EXHIBIT 10.1
INTELLECTUAL PROPERTY PURCHASE AND SALE AGREEMENT
THIS INTELLECTUAL PROPERTY PURCHASE AND SALE AGREEMENT (this "AGREEMENT")
is entered into as of November 29, 2005 by and among Web Service Company, Inc.
("SELLER")and Interland, Inc ("INTERLAND").
RECITALS
A. Seller currently owns all right, title and interest in the Service Marks
and Domain Name (each as defined below). Pursuant to a License Agreement dated
February 3, 1998, as amended by an Amendment to License Agreement dated as of
January 1, 2003 (collectively, the "LICENSE AGREEMENT"), Seller granted to Web
Internet a license to use the Service Marks and the Domain Name, all in
accordance with the terms set forth in the License Agreement.
B. In addition, pursuant to a Line of Credit and Loan Agreement dated as of
January 1, 2003 between Seller and Web Internet, as amended by an Amended Loan
Agreement dated as of August 31, 2004 and a First Amendment to Amended Loan
Agreement dated as of December 14, 2004 (collectively, and as amended, restated,
extended, supplemented or otherwise modified from time to time, the "LOAN
AGREEMENT"), pursuant to which Seller made certain advances to Web Internet. As
of the date hereof, the outstanding obligations owed by Web Internet to Seller,
including outstanding principal in the amount of $2,250,000 and accrued interest
of $78,750.
C. Pursuant to an Asset Purchase Agreement of even date herewith (the
"PURCHASE AGREEMENT"), Interland has agreed to purchase substantially all of the
assets of Web Internet and, as part of the consideration for the transactions
contemplated by the Purchase Agreement, Interland shall assume and repay all of
Web Internet's indebtedness and other obligations to Seller under the Loan
Agreement.
D. Prior to the Closing (as defined below), Interland shall have formed a
wholly-owned subsidiary, which subsidiary is referred to as the "BUYER" in this
Agreement and which subsidiary shall execute a signature page to this Agreement
and agree to be bound by all of the terms and conditions relating to Buyer as
set forth herein.
E. In addition, as a condition to the closing of the transactions
contemplated by the Purchase Agreement and the assumption of the indebtedness
owed by Web Internet pursuant to the Loan Agreement, Web Service has agreed to
sell to Buyer, all of its rights, title and interest in and to Service Marks and
the Domain Name, all in accordance with the terms and conditions set forth
herein.
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AGREEMENT
NOW, THEREFORE, in consideration for the representations, warranties,
covenants and agreements contained herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. PURCHASE AND SALE OF SERVICE MARKS AND DOMAIN NAME. On and subject to
the terms and conditions set forth in this Agreement, Seller hereby agrees to
sell, transfer, convey assign and deliver to Buyer, and Buyer hereby agrees to
purchase and pay for, at the Closing, all of Seller's right, title and interest
in and to the following assets of Seller:
(a) the domain name "xxx.xxx" (the "DOMAIN NAME"); and
(b) all United States and foreign service marks and service xxxx
registrations and applications (including, without limitation, the supplemental
registrations and applications set forth on Schedule 1 hereto) and any common
law rights owned by Seller in the marks XXX.XXX and WEB DOT COM, as well as the
associated goodwill therein (collectively, the "SERVICE MARKS").
2. PURCHASE PRICE; ASSIGNMENT OF OBLIGATIONS. As consideration for the sale
of the Domain Name and the Service Marks to Buyer pursuant to Section 1 hereof,
at the Closing, Interland and Buyer shall execute the Amended and Restated
Promissory Note in the form attached hereto as Exhibit A (the "NOTE"), pursuant
to which Buyer and Interland shall, jointly and severally, agree to assume and
to pay and perform and discharge when due all of Web Internet's liabilities,
duties and obligations under the Loan Agreement, as amended and restated by the
Note, including, without limitation, Web Internet's obligation to pay to Seller
any and all amounts due thereunder (collectively, the "OBLIGATIONS"). As
security for the Obligations, at the Closing, Buyer and Interland shall execute
in favor of Seller a pledge and security agreement in the form attached hereto
as Exhibit B (the "SECURITY AGREEMENT") pursuant to which (i) Buyer shall grant
Seller a first priority security interest in the Domain Name and the Service
Marks and (ii) Interland shall pledge to Seller and grant Seller a security
interest in 100% of the issued and outstanding capital stock of Buyer.
3. CLOSING. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place on the Closing Date, as that term is defined in
the Purchase Agreement, and shall take place concurrently with the closing of
the transactions contemplated by the Purchase Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BUYER AND INTERLAND. Buyer and
Interland hereby, jointly and severally, represent, warrant and covenant to
Seller that the following statements are true and correct in all material
respects:
(a) ORGANIZATION AND GOOD STANDING. Interland is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Minnesota and has full corporate power and authority to enter into and perform
its obligations under this Agreement, and to own its properties and to carry on
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its business as presently conducted and as proposed to be conducted. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
enter into and perform its obligations under this Agreement, and to own its
properties and to carry on its business as presently conducted and as proposed
to be conducted. Interland and Buyer are each duly qualified to do business as a
foreign corporation in every jurisdiction in which the failure to so qualify
would have a material adverse effect upon Interland or the Buyer.
(b) CAPITALIZATION. The authorized capital stock of the Buyer consists
of 1,000 shares of common stock, $0.01 par value, of which 100 shares are issued
and outstanding. All of the issued and outstanding capital shares of Buyer are
owned by Interland, free and clear of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature ("LIENS"). There
are no options, warrants or rights outstanding which entitle their holder to
purchase or acquire any capital shares of Buyer.
(c) NO SUBSIDIARIES. Buyer does not control, or have any interest in,
directly or indirectly, any corporation, partnership, business trust,
association or other business entity.
(d) SEC REPORTS. Interland has delivered or made available to Seller
its annual report on Form 10-K for the fiscal year ended August 31, 2005as filed
with the U.S. Securities and Exchange Commission (collectively, the "SEC
REPORTS"). The information in the SEC Reports, taken as a whole, as of the date
of filing of the SEC Reports (i) was true and correct in all material respects
and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(e) VALIDITY OF TRANSACTIONS. This Agreement, and each document
executed and delivered by each of Interland and Buyer in connection with the
transactions contemplated by this Agreement (collectively, the "ANCILLARY
AGREEMENTS"), and the performance of the transactions contemplated therein have
been duly authorized, executed and delivered by each of Interland and Buyer and
is each the valid and legally binding obligation of each of Interland and Buyer,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency reorganization and moratorium laws and other laws
affecting enforcement of creditor's rights generally and by general principles
of equity.
(f) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Ancillary Agreements to which they are a party have been
authorized by the Boards of Directors of each of Interland and Buyer and, to the
extent necessary, the shareholders of each of Interland and Buyer, will not
violate any law or any order of any court or government agency applicable to
Interland or Buyer, as the case may be, or the Articles of Incorporation or
Bylaws of Interland or Buyer, as amended, and will not result in any breach of
or default under, or, except as expressly provided herein, result in the
creation of any encumbrance upon any of the assets of Interland or Buyer
pursuant to the terms of any agreement or instrument by which the Interland or
Buyer or any of their assets may be bound. No approval of or filing with any
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governmental authority is required for either of Interland or Buyer to enter
into, execute or perform this Agreement.
(g) TAXES. No material outstanding claim for assessment or collection
of taxes has been asserted against Interland or Buyer, and there are no pending,
or to the knowledge of Interland or Buyer, threatened tax audits, examinations
or claims that are material to Interland or Buyer.
(h) ABSENCE OF LIABILITIES. Buyer has no assets or liabilities and,
until such time as the Obligations have been satisfied in full, except as
otherwise permitted by this Agreement, shall have no assets other than the
Domain Name and the Service Marks and shall have no liabilities. Buyer may enter
into an intracompany agreement with Interland pursuant to which Buyer grants
Interland an irrevocable, perpetual license to exclusive use of the Domain Name
and the Service Marks and in which Interland and Buyer contract for Interland to
provide certain administrative, legal and accounting functions on behalf of
Buyer; provided, however, that any license granted pursuant to this Section 3(h)
must comply with the provisions of Section 5(b)(iii) of this Agreement.
(i) BROKERS AND FINDERS. Neither Interland nor Buyer have incurred,
nor shall either of them incur, directly or indirectly, any liability for any
brokerage or finders' fees, agent commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
to Buyer that the following statements are true and correct in all material
respects:
(a) ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
California and has full corporate power and authority to enter into and perform
its obligations under this Agreement, and to own its properties and to carry on
its business as presently conducted and as proposed to be conducted.
(b) VALIDITY OF TRANSACTIONS. This Agreement, and each document
executed and delivered by Seller in connection with the transactions
contemplated by this Agreement, and the performance of the transactions
contemplated therein have been duly authorized, executed and delivered by Seller
and is each the valid and legally binding obligation of Seller, enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency reorganization and moratorium laws and other laws affecting
enforcement of creditor's rights generally and by general principles of equity.
(c) TITLE TO ASSETS. Seller owns all right, title and interest in the
Domain Name and Service Marks, free and clear of any and all Liens. The sale of
the Domain Name and Service Marks by Seller to Buyer pursuant to this Agreement
and the Ancillary Agreements will effectively convey all of Seller's rights in
the Domain Name and Service Marks to Buyer (except for Seller's security
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interest in the Domain Name and Service Marks granted pursuant to the Security
Agreement).
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and each document executed and delivered by Seller has been duly
authorized by the Board of Directors of Seller and, to the extent necessary, the
shareholders of Seller, will not violate any law or any order of any court or
government agency applicable to Seller, as the case may be, or the Articles of
Incorporation or Bylaws of Seller, as amended, and will not result in any breach
of or default under, or, except as expressly provided herein, result in the
creation of any encumbrance upon any of the assets of Seller pursuant to the
terms of any agreement or instrument by which Seller or any of its assets may be
bound. No approval of or filing with any governmental authority is required for
Seller to enter into, execute or perform this Agreement
(e) BROKERS AND FINDERS. Seller has not incurred, nor it incur,
directly or indirectly, any liability for any brokerage or finders' fees, agent
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
(f) INTELLECTUAL PROPERTY. Seller is the sole owner of all right,
title, and interest, free and clear of all Liens, in and to the Service Marks
and the Domain Name. Seller is not aware of any restrictions on Seller's rights
to the Service Marks or the Domain Name. Seller has not received any written
notice claiming that Service Marks or the Domain Name are infringing upon the
rights of any other person or entity. Seller makes no other representations of
any kind regarding the Service Marks or the Domain Name.
5. ADDITIONAL AGREEMENTS OF INTERLAND, BUYER AND SELLER.
(a) FORMATION OF BUYER. As a condition to the Closing, Interland shall
have caused to be filed a Certificate of Incorporation in the State of Delaware
for the purpose of incorporating Buyer. The Certificate of Incorporation for
Buyer shall provide for the due organization of Buyer as a corporation under the
laws of the State of Delaware and shall contain the following additional
provisions:
(i) Until such time as the Obligations have been paid in full,
Buyer shall have at least one director acceptable to Seller in its sole
discretion (the "INDEPENDENT DIRECTOR"); provided, however, that the Independent
Director shall not be a stockholder, director, officer, employee or partner of
Seller or any of its affiliates and any costs associated with the appointment of
the Independent Director (including any compensation or other fees payable to
such Independent Director for service as a director of Buyer) shall be borne by
Seller;
(ii) No Independent Director may be removed unless his or her
successor has been elected;
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(iii) As long the Obligations remain outstanding and not paid in
full, Buyer shall not, without the unanimous consent of the board of directors,
including without limitation the Independent Director, take any Bankruptcy
Action. Bankruptcy Action shall mean:
(1) Commencing any case, proceeding or other action on
behalf of Buyer under any existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors;
(2) Instituting proceedings to have Buyer adjudicated as
bankrupt or insolvent;
(3) Consenting to the institution of bankruptcy or
insolvency proceedings against Buyer;
(4) Filing a petition or consent to a petition seeking
reorganization, arrangement, adjustment, winding-up, dissolution, composition,
liquidation or other relief on behalf of the corporation of its debts under any
federal or state law relating to bankruptcy;
(5) Seeking or consenting to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian or any similar official
for Buyer or a substantial portion of its properties;
(6) Making any assignment for the benefit of creditors of
Buyer; or
(7) Making any assignment for the benefit of creditors of
Buyer, and/or taking any action or causing Buyer to take any action in
furtherance of any of the foregoing; and
(iv) Until such time as the Obligations have been paid in full,
the Certificate of Incorporation of Buyer may not be amended to eliminate or
modify the provisions set forth in this Section 5(a) without the consent of the
Independent Director.
(b) NEGATIVE COVENANTS OF BUYER. In addition to the covenants
contained in the Loan Agreement, so long as the Obligations remain due and
outstanding, Buyer:
(i) shall not engage in any business activities other than
ownership of the Service Marks and the Domain Name and matters directly related
thereto;
(ii) shall not have any assets other than the Service Marks and
the Domain Name;
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(iii) shall not sell, assign, license, give, pledge, mortgage,
hypothecate or otherwise encumber, transfer or permit to be transferred the
Domain Name or the Service Marks; provided, however, that Buyer may grant an
exclusive, non-assignable, non-transferable license, without a right to
sublicense, of its rights to the Domain Names and Service Marks to Interland.
(iv) shall maintain its company records and books of account
separate and apart from those of any other person or entity;
(v) shall maintain its books, records, resolutions and agreements
as official records;
(vi) shall not commingle its funds or assets
with those of any other
entity;
(vii) shall hold its assets in its own name;
(vii) shall conduct its business in its own name;
(ix) shall maintain full and complete financial records in
accordance with generally accepted accounting principles and shall maintain its
financial statements, accounting records and other entity documents separate
from any other person or entity; (x) shall pay its own liabilities out of its
own funds and assets;
(xi) shall observe all corporate formalities;
(xii) shall maintain an arms-length relationship with its
affiliates.
(xiii) shall incur no indebtedness;
(xiv) shall not assume or guarantee or become obligated for the
debts of any other entity or hold out its credit as being available to satisfy
the obligation of any other entity; (xv) shall not pledge its assets for the
benefit of any other person or entity (other than pursuant to he Security
Agreement);
(xvi) shall identify or hold itself out as a separate and
distinct entity under its own name and not as a division or part of any other
person or entity;
(xvii) shall not make loans to any person or entity;
(xviii) shall not identify its affiliates as a division or part
of Buyer;
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(xix) shall not enter into, or be a party to, any transaction
with its shareholders, directors, officers or its affiliates (other than
pursuant to a license to Interland that complies with the provisions of
subsection (iii) of this section;
(xx) shall pay the salaries of its own employees, if any, from
its own funds;
(xxi) shall maintain adequate capital in light of its
contemplated business operations;
(xxii) not do any act in contravention of this Agreement or which
would make it impossible to carry out the business of Buyer; and
(xxiii) not confess to any judgment.
(c) NEGATIVE COVENANTS OF INTERLAND. In addition to the covenants
contained in the Loan Agreement, so long as the Obligations remain due and
outstanding, Interland may not sell, assign, license, give, pledge, mortgage,
hypothecate or otherwise encumber, transfer or permit to be transferred any and
all rights it may have (including, without limitation, any rights obtained
pursuant to a license from Buyer) to the Domain Name or the Service Marks.
(d) COMPLIANCE WITH COVENANTS. Interland and Buyer must notify the
Seller in writing of any Default (and the steps, if any, being taken to remedy
it) promptly upon becoming aware of its occurrence. In addition, promptly on
request by the Lender, Interland and Buyer must supply to Seller a certificate,
signed by two of its authorized signatories on its behalf, certifying that no
Default is outstanding or, if a Default is outstanding, specifying the Default
and the steps, if any, being taken to remedy it.
6. CONDITIONS OF CLOSING BY BUYER AND INTERLAND. The obligations of Buyer
and Interland hereunder are, at its option, subject to satisfaction, on or prior
to the Closing Date or such earlier date as specifically provided below, of each
of the following conditions:
(a) CLOSING OF PURCHASE AGREEMENT. The closing of the transactions
contemplated by the Purchase Agreement shall have occurred prior to, or
concurrently with, the Closing.
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties of Seller made in this
Agreement, the Ancillary Agreements or in any Exhibit, Schedule or document
delivered pursuant hereto, shall be true and complete in all material respects
as of the date hereof and on and as of the Closing Date as if made on and as of
that date.
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(ii) All of the terms, covenants and conditions to be complied
with and performed by Seller on or prior to the Closing Date shall have been
complied with or performed in all material respects.
(iii) Buyer and Interland shall have received a certificate,
dated as of the Closing Date, from Seller, executed by Seller to the effect
that: (a) the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date; (b) Seller has complied with or
performed in all material respects all terms, covenants and conditions to be
complied with or performed by it on or prior to the Closing Date; (c) there
exists no default or breach by Web Internet of its obligations under the Loan
Agreement except such as are being irrevocably waived by Seller or such as are
being cured by Seller's entry into the Purchase Agreement and the delivery by
Buyer and Interland of this Agreement, the Note and the Security Agreement; and
(d) upon the consummation of the transactions contemplated by this Agreement,
Seller irrevocably releases and discharges Web Internet from any and all
obligations under the Loan Agreement
(c) ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which: (a) would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms; (b) questions the validity or legality of any transaction contemplated
hereby; (c) seeks to enjoin any transaction contemplated hereby; (d) alleges
that the Domain Name or the Service Marks infringe the rights of any third
party; or (e) is a petition of bankruptcy by or against Seller, an assignment by
any Seller for the benefit of its creditors, or other similar proceeding.
(d) CLOSING DELIVERIES. Seller shall have executed and delivered to
Buyer the Xxxx of Sale in the form attached hereto as Exhibit C (the "XXXX OF
SALE") and the Security Agreement.
7. CONDITIONS OF CLOSING BY SELLER. The obligations of Seller
hereunder are, at its option, subject to satisfaction, on or prior to the
Closing Date or such earlier date as specifically provided below, of each of the
following conditions
(a) CLOSING OF PURCHASE AGREEMENT. The closing of the transactions
contemplated by the Purchase Agreement shall have occurred prior to, or
concurrently with, the Closing.
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(i) All representations and warranties of Interland and Buyer
made in this Agreement or in any Exhibit, Schedule or document delivered
pursuant hereto, shall be true and complete in all material respects as of the
date hereof and on and as of the Closing Date as if made on and as of that date.
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(ii) All of the terms, covenants and conditions to be complied
with and performed by Interland and Buyer on or prior to the Closing Date shall
have been complied with or performed in all material respects.
(iii) Seller shall have received a certificate, dated as of the
Closing Date, executed by Buyer and Interland, to the effect that: (a) the
representations and warranties of Buyer and Interland contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date; and (b) Buyer and Interland have
complied with or performed in all material respects all terms, covenants and
conditions to be complied with or performed by it on or prior to the Closing
Date.
(iv) Seller shall have received a certificate, dated as of the
Closing Date, executed by Buyer, certifying the Certificate of Incorporation,
Bylaws and resolutions of the Board of Directors of Buyer.
(v) Buyer shall have executed and delivered a signature page to
this Agreement, in form and substance acceptable to Seller, pursuant to which
Buyer shall agree to be bound by all of the provisions of this Agreement
relating to Buyer herein.
(c) ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which: (a) would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms; (b) questions the validity or legality of any transaction contemplated
hereby; (c) seeks to enjoin any transaction contemplated hereby; or (d) is a
petition of bankruptcy by or against Buyer or Interland, an assignment by Buyer
or Interland for the benefit of its creditors, or other similar proceeding.
(d) CLOSING DELIVERIES. Interland and Buyer shall have executed and
delivered to Seller the Note and the Security Agreement.
8. INDEMNIFICATION.
a. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by Buyer, Interland and Seller in this
Agreement shall survive the Closing and remain in full force until the repayment
in full of all of the Obligations.
b. BY BUYER AND INTERLAND. Buyer and Interland, jointly and severally,
hereby agree to indemnify, defend and hold harmless Seller, its affiliates, and
each of their respective officers, directors, shareholders and agents (each, a
"SELLER INDEMNIFIED PERSON"), for any claims, damages, actions, allegations,
liabilities, losses or charges (collectively, "CLAIMS") against any Seller
Indemnified Person for any breach of any representation or warranty or covenant
of Interland or Buyer in this Agreement any and all obligations owed by Buyer
and Interland under the Loan Agreement.
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c. BY SELLER. Seller hereby agrees to indemnify, defend and hold
harmless Buyer and Interland, their affiliates, and, as applicable, their
officers, directors, shareholders and agents (each, a "BUYER INDEMNIFIED
PERSON"), for any Claims against any Buyer Indemnified Person for any breach of
any representation or warranty or covenant of Seller in this Agreement.
d. NOTICE AND RESOLUTION OF CLAIMS.
(i) An indemnified party under this Agreement shall give written
notice to the indemnifying party within 30 days after obtaining knowledge of:
(A) any claim the indemnified party has against the indemnifying party not
involving a third-party claim or litigation; and (B) any third-party claim or
litigation against the indemnified party as to which recovery may be sought
against the indemnifying party because of the indemnity set forth in this
Section 6, specifying in reasonable detail the claim or litigation and the basis
for indemnification; provided, that the failure of the indemnified party
promptly to notify the indemnifying party of any such matter shall not release
the indemnifying party, in whole or in part, from its obligations under this
Section 8 except to the extent the indemnified party's failure to so notify
actually prejudices the indemnifying party's ability to defend against such
third-party claim or litigation. If such claim for indemnity arises from the
claim or litigation of a third party, the indemnified party shall permit the
indemnifying party to assume the defense of any such claim, litigation or any
litigation resulting from such claim.
(ii) If the indemnifying party assumes the defense of any such
third-party claim or litigation, the obligations of the indemnifying party under
this Agreement shall include taking all steps necessary in the investigation,
defense or settlement of such claim or litigation (including the retention of
legal counsel) and, subject to the limitations in this Section 8, holding the
indemnified party harmless from and against any and all losses caused by or
arising out of any settlement approved by the indemnifying party or any judgment
in connection with such claim or litigation. The indemnifying party shall not,
in the defense of such claim or litigation, except with the written consent of
the indemnified party, consent to entry of any judgment, or enter into any
settlement: (A) that does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the indemnified party a complete
release from, all liability in respect of or related to such claim or
litigation; or (B) the effect of which is to permit any injunction, declaratory
judgment, other order or other equitable relief to be entered, directly or
indirectly, against any indemnified party. The indemnifying party shall permit
the indemnified party to participate in such defense or settlement through
counsel chosen by the indemnified party, with the fees and expenses of such
counsel borne by the indemnified party.
(iii) Failure by the indemnifying party to notify the indemnified
party of its election to assume the defense of any such claim or litigation by a
third party within 30 days after notice thereof has been given to the
indemnifying party shall be deemed a waiver by the indemnifying party of its
right to assume the defense of such claim or litigation. If the indemnifying
party does not assume the defense of such claim or litigation by a third party,
the indemnified party may defend or settle such claim or litigation in such
manner as the indemnified party may deem appropriate and may settle such claim
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or litigation on such terms as it may deem appropriate.
9. ENTIRE AGREEMENT. This Agreement and the Ancillary Agreements contain
the entire agreement and understanding of the parties with respect to the
subject matter hereof, and any and all prior discussions, negotiations,
commitments or understandings related thereto, if any, are hereby merged herein
and therein. No representations or warranties, oral or otherwise, express or
implied, other than those specifically referred to in this Agreement, have been
made by any party hereto.
10. WAIVER, MODIFICATION AND AMENDMENT. No provision hereof may be waived
unless in writing signed by the parties hereto. Waiver of any one provision
herein shall not be deemed to be a waiver of any provision herein. This
Agreement may be amended or modified only by a written agreement executed by all
of the parties hereto.
11. BINDING ON PARTIES. This Agreement, and all the terms and provisions
hereof, shall be binding on the parties and their respective heirs, legal
representatives, successors and assigns, and shall inure to the benefit of the
parties and their respective heirs, legal representatives, successors and
assigns.
12. NO RELIANCE. The parties acknowledge that they have read and understood
this Agreement and the Ancillary Agreements, that they are relying solely upon
the contents of this Agreement and the Ancillary Agreements and are not relying
upon any other representations, warranties, or inducements whatsoever as an
inducement to enter into this Agreement and the Ancillary Agreements, other than
those referenced herein, and acknowledge that no representations, warranties, or
covenants have been made which are not referenced in this Agreement or the
Ancillary Agreements.
13. NO WAIVER. Failure to insist on compliance with any term, covenant, or
condition contained in this Agreement shall not be deemed a waiver of that term,
covenant, or condition, nor shall any waiver or relinquishment of any right or
power contained in this Agreement at any one time or more times be deemed a
waiver or relinquishment of any right or power at any other time or times.
14. GOVERNING LAW; VENUE; SERVICE OF PROCESS. This Agreement shall be
construed and enforced in accordance with the laws of the State of California.
Each of the parties hereby agrees and consents to be subject to the exclusive
jurisdiction of the United States District Court for the Central District of
California and the exclusive jurisdiction of the courts of the State of
California located in Los Angeles County in any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby. Each
party hereby irrevocably consents to the service of any and all process in any
such suit, action or proceeding by the delivery of such process to such party at
the address and in the manner provided in Section 21 below.
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15. ARBITRATION. Any claim or dispute between the parties shall be resolved
by arbitration in accordance with the Rules of the American Arbitration
Association. The parties agree that arbitration shall take place in Los Angeles,
California, and the parties hereby agree to submit to personal jurisdiction in
California. Judgment upon the award entered by the arbitrator(s) may be entered
in any court having jurisdiction thereof.
16. SEVERABILITY. Should any portion, word, clause, phrase, sentence or
paragraph of this Agreement be declared void or unenforceable, such portion
shall be considered independent of and severable from the remainder, the
validity of which shall remain unaffected.
17. TITLES AND CAPTIONS. Paragraph titles or captions contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provisions hereof.
18. COUNTERPARTS. This Agreement may be executed in counterparts, and when
each party has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original, and, when taken together with the other
signed counterparts, shall constitute one agreement, which shall be binding and
effective as to the parties.
19. FURTHER ASSURANCES. The parties to this Agreement shall promptly
execute and deliver any and all additional documents, instruments, notices, and
other assurances, and shall do any and all other acts and things, reasonably
necessary to carry out and effectuate the terms of this Agreement. Each party
agrees that such party will not do or fail to do anything, directly or
indirectly, that will interfere with or adversely affect any of the rights
provided for herein or that would interfere with the performance of this
Agreement by the other party.
20. NOTICES. All notices or other communications hereunder shall be deemed
to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by facsimile; provided, that the facsimile is promptly followed by
telephone confirmation thereof to the appropriate person at the address set
forth below, or at such other address as may be designated in writing hereafter,
in the same manner, by such person:
If to Seller, to:
Web Service Company, Inc.
0000 Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Marmaro
1900 Avenue of the Stars, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxx & French, LLP
0000 Xxxxxxxxx Xxxxxx, X.X..
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Any such notice shall be deemed delivered (a) on the date delivered if by
personal delivery, (b) on the date upon which receipt is signed or delivery is
made, (c) on the date upon which the return receipt is signed or delivery is
refused, as the case may be, if mailed by registered or certified mail, (d) on
the next succeeding Business Day if sent by national courier service, or (e) on
the date telecommunicated if by telecopier if confirmed by telephone
confirmation.
21. ATTORNEYS FEES. In the event of any action at law or in equity or any
arbitration or other proceeding is brought for the interpretation or enforcement
of this Agreement or in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to attorney's fees, court
costs, deposition costs and fees, lay and expert witness fees and costs, costs
of appeal and all other costs reasonably incurred in such action or proceeding.
14
22. EXPENSES. Each party will bear its own costs and expenses incurred by
it in connection with this Agreement and the transactions contemplated hereby.
23. NO THIRD-PARTY BENEFICIARIES. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any person or entity other than Buyer and Seller, or their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
SELLER: INTERLAND:
Web Service Company, Inc. Interland, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------- ----------------------------------
Xxxx Xxxxxxxxxx Xx., Name: Xxxxxxx X. Xxxxxx
Chief Executive Officer Title: Chief Executive Officer
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EXHIBIT A
SECURITY AND PLEDGE AGREEMENT
17
EXHIBIT B
AMENDED AND RESTATED LINE OF CREDIT NOTE AND LOAN AGREEMENT
18
EXHIBIT C
XXXX OF SALE
