Exhibit 2.29
AGREEMENT AND PLAN OF MERGER
by and among
IXL HOLDINGS, INC.,
iXL-SAN FRANCISCO, INC.,
PANTHEON INTERACTIVE, INC.
AND
THE PANTHEON SHAREHOLDERS
DATED AS OF SEPTEMBER 18, 1998
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER is entered into as of this 18th day of
September, 1998, by and between Pantheon Interactive, Inc., a California
corporation ("Pantheon"), IXL Holdings, Inc., a Delaware corporation ("Parent"),
iXL-San Francisco, Inc., a Delaware corporation, or its successors or assigns
("Sub"), and the shareholders of Pantheon as listed on the signature page hereto
(the "Pantheon Shareholders").
R E C I T A L S:
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A. Pantheon is engaged in the business of developing internet sites and
furnishing internet services, including website design and maintenance (the
"Pantheon Business").
B. Pantheon and Sub each desire to merge their respective companies and
business operations, all on the terms and subject to the conditions set forth
herein (the "Merger").
C. The Pantheon Shareholders collectively own 100% of the issued and
outstanding capital stock of Pantheon (the "Pantheon Stock").
D. The respective Boards of Directors of Parent, Sub and Pantheon, and the
respective shareholders of Sub and Pantheon, have approved the Merger, upon the
terms and subject to the conditions set forth herein.
E. The parties hereto intend for the Merger to qualify, for federal income
tax purposes, as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants, benefits,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof, at
the Effective Time (as defined in Section 1.3 hereof), (a) Pantheon shall be
merged with and into Sub, (b) the separate existence of Pantheon shall cease,
and (c) Sub shall continue as the surviving corporation in the Merger under the
laws of the State of Delaware under the name iXL-San Francisco, Inc. For
purposes of this Agreement, Sub shall be referred to, for the period commencing
on the Effective Time, as the "Surviving Corporation."
1.2 Closing and Closing Date. Unless this Merger Agreement shall have
been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 9.1 hereof, and subject to the satisfaction or
waiver of the conditions set forth in Article VII hereof, the closing of the
Merger (the "Closing") will take place as promptly as practicable (and in any
event within five business days after satisfaction of the conditions set forth
in Sections 7.1 and 7.2 hereof) (the "Closing Date") at the offices of Xxxxxx &
Xxxxxx, A Professional Corporation, One Buckhead Plaza, 0000 Xxxxxxxxx Xx., Xxx.
0000, Xxxxxxx, XX 00000, unless another date or place is agreed to by the
parties.
1.3 Effective Time of the Merger. At the Closing, the parties hereto
shall cause (a) a certificate of merger (the "Delaware Certificate of Merger")
to be filed with the office of the Secretary of State of Delaware in accordance
with the provisions of the Delaware General Corporation Law, as amended (the
"DGCL"); and (b) a copy of the Delaware Certificate of Merger (the "California
Certificate of Merger"; collectively with the Delaware Certificate of Merger,
the "Certificate of Merger") to be filed with the office of the Secretary of
State of California in accordance with the provisions of the California General
Corporation Law (the "GCL"). When used herein, the term "Effective Time" shall
mean the time when the Delaware Certificate of Merger has been accepted for
filing by the Secretary of State of Delaware, or such time as otherwise
specified therein.
1.4 Effect of the Merger. The Merger shall, from and after the Effective
Time, have all the effects provided by the DGCL and the GCL. If at any time
after the Effective Time, any further action is deemed necessary or desirable to
carry out the purposes of this Agreement, the parties hereto agree that the
Surviving Corporation and its proper officers and directors shall be authorized
to take, and shall take, any and all such action.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Sub, a form of which is attached to a closing certificate and incumbency
certificate, substantially in the form of Exhibit "A" hereto ("Sub's Closing
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Certificate"), shall be the Certificate of Incorporation of the Surviving
Corporation after the Effective Time, until thereafter changed or amended as
provided therein or by applicable law.
2.2 Bylaws. The Bylaws of Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law. A copy
of the Bylaws of Sub is attached to the Sub's Closing Certificate.
2.3 Board of Directors; Officers. The Board of Directors and officers of
Sub immediately prior to the Effective Time shall be the Board of Directors and
officers, respectively,
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of the Surviving Corporation, until the earlier of their respective resignations
or the time that their respective successors are duly elected or appointed and
qualified.
ARTICLE III
CONVERSION OF SHARES
3.1 Merger Consideration. As of the Effective Time:
(a) All shares of Pantheon Stock owned by Pantheon shall, by virtue
of the Merger and without any action on the part of any shareholder, officer or
director of Pantheon or Sub, be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
(b) Each issued and outstanding share of Pantheon Stock (other than
any Dissenting Shares, as defined in Section 3.2 hereof) shall, upon surrender
to Sub, at the Closing, of the underlying share certificates, be converted into,
and become exchangeable for, a number of shares of validly issued, fully paid
and nonassessable Class B Common Stock of Parent, $.01 par value (the "Parent
Stock") based on the following equation:
PS= 315,000 - D
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$10
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S + O
where:
PS = the number of shares of Parent Stock (valued, as of the
Closing, at $10 per share) for which each share of Pantheon
Stock shall be exchanged pursuant to the Merger
D = the amount by which any outstanding indebtedness of Pantheon
(the "Pantheon Debt"), including debt for borrowed money and
accrued interest thereon, capital leases, accounts payable,
accrued expenses, and any unpaid legal, accounting or other
fees, exceeds Pantheon's cash, all to be determined as of three
business days prior to the Closing Date and all as determined
in accordance with generally accepted accounting principles
("GAAP"); provided, however, that 315,000 is the maximum number
of shares of Parent Stock issuable hereunder
S = the number of issued and outstanding shares of Pantheon Stock
on the Closing Date
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O = the total number of options to purchase Pantheon Stock
outstanding on the Closing Date, to be exchanged for options to
acquire Parent Stock pursuant to Section 6.7(b) hereof
(c) Each issued and outstanding share of common stock of Sub shall,
by virtue of the Merger and without any action on the part of any shareholder,
officer or director of Pantheon or Sub, be converted into and become one fully
paid and nonassessable share of common stock of the Surviving Corporation.
3.2 Dissenting Shares. Notwithstanding any provision hereof to the
contrary, any shares of Pantheon Stock held by a Dissenting Shareholder (as
hereinafter defined) shall not be converted as described in Section 3.1(b)
hereof, but instead shall be converted into the right to receive the
consideration due a Dissenting Shareholder pursuant to the DGCL or GCL, as
applicable, provided, however, that if a Dissenting Shareholder shall fail to
perfect his demand, withdraw his demand or otherwise lose his right for
appraisal under the terms of the DGCL or GCL, as applicable, then the Pantheon
Stock held by such Dissenting Shareholder (the "Dissenting Shares") shall be
deemed to be converted as of the Effective Time in accordance with the
provisions of Section 3.1 hereof. Pantheon shall not voluntarily make any
payment with respect to, settle, or offer to settle or otherwise negotiate, any
such demands. All amounts paid to Dissenting Shareholders shall be paid without
interest thereon (to the extent permitted by applicable law) by the Surviving
Corporation. For purposes hereof, the term "Dissenting Shareholder" shall mean a
Pantheon Shareholder who (a) objects to the Merger; and (b) complies with the
applicable provisions of the DGCL or GCL concerning dissenter's rights.
3.3 No Further Rights. From and after the Effective Time, holders of
certificates theretofore evidencing Pantheon Stock shall cease to have any
rights as stockholders of Pantheon, except as provided herein or by applicable
law.
3.4 Closing of Pantheon's Transfer Books. At the Effective Time, the
stock transfer books of Pantheon shall be closed and no transfer of Pantheon
Stock shall be made thereafter. If after the Effective Time, certificates for
Pantheon Stock are presented to Parent or the Surviving Corporation, they shall
be canceled and exchanged for a consideration as set forth in Section 3.1
hereof, subject to applicable law in the case of Dissenting Shareholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PANTHEON
Pantheon, and the Pantheon Shareholders, jointly and severally, represent
and warrant to Parent and Sub as follows, which representations and warranties
shall survive the Closing in accordance with Section 10.1 hereof.
4.1 Organization and Qualification. Pantheon is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Pantheon has the
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requisite corporate power and authority to carry on the Pantheon Business as it
is now being conducted and is duly qualified or licensed to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary. Complete and correct copies of the Articles of
Incorporation and Bylaws of Pantheon as in effect on the date hereof are
attached to a closing certificate and incumbency certificate, substantially in
the form of Exhibit "B" hereto ("Pantheon's Closing Certificate"). The minute
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book of Pantheon, a true and complete copy of which has been delivered to
Parent, (a) accurately reflects all action taken by the directors and
shareholders of Pantheon at meetings of Pantheon's Board of Directors or
shareholders, as the case may be; and (b) contains true and complete copies, or
originals, of the respective minutes of all meetings or consent actions of the
directors or shareholders.
4.2 Authority. Pantheon has the necessary corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery hereof and the consummation of
the transactions contemplated hereby by Pantheon have been duly and validly
authorized and approved by Pantheon's Board of Directors and the Pantheon
Shareholders, and no other corporate or shareholder proceedings on the part of
Pantheon, its Board of Directors or the Pantheon Shareholders is necessary to
authorize or approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Pantheon and each Pantheon Shareholder, and assuming the due authorization,
execution and delivery by Parent and Sub, constitutes the valid and binding
obligation of Pantheon and each Pantheon Shareholder, enforceable against
Pantheon and each Pantheon Shareholder in accordance with its terms subject, in
each case, to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general application relating to or affecting creditors' rights and to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing.
4.3 Capitalization.
(a) The authorized capital stock of Pantheon consists of 5,000,000
shares of common stock, no par value, of which 3,000,000 shares are validly
issued and outstanding, fully paid and nonassessable. All outstanding capital
stock of Pantheon was issued in accordance with applicable federal and state
securities laws. Except as set forth on Schedule 4.3(a) hereto, there are no
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options, warrants, calls, convertible notes, agreements, commitments or other
rights presently outstanding that would obligate Pantheon or any of the Pantheon
Shareholders to issue, deliver or sell shares of its capital stock, or to grant,
extend or enter into any such option, warrant, call, convertible note,
agreement, commitment or other right. In addition to the foregoing, as of the
date hereof, Pantheon has no bonds, debentures, notes or other indebtedness
issued or outstanding that have voting rights in Pantheon. Schedule 4.3(a) sets
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forth a list of (i) all holders of record of (A) Pantheon Stock, and (B)
options, warrants, convertible notes or other rights to purchase capital stock
of Pantheon (collectively, "Pantheon Stock Rights"); (ii) the number of shares
held by each Pantheon Shareholder and the number of shares of capital stock of
Pantheon represented by the Pantheon Stock Rights; and (iii) the exercise price,
date of grant, duration and vesting schedule for each Pantheon Stock Right.
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(b) All of the issued and outstanding shares of capital stock of
Pantheon are validly issued, fully paid and nonassessable. Except as set forth
on Schedule 4.3(b) hereto, each Pantheon Shareholder represents and warrants
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that the Pantheon Stock held by such Pantheon Shareholder is free and clear of
any lien, charge, security interest, pledge, option, right of first refusal,
voting proxy or other voting agreement, or encumbrance of any kind or nature
other than restrictions on transfer imposed by federal and state securities laws
(any of the foregoing, a "Lien").
4.4 Subsidiaries. Pantheon has no subsidiaries and does not otherwise own
or control, directly or indirectly, any equity interest, or any security
convertible into an equity interest, in any corporation, partnership, limited
liability company, joint venture, association or other business entity (any of
the foregoing, an "Entity").
4.5 No Conflicts, Required Filings and Consents. Except as set forth on
Schedule 4.5 hereto, none of (i) the execution and delivery of this Agreement by
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Pantheon or the Pantheon Shareholders, (ii) the consummation by Pantheon and the
Pantheon Shareholders of the transactions contemplated hereby or (iii)
compliance by Pantheon with any of the provisions hereof will:
(a) conflict with or violate the Articles of Incorporation or Bylaws
of Pantheon;
(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to Pantheon or any of the
Pantheon Shareholders, or by which Pantheon or any of its properties or assets
may be bound or affected;
(c) result in a violation or breach of, or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under, or give to any other any right of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation, to which Pantheon is a party or by which
Pantheon or any of its properties or assets may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of Pantheon; or
(e) require any consent, waiver, license, approval, authorization,
order, permit, registration or filing with, or notification to (any of the
foregoing being a "Consent"), (i) any government or subdivision thereof, whether
domestic or foreign, or any administrative, governmental, or regulatory
authority, agency, commission, court, tribunal or body, whether domestic,
foreign or multinational (any of the foregoing, a "Governmental Entity"), except
for the filing of the Certificate of Merger pursuant to the DGCL and the GCL; or
(ii) any other individual or Entity (collectively, a "Person").
4.6 Financial Statements. Pantheon has heretofore furnished Parent with a
true and complete copy of the unaudited financial statements of Pantheon for the
partial year from incorporation through December 31, 1996, for the year ended
December 31, 1997, and for the six
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month period ended June 30, 1998 (all of the foregoing collectively herein
referred to as the "Pantheon Financial Statements"). The Pantheon Financial
Statements are internal statements that have not been prepared in accordance
with GAAP. The Pantheon Financial Statements present fairly, in all material
respects, the financial position and operating results of Pantheon as of the
dates, and during the periods, indicated therein. Pantheon used the cash basis
method of accounting consistently until March, 1998, when it changed to the
accrual basis.
4.7 Absence of Changes. Except as provided in Schedule 4.7 hereto and
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except as contemplated hereby, since June 30, 1998 (a) Pantheon has not entered
into any transaction that was not in the ordinary course of business; (b) except
for sales of services and licenses of software in the ordinary course of
business, there has been no sale, assignment, transfer, mortgage, pledge,
encumbrance or lease of any material asset or property of Pantheon; (c) there
has been (i) no declaration or payment of a dividend, or any other declaration,
payment or distribution of any type or nature to any shareholder of Pantheon in
respect of its stock, whether in cash or property, and (ii) no purchase or
redemption of any share of the capital stock of Pantheon; (d) there has been no
declaration, payment, or commitment for the payment, by Pantheon, of a bonus or
other additional salary, compensation, or benefit to any employee of Pantheon
that was not in the ordinary course of business, except for normal year-end
bonuses paid in the ordinary course of business; (e) there has been no release,
compromise, waiver or cancellation of any debt to or claim by Pantheon, or
waiver of any right of Pantheon; (f) there have been no capital expenditures in
excess of $10,000 for any single item, or $25,000 in the aggregate; (g) there
has been no change in accounting methods or practices or revaluation of any
asset of Pantheon (other than Pantheon Accounts Receivable as defined in Section
4.26 hereof written down in the ordinary course of business in excess of $10,000
for any single Pantheon Accounts Receivable, or $25,000 in the aggregate); (h)
there has been no material damage, or destruction to, or loss of, physical
property (whether or not covered by insurance) adversely affecting the Pantheon
Business or the operations of Pantheon; (i) there has been no loan by Pantheon,
or guaranty by Pantheon of any loan, to any employee of Pantheon; (j) Pantheon
has not ceased to transact business with any customer that, as of the date of
such cessation, represented more than 5% of the annual gross revenues of
Pantheon; (k) there has been no termination or resignation of any key employee
or officer of Pantheon, and to the knowledge of Pantheon, no such termination or
resignation is threatened; (l) there has been no amendment or termination of any
material oral or written contract, agreement or license related to the Pantheon
Business, to which Pantheon is a party or by which it is bound, except in the
ordinary course of business, or except as expressly contemplated hereby; (m)
Pantheon has not failed to satisfy any of its debts, obligations or liabilities
related to the Pantheon Business or the assets of Pantheon as the same become
due and owing (except for Pantheon Accounts Payable (as defined in Section 4.27
hereof) payable in accordance with past practices and in the ordinary course of
business); (n) there has been no agreement or commitment by Pantheon to do any
of the foregoing; and (o) there has been no other event or condition of any
character pertaining to and materially and adversely affecting the assets,
business or financial condition of Pantheon.
4.8 Undisclosed Liabilities. Except as set forth on Schedule 4.8 hereto,
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Pantheon has no debt, liability or obligation of any kind, whether accrued,
absolute or otherwise, including any liability or obligation on account of taxes
or any governmental charge or penalty, interest or fine, except (a) liabilities
incurred in the ordinary course of business after June 30, 1998, that would not,
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whether individually or in the aggregate, have a material adverse impact on the
business or financial condition of Pantheon; (b) liabilities reflected on the
Pantheon Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated hereby.
4.9 Title to Properties. Except as set forth on Schedule 4.9 hereto,
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Pantheon has good and marketable title to all tangible property and assets used
in the Pantheon Business, and good and valid title to its leasehold interests,
in each case, free and clear of any and all Liens other than Permitted Liens (as
defined in Section 10.11 hereof).
4.10 Equipment. Pantheon has heretofore furnished Parent with a true and
correct list of all items of tangible personal property (including computer
hardware) necessary for or used in the operation of the Pantheon Business in the
manner in which it has been and is now operated by Pantheon ("the Pantheon
Equipment"), except for personal property having a net book value of less than
$1,000. Except as set forth on Schedule 4.10 hereto, each material item of
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Pantheon Equipment is in good condition and repair, ordinary wear and tear
excepted.
4.11 Intellectual Property.
(a) Schedule 4.11 hereto contains a true and complete list of all
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material proprietary technology, patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service xxxx rights, and
copyrights (and all pending applications for any of the foregoing) used by
Pantheon in the conduct of the Pantheon Business (together with trade secrets
and know how used in the conduct of the Pantheon Business, the "Pantheon
Intellectual Property Rights"). To the knowledge of Pantheon and without
investigation, Pantheon owns, or is validly licensed or otherwise has the right
to use or exploit, as currently used or exploited, all of the Pantheon
Intellectual Property Rights, free of any obligation to make any payment
(whether of a royalty, license fee, compensation or otherwise). No claims are
pending or, to the knowledge of Pantheon, threatened, that Pantheon is
infringing or otherwise adversely affecting the rights of any Person with regard
to any Pantheon Intellectual Property Right. To the knowledge of Pantheon and
without investigation, no Person is infringing the rights of Pantheon with
respect to any Pantheon Intellectual Property Right. Neither Pantheon nor, to
the knowledge of Pantheon and without investigation, any employee, agent or
independent contractor of Pantheon, in connection with the performance of such
Person's services with Pantheon, has used, appropriated or disclosed, directly
or indirectly, any trade secret or other proprietary or confidential information
of any other Person, or otherwise violated any confidential relationship with
any other Person.
(b) Schedule 4.11 also contains a true and complete list of all
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material computer software used by Pantheon in the conduct of the Pantheon
Business (the "Pantheon Software"). Pantheon currently licenses, or otherwise
has the legal right to use, all of the Pantheon Software (including any upgrade,
alteration or enhancement with respect thereto), and all of the Pantheon
Software is being used in compliance with any applicable license or other
agreement.
4.12 Real Property. Except as set forth on Schedule 4.12 hereto:
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(a) Pantheon has a good and valid leasehold interest in all real
property (including all buildings, improvements and fixtures thereon) used in
the operation of the Pantheon Business (the "Pantheon Real Property"). Pantheon
owns no real property. Except for Permitted Liens, and for the items set forth
on Schedule 4.12, there are no Liens on Pantheon's interest in any of the
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Pantheon Real Property. Schedule 4.12 lists each county and state where any
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Pantheon Real Property is located, or where Pantheon has ever leased or owned
any real property.
(b) There are no parties in possession of any portion of the Pantheon
Real Property other than Pantheon, whether as sublessees, subtenants at will or
trespassers.
(c) To the knowledge of Pantheon and without investigation, there is
no law, ordinance, order, regulation or requirement now in existence or under
active consideration by any Governmental Entity, that would require, under the
provisions of any of the Pantheon Leases (as hereinafter defined), any material
expenditure by Pantheon to modify or improve any of the Pantheon Real Property
to bring it into compliance therewith.
4.13 Leases. Schedule 4.13 hereto sets forth a list of all leases
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pursuant to which Pantheon leases, as lessor or lessee, real or personal
property used in operating the Pantheon Business or otherwise (the "Pantheon
Leases"). Copies of the Pantheon Leases, all of which have previously been
provided to Parent, are true and complete copies thereof. All of the Pantheon
Leases are valid, binding and enforceable against Pantheon and, to the knowledge
of Pantheon, against the other parties thereto, in accordance with their
respective terms, and there is not under any such Pantheon Lease any existing
default by Pantheon, or, to the knowledge of Pantheon, by any other party
thereto, or any condition or event that, with notice or lapse of time or both,
would constitute a default. Pantheon has not received notice that the lessor of
any of the Pantheon Leases intends to cancel, suspend or terminate such Pantheon
Lease or to exercise or not exercise any option thereunder.
4.14 Contracts. Schedule 4.14 hereto sets forth a true and complete list
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of all contracts, agreements and commitments (whether written or oral) to which
Pantheon is a party (in its own name or as a successor in interest), or by which
it or any of its properties or assets is otherwise bound, including any service
agreements, customer agreements, supplier agreements, agreements to lend or
borrow money, shareholder agreements, employment agreements, agreements relating
to Pantheon Intellectual Property Rights and the like (collectively, the
"Pantheon Contracts"); excepting only those Pantheon Contracts which involve
less than $10,000 and are cancelable, without penalty, on no more than 90 days'
notice. Pantheon has not, through any agent, entered into any such contract,
agreement or commitment which, if Pantheon were a party thereto, would be
considered a Pantheon Contract. The aggregate value of all payment obligations
and rights to receive payments, under agreements, contracts and commitments
(whether oral or in writing) to which Pantheon is a party or by which it or any
of its properties or assets is otherwise bound, and that are not listed on
Schedule 4.14, is less than $50,000 (calculating such value by adding together
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the value of rights and obligations, and not by determining the net amount
thereof).
True and complete copies of all Pantheon Contracts (or a true and complete
narrative description of any oral Pantheon Contract) have previously been
provided to Parent. Neither
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Pantheon nor, to the knowledge of Pantheon, any other party to any of the
Pantheon Contracts (x) is in default under (nor does there exist any condition
that, with notice or lapse of time or both, would cause such a default under)
any of the Pantheon Contracts, or (y) has waived any right it may have under any
of the Pantheon Contracts, the waiver of which would have a material adverse
effect on the business, assets or financial condition or prospects of Pantheon.
All of the Pantheon Contracts constitute the valid and binding obligations of
Pantheon, enforceable in accordance with their respective terms, and, to the
knowledge of Pantheon, of the other parties thereto.
4.15 Directors and Officers. Schedule 4.15 hereto sets forth a list, as
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of the Closing Date, of the name of each director and officer of Pantheon and
the position(s) held by each.
4.16 Payroll Information. Pantheon has previously provided Parent with a
true and complete copy of the payroll report of Pantheon dated September 14,
1998, showing all current employees of Pantheon and their current levels of
compensation, other than bonuses and other extraordinary compensation, all of
which bonuses and other extraordinary compensation are set forth in Schedule
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4.16 hereto. Pantheon has paid all compensation required to be paid to employees
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of Pantheon on or prior to the date hereof other than compensation (and bonuses
pursuant to arrangements described in Schedule 4.16 hereto) accrued in the
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current pay period.
4.17 Litigation. Except as set forth on Schedule 4.17 hereto, there is no
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suit, action, claim, investigation or proceeding pending or, to the knowledge of
Pantheon, threatened against or affecting Pantheon or the Pantheon Business, nor
is there any judgment, decree, injunction or order of any applicable
Governmental Entity or arbitrator outstanding against Pantheon.
4.18 Employee Benefit Plans/Labor Relations.
(a) Except as disclosed in Schedule 4.18 hereto, there are no
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employee benefit plans, agreements or arrangements maintained by Pantheon,
including (i) "employee benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (ii)
current or deferred compensation, pension, profit sharing, vacation or severance
plans or programs; or (iii) medical, hospital, accident, disability or death
benefit plans (collectively, "Pantheon Benefit Plans"). To the knowledge of
Pantheon and without investigation, all Pantheon Benefit Plans are administered
in accordance with, and are in material compliance with, all applicable laws and
regulations, and no default exists with respect to the obligations of Pantheon
under any Pantheon Benefit Plan.
(b) Pantheon is not a party to any collective bargaining agreement;
no collective bargaining agent has been certified as a representative of any of
the employees of Pantheon; no representation campaign or election is now in
progress with respect to any employee of Pantheon; and there are no labor
disputes, grievances, controversies, strikes or requests for union
representation pending, or, to the knowledge of Pantheon, threatened, relating
to or affecting the Pantheon Business. To the knowledge of Pantheon, no event
has occurred that could give rise to any such dispute, controversy, strike or
request for representation.
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4.19 ERISA.
(a) To the knowledge of Pantheon and without investigation, all
Pantheon Benefit Plans that are subject to ERISA have been administered in
accordance with, and are in material compliance with, the applicable provisions
of ERISA. Each of the Pantheon Benefit Plans that is intended to meet the
requirements of Section 401(a) of the Code has been determined by the Internal
Revenue Service to meet such requirements within the meaning of such provision.
No Pantheon Benefit Plan is subject to Title IV of ERISA or Section 412 of the
Code. Pantheon has not engaged in any nonexempt "prohibited transactions," as
such term is defined in Section 4975 of the Code or Section 406 of ERISA,
involving Pantheon Benefit Plans that would subject Pantheon to the penalty or
tax imposed under Section 502(i) of ERISA or Section 4975 of the Code. Pantheon
has not engaged in any transaction described in Section 4069 of ERISA within the
last five years. Except as disclosed in Schedule 4.19 hereto or pursuant to the
-------------
terms of the Pantheon Benefit Plans, neither the execution and delivery hereof
nor the consummation of the transactions contemplated hereby will (i) result in
any payment (including severance, unemployment compensation or golden parachute)
becoming due to any director or other employee of Pantheon, (ii) increase any
benefit otherwise payable under any Pantheon Benefit Plan or (iii) result in the
acceleration of the time of payment or vesting of any such benefit to any
extent.
(b) No notice of a "reportable event," within the meaning of Section
4043 of ERISA, for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Pantheon Benefit Plan that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA and that is
intended to meet the requirements of Section 401(a) of the Code, or by any
entity that is considered one employer with Pantheon under Section 4001 of ERISA
or Section 414 of the Code, within the 12-month period ending on the Closing
Date. Pantheon has not incurred any liability to the Pension Benefit Guaranty
Corporation in respect of any Pantheon Benefit Plan that remains unpaid.
4.20 Taxes.
(a) Except as set forth on Schedule 4.20 hereto, Pantheon has duly
-------------
and timely filed all federal, state and local income, franchise, excise, real
and personal property and other tax returns and reports, including extensions,
required to have been filed by Pantheon on or prior to the Closing Date.
Pantheon has duly and timely paid all taxes and other governmental charges, and
all interest and penalties with respect thereto, required to be paid by Pantheon
(whether by way of withholding or otherwise) to any federal, state, local or
other taxing authority (except to the extent the same are being contested in
good faith, and adequate reserves therefor have been provided in the Pantheon
Financial Statements). As of the Closing Date, all deficiencies proposed as a
result of any audit have been paid or settled.
(b) Pantheon is not a party to, or bound by, or otherwise in any way
obligated under, any tax sharing or similar agreement.
(c) Pantheon has not consented to have the provisions of Section
341(f)(2) of the Code (or comparable state law provisions) apply to it, and
Pantheon has not agreed or been
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requested to make any adjustment under Section 481(c) of the Code by reason of a
change in accounting method or otherwise.
4.21 Compliance with Applicable Laws. Pantheon holds all material permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary to own, lease or operate all of the assets and properties of
Pantheon, as appropriate, and to carry on the Pantheon Business as now conducted
(the "Pantheon Permits"). To the knowledge of Pantheon, Pantheon is in material
compliance with all applicable laws, ordinances and regulations and the terms of
the Pantheon Permits. Except as set forth on Schedule 4.21 hereto, all of the
-------------
Pantheon Permits are fully assignable by Pantheon in connection with the Merger.
Schedule 4.21 sets forth a true and complete list of all Pantheon Permits, true
-------------
and complete copies of which have previously been provided to Parent.
4.22 Board of Directors/Shareholder Consent. Both the Board of Directors of
Pantheon and the Pantheon Shareholders have adopted and approved this Agreement
and the transactions contemplated hereby (including the Merger).
4.23 Brokers. Except as set forth on Schedule 4.23 hereto, no broker or
-------------
finder is entitled to any broker's or finder's fee or other commission in
connection with the transactions contemplated hereby as a result of arrangements
made by or on behalf of Pantheon.
4.24 Environmental Matters.
(a) To the knowledge of Pantheon and without investigation, no real
property currently or formerly owned or operated by Pantheon is contaminated
with any Hazardous Substance (as hereinafter defined).
(b) Pantheon is not a party to any litigation or administrative
proceeding nor, to the knowledge of Pantheon and without investigation, is any
litigation or administrative proceeding threatened against it, that, in either
case, asserts or alleges that Pantheon (i) violated any Environmental Law (as
hereinafter defined); (ii) is required to clean up, remove or take remedial or
other responsive action due to the disposal, deposit, discharge, leak or other
release of any Hazardous Substance; or (iii) is required to pay all or a portion
of the cost of any past, present or future cleanup, removal or remedial or other
action that arises out of or is related to the disposal, deposit, discharge,
leak or other release of any Hazardous Substance.
(c) To the knowledge of Pantheon and without investigation, there are
not now nor have there previously been tanks or other facilities on, under, or
at any real property owned, leased, used or occupied by Pantheon containing
materials that, if known to be present in soil or ground water, would require
cleanup, removal or other remedial action under Environmental Law.
(d) To the knowledge of Pantheon and without investigation, Pantheon
is not subject to any judgment, order or citation related to or arising out of
any Environmental Law and has not been named or listed as a potentially
responsible party by any Governmental Entity in a matter related to or arising
out of any Environmental Law.
-12-
(e) For purposes hereof, (i) the term "Environmental Law" means any
federal, state or local law (including statutes, regulations, ordinances, codes,
rules, judicial opinions and other governmental restrictions and requirements)
relating to the discharge of air pollutants, water pollutants, noise, odors or
process waste water, or otherwise relating to the environment or hazardous or
toxic substances; and (ii) the term "Hazardous Substance" means any toxic or
hazardous substance that is regulated by or under authority of any Environmental
Law, including any petroleum products, asbestos or polychlorinated biphenyls.
4.25 Interest in Customers, Suppliers and Competitors. Except as provided
in Schedule 4.25 hereto, no officer, director, shareholder or employee of
-------------
Pantheon and no family member (including a spouse, parent, sibling or lineal
descendent of any of the foregoing), has any direct or indirect material
interest in any material customer, supplier or competitor of Pantheon, or in any
Person from whom or to whom Pantheon leases any real or personal property, or in
any other Person with whom Pantheon is doing business whether directly or
indirectly (including as a debtor or creditor), whether in existence as of the
Closing Date or proposed, other than the ownership of stock of publicly traded
corporations.
4.26 Accounts Receivable. All accounts, notes, contracts and other
receivables of Pantheon (collectively, "Pantheon Accounts Receivable") were
acquired by Pantheon in the ordinary course of business arising from bona fide
transactions. There are no set-offs, counterclaims or disputes asserted with
respect to any Pantheon Accounts Receivable that would result in claims in
excess of the reserve for bad debts set forth on the Pantheon Financial
Statements and, to the knowledge of Pantheon and subject to such reserve, all
Pantheon Accounts Receivable are collectible in full. Pantheon has previously
provided Parent with a true and complete aging report prepared as of August 31,
1998 which shows the time elapsed since invoice date for all Pantheon Accounts
Receivable as of such date.
4.27 Accounts Payable. All material accounts, notes, contracts and other
amounts payable of Pantheon (collectively, "Pantheon Accounts Payable") are
currently within their respective terms, and are neither in default nor
otherwise past due by more than 90 days. Pantheon has previously provided Parent
with a true and complete aging report prepared as of August 31, 1998 which shows
the time elapsed since invoice date for all Pantheon Accounts Payable as of such
date.
4.28 Insurance. Pantheon currently maintains, in full force and effect,
all insurance policies that are required to be maintained for the conduct of the
Pantheon Business or the ownership of Pantheon's property (both real and
personal) (collectively, the "Pantheon Insurance Policies"). The Pantheon
Insurance Policies are listed on Schedule 4.28 hereto, and true and complete
-------------
copies of all Pantheon Insurance Policies have previously been provided to
Parent. Pantheon (a) to its knowledge and without investigation, is not in
default regarding the provisions of any Pantheon Insurance Policy; (b) has paid
all premiums due thereunder; and (c) has not failed to present any notice or
material claim thereunder in a due and timely fashion.
-13-
4.29 Bankruptcy. Pantheon has not filed a petition or request for
reorganization or protection or relief under the bankruptcy laws of the United
States or any state or territory thereof, made any general assignment for the
benefit of creditors, or consented to the appointment of a receiver or trustee,
including a custodian under the United States bankruptcy laws, whether such
receiver or trustee is appointed in a voluntary or involuntary proceeding.
4.30 Pantheon Debt. As of the date hereof, the Pantheon Debt is $-0-.
4.31 Investment Purpose; Accredited Investors or Purchaser representative.
(a) Each Pantheon Shareholder receiving Parent Stock in the Merger represents
that he (i) is acquiring the Parent Stock solely for his own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof; and (ii) will not, directly or indirectly, offer,
transfer, sell, pledge, hypothecate or otherwise dispose of any Parent Stock (or
solicit any offers to buy, purchase or otherwise acquire or take a pledge of any
such shares) except in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations thereunder, other
applicable laws, rules and regulations, and the Second Amended and Restated
Stockholders' Agreement of Parent, dated December 17, 1997 (the "Stockholders'
Agreement"); (b) Each of the Pantheon Shareholders further represents that he is
an "accredited investor" as such term is defined in Rule 501 of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act;
and (c) Xxxxx Xxxxxx further represents that (i) Xxxxxx Xxxxxxx is his Purchaser
representative (the "Purchaser representative") as such term is defined in Rule
501 of Regulation D under the Securities Act; and (ii) the Purchaser
representative (A) is not an affiliate, director, officer or other employee of
Parent, or beneficial owner of 10% or more of any class of the equity securities
of, or 10% or more of the equity interest in, Parent; (B) has such knowledge and
experience in financial and business matters that he is capable of evaluating,
alone, or together with such Pantheon Shareholder, the merits and risks of the
prospective investment in Parent Stock; (C) has been acknowledged by such
Pantheon Shareholder in writing, during the course of the Merger, to be his
purchaser representative in connection with evaluating the merits and risks of
the prospective investment in Parent Stock; and (D) has disclosed to such
Pantheon Shareholder in writing a reasonable time prior to the Closing any
material relationship between the Purchaser representative or his affiliates and
Parent or its affiliates that exists, is mutually understood to be contemplated,
or has existed at any time during the previous two years, and any compensation
received or to be received as a result of such relationship.
4.32 Restrictions on Transfer. Each Pantheon Shareholder receiving Parent
Stock in the Merger acknowledges that (a) the Parent Stock received by him
hereunder has not been registered under the Securities Act; (b) the Parent Stock
may be required to be held indefinitely, and he must continue to bear the
economic risk of the investment in such shares unless such shares are
subsequently registered under the Securities Act or an exemption from such
registration is available; (c) there may not be any public market for the Parent
Stock in the foreseeable future; (d) Rule 144 promulgated under the Securities
Act is not presently available with respect to sales of any securities of
Parent, and such Rule is not anticipated to be available in the foreseeable
future; (e) when and if Parent Stock may be disposed of without registration in
reliance upon Rule 144, such disposition can be made only in limited amounts and
in accordance with the terms and conditions of such Rule; (f) if the exemption
afforded by Rule 144 is not available, public sale
-14-
without registration will require the availability of an exemption under the
Securities Act; (g) the Parent Stock is subject to the terms and conditions of
the Stockholders' Agreement; (h) restrictive legends shall be placed on the
certificates representing Parent Stock; and (i) a notation shall be made in the
appropriate records of Parent indicating that Parent Stock is subject to
restrictions on transfer and, if Parent should in the future engage the services
of a stock transfer agent, appropriate stop-transfer instructions will be issued
to such transfer agent with respect to Parent Stock.
4.33 Ability to Bear Risk; Access to Information; Sophistication. (a)
Each Pantheon Shareholder receiving Parent Stock in the Merger represents and
warrants that (i) his financial situation is such that he can afford to bear the
economic risk of holding Parent Stock acquired by him hereunder for an
indefinite period; and (ii) he can afford to suffer the complete loss of such
Parent Stock; (b) Each of the Pantheon Shareholders further represents that (i)
he has been granted the opportunity to ask questions of, and receive answers
from, representatives of Parent concerning the terms and conditions of the
Parent Stock and to obtain any additional information that he deems necessary;
(ii) his knowledge and experience in financial business matters is such that he
is capable of evaluating the merits and risk of ownership of the Parent Stock;
(iii) he has carefully reviewed the terms of the Stockholders' Agreement and has
evaluated the restrictions and obligations contained therein; and (iv) he (A)
has reviewed the Private Placement Memorandum of Parent dated as of September 8,
1998, as amended (the "Memorandum"); (B) has carefully examined the Memorandum
and has had an opportunity to ask questions of, and receive answers from,
representatives of Parent, and to obtain additional information concerning
Parent and its Subsidiaries (as hereinafter defined); and (C) does not require
additional information regarding Parent or its Subsidiaries in connection with
the Merger; and (c) Xxxxx Xxxxxx further represents that, either alone or with
the Purchaser representative, (i) he has been granted the opportunity to ask
questions of, and receive answers from, representatives of Parent concerning the
terms and conditions of the Parent Stock and to obtain any additional
information that he deems necessary; (ii) his knowledge and experience in
financial business matters is such that he is capable of evaluating the merits
and risk of ownership of the Parent Stock; (iii) he has carefully reviewed the
terms of the Stockholders' Agreement and has evaluated the restrictions and
obligations contained therein; and (iv) he (A) has reviewed the Memorandum; (B)
has carefully examined the Memorandum and has had an opportunity to ask
questions of, and receive answers from, representatives of Parent, and to obtain
additional information concerning Parent and its Subsidiaries; and (C) does not
require additional information regarding Parent or its Subsidiaries in
connection with the Merger.
4.34 Disclosure. No representation or warranty of Pantheon or any
Pantheon Shareholder herein (including the schedules hereto), and no certificate
or affidavit furnished or to be furnished by or on behalf of Pantheon or any
Pantheon Shareholder to Parent, Sub or their agents in connection herewith,
contains or will, at the time it is made, contain any untrue statement of a
material fact or omits or will, at the time it is made, omit to state a material
fact necessary in order to make the statements herein or therein contained not
misleading.
4.35 Nature of Liabilities. Any unpaid legal, accounting or other fees of
Pantheon are solely and directly related to the Merger.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Each of Parent and Sub jointly and severally represents and warrants to
Pantheon and the Pantheon Shareholders, which representations and warranties
shall survive the Closing in accordance with Section 10.1 hereof, as follows:
5.1 Organization and Qualification. Each of Parent and its Subsidiaries
(as defined in Section 10.11 hereof) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
Each of Parent and its Subsidiaries has the requisite corporate power and
authority to carry on its business as it is now being conducted and is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary. Complete and
correct copies of the Certificates of Incorporation and Bylaws of Parent and Sub
as in effect on the date hereof are attached, respectively, to a closing
certificate and incumbency certificate, substantially in the form of Exhibit "C"
----------
hereto ("Parent's Closing Certificate"), and to Sub's Closing Certificate.
5.2 Authority. Each of Parent and Sub has the necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by each of Parent and Sub
have been duly and validly authorized and approved by their respective board of
directors and by Sub's sole shareholder, and no other corporate or shareholder
proceedings on the part of either Parent or Sub, or their respective board of
directors or shareholders, are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Parent and Sub, and assuming the due
authorization, execution and delivery by Pantheon and the Pantheon Shareholders,
constitutes the valid and binding obligation of each of Parent and Sub,
enforceable against each of Parent and Sub in accordance with its terms,
subject, in each case, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general application relating to or affecting creditors' rights
and to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing.
5.3 No Conflicts, Required Filings and Consents. Except as set forth on
Schedule 5.3 hereto, none of the execution and delivery of this Agreement by
------------
Parent or Sub, the consummation by Parent and Sub of the transactions
contemplated hereby, or compliance by Parent and Sub with any of the provisions
hereof, will:
(a) conflict with or violate the Certificate of Incorporation or
Bylaws of Parent or Sub, or the organizational documents of any other
Subsidiaries;
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(b) result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to Parent or its Subsidiaries,
or by which Parent, any of its Subsidiaries, or their respective properties or
assets may be bound or affected;
(c) result in a violation or breach of, or constitute a default (or
an event that, with notice or lapse of time or both, would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which Parent, any of its Subsidiaries or their respective properties
may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of Parent or any of its Subsidiaries; or
(e) require any Consent of (i) any Governmental Entity (except for
(x) compliance with any applicable requirements of any applicable securities
laws, and (y) the filing of the Certificate of Merger pursuant to the DGCL and
the GCL); or (ii) any other Person.
5.4 Litigation. Except as set forth on Schedule 5.4 hereto, there is no
------------
suit, action, claim, investigation or proceeding pending or, to the knowledge of
Parent, threatened against or affecting Parent or its Subsidiaries, nor is there
any judgment, decree, injunction or order of any applicable Governmental Entity
or arbitrator outstanding against Parent or its Subsidiaries that, either
individually or in the aggregate, would have a material adverse effect on the
assets, business or financial condition of Parent and its Subsidiaries, taken as
a whole.
5.5 Brokers. Except as disclosed on Schedule 5.5 hereto, no broker or
------------
finder is entitled to any broker's or finder's fee in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
Parent or Sub.
5.6 Parent Stock.
(a) As of the date hereof the authorized capital stock of Parent
consists of (i) (A) 75,000,000 shares of Class A Common Stock, $.01 par value,
of which no shares are validly issued and outstanding, and (B) 100,000,000
shares of Class B Common Stock, $.01 par value, of which 14,053,489 shares are
validly issued and outstanding (without taking into account any shares of Parent
Stock to be issued pursuant hereto, and excluding the potential acquisitions of
Two-Way Communications, L.L.C., Pequot Systems, Inc., Ionix Development
Corporation and NetResponse L.L.C.), fully paid and nonassessable; (ii) 750,000
shares of blank check preferred stock, (A) 250,000 of which have been designated
as Class A Convertible Preferred Stock, of which 176,291 shares are validly
issued and outstanding, fully paid and nonassessable, (B) 200,000 of which have
been designated as Class B Convertible Preferred Stock, of which 98,767 shares
are validly issued and outstanding, fully paid and nonassessable, (C) 15,000 of
which have been designated as Class C Convertible Preferred Stock, of which
9,232 shares are validly issued and outstanding, fully paid and nonassessable
and (D) 50,000 of which have been designated as Class D Nonvoting Preferred
Stock, of which 35,700 shares are validly issued and outstanding, fully paid and
nonassessable..
-17-
Except as set forth on Schedule 5.6 hereto, there are no options, warrants,
------------
calls, agreements, commitments or other rights presently outstanding that would
obligate Parent to issue, deliver or sell shares of its capital stock, or to
grant, extend or enter into any such option, warrant, call, agreement,
commitment or other right (excluding the same potential acquisitions as referred
to above). In addition to the foregoing, as of the Closing Date, Parent has no
bonds, debentures, notes or other indebtedness issued or outstanding that have
voting rights in Parent.
(b) When delivered to the Pantheon Shareholders in accordance with
the terms hereof, the Parent Stock will be (i) duly authorized, fully paid and
nonassessable, and (ii) free and clear of all Liens other than restrictions
imposed by the Stockholders' Agreement and by federal and state securities laws.
5.7 Subsidiaries. Except as set forth on Schedule 5.7 hereto, Parent has
------------
no subsidiaries and does not otherwise own or control, directly or indirectly,
any equity interest in, or any security convertible into an equity interest in,
any Entity. Schedule 5.7 lists the name of each of the Subsidiaries of Parent,
------------
and indicates their respective jurisdictions of incorporation.
5.8 Financial Statements. Parent has heretofore furnished Pantheon with a
true and complete copy of (a) the audited financial statements of iXL
Interactive Excellence, Inc. (n/k/a iXL, Inc.) for the years ended December 31,
1993, 1994 and 1995, and for the four month period ended April 30, 1996; (b) the
audited combined financial statements for Creative Video, Inc. (n/k/a iXL,
Inc.), Creative Video Library, Inc. and Entrepreneur Television, Inc. for the
years ended December 31, 1993, 1994 and 1995, and for the four month period
ended April 30, 1996; (c) the audited consolidated financial statements for
Parent and its Subsidiaries for the eight months ended December 31, 1996 and for
the year ended December 31, 1997; and (d) the unaudited consolidated financial
statements for Parent and its Subsidiaries for the six month period ended June
30, 1998 (all of the foregoing, collectively, "Parent Financial Statements").
The Parent Financial Statements present fairly in all material respects the
consolidated financial position, results of operations, shareholders' equity and
cash flow of Parent at the respective dates or for the respective periods to
which they apply. Except as disclosed therein, such statements and related notes
have been prepared in accordance with GAAP consistently applied throughout the
periods involved (except, in the case of the unaudited financial statements, for
the exclusion of footnotes and normal year-end adjustments).
5.9 Undisclosed Liabilities. Except as set forth on Schedule 5.9 hereto,
------------
neither Parent nor any of its Subsidiaries has any debt, liability or obligation
of any kind, whether accrued, absolute or otherwise, including any liability or
obligation on account of taxes or any governmental charges or penalties,
interest or fines, except (a) liabilities incurred in the ordinary course of
business after June 30, 1998 that would not, whether individually or in the
aggregate, have a material adverse impact on the business or financial condition
of Parent and its Subsidiaries, taken as a whole; (b) liabilities reflected on
the Parent Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated hereby.
5.10 Compliance with Applicable Laws. Parent or its Subsidiaries hold all
material permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities
-18-
necessary to own, lease or operate all of the assets and properties of Parent
and its Subsidiaries, as appropriate, and to carry on Parent's business as now
conducted (the "Parent Permits"). To the knowledge of Parent, Parent and its
Subsidiaries are in material compliance with all applicable laws, ordinances and
regulations and the terms of the Parent Permits.
5.11 Board of Directors/Shareholder Consent. The board of directors of
Parent, and both the board of directors and shareholder of Sub, have, by
unanimous written consent or other action, adopted and approved this Agreement
and the transactions contemplated hereby (including the Merger).
5.12 Bankruptcy. Neither Parent nor any of its Subsidiaries has filed a
petition or request for reorganization or protection or relief under the
bankruptcy laws of the United States or any state or territory thereof, made any
general assignment for the benefit of creditors, or consented to the appointment
of a receiver or trustee, including a custodian under the United States
bankruptcy laws, whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
5.13 Absence of Changes. Except as provided in Schedule 5.13 hereto,
-------------
since June 30, 1998, there has not been (a) any transaction, commitment, dispute
or other event or condition (financial or otherwise) of any character (whether
or not in the ordinary course of business) individually or in the aggregate that
has had, or would reasonably be expected to have, a material adverse effect on
the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of Parent and its Subsidiaries, taken as a
whole; (b) any damage, destruction or loss, whether or not covered by insurance,
which has had, or would reasonably be expected to have, a material adverse
effect on the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of Parent and its Subsidiaries, taken as a
whole; (c) any entry into any commitment or transaction material to Parent and
its Subsidiaries, taken as a whole (including any borrowing or sale of assets)
except in the ordinary course of business consistent with past practice; (d) any
declaration, setting aside or payment of any dividend or distribution (whether
in cash, stock or property) with respect to Parent's capital stock; (e) any
material change in Parent's accounting principles, practices or methods; (f) any
split, combination or reclassification of any of Parent's capital stock, or the
issuance or authorization of any issuance of any other securities in respect of,
in lieu of or in substitution for, shares of Parent's capital stock; or (g) any
agreement (whether or not in writing), arrangement or understanding to do any of
the foregoing.
5.14 Taxes. Parent and its Subsidiaries have duly and timely filed all
federal, state and local income, franchise, excise, real and personal property
and other tax returns and reports, including extensions, required to have been
filed by Parent and its Subsidiaries on or prior to the Closing Date. Parent
and its Subsidiaries have duly and timely paid all taxes and other governmental
charges, and all interest and penalties with respect thereto, required to be
paid by Parent and its Subsidiaries (whether by way of withholding or otherwise)
to any federal, state, local or other taxing authority (except to the extent the
same are being contested in good faith, and adequate reserves therefor have been
provided in the applicable Parent Financial Statement).
-19-
As of the Closing Date, all deficiencies proposed as a result of any audits have
been paid or settled.
5.15 Disclosure. No statement of fact by Parent or Sub contained herein
and no written statement of fact furnished or to be furnished by Parent or Sub
to Pantheon in connection herewith contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements herein or therein contained not misleading.
5.16 Section 368 of the Code.
(a) At all times prior to the Merger, Parent has owned all of the
outstanding equity interests in Sub (including rights to acquire an equity
interest in Sub, if any). Accordingly, both prior to and immediately after the
Merger, Parent will be in control of Sub within the meaning of Section 368(c) of
the Code. "Control" for these purposes means the ownership of stock possessing
at least eighty percent (80%) of the total combined voting power of all classes
of stock entitled to vote and at least eighty percent (80%) of the total number
of shares of each class of nonvoting stock. Following the Merger, Parent has no
plan or intention to cause Sub to issue additional equity interests that would
result in Parent losing "Control," as defined above, of Sub.
(b) After the Merger, Parent will own 100% of the outstanding equity
interest in Sub (including the right to acquire such an equity interest). Parent
has no plan or intention to liquidate Sub, to merge Sub with or into another
operation (including Parent), to sell, transfer ownership, or otherwise dispose
of or transfer any portion of its stock or assets (including those assets
acquired from Pantheon) to any person or entity (including Parent), except for
dispositions made in the ordinary course of business or transfers of assets to a
corporation controlled by Sub (including payments to dissenters ("Permissible
Transfers").
(c) Parent intends that, following the Merger, it will cause Sub
either to continue Pantheon's historic business or to continue to use a
significant portion of Pantheon's historic business assets in a business;
provided, however, to the extent that the business or assets of Pantheon are
subject to a Permissible Transfer, Parent intends that the transferee will
continue the historic business of Pantheon or use a significant portion of
Pantheon's assets in a business.
(d) Neither Parent nor Sub is an "investment company" as defined in
Section 368(a)(2)(F)(ii) and (iv) of the Code.
(e) Neither Parent nor Sub is under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368 (a)(3)(A) of the
Code.
(f) Parent has no knowledge of any reason, fact or circumstance
which would cause the Merger to fail to qualify as a tax-free reorganization
under Section 368 of the Code; provided, however, that Parent has not considered
for this purpose any information regarding Pantheon furnished by or on behalf of
Pantheon to Parent or its advisors.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Conduct of Business by Pantheon Pending the Merger. From and after
the date hereof, prior to the Effective Time, except as contemplated hereby,
unless Parent shall otherwise agree in writing, Pantheon shall carry on its
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, use reasonable efforts to preserve intact its
present business organization, keep available the services of its employees and
preserve its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with Pantheon to the end that
its goodwill and on-going businesses shall not be impaired in any material
respect at the Effective Time. Without limiting the generality of the foregoing,
and except as contemplated hereby, unless Parent shall otherwise agree in
writing, prior to the Effective Time, Pantheon shall not, directly or
indirectly:
(a) (i) declare, set aside, or pay any dividend on, or make any other
distribution in respect of, any of its capital stock, (ii) split, combine or
reclassify any of its capital stock, or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for, shares of its
capital stock, or (iii) purchase, redeem or otherwise acquire, any share of
capital stock of Pantheon or any other equity security thereof or any right,
warrant, or option to acquire any such share or other security;
(b) issue, deliver, sell, pledge or otherwise encumber any share of
its capital stock, any other voting security issued by Pantheon or any security
convertible into, or any right, warrant or option to acquire any such share or
voting security;
(c) amend its Articles of Incorporation, Bylaws or other comparable
organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other manner,
any business or any Entity or division thereof, or (ii) any assets that are
material, individually or in the aggregate, to Pantheon;
(e) subject to a Lien or sell, lease or otherwise dispose of any of
its properties or assets;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person or issue or sell any debt security of Pantheon,
guarantee any debt security of another Person or enter into any "keep well" or
other agreement to maintain the financial condition of another Person, make any
loan, advance or capital contribution to, or investment in, any other Person, or
settle or compromise any material claim or litigation; or
(g) authorize any of, or commit or agree to take any of, the
foregoing actions.
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6.2 Access to Information. From the date hereof through the Effective
Time, Pantheon shall afford to Parent and Parent's accountants, counsel and
other representatives reasonable access during normal business hours (and at
such other times as the parties may mutually agree) upon reasonable prior notice
and approval of Pantheon, which shall not be unreasonably withheld, to its
properties, books, contracts, commitments, records and personnel and, during
such period, shall furnish promptly to Parent all information concerning its
business, properties and personnel as Parent may reasonably request. Parent and
its accountants, counsel and other representatives shall, in the exercise of the
rights described in this Section 6.2, not unduly interfere with the operation of
the business of Pantheon.
6.3 Filings; Tax Elections. Pantheon shall promptly provide Parent with
copies of all filings made by Pantheon with any Governmental Entity in
connection herewith and the transactions contemplated hereby. Pantheon shall,
before settling or compromising any material income tax liability of Pantheon,
consult with Parent and its advisors as to the positions and elections that will
be taken or made with respect to such matter.
6.4 Public Announcements. The parties agree that, except as may otherwise
be required to comply with applicable laws and regulations (including applicable
securities laws) or to obtain consents required hereunder, public disclosure of
the transactions contemplated hereby shall be made only upon or after the
consummation of the Merger. Any such disclosure shall be coordinated by Parent,
and none of the Pantheon Shareholders shall make any such disclosure without the
prior written consent of Parent.
6.5 Transfer and Gains Taxes and Certain Other Taxes and Expenses. Parent
agrees that, to the extent it is legally able to do so, the Surviving
Corporation will pay all real property transfer, gains and other similar taxes
and all documentary stamps, filing fees, recording fees and sales and use taxes,
if any, and any penalties or interest with respect thereto, payable in
connection with consummation of the Merger.
6.6 State Tax Assumption. Pantheon shall, prior to the Effective Time,
have obtained a tax clearance certificate (the "Tax Clearance Certificate") from
the California Franchise Tax Board ("FTB") and, in that connection, shall
execute, and deliver to the FTB, a corporate assumption of tax liability ("State
Tax Assumption"). Sub agrees to enter into an Assumption Agreement with Xxxx
Parent, substantially in the form of Exhibit "D" hereto, whereby Sub will assume
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the State Tax Assumption ("Assumption Agreement").
6.7 Options.
(a) Pantheon hereby covenants and agrees that at the Effective Time,
all of the Pantheon Stock Rights (all of which are set forth on Schedule 4.3(a)
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hereto) shall have been properly canceled and, except for the right to receive
options or warrants to acquire Parent Stock described in Section 6.7(b) below,
all rights and obligations thereunder shall have been terminated.
(b) Parent hereby covenants and agrees that, at the Effective Time,
each of the holders of Pantheon Stock Rights shall receive options to purchase
the number of shares of validly
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issued, fully paid and nonassessable Parent Stock, at the exercise price per
share, as set forth on Schedule 6.7(b) hereto, all of which options ("Options")
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shall have been issued pursuant to the IXL Holdings, Inc. 1996 Stock Option
Plan, as amended (the "Parent Stock Option Plan"). With respect to a Pantheon
option that was intended to qualify as an incentive stock option under Section
422 of the Code, the corresponding Option under the Parent Stock Option Plan
shall also be intended to qualify as an incentive stock option under Section 422
of the Code, and the option price, the number of shares purchasable pursuant to
such Option and the terms and conditions of exercise of such Option will be
determined in accordance with Section 424(a) of the Code. To the extent that the
underlying Pantheon options were vested, so will be the Parent Options. If any
Option recipient leaves Sub's (or Parent's ) employ prior to full vesting of his
or her Options in accordance with the terms of the award thereof, and therefore
the unvested portion of the Options is cancelled, then options on the number of
shares of Parent Stock subject to such cancellation, and corresponding as to
exercise price and vesting, will be issued to the Pantheon Shareholders, pro
rata in proportion to their respective ownership of Pantheon Stock, without the
payment of any additional consideration therefor.
6.8 Further Assurances. From time to time after the Effective Time, upon
the reasonable request of any party hereto, the other party or parties hereto
shall execute and deliver or cause to be executed and delivered such further
instruments, and take such further action, as the requesting party may
reasonably request in order to effectuate fully the purposes, terms and
conditions hereof.
6.9 Purchaser Representative. With respect to Xxxxx Xxxxxx, (a) the
Purchaser representative shall furnish to Parent, to Parent's satisfaction, a
completed Purchaser Representative Questionnaire, substantially in the form of
Exhibit "F" hereto; and (b) Xxxxx Xxxxxx shall furnish to Parent a signed
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Purchaser Acknowledgment in connection therewith.
6.10 Section 368 Reporting. Each of Parent, Surviving Corporation and the
Pantheon Shareholders will use their commercially reasonable best efforts to
cause the Merger to be treated as a tax free reorganization within the meaning
of Section 368(a) of the Code. Accordingly, to the extent permitted under
applicable tax laws, including statutory, regulatory and judicial authority,
each party will report the Merger as a reorganization within the meaning of
Section 368(a) of the Code in all federal, state and local tax returns after the
Effective Date.
6.11 Employment Terms. Each of the Pantheon Shareholders shall receive an
offer of employment, either in oral or written form, reasonably satisfactory to
such Pantheon Shareholder.
6.12 COBRA Continuation Coverage. Parent and Sub shall use commercially
reasonable best efforts to make available for purchase continuation health
coverage for those Pantheon employees who terminate employment and lose health
care coverage between September 2, 1998 and the date of the Merger. Payment for
any coverage made available under this Section shall be the sole responsibility
of the terminated Pantheon employee(s).
ARTICLE VII
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CONDITIONS PRECEDENT
7.1 Conditions to Obligation of Pantheon and the Pantheon Shareholders to
Effect the Merger. The obligations of Pantheon and the Pantheon Shareholders to
effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) Parent and Sub shall have performed in all material respects
their respective agreements contained herein required to be performed at or
prior to the Effective Time, and the representations and warranties of Parent
and Sub contained herein shall be true when made and (except for representations
and warranties made as of a specified date, which need only be true as of such
date) at and as of the Effective Time as if made at and as of such time, except
as contemplated hereby;
(b) (i) the appropriate officers of Parent shall have executed and
delivered to Pantheon at the Closing, Parent's Closing Certificate, and (ii) the
appropriate officers of Sub shall have executed and delivered to Pantheon at the
Closing, Sub's Closing Certificate;
(c) Parent shall have obtained all of the Consents, if any, listed on
Schedule 7.1(c) hereto;
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(d) Pantheon shall have received corporate certificates of good
standing for Parent and Sub, and a copy of the Certificate of Incorporation for
Parent and Sub, respectively, both as certified by the Secretary of State of
Delaware;
(e) there shall have been delivered to each of the Pantheon
Shareholders at the Closing, duly executed by Parent, an Agreement to be Bound
to the Registration Rights Agreement of Parent, dated as of Closing Date (the
"Agreement to be Bound to the Registration Rights Agreement"), in the form of
Exhibit "G" hereto;
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(f) Parent shall have executed and delivered at the Closing an Option
Agreement in the form of Exhibit "H" hereto for each of the Persons listed on
-----------
Schedule 6.7(b) hereto as receiving options to purchase Parent Stock at that
---------------
time;
(g) Pantheon shall have received, at the Closing, a duly executed
opinion of counsel to Parent and Sub, substantially in the form of Exhibit "I"
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hereto;
(h) Pantheon shall have received the Tax Clearance Certificate from
the FTB, and Sub shall have executed and delivered at the Closing the Assumption
Agreement;
(i) Pantheon shall have received from Parent and Sub such other
documents as Pantheon's counsel shall have reasonably requested, in form and
substance reasonably satisfactory to Pantheon's counsel; and
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(j) Since the date hereof and until the Closing Date, there shall not
have occurred any event or condition of any character that has adversely
affected in any material respect or could reasonably be expected to affect
adversely in any material respect (i) the business or business prospects or the
financial condition of Parent and its Subsidiaries, taken as a whole, or (ii)
Sub's ability to operate the business of Pantheon.
7.2 Conditions to Obligations of Parent and Sub to Effect the Merger. The
obligations of Parent and Sub to effect the Merger shall be subject to the
fulfillment, at or prior to the Effective Time, of the following conditions:
(a) Pantheon and the Pantheon Shareholders shall have performed in
all material respects their respective agreements contained herein required to
be performed at or prior to the Effective Time, and the representations and
warranties of Pantheon and the Pantheon Shareholders contained herein shall be
true when made and (except for representations and warranties made as of a
specified date, which need only be true as of such date) at and as of the
Effective Time as if made at and as of such time, except as contemplated hereby;
(b) the appropriate officers of Pantheon shall have executed and
delivered to Parent at the Closing, Pantheon's Closing Certificate.
(c) Pantheon and the Pantheon Shareholders shall have obtained or
caused to be obtained all of the Consents, if any, listed on Schedule 7.2(c)
---------------
hereto;
(d) there shall have been delivered to Parent at the Closing, duly
executed by each of the Pantheon Shareholders, (i) an Agreement to be Bound to
the Stockholders' Agreement, in the form of Exhibit "J" hereto, including for
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each of the Pantheon Shareholders who is married an executed Spousal Waiver,
substantially in the form attached thereto; and (ii) an Agreement to be Bound to
the Registration Rights Agreement;
(e) Parent shall have received a corporate certificate of good
standing for Pantheon, and a copy of the Articles of Incorporation of Pantheon,
both as certified by the Secretary of State of California;
(f) as of the date three business days prior to the Closing Date the
Pantheon shall be $-0-;
(g) Parent shall have received, at the Closing, an Option Agreement
executed by each Option recipient;
(h) Parent shall have received, at the Closing, a duly executed
opinion of counsel to Pantheon and the Pantheon Shareholders, substantially in
the form of Exhibit "K" hereto;
-----------
(i) Parent shall have received from Pantheon the Tax Clearance
Certificate, indicating that no taxes are owed by Pantheon to state taxing
authorities in the State of California;
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(j) Pantheon shall have furnished evidence to Parent's satisfaction
of performance under Sections 6.7(a), 6.9 and 6.11 hereof, and Parent shall have
received from Pantheon or the Pantheon Shareholders, as the case may be, such
other documents as Parent's counsel shall have reasonably requested, in form and
substance reasonably satisfactory to Parent's counsel; and
(k) Parent shall have received evidence satisfactory to it that at
the Closing the assets and properties used in the Pantheon Business are free and
clear of all Liens other than Permitted Liens (as hereinafter defined), and that
all Pantheon Shareholders are accredited investors in accordance with Section
4.31(a) hereof.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Parent.
(a) Parent shall indemnify and hold the Pantheon Shareholders and
Pantheon's directors, officers and employees (collectively, the "Pantheon
Indemnified Parties") harmless from and against, and agree promptly to defend
each of the Pantheon Indemnified Parties from and reimburse each of the Pantheon
Indemnified Parties for, any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including reasonable attorney
fees and other legal costs and expenses) (collectively, a "Pantheon Loss") that
any of the Pantheon Indemnified Parties may at any time suffer or incur, or
become subject to, as a result of or in connection with:
(i) any breach or inaccuracy of any of the representations and
warranties made by Parent or Sub in or pursuant hereto, or in any instrument,
certificate or affidavit delivered by Parent or Sub at the Closing in accordance
with the provisions hereof;
(ii) any failure by Parent or Sub to carry out, perform, satisfy
and discharge any of its respective covenants, agreements, undertakings,
liabilities or obligations hereunder or under any of the documents and materials
delivered by Parent pursuant hereto; and
(iii) any suit, action or other proceeding arising out of,
or in any way related to, any of the matters referred to in this Section 8.1(a).
(b) Notwithstanding any other provision hereof to the contrary,
Parent shall not have any liability under Section 8.1(a)(i) above (i) unless the
aggregate of all Pantheon Losses for which Parent would be liable but for this
sentence exceeds, on a cumulative basis, an amount equal to $100,000, and then
only to the extent of such excess, (ii) for amounts in excess of $3,150,000 in
the aggregate, and (iii) unless the Pantheon Shareholders have asserted a claim
with respect to the matters set forth in Section 8.1(a)(i), or 8.1(a)(iii) to
the extent applicable to Section 8.1(a)(i),
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within two years of the Effective Time. Notwithstanding any implication to the
contrary contained herein, the parties acknowledge and agree that a decrease in
the value of Parent Stock would not, by itself, constitute a Pantheon Loss,
unless and to the extent a decrease in the value of Parent Stock has been
demonstrated to be as a result of any event described in Sections 8.1(a)(i),
(ii) or (iii) above.
8.2 Indemnification by the Pantheon Shareholders.
(a) The Pantheon Shareholders, jointly and severally, shall indemnify
and hold Parent, Sub, Surviving Corporation and their respective shareholders,
directors, officers and employees (collectively, the "Parent Indemnified
Parties") harmless from and against, and agree to defend promptly each of the
Parent Indemnified Parties from and reimburse each of the Parent Indemnified
Parties for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including reasonable attorneys' fees and
other legal costs and expenses) (collectively, a "Parent Loss") that any of the
Parent Indemnified Parties may at any time suffer or incur, or become subject
to, as a result of or in connection with:
(i) any breach or inaccuracy of any of the representations and
warranties made by Pantheon or the Pantheon Shareholders in or pursuant hereto,
or in any instrument certificate or affidavit delivered by any of the same at
the Closing in accordance with the provisions hereof;
(ii) any failure by Pantheon or any of the Pantheon Shareholders
to carry out, perform, satisfy and discharge any of their respective covenants,
agreements, undertakings, liabilities or obligations hereunder or under any of
the documents and materials delivered by Pantheon pursuant hereto; and
(iii) any suit, action or other proceeding arising out of, or in
any way related to, any of the matters referred to in this Section 8.2.
(b) Notwithstanding the above, none of the Pantheon Shareholders
shall have any liability under Section 8.2(a)(i) above (i) unless the aggregate
of all Parent Losses for which the Pantheon Shareholders would be liable but for
this sentence exceeds, on a cumulative basis, an amount equal to $100,000, and
then only to the extent of such excess, (ii) for amounts in excess of $3,150,000
in the aggregate, and (iii) unless Parent has asserted a claim with respect to
the matters set forth in Sections 8.2(a)(i), or 8.2(a)(iii) to the extent
applicable to Section 8.2(a)(i) within two years of the Effective Time, except
with respect to the matters arising under Sections 4.18, 4.19, 4.20 or 4.24
hereof, in which event Parent must have asserted a claim within the applicable
statute of limitations. Notwithstanding any implication to the contrary
contained herein, the parties acknowledge and agree that a decrease in the value
of Parent Stock would not, by itself, constitute a Parent Loss, unless and to
the extent a decrease in the value of Parent Stock has been demonstrated to be
as a result of any event described in Sections 8.2(a)(i), (ii) or (iii) above.
(c) Notwithstanding the above, except for claims for indemnification
based on (i) fraud, (ii) intentional misrepresentation or (iii) any breach of
any representation made in Section
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4.3 hereof or otherwise with respect to title to any Pantheon Stock or any
Pantheon Stock Rights, the liability of any Pantheon Shareholder under Section
8.2(a) hereof will not exceed such Pantheon Shareholder's respective portion of
the merger consideration receivable hereunder, as determined by multiplying by
$10 the number of shares of Parent Stock issued to them pursuant to Section
3.1(b) hereof.
8.3 Notification of Claims; Election to Defend
(a) A party entitled to be indemnified pursuant to Section 8.1 or 8.2
hereof, as the case may be (the "Indemnified Party"), shall notify the party
liable for such indemnification (the "Indemnifying Party") in writing of any
claim or demand (a "Claim") that the Indemnified Party has determined has given
or could give rise to a right of indemnification hereunder. Subject to the
Indemnifying Party's right to defend in good faith third party claims as
hereinafter provided, the Indemnifying Party shall satisfy its obligations under
this Article VIII within 30 days after the receipt of written notice thereof
from the Indemnified Party. Any amounts paid thereafter shall include interest
thereon for the period commencing at the end of such 30-day period and ending on
the actual date of payment, at a rate of 15% per annum, or, if lower, at the
highest rate of interest permitted by applicable law at the time of such
payment.
(b) If the Indemnified Party shall notify the Indemnifying Party of
any Claim pursuant to Section 8.3(a) hereof, and if such Claim relates to a
Claim asserted by a third party against the Indemnified Party that the
Indemnifying Party acknowledges is a Claim for which it must indemnify or hold
harmless the Indemnified Party under Section 8.1 or 8.2 hereof, as the case may
be, the Indemnifying Party shall have the right, at its sole cost and expense,
to employ counsel of its own choosing to defend any such Claim asserted against
the Indemnified Party. Notwithstanding anything to the contrary in the preceding
sentence, if the Indemnified Party (i) reasonably believes that its interests
with respect to a Claim (or any material portion thereof) are in conflict with
the interests of the Indemnifying Party with respect to such Claim (or portion
thereof), and (ii) promptly notifies the Indemnifying Party, in writing, of the
nature of such conflict, then the Indemnified Party shall be entitled to choose,
at the sole cost and expense of the Indemnifying Party, independent counsel to
defend such Claim (or the conflicting portion thereof). The Indemnified Party
shall have the right to participate in the defense of any Claim at its own
expense (except to the extent provided in the preceding sentence), but the
Indemnifying Party shall retain control over such litigation (except as provided
in the preceding sentence). The Indemnifying Party shall notify the Indemnified
Party in writing, as promptly as possible (but in any case before the due date
for the answer or response to a Claim) after receipt of the notice of Claim
given by the Indemnified Party to the Indemnifying Party under Section 8.3(a)
hereof, of its election to defend in good faith any such third party Claim. For
so long as the Indemnifying Party is defending in good faith any such Claim
asserted by a third party against the Indemnified Party, the Indemnified Party
shall not settle or compromise such Claim without the prior written consent of
the Indemnifying Party. The Indemnified Party shall cooperate with the
Indemnifying Party in connection with any such defense and shall make available
to the Indemnifying Party or its agents all records and other materials in the
Indemnified Party's possession reasonably required by it for its use in
contesting any third party Claim; provided, however, that the Indemnifying Party
shall have agreed, in writing, to keep such records and other materials
confidential except (i) to the extent required for defense of
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the relevant Claim, or (ii) as required by law or court order. Whether or not
the Indemnifying Party elects to defend any such Claim, the Indemnified Party
shall have no obligations to do so. Within 30 days after a final determination
(including a settlement) has been reached with respect to any Claim contested
pursuant to this Section 8.3(b), the Indemnifying Party shall satisfy its
obligations hereunder with respect thereto. Any amount paid thereafter shall
include interest thereon for the period commencing at the end of such 30-day
period and ending on the actual date of payment, at a rate of 15% per annum, or,
if lower, at the highest rate of interest permitted by applicable law at the
time of such payment.
8.4 Payment. Any Pantheon Indemnifying Party may, at such Indemnifying
Party's option, pay all or part of any amount due under this Article VIII by
delivery of shares of Parent Stock having a value equal to the amount due (to
the extent that such Indemnifying Party owns sufficient shares of Parent Stock).
For the purpose of this provision, the value of Parent Stock shall be deemed to
be $10 per share.
8.5 Further Agreement Regarding Indemnification. After the Effective Time
the sole and exclusive remedy of any Indemnified Party for any breach of any
representation, warranty, covenant or agreement herein (including any schedule
hereto) shall be the indemnification provisions contained in this Article VIII.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Merger Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual written consent of Parent and Pantheon;
(b) by Pantheon, upon a material breach hereof on the part of Parent
or Sub which has not been cured and which would cause any condition set forth in
Section 7.1 hereof to be incapable of being satisfied by September 15, 1998;
(c) by Parent, upon a material breach hereof on the part of Pantheon
or any of the Pantheon Shareholders which has not been cured and which would
cause any condition set forth in Section 7.2 hereof to be incapable of being
satisfied by September 15, 1998;
(d) by Parent or Pantheon if any court of competent jurisdiction
shall have issued, enacted, entered, promulgated or enforced any order,
judgment, decree, injunction or ruling which restrains, enjoins or otherwise
prohibits the Merger and such order, judgment, decree, injunction or ruling
shall have become final and nonappealable; or
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(e) by either Parent or Pantheon if the Merger shall not have been
consummated on or before September 15, 1998 (provided the terminating party is
not otherwise in material breach of its representations, warranties or
obligations hereunder).
9.2 Fees and Expenses.
(a) If the Merger is consummated, all costs and expenses incurred in
connection herewith and the transactions contemplated hereby shall be paid by
the Surviving Corporation; provided, however, that the Pantheon Shareholders
shall pay all fees and expenses (including agents, counsel and other advisors)
of Pantheon and themselves that are not solely and directly related to the
Merger (any other such fees, to the extent unpaid by Pantheon, shall be deducted
as Debt from the merger consideration in accordance with the formula in Section
3.1).
(b) If the Merger is not consummated for a reason other than the
willful and material breach hereof by a party, all fees and expenses incurred in
connection herewith and the transactions contemplated hereby shall be paid by
the party incurring such fees or expenses.
(c) If the Merger is not consummated because of a willful and
material breach hereof by any party, the nonbreaching party or parties shall be
entitled to pursue all legal and equitable remedies against the breaching party
for such breach including specific performance and all fees and expenses
incurred by the nonbreaching party or parties in connection with enforcing its
or their rights hereunder with respect to such breach shall be paid by the
breaching party.
9.3 Amendment. This Merger Agreement may be amended by Parent, Sub,
Pantheon and the Pantheon Shareholders at any time before or after approval
hereof by the Pantheon Shareholders, but, after such approval, no amendment
shall be made which (i) changes the form or decreases the amount of the
consideration to be received in the Merger, (ii) in any way materially adversely
affects the rights of the Pantheon Shareholders, or (iii) under applicable law
would require approval of the Pantheon Shareholders, in any such case referred
to in clauses (i), (ii) and (iii), without the further approval of the Pantheon
Shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of the parties hereto, provided that after the date
hereof, any such amendment must be signed by the former holders of a majority of
the Pantheon Stock.
9.4 Waiver. At any time prior to the Effective Time, the parties hereto
may, to the extent permitted by applicable law, (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties by any other
party contained herein or in any documents delivered by any other party pursuant
hereto and (iii) waive compliance with any of the agreements of any other party
or with any conditions to its own obligations contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
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ARTICLE X
GENERAL PROVISIONS
10.1 Survival; Recourse. None of the agreements contained herein shall
survive the Merger, except that (i) the agreements contained in Article III
hereof, the covenants contained in Article VI hereof, the obligations to
indemnify contained in Article VIII hereof and the agreements of the Surviving
Corporation referred to in Sections 10.9 and 10.10 hereof, shall survive the
Merger indefinitely (except to the extent a shorter period of time is explicitly
specified therein) and (ii) the representations and warranties made in Articles
IV and V hereof shall survive the Merger, and shall survive any independent
investigation by the parties, and any dissolution, merger or consolidation of
Pantheon or Parent, and shall bind the legal representatives, assigns and
successors of Pantheon, the Pantheon Shareholders and Parent, for a period of
two years after the Effective Time (other than the representations and
warranties contained in Sections 4.18, 4.19, 4.20 and 4.24 hereof, which shall
survive for the applicable statute of limitations).
10.2 Notices. All notices or other communications under this Agreement
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in Person, by telecopy (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to Pantheon: Pantheon Interactive, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx.
Xxxxx 000
Xxxxx Xxxxx, XX 00000
Attention: Mr. Xxx Parent, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: General Counsel Associates LLP
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Pantheon To the address listed under the signature
Shareholders: line of the applicable Pantheon Shareholder
If to Parent or Sub: IXL Holdings, Inc.
0000 Xxxxx Xx., 0xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 404/267-3801
Telephone: 404/000-0000
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With copies to: Xxxxxx & Xxxxxx, A Professional Corporation
One Buckhead Plaza
0000 Xxxxxxxxx Xx., Xxx. 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: 404/233-5824
Telephone: 404/000-0000
and to: Xxxxx & Company
000 Xxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx XX, Esq.
Telecopy: 212/223-2379
Telephone: 212/000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
10.3 Entire Agreement. The exhibits and schedules hereto are incorporated
herein by reference. This Agreement and the documents, schedules and instruments
referred to herein and to be delivered pursuant hereto constitute the entire
agreement between the parties pertaining to the subject matter hereof, and
supersede all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof,
except for the non-disclosure letter agreement between Parent and Pantheon dated
as of June 10, 1998. There are no other representations or warranties, whether
written or oral, between the parties in connection the subject matter hereof,
except as expressly set forth herein.
10.4 Assignments; Parties in Interest. Neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the rights, interests, and
obligations of Sub hereunder may be assigned to any direct wholly owned Delaware
subsidiary of Parent without such prior consent. Subject to the preceding
sentence, this Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing herein, express or implied, is intended to or
shall confer upon any Person not a party hereto any right, benefit or remedy of
any nature whatsoever under or by reason hereof, except as otherwise provided
herein.
10.5 Governing Law. This Agreement, except to the extent that the GCL or
the DGCL is mandatorily applicable to the Merger, or to the rights of the
Pantheon Shareholders or the other parties hereto with respect to the Merger,
shall be governed in all respects by the laws of the State of Georgia (without
giving effect to the provisions thereof relating to conflicts of law).
10.6 Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation hereof.
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10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute a single agreement.
10.8 Severability. If any term or other provision hereof is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions hereof shall nevertheless remain in full force
and effect so long as the economics or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party. Upon determination that any term or other provision hereof is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
10.9 Post-Closing Access. For a period of four years after the Closing
Date, the Pantheon Shareholders and their agents and representatives shall have
reasonable access to the books and records of the Pantheon Business.
10.10 Post-Closing Notice. To the extent the Surviving Corporation
receives written notice of any event or circumstance that materially affects any
of the Pantheon Shareholders, the Surviving Corporation shall promptly notify
the affected Pantheon Shareholder of such matter, information, or event and
shall provide them with copies of all relevant documentation or correspondence
in connection thereto.
10.11 Certain Definitions. As used herein:
(a) the term "Permitted Liens" shall mean (a) Liens for taxes,
assessments or other governmental charges or levies not yet due; (b) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law created in the ordinary course of business for
amounts not yet due; (c) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business in connection with worker's
compensation, unemployment insurance or other types of social security; (d)
minor defects of title, easements, rights-of-way, restrictions and other similar
charges or encumbrances not materially detracting from the value of the Pantheon
Real Property or interfering with the ordinary conduct of any of the Pantheon
Business; and (e) those Liens listed on Schedule 10.11 hereto;
--------------
(b) (i) any representation or warranty stated to be made "to the
knowledge" of a party shall refer to such party's knowledge following reasonable
inquiry as to the matter in question; and (ii) any representation or warranty
stated to be made "to the knowledge of Pantheon" shall refer to the knowledge,
subject to clause (i) above, of any of the Pantheon Shareholders, and, as
applicable to the Pantheon Shareholders, will be understood to be limited also
"to the knowledge of the Pantheon Shareholders"; and
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(c) the term "Subsidiary" or "Subsidiaries" means any Entity of
which Parent (either alone or through or together with any other Subsidiary)
owns, directly or indirectly, stock or other equity interests the holders of
which are entitled to more than 50% of the vote for the election of the board of
directors or other governing body of such Entity (including Sub); provided,
however, that with respect to the Parent, the terms "Subsidiary" and
"Subsidiaries" shall not include Pantheon or University Netcasting, Inc.
- SIGNATURES ON THE FOLLOWING PAGE -
-34-
IN WITNESS WHEREOF, Parent, Sub and Pantheon have caused this Agreement to
be signed and delivered by their respective duly authorized officers, and each
Pantheon Shareholder has signed and delivered this Agreement, all as of the date
first written above.
"Pantheon"
Pantheon Interactive, Inc., a California corporation
By: /s/ Xxxx Parent
-----------------------------------------------
Title: President
And By: /s/ Xxxxx XxXxxxx
--------------------------------------------
Title: Secretary
"Parent"
IXL Holdings, Inc., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------------
Title: Executive Vice President
"Sub"
iXL-San Francisco, Inc., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------------
Title: Executive Vice President
- SIGNATURES CONTINUE ON THE FOLLOWING PAGE -
-35-
"Pantheon Shareholders"
/s/ Xxxx Parent
---------------------------------------
Xxxx Parent
Address: 000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
/s/ Xxxxx XxXxxxx
---------------------------------------
Xxxxx XxXxxxx
Address: 0000 Xxx Xxxxx
Xxx Xxxx, XX 00000
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
Address: 00000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
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EXHIBITS
--------
Sub's Closing Certificate..................................... Exhibit A
Pantheon's Closing Certificate................................ Exhibit B
Parent's Closing Certificate.................................. Exhibit C
Assumption Agreement.......................................... Exhibit D
Purchaser Representative Questionnaire and Acknowledgement.... Exhibit F
Agreement to be Bound to Registration Rights Agreement........ Exhibit G
Option Agreement.............................................. Exhibit H
Opinion of Counsel to Parent and Sub.......................... Exhibit I
Agreement to be Bound to Stockholders' Agreement.............. Exhibit J
Opinion of Counsel to Pantheon................................ Exhibit K
SCHEDULE 4.3(A)
---------------
CAPITALIZATION OF PANTHEON
SCHEDULE 4.3(B)
---------------
LIENS ON PANTHEON STOCK
SCHEDULE 4.5
------------
CONFLICTS, REQUIRED FILINGS AND CONSENTS OF PANTHEON
SCHEDULE 4.7
------------
EXCEPTIONS TO ABSENCE OF CHANGES OF PANTHEON
SCHEDULE 4.8
------------
UNDISCLOSED LIABILITIES OF PANTHEON
SCHEDULE 4.9
------------
EXCEPTIONS TO TITLE TO PROPERTIES OF PANTHEON
SCHEDULE 4.10
-------------
BAD EQUIPMENT OF PANTHEON
SCHEDULE 4.11
-------------
INTELLECTUAL PROPERTY AND MATERIAL COMPUTER SOFTWARE OF PANTHEON
SCHEDULE 4.12
-------------
LIENS ON AND LOCATION OF REAL PROPERTY OF PANTHEON
SCHEDULE 4.13
-------------
LEASES OF PANTHEON
SCHEDULE 4.14
-------------
CONTRACTS OF PANTHEON
SCHEDULE 4.15
-------------
DIRECTORS AND OFFICERS OF PANTHEON
SCHEDULE 4.16
-------------
PAYROLL INFORMATION OF PANTHEON
SCHEDULE 4.17
-------------
LITIGATION
SCHEDULE 4.18
-------------
EMPLOYEE BENEFIT PLANS/LABOR RELATIONS OF PANTHEON
SCHEDULE 4.19
-------------
ERISA ISSUES OF PANTHEON
SCHEDULE 4.20
-------------
EXCEPTIONS TO TAXES OF PANTHEON BEING TIMELY FILED
SCHEDULE 4.21
-------------
PANTHEON PERMITS
SCHEDULE 4.23
-------------
PANTHEON BROKERS
SCHEDULE 4.25
-------------
INTEREST IN CUSTOMERS, SUPPLIERS, COMPETITORS
SCHEDULE 4.28
-------------
INSURANCE OF PANTHEON
SCHEDULE 5.3
------------
CONFLICTS, REQUIRED FILINGS AND CONSENTS OF PARENT AND SUB
SCHEDULE 5.4
------------
PARENT LITIGATION
SCHEDULE 5.5
------------
PARENT AND SUB BROKERS
SCHEDULE 5.6
------------
OUTSTANDING OBLIGATIONS TO ISSUE OPTIONS,
WARRANTS OR OTHER PARENT STOCK RIGHTS
SCHEDULE 5.7
------------
SUBSIDIARIES OF PARENT
SCHEDULE 5.9
------------
PARENT UNDISCLOSED LIABILITIES
SCHEDULE 5.13
-------------
EXCEPTIONS TO ABSENCE OF CHANGES
SCHEDULE 6.7(B)
---------------
PARENT OPTIONS TO HOLDERS OF PANTHEON STOCK RIGHTS
SCHEDULE 7.1(C)
---------------
PARENT CONSENTS
SCHEDULE 7.2(C)
---------------
PANTHEON AND PANTHEON SHAREHOLDERS CONSENTS
SCHEDULE 10.11
--------------
PERMITTED LIENS OF PANTHEON
