ASSET PURCHASE AGREEMENT
Exhibit
2.1
This
ASSET PURCHASE AGREEMENT (this
“Agreement”),
is
made, entered into and effective as of the 4th day of August, 2006 (the
“Effective
Date”),
by
and among Bankrate, Inc., a Florida corporation (“Purchaser”),
East
West Mortgage, Inc., a Virginia corporation (“Seller”),
the
Xxxx Xxx Family Trust (2006) (the “Trust”), and Xxxx Xxx (“Xxx”) (the Trust,
together with Xxx, shall be collectively referred to as the
“Shareholders”).
RECITALS:
A. Pursuant
to the terms and conditions of this Agreement, Purchaser desires to purchase
and
acquire from Seller, and Seller desires to sell, transfer and assign to
Purchaser, certain assets owned, used or held by Seller in connection with
and
for the operation and maintenance of the Web sites Xxxxxxxx-xxxx.xxx,
Xxxxxxxxxxxx.xxx and Xxxxxxxxxxxx.xxx (collectively, the “Sites”).
B. As
an
inducement to Purchaser entering into this Agreement, Seller and the each
Shareholder agree to make certain representations, warranties and covenants
to
Purchaser.
NOW,
THEREFORE,
in
consideration of the foregoing recitals and the covenants, agreements,
representations, warranties, terms and conditions set forth in this Agreement,
and other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, Purchaser, Seller and the Shareholders, intending to be
legally bound, agree as follows:
1. Purchase
and Sale of the Assets.
In
reliance upon the covenants, agreements, representations, warranties, terms
and
conditions set forth in this Agreement, Purchaser hereby acquires and purchases
from Seller, and Seller hereby sells, transfers and assigns to Purchaser, all
of
Seller’s rights, title and interest in and to all tangible and intangible assets
and property owned, used or held by Seller in connection with and for the
operation and maintenance of the Sites (collectively, the “Assets”), including,
without limitation:
A. Domain
Names.
The
Internet domain names ,
and
(collectively,
the “Domain
Names”);
B. Site
Content.
All
materials, content, property and interests used by Seller and/or necessary
for
the operation and maintenance of the Sites and owned by Seller, including,
without limitation, all content on the Sites, tools, mortgage calculators,
and
all other calculators owned or licensed by Seller for use on the Sites, except
for those items listed in Schedule
1.B.,
which
Seller may not transfer to Purchaser (collectively, the “Site
Content”);
C. Contracts.
All
rights of Seller under the contracts, agreements, leases, licenses, commitments,
sales and purchase orders and other instruments between Seller and each of
the
parties listed in Schedule
1.C.
(collectively, the “Contracts”);
D. Intellectual
Property.
All
Intellectual Property Rights (as defined below), including,
without limitation, the items listed in Schedule
1.D.;
E. Goodwill.
All
goodwill associated with the Assets and/or the Sites, together with the right
to
represent to third parties that Purchaser is the successor to the Assets and
the
Sites (collectively, the “Goodwill”);
F. Search
Engine Optimization Methods.
To the
extent possible, Seller’s proprietary Search Engine Optimization methods set
forth in Exhibit
1.F.
(the
“SEO Methods”); and
G. Books,
Records and Analysis.
All of
the books, records, and analysis of Seller relating solely to the Assets,
including, without limitation, Internet traffic records, files, logic, and
search engine optimization analysis.
2. No
Assumed Liabilities.
Purchaser shall not assume any liabilities or obligations of any type or nature
whatsoever of Seller, or of any affiliate or related person or entity of Seller
(collectively, the “Liabilities”), and all Liabilities shall remain the sole
obligation of Seller; provided, however, that Purchaser shall assume payments
arising after the Effective Dates pursuant to the Contracts.
3. Purchase
Price, Escrow Cash and Allocation of Purchase Price.
The
total purchase price for the Assets and the obligations of the Seller and the
Shareholders set forth in this Agreement, shall be Four Million Four Hundred
Thousand Dollars and NO/100 cents ($4,400,00.00) (the “Purchase
Price”).
Immediately upon execution of this Agreement:
A. $4,350,000
Delivered to Seller.
Purchaser shall deliver by wire transfer of same day funds, to an account
designated by Seller, an amount equal to Four Million Three Hundred Fifty
Thousand Dollars and NO/100 cents ($4,350,000.00); and
B. $50,000
Escrow Cash Delivered to Escrow Agent.
Purchaser shall deliver, by wire transfer of same day funds, Fifty Thousand
Dollars and NO/100 cents ($50,000.00) (the “Escrow
Cash”)
to the
escrow agent in accordance with the terms and provisions of the Escrow Agreement
attached as Exhibit
3(B)
(the
“Escrow
Agreement”).
(i) Disbursement
of Escrow Cash.
The
Escrow Cash shall be applied and distributed in accordance with the terms and
provisions of the Escrow Agreement.
C. Allocation
of Purchase Price.
The cost of the Assets acquired will be carried on Bankrate's
financial accounting records in accordance with Generally Accepted
Accounting Principles ("GAAP") (including tax and financial accounting purposes)
which generally require a fair value determination to be made to the individual
Assets acquired and the total Purchase Price to be allocated to the individual
Assets acquired and reflected on Bankrate's financial accounting records in
a manner consistent with such fair value assessment. The
parties acknowledge that, except as set forth in Exhibit
3.C.,
such an allocation shall be binding upon the parties for all
applicable federal, state, local and foreign tax purposes. The parties covenant
to report gain or loss or cost basis, as the case may be, in a manner consistent
with such allocation in all tax returns filed by each of them subsequent to
the
Effective Date and not to take voluntarily any inconsistent position therewith
in any administrative or judicial proceeding relating to such
returns.
4. Additional
Obligations Regarding Transfer of Domain Names and
Sites.
A. Domain
Names.
Simultaneously with the execution of this Agreement, Seller shall execute the
transfer of the Domain Names to Purchaser in accordance with the transfer policy
of the registrar of the Domain Names (the “Registrar”),
and
cause to be executed and delivered to the Registrar and/or Purchaser such other
documents, instruments or certificates as shall be reasonably requested by
the
Registrar, Purchaser and/or their respective counsel to transfer the Domain
Names pursuant to this Agreement (the “Domain
Name Transfer”).
B. The
Sites.
Seller
shall transition the Sites to Purchaser, so that Purchaser hosts the Sites
and
the Sites become integrated in the Purchaser’s operations, within thirty (30)
days of the Effective Date (the “Transition
Period”)
in
accordance with the terms and provisions set forth in Exhibit
4(B),
and do
all things which may be convenient or necessary to more effectively and
completely carry out the transition of the Sites from Seller to Purchaser by
the
end of the Transition Period (the “Site
Transition”).
5. Deliveries
By Purchaser and Seller.
A. Deliveries
by Purchaser.
Simultaneously with the execution of this Agreement, Purchaser shall deliver
the
following to Seller:
(i) All
amounts payable pursuant to Section 3 of this Agreement;
(ii) A
Certificate of Good Standing of Purchaser from the Secretary of State of
Florida;
(iii) A
copy of
the text of the resolutions adopted by Purchaser authorizing the execution,
delivery and performance of this Agreement and the consummation of all
transactions contemplated by this Agreement, along with a certificate executed
by the Secretary of Purchaser certifying that such copy is a true, correct
and
complete copy of such resolutions, and that such resolutions were duly adopted
and have not been amended or rescinded; and
(iv) Such
other certificates, documents and instruments as Seller reasonably requests
related to the transactions contemplated by this Agreement.
B. Deliveries
by Seller.
Simultaneously with the execution of this Agreement, Seller shall deliver the
following to Purchaser:
(i) A
Certificate of Good Standing of Seller from the Secretary of State of
Virginia;
(ii) A
copy of
the text of the resolutions adopted by Seller authorizing the execution,
delivery and performance of this Agreement and the consummation of all
transactions contemplated by this Agreement, along with a certificate executed
by the Secretary of Seller certifying that such copy is a true, correct and
complete copy of such resolutions, and that such resolutions were duly adopted
and have not been amended or rescinded;
(iii) The
Xxxx
of Sale, Assignment and Assumption Agreement for the Assets in the form attached
to this Agreement as Exhibit
5.B.(iii);
(iv) Proof
that Seller executed a transfer of the Domain Names to Purchaser in accordance
with the transfer policy of the Registrar;
(v) The
Non-Competition Agreement among Purchaser, Seller and Xxx in the form attached
to this Agreement as Exhibit
5.B.(v);
(vi) The
written consent of all parties required for Seller to sell, transfer and assign
the Assets to Purchaser free and clear of all free and clear of all claims,
liens, charges, security interests, rights of set-off and other encumbrances
or
restrictions of any kind whatsoever; and
(vii) Such
other certificates, documents and instruments as Purchaser reasonably requests
related to the transactions contemplated by this Agreement.
6. Purchaser’s
Representations and Warranties.
Purchaser represents and warrants to Seller as follows:
A. Enforceable
Agreements.
This
Agreement and all other documents contemplated by this Agreement and required
to
be executed by Purchaser (collectively, “Purchaser’s Closing Documents”),
constitute the legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors’ rights generally and by legal and equitable limitations on the
availability of specific remedies. Purchaser has the absolute and unrestricted
right, power and authority to execute and deliver this Agreement and Purchaser’s
Closing Documents and to perform its obligations under this Agreement and
Purchaser’s Closing Documents. No other acts or proceedings on the part of
Purchaser will be necessary to authorize the performance by Purchaser of this
Agreement or Purchaser’s Closing Documents by Purchaser.
B. Will
Not Violate Organizational Documents.
Neither
the execution and delivery of this Agreement and Purchaser’s Closing Documents,
nor the consummation or performance of any of the transactions contemplated
by
this Agreement shall, directly or indirectly (with or without notice or lapse
of
time) contravene, conflict with, or result in a violation of any provision
of
Purchaser’s Articles of Incorporation, Bylaws, or other organizational
documents.
C. No
Brokers.
Neither
this Agreement nor the purchase and sale of the Assets pursuant to this
Agreement, nor any other transaction contemplated by this Agreement, was induced
by or procured through any person, firm, corporation, or other entity acting
on
behalf of Purchaser, or representing Purchaser as a broker, finder, investment
banker, financial advisor or in any other similar capacity.
7. Seller
and Shareholders Representations and Warranties.
Seller
and each Shareholder, jointly and severally, represent and warrant to Purchaser
as follows:
A. Enforceable
Agreements.
This
Agreement and all other documents contemplated by this Agreement and required
to
be executed by Seller and/or the Shareholders (collectively, “Seller’s Closing
Documents”), shall constitute the legal, valid and binding obligations of Seller
and/or the Shareholders (as applicable) enforceable against Seller and/or the
Shareholders (as applicable), in accordance with their respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors’ rights generally and by legal and equitable limitations on the
availability of specific remedies. Seller, Xxx and the Trust each has the
absolute and unrestricted right, power and authority to execute and deliver
this
Agreement and Seller’s Closing Documents and to perform its respective
obligations under this Agreement and Seller’s Closing Documents. No other acts
or proceedings on the part of Seller and/or the Shareholders (as applicable)
will be necessary to authorize the performance by Seller and/or the Shareholders
(as applicable) of this Agreement or Seller’s Closing Documents.
B. Will
Not Violate Organizational Documents.
Neither
the execution and delivery of this Agreement and Seller’s Closing Documents, nor
the consummation or performance of any of the transactions contemplated by
this
Agreement shall, directly or indirectly (with or without notice or lapse of
time) contravene, conflict with, or result in a violation of any provision
of
Seller’s Articles of Incorporation, Bylaws, or other organizational
documents.
C. Broker.
This
Agreement, the purchase and sale of the Assets pursuant to this Agreement,
and
other transactions contemplated by this Agreement were procured by WWC
Securities, LLC, on behalf of Seller (the “Broker”). Seller shall be solely
responsible for any and all claims and liabilities due for all brokerage fees,
commissions and finder’s fees incurred by reason of any action taken by or on
behalf of Seller with the Broker or any other broker, finder, investment banker,
financial advisor, or similar person.
D. Domain
Names.
(i) Seller
Owns the Domain Names.
Seller
is the rightful owner of the Domain Names, all rights, title and interest in
and
to the Domain Names, and the registration of the Domain Names. The Domain Names
have not been sold, pledged, hypothecated, assigned or otherwise transferred
except pursuant to this Agreement.
(ii) Registration
with Registrar.
Each
Domain Name’s registration is in good standing with the Registrar. Seller has
received no notice that it is in breach, and to the best of Seller’s Knowledge
Seller is not in breach, of any obligation to the Registrar of each Domain
Name,
and each Domain Name registration is not the subject of any suspension or
dispute procedure by its respective registrar or registry, or any arbitration
or
other dispute resolution procedures. For purposes of this Agreement, “Knowledge”
means: (i) with respect to Seller, the actual knowledge of or matters actually
known to the executive officers of Seller, who are Xxxx Xxx, President and
Xxxxxxx Xxxxx, Vice President, (ii) with respect to Purchaser, the actual
knowledge of or matters actually known to the executive officers of Purchaser,
(iii) with respect to the Shareholders, the actual knowledge of
Xxx.
E. Intellectual
Property.
(i) Ownership.
Seller
owns, or has a valid right or license to use, all Intellectual Property
currently used in connection with the Sites and the Assets (such Intellectual
Property being collectively referred to as the “Intellectual
Property Rights”). “Intellectual
Property” means
any
or all of the following and all rights in, arising out of, or associated
therewith: (i) all United States, international and foreign patents and
applications therefor and all reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof; (ii) all
inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology, technical data
and
customer lists, and all documentation relating to any of the foregoing; (iii)
all copyrights, copyright registrations and applications therefor, and all
other
rights corresponding thereto throughout the world; (iv) all trade names, logos,
common law trademarks and service marks, trademark and service xxxx
registrations and applications therefor throughout the world; (v) all databases
and data collections and all rights therein throughout the world; (vi) all
moral
rights of authors and inventors, however denominated, throughout the world;
and
(vii) all domain names.
(ii) Intellectual
Property Rights.
All
Intellectual Property Rights, including, without limitation Seller’s registered
Intellectual Property Rights, as well as a list of all licenses, sublicenses
and
other agreements as to which Seller is a party granting to any person any rights
to use any Intellectual Property Right are listed in Schedule
7.E(ii).
Except
as disclosed in Schedule
7.E.(ii):
(1) the
Intellectual Property Rights are sufficient in all material respects for the
operation of the Sites as currently operated;
(2) no
Intellectual Property Right is subject to any outstanding judgment, injunction,
order, decree or agreement specifically naming Seller, restricting the use
thereof by Seller or restricting the licensing thereof by Seller to any person;
and
(3) all
necessary registration, maintenance and renewal fees currently due in connection
with registered Intellectual Property Rights have been paid and all necessary
documents, recordations and certificates in connection with such registered
Intellectual Property Rights have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions.
(iii) No
Employee Violations or Assignments.
Seller
has not been notified or otherwise been made aware in writing that any employee
or consultant of Seller:
(1) is
in
material violation of any term or covenant of any employment contract, patent
disclosure agreement, invention assignment agreement, nondisclosure agreement,
non-competition agreement or any other contract, agreement, arrangement,
commitment or undertaking entered into with any other party by virtue of such
employee’s or consultant’s being employed by, or performing services for, Seller
or using trade secrets or proprietary information of others without permission
that would adversely affect the transactions contemplated by this Agreement;
or
(2) has
developed any technology, software, or other copyrightable, patentable or
otherwise proprietary work for Seller that is subject to any agreement under
which such employee or consultant has assigned or otherwise granted to any
other
person any rights (including Intellectual Property Rights) in or to such
technology, software or other copyrightable, patentable or other proprietary
work that would affect materially adversely affect the transactions contemplated
by this Agreement.
(iv) Assignment
by Employees to Seller.
All
employees and consultants of Seller that have materially contributed to the
development of the Intellectual Property Rights have executed and delivered
an
agreement regarding the protection of such proprietary information and the
assignment of inventions to Seller in the form attached as Exhibit
7.E.(iv).
(v) No
Royalties or Fees.
Except
as set forth in Schedule
7.E.(v),
there
are no royalties, fees or other payments payable by Seller to any person by
reason of the ownership, use, sale or disposition of any Intellectual Property
Rights.
F. Assets
Will Be Free and Clear of Encumbrances.
There
shall be vested in Purchaser good and marketable title in and to all of the
Assets and all of the Assets shall be free and clear of all claims, liens,
charges, security interests, rights of set-off and other encumbrances or
restrictions of any kind whatsoever.
G. Assets
Adequate to Conduct the Sites.
Except
as set forth in Schedule
7(G),
the
Assets constitute all of the assets and property used or held for use by Seller
for the operation and maintenance of the Sites. The Assets will be adequate
to
operate the Sites as currently operated.
H. No
Pending or Threatened Litigation.
There
is no pending or, to the Knowledge of Seller threatened action, arbitration,
audit, hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) against Seller and/or the
Shareholders or to the Knowledge of Seller that relates to or may adversely
affect any of the Assets being acquired by Purchaser, or that challenges, or
to
the Knowledge of Seller that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the transactions contemplated
by
this Agreement.
I. Financial
Statements and Operational Data.
Notwithstanding any disclaimers or similar language within the following items:
(1) all operational data provided by Seller to Purchaser, including, without
limitation the operational data attached as Schedule
7.I.(i)
and the
financial statements within Schedule 7.I.(i) (collectively, the "Operational
Data"), are true and correct in all material respects, and (2) to the Knowledge
of Seller, as of the date of May 2006 or the date of the content contained
in
Schedule 7.I.(ii), the contents of Schedule 7.I.(ii) are true and correct in
all
material respects.
J. Undisclosed
Liabilities.
Except
as and to the extent reflected in the Operational Data, Seller does not have
any
material liabilities, commitments or obligations of any nature, that relate
to
the operation of the Sites or the Assets whether absolute, accrued, contingent
or otherwise, other than those incurred in the ordinary course of
business.
K. Taxes.
All
federal, state and other tax returns of Seller required by law to be filed
have
been duly filed and all federal, state and other taxes, assessments, fees and
other federal governmental charges shown to be due and payable on such returns
have been paid.
L. Absence
of Certain Changes.
Since
June 26, 2006, there has not occurred an event which has resulted in a material
adverse affect on the Sites, the Assets or the results of operations or
financial condition of Seller, and Seller has operated the Sites in the ordinary
course of business.
M. Shareholders.
The
Shareholders are all of the shareholders of Seller.
8. Seller’s
and Shareholders’ Covenants.
A. Use
of
Intellectual Property Rights; Trademarks and Tradenames.
The
Shareholders’ and Seller shall eliminate the use of all Intellectual Property
Rights, including, without limitation, use of all trademarks, tradenames,
service marks and service names used in connection with the Assets, in any
of
their forms or spellings, on all advertising, stationary, business cards,
checks, purchase orders and acknowledgements, agreements and other contracts
and
business documents.
B. Seller
Shall Not Register Similar Domain Names.
The
Shareholders, Seller and Seller’s affiliates shall not, and shall use
commercially reasonable efforts to cause their respective officers, directors,
employees, consultants, advisors and agents to not, under any circumstances,
register, or otherwise directly or indirectly obtain the use of, or control
over, any domain name(s) confusingly similar to the Domain Names.
C. SEO
Methods.
The
Shareholders, Seller and Seller’s affiliates will not, and shall use
commercially reasonable efforts to cause their respective officers, directors,
employees, consultants, advisors and agents to not, use the SEO Methods for
Web
sites featuring mortgage calculators following the Effective Date.
D. The
Sites.
The
Shareholders, Seller and Seller’s affiliates will not, and shall use
commercially reasonable efforts to cause their respective officers, directors,
employees, consultants, advisors and agents to not, in any way, direct Internet
traffic away from the Sites.
E. Confidentiality.
The
Shareholders, Seller and Seller’s affiliates will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning
this
Agreement, the Assets and the Sites, except to the extent that such information
can be shown to have been in the public domain on the Effective Date, or, after
the Effective Date, through no fault of Seller.
9. Specific
Performance.
Seller,
Xxx and the Trust each acknowledge that damages at law may be an inadequate
remedy for any breach or threatened breach of Section 8. Therefore, in the
event
of a breach or threatened breach of those Sections, then Seller shall be
entitled, in addition to all other rights or remedies, to seek injunctions
restraining such breach, without being required to show any actual damage or
to
post any bond or other security.
10. [Intentionally
deleted.]
11. Indemnification.
A. Purchaser
Indemnifies Seller.
Subject
to Section 12.M., Purchaser shall indemnify and hold harmless Seller and its
officers, directors, shareholders, employees, contractors, affiliates,
successors, assigns, representatives, attorneys and agents (collectively, the
“Seller Group”) against and in respect of any and all damages, claims, losses,
liabilities and reasonable expenses (including, without limitation, legal,
accounting and other expenses) (collectively, “Damages”) incurred by any member
of the Seller Group which may arise out of, or in respect of, (i) any material
falsity, inaccuracy or misrepresentation by Purchaser in this Agreement and/or
Purchaser’s Closing Documents, (ii) any violation or breach of this Agreement by
Purchaser, and/or (iii) following the Effective Date, third party claims arising
from either: (x) the Assets, (y) the conduct of the Sites, or (z) the conduct
of
Purchaser’s business and/or operations.
B. Seller
and the Shareholders Indemnify Purchaser.
Subject
to Section 12.M., Seller and the Shareholders shall jointly and severally,
indemnify and hold harmless Purchaser and its officers, directors, shareholders,
employees, contractors, affiliates, successors, assigns, representatives,
attorneys and agents (collectively, the “Purchaser Group”) against and in
respect of any and all Damages incurred by any member of the Purchaser Group
which may arise out of, or in respect of (i) any material falsity, inaccuracy
or
misrepresentation by Seller and/or the Shareholders in this Agreement and/or
any
of Seller’s Closing Documents, (ii) any violation or breach of this Agreement by
Seller and/or the Shareholders, (iii) the Liabilities and/or (vi) prior to
the
Effective Date, third party claims arising from either: (x) the Assets, (y)
the
conduct of the Sites, or (z) the conduct of Seller's business and/or
operations.
C. Indemnified
Party Shall Provide Notice of Claim(s).
Subject
to Section 12.M., upon obtaining Knowledge of facts or circumstances which
may
give rise to a right of indemnification, the party seeking indemnification
(the
“Indemnified
Party”)
shall
promptly notify each party from whom indemnity is sought pursuant to this
Section (the “Indemnifying Parties”), in writing and in reasonable detail, of
such facts or circumstances which may give rise to a right of indemnification
pursuant to this Agreement, the identity of third-party claimants, a description
of the claim, demand, action or proceeding, if any, out of which the Damages
arise, a description of the Damages, and the amount of the Damages (a
“Notice
of Claim”);
provided, however, that a failure or delay by the Indemnified Party in the
performance of the foregoing shall not reduce or otherwise affect the
Indemnifying Parties to indemnify and hold the Indemnified Party harmless except
to the extent that such failure or delay materially prejudices the Indemnifying
Parties’ rights or their ability to defend against such complaint, action or
proceeding.
D. Third-Party
Claims.
If the
claim or demand set forth in the Notice of Claim relates to a claim or demand
asserted by a third party (a “Third-Party
Claim”):
(i) Indemnified
Party May Elect that Indemnifying Parties Defend a Claim or Demand, at the
Indemnifying Parties’ Expense.
The
Indemnified Party may, but shall not be obligated to, elect and request that
the
Indemnifying Parties assume the defense of such claim or demand (with the full
cooperation of the Indemnified Parties). If the Indemnified Party elects and
requests that the Indemnifying Parties assume the defense of such claim or
demand: (1) the Indemnifying Parties will assume the defense of such claim
or
demand, including the employment of counsel reasonably acceptable to the
Indemnified Party to defend such claim or demand, (2) the Indemnifying Parties
shall pay all fees, costs and disbursements in connection with the defense
of
such claim or demand, including attorneys fees and costs; and (3) the
Indemnified Party shall have the right to participate in the defense of any
such
Third Party Claim at its own expense. The Indemnified Party shall make available
to the Indemnifying Parties or such Indemnifying Parties’ representatives all
records and other materials reasonably required by them for their use in
contesting any Third Party Claim and shall cooperate with the Indemnifying
Parties in connection therewith.
(ii) The
Indemnified Party May Defend a Claim or Demand, at the Indemnifying Parties’
Expense.
In the
event that the Indemnified Party determines, in its sole discretion, to assume
the defense of such claim or demand, or if the Indemnifying Parties fail to
defend such claim or demand pursuant to Section
11.D.(i)
in a
timely manner, then such Indemnified Party may, but shall not be obligated
to,
defend such claim or demand and the Indemnifying Parties shall pay all actually
and reasonably incurred fees, costs and disbursements in connection with the
defense of such claim or demand, including attorneys fees and costs. The
Indemnifying Parties shall make available to the Indemnified Party or such
Indemnified Party’s representatives all records and other materials reasonably
required by them for their use in contesting any Third-Party Claim and shall
cooperate with the Indemnified Party in connection therewith.
E. Determination
of Indemnification Amount.
As soon
as is reasonably practicable after the Date of the Notice of Claim, the
Indemnified Party and the Indemnifying Parties shall endeavor to agree upon
the
amount, if any, to which the Indemnified Party is entitled under this
Section
11.
F. Payment
of Indemnification Amount.
The
Indemnifying Parties shall deliver, or shall cause the Escrow Agent to deliver,
as applicable, to the Indemnified Party, an amount that is equal to the
Indemnification Amount, within ten (10) calendar days after the determination
of
the Indemnification Amount.
G. Limitation
to Indemnity.
(i) For
purposes of this Agreement, “Core Representations” shall mean the following
Sections: 2 (No Assumed Liabilities), 7.A. (Enforceable Agreements), 7.B. (Will
Not Violate Organizational Documents), 7.C. (Broker), 7.D.(i) (Seller Owns
the
Domain Names), 7.E.(i) (Ownership of Intellectual Property), 7.E.(v) (No
Royalties or Fees), 7.K. (Taxes) and 7.M. (Shareholders).
(ii) Limitations
to Seller’s and the Shareholders’ Indemnification Obligations.
(1)
Except with respect to fraud or intentional misrepresentation, Seller and the
Shareholders shall not indemnify the Purchaser Group, until the aggregate amount
of Damages of the Purchaser Group exceeds Twenty-Five Thousand Dollars ($25,000)
(the “Basket Amount”), provided, that if the total amount of Damages exceeds the
Basket Amount, Seller and the Shareholders will be obligated to indemnify the
Purchaser Group for all Damages, including the initial Twenty-Five Thousand
Dollars ($25,000); and
(2)
Except with respect to fraud or intentional misrepresentation, the cumulative
aggregate indemnity obligations of Seller and the Shareholders under Section
11.B.:
(X)
in
connection with the Core Representations, shall in no event exceed the Purchase
Price, and
(Y)
for
all
other indemnity obligations of Seller and the Shareholders under Section 11.B.,
shall in no event exceed the sum of One Million Five Hundred Forty Thousand
Dollars ($1,540,000).
(iii) Limitation
to Purchaser’s Indemnification Obligations.
(1) Except
with respect to fraud or intentional misrepresentation, Purchaser shall not
indemnify the Seller Group, until the aggregate amount of Damages exceeds the
Basket Amount; provided, that if the total amount of Damages exceeds the Basket
Amount, Purchaser will be obligated to indemnify the Seller Group for all
Damages, including the initial Twenty-Five Thousand Dollars ($25,000);
and
(2) Except
with respect to fraud or intentional misrepresentation, the cumulative aggregate
indemnity obligations of Purchaser under Section 11.A.:
(X)
in
connection with Section 6, shall in no event exceed the Purchase Price, and
(Y)
for
all
other indemnity obligations of Purchaser under Section 11.A., shall in no event
exceed the sum of One Million Five Hundred Forty Thousand Dollars
($1,540,000).
(iv) Notwithstanding
anything to the contrary set forth in this Agreement, the Indemnifying Party’s
aggregate indemnification payment to all Indemnified Parties for Damages
pursuant to this Agreement shall not be limited to the Escrow Cash amount and
shall not be payable exclusively from the Escrow Cash.
H. Covenant
to Limit Damages.
Each
Indemnified Party shall use commercially reasonable efforts to limit the amount
of any Damages suffered by such party.
12. Miscellaneous.
A. Publicity.
Any
press release or other public announcement pertaining to this Agreement or
the
transactions contemplated by this Agreement (each, an “Announcement”)
shall
be prepared and controlled by Purchaser and approved by Seller; provided that
Purchaser may make Announcements that it believes in good faith are required
by
applicable law or regulation, including, without limitation, securities laws
and
regulations, without Seller’s approval.
B. Amendments.
The
provisions of this Agreement may not be amended, supplemented, waived or changed
orally, but only by a writing signed by both Purchaser and Seller and making
specific reference to this Agreement.
C. Assignments.
Seller
shall not assign its rights and/or obligations pursuant to this Agreement
without the prior written consent of Purchaser, which such consent may be
reasonably withheld by Purchaser. Purchaser may assign its rights and/or
obligations pursuant to this Agreement without prior notice or
consent.
D. Binding
Effect.
All of
the terms and provisions of this Agreement, whether so expressed or not, shall
be binding upon, inure to the benefit of, and be enforceable by the parties
and
their respective administrators, executors, legal representatives, heirs,
successors and permitted assigns.
E. Severability.
If any
part of this Agreement or any other Agreement entered into pursuant to this
Agreement is contrary to, prohibited by, or deemed invalid under, applicable
law
or regulation, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder of this Agreement
shall not be invalidated thereby and shall be given full force and effect so
far
as possible.
F. Waivers.
The
failure or delay of any party at any time to require performance by the other
party of any provision of this Agreement shall not affect the right of such
party to require performance of that provision or to exercise any right, power
or remedy hereunder, and any waiver by any party of any breach of any provision
of this Agreement shall not be construed as a waiver of any continuing or
succeeding breach of such provision, a waiver of the provision itself or a
waiver of any right, power or remedy under this Agreement. No notice to or
demand on any party in any case shall, of itself, entitle such party to any
other or further notice or demand in similar or other
circumstances.
G. Notices.
All
notices, requests, consents and other communications required or permitted
under
this Agreement shall be in writing (including electronic transmission) and
shall
be (as elected by the party giving such notice) hand delivered by messenger
or
courier service, electronically transmitted, or mailed (airmail if
international) by registered or certified mail (postage prepaid), return receipt
requested, addressed to:
| If to Seller: | With a copy to: | |
| East West Mortgage, Inc. 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000 XxXxxx, XX 00000 Telefax: (000) 000-0000 Attention: Xxxx Xxx |
Seyfarth Xxxx LLP 000 Xxxxxxxxxxx Xxx, X.X., Xxxxx 000 Xxxxxxxxxx,
X.X. 00000
Telefax: (000) 000-0000 Attention: Xxxxxxx X. Xxxxxxxxx, Esq. |
|
| If to the Shareholders: | ||
| with a copy to: | ||
| East West Mortgage, Inc. 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000 XxXxxx, XX 00000 Telefax: (000) 000-0000 Attention: Xxxx Xxx |
Seyfarth
Xxxx LLP 000 Xxxxxxxxxxx Xxx, X.X., Xxxxx 000 Xxxxxxxxxx, X.X. 00000 Telefax: (000) 000-0000 Attention: Xxxxxxx X. Xxxxxxxxx, Esq. |
|
| If to Purchaser: | With a copy to: | |
| Bankrate, Inc. | Gunster, Yoakley & Xxxxxxx, P.A. | |
| 00000 XX XXX 0 Xxxxx 000, Xxxxx Xxxx Xxxxx, XX. 00000 Telefax: (561) 630-1261 |
000
Xxxxx Xxxxxxx Xxxxx, Xxxxx 000 Xxxx
Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telefax:
(000) 000-0000
|
|
| Attention: X. Xxxxxx Xxxxxxxxxx |
Attention:
Xxxxx X. Xxxxx, Esq.
|
or
to
such other address as any party may designate by notice complying with the
terms
of this Section. Each such communication shall be deemed delivered (i) on
the date delivered if by personal delivery; (ii) on the date of
transmission with confirmed answer back if by electronic transmission; and
(iii) on the date upon which the return receipt is signed or delivery is
refused or the notice is designated by the postal authorities as not
deliverable, as the case may be, if mailed.
H. Governing
Law.
This
Agreement and all transactions contemplated by this Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of Florida, without regard to principles of conflicts of
laws.
I. Jurisdiction
and Venue.
Any
civil action or legal proceeding arising out of or relating to this Agreement
shall be brought in the courts of record of the jurisdiction of the party being
sued (i.e., Palm Beach County, Florida for actions against Purchaser and Fairfax
County, Virginia for actions against Seller). Each party: (1) consents to the
jurisdiction of such court in any such civil action or legal proceeding, (2)
agrees that in the event any actions has already been filed in accordance with
this Section, any related action shall occur in the jurisdiction where the
original action was filed, and (3) waives any objection to the laying of venue
of any such civil action or legal proceeding in such court. Service of any
court
paper may be effected on such party by mail or in such other manner as may
be
provided under applicable laws, rules of procedure or local rules.
J. Enforcement
Costs.
If any
legal action or other proceeding is brought for the enforcement of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorney’s fees, court costs and all reasonable expenses even if not
taxable as court costs (including, without limitation, all such fees, costs
and
expenses incident to appeals), incurred in that action or proceeding, in
addition to any other relief to which such party or parties may be
entitled.
K. Headings
for Reference Only.
The
headings contained in this Agreement are for convenience of reference only
and
shall not limit or otherwise affect in any way the meaning or interpretation
of
this Agreement.
L. Expenses.
Except
as otherwise expressly provided by this Agreement, all legal and other fees,
costs and expenses incurred in connection with the preparation of this Agreement
and the transactions contemplated by this Agreement shall be paid by the party
incurring such fees, costs or expenses.
M. Survival.
In
accordance with their terms, all covenants, agreements, representations and
warranties made in this Agreement or otherwise made in writing by a party
pursuant to this Agreement shall survive the consummation of the transactions
contemplated by this Agreement:
(i) in
the
case of Section 8.E., Confidentiality, as set forth in the Non-Competition
Agreement among Purchaser, Seller and Xxx;
(ii) in
the
case of Seller Core Representations or Purchaser’s representations in Section 6,
until the expiration of the statutory period of limitations applicable to claims
pertaining to such matters (giving effect to any waiver, mitigation or extension
thereof); and
(iii) in
the
case of all other, covenants, agreements, representations and warranties, and
indemnity obligations of either party, the third anniversary of the Effective
Date (giving effect to any waiver, mitigation or extension
thereof).
Notwithstanding
the preceding sentence, any covenant, agreement, representation or warranty
in
respect of which indemnity may be sought under Section 11 shall survive the
time
at which it would otherwise terminate pursuant to the preceding sentence, if
notice of the inaccuracy or breach thereof giving rise to such right to
indemnity shall have been given to the party against whom such indemnity may
be
sought prior to such time.
N. Further
Assurances.
The
parties hereby agree from time to time to execute and deliver such further
and
other transfers, assignments and documents and to do all matters and things
which may be convenient or necessary to more effectively and completely carry
out the intentions of this Agreement.
O. Construction.
This
Agreement is a negotiated document and shall not be construed more strongly
against any party regardless of who is responsible for its
preparation.
P. Agreement
May Be Signed in Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which taken together shall constitute one and
the
same instrument. Confirmation of execution by electronic transmission of a
facsimile signature page shall be binding on a party so confirming.
Q. Entire
Agreement.
This
Agreement and its Exhibit and Schedules represent the entire understanding
and
agreement between the parties with respect to their subject matter, and
supersede all other negotiations, understandings and representations (if any)
made by and between the parties with regard to such subject matter.
[Signatures
appear on the following page.]
Each
of
Purchaser, Seller and the Shareholders have signed this Agreement as of the
Effective Date.
| Purchaser: | Seller: | |||
| Bankrate, Inc. | East West Mortgage, Inc. | |||
| By: | /s/ Xxxxxx X. Xxxxx | By: | /s/ Xxxx Xxx | |
| Print Name: | Xxxxxx X. Xxxxx | Print Name: | Xxxx Xxx | |
| Title: | President and CEO | Title: | President | |
| Shareholders: | ||||
| /s/ Xxxx Xxx | ||||
| Xxxx Xxx | ||||
| Xxxx Xxx Family Trust (2006) | ||||
|
By:
|
/s/ Xxxx Xxx | |||
| Xxxx Xxx, trustee |
[Signature
page to Asset Purchase Agreement.]
