\nARTICLE 8. Termination, Amendment and Waiver………………………………………………………………. 58 <\/p>\n 8.1 Termination……………………………………………………………………………. 58
\n 8.2 Effect of Termination…………………………………………………………………… 60
\n 8.3 Amendment……………………………………………………………………………… 60
\n 8.4 Extension; Waiver………………………………………………………………………. 60<\/p>\n
ARTICLE 9. General Provisions……………………………………………………………………………. 60<\/p>\n
9.1 Notices……………………………………………………………………………….. 60
\n 9.2 Interpretation…………………………………………………………………………. 62
\n 9.3 Counterparts…………………………………………………………………………… 62
\n 9.4 Entire Agreement; Assignment…………………………………………………………….. 62
\n 9.5 Severability…………………………………………………………………………… 62
\n 9.6 Other Remedies…………………………………………………………………………. 62
\n 9.7 Governing Law………………………………………………………………………….. 62
\n 9.8 Rules of Construction…………………………………………………………………… 63
\n 9.9 Attorneys’Fees…………………………………………………………………………. 63
\n<\/c><\/s><\/caption>\n<\/table>\n
Exhibit A Form of Non-Competition and Employment Agreement<\/p>\n
Exhibit B Form of Restated Certificate of Incorporation<\/p>\n
Exhibit C Form of Marcus & Millichap Letter Agreement Amendment<\/p>\n
Exhibit D Street Schedules<\/p>\n
Exhibit E Select Schedules<\/p>\n
Exhibit F Schedules to Merger Agreement<\/p>\n
-iii-<\/p>\n
AGREEMENT AND PLAN OF REORGANIZATION<\/p>\n
This AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made and
\nentered into as of May 19, 1999 by and among NetSelect, Inc., a Delaware
\ncorporation (“Select”), Avenue Acquisition Corporation, a Delaware corporation
\nand a wholly-owned subsidiary of Select (“Sub”), SpringStreet, Inc., a
\nCalifornia corporation (“Street”) and, with respect to Article 7 only, Jay Hoag,
\nas Securityholder Agent, and U.S. Bank Trust, N.A. as Escrow Agent.<\/p>\n
RECITALS<\/p>\n
A. The Boards of Directors of each of Select, Sub and Street believe it is
\nin the best interests of each company and the shareholders of each company that
\nSelect acquire Street through the statutory merger of Sub with and into Street
\n(the “Merger”) with Street being the surviving corporation in the Merger and, in
\nfurtherance thereof, have approved the Merger.<\/p>\n
B. Pursuant to the Merger, among other things, all of the issued and
\noutstanding shares of capital stock of Street (other than Dissenting Shares, as
\ndefined in Section 1.7(a) herein and any shares owned by Select) and all
\noptions, warrants and other rights to acquire any shares of capital stock of
\nStreet shall be converted into the right to receive shares of capital stock of
\nSelect.<\/p>\n
C. A portion of the shares of capital stock of Select otherwise issuable
\nby Select in connection with the Merger shall be placed in escrow and held by
\nthe Escrow Agent pursuant to the escrow agreement set forth in Article 7 hereof
\nand the release of such shares shall be contingent upon certain events and
\nconditions as set forth in Article 7.<\/p>\n
D. It is intended by the parties hereto that the Merger shall constitute a
\nreorganization within the meaning of Section 368 of the Internal Revenue Code of
\n1986, as amended (the “Code”).<\/p>\n
E. As a material inducement for Select to consummate the Merger, certain
\nkey employees of Street will enter into a non-competition and employment
\nagreement in the form attached hereto as Exhibit A (the “Non-Competition and
\nEmployment Agreement”) with Select, each of which shall become effective as of
\nthe Effective Time (as defined herein).<\/p>\n
F. Concurrent with the execution and delivery of this Agreement, as a
\nmaterial inducement to Select to enter into this Agreement, certain shareholders
\nof Street are executing and delivering voting agreements (the “Shareholder
\nSupport Agreements”) to Select.<\/p>\n
G. Street on the one hand, and Select and Sub on the other hand, desire to
\nmake certain representations, warranties, covenants and other agreements in
\nconnection with the Merger.<\/p>\n
NOW, THEREFORE, in consideration of the covenants, promises and
\nrepresentations set forth herein, and for other good and valuable consideration,
\nthe parties agree as follows:<\/p>\n
ARTICLE 1.<\/p>\n
The Merger<\/p>\n
The Merger. At the Effective Time (as defined in Section 1.2) and subject
\nto and upon the terms and conditions of this Agreement and the applicable
\nprovisions of the California Corporations Code (“California Law”) and the
\nDelaware General Corporation Law (“Delaware Law”), Sub shall be merged with and
\ninto Street, the separate corporate existence of Sub shall cease and Street
\nshall continue as the surviving corporation. The surviving corporation after the
\nMerger is sometimes referred to hereinafter as the “Surviving Corporation.”<\/p>\n
Effective Time. Unless this Agreement is earlier terminated pursuant to
\nSection 8.1, the closing of the Merger (the “Closing”) will take place as
\npromptly as practicable, but no later than two (2) business days following
\nsatisfaction or waiver of the conditions set forth in Article 6, at the offices
\nof Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California,
\nunless another place or time is agreed to in writing by Select and Street. The
\ndate upon which the Closing actually occurs is herein referred to as the
\n“Closing Date.” On the Closing Date, the parties hereto shall cause the Merger
\nto be consummated by filing an Agreement of Merger (the “Merger Agreement”) and
\nany other required instruments with the Secretary of State of the State of
\nCalifornia and the Secretary of State of the State of Delaware, in accordance
\nwith the relevant provisions of applicable law (the later of the time of
\nacceptance of such filing by the Secretary of State of the State of California
\nor the Secretary of State of the State of Delaware of such filing being referred
\nto herein as the “Effective Time”).<\/p>\n
Effect of the Merger. At the Effective Time, the effect of the Merger shall
\nbe as provided in the applicable provisions of California Law and Delaware Law.
\nWithout limiting the generality of the foregoing, and subject thereto, at the
\nEffective Time, all the property, rights, privileges, powers and franchises of
\nStreet and Sub shall vest in the Surviving Corporation, and all debts,
\nliabilities and duties of Street and Sub shall become the debts, liabilities and
\nduties of the Surviving Corporation.<\/p>\n
Articles of Incorporation; Bylaws.<\/p>\n
(a) Unless otherwise determined by Select prior to the Effective
\nTime, at the Effective Time, the Certificate of Incorporation (with such changes
\nas may be required by California Law) of Sub as in effect immediately prior to
\nthe Effective Time shall be the Articles of Incorporation of the Surviving
\nCorporation until thereafter amended in accordance with California Law and as
\nprovided in such Articles of Incorporation; provided, however, that at the
\nEffective Time, Article I of the Articles of Incorporation of the Surviving
\nCorporation shall be amended and restated in its entirety to read as follows:
\n“The name of the corporation is SpringStreet, Inc.”<\/p>\n
-2-<\/p>\n
(b) Unless otherwise determined by Select prior to the Effective
\nTime, the Bylaws of Sub as in effect immediately prior to the Effective Time
\nshall be the Bylaws of the Surviving Corporation at the Effective Time, until
\nthereafter amended in accordance with California Law and as provided in the
\nArticles of Incorporation of the Surviving Corporation and such Bylaws.<\/p>\n
Directors and Officers. Unless otherwise determined by Select prior to the
\nEffective Time, the directors of Sub immediately prior to the Effective Time
\nshall be the directors of Surviving Corporation, each to hold the office of a
\ndirector of the Surviving Corporation in accordance with the provisions of
\nCalifornia Law and the Articles of Incorporation and Bylaws of the Surviving
\nCorporation until their successors are duly elected and qualified. The officers
\nof Street immediately prior to the Effective Time shall be the officers of the
\nSurviving Corporation, each to hold office in accordance with the provisions of
\nthe Bylaws of the Surviving Corporation.<\/p>\n
1.6 Merger Consideration<\/p>\n
(a) Certain Definitions. For purposes of this Agreement, the
\nfollowing terms shall have the following meanings:<\/p>\n
“Common Exchange Ratio” shall mean a number equal to the quotient
\nobtained by dividing (x) the Net Consideration Share Number by (y) the Total
\nOutstanding Shares less the aggregate number of outstanding shares of Street
\nSeries C Preferred Stock immediately prior to the Effective Time (with the
\nresult rounded to four decimal places and .5 being rounded up).<\/p>\n
“Consideration Shares” shall mean the number of shares of Select
\nCommon Stock and Select Series H Preferred Stock issuable to the Street
\nShareholders pursuant to Section 1.6(b) hereof.<\/p>\n
“Escrow Amount” shall mean that number of shares of Select Common
\nStock and Select Series H Preferred Stock equal to ten percent (10%) of the
\nnumber of shares of Select Common Stock and Select Series H Preferred Stock
\notherwise issuable to the Street Shareholders pursuant to Section 1.6(b) hereof.<\/p>\n
“Exchange Ratios” shall mean Common Exchange Ratio, Preferred Exchange
\nRatio and Series C Exchange Ratio.<\/p>\n
“GAAP” shall mean U.S. generally accepted accounting principles.<\/p>\n
“Knowledge” shall mean, with respect to Street or Select, what is
\nwithin the actual knowledge of any of the officers of Street or Select, as the
\ncase may be.<\/p>\n
“Net Consideration Share Number” shall mean 1,538,963.<\/p>\n
-3-<\/p>\n
“Material Adverse Effect” shall mean any change, event or effect that
\nis materially adverse to the consolidated business, assets (including intangible
\nassets), financial condition or results of operations of Street or Select, as
\napplicable.<\/p>\n
“Preferred Exchange Ratio” shall mean a number equal to the quotient
\nof (x) the Common Exchange Ratio, divided by (y) 2 (with the result rounded to
\nfour decimal places and .5 being rounded up).<\/p>\n
“Select Common Stock” shall have the meaning ascribed to it in Section
\n3.2 hereof.<\/p>\n
“Select Series H Preferred Stock” shall mean the Series H Preferred
\nStock of Select with the rights, preferences, privileges and restrictions set
\nforth on Exhibit B hereto (the “Restated Certificate”).<\/p>\n
“Series C Exchange Ratio” shall mean .0623.<\/p>\n
“Street Capital Stock” shall mean shares of Street Common Stock,
\nStreet Preferred Stock and any shares of other capital stock of Street.<\/p>\n
“Street Common Stock” shall mean shares of common stock of Street.<\/p>\n
“Street Convertible Securities” shall mean the Street Options and
\nother rights (other than Street Preferred Stock) to acquire or receive shares of
\nStreet Capital Stock.<\/p>\n
“Street Options” shall mean all issued and outstanding options to
\npurchase or otherwise acquire Street Capital Stock (whether or not vested) held
\nby officers, employees or directors of or consultants to Street (other than
\nStreet Preferred Stock).<\/p>\n
“Street Preferred Stock” shall mean shares of Street Series A
\nPreferred Stock, Street Series B Preferred Stock, Street Series C Preferred
\nStock and Street Series D Preferred Stock.<\/p>\n
“Street Series A Preferred Stock” shall mean shares of Series A
\nPreferred Stock of Street.<\/p>\n
“Street Series B Preferred Stock” shall mean shares of Series B
\nPreferred Stock of Street.<\/p>\n
“Street Series C Preferred Stock” shall mean shares of Series C
\nPreferred Stock of Street.<\/p>\n
“Street Series D Preferred Stock” shall mean shares of Series D
\nPreferred Stock of Street.<\/p>\n
-4-<\/p>\n
“Street Shareholders” shall mean holders of any shares of Street
\nCapital Stock immediately prior to the Effective Time.<\/p>\n
“Total Outstanding Shares” shall mean the aggregate number of shares
\nof Street Common Stock outstanding immediately prior to the Effective Time,
\nincluding Street Common Stock issuable upon the exercise of Street Options plus
\nthe aggregate number of shares of Street Common Stock issuable, with or without
\nthe passage of time or satisfaction of other conditions, upon exercise of or
\nconversion of all Street Convertible Securities and Street Preferred Stock
\noutstanding immediately prior to the Effective Time.<\/p>\n
(b) Effect on Street Capital Stock. At the Effective Time, by virtue
\nof the Merger and without any action on the part of Street or the Street
\nShareholders, each share of Street Capital Stock issued and outstanding
\nimmediately prior to the Effective Time (other than any Dissenting Shares, as
\ndefined in Section 1.7 hereof and any shares owned by Select, Sub or Street or
\nany direct or indirect wholly owned subsidiary thereof) shall be canceled and
\nextinguished and shall be converted automatically into the right to receive,
\nupon surrender of the certificate representing such shares of Street Capital
\nStock and upon the terms and subject to conditions set forth below and
\nthroughout this Agreement, including, without limitation, Sections 1.6(f), (g)
\nand (h) hereof and the escrow provisions set forth in Article 7 and\/or described
\nin Section 1.8(b) hereof, (i) in the case of each share of Street Common Stock,
\na number of shares of Select Common Stock equal to the Common Exchange Ratio,
\n(ii) and the case of each share of Street Preferred Stock (other than Street
\nSeries C Preferred Stock), a number of shares of Select Series H Preferred Stock
\nequal to the Preferred Exchange Ratio and (iii) in the case of each share of
\nStreet Series C Preferred Stock, a number of shares of Select Series H Preferred
\nStock equal to the Series C Exchange Ratio.<\/p>\n
(c) Assumption of Street Options. At the Effective Time, each
\noutstanding Street Option issued pursuant to Street’s 1997 Incentive Stock Plan
\n(the “Street Option Plan”) or otherwise, whether vested or unvested, will be
\nassumed by Select in connection with the Merger. Each Street Option so assumed
\nby Select under this Agreement shall continue to have, and be subject to, the
\nsame terms and conditions set forth in the Street Option Plan and\/or as provided
\nin the respective option agreements immediately prior to the Effective Time
\n(including, without limitation, any vesting schedule or repurchase rights),
\nexcept that (i) each Street Option will be exercisable for that number of whole
\nshares of Select Common Stock equal to the product of the number of shares of
\nStreet Common Stock that were issuable upon exercise of such Street Option
\nimmediately prior to the Effective Time multiplied by the Common Stock Exchange
\nRatio, rounded down to the nearest whole number of shares of Select Common Stock
\nand (ii) the per share exercise price for the shares of Select Common Stock
\nissuable upon exercise of such assumed Street Option will be equal to the
\nquotient determined by dividing the exercise price per share of Street Capital
\nStock at which such Street Option was exercisable immediately prior to the
\nEffective Time by the Common Stock Exchange Ratio, rounded up to the nearest
\nwhole cent.<\/p>\n
(d) Option Status. It is the intention of the parties hereto that the
\nStreet Options assumed by Select following the Closing pursuant to this Section
\n1.6 will, to the extent permitted by<\/p>\n
-5-<\/p>\n
applicable law, qualify as incentive stock options as defined in Section 422 of
\nthe Code, to the extent any such Street Options qualified as incentive stock
\noptions immediately prior to the Effective Time.<\/p>\n
(e) Withholding Taxes. Any number of shares of Select Common Stock
\nand\/or Select Series H Preferred Stock issuable pursuant to Section 1.6(b) shall
\nbe subject to, and reduced by, the amount of any state, federal and foreign
\nwithholding taxes incurred (and not previously paid by or on behalf of Street)
\nin connection with the acquisition of Street Capital Stock upon the exercise of
\nStreet Options, the acceleration of vesting of any Street Capital Stock or
\nStreet Options, or the payment of a bonus in the form of Street Capital Stock,
\nif any.<\/p>\n
(f) Fractional Shares. No fractional share of Select Common Stock or
\nSelect Series H Preferred Stock shall be issued in the Merger. In lieu thereof,
\nany fractional share shall be rounded to the nearest whole share of Select
\nCommon Stock or Select Series H Preferred Stock (with .5 being rounded up).<\/p>\n
(g) Cancellation of Select-owned and Street-owned Stock. At the
\nEffective Time, by virtue of the Merger and without any action on the part of
\nany of the parties hereto, each share of Street Capital Stock owned by Select,
\nSub, Street or any direct or indirect wholly-owned subsidiary thereof
\nimmediately prior to the Effective Time, shall be cancelled and extinguished
\nwithout any conversion thereof.<\/p>\n
(h) Capital Stock of Sub. At the Effective Time, by virtue of the
\nMerger and without any action on the part of any of the parties hereto, each
\nshare of capital stock of Sub issued and outstanding immediately prior to the
\nEffective Time shall be converted into and exchanged for one validly issued,
\nfully paid and nonassessable share of common stock of the Surviving Corporation.
\nEach stock certificate of Sub evidencing ownership of any such shares shall
\ncontinue to evidence ownership of such shares of capital stock of the Surviving
\nCorporation.<\/p>\n
(a) Adjustment of the Exchange Ratios. In the event that, prior to
\nthe Effective Time, any stock split, combination, reclassification or stock
\ndividend with respect to the Select Common Stock and\/or Select Series H
\nPreferred Stock, any change or conversion of Select Common Stock and\/or Select
\nSeries H Preferred Stock into other securities or any other dividend or
\ndistribution with respect to the Select Common Stock and\/or Select Series H
\nPreferred Stock should occur or, if a record date with respect to any of the
\nforegoing should occur, appropriate and proportionate adjustments shall be made
\nto the Common Exchange Ratio, Preferred Exchange Ratio and Series C Exchange
\nRatio, as the case may be, and thereafter all references to the affected
\nExchange Ratio(s) shall be deemed to be as so adjusted.<\/p>\n
Dissenting Shares for Holders of Street Capital Stock.<\/p>\n
(a) Notwithstanding any provision of this Agreement to the contrary,
\nany shares of Street Capital Stock held by a holder who has demanded and
\nperfected appraisal rights for such shares in accordance with California Law and
\nwho, as of the Effective Time, has not effectively <\/p>\n
-6-<\/p>\n
withdrawn or lost such appraisal rights (“Dissenting Shares”), shall not be
\nconverted into or represent a right to receive Select Common Stock and\/or Select
\nSeries H Preferred Stock, as the case may be, pursuant to Section 1.6, but the
\nholder thereof shall only be entitled to such rights as are granted by
\nCalifornia Law.<\/p>\n
(b) Notwithstanding the provisions of subsection (a), if any holder
\nof shares of Street Capital Stock who demands appraisal of such shares under
\nCalifornia Law shall effectively withdraw or lose (through failure to perfect or
\notherwise) the right to appraisal, then, as of the later of the Effective Time
\nand the occurrence of such event, such holder’s shares shall automatically be
\nconverted into and represent only the right to receive Select Common Stock
\nand\/or Select Series H Preferred Stock, as the case may be, as provided in
\nSection 1.6 (and subject to the provisions of Section 7.2 hereof), without
\ninterest thereon, upon surrender of the certificate representing such shares.<\/p>\n
(c) Street shall give Select (i) prompt notice of any written demands
\nfor appraisal of any shares of Street Capital Stock, withdrawals of such
\ndemands, and any other instruments served pursuant to California Law and
\nreceived by Street and (ii) the opportunity to participate in all negotiations
\nand proceedings with respect to demands for appraisal under California Law.
\nStreet shall not, except with the prior written consent of Select, voluntarily
\nmake any payment with respect to any demands for appraisal of capital stock of
\nStreet or offer to settle or settle any such demands.<\/p>\n
Surrender of Certificates.<\/p>\n
(d) Exchange Agent. The Secretary of Select shall serve as exchange
\nagent (the “Exchange Agent”) in the Merger.<\/p>\n
(e) Select to Provide Select Common Stock and Select Series H
\nPreferred Stock. Prior to the Closing, Select shall make available to the
\nExchange Agent for exchange in accordance with this Article 1 the shares of
\nSelect Common Stock and Select Series H Preferred Stock issuable to Street
\nShareholders pursuant to Section 1.6 in exchange for outstanding shares of
\nStreet Capital Stock, less the Escrow Amount which Select shall deposit into the
\nEscrow Fund (as defined in Section 7.2(a) hereof) on behalf of the Street
\nShareholders. The portion of the Escrow Amount contributed on behalf of each
\nStreet Shareholder shall be in proportion to the aggregate number of shares of
\nSelect Common Stock and\/or Select Series H Preferred Stock, as the case may be,
\neach such Street Shareholder would otherwise be entitled to receive in the
\nMerger (excluding any shares of Select Common Stock issuable upon exercise of
\nany assumed Street Options) by virtue of ownership of outstanding shares of
\nStreet Capital Stock immediately prior to the Effective Time.<\/p>\n
(f) Exchange Procedures. As soon as practicable following the Closing
\nDate, Select shall cause to be mailed to each Street Shareholder (i) a letter of
\ntransmittal (which shall be in such form and contain such provisions as Select
\nmay reasonably specify and shall specify that delivery shall be effected, and
\nrisk of loss and title to the certificates (the “Certificates”) which
\nimmediately prior to the Effective Time represent outstanding shares of Street
\nCapital Stock whose shares are<\/p>\n
-7-<\/p>\n
converted into the right to receive such Street Shareholder’s pro rata portion
\nof the Consideration Shares pursuant to Section 1.6, shall pass, only upon
\ndelivery of the Certificates to the Exchange Agent at the Closing) and (ii)
\ninstructions for use in effecting the surrender at the Closing of the
\nCertificates in exchange for certificates representing such Street Shareholder’s
\npro rata portion of the Consideration Shares. Upon surrender of a Certificate at
\nthe Closing for cancellation to the Exchange Agent or to such other agent or
\nagents as may be appointed by Select, together with such letter of transmittal,
\nduly completed and validly executed in accordance with the instructions thereto,
\nthe Street Shareholder shall be entitled to receive, and the Exchange Agent
\nshall promptly deliver in exchange therefor, a certificate bearing the legend
\nset forth in Section 5.2 hereof representing the number of whole shares equal to
\nthe Consideration Shares (less the number of shares of Select Common Stock
\nand\/or Select Series H Preferred Stock, as the case may be, to be deposited in
\nthe Escrow Fund on such holder’s behalf pursuant to Section 1.8(b) and Article 7
\nhereof) to which such holder is entitled pursuant to Section 1.6, and the
\nCertificate so surrendered shall forthwith be canceled. As soon as practicable
\nafter the Closing Date, and subject to and in accordance with the provisions of
\nArticle 7 hereof, Select shall cause to be distributed to the Escrow Agent (as
\ndefined in Article 7) a certificate or certificates representing that number of
\nshares of Select Common Stock and Select Series H Preferred Stock equal to the
\nEscrow Amount which shares shall be registered in the name of the Escrow Agent.
\nSuch shares shall be beneficially owned by the holders on whose behalf such
\nshares were deposited in the Escrow Fund and shall be available to compensate
\nSelect as provided in Article 7. Until so surrendered, each outstanding
\nCertificate that, prior to the Effective Time, represented shares of Street
\nCapital Stock will be deemed from and after the Effective Time, for all
\ncorporate purposes, other than the payment of dividends, to evidence the
\nownership of the number of full shares of Select Common Stock and\/or Select
\nSeries H Preferred Stock, as the case may be, into which such shares of Street
\nCapital Stock shall have been so converted.<\/p>\n
(g) Distributions With Respect to Unexchanged Shares. No dividends or
\nother distributions declared or made after the Effective Time with respect to
\nSelect Common Stock or the Select Series H Preferred Stock, as the case may be,
\nwith a record date after the Effective Time will be paid to the holder of any
\nunsurrendered Certificate with respect to the shares of Select Common Stock
\nand\/or Select Series H Preferred Stock represented thereby until the holder of
\nrecord of such Certificate shall surrender such Certificate. Subject to
\napplicable law, following surrender of any such Certificate, there shall be paid
\nto the record holder of the certificates representing whole shares of Select
\nCommon Stock and\/or Select Series H Preferred Stock, as the case may be, issued
\nin exchange therefor, plus the amount of dividends or other distributions
\n(without interest) with a record date after the Effective Time theretofore paid
\nwith respect to such whole shares of Select Common Stock and\/or Select Series H
\nPreferred Stock.<\/p>\n
(h) Transfers of Ownership. If any certificate for shares of Select
\nCommon Stock and\/or Select Series H Preferred Stock is to be issued in a name
\nother than that in which the Certificate surrendered in exchange therefor is
\nregistered, it will be a condition of the issuance thereof that the Certificate
\nso surrendered will be properly endorsed and otherwise in proper form for
\ntransfer and that the person requesting such exchange will have paid to Select
\nor any agent <\/p>\n
-8-<\/p>\n
designated by it any transfer or other taxes required by reason of the issuance
\nof a certificate for shares of Select Common Stock and\/or Select Series H
\nPreferred Stock, as the case may be, in any name other than that of the
\nregistered holder of the Certificate surrendered.<\/p>\n
(i) Lost, Stolen or Destroyed Certificates. In the event any
\nCertificates evidencing shares of Street Capital Stock shall have been lost,
\nstolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
\nstolen or destroyed certificates, upon the delivery by the holder thereof of an
\naffidavit of that fact by the holder thereof containing customary
\nindemnification provisions.<\/p>\n
(j) No Liability. Notwithstanding anything to the contrary in this
\nSection 1.8, neither Select nor any party hereto shall be liable to a holder of
\nshares of Select capital stock and\/or Street Capital Stock for any amount
\nproperly paid to a public official pursuant to any applicable abandoned
\nproperty, escheat or similar law.<\/p>\n
(k) No Further Ownership Rights in Street Capital Stock. The shares
\nof Select Common Stock and Select Series H Preferred Stock issued in accordance
\nwith the terms hereof shall be deemed to be full satisfaction of all rights
\npertaining to shares of Street Capital Stock outstanding prior to the Effective
\nTime, and there shall be no further registration of transfers on the records of
\nSelect of shares of Street Capital Stock that were outstanding prior to the
\nEffective Time. If, after the Effective Time, Certificates are presented to
\nSelect for any reason, they shall be canceled and exchanged as provided in this
\nArticle 1.<\/p>\n
(l) Tax Consequences. It is intended by the parties hereto that the
\nMerger shall constitute a reorganization within the meaning of Section 368 of
\nthe Code. The parties hereto adopt this Agreement as a “plan of reorganization”
\nwithin the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
\nIncome Tax Regulations. Each party has consulted with its own tax advisers with
\nrespect to the tax consequences of the Merger.<\/p>\n
(m) Taking of Necessary Action; Further Action. If, at any time after
\nthe Effective Time, any further action is necessary or desirable to carry out
\nthe purposes of this Agreement and to vest Surviving Corporation with full
\nright, title and possession to all assets, property, rights, privileges, powers
\nand franchises of Street, Select and Sub, the officers and directors of Street,
\nSelect and Sub are fully authorized in the name of their respective corporations
\nor otherwise to take, and will take, all such lawful and necessary action.<\/p>\n
ARTICLE 2.<\/p>\n
REPRESENTATIONS AND WARRANTIES OF STREET<\/p>\n
As of the date hereof and as of the Closing Date, Street represents and
\nwarrants to Select and Sub, subject to the exceptions specifically disclosed in
\nwriting in the disclosure letter and supplied<\/p>\n
-9-<\/p>\n
by Street to Select dated as of the date hereof and certified by a duly
\nauthorized officer of Street (the “Street Schedules”), as follows:<\/p>\n
Organization of Street.<\/p>\n
(a) Street has no subsidiaries and Street owns no capital stock of,
\nor any equity interest of any nature in, any other entity, except for passive
\ninvestments in equity interests of public companies as part of the cash
\nmanagement program of Street. Street has not agreed and is not obligated to
\nmake, nor bound by any written, oral or other agreement, contract, subcontract,
\nlease, binding understanding, instrument, note, option, warranty, purchase
\norder, license, sublicense, insurance policy, benefit plan or legally binding
\ncommitment or undertaking of any nature, as in effect as of the date hereof or
\nas may hereinafter be in effect (“Contract”) under which Contract it may become
\nobligated to make, any future investment in or capital contribution to any other
\nentity. Street has not, at any time, been a general partner of any general
\npartnership, limited partnership or other entity.<\/p>\n
(b) Street is a corporation duly organized, validly existing and in
\ngood standing under the laws of the jurisdiction of its incorporation and has
\nall necessary power and authority: (i) to conduct its business in the manner in
\nwhich its business is currently being conducted; (ii) to own and use its assets
\nin the manner in which its assets are currently owned and used; and (iii) to
\nperform its obligations under all Contracts by which it is bound.<\/p>\n
(c) Street is qualified to do business as a foreign corporation, and
\nis in good standing, under the laws of all jurisdictions where the nature of its
\nbusiness requires such qualification and where the failure to so qualify would
\nhave a Material Adverse Effect (as defined in Section 1.6(a)) on Street.<\/p>\n
(d) Street has delivered or made available to Select a true and
\ncorrect copy of the Articles of Incorporation and Bylaws of Street, each as
\namended to date (collectively, the “Street Charter Documents”), and each such
\ninstrument is in full force and effect. Street is not in violation of any of the
\nprovisions of the Street Charter Documents.<\/p>\n
(e) Street has delivered or made available to Select all proposed or
\nconsidered amendments to Street Charter Documents.<\/p>\n
Street Capital Structure.<\/p>\n
(a) The authorized capital stock of Street consists of: (i)
\n25,000,000 shares of Street Common Stock, of which 1,298,374 shares are
\noutstanding as of April 22, 1999; and (ii) 15,277,136 shares of Street Preferred
\nStock, of which 14,554,062 shares are outstanding as of the date of this
\nAgreement. The Street Preferred Stock is designated as follows: (i) 3,750,000
\nshares of Street Series A Preferred Stock, all of which are outstanding as of
\nthe date of this Agreement; (ii) 3,684,210 shares of Street Series B Preferred
\nStock, all of which are outstanding as of the date of <\/p>\n
-10-<\/p>\n
this Agreement; (iii) 4,689,080 shares of Street Series C Preferred Stock, all
\nof which are outstanding as of the date of this Agreement; and (iv) 3,153,846
\nshares of Street Series D Preferred Stock, 2,430,772 of which are outstanding as
\nof the date of this Agreement. All of the outstanding shares of capital stock of
\nStreet have been duly authorized and validly issued, and are fully paid and
\nnonassessable. As of the date of this Agreement, there are no shares of Street
\nCommon Stock held in treasury by Street. Upon consummation of the Merger, (A)
\nthe shares of Select Common Stock and Select Series H Preferred Stock issued in
\nexchange for any shares of Street Capital Stock that are subject to a Contract
\npursuant to which Street has the right to repurchase, redeem or otherwise
\nreacquire any shares of Street Capital Stock will, without any further act of
\nSelect, Street or any other person, become subject to the restrictions,
\nconditions and other provisions contained in such Contract (subject to the
\nprovisions thereof as in effect on the date hereof) and (B) Select will
\nautomatically succeed to and become entitled to exercise Street’s rights and
\nremedies under any such Contract.<\/p>\n
(b) As of April 22, 1999: (i) 2,226,279 shares of Street Common Stock
\nare subject to issuance pursuant to outstanding options to purchase Street
\nCommon Stock under the Street Option Plan or otherwise; and (ii) 150,347 shares
\nof Street Common Stock are reserved for future issuance under the Street Option
\nPlan. Part 2.2(b) of the Street Schedules sets forth the following information
\nwith respect to each Street Option outstanding as of the date of this Agreement:
\n(i) the name and address of the optionee and optionee’s position at Street; (ii)
\nthe number of shares of Street Common Stock subject to such Street Option; (iii)
\nthe exercise price of such Street Option; (iv) the date on which such Street
\nOption was granted; (v) the applicable vesting schedule; (vi) the date on which
\nsuch Street Option expires; and (vii) whether the exercisability of such option
\nwill be accelerated in any way by the transactions contemplated by this
\nAgreement, and indicates the extent of any such acceleration. Street has made
\navailable to Select accurate and complete copies of all stock option plans
\npursuant to which Street has granted stock options that are currently
\noutstanding and the form of all stock option agreements evidencing such options.
\nAll shares of Street Common Stock subject to issuance as aforesaid, upon
\nissuance on the terms and conditions specified in the instruments pursuant to
\nwhich they are issuable, would be duly authorized, validly issued, fully paid
\nand nonassessable. Except as set forth in Part 2.2(b)(i) of the Street
\nSchedules, there are no commitments or agreements of any character to which
\nStreet is bound obligating Street to accelerate the vesting of any Street Option
\nas a result of the Merger or the transactions contemplated by this Agreement.<\/p>\n
(c) All outstanding shares of Street Capital Stock and all
\noutstanding Street Options have been issued and granted in compliance with (i)
\nall applicable securities laws and other applicable Legal Requirements (as
\ndefined below) and (ii) all requirements set forth in applicable Contracts. For
\nthe purposes of this Agreement, “Legal Requirements” means any federal, state,
\nlocal, municipal, foreign or other law, statute, constitution, principle of
\ncommon law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
\nor requirement issued, enacted, adopted, promulgated, implemented or otherwise
\nput into effect by or under the authority of any Governmental Entity (as defined
\nbelow).<\/p>\n
-11-<\/p>\n
Obligations With Respect to Capital Stock.<\/p>\n
Except as set forth Section 2.2(b) hereof and in Part 2.3 of the Street
\nSchedules, there are no equity securities, partnership interests or similar
\nownership interests of any class of any Street equity security, or any
\nsecurities exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests, issued,
\nreserved for issuance or outstanding. Except for securities Street owns free and
\nclear of all claims and Encumbrances (as defined below), as of the date of this
\nAgreement, there are no equity securities, partnership interests or similar
\nownership interests of any class of equity security of any subsidiary of Street,
\nor any security exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests, issued,
\nreserved for issuance or outstanding. For the purposes of this Agreement
\n“encumbrances” means any lien, pledge, hypothecation, charge, mortgage, security
\ninterest, encumbrance, claim, infringement, interference, option, right of first
\nrefusal, preemptive right, community property interest or restriction of any
\nnature (including any restriction on the voting of any security, any restriction
\non the transfer of any security or other asset, any restriction on the receipt
\nof any income derived from any asset, any restriction on the use of any asset
\nand any restriction on the possession, exercise or transfer of any other
\nattribute of ownership of any asset). Except as set forth in Part 2.3 of the
\nStreet Schedules or as set forth in Section 2.2 hereof, there are no
\nsubscriptions, options, warrants, equity securities, partnership interests or
\nsimilar ownership interests, calls, rights (including preemptive rights),
\ncommitments or agreements of any character to which Street is a party or by
\nwhich it is bound obligating Street to issue, deliver or sell, or cause to be
\nissued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause
\nthe repurchase, redemption or acquisition of, any shares of capital stock,
\npartnership interests or similar ownership interests of Street or obligating
\nStreet to grant, extend, accelerate the vesting of or enter into any such
\nsubscription, option, warrant, equity security, call, right, commitment or
\nagreement. As of the date of this Agreement, except as contemplated by this
\nAgreement and as set forth in Part 2.3 of the Street Schedules, there are no
\nregistration rights and there is, except for the Shareholder Support Agreements,
\nno voting trust, proxy, rights plan, antitakeover plan or other agreement or
\nunderstanding to which Street is a party or by which it is bound with respect to
\nany equity security of any class of Street.<\/p>\n
Authority; Non-Contravention.<\/p>\n
(a) Street has all requisite corporate power and authority to enter
\ninto this Agreement and to consummate the transactions contemplated hereby. The
\nexecution and delivery of this Agreement and the consummation of the
\ntransactions contemplated hereby have been duly authorized by all necessary
\ncorporate action on the part of Street, subject only to the approval and
\nadoption of this Agreement and the approval of the Merger by Street’s
\nshareholders and the filing of the Merger Agreement pursuant to California Law.
\nThe affirmative vote of the holders of (i) a majority of each series of Street
\nPreferred Stock, each voting separately as a single class, (ii) sixty percent
\n(60%) of Street Preferred Stock voting together as a single class, (iii) a
\nmajority of Street Common Stock voting together as a single class and (iv) a
\nmajority of Street Common Stock and <\/p>\n
-12-<\/p>\n
Street Preferred Stock voting together as a single class, is required to approve
\nand adopt this Agreement and approve the Merger. The vote of the shares of
\nStreet Capital Stock in accordance with the terms of the Shareholder Support
\nAgreements, is sufficient for Street Shareholders to approve and adopt this
\nAgreement and approve the Merger. This Agreement has been duly executed and
\ndelivered by Street and, assuming due execution and delivery by Select and Sub,
\nconstitutes a valid and binding obligation of Street, enforceable against Street
\nin accordance with its terms, except as enforceability may be limited by
\nbankruptcy and other similar laws and general principles of equity. The
\nexecution and delivery of this Agreement by Street does not, and the performance
\nof this Agreement by Street will not, (i) conflict with or violate the Street
\nCharter Documents, subject to obtaining the approval and adoption of this
\nAgreement and the approval of the Merger by Street’s shareholders as
\ncontemplated in Section 5.1, (ii) conflict with or violate any law, rule,
\nregulation, order, judgment or decree applicable to Street or by which Street or
\nany of its respective properties is bound or affected, subject to compliance
\nwith the requirements set forth in Section 2.4(b) below or (iii) result in any
\nmaterial breach of or constitute a material default (or an event that with
\nnotice or lapse of time or both would become a material default) under, or
\nimpair Street’s rights or alter the rights or obligations of any third party
\nunder, or give to others any rights of termination, amendment, acceleration or
\ncancellation of, or result in the creation of a material lien or Encumbrance on
\nany of the material properties or assets of Street or any of its subsidiaries
\npursuant to, any material note, bond, mortgage, indenture, contract, agreement,
\nlease, license, permit, franchise, concession, or other instrument or obligation
\nto which Street or any of its subsidiaries is a party or by which Street or any
\nof its subsidiaries or its or any of their respective assets are bound or
\naffected. Part 2.4(b) of the Street Schedules lists all consents, waivers and
\napprovals under any of Street’s or any of its subsidiaries’ agreements,
\ncontracts, licenses or leases required to be obtained in connection with the
\nconsummation of the transactions contemplated hereby, which, if individually or
\nin the aggregate not obtained, would result in a material loss of benefits to
\nStreet, Select or the Surviving Corporation as a result of the Merger.<\/p>\n
(b) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with any court, administrative agency or commission or
\nother governmental authority or instrumentality, foreign or domestic
\n(“Governmental Entity”), is required to be obtained or made by Street in
\nconnection with the execution and delivery of this Agreement or the consummation
\nof the Merger, except for (i) the filing of the Merger Agreement with the
\nSecretary of State of the State of California and the Secretary of State of the
\nState of Delaware, (ii) such consents, waivers, approvals, orders,
\nauthorizations, registrations, declarations and filings as may be required under
\napplicable securities laws, including obtaining the California Permit (as
\ndefined in Section 5.1(a)), (iii) such consents, approvals, orders,
\nauthorizations, registrations, declarations and filings as may be required under
\napplicable federal, foreign and state securities (or related) laws, and the
\nsecurities or antitrust laws of any foreign country, and (iv) such other
\nconsents, authorizations, filings, approvals and registrations which if not
\nobtained or made would not be material to Select, Sub or Street or have a
\nmaterial adverse effect on the ability of the parties hereto to consummate the
\nMerger.<\/p>\n
-13-<\/p>\n
Street Financial Statements.<\/p>\n
Part 2.5 of the Street Schedules sets forth Street’s audited balance sheet
\nas of December 31, 1998 and the related audited statements of income and cash
\nflow for the period from Street’s inception to December 31, 1998 (the “Street
\nAudited Financials”) and Street’s unaudited balance sheet as of March 31, 1999
\n(the “Street Current Balance Sheet”) and the related unaudited statements of
\nincome and cash flow for the three months then ended (the “Street Unaudited
\nFinancials” and, together with the Street Audited Financials, the “Street
\nFinancials”). The Street Financials are correct in all material respects and
\nhave been prepared in accordance with GAAP, applied on a basis consistent
\nthroughout the periods indicated and consistent with each other except as may be
\nindicated therein. The Street Financials present fairly the financial
\ncondition, operating results and cash flows of Street as of the dates and during
\nthe periods indicated therein, subject in the case of the Street Unaudited
\nFinancials, to normal year-end adjustments, which will not be material in amount
\nor significance.<\/p>\n
Absence of Certain Changes or Events.<\/p>\n
Since the date of the Street Current Balance Sheet until the date hereof
\nthere has not been: (i) any Material Adverse Effect on Street, (ii) any
\ndeclaration, setting aside or payment of any dividend on, or other distribution
\n(whether in cash, stock or property) in respect of, any of Street Capital Stock,
\nor any purchase, redemption or other acquisition by Street of any of Street’s
\ncapital stock or any options, warrants, calls or rights to acquire any such
\nshares or other securities except for repurchases from employees following their
\ntermination pursuant to the terms of their pre-existing stock option or purchase
\nagreements, (iii) any split, combination or reclassification of any of Street
\nCapital Stock, (iv) any granting by Street of any increase in compensation or
\nfringe benefits, except for normal increases of cash compensation in the
\nordinary course of business consistent with past practice, or any payment by
\nStreet of any bonus, except for bonuses made in the ordinary course of business
\nconsistent with past practice, or any granting by Street of any increase in
\nsever ance or termination pay or any entry by Street into any currently
\neffective employment, severance, termination or indemnification agreement or any
\nagreement the benefits of which are contingent or the terms of which are
\nmaterially altered upon the occurrence of a transaction involving Street of the
\nnature contemplated hereby, (v) entry by Street into any licensing or other
\nagreement with regard to the acquisition or disposition of any material
\nIntellectual Property (as defined in Section 2.9) other than licenses in the
\nordinary course of business consistent with past practice, (vi) any material
\nchange by Street in its accounting methods, principles or practices, except as
\nrequired by concurrent changes in GAAP or (vii) any revaluation by Street of any
\nof its assets, including, without limitation, writing down the value of
\ncapitalized inventory or writing off notes or accounts receivable other than in
\nthe ordinary course of business and consistent with past practice.<\/p>\n
Taxes.<\/p>\n
(a) Definition of Taxes. For the purposes of this Agreement, “Tax” or
\n“Taxes” refers to any and all federal, state, local and foreign taxes,
\nassessments and other governmental charges,<\/p>\n
-14-<\/p>\n
duties, impositions and liabilities relating to taxes, including taxes based
\nupon or measured by gross receipts, income, profits, sales, use and occupation,
\nand value added, ad valorem, transfer, franchise, withholding, payroll,
\nrecapture, employment, excise and property taxes, together with all interest,
\npenalties and additions imposed with respect to such amounts and any obligations
\nunder any agreements or arrangements with any other person with respect to such
\namounts and including any liability for taxes of a predecessor entity.<\/p>\n
(b) Tax Returns and Audits.<\/p>\n
(i) Street has timely filed all federal, state, local and
\nforeign returns, estimates, information statements and reports (“Returns”)
\nrelating to Taxes required to be filed by Street with any Tax authority, except
\nsuch Returns which are not material to Street. Street has paid all Taxes shown
\nto be due on such Returns.<\/p>\n
(ii) Street as of the Effective Time will have withheld
\nall federal and state income taxes, Taxes pursuant to the Federal Insurance
\nContribution Act (“FICA”), Taxes pursuant to the Federal Unemployment Tax Act
\n(“FUTA”) and other Taxes required to be withheld.<\/p>\n
(iii) Street has not been delinquent in the payment of any
\nTax nor is there any material Tax deficiency outstanding, proposed or assessed
\nagainst Street, nor has Street executed any unexpired waiver of any statute of
\nlimitations on or extending the period for the assessment or collection of any
\nmaterial Tax.<\/p>\n
(iv) No audit or other examination of any Return of Street
\nby any Tax authority is presently in progress, nor has Street been notified of
\nany request for such an audit or other examination.<\/p>\n
(v) No adjustment relating to any Returns filed by Street
\nhas been proposed in writing formally or informally by any Tax authority to
\nStreet or any of its representatives.<\/p>\n
(vi) Street has no liability for unpaid Taxes which has
\nnot been accrued for or reserved on the Street Current Balance Sheet, whether
\nasserted or unasserted, contingent or otherwise, which is material to Street,
\nother than any liability for unpaid Taxes that may have accrued since the date
\nof the Street Current Balance Sheet in connection with the operation of the
\nbusiness of Street in the ordinary course.<\/p>\n
(vii) There is no contract, agreement, plan or arrangement
\nto which Street is a party as of the date of this Agreement, including but not
\nlimited to the provisions of this Agreement, covering any employee or former
\nemployee of Street that, individually or collectively, could give rise to the
\npayment of any amount that would not be deductible pursuant to Sections 280G,
\n404 or 162(m) of the Code.<\/p>\n
-15-<\/p>\n
(viii) Street has not filed any consent agreement under
\nSection 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
\nto any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of
\nthe Code) owned by Street.<\/p>\n
(ix) Street is not a party to or has any obligation under
\nany tax-sharing, tax indemnity or tax allocation agreement or arrangement.<\/p>\n
(x) Except as may be required as a result of the Merger,
\nStreet has not been and will not be required to include any adjustment in
\ntaxable income for any Tax period (or portion thereof) pursuant to Section 481
\nor Section 263A of the Code or any comparable provision under state or foreign
\nTax laws as a result of transactions, events or accounting methods employed
\nprior to the Closing.<\/p>\n
(xi) None of Street’s assets are tax-exempt use property
\nwithin the meaning of Section 168(h) of the Code.<\/p>\n
(xii) Part 2.7 of Street Schedules lists (A) any foreign
\nTax holidays, (B) any inter-Street transfer pricing agreements, or other
\narrangements that have been established by Street with any Tax authority and (C)
\nany expatriate programs or policies affecting Street.<\/p>\n
Title to Properties; Absence of Liens and Encumbrances.<\/p>\n
(a) Part 2.8(a)(i) of the Street Schedules lists all real property
\nleases to which Street is a party as of the date of this Agreement and each
\namendment thereto that is in effect as of the date of this Agreement. All such
\ncurrent leases are in full force and effect, are valid and effective in
\naccordance with their respective terms, and there is not, under any of such
\nleases, any existing default or event of default (or event which with notice or
\nlapse of time, or both, would constitute a default) that would give rise to a
\nmaterial claim. Other than the leaseholds created under the real property leases
\nidentified in Part 2.8(a)(i) of the Street Schedules, Street owns no interest in
\nreal property.<\/p>\n
(b) Street has good and valid title to, or, in the case of leased
\nproperties and assets, valid leasehold interests in, all of its tangible
\nproperties and assets, real, personal and mixed, used or held for use in its
\nbusiness, free and clear of any liens, pledges, charges, claims, security
\ninterests or other encumbrances of any sort (“Liens”), except as reflected in
\nthe Street Financials and except for liens for taxes not yet due and payable,
\nstatutory liens and such Liens or other imperfections of title and encumbrances,
\nif any, which are not material in character, amount or extent, and which do not
\nmaterially detract from the value, or materially interfere with the present use,
\nof the property subject thereto or affected thereby.<\/p>\n
-16-<\/p>\n
Intellectual Property.<\/p>\n
For the purposes of this Agreement, the following terms have the following
\ndefinitions:<\/p>\n
“Intellectual Property” shall mean any or all of the following and all
\n rights in, arising out of, or associated therewith: (i) all United
\n States, international and foreign patents and applications therefor
\n and all reissues, divisions, renewals, extensions, provisionals,
\n continuations and continuations-in-part thereof; (ii) all inventions
\n (whether patentable or not), invention disclosures, improvements,
\n trade secrets, proprietary information, know how, technology,
\n technical data and customer lists, and all documentation relating to
\n any of the foregoing; (iii) all copyrights, copyrights registrations
\n and applications therefor, and all other rights corresponding thereto
\n throughout the world; (iv) all industrial designs and any
\n registrations and applications therefor throughout the world; (v) all
\n trade names, logos, URLs, common law trademarks and service marks,
\n trademark and service mark registrations and applications therefor
\n throughout the world; (vi) all databases and data collections and all
\n rights therein throughout the world; (vii) all moral and economic
\n rights of authors and inventors, however denominated, throughout the
\n world and (viii) any similar or equivalent rights to any of the
\n foregoing anywhere in the world.<\/p>\n
“Street Intellectual Property” shall mean any Intellectual Property
\n that is owned by, or exclusively licensed to, Street.<\/p>\n
“Registered Intellectual Property” means all United States,
\n international and foreign: (i) patents and patent applications
\n (including provisional applications); (ii) registered trademarks,
\n applications to register trademarks, intent-to-use applications, or
\n other registrations or applications related to trademarks; (iii)
\n registered copyrights and applications for copyright registration; and
\n (iv) any other Intellectual Property that is the subject of an
\n application, certificate, filing, registration or other document
\n issued, filed with, or recorded by any state, government or other
\n public legal authority.<\/p>\n
“Street Registered Intellectual Property” means all of the Registered
\n Intellectual Property owned by, or filed in the name of, Street.<\/p>\n
(a) No material Street Intellectual Property or product or service of
\nStreet is subject to any proceeding or outstanding decree, order, judgment,
\nagreement or stipulation restricting in any manner the use, transfer, or
\nlicensing thereof by Street, or which may affect the validity, use or
\nenforceability of such Street Intellectual Property.<\/p>\n
(b) Part 2.9(b) of the Street Schedules is a complete and accurate
\nlist of all Street Registered Intellectual Property as of the date hereof and
\nspecifies, where applicable, the jurisdictions in which each such item of Street
\nRegistered Intellectual Property has been issued or<\/p>\n
-17-<\/p>\n
registered or in which an application for such issuance and registration has
\nbeen filed, including the respective registration or application numbers. Each
\nmaterial item of Street Registered Intellectual Property is valid and
\nsubsisting, all necessary registration, maintenance and renewal fees currently
\ndue in connection with such Registered Intellectual Property have been made and
\nall necessary documents, recordations and certificates in connection with such
\nRegistered Intellectual Property have been filed with the relevant patent,
\ncopyright, trademark or other authorities in the United States or foreign
\njurisdictions, as the case may be, for the purposes of maintaining such
\nRegistered Intellectual Property.<\/p>\n
(c) Street owns and has good and exclusive title to, or has license
\n(sufficient for the conduct of its business as currently conducted and as
\ncurrently proposed to be conducted) to, each material item of Street
\nIntellectual Property or other Intellectual Property used by Street free and
\nclear of any lien or encumbrance (excluding licenses and related restrictions);
\nand Street is the exclusive owner of all trademarks and trade names used in
\nconnection with the operation or conduct of the business of Street, including
\nthe sale of any products or the provision of any services by Street.<\/p>\n
(d) Street owns exclusively, and has good title to, all copyrighted
\nworks that are Street products or which Street otherwise expressly purports to
\nown.<\/p>\n
(e) To the extent that any material Intellectual Property has been
\ndeveloped or created by a third party for Street, Street has a written agreement
\nwith such third party with respect thereto and Street thereby either (i) has
\nobtained ownership of, and is the exclusive owner of or (ii) has obtained a
\nlicense (sufficient for the conduct of its business as currently conducted and
\nas currently proposed to be conducted) to all such third party’s Intellectual
\nProperty in such work, material or invention by operation of law or by valid
\nassignment, to the fullest extent it is legally possible to do so.<\/p>\n
(f) Street has not transferred ownership of, or granted any exclusive
\nlicense with respect to, any Intellectual Property that is or was material to
\nStreet Intellectual Property, to any third party.<\/p>\n
(g) The Street Schedules list all material contracts, licenses and
\nagreements to which Street is a party as of the date hereof (i) with respect to
\nStreet Intellectual Property licensed or transferred to any third party (other
\nthan end-user licenses in the ordinary course); or (ii) pursuant to which a
\nthird party has licensed or transferred any material Intellectual Property to
\nStreet.<\/p>\n
(h) All material contracts, licenses and agreements relating to
\nStreet Intellectual Property are in full force and effect. The consummation of
\nthe transactions contemplated by this Agreement will neither violate nor result
\nin the breach, modification, cancellation, termination or suspension of such
\ncontracts, licenses and agreements. Street is in material compliance with, and
\nhas not materially breached any term any of such contracts, licenses and
\nagreements and, to the Knowledge of Street, all other parties to such contracts,
\nlicenses and agreements are in compliance with, and have not materially breached
\nany term of, such contracts, licenses and agreements. <\/p>\n
-18-<\/p>\n
Following the Closing Date, the Surviving Corporation will be permitted to
\nexercise all of Street’s rights under such contracts, licenses and agreements to
\nthe same extent Street would have been able to had the transactions contemplated
\nby this Agreement not occurred and without the payment of any additional amounts
\nor consideration other than ongoing fees, royalties or payments which Street
\nwould otherwise be required to pay.<\/p>\n
(i) The operation of the business of Street as such business
\ncurrently is conducted, including Street’s design, development, manufacture,
\nmarketing and sale of the products or services of Street (including with respect
\nto products and services currently under development) has not, does not and will
\nnot infringe or misappropriate the Intellectual Property of any third party in
\nany respect adverse to such party (including, without limitation, United States
\nPatent Nos. 5,032,989 and 4,870,576) or constitute unfair competition or trade
\npractices under the laws of any jurisdiction.<\/p>\n
(j) Street has not received notice from any third party that the
\noperation of the business of Street or any act, product or service of Street,
\ninfringes or misappropriates the Intellectual Property of any third party or
\nconstitutes unfair competition or trade practices under the laws of any
\njurisdiction.<\/p>\n
(k) To the Knowledge of Street, no person has or is infringing or
\nmisappropriating, in any respect materially adverse to Street, any Street
\nIntellectual Property.<\/p>\n
(l) Street has taken reasonable steps to protect Street’s rights in
\nStreet’s confidential information and trade secrets that it wishes to protect or
\nany trade secrets or confidential information of third parties provided to
\nStreet, and, without limiting the foregoing, Street has and enforces a policy
\nrequiring each employee and contractor to execute a proprietary
\ninformation\/confidentiality and invention assignment agreement and all current
\nand former employees and contractors of Street have executed such an agreement,
\nexcept where the failure to do so is not reasonably expected to be material to
\nStreet.<\/p>\n
Compliance; Permits; Restrictions.<\/p>\n
(a) Street is not in any material respect, in conflict with, or in
\ndefault or in violation of (i) any law, rule, regulation, order, judgment or
\ndecree applicable to Street or by which Street or any of its respective
\nproperties is bound or affected or (ii) any material note, bond, mortgage,
\nindenture, contract, agreement, lease, license, permit, franchise or other
\ninstrument or obligation to which Street is a party or by which Street or any of
\nits respective properties is bound or affected, except for conflicts, violations
\nand defaults that (individually or in the aggregate) would not cause Street to
\nlose any material benefit or incur any material liability. No investigation or
\nreview by any Governmental Entity is pending or, to Street’s Knowledge, has been
\nthreatened against Street, nor, to Street’s Knowledge, has any Governmental
\nEntity indicated an intention to conduct an investigation of Street. There is
\nno material agreement, judgment, injunction, order or decree binding upon Street
\nwhich has or would reasonably be expected to have the effect of prohibiting or
\nmaterially impairing <\/p>\n
-19-<\/p>\n
any business practice of Street or Select, any acquisition of material property
\nby Street or the conduct of business by Street as currently conducted.<\/p>\n
(b) Street holds, to the extent legally required, all permits,
\nlicenses, variances, exemptions, orders and approvals from Governmental Entities
\nthat are material to and required for the operation of the business of Street as
\ncurrently conducted (collectively, the “STREET PERMITS”). Street is in
\ncompliance in all material respects with the terms of the Street Permits, except
\nwhere the failure to be in compliance with the terms of the Street Permits would
\nnot be material to Street or Select.<\/p>\n
Litigation.<\/p>\n
Except as disclosed in Part 2.11 of the Street Schedules, there are no
\nclaims, suits, actions or proceedings pending or, to the Knowledge of Street,
\nthreatened against, relating to or affecting Street, before any court,
\ngovernmental department, commission, agency, instrumentality or authority, or
\nany arbitrator that seeks to restrain or enjoin the consummation of the
\ntransactions contemplated by this Agreement or which would reasonably be
\nexpected, either singularly or in the aggregate with all such claims, suits,
\nactions or proceedings, to be material and adverse to Street. No Governmental
\nEntity has at any time challenged or questioned in a writing delivered to Street
\nthe legal right of Street to design, manufacture, offer or sell any of its
\nproducts or services in the present manner or style thereof. As of the date
\nhereof, to the Knowledge of Street, no event has occurred, and no claim, dispute
\nor other condition or circumstance exists, that will, or that would reasonably
\nbe expected to, cause or provide a bona fide basis for a director or executive
\nofficer of Street to seek indemnification from Street.<\/p>\n
Brokers’ and Finders’ Fees.<\/p>\n
Street has not incurred, nor will it incur, directly or indirectly, any
\nliability for brokerage or finders’ fees or agents’ commissions or any similar
\ncharges in connection with this Agreement or any transaction contemplated
\nhereby.<\/p>\n
Interested Party Transactions.<\/p>\n
Other than as set forth in Part 2.13 of the Street Schedules, no officer or
\ndirector of Street (nor, to the Knowledge of Street, any shareholder of Street
\nor any ancestor (up to once removed), sibling, descendant (up to once removed),
\nspouse, parent, subsidiary or other affiliate of any officer, director or
\nshareholder, or any trust, partnership or corporation in which any of such
\npersons has or has had an interest), has or has had, directly or indirectly, (i)
\nany material interest in any entity that furnished or sold, or furnishes or
\nsells, services, products or technology that Street furnishes or sells, or
\nproposes to furnish or sell, (ii) any material interest in any entity that
\npurchases from or sells or furnishes to Street any goods or services or (iii) a
\nmaterial beneficial interest in any Contract other than employment or consulting
\nagreements with officers of Street and indemnification agreements with directors
\nand officers of Street, in each case previously provided or made available to
\nSelect; <\/p>\n
-20-<\/p>\n
provided, however, that ownership of no more than one percent (1%) of the
\noutstanding voting stock of a publicly traded corporation and no more than
\npercent (5%) of the outstanding equity of any other entity shall not be deemed a
\nmaterial “interest in any entity” for purposes of this Section 2.13.<\/p>\n
Employee Benefit Plans.<\/p>\n
(a) Definitions. With the exception of the definition of “Affiliate”
\nset forth in Section 2.14(a)(i) below (which definition shall apply only to this
\nSection 2.14), for purposes of this Agreement, the following terms shall have
\nthe meanings set forth below:<\/p>\n
(i) “Affiliate” shall mean any other person or entity
\nunder common control with Street within the meaning of Section 414(b), (c), (m)
\nor (o) of the Code and the regulations issued thereunder;<\/p>\n
(ii) “Street Employee Plan” shall mean any plan, program,
\npolicy, practice, contract, agreement or other arrangement providing for
\ncompensation, severance, termination pay, performance awards, stock or stock-
\nrelated awards, fringe benefits or other employee benefits or remuneration of
\nany kind, whether written or unwritten or otherwise, funded or unfunded,
\nincluding without limitation, each “employee benefit plan,” within the meaning
\nof Section 3(3) of ERISA which is or has been maintained, contributed to, or
\nrequired to be contributed to, by Street or any Affiliate for the benefit of any
\nEmployee;<\/p>\n
(iii) “COBRA” shall mean the Consolidated Omnibus Budget
\nReconciliation Act of 1985, as amended;<\/p>\n
(iv) “DOL” shall mean the United States Department of
\nLabor;<\/p>\n
(v) “Employee” shall mean any current, former, or retired
\nemployee, officer, or director of Street or any Affiliate;<\/p>\n
(vi) “Employee Agreement” shall mean each management,
\nemployment, severance, consulting, relocation, repatriation, expatriation,
\nvisas, work permit or similar agreement or contract between Street or any
\nAffiliate and any Employee or consultant;<\/p>\n
(vii) “ERISA” shall mean the Employee Retirement Income
\nSecurity Act of 1974, as amended;<\/p>\n
(viii) “FMLA” shall mean the Family Medical Leave Act of
\n1993, as amended;<\/p>\n
(ix) “International Employee Plan” shall mean each Street
\nEmployee Plan that has been adopted or maintained by Street, whether informally
\nor formally, for the benefit of Employees outside the United States;<\/p>\n
-21-<\/p>\n
(x) “IRS” shall mean the Internal Revenue Service;<\/p>\n
(xi) “Multiemployer Plan” shall mean any multiemployer
\nplan as defined in Section 4001(a)(3) of ERISA;<\/p>\n
(xii) “PBGC” shall mean the Pension Benefit Guaranty
\nCorporation; and<\/p>\n
(xiii) “Pension Plan” shall mean each Street Employee Plan
\nwhich is an “employee pension benefit plan,” within the meaning of Section 3(2)
\nof ERISA.<\/p>\n
(b) Schedule. Part 2.14(b) of the Street Schedules contains an
\naccurate and complete list of each Street Employee Plan and each Employee
\nAgreement. Street does not have any plan or commitment to establish any new
\nStreet Employee Plan, to modify any Street Employee Plan or Employee Agreement
\n(except to the extent required by law or to conform any such Street Employee
\nPlan or Employee Agreement to the requirements of any applicable law, in each
\ncase as previously disclosed to Select in writing, or as required by this
\nAgreement), or to enter into any Street Employee Plan or Employee Agreement, nor
\ndoes it have any intention or commitment to do any of the foregoing.<\/p>\n
(c) Documents. Street has provided or made available to Select: (i)
\ncorrect and complete copies of all documents embodying to each Street Employee
\nPlan and each Employee Agreement including all amendments thereto and written
\ninterpretations thereof; (ii) the most recent annual actuarial valuations, if
\nany, prepared for each Street Employee Plan; (iii) the three (3) most recent
\nannual reports (Form Series 5500 and all schedules and financial statements
\nattached thereto), if any, required under ERISA or the Code in connection with
\neach Street Employee Plan or related trust; (iv) if Street Employee Plan is
\nfunded, the most recent annual and periodic accounting of Street Employee Plan
\nassets; (v) the most recent summary plan description together with the summary
\nof material modifications thereto, if any, required under ERISA with respect to
\neach Street Employee Plan; (vi) all IRS determination, opinion, notification and
\nadvisory letters, and rulings relating to Street Employee Plans and copies of
\nall applications and correspondence to or from the IRS or the DOL with respect
\nto any Street Employee Plan; (vii) all material written agreements and contracts
\nrelating to each Street Employee Plan, including, but not limited to,
\nadministrative service agreements, group annuity contracts and group insurance
\ncontracts; (viii) all communications material to any Employee or Employees
\nrelating to any Street Employee Plan and any proposed Street Employee Plans, in
\neach case, relating to any amendments, terminations, establishments, increases
\nor decreases in benefits, acceleration of payments or vesting schedules or other
\nevents which would result in any material liability to Street; (ix) all COBRA
\nforms and related notices; and (x) all registration statements and prospectuses
\nprepared in connection with each Street Employee Plan.<\/p>\n
(d) Employee Plan Compliance. (i) Street has performed in all
\nmaterial respects all obligations required to be performed by it under, is not
\nin default or violation of, and has no<\/p>\n
-22-<\/p>\n
Knowledge of any default or violation by any other party to each Street Employee
\nPlan, and each Street Employee Plan has been established and maintained in all
\nmaterial respects in accordance with its terms and in compliance with all
\napplicable laws, statutes, orders, rules and regulations, including but not
\nlimited to ERISA or the Code; (ii) each Street Employee Plan intended to qualify
\nunder Section 401(a) of the Code and each trust intended to qualify under
\nSection 501(a) of the Code has either received a favorable determination letter
\nfrom the IRS with respect to each such Plan as to its qualified status under the
\nCode, including all amendments to the Code effected by the Tax Reform Act of
\n1986 and subsequent legislation, or has remaining a period of time under
\napplicable Treasury regulations or IRS pronouncements in which to apply for such
\na determination letter and make any amendments necessary to obtain a favorable
\ndetermination; (iii) no “prohibited transaction,” within the meaning of Section
\n4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise exempt
\nunder Section 408 of ERISA or 4975 of the Code, has occurred with respect to any
\nStreet Employee Plan; (iv) there are no actions, suits or claims pending, or, to
\nthe Knowledge of Street, threatened or reasonably anticipated (other than
\nroutine claims for benefits) against any Street Employee Plan or against the
\nassets of any Street Employee Plan; (v) each Street Employee Plan can be
\namended, terminated or otherwise discontinued after the Effective Time in
\naccordance with its terms, without liability to Select, Street or any of its
\nAffiliates (other than ordinary administration expenses typically incurred in a
\ntermination event); (vi) there are no audits, inquiries or proceedings pending
\nor, to the Knowledge of Street or any Affiliates, threatened by the IRS or DOL
\nwith respect to any Street Employee Plan; and (vii) neither Street nor any
\nAffiliate is subject to any penalty or tax with respect to any Street Employee
\nPlan under Section 402(i) of ERISA or Sections 4975 through 4980 of the Code.<\/p>\n
(e) Pension Plans. Street does not now, nor has it ever, maintained,
\nestablished, sponsored, participated in, or contributed to, any Pension Plan
\nwhich is subject to Title IV of ERISA or Section 412 of the Code.<\/p>\n
(f) Multiemployer Plans. At no time has Street contributed to or been
\nrequested to contribute to any Multiemployer Plan.<\/p>\n
(g) No Post-Employment Obligations. No Street Employee Plan provides,
\nor has any liability to provide, retiree life insurance, retiree health or other
\nretiree employee welfare benefits to any person for any reason, except as may be
\nrequired by COBRA or other applicable statute, and Street has never represented,
\npromised or contracted (whether in oral or written form) to any Employee (either
\nindividually or to Employees as a group) or any other person that such
\nEmployee(s) or other person would be provided with retiree life insurance,
\nretiree health or other retiree employee welfare benefit, except to the extent
\nrequired by statute.<\/p>\n
(h) Neither Street nor any Affiliate has, prior to the Effective
\nTime, and in any material respect, violated any of the health care continuation
\nrequirements of COBRA, the requirements of FMLA or any similar provisions of
\nstate law applicable to its Employees.<\/p>\n
-23-<\/p>\n
(i) Effect of Transaction. The execution of this Agreement and the
\nconsummation of the transactions contemplated hereby will not (either alone or
\nupon the occurrence of any additional or subsequent events) constitute an event
\nunder any Street Employee Plan or Employee Agreement that will or may result in
\nany payment (whether of severance pay or otherwise), acceleration, forgiveness
\nof indebtedness, vesting, distribution, increase in benefits or obligation to
\nfund benefits with respect to any Employee.<\/p>\n
(j) Employment Matters. Street: (i) is in compliance in all material
\nrespects with all applicable foreign, federal, state and local laws, rules and
\nregulations respecting employment, employment practices, terms and conditions of
\nemployment and wages and hours, in each case, with respect to Employees; (ii)
\nhas withheld all amounts required by law or by agreement to be withheld from the
\nwages, salaries and other payments to Employees; (iii) is not liable for any
\narrears of wages or any taxes or any penalty for failure to comply with any of
\nthe foregoing; and (iv) is not liable for any material payment to any trust or
\nother fund or to any governmental or administrative authority, with respect to
\nunemployment compensation benefits, social security or other benefits or
\nobligations for Employees (other than routine payments to be made in the normal
\ncourse of business and consistent with past practice). There are no pending,
\nthreatened or reasonably anticipated claims or actions against Street under any
\nworker’s compensation policy or long-term disability policy. To Street’s
\nKnowledge, no employee of Street has violated any employment contract,
\nnondisclosure agreement or noncompetition agreement by which such employee is
\nbound due to such employee being employed by Street and disclosing to Street or
\nusing trade secrets or proprietary information of any other person or entity.<\/p>\n
(k) Labor. No work stoppage or labor strike against Street is
\npending, threatened or reasonably anticipated. Street has no Knowledge of any
\nactivities or proceedings of any labor union to organize any Employees. There
\nare no actions, suits, claims, labor disputes or grievances pending, or, to the
\nKnowledge of Street, threatened or reasonably anticipated relating to any labor,
\nsafety or discrimination matters involving any Employee, including, without
\nlimitation, charges of unfair labor practices or discrimination complaints,
\nwhich, if adversely determined, would, individually or in the aggregate, result
\nin any material liability to Street. Street has not engaged in any unfair labor
\npractices within the meaning of the National Labor Relations Act. Street is not
\npresently, nor has it been in the past, a party to, or bound by, any collective
\nbargaining agreement or union contract with respect to Employees and no
\ncollective bargaining agreement is being negotiated by Street.<\/p>\n
(l) International Employee Plan. Street does not now, nor has it ever
\nhad the obligation to, maintain, establish, sponsor, participate in, or
\ncontribute to any International Employee Plan.<\/p>\n
Environmental Matters.<\/p>\n
(a) Hazardous Material. Except as would not result in material
\nliability to Street, no underground storage tanks and no amount of any substance
\nthat has been designated by any<\/p>\n
-24-<\/p>\n
Governmental Entity or by applicable federal, state or local law to be
\nradioactive, toxic, hazardous or otherwise a danger to health or the
\nenvironment, including, without limitation, PCBs, asbestos, petroleum, urea-
\nformaldehyde and all substances listed as hazardous substances pursuant to the
\nComprehensive Environmental Response, Compensation, and Liability Act of 1980,
\nas amended, or defined as a hazardous waste pursuant to the United States
\nResource Conservation and Recovery Act of 1976, as amended, and the regulations
\npromulgated pursuant to said laws, but excluding office and janitorial supplies
\n(a “Hazardous Material”) are present, as a result of the actions of Street or
\nany affiliate of Street, or, to Street’s Knowledge, as a result of any actions
\nof any third party or otherwise, in, on or under any property, including the
\nland and the improvements, ground water and surface water thereof, that Street
\nor any of its subsidiaries has at any time owned, operated, occupied or leased.<\/p>\n
(b) Hazardous Materials Activities. Except as would not result in a
\nmaterial liability to Street (in any individual case or in the aggregate) (i)
\nStreet has not transported, stored, used, manufactured, disposed of, released or
\nexposed its employees or others to Hazardous Materials in violation of any law
\nin effect on or before the Closing Date and (ii) Street has not disposed of,
\ntransported, sold, used, released, exposed its employees or others to or
\nmanufactured any product containing a Hazardous Material (collectively
\n“Hazardous Materials Activities”) in violation of any rule, regulation, treaty
\nor statute promulgated by any Governmental Entity in effect prior to or as of
\nthe date hereof to prohibit, regulate or control Hazardous Materials or any
\nHazardous Material Activity.<\/p>\n
(c) Permits. Street holds all environmental approvals, permits,
\nlicenses, clearances and consents (the “Street Environmental Permits”) necessary
\nfor the conduct of Street’s and its subsidiaries’ Hazardous Material Activities
\nand other businesses of Street and its subsidiaries as such activities and
\nbusinesses are currently being conducted.<\/p>\n
(d) Environmental Liabilities. No action, proceeding, revocation
\nproceeding, amendment procedure, writ or injunction is pending, and to the
\nKnowledge of Street, no action, proceeding, revocation proceeding, amendment
\nprocedure, writ or injunction has been threatened by any Governmental Entity
\nagainst Street or any of its subsidiaries in a writing delivered to Street
\nconcerning any Street Environmental Permit, Hazardous Material or any Hazardous
\nMaterials Activity of Street. Street has no Knowledge of any fact or
\ncircumstance which would involve Street in any environmental litigation or
\nimpose upon Street any material environmental liability.<\/p>\n
Year 2000 Compliance.<\/p>\n
Except as disclosed in Part 2.16 of the Street Schedules, Street’s products
\nand internal systems have been designed to ensure date and time entry
\nrecognition, calculations that accommodate same century and multi-century
\nformulas and date values, leap year recognition and calculations, and date data
\ninterface values that reflect the century. Street’s products and internal
\nsystems manage and manipulate data involving dates and times, including single
\ncentury formulas<\/p>\n
-25-<\/p>\n
multi-century formulas, and do not cause an abnormal ending scenario within the
\napplication or generate incorrect values or invalid results involving such
\ndates.<\/p>\n
Agreements, Contracts and Commitments.<\/p>\n
Except as otherwise set forth in Part 2.17 of the Street Schedules, as of
\nthe date hereof Street is not a party to or bound by:<\/p>\n
(a) any employment or consulting agreement, contract or commitment
\ncurrently in force with any officer or director or higher level employee or
\nmember of Street’s Board of Directors, other than those that are terminable by
\nStreet or any of its subsidiaries on no more than thirty (30) days’ notice
\nwithout liability or financial obligation, except to the extent general
\nprinciples of wrongful termination law may limit Street’s ability to terminate
\nemployees at will;<\/p>\n
(b) any agreement of indemnification or any guaranty by Street
\ncurrently in force other than any agreement of indemnification entered into in
\nconnection with the sale or license of software products in the ordinary course
\nof business;<\/p>\n
(c) any agreement, contract or commitment containing any covenant
\ncurrently in force limiting in any respect the right of Street to engage in any
\nline of business or to compete with any person or granting any exclusive
\ndistribution rights;<\/p>\n
(d) any agreement, contract or commitment currently in force relating
\nto the disposition or acquisition by Street after the date of this Agreement of
\na material amount of assets not in the ordinary course of business or pursuant
\nto which Street has any material ownership interest in any corporation,
\npartnership, joint venture or other business enterprise other than Street’s
\nsubsidiaries;<\/p>\n
(e) any joint marketing or development agreement currently in force
\nunder which Street or any of its subsidiaries have continuing material
\nobligations to jointly market any product, technology or service and which may
\nnot be canceled without penalty upon notice of ninety (90) days or less, or any
\nmaterial agreement pursuant to which Street has continuing material obligations
\nto jointly develop any intellectual property that will not be owned, in whole or
\nin part, by Street and which may not be canceled without penalty upon notice of
\nninety (90) days or less;<\/p>\n
(f) any agreement, contract or commitment currently in force to
\nprovide source code to any third party for any product or technology that is
\nmaterial to Street;<\/p>\n
(g) any agreement or plan currently in force, including, without
\nlimitation, any stock option plan, stock appreciation right plan or stock
\npurchase plan, any of the benefits of which will be increased, or the vesting of
\nbenefits of which will be accelerated, by the occurrence of any of the
\ntransactions contemplated by this Agreement or the value of any of the benefits
\nof which will be calculated on the basis of any of the transactions contemplated
\nby this Agreement;<\/p>\n
-26-<\/p>\n
(h) any agreement, contract or commitment currently in force to sell
\nor distribute any Street products, service or technology except agreements with
\ndistributors or sales representatives in the normal course of business
\ncancelable without penalty upon notice of ninety (90) days or less and
\nsubstantially in the form previously provided or made available to Select;<\/p>\n
(i) any mortgages, indentures, guarantees, loans or credit agreements,
\nsecurity agreements or other agreements or instruments currently in force
\nrelating to the borrowing of money or extension of credit;<\/p>\n
(j) any settlement agreement entered into within two (2) years prior
\nto the date of this Agreement; or<\/p>\n
(k) any other agreement, contract or commitment that has a value of
\n$25,000 or more individually.<\/p>\n
Neither Street, nor to Street’s Knowledge any other party to a material
\nContract, is in breach, violation or default under, and Street has not received
\nwritten notice that it has breached, violated or defaulted under, any of the
\nmaterial terms or conditions of any material Contract to which Street is bound,
\nin such a manner as would permit any other party to cancel or terminate any such
\nmaterial Contract, or would permit any other party to seek material damages or
\nother remedies (for any or all of such breaches, violations or defaults, in the
\naggregate).<\/p>\n
Board Approval.<\/p>\n
The Board of Directors of Street has, as of the date of this Agreement, (i)
\ndetermined that the Merger is fair to, and in the best interests of Street and
\nthe Street Shareholders, (ii) approved and deemed advisable, subject to
\nshareholder approval, this Agreement and the transactions contemplated hereby
\nand (iii) determined to recommend that the Street Shareholders approve and adopt
\nthis Agreement and approve the Merger.<\/p>\n
Insurance.<\/p>\n
Street maintains insurance policies and fidelity bonds covering the assets,
\nbusiness, equipment, properties, operations, employees, officers and directors
\nof Street (collectively, the “Insurance Policies”) which are of the type and in
\namounts customarily carried by persons conducting businesses similar to those of
\nStreet. There is no material claim by Street pending under any of the material
\nInsurance Policies as to which coverage has been questioned, denied or disputed
\nby the underwriters of such policies or bonds.<\/p>\n
-27-<\/p>\n
ARTICLE 3.<\/p>\n
Representations and Warranties of Select and Sub<\/p>\n
As of the date hereof and as of the Closing Date, Select and Sub represent
\nand warrant to Street, subject to the exceptions specifically disclosed in
\nwriting in the disclosure letter and referencing a specific representation
\nsupplied by Select and Sub to Street dated as of the date hereof and certified
\nby a duly authorized officer of Select (the “SELECT SCHEDULES”), as follows:<\/p>\n
Organization of Select.<\/p>\n
(a) Except as set forth on Part 3.1(a) of the Select Schedules, Select
\ndoes not own any capital stock of, or any equity interest of any nature in, any
\nother entity, except for passive investments in equity interests of public
\ncompanies as part of the cash management program of Select. Select has not
\nagreed and is not obligated to make, nor bound by any contract under which
\ncontract it may become obligated to make, any future investment in or capital
\ncontribution to any other entity. Select has not, at any time, been a general
\npartner of any general partnership, limited partnership or other entity.<\/p>\n
(b) Select and each of its subsidiaries is a corporation duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its incorporation and has all necessary power and authority: (i)
\nto conduct its business in the manner in which its business is currently being
\nconducted; (ii) to own and use its assets in the manner in which its assets are
\ncurrently owned and used; and (iii) to perform its obligations under all
\nContracts by which it is bound.<\/p>\n
(c) Each of Select and its subsidiaries is qualified to do business as
\na foreign corporation, and is in good standing, under the laws of all
\njurisdictions where the nature of its business requires such qualification and
\nwhere the failure to so qualify would have a Material Adverse Effect on Select.<\/p>\n
(d) Select has delivered or made available to Street a true and
\ncorrect copy of the Certificate of Incorporation and Bylaws of Select and
\nsimilar governing instruments of each of its subsidiaries, each as amended to
\ndate (collectively, the “Select Charter Documents”), and each such instrument is
\nin full force and effect. Select is not in violation of any of the provisions
\nof Select Charter Documents.<\/p>\n
(e) Select has delivered or made available to Street all proposed or
\nconsidered amendments to Select Charter Documents.<\/p>\n
Select Capital Structure.<\/p>\n
(a) The authorized capital stock of Select consists of: (i)
\n90,000,000 shares of Common Stock (“Select Common Stock”), of which 8,479,580
\nshares have been issued and are <\/p>\n
-28-<\/p>\n
outstanding as of April 22, 1999; and (ii) 10,000,000 shares of Preferred Stock
\n(“Select Preferred Stock”), of which 5,288,163 shares have been issued and are
\noutstanding as of the date of this Agreement. The Select Preferred Stock is
\ndesignated as follows: (i) 1,378,000 shares of Series A Preferred Stock, all of
\nwhich are outstanding as of the date of this Agreement.; (ii) 190,336 shares of
\nSeries B Preferred Stock, all of which are outstanding as of the date of this
\nAgreement.; (iii) 614,374 shares of Series C Preferred Stock, all of which are
\noutstanding as of the date of this Agreement.; (iv) 681,201 shares of Series D
\nPreferred Stock, all of which are outstanding as of the date of this Agreement.;
\n(v) 325,000 shares of Series E Preferred Stock, all of which are outstanding as
\nof the date of this Agreement.; (vi) 2,100,000 shares of Series F Preferred
\nStock, 1,758,297 of which are outstanding as of the date of this Agreement.; and
\n(vii) 340,955 shares of Series G Preferred Stock, all of which are outstanding
\nas of the date of this Agreement. All of the outstanding shares of Select Common
\nStock and Select Preferred Stock have been duly authorized and validly issued,
\nand are fully paid and nonassessable. Part 3.2(b) of the Select Schedules sets
\nforth information regarding outstanding warrants and other outstanding rights to
\npurchase Select Common Stock and Select Preferred Stock.<\/p>\n
(b) As of April 22, 1999: (i) 1,634,266 shares of Select Common Stock
\nare subject to issuance pursuant to outstanding options to purchase Common Stock
\nunder Select’s stock option plans; and (ii) 541,000 shares of Common Stock are
\nreserved for future issuance under Select’s stock option plans. (Stock options
\ngranted by Select pursuant to Select’s stock option plans are referred to in
\nthis Agreement as “Select Options”). Select has made available to Street
\naccurate and complete copies of all stock option plans pursuant to which Select
\nhas granted stock options that are currently outstanding and the form of all
\nstock option agreements evidencing such options. All shares of Select Common
\nStock subject to issuance as aforesaid, upon issuance on the terms and
\nconditions specified in the instruments pursuant to which they are issuable,
\nwould be duly authorized, validly issued, fully paid and nonassessable.<\/p>\n
(c) All outstanding shares of Select Common Stock and Select Preferred
\nStock, all outstanding Select Options, and all outstanding shares of capital
\nstock of each subsidiary of Select have been issued and granted in compliance
\nwith (i) all applicable securities laws and other applicable Legal Requirements
\nand (ii) all requirements set forth in applicable Contracts.<\/p>\n
Obligations With Respect to Capital Stock.<\/p>\n
Except as set forth in Section 3.2 above and in Part 3.3 of the Select
\nSchedules, there are no equity securities, partnership interests or similar
\nownership interests of any class of Select equity security, or any securities
\nexchangeable or convertible into or exercisable for such equity securities,
\npartnership interests or similar ownership interests, issued, reserved for
\nissuance or outstanding. Except for securities Select owns free and clear of
\nall claims and Encumbrances, directly or indirectly through one or more
\nsubsidiaries, and except for shares of capital stock or other similar ownership
\ninterests of certain subsidiaries of Select that are owned by certain nominee
\nequity holders as required by the applicable law of the jurisdiction of
\norganization of such subsidiaries (which shares or other interests do not
\nmaterially affect Select’s control of such subsidiaries), there are no <\/p>\n
-29-<\/p>\n
equity securities, partnership interests or similar ownership interests of any
\nclass of equity security of any subsidiary of Select, or any security
\nexchangeable or convertible into or exercisable for such equity securities,
\npartnership interests or similar ownership interests, issued, reserved for
\nissuance or outstanding. Except as set forth in Section 3.2 above and in Part
\n3.3 of the Select Schedules, there are no subscriptions, options, warrants,
\nequity securities, partnership interests or similar ownership interests, calls,
\nrights (including preemptive rights), commitments or agreements of any character
\nto which Select or any of its subsidiaries is a party or by which it is bound
\nobligating Select or any of its subsidiaries to issue, deliver or sell, or cause
\nto be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or
\ncause the repurchase, redemption or acquisition of, any shares of capital stock,
\npartnership interests or similar ownership interests of Select or any of its
\nsubsidiaries or obligating Select or any of its subsidiaries to grant, extend,
\naccelerate the vesting of or enter into any such subscription, option, warrant,
\nequity security, call, right, commitment or agreement. As of the date of this
\nAgreement, except as contemplated by this Agreement and except as set forth in
\nPart 3.3 of the Select Schedules, there are no registration rights and there is
\nno voting trust, proxy, rights plan, antitakeover plan or other agreement or
\nunderstanding to which Select is a party or by which it is bound with respect to
\nany equity security of any class of Select or with respect to any equity
\nsecurity, partnership interest or similar ownership interest of any class of any
\nof its subsidiaries.<\/p>\n
Authority; Non-Contravention.<\/p>\n
(a) Select has all requisite corporate power and authority to enter
\ninto this Agreement and to consummate the transactions contemplated hereby. The
\nexecution and delivery of this Agreement and the consummation of the
\ntransactions contemplated hereby have been duly authorized by all necessary
\ncorporate action on the part of Select and its subsidiaries, subject only to the
\nfiling of the Merger Agreement and Restated Certificate (as defined below)
\npursuant to California Law and Delaware Law, as applicable. This Agreement has
\nbeen duly executed and delivered by Select and Sub, assuming execution and
\ndelivery by Street, constitutes a valid and binding obligation of Select and
\nSub, enforceable against Select and Sub in accordance with its terms, except as
\nenforceability may be limited by bankruptcy and other similar laws and general
\nprinciples of equity. The execution and delivery of this Agreement by Select
\nand Sub do not, and the performance of this Agreement by Select and Sub will
\nnot, (i) conflict with Select Charter Documents or the Charter Documents of its
\nsubsidiaries, subject to obtaining the approval of the Select stockholders of
\nthe Restated Certificate as required by the Select Charter Documents and
\napplicable law, (ii) conflict with or violate any law, rule, regulation, order,
\njudgment or decree applicable to Select or any of its subsidiaries or by which
\nSelect or any of its subsidiaries or any of their respective properties are
\nbound or affected, subject to compliance with the requirements set forth in
\nSection 3.4(b) below or (iii) result in any material breach of or constitute a
\nmaterial default (or an event that with notice or lapse of time or both would
\nbecome a material default) under, or impair Select’s rights or alter the rights
\nor obligations of any third party under, or give to others any rights of
\ntermination, amendment, acceleration or cancellation of, or result in the
\ncreation of a material lien or Encumbrance on any of the material properties or
\nassets of Select or any of its subsidiaries pursuant to, any material note,
\nbond, mortgage, indenture, contract, agreement, lease, <\/p>\n
-30-<\/p>\n
license, permit, franchise, concession, or other instrument or obligation to
\nwhich Select or any of its subsidiaries is a party or by which Select or any of
\nits subsidiaries or its or any of their respective assets are bound or affected.<\/p>\n
(b) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with any Governmental Entity, is required to be obtained
\nor made by Select or any of its subsidiaries in connection with the execution
\nand delivery of this Agreement or the consummation of the Merger, except for (i)
\nthe filing of the Merger Agreement with the Secretary of State of the State of
\nCalifornia and the Secretary of State of the State of Delaware, (ii) such
\nconsents, approvals, orders, authorizations, registrations, declarations and
\nfilings as may be required under applicable federal, foreign and state
\nsecurities (or related) laws, the Hart-Scott-Rodino Antitrust Improvements Act
\nof 1976, as amended (the “HSR Act”) and the securities or antitrust laws of any
\nforeign country and (iii) such other consents, authorizations, filings,
\napprovals and registrations which if not obtained or made would not be material
\nto Select or have a material adverse effect on the ability of the parties hereto
\nto consummate the Merger.<\/p>\n
Select Financial Statements.<\/p>\n
Part 3.5 of the Select Schedules sets forth Select’s unaudited consolidated
\nbalance sheet as of December 31, 1998 and the related consolidated unaudited
\nstatements of operations and cash flow for the twelve month period ended
\nDecember 31, 1998 (the “Select Year-End Financials”) and Select’s unaudited
\nbalance sheet as of March 31, 1999 (the “Select Current Balance Sheet”) and the
\nrelated unaudited statements of operations and cash flow for the three months
\nthen ended (together with the Select Year-End Financials, the “Select
\nFinancials”). The Select Financials are correct in all material respects and
\nhave been prepared in accordance with GAAP, applied on a basis consistent
\nthroughout the periods indicated and consistent with each other except as may be
\nindicated therein. The Select Financials present fairly the financial
\ncondition, operating results and cash flows of Select as of the dates and during
\nthe periods indicated therein, subject to normal year-end adjustments, which
\nwill not be material in amount or significance.<\/p>\n
Absence of Certain Changes or Events.<\/p>\n
Since the date of Select Current Balance Sheet until the date hereof there
\nhas not been: (i) any Material Adverse Effect on Select , (ii) any declaration,
\nsetting aside or payment of any dividend on, or other distribution (whether in
\ncash, stock or property) in respect of, any of Select’s or any of its
\nsubsidiaries’ capital stock, or any purchase, redemption or other acquisition by
\nSelect of any of Select’s capital stock or any other securities of Select or its
\nsubsidiaries or any options, warrants, calls or rights to acquire any such
\nshares or other securities except for repurchases from employees following their
\ntermination pursuant to the terms of their pre-existing stock option or purchase
\nagreements, (iii) any split, combination or reclassification of any of Select’s
\nor any of its subsidiaries’ capital stock, (iv) any granting by Select or any of
\nits subsidiaries of any increase in compensation or fringe benefits, except for
\nnormal increases of cash compensation in the ordinary course of business
\nconsistent with past practice, or any payment by Select or any of its
\nsubsidiaries <\/p>\n
-31-<\/p>\n
of any bonus, except for bonuses made in the ordinary course of business
\nconsistent with past practice, or any granting by Select or any of its
\nsubsidiaries of any increase in severance or termination pay or any entry by
\nSelect or any of its subsidiaries into any currently effective employment,
\nseverance, termination or indemnification agreement or any agreement the
\nbenefits of which are contingent or the terms of which are materially altered
\nupon the occurrence of a transaction involving Select of the nature contemplated
\nhereby, (v) any material change by Select in its accounting methods, principles
\nor practices, except as required by concurrent changes in GAAP or (vi) any
\nrevaluation by Select or any of its subsidiaries of any of its assets,
\nincluding, without limitation, writing down the value of capitalized inventory
\nor writing off notes or accounts receivable other than in the ordinary course of
\nbusiness.<\/p>\n
Taxes.<\/p>\n
(a) Tax Returns and Audits.<\/p>\n
(i) Select and each of its subsidiaries have timely filed
\nall Returns relating to Taxes required to be filed by Select and each of its
\nsubsidiaries with any Tax authority, except such Returns which are not material
\nto Select, and have paid all Taxes shown to be due on such Returns.<\/p>\n
(ii) Select and each of its subsidiaries as of the
\nEffective Time will have withheld all federal and state income taxes, Taxes
\npursuant to FICA, Taxes pursuant to the FUTA and other Taxes required to be
\nwithheld.<\/p>\n
(iii) Neither Select nor any of its subsidiaries has been
\ndelinquent in the payment of any Tax nor is there any material Tax deficiency
\noutstanding, proposed or assessed against Select or any of its subsidiaries, nor
\nhas Select or any of its subsidiaries executed any unexpired waiver of any
\nstatute of limitations on or extending the period for the assessment or
\ncollection of any material Tax.<\/p>\n
(iv) No audit or other examination of any Return of Select
\nor any of its subsidiaries by any Tax authority is presently in progress, nor
\nhas Select or any of its subsidiaries been notified of any request for such an
\naudit or other examination.<\/p>\n
(v) No adjustment relating to any Returns filed by Select
\nor any of its subsidiaries has been proposed in writing formally or informally
\nby any Tax authority to Select or any of its subsidiaries or any representative
\nthereof.<\/p>\n
(vi) Neither Select nor any of its subsidiaries has any
\nliability for unpaid Taxes which has not been accrued for or reserved on Select
\nBalance Sheet, whether asserted or unasserted, contingent or otherwise, which is
\nmaterial to Select, other than any liability for unpaid Taxes that may have
\naccrued since the date of Select Balance Sheet in connection with the operation
\nof the business of Select and its subsidiaries in the ordinary course.<\/p>\n
-32-<\/p>\n
(vii) There is no contract, agreement, plan or arrangement
\nto which Select is a party as of the date of this Agreement, including but not
\nlimited to the provisions of this Agreement, covering any employee or former
\nemployee of Select or any of its subsidiaries that, individually or
\ncollectively, could give rise to the payment of any amount that would not be
\ndeductible pursuant to Sections 280G, 404 or 162(m) of the Code.<\/p>\n
(viii) Neither Select nor any of its subsidiaries has filed
\nany consent agreement under Section 341(f) of the Code or agreed to have Section
\n341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
\ndefined in Section 341(f)(4) of the Code) owned by Select.<\/p>\n
(ix) Neither Select nor any of its subsidiaries is party
\nto or has any obligation under any tax-sharing, tax indemnity or tax allocation
\nagreement or arrangement.<\/p>\n
(x) Except as may be required as a result of the Merger,
\nSelect and its subsidiaries have not been and will not be required to include
\nany adjustment in Taxable income for any Tax period (or portion thereof)
\npursuant to Section 481 or Section 263A of the Code or any comparable provision
\nunder state or foreign Tax laws as a result of transactions, events or
\naccounting methods employed prior to the Closing.<\/p>\n
(xi) None of Select’s or its subsidiaries’ assets are tax
\nexempt use property within the meaning of Section 168(h) of the Code.<\/p>\n
Title to Properties; Absence of Liens and Encumbrances.<\/p>\n
All of Select’s and its subsidiaries’ current leases with respect to
\nreal property are in full force and effect, are valid and effective in
\naccordance with their respective terms, and there is not, under any of such
\nleases, any existing default or event of default (or event which with notice or
\nlapse of time, or both, would constitute a default) that would give rise to a
\nmaterial claim. Other than the leaseholds created under real property leases,
\nand neither Select nor its subsidiaries owns any interest in real property.<\/p>\n
(b) Select and each of its subsidiaries has good and valid title to,
\nor, in the case of leased properties and assets, valid leasehold interests in,
\nall of its tangible properties and assets, real, personal and mixed, used or
\nheld for use in its business, free and clear of any Liens, except as reflected
\nin Select Financials and except for liens for taxes not yet due and payable,
\nstatutory liens and such Liens or other imperfections of title and encumbrances,
\nif any, which are not material in character, amount or extent, and which do not
\nmaterially detract from the value, or materially interfere with the present use,
\nof the property subject thereto or affected thereby.<\/p>\n
Intellectual Property. For the purposes of this Agreement, the following
\nterms have the following definitions:<\/p>\n
-33-<\/p>\n
“Select Intellectual Property” means any Intellectual Property that is
\n —————————-
\nowned by, or exclusively licensed to, Select or its subsidiaries.<\/p>\n
“Select Registered Intellectual Property” means all of the Registered
\n —————————————
\nIntellectual Property owned by, or filed in the name of, Select or its
\nsubsidiaries.<\/p>\n
(a) No material Select Intellectual Property or product or service of
\nSelect or its subsidiaries is subject to any proceeding or outstanding decree,
\norder, judgment, agreement, or stipulation restricting in any manner the use,
\ntransfer, or licensing thereof by Select or its subsidiaries, or which would
\naffect the validity, use or enforceability of such Select Intellectual Property.<\/p>\n
(b) Each material item of Select Registered Intellectual Property is
\nvalid and subsisting, all necessary registration, maintenance and renewal fees
\ncurrently due in connection with such Registered Intellectual Property have been
\nmade and all necessary documents, recordations and certificates in connection
\nwith such Registered Intellectual Property have been filed with the relevant
\npatent, copyright, trademark or other authorities in the United States or
\nforeign jurisdictions, as the case may be, for the purposes of maintaining such
\nRegistered Intellectual Property.<\/p>\n
(c) Select or its subsidiaries owns and has good and exclusive title
\nto, or has license (sufficient for the conduct of its business as currently
\nconducted and as currently proposed to be conducted) to, each material item of
\nSelect Intellectual Property or Intellectual Property used by Select or its
\nsubsidiaries free and clear of any lien or encumbrance (excluding licenses and
\nrelated restrictions); and Select or its subsidiaries is the exclusive owner of
\nall trademarks and trade names used in connection with the operation or conduct
\nof the business of Select or its subsidiaries, including the sale of any
\nproducts or the provision of any services by Select or its subsidiaries.<\/p>\n
(d) To the extent that any material Intellectual Property has been
\ndeveloped or created by a third party for Select or its subsidiaries, Select or
\nits subsidiaries has a written agreement with such third party with respect
\nthereto and Select or its subsidiaries thereby either (i) has obtained ownership
\nof, and is the exclusive owner of, or (ii) has obtained a license (sufficient
\nfor the conduct of its business as currently conducted and as currently proposed
\nto be conducted) to all such third party’s Intellectual Property in such work,
\nmaterial or invention by operation of law or by valid assignment, to the fullest
\nextent it is legally possible to do so.<\/p>\n
(e) The operation of the business of Select or its subsidiaries as
\nsuch business currently is conducted, including Select’s or its subsidiaries’
\ndesign, development, manufacture, marketing and sale of the products or services
\nof Select (including with respect to products currently under development) has
\nnot, does not and will not infringe or misappropriate the Intellectual Property
\nof any third party in any respect adverse to such party or constitute unfair
\ncompetition or trade practices under the laws of any jurisdiction.<\/p>\n
-34-<\/p>\n
(f) Select and its subsidiaries have not received notice from any
\nthird party that the operation of the business of Select or any act, product or
\nservice of Select or its subsidiaries, infringes or misappropriates the
\nIntellectual Property of any third party or constitutes unfair competition or
\ntrade practices under the laws of any jurisdiction.<\/p>\n
(g) To the Knowledge of Select or its subsidiaries, no person has or
\nis infringing or misappropriating, in any respect materially adverse to Select
\nor its subsidiaries, any Select Intellectual Property.<\/p>\n
(h) Select and its subsidiaries have taken reasonable steps to protect
\nSelect’s or its subsidiaries’ rights in Select’s or its subsidiaries’
\nconfidential information and trade secrets that it wishes to protect or any
\ntrade secrets or confidential information of third parties provided to Select or
\nits subsidiaries, and, without limiting the foregoing, Select or its
\nsubsidiaries has and enforces a policy requiring each employee and contractor to
\nexecute a proprietary information\/confidentiality agreement substantially in the
\nform provided to Street and all current and former employees and contractors of
\nSelect have executed such an agreement, except where the failure to do so is not
\nreasonably expected to be material to Select.<\/p>\n
Compliance; Permits; Restrictions.<\/p>\n
(a) Neither Select nor any of its subsidiaries is, in any material
\nrespect, in conflict with, or in default or in violation of (i) any law, rule,
\nregulation, order, judgment or decree applicable to Select or any of its
\nsubsidiaries or by which Select or any of its subsidiaries or any of their
\nrespective properties is bound or affected, or (ii) any material note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit, franchise or
\nother instrument or obligation to which Select or any of its subsidiaries is a
\nparty or by which Select or any of its subsidiaries or its or any of their
\nrespective properties is bound or affected, except for conflicts, violations and
\ndefaults that (individually or in the aggregate) would not cause Select or any
\nof its subsidiaries to lose any material benefit or incur any material
\nliability. No investigation or review by any Governmental Entity is pending or,
\nto Select’s Knowledge, has been threatened against Select or any of its
\nsubsidiaries, nor, to Select’s Knowledge, has any Governmental Entity indicated
\nan intention to conduct an investigation of Select or any of its subsidiaries.
\nThere is no material agreement, judgment, injunction, order or decree binding
\nupon Select or any of its subsidiaries which has or would reasonably be expected
\nto have the effect of prohibiting or materially impairing any business practice
\nof Select or any of its subsidiaries, any acquisition of material property by
\nSelect or any of its subsidiaries or the conduct of business by Select as
\ncurrently conducted.<\/p>\n
(b) Select and its subsidiaries hold, to the extent legally required,
\nall permits, licenses, variances, exemptions, orders and approvals from
\nGovernmental Entities that are material to and required for the operation of the
\nbusiness of Select as currently conducted (collectively, the “Select Permits”).
\nSelect and its subsidiaries are in compliance in all material respects with the
\nterms of Select Permits, except where the failure to be in compliance with the
\nterms of Select Permits would not be material to Select.<\/p>\n
-35-<\/p>\n
Litigation.<\/p>\n
Except as disclosed in Part 3.11 of the Select Schedules, there are no
\nclaims, suits, actions or proceedings pending or, to the Knowledge of Select,
\nthreatened against, relating to or affecting Select or any of its subsidiaries,
\nbefore any court, governmental department, commission, agency, instrumentality
\nor authority, or any arbitrator that seeks to restrain or enjoin the
\nconsummation of the transactions contemplated by this Agreement or which would
\nreasonably be expected, either singularly or in the aggregate with all such
\nclaims, suits, actions or proceedings, to be material and adverse to Select or
\nits subsidiaries. No Governmental Entity has at any time challenged or
\nquestioned in a writing delivered to Select the legal right of Select to design,
\nmanufacture, offer or sell any of its products or services in the present manner
\nor style thereof. As of the date hereof, to the Knowledge of Select, no event
\nhas occurred, and no claim, dispute or other condition or circumstance exists,
\nthat will, or that would reasonably be expected to, cause or provide a bona fide
\nbasis for a director or executive officer of Select or its subsidiaries to seek
\nindemnification from Select.<\/p>\n
Brokers’ and Finders’ Fees.<\/p>\n
Neither Select nor its subsidiaries have incurred, nor will they incur,
\ndirectly or indirectly, any liability for brokerage or finders’ fees or agents’
\ncommissions or any similar charges in connection with this Agreement or any
\ntransaction contemplated hereby.<\/p>\n
Environmental Matters.<\/p>\n
(a) Hazardous Material. Except as would not result in material
\nliability to Select, no Hazardous Materials are present, as a result of the
\nactions of Select or any of its subsidiaries or any affiliate of Select, or, to
\nSelect’s Knowledge, as a result of any actions of any third party or otherwise,
\nin, on or under any property, including the land and the improvements, ground
\nwater and surface water thereof, that Select or any of its subsidiaries has at
\nany time owned, operated, occupied or leased.<\/p>\n
(b) Hazardous Materials Activities. Except as would not result in a
\nmaterial liability to Select (in any individual case or in the aggregate) (i)
\nneither Select nor any of its subsidiaries has transported, stored, used,
\nmanufactured, disposed of, released or exposed its employees or others to
\nHazardous Materials in violation of any law in effect on or before the Closing
\nDate and (ii) neither Select nor any of its subsidiaries has disposed of,
\ntransported, sold, used, released, exposed its employees or others to or
\nmanufactured any product containing a Hazardous Material in violation of any
\nrule, regulation, treaty or statute promulgated by any Governmental Entity in
\neffect prior to or as of the date hereof to prohibit, regulate or control
\nHazardous Materials or any Hazardous Material Activity.<\/p>\n
(c) Permits. Select and its subsidiaries currently hold all
\nenvironmental approvals, permits, licenses, clearances and consents (the “Select
\nEnvironmental Permits”) necessary for the <\/p>\n
-36-<\/p>\n
conduct of Select’s and its subsidiaries’ Hazardous Material Activities and
\nother businesses of Select and its subsidiaries as such activities and
\nbusinesses are currently being conducted.<\/p>\n
(d) Environmental Liabilities. No action, proceeding, revocation
\nproceeding, amendment procedure, writ or injunction is pending, and to Select’s
\nKnowledge, no action, proceeding, revocation proceeding, amendment procedure,
\nwrit or injunction has been threatened by any Governmental Entity against Select
\nor any of its subsidiaries in a writing delivered to Select concerning any
\nSelect Environmental Permit, Hazardous Material or any Hazardous Materials
\nActivity of Select or any of its subsidiaries. Select is not aware of any fact
\nor circumstance which would involve Select or any of its subsidiaries in any
\nenvironmental litigation or impose upon Select any material environmental
\nliability.<\/p>\n
Year 2000 Compliance.<\/p>\n
Except as disclosed in Part 3.14 of the Select Schedules, Select’s products
\nand internal systems have been designed to ensure date and time entry
\nrecognition, calculations that accommodate same century and multi-century
\nformulas and date values, leap year recognition and calculations, and date data
\ninterface values that reflect the century. Select’s products and internal
\nsystems manage and manipulate data involving dates and times, including single
\ncentury formulas and multi-century formulas, and do not cause an abnormal ending
\nscenario within the application or generate incorrect values or invalid results
\ninvolving such dates.<\/p>\n
Agreements, Contracts and Commitments.<\/p>\n
As of the date of this Agreement, neither Select nor any of its
\nsubsidiaries, nor to Select’s Knowledge any other party to a material Contract
\nof Select or its subsidiaries, is in breach, violation or default under, and
\nneither Select nor any of its subsidiaries has received written notice that such
\nentity has breached, violated or defaulted under, any of the material terms or
\nconditions of any material Contract of Select or its subsidiaries in such a
\nmanner as would permit any other party to cancel or terminate any such material
\nContract of Select or its subsidiaries, or would permit any other party to seek
\nmaterial damages or other remedies (for any or all of such breaches, violations
\nor defaults, in the aggregate).<\/p>\n
3.16 Employee Benefit Plans.<\/p>\n
Part 3.16 of the Select Schedules contains an accurate and complete list of
\neach Select Employee Plan. “Select Employee Plan” means any plan, program,
\npolicy, practice, contract, agreement or other arrangement providing for
\ncompensation, severance, termination pay, performance awards, stock or stock-
\nrelated awards, fringe benefits or other employee benefits or remuneration of
\nany kind, whether written or unwritten or otherwise, funded or unfunded,
\nincluding without limitation, each “employee benefit plan,” within the meaning
\nof Section 3(3) of ERISA which is or has been maintained, contributed to, or
\nrequired to be contributed to, by Select.<\/p>\n
-37-<\/p>\n
Board Approval.<\/p>\n
The Board of Directors of Select has, as of the date of this Agreement,
\napproved the Merger and transactions contemplated hereby including without
\nlimitation the issuance of shares of Select Common Stock and Select Series H
\nPreferred Stock in connection with the Merger and the Certificate Amendment.<\/p>\n
ARTICLE 4.<\/p>\n
Conduct Prior to the Effective Time<\/p>\n
Conduct of Business of Street. During the period from the date of this
\nAgreement and continuing until the earlier of the termination of this Agreement
\nor the Effective Time, Street agrees to carry on Street’s business in the usual,
\nregular and ordinary course in substantially the same manner as heretofore
\nconducted, to pay the debts and Taxes of Street when due, to pay or perform
\nother obligations when due, and, to the extent consistent with such business,
\nuse all reasonable efforts consistent with past practice and policies to
\npreserve intact Street’s present business organization, keep available the
\nservices of Street’s present officers and employees and preserve Street’s
\nrelationships with customers, suppliers, distributors, licensors, licensees and
\nothers having business dealings with it, all with the goal of preserving
\nunimpaired Street’s goodwill and ongoing business at the Effective Time. Except
\nas expressly contemplated by Section 4.1 of the Street Schedules or as otherwise
\nexpressly provided in this Agreement, Street shall not, without the prior
\nwritten consent of Select:<\/p>\n
(a) other than performing the Contracts listed in the Street Schedules
\nin accordance with their terms existing on the date hereof, make any expenditure
\nor enter into any transaction exceeding $50,000 or any commitment or transaction
\nof the type described in Section 2.17 hereof;<\/p>\n
(b) sell, license or transfer to any person or entity of any rights to
\nany Street Intellectual Property or enter into any agreement with respect to the
\nStreet Intellectual Property with any person or entity other than in the
\nordinary course of business consistent with past practice;<\/p>\n
(c) amend or change its Articles of Incorporation or Bylaws;<\/p>\n
(d) revalue any of its assets, including without limitation writing
\ndown the value of inventory or writing off notes or accounts receivable other
\nthan in the ordinary course of business consistent with past practice;<\/p>\n
(e) issue, sell, grant, contract to issue, grant or sell, or authorize
\nthe issuance, delivery, sale or purchase of any shares of Street Capital Stock
\nor securities convertible into, or exercisable or exchangeable for, shares of
\nStreet Capital Stock, or any securities, warrants, options or <\/p>\n
-38-<\/p>\n
rights to purchase any of the foregoing, except for (i) issuances of Street
\nCapital Stock upon the exercise thereof or upon exercise or conversion of Street
\nConvertible Securities or Street Preferred Stock outstanding on the date of this
\nAgreement and (ii) issuances of Street Options in the ordinary course of
\nbusiness consistent with past practice;<\/p>\n
(f) declare, set aside or pay any dividends on or make any other
\ndistributions (whether in cash, stock or property) in respect of any Street
\nCapital Stock, or split, combine or reclassify any shares of Street Capital
\nStock, or issue or authorize the issuance of any other securities in respect of,
\nin lieu of or in substitution for shares of Street Capital Stock, or repurchase,
\nredeem, or otherwise acquire, directly or indirectly, any shares of Street
\nCapital Stock (or options, warrants or other rights convertible into,
\nexercisable or exchangeable therefor), except for (i) repurchases of Street
\nCapital Stock upon the termination of service of any service providers of Street
\nin accordance with the standard terms set forth in the agreements governing such
\nrepurchases, all of which agreements have been provided or made available to
\nSelect, (ii) conversion of Street Preferred Stock and (iii) exercises or
\nconversion of Street Convertible Securities;<\/p>\n
(g) grant any severance or termination pay (i) to any director or
\nofficer or (ii) to any employee, except payments made pursuant to standard
\nwritten agreements outstanding as of the date hereof and disclosed on the Street
\nSchedules, or increase in the salary or other compensation payable or to become
\npayable by Street to any of its officers, directors, employees or advisors, or
\ndeclare, pay or make any commitment or obligation of any kind for the payment by
\nStreet of a bonus or other additional salary or compensation to any such person,
\nor adopt or amend any employee benefit plan or enter into any employment
\ncontract other than in the ordinary course of business consistent with past
\npractice;<\/p>\n
(h) sell, lease, license or otherwise dispose of any of the assets or
\nproperties of Street which are not Intellectual Property other than in the
\nordinary course of business and consistent with past practices, including but
\nnot limited to the performance of obligations under contractual arrangements
\nexisting as of the date hereof set forth on the Street Schedules, or create any
\nsecurity interest in such assets or properties;<\/p>\n
(i) grant any loan to any person or entity except for accounts
\nreceivable in the ordinary course of business consistent with past practice,
\nincur any indebtedness or guarantee any indebtedness except for accounts payable
\nincurred in the ordinary course of business consistent with past practice, issue
\nor sell any debt securities, guarantee any debt securities of others, purchase
\nany debt securities of others or amend the terms of any outstanding agreements
\nrelated to borrowed money, except for advances to employees for travel and
\nbusiness expenses in the ordinary course of business consistent with past
\npractice;<\/p>\n
(j) amend in any material respect or otherwise modify (or agree to do
\nso), or violate the terms of any of the Contracts set forth or described in the
\nStreet Schedules or enter into any material Contract except in the ordinary
\ncourse of business consistent with past practice;<\/p>\n
-39-<\/p>\n
(k) commence or settle any litigation;<\/p>\n
(l) acquire or agree to acquire by merging or consolidating with, or
\nby purchasing any assets or equity securities or, or by any other manner, any
\nbusiness or any corporation, partnership, association or other business
\norganization or division thereof, or otherwise acquire or agree to acquire any
\nassets which are material, individually or in the aggregate, to Street’s
\nbusiness;<\/p>\n
(m) pay, discharge or satisfy, in an amount in excess of $25,000 (in
\nany one case) or $50,000 (in the aggregate), any claim, liability or obligation
\n(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
\nthe payment, discharge or satisfaction of liabilities in the ordinary course of
\nbusiness and in a manner consistent with past practice;<\/p>\n
(n) make or change any material election in respect of Taxes, adopt or
\nchange any accounting method in respect of Taxes, enter into any closing
\nagreement, settle any claim or assessment in respect of Taxes, or consent to any
\nextension or waiver of the limitation period applicable to any claim or
\nassessment in respect of Taxes;<\/p>\n
(o) take any action to accelerate the vesting schedule of any of the
\noutstanding Street Options or Street Capital Stock except as provided for in
\neach Street Employee Plan and each Employee Agreement which are in effect on the
\ndate hereof and listed in Part 2.14(b) of the Street Schedules;<\/p>\n
(p) terminate any employees other than for cause or encourage any
\nemployees to resign from Street;<\/p>\n
(q) enter into any contract, purchase order or other agreement
\npursuant to which Street would be required to book any amounts due thereunder as
\ndeferred revenue; or<\/p>\n
(r) take or agree in writing or otherwise to take any of the actions
\ndescribed in the preceding clauses (a) through (q) of this Section 4.1 or any
\nother action that would prevent Street from performing or cause Street not to
\nperform its covenants hereunder.<\/p>\n
Street Non-Solicitation. Until the earlier of (i) the Effective Time or
\n(ii) the date of termination of this Agreement pursuant to the provisions of
\nSection 8.1 hereof, Street shall not (nor shall Street permit any of Street’s
\nofficers, directors, agents, representatives or affiliates to) directly or
\nindirectly, take any of the following actions with any party other than Select
\nand its designees: (a) solicit, encourage, initiate or participate in any
\ninquiry, negotiations or discussions or enter into any agreement with respect to
\nany offer or proposal to acquire any portion of Street’s business and properties
\nor any shares of Street Capital Stock (whether or not outstanding except as
\nspecifically permitted by Section 4.1(e) above) whether by merger, purchase of
\nassets, tender offer or otherwise, or effect any such transaction, (b) disclose
\nany information not customarily disclosed to such person concerning Street’s
\nbusiness, technologies, or properties, or afford to any person or entity access
\nto its properties, technologies, books or records, not customarily afforded such
\naccess, (c) assist or<\/p>\n
-40-<\/p>\n
cooperate with any person to make any proposal to purchase all or any part of
\nthe Street Capital Stock or Street’s assets or (d) solicit, negotiate or enter
\ninto any agreement with any person providing for the acquisition of Street
\n(whether by way of merger, purchase of assets, tender offer or otherwise). In
\nthe event Street shall receive, prior to the Effective Time or the termination
\nof this Agreement, any offer or proposal, directly or indirectly, of the type
\nreferred to in clause (a) or (c) above, or any request for disclosure or access
\npursuant to clause (b) above, Street shall immediately inform Select as to any
\nsuch offer or proposal, including information as to the identity of the offeror
\nor the party making such offer or proposal and the specific terms of such offer
\nor proposal, as the case may be. The parties hereto agree that irreparable
\ndamage would occur in the event that the provisions of this Section 4.2 were not
\nperformed in accordance with their specific terms or were otherwise breached.
\nIt is accordingly agreed by Street that Select shall be entitled to seek an
\ninjunction or injunctions to prevent breaches of the provisions of this Section
\n4.2 and to enforce specifically the terms and provisions hereof in any court of
\nthe United States or any state having jurisdiction, this being in addition to
\nany other remedy to which Select may be entitled at law or in equity. Without
\nlimiting the foregoing, it is understood that any violation of the restrictions
\nset forth in this Section 4.2 by any officer, director or employee of Street or
\nany investment banker, attorney or other advisor or representative of Street
\nshall be deemed to be a breach of this Section 4.2 by Street.<\/p>\n
Conduct of Business of Select 4.4. During the period from the date of this
\nAgreement and continuing until the earlier of the termination of this Agreement
\nand the Effective Time, Select agrees to use all reasonable efforts consistent
\nwith past practice and policies to preserve intact Select’s present business
\norganization, keep available the services of Select’s present officers and
\nemployees and preserve Select’s relationships with customers, suppliers,
\ndistributors, licensors, licensees and others having business dealings with it,
\nall with the goal of preserving unimpaired Select’s goodwill and ongoing
\nbusiness at the Effective Time. Unless otherwise expressly provided in this
\nAgreement, Street shall not, without the prior consent of Street:<\/p>\n
(a) declare, accrue, set aside or pay any extraordinary dividend or
\nany other extraordinary distribution in respect of any shares of Select’s
\ncapital stock;<\/p>\n
(b) issue, sell, grant, contract to issue, grant or sell, or authorize
\nthe issuance, delivery, sale or purchase of any shares of Select capital stock
\nor securities convertible into, or exercisable or exchangeable for, shares of
\nSelect capital stock, or any securities, warrants, options or rights to purchase
\nany of the foregoing, except for (i) issuances of Select capital stock upon the
\nexercise of any of the foregoing (including without limitation shares of Select
\ncapital stock issued in connection with a possible combination of Select with
\none or more of its subsidiaries before or in connection with an initial public
\noffering) or upon exercise or conversion of convertible or exchangeable
\nsecurities or the conversion of shares of Select Preferred Stock outstanding on
\nthe date of this Agreement; (ii) issuances of options to purchase up to 600,000
\nshares of Select Common Stock to directors, officers, employees and consultants
\nof Select in the ordinary course of business consistent with past practice;
\n(iii) issuances of up to 400,000 shares of Select capital stock in <\/p>\n
-41-<\/p>\n
mergers, reorganizations, strategic business relationships and similar
\ntransactions; and (iv) issuances of Select capital stock in its initial public
\noffering; or<\/p>\n
(c) take any action with respect to the Select Charter Documents, if
\nin such case, the action is intended to have the effect of being materially
\nadverse to the Street Shareholders as compared to the existing Select
\nstockholders.<\/p>\n
In addition, in the event Select enters into negotiations to acquire any
\ncompany that is in the same line of business as Street, Select shall, subject to
\nconfidentiality obligations imposed by contract or applicable law, consult with
\nStreet regarding such acquisition.<\/p>\n
ARTICLE 5.<\/p>\n
Additional Agreements<\/p>\n
Fairness Hearing; Shareholder Approval.<\/p>\n
(a) As soon as reasonably practicable following the execution of this
\nAgreement, Select and Street shall prepare the necessary documents and Select
\nshall apply to obtain a permit (a “California Permit”) from the Commissioner of
\nCorporations of the State of California (after a hearing before such Department)
\npursuant to Section 25121 of the California Corporate Securities Law of 1968, so
\nthat the issuance of Select Common Stock in the Merger shall be exempt from
\nregistration under Section 3(a)(10) of the Securities Act of 1933, as amended
\n(the “Securities Act”). Street and Select will respond to any comments from the
\nCalifornia Department of Corporations and use their commercially reasonable
\nefforts to have the California Permit granted as soon as practical after such
\nfiling. As promptly as practical after the date of this Agreement, Select and
\nStreet shall prepare and make such filings as are required under applicable Blue
\nSky laws relating to the transactions contemplated by this Agreement.<\/p>\n
(b) As promptly as practicable after the receipt of a California
\nPermit, (i) Street shall submit this Agreement and the transactions contemplated
\nhereby, including without limitation the Merger, to the Street shareholders for
\napproval and adoption as provided by California Law and the Street Charter
\nDocuments; and (ii) Street shall solicit the consent of the requisite holders of
\nStreet Preferred Stock to validly approve the Rights Termination (as defined in
\nSection 6.2(i)). The materials submitted to the Street shareholders shall be
\nsubject to review and approval by Select and include information regarding
\nStreet, the terms of the Merger and this Agreement and the unanimous
\nrecommendation of the Board of Directors of Street in favor of the Merger, this
\nAgreement and the transactions contemplated hereby.<\/p>\n
(c) As promptly as practicable, Select shall submit the Certificate
\nAmendment to its stockholders for approval as provided by the Select Charter
\nDocuments and applicable law.<\/p>\n
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Restrictions on Transfer.<\/p>\n
(a) All certificates representing Select Common Stock and Select
\nSeries H Preferred Stock deliverable to any Street Shareholder pursuant to the
\nMerger Agreement and in connection with the Merger and any certificates
\nsubsequently issued with respect thereto or in substitution therefor (including
\nany shares issued or issuable in respect of any such shares upon any stock split
\nstock dividend, recapitalization, conversion or similar event) shall be stamped
\nor otherwise imprinted with legends in the following form:<\/p>\n
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
\n REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
\n SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
\n TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
\n EXEMPTION THEREFROM UNDER SAID ACT. THE TRANSFER
\n RESTRICTIONS APPLICABLE TO THESE SHARES ARE BINDING ON
\n TRANSFEREES OF THESE SHARES.<\/p>\n
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
\n PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED DIRECTLY OR
\n INDIRECTLY FOR SUCH PERIOD OF TIME NOT TO EXCEED ONE HUNDRED
\n EIGHTY (180) DAYS FOLLOWING THE EFFECTIVE DATE OF ANY
\n REGISTRATION STATEMENT OF THE ISSUER FILED UNDER THE
\n SECURITIES ACT IN CONNECTION WITH THE INITIAL PUBLIC
\n OFFERING OF THE ISSUER’S COMMON STOCK.<\/p>\n
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT
\n TO A SHAREHOLDER’S AGREEMENT PURSUANT TO WHICH SUCH SHARES
\n MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH A WRITTEN OPINION
\n OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND
\n SUBSTANCE, THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION
\n UNDER THE SECURITIES ACT OF 1933. COPIES OF SUCH AGREEMENT
\n ARE AVAILABLE FROM THE ISSUER.<\/p>\n
(b) The certificates evidencing the Consideration Shares shall also
\nbear any legend required by the Commissioner of Corporations of the State of
\nCalifornia or such as are required pursuant to any state, local or foreign law
\ngoverning such securities.<\/p>\n
(c) The Consideration Shares will not be registered under the
\nSecurities Act.<\/p>\n
-43-<\/p>\n
(d) No Street Shareholder shall be permitted to sell or otherwise
\ndispose of any Consideration Shares received in the Merger, unless Select
\nreceives an unqualified written opinion of counsel reasonably acceptable to it
\nstating that the proposed transfer of the Consideration Shares may be effected
\nwithout registration under the Securities Act, provided however that such
\nopinion may not rely on either (A) the exception provided by Section 3(a)(10) of
\nthe Securities Act or (B) upon Rule 145 promulgated under the Securities Act
\nuntil one hundred eighty-one (181) days after the effective date of Select’s
\ninitial public offering.<\/p>\n
(e) Each Street Shareholder agrees to, if requested by Select or an
\nunderwriter of Select Common Stock (or other securities) in connection with
\nSelect’s initial registered public stock offering, enter into an agreement not
\nto sell or otherwise transfer or dispose of any Select Common Stock (or other
\nsecurities) of Select held by such holder during a period of time determined by
\nSelect and its underwriters (not to exceed 180 days) following the effective
\ndate of the registration statement of Select filed under the Securities Act
\nrelating to such public offering. If requested by Street or an underwriter of
\nSelect Common Stock (or other securities) of Select in connection with a Select
\ninitial registered public offering, such agreement shall be in writing in a form
\nreasonably satisfactory to Select and such underwriter. Select may impose stop-
\ntransfer instructions with respect to the Select Common Stock (or securities)
\nsubject to the foregoing restriction until the end of said period.<\/p>\n
(f) The restrictions imposed by this Section 5.2 shall terminate
\n(except for the restrictions contained in paragraph (d) above), without any
\naction by Select or the Street Shareholders, upon the date one hundred eighty-
\none (181) days after the effective date of the initial public offering of Select
\nCommon Stock.<\/p>\n
Access to Information. Street and Select shall afford the other party and
\nits accountants, counsel and other representatives reasonable access during
\nnormal business hours during the period prior to the Effective Time to (a) all
\nof Select and Street’s properties, books, contracts, commitments and records, as
\napplicable, as reasonably requested by each party, (b) all other information
\nconcerning the business, properties and personnel (subject to restrictions
\nimposed by applicable law) of Street or Select as applicable, as each party may
\nreasonably request and (c) all key employees of Street and Select, as reasonably
\nrequested by each party. It is understood that for the purposes of the foregoing
\nsentence, a reasonable request on the part of Street shall be granted to access
\nthat information, property and personnel as is necessary to evaluate the
\ninvestment decision being made by the Street Shareholders in connection with the
\nMerger. Each of Select and Street agree to provide to the other party and its
\naccountants, counsel and other representatives copies of internal financial
\nstatements promptly upon request. No information or knowledge obtained in any
\ninvestigation pursuant to this Section 5.3 shall affect or be deemed to modify
\nany representation or warranty contained herein or the conditions to the
\nobligations of the parties to consummate the Merger.<\/p>\n
Confidentiality. Each of the parties hereto hereby agrees that the
\ninformation obtained in any investigation pursuant to Section 5.3 hereof, or
\npursuant to the negotiation and execution of this Agreement or the effectuation
\nof the transactions contemplated hereby, shall be governed by the<\/p>\n
-44-<\/p>\n
terms of the Confidentiality Agreement, executed effective as of March 5, 1999,
\nbetween Street and Select.<\/p>\n
Expenses. Whether or not the Merger is consummated, all fees and expenses
\nincurred in connection with the Merger including, without limitation, all legal,
\naccounting, financial advisory, consulting and all other fees and expenses of
\nthird parties incurred by a party hereto in connection with the negotiation and
\neffectuation of the terms and conditions of this Agreement and the transactions
\ncontemplated hereby or thereby, shall be the obligation of the respective party
\nincurring such fees and expenses.<\/p>\n
Public Disclosure. Unless otherwise required by law, no disclosure
\n(whether or not in response to an inquiry) of the subject matter of this
\nAgreement shall be made by any party hereto unless approved by the other party
\nprior to release; provided, however, that such approval shall not be
\nunreasonably withheld.<\/p>\n
Consents. Street shall use commercially reasonable efforts to obtain the
\nconsents, waivers and approvals under any of the Contracts deemed appropriate or
\nnecessary by Select in connection with the Merger, including all such consents,
\nwaivers and approvals set forth in Street Schedules, so as to preserve all
\nrights of, and benefits to, Select thereunder.<\/p>\n
Firpta Compliance. On the Closing Date, Street shall deliver to Select a
\nproperly executed statement in a form reasonably acceptable to Select for
\npurposes of satisfying Select’s obligations under Treasury Regulation Section
\n1.1445-2(c)(3).<\/p>\n
Reasonable Efforts. Subject to the terms and conditions provided in this
\nAgreement, each of the parties hereto shall use commercially reasonable efforts
\nto take promptly, or cause to be taken, all actions, and to do promptly, or
\ncause to be done, all things necessary, proper or advisable under applicable
\nlaws and regulations to consummate and make effective the transactions
\ncontemplated hereby, to obtain all necessary waivers, consents and approvals and
\nto effect all necessary registrations and filings (including any filings or
\nregistrations necessary to perfect Select’s ownership of any Street Registered
\nIntellectual Property after the Merger) and to remove any injunctions or other
\nimpediments or delays, legal or otherwise, in order to consummate and make
\neffective the transactions contemplated by this Agreement for the purpose of
\nsecuring to the parties hereto the benefits contemplated by this Agreement.<\/p>\n
Notification of Certain Matters. Street shall give prompt notice to Select
\nof (i) the occurrence or non-occurrence of any event, the occurrence or non-
\noccurrence of which would cause any representation or warranty of Street and
\nSelect, respectively, contained in this Agreement to be untrue or inaccurate,
\nsuch that the condition set forth in Section 6.2(a) would not be satisfied and
\n(ii) any failure of Street or Select, as the case may be, to comply with or
\nsatisfy in all material respects any covenant, condition or agreement to be
\ncomplied with or satisfied by it hereunder; provided, however, that the delivery
\nof any notice pursuant to this Section 5.10 shall not limit or otherwise affect
\nany remedies available to the party receiving such notice. No disclosure by
\nStreet<\/p>\n
-45-<\/p>\n
pursuant to this Section 5.10 shall be deemed to amend or supplement the Street
\nSchedules or prevent or cure any misrepresentation, breach of warranty or breach
\nof covenant.<\/p>\n
Select shall give prompt notice to Street of (i) the occurrence or non-
\noccurrence of any event, the occurrence or non-occurrence of would cause any
\nrepresentation or warranty of Select and Street, respectively, contained in this
\nAgreement to be untrue or inaccurate, such that the condition set forth in
\nSection 6.3(a) would not be satisfied and (ii) any failure of Select or Street,
\nas the case may be, to comply with or satisfy in all material respects any
\ncovenant, condition or agreement to be complied with or satisfied by it
\nhereunder; provided, however, that the delivery of any notice pursuant to this
\nSection 5.10 shall not limit or otherwise affect any remedies available to the
\nparty receiving such notice. No disclosure by Select pursuant to this Section
\n5.10 shall be deemed to amend or supplement the Select Schedules or prevent or
\ncure any misrepresentation, breach of warranty or breach of covenant.<\/p>\n
Directors’ and Officers’ Indemnification.<\/p>\n
(a) From and after the Effective Time, Select will cause the Surviving
\nCorporation to fulfill and honor in all respects the obligations of Street
\npursuant to any indemnification agreements between Street and its directors and
\nofficers as of the Effective Time. The Articles of Incorporation and Bylaws of
\nthe Surviving Corporation will contain provisions with respect to exculpation
\nand indemnification that are at least as favorable to the directors and officers
\nof Street as those contained in the Articles of Incorporation and Bylaws of
\nStreet as in effect on the date hereof, which provisions will not be amended,
\nrepealed or otherwise modified for a period of three years from the Effective
\nTime in any manner that would adversely affect the rights thereunder of
\nindividuals who, immediately prior to the Effective Time, were directors,
\nofficers, employees or agents of Street, unless such modification is required by
\nlaw.<\/p>\n
(b) This Section 5.11 shall survive the consummation of the Merger, is
\nintended to benefit Street, the Surviving Company and each indemnified party,
\nshall be binding, jointly and severally, on all successors and assigns of
\nSelect, and shall be enforceable by the indemnified parties.<\/p>\n
(c) Notwithstanding anything to the contrary in this Section 5.11,
\nSelect shall not be liable for any amounts payable resulting from any claim or
\naction brought against Street’s directors or officers by any officer or director
\nof Street or any of their affiliates to the extent any of the same result from
\nwillful misconduct.<\/p>\n
(d) Select shall have full recourse to the Escrow Fund to recover any
\namounts payable by it pursuant to this Section 5.11.<\/p>\n
5.12 Cooperation of Independent Accountants. Street shall use its best
\nefforts to cause its independent accountants, Ernst & Young LLP, to provide
\nassistance to Select and its affiliates and successors in connection with the
\nfiling of any (i) registration statement under the Securities Act <\/p>\n
-46-<\/p>\n
(and any amendments or supplements thereto), including but not limited to,
\nconsenting to the inclusion of the Street Audited Financials in the registration
\nstatement as required by Regulation S-X under the Securities Exchange Act of
\n1934, as amended (“Exchange Act”), and providing a “comfort letter” addressed to
\nthe underwriters containing such representations as the underwriters may
\nreasonably request and (ii) periodic or current reports required to be filed by
\nSelect pursuant to the Exchange Act.<\/p>\n
5.13 Termination of 401(k) Plan.<\/p>\n
Street agrees to take all necessary action to terminate its 401(k) plan
\nimmediately prior to the Closing Date, unless Select, in its sole and absolute
\ndiscretion, agrees to sponsor and maintain such plans by providing Street with
\nwritten notice of such election at least three (3) days before the Effective
\nTime. Unless Select provides such notice to Street, Select shall receive from
\nStreet evidence that Street’s 401(k) plan has been terminated pursuant to
\nresolution Street’s Board of Directors (the form and substance of such
\nresolutions shall be subject to review and approval of the Select and its
\ncounsel), effective as of the day immediately preceding the Closing Date.<\/p>\n
5.14 Information Supplied.<\/p>\n
The information relating to Street and the Street shareholders included in
\nthe proxy statement\/information statement to be sent to the Street shareholders
\nand to the Select stockholders in connection with (i) the meeting or action by
\nwritten consent of the Street shareholders (the “Street Shareholder Action”) to
\nconsider the approval and adoption of this Agreement and approval of the Merger
\nand any other matters contemplated hereby and (ii) any meeting or action by
\nwritten consent of the Select stockholders (the “Select Stockholder Action”) to
\napprove the Certificate Amendment, shall not on the date the proxy\/information
\nstatement is first mailed to the Street shareholders or Select stockholders, at
\nthe effective time of the Street Shareholder Action, at the effective time of
\nthe Select Stockholder Action or at the Effective Time, contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they are made, not false and misleading; or omit
\nto state any material fact necessary to correct any statement in any earlier
\ncommunication with respect to the solicitation of proxies or consents for the
\nStreet Shareholder Action or with respect to the Select Stockholder Action which
\nhas become false or misleading.<\/p>\n
The information relating to Select and the Select stockholders included in
\nthe proxy\/information statement to be sent to the Street shareholders and the
\nSelect stockholders in connection with Street Shareholder Action and the Select
\nStockholder Action, shall not on the date the proxy\/information statement is
\nfirst mailed to the Street shareholders or Select stockholders, at the effective
\ntime of the Street Shareholder Action, at the effective time of the Select
\nStockholder Action or at the Effective Time, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein, in light of the
\ncircumstances under which they are made, not false and misleading; or omit to
\nstate any material fact necessary to correct any statement in any earlier
\ncommunication with respect to the <\/p>\n
-47-<\/p>\n
solicitation of proxies for the Street Shareholder Action or with respect to the
\nSelect Stockholder Action which has become false or misleading.<\/p>\n
ARTICLE 6.<\/p>\n
Conditions to the Merger<\/p>\n
Conditions to Obligations of Each Party to Effect the Merger. The
\nrespective obligations of each party to this Agreement to effect the Merger
\nshall be subject to the satisfaction at or prior to the Effective Time of the
\nfollowing conditions:<\/p>\n
(a) Shareholder Approval. This Agreement and the transactions
\ncontemplated hereby, including without limitation the Merger, shall have been
\nduly approved, by the requisite vote under applicable law and the Street Charter
\nDocuments by the Street Shareholders. The Certificate Amendment and the issuance
\nof Select Common Stock and Select Series H Preferred Stock shall have been duly
\napproved, by the requisite vote under applicable law and the Select Charter
\nDocuments by the Select stockholders.<\/p>\n
(b) No Injunctions or Restraints; Illegality. No temporary
\nrestraining order, preliminary or permanent injunction or other order issued by
\nany court of competent jurisdiction or other legal restraint or prohibition
\npreventing the consummation of the Merger shall be in effect, nor shall any
\nproceeding brought by an administrative agency or commission or other
\ngovernmental authority or instrumentality, domestic or foreign, seeking any of
\nthe foregoing be pending; nor shall there be any action taken, or any statute,
\nrule, regulation or order enacted, entered, enforced or deemed applicable to the
\nMerger, which makes the consummation of the Merger illegal.<\/p>\n
(c) Permits. All approvals from government authorities, including any
\nrequisite Blue Sky approvals or HSR Act approvals, which are appropriate or
\nnecessary for the consummation of the Merger, shall have been obtained.<\/p>\n
(d) California Permit. The Commissioner of Corporations for the State
\nof California shall have approved the terms and conditions of the transactions
\ncontemplated by this Agreement, and the fairness of such terms and conditions
\npursuant to Section 25142 of the California Statute following a hearing for such
\npurpose, and shall have issued a Permit under Section 25121 of the California
\nStatute.<\/p>\n
(e) Tax Opinions. Select and Street shall each have received written
\nopinions from their respective tax counsel (Wilson Sonsini Goodrich & Rosati,
\nProfessional Corporation, and Latham & Watkins, respectively), in form and
\nsubstance reasonably satisfactory to them, to the effect that the Merger will
\nconstitute a tax-free reorganization within the meaning of Section 368(a) of the
\nCode and such opinions shall not have been withdrawn. The parties to this
\nAgreement agree <\/p>\n
-48-<\/p>\n
to make such reasonable representations as requested by such counsel for the
\npurpose of rendering such opinions.<\/p>\n
Conditions to Obligations of Select and Sub. The obligation of Select and
\nSub to consummate and effect this Agreement and the transactions contemplated
\nhereby shall be subject to the satisfaction at or prior to the Effective Time of
\neach of the following conditions, any of which may be waived, in writing,
\nexclusively by Select and Sub:<\/p>\n
(a) Representations and Warranties. Each representation and warranty
\nof Street contained in this Agreement (i) shall have been true and correct as of
\nthe date of this Agreement and (ii) shall be true and correct on and as of the
\nClosing Date with the same force and effect as if made on the Closing Date
\nexcept, (A) in each case, or in the aggregate, as does not constitute a Material
\nAdverse Effect on Street; provided, however, such Material Adverse Effect
\nqualification shall be inapplicable with respect to the representations and
\nwarranties contained in the first two sentences of Section 2.2(a), the first
\nsentence of Section 2.2(b) and the first five sentences of Section 2.4(a) (which
\nrepresentations and warranties shall have been, and shall be, true and correct
\nin all material respects) and (B) for those representations and warranties which
\naddress matters only as of a particular date (which representations shall have
\nbeen true and correct (subject to the qualifications set forth in the preceding
\nclause (A)) as of such particular date) (it being understood that, for purposes
\nof determining the accuracy of such representations and warranties, any update
\nof or modification to the Street Schedules made or purported to have been made
\nafter the execution of this Agreement shall be disregarded). Select shall have
\nreceived a certificate with respect to the foregoing signed on behalf of Street
\nby an authorized executive officer of Street.<\/p>\n
(b) Agreements and Covenants. Street shall have performed or complied
\nin all material respects with all agreements and covenants required by this
\nAgreement to be performed or complied with by them on or prior to the Closing
\nDate, and Select shall have received a certificate to such effect signed on
\nbehalf of Street by an authorized executive officer of Street.<\/p>\n
(c) No Material Adverse Effect. There shall not have occurred any
\nMaterial Adverse Effect on Street since the date of this Agreement.<\/p>\n
(d) Legal Opinion. Select shall have received a legal opinion from
\nLatham & Watkins, legal counsel to Street, in form and substance mutually agreed
\nupon with legal counsel to Select.<\/p>\n
(e) Non-Competition and Employment Agreements. Each of the employees
\nof Street listed as Group B Employees and four of seven of the employees of
\nStreet listed as Group A Employees in the table set forth in Schedule 6.2(e)
\nshall have entered into the Non-Competition and Employment Agreement, and such
\nagreements shall be in full force and effect.<\/p>\n
(f) Third Party Consents. The consents, waivers and approvals listed
\nin Schedule 6.2(f) shall have been obtained.<\/p>\n
-49-<\/p>\n
(g) Limit on Dissenting Shareholders. No more than ten percent (10%)
\nof the shares of Street Capital Stock shall have the continued right to perfect
\ndissenter’s rights under applicable law.<\/p>\n
(h) Termination of Investor Rights Agreement. The Amended and
\nRestated Investor Rights Agreement, dated as of March 8, 1999, by and among
\nStreet and certain holders of Street Preferred Stock listed on Exhibit A
\nthereto, shall have been validly terminated in its entirety, and the holders of
\nStreet Preferred Stock shall have no further rights accruing to them thereunder
\nas of the Effective Time (the “Rights Termination”).<\/p>\n
(i) Letter Agreement Amendment. The Amendment to the Letter
\nAgreement, dated October 1, 1997, by and between Marcus & Millichap Real Estate
\nInvestment Brokerage Company and SpringStreet, Inc, in substantially the form
\nattached hereto as Exhibit C, shall be in full force and effect.<\/p>\n
(j) California Real Estate Broker Law Compliance. Street shall have
\nobtained a California real estate broker license in compliance with the Order to
\nDesist & Refrain (Case No. H-7694 SF filed April 21, 1999 with the California
\nDepartment of Real Estate) or otherwise have obtained permanent relief from such
\norder.<\/p>\n
Conditions to the Obligations of Street. The obligations of Street to
\nconsummate and effect this Agreement and the transactions contemplated hereby
\nshall be subject to the satisfaction at or prior to the Effective Time of each
\nof the following conditions, any of which may be waived, in writing, exclusively
\nby Street:<\/p>\n
(a) Representations and Warranties. Each representation and warranty
\nof Select and Sub contained in this Agreement (i) shall have been true and
\ncorrect as of the date of this Agreement and (ii) shall be true and correct on
\nand as of the Closing Date with the same force and effect as if made on the
\nClosing Date except, (A) in each case, or in the aggregate, as does not
\nconstitute a Material Adverse Effect on Select; provided, however, such Material
\nAdverse Effect qualification shall be inapplicable with respect to the
\nrepresentations and warranties contained in the first two sentences of Sections
\n3.2(a), the first sentence of Section 3.2(b) and the first three sentences of
\nSection 3.4(a) (which representations and warranties shall have been, and shall
\nbe, true and correct in all material respects) and (B) for those representations
\nand warranties which address matters only as of a particular date (which
\nrepresentations shall have been true and correct (subject to the qualifications
\nset forth in the preceding clause (A)) as of such particular date) (it being
\nunderstood that, for purposes of determining the accuracy of such
\nrepresentations and warranties, any update of or modification to the Select
\nSchedules made or purported to have been made after the execution of this
\nAgreement shall be disregarded). Street shall have received a certificate with
\nrespect to the foregoing signed on behalf of Select by an authorized executive
\nofficer of Select.<\/p>\n
(b) Agreements and Covenants. Select shall have performed or complied
\nin all material respects with all agreements and covenants required by this
\nAgreement to be performed or <\/p>\n
-50-<\/p>\n
complied with by them on or prior to the Closing Date, and Street shall have
\nreceived a certificate to such effect signed on behalf of Select by an
\nauthorized executive officer of Select.<\/p>\n
(c) No Material Adverse Effect. There shall not have occurred any
\nMaterial Adverse Effect on Select since the date of this Agreement.<\/p>\n
(d) Legal Opinion. Street shall have received a legal opinion from
\nWilson Sonsini Goodrich & Rosati, Professional Corporation, legal counsel to
\nSelect, in form and substance mutually agreed upon with legal counsel to Select.<\/p>\n
ARTICLE 7.<\/p>\n
Survival of Representations and Warranties; Escrow<\/p>\n
7.1 Survival of Representations and Warranties. All representations and
\nwarranties in this Agreement or in any instrument delivered pursuant to this
\nAgreement shall survive the Merger and continue until 5:00 p.m., California
\ntime, on the first anniversary of the Effective Time (the “Expiration Date”).<\/p>\n
7.2 Escrow Arrangements.<\/p>\n
(a) Escrow Fund. At the Effective Time, the Street Shareholders will
\nbe deemed to have received and deposited with the Escrow Agent (as defined
\nbelow) the Escrow Amount (plus any additional shares as may be issued upon any
\nstock split, stock dividend or recapitalization effected by Street after the
\nEffective Time) without any act of any Street Shareholder. As soon as
\npracticable after the Effective Time, the Escrow Amount, without any act of any
\nStreet Shareholder, will be deposited with U.S. Bank Trust, N.A., (or other
\ninstitution acceptable to Street and the Securityholder Agent (as defined in
\nSection 7.2(g) below)) as Escrow Agent (the “Escrow Agent”), such deposit to
\nconstitute an escrow fund (the “Escrow Fund”) to be governed by the terms set
\nforth herein. The portion of the Escrow Amount contributed on behalf of each
\nStreet Shareholder shall be in proportion to the aggregate Select Common Stock
\nand\/or Select Series H Preferred Stock, as the case may be, which such holder
\nwould otherwise be entitled under Section 1.6(b). The Escrow Fund shall be
\navailable to compensate Select and its affiliates for any claims, losses,
\nliabilities, deficiencies, costs and expenses, including reasonable attorneys’
\nfees and expenses and expenses of investigation and defense, net of any benefits
\nor proceeds of insurance (hereinafter individually a “Loss” and collectively
\n“Losses”) incurred by Select, its officers, directors, or affiliates (including
\nthe Surviving Corporation) as a result of any inaccuracy or breach of a
\nrepresentation or warranty of Street contained in Article 2 herein (as modified
\nby Street Schedules), or any failure by Street to perform or comply with any
\ncovenant contained herein. Select and Street each acknowledge that such Losses,
\nif any, would relate to unresolved contingencies existing at the Effective Time,
\nwhich if resolved at the Effective Time would have led to a reduction in the
\naggregate Merger consideration. Nothing herein shall limit the liability of
\nStreet for any breach of any representation, warranty or <\/p>\n
-51-<\/p>\n
covenant if the Merger does not close. Resort to the Escrow Fund shall be the
\nexclusive contractual remedy of Select for any breach by Street of any
\nrepresentation or warranty if the Merger does close; provided, however, that
\nnothing herein shall limit any remedy for fraud. Select may not receive any
\nshares from the Escrow Fund unless and until Officer’s Certificates (as defined
\nin paragraph (d) below) identifying Losses, the aggregate amount of which exceed
\n$100,000, have been delivered to the Escrow Agent as provided in paragraph (e);
\nin such case, Select may recover from the Escrow Fund the total of its Losses,
\nin excess of $100,000.<\/p>\n
(b) Escrow Period; Distribution upon Termination of Escrow Periods.
\nSubject to the following requirements, the Escrow Fund shall be in existence
\nimmediately following the Effective Time and shall terminate at 5:00 p.m.,
\nCalifornia time, on the Expiration Date (the “Escrow Period”); and, as soon as
\npracticable (no later than 5 business days), all Escrow Amounts remaining in the
\nEscrow Fund shall be distributed by the Escrow Agent to Select’s transfer agent
\nfor distribution to the former shareholders of Street as set forth in the last
\ntwo sentences of this Section 7.2(b); provided, however, that the Escrow Period
\nshall not terminate with respect to any Escrow Amount (or some portion thereof)
\nremaining in the Escrow Fund that is necessary in the reasonable judgment of
\nSelect, subject to the objection of the Securityholder Agent and the subsequent
\narbitration of the matter in the manner provided in Section 7.2(f) hereof, to
\nsatisfy any unsatisfied claims concerning facts and circumstances existing prior
\nto the termination of such Escrow Period specified in any Officer’s Certificate
\ndelivered to the Escrow Agent prior to termination of such Escrow Period. As
\nsoon as practicable (but no later than 5 business days) after all such claims
\n(if any) have been resolved, the Escrow Agent shall deliver to Select’s transfer
\nagent for distribution to the former shareholders of Street the remaining Escrow
\nAmount not required to satisfy such claims. Deliveries of Escrow Amounts to the
\nformer shareholders of Street pursuant to this Section 7.2(b) shall be made in
\nproportion to their respective original contributions to the Escrow Fund.<\/p>\n
(c) Protection of Escrow Fund.<\/p>\n
(i) The Escrow Agent shall hold and safeguard the Escrow
\nFund during the Escrow Period, shall treat such fund as a trust fund in
\naccordance with the terms of this Agreement and not as the property of Street
\nand shall hold and dispose of the Escrow Fund only in accordance with the terms
\nhereof.<\/p>\n
(ii) Any shares of Select Common Stock and\/or Select Series
\nH Preferred Stock, as the case may be, or other equity securities issued or
\ndistributed by Select (including shares issued upon a stock split) (“New
\nShares”) in respect of Select Common Stock and\/or Select Series H Preferred
\nStock, as the case may be, in the Escrow Fund which have not been released from
\nthe Escrow Fund shall be added to the Escrow Fund and become a part thereof. New
\nShares issued in respect of shares of Street Common Stock and\/or Select Series H
\nPreferred Stock, as the case may be, which have been released from the Escrow
\nFund shall not be added to the Escrow Fund but shall be distributed to the
\nrecordholders thereof. Cash dividends on Select Common Stock and\/or Select
\nSeries H Preferred Stock, as the case may be, shall not be added to the Escrow
\nFund but shall be distributed to the recordholders thereof.<\/p>\n
-52-<\/p>\n
(iii) Each shareholder shall have voting rights with
\nrespect to the shares of Select Common Stock and\/or Select Series H Preferred
\nStock, as the case may be, contributed to the Escrow Fund by such shareholder
\n(and on any voting securities added to the Escrow Fund in respect of such shares
\nof Select Common Stock and\/or Select Series H Preferred Stock, as the case may
\nbe).<\/p>\n
(d) Claims Upon Escrow Fund.<\/p>\n
(i) Upon receipt by the Escrow Agent at any time on or
\nbefore the last day of the Escrow Period of a certificate signed by any officer
\nof Select (an “OFFICER’S CERTIFICATE”): (A) stating that Select has paid or
\nproperly accrued or reasonably anticipates that it will have to pay or accrue
\nLosses, and (B) specifying in reasonable detail the individual items of Losses
\nincluded in the amount so stated, the date each such item was paid or properly
\naccrued, or the basis for such anticipated liability, and the nature of the
\nmisrepresentation, breach of warranty or covenant to which such item is related,
\nthe Escrow Agent shall, subject to the provisions of Section 7.2(e) hereof,
\ndeliver to Select out of the Escrow Fund, as promptly as practicable, a number
\nof shares of Select Common Stock and Select Series H Preferred Stock held in the
\nEscrow Fund, the aggregate number of which are equal in value to such Losses.
\nDelivery of shares of Select Common Stock and Select Series H Preferred Stock
\nfrom the Escrow Fund shall be made in proportion to the original number of such
\nshares contributed to the Escrow Fund.<\/p>\n
(ii) The fair market value of the shares of Select Common
\nStock and Select Series H Preferred Stock to be delivered to Select out of the
\nEscrow Fund pursuant to Section 7.2(d)(i) hereof shall be determined on the date
\nthe Officer’s Certificate is delivered to the Escrow Agent and shall be set
\nforth in the Officer’s Certificate. For purposes of this 7.2(d)(ii), the fair
\nmarket value shall be the closing sale price of Select Common Stock (or such
\nother securities into which Select Common Stock may be reclassified or changed)
\nas reported on the principal national securities exchange on which the Select
\nCommon Stock is listed or admitted to trading. If the Select Common Stock is not
\nlisted or admitted to trading on a national securities exchange, the fair market
\nvalue of the Select Common Stock or Select Series H Preferred Stock (or such
\nother securities into which Select Common Stock and\/or Select Series H Preferred
\nStock may be reclassified or changed), as the case may be, shall be determined
\nin good faith by the Board of Directors of Select; provided, however, in the
\nevent the Securityholder Agent objects to the fair market value of such shares
\nas determined by the Board of Directors of Select, the conflict shall be
\nresolved in accordance with Section 7.2(f) hereof.<\/p>\n
(e) Objections to Claims. At the time of delivery of any Officer’s
\nCertificate to the Escrow Agent, a duplicate copy of such certificate shall be
\ndelivered to the Securityholder Agent and for a period of thirty (30) days after
\nsuch delivery, the Escrow Agent shall make no delivery to Select of any Escrow
\nAmounts pursuant to Section 7.2(d) hereof unless the Escrow Agent shall have
\nreceived written authorization from the Securityholder Agent to make such
\ndelivery. After the expiration of such thirty (30) day period, the Escrow Agent
\nshall make delivery of shares of Select Common Stock and Select Series H
\nPreferred Stock from the Escrow Fund in accordance with <\/p>\n
-53-<\/p>\n
Section 7.2(d) hereof, provided that no such payment or delivery may be made if
\nthe Securityholder Agent shall object in a written statement to the claim made
\nin the Officer’s Certificate, and such statement shall have been delivered to
\nthe Escrow Agent prior to the expiration of such thirty (30) day period.<\/p>\n
(f) Resolution of Conflicts; Arbitration.<\/p>\n
(i) In case the Securityholder Agent shall so object in
\nwriting to any claim or claims made in any Officer’s Certificate, the
\nSecurityholder Agent and Select shall attempt in good faith to agree upon the
\nrights of the respective parties with respect to each of such claims. If the
\nSecurityholder Agent and Select should so agree, a memorandum setting forth such
\nagreement shall be prepared and signed by both parties and shall be furnished to
\nthe Escrow Agent. The Escrow Agent shall be entitled to rely on any such
\nmemorandum and distribute shares of Select Common Stock and Select Series H
\nPreferred Stock from the Escrow Fund in accordance with the terms thereof.<\/p>\n
(ii) If no such agreement can be reached after good faith
\nnegotiation, either Select or the Securityholder Agent may demand arbitration of
\nthe matter unless the amount of the damage or loss is at issue in pending
\nlitigation with a third party, in which event arbitration shall not be commenced
\nuntil such amount is ascertained or both parties agree to arbitration; and in
\neither such event the matter shall be settled by arbitration conducted by three
\narbitrators. Select and the Securityholder Agent shall each select one
\narbitrator, and the two arbitrators so selected shall select a third arbitrator.
\nThe arbitrators shall set a limited time period and establish procedures
\ndesigned to reduce the cost and time for discovery while allowing the parties an
\nopportunity, adequate in the sole judgment of the arbitrators, to discover
\nrelevant information from the opposing parties about the subject matter of the
\ndispute. The arbitrators shall rule upon motions to compel or limit discovery
\nand shall have the authority to impose sanctions, including attorneys’ fees and
\ncosts, to the extent as a court of competent law or equity, should the
\narbitrators determine that discovery was sought without substantial
\njustification or that discovery was refused or objected to without substantial
\njustification. The decision of a majority of the three arbitrators as to the
\nvalidity and amount of any claim in such Officer’s Certificate shall be binding
\nand conclusive upon the parties to this Agreement, and notwithstanding anything
\nin Section 7.2(e) hereof, the Escrow Agent shall be entitled to act in
\naccordance with such decision and make or withhold payments out of the Escrow
\nFund in accordance therewith. Such decision shall be written and shall be
\nsupported by written findings of fact and conclusions which shall set forth the
\naward, judgment, decree or order awarded by the arbitrators.<\/p>\n
(iii) Judgment upon any award rendered by the arbitrators
\nmay be entered in any court having jurisdiction. Any such arbitration shall be
\nheld in Santa Clara County, California under the rules then in effect of the
\nAmerican Arbitration Association. For purposes of this Section 7.2(f), in any
\narbitration hereunder in which any claim or the amount thereof stated in the
\nOfficer’s Certificate is at issue, Select shall be deemed to be the Non-
\nPrevailing Party in the event that the arbitrators award Select less than the
\nsum of one-half (1\/2) of the disputed amount plus any<\/p>\n
-54-<\/p>\n
amounts not in dispute; otherwise, the former shareholders of Street as
\nrepresented by the Securityholder Agent shall be deemed to be the Non-Prevailing
\nParty. The Non-Prevailing Party to an arbitration shall pay its own expenses,
\nthe fees of each arbitrator, the administrative costs of the arbitration and the
\nexpenses, including without limitation, reasonable attorneys’ fees and costs,
\nincurred by the other party to the arbitration.<\/p>\n
(g) Securityholder Agent of the Shareholders; Power of Attorney.<\/p>\n
(i) In the event that the Merger is approved, effective
\nupon such vote, and without further act of any shareholder, Jay Hoag shall be
\nappointed as agent and attorney-in-fact (the “Securityholder Agent”) for each
\nshareholder of Street (except such shareholders, if any, as shall have perfected
\ntheir appraisal or dissenters’ rights under California Law), for and on behalf
\nof shareholders of Street, to give and receive notices and communications, to
\nauthorize delivery to Select of shares of Select Common Stock and Select Series
\nH Preferred Stock from the Escrow Fund in satisfaction of claims made by Select,
\nto object to such deliveries, to agree to, negotiate, enter into settlements and
\ncompromises of, and demand arbitration and comply with orders of courts and
\nawards of arbitrators with respect to such claims, and to take all actions
\nnecessary or appropriate in the judgment of Securityholder Agent for the
\naccomplishment of the foregoing. Such agency may be changed by the former
\nshareholders of Street from time to time upon not less than thirty (30) days
\nprior written notice to Select; provided that the Securityholder Agent may not
\nbe removed unless holders of a two-thirds interest of the Escrow Fund agree to
\nsuch removal and to the identity of the substituted agent. Any vacancy in the
\nposition of Securityholder Agent may be filled by approval of the holders of a
\nmajority in interest of the Escrow Fund. No bond shall be required of the
\nSecurityholder Agent, and the Securityholder Agent shall not receive
\ncompensation for his or her services. Notices or communications to or from the
\nSecurityholder Agent shall constitute notice to or from each of the shareholders
\nof Street.<\/p>\n
(ii) The Securityholder Agent shall not be liable for any
\nact done or omitted hereunder as Securityholder Agent while acting in good faith
\nand in the exercise of reasonable judgment. The former shareholders of Street on
\nwhose behalf the Escrow Amount was contributed to the Escrow Fund shall
\nseverally indemnify the Securityholder Agent and hold the Securityholder Agent
\nharmless against any loss, liability or expense incurred without negligence or
\nbad faith on the part of the Securityholder Agent and arising out of or in
\nconnection with the acceptance or administration of the Securityholder Agent’s
\nduties hereunder, including the reasonable fees and expenses of any legal
\ncounsel retained by the Securityholder Agent.<\/p>\n
(h) Actions of the Securityholder Agent. A decision, act, consent or
\ninstruction of the Securityholder Agent shall constitute a decision of all the
\nformer shareholders of Street for whom a portion of the Escrow Amount otherwise
\nissuable to them are deposited in the Escrow Fund and shall be final, binding
\nand conclusive upon each of such former shareholders, and the Escrow Agent and
\nSelect may rely upon any such decision, act, consent or instruction of the
\nSecurityholder Agent as being the decision, act, consent or instruction of each
\nevery such former shareholder of Street. <\/p>\n
-55-<\/p>\n
The Escrow Agent and Select are hereby relieved from any liability to any person
\nfor any acts done by them in accordance with such decision, act, consent or
\ninstruction of the Securityholder Agent.<\/p>\n
(i) Third-Party Claims. In the event Select becomes aware of a third-
\nparty claim which Select believes may result in a demand against the Escrow
\nFund, Select shall notify the Securityholder Agent of such claim, and the
\nSecurityholder Agent, as representative for the former shareholders of Street,
\nshall be entitled, at their expense, to participate in any defense of such
\nclaim. Select shall have the right in its sole discretion to settle any such
\nclaim; provided, however, that except with the consent of the Securityholder
\nAgent, no settlement of any such claim with third-party claimants shall alone be
\ndeterminative of the amount of any claim against the Escrow Fund. In the event
\nthat the Securityholder Agent has consented to any such settlement, the
\nSecurityholder Agent shall have no power or authority to object under any
\nprovision of this Article 7 to the amount of any claim by Select against the
\nEscrow Fund with respect to such settlement.<\/p>\n
(j) Escrow Agent’s Duties.<\/p>\n
(i) The Escrow Agent shall be obligated only for the
\nperformance of such duties as are specifically set forth herein, and as set
\nforth in any additional written escrow instructions which the Escrow Agent may
\nreceive after the date of this Agreement which are signed by an officer of
\nSelect and the Securityholder Agent, and may rely and shall be protected in
\nrelying or refraining from acting on any instrument reasonably believed to be
\ngenuine and to have been signed or presented by the proper party or parties. The
\nEscrow Agent shall not be liable for any act done or omitted hereunder as Escrow
\nAgent while acting in good faith and in the exercise of reasonable judgment, and
\nany act done or omitted pursuant to the advice of counsel shall be conclusive
\nevidence of such good faith.<\/p>\n
(ii) The Escrow Agent is hereby expressly authorized to
\ncomply with and obey orders, judgments or decrees of any court of law,
\nnotwithstanding any notices, warnings or other communications from any party or
\nany other person to the contrary. In case the Escrow Agent obeys or complies
\nwith any such order, judgment or decree of any court, the Escrow Agent shall not
\nbe liable to any of the parties hereto or to any other person by reason of such
\ncompliance, notwithstanding any such order, judgment or decree being
\nsubsequently reversed, modified, annulled, set aside, vacated or found to have
\nbeen entered without jurisdiction.<\/p>\n
(iii) The Escrow Agent shall not be liable in any respect
\non account of the identity, authority or rights of the parties executing or
\ndelivering or purporting to execute or deliver this Agreement or any documents
\nor papers deposited or called for hereunder.<\/p>\n
(iv) The Escrow Agent shall not be liable for the
\nexpiration of any rights under any statute of limitations with respect to this
\nAgreement or any documents deposited with the Escrow Agent.<\/p>\n
-56-<\/p>\n
(v) In performing any duties under the Agreement, the
\nEscrow Agent shall not be liable to any party for damages, losses, or expenses,
\nexcept for gross negligence or willful misconduct on the part of the Escrow
\nAgent. The Escrow Agent shall not incur any such liability for (A) any act or
\nfailure to act made or omitted in good faith, or (B) any action taken or omitted
\nin reliance upon any instrument, including any written statement or affidavit
\nprovided for in this Agreement that the Escrow Agent shall in good faith believe
\nto be genuine, nor will the Escrow Agent be liable or responsible for forgeries,
\nfraud, impersonations, or determining the scope of any representative authority.
\nIn addition, the Escrow Agent may consult with the legal counsel in connection
\nwith Escrow Agent’s duties under this Agreement and shall be fully protected in
\nany act taken, suffered, or permitted by him\/her in good faith in accordance
\nwith the advice of counsel. The Escrow Agent is not responsible for determining
\nand verifying the authority of any person acting or purporting to act on behalf
\nof any party to this Agreement.<\/p>\n
(vi) If any controversy arises between the parties to
\nthis Agreement, or with any other party, concerning the subject matter of this
\nAgreement, its terms or conditions, the Escrow Agent will not be required to
\ndetermine the controversy or to take any action regarding it. The Escrow Agent
\nmay hold all documents and shares of Select Common Stock and Select Series H
\nPreferred Stock and may wait for settlement of any such controversy by final
\nappropriate legal proceedings or other means as, in the Escrow Agent’s
\ndiscretion, the Escrow Agent may be required, despite what may be set forth
\nelsewhere in this Agreement. In such event, the Escrow Agent will not be liable
\nfor damage. Furthermore, the Escrow Agent may at its option, file an action of
\ninterpleader requiring the parties to answer and litigate any claims and rights
\namong themselves. The Escrow Agent is authorized to deposit with the clerk of
\nthe court all documents and shares of Select Common Stock and Select Series H
\nPreferred Stock held in escrow, except all cost, expenses, charges and
\nreasonable attorney fees incurred by the Escrow Agent due to the interpleader
\naction and which the parties jointly and severally agree to pay. Upon initiating
\nsuch action, the Escrow Agent shall be fully released and discharged of and from
\nall obligations and liability imposed by the terms of this Agreement.<\/p>\n
(vii) Select and its successors and assigns agree to
\nindemnify and hold Escrow Agent harmless against any and all losses, claims,
\ndamages, liabilities, and expenses, including reasonable costs of investigation,
\ncounsel fees, and disbursements that may be imposed on Escrow Agent or incurred
\nby Escrow Agent in connection with the performance of his\/her duties under this
\nAgreement, including but not limited to any litigation arising from this
\nAgreement or involving its subject matter; provided, however, it is understood
\nthat one-half of any amounts paid by Select and its successors and assigns
\npursuant to this paragraph to or on behalf of the Escrow Agent shall constitute
\nLosses reimbursable from the Escrow Fund.<\/p>\n
(viii) The Escrow Agent may resign at any time upon giving
\nat least thirty (30) days written notice to Select and the Securityholder Agent;
\nprovided, however, that no such resignation shall become effective until the
\nappointment of a successor escrow agent which shall be accomplished as follows:
\nSelect and the Securityholder Agent shall use their best efforts to<\/p>\n
-57-<\/p>\n
mutually agree on a successor escrow agent within thirty (30) days after
\nreceiving such notice. If Select and the Securityholder Agent fail to agree upon
\na successor escrow agent within such time, the Escrow Agent shall have the right
\nto appoint a successor escrow agent authorized to do business in the State of
\nCalifornia. The successor escrow agent shall execute and deliver an instrument
\naccepting such appointment and it shall, without further acts, be vested with
\nall the estates, properties, rights, powers, and duties of the predecessor
\nescrow agent as if originally named as escrow agent. The Escrow Agent shall be
\ndischarged from any further duties and liability under this Agreement.<\/p>\n
(k) Fees. All fees of the Escrow Agent for performance of its duties
\nhereunder shall be paid by Select. It is understood that the fees and usual
\ncharges agreed upon for services of the Escrow Agent shall be considered
\ncompensation for ordinary services as contemplated by this Agreement. In the
\nevent that the conditions of this Agreement are not promptly fulfilled, or if
\nthe Escrow Agent renders any service not provided for in this Agreement, or if
\nthe parties request a substantial modification of its terms, or if any
\ncontroversy arises, or if the Escrow Agent is made a party to, or intervenes in,
\nany litigation pertaining to this escrow or its subject matter, the Escrow Agent
\nshall be reasonably compensated for such extraordinary services and reimbursed
\nfor all costs, attorney’s fees, and expenses occasioned by such default, delay,
\ncontroversy or litigation. Select promises to pay these sums upon demand in
\naccordance with the Escrow Agent’s standard fee schedule.<\/p>\n
ARTICLE 8.<\/p>\n
Termination, Amendment and Waiver<\/p>\n
Termination. Except as provided in Section 8.2 below, this Agreement may be
\nterminated and the Merger abandoned at any time prior to the Effective Time:<\/p>\n
(a) by mutual consent of Street and Select;<\/p>\n
(b) by Select or Street if: (i) the Effective Time has not occurred
\nby August 15, 1999 (the “End Date”); provided, however, that the right to
\nterminate this Agreement under this Section 8.1(b)(i), shall not be available to
\nany party whose action (or whose shareholders’ action) or failure to act (or
\nwhose shareholders’ failure to act) has been a principal cause of or resulted in
\nthe failure of the Merger to occur on or before such date and such action or
\nfailure to act constitutes a breach of this Agreement; (ii) there shall be a
\nfinal nonappealable order of a federal or state court in effect preventing
\nconsummation of the Merger; or (iii) there shall be any statute, rule,
\nregulation or order enacted, promulgated or issued or deemed applicable to the
\nMerger by any Governmental Entity that would make consummation of the Merger
\nillegal;<\/p>\n
(c) by Select if there shall be any action taken other than by Select
\nor at Select’s behest, or any statute, rule, regulation or order enacted,
\npromulgated or issued or deemed applicable <\/p>\n
-58-<\/p>\n
to the Merger by any Governmental Entity, which would: (i) prohibit Select’s
\nownership or operation of any portion of the business of Street or (ii) compel
\nSelect to dispose of or hold separate all or a portion of the business or assets
\nof Street or Select as a result of the Merger;<\/p>\n
(d) by Select, upon a breach of any representation, warranty,
\ncovenant or agreement on the part of Street set forth in this Agreement, or if
\nany representation or warranty of Street shall have become untrue, in either
\ncase such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
\nwould not be satisfied as of the time of such breach or as of the time such
\nrepresentation or warranty shall have become untrue, provided that if such
\ninaccuracy in Street’s representations and warranties or breach by Street is
\ncurable by Street through the exercise of its commercially reasonable efforts,
\nthen Select may not terminate this Agreement under this Section 8.1(d) prior to
\nthe End Date, provided Street continues to exercise commercially reasonable
\nefforts to cure such breach (it being understood that Select may not terminate
\nthis Agreement pursuant to this Section 8.1(d) if it shall have materially
\nbreached this Agreement or if such breach by Street is cured prior to the End
\nDate);<\/p>\n
(e) by Street, upon a breach of any representation, warranty,
\ncovenant or agreement on the part of Select set forth in this Agreement, or if
\nany representation or warranty of Select shall have become untrue, in either
\ncase such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
\nwould not be satisfied as of the time of such breach or as of the time such
\nrepresentation or warranty shall have become untrue, provided, that if such
\ninaccuracy in Select’s representations and warranties or breach by Select is
\ncurable by Select through the exercise of its commercially reasonable efforts,
\nthen Street may not terminate this Agreement under this Section 8.1(e) prior to
\nthe End Date, provided Select continues to exercise commercially reasonable
\nefforts to cure such breach (it being understood that Street may not terminate
\nthis Agreement pursuant to this Section 8.1(e) if it shall have materially
\nbreached this Agreement or if such breach by the Company is cured prior to the
\nEnd Date).<\/p>\n
(f) by Street, on or after 5:00 p.m., California time, on the date
\nwhich is twenty-one (21) calendar days from but not including the date hereof,
\nif (i) the Select stockholders have not duly and validly approved the
\nCertificate Amendment and the issuance of Select Common Stock and Select Series
\nH Preferred Stock in accordance with the terms of the Select Charter Documents
\nand applicable law or (ii) Select stockholders have not executed Stockholder
\nSupport Agreements in a form reasonably satisfactory to Street which, if the
\nshares of Select capital stock were voted in accordance with the terms of such
\nagreements, such vote would be sufficient to approve the Certificate Amendment
\nin accordance with the terms of the Select Charter Documents and applicable law.<\/p>\n
(g) by Street, on or after 5:00 p.m., California time, on the next
\nday following the filing with the Securities and Exchange Commission of a
\nregistration statement (as amended if applicable) on Form S-1 by Select (or its
\nsubsidiaries) under the Securities Act which does not make reference to Street,
\nits business and the Merger.<\/p>\n
-59-<\/p>\n
Where action is taken to terminate this Agreement pursuant to this Section
\n8.1, it shall be sufficient (and required) for such action to be authorized by
\nthe Board of Directors (as applicable) of the party taking such action.<\/p>\n
Effect of Termination. In the event of termination of this Agreement as
\nprovided in Section 8.1, this Agreement shall forthwith become void and there
\nshall be no liability or obligation on the part of Select, Street, or their
\nrespective officers, directors or shareholders provided, however, that each
\nparty shall remain liable for any breaches of this Agreement prior to its
\ntermination; and provided, further, that the provisions of Sections 5.4, 5.5,
\n5.6, this Section 8.2 and Article 9 of this Agreement shall remain in full force
\nand effect and survive any termination of this Agreement.<\/p>\n
Amendment. Subject to applicable law, this Agreement may be amended by the
\nparties hereto at any time by execution of an instrument in writing signed on
\nbehalf of each of the parties hereto; provided, however, execution by the
\nSecurityholder Agent and Escrow Agent shall only be required for amendments
\nrelating to Article 7 hereof.<\/p>\n
Extension; Waiver. At any time prior to the Effective Time, Select and
\nStreet may, to the extent legally allowed, (i) extend the time for the
\nperformance of any of the obligations of the other party hereto, (ii) waive any
\ninaccuracies in the representations and warranties made to such party contained
\nherein or in any document delivered pursuant hereto and (iii) waive compliance
\nwith any of the agreements or conditions for the benefit of such party contained
\nherein. Any agreement on the part of a party hereto to any such extension or
\nwaiver shall be valid only if set forth in an instrument in writing signed on
\nbehalf of such party.<\/p>\n
ARTICLE 9.<\/p>\n
General Provisions<\/p>\n
Notices. Every notice, consent and other communications required or
\npermitted to be given hereunder shall be in writing and shall be deemed given if
\ndelivered personally or by commercial messenger or courier service, or mailed by
\nregistered or certified mail (return receipt requested) or sent via facsimile
\n(with acknowledgment of complete transmission) to the parties at the following
\naddresses (or at such other address for a party as shall be specified by like
\nnotice), provided, however, that notices sent by mail will not be deemed
\nguaranteed received:<\/p>\n
-60-<\/p>\n
(a) if to Select to:<\/p>\n
NetSelect, Inc.
\n 225 West Hillcrest Drive, Suite 100
\n Thousand Oaks, CA 91360
\n Attention: General Counsel
\n Telephone No.: (805) 557-2300
\n Facsimile No.: (805) 557-2689<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati
\n Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, CA 94304
\n Attention: Larry W. Sonsini, Esq.
\n Martin W. Korman, Esq.
\n Gil M. Labrucherie, Esq.
\n Telephone No.: (650) 493-9300
\n Facsimile No.: (650) 493-6811 <\/p>\n
(b) if to Street or the Securityholder Agent, to:<\/p>\n
SpringStreet, Inc.
\n 375 Fremont Street, Suite 100
\n San Francisco, CA 94105-2324
\n Telephone No.: (415) 972-1133
\n Facsimile No.: (415) 972-0296
\n Attention: Chief Executive Officer<\/p>\n
with a copy to: <\/p>\n
Latham & Watkins
\n 135 Commonwealth Drive
\n Menlo Park, CA 94025
\n Telephone No.: (650) 328-4600
\n Facsimile No.: (650) 463-2600
\n Attention: Peter Kerman, Esq.
\n Ora T. Fisher, Esq.<\/p>\n
-61-<\/p>\n
(c) if to the Escrow Agent, to:<\/p>\n
U.S. Bank Trust, N.A.
\n One California Street, Fourth Floor
\n San Francisco, CA 94111
\n Telephone No: (415) 273-4530
\n Facsimile No.: (415) 273-4593
\n Attention: Barbara Wise<\/p>\n
Interpretation. The words “include,” “includes” and “including” when used
\nherein shall be deemed in each case to be followed by the words “without
\nlimitation.” The table of contents and headings contained in this Agreement are
\nfor reference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
Counterparts. This Agreement may be executed in one or more counterparts,
\nall of which shall be considered one and the same agreement and shall become
\neffective when one or more counterparts have been signed by each of the parties
\nand delivered to the other party, it being understood that all parties need not
\nsign the same counterpart.<\/p>\n
Entire Agreement; Assignment. This Agreement, the Exhibits hereto, the
\nStreet Schedules and the Select Schedules, and the documents and instruments and
\nother agreements among the parties hereto referenced herein: (a) constitute the
\nentire agreement among the parties with respect to the subject matter hereof and
\nsupersede all prior agreements and understandings both written and oral, among
\nthe parties with respect to the subject matter hereof; (b) are not intended to
\nconfer upon any other person any rights or remedies hereunder; and (c) may not
\nbe assigned unless agreed to by the other parties hereto, except that Select and
\nSub may assign their respective rights and delegate their obligations hereunder
\nto majority-owned subsidiaries of Select provided that Select remains
\ncontingently liable.<\/p>\n
Severability. In the event that any provision of this Agreement or the
\napplication thereof, becomes or is declared by a court of competent jurisdiction
\nto be illegal, void or unenforceable, the remainder of this Agreement will
\ncontinue in full force and effect and the application of such provision to other
\npersons or circumstances will be interpreted so as reasonably to effect the
\nintent of the parties hereto. The parties further agree to replace such void or
\nunenforceable provision of this Agreement with a valid and enforceable provision
\nthat will achieve, to the extent possible, the economic, business and other
\npurposes of such void or unenforceable provision.<\/p>\n
Other Remedies. Except as otherwise provided herein, any and all remedies
\nherein expressly conferred upon a party will be deemed cumulative with and not
\nexclusive of any other remedy conferred hereby, or by law or equity upon such
\nparty, and the exercise by a party of any one remedy will not preclude the
\nexercise of any other remedy.<\/p>\n
-62-<\/p>\n
Governing Law. This Agreement shall be governed by and construed in
\naccordance with the laws of the State of California, regardless of the laws that
\nmight otherwise govern under applicable principles of conflicts of laws thereof.
\nEach of the parties hereto irrevocably consents to the exclusive jurisdiction
\nand venue of any federal or state court within the Northern District, State of
\nCalifornia, in connection with any matter based upon or arising out of this
\nAgreement or the matters contemplated herein, agrees that process may be served
\nupon them in any manner authorized by the laws of the State of California for
\nsuch persons and waives and covenants not to assert or plead any objection which
\nthey might otherwise have to such jurisdiction, venue and such process.<\/p>\n
Rules of Construction. The parties hereto agree that they have been
\nrepresented by counsel during the negotiation and execution of this Agreement
\nand, therefore, waive the application of any law, regulation, holding or rule of
\nconstruction providing that ambiguities in an agreement or other document will
\nbe construed against the party drafting such agreement or document.<\/p>\n
Attorneys’ Fees. If any action or other proceeding relating to the
\nenforcement of any provision of this Agreement is brought by any party hereto,
\nthe prevailing party shall be entitled to recover reasonable attorneys’ fees,
\ncosts and disbursements (in addition to any other relief to which the prevailing
\nparty may be entitled).<\/p>\n
-63-<\/p>\n
IN WITNESS WHEREOF, Select, Sub, Street, and with respect to Article 7
\nonly, the Securityholder Agent and the Escrow Agent have caused this Agreement
\nto be signed by their duly authorized respective officers, all as of the date
\nfirst written above.<\/p>\n
SPRINGSTREET, INC. NETSELECT, INC.<\/p>\n
By: \/s\/ John H. Helm By: \/s\/ Stuart Wolff
\n ————————– —————————<\/p>\n
Title: President and CEO Title:
\n ———————– ————————<\/p>\n
AVENUE ACQUISITION CORPORATION<\/p>\n
By: \/s\/ Stuart Wolff
\n ————————–<\/p>\n
Title:
\n ———————–<\/p>\n
SECURITYHOLDER AGENT ESCROW AGENT
\n U.S. Bank Trust, N.A.<\/p>\n
\/s\/ Jay Hoag \/s\/ Barbara Wise
\n—————————– ——————————
\nJay Hoag Barbara Wise
\n Vice President<\/p>\n
***REORGANIZATION AGREEMENT***<\/p>\n
-64-<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7788],"corporate_contracts_industries":[9486],"corporate_contracts_types":[9622,9626],"class_list":["post-43196","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-homestorecom-inc","corporate_contracts_industries-real__agents","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\/43196","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=43196"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43196"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43196"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}