————————-
\n (Print City, State and Zip)<\/p>\n
——————————-
\n (Print Telephone Number)<\/p>\n
——————————-
\n (Print Facsimile Number)<\/p>\n
——————————-
\n (Social Security or Tax I.D. Number)<\/p>\n
Total Number of Shares of Company Capital Stock owned on the date hereof:<\/p>\n
Common Stock:
\n —————————
\nState of Residence:
\n —————————<\/p>\n
Total Number of Shares of Company Capital Stock subject to this Agreement:<\/p>\n
Common Stock:
\n —————————<\/p>\n
SIGNATURE PAGE TO COMPANY SHAREHOLDERS’ AGREEMENT<\/p>\n
ANNEX C<\/p>\n
FORM OF COMPANY AFFILIATE AGREEMENT<\/p>\n
October 2, 2000<\/p>\n
DoubleClick Inc.
\n450 West 33rd Street
\nNew York, New York 10001<\/p>\n
Ladies and Gentlemen:<\/p>\n
Pursuant to the terms of an Agreement and Plan of Merger and
\nReorganization, dated as of October 2, 2000 (the “Merger Agreement”), among
\nDoubleClick Inc., a Delaware corporation (“Parent”), Genesis Merger Sub, Inc., a
\nNew York corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and
\nNetCreations, Inc., a New York corporation (“Company”), Parent has agreed to
\nacquire Company through the merger of Merger Sub with and into Company (the
\n“Transaction”). Capitalized terms used without definition herein shall have the
\nmeanings set forth in the Merger Agreement.<\/p>\n
The undersigned has been advised that as of the date hereof
\nthe undersigned may be deemed to be (but does not hereby admit to be) an
\n“affiliate” of Company, as the term “affiliate” is (i) defined for purposes of
\nparagraphs (c) and (d) of Rule 145 of the rules and regulations (the “Rules and
\nRegulations”) of the Securities and Exchange Commission (the “SEC”) promulgated
\nunder the Securities Act of 1933, as amended (the “Securities Act”), and\/or (ii)
\nused in and for purposes of Accounting Series Releases 130, 135 and 146 and
\nStaff Accounting Bulletin Two, as amended, of the SEC.<\/p>\n
The undersigned understands that the representations,
\nwarranties and covenants set forth herein will be relied upon by Parent, other
\nstockholders of Parent, Merger Sub, Company and their respective counsel and
\naccounting firms. Except to the extent written notification to the contrary is
\nreceived by Parent from the undersigned prior to the consummation of the
\nTransaction, the representations and warranties contained herein shall be
\naccurate at all times from the date hereof through the Effective Time.<\/p>\n
The undersigned represents and warrants to, and agrees with,
\nParent that:<\/p>\n
1. The undersigned has full power, authority and legal
\ncapacity to execute and deliver this Company Affiliate Agreement and to make the
\nrepresentations and warranties set forth herein and to perform the undersigned’s
\nobligations hereunder;<\/p>\n
2. The undersigned has carefully read this Company Affiliate
\nAgreement and the Merger Agreement and discussed their requirements and other
\napplicable limitations upon the undersigned’s ability to sell, assign, transfer,
\npledge or otherwise dispose of or encumber Parent’s common stock, par value
\n$.001 per share (“Parent Common Stock”), to the extent the undersigned felt
\nnecessary, with the undersigned’s counsel or counsel for Company;<\/p>\n
C-1<\/p>\n
3. The undersigned is the beneficial owner of the number of
\nshares of Parent Common Stock (the “Shares”) set forth below, and did not
\nacquire any of the Shares in contemplation of the Transaction.<\/p>\n
4. The undersigned will not make any sale, assignment,
\ntransfer, pledge or other disposition of or encumbrance upon Parent Common Stock
\n(i) in violation of the Securities Act or the Rules and Regulations or (ii) to a
\ntransferee that has not agreed in writing to be bound hereby;<\/p>\n
5. The undersigned has been advised that the issuance of
\nParent Common Stock to the undersigned in connection with the Transaction has
\nbeen or will be registered with the SEC under the Securities Act on a
\nRegistration Statement on Form S-4. However, the undersigned has also been
\nadvised that, because at the time the Transaction was or will be submitted for a
\nvote of the shareholders of Company the undersigned may be deemed to be or have
\nbeen an affiliate of Company and the distribution by the undersigned of any
\nParent Common Stock has not been registered under the Securities Act, the
\nundersigned may not sell, assign, transfer, pledge or otherwise dispose of or
\nencumber Parent Common Stock issued to the undersigned in the Transaction unless
\n(i) such sale, assignment, transfer, pledge or other disposition or encumbrance
\nhas been registered under the Securities Act, (ii) such sale, assignment,
\ntransfer, pledge or other disposition or encumbrance is made in conformity with
\nthe volume and other limitations of Rule 145 or (iii) in the opinion of counsel
\nreasonably acceptable to Parent, such sale, assignment, transfer, pledge or
\nother disposition or encumbrance is otherwise exempt from registration under the
\nSecurities Act;<\/p>\n
6. The undersigned understands that, except as provided in the
\nMerger Agreement, Parent is under no obligation to register the sale,
\nassignment, transfer, pledge or other disposition or encumbrance of Parent
\nCommon Stock by the undersigned or on the undersigned’s behalf under the
\nSecurities Act or to take any other action necessary in order to make compliance
\nwith an exemption from such registration available;<\/p>\n
7. The undersigned also understands that Parent may impose
\nstop transfer instructions or elect to not permit the transfer of shares of
\nParent Common Stock or the issuance of a new certificate representing such
\nshares, and that there will be placed on the certificates for Parent Common
\nStock issued to the undersigned, or any substitutions therefor, a legend stating
\nin substance:<\/p>\n
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE
\n ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
\n THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES. THE
\n SECURITIES EVIDENCED BY THIS CERTIFICATE MAY ONLY BE
\n TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED
\n OCTOBER 2, 2000 BETWEEN THE REGISTERED HOLDER HEREOF AND
\n DOUBLECLICK INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE
\n PRINCIPAL OFFICES OF DOUBLECLICK INC.”<\/p>\n
C-2<\/p>\n
8. The undersigned also understands that, unless the sale,
\ntransfer, or other disposition by the undersigned of Parent Common Stock issued
\nto the undersigned has been registered under the Securities Act or is a sale
\nmade in conformity with the provisions of Rule 145, Parent reserves the right to
\nput the following legend on the certificates issued to any transferee of the
\nundersigned:<\/p>\n
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE
\n ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A
\n TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
\n ACT OF 1933, AS AMENDED, APPLIES, AND WERE NOT ACQUIRED BY THE
\n HOLDER WITH A VIEW TO TRANSFER, OR FOR RESALE IN CONNECTION
\n WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
\n SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES EVIDENCED
\n BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
\n SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
\n LAWS, AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF, UNLESS
\n SUCH SALE, TRANSFER, OR OTHER DISPOSAL IS MADE IN CONNECTION
\n WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
\n ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
\n LAWS OR IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SUCH
\n ACT, THE RULES AND REGULATIONS IN EFFECT THEREUNDER AND ANY
\n APPLICABLE STATE SECURITIES LAWS.”<\/p>\n
9. The legends set forth in paragraphs 7 and 8 above shall be
\nremoved by delivery of substitute certificates without such legend if the
\nundersigned shall have delivered to Parent a copy of a letter from the staff of
\nthe SEC, or an opinion of counsel in form and substance reasonably satisfactory
\nto Parent, to the effect that such legend is not required for purposes of the
\nSecurities Act.<\/p>\n
10. This Company Affiliate Agreement shall be governed by and
\nconstrued and enforced in accordance with the internal laws of the State of New
\nYork without giving effect to the principles of conflicts of laws thereof and
\nmay be executed in counterparts.<\/p>\n
(Signature Page Follows)<\/p>\n
C-3<\/p>\n
Very truly yours,<\/p>\n
———————————–<\/p>\n
———————————–
\n (print name)<\/p>\n
Number of Shares beneficially owned
\n as of the date hereof:<\/p>\n
———————-<\/p>\n
Accepted as of October 2, 2000<\/p>\n
DOUBLECLICK INC.<\/p>\n
By:
\n ————————
\nName:
\n ————————
\nTitle:
\n ————————<\/p>\n
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