Execution Copy
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Agreement") is entered into as of
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this 29/th/ day of March, 2000, by and among XxxxXxxxxxx.xxx, Inc., a Delaware
corporation ("LifeMinders"), WITI Acquisition Corp., a Colorado corporation and
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wholly-owned direct subsidiary of LifeMinders ("Acquisition Corp."), WITI
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Corporation, a Colorado corporation (the "Company"), the University Corporation
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for Atmospheric Research Foundation, a Colorado non-profit corporation
("UCARF"), J. Xxxxx Xxxxxxxxx ("Xxxxxxxxx"), Xxxxxxx Xxxxxxx ("Xxxxxxx" and
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together with UCARF and Xxxxxxxxx, the "Principal Stockholders") and each of the
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stockholders of the Company other than the Principal Stockholders (collectively,
the "Stockholders"). LifeMinders, Acquisition Corp., the Company, the Principal
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Stockholders and the Stockholders are referred to collectively herein as the
"Parties" and individually as a "Party." The Company, Principal Stockholders
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and Stockholders are referred to collectively as the "Seller Parties" and
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individually as a "Seller Party."
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WHEREAS, the Parties hereto desire to consummate a merger (the "Merger")
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whereby Acquisition Corp. will be merged with and into the Company and the
Company will be the surviving corporation in the Merger, upon the terms and
subject to the conditions of this Agreement and in accordance with the Colorado
Business Corporation Act (the "State Laws"); and
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WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E)
of the Internal Revenue Code of 1986, as amended (the "Code").
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NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
ARTICLE I
MERGER; MERGER CONSIDERATION; EFFECTIVE TIME
1.1 Merger.
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(a) Subject to the terms and conditions of this Agreement and
State Laws, at the Effective Time, Acquisition Corp. and the Company shall
consummate the Merger in which (i) Acquisition Corp. shall be merged with and
into the Company and the separate corporate existence of Acquisition Corp. shall
thereupon cease, (ii) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Colorado and (iii) all of the rights, privileges, immunities, powers
and franchises of the Company and Acquisition Corp. shall be taken and deemed to
be transferred to, and vested in, the surviving corporation without further act
or deed. The corporation surviving the Merger is
sometimes hereinafter referred to as the "Surviving Corporation." The Merger
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shall have the effects set forth in the State Laws.
(b) On the Closing Date, subject to the terms and conditions of
this Agreement, Acquisition Corp. and the Company shall (i) cause to be executed
Articles of Merger ] in the form required by the State Laws (the "Articles of
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Merger"), and (ii) cause the Articles of Merger to be filed with the Secretary
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of State of the State of Colorado as provided in the State Laws. The Merger
shall become effective at (i) such time as the Articles of Merger have been duly
filed with the Secretary of State of the State of Colorado or (ii) such other
time as is agreed upon by the Sellers' Representative and LifeMinders and
specified in the Articles of Merger. Such time is hereinafter referred to as the
"Effective Time."
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1.2 Merger Consideration; Conversion or Cancellation of Company's Capital
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Stock.
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(a) The total consideration payable in the Merger (the "Merger
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Consideration") to the holders of shares of the Company's capital stock shall
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consist of the following:
(i) cash in the amount of $2,500,000 (the "Merger Cash");
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and
(ii) that number of shares of LifeMinders' common stock,
par value $0.01 per share ("LifeMinders Common Shares" or "LifeMinders Common
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Stock"), that is equal to the quotient of (A) $22,500,000 less (1) the value of
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the Company's options that LifeMinders will assume as determined under Section
6.14 and (2) the Company's expenses incurred in connection with the Merger as
determined under Section 13.8, divided by (B) the product of the Merger Price
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times eighty-eight hundredths (.88) (the "Merger Stock"). For purposes of this
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Agreement, "Merger Price" shall mean $67.24.
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(b) At the Effective Time, by virtue of the Merger and without any
action by the Parties, or the holders of any of the following securities, all of
the shares of the Company's common stock, par value $0.001 per share ("Company
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Common Shares"), Series A Preferred Stock, par value $0.001 per share ("Company
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Series A Preferred Shares") and Series B Preferred Stock, par value $0.001 per
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share ("Company Series B Preferred Shares," and together with the Company Common
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Shares and Company Series A Preferred Shares, the "Company Shares") issued and
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outstanding immediately prior to the Effective Time (other than any Company
Shares to be canceled pursuant to Section 1.2(c) hereof) shall be canceled and
shall be converted automatically into the right to receive the following
respective portion of the Merger Consideration:
(i) the holders of the Company Common Shares shall be
entitled to receive $581,561 in cash and 23.2623% of the Merger Stock, in the
aggregate;
(ii) the holders of the Company Series A Preferred Shares
shall be entitled to receive $1,865,526 in cash and 74.6212% of the Merger
Stock, in the aggregate; and
(iii) the holders of the Company Series B Preferred Shares
shall be entitled to receive $52,913 in cash and 2.1165% of the Merger Stock, in
the aggregate.
(c) Each Company Share held in the treasury of the Company and
each Company Share owned by any direct or indirect wholly owned subsidiary of
the Company immediately prior to the Effective Time shall be cancelled without
any conversion thereof and no payment or distribution shall be made with respect
thereto.
(d) The exchange ratios pursuant to which any Company Common
Shares, Company Series A Preferred Shares and Company Series B Preferred Shares
are to be exchanged for LifeMinders Common Shares shall be adjusted to reflect
fully the effect of any stock split, reverse split, stock dividend (including
any dividend or distribution of securities convertible into LifeMinders Common
Shares or Company Shares), reorganization, recapitalization or other like change
with respect to LifeMinders Common Shares or Company Shares occurring prior to
the Effective Time.
(e) No certificates representing fractional LifeMinders Common
Shares shall be issued upon surrender of any Company Shares. In lieu of any
fractional LifeMinders Common Shares, the number of LifeMinders Common Shares
that any holder is entitled to receive shall be rounded up or down to the
nearest whole number (after aggregating all such fractional shares for a
particular Company Stockholder).
(f) No transfers of Company Shares shall be made on the stock
transfer books of the Company after the date of this Agreement, and each of the
Seller Parties agrees not to transfer, or allow to be transferred, any Company
Shares after the date of this Agreement and before the Closing Date.
(g) Each issued and outstanding share of capital stock of
Acquisition Corp. shall continue to be issued and outstanding and shall be
converted into one share of validly issued, fully paid and non-assessable Common
Stock of the Surviving Corporation. Each stock certificate of Acquisition Corp.
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.
1.3 Pledged Assets.
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(a) As partial collateral security for the payment of any
indemnification obligations pursuant to Article IX, the Principal Stockholders
shall, and by execution hereof do hereby transfer, pledge and assign to
LifeMinders, for the benefit of LifeMinders, a security interest in the
following assets (the "Pledged Assets"):
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(i) ten percent (10%) of the number of shares of
LifeMinders Common Stock comprising, directly or indirectly, each Principal
Stockholder's share of the Merger Stock, and the certificates and instruments,
if any, representing or evidencing each such Person's Pledged Assets;
(ii) all securities hereafter delivered to such Principal
Stockholder with respect to or in substitution for such Person's Pledged Assets,
all certificates and instruments representing or evidencing such securities and
other property at any time received, receivable or otherwise distributed in
exchange for any or all thereof;
(iii) all non-cash proceeds of all of the foregoing
property and all rights, titles, interests, privileges and preferences
appertaining or incident to the foregoing property.
(b) Each certificate, if any, evidencing a Principal Stockholder's
Pledged Assets issued in such Person's name in the Merger, shall be delivered to
LifeMinders directly by the transfer agent, such certificate bearing no
restrictive or cautionary legend other than those imprinted by the transfer
agent at LifeMinders' request. Each Principal Stockholder shall, at the Closing,
deliver to LifeMinders, for each such certificate, a stock power duly signed in
blank by him or it.
(c) Unless and until the Pledged Assets are applied to satisfy any
indemnification obligation of the Principal Stockholders pursuant to Article IX,
and in accordance with the procedures set forth therein, the Pledged Assets
shall be property of the Principal Stockholders and they shall be entitled to
retain cash proceeds from, and exercise any voting powers incident to, the
Pledged Assets.
(d) The Pledged Assets shall be available to satisfy any
indemnification obligations of the Principal Stockholders pursuant to Article IX
for a period of eighteen (18) months following the Effective Time (the "Release
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Date"). Promptly following the Release Date, LifeMinders shall return or cause
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to be returned to the Principal Stockholders the Pledged Assets, less Pledged
Assets having an aggregate value equal to the amount of (i) any pending claim
for indemnification made by any Indemnified Party (as defined in Article IX),
and (ii) any amounts finally determined to be owed by the Principal Stockholders
in respect of indemnification obligations pursuant to Article IX; provided,
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that, the Principal Stockholders may elect to satisfy such claim or claims with
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cash or other immediately available funds in accordance with Section 9.2(f). For
purposes of the preceding sentence and Article IX, each share of LifeMinders
Common Stock held as Pledged Assets shall be valued at the Merger Price.
1.4 Surviving Corporation.
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(a) The Articles of Incorporation of Acquisition Corp., as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as provided
therein and under the State Laws.
(b) The Bylaws of Acquisition Corp., as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation.
(c) The directors and officers of the Surviving Corporation from
and after the Effective Time shall be as set forth on Schedule 1.4(c), until
their successors have been duly elected, appointed or qualified or until their
earlier death, resignation or removal in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
ARTICLE II
CLOSING
2.1 Time and Place of the Closing. The closing of the transactions
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contemplated by this Agreement (the "Closing") shall take place at the offices
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of Xxxx Xxxxxxx, 0000 Xxxxxxxxxxxxx Xxxxx, XxXxxx, Xxxxxxxx, as soon as
practicable following the satisfaction or waiver of the conditions set forth in
Articles VII and VIII hereof and in any event within three (3) business days
thereafter, or such other date as LifeMinders and the Company may mutually
determine (the "Closing Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL STOCKHOLDERS
The Company and each of the Principal Stockholders, jointly and severally,
represent and warrant to LifeMinders, as of the date hereof and as of the
Closing Date, that the statements contained in this Article III are true and
correct, except as set forth on the Disclosure Schedule attached hereto. The
Disclosure Schedule shall be arranged in separate schedules corresponding to
numbered and lettered sections contained in Articles III, IV and V, and an item
shall be deemed to be disclosed only with respect to the particular section of
this Agreement to which such numbered or lettered section corresponds.
3.1 Organization and Corporate Power. The Company is a corporation, duly
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organized, validly existing and in good standing under the laws of the State of
Colorado and is qualified to do business and in good standing in each
jurisdiction where the character or location of its assets or its properties
owned, leased or operated by it, or the nature of its activities makes
qualification necessary. All such jurisdictions in which the Company is
qualified are set forth on Schedule 3.1. The Company has full corporate power
and authority and all material licenses, permits and authorizations necessary to
own and operate its properties, to carry on its business as now conducted and
presently proposed to be conducted. The copies of the Company's Articles of
Incorporation and Bylaws, which have been furnished to LifeMinders, reflect all
amendments made thereto at any time prior to the date of this Agreement and are
correct and complete. The minute books containing the records of meetings of
the stockholders and board of directors, the stock certificate books and the
stock record books of the Company which have been furnished to LifeMinders are
correct and complete. The Company is not in default under, or in violation of,
any provision of its Articles of Incorporation or Bylaws.
3.2 Authority for Agreement. The Board of Directors and stockholders of
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the Company have unanimously approved, and UCARF has approved, this Agreement
and the transactions contemplated hereby, and each of them has authorized the
execution and delivery and performance hereof. The Company and UCARF have full
corporate power, authority and legal right to enter into this Agreement and the
other documents contemplated hereby to which they are a party and to consummate
the transactions contemplated hereby. No other corporate proceedings on the part
of the Company or UCARF are necessary to approve and authorize the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby. This Agreement is a legal, valid and binding obligation of the Company
and UCARF, enforceable against them in accordance with its terms, except as
enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights in general.
3.3 No Violation to Result. Except as set forth on Schedule 3.3, the
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execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and the fulfillment of the terms hereof:
(i) are not in violation or breach of, do not conflict with or constitute a
default under, and shall not accelerate or permit the acceleration of the
performance required by, any of the terms of the Articles of Incorporation or
Bylaws of the Company or UCARF or any note, debt instrument, security agreement
or mortgage, or any other contract or agreement, written or oral, to which any
of them is a party or by which any of them is bound; (ii) shall not be an event
which, after notice or lapse of time or both, will result in any such violation,
breach, conflict, default, or acceleration; (iii) shall not result in a
violation under any law, judgment, decree, order, rule, regulation, permit or
other legal requirement of any Governmental Authority applicable to the Company
or UCARF; and (iv) shall not result in the creation or imposition of any Lien,
possibility of Lien, or restriction in favor of any third Person upon the
Company Shares or any of the properties, rights or assets of the Company. Other
than as set forth on Schedule 3.3, no notice to, filing with, or consent of, any
Person is necessary for the consummation by the Company or UCARF of the
transactions contemplated by this Agreement. The Company and UCARF have given
all notices, made all filings and obtained all consents set forth on Schedule
3.3.
3.4 Capitalization. Schedule 3.4 sets forth, as of the date hereof: (i)
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the number of authorized shares of each class of the Company's capital stock;
(ii) the number of issued and outstanding shares of each class of the Company's
capital stock; (iii) the number of shares of each class which are reserved for
issuance upon exercise of options or warrants or upon conversion of convertible
securities; (iv) the names of all holders of issued and outstanding shares of
each class of the Company's capital stock, together with the number of such
shares owned and/or controlled by each such holder and the percentage of the
issued and outstanding shares of each class of the Company's capital stock which
such holder owns or controls; and (v) the number of shares of each class, if
any, which are held in treasury. All of the issued and outstanding shares of
capital stock of the Company: (a) have been duly authorized and validly issued,
and are fully paid and non-assessable; (b) were issued or transferred in
compliance with all applicable state and federal laws; and (c) were issued in
compliance with any preemptive rights or rights of first refusal. All shares of
capital stock to be issued pursuant to options, warrants or convertible
securities, will be, when issued: (x) duly authorized, validly issued, fully
paid and non-assessable; (y) issued or transferred in compliance with all
applicable state and federal laws; and (z) issued in compliance with any
preemptive rights or rights of first refusal. No preemptive rights or rights of
first refusal exist with respect to the shares of capital stock of the Company,
and no such rights arise by virtue of or in connection with the transactions
contemplated hereby; and, to the extent permitted by law, the Principal
Stockholders and Stockholders have waived (or hereby waive) any and all such
preemptive rights and rights of first refusal. Except as set forth on Schedule
3.4, there are no outstanding or authorized rights, options, warrants,
convertible securities, subscription rights, conversion rights, exchange rights
or other agreements or commitments of any kind that could require the Company,
Principal Stockholders or Stockholders to issue or sell any shares of Common
Stock (or securities convertible into or exchangeable for shares of Common
Stock) and no such rights or commitments of any kind arise by virtue of or in
connection with the transactions contemplated
hereby. There is no outstanding stock appreciation, phantom stock, profit
participation or other similar rights with respect to the Company. Except as set
forth on Schedule 3.4, there are no proxies, voting rights, stockholders
agreements or other agreements or understandings with respect to the voting or
transfer of the capital stock of the Company. The Company is not obligated to
redeem or otherwise acquire any of its outstanding shares of capital stock.
3.5 Financial Statements. Schedule 3.5 includes true, complete and
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correct copies of: (i) the unaudited interim balance sheet of the Company (the
"Current Balance Sheet") as of February 29, 2000 (the "Balance Sheet Date") and
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unaudited income statement, statement of stockholders' equity and statement of
cash flows of the Company for the five-month period ended February 29, 2000
(together with the Current Balance Sheet, the "Interim Financials"); (ii) and
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the audited balance sheets of the Company as of September 30, 1997, 1998 and
1999, and income statements, statements of stockholders' equity and statements
of cash flows for the years ended September 30, 1997, 1998 and 1999
(collectively, the "Audited Financial Statements" and together with the Interim
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Financials, the "Financial Statements"). Each of the Financial Statements
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(including in all cases the notes thereto, if any) is accurate and complete, is
consistent with the Company's books and records (which, in turn, are accurate
and complete), presents fairly the Company's financial condition and results of
operations as of the times and for the periods referred to therein and has been
prepared in accordance with GAAP, subject, in the case of the Interim
Financials, to (i) normal year-end audit adjustments, which, individually or in
the aggregate, would not be material, (ii) the exceptions set forth on Schedule
3.5 and (iii) the omission of footnote information. The Current Balance Sheet
presents fairly the financial condition of the Company as of the dates indicated
thereon, and each of the statements of income, cash flows and retained earnings
included in the Financial Statements presents fairly the results of its
operations for the periods indicated thereon. During the periods covered by the
Financial Statements and since the Balance Sheet Date, there has been no
material change in the Company's accounting policies. There are no material,
special or non-recurring items of income or expense during the periods covered
by the Financial Statements and the balance sheets included in the Financial
Statements do not reflect any write-up or revaluation increasing the book value
of any assets, except as specifically disclosed in the notes thereto. There have
been no transactions involving the business of the Company which properly should
have been set forth in the Financial Statements and which have not been
accurately so set forth.
3.6 Liabilities. Except as disclosed on Schedule 3.6, there are no
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Liabilities of the Company, other than: (i) those Liabilities reflected on the
Current Balance Sheet and not previously paid or discharged; and (ii) those
Liabilities incurred after the Balance Sheet Date arising in the ordinary course
of business and consistent with past practice (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law) and none
of which is more than $20,000 in amount. The Company is not a guarantor or
otherwise liable for any Liabilities of any other Person other than endorsements
for collection in the ordinary course of business.
3.7 Adverse Changes. Except as set forth on Schedule 3.7, since the
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Balance Sheet Date, the Company has not:
(a) suffered a Material Adverse Effect or suffered any theft,
damage, destruction, or casualty loss in excess of $20,000, to its assets
(whether or not covered by insurance) or suffered any destruction of the
Company's books and records;
(b) redeemed or repurchased, directly or indirectly, any shares of
capital stock or other equity security or declared, set aside or paid any
dividends or made any other distributions (whether in cash or in kind) with
respect to any shares of its capital stock or other equity securities, or
warrants, options or other rights to acquire shares of its capital stock or
other equity securities of the Company;
(c) issued, sold or transferred any notes, bonds or other debt
securities, any equity securities, any securities convertible, exchangeable or
exercisable into shares of its capital stock or other equity securities of the
Company;
(d) borrowed any amount or incurred or become subject to any
Liabilities, except Liabilities incurred in the ordinary course of business that
do not exceed $20,000;
(e) discharged or satisfied any Lien or paid any Liability, except
Liabilities incurred in the ordinary course of business, or prepaid any amount
of Liabilities for borrowed money;
(f) subjected any portion of its properties or assets to any Lien;
(g) sold, leased, assigned or transferred a portion of its tangible
or intangible assets (including Intellectual Property (as defined herein)), or
canceled (without fair consideration) any material debts or claims owing to it
or held by it, or disclosed any confidential information (other than pursuant to
agreements requiring the Person to whom the disclosure was made to maintain the
confidentiality of, and preserve all rights of the Company in, such confidential
information);
(h) suffered any extraordinary losses or waived any rights of
material value, whether or not in the ordinary course of business;
(i) entered into, amended or terminated any Material Contract (as
defined herein) or taken any other action or entered into any other transaction
other than in the ordinary course of business;
(j) entered into any other material transaction, whether or not in
the ordinary course of business, or materially changed any business practice;
(k) made any other change in employment terms for any of its
directors, officers, and employees outside the ordinary course of business and
inconsistent with past practice;
(l) conducted its cash management customs and practices other than in
the ordinary course of business (including, without limitation, with respect to
maintenance of working capital balances, collection of accounts receivable and
payment of accounts payable);
(m) made any capital expenditures that aggregate in excess of
$20,000;
(n) made any loans or advances to, or guarantees for the benefit
of, any Persons;
(o) made any payment to any Affiliate of the Company or any Party
hereto; or
(p) committed or agreed to any of the foregoing actions set forth
in (a) through (o) above.
3.8 Employee Benefit Plans.
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(a) All employee benefit plans, programs, policies and
arrangements (whether formal or informal, written or unwritten, and whether for
the benefit of a single individual or more than one individual) maintained or
contributed to (whether currently or previously) by the Company for the benefit
of any current or former employee of the Company or in which such employees are
entitled to participate or with respect to which the Company has or reasonably
could be expected to have any Liability are listed on Schedule 3.8 (the "Benefit
Plans"). With respect to each Benefit Plan, true, correct and complete copies of
all of the following documents, if applicable, have been delivered or made
available to LifeMinders: all plan documents and amendments thereto; all written
descriptions of any oral plans or policies; all trust agreements; all annuity
contracts, insurance policies or contracts and service agreements; the three (3)
most recent Forms 5500 and any financial statements attached thereto; the most
recent actuarial and valuation report; the most recent IRS determination letter;
the most recent IRS opinion letter; the most recent summary plan description;
and copies of the nondiscrimination (including Section 415) testing for the last
three (3) years.
(b) Except as set forth on Schedule 3.8(b), each Benefit Plan and
the administration thereof complies, and has at all times complied, with the
terms of such Benefit Plan and with the requirements of all applicable law,
including, without limitation, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the Code. Each Benefit Plan intended to qualify
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under Section 401(a) of the Code so qualifies, each trust that forms a part of
any such Benefit Plan or trust or other entity that is intended to be a
voluntary employees' beneficiary association is exempt from taxation under
Section 501(a) of the Code, and no such trust or other entity is liable for any
Tax under Section 511 of the Code. Each Benefit Plan and related trust agreement
and annuity contract is valid, binding, enforceable and in full force and
effect, and the Company has no plan or commitment (whether legally binding or
not) to modify any Benefit Plan (except to the extent disclosed in the documents
delivered to LifeMinders). No Benefit Plan subject to Part 3 of Title I of ERISA
has incurred any "accumulated funding deficiency" within the meaning of Section
302 of ERISA or Section 412 of the Code. No Liability has been incurred or is
expected to be incurred under Title IV of ERISA to any party with respect to any
Benefit Plan, or any other plan presently or heretofore maintained or
contributed to by the Company, any predecessor to the Company, or any entity
that is or at any time was a member of a controlled group, as defined in Section
412(n)(6)(B) of the Code, which includes or included the Company ("Controlled
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Group Member"). Neither the Company, nor any Controlled Group Member has
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incurred any Liability for any Tax imposed under Sections 4971 through 4980B of
the Code or civil liability under Sections 502(i) or (l) of ERISA. The "amount
of unfunded benefit liabilities" within the meaning of Section 4001(a)(18) of
ERISA does not exceed zero with respect to any Benefit Plan subject to Title IV
of ERISA. No Benefit Plan is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA. No
Benefit Plan provides health or death benefit coverage to any employee or his
spouse or dependents beyond the termination of an employee's employment, except
as required by Part 6 of Title I of ERISA or Section 4980B of the Code. No
"reportable event" (within the meaning of Section 4043 of ERISA) has occurred
with respect to any Benefit Plan or any plan maintained by a Controlled Group
Member since the effective date of said Section 4043. The Company has no
Liability (whether actual, contingent or otherwise) with respect to any employee
benefit plan or arrangement sponsored or maintained by a Controlled Group
Member.
(c) No suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of plan activities) have been brought
against or with respect to any Benefit Plan, and, to the knowledge of the
Company, no suit, action or other litigation is threatened by, against, or
relating to any Benefit Plan and the Company does not have any knowledge of any
fact that could form the basis for any such suit, action or litigation. No
"prohibited transaction" within the meaning of Sections 406 or 407 of ERISA or
Section 4975 of the Code or any breach of fiduciary responsibility under ERISA
that could subject the Company to Tax or other Liability has occurred with
respect to any Benefit Plan. No Benefit Plan is presently under audit or
examination by the IRS, the Department of Labor, or any other Governmental
Authority, and no matters are pending with respect to any Benefit Plan under the
IRS Voluntary Compliance Resolution Program, its Closing Agreement Program, or
any other similar program. All contributions to Benefit Plans that were required
to be made under such Benefit Plans have been made as of the Balance Sheet Date,
and all benefits accrued under any unfunded Benefit Plan have been paid, accrued
or otherwise adequately reserved in accordance with GAAP. No Benefit Plan
contains any term or provision or is subject to any law that would prohibit the
transactions contemplated by this Agreement, or that would give rise to the
vesting or acceleration of benefits, or to payments, Liabilities or funding
obligations as a result of the execution of this Agreement or the transactions
contemplated by this Agreement, except to the extent that full vesting is
required under any tax-qualified Benefit Plan under Section 411 of the Code.
3.9 Employee Matters.
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(a) Schedule 3.9(a) contains a complete and correct list of all
employees of the Company and their respective titles as of the date hereof, the
1999 compensation paid or payable to each such employee, the date and amount of
such employee's most recent salary increase, the date of employment of each such
employee and the accrued vacation time and sick leave of each such employee.
Except as set forth on Schedule 3.9(a), (i) the terms of employment or
engagement of all directors, officers, employees, agents, consultants and
professional advisers of the Company are such that their employment or
engagement may be terminated upon not more than two weeks' notice given at any
time and without liability for payment of compensation or damages, and (ii)
there are no severance payments which are or could become payable by the Company
to any director, officer or other employee of the Company under the terms of any
oral or written agreement or commitment or any law, custom, trade or practice.
(b) The Company is not bound by or subject to (and none of its
assets or properties is bound by or subject to) any arrangement with any labor
union. No employees of the Company are or ever have been represented by any
labor union or covered by any collective bargaining agreement while employed by
the Company and no campaign to establish such representation is in progress.
There is no pending or, the Company's Knowledge, threatened
labor dispute involving the Company and any group of their employees nor has the
Company experienced any labor interruptions. The Company is and has been in
material compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment, and wages and hours,
including without limitation any such laws regarding employment documentation,
minimum wage and hours, workers' compensation, family and medical leave, the
Immigration Reform and Control Act, and occupational safety and health
requirements, and the Company has not engaged in any unfair labor practice. All
Persons classified by the Company as independent contractors do satisfy and have
satisfied the requirements of law to be so classified, and the Company has fully
and accurately reported their compensation on IRS Forms 1099 when required to do
so.
(c) Except as set forth on Schedule 3.9(c), to the knowledge of
the Company, no executive, key employee, group of employees, consultant or
independent contractor of the Company has any plans to terminate his, her or its
employment or relationship as a consultant or an independent contractor with the
Company. The Company reasonably believes that the relations between the Company
and its employees are good.
1.10 Taxes.
-----
(a) The Company has timely filed or caused to be filed with the
appropriate Governmental Authority all Tax Returns required to be filed by it,
or requests for extensions to file such Tax Returns have been timely filed or
granted and have not expired, and all such Tax Returns are true, complete and
accurate in all respects. All Taxes owed by the Company (whether or not shown on
any Tax Return) have been paid. The Company does not have any Liabilities for
unpaid Taxes which have not been accrued or reserved against on the Current
Balance Sheet whether asserted or unasserted contingent or otherwise, and the
Company has no knowledge of any basis for the assertion of any such Liability
attributable to the Company, its assets or operations. The Financial Statements
reflect an adequate reserve for all Taxes payable by the Company for all taxable
periods and portions thereof accrued through the date of such Financial
Statements, and no deficiencies for any Taxes have been proposed, asserted or
assessed against the Company that are not adequately reserved for. The Company
has not waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency. No claim has
ever been made by a Governmental Authority in a jurisdiction where the Company
does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens on any of the assets of the Company that arose
in connection with any failure (or alleged failure) to pay any Tax. The Company
has not filed a consent under Section 341(f) of the Code concerning collapsible
corporations. The Company has not made any payments, is not obligated to make
any payments and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Section 280G of the Code. Except as set forth on Schedule 3.10, the
Company (A) has not been a member of an Affiliated Group (as such term is
defined in the Code) filing a consolidated federal income Tax Return and (B) has
no Liability for the Taxes of any Person under Reg. (S)1.1502-6 (or any similar
provision of state local or foreign law), as a transferee or successor, by
contract, or otherwise. The Company has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. The
Company has complied in all respects with all applicable laws, rules and
regulations relating to the payment and
withholding of Taxes (including, without limitation, withholding of Taxes
pursuant to Sections 1441 and 1442 of the Code or similar provisions under any
foreign laws and withholding with respect to employee wages) and has, within the
time and manner prescribed by law, withheld and paid over to the proper
Governmental Authority all amounts required to be withheld and paid over under
all applicable laws. The Company has disclosed on its federal income Tax Returns
all positions taken therein that could give rise to a substantial understatement
of federal income Tax within the meaning of Section 6662 of the Code. There is
no dispute or claim concerning any Tax Liability of Company either (A) claimed
or raised by any authority in writing or (B) as to which the Company has
knowledge.
(b) No federal, state, local or foreign audits or other
administrative proceedings or court proceedings ("Audits") exist or have been
------
initiated with regard to any Taxes or Tax Returns of the Company, and the
Company has not received any notice that such an Audit is pending or threatened
with respect to any Taxes due from or with respect to the Company or any Tax
Return filed by or with respect to the Company. The Company is not a party to,
is not bound by, or has no obligation under, any Tax sharing agreement, Tax
indemnification agreement or similar contract or arrangement. The Company has
not agreed to make any adjustment pursuant to Section 481(a) of the Code (or any
predecessor provision) by reason of any change in any accounting method, and
there is no application pending with any Governmental Authority requesting
permission for any changes in any accounting method of the Company. Except as
set forth on Schedule 3.10, the Company does not have any deferred Tax Liability
arising out of any transaction, including without limitation, any (1) deferred
intercompany transaction (as defined in Treasury Regulation Section 1.1502-13),
or (2) installment sale (as defined in Code Section 453).
(c) The Company has conducted its business in substantially the same
manner as it is presently being conducted. The Company operates at least one
significant historic business line, or uses at least a significant portion of
its historic business assets, in each case within the meaning of Treasury
Regulation Section 1.368-1(d). The Company has not taken any action that would
prevent the Merger from qualifying as a reorganization under Section
368(a)(1)(A) and 368(a)(2)(E), including, without limitation, meeting the
requirement under Section 368(a)(2)(E) of the Code that "substantially all of
the assets" of the Company be acquired in the Merger. Except for transactions in
connection with the sale or disposition of the WITI Subsidiaries, prior to the
Closing Date, the Stockholders did not dispose of any Company stock or receive
any distribution from the Company.
3.11 Subsidiaries. Except as set forth on Schedule 3.11, the Company has
------------
no debt, equity or other investment or interest in any Person or any joint
venture or strategic alliance with any Person. The Company has no commitments to
contribute to the capital of, make loans to, or share losses of, any Person.
Weatherwindows Corporation has no assets or liabilities, and has never conducted
any business.
3.12 Property.
--------
(a) Schedule 3.12(a) sets forth an accurate and complete list of all
real property and leaseholds of real property owned or leased by the Company or
to which the Company may have any ownership or leasehold rights (collectively,
the "Facilities"). True, complete and
----------
correct copies of all real property leases have been delivered or made available
to LifeMinders. Except as otherwise disclosed on Schedule 3.12(a): (i) there are
no outstanding written or oral leases, rights to occupancy, or tenancies of any
kind (including tenancies by sufferance and/or holdover tenancies arising under
expired written or oral leases) covering or in any way affecting the Facilities
or any part or parts thereof; (ii) no person, firm or corporation other than the
Company has any rights (including rights arising under an installment contract,
option to purchase, easement, right-of-way, or otherwise) with respect to the
Company's interest in the Facilities or any part thereof; and (iii) there have
been no improvements to, construction on, work done at, and/or services or
material supplied to, the Facilities or any part or parts thereof, which has
been contracted for by the Company, for which payment in full has not been made
and which might give rise to mechanic's liens or other Liens. All leases set
forth on Schedule 3.12(a) are in full force and effect and constitute valid and
binding agreements of the Company and, to the knowledge of the Company, the
other parties thereto in accordance with their respective terms.
(b) Schedule 3.12(b) sets forth an accurate list of all owned and
leased personal property included on the Current Balance Sheet and all other
personal property owned or leased by the Company (i) as of the Balance Sheet
Date, or (ii) acquired since the Balance Sheet Date, including an indication as
to which assets are currently owned, or were formerly owned, by any current or
former stockholders or Affiliates of the Company. True, complete and correct
copies of all personal property leases and leases for equipment have been
delivered or made available to LifeMinders. All of the vehicles and other
material machinery and equipment listed on Schedule 3.12(b) are in good working
order and condition, ordinary wear and tear excepted. All fixed assets used by
the Company that are material to the operation of its business are either owned
by the Company or leased under an agreement listed on Schedule 3.12(b).
(c) The Company has good and marketable title to its assets, free and
clear of any and all Liens and defects in title. The Company's assets, taken
together, are adequate for the operation of the Company's business as it is
being currently conducted and the Company reasonably believes will be adequate
for operating its business as proposed to be conducted by LifeMinders. Neither
WITI Pacific Limited, a corporation organized and existing under the laws of
Hong Kong, nor Weather Information Technologies, Inc., a Colorado corporation
(together, the "WITI Subsidiaries"), owns any material assets.
-----------------
3.13 Contracts.
---------
(a) Schedule 3.13 constitutes an accurate and complete list of each
note, bond, mortgage, contract, license, commitment, indenture, agreement or
other arrangement of the Company in effect as of the date of this Agreement
which affects the Company, its business or its assets: (i) with a dealer,
broker, sales agency, advertising agency or other Person engaged in sales or
promotional activities; (ii) which requires aggregate payments by or to the
Company or involves an unperformed commitment or services having a value in
excess of $30,000; (iii) pursuant to which Company has made or will make loans
or advances, or has or will incur debts or become a guarantor or surety or
pledged its credit on or otherwise become responsible with respect to any
undertaking of another; (iv) which are indentures, credit agreements, loan
agreements, notes, mortgages, security agreements, leases of real property or
personal property and agreements for financing; (v) involving a partnership,
joint venture or other cooperative
undertaking; (vi) involving restrictions relating to the Company or its business
with respect to the geographical area of operations or scope or type of business
of the Company; (vii) which are powers of attorney or agency agreements or
written arrangements with any Person pursuant to which such Person is granted
the authority to act for or on behalf of the Company or any Principal
Stockholder or Stockholder; (viii) with respect to which the requirements for
performance extend beyond one (1) year from the date of this Agreement; (ix)
which give warranties with respect to the products or services of the Company;
(x) which relate to the employment of any Person; (xi) which are consulting and
professional advisor agreements; (xii) which cannot be terminated without
penalty or payment on ninety (90) days' (or less) notice; (xiii) with any of its
Affiliates; (xiv) with any Government; and (xv) which relates to the Company's
business not made in the ordinary course of business which are to be performed
at or after the date of this Agreement (together, the "Material Contracts").
------------------
(b) To the knowledge of the Company, no Material Contract has been
breached or canceled by any party thereto, and the Company has no knowledge of
any anticipated breach by any other party to any Material Contract. The Company
has performed all the obligations required to be performed by it in connection
with the Material Contracts and is not in default under or in breach of any
Material Contract, and no event has occurred which with the passage of time or
the giving of notice or both would result in a default or breach thereunder. The
Company does not have a present expectation or intention of not fully performing
any obligation pursuant to any Material Contract. Each Material Contract is
legal, valid, binding, enforceable and in full force and effect and shall
continue as such following the consummation of the transactions contemplated
hereby. Except as set forth on Schedule 3.13(b), no Material Contract obligates
the Company to process, manufacture or deliver products or perform services that
will result in a loss to the Company upon completion of performance.
(c) The Company has provided LifeMinders with, or made available to
LifeMinders, a true and correct copy of all written Material Contracts which are
required to be disclosed on Schedule 3.13, in each case together with all
amendments, waivers or other changes thereto (all of which are disclosed on
Schedule 3.13). Schedule 3.13 contains an accurate and complete description of
all material terms of all oral Material Contracts. No consent is required, and
no change of control provisions are triggered, with respect to, and no breach
will occur under, any of the Material Contracts in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby.
3.14 Litigation. There is no litigation, suit, proceeding, action, claim,
----------
demand or investigation, at law or in equity, pending or, to the knowledge of
the Company, threatened against or affecting the Company before any court,
agency, authority or arbitration tribunal. The Company has not received any
opinion or legal advice in writing to the effect that the Company is exposed
from a legal standpoint to any Liability or disadvantage which may be material
to the Company's business, as previously or presently conducted, or business
prospects. To the knowledge of the Company, there are no facts that would likely
result in any such litigation, suit, proceeding, action, claim or investigation.
The Company is not subject to or in default with respect to any notice, order,
writ, injunction or decree of any court, agency, authority or arbitration
tribunal.
3.15 Compliance with Laws. The Company has complied and is currently in
--------------------
compliance with all laws, regulations, rules, orders, permits, judgments,
decrees and other requirements and policies imposed by any Governmental
Authority applicable to it, its properties or the operation of its business. The
Company has not received any notice or citation for noncompliance with any of
the foregoing, and there exists no condition, situation or circumstance, nor has
there existed such a condition, situation or circumstance, which, after notice
or lapse of time, or both, would constitute noncompliance with or give rise to
future Liability with regard to any of the foregoing. The Company has all
licenses, permits, approvals, qualifications or the like, from any Government,
Governmental Authority or any Person necessary for the conduct of its business,
all such items are in full force and effect and are set forth on Schedule 3.15
and none of such items will be affected in any way by the consummation of the
Merger.
3.16 Government Contracts. Except as set forth on Schedule 3.16, the
--------------------
Company has never entered into any Contracts with the Government or any
Governmental Authority.
3.17 Environmental and Safety Matters.
(a) The Company has complied and is in compliance with all
Environmental and Safety Requirements (including without limitation all permits
and licenses required thereunder). The Company has received no oral or written
notice of any violation of, or any Liability (contingent or otherwise),
investigatory, corrective or remedial obligation under, any Environmental and
Safety Requirements. Neither this Agreement nor the consummation of the
transactions contemplated hereby will result in any obligations for site
investigation or cleanup, or notification to or consent of any Governmental
Authority, or third parties, pursuant to any so-called "transaction-triggered"
or "responsible property transfer" Environmental and Safety Requirements. The
Company has not released, disposed of or transported or arranged for the
disposal of any hazardous substance or owned or operated any property or
facility (and no such property or facility is contaminated by any such
substance) in a manner that has given or would give rise to Liabilities under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Resource Conservation and Recovery Act, as
------
amended or any other Environmental and Safety Requirements. There are no
underground storage tanks, asbestos-containing material in any form and
condition, polychlorinated biphenyls or landfills, surface impoundments or
disposal areas at any property or facility owned or operated by the Company. No
Environmental Lien has attached to any property owned, leased or operated by the
Company. No facts or circumstances with respect to the past or current operation
or facilities of the Company or any predecessor or Affiliate thereof (including,
without limitation any onsite or offsite disposal or release of hazardous
materials, substances or wastes) would give rise to the Company having any
Liability or corrective or remedial obligation under any Environmental and
Safety Requirements. Neither the Company nor any of its predecessors has, either
expressly or by operation of law, assumed or undertaken any Liability or
obligation of any other Person relating to Environmental and Safety
Requirements.
(b) For purposes of this Agreement, the term "Environmental and
-----------------
Safety Requirements" shall mean all federal, state, local and foreign statutes,
-------------------
regulations, ordinances and other provisions having the force or effect of law,
all judicial and administrative orders and determinations, all contractual
obligations and all common law, in each case concerning public
health and safety, worker health and safety and pollution or protection of the
environment (including, without limitation, all those relating to the presence,
use, production, generation, handling, transport, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, Release, threatened
Release, control or cleanup of any hazardous or otherwise regulated materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation); "Release" shall have the meaning
-------
set forth in CERCLA; and "Environmental Lien" shall mean any Lien, whether
------------------
recorded or unrecorded, in favor of any Governmental Authority, relating to any
Liability of the Company arising under any Environmental and Safety
Requirements.
3.18 Insurance. Schedule 3.18 lists each insurance policy maintained by or
---------
on behalf of the Company with respect to its directors, officers, employees,
properties, assets and business. The Company has provided or made available
copies to LifeMinders of all such insurance policies. All such insurance
policies are in full force and effect, and the Company is not and has never been
in default with respect to its obligations under any such insurance policies and
the Company has never been denied insurance coverage. The insurance coverage of
the Company is customary for corporations of similar size engaged in similar
lines of business. The Company is current in all premiums for its insurance
policies. The Company does not know of any threatened termination of, or
material premium increase with respect to, any of such policies. Except as set
forth on Schedule 3.18, the Company does not have any self-insurance or co-
insurance programs, and the reserves set forth on the Current Balance Sheet are
adequate to cover all anticipated Liabilities with respect to any such self-
insurance or co-insurance programs.
3.19 Intellectual Property.
(a) The Company has title to and ownership of (or adequate and valid
written licenses for) all patents, trademarks, service marks, trade names, works
of authorship, copyrights, trade secrets, information, know-how, proprietary
rights and processes used in its business as now conducted (the "Intellectual
------------
Property"), and the Company is not in conflict with or infringing upon the
--------
intellectual property rights of others. The Company is the sole and exclusive
owner of and has the sole and exclusive right to use the Intellectual Property
free and clear of any Liens or other rights or claims of others, except for
Intellectual Property designated as not owned by the Company ("Third Party
-----------
Intellectual Property") on Schedule 3.19. Schedule 3.19 contains a complete
---------------------
description of all Intellectual Property, including all Third Party Intellectual
Property, with a description of the agreements, licenses and other instruments
("Third Party Licenses") by which Company acquired rights in the Third Party
--------------------
Intellectual Property. No action, suit, proceeding or investigation with respect
to the Intellectual Property and/or the Third Party Intellectual Property (as it
relates to the Company) has ever been instituted, is pending or, to the
Company's Knowledge, threatened. None of the Intellectual Property interferes
with, infringes upon, conflicts with or otherwise violates the rights of others
or, to the knowledge of the Company, is being interfered with or infringed upon
by others, and none is subject to any outstanding order, decree or judgment.
Except as set forth on Schedule 3.19, there are no royalty, commission or
similar arrangements, and no licenses or agreements pertaining to any of the
Intellectual Property or products or methods of the Company's business. The
licenses and each of the agreements set forth on Schedule 3.19 are in full force
and effect and are not in breach or default; and no condition (including,
without limitation, the execution and
consummation of this Agreement) exists which, by the giving of notice or the
passage of time, would cause any such agreement or license to be in breach or
default or otherwise be terminable. To the Company's Knowledge, no product,
property, method of doing business, service, work of authorship or other
intellectual property right of any other Person infringes upon any of the
Intellectual Property. All items of Intellectual Property that are designated on
Schedule 3.19 as registered are properly registered and are in good standing and
enforceable under applicable law. The Company has entered into confidentiality
agreements that protect the Company's Intellectual Property with each of its
employees. The Company has used its best efforts to enforce its confidentiality
agreements and, to the Company's Knowledge, there has been no violation of such
agreements.
(b) No third party has claimed or, to the Company's Knowledge, has
reason to claim, that any person employed by or affiliated with the Company has
(i) violated or may be violating any of the terms or conditions of his
employment, noncompetition or nondisclosure agreement with such third party,
(ii) disclosed or may be disclosing or utilized or may be utilizing any trade
secret or proprietary information or documentation of such third party, or (iii)
interfered or may be interfering in the employment relationship between such
third party and any of its present or former employees. No third party has
requested information from the Company which suggests that such a claim might be
contemplated. To the Company's Knowledge, no person employed by or affiliated
with the Company has employed or proposes to employ any trade secret or any
information or documentation proprietary to any former employer and, to the
Company's Knowledge, no other person employed by or affiliated with the Company
has violated any confidential relationship which such person may have had with
any third party in connection with the development, manufacture or sale of any
product or proposed product or the development or sale of any service or
proposed service of the Company, and the Company has no reason to believe there
will be any such employment or violation. None of the execution or delivery of
this Agreement, or the carrying on of the business of the Company as officers,
employees or agents by any officer, director or key employee of the Company, or
the conduct or proposed conduct of the business of the Company, will, to the
Company's Knowledge, conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under any contract, covenant
or instrument under which any such person is obligated.
3.20 Accounts Receivable. All of the notes and accounts receivable (both
-------------------
billed and unbilled) of the Company are good and valid receivables (subject to
no counterclaims or offset) and shall be fully collectable within ninety (90)
days after the Closing Date. There are no individual accounts receivable of the
Company that are over $5,000 and ninety (90) days past due, except as set forth
on Schedule 3.20. No Person has any Lien on such receivables or any part
thereof, and no agreement for deduction, free goods, discount or other deferred
price or quantity adjustment shall have been made with respect to any such
receivables.
3.21 Suppliers and Customers.
-----------------------
(a) The relationships of the Company with its suppliers are good
commercial working relationships and no supplier has terminated or, to the
Company's Knowledge, threatened to terminate its relationship with the Company
or has, during the last twelve (12) months, decreased or limited, or, to the
Company's Knowledge, threatened to decrease or limit, its services, supplies or
materials to the Company. Except as set forth on Schedule 3.21(a), no supplier
is a sole source of supply of any good or service to the Company. The Company
does not have any knowledge that any of the suppliers intends to terminate or
otherwise modify adversely to the Company its relationship with the Company or
to decrease or limit its services, supplies or materials to the Company.
(b) Schedule 3.21(b) accurately sets forth a list of the top ten (10)
customers of the Company by revenue for the twelve (12) month period ended
January 31, 2000 (each a "Significant Customer"). The Company knows of no
--------------------
written or oral communication, fact, event or action which exists or has
occurred which would indicate that any Significant Customer or any other
customer of the Company shall stop, materially decrease the rate of, or
otherwise change the terms or conditions for, buying services or any materials
or products from the Company (whether as a result of the transaction
contemplated hereby or otherwise).
3.22 Related Party Transactions. Except as set forth on Schedule 3.22, no
--------------------------
officer, director, employee, stockholder or Affiliate of the Company or any
individual related by blood, marriage or adoption to any such individual or any
entity in which any such Person or individual owns any beneficial interest, is a
party to any agreement, contract, commitment or transaction with the Company or
has any interests in any property used by the Company.
3.23 Brokers. No Person has or will have, as a result of the transactions
-------
contemplated by this Agreement, any right, interest or claim against or upon any
Seller Party for any commission, fee or other compensation payable as a finder
or broker because or any act or omission by any Seller Party.
3.24 Bank Accounts; Powers of Attorney. Schedule 3.24 sets forth a true,
---------------------------------
correct and complete list of the names and locations of all banks and other
financial institutions at which the Company maintains an account or safe deposit
box, the names of all Persons authorized to withdraw therefrom or have access
thereto and the names of all Persons holding powers of attorney from the
Company.
3.25 Disclosure. No representation or warranty by the Company or the
----------
Principal Stockholders contained in this Agreement, and no representation,
warranty or statement contained in any list, certificate, schedule or other
instrument, document, agreement or writing furnished or to be furnished to, or
made with, LifeMinders pursuant hereto or in connection with the negotiation,
execution or performance hereof, contains or will contain any untrue statement
of fact or omits or will omit to state any material fact necessary to make any
statement herein or therein not misleading. There is no fact that has not been
disclosed to LifeMinders of which the
Company has knowledge that has a Material Adverse Effect or could reasonably be
anticipated to have a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL STOCKHOLDERS AND STOCKHOLDERS
As a material inducement to LifeMinders to enter into this Agreement, each
Principal Stockholder and Stockholder represents and warrants, severally and not
jointly, to LifeMinders, as of the date hereof and as of the Closing Date, that
with respect to himself or itself, the statements contained in this Article IV
are true and correct, except as set forth on the Disclosure Schedule attached
hereto.
4.1 Authorization of Transactions. Each Principal Stockholder and
-----------------------------
Stockholder has full power, authority and legal capacity to enter into this
Agreement and the other documents contemplated hereby to which such Principal
Stockholder or Stockholder is a party and to consummate the transactions
contemplated hereunder. This Agreement and the other documents contemplated
hereby to which such Principal Stockholder or Stockholder is a party are legal,
valid and binding obligations of such Person enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general.
4.2 No Violation to Result. The execution, delivery and performance of
----------------------
this Agreement and the other documents contemplated hereby and the consummation
of the transactions contemplated hereby and the fulfillment of the terms hereof:
(i) shall not result in a violation under any law, judgment, decree, order,
rule, regulation, permit or other legal requirement of any Governmental
Authority, applicable to such Principal Stockholder or Stockholder; and (ii)
shall not result in the creation or imposition of any Lien upon the Company
Common Shares in favor of any Person. Except as set forth on Schedule 4.2, no
notice to, filing with or consent of any Person is required for the execution,
delivery and performance by such Principal Stockholder or Stockholder of this
Agreement and the other documents contemplated hereby to which such Person is a
party, nor the consummation by such Person of the transactions contemplated
hereby or thereby.
4.3 Shares. The Principal Stockholders and Stockholders are the sole
------
holders of the issued and outstanding shares of capital stock of the Company,
and each such Person holds of record and beneficially owns the Company Shares as
are set forth on Schedule 3.4 free and clear of any Taxes, hypothecation,
assignment, deposit arrangement, Lien, preference, priority or other security
agreement, warrant, attachment, right of first refusal, preemptive right,
conversion, put, call or other restriction on transfer (other than restrictions
imposed by federal and state securities laws), or preferential arrangement of
any kind or nature whatsoever, except as set forth on Schedule 4.3. As of the
Effective Time, the Principal Stockholders and Stockholders will no longer have
any rights in and to the Company Shares. There are no proxies, voting rights,
stockholders agreements or other agreements or understandings with respect to
the voting or transfer of the capital stock of the Company, except as set forth
on Schedule 4.3.
4.4 LifeMinders Information.
-----------------------
(a) LifeMinders has made available to the Principal Stockholders
and Stockholders, during the course of this transaction, the opportunity to ask
questions of and receive answers from any of the officers or managers of
LifeMinders concerning LifeMinders and the LifeMinders Common Stock, and to
obtain any documents or additional information necessary to verify the
information provided to such Persons or otherwise relative to the financial data
and business of LifeMinders, to the extent that such parties possessed such
information or could acquire it without unreasonable effort or expense, and all
such questions, if asked, have been answered satisfactorily and all such
documents, if examined, have been found to be fully satisfactory.
(b) Each Principal Stockholder and Stockholder agrees and
acknowledges that neither LifeMinders nor its Affiliates, agents or
representatives makes, or has made in any meeting, presentation or discussion,
any representations or warranties relating to LifeMinders, the LifeMinders
Common Stock, the business and financial condition of LifeMinders or otherwise
in connection with the transactions contemplated hereby other than those
expressly set forth herein. Each Principal Stockholder and Stockholder
acknowledges and agrees that any cost estimates, projections or other
predictions, any data, any financial information or any memoranda or other
materials are not and shall not be deemed to be or to include representations or
warranties of LifeMinders. No person has been authorized by LifeMinders to make
any representation or warranty relating to LifeMinders or its business in
connection with the transactions contemplated hereby and, if made, each
Principal Stockholder and Stockholder further agrees that he or she has not
relied upon any such representations, warranties or other information relating
to LifeMinders, the LifeMinders Common Stock, the business and financial
condition of LifeMinders or otherwise in connection with the transactions
contemplated hereby (whether oral or written) other than as set forth herein.
(c) Each Principal Stockholder and Stockholder acknowledges and
agrees that any cost estimates, projections or other predictions, data,
financial information, memoranda or presentations in connection with the
transactions contemplated herein may contain forward-looking statements which
involve risks and uncertainties, and that actual results could differ materially
from those presented. Neither LifeMinders, its Affiliates, agents or
representatives makes, or has made, either herein or otherwise, any
representation or warranty with respect to any such forward-looking statements.
(d) Except as set forth on Schedule 4.4, each of the Principal
Stockholders and Stockholders is either (i) an "accredited investor" as such
term is defined in Regulation D promulgated under the Act or (ii) sophisticated
in financial matters and able to evaluate the risks and benefits of an
investment in shares of LifeMinders Common Stock received in connection with the
Merger.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LIFEMINDERS
LifeMinders represents and warrants to the Principal Stockholders and
Stockholders, as of the date hereof and as of the Closing Date, that the
statements contained in this Article V are true and correct, except as set forth
on the Disclosure Schedule attached hereto.
5.1 Organization. LifeMinders is a corporation, duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware and is
qualified to do business and in good standing in each jurisdiction where the
character or location of the assets or properties owned, leased or operated by
it or the nature of its activities makes such qualification necessary.
Acquisition Corp. is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Colorado.
5.2 Authority for Agreement. LifeMinders and Acquisition Corp. each has
-----------------------
full corporate power, authority and legal right to enter into this Agreement and
to consummate the transactions contemplated hereby. No other corporate
proceedings on the part of LifeMinders or Acquisition Corp. are necessary to
approve and authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by LifeMinders and Acquisition Corp. and is a legal,
valid and binding obligation of LifeMinders and Acquisition Corp., enforceable
against LifeMinders and Acquisition Corp. in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights in general.
5.3 No Violation to Result. The execution, delivery and performance of
----------------------
this Agreement and the consummation of the transactions contemplated hereby and
the fulfillment of the terms hereof: (i) are not in violation or breach of, do
not conflict with or constitute a default under, and will not accelerate or
permit the acceleration of the performance required by, any of the terms of the
Certificate of Incorporation or Bylaws of LifeMinders, the Articles of
Incorporation or Bylaws of Acquisition Corp. or any note, debt instrument,
security agreement or mortgage, or any other contract or agreement, written or
oral, to which either (a) LifeMinders or Acquisition Corp. is a party, or (b) by
which LifeMinders or Acquisition Corp. is bound; (ii) shall not be an event
which, after notice or lapse of time or both, will result in any such violation,
breach, conflict, default, or acceleration; (iii) shall not result in violation
under any law, judgment, decree, order, rule, regulation or other legal
requirement of any Governmental Authority applicable to LifeMinders or
Acquisition Corp.; and (iv) shall not result in the creation or imposition of
any Lien, possibility of Lien, or restriction in favor of any third Person upon
any of the properties or assets of LifeMinders or Acquisition Corp. Except as
set forth on Schedule 5.3, no notice to, filing with, or consent of, any Person
is necessary for the consummation by LifeMinders of the transactions
contemplated by this Agreement.
5.4 SEC Reports. LifeMinders has heretofore delivered to the Company,
-----------
Principal Stockholders and Stockholders complete (except in certain cases for
listed exhibits which are available upon request) and correct copies of
LifeMinders' Registration Statement on Form S-1, as amended, and declared
effective by the U.S. Securities and Exchange Commission (the "SEC") on November
19, 1999, and Registration Statement on Form S-1, as amended, and
declared effective by the SEC on February 8, 2000. As of their respective
effective dates, the Registration Statements did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. LifeMinders has made
all filings (collectively, the "Public Filings") with the SEC that it is has
--------------
been required to make under the Securities Act of 1933, as amended (the "1933
----
Act") and the Securities Exchange Act of 1934, as amended (the "1934 Act"). Each
--- --------
of the Public Filings has complied with the 1933 Act and 1934 Act, as
applicable, in all material respects.
5.5 LifeMinders Shares. The LifeMinders' Common Stock to be issued to the
------------------
Principal Stockholders and the Stockholders under this Agreement when issued in
accordance herewith will be duly authorized, validly issued, fully paid and
nonassessable and free and clear of any Liens, encumbrances or preemptive or
similar rights other than the Lien created pursuant to Section 1.3 hereof.
5.6 Securities Law Compliance. The LifeMinders' Common Stock to be issued
-------------------------
to the Principal Stockholders and the Stockholders under this Agreement (i) will
be free of any restrictions on transfer other than the restrictions on transfer
contained in this Agreement and under state and Federal securities laws, and
(ii) have been issued under a valid exemption from registration under applicable
Federal securities laws assuming the accuracy of the information contained in
the investment letters that the Principal Stockholders and the Stockholders will
deliver to LifeMinders.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Properties and Records. The Company shall afford to the
--------------------------------
officers, employees, attorneys, accountants and other authorized representatives
of LifeMinders access to all of the Company's assets, properties, books and
records and employees in order to afford LifeMinders as full an opportunity of
review, examination and investigation as it shall reasonably request of the
affairs of the Company, and LifeMinders shall be permitted to make extracts
from, or take copies of, such books, records (including the stock record and
minute books) or other documentation as may be reasonably necessary. The Company
shall furnish or cause to be furnished to LifeMinders such reasonable financial
and operating data and other information about the Company, as it is presently
being conducted, as it has been conducted in the past and as it is proposed to
be conducted in the future, and properties and assets which any of the
respective officers, employees, attorneys, accountants or other authorized
representatives of LifeMinders may reasonably request; provided, that,
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LifeMinders and its agents shall not unreasonably interfere with the operations
of the Company. No information or knowledge obtained in any investigation
pursuant to this Section 6.1 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the Parties to consummate the transactions contemplated by this Agreement.
6.2 Interim Covenants of the Company and the Principal Stockholders. From
---------------------------------------------------------------
the date of this Agreement until the Closing Date, except to the extent
expressly permitted by this Agreement or otherwise consented to by an instrument
in writing signed by LifeMinders or as otherwise set forth in Schedule 6.2, the
Company shall (and the Principal Stockholders shall
cause the Company to): (i) keep the Company organization intact and shall not
take or permit to be taken or do or suffer to be done anything other than in the
ordinary course of its business as the same is presently being conducted; (ii)
use their reasonable best efforts to keep available the services of the
Company's directors, officers, employees and agents and maintain the Facilities
in good condition; (iii) perform their obligations under the Material Contracts;
and (iv) maintain the goodwill and reputation associated with the Company.
Without limiting the generality of the foregoing, the Company shall not (and the
Principal Stockholders shall not cause the Company to):
(a) purchase, sell, lease or dispose of or make any contract for the
purchase, sale, lease or disposition of or make subject to a security interest
or any other Lien, any of their properties or assets, other than in the ordinary
and usual course of its business, consistent with the representations and
warranties contained herein, and not in breach of any of the provisions of this
Section 6.2, in each case for a consideration at least equal to the fair value
of such property or asset, provided, that, at or prior to the Closing, the
--------- -----
Company shall be entitled to transfer, including as a dividend, all of the
issued and outstanding capital stock of each of the WITI Subsidiaries to UCARF;
(b) except as set forth on Schedule 6.2(b), grant any salary increase
to, or increase the draw of, any of their officers, directors, employees or
agents, or enter into any new, or amend or alter any existing, employment,
bonus, incentive compensation, deferred compensation, profit sharing,
retirement, pension, stock option, group insurance, death benefit or other
fringe benefit plan, trust agreement or other similar or dissimilar arrangement,
or any employment or consulting agreement;
(c) incur any bank indebtedness or borrowings, whether or not in the
ordinary course of its business, or issue any commercial paper; enter into any
leases of real property;
(d) enter into any leases of real property;
(e) enter into any material leases of equipment and machinery;
(f) enter into any contract (i) which would be required to be listed
on Schedule 3.13 had it been entered into prior to the date hereof, or (ii) in
which any Affiliate of the Company or the Principal Stockholders has any
beneficial interest;
(g) redeem, purchase or otherwise acquire, directly or indirectly,
any shares of the Company's capital stock or debt securities or any option,
warrant or other right to purchase or acquire any such shares, or declare or pay
any dividend or other distribution (whether in cash, stock or other property)
with respect to such capital stock;
(h) create, incur or assume any liability or indebtedness, except in
the ordinary course of business consistent with past practices; or postpone or
defer the creation, incurrence, or assumption of any liability or indebtedness
that would otherwise be created, incurred or assumed in the ordinary course of
business absent the execution of this Agreement;
(i) pay or apply any of their assets to the direct or indirect
payment, discharge, satisfaction or reduction of any amount, directly or
indirectly, to or for the benefit of the Principal Stockholders or any Affiliate
thereof; and
(j) take any action, fail to take any action or enter into any
agreement or understanding that causes the Company, the Principal Stockholders
or Stockholders to be in breach or violation of any of the representations or
warranties made in Articles III and IV hereof.
6.3 Publicity. LifeMinders and the Company shall agree with each other as
---------
to the form and substance of any press release related to this Agreement or the
transactions contemplated hereby, and shall consult with each other as to the
form and substance of other public disclosures related thereto; provided,
--------
however, that nothing contained herein shall prohibit any Party hereto from
-------
making any disclosure required by applicable laws or regulations, after notice
to the other Party with the opportunity to comment to the extent that delay of
the disclosure is permitted under such laws or regulations.
6.4 No Solicitation. No Seller Party, nor any agent, officer, director or
---------------
any representative thereof, shall, during the period commencing on the date of
this Agreement and ending with the earlier to occur of the Closing or the
termination of this Agreement in accordance with its terms, directly or
indirectly, (a) solicit, encourage or initiate the submission of proposals or
offers from any person or entity for, (b) participate in any discussions
pertaining to, or (c) furnish any information to any person or entity, other
than LifeMinders, relating to, any acquisition or purchase of all or a material
amount of the assets of, or any equity interest in, the Company or a merger,
consolidation or business combination involving the Company. If any Seller Party
receives any unsolicited offer or proposal relating to any of the above, he or
it shall immediately notify LifeMinders thereof, including the identity of the
party making such offer or proposal and the specific terms of such offer or
proposal.
6.5 Notification of Certain Matters. The Sellers' Representative shall
-------------------------------
give prompt notice to LifeMinders of (a) the occurrence or non-occurrence of any
event the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of any Seller Party contained herein to be untrue or
inaccurate in any material respect at or prior to the Closing and (b) any
material failure of any Seller Party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such party hereunder.
The delivery of any notice pursuant to this Section 6.5 shall not, without the
express written consent of LifeMinders, be deemed to (x) modify the
representations or warranties hereunder of any Party, (y) modify the conditions
set forth in Article VII or (z) limit or otherwise affect the remedies available
hereunder to LifeMinders.
6.6 Tax Matters.
-----------
(a) All transfer, documentary, sales, use, stamp and registration
Taxes and fees (including any penalties and interest thereon) incurred by any
Principal Stockholder or Stockholder in connection with this Agreement shall be
paid by such Principal Stockholder or Stockholder when due. Each Principal
Stockholder and Stockholder shall, at his or its own expense, file all necessary
Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp and registration Taxes and fees. If required by
applicable law,
LifeMinders shall, and shall cause its Affiliates to, join in the execution of
any such Tax Returns and other documentation. The Company shall timely file all
federal and state income Tax Returns for taxable periods ending on or prior to
the Closing Date and all taxable periods including the Closing Date, and have
paid or made adequate reserves for all Taxes attributable to such periods. The
Company and LifeMinders, with the assistance of the Principal Stockholders,
shall file all federal and state income Tax Returns for all periods ending on or
after the Closing Date, including any short taxable year resulting from the
Merger. The Company shall pay all Taxes for all periods ending on or after the
Closing Date, including without limitation any Taxes arising from the
transactions contemplated by this Agreement. The Principal Stockholders and the
Stockholders shall not be obligated to pay any Taxes of the Company for any
periods ending on or after the Closing Date, including without limitation any
Taxes of the Company arising from the transactions contemplated by this
Agreement.
(b) The Parties shall cooperate fully, as and to the extent
reasonably requested by any other Party, in connection with the filing of Tax
Returns of the Company and any audit, litigation or other proceeding with
respect to Taxes of the Company. Such cooperation shall include the retention
and (upon another Party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The
Company and the Principal Stockholders agree (i) to retain all books and records
in their possession with respect to Tax matters and pertinent to the Company
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (ii) to
give the other Party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other Party so requests,
the Company or the Principal Stockholders, as the case may be, shall allow the
other Party to take possession of such books and records.
(c) LifeMinders shall give prompt notice to the Sellers'
Representative of the assertion of any claim, or the commencement of any suit,
action or proceeding with respect to any Tax liability of the Company for which
the Principal Stockholders are responsible under Section 3.10 or Section 6.6(a)
(by application of Section 9.1), and shall give the Sellers' Representative such
information with respect thereto as the Sellers' Representative may reasonably
request. The Principal Stockholders may, at their own expense, participate in
and, upon notice to LifeMinders, assume the defense of any such suit, action or
proceeding; provided, that, (i) the Principal Stockholders' counsel is
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reasonably acceptable to LifeMinders, (ii) the Principal Stockholders shall
thereafter consult with LifeMinders upon LifeMinders' reasonable request for
such consultation from time to time with respect to such suit, action or
proceeding and (iii) the Principal Stockholders shall not, without LifeMinders'
consent, agree to any settlement with respect to any Tax if such settlement
could adversely affect any Tax liability of LifeMinders, any Affiliate of
LifeMinders, or (with respect to any taxable period (or portion thereof)
beginning after the Closing Date) the Company. If the Principal Stockholders
assume such defense, LifeMinders shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Principal Stockholders. The Principal
Stockholders shall be liable for the fees and expenses of counsel employed by
LifeMinders for any period during which the Principal Stockholders have
not assumed the defense thereof. Whether or not the Principal Stockholders
choose to defend or prosecute any claim, all of the Parties hereto shall
cooperate in the defense or prosecution thereof.
(d) Each Party represents that it is being advised independently as
to the Tax consequences of the transactions contemplated hereby and is not
relying on any representation or statements made by any other Party as to such
Tax consequences.
6.7 Litigation Support. In the event and for so long as any Party actively
------------------
is contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Company, each of the other Parties will cooperate with such Person
or its counsel in the contest or defense, make available their personnel, and
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or defending
Party is entitled to indemnification therefor under Article IX below).
6.8 Reasonable Efforts. Each of the Parties hereto agrees to use all
------------------
reasonable efforts promptly to take, or cause to be taken, all actions and do or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulation to (a) obtain all consents, approvals or actions of, make
all filings with and give all notices to Governmental Authorities or any other
public or private third parties required of any Party hereto to consummate the
Merger and the other matters contemplated hereby, (b) provide such other
information and communications to such Governmental Authorities or other public
or private third parties as the other Party or such Governmental Authorities or
other public or private third parties may reasonably request in connection
therewith, and (c) consummate and make effective the transactions contemplated
by this Agreement including the satisfaction of all conditions hereto.
6.9 Further Assurances. Following the Closing, each of the Parties shall,
------------------
from time to time, execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be reasonably
necessary, or otherwise reasonably requested by any other Party to confirm and
assure the rights and obligations provided for in this Agreement and render
effective the consummation of the transactions contemplated hereby.
6.10 LifeMinders Common Shares.
-------------------------
(a) When the Principal Stockholders and Stockholders receive shares
of LifeMinders Common Stock pursuant to Section 1.2 hereof, the transfer agent
for LifeMinders shall have been instructed to place a legend in substantially
the following form on each certificate representing such shares:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") or the applicable securities laws of any state, but
have been issued in reliance upon exemptions from registration
contained in the Securities
Act and applicable state securities law. No sale, offer to sell or
other transfer of the securities represented by this certificate may
be made unless a registration statement under the Securities Act and
any applicable state securities laws is in effect with respect the
securities, or an exemption from the registration provisions thereof
is then in fact applicable."
In addition, the transfer agent shall place on each certificate, whether
registered or not, any legend required by the blue sky laws of any state to the
extent such laws are applicable to the stock represented by such certificate.
(b) In connection with the issuance of shares of LifeMinders Common
Stock pursuant to Section 1.2 hereof, LifeMinders agrees in each case, to the
extent necessary, to file a Notification Form for Listing of Additional Shares
with the Nasdaq National Market with respect to such shares.
(c) Each of the Principal Stockholders and Stockholders agrees that,
for the one period subsequent to Closing, such Person shall not directly or
indirectly sell, transfer or otherwise dispose of any of the LifeMinders Common
Shares, or any interest therein, including using any hedging or derivative
instruments that have the effect of changing his or its economic interest in
such shares; provided, that, UCARF and the Stockholders shall be entitled,
-------- ----
subject to applicable federal and state securities laws, to dispose of any
interest in their LifeMinders Common Stock commencing six (6) months after the
Closing pursuant to a hedge or similar derivative instrument.
(d) With a view to making available the benefits of certain rules and
regulations of the SEC that may at any time permit the sale of the LifeMinders
Common Shares, LifeMinders agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
the LifeMinders Common Shares are outstanding but not registered;
(ii) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of LifeMinders under the Act and
the Securities and Exchange Act of 1934, as amended (the "1934 Act"), at all
--------
times the LifeMinders Common Shares are outstanding but not registered; and
(iii) from and after the first anniversary of the Closing Date,
so long as the Principal Stockholders or Stockholders own any unregistered
LifeMinders Common Shares, to furnish any Principal Stockholder or Stockholder
upon written request (A) a copy of LifeMinders' most recent annual or quarterly
report and (B) such other publicly available information with respect to
LifeMinders as any Principal Stockholder or Stockholder may reasonably request
in availing himself, herself or itself of any rule or regulation of the SEC
allowing him, her or it to sell any such securities without registration.
6.11 Sellers' Representative.
-----------------------
(a) Each Principal Stockholder and Stockholder, by signing this
Agreement, designates X.X. Xxxxxxx, Xx. to be the Sellers' Representative for
purposes of this Agreement. The Principal Stockholders and Stockholders shall be
bound by any and all actions taken by the Sellers' Representative on their
behalf.
(b) LifeMinders shall be entitled to rely upon any communications or
writings given or executed by the Sellers' Representative. All notices to be
sent to the Principal Stockholders or Stockholders pursuant to this Agreement
may be addressed to the Sellers' Representative and any notices so sent shall be
deemed notice to any such Party. The Principal Stockholders and Stockholders
hereby consent and agree that the Sellers' Representative is authorized to
accept notice on their behalf pursuant thereto.
(c) The Sellers' Representative is hereby appointed and constituted
the true and lawful attorney-in-fact of each Principal Stockholder and
Stockholder, with full power in his or its name and on his or its behalf to act
according to the terms of this Agreement in the absolute discretion of the
Sellers' Representative; and in general to do all things and to perform all acts
including, without limitation, executing, delivering and/or amending all
agreements, certificates, receipts, instructions and other instruments
contemplated by or deemed advisable in connection with this Agreement. This
power of attorney and all authority hereby conferred is granted subject to the
interest of the Principal Stockholders and Stockholders hereunder and in
consideration of the mutual covenants and agreements made herein, and shall be
irrevocable and shall not be terminated by any act of any Principal Stockholder
or Stockholder, by operation of law, whether by such Person's death or any other
event.
6.12 Employee Matters. Other than terminations in the ordinary course of
----------------
business, as determined by the Board of Directors of the Company in the exercise
of its business judgment, LifeMinders and the Company shall use commercially
reasonable efforts to retain the services of all current employees of the
Company at least until the date that is six (6) months after the Effective Time.
Each current employee of the Company that continues with LifeMinders will be
provided benefits that are equivalent to the benefits that LifeMinders generally
provides its employees.
6.13 TWC Agreements. Following the Closing, each of the Parties shall
--------------
continue to perform its respective obligations, if any, under the contracts with
The Weather Channel, Inc. ("TWC"), and any other agreements related thereto, all
of which are listed on Schedule 6.13 (the "TWC Agreements"), on the same terms
and conditions as in effect on the Closing Date, except as otherwise modified in
accordance with this Agreement. The Parties obligated thereunder shall consult
with each other prior to making any material changes to the TWC Agreements or
the deliverables thereunder and subsequent to the Closing the Company shall use
commercially reasonable efforts to collect any amounts owing or that become owed
under the TWC Agreements. In the event (x) the amount collected by the Company
from TWC under the TWC Agreements after the Closing Date does not equal or
exceed (y) the sum of (I) the amount owed by the Company to UCAR or any of its
Affiliates as of the Closing Date as specified in the Discharge Agreement of
even date herewith plus (II) the amount, if any, payable by the Company to UCAR
or any of its Affiliates under the TWC Agreements after the Closing Date,
then, at the request of the Company or LifeMinders, the shortfall shall be
deemed satisfied, and UCAR shall not, thereafter, be entitled to collect any
such amount from the Company or LifeMinders. In the event UCAR seeks payment
from the Company or LifeMinders under the TWC Agreements for amounts that exceed
the amounts the Company or LifeMinders has actually collected from TWC
thereunder after the Closing Date, UCARF shall satisfy such difference so long
as the Company and LifeMinders use commercially reasonable efforts to collect
amounts owed by TWC under the TWC Agreements.
6.14 Options, Warrants, Convertible Securities, etc.
----------------------------------------------
(a) All outstanding options granted under the WITI Corporation 1996
Stock Option Plan (the "Company Option Plan") as of the Effective Time (each a
---------------------
"Company Stock Option") shall be assumed by LifeMinders in the manner provided
---------------------
for in this Section 6.14.
(b) Each outstanding Company Stock Option issued pursuant to the
Company Option Plan, whether or not vested or presently exercisable, shall be
assumed by LifeMinders and shall constitute an option to acquire, on the same
terms and conditions as were applicable under such assumed Company Stock Option
a number of shares of LifeMinders Common Stock and a exercise price per share
determined in accordance with the formula set forth on Schedule 6.14; provided,
however, that in the case of any Company Stock Option to which Section 421 of
the Code applies by reason of its qualification under Section 422 or Section 423
of the Code ("Qualified Stock Options"), the exercise price, the number of
-----------------------
shares purchasable pursuant to such Qualified Stock Option and the terms and
conditions of exercise of such Qualified Stock Option shall be determined in
order to comply with Section 424 of the Code. The value of the Company Stock
Options (for purposes of calculating the Merger Stock pursuant to Section
1.2(a)(ii)) are set forth on Schedule 6.14(b).
(c) LifeMinders shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of LifeMinders Common Stock for
delivery upon exercise of the Company Stock Options assumed in accordance with
this Section 6.14. Within sixty (60) days following the Closing Date,
LifeMinders shall file a registration statement on Form S-8 (or any successor
form) or another appropriate form with respect to shares of LifeMinders Common
Stock subject to such Company Stock Options, and maintain such registration
statement and the current status of the prospectus or prospectuses contained
therein for so long as such Company Stock Options remain outstanding.
(d) Donaldson, Simmons, Xxxxx Xxxxx and Xxxx Xxxxxx covenant and
agree that, prior to the first anniversary of the Closing Date, they will not,
without the prior written consent of LifeMinders (which consent may be withheld
in LifeMinders' sole and absolute discretion), directly or indirectly, sell,
transfer or otherwise dispose of shares acquired upon exercise of Company Stock
Options or Qualified Stock Options that represent more than twenty percent (20%)
of the total number of shares that could be acquired upon exercise of Company
Stock Options and Qualified Stock Options.
6.15 Maintenance of Assets. UCARF covenants and agrees it will maintain
---------------------
cash or readily marketable securities that have an aggregate value equal to at
least fifty percent (50%) of the portion of the Merger Consideration it receives
hereunder at least until the date that is
eighteen (18) months after the Closing Date; provided that Merger Stock held by
UCARF or Merger Stock owned by UCARF and held by LifeMinders pursuant to Section
1.3 shall be deemed readily marketable securities maintained by UCARF pursuant
to this Section 6.15.
6.16 Reorganization Treatment.
------------------------
(a) Except for actions or inaction otherwise contemplated by or
provided for in this Agreement, neither the Company nor LifeMinders has any
present plan or intention to cause the Company to issue additional shares of its
stock after the share exchange that would result in LifeMinders losing "control"
of the Company within the meaning of Section 368(c) of the Code.
(b) Neither LifeMinders nor any person related to LifeMinders within
the meaning of Treas. Reg. (S) 1.368-1(e)(3) is obligated, or has any plan or
intention, to reacquire any of the LifeMinders Common Stock issued in the
Merger, except as provided in Article IX.
(c) LifeMinders has no plan or intention to: (i) liquidate the
Company; (ii) merge the Company into another corporation; (iii) cause the
Company to sell or otherwise dispose of any assets, except for dispositions made
in the ordinary course of business; or (iv) sell or otherwise dispose of any of
the Company Shares acquired in the Merger, except for transfers described in
Section 368(a)(2)(C) of the Code.
ARTICLE VII
CONDITIONS TO LIFEMINDERS' OBLIGATIONS
All obligations of LifeMinders under this Agreement are subject to the
fulfillment and satisfaction, prior to or at the time at which the Closing Date
is scheduled to occur, of each of the following conditions precedent, any one or
more of which may be waived by LifeMinders in writing:
7.1 Representations and Warranties True at the Closing Date. All of the
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representations and warranties of the Seller Parties contained in this Agreement
shall be true, correct and complete in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date.
7.2 Performance. All of the terms, covenants, agreements and conditions of
-----------
this Agreement to be complied with, performed or satisfied by the Seller Parties
on or before the Closing Date shall have been duly complied with, performed or
satisfied.
7.3 No Litigation. No temporary restraining order, preliminary or
-------------
permanent injunction or other order issued by any court of competent
jurisdiction or other legal or regulatory restraint or provision challenging the
transactions or limiting or restricting the conduct or operation of the Company
following the transactions shall be in effect, nor shall any proceeding brought
by an administrative agency or commission or other Governmental Authority or
instrumentality, domestic or foreign, seeking any of the foregoing be pending.
There shall be no action, suit, claim or proceeding of any nature, pending or
threatened, against any Party, their respective properties or any of their
officers or directors, that could have a Material Adverse Effect.
7.4 No Material Adverse Change. There shall have been, between the date
--------------------------
hereof and the Closing Date, (i) no material adverse change in the condition,
financial or otherwise, of the Company, or (ii) no resignations or terminations
of, or indications of an intention or plan to resign, employment by a number of
employees such that the continued operations of the Company would be materially
and adversely affected.
7.5 Consents. The Company shall have received consents under all
--------
contracts, agreements, commitments, understandings and instruments to which the
Company is a party or by which it is bound which require the consent of any
other party or Person to the transactions contemplated hereby including, but not
limited to, the consents set forth on Schedule 4.2.
7.6 Governmental, Regulatory and Other Consents and Approvals. All
---------------------------------------------------------
consents, approvals and actions of, filings with and notices to, any
Governmental Authority or any other public or private third parties required of
the Seller Parties to consummate the Closing and the other matters contemplated
hereby shall have been obtained or made including. Any waiting period applicable
to the consummation of the Merger under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have expired or been
-------
terminated, and no action shall have been instituted by the Department of
Justice or the Federal Trade Commission and not been withdrawn or terminated
that challenges or seeks to enjoin the consummation of the transactions
contemplated hereby.
7.7 [Reserved.]
--------
7.8 Closing Deliveries of the Seller Parties. At the Closing, the Seller
----------------------------------------
Parties, as appropriate, shall perform and deliver the following, subject to
waiver by LifeMinders:
(a) each Principal Stockholder and Stockholder shall deliver an
investment letter in the form set forth as Exhibit A, the certificate(s)
---------
representing the Company Shares owned by him or it, all of which shall be free
and clear of any Lien, and stock powers duly endorsed in blank for the Pledged
Assets;
(b) each director of the Company shall deliver his or her respective
resignation as a director of the Company, which shall be effective as of the
Closing;
(c) each of the key employees listed on Schedule 7.8(c) as continuing
with the Company or LifeMinders after the Closing shall deliver an executed
employment agreement with the Company or LifeMinders, as the case may be, in the
form set forth as Exhibit B attached hereto; and each of the key employees
---------
listed on Schedule 7.8(c) who is requested to continue his employment with the
Company or LifeMinders after the Closing but refuses such engagement, and who
receives, directly or indirectly, any portion of the Merger Consideration, shall
deliver an executed non-competition agreement with the Company, in the form set
forth as Exhibit C attached hereto;
---------
(d) the Seller Parties and each of the Company's officers, directors,
employees and Affiliates shall deliver evidence of repayment in full in
accordance with their terms all debts and other obligations, if any, owed to the
Company;
(e) the Company shall deliver the original books of account, minute
books, minutes and other records of all meetings of the Company, the corporate
seal of the Company and such other documents, records, keys and other items as
shall be necessary for the operation of the business of the Company;
(f) the Company shall deliver an officer's certificate stating that
the representations and warranties of the Company contained in this Agreement
and in any certificate delivered by the Company pursuant hereto are true,
correct and complete in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made as
of such date, and that all of the terms, covenants, agreements and conditions of
this Agreement to be complied with, performed or satisfied by the Seller Parties
on or before the Closing Date have been duly complied with, performed or
satisfied;
(g) each of UCARF and the Company shall deliver an officer's
certificate, setting forth the resolutions of its board of directors (or other
evidence reasonably satisfactory to LifeMinders) authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, and certifying that such resolutions have not been amended or rescinded
and are in full force and effect;
(h) the Company shall deliver a good standing certificate for the
Company from the Secretary of State of the State of Colorado and from each state
in which the Company is qualified to do business, and certified charter
documents of the Company, each dated as of a date reasonably close to the
Closing Date;
(i) the Company shall deliver all consents, licenses, permits and
approvals as set forth on Schedule 3.3 required in connection with the
execution, delivery and performance of this Agreement and the continued conduct
of the business of the Company as conducted or proposed to be conducted as of
the Closing Date; and
(j) each of UCARF and the Company shall deliver an opinion of counsel
in the form set forth as Exhibit D attached hereto.
---------
7.9 Changes to Material Contracts; Disposition of Subsidiaries.
----------------------------------------------------------
(a) UCAR, UCARF and the Company shall have amended the Cross License
Agreement (Agreement No: WI-000-99), and any supplements or other agreements
related thereto, to provide the Company with a nonexclusive, worldwide, royalty-
free, irrevocable, assignable license to use, distribute and sublicense the
rights to use, make and have made and distribute, as appropriate, on a
commercial basis the UCAR Technologies (as defined therein), and such amendment
(or amendments) shall be satisfactory to LifeMinders.
(b) The Company shall have transferred all of the issued and
outstanding capital stock of each of the WITI Subsidiaries to UCARF pursuant to
one or more agreements that are satisfactory to LifeMinders.
7.10 Transition Services Agreement. UCAR and the Company shall have entered
-----------------------------
into a transition services agreement in the form set forth as Exhibit E attached
---------
hereto.
7.11 Options, Convertible Securities, etc. Any and all rights, options,
------------------------------------
warrants, convertible securities, subscription rights, conversion rights,
exchange rights or other agreements or commitments of any kind that could
obligate the Company to issue shares of capital stock, other than the Company
Stock Options and Qualified Stock Options, shall have been (x) exercised or
converted, as the case may be, and the holders thereof shall have agreed to be
bound by the terms and conditions of this Agreement, or (y) cancelled,
terminated or otherwise extinguished.
ARTICLE VIII
CONDITIONS TO THE SELLER PARTIES' OBLIGATIONS
All obligations of the Seller Parties under this Agreement are subject to
the fulfillment and satisfaction, prior to or at the time at which the Closing
Date is scheduled to occur, of each of the following conditions precedent, any
one or more of which may be waived by the Sellers' Representative in writing:
8.1 Representations and Warranties True at the Closing Date. All of the
-------------------------------------------------------
representations and warranties of LifeMinders contained in this Agreement shall
be true, correct and complete in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of such date.
8.2 Performance. All of the terms, covenants, agreements and conditions of
-----------
this Agreement to be complied with, performed or satisfied by LifeMinders on or
before the Closing Date shall have been duly complied with, performed or
satisfied.
8.3 No Litigation. No temporary restraining order, preliminary or
-------------
permanent injunction or other order issued by any court of competent
jurisdiction or other legal or regulatory restraint or provision challenging the
transactions or limiting or restricting the conduct or operation of the Company
following the transactions shall be in effect, nor shall any proceeding brought
by an administrative agency or commission or other Governmental Authority or
instrumentality, domestic or foreign, seeking any of the foregoing be pending.
There shall be no action, suit, claim or proceeding of any nature, pending or
threatened, against any Party, their respective properties, or any of their
officers or directors, that could have a Material Adverse Effect.
8.4 Closing Deliveries of LifeMinders. At the Closing, LifeMinders shall
---------------------------------
perform and deliver the following, subject to waiver by the Sellers'
Representative:
(a) LifeMinders shall pay each Stockholder and Principal Stockholder
his or its portion of the Merger Cash in immediately available funds by wire
transfer to the accounts set forth on Schedule 8.4(a);
(b) LifeMinders shall deliver irrevocable directions to its transfer
agent to issue to each Principal Stockholder and Stockholder the number of
shares of LifeMinders Common Stock payable to such Person pursuant to Section
1.2 hereof;
(c) LifeMinders shall deliver to each holder of Company Stock Options
an Assumption Agreement substantially in the form attached as Exhibit F;
---------
(d) LifeMinders shall deliver an officer's certificate, setting forth
the resolutions of its board of directors and the board of directors of
Acquisition Corp. (or other evidence reasonably satisfactory to the Sellers'
Representative) authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and certifying that such
resolutions have not been amended or rescinded and are in full force and effect;
(e) LifeMinders shall deliver an officer's certificate stating that
the representations and warranties of LifeMinders and Acquisition Corp.
contained in this Agreement and in any certificate delivered by LifeMinders or
Acquisition Corp. pursuant hereto are true, correct and complete in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made as of such date, and that all of
the terms, covenants, agreements and conditions of this Agreement to be complied
with, performed or satisfied by LifeMinders or Acquisition Corp. on or before
the Closing Date have been duly complied with, performed or satisfied; and
(f) LifeMinders shall deliver an opinion of counsel in the form set
forth as Exhibit G attached hereto.
---------
ARTICLE IX
INDEMNITY
9.1 General Indemnification.
-----------------------
(a) Subject to the limitations set forth in Section 9.3, and except
with respect to the matters set forth in Section 9.1(a)(vii) as to which the
sole Indemnifying Party is UCARF, each Principal Stockholder (individually, an
"Indemnifying Party" and collectively, the "Indemnifying Parties"), jointly and
------------------ --------------------
severally, but in each case limited to such Indemnifying Party's pro rata share
of the Merger Consideration received by the Principal Stockholders as a group (a
"Pro Rata Share"), covenants and agrees to indemnify, defend, protect and hold
--------------
harmless LifeMinders and its respective officers, directors, employees,
stockholders, assigns, successors and Affiliates (individually, an "Indemnified
-----------
Party" and collectively, the "Indemnified Parties") from, against and in respect
----- -------------------
of all Liabilities, losses, claims, damages, punitive damages, causes of
actions, lawsuits, administrative proceedings (including informal proceedings),
investigations, audits, demands, assessments, adjustments, judgments, settlement
payments, deficiencies, penalties, fines, Taxes, interest (including interest
from the date of such damages) and costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements of every kind, nature
and description) (collectively, "Damages") suffered, sustained, incurred or paid
-------
by the Indemnified Parties in connection with, resulting from or arising out of,
directly or indirectly:
(i) the inaccuracy of any representation or the breach of any
warranty by the Company or the Principal Stockholders in Article III;
(ii) the nonfulfillment of any covenant or agreement on the
part of any Seller Party set forth in this Agreement or in any agreement or
certificate executed and delivered by any such Party pursuant to this Agreement
or in the transactions contemplated hereby;
(iii) any and all benefits accrued under the Benefit Plans as of
the Closing Date and any and all other Liabilities arising out of, or in
connection with, the form or operation of the Benefit Plans prior to the Closing
Date to the extent the Company has not accrued such benefits or Liabilities on
its Financial Statements or as disclosed on Schedule 9.1(a)(iii);
(iv) any and all Liabilities under the Environmental and Safety
Requirements in connection with or arising out of Releases that occurred on or
prior to the Closing Date;
(v) any and all Liabilities resulting from any litigation,
suit, proceeding, action, claim, demand or investigation pending or threatened
against the Company or arising out of the operations of the Company prior to the
Closing Date;
(vi) any and all Liabilities for Taxes in connection with or
arising out of the operation of the Company's business prior to the Closing
Date;
(vii) any and all Liabilities arising out of or related to the
WITI Subsidiaries.
(b) Subject to the limitations set forth in Section 9.3, each
Principal Stockholder and Stockholder covenants and agrees to indemnify, defend,
protect and hold harmless the Indemnified Parties from, against and in respect
of all Damages suffered, sustained, incurred or paid by the Indemnified Parties
in connection with, resulting from or arising out of, directly or indirectly,
the inaccuracy of any representation or the breach of any warranty made by such
Principal Stockholder or Stockholder set forth in Article IV.
9.2 Indemnification Procedures. All claims or demands for indemnification
--------------------------
under this Article IX ("Claims") shall be asserted and resolved as follows:
------
(a) In the event an Indemnified Party has a Claim hereunder which
does not involve a Claim being asserted against or sought to be collected by a
third party, the Indemnified Party shall with reasonable promptness send a Claim
Notice (as defined in Section 9.2(b)) with respect to such Claim to the Sellers'
Representative, whose actions and decisions shall be binding upon the
Indemnifying Parties, with a copy to counsel as required by Section 13.7. If the
Sellers' Representative does not notify the Indemnified Party within the Notice
Period (as defined in Section 9.2(b)) that the Indemnifying Parties dispute such
Claim, the amount of such Claim shall be conclusively deemed a liability of the
Indemnifying Parties hereunder. In case the Sellers' Representative shall object
in writing to any Claim made in accordance with this Section 9.2(a), the
Indemnified Party shall have thirty (30) days to respond in a written statement
to the objection of the Sellers' Representative. If after such thirty (30)-day
period there remains a dispute as to any Claims, the Parties shall attempt in
good faith for thirty (30) days to agree upon the rights of the respective
Parties with respect to each of such Claims. If the Parties should so agree, a
memorandum setting forth such agreement shall be prepared and signed by the
Parties. If no such agreement can be reached after good faith negotiation,
either the Indemnified
Party or the Sellers' Representative may adjudicate such claim in accordance
with the terms of Section 13.9.
(b) In the event that any Claim for which the Indemnifying Parties
would be liable to an Indemnified Party hereunder is asserted against an
Indemnified Party by a third party, the Indemnified Party shall with reasonable
promptness notify the Sellers' Representative of such Claim, specifying the
nature of such claim and the amount or the estimated amount thereof to the
extent then feasible (which estimate shall not be conclusive of the final amount
of such Claim) (the "Claim Notice"). The Sellers' Representative shall have
------------
thirty (30) days from the receipt of the Claim Notice (the "Notice Period") to
-------------
notify the Indemnified Party (i) whether or not the Indemnifying Parties dispute
liability to the Indemnified Party hereunder with respect to such Claim and (ii)
if the Indemnifying Parties do not dispute such liability, whether or not they
desire, at their sole cost and expense, to defend against such Claim. In the
event that the Sellers' Representative notifies the Indemnified Party within the
Notice Period that the Indemnifying Parties do not dispute their obligation to
indemnify hereunder and desire to defend the Indemnified Party against such
Claim and, except as hereinafter provided, the Sellers' Representative shall
have the right to defend by appropriate proceedings, which proceedings shall be
promptly settled or prosecuted by the Sellers' Representative to a final
conclusion; provided, that, unless the Indemnified Party otherwise agrees in
--------------
writing, the Sellers' Representative may not settle any matter (in whole or in
part) unless such settlement includes a complete and unconditional release of
the Indemnified Party. If the Indemnified Party desires to participate in, but
not control, any such defense or settlement, the Indemnified Party may do so at
the Indemnified Party's sole cost and expense. If the Sellers' Representative
elects not to defend the Indemnified Party against such Claim, whether by
failure of the Sellers' Representative to give the Indemnified Party timely
notice as provided above or otherwise, then the Indemnified Party, without
waiving any rights against the Indemnifying Parties, may settle or defend
against any such Claim in the Indemnified Party's sole discretion and the
Indemnified Party shall be entitled to recover from the Indemnifying Parties the
amount of any settlement or judgment and, on an ongoing basis, all indemnifiable
costs and expenses of the Indemnified Party with respect thereto, including
interest from the date such costs and expenses were incurred.
(c) Notwithstanding the provisions of Section 9.2(b), if at any time,
in the reasonable opinion of the Indemnified Party, notice of which shall be
given in writing to the Sellers' Representative, any such Claim seeks relief
which could have a Material Adverse Effect on any Indemnified Party, the
Indemnified Party shall have the right to control or assume (as the case may be)
the defense of any such Claim and the amount of any judgment or settlement and
the reasonable costs and expenses of defense shall be included as part of the
indemnification obligations of the Indemnifying Parties hereunder. If the
Indemnified Party should elect to exercise such right, the Sellers'
Representative shall have the right to participate in, but not control, the
defense of such claim or demand at the sole cost and expense of the Indemnifying
Parties.
(d) Nothing herein shall be deemed to prevent the Indemnified Party
from making a claim, and an Indemnified Party may make a claim hereunder, for
potential or contingent claims or demands provided the Claim Notice sets forth
the specific basis for any such potential or contingent claim or demand to the
extent then feasible and the Indemnified Party has reasonable grounds to believe
that such a claim or demand may be made. The Indemnifying
Parties hereby waive any right to make a claim against LifeMinders or the
Company for contribution or indemnification for any Damages asserted against the
Indemnifying Parties pursuant to this Article IX or otherwise.
(e) The Indemnified Party's failure to give reasonably prompt notice
to the Sellers' Representative of any actual, threatened or possible claim or
demand which may give rise to a right of indemnification hereunder shall not
relieve the Indemnifying Parties of any Liability which they may have to the
Indemnified Party unless the failure to give such notice materially and
adversely prejudiced the Indemnifying Parties.
(f) The Indemnifying Parties shall be entitled to satisfy any
obligations under this Article IX to the Indemnified Parties either by (i)
delivering shares of LifeMinders Common Stock valued at the Merger Price,
whether or not such shares are pledged pursuant to Section 1.3, or (ii) paying
cash or other immediately available funds
9.3 Limitation.
----------
(a) The Indemnifying Parties shall not be liable to any Indemnified
Party with respect to any Claim arising from or relating to breaches of
representations and warranties hereunder until the aggregate amount of all
Damages exceeds $250,000 (the "Indemnification Threshold"), in which case the
-------------------------
Indemnifying Parties shall be liable for all such Damages.
(b) The Indemnification Threshold shall not apply to Damages arising
out of, or with respect to: (i) any breaches of the covenants of the Seller
Parties set forth in this Agreement (including, but not limited to, Section
6.13) or the representations and warranties made in Sections 3.4, 3.8, 3.10,
3.17 and 4.3; or (ii) the matters described in Sections 9.1(a)(vi) or (vii).
(c) The maximum amount for which any Indemnifying Party shall be
liable to the Indemnified Parties under this Agreement, and for the transactions
described herein, is fifty percent (50%) of the value of the portion of the
Merger Consideration, calculated at the Merger Price, received directly by such
Indemnifying Party, provided that such limitation shall not apply with respect
to an Indemnifying Party if such Indemnifying Party has committed fraud or made
an intentional misrepresentation, or with respect to the matters described in
Section 9.1(a)(vii). Notwithstanding the foregoing, each Indemnifying Party
shall only be liable for his or its Pro Rata Share of any indemnification
obligation; provided, that such limitation shall not apply with respect to
UCARF's indemnification obligation under Section 9.1(a)(vii).
9.4 Survival of Representations, Warranties, and Covenants. All
------------------------------------------------------
representations, warranties and covenants made by the Seller Parties in or
pursuant to this Agreement or in any document delivered pursuant hereto shall
survive the Closing and will remain in effect until, and expire on, the date
that is eighteen (18) months after the Closing Date.
9.5 Right of Offset. In the event any Seller Party shall be in breach of
---------------
any representation or warranty, or shall have an indemnification obligation to
LifeMinders, LifeMinders shall have the right to offset such amount against any
amounts owed by LifeMinders to such Person. Such remedy shall be in addition to
and not in limitation of any injunctive relief or other rights or remedies to
which LifeMinders is or may be entitled at law or equity or under this Agreement
(including any Exhibits hereto).
9.6 Waiver, Release and Discharge. Effective upon the Closing, each
-----------------------------
Principal Stockholder and Stockholder hereby irrevocably waives, releases and
discharges the Company from any and all Liabilities and obligations to such
Person of any kind or nature whatsoever, whether in his capacity as a
stockholder, an officer or director of the Company (including, without
limitation, in respect of rights of contribution or indemnification) and arising
on account of actions or omissions occurring on or prior to the Closing Date, in
each case whether absolute or contingent, liquidated or unliquidated, known or
unknown, and whether arising hereunder or under any other agreement or
understanding or otherwise at law or equity, and no such Party shall seek to
recover any amounts in connection therewith or thereunder from the Company,
provided, that, the Company's directors and officers shall not waive, release or
discharge any rights they may have against the Company in their capacity as
directors or officers under State Laws or any insurance policy insuring the acts
of directors and officers solely to the extent they do not give rise to
indemnification obligations under Section 9.1.
ARTICLE X
COVENANT NOT TO COMPETE
10.1 Prohibited Activities. (a) For the period commencing with Closing and
---------------------
ending on the fifth (5th) anniversary of the Closing, no Principal Stockholder
shall, for any reason whatsoever, directly or indirectly, for himself, itself or
on behalf of or in conjunction with any other Person:
(i) engage as a stockholder, officer, director, owner,
partner, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, in any business which provides
email reminder or similar services or that otherwise competes with the business
of LifeMinders as described in the Registration Statement on Form S-1, as
amended, and declared effective by the SEC on February 8, 2000, or the business
of the Company as described in the WITI Corporation Business Plan dated as of
January 3, 2000; provided, however, no Principal Stockholder shall be precluded
from the ownership of securities of corporations that are listed on a national
securities exchange or traded in the national over-the-counter market in an
amount that shall not exceed one percent (1%) of the outstanding shares of any
such corporation;
(ii) employ, or call upon for the purpose or with the intent of
enticing away from or out of the employ of LifeMinders or its Affiliates, any
Person who is at that time, or was within one (1) year prior to that time, an
employee of LifeMinders or its Affiliates; or
(iii) call upon any Person who is at that time, or has been
within one (1) year prior to that time, a customer of LifeMinders or its
Affiliates for the purpose of soliciting or selling products or services in
competition with LifeMinders or its Affiliates; or
(iv) publish any statement or make any statement (under any
circumstances reasonably likely to become public) critical of LifeMinders or its
Affiliates, or in any way adversely affecting or otherwise maligning the
reputation of LifeMinders or its Affiliates.
(b) The Parties intend that the covenants contained in this Section
10.1 shall be deemed to be a series of separate covenants, one for each county
in each state of the United States and, except for geographic coverage, each
such separate covenant shall be identified in terms to the covenant contained in
this Section 10.1.
10.2 Confidentiality.
---------------
(a) Each Party and each of their Affiliates, shall (i) treat and hold
as confidential any information concerning the business and affairs of
LifeMinders or the Company that is not already generally available to the public
(the "Confidential Information"), (ii) not disclose, transfer, transmit or use
------------------------
any of the Confidential Information except in connection with this Agreement,
and (iii) deliver promptly to LifeMinders or the Company, at the request and
option of LifeMinders or the Company, as the case may be, all tangible
embodiments (and all copies) of the Confidential Information which are in his or
its possession or under his or its control. Each Party hereby acknowledges that
such Confidential Information constitutes proprietary and trade secret
information of LifeMinders or the Company, as the case may be.
(b) In the event that any Party is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, such Person shall notify LifeMinders or
the Company, as the case may be, promptly of the request or requirement so that
LifeMinders or the Company, as the case may be, may seek an appropriate
protective order or waive compliance with the provisions of this Section 10.2.
If, in the absence of a protective order or the receipt of a waiver hereunder,
any Party is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or other Government official or agency, such Person
may disclose the Confidential Information to the tribunal; provided, that, such
Person shall use his best efforts to obtain, at the request and expense of
LifeMinders or the Company, as the case may be, an order or other assurance that
confidential treatment shall be accorded to such portion of the Confidential
Information required to be disclosed as LifeMinders or the Company, as the case
may be, shall designate.
10.3 Damages. Because of the difficulty of measuring economic losses to
-------
LifeMinders or the Company and their Affiliates as a result of a breach of the
foregoing covenant, and because of the immediate and irreparable damage that
could be caused to LifeMinders or the Company and their Affiliates for which it
would have no other adequate remedy, each Party agrees that the foregoing
covenant may be enforced by LifeMinders or the Company, as the case may be, in
the event of breach by such Party, in addition to, but not in lieu of, any other
available remedies, by injunctions and restraining orders and other equitable
remedies.
10.4 Reasonable Restraint. It is agreed by the Parties that the foregoing
--------------------
covenants in this Article X impose a reasonable restraint on the Parties in
light of the activities and business of LifeMinders and its Affiliates on the
date of the execution of this Agreement and the current plans of LifeMinders and
its Affiliates.
10.5 Independent Covenant. All of the covenants in this Article X shall be
--------------------
construed as an agreement independent of any other provision in this Agreement,
and the existence of any
claim or cause of action of any Party against LifeMinders or the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by LifeMinders or the Company of such covenants. It
is understood by the Parties hereto that the covenants contained in this Article
X are essential elements of this Agreement and that, but for the agreement of
the Principal Stockholders and Stockholders to comply with such covenants,
LifeMinders would not have agreed to enter into this Agreement. The Parties have
independently consulted with their respective counsel and have been advised
concerning the reasonableness and propriety of such covenants with specific
regard to the nature of the business conducted by LifeMinders. The Principal
Stockholders and Stockholders hereby agree that all covenants contained in this
Article X are reasonable and valid and waive all defenses to the strict
enforcement hereof by LifeMinders. Moreover, in the event any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth are unreasonable, then it is the intention of the Parties that such
restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall thereby be reformed. The covenants contained in this
Article X shall not be affected by any breach of any other provision hereof by
any Party hereto and shall have no effect if the transactions contemplated by
this Agreement are not performed.
10.6 Materiality. Each of the Seller Parties hereby agrees that the
-----------
covenants set forth in this Article X are a material and substantial part of the
transactions contemplated by this Agreement.
ARTICLE XI
TERMINATION
11.1 Termination.
-----------
(a) This Agreement may, by notice given on or prior to the Closing
Date, in the manner hereinafter provided, be terminated and abandoned at any
time prior to the Closing Date:
(i) by the Sellers' Representative if there has been a
material misrepresentation or a material default or breach by LifeMinders with
respect to its representations in this Agreement or in any ancillary document or
the due and timely performance of any of LifeMinders' covenants and agreements
contained in this Agreement or in any ancillary document, and such
misrepresentation, default or breach shall not have been cured within thirty
(30) days after receipt by LifeMinders of notice specifying particularly such
misrepresentation, default or breach;
(ii) by LifeMinders if there has been a material
misrepresentation or a material default or breach by any Seller Party with
respect to any of its representations in this Agreement or in any ancillary
document or the due and timely performance any Seller Party of the covenants and
agreements contained in this Agreement or in any ancillary document, and such
misrepresentation, default or breach shall not have been cured within thirty
(30) days after receipt by the Company of notice specifying particularly such
misrepresentation, default or breach;
(iii) by mutual agreement of the Parties;
(iv) by either the Company or LifeMinders if the Closing shall
not have occurred on or before the date that is thirty (30) days after the date
hereof or May 15, 2000, whichever is earlier; provided, that, the Party seeking
to terminate this Agreement shall not because of its breach or violation of any
representation, warranty or covenant contained herein, have caused the Closing
not to have occurred on or before such date;
(v) by LifeMinders if there has been a material adverse change
in the Company's business between the date hereof and the Closing Date; or
(vi) by the holders of at least seventy-five percent (75%) of
the Company Common Shares (acting through the Sellers' Representative), on the
one hand, or by LifeMinders, on the other hand, if there shall be a final
nonappealable order of a federal or state court in effect preventing the
consummation of the transactions contemplated by this Agreement; or there shall
be any action taken, or any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the transactions by any
governmental entity which would make the consummation of the transactions
illegal.
(b) In the event this Agreement is terminated pursuant to Section
11.1(a), all further obligations of the Parties hereunder shall terminate,
except for the obligations set forth in Sections 10.2 and 13.8, and except that
nothing in this Section 11.1(b) shall relieve any Party hereto of any liability
for breach of this Agreement. The Seller Parties further acknowledge that they
shall be deemed to be in breach of this Agreement if they fail to perform or
accomplish to LifeMinders' complete satisfaction any of the actions contemplated
by Article VI hereof which are to be satisfied as a condition to Closing.
ARTICLE XII
DEFINITIONS
12.1 Defined Terms. As used herein, the terms defined below shall have
-------------
the following meanings. Any of these terms, unless the context otherwise
requires, may be used in the singular or plural depending on the reference:
"Affiliate" shall mean as to any Party, any Person which directly or
---------
indirectly is in control of, is controlled by, or is under common control with,
such Party, including any Person who would be treated as a member of a
controlled group under Section 414 of the Code and any officer or director of
such Party. For purposes of this definition, an entity shall be deemed to be
"controlled by" a Person if the Person possesses, directly or indirectly, power
either to (i) vote ten percent (10%) or more of the securities (including
convertible securities) having ordinary voting power or (ii) direct or cause the
direction of the management or policies of such entity whether by contract or
otherwise; and, as to a Party who is a natural person, such person's spouse,
parents, siblings and lineal descendants. For the avoidance of doubt, from and
after the Closing, LifeMinders' Affiliates shall include without limitation the
Company.
"Company's Knowledge" or words of similar impart (whether or not
-------------------
capitalized) shall mean (a) the actual knowledge of the officers and directors
of the Company and (b) the knowledge that any Person identified in clause (a)
should have obtained in the reasonably prudent exercise of his or her duties as
an officer or director of the Company.
"GAAP" shall mean United States generally accepted accounting
----
principles, consistently applied.
"Government" shall mean any agency or instrumentality of the United
----------
States of America or any state or territory or subdivision thereof and any
agency or instrumentality of any of the foregoing.
"Governmental Authority" shall mean any court, tribunal, arbitrator,
----------------------
authority, agency, commission, official or other instrumentality of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision.
"Liabilities" shall mean, without limitation, any direct or indirect
-----------
liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether fixed or unfixed, whether xxxxxx or inchoate, whether
liquidated or unliquidated, and whether due or to become due), including,
without limitation, any liability for Taxes.
"Lien" shall mean any claim, lien, pledge, option, charge, easement,
----
security interest, right-of-way, encumbrance, mortgage or other right.
"Material Adverse Effect" shall mean a material adverse effect on (i)
-----------------------
the assets, the business or the condition (financial or otherwise), properties,
Liabilities, reserves, working capital, earnings, technology, prospects or
relations with customers, suppliers, distributors, employees or regulators of
the Company, or (ii) the right or ability to consummate the transactions
contemplated hereby.
"Person" shall mean an individual, a partnership, a limited liability
------
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a Governmental Authority.
"Tax" or "Taxes" shall mean all federal, state, local, foreign income,
--- -----
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax, fee, assessment or charge of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
----------
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE XIII
MISCELLANEOUS
13.1 Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the Seller Parties and their respective successors and
assigns; provided, however, that no such Party may make any assignment of this
Agreement or any interest herein without the prior written consent of
LifeMinders. This Agreement or any of the severable rights and obligations
inuring to the benefit of or to be performed by LifeMinders hereunder may be
assigned by LifeMinders to a third party, in whole or in part, and to the extent
so assigned, the Seller Parties hereby recognize said assignee as the party-in-
interest with respect to the rights and obligations assigned and agrees to look
solely to said assignee for the purpose of conferring benefits, or requiring
performance of obligations, assigned to it by LifeMinders.
13.2 Governing Law. This Agreement shall in all respects be interpreted,
-------------
construed and governed by and in accordance with the laws of the State of
Delaware, without regard to its principles of conflicts of laws.
13.3 Specific Enforcement. All of the Parties hereto acknowledge that the
--------------------
Parties will be irreparably damaged in the event that this Agreement is not
specifically enforced. Upon a breach or threatened breach of the terms,
covenants or conditions of this Agreement by any of the Parties hereto, the
other Parties shall, in addition to all other remedies, be entitled to a
temporary or permanent injunction, without showing any actual damage, or a
decree for specific performance, in accordance with the provisions hereof.
13.4 Severability. Each section, subsection and lesser section of this
------------
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect; provided, however, that if such unlawful clause is so
material to the Party for whose benefit the clause was originally included so
that such Party would not have entered into this Agreement without such unlawful
clause, the severability of such clause shall be determined pursuant to Section
13.9 hereof.
13.5 Amendment. This Agreement may be amended, supplemented or modified
---------
solely by execution of an instrument in writing signed by or on behalf of each
Party hereto.
13.6 Waiver. Any Party hereto may to the extent permitted by applicable law
------
(i) extend the time for the performance of any of the obligations or other acts
of the other Parties hereto, (ii) waive any inaccuracies in the representations
and warranties of the other Parties hereto contained herein or in any document
delivered pursuant hereto or (iii) waive compliance with any of the agreements
of the other Parties hereto contained herein. No such extension or waiver shall
be effective unless set forth in a written instrument duly executed by or on
behalf of the Party extending the time of performance or waiving any such
inaccuracy or non-compliance.
No waiver by any Party of any term of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term of this Agreement on any future occasion.
13.7 Notices. All notices, requests, consents, waivers, and other
-------
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given: (a) if personally delivered, upon
delivery or refusal of delivery; (b) if mailed by registered or certified United
States mail, return receipt requested, postage prepaid, upon delivery or refusal
of delivery; or (c) if sent by a nationally recognized overnight delivery
service, upon delivery or refusal of delivery. All notices, consents, waivers,
or other communications required or permitted to be given hereunder shall be
addressed as follows:
(a) If to LifeMinders:
XxxxXxxxxxx.xxx, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
with a copy to:
Xxxx Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
(b) If to the Sellers' Representative:
X.X. Xxxxxxx, Xx.
000 00/xx/ Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
and with a copy to:
Holland & Xxxx, LLP
000 00/xx/ Xxxxxx; Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
or at such other address or addresses as the Party addressed may from time to
time designate in writing pursuant to notice given in accordance with this
section.
13.8 Expenses. Except as otherwise provided in Article IX, all expenses
--------
of the Seller Parties (including, without limitation, financial advisory fees,
legal fees and expenses, broker and finder fees, fees and expenses of
accountants) incurred by such Parties in connection with the transactions
contemplated hereby shall be borne by the Company. All expenses of LifeMinders
(including, without limitation, financial advisory fees, legal fees and
expenses, broker and finder fees, fees and expenses of accountants) incurred by
LifeMinders in connection with the transactions contemplated hereby shall be
borne by LifeMinders. Notwithstanding the foregoing, or any other provision in
this Agreement to the contrary, the Company and LifeMinders will share equally
the filing fees required by the HSR Act, together with all rules and regulations
promulgated thereunder. Schedule 13.8 sets forth the expenses incurred in
connection with the Merger that will be used for purposes of calculating the
Merger Stock in accordance with Section 1.2(a)(ii).
13.9 Arbitration. Any unresolved dispute or controversy arising under or
-----------
in connection with this Agreement arising after the Closing shall be settled
exclusively by a three (3) person arbitration panel, with such arbitration
proceeding conducted in accordance with the rules of the American Arbitration
Association then in effect. LifeMinders shall select one of arbitrators, the
Sellers' Representative shall select one of the arbitrators, and the two
arbitrators so selected shall select the third arbitrator. The arbitrators shall
not have the authority to add to, detract from, or modify any provision hereof
nor to award punitive damages to any injured Party. A decision by a majority of
the arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The arbitration proceeding
shall be held in Fairfax County, Virginia. Notwithstanding the foregoing, the
Parties shall be entitled to seek injunctive or other equitable relief from any
court of competent jurisdiction, without the need to resort to arbitration.
13.10 Complete Agreement. This Agreement embodies the complete agreement
------------------
and understanding among the Parties and supersedes and preempts any prior
understandings, agreements or representation by or among the Parties, written or
oral, which may have related to the subject matter herein
13.11 Absence of Third Party Beneficiary Rights. No provision of this
-----------------------------------------
Agreement is intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, Affiliate, stockholder, employee or partner of any Party hereto or any
other Person.
13.12 Mutual Drafting. This Agreement is the mutual product of the
---------------
Parties, and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of each of the Parties, and shall not be construed for
or against any Party hereto.
13.13 Gender. Unless the context clearly indicates otherwise, where
------
appropriate the singular shall include the plural and the masculine shall
include the feminine or neuter, and vice versa, to the extent necessary to give
the terms defined herein and/or the terms otherwise used in this Agreement the
proper meanings.
13.14 Headings. The headings in this Agreement are intended solely for
--------
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
13.15 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which shall
constitute the same agreement. This Agreement and any document or schedule
required hereby may be executed by facsimile signature which shall be considered
legally binding for all purposes.
[Signatures Appear on Next Page]
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the date first above
written.
LIFEMINDERS
XxxxXxxxxxx.xxx, Inc.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
ACQUISTION CORP.
WITI Acquisition Corp.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: President
COMPANY
WITI Corporation
By: /s/ J. Xxxxx Xxxxxxxxx
-------------------------------
Name: J. Xxxxx Xxxxxxxxx
Title: President and CEO
PRINCIPAL STOCKHOLDERS
/s/ X.X. Xxxxxxx, Xx.
----------------------------------
The University Corporation for Atmospheric
Research Foundation
/s/ J. Xxxxx Xxxxxxxxx
----------------------------------
J. Xxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
STOCKHOLDERS
/s/ Xxxx Xxxxxxxxx
----------------------------------
Xxxx Xxxxxxxxx
/s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx
/s/ Xxxx Xxxxxx
----------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
----------------------------------
Xxxxxxxx Xxxxxxxx
/s/ X.X. Xxxxxxx
----------------------------------
X. X. Xxxxxxx, Xx.
/s/ Xxxxxxx Xxxxxx
----------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
----------------------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Custodian f/b/a
Xxxxxx Xxxxxxxxx, XXX - DLJ A/C #0XX000000
