1
EXHIBIT 2.02
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered
into as of this 8th day of April, 1998, by and among Excite, Inc., a California
corporation ("Excite"), Clwyd Corporation, a Delaware corporation and a wholly
owned subsidiary of Excite ("Sub"), Throw Inc., a Washington corporation
("Throw"), and, with respect to Sections 1.6, 2, 4.4, 4.10 and 10
only, Xxxxx Xxxxx (the "Principal").
RECITALS
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, Sub will merge with and into Throw in a reverse
triangular merger (the "Merger"), with Throw to be the surviving corporation of
the Merger, pursuant to the terms and conditions of this Agreement and an
Agreement of Merger to be filed with the State of Delaware substantially in the
form of Exhibit A attached hereto (the "Agreement of Merger") and the Articles
of Merger to be filed with the State of Washington substantially in the form of
Exhibit B attached hereto (the "Articles of Merger") and the applicable
provisions of the law of the State of Delaware and the law of the State of
Washington. Upon the effectiveness of the Merger, all of the outstanding Common
Stock and Preferred Stock of Throw will be converted into Common Stock of Excite
("Excite Common Stock"). In addition, all outstanding options ("Throw Options")
and warrants ("Throw Warrants") to purchase shares of the Common Stock of Throw
will be converted into options and warrants, respectively, to purchase Excite
Common Stock, all as provided in this Agreement and the Agreement of Merger. All
debt or other instruments which by their terms are convertible into or
exchangeable for equity securities of Throw ("Throw Convertible Debt") will be
treated as set forth in Section 1.1.1(iv).
B. The Merger is intended to be treated as a tax-free reorganization
pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"), by virtue of the provisions of Section
368(a)(2)(E) of the Code and may be treated as a "pooling of interests" for
accounting purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. PLAN OF REORGANIZATION
1.1 The Merger. An Agreement of Merger and Articles of Merger,
respectively, will be filed with the office of the Secretary of State of
Delaware and Washington, respectively, as soon as practicable after the Closing
Date (as defined in Section 6.1 hereof). The effective date and time of the last
such filing is referred to herein as the "Effective Time". At the Effective
Time, Sub will be merged with and into Throw pursuant to this Agreement, the
Agreement of Merger and the Articles of Merger and in accordance with applicable
provisions of the law of the State of Delaware and law of the State of
Washington as follows:
1.1.1 Conversion of Shares. Each share of Throw Common Stock (the
"Throw Common Stock") and each share of Throw Series A Preferred Stock (the
"Throw A Preferred") (collectively, the "Throw Capital Stock") issued and
outstanding immediately prior to the Effective Time, other than shares, if any,
for which dissenters rights have been or will be perfected in compliance with
applicable law, will by virtue of the Merger and at the Effective Time, and
without further action on the part of any holder thereof (the "Throw
Shareholder(s)"),
1
2
be converted into the right to receive the "Common Applicable Fraction" of a
fully paid and nonassessable share of Excite Common Stock.
(i) The Total Excite Shares. The total shares of Excite Common
Stock issuable hereunder (the "Total Excite Shares") shall be determined by
dividing Sixteen Million Dollars ($16,000,000.00) less the total Throw
Convertible Debt and the Company's obligations to a certain consultant ("Throw
Consultant Debt"), each as indicated on Exhibit 4.18 (the "Excite Purchase
Price"), by the average of the NASDAQ closing prices of Excite's Common Stock on
all of the following days: (i) the ten (10) trading days prior to the execution
of the Letter of Intent, which was executed on March 12, 1998 (the "Letter of
Intent"), (ii) the date of the execution of the Letter of Intent and (iii) the
ten (10) trading days after the execution of the Letter of Intent (the "Per
Share Market Value"). The Per Share Market Value is equal to $49.28290.
(ii) Common Applicable Fraction. The Common Applicable
Fraction shall be determined by dividing (A) the Total Excite Shares (as defined
above in Subsection 1.1.1(i)) by (B) the "Total Throw Shares", which shall equal
the sum of: (i) the total number of shares of Throw Common Stock outstanding
immediately prior to the Effective Time, (ii) the total number of shares of
Throw Common Stock into which all shares of Throw A Preferred that are
outstanding as of the date hereof could be converted, and (iii) the total number
of shares of Throw Common Stock issuable upon exercise of all Throw Options and
Throw Warrants outstanding immediately prior to the Effective Time (collectively
the "Total Throw Shares"). The Common Applicable Fraction is equal to 0.15849.
(iii) Application of the Common Applicable Fraction. The
holders of Throw Common Stock shall receive such number of shares of Excite
Common Stock equal to the Common Applicable Fraction multiplied by the number of
shares of Throw Common Stock so held by such shareholder. The holders of Throw A
Preferred shall receive such number of shares of Excite Common Stock equal to
the Common Applicable Fraction multiplied by the number of shares of Throw
Common Stock into which each share of Throw A Preferred is convertible.
(iv) Adjustment to Excite Purchase Price and Conversion of
Throw Convertible Debt and Throw Consultant Debt. Throw is obligated to use its
reasonable efforts to obtain the written consent from the holders of all
outstanding Throw Convertible Debt, as specifically set forth in Exhibit 4.18
attached hereto to the conversion of their Throw Convertible Debt to Excite
Common Stock at the Effective Time. To the extent that any Throw Convertible
Debt remains unconverted at the Effective Time because the holder declines to
convert such debt as requested by Throw, Excite agrees to assume the obligation
of paying such unconverted Throw Convertible Debt, in accordance with the terms
thereof. To the extent that any holder of Throw Convertible Debt elects in
writing to convert the total Throw Convertible Debt held by such holder into
Excite Common Stock at the rate of the Per Share Market Value, then such holder
shall surrender the original promissory note(s), security agreement(s) and all
other related documentation to Excite at the Closing for cancellation and Excite
shall deliver, at or shortly after the Closing, to the holder a stock
certificate evidencing the correct number of whole shares of Excite Common Stock
into which the Throw Convertible Debt converted. Any attempt to make an election
to convert the debt after the Effective Time shall be invalid and will not be
honored by Excite. The Throw Consultant Debt will be converted into Excite
Common Stock at the Effective Time. Any fractional shares shall be handled in
accordance with Section 1.2 hereof.
2
3
1.1.2 Throw Options. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding options to
purchase shares of Throw Common Stock and each holder of a Throw Option granted
(a) under the Throw Inc. 1996 Stock Option Plan (the "Throw Option Plan") or (b)
outside of the Throw Option Plan, shall be entitled, in accordance with the
existing terms of such Throw Option, to purchase after the Effective Time that
number of shares of Excite Common Stock determined by multiplying the aggregate
number of shares of Throw Common Stock subject to such Throw Option at the
Effective Time by the Common Applicable Fraction, and the exercise price per
share for each such assumed option (the "Assumed Option") will equal the
exercise price per share of the Throw Option immediately prior to the Effective
Time divided by the Common Applicable Fraction. If the foregoing calculation
results in an Assumed Option (a) being exercisable for a fraction of a share of
Excite Common Stock, then the number of shares of Excite Common Stock subject to
such Assumed Option will be rounded down to the nearest whole number with no
cash being payable for such fractional share, or (b) being exercisable for a per
share exercise price that includes a fraction of a cent, the exercise price
shall be rounded down to the nearest whole cent. The term, exercisability,
vesting schedule, status as an "incentive stock option" under Section 422A of
the Code, if applicable, and all other terms of the Assumed Options will
otherwise be unchanged. The continuous term of employment with Throw will be
credited to each holder of an Assumed Option as if it were employment with
Excite for purposes of determining the vesting and the number of shares subject
to exercise after the Effective Time. Promptly following the Effective Time,
Excite will issue to each holder of an Assumed Option a document evidencing the
foregoing assumption by Excite. Attached hereto as Exhibit 1.1.2 is list of all
holders of Throw Options and the number of options held by each. To the extent
required by, and subject to the provisions of, such Throw Option Plan, Excite
shall comply with the terms of the Throw Option Plan and use its reasonable best
efforts to preserve the incentive stock option status after the Effective Time
of the Assumed Options which qualified as incentive stock options prior to the
Effective Time.
1.1.3 Throw Warrants. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding warrants to
purchase shares of Throw Capital Stock and each holder of a Throw Warrant (an
"Assumed Warrant") shall be entitled, in accordance with the existing terms of
such Throw Warrant, to purchase after the Effective Time that number of shares
of Excite Common Stock determined by multiplying the aggregate number of shares
of Throw Capital Stock subject to such Throw Warrant at the Effective Time by
the Common Applicable Fraction, and the exercise price per share for each such
assumed Warrant will equal the exercise price per share of the Throw Warrant
immediately prior to the Effective Time divided by the Common Applicable
Fraction. If the foregoing calculation results in an Assumed Warrant being
exercisable for a fraction of a share of Excite Common Stock, then the number of
shares of Excite Common Stock subject to such Assumed Warrant will be rounded
down to the nearest whole number with no cash being payable for such fractional
share. If the Assumed Warrant is exercisable for a per share exercise price that
includes a fraction of a cent, the exercise price shall be rounded down to the
nearest whole cent. The terms of the Throw Warrants will otherwise be unchanged.
1.1.4 Adjustments for Capital Changes. If prior to the Effective
Time, Excite recapitalizes through a split-up of its outstanding shares into a
greater number, or a combination of its outstanding shares into a lesser number,
reorganizes, reclassifies or otherwise changes its outstanding shares into the
same or a different number of shares of other classes (other than through a
split-up or combination of shares provided for in the previous clause), or
declares a dividend on its outstanding shares payable in shares or securities
convertible into shares, the
3
4
number of shares of Excite Common Stock into which the shares of Throw Capital
Stock, Options, Warrants, Throw Convertible Debt (that elects to convert into
Excite Common Stock at the Effective Time) and Throw Consultant Debt are to be
converted will be adjusted appropriately so as to maintain the proportionate
interests of the holders of the Throw Capital Stock, Options, Warrants, Throw
Convertible Debt that elects to convert into Excite Common Stock and Throw
Consultant Debt and the holders of Excite shares.
1.1.5 Dissenting Shares. Holders of shares of Throw Capital Stock
who have complied with all requirements for perfecting dissenter's rights, as
set forth in the Washington Business Corporation Act ("Washington Law"), shall
be entitled to their rights under the Washington Law with respect to such shares
("Dissenting Shares").
1.2 Fractional Shares. No fractional shares of Excite Common Stock will be
issued in connection with the Merger, but in lieu thereof, the holder of any
shares of Throw Capital Stock who would otherwise be entitled to receive a
fraction of a share of Excite Common Stock will receive from Excite, promptly
after the Effective Time, an amount of cash equal to (i) the Per Share Market
Value, as determined in Subsection 1.1.1(i) above, multiplied by (ii) the
fraction of a share to which such holder would otherwise be entitled.
1.3 Escrow Agreement. At the Closing of the Merger (as defined in Section
6.1 hereof), Excite will withhold that number of shares of Excite Common Stock
which equals ten percent (10%) of the sum of (i) the Total Excite Shares (as
defined in Section 1.1.1(i) hereof), (ii) any shares of Excite Common Stock
issued to holders of Throw Convertible Debt that elect to convert to Excite
Common Stock pursuant to Section 1.1.1(iv) hereof at the Effective Time, and
(iii) the Throw Consultant Debt (collectively the "Escrow Shares") which shares
would otherwise be issuable to certain principal shareholders of Throw
(including Xxxxx Xxxxxxxx, Xxxx Xxxxxxxxx and Xxxxx Xxxxx), who are holders of
five percent (5%) or more of the Throw Capital Stock at the Closing, which
calculation shall include all vested but unexercised Throw Options and currently
exercisable Throw Warrants (the "Principal Throw Holders"), on a pro rata basis,
as determined pursuant to this Section 1.3 (rounded down to the nearest whole
number of shares to be issued to each Principal Throw Holder) and deliver such
Escrow Shares to Chase Manhattan Bank and Trust Company, N.A. (the "Escrow
Agent"), as escrow agent, to be held by the Escrow Agent as collateral for the
Principal Throw Holders' obligations under Section 10.2 and pursuant to the
provisions of an escrow agreement (the "Escrow Agreement") in substantially the
form of Exhibit 1.3. The Escrow Shares will be represented by a certificate or
certificates issued in the name of the Throw Shareholders and delivered to the
Escrow Agent and will be held as collateral for Damages suffered by an
Indemnified Person (each as defined in Section 10.2) for breaches of the
representations, warranties and covenants of Throw contained in this Agreement.
The Escrow Shares will be delivered and will be held by the Escrow Agent from
the Closing until the earlier of (a) the date on which Excite releases to the
public its audited financial statements together with a report thereon from
Excite's independent auditors covering the results of Excite's first fiscal year
ending after the Closing Date (i.e., the year ending December 31, 1998), for
items expected to be encountered in the audit process, provided that Excite
shall have a reasonable period of time, not to exceed ninety (90) days from the
end of its fiscal year, to review the audit results to determine if any claim
for Damages exists under Section 10.2 and Excite shall provide notice of any
claim for Damages within ninety (90) day period, and (b) twelve (12) months
after the Closing Date for all other items (the "Escrow Period"). However, in
all cases as to matters which an Indemnified Person has given written notice of
a claim for Damages during the Escrow Period, such period with respect thereto
shall continue until such claim for Damages is finally
4
5
resolved and the Principal Throw Holder's indemnification obligations under
Section 10.2 hereof with respect thereto are fully satisfied.
In the event that the Merger is approved by the Throw Shareholders,
as provided herein, the Principal Throw Holders shall, without any further act
of any Principal Throw Holder, be deemed to have consented to and approved (i)
the use of the Escrow Shares as collateral for the Principal Throw Holder's
indemnification obligations under Section 10.2 in the manner set forth in the
Escrow Agreement, (ii) the appointment of Xxxxx Xxxxx as the representative of
the Principal Throw Holders (the "Representative") under the Escrow Agreement
and as the attorney-in-fact and agent for and on behalf of each Principal Throw
Holder (other than holders of Dissenting Shares), and the taking by the
Representative of any and all actions and the making of any decisions required
or permitted to be taken by the Representative under the Escrow Agreement
(including, without limitation, the exercise of the power to: (a) authorize
delivery to Excite of Escrow Shares in satisfaction of claims by Excite; (b)
agree to, negotiate, enter into settlements and compromises of and demand
arbitration and comply with orders of courts and awards of arbitrators with
respect to such claims; (c) resolve any claim made by Indemnified Persons
pursuant to Section 10.2; and (d) take all actions necessary in the judgment of
the Representative for the accomplishment of the foregoing) and (iii) to all of
the other terms, conditions and limitations in the Escrow Agreement.
1.4 Effects of the Merger. At the Effective Time: (a) the separate
existence of Sub will cease and Sub will be merged with and into Throw, and
Throw will be the surviving corporation, pursuant to the terms of the Agreement
of Merger, (b) the Certificate of Incorporation and Bylaws of Throw will be
amended and restated to be the same as the Certificate of Incorporation and
Bylaws of Sub; provided, however, that the corporate name of Throw will not
change, (c) the Board of Directors and officers of Excite will remain unchanged,
(d) all the directors of Throw immediately prior to the Effective Time will
resign and the directors of the Sub shall automatically become the directors of
the surviving corporation and the officers of Throw immediately prior to the
Effective Time will resign and the officers of the Sub shall automatically
become the officers of the surviving corporation, (e) each share of Throw
Capital Stock outstanding immediately prior to the Effective Time, the Throw
Convertible Debt that elects to convert into Excite Common Stock at the
Effective Time and the Throw Consultant Debt will be converted into Excite
Common Stock, and each Throw Option and Throw Warrant outstanding immediately
prior to the Effective Time will be assumed by Excite, each as provided in
Sections 1.1 and 1.2, (f) Excite, which held all the outstanding shares of the
Sub prior to the Effective Time will instead hold all the outstanding shares of
Throw and (g) the Merger will, from and after the Effective Time, have all of
the effects provided by applicable law.
1.5 S-3 Registration Rights and Registration on Form S-8.
1.5.1 S-3 Registration Rights. Effective upon the Effective Time,
each Throw Shareholder who receives shares of Excite Common Stock in the Merger
pursuant to Section 1.1 hereof, including shares issued to holders of Throw
Convertible Debt that elect to convert into Excite Common Stock at the Effective
Time, to the holder of Throw Consultant Debt, and pursuant to the exercise of
Assumed Warrants shall be granted Form S-3 registration rights (other than
pursuant to the assumption of Assumed Options, which shall be covered by a Form
S-8 pursuant to Section 1.5.2 hereof) under the Securities Act of 1933, as
amended (the "1933 Act") on the terms and subject to the conditions and
limitations of the Registration Rights Agreement attached hereto as Exhibit
1.5.1A (the "Registration Rights Agreement"). Within ninety (90) days of the
Closing, Excite will cause to be filed a Registration Statement on Form S-3
covering
5
6
the resale of all securities issued in the Merger, including shares issued
pursuant to the exercise of the Assumed Warrants, to holders of Throw
Convertible Debt that converted into Excite Common Stock at the Effective Time
and to the holder of Throw Consultant Debt (other than Assumed Options which
shall be covered by the Form S-8, pursuant to Section 1.5.2 hereof). Excite will
use its best efforts to cause the Registration Statement to become effective
promptly after filing and shall keep such Registration Statement effective until
such time as each recipient of Excite Common Stock is eligible to sell all of
the Excite Common Stock held by each such recipient (other than those covered by
the Form S-8) in a three (3) month period pursuant to the resale restrictions
provided for in Rule 144 under the 1933 Act. Each Throw Shareholder shall agree
that the Excite Common Stock issued to him (the "Lock-up Shares"), to the extent
requested by Excite or an underwriter of securities of Excite, be subject, on a
pro rata basis, to the lock-up provisions included in the Registration Rights
Agreement in the event Excite initiates an underwritten offering of at least
twenty million dollars ($20,000,000.00) of newly issued shares of Excite Common
Stock with nationally recognized managing underwriters while the S-3
Registration Statement is effective; provided, however, the lock-up provisions
shall not apply to the Lock-up Shares that, prior to the time of the
underwritten offering, have been sold to the public. In order to enforce the
foregoing covenants, Excite shall have the right to place restrictive legends on
the certificates of the Excite Common Stock issued in the Merger, indicating
that the shares are subject to the provisions of the Registration Rights
Agreement until the sale of such shares.
1.5.2 Registration on Form S-8. In addition, Excite shall use its
best efforts to cause the shares of Excite Common Stock that are issuable upon
exercise of the Assumed Options to be registered under the Securities Act on
Form S-8 ("Form S-8") within thirty (30) days of the Closing of the Merger.
Throw will reasonably cooperate with Excite in the preparation of the Form S-8.
1.6 Qualify as a Tax-Free Reorganization. The parties intend to adopt this
Agreement as a plan of reorganization and to consummate the Merger in accordance
with the provisions of Section 368(a)(1)(A) of the Code. The parties believe
that the total value of the Excite Common Stock to be received in the Merger by
the Throw Shareholders is equal, in each instance, to the total value of the
Throw Capital Stock to be surrendered in exchange therefor. The Excite Common
Stock issued in the Merger will be issued solely in exchange for Throw Capital
Stock, Throw Options, Throw Warrants, Throw Convertible Debt that elects to
convert into Excite Common Stock at the Effective Time and Throw Consultant
Debt, respectively, and no other transaction other than the Merger represents,
provides for or is intended to be an adjustment to the consideration paid for
the Throw Capital Stock, Throw Options, Throw Warrants, Throw Convertible Debt
that elects to convert into Excite Common Stock at the Effective Time and Throw
Consultant Debt. Except for cash paid in lieu of fractional shares or for
Dissenting Shares, no consideration that could constitute "other property"
within the meaning of Section 356 of the Code is being paid by Excite for the
Throw Capital Stock in the Merger. The parties shall not take a position on any
tax returns inconsistent with this Section 1.6 unless required to do so by
applicable tax laws pursuant to a determination as defined in Section 1313(c) of
the Code. In addition, Excite represents now, and as of the Closing Date, that
it presently intends to cause Throw to continue Throw's historic business or use
a significant portion of Throw's business assets in a business and that it has
no current plan or intention to (a) liquidate Throw, to merge Throw with and
into another corporation, to sell or otherwise dispose of the stock of Throw or
to cause Throw to sell or otherwise dispose of any of its assets, except for
dispositions made in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the Code, (b) reacquire any of its stock issued in the
Merger or (c) cause Throw to issue additional shares of
6
7
Throw Capital Stock that would result in Excite losing control of Throw within
the meaning of Section 368(c)(1) of the Code. At the Closing, the Chief
Financial Officer of Excite and the Chief Executive Officer of Throw shall each
execute and deliver tax certificates in the forms of Exhibits 1.6A-B, together
with an acknowledgment that such certificates will be relied upon by Throw and
Excite in determining whether the Merger constitutes a reorganization under
Section 368(a) of the Code. The provisions and representations contained or
referred to in this Section 1.6 shall survive until the expiration of the
applicable statute of limitations.
2. REPRESENTATIONS AND WARRANTIES OF THROW AND PRINCIPAL
Throw and the Principal, jointly and severally, hereby represent and
warrant as follows, except as set forth in the Throw Schedule of Exceptions (in
numbered paragraphs that correspond to the Section numbers below) simultaneously
delivered to Excite with the execution of this Agreement, as Exhibit 2.0:
2.1 Organization and Good Standing. Throw is a corporation duly organized,
validly existing and in good standing under the law of the State of Washington,
has the corporate power and authority to own, operate and lease its properties
and to carry on its business as now conducted and as proposed to be conducted,
and is qualified as a foreign corporation in each jurisdiction in which a
failure to be so qualified could reasonably be expected to have a material
adverse effect on its present operations or financial condition.
2.2 Power, Authorization and Validity.
2.2.1 Throw has the right, power, legal capacity and authority to
enter into and, subject to Throw Shareholder approval, perform its obligations
under this Agreement and all agreements to which Throw is or will be a party
that are required to be executed pursuant to this Agreement (the "Throw
Ancillary Agreements"). The execution, delivery and performance of this
Agreement and the Throw Ancillary Agreements have been duly and validly approved
and authorized by Throw's Board of Directors.
2.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Throw to enter into, and to perform its
obligations under, this Agreement and the Throw Ancillary Agreements, except for
(a) the filing of the Articles of Merger with the Washington Secretary of State,
and the filing of appropriate documents with the relevant authorities of other
states in which Throw is qualified to do business, if any, (b) such filings as
may be required to comply with federal and state securities laws, (c) consents
required under contracts disclosed in Exhibit 2.11 and (d) the approval of the
Throw Shareholders of the transactions contemplated hereby, as provided under
applicable law and Throw's Articles of Incorporation and Bylaws.
2.2.3 This Agreement and the Throw Ancillary Agreements are, or when
executed by Throw will be, valid and binding obligations of Throw enforceable in
accordance with their respective terms, except as to the effect, if any, of (a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally, (b) rules of law governing specific performance, injunctive relief
and other equitable remedies and (c) the enforceability of provisions requiring
indemnification or contribution in connection with the offering, issuance or
sale of securities; provided, however, that the Articles of Merger will not be
effective until filed with the Washington Secretary of State.
7
8
2.3 Capitalization. The authorized capital stock of Throw consists of ten
million (10,000,000) shares of Common Stock and five million (5,000,000) shares
of Preferred Stock. Of the Throw Preferred Stock, one hundred sixty thousand
(160,000) shares are designated as Series A Preferred Stock. As of March 31,
1998, seven hundred fifty-nine thousand, three hundred sixty-one (759,361)
shares of Throw Common and one hundred forty-four thousand five hundred
(144,500) shares of Throw Series A Preferred are issued and outstanding. An
aggregate of nine hundred fifty thousand (950,000) shares of Throw Common are
reserved and authorized for issuance pursuant to the Throw Option Plan, of which
options to purchase nine hundred fifty thousand (950,000) shares of Throw Common
Stock have been granted and options to purchase a total of seven hundred ninety
thousand six hundred thirty-nine (790,639) shares of Common Stock are
outstanding thereunder. Warrants to purchase two hundred twelve thousand seven
hundred fifty (212,750) shares of Throw Common Stock are issued and outstanding.
All issued and outstanding shares of Throw Capital Stock have been duly
authorized and validly issued, are fully paid and non assessable, are not
subject to any right of rescission, and have been offered, issued, sold and
delivered by Throw in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of applicable federal and
state securities laws. A list of all holders of Throw Common Stock, Throw
Preferred Stock, Throw Options and Throw Warrants and the number of shares,
options and warrants held by each has been delivered by Throw to Excite herewith
as Exhibit 2.3. Except as set forth in this Section 2.3 and in Exhibit 2.3,
there are no options, warrants, calls, commitments, conversion privileges or
preemptive or other rights or agreements outstanding to purchase any of Throw's
authorized but unissued capital stock or any securities convertible into or
exchangeable for shares of Throw Capital Stock or obligating Throw to grant,
extend, or enter into any such option, warrant, call, right, commitment,
conversion privilege or other right or agreement, and there is no liability for
dividends accrued but unpaid. Except as indicated in the Throw Schedule of
Exceptions, there are no voting agreements, rights of first refusal or other
restrictions (other than normal restrictions on transfer under applicable
federal and state securities laws) applicable to any of Throw's outstanding
securities. Except as indicated in the Throw Schedule of Exceptions, Throw is
not under any obligation to register under the Securities Act any of its
presently outstanding securities or any securities that may be subsequently
issued. None of the Throw Options or other issuances of securities under the
Throw Option Plan or outside the Throw Option Plan are subject to acceleration
or automatic vesting as a result of the Merger except as specifically provided
for in the Throw Option Plan.
2.4 Subsidiaries. Throw does not have any subsidiaries or any ownership
interest, direct or indirect, in any corporation, partnership, joint venture or
other business entity.
2.5 No Violation of Existing Agreements. Neither the execution and
delivery by Throw of this Agreement nor of any Throw Ancillary Agreement, nor
the consummation by Throw of the transactions contemplated hereby or thereby,
will conflict with, or (with or without notice or lapse of time, or both) result
in a termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Bylaws of Throw, as currently in effect, (b) in any
material respect, any Material Agreement (as defined in Section 2.11) to which
Throw is a party or by which Throw is bound, or (c) any federal, state, local or
foreign judgment, writ, decree, order, statute, rule or regulation applicable to
Throw or its assets or properties, except, in each case, where such conflict,
termination, breach, impairment or violation would not have a material adverse
effect on Throw's present operations or financial condition.
2.6 Litigation. There is no action, proceeding, claim or investigation
pending against Throw before any court or administrative agency that if
determined adversely to Throw may
8
9
reasonably be expected to have a material adverse effect on the present or
future operations or financial condition of Throw or to prevent Throw from
fulfilling its obligations under this Agreement; nor to Throw's and the
Principal's knowledge has any such action, proceeding, claim or investigation
been threatened. There is, to Throw's and the Principal's knowledge, no
reasonable basis for any shareholder or former shareholder of Throw, or any
other person, firm, corporation, or entity, to assert a claim against Throw or
Excite based upon: (a) ownership or rights to ownership of any shares of Throw
Capital Stock (except for dissenter's rights with respect to shares of Excite
Common Stock issuable by virtue of the Merger), (b) any rights as an Throw
Shareholder, including any option or preemptive rights or rights to notice or to
vote, or (c) any rights under any agreement among Throw and the Throw
Shareholders.
2.7 Taxes. Throw has timely filed all federal, state, local and foreign
tax returns, estimates, information statements and reports required to be filed
by or on behalf of Throw and its operations (collectively, "Returns"), has
timely paid all taxes shown due on all Returns which have been filed, has
established an adequate accrual or reserve for the payment of all taxes, due and
payable, including reasonable accruals for taxes payable in respect of the
periods subsequent to the periods covered by the most recent applicable Returns,
has made all necessary estimated tax payments, and has no material liability for
taxes in excess of the amounts so paid or accruals or reserves so established.
Throw is not delinquent in the payment of any tax nor delinquent in the filing
of any Returns, and no deficiencies for any tax have been threatened, claimed,
proposed, or assessed by any taxing authority. Throw has not executed any waiver
of any statute of limitations on or extending the period for the assessment or
collection of any tax which waiver or extension is still in effect. Throw has
not received any notification that any material issues have been raised (and are
currently pending) by the Internal Revenue Service or any other taxing authority
(including but not limited to any sales tax authority) regarding Throw. No tax
return of Throw has ever been audited by the Internal Revenue Service or any
state taxing agency or authority. Throw has made available to Excite copies of
all federal and state income and all state sales and use Returns for all periods
since the date of Throw's incorporation. There are no liens, pledges, charges,
claims, security interests or other encumbrances of any sort on the assets of
Throw relating to or attributable to taxes, other than liens for taxes not yet
due and payable. There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of Throw that, individually or collectively, could give rise to
the payment of any amount that would be disallowed pursuant to Section 280G or
162(m) of the Code. Throw is not a party to a tax sharing or allocation
agreement nor does Throw owe any amount under any such agreement. Throw is not,
and has not been at any time, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. Throw has not
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by Throw. None of Throw's
assets are treated as "tax-exempt use property" within the meaning of Section
168(h) of the Code. For the purposes of this Agreement, the terms "tax" and
"taxes" include all federal, state, local and foreign income, gains, franchise,
excise, property, sales, use, employment, license, payroll, occupation,
recording, value added or transfer taxes, governmental charges, fees, levies or
assessments (whether payable directly or by withholding), and, with respect to
such taxes, any estimated tax, interest and penalties or additions to tax and
interest on such penalties and additions to tax.
2.8 Throw Financial Statements. Throw has delivered to Excite as Exhibit
2.8 Throw's (a) unaudited balance sheet as of December 31, 1997 (the "1997
Balance Sheet") and income statement and statement of cash flows for the twelve
(12) month period then ended
9
10
(collectively, the "1997 Financial Statements"), and (b) unaudited balance sheet
as of February 28, 1998 (the "February 28 Balance Sheet") and income statement
for the three (3) month period then ended (collectively, the "February Financial
Statements") (the 1997 Financial Statements and February Financial Statements
are collectively referred to herein as the "Financial Statements"). The
Financial Statements are in accordance with the books and records of Throw and
fairly present the financial condition of Throw at the dates therein indicated
and the results of operations for the periods therein specified in all material
respects. The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as to footnotes, and, with respect to the 1997 Financial Statements, normal year
end or audit adjustments). Throw has no material debt, liability or obligation
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, that is not reflected or reserved against in the Financial
Statements which would be required under generally accepted accounting
principles to be reflected or reserved, except for those that may have been
incurred after the date of the Financial Statements in the ordinary course of
its business, consistent with past practice and that are not material in amount
either individually or collectively or in the course of entering into this
Agreement, such as attorneys' fees.
2.9 Title to Properties. Throw has good and marketable title to or a
leasehold or other rights to use all of its assets as shown on the February 28
Balance Sheet, free and clear of all liens, charges, restrictions or
encumbrances (other than for taxes not yet due and payable) in excess of twenty
five thousand dollars ($25,000) in the aggregate. All machinery and equipment
included in such properties is in good condition and repair, normal wear and
tear excepted, and all leases of real or personal property to which Throw is a
party are fully effective and afford Throw peaceful and undisturbed possession
of the subject matter of the lease. To Throw's knowledge, Throw is not in
violation of any zoning, building, safety or environmental ordinance, regulation
or requirement or other law or regulation applicable to the operation of owned
or leased properties (the violation of which would have a material adverse
effect on its business), and has not received any notice of such violation with
which it has not complied.
2.10 Absence of Certain Changes. Since February 28, 1998, there has not
been with respect to Throw:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations thereof which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has had or will have a material adverse effect on Throw's
business;
(b) any material contingent liability incurred thereby as guarantor
or otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of the material
properties of Throw other than in the ordinary course of business;
(d) any material obligation or liability incurred thereby other than
obligations and liabilities incurred in the ordinary course of business or in
connection with this Agreement;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
material properties or assets of Throw other than in the ordinary course of
business;
10
11
(f) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of Throw;
(g) any declaration, setting aside or payment of any dividend on, or
the making of any other distribution in respect of, the capital stock thereof,
any split, combination or recapitalization of the capital stock thereof or any
direct or indirect redemption, purchase or other acquisition of the capital
stock thereof;
(h) any labor dispute or claim of unfair labor practices, any change
in the compensation payable or to become payable to any of its officers,
employees or agents, or any bonus payment or arrangement made to or with any of
such officers, employees or agents;
(i) any change with respect to the management, supervisory or other
key personnel thereof;
(j) any payment or discharge of a material lien or liability thereof
which lien was not either shown on the 1997 Balance Sheet or incurred in the
ordinary course of business thereafter; or
(k) any material obligation or liability incurred thereby to any of
its officers, directors or shareholders or any loans or advances made thereby to
any of its officers, directors or shareholders except normal compensation and
expense allowances payable to officers, consultants and directors.
2.11 Material Agreements, Contracts and Commitments. Except as set forth
on Exhibit 2.11 delivered to Excite herewith, Throw is not a party or subject to
any oral or written contracts, obligations, commitments, plans, leases,
instruments, arrangements or licenses not entered into in the ordinary course of
business which is material to the business of Throw (each a "Material
Agreement"), including, but not limited to any:
(a) Contract providing for potential payments by or to Throw in
excess of One Hundred Thousand Dollars ($100,000.00) or more;
(b) Product distribution agreement, development agreement, or
license agreement as licensor or licensee (except for standard non-exclusive
software licenses granted to end-user customers in the ordinary course of
business the form of which has been provided to Excite's counsel or standard
licenses purchased by Throw for off-the-shelf software);
(c) Material agreement for the lease of real or personal property;
(d) Joint venture contract or arrangement or any other agreement
that involves a sharing of profits with other persons;
(e) Instrument evidencing or related in any way to indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, or otherwise, except for trade
indebtedness incurred in the ordinary course of business, and except as
disclosed in the Financial Statements;
(f) Contract containing covenants purporting to limit Throw's
freedom to compete in any line of business in any geographic area; or
(g) Stock redemption or purchase agreement yet to be performed.
11
12
To its knowledge, all Material Agreements listed in Exhibit 2.11
constitute valid and enforceable obligations of the parties thereto and are in
full force and effect. Throw is not, nor, to the knowledge of Throw and the
Principal, is any other party thereto, in breach or default in any material
respect under the terms of any such Material Agreement, which breach or default
may reasonably be expected to have a material adverse effect on Throw. A copy of
each agreement or document listed on Exhibit 2.11 has been delivered to Excite's
counsel. Throw is not a party to any contract or arrangement which has had or
could reasonably be expected to have a material adverse effect on its business
or prospects.
2.12 Intellectual Property. Throw owns, or has the rights to use, sell or
license all Intellectual Property Rights (as defined below) necessary or
required for the conduct of, or used in, its business as presently conducted and
as contemplated to be conducted (such Intellectual Property Rights being
hereinafter collectively referred to as the "Throw IP Rights") and such rights
to use, sell or license are reasonably sufficient for the conduct of its
business and as contemplated to be conducted. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Throw IP Right (the "Throw IP Rights Agreements"), will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any Throw IP Right or materially impair the right of Throw to
use, sell or license any Throw IP Right or portion thereof (except where such
breach, forfeiture or termination would not have a material adverse effect on
Throw, taken as a whole). There are no royalties, honoraria, fees or other
payments payable by Throw to any person by reason of the ownership, use,
license, sale or disposition of the Throw IP Rights (other than as set forth in
the Throw IP Rights Agreements listed in Exhibit 2.12). Neither the manufacture,
marketing, license, sale or intended use of any product currently licensed or
sold by Throw or currently under development by Throw violates any license or
agreement between Throw and any third party or to the knowledge of Throw or the
Principal infringes any Intellectual Property Right of any other party; and
there is no pending or, to the knowledge of Throw and the Principal, threatened
claim or litigation contesting the validity, ownership or right to use, sell,
license or dispose of any Throw IP Right; nor, to the knowledge of Throw and the
Principal is there any basis for any such claim; nor has Throw received any
notice asserting that any Throw IP Right or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor, to the knowledge of Throw and the Principal is there any reasonable
basis for any such assertion. Throw has taken reasonable and practicable steps
designed to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all material Throw IP Rights. Exhibit 2.12 contains a
list of all applications, registrations, filings and other formal actions made
or taken pursuant to federal, state and foreign laws by Throw to perfect or
protect its interest in Throw IP Rights, including, without limitation, all
issued patents, patent applications, registered copyrights, copyright
applications, registered trademarks, trademark applications, registered
tradenames, issued service marks, service xxxx applications and all Throw IP
Rights Agreements (except for object code end-user licenses granted to end-users
in the ordinary course of business that permit use of software products without
a right to modify, distribute or sublicense the same). Throw has disclosed all
information material to the applications, registrations and filings listed in
Exhibit 2.12 to the appropriate government agencies, and has properly complied
with all procedural requirements pertaining to the preparation and filing of
such applications, registrations, and filings. As used herein, the term
"Intellectual Property Rights" shall mean all industrial and intellectual
property rights in any jurisdiction in the world, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service xxxx applications, copyright, copyright
applications, moral rights, franchises, licenses, inventories, know-how, trade
secrets, customer lists, proprietary processes
12
13
and formulae, all source and object code, algorithms, architecture, structure,
display screens, layouts, inventions, development tools and all documentation
and media constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.
2.13 Compliance with Laws. Throw has complied, or prior to the Closing
Date will have complied, and is or will be at the Closing Date in full
compliance, in all material respects with all applicable laws, ordinances,
regulations, and rules, and all orders, writs, injunctions, awards, judgments,
and decrees applicable to it or to the assets, properties, and business thereof
(the violation of which would have a material adverse effect upon its business),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state, and local laws,
ordinances, regulations, and all orders, writs, injunctions, awards, judgments,
and decrees pertaining to (i) the sale, licensing, leasing, ownership, or
management of its owned, leased or licensed real or personal property, products
and technical data, (ii) employment and employment practices, terms and
conditions of employment, and wages and hours and (iii) safety, health, fire
prevention, environmental protection, toxic waste disposal, building standards,
zoning and other similar matters (c) the Export Administration Act and
regulations promulgated thereunder and all other laws, regulations, rules,
orders, writs, injunctions, judgments and decrees applicable to the export or
re-export of controlled commodities or technical data and (d) the Immigration
Reform and Control Act. Throw has received all permits and approvals from, and
has made all filings with, third parties, including government agencies and
authorities, that are necessary in connection with its present business and
which, if not received or filed, would have a material adverse effect on its
business, other than changes that affect the Internet Community as a whole and
not Throw exclusively; provided that Throw itself is not a party to any such
proceeding or investigation.
2.14 Certain Transactions and Agreements. To Throw's knowledge, none of
its officers or directors or the Principal, nor any member of their immediate
families, has any direct or indirect ownership interest in any firm or
corporation that competes with Throw (except with respect to any interest in
less than five percent (5%) of the stock of any corporation whose stock is
publicly traded). None of the officers, directors or the Principal, nor any
member of their immediate families, is directly or indirectly interested in any
contract or informal arrangement with Throw, except for normal compensation for
services as an officer, consultant, director or employee thereof and contracts
with respect to Throw Capital Stock, Throw Options, Throw Warrants, Throw
Convertible Debt or Throw Consultant Debt. None of said officers, directors or
the Principal, nor any member of their immediate families, has any interest in
any property, real or personal, tangible or intangible, including inventions,
patents, copyrights, trademarks or trade names or trade secrets, used in or
pertaining to the business of Throw, except for the normal rights of a
shareholder.
2.15. Employees, ERISA and Other Compliance.
2.15.1 Except as set forth in Exhibit 2.15.1, Throw has no
employment contracts or consulting agreements currently in effect that are not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions). All
current and former officers, employees and consultants of Throw having access to
proprietary information or in any way involved with the creation of Throw
Intellectual Property Rights have executed and delivered to Throw an agreement
regarding the protection of such proprietary information or Throw Intellectual
Property Rights and the assignment of inventions to Throw; copies of the form of
all such agreements have been delivered to Excite's counsel.
13
14
2.15.2 Throw (i) has not ever been nor is subject to a union
organizing effort, (ii) is not subject to any collective bargaining agreement
with respect to any of its employees, (iii) is not subject to any other
contract, written or oral, with any trade or labor union, employees' association
or similar organization, or (iv) has not any current labor disputes. Throw has
good labor relations and has no knowledge of any facts indicating that the
consummation of the transactions contemplated hereby will have a material
adverse effect on such labor relations and has no knowledge that any of its key
employees intends to leave its employ.
2.15.3 Exhibit 2.15.3 identifies each "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), currently or previously maintained, contributed to or
entered into by Throw under which Throw or any ERISA Affiliate (as defined
below) thereof has any present or future obligation or liability (collectively,
the "Throw Employee Plans"). For purposes of this Section 2.15.3, "ERISA
Affiliate" shall mean any entity which is a member of (A) a "controlled group of
corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under "common control," as defined in Section 414(c) of the Code, or (C) an
"affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes Throw. Except as set forth in Exhibit 2.15.3, copies of all Throw
Employee Plans (and, if applicable, related trust agreements) and all amendments
thereto and summary plan descriptions thereof (including summaries of material
modifications) have been delivered to Excite or its counsel, together with the
three most recent annual reports (Form 5500, including, if applicable, Schedule
B thereto), if such reports are required by ERISA, prepared in connection with
any such Throw Employee Plan. All Throw Employee Plans which individually or
collectively would constitute an "employee pension benefit plan," as defined in
Section 3(2) of ERISA (collectively, the "Throw Pension Plans"), are identified
as such in Exhibit 2.15.3. All contributions due from Throw prior to the Closing
Date with respect to any of the Throw Employee Plans have been or will be made
prior to such Closing Date or have otherwise been accrued on Throw's financial
statements as required by generally accepted accounting principles and all such
contributions have or will be made in accordance with ERISA. Each Throw Employee
Plan has been maintained substantially in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including, without limitation, ERISA and the Code, which are applicable to such
Throw Employee Plans.
2.15.4 No "prohibited transaction," as defined in Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any Throw
Employee Plan which is covered by Title I of ERISA which would result in a
material liability to Throw taken as a whole, excluding transactions effected
pursuant to (or covered by) a statutory, regulatory or administrative exemption.
Neither Throw nor any of its officers or directors have engaged in any
transaction or acted or failed to act in any manner that violates the fiduciary
requirements of ERISA with respect to any Throw Employee Plan and that would
subject Throw or any of its officers or directors to a material liability. No
event or omission has occurred in connection with any Throw Employee Plan that
would make Throw or any of its officers or directors liable for any material tax
(as defined in Section 2.7) or material penalty pursuant to Sections 4972, 4975,
4976 or 4979 of the Code or Section 502 of ERISA.
2.15.5 Except as set forth in Exhibit 2.15.5, any Throw Pension Plan
which is intended to be qualified under Section 401(a) of the Code has received
a favorable determination from the Internal Revenue Service that the Plan
document for such Throw Pension Plan satisfies the requirements for
qualification, and Throw is not aware of any reason why such determination
14
15
may not be relied upon by such plan (other than changes in the law resulting
from the Small Business Job Protection Act of 1996 and the Taxpayers Relief Act
of 1997).
2.15.6 Exhibit 2.15.6 lists each employment, severance or other
similar contract, arrangement or policy and each plan or arrangement (written or
oral) providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which (A) is not an Throw Employee Plan, (B)
is entered into, maintained or contributed to, as the case may be, by Throw and
(C) covers any employee or former employee of Throw. Such contracts, plans and
arrangements as are described in this Section 2.15.6 are herein referred to
collectively as the "Throw Benefit Arrangements." Each Throw Benefit Arrangement
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
which are applicable to such Throw Benefit Arrangement. Throw has delivered to
Excite or its counsel a complete and correct copy or description of each Throw
Benefit Arrangement.
2.15.7 Except as set forth in Exhibit 2.15.7, there has been no
amendment to, or written interpretation or announcement (whether or not written)
by Throw relating to, or material change in employee participation or coverage
under, any Throw Employee Plan or Throw Benefit Arrangement that would increase
materially the expense of maintaining such Throw Employee Plan or Throw Benefit
Arrangement above the level of the expense incurred in respect thereof for the
fiscal year ended December 31, 1997.
2.15.8 Throw (or its designee) has timely provided to individuals
entitled thereto all required notices and coverage pursuant to Section 4980B of
the Code and the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), with respect to any "qualifying event" (as defined in Section
4980B(f)(3) of the Code) under any Throw Employee Plan occurring prior to and
including the Closing Date, except where the failure to do so would not result
in a material liability to Throw and no material Tax payable on account of
Section 4980B of the Code has been incurred with respect to any current or
former employees (or their beneficiaries) of Throw.
2.15.9 No benefit payable or which may become payable by Throw due
to the consummation of the transactions contemplated by this Agreement or
pursuant to any Throw Employee Plan or any Throw Benefit Arrangement shall
constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of
the Code) which is subject to the imposition of a material excise Tax under
Section 4999 of the Code or which would not be deductible by reason of Section
280G of the Code.
2.15.10 Throw is in compliance in all material respects with all
applicable laws, agreements and contracts relating to employment, employment
practices, wages, hours, and terms and conditions of employment, including, but
not limited to, employee compensation matters, but not including ERISA.
2.15.11 To Throw's knowledge, no employee of Throw is in violation
of any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any other contract or agreement, or any restrictive
covenant relating to the right of any such
15
16
employee to be employed thereby, or to use trade secrets or proprietary
information of others, and the employment of such employees by Throw does not
subject Throw to any liability.
2.15.12 A list of all employees, officers and consultants of Throw
and their current compensation has been delivered to Excite and attached hereto
as Exhibit 2.15.12.
2.15.13 Except for the agreements described in Section 1.1.2 hereof,
Throw is not a party to any (a) agreement with any executive officer or other
key employee thereof (i) the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Throw in the nature of any of the transactions contemplated by this Agreement
and the Agreement of Merger, (ii) providing any term of employment or
compensation guarantee, or (iii) providing severance benefits or other benefits
after the termination of employment of such employee regardless of the reason
for such termination of employment, or (b) agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights plan or stock
purchase plan, any of the benefits of which will be materially increased, or the
vesting of benefits of which will be materially accelerated, by the occurrence
of any of the transactions contemplated by this Agreement and the Agreement of
Merger or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement and the
Agreement of Merger.
2.16 Corporate Documents. Throw has made available to Excite for
examination all documents and information listed in the Throw Schedule of
Exceptions or other Exhibits called for by this Agreement or which have been
requested by Excite's legal counsel, including, without limitation, the
following: (a) copies of Throw's Articles of Incorporation and Bylaws as
currently in effect; (b) its Minute Book containing all records of all
proceedings, consents, actions, and meetings of the shareholders, the board of
directors and any committees thereof; (c) its stock ledger and journal
reflecting all stock issuances and transfers; and (d) all permits, orders, and
consents issued by any regulatory agency with respect to Throw, or any
securities of Throw, and all applications for such permits, orders, and
consents.
2.17 No Brokers. Except as set forth in Exhibit 2.17, neither Throw nor
the Principal are obligated for the payment of fees or expenses of any
investment banker, broker or finder in connection with the origin, negotiation
or execution of this Agreement or the Throw Ancillary Agreements or in
connection with any transaction contemplated hereby or thereby.
2.18 Disclosure. Neither this Agreement, its exhibits and schedules, nor
any of the certificates or documents to be delivered by Throw to Excite under
this Agreement, when taken together, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not materially misleading. To the knowledge of
Throw and the Principal, there are no undisclosed liabilities that would have a
material effect on the present or future operations or financial condition of
Throw or that would prevent Throw from fulfilling its obligations under this
Agreement.
2.19 Information Supplied. None of the information supplied or to be
supplied by Throw to the Throw Shareholders in connection with any written
consent by Throw Shareholders (collectively, "Shareholder Materials"), at the
date such information was supplied prior to the time the Throw Shareholders were
requested to execute a written consent to approve the Merger, contained or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not materially misleading; provided,
16
17
however, that Throw makes no representations or warranties regarding information
furnished by or related to Excite.
2.20 Insurance. Throw maintains fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance which it believes to be reasonably prudent for similarly sized and
similarly situated businesses.
2.21 Environmental Matters.
2.21.1 During the period that Throw has leased or owned its
properties or owned or operated any facilities, there have been no disposals,
releases or threatened releases of Hazardous Materials (as defined below) by
Throw, or to Throw's or the Principal's knowledge, by others, on, from or under
such properties or facilities, the liability for which would have a material
adverse effect on Throw's business. Throw has no knowledge of any presence,
disposals, releases or threatened releases of Hazardous Materials on, from or
under any of such properties or facilities, which may have occurred prior to
Throw having taken possession of any of such properties or facilities. For the
purposes of this Agreement, the terms "disposal," "release," and "threatened
release" shall have the definitions assigned thereto by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA"). For the purposes of this Agreement
"Hazardous Materials" shall mean any hazardous or toxic substance, material or
waste which is or becomes prior to the Closing regulated under, or defined as a
"hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous
materials," "toxic substance" or "hazardous chemical" under (1) CERCLA; (2) any
similar federal, state or local law; or (3) regulations promulgated under any of
the above laws or statutes.
2.21.2 To the knowledge of Throw and the Principal, none of the
properties or facilities of Throw is in material violation of any federal, state
or local law, ordinance, regulation or order relating to industrial hygiene or
to the environmental conditions on, under or about such properties or
facilities, including, but not limited to, soil and ground water condition.
During the time that Throw has owned or leased its properties and facilities,
neither Throw nor, to Throw's and the Principal's knowledge, any third party,
has used, generated, manufactured or stored on, under or about such properties
or facilities or transported to or from such properties or facilities any
Hazardous Materials except in substantial accordance with applicable
environmental laws.
2.21.3 During the time that Throw has owned or leased its respective
properties and facilities, there has been no litigation brought or, to its
knowledge threatened, against Throw by, or any settlement reached by Throw with,
any party or parties alleging the presence, disposal, release or threatened
release of any Hazardous Materials on, from or under any of such properties or
facilities.
2.22 Interested Party Transactions. No officer or director of Throw or any
"affiliate" or "associate" (as those terms are defined in Rule 405 promulgated
under the Securities Act) of any such person has had, either directly or
indirectly, a material interest in: (i) any person or entity which purchases
from or sells, licenses or furnishes to Throw any goods, property, technology or
intellectual or other property rights or services; or (ii) any contract or
agreement to which Throw is a party or by which it may be bound or affected.
2.23 Tax-Free Treatment. To the knowledge of Throw, the Principal, and
Throw's affiliates, there are no situations that would prevent the treatment of
the Merger as a tax-free transaction under Section 368(a) of the Code.
17
18
3. REPRESENTATIONS AND WARRANTIES OF EXCITE AND SUB
Excite and Sub hereby jointly and severally represent and warrant as
follows, that, except as set forth on the Excite Schedule of Exceptions
delivered to Throw as Exhibit 3.0:
3.1 Organization and Good Standing.
3.1.1 Excite is a corporation duly organized, validly existing and
in good standing under the laws of the State of California, and has the
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified as a foreign corporation in each jurisdiction in which a failure to be
so qualified could reasonably be expected to have a material adverse effect on
its present operations or financial condition.
3.1.2 Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified as a
foreign corporation in each jurisdiction in which a failure to be so qualified
could reasonably be expected to have a material adverse effect on its present
operations or financial condition.
3.2 Power, Authorization and Validity.
3.2.1 Excite and Sub have the right, power, legal capacity and
authority to enter into and perform their obligations under this Agreement, and
all agreements to which Excite or Sub is or will be a party that are required to
be executed pursuant to this Agreement (the "Excite Ancillary Agreements"). The
execution, delivery and performance of this Agreement and the Excite Ancillary
Agreements have been duly and validly approved and authorized by Excite's Board
of Directors and Sub's Board of Directors and sole shareholder.
3.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Excite or Sub to enter into, and to perform
its obligations under, this Agreement and the Excite Ancillary Agreements,
except for (a) the filing of the Agreement of Merger with the Delaware Secretary
of State, the filing of appropriate documents with the relevant authorities of
other states in which Excite and Sub are qualified to do business, if any; and
(b) such filings as may be required to comply with federal and state securities
laws.
3.2.3 This Agreement and the Excite Ancillary Agreements are, or
when executed by Excite and/or Sub (as applicable) will be, valid and binding
obligations of Excite and Sub enforceable in accordance with their respective
terms, except as to the effect, if any, of (a) applicable bankruptcy and other
similar laws affecting the rights of creditors generally, (b) rules of law
governing specific performance, injunctive relief and other equitable remedies
and (c) the enforceability of provisions requiring indemnification or
contribution in connection with the offering, issuance or sale of securities;
provided, however, that the Agreement of Merger will not be effective until
filed with the Delaware Secretary of State.
3.2.4 Due Authorization. The Excite Common Stock to be issued in the
Merger to Throw Shareholders, Throw Option Holders, Throw Warrant Holders, Throw
Convertible Debt Holders that elected to convert their debt into Excite Common
Stock at the Effective Time and the Throw Consultant Debt Holder, when issued by
Excite pursuant to the terms and subject to any restrictions of this Agreement,
will be duly authorized, validly issued, fully paid and non-
18
19
assessable, will be issued in compliance with applicable federal and state
securities laws and will be free and clear of all liens, encumbrances and
adverse claims and, except as provided in the Throw Affiliates Agreement (as
defined in Section 4.11 hereof) and the Registration Rights Agreement (as
defined in Section 1.5.1 hereof), may be resold by Throw affiliates in
accordance with Rule 145 of the Securities Act and may be freely resold, without
restriction, by non-affiliates of Throw.
3.3 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement nor any Excite Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Certificate of Incorporation of Excite or Sub,
respectively, or the Bylaws of Excite or Sub, all as currently in effect, (b) in
any material respect, any material instrument or contract to which Excite or Sub
is a party or by which Excite or Sub is bound, or (c) any federal, state, local
or foreign judgment, writ, decree, order, statute, rule or regulation applicable
to Excite or Sub or their assets or properties. Excite is not currently in
material violation of any agreement material to its business.
3.4 Disclosure. Excite has made available to Throw an investor disclosure
package consisting of true and complete copies of (a) all Forms 10-Q, 10-K and
8-K filed by Excite with the Securities and Exchange Commission (the "SEC")
since its Initial Public Offering on April 10, 1996 (the "IPO") and up to the
date of this Agreement, (b) any registration statement and amendments thereto
filed with the SEC by Excite in the twelve (12) month period prior to execution
of this Agreement, and (c) all proxy materials distributed to Excite's
shareholders since the IPO and up to the date of this Agreement (collectively,
the "SEC Reports"). The SEC Reports (i) at the time filed, complied in all
material respects with applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) do not, when taken as a whole as of
the date of this Agreement, contain any untrue statement of a material fact or
fail to state a material fact required to be stated in such SEC Reports or
necessary in order to make the statements in such SEC Reports, in light of the
circumstances under which they were made, not misleading. Each of the
consolidated financial statements (including, in each case, any related notes)
contained in the SEC Reports, including any SEC Reports filed after the date of
this Agreement until the Closing, complied or will comply as to form in all
material respect with the applicable published rules and regulations of the SEC
with respect thereto, was prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
and fairly presented the consolidated financial position of Excite as of the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
3.5 Absence of Certain Changes. Since the December 31, 1997 financial
statements included in the SEC Reports, there has not been any change in the
financial condition, properties, assets, liabilities, business or operations of
Excite which change by itself or in conjunction with all other such changes,
whether or not arising in the ordinary course of business, has had or will have
a material adverse effect thereon except as disclosed in the SEC Reports.
3.6 Compliance with Laws. Excite and Sub have complied, or prior to the
Closing Date will have complied, and are or will be at the Closing Date in full
compliance, in all material
19
20
respects with all applicable laws, ordinances, regulations, and rules, and all
orders, writs, injunctions, awards, judgments, and decrees applicable to them,
the violation of which would have a material adverse effect upon their business.
Excite and Sub have received all permits and approvals from, and have made all
filings with, third parties, including government agencies and authorities, that
are necessary in connection with their present business. To Excite's and Sub's
knowledge, there are no legal or administrative proceedings or investigations
pending or threatened, that, if enacted or determined adversely to them, would
result in any material adverse change in the present or future operations or
financial condition thereof, other than changes that affect the Internet
Community as a whole and not Excite or Sub exclusively; provided that neither
Excite nor Sub is a party to any such proceeding or investigation.
3.7 Information Supplied. None of the information supplied or to be
supplied by Excite for distribution to Throw Shareholders in connection with any
Throw Shareholder vote, including the SEC Reports, at the date such information
was supplied prior to the time Throw Shareholders were requested to execute a
written consent to approve the Merger, contained or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not materially
misleading; provided, however, that Excite makes no representations or
warranties regarding information furnished by or related to Throw.
3.8 No Brokers. Excite and Sub are not obligated for the payment of fees
or expenses of any investment banker, broker or finder in connection with the
origin, negotiation or execution of this Agreement or the Excite Ancillary
Agreements or in connection with any transaction contemplated hereby or thereby.
3.9 Litigation. There is no action, proceeding, claim or investigation
pending against Excite before any court or administrative agency that if
determined adversely to Excite may reasonably be expected to have a material
adverse effect on the present or future operations or financial conditions of
Excite or Sub, or to prevent Excite or Sub from fulfilling its respective
obligations under this Agreement; nor to Excite's and the Sub's knowledge has
any such action, proceeding, claim or investigation been threatened.
3.10 Tax-free Treatment. To the knowledge of Excite, Sub and their
respective affiliates, there are no situations that would prevent the treatment
of the Merger as a tax-free transaction under Section 368(a) of the Code. Excite
has no plan or intention directly or indirectly (through one or more related
parties) to reacquire any of its voting common stock issued in the Merger. For
these purposes "related parties" include corporations which are members of the
same affiliated group as defined in Section 1504 of the Code (determined without
regard to Section 1504(b) of the Code), or two corporations if the first
corporation purchases the stock of the second corporation in a transaction which
would be treated as a distribution in redemption of the stock of the first
corporation under Section 304(a) (2) of the Code (determined without regard to
Treas. Reg. Sec. 1.1502-80(b)). In addition, a corporation will be treated as
related to another corporation if such relationship exists immediately before or
immediately after the acquisition of the stock involved. Moreover, a
corporation, other than Throw or a person related to Throw, will be treated as
related to Excite if the relationship is created in connection with the Merger.
For purposes of this representation, it should be noted that Excite may from
time to time repurchase some of its issued and outstanding common stock in open
market repurchase transactions unrelated to the Merger.
20
21
3.11 Undisclosed Liabilities. To the knowledge of Excite and Sub, there
are no undisclosed liabilities that would have a material adverse effect on the
present or future operations or financial conditions of Excite or Sub, or that
would prevent Excite or Sub from fulfilling their obligations under this
Agreement.
4. THROW AND PRINCIPAL SHAREHOLDER PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Throw and the Principal for purpose of Sections 4.4 and 4.10 only,
covenant and agree as follows:
4.1 Advice of Changes. Throw will promptly advise Excite in writing (a) of
any event occurring subsequent to the date of this Agreement that would render
any representation or warranty of Throw contained in this Agreement, if made on
or as of the date of such event or the Closing Date, untrue or inaccurate in any
material and adverse respect and (b) of any material adverse change in Throw's
business, results of operations or financial condition; provided however, that
Throw need not so advise Excite when Throw's losses are normal and consistent
with Throw's past business practices or where Throw incurs normal, reasonable
liabilities for services performed in connection with this Agreement, so long as
in all instances such losses or liabilities comply with the requirements and
limitations of Section 4.3 hereof.
4.2 Maintenance of Business. Throw will use its best efforts to carry on
and preserve its business and its relationships with customers, suppliers,
employees and others in substantially the same manner as it has prior to the
date hereof. If Throw becomes aware of a material deterioration in the
relationship with any material customer, supplier or key employee, it will
promptly bring such information to the attention of Excite in writing and, if
requested by Excite, will exert its best efforts to restore the relationship.
4.3 Conduct of Business. Throw will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and will
not, without the prior written consent of Excite:
(a) borrow any money;
(b) enter into any material transaction which involves an expense or
capital commitment by Throw in excess of Twenty Five Thousand Dollars
($25,000.00) individually or Fifty Thousand Dollars ($50,000.00) or more in
aggregate or which obligates Throw for a period exceeding six (6) months other
than fees and expenses associated with this Agreement;
(c) encumber or permit to be encumbered any of its assets or grant
liens therein;
(d) dispose of any portion of its assets with a value exceeding
Twenty Five Thousand Dollars ($25,000);
(e) enter into any lease or contract for the purchase or sale of any
property, real or personal, except in the ordinary course of business consistent
with past practice;
(f) fail to maintain its equipment and other assets in good working
condition and repair according to the standards it has maintained to the date of
this Agreement, subject only to ordinary wear and tear;
21
22
(g) pay any bonus, royalty, increased salary or special remuneration
to any officer, employee or consultant or agree to same or enter into any new
employment, severance, "golden parachute" or consulting agreement with any such
person;
(h) change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock;
(j) amend or terminate any contract, agreement or license to which
it is a party except those amended or terminated in the ordinary course of
business, consistent with past practice, and which are not material in amount or
effect;
(k) lend any amount to any person or entity, other than advances for
travel and expenses which are incurred in the ordinary course of business
consistent with past practice, not material in amount and documented by receipts
for the claimed amount;
(l) guarantee or act as a surety for any obligation except for the
endorsement of checks and other negotiable instruments in the ordinary course of
business, consistent with past practice, which are not material in amount;
(m) waive or release any material right or claim except in the
ordinary course of business, consistent with past practice;
(n) issue or sell any shares of its capital stock of any class
(except upon the exercise of a convertible security, option or warrant currently
outstanding), or any other of its securities, or issue or create any warrants,
obligations, subscriptions, options, convertible debt, or other commitments to
issue shares of capital stock, or (except pursuant to contractual obligations
currently in existence) accelerate the vesting of any outstanding option or
other security;
(o) split or combine the outstanding shares of its capital stock of
any class or enter into any recapitalization affecting the number of outstanding
shares of its capital stock of any class or affecting any other of its
securities;
(p) merge, consolidate or reorganize with, or acquire any entity;
(q) amend its Articles of Incorporation or Bylaws;
(r) license any of its technology or intellectual property except in
the ordinary course of business consistent with past practice;
(s) agree to any audit assessment by any tax authority or file any
federal or state income or franchise tax return unless copies of such returns
have been delivered to Excite for its review and approval by Excite prior to
filing, which review and approval shall not be unreasonably withheld or delayed;
(t) change any insurance coverage or issue any certificates of
insurance;
(u) hire or terminate any employee or consultant, except in the
ordinary course of business;
(v) adopt or amend any employee benefit plan;
22
23
(w) amend or enter into any new, material agreements without
Excite's prior written consent; or
(x) enter into any contracts for the sale of advertising in an
amount exceeding Twenty Five Thousand Dollars ($25,000) or for a period longer
than thirty (30) days.
4.4 Shareholders Approval. Throw will obtain the written consent of the
Throw Shareholders at the earliest practicable date approving this Agreement,
the Throw Ancillary Agreements, the Merger and related matters, which approval
will be unanimously recommended by Throw's Board of Directors and management. To
the extent the Principal holds any Throw Capital Stock at the effective date of
the written consent, the Principal agrees to execute the written consent
approving this Agreement, Merger and all related matters.
4.5 Proxy Statement. Throw will send to or make available to the Throw
Shareholders in a timely manner, for the purpose of considering and executing a
written consent approving the Merger, the Shareholder Materials. Throw will
promptly provide all information relating to its business or operations
necessary for inclusion in the Shareholder Materials to satisfy all requirements
of applicable state and federal securities laws. Throw and Excite each shall be
solely responsible for any statement, information or omission in the Shareholder
Materials relating to it or its affiliates based upon written information
furnished by it. Throw will not provide or publish to the Throw Shareholders any
material concerning it or its affiliates that violates the Securities Act or the
United States Securities Exchange Act of 1934, as amended, (the "Exchange Act")
with respect to the transactions contemplated hereby.
4.6 Regulatory Approvals. Throw will execute and file, or join in the
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign which may be reasonably required, in
connection with the consummation of the transactions contemplated by this
Agreement. Throw will use its best efforts to obtain all such authorizations,
approvals and consents.
4.7 Necessary Consents. Throw will use its best efforts to obtain such
written consents and take such other actions as may be necessary or appropriate
in addition to those set forth in Section 4.6 to allow the consummation of the
transactions contemplated hereby and to allow Excite to carry on Throw's
business after the Closing.
4.8 Litigation. Throw will notify Excite in writing promptly after
learning of any actions, suits, proceedings or investigations by or before any
court, board or governmental agency, initiated by or against it, or known by it
to be threatened against it.
4.9 Access to Information. Until the Closing, Throw will allow Excite and
its agents reasonable access to the files, books, records and offices of Throw,
including, without limitation, any and all information relating to Throw's
taxes, commitments, contracts, leases, licenses, and real, personal and
intangible property and financial condition. Throw will cause its accountants to
cooperate with Excite and its agents in making available all financial
information reasonably requested, including without limitation the right to
examine all working papers pertaining to all financial statements prepared or
audited by such accountants. All such information shall be subject to the terms
of the non-disclosure provisions set forth in the Letter of Intent entered into
by the parties hereto.
23
24
4.10 Satisfaction of Conditions Precedent. Throw will use its best efforts
to satisfy or cause to be satisfied all the conditions precedent which are set
forth in Section 8, and Throw will use its best efforts to cause the
transactions contemplated by this Agreement to be consummated, and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the transactions contemplated hereby.
4.11 Throw Affiliates Agreements. To ensure that the issuance of Excite
Common Stock in this Merger or in any other current or past merger of Excite
complies with the Securities Act and that this Merger or such other mergers may
be accounted for as a "pooling of interests," concurrently with the execution of
this Agreement, Throw will deliver to Excite a letter identifying all persons
who are, in Throw's reasonable judgment, "affiliates" of Throw at the time this
Agreement is executed, including, all (i) officers, (ii) directors and (iii) all
persons or entities who own ten percent (10%) or greater of Throw Capital Stock,
assuming in that calculation that all Throw Options and Throw Warrants have been
exercised (the "Significant Shareholders"). Throw will provide Excite with all
information and documents reasonably necessary to evaluate this list for
compliance with generally accepted accounting principles and securities laws, as
applicable. Throw will use its best efforts to cause each of its affiliates to
deliver to Excite, prior to Closing, a written agreement (the "Throw Affiliates
Agreement"), substantially in the form of Exhibit 4.11.
4.12 Throw Shareholder Representations. To ensure that the Merger will
qualify as a reorganization for federal income tax purposes, Throw will use its
best efforts to cause each of its affiliates, as defined in Section 4.11 above,
to execute, at or before the Closing, the Throw Affiliates Agreement which
contains such representations as may be reasonably requested by Excite, its
accountants or its attorneys for the purpose of ensuring such tax treatment.
4.13 Throw Dissenting Shares. As promptly as practicable after the date of
the Throw Shareholders' written consent and prior to the Closing Date, Throw
shall furnish Excite with the name and address of each Throw Shareholder who
requests appraisal rights pursuant to Section 23B.13 of the Revised Washington
Code (the "Throw Dissenting Shareholder") and the number of Throw Capital Stock
(the "Dissenting Shares") owned by such Throw Dissenting Shareholder.
4.14 Pooling Accounting. Throw shall use its best efforts to cause its
affiliates not to take any action that would adversely affect the ability of
Excite to account for this Merger or any of its other concurrent or past
business combinations as a pooling of interests.
4.15 Blue Sky Laws. Throw shall use its best efforts to assist Excite to
the extent necessary to comply with the securities and Blue Sky laws of all
jurisdictions which are applicable in connection with the Merger.
4.16 Investment Representation Letters. Throw shall request each of the
Throw Shareholders and any holder of Throw Convertible Debt that elects to
convert to Excite Common Stock at the Effective Time to sign an Investor
Representation Letter, in the form agreed to by Throw and Excite, prior to
Close.
4.17 Waivers from Security Holders. Throw shall obtain fully executed
security holder consent and waiver of rights forms from each holder of Throw
Capital Stock, Throw Options,
24
25
Throw Warrants and/or Throw Convertible Debt in the form attached hereto as
Exhibit 4.17 (the "Security Holder Consent and Waiver of Rights").
4.18 Throw Convertible Debt. Throw will use its reasonable efforts to
obtain written agreement, on an individual basis, from each of the holders of
Throw Convertible Debt set forth on Exhibit 4.18 attached hereto to the
conversion of such total outstanding Throw Convertible Debt into Excite Common
Stock at the Effective Time and to the terms of the treatment of such Throw
Convertible Debt as set forth in Section 1.1.1 hereof.
5. EXCITE AND SUB PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Excite and Sub covenant and agree as follows:
5.1 Advice of Changes. Excite and Sub will promptly advise Throw in
writing (a) of any event occurring subsequent to the date of this Agreement that
would render any representation or warranty of Excite or Sub contained in this
Agreement, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material and adverse respect and (b) of any material
adverse change in Excite's or Sub's business, results of operations or financial
condition.
5.2 Regulatory Approvals. Excite and Sub will execute and file, or join in
the execution and filing, of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement. Each of Excite and Sub will use its best efforts to obtain
all such authorizations, approvals and consents.
5.3 Satisfaction of Conditions Precedent. Each of Excite and Sub will use
its best efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Section 7, and each of Excite and Sub will use
its best efforts to cause the transactions contemplated by this Agreement to be
consummated and, without limiting the generality of the foregoing, to obtain all
consents and authorizations of third parties and to make all filings with, and
give all notices to, third parties that may be necessary or reasonably required
on its part in order to effect the transactions contemplated hereby.
5.4 Excite Affiliates Agreements. To ensure that the issuance of Excite
Common Stock in this Merger or any other current or past merger of Excite may be
accounted for as a "pooling of interests," Excite will use its best efforts to
cause each of its affiliates, as defined in Section 4.11 above, to sign and
deliver to Excite a written agreement (the "Excite Affiliates Agreement"), in
the form of Exhibit 5.4, providing that such person will make no disposition of
Excite Common Stock (a) in the thirty (30) day period prior to the Effective
Time or (b) after the Effective Time until Excite shall have publicly released a
report including the financial results of Excite that cover a period of at least
thirty (30) days of operations after the Closing of the Merger.
5.5 Blue Sky Laws. Excite shall take such steps as may be necessary to
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Merger.
25
26
5.6 Pooling Accounting. Excite shall use its best efforts to cause its
affiliates not to take any action that would adversely affect the ability of
Excite to account for this Merger or any of its other concurrent or past
business combinations as a pooling of interests.
5.7 Employee Matters.
5.7.1 Employee Stock Purchase Plan. Subject to compliance with
pooling of interests accounting treatment and the requirements of any applicable
laws, employees of Throw who become employees of Excite at or after the
Effective Time shall be permitted to participate in the Excite 1997 Employee
Stock Purchase Plan (the "ESPP") commencing with the first Offering Period (as
defined in the ESPP) following the Effective Time and such employees will
receive full credit for the period of their employment with Throw by Excite for
such purposes, subject to compliance with the eligibility and other provisions
of such plan; provided, however, nothing contained herein shall require Excite
to continue the employment of any such employee.
5.7.2 Other Benefit Plans. Subject to compliance with pooling of
interests accounting treatment and the requirements of any applicable laws,
employees of Throw who become employees of Excite at or after the Effective Time
will be permitted to participate in those employee benefit plans sponsored by
Excite in which similarly situated Excite employees participate subject to the
eligibility and other provisions of such Excite employee benefit plans. Such
employees will receive full credit for the period of their employment with Throw
by Excite for such purposes; provided, however, nothing contained herein shall
require Excite to continue the employment of any such employee.
5.8 Update SEC Reports. Excite shall update the SEC Reports and any other
disclosures related thereto for any material information which has come into
existence since the SEC Reports were previously provided to Throw's counsel for
delivery to the Throw Shareholders through the Throw Shareholder mailing, until
and through Closing.
5.9 Outstanding Debt and Other Liabilities. Effective as of the Closing,
Excite will assume all outstanding debt and other liabilities of Throw,
including, without limitation, amounts owed to vendors and service providers,
and the principal and interest of the Throw Convertible Debt that is not
converted into Excite Common Stock pursuant to the terms of Section 1.1.1(iv)
hereof. Excite shall pay such debt and liabilities in accordance with the terms
thereof.
5.10 Offer Letters. Prior to the Closing, Excite will provide to each
current employee of Throw (the "Employees") a standard at-will employment offer
letter (the "Offer Letters") containing such standard terms and conditions
offered to current Excite employees at similar levels of responsibility and
authority. The employee invention assignment and confidentiality agreement
attached to the Offer Letter (the "Employee Invention Assignment and
Confidentiality Agreement") shall provide that the Employees will (i) not
compete with the business of Throw and Excite (or any successor corporations)
for: (a) for the founders, consisting of Xxxxx Xxxxx, Xxxx Xxxxxxxxx and Kuntay
Taner, a period of one (1) year following the termination of his employment with
Excite for any reason or (b) for all other Employees, during the term of
employment by Excite and (ii) not solicit any employee of Excite for one (1)
year after Employee's termination of employment with Excite. Excite will pay all
reasonable costs and expense associated with the relocation of the Employees
from Seattle to the San Francisco Bay Area, including without limitation, the
expense of a mutually agreeable professional moving company.
26
27
6. CLOSING MATTERS
6.1 The Closing. Subject to termination of this Agreement as provided in
Section 9 below, the Closing will take place at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Alto, California on or before April 8, 1998 (the
"Closing"), or, if all conditions to closing have not been satisfied or waived
by such date, such other place, time and date as Throw and Excite may mutually
select (the "Closing Date"). Concurrently with the Closing, an Agreement of
Merger will be filed in the office of the Delaware Secretary of State and the
Articles of Merger will be filed in the office of Washington Secretary of State.
The Agreement of Merger and the Articles of Merger provide that the Merger shall
become effective upon filing.
6.2 Exchange of Certificates.
6.2.1 As of the Effective Time, all shares of Throw Capital Stock
that are outstanding immediately prior thereto will, by virtue of the Merger and
without further action, cease to exist and will be converted into the right to
receive from Excite the number of shares of Excite Common Stock determined as
set forth in Section 1.1.1, subject to Sections 1.1.4, 1.1.5, 1.2 and 1.3.
6.2.2 Prior to the Effective Time, each holder of shares of Throw
Capital Stock that are not Dissenting Shares will surrender the certificate(s)
for such shares (the "Throw Certificates"), duly endorsed as requested by
Excite, to Excite's counsel for cancellation for Excite's records. Prior to the
Effective Time, each holder of Throw Convertible Debt that elects to convert to
Excite Common Stock at the Effective Time will surrender the original promissory
note(s), security agreement(s) and other related documentation (the "Debt
Instruments") to Excite's counsel for cancellation for Excite's records. Prior
to the Effective Time, Excite's counsel will forward a letter of instruction to
BankBoston, N.A., acting as the transfer agent for Excite, (the "Exchange
Agent") instructing the Exchange Agent to issue to Excite's counsel a
certificate for the number of shares of Excite Common Stock to which such holder
is entitled pursuant to Section 1.1.1 hereof. Excite's counsel will release such
certificate at the Effective Time, provided such holder has surrendered its, his
or her Throw Certificate(s) and/or Debt Instruments to Excite's counsel, to each
such tendering holder. Excite will distribute any cash payable under Section
1.2. The parties agree that due to the timing of the notice of election by
holders of Throw Convertible Debt to convert into Excite Common Stock, such
share certificates may not be available from the Transfer Agent until after
Close.
6.2.3 No dividends or distributions payable to holders of record of
Excite Common Stock after the Effective Time, or cash payable in lieu of
fractional shares, will be paid to the holder of any unsurrendered Throw
Certificate(s) and/or Debt Instruments until the holder of the Throw
Certificate(s) and/or Debt Instruments surrenders such Throw Certificate(s)
and/or Debt Instruments, or if such Throw Certificates or Debt Instruments are
lost, stolen or destroyed, provides an indemnity reasonably acceptable to
Excite. Subject to the effect, if any, of applicable escheat and other laws,
following surrender of any Throw Certificate and/or Debt Instrument, there will
be delivered to the person entitled thereto, without interest, the amount of any
dividends and distributions therefor paid with respect to Excite Common Stock so
withheld as of any date subsequent to the Effective Time and prior to such date
of delivery.
6.2.4 All Excite Common Stock delivered upon the surrender of Throw
Capital Stock in accordance with the terms hereof and the terms of the Escrow
Agreement will be deemed to have been delivered in full satisfaction of all
rights pertaining to such Throw Capital Stock. There will be no further
registration of transfers on the stock transfer books of Throw or
27
28
its transfer agent of the Throw Capital Stock. If, after the Effective Time,
Throw Certificates are presented for any reason, they will be canceled and
exchanged as provided in this Section 6.2.
6.2.5 Until certificates representing Throw Capital Stock
outstanding prior to the Merger are surrendered pursuant to Section 6.2.2 above,
such certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of Excite Common Stock into which the Throw Capital Stock will
have been converted, subject to the Escrow Agreement with respect to the number
of shares withheld as Escrow Shares.
6.2.6 Certificates which are not presented to Excite's counsel
within one (1) year after the Closing shall be canceled and the holder thereof
will no longer be entitled to receive any Excite securities in consideration
thereof. Any Debt Instruments not delivered at or prior to the Effective Time
will not be deemed to be convertible into Excite Common Stock and shall be
payable only in cash pursuant to the terms thereof.
6.3 Assumption of Options and Warrants. Upon Closing, Excite will notify
in writing each holder of a Throw Option and Throw Warrant of the assumption of
such Throw Option and Throw Warrant by Excite, and the number of shares of
Excite Common Stock that are then subject to such option or warrant and the
exercise price of such option or warrant, as determined pursuant to Section 1.1
hereof.
7. CONDITIONS TO OBLIGATIONS OF THROW
Throw's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Throw, but only in a writing signed by
Throw):
7.1 Accuracy of Representations and Warranties. The representations and
warranties of Excite and Sub set forth in Section 3 shall be true and accurate
in all material respects on and as of the Closing with the same force and effect
as if they had been made at the Closing, and Throw shall receive a certificate
to such effect executed by each of Excite's and Sub's Chief Financial Officer.
7.2 Covenants. Excite shall have performed and complied in all material
respects with all of its covenants contained in Section 5 on or before the
Closing, and Throw shall receive a certificate to such effect signed by each of
Excite's and Sub's Chief Financial Officer.
7.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
7.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
7.5 Opinion of Excite's Counsel. Throw shall have received from counsel to
Excite an opinion substantially in the form of Exhibit 7.5.
28
29
7.6 Shareholder Approval. The principal terms of this Agreement and the
Agreement of Merger shall have been approved and adopted by Throw Shareholders,
as required by applicable law and Throw's Articles of Incorporation and Bylaws.
7.7 Tax Certificate and Affiliates Agreement. Throw shall have received
the tax certificate executed by Excite's Chief Financial Officer in the form of
Exhibit 1.6A and an Excite Affiliates Agreement executed by each affiliate in
the form of Exhibit 5.4, which are all reasonably satisfactory to Throw.
7.8 No Material Adverse Change. There will not have been any material
adverse change in Excite's business results of operations or financial condition
at Closing which have or reasonably would be expected to impair Excite's ability
after Closing to continue to develop, distribute, sell and distribute its
products and services that are material to Excite's business and Throw will
receive a certificate to such effect executed by Excite's Chief Financial
Officer. Material adverse changes shall not include price fluctuations in the
price of Excite's Common Stock on the NASDAQ market not directly related to the
foregoing.
7.9 Registration Rights Agreement. Throw shall have received the
Registration Rights Agreement executed by Excite, which shall be effective as of
the Closing Date.
7.10 Offer Letters. The Employees shall have received Offer Letters with
attached Employee Invention Assignment and Confidentiality Agreements containing
non-competition and non-solicitation provisions, executed by
Excite.
8. CONDITIONS TO OBLIGATIONS OF EXCITE
The obligations of Excite and Sub hereunder are subject to the fulfillment
or satisfaction on, and as of the Closing, of each of the following conditions
(any one or more of which may be waived by Excite, but only in a writing signed
by Excite):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Throw set forth in Section 2 shall be true and accurate in all
material respects on and as of the Closing with the same force and effect as if
they had been made at the Closing, and Excite shall receive a certificate to
such effect executed by Throw's Chief Executive Officer.
8.2 Covenants. Throw shall have performed and complied in all material
respects with all of its covenants contained in Section 4 on or before the
Closing, and Excite shall receive a certificate to such effect signed by Throw's
Chief Executive Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
8.5 Opinion of Throw's Counsel. Excite shall have received from counsel to
Throw, an opinion substantially in the form of Exhibit 8.5.
29
30
8.6 Consents. Excite shall have received duly executed copies of all
material third-party consents, approvals, assignments, waivers, authorizations
or other certificates contemplated by this Agreement or the Throw Schedule of
Exceptions or as otherwise set forth on Exhibit 8.6 hereto to provide for the
continuation in full force and effect of any and all material contracts,
licenses and leases of Throw and for Excite to consummate the transactions
contemplated hereby in form and substance reasonably satisfactory to Excite,
except for such consents and approvals thereof as Excite and Throw shall have
agreed shall not be obtained, as contemplated by the Excite Schedule of
Exceptions.
8.7 No Litigation. No litigation or proceeding shall be threatened or
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of any of the transactions contemplated by this Agreement, or
which could be reasonably expected to have a material adverse effect on the
present or future operations or financial condition of Throw.
8.8 Requisite Approvals. The principal terms of this Agreement and the
Agreement of Merger shall have been approved by the holders of no less than
ninety five percent (95%) of Throw Capital Stock.
8.9 Dissenting Shares. There shall be no more than five percent (5%) Throw
Dissenting Shares.
8.10 Affiliates Agreements and Throw Shareholder Representations. Throw
shall have delivered to Excite the letter required by Section 4.11 naming all
persons who are Significant Shareholders for purposes of Section 4.11 and all
persons who are "affiliates" of Throw for purposes of Rule 145 under the
Securities Act, and each such person shall have executed and delivered an Throw
Affiliates Agreement to Excite in accordance with Sections 4.11 and 4.12.
8.11 Offer Letters. Excite shall have received executed copies of the
Offer Letters and attached Employee Invention Assignment and Confidentiality
Agreements containing non-competition and non-solicitation provisions, from
the following Employees: Xxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxx Xxxx-Xxxxxx and
Kuntay Taner.
8.12 Resignation of Directors and Officers. The directors and officers of
Throw in office immediately prior to the Effective Time of the Merger will be
replaced as directors and officers (respectively) of Throw automatically
effective as of the Effective Time of the Merger pursuant to the terms of this
Agreement. Excite shall have received the resignation of each such Throw
director and officer, effective as of the Closing Date.
8.13 Status of Agreements. Excite shall be reasonably satisfied that all
agreements that are material to the business of Throw will continue in full
force and effect following the Closing.
8.14 Investor Representation Letters. Excite shall have received completed
and executed Investor Representation Letters from each Throw Shareholder and
each holder of Throw Convertible Debt electing to convert into Excite Common
Stock at the Effective Time which are reasonably satisfactory to Excite.
8.15 Tax-Free Reorganization. Excite shall have received the tax
certificate executed by Throw's Chief Executive Officer in the form of Exhibit
1.6B.
8.16 Security Holder Consent and Waiver of Rights. Excite shall have
received completed and executed Security Holder Consent and Waiver of Rights
Agreements from each
30
31
holder of Throw Capital Stock, Throw Options, Throw Warrants and/or Throw
Convertible Debt that elects to convert into Excite Common Stock which are
reasonably satisfactory to Excite.
8.17 No Material Adverse Change. There will not have been any material
adverse change in Throw's business results of operations or financial condition
at Closing which have or reasonably would be expected to impair Throw's ability
after Closing to continue to develop, sell and distribute its products and
services that are material to Throw's business and Excite will receive a
certificate to such effect executed by Throw's Chief Executive Officer.
8.18 Intellectual Property Assignments. Excite shall have received all
executed assignments relating to all provisional and pending patent
applications, registered copyrights, copyright applications, registered
trademarks, trademark applications, registered tradenames, issued service marks,
and service xxxx applications listed on Exhibit 2.12 attached hereto.
8.19 Consents to Relocation. Excite shall have received completed and
executed consents from the Employees consenting to their relocation to Excite's
Redwood City office.
9. TERMINATION OF AGREEMENT
9.1 Prior to Closing. This Agreement may be terminated at any time prior
to the Closing by the mutual written consent of each of the parties hereto.
9.2 At the Closing. At or prior to the Closing, this Agreement may be
terminated and abandoned:
9.2.1 By Excite if any of the conditions precedent to Excite's
obligations set forth in Section 8 above have not been fulfilled or waived at
and as of the Closing; or
9.2.2 By Throw if any of the conditions precedent to Throw's
obligations set forth in Section 7 above have not been fulfilled or waived at
and as of the Closing.
Any termination of this Agreement under this Section 9.2 will
be effective by the delivery of notice of the terminating party to the other
party hereto.
9.3 Remedies. Any termination of this Agreement pursuant to this Section 9
will be without further obligation or liability upon any party in favor of the
other party hereto other than except as set forth in this Section 9.3 and the
obligations provided in Sections 11.7 and 11.15, which will survive termination
of this Agreement; provided, however, that nothing herein will limit the
obligation of Throw and Excite to use their best efforts to cause the Merger to
be consummated, as set forth in Sections 4.10 and 5.3 hereof, respectively.
10. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS
10.1 Survival of Representations. All representations, warranties and
covenants of Throw, Excite and Sub contained in this Agreement will survive the
Effective Time and remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the parties to this Agreement, until
the earlier of (a) the termination of this Agreement or (b) one (1) year after
the Closing Date, whereupon such representations, warranties and covenants will
expire (except for covenants that by their terms survive for a longer period),
provided however, that representations, warranties and covenants involving
intentional fraud shall survive the Closing without the limitations of
subsections (a) or (b) above.
31
32
10.2 Agreement to Indemnify.
10.2.1 Subject to the limitations set forth in this Section 10, up
and until the Closing, Throw will indemnify, defend and hold harmless Excite,
its affiliates, officers, directors, employees, consultants and agents
(hereinafter referred to individually as an "Indemnified Person" and
collectively as "Indemnified Persons") from and against any and all claims,
liability, damages and/or costs including, but not limited to, attorneys fees
(hereinafter referred to as "Damages") arising out of any misrepresentation or
breach of or default in performance of any of the representations, warranties
and covenants given or made by Throw and the Principal in this Agreement or in
any certificate, document or instrument delivered by or on behalf of Throw
pursuant hereto.
10.2.2 Subject to the limitations set forth in this Section 10,
after the Closing, the Principal Throw Holders will indemnify and hold harmless
the Indemnified Persons from and against any and all Damages arising out of any
misrepresentation or breach of or default in connection with any of the
representations and warranties given or made by Throw or the Principal in
Section 2 of this Agreement. Each Principal Throw Holder's maximum liability for
breaches of representations, warranties, and covenants involving intentional
fraud by another holder shall be the product of (a) the number of shares of
Excite Common Stock issued to such holder hereunder, and (b) the Per Share
Market Value; provided however, no limit of liability shall apply to any
Principal Throw Holder who is determined to have committed intentional fraud.
Other than for liability for breaches of representations, warranties, and
covenants, which breaches involve intentional fraud, each Principal Throw
Holder's maximum liability shall be his, her or its pro rata share of the Escrow
Shares and each Indemnified Person may look only to the Escrow Shares to satisfy
this indemnity obligation and the sole remedy shall be a claim under the Escrow.
10.2.3 In seeking indemnification for Damages under this Section 10,
the Indemnified Persons shall exercise their remedies with respect to the Escrow
Shares and any other assets deposited in escrow pursuant to the Escrow Agreement
and these Escrow Shares shall be the sole source of indemnification in
connection therewith; provided, however, that no such claim for Damages will be
asserted after the expiration of the Escrow Period. In seeking indemnification
for Damages under Section 10.2.2, the Indemnified Persons shall exercise their
remedies solely to the Escrow Shares deposited in escrow pursuant to the Escrow
Agreement. Except for intentional fraud: (i) no Principal Throw Holder shall
have any liability to an Indemnified Person under this Agreement except to the
extent of such Principal Throw Holder's Escrow Shares deposited under the Escrow
Agreement and (ii) the remedies set forth in this Section 10.2 shall be the
exclusive remedies of Excite and the other Indemnified Persons hereunder against
any Principal Throw Holder and all other Throw Shareholders. The liability of
any Principal Throw Holder with respect to any claim for intentional fraud shall
be several and not joint.
10.2.4 Excite will indemnify, defend and hold harmless Throw, its
affiliates (it is agreed and understood that this term includes all of Throw's
venture capital investors), officers, directors, employees, consultants and
agents from any and all Damages arising from the misrepresentations or breach of
or default in performance of any of the representations and warranties and
covenants given or made by Excite in this Agreement, in any certificate,
document or instrument delivered by or on behalf of Excite pursuant hereto.
32
33
11. MISCELLANEOUS
11.1 Governing Law. The internal laws of the State of Delaware
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
11.2 Assignment; Binding Upon Successors and Assigns. Neither party hereto
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto and any attempt to do so will be void. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.3 Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
11.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories.
11.5 Amendment and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party to be bound thereby. The waiver by a party
of any breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
The Agreement may be amended by the parties hereto at any time before or after
approval of the Throw Shareholders; but, after such approval, no amendment will
be made which by applicable law requires the further approval of the Throw
Shareholders without obtaining such further approval.
11.6 No Waiver. The failure of any party to enforce any of the provisions
hereof will not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
11.7 Expenses. In the event that the transaction is not consummated, each
company will be responsible for its own fees and expenses in connection with the
proposed transaction. In the event that the transaction is consummated, Excite
will be responsible for its own fees and expenses and for Throw's reasonable
fees and expenses in connection with the transaction, including reasonable
attorneys' fees.
11.8 Attorneys' Fees. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of the suit, and not as damages, reasonable attorneys'
fees, including without limitation, costs, expenses and fees on any appeal.
11.9 Notices. Any notice or other communication required or permitted to
be given under this Agreement will be in writing, will be delivered personally,
by registered or certified
33
34
mail, postage prepaid, by telecopy or by nationally recognized courier service,
and will be deemed given upon delivery, if delivered personally, or three days
after deposit in the mails, if mailed, to the following addresses:
(i) If to Excite:
Excite, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx
With a copy to:
Xxxxx Xxxxxx
Fenwick & West LLP
0 Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(ii) If to Throw:
Throw Inc.
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
With a copy to:
Xxxxxxx X. Xxxxxxx
Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 11.9.
11.10 Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section or an exhibit
will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
11.11 No Joint Venture. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
34
35
11.12 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
11.13 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
11.14 Public Announcement. Upon execution of the Agreement by both
parties, and until the consummation of the Merger, all press releases and other
public and private communications shall be made by the parties only with the
prior mutual written consent of Throw and Excite, except that Excite may make
such disclosures as are required by applicable law, provided, however, that a
copy of such disclosure shall first be submitted to Throw within a reasonable
time period prior to the dissemination thereof.
11.15 Confidentiality. Excite and Throw each recognize that they have
received and will receive confidential information concerning the other during
the course of the Merger negotiations and preparations. Accordingly, Excite and
Throw each agree (a) to use its respective best efforts to prevent the
unauthorized disclosure of any confidential information concerning the other
that was or is disclosed during the course of such negotiations and
preparations, or should reasonably have been considered to be confidential
information, and (b) to not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the Merger
and related transactions. The obligations of this section will not apply to
information that (i) is or becomes part of the public domain, (ii) is disclosed
by the disclosing party to third parties without restrictions on disclosure,
(iii) is received by the receiving party from a third party without breach of a
nondisclosure obligation to the other party or (iv) is required to be disclosed
by law. If this Agreement is terminated, all copies of documents containing
confidential information shall be returned by the receiving party to the
disclosing party.
11.16 Entire Agreement. This Agreement and the exhibits hereto constitute
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties, with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
35
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"EXCITE" "THROW"
EXCITE, INC. THROW INC.
By: /s/ XXXXXX X. XXXX By: /s/ XXXXX XXXXX
--------------------------- -------------------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
--------------------------- -------------------------------------
Its: Executive V.P. - CFO Its: President and Chief Executive Officer
--------------------------- -------------------------------------
"SUB" "PRINCIPAL"
CLWYD CORPORATION
By: /s/ XXXXXX X. XXXX By: /s/ XXXXX XXXXX
--------------------------- -------------------------------------
Xxxxx Xxxxx
Name: Xxxxxx X. Xxxx
---------------------------
Its: CFO
---------------------------
"PRINCIPAL THROW HOLDER"
/s/ XXXXX XXXXX
------------------------------------------
Xxxxx Xxxxx
/s/ XXXXX XXXXXXXX
------------------------------------------
Xxxxx Xxxxxxxx
/s/ XXXX XXXXXXXXX
------------------------------------------
Xxxx Xxxxxxxxx
[SIGNATURE PAGE FOR AGREEMENT AND PLAN OF REORGANIZATION]
36
37
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Agreement of Merger
Exhibit B Articles of Merger
Exhibit 1.1.2 Conversion List of Throw Options
Exhibit 1.3 Escrow Agreement
Exhibit 1.5.1A Registration Rights Agreement
Exhibit 1.6A Excite Officers Tax Certificate
Exhibit 1.6B Throw Officers Tax Certificate
Exhibit 2.0 Throw Schedule of Exceptions
Exhibit 2.3 List of all holders and numbers held of Throw
Common Stock, Preferred Stock, Throw Options and
Warrants
Exhibit 2.8 Throw's 1997 Financial Statements and February
Financial Statements
Exhibit 2.11 Material Agreements
Exhibit 2.12 Throw IP Rights Agreements and applications,
registration and filings to protect Throw IP
Rights and related disclosures
Exhibit 2.15.1 Employment Contracts and Consulting Agreements
Exhibit 2.15.3 Throw Employee Plans
Exhibit 2.15.6 Throw Benefit Arrangements
Exhibit 2.15.7 Amendments to Benefit Plan or Arrangement
Exhibit 2.15.12 List of all Employees, Officers and Consultants of
Throw
Exhibit 2.17 Finder's Fee Arrangement
Exhibit 3.0 Excite Schedule of Exceptions
Exhibit 4.11 Throw Affiliates Agreement
Exhibit 4.17 Security Holder Consent and Waiver of Rights
1
