\n 12.2 Indemnification by the Selling Shareholders……………………………………………… 47
\n 12.3 No Contribution………………………………………………………………………. 48
\n 12.4 Setoff………………………………………………………………………………. 48
\n 12.5 Defense of Third-Party Claims………………………………………………………….. 48
\n 12.6 Exercise of Remedies by Indemnitees Other than the Purchaser and by the Selling Shareholders….. 49<\/p>\n13. Non-Solicitation…………………………………………………………………………… 50<\/p>\n
14. Purchaser’s Tax Indemnity…………………………………………………………………… 50<\/p>\n
15. Miscellaneous……………………………………………………………………………… 51
\n 15.1 Further Assurances……………………………………………………………………. 51
\n 15.2 Fees and Expenses…………………………………………………………………….. 51
\n 15.3 Attorneys’ Fees………………………………………………………………………. 51
\n 15.4 Transfer Taxes; Final Tax Return……………………………………………………….. 51
\n 15.5 Governing Law; Arbitration…………………………………………………………….. 51
\n 15.6 Successors and Assigns………………………………………………………………… 52
\n 15.7 Entire Agreement……………………………………………………………………… 52
\n 15.8 Separability…………………………………………………………………………. 52
\n 15.9 Amendments…………………………………………………………………………… 52
\n 15.10 Notices………………………………………………………………………………. 52
\n 15.11 Publicity and Use of Confidential Information…………………………………………….. 54
\n 15.12 Counterparts………………………………………………………………………….. 54
\n 15.13 Delays or Omissions; Waivers……………………………………………………………. 54
\n 15.14 Remedies Cumulative; Specific Performance………………………………………………… 55
\n 15.15 Headings……………………………………………………………………………… 55
\n 15.16 Construction………………………………………………………………………….. 55
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
iv<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (the “AGREEMENT”) is entered into as
\nof June 10, 1999, by and among XOOM.com, Inc., a Delaware corporation (the
\n“PURCHASER”), Paralogic Software Corporation, a California corporation (the
\n“COMPANY”), and XMCM Sub, Inc., a California corporation and a wholly-owned
\nsubsidiary of the Purchaser (“MERGER SUB”), the Company and Merger Sub
\nsometimes being hereinafter collectively referred to as the “CONSTITUENT
\nCORPORATIONS,” and the undersigned individuals and Entities listed on
\nSchedule I attached hereto (collectively, the “SELLING SHAREHOLDERS”).
\nCertain capitalized terms in this Agreement are defined in Exhibit A attached
\nhereto.<\/p>\n
RECITALS<\/p>\n
A. The Board of Directors of the Purchaser, Merger Sub and the Company each
\n have determined that it is in the best interests of their respective
\n stockholders and shareholders, as the case may be, for the Purchaser to
\n acquire the Company by the merger of Merger Sub with and into the
\n Company upon the terms, and subject to the conditions, set forth herein
\n (the “MERGER”).<\/p>\n
B. For federal income tax purposes, it is intended that the Merger
\n constitute a reorganization under the provisions of Section 368 of the
\n Internal Revenue Code of 1986, as amended (the “CODE”) and that this
\n Agreement shall constitute a plan of reorganization for purposes of
\n Section 368 of the Code.<\/p>\n
AGREEMENT<\/p>\n
The Purchaser, the Company and Merger Sub, intending to be legally
\nbound, agree as follows:<\/p>\n
1. The Merger; Effective Time.<\/p>\n
1.1 The Merger.<\/p>\n
Subject to the terms and conditions of this Agreement, at the Effective
\nTime (as defined in Section 1.2 hereof), Merger Sub shall be merged with and
\ninto the Company, the Company shall be the surviving corporation in such
\nMerger (the “SURVIVING CORPORATION”), and will retain its existing name, and
\nthe separate existence of Merger Sub shall thereupon cease. The Merger shall
\nhave the effects set forth in Sections 1107 and 1108 of the General
\nCorporation Law of the State of California. Without limiting the generality
\nof the foregoing, and subject thereto, at the Effective Time all property,
\nrights, powers, privileges and franchises of Merger Sub shall vest in the
\nCompany as the Surviving Corporation, and all debts, liabilities and duties
\nof Merger Sub shall become the debts, liabilities and duties of the Surviving
\nCorporation. Immediately following the Effective Time, the Surviving
\nCorporation shall be a wholly-owned subsidiary of the Purchaser.<\/p>\n
1<\/p>\n
1.2 Effective Time of the Merger.<\/p>\n
When used in this Agreement, the term “EFFECTIVE TIME” with respect to
\nthe Merger shall mean the date and time when an Agreement of Merger has been
\naccepted for filing by the Secretary of State of California, which filing
\nshall be made, using the Purchaser’s Best Efforts after the Closing, within
\ntwo (2) days after the Closing, but in no event later than five (5) days
\nafter the Closing; provided, that, the Company has met all the closing
\nconditions in Section 4.1 hereof; and provided further, that the Company’s
\nsole remedy for the Purchaser’s failure to file such Agreement of Merger
\nshall be to terminate this Agreement.<\/p>\n
1.3 The Aggregate Merger Consideration.<\/p>\n
The Purchaser shall acquire all of the outstanding shares of Company
\nCommon Stock for an aggregate of 745,858 shares of Purchaser Stock (as
\nadjusted for any stock splits, dividends, combinations or the like and any
\nadjustment pursuant to Section 3.2 hereof) (as adjusted, the “MERGER
\nCONSIDERATION”). As part of the Merger Consideration, all options issued and
\noutstanding under the Company’s 1998 Stock Incentive Plan (the “OPTION PLAN”)
\nshall be assumed as described in Section 3.1(c) hereof and each Selling
\nShareholder shall be allocated the portion of the Merger Consideration set
\nforth on Schedule I attached hereto in exchange for the shares of Company
\nCommon Stock held by such Selling Shareholder as of the Effective Time.<\/p>\n
1.4 Escrow.<\/p>\n
As a source for the payment of the Selling Shareholders’ indemnification
\nobligations set forth herein and in the Escrow Agreement, the Purchaser will
\ndeliver to Escrow Agent under an Escrow Agreement (the “ESCROW AGREEMENT”) in
\nsubstantially the form attached as Exhibit B, an amount equal to ten percent
\n(10%) of the aggregate Merger Consideration payable to the Selling
\nShareholders, prior to any adjustment thereto pursuant to Section 3.2(c)
\nhereof (the “HOLDBACK AMOUNT”). The Selling Shareholders shall have all
\nrights to vote, receive dividends and all other rights as a stockholder of
\nthe Purchaser with respect to the Holdback Amount.<\/p>\n
2. The Purchaser and the Surviving Corporation.<\/p>\n
2.1 Articles of Incorporation of the Surviving Corporation.<\/p>\n
The Articles of Incorporation of the Company as in effect at the
\nEffective Time shall be the Articles of Incorporation of the Surviving
\nCorporation until amended in accordance with applicable law.<\/p>\n
2.2 Bylaws of the Surviving Corporation.<\/p>\n
The Bylaws of Merger Sub as in effect at the Effective Time shall be the
\nBylaws of the Surviving Corporation until amended in accordance with
\napplicable law.<\/p>\n
2<\/p>\n
2.3 Directors and Officers of the Surviving Corporation.<\/p>\n
(a) The directors of Merger Sub at the Effective Time shall be the
\ninitial directors of the Surviving Corporation and shall hold office from the
\nEffective Time until their respective successors are duly elected or
\nappointed and qualified in the manner provided in the Articles of
\nIncorporation and Bylaws of the Surviving Corporation, or as otherwise
\nprovided by law.<\/p>\n
(b) The officers of Merger Sub at the Effective Time shall be the
\ninitial officers of the Surviving Corporation and shall hold office from the
\nEffective Time until removed or until their respective successors are duly
\nelected or appointed and qualified in the manner provided in the Articles of
\nIncorporation and Bylaws of the Surviving Corporation, or as otherwise
\nprovided by law.<\/p>\n
3. Treatment of Shares.<\/p>\n
3.1 Exchange of Shares.<\/p>\n
At the Effective Time, by virtue of the Merger and without any action on
\nthe part of the holders thereof:<\/p>\n
(a) Each share of Merger Sub’s common stock, no par value, which
\nshall be outstanding immediately prior to the Effective Time of the Merger,
\nshall be converted into one share of common stock, no par value, of Surviving
\nCorporation.<\/p>\n
(b) Each share of Company Common Stock outstanding immediately
\nprior to the Effective Time shall at the Effective Time, by virtue of the
\nMerger and without any action on the part of the holder thereof, be cancelled
\nand converted into the right to receive a portion of the Merger Consideration
\nequal to the quotient of (i) the aggregate Merger Consideration divided by
\n(ii) the sum of (A) the number of shares of Company Common Stock outstanding
\nimmediately prior to the Effective Time plus (B) the number of Company
\nOptions issued and outstanding pursuant to the Option Plan immediately prior
\nto the Closing Date (such quotient, the “EXCHANGE RATIO”).<\/p>\n
(c) At the Effective Time, all options issued and outstanding under
\nthe Option Plan (each, a “COMPANY OPTION”) shall be assumed by the Purchaser
\nin accordance with provisions described below.<\/p>\n
(i) At the Effective Time, each Company Option, whether
\nvested or unvested, shall be, in connection with the Merger, assumed by the
\nPurchaser. Each Company Option so assumed by the Purchaser under this
\nAgreement shall continue to have, and be subject to, the same terms and
\nconditions set forth in the Option Plan and\/or as provided in the respective
\noption agreements governing such Company Option immediately prior to the
\nEffective Time, except that (A) such Company Option shall be exercisable for
\nthat number of whole shares of Purchaser Stock equal to the product of the
\nnumber of shares of Company Common Stock that were issuable upon exercise of
\nsuch Company Option immediately prior to the Effective Time multiplied by the
\nExchange Ratio (subject to final adjustment after final calculation of the <\/p>\n
3<\/p>\n
Merger Consideration), rounded down to the nearest whole number of shares of
\nPurchaser Stock and (B) the per share exercise price for the shares of
\nPurchaser Stock issuable upon exercise of such assumed Company Option shall
\nbe equal to the quotient determined by dividing the exercise price per share
\nof Company Common Stock at which such Company Option was exercisable
\nimmediately prior to the Effective Time by the Exchange Ratio, rounded up to
\nthe nearest cent.<\/p>\n
(ii) It is the intention of the parties that the Company
\nOptions assumed by the Purchaser qualify following the Effective Time as
\nincentive stock options as defined in Section 422 of the Code to the extent
\nsuch options qualified as incentive stock options immediately prior to the
\nEffective Time.<\/p>\n
(d) No fraction of a share of Purchaser Stock shall be issued in the
\nMerger. In lieu of fractional shares, the Selling Shareholders, upon
\nsurrender of their Certificates as set forth in Section 3.3 hereof, shall be
\npaid an amount in cash, without interest, rounded to the nearest cent,
\ndetermined by multiplying the fractional interest to which such Shareholder
\nwould otherwise be entitled by $70.<\/p>\n
(e) The shares of Purchaser Stock issued in connection with the
\nTransactions will not be registered under the Securities Act. Such shares may
\nnot be transferred or resold thereafter, except in compliance with the terms
\nof this Agreement and the other Transactional Agreements and following
\nregistration under the Securities Act or in reliance on an exemption from
\nregistration under the Securities Act.<\/p>\n
3.2 Adjustments to the Merger Consideration.<\/p>\n
The number of shares of Purchaser Stock set forth in Section 1.3 hereof
\nshall be subject to the following adjustments:<\/p>\n
(a) The number of shares of Purchaser Stock set forth in Section 1.3
\nhereof shall be reduced by the number of shares obtained by dividing (i) the
\namount of any fees payable by the Company to the Purchaser, as of the
\nClosing, under that Amended and Restated License Agreement between the
\nPurchaser and the Company dated as of March 16, 1999, by (ii) $70.<\/p>\n
(b) The number of shares of Purchaser Stock set forth in Section 1.3
\nhereof shall be increased by the number of shares obtained by dividing (i) the
\namount of the proceeds, if any, to be received by the Company upon exercise
\nof any options issued pursuant to the Option Plan on or after May 3, 1999 but
\nprior to the Closing Date, by (ii) $70.<\/p>\n
3.3 Mechanics of Exchange.<\/p>\n
(a) On the Closing Date, each Selling Shareholder shall receive a
\nletter of transmittal instructing the Selling Shareholder how to exchange his
\nor her Company Common Stock for Purchaser Stock. On the first business day
\nfollowing the Effective Time, each Selling Shareholder shall surrender the
\ncertificate or certificates evidencing Company Common Stock (the
\n“CERTIFICATES”) to the Purchaser for cancellation in exchange for such
\nSelling Shareholder’s<\/p>\n
4<\/p>\n
allocable portion of the Merger Consideration, less such Selling
\nShareholder’s pro rata portion of the Holdback Amount. It shall be a
\ncondition of payment that the Certificates so surrendered shall be properly
\nendorsed or otherwise in proper form for transfer to the Purchaser.<\/p>\n
(b) From and after the Closing Date, there shall be no transfers on the
\nstock transfer books of the Company of Company Common Stock. If, after the
\nEffective Time, Certificates formerly representing Company Common Stock set
\nforth on Schedule I are presented to the Surviving Corporation for payment,
\nthey shall be cancelled and exchanged for the applicable portion of the
\nMerger Consideration in accordance with the procedures set forth in this
\nsection.<\/p>\n
(c) At or prior to the Effective Time, the Purchaser shall deliver
\nirrevocably to the Escrow Agent shares of Purchaser Stock in an aggregate
\namount equal to the Holdback Amount.<\/p>\n
(d) In the event that any Certificate shall have been lost, stolen or
\ndestroyed, upon the making of an affidavit of that fact by the Selling
\nShareholder claiming such Certificate to be lost, stolen or destroyed, the
\nPurchaser will issue or cause to be issued in exchange for such lost, stolen
\nor destroyed Certificate the portion of the Merger Consideration for which
\nthe shares of Company Common Stock represented by the Certificate are
\nexchanged in accordance with this Section 3. When authorizing such issuance
\nin exchange therefor, the Purchaser may, in its discretion and as a condition
\nprecedent to the issuance thereof, require such Selling Shareholder to give
\nthe Purchaser a bond in such sum as it may direct as indemnity, or such other
\nform of indemnity as it may direct, against any claim that may be made
\nagainst the Purchaser with respect to the Certificate alleged to have been
\nlost, stolen or destroyed.<\/p>\n
(e) The Purchaser may, at its option, meet its obligations under this
\nSection 3.3 through a bank or trust company selected by the Purchaser to act
\nas exchange agent in connection with the Transactions.<\/p>\n
(f) If any certificate for Purchaser Stock is to be issued in a name
\nother than that in which the Certificate surrendered in exchange therefor is
\nregistered, it shall be a condition of such exchange that the Person
\nrequesting such exchange shall (i) pay to the Purchaser any transfer or other
\ntaxes required by reason of the issuance of certificates for such securities
\nin a name other than that of the registered holder of the Certificate
\nsurrendered, or (ii) establish to the satisfaction of the Purchaser that such
\ntaxes have been paid or are not applicable.<\/p>\n
(g) Notwithstanding anything in this Agreement to the contrary, neither
\nthe Purchaser nor any other party hereto shall be liable to a holder of
\nshares of Company Common Stock for any portion of the Merger Consideration,
\nor dividend on shares of Purchaser Stock issued as part of the Merger
\nConsideration, or in accordance with Section 3.1, the cash payment for any
\nfractional interests, delivered to a public official pursuant to applicable
\nescheat laws following the passage of time specified therein.<\/p>\n
5<\/p>\n
3.4 No Further Rights in Company Common Stock.<\/p>\n
All cash, cash equivalents or securities received by each Selling
\nShareholder pursuant to this Agreement shall be deemed to have been delivered
\nand received in full satisfaction of all rights pertaining to such Selling
\nShareholder’s shares of Company Common Stock. At the Effective Time, the
\nSelling Shareholders shall cease to have any rights with respect to shares of
\nstock, and their sole right shall be to receive the Merger Consideration.<\/p>\n
3.5 Closing.<\/p>\n
The closing of the Transactions (the “CLOSING”) shall take place at the
\noffices of Morrison & Foerster llp, 425 Market Street, San Francisco,
\nCalifornia 94105-2482, at 9:00 a.m., local time, on the later of (x) June 15,
\n1999 or (y) the second business day after the day on which all of the
\nconditions set forth in Sections 4.1 and 4.2 hereof are satisfied or waived,
\nor at such other date, time and place as the parties shall otherwise agree
\n(the date of such Closing, the “CLOSING DATE”).<\/p>\n
3.6 Supplementary Action.<\/p>\n
If at any time after the Effective Time, any further assignments or
\nassurances in law or any other things are necessary or desirable to vest or
\nto perfect or confirm of record in the Surviving Corporation the title to any
\nproperty or rights of either Constituent Corporation, or otherwise to carry
\nout the provisions of this Agreement, the officers and directors of the
\nSurviving Corporation are hereby authorized and empowered on behalf of the
\nConstituent Corporations, in the name of and on behalf of either Constituent
\nCorporation as appropriate, to execute and deliver any and all things
\nnecessary or proper to vest or to perfect or confirm title to such property
\nor rights in the Surviving Corporation, and otherwise to carry out the
\npurposes and provisions of this Agreement.<\/p>\n
3.7 Dissenting Shares<\/p>\n
(a) If holders of Company Common Stock are entitled to dissent
\nfrom the Merger and demand appraisal of the Company Common Stock under
\napplicable law (each Person electing to exercise such rights, a “DISSENTING
\nHOLDER”), any shares of Company Common Stock held by a Dissenting Holder as
\nto which appraisal has been so demanded in accordance with applicable law
\n(“DISSENTING SHARES”) shall not be exchanged as described in Section 3.1, but
\nshall from and after the Effective Time represent only the right to receive
\nsuch consideration as may be determined to be due such Dissenting Holder
\npursuant to applicable law; provided, that each share of Company Common Stock
\nheld by a Dissenting Holder who shall, after the Effective Time, withdraw its
\ndemand for appraisal or lose its rights of appraisal with respect to such
\nshares of stock, in either case pursuant to applicable law, shall not be
\ndeemed a Dissenting Share, but shall be deemed to be converted, as of the
\nEffective Time, into the applicable portion of the Merger Consideration.<\/p>\n
(b) The Company shall give the Purchaser prompt notice of any
\nwritten demands for appraisal of any shares of Company Common Stock,
\nwithdrawals of such demands or failures<\/p>\n
6<\/p>\n
to perfect appraisal rights resulting in a loss of such rights, and any other
\ninstruments received by the Company which relate to any such demand for
\nappraisal. The Company shall not voluntarily make any payment with respect to
\nany demands or potential demands for appraisal of Company Common Stock or
\noffer to settle or settle any such demands or potential demands. The
\nPurchaser shall be responsible for any settlement of claims with respect to
\nany Dissenting Shares, which settlements may be paid in cash, Purchaser Stock
\nor such other consideration as the Purchaser may determine, except as
\notherwise required under applicable law.<\/p>\n
4. Closing Conditions.<\/p>\n
4.1 Conditions Precedent to Obligations of the Purchaser and Merger Sub.<\/p>\n
The Purchaser’s and Merger Sub’s obligations to consummate the Merger
\nand to take the other actions required to be taken by the Purchaser and
\nMerger Sub at the Closing are subject to the satisfaction, at or prior to the
\nClosing, of each of the following conditions.<\/p>\n
(a) the representations and warranties made by the Selling
\nShareholde and the Company in Section 5 hereof or in any other Transactional
\nAgreement shall have been true and accurate in all material respects as of
\nthe date of this Agreement and as of the Closing Date as though made on and
\nas of the Closing Date, without giving effect to any Disclosure Schedule
\nUpdate;<\/p>\n
(b) all covenants, agreements and conditions contained in this
\nAgreement or in any other Transactional Agreement to be observed by the
\nSelling Shareholders and\/or the Company on or prior to the Closing shall have
\nbeen performed or complied with in all material respects;<\/p>\n
(c) the Selling Shareholders or the Company, as the case may be,
\nshall have delivered the following documents to the Purchaser:<\/p>\n
(i) the Escrow Agreement, duly executed by the Selling
\nShareholders;<\/p>\n
(ii) a Registration Rights Agreement in the form of Exhibit
\nC (the “RIGHTS AGREEMENT”), duly executed by the Selling Shareholders;<\/p>\n
(iii) a countersigned employment offer letter and an
\nexecuted Proprietary Information, Non-Disclosure and Non-Solicitation
\nAgreement substantially in the forms of Exhibits D-1 and D-2, respectively,
\nduly executed by each of the Key Employees;<\/p>\n
(iv) a Non-Competition and Non-Solicitation Agreement duly
\nexecuted by Vijay and Sheena Vaidyanathan in substantially the form of
\nExhibit E;<\/p>\n
(v) the legal opinion of Pillsbury Madison & Sutro LLP,
\ncounsel to the Selling Shareholders and the Company, dated the Closing Date,
\nin substantially the form of Exhibit F;<\/p>\n
7<\/p>\n
(vi) written confirmation from Pillsbury Madison & Sutro
\nLLP confirming that the Company has paid in full all legal fees, including
\nlegal fees relating to these Transactions incurred prior to and including the
\nday immediately preceding the Closing;<\/p>\n
(vii) a certificate (the “SELLING SHAREHOLDERS CLOSING
\nCERTIFICATE” and the “COMPANY CLOSING CERTIFICATE,” respectively) executed by
\nthe Selling Shareholders and a senior executive officer of the Company,
\nrespectively, dated as of the Closing Date, and certifying to the
\nsatisfaction of the conditions specified in Sections 4.1(a) and (b);<\/p>\n
(viii) the written resignations of the members of the
\nCompany Board;<\/p>\n
(ix) written evidence reasonably satisfactory to the
\nPurchaser and its counsel of the grant of Company Options to the employees of
\nthe Company as set forth on Schedule II attached hereto;<\/p>\n
(x) written evidence reasonably satisfactory to the
\nPurchaser and its counsel of the conversion of all of the Company Preferred
\nStock into Company Common Stock;<\/p>\n
(xi) such other documents reasonably satisfactory to the
\nPurchaser as the Purchaser may request in good faith for the purpose of
\n(A) evidencing the accuracy of any representation or warranty made by the
\nCompany or the Selling Shareholders, (B) evidencing the compliance by the
\nCompany or the Selling Shareholders with, or the performance by the Company
\nor the Selling Shareholders of, any covenant or obligation set forth in this
\nAgreement or any other Transactional Agreement, (C) evidencing the satisfaction
\nof the conditions set forth in this Section 4.1, or (D) otherwise facilitating
\nthe consummation or performance of any of the Transactions;<\/p>\n
(d) each of the Key Employees shall have accepted employment with
\nthe Purchaser (or one of the Purchaser’s subsidiaries);<\/p>\n
(e) to the satisfaction of the Purchaser and its counsel, the offer
\nand sale of Purchaser Stock pursuant to the terms of this Agreement shall
\ncomply with an exemption from registration under the Securities Act and\/or
\nany applicable federal or state securities laws and regulations;<\/p>\n
(f) the Company and each of the holders of Company Options shall
\nhave executed and delivered an amended Option Agreement in the Form of
\nExhibit G and provided the Purchaser with a copy thereof, providing that no
\nadditional acceleration of options shall occur upon closing of the
\ntransactions described in the Agreement and Plan of Contribution, Investment
\nand Merger, dated as of May 9, 1999 among National Broadcasting Company,
\nInc., GE Investments Subsidiary, Inc., the Purchaser and others;<\/p>\n
(g) all corporate and other proceedings required to be taken on the
\npart of the Company and the Selling Shareholders in connection with this
\nAgreement, the Transactional Agreements and the Transactions, and all
\ndocuments incident thereto, shall be reasonably satisfactory in form and in
\nsubstance to the Purchaser and its counsel;<\/p>\n
8<\/p>\n
(h) except for the Selling Shareholder listed on Schedule III, all
\nof the Selling Shareholders shall have executed this Agreement;<\/p>\n
(i) the Company’s Board of Directors shall have ratified or
\napproved the execution of this Agreement and the other Transactional
\nAgreements by the Company and shall have approved the consummation of the
\nTransactions;<\/p>\n
(j) each of the Consents identified or required to be identified in
\nPart 5.5 of the Disclosure Schedule shall have been obtained and shall be in
\nfull force and effect;<\/p>\n
(k) there shall have been no material adverse change in the
\nCompany’s business, condition, assets, liabilities, operations or financial
\nperformance since the date of this Agreement;<\/p>\n
(l) there shall not have been commenced or expressly threatened
\nagainst the Company or any of its affiliates any Proceeding (i) involving any
\nchallenge to, or seeking damages or other relief in connection with, any of
\nthe Transactions, or (ii) that is likely to have the effect of preventing,
\ndelaying, making illegal or otherwise interfering with any of the
\nTransactions or have a material adverse effect on the Company;<\/p>\n
(m) no Person shall have made or expressly threatened any claim
\nasserting that such Person (i) may be the holder or the beneficial owner, or
\nmay have the right to acquire or to obtain beneficial ownership of, any
\ncapital stock or other securities of the Company, or (ii) may be entitled to
\nall or any portion of the Merger Consideration;<\/p>\n
(n) neither the consummation nor the performance of any of the
\nTransactions will, directly or indirectly (with or without notice or lapse of
\ntime), contravene or conflict with or result in a violation of, or cause the
\nPurchaser or the Company, or any Person affiliated with the Purchaser or the
\nCompany, to suffer any material adverse consequence under, (i) any applicable
\nlegal requirement or Order, or (ii) any legal requirement or Order that has
\nbeen proposed by or before any Governmental Body; and<\/p>\n
(o) All of the Preferred Stock issued by the Company owned by
\nChristopher and Christina Kitze shall have been purchased at cost by either
\nthe Company or a Selling Shareholder.<\/p>\n
4.2 Conditions Precedent to Obligations of the Company and the Selling
\n Shareholders.<\/p>\n
The Company’s obligation to take the actions required to be taken by the
\nCompany at the Closing, is subject to the satisfaction, at or prior to the
\nClosing, of each of the following conditions (any of which may be waived by
\nthe Company, in whole or in part.<\/p>\n
(a) the representations and warranties made by the Purchaser and
\nMerger Sub in Section 7 and in any other Transactional Agreement shall have
\nbeen true and correct in all<\/p>\n
9<\/p>\n
material respects as of the date of this Agreement and as of the Closing Date
\nas though made on and as of the Closing Date;<\/p>\n
(b) all covenants, agreements and conditions contained in this
\nAgreement or in any other Transactional Agreement to be observed by the
\nPurchaser and Merger Sub on or prior to the Closing shall have been performed
\nor complied with in all material respects;<\/p>\n
(c) the Purchaser shall have delivered the following documents to
\nthe Selling Shareholders and\/or the Company, as the case may be, duly
\nexecuted by the Purchaser:<\/p>\n
(i) the Escrow Agreement;<\/p>\n
(ii) the Rights Agreement;<\/p>\n
(iii) binding offers of employment by the Purchaser as set
\nforth in Section 4.1(c);<\/p>\n
(iv) the legal opinion of Morrison & Foerster LLP, counsel
\nto the Purchaser, dated the Closing Date, in substantially the form of
\nExhibit H; and<\/p>\n
(v) a certificate (the “PURCHASER CLOSING CERTIFICATE”)
\nexecuted by a senior executive officer of the Purchaser, dated as of the
\nClosing Date and (A) certifying to the satisfaction of the conditions
\nspecified in Sections 4.2(a) and (b); and (B) certifying to and attaching a
\ncopy of the adoption of a resolution by the Purchaser’s Board of Directors
\nclarifying that the Transactions will be treated as exempt transactions under
\nSection 16 of the Exchange Act; and<\/p>\n
(d) all corporate and other proceedings required to be taken on the
\npart of the Purchaser and Merger Sub in connection with the Transactions,
\nshall have been completed.<\/p>\n
5. Representations and Warranties of the Company.<\/p>\n
Except as specifically set forth in the disclosure schedule provided by
\nthe Company and attached hereto (the “COMPANY DISCLOSURE SCHEDULE”), the
\nparts of which are numbered to correspond to the section numbers of this
\nAgreement, the Company hereby represents and warrants to each Indemnitee as
\nfollows:<\/p>\n
5.1 Organization, Good Standing, Qualification.<\/p>\n
(a) The Company is a corporation duly organized, validly existing
\nand in good standing under the laws of the State of California and is
\nqualified to conduct business in the State of California. The Company is not
\nqualified to transact business in any other jurisdiction. The Company has all
\nrequisite corporate power and authority to own and operate its properties and
\nassets and to carry out the provisions hereof and to carry on its business as
\ncurrently conducted.<\/p>\n
10<\/p>\n
(b) The Company has never approved, or commenced any Proceeding, or
\nmade any election contemplating, the dissolution or liquidation of the
\nCompany or the winding up or cessation of the Company’s business or affairs.<\/p>\n
(c) The Company has no subsidiaries and does not own, beneficially
\nor otherwise, any shares or other securities of, or any other direct or
\nindirect interest of any nature in, any Entity.<\/p>\n
(d) The Company was never operated as a sole proprietorship, or any
\nother business entity, prior to its incorporation.<\/p>\n
5.2 Articles of Incorporation and Bylaws; Records.<\/p>\n
(a) The Company has delivered to the Purchaser accurate and
\ncomplete copies of:<\/p>\n
(i) the Company’s Articles of Incorporation and Bylaws,
\nincluding all amendments thereto, as currently in effect;<\/p>\n
(ii) the stock records of the Company; and<\/p>\n
(iii) the minutes and other records of the meetings and other
\nproceedings (including any actions taken by written consent or otherwise
\nwithout a meeting) of the shareholders of the Company, the Company Board and
\nall committees of the Company Board.<\/p>\n
There have been no meetings or other proceedings of the shareholders of the
\nCompany, the Company Board or any committee of the Company Board that are not
\nmemorialized in such minutes or other records.<\/p>\n
(b) The Company has never conducted any business under or otherwise
\nused, for any purpose or in any jurisdiction, any fictitious name, assumed
\nname, trade name or other name, other than the names listed on Part 5.2 of
\nthe Disclosure Schedule.<\/p>\n
(c) There has not been any violation of the Company’s Articles of
\nIncorporation or Bylaws or any material violation of any resolution adopted
\nby the Company’s shareholders, the Company Board or any committee of the
\nCompany Board.<\/p>\n
5.3 Capitalization.<\/p>\n
(a) The authorized capital stock of the Company consists of Seven
\nMillion Four Hundred Thousand (7,400,000) shares of capital stock, comprised
\nof Seven Million (7,000,000) shares of Common Stock, of which Four Million
\nNine Hundred Ninety-Two Thousand Seven Hundred Twenty-Six (4,992,726) shares
\nare issued and outstanding, and Four Hundred Thousand (400,000) shares of
\nPreferred Stock, all of which are designated Series A Preferred Stock, of
\nwhich Two Hundred Fourteen Thousand Two Hundred Forty-two (214,242) shares
\nare issued and outstanding (the “COMPANY PREFERRED STOCK”), all of which
\nCompany Preferred Stock shall be converted into Company Common Stock
\nconditioned upon the Closing and immediately<\/p>\n
11<\/p>\n
prior to the Effective Time. No other shares of capital stock are issued or
\noutstanding. All issued and outstanding shares of the Company’s capital stock
\nhave been duly authorized and validly issued and are fully paid and
\nnonassessable. Schedule II accurately sets forth (i) the names of the
\nemployees\/consultants who have been granted Company Options; (ii) the number
\nof Company Options held by such employees as of the date of this Agreement;
\nand\/or (iii) the number of Company Options to be granted to such
\nemployees\/consultants prior to the Closing.<\/p>\n
(b) Except as set forth on Schedule II or Part 5.3 of the
\nDisclosure Schedule, there is no:<\/p>\n
(i) outstanding subscription, option, call, warrant or
\nright (whether or not currently exercisable) to acquire any shares of the
\ncapital stock or other securities of the Company;<\/p>\n
(ii) outstanding security, instrument or obligation that is
\nor may become convertible into or exchangeable for any shares of the capital
\nstock or other securities of the Company; or<\/p>\n
(iii) to the knowledge of the Company, condition or
\ncircumstance that may directly or indirectly give rise to or provide a basis
\nfor a claim by any Person to the effect that such Person is entitled to
\nacquire or receive any shares of capital stock or other securities of the
\nCompany.<\/p>\n
(c) The Company has never repurchased, redeemed or otherwise
\nreacquired (or agreed, committed or offered (in writing or otherwise) to
\nrepurchase, redeem or otherwise reacquire) any shares of capital stock or
\nother securities, except from employees of the Company pursuant to the terms
\nof the Option Plan.<\/p>\n
5.4 Authority; Binding Nature of Agreements.<\/p>\n
The Company has the corporate power and authority to enter into and to
\nperform its obligations under this Agreement and the other Transactional
\nAgreements to which it is or is contemplated to be a party, and the
\nexecution, delivery and performance by the Company of this Agreement and such
\nTransactional Agreements have been duly authorized by all necessary action on
\nthe part of the Company Board and its shareholders. This Agreement and the
\nother Transactional Agreements constitute, or upon execution and delivery
\nwill constitute, the legal, valid and binding obligations of the Company,
\nenforceable against the Company in accordance with their respective terms,
\nexcept to the extent that enforceability may be limited by applicable
\nbankruptcy, reorganization, insolvency, moratorium or other laws affecting
\nthe enforcement of creditor’s rights generally and by general principles of
\nequity regardless of whether such enforceability is considered in a
\nProceeding at law or in equity.<\/p>\n
12<\/p>\n
5.5 Non-Contravention; Consents.<\/p>\n
The execution and delivery of this Agreement and the other Transactional
\nAgreements, and the consummation of the Transactions, by the Company will
\nnot, directly or indirectly (with or without notice or lapse of time):<\/p>\n
(a) contravene, conflict with or result in a material violation of
\n(i) the Company’s Articles of Incorporation or Bylaws, or (ii) any resolution
\nadopted by the Company Board or any committee thereof or the shareholders of
\nthe Company;<\/p>\n
(b) to the knowledge of the Company, contravene, conflict with or
\nresult in a violation of, or give any Governmental Body or other Person the
\nright to challenge any of the Transactions or to exercise any remedy or
\nobtain any relief under, any legal requirement or any Order to which the
\nCompany or any assets owned or used by it are subject;<\/p>\n
(c) to the knowledge of the Company, cause any material assets
\nowned or used by the Company to be reassessed or revalued by any taxing
\nauthority or other Governmental Body;<\/p>\n
(d) to the knowledge of the Company, contravene, conflict with or
\nresult in a material violation of any of the terms or requirements of, or
\ngive any Governmental Body the right to revoke, withdraw, suspend, cancel,
\nterminate or modify, any Governmental Authorization that is held by the
\nCompany or any of its employees or that otherwise relates to the Company’s
\nbusiness or to any of the assets owned or used by the Company;<\/p>\n
(e) contravene, conflict with or result in a material violation or
\nmaterial breach of, or material default under, any Company Contract;<\/p>\n
(f) give any Person the right to any payment by the Company or give
\nrise to any acceleration or change in the award, grant, vesting or
\ndetermination of options, warrants, rights, severance payments or other
\ncontingent obligations of any nature whatsoever of the Company in favor of
\nany Person, in any such case as a result of the change in control of the
\nCompany or otherwise resulting from the Transactions; or<\/p>\n
(g) result in the imposition or creation of any material
\nencumbrance upon or with respect to any asset owned or used by the Company.
\nExcept as set forth in Part 5.5 of the Disclosure Schedule, the Company will
\nnot be required to make any filing with or give any notice to, or obtain any
\nConsent from, any Person in connection with the execution and delivery of
\nthis Agreement and the other Transactional Agreements or the consummation or
\nperformance of any of the Transactions.<\/p>\n
5.6 Intellectual Property.<\/p>\n
(a) Part 5.6 of the Disclosure Schedule sets forth a complete list,
\nin all material respects, of all patents, registered trademarks, registered
\ncopyrights, registered maskworks, registered trade names and registered
\nservice marks, and any applications therefor in respect of<\/p>\n
13<\/p>\n
any of the foregoing, included in the Company’s Proprietary Assets, and
\nspecifies, where applicable, the jurisdictions in which each such Proprietary
\nAsset has been issued or filed, including the respective registration or
\napplication numbers and the names of all owners. Part 5.6 also sets forth a
\ncomplete list of all material licenses, sublicenses and other agreements to
\nwhich the Company is a party and pursuant to which the Company or any other
\nPerson is authorized to use any of the Company’s Proprietary Assets
\n(excluding object code and end-user licenses granted to end-users in the
\nOrdinary Course of business that permit use of software products without a
\nright to modify, distribute or sublicense the same (“END-USER LICENSES”)) or
\nother trade secrets material to the Company, and includes the identity of all
\nparties thereto, a general description of the nature and subject matter
\nthereof, the applicable royalty and the term thereof. The management of the
\nCompany, after diligent investigation, is not aware of any violation of any
\nlicense, sublicense or agreement described on such list except such
\nviolations as do not materially impair the Company’s rights under such
\nlicense, sublicense or agreement. Except as set forth in Part 5.6 the
\nexecution and delivery of this Agreement by the Company, and the consummation
\nof the Transactions, (i) will not cause the Company to be in material
\nviolation or default under any such license, sublicense or agreement, (ii) will
\nnot entitle any other party to any such license, sublicense or agreement to
\nterminate or modify such license, sublicense or agreement or (iii) will not
\nrequire the Company to repay any funds already received by it from a third
\nparty.<\/p>\n
(b) Except as set forth in Part 5.6, the Company has all right, title
\nand interest in and to the Company’s Proprietary Assets, and any rights
\n(without being contractually obligated to pay any compensation to any third
\nparty in respect thereof) necessary for the use thereof or the material
\ncovered thereby in connection with the services or products in respect of
\nwhich the Company’s Proprietary Assets are being used by the Company.<\/p>\n
(c) Except as set forth in Part 5.6, to the knowledge of the management
\nof the Company, there is no material unauthorized use, infringement or
\nmisappropriation of any of the Company’s Proprietary Assets by any third
\nparty, including any employee or former employee of the Company.<\/p>\n
(d) The Company has not entered into any agreement under which the
\nCompany is restricted from selling, licensing or otherwise distributing any
\nof its products to any class of customers, in any geographic area, during any
\nperiod of time or in any segment of the market.<\/p>\n
(e) Each employee and consultant identified on the Disclosure Schedule
\nhas executed the Company’s form of proprietary information and invention
\nagreement in substantially the form provided to the Purchaser and its counsel.<\/p>\n
14<\/p>\n
5.7 Proceedings; Orders.<\/p>\n
(a) There is no pending Proceeding, and, to the Company’s
\nknowledge, no Person has threatened to commence any Proceeding nor are there
\nany valid grounds, to the knowledge of the Company, for any bona fide claims
\nthat would give rise to a Proceeding:<\/p>\n
(i) that involve the Company, including its use of the
\nProprietary Assets referred to in Section 5.6 hereof; or<\/p>\n
(ii) that challenge, or that may have the effect of
\npreventing, delaying, making illegal or otherwise interfering with, any of
\nthe Transactions or the Company’s ability to comply with, or perform its
\nobligations and covenants under, the Transactional Agreements, and, to the
\nknowledge of the Company, no event has occurred, and no claim, dispute or
\nother condition or circumstance exists, that might directly or indirectly
\ngive rise to or serve as a basis for the commencement of any such Proceeding.<\/p>\n
(b) The Company has delivered to the Purchaser accurate and
\ncomplete copies of all pleadings, correspondence and other written materials
\nto which the Company has access that relate to the Proceedings identified in
\nPart 5.7 of the Disclosure Schedule, if any.<\/p>\n
(c) There is no Order to which the Company, or any of the assets
\nowned or used by the Company, is subject.<\/p>\n
(d) To the Company’s knowledge, no officer or employee of the
\nCompany is subject to any Order that prohibits such officer or employee from
\nengaging in or continuing any conduct, activity or practice relating to the
\nCompany’s business.<\/p>\n
5.8 Financial Statements.<\/p>\n
(a) The Company has delivered to the Purchaser the following
\nfinancial statements and notes (collectively, the “FINANCIAL STATEMENTS”),
\nwhich are attached as Exhibit I:<\/p>\n
(i) the unaudited balance sheet of the Company as of
\nDecember 31, 1998, and the related unaudited statements of operations,
\nchanges in shareholders’ equity and cash flows of the Company for the period
\nended December 31, 1998, together with the notes thereto; and<\/p>\n
(ii) the unaudited consolidated balance sheet of the Company
\nas of March 31, 1999 (the “UNAUDITED INTERIM BALANCE SHEET”), and the related
\nunaudited statements of operations, changes in shareholders’ equity and cash
\nflows of the Company for the three (3) months then ended March 31, 1999.<\/p>\n
(b) All the Financial Statements are accurate and complete in all
\nmaterial respects, and the dollar amount of each line item included in the
\nFinancial Statements is accurate in all material respects. The Financial
\nStatements are in accordance with the books and records of the Company and
\npresent fairly the financial position of the Company as of the respective
\ndates<\/p>\n
15<\/p>\n
thereof and the results of operations of the Company, changes in
\nshareholders’ equity and cash flows for the periods covered thereby. The
\nFinancial Statements have been prepared in accordance with GAAP, applied on a
\nconsistent basis throughout the periods covered.<\/p>\n
(c) As of the date of this Agreement, the Company has no
\nliabilities in excess of Ten Thousand Dollars ($10,000), individually or in
\nthe aggregate, except for liabilities identified as such in the “Liabilities”
\ncolumn of the Unaudited Interim Balance Sheet.<\/p>\n
5.9 Title to Assets.<\/p>\n
(a) The Company owns, and has good, valid and marketable title to,
\nall assets purported to be owned by it, free and clear of any material
\nencumbrances, except liens for current taxes and assessments not delinquent.<\/p>\n
(b) Part 5.9(b) of the Disclosure Schedule identifies all
\nequipment, furniture, fixtures, improvements and other tangible assets owned
\nby the Company with a value over Ten Thousand Dollars ($10,000), and sets
\nforth the original cost and book value of each of said assets.<\/p>\n
(c) Each asset identified in Part 5.9(b) of the Disclosure Schedule:<\/p>\n
(i) is free of material defects and in good condition and
\nrepair, consistent with its age and intended use (ordinary wear and tear
\nexcepted); and<\/p>\n
(ii) is adequate for the uses to which it is being put.<\/p>\n
(d) The Company does not own any real property or any interest in
\nreal property, except for the leaseholds created under the real property
\nleases identified in Part 5.9(d) of the Disclosure Schedule (the “LEASED
\nPREMISES”). Part 5.9(d) of the Disclosure Schedule lists the premises covered
\nby said leases. The Company enjoys peaceful and undisturbed possession of
\nsuch premises.<\/p>\n
(e) Part 5.9(e) of the Disclosure Schedule identifies all assets
\nthat are leased or licensed to the Company that have a value in excess of Ten
\nThousand Dollars ($10,000). All leases pursuant to which the Company leases
\nreal or personal property are in good standing and are valid and effective in
\naccordance with their respective terms and, to the knowledge of the Company,
\nthere exists no default thereunder.<\/p>\n
5.10 Contracts.<\/p>\n
(a) Part 5.10 of the Disclosure Schedule identifies and describes
\neach material Company Contract. The Company has delivered to the Purchaser
\naccurate and complete copies of all Company Contracts identified in Part 5.10
\nof the Disclosure Schedule, including all amendments thereto.<\/p>\n
(b) To the Company’s knowledge, each Company Contract is currently
\nvalid and in full force and effect, and is enforceable by the Company in
\naccordance with its terms, except<\/p>\n
16<\/p>\n
to the extent that enforceability may be limited by applicable bankruptcy,
\nreorganization, insolvency, moratorium or other laws affecting the enforcement
\nof creditor’s rights generally and by general principles of equity regardless of
\nwhether such enforceability is considered in a Proceeding at law or in equity.<\/p>\n
(c) The Company is not in material default under any Company Contract,
\nand, to the knowledge of the Company, (i) no Person has violated or breached, or
\ndeclared or committed any material default under, any Company Contract; and (ii)
\nthe Company has not waived any of its rights under any material Company
\nContract.<\/p>\n
(d) (i) The Company has never guaranteed or otherwise agreed to cause,
\ninsure or become liable for, and has never pledged any of its assets to secure,
\nthe performance or payment of any obligation or other Liability of any other
\nPerson; and (ii) the Company has never been a party to or bound by any material
\njoint venture agreement, partnership agreement, profit-sharing agreement, cost-
\nsharing agreement, loss-sharing agreement or similar Contract.<\/p>\n
(e) No Person is renegotiating any amount paid or payable to the
\nCompany under any Company Contract or any other material term or provision of
\nany Company Contract.<\/p>\n
(f) Part 5.10(f) of the Disclosure Schedule identifies, and provides
\nan accurate and complete description of, each proposed Company Contract as to
\nwhich any bid, offer, written proposal, term sheet or similar document has been
\nsubmitted to or received by the Company and is outstanding.<\/p>\n
(g) No party to any Company Contract has notified the Company to the
\neffect that the Company has failed to perform a material obligation thereunder.<\/p>\n
5.11 Employees.<\/p>\n
(a) Part 5.11(a) of the Disclosure Schedule contains a list of all
\nemployees of the Company as of the date of this Agreement and their respective
\ntitles and annualized compensation and any written or oral commitments to the
\nemployees regarding the material terms and conditions of their employment.<\/p>\n
(b) Part 5.11(b) of the Disclosure Schedule contains a list of Persons
\nwho are currently performing services for the Company business and are
\nclassified as “consultants” or “independent contractors,” and the respective
\ncompensation of each such “consultant” or “independent contractor.”<\/p>\n
(c) The Company has no collective bargaining agreements or union
\ncontracts with any of its employees. To the knowledge of the Company, there is
\nno labor union-organizing activity pending or threatened with respect to the
\nCompany. The employment of each of the Company’s employees is terminable by the
\nCompany at will; and no employee has any agreement or contract, written or
\nverbal, regarding his or her employment.<\/p>\n
17<\/p>\n
(d) To the Company’s knowledge, no employee of the Company, nor any
\nconsultant or independent contractor with whom the Company has contracted, is
\nin violation of any term of any employment contract, proprietary information
\nagreement or any other agreement relating to the right of such individual to be
\nemployed by, or to contract with, the Company because of the nature of the
\nbusiness to be conducted by the Company. The Company has not received any
\nnotice (written or otherwise) alleging that any such violation has occurred. No
\nemployee of the Company has been granted the right to continued employment by
\nthe Company or to any material compensation following termination of employment
\nwith the Company. To the knowledge of the Company, no officer or key employee,
\nor any group of employees, has given notice of his, her or their intent to
\nterminate his, her or their employment with the Company, and no employee of the
\nCompany has received an offer to join a business that is or likely would be
\ncompetitive with the Company’s business.<\/p>\n
5.12 Compliance with Legal Requirements.<\/p>\n
(a) The Company is in full compliance with each material legal
\nrequirement that is applicable to it or to the conduct of its business or the
\nownership or use of any of its assets.<\/p>\n
(b) The Company has not received, at any time, any notice from any
\nGovernmental Body or any other Person regarding (i) any actual, alleged,
\npossible or potential violation of, or failure to comply with, any legal
\nrequirement by the Company, or (ii) any actual, alleged, possible or potential
\nobligation on the part of the Company to undertake, or to bear all or any
\nportion of the cost of, any cleanup or any remedial, corrective or response
\naction of any nature relating to Hazardous Materials, except to the extent
\nnoncompliance would not materially adversely effect the Company’s business
\nprospects or financial condition.<\/p>\n
5.13 Governmental Authorizations.<\/p>\n
(a) Part 5.13 of the Disclosure Schedule identifies each Governmental
\nAuthorization held by the Company. The Company has delivered to the Purchaser
\naccurate and complete copies of all such Governmental Authorizations, including
\nall renewals thereof and all amendments thereto. Each Governmental
\nAuthorization identified or required to be identified in Part 5.13 of the
\nDisclosure Schedule is valid and in full force and effect.<\/p>\n
(b) The Governmental Authorizations identified in Part 5.13 of the
\nDisclosure Schedule constitute all the Governmental Authorizations necessary (i)
\nto enable the Company to conduct its business in the manner in which its
\nbusiness is currently being conducted, and (ii) to permit the Company to own and
\nuse its assets in the manner in which they are currently owned and used.<\/p>\n
5.14 Tax Matters.<\/p>\n
(a) Except to the extent set forth in Part 5.14 of the Disclosure
\nSchedule, each Tax required to have been paid, or claimed by any Governmental
\nBody to be payable, by the Company (whether pursuant to any Tax Return or
\notherwise) has been duly paid in full on a timely basis. Any Tax required to
\nhave been withheld or collected by the Company has been <\/p>\n
18<\/p>\n
duly withheld and collected, and (to the extent required) each such Tax has been
\npaid to the appropriate Governmental Body. The Company has complied with all
\ninformation reporting and backup withholding requirements, including maintenance
\nof required records with respect thereto, in connection with amounts paid or
\nowing to any employee, creditor, independent contractor, or other third party.<\/p>\n
(b) Part 5.14 of the Disclosure Schedule accurately identifies all Tax
\nReturns required to be filed by or on behalf of the Company with any
\nGovernmental Body with respect to any taxable period ending on or before the
\nClosing Date (“COMPANY RETURNS”). All Company Returns (i) have been, or will
\nbe, filed when due, and (ii) have been, or will be when filed, accurately and
\ncompletely prepared pursuant to applicable law. All amounts shown on the
\nCompany Returns to be due on or before the Closing Date, and all amounts
\notherwise payable in connection with the Company Returns on or before the
\nClosing Date, have been paid on or before the Closing Date. The Company has
\ndelivered to the Purchaser copies of all Company Returns filed for the fiscal
\nperiods ended on or before the date hereof.<\/p>\n
(c) The Company’s Liability for unpaid Taxes for all periods ending on
\nor before the date of the Financial Statements does not, in the aggregate,
\nexceed the amount of the current Liability accruals for Taxes (excluding
\nreserves for deferred taxes) reported in the Financial Statements. The Company
\nwill establish reserves adequate for the payment of all Taxes for the period
\nfrom December 31, 1998 through the Closing Date, and the Company will disclose
\nthe dollar amount of such reserves to the Purchaser on or prior to the Closing
\nDate.<\/p>\n
(d) Part 5.14 of the Disclosure Schedule identifies each examination
\nor audit of any Company Return that has been conducted by any Governmental Body
\nfor the fiscal periods ended on or before the date hereof. The Company has
\ndelivered to the Purchaser copies of all audit reports and similar documents (to
\nwhich the Company has access) relating to Company Returns. No extension or
\nwaiver of the limitation period applicable to any of the Company Returns has
\nbeen granted (by the Company or any other Person), and no such extension or
\nwaiver has been requested from the Company.<\/p>\n
(e) No claim or other Proceeding is pending or has been threatened in
\nwriting or orally (formally or informally) against or with respect to the
\nCompany in respect of any Tax. The Company has not entered into or become bound
\nby any agreement or consent pursuant to Section 341(f) of the Code. The Company
\nhas not been, and will not be, required to include any adjustment in taxable
\nincome for any tax period (or portion thereof) pursuant to Section 481 or 263A
\nof the Code or any comparable provision under state or foreign Tax laws as a
\nresult of transactions or events occurring, or accounting methods employed,
\nprior to the Closing. The Company has never been in a “consolidated group”
\nwithin the meaning of Treasury Regulations Section 1.1502-1(h), and is not
\nliable for Taxes incurred by any individual, trust, corporation, partnership or
\nany other Entity either as a transferee, pursuant to Treasury Regulations
\nSection 1.1502-6, or pursuant to any other provision of federal, territorial,
\nstate, local or foreign law or regulations. Except as set forth in Part 5.14 of
\nthe Disclosure Schedule, the Company is not a party to any joint venture,
\npartnership or other arrangement or contract which could be treated as a
\npartnership for United States federal income tax purposes. None of the assets
\nof the <\/p>\n
19<\/p>\n
Company (i) directly or indirectly secures any debt the interest on which is
\ntax-exempt under Section 103(a) of the Code or (ii) is “tax-exempt use property”
\nwithin the meaning of Section 168(h) of the Code. The Company has not
\nparticipated in an international boycott as defined in Code Section 999. The
\nCompany does not have a “permanent establishment,” as defined in any applicable
\nTax treaty or convention of the United States of America, or fixed place of
\nbusiness in any foreign country. The Company is not, nor has it ever been, an “S
\ncorporation,” within the meaning of Section 1361(a) of the Code.<\/p>\n
(f) The Company is not party to any agreement, plan, arrangement or
\nother Contract covering any employee or independent contractor or former
\nemployee or independent contractor of the Company that, individually or
\ncollectively, could give rise directly or indirectly to the payment of any
\namount that would not be deductible pursuant to Section 280G or Section 162(m)
\nof the Code. Except as set forth in Part 5.14 of the Disclosure Schedule, the
\nCompany is not, and has never been, a party to or bound by any tax indemnity
\nagreement, tax-sharing agreement, tax allocation agreement or similar Contract,
\nand has not otherwise assumed the tax Liability of any other Person under
\ncontract.<\/p>\n
(g) The Company is not a United States real property holding
\ncorporation within the meaning of Section 897(c)(2) of the Code and has not been
\na United States real property holding corporation within the applicable period
\nspecified in Section 897(c)(1)(A)(ii) of the Code.<\/p>\n
(h) The Company has no net operating losses or other tax attributes
\ncurrently subject to limitation under Code Section 382, 383 or 384, or the
\nfederal consolidated return regulations.<\/p>\n
(i) The Company’s final 1999 U.S. income tax return to be prepared
\npursuant to Section 14.4(b) will contain, in all material respects, an accurate
\nand complete description of the Company’s tax basis in its assets, its current
\nand accumulated earnings and profits, its tax carryovers, and any tax elections.<\/p>\n
5.15 Securities Laws Compliance; Registration Rights.<\/p>\n
The Company has complied with all federal and state securities laws in
\nconnection with all offers and sales of securities issued by the Company prior
\nto the date of this Agreement. The Company has not heretofore granted any
\npurchaser of its securities the right to require the Company to register any
\nsecurities under the Securities Act or to qualify for any exemption thereunder.<\/p>\n
5.16 Finders and Brokers; Fees.<\/p>\n
(a) Neither the Company nor any Person acting on behalf of the Company
\nhas engaged any finder, broker, intermediary or any similar Person in connection
\nwith the Transactions.<\/p>\n
20<\/p>\n
(b) The Company has not entered into a contract or other agreement
\nthat provides that a fee shall be paid to any Person or Entity if the
\nTransactions are consummated.<\/p>\n
5.17 Environmental Compliance.<\/p>\n
To the knowledge of the Company, the Company is, and has been at all times,
\nin compliance in all material respects with all Environmental Laws, the
\nviolation of which would have a material adverse effect on the Company’s
\nbusiness, assets or operations.<\/p>\n
5.18 Insurance.<\/p>\n
(a) Part 5.18 of the Disclosure Schedule sets forth each insurance
\npolicy maintained by or at the expense of, or for the direct or indirect benefit
\nof, the Company.<\/p>\n
(b) The Company has delivered to the Purchaser copies of all of the
\ninsurance policies identified in Part 5.18 of the Disclosure Schedule (including
\nall renewals thereof and endorsements thereto) and binders relating thereto.<\/p>\n
(c) Each of the policies identified in Part 5.18 of the Disclosure
\nSchedule is in full force and effect. All of the information contained in the
\napplications submitted in connection with said policies was (at the times said
\napplications were submitted) accurate and complete, and all premiums and other
\namounts owing with respect to said policies have been paid in full on a timely
\nbasis. Each of the policies identified in Part 5.18 of the Disclosure Schedule
\nwill continue in full force and effect following the Closing, and the Company
\nhas performed all of its material obligations under each policy to which it is a
\nparty or that provides coverage to it or any of its directors or officers in
\nconnection with their performance of services to the Company.<\/p>\n
(d) There is no pending claim under or based upon any of the policies
\nidentified in Part 5.18 of the Disclosure Schedule, and no event has occurred,
\nand no condition or circumstance exists, that might (with or without notice or
\nlapse of time) directly or indirectly give rise to or serve as a basis for any
\nsuch claim.<\/p>\n
(e) The Company has not received:<\/p>\n
(i) any notice or other communication (in writing or otherwise)
\nregarding the actual or possible cancellation or invalidation of any of the
\npolicies identified in Part 5.18 of the Disclosure Schedule or regarding any
\nactual or possible adjustment in the amount of the premiums payable with respect
\nto any of said policies; or<\/p>\n
(ii) any notice or other communication (in writing or otherwise)
\nregarding any actual or possible refusal of coverage under, or any actual or
\npossible rejection of any claim under, any of the policies identified in Part
\n5.18 of the Disclosure Schedule.<\/p>\n
21<\/p>\n
5.19 Related Party Transactions.<\/p>\n
(a) No Related Party has, and no Related Party has at any time since
\nDecember 31, 1998, had, any direct or indirect material interest of any nature
\nin any material asset of the Company or any Company Contract.<\/p>\n
(b) No Related Party is, or has at any time since December 31, 1998,
\nbeen, indebted to the Company for an amount, individually or in the aggregate,
\nin excess of Ten Thousand Dollars ($10,000).<\/p>\n
(c) Since December 31, 1998, no Related Party has entered into, or has
\nhad any direct or indirect material financial interest in, any Company Contract,
\ntransaction or business dealing of any nature involving the Company.<\/p>\n
(d) No Related Party is competing, or has at any time since December
\n31, 1998, competed, directly or indirectly, with the Company in any market
\nserved by the Company.<\/p>\n
5.20 Absence of Changes.<\/p>\n
Since April 30, 1999:<\/p>\n
(a) there has not been any material adverse change in the Company’s
\nbusiness, assets, Liabilities or operations and, to the knowledge of the
\nCompany, no event has occurred that is likely to have a material adverse effect
\non the Company’s business, assets, Liabilities or operations;<\/p>\n
(b) the Company has not declared, accrued, set aside or paid any
\ndividend or made any other distribution in respect of any shares of capital
\nstock;<\/p>\n
(c) the Company has not amended its Articles of Incorporation or
\nBylaws and has not effected or been a party to any Acquisition Transaction,
\nrecapitalization, reclassification of shares, stock split, reverse stock split
\nor similar transaction;<\/p>\n
(d) the Company has not made any individual capital expenditure in
\nexcess of Twenty-Five Thousand Dollars ($25,000);<\/p>\n
(e) the Company has not pledged or hypothecated any of its material
\nassets or otherwise permitted any of its material assets to become subject to
\nany encumbrance;<\/p>\n
(f) the Company has not made any loan or advance to any Person;<\/p>\n
(g) the Company has not paid any bonus or made any profit-sharing or
\nsimilar payment to, or increased the amount of the wages, salary, commissions,
\nfringe benefits or other compensation or remuneration payable to, any of its
\ndirectors, officers or employees;<\/p>\n
(h) there has been no resignation or termination of employment of any
\nofficer or key employee of the Company;<\/p>\n
22<\/p>\n
(i) there has been no borrowing or agreement to borrow by the Company
\nor material change in the contingent obligations of the Company by way of
\nguaranty, endorsement, indemnity, warranty or otherwise or grant of a mortgage
\nor security interest in any property of the Company;<\/p>\n
(j) the Company has not discharged any encumbrance or discharged, paid
\nor forgiven any indebtedness or other Liability in excess of Twenty-Five
\nThousand Dollars ($25,000), individually or in the aggregate, except for
\naccounts payable that (i) are reflected as current Liabilities in the
\n“Liabilities” column of the Unaudited Interim Balance Sheet or have been
\nincurred by the Company since the date of the Unaudited Interim Balance Sheet in
\nthe Ordinary Course of Business, and (ii) have been discharged or paid in the
\nOrdinary Course of Business;<\/p>\n
(k) the Company has not released or waived any material right or
\nclaim;<\/p>\n
(l) the Company has not changed any of its methods of accounting or
\naccounting practices in any respect;<\/p>\n
(m) the Company has not received notice that there has been a loss of,
\nor cancellation of a material order by, any customer of the Company; and<\/p>\n
(n) the Company has not agreed, committed or offered (in writing or
\notherwise), and has not attempted, to take any of the actions referred to in
\nclauses (c) through (m) above.<\/p>\n
5.21 Powers of Attorney.<\/p>\n
The Company has not given a power of attorney to any Person.<\/p>\n
5.22 Benefit Plans; ERISA.<\/p>\n
(a) Part 5.22 of the Disclosure Schedule lists (i) all “employee
\nbenefit plans” within the meaning of Section 3(3) of ERISA, (ii) all
\nemployment agreements, including, but not limited to, any individual benefit
\narrangement, policy or practice with respect to any current or former
\nemployee or director of the Company or Member of the Controlled Group, and
\n(iii) all other employee benefit, bonus or other incentive compensation,
\nstock option, stock purchase, stock appreciation, severance pay, lay-off or
\nreduction in force, change in control, sick pay, vacation pay, salary
\ncontinuation, retainer, leave of absence, educational assistance, service
\naward, employee discount, and fringe benefit plans, arrangements, policies or
\npractices, whether legally binding or not, which the Company or any Member of
\nthe Controlled Group maintains, contributes to or has any obligation to or
\nLiability for (collectively, the “PLANS”).<\/p>\n
(b) None of the Plans is a Defined Benefit Plan, and neither the
\nCompany nor any Member of the Controlled Group has ever sponsored, maintained
\nor contributed to, or ever been obligated to contribute to, a Defined Benefit
\nPlan that could reasonably be expected to result in a material amount of
\nLiability under Title IV of ERISA.<\/p>\n
23<\/p>\n
(c) None of the Plans is a Multiemployer Plan, and neither the Company
\nnor any Member of the Controlled Group has ever contributed to, or ever been
\nobligated to contribute to, a Multiemployer Plan that could reasonably be
\nexpected to result in a material amount of Liability under Title IV of ERISA.<\/p>\n
(d) The Company does not maintain or contribute to any welfare benefit
\nplan which provides health benefits to an employee after the employee’s
\ntermination of employment or retirement except as required under Section 4980B
\nof the Code and Sections 601 through 608 of ERISA or comparable California law.<\/p>\n
(e) Each Plan that is an “employee benefit plan,” as defined in
\nSection 3(3) of ERISA, complies in all material respects by its terms and in
\noperation with the requirements provided by any and all statutes, orders or
\ngovernmental rules or regulations currently in effect and applicable to the
\nPlan, including but not limited to ERISA and the Code.<\/p>\n
(f) All reports, forms and other documents required to be filed with
\nany government entity with respect to any Plan (including, without limitation,
\nsummary plan descriptions, Forms 5500 and summary annual reports) have been
\ntimely filed and are accurate.<\/p>\n
(g) Each Plan intended to qualify under Section 401(a) of the Code is
\nthe subject of a favorable determination letter issued by the Internal Revenue
\nService. To the Company’s knowledge, nothing has occurred since the date of the
\nInternal Revenue Service’s favorable determination letter that could adversely
\naffect the qualification of the Plan and its related trust. The Company and each
\nMember of the Controlled Group have timely and properly applied for a written
\ndetermination by the Internal Revenue Service on the qualification of each such
\nPlan and its related trust under Section 401(a) of the Code, as amended by the
\nTax Reform Act of 1986 and subsequent legislation enacted through the date
\nhereof, and Section 501 of the Code.<\/p>\n
(h) All contributions owed for all periods ending prior to the Closing
\nDate (including periods from the first day of the current plan year to the
\nClosing Date) under any Plan have been or will be made prior to the Closing Date
\nby the Company in accordance with past practice and the recommended contribution
\nin any applicable actuarial report.<\/p>\n
(i) All insurance premiums have been paid in full, subject only to
\nnormal retrospective adjustments in the Ordinary Course, with regard to the
\nPlans for plan years ending on or before the Closing Date.<\/p>\n
(j) With respect to each Plan:<\/p>\n
(i) no prohibited transactions (as defined in Section 406 or
\n407 of ERISA or Section 4975 of the Code) have occurred for which an exemption
\nis not available that could reasonably be expected to result in a material
\namount of Liability to the Company;<\/p>\n
(ii) no actions or claims (other than routine claims for
\nbenefits made in the Ordinary Course of Plan administration for which Plan
\nadministrative review procedures have not been exhausted) are pending,
\nthreatened or imminent against or with respect to the Plan, <\/p>\n
24<\/p>\n
any employer who is participating (or who has participated) in the Plan or any
\nfiduciary (as defined in Section 3(21) of ERISA) of the Plan that could
\nreasonably be expected to result in a material amount of Liability to the
\nCompany;<\/p>\n
(iii) no facts exist which could give rise to any such action or
\nclaim; and<\/p>\n
(iv) the Plan provides that it may be amended or terminated at
\nany time and, except for benefits protected under Section 411(d) of the Code,
\nall benefits payable to current, terminated employees or any beneficiary may be
\namended or terminated by the Company at any time without a material amount of
\nLiability.<\/p>\n
(k) Neither the Company nor any Member of the Controlled Group has any
\nPlan-related Liability or is threatened with any Liability (whether joint or
\nseveral) (i) for any excise tax imposed by Section 4971, 4975, 4976, 4977 or
\n4979 of the Code, or (ii) for a fine under Section 502 of ERISA that could
\nreasonably be expected to result in a material amount of Liability to the
\nCompany.<\/p>\n
(l) All the “group health plans” (as defined in Section 607(1) or
\n733(a)(1) of ERISA or Section 4980B(g)(2) of the Code) that are part of the
\nPlans listed in the Disclosure Schedule are in material compliance with the
\ncontinuation of group health coverage provisions contained in Section 4980B of
\nthe Code and Sections 601 through 608 of ERISA.<\/p>\n
(m) Copies of all documents creating or evidencing any Plan listed in
\nthe Disclosure Schedule, and all reports, forms and other documents required to
\nbe filed with any governmental entity (including, without limitation, summary
\nplan descriptions, Forms 5500 and summary annual reports for all plans subject
\nto ERISA), have been delivered or made available to the Purchaser. There are no
\nnegotiations, demands or proposals which are pending or have been made which
\nconcern matters now covered, or that would be covered, by any Plan listed in the
\nDisclosure Schedule.<\/p>\n
(n) All expenses and Liabilities relating to contributions required by
\nlaw and the terms of the Plans described in the Disclosure Schedule have been,
\nand on the Closing Date will be, fully and properly accrued on the Company’s
\nbooks and records and disclosed in accordance with GAAP and in Plan financial
\nstatements.<\/p>\n
5.23 Full Disclosure.<\/p>\n
(a) This Agreement (including all Schedules and Exhibits hereto), does
\nnot contain nor will it contain any untrue statement of material fact; and does
\nnot omit nor will it omit to state any material fact necessary to make any of
\nthe representations, warranties or other statements or information contained
\nherein, when read collectively, not misleading.<\/p>\n
(b) All the information set forth in the Disclosure Schedule is
\naccurate and complete in all material respects.<\/p>\n
25<\/p>\n
5.24 Due Diligence Information.<\/p>\n
The Company has provided the Purchaser and the Purchaser’s representatives
\nwith full and complete access to all of the Company’s records and other
\ndocuments and data, and has produced all documents and related materials in
\nresponse to the reasonable requests of the Purchaser.<\/p>\n
6. Representations and Warranties of the Selling Shareholders; Investment
\n Intent and Restrictions.<\/p>\n
Each Selling Shareholder, severally and not jointly, represents and
\nwarrants as follows:<\/p>\n
(a) The Selling Shareholder owns, beneficially and of record, that
\nnumber of shares of Company Common Stock specified opposite the Selling
\nShareholder’s name on Schedule I attached hereto, free and clear of any
\nencumbrances.<\/p>\n
(b) The Selling Shareholder has the absolute and unrestricted right,
\npower and authority to enter into and to perform his or her respective
\nobligations under this Agreement and the other Transactional Agreements to which
\nhe or she is contemplated to be a party. This Agreement and the other
\nTransactional Agreements constitute, or upon execution and delivery will
\nconstitute, the legal, valid and binding obligations of the Selling Shareholder,
\nenforceable against him or her in accordance with their respective terms, except
\nto the extent that enforceability may be limited by applicable bankruptcy,
\nreorganization, insolvency, moratorium or other laws affecting the enforcement
\nof creditor’s rights generally and by general principles of equity regardless of
\nwhether such enforceability is considered in a Proceeding at law or in equity.<\/p>\n
(c) To the knowledge of the Selling Shareholder, the execution and
\ndelivery of this Agreement and the other Transactional Agreements, and the
\nconsummation of the Transactions, by the Selling Shareholder will not, directly
\nor indirectly (with or without notice or lapse of time), contravene, conflict
\nwith or result in a violation of, or give any Governmental Body or other Person
\nthe right to challenge any of the Transactions or to exercise any remedy or
\nobtain any relief under, any legal requirement or any Order to which the Selling
\nShareholder is subject.<\/p>\n
(d) There is no pending Proceeding, and, to the knowledge of the
\nSelling Shareholder, no Person has threatened to commence any Proceeding, that
\nchallenges, or that may have the effect of preventing, delaying or making
\nillegal, the Selling Shareholder’s ability to comply with or perform his or her
\nobligations and covenants under the Transactional Agreements; and, to the
\nknowledge of the Selling Shareholder, no event has occurred, and no claim,
\ndispute or other condition or circumstance exists, that might directly or
\nindirectly give rise to or serve as a basis for the commencement of any such
\nProceeding.<\/p>\n
(e) The Selling Shareholder is not subject to any Order that relates
\nto the Company’s business or to any of the assets owned or used by the Company.<\/p>\n
26<\/p>\n
(f) To the knowledge of the Selling Shareholder, there is no proposed
\nOrder that, if issued or otherwise put into effect, may have a material adverse
\neffect on the ability of the Selling Shareholder to comply with or perform any
\ncovenant or obligation under this Agreement and the other Transactional
\nAgreements.<\/p>\n
(g) Neither the Selling Shareholder nor any Person acting on his or
\nher behalf has negotiated with any finder, broker, intermediary or any similar
\nPerson in connection with the transactions contemplated herein.<\/p>\n
With respect to Purchaser Stock, each Selling Shareholder further
\nrepresents and warrants as follows:<\/p>\n
(h) Except as set forth in Part 6 of the Disclosure Schedule, the
\nSelling Shareholder is an “accredited investor” as that term is defined in Rule
\n501(a) of Regulation D of the Securities Act.<\/p>\n
(i) The Selling Shareholder, by reason of his or her business and
\nfinancial experience, has such knowledge, sophistication and experience in
\nfinancial and business matters and in making investment decisions of this type
\nthat he or she is capable of (i) evaluating the merits and risks of an
\ninvestment in Purchaser Stock and making an informed investment decision, (ii)
\nprotecting his or her own interest and (iii) bearing the economic risk of such
\ninvestment. If the Selling Shareholder retained a purchaser’s representative
\nwith respect to the investment in Purchaser Stock that may be made hereby, then
\nthe Selling Shareholder shall, prior to or at the Closing, (A) acknowledge in
\nwriting such representation and (B) cause such representative to deliver a
\ncertificate to the Purchaser containing such representations as are reasonably
\nrequested by the Purchaser.<\/p>\n
(j) The Selling Shareholder is acquiring Purchaser Stock for
\ninvestment for the Selling Shareholder’s own account, not as a nominee or agent
\nand not with a view to, or any intention of, a resale or distribution thereof,
\nin whole or in part, or the grant of any participation therein. The Selling
\nShareholder understands that the Purchaser Stock has not been registered under
\nthe Securities Act or state securities laws by reason of a specific exemption
\nfrom the registration provisions of the Securities Act and applicable state
\nsecurities laws that depends upon, among other things, the bona fide nature of
\nthe investment intent and the accuracy of the Selling Shareholder’s
\nrepresentations as expressed in this Agreement. The Selling Shareholder has not
\nbeen formed for the specific purpose of acquiring Purchaser Stock. The Selling
\nShareholder further understands that the Purchaser shall have no obligation to
\nregister Purchaser Stock under the Securities Act or any state securities laws
\nor to take any action that would make available any exemption from the
\nregistration requirements of such laws, except pursuant to the Rights Agreement.
\nThe Selling Shareholder hereby acknowledges that because of the restrictions on
\ntransfer or assignment of Purchaser Stock to be issued in connection with the
\nMerger hereunder, the Selling Shareholder may have to bear the economic risk of
\nthe investment commitment in Purchaser Stock for an indefinite period of time.<\/p>\n
(k) The Selling Shareholder will observe and comply with the
\nSecurities Act and the rules and regulations promulgated thereunder, as now in
\neffect and as from time to time <\/p>\n
27<\/p>\n
amended, in connection with any offer, sale, pledge, transfer or other
\ndisposition of Purchaser Stock. In furtherance of the foregoing, and in addition
\nto any restrictions contained in this Agreement or the other Transactional
\nAgreements, the Selling Shareholder will not offer to sell, exchange, transfer,
\npledge, or otherwise dispose of any Purchaser Stock unless at such time at least
\none of the following is satisfied:<\/p>\n
(i) a registration statement under the Securities Act covering
\nPurchaser Stock proposed to be sold, transferred or otherwise disposed of,
\ndescribing the manner and terms of the proposed sale, transfer or other
\ndisposition, and containing a current prospectus, shall have been filed with the
\nSEC and made effective under the Securities Act;<\/p>\n
(ii) such transaction shall be permitted pursuant to the
\nprovisions of Rule 144;<\/p>\n
(iii) counsel representing the Selling Shareholder, satisfactory
\nto the Purchaser, shall have advised the Purchaser in a written opinion letter
\nreasonably satisfactory to the Purchaser and its counsel, and upon which the
\nPurchaser and its counsel may rely, that no registration under the Securities
\nAct would be required in connection with the proposed sale, transfer or other
\ndisposition; or<\/p>\n
(iv) an authorized representative of the SEC shall have rendered
\nwritten advice to the Selling Shareholder (sought by the Selling Shareholder or
\ncounsel to the Selling Shareholder, with a copy thereof and of all other related
\ncommunications delivered to the Purchaser) to the effect that the SEC would take
\nno action, or that the staff of the SEC would not recommend that the SEC take
\naction, with respect to the proposed sale, transfer or other disposition if
\nconsummated.<\/p>\n
(l) The Selling Shareholder understands that an investment in
\nPurchaser Stock involves substantial risks. The Selling Shareholder has been
\ngiven the opportunity to make a thorough investigation of the proposed
\nactivities of the Purchaser and, upon request to the Purchaser, has been
\nfurnished with materials relating to the Purchaser and its proposed activities,
\nincluding, without limitation, a copy of the Purchaser’s Registration Statement
\non Form S-1 dated April 9, 1999 (the “REGISTRATION STATEMENT”) and the Purchaser
\nSEC Reports. The Selling Shareholder has been afforded the opportunity to obtain
\nany additional information deemed necessary by the Selling Shareholder to verify
\nthe accuracy of any representations made or information conveyed to the Selling
\nShareholder. The Selling Shareholder confirms that all documents, records and
\nbooks pertaining to its investment in Purchaser Stock and requested by the
\nSelling Shareholder have been made available or delivered to the Selling
\nShareholder. The Selling Shareholder has had an opportunity to ask questions of
\nand receive answers from the Purchaser, or from a Person or Persons acting on
\nthe Purchaser’s behalf, concerning the terms and conditions of this investment.
\nThe Selling Shareholder has relied upon, and is making his or her investment
\ndecision based upon, the Registration Statement and other information publicly
\navailable about the Purchaser.<\/p>\n
(m) The Selling Shareholder has no knowledge of any causes of action
\nor other claims that could have been or in the future might be asserted by the
\nSelling Shareholder against <\/p>\n
28<\/p>\n
the Company or any of its predecessors, successors, assigns, directors,
\nemployees, agents or representatives arising out of facts or circumstances
\noccurring at any time on or prior to the date hereof and in any way relating to
\nany duty or obligation of the Company or any of such other parties to the
\nSelling Shareholder.<\/p>\n
(n) The Selling Shareholder expressly acknowledges that with respect
\nto any potential short-swing profit liability pursuant to Section 16(b) of the
\nExchange Act, the Selling Shareholder has not relied on any statement or
\nrepresentation by Morrison & Foerster, LLP, counsel to the Purchaser.<\/p>\n
(o) Each Selling Shareholder is a “United States person,” within the
\nmeaning of Section 7701(a)(30) of the Code.<\/p>\n
7. Representations and Warranties of the Purchaser and Merger Sub.<\/p>\n
Except as specifically set forth in the disclosure schedule provided by the
\nPurchaser to the Selling Shareholders attached hereto (the “PURCHASER’S
\nDISCLOSURE SCHEDULE”), the parts of which are numbered to correspond to the
\nsection numbers of this Agreement, the Purchaser and Merger Sub, jointly and
\nseverally, hereby represent and warrant to the Selling Shareholders as follows:<\/p>\n
7.1 Organization, Good Standing, Qualification; Capitalization.<\/p>\n
(a) The Purchaser is a corporation duly organized, validly existing
\nand in good standing under the laws of the State of Delaware, is qualified to
\nconduct business and is in both corporate and tax good standing under the laws
\nof each jurisdiction in which the nature of its business or the ownership or
\nleasing of its properties requires such qualification. The Purchaser has all the
\nrequisite corporate power and authority to own and operate its properties and
\nassets and to carry out the provisions hereof and thereof and to carry on its
\nbusiness as currently conducted.<\/p>\n
(b) Merger Sub is a corporation duly organized, validly existing and
\nin good standing under the laws of the State of California, is qualified to
\nconduct business and is in both corporate and tax good standing under the laws
\nof each jurisdiction in which the nature of its business or the ownership or
\nleasing of its properties requires such qualification. Merger Sub has all the
\nrequisite corporate power and authority to own and operate its properties and
\nassets and to carry out the provisions hereof and thereof, and to carry on its
\nbusiness as currently conducted.<\/p>\n
(c) The description of the outstanding shares of Purchaser’s
\nauthorized capital stock in the Purchaser’s Annual Report on Form 10-K for the
\nyear ended December 31, 1998 (the “FORM 10-K”) is true and correct.<\/p>\n
7.2 Investment Representations.<\/p>\n
(a) The Purchaser understands that the Company Common Stock has not
\nbeen registered under the Securities Act. The Purchaser also understands that
\nthe Company Common <\/p>\n
29<\/p>\n
Stock is being offered and sold pursuant to an exemption from registration
\ncontained in the Securities Act based in part upon the Purchaser’s
\nrepresentations contained in this Section 7.2.<\/p>\n
(b) The Purchaser is acquiring the Company Common Stock for the
\nPurchaser’s own account for investment only, and not with the current intention
\nof making a public distribution thereof.<\/p>\n
(c) The Purchaser represents that by reason of its, or of its
\nmanagement’s, business or financial experience, the Purchaser has the capacity
\nto protect its own interests in connection with the Transactions contemplated in
\nthis Agreement and the other Transactional Agreements. The Purchaser is able to
\nbear the loss of its entire investment in the Company. The Purchaser is not a
\ncorporation, partnership or other entity specifically formed for the purpose of
\nconsummating this transaction.<\/p>\n
(d) The Purchaser is an accredited investor as that term is defined in
\nRule 501(a) of Regulation D, promulgated pursuant to the Securities Act.<\/p>\n
7.3 Purchaser Stock.<\/p>\n
The Purchaser Stock to be issued to the Selling Shareholders and upon
\nexercise of the Company Options assumed by the Purchaser, when issued in
\nconnection with this Agreement and the other Transactional Agreements, will be
\nduly authorized, validly issued and nonassessable.<\/p>\n
7.4 Authority; Binding Nature of Agreements.<\/p>\n
(a) The execution, delivery and performance of this Agreement and the
\nTransactional Agreements, and all other agreements and instruments contemplated
\nto be executed and delivered by the Purchaser or Merger Sub, as the case may be,
\nin connection herewith, have been duly authorized by all necessary action on the
\npart of the Purchaser and Merger Sub and their respective boards of directors.<\/p>\n
(b) This Agreement, the other Transactional Agreements, and all other
\nagreements and instruments contemplated to be executed and delivered by the
\nPurchaser or Merger Sub each constitute the legal, valid and binding obligations
\nof the Purchaser and Merger Sub, enforceable against the Purchaser and Merger
\nSub in accordance with their terms, except to the extent that enforceability may
\nbe limited by applicable bankruptcy, reorganization, insolvency, moratorium or
\nother laws affecting the enforcement of creditor’s rights generally and by
\ngeneral principles of equity regardless of whether such enforceability is
\nconsidered in a Proceeding at law or in equity.<\/p>\n
30<\/p>\n
7.5 Non-Contravention; Consents.<\/p>\n
The execution and delivery of this Agreement and the other Transactional
\nAgreements, and the consummation of the Transactions, by the Purchaser and
\nMerger Sub will not, directly or indirectly (with or without notice or lapse of
\ntime):<\/p>\n
(a) contravene, conflict with or result in a material violation of (i)
\nthe Purchaser’s and Merger Sub’s Certificate or Articles of Incorporation or
\nBylaws, or (ii) any resolution adopted by the Purchaser Board and Merger Sub
\nBoard or any committee thereof or the stockholders of the Purchaser and Merger
\nSub;<\/p>\n
(b) to the knowledge of the Purchaser and Merger Sub, contravene,
\nconflict with or result in a material violation of, or give any Governmental
\nBody the right to challenge any of the Transactions or to exercise any remedy or
\nobtain any relief under, any legal requirement or any Order to which the
\nPurchaser and Merger Sub or any material assets owned or used by them are
\nsubject;<\/p>\n
(c) to the knowledge of the Purchaser and Merger Sub, cause any
\nmaterial assets owned or used by the Purchaser and Merger Sub to be reassessed
\nor revalued by any taxing authority or other Governmental Body;<\/p>\n
(d) to the knowledge of the Purchaser and Merger Sub, contravene,
\nconflict with or result in a material violation of any of the terms or
\nrequirements of, or give any Governmental Body the right to revoke, withdraw,
\nsuspend, cancel, terminate or modify, any Governmental Authorization that is
\nheld by the Purchaser or Merger Sub or any of their respective employees or that
\notherwise relates to the Purchaser’s and Merger Sub’s business or to any of the
\nmaterial assets owned or used by the Purchaser and Merger Sub;<\/p>\n
(e) contravene, conflict with or result in a material violation or
\nmaterial breach of, or material default under, any Purchaser Contract;<\/p>\n
(f) give any Person the right to any payment by the Purchaser or
\nMerger Sub or give rise to any acceleration or change in the award, grant,
\nvesting or determination of options, warrants, rights, severance payments or
\nother contingent obligations of any nature whatsoever of the Purchaser or Merger
\nSub in favor of any Person, in any such case as a result of the change in
\ncontrol of Merger Sub or otherwise resulting from the Transactions; or<\/p>\n
(g) result in the imposition or creation of any material encumbrance
\nupon or with respect to any material asset owned or used by the Purchaser and
\nMerger Sub.<\/p>\n
Except as set forth in Part 7.5 of the Disclosure Schedule and as contemplated
\nin this Agreement and the other Transactional Agreements, the Purchaser and
\nMerger Sub will not be required to make any filing with or give any notice to,
\nor obtain any Consent from, any Person in connection with the execution and
\ndelivery of this Agreement and the other Transactional Agreements or the
\nconsummation or performance of any of the Transactions.<\/p>\n
31<\/p>\n
7.6 Legal Proceedings.<\/p>\n
The description of the Purchaser’s legal proceedings in the Form 10-K is
\ntrue and correct.<\/p>\n
7.7 Finders and Brokers.<\/p>\n
The Purchaser and Merger Sub will indemnify the Selling Shareholders and
\nthe Company and hold them harmless from any Liability or expense arising from
\nany claim for brokerage commissions, finder’s fees or other similar compensation
\nbased upon any agreement, arrangement or understanding made by or on behalf of
\nthe Purchaser or Merger Sub.<\/p>\n
7.8 Reports and Financial Statements; Absence of Certain Changes.<\/p>\n
(a) The Purchaser has filed all reports required to be filed with
\nthe SEC pursuant to the Exchange Act, if any, since its initial public
\noffering on December 9, 1998 (all such reports, including those to be filed
\nprior to the Closing Date, collectively, the “PURCHASER SEC REPORTS”), and
\nhas previously furnished or made available to the Company true and complete
\ncopies of all the Purchaser SEC Reports filed, if any, with respect to
\nperiods ending after December 9, 1998 (including any exhibits thereto) and
\nwill promptly deliver to the Company any Purchaser SEC Reports filed between
\nthe date hereof and the Effective Time. All of such Purchaser SEC Reports
\ncomplied at the time they were filed in all material respects with applicable
\nrequirements of the Securities Act and the Exchange Act and the rules and
\nregulations thereunder. None of such Purchaser SEC Reports, as of their
\nrespective dates (as amended through the date hereof), contained or, with
\nrespect to Purchaser SEC Reports filed after the date hereof and prior to the
\nClosing Date, will contain any untrue statement of a material fact or omitted
\nor, with respect to Purchaser SEC Reports filed after the date hereof and
\nprior to the Closing Date, will omit to state contain a material fact
\nrequired to be stated therein or necessary to make the statements therein, in
\nlight of the circumstances under which they were made, not misleading. The
\naudited financial statements of the Purchaser included in the Purchaser SEC
\nReports comply in all material respects with the published rules and
\nregulations of the SEC with respect thereto, and such audited financial
\nstatements (i) were prepared from the books and records of the Purchaser,
\n(ii) were prepared in accordance with GAAP applied on a consistent basis
\n(except as may be indicated therein or in the notes or schedules thereto) and
\n(iii) present fairly the financial position of the Purchaser as of the dates
\nthereof and the results of operations and cash flows for the periods then
\nended. The unaudited financial statements included in the Purchaser SEC
\nReports comply in all material respects with the published rules and
\nregulations of the SEC with respect thereto; and such unaudited financial
\nstatements (A) were prepared from the books and records of the Purchaser, (B)
\nwere prepared in accordance with GAAP, except as otherwise permitted under
\nthe Exchange Act and the rules and regulations thereunder, on a consistent
\nbasis (except as may be indicated therein or in the notes or schedules
\nthereto) and (C) present fairly the financial position of the Purchaser as of
\nthe dates thereof and the results of operations and cash flows for the
\nperiods then ended, subject to normal year-end adjustments and any other
\nadjustments described therein or in the notes or schedules thereto. The
\nforegoing representations and warranties shall also be deemed to be made with
\nrespect to all filings made with the SEC on or before the Effective Time.<\/p>\n
32<\/p>\n
(b) Except as specifically contemplated by this Agreement or reflected
\nin the Purchaser SEC Reports, since March 31, 1999 there has not been (i) any
\nchange or event having a material adverse effect on the Purchaser, (ii) any
\ndeclaration setting aside or payment of any dividend or distribution with
\nrespect to the common stock of the Purchaser other than consistent with past
\npractices, or (iii) any material change in the Purchaser’s accounting
\nprinciples, procedures or methods.<\/p>\n
7.9 Compliance with Applicable Law.<\/p>\n
Except as disclosed in the Purchaser SEC Reports filed prior to the date of
\nthis Agreement, the Purchaser holds all licenses, franchises, permits,
\nvariances, exemptions, orders, approvals and authorizations necessary for the
\nlawful conduct of its business under and pursuant to, and the business of the
\nPurchaser is not being conducted in violation of, any provision of any federal,
\nstate, local or foreign statute, law, ordinance, rule, regulation, judgment,
\ndecree, order, concession, grant, franchise, permit or license or other
\ngovernmental authorization or approval applicable to the Purchaser, except to
\nthe extent that the failure or violation would not in the aggregate have a
\nmaterial adverse effect.<\/p>\n
7.10 Complete Copies of Requested Reports.<\/p>\n
The Purchaser has delivered or made available (through public sources or
\ndirectly) true and complete copies of each document that has been reasonably
\nrequested by the Company or its counsel in connection with their legal and
\naccounting review of the Purchaser.<\/p>\n
7.11 Full Disclosure.<\/p>\n
(a) Neither this Agreement (including all Schedules and Exhibits
\nhereto) nor any of the Transactional Agreements contemplated to be executed and
\ndelivered by the Purchaser or Merger Sub in connection with this Agreement
\ncontains any untrue statement of material fact; and none of such documents omits
\nto state any material fact necessary to make any of the representations,
\nwarranties or other statements or information contained therein not misleading.<\/p>\n
(b) All of the information regarding the Purchaser or Merger Sub and
\nthe business, condition, assets, Liabilities, operations, financial performance,
\nnet income and prospects of either that has been furnished to the Company or any
\nof its representatives by or on behalf of the Purchaser, Merger Sub or any of
\nthe Purchaser’s representatives, is accurate and complete in all material
\nrespects.<\/p>\n
7.12 Contracts.<\/p>\n
(a) Except as set forth in Part 7.12 of the Disclosure Schedule, no
\nPurchaser Contracts have come into existence since March 31, 1999 that will be
\nrequired to be filed as exhibits to the Purchaser’s Quarterly Report on Form 10-
\nQ for the quarter ended June 30, 1999.<\/p>\n
(b) The Purchaser has previously made available for inspection and
\ncopying to the Company complete and correct copies (or, in the case of oral
\ncontracts, a complete and correct <\/p>\n
33<\/p>\n
description) of each Purchaser Contract (and any amendments or supplements
\nthereto) listed on Part 7.12 of the Disclosure Schedule. Except as set forth on
\nPart 7.12 of the Disclosure Schedule, (i) each Purchaser Contract (including any
\nPurchaser Contract filed with the Purchaser SEC Reports) listed is in full force
\nand effect, (ii) neither the Purchaser nor, to its knowledge, any other party is
\nin material default under any such Purchaser Contract, and no event has occurred
\nwhich constitutes, or with the lapse of time or the giving of notice or both
\nwould constitute, a material default, (iii) the Purchaser has not expressly
\nwaived any of its material rights under any Purchaser Contract, (iv) to the
\nknowledge of the Purchaser, there are no material disputes or disagreements
\nbetween the Purchaser and any other party with respect to any such Purchaser
\nContract, and (v) each other party to each such Purchaser Contract has consented
\nor been given notice (or prior to the Closing Date shall have consented or been
\ngiven notice), where such consent or the giving of such notice is necessary,
\nsufficient that such Purchaser Contract shall remain in full force and effect
\nfollowing the consummation of the Transactions, without material modification of
\nthe rights or obligations of the Purchaser thereunder.<\/p>\n
8. Pre-Closing Covenants of the Company.<\/p>\n
8.1 Corporate Proceedings; Shareholder Approval.<\/p>\n
The Company shall ensure that resolutions (in form satisfactory to the
\nPurchaser) of the Company Board approving or adopting, as applicable, all
\nnecessary further action of the Company Board, this Agreement, the other
\nTransactional Agreements and the Transactions and recommending approval by the
\nCompany’s shareholders of this Agreement, the other Transactional Agreements and
\nthe Transactions, are passed as necessary pursuant to applicable law. In
\nfurtherance, and not in limitation, of the foregoing:<\/p>\n
(a) the Company, acting through the Company Board, shall, in
\naccordance with all applicable legal requirements and its Articles of
\nIncorporation and Bylaws, (i) promptly and duly call, give notice of, convene
\nand hold as soon as practicable a meeting (or solicit an action by written
\nconsent in lieu thereof) of its shareholders for the purpose of voting to
\napprove and adopt the Merger and this Agreement and the other Transactional
\nAgreements to which the Company is a party, and (ii) recommend approval and
\nadoption of the Merger and this Agreement and the other Transactional Agreements
\nto which the Company is a party by the Company’s shareholders. The Company shall
\nconsult with the Purchaser as to the timing and procedures of such meeting (or
\nconsent solicitation).<\/p>\n
8.2 Access and Investigation.<\/p>\n
The Company shall ensure that, at all times during the Pre-Closing Period:<\/p>\n
(a) The Company and its representatives provide the Purchaser and its
\nrepresentatives with such copies of existing books, records, Tax Returns, work
\npapers and other documents and information relating to the Company as the
\nPurchaser may reasonably request in good faith; and<\/p>\n
34<\/p>\n
(b) The Company and its representatives compile, and provide the
\nPurchaser and its representatives with, such additional financial, operating and
\nother data and information regarding the Company as the Purchaser may reasonably
\nrequest in good faith.<\/p>\n
8.3 Operation of Business.<\/p>\n
The Company, and with respect to subsections (a) and (b) below, the Selling
\nShareholders, shall ensure that, during the Pre-Closing Period:<\/p>\n
(a) the Selling Shareholders do not directly or indirectly sell or
\notherwise transfer, or offer, agree or commit (in writing or otherwise) to sell
\nor otherwise transfer, any of their Company Common Stock or any interest in or
\nright relating to any of their Company Common Stock;<\/p>\n
(b) the Selling Shareholders do not permit, or offer, agree or commit
\n(in writing or otherwise) to permit, any of the Company Common Stock to become
\nsubject, directly or indirectly, to any encumbrance;<\/p>\n
(c) the Company conducts its operations exclusively in the Ordinary
\nCourse of Business and in the same manner as such operations have been conducted
\nprior to the date of this Agreement;<\/p>\n
(d) the Company uses its Best Efforts to preserve intact its current
\nbusiness organization, keeps available the services of its current officers and
\nemployees and maintains its relations and goodwill with all suppliers,
\ncustomers, landlords, creditors, licensors, licensees, employees and other
\nPersons having business relationships with the Company;<\/p>\n
(e) the Company keeps in full force all insurance policies identified
\nin Part 5.18 of the Disclosure Schedule;<\/p>\n
(f) the Company immediately notifies the Purchaser of any inquiry,
\nproposal or offer from any Person relating to any Acquisition Transaction;<\/p>\n
(g) the Company does not declare, accrue, set aside or pay any
\ndividend or make any other distribution in respect of any shares of capital
\nstock, and does not repurchase, redeem or otherwise reacquire any shares of
\ncapital stock or other securities, except for shares for which the Company has a
\nrepurchase right under the Option Plan;<\/p>\n
(h) the Company does not sell or otherwise issue (or grant any
\nwarrants, options or other rights to purchase) any shares of capital stock or
\nany other securities, other than options to purchase up to the number of shares
\nof Company Common Stock pursuant to the Option Plan set forth on Schedule II
\nattached hereto and shares of Company Common Stock issuable upon conversion of
\noutstanding Company Preferred Stock, or unless approved in advance in writing by
\nthe Purchaser;<\/p>\n
35<\/p>\n
(i) the Company does not amend its Articles of Incorporation or
\nBylaws, and does not effect, or become a party to, any Acquisition Transaction,
\nrecapitalization, reclassification of shares, stock split, reverse stock split
\nor similar transaction, or enter into any transaction or take any other action
\nof the type referred to in Section 5.20(c) through (m);<\/p>\n
(j) the Company does not form any subsidiary or acquire any equity
\ninterest or other interest in any other Entity;<\/p>\n
(k) the Company does not make any capital expenditure, except for
\ncapital expenditures made in the Ordinary Course of Business that, when added to
\nall other capital expenditures made on behalf of the Company during the Pre-
\nClosing Period, do not exceed Ten Thousand Dollars ($10,000), unless approved in
\nadvance in writing by the Purchaser;<\/p>\n
(l) the Company does not enter into, or permit any of the material
\nassets owned or used by the Company to become bound by, any Contract;<\/p>\n
(m) the Company does not incur, assume or otherwise become subject to
\nany Liability, except for current Liabilities incurred in the Ordinary Course of
\nBusiness, unless approved in advance in writing by the Purchaser;<\/p>\n
(n) the Company does not establish or adopt any employee benefit plan,
\nand does not pay any bonus or make any profit-sharing or similar payment to, or
\nincrease the amount of the wages, salary, commissions, fringe benefits or other
\ncompensation or remuneration payable to, any of its directors, officers or
\nemployees, other than annual adjustments made in the Ordinary Course of
\nBusiness;<\/p>\n
(o) the Company does not change any of its methods of accounting or
\naccounting practices in any respect;<\/p>\n
(p) the Company does not make any Tax election;<\/p>\n
(q) the Company does not commence any Proceeding; and<\/p>\n
(r) neither the Selling Shareholders nor the Company agrees, commits
\nor offers (in writing or otherwise) or attempts to take any of the actions
\ndescribed in the preceding clauses of this Section 8.3.<\/p>\n
8.4 Filings and Consents.<\/p>\n
The Company shall ensure that:<\/p>\n
(a) each filing or notice required to be made or given (pursuant to
\nany applicable legal requirement, Order or Contract, or otherwise) by the
\nCompany or the Selling Shareholders in connection with the execution and
\ndelivery of any of the Transactional Agreements or in connection with the
\nconsummation or performance of any of the Transactions (including each of the
\nfilings and notices identified in Part 5.5 of the Disclosure Schedule) is made
\nor given as soon as possible after the date of this Agreement;<\/p>\n
36<\/p>\n
(b) each Consent required to be obtained (pursuant to any
\napplicable legal requirement, Order or Contract, or otherwise) by the Company
\nor the Selling Shareholders in connection with the execution and delivery of
\nany of the Transactional Agreements or in connection with the consummation or
\nperformance of any of the Transactions (including each of the Consents
\nidentified in Part 5.5 of the Disclosure Schedule) is obtained as soon as
\npossible after the date of this Agreement and remains in full force and
\neffect through the Closing Date;<\/p>\n
(c) the Company promptly delivers to the Purchaser a copy of each
\nfiling made, each notice given and each Consent obtained by the Company or
\nthe Selling Shareholders during the Pre-Closing Period; and<\/p>\n
(d) during the Pre-Closing Period, the Company and its
\nrepresentatives cooperate with the Purchaser and with the Purchaser’s
\nrepresentatives, and prepare and make available such documents and take such
\nother actions as the Purchaser may request in good faith, in connection with
\nany filing, notice or Consent that the Purchaser or Merger Sub is required or
\nelects to make, give or obtain.<\/p>\n
8.5 Notification; Updates to Disclosure Schedule.<\/p>\n
(a) During the Pre-Closing Period, the Company and the Selling
\nShareholders shall promptly notify the Purchaser in writing of:<\/p>\n
(i) the discovery by the Company or the Selling Shareholders
\nof any event, condition, fact or circumstance that constitutes a material
\nbreach of any representation or warranty made by the Company or the Selling
\nShareholders in this Agreement or in any of the other Transactional
\nAgreements; and<\/p>\n
(ii) any event, condition, fact or circumstance that may make
\nthe timely satisfaction of any of the conditions set forth in Section 4.1,
\nimpossible or unlikely.<\/p>\n
(b) If any event, condition, fact or circumstance that is required
\nto be disclosed pursuant to Section 8.5(a) requires any change in the
\nDisclosure Schedule, or if any such event, condition, fact or circumstance
\nwould require such a change assuming the Disclosure Schedule were dated as of
\nthe date of the occurrence, existence or discovery of such event, condition,
\nfact or circumstance, then the Company and the Selling Shareholders shall
\npromptly deliver to the Purchaser an update to the Disclosure Schedule (a
\n“DISCLOSURE SCHEDULE UPDATE”) specifying such change. Such Disclosure
\nSchedule Update shall be deemed to supplement or amend the Disclosure
\nSchedule for the purpose of (i) determining the accuracy of any of the
\nrepresentations and warranties made by the Company or the Selling
\nShareholders in this Agreement as of the Closing, or (ii) determining whether
\nthe conditions set forth in Section 4.1 have been satisfied; unless objected
\nto in writing by the Purchaser.<\/p>\n
(c) If any Disclosure Schedule Update to this Agreement prepared by
\nor on behalf of the Selling Shareholders and the Company is supplemented or
\namended after the execution of this Agreement due to such matter(s) that,
\nindividually or in the aggregate, result in a material adverse effect on the
\nbusiness, condition, assets, Liabilities, operations, financial performance or <\/p>\n
37<\/p>\n
net income of the Company, and the Purchaser objects to such Disclosure
\nSchedule Update, the Purchaser may elect at its sole option to (i) terminate
\nthis Agreement, (ii) proceed with the Closing, or (iii) negotiate a reduction
\nof the Merger Consideration which shall be determined by the parties in good
\nfaith, regardless of whether such matter existed or was known as of the date
\nhereof or arose and became known thereafter; provided, however, that if the
\nPurchaser elects to proceed with the Closing, the Purchaser shall not be
\nentitled to bring a claim against the Company or the Selling Shareholders
\nwith respect to any Disclosure Schedule Update.<\/p>\n
8.6 No Negotiation.<\/p>\n
Neither the Company nor any of its employees, directors,
\nrepresentatives, affiliates or advisors (including, without limitation,
\nlegal, accounting, financial and investment banking advisors) will directly
\nor indirectly on behalf of the Company or the Selling Shareholders:<\/p>\n
(a) enter into any agreement (or grant any option or right) to
\nsell, transfer or otherwise dispose of the shares of capital stock or the
\nassets of the Company or issue any controlling interest in shares of capital
\nstock of the Company, directly or indirectly, to any Person, other than
\nCompany Options and shares issuable upon exercise of the Company Options in
\nthe Ordinary Course of Business;<\/p>\n
(b) hold any discussion with, or provide any information to, any
\nPerson concerning the Company in connection therewith; or<\/p>\n
(c) respond to any inquiry made by any Person concerning a proposed
\nacquisition of any assets or capital stock of the Company, except to advise
\nsuch Person that the Company has entered into this Agreement. The Company
\nand the Selling Shareholders further agree to advise the Purchaser
\nimmediately upon receiving any inquiry from any such Person. If the Company
\nreceives a bona fide offer concerning a proposed acquisition of any assets or
\ncapital stock of the Company, the Company shall, in addition to notifying the
\nPurchaser of the receipt of such offer, identify the identity of the proposed
\nbuyer.<\/p>\n
9. Pre-Closing Covenants of the Purchaser.<\/p>\n
9.1 Corporate Proceedings.<\/p>\n
The Purchaser shall ensure that resolutions (in form satisfactory to the
\nPurchaser) of the Purchaser Board approving or adopting, as applicable, all
\nnecessary further action of the Purchaser Board, this Agreement, the other
\nTransactional Agreements and the Transactions and recommending approval by
\nthe Purchaser’s stockholders of this Agreement, the other Transactional
\nAgreements and the Transactions, are passed as necessary pursuant to
\napplicable law.<\/p>\n
38<\/p>\n
9.2 Access and Investigation.<\/p>\n
The Purchaser shall ensure that, at all times during the Pre-Closing
\nPeriod:<\/p>\n
(a) the Purchaser and its representatives provide the Company and
\nits representatives with free and complete access at reasonable times to the
\nPurchaser’s premises and assets and to all existing books, records, Tax
\nReturns, work papers and other documents and information relating to the
\nPurchaser;<\/p>\n
(b) the Purchaser and its representatives provide the Company and
\nits representatives with such copies of existing books, records, Tax Returns,
\nwork papers and other documents and information relating to the Purchaser as
\nthe Company may request in good faith; and<\/p>\n
(c) the Purchaser and its representatives compile, and provide the
\nCompany and its representatives with, such additional financial, operating
\nand other data and information regarding the Purchaser as the Company may
\nrequest in good faith.<\/p>\n
9.3 Filings and Consents.<\/p>\n
The Purchaser shall ensure that:<\/p>\n
(a) each filing or notice required to be made or given (pursuant to
\nany applicable legal requirement, Order or Contract, or otherwise) by the
\nPurchaser or Merger Sub in connection with the execution and delivery of any
\nof the Transactional Agreements or in connection with the consummation or
\nperformance of any of the Transactions is made or given as soon as possible
\nafter the date of this Agreement;<\/p>\n
(b) each Consent required to be obtained (pursuant to any
\napplicable legal requirement Order or Contract, or otherwise) by the
\nPurchaser or Merger Sub in connection with the execution and delivery of any
\nof the Transactional Agreements or in connection with the consummation or
\nperformance of any of the Transactions is obtained as soon as possible after
\nthe date of this Agreement and remains in full force and effect through the
\nClosing Date;<\/p>\n
(c) the Purchaser promptly delivers to the Company a copy of each
\nfiling made, each material notice given and each material Consent obtained by
\nthe Purchaser or Merger Sub during the Pre-Closing Period; and<\/p>\n
(d) during the Pre-Closing Period, the Purchaser and Merger Sub and
\ntheir representatives cooperate with the Company and its representatives, and
\nprepare and make available such documents and take such other actions as the
\nCompany may request in good faith, in connection with any filing, notice or
\nConsent that the Company is required or elects to make, give or obtain.<\/p>\n
39<\/p>\n
9.4 Notification.<\/p>\n
During the Pre-Closing Period, each of the Purchaser and Merger Sub
\nshall promptly notify the Company in writing of:<\/p>\n
(a) the discovery by the Purchaser of any event, condition, fact or
\ncircumstance that constitutes a breach of any representation or warranty made
\nby the Purchaser or Merger Sub in this Agreement or in any of the other
\nTransactional Agreements;<\/p>\n
(b) any breach of any covenant or obligation of the Purchaser or
\nMerger Sub; and<\/p>\n
(c) any event, condition, fact or circumstance that may make the
\ntimely satisfaction of any of the conditions set forth in Section 4.2,
\nimpossible or unlikely.<\/p>\n
10. Other Agreements.<\/p>\n
10.1 Registration of Company Options.<\/p>\n
The Purchaser agrees that as soon as reasonably practicable after the
\nClosing Date, but in no event later than fifteen (15) days following the
\nClosing Date, it will cause to be filed one or more registration statements
\non Form S-8 under the Securities Act, or amendments to its existing
\nregistration statements on Form S-8, in order to register the shares of
\nPurchaser Stock issuable upon exercise of the aforesaid converted Company
\nOptions.<\/p>\n
10.2 Confidentiality.<\/p>\n
Each of the parties hereto hereby agrees to and reaffirms the terms and
\nprovisions of the Mutual Nondisclosure Agreement by and between the Purchaser
\nand the Company, dated as of April 15, 1999.<\/p>\n
10.3 Public Disclosure.<\/p>\n
Unless otherwise required by law (including, without limitation,
\nsecurities laws) or, as to the Purchaser, by the rules and regulations of the
\nNational Association of Securities Dealers, Inc., prior to the Effective
\nTime, no disclosure (whether or not in response to an inquiry) of the subject
\nmatter of this Agreement or any Transactional Agreement shall be made by any
\nparty hereto unless approved by the Purchaser and the Company prior to
\nrelease; provided, that such approval shall not be unreasonably withheld,
\nprovided, further, that the parties agree and understand that certain
\ndisclosures regarding the Transactions may be made to (a) employees of the
\nPurchaser and the Company, (b) third parties whose consent or approval may be
\nrequired in connection with the Transactions, and (c) the professional
\nadvisors of Purchaser, the Company and the Selling Shareholders, in each case
\nwithout any prior written consent.<\/p>\n
40<\/p>\n
10.4 No Inconsistent Action.<\/p>\n
None of the Purchaser, the Company or the Selling Shareholders shall
\ntake any action inconsistent with the treatment of the Merger as a
\nreorganization under Section 368(a) of the Code.<\/p>\n
10.5 Restrictive Legend.<\/p>\n
All certificates representing Purchaser Stock deliverable to the Selling
\nShareholders pursuant to this Agreement and any certificates subsequently
\nissued with respect thereto or in substitution therefor, unless a sale,
\ntransfer or other disposition pursuant to one or more of the alternative
\nconditions set forth in Section 6(l) shall have occurred, or unless the
\nconditions of paragraph (k) of Rule 144 promulgated under the Securities Act
\nshall have been satisfied, shall bear a legend substantially as follows, in
\naddition to any legend the Purchaser determines is required pursuant to any
\napplicable legal requirement:<\/p>\n
“The shares represented by this certificate may not be offered, sold,
\n pledged, transferred or otherwise disposed of except in accordance with
\n the requirements of the Securities Act of 1933, as amended, and the
\n other conditions specified in that certain Agreement and Plan of Merger
\n dated as of June 10, 1999, a copy of which Agreement and Plan of Merger
\n XOOM.com, Inc. will furnish, without charge, to the holder of this
\n certificate upon written request therefor.”<\/p>\n
The Purchaser, at its discretion, may cause a stop-transfer order to be
\nplaced with its transfer agent(s) with respect to the certificates for
\nPurchaser Stock but not as to the certificates for any part of Purchaser
\nStock as to which said legend is no longer appropriate when one or more of
\nthe alternatives set forth in Section 6(l) shall have been satisfied or the
\nconditions of paragraph (k) of Rule 144 promulgated under the Securities Act
\nshall have been satisfied. Such legend(s) shall be promptly removed when
\nPurchaser Stock delivered to the Selling Shareholders pursuant to this
\nAgreement has been registered.<\/p>\n
10.6 Market Stand-Off.<\/p>\n
Notwithstanding anything in this Agreement to the contrary, in
\nconnection with any public offering of the capital stock of the Purchaser (a
\n“FOLLOW-ON OFFERING”), each Selling Shareholder agrees that, if requested by
\nthe managing underwriter of the Follow-On Offering, such Selling Shareholder
\nshall not, directly or indirectly, sell, offer, contract to sell, grant any
\noption to purchase, transfer the economic risk of ownership in, make any
\nshort sale, pledge or otherwise dispose of, any Purchaser Stock, without the
\nprior written consent of the Purchaser and the managing underwriters of the
\nFollow-On Offering, for a period of ninety (90) days from the effective date
\nof the registration statement under the Securities Act relating to such
\nFollow-On Offering and to the extent otherwise permissible under the
\nrequirements for a tax-free Merger; provided, however, that (a) all officers,
\ndirectors and 5% stockholders of the Purchaser shall enter into similar
\nagreements; (b) shares of Purchaser Stock shall be released from this
\nrestriction to the extent such shares are registered pursuant to the Rights
\nAgreement; and (c) shares of Purchaser Stock shall be released from this
\nrestriction to the extent any other shares are released <\/p>\n
41<\/p>\n
from similar restrictions. This restriction shall be binding upon any
\ntransferee of Purchaser Stock, and the certificates for Purchaser Stock shall
\nbear a legend to such effect. In order to enforce the foregoing covenant, the
\nPurchaser may impose stop-transfer instructions with respect to Purchaser
\nStock until the end of such period.<\/p>\n
10.7 Certain Tax Matters.<\/p>\n
(a) Notwithstanding anything to the contrary in Section 12.5, the
\nSelling Shareholders shall have the right (but not the obligation), at their
\nown expense, to control, defend, settle, compromise or prosecute in any
\nmanner any audit, examination, investigation, hearing or other proceeding
\nwith respect to any Company Return involving only periods ending on or before
\nthe Closing Date; provided, however, that the Selling Shareholders shall not
\nsettle, or compromise any such audit, etc. without the Purchaser’s timely and
\nreasonable prior written consent. Nothing in this Section 10.7(a) shall be
\nconstrued to increase the Selling Shareholders’ maximum indemnification
\nlimitation as set forth in Sections 12.2(a) and 12.5.<\/p>\n
(b) Except as expressly provided in Section 10.7(a), Section 12.5
\nshall determine the procedures for defending any other tax audit,
\nexamination, investigation, hearing or other proceeding with respect to any
\nCompany Return.<\/p>\n
(c) The Purchaser further represents, warrants and covenants as
\nfollows:<\/p>\n
(i) The Purchaser agrees to report the Merger as a
\nreorganization within the meaning of Section 368(a) of the Code, unless
\notherwise required by law or unless advised in writing by counsel to the
\nCompany that the Merger will not qualify as such a reorganization.<\/p>\n
(ii) Prior to the Merger, the Purchaser will be in “control”
\nof Merger Sub within the meaning of Section 368(c) of the Code.<\/p>\n
(iii) The Purchaser has no plan or intention to cause the
\nSurviving Corporation to issue additional shares of stock after the Merger,
\nor take any other action, that would result in the Purchaser losing control
\nof the Surviving Corporation.<\/p>\n
(iv) Except for (A) repurchases or redemptions of Purchaser
\nStock that are consistent with past practices and purchase programs that were
\nnot created or modified in connection with the Merger, (B) possible
\nrepurchases of unvested shares of employees or consultants in connection with
\nthe termination of their services, and (C) possible reacquisitions of
\nPurchaser Stock pursuant to the Escrow Agreement, neither the Purchaser or
\nany “related person” of the Purchaser (within the meaning of Treasury
\nRegulations Section 1.368-1(e)(3)) has any plan or intention to repurchase or
\nredeem any of the Purchaser Stock to be issued in the Merger in exchange for
\nshares of Company capital stock.<\/p>\n
(v) Neither the Purchaser nor any “related person” of the
\nPurchaser (within the meaning of Treasury Regulations Section 1.368-1(e)(3))
\nowns or has at any time during the past years owned any capital stock of the
\nCompany.<\/p>\n
42<\/p>\n
(vi) The Purchaser has no plan or intention to liquidate the
\nSurviving Corporation; to merge the Surviving Corporation with the Purchaser
\nor into any other corporation; to sell, distribute or otherwise dispose of
\nthe capital stock of the Surviving Corporation; or to cause the Surviving
\nCorporation to sell or otherwise dispose of any of its assets (or of any of
\nthe assets acquired from Merger Sub) except for dispositions made in the
\nOrdinary Course of Business or transfers permitted under Section 368(a)(2)(C)
\nof the Code or prescribed by Treasury Regulations Section 1.368-1(d) that
\nwill not affect the Company’s satisfaction of the “continuity of business
\nenterprise” requirement under Section 368 of the Code.<\/p>\n
(vii) Merger Sub has no assets and will have no liabilities
\nassumed by the Company, nor will it transfer to the Company, in the Merger,
\nany assets subject to liabilities. Following the Merger, the historic
\nbusiness of the Surviving Corporation will be continued, or a significant
\nportion of the Surviving Corporation’s historic business assets will be used
\nin a business.<\/p>\n
(viii) Following the Merger, the Purchaser and the Surviving
\nCorporation will comply with the record-keeping and information-filing
\nrequirements of Section 1.368-3 of the Treasury Regulations.<\/p>\n
(ix) None of the employee compensation received by any
\nSelling Shareholder who is or will be an employee of the Company or the
\nPurchaser is or will be separate consideration for, or allocable to, any of
\nhis or her shares of Company Stock to be surrendered in the Merger. None of
\nthe Purchaser Stock received by any Selling Shareholder in the Merger who is
\nor will be an employee of the Company or the Purchaser will be separate
\nconsideration for, or allocable to, any employment, consulting or similar
\narrangement. Any compensation paid or to be paid to any Selling Shareholder
\nwho is or will be an employee of or who will provide advisory services for
\nthe Company, Merger Sub, the Purchaser or any affiliate thereof after the
\nMerger will be determined by bargaining at arm’s length.<\/p>\n
(d) The Selling Shareholders further represent, warrant and
\ncovenant as follows:<\/p>\n
(i) The Selling Shareholders agree to report the Merger as a
\n“reorganization” within the meaning of Section 368(a) of the Code, unless
\notherwise required by law or unless advised in writing by counsel to the
\nSelling Shareholders that the Merger does not constitute such a
\nreorganization.<\/p>\n
(ii) Following the Merger, the Selling Shareholders will
\ncomply with the record-keeping and information filing requirements of Section
\n1.368-3 of the Treasury Regulations.<\/p>\n
(iii) Except for 37,878 shares of Series A Preferred Stock,
\nrepresenting less than one percent (1%) of the total outstanding capital
\nstock of the Company, which will be redeemed prior to the Effective Time by
\nthe Company, the Company has not and will not prior to the Merger redeem or
\nmake any extraordinary distribution (within the meaning of Treasury
\nRegulations Section 1.368-1T(e)(1)(ii)(A)) with respect to any Company
\ncapital stock in connection with the Merger; no “related person” of the
\nCompany (within the meaning of<\/p>\n
43<\/p>\n
Treasury Regulations Section 1.368-1(e)(3)) has purchased or will purchase
\nprior to the Effective Time any Company capital stock in connection with the
\nMerger. The redemption of such shares of Series A Preferred Stock shall be
\nmade solely with the Company’s funds and the Company will not be reimbursed
\nby the Purchaser or a related Person of the Purchaser.<\/p>\n
(iv) After the Merger, the Company will hold at least ninety
\npercent (90%) of the fair market value of its net assets and at least seventy
\npercent (70%) of the fair market value of its gross assets held immediately
\nprior to the Merger. For purposes of this Section 10.7, amounts paid by the
\nCompany to dissenters, amounts paid by the Company to shareholders who
\nreceive cash or other property, amounts used by the Company to pay
\nreorganization expenses, and all redemptions and distributions (except for
\nregular, normal dividends) made by the Company will be included as assets of
\nthe Company immediately prior to the Merger.<\/p>\n
(v) The Liabilities of the Company, if any, and the
\nLiabilities to which the assets of the Company are subject, if any, were or
\nwill be incurred by the Company in the Ordinary Course of Business.<\/p>\n
(vi) Except as otherwise provided in Section 14.2, the
\nCompany and each of the Selling Shareholders will pay any of their own
\nexpenses incurred in connection with the Merger.<\/p>\n
(vii) The Company is not under the jurisdiction of a court in
\na “title 11 or similar case,” within the meaning of Section 368(a)(3)(A) of
\nthe Code.<\/p>\n
(viii) The Company is not an investment company for purposes of
\nSection 368(a)(2)(F) of the Code.<\/p>\n
(ix) None of the employee compensation received by any
\nSelling Shareholder who is or will be an employee of the Company or the
\nPurchaser is or will be separate consideration for, or allocable to, any of
\nhis or her shares of Company Stock to be surrendered in the Merger. None of
\nthe Purchaser Stock received by any Selling Shareholder in the Merger who is
\nor will be an employee of the Company or the Purchaser will be separate
\nconsideration for, or allocable to, any employment, consulting or similar
\narrangement. Any compensation paid or to be paid to any Selling Shareholder
\nwho is or will be an employee of or who will provide advisory services for
\nthe Company, Merger Sub, the Purchaser or any affiliate thereof after the
\nMerger will be determined by bargaining at arm’s length.<\/p>\n
(x) The Company’s business conducted immediately before the
\nEffective Time will be its “historic business” and its assets held
\nimmediately before the Effective Time will be its “historic business assets”
\nfor purposes of Section 368 of the Code.<\/p>\n
10.8 Preparation of Audited Financial Statements.<\/p>\n
As promptly as possible after the Closing, the parties will cooperate
\nwith each other and with Ernst & Young LLP (“ERNST & YOUNG”) to prepare
\naudited financial statements of the <\/p>\n
44<\/p>\n
Company for the year ended December 31, 1998 and the period ended May 31, 1999
\n(i) prepared in accordance with GAAP; and (ii) audited by Ernst & Young (the
\n“AUDITED FINANCIAL STATEMENTS”). The cost for preparation of such report shall
\nbe borne by the Purchaser and the Purchaser and the Selling Shareholders will
\nhave the right to review and comment on the Audited Financial Statements,
\nprovided, that Ernst & Young’s final report shall be final and binding upon the
\nparties. The Purchaser agrees that such report shall be available to the Company
\nat no charge and it shall remain the property of the Company for its use should
\nthe Merger terminate for any reason.<\/p>\n
11. Termination.<\/p>\n
11.1 Termination Events.<\/p>\n
This Agreement may be terminated prior to Closing:<\/p>\n
(a) by the Purchaser if there is a material breach of any covenant or
\nobligation of the Company or the Selling Shareholders and such breach has not
\nbeen cured within ten (10) business days after written notice of such breach is
\ngiven to the Company except if the Company or the Selling Shareholders, as
\napplicable, have initiated efforts to cure such breach and the Purchaser, in its
\nsole discretion, is satisfied that such breach can be cured within a reasonable
\nperiod of time;<\/p>\n
(b) by the Purchaser, pursuant to Section 8.5(c)(i) hereof;<\/p>\n
(c) by the Company if there is a material breach of any covenant or
\nobligation of the Purchaser and such breach has not been cured within ten (10)
\nbusiness days after written notice of such breach is given to the Purchaser,
\nexcept if the Purchaser has initiated efforts to cure such breach and the
\nCompany, in its sole discretion, is satisfied that such breach can be cured
\nwithin a reasonable period of time;<\/p>\n
(d) by either the Purchaser or the Company if the Closing has not
\ntaken place on or before July 1, 1999; provided, however, that the right to
\nterminate this Agreement under this Section 11.1(d) shall not be available to
\nany party whose intentional failure to fulfill any obligation under this
\nAgreement has been the cause of or has resulted in the failure of the Merger to
\noccur on or before such date; or<\/p>\n
(e) by the mutual consent of the Purchaser and the Company.<\/p>\n
11.2 Termination Procedures.<\/p>\n
If the Purchaser wishes to terminate this Agreement pursuant to Section
\n11.1(a), Section 11.1(b) or Section 11.1(d), the Purchaser shall deliver to the
\nCompany and the Selling Shareholders a written notice stating that the Purchaser
\nis terminating this Agreement and setting forth a brief description of the basis
\non which the Purchaser is terminating this Agreement. If the Company wishes to
\nterminate this Agreement pursuant to Section 11.1(c) or Section 11.1(d), the
\nCompany shall deliver to the Purchaser a written notice stating that the Company
\nis terminating <\/p>\n
45<\/p>\n
this Agreement and setting forth a brief description of the basis on which the
\nCompany is terminating this Agreement.<\/p>\n
11.3 Effect of Termination.<\/p>\n
If this Agreement is terminated pursuant to Section 11.1, all further
\nobligations of the parties under this Agreement shall terminate; provided, that
\neach party shall remain liable for any breaches of this Agreement prior to its
\ntermination and provided, further, that Sections 10.2, 10.3, 11, 14.2, 14.3 and
\n14.11 shall survive the termination of this Agreement.<\/p>\n
11.4 Exclusivity of Termination Rights.<\/p>\n
Except to the extent termination occurs due to the bad faith of another
\nparty, the termination rights and obligations provided in this Section 11 shall
\nbe deemed to be exclusive. Subject to the provisions of Section 11.3, the
\nparties shall not have any other or further Liabilities to or with respect to
\none another by reason of this Agreement or its termination.<\/p>\n
12. Indemnification, etc.<\/p>\n
12.1 Survival of Representations and Covenants.<\/p>\n
(a) The Purchaser agrees that all rights to indemnification or
\nexculpation now existing in favor of the employees, agents, directors or
\nofficers of the Company (the “Company Indemnified Parties”) as provided in its
\nArticles of Incorporation or Bylaws of the Company, except to the extent limited
\nby Section 12.3 hereof, shall continue in full force and effect for a period of
\nsix (6) years from the Closing Date; provided, however, that in the event any
\nclaim or claims are asserted or made within such six-year period, all rights to
\nindemnification in respect of any such claim or claims shall continue until
\ndisposition of any and all such claims. Any determination required to be made
\nwith respect to whether a Company Indemnified Party’s conduct complies with the
\nstandards set forth in the Articles of Incorporation or Bylaws of the Company or
\notherwise shall be made by independent counsel selected by the Company
\nIndemnified Party reasonably satisfactory to the Purchaser (whose fees and
\nexpenses shall be paid by the Purchaser).<\/p>\n
(b) The representations, warranties, covenants and obligations of each
\nparty set forth in this Agreement shall survive the Merger only to the extent
\nprovided in the sentence immediately following and shall remain operative and in
\nfull force and effect regardless of any investigation made by or information
\nfurnished to or on behalf of any other party hereto, any person controlling any
\nsuch party or any of their officers or directors, whether prior to or after the
\nexecution of this Agreement, and any subsequent Acquisition Transaction effected
\nby or otherwise involving the Purchaser. Except in the case of fraud, all
\nrepresentations, warranties and covenants of the parties in this Agreement or
\nany other Transactional Agreement shall terminate on the earlier of the first
\nanniversary of the Closing Date or ten days after the completion and delivery of
\nPurchaser’s audited financial statements for the year ending December 31, 1999
\n(the “INDEMNIFICATION TERMINATION DATE”). In the case of fraud, the<\/p>\n
46<\/p>\n
Indemnification Termination Date shall be upon the expiration of the applicable
\nstatute of limitations.<\/p>\n
(c) For purposes of this Agreement, although each statement or other
\nitem of information set forth in the Disclosure Schedule qualifies the
\nrepresentations and warranties, all such statements and other items of
\ninformation set forth in the Disclosure Schedule shall be deemed to qualify all
\napplicable representations and warranties and to be a representation and
\nwarranty made by the Company under this Agreement<\/p>\n
(d) The representations, warranties, covenants and obligations of the
\nCompany and the Selling Shareholders are made to the Purchaser and for the
\nbenefit of each Purchaser Indemnitee (as defined in Section 12.2 hereof.<\/p>\n
12.2 Indemnification by the Selling Shareholders.<\/p>\n
(a) Subject to this Section 12.2 and Section 12.6, the Selling
\nShareholders covenant and agree to defend, indemnify and hold harmless the
\nPurchaser and each of its officers, directors, employees, agents and
\nrepresentatives (collectively the “PURCHASER INDEMNITEES” and individually each,
\na “PURCHASER INDEMNITEE”) from and against, and shall compensate and reimburse
\neach of the Purchaser Indemnitees for, any Damages which are suffered or
\nincurred by any of the Purchaser Indemnitees (regardless of whether such Damages
\nrelate to any third-party claim) directly or indirectly arising or resulting
\nfrom or connected with any breach of any representation or warranty made by the
\nCompany or the Selling Shareholders in this Agreement. Notwithstanding the
\nforegoing, except for rights to equitable relief and Damages resulting from
\nfraud on the part of a Selling Shareholder, each Selling Shareholder’s Liability
\nunder this section and\/or for breaches of this Agreement or any claim or Damages
\narising out of or relating to this Agreement, whether in contract, tort or under
\nany other legal theory, shall be solely and exclusively limited to, and shall in
\nno event exceed, such Selling Shareholder’s pro rata share of the Holdback
\nAmount. In the case of Damages resulting from fraud, each Selling Shareholder’s
\nLiability shall be solely and exclusively limited to, and shall in no event
\nexceed, the pro rata share of the Merger Consideration paid to such Selling
\nShareholder, less any claims paid to Purchaser from the Escrow Account.<\/p>\n
(b) After the Closing, no Person shall be required to indemnify any
\nIndemnitee with respect to any claim for indemnification pursuant to Section
\n12.2(a) unless and until the aggregate amount of indemnifiable Damages suffered
\nby all Indemnitees subject to indemnification pursuant to this Agreement exceeds
\nFifty Thousand Dollars ($50,000) (the “THRESHOLD”), at which point the
\nindemnifying Person shall indemnify the full amount of such claims and all
\nclaims thereafter, subject to any other applicable limitations in this Section
\n12.2 on the indemnifying Person’s indemnification obligations. The aggregation
\nof claims must only reach the Threshold once, and after such point the
\nIndemnitees may seek indemnification for all claims which may arise under this
\nSection 12.2.<\/p>\n
(c) The number of shares of Purchaser Stock to be released to the
\nPurchaser pursuant to the terms of the Escrow Agreement shall be calculated by
\ndividing the dollar amount <\/p>\n
47<\/p>\n
of the Damages incurred by the Average Purchaser Stock Price prior to the date
\nwhen the Escrow Agent makes a payment to a Purchaser Indemnitee.<\/p>\n
(d) No party shall be required to make any indemnification payment
\nhereunder unless a claim is initiated prior to the Indemnification Termination
\nDate.<\/p>\n
12.3 No Contribution.<\/p>\n
With respect to the matters for which a Purchaser Indemnitee or any other
\nIndemnitee is entitled to indemnification pursuant to Section 12.2(a), each
\nSelling Shareholder hereby waives, and acknowledges and agrees that he or she
\nshall not have and shall not exercise or assert, against the Purchaser, the
\nCompany, or any Purchaser Indemnitee, or attempt to exercise or assert, any
\nright of contribution or right of indemnity or any other right or remedy in
\nconnection with any indemnification obligation to the Purchaser or any Purchaser
\nIndemnitee to which such Selling Shareholder may become subject under this
\nAgreement (whether as a Selling Shareholder or in a capacity as a former
\ndirector, officer, agent or employee of the Company). It is the intention of
\nthe parties that after the Closing the remedy for the Purchaser or any Purchaser
\nIndemnitee seeking indemnification from the Selling Shareholders hereunder shall
\nbe a remedy solely against the Selling Shareholders and not against the Company;
\naccordingly, the Selling Shareholders agree to the waivers contained in this
\nSection 12.3. Each Selling Shareholder further acknowledge that the waivers,
\nacknowledgments and agreements of such Selling Shareholder contained in this
\nsection are an essential inducement to the Purchaser in entering into this
\nAgreement and agreeing to consummate the Transactions.<\/p>\n
12.4 Setoff.<\/p>\n
In addition to any rights of setoff or other rights that any Person may
\nhave at common law or otherwise, each Person shall have the right to set off any
\namount that may be owed to it by another under this Section 12 against any
\namount otherwise payable by such Person hereunder.<\/p>\n
12.5 Defense of Third-Party Claims.<\/p>\n
In the event of the assertion or commencement by any Person of any claim or
\nProceeding (whether against the Purchaser, the Company, the Selling
\nShareholders, any other Indemnitee or any other Person) with respect to which a
\nparty hereto may become obligated hereunder to indemnify, hold harmless,
\ncompensate or reimburse any Indemnitee pursuant to this Section 12, the party to
\nbe indemnified (the “INDEMNIFIED PARTY”) shall reasonably promptly, but in any
\nevent within thirty (30) days following the Indemnified Party’s actual knowledge
\nthereof, notify the Person providing the indemnification hereunder (the
\n“INDEMNIFYING PARTY”) of such claim or Proceeding by providing notice to the
\nIndemnifying Party, and the Indemnifying Party may elect to assume control of
\nthe defense of such claim or Proceeding, provided, however, that if the
\nIndemnifying Party fails to promptly defend against such claim or Proceeding,
\nthe Indemnified Party may proceed with the defense of such claim or Proceeding,
\nand the Indemnifying Party shall bear and pay all costs and expenses (including
\nattorneys’ fees and costs) in connection with the Indemnified Party’s defense of
\nsuch claim or Proceeding (whether or not incurred by the Indemnified Party);
\nprovided further, that all such expenses paid by the Selling Shareholders, as<\/p>\n
48<\/p>\n
the Indemnifying Party, will in no event exceed the respective indemnification
\nlimitations set forth in Section 12.2(a).<\/p>\n
(a) If the Indemnified Party so proceeds with the defense of any such
\nclaim or Proceeding:<\/p>\n
(i) all expenses reasonably incurred and relating to the
\ndefense of such claim or Proceeding (whether or not incurred by the Indemnified
\nParty) shall be borne and paid exclusively by the Indemnifying Party;<\/p>\n
(ii) the Indemnifying Party shall make available to the
\nIndemnified Party any documents and materials in the possession or control of
\nthe Indemnifying Party that may be necessary to the defense of such claim or
\nProceeding;<\/p>\n
(iii) the Indemnified Party shall keep the Indemnifying Party
\ninformed of all material developments and events relating to such claim or
\nProceeding;<\/p>\n
(iv) the Indemnifying Party shall have the right to participate
\nin the defense of such claim or Proceeding at its own expense; and<\/p>\n
(v) the Indemnified Party shall not settle, adjust or
\ncompromise such claim or Proceeding without the prior written consent of the
\nIndemnifying Party, which consent shall not be unreasonably withheld.<\/p>\n
(b) If the Indemnifying Party so proceeds with the defense of any such
\nclaim or Proceeding:<\/p>\n
(i) all expenses reasonably incurred and relating to the
\ndefense of such claim or Proceeding (whether or not incurred by the Indemnified
\nParty) shall be borne and paid exclusively by the Indemnifying Party;<\/p>\n
(ii) the Indemnifying Party shall keep the Indemnified Party
\ninformed of all material developments and events relating to such claim or
\nProceeding;<\/p>\n
(iii) the Indemnifying Party shall not settle, adjust or
\ncompromise such claim or Proceeding without the prior written consent of the
\nIndemnified Party, which consent shall not be unreasonably withheld.<\/p>\n
12.6 Exercise of Remedies by Indemnitees Other than the Purchaser and by
\n the Selling Shareholders.<\/p>\n
No Person other than an Indemnitee (or any successor or assignee thereof)
\nshall be permitted to assert any indemnification claim or exercise any other
\nremedy under this Agreement unless the Purchaser, the Company and the Selling
\nShareholders (or any successor assignee thereof) shall have consented to the
\nassertion of such indemnification claim or the exercising of such other remedy.
\nThe sole remedy available to any Indemnitee or other Person for breaches of this
\nAgreement or the other Transactional Agreements shall be limited to the rights
\nset forth in <\/p>\n
49<\/p>\n
this Section 12. The maximum aggregate amounts payable by the Company or the
\nSelling Shareholders, as the case may be, to any and all Indemnitees for any and
\nall Damages arising out of, or in connection with, this Agreement, any
\nTransactional Agreement, any certificate hereunder, any other document delivered
\nhereunder, or any of the Transactions, are the amounts specified as limitations
\nin Section 12.2(a) hereof.<\/p>\n
13. Non-Solicitation.<\/p>\n
If the Merger is not consummated, for a period of one year after the
\ntermination of this Agreement, neither party will solicit or otherwise take any
\nactions to induce any of the employees or consultants of the other party to
\nleave their employment or consulting relationship with the other party so as to
\nbecome employed by or provide services to the first party.<\/p>\n
14. Purchaser’s Tax Indemnity.<\/p>\n
(a) Within 10 business days following a Final Determination that the
\nMerger does not qualify as a “reorganization,” within the meaning of Section
\n368(a) of the Code, Purchaser shall pay to each Selling Shareholder, in cash,
\nthe Additional Amount applicable to such Selling Shareholder, provided that this
\namount will be paid only if (i) the Merger does not so qualify solely by reason
\nof changes or modifications to the NBC Agreements after the date hereof (other
\nthan any changes or modifications to the NBC Transactions reflected in,
\notherwise taken account in, or contemplated by the Restated Documents); (ii) the
\nMerger would have qualified as a “reorganization” within the meaning of Section
\n368(a) if the NBC Transactions were consummated pursuant to the NBC Agreements
\nand would have so qualified if the NBC Transactions were consummated pursuant to
\nsuch agreements as changed or modified by changes or modifications to the NBC
\nTransactions reflected in, otherwise taken account in, or contemplated by the
\nRestated Documents; and (iii) such Selling Shareholder has not taken a position
\non any Tax Return that the Merger does not so qualify or otherwise breached a
\nrepresentation, covenant or warranty provided under Section 10.7 of this
\nAgreement.<\/p>\n
(b) Notwithstanding anything herein to the contrary, Purchaser shall
\nhave the right at its own expense, to control, defend, settle, compromise or
\nprosecute in any manner any audit, examination, investigation, hearing or other
\nproceeding involving a Selling Shareholder which could give rise to liability to
\nPurchaser pursuant to Section 14(a) of this Agreement. A Selling Shareholder
\nshall notify Purchaser in writing within ten days of the commencement of such an
\naudit, examination, investigation, hearing or other proceeding.<\/p>\n
(c) Notwithstanding the foregoing, the indemnity provided in this
\nSection 14 shall not exceed $7,000,000. If this limit shall apply, then the
\nindemnity paid to each Selling Shareholder shall be limited to such Selling
\nShareholder’s pro rata share of $7,000,000. Such pro rata share shall be
\ndetermined based on the amount of each Selling Shareholder’s Additional Amount.<\/p>\n
50<\/p>\n
15. Miscellaneous.<\/p>\n
15.1 Further Assurances.<\/p>\n
Each party hereto shall execute and\/or cause to be delivered to each other
\nparty hereto such instruments and other documents, and shall take such other
\nactions, as such other party may reasonably request (prior to, at or after the
\nClosing) for the purpose of carrying out or evidencing any of the Transactions.<\/p>\n
15.2 Fees and Expenses.<\/p>\n
Subject to the provisions of this Agreement (including the indemnification
\nand other obligations of the Selling Shareholders pursuant to Section 12), each
\nparty shall bear and pay all its own Transaction Expenses; provided, that, if
\nthe Company is unable to pay all fees, costs and expenses incurred on behalf of
\nit and the Key Employees prior to the Closing, then the unpaid amount shall be
\npaid from the Holdback Amount.<\/p>\n
15.3 Attorneys’ Fees.<\/p>\n
If any legal action or other legal Proceeding (including arbitration)
\nrelating to the Transactions or the enforcement of any provision of any of the
\nTransactional Agreements is brought against any party hereto, the prevailing
\nparty shall be entitled to recover reasonable attorneys’ fees, costs and
\ndisbursements (in addition to any other relief to which the prevailing party may
\nbe entitled).<\/p>\n
15.4 Transfer Taxes; Final Tax Return.<\/p>\n
(a) The Selling Shareholders shall be responsible for sales, use and
\ntransfer taxes, including but not limited to any value-added, stock transfer,
\ngross receipts, stamp duty and real, personal or intangible property transfer
\ntaxes, due by reason of the consummation of the Transactions, including but not
\nlimited to any interest or penalties in respect thereof.<\/p>\n
(b) In consultation with the Purchaser, the Selling Shareholders shall
\nactively assist the Company in filing any Company Returns for periods ending on
\nor before the Closing Date (the “FINAL RETURNS”). The Selling Shareholders
\nshall cooperate with the Purchaser and the Company’s accountants to prepare the
\nFinal Returns in a manner consistent with the Company’s previously filed
\nreturns; provided that in all events the Final Returns shall be prepared in a
\nmanner consistent with applicable law.<\/p>\n
15.5 Governing Law; Arbitration.<\/p>\n
(a) This Agreement is to be construed in accordance with and governed
\nby the laws of the State of California (as permitted by Section 1646.5 of the
\nCalifornia Civil Code or any similar successor provision), without giving effect
\nto any choice-of-law rule that would cause the application of the laws of any
\njurisdiction other than the State of California to the rights and duties of the
\nparties.<\/p>\n
51<\/p>\n
(b) Any controversy or claim arising out of or relating to this Agreement,
\nor breach hereof, shall be settled by arbitration administered by the American
\nArbitration Association in accordance with its then existing commercial
\narbitration rules, and judgment upon the award rendered by the arbitrator may be
\nentered in any court having jurisdiction thereof. The arbitrator shall be
\nappointed by mutual agreement of all of the parties, but, if the parties fail to
\nagree, the arbitrator shall be appointed by the American Arbitration Association
\nin accordance with its then existing rules. The place of the arbitration shall
\nbe San Francisco, California, and the governing law shall be the laws of the
\nState of California, in accordance with Section 15.5(a) of this Agreement.<\/p>\n
15.6 Successors and Assigns.<\/p>\n
Except as otherwise expressly provided herein, the provisions hereof shall
\ninure to the benefit of, and be binding upon, the successors, assigns, heirs,
\nexecutors and administrators of the parties hereto and the Indemnitees and shall
\ninure to the benefit of and be enforceable by each Person who shall be a holder
\nof Purchaser Stock issued in connection with the Transactions. None of the
\nparties hereto may assign any of their rights or obligations hereunder to any
\nother party (by contract, operation of law or otherwise) without the prior
\nwritten consent of the other, which consent shall not be unreasonably withheld,
\nand any attempted assignment in violation thereof shall be void and of no
\neffect.<\/p>\n
15.7 Entire Agreement.<\/p>\n
The Transactional Agreements, the schedules and the exhibits thereto and
\nthe other documents contemplated expressly thereby constitute the full and
\nentire understanding and agreement among the parties hereto and thereto with
\nregard to the subjects hereof and thereof and supersede all prior agreements and
\nunderstandings among or between any of the parties relating to the subject
\nmatter hereof and thereof.<\/p>\n
15.8 Separability.<\/p>\n
In case any provision of this Agreement shall be invalid, illegal or
\nunenforceable, the validity, legality and enforceability of the remaining
\nprovisions shall not in any way be affected or impaired thereby.<\/p>\n
15.9 Amendments.<\/p>\n
This Agreement may be amended or modified only upon the mutual written
\nconsent of the Selling Shareholders, the Company, the Purchaser and Merger Sub.
\nAny amendment or modification effected pursuant to this Section 15.9 shall be
\nbinding upon the Selling Shareholders, the Company, the Purchaser and Merger
\nSub.<\/p>\n
15.10 Notices.<\/p>\n
Any notice or other communication required or permitted to be delivered to
\nany party under this Agreement shall be in writing and shall be deemed properly
\ndelivered, given and <\/p>\n
52<\/p>\n
received when delivered (by hand, by registered mail, by courier or express
\ndelivery service or by telecopier during business hours) to the address or
\ntelecopier number set forth beneath the name of such party below (or to such
\nother address or telecopier number as such party shall have specified in a
\nwritten notice given to the other parties hereto):<\/p>\n
if to the Company:<\/p>\n
Paralogic Software Corporation
\n 257 Castro Street, Suite 200
\n Mountain View, CA 94041
\n Attention: Sunil Sanghavi
\n Telecopier: (650) 934-6919<\/p>\n
with a copy to:<\/p>\n
Pillsbury Madison & Sutro LLP
\n 2550 Hanover Street
\n Palo Alto, CA 94304
\n Attention: Jorge A. del Calvo, Esq.
\n Telecopier: (650) 233-4545<\/p>\n
if to the Selling Shareholders, to their addresses set forth on the signature
\npage hereof;<\/p>\n
with a copy to:<\/p>\n
Pillsbury Madison & Sutro LLP
\n 2550 Hanover Street
\n Palo Alto, CA 94304
\n Attention: Jorge A. del Calvo, Esq.
\n Telecopier: (650) 233-4545<\/p>\n
if to the Purchaser:<\/p>\n
XOOM.com, Inc.
\n 300 Montgomery Street
\n Third Floor
\n San Francisco, California 94104
\n Attention: Rajesh A. Aji, Esq.
\n Telecopier: (415) 445-2526<\/p>\n
53<\/p>\n
with a copy to:<\/p>\n
Morrison & Foerster LLP
\n 425 Market Street
\n San Francisco, California 94105
\n Attention: Bruce Alan Mann, Esq.
\n Telecopier: (415) 268-7522<\/p>\n
15.11 Publicity and Use of Confidential Information.<\/p>\n
(a) The Selling Shareholders shall keep strictly confidential, and
\nshall not use, or disclose to any other Person, any non-public document or other
\ninformation in the Selling Shareholders’ possession that relates directly or
\nindirectly to the business of the Company, the Purchaser or any affiliate of the
\nPurchaser.<\/p>\n
(b) The Company and Selling Shareholders shall not issue or
\ndisseminate any press release or other publicity concerning any of the
\nTransactions, or permit any press release or other publicity concerning any of
\nthe Transactions to be issued or otherwise disseminated by or on behalf of the
\nCompany or Selling Shareholders, without the Purchaser’s prior written consent,
\nand the Company and the Selling Shareholders shall continue to keep the terms of
\nthis Agreement and the other Transactional Agreements strictly confidential,
\nexcept any disclosure required by law.<\/p>\n
(c) The Purchaser shall not issue or disseminate any press release or
\nother publicity concerning any of the Transactions, or permit any press release
\nor other publicity concerning any of the Transactions to be issued or otherwise
\ndisseminated by or on behalf of the Purchaser, without the Company’s prior
\nwritten consent, and the Purchaser shall continue to keep the terms of this
\nAgreement and the other Transactional Agreements strictly confidential, except
\nany disclosure required by law.<\/p>\n
15.12 Counterparts.<\/p>\n
This Agreement may be executed in any number of counterparts, each of which
\nshall be an original, but all of which together shall constitute one instrument.<\/p>\n
15.13 Delays or Omissions; Waivers.<\/p>\n
(a) No failure on the part of any Person to exercise any power, right,
\nprivilege or remedy under this Agreement, and no delay on the part of any Person
\nin exercising any power, right, privilege or remedy under this Agreement, shall
\noperate as a waiver of such power, right, privilege or remedy; and no single or
\npartial exercise or waiver of any such power, right, privilege or remedy shall
\npreclude any other or further exercise thereof or of any other power, right,
\nprivilege or remedy.<\/p>\n
(b) No Person shall be deemed to have waived any claim arising out of
\nthis Agreement, or any power, right, privilege or remedy under this Agreement,
\nunless the waiver of <\/p>\n
54<\/p>\n
such claim, power, right, privilege or remedy is expressly set forth in a
\nwritten instrument duly executed and delivered on behalf of such Person; and any
\nsuch waiver shall not be applicable or have any effect except in the specific
\ninstance in which it is given.<\/p>\n
15.14 Remedies Cumulative; Specific Performance.<\/p>\n
All remedies, either under this Agreement or by law or otherwise afforded
\nto the parties hereto, shall be cumulative and not alternative. Each of the
\nparties agrees that:<\/p>\n
(a) in the event of any breach or threatened breach by a party of any
\ncovenant, obligation or other provision set forth in this Agreement, the other
\nparties shall be entitled (in addition to any other remedy that may be available
\nto them) to (i) a decree or order of specific performance or mandamus to enforce
\nthe observance and performance of such covenant, obligation or other provision,
\nand (ii) an injunction restraining such breach or threatened breach; and<\/p>\n
(b) neither the Purchaser nor any other Indemnitee, on the one hand,
\nnor the Selling Shareholders, on the other, shall be required to provide any
\nbond or other security in connection with any such decree, order or injunction
\nor in connection with any related action or Proceeding.<\/p>\n
15.15 Headings.<\/p>\n
The boldface headings contained in this Agreement are for convenience of
\nreference only, shall not be deemed to be a part of this Agreement and shall not
\nbe referred to in connection with the construction or interpretation of this
\nAgreement.<\/p>\n
15.16 Construction.<\/p>\n
(a) For purposes of this Agreement, whenever the context requires: the
\nsingular number shall include the plural, and vice versa; the masculine gender
\nshall include the feminine and neuter genders; the feminine gender shall include
\nthe masculine and neuter genders; and the neuter gender shall include the
\nmasculine and feminine genders.<\/p>\n
(b) The parties hereto agree that any rule of construction to the
\neffect that ambiguities are to be resolved against the drafting party shall not
\nbe applied in the construction or interpretation of this Agreement.<\/p>\n
(c) As used in this Agreement, the words “include” and “including,”
\nand variations thereof, shall not be deemed to be terms of limitation, but
\nrather shall be deemed to be followed by the words “without limitation.”<\/p>\n
(d) Except as otherwise specified, all references in this Agreement to
\n“Sections,” “Exhibits” and “Schedules” are intended to refer to Sections of this
\nAgreement and Exhibits and Schedules to this Agreement.<\/p>\n
55<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT AND
\nPLAN OF MERGER as of the date set forth in the first paragraph hereof.<\/p>\n
THE PURCHASER: XOOM.COM, INC.
\n a Delaware corporation<\/p>\n
By: \/s\/ CHRISTOPHER KITZE
\n ——————————–
\n Name: Christopher Kitze
\n Title: Chairman<\/p>\n
THE COMPANY: Paralogic Software Corporation
\n a California corporation<\/p>\n
By: \/s\/ VIJAY VAIDYANATHAN
\n ——————————–
\n Name: Vijay Vaidyanathan
\n Title: President and Chairman<\/p>\n
MERGER SUB: XMCM SUB, INC.
\n a California corporation<\/p>\n
By: \/s\/ CHRISTOPHER KITZE
\n ——————————–
\n Name: Christopher Kitze
\n Title: Vice President<\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ RAJESH AJI
\n ——————————–
\n Name:
\n Title:<\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ ROBERT A. ELLIS, TRUSTEE
\n ——————————–
\n Name: Robert A. Ellis Revocable
\n Trust
\n Title: Robert A. Ellis, Trustee<\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ HELMUT HISSEN
\n Name:
\n Title:<\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ RUSSELL SCOTT HYZEN
\n ——————————–
\n Name:
\n Title: <\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ SHANTI NARAYANAN
\n ——————————–
\n Name:
\n Title: <\/p>\n
SELLING SHAREHOLDER:
\n By: \/s\/ ERNEST PRIESTLY
\n ——————————–
\n Name:
\nSELLING SHAREHOLDER: Title: <\/p>\n
By: \/s\/ RAJIV VAIDYANATHAN
\n ——————————–
\n Name:
\nSELLING SHAREHOLDER: Title: <\/p>\n
By: \/s\/ SHEENA VAIDYANATHAN
\n ——————————–
\n Name:
\nSELLING SHAREHOLDER: Title: <\/p>\n
By: \/s\/ VIJAY VAIDYANATHAN
\n ——————————–
\n Name:
\n Title: <\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
EXHIBIT A<\/p>\n
CERTAIN DEFINITIONS<\/p>\n
For purposes of this Agreement:<\/p>\n
ACQUISITION TRANSACTION. “Acquisition Transaction” shall mean any
\ntransaction involving:<\/p>\n
(a) the sale or other disposition of all or any portion of the Company’s
\n business or assets (other than in the Ordinary Course of Business);<\/p>\n
(b) the issuance, sale or other disposition of (i) any capital stock of
\n the Company, (ii) any option, call, warrant or right (whether or not
\n immediately exercisable) to acquire any capital stock of the Company,
\n or (iii) any security, instrument or obligation that is or may become
\n convertible into or exchangeable for any capital stock of the Company;
\n or<\/p>\n
(c) any merger, consolidation, business combination, share exchange,
\n reorganization or similar transaction involving the Company.<\/p>\n
ADDITIONAL AMOUNT. “Additional Amount” for any Selling Shareholder shall be
\nthe excess, if any, of (a) the product of (i) the “Gain Amount” and (ii) seventy
\npercent (70%) of the tax rate applicable to the Selling Shareholder with respect
\nto the Purchaser Stock acquired in the Merger, over (b) the product of (i) any
\ncash received (or other proceeds from disposition) and any taxable loss
\nrecognized by a Selling Shareholder, in respect of its Purchaser Stock acquired
\nin the Merger, on or before a Final Determination that the Merger does not
\nqualify as a “reorganization,” within the meaning of Section 368(a) of the Code,
\nand (ii) twenty-nine and three tenths percent (29.3%). For purposes of the
\npreceding sentence, the “Gain Amount” for any Selling Shareholder shall be the
\nexcess of (a) the product of the (i) Merger Consideration received by such
\nSelling Shareholder and (ii) the price of Purchaser Stock as shown in the Wall
\nStreet Journal for the day in which the Effective Time falls, over (b) the tax
\nbasis of the Selling Shareholder in the stock of the Seller immediately prior to
\nthe Merger. The Additional Amount shall include any penalty imposed on a Selling
\nShareholder by a taxing authority which is imposed ONLY because the Merger does
\nnot qualify as a “reorganization,” within the meaning of Section 368(a) of the
\nCode by reason of material changes or modifications to the NBC Agreements (other
\nthan any changes or modifications to the NBC Transactions reflected in,
\notherwise taken account in, or contemplated by the Restated Documents).<\/p>\n
AGREEMENT. “Agreement” shall mean the Agreement and Plan of Merger to which
\nthis EXHIBIT A is attached (including the disclosure schedules and all other
\nschedules and exhibits attached thereto), as it may be amended from time to
\ntime.<\/p>\n
ASSET BALANCE. “Asset Balance” shall mean $210,000.<\/p>\n
A-1<\/p>\n
AUDITED FINANCIAL STATEMENTS. “Audited Financial Statements” shall have the
\nmeaning specified in Section 10.8.<\/p>\n
AVERAGE PURCHASER STOCK PRICE. “Average Purchaser Stock Price” shall mean
\nthe average of the closing sale price of Purchaser Stock on the Nasdaq Stock
\nMarket for the twenty-five (25) trading days ending on the last trading day
\nprior to a given date.<\/p>\n
BEST EFFORTS. “Best Efforts” shall mean the efforts that a prudent Person
\ndesiring to achieve a particular result would use in order to ensure that such
\nresult is achieved as expeditiously as possible.<\/p>\n
CERTIFICATES. “Certificates” shall have the meaning specified in Section
\n3.3(a).<\/p>\n
CLOSING. “Closing” shall have the meaning specified in Section 3.5.<\/p>\n
CLOSING DATE. “Closing Date” shall have the meaning specified in Section
\n3.5.<\/p>\n
CODE. “Code” shall mean the Internal Revenue Code of 1986, as amended.<\/p>\n
COMPANY. “Company” shall mean Paralogic Software Corporation, a California
\ncorporation.<\/p>\n
COMPANY BOARD. “Company Board” shall mean the members of the board of
\ndirectors of the Company.<\/p>\n
COMPANY CLOSING CERTIFICATE. “Company Closing Certificate” shall have the
\nmeaning specified in Section 4.1(c)(vi).<\/p>\n
COMPANY COMMON STOCK. “Common Stock” shall mean the common stock, no par
\nvalue per share, of the Company.<\/p>\n
COMPANY CONFIDENTIAL INFORMATION. “Company Confidential Information” shall
\nhave the meaning specified in Section 10.2.<\/p>\n
COMPANY CONTRACT. “Company Contract” shall mean any contract listed on the
\nCompany Disclosure Schedule.<\/p>\n
COMPANY DISCLOSURE SCHEDULE. “Company Disclosure Schedule” shall have the
\nmeaning specified in the introductory paragraph to Section 5.<\/p>\n
COMPANY OPTIONS. “Company Options” shall mean those options granted by the
\nCompany, or proposed to be granted prior to the Closing Date, to purchase shares
\nof the Company Common Stock as set forth on SCHEDULE II attached hereto.<\/p>\n
COMPANY PREFERRED STOCK. “Company Preferred Stock” shall have the meaning
\nspecified in Section 5.3(a).<\/p>\n
COMPANY RETURNS. “Company Returns” shall have the meaning specified in
\nSection 5.14(b).<\/p>\n
A-2<\/p>\n
CONSENT. “Consent” shall mean any approval, consent, ratification,
\npermission, waiver or authorization (including any Governmental Authorization).<\/p>\n
CONSTITUENT CORPORATIONS. “Constituent Corporations” shall mean the Company
\nand Merger Sub.<\/p>\n
CONTRACT. “Contract” shall mean, with respect to any Person, any written or
\noral or other contract, arrangement or other agreement to which such Person is a
\nparty or by which its properties or assets may be bound or affected or under
\nwhich it or its respective business, properties or assets receive benefits.<\/p>\n
DAMAGES. “Damages” shall include any loss, damage, injury, decline in
\nvalue, lost opportunity, Liability, settlement, judgment, award, fine, penalty,
\nTax, fee (including any legal fee, expert fee, accounting fee or advisory fee),
\ncharge, cost (including any cost of investigation) or expense of any nature.<\/p>\n
DEFINED BENEFIT PLAN. “Defined Benefit Plan” shall mean either a plan
\ndescribed in Section 3(35) of ERISA or a plan subject to the minimum funding
\nstandards set forth in Section 302 of ERISA and Section 412 of the Code.<\/p>\n
DISCLOSURE SCHEDULE UPDATE. “Disclosure Schedule Update” shall have the
\nmeaning specified in Section 8.5(b).<\/p>\n
DISSENTING HOLDER. “Dissenting Holder” shall have the meaning specified in
\nSection 3.7(a).<\/p>\n
DISSENTING SHARES. “Dissenting Shares” shall have the meaning specified in
\nSection 3.7(a).<\/p>\n
EFFECTIVE TIME. “Effective Time” shall have the meaning specified in
\nSection 1.2.<\/p>\n
EMPLOYMENT OFFER LETTER. “Employment Offer Letter” shall mean the
\nemployment offer letter from Purchaser to each of the Key Employees
\nsubstantially in the form of EXHIBIT D-1.<\/p>\n
END-USER LICENSES. “End-User Licenses” shall have the meaning specified in
\nSection 5.6.<\/p>\n
ENTITY. “Entity” shall mean any corporation (including any non profit
\ncorporation), general partnership, limited partnership, limited Liability
\npartnership, joint venture, estate, trust or company (including any limited
\nLiability company or joint stock company).<\/p>\n
ENVIRONMENTAL LAW. “Environmental Law” shall mean any federal, state, local
\nor foreign legal requirement relating to pollution or protection of human health
\nor the environment.<\/p>\n
A-3<\/p>\n
ERISA. “ERISA” shall mean the Employee Retirement Income Security Act of
\n1974, as amended.<\/p>\n
ERNST & YOUNG. “Ernst & Young” shall have the meaning specified in Section
\n10.8.<\/p>\n
ESCROW ACCOUNT. “Escrow Account” shall have the mean the account into which
\nthe Holdback Amount is deposited.<\/p>\n
ESCROW AGENT. “Escrow Agent” shall mean Union Bank of California, N.A.<\/p>\n
ESCROW AGREEMENT. “Escrow Agreement” shall have the meaning specified in
\nSection 1.4.<\/p>\n
EXCHANGE ACT. “Exchange Act” shall mean the Securities Exchange Act of
\n1934, as amended.<\/p>\n
EXCHANGE RATIO. “Exchange Ratio” shall have the meaning specified in
\nSection 3.1(b).<\/p>\n
FINAL DETERMINATION. “Final Determination” shall mean an unappealable
\njudgment of a competent federal judicial authority, a final settlement which has
\nbeen agreed to by Purchaser, or a determination by Purchaser that the Purchaser
\ndoes not wish to contest the imposition of the tax, provided that Selling
\nShareholder does not contest the tax. In the event a Selling Shareholder tenders
\nwritten notice to Purchaser that there is an audit, examination, investigation,
\nhearing or other proceeding involving a Selling Shareholder which could give
\nrise to liability to Purchaser pursuant to Section 14 of this Agreement and
\nPurchaser does not respond within sixty days of receipt by Purchaser of such
\nwritten notice that Purchaser elects to assume the defense of such action under
\nSection 14(b), then Purchaser shall be deemed to have elected not to contest the
\nimposition of the tax, provided that the Selling Shareholder does not contest
\nthe tax.<\/p>\n
FINAL RETURNS. “Final Returns” shall have the meaning specified in Section
\n15.4.<\/p>\n
FINANCIAL STATEMENTS. “Financial Statements” shall have the meaning
\nspecified in Section 5.8(a).<\/p>\n
FOLLOW-ON OFFERING. “Follow-On Offering” shall have the meaning specified
\nin Section 10.6.<\/p>\n
GAAP. “GAAP” shall mean generally accepted accounting principles.<\/p>\n
GOVERNMENTAL AUTHORIZATION. “Governmental Authorization” shall mean any:<\/p>\n
(a) permit, license, certificate, franchise, approval, consent,
\n permission, clearance, waiver, certification, designation,
\n registration, qualification or authorization issued, granted or given
\n by or under the authority of any Governmental Body or pursuant to any
\n legal requirement; or<\/p>\n
A-4<\/p>\n
(b) right under any Contract with any Governmental Body.<\/p>\n
GOVERNMENTAL BODY. “Governmental Body” shall mean any:<\/p>\n
(a) nation, principality, state, province, territory, county,
\n municipality, district or other jurisdiction of any nature;<\/p>\n
(b) federal, state, local, municipal, foreign or other government; or<\/p>\n
(c) individual, Entity or body exercising, or entitled to exercise, any
\n executive, legislative, judicial, administrative, regulatory, police,
\n military or taxing authority or power of any nature.<\/p>\n
HAZARDOUS MATERIALS. “Hazardous Material” shall mean any substance,
\nchemical, waste or other material which is or may be listed, defined or
\notherwise identified as hazardous, toxic or dangerous under any legal
\nrequirement, as well as any asbestos, polychlorinated biphenyls (“PCBs”),
\npetroleum, petroleum product or by-product, crude oil, natural gas, natural gas
\nliquids, liquefied natural gas, or synthetic gas useable for fuel, and “source,”
\n“special nuclear,” and “by-product” material as defined in the Atomic Energy Act
\nof 1954, 42 U.S.C. Sections 2011 ET seq.<\/p>\n
HOLDBACK AMOUNT. “Holdback Amount” shall have the meaning specified in
\nSection 1.4.<\/p>\n
INDEMNIFICATION TERMINATION DATE. “Indemnification Termination Date” shall
\nhave the meaning specified in Section 12.1(a).<\/p>\n
INDEMNIFIED PARTY. “Indemnified Party” shall have the meaning specified in
\nSection 12.5.<\/p>\n
INDEMNIFYING PARTY. “Indemnifying Party” shall have the meaning specified
\nin Section 12.5.<\/p>\n
INDEMNITEE. “Indemnitee” shall have the meaning specified in Section
\n12.2(a).<\/p>\n
KEY EMPLOYEES. “Key Employees” shall mean each of Sunil Sanghavi, Helmut
\nHissen.<\/p>\n
LEASED PREMISES. “Leased Premises” shall mean the premises and facilities
\nidentified in Part 5.9(d) of the Company Disclosure Schedule.<\/p>\n
LIABILITY. “Liability” shall mean any debt, obligation, duty or Liability
\nof any nature (including any unknown, undisclosed, unmatured, unaccrued,
\nunasserted, contingent, indirect, conditional, implied, vicarious, derivative,
\njoint, several or secondary Liability), regardless of whether such debt,
\nobligation, duty or Liability would be required to be disclosed on a balance
\nsheet prepared in accordance with generally accepted accounting principles and
\nregardless of whether such debt, obligation, duty or Liability is immediately
\ndue and payable.<\/p>\n
A-5<\/p>\n
MEMBER OF THE CONTROLLED GROUP. “Member of the Controlled Group” shall mean
\neach trade or business, whether or not incorporated, which would be treated as a
\nsingle employer with the Company under Section 4001 of ERISA or Section 414(b),
\n(c), (m) or (o) of the Code.<\/p>\n
MERGER. “Merger” shall have the meaning specified in Recital A.<\/p>\n
MERGER CONSIDERATION. “Merger Consideration” shall have the meaning
\nspecified in Section 1.3.<\/p>\n
MERGER SUB. “Merger Sub” shall mean XMCM Sub, Inc., a California
\ncorporation.<\/p>\n
MERGER SUB BOARD. “Merger Sub Board” shall mean the Board of Directors of
\nMerger Sub.<\/p>\n
MULTIEMPLOYER PLAN. “Multiemployer Plan” shall mean a plan described in
\nSection 3(37) of ERISA.<\/p>\n
NBC AGREEMENTS. “NBC Agreements” shall mean the Agreement and Plan of
\nContribution and Merger, dated as of May 9, 1999, with Purchaser and others and
\nan Agreement and Plan of Contribution, Investment and Merger dated as of May 9,
\n1999, with National Broadcasting Corporation (“NBC”) and others pursuant to
\nwhich the existing businesses of Purchaser and certain assets of NBC and others
\nwill be combined.<\/p>\n
NBC TRANSACTIONS. “NBC TRANSACTIONS” shall mean those transactions
\ncontemplated by the NBC Agreements.<\/p>\n
OPTION PLAN. “Option Plan” shall have the meaning specified in Section
\n3.1(c)(i).<\/p>\n
OPTION POOL. “Option Pool” shall mean the number of shares of Company
\nCommon Stock reserved for the grant of options under the Option Plan.<\/p>\n
ORDER. “Order” shall mean any:<\/p>\n
(a) order, judgment, injunction, edict, decree, ruling, subpoena, writ or
\n award that is or has been issued, made, entered, rendered or otherwise
\n put into effect by or under the authority of any court, administrative
\n agency or other Governmental Body or any arbitrator or arbitration
\n panel; or<\/p>\n
(b) Contract with any Governmental Body that is or has been entered into
\n in connection with any Proceeding.<\/p>\n
A-6<\/p>\n
ORDINARY COURSE OF BUSINESS. An action taken by or on behalf of the Company
\nshall not be deemed to have been taken in the “Ordinary Course of Business”
\nunless:<\/p>\n
(a) such action is recurring in nature, is consistent with the Company’s
\n past practices and is taken in the Ordinary Course of the Company’s
\n normal day to day operations;<\/p>\n
(b) such action is taken in accordance with sound and prudent business
\n practices;<\/p>\n
(c) such action is not required to be authorized by the Company’s
\n shareholders, the Company Board or any committee of the Company Board
\n and does not require any other separate or special authorization of
\n any nature; and<\/p>\n
(d) such action is similar in nature and magnitude to actions customarily
\n taken, without any separate or special authorization, in the Ordinary
\n Course of the normal day to day operations of other Entities that are
\n engaged in businesses similar to the Company’s business.<\/p>\n
PERSON. “Person” shall mean any individual, Entity or Governmental Body.<\/p>\n
PLANS. “Plans” shall have the meaning specified in Section 5.22(a).<\/p>\n
PRE-CLOSING PERIOD. “Pre-Closing Period” shall mean the period from the
\ndate of this Agreement until the Closing Date.<\/p>\n
PREFERRED STOCK. “Preferred Stock” shall mean the Company’s Series A
\nPreferred Stock, no par value per share.<\/p>\n
PROCEEDING. “Proceeding” shall mean any action, suit, litigation,
\narbitration, Proceeding (including any civil, criminal, administrative,
\ninvestigative or appellate Proceeding and any informal Proceeding), hearing,
\ninquiry, audit or investigation that is or has been commenced, brought,
\nconducted or heard by or before, or that otherwise has involved or may involve,
\nany Governmental Body or any arbitrator or arbitration panel.<\/p>\n
PROPRIETARY ASSET. “Proprietary Asset” shall mean any patent, patent
\napplication, trademark (whether registered or unregistered and whether or not
\nrelating to a published work), trademark application, trade name, fictitious
\nbusiness name, service mark (whether registered or unregistered), service mark
\napplication, copyright (whether registered or unregistered), copyright
\napplication, maskwork, maskwork application, trade secret, know how, franchise,
\nsystem, computer software, invention, design, blueprint, proprietary product,
\nproprietary right or other technology, intellectual property right or intangible
\nasset.<\/p>\n
PROPRIETARY INFORMATION, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT.
\n“Proprietary Information, Non-Disclosure and Non-Solicitation Agreement” shall
\nmean the agreement in the form of EXHIBIT D-2.<\/p>\n
A-7<\/p>\n
PURCHASER. “Purchaser” shall mean XOOM.com, Inc., a Delaware corporation.<\/p>\n
PURCHASER BOARD. “Purchaser Board” shall mean the Board of Directors of the
\nPurchaser.<\/p>\n
PURCHASER CLOSING CERTIFICATE. “Purchaser Closing Certificate” have the
\nmeaning specified in Section 4.2(c)(v).<\/p>\n
PURCHASER CONTRACT. “Purchaser Contract” shall mean those contracts
\nrequired by Regulation S-K to be filed in connection with the Purchaser SEC
\nReports.<\/p>\n
PURCHASER DISCLOSURE SCHEDULE. “Purchaser Disclosure Schedule” shall have
\nthe meaning specified in the introductory paragraph to Section 7.<\/p>\n
PURCHASER OPTION PLAN. “Purchaser Option Plan” shall mean the 1998 Stock
\nIncentive Plan of the Purchaser.<\/p>\n
PURCHASER SEC REPORTS. “Purchaser SEC Reports” shall have the meaning
\nspecified in Section 7.8(a).<\/p>\n
PURCHASER STOCK. “Purchaser Stock” shall mean the Common Stock of the
\nPurchaser, par value $.0001 per share, to be issued in connection with the
\nTransactions.<\/p>\n
REGISTRATION STATEMENT. “Registration Statement” shall have the meaning
\nspecified in Section 6(m).<\/p>\n
RELATED PARTY. Each of the following shall be deemed to be a “Related
\nParty”:<\/p>\n
(a) the Selling Shareholders;<\/p>\n
(b) each individual who is, or who has at any time, been an officer of the
\n Company;<\/p>\n
(c) each member of the family of each of the individuals referred to in
\n clause (b) above; and<\/p>\n
(d) any Entity (other than the Selling Shareholders or the Company) in
\n which any one of the Persons referred to in clause (a), (b) or (c)
\n above holds (or in which more than one of such individuals
\n collectively hold), beneficially or otherwise, a material voting,
\n proprietary or equity interest.<\/p>\n
RESTATED DOCUMENTS. “Restated Documents” shall mean those drafts to
\ndocuments related to the NBC Transactions attached hereto as EXHIBIT J .<\/p>\n
RIGHTS AGREEMENT. “Rights Agreement” shall mean that certain Registration
\nRights Agreement by and among the Purchaser and the Selling Shareholders
\nsubstantially in the form of EXHIBIT C attached hereto.<\/p>\n
SEC. “SEC” shall mean the Securities and Exchange Commission.<\/p>\n
A-8<\/p>\n
SECURITIES ACT. “Securities Act” shall mean the Securities Act of 1933, as
\namended.<\/p>\n
SELLING SHAREHOLDERS. “Selling Shareholders” shall mean those individuals
\nand Entities listed on SCHEDULE I hereto.<\/p>\n
SELLING SHAREHOLDERS CLOSING CERTIFICATE. “Selling Shareholders Closing
\nCertificate” shall have the meaning specified in Section 4.1(c)(vii).<\/p>\n
SURVIVING CORPORATION. “Surviving Corporation” shall have the meaning
\nspecified in Section 1.1.<\/p>\n
TAX. “Tax” shall mean any tax (including any income tax, franchise tax,
\ncapital gains tax, estimated tax, gross receipts tax, value added tax, surtax,
\nexcise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
\nproperty tax, business tax, occupation tax, inventory tax, occupancy tax,
\nwithholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
\ntoll, duty (including any customs duty), deficiency or fee, and any related
\ncharge or amount (including any fine, penalty or interest), that is, has been or
\nin the future may be (a) imposed, assessed or collected by or under the
\nauthority of any Governmental Body, or (b) payable pursuant to any tax sharing
\nagreement or similar Contract.<\/p>\n
TAX RETURN. “Tax Return” shall mean any return (including any information
\nreturn), report, statement, declaration, estimate, schedule, notice,
\nnotification, form, election, certificate or other document or information that
\nis, has been or in the future may be filed with or submitted to, or required to
\nbe filed with or submitted to, any Governmental Body in connection with the
\ndetermination, assessment, collection or payment of any Tax or in connection
\nwith the administration, implementation or enforcement of or compliance with any
\nlegal requirement relating to any Tax.<\/p>\n
THRESHOLD. “Threshold” shall have the meaning specified in Section 12.2(b).<\/p>\n
TRANSACTION EXPENSES. “Transaction Expenses” shall mean all fees, costs and
\nexpenses, including without limitation all attorneys’ fees, that have been
\nincurred or that are in the future incurred by or on behalf of a party in
\nconnection with the sale of the Company Common Stock and the preparation,
\nexecution and delivery of the Transactional Agreements.<\/p>\n
TRANSACTIONAL AGREEMENTS. “Transactional Agreements” shall mean the
\nAgreement, the Rights Agreement, the Employment and Non-Competition Agreement,
\nthe Escrow Agreement, the Selling Shareholders and Company Closing Certificates,
\nthe Purchaser Closing Certificate, and all other agreements, certificates and
\ninstruments executed or contemplated to be executed by any of the parties hereto
\nin connection with the Transactions.<\/p>\n
TRANSACTIONS. “Transactions” shall mean (a) the execution and delivery of
\nthis Agreement and the other Transactional Agreements and (b) all the
\ntransactions contemplated by this Agreement and the other Transactional
\nAgreements.<\/p>\n
A-9<\/p>\n
UNAUDITED INTERIM BALANCE SHEET. “Unaudited Interim Balance Sheet” shall
\nhave the meaning specified in Section 5.8(a)(ii).<\/p>\n
A-10<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9374],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43156","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-xoom-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43156"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43156"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43156"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}