Exhibit 10.26
STOCK PURCHASE AGREEMENT
AMONG
CMGI, INC.,
ENGAGE TECHNOLOGIES, INC.,
INTERNET PROFILES CORPORATION, AND
THE STOCKHOLDERS OF INTERNET PROFILES CORPORATION
LISTED ON SCHEDULE 1 ATTACHED HERETO
____________________________________
Dated as of April 7, 1999
____________________________________
TABLE OF CONTENTS
Page
SECTION 1 - PURCHASE AND SALE OF THE SHARES............................... 1
1.1 Purchase and Sale............................................. 1
1.2 Closing....................................................... 5
1.3 No Fractional Shares.......................................... 6
1.4 Stockholders' Representative.................................. 6
SECTION 2 - REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY........ 8
2.1 Organization and Qualification................................ 8
2.2 Authority to Execute and Perform Agreements................... 8
2.3 Capitalization and Title to Shares............................ 9
2.4 Subsidiaries and Other Affiliates............................. 9
2.5 Financial Statements.......................................... 10
2.6 Absence of Undisclosed Liabilities............................ 10
2.7 Intellectual Property......................................... 10
2.8 No Material Adverse Change.................................... 14
2.9 Tax Matters................................................... 15
2.10 Compliance with Laws.......................................... 16
2.11 No Breach..................................................... 17
2.12 Actions and Proceedings....................................... 17
2.13 Contracts and Other Agreements................................ 17
2.14 Bank Accounts and Powers of Attorney.......................... 19
2.15 Properties.................................................... 20
2.16 Customers..................................................... 20
2.17 Accounts Receivable........................................... 20
2.18 Employee Benefit Plans........................................ 21
2.19 Employee Relations............................................ 24
2.20 Employment Matters............................................ 25
2.21 Employee Conflicts............................................ 25
2.22 Transactions with Management.................................. 25
2.23 Insurance..................................................... 26
2.24 Brokerage..................................................... 26
2.25 Hazardous Materials........................................... 26
2.26 HSR........................................................... 27
2.27 Disclosure.................................................... 27
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SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.... 27
3.1 Authority to Execute and Perform Agreements................... 27
3.2 No Breach..................................................... 28
3.3 Title to Shares............................................... 28
3.4 Absence of Control............................................ 28
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF PURCHASERS.................. 28
4.1 Organization.................................................. 28
4.2 Authority to Execute and Perform Agreement.................... 29
4.3 Capitalization of CMGI........................................ 29
4.4 SEC Reports................................................... 30
4.5 No Material Adverse Change.................................... 31
4.6 No Breach..................................................... 31
4.7 Actions and Proceedings....................................... 31
4.8 Brokerage..................................................... 32
4.9 Disclosure.................................................... 32
4.10 Acquisition of Purchased Stock................................ 32
4.11 Engage Valuation.............................................. 32
4.12 Financial Statements.......................................... 32
SECTION 5 - COVENANTS AND AGREEMENTS...................................... 33
5.1 Conduct of Business........................................... 33
5.2 Corporate Examinations and Investigations..................... 34
5.3 Expenses...................................................... 35
5.4 Authorization from Others..................................... 35
5.5 Consummation of Agreement..................................... 35
5.6 Public Announcements and Confidentiality...................... 35
5.7 No Solicitation............................................... 36
5.8 Investment Representation and Lock-Ups........................ 36
5.9 Employment Related Instruments................................ 36
5.10 Disclosure Statements......................................... 36
5.11 Further Assurances............................................ 37
5.12 Stock Options................................................. 37
5.13 Short-Form Merger............................................. 38
5.14 Underwater Warrants........................................... 38
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONSOF EACH PARTY
TO CONSUMMATE THE TRANSACTION........................................ 39
6.1 Approvals..................................................... 39
6.2 Absence of Order.............................................. 39
6.3 Due Diligence................................................. 39
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SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATIONSOF PURCHASERS
TO CONSUMMATE THE TRANSACTION........................................ 39
7.1 Representations Warranties and Covenants...................... 40
7.2 Opinion of Counsel to Company................................. 40
7.3 Fees Bonuses and Indebtedness................................. 40
7.4 Stockholder Letters........................................... 40
7.5 Escrow Agreements............................................. 40
7.6 Non-Competition and Non-Solicitation Agreements............... 41
7.7 Non-Disclosure and Developments Agreements.................... 41
7.8 Officer's Certificate......................................... 41
7.9 Secretary's Certificate....................................... 41
7.10 1998 Audit.................................................... 41
7.11 Option Exchange Agreements.................................... 41
7.12 Employment Agreements......................................... 42
7.13 Convertible Debt.............................................. 42
7.14 Waivers and Consents.......................................... 42
7.15 Additional Items.............................................. 42
SECTION 8 - CONDITIONS PRECEDENT TO THE OBLIGATIONOF THE COMPANY AND
THE STOCKHOLDERS TO CONSUMMATE THE TRANSACTION....................... 42
8.1 Representations Warranties and Covenants...................... 42
8.2 Opinion of Counsel to Purchasers.............................. 42
8.3 Registration Rights Agreement................................. 42
8.4 Officer's Certificate......................................... 43
8.5 Secretary's Certificate....................................... 43
8.6 Additional Items.............................................. 43
SECTION 9 - TERMINATION, AMENDMENT AND WAIVER............................. 43
9.1 Termination................................................... 43
9.2 Effect of Termination......................................... 44
9.3 Termination Fee............................................... 44
9.4 Amendment..................................................... 44
9.5 Waiver........................................................ 44
SECTION 10 - INDEMNIFICATION.............................................. 45
10.1 Survival...................................................... 45
10.2 Obligation of Stockholders' to Indemnify...................... 45
10.3 Notice and Defense of Claims.................................. 46
SECTION 11 - MISCELLANEOUS................................................ 47
11.1 Material Adverse Change....................................... 47
11.2 Notices....................................................... 47
11.3 Entire Agreement.............................................. 49
11.4 Governing Law................................................. 49
11.5 Binding Effect: No Assignment................................. 49
11.6 Variations in Pronouns........................................ 49
11.7 Counterparts.................................................. 49
11.8 Disclosure Schedules.......................................... 49
11.9 Arbitration................................................... 49
11.10 Letter Agreement.............................................. 49
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EXHIBIT 10.26
STOCK PURCHASE AGREEMENT
THIS AGREEMENT dated as of April 7,1999, among CMGI, Inc., a Delaware
corporation ("CMGI"), Engage Technologies, Inc., a Delaware corporation and a
majority- owned subsidiary of CMGI ("Engage," collectively with CMGI the
"Purchasers," and each individually a "Purchaser"), Internet Profiles
Corporation, a California corporation (the "Company"), and the stockholders of
the Company listed on Schedule 1 hereto (collectively, the "Stockholders" and
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each a "Stockholder").
WITNESSETH
WHEREAS each of the Stockholders owns (or will own as of the Closing (as
defined) through conversion or otherwise) the number of the issued and
outstanding shares (collectively, the "Shares" and each a "Share") of the common
stock, par value $0.001 per share (the "Common Stock"), of the Company set forth
opposite such Stockholder's name and address on Schedule 1 attached hereto,
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which Shares in the aggregate represent at least 90% of the issued and
outstanding shares of the capital stock of the Company on a fully diluted, as-
converted basis on the date of this Agreement;
WHEREAS Purchasers desire to acquire the Shares from the Stockholders, and
the Stockholders desire to sell the Shares to Purchasers, upon the terms and
subject to the conditions hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and of the covenants set
forth below, the parties hereby agree as follows:
SECTION 1 - PURCHASE AND SALE OF THE SHARES
1.1 Purchase and Sale.
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(a) For the purposes of this Agreement:
(i) "Fully Diluted Shares" means the total number of outstanding
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shares of common stock of the Company as determined on a fully diluted, as
converted basis with respect to any convertible preferred stock, convertible
notes, other convertible securities, options or other rights to acquire a
capital interest in or stock of the Company; provided, however, that "Fully
Diluted Shares" shall not be deemed to include the Underwater Warrants (as
defined). The number of Fully Diluted Shares is 59,068,868.
(ii) "CMGI Stock Number" means, with respect to a certain dollar
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value, the number of shares of CMGI common stock, par value $0.01 per share
("CMGI Common Stock"), equal to such dollar value when a share of CMGI Common
Stock is valued at the average of the closing prices per share of CMGI Common
Stock as reported on the NASDAQ National Market System during the twenty (20)
consecutive trading days ending on March 1, 1999. In accordance with the
foregoing, each share of CMGI Common Stock is valued at $113.31 per share. The
CMGI Stock Number shall be adjusted, as necessary, to reflect any stock split,
reverse stock split, stock dividend or stock combination affecting CMGI Common
Stock as a class occurring after the third trading day prior to the Closing
Date.
(iii) "Engage Stock Number" means, with respect to a certain
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dollar value, the number of shares of Engage common stock, par value $0.01 per
share ("Engage Common Stock"), valued at a pre-Closing valuation for Engage of
Two Hundred Million Dollars ($200,000,000). There are 19,777,041 shares of
Engage Common Stock outstanding as of January 31, 1999 determined on a fully
diluted, as converted basis with respect to any convertible preferred stock,
convertible notes, other convertible securities, options or other rights to
acquire a capital interest in or stock of Engage. In accordance with the
foregoing, each share of Engage Common Stock is valued for purposes hereof at
$10.11 per share.
(b) Upon the terms and subject to the conditions of this Agreement, at
the Closing, each of the Stockholders agrees to sell to Purchasers, and
Purchasers agree to purchase from each of the Stockholders, all of the Shares
owned by each such Stockholder, as set forth opposite such Stockholder's name on
Schedule 1 hereto. The purchase price for each Share (the "Base Purchase Price")
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shall be an amount equal to the product of Thirty Million Dollars ($30,000,000)
and the Stockholders' Interest (as defined), less any reduction pursuant to
Section 7.3 hereof, and (in order to provide for payment by the Company,
following the Closing, of certain fees described in Section 7.3) divided by the
product of the Stockholders' Interest and the number of Fully Diluted Shares.
"Stockholders' Interest" means the aggregate percentage interest of the Fully
Diluted Shares (as used to calculate the Base Purchase Price) held by the
Stockholders. The Base Purchase Price shall be paid in CMGI Common Stock in a
CMGI Stock Number derived from 80% of the Base Purchase Price and in Engage
Common Stock in an Engage Stock Number derived from 20% of the Base Purchase
Price (collectively, the "Initial Consideration").
(i) Within 30 days after March 31,2000, Purchasers shall deliver
to the Stockholders' Representative (as defined below), a profit and loss
statement showing gross revenues for the Company, prepared in accordance with
generally accepted accounting principles on a basis consistent with the
accounting principles utilized in the preparation of the Company's year-end
financial statements, and including all revenues derived from the sale of
products and services of the Company, whether recorded on the books of the
Company or on any other direct or indirect subsidiary of CMGI ("Gross
Revenues"). Purchasers shall provide the Stockholders' Representative with
reasonable access to the work papers in connection with such calculation and
shall make themselves available at reasonable times upon request of the
Stockholders' Representative to discuss with Purchasers such calculation.
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(ii) If the Stockholders' Representative objects to Purchasers'
calculation of Gross Revenues, the Stockholders' Representative shall deliver to
Purchasers, within 30 days after receipt of Purchasers' calculation (the
"Objection Period"), a written statement describing its objection thereto. In
the event that the Stockholders' Representative fails to deliver such written
statement to Purchaser prior to the expiration of the Objection Period,
Purchasers' calculation shall be final, conclusive and binding upon the parties
hereto. In the event that the Stockholders' Representative delivers such
written statement prior to the expiration of the Objection Period, the parties
will use all reasonable efforts to resolve any dispute. If a final resolution
is not obtained within 30 days after the Stockholders' Representative has
delivered such written notice, either the Purchasers or the Stockholders'
Representative may submit any remaining disputes for resolution to a nationally-
recognized accounting firm mutually agreeable to Purchasers and the
Stockholders' Representative (the ("Selected Accountants"), which firm shall
resolve such dispute within 30 days following its selection. In resolving any
dispute, the Selected Accountants shall examine only those issues in dispute and
shall not assign a value greater than the highest value claimed by a party or
lower than the lowest value claimed by a party. The Selected Accountants'
determination shall be final, binding and conclusive upon the parties hereto.
The calculation of Gross Revenues as finally revised based on the mutual
agreement of Purchasers and the Stockholders' Representative shall be final,
conclusive and binding upon the parties hereto.
(iii) Purchasers and the Stockholders' Representative shall
cooperate with the Selected Accountants in all respects, including providing the
Selected Accountants with all work papers and back-up materials used in
preparation and review of their calculations of Gross Revenues.
(iv) All fees, expenses and costs of the Selected Accountants
shall be borne by as determined by the Selected Accountants, or, if no such
determination is made, by the party (Purchasers or the Stockholders'
Representative), whose estimation of Gross Revenues, taking into account any
changes made prior to submission to the Selected Accountants, is farthest from
the sum of Gross Revenues as finally determined by the Selected Accountants.
(v) In the event that (x) Gross Revenues as finally determined is
$10,800,000 or more, and (y) for one year following the Closing Date (as defined
below) (1) ▇▇▇▇▇▇▇ ▇▇▇▇ has not voluntarily terminated his employment with the
Company except for Good Reason, and has not been terminated for Cause, (2) at
least eighty percent (80%) of all employees of the Company employed on a full-
time basis on the Closing Date have not voluntarily ceased employment with the
Company (other than for Good Reason) or been terminated for Cause, and (3) at
least eighty
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percent (80%) of the employees of the Company, as of the Closing Date, listed on
Schedule 2 attached hereto have not voluntarily ceased employment with the
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Company (other than for Good Reason) or been terminated for Cause, then the
Purchasers shall pay to each Stockholder (other than those Stockholders that are
terminated for Cause prior to March 31,2000 or who voluntarily terminate their
employment for other than Good Reason) additional consideration equal to five
percent of the Initial Consideration (without giving effect to any reduction
pursuant to Section 7.3) payable to such Stockholders pursuant to Section
1.1(b).
"Good Reason" shall mean any of the following: (w) the employer's material
breach of employees' employment agreement or other agreement with the employer
or a material reduction in the employee's compensation level other than for
Cause; (x) the assignment, other than for Cause, of the employee without his
consent to a position, responsibilities, or duties of a materially lesser status
or degree of responsibility than his position, responsibilities, or duties upon
the Closing Date or a material diminution, other than for Cause, in such
employee's job title on the Closing Date; (y) the relocation of the employer's
principal executive offices outside of the San Francisco/Bay Area; or (z) the
requirement by the employer that the employee be based anywhere other than the
San Francisco/Bay Area, in either case without the employee's consent. "Cause"
shall mean (1) the employee's material breach of any agreement entered into with
the employer; (2) the employee's material failure to adhere to any written
employer policy consistent with such employee's position, responsibilities and
duties, if the employee has been given a reasonable opportunity to comply with
such policy or cure his failure to comply; (3) the misappropriation of any of
the employer's funds or material property; (4) the conviction of, the indictment
for, or the entering of a guilty plea or plea of no contest with respect to a
felony; or (5) the employee's prolonged absence or gross dereliction of duty,
after written notice and reasonable opportunity to cure.
(vi) Further, upon the terms and subject to the conditions of
this Agreement, if the Company, as of March 31, 2000, secures contribution to
the Engage database of the data generated by visitors to the web sites of the
Company's customers ("Clickstream Data") (A) equal to 65% or more of the volume
of such data contributed to Company as of the Closing Date and (B) from 75% or
more of its customer base (determined as of the Closing Date or, if Company has
a greater number of customers on March 31, 2000, as of March 31, 2000) then the
Purchasers shall pay to each Stockholder (other than any employees of the
Company on the Closing Date who are not employees of the Company at March 31,
2000 unless such employee has been terminated other than for Cause or has
voluntarily ceased employment with the Company for other than Good Reason prior
to such date) additional consideration equal to five percent (5%) of the Initial
Consideration (without giving effect to any reduction pursuant to Section 7.3)
payable to such Stockholder pursuant to Section 1.1 (b).
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(vii) To the extent that any amounts otherwise payable in
accordance with the foregoing are not payable to any Stockholder because he has
been terminated for Cause or has voluntarily ceased employment with the Company
for other than Good Reason prior to March 31, 2000, such amounts shall be paid
to all Stockholders pro rata in accordance with Schedule 1. Fifty percent (50%)
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of any payments due under Subsections 1.1 (b)(v) and (vi) will be paid directly
into Escrow (as defined) and shall be subject to the Escrow Agreement (as
defined) and the remaining fifty percent (50%) shall be paid directly to the
Stockholders; provided, however, that the amount payable directly to the
Stockholders shall be reduced, and the amount payable into Escrow shall be
increased, to the extent that the amount in Escrow on the first anniversary of
the Closing Date is less than $3 million. The consideration due under
Subsections 1.1 (b)(v) and (vi), if any ("Contingent Consideration"), will be
payable no later than May 5, 2000 or, if there is a dispute concerning the Gross
Revenues or Clickstream Data, then no later than five days after final
resolution of such dispute, in (a) registered CMGI Common Stock, (b) cash or (c)
a mixture thereof, at the sole discretion of the Purchasers. CMGI Common Stock
used in any part to pay such consideration shall be valued in a manner
consistent with the definition of "CMGI Stock Number", except that March 31,
2000 shall be substituted for March 1, 1999 therein for purposes of this
Subsection 1.1(b)(vii).
(c) Six million dollars' worth of the Initial Consideration (subject
to increase pursuant to Section 1.3 herein), allocable among the Stockholders
pro rata in accordance with Schedule 1 (without giving effect to Common Stock
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issuable upon exercise of the stock options referred to in Section 5.12), in the
ratio of 80% CMGI Common Stock and 20% Engage Common Stock, shall, at Closing,
be paid directly into escrow (the "Escrow"), which Escrow shall be the subject
of an escrow agreement in form and substance as set forth on Exhibit A hereto
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(the "Escrow Agreement").
(d) Anything to the contrary contained herein notwithstanding, the
first one million dollars payable to the Stockholders following the Closing
Date, either from Escrow or as Contingent Consideration, shall be paid in full.
All additional amounts otherwise so payable to the Stockholders shall be reduced
by an amount equal to 1% if out of the Escrow and 1% divided by the
Stockholders' Interest if in the form of the Contingent Consideration.
1.2 Closing. The closing (the "Closing") of the purchase and sale of the
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Shares hereunder shall take place at the offices of ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 12:00 p.m. (EST) on April 7,
1999, or at such other time or place as Purchasers and the Stockholders'
Representative (as hereinafter defined), acting on behalf of the Stockholders,
agree (the "Closing Date"). At the Closing, each Stockholder shall deliver to
Purchasers the certificate or certificates for the Shares owned by such
Stockholder, duly endorsed or accompanied by stock powers duly endorsed in
blank, reasonably satisfactory to the Purchasers in all respects. At the
Closing, there shall be delivered to the respective parties the opinions,
certificates and instruments provided to be delivered at the closing under
Sections 6, 7 and 8 hereof.
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1.3 No Fractional Shares. No certificates representing fractional CMGI
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Common Stock shares or Engage Common Stock shares shall be issued to
Stockholders. All fractional shares otherwise payable directly to Stockholders
shall be-paid into Escrow and aggregated with all other shares (whole and
fractional) payable into Escrow, to the effect that one certificate representing
all whole shares of CMGI Common Stock payable into Escrow and one certificate
representing all whole shares of Engage Common Stock payable into Escrow shall
be deposited into Escrow together with cash in lieu of any one remaining
fractional share of CMGI Common Stock and any one remaining share of Engage
Common Stock in an amount equal to the applicable fraction multiplied by the
applicable dollar value per share of CMGI Common Stock or Engage Common Stock,
determined in accordance with the definitions of "CMGI Stock Number" and "Engage
Stock Number."
1.4 Stockholders' Representative.
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(a) In order to efficiently administer (i) the waiver of any condition
to the obligations of the Stockholders to consummate the transactions
contemplated hereby and (ii) the defense and/or settlement of any claims for
which the Stockholders may be required to indemnify Purchasers pursuant to
Section 10 hereof the Stockholders hereby designate ▇▇▇▇▇ ▇▇▇▇ as their
representative (the "Stockholders' Representative").
(b) The Stockholders hereby authorize the Stockholders' Representative
(i) to take all action necessary in connection with the waiver of any condition
to the obligations of the Stockholders to consummate the transactions
contemplated hereby, or the defense and/or settlement of any claims for which
the Stockholders may be required to indemnify Purchasers pursuant to Section 10
hereof; (ii) to give and receive all notices required to be given and received
to and from the Stockholders under this Agreement and under any Related
Instruments (as defined below), and (iii) to take any and all additional actions
(including signing on their behalf) as is contemplated to be taken by or on
behalf of the Stockholders by the terms of this Agreement and any agreement or
document related thereto (a "Related Instrument").
(c) In the event that the Stockholders' Representative dies, becomes
unable to perform his or her responsibilities hereunder or resigns from such
position, Stockholders holding, prior to the Closing, a majority of the Shares
as set forth on Schedule 1 attached hereto shall select another representative
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to fill such vacancy and such substituted representative shall be deemed to be
the Stockholders' Representative for all purposes of this Agreement and any
Related Instrument.
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(d) All decisions and actions by the Stockholders' Representative,
including, without limitation, any agreement between the Stockholders'
Representative and Purchasers relating to the defense or settlement of any
claims for-which the Stockholders may be required to indemnify the Purchasers
pursuant to Section 10 hereof shall be binding upon all of the Stockholders, and
no Stockholder shall have the right to object, dissent, protest or otherwise
contest the same.
(e) By their execution of this Agreement, the Stockholders agree that:
(i) the Purchasers shall be able to rely conclusively on the
instructions and decisions of the Stockholders' Representative as to the
determination of the settlement of any claims for indemnification by the
Purchasers pursuant to Section 10 hereof or any other actions required to be
taken by the Stockholders' Representative hereunder, and no party hereunder
shall have any cause of action against Purchasers for any action taken by
Purchasers in reliance upon the instructions or decisions of the Stockholders'
Representative;
(ii) all actions, decisions and instructions of the
Stockholders' Representative shall be conclusive and binding upon all of the
Stockholders and no Stockholder shall have any cause of action against the
Stockholders' Representative for any action taken, decision made or instruction
given by the Stockholders' Representative under this Agreement, except for fraud
or willful breach of this Agreement by the Stockholders' Representative;
(iii) the provisions of this Section 1.4 are independent and
severable, are irrevocable and coupled with an interest and shall be enforceable
notwithstanding any rights or remedies that any Stockholder may have in
connection with the transactions contemplated by this Agreement;
(iv) remedies available at law for any breach of the provisions
of this Section 1.4 are inadequate; therefore, Purchasers and the Company shall
be entitled to temporary and permanent injunctive relief without the necessity
of proving damages if either of the Purchasers or the Company brings an action
to enforce the provisions of this Section 1.4; and
(v) the provisions of this Section 1.4 shall be binding upon
the executors, heirs, legal representatives and successors of each Stockholder,
and any references in this Agreement to a Stockholder or the Stockholders shall
mean and include the successors to the Stockholders' rights hereunder, whether
pursuant to testamentary disposition, the laws of descent and distribution or
otherwise.
(f) All reasonable fees and expenses incurred by the Stockholders'
Representative shall be paid from the funds in Escrow, and if such funds are
insufficient, then by the Stockholders in proportion to their ownership of
Shares as set forth on Schedule 1 attached hereto.
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SECTION 2 - REPRESENTATIONS AND WARRANTIES RELATING TO
THE COMPANY
Except as set forth on the disclosure schedule delivered to the Purchasers
on the date hereof (the "Company Disclosure Schedule"), the section numbers of
which are numbered to correspond to the section numbers of this Agreement to
which they refer, the Company represents and warrants to the Purchasers as set
forth below:
2.1 Organization and Qualification.
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(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of California with full corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as now being and as heretofore conducted. The Company is qualified
or otherwise authorized to transact business as a foreign corporation or other
legal entity in all jurisdictions in which such qualification or authorization
is required by law, except for jurisdictions in which the failure to be so
qualified or authorized would not reasonably be expected to have a material
adverse effect on the assets, properties, business, prospects, results of
operations or financial condition of the Company (the "Business of Company").
(b) The Company has previously provided to the Purchasers true and
complete copies of the charter and bylaws or other governing instruments of the
Company as presently in effect, and the Company is not in default in the
performance, observation or fulfillment of its charter or bylaws or other
governing instruments. The minute books of the Company contain true and
complete records of all meetings and consents in lieu of meetings of the Board
of Directors (and any committees thereof) and of the stockholders since the time
of Company's incorporation and accurately reflect in all material respects all
transactions referred to in such minutes and consents in lieu of meetings. The
stock books of the Company are true and complete.
2.2 Authority to Execute and Perform Agreements. The Company has the
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corporate power and authority to enter into, execute and deliver this Agreement
and to perform fully its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of the Company. No further
action on the part of the Company is necessary to consummate the transactions
contemplated hereby, except as provided in this Agreement and the Related
Instruments. This Agreement has been duly executed and delivered by the Company
and, subject to the foregoing, constitutes a valid and binding obligation of the
Company, enforceable in
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accordance with its terms, except as enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws, both state
and federal, affecting the enforcement of creditors' rights or remedies in
general as from time to time in effect or (ii) the exercise by courts of equity
powers.
2.3 Capitalization and Title to Shares.
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(a) At Closing, the Company is authorized to issue 75,000,000 shares
of Common Stock, of which 53,549,359 shares are issued and outstanding on the
date hereof, and no shares of preferred stock. As of the Closing Date, there
will be no shares of Preferred Stock (or warrants or other rights to acquire
Preferred Stock) and no warrants or other rights to acquire Common Stock issued
and outstanding. Such shares are owned of record by the persons and in the
amounts set forth on the Company Disclosure Schedule. No other class of capital
stock of the Company is authorized or outstanding. All of the issued and
outstanding shares of the Company's capital stock are duly authorized and are
validly issued, fully paid, nonassessable and free of pre-emptive rights. None
of the issued and outstanding shares of the Company's capital stock have been
issued in violation of any federal or state law or any preemptive rights or
rights to subscribe for or purchase securities.
(b) The Company Disclosure Schedule includes a true and complete list
of all outstanding rights, subscriptions, warrants, calls, preemptive rights,
options or other agreements of any kind to purchase or otherwise receive from
the Company any shares of the capital stock or any other security of the
Company, and all outstanding securities of any kind convertible into or
exchangeable for such securities. True and complete copies of all instruments
(or the forms of such instruments) referred to in this Section 2.3(b) have been
previously furnished to the Purchasers. There are no shareholder agreements,
voting trusts, proxies or other agreements, instruments or understandings with
respect to the outstanding shares of capital stock of the Company to which the
Company is a party. As of the Closing, there will be no outstanding convertible
debt of the Company that is convertible into capital stock of the Company.
(c) The Shares constitute no less than 90% of the Adjusted Fully
Diluted Shares. "Adjusted Fully Diluted Shares" means Fully Diluted Shares
minus all (i) options to purchase Common Stock that will be exchanged at Closing
for options to purchase Engage Common Stock and (ii) shares of Common Stock
subject to vesting that will be cancelled at Closing and replaced with options
to purchase Engage Common Stock. The number of Adjusted Fully Diluted Shares is
53,549,359.
2.4 Subsidiaries and Other Affiliates.
---------------------------------
(a) The Company has no Subsidiaries except as set out in the Company
Disclosure Schedule. As used in this Agreement, "Subsidiary" means any
corporation or other legal entity of which the Company or any Subsidiary owns,
directly or indirectly, stock or other equity interests.
9
(b) The Company is not a party to a partnership or joint venture with
any other person except as set out in the Company Disclosure Schedule.
2.5 Financial Statements. The Company has previously delivered to the
--------------------
Purchasers (a) the audited consolidated financial statements of the Company at
December 31, 1996 and December 31, 1997 and for the two years then ended
(including the footnotes thereto) (the "Audited Financial Statements"), (b) the
unaudited balance sheet of the Company as of January 31, 1999 and related
statements of operations and cash flows for the period then ended (the "Interim
Financial Statements"). All of such financial statements referred to in this
section are collectively referred to herein as the "Company Financial
Statements." The Company Financial Statements have been prepared from, and are
in accordance with, the books and records of the Company and present fairly the
financial position and the results of operations of the Company as of the dates
and for the periods indicated, in each case in accordance with generally
accepted accounting principles ("GAAP") consistently applied throughout the
periods involved except as otherwise stated therein, and subject, in the case of
the Interim Financial Statements, to normal year end audit adjustments, which
are not, in the aggregate, material and subject to the addition of appropriate
notes to the Interim Financial Statements.
2.6 Absence of Undisclosed Liabilities. As of January 31, 1999, the
----------------------------------
Company had no liabilities of any nature, whether accrued, absolute, contingent
or otherwise (including, without limitation, liabilities as grantor or otherwise
with respect to obligations of others or liabilities for taxes due or then
accrued or to become due), required to be reflected or disclosed in the December
31, 1998 balance sheet included in the Audited Financial Statements or the
January 31, 1999 balance sheet included in the Interim Financial Statements that
were not adequately reflected or reserved against on such balance sheets. The
Company has no such liabilities other than liabilities (a) adequately reflected
or reserved against on the December 31, 1998 balance sheet included in the
Audited Financial Statements or the January 31, 1999 balance sheet included in
the Interim Financial Statements, (b)incurred since January 31, 1999 in the
ordinary course of business, (c) disclosed in this Agreement or (d) that would
not, in the aggregate, reasonably be expected to have a material adverse effect
on the Business of Company.
2.7 Intellectual Property.
---------------------
(a) Company Intellectual Property. All patents, trademarks, trade
-----------------------------
names, service marks, trade dress, Internet domain names, copyrights and any
renewal rights therefor, mask works, net lists, schematics, technology,
manufacturing processes, supplier lists, trade secrets, know-how, computer
software programs or
10
applications (in both source and object code form) ("Software Programs"),
technical documentation of the Software Programs ("Technical Documentation"),
registrations and applications for any of the foregoing and all other tangible
or intangible proprietary information or materials that are used in the
Company's business and/or in any product, technology or process (i) currently
being manufactured, published or marketed by the Company or (ii) currently under
development for possible future manufacturing, publication, marketing or other
use by the Company are hereinafter referred to as the "Company Intellectual
Property."
(b) Applications and Registrations. The Company Disclosure Schedule
------------------------------
contains a true and complete list of all of the Company's patents' patent
applications, trademark registrations, trademark applications, trade names,
service marks, service ▇▇▇▇ applications, Internet domain names, Internet domain
name applications, copyright registrations and applications and other filings
and formal actions made or taken pursuant to federal, state, local and foreign
laws by the Company to protect its interests in the Company Intellectual
Property.
(c) Rights to Company Intellectual Property. The Company Intellectual
---------------------------------------
Property consists solely of items and rights which are: (i) owned by the
Company; (ii) in the public domain; or (iii) rightfully used by the Company
pursuant to a valid license. The Company has all rights in the Company
Intellectual Property necessary to carry out the Company's current and
anticipated (up through the Closing) activities.
(d) Third Party Claims. Reproduction, manufacturing, distribution,
------------------
licensing, sublicensing, sale or any other exercise of rights in any Company
Intellectual Property owned by the Company or any product, service, work,
technology or process as now licensed or sold by the Company to third parties
does not infringe on any copyright, trade secret, trademark, service ▇▇▇▇, trade
name, mask work, moral right or patent of any person. No claims (i) challenging
the validity, effectiveness or ownership by the Company of any of the Company
Intellectual Property owned by the Company, or (ii) to the effect that the use,
distribution, licensing, sublicensing, sale or any other exercise of rights by
the Company in any product, work, technology or process as now used or offered
or proposed for use, licensing, sublicensing or sale by the Company infringes on
any intellectual property or other proprietary right of any person have been
asserted or, to the best knowledge of Company, are threatened by any person, nor
are there any valid grounds for any bona fide claim of any such kind; provided
that with respect to the third-party software listed in Section 2.7(j) of the
Company Disclosure Schedule, the foregoing shall apply only to the best of the
Company's knowledge. The Company has made in a timely manner all filings and
payments necessary to maintain in effect all registered, granted or issued
patents, mask works, trademarks, Internet domain names and copyrights held by
the Company. To the best of the Company's knowledge, there is no unauthorized
use, infringement or misappropriation of any of the Company Intellectual
Property by any third party, employee or former employee.
11
(e) Royalties. Except as set forth on the Company Disclosure
---------
Schedule, there are no royalties, fees, honoraria or other payments payable by
the Company to any person or entity by reason of the ownership, development,
use, license, sale or disposition of the Company Intellectual Property, other
than salaries and sales commissions paid to employees and sales agents in the
ordinary course of business and support fees for third party software and other
third party license fees and maintenance fees listed in Section 2.7 of the
Company's Disclosure Schedule.
(f) Personnel. All personnel, including employees, agents,
---------
consultants and contractors, who have contributed to or participated in the
conception and development of the Company Intellectual Property owned by the
Company on behalf of the Company have executed nondisclosure agreements in the
form set forth on the Company Disclosure Schedule and either (i) have been a
party to a "work-for-hire" arrangement or agreements with the Company in
accordance with applicable national and state law that has accorded the Company
full, effective, exclusive and original ownership of all tangible and intangible
property thereby arising, or (ii) have executed appropriate instruments of
assignment in favor or the Company as assignee that have conveyed to the Company
effective and exclusive ownership of all tangible and intangible property
thereby arising.
(g) Third Party Agreements. The Company is not, nor as a result of
----------------------
the execution or delivery of this Agreement, or performance of the Company's
obligations hereunder, will Company be, in violation of any material license,
sublicense, agreement or instrument relating to the Company Intellectual
Property to which the Company is a party or otherwise bound, nor will execution
or delivery of this Agreement, or performance of Company's obligations
hereunder, cause the diminution, termination or forfeiture of any Company
Intellectual Property.
(h) Company Software Programs. The Company Disclosure Schedule
-------------------------
contains a true and complete list of all of Company's Software Programs owned by
the Company. The Company owns full and unencumbered right and good, valid and
marketable title to such Software Programs free and clear of all mortgages,
pledges, liens, security interests, conditional sales agreements, encumbrances
or charges of any kind (other than non-exclusive licenses granted in the
ordinary course of business).
(i) Protection. The Company has enforced the trade secret protection
----------
program set forth in the Company Disclosure Schedule. To the best of the
Company's knowledge, there has been no violation of such program by any person
or entity. The source code and system documentation relating to the Software
Programs owned by the Company (i) have at all times been maintained in strict
confidence, (ii) have been disclosed by the Company only to employees who have
had a "need to
12
know" the contents thereof in connection with the performance of their duties to
the Company and who have executed the nondisclosure agreements referred to in
Section 2.7(f), and (iii) have not been disclosed to any third party.
(j) Third-Party Software. The Company Disclosure Schedule contains a
--------------------
complete list of (i) software libraries, compilers and other third-party
software used in the development of the Software Programs and (ii) material
software systems and applications used by the Company in the operation of its
business. The Company Disclosure Schedule lists all license agreements for the
use of all such software and, if any such software is not licensed, the basis of
the use of such software by the Company.
(k) Software Performance. The Software Programs owned by the Company
--------------------
will perform in accordance with the warranties set forth in the standard end-
user license agreements listed on the Company Disclosure Schedule (the "License
Agreements").
(l) Integrity. Except with respect to demonstration or trial copies,
---------
no portion of any Software Program owned by the Company contains any "back
door," "time bomb," "Trojan horse," "worm," "drop dead device," "virus" or
other software routines or hardware components designed to permit unauthorized
access; to disable or erase software, hardware, or data; or to perform any other
such actions.
(m) Contract Performance. The Company has observed all provisions of
--------------------
and performed all of its material obligations under the License Agreements,
including, but not limited to, the performance of its product maintenance
obligations. The Company has not taken any action, or failed to take any action,
that could cause (i) any source code, trade secret or other Company Intellectual
Property to be released from an escrow or otherwise made available to any person
or entity other than those persons described in Section 2.7(i), dedicated to the
public or otherwise placed in the public domain or (ii) any other adverse affect
to the protection of the Software Programs owned by the Company under trade
secret, copyright, patent or other intellectual property laws.
(n) Year 2000. The Software Programs owned by the Company (i) shall
---------
store, retrieve, sort and process date data correctly when used on the proper
platform and in accordance with the applicable Technical Documentation, (ii)
when used on the proper platform and in accordance with the applicable Technical
Documentation shall store, retrieve, sort and process date data correctly, and
(iii) when used on the proper platform and in accordance with the applicable
Technical Documentation, shall not end abnormally or provide invalid or
incorrect results as a result of date data, including without limitation date
data which represents or references different centuries or more than one
century. The Company Acquisition Year 2000 Questionnaire completed by the
Company and sent to the
13
Purchasers on February 17, 1999 by facsimile transmission contains no material
untrue statements of fact and does not omit to state any facts necessary to make
the statements therein not materially misleading.
(o) Adequacy of Technical Documentation. The Technical Documentation
-----------------------------------
for the Software Programs owned by the Company includes the source code (with
comments) for such Software Programs, as well as any pertinent comments by or
explanation that may be necessary to render such materials understandable and
usable to a programmer trained in the language in which the Software Program is
written and ordinarily skilled in such matters. The Technical Documentation for
the Software Programs owned by the Company, also includes any programs
(including compilers), "workbenches," tools and higher level (or "proprietary")
languages necessary for the development, maintenance and implementation of the
Software Programs.
2.8 No Material Adverse Change. Since January 31, 1999 there has not
--------------------------
been:
(a) any material adverse change in the Business of Company;
(b) any transaction, commitment, contract or agreement entered into by
the Company or any termination by the Company of any contract or other right
having a value of or requiring aggregate payments in excess of $30,000;
(c) any redemption or other acquisition of any capital stock of the
Company by the Company or any declaration, setting aside, or payment of any
dividend or distribution of any kind by the Company with respect to any shares
of capital stock of the Company except for stock options granted in the ordinary
course of business;
(d) any increase in compensation, bonus or other benefits payable or
to become payable by the Company to any of their respective directors, officers
or employees, other than regularly scheduled increases in the ordinary course of
business;
(e) any entering into or granting by the Company of any new employment
agreement providing for annual compensation over $ 100,000, any new employee
benefit, deferred compensation or other similar employee benefit arrangement, or
any new consulting arrangement providing for annual compensation over $100,000
and any grant of any severance or termination rights to any director, officer or
employee of the Company or any increase in benefits payable under existing
severance or termination pay policies or employment agreements;
14
(f) any material change in any accounting method or practice followed
by the Company;
(g) any making by the Company of any loan or advance to any
stockholder, officer, director or consultant (other than expense advances made
in the ordinary course of business), or any other loan or advance otherwise than
in the ordinary course of business;
(h) except for inventory or equipment acquired in the ordinary course
of business, any material acquisition by the Company of all or any part of the
assets, properties, capital stock or business of any other person;
(i) any destruction of, material damage to or loss of any assets
material to the Business of Company (whether or not covered by insurances);
(j) a material adverse change in a customer relationship including,
without limitation, the following to the extent inconsistent with the Company's
past results: cancellation or termination or actual notice of cancellation or
termination by any customer of its relationship or a material portion of its
relationship with Company or any material decrease or planned decrease in the
usage or purchase of the products or services of Company by any such customer;
(k) any filed claim of wrongful discharge or other unlawful labor
practice or action or to the best knowledge of the Company of facts which could
reasonably be expected to form the basis of such a claim;
(l) any litigation commenced by or against the Company that (i) is
likely to result in a final judgment adverse to the Company, and (ii) is likely
to have a material adverse effect on the Business of Company;
(m) except in the ordinary course of business, any sale, abandonment
or any other disposition of any of the Company's assets or properties; or
(n) any commitment or agreement by Company or any of its directors,
officers or employees to do any of the things described in the preceding clauses
(a) through (m).
2.9 Tax Matters.
-----------
(a) The Company has filed all tax reports and returns required to be
filed by it and paid or will timely pay all taxes and other charges shown as due
on such reports and returns. The Company is not delinquent in the payment of
any material tax assessment, or any other governmental charge (including without
limitation applicable withholding taxes, without regard to materiality). Any
15
provision for taxes reflected in the Audited Financial Statements is adequate
for payment of any and all tax liabilities for periods ending on or before
December 31, 1998 and there are no tax liens on any assets of the Company except
liens for current taxes not yet due.
(b) There has not been any audit of any tax return filed by the
Company and no audit of any such tax return is in progress and the Company has
not been notified by any tax authority that any such audit is contemplated or
pending. The Company knows of no tax deficiency or claim for additional taxes
asserted or threatened to be asserted against it by any taxing authority and the
Company knows of no grounds for any such assessment except for IRS challenges
that may be made to reasonable filing positions taken by the Company in its
returns. No extension of time with respect to any date on which a tax return was
or is to be filed by the Company is in force, and no waiver or agreement by the
Company is in force for the extension of time for the assessment or payment of
any tax. For purposes of this Agreement, the term "tax" includes all federal,
state, local and foreign taxes or assessments, including income, sales, gross
receipts, excise, use, value added, royalty, franchise, payroll, withholding,
property and import taxes and any interest or penalties applicable thereto.
(c) The Company has not agreed to, and is not required to, make any
adjustments under Section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(d) The Company is not and has never been a member of a consolidated
group or combined group of corporations.
2.1 Compliance with Laws.
--------------------
(a) The Company has all licenses, permits, franchises, orders or
approvals of any federal, state, local or foreign governmental or regulatory
body material to the conduct of its business (collectively, "Permits"); such
Permits are in full force and effect; and no proceeding is pending or, to the
best knowledge of the Company, threatened to revoke or limit any Permit. The
Company Disclosure Schedule contains a true and complete list of all Permits.
(b) The Company is not in violation of any applicable law, ordinance
or regulation or any order, judgment, injunction, decree or other requirement of
any court, arbitrator or governmental or regulatory body, except for violations
that would not, in the aggregate, be reasonably expected to have a material
adverse effect on the Business of Company. Since its organization, the Company
has not received notice of; and there has not been any citation, fine or penalty
imposed against the Company for, any such violation or alleged violation.
16
2.11 No Breach. The execution, delivery and performance of this Agreement
---------
by the Company and the consummation by the Company of the transactions
contemplated hereby will not (a) violate any provision of the Articles of
Incorporation or Bylaws of the Company; (b) violate, conflict with or result in
the breach of any of the terms or conditions of, result in modification of the
effect of, or otherwise give any other contracting party the right to terminate,
or constitute (or with notice or lapse of time or both constitute) a default
under, any instrument, contract or other agreement to which the Company is a
party or to which it or its assets or properties is bound or subject; (c)
violate any law, ordinance or regulation or any order, judgment, injunction,
decree or other requirement of any court, arbitrator or governmental or
regulatory body applicable to the Company or by which any of Company's assets,
properties or securities is bound; (d) violate any Permit; (e) require any
filing with, notice to, or permit, consent or approval of, any other
governmental or regulatory body; or (f) result in the creation of any lien or
other encumbrance on the assets, properties or securities of the Company,
excluding from the foregoing clauses (b), (c), (d), (e) and (f) exceptions to
the foregoing that, in the aggregate, would not be reasonably expected to have a
material adverse effect on the Business of Company or on the ability of the
Company to consummate the transactions contemplated hereby.
2.12 Actions and Proceedings. There are no outstanding orders, awards,
-----------------------
judgments, injunctions or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any of its securities, assets or
properties. There are no actions, suits, investigations or claims or legal,
administrative or arbitration proceedings pending or, to the best knowledge of
the Company, threatened against the Company that in the aggregate would
reasonably be expected to have a material adverse effect upon the transactions
contemplated hereby or the Business of Company. To the best knowledge of the
Company, there is no fact, event or circumstance now in existence that
reasonably could be expected to give rise to any action, suit, claim, proceeding
or investigation that individually or in the aggregate would reasonably be
expected to have a material adverse effect upon the transactions contemplated
hereby or on the Business of Company.
2.13 Contracts and Other Agreements. The Company Disclosure Schedule sets
------------------------------
forth a list of the following contracts and other agreements to which the
Company is a party or by or to which any it or its assets or properties are
bound or subject:
(a) any agreement or series of related agreements requiring aggregate
payments by or to the Company of more than $50,000;
(b) any agreement with or for the benefit of any current officer,
director, shareholder, employee or consultant of the Company;
17
(c) any agreement with any labor union or association representing any
employee of the Company;
(d) any agreement for the purchase or sale of materials, supplies,
equipment, merchandise or services that contain an escalation, renegotiation or
redetermination clause or that obligate the Company to purchase all or
substantially all of its requirements of a particular product or service from a
supplier, or for periodic minimum purchases of a particular material product or
material service from a supplier;
(e) any agreement for the sale of any of the assets or properties of
the Company other than in the ordinary course of business or for the grant to
any person of any options, rights of first refusal, or preferential or similar
rights to purchase any such assets or properties other than in the ordinary
course of business;
(f) any partnership or joint venture agreement including co-marketing
agreements;
(g) any agreement of surety, guarantee or indemnification, other than
agreements in the ordinary course of business with respect to obligations in an
aggregate amount not in excess of $30,000;
(h) any agreement containing covenants of the Company not to compete
in any line of business, in any geographic area or with any person or covenants
of any other person not to compete with the Company or in any line of business
of the Company;
(i) any agreement granting or restricting the right of the Company to
use any Intellectual Property other than license agreements entered into in the
ordinary course of business;
(j) any agreement with customers or suppliers for the sharing of fees,
the rebating of charges or other similar arrangements;
(k) any agreement with any holder of securities of the Company as such
(including, without limitation, any agreement containing an obligation to
register any of such securities under any federal or state securities laws);
(l) any agreement obligating the Company to deliver services or
product enhancements or containing a "most favored nation" pricing clause;
(m) any agreement relating to the acquisition by the Company of any
operating business or the capital stock of any other person;
18
(n) any agreement requiring the payment to any person of a brokerage
or sales commission or a finder's or referral fee (other than arrangements to
pay commissions or fees to employees in the ordinary course of business);
(o) any agreement or note relating to or evidencing outstanding
indebtedness for borrowed money in amounts over $5,000;
(p) any lease, sublease or other agreement under which the Company is
lessor or lessee of any real property or equipment or other tangible property;
(q) any material agreement with a change of control provision or
otherwise requiring consent with respect to the Closing;
(r) any stock option agreement; restricted stock agreement; employment
or severance agreement; phantom stock plan; bonus, incentive or similar
agreement, arrangement or understanding;
(s) any distribution or sales representative agreement or agreements
appointing any agents; and
(t) any other material agreement whether or not made in the ordinary
course of business.
True and complete copies of all the contracts and other agreements (and all
amendments, waivers or other modifications thereto) set forth on the Company
Disclosure Schedule have been furnished to the Purchasers. Each of such
contracts is valid, subsisting, in full force and effect, binding upon the
Company, and to the best knowledge of the Company, binding upon the other
parties thereto in accordance with their terms, and the Company is not in
default under any of them, nor, to the best knowledge of the Company, is any
other party to any such contract or other agreement in default thereunder, nor,
to the best knowledge of the Company, does any condition exist that with notice
or lapse of time or both would constitute a default thereunder, except, in each
case, such defaults as would not, in the aggregate, be reasonably expected to
have a material adverse effect on the Business of Company.
2.14 Bank Accounts and Powers of Attorney. The Company Disclosure Schedule
------------------------------------
identifies all bank and brokerage accounts of the Company, whether or not such
accounts are held in the name of the Company, lists the respective signatories
therefor and lists the names of all persons holding a power of attorney from the
Company and a summary of the terms thereof.
19
2.15 Properties.
----------
(a) The Company owns and has good title to all of its assets and
properties reflected as owned on the December 31,1998 balance sheet included in
the Audited Financial Statements and the January 31, 1999 balance sheet included
in the Interim Financial Statements, free and clear of any lien, claim or other
encumbrance, except for (i) assets and properties disposed of, or subject to
purchase or sales orders, in the ordinary course of business since January 31,
1999, (ii) liens or other encumbrances securing the liens of materialmen,
carriers, landlords and like persons, all of which are not yet due and payable,
(iii) liens for taxes not yet delinquent and (iv) liens, claims or other
encumbrances that, in the aggregate, are not material to the Business of
Company.
(b) The Company does not own any real property and does not have any
options or contractual obligations to purchase or acquire any interest in real
property. The Company has a valid leasehold interest in all of the buildings,
structures and leasehold improvements, and owns or has a valid leasehold
interest in all equipment and other tangible property material to the conduct of
its business, all of which are in good and sufficient operating condition and
repair, ordinary wear and tear excepted. There is no equipment located on the
premises of the Company that is on loan from another party.
2.16 Customers. The Company Disclosure Schedule sets forth the customers
---------
who accounted for at least 90% of the Company's revenues and 90% of the
Company's Clickstream Data collection during 1998 (the "Customers"). The
relationships of the Company with the Customers are good commercial working
relationships. No Customers have canceled or otherwise terminated their
respective relationship with the Company or have decreased their respective
usage or purchase of the services of the Company resulting in a material adverse
effect on the Business of Company. The Company does not know of any plan or
intention of any Customer, and has not received any written threat or notice
from any Customer, to terminate, cancel or otherwise materially and adversely
modify its relationship with the Company or to decrease materially or limit its
usage or purchase of the services or products of the Company.
2.17 Accounts Receivable. Subject to the allowances with respect to
-------------------
accounts receivable set forth on the December 31, 1998 balance sheet included
with the Audited Financial Statements or the January 31, 1999 balance sheet
included in the Interim Financial Statements, all accounts receivable reflected
on such balance sheets and all accounts receivable arising subsequent thereto,
have arisen in the ordinary course of business of the Company, represent valid
and enforceable obligations due to the Company and have been and are subject to
no set-off, counterclaim or future performance obligation on the part of the
Company.
20
2.18 Employee Benefit Plans.
----------------------
(a) Definitions. The following terms shall have the meanings set
-----------
forth below:
(i) "Affiliate" shall mean any other person or entity
controlled by or under common control with Company within the meaning of Section
414(b), (c), (m) or (o) of the Code and the regulations thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended;
(iii) "Company Employee Plan" shall refer to any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, deferred compensation, incentive compensation, severance,
termination pay, performance awards, stock or stock-related awards, fringe
benefits or other employee benefits or remuneration of any kind, whether formal
or informal, funded or unfunded and whether or not legally binding, including
without limitation, each "employee benefit plan", within the meaning of Section
3(3) of ERISA (A) that is or has been maintained, contributed to, or required to
be contributed to, by Company or any Affiliate for the benefit of any "Employee"
(as defined below), and (B) pursuant to which Company or any Affiliate has or
may have any material liability contingent or otherwise;
(iv) "Employee" shall mean any current, former, or retired
employee, officer, or director of Company or any Affiliate;
(v) "Employee Agreement" shall refer to each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or similar agreement or contract between Company or any
Affiliate and any Employee or consultant; pursuant to which the Company or any
Affiliate has or may have any material liability;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) that is a "multiemployer plan" as defined in Section 3(37) of
ERISA; and
(viii) "Pension Plan" shall refer to each Company Employee Plan
that is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA.
21
(b) Schedule. The Company Disclosure Schedule contains an accurate
--------
and complete list of each Company Employee Plan and each Employee Agreement
Except as may be set forth on the Company Disclosure Schedule, neither Company
nor any Affiliate has any plan or commitment, whether legally binding or not, to
establish any new Company Employee Plan or Employee Agreement, to modify any
Company Employee Plan or Employee Agreement (except to the extent required by
law or to conform any such Company Employee Plan or Employee Agreement to the
requirements of any applicable law, or as required by this Agreement), or to
enter into any Company Employee Plan or Employee Agreement.
(c) Documents. Company has provided or made available to Purchasers
---------
true and complete copies of (i) all documents comprising each written Company
Employee Plan and each written Employee Agreement, including all amendments
thereof, and any trust agreements, insurance contracts, and other funding
agreements; (ii) the three most recent annual reports (Series 5500 and all
schedules thereto), if any, required under ERISA or the Code in connection with
each Company Employee Plan or related trust; (iii) the most recent actuarial
reports prepared for each of the Company Employee Plans for which such report is
required or was prepared and the most recent certified financial statements for
each of the Company Employee Plans for which such report is required or was
prepared; (iv) the most recent summary plan description together with the most
recent summary of material modifications, if any, required under ERISA with
respect to each Company Employee Plan; (v) all IRS determination letters and
rulings relating to Company Employee Plans; (vi) all communications material to
any Employee or Employees relating to any Company Employee Plan and any proposed
Company Employee Plans, in each case that (A), relate to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events and (B) would result in any
material liability to Company or any Affiliate; and (vii) all securities law
registration statements and prospectuses prepared in connection with each
Company Employee Plan.
(d) Employee Plan Compliance. (i) Company and each Affiliate has
------------------------
performed in all material respects all obligations required to be performed by
it under each Company Employee Plan, and each Company Employee Plan has been
established and maintained in accordance with its terms and in compliance with
all applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA or the Code; except, in each case, where the failure to do so
would not have a material adverse effect on the Business of the Company; (ii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any Company Employee Plan for
which no exemption exists under Section 4975(c) or (d) of the Code or Section
408 of ERISA that would have a material adverse effect on the Business of
Company; (iii) there are no actions, suits or claims pending, or, to the best
knowledge of Company, threatened or anticipated (other than routine claims for
benefits or actions seeking qualified
22
domestic relations orders) against any Company Employee Plan or against the
assets of any Company Employee Plan; (iv) each Company Employee Plan can be
amended, terminated or otherwise discontinued alter the Effective Time in
accordance with its terms, without liability to Company, the Surviving
Corporation or any of its Affiliates (other than for ordinary administration
expenses typically incurred in a termination event and benefits accrued through
the effective date of such amendment, termination or discontinuance at a rate
not materially in excess of the amount provided in the Audited Financial
Statements); (v) there are no inquiries or proceedings pending or, to the best
knowledge of Company or any Affiliates, threatened by the IRS or DOL with
respect to any Company Employee Plan; (vi) neither Company nor any Affiliate is
subject to any penalty or tax with respect to any Company Employee Plan under
Section 406(i) of ERISA or Section 4975 through 4980 of the Code that would have
a material adverse effect on the Business of Company; (vii) all contributions,
premiums or other payments due from Company or its Affiliates with respect to
any Company Employee Plan have been fully paid or adequately provided for on the
Audited Financial Statements; and (viii) all reports required by any
governmental agency to be filed with respect to each Company Employee Plan have
been timely filed except where the failure to be so timely filed would not have
a material adverse effect on the Business of Company.
(e) Pension Plan Qualification Funding.
----------------------------------
(i) With respect to each Pension Plan which is intended to be
qualified under Section 401(a) of the Code, each such Pension Plan has received
a favorable determination as to its qualification from the IRS and, to the best
knowledge of the Company and its Affiliates, nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualification.
(ii) The Audited Financial Statements of Company reflect all
employee benefit liabilities of Company in a manner satisfying the requirements
of FAS 87 and 88 .
(iii) With respect to each Pension Plan that is subject to the
provisions of Title I, Subtitle B, part 3 of ERISA, the funding method used in
connection with such Pension Plan is acceptable under ERISA, and the actuarial
assumptions used in connection with funding such Pension Plan are, in the
aggregate, reasonable. No such Pension Plan has incurred any "accumulated
funding deficiency" (as defined in Section 412 of the Code), whether or not
waived.
(f) Multiemployer Plans. At no time has Company or any Affiliate
-------------------
contributed to or been required to contribute to any Multiemployer Plan.
(g) No Post-Employment Obligations. No Company Employee Plan
------------------------------
provides, or has any liability to provide, life insurance, medical or other
employee
23
welfare benefits to any Employee upon his or her retirement or termination of
employment for any reason, except for benefits accrued through the date of
termination and as may be required by statute, and neither Company nor any
Affiliate has ever represented, promised or contracted (whether in oral or
written form) to any Employee (either individually or to Employees as a group)
that such Employee(s) would be provided with life insurance, medical or other
employee welfare benefits upon their retirement or termination of employment,
except to the extent required by statute.
(h) Effect of Transaction.
---------------------
(i) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Company
Employee Plan, Employee Agreement, trust or loan or applicable law that will
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee that would have a
material adverse effect on the Business of Company.
(ii) No payment or benefit that will be made by Company or any
Affiliate with respect to any Employee as a result of the transactions
contemplated by this Agreement will be characterized as an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.
(i) Funded Welfare Benefit Plans. Each Company Employee Plan which is
----------------------------
maintained in connection with any trust or other arrangement described in
Section 501(c)(9) of the Code or is otherwise funded within the meaning of
Section 419 of the Code has received a favorable ruling as to its tax-exempt
status and, to the best knowledge of the Company and its Affiliates, nothing has
occurred, whether by action or failure to act, which would cause the loss of
such tax-exempt status.
(j) COBRA. With respect to any group health plan within the meaning
-----
of Section 4980B(g)(2) of the Code, the provisions of Section 4980B of the Code
have been complied with in all material respects.
2.19 Employee Relations. The Company has approximately 65 full-time
------------------
equivalent employees and generally enjoys good employer employee relations. The
Company is not delinquent in payments to any of its employees or consultants for
any material wages, salaries, commissions, bonuses or other direct compensation
for any services performed by them to the date hereof or amounts required to be
reimbursed to such employees. Upon termination of the employment of any
employees, neither the Company nor the Purchasers will by reason of the Closing
or anything done prior thereto (with the parties hereto agreeing to pro rata
liability to
24
the extent that any such reason relates to actions taken both prior to and
following the Closing Date) be liable to any of such employees for severance pay
or any other payments (other than accrued salary, vacation or sick pay in
accordance with the Company's normal policies). True and complete information as
to all current directors, officers, employees or consultants of the Company,
including, in each case, name, current job title, base salary, bonus potential,
commissions and termination obligations has been previously furnished to the
Purchasers.
2.20 Employment Matters. The Company is in compliance in all material
------------------
respects with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Employees. No
work stoppage or labor strike against the Company or any of its Subsidiaries is
pending or, to the best knowledge of the Company, threatened. The Company is
not involved in or, to the best knowledge of the Company, threatened with, any
labor dispute, grievance, or litigation relating to labor, safety or
discrimination matters involving any Employee, including, without limitation,
charges of unfair labor practices or discrimination complaints. The Company has
not engaged in any unfair labor practices within the meaning of the National
Labor Relationships Act. The Company is not presently, nor has it been in the
past, a party to, or bound by, (i) any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement is
being negotiated by the Company or (ii) any statutory works council or other
agreement, statute, rule or regulation that mandates employee approval,
participation, consultation or consent with regard to the transactions
contemplated hereby.
2.21 Employee Conflicts. To the best knowledge of the Company, no employee
------------------
of the Company (a) is in violation of any term of any employment contract,
patent disclosure agreement, non-competition agreement, or any restrictive
covenant to a former employer relating to the right of any such employee to be
employed by the Company because of the nature of the business conducted or
presently proposed to be conducted by the Company or to the use of trade secrets
or proprietary information of others or (b) has given notice to the Company nor
is the Company otherwise aware, that any such employee intends to terminate his
or her employment with the Company.
2.22 Transactions with Management. No executive officer or director of the
----------------------------
Company has (whether directly or indirectly through another entity in which such
person has an interest, other than as the holder of less that 1% of a class of
securities of a publicly traded company) any interest in (a) any property or
assets of the Company (except as a shareholder or optionholder), (b) any current
competitor, customer or supplier of the Company, or (c) any person which is
currently a party to any material contract or agreement with the Company, except
for portfolio investments of venture capital entities affiliated with such
directors and executive officers.
25
2.23 Insurance. The Company Disclosure Schedule sets forth a list of all
---------
policies or binders of fire, liability, product liability, workmen's
compensation, vehicular, directors' and officers' and other insurance held by or
on behalf of the Company. Such policies and binders are in full force and
effect, are reasonably believed to be adequate for the businesses engaged in by
the Company, as applicable, and are in conformity with the requirements of all
leases or other agreements to which the Company is a party and, to the best
knowledge of the Company, are valid and enforceable in accordance with their
terms. The Company is not in default with respect to any material provision
contained in any such policy or binder nor has the Company failed to give any
material notice or present any material claim under any such policy or binder in
due and timely fashion. There are no outstanding unpaid claims under any such
policy or binder. The Company has not received notice of cancellation or non-
renewal of any such policy or binder.
2.24 Brokerage. Except as otherwise disclosed to the Purchasers in
---------
writing, no broker, finder, agent or similar intermediary has acted on behalf of
the Company in connection with this Agreement or the transactions contemplated
hereby, and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection herewith based on any agreement, arrangement
or understanding with the Company, or any action taken by it.
2.25 Hazardous Materials.
-------------------
(a) There has been no generation, use, handling, storage or disposal
of any Hazardous Materials in material violation of common law or any applicable
environmental law at any site owned or premises leased by the Company during the
period of the Company's ownership or lease or to the best of Company's
knowledge, prior thereto. Nor has there been or is there threatened any release
of any Hazardous Materials on or at any such site or premises during such period
or, to the best of Company's knowledge, prior thereto in violation of common law
or any applicable environmental law or which created or will create an
obligation to report or remediate such release. "Hazardous Materials" means any
"hazardous waste" as defined in either the United States Resource Conservation
and Recovery Act or regulations adopted pursuant to said Act, and any "hazardous
substances" or "hazardous materials" as defined in the United States
Comprehensive Environmental Response, Compensation and Liability Act.
(b) To the best of the Company's knowledge, there is no environmental
or health and safety matter that would reasonably be expected to have a material
adverse effect on the Business of Company. The Company has previously furnished
to the Purchasers and copies of any environmental audits or risk
26
assessments, site assessments, and material documentation prepared by or for the
Company regarding off-site disposal of Hazardous Materials, spill control plans
and material correspondence with any governmental agency regarding the
foregoing.
2.26 HSR. The Company did not report annual net sales of $10 million or
---
greater on its last annual statement nor did the Company report total assets of
$10 million or greater on its last regularly prepared balance sheet and,
therefore, does not meet the ▇▇▇▇▇▇▇ Act's "size of person" test (15 U.S.C.
Section 18a(a)(2)).
2.27 Disclosure. The representations and warranties and statements of the
----------
Company and contained in this Agreement do not contain any untrue statement of a
material fact, and, when taken together, do not omit to state any material fact
necessary to make such representations, warranties and statements, in light of
the circumstances under which they are made, not misleading. There is no fact
specifically relating to the Business of Company and known to the Company or any
Selling Stockholder that has not been disclosed to the Purchasers in this
Agreement that is reasonably likely to have a material adverse effect on the
Business of Company.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDERS
Except as set forth on the disclosure schedule delivered to the Purchasers
on the date hereof (the "Stockholder Disclosure Schedule"), the section numbers
of which are numbered to correspond to the section numbers of this Agreement to
which they refer, each of the Stockholders, severally but not jointly,
represents and warrants to the Purchasers as to itself only as follows:
3.1 Authority to Execute and Perform Agreements. Such Stockholder has the
-------------------------------------------
full legal right and power and all authority and approvals required to enter
into, execute and deliver this Agreement, the Escrow Agreement and the
Stockholder Letter (as defined in Section 5.8) and to perform fully its or his
obligations hereunder and thereunder. This Agreement has been duly executed and
delivered and is the valid and binding obligation of such Stockholder
enforceable in accordance with its terms, except as enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium and similar
laws, both state and federal, affecting the enforcement of creditors' rights or
remedies in general as from time to time in effect or (ii) the exercise by
courts of equity powers. When executed and delivered pursuant hereto, each of
the Escrow Agreement and the Stockholder Letter will be the valid and binding
obligation of such Stockholder enforceable in accordance with its terms, except
as enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and similar laws, both state and federal, affecting
the enforcement of creditors' rights or remedies in general as from time to time
in effect or (ii) the exercise by courts of equity powers.
27
3.2 No Breach. The execution, delivery and performance of this Agreement,
---------
the Escrow Agreement and the Stockholder Letter and the consummation of the
transactions contemplated hereby and thereby will not (a) violate, conflict with
or result in the breach of any of the terms or conditions of, result in
modification of the effect of, or otherwise give any other contracting party the
right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any material instrument, contract or other
agreement to which the Stockholder is a party or to which the Stockholder or its
assets or properties are bound or subject; (b) violate any order, judgment,
injunction, award or decree of any court, arbitrator or governmental or
regulatory body against, or binding upon, the Stockholder or upon the
securities, properties or assets of the Stockholder; or (c) require the approval
or consent of any foreign, federal, state, local or other governmental or
regulatory body or the approval or consent of any other person.
3.3 Title to Shares. Such Stockholder owns (or will, as of the Closing,
---------------
own) beneficially and of record, free and clear of any lien, claim or
encumbrance, the shares of Common Stock set forth opposite such stockholder's
name on Section 3.3 of the Company Disclosure Schedule. There are no
shareholder agreements, voting trusts, proxies or other agreements or
understandings with respect to the outstanding shares of capital stock of the
Company to which such Stockholder is a party.
3.4 Absence of Control. Such Stockholder, together with all of its
------------------
affiliates, does not hold 50% or more of the outstanding voting securities of
the Company or have the contractual power to designate 50% or more of the
directors of the Company.
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Except as set forth on the disclosure schedule delivered to the Company and
the Stockholders on the date hereof (the "Purchasers Disclosure Schedule"), the
Purchasers' Certificates of Incorporation or in the documents identified in
Section 4.4 (such documents, together with the Purchasers Disclosure Schedule,
the "Purchasers Disclosure Documents"), the section numbers of which are
numbered to correspond to the section numbers of this Agreement to which they
refer, each Purchaser represents and warrants regarding itself to the
Stockholders as follows:
4.1 Organization. Each of the Purchasers is a corporation duly organized,
------------
validly existing and in good standing under the laws of its state of
incorporation with full corporate power and authority to own, lease and operate
its assets and to carry on its business as now being and as heretofore
conducted.
4.2 Authority to Execute and Perform Agreement. Each of the Purchasers
------------------------------------------
has the corporate power and authority to enter into, execute and deliver this
28
Agreement, the Registration Rights Agreement and the Escrow Agreement, and to
perform fully its respective obligations hereunder and thereunder. The
execution and delivery of this Agreement, the Registration Rights Agreement and
the Escrow Agreement, and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of each
of the Purchasers, which is the only required corporate action on the part of
the Purchasers. This Agreement has been duly executed and delivered by each of
Purchasers and constitutes a valid and binding obligation of each, enforceable
in accordance with its terms. The Registration Rights Agreement and the Escrow
Agreement have been duly executed and delivered by the Purchasers and each
constitutes its valid and binding obligation, enforceable in accordance with its
respective terms, except as enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws, both state
and federal, affecting the enforcement of creditors' rights or remedies in
general as from time to time in effect or (ii) the exercise by courts of equity
powers.
4.3 Capitalization of CMGI.
----------------------
(a) CMGI is authorized to issue 100,000,000 shares of CMGI Common
Stock, of which 46,666,765 shares were issued and outstanding as of March 1,
1999, and 5,000,000 shares of preferred stock, $.01 par value, issuable in
series, 250 of which are designated Series A Preferred Stock none of which are
outstanding and 50,000 of which are designated Series B Preferred Stock all of
which are issued and outstanding. As of March 1, 1999, except for an aggregate
of 5,814,923 shares of CMGI Common Stock reserved for issuance under various
stock option and stock purchase plans of CMGI, there is no outstanding right,
subscription, warrant, call, preemptive right, option or other agreement of any
kind to purchase or otherwise to receive from CMGI any shares of the capital
stock or any other security of CMGI and there is no outstanding security of any
kind convertible into or exchangeable for such capital stock. There are no
agreements to repurchase, redeem or acquire shares in CMGI. There are no
stockholder agreements, voting agreements or trusts or understandings to which
CMGI is a party or by which it is bound. The Purchasers Disclosure Schedule
includes a true and complete list of all outstanding rights, subscriptions,
warrants, calls, preemptive rights, options or other agreements of any kind to
purchase or otherwise receive from the Company any shares of the capital stock
or any other security of the Company, and all outstanding securities of any kind
convertible into or exchangeable for such securities. When issued in accordance
with the terms of this Agreement, CMGI Common Stock to be issued pursuant to
this Agreement will be duly authorized, validly issued, fully paid,
nonassessable and free of any preemptive rights.
(b) Engage is authorized to issue 30,000,000 shares of Engage Common
Stock, of which 107,570 shares are issued and outstanding and 5,000,000 shares
of preferred stock, $.01 par value, issuable in series, 1,500,000 shares of
which
29
are designated Series A Preferred Stock, all of which are issued and
outstanding, and 238,597 shares of which are designated Series B Preferred
Stock, all which are issued and outstanding. As of March 8, 1999, except for an
aggregate of 2,787,167 shares of Engage Common Stock reserved for issuance under
various stock option and stock purchase plans of Engage and except as provided
in this Agreement, there is no outstanding right, subscription, warrant, call,
preemptive right, option or other agreement of any kind to purchase or otherwise
to receive from Engage any shares of the capital stock or any other security of
Engage and there is no outstanding security of any kind convertible into or
exchangeable for such capital stock. There are no agreements to repurchase,
redeem or acquire shares in Engage. There are no stockholder agreements, voting
agreements or trusts or understandings to which Engage is a party or by which it
is bound. The Purchasers Disclosure Schedule includes a true and complete list
of all outstanding rights, subscriptions, warrants, calls, preemptive rights,
options or other agreements of any kind to purchase or otherwise receive from
the Company any shares of the capital stock or any other security of the
Company, and all outstanding securities of any kind convertible into or
exchangeable for such securities. When issued in accordance with the terms of
this Agreement, Engage Common Stock to be issued pursuant to this Agreement will
be duly authorized, validly issued, fully paid, nonassessable and free of any
preemptive rights.
(c) All the issued and outstanding shares of capital stock of CMGI and
of Engage, including the shares to be received by the Stockholders pursuant to
this Agreement, have been or, at the Closing, will be duly authorized and
validly issued, fully paid and nonassessable, will not have been issued in
violation of any preemptive rights. None of the issued and outstanding shares
of the Company's capital stock have been issued in violation of any federal or
state law or any preemptive right or rights to subscribe for or purchase
securities.
4.4 SEC Reports. CMGI has previously made available to the Company its
-----------
(i) Annual Report on Form 10-K for the year ended July 31, 1998 (the "CMGI 10-
K"), as filed with the SEC, (ii) all proxy statements relating to the CMGI'S
meetings of stockholders held since July 31, 1998, (iii) all other periodic and
current reports filed by CMGI with the SEC under the Securities Exchange Act of
1934 (the "Exchange Act") since July 31, 1998 and (iv) the Registration
Statement on Form S-3 (File No. 333-71863) filed by CMGI on February 5, 1999
under the Securities Act of 1933. As of their respective dates, such filings
complied in all material respects with applicable SEC requirements and 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. CMGI has
timely filed with the SEC all reports required to be filed under Sections 13, 14
or 15(d) of the Exchange Act since July 31, 1998.
30
4.5 No Material Adverse Change. Since July 31, 1998, except as described
--------------------------
in a CMGI's Form 10-Q or Form 8-K, there has not been any material adverse
change in the assets, properties, business, results of operations or financial
condition of CMGI or Engage individually or CMGI and its subsidiaries, including
Engage, taken as a whole (the "Business of Purchasers").
4.6 No Breach. The execution, delivery and performance of this Agreement,
---------
the Registration Rights Agreement and the Escrow Agreement by the Purchasers and
consummation by such parties of the transactions contemplated hereby will not
(i) violate any provision of the Certificate of Incorporation or Bylaws of the
Purchasers; (ii) violate, conflict with or result in the breach of any of the
terms or conditions of, result in modification of the effect of, or otherwise
give any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, any instrument,
contract or other agreement to which the Purchasers are a party or to which
either of them or any of their assets, properties or securities is bound or
subject; (iii) violate any law, ordinance or regulation or any order, judgment,
injunction, decree or requirement of any court, arbitrator or governmental or
regulatory body applicable to the purchasers or by which any of their assets,
properties or securities is bound; (iv) except for (a) the registration with the
SEC of the CMGI Common Stock to be issued pursuant to this Agreement and (b) the
filing with the Nasdaq National Market of an application for listing of the
shares of CMGI Common Stock to be issued hereunder, require any filing with,
notice to, or permit, consent or approval of, any governmental or regulatory
body or any other person; (v) result in the creation of any lien or other
encumbrance on the assets, properties or securities of the Purchasers, excluding
from the foregoing clauses (ii), (iii), (iv) and (v) any exceptions to the
foregoing that, in the aggregate, would not have a material adverse effect on
the Business of either of the Purchasers or on the ability of the Purchasers to
consummate the transactions contemplated hereby.
4.7 Actions and Proceedings. Except as described in the filings
-----------------------
identified in Section 4.4, there are no outstanding orders, awards, judgments,
injunctions, decrees or other requirements of any court, arbitrator or
governmental or regulatory body against the Purchasers or any of its securities,
assets or properties. There are no actions, suits, investigations or claims or
legal, administrative or arbitration proceedings pending or, to the best
knowledge of the Purchasers, threatened against the Purchasers that in the
aggregate could have a material adverse effect upon the transactions
contemplated hereby or the Business of either of the Purchasers. To the best
knowledge of the Purchasers, there is no fact, event or circumstance now in
existence that reasonably could be expected to give rise to any action, suit,
claim, proceeding or investigation that individually or in the aggregate could
have a material adverse effect upon the transactions contemplated hereby or on
the Business of either of the Purchasers.
31
4.8 Brokerage. Except as otherwise disclosed to the Company in writing,
---------
no broker, finder, agent or similar intermediary has acted on behalf of the
Purchasers in connection with this Agreement or the transactions contemplated
hereby, and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection herewith based on any agreement, arrangement
or understanding with either of the Purchasers, or any action taken by either of
them.
4.9 Disclosure. The representations and warranties and statements of the
----------
Purchasers contained in this Agreement do not contain any untrue statement of a
material fact, and, when taken together, do not omit to state any material fact
necessary to make such representations and warranties and statements, in light
of the circumstances under which they are made, not misleading.
4.10 Acquisition of Purchased Stock. Purchasers are acquiring the Shares
------------------------------
for their own respective accounts and for investment, and not with a view to, or
for sale in connection with, any distribution of any of the Shares.
4.11 Engage Valuation. The documents and other information provided to
----------------
Stockholders in connection with their investigation of the valuation of Engage
represent, in the aggregate, the Purchaser's good faith estimate of the
valuation of Engage, taking into account reasonable discounts for contingencies
known or unknown, as of the date hereof and do not, to the best of the
Purchaser's knowledge, contain any material untrue statements of fact or omit to
state any facts necessary to make the statements therein not materially
misleading; provided, however, that the Company and Stockholders do hereby
acknowledge that any such estimate cannot be construed as an assurance of value
or future performance and that the actual valuation of Engage may, currently and
in the future, vary materially from such estimate.
4.12 Financial Statements. Engage has previously delivered to the
--------------------
Stockholders (i) a profit and loss statement dated for the five months ended
December 31, 1998 and (ii) a balance sheet dated as of December 31, 1998. All
of such financial statements referred to in this section are collectively
referred to herein as the "Engage Financial Statements." The Engage Financial
Statements have been prepared from, and are in accordance with, the books and
records of Engage and present fairly the financial position and the results of
operations of Engage as of the dates and for the periods indicated, in each case
in accordance with GAAP consistently applied throughout the period involved,
except as otherwise stated therein.
32
SECTION 5 - COVENANTS AND AGREEMENTS
The parties covenant and agree as follows:
5.1 Conduct of Business. Except with the prior written consent of the
-------------------
Purchasers, which will not be unreasonably withheld, and except as otherwise
contemplated herein, during the period from the date hereof to the earlier of
the Closing Date and the termination of this Agreement in accordance with
Section 9 hereof, the Company shall observe the following covenants:
(a) Affirmative Covenants Pending Closing. The Company will:
-------------------------------------
(i) Preservation of Personnel. Use reasonable commercial
-------------------------
efforts to preserve intact its business organization and keep available the
services of present employees, in each case in accordance with past practice, it
being understood that termination of employees with poor performance ratings
shall not constitute a violation of this covenant;
(ii) Insurance. Use reasonable commercial efforts to keep in
---------
effect casualty, public liability, worker's compensation and other insurance
policies in coverage amounts not less than those in effect at the date of this
Agreement;
(iii) Preservation of the Business; Maintenance of Properties
-------------------------------------------------------
Contracts. Use reasonable commercial efforts to preserve its businesses,
---------
advertise, promote and market its services, keep its properties intact, preserve
its goodwill, and maintain all physical properties in good operating condition;
(iv) Intellectual Property Rights. Use reasonable commercial
----------------------------
efforts to preserve and protect the Company Intellectual Property; and
(v) Ordinary Course of Business. Operate its business
---------------------------
diligently and solely in the ordinary course.
(b) Negative Covenants Pending Closing. The Company will not, without
----------------------------------
the consent of the Purchasers (which consent shall not be unreasonably
withheld):
(i) Disposition of Assets. Sell or transfer, or mortgage,
---------------------
pledge or create or permit to be created any lien on, any of its assets, other
than sales or transfers in the ordinary course of business and liens existing
under arrangements disclosed herein or permitted under Section 2.15;
(ii) Liabilities. (A) Incur any obligation or liability other
-----------
than in the ordinary course of the Company's business, (B) incur any
indebtedness for
33
borrowed money or (C) enter into any contract or commitment (or series of
contracts or commitments) requiring payments by the Company of $50,000 or more
per contract or commitment (or series of contracts or commitments), other than
purchase orders, licenses or commitments for inventory materials and supplies in
the ordinary course of business;
(iii) Compensation. (A) Change the compensation or fringe
------------
benefits of any officer, director, employee or consultant, except for ordinary
merit increases for employees other than officers based on periodic reviews in
accordance with past practices or (B) enter into or modify any Company Plan or
any employment, severance or other agreement with any officer, director,
employee or consultant of the Company;
(iv) Capital Stock. (A) Grant or accelerate the exercisability
-------------
of, any option, warrant or other right to purchase, or to convert any obligation
into, shares of its capital stock, (B) declare or pay any dividend or other
distribution with respect to any shares of its capital stock or (C) issue any
shares of its capital stock, except upon the exercise of options or the
conversion of Preferred Stock outstanding on the date hereof;
(v) Charter and Bylaws. Amend the Articles of Incorporation or
------------------
Bylaws of the Company;
(vi) Acquisitions. Make any acquisition of property other than
------------
in the ordinary course of the Company's business;
(vii) License Agreements. Enter into or modify any license,
------------------
technology development or technology transfer agreement with any other person or
entity, other than license agreements entered into in the ordinary course of
business on the Company's standard form as previously delivered to the
Purchasers;
(vii) Legal Action. Commence any legal action outside the
------------
ordinary course of business that would reasonably be expected to expose the
Company directly or indirectly to any material liability as a result of any
counterclaim or cross-claim or otherwise;
(ix) Other Material Changes. Take any affirmative action or
----------------------
fail to take any reasonable action within its control as a result of which any
of the changes or events listed in Section 2.8 is likely to occur.
5.2 Corporate Examinations and Investigations.
-----------------------------------------
(a) Prior to the Closing, the Purchasers shall be entitled, through
their employees and representatives, to have such access to the assets,
properties,
34
business, books, records and operations of the Company as the Purchasers shall
reasonably request in connection with the Purchaser's investigation of the
Company with respect to the transaction contemplated hereby. Any such
investigation and examination shall be conducted at reasonable times and the
Company shall cooperate fully therein. No investigation by the Purchasers shall
diminish or obviate any of the representations, warranties, covenants or
agreements of the Company or the Stockholders contained in this Agreement. In
order that the Purchasers may have full opportunity to make such investigation,
the Company shall furnish the representatives of the Purchasers during such
period with all such information and copies of such documents concerning the
affairs of the Company as such representatives may reasonably request and cause
its officers, employees, consultants, agents, accountants and attorneys to
cooperate fully with such representatives in connection with such investigation.
(b) Prior to the Closing, the Company and the Stockholders shall be
entitled, through their financial advisors, to have such access to the financial
data, business plan and key executives of Engage as such advisors shall
reasonably request in connection with the valuation of Engage.
5.3 Expenses. Except as contemplated in Section 7.3 below, each of the
--------
Company, the Purchasers and each Stockholder shall bear its or his respective
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated hereby, including without
limitation, all fees and expenses of agents, representatives, counsel and
accountants.
5.4 Authorization from Others. Prior to the Closing Date, the parties
-------------------------
shall use all reasonable efforts to obtain all authorizations, consents and
permits required to permit the consummation of the transactions contemplated by
this Agreement.
5.5 Consummation of Agreement. Each party shall use all reasonable
-------------------------
efforts to perform and fulfill all conditions and obligations to be performed
and fulfilled by it under this Agreement and to ensure that to the extent within
its control or capable of influence by it, no breach of any of the respective
representations, warranties and agreements hereunder occurs or exists on or
prior to the Closing, all to the end that the transactions contemplated by this
Agreement shall be fully carried out in a timely fashion.
5.6 Public Announcements and Confidentiality. Any press release or other
----------------------------------------
information to the press or any third party with respect to this Agreement or
the transactions contemplated hereby shall require the prior approval of the
Purchasers and the Company, which approval shall not be unreasonably withheld,
provided that a party shall not be prevented from making such disclosure as it
shall be advised by counsel is required by law or the rules of the Nasdaq
National Market. The Company, the Stockholders and the Purchasers shall also
keep confidential and shall
35
not use in any manner any information or documents obtained from the Company,
the Purchasers or Stockholders, respectively, or their representatives
concerning the Company's, the Purchasers' or Stockholders' respective assets,
properties, business and operations, unless readily ascertainable from public
information, already known or subsequently developed by the Company, the
Stockholders or the Purchasers independently, received from a third party not
under an obligation to keep such information confidential or otherwise required
by law. If this Agreement terminates, all copies of any documents obtained from
a party or its representatives will be returned to the other party, except that
one copy thereof may be retained by outside counsel to the party returning such
documents in order to evidence compliance hereunder. The obligations set forth
in the previous two sentences of this Section 5.6 shall survive termination of
this Agreement.
5.7 No Solicitation. The Company and the Stockholders will not (i)
---------------
solicit, initiate or encourage discussions with any person, other than the
Purchasers, relating to the possible acquisition of the Company or of all or a
material portion of the assets or capital stock of the Company or any merger or
other business combination with the Company (an "Acquisition Transaction") or
(ii) participate in any negotiations regarding, or furnish to any other person
information with respect to, any effort or attempt by any other person to do or
to seek any Acquisition Transaction. The Company and the Stockholders agree to
inform the Purchasers in reasonable detail within one business day of their
receipt of any offer, proposal or inquiry relating to any Acquisition
Transaction.
5.8 Investment Representation and Lock-Ups. Each Stockholder shall
--------------------------------------
deliver to the Purchasers prior to the Closing Date an investment representation
and lock-up letter substantially in the form attached hereto as Exhibit B (a
---------
"Stockholder Letter").
5.9 Employment Related Instruments. The Company shall (and the
------------------------------
Stockholders shall cause the Company to) use all reasonable efforts to deliver
to the Purchasers prior to the Closing Date from all employees of the Company a
Non-Disclosure and Developments Agreement and a Non-Competition and Non-
Solicitation Agreement in the form attached to such person's employment offer
letters from CMGI.
5.10 Disclosure Statements. Prior to the Closing, each party promptly will
---------------------
supplement or amend its Disclosure Schedule delivered pursuant hereto with
respect to any matter hereafter arising which, if existing, occurring or known
at the date of this Agreement, would have been required to be set forth or
described in such Schedule or which is necessary to correct any information in
such Schedule which has been rendered materially inaccurate thereby. No
supplement or amendment to a Disclosure Schedule shall be deemed to supplement
or amend such Disclosure Schedule for purposes of (i) determining the accuracy
of any of the representations
36
and warranties made by a party in this Agreement or (ii) determining whether any
condition to a party's obligations to consummate the transaction contemplated by
this Agreement has been satisfied.
5.11 Further Assurances. Each of the parties shall execute such documents,
------------------
further instruments of transfer and assignment and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
5.12 Stock Options.
-------------
(a) Upon the Closing Date, except as otherwise described below, each
stock option to purchase the Company's Common Stock that is then outstanding
shall, at the election of the Company optionholder, be exchanged for an option
to purchase Engage Common Stock in accordance with the terms of an agreement to
be signed by the optionholders so electing. Upon such election, all rights with
respect to Company Common Stock under outstanding Company options shall
thereupon be converted into rights with respect to Engage Common Stock.
Accordingly, from and after the Closing Date, (i) each Company option so
exchanged may be exercised solely for shares of Engage Common Stock, (ii) the
number of shares of Engage Common Stock subject to each such exchanged Company
option shall be equal to the number of shares of Company Common Stock that were
subject to such Company option immediately prior to the Closing Date multiplied
by .050305, rounded down to the nearest whole number of shares of Engage Common
Stock, (iii) the per share exercise price for Engage Common Stock issuable upon
exercise of each such exchanged Company option shall be determined by dividing
the exercise price per share of Company Common Stock subject to such Company
option, as in effect immediately prior to the Closing Date, by .050305 and
rounding down the resulting exercise price to the nearest whole cent, and (iv)
all restrictions on the exercise of each such exchanged Company option shall
continue in full force and effect, and the term, exercisability, vesting
schedule and other provisions of such Company option shall otherwise remain
materially unchanged; provided, however, that each such exchanged Company option
shall be a nonstatutory stock option and not an incentive stock option. The
parties hereto shall take all reasonable efforts to effect the exchange of
options for those optionholders electing for such exchange, as set forth in this
Section 5.12(a).
(b) With respect to the stock options to purchase the Company's Common
Stock granted in December 1998, outside the Company's stock option plan, all
such options shall be exercised at or prior to the Closing, and holders thereof
who are accredited investors shall receive stock consideration hereunder with
respect thereto, and holders thereof who are not accredited investors shall
receive cash under a stock purchase agreement (the "Unaccredited Person Stock
Purchase Agreement") with respect thereto.
37
(c) With respect to the stock options to purchase the Company's Common
Stock granted to accredited investors who exercised early-exercise provisions
applicable to such options and in connection with which the vesting criteria
have been satisfied at or prior to Closing, the holders of the Company's Common
Stock issued pursuant thereto shall receive stock consideration hereunder with
respect thereto.
(d) With respect to the stock options to purchase the Company's Common
Stock granted to unaccredited investors who exercised early-exercise provisions
applicable to such options and in connection with which the vesting criteria
have been satisfied at or prior to Closing, the holders of the Company's Common
Stock issued pursuant thereto shall receive options to purchase Engage Common
Stock with respect thereto as described in subsection (a) above.
(e) With respect to the stock options to purchase the Company's Common
Stock granted to any persons who exercised early-exercise provisions applicable
to such options and in connection with which the vesting criteria have not been
satisfied at or prior to Closing, the holders of the Company's Common Stock
issued pursuant thereto shall receive options to purchase Engage Common Stock
with respect thereto as described in subsection (a) above.
(f) With respect to the shares of the Company's Common Stock referred
to in subsections (d) and (e) above, such shares shall be cancelled and the
notes payable to the Company relating to the exercises prices therefore shall be
cancelled.
5.13 Short-Form Merger. Within two business days following the Closing
-----------------
Date, the Purchaser shall cause to be mailed to the then-existing shareholders
of record of the Company a notice of the intention to merge (the "Merger") the
Company with a newly-created subsidiary of Engage or CMGI, and the Purchasers
shall cause the Merger to be effected within 30 days following the Closing Date.
In the Merger each outstanding share of Common Stock shall be converted into the
right to receive a pro rata share of (i) $30 million minus the aggregate Initial
Consideration (without giving effect to any reduction pursuant to Section 7.3)
and (ii) for each of the two performance goals specified in Subsections
1.1(b)(v) and 1.1(b)(vi), if such goal is met, $1.5 million minus the aggregate
Contingent Consideration paid to the Stockholders in connection therewith.
5.14 Underwater Warrants. The Company represents and warrants to
-------------------
Purchasers that Schedule 3 hereto is a true and complete list of all warrants
----------
("Underwater Warrants") to purchase capital stock of the Company with exercise
prices ("Exercise Prices") per share of Common Stock (or equivalent) greater
than $0.57, together with the notice period required for termination thereof.
Prior to
38
Closing, the Company shall (i) amend its Articles of Incorporation to provide
for the elimination of all series of preferred stock of the Company and the
concomitant conversion into Common Stock of all such eliminated preferred stock
and (ii) give notice of termination of all Underwater Warrants to the holders
thereof. In the event that holders of any Underwater Warrants elect to exercise
(prior to termination) such Underwater Warrants, Purchasers shall issue CMGI
Common Stock and Engage Common Stock to such holders as if such holders had so
exercised prior to the Closing Date, provided that such holders agree to be
bound by the terms of this Agreement. Anything to the contrary contained herein
notwithstanding, Stockholders shall indemnify Purchasers in full with respect to
(x) any failure to give timely notice of termination under the Underwater
Warrants and (y) the amount, if any, by which the fair market value of CMGI
Common Stock and Engage Common Stock, valued at the date of issuance (by
reference to the 20 prior trading days as relates to CMGI and the good faith
estimate of the Board of Directors as relates to Engage) issued to holders of
Underwater Warrants, or the consideration payable to such holders in the Merger
(as a result of appraisal rights or otherwise), exceeds the aggregate Exercise
Prices actually paid to the Company with respect to such Underwater Warrants in
accordance with and subject to the limitations of Section 10 herein (without
giving effect to provisions of Section 10.4 herein applicable solely to third-
party claims).
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF EACH PARTY TO CONSUMMATE THE TRANSACTION
The respective obligations of each party to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction or waiver,
at or before the Closing Date, of each of the following conditions:
6.1 Approvals. All required approvals of the stockholders of the Company
---------
and all material consents and approvals referred to in this Agreement shall have
been obtained.
6.2 Absence of Order. No restraining order or injunction of any court
----------------
which prevents consummation of the transaction contemplated by this Agreement
shall be in effect.
6.3 Due Diligence. Each party shall be reasonably satisfied with the
-------------
results of its due diligence investigation as contemplated in Section 5.2.
SECTION 7 - CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF PURCHASERS TO CONSUMMATE THE TRANSACTION
The obligation of the Purchasers to consummate the transaction contemplated
by this Agreement is subject to the satisfaction or waiver by the Purchasers, at
or before the Closing Date, of the following conditions:
39
7.1 Representations, Warranties and Covenants. The representations and
-----------------------------------------
warranties of the Company and the Stockholders contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of the Closing Date (with
such exceptions as may be permitted under or contemplated by this Agreement) and
there shall not have been any material adverse change in the Business of the
Company since the date hereof. The Company and the Stockholders shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by them
on or prior to the Closing Date.
7.2 Opinion of Counsel to Company. The Purchasers shall have received an
-----------------------------
opinion of counsel to the Company and the Stockholders, dated the Closing Date,
in form and substance attached hereto as Exhibit C.
---------
7.3 Fees, Bonuses and Indebtedness. The Selling Stockholders shall have
------------------------------
satisfied (a) all obligations owing under that certain Loan and Security
Agreement, dated September 25, 1996, by and between the Company and Silicon
Valley Bank, (b) all accrued obligations of the Company under all bonus and
other special cash compensation arrangements and (c) all fees and expenses of
the Company relating hereto or payable in connection herewith (including,
without limitation, all broker and financial advisory fees); provided, however,
that the Stockholders may elect, by written notice (which shall specify the
nature and dollar amount of the obligations to be assumed by the Purchasers) to
the Purchasers no later than one business day prior to the Closing Date, to have
the Purchasers assume any or all such obligations, in which event the dollar
value of the Initial Consideration shall be reduced by the amount of such
assumed obligations. Anything to the contrary contained herein notwithstanding,
all fees that become payable to ▇.▇. ▇▇▇▇▇▇▇▇▇ & Co., LLC following the Closing
under this subsection 7.3(c) shall be paid by the Company as contemplated in
subsection 1.1(d) herein. Any amount by which the actual assumed obligations
may exceed the reduction to the Initial Consideration shall be promptly
reimbursed to the Purchasers by the Stockholders, with interest at 10% from the
Closing Date, in accordance with and subject to the limitations of Section 10
herein (without giving effect to provisions of Section 10.4 herein applicable
solely to third-party claims). If the actual assumed obligations are less than
the reduction to the Initial Consideration, Purchasers shall promptly reimburse
the difference to Stockholders without interest.
7.4 Stockholder Letters. The Purchasers shall have received the
-------------------
Stockholder Letters referred to in Section 5.8.
7.5 Escrow Agreements. The Escrow Agreements, substantially in the forms
-----------------
attached hereto as Exhibit A, shall have been executed and delivered by all
---------
parties thereto.
40
7.6 Non-Competition and Non-Solicitation Agreements. The Purchasers shall
-----------------------------------------------
have received Non-Competition and Non-Solicitation Agreements from each employee
of the Company in the form attached to such person's offer letter from CMGI.
7.7 Non-Disclosure and Developments Agreements. The Purchasers shall have
------------------------------------------
received Non-Disclosure and Developments Agreements from each employee of the
Company in the form attached to such person's offer letter from CMGI.
7.8 Officer's Certificate. The Purchasers shall have received a
---------------------
certificate dated the Closing Date from the President of the Company stating
that (a) the representations and warranties of the Company contained in this
Agreement are true and correct in all material respects as of the Closing Date,
(b) the Company has performed and complied in all material respects with its
obligations and agreements hereunder, (c) there has not been a material adverse
change in the Business of Company since the date of this Agreement, (d) the
interim financial statements of the Company dated January 31, 1999 attached
thereto, have been prepared from, and are in accordance with, the books and
records of the Company and present fairly the financial position and the results
of operations of the Company as of the date and for the periods indicated in
accordance with GAAP consistently applied throughout the periods involved except
as otherwise stated therein, and subject to normal year end audit adjustments,
which are not, in the aggregate, material and subject to the addition of
appropriate notes and (e) there has been no material adverse change in the
Business of Company since January 31, 1999.
7.9 Secretary's Certificate. The Purchasers shall have received a
-----------------------
certificate in form reasonably satisfactory to the Purchasers dated the Closing
Date from the Secretary of the Company (i) attaching (A) the Company's Articles
of Incorporation, (B) the Company's Bylaws and (C) all corporate action taken in
connection herewith, and (ii) certifying the incumbency of the Company's
officers who execute documents in connection herewith.
7.10 1998 Audit. The Company shall have completed its audited financials
----------
at and for the year ended December 31, 1998; provided, however, and
notwithstanding anything to the contrary contained herein, the parties shall
close this Agreement into escrow (by delivering all stock certificates and other
closing documents to an escrow agent) if the above condition is not met, and
receipt by Purchasers of such audited financials without material deviation from
financial information previously provided to the Purchasers is, in any event, a
condition of closing.
7.11 Option Exchange Agreements. Each holder of Company options shall have
--------------------------
entered into an Option Exchange Agreement, in form and substance as set forth on
Exhibit D hereto (with appropriate modifications in accordance with Section
---------
5.12), with respect to all Company options held by such person.
41
7.12 Employment Agreements. All employment agreements and consulting
---------------------
agreements to which the Company is a party shall have been terminated on terms
satisfactory to Purchasers.
7.13 Convertible Debt. The Company's Convertible Promissory Notes issued
----------------
pursuant to the Note Purchase Agreement dated as of December 1998 between the
Company and certain noteholders shall have been converted in full and satisfied.
7.14 Waivers and Consents. The Company shall have obtained all waivers and
--------------------
consents necessary to consummate the transactions contemplated hereby.
7.15 Additional Items. The Company and each Stockholder shall have
----------------
furnished the Purchasers with such other certificates and documents, such as
good standing and due qualification certificates, as have been reasonably
requested by the Purchasers.
SECTION 8 - CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE COMPANY AND THE STOCKHOLDERS TO
CONSUMMATE THE TRANSACTION
The obligation of the Company and the Stockholders to consummate the
transaction contemplated by this Agreement is subject to the satisfaction or
waiver by them, at or before the Closing Date, of the following conditions:
8.1 Representations, Warranties and Covenants. The representations and
-----------------------------------------
warranties of the Purchasers contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date (with such
exceptions as may be permitted under or contemplated by this Agreement, and
except where another date is specified in a representation or warranty) and
there shall not have been any material adverse change in the Business of either
Purchasers (considered individually) since the date hereof. Each of the
Purchasers shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or prior to the Closing Date.
8.2 Opinion of Counsel to Purchasers. The Company shall have received an
--------------------------------
opinion of counsel to the Purchasers, dated the Closing Date, in form and
substance reasonably acceptable to the Company.
42
8.3 Registration Rights Agreement. A registration rights agreement
-----------------------------
substantially in the form attached hereto as Exhibit E shall have been executed
---------
and delivered by the Purchasers.
8.4 Officer's Certificate. The Company shall have received a certificate
---------------------
dated the Closing Date from the President or Chief Financial Officer of each of
the Purchasers stating that (a) the representations and warranties of such
Purchaser contained in this Agreement are true and correct in all material
respects as of the Closing Date, (b) such Purchaser has performed and complied
in all material respects with its obligations and agreements hereunder, and (c)
there has not been a material adverse change in the Business of such Purchaser
since January 31, 1999.
8.5 Secretary's Certificate. The Company shall have received a
-----------------------
certificate in form reasonably satisfactory to the Company dated the Closing
Date from the Secretary or Assistant Secretary of each of the Purchasers (a)
attaching (i) such Purchaser's certificate of incorporation, (ii) such
Purchaser's bylaws, (iii) all corporate action taken in connection herewith, and
(b) certifying the incumbency of such Purchaser's officers who execute documents
in connection herewith.
8.6 Additional Items. The Purchasers shall have furnished the Company
----------------
with such other certificates and documents as have been reasonably requested by
the Company.
SECTION 9 - TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing as follows:
(a) by the Company or the Purchasers if, without fault of the
terminating party, the Closing Date shall not have occurred on or before April
7, 1999, which date may be extended by mutual consent of the parties;
(b) by the Company and the Stockholders upon written notice to the
Purchasers if the Purchasers have materially breached any representation,
warranty, covenant or agreement contained herein and have not cured such breach
by the Closing Date;
(c) by the Purchasers upon written notice to the Company if the
Company or any Stockholder has materially breached any representation, warranty,
covenant or agreement contained herein and has not cured such breach by the
Closing Date;
(d) by any party if any court of competent jurisdiction or
governmental body shall have issued an order, decree or ruling or taken any
other
43
action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree or ruling shall have
become final and nonappealable;
(e) by the Purchasers if the Company's Board of Directors adopts
resolutions approving or otherwise authorizes or recommends to the Company's
Shareholders an Acquisition Transaction with parties other than the Purchasers
or their affiliates; or
(f) at any time with the written consent of all of the parties.
9.2 Effect of Termination. If this Agreement is terminated as provided in
---------------------
Section 9.1, this Agreement shall forthwith become void and have no effect,
without liability on the part of any party, its directors, officers or
stockholders, other than the provisions of this Section 9.2, Section 5.3
relating to expenses, Section 5.6 relating to publicity and confidentiality to
the extent provided therein and Section 9.3 relating to termination fees.
Nothing contained in this Section 9.2 shall relieve any party from liability for
any willful breach of this Agreement occurring before such termination.
9.3 Termination Fee.
---------------
(a) In order to induce the Purchasers to enter into this Agreement and
to reimburse the Purchasers for their costs and expenses related to entering
into this Agreement and seeking to consummate the transactions contemplated by
this Agreement, the Company will make a cash payment to Purchasers of $500,000
if and only if the Purchasers have terminated this Agreement pursuant to 9.1(a),
(c) or (e).
(b) In order to induce the Company and the Stockholders to enter into
this Agreement and to reimburse the Company and the Stockholders for its and
their costs and expenses related to entering into this Agreement and seeking to
consummate the transactions contemplated by this Agreement, the Purchasers will
make a cash payment to the Company of $500,000 if and only if the Company and
the Stockholders have terminated this Agreement pursuant to Section 9.1(a) or
(b).
(c) Any payment required by this section will be payable (by wire
transfer of immediately available funds to an account designated by the party
entitled to such payment) within five business days after demand by the party
entitled to such payment.
9.4 Amendment. This Agreement may not be amended except by an instrument
---------
signed by the Purchasers, the Company and Stockholders holding a majority of the
Shares set forth on Schedule 1.
----------
44
9.5 Waiver. At any time prior to the Effective Time, any party hereto may
------
(a) extend the time for the performance of any of the obligations or other acts
of any other party hereto or (b) waive compliance with any of the agreements of
any other party or any conditions to its own obligations, in each case only to
the extent such obligations, agreements and conditions are intended for its
benefit; provided that any such extension or waiver shall be binding upon a
party only if such extension or waiver is set forth in a writing executed by
such party.
SECTION 10 - INDEMNIFICATION
10.1 Survival. Notwithstanding any right of any party to fully investigate
--------
the affairs of the other party and notwithstanding any knowledge of facts
determined or determinable by such party pursuant to such investigation or right
of investigation, each party has the right to rely fully upon the
representations, warranties, covenants and agreements of each other party given
or made in this Agreement or any Related Instrument. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder, subject to the limitations set forth herein.
Purchasers shall have no right to recovery against any Stockholder (or any
officer, director, employee or agent of a party) other than through the exercise
of the indemnification rights set forth in Sections 10.2 and 10.3, which shall
constitute the sole and exclusive remedy after the Closing Date for any breach
of any representation, warranty or covenant of the Company or any Stockholder
contained herein or in the certificates described in Sections 7.8 and 7.9
delivered pursuant hereto, other than a fraudulent or intentional breach.
10.2 Obligation of Stockholders to Indemnify.
---------------------------------------
(a) Subsequent to the Closing, each Stockholder listed on Schedule 1
----------
indemnifies and holds harmless the Purchasers (and their respective directors,
officers, employees, agents, affiliates and assigns) from and against all
losses, liabilities, damages, deficiencies, costs or expenses, including
interest and penalties imposed or assessed by any judicial or administrative
body and reasonable attorneys' fees, whether or not arising out of third-party
claims and including all amounts reasonably paid in investigation, defense or
settlement of the foregoing pursuant to this Section 10 (the "Losses") based
upon, arising out of or otherwise in respect of (1) any inaccuracy in or breach
of any representation, warranty or covenant of the Company contained herein or
in the certificates described in Sections 7.8 and 7.9 delivered pursuant hereto
(2) the failure to obtain the consent to the transactions contemplated hereby of
the lessor under the Loft Lease between the Company and Harrow Realty, Inc.
regarding Room 1502(A), ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ and (3) subject
to the material performance by Purchasers of the covenants contained in Section
5.13, as relates to the Merger, or otherwise in connection herewith, the failure
to obtain the consent of all holders of Common Stock or of Fully
45
Diluted Shares (a) for the period beginning on the Closing Date and ending on
the first anniversary of the Closing Date, up to such Stockholder's pro-rata
share (based on the Shares held by such individual as listed on Schedule 1) of
----------
One Hundred Percent (100%) of the Initial Consideration held in Escrow and (b)
for the period beginning on the day after the first anniversary of the Closing
Date and ending on the second anniversary of the Closing Date, up to such
Stockholder's pro-rata share (based on the Shares held by such individual as
listed on Schedule 1) of Fifty Percent (50%) of the Initial Consideration
----------
originally held in Escrow plus Fifty Percent (50%) of any Contingent
Consideration otherwise payable to such Stockholder.
(b) Notwithstanding the above, with respect to any indemnification
obligation arising as a result of an inaccuracy in a representation or warranty
in Sections 3.1, 3.2 or 3.3, indemnification in an amount equal to the total
consideration received by a Stockholder shall be payable by such Stockholder
without time limitation.
(c) Limitations on Indemnification. The limitations of Sections 10.2
------------------------------
with respect to a Stockholder shall not apply in the case of a fraudulent or
intentional misrepresentation or breach by that Stockholder.
10.3 Notice and Defense of Claims. Promptly after receipt of notice of any
----------------------------
claim, liability or expense for which a party seeks indemnification hereunder,
such party shall give written notice thereof to the indemnifying party, but such
notification shall not be a condition to indemnification hereunder except to the
extent of actual prejudice to the indemnifying party. The notice shall state
the information then available regarding the amount and nature of such claim,
liability or expense and shall specify the provision or provisions of this
Agreement under which the liability or obligation is asserted. If within 30
days after receiving such notice the indemnifying party gives written notice to
the indemnified party stating that it intends to defend against such claim,
liability or expense at its own cost and expense, then defense of such matter,
including selection of counsel (subject to the consent of the indemnified party
which consent shall not be unreasonably withheld), shall be by the indemnifying
party and the indemnified party shall make no payment on such claim, liability
or expense as long as the indemnifying party is conducting a good faith and
diligent defense. Notwithstanding the foregoing, the indemnified party shall at
all times have the right to fully participate in such defense at its own expense
directly or through counsel; provided, however, if the named parties to the
action or proceeding include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the expense of
separate counsel for the indemnified party shall be paid by the indemnifying
party. If no such notice of intent to dispute and defend is given by the
indemnifying party, or if such diligent good faith defense is not being or
ceases to be conducted, the indemnified party shall, at the expense of the
indemnifying party, undertake the defense of such claim,
46
liability or expense with counsel selected by the indemnified party, and shall
have the right to compromise or settle the same exercising reasonable business
judgment. The indemnified party shall make available all information and
assistance that the indemnifying party may reasonably request and shall
cooperate with the indemnifying party in such defense. No indemnifying party
shall without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
SECTION 11 - MISCELLANEOUS
11.1 Material Adverse Change. All references to a party or the business of
-----------------------
a party experiencing a "material adverse change" shall not include any change
that results from the announcement or pendency of the transactions contemplated
herein or the taking of any action contemplated by this Agreement.
11.2 Notices. Any notice or other communication required or permitted
-------
hereunder shall be in writing and shall be deemed given when so delivered in
person, by overnight courier, by facsimile transmission (with receipt confirmed
by telephone or by automatic transmission report) or two business days after
being sent by registered or certified mail (postage prepaid, return receipt
requested), as follows:
(a) if to the Purchasers, to:
CMGI, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Engage Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
47
▇▇▇▇▇▇ & Dodge LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
Internet Profiles Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Stockholders, to:
▇▇▇▇▇ ▇▇▇▇
Suffer Hill Ventures
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
48
Any party may by notice given in accordance with this Section 11.2 to the other
parties designate another address or person for receipt of notices hereunder.
11.3 Entire Agreement. This Agreement includes the exhibits and schedules
----------------
hereto, contains the entire agreement among the parties with respect to the
Merger and related transactions, and supersedes all prior agreements, written or
oral, with respect thereto.
11.4 Governing Law. This Agreement is governed by the laws of the State of
-------------
Delaware.
11.5 Binding Effect; No Assignment. This Agreement shall be binding upon
-----------------------------
and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable without the prior written
consent of the other parties hereto.
11.6 Variations in Pronouns. All pronouns and any variations thereof refer
----------------------
to the masculine, feminine or neuter, singular or plural, as the context may
require.
11.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
11.8 Disclosure Schedules. The Disclosure Schedules are a part of this
--------------------
Agreement as if fully set forth herein.
11.9 Arbitration. Except with respect to an action seeking specific
-----------
performance or another equitable remedy, any dispute relating to or arising out
of this Agreement, or to a breach of this Agreement, arising among the parties
or their successors, shall be settled by arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association ("AAA").
The arbitration proceeding, including the rendering of an award, shall take
place in Boston, Massachusetts and be administered by the AAA. The parties
agree to act in good faith to mutually select an arbitrator. The decision of
the arbitrator shall be binding on the parties hereto or their successors and
any judgment rendered by such arbitrator may be enforced by any court of
competent jurisdiction. Each party shall bear its own expenses in connection
with such arbitration unless otherwise ordered by the arbitrator.
11.10 Letter Agreement. This Agreement supersedes and replaces the letter
----------------
agreement between the parties dated February 21, 1999, which shall be of no
further force and effect.
49
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first stated above.
CMGI, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: Chief Financial Officer
ENGAGE TECHNOLOGIES, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Royal
Title: Chief Financial Officer
50
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first stated above.
CMGI, INC.
By:
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: Chief Financial Officer
ENGAGE TECHNOLOGIES
By: /s/ ▇▇▇▇▇▇▇ ▇. Royal
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Royal
Title: Chief Financial Officer
51
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first stated above.
CMGI, INC.
By:
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
Title: Chief Financial Officer
ENGAGE TECHNOLOGIES
By:
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Royal
Title: Chief Financial Officer
INTERNET PROFILES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President & CEO
52
THE STOCKHOLDERS
Foundation Capital, L.P.
By: Foundation Capital Management, L.L.C.
By: /s/ [signature illegible]
------------------------------------------
Manager
------------------------------------------
Print Name
Foundation Capital Entrepreneurs Fund, L.L.C.
By Foundation Capital Management, L.L.C.
By: /s/ [signature illegible]
------------------------------------------
Manager
-----------------------------------------
Print Name
53
Information Associates, L.P.
Trident Capital Management L.L.C.
-----------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
(Print Name)
Managing Director
-----------------------------------
(Title if applicable)
54
Information Associates C.V.
Trident Capital Management L.L.C.
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
Managing Director
---------------------------------------------
(Title if applicable)
55
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
56
THE ▇▇▇▇▇▇▇▇ LIVING TRUST
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Print Name)
Trustee
---------------------------------------------
(Title if applicable)
57
ANVEST, L.P.
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
GENERAL PARTNER
---------------------------------------------
(Title if applicable)
58
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
---------------------------------------------
(Name of Stockholder)
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
59
▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
60
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
61
Genstar Investment Corporation
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
(Print Name)
Executive Vice President
---------------------------------------------
(Title if applicable)
62
▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Under Power of Attorney
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
63
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
64
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Under Power of Attorney
---------------------------------------------
(Print Name)
------------------------------------
(Title if applicable)
65
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
66
▇▇▇▇▇▇▇▇ HOLDINGS, L.P.
---------------------------------------------
(Name of Stockholder)
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
---------------------------------------------
(Signature)
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
---------------------------------------------
(Print Name)
GENERAL PARTNER
---------------------------------------------
(Title if applicable)
67
▇▇▇▇▇▇ HILL VENTURES,
A CALIFORNIA LIMITED PARTNERSHIP
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Print Name)
Managing Director of the General Partner
---------------------------------------------
(Title if applicable)
68
TOW PARTNERS, A CALIFORNIA
LIMITED PARTNERSHIP
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Print Name)
GENERAL PARTNER
---------------------------------------------
(Title of applicable)
69
WYTHES LIVING TRUST
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Print Name)
TRUSTEE
---------------------------------------------
(Title if applicable)
70
▇▇▇▇▇ Fargo Bank, Trustee SHV
M/P/T fbo ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Print Name)
AVP & TO AVP & TO
---------------------------------------------
(Title if applicable)
71
▇▇▇▇▇ Fargo Bank, Trustee SHV
M/P/T fbo ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
(Print Name)
AVP & TO AVP & TO
---------------------------------------------
(Title if applicable)
72
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
(Signature)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
73
YOUNGER LIVING TRUST
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
(Print Name)
Trustee
---------------------------------------------
(Title if applicable)
74
SOFTBANK Ventures, Inc.
---------------------------------------------
(Name of Stockholder)
/s/ Yoshitaka Kitao
---------------------------------------------
(Signature)
Yoshitaka Kitao
---------------------------------------------
(Print Name)
President and CEO
---------------------------------------------
(Title if applicable)
75
THE HEARST CORPORATION
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Print Name)
President Hearst New Media
----------------------------------------------
(Title if applicable)
76
GANNETT INTERNATIONAL
COMMUNICATIONS, INC.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
President
----------------------------------------------
(Title if applicable)
77
INTEL CORPORATION
----------------------------------------------
(Name of Stockholder)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
Vice President and Treasurer
----------------------------------------------
(Title)
78
ITOCHU CORPORATION
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
General Manager, Information Technology
Business Department
----------------------------------------------
(Title if applicable)
79
Itochu Technology, Inc.
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
President
----------------------------------------------
(Title if applicable)
80
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
81
▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
----------------------------------------------
(Signature)
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
82
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
83
Scocimara GST Trust
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
Trustee
----------------------------------------------
(Title if applicable)
84
----------------------------------------------
(Name of Stockholder)
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
85
▇▇▇ ▇▇▇▇▇▇
(Stuart ▇▇▇ ▇▇▇▇▇▇)
---------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
(Signature)
▇▇▇ ▇▇▇▇▇▇
(Stuart ▇▇▇ ▇▇▇▇▇▇)
---------------------------------------------
(Print Name)
---------------------------------------------
(Title if applicable)
86
▇▇▇▇ ▇. Mackau
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. Mackau
----------------------------------------------
(Signature)
▇▇▇▇ ▇. Mackau
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
87
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
88
Stanford University
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇▇
Gift Administrator, Standford Management Co.
On behalf of the Board of Trustees of the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Junior University
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
89
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
90
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
91
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
92
Hewlett-Packard Co.
----------------------------------------------
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
Assistant Secretary and
Senior Managing Counsel
----------------------------------------------
(Title if applicable)
93
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
94
R. ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ R. ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
R. ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
95
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
96
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
97
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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(Print Name)
----------------------------------------------
(Title if applicable)
98
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
99
Tak ▇▇▇▇ ▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ Tak ▇▇▇▇ ▇▇▇
----------------------------------------------
(Signature)
Tak ▇▇▇▇ ▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
100
▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
101
▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
102
▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
103
▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
104
▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
105
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
106
▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
107
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
108
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
109
▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
(Signature)
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
110
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
Guardian
----------------------------------------------
(Title if applicable)
111
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
Guardian
----------------------------------------------
(Title if applicable)
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
113
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
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(Title if applicable)
114
▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
115
▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
116
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
117
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
118
▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
119
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
(Print Name)
----------------------------------------------
(Title if applicable)
120
The Interpublic Group of Cos., Inc.
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇▇ ▇. Camera
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇. Camera
----------------------------------------------
(Print Name)
Vice President, General Counsel
----------------------------------------------
(Title if applicable)
121
▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
----------------------------------------------
(Print Name)
Director
----------------------------------------------
(Title if applicable)
122
Comdisco, Inc.
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
(Print Name)
Senior Vice President
----------------------------------------------
(Title if applicable)
123
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
(Print Name)
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(Title if applicable)
124
▇▇▇▇▇▇▇ Media Research, Inc.
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. Boutti
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. Boutti
----------------------------------------------
(Print Name)
Senior Vice President
----------------------------------------------
(Title if applicable)
125
▇▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------
(Print Name)
VP, Finance & Corporate
Development
----------------------------------------------
(Title if applicable)
126
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Name of Stockholder)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Signature)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
(Print Name)
Executive Director of Sales
----------------------------------------------
(Title if applicable)
127
Schedule 1 to Stock Purchase Agreement
Whole Whole
Shares of Shares of
I/PRO CMGI to Engage to
Shares Shareholder Shareholder
Shareholder Tendered at Closing at Closing
---------- -------- ---------- ----------
1 Foundation Capital, L.P. 12,270,258 32,326 90,577
2 Foundation Capital Entrepreneurs Fund, L.L.C. 1,363,362 3,591 10,064
3 Information Associates, C.V. 289,817 763 2,139
4 Information Associates, L.P. 10,541,776 27,772 77,817
5 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 78,770 207 581
6 ▇▇▇▇▇▇▇▇ Living Trust 317,163 835 2,341
7 Anvest, L.P. 496,019 1,306 3,661
8 G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. 530,497 1,397 3,916
9 ▇▇▇▇▇ ▇▇▇▇ 218,098 574 1,609
10 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 22,776 60 168
11 Genstar Investment Corporation 193,775 510 1,430
12 ▇▇▇▇▇ ▇▇▇▇▇ 18,545 48 136
13 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustees of 13,174 34 97
the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust U/D/T dated
September 27, 1996
14 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 74,517 196 550
15 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 13,174 34 97
16 ▇▇▇▇▇▇▇▇ Holdings, L.P. 361,455 952 2,668
17 ▇▇▇▇▇▇ Hill Ventures, a California Limited Partnership 6,119,379 16,121 45,172
18 Tow Partners, a California Limited Partnership 262,152 690 1,935
19 ▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustees of the Wythes 139,410 367 1,029
Living Trust dated 7/21/87
20 ▇▇▇▇▇ Fargo, Trustee SHV M/P/T ▇▇▇▇▇ ▇▇▇▇ 296,966 782 2,192
21 ▇▇▇▇▇ Fargo, Trustee SHV M/P/T ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 166,858 439 1,231
Jr.
22 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 121,434 319 896
23 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Trustee, The Younger Living 448,900 1,182 3,313
Trust
128
Whole Whole
Shares of Shares of
I/PRO CMGI to Engage to
Shares Shareholder Shareholder
Shareholder Tendered at Closing at Closing
---------- -------- ---------- ----------
24 SOFTBANK Ventures, Inc. 3,608,505 9,506 26,637
25 The Hearst Corporation 1,543,851 4,067 11,396
26 Gannett International Communications, Inc. 1,292,897 3,406 9,543
27 Intel Corporation 809,202 2,131 5,973
28 ITOCHU Corporation 323,679 852 2,389
29 ITOCHU Technology, Inc. 80,918 213 597
30 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 11,825 31 87
31 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 17,568 46 129
32 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,465 27 77
33 ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ GST U/A 12-21-92 60,232 158 444
34 ▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 17,568 46 129
35 ▇▇▇ ▇▇▇▇▇▇ 17,568 46 129
36 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 17,568 46 129
37 ▇▇▇▇ ▇▇▇▇▇▇▇▇ 17,568 46 129
38 Stanford University 52,631 138 388
39 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 12,299 32 90
40 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ 5,269 13 38
41 ▇▇▇▇▇ ▇▇▇▇▇ 969,000 2,552 7,153
42 Hewlett-Packard Company 253,510 667 1,871
43 ▇▇▇▇ ▇▇▇▇▇▇ 236,804 623 1,748
44 R. ▇▇▇▇ ▇▇▇▇▇ 216,000 569 1,594
45 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 68,923 181 508
46 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 44,486 117 328
47 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 44,486 117 328
48 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 24,000 63 177
49 Tak ▇▇▇▇ ▇▇▇ 20,000 52 147
50 ▇▇▇ ▇▇▇▇ 18,476 48 136
129
Whole Whole
Shares of Shares of
I/PRO CMGI to Engage to
Shares Shareholder Shareholder
Shareholder Tendered at Closing at Closing
---------- -------- ---------- ----------
51 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 14,876 39 109
52 ▇▇▇▇ ▇▇▇▇▇▇ 14,688 38 108
53 ▇▇▇▇▇ ▇▇▇▇▇ 9,476 24 69
54 ▇▇▇▇ ▇▇▇▇▇ 6,250 16 46
55 ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,355 14 39
56 ▇▇▇▇ ▇▇▇▇▇ 5,000 13 36
57 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,955 10 29
58 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3,145 8 23
59 ▇▇▇▇ ▇▇▇▇▇▇ 3,048 8 22
60 ▇▇▇▇▇ ▇▇▇▇▇ 2,500 6 18
61 ▇▇▇▇▇ ▇▇▇▇▇ 2,500 6 18
62 ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 1,214 3 8
63 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,500 3 11
64 ▇▇▇▇▇▇▇ ▇▇▇▇ 60,000 158 442
65 ▇▇▇▇▇▇ ▇▇▇▇▇ 25,000 65 184
66 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 5,000 13 36
67 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III 22,242 58 164
68 ▇▇▇▇▇ ▇. ▇▇▇▇▇ 6,148 16 45
69 ▇▇▇▇▇ ▇▇▇▇▇ 66,140 173 487
70 Interpublic Group of Companies 2,000,430 5,268 14,765
71 ▇▇▇▇▇ ▇▇▇▇▇▇▇ 120,175 315 887
72 Comdisco, Inc. 359,875 947 2,655
73 ▇▇▇▇▇▇▇ ▇▇▇▇ 2,604,860 6,862 19,227
74 ▇▇▇▇▇▇▇ Media Research, Inc. 2,536,188 6,681 18,720
75 ▇▇▇▇▇▇▇▇ ▇▇▇▇ 273,457 720 2,018
76 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 37,813 99 278
---------- ---------- ----------
Totals 52,344,408 137,861 386,357
========== ========== ==========
130
