Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
DATED JULY 31, 2001
AMONG
INDIA-SIERRA HOLDINGS, INC.,
iXL ENTERPRISES, INC.,
SCIENT CORPORATION,
INDIA MERGER SUB, INC.,
AND
SIERRA MERGER SUB, INC.
TABLE OF CONTENTS
ARTICLE 1. HOLDING COMPANY AND SUBSIDIARIES....................................1
1.1. Organization of Holdco.................................................1
1.2. Directors and Officers of Holdco.......................................2
1.3. Organization of Merger Subsidiaries....................................2
1.4. Actions of Scient and iXL..............................................2
ARTICLE 2. THE MERGERS; CERTAIN RELATED MATTERS................................2
2.1. The Mergers............................................................2
2.2. Closing................................................................3
2.3. Effective Time.........................................................3
2.4. Effect of the Mergers..................................................3
2.5. Charter and Bylaws.....................................................3
2.6. Officers and Directors.................................................4
2.7. Effect of Scient Merger on Scient Common Stock.........................4
2.8. Effect of Scient Merger on Scient Stock Options and Restricted Stock...5
2.9. Effect of iXL Merger on iXL Common Stock...............................6
2.10. Effect of iXL Merger on iXL Stock Options..............................7
2.11. iXL Warrants...........................................................8
2.12. Certain Adjustments....................................................9
ARTICLE 3. EXCHANGE OF CERTIFICATES............................................9
3.1. Exchange Fund..........................................................9
3.2. Exchange Procedures....................................................9
3.3. Dividends.............................................................10
3.4. No Further Ownership Rights in Stock..................................10
3.5. No Fractional Shares of Holdco Common Stock...........................10
3.6. Termination of Exchange Fund..........................................11
3.7. No Liability..........................................................11
3.8. Investment of the Exchange Fund.......................................11
3.9. Lost Certificates.....................................................11
3.10. Further Assurances....................................................12
3.11. Stock Transfer Books..................................................12
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.....................................12
4.1. Representations and Warranties of iXL.................................12
4.2. Representations and Warranties of Scient..............................29
ARTICLE 5. COVENANTS RELATING TO CONDUCT OF BUSINESS..........................46
5.1. Covenants of iXL......................................................46
5.2. Covenants of Scient...................................................51
5.3. Governmental Filings..................................................57
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5.4. Control of Other Party's Business.....................................57
ARTICLE 6. ADDITIONAL AGREEMENTS..............................................57
6.1. Preparation of Proxy Statement; Stockholders Meetings.................57
6.2. Holdco Board of Directors; Executive Officers.........................60
6.3. Termination of Registration of Scient Common Stock and
iXL Common Stock......................................................61
6.4. Access to Information.................................................61
6.5. Reasonable Best Efforts...............................................62
6.6. Acquisition Proposals.................................................63
6.7. Fees and Expenses.....................................................67
6.8. Directors' and Officers' Indemnification and Insurance................67
6.9. Public Announcements..................................................69
6.10. Listing of Shares of Holdco Common Stock..............................69
6.11. Affiliates............................................................70
6.12. Section 16 Matters....................................................70
6.13. Holdco Stock Option Plan..............................................71
6.14. Notices of Certain Events.............................................71
6.15. Amendment of Rights Agreement. .......................................71
ARTICLE 7. CONDITIONS PRECEDENT...............................................71
7.1. Conditions to Each Party's Obligation to Effect its Respective Merger.72
7.2. Additional Conditions to Obligations of iXL...........................72
7.3. Additional Conditions to Obligations of Scient........................73
ARTICLE 8. TERMINATION AND AMENDMENT..........................................74
8.1. Termination...........................................................74
8.2. Effect of Termination.................................................75
8.3. Amendment.............................................................77
8.4. Extension; Waiver.....................................................77
ARTICLE 9. GENERAL PROVISIONS.................................................77
9.1. Non-Survival of Representations, Warranties and Agreements............77
9.2. Notices...............................................................77
9.3. Interpretation........................................................79
9.4. Counterparts..........................................................80
9.5. Entire Agreement; No Third Party Beneficiaries........................80
9.6. Governing Law.........................................................80
9.7. Severability..........................................................80
9.8. Assignment............................................................80
9.9. Submission to Jurisdiction; Waivers...................................81
9.10. Enforcement...........................................................81
9.11. Definitions...........................................................82
9.12. Performance and Obligations...........................................84
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EXHIBITS
Exhibit A - Voting Agreements
Exhibit B - Holdco Charter
Exhibit C - Holdco Bylaws
Exhibit D - Sierra Merger Sub Certificate
Exhibit E - India Merger Sub Certificate
Exhibit F - Sierra Merger Sub Bylaws
Exhibit G - India Merger Sub Bylaws
Exhibit H - Affiliate Agreement
Exhibit I - Affiliate Registration Rights Agreement
Exhibit J - Tax Representation Letters for Greenberg Traurig, LLP
Exhibit K - Tax Representation Letters for Davis Polk & Wardwell LLP
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Index of Defined Terms
Defined Terms Defined in Section
- ------------- ------------------
Acquiring Person Section 4.2(r)
Acquisition Proposal Section 6.6(a)
Actions Section 4.1(j)(i)
Adjustment Factor Section 9.11
Affiliate Section 9.11
Affiliate Agreement Section 6.11(a)
Affiliate Registration Rights Agreement Section 6.11(c)
Agreement Preamble
Audit Section 9.11
beneficial ownership or beneficially own Section 9.11
Benefit Plans Section 9.11
Blue Sky Laws Section 4.1(c)(iii)
Board of Directors Section 9.11
Business Day Section 9.11
Certificates of Mergers Section 2.3
Certificates Section 2.9
Change in the iXL Recommendation Section 6.6(b)
Change in the Scient Recommendation Section 6.6(b)
Closing Section 2.2
Closing Date Section 2.2
Code Recitals 5
Companies Recitals 1
Company Recitals 1
Confidentiality Agreement Section 6.4
DGCL Section 2.1
Distribution Date Section 4.2(r)
Effective Time Section 2.3
ERISA Section 9.11
ERISA Affiliate Section 4.1(q)(i)
Exchange Act Section 4.1(c)(iii)
Exchange Agent Section 3.1
Exchange Fund Section 3.1
- -------------------------------------------------------------------------------
iv
Defined Terms Defined in Section
- ------------- ------------------
Expenses Section 6.7
Form S-4 Section 6.1(a)
GAAP Section 4.1(e)(i)
Governmental Entity Section 4.1(c)(iii)
Holdco Preamble
Holdco Bylaws Section 1.1
Holdco Charter Section 1.1
Holdco Common Stock Section 1.1
Holdco Preferred Stock Section 1.1
HSR Act Section 4.1(c)(iii)
India Merger Sub Preamble
India Merger Sub Bylaws Section 2.5(d)
India Merger Sub Certificate Section 2.5(b)
India Merger Sub Common Stock Section 2.9(a)
Intellectual Property Section 9.11
iXL Preamble
iXL Benefit Plans Section 4.1(q)(i)
iXL Board Approval Section 4.1(g)
iXL Certificate Section 2.9
iXL Common Stock Section 2.9
iXL Contracts Section 4.1(p)(i)
iXL Disclosure Schedule Section 4.1
iXL Employee Nonsolicitation and Confidentiality Agreement Section 4.1(l)
iXL Exchange Ratio Section 2.9(c)
iXL Filed SEC Reports Section 4.1(e)(ii)
iXL Leased Properties Section 4.1(t)
iXL Merger Section 2.1(b)
iXL Merger Consideration Section 2.9(c)
iXL Minority Interest Section 4.1(d)(i)
iXL Payment Event Section 8.2(c)
iXL Permits Section 4.1(j)(ii)
iXL Public Proposal Section 8.2(c)
iXL Purchase Plan Section 2.10(e)
iXL Recommendation Section 6.1(c)
- -------------------------------------------------------------------------------
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Defined Terms Defined in Section
- ------------- ------------------
iXL Related Persons Section 4.1(s)(i)
iXL SEC Reports Section 4.1(e)(i)
iXL Stock Options Section 2.10(d)
iXL Stock Plans Section 2.10(d)
iXL Stockholders Meeting Section 6.1(c)
iXL Voting Debt Section 4.1(b)(ii)
iXL Warrants Section 4.1(b)(i)
Joint Proxy Statement/Prospectus Section 6.1(a)
known or knowledge Section 9.11
Liens Section 4.1(a)(ii)
Material Adverse Effect Section 9.11
Merger Consideration Section 2.9(c)
Merger Subsidiaries Section 1.3
Mergers Section 2.1(b)
Necessary Consents Section 4.1(c)(iii)
Person Section 9.11
Regulatory Law Section 6.5(b)
Required Approvals Section 6.5(a)
Required iXL Vote Section 4.1(i)
Required Scient Vote Section 4.2(i)
Right Section 2.7(c)
Rights Section 2.7(c)
Rights Agreement Section 2.7(c)
Rights Agreement Amendments Section 6.15
Rule 145 Affiliates Section 6.11(b)
Scient Preamble
Scient 2000 Options Section 2.8(c)
Scient 2000 Plan Section 2.8(c)
Scient 97 Options Section 2.8(b)
Scient 97 Plans Section 2.8(b)
Scient 99 Options Section 2.8(a)
Scient 99 Plan Section 2.8(a)
Scient Benefit Plans Section 4.2(q)(i)
Scient Board Approval Section 4.2(g)
- -------------------------------------------------------------------------------
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Defined Terms Defined in Section
- ------------- ------------------
Scient Certificate Section 2.7
Scient Common Stock Section 2.7
Scient Contracts Section 4.2(p)
Scient Disclosure Schedule Section 4.2
Scient Employee Nonsolicitation Confidentiality Agreement Section 4.2(l)
Scient Exchange Ratio Section 2.7(c)
Scient Filed SEC Reports Section 4.2(e)(ii)
Scient Leased Properties Section 4.2(u)
Scient Merger Section 2.1(a)
Scient Merger Consideration Section 2.7(c)
Scient Minority Interest Section 4.2(d)(i)
Scient Options Section 2.8(c)
Scient Payment Event Section 8.2(b)
Scient Permits Section 4.2(j)(ii)
Scient Plans Section 2.8(c)
Scient Public Proposal Section 8.2(b)
Scient Purchase Plan Section 2.9(d)
Scient Recommendation Section 6.1(b)
Scient Related Persons Section 4.2(t)(i)
Scient SEC Reports Section 4.2(e)(i)
Scient Stockholders Meeting Section 6.1(b)
Scient Voting Debt Section 4.2(b)(ii)
SEC Section 4.1(a)(ii)
Securities Act Section 4.1(c)(iii)
Sierra Merger Sub Preamble
Sierra Merger Sub Bylaws Section 2.5(c)
Sierra Merger Sub Certificate Section 2.5(a)
State Takeover Laws Section 4.1(h)
Stock Acquisition Date Section 4.2(r)
Stockholders Meeting Section 9.11
Subsidiary Section 9.11
Superior Proposal Section 6.6(b)
Tax Section 4.1(n)
Tax Authority Section 9.11
- -------------------------------------------------------------------------------
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Defined Terms Defined in Section
- ------------- ------------------
Tax Return Section 4.1(p)
Taxes Section 4.1(n)
Termination Date Section 8.1(b)
Tessera Options Section 2.10(b)
Tessera Plan Section 2.10(b)
the other party Section 9.11
Third Party Section 9.11
Violation Section 4.1(c)(ii)
Voting Agreements Recitals 4
96 Options Section 2.10(a)
96 Plan Section 2.10(a)
98 Options Section 2.10(c)
98 Plan Section 2.10(c)
99 Options Section 2.10(d)
99 Plan Section 2.10(d)
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AGREEMENT AND PLAN OF MERGER (this "Agreement") entered into on this 31st
day of July 2001, by and among INDIA-SIERRA HOLDINGS, INC., a Delaware
corporation ("Holdco"), IXL ENTERPRISES, INC., a Delaware corporation ("iXL"),
SCIENT CORPORATION, a Delaware corporation ("Scient"), INDIA MERGER SUB, INC.,
a Delaware corporation and a direct, wholly owned subsidiary of Holdco ("India
Merger Sub"), and SIERRA MERGER SUB, INC., a Delaware corporation and a direct,
wholly owned subsidiary of Holdco ("Sierra Merger Sub").
RECITALS
1. The Board of Directors of each of Scient and iXL (each, a "Company,"
and collectively, the "Companies") deem it fair, advisable and in the best
interests of the relevant Company and its stockholders that Scient and iXL
engage in a business combination constituting a merger of equals in order to
implement and advance the long-term strategic business, prospects, interests
and objectives of both Companies;
2. The combination of the Companies shall be effected in accordance with
the terms of this Agreement through each of the Mergers and the transactions
contemplated thereby;
3. In furtherance thereof, the Board of Directors of each of Scient, iXL,
Holdco, India Merger Sub and Sierra Merger Sub has approved this Agreement and
the Mergers, upon the terms and subject to the conditions set forth in this
Agreement, pursuant to which each share of capital stock of Scient and each
share of capital stock of iXL issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive shares of capital
stock of Holdco as set forth herein;
4. As a condition precedent and inducement to each Company's willingness
to enter into this Agreement, certain stockholders of each of Scient and iXL,
as applicable, shall each enter into a voting agreement of even date herewith,
in the forms of Exhibit A hereto (collectively, the "Voting Agreements"),
pursuant to which such stockholders shall agree, among other things, to vote
their shares of capital stock in the relevant Company in favor of the adoption
of this Agreement; and
5. For purposes of U.S. Federal and state income tax, the parties hereto
intend for the Mergers to qualify as reorganizations within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations promulgated thereunder.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby and thereby, the parties
hereto agree as follows:
ARTICLE 1. HOLDING COMPANY AND SUBSIDIARIES
1.1. Organization of Holdco. Scient and iXL have caused Holdco to be
organized under the laws of the State of Delaware. The authorized capital stock
of
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Holdco consists of 500,000,000 shares of common stock, par value $0.0001 per
share (the "Holdco Common Stock"), of which one share has been issued to each
of Scient and iXL, at a price of $100.00 per share, and 10,000,000 shares of
preferred stock, par value $0.0001 per share (the "Holdco Preferred Stock").
Scient and iXL shall take, and shall cause Holdco to take, all requisite action
to cause the certificate of incorporation of Holdco to be in the form of
Exhibit B hereto (the "Holdco Charter"); and the bylaws of Holdco to be in the
form of Exhibit C hereto (the "Holdco Bylaws"), in each case, at the Effective
Time. At the Effective Time, the Holdco Charter shall be amended to change the
name of Holdco to "Scient, Inc."
1.2. Directors and Officers of Holdco. Prior to the Effective Time, the
directors and officers of Holdco shall consist of equal numbers of
representatives of iXL and Scient as designated and elected by iXL and Scient.
iXL and Scient shall take all requisite action to cause the directors and
officers of Holdco at the Effective Time to be as provided in Section 6.2, and
with such duly constituted committees of the Board as provided in Section 6.2,
with each such director and officer to remain in office until his or her
successor is duly elected, appointed and qualified in accordance with the
Holdco Bylaws.
1.3. Organization of Merger Subsidiaries. Holdco has caused India Merger
Sub and Sierra Merger Sub (collectively, the "Merger Subsidiaries") to be
organized for the sole purpose of effectuating the Mergers contemplated herein.
The authorized capital stock of Sierra Merger Sub consists of 100 shares of
common stock, par value $0.01 per share, all of which shares have been issued
to Holdco at a price of $1.00 per share. The authorized capital stock of India
Merger Sub consists of 100 shares of common stock, par value $0.01 per share,
all of which shares have been issued to Holdco at a price of $1.00 per share.
1.4. Actions of Scient and iXL. Scient and iXL, as the holders of all the
outstanding shares of Holdco Common Stock, have approved this Agreement and
have caused Holdco, as the sole stockholder of each of the Merger Subsidiaries,
to adopt this Agreement. Each of Scient and iXL shall cause Holdco, and Holdco
shall cause the Merger Subsidiaries, to perform their respective obligations
under this Agreement.
ARTICLE 2. THE MERGERS; CERTAIN RELATED MATTERS
2.1. The Mergers. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation Law,
as amended (the "DGCL"):
(a) Scient Merger. At the Effective Time, Sierra Merger Sub shall be
merged with and into Scient (the "Scient Merger"). Scient shall
be the surviving corporation in the Scient Merger and shall
continue its corporate existence under the laws of the State of
Delaware. As a result of the Scient Merger, Scient shall become
a direct, wholly owned subsidiary of Holdco.
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(b) iXL Merger. At the Effective Time, iXL shall be merged with and
into India Merger Sub (the "iXL Merger"). India Merger Sub shall
be the surviving corporation in the iXL Merger and shall
continue its corporate existence under the laws of the State of
Delaware. At the Effective Time, India Merger Sub shall change
its name to iXL Enterprises, Inc. The Scient Merger and the iXL
Merger, which shall occur simultaneously, are together referred
to herein as the "Mergers."
2.2. Closing. Upon the terms and subject to the conditions set forth in
Article 7 and the termination rights set forth in Article 8, the closing of the
Mergers (the "Closing") shall take place as promptly as possible after (but in
no event later than the second Business Day after) the satisfaction or waiver
(subject to applicable law) of the last to occur of the conditions (excluding
conditions that, by their nature, cannot be satisfied until the Closing Date)
set forth in Article 7, unless this Agreement theretofore has been terminated
pursuant to its terms or unless another time or date is agreed to in writing by
the parties hereto (the actual time and date of the Closing being referred to
herein as the "Closing Date"). The Closing shall be held at the offices of
Greenberg Traurig, LLP, The MetLife Building, 200 Park Avenue, New York, New
York, 10166, unless another place is agreed to in writing by the parties
hereto.
2.3. Effective Time. As soon as practicable following the satisfaction or
waiver (subject to applicable law) of the conditions set forth in Article 7, at
the Closing the parties shall file the Certificates of Merger with the
Secretary of State of the State of Delaware in such form as is required by and
executed and acknowledged in accordance with the relevant provisions of the
DGCL and make all other filings or recordings required under the DGCL. The
Mergers shall become effective at (i) the date and time each of the certificate
of merger relating to the Scient Merger and the certificate of merger relating
to the iXL Merger (collectively, the "Certificates of Merger") are duly filed
with the Secretary of State of the State of Delaware, or (ii) such subsequent
time as the Companies shall agree and as shall be specified in the respective
Certificates of Merger; provided, however that the Mergers shall become
effective at the same time (such time as the Mergers become effective being
referred to herein as the "Effective Time").
2.4. Effect of the Mergers. At and after the Effective Time, the Mergers
shall have the effects set forth in the DGCL, including Section 259 thereof.
2.5. Charter and Bylaws.
(a) Certificate of Incorporation for Sierra Merger Sub. The
certificate of incorporation of Sierra Merger Sub in effect
immediately prior to the Effective Time, as set forth in the
form of Exhibit D hereto (the "Sierra Merger Sub Certificate"),
shall be the certificate of incorporation of the surviving
corporation in the Scient Merger, until thereafter amended as
provided by law.
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(b) Certificate of Incorporation for India Merger Sub. The
certificate of incorporation of India Merger Sub in effect
immediately prior to the Effective Time, as set forth in the
form of Exhibit E hereto (the "India Merger Sub Certificate"),
shall be the Certificate of Incorporation of the surviving
corporation in the iXL Merger, until thereafter amended as
provided by law.
(c) Bylaws of Sierra Merger Sub. The bylaws of Sierra Merger Sub in
effect immediately prior to the Effective Time, as set forth in
the form of Exhibit F hereto (the "Sierra Merger Sub Bylaws"),
shall be the bylaws of the surviving corporation in the Scient
Merger, until thereafter amended in accordance with the Sierra
Merger Sub Certificate and as provided by law.
(d) Bylaws of India Merger Sub. The bylaws of India Merger Sub in
effect immediately prior to the Effective Time, as set forth in
the form of Exhibit G hereto (the "India Merger Sub Bylaws"),
shall be the bylaws of the surviving corporation in the iXL
Merger, until thereafter amended in accordance with the India
Merger Sub Certificate and as provided by law.
2.6. Officers and Directors. The officers of Scient immediately prior to
the Effective Time shall be the officers of the surviving corporation in the
Scient Merger, until their respective successors are duly appointed and
qualified. The officers of iXL immediately prior to the Effective Time shall be
the officers of the surviving corporation in the iXL Merger, until their
respective successors are duly appointed and qualified. The directors of Sierra
Merger Sub immediately prior to the Effective Time shall be the directors of
the surviving corporation in the Scient Merger, until their respective
successors are duly elected and qualified. The directors of India Merger Sub
immediately prior to the Effective Time shall be the directors of the surviving
corporation in the iXL Merger, until their respective successors are duly
elected and qualified.
2.7. Effect of Scient Merger on Scient Common Stock. At the Effective
Time, by virtue of the Scient Merger and without any action on the part of the
holder of any shares of Scient's common stock, par value $0.0001 ("Scient
Common Stock") or any shares of capital stock of Sierra Merger Sub :
(a) Capital Stock of Sierra Merger Sub. Each issued and outstanding
share of common stock, par value $0.01 per share, of Sierra
Merger Sub shall be converted into the right to receive one
fully paid and nonassessable share of common stock, par value
$0.0001 per share, of the surviving corporation in the Scient
Merger.
(b) Cancellation of Treasury Stock. Each share of Scient Common
Stock issued and owned or held by Scient, Holdco or any
subsidiary of Scient or Holdco shall cease to be outstanding and
shall be canceled and retired, and no consideration shall be
delivered in exchange therefor.
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(c) Conversion of Scient Common Stock. Subject to Section 3.5, each
issued and outstanding share of Scient Common Stock (other than
shares to be canceled and retired in accordance with Section
2.7(b)), including the associated rights to purchase Scient's
Series A Junior Participating Preferred Stock (each, a "Right"
and collectively, the "Rights"), distributed as a dividend to
holders of record of Scient Common Stock on July 31, 2000,
pursuant to that certain Rights Agreement dated July 18, 2000,
between Scient and U.S. Stock Transfer Corporation, as Rights
Agent (the "Rights Agreement"), shall be converted into the
right to receive such number of fully paid and nonassessable
shares of Holdco Common Stock (the "Scient Merger
Consideration") equal to the quotient obtained by dividing (x)
1.24 by (y) the Adjustment Factor (the "Scient Exchange Ratio").
As a result of the Scient Merger and without any action on the part of the
holders, at the Effective Time all shares of Scient Common Stock shall cease to
be outstanding and shall be canceled and retired and shall cease to exist, and
each holder of a certificate that immediately prior to the Effective Time
represented any such shares of Scient Common Stock (such certificate or other
evidence of ownership of certificated or uncertificated shares of Scient Common
Stock, a "Scient Certificate") shall thereafter cease to have any rights with
respect to such shares of Scient Common Stock, except the right (subject to
Section 2.7(b)) to receive the applicable Scient Merger Consideration with
respect thereto and any cash in lieu of fractional shares as provided in
Section 3.5.
2.8. Effect of Scient Merger on Scient Stock Options and Restricted Stock.
(a) 1999 Equity Incentive Plan. At the Effective Time, all options
and other rights to purchase Scient Common Stock (the "Scient 99
Options") pursuant to Scient's 1999 Equity Incentive Plan, as
amended (the "Scient 99 Plan"), shall expire pursuant to Section
11.3(d) of the Scient 99 Plan; provided, however, all unvested
Scient 99 Options shall accelerate and vest prior to the
Effective Time. The Board of Directors of Scient shall take all
actions necessary pursuant to Section 11.3 of the Scient 99 Plan
to cause the expiration of the Scient 99 Options as contemplated
in this Section 2.8(a).
(b) 1997 Stock Plan. At the Effective Time, all options and other
rights to purchase Scient Common Stock (the "Scient 97 Options")
pursuant to Scient's 1997 Stock Plan, as amended (the "Scient 97
Plan"), shall be cancelled pursuant to Section 8(b)(iv) of the
Scient 97 Plan; provided however, all unvested Scient 97 Options
shall accelerate and vest prior to the Effective Time and all
repurchase
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rights with respect to all shares of Scient Common Stock
acquired under the Scient 97 Plan shall terminate. The Board of
Directors of Scient shall take all actions necessary pursuant to
Section 8(b) of the Scient 97 Plan to cause the cancellation of
the Scient 97 Options as contemplated in this Section 2.8(b).
(c) 2000 Stock Plan. At the Effective Time, all options and other
rights to purchase Scient Common Stock (the "Scient 2000
Options," together with the Scient 99 Options and the Scient 97
Options, the "Scient Options") pursuant to Scient's 2000 Stock
Plan (the "Scient 2000 Plan," together with the Scient 99 Plan
and the Scient 97 Plan, the "Scient Plans"), shall be cancelled
pursuant to Section 8.3(d) of the Scient 2000 Plan; provided,
however, all unvested Scient 2000 Options shall accelerate and
vest prior to the Effective Time. The Board of Directors of
Scient shall take all actions necessary pursuant to Section 8.3
of the Scient 2000 Plan to cause the cancellation of the Scient
2000 Options as contemplated in this Section 2.8(c).
(d) Stock Purchase Plan. Promptly following the date hereof, the
Board of Directors of Scient shall take such actions as
necessary to terminate Scient's 1999 Employee Stock Purchase
Plan (the "Scient Purchase Plan"), pursuant to Section 14
thereof; provided, however, such termination shall be
conditioned upon the consummation of the Scient Merger and shall
be made effective as of the Effective Time. At the sole
discretion of the Board of Directors of Scient, Scient shall
provide to each participant of the Scient Purchase Plan notice
of such termination and the balance then credited to each such
participant's account shall be distributed as soon as reasonably
practicable following the Effective Time, without interest.
2.9. Effect of iXL Merger on iXL Common Stock. At the Effective Time, by
virtue of the iXL Merger and without any action on the part of the holder of
any shares of iXL's common stock, par value $0.01 ("iXL Common Stock") or any
shares of capital stock of India Merger Sub:
(a) Capital Stock of India Merger Sub. Each share of common stock,
par value $0.01 per share of India Merger Sub ("India Merger Sub
Common Stock") shall remain outstanding and each certificate
therefor shall continue to evidence one fully paid and
non-assessable share of India Merger Sub Common Stock.
(b) Cancellation of Treasury Stock. Each share of iXL Common Stock
issued and owned or held by iXL, Holdco or any subsidiary of
Holdco shall cease to be outstanding and shall be canceled and
6
retired, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of iXL Common Stock. Subject to Section 3.5, each
issued and outstanding share of iXL Common Stock (other than
shares to be canceled and retired in accordance with Section
2.9(b)) shall be converted into the right to receive such number
of fully paid and non-assessable shares of Holdco Common Stock
(the "iXL Merger Consideration" and, together with the Scient
Merger Consideration, the "Merger Consideration") equal to the
quotient obtained by dividing (x) 1.00 by (y) the Adjustment
Factor (the "iXL Exchange Ratio").
As a result of the iXL Merger and without any action on the part of the
holders of any shares of iXL Common Stock, at the Effective Time all shares of
iXL Common Stock shall cease to be outstanding and shall be canceled and
retired and shall cease to exist, and each holder of a certificate which
immediately prior to the Effective Time represented any such shares of iXL
Common Stock (an "iXL Certificate" and, together with the Scient Certificates,
the "Certificates") shall thereafter cease to have any rights with respect to
such shares of iXL Common Stock, except the right (subject to Section 2.9(b))
to receive the applicable iXL Merger Consideration with respect thereto and any
cash in lieu of fractional shares as provided in Section 3.5.
2.10. Effect of iXL Merger on iXL Stock Options.
(a) 1996 Plan. At the Effective Time, all options and other rights
to purchase iXL Common Stock (the "96 Options") pursuant to
iXL's 1996 Stock Option Plan, as amended (the "96 Plan"),
whether or not then vested or exercisable, shall terminate
pursuant to Section 4.2(b) of the 96 Plan and be forfeited. To
the extent applicable, prior to the date on which the
shareholders of iXL approve the iXL Merger, the Board of
Directors of iXL shall determine, pursuant to Section 4.4 of the
96 Plan, that none of the 96 Options shall accelerate as a
result of the iXL Merger or any of the transactions contemplated
thereby.
(b) Tessera Plan. At the Effective Time, all options and other
rights to purchase iXL Common Stock (the "Tessera Options")
pursuant to iXL's Tessera 1995 Stock Option Plan, as amended
(the "Tessera Plan"), whether or not then vested or exercisable,
shall terminate pursuant to Section 16(a)(ii) of the Tessera
Plan and be forfeited, provided, however, all unvested Tessera
Options shall accelerate and vest prior to the Effective Time.
The Board of Directors of iXL shall provide notice thereof to
the holders of the Tessera Options and shall take all actions
necessary pursuant to Section 16 of the Tessera Plan to cause
the termination of the Tessera Options as contemplated in this
Section 2.10(b).
7
(c) 1998 Plan. At the Effective Time, all options and other rights
to purchase iXL Common Stock (the "98 Options") pursuant to
iXL's 1998 Non-Employee Stock Option Plan (the "98 Plan"),
whether or not then vested or exercisable, shall terminate
pursuant to Section 4.2(b) of the 98 Plan and be forfeited. The
Board of Directors of iXL shall not accelerate or cause to
become exercisable any of the 96 Options pursuant to Section 4.4
thereof as a result of the iXL Merger or the transactions
contemplated thereby.
(d) 1999 Plans. At the Effective Time, Holdco shall cause all of its
options and other rights to purchase iXL Common Stock (the "99
Options," and together with the 96 Options, the Tessera Options,
and the 98 Options, the "iXL Stock Options") pursuant to each of
iXL's 1999 Employee Stock Option Plan, as amended and 1999B
Employee Stock Option Plan, each as amended (collectively, the
"99 Plans," and together with the 96 Plan, the Tessera Plan, and
the 98 Plan, the "iXL Stock Plans"), whether or not then vested
or exercisable, and to the extent (and only to the extent) they
do not terminate by their terms at the Effective Time, to be
exchanged for an option to purchase shares of Holdco Common
Stock (the "Holdco Stock Options") on the same terms and
conditions as were applicable under the 99 Option, (i) in an
amount equal to the product obtained by multiplying the number
of shares of iXL Common Stock issuable upon exercise of the
respective 99 Options by the iXL Exchange Ratio, rounded, if
necessary, down to the nearest whole share, and (ii) at a price
per share (rounded up to the nearest 1/100th of a percent) equal
to the per share exercise price under the respective 99 Options
divided by the iXL Exchange Ratio; provided, however, that in
the case of any 99 Option intended to be an incentive stock
option under Section 422 of the Code, the foregoing shall be
adjusted if and to the extent necessary to preserve the status
of such options as incentive stock options.
(e) Stock Purchase Plan. Promptly following the date hereof, the
Board of Directors shall take such actions as necessary to
terminate iXL's 2000 Employee Stock Purchase Plan (the "iXL
Purchase Plan"), pursuant to Section 8.2 thereof; provided,
however, such termination shall be conditioned upon the
consummation of the iXL Merger and shall be made effective as of
the Effective Time. iXL shall provide to each Participant (of
the iXL Purchase Plan) notice of such termination and the
balance then credited to each Participant's Contribution Account
(as defined in the iXL Purchase Plan) shall be distributed as
soon as practicable following the Effective Time, without
interest.
2.11. iXL Warrants. Prior to the Effective Time, Holdco shall take all
action necessary to assume as of the Effective Time all warrants to purchase
shares of iXL
8
Common Stock outstanding immediately prior to the Effective Time, in accordance
with the terms thereof, and shall take all requisite actions consistent
therewith, including the reservation and issuance of shares of Holdco Common
Stock sufficient to cover the exercise, in full, of such warrants.
2.12. Certain Adjustments. If, between the date of this Agreement and the
Effective Time (and as permitted by Sections 5.1 and 5.2), the outstanding
shares of iXL Common Stock or the outstanding shares of Scient Common Stock
shall have been increased, decreased, changed into or exchanged for a different
number of shares or different class or series, in any such case, by reason of
any reclassification, recapitalization, stock split, split-up, subdivision,
combination or exchange of shares, or a stock dividend or dividend payable in
any other securities shall be declared with a record date from and after the
date of this Agreement and prior to the Effective Time, or if any similar event
shall have occurred, the applicable Merger Consideration shall be appropriately
and proportionately adjusted to provide to the holders of Scient Common Stock,
as applicable, and iXL Common Stock the same economic effect as contemplated by
this Agreement prior to such event.
ARTICLE 3. EXCHANGE OF CERTIFICATES
3.1. Exchange Fund. Prior to the Effective Time, iXL and Scient shall
cause Holdco to appoint a mutually acceptable commercial bank or trust company
with assets in excess of $500,000,000 to act as exchange agent hereunder for
the purpose of exchanging Certificates for the applicable Merger Consideration
(the "Exchange Agent"). At or prior to the Effective Time, Holdco shall deposit
with the Exchange Agent, in trust for the benefit of holders of shares of
Scient Common Stock and iXL Common Stock, Certificates representing the shares
of the Holdco Common Stock issuable in the Mergers pursuant to Sections 2.7 and
2.9. Holdco agrees to make available to the Exchange Agent from time to time as
needed, cash sufficient to pay cash in lieu of fractional shares pursuant to
Section 3.5. Any cash and certificates representing Holdco Common Stock
deposited with the Exchange Agent shall hereinafter be referred to as the
"Exchange Fund."
3.2. Exchange Procedures. Promptly after the Effective Time, Holdco shall
cause the Exchange Agent to mail to each holder of a Certificate (i) a letter
of transmittal that shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent, and which letter shall be in customary form
and have such other provisions as iXL or Scient may reasonably specify (such
letter to be reasonably acceptable to Scient and iXL prior to the Effective
Time), and (ii) instructions for effecting the surrender of such Certificates
in exchange for the applicable Merger Consideration, together with any cash in
lieu of fractional shares. Upon surrender of a Certificate to the Exchange
Agent together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) such shares of Holdco
Common Stock (which, at Holdco's option, shall be in uncertificated book-entry
form unless a physical certificate is requested or is otherwise
9
required by applicable law) representing, in the aggregate, the whole number of
shares that such holder has the right to receive pursuant to Section 2.7 or 2.9
(after taking into account all shares of Scient Common Stock and iXL Common
Stock then held by such holder), and (B) a check in the amount equal to the
cash that such holder has the right to receive in lieu of any fractional shares
of Holdco Common Stock pursuant to Section 3.5. No interest will be paid or
will accrue on any cash payable pursuant to Section 3.5. If any portion of the
Merger Consideration is to be paid to a Person other than the Person in whose
name the Certificate is registered, it shall be a condition to such payment
that the Certificate so surrendered shall be properly endorsed or otherwise be
in proper form for transfer and that the Person requesting such payment shall
pay to the Exchange Agent any transfer or other taxes required as a result of
such payment to a Person other than the registered holder of such Certificate
or establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable.
3.3. Dividends. No dividends, interest or other distributions with respect
to securities of Holdco shall be paid to the holder of any unsurrendered
Certificates until such Certificates are surrendered as provided in this
Article 3. Upon such surrender, there shall be paid, without interest, to the
Person in whose name the securities of Holdco have been registered, all
dividends, interest and other distributions payable in respect of such
securities on a date subsequent to, and in respect of a record date after, the
Effective Time.
3.4. No Further Ownership Rights in Stock. All shares of Holdco Common
Stock issued and cash paid upon conversion of shares of Scient Common Stock or
iXL Common Stock in accordance with the terms of Article 2 and this Article 3
(including cash in lieu of fractional shares paid pursuant to Section 3.5)
shall be deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of Scient Common Stock and iXL Common Stock, as
applicable.
3.5. No Fractional Shares of Holdco Common Stock.
(a) No certificates or scrip or shares of Holdco Common Stock
representing fractional shares of Holdco Common Stock or any
interests therein or rights thereto or book-entry credit of the
same shall be issued upon the surrender for exchange of
Certificates and such fractional share interests will not
entitle the owner thereof to vote or to have any rights of a
stockholder of Holdco or a holder of shares of Holdco Common
Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of Scient Common Stock or iXL Common Stock
exchanged pursuant to the Mergers who otherwise would have been
entitled to receive a fraction of a share of Holdco Common Stock
(determined after taking into account all Certificates delivered
by such holder) shall receive, in lieu thereof, cash (without
any interest thereon) in an amount equal to the product of (x)
such fractional part of a share of Holdco Common Stock, and
10
(y) the closing sale price for a share of Holdco Common Stock as
reported on the Nasdaq Stock Market on the trading day next
following the date on which the Effective Time occurs. As
promptly as practicable after the determination of the amount of
such cash, if any, to be paid to holders of fractional share
interests, the Exchange Agent shall so notify Holdco, and Holdco
shall deposit such amount with the Exchange Agent and shall
cause the Exchange Agent to forward payments to such holders of
fractional share interests subject to and in accordance with the
terms hereof.
3.6. Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of Certificates for six months after the
Effective Time shall, at Holdco's request, be delivered to Holdco or otherwise
on the written instruction of Holdco, and holders of Certificates who have not
theretofore complied with this Article 3 shall after such delivery look only to
Holdco for the Merger Consideration with respect to the shares of Scient Common
Stock or iXL Common Stock, as applicable, formerly represented thereby to which
such holders are entitled pursuant to Sections 2.7, 2.9 and 3.2, and any cash
in lieu of fractional shares of Holdco Common Stock to which such holders are
entitled pursuant to Section 3.5. Any such portion of the Exchange Fund
remaining unclaimed by holders of shares of Scient Common Stock or iXL Common
Stock immediately prior to such time as such amounts would otherwise escheat to
or become property of any Governmental Entity shall, to the extent permitted by
law, become the property of Holdco, free and clear of any claims, liens or
interests of any Person previously entitled thereto.
3.7. No Liability. Notwithstanding any provision of this Agreement to the
contrary, none of Holdco, iXL, India Merger Sub, Scient, Sierra Merger Sub or
the Exchange Agent shall be liable to any Person in respect of any Merger
Consideration or cash in lieu of fractional shares delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
3.8. Investment of the Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund as directed by Holdco on a daily basis;
provided that no such investment or loss thereon shall affect the amounts
payable to holders of Scient Common Stock or iXL Common Stock pursuant to
Article 2 and the provisions of this Article 3. Any interest and other income
resulting from such investments shall promptly be paid to Holdco.
3.9. Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be so lost, stolen or destroyed and, if required by Holdco,
the posting by such Person of a bond or other collateral security in such
reasonable amount as Holdco may direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration with respect to the shares of Scient Common
Stock or iXL Common Stock, as applicable, formerly represented thereby, any
cash in lieu of fractional shares of Holdco Common Stock, and any unpaid
11
dividends and distributions on shares of Holdco Common Stock deliverable in
respect thereof, pursuant to this Agreement.
3.10. Further Assurances. At and after the Effective Time, the officers
and directors of Holdco will be authorized to execute and deliver, in the name
and on behalf of iXL, India Merger Sub, Scient or Sierra Merger Sub, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of iXL, India Merger Sub, Scient or Sierra Merger Sub, any other actions
and things to vest, perfect or confirm of record or otherwise in Holdco and/or
India Merger Sub, as the case may be, any and all right, title and interest in,
to and under any of the rights, properties or assets acquired or to be acquired
by Holdco and/or India Merger Sub, as the case may be, as a result of or in
connection with the Mergers.
3.11. Stock Transfer Books. The stock transfer books of Scient and iXL
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of Scient Common Stock or iXL
Common Stock thereafter on the records of Scient or iXL. On and after the
Effective Time, all Certificates presented to the Exchange Agent or Holdco for
any reason shall be converted into the right to receive the applicable Merger
Consideration with respect to the shares of Scient Common Stock or iXL Common
Stock formerly represented thereby (including any cash in lieu of fractional
shares of Holdco Common Stock to which the holders thereof are entitled
pursuant to Section 3.5).
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of iXL. Except as disclosed in the iXL
Filed SEC Reports or as set forth in the iXL Disclosure Schedule delivered by
iXL to Scient prior to the date hereof (the "iXL Disclosure Schedule"), iXL
represents and warrants to Scient as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of iXL and its Subsidiaries is a corporation or other
organization duly organized, validly existing and in good
standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power and
authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where
the failure to be so organized, existing and in good
standing or to have such power and authority, individually
or in the aggregate, does not have, and would not
reasonably be expected to have, a Material Adverse Effect
on iXL, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties
makes such qualification necessary other than in such
jurisdictions
12
where the failure so to qualify or to be in good standing,
individually or in the aggregate, does not have, and would
not reasonably be expected to have a Material Adverse
Effect on iXL. The copies of the certificate of
incorporation and bylaws of iXL and its Subsidiaries which
were previously furnished or made available to Scient are
true, complete and correct copies of such documents as in
effect on the date of this Agreement.
(ii) Exhibit 21.1 to iXL's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, includes all the
Subsidiaries of iXL which as of the date of this Agreement
are "Significant Subsidiaries" (as defined in Rule 1-02 of
Regulation S-X of the Securities and Exchange Commission
(the "SEC")). All the outstanding shares of capital stock
of, or other equity and ownership interests in, each such
Significant Subsidiary have been validly issued and are
fully paid and nonassessable and, except as set forth in
such Exhibit 21.1, are owned directly or indirectly by iXL,
free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature
whatsoever (collectively "Liens") and free of all
restrictions (including restrictions on the right to vote,
sell or otherwise dispose of such capital stock or other
ownership interests), except for restrictions imposed by
applicable U.S. Federal securities laws.
(b) Capital Structure.
(i) The authorized capital stock of iXL consists of (A)
200,000,000 shares of iXL Common Stock, of which 96,775,370
shares were outstanding on July 17, 2001, and (B) 5,000,000
shares of Preferred Stock, par value $0.01 per share, none
of which are outstanding. All issued and outstanding shares
of the capital stock of iXL have been duly authorized and
are validly issued, fully paid and nonassessable, and free
of preemptive rights. At the date hereof there are no
options, warrants or other rights to acquire any shares of
capital stock from iXL, other than (y) the iXL Stock
Options representing in the aggregate the right to purchase
approximately 19,000,000 shares of iXL Common Stock
pursuant to the iXL Stock Plans and (z) the right to
acquire from iXL 3,595,000 shares of iXL Common Stock
pursuant to those certain Warrants disclosed in Section
4.1(b) of the iXL Disclosure Schedule (collectively, the
"iXL Warrants").
13
(ii) No bonds, debentures, notes or other indebtedness of iXL
having the right to vote on any matters on which holders of
capital stock of iXL may vote ("iXL Voting Debt") are
issued or outstanding.
(iii) Except as otherwise set forth in this Section 4.1(b) or in
Section 4.1(b) of the iXL Disclosure Schedule, there are no
securities, options, warrants, calls, puts, rights,
commitments, agreements, plans, contracts, arrangements or
undertakings of any kind to which iXL or any of its
Subsidiaries is a party or by which any of them is bound
obligating iXL or any of its Subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting
securities of iXL or any of its Subsidiaries or obligating
iXL or any of its Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, put,
right, commitment, agreement, plan, contract, arrangement
or undertaking. Except as disclosed in Section 4.1(b) of
the iXL Disclosure Schedule, there are no outstanding
obligations of iXL or any of its Subsidiaries to purchase,
redeem or otherwise acquire any shares of capital stock of
iXL or any of its Subsidiaries.
(c) Authority; No Conflicts.
(i) iXL has all requisite corporate power and authority to
enter into this Agreement and to consummate the
transactions contemplated hereby, subject in the case of
the consummation of the iXL Merger to the adoption of this
Agreement by the Required iXL Vote. The execution and
delivery of this Agreement and the consummation by iXL of
the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of
iXL and no other corporate proceedings on the part of iXL
are necessary to authorize the execution and delivery by
iXL of this Agreement or to consummate the iXL Merger and
the other transactions contemplated hereby, subject in the
case of the consummation of the iXL Merger to the adoption
of this Agreement by the Required iXL Vote. This Agreement
has been duly executed and delivered by iXL and constitutes
the valid and binding agreement of iXL, enforceable against
iXL in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors generally or by general equity
principles (regardless of whether such
14
enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement by iXL do not,
and the consummation by iXL of the iXL Merger and the other
transactions contemplated hereby will not conflict with or
result in any violation of or constitute a default (with or
without notice or lapse of time, or both) under, or give
rise to a right of or result by its terms in the
termination, amendment, cancellation or acceleration of any
right or obligation or the loss of a benefit under or the
creation of a Lien, charge, "put" or "call" right or other
encumbrance on or the loss of any assets, including
Intellectual Property (any such conflict, violation,
default, right of termination, amendment, cancellation or
acceleration, loss or creation, a "Violation"), pursuant
to: (A) any provision of the certificate of incorporation
or bylaws or similar organizational document of iXL or any
Significant Subsidiary of iXL, or (B) except as set forth
in Section 4.1(c) of the iXL Disclosure Schedule and,
except with respect to employee stock options and other
awards, and (1) as, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse
Effect on iXL, or (2) would not prevent or materially delay
the consummation of the Mergers, subject to obtaining or
making the consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings
referred to in clause (iii) of this Section 4.1(c), any
loan or credit agreement, note, mortgage, bond, indenture,
deed, lease, benefit plan, or any other agreement,
obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to iXL or any Subsidiary of
iXL or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any
supranational, national, state, municipal, local or foreign
government, any instrumentality, subdivision, court,
administrative agency or commission or other authority
thereof, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a
"Governmental Entity") or any other Person is required by
or with respect to iXL or any Subsidiary of iXL in
connection with the execution and delivery of this
Agreement by iXL or the consummation by iXL of the iXL
Merger and the other transactions
15
contemplated hereby, except for those required under or in
relation to (A) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B)
state securities or "blue sky" laws (the "Blue Sky Laws"),
(C) the Securities Act of 1933, as amended (the "Securities
Act"), (D) the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (E) the DGCL with respect to the
filing of the Certificates of Merger, (F) the rules and
regulations of Nasdaq, (G) antitrust or other competition
laws of other jurisdictions, and (H) such other consents,
approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or
obtain, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
iXL. Consents, approvals, orders, authorizations,
registrations, declarations and filings required under or
in relation to any of the foregoing clauses (A) through (G)
are hereinafter referred to as "Necessary Consents".
(d) Minority Interests.
(i) Section 4.1(d) of the iXL Disclosure Schedule lists, as of
the date hereof, (A) the name of each Person (other than
any Person that is a Subsidiary of iXL) in which iXL or any
of its Subsidiaries owns any capital stock or other equity
interests (or any securities convertible into or
exercisable or exchangeable for, or options or other rights
to acquire, any capital stock or other equity interests in,
any such Person) (each such Person being hereinafter
referred to as an "iXL Minority Interest") and (B) the
current percentage ownership interest and, to the knowledge
of iXL, the fully diluted percentage ownership interest, in
each case of iXL or any of its Subsidiaries therein. Except
for the iXL Minority Interests, neither iXL nor any of its
Subsidiaries (1) owns any capital stock or other equity
interest (or any securities convertible into or
exchangeable for, or options or other rights to acquire,
any capital stock or other equity interest) in any Third
Party or (2) is obligated to make any investment in any
Third Party such that such Third Party would become a iXL
Minority Interest.
(ii) Section 4.1(d) of the iXL Disclosure Schedule lists each
agreement or arrangement (x) between iXL or any of its
Subsidiaries, on the one hand, and any iXL Minority
Interest or any Person that owns any capital stock or other
equity interests (or any securities convertible into or
16
exchangeable or exercisable for, or options or other rights
to acquire, any such capital stock or other equity
interests) in any iXL Minority Interest, on the other hand,
and (y) to which iXL or any of its Subsidiaries is a party
which (A) has affected or is reasonably likely to affect
the ability of Holdco to direct and control iXL's or its
Subsidiaries' interest in an iXL Minority Interest after
consummation of the Mergers or (B) evidences (1) any
commitment (whether or not contingent) for future
investment of capital or otherwise to be directly or
indirectly made by iXL or any of its Subsidiaries in any
iXL Minority Interest or any of its Subsidiaries or (2) any
other future liabilities or obligations in respect thereof
of iXL or any of its Subsidiaries.
(e) Reports and Financial Statements.
(i) iXL has filed all required registration statements,
prospectuses, notifications, reports, schedules, forms,
statements and other documents required to be filed by it
with the SEC since January 1, 2000, (collectively,
including all exhibits and schedules thereto, the "iXL SEC
Reports"). Except as set forth in Section 4.1(d) of the
iXL Disclosure Schedule, no Subsidiary of iXL is required
to file any form, report, registration statement,
prospectus or other document with the SEC. As of its filing
date (or, if amended or superseded by a filing prior to the
date hereof, on the date of such filing), each iXL SEC
Report filed pursuant to the Exchange Act did not contain
any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
made therein not misleading. Each iXL SEC Report that is a
registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became
effective, did not contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading. Each of the financial statements
(including the related notes) included in the iXL SEC
Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of
operations and cash flows of iXL and its consolidated
Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity
with United States generally accepted accounting principles
17
("GAAP") consistently applied during the periods and at the
respective dates involved except as otherwise noted
therein, and subject, in the case of the unaudited interim
financial statements, to the absence of notes and normal
year-end adjustments that have not been and are not
reasonably expected to be material in amount. All of such
iXL SEC Reports, at their respective dates (and at the date
of any amendment to the respective iXL SEC Report),
complied as to form in all material respects with the
applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated
thereunder.
(ii) Except as disclosed in the iXL SEC Reports filed and
publicly available prior to the date hereof (the "iXL Filed
SEC Reports"), iXL and its Subsidiaries have not incurred
any liabilities that are of a nature that would be required
to be disclosed on a balance sheet of iXL and its
Subsidiaries or the footnotes thereto prepared in
conformity with GAAP, other than (A) liabilities incurred
in the ordinary course of business, (B) liabilities
incurred in accordance with Section 5.1, (C) liabilities
for Taxes, or (D) liabilities that, individually or in the
aggregate, would not reasonably be expected to have a
Material Adverse Effect on iXL.
(iii) iXL's aggregate cash, cash equivalents, and short term
investments at June 30, 2001, were approximately
$25,578,000.00.
(f) Information Supplied.
(i) None of the information supplied or to be supplied by iXL
for inclusion or incorporation by reference in (A) the Form
S-4 will, at the time the Form S-4 is filed with the SEC,
at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act or at the
Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, not misleading, and (B) the Joint Proxy
Statement/Prospectus will, on the date it is first mailed
to Scient stockholders or iXL stockholders or at the time
of the Scient Stockholders Meeting or the iXL Stockholders
Meeting, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under
which they were made, not misleading. The Form S-4 and the
Joint Proxy Statement/Prospectus will comply when
18
filed as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and
the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
4.1(f), no representation or warranty is made by iXL with
respect to statements made or incorporated by reference in
the Form S-4 or the Joint Proxy Statement/Prospectus based
on information supplied in writing by Scient for inclusion
or incorporation by reference therein.
(g) Board Approval. The Board of Directors of iXL, by resolutions
duly adopted and not subsequently rescinded or modified in any
way (the "iXL Board Approval"), has duly (i) determined that
this Agreement and the iXL Merger are fair to and in the best
interests of iXL and its stockholders and declared the iXL
Merger to be advisable, (ii) approved this Agreement, the Voting
Agreements and the iXL Merger, and (iii) recommended that the
stockholders of iXL adopt this Agreement and directed that such
matter be submitted for consideration by iXL's stockholders at
the iXL Stockholders Meeting.
(h) Anti-Takeover Statutes Not Applicable. iXL has taken (or caused
to have been taken) and has done (or caused to have been done)
all actions and things necessary to make this Agreement and the
Mergers contemplated herein exempt from and not otherwise
subject to any "control share acquisition," "business
combination," "interested stockholder," "fair price,"
"change-in-control," "merger moratorium," "vote sterilization,"
or other state takeover laws of all jurisdictions applicable to
iXL and the iXL Merger (collectively with Section 203 of the
DGCL, "State Takeover Laws").
(i) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of iXL Common Stock to adopt this
Agreement (the "Required iXL Vote") is the only vote of the
holders of any class or series of iXL capital stock necessary to
adopt this Agreement and to consummate the iXL Merger and the
other transactions contemplated hereby.
(j) Litigation; Compliance with Laws.
(i) Except as set forth in Section 4.1(j) of the iXL Disclosure
Schedule, there are no suits, actions, judgments or
proceedings (collectively, "Actions") pending or, to the
knowledge of iXL, threatened, against or affecting iXL or
any Subsidiary of iXL or any property or asset of iXL or
any Subsidiary of iXL which, individually or in the
19
aggregate, would reasonably be expected to have a Material
Adverse Effect on iXL, nor are there any judgments,
decrees, injunctions, rules or orders of any Governmental
Entity or arbitrator outstanding against iXL or any
Subsidiary of iXL which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect on iXL.
(ii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
iXL, iXL and its Subsidiaries have been issued and hold all
permits, licenses, franchises, variances, exemptions,
waivers, orders and approvals of all Governmental Entities
which are necessary for the operation of the businesses as
now being conducted of iXL and its Subsidiaries, taken as a
whole (the "iXL Permits"), and no suspension or
cancellation of any of the iXL Permits is pending or, to
the knowledge of iXL, threatened. iXL and its Subsidiaries
are in compliance with the terms of the iXL Permits, except
where the failure to so comply, individually or in the
aggregate, would not reasonably be expected to have a
Material Adverse Effect on iXL. Neither iXL nor its
Subsidiaries is in violation of, and iXL and its
Subsidiaries have not received any notices of violations
with respect to, any laws, statutes, ordinances, rules or
regulations of any Governmental Entity, except for
violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse
Effect on iXL.
(k) Absence of Certain Changes or Events. Except as disclosed in
Section 4.1(k) of the iXL Disclosure Schedule and for
liabilities expressly permitted to be incurred in accordance
with this Agreement or directly incidental to the transactions
contemplated by the Mergers, since December 31, 2000, iXL and
its Subsidiaries have conducted their business only in the
ordinary course and in a manner consistent with past practice
and, since such date, there has not been:
(i) any change, circumstance, state of facts or event which,
individually or in the aggregate, has had, or reasonably
could be expected to have, a Material Adverse Effect on
iXL;
(ii) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital
stock of iXL, or any repurchase, redemption or other
acquisition by iXL or any of its Subsidiaries of any
20
outstanding shares of capital stock or other securities of,
or other ownership interests in, iXL or any of its
Subsidiaries;
(iii) any amendment of any material term of any outstanding
security of iXL or any of its Subsidiaries;
(iv) any incurrence, assumption or guarantee by iXL or any of
its Subsidiaries of any indebtedness for borrowed money;
(v) any creation or other incurrence by iXL or any of its
Subsidiaries of any Lien on any material asset other than
in the ordinary course of business consistent with past
practices;
(vi) any making of any loan, advance or capital contribution to
or investment in any Person other than loans, advances or
capital contributions to or investments in its wholly-owned
Subsidiaries in the ordinary course of business consistent
with past practices;
(vii) any transaction or commitment made, or any contract or
agreement entered into, by iXL or any of its Subsidiaries
relating to its assets or business (including the
acquisition or disposition of any assets) or any
relinquishment by iXL or any of its Subsidiaries of any
contract or other right, in either case, material to iXL
and its Subsidiaries, taken as a whole, other than
transactions and commitments in the ordinary course of
business consistent with past practices and those expressly
contemplated by this Agreement;
(viii) any change in any method of accounting, method of tax
accounting or accounting principles or practice by iXL or
any of its Subsidiaries, except for any such change
required by reason of a concurrent change in GAAP or
Regulation S-X under the Exchange Act;
(ix) any (A) grant of any severance or termination pay to (or
amendment to any existing arrangement with) any director,
officer or employee of iXL or any of its Subsidiaries, (B)
increase in compensation, bonus or other benefits payable
to any director, officer or employee of iXL or any of its
Subsidiaries, other than in the ordinary course of business
consistent with past practices, (C) increase in benefits
payable under any existing severance or termination pay
policies or employment agreements, (D) entering into any
employment, deferred compensation or other similar
agreement (or any amendment to any such existing
21
agreement) with any director, officer or employee of iXL or
any of its Subsidiaries, or (E) establishment, adoption or
amendment (except as required by applicable law) of any
collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation,
stock option, restricted stock or other benefit plan or
arrangement covering any director, officer or employee of
iXL or any of its Subsidiaries; or
(x) any material Tax election made or changed, any annual tax
accounting period changed, any method of tax accounting
adopted or changed, any material amended Tax Returns or
claims for material Tax refunds filed, any material closing
agreement entered into, any material Tax claim, Audit or
assessment settled, or any right to claim a material Tax
refund, offset or other reduction in Tax liability
surrendered.
(l) Intellectual Property. Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on iXL: (i) iXL and/or each of its Subsidiaries owns, or
is licensed to use (in each case, free and clear of any Liens),
all Intellectual Property used in or necessary for the conduct
of its business as currently conducted; (ii) to the knowledge of
iXL, the use of any Intellectual Property by iXL and/or its
Subsidiaries does not infringe on or otherwise violate the
rights of any Person, (iii) the use of the Intellectual Property
is in accordance with subsisting and enforceable licenses
pursuant to which iXL or any Subsidiary acquired the right to
use any Intellectual Property; and (iv) to the knowledge of iXL,
no Person is challenging, infringing or otherwise violating any
right of iXL or any of its Subsidiaries with respect to any
Intellectual Property owned by and/or licensed to iXL or its
Subsidiaries. At the date of this Agreement, except as would not
reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect on iXL, neither iXL nor any of
its Subsidiaries has knowledge of any pending claim, order or
proceeding with respect to any Intellectual Property used by iXL
and its Subsidiaries and to its knowledge no Intellectual
Property owned and/or licensed by iXL or its Subsidiaries is
being used or enforced in a manner that would reasonably be
expected to result in the abandonment, cancellation or
unenforceability of such Intellectual Property.
None of the Intellectual Property or other know-how relating to
the business of iXL and/or its Subsidiaries, the value of which
to iXL is contingent upon maintenance of the confidentiality
thereof has been disclosed by iXL or any of its Affiliates to
any Person other
22
than those Persons who are bound to hold such information in
confidence pursuant to confidentiality agreements or by
operation of law, except insofar as such disclosures would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on iXL. Neither iXL nor any of its
Subsidiaries are party to any contract that restricts or
otherwise limits the ability of iXL or such Subsidiary to
perform services for any other Person. To the knowledge of iXL,
each employee of iXL and its Subsidiaries is a party to an
agreement substantially similar to the "iXL Employee
Nonsolicitation and Confidentiality Agreement" made available to
Scient prior to the date hereof.
(m) Brokers or Finders. Other than First Union Securities, Inc., and
Credit Suisse First Boston Corporation, iXL's financial
advisors, no agent, broker, investment banker, financial advisor
or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of iXL.
(n) Opinion of iXL Financial Advisor. iXL's Board of Directors has
received the opinion of First Union Securities, Inc. dated the
date of this Agreement, to the effect that, at such date, the
iXL Exchange Ratio is fair, from a financial point of view, to
the holders of iXL Common Stock. A copy of such opinion will be
made available to Scient promptly after the date of this
Agreement, and such opinion has not been modified or withdrawn.
(o) Taxes. Each of iXL and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been
duly obtained) and has paid all Taxes required to have been paid
by it (or has established in accordance with GAAP an adequate
accrual for all material Taxes through the end of the last
period for when iXL and its Subsidiaries ordinarily record items
on their respective books), except where failure to file such
Tax Returns or pay such Taxes would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect on iXL. All such Tax Returns are, or will be at the time
of filing, true and complete in all material respects. No Audit
is pending or threatened with respect to any Tax Returns filed
by, or Taxes due from, iXL or any of its Subsidiaries. There is
no current deficiency or adjustment for any Taxes proposed,
asserted or assessed against the Company or any of its
Subsidiaries. There are no material Liens for Taxes upon the
assets of the Company or any of its Subsidiaries, except for
statutory Liens for current Taxes not yet due and those being
contested in good faith. Neither iXL nor any of its Subsidiaries
owns an interest in real property in any jurisdiction in which a
Tax
23
is imposed, or the value of the interest is reassessed, on the
transfer of an interest in real property and which treats the
transfer of an interest in an entity that owns an interest in
real property as a transfer of the interest in real property.
Neither iXL nor any of its Subsidiaries has taken any action or
knows of any fact that is reasonably likely to prevent the
Mergers from qualifying as reorganizations within the meaning of
Section 368(a) of the Code.
(p) Material Contracts.
(i) Except for the contracts, leases, licenses, commitments,
and other instruments (collectively, the "iXL Contracts")
specifically disclosed in the iXL SEC Reports filed with
the SEC prior to the date of this Agreement, or as
disclosed at Section 4.1(p) on the iXL Disclosure Schedule,
as of the date hereof, neither iXL nor any of its
Subsidiaries is a party to or bound by: (I) any
partnership, joint venture or other similar agreement or
arrangement (other than any such agreement or arrangement
disclosed in Section 4.1(d) of the iXL Disclosure Schedule)
that, if the transactions contemplated thereby were
consummated, would result in iXL or any of its Subsidiaries
being a partner, member or equity owner or participant of
or in any partnership, joint venture, or similar entity or
result in an iXL Minority Interest; (II) any agreement
relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case whether
incurred, assumed, guaranteed or secured by an asset); or
(III) any agreement containing any provision or covenant
limiting in any respect the ability of iXL or any of its
Subsidiaries or any Affiliate of iXL or Holdco, Scient or
any successor of iXL after the Effective Time to compete in
any manner (with respect to the businesses conducted on the
date hereof and intended to be conducted after the
Effective Time by the parties hereto) with any Person in
any geographic area.
(ii) Each iXL Contract specifically disclosed in any iXL SEC
Report or required to be disclosed pursuant to this Section
4.1(p) is valid and in full force and effect, except to the
extent they have previously expired in accordance with
their terms or the failure to so be in full force and
effect, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
iXL. Neither iXL nor any of its Subsidiaries has violated
any provision of, or committed or failed to perform any act
which with or without notice, lapse of time or both would
24
constitute a default under the provisions of, any such
contract, except in each case for those violations and
defaults which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse
Effect on iXL.
(q) Employee Benefits.
(i) Prior to the date hereof, iXL has made available to Scient
each "employee benefit plan", as defined in ERISA, and each
plan or other arrangement (written or oral) (including
employment and severance agreements) providing for
compensation, bonuses, profit-sharing, stock option or
other equity-related rights or other forms of incentive or
deferred compensation, employee loans, vacation benefits,
insurance coverage (including any self-insured
arrangements), health, medical, dental or vision benefits,
disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and
post-employment or retirement benefits (including
compensation, pension, health, medical, or life insurance
benefits), in each case which is maintained, administered,
or contributed to by iXL or any ERISA Affiliate thereof and
covers any employee, director or independent contractor or
former employee, director or independent contractor of iXL
or any ERISA Affiliate thereof or under which iXL or any
ERISA Affiliate thereof has any liability with respect to
current or former employees, directors or independent
contractors of iXL or any ERISA Affiliate thereof. Copies
of such plans or other arrangements (and, if applicable,
related trust agreements) and all amendments thereto and
written interpretations thereof have been made available to
Scient prior to the date hereof together with the most
recent annual report (Form 5500 Annual Report including, if
applicable, Schedule B thereto) prepared in connection with
any such plan or other arrangement. Such plans or other
arrangements are referred to collectively as the "iXL
Benefit Plans"; provided that a plan or other arrangement
with respect to a former employee, director or independent
contractor shall constitute an "iXL Benefit Plan" only to
the extent that iXL or its ERISA Affiliate has any present
or future liability or obligation. An "ERISA Affiliate" of
any person means any other person which, together with such
person, would be treated as a single employer under Section
414 of the Code. At no time has iXL or any person who from
time to time is or was an ERISA Affiliate of iXL ever
maintained an employee
25
benefit plan that is subject to Title IV of ERISA. Section
4.1(q) of the iXL Disclosure Schedule lists each material
iXL Benefit Plan.
(ii) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
iXL, each of the iXL Benefit Plans, and the administration
thereof, is, and has been, in compliance with the
requirements provided by any and all applicable statutes,
orders or governmental rules or regulations currently in
effect, including, but not limited to, ERISA and the Code.
Each iXL Benefit Plan and its related trust which is
intended to qualify under Section 401(a) and Section 501(a)
of the Code is so qualified, and nothing has occurred to
cause the loss of such qualification. iXL has made
available to Scient copies of the most recent Internal
Revenue Service determination letters with respect to each
such iXL Benefit Plan, if any. Each iXL Benefit Plan which
is intended to be exempt under Section 501(c)(9) or
501(c)(17) of the Code satisfies the requirements for such
exemption, so qualifies in form and in operation, and
meets, or has satisfied, the requirements of Section 505(c)
of the Code and the regulations thereunder.
(iii) Except as set forth in Section 4.1(q) of the iXL
Disclosure Schedule, with respect to each iXL Benefit Plan,
there are no funded benefit obligations for which
contributions have not been made or properly accrued and
there are no unfunded benefit obligations which have not
been accounted for by reserves, or otherwise properly
footnoted in accordance with GAAP, on the iXL SEC Reports,
which obligations are reasonably likely, individually or in
the aggregate, to have a Material Adverse Effect on iXL.
(iv) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
iXL, with respect to each iXL Benefit Plan (A) no
prohibited transactions as defined in Section 406 of ERISA
or Section 4975 of the Code have occurred or are expected
to occur as a result of the transactions contemplated by
this Agreement, and (B) no action, suit, grievance,
arbitration or other manner of litigation, or claim with
respect to the assets thereof of any iXL Benefit Plan
(other than routine claims for benefits made in the
ordinary course of plan administration for which plan
administrative review procedures have not been exhausted)
is pending, threatened or imminent against or with respect
to any of
26
the iXL Benefit Plans, iXL, any ERISA Affiliate or any
fiduciary, as such term is defined in Section 3(21) of
ERISA ("Fiduciary"), including but not limited to any --
action, suit, grievance, arbitration or other manner of
litigation, or claim regarding conduct that allegedly
interferes with the attainment of rights under any iXL
Benefit Plans. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material
Adverse Effect on iXL, none of iXL or its directors,
officers, or employees, or any Fiduciary has any liability
for failure to comply with ERISA or the Code for any action
or failure to act in connection with the administration or
investment of such plans.
(v) No iXL Benefit Plan is a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(vi) iXL and its Subsidiaries are in compliance with all
federal, state, local and foreign requirements regarding
employment, except for any failures to comply that are not
reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on iXL. As of the date of
this Agreement, there is no labor dispute, strike or work
stoppage against iXL or any of its Subsidiaries pending or,
to the knowledge of iXL, threatened which may interfere
with the business activities of iXL or any of its
Subsidiaries, except where such dispute, strike or work
stoppage is not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on iXL.
(vii) Except as set forth in Section 4.1(q) of the iXL
Disclosure Schedule, no employee of iXL or any of its
Subsidiaries will become entitled to any change-in-control,
retirement, severance, retention or similar benefit or
enhanced or accelerated benefit or any forgiveness of an
outstanding advance or loan as a result of the transactions
contemplated hereby (either solely as a result thereof or
as a result of such transactions in conjunction with any
other event). Without limiting the generality of the
foregoing, no amount required to be paid or payable to or
with respect to any employee of iXL or any of its
Subsidiaries in connection with the transactions
contemplated hereby (either solely as a result thereof or
as a result of such transactions in conjunction with any
other event) will, to the knowledge of iXL or any of its
Subsidiaries, be an "excess parachute payment" within the
meaning of Section 280G of the Code.
27
(viii) There has been no amendment to, written interpretation or
announcement (whether or not written) by iXL or any of its
ERISA Affiliates relating to, or change in participation or
coverage under, any iXL Benefit Plan which would increase
materially the expense of maintaining such iXL Benefit Plan
above the level of the expense incurred in respect thereof
for the twelve months ended on June 30, 2001.
(r) Insurance. All material fire, property and casualty, general
liability, errors and omissions, business interruption, product
liability, and sprinkler and water damage insurance policies
maintained by iXL or any of its Subsidiaries are with reputable
insurance carriers, provide full and adequate coverage for all
normal risks incident to the businesses of iXL and its
Subsidiaries and their respective properties and assets, and are
in character and amount at least equivalent to that carried by
persons engaged in similar businesses and subject to the same or
similar perils or hazards, except for any such failures to
maintain insurance policies that, individually or in the
aggregate, would not have a Material Adverse Effect on iXL. iXL
and each of its Subsidiaries have made any and all payments
required to maintain such policies in full force and effect.
Except as set forth in Section 4.1(r) of the iXL Disclosure
Schedule, neither iXL nor any of its Subsidiaries has received
notice of default under any such policy, and has not received
written notice, or, to the knowledge of iXL, oral notice of any
pending or threatened termination or cancellation, denial of
coverage or limitation or reduction of coverage or material
premium increase with respect to such policy.
(s) Transactions with Related Persons.
(i) Section 4.1(s) of the iXL Disclosure Schedule sets forth a
list of all agreements in effect with Related Persons and
not required to be disclosed in the iXL SEC Reports
pursuant to Item 404 of Regulation S-K. Except as set forth
in Section 4.1(s) of the iXL Disclosure Schedule or the iXL
SEC Reports, since December 31, 2000, neither iXL nor any
of its Subsidiaries has (I) purchased, leased or otherwise
acquired any material property or assets or obtained any
material services from, (II) sold, leased or otherwise
disposed of any material property or assets or provided any
material services to (except with respect to remuneration
for services rendered in the ordinary course of business as
director, officer or employee of iXL or any of its
Subsidiaries), (III) entered into or modified in any manner
any contract or other agreement with, or (IV)
28
borrowed any money from, or made or forgiven any loan or
other advance (other than expenses or similar advances made
in the ordinary course of business) to, any officer,
director, or Affiliate (collectively, "iXL Related
Persons"). Prior to the date hereof, iXL has made available
to Scient true and complete copies of each contract,
arrangement and understanding between iXL or any of its
Subsidiaries, on the one hand, and any iXL Related Person,
on the other.
(ii) Except as set forth in Section 4.1(s) of the iXL Disclosure
Schedule, (x) the contracts of iXL and its Subsidiaries do
not include any material obligation or commitment between
iXL or any of its Subsidiaries and any iXL Related Person,
(y) the assets of iXL or any of its Subsidiaries do not
include any receivable or other obligation or commitment
from an iXL Related Person to iXL or any of its
Subsidiaries, and (z) the liabilities of iXL and its
Subsidiaries do not include any payable or other obligation
or commitment from iXL or any of its Subsidiaries to any
iXL Related Person.
(iii) Except as set forth in Section 4.1(s) of the iXL
Disclosure Schedule, no iXL Related Person is a party to
any contract with any customer or supplier of iXL or any of
its Subsidiaries that affects in any material manner the
business, financial condition or results of operation of
iXL or any of its Subsidiaries.
(t) Leased Properties iXL does not own a fee interest in any real
property. Section 4.1(t) of the iXL Disclosure Schedule
correctly describes all real property which iXL leases as a
tenant, subleases (whether as sublandlord or subtenant), or
otherwise occupies ("iXL Leased Properties"). iXL has a valid
leasehold interest in all iXL Leased Properties.
4.2. Representations and Warranties of Scient. Except as disclosed in the
Scient Filed SEC Reports or as - set forth in the Scient Disclosure Schedule
delivered by Scient to iXL prior to the execution of this Agreement (the
"Scient Disclosure Schedule"), Scient represents and warrants to iXL as
follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Scient and its Subsidiaries is a corporation or
other organization duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation or organization, has the requisite power and
authority to own, lease and operate its properties and to
carry on its
29
business as now being conducted, except where the failure
to be so organized, existing and in good standing or to
have such power and authority, individually or in the
aggregate, does not have, and would not reasonably be
expected to have, a Material Adverse Effect on Scient, and
is duly qualified and in good standing to do business in
each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions
where the failure so to qualify or to be in good standing,
individually or in the aggregate, does not have, and would
not reasonably be expected to have, a Material Adverse
Effect on Scient. The copies of the certificate of
incorporation and bylaws of Scient and its Subsidiaries
which were previously furnished or made available to iXL
are true, complete and correct copies of such documents as
in effect on the date of this Agreement.
(ii) Exhibit 21.1 to Scient's Annual Report on Form 10-K for the
year ended March 31, 2001, includes all the Subsidiaries of
Scient which as of the date of this Agreement are
Significant Subsidiaries. All the outstanding shares of
capital stock of, or other equity and ownership interests
in, each such Significant Subsidiary have been validly
issued and are fully paid and nonassessable and, except as
set forth in such Exhibit 21.1, are owned directly or
indirectly by Scient, free and clear of all Liens and free
of all restrictions (including restrictions on the right to
vote, sell or otherwise dispose of such capital stock or
other ownership interests), except for restrictions imposed
by applicable U.S. Federal securities laws.
(b) Capital Structure.
(i) The authorized capital stock of Scient consists of (a)
500,000,000 shares of Scient Common Stock, of which
74,345,915 shares are outstanding on July 26, 2001, and (B)
10,000,000 shares of Preferred Stock, par value $0.0001 per
share, of which (1) 100,000 shares have been designated
Series A Junior Participating Preferred Stock, of which no
shares are outstanding. All issued and outstanding shares
of the capital stock of Scient have been duly authorized
and are validly issued, fully paid and nonassessable, and
free of preemptive rights. At the date hereof, there are no
options, warrants or other rights to acquire any shares of
capital stock from Scient other than
30
the Scient Stock Options representing in the aggregate the
right to purchase 9,932,261 shares of Scient Common Stock
pursuant to the Scient Stock Plans on June 30, 2001.
(ii) No bonds, debentures, notes or other indebtedness of Scient
having the right to vote on any matters on which holders of
capital stock of Scient may vote ("Scient Voting Debt") are
issued or outstanding.
(iii) Except as otherwise set forth in this Section 4.2(b) or in
Section 4.2(b) of the Scient Disclosure Schedule, there are
no securities, options, warrants, calls, puts, rights,
commitments, agreements, plans, contracts, arrangements or
undertakings of any kind to which Scient or any of its
Subsidiaries is a party or by which any of them is bound
obligating Scient or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting
securities of Scient or any of its Subsidiaries or
obligating Scient or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option,
warrant, call, put, right, commitment, agreement, plan,
contract, arrangement or undertaking. Except as disclosed
in Section 4.2(b) of the Scient Disclosure Schedule, there
are no outstanding obligations of Scient or any of its
Subsidiaries to purchase, redeem or otherwise acquire any
shares of capital stock of Scient or any of its
Subsidiaries.
(c) Authority; No Conflicts.
(i) Scient has all requisite corporate power and authority to
enter into this Agreement and to consummate the
transactions contemplated hereby, subject in the case of
the consummation of the Scient Merger to the adoption of
this Agreement by the Required Scient Vote. The execution
and delivery of this Agreement and the consummation by
Scient of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the
part of Scient and no other corporate proceedings on the
part of Scient are necessary to authorize the execution and
delivery by Scient of this Agreement or to consummate the
Scient Merger and the other transactions contemplated
hereby, subject in the case of the consummation of the
Scient Merger to the adoption of this Agreement by the
Required Scient Vote. This Agreement has been duly executed
and delivered by Scient and constitutes the valid and
binding agreement of Scient, enforceable against
31
Scient in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors generally or by general equity
principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) The execution and delivery of this Agreement by Scient do
not, and the consummation by Scient of the Scient Merger
and the other transactions contemplated hereby will not,
conflict with or result in a Violation pursuant to: (A) any
provision of the certificate of incorporation or bylaws or
similar organizational document of Scient or any
Significant Subsidiary of Scient, or (B) except as set
forth in Section 4.2(c) of the Scient Disclosure Schedule
and, except with respect to employee stock options and
other awards, or (1) as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect on Scient, or (2) would not prevent or materially
delay the consummation of the Mergers, subject to obtaining
or making the consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings
referred to in clause
(iii) of this Section 4.2(c), any loan or credit agreement,
note, mortgage, bond, indenture, deed, lease, benefit plan,
or any other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to
Scient or any Subsidiary of Scient or their respective
properties or assets. (iii) No consent, approval, order or
authorization of, or registration, declaration or filing
with, any Governmental Entity or any other Person is
required by or with respect to Scient or any Subsidiary of
Scient in connection with the execution and delivery of
this Agreement by Scient or the consummation by Scient of
the Scient Merger and the other transactions contemplated
hereby, except the Necessary Consents and such other
consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or
obtain, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
Scient.
(d) Minority Interests.
(i) Section 4.2(d) of the Scient Disclosure Schedule lists, as
of the date hereof, (A) the name of each Person (other than
32
any Person that is a Subsidiary of Scient) in which Scient
or any of its Subsidiaries owns any capital stock or other
equity interests (or any securities convertible into or
exercisable or exchangeable for, or options or other rights
to acquire, any capital stock or other equity interests in,
any such Person) (each such Person being hereinafter
referred to as a "Scient Minority Interest") and (B) the
current percentage ownership interest and, to the knowledge
of Scient, the fully diluted percentage ownership interest,
in each case of Scient or any of its Subsidiaries therein.
Except for the Scient Minority Interests, neither Scient
nor any of its Subsidiaries (1) owns any capital stock or
other equity interest (or any securities convertible into
or exchangeable for, or options or other rights to acquire,
any capital stock or other equity interest) in any Third
Party or (2) is obligated to make any investment in any
Third Party such that such Third Party would become a
Scient Minority Interest.
(ii) Section 4.2(d) of the Scient Disclosure Schedule lists each
agreement or arrangement (x) between Scient or any of its
Subsidiaries, on the one hand, and any Scient Minority
Interest or any Person that owns any capital stock or other
equity interests (or any securities convertible into or
exchangeable for, or options or other rights to acquire,
any such capital stock or other equity interests) in any
Scient Minority Interest, on the other hand, and (y) to
which Scient or any of its Subsidiaries is a party which
(A) has affected or is reasonably likely to affect the
ability of Holdco to direct and control Scient's or its
Subsidiaries' interest in a Scient Minority Interest after
consummation of the Mergers or (B) evidences (1) any
commitment (whether or not contingent) for future
investment of capital or otherwise to be directly or
indirectly made by Scient or any of its Subsidiaries in any
Scient Minority Interest or any of its Subsidiaries or (2)
any other future liabilities or obligations in respect
thereof of Scient or any of its Subsidiaries.
(e) Reports and Financial Statements.
(i) Scient has filed all required registration statements,
prospectuses, notifications, reports, schedules, forms,
statements and other documents required to be filed by it
with the SEC since January 1, 2000 (collectively, including
all exhibits and schedules thereto, the "Scient SEC
Reports"). Except as set forth in Section 4.2(e)(i) of
33
the Scient Disclosure Schedule, no Subsidiary of Scient is
required to file any form, report, registration statement,
prospectus or other document with the SEC. As of its filing
date (or, if amended or superseded by a filing prior to the
date hereof, on the date of such filing), each Scient SEC
Report filed pursuant to the Exchange Act did not contain
any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
made therein, not misleading. Each Scient SEC Report that
is a registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became
effective, did not contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading. Each of the financial statements
(including the related notes) included in the Scient SEC
Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of
operations and cash flows of Scient and its consolidated
Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity
with GAAP consistently applied during the periods and at
the respective dates involved except as otherwise noted
therein, and subject, in the case of the unaudited interim
financial statements, to the absence of notes and normal
year-end adjustments that have not been and are not
reasonably expected to be material in amount. All of such
Scient SEC Reports, at their respective dates (and at the
date of any amendment to the respective Scient SEC Report),
complied as to form in all material respects with the
applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated
thereunder.
(ii) Except as disclosed in the Scient SEC Reports filed and
publicly available prior to the date hereof (the "Scient
Filed SEC Reports"), Scient and its Subsidiaries have not
incurred any liabilities that are of a nature that would be
required to be disclosed on a balance sheet of Scient and
its Subsidiaries or the footnotes thereto prepared in
conformity with GAAP, other than (A) liabilities incurred
in the ordinary course of business, (B) liabilities
incurred in accordance with Section 5.2, (C) liabilities
for Taxes, or (D) liabilities that, individually or in the
aggregate, would not reasonably be expected to have a
Material Adverse Effect on Scient.
34
(iii) Scient's cash, cash equivalents, and short term
investments at June 30, 2001 were approximately
$115,124,000.
(f) Information Supplied.
(i) None of the information supplied or to be supplied by
Scient for inclusion or incorporation by reference in (A)
the Form S-4 will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at
the time it becomes effective under the Securities Act or
at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading, and (B) the Joint Proxy
Statement/Prospectus will, on the date it is first mailed
to Scient stockholders or iXL stockholders or at the time
of the Scient Stockholders Meeting or the iXL Stockholders
Meeting, contain any untrue statement of a material fact or
omit to state any material fact or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading. The Form S-4
and the Joint Proxy Statement/Prospectus will comply when
filed as to form in all material respects with the
requirements of the Exchange Act and the Securities Act and
the rules and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
4.2(f), no representation or warranty is made by Scient
with respect to statements made or incorporated by
reference in the Form S-4 or the Joint Proxy
Statement/Prospectus based on information supplied in
writing by iXL for inclusion or incorporation by reference
therein.
(g) Board Approval. The Board of Directors of Scient, by resolutions
duly adopted and not subsequently rescinded or modified in any
way (the "Scient Board Approval"), has duly (i) determined that
this Agreement and the Scient Merger are fair to and in the best
interests of Scient and its stockholders and declared the Scient
Merger to be advisable, (ii) approved this Agreement, the Voting
Agreements, and the Scient Merger, and (iii) recommended that
the stockholders of Scient adopt this Agreement and directed
that such matter be submitted for consideration by Scient's
stockholders at the Scient Stockholders Meeting.
(h) Anti-Takeover Statutes Not Applicable. Scient has taken (or
caused to have been taken) and has done (or caused to have been
35
done) all actions and things necessary to make this Agreement
and the Mergers contemplated herein exempt from and not
otherwise subject to any State Takeover Laws applicable to
Scient and the Scient Merger.
(i) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Scient Common Stock to adopt this
Agreement (the "Required Scient Vote") is the only vote of the
holders of any class or series of Scient capital stock necessary
to adopt this Agreement and to consummate the Scient Merger and
the other transactions contemplated hereby.
(j) Litigation; Compliance with Laws.
(i) There are no Actions pending or, to the knowledge of
Scient, threatened, against or affecting Scient or any
Subsidiary of Scient or any property or asset of Scient or
any Subsidiary of Scient which, individually or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect on Scient, nor are there any judgments,
decrees, injunctions, rules or orders of any Governmental
Entity or arbitrator outstanding against Scient or any
Subsidiary of Scient which, individually or in the
aggregate, would reasonably be expected to have a Material
Adverse Effect on Scient.
(ii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
Scient, Scient and its Subsidiaries have been issued and
hold all permits, licenses, franchises, variances,
exemptions, waivers, orders and approvals of all
Governmental Entities which are necessary for the operation
of the businesses as now being conducted of Scient and its
Subsidiaries, taken as a whole (the "Scient Permits"), and
no suspension or cancellation of any of the Scient Permits
is pending or, to the knowledge of Scient, threatened.
Scient and its Subsidiaries are in compliance with the
terms of the Scient Permits, except where the failure to so
comply, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
Scient. Neither Scient nor its Subsidiaries is in violation
of, and Scient and its Subsidiaries have not received any
notices of violations with respect to, any laws, statutes,
ordinances, rules or regulations of any Governmental
Entity, except for violations which, individually or in the
aggregate, would
36
not reasonably be expected to have a Material Adverse
Effect on Scient.
(k) Absence of Certain Changes or Events. Except as disclosed
in Section 4.2(k) of the Scient Disclosure Schedule and for
liabilities expressly permitted to be incurred in
accordance with this Agreement or directly incidental to
the transactions contemplated by the Mergers, since March
31, 2001, Scient and its Subsidiaries have conducted their
business only in the ordinary course and in a manner
consistent with past practice and, since such date, there
has not been:
(i) any change, circumstance, state of facts or event
which, individually or in the aggregate, has had, or
reasonably could be expected to have, a Material
Adverse Effect on Scient;
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to any
shares of capital stock of Scient, or any repurchase,
redemption or other acquisition by Scient or any of
its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership
interests in, Scient or any of its Subsidiaries;
(iii) any amendment of any material term of any outstanding
security of Scient or any of its Subsidiaries;
(iv) any incurrence, assumption or guarantee by Scient or
any of its Subsidiaries of any indebtedness for
borrowed money;
(v) any creation or other incurrence by Scient or any of
its Subsidiaries of any Lien on any material asset
other than in the ordinary course of business
consistent with past practices;
(vi) any making of any loan, advance or capital
contribution to or investment in any Person other than
loans, advances or capital contributions to or
investments in its wholly-owned Subsidiaries in the
ordinary course of business consistent with past
practices;
(vii) any transaction or commitment made, or any contract
or agreement entered into, by Scient or any of its
Subsidiaries relating to its assets or business
(including the acquisition or disposition of any
assets) or any relinquishment by Scient or any of its
Subsidiaries of any contract or other
37
right, in either case, material to Scient and its
Subsidiaries, taken as a whole, other than
transactions and commitments in the ordinary course of
business consistent with past practices and those
expressly contemplated by this Agreement;
(viii) any change in any method of accounting, method of
tax accounting or accounting principles or practice by
Scient or any of its Subsidiaries, except for any such
change required by reason of a concurrent change in
GAAP or Regulation S-X under the 1934 Act;
(ix) any (A) grant of any severance or termination pay to
(or amendment to any existing arrangement with) any
director, officer or employee of Scient or any of its
Subsidiaries, (B) increase in compensation, bonus or
other benefits payable to any director, officer or
employee of Scient or any of its Subsidiaries, other
than in the ordinary course of business consistent
with past practices, increase in benefits payable
under any existing severance or termination pay
policies or employment agreements, (C) entering into
any employment, deferred compensation or other similar
agreement (or any amendment to any such existing
agreement) with any director, officer or employee of
Scient or any of its Subsidiaries, or (D)
establishment, adoption or amendment (except as
required by applicable law) of any collective
bargaining, bonus, profit-sharing, thrift, pension,
retirement, deferred compensation, compensation, stock
option, restricted stock or other benefit plan or
arrangement covering any director, officer or employee
of Scient or any of its Subsidiaries; or
(x) any material Tax election made or changed, any annual
tax accounting period changed, any method of tax
accounting adopted or changed, any material amended
Tax Returns or claims for material Tax refunds filed,
any material closing agreement entered into, any
material Tax claim, Audit or assessment settled, or
any right to claim a material Tax refund, offset or
other reduction in Tax liability surrendered.
(l) Intellectual Property. Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on Scient: (i) Scient and/or each of its Subsidiaries
owns, or is licensed to use (in each case, free and clear of any
Liens), all Intellectual Property used in or necessary for the
conduct of its business as currently conducted; (ii) to the
knowledge of Scient,
38
the use of any Intellectual Property by Scient and/or its
Subsidiaries does not infringe on or otherwise violate the
rights of any Person, (iii) the use of the Intellectual Property
is in accordance with subsisting and enforceable licenses
pursuant to which Scient or any Subsidiary acquired the right to
use any Intellectual Property; and (iv) to the knowledge of
Scient, no Person is challenging, infringing or otherwise
violating any right of Scient or any of its Subsidiaries with
respect to any Intellectual Property owned by and/or licensed to
Scient or its Subsidiaries. At the date of this Agreement,
except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on Scient,
neither Scient nor any of its Subsidiaries has knowledge of any
pending claim, order or proceeding with respect to any
Intellectual Property used by Scient and its Subsidiaries and to
its knowledge no Intellectual Property owned and/or licensed by
Scient or its Subsidiaries is being used or enforced in a manner
that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
None of the Intellectual Property or other know-how relating to
the business of Scient and/or its Subsidiaries, the value of
which to Scient is contingent upon maintenance of the
confidentiality thereof has been disclosed by Scient or any of
its Affiliates to any Person other than those Persons who are
bound to hold such information in confidence pursuant to
confidentiality agreements or by operation of law, except
insofar as such disclosures would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect on Scient. Neither Scient nor any of its Subsidiaries are
party to any contract that restricts or otherwise limits the
ability of Scient or such Subsidiary to perform services for any
other Person. To the knowledge of Scient, each employee of
Scient and its Subsidiaries is a party to an agreement
substantially similar to the "Scient Employee Nonsolicitation
and Confidentiality Agreement" made available to iXL prior to
the date hereof.
(m) Brokers or Finders. Other than Thomas Weisel Partners LLC and
Morgan Stanley & Co., Incorporation, no agent, broker,
investment banker, financial advisor or other firm or Person is
or will be entitled to any broker's or finder's fee or any other
similar commission or fee in connection with any of the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Scient.
(n) Opinion of Scient Financial Advisor. Scient's Board of Directors
has received the opinion of Thomas Weisel Partners LLC dated the
39
date of this Agreement, to the effect that, at such date, the
Scient Exchange Ratio is fair, from a financial point of view,
to the holders of Scient Common Stock. A copy of such opinion
will be made available to iXL promptly after the date of this
Agreement, and such opinion has not been modified or withdrawn.
(o) Taxes. Each of Scient and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been
duly obtained) and has paid all Taxes required to have been paid
by it (or has established in accordance with GAAP an adequate
accrual for all material Taxes through the end of the last
period for when Scient and its Subsidiaries ordinarily record
items on their respective books), except where failure to file
such Tax Returns or pay such Taxes would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect on Scient. All such Tax Returns are, or will be at the
time of filing, true and complete in all material respects. No
Audit is pending or threatened with respect to any Tax Returns
filed by, or Taxes due from, Scient or any of its Subsidiaries.
There is no current deficiency or adjustment for any Taxes
proposed, asserted, or assessed against the Company or any of
its Subsidiaries. There are no material Liens for Taxes upon the
assets of the Company or any of its Subsidiaries, except for
statutory Liens for current Taxes not yet due and those being
contested in good faith. Neither Scient nor any of its
Subsidiaries owns an interest in real property in any
jurisdiction in which a Tax is imposed, or the value of the
interest is reassessed, on the transfer of an interest in real
property and which treats the transfer of an interest in an
entity that owns an interest in real property as a transfer of
the interest in real property. Neither Scient nor any of its
Subsidiaries has taken any action or knows of any fact that is
reasonably likely to prevent the Mergers from qualifying as
reorganizations within the meaning of Section 368(a) of the
Code.
(p) Material Contracts.
(i) Except for the contracts, leases, licenses, commitments,
and other instruments (collectively, the "Scient
Contracts") specifically disclosed in the Scient SEC
Reports filed with the SEC prior to the date of this
Agreement, or as disclosed at Section 4.2(p) on the Scient
Disclosure Schedule, as of the date hereof, neither Scient
nor any of its Subsidiaries is a party to or bound by: (I)
any partnership, joint venture or other similar agreement
or arrangement (other than any such agreement or
arrangement disclosed in Section 4.2(d) of the Scient
Disclosure Schedule) that, if the transactions contemplated
40
thereby were consummated, would result in iXL or any of its
Subsidiaries being a partner, member or equity owner or
participant of or in any partnership, joint venture, or
similar entity or result in a Scient Minority Interest;
(II) any agreement relating to indebtedness for borrowed
money or the deferred purchase price of property (in either
case whether incurred, assumed, guaranteed or secured by an
asset); or (III) any agreement containing any provision or
covenant limiting in any respect the ability of Scient or
any of its Subsidiaries or any Affiliate of Scient or
Holdco, iXL or any successor of Scient after the Effective
Time to compete in any manner (with respect to the
businesses conducted on the date hereof and intended to be
conducted after the Effective Time by the parties hereto)
with any Person in any geographic area.
(ii) Each Scient Contract specifically disclosed in any Scient
SEC Report or required to be disclosed pursuant to this
Section 4.2(p) is valid and in full force and effect,
except to the extent they have previously expired in
accordance with their terms or the failure to so be in full
force and effect, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse
Effect on Scient. Neither Scient nor any of its
Subsidiaries has violated any provision of, or committed or
failed to perform any act which with or without notice,
lapse of time or both would constitute a default under the
provisions of, any such contract, except in each case for
those violations and defaults which, individually or in the
aggregate, would not reasonably be expected to result in a
Material Adverse Effect on Scient.
(q) Employee Benefits.
(i) Prior to the date hereof, Scient has made available to iXL
each "employee benefit plan", as defined in Section 3(3) of
ERISA, and each plan or other arrangement (written or oral)
(including employment and severance agreements) providing
for compensation, bonuses, profit-sharing, stock option or
other equity-related rights or other forms of incentive or
deferred compensation, employee loans, vacation benefits,
insurance coverage (including any self-insured
arrangements), health, medical, dental or vision benefits,
disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and
post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance
benefits), in each case which is maintained, administered,
41
or contributed to by Scient or any ERISA Affiliate thereof
and covers any employee, director or independent contractor
or former employee, director or independent contractor of
Scient or any ERISA Affiliate thereof or under which Scient
or any ERISA Affiliate thereof has any liability with
respect to current or former employees, directors or
independent contractors of Scient or any ERISA Affiliate
thereof. Copies of such plans or other arrangements (and,
if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof have been made
available to iXL prior to the date hereof together with the
most recent annual report (Form 5500 Annual Report
including, if applicable, Schedule B thereto) prepared in
connection with any such plan or other arrangement. Such
plans or other arrangements are referred to collectively as
the "Scient Benefit Plans"; provided that a plan or other
arrangement with respect to a former employee, director or
independent contractor shall constitute a "Scient Benefit
Plan" only to the extent that Scient or its ERISA Affiliate
has any present or future liability or obligation. At no
time has Scient or any person who from time to time is or
was an ERISA Affiliate of Scient ever maintained an
employee benefit plan that is subject to Title IV of ERISA.
Section 4.2(q) of the Scient Disclosure Schedule lists each
material Scient Benefit Plan.
(ii) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Scient, each of the Scient Benefit Plans, and the
administration thereof, is, and has been, in compliance
with the requirements provided by any and all applicable
statutes, orders or governmental rules or regulations
currently in effect, including, but not limited to, ERISA
and the Code. Each Scient Benefit Plan and its related
trust which is intended to qualify under Section 401(a) and
Section 501(a) of the Code is so qualified, and nothing has
occurred to cause the loss of such qualification. Scient
has made available to iXL copies of the most recent
Internal Revenue Service determination letters with respect
to each such Scient Benefit Plan, if any. Each Scient
Benefit Plan which is intended to be exempt under Section
501(c)(9) or 501(c)(17) of the Code satisfies the
requirements for such exemption, so qualifies in form and
in operation, and meets, or has satisfied, the requirements
of Section 505(c) of the Code and the regulations
thereunder.
42
(iii) Except as set forth in Section 4.2 of the Scient
Disclosure Schedule, with respect to each Scient Benefit
Plan, there are no funded benefit obligations for which
contributions have not been made or properly accrued and
there are no unfunded benefit obligations which have not
been accounted for by reserves, or otherwise properly
footnoted in accordance with GAAP, on the Scient SEC
Reports, which obligations are reasonably likely,
individually or in the aggregate, to have a Material
Adverse Effect on Scient.
(iv) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on
Scient, with respect to each Scient Benefit Plan (A) no
prohibited transactions as defined in Section 406 of ERISA
or Section 4975 of the Code have occurred or are expected
to occur as a result of the transactions contemplated by
this Agreement, and (B) no action, suit, grievance,
arbitration or other manner of litigation, or claim with
respect to the assets thereof of any Scient Benefit Plan
(other than routine claims for benefits made in the
ordinary course of plan administration for which plan
administrative review procedures have not been exhausted)
is pending, threatened or imminent against or with respect
to any of the Scient Benefit Plans, Scient, any ERISA
Affiliate or any Fiduciary, including but not limited to
any action, suit, grievance, arbitration or other manner of
litigation, or claim regarding conduct that allegedly
interferes with the attainment of rights under any Scient
Benefit Plans. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material
Adverse Effect on Scient, none of Scient or its directors,
officers, or employees, or any Fiduciary has any liability
for failure to comply with ERISA or the Code for any action
or failure to act in connection with the administration or
investment of such plans.
(v) No Scient Benefit Plan is a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(vi) Scient and its Subsidiaries are in compliance with all
federal, state, local and foreign requirements regarding
employment, except for any failures to comply that are not
reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Scient. As of the date of
this Agreement, there is no labor dispute, strike or work
stoppage against Scient or any of its Subsidiaries pending
or, to the knowledge of Scient, threatened which may
43
interfere with the business activities of Scient or any of
its Subsidiaries, except where such dispute, strike or work
stoppage is not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on Scient.
(vii) Except as set forth in Section 4.2(q) of the Scient
Disclosure Schedule, no employee of Scient or any of its
Subsidiaries will become entitled to any change-in-control,
retirement, severance, retention or similar benefit or
enhanced or accelerated benefit or any forgiveness of an
outstanding advance or loan as a result of the transactions
contemplated hereby (either solely as a result thereof or
as a result of such transactions in conjunction with any
other event). Without limiting the generality of the
foregoing, no amount required to be paid or payable to or
with respect to any employee of Scient or any of its
Subsidiaries in connection with the transactions
contemplated hereby (either solely as a result thereof or
as a result of such transactions in conjunction with any
other event) will, to the knowledge of Scient or any of its
Subsidiaries, be an "excess parachute payment" within the
meaning of Section 280G of the Code.
(viii) There has been no amendment to, written interpretation or
announcement (whether or not written) by Scient or any of
its ERISA Affiliates relating to, or change in
participation or coverage under, any Scient Benefit Plan
which would increase materially the expense of maintaining
such Scient Benefit Plan above the level of the expense
incurred in respect thereof for the twelve months ended on
June 30, 2001.
(r) Rights Agreement. The Rights Agreement has not been amended or
modified since July 18, 2000, and shall not be amended or
modified except as set forth in Section 6.15 or as may be
mutually agreed to by iXL and Scient to effectuate the
provisions of Section 6.15.
(s) Insurance. All material fire, property and casualty, general
liability, errors and omissions, business interruption, product
liability, and sprinkler and water damage insurance policies
maintained by Scient or any of its Subsidiaries are with
reputable insurance carriers, provide full and adequate coverage
for all normal risks incident to the businesses of Scient and
its Subsidiaries and their respective properties and assets, and
are in character and amount at least equivalent to that carried
by persons engaged in similar businesses and subject to the same
or similar
44
perils or hazards, except for any such failures to maintain
insurance policies that, individually or in the aggregate, would
not have a Material Adverse Effect on Scient. Scient and each of
its Subsidiaries have made any and all payments required to
maintain such policies in full force and effect. Except as set
forth in Section 4.2(s) of the Scient Disclosure Schedule,
neither Scient nor any of its Subsidiaries has received notice
of default under any such policy, and has not received written
notice, or, to the knowledge of iXL, oral notice of any pending
or threatened termination or cancellation, denial of coverage or
limitation or reduction of coverage or material premium increase
with respect to such policy.
(t) Transactions with Related Persons.
(i) Section 4.2(t) of the Scient Disclosure Schedule sets forth
a list of all agreements in effect with Related Persons and
not required to be disclosed in to the Scient SEC Reports
pursuant to Item 404 of Regulation S-K. Except as set forth
in Section 4.2(t) of the Scient Disclosure Schedule or the
Scient SEC Reports, since March 31, 2001, neither Scient
nor any of its Subsidiaries has (I) purchased, leased or
otherwise acquired any material property or assets or
obtained any material services from, (II) sold, leased or
otherwise disposed of any material property or assets or
provided any material services to (except with respect to
remuneration for services rendered in the ordinary course
of business as director, officer or employee of Scient or
any of its Subsidiaries), (III) entered into or modified in
any manner any contract or other agreement with, or (IV)
borrowed any money from, or made or forgiven any loan or
other advance (other than expenses or similar advances made
in the ordinary course of business) to, any officer,
director or Affiliate (collectively, "Scient Related
Persons"). Prior to the date hereof, Scient has made
available to iXL true and complete copies of each contract,
arrangement and understanding between Scient or any of its
Subsidiaries, on the one hand, and any Scient Related
Person, on the other.
(ii) Except as set forth in Section 4.2(t) of the Scient
Disclosure Schedule, (x) the contracts of Scient and its
Subsidiaries do not include any material obligation or
commitment between Scient or any Scient Related Person, (y)
the assets of Scient or any of its Subsidiaries do not
include any receivable or other obligation or commitment
from a Scient Related Person to Scient or any of its
Subsidiaries, and (z) the liabilities of Scient and its
45
Subsidiaries do not include any payable or other obligation
or commitment from iXL or any of its Subsidiaries to any
Scient Related Person.
(iii) Except as set forth in Section 4.2(t) of the Scient
Disclosure Schedule, no Scient Related Person is a party to
any contract with any customer or supplier of Scient or any
of its Subsidiaries that affects in any material manner the
business, financial condition or results of operation of
Scient or any of its Subsidiaries.
(u) Leased Properties. Scient does not own a fee interest in any
real property. Section 4.1(u) of the Scient Disclosure Schedule
correctly describes all real property which Scient leases as a
tenant, subleases (whether as sublandlord or subtenant), or
otherwise occupies ("Scient Leased Properties"). Scient has a
valid leasehold interest in all Scient Leased Properties.
ARTICLE 5. COVENANTS RELATING TO CONDUCT OF BUSINES
5.1. Covenants of iXL. During the period from the date of this Agreement
and continuing until the Effective Time, iXL agrees as to itself and its
Subsidiaries that iXL and its Subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in all material respects,
in substantially the same manner as heretofore conducted (provided that any
significant restructuring shall not be considered ordinary course), and shall
use their reasonable best efforts to preserve intact their present lines of
business, maintain their rights and franchises and preserve their relationships
with customers, suppliers and others having business dealings with them to the
end that their ongoing businesses shall not be impaired in any material respect
at the Effective Time. Without limiting the generality of the foregoing, from
the date hereof until the Closing Date (except as expressly contemplated or
permitted by this Agreement, including Section 6.2(b) hereof with respect to
Sections 5.1(f), 5.1(i) and 5.1(l), Section 5.1 of the iXL Disclosure Schedule,
or as required by a Governmental Entity or to the extent that Scient shall
otherwise consent in writing, which consent shall not unreasonably be withheld
or delayed):
(a) New Business; Capital Expenditures. Other than in connection
with acquisitions expressly permitted by Section 5.1(e) or
investments expressly permitted by Section 5.1(g), iXL shall
not, and shall not permit any of its Subsidiaries to, (A) enter
into any new line of business material (in terms of revenue,
cash flows or assets) to iXL and its Subsidiaries (taken as a
whole), or (B) incur or commit to any capital expenditures or
any obligations or liabilities in connection therewith other
than capital expenditures and obligations or liabilities in
connection therewith as disclosed in Section 5.1(a) of the iXL
Disclosure Schedule or incurred or committed to in the ordinary
course of business consistent with
46
past practice.
(b) Dividends; Changes in Share Capital. iXL shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to
(i) declare or pay any dividends on or make other distributions
in respect of any of its capital stock, except as permitted by
clause (ii) of this Section 5.1(b), (ii) split, combine or
reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock,
except for (x) any such transaction by a wholly owned Subsidiary
of iXL that remains a wholly owned Subsidiary after consummation
of such transaction, or (y) a forward or reverse stock split of
the iXL Common Stock, or (iii) except as set forth in Section
5.1(b) of the iXL Disclosure Schedule, repurchase, redeem or
otherwise acquire any shares of its capital stock or any
securities convertible into or exercisable or exchangeable for
any shares of its capital stock, except for the purchase from
time to time by iXL of iXL Common Stock in connection with the
iXL Benefit Plans in the ordinary course of business consistent
with past practice.
(c) Issuance of Securities. iXL shall not, and shall not permit any
of its Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its
capital stock of any class or series, any iXL Voting Debt, or
any securities convertible into or exercisable or exchangeable
for, or any rights, warrants, calls, puts or options to acquire,
any such shares or iXL Voting Debt, or enter into any contract,
plan, understanding, commitment, arrangement, undertaking or
agreement with respect to any of the foregoing, other than (i)
in accordance with Section 5.1(i), (ii) the issuance of iXL
Common Stock upon the exercise of iXL Stock Options and/or iXL
Warrants outstanding as of the date hereof in accordance with
their present terms or pursuant to iXL Stock Options or iXL
Warrants, (iii) issuances by a wholly owned Subsidiary of iXL of
capital stock to such Subsidiary's parent or another wholly
owned Subsidiary of iXL, or (iv) pursuant to acquisitions and
investments as disclosed in Section 5.1(e) or 5.1(g) of the iXL
Disclosure Schedule or the financings therefor or as disclosed
in Section 5.1(c) of the iXL Disclosure Schedule.
(d) Governing Documents. Except to the extent required to comply
with their respective obligations or as otherwise expressly
contemplated by this Agreement, iXL and India Merger Sub shall
not amend or restate or propose to so amend or restate their
respective certificates of incorporation or bylaws.
(e) No Acquisitions. Other than (i) acquisitions disclosed in
Section 5.1(e) of the iXL Disclosure Schedule, and (ii)
acquisitions in
47
existing or related lines of business of iXL the fair market
value of the total consideration (including the value of any
indebtedness acquired or assumed in connection therewith) for
which does not exceed the amount specified in the aggregate for
such acquisitions in Section 5.1(e)(ii) of the iXL Disclosure
Schedule and none of which acquisitions referred to in this
clause (ii) presents a material risk of making it materially
more difficult to obtain any Required Approval, iXL shall not,
and shall not permit any of its Subsidiaries to, acquire or
agree to acquire by merger, share exchange, business
combination, or consolidation, or by purchasing a material
equity interest in or a material portion of the assets of, or by
any other manner, any business or any corporation, partnership,
limited liability entity, association or other business
organization or division thereof or otherwise acquire or agree
to acquire any assets (excluding the acquisition of assets used
in the operations of the business of iXL and its Subsidiaries in
the ordinary course, which assets do not constitute a business
unit, division or all or substantially all of the assets of the
transferor or which assets would not constitute a Significant
Subsidiary of iXL); provided, however, that the foregoing shall
not prohibit (x) internal reorganizations or consolidations
involving existing wholly owned Subsidiaries of iXL, or (y) the
creation of new Subsidiaries of iXL organized solely to conduct
or continue activities otherwise expressly permitted by this
Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing wholly owned Subsidiaries of
iXL, (ii) dispositions referred to in the iXL SEC Reports filed
prior to the date of this Agreement, (iii) dispositions,
assignments, or subleases of the iXL Leased Properties (or
portions thereof) which, as of the date of such disposition,
assignment, or sublease, are vacant and have monthly rental
obligations greater than the fair market rental rate for similar
properties in the area, or (iv) as may be required by or in
conformance with law or regulation in order to permit or
facilitate the consummation of the transactions contemplated
hereby or (iv) as disclosed in Section 5.1(f) of the iXL
Disclosure Schedule, iXL shall not, and shall not permit any of
its Subsidiaries to, sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets
(including capital stock of Subsidiaries of iXL but excluding
inventory in the ordinary course of business), if the fair
market value of the total consideration (including the value of
the indebtedness acquired or assumed in connection therewith)
therefore exceeds the amount specified in the aggregate for all
such dispositions in Section 5.1(f) of the iXL Disclosure
Schedule.
48
(g) Investments; Indebtedness. iXL shall not, and shall not permit
any of its Subsidiaries to, (i) other than in connection with
acquisitions permitted by Section 5.1(e) or as disclosed in
Section 5.1(g) of the iXL Disclosure Schedule, make any loans,
advances or capital contributions to, or investments in, any
other Person, other than (x) loans or investments by iXL or a
Subsidiary of iXL to or in iXL or any Subsidiary of iXL, (y)
employee loans or advances made in the ordinary course of
business or (z) in the ordinary course of business consistent
with past practice which are not, individually or in the
aggregate, material to iXL and its Subsidiaries taken as a whole
(provided that none of such transactions referred to in this
clause (z) presents a material risk of making it more difficult
to obtain any approval or authorization required in connection
with the Mergers under Regulatory Law, or (ii) except as set
forth in Section 5.1(g) of the iXL Disclosure Schedule or to the
extent expressly permitted by Section 5.1(c) and 5.1(e), incur
any indebtedness for borrowed money or guarantee or assume or
suffer to exist any such indebtedness of another Person, issue
or sell any debt securities or warrants or other rights to
acquire any debt securities of iXL or any of its Subsidiaries,
guarantee any debt securities of another Person, enter into any
"keep well" or other agreement to maintain any financial
statement condition of another Person (other than any wholly
owned Subsidiary of iXL) or enter into any arrangement having
the economic effect of any of the foregoing.
(h) Tax-Free Qualification. iXL shall use its reasonable best
efforts not to, and shall use its reasonable best efforts not to
permit any of its Subsidiaries to, take any action (including
for this purpose any action otherwise permitted by this Section
5.1) that would prevent or impede the Mergers from qualifying as
reorganizations under Section 368 of the Code.
(i) Compensation.
(i) Except (x) as set forth in Section 5.1(i) of the iXL
Disclosure Schedule, (y) as required by law, or (z) in the
ordinary course of business consistent with past practice,
iXL shall not increase the amount of compensation or other
remuneration of any director, executive officer or key
employee of iXL or any Subsidiary or business unit of iXL,
or make any increase in or commitment to increase any
compensation or employee benefits, adopt or amend or make
any commitment to adopt or amend any iXL Benefit Plan or
make any contribution, other than regularly scheduled
contributions, to any iXL Benefit Plan. Any agreement or
commitment (written or oral) made after the
49
date hereof to grant or modify any compensation or benefits
(including, without limitation, any signing bonus or equity
compensation) to any individual who, after giving effect to
such grant or modification, will be entitled to an annual
base salary of $150,000 or more from iXL or any of its
Subsidiaries, shall be subject to the consent of Scient,
such consent not to be unreasonably withheld or delayed.
Any grant of severance in the amount of 12 weeks or more of
base salary to any individual who is employed by iXL or any
of its Subsidiaries shall be subject to the consent of
Scient. Notwithstanding anything to the contrary, on and
after the date hereof, iXL shall not grant any stock-based
compensation to any individual (including, without
limitation, any stock options, restricted stock, stock
appreciation rights or any other stock-related awards)
except for such awards made on an individual basis to
individuals in connection with their initial commencement
of employment or promotion to a new employment level, in
which case such individuals may be granted such awards in
the ordinary course consistent with past practice; provided
that any such awards shall not be subject to accelerated
vesting or exercisability (or other enhancements) as a
result of the transactions contemplated by this Agreement
(alone or in conjunction with any other events) and shall
be subject to Section 2.10. The terms of any such awards
shall be subject to the prior consent of Scient, such
consent not to be unreasonably withheld or delayed.
(ii) Notwithstanding anything in this Agreement to the contrary,
iXL shall be permitted to enter into reasonable severance
arrangements to the executives of iXL or any of its
Subsidiaries that are substantially comparable to severance
arrangements made available to similarly situated
executives of Scient and its Subsidiaries. iXL shall give
reasonably advance notice to Scient prior to such entry.
(j) Accounting Methods; Income Tax Elections. Except as disclosed in
iXL SEC Reports filed prior to the date of this Agreement, or
as required by a Governmental Entity, iXL shall not change its
methods of accounting in effect at December 31, 2000, except as
required by changes in GAAP as concurred with by iXL's
independent public accountants. iXL shall not (i) change its
fiscal year or annual tax accounting period, (ii) make any tax
election or (iii) take or omit to take any other action, if such
action or
50
omission, individually or in the aggregate, would have a
Material Adverse Effect on iXL.
(k) Accruals; Other Tax Matters. iXL and each of its Subsidiaries
will establish or cause to be established in accordance with
GAAP on or before the Effective Time an adequate accrual for all
material Taxes due with respect to any period ending prior to or
as of the Effective Time. All Taxes incurred in connection with
the iXL Merger (including real property transfer tax and any
similar Tax) shall be paid by iXL when due, and iXL will, at its
own expense, file all necessary Tax Returns and other
documentation with respect to all such Taxes and fees, and, if
required by applicable law, iXL will, and will cause its
Subsidiaries to, join in execution of any such Tax Returns and
other documentation.
(l) Certain Agreements and Arrangements. Except as disclosed in
Section 5.1(l) of the iXL Disclosure Schedule, iXL shall not,
and shall not permit any of its Subsidiaries to, enter into any
agreements or arrangements that limit or otherwise restrict iXL
or any of its Subsidiaries or any of their respective affiliates
or any successor thereto or insofar as reasonably can be
foreseen could, after the Effective Time, limit or restrict iXL
or any of its affiliates (including Holdco) or any successor
thereto, from engaging or competing in any line of business or
in any geographic area, except as approved by the transition and
succession team in the manner contemplated by Section 6.2(b).
(m) Satisfaction of Closing Conditions. Except as required by law,
iXL shall not, and shall not permit any of its Subsidiaries to,
take any action that would, or would reasonably be expected to,
result in (i) any of the conditions to the Mergers set forth in
Article 7 not being satisfied, or (ii) a material delay in the
satisfaction of such conditions.
(n) No Related Actions. iXL shall not, and shall not permit any of
its Subsidiaries to directly or indirectly (in any unitary
transaction or a series of related transactions), agree or
commit to do any of the foregoing.
5.2. Covenants of Scient. During the period from the date of this
Agreement and continuing until the Effective Time, Scient agrees as to itself
and its Subsidiaries that Scient and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all material
respects, in substantially the same manner as heretofore conducted (provided
that any significant restructuring shall not be considered ordinary course),
and shall use their reasonable best efforts to preserve intact their present
lines of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having business dealings
with them to the end that
51
their ongoing businesses shall not be impaired in any material respect at the
Effective Time. Without limiting the generality of the foregoing, from the date
hereof until the Closing Date (except as expressly contemplated or permitted by
this Agreement, including Section 6.2(b) hereof with respect to Sections
5.2(f), 5.2(i) and 5.1(m), Section 5.2 of the Scient Disclosure Schedule, or as
required by a Governmental Entity or to the extent that iXL shall otherwise
consent in writing, which consent shall not unreasonably be withheld or
delayed):
(a) New Business; Capital Expenditures. Other than in connection
with acquisitions expressly permitted by Section 5.2(e) or
investments expressly permitted by Section 5.2(g), Scient shall
not, and shall not permit any of its Subsidiaries to (A) enter
into any new line of business material (in terms of revenue,
cash flows or assets) to iXL and its Subsidiaries taken as a
whole, or (B) incur or commit to any capital expenditures or any
obligations or liabilities in connection therewith other than
capital expenditures and obligations or liabilities in
connection therewith as disclosed in Section 5.2(a) of the
Scient Disclosure Schedule or incurred or committed to in the
ordinary course of business consistent with past practice.
(b) Dividends; Changes in Share Capital. Scient shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to,
(i) declare or pay any dividends on or make other distributions
in respect of any of its capital stock, except as permitted by
clause (ii) of this Section 5.1(b), (ii) split, combine or
reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in
lieu of or in substitution for, shares of its capital stock,
except for (x) any such transaction by a wholly owned Subsidiary
of Scient that remains a wholly owned Subsidiary after
consummation of such transaction, or (y) a forward or reverse
stock split of the Scient Common Stock, or (iii) except as set
forth in Section 5.2(b) of the Scient Disclosure Schedule,
repurchase, redeem or otherwise acquire any shares of its
capital stock or any securities convertible into or exercisable
or exchangeable for any shares of its capital stock except for
the purchase from time to time by Scient of Scient Common Stock
in connection with the Scient Benefit Plans in the ordinary
course of business consistent with past practice.
(c) Issuance of Securities. Scient shall not, and shall not permit
any of its Subsidiaries to, issue, deliver or sell, or authorize
or propose the issuance, delivery or sale of, any shares of its
capital stock of any class or series, any Scient Voting Debt or
any securities convertible into or exercisable or exchangeable
for, or any rights, warrants, calls, puts or options to acquire,
any such shares or Scient Voting Debt, or enter into any
contract, plan, understanding,
52
commitment, arrangement, undertaking or agreement with respect
to any of the foregoing, other than (i) in accordance with
Section 5.2(i), (ii) the issuance of Scient Common Stock upon
the exercise of Scient Stock Options outstanding as of the date
hereof in accordance with their present terms or pursuant to
Scient Stock Options, (iii) issuances by a wholly owned
Subsidiary of Scient of capital stock to such Subsidiary's
parent or another wholly owned Subsidiary of Scient, or (iv)
pursuant to acquisitions and investments as disclosed in Section
5.2(e) or 5.2(g) of the Scient Disclosure Schedule or the
financings therefor or as disclosed in Section 5.2(c) of the
Scient Disclosure Schedule.
(d) Governing Documents. Except as set forth in Section 5.2(d) of
the Scient Disclosure Schedule or to the extent required to
comply with their respective obligations or as otherwise
expressly contemplated by this Agreement, Scient and Sierra
Merger Sub shall not amend, restate or propose to so amend or
restate their respective certificates of incorporation or
bylaws.
(e) No Acquisitions. Other than (i) acquisitions disclosed in
Section 5.2(e) of the Scient Disclosure Schedule, and (ii)
acquisitions in existing or related lines of business of Scient
the fair market value of the total consideration (including the
value of any indebtedness acquired or assumed in connection
therewith) for which does not exceed the amount specified in the
aggregate for such acquisitions in Section 5.2(e)(ii) of the
Scient Disclosure Schedule and none of which acquisitions
referred to in this clause (ii) presents a material risk of
making it materially more difficult to obtain any Required
Approval, Scient shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire by merger, share
exchange, business combination or consolidation, or by
purchasing a material equity interest in or a material portion
of the assets of, or by any other manner, any business or any
corporation, partnership, limited liability entity, association
or other business organization or division thereof or otherwise
acquire or agree to acquire any assets (excluding the
acquisition of assets used in the operations of the business of
Scient and its Subsidiaries in the ordinary course, which assets
do not constitute a business unit, division or all or
substantially all of the assets of the transferor or which
assets would not constitute a Significant Subsidiary of Scient);
provided, however, that the foregoing shall not prohibit (x)
internal reorganizations or consolidations involving existing
wholly owned Subsidiaries of Scient, or (y) the creation of new
Subsidiaries of Scient organized solely to conduct or continue
activities otherwise expressly permitted by this Agreement.
53
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing wholly owned Subsidiaries of
Scient, (ii) dispositions referred to in the Scient SEC Reports
filed prior to the date of this Agreement, (iii) dispositions,
assignments, or subleases of the Scient Leased Properties (or
portions thereof) which, as of the date of such disposition,
assignment, or sublease, are vacant and have monthly rental
obligations greater than the fair market rental rate for similar
properties in the area, (iv) as may be required by or in
conformance with law or regulation in order to permit or
facilitate the consummation of the transactions contemplated
hereby or (v) as disclosed in Section 5.2(f) of the Scient
Disclosure Schedule, Scient shall not, and shall not permit any
of its Subsidiaries to, sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets
(including capital stock of Subsidiaries of Scient, but
excluding inventory in the ordinary course of business), if the
fair market value of the total consideration (including the
value of the indebtedness acquired or assumed in connection
therewith) therefore exceeds the amount specified in the
aggregate for all such dispositions in Section 5.2(f) of the
Scient Disclosure Schedule.
(g) Investments; Indebtedness. Scient shall not, and shall not
permit any of its Subsidiaries to, (i) other than in connection
with acquisitions permitted by Section 5.2(e) or as disclosed in
Section 5.2(g) of the Scient Disclosure Schedule, make any
loans, advances or capital contributions to, or investments in,
any other Person, other than (x) loans or investments by Scient
or a Subsidiary of Scient to or in Scient or any Subsidiary of
Scient, (y) employee loans or advances made in the ordinary
course of business, or (z) in the ordinary course of business
consistent with past practice which are not, individually or in
the aggregate, material to Scient and its Subsidiaries taken as
a whole (provided that none of such transactions referred to in
this clause (z) presents a material risk of making it more
difficult to obtain any approval or authorization required in
connection with the Mergers under Regulatory Law), or (ii)
except as set forth in Section 5.2(g) of the Scient Disclosure
Schedule or to the extent expressly permitted by Sections 5.2(c)
and 5.2(e), incur any indebtedness for borrowed money or
guarantee or assume or suffer to exist any such indebtedness of
another Person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of Scient or any of
its Subsidiaries, guarantee any debt securities of another
Person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another Person
(other than any wholly owned Subsidiary of Scient) or enter into
any arrangement having the economic effect of any of the
foregoing.
54
(h) Tax-Free Qualification. Scient shall use its reasonable best
efforts not to, and shall use its reasonable best efforts not to
permit any of its Subsidiaries to, take any action (including
for this purpose any action otherwise permitted by this Section
5.2) that would prevent or impede the Mergers from qualifying as
reorganizations under Section 368 of the Code.
(i) Compensation.
(i) Except (x) as set forth in Section 5.2(i) of the Scient
Disclosure Schedule, (y) as required by law, or (z) in the
ordinary course of business consistent with past practice,
Scient shall not increase the amount of compensation or
other remuneration of any director, executive officer or
key employee of Scient or any Subsidiary or business unit
of Scient, or make any increase in or commitment to
increase any compensation or employee benefits, adopt or
amend or make any commitment to adopt or amend any Scient
Benefit Plan or make any contribution, other than regularly
scheduled contributions, to any Scient Benefit Plan. Any
agreement or commitment (written or oral) made after the
date hereof to grant or modify any compensation or benefits
(including, without limitation, any signing bonus or equity
compensation) to any individual who, after giving effect to
such grant or modification, will be entitled to an annual
base salary of $150,000 or more from Scient or any of its
Subsidiaries, shall be subject to the consent of iXL, such
consent not to be unreasonably withheld or delayed. Any
grant of severance in the amount of 12 weeks or more of
base salary to any individual who is employed by Scient or
any of its Subsidiaries shall be subject to the consent of
iXL. Notwithstanding anything to the contrary, on and after
the date hereof, Scient shall not grant any stock-based
compensation to any individual (including, without
limitation, any stock options, restricted stock, stock
appreciation rights or any other stock-related awards)
except for such awards made on an individual basis to
individuals in connection with their initial commencement
of employment or promotion to a new employment level, in
which case such individuals may be granted such awards in
the ordinary course consistent with past practice; provided
that any such awards shall not be subject to accelerated
vesting or exercisability (or other enhancements) as a
result of the transactions contemplated by this Agreement
(alone or in conjunction with any other events) and shall
be subject to Section 2.8. The terms of
55
any such awards shall be subject to the prior consent of
iXL, such consent not to be unreasonably withheld or
delayed.
(ii) Notwithstanding anything in this Agreement to the contrary,
Scient shall be permitted to enter into reasonable
severance arrangements to the executives of Scient or any
of its Subsidiaries that are substantially comparable to
severance arrangements made available to similarly situated
executives of iXL and its Subsidiaries. Scient shall give
reasonably advance notice to iXL prior to such entry.
(j) Rights Agreement Matters. Except as expressly required by this
Agreement (including in connection with the Rights
Agreement Amendments pursuant to Section 6.15), Scient shall
not, without the prior written consent of iXL, amend or modify
or make any determination under or take any action with respect
to, the Rights Agreement, including, without limitation, any
redemption of the Rights or any action with respect to the
Rights Agreement to facilitate any Acquisition Proposal;
provided, however, that Scient may amend or take appropriate
action under the Rights Agreement to delay the occurrence of a
"Distribution Date" (as defined in the Rights Agreement) in
response to the public announcement of an Acquisition Proposal.
(k) Accounting Methods; Income Tax Elections. Except as disclosed in
Scient SEC Reports filed prior to - the date of this Agreement,
or as required by a Governmental Entity, Scient shall not change
its methods of accounting in effect at March 31, 2001, except as
required by changes in GAAP as concurred with by Scient's
independent public accountants. Scient shall not (i) change its
fiscal year or annual tax accounting period (other than to a
calendar year), (ii) make any tax election or (iii) take or omit
to take any other action, if such action or omission,
individually or in the aggregate, would have a Material Adverse
Effect on Scient.
(l) Accruals; Other Tax Matters. Scient and each of its Subsidiaries
will establish or cause to be established in accordance with
GAAP on or before the Effective Time an adequate accrual for all
material Taxes due with respect to any period ending prior to or
as of the Effective Time. All Taxes incurred in connection with
the Scient Merger (including real property transfer tax and any
similar Tax) shall be paid by Scient when due, and Scient will,
at its own expense, file all necessary Tax Returns and other
documentation with respect to all such Taxes and fees, and, if
required by applicable law, Scient will, and will cause its
Subsidiaries to, join
56
in execution of any such Tax Returns and other documentation.
(m) Certain Agreements and Arrangements. Scient shall not, and shall
not permit any of its Subsidiaries to, enter into any
agreements or arrangements that limit or otherwise restrict
Scient or any of its Subsidiaries or any of their respective
affiliates or any successor thereto, or insofar as reasonably
can be foreseen could, after the Effective Time, limit or
restrict iXL or any of its affiliates (including Holdco) or any
successor thereto, from engaging or competing in any line of
business or in any geographic area, except as approved by the
transition and succession team in the manner contemplated by
Section 6.2(b).
(n) Satisfaction of Closing Conditions. Except as required by law,
Scient shall not, and shall not permit any of its Subsidiaries
to, take any action that would, or would reasonably be expected
to, result in (i) any of the conditions to the Mergers set forth
in Article 7 not being satisfied, or (ii) a material delay in
the satisfaction of such conditions.
(o) No Related Actions. Scient shall not, and shall not permit any
of its Subsidiaries to directly or indirectly (in a
unitary transaction or a series of related transactions), agree
or commit to do any of the foregoing.
5.3. Governmental Filings. Each party shall (a) confer on a regular
intermittent basis with the other, and (b) report to the other (to the extent
permitted by law or regulation or the Confidentiality Agreement) on operational
matters. Scient and iXL shall timely file all reports required to be filed by
each of them with the SEC (and all other Governmental Entities) between the
date of this Agreement and the Effective Time and shall, if requested by the
other party and to the extent permitted by law or regulation or the
Confidentiality Agreement, deliver to the other party true and complete copies
of all such reports, announcements and publications promptly after such
request.
5.4. Control of Other Party's Business. Nothing contained in this
Agreement (but without limitation of any undertakings or restrictive covenants
made by any party to this Agreement as to itself and its Subsidiaries) shall
give Scient, directly or indirectly, the right to control or direct iXL's
business or operations and nothing contained in this Agreement shall give iXL,
directly or indirectly, the right to control or direct Scient's business or
operations prior to the Effective Time. Prior to the Effective Time, each of
Scient and iXL shall exercise, consistent with the terms and conditions of this
Agreement, exclusive control, ownership and supervision over its own business
and operations.
ARTICLE 6. ADDITIONAL AGREEMENTS
6.1. Preparation of Proxy Statement; Stockholders Meetings.
57
(a) Joint Proxy and S-4. As promptly as practicable following the
date hereof, iXL and Scient shall diligently prepare and cause
to be filed with the SEC mutually acceptable proxy materials
that shall constitute the joint proxy statement/prospectus
relating to the matters to be submitted to the iXL stockholders
at the iXL Stockholders Meeting and the matters to be submitted
to the Scient stockholders at the Scient Stockholders Meeting
(such proxy statement/prospectus, and all amendments and
supplements thereto, the "Joint Proxy Statement/Prospectus") and
iXL and Scient shall cause Holdco promptly to prepare and file
with the SEC a registration statement on Form S-4 with respect
to the issuance of Holdco Common Stock in the Mergers (such Form
S-4, and any amendments or supplements thereto, the "Form S-4").
The Joint Proxy Statement/Prospectus will be included in and
constitute an integral part of the Form S-4 as Holdco's
prospectus. Each of iXL and Scient shall use its best efforts to
have the Joint Proxy Statement/Prospectus cleared by the SEC's
staff and the Form S-4 declared effective by the SEC as promptly
as possible and to keep the Form S-4 effective as long as is
necessary to consummate the Mergers and the transactions
contemplated hereby. As promptly as practicable after receipt
thereof, iXL and Scient shall provide the other party copies of
all written comments and advise the other party of any oral
comments with respect to the Joint Proxy Statement/Prospectus or
Form S-4 received from the SEC's staff. The parties shall
cooperate and provide the other with a reasonable opportunity to
review and comment on all proposed amendments and supplements to
the Joint Proxy Statement/Prospectus and the Form S-4 prior to
filing the same with the SEC, and will provide each other with a
true and complete copy of all such filings made with the SEC.
iXL will use its best efforts to cause the Joint Proxy
Statements/Prospectus to be mailed to iXL's stockholders, and
Scient will use its best efforts to cause the Joint Proxy
Statement/Prospectus to be mailed to Scient's stockholders, in
each case as promptly as practicable after the Form S-4 is
declared effective by the SEC under the Securities Act. Holdco
shall also take any action (other than qualifying to do business
in any jurisdiction in which it is not now so qualified or to
file a general consent to service of process) required to be
taken under any applicable state securities and "blue sky" laws
in connection with the Mergers and each of Scient and iXL shall
furnish all information concerning it and the holders of its
capital stock as may reasonably be requested in connection with
any such action. Each party will advise the other party,
promptly after it receives notice thereof, of the time when the
Form S-4 has been declared effective, the issuance of any stop
order, the suspension of the qualification of the Holdco Common
Stock issuable in
58
connection with the Mergers for offering or sale in any
jurisdiction, or any request by the SEC's staff for any
amendment of or supplement to the Joint Proxy
Statement/Prospectus or the Form S-4 or the submission of any
supplemental materials (for review by the SEC's staff) in
connection therewith. If at any time prior to the Effective Time
any information relating to iXL or Scient or any of their
respective affiliates, officers or directors should be
discovered by iXL or Scient which should be set forth in an
amendment or supplement to the Form S-4 or the Joint Proxy
Statement/Prospectus such that any of such documents would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
the party who discovers such information shall promptly notify
the other party and, to the extent required by law, rules or
regulations, an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and
disseminated to the stockholders of iXL and Scient.
(b) Scient Stockholders Meeting. Scient shall duly take all lawful
action to call, give notice of, convene and hold a meeting of
its stockholders on a date determined in accordance with the
mutual agreement of Scient and iXL (the "Scient Stockholders
Meeting") for - the purpose of (i) obtaining the Required Scient
Vote and (ii) duly adopting (including in accordance with Rule
16b-3 under the Exchange Act) an employee stock option plan of
Holdco having the terms and conditions approved by the
compensation committee of Holdco's Board of Directors (upon the
recommendation of the transition and succession team
contemplated by Section 6.2(b)), and shall take all lawful
action to solicit (including any necessary interim postponement
or adjournment to resolicit, if necessary) the adoption of this
Agreement by the Required Scient Vote. The Board of Directors of
Scient shall recommend (and publish in the Joint Proxy
Statement/Prospectus such recommendation) the adoption of this
Agreement by the stockholders of Scient as set forth in Section
4.2(f) (the "Scient Recommendation"), and shall not, withdraw
or, subject to the immediately following sentence, modify or
qualify, in any manner adverse to iXL the Scient Recommendation,
unless the Board of Directors of Scient determines in good faith
after consultation with independent outside counsel that the
failure to take such action would violate its fiduciary duties
under applicable law; provided, however, notwithstanding any
Change in the Scient Recommendation, this Agreement shall be
submitted to the stockholders of Scient at the Scient
Stockholders Meeting for the purpose of adopting this Agreement
and nothing contained in this Agreement shall be deemed to
relieve Scient of such obligation. Without limiting the
59
generality of the foregoing, nothing in this Agreement shall
prevent the Board of Directors of Scient from making any
disclosure to its stockholders if, after consultation with
independent outside counsel, such disclosure is required by
applicable law.
(c) iXL Stockholders Meeting. iXL shall duly take all lawful action
to call, give notice of, convene and hold a meeting of its
stockholders on a date determined in accordance with the mutual
agreement of iXL and Scient (the "iXL Stockholders Meeting") for
the purpose of (i) obtaining the Required iXL Vote and (ii) duly
adopting (including in accordance with Rule 16b-3 under the
Exchange Act) an employee stock option plan of Holdco having the
terms and conditions approved by the compensation committee of
Holdco's Board of Directors (upon the recommendation of the
transition and succession team contemplated by Section 6.2(b)),
and shall take all lawful action to solicit (including any
necessary interim postponement or adjournment to resolicit if
necessary) the adoption of this Agreement by the Required iXL
Vote. The Board of Directors of iXL shall recommend (and publish
in the Joint Proxy Statement/Prospectus such recommendation) the
adoption of this Agreement by the stockholders of iXL as set
forth in Section 4.1(f) (the "iXL Recommendation"), and shall
not, withdraw or, subject to the immediately following sentence,
modify or qualify, in any manner adverse to Scient the iXL
Recommendation, unless the Board of Directors of iXL determines
in good faith after consultation with independent outside
counsel that the failure to take such action would violate its
fiduciary duties under applicable law; provided, however,
notwithstanding any Change in the iXL Recommendation, this
Agreement shall be submitted to the stockholders of iXL at the
iXL Stockholders Meeting for the purpose of adopting this
Agreement and nothing contained in this Agreement herein shall
be deemed to relieve iXL of such obligation. Without limiting
the generality of the foregoing, nothing in this Agreement shall
prevent the Board of Directors of iXL from making any disclosure
to its stockholders if, after consultation with independent
outside counsel, such disclosure is required by applicable law.
6.2. Holdco Board of Directors; Executive Officers.
(a) At or prior to the Effective Time, each party hereto will take
all action necessary (including, without limitation, including
provisions in the Holdco Charter and Holdco Bylaws and the
adoption of appropriate resolutions of, and the entering into of
appropriate agreements among, the Board of Directors of Holdco)
to (i) cause the Board of Directors of Holdco to be a classified
60
board with three classes, (ii) cause the Board of Directors of
Holdco (including the classes thereof) and the executive
committee thereof at the Effective Time to be comprised in
accordance with Schedule 6.2(a) hereto, and (iii) cause the
individuals listed in Schedule 6.2(a) thereto to be appointed as
officers of Holdco as of the Effective Time in accordance with
Schedule 6.2(a) hereto.
(b) Promptly following the date hereof, and to the extent permitted
by applicable law, each party shall reasonably cooperate in the
formation of a transition and succession team (to be comprised
of an equal number of representatives of each of iXL and Scient)
for the purpose of establishing goals and programs, and
implementing same, in furtherance of the long-term strategic
prospects, goals and objectives of the combined Companies. To be
effective, any action undertaken by such transition and
succession team shall require the affirmative approval of at
least one representative of each of iXL and Scient.
6.3. Termination of Registration of Scient Common Stock and iXL Common
Stock. As promptly as practicable after the Effective Time, iXL and Scient
shall file with the SEC Notices of Termination of Registration on Form 15
(pursuant to Rule 12g-4 under the Exchange Act) with respect to the Scient
Common Stock and the iXL Common Stock.
6.4. Access to Information. Upon reasonable notice, each party shall (and
shall cause its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financial advisors and other representatives of the other
party reasonable access during normal business hours, during the period prior
to the Effective Time, to all its properties, books, contracts, commitments,
records, (including audit work papers), officers and employees and, during such
period, such party shall (and shall cause its Subsidiaries to) furnish promptly
to the other party (a) a true and complete copy of each report, schedule,
registration statement and other document filed, published, announced or
received by it during such period pursuant to the requirements of Federal or
state securities laws, the HSR Act or other laws, rules and regulations that
may be applicable (other than documents, or portions thereof, which such party
is not permitted to disclose under applicable law or which such party
reasonably believes to relate to negotiating strategies), and (b) all other
information concerning it and its business, properties and personnel as such
other party may reasonably request; provided, however, that any party may
restrict the foregoing access to the extent that (i) any law, treaty, rule or
regulation of any Governmental Entity applicable to such party or any contract
requires such party or its Subsidiaries to restrict or prohibit access to any
such properties or information, or (ii) the information is subject to
confidentiality obligations to a third party. The parties will hold any such
information obtained pursuant to this Section 6.4 in confidence in accordance
with, and shall otherwise be subject to, the provisions of the confidentiality
letter agreement dated July 13, 2001, between Scient and iXL (the
"Confidentiality Agreement"), which Confidentiality Agreement shall continue in
full force and effect.
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Any investigation by either of iXL or Scient shall not affect the
representations and warranties of the other.
6.5. Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each
party will use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under this Agreement and
applicable laws and regulations to consummate the Mergers and
the other transactions contemplated by this Agreement as soon as
practicable after the date hereof, including (i) preparing and
filing as promptly as practicable all documentation to effect
all necessary applications, notices, petitions, filings, tax
ruling requests and other documents and to obtain as promptly as
practicable all consents, waivers, licenses, orders,
registrations, approvals, permits, rulings, authorizations and
clearances necessary or advisable to be obtained from any third
party and/or any Governmental Entity in order to consummate the
Mergers the other transactions contemplated by this Agreement
(collectively, the "Required Approvals"), and (ii) taking all
reasonable steps as may be necessary to obtain all such
Necessary Consents and the Required Approvals. In furtherance
and not in limitation of the foregoing, each party hereto agrees
to make, as promptly as practicable, to the extent it has not
already done so, (x) an appropriate filing of a Notification and
Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby (which filing shall in any
event be made within 10 Business Days of the date hereof), and
(y) all other necessary filings with other Governmental Entities
relating to the Mergers, and, in each case, to supply as
promptly as practicable any additional information and
documentary material that may be requested pursuant to such laws
or by such authorities and to use reasonable best efforts to
cause the expiration or termination of the applicable waiting
periods under the HSR Act and the receipt of Required Approvals
under such other laws or from such authorities as soon as
practicable.
(b) In furtherance and not in limitation of the covenants of the
parties contained in Sections 6.5(a) and 6.5(b), if any
administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to
be instituted) challenging any transaction contemplated by this
Agreement as violating any Regulatory Law, or if any statute,
rule, regulation, executive order, decree, injunction or
administrative order is enacted, entered, promulgated or
enforced by a Governmental Entity which would make the Mergers
or any of the transactions contemplated thereby illegal or would
otherwise prohibit or
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materially impair or delay the consummation of the Mergers or the
other transactions contemplated hereby, each of Scient and iXL
shall cooperate in good faith in all respects with each other
and use its reasonable best efforts, to contest and resist any
such action or proceeding and to have vacated, lifted, reversed,
rescinded or overturned any decree, judgment, injunction or
other order, whether temporary, preliminary or permanent, that
is in effect and that prohibits, prevents or restricts
consummation of the Mergers or the other transactions
contemplated by this Agreement and to have such statute, rule,
regulation, executive order, decree, injunction or
administrative order repealed, rescinded or made inapplicable so
as to permit consummation of the transactions contemplated by
this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, nothing in this Section 6.5 shall
limit a party's right to terminate this Agreement pursuant to
Article 8 so long as such party at such time of intended
termination complied with its obligations under this Section
6.5. For purposes of this Agreement, "Regulatory Law" means all
Federal, state and foreign statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws
that prohibit, restrict or regulate mergers, acquisitions or
other business combinations.
(c) iXL and its Board of Directors shall, if any State Takeover Law
becomes applicable to this Agreement, the Mergers or any of the
transactions contemplated hereby or thereby, take all action
reasonably necessary to ensure that the Mergers and the other
transactions contemplated by this Agreement may be consummated
as promptly as practicable on the terms contemplated hereby or
thereby and otherwise to minimize the effect of such statute or
regulation on this Agreement, the Mergers and the other
transactions contemplated hereby or thereby.
(d) Scient and its Board of Directors shall, if any state takeover
statute or similar statute becomes applicable to this Agreement,
the Mergers, or any other transactions contemplated hereby or
thereby, take all action reasonably necessary to ensure that the
Mergers and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the
terms contemplated hereby or thereby and otherwise to minimize
the effect of such statute or regulation on this Agreement, the
Mergers and the other transactions contemplated hereby or
thereby.
6.6. Acquisition Proposals.
(a) Without limiting any party's obligations under this Agreement
(including under Article 5 hereof), each of iXL and Scient
agrees
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that neither it nor any of its Subsidiaries nor any of the
officers and directors of it or any of its Subsidiaries shall,
and that it shall use its reasonable best efforts to cause the
employees, agents and representatives (including investment
bankers, attorneys, accountants and other professional advisors)
of it or any of its Subsidiaries not to, directly or indirectly,
(i) initiate, solicit, induce, encourage or facilitate the
making or receipt of any Acquisition Proposal; or (ii) have any
discussion with or provide (by any medium) any material,
non-public information or data to any Person relating to or
which insofar as reasonably could be foreseen could lead to the
making of an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or facilitate any effort or
attempt to make or implement an Acquisition Proposal.
"Acquisition Proposal" means, other than the transactions
contemplated by this Agreement among the parties hereto, any
offer or proposal for, or any indication of interest, letter of
intent, memorandum of understanding, term sheet or inquiry
relating to, (A) a merger, reorganization, share exchange,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it or
any of its Significant Subsidiaries, (B) any transfer, lease,
assignment, exchange, purchase or sale of 15% or more of the
consolidated assets (including, without limitation, capital
stock of its Subsidiaries) of such party and its Subsidiaries,
taken as a whole, or (C) any purchase or sale of, or tender or
exchange offer for, any equity or voting debt securities of such
party, which if consummated, would result in any Person
acquiring "beneficial ownership" (within the meaning of Rule
13d-3 under the Exchange Act) of any securities representing 15%
or more of the outstanding voting power of such party (or of the
surviving, resulting or ultimate parent entity in such
transaction) or any of its Significant Subsidiaries.
(b) Notwithstanding anything in this Agreement to the contrary
(including, without limitation, the provisions of 6.5(a)), each
of iXL and Scient and its Board of Directors (including any duly
constituted committee thereof) shall be permitted to engage in
any discussions or negotiations with, or provide (by any medium)
material, non-public data or information to, any Person in
response to a bona fide, written Acquisition Proposal by any
such Person (not made or received in violation of this Section
6.6), if and only to the extent that, (i) the Required iXL Vote
and the Required Scient Vote shall not have been obtained
(giving effect to obligations of iXL and Scient, respectively,
specified in Section 6.1 hereof), (ii) its Board of Directors
concludes in good faith after consultation with independent
outside counsel and independent
64
financial advisors that such Acquisition Proposal is reasonably
expected to lead to a Superior Proposal, (iii) prior to
providing any information or data to any Person in connection
with an Acquisition Proposal by any such Person, its Board of
Directors receives from such Person an executed confidentiality
agreement having provisions that are customary in such
agreements relative to proposed transactions such as the
Acquisition Proposal, as advised by outside counsel, provided
that if such confidentiality agreement contains provisions that
are less restrictive than the comparable provision, or omits
restrictive provisions, contained in the Confidentiality
Agreement, then upon execution of such confidentiality
agreement, the Confidentiality Agreement will be deemed to be
amended (and, in fact, thereafter promptly shall be amended) to
contain only such less restrictive provisions or to omit such
restrictive provisions (as the case may be), and (iv) prior to
providing any material, non-public data or information or data
to any Person or entering into discussions or negotiations with
any Person, such party notifies the other party promptly (and,
in any case, within 24 hours) of such inquiries, proposals or
offers received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or
continued with, such Person or any of its representatives
indicating, in connection with such notice, the name of such
Person and the material terms and conditions (including for this
purpose the price, structure, intended accounting and tax
treatment, closing conditions, anticipated closing date, and
requisite regulatory approvals, to the extent then known or
specified by such Person) of any inquiries, indications of
interest, proposals, term sheets or offers. Each of iXL and
Scient agrees that it will promptly keep the other party
informed of the status and terms of any such inquiries,
indications of interest, proposals, term sheets or offers and
the status and terms of any such discussions or negotiations and
promptly shall provide each other with true and complete copies
of all documents and instruments related thereto.
If (x) iXL makes a Change in the iXL Recommendation or (y)
Scient makes a Change in the Scient Recommendation, in each case
in connection with an Acquisition Proposal, such party (A) shall
provide immediate written notice to the other party advising
such other party of such occurrence and specifying the identity
of the Person making the Acquisition Proposal as well as the
material terms and conditions (including for this purpose,
price, structure, intended accounting and tax treatment, closing
conditions, anticipated closing date and requisite regulatory
approvals, to the extent then known) of such Acquisition
Proposal and (B) shall postpone or delay the iXL Stockholders
Meeting or the Scient
65
Stockholders Meeting, as the case may be, for not less than five
days after the date such written notice is provided to the other
party.
Each of iXL and Scient agrees that it shall, and shall cause its
officers, directors and representatives to, immediately cease
and cause to be terminated all activities, discussions and
negotiations existing as of the date of this Agreement with any
parties conducted heretofore with respect to any Acquisition
Proposal. Each of iXL and Scient agrees that it will promptly
inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section
6.6 and use its reasonable best efforts to obtain their express
acknowledgment (which need not be in writing) of the terms
hereof.
Nothing in this Section 6.6 shall (i) permit iXL or Scient to
terminate this Agreement (except as specifically provided in
Article 8 hereof) or (ii) affect any other obligation of iXL or
Scient under this Agreement. Notwithstanding any provision of
this Agreement, neither iXL nor Scient shall submit to the vote
of its stockholders at the iXL Stockholders Meeting or the
Scient Stockholders Meeting, as applicable, any Acquisition
Proposal, other than the iXL Merger or Scient Merger,
respectively.
"Superior Proposal" means with respect to iXL or Scient, as the case may
be, a bona fide, written proposal made by a Third Party (1) regarding a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization or similar transaction involving such party as a result of
which the other party thereto or its stockholders would own a majority of the
outstanding combined voting power of the entity surviving or resulting from
such transaction (or the ultimate parent entity thereof), (2) which is on terms
which the Board of Directors of such party in good faith concludes (following
receipt of the advice of an independent financial advisor of national standing
and of independent outside counsel), after taking into account, among other
things, the long-term strategic objectives of such party and all legal,
financial, tax, accounting, regulatory and other aspects of the proposal and
the Person making the proposal (including its likelihood of consummation and
the anticipated timing thereof), (3) which, if consummated, would result in a
transaction that is more favorable to its stockholders (in their capacities as
stockholders), from a financial point of view, than the transactions
contemplated by this Agreement, and (4) which provides that any requisite
external financing (sufficient to pay the cash portion, if any, of the proposed
transaction consideration and expenses related thereto) is either then
committed or otherwise funded and not subject to any material contingency
(other than customary third party lender "market outs").
"Change in the iXL Recommendation" means (x) withdrawing, modifying or
qualifying (or proposing publicly or otherwise to withdraw, modify or qualify)
in any manner adverse to Scient the iXL Recommendation, or (y) taking any
action or making
66
any statement (not described in the foregoing clause (x)) in connection with
the iXL Stockholders Meeting otherwise inconsistent with the iXL
Recommendation.
"Change in the Scient Recommendation" means (x) withdrawing, modifying, or
qualifying (or proposing publicly or otherwise to withdraw, modify or qualify)
in any manner adverse to iXL the Scient Recommendation, or (y) taking any
action or making any statement (not described in the foregoing clause (x)) in
connection with the Scient Stockholders Meeting otherwise inconsistent with the
Scient Recommendation. 6.7. Fees and Expenses. Subject to Section 8.2, whether
or not the Mergers are consummated, all Expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such Expenses, except that if the Mergers are consummated,
Holdco shall pay, or cause to be paid, any and all Expenses incurred by the
parties hereto; provided, however, Expenses incurred in connection with (i) the
preparation, filing, printing and mailing of the Joint Proxy
Statement/Prospectus and Form S-4, and (ii) all fees and costs relating to all
necessary filings (and the prosecution thereof) under the HSR Act, shall be
shared equally by iXL and Scient irrespective of whether the Mergers are
consummated. As used in this Agreement, "Expenses" includes all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its Affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the Voting Agreements and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Joint Proxy Statement/Prospectus and Form S-4 and the solicitation of
stockholder approvals and all other matters related to the transactions
contemplated hereby and thereby. The parties hereto shall cooperate with each
other in preparing, executing and filing all Tax Returns with respect to
property or transfer taxes.
6.8. Directors' and Officers' Indemnification and Insurance.
(a) Holdco shall (i) indemnify and hold harmless and provide
advancement of expenses to all past and present directors,
officers and employees of Scient and its Subsidiaries (in all of
their capacities) (x) to the same extent such persons are
indemnified or have the right to advancement of expenses at the
date of this Agreement by Scient pursuant to Scient's
certificate of incorporation, bylaws and indemnification
agreements, if any, in existence on the date hereof with any
directors, officers and employees of Scient and its
Subsidiaries, and (y) without limitation to clause (x), to the
fullest extent permitted by law, in each case for acts or
omissions occurring at or prior to the Effective Time (including
for directors' acts or omissions occurring in connection with
the approval of this Agreement and the consummation of the
transactions contemplated hereby), (ii) include and cause to be
maintained in effect in Holdco's (or any successor's)
certificate of incorporation and bylaws after the Effective
Time, provisions
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regarding elimination of liability of directors, indemnification
of officers, directors and employees and advancement of expenses
which are, in the aggregate, no less advantageous to the
intended beneficiaries than the corresponding provisions
contained in the current certificate of incorporation and bylaws
of Scient, and (iii) cause to be maintained for a period of six
years after the Effective Time the current policies of
directors' and officers' liability insurance and fiduciary
liability insurance maintained by Scient (provided that Holdco
(or any successor) may substitute therefor one or more policies
of at least the same scope of coverage and amounts containing
terms and conditions which are, in the aggregate, no less
advantageous to the insured) with respect to claims arising from
facts or events that occur at or before the Effective Time;
provided, however, that in no event shall Holdco be required to
expend in any one year an amount in excess of 200% of the annual
premiums currently paid by Scient for such insurance; and,
provided further that if the annual premiums of such insurance
coverage exceed such amount, Holdco shall be obligated to obtain
a policy with the greatest coverage available for a cost not
exceeding such amount. The obligations of Holdco under this
Section 6.8(a) shall not be terminated or modified in such a
manner as to adversely affect any indemnitee to whom this
Section 6.8(a) applies without the consent of such affected
indemnitee (it being expressly agreed that the indemnitees to
whom this Section 6.8(a) applies shall be third party
beneficiaries of this Section 6.8(a)).
(b) Holdco shall (i) indemnify and hold harmless and provide
advancement of expenses to all past and present directors,
officers and employees of iXL and its Subsidiaries (in all of
their capacities) (x) to the same extent such persons are
indemnified or have the right to advancement of expenses at the
date of this Agreement by iXL pursuant to iXL's certificate of
incorporation, bylaws and indemnification agreements, if any, in
existence on the date hereof with any directors, officers and
employees of iXL and its Subsidiaries, and (y) without
limitation to clause (x), to the fullest extent permitted by
law, in each case for acts or omissions occurring at or prior to
the Effective Time (including for directors acts or omissions
occurring in connection with the approval of this Agreement and
the consummation of the transactions contemplated hereby), (ii)
include and cause to be maintained in effect in Holdco's (or any
successor's) certificate of incorporation and bylaws after the
Effective Time, provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees
and advancement of expenses which are, in the aggregate, no less
advantageous to the intended beneficiaries than the
corresponding provisions contained in the current certificate of
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incorporation and bylaws of iXL, and (iii) cause to be
maintained for a period of six years after the Effective Time
the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by iXL
(provided that Holdco (or any successor) may substitute therefor
one or more policies of at least the same scope of coverage and
amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to
claims arising from facts or events that occur at or before the
Effective Time; provided, however, that in no event shall Holdco
be required to expend in any one year an amount in excess of
200% of the annual premiums currently paid by iXL for such
insurance; and, provided further that if the annual premiums of
such insurance coverage exceed such amount, Holdco shall be
obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount. The obligations
of Holdco under this Section 6.8(b) shall not be terminated or
modified in such a manner as to adversely affect any indemnitee
to whom this Section 6.8(b) applies without the consent of such
affected indemnitee (it being expressly agreed that the
indemnitees to whom this Section 6.8(b) applies shall be third
party beneficiaries of this Section 6.8(b)).
6.9. Public Announcements. iXL and Scient shall work together in good
faith to develop a joint public relations and communications plan with respect
to stockholders, market professionals, the investment community, employees,
customers and suppliers and each party shall use best efforts (i) to ensure
that all press releases and other public statements and announcements
(including, without limitation, pursuant to Rules 165 and 425 under the
Securities Act and 14a-12 under the Exchange Act) with respect to the
transactions contemplated hereby shall be consistent with such joint
communications and public relations plan, and (ii) unless otherwise required by
applicable law or by obligations pursuant to any listing agreement with or
rules of any national securities exchange or U.S. inter-dealer quotation system
of a registered national securities association, to consult with each other and
give effect to the reasonable comments of the other before issuing any press
release or, to the extent practical, otherwise making any public statement or
other announcement with respect to this Agreement or the transactions
contemplated hereby. The first public announcement of the transactions
contemplated by this Agreement made by iXL and Scient, respectively, pursuant
to Rule 165 under the Securities Act shall contain the iXL Recommendation and
the Scient Recommendation. In addition to the foregoing, except to the extent
disclosed in or consistent with the Joint Proxy Statement/Prospectus in
accordance with the provisions of Section 6.1, neither iXL nor Scient shall
issue any press release or otherwise make any public statement, announcement or
disclosure concerning the other party or the other party's business, financial
condition or results of operations without the consent of the other party,
which consent shall not be unreasonably withheld or delayed.
6.10. Listing of Shares of Holdco Common Stock. Holdco shall use its best
efforts to cause the shares of Holdco Common Stock to be issued in the Merger
and the
69
shares of Holdco Common Stock to be reserved for issuance upon exercise of the
Scient Stock Options and iXL Stock Options to be approved for listing on the
Nasdaq Stock Market, subject to official notice of issuance, prior to the
Effective Time.
6.11. Affiliates.
(a) Not less than 45 days prior to the date of the Scient
Stockholders Meeting, Scient shall deliver to iXL a letter
identifying all Persons who, in the reasonable judgment of
Scient, may be deemed at the time this Agreement is submitted
for adoption by the stockholders of Scient, "affiliates" of
Scient for purposes of Rule 145(a) under the Securities Act and
applicable SEC rules and regulations, and such list shall be
updated as necessary to reflect changes from the date thereof.
Scient shall use its reasonable best efforts to cause each
Person identified on such list to deliver to Holdco not less
than 30 days prior to the Effective Time, a written agreement
substantially in the form attached as Exhibit H, hereto (an
"Affiliate Agreement").
(b) Not less than 45 days prior to the date of the iXL Stockholders
Meeting, iXL shall deliver to Scient a letter identifying all
Persons who, in the reasonable judgment of iXL, may be deemed at
the time this Agreement is submitted for adoption by the
stockholders of iXL, "affiliates" of iXL for purposes of Rule
145(a) under the Securities Act and applicable SEC rules and
regulations, and such list shall be updated as necessary to
reflect changes from the date thereof. iXL shall use its
reasonable best efforts to cause each Person identified on such
list to deliver to Holdco not less than 30 days prior to the
Effective Time, an Affiliate Agreement. The parties to the
Affiliate Agreement pursuant to Section 6.11(a) and (b) shall be
referred to herein as the "Rule 145 Affiliates".
(c) In conjunction with the Closing, Holdco shall make available to
each of the Rule 145 Affiliates the right to enter into a
registration rights agreement (the "Affiliate Registration
Rights Agreement"), substantially in the form of Exhibit I.
6.12. Section 16 Matters. Prior to the Effective Time, iXL and Scient
shall take all such steps as may be required to cause any dispositions of
Scient Common Stock or iXL Common Stock (including derivative securities with
respect to Scient Common Stock or iXL Common Stock) or acquisitions of Holdco
Common Stock (including derivative securities with respect to Holdco Common
Stock) resulting from the transactions contemplated by Article 1 or Article 2
of this Agreement by each individual who is subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to iXL and
Scient to be exempt under Rule 16b-3 promulgated under the Exchange Act.
70
6.13. Holdco Stock Option Plan. Holdco shall be authorized to adopt an
employee stock option plan effective as of the Closing Date under which it
shall be permitted to grant stock options to purchase shares of Holdco Common
Stock to employees of Scient and iXL and their respective Subsidiaries, the
material terms of which will be as set forth in Schedule 6.13 hereto. The
continuing employees of each of iXL and Scient will be granted options in
Holdco in a fair and equitable manner pursuant to one or more formulas
reasonably determined by the Holdco compensation committee in its sole
discretion.
6.14. Notices of Certain Events. Each of iXL and Scient shall promptly
notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the
transactions contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to
or involving or otherwise affecting it or any of its
Subsidiaries that, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to
Section 4.1(j) or 4.2(j), as the case may be, or that related to
the consummation of the transactions contemplated by this
Agreement.
6.15. Amendment of Rights Agreement. Prior to the Effective Time, Scient
shall duly amend the Rights Agreement to (a) render the Rights Agreement and
the Rights inapplicable to this Agreement and the Mergers, (b) ensure that (x)
none of the parties to this Agreement shall become or be deemed to be an
"Acquiring Person" (as defined in the Rights Agreement), (y) no "Distribution
Date" or "Stock Acquisition Date" (as such terms are defined in the Rights
Agreement) shall occur, and (z) the Rights shall not separate from the
associated shares of Scient Common Stock or provide the holders thereof the
right to acquire any securities of any Person (or any interest therein or right
thereto), in each case as a result of the execution, delivery or performance of
this Agreement or the public announcement, commencement, expiration, extension,
pendency or consummation of the Mergers, and (c) provide that the Rights
Agreement automatically shall terminate at the Effective Time in accordance
with the terms thereof and the terms and conditions of this Agreement, (the
amendments referred to in clauses (a), (b) and (c) being hereafter collectively
referred to as, the "Rights Agreement Amendments").
ARTICLE 7. CONDITIONS PRECEDENT
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7.1. Conditions to Each Party's Obligation to Effect its Respective
Merger. The respective obligations of Scient and iXL to effect the Scient
Merger and iXL Merger are subject to the satisfaction or waiver on or prior to
the Closing Date of the following conditions:
(a) Stockholder Approval. Scient shall have obtained the Required
Scient Vote and iXL shall have obtained the Required iXL Vote.
(b) No Injunctions or Restraints, Illegality. No provision of any
applicable law or regulation and no judgment, injunction, order
or decree of a court of competent jurisdiction shall prohibit
the consummation of the Mergers.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Mergers under the HSR Act shall have been
terminated or shall have expired.
(d) Listing. The shares of Holdco Common Stock to be issued in the
Mergers and such other shares of Holdco Common Stock to be
reserved for issuance in connection with the Mergers shall have
been approved for listing on the Nasdaq Stock Market, subject to
official notice of issuance.
(e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act and no
stop order suspending the effectiveness of the Form S-4 shall
have been issued by the SEC and no proceedings for that purpose
shall have been initiated or threatened by the SEC.
7.2. Additional Conditions to Obligations of iXL. The obligations of iXL
to effect the iXL Merger are subject to the satisfaction, or waiver by iXL, on
or prior to the Closing Date of the following additional conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Scient set forth in this Agreement, disregarding
all qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, shall be true and
correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date (except to the extent that such representations
and warranties expressly speak as of another date, in which case
such representations and warranties shall be true and correct in
all respects as of such other date), except where the failure of
such representations and warranties to be true and correct would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Scient; and iXL shall have
received a
72
certificate of a senior executive officer of Scient and a senior
financial officer to such effect.
(b) Performance of Obligations of Scient. Scient shall have
performed or complied with all agreements and -- covenants
required to be performed by it under this Agreement at or prior
to the Closing Date that are qualified as to materiality or
Material Adverse Effect and shall have performed or complied in
all material respects with all other material agreements and
covenants required to be performed by it under this Agreement at
or prior to the Closing Date that are not so qualified, and iXL
shall have received a certificate of an senior executive officer
of Scient and a senior financial officer of Scient to such
effect.
(c) Tax Opinion. iXL shall have received from Greenberg Traurig,
LLP, counsel to iXL, on the Closing Date, a written opinion to
the effect that for federal income tax purposes the iXL Merger
will constitute a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, counsel to iXL
shall be entitled to rely upon information, representations and
assumptions provided by Holdco, iXL and Scient substantially in
the form of Exhibit J, (allowing for such amendments to the
representations as counsel to iXL deems reasonably necessary).
7.3. Additional Conditions to Obligations of Scient. The obligations of
Scient to effect the Scient Merger are subject to the satisfaction, or waiver
by Scient, on or prior to the Closing Date of the following additional
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of iXL set forth in this Agreement, disregarding all
qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, shall be true and
correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date (except to the extent that such representations
and warranties expressly speak as of another date, in which case
such representations and warranties shall be true and correct in
all material respects as of such other date), except where the
failure of such representations and warranties to be true and
correct would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on iXL; and Scient
shall have received a certificate of a senior executive officer
and a senior financial officer of iXL to such effect.
(b) Performance of Obligations of iXL. iXL shall have performed or
complied with all agreements and - covenants required to be
performed by it under this Agreement at or prior to the Closing
73
Date that are qualified as to materiality or Material Adverse
Effect and shall have performed or complied in all material
respects with all other material agreements and covenants
required to be performed by it under this Agreement at or prior
to the Closing Date that are not so qualified, and Scient shall
have received a certificate of a senior executive officer and a
senior financial officer of iXL to such effect.
(c) Tax Opinion. Scient shall have received from Davis Polk &
Wardwell, counsel to Scient, on the Closing Date, a written
opinion to the effect that for federal income tax purposes the
Scient Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code. In rendering such
opinion, counsel to Scient shall be entitled to rely upon
information, representations and assumptions provided by Holdco,
iXL and Scient substantially in the form of Exhibit K, (allowing
for such amendments to the representations as counsel to Scient
deems reasonably necessary).
ARTICLE 8. TERMINATION AND AMENDMENT
8.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the Board of Directors of
the terminating party or parties, and except as provided below, whether before
or after approval of the matters presented in connection with the Mergers by
the stockholders of Scient or iXL:
(a) By the mutual written consent of iXL and Scient;
(b) By either Scient or iXL, if the Effective Time shall not have
occurred at or before 5:30 p.m., Eastern time, on December 31,
2001 (the "Termination Date"); provided, however, that the
Termination Date may be extended to a date mutually agreed to by
iXL and Scient (which such extended date shall not be earlier
than March 31, 2002) if, and only if, the condition set forth in
Section 7.1(e) shall not have been satisfied on or prior to the
Termination Date; provided, further, however, that the right to
terminate this Agreement under this Section 8.1(b) shall not be
available to any party whose willful failure to fulfill any
obligation under this Agreement (including, without limitation,
such party's obligations set forth in Section 6.5) has been the
cause of or resulted in the failure of the Effective Time to
occur on or before the Termination Date (or any extended date as
contemplated by the immediately preceding proviso);
(c) By either Scient or iXL, if any Governmental Entity shall have
issued an order, decree or ruling or taken any action
restraining, enjoining or otherwise prohibiting the transactions
contemplated
74
by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable, provided,
however, that the right to terminate this Agreement under this
Section 8.1(c) shall not be available to any party whose willful
failure to comply with Section 6.5 has been the cause of such
action;
(d) By either Scient or iXL, if the Required iXL Vote or the
Required Scient Vote shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting
of stockholders or of any adjournment or postponement thereof at
which the vote was taken;
(e) By iXL, if Scient shall have failed to (i) make the Scient
Recommendation or effected a Change in the Scient Recommendation
(or resolved to take any such action, whether or not permitted
by the express terms of this Agreement), or (ii) duly notice and
convene the Scient Stockholders Meeting in accordance with
Section 6.1(b);
(f) By Scient, if iXL shall have failed to (i) make the iXL
Recommendation or effected a Change in the iXL Recommendation
(or resolved to take any such action, whether or not permitted
by the express terms of this Agreement), or (ii) duly notice and
convene the iXL Stockholders Meeting in accordance with Section
6.1(c);
(g) By Scient, if iXL shall have breached or failed to perform any
of its representations, warranties, covenants or other
agreements contained in this Agreement such that the conditions
set forth in Section 7.3(a) or (b) are not capable of being
satisfied on or before the Termination Date; or
(h) By iXL, if Scient shall have breached or failed to perform any
of its representations, warranties, covenants or other
agreements contained in this Agreement such that the conditions
set forth in Section 7.2(a) or (b) are not capable of being
satisfied on or before the Termination Date.
8.2. Effect of Termination.
(a) If this Agreement is terminated by either Scient or iXL as
provided in Section 8.1, this Agreement forthwith shall become
void and there shall be no liability or obligation on the part
of any of the parties or their respective officers or directors
except with respect to the second sentence of Section 6.4,
Section 6.7, this Section 8.2 and Article 9, which provisions
shall survive such termination, and except that, notwithstanding
anything to the contrary contained in
75
this Agreement, neither iXL nor Scient shall be relieved or
released from any liabilities or damages arising out of its
willful and material breach of this Agreement.
(b) If a Scient Payment Event occurs, Scient shall pay iXL (by wire
transfer of immediately available funds to an account specified
by iXL), if, pursuant to clause (x) of the immediately following
sentence, simultaneously with the occurrence of such Payment
Event or, if pursuant to clause (y) of the immediately following
paragraph, not later than two Business Days next following such
Scient Payment Event, a termination fee of $7,500,000.
"Scient Payment Event" means (x) the termination of this
Agreement by iXL pursuant to Section 8.1(e) or (y) the
occurrence of the following event in connection with the
termination by iXL of this Agreement pursuant to Section 8.1(d):
prior to such termination, an Acquisition Proposal with respect
to Scient shall have been publicly announced or otherwise
communicated publicly to the senior management, Board of
Directors, representatives or stockholders of Scient (a "Scient
Public Proposal").
(c) If an iXL Payment Event occurs, iXL shall pay Scient (by wire
transfer of immediately available funds to an account specified
by Scient), if, pursuant to clause (x) of the immediately
following sentence, simultaneously with the occurrence of such
iXL Payment Event or, if pursuant to clause (y) of the
immediately following paragraph, not later than two Business
Days next following such iXL Payment Event, a termination fee of
$7,500,000.
"iXL Payment Event" means (x) the termination by Scient of this
Agreement pursuant to Section 8.1(f) or (y) the occurrence of
the following event in connection with the termination by Scient
of this Agreement pursuant to Section 8.1(d): prior to such
termination, an Acquisition Proposal with respect to iXL shall
have been publicly announced or otherwise communicated publicly
to the senior management, Board of Directors, representatives or
stockholders of iXL (an "iXL Public Proposal").
(d) The parties acknowledge that the agreements contained in this
Section 8.2 are an integral part of the transactions
contemplated by this Agreement, and that, without these
agreements, none of the parties would enter into this Agreement;
accordingly, if either iXL or Scient fails promptly to pay any
amount due pursuant to this Section 8.2, and, in order to obtain
such payment, the other party commences a suit which results in
a judgment against such party for the fee set forth in this
Section 8.2, such party shall pay to the
76
other party its costs and expenses (including attorneys' fees
and expenses) in connection with such suit, together with
interest on the amount of the fee at the prime rate thereof as
announced by Citibank, N.A. in effect on the date such payment
was required to be made notwithstanding the provisions of
Section 6.7.
The parties hereto agree that any remedy or amount payable pursuant
to this Section 8.2 shall not preclude any other remedy or amount
payable hereunder and shall not be an exclusive remedy for any breach
of any representation, warranty, covenant or agreement contained in
this Agreement.
8.3. Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the
Mergers by the stockholders of Scient and iXL, but, after any such approval, no
amendment shall be made which by law or in accordance with the rules of any
national securities exchange or U.S. inter-dealer quotation system of a
registered national securities association requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE 9. GENERAL PROVISIONS
9.1. Non-Survival of Representations, Warranties and Agreements. None of
the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants, agreements and other provisions, shall survive the Effective Time,
except for those covenants, agreements and other provisions contained herein
(including Section 6.8 and Section 6.2 and Schedule 6.2(a)) that by their terms
apply or are to be performed in whole or in part after the Effective Time and
this Article 9.
9.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt, (b) on
the first Business Day following the date of dispatch if delivered by a
recognized next-day courier service or (c) on the tenth Business Day
77
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(a) if to iXL, India Merger Sub or Holdco, to:
Theodore Browne, Esq.
Vice President and General Counsel
c/o iXL Enterprises, Inc. 1600 Peachtree Street, NW
Atlanta, GA 30309
Phone: (404) 279-1000
Fax: (404) 279-6844
with copies (which shall not constitute notice pursuant to
this Section 9.2) to each of:
James S. Altenbach, Esq.
c/o Greenberg Traurig, LLP
3290 Northside Parkway, N.W.
Suite 400
Atlanta, GA 30327
Phone: (678) 553-2444
Fax: (678) 553-2445
e-mail: altenbachj@gtlaw.com
- and -
Clifford E. Neimeth, Esq.
c/o Greenberg Traurig, LLP
The Met Life Building
200 Park Avenue
New York, New York 10021
Phone: (212) 801-9383
Fax: (212) 801-6400
e-mail: neimethc@gtlaw.com
(b) if to Scient to:
Christina M. Bark, Esq.
Corporate Counsel
Scient Corporation
860 Broadway
New York, NY 10003
Phone: (917) 534-8332
Fax: (917) 534-8845
e-mail: cbark@scient.com
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with a copy (which shall not constitute notice pursuant to
Section 9.2) to:
David L. Caplan, Esq.
c/o Davis Polk & Wardwell
450 Lexington Avenue
New York, New York
Phone: (212) 450-2352
Fax: (212) 450-3800
e-mail: david.caplan@dpw.com
(c) if to Holdco, India Merger Sub or Sierra Merger Sub to each of the
parties entitled to receive notice pursuant to this Section 9.2 for
iXL and Scient.
9.3. Interpretation. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless specifically otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as the feminine
and neutral genders of such term. Any agreement, instrument or statute defined
or referred to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including in the case of agreements or
instruments by waiver or consent, and in the case of statutes, by comparable
successor statutes, and references to all attachments thereto and instruments
incorporated therein. Each of the parties hereto has participated in the
drafting and negotiation of this Agreement such that if any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if it was drafted by all of the parties hereto, collectively, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
When a reference is made in this Agreement to Articles, Sections, Exhibits
or Schedules, such reference shall be to an Article or Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the intended meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation" and, thus, shall indicate illustrative examples of the matters that
follow and are neither intended nor shall they constitute exhaustive or
all-inclusive statements and examples.
In addition, each Section of this Agreement is qualified by the matters
set forth with respect to such Section on the iXL Disclosure Schedule, the
Scient Disclosure Schedule and the Schedules to this Agreement, as applicable,
to the extent specified therein and such other Sections of this Agreement to
the extent (including by way of conspicuous cross-reference) a matter in such
Section is disclosed in such a way as to make its relevance called for by such
other Section readily apparent.
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9.4. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party; it being understood that both parties need not
sign the same counterpart. Signatures transmitted by facsimile or other
comparable means shall be deemed to constitute an original.
9.5. Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement, the Voting Agreements, the Confidentiality
Agreement and all of the exhibits and schedules hereto
(including the iXL Disclosure Schedule and the Scient Disclosure
Schedule) and the other agreements and instruments of the
parties delivered in connection herewith constitute the entire
agreement and understanding and supersede all prior agreements
and understandings, both written and oral, among the parties
hereto with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than
Section 6.8 (which is intended to be for the benefit of the
Persons covered thereby).
9.6. Governing Law. This Agreement shall be governed and construed in
accordance with the internal substantive and procedural laws of the State of
Delaware (without giving effect to any conflicts of law principles thereof).
9.7. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
9.8. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other parties, and any attempt to make any such
assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure
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to the benefit of and be enforceable by the parties and their respective
successors and assigns.
9.9. Submission to Jurisdiction; Waivers. Each of the parties to this
Agreement irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by any other party hereto or its successors or assigns may be
brought and determined in the Chancery Court of the State of Delaware, and each
party hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect to its property, generally and unconditionally, to
the nonexclusive jurisdiction of the aforesaid court. Each party hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named court for any reason other than the failure to lawfully
serve process, (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
court (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or
otherwise), (c) to the fullest extent permitted by applicable law, that (i) the
suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
court and (d) any right to a trial by jury.
9.10. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly hereby agreed that the
parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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9.11. Definitions. As used in this Agreement:
(a) "Adjustment Factor" means (i) 4.0 or (ii) such other number as
shall be determined mutually by the Board of Directors of iXL,
Scient and Holdco, respectively, upon the advice and
recommendation of the respective independent financial advisors
for iXL, Scient and Holdco (taking into account, among other
things, the market capitalization of iXL and Scient), which
determination shall be made not later than the second Business
Day immediately preceding the date on which the Joint Proxy
Statement/Prospectus is first disseminated to holders of iXL
Common Stock and Scient Common Stock or, if applicable, not
later than the second Business Day immediately preceding the
date on which the latest supplement to the Joint Proxy
Statement/Prospectus is first disseminated to holders of iXL
Common Stock and Scient Common Stock.
(b) "Affiliate" shall have the meaning given to such term in Rule
12b-2 under the Exchange Act.
(c) "Audit" means any claim, audit, action, suit, proceeding,
investigation, assessment or other examination relating to Taxes
by any Tax Authority or any judicial or administrative
proceedings relating to Taxes.
(d) "beneficial ownership" or "beneficially own" shall have the
meaning under Section 13(d) of the Exchange Act and the rules
and regulations thereunder.
(e) "Benefit Plans" means, with respect to any Person, each employee
benefit plan, program, arrangement and contract (including,
without limitation, any "employee benefit plan," as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and any bonus, deferred compensation,
stock bonus, stock purchase, restricted stock, stock option,
employment, termination, stay agreement or bonus, change in
control and severance plan, program, arrangement and contract)
in effect on the date of this Agreement or disclosed on the
Scient Disclosure Schedule or the iXL Disclosure Schedule, as
the case may be, to which such Person or its Subsidiary is a
party, which is maintained or contributed to by such Person, or
with respect to which such Person could incur material liability
under Sections 4069, 4201 or 4212(c) of ERISA.
(f) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
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(g) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
(h) "known" or "knowledge" means, with respect to any party, the
knowledge of such party's executive officers after reasonable
inquiry.
(i) "Intellectual Property" means trademarks, service marks, brand
names, certification marks, trade dress and other indications of
origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or
application; inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction; patents, applications
for patents (including, without limitation, divisions,
continuations, continuations in part and renewal applications),
and any renewals, extensions or reissues thereof, in any
jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit
the use or disclosure thereof by any Person; writings and other
works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in
any jurisdiction, and any renewals or extensions thereof; any
similar intellectual property or proprietary rights.
(j) "Material Adverse Effect" means, with respect to any entity any
material adverse effect on (i) the business, assets (including
cash), financial performance, condition (financial or
otherwise), or results of operations of such entity and its
Subsidiaries taken as a whole, other than any event, change,
circumstance or effect relating (x) to the economy or financial
markets in general, or (y) in general to the industries in which
such entity operates and not specifically relating to (or having
the effect of specifically relating to or having a materially
disproportionate effect (relative to most other industry
participants) on) such entity, or (z) to the actions taken by
the transition and succession team to the extent and in the
manner specified in Section 6.2(b), or (ii) the ability of such
entity to consummate the transactions contemplated by this
Agreement.
(k) "the other party" means, with respect to Scient, iXL and means,
with respect to iXL, Scient.
(l) "Person" means an individual, corporation, limited liability
entity, partnership, association, trust, unincorporated
organization, other entity or group (as defined in the Exchange
Act).
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(m) "Stockholders Meeting" shall mean, with respect to iXL, the iXL
Stockholders Meeting, and with respect to Scient, the Scient
Stockholders Meeting.
(n) "Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or
unincorporated, not less than a majority of the securities or
other equity or ownership or beneficial interests of which
having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions
with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or
more of its Subsidiaries.
(o) "Tax" (and, with correlative meaning, "Taxes") means any
federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, import, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest penalty addition to tax
or additional amount, imposed by any Governmental Entity or any
obligation to pay Taxes imposed on any person for which a party
to this Agreement is liable as a result of any indemnification
provision or other contractual obligation or as a result of
being or having been before the Effective Time a member of an
affiliated, consolidated, combined, or unitary group.
(p) "Tax Authority" means any Governmental Entity vested with
authority to levy Taxes.
(q) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any
information return, claim for refund, amended return or
declaration of estimated Tax.
(r) "Third Party" means (i) with respect to iXL, any Person other
than iXL or any of its Subsidiaries and (ii) with respect to
Scient, any Person other than Scient or any of its Subsidiaries.
9.12. Performance and Obligations. Whenever this Agreement requires any
Subsidiary of iXL or Scient to take any action, such requirement shall be
deemed to include an undertaking on the part of iXL (with respect to action by
a Subsidiary of iXL) and Scient (with respect to action by a Subsidiary of
Scient) and a guarantee by iXL (with respect to action by a Subsidiary of iXL)
and a guarantee by Scient (with respect to action by a Subsidiary of Scient) of
the full and punctual performance thereof. Whenever, from and after the
Effective Time, this Agreement requires the surviving corporation in the
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Scient Merger or the surviving corporation in the iXL Merger, as the case may
be, to take any action, such requirement shall be deemed to include an
undertaking on the part of Holdco to cause such relevant surviving corporation
to take such action and a guarantee by Holdco of the performance thereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its respective officers thereunto duly
authorized, all on the date first written above.
iXL ENTERPRISES, INC.
By: /s/ Michael J. Casey
------------------------------
Name: Michael J. Casey
Title: Senior Vice President and
Chief Financial Officer
SCIENT CORPORATION
By: /s/ Robert M. Howe
------------------------------
Name: Robert M. Howe
Title: Chairman and Chief Executive
Officer
INDIA-SIERRA HOLDINGS, INC.
By: /s/ Michael J. Casey
------------------------------
Name: Michael J. Casey
Title: Senior Vice President and
Chief Financial Officer
INDIA MERGER SUB, INC.
By: /s/ U. Bertram Ellis, Jr.
------------------------------
Name: U. Bertram Ellis, Jr.
Title: President
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SIERRA MERGER SUB, INC.
By: /s/ Robert M. Howe
------------------------------
Name: Robert M. Howe
Title: Chairman and Chief Executive
Officer
87