EXHIBIT 2.8
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
IXL HOLDINGS, INC.,
IXL MERGER CORP. II, INC.
THE ▇▇▇▇▇▇▇ GROUP, INC.,
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DATED AS OF APRIL 4, 1997
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER is entered into this 4th day of
April, 1997, by and between THE ▇▇▇▇▇▇▇ GROUP, INC., a North Carolina
corporation ("TWG"), IXL HOLDINGS, INC., a Delaware corporation ("Parent"),
IXL MERGER CORP. II, INC., a Delaware corporation, or its successors or
assigns ("Sub"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a North Carolina resident, (the
"TWG Shareholder").
R E C I T A L S:
- - - - - - - -
A. TWG is engaged in the business of creating multimedia
presentations for third parties (the "TWG Business").
B. TWG and Sub each desire to merge their respective companies and
business operations, all on the terms and subject to the conditions set
forth herein (the "Merger").
C. The TWG Shareholder owns 100% of the issued and outstanding
capital stock of TWG (the "TWG Stock").
D. The respective Boards of Directors and stockholders of Parent,
Sub and TWG have approved the Merger, upon the terms and subject to the
conditions set forth herein.
E. The parties hereto intend for the Merger to qualify, for federal
income tax purposes, as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants, benefits,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions hereof,
at the Effective Time (as defined in Section 1.3 hereof), (a) TWG shall be
merged with and into Sub, (b) the separate existence of TWG shall cease,
and (c) Sub shall continue as the surviving corporation in the Merger under
the laws of the State of Delaware under the name IXL Charlotte, Inc. For
purposes of this Agreement, Sub shall be referred to, for the period
commencing on the Effective Time, as the "Surviving Corporation".
1.2 CLOSING. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
Section 9.1 hereof, and subject to the satisfaction or waiver of the
conditions set forth in Article VII hereof, the closing of the Merger (the
"Closing") will take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, A
Professional Corporation, One Buckhead Plaza, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at such date, time and place as are agreed to
in writing by the parties hereto (the "Closing Date").
1.3 EFFECTIVE TIME OF THE MERGER. As soon as practicable on the
Closing Date, the parties hereto shall cause (a) a certificate of merger
(the "Certificate of Merger") to be filed with the office of the Secretary
of State of the State of Delaware (the "Certificate of Merger") in
accordance with the provisions of the Delaware General Corporation Law, as
amended (the "DGCL"); and (b) articles of merger (the "Articles of Merger")
to be filed with the office of the Secretary of State of the State of North
Carolina in accordance with the provisions of the North Carolina Business
Corporation Act, as amended (the "NBCA"). When used in this Agreement, the
term "Effective Time" shall mean the time when both the Certificate of
Merger and the Articles of Merger have been accepted for filing by the
Secretary of State of the State of Delaware and North Carolina,
respectively, or such time as otherwise specified in the Certificate of
Merger and the Articles of Merger.
1.4 EFFECT OF THE MERGER. The Merger shall, from and after the
Effective Time, have all the effects provided by the DGCL and NBCA. If at
any time after the Effective Time, any further action is deemed necessary
or desirable to carry out the purposes of this Agreement, the parties
hereto agree that the Surviving Corporation and its proper officers and
directors shall be authorized to take, and shall take, any and all such
action.
ARTICLE II
THE SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Amended and Restated
Certificate of Incorporation of Sub, a form of which is attached hereto as
Schedule 2.1, shall be the Certificate of Incorporation of the Surviving
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Corporation after the Effective Time, until thereafter changed or amended
as provided therein or by applicable law.
2.2 BYLAWS. The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
2.3 BOARD OF DIRECTORS; OFFICERS. The Board of Directors and
officers of Sub immediately prior to the Effective Time shall be the Board
of Directors and officers, respectively, of the Surviving Corporation,
until the earlier of their respective resignations or the time that their
respective successors are duly elected or appointed and qualified.
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ARTICLE III
CONVERSION OF SHARES
3.1 MERGER CONSIDERATION. As of the Effective Time, by virtue of
the Merger and without any action on the part of any stockholder of TWG or
Sub:
(a) All shares of TWG Stock owned by TWG shall be canceled and
retired and shall cease to exist, and no consideration shall be delivered
in exchange therefor;
(b) Each issued and outstanding share of TWG Stock (other than
any Dissenting Shares, as defined in Section 3.2 hereof) shall be converted
into, and become exchangeable for, (i) 4.544 shares of validly issued,
fully paid and nonassessable Class B Common Stock of Parent, $.01 par value
(the "Parent Stock"), and, (ii) $82.047 in cash.
(c) Each issued and outstanding share of common stock of Sub
shall be converted into and become one fully paid and nonassessable share
of common stock of the Surviving Corporation.
3.2 DISSENTING SHARES. Notwithstanding any provisions of this
Agreement to the contrary, any shares of TWG Stock held by a Dissenting
Shareholder (as hereinafter defined) shall not be canceled as described in
Section 3.1(b) hereof, but instead shall be converted into the right to
receive the consideration due a Dissenting Shareholder pursuant to the DGCL
or the NBCA, as applicable; provided, however, that if, after the Effective
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Time, a Dissenting Shareholder shall withdraw his demand or otherwise lose
his right for appraisal under the terms of the DGCL or the NBCA, as
applicable, the TWG Stock held by such Dissenting Shareholder (the
"Dissenting Shares") shall be deemed to be canceled as of the Effective
Time in accordance with the provisions of Section 3.1 hereof. TWG shall
give Parent prompt notice of any written demands for appraisal of shares of
TWG Stock, and the opportunity to direct all negotiations and proceedings
with respect to any such demands. Without the prior written consent of
Parent, TWG shall not voluntarily make any payment with respect to, settle,
or offer to settle or otherwise negotiate, any such demands. For purposes
of this Agreement, the term "Dissenting Shareholder" shall mean a TWG
Shareholder who (a) objects to the Merger; and (b) complies with the
applicable provisions of the DGCL and NBCA concerning dissenter's rights.
3.3 NO FURTHER RIGHTS. From and after the Effective Time, holders
of certificates theretofore evidencing TWG Stock shall cease to have any
rights as stockholders of TWG, except as provided herein or by law.
3.4 CLOSING OF THE TWG'S TRANSFER BOOKS. At the Effective Time,
the stock transfer books of TWG shall be closed and no transfer of TWG
Stock shall be made thereafter. If after the Effective Time, certificates
for TWG Stock are presented to Parent or the Surviving Corporation, they
shall be canceled and exchanged for an amount of Parent Stock as set forth
in Section 3.1 hereof, subject to applicable law in the case of Dissenting
Shares.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TWG
TWG and the TWG Shareholder, jointly and severally, represent and
warrant to Parent and Sub, which representations and warranties shall
survive the Closing in accordance with Section 10.1 of this Agreement, as
follows:
4.1 ORGANIZATION AND QUALIFICATION. TWG is a corporation duly
organized, validly existing and in good standing under the laws of the
State of North Carolina. TWG has the requisite corporate power and
authority to carry on the Business as it is now being conducted and is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary.
Complete and correct copies of the Articles of Incorporation and Bylaws of
TWG as in effect on the date hereof are attached as Schedule 4.1 hereto.
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The minute book of TWG, a true and complete copy of which has been
delivered to Parent, (a) accurately reflects all action taken by the
directors and shareholders of TWG at meetings of TWG's Board of Directors
or shareholders, as the case may be; and (b) except as set forth on
Schedule 4.1, contains true and complete copies of, or originals of, the
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respective minutes of all meetings or consent actions of the directors or
shareholders.
4.2 AUTHORITY. TWG has the necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by TWG have been duly
and validly authorized and approved by TWG's Board of Directors and the TWG
Shareholder, and no other corporate or shareholder proceedings on the part
of TWG, its Board of Directors or the TWG Shareholder is necessary to
authorize or approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
TWG and each TWG Shareholder, and assuming the due authorization, execution
and delivery by Parent and Sub, constitutes the valid and binding
obligation of TWG and each TWG Shareholder, enforceable against TWG and
each TWG Shareholder in accordance with its respective terms.
4.3 CAPITALIZATION.
(a) The authorized capital stock of TWG consists of 100,000
shares of common stock, $1.00 par value, of which 1,000 shares are validly
issued and outstanding, fully paid and nonassessable. All outstanding
securities of TWG were issued in accordance with applicable federal and
state securities laws. There are no classes of or series of capital stock
of TWG outstanding other than the TWG Stock, and except as set forth on
Schedule 4.3 hereto, no options, warrants, calls, agreements, commitments
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or other rights presently outstanding that would obligate TWG or the TWG
Shareholder to issue, deliver or sell shares of its capital stock, or to
grant, extend or enter into any such option, warrant, call, agreement,
commitment or other right. In addition to the foregoing, as of the date
hereof, TWG has no bonds, debentures, notes or other indebtedness issued or
outstanding that have voting rights in TWG under ordinary circumstances.
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(b) All of the issued and outstanding shares of capital stock of
TWG are validly issued, fully paid and nonassessable and owned by the TWG
Shareholder, free and clear of any lien, charge, security interest, pledge,
option, right of first refusal, voting proxies or other voting agreements,
or encumbrance of any kind or nature (any of the foregoing, a "Lien").
4.4 SUBSIDIARIES. TWG has no subsidiaries and does not otherwise
own or control, directly or indirectly, any equity interest in, or any
security convertible into an equity interest in, any corporation,
partnership, limited liability company, joint venture, association or other
business entity.
4.5 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS. Except as set
forth on Schedule 4.5 hereto, none of the execution and delivery of this
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Agreement by TWG or the TWG Shareholder, the consummation by TWG and the
TWG Shareholder of the transactions contemplated hereby or compliance by
TWG with any of the provisions hereof will:
(a) conflict with or violate the Articles of Incorporation or
Bylaws of TWG;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to TWG or the TWG
Shareholder, or by which TWG or its properties or assets may be bound or
affected;
(c) result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any note, bond, mortgage, indenture, or
any material contract, agreement, arrangement, lease, license, permit,
judgment, decree, franchise or other instrument or obligation to which TWG
is a party or by which TWG or its properties may be bound or affected
(collectively, for purposes of this Section 4.5, a "TWG Agreement");
(d) result in the creation of any Lien on any of the property or
assets of TWG; or
(e) require any consent, waiver, license, approval,
authorization, order, permit, registration or filing with, or notification
to (any of the foregoing being a "Consent"), of (i) any government or
subdivision thereof, whether domestic, foreign or multinational, or any
administrative, governmental, or regulatory authority, agency, commission,
court, tribunal or body, whether domestic, foreign or multinational (a
"Governmental Entity"), except for the filing of the Certificates of Merger
pursuant to the DGCL and NBCA; or (ii) any other individual, corporation,
trust, partnership, limited liability company or other entity
(collectively, a "Person") pursuant to any TWG Agreement.
4.6 FINANCIAL STATEMENTS. TWG has heretofore furnished Parent with a
true and complete copy of (a) the unaudited financial statements of TWG for
the period ending December 31, 1995; (b) the unaudited financial statements
of TWG for the period ending December 31, 1996; and (c) the unaudited
financial statements of TWG for the period ending February 28,
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1997, a copy of each of which is attached hereto as Schedule 4.6
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(collectively herein referred to as the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally
accepted accounting principles (except for the absence of footnotes and,
for the unaudited financial statements for the period ending February 28,
1997, normal year-end adjustments) consistently followed throughout the
period indicated, and present fairly, in all material respects, the
financial position and operating results of TWG as of the dates, and during
the periods, indicated therein.
4.7 ABSENCE OF CHANGES. Except as provided in Schedule 4.7 hereto
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and except as contemplated by this Agreement, since December 31, 1996, (a)
TWG has not entered into any transaction that was not in the ordinary
course of business; (b) there has been no sale, assignment, transfer,
mortgage, pledge, encumbrance or lease of any material assets or properties
of TWG; (c) there has been (i) no declaration or payment of a dividend, or
any other declaration, payment or distribution of any type or nature to any
shareholder of TWG in respect of its stock, whether in cash or property,
and (ii) no purchase or redemption of any shares of the capital stock of
TWG; (d) there has been no declaration, payment, or commitment for the
payment, by TWG, of a bonus or other additional salary, compensation, or
benefit to any employee of TWG that was not in the ordinary course of
business; (e) there has been no release, compromise, waiver or cancellation
of any debts to or claims by TWG, or waiver of any rights of TWG, in each
case having a value in excess of $10,000; (f) there have been no capital
expenditures in excess of $10,000 for any single item, or $25,000 in the
aggregate; (g) there has been no change in accounting methods or practices
or revaluation of any assets of TWG (other than TWG Accounts Receivable (as
defined in Section 4.26 hereof) written down in the ordinary course of
business that are not in excess of $10,000 for any single TWG Account
Receivable and $25,000 in the aggregate); (h) there has been no material
damage, destruction or loss of physical property (whether or not covered by
insurance) adversely affecting the TWG Business or the operations of TWG;
(i) there has been no loan by TWG, or guaranty by TWG of any loan, to any
employee of TWG or to any Person related to the TWG Business; (j) TWG has
not ceased to transact business with any customer that, as of the date of
such cessation, represented more than 5% of the annual gross revenues of
TWG; (k) there has been no termination or resignation of any key employee
or officer of TWG, and neither TWG nor the TWG Shareholder is aware of any
such termination or resignation that is threatened; (l) there has been no
amendment or termination of any material oral or written contract,
agreement or license related to the TWG Business, to which TWG is a party
or by which it is bound, except in the ordinary course of business, or
except as expressly contemplated by this Agreement; (m) TWG has not failed
to satisfy any of its debts, obligations or liabilities related to the TWG
Business or the assets of TWG as the same become due and owing (except for
TWG Accounts Payable (as defined in Section 4.27 hereof), payable in
accordance with past practices and in the ordinary course of business); (n)
there has been no agreement or commitment by TWG to do any of the
foregoing; and (o) there has been no other event or condition of any
character pertaining to and materially affecting the assets, Business or
financial condition of TWG.
4.8 UNDISCLOSED LIABILITIES. Except as set forth on Schedule 4.8
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hereto, neither TWG nor the TWG Business has any debt, liability or
obligation of any kind, whether accrued, absolute or otherwise, including,
without limitation, any liability or obligation on account of taxes or any
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governmental charges or penalty, interest or fines, except (a) liabilities
not in excess of $50,000 (whether individually or in the aggregate)
incurred in the ordinary course of business after December 31, 1996; (b)
liabilities reflected on the TWG Financial Statements; and (c) liabilities
incurred as a result of the transactions contemplated by this Agreement.
4.9 TITLE TO PROPERTIES. Except as set forth on Schedule 4.9
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hereto, TWG has good and marketable title to all property and assets used
in the TWG Business (other than TWG Real Property (as defined in Section
4.12 hereof)), and good title to all of its leasehold interests, in each
case, free and clear of any and all Liens other than liens for taxes not
yet due and payable.
4.10 EQUIPMENT. Schedule 4.10 hereto sets forth a true and correct
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list as of January 2, 1996 (and a summary of tangible assets purchased
since such date) of all items of tangible personal property (including,
without limitation, computer hardware) necessary for or used in the
operation of the TWG Business in the manner in which it has been and is now
operated by TWG ("the TWG Equipment"), except for personal property having
a net book value of less than $1,000. Except as set forth on Schedule 4.10,
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each material item of TWG Equipment is in good condition and repair,
ordinary wear and tear excepted.
4.11 INTELLECTUAL PROPERTY.
(a) Schedule 4.11(a) hereto sets forth a list, by trade name or
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other commonly used description, of all material proprietary technology,
trade secrets, know-how, patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service ▇▇▇▇ rights,
copyrights, and other intellectual property rights used by TWG in the
conduct of the TWG Business (collectively, "TWG Intellectual Property
Rights"). No material intangible property is required for the conduct of
the TWG Business as it has been and is currently being conducted other than
the TWG Intellectual Property Rights. TWG owns, or is validly licensed or
otherwise has the right to use or exploit, all TWG Intellectual Property
Rights, free of any obligation to make any payment (whether of a royalty,
license fee, compensation or otherwise). No claims are pending or, to the
knowledge of TWG and the TWG Shareholder, threatened, that TWG is
infringing or otherwise adversely affecting the rights of any Person with
regard to any TWG Intellectual Property Right. TWG has used commercially
reasonable efforts to protect the TWG Intellectual Property Rights, and, to
the knowledge of TWG and the TWG Shareholder, no Person is infringing the
rights of TWG with respect to any TWG Intellectual Property Right. To the
knowledge of TWG and the TWG Shareholder, neither TWG nor any employee,
agent or independent contractor of TWG has used, appropriated or disclosed,
directly or indirectly, any trade secrets or other proprietary or
confidential information of any other Person, or otherwise violated any
confidential relationship with any other Person. To the knowledge of TWG
and the TWG Shareholder, use of the name "The ▇▇▇▇▇▇▇ Group" does not
infringe upon the rights of any Person.
(b) Schedule 4.11(b) hereto sets forth a list and a brief
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description of all material computer software used by TWG in the conduct of
the TWG Business (the "TWG Software"). TWG currently licenses, or otherwise
has the legal right to use, all of the TWG Software (including any
upgrades, alterations or enhancements with respect thereto), and all of
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the TWG Software is being used in compliance with any applicable licenses
or other agreements. No material computer software other than the TWG
Software is required for the conduct of the TWG Business as it has been and
is currently being conducted.
4.12 REAL PROPERTY. Except as set forth on Schedule 4.12 hereto:
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(a) TWG has good and insurable leasehold interest in all real
property (including all buildings, improvements and fixtures thereon) used
in the operation of the TWG Business (the "TWG Real Property"). TWG owns no
real property. Except for liens for current taxes not yet due and the items
set forth on Schedule 4.12, there are no Liens on TWG's interest in any of
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the TWG Real Property.
(b) There are no parties in possession of any portion of the
TWG Real Property other than TWG, whether as sublessees, subtenants at
will, trespassers or otherwise.
(c) There are water, sewer, gas and electrical lines presently
in existence on the TWG Real Property that are sufficient to service
adequately the operations of the TWG Business as presently operated in each
building located on the TWG Real Property.
(d) To the knowledge of TWG and the TWG Shareholder, there is
no pending or threatened condemnation or similar proceeding affecting the
TWG Real Property or any portion thereof, and, to the knowledge of TWG and
the TWG Shareholder, no such action is presently contemplated.
(e) To the knowledge of TWG and the TWG Shareholder, there are
no laws, ordinances, restrictions, judicial or administrative actions,
actions by adjacent landowners, or natural or artificial conditions upon
the TWG Real Property, or any other fact or condition, that would have a
material adverse effect upon the use of the TWG Real Property for the
operation of the TWG Business.
(f) To the knowledge of TWG and the TWG Shareholder, TWG's use,
operation and maintenance of the TWG Real Property does not violate any
restrictive covenants affecting the TWG Real Property, or any zoning,
building or other federal, state or municipal law, ordinance, regulation or
restriction.
(g) To the knowledge of TWG and the TWG Shareholder, there is
no law, ordinance, order, regulation or requirement now in existence or
under active consideration by any Governmental Entity, that would require,
under the provisions of any of the TWG Leases (as hereinafter defined), any
material expenditure by TWG to modify or improve any of the TWG Real
Property to bring it into compliance therewith.
(h) To the knowledge of TWG and the TWG Shareholder, there are
no structural, or material electrical, mechanical, plumbing, or other
defects in the buildings located on the TWG Real Property and the buildings
thereon are free from leaks.
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4.13 LEASES. Schedule 4.13 hereto sets forth a list of all leases
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pursuant to which TWG leases, as lessor or lessee, real or personal
property used in operating the TWG Business or otherwise (the "TWG
Leases"). Copies of the TWG Leases, which have previously been provided to
Parent, are true and complete copies thereof. All of the TWG Leases are
valid, binding and enforceable in accordance with their respective terms,
and there is not under any such TWG Lease any existing default by TWG, or,
to the knowledge of TWG and the TWG Shareholder, by any other party
thereto, or any condition or event of that, with notice or lapse of time or
both, would constitute a default. TWG has not received notice that the
landlord of any of the TWG Leases intends to cancel, suspend or terminate
the TWG Leases or to exercise or not exercise any options under any of the
TWG Leases. The current offices used by TWG are suitable for the operation
of the TWG Business in the manner in which it is now being conducted by
TWG.
4.14 CONTRACTS. Except as set forth on Schedule 4.14 hereto, TWG is
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not, directly or indirectly, a party (in its own name or as a successor in
interest), or otherwise bound by, any written or oral:
(a) material service agreement or commitment (including,
without limitation, agreements or commitments covering business and office
equipment, repairs, interior design, outdoor landscaping, graphics,
sanitation, voice mail, advertising, and vending machines);
(b) material supplier agreement or commitment (including,
without limitation, agreements or commitments involving office supplies,
cleaning supplies, food/refreshment supplies);
(c) material agreement or commitment with any customer of TWG
(including without limitation any agreement or commitment providing for a
retainer) entered into on or prior to March 26, 1997;
(d) shareholder agreement (including voting agreements, proxies
and the like);
(e) employment agreement;
(f) agreement or commitment relating to computer systems,
including those relating to hardware, software, maintenance, and upgrades;
(g) agreement or commitment with a term of more than one year;
(h) material merger or acquisition agreement or commitment
whereby TWG acquired or disposed of (or will acquire or dispose of) stock
or assets;
(i) agreement or commitment on the part of TWG to loan money
to, or to guarantee the indebtedness of, any third party;
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(j) agreement or commitment on the part of TWG to borrow money
from, or receive a guarantee of indebtedness from, any third party,
including, without limitation, any agreement in connection therewith
creating a Lien on any of the property or assets of TWG;
(k) agreement or commitment containing covenants (i) limiting,
directly or indirectly, the freedom of TWG to compete in any line of
business in any geographical area (including, without limitation, any such
agreement affecting any material employee of TWG); (ii) limiting, directly
or indirectly, the freedom of TWG to use any Intellectual Property Right in
any geographic area; or (iii) requiring TWG, directly or indirectly, to
share any profits or revenues;
(l) material warranty arrangements (whether TWG is the provider
or the recipient);
(m) agreement or commitment including dividend restrictions or
other negative covenants;
(n) indemnity agreements or commitments given or received by
TWG; or
(o) any other material agreement or commitment relating to TWG
or the TWG Business.
True and complete copies of each such written contract or commitment,
and a true and complete narrative description of any oral contract or
commitments, listed on Schedule 4.14 (collectively, the "TWG Contracts") have
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previously been made available to Parent. Neither TWG nor, to the knowledge of
TWG and the TWG Shareholder, any other party to any of the TWG Contracts, (x) is
in default under (nor does there exist any condition that, with notice or lapse
of time or both, would cause such a default under) any of the TWG Contracts, or
(y) has waived any material right it may have under any of the TWG Contracts.
All of the TWG Contracts constitute the valid and binding obligation of TWG,
and, to the knowledge of TWG and the TWG Shareholder, the other parties thereto.
For purposes of this Agreement, an agreement or commitment shall be deemed to be
"material" to the extent such agreement or commitment obligates TWG to pay, or
entitles TWG to receive, in any one year or in the aggregate, in excess of
$10,000. In addition to the foregoing, TWG hereby represents and warrants that
the aggregate value of all payment obligations, and rights to receive payments,
under agreements, contracts and commitments (whether oral or in writing) to
which TWG is a party or by which it is otherwise bound, that would not be
considered "material" in accordance with the preceding sentence is less than
$200,000 (calculating such value by adding together the value of rights and
obligations, and not by determining the net amount thereof).
4.15 DIRECTORS AND OFFICERS. Schedule 4.15 hereto sets forth a
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list, as of the date of this Agreement, of the name of each director and
officer of TWG and the offices held by each.
4.16 PAYROLL INFORMATION. Schedule 4.16 hereto sets forth a true
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and complete copy of the most recent payroll report of TWG, showing all
current employees of TWG and their current levels of compensation, other
than bonuses and other extraordinary compensation.
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4.17 LITIGATION. Except as set forth on Schedule 4.17 hereto, there
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is no suit, action, claim, investigation or proceeding pending or, to the
knowledge of TWG, threatened against or affecting TWG, the TWG Business, or the
TWG Shareholder, nor is there any judgment, decree, injunction or order of any
applicable Governmental Entity or arbitrator outstanding against TWG that,
either individually or in the aggregate, would have a material adverse effect on
the assets, business or financial condition of TWG.
4.18 EMPLOYEE BENEFIT PLANS/LABOR RELATIONS.
(a) Except as disclosed in Schedule 4.18 hereto, there are no
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employee benefit plans, agreements or arrangements maintained by TWG, including,
without limitation, (i) "employee benefit plans," within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (ii) affirmative action plans; (iii) current or deferred
compensation, pension, profit sharing, vacation or severance plans or programs;
or (iv) medical, hospital, accident, disability or death benefit plans
(collectively, "TWG Benefit Plans"). All TWG Benefit Plans are administered in
accordance with, and are in material compliance with, all applicable laws and
regulations. No default exists with respect to the obligations of TWG under any
TWG Benefit Plans.
(b) TWG is not a party to any collective bargaining agreement,
no such agreement determines the terms and conditions of employment of any
employee of TWG, no collective bargaining agent has been certified as a
representative of any of the employees of TWG, no representation campaign or
election is now in progress with respect to any employee of TWG and there are no
labor disputes, grievances, controversies, strikes or requests for union
representation pending, or, to the knowledge of TWG and the TWG Shareholder,
threatened, relating to or affecting the TWG Business. To the knowledge of TWG
and the TWG Shareholder, no event has occurred that could give rise to any such
dispute, controversy, strike or request for representation.
4.19 ERISA.
(a) All TWG Benefit Plans that are subject to ERISA have been
administered in accordance with, and are in material compliance with, the
applicable provisions of ERISA. Each of TWG Benefit Plans that is intended to
meet the requirements of Section 401(a) of the Code has been determined by the
Internal Revenue Service to meet such requirements within the meaning of such
provision. No TWG Benefit Plan is subject to Title IV of ERISA or Section 412
of the Code. TWG has not engaged in any non-exempt "prohibited transactions,"
as such term is defined in Section 4975 of the Code or Section 406 of ERISA,
involving TWG Benefit Plans that would subject TWG to the penalty or tax imposed
under Section 502(i) of ERISA or Section 4975 of the Code. TWG has not engaged
in any transaction described in Section 4069 of ERISA within the last five
years. Except as disclosed in Schedule 4.19 hereto or pursuant to the terms of
-------------
TWG Benefit Plans, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including, without limitation, severance, unemployment compensation or
golden parachute) becoming due to any director or other employee of TWG, (ii)
increase any benefits
11
otherwise payable under any TWG Benefit Plan or (iii) result in the acceleration
of the time of payment or vesting of any such benefits to any extent.
(b) No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any TWG Benefit Plan that is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is intended to meet the requirements of Section 401(a) of the Code, or by
any entity that is considered one employer with TWG under Section 4001 of ERISA
or Section 414 of the Code (an "ERISA Affiliate"), within the 12-month period
ending on the date hereof. TWG has not incurred any liability to the Pension
Benefit Guaranty Corporation in respect of any TWG Benefit Plan that remains
unpaid.
4.20 TAXES.
(a) TWG has duly and timely filed all federal, state and local
income, franchise, excise, real and personal property and other tax returns and
reports, including extensions, required to have been filed by TWG on or prior to
the date hereof. TWG has duly and timely paid all taxes and other governmental
charges, and all interest and penalties with respect thereto, required to be
paid by TWG (whether by way of withholding or otherwise) to any federal, state,
local or other taxing authority (except to the extent the same are being
contested in good faith, and adequate reserves therefore have been provided in
the TWG Financial Statements). As of the date hereof, all deficiencies proposed
as a result of any audits have been paid or settled.
(b) TWG is not a party to, or bound by, or otherwise in any way
obligated under, any tax sharing or similar agreement.
(c) TWG has not consented to have the provisions of Section
341(f)(2) of the Code (or comparable state law provisions) apply to it, and TWG
has not agreed or been requested to make any adjustment under Section 481(c) of
the Code by reason of a change in accounting method or otherwise.
4.21 COMPLIANCE WITH APPLICABLE LAWS. TWG holds all material
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary to own, lease or operate all of the assets and
properties of TWG, as appropriate, and to carry on the TWG Business as now
conducted (the "TWG Permits"). To the knowledge of TWG, TWG is in material
compliance with all applicable laws, ordinances and regulations and the terms of
the TWG Permits. Schedule 4.21 hereto sets forth a list of the TWG Permits, a
-------------
true and correct copy of each of which has been provided to Parent.
4.22 BOARD OF DIRECTOR/SHAREHOLDER CONSENT. Both the Board of
Directors of TWG and the TWG Shareholder have, by unanimous written consent,
adopted and approved this Agreement and the transactions contemplated hereby
(including, without limitation, the Merger).
12
4.23 BROKERS. Except as set forth on Schedule 4.23 hereto, no
-------------
broker or finder is entitled to any broker's or finder's fee or other commission
in connection with the transactions contemplated by this Agreement as a result
of arrangements made by or on behalf of TWG.
4.24 ENVIRONMENTAL MATTERS.
(a) To the knowledge of TWG and the TWG Shareholder, no real
property currently or formerly owned or operated by TWG is contaminated with any
Hazardous Substances (as hereinafter defined);
(b) TWG is not a party to any litigation or administrative
proceeding nor, to the knowledge of TWG and the TWG Shareholder, is any
litigation or administrative proceeding threatened against it, that, in either
case, asserts or alleges that TWG (i) violated any Environmental Laws (as
hereinafter defined); (ii) is required to clean up, remove or take remedial or
other response action due to the disposal, deposit, discharge, leak or other
release of any Hazardous Substances; or (iii) is required to pay all or a
portion of the cost of any past, present or future cleanup, removal or remedial
or other action that arises out of or is related to the disposal, deposit,
discharge, leak or other release of any Hazardous Substances.
(c) To the knowledge of TWG and the TWG Shareholder, there are
not now nor have there previously been tanks or other facilities on, under, or
at any real property owned, leased, used or occupied by TWG containing materials
that, if known to be present in soils or ground water, would require cleanup,
removal or other remedial action under Environmental Laws.
(d) To the knowledge of TWG and the TWG Shareholder, there are
no conditions existing currently that would subject TWG or the TWG Shareholder
(as owners of TWG) to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws, or that would require cleanup, removal, remedial
action or other response pursuant to Environmental Laws.
(e) To the knowledge of TWG and the TWG Shareholder, TWG is not
subject to any judgment, order or citation related to or arising out of any
Environmental Laws and has not been named or listed as a potentially responsible
party by any Governmental Entity in a matter related to or arising out of any
Environmental Laws.
(f) For purposes of this Agreement, (i) the term "Environmental
Law" means any federal, state or local law (including statutes, regulations,
ordinances, codes, rules, judicial opinions and other governmental restrictions
and requirements), relating to the discharge of air pollutants, water
pollutants, noise, odors or process waste water, or otherwise relating to the
environment or hazardous or toxic substances; and (ii) the term "Hazardous
Substance" means any toxic or hazardous substance that is regulated by or under
authority of any Environmental Law, including, without limitation, any petroleum
products, asbestos or polychlorinated biphenyls.
13
4.25 INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS. Except as
provided in Schedule 4.25 hereto, no officer, director, shareholder or employee
-------------
of TWG, and no family member of any of the foregoing, has any direct or indirect
interest in any customer, supplier or competitor of TWG, or in any Person from
whom or to whom TWG leases any real or personal property, or in any other Person
with whom TWG is doing business, whether directly or indirectly (including,
without limitation, as a debtor or creditor), whether in existence as of the
date hereof or proposed, other than the ownership of stock of publicly traded
corporations that does not exceed 1% of the issued and outstanding stock of such
corporation.
4.26 ACCOUNTS RECEIVABLE. All accounts, notes, contracts and other
receivables of TWG (collectively, "TWG Accounts Receivable") were acquired by
TWG in the ordinary course of business arising from bona fide transactions
completed in accordance with the terms and provisions contained in any documents
related thereto. To the knowledge of TWG and the TWG Shareholder, there are no
set-offs, counterclaims or disputes asserted with respect to any TWG Accounts
Receivable that would result in claims in excess of the reserve for bad debts
set forth on the TWG Financial Statements and, to the knowledge of TWG and the
TWG Shareholder, subject to such reserve, all TWG Accounts Receivable are
collectible in full. Schedule 4.26 hereto is a true and complete aging report
-------------
prepared as of February 28, 1997, which shows the time elapsed since invoice
date for all TWG Accounts Receivable.
4.27 ACCOUNTS PAYABLE. All material accounts, notes, contracts and
other amounts payable of TWG (collectively, "TWG Accounts Payable") are
currently within their respective terms, and are neither in default nor
otherwise past due by more than 90 days. Schedule 4.27 hereto is a true and
-------------
complete aging report prepared as of February 28, 1997, which shows the time
elapsed since invoice date for all TWG Accounts Payable.
4.28 INSURANCE. The insurance policies maintained by TWG (the "TWG
Insurance Policies") are listed on Schedule 4.28 hereto, and true and compete
-------------
copies of all TWG Insurance Policies have previously been provided to Parent.
TWG (i) is not in default regarding the provisions of any TWG Insurance Policy;
(ii) has paid all premiums due thereunder; and (iii) has not failed to present
any notice or present any material claim thereunder in a due and timely fashion.
4.29 BANKRUPTCY. Neither TWG nor the TWG Shareholder has filed a
petition or request for reorganization or protection or relief under the
bankruptcy laws of the United States or any state or territory thereof, made any
general assignment for the benefit of creditors, or consented to the appointment
of a receiver or trustee, including a custodian under the United States
bankruptcy laws, whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
4.30 ACCREDITED INVESTORS; INVESTMENT PURPOSE. The TWG Shareholder
represents that he is an "accredited investor" as such term is defined in Rule
501 of Regulation D promulgated by the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"). The TWG
Shareholder is acquiring the Parent Stock solely for his own account for
investment and not with a view to, or for sale in connection with, any
14
distribution thereof. The TWG Shareholder agrees that he will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of
any Parent Stock (or solicit any offers to buy, purchase or other acquire or
take a pledge of any such shares) except in compliance with the Securities Act
and the rules and regulations thereunder, other applicable laws, rules and
regulations, and the Stockholders' Agreement (as defined in Section 7.1 hereof).
4.31 RESTRICTIONS ON TRANSFER. The TWG Shareholder acknowledges
that (a) the Parent Stock received by him hereunder has not been registered
under the Securities Act; (b) the Parent Stock may be required to be held
indefinitely, and the TWG Shareholder must continue to bear the economic risk of
the investment in such shares unless such shares are subsequently registered
under the Securities Act or an exemption from such registration is available;
(c) there may not be any public market for the Parent Stock in the foreseeable
future; (d) Rule 144 promulgated under the Securities Act is not presently
available with respect to sales of any securities of Parent, and such Rule is
not anticipated to be available in the foreseeable future; (e) when and if
Parent Stock may be disposed of without registration in reliance upon Rule 144,
such disposition can be made only in limited amounts and in accordance with the
terms and conditions of such Rule; (f) if the exemption afforded by Rule 144 is
not available, public sale without registration will require the availability of
an exemption under the Securities Act; (g) the Parent Stock is subject to the
terms and conditions of the Stockholders' Agreement; (h) restrictive legends
shall be placed on the certificates representing Parent Stock; and (i) a
notation shall be made in the appropriate records of Parent indicating that
Parent Stock is subject to restrictions on transfer and, if Parent should in the
future engage the services of a stock transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to Parent Stock.
4.32 ABILITY TO BEAR RISK; ACCESS TO INFORMATION; SOPHISTICATION.
The TWG Shareholder represents and warrants that (a) his financial situation is
such that he can afford to bear the economic risk of holding Parent Stock
acquired by him hereunder for an indefinite period; (b) he can afford to suffer
the complete loss of such Parent Stock; (c) he has been granted the opportunity
to ask questions of, and receive answers from, representatives of Sub and Parent
concerning the terms and conditions of the Parent Stock and to obtain any
additional information that he deems necessary; (d) his knowledge and experience
in financial business matters is such that he is capable of evaluating the
merits and risk of ownership of the Parent Stock; and (e) he has carefully
reviewed the terms of the Stockholders' Agreement and has evaluated the
restrictions and obligations contained therein.
4.33 DISCLOSURE. No statement of fact by TWG contained in this
Agreement and no written statement of fact furnished or to be furnished by TWG
to Parent or Sub pursuant to or in connection with this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein contained not misleading.
15
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Each of Parent and Sub represents and warrants to TWG and the TWG
Shareholder, which representations and warranties shall survive the Closing in
accordance with Section 10.1 of this Agreement, as follows:
5.1 ORGANIZATION AND QUALIFICATION. Each of Parent and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. Each of Parent and
its Subsidiaries has the requisite corporate power and authority to carry on its
business as it is now being conducted and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary. Complete and correct copies of the Certificates
of Incorporation and Bylaws of Parent and Sub as in effect on the date hereof
are attached as Schedule 5.1 hereto. The minute books of Parent and Sub, a true
------------
and complete copy of each of which has been delivered to TWG, (a) accurately
reflects all action taken by the directors and shareholders of Parent at
meetings of Parent's Board of Directors or shareholders, as the case may be; and
(b) contains true and complete copies of, or originals of, the respective
minutes of all meetings or consent actions of the directors or shareholders.
5.2 AUTHORITY. Each of Parent and Sub has the necessary corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by each of Parent
and Sub have been duly and validly authorized and approved by their respective
Board of Directors and shareholders, and no other corporate or shareholder
proceedings on the part of either Parent or Sub, or their respective boards of
directors or shareholders, are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Parent and Sub, and assuming the due
authorization, execution and delivery by TWG and the TWG Shareholder,
constitutes the valid and binding obligation of each of Parent and Sub,
enforceable against each of Parent and Sub in accordance with its terms.
5.3 NO CONFLICTS, REQUIRED FILINGS AND CONSENTS. Except as set forth
on Schedule 5.3 hereto, none of the execution and delivery of this Agreement by
------------
Parent or Sub, the consummation by Parent and Sub of the transactions
contemplated hereby or compliance by Parent and Sub with any of the provisions
hereof will:
(a) conflict with or violate the Certificate of Incorporation or
Bylaws of Parent or Sub, or the organizational documents of any other
Subsidiaries (as defined in Section 10.12 hereof);
16
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to Parent or its Subsidiaries,
or by which Parent, any of its Subsidiaries, or their respective properties or
assets may be bound or affected;
(c) result in a violation or breach of, or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent, any of its Subsidiaries or their respective properties
may be bound or affected (collectively, for purposes of this Section 5.3, an
"IXL Agreement");
(d) result in the creation of any Lien on any of the property or
assets of Parent or any of its Subsidiaries; or
(e) require any Consent of (i) any Governmental Entity (except for
(x) compliance with any applicable requirements of any applicable securities
laws, and (y) the filing of the Certificates of Merger pursuant to the DGCL and
NBCA; or (ii) any other Person.
5.4 LITIGATION. Except as set forth on Schedule 5.4 hereto, there is
------------
no suit, action, claim, investigation or proceeding pending or, to the knowledge
of Parent, threatened against or affecting Parent or its Subsidiaries, nor is
there any judgment, decree, injunction or order of any applicable Governmental
Entity or arbitrator outstanding against Parent or its Subsidiaries that, either
individually or in the aggregate, would have a material adverse effect on the
assets, business or financial condition of Parent and its Subsidiaries, taken as
a whole.
5.5 BROKERS. Except as disclosed on Schedule 5.5 hereto, No broker
------------
or finder is entitled to any broker's or finder's fee in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Sub.
5.6 PARENT STOCK.
(a) As of the date hereof the authorized capital stock of Parent
consists of (i) (A) 250,000 shares of Class A Common Stock, $.01 par value (the
"Class A Common Stock"), of which no shares are validly issued and outstanding,
and (B) 1,000,000 shares of Class B Common Stock, $.01 par value, of which
40,748 shares are validly issued and outstanding (without taking into account
any shares of Parent Stock to be issued pursuant to this Agreement), fully paid
and nonassessable; and (ii) 250,000 shares of Class A Convertible Preferred
stock, of which 111,500 shares are validly issued and outstanding, fully paid
and nonassessable. All outstanding securities of Parent were issued in
accordance with applicable federal and state securities laws. Except as set
forth on Schedule 5.6(a) hereto, there are no options, warrants, calls,
---------------
agreements, commitments or other rights presently outstanding that would
obligate Parent to issue, deliver or sell shares of its capital stock, or to
grant, extend or enter into any such option, warrant, call, agreement,
commitment or other right. In addition to the foregoing, as of
17
the date hereof, Parent has no bonds, debentures, notes or other indebtedness
issued or outstanding that have voting rights in Parent under ordinary
circumstances.
(b) The holders of record as of the date hereof of the issued and
outstanding shares of capital stock of Parent are set forth on Schedule 5.6(b)
---------------
hereto.
(c) The holders of record as of the Effective Date of the outstanding
shares of capital stock of Parent, together with the number of shares of capital
stock then outstanding, are set forth on a pro forma basis on Schedule 5.6(c)
---------------
hereto (determined based on certain assumptions described therein).
(d) When delivered to the TWG Shareholder in accordance with the terms
hereof, the Parent Stock will (i) be duly authorized, fully paid and
nonassessable, (ii) represent 10.0327% of the issued and outstanding shares of
Parent Stock (determined based on the assumptions set forth on Schedule 5.6(c)),
---------------
(iii) represent, on an as-converted and fully diluted basis, 2.2574% of the
issued and outstanding capital stock of Parent (determined based on the
assumptions set forth in Schedule 5.6(c)), and (iv) be free and clear of all
---------------
Liens.
5.7 SUBSIDIARIES. Except as set forth on Schedule 5.7 hereto, Parent
------------
has no subsidiaries and does not otherwise own or control, directly or
indirectly, any equity interest in, or any security convertible into an equity
interest in, any corporation, partnership, limited liability company, joint
venture, association or other business entity. Schedule 5.7 hereto lists the
name of each of the Subsidiaries of Parent, and indicates their respective
jurisdictions of incorporation and authorized and outstanding capitalization.
All of the issued and outstanding shares of capital stock of each of the
Subsidiaries of Parent is duly authorized, validly issued, fully paid and non-
assessable and is owned by Parent free and clear of all Liens; and there are no
voting trusts, voting agreement or similar understandings applicable to such
shares. There are no outstanding subscriptions, options, rights, warrants,
puts, calls, registration or other agreements or commitments of any type (i)
obligating Parent or any of its Subsidiaries to issue, sell or transfer any
shares of capital stock of any subsidiary, any securities convertible into or
exchangeable for shares of capital stock of any Subsidiary, or any rights to
acquire capital stock of any Subsidiary; (ii) obligating Parent to grant, offer
or enter into any of the foregoing; or (iii) relating to the voting or control
of any shares of capital stock of any Subsidiary.
5.8 FINANCIAL STATEMENTS. Parent has heretofore furnished TWG with a
true and complete copy of (a) the audited financial statements of iXL
Interactive Excellence, Inc. (n/k/a iXL, Inc.) for the years ended December 31,
1993, 1994 and 1995; (b) audited combined financial statements for Creative
Video, Inc., Creative Video Library, Inc. and Entrepreneur Television, Inc. for
the years ending December 31, 1993, 1994 and 1995; (c) the unaudited combined
financial statements of iXL, Inc., Creative Video, Inc., Creative Video Library,
Inc. and Entrepreneur Television, Inc. for the four months ended April 30, 1996;
(d) the unaudited consolidated financial statements for Parent and its
Subsidiaries, dated December 31, 1996, for the eight months ended December 31,
1996; and (e) the unaudited consolidated financial statements for Parent and its
Subsidiaries, dated February 28, 1997 (collectively herein referred to as the
"Parent Financial Statements"). The Parent Financial Statements have been
prepared
18
in accordance with generally accepted accounting principles (except, in the case
of the unaudited financial statements, for the exclusion of footnotes and normal
year-end adjustments) consistently followed throughout the period indicated, and
present fairly, in all material respects, the financial position and operating
results of Parent and its Subsidiaries as of the dates, and during the periods,
indicated therein.
5.9 ABSENCE OF CHANGES. Except as provided in Schedule 5.9 hereto
------------
and except as contemplated by this Agreement, since December 31, 1996, (a)
neither Parent nor any of its Subsidiaries has entered into any transaction that
was not in the ordinary course of business; (b) there has been no sale,
assignment, transfer, mortgage, pledge, encumbrance or lease of any material
assets or properties of Parent or any of its Subsidiaries; (c) there has been
(i) no declaration or payment of a dividend, or any other declaration, payment
or distribution of any type or nature to any shareholder of Parent in respect of
its stock, whether in cash or property, and (ii) no purchase or redemption of
any shares of the capital stock of Parent; (d) there has been no declaration,
payment, or commitment for the payment by Parent or its Subsidiaries of a bonus
or other additional salary, compensation, or benefit to any employee of Parent
or any of its Subsidiaries that was not in the ordinary course of business; (e)
there has been no release, compromise, waiver or cancellation of any debts to or
claims by Parent or any of its Subsidiaries, or waiver of any rights of Parent
or any of its Subsidiaries, in each case having a value in excess of $10,000;
(f) there have been no capital expenditures by Parent in excess of $100,000 for
any single item, or $250,000 in the aggregate; (g) there has been no change in
accounting methods or practices or revaluation of any assets of Parent or its
Subsidiaries (other than Parent Accounts Receivable (as defined in Section 5.26
hereof) written down in the ordinary course of business that are not in excess
of $10,000 for any single Parent Account Receivable and $25,000 in the
aggregate); (h) there has been no material damage, destruction or loss of
physical property (whether or not covered by insurance) adversely affecting the
business or the operations of Parent or any of its Subsidiaries (referred to in
this Article 5 as "Parent's Business"); (i) there has been no loan by Parent or
any of its Subsidiaries, or guaranty by Parent or any of its Subsidiaries of any
loan, to any employee of Parent or any of its Subsidiaries or to any Person
related to Parent's Business; (j) neither Parent nor any of its Subsidiaries has
ceased to transact business with any customer that, as of the date of such
cessation, represented more than 5% of the annual gross revenues of Parent and
its Subsidiaries, taken as a whole; (k) there has been no termination or
resignation of any key employee or officer of Parent or any of its Subsidiaries,
and Parent is not aware of any such termination or resignation that is
threatened; (l) there has been no amendment or termination of any material oral
or written contract, agreement or license related to the Parent's Business, to
which Parent or any of its Subsidiaries is a party or by which Parent or any of
its Subsidiaries is bound, except in the ordinary course of business; (m)
neither Parent nor any of its Subsidiaries has failed to satisfy any of its
debts, obligations or liabilities related to Parent's Business, or the assets of
Parent or any of its Subsidiaries, as the same become due and owing (except for
Parent Accounts Payable (as defined in Section 5.27 hereof), payable in
accordance with past practices and in the ordinary course of business); (n)
there has been no agreement or commitment by Parent or any of its Subsidiaries
to do any of the foregoing; and (o) there has been no other event or condition
of any character pertaining to and materially affecting the assets, business or
financial condition of Parent and its Subsidiaries, taken as a whole.
19
5.10 UNDISCLOSED LIABILITIES. Except as set forth on Schedule 5.10
-------------
hereto, neither Parent nor any of its Subsidiaries has any debt, liability or
obligation of any kind, whether accrued, absolute or otherwise, including,
without limitation, any liability or obligation on account of taxes or any
governmental charges or penalty, interest or fines, except (a) liabilities not
in excess of $200,000 (whether individually or in the aggregate) incurred in the
ordinary course of business after December 31, 1996; (b) liabilities reflected
on the Parent Financial Statements; and (c) liabilities incurred as a result of
the transactions contemplated by this Agreement.
5.11 TITLE TO PROPERTIES. Except as set forth on Schedule 5.11
-------------
hereto, Parent or one of its Subsidiaries has good and marketable title to all
property and assets used in Parent's Business (other than Parent Real Property
(as defined in Section 5.14 hereof)), and good title to all of its leasehold
interests, in each case, free and clear of any and all Liens other than liens
for taxes not yet due and payable.
5.12 EQUIPMENT. Schedule 5.12 hereto sets forth a true and correct
-------------
list of all items of tangible personal property (including, without limitation,
computer hardware) necessary for or used in the operation of Parent's Business
in the manner in which it has been and is now operated by Parent (the "Parent
Equipment"), except for personal property having a net book value of less than
$1,000. Except as set forth on Schedule 5.12, each material item of Parent
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Equipment is in good condition and repair, ordinary wear and tear excepted.
5.13 INTELLECTUAL PROPERTY.
(a) Schedule 5.13(a) hereto sets forth a list, by trade name or
----------------
other commonly used description, of all material proprietary technology, trade
secrets, know-how, patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service ▇▇▇▇ rights, copyrights, and
other intellectual property rights used by Parent or its Subsidiaries in the
conduct of Parent's Business (collectively, "Parent Intellectual Property
Rights"). No material intangible property is required for the conduct of
Parent's Business as it has been and is currently being conducted other than the
Parent Intellectual Property Rights. Except as set forth on Schedule 5.13(a),
-----------------
Parent or one of its Subsidiaries owns, or is validly licensed or otherwise has
the right to use or exploit, all Parent Intellectual Property Rights, free of
any obligation to make any payment (whether of a royalty, license fee,
compensation or otherwise). No claims are pending or, to the knowledge of
Parent, threatened, that Parent or any of its Subsidiaries is infringing or
otherwise adversely affecting the rights of any Person with regard to any Parent
Intellectual Property Right. Parent and its Subsidiaries have used commercially
reasonable efforts to protect the Intellectual Property Rights, and, to the
knowledge of Parent, no Person is infringing the rights of Parent or its
Subsidiaries with respect to any Parent Intellectual Property Right. To the
knowledge of Parent, neither Parent nor any employee, agent or independent
contractor of Parent has used, appropriated or disclosed, directly or
indirectly, any trade secrets or other proprietary or confidential information
of any other Person, or otherwise violated any confidential relationship with
any other Person. To the knowledge of Parent, use of the names "iXL, Inc.", "IXL
Holdings, Inc." and the other names used in the conduct of Parent's Business do
not infringe upon the rights of any Person.
20
(b) Schedule 5.13(b) hereto sets forth a list and a brief
----------------
description of all material computer software used in the conduct of
Parent's Business (the "Parent Software"). Parent and/or its Subsidiaries
currently licenses, or otherwise has the legal right to use, all of the
Parent Software (including any upgrades, alterations or enhancements with
respect thereto), and all of the Parent Software is being used in
compliance with any applicable licenses or other agreements. No material
computer software other than the Parent Software is required for the
conduct of Parent's Business as it has been and is currently being
conducted.
5.14 REAL PROPERTY. Except as set forth on Schedule 5.14 hereto:
-------------
(a) Parent or one of its Subsidiaries has good and marketable,
insurable fee simple title or good and insurable leasehold interest in all
real property (including all buildings, improvements and fixtures thereon)
used in the operation of Parent's Business (the "Parent Real Property").
Attached to Schedule 5.14 are all policies of title insurance currently
-------------
existing in favor of Parent or one of its Subsidiaries with respect to the
Parent Real Property. Except for liens for current taxes not yet due and
the items set forth on Schedule 5.14, there are no Liens on any of the
-------------
Parent Real Property or the interest of Parent or one of its Subsidiaries
therein.
(b) There are no parties in possession of any portion of the
Parent Real Property other than Parent or one of its Subsidiaries, whether
as lessees, tenants at will, trespassers or otherwise.
(c) There are water, sewer, gas and electrical lines presently
in existence on the Parent Real Property that are sufficient to service
adequately the operations of Parent Business as presently operated in each
building located on the Parent Real Property.
(d) To the knowledge of Parent, there is no pending or
threatened condemnation or similar proceeding affecting the Parent Real
Property or any portion thereof, and, to the knowledge of Parent, no such
action is presently contemplated.
(e) To the knowledge of Parent, there are no laws, ordinances,
restrictions, judicial or administrative actions, actions by adjacent
landowners, or natural or artificial conditions upon the Parent Real
Property, or any other fact or condition, that would have a material
adverse effect upon the use of the Parent Real Property for the operation
of Parent's Business.
(f) Parent has not received any notice from any insurance
company of any defects or inadequacies in the Parent Real Property or any
part thereof that would materially adversely affect the insurability of
Parent's or its Subsidiaries' interest in the Parent Real Property or the
premiums for the insurance thereof.
(g) To the knowledge of Parent, neither Parent's nor its
Subsidiaries' use, operation and maintenance of the Parent Real Property
violates any restrictive covenants affecting the Parent Real Property, or
any zoning, building or other federal, state or municipal law, ordinance,
regulation or restriction.
21
(h) To the knowledge of Parent, there is no law, ordinance,
order, regulation or requirement now in existence, or, to the knowledge of
Parent, under active consideration by any Governmental Entity, that would
require Parent or its Subsidiaries (whether directly or under the
provisions of any of the Parent Leases (as hereinafter defined) covering
the Parent Real Property) to make any material expenditure to modify or
improve any of the Parent Real Property to bring it into compliance
therewith.
(i) To the knowledge of Parent, there are no structural, or
material electrical, mechanical, plumbing, or other defects in the
buildings located on the Parent Real Property and the buildings thereon are
free from leaks.
5.15 LEASES. Schedule 5.15 hereto sets forth a list of all leases
-------------
pursuant to which Parent or its Subsidiaries lease, as lessor or lessee,
real or personal property used in operating Parent's Business or otherwise
(the "Parent Leases"). Copies of the Parent Leases, which have previously
been made available to TWG, are true and complete copies thereof. All of
the Parent Leases are valid, binding and enforceable in accordance with
their respective terms, and there is not under any such Lease any existing
default by Parent or its Subsidiaries, or, to the knowledge of Parent, by
any other party thereto, or any condition or event of that, with notice or
lapse of time or both, would constitute a default. None of Parent or its
Subsidiaries has received notice that the landlord of any of the Parent
Leases intends to cancel, suspend or terminate the Parent Leases or to
exercise or not exercise any options under any of the Parent Leases.
5.16 CONTRACTS. Except as set forth on Schedule 5.16 hereto, neither
-------------
Parent nor any of its Subsidiaries is, directly or indirectly, a party (in
its own name or as a successor in interest), or otherwise bound by, any
written or oral:
(a) material service agreement or commitment (including, without
limitation, agreements or commitments covering business and office
equipment, repairs, interior design, outdoor landscaping, graphics,
sanitation, voice mail, advertising, and vending machines);
(b) material supplier agreement or commitment (including,
without limitation, agreements or commitments involving office supplies,
cleaning supplies, food/refreshment supplies);
(c) material agreement or commitment with any customer of Parent
or its Subsidiaries (including without limitation any agreement or
commitment providing for a retainer) entered into on or prior to March 26,
1997;
(d) shareholder agreement (including voting agreements, proxies
and the like) covering the shareholders of Parent;
(e) employment agreement covering employees of Parent or any of
its Subsidiaries;
22
(f) agreement or commitment relating to computer systems,
including those relating to hardware, software, maintenance, and upgrades;
(g) agreement or commitment with a term of more than one year;
(h) material merger or acquisition agreement or commitment
whereby Parent or any of its Subsidiaries acquired or disposed of (or will
acquire or dispose of) stock or assets;
(i) agreement or commitment on the part of Parent or any of its
Subsidiaries to loan money to, or to guarantee the indebtedness of, any
third party;
(j) agreement or commitment on the part of Parent or any of its
Subsidiaries to borrow money from, or receive a guarantee of indebtedness
from, any third party, including, without limitation, any agreement in
connection therewith creating a Lien on any of the property or assets of
Parent or any of its Subsidiaries;
(k) agreement or commitment containing covenants (i) limiting,
directly or indirectly, the freedom of Parent or any of its Subsidiaries to
compete in any line of business in any geographical area (including,
without limitation, any such agreement affecting any material employee of
Parent or any of its Subsidiaries); (ii) limiting, directly or indirectly,
the freedom of Parent or any of its Subsidiaries to use any Parent
Intellectual Property Right in any geographic area; or (iii) requiring
Parent, directly or indirectly, to share any profits or revenues;
(l) material warranty arrangements (whether Parent or any of its
Subsidiaries is the provider or the recipient);
(m) agreement or commitment including dividend restrictions or
other negative covenants;
(n) indemnity agreements or commitments given or received by
Parent or any of its Subsidiaries; or
(o) any other material agreement or commitment relating to
Parent, any of its Subsidiaries or Parent's Business.
True and complete copies of each such written contract or commitment,
and a true and complete narrative description of any oral contract or
commitments, listed on Schedule 5.16 (collectively, the "Parent Contracts")
-------------
have previously been made available to TWG. Neither Parent nor any of its
Subsidiaries nor, to the knowledge of Parent, any other party to any of the
Parent Contracts, (x) is in default under (nor does there exist any
condition that, with notice or lapse of time or both, would cause such a
default under) any of the Parent Contracts, or (y) has waived any material
right it may have under any of the Parent Contracts. All of the Parent
Contracts constitute the valid and binding obligation of Parent (or, if
applicable, its Subsidiary), and, to the knowledge of Parent, the other
parties thereto. For purposes of this Agreement, an agreement or commitment
shall be deemed to be "material" to the extent such agreement or
23
commitment obligates Parent (or its Subsidiary, if applicable) to pay, or
entitles Parent (or its Subsidiary) to receive, in any one year or in the
aggregate, in excess of $10,000. In addition to the foregoing, Parent
hereby represents and warrants that the aggregate value of all payment
obligations, and rights to receive payments, under agreements, contracts
and commitments (whether oral or in writing) to which Parent or any of its
Subsidiaries is a party or by which any thereof is otherwise bound, that
would not be considered "material" in accordance with the preceding
sentence is less than $200,000 (calculating such value by adding together
the value of rights and obligations, and not by determining the net amount
thereof).
5.17 DIRECTORS AND OFFICERS. Schedule 5.17 hereto sets forth a list,
-------------
as of the date of this Agreement, of the name of each director and officer
of Parent and the offices held by each.
5.18 PAYROLL INFORMATION. Schedule 5.18 hereto sets forth a true and
-------------
complete copy of the payroll report of Parent and each of its Subsidiaries
for March 14, 1997, showing all current employees of Parent and each of its
Subsidiaries and their current levels of compensation, other than bonuses
and other extraordinary compensation.
5.19 EMPLOYEE BENEFIT PLANS/LABOR RELATIONS.
(a) Except as disclosed in Schedule 5.19 hereto, there are no
-------------
employee benefit plans, agreements or arrangements maintained by Parent or
any of its Subsidiaries, including, without limitation, (i) "employee
benefit plans," within the meaning of Section 3(3) of ERISA; (ii)
affirmative action plans; (iii) current or deferred compensation, pension,
profit sharing, vacation or severance plans or programs; or (iv) medical,
hospital, accident, disability or death benefit plans (collectively,
"Parent Benefit Plans"). All Parent Benefit Plans are administered in
accordance with, and are in material compliance with, all applicable laws
and regulations. No default exists with respect to the obligations of
Parent under any Parent Benefit Plans.
(b) Neither Parent nor any of its Subsidiaries is a party to
any collective bargaining agreement, no such agreement determines the terms
and conditions of employment of any employee of Parent or any of its
Subsidiaries, no collective bargaining agent has been certified as a
representative of any of the employees of Parent or any of its
Subsidiaries, no representation campaign or election is now in progress
with respect to any employee of Parent or any of its Subsidiaries and there
are no labor disputes, grievances, controversies, strikes or requests for
union representation pending, or, to the knowledge of Parent, threatened,
relating to or affecting the Parent's Business. To the knowledge of Parent,
no event has occurred that could give rise to any such dispute,
controversy, strike or request for representation.
5.20 ERISA.
(a) All Parent Benefit Plans that are subject to ERISA have
been administered in accordance with, and are in material compliance with,
the applicable provisions of ERISA. Each of Parent Benefit Plans that is
intended to meet the requirements of Section 401(a) of the Code has been
determined by the Internal Revenue Service to meet such requirements within
the meaning of such provision. No Parent Benefit Plan is subject to Title
IV of ERISA or
24
Section 412 of the Code. Neither Parent nor any of its Subsidiaries has
engaged in any non-exempt "prohibited transactions," as such term is
defined in Section 4975 of the Code or Section 406 of ERISA, involving
Parent Benefit Plans that would subject Parent or any of its Subsidiaries
to the penalty or tax imposed under Section 502(i) of ERISA or Section 4975
of the Code. Neither Parent nor any of its Subsidiaries has engaged in any
transaction described in Section 4069 of ERISA within the last five years.
Except as disclosed in Schedule 5.20 hereto or pursuant to the terms of
-------------
Parent Benefit Plans, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance,
unemployment compensation or golden parachute) becoming due to any director
or other employee of Parent or any of its Subsidiaries, (ii) increase any
benefits otherwise payable under any Parent Benefit Plan or (iii) result in
the acceleration of the time of payment or vesting of any such benefits to
any extent.
(b) No notice of a "reportable event," within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not
been waived, has been required to be filed for any Parent Benefit Plan that
is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA and that is intended to meet the requirements of Section 401(a) of
the Code, or by any entity that is considered one employer with Parent
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate"), within the 12-month period ending on the date hereof. Neither
Parent nor any Subsidiary has incurred any liability to the Pension Benefit
Guaranty Corporation in respect of any Parent Benefit Plan that remains
unpaid.
5.21 TAXES.
(a) All federal, state and local income, franchise, excise, real
and personal property and other tax returns and reports, including
extensions, required to have been filed by Parent and its Subsidiaries
(including, where applicable, consolidated returns) on or prior to the date
hereof have been duly and timely filed by or on behalf of Parent and its
Subsidiaries. All taxes and other governmental charges, and all interest
and penalties with respect thereto, required to be paid by Parent and its
Subsidiaries (whether by way of withholding or otherwise) to any federal,
state, local or other taxing authority have been paid by or on behalf of
Parent and its Subsidiaries (except to the extent the same are being
contested in good faith, and adequate reserves therefore have been provided
in the Parent Financial Statements). As of the date hereof, all
deficiencies proposed as a result of any audits have been paid or settled.
(b) Neither Parent nor any of its Subsidiaries is a party to, or
bound by, or otherwise in any way obligated under, any tax sharing or
similar agreement.
(c) Neither Parent nor any of its Subsidiaries has consented to
have the provisions of Section 341(f)(2) of the Code (or comparable state
law provisions) apply to it, and Parent has not agreed or been requested to
make any adjustment under Section 481(c) of the Code by reason of a change
in accounting method or otherwise.
25
5.22 COMPLIANCE WITH APPLICABLE LAWS. Parent or its Subsidiaries
holds all material permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary to own, lease or operate
all of the assets and properties of Parent and its Subsidiaries, as
appropriate, and to carry on Parent's Business as now conducted (the
"Parent Permits"). To the knowledge of Parent, Parent and its Subsidiaries
are in material compliance with all applicable laws, ordinances and
regulations and the terms of the Parent Permits. Schedule 5.22 hereto sets
-------------
forth a list of the Parent Permits, a true and correct copy of each of
which has been made available to TWG.
5.23 BOARD OF DIRECTOR CONSENT. Both the Board of Directors of Parent
and Sub have, by unanimous written consent, adopted and approved this
Agreement and the transactions contemplated hereby (including, without
limitation, the Merger).
5.24 ENVIRONMENTAL MATTERS.
(a) To the knowledge of Parent, no real property currently or
formerly owned or operated by Parent or its Subsidiaries is contaminated
with any Hazardous Substances;
(b) None of Parent or its Subsidiaries is a party to any
litigation or administrative proceeding or, to the knowledge of Parent, is
any litigation or administrative proceeding threatened against Parent or
its Subsidiaries, that, in either case, asserts or alleges that Parent or
any of its Subsidiaries (i) violated any Environmental Laws; (ii) is
required to clean up, remove or take remedial or other response action due
to the disposal, deposit, discharge, leak or other release of any Hazardous
Substances; or (iii) is required to pay all or a portion of the cost of any
past, present or future cleanup, removal or remedial or other action that
arises out of or is related to the disposal, deposit, discharge, leak or
other release of any Hazardous Substances.
(c) To the knowledge of Parent, there are not now, nor have
there previously been, tanks or other facilities on, under, or at any real
property owned, leased, used or occupied by Parent or any of its
Subsidiaries containing materials that, if known to be present in soils or
ground water, would require cleanup, removal or other remedial action under
Environmental Laws.
(d) To the knowledge of Parent, there are no conditions
existing currently that would subject Parent or its Subsidiaries to
damages, penalties, injunctive relief or cleanup costs under any
Environmental Laws, or that would require cleanup, removal, remedial action
or other response pursuant to Environmental Laws.
(e) To the knowledge of Parent, neither Parent nor its
Subsidiaries is subject to any judgment, order or citation related to or
arising out of any Environmental Laws and, to the knowledge of Parent,
neither Parent nor its Subsidiaries have been named or listed as a
potentially responsible party by any Governmental Entity in a matter
related to or arising out of any Environmental Laws.
26
5.25 INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS. Except as
provided in Schedule 5.25 hereto, no officer, director, shareholder or
-------------
employee of Parent or any of its Subsidiaries, and no family member of any
of the foregoing, has any direct or indirect interest in any customer,
supplier or competitor of Parent or any of its Subsidiaries, or in any
Person from whom or to whom Parent leases any real or personal property, or
in any other Person with whom Parent or any of its Subsidiaries is doing
business, whether directly or indirectly (including, without limitation, as
a debtor or creditor), whether in existence as of the date hereof or
proposed, other than the ownership of stock of publicly traded corporations
that does not exceed 1% of the issued and outstanding stock of such
corporation.
5.26 ACCOUNTS RECEIVABLE. Except as set forth on Schedule 5.26
-------------
hereto, all accounts, notes, contracts and other receivables of Parent
(collectively, "Parent Accounts Receivable") were acquired by Parent in the
ordinary course of business arising from bona fide transactions completed
in accordance with the terms and provisions contained in any documents
related thereto. To the knowledge of Parent, there are no set-offs,
counterclaims or disputes asserted with respect to any Parent Accounts
Receivable that would result in claims in excess of the reserve for bad
debts set forth on the Parent Financial Statements and, to the knowledge of
Parent, subject to such reserve, all Parent Accounts Receivable are
collectible in full. Schedule 5.26 hereto is a true and complete aging
-------------
report prepared as of February 28, 1997, which shows the time elapsed since
invoice date for all Parent Accounts Receivable.
5.27 ACCOUNTS PAYABLE. All material accounts, notes, contracts and
other amounts payable of Parent and its Subsidiaries (collectively, "Parent
Accounts Payable") are currently within their respective terms, and are
neither in default nor otherwise past due by more than 90 days. Schedule
--------
5.27 hereto is a true and complete aging report prepared as of February 28,
----
1997, which shows the time elapsed since invoice date for all Parent
Accounts Payable.
5.28 INSURANCE. The insurance policies maintained by Parent or its
Subsidiaries (collectively, the "Parent Insurance Policies") are listed on
Schedule 5.28 hereto, and true and compete copies of all Parent Insurance
-------------
Policies have previously been made available to TWG. Neither Parent nor any
of its Subsidiaries (i) is in default regarding the provisions of any
Insurance Policy; (ii) has paid all premiums due thereunder; and (iii) has
not failed to present any notice or present any material claim thereunder
in a due and timely fashion.
5.29 BANKRUPTCY. Neither Parent nor any of its Subsidiaries has filed
a petition or request for reorganization or protection or relief under the
bankruptcy laws of the United States or any state or territory thereof,
made any general assignment for the benefit of creditors, or consented to
the appointment of a receiver or trustee, including a custodian under the
United States bankruptcy laws, whether such receiver or trustee is
appointed in a voluntary or involuntary proceeding.
5.30 DISCLOSURE. No statement of fact by Parent or Sub contained in
this Agreement and no written statement of fact furnished or to be
furnished by Parent or Sub to TWG pursuant to or in connection with this
Agreement contains or will contain any untrue statement of a
27
material fact or omits or will omit to state a material fact necessary in
order to make the statements herein or therein contained not misleading.
5.31 OWNERSHIP OF SUB; NO PRIOR ACTIVITIES. Sub was formed solely for
the purpose of engaging in the transactions contemplated by this Agreement.
As of the Effective Time, all of the outstanding capital stock of Sub will
be owned directly by Parent.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME. From and after
the date hereof, prior to the Effective Time, except as expressly
contemplated by this Agreement, TWG, Parent and its Subsidiaries shall each
carry on its business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, and shall use
reasonable efforts to keep available the services of its current employees
and preserve its relationships with suppliers and others having business
dealings with TWG, Parent or Parent's Subsidiaries, as the case may be.
Without limiting the generality of the foregoing, and except as expressly
contemplated by this Agreement, prior to the Effective Time, neither TWG,
Parent nor Parent's Subsidiaries shall:
(a) (i) declare, set aside, or pay any dividends on, or make any
other distributions in respect of, any of its capital stock (excluding
intercompany dividends), (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for, shares of its capital stock,
or (iii) purchase, redeem or otherwise acquire any shares of its capital
stock;
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock or any options to acquire any shares of its
capital stock;
(c) amend its Articles/Certificate of Incorporation, Bylaws or
other comparable organizational documents;
(d) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, limited
liability company, joint venture, association or other business
organization or division thereof;
(e) subject to a Lien or sell, lease or otherwise dispose of any
of its properties or assets, except in the ordinary course of business;
(f) (i) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, or issue or sell any debt
securities, guarantee any debt securities of another Person, or enter into
any "keep well" or other agreement to maintain any financial condition of
another Person, except, in any such case, for borrowings or other
transactions not in excess of $25,000 (whether individually or in the
aggregate), incurred in the ordinary course
28
of business, or (ii) make any loans, advances or capital contributions to,
or investments in, any other Person, or settle or compromise any material
claim or litigation (other than, in the case of Parent, in respect of any
payments made or services provided to University Netcasting, Inc.);
(g) declare, pay, or enter into a commitment to pay, any bonus
or other additional salary, compensation, or benefit to any employee not in
the ordinary course of business;
(h) release, compromise, waive or cancel any debts to or claims
by it, or waive any rights, in each case having a value in excess of
$2,500;
(i) change its accounting methods or practices;
(j) voluntarily cease to transact business with any customer
that, as of the date of such cessation, represents more than 5% of its
annual gross revenues;
(k) amend or terminate any oral or written contract, agreement
or license related to the TWG Business or the Parent's Business, to which
it is a party or by which it is bound, except in the ordinary course of
business, or except as expressly contemplated by this Agreement;
(l) fail to satisfy, within 180 days of the due date, any of its
material debts, obligations or liabilities related to the TWG Business or
Parent's Business, as the case may be, or its assets as the same become due
and owing; or
(m) authorize, commit or agree to take any of the foregoing
actions.
6.2 PUBLIC ANNOUNCEMENTS. The parties agree that, except as may
otherwise be required to comply with applicable laws and regulations
(including, without limitation, applicable securities laws), public
disclosure of the transactions contemplated by this Agreement shall be made
only upon or after the consummation of the Merger. Any such disclosure
shall be coordinated between the parties, and no party shall make any such
disclosure without the prior consent of the other parties, which consent
shall not be unreasonably withheld or delayed.
6.3 EFFORTS; CONSENTS.
(a) Subject to the terms and conditions herein provided, and
fiduciary duties under applicable law, each of the parties hereto agrees to
use its reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable, to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement and the Merger and to cooperate with each
other in connection with the foregoing. Without limiting the generality of
the foregoing, each of TWG, the TWG Shareholder and Parent shall use its
reasonable efforts to (i) obtain or cause to be obtained all Consents
required to be obtained in connection with the transactions contemplated by
this
29
Agreement, (ii) make or cause to be made all required filings with
applicable Governmental Entities, and (iii) use its reasonable efforts to
fulfill all conditions to this Agreement.
(b) Each of Parent and TWG shall promptly provide the other with
a copy of any inquiry or request for information (including notice of any
oral request for information), pleading, order or other document either
party receives from any Governmental Entity with respect to the matters
referred to in this Section 6.3.
6.4 TRANSFER AND GAINS TAXES AND CERTAIN OTHER TAXES AND EXPENSES.
Parent agrees that, to the extent it is legally able to do so, the
Surviving Corporation will pay all real property transfer, gains and other
similar taxes and all documentary stamps, filing fees, recording fees and
sales and use taxes, if any, and any penalties or interest with respect
thereto, payable in connection with consummation of the Merger.
6.5 BONUS. Parent shall pay, by wire transfer to such accounts as
shall be designated by TWG, bonuses (the "Bonuses") in the amounts and to
those individuals listed on Schedule 6.5 hereto.
------------
ARTICLE VII
CONDITIONS PRECEDENT
7.1 CONDITIONS TO OBLIGATION OF TWG AND THE TWG SHAREHOLDER TO
EFFECT THE MERGER. The obligation of TWG and the TWG Shareholder to effect
the Merger shall be subject to the fulfillment at or prior to the Effective
Time of the following conditions:
(a) Parent and Sub shall have performed in all material
respects all agreements, obligations and covenants contained in this
Agreement required to be performed by them at or prior to the Effective
Time;
(b) the representations and warranties of Parent and Sub
contained in this Agreement shall be true and correct in all material
respects when made, and at and as of the Effective Time, as if made at and
as of such time (except for representations and warranties made as of a
specified date, which need only be true as of such date), except as
otherwise provided in this Agreement;
(c) (i) the appropriate officers of Parent shall have executed
and delivered to TWG at the Closing, a closing certificate and incumbency
certificate, substantially in the form of Exhibit "A-1" hereto
------------
(collectively "Parent's Closing Certificate"), and (ii) the appropriate
officers of Sub shall have executed and delivered to TWG at the Closing, a
closing certificate and incumbency certificate, substantially in the form
of Exhibit "A-2" hereto (collectively "Sub's Closing Certificate");
------------
(d) Parent shall have obtained all of the Consents listed on
Schedule 7.1(e) hereto;
---------------
30
(e) TWG shall have received, at the Closing, a duly executed
opinion of counsel to Parent, substantially in the form of Exhibit "B"
-----------
hereto ("Parent's Opinion of Counsel");
(f) TWG shall have received a corporate certificate of good
standing for Parent and Sub, each issued by the Secretary of State of the
State of Delaware;
(f) Parent shall have executed and delivered to the TWG
Shareholder at the Closing (i) the First Amended and Restated Stockholders'
Agreement (the "Stockholders' Agreement"), substantially in the form of
Exhibit "C" hereto; (ii) an Employment Agreement for each of ▇▇▇▇▇▇▇ and
-----------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") substantially in the form of Exhibit "D" hereto
-----------
(each, an "Employment Agreement"); and (iii) an Option Agreement for each
of ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ substantially in the form of
Exhibit "E" hereto (each, an "Option Agreement");
-----------
(g) Parent shall have paid the Bonuses in accordance with
Section 6.5 hereof; and
(h) TWG shall have received from Parent such other documents as
TWG's counsel shall have reasonably requested, in form and substance
reasonably satisfactory to TWG's counsel.
7.2 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE MERGER.
The obligations of Parent and Sub to effect the Merger shall be subject to
the fulfillment, at or prior to the Effective Time of the following
conditions:
(a) TWG and TWG Shareholder shall have performed in all material
respects all agreements, obligations and covenants contained in this
Agreement required to be performed by them at or prior to the Effective
Time;
(b) the representations and warranties of TWG and the TWG
Shareholder contained in this Agreement shall be true and correct in all
material respects when made, and at and as of the Effective Time, as if
made at and as of such time (except for representations and warranties made
as of a specified date, which need only be true as of such date);
(c) There shall have been delivered to Parent at the Closing,
(i) the Stockholders' Agreement executed by ▇▇▇▇▇▇▇; (ii) an Employment
Agreement executed by each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇, an Employment Agreement;
(iii) an Option Agreement executed by each of ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇;
(d) the appropriate officers of TWG shall have executed and
delivered to Parent at the Closing, a closing certificate, substantially in
the form of Exhibit "F" hereto ("TWG's Closing Certificate");
-----------
(e) TWG and the TWG Shareholder shall have obtained or caused to
be obtained all of the Consents listed on Schedule 7.2(e) hereto;
---------------
31
(f) Parent shall have received a Certificate of Existence of
TWG, and a copy of the Articles of Incorporation of TWG, both as certified
by the Secretary of State of North Carolina;
(g) Parent shall have received, at the Closing, a duly executed
opinion of counsel to TWG and the TWG Shareholder, substantially in the
form of Exhibit "G" hereto ("TWG's Opinion of Counsel"); and
-----------
(h) Parent shall have received from TWG or the TWG Shareholder,
as the case may be, such other documents as Parent's counsel shall have
reasonably requested, in form and substance reasonably satisfactory to
Parent's counsel.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY PARENT.
(a) Parent shall indemnify and hold TWG, the TWG Shareholder and
TWG's directors, officers and employees (collectively, the "TWG Indemnified
Parties") harmless from and against, and agree promptly to defend each of
the TWG Indemnified Parties from and reimburse each of the TWG Indemnified
Parties for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including, without limitation,
reasonable attorney fees and other legal costs and expenses) (collectively
a "TWG Loss") that any of the TWG Indemnified Parties may at any time
suffer or incur, or become subject to, as a result of or in connection
with:
(i) any breach or inaccuracy of any of the
representations and warranties made by Parent or Sub in or pursuant to this
Agreement, or in any instrument, certificate or affidavit delivered by
Parent at the Closing in accordance with the provisions hereof;
(ii) any failure by Parent to carry out, perform, satisfy
and discharge any of its respective covenants, agreements, undertakings,
liabilities or obligations under this Agreement or under any of the
documents and materials delivered by Parent pursuant to this Agreement; and
(iii) any suit, action or other proceeding arising out of,
or in any way related to, any of the matters referred to in this Section
8.1.
(b) Notwithstanding any other provision to the contrary Parent
shall not have any liability under this Section 8.1, (i) unless the
aggregate of all TWG Losses for which Parent would be liable but for this
sentence exceeds on a cumulative basis an amount equal to $200,000 and then
only to the extent of such excess, and (ii) for amounts in excess of
$2,075,000, and (C) unless the TWG Shareholder has asserted a claim with
respect to the matters set forth in Section 8.1(a)(i) or 8.1(a)(iii) to the
extent applicable to Section 8.1(a)(i) within twenty-four (24) months
32
of the Effective Time. The parties acknowledge that a decrease in the value
of Parent Stock would not, by itself, constitute a TWG Loss, but to the
extent a decrease in the value of Parent Stock has been demonstrated to be
as a result of or in connection with any event described in Sections
8.1(a)(i), (ii) or (iii), such decrease would constitute a TWG Loss.
8.2 INDEMNIFICATION BY TWG SHAREHOLDER.
(a) The TWG Shareholder shall jointly and severally indemnify
and hold Parent, Sub, Surviving Corporation and their respective
shareholders, directors, officers and employees (collectively, the "Parent
Indemnified Parties") harmless from and against, and agree to promptly
defend each of the Parent Indemnified Parties from and reimburse each of
the Parent Indemnified Parties for, any and all losses, damages, costs,
expenses, liabilities, obligations and claims of any kind (including,
without limitation, reasonable attorney fees (collectively, a "Parent
Loss") that any of the Parent Indemnified Parties may at any time suffer or
incur, or become subject to, as a result of or in connection with:
(i) any breach or inaccuracy of any representations and
warranties made by TWG or TWG Shareholder in or pursuant to this Agreement,
or in any certificate or affidavit delivered by the same at the Closing in
accordance with the provisions hereof;
(ii) any failure by TWG or TWG Shareholder to carry out,
perform, satisfy and discharge any of their respective covenants,
agreements, undertakings, liabilities or obligations under this Agreement
or under any of the documents and materials delivered by TWG pursuant to
this Agreement; and
(iii) any suit, action or other proceeding arising out of,
or in any way related to, any of the matters referred to in this Section
8.2.
(b) Notwithstanding the above, the TWG Shareholder shall not
have any liability under this Section 8.2, (i) unless the aggregate of all
Parent Losses for which the TWG Shareholder would be liable but for this
sentence exceeds on a cumulative basis an amount equal to $200,000 and then
only to the extent of such excess, (ii) for amounts in excess of
$2,075,000, and (iii) unless Parent has asserted a claim with respect to
the matters set forth in Section 8.2(a)(i) or 8.2(a)(iii) (to the extent
applicable to Section 8.2(a)(i) within twenty-four (24) months of the
Effective Time, except with respect to the matters arising under Sections
4.19 and 4.24 hereof, in which event Parent must have asserted a claim
within thirty-six (36) months of the Effective Time, and matters arising
under Section 4.20 hereof, in which event Parent must have asserted a claim
within forty-two (42) months of the Effective Time.
8.3 NOTIFICATION OF CLAIMS; ELECTION TO DEFEND.
(a) A party entitled to be indemnified pursuant to Section 8.1
or 8.2 hereof, as the case may be (the "Indemnified Party"), shall notify
the party liable for such indemnification (the "Indemnifying Party") in
writing of any claim or demand (a "Claim") that
33
the Indemnified Party has determined has given or could give rise to a
right of indemnification under this Agreement.
(b) If the Indemnified Party shall notify the Indemnifying Party
of any Claim pursuant to Section 8.3(a) hereof, and if such Claim relates
to a Claim asserted by a third party against the Indemnified Party that the
Indemnifying Party acknowledges is a Claim for which it must indemnify or
hold harmless the Indemnified Party under Section 8.1 or 8.2 hereof, as the
case may be, the Indemnifying Party shall have the right, at its sole cost
and expense, to employ counsel of its own choosing to defend any such Claim
asserted against the Indemnified Party. The Indemnified Party shall have
the right to participate in the defense of any such Claim at its own
expense, but the Indemnifying Party shall retain control over such
litigation. The Indemnifying Party shall notify the Indemnified Party in
writing, as promptly as possible (but in any case before the due date for
the answer or response to a claim) after the date of the notice of claim
given by the Indemnified Party to the Indemnifying Party under Section
8.3(a) hereof of its election to defend in good faith any such third party
Claim. So long as the Indemnifying Party is defending in good faith any
such Claim asserted by a third party against the Indemnified Party, the
Indemnified Party shall not settle or compromise such Claim without the
prior written consent of the Indemnifying Party. The Indemnified Party
shall cooperate with the Indemnifying Party in connection with any such
defense and shall make available to the Indemnifying Party or its agents
all records and other materials in the Indemnified Party's possession
reasonably required by it for its use in contesting any third party Claim;
provided, however, that the Indemnifying Party shall have agreed, in
-------- -------
writing, to keep such records and other materials confidential expect to
the extent required for defense of the relevant Claim. Whether or not the
Indemnifying Party elects to defend any such Claim, the Indemnified Party
shall have no obligations to do so. Within 30 days after a final
determination (including, without limitation, a settlement) has been
reached with respect to any Claim contested pursuant to this Section
8.2(b), the Indemnifying Party shall satisfy its obligations with respect
thereto. Any amounts paid thereafter shall include interest thereon for the
period commencing at the end of such 30-day period and ending on the actual
date of payment, at a rate of 9% per annum, or, if lower, at the highest
rate of interest permitted by applicable law at the time of such payment.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time:
(a) by mutual written consent of Parent and TWG;
(b) by TWG, upon a material breach of this Agreement on the part
of Parent or Sub that has not been cured by the earlier of (i) 15 days
after written notice of such breach has been received by Parent, and (ii)
April 15, 1997;
34
(c) by Parent, upon a material breach of this Agreement on the
part of TWG or the TWG Shareholder set forth in this Agreement that has not
been cured by the earlier of (i) 15 days after receipt of written notice of
such breach has been received by TWG, and (ii) April 15, 1997;
(d) by Parent or TWG if any court of competent jurisdiction
shall have issued, enacted, entered, promulgated or enforced any order,
judgment, decree, injunction or ruling which restrains, enjoins or
otherwise prohibits the Merger and such order, judgment, decree, injunction
or ruling shall have become final and nonappealable; or
(e) by either Parent or TWG if the Merger shall not have been
consummated on or before April 15, 1997; provided the terminating party is
not otherwise in material breach of its representations, warranties or
obligations under this Agreement.
9.2 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either
Parent or TWG as provided in Section 9.1 hereof (other than pursuant to
Section 9.1(b) or (c) hereof), this Agreement shall forthwith become void
and there shall be no liability hereunder on the part of any of TWG, TWG
Shareholder or Parent or the respective officers or directors of Parent or
TWG; provided that Sections 9.2, 9.3 and 10.4 shall survive such
termination.
(b) In the event of a termination of this Agreement pursuant to
Section 9.1(b) or (c) hereof, then Parent, in the case of a termination
under Section 9.1(c) hereof, or TWG and the TWG Shareholder, in the case of
a termination under Section 9.1(b) hereof, shall be entitled to claim as
its sole liquidated damages the sum of $100,000, together with any interest
accrued thereon, as such party's sole remedy at law or in equity. The
parties further agree that the liquidated damages provided in this Section
9.2(b) are intended to apply to limit the claims that any party may have
against the other in the circumstances described herein.
(c) The parties acknowledge and agree that the liquidated
damages provided in Section 9.2(b) hereof bear a reasonable relationship to
the anticipated harm that will be caused by a breach of this Agreement. The
parties further acknowledge and agree that the amount of actual loss caused
by a breach of this Agreement is incapable and difficult of precise
estimation and that the parties would not have a convenient and adequate
alternative to liquidated damages hereunder.
9.3 FEES AND EXPENSES. All reasonable fees and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses.
9.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto; provided that
after the Effective Time, any such amendment must be signed by the former
holders of a majority of the TWG Stock.
35
9.5 WAIVER. At any time prior to the Effective Time, the parties
hereto may, to the extent permitted by applicable law, (i) extend the time
for the performance of any of the obligations or other acts of any other
party hereto, (ii) waive any inaccuracies in the representations and
warranties by any other party contained herein or in any documents
delivered by any other party pursuant hereto and (iii) waive compliance
with any of the agreements of any other party or with any conditions to its
own obligations contained herein; provided, however, that any agreement
-------- -------
granting any such extension or waiver shall be valid only if set forth in
an instrument in writing signed by the party granting such extension or
waiver.
ARTICLE X
GENERAL PROVISIONS
10.1 SURVIVAL; RECOURSE. None of the agreements contained in this
Agreement shall survive the Merger, except that (i) the agreements
contained in Article III hereof, the obligations to indemnify contained in
Article VIII hereof and the agreements of the Surviving Corporation
referred to in Sections 10.10 and 10.11 hereof, shall survive the Merger
indefinitely (except to the extent a shorter period of time is explicitly
specified therein) and (ii) the representations and warranties made in
Articles IV and V of this Agreement shall survive the Merger, and shall
survive any independent investigation by the parties, and any dissolution,
merger or consolidation of TWG or Parent, and shall bind the legal
representatives, assigns and successors of TWG, the TWG Shareholder,
Parent, for a period of two years after the Closing Date (other than the
representations and warranties contained in Sections 4.19 and 4.24 hereof,
which shall survive for a period of three years after the Closing Date, and
the representations and warranties contained in Section 4.20 hereof, which
shall survive for a period of three and a half years after the Closing
Date).
10.2 NOTICES. All notices or other communications under this
Agreement shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in Person, by telecopy (with
confirmation of receipt), or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to TWG: The ▇▇▇▇▇▇▇ Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief
Executive Officer
With copies to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
Attorneys at Law
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: 704/378-4000
36
If to the TWG The ▇▇▇▇▇▇▇ Group, Inc.
Shareholder: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Executive Officer
With copies to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
Attorneys at Law
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: 704/378-4000
If to Parent: IXL Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: 404/350-9823
With copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, A Professional Corporation
One Buckhead Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: 404/233-5824
and to: ▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Esq.
Telecopy: 212/223-2379
If to Sub/Surviving
Corporation: IXL Merger Corp. II, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: 404/350-9823
37
With copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, A Professional Corporation
One Buckhead Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: 404/233-5824
and to: ▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Esq.
Telecopy: 212/223-2379
or to such other address as any party may have furnished to the other
parties in writing in accordance with this Section.
10.3 ENTIRE AGREEMENT. This Agreement and the documents, schedules
and instruments referred to herein and to be delivered pursuant hereto
constitute the entire agreement between the parties pertaining to the
subject matter hereof, and supersede all other prior agreements and
understandings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof. There are no other
representations or warranties, whether written or oral, between the parties
in connection the subject matter hereof, except as expressly set forth
herein.
10.4 CONFIDENTIALITY.
(a) Parent agrees that prior to the Effective Time, Parent and
its respective agents and representatives shall not use for its or their
own benefit (except when required by law, rule or regulation and except for
use in connection with Parent's financing of the transaction and Parent's
investigation of the TWG Business and its assets in connection with this
Agreement), and shall hold in strict confidence and not disclose, (i) any
data or information relating to TWG, its affiliates, or the TWG Business
obtained from TWG or the TWG Shareholder or any of their directors,
officers, employees, agents or representatives in connection with this
Agreement, or (ii) any data and information relating to the business,
customers, financial statements, conditions or operations of the TWG
Business which is confidential in nature and not generally known to the
public (clauses (i) and (ii) together, "TWG's Information"). If the
transactions contemplated in this Agreement are not consummated for any
reason, Parent shall return to TWG all data, information and any other
written material obtained by Parent from TWG in connection with this
transaction and any copies, summaries or extracts thereof, and shall
refrain from disclosing any of TWG's Information to any third party or
using any of TWG's Information for its own benefit or that of any other
person.
(b) TWG and the TWG Shareholder agree that TWG and their agents
and representatives shall not use for their own benefit (except when
required by law, rule or regulation and except for use in connection with
its investigations and review of Parent in connection with this Agreement),
and shall hold in strict confidence and not disclose, (i) any data
38
or information, relating to Parent or its affiliates obtained from Parent,
or from any of its directors, officers, employees, agents or
representatives, in connection with this Agreement, or (ii) any data and
information relating to the business, customers, financial statements,
conditions or operations of Parent which is confidential in nature and not
generally known to the public (clauses (i) and (ii) together "Parent's
Information"). If the transactions contemplated in this Agreement are not
consummated for any reason, TWG shall return to Parent all data,
information and any other written material obtained by Seller from Buyer in
connection with this transaction and any copies, summaries or extracts,
thereof and shall refrain from disclosing any of Parent's Information to
any third party or using any of Parent's Information for its own benefit or
that of any other person.
10.5 ASSIGNMENTS; PARTIES IN INTEREST. Neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that the rights,
interests, and obligations of Sub hereunder may be assigned to any wholly
owned Delaware subsidiary of Parent without such prior consent. Subject to
the preceding sentence, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person not a
party hereto any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement, except as otherwise provided herein.
10.6 GOVERNING LAW. This Agreement, except to the extent that the
NBCA or the DGCL is mandatorily applicable to the Merger or the rights of
the shareholders of TWG or the other parties hereto with respect to the
Merger, shall be governed in all respects by the laws of the State of
Georgia (without giving effect to the provisions thereof relating to
conflicts of law).
10.7 HEADINGS. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
10.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
taken together shall constitute a single agreement.
10.9 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economics or
legal substance of the transactions contemplated hereby are not affected in
any manner materially adverse to any party. Upon determination that any
term or other provision hereof is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
39
10.10 POST-CLOSING ACCESS. For a period of at least three years after
the Closing Date, TWG Shareholder and their agents and representatives
shall have reasonable access to the books and records of TWG.
10.11 POST-CLOSING NOTICE. To the extent the Surviving Corporation
receives written notice of any event or circumstance that materially
affects the TWG Shareholder, the Surviving Corporation shall promptly
notify the affected TWG Shareholder of such matter, information, or event
and shall provide them with copies of all relevant documentation or
correspondence in connection thereto.
10.12 CERTAIN DEFINITIONS. As used in this Merger Agreement (a) the
term "Subsidiary" or "Subsidiaries" means, with respect to Parent or any
other Person, any corporation, partnership, joint venture or other legal
entity of which Parent or such other Person, as the case may be (either
alone or through or together with any other Subsidiary) owns, directly or
indirectly, stock or other equity interests the holders of which are
generally entitled to more than 50% of the vote for the election of the
board of directors or other governing body of such corporation or other
legal entity (including, without limitation, Sub); provided, however, that
-------- -------
with respect to the Parent, the terms "Subsidiary" and "Subsidiaries" shall
not include (i) University Netcasting, Inc., (ii) Virtual Resources, Inc.,
or (iii) IXL Merger Corp. III, Inc.; and (b) any representation or warranty
stated to be made "to the knowledge" of a party shall refer to such party's
knowledge following reasonable inquiry as to the matter in question;
provided, that knowledge of TWG shall refer solely to the knowledge of
▇▇▇▇▇▇▇ and ▇▇▇▇▇.
- SIGNATURES ON THE FOLLOWING PAGE -
40
IN WITNESS WHEREOF, Parent, Sub and TWG have caused this Agreement to
be signed by their respective officers thereunder duly authorized, and TWG
Shareholder has signed this Agreement, all as of the date first written
above.
"TWG"
THE ▇▇▇▇▇▇▇ GROUP, INC., a North Carolina corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------------------------
Title: CEO
---------------------------------------------------------
[Corporate Seal]
"PARENT"
IXL HOLDINGS, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------------------
Title: Executive Vice President
---------------------------------------------------------
"SUB"
IXL MERGER CORP. II, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------------------
Title: Vice President
---------------------------------------------------------
[Corporate Seal]
"TWG SHAREHOLDER"
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
41
EXHIBITS
--------
Parent's Closing Certificate....................................... Exhibit A-1
Sub's Closing Certificate.......................................... Exhibit A-2
Parent's Opinion of Counsel........................................ Exhibit B
Stockholders' Agreement............................................ Exhibit C
Employment Agreement............................................... Exhibit D
Option Agreement................................................... Exhibit E
TWG's Closing Certificate.......................................... Exhibit F
TWG's Opinion of Counsel........................................... Exhibit G
SCHEDULE 2.1
------------
CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION
SCHEDULE 4.1
------------
ARTICLES OF INCORPORATION AND BYLAWS OF TWG
SCHEDULE 4.3
------------
OUTSTANDING OBLIGATIONS OF TWG TO ISSUE OPTIONS, WARRANTS OR OTHER
TWG STOCK RIGHTS
SCHEDULE 4.5
------------
CONFLICTS, REQUIRED FILINGS AND CONSENTS OF TWG
SCHEDULE 4.6
------------
FINANCIAL STATEMENTS OF TWG
SCHEDULE 4.7
------------
EXCEPTIONS TO ABSENCE OF CHANGES OF TWG
SCHEDULE 4.8
------------
UNDISCLOSED LIABILITIES OF TWG
SCHEDULE 4.9
------------
EXCEPTIONS TO TITLE TO PROPERTIES OF TWG
SCHEDULE 4.10
-------------
EQUIPMENT OF TWG
SCHEDULE 4.11(A)
----------------
INTELLECTUAL PROPERTY OF TWG
SCHEDULE 4.11(B)
----------------
TWG SOFTWARE
SCHEDULE 4.12
-------------
EXCEPTIONS TO TWG REAL PROPERTY
SCHEDULE 4.13
-------------
LEASES OF TWG
SCHEDULE 4.14
-------------
CONTRACTS OF TWG
SCHEDULE 4.15
-------------
LIST OF DIRECTORS AND OFFICERS OF TWG
SCHEDULE 4.16
-------------
PAYROLL INFORMATION OF TWG
SCHEDULE 4.17
-------------
LITIGATION OF TWG
SCHEDULE 4.18
-------------
EMPLOYEE BENEFIT PLANS/LABOR RELATIONS OF TWG
SCHEDULE 4.19
-------------
ERISA ISSUES OF TWG
SCHEDULE 4.21
-------------
TWG PERMITS
SCHEDULE 4.23
-------------
BROKERS OF TWG
SCHEDULE 4.25
-------------
INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS
SCHEDULE 4.26
-------------
AGING REPORT FOR TWG ACCOUNTS RECEIVABLE PREPARED AS OF FEBRUARY 28, 1997
SCHEDULE 4.27
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AGING REPORT FOR TWG ACCOUNTS PAYABLE PREPARED AS OF FEBRUARY 28, 1997
SCHEDULE 4.28
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INSURANCE OF TWG
SCHEDULE 5.1
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CERTIFICATE OF INCORPORATION AND BYLAWS OF PARENT AND SUB
SCHEDULE 5.3
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CONFLICTS, REQUIRED FILINGS AND CONSENTS OF PARENT AND SUB
SCHEDULE 5.4
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PARENT LITIGATION
SCHEDULE 5.5
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PARENT BROKERS
SCHEDULE 5.6(A)
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PARENT STOCK RIGHTS OUTSTANDING
SCHEDULE 5.6(B)
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PARENT STOCKHOLDERS AS OF THE DATE OF THE MERGER AGREEMENT
SCHEDULE 5.6(C)
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PARENT STOCKHOLDERS AS OF THE EFFECTIVE DATE
SCHEDULE 5.7
------------
SUBSIDIARIES OF PARENT
SCHEDULE 5.9
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EXCEPTIONS TO ABSENCE OF CHANGES OF PARENT
SCHEDULE 5.10
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UNDISCLOSED LIABILITIES OF PARENT
SCHEDULE 5.11
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EXCEPTIONS TO TITLE TO PROPERTIES OF PARENT
SCHEDULE 5.12
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PARENT EQUIPMENT
SCHEDULE 5.13(A)
----------------
INTELLECTUAL PROPERTY OF PARENT
SCHEDULE 5.13(B)
----------------
PARENT SOFTWARE
SCHEDULE 5.14
-------------
TITLE POLICIES TO AND LIENS ON REAL PROPERTY OF PARENT
SCHEDULE 5.15
-------------
LEASES OF PARENT
SCHEDULE 5.16
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CONTRACTS OF PARENT
SCHEDULE 5.17
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DIRECTORS AND OFFICERS OF PARENT
SCHEDULE 5.18
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PAYROLL OF PARENT AND SUBSIDIARIES
SCHEDULE 5.19
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EMPLOYEE BENEFIT PLANS/LABOR RELATIONS
SCHEDULE 5.20
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ERISA OF PARENT
SCHEDULE 5.22
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PARENT PERMITS
SCHEDULE 5.25
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INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS
SCHEDULE 5.26
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PARENT ACCOUNTS RECEIVABLE
SCHEDULE 5.27
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PARENT ACCOUNTS PAYABLE
SCHEDULE 5.28
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PARENT INSURANCE POLICIES
SCHEDULE 6.5
------------
PARENT BONUSES PAYABLE TO TWG EMPLOYEES
SCHEDULE 7.1(E)
---------------
PARENT CONSENTS
SCHEDULE 7.2(E)
---------------
CONSENTS OF TWG