<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998
REGISTRATION NO. 333-58237
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EXCITE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 77-0378215
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
------------------------
555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(650) 568-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT C. HOOD
EXECUTIVE VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER AND CHIEF FINANCIAL
OFFICER
EXCITE, INC.
555 BROADWAY
REDWOOD CITY, CALIFORNIA 94063
(650) 568-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copies to:
MARK C. STEVENS, ESQ.
JEFFREY R. VETTER, ESQ.
MICHAEL J. MCADAM, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement until
the sale of all shares registered hereunder.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The aggregate estimated expenses to be paid by the Registrant in connection
with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $25,306.00
Accounting fees and expenses................................ 10,000.00
Legal fees and expenses..................................... 30,000.00
Miscellaneous............................................... 4,694.00
----------
Total............................................. $70,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles of Incorporation include a provision that
eliminates the personal liability of its directors to the Registrant and its
shareholders for monetary damages for breach of the directors' fiduciary duties
to the fullest extent permitted by law. This limitation has no effect on a
director's liability (i) for acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) for acts or
omissions that a director believes to be contrary to the best interests of the
Registrant or its shareholders or that involve the absence of good faith on the
part of the director, (iii) for any transaction from which a director derived an
improper personal benefit, (iv) for acts or omissions that show a reckless
disregard for the director's duty to the Registrant or its shareholders in
circumstances in which the director was aware, or should have been aware, in the
ordinary course of performing a director's duties, of a risk of a serious injury
to the Registrant or its shareholders, (v) for acts or omissions that constitute
an unexcused pattern of inattention that amounts to an abdication of the
director's duty to the Registrant or its shareholders, (vi) under Section 310 of
the California Corporations Code (the "California Code") (concerning contracts
or transactions between the Registrant and a director) or (vii) under Section
316 of the California Code (concerning directors' liability for improper
dividends, loans and guarantees). The provision does not extend to acts or
omissions of a director in his capacity as an officer. Further, the provision
will not affect the availability of injunctions and other equitable remedies
available to the Registrant's shareholders for any violation of a director's
fiduciary duty to the Registrant or its shareholders.
The Registrant's Articles of Incorporation also include an authorization
for the Registrant to indemnify its agents (as defined in Section 317 of the
California Code), through bylaw provisions, by agreement or otherwise, to the
fullest extent permitted by law. Pursuant to this latter provision, the
Registrant's Bylaws provide for indemnification of the Registrant's directors
and officers. In addition, the Registrant, at its discretion, may provide
indemnification to persons whom the Registrant is not obligated to indemnify.
The Bylaws also allow the Registrant to enter into indemnity agreements with
individual directors, officers, employees and other agents. These indemnity
agreements have been entered into with all directors and provide the maximum
indemnification permitted by law. These agreements, together with the
Registrant's Bylaws and Articles of Incorporation, may require the Registrant,
among other things, to indemnify such directors against certain liabilities that
may arise by reason of their status or service as directors (other than
liabilities resulting from willful misconduct of a culpable nature), to advance
expenses to them as they are incurred, provided that they undertake to repay the
amount advanced if it is ultimately determined by a court that they are not
entitled to indemnification, and to obtain directors' and officers' insurance if
available on reasonable terms.
Section 317 of the California Code and the Registrant's Bylaws make
provision for the indemnification of officers, directors and other corporate
agents in terms sufficiently broad to indemnify such persons, under certain
circumstances for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
II-1
<PAGE> 3
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
The Registrant has directors and officers liability insurance with a per
claim and annual aggregate coverage limit of $5,000,000.
ITEM 16. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement (notwithstanding the foregoing, any
increase or decrease in volume or securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement); and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by paragraphs (1)(i) or (1)(ii) is contained in any periodic
report filed with or furnished to the Securities and Exchange Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
II-2
<PAGE> 4
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 17. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <C> <S>
2.01 -- Agreement and Plan of Reorganization, dated as of March 31,
1998, by and among the Registrant and the parties named
therein.
2.02 -- Agreement and Plan of Reorganization, dated as of April 8,
1998, by and among the Registrant and the parties named
therein.
3.01 -- Amended and Restated Articles of Incorporation of
Registrant, as amended.(1)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(2)
4.02 -- Bylaws of Registrant, as amended.(3)
4.03 -- Registration Rights Agreement, dated as of March 31, 1998,
by and among the Registrant and the parties named therein.
4.04 -- Registration Rights Agreement, dated as of April 8, 1998, by
and among the Registrant and the parties named therein.
5.01 -- Opinion of Fenwick & West LLP.
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 -- Consent of Ernst & Young LLP, Independent Auditors
(previously filed).
23.03 -- Consent of Price Waterhouse LLP, Independent Accountants
(previously filed).
24.01 -- Power of Attorney (previously filed).
</TABLE>
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(1) Previously filed with the Commission on March 31, 1998 as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1997.
(2) Previously filed with the Commission on March 29, 1996 as an exhibit to
Amendment No. 1 to the Registrant's Registration Statement on Form SB-2
(File No. 333-2328-LA).
(3) Previously filed with the Commission on March 11, 1996 as an exhibit to the
Registrant's Registration Statement on Form SB-2 (File No. 333-2328-LA).
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all for the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redwood City, State of California, on the 6th day of
July, 1998.
EXCITE, INC.
By: /s/ ROBERT C. HOOD
------------------------------------
Robert C. Hood
Executive Vice President, Chief
Administrative and Chief Financial
Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
PRINCIPAL EXECUTIVE OFFICER:
/s/ GEORGE BELL President, Chief Executive Officer July 6, 1998
- --------------------------------------------------- and Director
George Bell
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ ROBERT C. HOOD Executive Vice President, July 6, 1998
- --------------------------------------------------- Chief Administrative Officer
Robert C. Hood and Chief Financial Officer
ADDITIONAL DIRECTORS:
* Senior Vice President and Director July 6, 1998
- ---------------------------------------------------
Joseph R. Kraus
* Director July 6, 1998
- ---------------------------------------------------
Jeff Berg
* Director July 6, 1998
- ---------------------------------------------------
Vinod Khosla
* Director July 6, 1998
- ---------------------------------------------------
Geoffrey Y. Yang
*By: /s/ ROBERT C. HOOD Attorney-in-fact July 6, 1998
---------------------------------------------
Robert C. Hood
</TABLE>
II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<C> <C> <S>
2.01 -- Agreement and Plan of Reorganization, dated as of March 31,
1998, by and among the Registrant and the parties named
therein.
2.02 -- Agreement and Plan of Reorganization, dated as of April 8,
1998, by and among the Registrant and the parties named
therein.
3.01 -- Amended and Restated Articles of Incorporation of
Registrant, as amended.(1)
4.01 -- Form of Specimen Certificate for Registrant's Common
Stock.(2)
4.02 -- Bylaws of Registrant, as amended.(3)
4.03 -- Registration Rights Agreement, dated as of March 31, 1998,
by and among the Registrant and the parties named therein.
4.04 -- Registration Rights Agreement, dated as of April 8, 1998, by
and among the Registrant and the parties named therein.
5.01 -- Opinion of Fenwick & West LLP.
23.01 -- Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 -- Consent of Ernst & Young LLP, Independent Auditors
(previously filed).
23.03 -- Consent of Price Waterhouse LLP, Independent Accountants
(previously filed).
24.01 -- Power of Attorney (previously filed).
</TABLE>
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(1) Previously filed with the Commission on March 31, 1998 as an exhibit to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1997.
(2) Previously filed with the Commission on March 29, 1996 as an exhibit to
Amendment No. 1 to the Registrant's Registration Statement on Form SB-2
(File No. 333-2328-LA).
(3) Previously filed with the Commission on March 11, 1996 as an exhibit to the
Registrant's Registration Statement on Form SB-2 (File No. 333-2328-LA).
<PAGE> 1
EXHIBIT 2.01
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is entered
into as of this 31st day of March, 1998, by and among Excite, Inc., a California
corporation ("EXCITE"), Excite 2000 Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Excite ("MERGER SUB"),
Classifieds2000, Inc., a California corporation ("CLASSIFIEDS2000"), and, with
respect to Sections 1.6, 2, 4.4, 4.10 and 10 only, Sani El-Fishawy and Karim
El-Fishawy (collectively, the "PRINCIPAL SHAREHOLDERS").
RECITALS
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, Merger Sub will merge with and into Classifieds2000 in a
reverse triangular merger (the "MERGER"), with Classifieds2000 to be the
surviving corporation of the Merger, pursuant to the terms and conditions of
this Agreement and a Agreement of Merger substantially in the form of Exhibit A
attached hereto (the "AGREEMENT OF MERGER") and the applicable provisions of the
law of the State of California. Upon the effectiveness of the Merger, all of the
outstanding Common Stock and Preferred Stock of Classifieds2000 will be
converted into Common Stock of Excite ("EXCITE COMMON STOCK"). In addition, all
outstanding options ("CLASSIFIEDS2000 OPTIONS") and warrants ("CLASSIFIEDS2000
WARRANTS") to purchase shares of the Common Stock and Preferred Stock of
Classifieds2000 will be converted into options and warrants, respectively, to
purchase Excite Common Stock, all as provided in this Agreement and the
Agreement of Merger. The options and warrants exercisable for Excite Common
Stock issued in the Merger shall be referred to herein as the "EXCITE
SECURITIES."
B. The Merger is intended to be treated as a tax-free reorganization
pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended (the "CODE"), by virtue of the provisions of Section
368(a)(2)(E) of the Code and as a "pooling of interests" for accounting
purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. PLAN OF REORGANIZATION
1.1 The Merger. An Agreement of Merger will be filed with the office of
the Secretary of State of the State of California as soon as practicable after
the Closing Date (as defined in Section 6.1 hereof). The effective date and time
of such filing is referred to herein as the "EFFECTIVE TIME". At the Effective
Time, Merger Sub will be merged with and into Classifieds2000 pursuant to this
Agreement and the Agreement of Merger and in accordance with applicable
provisions of the law of the State of California as follows:
1.1.1 Conversion of Shares. Each share of Classifieds2000 Common
Stock (the "CLASSIFIEDS2000 COMMON STOCK"), and each share of Classifieds2000
Series A Preferred Stock (the "CLASSIFIEDS2000 A PREFERRED") and each share of
Classifieds2000 Series B Preferred Stock (the "CLASSIFIEDS2000 B PREFERRED")
(and collectively, the "CLASSIFIEDS2000 CAPITAL STOCK") issued and outstanding
immediately prior to the Effective Time, other than shares, if any, for which
dissenters rights have been or will be perfected in compliance with applicable
law, will by virtue of the Merger and at the Effective Time, and without further
action on the part of any holder thereof (the "CLASSIFIEDS2000 STOCKHOLDER(S)"),
be converted into the right to receive the
1
<PAGE> 2
"COMMON APPLICABLE FRACTION" of a fully paid and nonassessable share of Excite
Common Stock.
(i) The Total Excite Shares. The total shares of Excite Common
Stock issuable hereunder (the "TOTAL EXCITE SHARES") shall be eight hundred and
ninety thousand (890,000) shares.
(ii) Common Applicable Fraction. The Common Applicable Fraction
shall be determined by dividing (A) the Total Excite Shares (as defined above in
Subsection 1.1.1(i)) by (B) the Total Classifieds2000 Shares, which shall equal
the sum of: (i) the total number of shares of Classifieds2000 Common Stock
outstanding immediately prior to the Effective Time, (ii) the total number of
shares of Classifieds2000 Common Stock into which all shares of Classifieds2000
A Preferred and Classifieds2000 B Preferred that are outstanding as of the date
hereof could be converted, and (iii) the total number of shares of
Classifieds2000 Common Stock issuable upon exercise of all Classifieds2000
Options and Classifieds2000 Warrants outstanding immediately prior to the
Effective Time (collectively (the "TOTAL CLASSIFIEDS2000 SHARES").
(iii) Application of the Common Applicable Fraction. The holders
of Classifieds2000 Common Stock shall receive such number of shares of Excite
Common Stock equal to the Common Applicable Fraction multiplied by the number of
shares of Classifieds2000 Common Stock so held by such stockholder. The holders
of Classifieds2000 A Preferred shall receive such number of shares of Excite
Common Stock equal to the Common Applicable Fraction multiplied by the number of
shares of Classifieds2000 Common Stock into which each share of Classifieds2000
A Preferred is convertible. The holders of Classifieds2000 B Preferred shall
receive such number of shares of Excite Common Stock equal to the Common
Applicable Fraction multiplied by the number of shares of Classifieds2000 Common
Stock into which each share of Classifieds2000 B Preferred is convertible.
(iv) Conversion of Capital Stock of Merger Sub. Each share of
Common Stock of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into one share of Classifieds2000 Common Stock.
1.1.2 Classifieds2000 Options. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding options to
purchase shares of Classifieds2000 Common Stock and each holder of a
Classifieds2000 Option granted (a) under the Classifieds2000 Stock Option Plan
(the "CLASSIFIEDS2000 OPTION PLAN") or (b) outside of the Classifieds2000 Option
Plan, shall be entitled, in accordance with the existing terms of such
Classifieds2000 Option, to purchase after the Effective Time that number of
shares of Excite Common Stock determined by multiplying the aggregate number of
shares of Classifieds2000 Common Stock subject to such Classifieds2000 Option at
the Effective Time by the Common Applicable Fraction, and the exercise price per
share for each such assumed option (the "ASSUMED OPTION") will equal the
exercise price per share of the Classifieds2000 Option immediately prior to the
Effective Time divided by the Common Applicable Fraction. If the foregoing
calculation results in an Assumed Option (a) being exercisable for a fraction of
a share of Excite Common Stock, then the number of shares of Excite Common Stock
subject to such Assumed Option will be rounded down to the nearest whole number
with no cash being payable for such fractional share, or (b) being exercisable
for a per share exercise price that includes a fraction of a cent, the exercise
price shall be rounded down to the nearest whole cent. The term, exercisability,
vesting schedule, status as an "incentive stock option" under Section 422A of
the
2
<PAGE> 3
Code, if applicable, and all other terms of the Assumed Options will otherwise
be unchanged unless such Classifieds2000 Option by its terms is accelerated upon
the Merger. The continuous term of employment with Classifieds2000 will be
credited to each holder of an Assumed Option as if it were employment with
Excite for purposes of determining the vesting and the number of shares subject
to exercise after the Effective Time. Promptly following the Effective Time,
Excite will issue to each holder of an Assumed Option a document evidencing the
foregoing assumption by Excite. Attached hereto as Exhibit 1.1.2 is list of all
holders of Classifieds2000 Options and the number of options held by each. To
the extent required by, and subject to the provisions of, such Classifieds2000
Option Plan, Excite shall comply with the terms of the Classifieds2000 Option
Plan and use its reasonable best efforts to preserve the incentive stock option
status after the Effective Time of the Assumed Options which qualified as
incentive stock options prior to the Effective Time.
1.1.3 Classifieds2000 Warrants. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding warrants to
purchase shares of Classifieds2000 Capital Stock and each holder of a
Classifieds2000 Warrant (an "ASSUMED WARRANT") shall be entitled, in accordance
with the existing terms of such Classifieds2000 Warrant, to purchase after the
Effective Time that number of shares of Excite Common Stock determined by
multiplying the aggregate number of shares of Classifieds2000 Capital Stock
subject to such Classifieds2000 Warrant at the Effective Time by the Common
Applicable Fraction, and the exercise price per share for each such assumed
Warrant will equal the exercise price per share of the Classifieds2000 Warrant
immediately prior to the Effective Time divided by the Common Applicable
Fraction. If the foregoing calculation results in an Assumed Warrant being
exercisable for a fraction of a share of Excite Common Stock, then the number of
shares of Excite Common Stock subject to such Assumed Warrant will be rounded
down to the nearest whole number with no cash being payable for such fractional
share. If the Assumed Warrant is exercisable for a per share exercise price that
includes a fraction of a cent, the exercise price shall be rounded down to the
nearest whole cent. The terms of the Classifieds2000 Warrants will otherwise be
unchanged.
1.1.4 Adjustments for Capital Changes. If prior to the Effective
Time, Excite recapitalizes through a split-up of its outstanding shares into a
greater number, or a combination of its outstanding shares into a lesser number,
reorganizes, reclassifies or otherwise changes its outstanding shares into the
same or a different number of shares of other classes (other than through a
split-up or combination of shares provided for in the previous clause), or
declares a dividend on its outstanding shares payable in shares or securities
convertible into shares, the number of shares of Excite Common Stock into which
the shares of Classifieds2000 Capital Stock, Options, Warrants and Convertible
Securities are to be converted will be adjusted appropriately so as to maintain
the proportionate interests of the holders of the Classifieds2000 Capital Stock,
Options, Warrants and Convertible Securities and the holders of Excite shares.
1.1.5 Dissenting Shares. Holders of shares of Classifieds2000 Capital
Stock who have complied with all requirements for perfecting appraisal rights,
as set forth in Chapter 800-1300 of the General Corporation Law of the State of
California ("CALIFORNIA LAW"), shall be entitled to their rights under the
California Law with respect to such shares ("DISSENTING SHARES").
1.2 Fractional Shares. No fractional shares of Excite Common Stock will be
issued in connection with the Merger, but in lieu thereof, the holder of any
shares of Classifieds2000 Capital Stock who would otherwise be entitled to
receive a fraction of a share of Excite Common
3
<PAGE> 4
Stock will receive from Excite, promptly after the Effective Time, an amount of
cash equal to (i) the closing price of a share of Excite Common Stock on the
Closing Date as reported by Nasdaq, multiplied by (ii) the fraction of a share
to which such holder would otherwise be entitled.
1.3 Escrow Agreement. At the closing of the Merger (the "CLOSING"), Excite
will withhold that number of shares of Excite Common Stock which equals ten
percent (10%) of the Total Excite Shares in the Merger, otherwise issuable to
the holders of the Classifieds2000 Capital Stock, Options, Warrants and
Convertible Securities (which certificates shall be delivered to the Escrow
Agent at the time of such exercise, if exercised during the Escrow Period (as
defined below)), on a pro rata basis, as determined pursuant to this Section 1.3
(rounded down to the nearest whole number of shares to be issued to each
Classifieds2000 Stockholder) and deliver such shares (the "ESCROW SHARES") to
Chase Trust Company of California (the "ESCROW AGENT"), as escrow agent, to be
held by the Escrow Agent as collateral for the Classifieds2000 Stockholder's
obligations under Section 10.2 and pursuant to the provisions of an escrow
agreement (the "ESCROW AGREEMENT") in substantially the form of Exhibit 1.3. The
Escrow Shares will be represented by a certificate or certificates issued in the
name of the Classifieds2000 Stockholders and delivered to the Escrow Agent
(except for the shares of Assumed Options and Assumed Warrants not yet
exercised) and will be held as collateral for Damages suffered by an Indemnified
Person (each as defined in Section 10.2) for breaches of the representations,
warranties and covenants of Classifieds2000 contained in this Agreement. The
Escrow Shares shall equal ten percent (10%) of the Total Excite Shares. Assumed
Options and Assumed Warrants which are exercised after the Effective Time shall
not be subject to the Escrow Agreement. The Escrow Shares will be delivered and
will be held by the Escrow Agent from the Closing until (a) the date on which
Excite has received audited financial statements together with a report thereon
from Excite's independent auditors covering the combined results of Excite and
Classifieds2000 for the first fiscal year of Excite ending after the Closing
Date (i.e., the year ending December 31, 1998) for items expected to be
encountered in the audit process, provided that Excite shall have until March
31, 1999 to review the audit results to determine if any claim for Damages
exists under Section 10.2 of this Agreement and Excite shall provide notice of
any claim for Damages on or prior to March 31, 1999, and (b) one (1) year from
the Closing Date for all other items (the "ESCROW PERIOD"). However, in all
cases as to matters which an Indemnified Person has given written notice of a
claim for Damages during the Escrow Period, such period with respect thereto
shall continue until such claim for Damages is finally resolved and the
Classifieds2000 Stockholder's indemnification obligations under Section 10.2
hereof with respect thereto are fully determined in accordance with the terms
and conditions of this Agreement and the Escrow Agreement.
In the event that the Merger is approved by the Classifieds2000
Stockholders, as provided herein, the Classifieds2000 Stockholders shall,
without any further act of any Classifieds2000 Stockholder, be deemed to have
consented to and approved (i) the use of the Escrow Shares as collateral for the
Classifieds2000 Stockholder's indemnification obligations under Section 10.2 in
the manner set forth in the Escrow Agreement, (ii) the appointment of Sani
El-Fishawy as the representative of the Classifieds2000 Stockholders (the
"REPRESENTATIVE") under the Escrow Agreement and as the attorney-in-fact and
agent for and on behalf of each Classifieds2000 Stockholder (other than holders
of Dissenting Shares) and the taking by the Representative of any and all
actions and the making of any decisions required or permitted to be taken by the
Representative under the Escrow Agreement (including, without limitation, the
exercise of the power to: (a) authorize delivery to Excite of Escrow Shares in
satisfaction of claims by Excite; (b) agree to, negotiate, enter into
settlements and compromises of and demand
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arbitration and comply with orders of courts and awards of arbitrators with
respect to such claims; (c) resolve any claim made by Indemnified Persons
pursuant to Section 10.2; and (d) take all actions necessary in the judgment of
the Representative for the accomplishment of the foregoing) and (iii) to all of
the other terms, conditions and limitations in the Escrow Agreement.
1.4 Effects of the Merger. At the Effective Time: (a) the separate
existence of Merger Sub will cease and Merger Sub will be merged with and into
Classifieds2000, and Classifieds2000 will be the surviving corporation, pursuant
to the terms of the Agreement of Merger, (b) the Certificate of Incorporation
and Bylaws of Classifieds2000 will be amended and restated to be the same as the
Certificate of Incorporation and Bylaws of Merger Sub; provided, however, that
the corporate name of Classifieds2000 will not change, (c) the Board of
Directors and officers of Excite will remain unchanged, (d) all the directors of
Classifieds2000 immediately prior to the Effective Time will resign and the
directors of the Merger Sub shall automatically become the directors of the
surviving corporation and the officers of Classifieds2000 immediately prior to
the Effective Time will resign and the officers of Merger Sub shall
automatically become the officers of the surviving corporation, (e) each share
of Classifieds2000 Capital Stock outstanding immediately prior to the Effective
Time will be converted into Excite Common Stock and each Classifieds2000 Option
and Classifieds2000 Warrant outstanding immediately prior to the Effective Time
will be assumed by Excite, each as provided in Sections 1.1 and 1.2, (f) Excite,
which held all the outstanding shares of Merger Sub prior to the Effective Time
will instead hold all the outstanding shares of Classifieds2000 and (g) the
Merger will, from and after the Effective Time, have all of the effects provided
by applicable law.
1.5 S-3 Registration Rights and Registration on Form S-8.
1.5.1 S-3 Registration Rights. Effective upon the Effective Time,
each Classifieds2000 Stockholder who receives shares of Excite Common Stock,
including shares issued pursuant to the exercise of Assumed Warrants, in the
Merger pursuant to Section 1.1 hereof shall be granted Form S-3 registration
rights (other than pursuant to the assumption of Assumed Options, which shall be
covered by a Form S-8 pursuant to Section 1.5.2 hereof) under the Securities Act
of 1933, as amended (the "1933 ACT") on the terms and subject to the conditions
and limitations of the Registration Rights Agreement attached hereto as Exhibit
1.5.1A (the "REGISTRATION RIGHTS AGREEMENT"). Within ninety (90) days of the
Closing, Excite will cause to be filed a Registration Statement on Form S-3
covering the resale of all securities issued in the Merger, including shares
issued pursuant to the exercise of the Assumed Warrants (other than Assumed
Options which shall be covered by the Form S-8, pursuant to Section 1.5.2
hereof). Excite will use its best efforts to cause the Registration Statement to
become effective promptly after filing and shall keep such Registration
Statement effective until such time as each recipient of Excite Common Stock is
eligible to sell all of the Excite Common Stock held by each such recipient
(other than those covered by the Form S-8) in a three (3) month period pursuant
to the resale restrictions provided for in Rule 144 under the 1933 Act. Each
Classifieds2000 Stockholder shall agree that the Excite Common Stock issued to
him (the "LOCK UP Shares"), to the extent requested by Excite or an underwriter
of securities of Excite, be subject, on a pro rata basis, to the lock-up
provisions included in the Registration Rights Agreement in the event Excite
initiates an underwritten offering of at least twenty million dollars
($20,000,000.00) of newly issued shares of Excite Common Stock with nationally
recognized managing underwriters while the S-3 Registration Statement is
effective; provided, however, the lock-up provisions shall not apply to (a) the
Lock Up Shares that, prior to the time of the underwritten offering, have been
sold to the public or (b) any Classifieds2000 Stockholder, that,
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at the time of the request, has a beneficial ownership of less than one and one
half percent (1 1/2%) of the outstanding shares of Excite Common Stock.
Notwithstanding the foregoing or any provision to the contrary contained in the
Registration Rights Agreement, no Classifieds2000 Stockholder will be obligated
under the lock-up provisions included in the Registration Rights Agreement
unless all Excite executive officers, directors and beneficial owners of greater
than one and one half percent (1 1/2%) of Excite's outstanding Common Stock
enter into identical lock-up agreements. In order to enforce the foregoing
covenants, Excite shall have the right to place restrictive legends on the
certificates of the Excite Common Stock issued in the Merger, indicating that
the shares are subject to the provisions of the Registration Rights Agreement
until the sale of such shares.
1.5.2 Registration on Form S-8. In addition, Excite shall use its
best efforts to cause the shares of Excite Common Stock that are issuable upon
exercise of the Assumed Options to be registered under the Securities Act on
Form S-8 ("FORM S-8") within thirty (30) days of the Closing. Classifieds2000
will reasonably cooperate with Excite to the best of Classifieds2000's ability
in the preparation of the Form S-8.
1.6 Qualify as a Tax-Free Reorganization. The parties intend to adopt this
Agreement as a plan of reorganization and to consummate the Merger in accordance
with the provisions of Section 368(a)(1)(A) of the Code. The parties believe
that the total value of the Excite Common Stock to be received in the Merger by
the Classifieds2000 Stockholders is equal, in each instance, to the total value
of the Classifieds2000 Capital Stock to be surrendered in exchange therefor. The
Excite Common Stock issued in the Merger will be issued solely in exchange for
Classifieds2000 Capital Stock, Classifieds2000 Options and Classifieds2000
Warrants, respectively, and no other transaction other than the Merger
represents, provides for or is intended to be an adjustment to the consideration
paid for the Classifieds2000 Capital Stock, Classifieds2000 Options and
Classifieds2000 Warrants. Except for cash paid in lieu of fractional shares or
for Dissenting Shares, no consideration that could constitute "other property"
within the meaning of Section 356 of the Code is being paid by Excite for the
Classifieds2000 Capital Stock in the Merger. The parties shall not take a
position on any tax returns inconsistent with this Section 1.6 unless required
to do so by applicable tax laws pursuant to a determination as defined in
Section 1313(c) of the Code. In addition, Excite represents now, and as of the
Closing Date, that it presently intends to continue Classifieds2000's historic
business or use a significant portion of Classifieds2000's business assets in a
business and that it has no current plan or intention to liquidate
Classifieds2000, to merge Classifieds2000 with and into another corporation, to
sell or otherwise dispose of the stock of Classifieds2000 or to cause
Classifieds2000 to sell or otherwise dispose of any of its assets, except for
dispositions made in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the Code. At the Closing, the Chief Financial Officers
of Excite and Classifieds2000 shall each execute and deliver tax certificates in
the forms of Exhibits 1.6A-B, together with an acknowledgment that such
certificates will be relied upon by Classifieds2000 and Excite in determining
whether the Merger constitutes a reorganization under Section 368(a) of the
Code. The provisions and representations contained or referred to in this
Section 1.6 shall survive until the expiration of the applicable statute of
limitations.
2. REPRESENTATIONS AND WARRANTIES OF CLASSIFIEDS2000 AND
PRINCIPAL SHAREHOLDERS
Classifieds2000 and the Principal Shareholders, jointly and severally,
hereby represent and warrant as follows, except as set forth in the
Classifieds2000 Schedule of Exceptions (in
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numbered paragraphs that correspond to the Section numbers below) simultaneously
delivered to Excite with the execution of this Agreement. As used in this
Agreement, "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
Classifieds2000's business, results of operation or financial condition;
provided, however, that (ii) facts, events and matters arising from or due to
the execution of this Agreement or disclosure thereof, including, but not
limited to, changes to Classifieds2000s network affiliates shall not be deemed
to have a Material Adverse Effect on Classifieds2000, and (ii) facts, events and
matters that affect the Internet community as a whole and not Classifieds2000
disproportionately, shall not be deemed to have a Material Adverse Effect on
Classifieds2000. As used in this Agreement, the terms "TO ITS KNOWLEDGE" or "TO
CLASSIFIEDS2000'S KNOWLEDGE" shall mean the actual knowledge of the Principal
Shareholders and other officers of Classifieds2000:
2.1 Organization and Good Standing. Classifieds2000 is a corporation duly
organized, validly existing and in good standing under the law of the State of
California, and is in good standing under the law of the State of California,
has the corporate power and authority to own, operate and lease its properties
and to carry on its business as now conducted and as proposed to be conducted,
and is qualified as a foreign corporation in each jurisdiction in which a
failure to be so qualified could reasonably be expected to have a Material
Adverse Effect.
2.2 Power, Authorization and Validity.
2.2.1 Classifieds2000 has the right, power, legal capacity and
authority to enter into and, subject to Classifieds2000 Stockholder approval,
perform its obligations under this Agreement and all agreements to which
Classifieds2000 is or will be a party that are required to be executed pursuant
to this Agreement (the "CLASSIFIEDS2000 ANCILLARY AGREEMENTS"). The execution,
delivery and performance of this Agreement and the Classifieds2000 Ancillary
Agreements have been duly and validly approved and authorized by
Classifieds2000's Board of Directors.
2.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Classifieds2000 to enter into, and to perform
its obligations under, this Agreement and the Classifieds2000 Ancillary
Agreements, except for (a) the filing of the Agreement of Merger with the
California Secretary of State, and the filing of appropriate documents with the
relevant authorities of other states in which Classifieds2000 is qualified to do
business, if any, (b) such filings as may be required to comply with federal and
state securities laws, (c) consents required under contracts disclosed in
Exhibit 2.11 and (d) the approval of the Classifieds2000 Stockholders of the
transactions contemplated hereby, as provided under applicable law and
Classifieds2000's Certificate of Incorporation and Bylaws.
2.2.3 This Agreement and the Classifieds2000 Ancillary Agreements
are, or when executed by Classifieds2000 will be, valid and binding obligations
of Classifieds2000 enforceable in accordance with their respective terms, except
as to the effect, if any, of (a) applicable bankruptcy and other similar laws
affecting the rights of creditors generally, (b) rules of law governing specific
performance, injunctive relief and other equitable remedies and (c) the
enforceability of provisions requiring indemnification or contribution in
connection with the offering, issuance or sale of securities; provided, however,
that the Agreement of Merger will not be effective until filed with the
California Secretary of State.
2.3 Capitalization. The total number of shares of authorized capital stock
of Classifieds2000 is twenty-eight million (28,000,000), of which twenty million
(20,000,000)
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shares are designated Common Stock and eight million (8,000,000) shares are
designated Preferred Stock (collectively, the "CLASSIFIEDS2000 PREFERRED
STOCK"). Of the Classifieds2000 Preferred Stock, seven hundred sixty-two
thousand four hundred seventy-eight shares (762,478) are designated as Series A
Preferred Stock and one million three hundred eighty thousand (1,380,000) shares
are designated as Series B Preferred Stock. As of March 31, 1998, seven million
thirty-seven thousand three hundred fifty-five (7,037,355) shares of
Classifieds2000 Common Stock, seven hundred sixty-two thousand four hundred
seventy-eight shares (762,478) shares of Classifieds2000 Series A Preferred
Stock and one million three hundred sixty-two thousand seven hundred ninety-four
(1,362,794) shares of Classifieds2000 Series B Preferred Stock, are issued and
outstanding. An aggregate of two million five hundred fifty-nine thousand seven
hundred five (2,559,705) shares of Classifieds2000 Common Stock are reserved and
authorized for issuance pursuant to the Classifieds2000 Option Plan, of which
options to purchase a total of three hundred fifty-six thousand six hundred
fifty (356,650) shares of Common Stock are outstanding thereunder. Warrants to
purchase five thousand (5,000) shares of Classifieds2000 Common Stock and
twenty-seven thousand nine hundred six (27,906) shares of Series B Preferred
Stock are issued and outstanding. All issued and outstanding shares of
Classifieds2000 Capital Stock have been duly authorized and validly issued, are
fully paid and non assessable, are not subject to any right of rescission, and
have been offered, issued, sold and delivered by Classifieds2000 in compliance
with all registration or qualification requirements (or applicable exemptions
therefrom) of applicable federal and state securities laws. A list of all
holders of Classifieds2000 Common Stock, Preferred Stock, Options and Warrants
and the number of shares, options and warrants held by each has been delivered
by Classifieds2000 to Excite herewith as Exhibit 2.3. Except as set forth in
this Section 2.3 and in Exhibit 2.3, there are no options, warrants, calls,
commitments, conversion privileges or preemptive or other rights or agreements
outstanding to purchase any of Classifieds2000's authorized but unissued capital
stock or any securities convertible into or exchangeable for shares of
Classifieds2000 Capital Stock or obligating Classifieds2000 to grant, extend, or
enter into any such option, warrant, call, right, commitment, conversion
privilege or other right or agreement, and there is no liability for dividends
accrued but unpaid. Except as indicated in the Classifieds2000 Schedule of
Exceptions, there are no voting agreements, rights of first refusal or other
restrictions (other than normal restrictions on transfer under applicable
federal and state securities laws) applicable to any of Classifieds2000's
outstanding securities. Except as indicated in the Classifieds2000 Schedule of
Exceptions, Classifieds2000 is not under any obligation to register under the
Securities Act any of its presently outstanding securities or any securities
that may be subsequently issued. None of the Classifieds2000 Options or other
issuances of securities under the Classifieds2000 Option Plan or outside the
Classifieds2000 Option Plan are subject to acceleration or automatic vesting as
a result of the Merger.
2.4 Subsidiaries. Classifieds2000 does not have any subsidiaries or any
ownership interest, direct or indirect, in any corporation, partnership, joint
venture or other business entity other than passive equity ownership interests
held via mutual funds and other cash management accounts that in aggregate are
not material.
2.5 No Violation of Existing Agreements. Neither the execution and
delivery by Classifieds2000 of this Agreement nor of any Classifieds2000
Ancillary Agreement, nor the consummation by Classifieds2000 of the transactions
contemplated hereby or thereby, will conflict with, or (with or without notice
or lapse of time, or both) result in a termination, breach, impairment or
violation of (a) any provision of the Certificate of Incorporation or Bylaws of
Classifieds2000, as currently in effect, (b) in any material respect, any
Material Agreement (as
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defined in Section 2.11) to which Classifieds2000 is a party or by which
Classifieds2000 is bound, or (c) any federal, state, local or foreign judgment,
writ, decree, order, statute, rule or regulation applicable to Classifieds2000
or its assets or properties, except, in each case, where such conflict,
termination, breach, impairment or violation would not have a Material Adverse
Effect.
2.6 Litigation. There is no action, proceeding, claim or investigation
pending against Classifieds2000 before any court or administrative agency that
if determined adversely to Classifieds2000 may reasonably be expected to have a
Material Adverse Effect; nor, to the best of Classifieds2000's knowledge, has
any such action, proceeding, claim or investigation been threatened. There is,
to Classifieds2000's knowledge, no reasonable basis for any shareholder or
former shareholder of Classifieds2000, or any other person, firm, corporation,
or entity, to assert a claim against Classifieds2000 or Excite based upon: (a)
ownership or rights to ownership of any shares of Classifieds2000 Capital Stock
(except for dissenter's rights with respect to shares of Excite Common Stock
issuable by virtue of the Merger), (b) any rights as an Classifieds2000
Stockholder, including any option or preemptive rights or rights to notice or to
vote, or (c) any rights under any agreement among Classifieds2000 and the
Classifieds2000 Stockholders.
2.7 Taxes. Classifieds2000 has timely filed all federal, state, local and
foreign tax returns, estimates, information statements and reports required to
be filed with respect to Classifieds2000 and its operations (collectively,
"RETURNS"), has timely paid all taxes shown due on all Returns which have been
filed, has established an adequate accrual or reserve for the payment of all
taxes, due and payable, including reasonable accruals for taxes payable in
respect of the periods subsequent to the periods covered by the most recent
applicable Returns, has made all necessary estimated tax payments, and has no
material liability for taxes in excess of the amounts so paid or accruals or
reserves so established. To its knowledge, Classifieds2000 is not delinquent in
the payment of any tax nor delinquent in the filing of any Returns, and no
deficiencies for any tax have been threatened, claimed, proposed, or assessed in
writing by any taxing authority. Classifieds2000 has not executed any waiver of
any statute of limitations on or extending the period for the assessment or
collection of any tax. Classifieds2000 has not received any written notification
that any material issues have been raised (and are currently pending) by the
Internal Revenue Service or any other taxing authority (including but not
limited to any sales tax authority) regarding Classifieds2000. No tax return of
Classifieds2000 has ever been audited by the Internal Revenue Service or any
state taxing agency or authority. Classifieds2000 has provided to Excite copies
of all federal and state income and all state sales and use Returns for all
periods since the date of Classifieds2000's incorporation. There are no liens,
pledges, charges, claims, security interests or other encumbrances of any sort
on the assets of Classifieds2000 relating to or attributable to taxes, other
than liens for taxes not yet due and payable. There is no contract, agreement,
plan or arrangement, including but not limited to the provisions of this
Agreement, covering any employee or former employee of Classifieds2000 that,
individually or collectively, could reasonably be expected to give rise to the
payment of any amount that would be disallowed pursuant to Section 280G or
162(m) of the Code. Classifieds2000 is not a party to a tax sharing or
allocation agreement nor does Classifieds2000 owe any amount under any such
agreement. Classifieds2000 is not, and has not been at any time, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code. Classifieds2000 has not filed any consent agreement under
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of
the Code) owned by Classifieds2000. None of Classifieds2000's assets are treated
as "tax-exempt use property" within the meaning of Section
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168(h) of the Code. For the purposes of this Agreement, the terms "TAX" and
"TAXES" include all federal, state, local and foreign income, gains, franchise,
excise, property, sales, use, employment, license, payroll, occupation,
recording, value added or transfer taxes, governmental charges, fees, levies or
assessments (whether payable directly or by withholding), and, with respect to
such taxes, any estimated tax, interest and penalties or additions to tax and
interest on such penalties and additions to tax.
2.8 Classifieds2000 Financial Statements. Classifieds2000 has delivered to
Excite as Exhibit 2.8 Classifieds2000's (a) audited balance sheet as of December
31, 1997 (the "1997 BALANCE SHEET") and income statement and statement of cash
flows for the twelve (12) month period then ended (collectively, the "1997
FINANCIAL STATEMENTS"), and (b) unaudited balance sheet as of February 27, 1998
(the "FEBRUARY 28 BALANCE SHEET") and income statement and statement of cash
flows for the two (2) month period then ended (collectively, the "FEBRUARY
FINANCIAL STATEMENTS") (the 1997 Financial Statements and February Financial
Statements are collectively referred to herein as the "FINANCIAL STATEMENTS").
The Financial Statements are in accordance with the books and records of
Classifieds2000 and fairly present the financial condition of Classifieds2000 at
the dates therein indicated and the results of operations for the periods
therein specified in all material respects. The Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as to footnotes, and, with respect to the 1997
Financial Statements, normal year end or audit adjustments). Classifieds2000 has
no material debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, that is not
reflected or reserved against in the Financial Statements which would be
required under generally accepted accounting principles to be reflected or
reserved, except for those that may have been incurred (i) after the date of the
Financial Statements in the ordinary course of its business, consistent with
past practice and that are not material in amount either individually or
collectively, or (ii) in the course of entering into this Agreement, such as
attorneys' fees.
2.9 Title to Properties. Classifieds2000 has good and marketable title to
or a leasehold or other rights to use all of its assets as shown on the February
28 Balance Sheet, free and clear of all liens, charges, restrictions or
encumbrances (other than for taxes not yet due and payable) in excess of twenty
five thousand dollars ($25,000) in the aggregate. All machinery and equipment
included in such properties is in good condition and repair, normal wear and
tear excepted. Classifieds2000 is in compliance with all material terms of each
lease to which it is a party or by which it is otherwise bound. To
Classifieds2000's knowledge, Classifieds2000 is not in violation of any zoning,
building, safety or environmental ordinance, regulation or requirement or other
law or regulation applicable to the operation of owned or leased properties (the
violation of which would have a material adverse effect on its business), and
has not received any notice of such violation with which it has not complied.
2.10 Absence of Certain Changes. Since December 31, 1997, there has not
been with respect to Classifieds2000:
(a) any Material Adverse Effect;
(b) to its knowledge, any material contingent liability incurred
thereby as guarantor or otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of the material
properties of Classifieds2000 other than in the ordinary course of business;
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(d) any material obligation or liability incurred thereby other than
obligations and liabilities incurred in the ordinary course of business or in
connection with this Agreement;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
material properties or assets of Classifieds2000 other than in the ordinary
course of business;
(f) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of Classifieds2000;
(g) any declaration, setting aside or payment of any dividend on, or
the making of any other distribution in respect of, the capital stock thereof,
any split, combination or recapitalization of the capital stock thereof or any
direct or indirect redemption, purchase or other acquisition of the capital
stock thereof;
(h) any labor dispute or claim of unfair labor practices, any
material change in the compensation payable or to become payable to any of its
officers, employees or agents, or any material bonus payment or arrangement made
to or with any of such officers, employees or agents;
(i) any resignation or termination (whether involuntary or voluntary)
of any officers of Classifieds2000;
(j) any payment or discharge of a material lien or liability thereof
which lien was not either (i) shown on the 1997 Balance Sheet, or (ii) incurred
in the ordinary course of business thereafter; or
(k) any material obligation or liability incurred thereby to any of
its officers, directors or shareholders or any loans or advances made thereby to
any of its officers, directors or shareholders except normal compensation and
expense allowances payable to officers, consultants and directors.
2.11 Material Agreements, Contracts and Commitments. Except as set forth
on Exhibit 2.11 delivered to Excite herewith, Classifieds2000 is not a party or
subject to any oral or written contracts, obligations, commitments, plans,
leases, instruments, arrangements or licenses not entered into in the ordinary
course of business and which is material to the business of Classifieds2000
(each a "MATERIAL AGREEMENT"). Material Agreements shall include, without
limitation, any:
(a) Contract providing for potential payments by or to
Classifieds2000 in excess of Fifty Thousand Dollars ($50,000.00) or more;
(b) Product distribution agreement, development agreement, or license
agreement as licensor or licensee with a potential value in excess of $50,000
(except for standard non-exclusive software licenses granted to end-user
customers in the ordinary course of business the form of which has been provided
to Excite's counsel or standard licenses purchased by Classifieds2000 for
off-the-shelf software);
(c) Material agreement for the lease of real or personal property;
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(d) Joint venture contract or arrangement or any other agreement that
involves a sharing of profits with other persons with a potential value in
excess of $50,000;
(e) Instrument evidencing or related in any way to indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, or otherwise, except for trade
indebtedness incurred in the ordinary course of business, and except as
disclosed in the Financial Statements;
(f) Contract containing covenants purporting to limit
Classifieds2000's freedom to compete in any line of business in any geographic
area; or
(g) Stock redemption or purchase agreement yet to be performed.
To its knowledge, all Material Agreements listed in Exhibit 2.11
constitute valid and enforceable obligations of the parties thereto and are in
full force and effect. Classifieds2000 is not, nor, to the knowledge of
Classifieds2000 or the Principal Shareholders is any other party thereto, in
breach or default in any material respect under the terms of any such Material
Agreement, which breach or default may reasonably be expected to have a Material
Adverse Effect. A copy of each agreement or document listed on Exhibit 2.11 has
been delivered to Excite's counsel. Classifieds2000 is not a party to any
contract or arrangement which has had or could reasonably be expected to have a
Material Adverse Effect.
2.12 Intellectual Property. Classifieds2000 owns, or has the rights to
use, sell or license all Intellectual Property Rights (as defined below)
necessary or required for the conduct of, or used in, its business as presently
conducted and as presently proposed to be conducted (such Intellectual Property
Rights being hereinafter collectively referred to as the "CLASSIFIEDS2000 IP
RIGHTS") and such rights to use, sell or license are reasonably sufficient for
the conduct of its business and as presently proposed to be conducted. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not constitute a material breach of
any instrument or agreement governing any Classifieds2000 IP Right (the
"CLASSIFIEDS2000 IP RIGHTS AGREEMENTS"), will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Classifieds2000 IP Right or materially impair the right of Classifieds2000 to
use, sell or license any Classifieds2000 IP Right or portion thereof (except
where such breach, forfeiture or termination would not have a material adverse
effect on Classifieds2000, taken as a whole). There are no royalties, honoraria,
fees or other payments payable by Classifieds2000 to any person by reason of the
ownership, use, license, sale or disposition of the Classifieds2000 IP Rights
(other than as set forth in the Classifieds2000 IP Rights Agreements listed in
Exhibit 2.12). To its knowledge, neither the manufacture, marketing, license,
sale or intended use of any product currently licensed or sold by
Classifieds2000 or currently under development by Classifieds2000 violates any
license or agreement between Classifieds2000 and any third party or infringes
any Intellectual Property Right of any other party; and there is no pending or,
to the knowledge of Classifieds2000 or the Principal Shareholders, threatened
claim or litigation contesting the validity, ownership or right to use, sell,
license or dispose of any Classifieds2000 IP Right; nor, to the knowledge of
Classifieds2000 or the Principal Shareholders is there any reasonable basis for
any such claim; nor has Classifieds2000 received any notice asserting that any
Classifieds2000 IP Right or the proposed use, sale, license or disposition
thereof conflicts or will conflict with the rights of any other party, nor, to
the best knowledge of Classifieds2000 or the Principal Shareholders, is there
any reasonable basis for any such assertion. Classifieds2000 has taken
reasonable and practicable steps designed to safeguard and maintain the secrecy
and
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confidentiality of, and its proprietary rights in, all material Classifieds2000
IP Rights. Exhibit 2.12 contains a list of all applications, registrations,
filings and other formal actions made or taken pursuant to federal, state and
foreign laws by Classifieds2000 to perfect or protect its interest in
Classifieds2000 IP Rights, including, without limitation, all registered
patents, patent applications, registered copyrights, copyright applications,
registered trademarks, trademark applications, registered tradenames, issued
service marks, service mark applications and all Classifieds2000 IP Rights
Agreements (except for object code end-user licenses granted to end-users in the
ordinary course of business that permit use of software products without a right
to modify, distribute or sublicense the same). As used herein, the term
"INTELLECTUAL PROPERTY RIGHTS" shall mean all industrial and intellectual
property rights in any jurisdiction in the world, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service mark applications, copyright, copyright
applications, moral rights, franchises, licenses, inventories, know-how, trade
secrets, customer lists, proprietary processes and formulae, all source and
object code, algorithms, architecture, structure, display screens, layouts,
inventions, development tools and all documentation and media constituting,
describing or relating to the above, including, without limitation, manuals,
memoranda and records.
2.13 Compliance with Laws. Classifieds2000 has complied, or prior to the
Closing Date will have complied, and is or will be at the Closing Date in full
compliance, in all material respects with all applicable laws, ordinances,
regulations, and rules, and all orders, writs, injunctions, awards, judgments,
and decrees applicable to it or to the assets, properties, and business thereof
(the violation of which would have a material adverse effect upon its business),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state, and local laws,
ordinances, regulations, and all orders, writs, injunctions, awards, judgments,
and decrees pertaining to (i) the sale, licensing, leasing, ownership, or
management of its owned, leased or licensed real or personal property, products
and technical data, (ii) employment and employment practices, terms and
conditions of employment, and wages and hours and (iii) safety, health, fire
prevention, environmental protection, toxic waste disposal, building standards,
zoning and other similar matters (c) the Export Administration Act and
regulations promulgated thereunder and all other laws, regulations, rules,
orders, writs, injunctions, judgments and decrees applicable to the export or
re-export of controlled commodities or technical data and (d) the Immigration
Reform and Control Act except for any non-compliance which would not have a
Material Adverse Effect. Classifieds2000 has received all permits and approvals
from, and has made all filings with, third parties, including government
agencies and authorities, that are necessary in connection with its present
business and which, if not received or filed, would have a Material Adverse
Effect, other than changes that affect the Internet community as a whole and not
Classifieds2000 exclusively; provided that Classifieds2000 itself is not a party
to any such proceeding or investigation.
2.14 Certain Transactions and Agreements. To Classifieds2000's knowledge,
none of its officers or Principal Shareholders, nor any member of their
immediate families, has any direct or indirect ownership interest in any firm or
corporation that competes with Classifieds2000 (except with respect to any
interest in less than five percent (5%) of the stock of any corporation whose
stock is publicly traded). None of the officers, directors or Principal
Shareholders, nor any member of their immediate families, is directly or
indirectly interested in any contract or informal arrangement with
Classifieds2000, except for normal compensation for services as an officer,
consultant, director or employee thereof and contracts with respect to
Classifieds2000 Capital Stock, Classifieds2000 Options or Classifieds2000
Warrants. None of said officers,
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directors or Principal Shareholders, nor any member of their immediate families,
has any interest in any property, real or personal, tangible or intangible,
including inventions, patents, copyrights, trademarks or trade names or trade
secrets, used in or pertaining to the business of Classifieds2000, except for
the normal rights of a shareholder.
2.15.Employees, ERISA and Other Compliance.
2.15.1 Except as set forth in Exhibit 2.15.1, Classifieds2000 has no
employment contracts or consulting agreements currently in effect that are not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions). All
current and former officers and employees and all current consultants of
Classifieds2000 having access to proprietary information or in any way involved
with the creation of Classifieds2000 Intellectual Property Rights have executed
and delivered to Classifieds2000 an agreement regarding the protection of such
proprietary information or Classifieds2000 Intellectual Property Rights and the
assignment of inventions to Classifieds2000; copies of the form of all such
agreements have been delivered to Excite's counsel.
2.15.2 Classifieds2000 (i) has not ever been nor is subject to a
union organizing effort, (ii) is not subject to any collective bargaining
agreement with respect to any of its employees, (iii) is not subject to any
other contract, written or oral, with any trade or labor union, employees'
association or similar organization, or (iv) has not any current labor disputes.
Classifieds2000 has good labor relations and has no knowledge of any facts
indicating that the consummation of the transactions contemplated hereby will
have a material adverse effect on such labor relations and has no knowledge that
any of its key employees intends to leave its employ.
2.15.3 Exhibit 2.15.3 identifies each "EMPLOYEE BENEFIT PLAN," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), currently or previously maintained, contributed to or
entered into by Classifieds2000 under which Classifieds2000 or any ERISA
Affiliate (as defined below) thereof has any present or future obligation or
liability (collectively, the "CLASSIFIEDS2000 EMPLOYEE PLANS"). For purposes of
this Section 2.15.3, "ERISA AFFILIATE" shall mean any entity which is a member
of (A) a "CONTROLLED GROUP OF CORPORATIONS," as defined in Section 414(b) of the
Code, (B) a group of entities under "common control," as defined in Section
414(c) of the Code, or (C) an "affiliated service group," as defined in Section
414(m) of the Code, or treasury regulations promulgated under Section 414(o) of
the Code, any of which includes Classifieds2000. Except as set forth in Exhibit
2.15.3, copies of all Classifieds2000 Employee Plans (and, if applicable,
related trust agreements) and all amendments thereto and summary plan
descriptions thereof (including summaries of material modifications) have been
delivered to Excite or its counsel. All Classifieds2000 Employee Plans which
individually or collectively would constitute an "employee pension benefit
plan," as defined in Section 3(2) of ERISA (collectively, the "CLASSIFIEDS2000
PENSION PLANS"), are identified as such in Exhibit 2.15.3. To its knowledge, all
contributions due from Classifieds2000 prior to the Closing Date with respect to
any of the Classifieds2000 Employee Plans have been or will be made prior to
such Closing Date or have otherwise been accrued on Classifieds2000's financial
statements as required by generally accepted accounting principles and all such
contributions have or will be made in accordance with ERISA. To its knowledge,
each Classifieds2000 Employee Plan has been maintained substantially in
compliance with its terms and with the requirements prescribed by any and all
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statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such Classifieds2000 Employee Plans.
2.15.4 No "prohibited transaction," as defined in Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any
Classifieds2000 Employee Plan which is covered by Title I of ERISA which would
result in a material liability to Classifieds2000 taken as a whole, excluding
transactions effected pursuant to (or covered by) a statutory, regulatory or
administrative exemption. To its knowledge, neither Classifieds2000 nor any of
its officers or directors have engaged in any transaction or acted or failed to
act in any manner that violates the fiduciary requirements of ERISA with respect
to any Classifieds2000 Employee Plan and that would subject Classifieds2000 or
any of its officers or directors to a material liability. No event or omission
has occurred in connection with any Classifieds2000 Employee Plan that would
make Classifieds2000 or any of its officers or directors liable for any material
tax (as defined in Section 2.7) or material penalty pursuant to Sections 4972,
4975, 4976 or 4979 of the Code or Section 502 of ERISA.
2.15.5 Except as set forth in Exhibit 2.15.5, any Classifieds2000
Pension Plan which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination from the Internal Revenue Service that
the Plan document for such Classifieds2000 Pension Plan satisfies the
requirements for qualification, and Classifieds2000 is not aware of any reason
why such determination may not be relied upon by such plan (other than changes
in the law resulting from the Small Business Job Protection Act of 1996 and the
Taxpayers Relief Act of 1997).
2.15.6 Exhibit 2.15.6 lists each employment, severance or other
similar contract, arrangement or policy and each plan or arrangement (written or
oral) providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which (A) is not an Classifieds2000 Employee
Plan, (B) is entered into, maintained or contributed to, as the case may be, by
Classifieds2000 and (C) covers any employee or former employee of
Classifieds2000. Such contracts, plans and arrangements as are described in this
Section 2.15.6 are herein referred to collectively as the "CLASSIFIEDS2000
BENEFIT ARRANGEMENTS." Each Classifieds2000 Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such Classifieds2000 Benefit Arrangement. Classifieds2000 has
delivered to Excite or its counsel a complete and correct copy or description of
each Classifieds2000 Benefit Arrangement.
2.15.7 Except as set forth in Exhibit 2.15.7, there has been no
amendment to, or written interpretation or announcement (whether or not written)
by Classifieds2000 relating to, or material change in employee participation or
coverage under, any Classifieds2000 Employee Plan or Classifieds2000 Benefit
Arrangement that would increase materially the expense of maintaining such
Classifieds2000 Employee Plan or Classifieds2000 Benefit Arrangement above the
level of the expense incurred in respect thereof for the fiscal year ended
December 31, 1997.
2.15.8 Classifieds2000 (or its designee) has timely provided to
individuals entitled thereto all required notices and coverage pursuant to
Section 4980B of the Code and the
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Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code) under any Classifieds2000 Employee Plan occurring prior to and including
the Closing Date, except where the failure to do so would not result in a
material liability to Classifieds2000 and no material Tax payable on account of
Section 4980B of the Code has been incurred with respect to any current or
former employees (or their beneficiaries) of Classifieds2000.
2.15.9 No benefit payable or which may become payable by
Classifieds2000 due to the consummation of the transactions contemplated by this
Agreement or pursuant to any Classifieds2000 Employee Plan or any
Classifieds2000 Benefit Arrangement shall constitute an "excess parachute
payment" (as defined in Section 280G(b)(1) of the Code) which is subject to the
imposition of a material excise Tax under Section 4999 of the Code or which
would not be deductible by reason of Section 280G of the Code.
2.15.10 Classifieds2000 is in compliance in all material respects
with all applicable laws, agreements and contracts relating to employment,
employment practices, wages, hours, and terms and conditions of employment,
including, but not limited to, employee compensation matters, but not including
ERISA.
2.15.11 To Classifieds2000's knowledge, no employee of
Classifieds2000 is in violation of any term of any employment contract, patent
disclosure agreement, noncompetition agreement, or any other contract or
agreement, or any restrictive covenant relating to the right of any such
employee to be employed thereby, or to use trade secrets or proprietary
information of others, and, to its knowledge, the employment of such employees
by Classifieds2000 does not subject Classifieds2000 to any liability.
2.15.12 A list of all employees, officers and consultants of
Classifieds2000 and their current compensation has been delivered to Excite.
2.15.13 Except for the agreements described in Section 1.1.2 hereof,
Classifieds2000 is not a party to any (a) agreement with any executive officer
or other key employee thereof (i) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving Classifieds2000 in the nature of any of the transactions contemplated
by this Agreement and the Agreement of Merger, (ii) providing any term of
employment or compensation guarantee, or (iii) providing severance benefits or
other benefits after the termination of employment of such employee regardless
of the reason for such termination of employment, or (b) agreement or plan,
including, without limitation, any stock option plan, stock appreciation rights
plan or stock purchase plan, any of the benefits of which will be materially
increased, or the vesting of benefits of which will be materially accelerated,
by the occurrence of any of the transactions contemplated by this Agreement and
the Agreement of Merger or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement and the Agreement of Merger.
2.16 Corporate Documents. Classifieds2000 has made available to Excite for
examination all documents and information listed in the Classifieds2000 Schedule
of Exceptions or other Exhibits called for by this Agreement or which have been
requested by Excite's legal counsel, including, without limitation, the
following: (a) copies of Classifieds2000's Articles of Incorporation and Bylaws
as currently in effect; (b) its Minute Book containing all records of all
proceedings, consents, actions, and meetings of the shareholders, the board of
directors and any committees thereof; (c) its stock ledger and journal
reflecting all stock issuances and transfers;
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and (d) all material permits, orders, and consents issued by any regulatory
agency with respect to Classifieds2000, or any securities of Classifieds2000,
and all applications for such permits, orders, and consents.
2.17 No Brokers. Neither Classifieds2000 nor any of the Principal
Shareholders are obligated for the payment of fees or expenses of any investment
banker, broker or finder in connection with the origin, negotiation or execution
of this Agreement or the Classifieds2000 Ancillary Agreements or in connection
with any transaction contemplated hereby or thereby.
2.18 Disclosure. Neither this Agreement, its exhibits and schedules, nor
any of the certificates or documents to be delivered by Classifieds2000 to
Excite under this Agreement, when taken together, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained herein and therein, in light of the circumstances
under which such statements were made, not materially misleading.
2.19 Information Supplied. None of the information supplied or to be
supplied by Classifieds2000 to its Stockholders in connection with any written
consent by Stockholders (collectively, "STOCKHOLDER MATERIALS"), at the date
such information was supplied prior to the time the Classifieds2000 Stockholders
were requested to execute a written consent to approve the Merger, contained or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not materially misleading; provided, however, that Classifieds2000 makes
no representations or warranties regarding information furnished by or related
to Excite.
2.20 Insurance. Classifieds2000 maintains fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance which it believes to be reasonably prudent for similarly sized
and similarly situated businesses.
2.21 Environmental Matters.
2.21.1 During the period that Classifieds2000 has leased or owned its
properties or owned or operated any facilities, there have been no disposals,
releases or threatened releases of Hazardous Materials (as defined below) by
Classifieds2000, or to Classifieds2000's or the Principal Shareholder's
knowledge, by others, on, from or under such properties or facilities, the
liability for which would have a material adverse effect on Classifieds2000's
business. Classifieds2000 has no knowledge of any presence, disposals, releases
or threatened releases of Hazardous Materials on, from or under any of such
properties or facilities, which may have occurred prior to Classifieds2000
having taken possession of any of such properties or facilities. For the
purposes of this Agreement, the terms "disposal," "release," and "threatened
release" shall have the definitions assigned thereto by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA"). For the purposes of this Agreement
"HAZARDOUS MATERIALS" shall mean any hazardous or toxic substance, material or
waste which is or becomes prior to the Closing regulated under, or defined as a
"hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous
materials," "toxic substance" or "hazardous chemical" under (1) CERCLA; (2) any
similar federal, state or local law; or (3) regulations promulgated under any of
the above laws or statutes.
2.21.2 To the knowledge of Classifieds2000 and the Principal
Shareholders, none of the properties or facilities of Classifieds2000 is in
material violation of any federal, state or
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local law, ordinance, regulation or order relating to industrial hygiene or to
the environmental conditions on, under or about such properties or facilities,
including, but not limited to, soil and ground water condition. During the time
that Classifieds2000 has owned or leased its properties and facilities,
Classifieds2000 has not used, generated, manufactured or stored on, under or
about such properties or facilities or transported to or from such properties or
facilities any Hazardous Materials except in substantial accordance with
applicable environmental laws.
2.21.3 During the time that Classifieds2000 has owned or leased its
respective properties and facilities, there has been no litigation brought or,
to its knowledge threatened, against Classifieds2000 by, or any settlement
reached by Classifieds2000 with, any party or parties alleging the presence,
disposal, release or threatened release of any Hazardous Materials on, from or
under any of such properties or facilities.
3. REPRESENTATIONS AND WARRANTIES OF EXCITE AND MERGER SUB
Excite and Merger Sub hereby jointly and severally represent and warrant
as follows, that, except as set forth on the Excite Schedule of Exceptions
delivered to Classifieds2000 as Exhibit 3.0:
3.1 Organization and Good Standing.
3.1.1 Excite is a corporation duly organized, validly existing and in
good standing under the laws of the State of California, and has the corporate
power and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified as a
foreign corporation in each jurisdiction in which a failure to be so qualified
could reasonably be expected to have a material adverse effect on its present
operations or financial condition.
3.1.2 Merger Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified as a foreign corporation in each jurisdiction in which a failure to be
so qualified could reasonably be expected to have a material adverse effect on
its present operations or financial condition.
3.2 Power, Authorization and Validity.
3.2.1 Excite and Merger Sub have the right, power, legal capacity and
authority to enter into and perform their obligations under this Agreement, and
all agreements to which Excite or Merger Sub is or will be a party that are
required to be executed pursuant to this Agreement (the "Excite Ancillary
Agreements"). The execution, delivery and performance of this Agreement and the
Excite Ancillary Agreements have been duly and validly approved and authorized
by Excite's Board of Directors and Merger Sub's Board of Directors and sole
stockholder.
3.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Excite or Merger Sub to enter into, and to
perform its obligations under, this Agreement and the Excite Ancillary
Agreements, except for (a) the filing of the Agreement of Merger with the
California Secretary of State, the filing of appropriate documents with the
relevant authorities of other states in which Excite and Merger Sub are
qualified to do business, if any; and (b) such filings as may be required to
comply with federal and state securities laws.
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3.2.3 This Agreement and the Excite Ancillary Agreements are, or when
executed by Excite and/or Merger Sub (as applicable) will be, valid and binding
obligations of Excite and Merger Sub enforceable in accordance with their
respective terms, except as to the effect, if any, of (a) applicable bankruptcy
and other similar laws affecting the rights of creditors generally, (b) rules of
law governing specific performance, injunctive relief and other equitable
remedies and (c) the enforceability of provisions requiring indemnification or
contribution in connection with the offering, issuance or sale of securities;
provided, however, that the Agreement of Merger will not be effective until
filed with the California Secretary of State.
3.2.4 Due Authorization. The Excite Common Stock to be issued to
Classifieds2000 Stockholders in the Merger, when issued by Excite pursuant to
the terms of this Agreement, will be duly authorized, validly issued, fully paid
and non-assessable, will be issued in compliance with applicable federal and
state securities laws and will be free and clear of all liens, encumbrances and
adverse claims and, except as provided in the Classifieds2000 Affiliates
Agreement (as defined in Section 4.11 hereof), may be resold by Classifieds2000
affiliates in accordance with Rule 145 of the Securities Act and the terms of
any applicable registration rights agreement with respect to such shares and may
be freely resold, without restriction, by non-affiliates of Classifieds2000.
3.3 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement nor any Excite Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Certificate of Incorporation of Excite or Merger
Sub, respectively, or the Bylaws of Excite or Merger Sub, all as currently in
effect, (b) in any material respect, any material instrument or contract to
which Excite or Merger Sub is a party or by which Excite or Merger Sub is bound,
or (c) any federal, state, local or foreign judgment, writ, decree, order,
statute, rule or regulation applicable to Excite or Merger Sub or their assets
or properties. Excite is not currently in material violation of any agreement
material to its business.
3.4 Disclosure. Excite has made available to Classifieds2000 an investor
disclosure package consisting of true and complete copies of (a) all Forms 10-K,
10-Q and 8-K filed by Excite with the Securities and Exchange Commission (the
"SEC") since its Initial Public Offering on April 10, 1996 (the "IPO") and up to
the date of this Agreement, (b) any registration statement and amendments
thereto filed with the SEC by Excite in the twelve (12) month period prior to
execution of this Agreement, and (c) all proxy materials distributed to Excite's
shareholders since the IPO and up to the date of this Agreement (collectively,
the "SEC REPORTS"). The SEC Reports (i) at the time filed, complied in all
material respects with applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) do not, when taken as a whole as of
the date of this Agreement, contain any untrue statement of a material fact or
fail to state a material fact required to be stated in such SEC Reports or
necessary in order to make the statements in such SEC Reports, in light of the
circumstances under which they were made, not misleading. Each of the
consolidated financial statements (including, in each case, any related notes)
contained in the SEC Reports, including any SEC Reports filed after the date of
this Agreement until the Closing, complied or will comply as to form in all
material respect with the applicable published rules and regulations of the SEC
with respect thereto, was prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
and fairly presented the consolidated financial position of Excite as of the
respective dates
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and the consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount.
3.5 Absence of Certain Changes. Since the December 31, 1997 financial
statements included in the SEC Reports, there has not been any change in the
financial condition, properties, assets, liabilities, business or operations of
Excite which change by itself or in conjunction with all other such changes,
whether or not arising in the ordinary course of business, has had or will have
a material adverse effect thereon except as disclosed in the SEC Reports.
3.6 Compliance with Laws. Excite and Merger Sub have complied, or prior to
the Closing Date will have complied, and are or will be at the Closing Date in
full compliance, in all material respects with all applicable laws, ordinances,
regulations, and rules, and all orders, writs, injunctions, awards, judgments,
and decrees applicable to them, the violation of which would have a material
adverse effect upon their business. Excite and Merger Sub have received all
permits and approvals from, and have made all filings with, third parties,
including government agencies and authorities, that are necessary in connection
with their present business. To Excite's and Merger Sub's knowledge, there are
no legal or administrative proceedings or investigations pending or threatened,
that, if enacted or determined adversely to them, would result in any material
adverse change in the present or future operations or financial condition
thereof, other than changes that affect the Internet Community as a whole and
not Excite exclusively; provided that Excite itself is not a party to any such
proceeding or investigation.
3.7 Information Supplied. None of the information supplied or to be
supplied by Excite for distribution to Classifieds2000 Stockholders in
connection with any Stockholder vote, including the SEC Reports, at the date
such information was supplied prior to the time Classifieds2000 Stockholders
were requested to execute a written consent to approve the Merger, contained or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not materially misleading; provided, however, that Excite makes no
representations or warranties regarding information furnished by or related to
Classifieds2000.
3.8 No Brokers. Excite and Merger Sub are not obligated for the payment of
fees or expenses of any investment banker, broker or finder in connection with
the origin, negotiation or execution of this Agreement or the Excite Ancillary
Agreements or in connection with any transaction contemplated hereby or thereby.
4. CLASSIFIEDS2000 AND PRINCIPAL SHAREHOLDER PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Classifieds2000 and each of the Principal Shareholders for purpose of
Sections 4.4 and 4.10 only, covenant and agree as follows:
4.1 Advice of Changes. Classifieds2000 will promptly advise Excite in
writing (a) of any event that would render any representation or warranty of
Classifieds2000 contained in this Agreement, if made on or as of the date of
such event or the Closing Date, untrue or inaccurate in any material and adverse
respect and (b) of any Material Adverse Effect, provided, however, that
Classifieds2000 need not notify Excite of incurring continuing losses in its
business consistent
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with past practices or incurring normal and reasonable liabilities for services
in connection with this Agreement.
4.2 Maintenance of Business. Classifieds2000 will use its best efforts to
carry on and preserve its business and its relationships with customers,
suppliers, employees and others in substantially the same manner as it has prior
to the date hereof. If Classifieds2000 becomes aware of a material deterioration
in the relationship with any material customer, supplier or key employee, it
will promptly bring such information to the attention of Excite in writing and,
if requested by Excite, will exert its best efforts to restore the relationship.
4.3 Conduct of Business. Classifieds2000 will continue to conduct its
business and maintain its business relationships in the ordinary and usual
course and will not, without the prior written consent of Excite:
(a) borrow an aggregate of over $100,000 other than pursuant to
Classifieds2000's existing lines of credit;
(b) enter into any transaction not in the ordinary course of business
or which involves an expense or capital commitment by Classifieds2000 in excess
of One Hundred Thousand Dollars ($100,000.00) or which obligates Classifieds2000
for a period exceeding six (6) months other than fees and expenses associated
with this Agreement;
(c) encumber or permit to be encumbered any of its assets or grant
liens therein;
(d) dispose of any portion of its assets with a value exceeding One
Hundred Thousand Dollars ($100,000);
(e) enter into any lease or contract for the purchase or sale of any
property, real or personal, except in the ordinary course of business consistent
with past practice;
(f) fail to maintain its equipment and other assets in good working
condition and repair according to the standards it has maintained to the date of
this Agreement, subject only to ordinary wear and tear;
(g) pay any bonus, royalty, increased salary or special remuneration
to any officer, employee or consultant or agree to same or enter into any new
employment, severance, "golden parachute" or consulting agreement with any such
person;
(h) change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock (other than the repurchase of capital stock held by former
employees in conformity with the terms and conditions of existing option grants
and repurchase agreements);
(j) amend or terminate any Material Agreement to which it is a party
except those amended or terminated in the ordinary course of business,
consistent with past practice;
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(k) lend any amount to any person or entity, other than advances for
travel and expenses which are incurred in the ordinary course of business
consistent with past practice, not material in amount and documented by receipts
for the claimed amount;
(l) guarantee or act as a surety for any obligation except for the
endorsement of checks and other negotiable instruments in the ordinary course of
business, consistent with past practice, which are not material in amount;
(m) waive or release any material right or claim except in the
ordinary course of business, consistent with past practice;
(n) issue or sell any shares of its capital stock of any class
(except upon the exercise of a convertible security, option or warrant currently
outstanding or pursuant to outstanding offer letters to prospective employees,
copies of which have previously been provided to Excite), or any other of its
securities, or issue or create any warrants, obligations, subscriptions,
options, convertible securities, or other commitments to issue shares of capital
stock, or (except pursuant to contractual obligations currently in existence)
accelerate the vesting of any outstanding option or other security;
(o) split or combine the outstanding shares of its capital stock of
any class or enter into any recapitalization affecting the number of outstanding
shares of its capital stock of any class or affecting any other of its
securities;
(p) merge, consolidate or reorganize with, or acquire any entity;
(q) amend its Articles of Incorporation or Bylaws;
(r) license any of its technology or intellectual property except in
the ordinary course of business consistent with past practice;
(s) agree to any audit assessment by any tax authority or file any
federal or state income or franchise tax return unless copies of such returns
have been delivered to Excite for its review and approved by Excite prior to
filing;
(t) change any insurance coverage or issue any certificates of
insurance;
(u) hire or terminate any employee or consultant, except in the
ordinary course of business; or
(v) adopt or amend any employee benefit plan
4.4 Stockholders Approval. Classifieds2000 will obtain the written consent
of the Classifieds2000 Stockholders at the earliest practicable date approving
this Agreement, the Classifieds2000 Ancillary Agreements, the Merger and related
matters, which approval will be unanimously recommended by Classifieds2000's
Board of Directors and management. To the extent that the Principal Shareholders
hold any Classifieds2000 Capital Stock at the effective date of the written
consent, each Principal Shareholder agrees to execute the written consent
approving this Agreement, Merger and all related matters.
4.5 Information Statement. Classifieds2000 will send to the
Classifieds2000 Stockholders in a timely manner, for the purpose of considering
and executing a written consent
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approving the Merger, the Stockholder Materials. Classifieds2000 will promptly
provide all information relating to its business or operations necessary for
inclusion in the Stockholder Materials to satisfy all requirements of applicable
state and federal securities laws. Classifieds2000 and Excite each shall be
solely responsible for any statement, information or omission in the Stockholder
Materials relating to it or its affiliates based upon written information
furnished by it. Classifieds2000 will not provide or publish to the
Classifieds2000 Stockholders any material concerning it or its affiliates that
violates the Securities Act or the United States Securities Exchange Act of
1934, as amended, (the "EXCHANGE ACT") with respect to the transactions
contemplated hereby.
4.6 Regulatory Approvals. Classifieds2000 will execute and file, or join
in the execution and filing, of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement (except for any consent or approval which would not interfere
with the Merger or otherwise have a Material Adverse Effect). Classifieds2000
will use its best efforts to obtain all such authorizations, approvals and
consents.
4.7 Necessary Consents. Classifieds2000 will use its best efforts to
obtain such written consents and take such other actions as may be necessary or
appropriate in addition to those set forth in Section 4.6 to allow the
consummation of the transactions contemplated hereby and to allow Excite to
carry on Classifieds2000's business after the Closing.
4.8 Litigation. Classifieds2000 will notify Excite in writing promptly
after learning of any actions, suits, proceedings or investigations by or before
any court, board or governmental agency, initiated by or against it, or known by
it to be threatened against it.
4.9 Access to Information. Until the Closing, Classifieds2000 will allow
Excite and its agents reasonable access to the files, books, records and offices
of Classifieds2000, including, without limitation, any and all information
relating to Classifieds2000's taxes, commitments, contracts, leases, licenses,
and real, personal and intangible property and financial condition.
Classifieds2000 will cause its accountants to cooperate with Excite and its
agents in making available all financial information reasonably requested,
including without limitation the right to examine all working papers pertaining
to all financial statements prepared or audited by such accountants. All such
information shall be subject to the terms of the Non-Disclosure Agreement
entered into by the parties hereto.
4.10 Satisfaction of Conditions Precedent. Classifieds2000 will use its
best efforts to satisfy or cause to be satisfied all the conditions precedent
which are set forth in Section 8, and Classifieds2000 will use its best efforts
to cause the transactions contemplated by this Agreement to be consummated.
4.11 Classifieds2000 Affiliates Agreements. To ensure that the issuance of
Excite Common Stock in the Merger complies with the Securities Act and that the
Merger will be accounted for as a "pooling of interests," concurrently with the
execution of this Agreement, Classifieds2000 will deliver to Excite a letter
identifying all persons who are, in Classifieds2000's reasonable judgment,
"Affiliates" of Classifieds2000 at the time this Agreement is executed,
including, all (i) officers, (ii) directors and (iii) all persons or entities
who own ten percent (10%) or greater of Classifieds2000 Capital Stock, assuming
in that calculation that all Classifieds2000 Options, Warrants and Convertible
Securities have been
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exercised. Classifieds2000 will provide Excite with all information and
documents reasonably necessary to evaluate this list for compliance with
generally accepted accounting principles and securities laws, as applicable.
Classifieds2000 will use its best efforts to cause each of its affiliates to
deliver to Excite, prior to Closing, a written agreement (the "CLASSIFIEDS2000
AFFILIATES AGREEMENT"), substantially in the form of Exhibit 4.11.
4.12 Classifieds2000 Stockholder Representations. To ensure that the
Merger will qualify as a reorganization for federal income tax purposes,
Classifieds2000 will use its best efforts to cause each of its Affiliates, as
defined in Section 4.11 above, to execute, at or before the Closing, the
Classifieds2000 Affiliates Agreement which contains such representations as may
be reasonably requested by Excite, its accountants or its attorneys for the
purpose of ensuring such tax treatment.
4.13 Classifieds2000 Dissenting Shares. As promptly as practicable after
the date of the Classifieds2000 Stockholders' written consent and prior to the
Closing Date, Classifieds2000 shall furnish Excite with the name and address of
each Classifieds2000 Stockholder who could request appraisal rights pursuant to
the applicable provisions of the California General Corporation Law (the
"CLASSIFIEDS2000 DISSENTING STOCKHOLDER") and the number of Classifieds2000
Capital Stock (the "DISSENTING SHARES") owned by such Classifieds2000 Dissenting
Stockholder.
4.14 Pooling Accounting. Classifieds2000 shall use its best efforts to
cause the business combination to be effected by the Merger to be accounted for
as a pooling of interests. Classifieds2000 shall use its best efforts to cause
its affiliates not to take any action that would adversely affect the ability of
Excite to account for the business combination to be effected by the Merger as a
pooling of interests.
4.15 Blue Sky Laws. Classifieds2000 shall use its best efforts to assist
Excite to the extent necessary to comply with the securities and Blue Sky laws
of all jurisdictions which are applicable in connection with the Merger.
4.16 Investment Representation Letters and Investor Suitability
Questionnaires. Classifieds2000 shall request each of its shareholders to
complete an Investor Suitability Questionnaire and to sign an Investor
Representation Letter, in the form agreed to by Classifieds2000 and Excite,
prior to Close.
4.17 Termination of Benefit Plans. The Classifieds2000 Board of Directors
shall approve the termination of any Classifieds2000 Pension Plan which is
covered by Section 401(k) of the Code, effective as of the Effective Time, or
take such other actions concerning such Classifieds2000 Pension Plan, as
reasonably requested by Excite.
5. EXCITE AND MERGER SUB PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Excite and Merger Sub covenant and agree as follows:
5.1 Advice of Changes. Excite and Merger Sub will promptly advise
Classifieds2000 in writing (a) of any event that would render any representation
or warranty of Excite or Merger Sub contained in this Agreement, if made on or
as of the date of such event or the Closing Date, untrue or inaccurate in any
material and adverse respect and (b) of any material adverse change in Excite's
or Merger Sub's business, results of operations or financial condition. As used
in this
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Agreement with respect to Excite and Merger Sub, "MATERIAL ADVERSE EFFECT" shall
mean a material adverse effect on the business, results of operation or
financial condition of Excite and its subsidiaries, taken as a whole; provided,
however, that (ii) facts, events and matters arising from or due to the
execution of this Agreement or disclosure thereof shall not be deemed to have a
Material Adverse Effect on Excite or Merger Sub, and (ii) facts, events and
matters that affect the Internet community as a whole and not Excite and Merger
Sub disproportionately, shall not be deemed to have a Material Adverse Effect on
Excite and Merger Sub.
5.2 Regulatory Approvals. Excite and Merger Sub will execute and file, or
join in the execution and filing, of any application or other document that may
be necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement. Each of Excite and Merger Sub will use its best efforts to
obtain all such authorizations, approvals and consents.
5.3 Satisfaction of Conditions Precedent. Each of Excite and Merger Sub
will use its best efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Section 7, and each of Excite and Merger Sub
will use its best efforts to cause the transactions contemplated by this
Agreement to be consummated and, without limiting the generality of the
foregoing, to obtain all consents and authorizations of third parties and to
make all filings with, and give all notices to, third parties that may be
necessary or reasonably required on its part in order to effect the transactions
contemplated hereby.
5.4 Excite Affiliates Agreements. To ensure that the Merger will be
accounted for as a "pooling of interests," Excite will use its best efforts to
cause each of its affiliates, as defined in Section 4.11 above, to sign and
deliver to Excite a written agreement (the "EXCITE AFFILIATES AGREEMENT"), in
the form of Exhibit 5.4, providing that such person will make no disposition of
Excite Common Stock (a) in the thirty (30) day period prior to the Effective
Time or (b) after the Effective Time until Excite shall have publicly released a
report including the combined financial results of Excite and Classifieds2000
for a period of at least thirty (30) days of combined operations of Excite and
Classifieds2000. Excite will not release any Excite Affiliate from his, her or
its obligations under the terms of the Excite Affiliates Agreement until such
time as all Classifieds2000 Affiliates have been released from their obligations
under the terms of the Classifieds2000 Affiliates Agreement.
5.5 Blue Sky Laws. Excite shall take such steps as may be necessary to
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Merger.
5.6 Pooling Accounting. Excite shall use its best efforts to cause the
business combination to be effected by the Merger to be accounted for as a
pooling of interests. Excite shall use its best efforts to cause its affiliates
not to take any action that would adversely affect the ability of Excite to
account for the business combination to be effected by the Merger as a pooling
of interests.
5.7 Employee Matters.
5.7.1 Employee Stock Purchase Plan. Subject to compliance with
pooling of interests accounting treatment and the requirements of any applicable
laws, employees of Classifieds2000 who become employees of Excite at or after
the Effective Time shall be
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permitted to participate in the Excite 1997 Employee Stock Purchase Plan (the
"ESPP") commencing with the first Offering Period (as defined in the ESPP)
following the Effective Time and such employees will receive full credit for the
period of their employment with Classifieds2000 for such purposes, subject to
compliance with the eligibility and other provisions of such plan; provided,
however, nothing contained herein shall require Excite to continue the
employment of any such employee.
5.7.2 Other Benefit Plans. Subject to compliance with pooling of
interests accounting treatment and the requirements of any applicable laws,
employees of Classifieds2000 who become employees of Excite at or after the
Effective Time will be permitted to participate in those employee benefit plans
sponsored by Excite in which similarly situated Excite employees participate
subject to the eligibility and other provisions of such Excite employee benefit
plans. Such employees will receive full credit for the period of their
employment with Classifieds2000 by Excite for such purposes; provided, however,
nothing contained herein shall require Excite to continue to employment of any
such employee.
5.7.3 Rollover of 401(k) Investments. Each individual employee of
Classifieds2000 shall be allowed to rollover such employee's 401(k) account from
Classifieds2000's terminated 401(k) plan to Excite's 401(k) plan.
5.8 Update SEC Reports. Excite shall update the SEC Reports and any other
disclosures related thereto for any material information which has come into
existence since the SEC Reports were previously provided to Classifieds2000's
counsel for delivery to the Classifieds2000 Stockholders through the Stockholder
mailing, until and through Closing.
6. CLOSING MATTERS
6.1 The Closing. Subject to termination of this Agreement as provided in
Section 9 below, the Closing will take place at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Alto, California on or before March 31, 1998
(the "CLOSING"), or, if all conditions to closing have not been satisfied or
waived by such date, such other place, time and date as Classifieds2000 and
Excite may mutually select (the "CLOSING DATE"). Concurrently with the Closing,
an Agreement of Merger will be filed in the office of the California Secretary
of State. The Agreement of Merger provides that the Merger shall become
effective upon filing.
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6.2 Exchange of Certificates.
6.2.1 As of the Effective Time, all shares of Classifieds2000 Capital
Stock that are outstanding immediately prior thereto will, by virtue of the
Merger and without further action, cease to exist and will be converted into the
right to receive from Excite the number of shares of Excite Common Stock
determined as set forth in Section 1.1.1, subject to Sections 1.1.4, 1.1.5, 1.2
and 1.3.
6.2.2 Each holder of shares of Classifieds2000 Capital Stock that are
not Dissenting Shares will surrender the certificate(s) for such shares (the
"CLASSIFIEDS2000 CERTIFICATES"), duly endorsed as requested by Excite, to
Excite's counsel for cancellation for Excite's records. Promptly following the
Closing, Excite's counsel will forward a letter of instruction to BankBoston,
N.A., acting as the transfer agent for Excite, (the "EXCHANGE AGENT")
instructing the Exchange Agent to issue to Excite's counsel a certificate for
the number of shares of Excite Common Stock to which such holder is entitled
pursuant to Section 1.1.1 hereof. Excite will distribute any cash payable under
Section 1.2.
6.2.3 No dividends or distributions payable to holders of record of
Excite Common Stock after the Effective Time, or cash payable in lieu of
fractional shares, will be paid to the holder of any unsurrendered
Classifieds2000 Certificate(s) until the holder of the Classifieds2000
Certificate(s) surrenders such Classifieds2000 Certificate(s), or if such
certificates are lost, stolen or destroyed, provides an indemnity reasonably
acceptable to Excite. Subject to the effect, if any, of applicable escheat and
other laws, following surrender of any Classifieds2000 Certificate, there will
be delivered to the person entitled thereto, without interest, the amount of any
dividends and distributions therefor paid with respect to Excite Common Stock so
withheld as of any date subsequent to the Effective Time and prior to such date
of delivery.
6.2.4 All Excite Common Stock delivered upon the surrender of
Classifieds2000 Capital Stock in accordance with the terms hereof and the terms
of the Escrow Agreement will be deemed to have been delivered in full
satisfaction of all rights pertaining to such Classifieds2000 Capital Stock.
There will be no further registration of transfers on the stock transfer books
of Classifieds2000 or its transfer agent of the Classifieds2000 Capital Stock.
If, after the Effective Time, Classifieds2000 Certificates are presented for any
reason, they will be canceled and exchanged as provided in this Section 6.2.
6.2.5 Until certificates representing Classifieds2000 Capital Stock
outstanding prior to the Merger are surrendered pursuant to Section 6.2.2 above,
such certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of Excite Common Stock into which the Classifieds2000 Capital
Stock will have been converted, subject to the Escrow Agreement with respect to
the number of shares withheld as Escrow Shares.
6.2.6 Certificates which are not presented to Excite's counsel within
one (1) year after the Closing shall be canceled and the holder thereof will no
longer be entitled to receive any Excite securities in consideration thereof.
6.3 Assumption of Options, Warrants and Convertible Securities. Upon
Closing, Excite will notify in writing each holder of a Classifieds2000 Option
or Warrant of the assumption of such Classifieds2000 Option or Warrant by
Excite, and the number of shares of
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Excite Common Stock that are then subject to such option or warrant and the
exercise price of such option, as determined pursuant to Section 1.1 hereof.
7. CONDITIONS TO OBLIGATIONS OF CLASSIFIEDS2000
Classifieds2000's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Classifieds2000, but only in a writing
signed by Classifieds2000):
7.1 Accuracy of Representations and Warranties. The representations and
warranties of Excite and Merger Sub set forth in Section 3 shall be true and
accurate in all material respects on and as of the Closing with the same force
and effect as if they had been made at the Closing, and Classifieds2000 shall
receive a certificate to such effect executed by each of Excite's and Merger
Sub's Chief Financial Officer.
7.2 Covenants. Excite shall have performed and complied in all material
respects with all of its covenants contained in Section 5 on or before the
Closing, and Classifieds2000 shall receive a certificate to such effect signed
by each of Excite's and Merger Sub's Chief Financial Officer.
7.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency which would prohibit or render illegal the
transactions contemplated by this Agreement.
7.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws, except for such permits or authorizations which if
not obtained or action not taken which would not proscribe the consummation of
the Merger or which would not otherwise have a Material Adverse Effect on Excite
or Merger Sub.
7.5 Opinion of Excite's Counsel. Classifieds2000 shall have received from,
Fenwick & West, LLP, counsel to Excite an opinion substantially in the form of
Exhibit 7.5.
7.6 Stockholder Approval. The principal terms of this Agreement and the
Agreement of Merger shall have been approved and adopted by Classifieds2000
Stockholders, as required by applicable law and Classifieds2000's Certificate of
Incorporation and Bylaws.
7.7 Pooling. Excite shall have received from Excite's accounting firm,
Ernst & Young, LLP ("EXCITE'S AUDITORS") a letter, in form and substance
reasonably satisfactory to Excite that Ernst & Young concurs with management's
conclusion that no condition exists that would preclude Excite from accounting
for the Merger as a pooling of interests. The Securities and Exchange Commission
shall not have otherwise disapproved of the treatment by Excite of this
transaction as a "pooling of interests" for accounting purposes.
7.8 Tax Certificate and Affiliates Agreement. Classifieds2000 shall have
received the tax certificate executed by Excite's Chief Financial Officer in the
form of Exhibit 1.6A and an Excite Affiliates Agreement executed by each
affiliate in the form of Exhibit 5.4, which are all reasonably satisfactory to
Classifieds2000.
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7.9 No Material Adverse Change. There will not have been any material
adverse change in Excite's business results of operations or financial condition
at Closing which have or reasonably would be expected to impair Excite's ability
after Closing to continue to develop, distribute, sell and distribute its
products and services that are material to Excite's business and Classifieds2000
will receive a certificate to such effect executed by Excite's Chief Financial
Officer. Material adverse changes shall not include price fluctuations in the
price of Excite's Common Stock on the NASDAQ market not directly related to the
foregoing.
7.10 Registration Rights Agreement. Classifieds2000 shall have received
the Registration Rights Agreement executed by Excite, which shall be effective
as of the Closing Date.
8. CONDITIONS TO OBLIGATIONS OF EXCITE
The obligations of Excite and Merger Sub hereunder are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the following
conditions (any one or more of which may be waived by Excite, but only in a
writing signed by Excite):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Classifieds2000 set forth in Section 2 shall be true and accurate
in all material respects on and as of the Closing with the same force and effect
as if they had been made at the Closing, and Excite shall receive a certificate
to such effect executed by Classifieds2000's Chief Executive Officer.
8.2 Covenants. Classifieds2000 shall have performed and complied in all
material respects with all of its covenants contained in Section 4 on or before
the Closing, and Excite shall receive a certificate to such effect signed by
Classifieds2000's Chief Executive Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency which would prohibit or render illegal the
transactions contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws except for such permits or authorizations which if not
obtained or action not taken which would not proscribe the consummation of the
Merger or which would not otherwise have a Material Adverse Effect on
Classifieds2000.
8.5 Opinion of Classifieds2000's Counsel. Excite shall have received from
Cooley Godward, LLP, counsel to Classifieds2000, an opinion substantially in the
form of Exhibit 8.5.
8.6 Consents. Excite shall have received duly executed copies of all
material third-party consents, approvals, assignments, waivers, authorizations
or other certificates contemplated by this Agreement or the Classifieds2000
Schedule of Exceptions or as otherwise set forth on Exhibit 8.6 hereto to
provide for the continuation in full force and effect of any and all material
contracts, licenses and leases of Classifieds2000 and for Excite to consummate
the transactions contemplated hereby in form and substance reasonably
satisfactory to Excite, except for such consents and approvals thereof as Excite
and Classifieds2000 shall have agreed shall not be obtained, as contemplated by
the Excite Schedule of Exceptions and such consents, approvals,
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assignments, waivers, authorizations or other certificates which if not obtained
would not proscribe the consummation of the Merger or which would not otherwise
have a Material Adverse Effect on Classifieds2000.
8.7 No Litigation. No litigation or proceeding shall be threatened or
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of any of the transactions contemplated by this Agreement, or
which could be reasonably expected to have a material adverse effect on the
present or future operations or financial condition of Classifieds2000.
8.8 Requisite Approvals. The principal terms of this Agreement and the
Agreement of Merger shall have been approved by the holders of no less than
ninety-two percent (92%) of Classifieds2000 Capital Stock (the "APPROVING
SHAREHOLDERS").
8.9 Dissenting Shares. There shall be no more than eight percent (8%)
Classifieds2000 Dissenting Shares.
8.10 Affiliates Agreements and Classifieds2000 Stockholder
Representations. Classifieds2000 shall have delivered to Excite the letter
required by Section 4.11 naming all persons who are "affiliates" of
Classifieds2000 for purposes of Rule 145 under the Securities Act, and each such
person shall have executed and delivered an Classifieds2000 Affiliates Agreement
to Excite in accordance with Sections 4.11 and 4.12.
8.11 Pooling. Each of Excite and Classifieds2000 shall have received
letters from each of Ernst & Young LLP and Arthur Andersen LLP, each dated
within two (2) business days prior to the Effective Time, regarding those firms'
concurrence with Excite's managements' and Classifieds2000's managements'
conclusions as to the appropriateness of pooling of interest accounting for the
Merger under Accounting Principles Board Opinion No. 16 if the Merger is
consummated in accordance with this Agreement. The Securities and Exchange
Commission shall not have otherwise disapproved of the treatment by Excite of
this transaction as a "pooling of interests" for accounting purposes.
8.12 Resignation of Directors and Officers. The directors and officers of
Classifieds2000 in office immediately prior to the Effective Time of the Merger
will be replaced as directors and officers (respectively) of Classifieds2000
automatically effective as of the Effective Time of the Merger pursuant to the
terms of this Agreement.
8.13 Status of Agreements. Excite shall be reasonable satisfied that all
Material Agreements will continue in full force and effect following the
Closing.
8.14 Investor Representation Letters and Investor Suitability
Questionnaires. Excite shall have received completed and executed Investor
Representation Letters and Investor Suitability Questionnaires from each
Approving Shareholder which are reasonably satisfactory to Excite.
8.15 Tax-Free Reorganization. Excite shall have received the tax
certificate executed by Classifieds2000's Chief Executive Officer in the form of
Exhibit 1.6B.
8.16 No Material Adverse Change. There will not have been any Material
Adverse Effect with respect to Classifieds2000 and Excite will receive a
certificate to such effect executed by Classifieds2000's Chief Financial
Officer.
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9. TERMINATION OF AGREEMENT
9.1 Prior to Closing.
9.1.1 This Agreement may be terminated at any time prior to the
Closing by the mutual written consent of each of the parties hereto.
9.1.2 This Agreement may be terminated at any time by either party by
written notice given to the other party if the Closing shall not have occurred
on or before March 31, 1998.
9.2 At the Closing. At or prior to the Closing, this Agreement may be
terminated and abandoned:
9.2.1 By Excite if any of the conditions precedent to Excite's
obligations set forth in Section 8 above have not been fulfilled or waived at
and as of the Closing; or
9.2.2 By Classifieds2000 if any of the conditions precedent to
Classifieds2000's obligations set forth in Section 7 above have not been
fulfilled or waived at and as of the Closing.
Any termination of this Agreement under this Section 9.2 will be
effective by the delivery of notice of the terminating party to the other party
hereto.
9.3 Remedies. Any termination of this Agreement pursuant to this Section 9
will be without further obligation or liability upon any party in favor of the
other party hereto other than except as set forth in this Section 9.3 and the
obligations provided in Sections 11.7 and 11.15, which will survive termination
of this Agreement; provided, however, that nothing herein will limit the
obligation of Classifieds2000 and Excite to use their best efforts to cause the
Merger to be consummated, as set forth in Sections 4.10 and 5.3 hereof,
respectively.
10. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS
10.1 Survival of Representations. All representations, warranties and
covenants of Classifieds2000, Excite and Merger Sub contained in this Agreement
will survive the Effective Time and remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the parties to
this Agreement, until the earlier of (a) the termination of this Agreement or
(b) six (6) months after the Closing Date, whereupon such representations,
warranties and covenants will expire (except for covenants that by their terms
survive for a longer period), provided however, that representations, warranties
and covenants involving intentional fraud shall survive the Closing without the
limitations of subsections (a) or (b) above.
10.2 Agreement to Indemnify.
10.2.1 Subject to the limitations set forth in this Section 10, after
the Closing, the holders of Classifieds2000 Capital Stock, Classifieds2000
Options and Classifieds2000 Warrants will indemnify and hold harmless Excite,
its affiliates, officers, directors, employees, consultants and agents
(hereinafter referred to individually as an "INDEMNIFIED PERSON" and
collectively as "INDEMNIFIED PERSONS") from and against any and all claims,
liability, damages and/or costs including, but not limited to, attorneys fees
(hereinafter referred to as "DAMAGES") arising out of
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any misrepresentation or breach of or default in connection with any of the
representations and warranties given or made by Classifieds2000 or the Principal
Shareholders in Section 2 of this Agreement. Except to the extent of the Escrow
Shares, each holder shall have no liability for breaches of representations,
warranties, and covenants involving intentional fraud by another holder;
provided, however, that no limit of liability shall apply to any holder who is
determined to have committed intentional fraud. Other than for liability for
breaches of representations, warranties, and covenants, which breaches involve
intentional fraud, each holder's maximum liability shall be his, her or its pro
rata share of the Escrow Shares and each Indemnified Person may look only to the
Escrow Shares to satisfy this indemnity obligation and the sole remedy shall be
a claim under the Escrow. Under no event shall there be any indemnity for any
Damages arising solely in connection with termination of the Classifieds2000
Pension Plan, which is covered by Section 401(k) of the Code, pursuant to
Section 4.19 of this Agreement.
10.2.2 In seeking indemnification for Damages under this Section 10,
the Indemnified Persons shall exercise their remedies with respect to the Escrow
Shares and any other assets deposited in escrow pursuant to the Escrow Agreement
and these Escrow Shares shall be the sole source of indemnification in
connection therewith; provided, however, that no such claim for Damages will be
asserted after the expiration of the Escrow Period. In seeking indemnification
for Damages under Section 10.2.1, the Indemnified Persons shall exercise their
remedies solely to the Escrow Shares deposited in escrow pursuant to the Escrow
Agreement. Except for intentional fraud: (i) no Classifieds2000 Stockholder
shall have any liability to an Indemnified Person under this Agreement except to
the extent of such Classifieds2000 Stockholder's Escrow Shares deposited under
the Escrow Agreement and (ii) the remedies set forth in this Section 10.2 shall
be the exclusive remedies of Excite and the other Indemnified Persons hereunder
against any Classifieds2000 Stockholder. The liability of any Classifieds2000
Stockholder with respect to any claim for intentional fraud shall be several and
not joint.
10.2.3 Excite will indemnify, defend and hold harmless
Classifieds2000, its affiliates (it is agreed and understood that this term
includes all of Classifieds2000's venture capital investors), officers,
directors, employees, consultants and agents from any and all Damages arising
from the misrepresentations or breach of or default in performance of any of the
representations and warranties and covenants given or made by Excite in this
Agreement, in any certificate, document or instrument delivered by or on behalf
of Excite pursuant hereto.
10.2.4 Notwithstanding the foregoing, Excite shall not be entitled to
recover any Escrow Shares from the Escrow Account unless and until an aggregate
of $100,000 in Claims have been awarded or settled in favor of Excite pursuant
to the terms and conditions of this Agreement and the Escrow Agreement and then
such case Excite shall only be entitled to recover from the Escrow Account the
amount of all such claims in excess of $100,000.
11. MISCELLANEOUS
11.1 Governing Law. The internal laws of the State of California
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
11.2 Assignment; Binding Upon Successors and Assigns. Neither party hereto
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto and any attempt to do so will be void. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
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11.3 Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
11.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories.
11.5 Amendment and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party to be bound thereby. The waiver by a party
of any breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
The Agreement may be amended by the parties hereto at any time before or after
approval of the Classifieds2000 Stockholders; but, after such approval, no
amendment will be made which by applicable law requires the further approval of
the Classifieds2000 Stockholders without obtaining such further approval.
11.6 No Waiver. The failure of any party to enforce any of the provisions
hereof will not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
11.7 Expenses. In the event that the transaction is not consummated, each
company will be responsible for its own fees and expenses in connection with the
proposed transaction. In the event that the transaction is consummated, Excite
will be responsible for its own fees and expenses and for Classifieds2000's
reasonable fees and expenses in connection with the transaction.
11.8 Attorneys' Fees. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of the suit, and not as damages, reasonable attorneys'
fees, including without limitation, costs, expenses and fees on any appeal.
11.9 Notices. Any notice or other communication required or permitted to
be given under this Agreement will be in writing, will be delivered personally,
by registered or certified mail, postage prepaid, by telecopy or by nationally
recognized courier service, and will be deemed given upon delivery, if delivered
personally, or three days after deposit in the mails, if mailed, to the
following addresses:
(i) If to Excite:
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Facsimile: (650) 568-6039
Attention: Chris M. Vail
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With a copy to:
John W. Kastelic, Esq.
Fenwick & West LLP
2 Palo Alto Square
Palo Alto, CA 94306
Facsimile: (650) 494-1417
(ii) If to Classifieds2000:
Classifieds2000
617 Palomar Avenue
Sunnyvale, CA 94086
Facsimile: (408) 773-2001
Attention: Sani El-Fishawy, President
With a copy to:
Cooley Godward LLP
Five Palo Alto Square
Palo Alto, Ca 94306
Facsimile: (650) 843-7100
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 11.9.
11.10 Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section or an exhibit
will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
11.11 No Joint Venture. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
11.12 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
11.13 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
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11.14 Public Announcement. Upon execution of the Agreement by both
parties, and until the consummation of the Merger, all press releases and other
public and private communications shall be made by the parties only with the
prior mutual written consent of Classifieds2000 and Excite, except that Excite
may make such disclosures as are required by applicable law, provided, however,
that a copy of such disclosure shall first be submitted to Classifieds2000
within a reasonable time period prior to the dissemination thereof.
11.15 Confidentiality. Excite and Classifieds2000 each recognize that they
have received and will receive confidential information concerning the other
during the course of the Merger negotiations and preparations. Accordingly,
Excite and Classifieds2000 each agree (a) to use its respective best efforts to
prevent the unauthorized disclosure of any confidential information concerning
the other that was or is disclosed during the course of such negotiations and
preparations, or should reasonably have been considered to be confidential
information, and (b) to not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the Merger
and related transactions. The obligations of this section will not apply to
information that (i) is or becomes part of the public domain, (ii) is disclosed
by the disclosing party to third parties without restrictions on disclosure,
(iii) is received by the receiving party from a third party without breach of a
nondisclosure obligation to the other party or (iv) is required to be disclosed
by law. If this Agreement is terminated, all copies of documents containing
confidential information shall be returned by the receiving party to the
disclosing party.
11.16 Entire Agreement. This Agreement and the exhibits hereto constitute
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties, with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXCITE, INC. CLASSIFIEDS2000, INC.
By: /s/ ROBERT C. HOOD By: /s/ SANI EL-FISHAWY
------------------------ --------------------------------
Name: ROBERT C. HOOD Name: SANI EL-FISHAWY
------------------------ --------------------------------
Its: EXECUTIVE V.P. - CFO Its: PRESIDENT/CEO
------------------------ --------------------------------
EXCITE 2000 ACQUISITION CORPORATION
By: /s/ ROBERT C. HOOD
------------------------
Name: ROBERT C. HOOD
------------------------
Its: CFO
PRINCIPAL SHAREHOLDERS:
SANI EL-FISHAWY
/s/ SANI EL-FISHAWY
- -------------------------------
(Signature)
KARIM EL-FISHAWY
/s/ KARIM EL-FISHAWY
- -------------------------------
(Signature)
[SIGNATURE PAGE FOR AGREEMENT AND PLAN OF REORGANIZATION]
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EXHIBIT 2.02
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered
into as of this 8th day of April, 1998, by and among Excite, Inc., a California
corporation ("Excite"), Clwyd Corporation, a Delaware corporation and a wholly
owned subsidiary of Excite ("Sub"), Throw Inc., a Washington corporation
("Throw"), and, with respect to Sections 1.6, 2, 4.4, 4.10 and 10
only, Scott Moody (the "Principal").
RECITALS
A. The parties intend that, subject to the terms and conditions
hereinafter set forth, Sub will merge with and into Throw in a reverse
triangular merger (the "Merger"), with Throw to be the surviving corporation of
the Merger, pursuant to the terms and conditions of this Agreement and an
Agreement of Merger to be filed with the State of Delaware substantially in the
form of Exhibit A attached hereto (the "Agreement of Merger") and the Articles
of Merger to be filed with the State of Washington substantially in the form of
Exhibit B attached hereto (the "Articles of Merger") and the applicable
provisions of the law of the State of Delaware and the law of the State of
Washington. Upon the effectiveness of the Merger, all of the outstanding Common
Stock and Preferred Stock of Throw will be converted into Common Stock of Excite
("Excite Common Stock"). In addition, all outstanding options ("Throw Options")
and warrants ("Throw Warrants") to purchase shares of the Common Stock of Throw
will be converted into options and warrants, respectively, to purchase Excite
Common Stock, all as provided in this Agreement and the Agreement of Merger. All
debt or other instruments which by their terms are convertible into or
exchangeable for equity securities of Throw ("Throw Convertible Debt") will be
treated as set forth in Section 1.1.1(iv).
B. The Merger is intended to be treated as a tax-free reorganization
pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"), by virtue of the provisions of Section
368(a)(2)(E) of the Code and may be treated as a "pooling of interests" for
accounting purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. PLAN OF REORGANIZATION
1.1 The Merger. An Agreement of Merger and Articles of Merger,
respectively, will be filed with the office of the Secretary of State of
Delaware and Washington, respectively, as soon as practicable after the Closing
Date (as defined in Section 6.1 hereof). The effective date and time of the last
such filing is referred to herein as the "Effective Time". At the Effective
Time, Sub will be merged with and into Throw pursuant to this Agreement, the
Agreement of Merger and the Articles of Merger and in accordance with applicable
provisions of the law of the State of Delaware and law of the State of
Washington as follows:
1.1.1 Conversion of Shares. Each share of Throw Common Stock (the
"Throw Common Stock") and each share of Throw Series A Preferred Stock (the
"Throw A Preferred") (collectively, the "Throw Capital Stock") issued and
outstanding immediately prior to the Effective Time, other than shares, if any,
for which dissenters rights have been or will be perfected in compliance with
applicable law, will by virtue of the Merger and at the Effective Time, and
without further action on the part of any holder thereof (the "Throw
Shareholder(s)"),
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be converted into the right to receive the "Common Applicable Fraction" of a
fully paid and nonassessable share of Excite Common Stock.
(i) The Total Excite Shares. The total shares of Excite Common
Stock issuable hereunder (the "Total Excite Shares") shall be determined by
dividing Sixteen Million Dollars ($16,000,000.00) less the total Throw
Convertible Debt and the Company's obligations to a certain consultant ("Throw
Consultant Debt"), each as indicated on Exhibit 4.18 (the "Excite Purchase
Price"), by the average of the NASDAQ closing prices of Excite's Common Stock on
all of the following days: (i) the ten (10) trading days prior to the execution
of the Letter of Intent, which was executed on March 12, 1998 (the "Letter of
Intent"), (ii) the date of the execution of the Letter of Intent and (iii) the
ten (10) trading days after the execution of the Letter of Intent (the "Per
Share Market Value"). The Per Share Market Value is equal to $49.28290.
(ii) Common Applicable Fraction. The Common Applicable
Fraction shall be determined by dividing (A) the Total Excite Shares (as defined
above in Subsection 1.1.1(i)) by (B) the "Total Throw Shares", which shall equal
the sum of: (i) the total number of shares of Throw Common Stock outstanding
immediately prior to the Effective Time, (ii) the total number of shares of
Throw Common Stock into which all shares of Throw A Preferred that are
outstanding as of the date hereof could be converted, and (iii) the total number
of shares of Throw Common Stock issuable upon exercise of all Throw Options and
Throw Warrants outstanding immediately prior to the Effective Time (collectively
the "Total Throw Shares"). The Common Applicable Fraction is equal to 0.15849.
(iii) Application of the Common Applicable Fraction. The
holders of Throw Common Stock shall receive such number of shares of Excite
Common Stock equal to the Common Applicable Fraction multiplied by the number of
shares of Throw Common Stock so held by such shareholder. The holders of Throw A
Preferred shall receive such number of shares of Excite Common Stock equal to
the Common Applicable Fraction multiplied by the number of shares of Throw
Common Stock into which each share of Throw A Preferred is convertible.
(iv) Adjustment to Excite Purchase Price and Conversion of
Throw Convertible Debt and Throw Consultant Debt. Throw is obligated to use its
reasonable efforts to obtain the written consent from the holders of all
outstanding Throw Convertible Debt, as specifically set forth in Exhibit 4.18
attached hereto to the conversion of their Throw Convertible Debt to Excite
Common Stock at the Effective Time. To the extent that any Throw Convertible
Debt remains unconverted at the Effective Time because the holder declines to
convert such debt as requested by Throw, Excite agrees to assume the obligation
of paying such unconverted Throw Convertible Debt, in accordance with the terms
thereof. To the extent that any holder of Throw Convertible Debt elects in
writing to convert the total Throw Convertible Debt held by such holder into
Excite Common Stock at the rate of the Per Share Market Value, then such holder
shall surrender the original promissory note(s), security agreement(s) and all
other related documentation to Excite at the Closing for cancellation and Excite
shall deliver, at or shortly after the Closing, to the holder a stock
certificate evidencing the correct number of whole shares of Excite Common Stock
into which the Throw Convertible Debt converted. Any attempt to make an election
to convert the debt after the Effective Time shall be invalid and will not be
honored by Excite. The Throw Consultant Debt will be converted into Excite
Common Stock at the Effective Time. Any fractional shares shall be handled in
accordance with Section 1.2 hereof.
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<PAGE> 3
1.1.2 Throw Options. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding options to
purchase shares of Throw Common Stock and each holder of a Throw Option granted
(a) under the Throw Inc. 1996 Stock Option Plan (the "Throw Option Plan") or (b)
outside of the Throw Option Plan, shall be entitled, in accordance with the
existing terms of such Throw Option, to purchase after the Effective Time that
number of shares of Excite Common Stock determined by multiplying the aggregate
number of shares of Throw Common Stock subject to such Throw Option at the
Effective Time by the Common Applicable Fraction, and the exercise price per
share for each such assumed option (the "Assumed Option") will equal the
exercise price per share of the Throw Option immediately prior to the Effective
Time divided by the Common Applicable Fraction. If the foregoing calculation
results in an Assumed Option (a) being exercisable for a fraction of a share of
Excite Common Stock, then the number of shares of Excite Common Stock subject to
such Assumed Option will be rounded down to the nearest whole number with no
cash being payable for such fractional share, or (b) being exercisable for a per
share exercise price that includes a fraction of a cent, the exercise price
shall be rounded down to the nearest whole cent. The term, exercisability,
vesting schedule, status as an "incentive stock option" under Section 422A of
the Code, if applicable, and all other terms of the Assumed Options will
otherwise be unchanged. The continuous term of employment with Throw will be
credited to each holder of an Assumed Option as if it were employment with
Excite for purposes of determining the vesting and the number of shares subject
to exercise after the Effective Time. Promptly following the Effective Time,
Excite will issue to each holder of an Assumed Option a document evidencing the
foregoing assumption by Excite. Attached hereto as Exhibit 1.1.2 is list of all
holders of Throw Options and the number of options held by each. To the extent
required by, and subject to the provisions of, such Throw Option Plan, Excite
shall comply with the terms of the Throw Option Plan and use its reasonable best
efforts to preserve the incentive stock option status after the Effective Time
of the Assumed Options which qualified as incentive stock options prior to the
Effective Time.
1.1.3 Throw Warrants. At the Effective Time, Excite will
automatically, by virtue of the Merger, assume all outstanding warrants to
purchase shares of Throw Capital Stock and each holder of a Throw Warrant (an
"Assumed Warrant") shall be entitled, in accordance with the existing terms of
such Throw Warrant, to purchase after the Effective Time that number of shares
of Excite Common Stock determined by multiplying the aggregate number of shares
of Throw Capital Stock subject to such Throw Warrant at the Effective Time by
the Common Applicable Fraction, and the exercise price per share for each such
assumed Warrant will equal the exercise price per share of the Throw Warrant
immediately prior to the Effective Time divided by the Common Applicable
Fraction. If the foregoing calculation results in an Assumed Warrant being
exercisable for a fraction of a share of Excite Common Stock, then the number of
shares of Excite Common Stock subject to such Assumed Warrant will be rounded
down to the nearest whole number with no cash being payable for such fractional
share. If the Assumed Warrant is exercisable for a per share exercise price that
includes a fraction of a cent, the exercise price shall be rounded down to the
nearest whole cent. The terms of the Throw Warrants will otherwise be unchanged.
1.1.4 Adjustments for Capital Changes. If prior to the Effective
Time, Excite recapitalizes through a split-up of its outstanding shares into a
greater number, or a combination of its outstanding shares into a lesser number,
reorganizes, reclassifies or otherwise changes its outstanding shares into the
same or a different number of shares of other classes (other than through a
split-up or combination of shares provided for in the previous clause), or
declares a dividend on its outstanding shares payable in shares or securities
convertible into shares, the
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<PAGE> 4
number of shares of Excite Common Stock into which the shares of Throw Capital
Stock, Options, Warrants, Throw Convertible Debt (that elects to convert into
Excite Common Stock at the Effective Time) and Throw Consultant Debt are to be
converted will be adjusted appropriately so as to maintain the proportionate
interests of the holders of the Throw Capital Stock, Options, Warrants, Throw
Convertible Debt that elects to convert into Excite Common Stock and Throw
Consultant Debt and the holders of Excite shares.
1.1.5 Dissenting Shares. Holders of shares of Throw Capital Stock
who have complied with all requirements for perfecting dissenter's rights, as
set forth in the Washington Business Corporation Act ("Washington Law"), shall
be entitled to their rights under the Washington Law with respect to such shares
("Dissenting Shares").
1.2 Fractional Shares. No fractional shares of Excite Common Stock will be
issued in connection with the Merger, but in lieu thereof, the holder of any
shares of Throw Capital Stock who would otherwise be entitled to receive a
fraction of a share of Excite Common Stock will receive from Excite, promptly
after the Effective Time, an amount of cash equal to (i) the Per Share Market
Value, as determined in Subsection 1.1.1(i) above, multiplied by (ii) the
fraction of a share to which such holder would otherwise be entitled.
1.3 Escrow Agreement. At the Closing of the Merger (as defined in Section
6.1 hereof), Excite will withhold that number of shares of Excite Common Stock
which equals ten percent (10%) of the sum of (i) the Total Excite Shares (as
defined in Section 1.1.1(i) hereof), (ii) any shares of Excite Common Stock
issued to holders of Throw Convertible Debt that elect to convert to Excite
Common Stock pursuant to Section 1.1.1(iv) hereof at the Effective Time, and
(iii) the Throw Consultant Debt (collectively the "Escrow Shares") which shares
would otherwise be issuable to certain principal shareholders of Throw
(including Glenn Northrop, John Fearnside and Scott Moody), who are holders of
five percent (5%) or more of the Throw Capital Stock at the Closing, which
calculation shall include all vested but unexercised Throw Options and currently
exercisable Throw Warrants (the "Principal Throw Holders"), on a pro rata basis,
as determined pursuant to this Section 1.3 (rounded down to the nearest whole
number of shares to be issued to each Principal Throw Holder) and deliver such
Escrow Shares to Chase Manhattan Bank and Trust Company, N.A. (the "Escrow
Agent"), as escrow agent, to be held by the Escrow Agent as collateral for the
Principal Throw Holders' obligations under Section 10.2 and pursuant to the
provisions of an escrow agreement (the "Escrow Agreement") in substantially the
form of Exhibit 1.3. The Escrow Shares will be represented by a certificate or
certificates issued in the name of the Throw Shareholders and delivered to the
Escrow Agent and will be held as collateral for Damages suffered by an
Indemnified Person (each as defined in Section 10.2) for breaches of the
representations, warranties and covenants of Throw contained in this Agreement.
The Escrow Shares will be delivered and will be held by the Escrow Agent from
the Closing until the earlier of (a) the date on which Excite releases to the
public its audited financial statements together with a report thereon from
Excite's independent auditors covering the results of Excite's first fiscal year
ending after the Closing Date (i.e., the year ending December 31, 1998), for
items expected to be encountered in the audit process, provided that Excite
shall have a reasonable period of time, not to exceed ninety (90) days from the
end of its fiscal year, to review the audit results to determine if any claim
for Damages exists under Section 10.2 and Excite shall provide notice of any
claim for Damages within ninety (90) day period, and (b) twelve (12) months
after the Closing Date for all other items (the "Escrow Period"). However, in
all cases as to matters which an Indemnified Person has given written notice of
a claim for Damages during the Escrow Period, such period with respect thereto
shall continue until such claim for Damages is finally
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resolved and the Principal Throw Holder's indemnification obligations under
Section 10.2 hereof with respect thereto are fully satisfied.
In the event that the Merger is approved by the Throw Shareholders,
as provided herein, the Principal Throw Holders shall, without any further act
of any Principal Throw Holder, be deemed to have consented to and approved (i)
the use of the Escrow Shares as collateral for the Principal Throw Holder's
indemnification obligations under Section 10.2 in the manner set forth in the
Escrow Agreement, (ii) the appointment of Scott Moody as the representative of
the Principal Throw Holders (the "Representative") under the Escrow Agreement
and as the attorney-in-fact and agent for and on behalf of each Principal Throw
Holder (other than holders of Dissenting Shares), and the taking by the
Representative of any and all actions and the making of any decisions required
or permitted to be taken by the Representative under the Escrow Agreement
(including, without limitation, the exercise of the power to: (a) authorize
delivery to Excite of Escrow Shares in satisfaction of claims by Excite; (b)
agree to, negotiate, enter into settlements and compromises of and demand
arbitration and comply with orders of courts and awards of arbitrators with
respect to such claims; (c) resolve any claim made by Indemnified Persons
pursuant to Section 10.2; and (d) take all actions necessary in the judgment of
the Representative for the accomplishment of the foregoing) and (iii) to all of
the other terms, conditions and limitations in the Escrow Agreement.
1.4 Effects of the Merger. At the Effective Time: (a) the separate
existence of Sub will cease and Sub will be merged with and into Throw, and
Throw will be the surviving corporation, pursuant to the terms of the Agreement
of Merger, (b) the Certificate of Incorporation and Bylaws of Throw will be
amended and restated to be the same as the Certificate of Incorporation and
Bylaws of Sub; provided, however, that the corporate name of Throw will not
change, (c) the Board of Directors and officers of Excite will remain unchanged,
(d) all the directors of Throw immediately prior to the Effective Time will
resign and the directors of the Sub shall automatically become the directors of
the surviving corporation and the officers of Throw immediately prior to the
Effective Time will resign and the officers of the Sub shall automatically
become the officers of the surviving corporation, (e) each share of Throw
Capital Stock outstanding immediately prior to the Effective Time, the Throw
Convertible Debt that elects to convert into Excite Common Stock at the
Effective Time and the Throw Consultant Debt will be converted into Excite
Common Stock, and each Throw Option and Throw Warrant outstanding immediately
prior to the Effective Time will be assumed by Excite, each as provided in
Sections 1.1 and 1.2, (f) Excite, which held all the outstanding shares of the
Sub prior to the Effective Time will instead hold all the outstanding shares of
Throw and (g) the Merger will, from and after the Effective Time, have all of
the effects provided by applicable law.
1.5 S-3 Registration Rights and Registration on Form S-8.
1.5.1 S-3 Registration Rights. Effective upon the Effective Time,
each Throw Shareholder who receives shares of Excite Common Stock in the Merger
pursuant to Section 1.1 hereof, including shares issued to holders of Throw
Convertible Debt that elect to convert into Excite Common Stock at the Effective
Time, to the holder of Throw Consultant Debt, and pursuant to the exercise of
Assumed Warrants shall be granted Form S-3 registration rights (other than
pursuant to the assumption of Assumed Options, which shall be covered by a Form
S-8 pursuant to Section 1.5.2 hereof) under the Securities Act of 1933, as
amended (the "1933 Act") on the terms and subject to the conditions and
limitations of the Registration Rights Agreement attached hereto as Exhibit
1.5.1A (the "Registration Rights Agreement"). Within ninety (90) days of the
Closing, Excite will cause to be filed a Registration Statement on Form S-3
covering
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the resale of all securities issued in the Merger, including shares issued
pursuant to the exercise of the Assumed Warrants, to holders of Throw
Convertible Debt that converted into Excite Common Stock at the Effective Time
and to the holder of Throw Consultant Debt (other than Assumed Options which
shall be covered by the Form S-8, pursuant to Section 1.5.2 hereof). Excite will
use its best efforts to cause the Registration Statement to become effective
promptly after filing and shall keep such Registration Statement effective until
such time as each recipient of Excite Common Stock is eligible to sell all of
the Excite Common Stock held by each such recipient (other than those covered by
the Form S-8) in a three (3) month period pursuant to the resale restrictions
provided for in Rule 144 under the 1933 Act. Each Throw Shareholder shall agree
that the Excite Common Stock issued to him (the "Lock-up Shares"), to the extent
requested by Excite or an underwriter of securities of Excite, be subject, on a
pro rata basis, to the lock-up provisions included in the Registration Rights
Agreement in the event Excite initiates an underwritten offering of at least
twenty million dollars ($20,000,000.00) of newly issued shares of Excite Common
Stock with nationally recognized managing underwriters while the S-3
Registration Statement is effective; provided, however, the lock-up provisions
shall not apply to the Lock-up Shares that, prior to the time of the
underwritten offering, have been sold to the public. In order to enforce the
foregoing covenants, Excite shall have the right to place restrictive legends on
the certificates of the Excite Common Stock issued in the Merger, indicating
that the shares are subject to the provisions of the Registration Rights
Agreement until the sale of such shares.
1.5.2 Registration on Form S-8. In addition, Excite shall use its
best efforts to cause the shares of Excite Common Stock that are issuable upon
exercise of the Assumed Options to be registered under the Securities Act on
Form S-8 ("Form S-8") within thirty (30) days of the Closing of the Merger.
Throw will reasonably cooperate with Excite in the preparation of the Form S-8.
1.6 Qualify as a Tax-Free Reorganization. The parties intend to adopt this
Agreement as a plan of reorganization and to consummate the Merger in accordance
with the provisions of Section 368(a)(1)(A) of the Code. The parties believe
that the total value of the Excite Common Stock to be received in the Merger by
the Throw Shareholders is equal, in each instance, to the total value of the
Throw Capital Stock to be surrendered in exchange therefor. The Excite Common
Stock issued in the Merger will be issued solely in exchange for Throw Capital
Stock, Throw Options, Throw Warrants, Throw Convertible Debt that elects to
convert into Excite Common Stock at the Effective Time and Throw Consultant
Debt, respectively, and no other transaction other than the Merger represents,
provides for or is intended to be an adjustment to the consideration paid for
the Throw Capital Stock, Throw Options, Throw Warrants, Throw Convertible Debt
that elects to convert into Excite Common Stock at the Effective Time and Throw
Consultant Debt. Except for cash paid in lieu of fractional shares or for
Dissenting Shares, no consideration that could constitute "other property"
within the meaning of Section 356 of the Code is being paid by Excite for the
Throw Capital Stock in the Merger. The parties shall not take a position on any
tax returns inconsistent with this Section 1.6 unless required to do so by
applicable tax laws pursuant to a determination as defined in Section 1313(c) of
the Code. In addition, Excite represents now, and as of the Closing Date, that
it presently intends to cause Throw to continue Throw's historic business or use
a significant portion of Throw's business assets in a business and that it has
no current plan or intention to (a) liquidate Throw, to merge Throw with and
into another corporation, to sell or otherwise dispose of the stock of Throw or
to cause Throw to sell or otherwise dispose of any of its assets, except for
dispositions made in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the Code, (b) reacquire any of its stock issued in the
Merger or (c) cause Throw to issue additional shares of
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Throw Capital Stock that would result in Excite losing control of Throw within
the meaning of Section 368(c)(1) of the Code. At the Closing, the Chief
Financial Officer of Excite and the Chief Executive Officer of Throw shall each
execute and deliver tax certificates in the forms of Exhibits 1.6A-B, together
with an acknowledgment that such certificates will be relied upon by Throw and
Excite in determining whether the Merger constitutes a reorganization under
Section 368(a) of the Code. The provisions and representations contained or
referred to in this Section 1.6 shall survive until the expiration of the
applicable statute of limitations.
2. REPRESENTATIONS AND WARRANTIES OF THROW AND PRINCIPAL
Throw and the Principal, jointly and severally, hereby represent and
warrant as follows, except as set forth in the Throw Schedule of Exceptions (in
numbered paragraphs that correspond to the Section numbers below) simultaneously
delivered to Excite with the execution of this Agreement, as Exhibit 2.0:
2.1 Organization and Good Standing. Throw is a corporation duly organized,
validly existing and in good standing under the law of the State of Washington,
has the corporate power and authority to own, operate and lease its properties
and to carry on its business as now conducted and as proposed to be conducted,
and is qualified as a foreign corporation in each jurisdiction in which a
failure to be so qualified could reasonably be expected to have a material
adverse effect on its present operations or financial condition.
2.2 Power, Authorization and Validity.
2.2.1 Throw has the right, power, legal capacity and authority to
enter into and, subject to Throw Shareholder approval, perform its obligations
under this Agreement and all agreements to which Throw is or will be a party
that are required to be executed pursuant to this Agreement (the "Throw
Ancillary Agreements"). The execution, delivery and performance of this
Agreement and the Throw Ancillary Agreements have been duly and validly approved
and authorized by Throw's Board of Directors.
2.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Throw to enter into, and to perform its
obligations under, this Agreement and the Throw Ancillary Agreements, except for
(a) the filing of the Articles of Merger with the Washington Secretary of State,
and the filing of appropriate documents with the relevant authorities of other
states in which Throw is qualified to do business, if any, (b) such filings as
may be required to comply with federal and state securities laws, (c) consents
required under contracts disclosed in Exhibit 2.11 and (d) the approval of the
Throw Shareholders of the transactions contemplated hereby, as provided under
applicable law and Throw's Articles of Incorporation and Bylaws.
2.2.3 This Agreement and the Throw Ancillary Agreements are, or when
executed by Throw will be, valid and binding obligations of Throw enforceable in
accordance with their respective terms, except as to the effect, if any, of (a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally, (b) rules of law governing specific performance, injunctive relief
and other equitable remedies and (c) the enforceability of provisions requiring
indemnification or contribution in connection with the offering, issuance or
sale of securities; provided, however, that the Articles of Merger will not be
effective until filed with the Washington Secretary of State.
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2.3 Capitalization. The authorized capital stock of Throw consists of ten
million (10,000,000) shares of Common Stock and five million (5,000,000) shares
of Preferred Stock. Of the Throw Preferred Stock, one hundred sixty thousand
(160,000) shares are designated as Series A Preferred Stock. As of March 31,
1998, seven hundred fifty-nine thousand, three hundred sixty-one (759,361)
shares of Throw Common and one hundred forty-four thousand five hundred
(144,500) shares of Throw Series A Preferred are issued and outstanding. An
aggregate of nine hundred fifty thousand (950,000) shares of Throw Common are
reserved and authorized for issuance pursuant to the Throw Option Plan, of which
options to purchase nine hundred fifty thousand (950,000) shares of Throw Common
Stock have been granted and options to purchase a total of seven hundred ninety
thousand six hundred thirty-nine (790,639) shares of Common Stock are
outstanding thereunder. Warrants to purchase two hundred twelve thousand seven
hundred fifty (212,750) shares of Throw Common Stock are issued and outstanding.
All issued and outstanding shares of Throw Capital Stock have been duly
authorized and validly issued, are fully paid and non assessable, are not
subject to any right of rescission, and have been offered, issued, sold and
delivered by Throw in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of applicable federal and
state securities laws. A list of all holders of Throw Common Stock, Throw
Preferred Stock, Throw Options and Throw Warrants and the number of shares,
options and warrants held by each has been delivered by Throw to Excite herewith
as Exhibit 2.3. Except as set forth in this Section 2.3 and in Exhibit 2.3,
there are no options, warrants, calls, commitments, conversion privileges or
preemptive or other rights or agreements outstanding to purchase any of Throw's
authorized but unissued capital stock or any securities convertible into or
exchangeable for shares of Throw Capital Stock or obligating Throw to grant,
extend, or enter into any such option, warrant, call, right, commitment,
conversion privilege or other right or agreement, and there is no liability for
dividends accrued but unpaid. Except as indicated in the Throw Schedule of
Exceptions, there are no voting agreements, rights of first refusal or other
restrictions (other than normal restrictions on transfer under applicable
federal and state securities laws) applicable to any of Throw's outstanding
securities. Except as indicated in the Throw Schedule of Exceptions, Throw is
not under any obligation to register under the Securities Act any of its
presently outstanding securities or any securities that may be subsequently
issued. None of the Throw Options or other issuances of securities under the
Throw Option Plan or outside the Throw Option Plan are subject to acceleration
or automatic vesting as a result of the Merger except as specifically provided
for in the Throw Option Plan.
2.4 Subsidiaries. Throw does not have any subsidiaries or any ownership
interest, direct or indirect, in any corporation, partnership, joint venture or
other business entity.
2.5 No Violation of Existing Agreements. Neither the execution and
delivery by Throw of this Agreement nor of any Throw Ancillary Agreement, nor
the consummation by Throw of the transactions contemplated hereby or thereby,
will conflict with, or (with or without notice or lapse of time, or both) result
in a termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Bylaws of Throw, as currently in effect, (b) in any
material respect, any Material Agreement (as defined in Section 2.11) to which
Throw is a party or by which Throw is bound, or (c) any federal, state, local or
foreign judgment, writ, decree, order, statute, rule or regulation applicable to
Throw or its assets or properties, except, in each case, where such conflict,
termination, breach, impairment or violation would not have a material adverse
effect on Throw's present operations or financial condition.
2.6 Litigation. There is no action, proceeding, claim or investigation
pending against Throw before any court or administrative agency that if
determined adversely to Throw may
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reasonably be expected to have a material adverse effect on the present or
future operations or financial condition of Throw or to prevent Throw from
fulfilling its obligations under this Agreement; nor to Throw's and the
Principal's knowledge has any such action, proceeding, claim or investigation
been threatened. There is, to Throw's and the Principal's knowledge, no
reasonable basis for any shareholder or former shareholder of Throw, or any
other person, firm, corporation, or entity, to assert a claim against Throw or
Excite based upon: (a) ownership or rights to ownership of any shares of Throw
Capital Stock (except for dissenter's rights with respect to shares of Excite
Common Stock issuable by virtue of the Merger), (b) any rights as an Throw
Shareholder, including any option or preemptive rights or rights to notice or to
vote, or (c) any rights under any agreement among Throw and the Throw
Shareholders.
2.7 Taxes. Throw has timely filed all federal, state, local and foreign
tax returns, estimates, information statements and reports required to be filed
by or on behalf of Throw and its operations (collectively, "Returns"), has
timely paid all taxes shown due on all Returns which have been filed, has
established an adequate accrual or reserve for the payment of all taxes, due and
payable, including reasonable accruals for taxes payable in respect of the
periods subsequent to the periods covered by the most recent applicable Returns,
has made all necessary estimated tax payments, and has no material liability for
taxes in excess of the amounts so paid or accruals or reserves so established.
Throw is not delinquent in the payment of any tax nor delinquent in the filing
of any Returns, and no deficiencies for any tax have been threatened, claimed,
proposed, or assessed by any taxing authority. Throw has not executed any waiver
of any statute of limitations on or extending the period for the assessment or
collection of any tax which waiver or extension is still in effect. Throw has
not received any notification that any material issues have been raised (and are
currently pending) by the Internal Revenue Service or any other taxing authority
(including but not limited to any sales tax authority) regarding Throw. No tax
return of Throw has ever been audited by the Internal Revenue Service or any
state taxing agency or authority. Throw has made available to Excite copies of
all federal and state income and all state sales and use Returns for all periods
since the date of Throw's incorporation. There are no liens, pledges, charges,
claims, security interests or other encumbrances of any sort on the assets of
Throw relating to or attributable to taxes, other than liens for taxes not yet
due and payable. There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of Throw that, individually or collectively, could give rise to
the payment of any amount that would be disallowed pursuant to Section 280G or
162(m) of the Code. Throw is not a party to a tax sharing or allocation
agreement nor does Throw owe any amount under any such agreement. Throw is not,
and has not been at any time, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. Throw has not
filed any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as defined in Section 341(f)(4) of the Code) owned by Throw. None of Throw's
assets are treated as "tax-exempt use property" within the meaning of Section
168(h) of the Code. For the purposes of this Agreement, the terms "tax" and
"taxes" include all federal, state, local and foreign income, gains, franchise,
excise, property, sales, use, employment, license, payroll, occupation,
recording, value added or transfer taxes, governmental charges, fees, levies or
assessments (whether payable directly or by withholding), and, with respect to
such taxes, any estimated tax, interest and penalties or additions to tax and
interest on such penalties and additions to tax.
2.8 Throw Financial Statements. Throw has delivered to Excite as Exhibit
2.8 Throw's (a) unaudited balance sheet as of December 31, 1997 (the "1997
Balance Sheet") and income statement and statement of cash flows for the twelve
(12) month period then ended
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(collectively, the "1997 Financial Statements"), and (b) unaudited balance sheet
as of February 28, 1998 (the "February 28 Balance Sheet") and income statement
for the three (3) month period then ended (collectively, the "February Financial
Statements") (the 1997 Financial Statements and February Financial Statements
are collectively referred to herein as the "Financial Statements"). The
Financial Statements are in accordance with the books and records of Throw and
fairly present the financial condition of Throw at the dates therein indicated
and the results of operations for the periods therein specified in all material
respects. The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as to footnotes, and, with respect to the 1997 Financial Statements, normal year
end or audit adjustments). Throw has no material debt, liability or obligation
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, that is not reflected or reserved against in the Financial
Statements which would be required under generally accepted accounting
principles to be reflected or reserved, except for those that may have been
incurred after the date of the Financial Statements in the ordinary course of
its business, consistent with past practice and that are not material in amount
either individually or collectively or in the course of entering into this
Agreement, such as attorneys' fees.
2.9 Title to Properties. Throw has good and marketable title to or a
leasehold or other rights to use all of its assets as shown on the February 28
Balance Sheet, free and clear of all liens, charges, restrictions or
encumbrances (other than for taxes not yet due and payable) in excess of twenty
five thousand dollars ($25,000) in the aggregate. All machinery and equipment
included in such properties is in good condition and repair, normal wear and
tear excepted, and all leases of real or personal property to which Throw is a
party are fully effective and afford Throw peaceful and undisturbed possession
of the subject matter of the lease. To Throw's knowledge, Throw is not in
violation of any zoning, building, safety or environmental ordinance, regulation
or requirement or other law or regulation applicable to the operation of owned
or leased properties (the violation of which would have a material adverse
effect on its business), and has not received any notice of such violation with
which it has not complied.
2.10 Absence of Certain Changes. Since February 28, 1998, there has not
been with respect to Throw:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations thereof which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has had or will have a material adverse effect on Throw's
business;
(b) any material contingent liability incurred thereby as guarantor
or otherwise with respect to the obligations of others;
(c) any mortgage, encumbrance or lien placed on any of the material
properties of Throw other than in the ordinary course of business;
(d) any material obligation or liability incurred thereby other than
obligations and liabilities incurred in the ordinary course of business or in
connection with this Agreement;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
material properties or assets of Throw other than in the ordinary course of
business;
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(f) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of Throw;
(g) any declaration, setting aside or payment of any dividend on, or
the making of any other distribution in respect of, the capital stock thereof,
any split, combination or recapitalization of the capital stock thereof or any
direct or indirect redemption, purchase or other acquisition of the capital
stock thereof;
(h) any labor dispute or claim of unfair labor practices, any change
in the compensation payable or to become payable to any of its officers,
employees or agents, or any bonus payment or arrangement made to or with any of
such officers, employees or agents;
(i) any change with respect to the management, supervisory or other
key personnel thereof;
(j) any payment or discharge of a material lien or liability thereof
which lien was not either shown on the 1997 Balance Sheet or incurred in the
ordinary course of business thereafter; or
(k) any material obligation or liability incurred thereby to any of
its officers, directors or shareholders or any loans or advances made thereby to
any of its officers, directors or shareholders except normal compensation and
expense allowances payable to officers, consultants and directors.
2.11 Material Agreements, Contracts and Commitments. Except as set forth
on Exhibit 2.11 delivered to Excite herewith, Throw is not a party or subject to
any oral or written contracts, obligations, commitments, plans, leases,
instruments, arrangements or licenses not entered into in the ordinary course of
business which is material to the business of Throw (each a "Material
Agreement"), including, but not limited to any:
(a) Contract providing for potential payments by or to Throw in
excess of One Hundred Thousand Dollars ($100,000.00) or more;
(b) Product distribution agreement, development agreement, or
license agreement as licensor or licensee (except for standard non-exclusive
software licenses granted to end-user customers in the ordinary course of
business the form of which has been provided to Excite's counsel or standard
licenses purchased by Throw for off-the-shelf software);
(c) Material agreement for the lease of real or personal property;
(d) Joint venture contract or arrangement or any other agreement
that involves a sharing of profits with other persons;
(e) Instrument evidencing or related in any way to indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee, or otherwise, except for trade
indebtedness incurred in the ordinary course of business, and except as
disclosed in the Financial Statements;
(f) Contract containing covenants purporting to limit Throw's
freedom to compete in any line of business in any geographic area; or
(g) Stock redemption or purchase agreement yet to be performed.
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To its knowledge, all Material Agreements listed in Exhibit 2.11
constitute valid and enforceable obligations of the parties thereto and are in
full force and effect. Throw is not, nor, to the knowledge of Throw and the
Principal, is any other party thereto, in breach or default in any material
respect under the terms of any such Material Agreement, which breach or default
may reasonably be expected to have a material adverse effect on Throw. A copy of
each agreement or document listed on Exhibit 2.11 has been delivered to Excite's
counsel. Throw is not a party to any contract or arrangement which has had or
could reasonably be expected to have a material adverse effect on its business
or prospects.
2.12 Intellectual Property. Throw owns, or has the rights to use, sell or
license all Intellectual Property Rights (as defined below) necessary or
required for the conduct of, or used in, its business as presently conducted and
as contemplated to be conducted (such Intellectual Property Rights being
hereinafter collectively referred to as the "Throw IP Rights") and such rights
to use, sell or license are reasonably sufficient for the conduct of its
business and as contemplated to be conducted. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a material breach of any instrument or
agreement governing any Throw IP Right (the "Throw IP Rights Agreements"), will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any Throw IP Right or materially impair the right of Throw to
use, sell or license any Throw IP Right or portion thereof (except where such
breach, forfeiture or termination would not have a material adverse effect on
Throw, taken as a whole). There are no royalties, honoraria, fees or other
payments payable by Throw to any person by reason of the ownership, use,
license, sale or disposition of the Throw IP Rights (other than as set forth in
the Throw IP Rights Agreements listed in Exhibit 2.12). Neither the manufacture,
marketing, license, sale or intended use of any product currently licensed or
sold by Throw or currently under development by Throw violates any license or
agreement between Throw and any third party or to the knowledge of Throw or the
Principal infringes any Intellectual Property Right of any other party; and
there is no pending or, to the knowledge of Throw and the Principal, threatened
claim or litigation contesting the validity, ownership or right to use, sell,
license or dispose of any Throw IP Right; nor, to the knowledge of Throw and the
Principal is there any basis for any such claim; nor has Throw received any
notice asserting that any Throw IP Right or the proposed use, sale, license or
disposition thereof conflicts or will conflict with the rights of any other
party, nor, to the knowledge of Throw and the Principal is there any reasonable
basis for any such assertion. Throw has taken reasonable and practicable steps
designed to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all material Throw IP Rights. Exhibit 2.12 contains a
list of all applications, registrations, filings and other formal actions made
or taken pursuant to federal, state and foreign laws by Throw to perfect or
protect its interest in Throw IP Rights, including, without limitation, all
issued patents, patent applications, registered copyrights, copyright
applications, registered trademarks, trademark applications, registered
tradenames, issued service marks, service mark applications and all Throw IP
Rights Agreements (except for object code end-user licenses granted to end-users
in the ordinary course of business that permit use of software products without
a right to modify, distribute or sublicense the same). Throw has disclosed all
information material to the applications, registrations and filings listed in
Exhibit 2.12 to the appropriate government agencies, and has properly complied
with all procedural requirements pertaining to the preparation and filing of
such applications, registrations, and filings. As used herein, the term
"Intellectual Property Rights" shall mean all industrial and intellectual
property rights in any jurisdiction in the world, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service mark applications, copyright, copyright
applications, moral rights, franchises, licenses, inventories, know-how, trade
secrets, customer lists, proprietary processes
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and formulae, all source and object code, algorithms, architecture, structure,
display screens, layouts, inventions, development tools and all documentation
and media constituting, describing or relating to the above, including, without
limitation, manuals, memoranda and records.
2.13 Compliance with Laws. Throw has complied, or prior to the Closing
Date will have complied, and is or will be at the Closing Date in full
compliance, in all material respects with all applicable laws, ordinances,
regulations, and rules, and all orders, writs, injunctions, awards, judgments,
and decrees applicable to it or to the assets, properties, and business thereof
(the violation of which would have a material adverse effect upon its business),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state, and local laws,
ordinances, regulations, and all orders, writs, injunctions, awards, judgments,
and decrees pertaining to (i) the sale, licensing, leasing, ownership, or
management of its owned, leased or licensed real or personal property, products
and technical data, (ii) employment and employment practices, terms and
conditions of employment, and wages and hours and (iii) safety, health, fire
prevention, environmental protection, toxic waste disposal, building standards,
zoning and other similar matters (c) the Export Administration Act and
regulations promulgated thereunder and all other laws, regulations, rules,
orders, writs, injunctions, judgments and decrees applicable to the export or
re-export of controlled commodities or technical data and (d) the Immigration
Reform and Control Act. Throw has received all permits and approvals from, and
has made all filings with, third parties, including government agencies and
authorities, that are necessary in connection with its present business and
which, if not received or filed, would have a material adverse effect on its
business, other than changes that affect the Internet Community as a whole and
not Throw exclusively; provided that Throw itself is not a party to any such
proceeding or investigation.
2.14 Certain Transactions and Agreements. To Throw's knowledge, none of
its officers or directors or the Principal, nor any member of their immediate
families, has any direct or indirect ownership interest in any firm or
corporation that competes with Throw (except with respect to any interest in
less than five percent (5%) of the stock of any corporation whose stock is
publicly traded). None of the officers, directors or the Principal, nor any
member of their immediate families, is directly or indirectly interested in any
contract or informal arrangement with Throw, except for normal compensation for
services as an officer, consultant, director or employee thereof and contracts
with respect to Throw Capital Stock, Throw Options, Throw Warrants, Throw
Convertible Debt or Throw Consultant Debt. None of said officers, directors or
the Principal, nor any member of their immediate families, has any interest in
any property, real or personal, tangible or intangible, including inventions,
patents, copyrights, trademarks or trade names or trade secrets, used in or
pertaining to the business of Throw, except for the normal rights of a
shareholder.
2.15. Employees, ERISA and Other Compliance.
2.15.1 Except as set forth in Exhibit 2.15.1, Throw has no
employment contracts or consulting agreements currently in effect that are not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions). All
current and former officers, employees and consultants of Throw having access to
proprietary information or in any way involved with the creation of Throw
Intellectual Property Rights have executed and delivered to Throw an agreement
regarding the protection of such proprietary information or Throw Intellectual
Property Rights and the assignment of inventions to Throw; copies of the form of
all such agreements have been delivered to Excite's counsel.
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2.15.2 Throw (i) has not ever been nor is subject to a union
organizing effort, (ii) is not subject to any collective bargaining agreement
with respect to any of its employees, (iii) is not subject to any other
contract, written or oral, with any trade or labor union, employees' association
or similar organization, or (iv) has not any current labor disputes. Throw has
good labor relations and has no knowledge of any facts indicating that the
consummation of the transactions contemplated hereby will have a material
adverse effect on such labor relations and has no knowledge that any of its key
employees intends to leave its employ.
2.15.3 Exhibit 2.15.3 identifies each "employee benefit plan," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), currently or previously maintained, contributed to or
entered into by Throw under which Throw or any ERISA Affiliate (as defined
below) thereof has any present or future obligation or liability (collectively,
the "Throw Employee Plans"). For purposes of this Section 2.15.3, "ERISA
Affiliate" shall mean any entity which is a member of (A) a "controlled group of
corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under "common control," as defined in Section 414(c) of the Code, or (C) an
"affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes Throw. Except as set forth in Exhibit 2.15.3, copies of all Throw
Employee Plans (and, if applicable, related trust agreements) and all amendments
thereto and summary plan descriptions thereof (including summaries of material
modifications) have been delivered to Excite or its counsel, together with the
three most recent annual reports (Form 5500, including, if applicable, Schedule
B thereto), if such reports are required by ERISA, prepared in connection with
any such Throw Employee Plan. All Throw Employee Plans which individually or
collectively would constitute an "employee pension benefit plan," as defined in
Section 3(2) of ERISA (collectively, the "Throw Pension Plans"), are identified
as such in Exhibit 2.15.3. All contributions due from Throw prior to the Closing
Date with respect to any of the Throw Employee Plans have been or will be made
prior to such Closing Date or have otherwise been accrued on Throw's financial
statements as required by generally accepted accounting principles and all such
contributions have or will be made in accordance with ERISA. Each Throw Employee
Plan has been maintained substantially in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including, without limitation, ERISA and the Code, which are applicable to such
Throw Employee Plans.
2.15.4 No "prohibited transaction," as defined in Section 406 of
ERISA or Section 4975 of the Code, has occurred with respect to any Throw
Employee Plan which is covered by Title I of ERISA which would result in a
material liability to Throw taken as a whole, excluding transactions effected
pursuant to (or covered by) a statutory, regulatory or administrative exemption.
Neither Throw nor any of its officers or directors have engaged in any
transaction or acted or failed to act in any manner that violates the fiduciary
requirements of ERISA with respect to any Throw Employee Plan and that would
subject Throw or any of its officers or directors to a material liability. No
event or omission has occurred in connection with any Throw Employee Plan that
would make Throw or any of its officers or directors liable for any material tax
(as defined in Section 2.7) or material penalty pursuant to Sections 4972, 4975,
4976 or 4979 of the Code or Section 502 of ERISA.
2.15.5 Except as set forth in Exhibit 2.15.5, any Throw Pension Plan
which is intended to be qualified under Section 401(a) of the Code has received
a favorable determination from the Internal Revenue Service that the Plan
document for such Throw Pension Plan satisfies the requirements for
qualification, and Throw is not aware of any reason why such determination
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may not be relied upon by such plan (other than changes in the law resulting
from the Small Business Job Protection Act of 1996 and the Taxpayers Relief Act
of 1997).
2.15.6 Exhibit 2.15.6 lists each employment, severance or other
similar contract, arrangement or policy and each plan or arrangement (written or
oral) providing for insurance coverage (including any self-insured
arrangements), workers' benefits, vacation benefits, severance benefits,
disability benefits, death benefits, hospitalization benefits, retirement
benefits, deferred compensation, profit-sharing, bonuses, stock options, stock
purchase, phantom stock, stock appreciation or other forms of incentive
compensation or post-retirement insurance, compensation or benefits for
employees, consultants or directors which (A) is not an Throw Employee Plan, (B)
is entered into, maintained or contributed to, as the case may be, by Throw and
(C) covers any employee or former employee of Throw. Such contracts, plans and
arrangements as are described in this Section 2.15.6 are herein referred to
collectively as the "Throw Benefit Arrangements." Each Throw Benefit Arrangement
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
which are applicable to such Throw Benefit Arrangement. Throw has delivered to
Excite or its counsel a complete and correct copy or description of each Throw
Benefit Arrangement.
2.15.7 Except as set forth in Exhibit 2.15.7, there has been no
amendment to, or written interpretation or announcement (whether or not written)
by Throw relating to, or material change in employee participation or coverage
under, any Throw Employee Plan or Throw Benefit Arrangement that would increase
materially the expense of maintaining such Throw Employee Plan or Throw Benefit
Arrangement above the level of the expense incurred in respect thereof for the
fiscal year ended December 31, 1997.
2.15.8 Throw (or its designee) has timely provided to individuals
entitled thereto all required notices and coverage pursuant to Section 4980B of
the Code and the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), with respect to any "qualifying event" (as defined in Section
4980B(f)(3) of the Code) under any Throw Employee Plan occurring prior to and
including the Closing Date, except where the failure to do so would not result
in a material liability to Throw and no material Tax payable on account of
Section 4980B of the Code has been incurred with respect to any current or
former employees (or their beneficiaries) of Throw.
2.15.9 No benefit payable or which may become payable by Throw due
to the consummation of the transactions contemplated by this Agreement or
pursuant to any Throw Employee Plan or any Throw Benefit Arrangement shall
constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of
the Code) which is subject to the imposition of a material excise Tax under
Section 4999 of the Code or which would not be deductible by reason of Section
280G of the Code.
2.15.10 Throw is in compliance in all material respects with all
applicable laws, agreements and contracts relating to employment, employment
practices, wages, hours, and terms and conditions of employment, including, but
not limited to, employee compensation matters, but not including ERISA.
2.15.11 To Throw's knowledge, no employee of Throw is in violation
of any term of any employment contract, patent disclosure agreement,
noncompetition agreement, or any other contract or agreement, or any restrictive
covenant relating to the right of any such
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employee to be employed thereby, or to use trade secrets or proprietary
information of others, and the employment of such employees by Throw does not
subject Throw to any liability.
2.15.12 A list of all employees, officers and consultants of Throw
and their current compensation has been delivered to Excite and attached hereto
as Exhibit 2.15.12.
2.15.13 Except for the agreements described in Section 1.1.2 hereof,
Throw is not a party to any (a) agreement with any executive officer or other
key employee thereof (i) the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction involving
Throw in the nature of any of the transactions contemplated by this Agreement
and the Agreement of Merger, (ii) providing any term of employment or
compensation guarantee, or (iii) providing severance benefits or other benefits
after the termination of employment of such employee regardless of the reason
for such termination of employment, or (b) agreement or plan, including, without
limitation, any stock option plan, stock appreciation rights plan or stock
purchase plan, any of the benefits of which will be materially increased, or the
vesting of benefits of which will be materially accelerated, by the occurrence
of any of the transactions contemplated by this Agreement and the Agreement of
Merger or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement and the
Agreement of Merger.
2.16 Corporate Documents. Throw has made available to Excite for
examination all documents and information listed in the Throw Schedule of
Exceptions or other Exhibits called for by this Agreement or which have been
requested by Excite's legal counsel, including, without limitation, the
following: (a) copies of Throw's Articles of Incorporation and Bylaws as
currently in effect; (b) its Minute Book containing all records of all
proceedings, consents, actions, and meetings of the shareholders, the board of
directors and any committees thereof; (c) its stock ledger and journal
reflecting all stock issuances and transfers; and (d) all permits, orders, and
consents issued by any regulatory agency with respect to Throw, or any
securities of Throw, and all applications for such permits, orders, and
consents.
2.17 No Brokers. Except as set forth in Exhibit 2.17, neither Throw nor
the Principal are obligated for the payment of fees or expenses of any
investment banker, broker or finder in connection with the origin, negotiation
or execution of this Agreement or the Throw Ancillary Agreements or in
connection with any transaction contemplated hereby or thereby.
2.18 Disclosure. Neither this Agreement, its exhibits and schedules, nor
any of the certificates or documents to be delivered by Throw to Excite under
this Agreement, when taken together, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which such statements were made, not materially misleading. To the knowledge of
Throw and the Principal, there are no undisclosed liabilities that would have a
material effect on the present or future operations or financial condition of
Throw or that would prevent Throw from fulfilling its obligations under this
Agreement.
2.19 Information Supplied. None of the information supplied or to be
supplied by Throw to the Throw Shareholders in connection with any written
consent by Throw Shareholders (collectively, "Shareholder Materials"), at the
date such information was supplied prior to the time the Throw Shareholders were
requested to execute a written consent to approve the Merger, contained or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not materially misleading; provided,
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however, that Throw makes no representations or warranties regarding information
furnished by or related to Excite.
2.20 Insurance. Throw maintains fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance which it believes to be reasonably prudent for similarly sized and
similarly situated businesses.
2.21 Environmental Matters.
2.21.1 During the period that Throw has leased or owned its
properties or owned or operated any facilities, there have been no disposals,
releases or threatened releases of Hazardous Materials (as defined below) by
Throw, or to Throw's or the Principal's knowledge, by others, on, from or under
such properties or facilities, the liability for which would have a material
adverse effect on Throw's business. Throw has no knowledge of any presence,
disposals, releases or threatened releases of Hazardous Materials on, from or
under any of such properties or facilities, which may have occurred prior to
Throw having taken possession of any of such properties or facilities. For the
purposes of this Agreement, the terms "disposal," "release," and "threatened
release" shall have the definitions assigned thereto by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA"). For the purposes of this Agreement
"Hazardous Materials" shall mean any hazardous or toxic substance, material or
waste which is or becomes prior to the Closing regulated under, or defined as a
"hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous
materials," "toxic substance" or "hazardous chemical" under (1) CERCLA; (2) any
similar federal, state or local law; or (3) regulations promulgated under any of
the above laws or statutes.
2.21.2 To the knowledge of Throw and the Principal, none of the
properties or facilities of Throw is in material violation of any federal, state
or local law, ordinance, regulation or order relating to industrial hygiene or
to the environmental conditions on, under or about such properties or
facilities, including, but not limited to, soil and ground water condition.
During the time that Throw has owned or leased its properties and facilities,
neither Throw nor, to Throw's and the Principal's knowledge, any third party,
has used, generated, manufactured or stored on, under or about such properties
or facilities or transported to or from such properties or facilities any
Hazardous Materials except in substantial accordance with applicable
environmental laws.
2.21.3 During the time that Throw has owned or leased its respective
properties and facilities, there has been no litigation brought or, to its
knowledge threatened, against Throw by, or any settlement reached by Throw with,
any party or parties alleging the presence, disposal, release or threatened
release of any Hazardous Materials on, from or under any of such properties or
facilities.
2.22 Interested Party Transactions. No officer or director of Throw or any
"affiliate" or "associate" (as those terms are defined in Rule 405 promulgated
under the Securities Act) of any such person has had, either directly or
indirectly, a material interest in: (i) any person or entity which purchases
from or sells, licenses or furnishes to Throw any goods, property, technology or
intellectual or other property rights or services; or (ii) any contract or
agreement to which Throw is a party or by which it may be bound or affected.
2.23 Tax-Free Treatment. To the knowledge of Throw, the Principal, and
Throw's affiliates, there are no situations that would prevent the treatment of
the Merger as a tax-free transaction under Section 368(a) of the Code.
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3. REPRESENTATIONS AND WARRANTIES OF EXCITE AND SUB
Excite and Sub hereby jointly and severally represent and warrant as
follows, that, except as set forth on the Excite Schedule of Exceptions
delivered to Throw as Exhibit 3.0:
3.1 Organization and Good Standing.
3.1.1 Excite is a corporation duly organized, validly existing and
in good standing under the laws of the State of California, and has the
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified as a foreign corporation in each jurisdiction in which a failure to be
so qualified could reasonably be expected to have a material adverse effect on
its present operations or financial condition.
3.1.2 Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power and authority to own, operate and lease its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified as a
foreign corporation in each jurisdiction in which a failure to be so qualified
could reasonably be expected to have a material adverse effect on its present
operations or financial condition.
3.2 Power, Authorization and Validity.
3.2.1 Excite and Sub have the right, power, legal capacity and
authority to enter into and perform their obligations under this Agreement, and
all agreements to which Excite or Sub is or will be a party that are required to
be executed pursuant to this Agreement (the "Excite Ancillary Agreements"). The
execution, delivery and performance of this Agreement and the Excite Ancillary
Agreements have been duly and validly approved and authorized by Excite's Board
of Directors and Sub's Board of Directors and sole shareholder.
3.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Excite or Sub to enter into, and to perform
its obligations under, this Agreement and the Excite Ancillary Agreements,
except for (a) the filing of the Agreement of Merger with the Delaware Secretary
of State, the filing of appropriate documents with the relevant authorities of
other states in which Excite and Sub are qualified to do business, if any; and
(b) such filings as may be required to comply with federal and state securities
laws.
3.2.3 This Agreement and the Excite Ancillary Agreements are, or
when executed by Excite and/or Sub (as applicable) will be, valid and binding
obligations of Excite and Sub enforceable in accordance with their respective
terms, except as to the effect, if any, of (a) applicable bankruptcy and other
similar laws affecting the rights of creditors generally, (b) rules of law
governing specific performance, injunctive relief and other equitable remedies
and (c) the enforceability of provisions requiring indemnification or
contribution in connection with the offering, issuance or sale of securities;
provided, however, that the Agreement of Merger will not be effective until
filed with the Delaware Secretary of State.
3.2.4 Due Authorization. The Excite Common Stock to be issued in the
Merger to Throw Shareholders, Throw Option Holders, Throw Warrant Holders, Throw
Convertible Debt Holders that elected to convert their debt into Excite Common
Stock at the Effective Time and the Throw Consultant Debt Holder, when issued by
Excite pursuant to the terms and subject to any restrictions of this Agreement,
will be duly authorized, validly issued, fully paid and non-
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assessable, will be issued in compliance with applicable federal and state
securities laws and will be free and clear of all liens, encumbrances and
adverse claims and, except as provided in the Throw Affiliates Agreement (as
defined in Section 4.11 hereof) and the Registration Rights Agreement (as
defined in Section 1.5.1 hereof), may be resold by Throw affiliates in
accordance with Rule 145 of the Securities Act and may be freely resold, without
restriction, by non-affiliates of Throw.
3.3 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement nor any Excite Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of (a) any provision of the
Articles of Incorporation or Certificate of Incorporation of Excite or Sub,
respectively, or the Bylaws of Excite or Sub, all as currently in effect, (b) in
any material respect, any material instrument or contract to which Excite or Sub
is a party or by which Excite or Sub is bound, or (c) any federal, state, local
or foreign judgment, writ, decree, order, statute, rule or regulation applicable
to Excite or Sub or their assets or properties. Excite is not currently in
material violation of any agreement material to its business.
3.4 Disclosure. Excite has made available to Throw an investor disclosure
package consisting of true and complete copies of (a) all Forms 10-Q, 10-K and
8-K filed by Excite with the Securities and Exchange Commission (the "SEC")
since its Initial Public Offering on April 10, 1996 (the "IPO") and up to the
date of this Agreement, (b) any registration statement and amendments thereto
filed with the SEC by Excite in the twelve (12) month period prior to execution
of this Agreement, and (c) all proxy materials distributed to Excite's
shareholders since the IPO and up to the date of this Agreement (collectively,
the "SEC Reports"). The SEC Reports (i) at the time filed, complied in all
material respects with applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) do not, when taken as a whole as of
the date of this Agreement, contain any untrue statement of a material fact or
fail to state a material fact required to be stated in such SEC Reports or
necessary in order to make the statements in such SEC Reports, in light of the
circumstances under which they were made, not misleading. Each of the
consolidated financial statements (including, in each case, any related notes)
contained in the SEC Reports, including any SEC Reports filed after the date of
this Agreement until the Closing, complied or will comply as to form in all
material respect with the applicable published rules and regulations of the SEC
with respect thereto, was prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
and fairly presented the consolidated financial position of Excite as of the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
3.5 Absence of Certain Changes. Since the December 31, 1997 financial
statements included in the SEC Reports, there has not been any change in the
financial condition, properties, assets, liabilities, business or operations of
Excite which change by itself or in conjunction with all other such changes,
whether or not arising in the ordinary course of business, has had or will have
a material adverse effect thereon except as disclosed in the SEC Reports.
3.6 Compliance with Laws. Excite and Sub have complied, or prior to the
Closing Date will have complied, and are or will be at the Closing Date in full
compliance, in all material
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respects with all applicable laws, ordinances, regulations, and rules, and all
orders, writs, injunctions, awards, judgments, and decrees applicable to them,
the violation of which would have a material adverse effect upon their business.
Excite and Sub have received all permits and approvals from, and have made all
filings with, third parties, including government agencies and authorities, that
are necessary in connection with their present business. To Excite's and Sub's
knowledge, there are no legal or administrative proceedings or investigations
pending or threatened, that, if enacted or determined adversely to them, would
result in any material adverse change in the present or future operations or
financial condition thereof, other than changes that affect the Internet
Community as a whole and not Excite or Sub exclusively; provided that neither
Excite nor Sub is a party to any such proceeding or investigation.
3.7 Information Supplied. None of the information supplied or to be
supplied by Excite for distribution to Throw Shareholders in connection with any
Throw Shareholder vote, including the SEC Reports, at the date such information
was supplied prior to the time Throw Shareholders were requested to execute a
written consent to approve the Merger, contained or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not materially
misleading; provided, however, that Excite makes no representations or
warranties regarding information furnished by or related to Throw.
3.8 No Brokers. Excite and Sub are not obligated for the payment of fees
or expenses of any investment banker, broker or finder in connection with the
origin, negotiation or execution of this Agreement or the Excite Ancillary
Agreements or in connection with any transaction contemplated hereby or thereby.
3.9 Litigation. There is no action, proceeding, claim or investigation
pending against Excite before any court or administrative agency that if
determined adversely to Excite may reasonably be expected to have a material
adverse effect on the present or future operations or financial conditions of
Excite or Sub, or to prevent Excite or Sub from fulfilling its respective
obligations under this Agreement; nor to Excite's and the Sub's knowledge has
any such action, proceeding, claim or investigation been threatened.
3.10 Tax-free Treatment. To the knowledge of Excite, Sub and their
respective affiliates, there are no situations that would prevent the treatment
of the Merger as a tax-free transaction under Section 368(a) of the Code. Excite
has no plan or intention directly or indirectly (through one or more related
parties) to reacquire any of its voting common stock issued in the Merger. For
these purposes "related parties" include corporations which are members of the
same affiliated group as defined in Section 1504 of the Code (determined without
regard to Section 1504(b) of the Code), or two corporations if the first
corporation purchases the stock of the second corporation in a transaction which
would be treated as a distribution in redemption of the stock of the first
corporation under Section 304(a) (2) of the Code (determined without regard to
Treas. Reg. Sec. 1.1502-80(b)). In addition, a corporation will be treated as
related to another corporation if such relationship exists immediately before or
immediately after the acquisition of the stock involved. Moreover, a
corporation, other than Throw or a person related to Throw, will be treated as
related to Excite if the relationship is created in connection with the Merger.
For purposes of this representation, it should be noted that Excite may from
time to time repurchase some of its issued and outstanding common stock in open
market repurchase transactions unrelated to the Merger.
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3.11 Undisclosed Liabilities. To the knowledge of Excite and Sub, there
are no undisclosed liabilities that would have a material adverse effect on the
present or future operations or financial conditions of Excite or Sub, or that
would prevent Excite or Sub from fulfilling their obligations under this
Agreement.
4. THROW AND PRINCIPAL SHAREHOLDER PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Throw and the Principal for purpose of Sections 4.4 and 4.10 only,
covenant and agree as follows:
4.1 Advice of Changes. Throw will promptly advise Excite in writing (a) of
any event occurring subsequent to the date of this Agreement that would render
any representation or warranty of Throw contained in this Agreement, if made on
or as of the date of such event or the Closing Date, untrue or inaccurate in any
material and adverse respect and (b) of any material adverse change in Throw's
business, results of operations or financial condition; provided however, that
Throw need not so advise Excite when Throw's losses are normal and consistent
with Throw's past business practices or where Throw incurs normal, reasonable
liabilities for services performed in connection with this Agreement, so long as
in all instances such losses or liabilities comply with the requirements and
limitations of Section 4.3 hereof.
4.2 Maintenance of Business. Throw will use its best efforts to carry on
and preserve its business and its relationships with customers, suppliers,
employees and others in substantially the same manner as it has prior to the
date hereof. If Throw becomes aware of a material deterioration in the
relationship with any material customer, supplier or key employee, it will
promptly bring such information to the attention of Excite in writing and, if
requested by Excite, will exert its best efforts to restore the relationship.
4.3 Conduct of Business. Throw will continue to conduct its business and
maintain its business relationships in the ordinary and usual course and will
not, without the prior written consent of Excite:
(a) borrow any money;
(b) enter into any material transaction which involves an expense or
capital commitment by Throw in excess of Twenty Five Thousand Dollars
($25,000.00) individually or Fifty Thousand Dollars ($50,000.00) or more in
aggregate or which obligates Throw for a period exceeding six (6) months other
than fees and expenses associated with this Agreement;
(c) encumber or permit to be encumbered any of its assets or grant
liens therein;
(d) dispose of any portion of its assets with a value exceeding
Twenty Five Thousand Dollars ($25,000);
(e) enter into any lease or contract for the purchase or sale of any
property, real or personal, except in the ordinary course of business consistent
with past practice;
(f) fail to maintain its equipment and other assets in good working
condition and repair according to the standards it has maintained to the date of
this Agreement, subject only to ordinary wear and tear;
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(g) pay any bonus, royalty, increased salary or special remuneration
to any officer, employee or consultant or agree to same or enter into any new
employment, severance, "golden parachute" or consulting agreement with any such
person;
(h) change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock;
(j) amend or terminate any contract, agreement or license to which
it is a party except those amended or terminated in the ordinary course of
business, consistent with past practice, and which are not material in amount or
effect;
(k) lend any amount to any person or entity, other than advances for
travel and expenses which are incurred in the ordinary course of business
consistent with past practice, not material in amount and documented by receipts
for the claimed amount;
(l) guarantee or act as a surety for any obligation except for the
endorsement of checks and other negotiable instruments in the ordinary course of
business, consistent with past practice, which are not material in amount;
(m) waive or release any material right or claim except in the
ordinary course of business, consistent with past practice;
(n) issue or sell any shares of its capital stock of any class
(except upon the exercise of a convertible security, option or warrant currently
outstanding), or any other of its securities, or issue or create any warrants,
obligations, subscriptions, options, convertible debt, or other commitments to
issue shares of capital stock, or (except pursuant to contractual obligations
currently in existence) accelerate the vesting of any outstanding option or
other security;
(o) split or combine the outstanding shares of its capital stock of
any class or enter into any recapitalization affecting the number of outstanding
shares of its capital stock of any class or affecting any other of its
securities;
(p) merge, consolidate or reorganize with, or acquire any entity;
(q) amend its Articles of Incorporation or Bylaws;
(r) license any of its technology or intellectual property except in
the ordinary course of business consistent with past practice;
(s) agree to any audit assessment by any tax authority or file any
federal or state income or franchise tax return unless copies of such returns
have been delivered to Excite for its review and approval by Excite prior to
filing, which review and approval shall not be unreasonably withheld or delayed;
(t) change any insurance coverage or issue any certificates of
insurance;
(u) hire or terminate any employee or consultant, except in the
ordinary course of business;
(v) adopt or amend any employee benefit plan;
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(w) amend or enter into any new, material agreements without
Excite's prior written consent; or
(x) enter into any contracts for the sale of advertising in an
amount exceeding Twenty Five Thousand Dollars ($25,000) or for a period longer
than thirty (30) days.
4.4 Shareholders Approval. Throw will obtain the written consent of the
Throw Shareholders at the earliest practicable date approving this Agreement,
the Throw Ancillary Agreements, the Merger and related matters, which approval
will be unanimously recommended by Throw's Board of Directors and management. To
the extent the Principal holds any Throw Capital Stock at the effective date of
the written consent, the Principal agrees to execute the written consent
approving this Agreement, Merger and all related matters.
4.5 Proxy Statement. Throw will send to or make available to the Throw
Shareholders in a timely manner, for the purpose of considering and executing a
written consent approving the Merger, the Shareholder Materials. Throw will
promptly provide all information relating to its business or operations
necessary for inclusion in the Shareholder Materials to satisfy all requirements
of applicable state and federal securities laws. Throw and Excite each shall be
solely responsible for any statement, information or omission in the Shareholder
Materials relating to it or its affiliates based upon written information
furnished by it. Throw will not provide or publish to the Throw Shareholders any
material concerning it or its affiliates that violates the Securities Act or the
United States Securities Exchange Act of 1934, as amended, (the "Exchange Act")
with respect to the transactions contemplated hereby.
4.6 Regulatory Approvals. Throw will execute and file, or join in the
execution and filing, of any application or other document that may be necessary
in order to obtain the authorization, approval or consent of any governmental
body, federal, state, local or foreign which may be reasonably required, in
connection with the consummation of the transactions contemplated by this
Agreement. Throw will use its best efforts to obtain all such authorizations,
approvals and consents.
4.7 Necessary Consents. Throw will use its best efforts to obtain such
written consents and take such other actions as may be necessary or appropriate
in addition to those set forth in Section 4.6 to allow the consummation of the
transactions contemplated hereby and to allow Excite to carry on Throw's
business after the Closing.
4.8 Litigation. Throw will notify Excite in writing promptly after
learning of any actions, suits, proceedings or investigations by or before any
court, board or governmental agency, initiated by or against it, or known by it
to be threatened against it.
4.9 Access to Information. Until the Closing, Throw will allow Excite and
its agents reasonable access to the files, books, records and offices of Throw,
including, without limitation, any and all information relating to Throw's
taxes, commitments, contracts, leases, licenses, and real, personal and
intangible property and financial condition. Throw will cause its accountants to
cooperate with Excite and its agents in making available all financial
information reasonably requested, including without limitation the right to
examine all working papers pertaining to all financial statements prepared or
audited by such accountants. All such information shall be subject to the terms
of the non-disclosure provisions set forth in the Letter of Intent entered into
by the parties hereto.
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4.10 Satisfaction of Conditions Precedent. Throw will use its best efforts
to satisfy or cause to be satisfied all the conditions precedent which are set
forth in Section 8, and Throw will use its best efforts to cause the
transactions contemplated by this Agreement to be consummated, and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the transactions contemplated hereby.
4.11 Throw Affiliates Agreements. To ensure that the issuance of Excite
Common Stock in this Merger or in any other current or past merger of Excite
complies with the Securities Act and that this Merger or such other mergers may
be accounted for as a "pooling of interests," concurrently with the execution of
this Agreement, Throw will deliver to Excite a letter identifying all persons
who are, in Throw's reasonable judgment, "affiliates" of Throw at the time this
Agreement is executed, including, all (i) officers, (ii) directors and (iii) all
persons or entities who own ten percent (10%) or greater of Throw Capital Stock,
assuming in that calculation that all Throw Options and Throw Warrants have been
exercised (the "Significant Shareholders"). Throw will provide Excite with all
information and documents reasonably necessary to evaluate this list for
compliance with generally accepted accounting principles and securities laws, as
applicable. Throw will use its best efforts to cause each of its affiliates to
deliver to Excite, prior to Closing, a written agreement (the "Throw Affiliates
Agreement"), substantially in the form of Exhibit 4.11.
4.12 Throw Shareholder Representations. To ensure that the Merger will
qualify as a reorganization for federal income tax purposes, Throw will use its
best efforts to cause each of its affiliates, as defined in Section 4.11 above,
to execute, at or before the Closing, the Throw Affiliates Agreement which
contains such representations as may be reasonably requested by Excite, its
accountants or its attorneys for the purpose of ensuring such tax treatment.
4.13 Throw Dissenting Shares. As promptly as practicable after the date of
the Throw Shareholders' written consent and prior to the Closing Date, Throw
shall furnish Excite with the name and address of each Throw Shareholder who
requests appraisal rights pursuant to Section 23B.13 of the Revised Washington
Code (the "Throw Dissenting Shareholder") and the number of Throw Capital Stock
(the "Dissenting Shares") owned by such Throw Dissenting Shareholder.
4.14 Pooling Accounting. Throw shall use its best efforts to cause its
affiliates not to take any action that would adversely affect the ability of
Excite to account for this Merger or any of its other concurrent or past
business combinations as a pooling of interests.
4.15 Blue Sky Laws. Throw shall use its best efforts to assist Excite to
the extent necessary to comply with the securities and Blue Sky laws of all
jurisdictions which are applicable in connection with the Merger.
4.16 Investment Representation Letters. Throw shall request each of the
Throw Shareholders and any holder of Throw Convertible Debt that elects to
convert to Excite Common Stock at the Effective Time to sign an Investor
Representation Letter, in the form agreed to by Throw and Excite, prior to
Close.
4.17 Waivers from Security Holders. Throw shall obtain fully executed
security holder consent and waiver of rights forms from each holder of Throw
Capital Stock, Throw Options,
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Throw Warrants and/or Throw Convertible Debt in the form attached hereto as
Exhibit 4.17 (the "Security Holder Consent and Waiver of Rights").
4.18 Throw Convertible Debt. Throw will use its reasonable efforts to
obtain written agreement, on an individual basis, from each of the holders of
Throw Convertible Debt set forth on Exhibit 4.18 attached hereto to the
conversion of such total outstanding Throw Convertible Debt into Excite Common
Stock at the Effective Time and to the terms of the treatment of such Throw
Convertible Debt as set forth in Section 1.1.1 hereof.
5. EXCITE AND SUB PRECLOSING COVENANTS
During the period from the date of this Agreement until the Effective
Time, Excite and Sub covenant and agree as follows:
5.1 Advice of Changes. Excite and Sub will promptly advise Throw in
writing (a) of any event occurring subsequent to the date of this Agreement that
would render any representation or warranty of Excite or Sub contained in this
Agreement, if made on or as of the date of such event or the Closing Date,
untrue or inaccurate in any material and adverse respect and (b) of any material
adverse change in Excite's or Sub's business, results of operations or financial
condition.
5.2 Regulatory Approvals. Excite and Sub will execute and file, or join in
the execution and filing, of any application or other document that may be
necessary in order to obtain the authorization, approval or consent of any
governmental body, federal, state, local or foreign, which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement. Each of Excite and Sub will use its best efforts to obtain
all such authorizations, approvals and consents.
5.3 Satisfaction of Conditions Precedent. Each of Excite and Sub will use
its best efforts to satisfy or cause to be satisfied all the conditions
precedent which are set forth in Section 7, and each of Excite and Sub will use
its best efforts to cause the transactions contemplated by this Agreement to be
consummated and, without limiting the generality of the foregoing, to obtain all
consents and authorizations of third parties and to make all filings with, and
give all notices to, third parties that may be necessary or reasonably required
on its part in order to effect the transactions contemplated hereby.
5.4 Excite Affiliates Agreements. To ensure that the issuance of Excite
Common Stock in this Merger or any other current or past merger of Excite may be
accounted for as a "pooling of interests," Excite will use its best efforts to
cause each of its affiliates, as defined in Section 4.11 above, to sign and
deliver to Excite a written agreement (the "Excite Affiliates Agreement"), in
the form of Exhibit 5.4, providing that such person will make no disposition of
Excite Common Stock (a) in the thirty (30) day period prior to the Effective
Time or (b) after the Effective Time until Excite shall have publicly released a
report including the financial results of Excite that cover a period of at least
thirty (30) days of operations after the Closing of the Merger.
5.5 Blue Sky Laws. Excite shall take such steps as may be necessary to
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Merger.
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5.6 Pooling Accounting. Excite shall use its best efforts to cause its
affiliates not to take any action that would adversely affect the ability of
Excite to account for this Merger or any of its other concurrent or past
business combinations as a pooling of interests.
5.7 Employee Matters.
5.7.1 Employee Stock Purchase Plan. Subject to compliance with
pooling of interests accounting treatment and the requirements of any applicable
laws, employees of Throw who become employees of Excite at or after the
Effective Time shall be permitted to participate in the Excite 1997 Employee
Stock Purchase Plan (the "ESPP") commencing with the first Offering Period (as
defined in the ESPP) following the Effective Time and such employees will
receive full credit for the period of their employment with Throw by Excite for
such purposes, subject to compliance with the eligibility and other provisions
of such plan; provided, however, nothing contained herein shall require Excite
to continue the employment of any such employee.
5.7.2 Other Benefit Plans. Subject to compliance with pooling of
interests accounting treatment and the requirements of any applicable laws,
employees of Throw who become employees of Excite at or after the Effective Time
will be permitted to participate in those employee benefit plans sponsored by
Excite in which similarly situated Excite employees participate subject to the
eligibility and other provisions of such Excite employee benefit plans. Such
employees will receive full credit for the period of their employment with Throw
by Excite for such purposes; provided, however, nothing contained herein shall
require Excite to continue the employment of any such employee.
5.8 Update SEC Reports. Excite shall update the SEC Reports and any other
disclosures related thereto for any material information which has come into
existence since the SEC Reports were previously provided to Throw's counsel for
delivery to the Throw Shareholders through the Throw Shareholder mailing, until
and through Closing.
5.9 Outstanding Debt and Other Liabilities. Effective as of the Closing,
Excite will assume all outstanding debt and other liabilities of Throw,
including, without limitation, amounts owed to vendors and service providers,
and the principal and interest of the Throw Convertible Debt that is not
converted into Excite Common Stock pursuant to the terms of Section 1.1.1(iv)
hereof. Excite shall pay such debt and liabilities in accordance with the terms
thereof.
5.10 Offer Letters. Prior to the Closing, Excite will provide to each
current employee of Throw (the "Employees") a standard at-will employment offer
letter (the "Offer Letters") containing such standard terms and conditions
offered to current Excite employees at similar levels of responsibility and
authority. The employee invention assignment and confidentiality agreement
attached to the Offer Letter (the "Employee Invention Assignment and
Confidentiality Agreement") shall provide that the Employees will (i) not
compete with the business of Throw and Excite (or any successor corporations)
for: (a) for the founders, consisting of Scott Moody, John Fearnside and Kuntay
Taner, a period of one (1) year following the termination of his employment with
Excite for any reason or (b) for all other Employees, during the term of
employment by Excite and (ii) not solicit any employee of Excite for one (1)
year after Employee's termination of employment with Excite. Excite will pay all
reasonable costs and expense associated with the relocation of the Employees
from Seattle to the San Francisco Bay Area, including without limitation, the
expense of a mutually agreeable professional moving company.
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6. CLOSING MATTERS
6.1 The Closing. Subject to termination of this Agreement as provided in
Section 9 below, the Closing will take place at the offices of Fenwick & West
LLP, Two Palo Alto Square, Palo Alto, California on or before April 8, 1998 (the
"Closing"), or, if all conditions to closing have not been satisfied or waived
by such date, such other place, time and date as Throw and Excite may mutually
select (the "Closing Date"). Concurrently with the Closing, an Agreement of
Merger will be filed in the office of the Delaware Secretary of State and the
Articles of Merger will be filed in the office of Washington Secretary of State.
The Agreement of Merger and the Articles of Merger provide that the Merger shall
become effective upon filing.
6.2 Exchange of Certificates.
6.2.1 As of the Effective Time, all shares of Throw Capital Stock
that are outstanding immediately prior thereto will, by virtue of the Merger and
without further action, cease to exist and will be converted into the right to
receive from Excite the number of shares of Excite Common Stock determined as
set forth in Section 1.1.1, subject to Sections 1.1.4, 1.1.5, 1.2 and 1.3.
6.2.2 Prior to the Effective Time, each holder of shares of Throw
Capital Stock that are not Dissenting Shares will surrender the certificate(s)
for such shares (the "Throw Certificates"), duly endorsed as requested by
Excite, to Excite's counsel for cancellation for Excite's records. Prior to the
Effective Time, each holder of Throw Convertible Debt that elects to convert to
Excite Common Stock at the Effective Time will surrender the original promissory
note(s), security agreement(s) and other related documentation (the "Debt
Instruments") to Excite's counsel for cancellation for Excite's records. Prior
to the Effective Time, Excite's counsel will forward a letter of instruction to
BankBoston, N.A., acting as the transfer agent for Excite, (the "Exchange
Agent") instructing the Exchange Agent to issue to Excite's counsel a
certificate for the number of shares of Excite Common Stock to which such holder
is entitled pursuant to Section 1.1.1 hereof. Excite's counsel will release such
certificate at the Effective Time, provided such holder has surrendered its, his
or her Throw Certificate(s) and/or Debt Instruments to Excite's counsel, to each
such tendering holder. Excite will distribute any cash payable under Section
1.2. The parties agree that due to the timing of the notice of election by
holders of Throw Convertible Debt to convert into Excite Common Stock, such
share certificates may not be available from the Transfer Agent until after
Close.
6.2.3 No dividends or distributions payable to holders of record of
Excite Common Stock after the Effective Time, or cash payable in lieu of
fractional shares, will be paid to the holder of any unsurrendered Throw
Certificate(s) and/or Debt Instruments until the holder of the Throw
Certificate(s) and/or Debt Instruments surrenders such Throw Certificate(s)
and/or Debt Instruments, or if such Throw Certificates or Debt Instruments are
lost, stolen or destroyed, provides an indemnity reasonably acceptable to
Excite. Subject to the effect, if any, of applicable escheat and other laws,
following surrender of any Throw Certificate and/or Debt Instrument, there will
be delivered to the person entitled thereto, without interest, the amount of any
dividends and distributions therefor paid with respect to Excite Common Stock so
withheld as of any date subsequent to the Effective Time and prior to such date
of delivery.
6.2.4 All Excite Common Stock delivered upon the surrender of Throw
Capital Stock in accordance with the terms hereof and the terms of the Escrow
Agreement will be deemed to have been delivered in full satisfaction of all
rights pertaining to such Throw Capital Stock. There will be no further
registration of transfers on the stock transfer books of Throw or
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its transfer agent of the Throw Capital Stock. If, after the Effective Time,
Throw Certificates are presented for any reason, they will be canceled and
exchanged as provided in this Section 6.2.
6.2.5 Until certificates representing Throw Capital Stock
outstanding prior to the Merger are surrendered pursuant to Section 6.2.2 above,
such certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of Excite Common Stock into which the Throw Capital Stock will
have been converted, subject to the Escrow Agreement with respect to the number
of shares withheld as Escrow Shares.
6.2.6 Certificates which are not presented to Excite's counsel
within one (1) year after the Closing shall be canceled and the holder thereof
will no longer be entitled to receive any Excite securities in consideration
thereof. Any Debt Instruments not delivered at or prior to the Effective Time
will not be deemed to be convertible into Excite Common Stock and shall be
payable only in cash pursuant to the terms thereof.
6.3 Assumption of Options and Warrants. Upon Closing, Excite will notify
in writing each holder of a Throw Option and Throw Warrant of the assumption of
such Throw Option and Throw Warrant by Excite, and the number of shares of
Excite Common Stock that are then subject to such option or warrant and the
exercise price of such option or warrant, as determined pursuant to Section 1.1
hereof.
7. CONDITIONS TO OBLIGATIONS OF THROW
Throw's obligations hereunder are subject to the fulfillment or
satisfaction, on and as of the Closing, of each of the following conditions (any
one or more of which may be waived by Throw, but only in a writing signed by
Throw):
7.1 Accuracy of Representations and Warranties. The representations and
warranties of Excite and Sub set forth in Section 3 shall be true and accurate
in all material respects on and as of the Closing with the same force and effect
as if they had been made at the Closing, and Throw shall receive a certificate
to such effect executed by each of Excite's and Sub's Chief Financial Officer.
7.2 Covenants. Excite shall have performed and complied in all material
respects with all of its covenants contained in Section 5 on or before the
Closing, and Throw shall receive a certificate to such effect signed by each of
Excite's and Sub's Chief Financial Officer.
7.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
7.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
7.5 Opinion of Excite's Counsel. Throw shall have received from counsel to
Excite an opinion substantially in the form of Exhibit 7.5.
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7.6 Shareholder Approval. The principal terms of this Agreement and the
Agreement of Merger shall have been approved and adopted by Throw Shareholders,
as required by applicable law and Throw's Articles of Incorporation and Bylaws.
7.7 Tax Certificate and Affiliates Agreement. Throw shall have received
the tax certificate executed by Excite's Chief Financial Officer in the form of
Exhibit 1.6A and an Excite Affiliates Agreement executed by each affiliate in
the form of Exhibit 5.4, which are all reasonably satisfactory to Throw.
7.8 No Material Adverse Change. There will not have been any material
adverse change in Excite's business results of operations or financial condition
at Closing which have or reasonably would be expected to impair Excite's ability
after Closing to continue to develop, distribute, sell and distribute its
products and services that are material to Excite's business and Throw will
receive a certificate to such effect executed by Excite's Chief Financial
Officer. Material adverse changes shall not include price fluctuations in the
price of Excite's Common Stock on the NASDAQ market not directly related to the
foregoing.
7.9 Registration Rights Agreement. Throw shall have received the
Registration Rights Agreement executed by Excite, which shall be effective as of
the Closing Date.
7.10 Offer Letters. The Employees shall have received Offer Letters with
attached Employee Invention Assignment and Confidentiality Agreements containing
non-competition and non-solicitation provisions, executed by
Excite.
8. CONDITIONS TO OBLIGATIONS OF EXCITE
The obligations of Excite and Sub hereunder are subject to the fulfillment
or satisfaction on, and as of the Closing, of each of the following conditions
(any one or more of which may be waived by Excite, but only in a writing signed
by Excite):
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Throw set forth in Section 2 shall be true and accurate in all
material respects on and as of the Closing with the same force and effect as if
they had been made at the Closing, and Excite shall receive a certificate to
such effect executed by Throw's Chief Executive Officer.
8.2 Covenants. Throw shall have performed and complied in all material
respects with all of its covenants contained in Section 4 on or before the
Closing, and Excite shall receive a certificate to such effect signed by Throw's
Chief Executive Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling by any
court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior to the
Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
8.5 Opinion of Throw's Counsel. Excite shall have received from counsel to
Throw, an opinion substantially in the form of Exhibit 8.5.
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8.6 Consents. Excite shall have received duly executed copies of all
material third-party consents, approvals, assignments, waivers, authorizations
or other certificates contemplated by this Agreement or the Throw Schedule of
Exceptions or as otherwise set forth on Exhibit 8.6 hereto to provide for the
continuation in full force and effect of any and all material contracts,
licenses and leases of Throw and for Excite to consummate the transactions
contemplated hereby in form and substance reasonably satisfactory to Excite,
except for such consents and approvals thereof as Excite and Throw shall have
agreed shall not be obtained, as contemplated by the Excite Schedule of
Exceptions.
8.7 No Litigation. No litigation or proceeding shall be threatened or
pending for the purpose or with the probable effect of enjoining or preventing
the consummation of any of the transactions contemplated by this Agreement, or
which could be reasonably expected to have a material adverse effect on the
present or future operations or financial condition of Throw.
8.8 Requisite Approvals. The principal terms of this Agreement and the
Agreement of Merger shall have been approved by the holders of no less than
ninety five percent (95%) of Throw Capital Stock.
8.9 Dissenting Shares. There shall be no more than five percent (5%) Throw
Dissenting Shares.
8.10 Affiliates Agreements and Throw Shareholder Representations. Throw
shall have delivered to Excite the letter required by Section 4.11 naming all
persons who are Significant Shareholders for purposes of Section 4.11 and all
persons who are "affiliates" of Throw for purposes of Rule 145 under the
Securities Act, and each such person shall have executed and delivered an Throw
Affiliates Agreement to Excite in accordance with Sections 4.11 and 4.12.
8.11 Offer Letters. Excite shall have received executed copies of the
Offer Letters and attached Employee Invention Assignment and Confidentiality
Agreements containing non-competition and non-solicitation provisions, from
the following Employees: Scott Moody, John Fearnside, Paul Reed-Schurr and
Kuntay Taner.
8.12 Resignation of Directors and Officers. The directors and officers of
Throw in office immediately prior to the Effective Time of the Merger will be
replaced as directors and officers (respectively) of Throw automatically
effective as of the Effective Time of the Merger pursuant to the terms of this
Agreement. Excite shall have received the resignation of each such Throw
director and officer, effective as of the Closing Date.
8.13 Status of Agreements. Excite shall be reasonably satisfied that all
agreements that are material to the business of Throw will continue in full
force and effect following the Closing.
8.14 Investor Representation Letters. Excite shall have received completed
and executed Investor Representation Letters from each Throw Shareholder and
each holder of Throw Convertible Debt electing to convert into Excite Common
Stock at the Effective Time which are reasonably satisfactory to Excite.
8.15 Tax-Free Reorganization. Excite shall have received the tax
certificate executed by Throw's Chief Executive Officer in the form of Exhibit
1.6B.
8.16 Security Holder Consent and Waiver of Rights. Excite shall have
received completed and executed Security Holder Consent and Waiver of Rights
Agreements from each
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holder of Throw Capital Stock, Throw Options, Throw Warrants and/or Throw
Convertible Debt that elects to convert into Excite Common Stock which are
reasonably satisfactory to Excite.
8.17 No Material Adverse Change. There will not have been any material
adverse change in Throw's business results of operations or financial condition
at Closing which have or reasonably would be expected to impair Throw's ability
after Closing to continue to develop, sell and distribute its products and
services that are material to Throw's business and Excite will receive a
certificate to such effect executed by Throw's Chief Executive Officer.
8.18 Intellectual Property Assignments. Excite shall have received all
executed assignments relating to all provisional and pending patent
applications, registered copyrights, copyright applications, registered
trademarks, trademark applications, registered tradenames, issued service marks,
and service mark applications listed on Exhibit 2.12 attached hereto.
8.19 Consents to Relocation. Excite shall have received completed and
executed consents from the Employees consenting to their relocation to Excite's
Redwood City office.
9. TERMINATION OF AGREEMENT
9.1 Prior to Closing. This Agreement may be terminated at any time prior
to the Closing by the mutual written consent of each of the parties hereto.
9.2 At the Closing. At or prior to the Closing, this Agreement may be
terminated and abandoned:
9.2.1 By Excite if any of the conditions precedent to Excite's
obligations set forth in Section 8 above have not been fulfilled or waived at
and as of the Closing; or
9.2.2 By Throw if any of the conditions precedent to Throw's
obligations set forth in Section 7 above have not been fulfilled or waived at
and as of the Closing.
Any termination of this Agreement under this Section 9.2 will
be effective by the delivery of notice of the terminating party to the other
party hereto.
9.3 Remedies. Any termination of this Agreement pursuant to this Section 9
will be without further obligation or liability upon any party in favor of the
other party hereto other than except as set forth in this Section 9.3 and the
obligations provided in Sections 11.7 and 11.15, which will survive termination
of this Agreement; provided, however, that nothing herein will limit the
obligation of Throw and Excite to use their best efforts to cause the Merger to
be consummated, as set forth in Sections 4.10 and 5.3 hereof, respectively.
10. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING
COVENANTS
10.1 Survival of Representations. All representations, warranties and
covenants of Throw, Excite and Sub contained in this Agreement will survive the
Effective Time and remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the parties to this Agreement, until
the earlier of (a) the termination of this Agreement or (b) one (1) year after
the Closing Date, whereupon such representations, warranties and covenants will
expire (except for covenants that by their terms survive for a longer period),
provided however, that representations, warranties and covenants involving
intentional fraud shall survive the Closing without the limitations of
subsections (a) or (b) above.
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10.2 Agreement to Indemnify.
10.2.1 Subject to the limitations set forth in this Section 10, up
and until the Closing, Throw will indemnify, defend and hold harmless Excite,
its affiliates, officers, directors, employees, consultants and agents
(hereinafter referred to individually as an "Indemnified Person" and
collectively as "Indemnified Persons") from and against any and all claims,
liability, damages and/or costs including, but not limited to, attorneys fees
(hereinafter referred to as "Damages") arising out of any misrepresentation or
breach of or default in performance of any of the representations, warranties
and covenants given or made by Throw and the Principal in this Agreement or in
any certificate, document or instrument delivered by or on behalf of Throw
pursuant hereto.
10.2.2 Subject to the limitations set forth in this Section 10,
after the Closing, the Principal Throw Holders will indemnify and hold harmless
the Indemnified Persons from and against any and all Damages arising out of any
misrepresentation or breach of or default in connection with any of the
representations and warranties given or made by Throw or the Principal in
Section 2 of this Agreement. Each Principal Throw Holder's maximum liability for
breaches of representations, warranties, and covenants involving intentional
fraud by another holder shall be the product of (a) the number of shares of
Excite Common Stock issued to such holder hereunder, and (b) the Per Share
Market Value; provided however, no limit of liability shall apply to any
Principal Throw Holder who is determined to have committed intentional fraud.
Other than for liability for breaches of representations, warranties, and
covenants, which breaches involve intentional fraud, each Principal Throw
Holder's maximum liability shall be his, her or its pro rata share of the Escrow
Shares and each Indemnified Person may look only to the Escrow Shares to satisfy
this indemnity obligation and the sole remedy shall be a claim under the Escrow.
10.2.3 In seeking indemnification for Damages under this Section 10,
the Indemnified Persons shall exercise their remedies with respect to the Escrow
Shares and any other assets deposited in escrow pursuant to the Escrow Agreement
and these Escrow Shares shall be the sole source of indemnification in
connection therewith; provided, however, that no such claim for Damages will be
asserted after the expiration of the Escrow Period. In seeking indemnification
for Damages under Section 10.2.2, the Indemnified Persons shall exercise their
remedies solely to the Escrow Shares deposited in escrow pursuant to the Escrow
Agreement. Except for intentional fraud: (i) no Principal Throw Holder shall
have any liability to an Indemnified Person under this Agreement except to the
extent of such Principal Throw Holder's Escrow Shares deposited under the Escrow
Agreement and (ii) the remedies set forth in this Section 10.2 shall be the
exclusive remedies of Excite and the other Indemnified Persons hereunder against
any Principal Throw Holder and all other Throw Shareholders. The liability of
any Principal Throw Holder with respect to any claim for intentional fraud shall
be several and not joint.
10.2.4 Excite will indemnify, defend and hold harmless Throw, its
affiliates (it is agreed and understood that this term includes all of Throw's
venture capital investors), officers, directors, employees, consultants and
agents from any and all Damages arising from the misrepresentations or breach of
or default in performance of any of the representations and warranties and
covenants given or made by Excite in this Agreement, in any certificate,
document or instrument delivered by or on behalf of Excite pursuant hereto.
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11. MISCELLANEOUS
11.1 Governing Law. The internal laws of the State of Delaware
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
11.2 Assignment; Binding Upon Successors and Assigns. Neither party hereto
may assign any of its rights or obligations hereunder without the prior written
consent of the other party hereto and any attempt to do so will be void. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.3 Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
11.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories.
11.5 Amendment and Waivers. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a writing signed by the party to be bound thereby. The waiver by a party
of any breach hereof or default in the performance hereof will not be deemed to
constitute a waiver of any other default or any succeeding breach or default.
The Agreement may be amended by the parties hereto at any time before or after
approval of the Throw Shareholders; but, after such approval, no amendment will
be made which by applicable law requires the further approval of the Throw
Shareholders without obtaining such further approval.
11.6 No Waiver. The failure of any party to enforce any of the provisions
hereof will not be construed to be a waiver of the right of such party
thereafter to enforce such provisions.
11.7 Expenses. In the event that the transaction is not consummated, each
company will be responsible for its own fees and expenses in connection with the
proposed transaction. In the event that the transaction is consummated, Excite
will be responsible for its own fees and expenses and for Throw's reasonable
fees and expenses in connection with the transaction, including reasonable
attorneys' fees.
11.8 Attorneys' Fees. Should suit be brought to enforce or interpret any
part of this Agreement, the prevailing party will be entitled to recover, as an
element of the costs of the suit, and not as damages, reasonable attorneys'
fees, including without limitation, costs, expenses and fees on any appeal.
11.9 Notices. Any notice or other communication required or permitted to
be given under this Agreement will be in writing, will be delivered personally,
by registered or certified
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mail, postage prepaid, by telecopy or by nationally recognized courier service,
and will be deemed given upon delivery, if delivered personally, or three days
after deposit in the mails, if mailed, to the following addresses:
(i) If to Excite:
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Facsimile: (650) 568-6039
Attention: Chris M. Vail
With a copy to:
Carol Martin
Fenwick & West LLP
2 Palo Alto Square
Palo Alto, CA 94306
Facsimile: (650) 494-0674
(ii) If to Throw:
Throw Inc.
900 First Avenue South, Suite 304
Seattle, WA 98134
Facsimile: (206) 682-9497
Attention: Scott Moody
With a copy to:
William W. Ericson
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033-7355
Facsimile: (425) 739-8750
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 11.9.
11.10 Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section or an exhibit
will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
11.11 No Joint Venture. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between any of the
parties hereto. No party is by virtue of this Agreement authorized as an agent,
employee or legal representative of any other party. No party will have the
power to control the activities and operations of any other and their status is,
and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
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11.12 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
11.13 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
11.14 Public Announcement. Upon execution of the Agreement by both
parties, and until the consummation of the Merger, all press releases and other
public and private communications shall be made by the parties only with the
prior mutual written consent of Throw and Excite, except that Excite may make
such disclosures as are required by applicable law, provided, however, that a
copy of such disclosure shall first be submitted to Throw within a reasonable
time period prior to the dissemination thereof.
11.15 Confidentiality. Excite and Throw each recognize that they have
received and will receive confidential information concerning the other during
the course of the Merger negotiations and preparations. Accordingly, Excite and
Throw each agree (a) to use its respective best efforts to prevent the
unauthorized disclosure of any confidential information concerning the other
that was or is disclosed during the course of such negotiations and
preparations, or should reasonably have been considered to be confidential
information, and (b) to not make use of or permit to be used any such
confidential information other than for the purpose of effectuating the Merger
and related transactions. The obligations of this section will not apply to
information that (i) is or becomes part of the public domain, (ii) is disclosed
by the disclosing party to third parties without restrictions on disclosure,
(iii) is received by the receiving party from a third party without breach of a
nondisclosure obligation to the other party or (iv) is required to be disclosed
by law. If this Agreement is terminated, all copies of documents containing
confidential information shall be returned by the receiving party to the
disclosing party.
11.16 Entire Agreement. This Agreement and the exhibits hereto constitute
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties, with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"EXCITE" "THROW"
EXCITE, INC. THROW INC.
By: /s/ ROBERT C. HOOD By: /s/ SCOTT MOODY
--------------------------- -------------------------------------
Name: Robert C. Hood Name: Scott Moody
--------------------------- -------------------------------------
Its: Executive V.P. - CFO Its: President and Chief Executive Officer
--------------------------- -------------------------------------
"SUB" "PRINCIPAL"
CLWYD CORPORATION
By: /s/ ROBERT C. HOOD By: /s/ SCOTT MOODY
--------------------------- -------------------------------------
Scott Moody
Name: Robert C. Hood
---------------------------
Its: CFO
---------------------------
"PRINCIPAL THROW HOLDER"
/s/ SCOTT MOODY
------------------------------------------
Scott Moody
/s/ GLENN NORTHROP
------------------------------------------
Glenn Northrop
/s/ JOHN FEARNSIDE
------------------------------------------
John Fearnside
[SIGNATURE PAGE FOR AGREEMENT AND PLAN OF REORGANIZATION]
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<PAGE> 37
LIST OF EXHIBITS AND SCHEDULES
<TABLE>
<S> <C>
Exhibit A Agreement of Merger
Exhibit B Articles of Merger
Exhibit 1.1.2 Conversion List of Throw Options
Exhibit 1.3 Escrow Agreement
Exhibit 1.5.1A Registration Rights Agreement
Exhibit 1.6A Excite Officers Tax Certificate
Exhibit 1.6B Throw Officers Tax Certificate
Exhibit 2.0 Throw Schedule of Exceptions
Exhibit 2.3 List of all holders and numbers held of Throw
Common Stock, Preferred Stock, Throw Options and
Warrants
Exhibit 2.8 Throw's 1997 Financial Statements and February
Financial Statements
Exhibit 2.11 Material Agreements
Exhibit 2.12 Throw IP Rights Agreements and applications,
registration and filings to protect Throw IP
Rights and related disclosures
Exhibit 2.15.1 Employment Contracts and Consulting Agreements
Exhibit 2.15.3 Throw Employee Plans
Exhibit 2.15.6 Throw Benefit Arrangements
Exhibit 2.15.7 Amendments to Benefit Plan or Arrangement
Exhibit 2.15.12 List of all Employees, Officers and Consultants of
Throw
Exhibit 2.17 Finder's Fee Arrangement
Exhibit 3.0 Excite Schedule of Exceptions
Exhibit 4.11 Throw Affiliates Agreement
Exhibit 4.17 Security Holder Consent and Waiver of Rights
</TABLE>
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<PAGE> 1
EXHIBIT 4.03
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of March 31, 1998 (the "EFFECTIVE DATE") by and between Excite, Inc., a
California corporation ("EXCITE") and the persons and entities listed on Exhibit
A who immediately prior to the Effective Time of the Merger (as defined below)
are all of the shareholders hereby (collectively, the "SHAREHOLDERS" and each
individually a "SHAREHOLDER") of Classifieds2000, Inc., a California corporation
("CLASSIFIEDS2000") and (ii) all of the holders of issued and outstanding
warrants of Classifieds2000 (collectively, the "WARRANTHOLDERS" and each
individually a "WARRANTHOLDER").
R E C I T A L S
A. Classifieds2000, Excite, Excite 2000 Acquisition Corporation ("MERGER
SUB"), Sani El-Fishawy and Karim El-Fishawy have entered into an Agreement and
Plan of Reorganization (the "PLAN") dated as of March 31, 1998, pursuant to
which Merger Sub will merge with and into Classifieds2000 in a reverse
triangular merger with Classifieds2000 to be the surviving corporation of the
Merger (the "MERGER").
B. As a condition precedent to the consummation of the Merger, Section
1.5.1 of the Plan provides that the Shareholders and Warrantholders shall be
granted certain registration rights with respect to the shares of Excite's
Common Stock that are issued to the Shareholders in the Merger or which are
issuable upon exercise of assumed warrants (the "MERGER SHARES"), subject to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "1933 ACT"), and the declaration or ordering of effectiveness of such
registration statement.
(b) Registrable Securities. The term "REGISTRABLE SECURITIES"
means: (1) all of the Merger Shares, and (2) any shares of Common Stock of
Excite issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Merger Shares; excluding in all cases,
however, (i) any Registrable Securities sold by a person in a transaction in
which rights under this Section 1 are not assigned in accordance with Section 2
of this Agreement, (ii) any Registrable Securities sold in a public offering
pursuant to a registration statement filed with the SEC or sold to the public
pursuant to Rule 144 promulgated under the 1933 Act ("RULE 144"); or (iii) any
Registrable Securities which may be sold in the public market in a three-month
period without registration under the 1933 Act pursuant to Rule 144.
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(c) Prospectus. The term "PROSPECTUS" shall mean the
prospectus included in any Registration Statement filed pursuant to the
provisions hereof (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the 1933
Act), as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
(d) Holder. For purposes of this Agreement, the term "HOLDER"
means any person owning of record Registrable Securities.
(e) SEC. The term "SEC" or "COMMISSION" means the U.S.
Securities and Exchange Commission.
1.2 Registration.
(a) Initial Registration. Excite shall prepare and file with
the SEC within ninety (90) days following the Closing (as defined in the Plan),
and use its best efforts to have declared effective as soon as practicable
thereafter, a registration statement (a "REGISTRATION STATEMENT") providing for
the resale by the Holders of all of the Registrable Securities then owned (or to
be owned upon exercise of warrants) by the Holders. Excite shall use its best
efforts to keep the Registration Statement continuously effective, pursuant to
the rules, regulations or instructions under the 1933 Act applicable to the
registration statement used by Excite for such Registration Statement, for such
period (the "EFFECTIVENESS PERIOD") ending on the date that is two (2) years
after the date of the Closing or such shorter period ending when the Registrable
Securities cease to meet the definition of Registrable Securities pursuant to
Section 1.1(b).
(b) Suspension. If Excite shall determine pursuant to the good
faith judgment of the Board of Directors of Excite, that it would be seriously
detrimental to Excite and its shareholders for resales of Registrable Securities
to be made pursuant to the Registration Statement, due to (A) the existence of a
material development or potential material development with respect to or
involving Excite which Excite would be obligated to disclose in the Prospectus
contained in the Registration Statement, which disclosure would in the good
faith judgment of the Board of Directors of Excite be premature or otherwise
inadvisable at such time and would have a material adverse affect upon Excite
and its shareholders, or (B) the occurrence of any event that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or which requires the making of any changes in the
Registration Statement or Prospectus so that it will not contain any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein not misleading or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, then
Excite shall deliver a certificate in writing to the Holders to the effect of
the foregoing and, upon receipt of such certificate, the use of the Registration
Statement and Prospectus will be deferred or suspended and will not
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<PAGE> 3
recommence until (1) such Holder's receipt from Excite of copies of the
supplemented or amended Prospectus, or (2) such Holders are advised in writing
by Excite that the Prospectus may be used. Excite will use its best efforts to
ensure that the use of the Registration Statement and Prospectus may be resumed,
as soon as practicable after the date of such notice and, in the case of a
pending development or event referred to in (A) above, as soon, in the judgment
of Excite, as disclosure of the material information relating to such pending
development would not have a materially adverse effect on Excite's ability to
consummate the transaction, if any, to which such development relates.
Notwithstanding the foregoing or any other provision of this Agreement, the
period during which Excite shall be required to maintain the effectiveness of
the Registration Statement shall be extended by one (1) day for each full or
partial day during which the use of such Registration Statement or Prospectus is
deferred or suspended by Excite in accordance with this Section 1.2(b).
(c) Expenses. All reasonable expenses, other than underwriting
discounts and brokers commissions, incurred in connection with the Registration
Statement shall be borne by Excite.
1.3 Obligations of Excite. Excite shall, as expeditiously as
reasonably possible:
(a) Prepare promptly and file with the SEC the Registration
Statement as provided in Section 1.2(a), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading and cause
such Registration Statement to become effective as soon as practicable.
(b) Prepare promptly and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to Holders such number of copies of a Prospectus,
including a preliminary Prospectus, in conformity with the requirements of the
1933 Act, and such other documents as reasonably requested in order to
facilitate the disposition of the Registrable Securities owned by it that are
included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by Holders,
provided that Excite shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) Notify Holders promptly (i) of any request by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to
such Registration Statement or related prospectus or for additional information,
(ii) of the issuance by the SEC or any other federal or state
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<PAGE> 4
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose,
(iii) of the receipt by Excite of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (iv) of the happening of any
event which makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
the Registration Statement or Prospectus so that it will not contain any untrue
statement of a material fact required to be stated therein or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (v) of Excite's determination that a post-effective
amendment to the Registration Statement would be appropriate. Excite shall use
its best efforts to (i) promptly respond to any request for amendment or
supplement, (ii) lift any stop order, (iii) lift any suspension of
qualification, (iv) amend the Registration Statement and Prospectus to make
them accurate, and (v) file any required post-effective amendment.
1.4 Furnish Information. It shall be a condition precedent to the
obligations of Excite to take any action pursuant to Section 1.2 that each
Holder shall furnish to Excite such information regarding Holder, the
Registrable Securities held by Holder, and the intended method of disposition of
such securities as shall be required to timely effect the registration of
Holder's Registrable Securities.
1.5 Indemnification
(a) By Excite. To the extent permitted by law, Excite will
indemnify and hold harmless each of the Holders, officers and directors,
employees and agents of a Holder or underwriter (as defined in the 1933 Act) and
each person, if any, who controls a Holder within the meaning of the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 ACT"), against any losses,
claims, damages, or liabilities (joint or several) to which they or any of them
may become subject under the 1933 Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including any
preliminary prospectus or final prospectus contained therein or in
any amendments or supplements thereto;
(ii) the omission or alleged omission to state in the
Registration Statement, including any preliminary prospectus or
final prospectus contained therein or in any amendments or
supplements thereto, a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by Excite of the 1933
Act, the 1934 Act, any federal or state securities law or any rule
or regulation promulgated under the 1933 Act, the 1934 Act or any
federal or
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<PAGE> 5
state securities law in connection with the offering covered by
such Registration Statement.
Excite will reimburse each Holder, such officer, director, employee or agent,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Excite (which consent
shall not be unreasonably withheld), nor shall Excite be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by Holder, or by such, officer, director, employee,
agent, underwriter or controlling person of any Holder.
(b) By Holders. To the extent permitted by law, each Holder
will indemnify and hold harmless Excite, each of its directors, each of its
officers who have signed the Registration Statement, each person, if any, who
controls Excite within the meaning of the 1933 Act, any other employee or agent
of Excite, each other Holder, each person, if any, who controls such Holder
within the meaning of the 1933 Act, and any other employee or agent of such
Holder, against any losses, claims, damages or liabilities (joint or several) to
which Excite or any such director, officer, or controlling person, employee or
agent may become subject under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such Registration Statement; and such Holder will
reimburse any legal or other expenses reasonably incurred by Excite or any such
director, officer, or controlling person, employee or agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.5(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by Holder under this
Section 1.5(b) in respect of any Violation shall not exceed the net proceeds
received by Holder in the registered offering out of which such Violation
arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 1.5 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section 1.5, deliver to the indemnifying party a written notice of
the commencement of such an action and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party
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<PAGE> 6
would be inappropriate due to actual or potential conflict of interests between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if an only if
prejudicial to its ability to defend such action, shall (to the extent of such
prejudice) relieve such indemnifying party of any liability to the indemnified
party under this Section 1.5, but the omission so to deliver written notice to
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.5.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of Excite and such Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the Registration Statement becomes effective or in the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such
indemnity agreements shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the 1933 Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the 1933 Act in any case in which either
(i) Holder (and/or any officer, director, employee, agent, underwriter or
controlling person who may be indemnified under Section 1.5(a)), makes a claim
for indemnification pursuant to this Section 1.5 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Section 1.5 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of such Holder
(and/or any officer, director, employee, agent, underwriter or controlling
person who may be indemnified under Section 1.5 (a)) in circumstances for which
indemnification is provided under this Section 1.5; then, and in each such case,
Excite and such Holder (and/or such other person) will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in proportion to their relative fault as
determined by a court of competent jurisdiction; provided however, that in no
event, except in instances of intentional fraud by the Holder in which case
there is no limitation, (i) shall any Holder be responsible for more than the
portion represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the Registration Statement
bears to the public offering price of all securities offered by and sold under
such Registration Statement or (ii) shall a Holder be required to contribute any
amount in excess of the public offering price of all such securities offered and
sold by such Holder pursuant to such Registration Statement; and in any event,
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of Excite and such Holder under
this Section 1.5 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
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1.6 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested in writing by Excite or the managing
underwriter(s) (who shall be nationally recognized) of securities of Excite and
in connection with an underwritten public offering of securities of Excite with
gross proceeds to Excite of at least Twenty Million Dollars ($20,000,000), sell
or otherwise transfer or dispose of any Registrable Securities or any shares of
capital stock of Excite then owned by such Holder (with the exception of 150,000
shares total from all Holders and other than to donees or partners of the Holder
who agree to be similarly bound) for up to ninety (90) days following the
effective date of the Registration Statement for such underwritten offering;
provided, however, that such agreement shall not apply:
(a) to a Holder who beneficially owns less than one and
one-half percent (1 1/2%) of the outstanding Common Stock of Excite; and
(b) unless all Excite officers, directors, key employees and
beneficial owners then holding at least one and one-half percent (1 1/2%) of
Excite's outstanding Common Stock enter into identical lock-up agreements.
In order to enforce the foregoing covenant, Excite shall have the
right to place restrictive legends on the certificates representing the shares
subject to this Section and to impose stop transfer instructions with respect to
the shares of stock of each Holder (and the shares or securities of every other
person subject to the foregoing restriction).
2. ASSIGNMENT.
2.1 Assignment. Notwithstanding anything herein to the contrary, the
registration rights of a Holder under Section 1 hereof may be assigned only (i)
to a party who acquires from Holder at least One Hundred Thousand (100,000)
shares of Common Stock that constitute the original number of Registrable
Securities (as such number may be adjusted to reflect subdivisions, combinations
and stock dividends of Excite's Common Stock), (ii) Registrable Securities
received as a distribution made by a Holder which is a partnership to the
partners of such Holder of Registrable Securities, or (iii) to a party who
acquires Registrable Securities from a Holder by gift, will or intestacy to his
or her spouse or children or to a trust, the beneficiaries of which are
exclusively the Holder and/or such Holder's spouse or children; provided,
however that no party may be assigned any of the foregoing rights until Excite
is given written notice by the assigning party at the time of such assignment
stating the name and address of the assignee and identifying the securities of
Excite as to which the rights in question are being assigned; provided, further
that any such assignee shall receive such assigned rights subject to all the
terms and conditions of this Agreement, including without limitation the
provisions of this Section 2.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
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(a) if to Excite, at:
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Attention: Chief Financial Officer
Facsimile: (650) 568-6039
with a copy to:
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: John W. Kaselic, Esq.
Facsimile: (650) 494-1417
(b) If to Holders:
To the address set forth on Exhibit A hereto
with a copy to:
Cooley Godward, LLP
5 Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Matt Hemington, Esq.
Facsimile: (650) 857-0663
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
3.2 Entire Agreement. This Agreement and the Plan constitute and
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersede any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
3.3 Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Excite and Holders of a majority of all Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 3.3 shall be binding upon each Holder, each permitted successor or
assignee of such Holder and Excite.
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3.4 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of California, excluding
that body of law relating to conflict of laws.
3.5 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
3.6 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
3.7 Successors And Assigns. Subject to the provisions of Section
2.1, the provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
3.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
3.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
3.10 Costs And Attorneys' Fees. In the event that any action, suit
or other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
3.11 Legends.
Each Holder understands that prior to the effectiveness of the
Registration Statement certificates or other instruments representing any of the
Registrable Securities acquired by Holder will bear legends substantially
similar to the following, in addition to any other legends required by federal
or state laws:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY
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REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Each Holder agrees that, in order to ensure and enforce compliance
with the restrictions imposed by applicable law and those referred to in the
foregoing legends, or elsewhere herein, Excite may, prior to the effectiveness
of the Registration Statement issue appropriate "stop transfer" instructions to
its transfer agent, if any, with respect to any certificate or other instrument
representing Registrable Securities, or if Excite transfers its own securities,
that it may make appropriate notations to the same effect in Excite's records.
Each Holder also understands that subsequent to the effectiveness of
the Registration Statement, upon the written request of a Holder, the Holder may
surrender the certificates or other instruments representing any of the
Registrable Securities and Excite will, as promptly as practicable, cause the
legend described above to be replaced with a legend substantially similar to the
following (in addition to any other legends required by state laws):
THE RESALE OF THE SHARES REPRESENTED HEREBY MAY BE MADE ONLY
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED PURSUANT TO
THE TERMS OF A REGISTRATION RIGHTS AGREEMENT BETWEEN EXCITE AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
EXCITE.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
EXCITE, INC. SHAREHOLDERS
By: /s/ ROBERT C. HOOD By: /s/
----------------------------- ------------------------------
Title: E.V.P. - CFO Name:
----------------------------- ------------------------------
Title:
------------------------------
(if applicable)
WARRANTHOLDERS:
By: /s/
-----------------------------
Names:
-----------------------------
Title:
-----------------------------
(if applicable)
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
11
<PAGE> 1
EXHIBIT 4.04
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of April 8, 1998 (the "EFFECTIVE DATE") by and between Excite, Inc., a
California corporation ("EXCITE") and the persons and entities listed on Exhibit
A hereby which includes Throw Shareholders, Throw Warrant Holders upon exercise
of their Throw Warrants, Throw Convertible Debt Holders that elect to convert to
Excite Common Stock at the Effective Time and the holder of Throw Consultant
Debt (collectively, the "SHAREHOLDERS" and each individually a "SHAREHOLDER")
who immediately prior to the Effective Time of the Merger (as defined below) are
all of the Throw Shareholders, Throw Warrant Holders, converting Throw
Convertible Debt Holders and holder of Throw Consultant Debt of Throw Inc., a
Washington corporation ("THROW"). All terms not otherwise defined herein shall
have the meaning set forth in the Plan (as defined below).
R E C I T A L S
A. Throw, Excite and Clwyd Corporation ("SUB") have entered into an
Agreement and Plan of Reorganization (the "PLAN") dated as of April 8, 1998,
pursuant to which Sub will merge with and into Throw in a reverse triangular
merger with Throw to be the surviving corporation of the Merger (the "MERGER").
B. As a condition precedent to the consummation of the Merger, Section
1.5.1 of the Plan provides that the Shareholders shall be granted certain
registration rights with respect to the shares of Excite's Common Stock that are
issued to the Shareholders in the Merger, to the holders of Throw Convertible
Debt that elect to convert into Excite Common Stock at the Effective Time, to
the holder of Throw Consultant Debt or which are issuable upon exercise of
assumed Throw Warrants (the "MERGER SHARES"), subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "1933 ACT"), and the declaration or ordering of effectiveness of such
registration statement.
(b) Registrable Securities. The term "REGISTRABLE SECURITIES"
means: (1) all of the Merger Shares, and (2) any shares of Common Stock of
Excite issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Merger Shares; excluding in all cases,
however, (i) any Registrable Securities sold by a person in a transaction in
which rights under this Section 1 are not assigned in accordance with Section 2
of this Agreement, (ii) any Registrable Securities sold in a public offering
pursuant to a registration statement filed with the SEC or sold to the public
pursuant to Rule 144 promulgated under
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the 1933 Act ("RULE 144"); or (iii) any Registrable Securities which may be sold
in the public market in a three-month period without registration under the 1933
Act pursuant to Rule 144.
(c) Prospectus. The term "PROSPECTUS" shall mean the
prospectus included in any Registration Statement filed pursuant to the
provisions hereof (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the 1933
Act), as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
(d) Holder. For purposes of this Agreement, the term "HOLDER"
means any person owning of record Registrable Securities.
(e) SEC. The term "SEC" or "COMMISSION" means the U.S.
Securities and Exchange Commission.
1.2 Registration.
(a) Shelf Registration. Excite shall prepare and file with the
SEC within ninety (90) days following the Closing (as defined in the Plan), and
use its best efforts to have declared effective as soon as practicable
thereafter, a registration statement (a "REGISTRATION STATEMENT") providing for
the resale by the Holders of all of the Registrable Securities then owned (or
issuable upon exercise of Throw Warrants) by the Holders. Excite shall use its
best efforts to keep the Registration Statement continuously effective, pursuant
to the rules, regulations or instructions under the 1933 Act applicable to the
registration statement used by Excite for such Registration Statement, for such
period (the "EFFECTIVENESS PERIOD") ending on the date that is two (2) years
after the date of the Closing or such shorter period ending when the Registrable
Securities cease to meet the definition of Registrable Securities pursuant to
Section 1.1(b).
(b) Suspension. If Excite shall determine pursuant to the good
faith judgment of the Board of Directors of Excite, that it would be seriously
detrimental to Excite and its shareholders for resales of Registrable Securities
to be made pursuant to the Registration Statement, due to (A) the existence of a
material development or potential material development with respect to or
involving Excite which Excite would be obligated to disclose in the Prospectus
contained in the Registration Statement, which disclosure would in the good
faith judgment of the Board of Directors of Excite be premature or otherwise
inadvisable at such time and would have a material adverse affect upon Excite
and its shareholders, or (B) the occurrence of any event that makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or which requires the making of any changes in the
Registration Statement or Prospectus so that it will not contain any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein not misleading or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, then
Excite shall deliver a certificate in writing to the Holders to the effect of
the foregoing and, upon receipt of such certificate, the use of the Registration
Statement and Prospectus will be deferred or suspended and will not
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<PAGE> 3
recommence until (1) such Holder's receipt from Excite of copies of the
supplemented or amended Prospectus, or (2) such Holders are advised in writing
by Excite that the Prospectus may be used. Excite will use its best efforts to
ensure that the use of the Registration Statement and Prospectus may be resumed
as soon as practicable and, in the case of a pending development or event
referred to in (A) above, as soon, in the judgment of Excite, as disclosure of
the material information relating to such pending development would not have a
materially adverse effect on Excite's ability to consummate the transaction, if
any, to which such development relates. Notwithstanding the foregoing or any
other provision of this Agreement, the period during which Excite shall be
required to maintain the effectiveness of the Registration Statement shall be
extended by one (1) day for each full or partial day during which the use of
such Registration Statement or Prospectus is deferred or suspended by Excite in
accordance with this Section 1.2(b).
(c) Expenses. All reasonable expenses, other than underwriting
discounts and brokers commissions, incurred in connection with the Registration
Statement shall be borne by Excite.
1.3 Obligations of Excite. Excite shall, as expeditiously as
reasonably possible:
(a) Prepare promptly and file with the SEC the Registration
Statement as provided in Section 1.2(a), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading and use
its best efforts to cause such Registration Statement to become effective as
soon as practicable.
(b) Prepare promptly and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to Holders such number of copies of a Prospectus,
including a preliminary Prospectus, in conformity with the requirements of the
1933 Act, and such other documents as reasonably requested in order to
facilitate the disposition of the Registrable Securities owned by it that are
included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by Holders,
provided that Excite shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) Notify Holders promptly (i) of any request by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to
such Registration Statement or related Prospectus or for additional information,
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose, (iii) of the
receipt by Excite of
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<PAGE> 4
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) of the happening of any event which makes any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or which
requires the making of any changes in the Registration Statement or Prospectus
so that it will not contain any untrue statement of a material fact required to
be stated therein or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (v) of
Excite's determination that a post-effective amendment to the Registration
Statement would be appropriate.
1.4 Furnish Information. It shall be a condition precedent to the
obligations of Excite to take any action pursuant to Section 1.2 that each
Holder shall furnish to Excite such information regarding Holder, the
Registrable Securities held by Holder, and the intended method of disposition of
such securities as shall be required to timely effect the registration of
Holder's Registrable Securities.
1.5 Indemnification
(a) By Excite. To the extent permitted by law, Excite will
indemnify and hold harmless each of the Holders, officers and directors,
employees and agents of a Holder or underwriter (as defined in the 1933 Act) and
each person, if any, who controls a Holder within the meaning of the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 ACT"), against any losses,
claims, damages, or liabilities (joint or several) to which they or any of them
may become subject under the 1933 Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including any
preliminary Prospectus or final Prospectus contained therein or in
any amendments or supplements thereto;
(ii) the omission or alleged omission to state in the
Registration Statement, including any preliminary Prospectus or
final Prospectus contained therein or in any amendments or
supplements thereto, a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by Excite of the 1933
Act, the 1934 Act, any federal or state securities law or any rule
or regulation promulgated under the 1933 Act, the 1934 Act or any
federal or state securities law in connection with the offering
covered by such Registration Statement.
Excite will reimburse each Holder, such officer, director, employee or agent,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such
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<PAGE> 5
settlement is effected without the consent of Excite (which consent shall not be
unreasonably withheld), nor shall Excite be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by Holder, or by such, officer, director, employee, agent,
underwriter or controlling person of any Holder.
(b) By Holders. To the extent permitted by law, each Holder
will indemnify and hold harmless Excite, each of its directors, each of its
officers who have signed the Registration Statement, each person, if any, who
controls Excite within the meaning of the 1933 Act, any other employee or agent
of Excite, each other Holder, each person, if any, who controls such Holder
within the meaning of the 1933 Act, and any other employee or agent of such
Holder, against any losses, claims, damages or liabilities (joint or several) to
which Excite or any such director, officer, or controlling person, employee or
agent may become subject under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such Registration Statement; and such Holder will
reimburse any legal or other expenses reasonably incurred by Excite or any such
director, officer, or controlling person, employee or agent in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.5(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of such Holder, which consent shall not be unreasonably withheld; and provided
further, that the total amounts payable in indemnity by Holder under this
Section 1.5(b) in respect of any Violation shall not exceed the net proceeds
received by Holder in the registered offering out of which such Violation
arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 1.5 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section 1.5, deliver to the indemnifying party a written notice of
the commencement of such an action and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall (to the
extent of such prejudice) relieve such indemnifying party of any liability to
the indemnified party under this Section 1.5, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 1.5.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of Excite and such Holders are subject to the condition
that, insofar as they relate to
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<PAGE> 6
any Violation made in a preliminary Prospectus but eliminated or remedied in the
amended Prospectus on file with the SEC at the time the Registration Statement
becomes effective or in the amended Prospectus filed with the SEC pursuant to
SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreements shall not
inure to the benefit of any person if a copy of the Final Prospectus was
furnished to the indemnified party and was not furnished to the person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the 1933 Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the 1933 Act in any case in which either
(i) Holder (and/or any officer, director, employee, agent, underwriter or
controlling person who may be indemnified under Section 1.5(a)), makes a claim
for indemnification pursuant to this Section 1.5 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Section 1.5 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of such Holder
(and/or any officer, director, employee, agent, underwriter or controlling
person who may be indemnified under Section 1.5 (a)) in circumstances for which
indemnification is provided under this Section 1.5; then, and in each such case,
Excite and such Holder (and/or such other person) will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in proportion to their relative fault as
determined by a court of competent jurisdiction; provided however, that in no
event, except in instances of intentional fraud by the Holder in which case
there is no limitation, (i) shall any Holder be responsible for more than the
portion represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the Registration Statement
bears to the public offering price of all securities offered by and sold under
such Registration Statement or (ii) shall a Holder be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such Registration Statement; and in
any event, no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
(f) Survival. The obligations of Excite and such Holder under
this Section 1.5 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
1.6 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested in writing by Excite or the managing
underwriter(s) (who shall be nationally recognized) of securities of Excite and
in connection with an underwritten public offering of securities of Excite with
gross proceeds to Excite of at least Twenty Million Dollars ($20,000,000), sell
or otherwise transfer or dispose of any Registrable Securities or any shares of
capital stock of Excite then owned by such Holder for up to ninety (90) days
following the effective date of the Registration Statement for such underwritten
offering, provided that all executive officers and directors of Excite enter
into similar agreements.
In order to enforce the foregoing covenant, Excite shall have the
right to place restrictive legends on the certificates representing the shares
subject to this Section and to impose stop transfer instructions with respect to
the shares of stock of each Holder (and the shares or securities of every other
person subject to the foregoing restriction).
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2. ASSIGNMENT.
2.1 Assignment. Notwithstanding anything herein to the contrary, the
registration rights of a Holder under Section 1 hereof may be assigned only to a
party who acquires from Holder at least One Hundred Thousand (100,000) shares of
Common Stock that constitute the original number of Registrable Securities (or,
if such Holder holds less than 100,000 shares of Common Stock that constitute
the Holder's original Registrable Securities, all of such Holder's shares of
Common Stock) (as such number may be adjusted to reflect subdivisions,
combinations and stock dividends of Excite's Common Stock) or as a distribution
made by a Holder which is a partnership to the partners of such Holder of
Registrable Securities; provided, however that no party may be assigned any of
the foregoing rights until Excite is given written notice by the assigning party
at the time of such assignment stating the name and address of the assignee and
identifying the securities of Excite as to which the rights in question are
being assigned; provided, further that any such assignee shall receive such
assigned rights subject to all the terms and conditions of this Agreement,
including without limitation the provisions of this Section 2.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) if to Excite, at:
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Attention: Chief Financial Officer
Facsimile: 650/568-6039
with a copy to:
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: Mark Stevens
Facsimile: 650/494-1417
(b) If to Holders:
To the address set forth on Exhibit A hereto
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<PAGE> 8
with a copy to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033-7355
Attention: William W. Ericson
Facsimile: 425/739-8750
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
3.2 Entire Agreement. This Agreement and the Plan constitute and
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersede any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties respecting the subject matter hereof.
3.3 Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Excite and Holders of a majority of all Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 3.3 shall be binding upon each Holder, each permitted successor or
assignee of such Holder and Excite.
3.4 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of California, excluding
that body of law relating to conflict of laws.
3.5 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
3.6 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
3.7 Successors And Assigns. Subject to the provisions of Section
2.1, the provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
3.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
3.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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3.10 Costs And Attorneys' Fees. In the event that any action, suit
or other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
3.11 Legends.
Each Holder understands that prior to the effectiveness of the
Registration Statement certificates or other instruments representing any of the
Registrable Securities acquired by Holder will bear legends substantially
similar to the following, in addition to any other legends required by federal
or state laws:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
Each Holder agrees that, in order to ensure and enforce compliance
with the restrictions imposed by applicable law and those referred to in the
foregoing legends, or elsewhere herein, Excite may, prior to the effectiveness
of the Registration Statement issue appropriate "stop transfer" instructions to
its transfer agent, if any, with respect to any certificate or other instrument
representing Registrable Securities, or if Excite transfers its own securities,
that it may make appropriate notations to the same effect in Excite's records.
Each Holder also understands that subsequent to the effectiveness of
the Registration Statement, upon the written request of a Holder, the Holder may
surrender the certificates or other instruments representing any of the
Registrable Securities and Excite will, as promptly as practicable, cause the
legend described above to be replaced with a legend substantially similar to the
following (in addition to any other legends required by state laws):
THE RESALE OF THE SHARES REPRESENTED HEREBY MAY BE MADE ONLY
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED PURSUANT TO
THE TERMS OF A REGISTRATION RIGHTS AGREEMENT BETWEEN EXCITE AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
EXCITE.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
EXCITE, INC. SHAREHOLDERS
By: /s/ ROBERT C. HOOD By: /s/
-------------------------------- ------------------------------
Title: EVP - CFO Name:
-------------------------------- ------------------------------
Title:
------------------------------
(if applicable)
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
10
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EXHIBIT 5.01
July 1, 1998
Excite, Inc.
555 Broadway
Redwood City, CA 94063
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-3
(File Number 333-58237)(the "Registration Statement") originally filed by you
with the Securities and Exchange Commission (the "Commission") on June 30, 1998,
in connection with the registration under the Securities Act of 1933, as
amended, of an aggregate of 1,065,601 shares of your Common Stock ("Common
Stock"), 1,031,887 shares of which are presently issued and outstanding (the
"Outstanding Shares") and 33,714 shares of which are issuable upon exercise of
warrants (the "Warrants") assumed by you (the "Warrant Shares"), all of which
shares will be sold by certain selling shareholders named in the Registration
Statement (the "Selling Shareholders").
In rendering this opinion, we have examined the following:
(1) the Registration Statement, together with the Exhibits filed as a
part thereof or incorporated therein by reference;
(2) the Prospectus prepared in connection with the Registration
Statement;
(3) the minutes of meetings and actions by written consent of the
shareholders and Board of Directors that are contained in your
minute books that are in our possession;
(4) the stock records that you have provided to us (consisting of a
list of shareholders issued by your transfer agent, BankBoston,
N.A., and a list of option and warrant holders respecting your
capital stock and of any rights to purchase capital stock that was
prepared by you and dated June 15, 1998);
(5) the Agreement and Plan of Reorganization dated as of March 31, 1998
by and among Excite, Inc., a California corporation ("Excite"),
Excite 2000 Acquisition Corporation, a Delaware corporation,
Classifieds2000, Inc., a California corporation, Sani El-Fishawy
and Karim El-Fishawy.
<PAGE> 2
June 26, 1998
Page 2
(6) the Agreement and Plan of Reorganization dated as of April 8, 1998,
by and among Excite, Clwyd Corporation, a Delaware corporation,
Throw Inc., a Washington Corporation and Scott Moody;
(7) the Warrants;
(8) your registration statement on Form 8-A (File No. 0-28064) filed
with the Commission on March 15, 1996, together with the order of
effectiveness issued by the Commission therefor on April 3, 1996;
and
(9) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and
other representations.
We have also confirmed the continued effectiveness of the Company's
registration under the Securities Exchange Act of 1934, as amended, by
telephone call to the offices of the Commission, and have confirmed your
eligibility to use Form S-3.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by us and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from public
officials and records referred to above. We have made no independent
investigation or other attempt to verify the accuracy of any such information
or to determine the existence or non-existence of any other factual matters;
however, we are not aware of any facts that would cause us to believe that the
opinion expressed herein is not accurate.
We are admitted to practice law in the State of California, and we
express no opinion herein with respect to the application or effect of the laws
of any jurisdiction other than the existing laws of the United States of
America and the State of California.
Based on the foregoing, it is our opinion that:
(1) the Outstanding Shares to be sold by the Selling Shareholders
pursuant to the Registration Statement are validly issued, fully paid and
nonassessable; and
<PAGE> 3
June 26, 1998
Page 3
(2) the Warrant Shares, when issued and sold in accordance with the
terms of and in the manner referred to in the Prospectus associated with the
Registration Statement, will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for the your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
