-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KCO44+7XDIQkrIp7D7xd4j7l6FSPAuXd9RQ4STRmnEHuLBU96e8AIfFSTYnof0WV IhLZEvR7rx1Z1g8pui4Xmw== /in/edgar/work/20000601/0000912057-00-027009/0000912057-00-027009.txt : 20000919 0000912057-00-027009.hdr.sgml : 20000919 ACCESSION NUMBER: 0000912057-00-027009 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000601 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LIONBRIDGE TECHNOLOGIES INC /DE/ CENTRAL INDEX KEY: 0001058299 STANDARD INDUSTRIAL CLASSIFICATION: [7389 ] IRS NUMBER: 043398462 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-56759 FILM NUMBER: 647582 BUSINESS ADDRESS: STREET 1: 950 WINTER STREET STREET 2: SUITE 4300 CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 7818906612 MAIL ADDRESS: STREET 1: 950 WINTER STREET CITY: WALTHAM STATE: MA ZIP: 02451 FORMER COMPANY: FORMER CONFORMED NAME: LIONBRIDGE TECHNOLOGIES HOLDINGS INC DATE OF NAME CHANGE: 19990611 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JEANTY ROGER O CENTRAL INDEX KEY: 0001115553 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O LIONBRIDGE TECHNOLOGIES STREET 2: 950 WINTER STREET SUITE 2410 CITY: WALTHAM STATE: MA ZIP: 02497 BUSINESS PHONE: 7814346000 MAIL ADDRESS: STREET 1: C/O LIONBRIDGE TECHNOLOGIES STREET 2: 950 WINTER STREET SUITE 2410 CITY: WALTHAM STATE: MA ZIP: 02497 SC 13D 1 sc13d.txt FORM 13-D OMB APPROVAL --------------------------- OMB Number: 3235-0145 Expires: November 30, 1999 Estimated average burden hours per response... 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* Lionbridge Technologies, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $.01 Par Value Per Share - -------------------------------------------------------------------------------- (Title of Class of Securities) 536252 10 9 ------------------------------------------------- (CUSIP Number) George W. Lloyd, Esq., c/o Testa, Hurwitz & Thibeault, LLP, 125 High Street, Boston, MA 02110 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 22, 2000 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. / / Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act. Page 1 of 8 Pages SCHEDULE 13D CUSIP No. 536252 10 9 Page 2 of 8 Pages - --------------------------- -----------------
- ------- -------------------------------------------------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Roger O. Jeanty - ------- ---------------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) / / (b) / / - ------- ---------------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------- ---------------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO - ------- ---------------------------------------------------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - ------- ---------------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION USA - ------- ---------------------------------------------------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,279,841 NUMBER OF ----- ---------------------------------------------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 384,420 EACH ----- ---------------------------------------------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 1,279,841 ----- ---------------------------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 384,420 - ------- ---------------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,664,261 - ------- ---------------------------------------------------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) / / - ------- ---------------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.6% - ------- ---------------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - ------- ----------------------------------------------------------------------------------------------------------------------------
SCHEDULE 13D CUSIP No. 536252 10 9 Page 3 of 8 Pages - --------------------------- ----------------- ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D relates to the Common Stock, $.01 par value per share (the "Lionbridge Common Stock"), of Lionbridge Technologies, Inc., a Delaware corporation ("Lionbridge"). The principal executive offices of Lionbridge are located at 950 Winter Street, Waltham, Massachusetts 02451. ITEM 2. IDENTITY AND BACKGROUND. (a) The names of the person filing this statement is Roger O. Jeanty (the "Filer"). (b) The business address of the Filer is Lionbridge Technologies, Inc., 950 Winter Street, Waltham, Massachusetts 02451. (c) The Filer is President and a Director of Lionbridge. (d) During the past five years, the Filer has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the past five years, the Filer has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which the Filer was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. (f) United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION On May 22, 2000, pursuant to an Amended and Restated Agreement and Plan of Reorganization (the "Merger Agreement") dated March 30, 2000 by and among Lionbridge, LTI Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Lionbridge (the "Merger Sub") and INT'L.com, Inc., a Delaware corporation ("INT'L.com"), the Merger Sub merged with and into INT'L.com (the "Merger"), after which the separate corporate existence of Merger Sub ceased and INT'L.com continued as the surviving corporation and a wholly-owned subsidiary of Lionbridge. Pursuant to the terms of the Merger Agreement, upon the effective time of the Merger, (i) each outstanding share of INT'L.com Series A common stock, INT'L.com Series B common stock, INT'L.com Series A preferred stock and INT'L.com Series B preferred stock was converted into the right to receive 0.7567 of a share (the "INT'L.com Conversion Ratio") of Lionbridge Common Stock; (ii) each outstanding share of INT'L.com Series C preferred stock was converted into the right to receive 5.4590 shares of Lionbridge Common Stock; (iii) each outstanding share of INT'L.com Series D preferred stock was converted into the right to receive 0.5472 of a share of Lionbridge Common Stock; (iv) the $2,000,000 of convertible debt of INT'L.com and all accrued interest thereon was paid in full and cancelled in exchange for 109,158 shares of Lionbridge Common Stock; and (v) the $5,000,000 of subordinated debt of INT'L.com and all accrued interest thereon was paid in full and cancelled in exchange for 258,360 shares of Lionbridge Common Stock. Each holder of capital stock, convertible debt and/or subordinated debt of INT'L.com who is otherwise entitled to a fraction of a share of Lionbridge Common Stock will receive cash in lieu thereof, equal to such fraction multiplied by $19.7266. As a result of the Merger, upon the closing of the transaction on May 22, 2000, Lionbridge issued an aggregate of 8,302,960 shares of Lionbridge Common Stock and $712.88 in cash in lieu of fractional shares of Lionbridge Common Stock in exchange for all of the outstanding shares of INT'L.com capital stock and in payment in full of the $2,000,000 of convertible debt and $5,000,000 of subordinated debt of INT'L.com. SCHEDULE 13D CUSIP No. 536252 10 9 Page 4 of 8 Pages - --------------------------- ----------------- Also, pursuant to the terms of the Merger Agreement, upon the effective time of the Merger, Lionbridge assumed INT'L.com's obligations under the IC Global Services, Inc. 1998 Stock Plan (Amended and Restated April 6, 1999) and the International Language Engineering Corporation Amended and Restated 1997 Stock Option Plan, and all stock options of INT'L.com granted pursuant to such plans, whether vested or unvested, outstanding as of the effective time of the Merger. The number of shares of Lionbridge Common Stock to be issued upon exercise of any such stock option is determined by multiplying the number of shares of INT'L.com common stock underlying such option by the INT'L.com Conversion Ratio (rounded down to the nearest whole share). The exercise price to be paid upon any such exercise is determined by dividing the exercise price per share of INT'L.com common stock for such option by the INT'L.com Conversion Ratio (rounded up to the nearest whole cent). Assuming the exercise of all such options outstanding as of the effective time of the Merger, Lionbridge will issue an additional 641,010 shares of Lionbridge Common Stock to the holders of INT'L.com stock options. The foregoing summary of the Merger is qualified in its entirety by reference to the copy of the Merger Agreement included as Exhibit 1 to this Schedule 13D and incorporated herein in its entirety by reference. The Filer is not a party to the Merger Agreement. This statement on Schedule 13D relates to shares of Lionbridge Common Stock received by Filer in exchange for his 1,500,000 shares of INT'L.com Series A common stock, 13,441 shares of INT'L.com Series B preferred stock and 3,335 shares of INT'L.com Series C preferred stock, and his options for shares of Lionbridge Common Stock received by Filer in exchange for his options for 180,000 shares of INT'L.com Series A common stock, pursuant to the Merger Agreement and in connection with the Merger. Item 4. Purpose of Transaction (a)-(b) As described in Item 3 above, this statement relates to shares of Lionbridge Common Stock received by Filer in exchange for shares of capital stock of INT'L.com and options for shares of capital stock of INT'L.com held by Filer, pursuant to the Merger Agreement and in connection with the Merger of the Merger Sub with and into INT'L.com in a merger pursuant to the relevant provisions of the Delaware General Corporation Law. At the effective time of the Merger, the separate existence of the Merger Sub ceased to exist and INT'L.com continued as the surviving corporation and wholly-owned subsidiary of Lionbridge. The foregoing summary of the Merger is qualified in its entirety by reference to the copy of the Merger Agreement included as Exhibit 1 to this Schedule 13D and incorporated herein in its entirety by reference. The Filer is not a party to the Merger Agreement. (c) Not applicable. (d) In connection with the Merger, the Filer was elected President and a Director of Lionbridge effective at the effective time of the Merger. (e) Other than the 8,302,960 shares of Lionbridge Common Stock issued to the Filer and other former holders of INT'L.com capital stock and convertible and subordinated debt as a result of the Merger described in Item 3 above, not applicable. (f) Not applicable. (g) Not applicable. (h) Not applicable. SCHEDULE 13D CUSIP No. 536252 10 9 Page 5 of 8 Pages - --------------------------- ----------------- (i) Not applicable. (j) Other than as described above, the Filer currently knows of no plan or proposals which relate to, or may result in, any of the matters listed in Items 4(a) - (j) of Schedule 13D. References to, and descriptions of the Merger Agreement as set forth above in this Item 4 are qualified in their entirety by reference to the copy of the Merger Agreement included as Exhibit 1 to this Schedule 13D and incorporated in this Item 4 in its entirety where such references and descriptions appear. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The Filer may be deemed to beneficially own 1,664,261 shares of Lionbridge Common Stock (the "Shares"). Such Shares include 116,415 shares of Lionbridge Common Stock deemed to be beneficially owned by the Filer pursuant to options exercisable within 60 days and 384,420 shares of Lionbridge Common Stock held of record by the Filer's wife. The Filer disclaims beneficial ownership of such shares held by his wife. (b) Number of Shares as to which the Filer has: (i) Sole power to vote or direct the vote: See Item 7 on the cover page of this Schedule 13D. (ii) Shared power to vote or direct the vote: See Item 8 on the cover page of this Schedule 13D. (iii) Sole power to dispose or to direct the disposition: See Item 9 on the cover page of this Schedule 13D. (iv) Shared power to dispose or to direct the disposition: See Item 10 on the cover page of this Schedule 13D. (c) The Filer represents that he has not affected any transaction in Lionbridge Common Stock during the past 60 days. (d) Not applicable. (e) Not applicable. SCHEDULE 13D CUSIP No. 536252 10 9 Page 6 of 8 Pages - --------------------------- ----------------- ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The Filer is a party to an IC Global Services, Inc. 1998 Stock Plan Stock Option Agreement for 130,000 shares ("Option Agreement 1") and an IC Global Services, Inc. 1998 Stock Plan Stock Option Agreement for 50,000 shares ("Option Agreement 2"), both of which were assumed by Lionbridge pursuant to the Merger Agreement and in connection with the Merger as described in Item 3 above. Pursuant to the assumption of Option Agreement 1, the Filer has options to purchase 98,371 shares of Lionbridge Common Stock, 78,580 of which option shares are immediately exercisable and 19,791 of which option shares will become exercisable as of December 31, 2000, but all of which option shares are subject to a repurchase right which will lapse as of April 6, 2006. Pursuant to the assumption of Option Agreement 2, the Filer has options to purchase 37,835 shares of Lionbridge Common Stock, all of which option shares are immediately exercisable, but 29,637 of which option shares are subject to a repurchase right which lapses at a rate of 631 option shares per month beginning June 6, 2000. The Filer is a party to a Third Restated Registration Rights Agreement dated May 22, 2000 among Lionbridge, the Lionbridge shareholders party to the Second Restated Registration Rights Agreement, the former affiliate shareholders of INT'L.com and the former shareholder of Harvard Translations, Inc. (the "Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, the Filer may require that Lionbridge register shares beneficially owned by the Filer if Lionbridge proposes to register any of its shares with the Securities and Exchange Commission. In addition, the holders of at least 40% of the then outstanding shares subject to the Registration Rights Agreement are entitled to request that Lionbridge file a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering the sale of some or all of the shares held by the requesting holder or holders, and Lionbridge is generally required to use its best efforts to effect a registration. Lionbridge is not required to effect more than two demand registrations and each demand registration must cover the sale of shares of common stock representing at least 20% of the shares subject to the Registration Rights Agreement or any lesser percentage, so long as the anticipated offering price for these shares exceeds $5,000,000. Once Lionbridge has qualified to use Form S-3 to register securities under the Securities Act, the Filer has the right to request that Lionbridge file a registration statement on Form S-3 or any successor form for a public offering of all or any portion of the Filer's shares, provided that the reasonably anticipated aggregate price to the public of such offering would be at least $1,000,000, and Lionbridge is generally required to use its best efforts to effect a registration. In general, all expenses of such registrations, other than underwriting discounts and selling commissions, will be borne by Lionbridge. The Filer is a party to an Escrow Agreement dated as of May 22, 2000 by and among Lionbridge, INT'L.com, American Stock Transfer & Trust Company (as Escrow Agent) and Steven Fingerhood (as Indemnification Representative) (the "Escrow Agreement"). Pursuant to the Escrow Agreement, 10% of the shares (the "Escrow Shares") issuable in connection with the Merger and pursuant to the Merger Agreement, will be held in escrow as the source of indemnification payments which may become due to Lionbridge under the Merger Agreement until such shares are released in accordance with the Escrow Agreement after the earlier of (i) the publication of Lionbridge's audited financial results for the year ended December 31, 2000 or (ii) expiration of the survival period for certain representations and warranties of INT'L.com set forth in the Merger Agreement. The Escrow Shares were withheld on a pro rata basis among the former holders of INT'L.com capital stock, subordinated debt and convertible debt based on the number of Lionbridge shares issued at the closing of the Merger to such former holders. The Filer is a party to a certain letter agreement dated January 19, 2000 between the Filer and Lionbridge (the "Affiliate Agreement"). Pursuant to the Affiliate Agreement, the Filer has agreed that, without the prior written consent of Lionbridge, he will not sell, exchange, transfer, pledge, dispose or otherwise reduce his risk relative to any shares of Lionbridge Common Stock owned by him until after such time as Lionbridge publicly announces financial results covering at least thirty days of combined operations of Lionbridge and INT'L.com. Lionbridge, at its discretion, may apply legends to the Lionbridge Common Stock owned by the Filer and may cause stop transfer orders to be placed with its transfer agent with respect to the certificates representing the Filer's shares of Lionbridge Common Stock. SCHEDULE 13D CUSIP No. 536252 10 9 Page 7 of 8 Pages - --------------------------- ----------------- References to, and descriptions of the Merger Agreement, Option Agreement 1, Option Agreement 2, the Registration Rights Agreement, the Escrow Agreement and the Affiliate Agreement as set forth above in this Item 6 are qualified in their entirety by reference to the copies of the Agreement, Option Agreement 1, Option Agreement 2, the Registration Rights Agreement, the Escrow Agreement and the Affiliate Agreement included as Exhibits 1, 2, 3, 4, 5 and 6, respectively, to this Schedule 13D and incorporated in this Item 6 in their entirety where such references and descriptions appear. Item 7. Material to Be Filed as Exhibits
Exhibit No. Description 1 Amended and Restated Agreement and Plan of Reorganization dated March 30, 2000 by and among Lionbridge, LTI Acquisition Corp., and INT'L.com. 2 IC Global Stock Services, Inc. 1998 Stock Plan Stock Option Agreement for 130,000 shares. 3 IC Global Stock Services, Inc. 1998 Stock Plan Stock Option Agreement for 50,000 shares. 4 Third Restated Registration Rights Agreement dated May 22, 2000 by and among Lionbridge, the Lionbridge shareholders party to the Second Restated Registration Rights Agreement,the former affiliate shareholders of INT'L.com and the former shareholder of Harvard Translations, Inc. 5 Escrow Agreement dated as of May 22, 2000 by and among Lionbridge, INT'L.com, American Stock Transfer & Trust Company (as Escrow Agent) and Steven Fingerhood (as Indemnification Representative). 6 Letter Agreement dated as of January 19, 2000 by and between Lionbridge and the Filer.
SCHEDULE 13D CUSIP No. 536252 10 9 Page 8 of 8 Pages - --------------------------- ----------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. June 1, 2000 ---------------------------- Date /s/ Roger O. Jeanty ---------------------------- Signature Roger O. Jeanty ---------------------------- Name/Title EX-1 2 ex-1.txt EXHIBIT 1 Exhibit 1 LIONBRIDGE TECHNOLOGIES, INC., LTI ACQUISITION CORP. AND INT'L.COM, INC. AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION Dated as of March 30, 2000 TABLE OF CONTENTS ARTICLE I. THE MERGER ............................................ 1 1.1 The Merger ................................................... 1 1.2 Effects of the Merger ........................................ 1 1.3 Closing ...................................................... 2 1.4 Approval by the Stockholders of INT'L.com .................... 2 1.5 Approval by the Stockholders of Parent ....................... 2 ARTICLE II. CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES .. 2 2.1 Conversion of Shares of INT'L.com Stock ...................... 2 2.2 Escrow Shares ................................................ 5 2.3 Dissenting Shares ............................................ 6 2.4 Delivery of Evidence of Ownership ............................ 6 2.5 No Further Ownership Rights in INT'L.com Stock ............... 7 2.6 No Fractional Shares ......................................... 7 2.7 Assumption of Stock Options .................................. 7 2.8 Notes ........................................................ 7 2.9 Bridge Notes ................................................. 8 ARTICLE III. REPRESENTATIONS AND WARRANTIES OF INT'L.COM ......... 8 3.1 Organization, Standing and Power; Subsidiaries ............... 8 3.2 Capital Structure ............................................ 9 3.3 Authority .................................................... 10 3.4 Compliance with Laws and Other Instruments; Non-Contravention. 11 3.5 Technology and Intellectual Property Rights .................. 12 3.6 Financial Statements; Business Information ................... 14 3.7 Taxes ........................................................ 15 3.8 Absence of Certain Changes and Events ........................ 16 3.9 Leases in Effect ............................................. 18 3.10 Personal Property; Real Estate ............................... 18 3.11 Certain Transactions ......................................... 19 3.12 Litigation and Other Proceedings ............................. 19 3.13 No Defaults .................................................. 19 3.14 Major Contracts .............................................. 20 3.15 Material Reductions .......................................... 21 3.16 Insurance and Banking Facilities ............................. 21 3.17 Employees .................................................... 21 3.18 Employee Benefit Plans ....................................... 22 3.19 Certain Agreements ........................................... 23 3.20 Guarantees and Suretyships ................................... 23 3.21 Brokers and Finders .......................................... 23 3.22 Certain Payments ............................................. 23 3.23 Environmental Matters ........................................ 24 3.24 Enforceability of Contracts, Etc ............................. 24 3.25 Accounting Matters ........................................... 24 3.26 Year 2000 .................................................... 25 3.27 Disclosure ................................................... 25 3.28 Reliance ..................................................... 25 ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 25 4.1 Organization and Qualification ............................... 25
-i- 4.2 Capitalization ......................................................... 26 4.3 Authority Relative to this Agreement ................................... 26 4.4 Non-Contravention ...................................................... 26 4.5 Reports and Financial Statements ....................................... 27 4.6 Validity of Parent Merger Shares ....................................... 28 4.7 Consents and Approvals of Governmental Authorities ..................... 28 4.8 Absence of Certain Changes or Events ................................... 28 4.9 Litigation and Other Proceedings ....................................... 28 4.10 Disclosure ............................................................. 28 4.11 Reliance ............................................................... 28 4.12 Brokers and Finders .................................................... 28 4.13 Accounting Matters ..................................................... 28 ARTICLE V. COVENANTS OF INT'L.COM ........................................... 29 5.1 Conduct of Business in Ordinary Course ................................. 29 5.2 Dividends, Issuance of, or Changes in Securities ....................... 30 5.3 Governing Documents .................................................... 30 5.4 No Acquisitions ........................................................ 30 5.5 No Dispositions ........................................................ 30 5.6 Indebtedness ........................................................... 30 5.7 Compensation ........................................................... 30 5.8 Claims ................................................................. 31 5.9 Access to Properties and Records ....................................... 31 5.10 Breach of Representations and Warranties ............................... 31 5.11 Consents ............................................................... 31 5.12 Tax Returns ............................................................ 31 5.13 Exclusivity; Acquisition Proposals ..................................... 31 5.14 Notice of Events ....................................................... 32 5.15 Reasonable Best Efforts ................................................ 32 5.16 Insurance .............................................................. 32 5.17 Financial Statements ................................................... 32 5.18 Confidentiality and Assignment of Inventions Agreements ................ 32 ARTICLE VI. COVENANTS OF PARENT ............................................. 33 6.1 Breach of Representations and Warranties ............................... 33 6.2 Additional Information; Access ......................................... 33 6.3 Consents ............................................................... 33 6.4 Reasonable Best Efforts ................................................ 33 6.5 Officers and Directors ................................................. 33 6.6 Nasdaq National Market Listing ......................................... 34 6.7 Notice of Events ....................................................... 34 6.8 Third Party Beneficiaries .............................................. 34 6.9 DIrectors of Parent .................................................... 34 ARTICLE VII. ADDITIONAL AGREEMENTS .......................................... 34 7.1 Preparation of the Form S-4 and the Proxy Statement; Stockholders Meeting 34 7.2 Legal Conditions to the Merger .......................................... 37 7.3 Employee Benefits ...................................................... 37 7.4 Expenses ............................................................... 37 7.5 Additional Agreements .................................................. 37 7.6 Public Announcements ................................................... 37 7.7 Confidentiality ........................................................ 38 7.8 Pooling ................................................................ 38 7.9 INT'L.com Voting Agreement ............................................. 39 7.10 Parent Voting Agreement ................................................ 39
-ii- 7.11 Hart-Scott-Rodino Filing ................................... 39 7.12 Board of Directors Meetings ................................ 39 7.13 Employment, Consulting and Noncompetition Agreements ....... 40 7.14 INT'L.com Conversion ....................................... 40 7.15 Debt Adjustments ........................................... 40 ARTICLE VIII. CONDITIONS PRECEDENT .............................. 40 8.1 Conditions to Each Party's Obligation to Effect the Merger . 40 8.2 Conditions of Obligations of Parent and Merger Sub ......... 41 8.3 Conditions of Obligation of INT'L.com ...................... 43 ARTICLE IX. INDEMNIFICATION ..................................... 44 9.1 Indemnification Relating to Agreement ...................... 44 9.2 Third Party Claims ......................................... 45 9.3 Limitations ................................................ 45 9.4 Binding Effect ............................................. 46 9.5 Time Limit ................................................. 46 9.6 Sole Remedy ................................................ 46 ARTICLE X. TERMINATION .......................................... 47 10.1 Mutual Agreement .......................................... 47 10.2 Termination by Parent ..................................... 47 10.3 Termination by INT'L.com .................................. 47 10.4 Outside Date .............................................. 47 10.5 Effect of Termination ..................................... 47 ARTICLE XI. MISCELLANEOUS ....................................... 48 11.1 Entire Agreement .......................................... 48 11.2 Governing Law; Consent to Jurisdiction .................... 48 11.3 Notices ................................................... 48 11.4 Severability .............................................. 50 11.5 Survival of Representations and Warranties ................ 50 11.6 Assignment ................................................ 50 11.7 Counterparts .............................................. 50 11.8 Amendment ................................................. 50 11.9 Extension, Waiver ......................................... 50 11.10 Interpretation ............................................ 51 11.11 Knowledge ................................................. 51 11.12 Transfer, Sales, Documentary, Stamp and Other Similar Taxes 51 11.13 Acknowledgement ........................................... 51
EXHIBITS EXHIBIT 1.1 -- Merger Documents EXHIBIT 2.2 -- Escrow Agreement EXHIBIT 2.4 -- Letter of Transmittal EXHIBIT 7.1 -- Registration Rights Agreement EXHIBIT 7.8(b) -- INT'L.com Affiliate Agreement EXHIBIT 7.8(c) -- Parent Affiliate Agreement EXHIBIT 7.9 -- INT'L.com Voting Agreement EXHIBIT 7.10 -- Parent Voting Agreement Exhibit 7.14 -- Conversion Notice EXHIBIT 8.2 -- Opinion of Neal, Gerber & Eisenberg -iii- EXHIBIT 8.3 -- Opinion of Testa, Hurwitz & Thibeault, LLP
-iv- AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION, dated as of March 30, 2000 (this "AGREEMENT"), by and among Lionbridge Technologies, Inc., a Delaware corporation ("PARENT"); LTI Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("MERGER SUB"); and INT'L.com, Inc., a Delaware corporation ("INT'L.COM"). This Agreement amends and restates in its entirety the Agreement and Plan of Reorganization dated as of January 19, 2000 (THE "PRIOR AGREEMENT") by and among Parent, Merger Sub and INT'L.com. All Exhibits and Schedules delivered with or attached to the Prior Agreement shall be deemed to be delivered herewith or attached hereto, as the case may be. Intending to be legally bound, and in consideration of the mutual representations, warranties, covenants and agreements contained herein, Parent, Merger Sub and INT'L.com agree as follows: ARTICLE I THE MERGER 1.1 THE MERGER. Subject to the terms and conditions hereof, and in accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub will be merged with and into INT'L.com (the "MERGER"). A Certificate of Merger and any other required documents (collectively, the "MERGER DOCUMENTS"), substantially in the form attached as EXHIBIT 1.1, will be duly prepared, executed and acknowledged by INT'L.com and Merger Sub and thereafter delivered to the Secretary of State of Delaware for filing in accordance with the DGCL contemporaneously with the Closing (as defined in Section 1.3). The Merger will become effective at such time as the Merger Documents have been filed with the Secretary of State of Delaware (the "EFFECTIVE TIME"). Following the Merger, INT'L.com will continue as the surviving corporation of the Merger (the "SURVIVING CORPORATION") under the laws of the State of Delaware, and the separate corporate existence of Merger Sub will cease. 1.2 EFFECTS OF THE MERGER. At and after the Effective Time, (i) the Merger will have all of the effects provided by the Certificate of Merger and applicable law, (ii) the Certificate of Incorporation of INT'L.com will be amended in the form attached as APPENDIX A to EXHIBIT 1.1 until duly further amended, (iii) the bylaws of Merger Sub will be the bylaws of the Surviving Corporation until duly amended, (iv) the directors of Merger Sub will be the directors of the Surviving Corporation, to hold office in accordance with the bylaws of the Surviving Corporation, (v) the officers of INT'L.com will be the officers of the Surviving Corporation, to hold office in accordance with the bylaws of the Surviving Corporation and (vi) the issued and outstanding certificates for the capital stock of Merger Sub will be the issued and outstanding certificates initially representing all of the issued capital stock of the Surviving Corporation. The Merger is intended to be a reorganization within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "CODE"), and this Agreement is intended to constitute a "plan of reorganization" within the meaning of the regulations promulgated under Section 368 of the Code. 1.3 CLOSING. The closing of the transactions contemplated by this Agreement (the "CLOSING") will take place as soon as practicable (but no more than three (3) business days) after satisfaction or waiver of the last to be fulfilled of the conditions set forth in Article VIII that by their terms are not to occur at the Closing (the "CLOSING DATE"), but in no event later than June 30, 2000, at the offices of Testa, Hurwitz & Thibeault, LLP in Boston, Massachusetts, unless another date or place is agreed to in writing by Parent and INT'L.com. If all of the conditions set forth in Article VIII hereof are determined to be satisfied (or duly waived) at the Closing, concurrently with the Closing the parties hereto will cause the Merger to be consummated by the filing of the Merger Documents with the Secretary of State of Delaware. The Closing will be deemed to have concluded at the Effective Time. 1.4 APPROVAL BY THE STOCKHOLDERS OF INT'L.COM. INT'L.com will take all action necessary in accordance with the DGCL, its Charter Documents (as defined below) and any agreements to which it is a party to solicit the approval of this Agreement, the Merger and all of the transactions contemplated hereby by all stockholders of INT'L.com by means of a duly convened meeting of stockholders. INT'L.com will use its reasonable best efforts to obtain such stockholder approval. INT'L.com represents and warrants that its Board of Directors has duly (i) approved the Merger in accordance with the DGCL and (ii) resolved to recommend to the stockholders of INT'L.com that they approve this Agreement, the Merger and all of the transactions contemplated hereby. 1.5 APPROVAL BY THE STOCKHOLDERS OF PARENT. Parent will take all action necessary to obtain the approval of the issuance of its shares in connection with the Merger by the stockholders of Parent by means of a duly convened meeting of the stockholders of Parent, as required by the rules of the Nasdaq Stock Market, in accordance with the applicable requirements of the DGCL, its Charter Documents and any agreements to which it is a party. Parent will use its reasonable best efforts to obtain such stockholder approval. Parent represents and warrants that its Board of Directors has duly (i) approved the Merger in accordance with the DGCL and (ii) resolved to recommend to the stockholders of Parent that they approve the issuance of its shares in connection with the Merger. ARTICLE II CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES 2.1 CONVERSION OF SHARES OF INT'L.COM STOCK. (a) Subject, without limitation, to the provisions of Section 2.3 hereof, at the Effective Time, all of (i) the shares of Series A common stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES A COMMON STOCK"), Series B common stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES B COMMON STOCK" and along with the Int'l Series A Common Stock, the "INT'L.COM COMMON STOCK"), Series A preferred stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES A PREFERRED STOCK"), and Series B preferred stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES B PREFERRED STOCK" and along with the INT'L.com Series A Common Stock, the INT'L.com Series B Common Stock and the INT'L.com Series A Preferred Stock, "INT'L.COM CAPITAL STOCK") issued and outstanding immediately prior to the Effective Time excluding any INT'L.com Capital Stock held by Parent or Merger Sub or any other subsidiary of Parent, or by INT'L.com or any subsidiary of INT'L.com, which shares ("EXCLUDED SHARES") will be automatically canceled in the Merger without payment of any consideration therefor, and excluding Dissenting Shares (as defined in Section 2.3 hereof)) will automatically, by virtue of the -2- Merger and without any action on the part of the holder thereof, be converted into shares of common stock, $0.01 par value per share, of Parent ("PARENT COMMON STOCK") in accordance with Section 2.1(e), and cash (rounded down to the nearest whole cent) in lieu of fractional shares, if any, pursuant to Section 2.6 below. Shares of INT'L.com Capital Stock that are actually issued and outstanding immediately prior to the Effective Time (excluding the Excluded Shares) are sometimes referred to herein as the "OUTSTANDING INT'L.COM CAPITAL STOCK SHARES." All rights, warrants or options to acquire INT'L.com Common Stock and securities convertible into INT'L.com Common Stock (except for the INT'L.com Series A Preferred Stock, the INT'L.com Series B Preferred Stock, the Series C preferred stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES C PREFERRED STOCK") and the Series D preferred stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES D PREFERRED STOCK") and the INT'L.com Notes (as defined in Section 2.8 below)) that are outstanding immediately prior to the Effective Time and do not expire pursuant to their terms on or before the Closing (each of which is specifically identified in Section 3.2 of the INT'L.com Disclosure Schedule (as defined below)) are sometimes referred to herein as the "OUTSTANDING INT'L.COM OPTIONS." (b) The aggregate number of shares of Parent Common Stock to be issued in exchange for the acquisition of all Outstanding INT'L.com Capital Stock Shares and the assumption of all Outstanding INT'L.com Options will be equal to the Modified Share Amount (as defined in (d) below). Such shares are herein referred to as the "PARENT STOCK MERGER SHARES". (c) Subject, without limitation, to the provisions of Section 2.3 hereof, at the Effective Time, all of the shares of INT'L.com Series C Preferred Stock issued and outstanding immediately prior to the Effective Time (excluding any INT'L.com Series C Preferred Stock held by Parent or Merger Sub or any other subsidiary of Parent, or by INT'L.com or any subsidiary of INT'L.com, which shares ("EXCLUDED SERIES C SHARES") will be automatically canceled in the Merger without payment of any consideration therefor, and excluding Dissenting Shares (as defined in Section 2.3 hereof)), will automatically, by virtue of the Merger and without any action on the part of the holder thereof, be converted into shares of Parent Common Stock in accordance with Section 2.1(f), and cash (rounded down to the nearest whole cent) in lieu of fractional shares, if any, pursuant to Section 2.6 below. Shares of INT'L.com Series C Preferred Stock that are actually issued and outstanding immediately prior to the Effective Time, excluding the Excluded Series C Shares, are sometimes referred to herein as the "OUTSTANDING INT'L.COM SERIES C SHARES." Subject, without limitation, to the provisions of Section 2.3 hereof, at the Effective Time, all of the shares of INT'L.com Series D Preferred Stock issued and outstanding immediately prior to the Effective Time (excluding any INT'L.com Series D Preferred Stock held by Parent or Merger Sub or any other subsidiary of Parent, or by INT'L.com or any subsidiary of INT'L.com, which shares ("EXCLUDED SERIES D SHARES") will be automatically canceled in the Merger without payment of any consideration therefor, and excluding Dissenting Shares (as defined in Section 2.3 hereof)), will automatically, by virtue of the Merger and without any action on the part of the holder thereof, be converted into shares of Parent Common Stock in accordance with Section 2.1(g), and cash (rounded down to the nearest whole cent) in lieu of fractional shares, if any, pursuant to Section 2.6 below. Shares of INT'L.com Series D Preferred Stock that are actually issued and outstanding immediately prior to the Effective Time, excluding the Excluded Series D Shares, are sometimes referred to herein as the "OUTSTANDING INT'L.COM SERIES D SHARES" and along with the Outstanding INT'L.com Capital Stock Shares and the Outstanding INT'L.com Series C Shares, collectively the "OUTSTANDING INT'L.COM SHARES." -3- (d) The aggregate number of shares of Parent Common Stock to be issued in exchange for the acquisition of all Outstanding INT'L.com Series C Shares will be equal to the INT'L.com Series C Base Amount divided by the Parent Average Closing Price. Such shares are herein referred to as the "PARENT SERIES C MERGER SHARES". The aggregate number of shares of Parent Common Stock to be issued in exchange for the acquisition of all Outstanding INT'L.com Series D Shares will be equal to the INT'L.com Series D Base Amount divided by the Parent Average Closing Price. Such shares are herein referred to as the "PARENT SERIES D MERGER SHARES" and along with the Parent Stock Merger Shares, the Note Payment Shares (as defined in Section 2.9 below) and the Parent Series C Merger Shares, collectively the "PARENT MERGER SHARES". The following definitions will be used in making the foregoing calculations and for all other purposes of this Agreement: "INT'L.COM SERIES C BASE AMOUNT" will mean the aggregate accrued liquidation preference of INT'L.com Series C Preferred Stock calculated as of the Closing Date in accordance with the terms of the Charter Documents of INT'L.com. "INT'L.COM SERIES D BASE AMOUNT" will mean the aggregate accrued liquidation preference of INT'L.com Series D Preferred Stock calculated as of the Closing Date in accordance with the terms of the Charter Documents of INT'L.com. "PARENT AVERAGE CLOSING PRICE" will be equal to the weighted average closing price of the Parent Common Stock as publicly reported by the Wall Street Journal over the twenty Trading Days ending two Trading Days prior to the Prior Agreement Date (as defined below). "MODIFIED SHARE AMOUNT" will mean the Share Amount LESS (i) the number of Convertible Note Payment Shares (as defined in Section 2.8 below) (ii) the number of Debt Payment Shares (as defined in Section 7.15 below) and (iii) such number of shares of Parent Common Stock having a value (as determined using the Parent Average Closing Price) equal to any expenses to be borne by the stockholders of INT'L.com pursuant to Section 7.4. "SHARE AMOUNT" will mean 8,150,000 shares of Parent Common Stock (appropriately adjusted for any stock split, stock dividend, recapitalization or similar event). "TRADING DAY" will mean days on which closing prices for purchases and sales of Parent Common Stock are reported by the Nasdaq National Market. (e) The ratio at which one Outstanding INT'L.com Capital Stock Share will be converted into shares of Parent Common Stock at the Effective Time is herein called the "CONVERSION RATIO" and will be calculated as set forth in this Section 2.1(e). Subject to Section 2.3, at the Effective Time, each Outstanding INT'L.com Capital Stock Share will be converted into the right to receive that number (which may be a fraction) of shares of Parent Common Stock that equals the quotient obtained by DIVIDING the number of Parent Stock Merger Shares by the sum of the number of Outstanding INT'L.com Capital Stock Shares PLUS the number of shares of INT'L.com Common Stock issuable upon the exercise or conversion of all Outstanding INT'L.com Options. Each holder of Outstanding -4- INT'L.com Capital Stock Shares will be entitled to receive that aggregate number of shares of Parent Common Stock equal to the Conversion Ratio multiplied by the number of Outstanding INT'L.com Capital Stock Shares held by such holder immediately prior to the Effective Time, subject to Section 2.3 herein. (f) The ratio at which one Outstanding INT'L.com Series C Share will be converted into shares of Parent Common Stock at the Effective Time is herein called the "SERIES C CONVERSION RATIO" and will be calculated as set forth in this Section 2.1(f). Subject to Section 2.3, at the Effective Time, each Outstanding INT'L.com Series C Share will be converted into the right to receive that number (which may be a fraction) of shares of Parent Common Stock that equals the quotient obtained by DIVIDING the number of Parent Series C Merger Shares by the number of Outstanding INT'L.com Series C Shares. Each holder of Outstanding INT'L.com Series C Shares will be entitled to receive that aggregate number of shares of Parent Common Stock equal to the Series C Conversion Ratio multiplied by the number of Outstanding INT'L.com Series C Shares held by such holder immediately prior to the Effective Time, subject to Section 2.3 herein. (g) The ratio at which one Outstanding INT'L.com Series D Share will be converted into shares of Parent Common Stock at the Effective Time is herein called the "SERIES D CONVERSION RATIO" and will be calculated as set forth in this Section 2.1(g). Subject to Section 2.3, at the Effective Time, each Outstanding INT'L.com Series D Share will be converted into the right to receive that number (which may be a fraction) of shares of Parent Common Stock that equals the quotient obtained by DIVIDING the number of Parent Series D Merger Shares by the number of Outstanding INT'L.com Series D Shares. Each holder of Outstanding INT'L.com Series D Shares will be entitled to receive that aggregate number of shares of Parent Common Stock equal to the Series D Conversion Ratio multiplied by the number of Outstanding INT'L.com Series D Shares held by such holder immediately prior to the Effective Time, subject to Section 2.3 herein. (h) At the Effective Time, each share of common stock, $0.01 par value, of Merger Sub issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder hereof, be converted into one share of common stock, $0.01 par value per share, of the Surviving Corporation. 2.2 ESCROW SHARES. Ten percent (10%) of the Parent Merger Shares issuable at Closing (excluding any Parent Merger Shares issuable after the Closing with respect to Outstanding INT'L.com Options, the Excluded Shares, the Series C Excluded Shares and the Series D Excluded Shares), rounded up to the nearest whole share (the "ESCROW SHARES") will be deposited and held in escrow in accordance with the Escrow Agreement attached as EXHIBIT 2.2 (the "ESCROW AGREEMENT") as the sole source of indemnification payments that may become due to Parent pursuant to Article IX or otherwise prior to the release of the Escrow Shares pursuant to Section 3.1 of the Escrow Agreement; provided that the aggregate liability of any single stockholder for indemnification obligations pursuant to Article IX of this Agreement shall be equal to a dollar amount equal to the Parent Average Closing Price multiplied by the aggregate number of Escrow Shares deposited in escrow by or on behalf of such stockholder; and provided, further, that each INT'L.com stockholder shall be severally (and not jointly) liable beyond such holder's allocable portion of the Escrow Shares solely in respect of any breach by such stockholder of any representation or warranty contained in a Letter of Transmittal (as defined in Section 2.4 below) delivered by such stockholder. The Escrow Shares will be withheld on a pro rata -5- basis among the holders of the Outstanding INT'L.com Shares based on the number of Parent Merger Shares issuable at the closing to such holders. The exact number of Escrow Shares held for the account of each INT'L.com stockholder will be determined at the Closing by the agreement in writing of Parent and INT'L.com. The delivery of the Escrow Shares will be made on behalf of the holders of the Outstanding INT'L.com Shares in accordance with the provisions hereof, with the same force and effect as if such shares had been delivered by Parent directly to such holders and subsequently delivered by such holders to the Escrow Agent. The adoption of this Agreement by stockholders of INT'L.com will also constitute their approval of the terms and provisions of the Escrow Agreement, including, without limitation, the appointment of Steven Fingerhood as the Indemnification Representative (as defined in the Escrow Agreement), which is an integral term of the Merger. 2.3 DISSENTING SHARES. Any holder of shares of INT'L.com Capital Stock, INT'L.com Series C Preferred Stock and INT'L.com Series D Preferred Stock (collectively, the "INT'L.COM STOCK") that are outstanding on the record date for the determination of which holders will be entitled to vote for or against the Merger who objects to the Merger and complies with all of the provisions of the DGCL concerning the rights of holders to dissent from the Merger and require appraisal (such shares are referred to as "DISSENTING SHARES") will be entitled to exercise appraisal rights pursuant to Section 262 of the DGCL with respect to such Dissenting Shares PROVIDED THAT such holder meets all of the requirements of the DGCL with respect to such Dissenting Shares, and will not be entitled to receive Parent Merger Shares, unless otherwise provided by the DGCL or agreed in writing by Parent. INT'L.com will, after consultation with Parent, give such notices with respect to appraisal rights as may be required by the DGCL as soon as practicable. 2.4 DELIVERY OF EVIDENCE OF OWNERSHIP. Prior to the Closing, Parent shall send a notice and transmittal form in substantially the form of EXHIBIT 2.4 hereto (individually, a "Letter of Transmittal" and collectively, the "LETTERS OF TRANSMITTAL") to each holder of a certificate or other documentation representing Outstanding INT'L.com Shares, other than Dissenting Shares, each holder of a certificate or other documentation representing Outstanding INT'L.com Shares, other than Dissenting Shares, will surrender such certificates or other documentation to Parent or its designee, and, if not previously delivered, (i) a duly executed counterpart of the Escrow Agreement, (ii) a duly executed Letter of Transmittal and (iii) such other duly executed documentation as may be reasonably required by Parent to effect a transfer of such shares, and upon such surrender and after the Effective Time each such holder will be entitled to receive promptly from Parent or its transfer agent certificates registered in the name of such holder representing the applicable number of Parent Merger Shares, and the cash (calculated pursuant to Section 2.6, which will be paid by check), to which such holder is entitled pursuant to the provisions of this Agreement, with a portion of such shares to be deposited in escrow pursuant to the Escrow Agreement, as provided in Section 2.2. The adoption of this Agreement by stockholders of INT'L.com will also constitute their approval of the terms and provisions of the Letter of Transmittal. In the event any certificates or instruments representing Outstanding INT'L.com Shares or Outstanding INT'L.com Options shall have been lost, stolen or destroyed, upon the making and delivery of an affidavit of that fact by the person claiming same to have been lost, stolen or destroyed and the posting by such person of a bonding such reasonable amount as Parent may direct as indemnity against any claim that would be made against Parent with respect to such certificate or instrument, Parent will issue in exchange for such lost, stolen or destroyed certificate or instrument the Parent Merger Shares and cash deliverable in respect thereof pursuant to this Agreement. -6- 2.5 NO FURTHER OWNERSHIP RIGHTS IN INT'L.COM STOCK. The Merger and its approval by the stockholders of INT'L.com and the execution of this Agreement will be deemed, at the Effective Time, to constitute full satisfaction and termination of all rights and agreements pertaining to INT'L.com Stock pursuant to the DGCL, by contract or otherwise, except for any rights pertaining to this Agreement. After the Effective Time, there will be no transfers on the stock transfer books of INT'L.com of INT'L.com Stock or exercises of any options, warrants or other rights to acquire INT'L.com Stock. Prior to or upon Closing, INT'L.com will cause rights to purchase or acquire INT'L.com Stock other than the Outstanding INT'L.com Options assumed pursuant to Section 2.7 below to either be exercised or canceled. Until surrendered to Parent, each certificate for INT'L.com Stock will, after the Effective Time, represent only the right to receive the right to receive cash and Parent Merger Shares into which the shares of INT'L.com Stock formerly represented thereby will have been converted pursuant to this Agreement. Any dividends or other distribution declared after the Effective Time with respect to Parent Common Stock will be paid to the holder of any certificate for shares of INT'L.com Stock when the holder thereof is entitled to receive a certificate for such holder's Parent Merger Shares in accordance with this Agreement. 2.6 NO FRACTIONAL SHARES. No certificates or scrip for fractional shares of Parent Common Stock will be issued, no Parent stock split or dividend will be paid in respect of any fractional share interest, and no such fractional share interest will entitle the owner thereof to vote or to any rights of or as a stockholder of Parent. In lieu of such fractional shares, any holder of Outstanding INT'L.com Shares who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder) will be paid the cash value of such fraction (rounded down to the nearest whole cent), which will be equal to such fraction MULTIPLIED BY the Parent Average Closing Price. 2.7 ASSUMPTION OF STOCK OPTIONS. At the Effective Time, Parent shall assume each Outstanding INT'L.com Option and each holder thereof (each an "OPTION HOLDER") shall thereby be entitled to acquire, by virtue of the Merger and without any action on the part of the Option Holder, on substantially the same terms (including the dates and extent of exercisability) and subject to the same conditions, including vesting, as such Outstanding INT'L.com Option, the number of shares of Parent Common Stock determined by MULTIPLYING the number of shares of INT'L.com Common Stock for which such Outstanding INT'L.com Option is then exercisable in accordance with its terms immediately prior to the Effective Time by the Conversion Ratio (rounded down to the nearest whole share), at an exercise or conversion price per share of Parent Common Stock (rounded up to the nearest whole cent) determined by dividing the exercise price per share of INT'L.com Common Stock of such Outstanding INT'L.com Option immediately prior to the Effective Time by the Conversion Ratio. 2.8 NOTES. The $2,000,000 in convertible promissory notes dated August 20, 1999 of INT'L.com and any interest accrued thereon (the "INT'L.COM NOTES") shall be paid in full and cancelled by delivery of the Convertible Note Payment Shares to the holders thereof in proportion to their respective interests in the INT'L.com Notes. "CONVERTIBLE NOTE PAYMENT SHARES" shall mean a number of shares of Parent Common Stock determined by dividing the aggregate principal amount payable under the INT'L.com Notes plus any interest accrued on the INT'L.com Notes as of the Closing by the Parent Average Closing Price. In lieu of any fractional shares, any holder of an INT'L.com Note who would otherwise be entitled to a fraction of a share of Parent Common Stock -7- (after aggregating all fractional shares of Parent Common Stock to be received by such holder) will be paid the cash value of such fraction (rounded down to the nearest whole cent), which will be equal to such fraction MULTIPLIED BY the Parent Average Closing Price. 2.9 BRIDGE NOTES. The (i) $2,000,000 in subordinated promissory notes of INT'L.com dated January 14, 2000, (ii) $1,000,000 in subordinated promissory notes of INT'L.com dated March 8, 2000 and (iii) up to an additional $2,000,000 in subordinated promissory notes of INT'L.com issued to existing investors of INT'L.com on terms identical to the promissory notes described in clause (ii) and any interest accrued thereon (collectively, the "INT'L.COM BRIDGE NOTES") shall be paid in full and cancelled by delivery of the Bridge Note Payment Shares to the holders thereof in proportion to their respective interests in the INT'L.com Bridge Notes. "BRIDGE NOTE PAYMENT SHARES" shall mean a number of shares of Parent Common Stock determined by dividing the aggregate principal amount payable under the INT'L.com Bridge Notes plus any interest accrued on the INT'L.com Bridge Notes as of the Closing by the Parent Average Closing Price. The Bridge Note Payment Shares along with the Convertible Note Payment Shares herein referred to as the "NOTE PAYMENT SHARES." In lieu of any fractional shares, any holder of an INT'L.com Bridge Note who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock to be received by such holder) will be paid the cash value of such fraction (rounded down to the nearest whole cent), which will be equal to such fraction MULTIPLIED BY the Parent Average Closing Price. ARTICLE III REPRESENTATIONS AND WARRANTIES OF INT'L.COM Except as set forth in the disclosure schedule of INT'L.com dated as of January 19, 2000 (the "PRIOR AGREEMENT DATE") and delivered herewith to Parent (the "INT'L.COM DISCLOSURE SCHEDULE") which identifies the section and subsection to which each disclosure therein relates (PROVIDED, HOWEVER, that INT'L.com will be deemed to have adequately disclosed with respect to any section or subsection any matters that are clearly described elsewhere in such document if the applicability of such disclosure to such non-referenced sections or subsections is apparent), and whether or not the INT'L.com Disclosure Schedule is referred to in a specific section or subsection, INT'L.com represents and warrants to Parent and Merger Sub as follows: 3.1 ORGANIZATION, STANDING AND POWER; SUBSIDIARIES. (a) INT'L.com is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the Business Condition (as hereinafter defined) of INT'L.com. As used in this Agreement, "BUSINESS CONDITION" with respect to any Person (as defined below) means the business, financial condition, results of operations, assets or prospects (as defined below) (without giving effect to the consequences of the transactions contemplated by this Agreement -8- and the announcement thereof, and other than any changes arising out of conditions affecting the economy or industry of the Person in general which does not affect the Person in a materially disproportionate manner relative to other participants in the economy or such industry, respectively) of such Person or Persons including its Subsidiaries taken as a whole. In this Agreement, a "SUBSIDIARY" of any Person means a corporation, partnership, limited liability company, joint venture or other entity of which such Person directly or indirectly owns or controls a majority of the equity interests or voting securities or other interests that are sufficient to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company, joint venture or other entity. In this Agreement, the "Material INT'L.com Subsidiaries" shall mean the following Subsidiaries of INT'L.com: International Communications Europe GmbH; International Language Engineering Corporation; International Communications Asia; and ILE Netherlands BV. In this Agreement, "PROSPECTS" means events, conditions, facts or developments that are known to INT'L.com or any Subsidiary and that in the reasonable course of events are expected to have an effect on future operations of the business as presently conducted by INT'L.com and its Subsidiaries, but will exclude the results of any changes that are made at the specific written direction of Parent, that are specifically contemplated herein, or that directly result from this transaction or the announcement hereof. In this Agreement, "PERSON" means any natural person, corporation, partnership, limited liability company, joint venture or other entity. In this Agreement, "ordinary course of business" means in the ordinary course of business and consistent with past practices. All Subsidiaries of INT'L.com and their jurisdiction of incorporation are completely and correctly listed in Section 3.1 of the INT'L.com Disclosure Schedule. Each Subsidiary is a corporation duly organized and validly existing under the laws of the jurisdiction of its incorporation. INT'L.com has delivered to Parent complete and correct copies of the articles or certificate of incorporation, bylaws and/or other primary charter and organizational documents ("CHARTER DOCUMENTS") of INT'L.com and the Material INT'L.com Subsidiaries, in each case, as amended to the Prior Agreement Date. The minute books and stock records of INT'L.com and its Subsidiaries are complete. Section 3.1 of the INT'L.com Disclosure Schedule contains a complete and correct list of the officers and directors of INT'L.com and any stockholders who beneficially own (as defined in Rule 13d of the Securities Act) 5% or more of the outstanding capital stock of INT'L.com. (b) INT'L.com does not currently own, and has not owned since January 1, 1998, directly or indirectly, any capital stock or other equity securities of any corporation or have direct or indirect equity or ownership interest in any partnership, limited liability company, joint venture or other entity. All of the outstanding shares of capital stock of each Subsidiary of INT'L.com are owned beneficially and of record by INT'L.com, one of its other Subsidiaries, or any combination thereof, in each case free and clear of any security interests, liens, charges, restrictions, claims, encumbrances or assessments of any nature whatsoever ("LIENS"); and there are no outstanding subscriptions, warrants, options, convertible securities, or other rights (contingent or other) pursuant to which any of the Subsidiaries is or may become obligated to issue any shares of its capital stock to any Person other than INT'L.com or one of the other Subsidiaries. 3.2 CAPITAL STRUCTURE. (a) As of January 17, 2000, the authorized capital stock of INT'L.com consisted of (i) 5,472,047 shares of preferred stock, $0.01 par value per share ("INT'L.COM PREFERRED STOCK"), of -9- which 867,047 shares had been designated INT'L.com Series A Preferred Stock, 867,047 of which were issued and outstanding, of which 3,500,000 shares had been designated INT'L.com Series B Preferred Stock, 2,621,477 of which were issued and outstanding, of which 5,000 had been designated INT'L.com Series C Preferred Stock, 5,000 of which were issued and outstanding, and of which 1,100,000 shares had been designated INT'L.com Series D Preferred Stock, 936,991 of which were issued and outstanding; and (ii) 14,527,953 shares of INT'L.com Common Stock, $0.01 par value per share, of which 11,077,953 shares had been designated INT'L.com Series A Common Stock, and 3,450,000 shares had been designated INT'L.com Series B Common Stock, and 5,879,271 shares of Common Stock were issued and outstanding and no shares of INT'L.com Common Stock were issued and held as treasury shares by INT'L.com. The INT'L.com Disclosure Schedule sets forth all holders of INT'L.com Common Stock and INT'L.com Preferred Stock and the number of shares owned. The INT'L.com Disclosure Schedule also sets forth any options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings, restrictions, arrangements or rights of any character (each, an "INT'L.COM OPTION") to which INT'L.com is a party or by which INT'L.com may be bound obligating INT'L.com to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of INT'L.com Common Stock, or obligating INT'L.com to grant, extend, or enter into any such option, warrant, call, conversion right, conversion payment, commitment, agreement, contract, understanding, restriction, arrangement or right. INT'L.com does not have any outstanding options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings, restrictions, arrangements or rights of any character to which INT'L.com is a party or by which INT'L.com may be bound obligating INT'L.com to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of INT'L.com Preferred Stock. (b) All outstanding shares of INT'L.com Common Stock and INT'L.com Preferred Stock are, and any shares of INT'L.com Common Stock issued upon exercise of any Outstanding INT'L.com Options will be, validly issued, fully paid, nonassessable and not subject to any preemptive rights (other than those which have been duly waived), or to any agreement to which INT'L.com is a party or by which INT'L.com may be bound. Except for the INT'L.com Notes, INT'L.com does not have outstanding any bonds, debentures, notes or other indebtedness the holders of which (i) have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of shares of INT'L.com Common Stock on any matter ("INT'L.COM VOTING DEBT") or (ii) are or will become entitled to receive any payment as a result of the execution of this Agreement or the completion of the transactions contemplated hereby. 3.3 AUTHORITY. The execution, delivery and performance of this Agreement, the Prior Agreement and all other agreements contemplated hereby by INT'L.com have been duly authorized by all necessary action of the Board of Directors of INT'L.com, and if the Closing shall occur, shall have been duly authorized by all necessary action of the stockholders of INT'L.com (the "INT'L.COM REQUISITE STOCKHOLDER APPROVAL"). Certified copies of the resolutions adopted by the Board of Directors of INT'L.com and its stockholders approving this Agreement, the Prior Agreement, all other agreements contemplated hereby and the Merger have been or will be provided to Parent prior to the Closing. INT'L.com has duly and validly executed and delivered this Agreement and has, or prior to Closing, will have duly and validly executed and delivered all other agreements contemplated hereby to be executed by INT'L.com, and each of this Agreement and such other agreements constitutes or upon execution and delivery at or prior to the Closing will constitute a valid, binding and enforceable obligation of INT'L.com in accordance with its terms. -10- 3.4 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS; NON-CONTRAVENTION. INT'L.com and its Subsidiaries hold, and at all times have held or subsequently obtained, all licenses, permits and authorizations from all Governmental Entities (as defined below) necessary for the lawful conduct of their respective businesses pursuant to all applicable statutes, laws, ordinances, rules and regulations of all such Governmental Entities having jurisdiction over them or any part of their operations. There are no material violations or claimed violations known by INT'L.com or any Subsidiary of any such license, permit or authorization or any such statute, law, ordinance, rule or regulation. Assuming the receipt of all Consents (as defined below), neither the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by INT'L.com, nor the consummation of the Merger or any other transaction described herein, does or will, after the giving of notice, or the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under, the Charter Documents of INT'L.com or any Material INT'L.com Subsidiary or any federal, foreign, state or local court or administrative order or process, statute, law, ordinance, rule or regulation, or any contract, agreement or commitment to which INT'L.com or any Material INT'L.com Subsidiary is a party, or under which INT'L.com or any Material INT'L.com Subsidiary is obligated, or by which INT'L.com or any Material INT'L.com Subsidiary or any of the rights, properties or assets of INT'L.com are subject or bound; result in the creation of any Lien upon, or otherwise adversely affect, any of the rights, properties or assets of INT'L.com or any Material INT'L.com Subsidiary; terminate, amend or modify, or give any party the right to terminate, amend, modify, abandon or refuse to perform or comply with, any contract, agreement or commitment to which INT'L.com or any Material INT'L.com Subsidiary is a party, or under which INT'L.com or any Material INT'L.com Subsidiary is obligated, or by which INT'L.com or any of the rights, properties or assets of INT'L.com or any Material INT'L.com Subsidiary are subject or bound; or accelerate, postpone or modify, or give any party the right to accelerate, postpone or modify, the time within which, or the terms and conditions under which, any liabilities, duties or obligations are to be satisfied or performed, or any rights or benefits are to be received, under any contract, agreement or commitment to which INT'L.com or any Material INT'L.com Subsidiary is a party, or under which INT'L.com or any Material INT'L.com Subsidiary may be obligated, or by which INT'L.com or any Material INT'L.com Subsidiary or any of the rights, properties or assets of INT'L.com or any Material INT'L.com Subsidiary are subject or bound. Section 3.4 of the INT'L.com Disclosure Schedule sets forth each agreement, contract or other instrument binding upon INT'L.com requiring a notice or consent (by its terms or as a result of any conflict or other contravention required to be disclosed in the INT'L.com Disclosure Schedule pursuant to the preceding provisions of this Section 3.4) as a result of the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by INT'L.com or the consummation of the Merger or any other transaction described herein (each such notice or consent, a "CONSENT"). No consent, approval, order, or authorization of or registration, declaration, or filing with or exemption (also a "CONSENT") by, any court, administrative agency or commission or other governmental authority or instrumentality, whether domestic or foreign (each a "GOVERNMENTAL ENTITY") is required by or on behalf of INT'L.com or any Material INT'L.com Subsidiary in connection with the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by INT'L.com or the consummation of the Merger or any other transaction described herein, except for the filing by INT'L.com and Merger Sub of the appropriate Merger Documents with the Secretary of State of Delaware. -11- 3.5 TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS. (a) For the purposes of this Agreement, "INT'L.COM INTELLECTUAL PROPERTY" consists of the following intellectual property: (i) all patents, trademarks, trade names, service marks, trade dress, copyrights and any renewal rights therefor, mask works, schematics, software, firmware, technology, manufacturing processes, supplier lists, customer lists, trade secrets, know-how, moral rights and applications and registrations for any of the foregoing; (ii) all documents, records and files relating to design, end user documentation, manufacturing, quality control, sales, marketing or customer support for all intellectual property described herein; (iii) all other tangible or intangible proprietary information and materials; and (iv) all license and other rights in any third party product or any third party intellectual property described in (i) through (iii) above; that are owned or held by or on behalf of INT'L.com or any Material INT'L.com Subsidiary or that are being used, and/or have been used since January 1, 1999, or are currently under development by or for INT'L.com or any Material INT'L.com Subsidiary for use, in the business of INT'L.com or any Material INT'L.com subsidiary as it has been, is currently or is currently planned to be conducted in 2000; PROVIDED, HOWEVER, that the term INT'L.com Intellectual Property does not include any commercially available third party software or related intellectual property. (b) Section 3.5 of the INT'L.com Disclosure Schedule lists: (i) all patents, copyright registrations, mask works, registered trademarks, registered service marks, trade dress, any renewal rights for any of the foregoing, and any applications and registrations for any of the foregoing, that are included in INT'L.com Intellectual Property and owned by or on behalf of INT'L.com or any Material INT'L.com Subsidiary; (ii) all hardware products and tools, software products and tools and services that are currently published, offered, or under development by INT'L.com or any Material INT'L.com Subsidiary; and (iii) all licenses, sublicenses and other agreements to which INT'L.com is a party and pursuant to which INT'L.com or any Material INT'L.com Subsidiary or any other person is authorized to use any INT'L.com Intellectual Property or exercise any other right with regard thereto. (c) INT'L.com Intellectual Property consists solely of items and rights that are either: (i) owned solely by INT'L.com; (ii) in the public domain; or (iii) rightfully used and authorized for use by INT'L.com pursuant to a valid license. All INT'L.com Intellectual Property that consists of license or other rights to third party property is separately set forth in Section 3.5 of the INT'L.com Disclosure Schedule. INT'L.com has all rights in INT'L.com Intellectual Property necessary to carry out INT'L.com's, and each of its Subsidiaries', current activities, their activities conducted by them since January 1, 1999 and their future activities planned for 2000, including without limitation rights to make, use, exclude others from using, reproduce, modify, adapt, create derivative works based on, translate, distribute (directly and indirectly), transmit, display and perform publicly, license, rent, lease, -12- assign and sell INT'L.com Intellectual Property in all geographic locations and fields of use, and to sublicense any or all such rights to third parties, including the right to grant further sublicenses. (d) Assuming the receipt of all Consents, INT'L.com is not, nor as a result of the execution or delivery of this Agreement and all other agreements contemplated hereby, or performance of INT'L.com's obligations hereunder or the consummation of the Merger, will INT'L.com be, in violation of any license, sublicense or other agreement relating to any INT'L.com Intellectual Property to which INT'L.com is a party or otherwise bound. INT'L.com is not obligated to provide any consideration (whether financial or otherwise) to any third party, nor is any third party otherwise entitled to any consideration, with respect to any exercise of rights by INT'L.com or the Surviving Corporation, as successor to INT'L.com, in INT'L.com Intellectual Property. (e) To the knowledge of INT'L.com or any of the Material INT'L.com Subsidiaries, the use, reproduction, modification, distribution, licensing, sublicensing, sale, or any other exercise of rights in any product, work, technology, service or process as used, provided, or offered at any time, or as proposed for use, reproduction, modification, distribution, licensing, sublicensing, sale, or any other exercise of rights, by INT'L.com or any Material INT'L.com Subsidiary does not infringe any copyright, patent, trade secret, trademark, service mark, trade name, firm name, logo, trade dress, mask work, moral right, other intellectual property right, right of privacy, or right in personal data of any Person. No claims (i) challenging the validity, effectiveness, or ownership by INT'L.com or any Material INT'L.com Subsidiary of any INT'L.com Intellectual Property, or (ii) to the effect that the use, reproduction, modification, manufacturing, distribution, licensing, sublicensing, sale, or any other exercise of rights in any product, work, technology, service, or process as used, provided or offered at any time, or as proposed for use, reproduction, modification, distribution, licensing, sublicensing, sale, or any other exercise of rights, by INT'L.com or any Material INT'L.com Subsidiary infringes or will infringe on any intellectual property or other proprietary or personal right of any Person have been asserted to INT'L.com or any Material INT'L.com Subsidiary in writing by any Person. Neither INT'L.com nor any Subsidiary has received notice of any legal or governmental proceedings, including interference, re-examination, reissue, opposition, nullity, or cancellation proceedings pending that relate to any INT'L.com Intellectual Property, other than any review of pending applications for patent. Neither INT'L.com nor any Subsidiary is aware of any information indicating that any such proceedings are threatened or contemplated by any Governmental Entity or any other Person. All granted or issued patents and mask works and all registered trademarks and copyright registrations owned by INT'L.com are valid, enforceable and subsisting. To the knowledge of INT'L.com, there is no unauthorized use, infringement, or misappropriation of any INT'L.com Intellectual Property by any third party, employee or former employee. (f) INT'L.com and its Subsidiaries has secured from all parties who have created any portion of, or otherwise have any rights in or to, INT'L.com Intellectual Property, valid and enforceable written assignments of any such work or other rights to INT'L.com. (g) Each consultant and subcontractor of INT'L.com and its Subsidiaries has entered into a confidentiality and assignment of inventions agreement substantially in the form attached to Section 3.5 of the INT'L.com Disclosure Schedule. -13- 3.6 FINANCIAL STATEMENTS; BUSINESS INFORMATION. (a) INT'L.com has delivered to Parent audited consolidated balance sheets (the "BALANCE SHEETS") as of December 31, 1999 (the "BALANCE SHEET Date") and December 31, 1998, and audited consolidated statements of income and cash flows for the years ended December 31, 1999, December 31, 1998 and December 31, 1997 (all of such balance sheets and statements of income and cash flows are collectively referred to as the "FINANCIAL STATEMENTS"). The Financial Statements: (i) are in accordance with the books and records of INT'L.com; (ii) present fairly, in all material respects, the financial position of INT'L.com as of the date indicated and the results of its operations and cash flows for such periods; and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied (subject, in the case of unaudited statements, to the absence of footnote disclosure and in the case of unaudited interim statements to year-end adjustments, which will not be material either individually or in the aggregate and except as described in the Section 3.6 of the INT'L.com Disclosure Schedule). As of the Balance Sheet Date, there were no material liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise, whether due or to become due, that are not shown or provided for either in the Balance Sheets or Section 3.6 of the INT'L.com Disclosure Schedule, and since the Balance Sheet Date, INT'L.com has incurred no liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise other than in the ordinary course of business and except for liabilities incurred by INT'L.com in connection with the preparation and execution of this Agreement and the consummation of the transactions contemplated herein. (b) All of the accounts, notes and other receivables which are reflected in the Balance Sheets were acquired in the ordinary course of business; and, except to the extent reserved against in the Balance Sheets, all of the accounts, notes and other receivables which are reflected therein have been collected in full, or, to the knowledge of INT'L.com or any Subsidiary, are valid, binding and enforceable in accordance with their terms in the ordinary course of business, and arise from bona fide transactions, and neither INT'L.com nor any Subsidiary has received notice that the same are subject to counterclaims, refusals to pay or other rights of setoff. All of the accounts, notes and other receivables which have been acquired by INT'L.com or any Subsidiary since the Balance Sheet Date were acquired in the ordinary course of business and have been collected in full, or to the knowledge of INT'L.com or any Subsidiary, are valid, binding and enforceable in accordance with their terms in the ordinary course of business, and arise from bona fide transactions, and neither INT'L.com nor any Subsidiary has received notice that the same are subject to counterclaims, refusals to pay or other rights of setoff, subject to an appropriate reserve. No accounts, notes or other receivables are contingent upon the performance by INT'L.com or any Subsidiary of any obligation or contract. No Person has any Lien on any of such receivables and no agreement for deduction or discount has been made with respect thereto. (c) The business information previously prepared by INT'L.com and delivered to Parent was prepared in good faith, based on assumptions INT'L.com deemed, as of the date such information was delivered to Parent, to be reasonable, and was prepared for planning purposes, although no assurances are given that INT'L.com can or will engage in the activities described therein or achieve the results projected therein. -14- 3.7 TAXES. (a) The term "TAXES" as used herein means all federal, state, local and foreign income tax, alternative or add-on minimum tax, estimated, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, capital profits, lease, service, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit taxes, customs, duties and other taxes, governmental fees and other like assessments and charges of any kind whatsoever, together with all interest, penalties, additions to tax and additional amounts with respect thereto, and the term "TAX" means any one of the foregoing Taxes. The term "TAX RETURNS" as used herein means all returns, declarations, reports, claims for refund, information statements and other documents relating to Taxes, including all schedules and attachments thereto, and including all amendments thereof, and the term "TAX RETURN" means any one of the foregoing Tax Returns. (b) INT'L.com and each of its Subsidiaries has timely filed all Tax Returns required to be filed and has paid all Taxes owed (whether or not shown as due on such Tax Returns), including, without limitation, all Taxes which INT'L.com or such Subsidiary is obligated to withhold for amounts owing to employees, creditors and third parties. All Tax Returns filed by INT'L.com and each of its Subsidiaries were complete and correct in all respects, and such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status and other matters of INT'L.com and each of its Subsidiaries and any other information required to be shown thereon. None of the Tax Returns filed by INT'L.com or any of its Subsidiaries or Taxes payable by INT'L.com or any of its Subsidiaries have been the subject of an audit, action, suit, proceeding, claim, examination, deficiency or assessment by any Governmental Entity, and no such audit, action, suit, proceeding, claim, examination, deficiency or assessment is currently pending or, to the knowledge of INT'L.com or any of its Subsidiaries, threatened. Neither INT'L.com nor any Subsidiary is currently the beneficiary of any extension of time within which to file any Tax Return, and neither INT'L.com nor any Subsidiary has waived any statute of limitation with respect to any Tax or agreed to any extension of time with respect to a Tax assessment or deficiency. All material elections with respect to Taxes affecting INT'L.com or any Subsidiary, as of the Prior Agreement Date, are set forth in the Financial Statements or in Section 3.7 of the INT'L.com Disclosure Schedule. None of the Tax Returns filed by INT'L.com or any Subsidiary contain a disclosure statement under former Section 6661 of the Code or Section 6662 of the Code (or any similar provision of state, local or foreign Tax law). Neither INT'L.com nor any Subsidiary is a party to any Tax sharing agreement or similar arrangement. Neither INT'L.com nor any Subsidiary has ever been a member of a group filing a consolidated federal income Tax Return (other than a group the common parent of which was INT'L.com), and neither INT'L.com nor any Subsidiary has any liability for the Taxes of any Person (other than INT'L.com) under Treasury Regulation Section 1.1502-6 (or any corresponding provision of state, local or foreign Tax law), as a transferee or successor, by contract, or otherwise. (c) Neither INT'L.com nor any Subsidiary is a party to any agreement, contract, arrangement or plan that has resulted or would result, separately or in the aggregate, in the payment of (i) any "excess parachute payments" within the meaning of Section 280G of the Code (without regard to the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii) any amount for which a deduction would be disallowed or deferred under Section 162 or Section 404 of the Code. Neither INT'L.com nor any Subsidiary has agreed to make any adjustment under Section 481(a) of the -15- Code (or any corresponding provision of state, local or foreign law) by reason of a change in accounting method or otherwise, and INT'L.com will not be required to make any such adjustment as a result of the transactions set forth in this Agreement. Neither INT'L.com nor any Subsidiary has or has had a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country. No portion of the Parent Merger Shares is subject to the Tax withholding provisions of Section 3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any other provision of law. None of the assets of INT'L.com or any Subsidiary is property which is required to be treated as being owned by any other Person pursuant to the so-called "safe harbor lease" provisions of former Section 168(f)(8) of the Code. None of the assets of INT'L.com or any Subsidiary directly or indirectly secures any debt, the interest on which is tax exempt under Section 103(a) of the Code. None of the assets of INT'L.com or any Subsidiary is "tax-exempt use property" within the meaning of Section 168(h) of the Code. No claim has ever been made by any Governmental Entity in a jurisdiction where INT'L.com or any Subsidiary does not file Tax Returns that it is or may be subject to Tax in that jurisdiction. Neither INT'L.com nor any Subsidiary has participated in an international boycott as defined in Section 999 of the Code. None of the shares of outstanding capital stock of INT'L.com or any Subsidiary are subject to a "substantial risk of forfeiture" within the meaning of Section 83 of the Code. (d) There are no liens for Taxes (other than for ad valorem Taxes not yet due and payable) upon the assets of INT'L.com or any Subsidiary. The unpaid Taxes of INT'L.com and its Subsidiaries did not, as of the Balance Sheet Date, exceed the reserve for actual Taxes (as opposed to any reserve for deferred Taxes established to reflect timing differences between book and Tax income) as shown on the Balance Sheets, and will not exceed such reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of INT'L.com and its Subsidiaries in filing their Tax Returns (taking into account any Taxes incurred as a result of the transactions contemplated by this Agreement). Section 3.7 of the INT'L.com Disclosure Schedule sets forth INT'L.com's and each Subsidiary's Tax basis in each of their respective assets. Neither INT'L.com nor any Subsidiary is a party to any joint venture, partnership, limited liability company or other arrangement or contract which could be treated as a partnership for federal income tax purposes. 3.8 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except for liabilities incurred in connection with this Agreement and the transactions contemplated hereby, from the Balance Sheet Date, there has not been: (a) Any transaction involving more than $50,000 entered into by INT'L.com or any Subsidiary other than in the ordinary course of business; any change (or any development or combination of developments of which INT'L.com or any Subsidiary has knowledge which is reasonably likely to result in such a change) in INT'L.com's Business Condition, other than changes in the ordinary course of business which in the aggregate have not been and are not expected to be materially adverse to INT'L.com's Business Condition; or, without limiting the foregoing, any loss of or damage to any of the properties of INT'L.com or any Subsidiary due to fire or other casualty or other loss, whether or not insured, amounting to more than $50,000 in the aggregate; (b) Any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of INT'L.com or any Subsidiary, or any repurchase, redemption, retirement or other acquisition by INT'L.com or any Subsidiary of any outstanding shares of capital -16- stock, any INT'L.com Option, or other securities of, or other equity or ownership interests in, INT'L.com or any Subsidiary; (c) Any discharge or satisfaction of any Lien or payment or satisfaction of any obligation or liability (whether absolute, accrued, contingent or otherwise and whether due or to become due) other than current liabilities shown on the Balance Sheets and current liabilities incurred since the Balance Sheet Date in the ordinary course of business; (d) Any amendment of any term of any outstanding security of INT'L.com; (e) Any incurrence, assumption or guarantee by INT'L.com or any Subsidiary of any indebtedness for borrowed money other than in the ordinary course of business and in an aggregate amount exceeding $50,000; (f) Any creation or assumption by INT'L.com or any Subsidiary of any Lien on any asset in an aggregate amount exceeding $20,000; (g) Any making of any loan, advance or capital contributions to, or investment in, any Person by INT'L.com or any Subsidiary; (h) Any sale, lease, pledge, transfer or other disposition of any material capital asset; (i) Any material transaction or commitment made, or any material contract or agreement entered into, by INT'L.com or any Subsidiary relating to its assets or business (including the acquisition or disposition of any assets) with a value of $100,000 or more or any relinquishment by INT'L.com or any Subsidiary of any contract or other right with a value of $100,000 or more; (j) Any (A) grant of any severance or termination pay to any director, officer or employee of INT'L.com or any Subsidiary, (B) entering into of any employment, severance, management, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of INT'L.com or any Subsidiary, (C) change in benefits payable under existing severance or termination pay policies or employment, severance, management, consulting or other similar agreements, (D) change in compensation, bonus or other benefits payable to directors, officers or employees of INT'L.com or any Subsidiary in excess of 7% or (E) change in the payment or accrual policy with respect to any of the foregoing; (k) Any labor dispute or any activity or proceeding by a labor union or representative thereof to organize any employees of INT'L.com or any Material INT'L.com Subsidiary, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to any employees of INT'L.com or any Material INT'L.com Subsidiary; (l) Any issuance or sale of any stock, bonds, phantom stock interest or other securities of which INT'L.com or any Subsidiary is the issuer, or the grant, issuance or change of any stock options, warrants, or other rights to purchase securities of INT'L.com or any Subsidiary or phantom stock interest in INT'L.com or any Subsidiary other than issuances of common stock in connection with exercises of employee stock options; -17- (m) Any cancellation of any debts or claims or waiver of any rights in an aggregate amount exceeding reserves in the Financial Statements by $50,000 or more; (n) Any sale, assignment or transfer of any INT'L.com Intellectual Property, including licenses therefor; (o) Any capital expenditures, or commitment to make any capital expenditures, for additions to property, plant or equipment in an aggregate amount exceeding $50,000; or (p) Any agreement undertaking or commitment to do any of the foregoing. 3.9 LEASES IN EFFECT. All real property leases and subleases as to which INT'L.com or any Subsidiary is a party and any amendments or modifications thereof are listed in Section 3.9 of the INT'L.com Disclosure Schedule (each a "LEASE" and collectively, the "LEASES") and are valid, in full force and effect and enforceable, and there are no existing defaults on the part of INT'L.com or any Subsidiary, and neither INT'L.com nor any Subsidiary has received or given notice of default or claimed default with respect to any Lease, nor is there any event that with notice or lapse of time, or both, would constitute a default on the part of INT'L.com or any Subsidiary, or, to the knowledge of INT'L.com and its Subsidiaries, any other party thereunder. 3.10 PERSONAL PROPERTY; REAL ESTATE. (a) INT'L.com has good and marketable title, free and clear of all title defects and Liens (including, without limitation, leases, chattel mortgages, conditional sale contracts, purchase money security interests, collateral security arrangements and other title or interest-retaining agreements) to all inventory, receivables, furniture, machinery, equipment and other personal property, tangible or otherwise, reflected on the Balance Sheets or used in INT'L.com's business, except for acquisitions and dispositions since the Balance Sheet Date in the ordinary course of business. The INT'L.com Disclosure Schedule lists (i) all computer equipment and (ii) all other personal property, in each case having a depreciated book value of $10,000 or more, which are used by INT'L.com or any Subsidiary in the conduct of its business, and all such equipment and property, in the aggregate, is in good operating condition and repair, reasonable wear and tear excepted. There is no asset used or required by INT'L.com in the conduct of its business as presently operated which is not either owned by it or licensed or leased to it. (b) Section 3.10 of the INT'L.com Disclosure Schedule contains a schedule setting forth all real property which is owned or leased by INT'L.com or any Subsidiary, or in which INT'L.com or any Subsidiary has any other right, title or interest. Neither INT'L.com nor any Subsidiary owns any real property. True and complete copies of each lease have been provided to Parent, and such leases constitute the entire understanding relating to INT'L.com's or any Subsidiary's use and occupancy of the leased premises. (c) INT'L.com and each Subsidiary has obtained consents for all alterations made as of the Prior Agreement Date to each leased premise described in Section 3.10 of the INT'L Disclosure Schedule and, upon the expiration or earlier termination of the lease or sublease with respect thereto, shall not be obligated to remove any such alterations or restore the premises to the condition they were in prior to the time such alterations were undertaken, except for removal or restoration obligations -18- which individually or in the aggregate do not exceed $25,000. To the knowledge of INT'L.com and its Subsidiaries, the improvements located on the real property described in Section 3.10 of the INT'L.com Disclosure Schedule are not the subject of and neither INT'L.com nor any Subsidiary has received written notice of any official complaint or of a violation of any applicable zoning ordinance or building code. There is no condemnation proceeding pending or, to the knowledge of INT'L.com and its Subsidiaries, threatened against INT'L.com or any Subsidiary and to the knowledge of INT'L.com and its Subsidiaries there are no use or occupancy restrictions on the real property described in Section 3.10 of the INT'L.com Disclosure Schedule. 3.11 CERTAIN TRANSACTIONS. Except for (a) relationships with INT'L.com or any Subsidiary as an officer, director, or employee thereof (and compensation by INT'L.com or any Subsidiary in consideration of such services) and (b) relationships with INT'L.com as security holders therein, none of the directors, officers, or stockholders of INT'L.com, or any member of any of their families, is presently a party to, or was a party to during the year preceding the Prior Agreement Date, any transaction, or series of similar transactions, with INT'L.com or any Subsidiary, in which the amount involved exceeds $60,000, including, without limitation, any contract, agreement, or other arrangement (i) providing for the furnishing of services to or by, (ii) providing for rental of real or personal property to or from, or (iii) otherwise requiring payments to or from, any such Person or any other Person in which any such Person has or had a 5%-or-more interest (as a stockholder, partner, beneficiary, or otherwise) or is or was a director, officer, employee, or trustee, but excluding any transaction pursuant to existing employee benefit plans. None of INT'L.com's officers or directors has any interest in any property, real or personal, tangible or intangible, including inventions, copyrights, trademarks, or trade names, used in or pertaining to the business of INT'L.com or the Material INT'L.com Subsidiaries, or, to the knowledge of INT'L.com, any material supplier, distributor, or customer of INT'L.com or the Material INT'L.com Subsidiaries, except for the normal rights of a securityholder, and except for rights under existing employee benefit plans. 3.12 LITIGATION AND OTHER PROCEEDINGS. There is no action, suit, claim, proceeding, or to the knowledge of INT'L.com or any Subsidiary, investigation pending against or, to the knowledge of INT'L.com or any Subsidiary, threatened against INT'L.com or any Subsidiary or any of their respective properties and assets before any court or arbitrator or any Governmental Entity. Neither INT'L.com nor any Subsidiary is subject to any order, writ, judgment, decree, or injunction. 3.13 NO DEFAULTS. INT'L.com and the Material INT'L.com Subsidiaries are not, nor has INT'L.com or any Material INT'L.com Subsidiary received notice that it would be with the passage of time, in default or violation of any term, condition, or provision of (i) its Charter Documents; (ii) any judgment, decree, or order applicable to INT'L.com or any Material INT'L.com Subsidiary; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license, or other instrument to which INT'L.com or any Material INT'L.com Subsidiary is now a party or by which it or any of its properties or assets may be bound, except for defaults and violations which have been validly waived, or which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of INT'L.com. -19- 3.14 MAJOR CONTRACTS. Neither INT'L.com nor any Material INT'L.com Subsidiary is a party to or subject to: (a) Any union contract, or any employment contract or arrangement in effect (other than "at-will" employment arrangements) providing for future compensation, written or oral, with any officer, consultant, director, or employee; (b) Any plan or contract or arrangement, written or oral, providing for non-standard bonuses, pensions, deferred compensation, retirement payments, profit-sharing or the like; (c) Any joint venture contract or arrangement or any other agreement which has involved or is expected to involve a sharing of profits; (d) Any OEM agreement, reseller or distribution agreement, volume purchase agreement, corporate end user sales or service agreement, reproduction or replication agreement or manufacturing agreement in which the amount involved exceeds annually, or is expected to exceed in the aggregate over the life of the contract, $50,000 or pursuant to which INT'L.com has granted or received manufacturing rights, most favored nation pricing provisions, or exclusive marketing, production, publishing or distribution rights related to any product, group of products or territory; (e) Any agreement, license, franchise, permit, indenture, or authorization which has not been terminated or performed in its entirety and not renewed which may be, by its terms, terminated, impaired, or adversely affected by reason of the execution of this Agreement and all other agreements contemplated hereby, the consummation of the Merger, or the consummation of the transactions contemplated hereby or thereby; (f) Except for trade indebtedness incurred in the ordinary course of business, any instrument evidencing or related in any way to indebtedness incurred in the acquisition of companies or other entities or indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise which individually is in the amount of $50,000 or more; (g) Any license agreement in effect, either as licensor or licensee (excluding nonexclusive hardware and software licenses granted to distributors or end-users and commercially available in-licensed software applications); (h) Any contract or agreement containing covenants purporting to limit INT'L.com's or the Material INT'L.com Subsidiaries' freedom to compete in any line of business in any geographic area; or (i) Any contract or agreement not elsewhere specifically disclosed pursuant to this Agreement, involving the payment or receipt by INT'L.com of more than $250,000 in the aggregate. For purposes of this Section 3.14, a contract, agreement or arrangement shall be considered "in effect" if INT'L.com or any Material Subsidiary shall have any obligations or liabilities pursuant to such contract, agreement or arrangement. -20- All contracts, arrangements, plans, agreements, leases, licenses, franchises, permits, indentures, authorizations, instruments and other commitments which are listed in the INT'L.com Disclosure Schedule pursuant to this Section 3.14 are valid and in full force and effect and neither INT'L.com nor any Material INT'L.com Subsidiary has, nor, to the knowledge of INT'L.com and the Material INT'L.com Subsidiaries, has any other party thereto, breached any material provisions of, or entered into default in any material respect under the terms thereof. INT'L.com has delivered to Parent copies of the contracts or agreements, and descriptions of any verbal agreements or arrangements, referred to in this Section 3.14 as in effect on the Prior Agreement Date. 3.15 MATERIAL REDUCTIONS. None of the parties to any of the contracts identified in the INT'L.com Disclosure Schedule pursuant to Section 3.14 have terminated, or in any way expressed in writing to INT'L.com or any Subsidiary an intent to reduce or terminate the amount of its business with INT'L.com or any Subsidiary in the future. 3.16 INSURANCE AND BANKING FACILITIES. Section 3.16 of the INT'L.com Disclosure Schedule contains a complete and correct list of (i) all contracts of insurance or indemnity of INT'L.com in force at the Prior Agreement Date (including name of insurer or indemnitor, agent, annual premium, coverage, deductible amounts and expiration date) and (ii) the names and locations of all banks in which INT'L.com has accounts or safe deposit boxes, the designation of each such account and safe deposit box, and the names of all persons authorized to draw on or have access to each such account and safe deposit box. All premiums and other payments due from INT'L.com with respect to any such contracts of insurance or indemnity have been paid, and neither INT'L.com nor any Material INT'L.com Subsidiary knows of any fact, act, or failure to act which has or could reasonably be expected to cause any such contract to be canceled or terminated. All known claims for insurance or indemnity have been presented or are described in Section 3.16 of the INT'L.com Disclosure Schedule. 3.17 EMPLOYEES. The INT'L.com Disclosure Schedule sets forth a list as of January 12, 2000 of (a) the names, titles, annual salaries and all bonuses of all salaried employees of INT'L.com and its Subsidiaries (such term meaning permanent and temporary, full-time and part-time employees) and (b) the wage rates for non-salaried employees of INT'L.com and its Subsidiaries. Any persons engaged by INT'L.com as independent contractors, rather than employees, have been properly classified as such and have been so engaged in accordance with all applicable federal, foreign, state or local laws. No employee that INT'L.com or any Material INT'L.com Subsidiary wishes to retain has stated to INT'L.com or any Material INT'L.com Subsidiary that such employee intends to resign or retire as a result of the transactions contemplated by this Agreement or otherwise within six months after the Closing Date. Hours worked by and payments made to employees of INT'L.com and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal, foreign, state or local laws dealing with such matters. Neither INT'L.com nor any Subsidiary is engaged in any dispute or litigation with an employee or former employee regarding matters pertaining to intellectual property or assignment of inventions. Neither INT'L.com nor any Subsidiary, to the knowledge of INT'L.com and its Subsidiaries, is subject to a union organizing effort. Neither INT'L.com nor any Subsidiary has any written contract of employment or other employment, severance or similar agreement with any of its employees or any established policy or practice relating thereto, and all of its employees are employees-at-will. Neither INT'L.com nor any Subsidiary is a party to any pending, or to the knowledge of INT'L.com and its Subsidiaries, threatened, labor dispute. INT'L.com and its -21- Subsidiaries have complied in all material respects with all applicable foreign, federal, state and local laws, ordinances, rules and regulations and requirements relating to the employment of labor, including but not limited to the provisions thereof relating to wages, hours, collective bargaining and ensuring equality of opportunity for employment. There are no claims pending, or, to the knowledge of INT'L.com and its Subsidiaries, threatened to be brought, in any court or administrative agency by any former or current employees of INT'L.com and its Subsidiaries for compensation, pending severance benefits, vacation time, vacation pay or pension benefits, or any other claim pending, or, to the knowledge of INT'L.com and its Subsidiaries, threatened in any court or administrative agency from any current or former employee or any other Person arising out of INT'L.com's or its Subsidiary's status as employer, whether in the form of claims for employment discrimination, harassment, unfair labor practices, grievances, wrongful discharge, or otherwise. 3.18 EMPLOYEE BENEFIT PLANS. Each Plan (as defined below) covering active, former, or retired employees of INT'L.com or any Subsidiary is listed in Section 3.18 of the INT'L.com Disclosure Schedule. "PLAN" means any employee benefit plan as defined in ERISA (as defined below), maintained or contributed to by INT'L.com or any of its Subsidiaries within the past six years, and also includes any employment, severance or similar contract, arrangement or policy and each plan or arrangement providing for insurance coverage (including any self-insured arrangements), workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, pension or retirement benefits or for deferred compensation, profit-sharing, bonuses, phantom stock, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits in existence within the past three years or for which there is an unsatisfied liability. INT'L.com has made available to Parent a copy (or description if no document exists) of each Plan, and where applicable, any related trust agreement, annuity, or insurance contract. All annual reports (Form 5500) required to be filed with the Internal Revenue Service have been properly filed on a timely basis, and INT'L.com has provided copies of the three most recently filed Forms 5500 for each applicable Plan. Any Plan intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified or, if no such determination letter has been received, the form of such Plan complies with the Code's requirements for qualification, except those requirements for which the remedial amendment period has not expired, and no event has occurred which is reasonably likely to threaten the tax-exempt status of such Plan or any trust for such Plan. No Plan is covered by Title IV of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 412 of the Code. No "prohibited transaction," as defined in ERISA Section 406 or Code Section 4975 has occurred with respect to any Plan, unless such a transaction was exempt from such rules or would not give rise to a material tax or penalty. Each Plan has been maintained and administered in material compliance with its terms and with the requirements prescribed by any and all statutes, including but not limited to ERISA and the Code, which are applicable to such Plans. There are no pending or, to the knowledge of INT'L.com and its Subsidiaries, anticipated claims against or otherwise involving any of the Plans and no suit, action, or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) is currently pending against or with respect to any Plan for which there is an unsatisfied liability. All contributions, reserves, or premium payments to the Plan accrued to the Prior Agreement Date have been made or provided for in accordance with prior funding and accrual practices. Within the six year period preceding the Closing Date, neither INT'L.com nor any Subsidiary, nor any entity which is considered one employer with INT'L.com or any Subsidiary under Section 414 of the Code or Section 4001 of ERISA has ever maintained or contributed to or incurred liability with respect to any Plan -22- subject to Title IV of ERISA or any "multi-employer plan" within the meaning of Section 4001(a)(3) of ERISA, and neither INT'L.com nor any Subsidiary expects to incur any such liability. There are no restrictions on the rights of INT'L.com or any Subsidiary to amend or terminate any Plan, subject to any applicable notice requirements without incurring any liability thereunder other than for benefits accrued prior to the date of termination or amendment. Neither INT'L.com nor any Subsidiary has engaged in and, to the knowledge of INT'L.com and its Subsidiaries, it is not a successor or parent corporation to an entity that has engaged in a transaction described in ERISA Section 4069. There have been no written interpretations of, or announcements (whether or not written) by INT'L.com or any Subsidiary relating to, or change in employee participation or coverage under, any Plan that would increase the expense of maintaining such Plan above the level of the expense incurred in respect thereof for the fiscal year ended prior to the Prior Agreement Date. Neither INT'L.com nor any of its ERISA affiliates has any liability in respect of post-employment or post-retirement welfare benefits for retired employees of INT'L.com or any Subsidiary. Neither INT'L.com nor any Material INT'L.com Subsidiary nor any of their ERISA Affiliates has any liability with respect to welfare benefits for former employees other than health care continuation benefits required to be provided under applicable law or which do not exceed three months in duration. No tax under Section 4980B or 4980D of the Code has been incurred in respect of any Plan that is a group health plan, as defined in Section 5000(b)(1) of the Code. 3.19 CERTAIN AGREEMENTS. Except as contemplated by this Agreement, neither the execution and delivery of this Agreement and all other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby will: (i) result in any payment by INT'L.com or any Subsidiary (including, without limitation, severance, unemployment compensation, parachute payment, bonus or otherwise) becoming due to any director, employee, or independent contractor of INT'L.com or any Subsidiary under any Plan, agreement, or otherwise, (ii) increase any benefits otherwise payable under any Plan or agreement or (iii) result in the acceleration of the time of payment or vesting of any such benefits. 3.20 GUARANTEES AND SURETYSHIPS. INT'L.com and its Subsidiaries have no powers of attorney outstanding (other than those issued in the ordinary course of business with respect to Tax matters), and INT'L.com and its Subsidiaries have no material obligations or liabilities (absolute or contingent) as guarantor, surety, cosigner, endorser, co-maker, indemnitor, or otherwise respecting the obligations or liabilities of any Person. 3.21 BROKERS AND FINDERS. INT'L.com has not retained any broker, finder, or investment banker in connection with this Agreement or any of the transactions contemplated by this Agreement, nor does or will INT'L.com or any Subsidiary owe any fee or other amount to any broker, finder, or investment banker in connection with this Agreement or the transactions contemplated by this Agreement. 3.22 CERTAIN PAYMENTS. Neither INT'L.com nor any Subsidiary, nor to the knowledge of INT'L.com and its Subsidiaries, any Person acting on behalf of INT'L.com or any Subsidiary has, directly or indirectly, on behalf of or with respect to INT'L.com or any Subsidiary: (i) made an unreported political contribution, (ii) made or received any payment which was not legal to make or receive, (iii) engaged in any material transaction or made or received any material payment which was not properly recorded on the books of INT'L.com and its Subsidiaries, (iv) created or used any "off- -23- book" bank or cash account or "slush fund," or (v) engaged in any conduct constituting a violation of the Foreign Corrupt Practices Act of 1977. 3.23 ENVIRONMENTAL MATTERS. INT'L.com and its Subsidiaries have complied in all material respects with all applicable federal, state and local laws (including, without limitation, case law, rules, regulations, orders, judgments, decrees, permits, licenses and governmental approvals) which are intended to protect the environment and/or human health or safety (collectively, "ENVIRONMENTAL LAWS"); neither INT'L.com nor any Subsidiary has handled, generated, used, stored, transported or disposed of any material, substance or waste which is regulated by Environmental Laws ("HAZARDOUS MATERIALS"), except for ordinary office and/or office-cleaning supplies, products, equipment, fluids and wastes customarily found, and in quantities customarily found, in a commercial office setting, which have been used in compliance with Environmental Laws; (iii) to the knowledge of INT'L.com and its Subsidiaries there is not now, nor has there ever been, any underground storage tank or asbestos on any real property owned, operated or leased by INT'L.com; (iv) INT'L.com has not conducted, nor is it aware of, any environmental investigations, studies, audits, tests, reviews or analyses, the purpose of which was to discover, identify, or otherwise characterize the condition of the soil, groundwater, air or the presence of Hazardous Materials at any real property owned, operated or leased by INT'L.com; and (v) to the knowledge of INT'L.com and its Subsidiaries there are no "Environmental Liabilities". For purposes of this Agreement, "ENVIRONMENTAL LIABILITIES" are any claims, demands, or liabilities under Environmental Laws which (i) arise out of or in any way relate to INT'L.com's or its Subsidiary's operations or activities, or any real property at any time owned, operated or leased by INT'L.com or a Subsidiary, or any stockholder's use or ownership thereof, whether vested or unvested, contingent or fixed, actual or potential, and (ii) arise from or relate to actions occurring (including any failure to act) or conditions existing on or before the Closing Date. 3.24 ENFORCEABILITY OF CONTRACTS, ETC. (a) No Person that is a party to any contract, agreement, commitment or plan to which INT'L.com or a Subsidiary is a party has a valid defense, on account of non-performance or malfeasance by INT'L.com or a Subsidiary, which would make any such contracts, agreement, commitment or plan not valid and binding upon or enforceable against such parties in accordance with their terms, except to the extent such enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, arrangement or similar laws affecting the rights of creditors generally and usual equity principles. (b) Neither INT'L.com, nor any Subsidiary, nor to the knowledge of INT'L.com and its Subsidiaries, any other Person, is in breach or violation of, or default under, any material contract, agreement, arrangement, commitment or plan to which INT'L.com or a Subsidiary is a party, and no event or action has occurred, is pending, or, to the knowledge of INT'L.com and its Subsidiaries, is threatened, which, after the giving of notice, or the lapse of time, or otherwise, would constitute a breach or a default by INT'L.com or a Subsidiary or, to the knowledge of INT'L.com and its Subsidiaries, any other Person, under any material contract, agreement, arrangement, commitment or plan to which INT'L.com or a Subsidiary is a party. 3.25 ACCOUNTING MATTERS. To the knowledge of INT'L.com and its Subsidiaries, neither INT'L.com nor any of its Subsidiaries or affiliates has taken or agreed to, or plans to, take any action -24- that would prevent Parent from accounting for the Merger as a "pooling of interests" in accordance with generally accepted accounting principles, Accounting Principles Board Opinion No. 16 and all published rules, regulations and policies of the Securities and Exchange Commission (the "Commission"). 3.26 YEAR 2000. All computer and other systems, software (whether embedded or otherwise), hardware and other products owned or licensed by INT'L.com or its Subsidiaries and used in connection with the services provided by INT'L.com or its Subsidiaries and, to the knowledge of INT'L.com and its Subsidiaries, all computer and other systems, software (whether embedded or otherwise), hardware and other products produced by any third party that are licensed by INT'L.com, in each case, have been written, manufactured and tested to be Year 2000 Ready. For purposes of this Agreement, "YEAR 2000 READY" shall mean, with respect to any systems, software (whether embedded or otherwise), product, equipment or facility, that such system, product, equipment or facility is capable of correctly processing, providing, receiving and manufacturing the date data within and between the twentieth and twenty-first centuries, and its operations and functionality has not been adversely affected and will not be adversely affected in any material respect as a result of the advent of the Year 2000. 3.27 DISCLOSURE. Neither the representations or warranties made by INT'L.com in this Agreement, nor the INT'L.com Disclosure Schedule or any other certificate executed and delivered by INT'L.com pursuant to this Agreement, when taken together, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished. 3.28 RELIANCE. The foregoing representations and warranties are made by INT'L.com with the knowledge and expectation that Parent and Merger Sub are placing reliance thereon. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB Except as set forth in either the documents delivered pursuant to Section 4.5 or in the disclosure schedule of Parent dated as of the Prior Agreement Date and delivered herewith to INT'L.com (the "PARENT DISCLOSURE SCHEDULE") which identifies the section and subsection to which each disclosure therein relates (PROVIDED, HOWEVER, that Parent will be deemed to have adequately disclosed with respect to any section or subsection any matters that are clearly described elsewhere in such document if the applicability of such disclosure to such non-referenced sections or subsections is apparent, and whether or not the Parent Disclosure Schedule is) referred to in a specific section or subsection, Parent and Merger Sub jointly and severally represent and warrant to INT'L.com as follows: 4.1 ORGANIZATION AND QUALIFICATION. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has all requisite corporate power and authority to own, lease and operate its properties and to carry on its businesses as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the Business Condition of Parent. Each Subsidiary of -25- Parent is a corporation duly organized and validly existing under the laws of the jurisdiction of its incorporation, and Merger Sub is recently organized, is in good standing, and has conducted no business activities, other than as contemplated by this Agreement. In this Agreement, "Material Parent Subsidiaries" shall mean the following: Lionbridge Technologies California, Inc., Lionbridge Technologies (Ireland), Inc., Lionbridge Technologies, B.V. and Lionbridge Technologies (France). 4.2 CAPITALIZATION. (a) The authorized capital stock of Parent consists of 5,000,000 shares of preferred stock, $0.01 par value per share, of which no shares are issued or outstanding or held in Parent's treasury, and 100,000,000 shares of Parent Common Stock, of which, as of November 10, 1999: (a) 16,287,827 shares were validly issued and outstanding, fully paid and nonassessable and (b) 5,221,201 shares were reserved for issuance pursuant to Parent's stock option and stock purchase plans for its employees and directors. Except for options and rights relating to shares described in clause (b) of the preceding sentence and except as set forth in Section 4.2 of the Parent Disclosure Schedule or the Reports (as defined in Section 4.5), there are no options, warrants or other rights, agreements or commitments or understandings or rights of any character (contingent or otherwise) obligating Parent to issue, deliver or sell or cause to be issued, delivered or sold shares of its capital stock or any other securities convertible into or evidencing the right to subscribe to shares of its capital stock. All of the outstanding shares of capital stock of each Subsidiary of Parent are owned beneficially and of record by Parent, one of its other Subsidiaries, or any combination thereof, in each case, free and clear of any Liens; and there are no outstanding subscriptions, warrants, options, convertible securities or other rights (contingent or other) pursuant to which any of the Subsidiaries is or may become obligated to issue any shares of its capital stock to any Person other than Parent or one of the other Subsidiaries. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, of which 1,000 shares are issued and outstanding, all of which shares are owned beneficially and of record by Parent. 4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution, delivery and performance of this Agreement and all other agreements contemplated hereby by Parent and Merger Sub have been duly authorized by all necessary action of the Boards of Directors and stockholders of Parent and Merger Sub. Certified copies of the resolutions adopted by the Boards of Directors of Parent and Merger Sub and Parent as sole stockholder of Merger Sub approving this Agreement, all other agreements contemplated hereby and the Merger have been or will be provided to INT'L.com. Each of Parent and Merger Sub has duly and validly executed and delivered this Agreement and has, or prior to Closing, will have duly and validly executed and delivered all other agreements contemplated hereby to be executed by it, and each of this Agreement and such other agreements constitutes a valid, binding and enforceable obligation of each of Parent and Merger Sub in accordance with its terms. 4.4 NON-CONTRAVENTION. Neither the execution, delivery or performance of this Agreement and all other agreements contemplated hereby by Parent and Merger Sub, nor the consummation of the Merger or any other transaction described herein, does or will, after the giving of notice, or the lapse of time, or otherwise, conflict with, result in a breach of, or constitute a default under, the Charter Documents of Parent or Merger Sub or any federal, foreign, state or local court or administrative order or process, statute, law, ordinance, rule or regulation, or any contract, agreement or commitment to which Parent is a party, or under which Parent or any Material Parent Subsidiary is obligated, or by -26- which Parent or any Material Parent Subsidiary or any of the rights, properties or assets of Parent or any Material Parent Subsidiary are subject or bound; result in the creation of any Lien upon, or otherwise adversely affect, any of the rights, properties or assets of Parent or any Material Parent Subsidiary; terminate, amend or modify, or give any party the right to terminate, amend, modify, abandon or refuse to perform or comply with, any contract, agreement or commitment to which Parent or any Material Parent Subsidiary is a party, or under which Parent or any Material Parent Subsidiary is obligated, or by which Parent or any Material Parent Subsidiary or any of the rights, properties or assets of Parent or any Material Parent Subsidiary are subject or bound; or accelerate, postpone or modify, or give any party the right to accelerate, postpone or modify, the time within which, or the terms and conditions under which, any liabilities, duties or obligations are to be satisfied or performed, or any rights or benefits are to be received, under any contract, agreement or commitment to which Parent or any Material Parent Subsidiary is a party, or under which Parent or any Material Parent Subsidiary may be obligated, or by which Parent or any of the rights, properties or assets of Parent or any Material Parent Subsidiary are, subject or bound. 4.5 REPORTS AND FINANCIAL STATEMENTS. (a) Parent has previously furnished to INT'L.com true and correct copies of its (i) Prospectus dated as of August 20, 1999 contained in Parent's Registration Statement on Form S-1, (ii) Quarterly Report on Form 10-Q for the period ended September 30, 1999 (the "RECENT 10-Q") and (iii) all other reports filed by it with the Commission under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") since August 20, 1999. (b) Parent hereby agrees to furnish to INT'L.com true and correct copies of all reports filed by it with the Commission after the Prior Agreement Date prior to the Closing all in the form (including exhibits) so filed (collectively, the "REPORTS"). As of their respective dates, the Reports complied or will comply in all material respects with the then applicable published rules and regulations of the Commission with respect thereto at the date of their issuance and did not or will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the Prior Agreement Date, no additional filings or amendments to previously filed Reports are required pursuant to such rules and regulations. Each of the audited consolidated financial statements and unaudited interim financial statements included in Parent's Reports has been prepared in accordance with generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly presents the financial position of the entity or entities to which it relates as at its date or the results of operations, stockholders' equity or cash flows of such entity or entities (subject, in the case of unaudited statements, to the absence of footnote disclosure and in the case of unaudited interim statements to year-end adjustments, which will not be material either individually or in the aggregate, and except as described in Section 4.5 of the Parent Disclosure Schedule). As of the date of the Recent 10-Q, there were no material liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise, whether due or to become due, that are not shown or provided for either in the Recent 10-Q or Section 4.5 of the Parent Disclosure Schedule, and since the date of the Recent 10-Q, Parent has incurred no liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated or otherwise other than in the ordinary course of business and except for liabilities incurred by Parent in connection with the preparation and execution of this Agreement and the consummation of the transactions contemplated herein. -27- 4.6 VALIDITY OF PARENT MERGER SHARES. The Parent Merger Shares to be issued in the Merger will, when issued, be, validly issued, fully paid and nonassessable. 4.7 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except for (a) the requirements of state securities (or "Blue Sky") laws, (b) the filing and recording of the Merger Documents as provided by the DGCL, (c) the filing of appropriate documents with the Nasdaq Stock Market, (d) the filing of the Proxy Statement, the Form S-4 and a Form 8-K with the Commission, if applicable, and (e) such other consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to be obtained or made, individually or in the aggregate, could not reasonably be expected to impair in any material respect the ability of Parent or Merger Sub to perform its obligations under this Agreement or prevent or materially delay the consummation of any of the transactions contemplated by this Agreement, no consent, approval or authorization of, or declaration, filing or registration with, any Governmental Entity is required to be made or obtained by Parent or Merger Sub in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby. 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except for liabilities incurred in connection with this Agreement or the transactions contemplated hereby, since September 30, 1999, there has not been any material adverse change in the Business Condition of Parent. 4.9 LITIGATION AND OTHER PROCEEDINGS. There is no action, suit, claim, proceeding, or to the knowledge of Parent or any Subsidiary investigation pending against or, to the knowledge of Parent or any Subsidiary, threatened against Parent or any Subsidiary or any of their respective properties and assets before any court or arbitrator or any Governmental Entity. 4.10 DISCLOSURE. Neither the representations or warranties made by Parent in this Agreement, nor the Parent Disclosure Schedule or any other certificate executed and delivered by Parent pursuant to this Agreement, when taken together and with knowledge of the contents of the Reports, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished. Prior to the Prior Agreement Date, Parent has disclosed to INT'L.com all material strategic and financing transactions which Parent has taken action in furtherance of and involving Parent or any Parent Subsidiary. 4.11 RELIANCE. The foregoing representations and warranties are made by Parent with the knowledge and expectation that INT'L.com are placing reliance thereon. 4.12 BROKERS AND FINDERS. Except for Prudential Securities, Inc., Parent has not retained any broker, finder, or investment banker in connection with this Agreement or any of the transactions contemplated by this Agreement. 4.13 ACCOUNTING MATTERS. To the knowledge of Parent, neither Parent nor any of its affiliates has taken or agreed to, or plans to, take any action that would prevent Parent from accounting for the Merger as a "pooling of interest" in accordance with generally accepted accounting principles, Accounting Principles board Opinion No. 16 and all published rules, regulations and policies of the Commission. -28- ARTICLE V COVENANTS OF INT'L.COM References in this Article V to INT'L.com shall be deemed to include all Subsidiaries of INT'L.com. During the period from the Prior Agreement Date (except as otherwise indicated) and continuing until the earlier of the termination of this Agreement or the Effective Time, INT'L.com agrees (except as expressly set forth in Section 5 of the Parent Disclosure Schedule contemplated by this Agreement or otherwise permitted with Parent's prior written consent): 5.1 CONDUCT OF BUSINESS IN ORDINARY COURSE. INT'L.com will carry on its business in the ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with such business, use all reasonable best efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers, consultants and employees and preserve its relationships with customers, suppliers and distributors and others having business dealings with it. INT'L.com will confer on a regular and frequent basis with representatives of Parent to report operational matters of a material nature and to report the general status of the ongoing operations of the business of INT'L.com. The foregoing notwithstanding, INT'L.com will not: (a) other than in the ordinary course of business consistent with prior practice, enter into any material commitment or transaction, including but not limited to any purchase of assets (other than raw materials, supplies or cash equivalents) for a purchase price in excess of $50,000; (b) grant any bonus, severance or termination pay to any officer, director, independent contractor or employee of INT'L.com; (c) enter into or amend any agreements pursuant to which any other party is granted support, service, marketing or publishing rights, other than in the ordinary course of business consistent with prior practice, or is granted distribution rights of any type or scope with respect to any products of INT'L.com; (d) other than in the ordinary course of business consistent with prior practice, enter into or terminate any contracts, arrangements, plans, agreements, leases, licenses, franchises, permits, indentures, authorizations, instruments, or commitments, or amend or otherwise change in any material respect the terms thereof in a manner adverse to INT'L.com; (e) commence a lawsuit other than: (i) for the routine collection of bills, (ii) in such cases where INT'L.com in good faith determines that failure to commence suit would result in a material impairment of a valuable aspect of INT'L.com's business PROVIDED THAT INT'L.com consults with Parent prior to filing such suit, or (iii) for a breach of this Agreement or any agreement related hereto; -29- (f) modify in any material respect existing discounts or other terms and conditions with dealers, distributors and other resellers of INT'L.com's products or services in a manner adverse to INT'L.com; (g) accelerate the vesting or otherwise modify any INT'L.com Option, restricted stock or other outstanding rights or other securities other than any acceleration or modification that results from the execution and performance of this Agreement or any of the transactions contemplated hereby; (h) take any action which would make any representation or warranty in this Agreement untrue or incorrect, as if made as of such time; or (i) agree in writing or otherwise to take any of the foregoing actions. 5.2 DIVIDENDS, ISSUANCE OF, OR CHANGES IN SECURITIES. INT'L.com will not: (i) declare or pay any dividends on or make other distributions to its stockholders (whether in cash, shares or property), (ii) issue, deliver, sell, or authorize, propose, or agree to, or commit to the issuance, delivery, or sale of any shares of its capital stock of any class, any INT'L.com Voting Debt or any securities convertible into its capital stock, any options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings, restrictions, arrangements or rights of any character obligating INT'L.com to issue any such shares, INT'L.com Voting Debt or other convertible securities except as any of the foregoing is required by Outstanding INT'L.com Options; (iii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of INT'L.com, (iv) repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock or options or warrants related thereto, or (v) take any action in furtherance of any of the foregoing. 5.3 GOVERNING DOCUMENTS. INT'L.com will not amend its Charter Documents. 5.4 NO ACQUISITIONS. INT'L.com will not authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into a letter of intent (whether or not binding), an agreement in principle or an agreement with respect to any merger, consolidation or business combination (other than the Merger), or achieve a comparable effect through any acquisition of assets or securities. 5.5 NO DISPOSITIONS. INT'L.com will not sell, lease, license, transfer, mortgage, encumber or otherwise dispose of any of its material assets or cancel, release, or assign any material indebtedness or claim, except in the ordinary course of business. 5.6 INDEBTEDNESS. Except as contemplated in Section 2.9(iii), INT'L.com will not incur any indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee or otherwise. 5.7 COMPENSATION. Except for the actions, adoptions, amendments, modifications, and payments described in Section 5.1(b) of the Parent Disclosure Schedule, INT'L.com will not adopt or amend, or modify in any material respect, any Plan or pay any pension or retirement allowance not required by any existing Plan. INT'L.com will not enter into or modify any employment or severance -30- contracts, increase the salaries, wage rates or fringe benefits of its officers, directors or employees or pay bonuses or other remuneration except for current salaries, severance and other remuneration for which INT'L.com is obligated under arrangements existing prior to the Balance Sheet Date to which INT'L.com is a party and which have been disclosed in the INT'L.com Disclosure Schedule. 5.8 CLAIMS. INT'L.com will not settle any claim, action or proceeding, except in the ordinary course of business consistent with prior practice. 5.9 ACCESS TO PROPERTIES AND RECORDS. Subject to contractual and other obligations, INT'L.com will give Parent and its representatives full access, at a place reasonably acceptable to INT'L.com, during reasonable business hours and following reasonable notice but in such a manner as not unduly to disrupt the business of INT'L.com, to its senior management, senior technical personnel, premises, properties, contracts, commitments, books, records and affairs, and will provide Parent with such financial, technical and operating data and other information pertaining to its business as Parent may request. With INT'L.com's prior consent, which will not be unreasonably withheld, Parent will be entitled in conjunction with INT'L.com personnel to make appropriate inquiries of third parties in the course of its investigation. 5.10 BREACH OF REPRESENTATIONS AND WARRANTIES. INT'L.com will not take any action that would cause or constitute a breach of any of the representations and warranties set forth in Article III or that would cause any of such representations and warranties to be inaccurate in any material respect or that would constitute a breach of any of its other obligations under this Agreement. In the event of, and promptly after becoming aware of, the occurrence of or the pending or threatened occurrence of any event that would cause or constitute such a breach or inaccuracy, INT'L.com will give detailed notice thereof to Parent and will use its reasonable best efforts to prevent or remedy promptly such breach or inaccuracy. 5.11 CONSENTS. INT'L.com will promptly apply for or otherwise seek and use reasonable best efforts to obtain, all Consents, and make all filings with Governmental Entities, required with respect to the consummation of the Merger. 5.12 TAX RETURNS. INT'L.com will promptly provide or make available to Parent copies of all tax returns, reports and information statements that have been filed or are filed prior to the Closing Date. 5.13 EXCLUSIVITY; ACQUISITION PROPOSALS. Unless and until this Agreement will have been terminated by either party pursuant to Article X hereof and thereafter subject to Section 10.5, INT'L.com will not (and will use its reasonable best efforts to ensure that none of its officers, directors, stockholders, agents, representatives or affiliates) take or cause or permit any Person to take, directly or indirectly, any of the following actions with any party other than Parent and its designees: (i) solicit, encourage, initiate or participate in any negotiations, inquiries, or discussions with respect to any offer or proposal to acquire all or any significant part of INT'L.com's business, assets or capital stock, whether by merger, consolidation, other business combination, purchase of assets, tender or exchange offer or otherwise (each of the foregoing, an "ACQUISITION TRANSACTION"), (ii) disclose, in connection with an Acquisition Transaction, any information not customarily disclosed to any Person other than Parent or its representatives concerning INT'L.com's business or properties or afford to any Person -31- other than Parent or its representatives access to its properties, books, or records, except in the ordinary course of business and as required by law or pursuant to a governmental request for information, (iii) enter into or execute any agreement relating to an Acquisition Transaction, or (iv) make or authorize any public statement, recommendation or solicitation in support of any Acquisition Transaction or any offer or proposal relating to an Acquisition Transaction other than with respect to the Merger PROVIDED, HOWEVER, that (a) INT'L.com may furnish or cause to be furnished information concerning INT'L.com and its businesses, properties or assets to a Person, (b) the Company may engage in discussions or negotiations with such Person, (c) following receipt of a proposal or offer for an Acquisition Transaction, may make disclosure to its stockholders and may recommend such proposal or offer to its stockholders and (d) following receipt of a proposal or offer for an Acquisition Transaction the Board of Directors of INT'L.com may enter into an agreement in principle or a definitive agreement with respect to such Acquisition Transaction, but in each case referred to in the foregoing clauses (a) through (d) only to the extent that the Board of Directors of INT'L.com shall conclude in good faith after consultation with outside legal counsel that such action is necessary or appropriate because failure to take such action would be inconsistent with the fiduciary duties owed by the Board of Directors to the stockholders of INT'L.com under applicable law; and PROVIDED, FURTHER, that the Board of Directors of INT'L.com shall not take any of the foregoing actions referred to in clauses (a) through (d) without prior written notice to Parent with respect to such action. In the event that INT'L.com is contacted by any third party expressing an interest in discussing an Acquisition Transaction, INT'L.com will promptly notify Parent of such contact and the identity of the party so contacting INT'L.com. 5.14 NOTICE OF EVENTS. Throughout the period between the Prior Agreement Date and the Closing, INT'L.com will promptly advise and consult with Parent regarding any and all material events and developments concerning its financial position, results of operations, assets, liabilities or business or any of the items or matters concerning INT'L.com covered by the representations, warranties and covenants of INT'L.com contained in this Agreement. 5.15 REASONABLE BEST EFFORTS. INT'L.com will use its reasonable best efforts to effectuate the transactions contemplated hereby and to fulfill and cause to be fulfilled the conditions to Closing under this Agreement. 5.16 INSURANCE. INT'L.com will use its reasonable best efforts to maintain in force at the Effective Time policies of insurance of the same character and coverage as those described in the INT'L.com Disclosure Schedule, and INT'L.com will promptly notify Parent in writing of any changes in such insurance coverage occurring prior to the Effective Time. 5.17 FINANCIAL STATEMENTS. INT'L.com will use its reasonable best efforts to deliver to Parent audited consolidated balance sheets as of December 31, 1997, December 31, 1998 and December 31, 1999 and audited consolidated statements of income and consolidated cash flows for the twelve months ended December 31, 1997, December 31, 1998 and December 31, 1999 no later than February 28, 2000. 5.18 CONFIDENTIALITY AND ASSIGNMENT OF INVENTIONS AGREEMENTS. INTL.com shall use its reasonable best efforts to cause each officer and employee of INT'L.com and its Subsidiaries to enter into a confidentiality and assignment of inventions agreement substantially in the form of such agreement used by Parent and its Subsidiaries in the country in which such officer or employee -32- performs services for INT'L.com. Any officer or employee of INT'L.com or any Subsidiary who has not entered into such agreement shall have been terminated by INTL.com or such Subsidiary prior to the Closing. ARTICLE VI COVENANTS OF PARENT During the period from the Prior Agreement Date and continuing until the earlier of the termination of this Agreement or the Effective Time (or later where so indicated), Parent and Merger Sub agree (except as expressly contemplated by this Agreement or with INT'L.com's prior written consent): 6.1 BREACH OF REPRESENTATIONS AND WARRANTIES. Neither Parent nor Merger Sub will take any action which would cause or constitute a breach of any of the representations and warranties set forth in Article IV or which would cause any of such representations and warranties to be inaccurate in any material respect. In the event of, and promptly after becoming aware of, the occurrence of or the pending or threatened occurrence of any event which would cause or constitute such a breach or inaccuracy, Parent will give detailed notice thereof to INT'L.com and will use its reasonable best efforts to prevent or remedy promptly such breach or inaccuracy. 6.2 ADDITIONAL INFORMATION; ACCESS. Parent will provide INT'L.com and its stockholders with the information relating to Parent referred to in Section 4.5 and the information relating to Parent to be included in the Form S-4. In addition, Parent will afford to INT'L.com and to its counsel and to the persons expected to become stockholders of Parent pursuant to the Merger access throughout the period prior to the Effective Time to its senior management and all other information concerning Parent as INT'L.com or such stockholder may reasonably request. Such stockholders will also be afforded the opportunity to ask questions and to receive accurate and complete answers from Parent concerning the terms and conditions of the Merger and the issuance of the Parent Merger Shares pursuant thereto. 6.3 CONSENTS. Parent will promptly apply for or otherwise seek, and use its reasonable best efforts to obtain, all consents and approvals, and make all filings, required with respect to the consummation of the Merger. 6.4 REASONABLE BEST EFFORTS. Each of Parent and Merger Sub will use its reasonable best efforts to effectuate the transactions contemplated hereby and to fulfill and cause to be fulfilled the conditions to Closing under this Agreement. 6.5 OFFICERS AND DIRECTORS. Parent agrees that all rights to indemnification and all limitations on liability existing on the Prior Agreement Date in favor of, or for the benefit of, the present or former officers and directors of INT'L.com and its Subsidiaries with respect to actions taken in their capacities as directors or officers of INT'L.com or such INT'L.com Subsidiary prior to the Effective Time as provided in the Charter Documents of INT'L.com will survive the Merger and continue in full force and effect following the Effective Time and will not be modified by Parent. -33- Notwithstanding the foregoing, the provisions of such Charter Documents will have no effect on the obligations of any stockholders of INT'L.com pursuant to Article IX of this Agreement or the Escrow Agreement. 6.6 NASDAQ NATIONAL MARKET LISTING. Parent will promptly prepare and submit a NASDAQ listing application and will use its reasonable best efforts to cause the Parent Merger Shares to be authorized for trading on the Nasdaq National Market as soon as practicable. 6.7 NOTICE OF EVENTS. Throughout the period between the Prior Agreement Date and the Closing, Parent will promptly advise and consult with INT'L.com regarding any and all material adverse change to the representations, warranties and covenants of Parent and Merger Sub contained in this Agreement and will disclose to INT'L.com all material strategic and financing transactions which Parent takes action in furtherance of which involve Parent or any Parent Subsidiary. 6.8 THIRD PARTY BENEFICIARIES. Section 6.5 will survive the consummation of the Merger, is intended to benefit the stockholders of INT'L.com that receive Parent Merger Shares (the "NEW PARENT STOCKHOLDERS") and the present and former officers and directors of INT'L.com and its Subsidiaries, will be binding on Parent and its successors and assigns, and will be enforceable by the officers and directors of INT'L.com and the New Parent Stockholders. 6.9 DIRECTORS OF PARENT. Prior to the date of the mailing of the Proxy Statement, Parent shall nominate Roger Jeanty to serve as a director of Parent in accordance with the policies for directors of Parent, and Parent shall take such action as is necessary to cause such person to become a director of Parent effective as of the Effective Time. ARTICLE VII ADDITIONAL AGREEMENTS In addition to the foregoing, Parent, Merger Sub, and INT'L.com each agree to take the following actions after the execution of this Agreement. 7.1 PREPARATION OF THE FORM S-4 AND THE PROXY STATEMENT; STOCKHOLDERS MEETING . (a) INT'L.com shall use its reasonable best efforts to hold one or more special meetings of stockholders in accordance with the applicable requirements of the DGCL and to obtain the INT'L.com Requisite Stockholder Approval to enable the Merger to be effective on the Closing Date (determined without regard to the condition to closing in Section 8.2(h)). Parent shall use its reasonable best efforts to hold one or more special meetings of stockholders to obtain the approval of the issuance of its shares in connection with the Merger by the stockholders of Parent as required by the rules of the Nasdaq Stock Market and in accordance with the applicable requirements of the DCGL. In connection with obtaining the approval of its stockholders, Parent shall prepare, with the assistance and cooperation of INT'L.com, a Registration Statement on Form S-4 (the "FORM S-4"). The Form S-4 shall constitute a joint proxy and a prospectus and shall be used for purposes of offering the Parent Merger Shares to the stockholders of INT'L.com, soliciting proxies from such stockholders for the purpose of obtaining the INT'L.com Requisite Stockholder Approval and soliciting proxies from stockholders of Parent for the -34- purposes of obtaining approval of the issuance of its shares in connection with the Merger by the stockholders of Parent (such proxy/ prospectus statement, together with the accompanying letter to stockholders, notice of meeting and form of proxy shall be referred to herein as the "Proxy Statement"). INT'L.com agrees to fully cooperate with Parent in the preparation of the Form S-4, and shall, upon request, furnish Parent with all information concerning it and its affiliates, directors, officers and stockholders as Parent may reasonably request in connection with the preparation of the Form S-4. INT'L.com shall prepare the portions of the Form S-4, relating to INT'L.com and its subsidiaries including but not limited to financial information, management of INT'L.com, description of INT'L.com's business, executive compensation of the INT'L.com, the recommendation of INT'L.com's Board of Directors, appraisal rights, risk factors relating to INT'L.com, and INT'L.com portions of background of the Merger, reasons for the Merger, interests of certain persons in the Merger and security ownership of certain beneficial owners and management. INT'L.com shall also prepare the disclosure concerning all payments which in the absence of stockholder approval would be "Parachute Payments" as defined in Code Section 280G(b)(2), which shall be in form and substance satisfactory to Parent and its counsel, to satisfy all requirements applicable to INT'L.com of applicable state and federal securities laws, the DGCL and Code Section 280G(b)(5)(B) and the regulations thereunder. No filing of, or amendment or supplement to, the Form S-4 will be made by Parent and no amendment or supplement to the Proxy Statement will be made by Parent or INT'L.com without providing the other party the opportunity to review and comment thereon. Parent will advise INT'L.com, promptly after it receives notice thereof, of the time when the Form S-4 has become effective or any supplement or amendment has been filed, the issuance of any stop order, the suspension of the qualification of the Parent Merger Shares for offering or sale in any jurisdiction, or any request by the Commission for amendment of the Proxy Statement or the Form S-4 or comments thereon and responses thereto or requests by the Commission for additional information. If at any time prior to the Effective Time any information relating to Parent or INT'L.com or any of their respective affiliates, officers or directors, should be discovered by the Parent or INT'L.com which should be set forth in an amendment or supplement to any of the Form S-4 or the Proxy Statement, so 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 which discovers such information shall promptly notify the other party hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the Commission, and to the extent required by law, disseminated to the stockholders of Parent and INT'L.com. If the Commission requires a Tax opinion in connection with the filing of the Form S-4, INT'L.com shall cause Neal, Gerber & Eisenberg, counsel to INT'L.com, to provide such opinion in the form required by the Commission. The issuance of such opinion shall be conditioned upon the receipt by Neal, Gerber & Eisenberg of customary representation letters from each of INT'L.com and Parent in a form reasonably agreed to by the parties. (b) Parent shall file the Form S-4 with the Commission and shall, with the assistance of INT'L.com, promptly respond to any comments from the Commission on the Form S-4 and shall otherwise use its best efforts to have the Form S-4 declared effective under the Securities Act as promptly practicable. Promptly following such time as the Form S-4 is declared effective, INT'L.com shall distribute the Proxy Statement to its stockholders and Parent shall distribute the Proxy Statement to its stockholders. Parent shall comply with all applicable provisions of and rules under the Securities Act and the Exchange Act and state securities laws in the preparation and filing of the S-4 Registration Statement, the offering and issuance of the Parent Merger Shares, the filing and -35- distribution of the Proxy Statement, the solicitation of proxies thereunder, and the calling and holding of the special meeting of stockholders of Parent. Parent shall also ensure that any Form S-4 filed by Parent does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (provided that Parent shall not be responsible for the accuracy and completeness of information relating to INT'L.com or any of its subsidiaries or any other information furnished by INT'L.com specifically for inclusion in the S-4 Registration Statement). (c) INT'L.com shall ensure that the Proxy Statement does not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statement made, under the circumstances under which it is made, not misleading (provided that INT'L.com shall not be responsible for the accuracy or completeness of any information relating to Parent or any of its Subsidiaries or furnished by Parent specifically for inclusion in the Proxy Statement). (d) INT'L.com, acting through its Board of Directors, shall include in the Proxy Statement the unanimous recommendation of its Board of Directors eligible to vote on such matters that its stockholders vote in favor of the adoption of this Agreement and the approval of the Merger. Notwithstanding the foregoing, the obligation set forth in the foregoing sentence shall not apply (and the Board of Directors shall be permitted to modify or withdraw any such recommendation previously made) if the Board of Directors of INT'L.com concludes in good faith, after consultation with its outside legal counsel, that fulfilling the obligations in the foregoing sentence would violate the fiduciary duties of the Board of Directors under applicable law; PROVIDED, HOWEVER, that nothing shall limit the obligation of INT'L.com to otherwise use its reasonable best efforts to fulfill all of its obligations under this Agreement, including without limitation, INT'L.com's obligations under Section 7.1(a) and (c). (e) Parent, acting through its Board of Directors, shall include in the Proxy Statement the unanimous recommendation of its Board of Directors eligible to vote on such matters that the stockholders of Parent vote in favor of the issuance of its shares in connection with the Merger. Notwithstanding the foregoing, the obligation set forth in the foregoing sentence shall not apply (and the Board of Directors shall be permitted to modify or withdraw any such recommendation previously made) if the Board of Directors of Parent concludes in good faith, after consultation with its outside legal counsel, that fulfilling the obligations in the foregoing sentence would violate the fiduciary duties of the Board of Directors under applicable law; PROVIDED, HOWEVER, that nothing shall limit the obligation of the Parent to otherwise use its reasonable best efforts to fulfill all of its obligations under this Agreement, including without limitation, Parent's obligations under Section 7.1 (a) and (b). (f) All resales of shares of Parent Common Stock by each INT'L.com Affiliate (as defined in Section 7.8(b)) will be subject to the restrictions imposed by the third restated registration rights agreement of Parent (the "REGISTRATION RIGHTS AGREEMENT") in the form attached as EXHIBIT 7.1, which will be entered into by the INT'L.com Affiliates. Parent will be entitled to place the legends as referred to in the Registration Rights Agreement on each certificate evidencing any shares of Parent Common Stock to be received by the INT'L Affiliates pursuant to the terms of this Agreement and to issue appropriate stop transfer instructions to the transfer agent for shares of Parent Common Stock consistent with the terms of the Registration Rights Agreement. -36- 7.2 LEGAL CONDITIONS TO THE MERGER. Each of Parent, Merger Sub, and INT'L.com will use all reasonable best efforts to take actions necessary to comply promptly with all legal requirements which may be imposed on it with respect to the Merger. Each of Parent, Merger Sub and INT'L.com will use all reasonable best efforts to take all actions to obtain (and to cooperate with the other parties in obtaining) any consent required to be obtained or made by INT'L.com, Merger Sub, or Parent in connection with the Merger, or the taking of any action contemplated thereby or by this Agreement. 7.3 EMPLOYEE BENEFITS. Nothing contained herein will, subject to Section 6.5, be considered as requiring INT'L.com or Parent to continue any specific plan or benefit, or to confer upon any employee, beneficiary, dependent, legal representative or collective bargaining agent of such employee any right or remedy of any nature or kind whatsoever under or by reason of this Agreement, including without limitation any right to employment or to continued employment for any specified period, at any specified location or under any specified job category, except as specifically provided for in an offer letter or other agreement of employment. It is specifically understood that continued employment with INT'L.com or employment with Parent is not offered or implied for any other employees of INT'L.com and any continuation of employment with INT'L.com after the Closing will be at will except as specifically provided otherwise in an offer letter or other agreement of employment. Parent agrees that it will cause Merger Sub to comply with the WARN Act, to the extent applicable to INT'l.com and its Subsidiaries in connection with actions taken at and after the Effective Time. 7.4 EXPENSES. Whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby and thereby, including investment banking, legal and accounting expenses, will be paid by the party incurring such expense; PROVIDED, HOWEVER, that any such expenses incurred by INT'L.com in excess of $400,000 shall be borne by the stockholders of INT'L.com (without regard to Section 9.4) through the determination of the Modified Share Amount as set forth in Section 2.1(d); PROVIDED, FURTHER, that INT'L.com will itemize any such investment banking, legal and accounting expenses of INT'L.com prior to Closing and provide Parent with an invoice and certification from all organizations providing such services at the Closing in a form reasonably acceptable to Parent; and PROVIDED, FURTHER, that the provisions of this Section 7.4 shall not be construed to relieve a party from liability resulting from such party's breach of this Agreement. 7.5 ADDITIONAL AGREEMENTS. In case at any time after the Effective Time any further action is reasonably necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of INT'L.com, the proper officers and directors of each corporation which is a party to this Agreement will take all such necessary action. Without limiting the foregoing, on or prior to the Closing Date, INT'L.com will deliver to Parent a properly executed statement satisfying the requirements of Treasury Regulation Sections 1.897-2(h) and 1.1445-2(c)(3) in a form reasonably acceptable to Parent. 7.6 PUBLIC ANNOUNCEMENTS. Neither Parent nor INT'L.com will directly or indirectly disseminate any press release or other announcement concerning this Agreement or the transactions contemplated herein to any third party (except to the directors, officers and employees of the parties to this Agreement whose direct involvement is necessary for the consummation of the transactions -37- contemplated under this Agreement, to the attorneys, advisors and accountants of the parties hereto, or except as Parent determines in good faith to be required by applicable law after consultation with INT'L.com) without the prior written agreement of the other parties. 7.7 CONFIDENTIALITY. INT'L.com and Parent have entered into a Mutual Nondisclosure Agreement dated October 7, 1999 concerning each party's obligations to protect the confidential information of the other party. INT'L.com and Parent each hereby affirm each of their obligations under such agreement. If this Agreement is terminated in accordance with Article X hereof, Parent will, and will cause its accountants, counsel and other representatives to deliver to INT'L.com all documents and other material, and all copies thereof, obtained by Parent or on its behalf from INT'L.com in connection with this Agreement, whether so obtained before or after the execution hereof, and will not disclose any such information or documents to any third parties or make any use of such. If this Agreement is terminated in accordance with Article X hereof, INT'L.com will, and will cause its accountants, counsel and other representatives to, deliver to Parent all documents and other material, and all copies thereof, obtained by INT'L.com or by an officer, director or representative of INT'L.com from Parent in connection with this Agreement, whether so obtained before or after the execution hereof, and will not disclose any such information or documents to any third parties or make any use of such. 7.8 POOLING. (a) Parent, the Merger Sub and INT'L.com will use all reasonable best efforts, will cooperate fully and will take all actions as are reasonably necessary to allow the Merger and other transactions contemplated by this Agreement to be accounted for as a "pooling of interests" in accordance with United States generally accepted accounting principles and applicable rules and regulations of the Commission. (b) INT'L.com has delivered to Parent prior to the Prior Agreement Date a letter from INT'L.com, prepared after consultation with its counsel, that identifies all persons it believes may be "affiliates" of INT'L.com, as such term is used in Rule 145 under the Securities Act and applicable accounting pronouncements of the Commission (each such Person, an "INT'L.COM AFFILIATE"). Each such INT'L.com Affiliate has executed and delivered to Parent a written agreement (an "INT'L.COM AFFILIATE AGREEMENT") in the form of EXHIBIT 7.8(b) hereto to the effect that such INT'L.com Affiliate (i) has not made and will not make any disposition of any shares of INT'L.com Common Stock or INT'L.com Preferred Stock or other securities of INT'L.com in the 30-day period prior to the Effective Time, and (ii) will not make any disposition of any of the Parent Merger Shares to be received by such Person after the Effective Time until Parent shall have publicly released a report including the combined financial results of Parent and INT'L.com for a period of at least 30 days of combined operations of Parent and INT'L.com. (c) Section 7.8(c) of the Parent Disclosure Schedule identifies each executive officer and director of Parent (each such Person, a "PARENT AFFILIATE"). Each such Parent Affiliate has executed and delivered to INT'L.com a written agreement (a "Parent AFFILIATE AGREEMENT") in the form of EXHIBIT 7.8(c) hereto to the effect that such Parent Affiliate (i) has not made and will not make any disposition of any shares of Parent Common Stock in the 30-day period prior to the Effective Time, and (ii) will not make any disposition of any shares of Parent Common Stock owned by such person -38- until Parent shall have publicly released a report including the combined financial results of Parent and INT'L.com for a period of at least 30 days of combined operations of Parent and INT'L.com. 7.9 INT'L.COM VOTING AGREEMENT. Simultaneous with the execution of the Prior Agreement, INT'L.com caused the voting agreement in the form attached as EXHIBIT 7.9 (the "INT'L.COM VOTING AGREEMENT") to be executed by all directors, officers, affiliates and holders of 5% of the capital stock of INT'L.com and their affiliates holding in the aggregate at least 60% of the Outstanding INT'L.com Shares and at least 80% of each of the Outstanding INT'L.com Series C Shares and the Outstanding INT'L.com Series D Shares, and to be delivered to Parent. 7.10 PARENT VOTING AGREEMENT. Simultaneous with the execution of the Prior Agreement, Parent caused the voting agreement in the form attached as EXHIBIT 7.10 (the "PARENT VOTING AGREEMENT") to be executed by all directors and officers of Parent and their affiliates holding in the aggregate at least 60% of the Parent shares of Parent Common Stock outstanding on the Prior Agreement Date, and to be delivered to INT'L.com. 7.11 HART-SCOTT-RODINO FILING. If and to the extent applicable, Parent and INT'L.com agree to file, and to cause any other Person obligated to do so as a result of such person's stock holdings in Parent or INT'L.com, a Notification and Report Form in accordance with the notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations thereunder (collectively, the "HSR ACT") with the Antitrust Division of the United States Department of Justice and the Federal Trade Commission and to use its and their reasonable best efforts to achieve the prompt termination or expiration of the waiting period or any extension thereof provided for under the HSR Act as a prerequisite to the consummation of the transactions provided for herein. 7.12 BOARD OF DIRECTORS MEETINGS. After the Closing of the Merger, for as long as Cornerstone Equity Investors IV, L.P. holds at least one-half of the Parent Merger Shares issued to them in connection with the Merger, Parent shall permit one (1) representative of Cornerstone Equity Investors IV, L.P. (the "CORNERSTONE OBSERVER") to attend, in a non-voting observer capacity, each meeting of the Board of Directors of Parent and each meeting of any committee thereof and to participate in all discussions during each such meeting. Parent shall send to the Cornerstone Observer notice of the time and place of any such meeting, in the same manner and at the same time as notice is sent to its directors. Parent shall also provide to the Cornerstone Observer copies of all notices, reports, minutes, contracts and other documents, at the time and in the same manner as such documents are provided to the Board of Directors of Parent, unless the Board of Directors or management of Parent shall determine that delivery of such notice and/or materials to the Cornerstone Observer may be detrimental to Parent. Upon the request of the Board of Directors of the Company, the Cornerstone Observer will excuse himself from any portion of Board or committee meetings if the Board of Directors shall determine that the Cornerstone Observer's presence may violate the attorney-client privilege or may create a conflict of interest or may be otherwise detrimental to Parent. Any materials furnished to the Cornerstone Observer and the discussions and presentations in connection with or at any meeting shall be considered confidential information and the Cornerstone Observer will keep such materials and discussions confidential and will not disclose or divulge such materials and discussions to any third party. -39- 7.13 EMPLOYMENT, CONSULTING AND NONCOMPETITION AGREEMENTS. Simultaneous with the execution of the Prior Agreement, INT'L.com will cause each of Roger Jeanty, [Steven Fingerhood] and Jonathan Clark to execute employment or consulting and/or non-competition agreements with Parent to become effective at the Effective Time in the form provided by Parent to INT'L.com. 7.14 INT'L.COM CONVERSION. Simultaneous with the execution of the Prior Agreement, INT'L.com caused the conversion notice in the form attached as EXHIBIT 7.14 to be executed by the holders of INT'L.com Series A Preferred Stock who, together with the parties executing an INT'L.com Voting Agreement, hold at least 51% of the outstanding shares of INT'L.com Series A Preferred Stock and by the holders of INT'L.com Series B Preferred Stock who, together with the parties executing an INT'L.com Voting Agreement, hold at least 51% of the outstanding shares of INT'L.com Series B Preferred Stock, INT'L.com shall cause such notices to be delivered to Parent. INT'L.com hereby elects that all outstanding shares of INT'L.com Series A Preferred Stock and all of the outstanding shares of INT'L.com Series B Preferred Stock be converted to shares of INT'L.com Series A Common Stock immediately prior to the Effective Time. 7.15 DEBT ADJUSTMENTS. In the event INT'L.com or its Subsidiaries shall breach the covenants in Section 5.6 hereof, the aggregate amount of all breaches of such Section 5.6 shall be deemed to be the "Debt Adjustment Amount" for purposes of this Agreement. "Debt Payment Shares" shall mean a number of shares of Parent Common Stock determined by dividing the Debt Adjustment Amount plus any accrued interest on such amount as of the Closing by the Parent Average Closing Price. ARTICLE VIII CONDITIONS PRECEDENT 8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective obligations of each party to effect the Merger will be subject to the satisfaction prior to the Closing Date of the following conditions unless waived: (a) GOVERNMENTAL APPROVALS. Other than the filing of the Merger Documents with the Secretary of State of Delaware, all statutory requirements and all Consents of Governmental Entities legally required for the consummation of the Merger and the transactions contemplated by this Agreement will have been filed, occurred, or been obtained, other than such Consents for which the failure to obtain would not have a material adverse effect on the consummation of the Merger or the other transactions contemplated hereby or on the Business Condition of Parent or INT'L.com. If and to the extent applicable, the filing and waiting period requirements under the HSR Act will have been complied with and will have expired or terminated. (b) NO RESTRAINTS. No statute, rule or regulation, and no final and nonappealable order, decree or injunction will have been enacted, entered, promulgated or enforced by any court or Governmental Entity of competent jurisdiction which enjoins or prohibits the consummation of the Merger. -40- (c) PARENT STOCKHOLDER APPROVAL. The issuances of the shares of Parent Common Stock in connection with the Merger will have been approved by the requisite vote of the stockholders of Parent. (d) QUOTATION. The shares of Parent Common Stock issuable to INT'L.com's stockholders as contemplated by this Agreement shall have been approved for quotation on the Nasdaq National Market, subject to official notice of issuance. (e) FORM S-4. The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order. (f) PARENT POOLING LETTER. Parent will have received a letter dated immediately prior to the Closing Date from PricewaterhouseCoopers LLP, Parent's independent accountants, to the effect that such firm concurs with Parent's management that no conditions exist that would preclude Parent from accounting for the Merger as a "pooling of interests" in accordance with United States generally accepted accounting principles and applicable rules and regulations of the Commission and Parent shall have delivered a copy of such letter to INT'L.com. (g) INT'L.COM POOLING LETTER. Arthur Andersen LLP shall have delivered to INT'L.com a letter dated immediately prior to the Closing Date to the effect that INT'L.com is "poolable" for accounting purposes under Accounting Principles Board Opinion No. 16, United States generally accepted accounting principles and applicable rules and regulations of the Commission and INT'L.com shall have delivered a copy of such letter to Parent. 8.2 CONDITIONS OF OBLIGATIONS OF PARENT AND MERGER SUB. The obligations of Parent and Merger Sub to effect the Merger are subject to the satisfaction of the following conditions unless waived by Parent and Merger Sub: (a) REPRESENTATIONS AND WARRANTIES OF INT'L.COM. The representations and warranties of INT'L.com set forth in this Agreement will be true and correct in all material respects as of the Prior Agreement Date and as of the Closing Date as though made on and as of the Closing Date, except (i) as otherwise contemplated by this Agreement, (ii) as a result of actions taken or not taken pursuant to this Agreement or at the direction of or after consultation with and written concurrence of Parent, (iii) for representations and warranties specifically limited to an earlier date(s) and (iv) for breaches which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of INT'L.com. Parent will have received a certificate signed by the chief executive officer and the chief financial officer of INT'L.com to such effect on the Closing Date. (b) PERFORMANCE OF OBLIGATIONS OF INT'L.COM. INT'L.com will have performed all agreements and covenants required to be performed by it under this Agreement prior to the Closing Date except (i) as otherwise contemplated or permitted by this Agreement, (ii) as a result of actions taken or not taken at the direction of or after consultation with and written concurrence of Parent and (iii) for such failures to perform which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of INT'L.com; provided, that INT'L.com hereby acknowledges and agrees that any breaches of the covenants set forth in Section 5.6 hereof which individually or in the aggregate exceed $1,000,000 will be deemed for purposes of this Section 8.2(b) -41- to have a material adverse effect on the Business Condition of INT'L.com. Parent will have received a certificate signed by the chief executive officer and the chief financial officer of INT'L.com to such effect on the Closing Date. (c) ESCROW AGREEMENTS. Parent will have received from INT'L.com and the Indemnification Representative a duly executed Escrow Agreement. (d) LEGAL ACTION. There will not be pending or threatened in writing any action, proceeding or other application before any court or Governmental Entity brought by any Person or Governmental Entity: (i) challenging or seeking to prohibit the consummation of the transactions contemplated by this Agreement; or (ii) seeking to prohibit or impose any limitations on Parent's ownership or operation of all or any portion of INT'L.com's business or assets, or to compel Parent to dispose of or hold separate all or any portion of its or INT'L.com's business or assets as a result of the transactions contemplated by the Agreement which, in any such case described in this clause (ii), if successful would have a material adverse effect on the Business Condition of INT'L.com. (e) OPINION OF COUNSEL. Parent will have received an opinion dated as of the Closing Date of Neal, Gerber & Eisenberg, counsel to INT'L.com, covering the matters set forth in EXHIBIT 8.2. (f) CONSENTS. Parent will have received duly executed copies of all Consents specified in Section 3.4 of the INT'L.com Disclosure Schedule except where the failure to receive any such Consent either individually or together with all other failures to receive a Consent would not have a material adverse effect on the Business Condition of INT'L.com, and there will not be any Consents which are required to be disclosed in INT'L.com Disclosure Schedule which have not been so disclosed, and have not been received, if the failure to receive such Consents would have a material adverse effect on the Business Condition of INT'L.com, in each case except for such thereof as Parent and INT'L.com will have agreed in writing will not be obtained. (g) TERMINATION OF RIGHTS AND CERTAIN SECURITIES. Any registration rights, rights of refusal, voting rights, rights to any liquidation preference or redemption rights relating to any security of INT'L.com will have been terminated or waived or satisfied as of the Closing. (h) STOCKHOLDER APPROVALS. This Agreement and the Merger will have been approved by stockholders of INT'L.com holding at least ninety percent (90%) of the voting power of the Outstanding INT'L.com Shares. (i) TERMINATION OF 401K PLAN. The INT'L.com Board of Directors will have passed and not rescinded resolutions satisfactory to Parent's counsel effectively terminating INT'L.com's 401(k) Plan immediately prior to the Closing. (j) CORPORATE PROCEEDINGS SATISFACTORY. All corporate and other proceedings to be taken by INT'L.com in connection with the transactions contemplated hereby and all documents incident thereto will be satisfactory in form and substance to Parent and its counsel, and Parent and its counsel will have received all such counterpart originals or certified or other copies of such documents as they reasonably may request. -42- (k) LETTER FROM ARTHUR ANDERSEN. The Parent shall have received a letter dated as of a date not more than two days prior to the date that the Form S-4 is declared effective and shall have received a subsequent similar letter dated as of a date not more than two days prior to the Effective Time, from Arthur Andersen LLP, auditors for INT'L.com, addressed to Parent in a customary form reasonably satisfactory to Parent, containing statements and information of the type ordinarily included in an accountants' "comfort letters" with respect to the financial statements and financial information of INT'L.com included in the Form S-4. (l) INT'L.COM NOTES AND INT'L.COM BRIDGE NOTES. The INT'L.com Notes and INT'L.com Bridge Notes will have been cancelled and be of no further force and effect. (m) REGISTRATION RIGHTS AGREEMENT. Parent will have received an executed Registration Rights Agreement from the INT'L.com Affiliates. (n) TERMINATION OF CERTAIN AGREEMENT AND ARRANGEMENTS. The agreements and arrangements described in Section 8.2(n) of the INT'L.com Disclosure Schedule will have been terminated with no liability to INT'L.com and evidence of such termination will have been delivered to Parent. 8.3 CONDITIONS OF OBLIGATION OF INT'L.COM. The obligation of INT'L.com to effect the Merger is subject to the satisfaction of the following conditions unless waived by INT'L.com: (a) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB. The representations and warranties of Parent and Merger Sub set forth in this Agreement will be true and correct in all material respects as of the Prior Agreement Date and as of the Closing Date as though made on and as of the Closing Date, except (i) as otherwise contemplated by this Agreement, (ii) as a result of actions taken or not taken pursuant to this Agreement, (iii) for representations and warranties specifically limited to an earlier date(s) and (iv) for breaches which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of Parent. INT'L.com will have received a certificate signed on behalf of Parent by a duly authorized officer of Parent to such effect on the Closing Date. (b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB. Parent and Merger Sub will have performed all agreements and covenants required to be performed by them under this Agreement prior to the Closing Date except (i) as otherwise contemplated or permitted by this Agreement, and (ii) for such failures to perform which, individually or in the aggregate, would not have a material adverse effect on the Business Condition of Parent. INT'L.com will have received a certificate signed on behalf of Parent by officers of Parent to such effect on the Closing Date. (c) OPINION OF PARENT'S COUNSEL. INT'L.com have received an opinion dated the Closing Date of Testa, Hurwitz & Thibeault, LLP, substantially in the form attached as EXHIBIT 8.3. (d) STOCKHOLDER APPROVAL. This Agreement and the Merger will have been approved and adopted by the requisite vote of the stockholders of Merger Sub, as required by the DGCL and Merger Sub's Certificate of Incorporation (the "REQUISITE STOCKHOLDER APPROVAL"). -43- (e) ESCROW AGREEMENT. Parent shall have duly executed and delivered the Escrow Agreement. (f) TAX-FREE REORGANIZATION. INT'L.com shall have received a written opinion from Neal, Gerber & Eisenberg to the effect that the Merger should constitute a reorganization within the meaning of Section 368 of the Code. In preparing such tax opinion, counsel may rely on reasonable assumptions and reasonable written representations from Parent and INT'L.com and their respective officers relating thereto. (g) LEGAL ACTION. There will not be pending or threatened in writing any action, proceeding or other application before any court or Governmental Entity brought by any Person or Governmental Entity: (i) challenging or seeking to prohibit the consummation of the transactions contemplated by this Agreement or (ii) restricting in any way the receipt, ownership, or ability to dispose of the consideration to be received by any stockholder of INT'L.com in the transactions contemplated by this Agreement; PROVIDED, HOWEVER, that INT'L.com will automatically be deemed to waive this condition if Parent agrees to indemnify, defend and hold any such named party harmless against any such action. (h) BOARD OF DIRECTORS. Roger Jeanty shall have been elected as a member of the Board of Directors of Parent. (i) REGISTRATION RIGHTS AGREEMENT. Parent and any other party required to execute the Registration Rights Agreement shall have duly executed and delivered the Registration Rights Agreement to Cornerstone and Dakota. ARTICLE IX INDEMNIFICATION 9.1 INDEMNIFICATION RELATING TO AGREEMENT. Subject to Sections 9.3 and 9.5, as an integral term of the Merger, all stockholders of INT'L.com who accept the Parent Merger Shares and execute the Escrow Agreement (which is a condition to receiving such consideration), severally and not jointly, hereby agree to defend, indemnify and hold Parent harmless from and against, and to reimburse Parent with respect to, any and all losses, damages, liabilities, claims, judgments, settlements, fines, costs and expenses (including reasonable attorneys' fees), determined as provided in Section 9.3 ("INDEMNIFIABLE AMOUNTS"), of every nature whatsoever incurred by Parent (which will be deemed to include any of the foregoing incurred by the Surviving Corporation) by reason of or arising out of or in connection with (i) any breach, or any claim (including claims by parties other than Parent) that constitutes a breach, by INT'L.com of any representation or warranty of INT'L.com contained in this Agreement or in any certificate or other document delivered to Parent pursuant to this Agreement, other than any breach or related claim in respect of actions taken or not taken pursuant to this Agreement or at the written direction of or after consultation with and written concurrence of Parent and (ii) the failure, partial or total, of INT'L.com or any Subsidiary to perform any agreement or covenant required by this Agreement to be performed by it or them other than any breach or related claim in respect of actions -44- taken or not taken pursuant to this Agreement or at the written direction of or after consultation with and written concurrence of Parent. The foregoing obligations to indemnify Parent will be determined without regard to any right to indemnification to which any Person may have in his or her capacity as an officer, director, employee, agent or any other capacity of INT'L.com or any Subsidiary, and no stockholder of INT'L.com will be entitled to any indemnification from INT'L.com or the Surviving Corporation for amounts paid hereunder. There will be no right of contribution or subrogation from Parent or the Surviving Corporation for indemnification payments made by or for the account of the stockholders of INT'L.com. Notwithstanding any provision in this Agreement to the contrary, Indemnifiable Amounts shall not include (i) any lost profits, lost revenues or lost business opportunities, or (ii) any amounts which shall have been recovered by Parent under any insurance policies. 9.2 THIRD PARTY CLAIMS. With respect to any claims or demands by third parties as to which Parent may seek indemnification hereunder whenever Parent will have received a written notice that such a claim or demand has been asserted or threatened, Parent will promptly notify the "Indemnification Representative" (as designated in the Escrow Agreement) of such claim or demand and of the facts within Parent's knowledge that relate thereto. The Indemnification Representative will then have the right to defend, contest, negotiate or settle any such claim or demand through counsel of his own selection, reasonably satisfactory to Parent, and solely at the Indemnification Representative's own cost and expense, which costs and expenses will be reimbursed pursuant to the Escrow Agreement. Notwithstanding the preceding sentence, the Indemnification Representative will not settle, compromise, or offer to settle or compromise any such claim or demand without the prior written consent of Parent, which consent will not be unreasonably withheld. Without limiting Parent's rights to object for other reasons, Parent may object to a settlement or compromise which includes any provision which in its reasonable judgment may have an adverse impact on or establish an adverse precedent for the Business Condition of Parent or any of its Subsidiaries. If the Indemnification Representative gives notice to Parent within thirty (30) calendar days after Parent has notified the Indemnification Representative that any such claim or demand has been made in writing, that the Indemnification Representative elects to have Parent defend, contest, negotiate, or settle any such claim or demand, then Parent will have the right to contest and/or settle any such claim or demand and seek indemnification pursuant to this Article IX as to any Indemnifiable Amounts; PROVIDED, HOWEVER, that Parent will not settle, compromise, or offer to settle or compromise any such claim or demand without the prior written consent (which may include a general or limited consent) of the Indemnification Representative, which consent will not be unreasonably withheld. If the Indemnification Representative fails to give written notice to Parent of his intention to contest or settle any such claim or demand within thirty (30) calendar days after Parent has notified the Indemnification Representative that any such claim or demand has been made in writing, or if any such notice is given but any such claim or demand is not contested by the Indemnification Representative within a reasonable time thereafter, Parent will have the right to contest and/or settle any such claim or demand in its sole discretion and seek indemnification pursuant to this Article IX as to any Indemnifiable Amounts. The adoption of this Agreement by the stockholders of INT'L.com will also constitute their approval of the Indemnification Representative. 9.3 LIMITATIONS. Notwithstanding any other provision in this Article IX, Parent will be entitled to indemnification pursuant to this Article IX only to the extent that the aggregate Indemnifiable Amounts (which shall be determined for all purposes of this Article IX disregarding any -45- qualification in any representation or warranty as to "materially" or "material" or "material adverse effect") exceed Five Hundred Thousand Dollars ($500,000) (the "THRESHOLD AMOUNT") PROVIDED THAT at such time as the amount to which Parent is entitled to be indemnified exceeds the Threshold Amount, Parent shall be entitled to be indemnified up to the full Indemnifiable Amounts including the Threshold Amount. For purposes of indemnification under this Agreement, each Parent Merger Share shall at all times be valued at the Parent Average Closing Price. The aggregate amount to which Parent will be entitled to be indemnified pursuant to this Article IX will not exceed a dollar amount equal to the value of the aggregate number of Escrow Shares held in escrow pursuant to the terms of the Escrow Agreement valued at the Parent Average Closing Price per share , and the liability of any single stockholder for indemnification obligations pursuant to this Article IX shall be limited to such stockholder's PRO RATA share of any Indemnifiable Amounts based on the number of Escrow Shares deposited in escrow by such stockholder relative to the aggregate number of Escrow Shares and the aggregate liability of any single stockholder for indemnification obligations pursuant to this Article IX shall be equal to a dollar amount equal to the Parent Average Closing Price multiplied by the aggregate number of Escrow Shares deposited in escrow by such stockholder; PROVIDED, HOWEVER, that there will be no limitation on the obligations of any person for Indemnifiable Amounts arising out of criminal activity or fraud by such person, including, without limitation, any actions in such person's capacity as an employee, officer or director of INT'L.com or its Subsidiaries, or for any stockholder of INT'L.com for breaches of any representation or warranty contained in the Letter of Transmittal delivered by such stockholder. 9.4 BINDING EFFECT. The indemnification obligations contained in this Article IX are an integral part of this Agreement and the Merger in the absence of which Parent would not have entered into this Agreement. 9.5 TIME LIMIT. The representations, warranties, covenants and agreements of INT'L.com set forth in this Agreement and the certificates and schedules executed or delivered pursuant to this Agreement will survive the Closing for one year; PROVIDED, HOWEVER, that claims relating to the representations and warranties in Sections 3.6(a) and (b) may be made only on or before the date that Parent publishes audited financial results for the year ended December 31, 2000 covering combined operations of Parent and INT'L.com. 9.6 SOLE REMEDY. Notwithstanding any other provision in this Agreement to the contrary, the provisions of this Article IX and the provisions of the Escrow Agreement will be the sole and exclusive remedy of (and corresponding liability of any stockholder of INT'L.com, in such stockholder's capacity as such, to) Parent, Merger Sub and the Surviving Corporation for any damage, claim, cause of action or right of any nature arising out of or relating to any breach of representations, warranties, covenants and agreements of INT'L.com set forth in this Agreement and the certificates and schedules executed or delivered by it pursuant to this Agreement. -46- ARTICLE X TERMINATION 10.1 MUTUAL AGREEMENT. This Agreement may be terminated at any time prior to the Effective Time by the written consent of Parent and INT'L.com. 10.2 TERMINATION BY PARENT. This Agreement may be terminated by Parent (PROVIDED THAT it is not then in material breach of any representation, warranty, covenant or agreement contained in this Agreement) alone, by means of written notice to INT'L.com, if there has been a material breach by INT'L.com or any Subsidiary of any representation, warranty, covenant or agreement set forth in this Agreement or other ancillary agreements, which breach would in Parent's reasonable opinion render it impossible for INT'L.com to satisfy the closing conditions contained in Section 8.2 and has not been cured within twenty (20) business days following receipt by INT'L.com of notice of such breach. 10.3 TERMINATION BY INT'L.COM. (a) This Agreement may be terminated by INT'L.com by means of written notice to Parent and payment of the Termination Fee (as defined below) if it has fulfilled its obligations under Section 7.1(a) and (c) hereof but has failed to obtain the INT'L.com Requisite Stockholder Approval. The Termination Fee shall be paid by wire transfer of immediately available funds to an account designated by Parent and any termination pursuant to this Section 10.3(a) shall only be effective upon receipt of the Termination Fee in such account. The "Termination Fee" shall be a dollar amount equal to 5% of the result of multiplying (i) the Parent Average Closing Price by (ii) the number of Parent Merger Shares that would have been issuable by Parent if the Closing had occurred on the date of such termination, assuming that there were no Excluded Shares, no Series C Excluded Shares and no Series D Excluded Shares and that all Outstanding INT'L.com Options were exercised immediately prior to such date. (b) This Agreement may also be terminated by INT'L.com (PROVIDED THAT it is not then in material breach of any representation, warranty, covenant or agreement contained in this Agreement) alone, by means of written notice to Parent, if there has been a material breach by Parent or any Subsidiary of any representation, warranty, covenant or agreement set forth in the Agreement or other ancillary agreements, which breach would in INT'L.com's reasonable opinion render it impossible for INT'L.com to satisfy the closing conditions contained in Section 8.3 and has not been cured within twenty (20) business days following receipt by Parent of notice of such breach, 10.4 OUTSIDE DATE. This Agreement may be terminated by Parent alone or by INT'L.com alone by means of written notice if the Effective Time does not occur on or prior to June 30, 2000; PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant to the preceding clause will not be available to any party whose failure to fulfill any obligation under this Agreement has been a significant cause of, or resulted in, the failure of the Effective Time to occur on or before such date. 10.5 EFFECT OF TERMINATION. In the event of termination of this Agreement by either INT'L.com or Parent as provided in this Article, this Agreement will forthwith become void and have no effect, and there will be no liability or obligation on the part of Parent, INT'L.com, Merger Sub or their respective officers or directors, except that (i) the provisions of Sections 7.4, 7.6, 7.7 and 11.2 will survive any such termination and abandonment, and (ii) no party will be released or relieved from any -47- liability arising from the willful breach by such party prior to termination of any of its representations, warranties, covenants or agreements as set forth in this Agreement. ARTICLE XI MISCELLANEOUS 11.1 ENTIRE AGREEMENT. This Agreement, including the exhibits, schedules and other agreements delivered pursuant to this Agreement contain all of the terms and conditions agreed upon by the parties relating to the subject matter of this Agreement and supersede all prior agreements, negotiations, correspondence, undertakings and communications of the parties, whether oral or written, respecting that subject matter. 11.2 GOVERNING LAW; CONSENT TO JURISDICTION. The Merger and this Agreement will be governed by the internal laws of the State of Delaware. Legal proceedings relating to this Agreement, the agreements executed in connection with this Agreement or the transactions contemplated hereby or thereby may be commenced only in the state or federal courts in the State of Delaware. Each of the parties hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. The foregoing provisions will not be construed to preclude any party from bringing a counter-claim in any action or proceeding properly commenced in accordance with the foregoing provisions. Process in any such action or proceeding may be served on any party anywhere in the world. Notwithstanding the foregoing, any dispute relating to a claim under the Escrow Agreement will be resolved in accordance with the arbitration provisions of the Escrow Agreement. 11.3 NOTICES. All notices, requests, demands or other communications which are required or may be given pursuant to the terms of this Agreement will be in writing and will be deemed to have been duly given: (i) on the date of delivery if personally delivered by hand, (ii) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified mail, postage prepaid, return receipt requested, (iii) upon the date scheduled for delivery after such notice is sent by a nationally recognized overnight express courier or (iv) by fax upon written confirmation (including the automatic confirmation that is received from the recipient's fax machine) of receipt by the recipient of such notice: IF TO PARENT OR MERGER SUB Lionbridge Technologies, Inc. 950 Winter Street Waltham, Massachusetts 02451 Attention: Rory J. Cowan Telephone No.: (781) 434-6000 Fax No.: (781) 434-6034 -48- WITH COPIES TO: Testa, Hurwitz & Thibeault, LLP 125 High Street Boston, Massachusetts 02110 Attention: George W. Lloyd, Esq. & Kathy A. Fields, Esq. Telephone No.: (617) 248-7000 Fax No.: (617) 248-7100 IF TO INT'L.COM: INT'L.com, Inc. 492 Old Connecticut Path Framingham, Massachusetts 01701 Attention: Chief Executive Officer Telephone No.: (508) 620-3900 Fax No.: (508) 620-3999 With copies to: INT'L.com, Inc. 301 Mission Street, Suite 350 San Francisco, CA 94105 Attention: Steven L. Fingerhood Telephone No.: (415) 546-6895 Fax No.: (415) 495-4926 Cornerstone Equity IV, L.P. 717 Fifth Avenue, Suite 1100 New York, NY 10022 Attention: Michael Najjar Telephone: (212) 207-2372 Fax No.: (212) 826-6798 Dakota/EGI, LLC c/o Equity Group Investments Two N. Riverside Plaza Suite 700 Chicago, IL 60606 Attn: Alisa Singer, Esq. Telephone: (312) 466-3196 Fax No: (312) 454-0335 -49- Neal, Gerber & Eisenberg Two North LaSalle Street, Suite 2200 Chicago, IL 60602 Attn: Jon Wasserman Telephone No.: (312) 269-8000 Fax No.: (312) 269-1747 Such addresses may be changed, from time to time, by means of a notice given in the manner provided in this Section 11.3. 11.4 SEVERABILITY. If any provision of this Agreement is held to be unenforceable for any reason, it will be modified rather than voided, if possible, in order to achieve the intent of the parties to this Agreement to the extent possible. In any event, all other provisions of this Agreement will be deemed valid and enforceable to the full extent. 11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties of Parent contained in this Agreement and schedules and certificates executed or delivered pursuant to this Agreement, will survive the Effective Time, but any claims for breach thereof may only be made on or before the first yearly anniversary of the Closing. 11.6 ASSIGNMENT. No party to this Agreement may assign, by operation of law or otherwise, all or any portion of its rights, obligations, or liabilities under this Agreement without the prior written consent of INT'L.com, Merger Sub and Parent, which consent may be withheld in the absolute discretion of the party asked to grant such consent. Any attempted assignment by Merger Sub or Parent, on the one hand, or by INT'L.com, on the other hand, in violation of this Section 11.6 will be voidable and will entitle INT'L.com or Parent, respectively, to terminate this Agreement at its option. 11.7 COUNTERPARTS. This Agreement may be executed in two or more partially or fully executed counterparts each of which will be deemed an original and will bind the signatory, but all of which together will constitute but one and the same instrument. The execution and delivery of a Signature Page to this Agreement and Plan of Reorganization in the form annexed to this Agreement, including a facsimile copy of the actual signature, by any party hereto who will have been furnished the final form of this Agreement will constitute the execution and delivery of this Agreement by such party. 11.8 AMENDMENT. This Agreement may not be amended except by an instrument in writing executed by INT'L.com, Merger Sub and Parent. 11.9 EXTENSION, WAIVER. At any time prior to the Effective Time, any party hereto may, to the extent legally allowed and without prejudice to the rights of any other party: (i) extend the time for the performance of any of the obligations or other acts of any other party hereto to the party extending such time, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements, covenants or conditions for the benefit of such party contained herein. Any agreement -50- on the part of a party hereto to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such party. 11.10 INTERPRETATION. When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference will be to a Section, Exhibit or Schedule to this Agreement unless otherwise indicated. The words "include," "includes," and "including" when used therein will be deemed in each case to be followed by the words "without limitation." The table of contents, index to defined terms, and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. 11.11 KNOWLEDGE. For purposes of this Agreement, the term "KNOWLEDGE" (including any derivation thereof such as "know" or "knowing", and similar such as "aware" and regardless of whether such word starts with an initial capital) in reference to INT'L.com or any Subsidiary will mean the knowledge of the directors and executive officers of INT'L.com or such Subsidiary as the case may be, and in reference to Parent or any Subsidiary will mean the knowledge of the directors and executive officers of Parent or such Subsidiary as the case may be. 11.12 TRANSFER, SALES, DOCUMENTARY, STAMP AND OTHER SIMILAR TAXES. Any and all transfer, sales, documentary, stamp and other similar Taxes imposed in connection with the transactions contemplated by this Agreement will be paid by the stockholder of INT'L.com with respect to which such Tax relates. At Parent's discretion, the amount paid to any Person pursuant to this Agreement will be reduced by the amount of Taxes payable by such Person pursuant to this Section 11.12. Any amounts so withheld will be promptly remitted to the appropriate taxing authority. 11.13 ACKNOWLEDGEMENT. Parent and INT'L.com hereby acknowledge and agree that: (i) the promissory notes described in Section 2.9(ii) were issued pursuant to Section 5.6 of the Parent Disclosure Schedule and Section 3.8(a) of the INT'L.com Disclosure Schedule, (ii) Parent has received the INT'L.com financial projections dated as of March 25, 2000 and (iii) the promissory notes described in Section 2.9(iii) will count as $2 million of the $3 million of additional indebtedness permitted to be incurred by INT'L.com pursuant to Section 5.6 of the Parent Disclosure Schedule without resulting in a material adverse effect on the Business Condition of INT'L.com. Parent hereby acknowledges that pursuant to Section 8.2(b) INT'L.com may incur additional indebtedness of up to $1 million and, in accordance with Section 5.6 of the Parent Disclosure Schedule, such $1 million of additional indebtedness shall not result in a material adverse effect on the Business Condition of INT'L.com if such additional indebtedness is treated as a Debt Adjustment Amount. (THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.) -51- SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION IN WITNESS WHEREOF, Parent, Merger Sub and, INT'L.com have executed this Agreement as of the date first written above.
LIONBRIDGE TECHNOLOGIES, INC. INT'L.COM, INC. By: By: ----------------------------------- ----------------------------------- Rory J. Cowan Roger O. Jeanty Chief Executive Officer & President Chief Executive Officer LTI ACQUISITION CORP. By: ----------------------------------- Rory J. Cowan Chief Executive Officer & President
-52- EX-2 3 ex-2.txt EXHIBIT 2 Exhibit 2 IC GLOBAL SERVICES, INC. 1998 STOCK PLAN STOCK OPTION AGREEMENT You have been granted the following Option to purchase Common Stock of IC Global Services, Inc. (the "Company"): Name of Optionee: Roger Jeanty Total Number of Shares Granted: 130,000 Type of Option: /X/ Incentive Stock Option / / Non-Statutory Stock Option Option Price Per Share: $3.72 Grant Date: April 6, 1999 Date Exercisable: This Option may be exercised, in whole or in part, for 26,923 of the Shares subject to this Option at any time after the Grant Date; for 76,923 of the Shares subject to this Option at any time after December 31, 1999; and for 26,154 of the Shares subject to this Option at any time after December 31, 2000. Vesting Commencement Date: April 6, 1999 Vesting Schedule: The Unvested Repurchase Right shall lapse with respect to all of the Shares subject to this Option upon the completion of seven (7) years of Service following the Vesting Commencement Date. However, upon the completion of the following performance milestones, the Unvested Repurchase Right shall lapse earlier with respect to the following number of Shares subject to this Option upon the satisfaction of both of the following conditions: first, a Liquidation Event (as defined below) occurs and second, the Fair Market Value of the Shares attains the following values:
- ---------------------------------------------------------------------------------- Company Target Share Price: Unvested Repurchase Right Lapses as to: - ---------------------------------------------------------------------------------- $10/share 32,500 Shares - ---------------------------------------------------------------------------------- $14/share 32,500 Shares - ---------------------------------------------------------------------------------- $18/share 32,500 Shares - ---------------------------------------------------------------------------------- $22/share 32,500 Shares - ----------------------------------------------------------------------------------
A Liquidation Event means (a) the closing date of a Corporate Transaction or (b) the effective date of an initial public offering of the Company's securities ("IPO"). 1 If the Liquidation Event is an IPO, the Company Target Share Price is deemed to be attained if following the Liquidation Event, the average closing price of the Company's Common Stock on a recognized public market for the previous 20-day period equals or exceeds the Company Target Share Price described above. If the Liquidation Event is a Corporate Transaction and the Company's Shares are valued at or above a Company Target Share Price, then at the time of such transaction the Unvested Repurchase Right shall lapse with respect to the number of Shares indicated in the above table. For example, if the value of each Share in the Corporate Transaction is $18/share, then the Unvested Repurchase Right shall lapse with respect to 97,500 Shares subject to this Option. The Unvested Repurchase Right lapses as to the remaining 32,500 Shares as described in the following paragraph. In the event that the Liquidation Event is a Corporate Transaction and the Unvested Repurchase Right has not lapsed with respect to 100% of the Shares subject to this Option, then the applicable Company Target Share Price shall be adjusted to be a new Target Share Price ("New Target Share Price") that applies to the securities of the acquiring company in the Corporate Transaction according to the following formula: New Target Share Price = Company Target Share Price/Exchange Ratio in the Corporate Transaction. Thus, each Company Target Share Price shall be converted into a New Target Share Price, which shall apply to the securities of the acquiring company in the Corporate Transaction in order to determine whether the performance milestones are achieved subsequent to the Corporate Transaction.(1) In no event shall the "Date Exercisable" of the Shares subject to this Option be at a rate that is slower than the rate at which the Unvested Repurchase Right lapses with respect to the Shares subject to this Option. If the "Date Exercisable" is accelerated as a result of the attainment of the above objectives under the Vesting Schedule, all or a portion of this Option may be deemed a Non-Statutory Stock Option. Expiration Date: April 5, 2009 By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the 1998 Stock Plan (the "Plan"), this Stock Option Agreement, the Stock Purchase Agreement and the Buy-Sell Provisions attached to the Stock Purchase Agreement. Any terms not defined herein are defined in the Plan. OPTIONEE: IC GLOBAL SERVICES, INC.: /s/ Roger O Jeanty By: /s/ Steven L. Fingerhood - --------------------------- ------------------------------------ Roger O Jeanty Title: Chairman and Chief - --------------------------- --------------------------------- Print Name Strategic Officer
- ----------------- (1) EXAMPLE: Let's assume the following: (1) the exchange ratio in the Corporate Transaction is .5; (2) the Corporate Transaction valued the value of the Company by referring to the closing price of the acquiring corporation's securities on the date of the closing of the Corporate Transaction and that closing price is equal to $40/share. Thus, the value of each Share of the Company is valued at $20/share ($40(.5)) at the closing of the Corporate Transaction, and the Unvested Repurchase Right lapses as to 97,500 Shares subject to this Option. The remaining 32,500 Shares become vested if the acquiring corporation's securities trade for a 20-day period at a price of at least $44/share. 2 THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION OF THIS OPTION OR THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO THE EXERCISE OF THIS OPTION. IC GLOBAL SERVICES, INC. STOCK OPTION AGREEMENT RECITALS The following provisions form the basis for and are made a part of this Stock Option Agreement ("Agreement"): A. The Board of Directors of the Company has adopted the Company's 1998 Stock Plan (the "Plan") for the purpose of attracting and retaining the Services of certain persons (including officers and employee directors), who contribute to the financial success of the Company or its Parent or Subsidiary. B. Optionee is an Eligible Person of the Company or its Parent or Subsidiary, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock Option to Optionee. C. The granted Option is intended to be an incentive stock Option ("Incentive Option") within the meaning of Section 422 of the Code or a non-statutory stock Option ("Non-Statutory Option"), as indicated on the first page of this Agreement. D. Any terms not defined herein are defined in the Plan. 3 AGREEMENT NOW, THEREFORE, it is hereby agreed as follows: 1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option ("Option") to purchase up to the number of Shares of the Company's Common Stock (the "Optioned Shares") at the Option Price, both as indicated on the first page of this Agreement. 2. PLAN. The Option granted hereunder is in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this Option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan. 3. OPTION TERM. This Option shall have a maximum term of ten (10) years measured from the Grant Date (the "Expiration Date"), unless earlier terminated in accordance with Paragraph 6, 8(a) or 20 hereof (the "Option Term"). 4. OPTION NONTRANSFERABLE; EXCEPTION. The Option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee. 5. DATES OF EXERCISE. (a) Exercisability. This Option shall be exercisable according to the exercise schedule indicated on the first page of this Agreement. Shares purchased by exercising this Option may be subject to the Unvested Repurchase Right under Paragraph 8. Once exercisable, this Option shall remain so exercisable until the expiration or sooner termination of the Option Term under Paragraph 6 or Paragraph 9(a) of this Agreement. In no event, however, shall this Option be exercisable for any fractional shares. (b) $100,000 Limitation. If this Option is designated as an Incentive Option in the first page of this Agreement, then the Optionee's right to exercise this Option shall be deferred to the extent (and only to the extent) that this Option otherwise would not be treated as an Incentive Option by reason of the $100,000 annual limitation under Section 422(d) of the Code, except that: (i) The Optionee's right to exercise this Option shall in any event become exercisable at least as rapidly as 20% per year over the five-year period commencing on the Grant Date, unless the Optionee is an officer of the Company, an Outside Director or a Consultant; and (ii) The Optionee's right to exercise this Option shall no longer be deferred if (A) the Company is subject to a Corporate Transaction before the Optionee's Service terminates, (B) this Option does not remain outstanding, (C) this Option is not assumed by the Successor Corporation or its parent and (D) the Successor Corporation or its parent does not substitute an option with substantially the same terms for this Option. 6. TERMINATION OF OPTION TERM. The Option Term specified in Paragraph 3 shall terminate (and this Option shall cease to be exercisable) earlier than the Expiration Date should one of the following provisions become applicable: (a) Except as otherwise provided in subparagraphs (b) or (c) below, should Optionee cease to provide Service for the Company at any time during the Option Term, then the period for exercising this Option shall be a thirty (30) day period commencing with the date of such cessation of Service. In no event shall this 4 Option be exercisable for more Optioned Shares than the number for which this Option is exercisable for vested Optioned Shares on the date Optionee ceased to provide Service. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Upon the expiration of such thirty (30) day period, the vested and unexercised portion of this Option shall terminate and cease to be outstanding. (b) Should Optionee die while this Option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this Option for the number of vested Optioned Shares (if any) for which the Option is exercisable on the date of the Optionee's death. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Such exercise right shall lapse and this Option shall terminate and cease to be exercisable six (6) months from the date of the Optionee's death. (c) Should Optionee become disabled and cease by reason thereof to provide Service for the Company at any time during the Option Term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Service) to exercise this Option for vested Optioned Shares; provided, however, that in no event shall this Option be exercisable for more Optioned Shares than the number for which this Option is vested on the date Optionee ceased Service. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Upon the expiration of such six (6) month period of exercisability, the vested and unexercised portion of this Option shall terminate and cease to be exercisable. (d) For purposes of this Paragraph 6 and for all other purposes under this Agreement, Optionee shall be deemed to continue in the Company's Service for so long as Optionee remains in Service with the Company or its Parent or Subsidiary. 7. ADJUSTMENT IN OPTION SHARES. (a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to: (i) the total number of Optioned Shares subject to this Option; and (ii) the Option Price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder. The granting of stock Options or bonuses to Optionees and the conversion of any convertible securities of the Company shall not be deemed to have taken place "without receipt of consideration" for the purposes of this Paragraph 7(a). (b) If the Company is the surviving entity in any merger or other business combination, then this Option, if outstanding under the Plan immediately after such merger or other business combination, shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger or other business combination would have been entitled to receive in the consummation of such merger or other business combination. 8. UNVESTED REPURCHASE RIGHT. (a) Scope of Repurchase Right. Unless they have become vested in accordance with the first page of this Agreement and Subparagraph (c) below, the Shares acquired under this Agreement initially shall be Restricted Shares and shall be subject to a right (but not an obligation) of repurchase by the Company ("Unvested Repurchase Right"). The Optionee shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares, except as provided in the following sentence. The Optionee may transfer Restricted Shares (i) by beneficiary designation, will or intestate succession or (ii) to the Optionee's spouse, children or grandchildren or to a trust established by the Optionee for the benefit of the Optionee or the Optionee's spouse, children or grandchildren, provided in either case that the person to whom the Optionee has transferred the Shares ("Transferee") agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Restricted Shares, then this Paragraph 8 shall apply to the Transferee to the same extent as to the Optionee. 5 (b) Condition Precedent to Exercise. The Unvested Repurchase Right shall be exercisable with respect to any Restricted Shares only during the 60-day period next following the later of: (i) The date when the Optionee's Service terminates for any reason, with or without cause, including (without limitation) death or disability; or (ii) The date when such Restricted Shares were purchased by the Optionee, the executors or administrators of the Optionee's estate or any person who has acquired this option directly from the Optionee by bequest, inheritance or beneficiary designation. (c) Lapse of Repurchase Right. The Unvested Repurchase Right shall lapse with respect to the Shares subject to this Option in accordance with the vesting schedule set forth in the first page of this Agreement. In addition, the Unvested Repurchase Right shall lapse and all of the remaining Restricted Shares shall become vested if (i) the Company is subject to a Corporate Transaction before the Optionee's Service terminates and (ii) the Unvested Repurchase Right is not assigned to the Successor Corporation or to its parent or subsidiary. Even if the Shares subject to this Option are no longer subject to the Unvested Repurchase Right, the Shares subject to this Option shall remain subject to any other restrictions in this Agreement, the Plan and the Stock Purchase Agreement and its Buy-Sell Provisions, including but not limited to the Vested Repurchase Right, as described therein. (d) Repurchase Cost. If the Company exercises the Unvested Repurchase Right, it shall pay the Optionee an amount equal to the Option Price for each of the Restricted Shares being repurchased. (e) Exercise of Repurchase Right. The Unvested Repurchase Right shall be exercisable only by written notice delivered to the Optionee prior to the expiration of the 60-day period specified in Subparagraph (b) above. The notice shall set forth the date on which the repurchase is to be effected. Such date shall not be more than 30 days after the date of the notice. The certificate(s) representing the Restricted Shares to be repurchased shall, prior to the close of business on the date specified for the repurchase, be delivered to the Company properly endorsed for transfer. The Company shall, concurrently with the receipt of such certificate(s), pay to the Optionee the purchase price determined according to Subparagraph (d) above. Payment shall be made in cash or cash equivalents or by canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted Shares. The Unvested Repurchase Right shall terminate with respect to any Restricted Shares for which it has not been timely exercised pursuant to this Subparagraph (e). (f) Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company's outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any Restricted Shares or into which such Restricted Shares thereby become convertible shall immediately be subject to the Unvested Repurchase Right. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of the Restricted Shares. Appropriate adjustments shall also, after each such transaction, be made to the price per share to be paid upon the exercise of the Unvested Repurchase Right in order to reflect any change in the Company's outstanding securities effected without receipt of consideration therefor; provided, however, that the aggregate purchase price payable for the Restricted Shares shall remain the same. (g) Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Restricted Shares to be repurchased in accordance with this Paragraph 8, then after such time the person from whom such Restricted Shares are to be repurchased shall no longer have any rights as a holder of such Restricted Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Restricted Shares shall be deemed to have been repurchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. 6 (h) Escrow. Upon issuance, the certificates for Restricted Shares shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement. Any new, substituted or additional securities or other property described in Subparagraph (f) above shall immediately be delivered to the Company to be held in escrow, but only to the extent the Shares are at the time Restricted Shares. All regular cash dividends on Restricted Shares (or other securities at the time held in escrow) shall be paid directly to the Optionee and shall not be held in escrow. Restricted Shares, together with any other assets or securities held in escrow hereunder, shall be (i) surrendered to the Company for repurchase and cancellation upon the Company's exercise of its Unvested Repurchase Right or any other repurchase rights or (ii) released to the Optionee upon the Optionee's request to the extent the Shares are no longer Restricted Shares (but not more frequently than once every six months). In any event, all Shares which have vested (and any other vested assets and securities attributable thereto) shall be released within 60 days after the earlier of (i) the Optionee's cessation of Service or (ii) the lapse of any other repurchase rights. 9. SPECIAL TERMINATION OF OPTION. (a) In the event of a Corporate Transaction that occurs before the Optionee's Service terminates, the Options may be assumed or comparable options or awards substituted by the Successor Corporation, or a parent or subsidiary thereof. The determination of option or award comparability shall be made by the Board, and its determination shall be final, binding and conclusive. In the event that such Successor Corporation refuses to assume all Options or to substitute comparable options for these Options, the Options will become fully vested and exercisable immediately before the closing of the Corporate Transaction. In any event, if the Options are not assumed or substituted, and were not exercised prior to the closing of the Corporate Transaction, the Options will then terminate and cease to be exercisable on the closing date of the Corporate Transaction. For purposes of this paragraph, an Option granted under the Plan shall be deemed to be assumed if, following a sale of assets or merger, the Option confers the right to purchase, for each Optioned Share immediately prior to such sale of assets or merger, the consideration (whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each Share held on the effective date of the Corporate Transaction (and, if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the sale of assets or merger was not solely Common Stock of the Successor Corporation or its parent or subsidiary, the Board may, with the consent of the Successor Corporation and the Optionee, provide for the per share consideration to be received upon exercise of the Option to be solely Common Stock of the Successor Corporation or its parent or subsidiary equal in fair market value (determined as set forth in Section 8(b) of the Plan) to the per share consideration received by holders of Common Stock in the sale of assets or merger. The Company can give no assurance that any Options will be assumed or comparable options substituted by the Successor Corporation or its parent or subsidiary. (b) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 10. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not have any of the rights of a stockholder with respect to the Optioned Shares until such individual shall have exercised the Option, and paid the Option Price in accordance with this Agreement. 11. MANNER OF EXERCISING OPTION. (a) In order to exercise this Option with respect to all or any part of the Optioned Shares for which this Option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatees, as the case may be) must take the following actions: (i) Execute and deliver to the Chairman or the Chief Executive Officer of the Company a stock purchase agreement in the form substantially set forth in attached EXHIBIT B (the "Purchase Agreement") which includes the buy-sell provisions attached thereto; and 7 (ii) Pay the aggregate Option Price for the purchased shares in cash, unless another form of permitted consideration is described in Exhibit A, if any, attached hereto or permitted by the Board at the time of exercise. (b) This Option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Paragraph have been fulfilled. Payment of the Option Price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this Option a certificate or certificates representing the Shares so purchased and paid for. 12. COMPLIANCE WITH LAWS AND REGULATIONS. (a) The exercise of this Option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law or regulations relating thereto and with all applicable rules of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance. (b) In connection with the exercise of this Option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws. 13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise expressly provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company. 14. LIABILITY OF COMPANY. (a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this Option shall be void with respect to such excess shares unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan. (b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this Option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals. (c) Neither the Company nor any Parent, Subsidiary or Successor Corporation will have any liability to Optionee or any other person if it is determined for any reason that any Options granted hereunder are not Incentive Options, if indicated on the first page of this Agreement. 15. NO SERVICE CONTRACT. Except to the extent the terms of any written contract between the Company and Optionee may expressly provide otherwise, the Company (or any Parent or Subsidiary that Optionee provides Service) shall be under no obligation to continue the Service of Optionee for any period of specific duration and may terminate Optionee's Service at any time, with or without cause. 16. WITHHOLDING. Optionee acknowledges that, upon any exercise of this Option, the Company shall have the right to require Optionee to pay to the Company, in such form as is acceptable to the Company, an amount equal to the amount the Company is required to withhold as a result of such exercise for any tax purposes under any federal, local, state or foreign tax laws. 8 17. NOTICES. All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed duly given if personally delivered or if mailed by certified mail, return receipt requested, prepaid and addressed to the Optionee at the address last given to the Company by the Optionee. 18. CONSTRUCTION. This Agreement and the Option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the express terms and provisions of the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this Option. 19. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of Delaware (except for their choice of law provisions). 20. STOCKHOLDER APPROVAL. The grant of this Option is subject to approval of the Plan by the Company's stockholders within twelve (12) months before or after the adoption of the Plan by the Board of Directors, and this Option may not be exercised in whole or in part until such stockholder approval is obtained. In the event that such stockholder approval is not obtained, then this Option shall thereupon terminate and Optionee shall have no rights to acquire any Optioned Shares hereunder. 21. ATTORNEYS' FEES. If any party to this Agreement brings an action against another party to enforce his or its rights under this Agreement, the prevailing party shall be entitled to recover his or its costs and expenses, including, without limitation, attorneys' fees and costs incurred in connection with such action, including any appeal of such action. 22. REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE COMPANY, ITS ASSIGNS AND OTHERS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT AND THE BUY-SELL PROVISIONS. 23. POWER OF ATTORNEY. Optionee's spouse ("Spouse") hereby appoints Optionee as Spouse's true and lawful attorney in fact, for Spouse and in Spouse's name, place and stead, and for Spouse's use and benefit, to agree to any amendment or modification of this Agreement and to execute such further instruments and take such further actions as may reasonably be necessary to carry out the intent of this Agreement. Spouse further gives and grants unto Optionee as Spouse's attorney in fact full power and authority to do and perform every act necessary and proper to be done in the exercise of any of the foregoing powers as fully as Spouse might or could do if personally present, with full power of substitution and revocation, hereby ratifying and confirming all that Optionee shall lawfully do and cause to be done by virtue of this power of attorney. 24. RELEASE. In consideration of the execution and delivery of this Agreement and the grant of the Option hereunder, Optionee, for Optionee, and Optionee's heirs, executors, administrators, agents, affiliates, successors and assigns (collectively, the "Optionee Affiliates"), hereby fully and without limitation, releases and discharges the Company, and its agents, representatives, stockholders, officers, directors, employees, consultants, attorneys, affiliates, successors and assigns (collectively, the "Optionee Affiliates"), both individually and collectively, from any and all rights, which Optionee and/or any Optionee Affiliate may now have or claim to have against, or claim from, the Company and/or any Company Affiliate, arising out of any prior contract, agreement or understanding, whether oral or written, with respect to the grant to Optionee of any capital stock, Options, convertible securities or other equity securities of the Company, to the maximum extent permitted by law. 25. OPTIONEE UNDERTAKING. Optionee hereby agrees to take whatever additional action and execute whatever additional documents the Company may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on Optionee, the Option or the Optioned Shares pursuant to the express provisions of this Agreement. 9 26. AGREEMENT IS ENTIRE CONTRACT. This Agreement along with the other documents referred to herein constitutes the entire agreement and understanding between the parties hereto as to the subject matter hereof and supersedes all prior agreements and understandings in this regard. 10 EXHIBIT A OTHER FORMS OF ACCEPTABLE CONSIDERATION If no forms are listed, each shall be the only acceptable form of consideration for the exercise of the Options. 1. Cash, check or money order. 2. Shares of Common Stock, pursuant to Section 8(e) of the Plan. 3. Exercise/Sale method, pursuant to Section 8(f) of the Plan. 4. Exercise/Pledge method, pursuant to Section 8(g) of the Plan. 11 EXHIBIT B STOCK PURCHASE AGREEMENT AND BUY-SELL PROVISIONS 12 EX-3 4 ex-3.txt EXHIBIT 3 IC GLOBAL SERVICES, INC. 1998 STOCK PLAN STOCK OPTION AGREEMENT You have been granted the following Opinion to purchase Common Stock of IC Global Services, Inc. (the "Company"). Name of Optionee: Roger O. Jeanty Total Number of Shares Granted: 50,000 Type of Option: /X/ Incentive Stock Option / / Non-Statutory Stock Option Option Price Per Share: $3.72 Grant Date: April 6, 1999 Date Exercisable: This Option may be exercised, in whole or in part, for 100% of the Shares subject to this Option at any time after the Grant Date. Vesting Commencement Date: April 6, 1999 Vesting Schedule. The Unvested Repurchase Right shall lapse with respect to the first 20% of the Shares subject to this Option when Optionee completes 12 months of Service after the Vesting Commencement Date. The Unvested Repurchase Right shall lapse with respect to an additional 1/60th of the Shares subject to this Option when the Optionee completes each month of Service thereafter. Expiration Date: April 5, 2009 By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the 1998 Stock Plan (the "Plan"), this Stock Option Agreement, the Stock Purchase Agreement and the Buy-Sell Provisions attached to the Stock Purchase Agreement. Any terms not defined herein are defined in the Plan. OPTIONEE: IC GLOBAL SERVICES, INC.: _____________________________ By:_________________________ _____________________________ Title:______________________ - -1- THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER OR DISTRIBUTION OF THIS OPTION OR THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCK PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, TO BE ENTERED INTO BETWEEN OPTIONEE AND THE COMPANY AS A CONDITION TO THE EXERCISE OF THIS OPTION. IC GLOBAL SERVICES, INC. STOCK OPTION AGREEMENT RECITALS The following provisions form the basis for and are made a part of this Stock Option Agreement ("Agreement"): A. The Board of Directors of the Company has adopted the Company's 1998 Stock Plan (the "Plan") for the purpose of attracting and retaining the Services of certain persons (including officers and employee directors), who contribute to the financial success of the Company or its Parent or Subsidiary. B. Optionee is an Eligible Person of the Company or its Parent or Subsidiary, and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company's grant of a stock Option to Optionee. C. The granted Option is intended to be an incentive stock Option ("Incentive Option") within the meaning of Section 422 of the Code or a non-statutory stock Option ("Non-Statutory Option"), as indicated on the first page of this Agreement. D. Any terms not defined herein are defined in the Plan. 3 AGREEMENT NOW, THEREFORE, it is hereby agreed as follows: 1. GRANT OF OPTION. Subject to and upon the terms and conditions set forth in this Agreement, there is hereby granted to Optionee, as of the date of this Agreement (the "Grant Date"), a stock option ("Option") to purchase up to the number of Shares of the Company's Common Stock (the "Optioned Shares") at the Option Price, both as indicated on the first page of this Agreement. 2. PLAN. The Option granted hereunder is in all instances subject to the terms and conditions of the Plan. In the event of any conflict between this Agreement and the Plan, the provisions of the Plan shall control. Optionee acknowledges receipt of a copy of the Plan and hereby accepts this Option subject to all of the terms and conditions of the Plan. Optionee agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under the Plan. 3. OPTION TERM. This Option shall have a maximum term of ten (10) years measured from the Grant Date (the "Expiration Date"), unless earlier terminated in accordance with Paragraph 6, 8(a) or 20 hereof (the "Option Term"). 4. OPTION NONTRANSFERABLE; EXCEPTION. The Option shall be neither transferable nor assignable by Optionee, either voluntarily or involuntarily, other than by will or by the laws of descent and distribution and may be exercised, during Optionee's lifetime, only by Optionee. 5. DATES OF EXERCISE. (a) Exercisability. This Option shall be exercisable according to the exercise schedule indicated on the first page of this Agreement. Shares purchased by exercising this Option may be subject to the Unvested Repurchase Right under Paragraph 8. Once exercisable, this Option shall remain so exercisable until the expiration or sooner termination of the Option Term under Paragraph 6 or Paragraph 9(a) of this Agreement. In no event, however, shall this Option be exercisable for any fractional shares. (b) $100,000 Limitation. If this Option is designated as an Incentive Option in the first page of this Agreement, then the Optionee's right to exercise this Option shall be deferred to the extent (and only to the extent) that this Option otherwise would not be treated as an Incentive Option by reason of the $100,000 annual limitation under Section 422(d) of the Code, except that: (i) The Optionee's right to exercise this Option shall in any event become exercisable at least as rapidly as 20% per year over the five-year period commencing on the Grant Date, unless the Optionee is an officer of the Company, an Outside Director or a Consultant; and (ii) The Optionee's right to exercise this Option shall no longer be deferred if (A) the Company is subject to a Corporate Transaction before the Optionee's Service terminates, (B) this Option does not remain outstanding, (C) this Option is not assumed by the Successor Corporation or its parent and (D) the Successor Corporation or its parent does not substitute an option with substantially the same terms for this Option. 6. TERMINATION OF OPTION TERM. The Option Term specified in Paragraph 3 shall terminate (and this Option shall cease to be exercisable) earlier than the Expiration Date should one of the following provisions become applicable: (a) Except as otherwise provided in subparagraphs (b) or (c) below, should Optionee cease to provide Service for the Company at any time during the Option Term, then the period for exercising this Option shall be a thirty (30) day period commencing with the date of such cessation of Service. In no event shall this 4 Option be exercisable for more Optioned Shares than the number for which this Option is exercisable for vested Optioned Shares on the date Optionee ceased to provide Service. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Upon the expiration of such thirty (30) day period, the vested and unexercised portion of this Option shall terminate and cease to be outstanding. (b) Should Optionee die while this Option is outstanding, then the executors or administrators of Optionee's estate or Optionee's heirs or legatees (as the case may be) shall have the right to exercise this Option for the number of vested Optioned Shares (if any) for which the Option is exercisable on the date of the Optionee's death. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Such exercise right shall lapse and this Option shall terminate and cease to be exercisable six (6) months from the date of the Optionee's death. (c) Should Optionee become disabled and cease by reason thereof to provide Service for the Company at any time during the Option Term, then Optionee shall have a period of six (6) months (commencing with the date of such cessation of Service) to exercise this Option for vested Optioned Shares; provided, however, that in no event shall this Option be exercisable for more Optioned Shares than the number for which this Option is vested on the date Optionee ceased Service. To the extent the Option is not exercisable for vested Optioned Shares on the Service cessation date, that portion of the Option shall terminate and cease to be outstanding on such date. Upon the expiration of such six (6) month period of exercisability, the vested and unexercised portion of this Option shall terminate and cease to be exercisable. (d) For purposes of this Paragraph 6 and for all other purposes under this Agreement, Optionee shall be deemed to continue in the Company's Service for so long as Optionee remains in Service with the Company or its Parent or Subsidiary. 7. ADJUSTMENT IN OPTION SHARES. (a) In the event any change is made to the Common Stock issuable under the Plan by reason of any stock split, stock dividend, combination of shares, or other change affecting the outstanding Common Stock as a class without receipt of consideration (as set forth in the Plan), then appropriate adjustments will be made to: (i) the total number of Optioned Shares subject to this Option; and (ii) the Option Price payable per share in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder. The granting of stock Options or bonuses to Optionees and the conversion of any convertible securities of the Company shall not be deemed to have taken place "without receipt of consideration" for the purposes of this Paragraph 7(a). (b) If the Company is the surviving entity in any merger or other business combination, then this Option, if outstanding under the Plan immediately after such merger or other business combination, shall be appropriately adjusted to apply and pertain to the number and class of securities to which Optionee immediately prior to such merger or other business combination would have been entitled to receive in the consummation of such merger or other business combination. 8. UNVESTED REPURCHASE RIGHT. (a) Scope of Repurchase Right. Unless they have become vested in accordance with the first page of this Agreement and Subparagraph (c) below, the Shares acquired under this Agreement initially shall be Restricted Shares and shall be subject to a right (but not an obligation) of repurchase by the Company ("Unvested Repurchase Right"). The Optionee shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares, except as provided in the following sentence. The Optionee may transfer Restricted Shares (i) by beneficiary designation, will or intestate succession or (ii) to the Optionee's spouse, children or grandchildren or to a trust established by the Optionee for the benefit of the Optionee or the Optionee's spouse, children or grandchildren, provided in either case that the person to whom the Optionee has transferred the Shares ("Transferee") agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Restricted Shares, then this Paragraph 8 shall apply to the Transferee to the same extent as to the Optionee. 5 (b) Condition Precedent to Exercise. The Unvested Repurchase Right shall be exercisable with respect to any Restricted Shares only during the 60-day period next following the later of: (i) The date when the Optionee's Service terminates for any reason, with or without cause, including (without limitation) death or disability; or (ii) The date when such Restricted Shares were purchased by the Optionee, the executors or administrators of the Optionee's estate or any person who has acquired this option directly from the Optionee by bequest, inheritance or beneficiary designation. (c) Lapse of Repurchase Right. The Unvested Repurchase Right shall lapse with respect to the Shares subject to this Option in accordance with the vesting schedule set forth in the first page of this Agreement. In addition, the Unvested Repurchase Right shall lapse and all of the remaining Restricted Shares shall become vested if (i) the Company is subject to a Corporate Transaction before the Optionee's Service terminates and (ii) the Unvested Repurchase Right is not assigned to the Successor Corporation or to its parent or subsidiary. Even if the Shares subject to this Option are no longer subject to the Unvested Repurchase Right, the Shares subject to this Option shall remain subject to any other restrictions in this Agreement, the Plan and the Stock Purchase Agreement and its Buy-Sell Provisions, including but not limited to the Vested Repurchase Right, as described therein. (d) Repurchase Cost. If the Company exercises the Unvested Repurchase Right, it shall pay the Optionee an amount equal to the Option Price for each of the Restricted Shares being repurchased. (e) Exercise of Repurchase Right. The Unvested Repurchase Right shall be exercisable only by written notice delivered to the Optionee prior to the expiration of the 60-day period specified in Subparagraph (b) above. The notice shall set forth the date on which the repurchase is to be effected. Such date shall not be more than 30 days after the date of the notice. The certificate(s) representing the Restricted Shares to be repurchased shall, prior to the close of business on the date specified for the repurchase, be delivered to the Company properly endorsed for transfer. The Company shall, concurrently with the receipt of such certificate(s), pay to the Optionee the purchase price determined according to Subparagraph (d) above. Payment shall be made in cash or cash equivalents or by canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted Shares. The Unvested Repurchase Right shall terminate with respect to any Restricted Shares for which it has not been timely exercised pursuant to this Subparagraph (e). (f) Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company's outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any Restricted Shares or into which such Restricted Shares thereby become convertible shall immediately be subject to the Unvested Repurchase Right. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or class of the Restricted Shares. Appropriate adjustments shall also, after each such transaction, be made to the price per share to be paid upon the exercise of the Unvested Repurchase Right in order to reflect any change in the Company's outstanding securities effected without receipt of consideration therefor; provided, however, that the aggregate purchase price payable for the Restricted Shares shall remain the same. (g) Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Restricted Shares to be repurchased in accordance with this Paragraph 8, then after such time the person from whom such Restricted Shares are to be repurchased shall no longer have any rights as a holder of such Restricted Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Restricted Shares shall be deemed to have been repurchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. 6 (h) Escrow. Upon issuance, the certificates for Restricted Shares shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement. Any new, substituted or additional securities or other property described in Subparagraph (f) above shall immediately be delivered to the Company to be held in escrow, but only to the extent the Shares are at the time Restricted Shares. All regular cash dividends on Restricted Shares (or other securities at the time held in escrow) shall be paid directly to the Optionee and shall not be held in escrow. Restricted Shares, together with any other assets or securities held in escrow hereunder, shall be (i) surrendered to the Company for repurchase and cancellation upon the Company's exercise of its Unvested Repurchase Right or any other repurchase rights or (ii) released to the Optionee upon the Optionee's request to the extent the Shares are no longer Restricted Shares (but not more frequently than once every six months). In any event, all Shares which have vested (and any other vested assets and securities attributable thereto) shall be released within 60 days after the earlier of (i) the Optionee's cessation of Service or (ii) the lapse of any other repurchase rights. 9. SPECIAL TERMINATION OF OPTION. (a) In the event of a Corporate Transaction that occurs before the Optionee's Service terminates, the Options may be assumed or comparable options or awards substituted by the Successor Corporation, or a parent or subsidiary thereof. The determination of option or award comparability shall be made by the Board, and its determination shall be final, binding and conclusive. In the event that such Successor Corporation refuses to assume all Options or to substitute comparable options for these Options, the Options will become fully vested and exercisable immediately before the closing of the Corporate Transaction. In any event, if the Options are not assumed or substituted, and were not exercised prior to the closing of the Corporate Transaction, the Options will then terminate and cease to be exercisable on the closing date of the Corporate Transaction. For purposes of this paragraph, an Option granted under the Plan shall be deemed to be assumed if, following a sale of assets or merger, the Option confers the right to purchase, for each Optioned Share immediately prior to such sale of assets or merger, the consideration (whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each Share held on the effective date of the Corporate Transaction (and, if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the sale of assets or merger was not solely Common Stock of the Successor Corporation or its parent or subsidiary, the Board may, with the consent of the Successor Corporation and the Optionee, provide for the per share consideration to be received upon exercise of the Option to be solely Common Stock of the Successor Corporation or its parent or subsidiary equal in fair market value (determined as set forth in Section 8(b) of the Plan) to the per share consideration received by holders of Common Stock in the sale of assets or merger. The Company can give no assurance that any Options will be assumed or comparable options substituted by the Successor Corporation or its parent or subsidiary. (b) This Agreement shall not in any way affect the right of the Company to make changes in its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 10. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not have any of the rights of a stockholder with respect to the Optioned Shares until such individual shall have exercised the Option, and paid the Option Price in accordance with this Agreement. 11. MANNER OF EXERCISING OPTION. (a) In order to exercise this Option with respect to all or any part of the Optioned Shares for which this Option is at the time exercisable, Optionee (or in the case of exercise after Optionee's death, Optionee's executor, administrator, heir or legatees, as the case may be) must take the following actions: (i) Execute and deliver to the Chairman or the Chief Executive Officer of the Company a stock purchase agreement in the form substantially set forth in attached EXHIBIT B (the "Purchase Agreement") which includes the buy-sell provisions attached thereto; and 7 (ii) Pay the aggregate Option Price for the purchased shares in cash, unless another form of permitted consideration is described in Exhibit A, if any, attached hereto or permitted by the Board at the time of exercise. (b) This Option shall be deemed to have been exercised with respect to the number of Optioned Shares specified in the Purchase Agreement at such time as the executed Purchase Agreement for such shares shall have been delivered to the Company and all other conditions of this Paragraph have been fulfilled. Payment of the Option Price shall immediately become due and shall accompany the Purchase Agreement. As soon thereafter as practical, the Company shall mail or deliver to Optionee or to the other person or persons exercising this Option a certificate or certificates representing the Shares so purchased and paid for. 12. COMPLIANCE WITH LAWS AND REGULATIONS. (a) The exercise of this Option and the issuance of Optioned Shares upon such exercise shall be subject to compliance by the Company and Optionee with all applicable requirements of law or regulations relating thereto and with all applicable rules of any stock exchange on which shares of the Company's Common Stock may be listed at the time of such exercise and issuance. (b) In connection with the exercise of this Option, Optionee shall execute and deliver to the Company such representations in writing as may be requested by the Company in order for it to comply with the applicable requirements of federal and state securities laws. 13. SUCCESSORS AND ASSIGNS. Except to the extent otherwise expressly provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee and the successors and assigns of the Company. 14. LIABILITY OF COMPANY. (a) If the Optioned Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this Option shall be void with respect to such excess shares unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan. (b) The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this Option without the imposition of requirements unacceptable to the Company in its reasonable discretion shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained. The Company, however, shall use its best efforts to obtain all such approvals. (c) Neither the Company nor any Parent, Subsidiary or Successor Corporation will have any liability to Optionee or any other person if it is determined for any reason that any Options granted hereunder are not Incentive Options, if indicated on the first page of this Agreement. 15. NO SERVICE CONTRACT. Except to the extent the terms of any written contract between the Company and Optionee may expressly provide otherwise, the Company (or any Parent or Subsidiary that Optionee provides Service) shall be under no obligation to continue the Service of Optionee for any period of specific duration and may terminate Optionee's Service at any time, with or without cause. 16. WITHHOLDING. Optionee acknowledges that, upon any exercise of this Option, the Company shall have the right to require Optionee to pay to the Company, in such form as is acceptable to the Company, an amount equal to the amount the Company is required to withhold as a result of such exercise for any tax purposes under any federal, local, state or foreign tax laws. 8 17. NOTICES. All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed duly given if personally delivered or if mailed by certified mail, return receipt requested, prepaid and addressed to the Optionee at the address last given to the Company by the Optionee. 18. CONSTRUCTION. This Agreement and the Option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the express terms and provisions of the Plan. All decisions of the Company with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this Option. 19. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of Delaware (except for their choice of law provisions). 20. STOCKHOLDER APPROVAL. The grant of this Option is subject to approval of the Plan by the Company's stockholders within twelve (12) months before or after the adoption of the Plan by the Board of Directors, and this Option may not be exercised in whole or in part until such stockholder approval is obtained. In the event that such stockholder approval is not obtained, then this Option shall thereupon terminate and Optionee shall have no rights to acquire any Optioned Shares hereunder. 21. ATTORNEYS' FEES. If any party to this Agreement brings an action against another party to enforce his or its rights under this Agreement, the prevailing party shall be entitled to recover his or its costs and expenses, including, without limitation, attorneys' fees and costs incurred in connection with such action, including any appeal of such action. 22. REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTIONED SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE COMPANY, ITS ASSIGNS AND OTHERS TO REPURCHASE SUCH SHARES IN ACCORDANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT AND THE BUY-SELL PROVISIONS. 23. POWER OF ATTORNEY. Optionee's spouse ("Spouse") hereby appoints Optionee as Spouse's true and lawful attorney in fact, for Spouse and in Spouse's name, place and stead, and for Spouse's use and benefit, to agree to any amendment or modification of this Agreement and to execute such further instruments and take such further actions as may reasonably be necessary to carry out the intent of this Agreement. Spouse further gives and grants unto Optionee as Spouse's attorney in fact full power and authority to do and perform every act necessary and proper to be done in the exercise of any of the foregoing powers as fully as Spouse might or could do if personally present, with full power of substitution and revocation, hereby ratifying and confirming all that Optionee shall lawfully do and cause to be done by virtue of this power of attorney. 24. RELEASE. In consideration of the execution and delivery of this Agreement and the grant of the Option hereunder, Optionee, for Optionee, and Optionee's heirs, executors, administrators, agents, affiliates, successors and assigns (collectively, the "Optionee Affiliates"), hereby fully and without limitation, releases and discharges the Company, and its agents, representatives, stockholders, officers, directors, employees, consultants, attorneys, affiliates, successors and assigns (collectively, the "Optionee Affiliates"), both individually and collectively, from any and all rights, which Optionee and/or any Optionee Affiliate may now have or claim to have against, or claim from, the Company and/or any Company Affiliate, arising out of any prior contract, agreement or understanding, whether oral or written, with respect to the grant to Optionee of any capital stock, Options, convertible securities or other equity securities of the Company, to the maximum extent permitted by law. 25. OPTIONEE UNDERTAKING. Optionee hereby agrees to take whatever additional action and execute whatever additional documents the Company may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on Optionee, the Option or the Optioned Shares pursuant to the express provisions of this Agreement. 9 26. AGREEMENT IS ENTIRE CONTRACT. This Agreement along with the other documents referred to herein constitutes the entire agreement and understanding between the parties hereto as to the subject matter hereof and supersedes all prior agreements and understandings in this regard. 10 EXHIBIT A OTHER FORMS OF ACCEPTABLE CONSIDERATION If no forms are listed, each shall be the only acceptable form of consideration for the exercise of the Options. 1. Cash, check or money order. 2. Shares of Common Stock, pursuant to Section 8(e) of the Plan. 3. Exercise/Sale method, pursuant to Section 8(f) of the Plan. 4. Exercise/Pledge method, pursuant to Section 8(g) of the Plan. 11 EXHIBIT B STOCK PURCHASE AGREEMENT AND BUY-SELL PROVISIONS 12 EX-4 5 ex-4.txt EXHIBIT 4 Exhibit 4 THIRD RESTATED REGISTRATION RIGHTS AGREEMENT Agreement dated as of the 22nd day of May, 2000 by and among Lionbridge Technologies, Inc., a Delaware corporation formerly known as Lionbridge Technologies Holdings, Inc. (the "COMPANY"), each of the other parties listed on SCHEDULE A hereto (individually, a "PRIOR INVESTOR" and collectively, the "PRIOR INVESTORS"), Capital Resource Lenders III, L.P. and CRP Investment Partners III, LLC (collectively "CRL"), Morgan Stanley Venture Capital Fund II Annex, L.P. and Morgan Stanley Venture Investors Annex, L.P. (collectively, "MORGAN STANLEY"), and each of the affiliates of both INT'L.com, Inc. ("INT'L.COM") and Harvard Translations, Inc. ("HT") listed on SCHEDULE B hereto (individually, an "INT'L.COM AFFILIATE" and collectively, the "INT'L.COM AFFILIATES"). WHEREAS, the Company, the Prior Investors, CRL and Morgan Stanley entered into a Second Restated Registration Rights Agreement dated as of February 26, 1999 (the "PRIOR REGISTRATION RIGHTS AGREEMENT") in connection with the sale of notes and warrants to CRL and Morgan Stanley; WHEREAS, the Compa.ny and INT'L.com are entering into an Agreement and Plan of Reorganization (the "INT'L MERGER AGREEMENT") pursuant to which a wholly-owned subsidiary of the Company will be merged with and into INT'L.com and the Company and HT are also entering into an Agreement and Plan of Reorganization pursuant to which a wholly-owned subsidiary of the Company will be merged with and into HT (the "HT MERGER AGREEMENT," together with the INTL Merger Agreement, the "MERGER AGREEMENTS"); and WHEREAS, the Prior Investors, CRL and Morgan Stanley desire to terminate the Prior Registration Rights Agreement and enter into a Third Restated Registration Rights Agreement with the Company and the INT'L.com Affiliates, in order to induce the INT'L.com Affiliates to approve the INT'L Merger Agreement. NOW, THEREFORE, in consideration of the premises and the agreements herein contained, and intending to be bound hereby, the parties hereby agree as follows: 1. DEFINITIONS. 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the following respective meanings: "AFFILIATE" means, with respect to any Prior Investor, CRL, Morgan Stanley or the INT'L.com Affiliates, any Person directly or indirectly controlling, controlled by, or under common control with such Person. "COMMISSION" means the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act (as defined below). "COMMON STOCK" means the common stock, $.01 par value per share, of the Company. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission issued under such Act, as they each may, from time to time, be in effect. "PERSON" means an individual, corporation, partnership, association, trust or other entity or organization. "REGISTRATION STATEMENT" means a registration statement filed by the Company with the Commission for a public offering and sale of Common Stock (other than a registration statement on Form S-8 or Form S-4, or their successors, or any other form for a similar limited purpose, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another corporation). "REGISTRATION EXPENSES" means the expenses described in Section 2.5. "REGISTRABLE SHARES" means (i) the shares of Common Stock issued to the Prior Investors upon conversion of the shares of Series C Convertible Preferred Stock, $.01 par value per share, of the Company issued to the Prior Investors upon conversion of the shares of Series A Convertible Preferred Stock, $.01 par value per share, and Series D Nonvoting Convertible Preferred Stock, $.01 par value per share, issued to the Prior Investors in exchange for the shares of Series A Preferred of Lionbridge America held by such Prior Investors, (ii) any other shares of Common Stock of the Company issued in respect of the Series A Preferred (because of stock splits, stock dividends, reclassifications, recapitalizations, or similar events), (iii) the shares of Common Stock issued to CRL and Morgan Stanley upon exercise of the Warrants, (vi) the shares of Common Stock issued to the INT'L.com Affiliates under the terms of the Merger Agreements and (v) any other shares of Common Stock held by the Prior Investors; provided, that for all purposes of this Agreement, Registrable Shares shall not include shares of Common Stock which (a) have been registered under the Securities Act pursuant to an effective registration statement filed thereunder and disposed of in accordance with the registration statement covering them, (b) have been sold pursuant to Rule 144 under the Securities Act or (c) are eligible for sale under Rules 144(k), 145(d)(2) or 145(d)(3) under the Securities Act. "SECURITIES ACT" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission issued under such Act, as they each may, from time to time, be in effect. "SERIES A PREFERRED" shall mean the Series A Convertible Preferred Stock, $.01 par value per share, of the Company's wholly-owned subsidiary, Lionbridge America, Inc., a Delaware corporation formerly known as Lionbridge Technologies, Inc. ("LIONBRIDGE AMERICA"). "STOCKHOLDERS" means the Prior Investors, CRL, Morgan Stanley and the INT'L.com Affiliates. -2- "WARRANTS" shall mean the Common Stock Purchase Warrants to purchase Common Stock issued to CRL pursuant to the First Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement dated as of February 26, 1999 and issued to Morgan Stanley pursuant to the Senior Subordinated Senior Note and Warrant Purchase Agreement dated March 9, 1999. 2. REGISTRATION RIGHTS. 2.1 SALE OR TRANSFER OF SHARES; LEGEND. (a) The Registrable Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Securities Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel, reasonably satisfactory to the Company, to the effect that such sale or transfer is exempt from the registration requirements of the Securities Act. (b) Each certificate representing the Registrable Shares (other than Registrable Shares which have been registered under the Securities Act pursuant to an effective registration statement filed thereunder) shall bear a legend substantially in the following form: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "ACT"), or applicable state securities laws and may not be transferred or otherwise disposed of unless and until such shares are registered under the Act and such laws or (1) registration under applicable state securities laws is not required and (2) an opinion of counsel satisfactory to the Company is furnished to the Company to the effect that registration under the Act is not required." The foregoing legend shall be removed from the certificates representing any Registrable Shares at the request of the holder thereof at such time as they become registered under the Securities Act or eligible for resale pursuant to Rule 144(k) under the Securities Act. 2.2 REQUIRED REGISTRATIONS. (a) If, at any time after the date two (2) years after the purchase of the Series A Preferred (but in no event within six (6) months after the effective date of any prior Company registration statement), within 90 days following receipt by the Company of written notice from a Stockholder or Stockholders holding not less than forty percent (40%) of the then outstanding Registrable Shares, which written notice requests the Company to register at least twenty percent (20%) of the then outstanding Registrable Shares, or any lesser percentage, so long as the anticipated aggregate offering price for such shares exceeds $5,000,000, the Company shall use its best efforts to effect the registration of such Registrable Shares on Form S-1 or Form S-2 (or any successor forms) or other appropriate Registration Statement designated by such Stockholder or Stockholders holding a majority of the Registrable Shares to be included in the -3- demand registration. (b) At any time after the Company becomes eligible to file a Registration Statement on Form S-3 (or any successor form relating to secondary offerings), a Stockholder or Stockholders may request the Company, in writing, to effect the registration (which may include a shelf or underwritten offering) on Form S-3 (or such successor form), of the Registrable Shares of such Stockholder or Stockholders, having an aggregate offering price of at least $1,000,000 (based on the then current public market price). Thereupon, the Company shall, as expeditiously as possible, use its best efforts to effect the registration on Form S-3, or such successor form, of all Registrable Shares which the Company has been requested to register. (c) The Stockholders shall have the right to require the Company to effect two demand registrations on Form S-1 or Form S-2 and an unlimited number of registrations on Form S-3 (or any successor forms) pursuant to this Section 2.2; however, a registration on Form S-1 or Form S-2 will not count for this purpose unless it becomes effective and holders are able to sell at least 50% of the Registrable Shares sought to be included in such registration. The Company shall not, however, register any additional shares of stock of the Company at the same time as a demand registration without the prior written consent of the holders of a majority of the Registrable Shares to be included in the demand registration. (d) If at the time of any request to register Registrable Shares pursuant to this Section 2.2, the Company is engaged or has fixed plans to engage within 30 days of the time of the request in a registered public offering as to which the Stockholders may include Registrable Shares pursuant to Section 2.3 or is engaged in any other activity which, in the good faith determination of the Company's Board of Directors, would be adversely affected by the requested registration to the material detriment of the Company, then the Company may at its option direct that such request be delayed for a period not in excess of six (6) months from the effective date of such offering or the date of commencement of such other material activity, as the case may be, such right to delay a request to be exercised by the Company not more than once in any one-year period. 2.3 INCIDENTAL REGISTRATION. (a) Whenever the Company proposes to file a Registration Statement, whether pursuant to Section 2.2 or otherwise, prior to such filing it shall give written notice to all Stockholders of its intention to do so, and upon the written request of a Stockholder or Stockholders given within 30 days after the Company provides such notice (which request shall state the intended method of disposition of such Registrable Shares), the Company shall cause all Registrable Shares which the Company has been requested to register to be registered under the Securities Act to the extent necessary to permit their sale or other disposition in accordance with the intended methods of distribution specified in the request of such Stockholder(s). (b) In connection with any offering under this Section 2.3 involving an underwriting, the Company shall not be required to include any Registrable Shares in such underwriting unless the holders thereof accept the terms of the underwriting as agreed upon -4- between the Company and the underwriters selected by it, and then only in such quantity as will not, in the opinion of the underwriters, jeopardize the success of the offering by the Company. If in the opinion of the managing underwriter the registration of all, or part of, the Registrable Shares which the Stockholders have requested to be included would materially and adversely affect such public offering, then the Company shall be required to include in the underwriting only that number of Registrable Shares, if any, which the managing underwriter believes may be sold without causing such adverse effect. In the event of such a reduction in the number of shares to be included in the underwriting, all Stockholders of Registrable Shares who have requested registration shall participate in the underwriting pro rata based upon their total ownership of Registrable Shares (or in any other proportion as agreed upon by such Stockholders) and if any such Stockholders would thus be entitled to include more shares than such Stockholders requested to be registered, the excess shall be allocated among such other requesting holders pro rata based on their ownership of Registrable Shares. No other securities requested to be included in a registration for the account of anyone other than the Company or the Stockholders shall be included in a registration unless all Registrable Shares requested to be included in such registration are also included. (c) Holders of not less than fifty-one percent (51%) of the Registrable Shares may waive the rights contained in this Section 2.3 on behalf of all holders of Registrable Shares. 2.4 REGISTRATION PROCEDURES. If and whenever the Company is required by the provisions of this Agreement to use its best efforts to effect the registration of any of the Registrable Shares under the Securities Act, the Company shall: (a) file with the Commission a Registration Statement with respect to such Registrable Shares and use its best efforts to cause that Registration Statement to become and remain effective; (b) as expeditiously as possible prepare and file with the Commission any amendments and supplements to the Registration Statement and the prospectus included in the Registration Statement as may be necessary to keep the Registration Statement effective for a period of not less than 90 days from the effective date; (c) as expeditiously as possible furnish to each selling Stockholder such reasonable numbers of copies of the prospectus, including the preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as the selling Stockholder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Shares owned by the selling Stockholder; and (d) as expeditiously as possible use its best efforts to register or qualify the Registrable Shares covered by the Registration Statement under the securities or Blue Sky laws of such states as the selling Stockholder shall reasonably request, and do any and all other acts and things that may be necessary or desirable to enable the selling Stockholder to consummate the public sale or other disposition of the Registrable Shares owned by the selling -5- Stockholder in such jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required in connection with this paragraph (d) to qualify as a foreign corporation in any jurisdiction. If the Company has delivered preliminary or final prospectuses to selling Stockholders and after having done so the prospectus has been or is required to be amended to comply with the requirements of the Securities Act, or the Commission has issued a stop order or other suspension of effectiveness of a registration statement, the Company shall promptly notify the selling Stockholders and, if requested, the selling Stockholders shall immediately cease making offers of Registrable Shares and shall return all prospectuses to the Company. The Company shall promptly provide the selling Stockholders with revised prospectuses and, following receipt of the revised prospectuses, the selling Stockholder shall be free to resume making offers of the Registrable Shares. 2.5 ALLOCATION OF EXPENSES. The Company shall pay the Registration Expenses for (i) the demand registration on Form S-1 or Form S-2 (or any successor forms) and (ii) all demand registrations on Form S-3. If a registration on a Registration Statement other than Form S-3 (or any successor form) requested by the Stockholders pursuant to paragraph (a) of Section 2.2 is withdrawn at the request of the Stockholders requesting it (other than as a result of information concerning the business or financial condition of the Company that is made known to the Stockholders after the date on which such registration was requested) and if the requesting Stockholders holding a majority of the Registrable Shares requested to be included in such registration elect not to have such registration counted as a registration requested under paragraph (a) of Section 2.2, the requesting Stockholders shall pay the Registration Expenses of such registration pro rata in accordance with the number of their Registrable Shares included in such registration. For purposes of this Section, the term "REGISTRATION EXPENSES" shall mean all expenses incurred by the Company in complying with this Section 2, including, without limitation, all registration and filing fees, exchange listing fees, printing expenses, fees and disbursements of counsel for the Company and one counsel for the selling Stockholders, out-of-pocket expenses of the Company and the underwriters, state Blue Sky fees and expenses, and the expense of any special audits incident to or required by any such registration, but excluding underwriting discounts and selling commissions and fees of more than one counsel for the selling Stockholders. Such underwriting discounts and selling commissions shall be borne pro rata by the selling Stockholders in accordance with the number of their Registrable Shares included in such registration. 2.6 INDEMNIFICATION. In the event of any registration of any of the Registrable Shares under the Securities Act pursuant to this Agreement, then to the extent permitted by law the Company shall indemnify and hold harmless each seller of such Registrable Shares, each underwriter of such Registrable Shares and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act, the Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Shares were -6- registered under the Securities Act, any preliminary prospectus or final prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arise out of or are based upon the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Company shall reimburse each such seller, underwriter and controlling person for reasonable legal or any other expenses incurred by such seller, underwriter or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or omission made in such Registration Statement, preliminary prospectus or final prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by or on behalf of such seller, underwriter or controlling person specifically for use in the preparation thereof. In the event of any registration of any of the Registrable Shares under the Securities Act pursuant to this Agreement, then to the extent permitted by law, each seller of Registrable Shares, severally and not jointly, shall indemnify and hold harmless the Company, each of its directors and officers and each underwriter (if any) and each person, if any, who controls the Company or any such underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages or liabilities, joint or several, to which the Company, such directors and officers, underwriter or controlling person may become subject under the Securities Act, Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Shares were registered under the Securities Act, any preliminary prospectus or final prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, if the statement or omission was made solely in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such seller, specifically for use in connection with the preparation of such Registration Statement, prospectus, amendment or supplement; and such seller shall reimburse the Company for reasonable legal or other expenses incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action. An underwriter shall not be entitled to indemnification pursuant to this subsection in the event that it fails to deliver to any selling Stockholder any preliminary or final or revised prospectus, as required by the rules and regulations of the Commission. Finally, no indemnification shall be provided pursuant to this subsection in the event that any error in a preliminary prospectus of the Company is subsequently corrected in the final prospectus of the Company for a particular offering, and such final prospectus is delivered to all purchasers in the offering prior to the date of purchase of the securities. Each party entitled to indemnification under this Section 2.6 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide indemnification (the "INDEMNIFYING PARTY") -7- promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; PROVIDED, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld); and, PROVIDED, FURTHER, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6. The Indemnified Party may participate in such defense at such party's expense; PROVIDED, HOWEVER, that the Indemnifying Party shall pay such expense if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party, in the defense of any such claim or litigation shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation, and no Indemnified Party shall consent to entry of any judgment or settle such claim or litigation without the prior written consent of the Indemnifying Party. 2.7 INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERINGS. In the event that Registrable Shares are sold pursuant to a Registration Statement in an underwritten offering, the Company and the Stockholders whose shares are being registered agree to enter into an underwriting agreement containing customary representations and warranties with respect to the business and operations of an issuer of the securities being registered and customary covenants and agreements to be performed by such issuer, including without limitation customary provisions with respect to indemnification by the Company and such Stockholders of the underwriters of such offering. 2.8 INFORMATION BY HOLDER. Each holder of Registrable Shares included in any registration shall furnish to the Company such information regarding such holder and the distribution proposed by such holder as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 2. 2.9 RULE 144 REQUIREMENTS. With a view to making available to the Stockholders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit a Stockholder to sell securities of the Company to the public without registration, the Company agrees to use its best efforts to: (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act (at any time after it has become subject to the reporting requirements of the Exchange Act); (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and -8- (c) furnish to any holder of Registrable Shares upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after 90 days after the closing of the first sale of securities by the Company pursuant to a Registration Statement), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as such holder may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any such securities without registration. 2.10 SELECTION OF UNDERWRITER. In the case of any registration effected pursuant to Section 2.2, the Company shall have the right to designate the managing underwriter, subject to the approval of the requesting Stockholders, which approval shall not be unreasonably withheld or delayed. 2.11 RESTRICTIONS ON OTHER AGREEMENTS. The Company will not enter into any agreement with any party which by its terms grants any right superior to those of the Prior Investors, CRL, Morgan Stanley and the INT'L.com Affiliates relating to the registration of the Company's Common Stock without the consent of the holders of not less than fifty-one percent (51%) of the Registrable Shares then outstanding. 2.12 TERMINATION. The provisions of this Section 2 shall terminate on the earlier to occur of (i) August 20, 2004; (ii) such time as a Prior Investor, CRL, Morgan Stanley or an INT'L.com Affiliate remains an "affiliate" of the Company pursuant to Rule 144 and can sell all of his remaining Registrable Shares under Rules 144 or 145 within any three (3) month period; or (iii) such time as a Prior Investor, CRL, Morgan Stanley or an INT'L.com Affiliate ceases to be an affiliate of the Company pursuant to Rule 144 and all of the Prior Investor's, CRL's, Morgan Stanley's or the INT'L.com Affiliate's Registrable Shares may be sold pursuant to Rules 144(k) or 145(d)(2) or (3). 2.13 "STAND-OFF" AGREEMENT. Subject to the provisions of Sections 2.2 and 2.3, each Stockholder, if requested by the Company and the managing underwriter of an offering by the Company of Common Stock or other securities of the Company pursuant to a Registration Statement, shall agree not to sell publicly or otherwise transfer or dispose of any Registrable Shares or other securities of the Company held by such Stockholder for a specified period of time (not to exceed 180 days) following the effective date of such Registration Statement; PROVIDED, that: (a) such agreement shall only apply to the first Registration Statement covering Common Stock to be sold on its behalf to the public in an underwritten offering; and (b) all Stockholders holding not less than the number of shares of Common Stock held by such Stockholder (including shares of Common Stock issuable upon the conversion of Shares, or other convertible securities, or upon the exercise of options, warrants (including the Warrants) or rights) and all officers and directors of the Company enter into -9- similar agreements. 3. TRANSFERS OF CERTAIN RIGHTS. 3.1 PERMITTED TRANSFER. Subject to the provisions of Section 2.1 of this Agreement and the rights granted to each Stockholder pursuant to this Agreement may be transferred by such Stockholder to any person or entity (a) who (i) acquires at least 20% of the Registrable Shares held by such Stockholder and (ii) holds, as a result of such acquisition, at least 10% of the outstanding Registrable Shares or (b) who acquires 100% of the Registrable Shares held by such Stockholder; PROVIDED, HOWEVER, that the Company is given written notice by the transferee at the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which such rights are being assigned; and PROVIDED FURTHER, that no such transferee may further transfer such rights to any person or entity unless such person or entity is acquiring 100% of the aggregate number of Registrable Shares purchased or otherwise acquired by such transferee at the time such transferee obtained such rights from such Stockholder. In the event of a transfer of the rights by a Stockholder, such Stockholder shall continue to be entitled to such rights with respect to the Registrable Shares still held by such Stockholder, but shall not be entitled to transfer such rights to any person or entity unless such person or entity is acquiring 100% of the aggregate number of Registrable Shares then held by such Stockholder. 3.2 TRANSFEREES. Any transferee (other than a Stockholder who is a party to this Agreement) to whom rights hereunder are transferred shall, as a condition to such transfer, deliver to the Company a written instrument by which such transferee agrees to be bound by the obligations imposed upon holders of Registrable Shares under this Agreement to the same extent as if such transferee were a party hereto. 3.3 AFFILIATES. Notwithstanding anything to the contrary herein, any Stockholder may transfer rights granted to it hereunder to any Affiliate of such Stockholder to whom Registrable Shares are transferred and who delivers to the Company a written instrument in accordance with Section 3.2 above and containing the representation that the transfer is exempt from registration under the Securities Act. In the event of such transfer, such Affiliate shall be deemed a Stockholder and may only again transfer such rights to any other person or entity if such person or entity is acquiring 100% of the aggregate number of Registrable Shares purchased or otherwise acquired by such Affiliate at the time such Affiliate obtained such rights from the Stockholder in accordance with, and subject to, the provisions of this Section 3. 4. GENERAL. 4.1 NOTICES. All notices, requests, consents and other communications under this Agreement shall be in writing and shall be delivered by hand, by telecopier, by overnight mail or mailed by first class certified or registered mail, return receipt requested, postage prepaid: -10- If to the Company: Rory J. Cowan President & Chief Executive Officer 950 Winter Street, Suite 2410 Waltham, Massachusetts 02451 (or at such other address as may have been furnished in writing to the Prior Investors, CRL, Morgan Stanley and the INT'L.com Affiliates by the Company) with a copy to: George W. Lloyd, Esq. Kathy A. Fields, Esq. Testa, Hurwitz & Thibeault, LLP 125 High Street Boston, Massachusetts 02110 If to a Prior Investor, CRL, Morgan Stanley or the INT'L.com Affiliates, at its address set forth beneath its signature to this Agreement (or at such other address as may have been furnished in writing to the Company by such Stockholder). Notices provided in accordance with this Section 4 shall be deemed delivered upon personal delivery, receipt by telecopy or overnight mail, or 48 hours after deposit in the mail in accordance with the above. 4.2 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. 4.3 AMENDMENTS AND WAIVERS. Except as otherwise expressly set forth in this Agreement, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of not less than fifty-one percent (51%) of the Registrable Shares. No waivers of or exceptions to any term, condition or provision of this Agreement in any one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 4.4 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 4.5 CAPTIONS. The captions of the sections, subsections and paragraphs of this Agreement have been added for convenience only and shall not be deemed to be a part of this Agreement. -11- 4.6 SEVERABILITY. Each provision of this Agreement shall be interpreted in such manner as to validate and give effect thereto to the fullest lawful extent, but if any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable under applicable law, such provision shall be ineffective only to the extent so determined and such invalidity or unenforceability shall not affect the remainder of such provision or the remaining provisions of this Agreement. 4.7 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. 5. TERMINATION OF PRIOR REGISTRATION RIGHTS AGREEMENT. By their execution of this Agreement, the Company, the Prior Investors, CRL and Morgan Stanley who were parties to the Prior Registration Rights Agreement hereby terminate the Prior Registration Rights Agreement and the Company and the Prior Investors, CRL and Morgan Stanley who were parties to the Prior Registration Rights Agreement hereby enter into this Third Restated Registration Rights Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -12- IN WITNESS WHEREOF, the parties hereto have caused this Third Restated Registration Rights Agreement to be executed by their respective officers or representatives thereunto duly authorized, as of the date first above written. LIONBRIDGE TECHNOLOGIES, INC. By:________________________________________ Rory J. Cowan Chief Executive Officer & President CAPITAL RESOURCE LENDERS III, L.P. By: Capital Resource Partners III, L.C., its General Partner By: ______________________________________ Member CRP INVESTMENT PARTNERS III, LLC By: ______________________________________ Member GLOBAL PRIVATE EQUITY II LIMITED PARTNERSHIP By: Advent International Limited Partnership, General Partner By: Advent International Corporation, General Partner By:________________________________ -13- GLOBAL PRIVATE EQUITY II LIMITED - EUROPE LIMITED PARTNERSHIP By: Advent International Limited Partnership, General Partner By: Advent International Corporation, General Partner By:_________________________________ GLOBAL PRIVATE EQUITY II - PGGM LIMITED PARTNERSHIP By: Advent International Limited Partnership, General Partner By: Advent International Corporation, General Partner By:_________________________________ ADVENT EURO-ITALIAN DIRECT INVESTMENT PROGRAM LIMITED PARTNERSHIP By: Advent International Limited Partnership, General Partner By: Advent International Corporation, General Partner By:________________________________ ADVENT PARTNERS LIMITED PARTNERSHIP By: Advent International Limited Partnership, General Partner By:________________________________________ -14- MORGAN STANLEY VENTURE CAPITAL FUND II ANNEX, L.P. By: Morgan Stanley Venture Partners II, L.P., its General Partner By: Morgan Stanley Venture Capital II, Inc., Managing General Partner By:___________________________________ Name: Title: c/o Morgan Stanley Venture Partners II, L.P. 1221 Avenue of the Americas New York, NY 10020 MORGAN STANLEY VENTURE INVESTORS ANNEX, L.P. By: Morgan Stanley Venture Partners II, L.P., its General Partner By: Morgan Stanley Venture Capital II, Inc., Managing General Partner By:_______________________________ Name: Title: c/o Morgan Stanley Venture Partners II, L.P. 1221 Avenue of the Americas New York, NY 10020 ____________________________________________________ Rory J. Cowan 281 Fairhaven Road Concord, MA 01742 -15- ____________________________________________________ Milton Bordwin 87 Hillside Road Newton, MA 02461 ____________________________________________________ Marilyn Brady 105 Lexington Road Concord, MA 01742 ____________________________________________________ Barton L. Faber 4339 East Rose Lane Paradise Valley, AZ 85238 ____________________________________________________ Jeffrey M. Fitzgerald 37 Wedgewood Drive Hopkinton, MA 01748 FRANKENBERG FAMILY TRUST, ROBERT J. FRANKENBERG TTE, LINDA L. FRANKENBERG, TTE ____________________________________________________ c/o Robert J. Frankenberg 701 East Sunburst Lane Alpine, UT 84004 FLEET BANK, TRUSTEE FOR THE TH&T, LLP, DEFERRED EARNINGS TRUST, F/B/O GEORGE W. LLOYD ____________________________________________________ c/o George W. Lloyd Testa, Hurwitz & Thibeault, LLP High Street Tower 125 High Street Boston, MA 02110 -16- ____________________________________________________ Stephen C. Morris 40 Coolidge Road Concord, MA 01742 ____________________________________________________ IEA Private Investments Ltd c/o China Access Ltd. Attn: Mr. Mark Pu 25th Floor Penthouse Prince's Building, Central Hong Kong, China ____________________________________________________ Charles M. Sincerbeaux 15 Perry Lane Weston, MA 02193 ____________________________________________________ Paul Kavanagh c/o Archachon Strathmore Road Killiney, Co. Dublin, Ireland ____________________________________________________ Kenneth Coleman 133 Shaw Road Chestnut Hill, MA 02167 COWAN MANCHESTER TRUST DATED 9/22/94 By:_____________________________________________ Janet M. Smith, Trustee c/o Rackemann, Sawyer & Brewster One Financial Center Boston, MA 02111 COWAN STREAM TRUST DATED 4/21/95 By:_____________________________________________ Janet M. Smith, Trustee c/o Rackemann, Sawyer & Brewster One Financial Center Boston, MA 02111 -17- CORNERSTONE EQUITY INVESTORS IV, LLC By: _________________________________________________ Name: Title: c/o Michael E. Najjar 717 Fifth Avenue, Suite 1100 New York, NY 10022 DAKOTA/EGI, LLC By: Dakota Capital Partners, L.L.C., its Managing Member By: _________________________________________________ Name: Title: c/o Jeffrey Wellek 225 West Washington Street, Suite 1600 Chicago, IL 60606 _____________________________________________________ Roger O. Jeanty 86 Hunting Lane Sherborn, MA 01770 _____________________________________________________ Steven L. Fingerhood 87 Hillside Avenue Mill Valley, CA 94941 _____________________________________________________ John Arcari -18- _____________________________________________________ Rod Dammeyer _____________________________________________________ Jeffrey A. Wellek c/o Dakota Capital Partners, L.L.C. 225 West Washington Street, Suite 1600 Chicago, IL 60606 _____________________________________________________ Mark S. Hauser c/o DL Partners, L.P. 350 Park Avenue, 14th Floor New York, NY 10022 _____________________________________________________ Alex McDonnell _____________________________________________________ Dana J. O'Brien c/o Cornerstone Equity Investors IV, L.P. 717 Fifth Avenue, Suite 1100 New York, NY 10022 _____________________________________________________ Michael Najjar c/o Cornerstone Equity Investors IV, L.P. 717 Fifth Avenue, Suite 1100 New York, NY 10022 _____________________________________________________ Robert C. Sprung 7 Gerry Street Cambridge, MA 02138 -19- _____________________________________________________ Tracy Jeanty _____________________________________________________ Stanford Fingerhood DL PARTNERS, L.P. By: _________________________________________________ Name: Title: -20- SCHEDULE A Prior Investors Global Private Equity II Limited Partnership Global Private Equity II Limited Partnership - Europe Limited Partnership Global Private Equity II Limited Partnership - PGGM Limited Partnership Advent Euro-Italian Direct Investment Program Limited Partnership Advent Partners Limited Partnership Morgan Stanley Venture Capital Fund II Annex, LP Morgan Stanley Venture Capital Investors Annex, L.P. Rory J. Cowan Milton Bordwin Marilyn Brady Barton L. Faber Jeffrey M. Fitzgerald Frankenberg Family Trust, Robert J. Frankenberg TTE, Linda L. Frankenberg, TTE Fleet Bank Trustee for the TH&T, LLP, Deferred Earnings Trust, F/B/O of George W. Lloyd Stephen C. Morris IEA Private Investments Ltd. Charles M. Sincerbeaux Paul Kavanagh Kenneth Coleman Cowan Manchester Trust dated 9/22/94 Cowan Stream Trust dated 4/21/95 SCHEDULE B INT'L.com Affiliates Cornerstone Equity Investors IV, L.P. Dakota/EGI, LLC Roger O. Jeanty Steven L. Fingerhood John Arcari Rod Dammeyer Jeffrey A. Wellek Mark S. Hauser Alex McDonnell Dana J. O'Brien Michael Najjar Stanford Fingerhood Tracy Jeanty Mark S. Hauser DL Partners, L.P. Robert C. Sprung EX-5 6 ex-5.txt EXHIBIT 5 Exhibit 5 ESCROW AGREEMENT This Escrow Agreement (this "ESCROW AGREEMENT") is made and entered into as of May 22, 2000 (the "EFFECTIVE TIME") by and among Lionbridge Technologies, Inc., a Delaware corporation ("PARENT"); INT'L.com, Inc., a Delaware corporation ("INT'L.COM"); Steven Fingerhood, as the representative of the Holders (as defined below) (the "INDEMNIFICATION REPRESENTATIVE"); and American Stock Transfer & Trust Co., as escrow agent for the Escrow Shares (as defined below) (the "ESCROW AGENT"); and each person who executes and delivers to Parent an Instrument of Accession in the form of Schedule I hereto. A. LTI Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Parent ("MERGER SUB"), INT'L.com and Parent have entered into an Amended and Restated Agreement and Plan of Reorganization dated as of March 30, 2000 (the "MERGER AGREEMENT"), setting forth certain terms and conditions pursuant to which Merger Sub is being merged into INT'L.com (the "MERGER"). B. Pursuant to Section 2.1 of the Merger Agreement, Parent Merger Shares (as defined therein) are to be issued to security holders of INT'L.com (collectively, the "HOLDERS"). C. The Merger Agreement provides (a) that 10% of the Parent Merger Shares issuable at Closing pursuant to the Merger Agreement (excluding any Parent Merger Shares issuable after the Closing with respect to Outstanding INT'L.com Options, the Excluded Shares, the Series C Excluded Shares and the Series D Excluded Shares), rounded to the nearest whole shares (the "Escrow Amount") will be placed in an escrow account to secure certain indemnification obligations of the Holders to Parent under the Merger Agreement on the terms and conditions set forth therein and herein and (b) that each Holder shall execute this Escrow Agreement as a condition to receiving any Parent Merger Shares. D. Unless otherwise indicated herein, all terms used herein without definition shall have the same meaning as set forth in the Merger Agreement. NOW THEREFORE, for and in consideration of the foregoing and the mutual covenants and agreements contained in the Merger Agreement and in this Escrow Agreement, the parties agree as follows: 1. ESTABLISHMENT OF ESCROW ACCOUNT 1.1 DEPOSIT OF SHARES. Parent shall deposit as soon as practicable on the Holders' behalf with the Escrow Agent stock certificates representing the Escrow Shares issued pursuant to the Merger registered in the respective names of the Holders and in the relative amounts set forth on EXHIBIT 1.1 hereto (the "INITIAL ESCROW SHARES"), together with stock transfer powers signed in blank with guaranteed signatures. Any shares of Parent capital stock that result from any share dividend, reclassification, stock split, subdivision or combination of shares, recapitalization, merger or other events made with respect to any Escrow Shares held in escrow under this Escrow Agreement ("ADDITIONAL SHARES") shall, subject to Section 3.1, be delivered to the Escrow Agent and shall be held by the Escrow Agent in accordance with this Escrow Agreement. Unless otherwise indicated, as used in this Escrow Agreement, the term "ESCROW SHARES" includes the Initial Escrow Shares and any Additional Shares. The Escrow Agent agrees to accept delivery of the Escrow Shares and to hold such Escrow Shares in escrow in accordance with this Escrow Agreement and to release the Escrow Shares, and all related stock transfer powers out of escrow as provided in this Escrow Agreement. The Escrow Agent shall be under no obligation to preserve, protect or exercise rights in the Escrow Shares and shall be responsible only for the taking of reasonable measures to maintain the physical safekeeping thereof. The Escrow Agent shall have no responsibility for the genuineness, validity, market value, title or sufficiency for any intended purposes of the Escrow Shares. 1.2 DIVIDENDS; VOTING AND RIGHTS OF OWNERSHIP. Any cash dividends, dividends payable in property or other distributions of any kind (except for Additional Shares) made in respect of the Escrow Shares shall be distributed currently by Parent directly to the Holders on a pro rata basis. Each Holder shall have the right to vote the Escrow Shares held in escrow for the account of such Holder so long as such Escrow Shares are held in escrow, and Parent and the Escrow Agent shall take all steps necessary to allow the exercise of such rights. While the Escrow Shares remain in the Escrow Agent's possession pursuant to this Escrow Agreement, the Holders shall retain and shall be able to exercise all other incidents of ownership of the Escrow Shares that are not inconsistent with the terms and conditions hereof. Any income tax reporting required with respect to dividends paid on the Escrow Shares shall be the responsibility of Parent. 1.3 POWER TO TRANSFER ESCROW SHARES. The Escrow Agent is hereby granted the power to effect any transfer of the Escrow Shares provided for in this Escrow Agreement. 1.4 AGREEMENT. Each of the Holders has, either by virtue of approval of the Merger Agreement or through the execution of this Escrow Agreement and a Letter of Transmittal, (i) agreed to be severally bound by the indemnification provisions set forth in the Merger Agreement, such Letter of Transmittal and this Escrow Agreement and (ii) confirmed that the issuance of the Escrow Amount of the Parent Merger Shares pursuant to the Merger Agreement is subject to this Escrow Agreement and the Letter of Transmittal. 2. RESOLUTION OF CLAIMS 2.1 INDEMNIFICATION OBLIGATIONS. The Escrow Shares shall serve as the first source, and the sole source until the Release Date (and thereafter shall serve as a "cap" on indemnification payments, subject to the proviso below), of payment for the indemnity obligations of the Holders under the Merger Agreement, PROVIDED, HOWEVER, that each Holder shall further be severally liable for any breach by such Holder of such Holder's representation in a Letter of Transmittal, it being agreed and understood that except as set forth in the immediately preceding proviso and Sections 3.3 and 11 below, no Holder shall have any liability beyond such Holder's allocable portion of the Escrow Shares as set forth on EXHIBIT 1.1 hereto. The liability of any single Holder for indemnification obligations pursuant to Article IX of the Merger Agreement shall be limited to such Holder's PRO RATA share of any indemnity obligations based on the number of Escrow Shares deposited in escrow by such Holder relative to the aggregate number of Escrow Shares and the aggregate liability of any single Holder for indemnification obligations pursuant to Article IX of the Merger Agreement shall be equal to a dollar amount equal to the Parent Average Closing Price multiplied by the aggregate number of Escrow Shares deposited in escrow by such Holder; PROVIDED, HOWEVER, that there will be no limitation on the indemnification obligations of any person arising out of criminal activity or fraud by such person, including, without limitation, any actions in such person's capacity as an employee, officer or director of INT'L.com or its Subsidiaries, or for any Holder for breaches of any representation or warranty contained in the Letter of Transmittal delivered by such Holder. For the purposes of this Escrow Agreement, those obligations shall continue in accordance with the Merger Agreement, notwithstanding the merger of Merger Sub into INT'L.com pursuant to the Merger Agreement. Payment for any amount determined as provided below to be owing to Parent under such indemnity obligations under the Merger Agreement ("DAMAGES") and any award of attorneys' fees and charges (a -2- "PREVAILING PARTY AWARD") owing to a party hereto pursuant to Section 2.3(c)(iv) or 11.2 of this Agreement shall be made by the release of Escrow Shares to the appropriate party (each such payment, an "ESCROW ADJUSTMENT"), subject to the limitations set forth in Section 9.3 of the Merger Agreement. Notwithstanding anything to the contrary herein or in the Merger Agreement, Parent shall not be entitled to receive payment of any portion of a Prevailing Party Award which is already a part of Damages (i.e., there shall be no double payment of legal fees or expenses). Any Escrow Adjustments and corresponding release to Parent of Escrow Shares shall be made in proportion to each of the Holders' interest in the Escrow Shares as of the date or dates specified as set forth on EXHIBIT 1.1, and in the manner provided for in this Escrow Agreement. Each Escrow Adjustment to the Escrow Shares shall be made by the release to Parent of Escrow Shares having an aggregate value equal to the Damages and the release to Parent or the Indemnification Representative, as applicable, of any Prevailing Party Award, with the per share value of such shares being based, for all purposes under this Escrow Agreement, on the Parent Average Closing Price (adjusted for any share dividend, reclassification, stock split, subdivision or combination of shares, recapitalization, merger or other events) notwithstanding any changes in market value of Parent Common Stock. In lieu of releasing any fractional Escrow Shares, any fraction of a released Escrow Share that would otherwise be released shall be rounded to the nearest whole Escrow Share. 2.2 NOTICE OF CLAIMS. Promptly after the receipt by Parent of notice or discovery of any claim, damage, or legal action or proceeding giving rise to indemnification rights under the Merger Agreement, after giving effect to the Threshold Amount (a "CLAIM"), Parent shall give the Indemnification Representative written notice of such Claim, including reasonable detail regarding the nature, basis and dollar amount thereof, to the extent reasonably ascertainable (a "NOTICE OF CLAIM") and shall provide a copy of such notice to the Escrow Agent. Each Notice of Claim by Parent shall be in writing and shall be delivered on or before the Release Date (as defined in Section 3.1 below). Failure to provide prompt Notice of Claim shall result in a loss by claimant of rights to pursue such claim hereunder and under the Merger Agreement, but only if, and only to the extent, such failure to provide timely such Notice of Claim prejudices the rights of the Indemnification Representative or Holders to properly defend or otherwise limit damages. 2.3 RESOLUTION OF CLAIMS. Any Notice of Claim received by the Indemnification Representative and the Escrow Agent pursuant to Section 2.2 above shall be resolved as follows: (a) UNCONTESTED CLAIMS. In the event that the Indemnification Representative does not contest a Notice of Claim (an "UNCONTESTED CLAIM") in writing within thirty (30) calendar days after receipt thereof (the "FIRST NOTICE PERIOD"), as provided below in Section 2.3(b), Parent may deliver to the Escrow Agent, with a copy to the Indemnification Representative, a written demand by Parent (a "PARENT DEMAND") stating that a Notice of Claim has been given as required in this Escrow Agreement and that no notice of contest has been received from the Indemnification Representative during the period specified in this Escrow Agreement and further setting forth the proposed Escrow Adjustments to be made in accordance with this Section 2.3(a). The Indemnification Representative may object within thirty (30) calendar days after receipt of the Parent Demand (the "SECOND NOTICE PERIOD") in a written notice delivered to Parent and the Escrow Agent to the computations or other administrative matters relating to the proposed Escrow Adjustments (but may not, after the First Notice Period, object to the validity or amount of the Claim previously disclosed in the Notice of Claim), whereupon neither the Escrow Agent nor Parent shall make any of the Escrow Adjustments until either: (i) Parent and the Indemnification Representative shall have given the Escrow Agent written notice setting forth agreed Escrow Adjustments, or (ii) the matter is resolved as provided in Sections 2.3(b) and 2.3(c). Upon -3- satisfaction of the foregoing, the Escrow Agent, as directed in writing by Parent, and Parent shall promptly take all steps to implement the final Escrow Adjustments. (b) CONTESTED CLAIMS. In the event that the Indemnification Representative gives written notice to Parent and the Escrow Agent contesting all or a portion of a Notice of Claim (a "CONTESTED CLAIM") within the First Notice Period, matters that are subject to third party claims against Parent or INT'L.com in a litigation or arbitration shall await the final decision, award or settlement of such litigation or arbitration, while matters that arise between Parent on the one hand and INT'L.com and/or the Holders on the other hand, including any disputes regarding performance or nonperformance of a party's obligations under this Escrow Agreement ("ARBITRABLE CLAIMS") shall be settled in accordance with Section 2.3(c) below. Any portion of a Notice of Claim that is not contested or is subsequently settled by Parent and the Indemnification Representative shall be resolved as set forth above in Section 2.3(a). If written notice is received by the Escrow Agent that a Notice of Claim is contested by the Indemnification Representative, then the Escrow Agent shall hold hereunder after what would otherwise be the Release Date (as defined in Section 3.1 below), the number of Escrow Shares as specified in the Release Notice as Retained Escrow (as defined in Section 3.1) or as otherwise provided in Section 3.1, until the earlier of: (i) receipt of a settlement agreement executed by Parent and the Indemnification Representative setting forth a resolution of the Notice of Claim and the Escrow Adjustments; (ii) receipt of a written notice from Parent (a "PARENT DISTRIBUTION NOTICE") attaching a copy of the final award or decision of the arbitrator and setting forth the Escrow Adjustments (Parent shall at the same time provide a copy of the Parent Distribution Notice to the Indemnification Representative); or (iii) receipt of a written notice from the Indemnification Representative (a "REPRESENTATIVE DISTRIBUTION NOTICE") attaching a copy of the final award or decision of the arbitrator that no Escrow Adjustments are to be made as a result of such award (the Indemnification Representative shall at the same time provide a copy of the Representative Distribution Notice to Parent). If the earliest of the three events described in the preceding sentence is (i) or (ii), the Escrow Agent shall, within twenty (20) calendar days of receipt of the settlement agreement or the Parent Distribution Notice, as applicable, (a) release to Parent the number of Escrow Shares specified in the Parent Distribution Notice as the Escrow Adjustments and (b) if the Release Date has occurred, and there are no remaining unresolved Contested Claims, release to the Holders the balance of the Escrow Shares and the related stock transfer powers. If the earliest of the three events described above is (iii) and the Release Date has occurred, and there are no remaining unresolved Contested Claims, the Escrow Agent shall, within twenty (20) calendar days of receipt of the Representative Distribution Notice, release to the Holders the balance of the Escrow Shares and the related stock transfer powers, pro rata in accordance with EXHIBIT 1.1, PROVIDED THAT if the Release Date has not occurred the Escrow Shares shall continue to be held pursuant to the terms of this Agreement. If the award or decision of the arbitrator concludes that Escrow Shares are to be released to Parent in satisfaction of Damages and Prevailing Party Awards, the arbitrator shall specify the number of Escrow Shares (determining value as provided in the penultimate sentence of Section 2.1 above, and in any event, subject to the first sentence of such Section 2.1) to be so released to Parent either in the arbitrator's final award or decision or a supplementary report or finding. In the event that the Escrow Agent institutes an action for interpleader in accordance with Section 4.6 of this Escrow Agreement as a result of a dispute between the parties, the parties hereby agree to jointly seek to stay such interpleader action pending the resolution of any arbitration commenced by the parties or any dispute pursuant to this Section 2.3(b) and Section 2.3(c). -4- (c) ARBITRATION. (i) ARBITRATION RULES. Any Arbitrable Claim, and any dispute between the Holders and Parent under this Escrow Agreement, shall be submitted to final and binding arbitration before a single arbitrator jointly selected by Parent and the Indemnification Representative (or, if such parties cannot agree on an arbitrator, before a single arbitrator jointly selected by one arbitrator selected by Parent and one arbitrator selected by the Indemnification Representative) in Boston, Massachusetts in accordance with the commercial arbitration rules of the American Arbitration Association. (ii) BINDING EFFECT. The final decision of the arbitrator shall be furnished in writing to the Escrow Agent, the Indemnification Representative, the Holders and Parent and will constitute a conclusive determination of the issue in question, binding upon the Holders, the Indemnification Representative and Parent. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve an Arbitrable Claim, PROVIDED, HOWEVER, that for all purposes of valuing Escrow Shares, the arbitrator shall rely upon the provision set forth in the penultimate sentence of Section 2.1 above. Any judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction over the subject matter thereof. (iii) COMPENSATION OF ARBITRATOR. The arbitrator will be compensated for his or her services, as provided below in Section 2.3(c)(iv), in accordance with the commercial arbitration rules of the American Arbitration Association. (iv) PAYMENT OF COSTS. Subject to the limitations in the Merger Agreement, the substantially prevailing party in any arbitration shall be entitled to an award of attorneys' fees and costs, and all costs of arbitration, including those provided for above, will be paid by the losing party, subject in each case to a determination by the arbitrator as to which party is the substantially prevailing party and the amount of such fees and costs to be allocated to such party and subject to the terms of Section 2.3(c)(iii). Any amounts payable to Parent by or on account of the Holders under this subsection will be disbursed from the Escrow Shares as if the amount of such awarded fees and expenses were an Uncontested Claim. (v) TERMS OF ARBITRATION. The arbitrator chosen in accordance with these provisions shall not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or the provisions of this Escrow Agreement, the Merger Agreement or any other documents that are executed in connection therewith. (vi) EXCLUSIVE REMEDY. Arbitration or mediation under this Section 2.3(c) shall be the sole and exclusive remedy of the parties for any Arbitrable Claim arising out of this Escrow Agreement. 3. RELEASE FROM ESCROW 3.1 RELEASE OF ESCROW SHARES. The Escrow Shares and all related stock transfer powers shall be released by the Escrow Agent as soon as practicable, taking into account the notices to be delivered under this Section 3.1, after the earliest of (i) publication of Parent's audited financial results for the year ended December 31, 2000 or (ii) expiration of the survival period for representations and warranties as set forth in Article IX and XI of the Merger Agreement (the "RELEASE DATE") LESS: -5- (a) any Escrow Shares delivered to or deliverable to Parent in satisfaction of Uncontested Claims or Contested Claims which have been settled by the parties hereto, and (b) any of the Escrow Shares subject to delivery to Parent in accordance with Section 2.3(b) with respect to any then pending Contested Claims. Parent shall give written notice to the Indemnification Representative and the Escrow Agent of the publication of Parent's audited financial results for the year ended December 31, 2000, if the Release Date shall not already have transpired. Promptly, and no later than seven (7) of the Escrow Agent's business days ("BUSINESS DAYS") after the Release Date, Parent and the Indemnification Representative shall deliver to the Escrow Agent a written notice (a "RELEASE NOTICE") setting forth the number of Escrow Shares to be released by the Escrow Agent (the "RELEASED ESCROW") including the number of Escrow Shares to be released to each Holder and the number of Escrow Shares to be retained as provided in this Section 3.1 (the "RETAINED ESCROW"). Parent and the Indemnification Representative shall make a good faith effort to agree on a reasonable portion of the Escrow Shares to retain for pending Contested Claims and Prevailing Party Awards, if any. Until such agreement is reached, or a determination is made in accordance with Section 2.3(c), the remaining Escrow Shares shall be the Retained Escrow. The Released Escrow shall be released to the Holders in proportion to their respective interests in the Initial Escrow Shares as set forth on EXHIBIT 1.1. In lieu of releasing any fractional Escrow Shares, any fraction of a released Escrow Share that would otherwise be released shall be rounded to the nearest whole Escrow Share. The Release Notice shall instruct the Escrow Agent to deliver (by registered mail or overnight courier service) to each Holder evidence of ownership of the number of Escrow Shares in the names of the appropriate Holders. The Escrow Agent shall not be required to take such action until the Escrow Agent has received the Release Notice executed by Parent and the Indemnification Representative (which Parent and Indemnification Representative agree to do promptly and in good faith) or, in the event Parent and the Indemnification Representative fail to execute and deliver a jointly approved Release Notice, a final award or decision which specifies the distribution of the Escrow Shares. 3.2 RELEASE OF RETAINED ESCROW. Upon the resolution of Contested Claims as provided for in Section 2.3(b), the Retained Escrow shall be subject to release by the Escrow Agent to Parent and/or to the Holders in accordance with Section 2.3(b), this Section and as otherwise provided for in this Escrow Agreement. The Escrow Agent, Parent and the Indemnification Representative shall cause the Escrow Agent to transfer to Parent the number of Escrow Shares to be released to Parent pursuant to Section 2.3(b) and transfer the number of Escrow Shares that are to be either distributed to the Holders pursuant to Section 3.1 or further retained by the Escrow Agent pending the resolution of Contested Claims and/or Prevailing Party Awards. Any Escrow Shares released from escrow to Parent shall be subject to cancellation by Parent without requiring Parent to pay any consideration whatsoever in receipt thereof to INT'L.com or any of the Holders. 3.3 EXPENSES OF INDEMNIFICATION REPRESENTATIVE. The Indemnification Representative shall be entitled to be reimbursed his reasonable out-of-pocket expenses and the reasonable fees and disbursements of counsel retained by him. Such reimbursements shall be treated as an Uncontested Claim on a pro rata basis among the Holders (based on the percentages set forth on EXHIBIT 1.1), for all services performed pursuant to the Merger Agreement and this Escrow Agreement; PROVIDED, HOWEVER, that payment of any Escrow Adjustment shall take priority over payments to the Indemnification Representative, as provided herein. The Escrow Agent shall follow the joint written instructions of the Indemnification Representative and Parent concerning the release of Escrow Shares relating to the reimbursement of the Indemnification Representative. If upon termination of this Agreement, the Indemnification Representative shall not have received the reimbursements to which he is entitled hereunder, then the Indemnification Representative shall be entitled to reimbursement from the Holders on a several basis. -6- 4. ESCROW AGENT 4.1 DUTIES. The duties and responsibilities of the Escrow Agent hereunder shall be entirely administrative and not fiduciary or discretionary in nature and shall be determined solely by the express provisions of this Escrow Agreement and no duties shall be implied. The Escrow Agent shall be obligated to act only in accordance with written instructions received by it as provided in this Escrow Agreement and is authorized hereby to comply with any orders, judgments, or decrees of any court with or without jurisdiction and shall not be liable as a result of its compliance with the same. Parent, INT'L.com and the Holders agree that, notwithstanding anything to the contrary herein, the Escrow Agent shall not be responsible for any of the other agreements referred to or described herein (including, without limitation, the Merger Agreement) or for determining or compelling compliance therewith, and shall not otherwise be bound thereby. 4.2 LEGAL OPINIONS. As to any questions arising in connection with the administration of this Escrow Agreement, the Escrow Agent may rely absolutely upon the joint instruction of Parent and the Indemnification Representative or the opinions given to the Escrow Agent by its outside counsel and shall be free of liability for acting or refraining from acting in reliance on such opinions. 4.3 SIGNATURES. The Escrow Agent may rely absolutely upon the genuineness and authorization of the signature and purported signature of any party upon any instruction, notice, release, receipt or other document delivered to it pursuant to this Escrow Agreement. 4.4 RECEIPTS AND RELEASES. The Escrow Agent may, as a condition to the release or disposition of securities as provided herein, require from the payee or recipient a receipt therefor and, upon final payment or disposition, a release of the Escrow Agent from any liability arising out of its execution or performance of this Escrow Agreement, such release to be in a form reasonably satisfactory to the Escrow Agent. 4.5 REFRAIN FROM ACTION. The Escrow Agent shall be entitled to refrain from taking any legal or other action contemplated by this Escrow Agreement in the event it becomes aware of any dispute between INT'L.com, the Holders and Parent as to any material facts or as to the happening of any event precedent to such action and the Escrow Agent shall be entitled to refrain from taking any action that might in its judgement involve or cause it to incur any expense or liability unless it shall first have been furnished with acceptable indemnification. 4.6 INTERPLEADER. If any controversy arises between the parties hereto or with any third person, the Escrow Agent shall not be required to determine the same or to take any action, but the Escrow Agent in its discretion may institute such interpleader or other proceedings in connection therewith as the Escrow Agent may deem proper, and in following either course, the Escrow Agent shall not be liable. 4.7 OTHER PROVISIONS. The Escrow Agent may rely upon and shall be protected in acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document. The Escrow Agent shall be not be liable for any action taken or omitted by it in good faith unless a court of competent jurisdiction determines that the Escrow Agent's willful -7- misconduct was the primary cause of a loss to the Parent, the Indemnification Representative, or the Holders. In the administration of this Escrow Agreement, the Escrow Agent may execute any of its powers and perform its duties hereunder directly or through agents or attorneys and may, consult with counsel, accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons. 4.8 SALE OF ESCROW SHARES. Notwithstanding anything herein to the contrary, the Escrow Agent shall have no duty to sell the Escrow Shares hereunder. 5. INDEMNIFICATION 5.1 WAIVER AND INDEMNIFICATION. Parent, INT'L.com, the Indemnification Representative and the Holders agree to and hereby do waive any suit, claim, demand or cause of action of any kind which they may have or may assert against the Escrow Agent arising out of or relating to the execution or performance by the Escrow Agent of this Escrow Agreement, unless such suit, claim, demand or cause of action is based upon the willful neglect, gross negligence or bad faith of the Escrow Agent. Parent and INT'L.com further agree, jointly and severally, to indemnify and hold Escrow Agent and its directors, officers, agents and employees (collectively, the "INDEMNITEES") harmless from and against any and all claims, liabilities, losses, damages, fines, penalties, and expenses, including out-of-pocket, incidental expenses, reasonable legal fees and expenses (including the reasonable fees and expenses of not more than one outside counsel), and the allocated costs and expenses of in-house counsel and legal staff ("LOSSES") that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instructions or other directions upon which the Escrow Agent is authorized to rely pursuant to the terms of this Escrow Agreement, provided the Escrow Agent has not acted with gross negligence, willful neglect or bad faith. In addition, to and not in limitation of the immediately preceding sentence, Parent and INT'L.com also agree, jointly and severally, to indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against the Indemnitees or any of them in connection with or arising out of the Escrow Agent's performance under this Escrow Agreement, provided the Escrow Agent has not acted with gross negligence, willful neglect or bad faith. The provisions of this Section 5.1 shall survive the termination of this Escrow Agreement and the resignation or removal of the Escrow Agent for any reason. Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of such loss or damage and regardless of the form of action. 5.2 CONDITIONS TO INDEMNIFICATION. In case any litigation is brought against the Escrow Agent in respect of which indemnification may be sought hereunder, the Escrow Agent shall give prompt notice of that litigation to the parties hereto, and the parties upon receipt of that notice shall have the obligation and the right to assume the defense of such litigation with counsel reasonably satisfactory to the Escrow Agent; PROVIDED THAT failure of the Escrow Agent to give that notice shall not relieve the parties hereto from any of their obligations under this Section 5 unless that failure prejudices the defense of such litigation by said parties. At its own expense, the Escrow Agent may employ separate counsel and participate in the defense. The parties hereto shall not be liable for any settlement without their respective consents. -8- 6. ACKNOWLEDGMENT BY THE ESCROW AGENT By execution and delivery of this Escrow Agreement, the Escrow Agent acknowledges that the terms and provisions of this Escrow Agreement are acceptable and it agrees to carry out the provisions of this Escrow Agreement on its part. 7. RESIGNATION OR REMOVAL OF ESCROW AGENT; SUCCESSOR 7.1 RESIGNATION AND REMOVAL. 7.1.1 NOTICE. The Escrow Agent may resign as such following the giving of thirty (30) days' prior written notice to the other parties hereto. Similarly, the Escrow Agent may be removed and replaced following the giving of thirty (30) days' prior written notice to be given to the Escrow Agent jointly by the Indemnification Representative and Parent. In either event, the duties of the Escrow Agent shall terminate thirty (30) days after the date of such notice (or as of such earlier date as may be mutually agreeable), and the Escrow Agent shall then deliver the balance of the Escrow Shares, and all related stock transfer powers then in its possession to a successor Escrow Agent as shall be appointed by the other parties hereto as evidenced by a written notice filed with the Escrow Agent. 7.1.2 COURT APPOINTMENT. If the parties hereto are unable to agree upon a successor or shall have failed to appoint a successor prior to the expiration of thirty (30) days following the date of the notice of resignation or removal, then the acting Escrow Agent, at the expense of the Holders and Parent, may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent or other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. 7.2 SUCCESSORS. Every successor appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the Indemnification Representative and Parent, an instrument in writing accepting such appointment hereunder, and thereupon such successor, without any further act, shall become fully vested with all the duties, responsibilities and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of its successor or any of the parties hereto, execute and deliver an instrument or instruments transferring to such successor all the rights of such predecessor hereunder, and shall duly assign, transfer and deliver all property, securities and monies held by it pursuant to this Escrow Agreement to its successor. Should any instrument be required by any successor for more fully vesting in such successor the duties, responsibilities, and obligations hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on the request of any of the other parties hereto, be executed, acknowledged, and delivered by the predecessor. 7.3 NEW ESCROW AGENT. In the event of an appointment of a successor, the predecessor shall cease to be escrow agent of any funds, securities or other assets and records it may hold pursuant to this Escrow Agreement, and the successor shall become such escrow agent. 7.4 RELEASE. Upon acknowledgment by any successor Escrow Agent of the receipt of the then remaining balance of the Escrow Shares, the then acting Escrow Agent shall be fully released and relieved of all duties, responsibilities and obligations under this Escrow Agreement that may arise and accrue thereafter. -9- 7.5 SUCCESSORS. Any corporation or association into which the Escrow Agent in its individual capacity may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Escrow Agent in its individual capacity shall be a party, or any corporation or association to which all or substantially all the corporate trust business of the Escrow Agent in its individual capacity may be sold or otherwise transferred, shall be the Escrow Agent hereunder without further act. 8. FEE The Escrow Agent will be paid by Parent as billed for services and expenses hereunder in accordance with the fee schedule attached hereto as EXHIBIT 8, (which fee schedule is subject to change on an annual basis at the same rate at which the Escrow Agent changes its rates generally for comparable services provided to its other customers). Without limiting the foregoing, Parent will reimburse the Escrow Agent for reasonable costs and expenses incurred in the preparation and administration of this Agreement in the manner contemplated by this Agreement, all in accordance with the fee schedule attached hereto as EXHIBIT 8. In the event that the Escrow Agent is made a party to litigation with respect to the property held hereunder, or brings an action in interpleader, or in the event that the conditions to this Escrow Agreement are not promptly fulfilled, or the Escrow Agent is required to render any service not provided for in this Escrow Agreement and fee schedule, or there is any assignment of the interests of this Escrow Agreement or any modification hereof, the Escrow Agent shall be entitled to reasonable compensation from Parent for such extraordinary services and reimbursement for all fees, costs, liability, and expenses, including attorneys fees and expenses. 9. INDEMNIFICATION REPRESENTATIVE 9.1 APPOINTMENT AND AUTHORITY. The Holders have, by either virtue of approval of the Merger Agreement or through the execution of this Escrow Agreement, irrevocably consented to the appointment of Steven Fingerhood as the Indemnification Representative as representative of the Holders and as the attorney-in-fact for and on behalf of each Holder, and, subject to the express limitations set forth below, the taking by the Indemnification Representative of any and all actions and the making of any decisions required or permitted to be taken by him under this Escrow Agreement, including but not limited to the exercise of the power to: (i) authorize delivery to Parent of the Escrow Shares, or any portion thereof, in satisfaction of Claims otherwise in connection with an Escrow Adjustment, (ii) agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such Claims, (iii) resolve any Claims, and (iv) take all actions necessary in the judgment of the Indemnification Representative for the accomplishment of the foregoing and all of the other terms, conditions, and limitations of this Escrow Agreement. Any notice given to the Indemnification Representative will constitute notice to each and all of the Holders at the time notice is given to the Indemnification Representative. Any action taken by, or notice or instruction received from, the Indemnification Representative will be deemed to be an action by, or notice or instruction from, each and all of the Holders. Parent and the Escrow Agent will disregard any notice or instruction received from any Holder other than the Indemnification Representative with regard to this Escrow Agreement. The Indemnification Representative shall have unlimited authority and power to act on behalf of each Holder with respect to this Escrow Agreement and the disposition, settlement, or other handling of all Claims, notices, rights, or obligations arising under this Escrow Agreement so long as all Holders are treated in the same manner (in respect of their proportional interests in the Escrow Shares). Until notified in writing by the Indemnification Representative that such Indemnification Representative has resigned or by a majority in interest of the Holders that the Indemnification Representative has been removed, the Escrow Agent -10- may act upon the directions, instructions and notices of the Indemnification Representative named herein or any successor named in a writing signed by a majority-in-interest of the Holders and filed with the Escrow Agent. 9.2 INDEMNIFICATION. Parent, INT'L.com, the Surviving Corporation and the Holders agree to and hereby do waive any suit, claim, demand or cause of action of any kind which they may have or may assert against the Indemnification Representative, in his capacity as such, arising out of or relating to the execution or performance by the Indemnification Representative hereunder, unless such suit, claim, demand or cause of action is based upon the willful neglect, gross negligence or bad faith of the Indemnification Representative. The Indemnification Representative shall not suffer any liability or loss for any act performed or omitted to be performed by him under this Escrow Agreement in the absence of adjudicated gross negligence, bad faith or willful misconduct. The Indemnification Representative may consult with counsel and other experts as may be reasonably necessary to advise him with respect to his rights and obligations hereunder, with the fees and expenses thereof to be paid as set forth in Section 3.3 above, and the Indemnification Representative shall be fully protected by any act taken, suffered, permitted, or omitted in good faith in accordance with the advice of such counsel and experts. The Indemnification Representative shall not be responsible for the sufficiency or accuracy of the form, execution, validity, or genuineness of documents or securities now or hereafter deposited hereunder, or of any endorsement thereof or for any lack of endorsement thereon, or for any description therein, nor shall he be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such document, security or endorsement, and the Indemnification Representative shall be fully protected in relying upon any written notice, demand, certificate or document which he in good faith believes to be genuine. 9.3 DEATH OR DISABILITY; SUCCESSORS. In the event of the death or permanent disability of the Indemnification Representative, or his resignation as the Indemnification Representative, a successor Indemnification Representative shall be elected by a majority vote of the Holders, with each Holder to be given a vote equal to his proportionate share of the Escrow Shares. The Holders shall cause to be delivered to Parent and the Escrow Agent prompt written notice of such election of a successor Indemnification Representative. Each successor Indemnification Representative shall have all of the power, authority, rights, and privileges conferred by this Agreement upon the original Indemnification Representative, and the term, "INDEMNIFICATION REPRESENTATIVE" as used herein shall be deemed to include any successor Indemnification Representative. 10. TERMINATION; DEFICIENCY CLAIMS This Escrow Agreement and the escrow created hereby shall terminate following Escrow Agent's delivery and release of all remaining Escrow Shares, and all related stock transfer powers to the Holders and/or Parent pursuant to Section 2 or 3. In the event that upon the termination of this Escrow Agreement, the value of the Escrow Shares released to Parent pursuant to the provisions of this Escrow Agreement (determined as provided in the penultimate sentence of Section 2.1 above) is insufficient to pay in full to Parent the total amount of the Damages and Prevailing Party Awards to which it is entitled at that time, if any, then, Parent shall have no further recourse; PROVIDED, HOWEVER, that each Holder shall further be severally liable for any breach by such Holder of such Holder's representation as to title to shares of INT'L.com common and/or preferred stock made by such Holder in a Letter of Transmittal. -11- 11. MISCELLANEOUS PROVISIONS 11.1 PARTIES IN INTEREST. This Escrow Agreement is not intended, nor shall it be construed, to confer any enforceable rights on any Person not a party hereto. All of the terms and provisions of this Escrow Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. 11.2 ATTORNEYS' FEES. In the event of any action to enforce any provision of this Escrow Agreement, or on account of any default under or breach of this Escrow Agreement with regard to Parent, INT'L.com and/or the Holders, the substantially prevailing party in such action shall be entitled to recover, in addition to all other relief, from the other party all attorneys' fees and all other fees and costs incurred by the substantially prevailing party in connection with such action (including, but not limited to, any appeal thereof); PROVIDED, HOWEVER, that, except as explicitly provided in the first sentence of Section 2.1 above, in no event shall any Holder be liable hereunder for any amounts in excess of such Holder's allocable portion of the Escrow Shares. 11.3 ENTIRE AGREEMENT. This Escrow Agreement constitutes the final and entire agreement among the parties with respect to the subject matter hereof and supersedes all prior arrangements or understandings. 11.4 NOTICES. All notices, requests, demands or other communications which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed to have been duly given: (i) on the date of delivery if personally delivered by hand, (ii) upon the third day after such notice is deposited in the United States mail, if mailed by registered or certified mail, postage prepaid, return receipt requested, (iii) upon the date scheduled for delivery after such notice is sent by a nationally recognized overnight express courier or (iv) by fax upon written confirmation (including the automatic confirmation that is received from the recipient's fax machine) of receipt by the recipient of such notice: IF TO PARENT: Lionbridge Technologies, Inc. 950 Winter Street, Suite 2410 Waltham, MA 02451-1291 Attention: Rory J. Cowan Telephone No.: (781) 434-6000 Fax No.: (781) 434-6034 WITH COPIES TO: Testa, Hurwitz & Thibeault, LLP 125 High Street Boston, MA 02110 Attention: George W. Lloyd, Esq. Kathy A. Fields, Esq. Telephone No.: (617) 248-7000 Fax No.: (617) 248-7100 IF TO THE INDEMNIFICATION Steven Fingerhood REPRESENTATIVE: 87 Hillside Avenue Mill Valley, CA 94941 Telephone No: (415) 383-9719 -12- IF TO THE ESCROW AGENT: American Stock Transfer & Trust Co. 6201 15th Avenue Brooklyn, NY 11219 Attention: Herbert Lemmer Telephone No.: (718) 921-8209 Fax No.: (718) 331-1852 Such addresses may be changed, from time to time, by means of a notice given in the manner provided in this Section 11.4. 11.5 CHANGES. The terms of this Escrow Agreement may not be modified or amended, or any provisions hereof waived, temporarily or permanently, except pursuant to the written agreement of Parent, the Indemnification Representative and the Escrow Agent. 11.6 SEVERABILITY. If any term or provision of this Escrow Agreement or the application thereof as to any Person or circumstance shall to any extent be invalid or unenforceable, the remaining terms and provisions of this Escrow Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this Escrow Agreement shall be valid and enforceable to the fullest extent permitted by law. 11.7 COUNTERPARTS. This Escrow Agreement may be executed in two or more partially or fully executed counterparts, each of which shall be deemed an original and shall bind the signatory, but all of which together shall constitute but one and the same instrument. The execution and delivery of a Signature Page to Escrow Agreement in the form annexed to this Escrow Agreement by any party hereto who shall have been furnished the final form of this Escrow Agreement shall constitute the execution and delivery of this Escrow Agreement by such party. 11.8 HEADINGS. The headings of the various sections of this Escrow Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Escrow Agreement. 11.9 GOVERNING LAW JURISDICTION. This Escrow Agreement shall be construed and controlled by the laws of the State of Delaware without regard to the principles of conflicts of laws. Parent, INT'L.com, the Holders and the Indemnification Representative hereby irrevocably consent and submit to the jurisdiction of state and federal courts in the State of Delaware in connection with any actions or proceedings brought against any of Parent, INT'L.com, the Holders and the Indemnification Representative (or each of them) by the Escrow Agent, or brought against the Escrow Agent by any of such parties, arising out of or relating to this Escrow Agreement. In any such action or proceeding, each of the parties hereby absolutely and irrevocably (i) waives any objection to jurisdiction or venue, (ii) waives personal service of any summons, complaint, declaration or other process, and (iii) agrees that the service thereof may be made by certified or registered first-class mail directed to such party, as the case may be, at the party's addresses given in or provided under Section 11.4. 11.10 FORCE MAJEURE. The Escrow Agent shall not be responsible for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters. -13- 11.11 REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, and (b) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, optical disk, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. 11.12 BINDING EFFECT. This Escrow Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, affiliates, successors and assigns. 11.13 COUNTERPARTS. This Agreement may be executed in two or more partially or fully executed counterparts each of which will be deemed an original and will bind the signatory, but all of which together will constitute one and the same instrument [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -14- SIGNATURE PAGE TO ESCROW AGREEMENT IN WITNESS WHEREOF, the parties have duly executed this Escrow Agreement as of the day and year first above written. LIONBRIDGE TECHNOLOGIES, INC. INT'L.COM, INC. By: _________________________________ By: _____________________________ Name: Name: Title: Title: AMERICAN STOCK TRANSFER & TRUST CO. INDEMNIFICATION REPRESENTATIVE As Escrow Agent By: _________________________________ By: _____________________________ Name: Steven Fingerhood Title: -15- Schedule I INSTRUMENT OF ACCESSION The undersigned hereby executes the Escrow Agreement (the "ESCROW AGREEMENT") by and among Lionbridge Technologies, Inc. (the "COMPANY") and certain other parties which executed the same, and hereby agrees to all of the provisions of the Escrow Agreement and hereby authorizes this signature page to be attached, together with signature pages of the original signatories, to a counterpart of the Escrow Agreement. This Instrument of Accession shall take effect and shall become an integral part of the said Escrow Agreement immediately upon execution and delivery to the Company of this Instrument. IN WITNESS WHEREOF, this INSTRUMENT OF ACCESSION has been duly executed by or on behalf of the undersigned, as a sealed instrument under the laws of the State of Delaware, as of the date below written. Signature: _______________________________ (Print Name) Address: Date: _________________________ ACCEPTED AND AGREED: LIONBRIDGE TECHNOLOGIES, INC. By:_______________________________ Name:_____________________________ Title:____________________________ -16- EX-6 7 ex-6.txt EXHIBIT 6 Exhibit 6 AFFILIATE LETTER January 19, 2000 Lionbridge Technologies, Inc. 950 Winter Street Waltham, MA 02451 Ladies and Gentlemen: The undersigned officer, director, and/or stockholder (the "Stockholder") of INT'L.com, Inc., a Delaware corporation ("Int'l.com"), understands that Int'l.com has entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as of January 19, 2000, with Lionbridge Technologies, Inc., a Delaware corporation ("Parent"), and LTI Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"). The Merger Agreement provides that all of the outstanding capital stock of Int'l.com (the "Int'l.com Shares") will be converted into the right to receive shares of common stock of Parent (the "Parent Common Stock") in accordance with the Merger Agreement. The Stockholder has been advised that, as of the date hereof, the Stockholder may be deemed to be an "affiliate" of Int'l.com, as the term "affiliate" is used in and for purposes of Accounting Series Releases 130 and 135, as amended, of the U.S. Securities and Exchange Commission (the "Commission"). The Stockholder understands that the representations, warranties and covenants set forth herein will be relied upon by Int'l.com, the other stockholders of Int'l.com, the Parent, Merger Sub, the stockholders of Parent and their respective counsel and accounting firms. The Stockholder hereby agrees with Int'l.com, Parent and Merger Sub that the Stockholder will not sell, exchange, transfer, pledge, dispose or otherwise reduce his or her risk relative to any Int'l.com Shares or any shares of Parent Common Stock owned by the Stockholder within 30 days prior to the Effective Time (as defined in the Merger Agreement). The Stockholder hereby agrees with Int'l.com, Parent and Merger Sub that, without the prior written consent of Parent, the Stockholder will not sell, exchange, transfer, pledge, dispose or otherwise reduce his or her risk relative to any shares of Parent Common Stock owned by the Stockholder until after such time as Parent publicly announces financial results covering at least thirty days of combined operations of Parent and Int'l.com. Parent, at its discretion, may apply legends to the Parent Common Stock concerning the foregoing and may cause stop transfer orders to be placed with its transfer agent with respect to the certificates representing the Stockholder's shares of Parent Common Stock. Parent agrees, as promptly as practicable following the Effective Time, to publish results covering at least 30 days of combined operations of Parent and Int'l.com in the form of a quarterly earnings report, as part of an effective registration statement filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K, or any other public filing or announcement that includes the combined results of operations of Parent and Int'l.com; provided, however, that Parent shall be under no obligation to publish any such financial information other than with respect to a fiscal quarter of Parent. Number of Int'l.com Shares beneficially owned by the Stockholder: Series A Common Stock 1,500,000 --------- Series B Common Stock --------- Series A Preferred Stock --------- Series B Preferred Stock 13,441 --------- Series C Preferred Stock 3,335 --------- Series D Preferred Stock --------- Very truly yours, Roger O. Jeanty ------------------------------ (Print Stockholder's Name) By: /s/ Roger O. Jeanty --------------------------- Title: ------------------------ (if applicable) Accepted as of the _____ day of _____________________ LIONBRIDGE TECHNOLOGIES, INC. By: ------------------------- Name: ----------------------- Title: ---------------------- -----END PRIVACY-ENHANCED MESSAGE-----