SERIES A PREFERRED STOCK PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXXXX.XXX, INC.
AND
TICKETMASTER ONLINE-CITYSEARCH, INC.
DATED AS OF OCTOBER 25, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II AGREEMENT TO PURCHASE AND SELL STOCK . . . . . . . . . . . . . . 3
2.1. Authorization. . . . . . . . . . . . . . . . . . . . . . 3
2.2. Agreement to Purchase and Sell Stock.. . . . . . . . . . 3
ARTICLE III CLOSING; DELIVERY . . . . . . . . . . . . . . . . . . . . . . . 3
3.1. The Closing. . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Delivery.. . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . 3
4.1. Organization, Good Standing and Qualification. . . . . . 3
4.2. Capitalization.. . . . . . . . . . . . . . . . . . . . . 4
4.3. Subsidiaries.. . . . . . . . . . . . . . . . . . . . . . 4
4.4. Due Authorization. . . . . . . . . . . . . . . . . . . . 4
4.5. Valid Issuance of Stock. . . . . . . . . . . . . . . . . 5
4.6. Liabilities. . . . . . . . . . . . . . . . . . . . . . . 5
4.7. Title to Properties and Assets.. . . . . . . . . . . . . 5
4.8. Intellectual Property; Software. . . . . . . . . . . . . 6
4.9. Material Contracts and Obligations.. . . . . . . . . . .10
4.10. Litigation. . . . . . . . . . . . . . . . . . . . . . .10
4.11. Required Consents.. . . . . . . . . . . . . . . . . . .10
4.12. Compliance with Other Instruments.. . . . . . . . . . .11
4.13. Disclosure. . . . . . . . . . . . . . . . . . . . . . .11
4.14. Registration Rights.. . . . . . . . . . . . . . . . . .11
4.15. Insurance.. . . . . . . . . . . . . . . . . . . . . . .11
4.16. Financial Statements. . . . . . . . . . . . . . . . . .11
4.17. Certain Actions.. . . . . . . . . . . . . . . . . . . .12
4.18. Activities Since Balance Sheet Date.. . . . . . . . . .12
4.19. Tax Matters.. . . . . . . . . . . . . . . . . . . . . .13
4.20. Tax Elections.. . . . . . . . . . . . . . . . . . . . .13
4.21. Environmental Matters.. . . . . . . . . . . . . . . . .14
4.22. Employee Benefits.. . . . . . . . . . . . . . . . . . .14
4.23. Interested Party Transactions.. . . . . . . . . . . . .15
4.24. Stock Restriction Agreements. . . . . . . . . . . . . .15
4.25. Minute Books. . . . . . . . . . . . . . . . . . . . . .15
4.26. Labor Agreements and Actions. . . . . . . . . . . . . .15
4.27. Year 2000 Compliance. . . . . . . . . . . . . . . . . .15
4.28. No Restrictions on Shares.. . . . . . . . . . . . . . .16
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . . . .16
5.1. Organization; Due Authorization; No Conflicts. . . . . .16
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5.2. Investigation; Economic Risk.. . . . . . . . . . . . . .16
5.3. Purchase for Own Account.. . . . . . . . . . . . . . . .17
5.4. Exempt from Registration; Restricted Securities. . . . .17
5.5. Restrictive Legends. . . . . . . . . . . . . . . . . . .17
5.6. Removal of Restrictive Legend. . . . . . . . . . . . . .17
5.7. Status of Purchaser. . . . . . . . . . . . . . . . . . .17
ARTICLE VI CERTAIN COVENANTS. . . . . . . . . . . . . . . . . . . . . . . .18
6.1. Use of Proceeds. . . . . . . . . . . . . . . . . . . . .18
6.2. Expenses.. . . . . . . . . . . . . . . . . . . . . . . .18
6.3. Conduct of the Business. . . . . . . . . . . . . . . . .18
6.4. Further Assurances.. . . . . . . . . . . . . . . . . . .19
6.5. Confidentiality; Public Announcements. . . . . . . . . .19
6.6. Inspection.. . . . . . . . . . . . . . . . . . . . . . .20
6.7. Other Investments. . . . . . . . . . . . . . . . . . . .20
ARTICLE VII CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . .21
7.1. Conditions to Each Party's Obligations.. . . . . . . . .21
7.2. Conditions to Obligation of Purchaser. . . . . . . . . .21
7.3. Conditions to Obligation of the Company. . . . . . . . .22
ARTICLE VIII INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . .23
8.1. Agreement to Indemnify.. . . . . . . . . . . . . . . . .23
8.2. Survival of Representations, Warranties and Covenants. .23
8.3. Limitation.. . . . . . . . . . . . . . . . . . . . . . .24
8.4. Claims for Indemnification.. . . . . . . . . . . . . . .24
8.5. Defense of Claims. . . . . . . . . . . . . . . . . . . .24
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .25
9.1. Governing Law. . . . . . . . . . . . . . . . . . . . . .25
9.2. Captions.. . . . . . . . . . . . . . . . . . . . . . . .25
9.3. Successors and Assigns.. . . . . . . . . . . . . . . . .26
9.4. Entire Agreement.. . . . . . . . . . . . . . . . . . . .26
9.5. Notices. . . . . . . . . . . . . . . . . . . . . . . . .26
9.6. Amendments and Waivers.. . . . . . . . . . . . . . . . .27
9.7. Delays or Omissions. . . . . . . . . . . . . . . . . . .27
9.8. Finder's Fees. . . . . . . . . . . . . . . . . . . . . .28
9.9. Counterparts; Effectiveness. . . . . . . . . . . . . . .28
9.10. Severability. . . . . . . . . . . . . . . . . . . . . .28
9.11. Construction. . . . . . . . . . . . . . . . . . . . . .28
9.12. Cumulative Remedies.. . . . . . . . . . . . . . . . . .28
9.13. Third-Party Beneficiaries.. . . . . . . . . . . . . . .28
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EXHIBITS
Exhibit A Amended and Restated Certificate of Incorporation
Exhibit B Distribution Agreement
Exhibit C Investor Rights Agreement
Exhibit D Co-Sale and First Refusal Rights Agreement
Exhibit E Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
SCHEDULES
Schedule 4.2(c). . . . . . . .Options, Warrants, Reserved Shares
Schedule 4.2(d) . . . . . . .Outstanding Security Holders
Schedule 4.6 . . . . . . . . .Liabilities
Schedule 4.7(a) . . . . . . .Title to Properties and Assets
Schedule 4.7(a) . . . . . . .Real Property
Schedule 4.8(b). . . . . . . .Intellectual Property Rights
Schedule 4.8(d). . . . . . . .Intellectual Property
Schedule 4.8(g) . . . . . . .Software
Schedule 4.8(h). . . . . . . .Licensed Software
Schedule 4.8(i). . . . . . . .Software Agreements
Schedule 4.9 . . . . . . . . .Material Contracts
Schedule 4.14. . . . . . . . .Registration Rights
Schedule 4.15 . . . . . . . .Insurance
Schedule 4.16. . . . . . . . .Financial Statements
Schedule 4.20. . . . . . . . .Tax Elections
Schedule 4.23. . . . . . . . .Interested Party Transactions
Schedule 6.3 . . . . . . . . .Capital Expenditures
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (the "AGREEMENT") is
entered into as of October 25, 1999 (the "EFFECTIVE DATE") by and between
xxxxxxxx.xxx, Inc., a Delaware corporation (the "COMPANY"), and Ticketmaster
Online-CitySearch, Inc., a Delaware corporation ("PURCHASER").
R E C I T A L S
WHEREAS, Purchaser desires to purchase from the Company and the Company
desires to sell to Purchaser 4,300,153 shares of the Company's Series A
Preferred Stock (the "SHARES"), representing 30.3% of the Company's issued and
outstanding capital stock on a fully-diluted basis (treating (i) all outstanding
options, warrants and rights to purchase or receive stock as fully exercised,
and (ii) all securities convertible into shares of the Company's common stock,
including, without limitation, the shares of Series A Preferred Stock to be
issued to the Additional Holders (as defined below), as converted) in exchange
for cash consideration in an amount equal to Five Million Dollars ($5,000,000);
and
WHEREAS, the Company has agreed to issue additional shares of Series A
Preferred Stock to (a) certain additional investors (the "ADDITIONAL
INVESTORS"), on terms and conditions set forth in Subscription Agreements to be
entered into between the Company and each of the Additional Investors and
(b) certain holders (collectively with the Additional Investors, the "ADDITIONAL
HOLDERS") of convertible promissory notes of the Company which will be converted
into shares of Series A Preferred Stock simultaneously with the consummation of
the transactions contemplated by this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the respective meanings given thereto in the
sections indicated below:
DEFINED TERM SECTION PAGE
Act. . . . . . . . . . . . . . . . . . .Section 4.5(b). . . 5
Additional Holders . . . . . . . . . . .Preamble. . . . . . 1
Additional Investors . . . . . . . . . .Preamble. . . . . . 1
Aggregate Purchase Price . . . . . . . .Section 2.2 . . . . 3
Aggregate Threshold. . . . . . . . . . .Section 8.3 . . . . 23
Agreement. . . . . . . . . . . . . . . .Preamble. . . . . . 1
Balance Sheet Date . . . . . . . . . . .Section 4.16. . . . 11
CERCLA . . . . . . . . . . . . . . . . .Section 4.21. . . . 13
Certificate. . . . . . . . . . . . . . .Section 2.1 . . . . 3
Closing Date . . . . . . . . . . . . . .Section 3.1 . . . . 3
Closing. . . . . . . . . . . . . . . . .Section 3.1 . . . . 3
Code . . . . . . . . . . . . . . . . . .Section 4.20. . . . 13
Common Stock . . . . . . . . . . . . . .Section 4.2(a). . . 4
Company Intellectual Property Assets . .Section 4.8(b). . . 6
Company Marks. . . . . . . . . . . . . .Section 4.8(d). . . 7
Company Required Consents. . . . . . . .Section 4.11. . . . 10
Company. . . . . . . . . . . . . . . . .Preamble. . . . . . 1
Conversion Shares. . . . . . . . . . . .Section 4.2(c). . . 4
Copyrights . . . . . . . . . . . . . . .Section 4.8(a). . . 6
Damages. . . . . . . . . . . . . . . . .Section 8.1(a). . . 22
Designated Software Agreements . . . . .Section 4.8(i). . . 9
Effective Date . . . . . . . . . . . . .Preamble. . . . . . 1
Employee Pension Benefit Plan. . . . . .Section 4.22(a) . . 14
ERISA. . . . . . . . . . . . . . . . . .Section 4.22(a) . . 14
Financial Statements . . . . . . . . . .Section 4.16. . . . 11
GAAP . . . . . . . . . . . . . . . . . .Section 4.16. . . . 11
Hazardous Materials. . . . . . . . . . .Section 4.21. . . . 13
Indemnifying Party . . . . . . . . . . .Section 8.1(c). . . 22
Indemnitee . . . . . . . . . . . . . . .Section 8.1(c). . . 22
Intellectual Property Rights . . . . . .Section 4.8(a). . . 5
Intellectual Property. . . . . . . . . .Section 4.8(a). . . 6
Investment Transactions. . . . . . . . .Section 6.7 . . . . 19
Investor Rights Agreement. . . . . . . .Section 4.14. . . . 11
Licensed Software Agreements . . . . . .Section 4.8(h). . . 8
Licensed Software. . . . . . . . . . . .Section 4.8(g). . . 8
Marks. . . . . . . . . . . . . . . . . .Section 4.8(a). . . 6
Material Contracts . . . . . . . . . . .Section 4.9 . . . . 10
Multiemployer Plan . . . . . . . . . . .Section 4.22(a) . . 14
Notes. . . . . . . . . . . . . . . . . .Preamble. . . . . . 1
Other Licensed Technology. . . . . . . .Section 4.8(h). . . 8
Owned Software . . . . . . . . . . . . .Section 4.8(g). . . 8
Patents. . . . . . . . . . . . . . . . .Section 4.8(a). . . 6
Proceedings. . . . . . . . . . . . . . .Section 4.10. . . . 10
Purchaser. . . . . . . . . . . . . . . .Preamble. . . . . . 1
Real Property. . . . . . . . . . . . . .Section 4.7(c). . . 5
SEC. . . . . . . . . . . . . . . . . . .Section 4.14. . . . 11
Shares . . . . . . . . . . . . . . . . .Preamble. . . . . . 1
Software . . . . . . . . . . . . . . . .Section 4.8(a). . . 6
Tax Returns. . . . . . . . . . . . . . .Section 4.19(a) . . 13
Taxes. . . . . . . . . . . . . . . . . .Section 4.19(a) . . 12
Trade Secrets. . . . . . . . . . . . . .Section 4.8(a). . . 6
2
ARTICLE II
AGREEMENT TO PURCHASE AND SELL STOCK
2.1 AUTHORIZATION. As of the Closing (as defined below), the Company
will have authorized the issuance, pursuant to the terms and conditions of
this Agreement, of 6,978,359 shares of the Company's Series A Preferred
Stock, having the rights, preferences, privileges and restrictions set forth
in the Amended and Restated Certificate of Incorporation of the Company
attached to this Agreement as EXHIBIT A (the "CERTIFICATE").
2.2 AGREEMENT TO PURCHASE AND SELL STOCK. Subject to the terms and
conditions hereof, the Company will issue and sell to Purchaser, and
Purchaser agrees to purchase from the Company, the Shares, for an aggregate
purchase price of Five Million Dollars ($5,000,000) (the "AGGREGATE PURCHASE
PRICE").
ARTICLE III
CLOSING; DELIVERY
3.1 THE CLOSING. The closing (the "CLOSING") of the transactions
contemplated by this Agreement shall be held at the offices of Xxxxxx, Xxxx &
Xxxxxxxx LLP at 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, on
October 28, 1999, or at such other time and place as to which the Company and
Purchaser may agree (the "CLOSING DATE").
3.2 DELIVERY. At the Closing, the Company will deliver to Purchaser a
certificate representing the Shares and Purchaser will deliver to the Company by
wire transfer (to a bank account designated by the Company in writing at least
one (1) business day prior to the Closing) an amount in cash equal to the
Aggregate Purchase Price.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under, and by
virtue of, the laws of its state of incorporation, and has all requisite
corporate power and authority to own its properties and assets and to carry on
its business as now conducted and as presently proposed to be conducted. The
Company is qualified to do business as a foreign corporation in each
jurisdiction where failure to be so qualified would have a material adverse
effect on its condition (financial or otherwise), business, assets, properties
or operations.
4.2 CAPITALIZATION. Immediately prior to the Closing, the authorized
capital stock of the Company will consist of the following:
3
(a) COMMON STOCK. A total of 19,000,000 authorized shares of
Common Stock, $0.01 par value (the "COMMON STOCK"), of which 5,174,800 shares
are issued and outstanding.
(b) PREFERRED STOCK. A total of 11,000,000 authorized shares of
Preferred Stock, $0.01 par value, of which 6,978,359 shares will be designated
Series A Preferred Stock, none of which will be issued and outstanding.
(c) OPTIONS, WARRANTS AND RESERVED SHARES. The Company has
reserved an aggregate of 6,978,359 shares of its Common Stock for possible
issuance upon conversion of the shares of Series A Preferred Stock to be
issued hereunder (the "CONVERSION SHARES"). Except as set forth on SCHEDULE
4.2(c), there are no options, warrants, conversion privileges or other
rights, or agreements, obligations or other commitments, whether written or
oral, contingent or otherwise, with respect to the issuance thereof,
presently outstanding to purchase any of the capital stock of the Company.
Except as set forth on SCHEDULE 4.2(c), no shares (including the Shares and
the Conversion Shares) of the Company's outstanding capital stock, or stock
issuable upon exercise or exchange of any outstanding options or other stock
issuable by the Company, are subject to any rights of first refusal,
preemptive rights or other rights to purchase such stock (whether in favor of
the Company or any other person), pursuant to any agreement, commitment or
other obligation of the Company, whether written or oral, contingent or
otherwise. Except as set forth on SCHEDULE 4.2(c) and except for the
transactions contemplated by this Agreement, the Company is not currently
engaged in, nor does it currently intend to engage in, any discussions or
negotiations which could reasonably be expected to lead to the issuance of
any capital stock of the Company.
(d) OUTSTANDING SECURITY HOLDERS. SCHEDULE 4.2(d) sets forth a
complete list of all outstanding shareholders, option holders and other
security holders of the Company as of the Effective Date. SCHEDULE 4.2(d)
lists, for each option holder of the Company, such option holder's name, the
exercise price(s) of all option(s) granted to such optionholder, the term(s)
of such option(s), the vesting period(s) of such option(s), and any
contingencies applicable to such option(s).
4.3 SUBSIDIARIES. Except as set forth on SCHEDULE 4.3, the Company does
not presently own or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association, or other entity.
4.4 DUE AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of, and the performance of all obligations of the Company
under, this Agreement and the authorization, issuance, reservation for issuance
and delivery of all of the Shares being sold under this Agreement and of the
Conversion Shares has been taken or will be taken prior to the Closing. This
Agreement is a valid and binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors' rights generally and to general equitable principles.
4
4.5 VALID ISSUANCE OF STOCK.
(a) The Shares, when issued, sold and delivered in accordance with
the terms of this Agreement, will be duly and validly issued, fully paid and
non-assessable. The Conversion Shares have been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Certificate,
will be duly and validly issued, fully paid and non assessable.
(b) The outstanding shares of the capital stock of the Company are
duly and validly issued, fully paid and non-assessable, and shares of such
capital stock, and all outstanding stock, options and other securities of the
Company have been issued in full compliance with the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "ACT"), and
the registration and qualification requirements of all applicable state
securities laws, or in compliance with applicable exemptions therefrom, and all
other provisions of applicable federal and state securities laws, including,
without limitation, anti-fraud provisions.
4.6 LIABILITIES. Except as set forth on SCHEDULE 4.6, he Company has no
indebtedness for borrowed money that the Company has, directly or indirectly,
created, incurred, assumed or guaranteed, or with respect to which Company has
otherwise become directly or indirectly liable.
4.7 TITLE TO PROPERTIES AND ASSETS.
(a) Except as set forth on SCHEDULE 4.7(a), (i) the Company has,
or will have, as of the Closing, a good and valid title to or, in the case of
leased properties or properties held under license, a good and valid leasehold
or license interest in, all of its properties and assets and (ii) the Company
holds title to each such property and asset which it purports to own, free and
clear of all liens, adverse claims, mortgages, pledges, encumbrances, security
interest or charge of any kind. The representations in this SECTION 4.7 do not
apply to the Marks or Intellectual Property Rights as to which only the
representations in SECTION 4.8 shall apply.
(b) All of the tangible assets of the Company, are, or will be as
of the Closing, in all material respects in reasonably serviceable operating
condition and repair and are adequate for the conduct of the business of the
Company in substantially the same manner as has heretofore been conducted.
(c) SCHEDULE 4.7(c) sets forth a true and complete list of all
real property owned or leased by the Company (collectively, the "REAL
PROPERTY"), including the location of, and a brief description of the nature of
the activities conducted on, such Real Property.
4.8 INTELLECTUAL PROPERTY; SOFTWARE.
(a) For all purposes of this Agreement,
(i) "INTELLECTUAL PROPERTY RIGHTS" means intellectual
property rights arising from or in respect of the following, whether
protected, created or arising under the laws of the United States or any
other jurisdiction: (A) fictional business names, trade
5
names, service names, registered and unregistered trademarks and service
marks and logos (including any Internet domain names), and applications
therefor (collectively, "MARKS"); (B) patents, patent rights and all
applications therefor, including any and all continuation, divisional,
continuation-in-part, or reissue patent applications or patents issuing
thereon (collectively, "PATENTS"); (C) copyrights and all registrations
and applications therefor (collectively, "COPYRIGHTS"); and (D) know-how,
trade secrets, inventions, discoveries, concepts, ideas, methods,
processes, designs, formulae, technical data, drawings, specifications,
data bases and other proprietary and confidential information, including
customer lists, in each case to the extent not included in the foregoing
clauses (B) or (C) (collectively, "TRADE SECRETS"; Marks, Patents,
Copyrights and Trade Secrets are, collectively, "INTELLECTUAL PROPERTY").
(ii) "SOFTWARE" means any and all (A) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (B) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (C) descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the
foregoing, and (D) all documentation, including user manuals and training
materials, relating to any of the foregoing, in each case developed or
licensed by the Company, or used in or necessary for the conduct of its
business, specifically excluding those items prepared for customers in the
operation of the Company's business for which the customer contractually
has vested title.
(b) SCHEDULE 4.8(b) sets forth a complete and correct list of all
Intellectual Property Rights owned, licensed or used by the Company in the
conduct of its business (other than any Intellectual Property Rights consisting
of "shrink-wrap" licensed software), together with a listing of all material
licenses, franchises, licensing agreements (whether as licensor or licensee) to
which the Company is a party, and any other arrangement with respect to such
Intellectual Property Rights. All Intellectual Property Rights owned, licensed
or used by the Company or used or exercised in or necessary to the conduct of
the Company's business, are referred to herein, collectively, as the "COMPANY
INTELLECTUAL PROPERTY ASSETS."
(c) The Company has not, during the three years preceding the date
of this Agreement, been a party to any Proceeding, nor, to the knowledge of the
Company, is any Proceeding threatened that involved or is likely to involve a
claim of infringement or misappropriation by any person (including any
governmental authority) of any Intellectual Property Right of such person. No
Company Intellectual Property Asset is subject to any outstanding order,
judgment, decree, or stipulation to which the Company is subject in any
proceeding to which the Company is a party or, to its knowledge, any other
proceeding, restricting the use thereof by the Company, or restricting the
licensing thereof by the Company or any person. The current use and
exploitation of the Intellectual Property Assets by the Company (including
without limitation the licensing or other distribution of Software to third
parties by the Company) does not conflict with, infringe upon, violate or result
in the misappropriation of Intellectual Property Right of any person.
6
(d) Except as set forth on SCHEDULE 4.8(d):
(i) The Company owns no right, title or interest in any
Patent. The Company owns all right, title and interest in each of the
Marks listed in SCHEDULE 4.8(b) (collectively, the "COMPANY MARKS"), free
and clear of any and all liens and encumbrances, and the Company has not
received any notice or claim (whether written or oral) challenging the
Company's exclusive and complete ownership of any Company Marks or
suggesting that any other Person has any claim of legal or beneficial
ownership or other claim or interest with respect thereto;
(ii) The Company Marks are legally valid and enforceable
without any material qualification, limitation or restriction on their use
and the Company has not received any notice or claim (whether written or
oral) challenging the validity or enforceability of any Company Marks;
(iii) The Company has not taken any action (or failed to take
any action), or used or enforced (or failed to use or enforce) any of the
Company Marks, in each case in a manner that would result in the
abandonment, cancellation, forfeiture, relinquishment, or unenforceability
of any of the Owned Marks or any of the Company's rights therein;
(iv) The Company has taken reasonable steps to protect the
Company's rights in and to each of the Company Marks and to prevent the
unauthorized use thereof by any other Person, in each case in accordance
with standard industry practice, and has adequately policed the Company
Marks against third party infringement of which it is aware;
(v) The Company has not granted to any Person any right,
license or permission to use any of the Company Marks;
(vi) All Company Marks that have been registered have been
effectively registered in accordance with all applicable legal
requirements and are currently in compliance with all legal requirements;
(vii) All maintenance fees, annuities, and the like due on
Company Marks have been timely paid; and
(viii) No Xxxx that constitutes a Company Xxxx has been or is
now involved in any opposition or cancellation proceeding and, to the
Company's knowledge, no such action is threatened with the respect to any
of the Company Marks.
(e) The Company has taken reasonable precautions (as determined by
the Company's management) to protect the secrecy of any of its Trade Secrets
that derive commercial value from not being generally known to the public. The
Company has the absolute and unrestricted right to use all of the Trade Secrets
and none of the Trade Secrets owned by the Company is subject to any liens or
encumbrances, and the Company has not received any notice
7
or claim challenging the Company's absolute and unrestricted right to use any
of the Trade Secrets or suggesting that any other person has any claim with
respect thereto. None of the Trade Secrets has been, or is alleged to have
been, misappropriated from any other person. Except under appropriate
confidentiality obligations, to its best knowledge, there has been no
disclosure by the Company of material confidential information or other Trade
Secrets that derive commercial value from not being generally known to the
public.
(f) The Company either owns the entire right, title and interest
in, to and under, or has acquired a license to use, any and all Company
Intellectual Property Assets which are material to the conduct of its business
in the manner that the business has heretofore been or is presently being
conducted or as contemplated to be conducted pursuant to the Company's current
business plans, and no other Intellectual Property Rights are necessary for the
unimpaired continued operation of such businesses after the Effective Time in
the manner that such businesses have heretofore been or are presently being
conducted.
(g) SCHEDULE 4.8(g) sets forth a complete and accurate list of
all of the material Software (excluding Software that is available in
consumer retail stores and subject to "shrink-wrap" agreements). SCHEDULE
4.8(g) specifically identifies all material Software that is owned
exclusively by the Company (the "OWNED SOFTWARE") and all material Software
that is used by the Company in the conduct of its business that is not
exclusively owned by the Company (excluding software that is available in
consumer retail stores and subject to "shrink-wrap" agreements) (the
"LICENSED SOFTWARE"). The Company is the owner of all right, title and
interest in and to all Owned Software, including without limitation all
Copyrights, Trade Secrets and other Intellectual Property Rights relating
thereto, free and clear of any and all liens and encumbrances, and the
Company has not received any notice or claim (whether written, oral or
otherwise) challenging the Company's complete and exclusive ownership of all
Owned Software and all such Intellectual Property Rights relating thereto or
claiming that any other person has any claim of legal or beneficial ownership
with respect thereto. The Company has not assigned, licensed, transferred or
encumbered any of its rights in or to any Owned Software, including without
limitation any Copyrights, Trade Secrets or other Intellectual Property
Rights with respect thereto, to any person, excluding any non-exclusive
licenses granted to distributors or customers in the ordinary course of
business. The Company has lawfully acquired the right to use the Licensed
Software, as it is used in the conduct of its business as presently
conducted, and has not exercised any rights in respect of any Licensed
Software, including without limitation any reproduction, distribution or
derivative work rights, outside the scope of any license expressly granted by
the person from which the right to use such Licensed Software was obtained.
(h) SCHEDULE 4.8(h) contains a complete and accurate specific list
of all agreements and arrangements pertaining to the Licensed Software
(excluding software that is available in consumer retail stores and subject to
"shrink-wrap" agreements) (collectively, "LICENSED SOFTWARE AGREEMENTS") and a
complete and accurate list of all agreements and arrangements pertaining to any
other technology used or practiced by the Company as to which a person other
than the Company owns the applicable Intellectual Property Rights (collectively,
"OTHER LICENSED TECHNOLOGY AGREEMENTS" and, together with Licensed Software
Agreements,
8
the "Licensed Technology Agreements"). SCHEDULE 4.8(h) sets forth a
complete and accurate list of all royalty obligations of the Company under any
Licensed Technology Agreements. All Licensed Technology Agreements are in full
force and effect, and the Company is not in material breach thereof, nor is it
aware of any claim or basis for any claim to the contrary. All Licensed
Technology Agreements will be maintained by the Company in full force and effect
through the Effective Time. There are no outstanding, and, to the Company's
knowledge, no threatened disputes with respect to any Licensed Technology
Agreement. The rights licensed under each Licensed Technology Agreement shall
be exercisable by the Company on and after the Effective Time to the same extent
as prior to the Effective Time. The Licensed Technology Agreements together
expressly confer on the Company valid and enforceable rights under or in respect
of all of the Intellectual Property Rights that are not owned exclusively by the
Company and that are used or practiced in the Company's business. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in the impairment of any rights
under, any Licensed Technology Agreement.
(i) SCHEDULE 4.8(i) contains a complete and accurate list of all
agreements and arrangements involving the grant by the Company to any person of
any right to distribute, prepare derivative works based on, support or maintain
or otherwise commercially exploit any Software, including without limitation any
value-added reseller agreements, joint development or marketing agreements or
strategic alliance agreements involving any Software (collectively, "DESIGNATED
SOFTWARE AGREEMENTS"). All Designated Software Agreements are in full force and
effect, and the Company is not in material breach thereof, nor is it aware of
any claim or basis for a claim to the contrary. All Designated Software
Agreements will be maintained by the Company in full force and effect through
the Effective Time. There are no outstanding and, to the Company's knowledge,
no threatened disputes or disagreements with respect to any Designated Software
Agreement. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in any
impairment of rights under any Designated Software Agreement.
(j) To the Company's knowledge, the Company has taken commercially
reasonable actions in accordance with industry practice to protect its
Intellectual Property Rights in relation to employees, independent contractors
and consultants, including entering into agreements with such persons that
assign to the Company all of the employee's, contractor's or consultant's
rights, including all Intellectual Property Rights, in any Intellectual Property
created or developed thereby that is used in connection with, or that relates
to, the business of the Company. To the knowledge of the Company, no employee
of the Company has entered into any contract or other agreement with any person
(other than the Company) that restricts or limits in any way the scope or type
of work in which the employee may be engaged for the Company or requires the
employee to transfer, assign, or disclose information concerning the employee's
work with the Company to any other person.
4.9 MATERIAL CONTRACTS AND OBLIGATIONS. All agreements, contracts,
leases, licenses, instruments, commitments (oral or written), indebtedness,
liabilities and other obligations to which the Company is a party or by which it
is bound that (a) are material to the conduct and operations of its business and
properties, (b) involve any of the officers, consultants, directors,
9
employees or shareholders of the Company or (c) obligate the Company to
share, license or develop any product or technology (the "MATERIAL
CONTRACTS") are listed in SCHEDULE 4.9 and have been made available for
inspection by Purchaser and its counsel. For purposes of this SECTION 4.9,
"material" shall mean any agreement, contract, indebtedness, liability or
other obligation either (i) having an aggregate value, cost or amount in
excess of U.S. $10,000 or (ii) not terminable upon thirty days' notice.
4.10. LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation ("PROCEEDING") pending (or, to the Company's
knowledge, currently threatened) against the Company, its activities, properties
or assets or, to the Company's knowledge, against any officer, director or
employee of the Company in connection with such officer's, director's or
employee's relationship with, or actions taken on behalf of; the Company. To
the Company's knowledge, there is no factual or legal basis for any such
Proceeding that might result, individually or in the aggregate, in any material
adverse change in the business, properties, assets, condition (financial or
otherwise) or operations of the Company. The Company is not a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality and there is no Proceeding by
the Company currently pending or which the Company intends to initiate.
4.11 REQUIRED CONSENTS. All consents, approvals, orders, authorizations
or registrations, qualifications, designations, declarations or filings on the
part of the Company with any federal, state or local governmental authority or
otherwise required in connection with the consummation of the transactions
contemplated herein (the "COMPANY REQUIRED CONSENTS"), shall have been obtained
prior to and be effective as of the Closing. Based in part on the
representations of Purchaser set forth in ARTICLE V below, the offer, sale and
issuance of the Shares in conformity with the terms of this Agreement are exempt
from the registration and prospectus delivery requirements of the Act.
4.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in any
violation, breach or default of any term of the Company's charter or bylaws or
in any material respect of any term or provision of any mortgage, indenture,
contract, agreement or instrument to which Company is a party or by which it may
be bound, or of any provision of any foreign or domestic state or federal
judgment, decree, order, statute, rule or regulation applicable to or binding
upon Company. The execution, delivery and performance of and compliance with
this Agreement and the consummation of the transactions contemplated hereby will
not result in any such violation or default, or be in conflict with or
constitute, with or without the passage of time or the giving of notice or both,
either a default under Company's charter or bylaws, or any agreement or contract
of Company, or, to the best of the Company's knowledge, a violation of any
statutes, laws, regulations or orders, or an event which results in the creation
of any lien, charge or encumbrance upon any of the Company's assets.
4.13. DISCLOSURE. No representation or warranty by the Company in this
Agreement or in any statement or certificate signed by any officer of the
Company furnished or to be furnished to the Purchaser pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated therein or
10
necessary in order to make the statements therein, in light of the
circumstances in which they are made, not misleading.
4.14. REGISTRATION RIGHTS. Except as set forth on SCHEDULE 4.14 hereto
or as granted pursuant to the Investor Rights Agreement to be entered into
substantially in the form of EXHIBIT C hereto ("INVESTOR RIGHTS AGREEMENT"),
the Company has not granted or agreed to grant any person or entity any
rights (including "piggyback" registration rights) to have any securities of
the Company registered with the U.S. Securities and Exchange Commission
("SEC") or any other governmental authority.
4.15. INSURANCE. Set forth on SCHEDULE 4.15 is a complete and correct
list of all insurance policies of the Company of any kind currently in force
and also sets forth for each insurance policy the type of coverage, the name
of the insureds, the insurer, the premium, the expiration date, the
deductibles and loss retention amounts and the amounts of coverage.
4.16. FINANCIAL STATEMENTS. SCHEDULE 4.16 sets forth the Company's
unaudited balance sheet dated September 30, 1999 (the "BALANCE SHEET DATE")
and the income statements and statements of changes in cash flows of the
Company for the year ended December 31, 1998 and for each of the three-month
periods ended March 31, June 30 and September 30, 1999 (the "FINANCIAL
STATEMENTS"), in each case as reviewed by Xxxxxx & Company, the Company's
independent auditors. Such Financial Statements (a) were prepared in
accordance with the books and records of the Company, (b) are true, correct
and complete and present fairly the financial condition of the Company as of
the dates therein indicated and the results of operations for the periods
therein specified and (c) have been prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") applied on a consistent basis, except
for the omission of notes thereto and normal year-end audit adjustments.
Specifically, but not by way of limitation, the balance sheet of the
Financial Statements discloses all of the Company's material debts,
liabilities and obligations of any nature, whether due or to become due, as
of the Balance Sheet Date (including, without limitation, absolute
liabilities, accrued liabilities and contingent liabilities) to the extent
such debts, liabilities and obligations are required to be disclosed in
accordance with GAAP. The Company has good and marketable title to all
assets set forth on the balance sheet of the Financial Statements, except for
such assets as have been spent, sold or transferred in the ordinary course of
business since the Balance Sheet Date.
4.17. CERTAIN ACTIONS. Since the Balance Sheet Date, the Company has
not: (a) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital
stock; (b) incurred any indebtedness for money borrowed or incurred any other
liabilities individually in excess of $5,000 or in excess of $10,000 in the
aggregate; (c) made any loans or advances to any person, other than ordinary
advances for travel expenses; (d) sold, exchanged or otherwise disposed of
any material assets or rights other than the sale of inventory in the
ordinary course of its business; or (e) entered into any transactions with
any of its officers, directors or employees or any entity controlled by any
of such individuals (other than employment, stock option, confidentiality,
non-competition and intellectual property rights agreements entered into in
the ordinary course of business and disclosed on SCHEDULE 4.9 hereto).
11
4.18. ACTIVITIES SINCE BALANCE SHEET DATE. Since the Balance Sheet Date,
there has not been:
(a) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of the Company (as presently
conducted and as presently proposed to be conducted);
(b) any waiver by the Company of a valuable right or of a material
debt owed to it;
(c) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except such a
satisfaction, discharge or payment made in the ordinary course of business that
is not material to the assets, properties, financial condition, operating
results or business of the Company;
(d) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound
or subject, except for changes or amendments which are expressly provided for
or disclosed in this Agreement;
(e) any material change in any compensation arrangement or
agreement with any present or prospective employee, contractor or director
not approved by the Company's Board of Directors; or
(f) to the Company's knowledge, any other event or condition of
any character which would materially and adversely affect the assets,
properties, financial condition, operating results or business of the Company.
4.19. TAX MATTERS.
(a) Definitions. For purposes of this Agreement:
(i) the term "TAXES" means (A) all federal, state, local,
foreign and other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties or other
taxes, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
with respect thereto, (B) any liability for payment of amounts described
in clause (A) whether as a result of transferee liability, of being a
member of an affiliated, consolidated, combined or unitary group for any
period, or otherwise through operation of law and (C) any liability for
the payment of amounts described in clauses (A) or (B) as a result of any
tax sharing, tax indemnity or tax allocation agreement or any other
express or implied agreement to indemnify any other person; and
12
(ii) the term "TAX RETURNS" means all returns, declarations,
reports, statements and other documents required to be filed in respect of
Taxes.
(b) There have been no examinations or audits of any Tax Returns
of the Company by any applicable federal, state or local governmental agency,
and there are in effect no waivers of applicable statutes of limitations with
respect to Taxes of the Company for any year.
(c) The Company has accurately completed and timely filed in
correct form all Tax Returns required to have been filed by it, and the
Company has paid all Taxes required to be paid by it.
(d) There are no liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of the Company.
4.20. TAX ELECTIONS. The Company has not filed a consent pursuant to the
collapsible corporation provisions of Section 341(f) of the Internal Revenue
Code of 1986, as amended (the "CODE") (or any corresponding provision of state,
local or foreign Tax law). SCHEDULE 4.20 sets forth all elections with respect
to Taxes that would have a material effect on the Company, its financial
condition, its business as presently conducted or presently proposed to be
conducted, or any of its properties or material assets.
4.21. ENVIRONMENTAL MATTERS. During the period that the Company has owned
or leased its properties and facilities, (a) there have been no disposals,
releases or threatened releases of Hazardous Materials (as defined below) on,
from or under such properties or facilities and (b) neither the Company, nor, to
the Company's knowledge, any third party, has used, generated, manufactured or
stored on, under or about such properties or facilities or transported to or
from such properties or facilities any Hazardous Materials. The Company has no
knowledge of any presence, disposals, releases or threatened releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to the Company having taken possession of any of
such properties or facilities. For purposes of this Agreement, the terms
"disposal," "release" and "threatened release" shall have the definitions
assigned thereto by the U.S. Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended
("CERCLA"). For the purposes of this SECTION 4.21, "HAZARDOUS MATERIALS" shall
mean any hazardous or toxic substance, material or waste which is regulated
under, or defined as a "hazardous substance," "pollutant," "contaminant," "toxic
chemical," "hazardous material," "toxic substance" or "hazardous chemical" under
(i) CERCLA; (ii) the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Section 11001 ET SEQ.; (iii) the U.S. Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, ET SEQ.; (iv) the U.S. Toxic Substances Control
Act, 15 U.S.C. Section 2601 ET SEQ.; (v) the U.S. Occupational Safety and Health
Act of 1970, 29 U.S.C. Section 651 ET SEQ.; (vi) regulations promulgated under
any of the above statutes or (vii) any applicable state or local statute,
ordinance, rule, or regulation that has a scope or purpose similar to those
statutes identified above.
4.22 EMPLOYEE BENEFITS.
13
(a) For all purposes of this Agreement,
(i) "EMPLOYEE PENSION BENEFIT PLAN" means any employee
pension benefit plan, as defined in Section 3(2) of ERISA, that is subject
to Title IV of ERISA, other than a Multiemployer Plan.
(ii) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(iii) "MULTIEMPLOYER PLAN" means a multiemployer plan, as
defined in Section 3(37) and 4001(a)(3) of ERISA.
(b) The Company does not currently sponsor and has not ever
sponsored, maintained, contributed to, or incurred an obligation to contribute
to, any Employee Pension Benefit Plan on behalf of or with respect to any
employee of the Company. The Company does not currently sponsor, maintain or
contribute to any Multiemployer Plan covering its employees.
4.23. INTERESTED PARTY TRANSACTIONS. Except as set forth SCHEDULE 4.23,
no officer or director of any of the Company or any "affiliate" or "associate"
(as those terms are defined in Rule 405 promulgated under the Act) of any such
person has had, either directly or indirectly, a material interest in: (a) any
person or entity which purchases from or sells, licenses or furnishes to the
Company any goods, property, technology, intellectual or other property rights
or (b) any contract or agreement to which the Company is a party or by which it
may be bound or affected.
4.24. STOCK RESTRICTION AGREEMENTS. Each person who, pursuant to any
benefit, bonus or incentive plan of the Company, holds any currently outstanding
shares of common stock or other securities of Company or any option, warrant or
right to acquire such shares or other securities, has entered into or is
otherwise bound by, an agreement granting the Company (a) the right to
repurchase the shares, or to cancel the option, warrant or right, in the event
the holder's employment or services with the Company terminate for any reason,
subject to release of such repurchase or cancellation right pursuant to such
agreement or on terms and conditions specified by the Board of Directors of the
Company and (b) a right of first refusal with respect to all such shares. The
Company has furnished to Purchaser true and complete copies of the forms of all
such stock restriction agreements.
4.25 MINUTE BOOKS. The minute books of the Company provided to Purchaser
contain a complete summary of all meetings of directors and stockholders since
the time of incorporation and reflect all transactions referred to in such
minutes accurately in all material respects.
4.26 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company, threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results or business of the Company, nor is
14
the Company aware of any labor organization involving its employees. The
Company is not aware that any officer or key employee, or that any group of
key employees, intends to terminate his or her employment with the Company,
nor does the Company have a present intention to terminate the employment of
any of the foregoing. The employment of each officer and employee is
terminable at the will of the Company, subject to the severance payment
obligations contained in agreements disclosed on SCHEDULE 4.9 hereof.
4.27 YEAR 2000 COMPLIANCE. The Company's information technology,
including the Company's internal computer systems and all software and other
products designed by and/or sold by the Company, is Year 2000 compliant.
"Year 2000 compliant" means the information technology is designed to be used
prior to, during, and after the calendar Year 2000 A.D., and the information
technology used during each such time period will accurately receive, provide
and process date/time data (including, but not limited to, calculating,
comparing and sequencing) from, into and between the twentieth and twenty-first
centuries, including the years 1999 and 2000, and leap year calculations and
will not malfunction, cease to function, or provide invalid or incorrect results
as a result of date/time data.
4.28 NO RESTRICTIONS ON SHARES. Other than as set forth in this
Agreement, the Certificate, the Investor Rights Agreement and the Co-Sale and
First Refusal Rights Agreement to be entered into in substantially the form
attached hereto as EXHIBIT D, there are no restrictions on the Shares or
Conversion Shares.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company as follows:
5.1 ORGANIZATION; DUE AUTHORIZATION; NO CONFLICTS.
(a) The Purchaser is a corporation duly organized, validly
existing and in good standing under, and by virtue of, the laws of its state
of incorporation, and has all requisite corporate power and authority to
enter into and consummate this Agreement and the transactions and agreements
contemplated hereby. All corporate action on the part of the Purchaser, its
officers, directors and shareholders necessary for the authorization, execute
and delivery of, and the performance of all obligations of the Purchaser
under this Agreement has been taken or will be taken prior to the Closing.
This Agreement when executed and delivered by Purchaser will constitute a
valid and legally binding obligation of Purchaser, subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization
and similar laws affecting creditors' rights generally and to general
equitable principles.
(b) The Purchaser is not in any violation, breach or default of
any term of the Purchaser's charter or bylaws or in any material respect of
any term or provision of any mortgage, indenture, contract, agreement or
instrument to which the Purchaser is a party or by which it may be bound, or
of any provision of any foreign or domestic state or federal judgment,
decree, order, statute, rule or regulation applicable to or binding upon the
Purchaser. The
15
execution, delivery and performance of and compliance with this Agreement and
the consummation of the transactions contemplated hereby will not result in
any such violation or default, or be in conflict with or constitute, with or
without the passage of time or the giving of notice or both, either a default
under the Purchaser's charter or bylaws, or any agreement or contract of
Purchaser, or, to the best of the Purchaser's knowledge, a violation of any
statutes, laws, regulations or orders, or an event which results in the
creation of any lien, charge or encumbrance upon any of the Purchaser's
assets.
5.2 INVESTIGATION; ECONOMIC RISK. Purchaser acknowledges that it has
had an opportunity to discuss the business, affairs and current prospects of the
Company with its officers. Purchaser further acknowledges having had access to
information about the Company that it has requested. Purchaser acknowledges
that it is able to fend for itself in the transactions contemplated by this
Agreement and has the ability to bear the economic risks of its investment
pursuant to this Agreement.
5.3 PURCHASE FOR OWN ACCOUNT. The Shares and the Conversion Shares will
be acquired for its own account, not as a nominee or agent, and not with a view
to or in connection with the sale or distribution of any part thereof; PROVIDED,
HOWEVER, that the parties agree that Purchaser may transfer a portion of its
investment in the Company to American Express or a subsidiary thereof in
connection with other business arrangements among the Company, Purchaser and
American Express. In the event that the Purchaser agrees to so transfer a
portion of its investment, it will only do so in compliance with applicable law.
5.4 EXEMPT FROM REGISTRATION; RESTRICTED SECURITIES. Purchaser
understands that the Shares and the Conversion Shares will not be registered
under the Act, on the ground that the sale provided for in this Agreement is
exempt from registration under the Act, and that the reliance of the Company on
such exemption is predicated in part on Purchaser's representations set forth in
this Agreement.
5.5 RESTRICTIVE LEGENDS. It is understood that each certificate
representing (a) the Share, (b) the Conversion Shares and (c) any other
securities issued in respect of the any of the foregoing upon any stock
split, stock dividend, recapitalization, merger or similar event shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.
5.6 REMOVAL OF RESTRICTIVE LEGEND. The legend set forth above shall be
removed by the Company from any certificate evidencing Shares or Conversion
Shares upon delivery to the
16
Company of an opinion by counsel, reasonably satisfactory to the Company,
that a registration statement under the Act is at that time in effect with
respect to the legended security or that such security can be freely
transferred in a public sale without such a registration statement being in
effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the Company issued the Shares or
Conversion Shares.
5.7 STATUS OF PURCHASER. Purchaser is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D of the Act.
ARTICLE VI
CERTAIN COVENANTS
6.1 USE OF PROCEEDS. The Company will use the proceeds from the
purchase of the Shares under this Agreement for working capital and general
corporate purposes.
6.2 EXPENSES. All costs and expenses incurred in connection with this
Agreement and in closing and carrying out the transactions contemplated hereby
shall be paid by the party incurring such cost or expense. This section shall
survive the termination of this Agreement.
6.3 CONDUCT OF THE BUSINESS. From the date hereof until the Closing
Date, the Company will conduct its business in the ordinary course and use its
commercially reasonable efforts, without paying or increasing the compensation,
payments, remuneration or fees payable to any person other than in the ordinary
course of business, to preserve intact its business organizations and
relationships and goodwill with third parties. Without limiting the generality
of the foregoing, from the date hereof until the Closing Date:
(a) Without the Purchaser's prior consent (which consent shall
not be unreasonably withheld or delayed), the Company will not and will not
agree to:
(i) purchase or otherwise acquire assets from any other
person, or sell or transfer any assets of its business, other than in the
ordinary course of business;
(ii) incur any liability, except liabilities (A) incurred in
the ordinary course of business where the aggregate dollar amount of all
such liabilities incurred does not exceed Ten Thousand Dollars ($10,000),
(B) incurred pursuant to existing obligations of the Company that are
disclosed in the Schedules hereto or (C) expressly contemplated by the
terms of this Agreement;
(iii) amend or modify in any material respect or terminate
any Material Contract or any other contract entered into by the Company
after the date hereof which, if in existence on the date hereof, would be
considered a Material Contract; or
(iv) make or commit to make any capital expenditure, or
group of related capital expenditures, in excess of Ten Thousand Dollars
($10,000), other than
17
(A) capital expenditures set forth on SCHEDULE 6.3 and (B) capital
expenditures expressly required under any Material Contract.
(b) The Company will:
(i) (A) maintain its assets in the ordinary course of
business in reasonably serviceable operating order and condition,
reasonable wear and tear, damage by fire and other casualty excepted,
(B) promptly repair, restore or replace any material assets in the
ordinary course of business and (C) upon any damage, destruction or loss
to any of such assets, apply any and all insurance proceeds received with
respect thereto to the prompt repair, replacement and restoration thereof
to the condition of such assets before such event to the extent reasonably
practicable;
(ii) comply with all material applicable laws;
(iii) not allow any liens for taxes to be placed on any of
its assets, except for liens arising from taxes which are due but not yet
payable;
(iv) use its commercially reasonable efforts to obtain,
prior to the Closing Date, all Company Required Consents;
(v) promptly notify Purchaser in writing if it has
knowledge of any action, event, condition or circumstance, or group of
actions, events, conditions or circumstances that materially affect the
business of the Company, other than changes in general economic
conditions;
(vi) promptly notify Purchaser in writing of the
commencement of any Proceeding by or against the Company, or of becoming
aware of any material claim, action, suit, inquiry, proceeding, notice of
violation, subpoena, government audit or disallowance that could
reasonably be expected to result in a Proceeding; and
(vii) pay accounts payable and pursue collection of its
accounts receivable in the ordinary course of business.
6.4 FURTHER ASSURANCES. The parties hereto shall execute and deliver
such other documents, certificates, agreements and other writings and shall take
such other actions as may be reasonably necessary or desirable (including,
without limitation, obtaining the Required Consents and making necessary filings
with all governmental authorities) in order to consummate or implement
expeditiously the transactions contemplated by this Agreement. Notwithstanding
the foregoing, no party hereto shall have any obligation to expend any funds or
to incur any other obligation in connection with the consummation of the
transactions contemplated hereby (including, by way of illustration only, any
payment in connection with obtaining the Required Consents) other than normal
out-of-pocket expenses (such as fees and expenses of counsel and accountants)
reasonably necessary to consummate such transactions.
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6.5 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS. The parties hereto shall
use their best efforts to keep this Agreement and the execution and terms
hereof confidential, and shall consult with each other before issuing any
press release or making any public statement with respect to this Agreement
or the transactions contemplated hereby. The parties may, however, disclose
such matters to its directors, officers, executive employees and professional
advisors and those of prospective financing sources to such extent as may be
reasonable for the negotiation, execution and consummation of this Agreement.
Each party shall keep confidential all information concerning the other
obtained pursuant to this Agreement and shall not use such information except
in connection with the transactions set forth herein. If for any reason such
transactions shall not be consummated, each party will return all such
information (including all copies thereof) regarding the other, to the other
party. The foregoing obligations of confidentiality in this SECTION 6.5 do
not pertain to the disclosure of information which is available publicly, is
required to be disclosed by any court or any party discloses, upon advice of
counsel, in order to comply with applicable law. The parties hereto
recognize and agree that in the event of a breach by a party of this section,
money damages would not be an adequate remedy to the injured party for such
breach and, even if money damages were adequate, it would be impossible to
ascertain or measure with any degree of accuracy the damages sustained by
such injured party therefrom. Accordingly, if there should be a breach or
threatened breach by a party of the provisions of this section, the injured
party shall be entitled to an injunction restraining the breaching party from
any breach without showing or proving actual damage sustained by the injured
party. Nothing in the preceding sentence shall limit or otherwise affect any
remedies that a party may otherwise have under applicable law.
6.6 INSPECTION. Subject to confidentiality obligations and similar
restrictions that may be applicable to information furnished to the Company
by third parties that may be in the Company's possession from time to time
(including restrictions on the disclosure of government-classified
information), prior to the Closing, the Company shall allow Purchaser and its
accountants, counsel and other representatives reasonable access, during
normal business hours, by advance arrangement with the Company's management
and in the presence of representatives of the Company and in such manner so
as not to interfere unduly with the Company's operations, to all of the
properties, books, contracts, commitments, tax returns and records of its
business and appropriate officers and employees, and shall furnish such
representatives, at Purchaser's expense for copying only, with all financial
and operating data and other information concerning its affairs as Purchaser
may reasonably request.
6.7 OTHER INVESTMENTS. The Company and each of its officers and
other employees with managerial responsibilities, directors, representatives
and agents shall immediately cease any discussions or negotiations with any
parties with respect to any investment by such parties in the securities of
the Company ("INVESTMENT TRANSACTIONS"). Until the transactions contemplated
by this Agreement have been consummated, the Company shall not and none of
its officers, directors, employees representatives or agents will, directly
or indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any non-public information to any person or
group (other than Purchaser or any designees of Purchaser) concerning any
Investment Transactions; PROVIDED, HOWEVER, that nothing herein shall prevent
the Company from conducting such "due diligence" inquiries (which shall be in
writing to the
19
extent possible) in response to any Investment Transaction proposal as the
directors of the Company in their good faith judgment, after consultation
with and based upon the advice of legal counsel, may be required in order to
comply with its fiduciary duties. The Company shall promptly notify
Purchaser in the event it receives any proposal or inquiry concerning an
Investment Transaction, including the material terms and conditions thereof
and the identity of the party submitting such proposal, and shall advise
Purchaser time to time of the status and any material developments concerning
the same, including the nature and content of any "due diligence" inquiries
made by it concerning any such proposal and furnishing copies of any such
written inquiries.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligations of each of
the Company and Purchaser to consummate the Closing are subject to the
satisfaction of each of the following conditions:
(a) DISTRIBUTION AGREEMENT. The Company and Purchaser shall have
entered into the Distribution Agreement in substantially the form attached as
EXHIBIT B.
(b) INVESTOR RIGHTS AGREEMENT. The Company and Purchaser shall
have entered into an Investor Rights Agreement in substantially the form
attached as EXHIBIT C.
(c) CO-SALE AGREEMENT. The Company, Purchaser and certain
stockholders of the Purchaser shall have entered into an Co-Sale and First
Refusal Rights Agreement in substantially the form attached as EXHIBIT D.
7.2 CONDITIONS TO OBLIGATION OF PURCHASER. The obligation of Purchaser
to purchase the Shares at the Closing is subject to the satisfaction of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in ARTICLE IV shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects as of the date of Closing with the same force and effect as if they had
been made on and as of such date, subject to changes contemplated by this
Agreement; and the Company shall have performed all obligations and conditions
herein required to be performed or observed by it on or prior to the Closing.
(b) PERFORMANCE OF OBLIGATIONS. The Company shall have performed
and complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing and shall have obtained all approvals, consents and qualifications
necessary to complete the purchase and sale described herein.
20
(c) CONSENTS AND WAIVERS. The Company shall have obtained any and
all consents and waivers necessary or appropriate for consummation by it of the
transactions contemplated by this Agreement.
(d) COMPLIANCE CERTIFICATE. At the Closing, the Company shall
deliver to Purchaser a certificate, dated the date of Closing, signed by the
Company's President certifying that the conditions specified in SECTION
7.2(a), (b), (c) and (f) have been fulfilled.
(e) SECURITIES LAWS. The offer and sale of the Shares to
Purchaser pursuant to this Agreement shall be exempt from the registration
requirements of the Act and the registration and/or qualification
requirements of all applicable state securities laws.
(f) AMENDMENT TO CERTIFICATE. The Certificate shall have been
duly adopted by the Company by all necessary corporate action of its Board of
Directors and shareholders and shall have been duly filed with and accepted
by the Secretary of State of the State of Delaware.
(g) OPINION OF COUNSEL. The Company shall have furnished
Purchaser with a legal opinion, dated as of the date of Closing, of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. substantially in the form set
forth in EXHIBIT E attached hereto.
(h) NO MATERIAL ADVERSE CHANGE. Since the date of this
Agreement, there shall have been no material adverse change in the business,
operations, prospects, condition (financial or otherwise) or results of
operations of the Company.
(i) OWNERSHIP OF TECHNOLOGY. Purchaser shall have received from
the Company all documents and other materials requested by Purchaser for the
purpose of examining and determining the Company's rights in and to any
technology, products and proprietary assets now used, proposed to be used in,
or necessary to, the Company's business as now conducted and proposed to be
conducted, and the status of the Company's ownership rights in and to all
such technology, products and proprietary assets shall be reasonably
satisfactory to Purchaser.
7.3 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to sell the Shares at the Closing is subject to the satisfaction of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in ARTICLE V hereof shall be true and correct
in all material respects as of the Closing.
(b) CONSENTS AND WAIVERS. The Purchaser shall have obtained any
and all consents and waivers necessary or appropriate for consummation by it of
the transactions contemplated by this Agreement.
(c) PAYMENT OF PURCHASE PRICE. Purchaser shall have delivered to
the Company the Aggregate Purchase Price in accordance with the provisions of
ARTICLE III.
21
(d) CERTIFICATE EFFECTIVE. The Certificate shall have been duly
adopted by the Company by all necessary corporate action of its Board of
Directors and shareholders, and shall have been duly filed with and accepted by
the Secretary of State of the State of Delaware.
(e) SECURITIES EXEMPTIONS. The offer and sale of the Shares and
the Conversion Shares to Purchaser pursuant to this Agreement shall be exempt
from the registration requirements of the Act, and the registration and/or
qualification requirements of all applicable state securities laws.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENT TO INDEMNIFY.
(a) Purchaser shall be indemnified and held harmless to the
extent set forth in this ARTICLE VIII by the Company in respect of any and
all demands, claims, actions or causes of action, assessments, losses,
damages, costs, expenses, liabilities, judgments, awards, fines, sanctions,
penalties, charges and amounts paid in settlement (net of insurance proceeds
actually received), including (i) interest on cash disbursements in respect
of any of the foregoing at the per annum rate of interest publicly announced
from time to time by the Bank of America as its prime rate (or reference
rate), compounded quarterly, from the date each such cash disbursement is
made until the person incurring the same shall have been indemnified in
respect thereof and (ii) reasonable costs, fees and expenses of attorneys,
accountants and other agents of such person (collectively, "DAMAGES")
reasonably and proximately incurred by Purchaser as a result of any
inaccuracy or misrepresentation in or breach of any representation, warranty,
covenant or agreement made by the Company in this Agreement as of the
Closing; and
(b) The Company shall be indemnified and held harmless to the
extent set forth in this ARTICLE VIII by Purchaser in respect of any and all
Damages reasonably and proximately incurred by the Company as a result of any
inaccuracy or misrepresentation in or breach of any representation, warranty,
covenant or agreement made by the Purchaser in this Agreement.
(c) Except as set forth in SECTIONS 8.1(a), and (b) and except
to the extent of confidentiality provisions in this Agreement, no person
shall have any claim or cause of action as a result of any inaccuracy or
misrepresentation in or breach of or failure to perform any representation,
warranty, covenant, agreement or obligation of a party providing
indemnification (each, an "INDEMNIFYING PARTY") against any affiliate,
stockholder, director, officer, employee, consultant or agent of such
Indemnifying Party. Nothing set forth in this ARTICLE VIII shall be deemed
to prohibit or limit the right of a party entitled to indemnification (each,
an "INDEMNITEE") at any time before, on or after the Closing Date, to seek
injunctive or other equitable relief for the failure of any Indemnifying
Party to perform any covenant or agreement contained herein.
22
8.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties, covenants, agreements and obligations of each
Indemnifying Party contained herein and all claims of any party in respect of
any breach of any representation, warranty, covenant, agreement or obligation
of any Indemnifying Party contained in this Agreement, shall survive the
Closing and shall expire on the second anniversary of the Closing Date,
except for (a) covenants or obligations which by their terms shall be
performed after the Closing, which shall survive the Closing and not expire
unless otherwise provided in this Agreement, (b) (i) the inaccuracy or
misrepresentation in or breach of any representation, warranty, covenant or
agreement made by the Company at any time in this Agreement arising out of
fraud or (ii) any inaccuracy or misrepresentation in or breach of any
representation or warranty made in SECTIONS 4.2, 4.19 or 4.20, which shall
survive the Closing Date until the thirty (30) days after the expiration of
any applicable statute of limitations, including extensions thereof and (c)
the representations and warranties of the Company made in SECTION 4.8, which
shall survive the Closing Date until the fifth anniversary of the Closing
Date. Notwithstanding anything herein to the contrary, indemnification for
claims for which written notice as provided in SECTION 8.5 has been timely
given shall not expire until the final resolution of such claim in accordance
with SECTION 9.13.
8.3 LIMITATION. The Purchaser shall be entitled to indemnification
pursuant to SECTION 8.1(a) only if the total aggregate Damages under
SECTION 8.1(a) exceeds One Hundred Thousand Dollars ($100,000) (the "AGGREGATE
THRESHOLD"); PROVIDED, HOWEVER, that once such aggregate Damages reach the
Aggregate Threshold, the Purchaser shall be entitled to receive the amount of
all Damages in excess of the Aggregate Threshold. The aggregate amount which
the Purchaser shall be entitled to be indemnified for under SECTION 8.1(a) will
not exceed the Aggregate Purchase Price.
8.4 CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe that
such Indemnitee is entitled to indemnification pursuant to this ARTICLE VIII in
respect of any Damages, such Indemnitee shall give the appropriate Indemnifying
Party prompt written notice thereof. Any such notice shall set forth in
reasonable detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give notice of any claim for
indemnification promptly, but within the periods specified by SECTION 8.2 shall
not adversely affect such Indemnitee's right to indemnity hereunder except to
the extent that such failure adversely affects the right of the Indemnifying
Party to assert any reasonable defense to such claim. Each such claim for
indemnity shall expressly state that the Indemnifying Party shall have only the
twenty (20) Business Day period referred to in the next sentence to dispute or
deny such claim. The Indemnifying Party shall have twenty (20) Business Days
following its receipt of such notice either (a) to acquiesce in such claim and
its respective responsibilities to indemnify the Indemnitee in respect thereof
in accordance with the terms of this ARTICLE VIII by giving such Indemnitee
written notice of such acquiescence or (b) to object to the claim by giving such
Indemnitee written notice of the objection. If the Indemnifying Party does not
object thereto within such twenty (20) Business Day period, such Indemnifying
Party shall be deemed to have acquiesced in such claim and their respective
responsibilities to indemnify the Indemnitee in respect thereof in accordance
with the terms of this ARTICLE VIII.
23
8.5 DEFENSE OF CLAIMS. In connection with any claim which may give
rise to indemnity under this ARTICLE VIII resulting from or arising out of
any claim or Proceeding against an Indemnitee by a person that is not a party
hereto, the Indemnifying Party may (unless such Indemnitee elects not to seek
indemnity hereunder for such claim), upon written notice sent at any time to
the relevant Indemnitee, assume the defense of any such claim or Proceeding
if the Indemnifying Party with respect to such claim or Proceeding
acknowledges to the Indemnitee the Indemnitee's right to indemnity pursuant
hereto in respect of the entirety of such claim (as such claim may have been
modified through written agreement of the parties or arbitration hereunder)
and provide assurances, reasonably satisfactory to such Indemnitee, that the
Indemnifying Party will be financially able to satisfy such claim in full if
such claim or Proceeding is decided adversely. If the Indemnifying Party
assumes the defense of any such claim or Proceeding, the Indemnifying Party
shall select counsel reasonably acceptable to such Indemnitee to conduct the
defense of such claim or Proceeding, shall take all steps reasonably
necessary in the defense or settlement thereof and shall at all times
diligently and promptly pursue the resolution thereof. If the Indemnifying
Party shall have assumed the defense of any claim or Proceeding in accordance
with this SECTION 8.5, the Indemnifying Party shall be authorized to consent
to a settlement of, or the entry of any judgment arising from, any such claim
or Proceeding, without the prior written consent of such Indemnitee;
PROVIDED, HOWEVER, that the Indemnifying Party shall pay or cause to be paid
all amounts arising out of such settlement or judgment either concurrently
with the effectiveness thereof or shall obtain and deliver to such
Indemnitees prior to the execution of such settlement a general release
executed by the person not a party hereto, which general release shall
release such Indemnitee from any liability in such matter; PROVIDED, FURTHER,
that the Indemnifying Party shall not be authorized to encumber any of the
assets of any Indemnitee or to agree to any restriction that would apply to
any Indemnitee or to its conduct of business; and PROVIDED, FURTHER, that a
condition to any such settlement shall be a complete release of such
Indemnitee and its affiliates, officers, employees, consultants and agents
with respect to such claim. Such Indemnitee shall be entitled to participate
in (but not control) the defense of any such action, with its own counsel and
at its own expense. Each Indemnitee shall, and shall cause each of its
affiliates, officers, employees, consultants and agents to, cooperate fully
with the Indemnifying Party in the defense of any claim or Proceeding being
defended by the Indemnifying Party pursuant to this SECTION 8.5. If the
Indemnifying Party does not assume the defense of any claim or Proceeding
resulting therefrom in accordance with the terms of this SECTION 8.5, such
Indemnitee may defend against such claim or Proceeding in such manner as it
may deem appropriate, including settling such claim or Proceeding after
giving notice of the same to the Indemnifying Party, on such terms as such
Indemnitee may deem appropriate. If the Indemnifying Party seeks to question
the manner in which such Indemnitee defended such claim or Proceeding or the
amount of or nature of any such settlement, the Indemnifying Party shall have
the burden to prove by a preponderance of the evidence that such Indemnitee
did not defend such claim or Proceeding in a reasonably prudent manner.
24
ARTICLE IX
MISCELLANEOUS
9.1 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the internal laws (without reference to choice or conflict of
laws) of the State of Delaware.
9.2 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
9.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto whose rights or obligations hereunder are affected by such
amendments. This Agreement and the rights and obligations therein may not be
assigned by Purchaser without the written consent of the Company except to a
parent corporation, a subsidiary or affiliate and except for American Express
or any subsidiary of American Express, as provided in SECTION 5.3. This
Agreement and the rights and obligations therein may not be assigned by the
Company without the written consent of Purchaser.
9.4 ENTIRE AGREEMENT. This Agreement (including the Schedules and
the other agreements executed by the parties simultaneously herewith,
including the agreements and instruments forms of which are attached as
Exhibits hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements, understandings and negotiations, both written and
oral, between the parties with respect to the subject matter of this
Agreement; PROVIDED, HOWEVER, that nothing in this Agreement shall be deemed
to terminate or supersede the provisions of any confidentiality and
nondisclosure agreements executed by the parties hereto prior to the date
hereof, which agreements shall continue in full force and effect until
terminated in accordance with their respective terms. Neither this Agreement
nor any provision hereof is intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
9.5 NOTICES. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been
duly given (a) when hand delivered to the other party, (b) when received when
sent by facsimile at the address and number set forth below, subject to
receipt of confirmation, (c) three business days after deposit in the United
States mail, registered or certified mail, return receipt requested, postage
prepaid and addressed to the other party as set forth below or (d) the next
business day after deposit with a national overnight delivery service,
postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, PROVIDED that the sending party
receives a confirmation of delivery from the delivery service provider.
25
To the Company: xxxxxxxx.xxx, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attention: President
Fax No.: (000) 000-0000
With copies to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
To Purchaser: Ticketmaster Online-CitySearch, Inc.
000 X. Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
With copies to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
Each person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this SECTION 9.5 by giving the other party written
notice of the new address in the manner set forth above.
9.6 AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by all parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent occurrence. No failure or delay by a party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise
26
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
9.7 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to the Company or to Purchaser, upon any breach or
default of any party hereto under this Agreement, shall impair any such right,
power or remedy of the Company or Purchaser, nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach of default thereafter occurring; nor shall any waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of the Company
or Purchaser of any breach of default under this Agreement or any waiver on the
part of the Company or Purchaser of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, or by law or otherwise afforded to the Company or Purchaser shall be
cumulative and not alternative.
9.8 FINDER'S FEES. Each party hereby agrees to indemnify and to hold
harmless the other party hereto from and against any liability for any
commission or compensation in the nature of a finder's fee of any broker or
other person or firm (and the costs and expenses of defending against such
liability or asserted liability) for which the indemnifying party or any of its
employees or representatives are responsible.
9.9 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts and the signatures delivered by telecopy, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument and delivered in person. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other parties hereto.
9.10 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended..
9.11 CONSTRUCTION. The parties hereto intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any party has breached any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) that the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
9.12 CUMULATIVE REMEDIES. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
27
9.13 THIRD-PARTY BENEFICIARIES. No provision of this Agreement shall
create any third-party beneficiary rights in any person, including any employee
of Purchaser or employee or former employee of the Company (including any
beneficiary or dependent thereof).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year herein above first written.
XXXXXXXX.XXX, INC.,
a Delaware corporation
By: /s/ XXXX XXXXXXXXX
---------------------------
Xxxx Xxxxxxxxx
Chief Executive Officer
TICKETMASTER ONLINE-CITYSEARCH, INC., a
Delaware corporation
By: /s/ XXXXXXX X. XXXXXX
---------------------------
Name: Xxxx Xxxxxx
---------------------------
Title: V.P.
---------------------------
29
