EXHIBIT 2.1
Confidential
AGREEMENT OF PURCHASE AND SALE
DATED AS OF
NOVEMBER 30, 1999
BY AND AMONG
XXXXXXXX.XXX, INC.,
JUMP ACQUISITION LLC,
XXXXXXXX.XXX, INC.
AND
THE STOCKHOLDERS THEREOF
TABLE OF CONTENTS
Page
ARTICLE I TRANSACTIONS................................................... 1
Section 1.1 Purchase and Sale...................................... 1
Section 1.2 Excluded Assets........................................ 3
Section 1.3 Webjump Liabilities.................................... 4
Section 1.4 Consents of Third Parties.............................. 4
ARTICLE II CLOSING....................................................... 4
Section 2.1 Closing................................................ 4
Section 2.2 Consideration.......................................... 4
Section 2.3 Deliveries at Closing.................................. 4
Section 2.4 Earn-Out Payment....................................... 5
Section 2.5 Cash in Lieu of Fractional Shares...................... 7
Section 2.6 Restricted Securities.................................. 7
Section 2.7 Registration Rights.................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
STOCKHOLDERS................................................. 8
Section 3.1 Organization........................................... 8
Section 3.2 Authority.............................................. 8
Section 3.3 Financial Statements................................... 9
Section 3.4 Compliance with Laws; Permits.......................... 9
Section 3.5 Consents; No Violations................................ 10
Section 3.6 Commitments............................................ 11
Section 3.7 Absence of Undisclosed Liabilities..................... 13
Section 3.8 Absence of Certain Changes............................. 13
Section 3.9 Brokers and Finders; Fees.............................. 14
Section 3.10 Real Estate............................................ 14
Section 3.11 Sufficiency of Assets.................................. 15
Section 3.12 Tangible Property...................................... 15
Section 3.13 Litigation and Orders.................................. 15
Section 3.14 Webjump Proprietary Assets............................. 15
Section 3.15 Year 2000 Compliance................................... 17
Section 3.16 Taxes.................................................. 17
Section 3.17 Insurance.............................................. 18
Section 3.18 [Intentionally Omitted]................................ 19
Section 3.19 Personnel Information.................................. 19
Section 3.20 Affiliate Relationships................................ 19
Section 3.21 No Termination of Business Relationship................ 19
Section 3.22 Entire business of Webjump............................. 19
Section 3.23 Performance Data....................................... 19
Section 3.24 Domain Names........................................... 19
Section 3.25 User Agreements........................................ 20
Section 3.26 Privacy Policies....................................... 20
Section 3.27 Liability for User Content............................. 20
Section 3.28 Investment Intent...................................... 20
Section 3.29 Necessary Information.................................. 20
Section 3.30 Stockholders of Seller................................. 20
Section 3.31 Disclosure............................................. 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT...................... 21
Section 4.1 Organization........................................... 21
Section 4.2 Authority.............................................. 21
Section 4.3 Acquisition Sub's Operations........................... 21
Section 4.4 Capitalization; Title to Shares........................ 21
Section 4.5 Parent Common Stock.................................... 22
Section 4.6 Consents; No Violations................................ 22
Section 4.7 SEC Reports; Financial Statements...................... 22
Section 4.8 Absence of Certain Changes............................. 23
Section 4.9 Litigation............................................. 23
Section 4.10 Board Action........................................... 23
Section 4.11 Brokers and Finders.................................... 23
ARTICLE V COVENTANTS..................................................... 23
Section 5.1 No Solicitation........................................ 23
Section 5.2 Interim Operations..................................... 24
Section 5.3 Tax Provisions......................................... 25
Section 5.4 Access and Information................................. 26
Section 5.5 Consents............................................... 26
Section 5.6 Best Efforts........................................... 26
Section 5.7 Notice................................................. 26
Section 5.8 Non-Competition Agreement.............................. 26
Section 5.9 Further Assurances..................................... 27
Section 5.10 Obligations of the Stockholders........................ 27
Section 5.11 Confidentiality........................................ 28
Section 5.12 Termination of Certain Commitments..................... 28
Section 5.13 Transition Period...................................... 28
Section 5.14 Promotion of WebJump Site.............................. 28
Section 5.15 Affiliates............................................. 29
Section 5.16 Contact with WebJump Users............................. 29
Section 5.17 Financial Statements................................... 29
Section 5.18 Employees.............................................. 29
ARTICLE VI CONDITIONS.................................................... 29
Section 6.1 Conditions to Obligations of Parent
and Acquisition Sub................................... 30
Section 6.2 Conditions to Obligations of Seller
and the Stockholders.................................. 31
ARTICLE VII TERMINATION.................................................. 32
Section 7.1 Termination............................................ 32
Section 7.2 Effect of Termination and Abandonment.................. 32
ARTICLE VIII INDEMNIFICATION............................................. 33
Section 8.1 Survival............................................... 33
Section 8.2 Indemnification by Parent.............................. 33
Section 8.3 Indemnification by Seller and the Stockhlders.......... 34
Section 8.4 Escrow................................................. 35
Section 8.5 Indemnification Procedure.............................. 36
ARTICLE IX MISCELLANEOUS................................................. 37
Section 9.1 Public Announcements................................... 37
Section 9.2 Notices................................................ 38
Section 9.3 Certain Definitions; Certain Interpretations........... 39
Section 9.4 Headings............................................... 39
Section 9.5 Severability........................................... 39
Section 9.6 Entire Agreement; No Third Party Beneficiaries......... 39
Section 9.7 Assignment............................................. 40
Section 9.8 Governing Law.......................................... 40
Section 9.9 Transaction Costs...................................... 40
Section 9.10 Amendments............................................. 40
Section 9.11 Counterparts........................................... 40
Section 9.12 Bulk Sales Laws........................................ 40
INDEX OF DEFINED TERMS
DEFINED TERM SECTION
1999 Balance Sheet 3.3
1999 Financial Statements 3.3
Acquired Assets 1.1
Acquisition Sub Preamble
Affiliate 9.3(a)
Affiliates Letter 5.15
Agreement Preamble
Ancillary Documents 9.3(a)
Cap 8.3(b)
Basket 8.3(b)
Cash Amount 2.4(a)(i)
Claim Rights 1.1(vi)
Closing 2.1
Closing Date 2.1
Code Recitals
Commitments 3.6(a)
Communications Rights 1.1(vii)
Competitive Activity 5.8
Competitor 5.8
Confidential Information 5.11
Consent 5.5
Control 9.3(a)
Deductible Amount 2.4(ii)
Disruption 2.4(a)(i)
Earn-Out Payment 2.4(a)(i)
Earn-Out Payment Date 2.4(a)(i)
Election 8.5(a)
Employee 8.3(a)(2)
Employee Agreement 8.3(a)(2)
Encumbrance 3.5(a)
Environmental Laws 3.4(b)(ii)
Environmental Matters 3.4(b)(ii)
Escrow Agent 8.4(a)
Escrow Agreement 8.4(a)
Escrowed Shares 8.4(a)
Exchange Act 4.7(a)
Excluded Assets 1.2
Financial Statements 3.3
Five Day Average 2.4(a)(i)
GAAP 3.3(a)
Governmental Entity 3.5(a)
Hazardous Materials 3.4(b)(ii)
HSR Act 3.5(a)
HSR Rules 3.5(b)
Income Tax; Income Taxes 3.16(b)(iii)
Indemnification Notice 8.5(a)
Indemnified Party 8.5(a)
Indemnifying Party 8.5(a)
Initial Cash Amount 2.4(i)
Initial Earn-Out Payment 2.4(i)
Initial Earn-Out Payment Date 2.4(i)
Initial Five Day Average 2.4(i)
Initial Performance Statistics 2.4(i)
Initial Pre-Earnout Losses 2.4(i)
Internet Disruption 2.4(2)(i)
IP 3.24
Issuable Shares 8.2(b)
knowledge 9.3(a)
knowledge of Seller 9.3(a)
Laws 3.4(a)
Leased Real Property 3.10(b)
Liabilities 3.7
License Agreement 6.1(p)
Licensed Technology 3.14(g)
Litigation 3.13
Losses 8.2(a)
Majority Stockholder Preamble
Make-Whole Payment 2.4(b)
material 9.3(a)
Material Adverse Effect 9.3(a)
Minority Stockholders Preamble
Most Recent Balance Sheet 3.3
Most Recent Financial Statements 3.3
Order 3.5(a)
Owned Real Property 3.10(a)
Parent Preamble
Parent Common Stock Recitals
Parent Indemnified Group 8.3(a)
Parent SEC Reports 4.7(a)
PCBs 3.4(b)(ii)
Performance Data 3.23
Performance Statistics 2.4(a)(i)
Person 9.3(a)
Pre-Earnout Losses 2.4(a)(i)
Proprietary Asset 3.14(g)
Reference Share Price 2.4(c)
Registration Rights Agreement 2.7
Relevant Webpages 2.4(i)
Related Person 3.20(a)
Requesting Party 5.9
Retained Liabilities 1.3
Sale Recitals
Sale Consideration 2.2
SEC 4.7(a)
Second Cash Amount 2.4(ii)
Second Earn-Out Payment 2.4(ii)
Second Earn-Out Payment Date 2.4(ii)
Second Five Day Average 2.4(ii)
Second Performance Statistics 2.4(ii)
Second Pre-Earnout Losses 2.4(ii)
Securities Act Recitals
Seller Preamble
Seller Employee Plan 8.3(a)(2)
Stockholder Indemnified Group 8.2(a)
Stockholders Preamble
Tangible Property 3.12
Tax; Taxes 3.16(b)(i)
Tax Return 3.16(b)(ii)
Termination Date 7.1(b)
Transfer Taxes 5.3(a)
Transition Period 5.13
Transition Services 5.13
Value of the Initial Earn-Out Payment 2.4(ii)
Web1000 Business Recitals
Webjump Assets Recitals
Webjump Proprietary Asset 3.14(g)
Webjump Permit 3.4(a)
AGREEMENT OF PURCHASE AND SALE
This AGREEMENT OF PURCHASE AND SALE (this "Agreement"), dated as
of November __, 1999, among Xxxxxxxx.xxx Inc., a Delaware corporation
("Seller"), Xxxxx Xxxxxxx (the "Majority Stockholder"), Xxxxx Xxxxxxx and
Xxxxx Xxxxxxx (each, a "Minority Stockholder," and together with the
Majority Stockholder, the "Stockholders"), xxxxxxxx.xxx, inc., a Delaware
corporation ("Parent"), and Jump Acquisition LLC, a Delaware limited
liability company and a wholly owned subsidiary of Parent ("Acquisition
Sub").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller is engaged in the business of providing free
webpage hosting services using the Xxxxxxx.xxx network of Websites, which
includes, but it not limited to, all sites hosted by Webjump whether under
the Xxxxxxx.xxx domain, one of the affiliated "Jump" domains, a fully
qualified domain name or otherwise ("Webjump");
WHEREAS, Seller also hosts Web1000 (the "Web1000 Business");
WHEREAS, Acquisition Sub desires to purchase from Seller all of
the assets of Webjump (the "Webjump Assets") and Seller desires to sell to
Acquisition Sub the Webjump Assets, upon the terms and subject to the
conditions hereinafter set forth (the "Sale");
WHEREAS, Parent has received from each Stockholder an executed
Accredited Investor Questionnaire in the form attached hereto as Exhibit
1.1;
WHEREAS, it is intended that, for federal income tax purposes,
the Sale will qualify as a reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations promulgated thereunder; and
WHEREAS, it is intended that all of the shares of common stock,
par value $.001, of Parent (the "Parent Common Stock") to be issued in
connection with the Sale will be issued in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and from the registration and qualification and requirements of any
applicable state securities "blue sky" laws and regulations.
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
ARTICLE I
TRANSACTIONS
Section 1.1 Purchase and Sale. On the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 2.1),
Seller shall sell, assign, transfer, convey and deliver to Acquisition Sub,
and Acquisition Sub shall purchase from Seller, all of Seller's right,
title and interest in and to its business, properties and assets that are
used or held for use in, or relate to, the conduct of Webjump's business as
presently conducted, of whatever kind or nature, real or personal, tangible
or intangible, known or unknown, actual or contingent, and wherever
located, as the same may exist on the Closing Date (as defined in Section
2.1) (collectively, the "Acquired Assets") other than the Excluded Assets
(as defined in Section 1.2). The Acquired Assets include, but are not
limited to, all of Seller's right, title and interest in and to the
following:
(i) all tangible property owned by Seller and used primarily
in the conduct of the business of Webjump, including all machinery,
equipment and computers owned by Seller or Stockholders and necessary
for the conduct of Webjump's business, as set forth on Schedule
1.1(i);
(ii) subject to Section 1.4, only such Commitments (as
defined in Section 3.6(a)) as are set forth on Schedule 1.1(ii), which
will include, without limitation, Seller's right to receive payment
for products sold or services rendered pursuant to, and to receive
goods and services pursuant to, any such Commitments and to assert
claims and take other rightful actions with respect to breaches,
defaults and other violations of such Commitments;
(iii) originals or copies of all (A) sales and promotional
literature and catalogues, (B) books, records, files, log files and
data (including books and records relating to purchasing, accounting,
sales, pricing, engineering, manufacturing, maintenance, repairs,
marketing, banking, Webjump Proprietary Assets (as defined in Section
3.14(g)), customers and suppliers), and (C) recorded knowledge,
engineering reports, surveys, sales data, research material and data,
technical information, computerized storage media, customer service
data and quality control data, in the case of each of clauses (A), (B)
and (C), to the extent pertaining to Webjump, however evidenced
(including, without limitation, in electronic format);
(iv) all Webjump Proprietary Assets, including without
limitation those items listed in Schedule 3.14, all domain names
associated with the Webjump, trademarks and service marks used in
connection with Webjump, all know-how relating to the Webjump and all
goodwill associated therewith, along with all income, royalties,
damages and payments due or payable to Seller at the Closing or
thereafter related to any of the Webjump Proprietary Assets, and all
rights of Seller to xxx and recover for past or future infringements
or misappropriation of any of the Webjump Proprietary Assets;
(v) all claims, deposits, prepayments, prepaid assets,
refunds, causes of action, chooses in action, rights of recovery,
rights of recoupment and setoff rights of any kind (collectively,
"Claim Rights") relating exclusively to Webjump (including, to the
extent Seller is able to transfer such rights, all rights of recovery
under insurance policies of Seller with respect to any casualty
affecting the Acquired Assets);
(vi) all rights to receive and retain mail, correspondence,
e-mail, and other communications (including, without limitation,
communications in digital or electronic format) to the extent
pertaining to Webjump ("Communications Rights");
(vii) all rights to any products or services under research
or development, including, without limitation, all products or
services currently in Beta testing, relating primarily to Webjump;
(viii) to the extent legally assignable, all Webjump Permits
(as defined in Section 3.4(a)), or applications therefor, relating to
Webjump;
(ix) any other assets, whether tangible or intangible, of
Seller primarily related to Webjump and which are of a nature not
customarily reflected in the books and records of a business, such as
assets which have been written off for accounting purposes, but which
are still used primarily by, or are of value primarily to, Webjump;
(x) all properties and assets, whether or not of a type
listed in any of clauses (i) through (ix) of this Section 1.1, that
are primarily related to Webjump and which are located at Webjump's
primary office facility in San Jose, California or elsewhere; and
(xi) all user registration information, historical traffic
data, historical customer information, user files, scripts, programs,
DNS Zone files, backups, customer data and archived web server logs
used in connection with Webjump.
Section 1.2 Excluded Assets. Notwithstanding anything in Section 1.1
to the contrary, specifically excluded from the Acquired Assets are the
following (collectively, the "Excluded Assets"):
(i) all cash and cash equivalents held by Seller (including
for this purpose all collected funds and items in the process of
collection received in Seller's bank accounts);
(ii) all refunds (including by credit) with respect to Taxes
(as defined in Section 3.16(b)(i));
(iii) any assets to the extent relating exclusively to any
of the Excluded Assets, including, without limitation, any books,
records, files, log files or data (including all Tax Returns (as
defined in Section 3.16(b)(ii)) and related work papers), insurance
proceeds, Claim Rights and Communication Rights; provided, however,
that Seller shall furnish to Parent copies of any such information,
books and records to the extent they relate, directly or indirectly,
to Acquired Assets;
(iv) the assets of Seller's 401(k) plan;
(v) all insurance policies of Seller, other than rights
under such insurance policies with respect to any casualty affecting
any of the Acquired Assets;
(vi) all machinery, equipment and computers leased by Seller
or Stockholders and used primarily in the conduct of Webjump's
business;
(vii) any consulting or service contracts between Seller and
any third party.
(viii) the assets of the Infonent Kaiser Health Senior
Advantage post retirement welfare benefits plan;
(ix) all technology licensed to Seller pursuant to the
License Agreement (as defined in Section 6.1(p)); and
(x) any other assets set forth on Schedule 1.2
Section 1.3 Webjump Liabilities. Other than Seller's obligations
arising or to be performed after the Closing under any Commitment listed on
Schedule 1.1(ii), neither Parent nor Acquisition Sub assumes, agrees to
pay, performs, discharges or indemnifies Seller or any of Seller's
Affiliates (as defined in Section 9.3(a)) against, or shall otherwise have
any responsibility for, any and all liabilities or obligations of Seller or
any Stockholder (whether or not, directly or indirectly, relating to or
derived from Webjump) of any kind, character or nature whatsoever, whether
known or unknown, accrued, absolute, contingent, determined, determinable
or otherwise (the "Retained Liabilities").
Section 1.4 Consents of Third Parties. Notwithstanding anything in
this Agreement to the contrary, to the extent the assignment of any
Commitment to be assigned to Acquisition Sub specifically listed on
Schedule 1.1(ii) hereof shall require the consent of any other party, this
Agreement shall not constitute a breach thereof or create rights in others
not desired by Acquisition Sub. If any such consent is not obtained and the
Closing occurs, Seller and the Majority Stockholder shall cooperate with
Acquisition Sub in any reasonable arrangement designed to provide for
Acquisition Sub the benefit of any such Commitment, including enforcement
of any and all rights of Seller or Majority Stockholder against the other
party to any Commitment arising out of the breach or cancellation thereof
by such party or otherwise.
ARTICLE II
CLOSING
Section 2.1 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall be held at the offices of Fried, Frank,
Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 9:00 a.m., New York City time, on the date on which the last to be
satisfied or waived of the conditions set forth in Article VI (other than
those conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction or, where permitted, waiver of those
conditions) shall be satisfied or waived in accordance with this Agreement,
or at such other place, time or date as Parent and Seller may agree (the
"Closing Date").
Section 2.2 Consideration. The aggregate consideration paid by Parent
to Seller for the Acquired Assets shall be (1) one million one hundred four
thousand nine hundred seventy two (1,104,972) shares of Parent Common Stock
and (2) the right to receive the Earnout Payment (as defined in Section
2.4) (such number of shares of Parent Common Stock, the "Sale
Consideration").
Section 2.3 Deliveries at Closing. Subject to and upon the terms and
conditions of this Agreement, at Closing:
(a) Seller shall, in addition to other closing deliveries to
be delivered by the Seller pursuant to this Agreement, deliver to
Acquisition Sub duly executed instruments of transfer and assignment of the
Acquired Assets, substantially in the form attached hereto as Exhibit
2.3(a), sufficient to vest in Acquisition Sub the interests in the Acquired
Assets being conveyed at Closing in accordance with the terms of this
Agreement.
(b) Seller shall deliver to Acquisition Sub the License
Agreement (as defined in Section 6.1(p)), with respect to certain of the
Webjump Proprietary Assets.
(c) Parent shall, in addition to other closing deliveries to
be delivered by Parent pursuant to this Agreement, issue and caused to be
delivered to Seller the Sale Consideration within forty-eight hours of the
Closing.
Section 2.4. Earn-Out Payment. (a) (i) In the event that on or before
November 30, 2000, each of the performance statistics set forth on Schedule
2.4(a)(i) (the "Initial Performance Statistics") for all webpages on
Webjump (the "Relevant Webpages") has been achieved (each as determined in
the manner set forth on such Schedule) for a period of three consecutive
calendar months, Parent shall deliver to Seller, in the manner set forth
below, the Initial Earn-Out Payment. The "Initial Earn-Out Payment" shall
consist of such number of newly issued shares of Parent Common Stock as are
equivalent to the quotient of (1) $6,250,000 (the "Initial Cash Amount")
less the amount of any Losses (as defined in Section 8.2(a)) in excess of
$50,000 claimed by the Parent Indemnified Group (as defined in Section
8.3(a)) prior to the Initial Earn-Out Payment Date (as defined below) (such
Losses, the "Initial Pre-Earnout Losses", and, together with the Second
Pre-Earnout Losses, as defined below, the "Pre-Earnout Losses") divided by
(2) the Reference Share Price (as defined below); provided that in the
event the Initial Earn-Out Payment (calculated without deducting any amount
of Initial Pre-Earnout Losses from the Initial Cash Amount) exceeds
$17,500,000 in value (determined by multiplying the number of shares
issuable in the Initial Earn-Out Payment by the average closing price of
Parent Common Stock as reported on the Nasdaq National Market for the five
trading days immediately preceding the Initial Earn-Out Payment Date, if
any (the "Initial Five Day Average")), the number of shares delivered in
the Initial Earn Out Payment shall be reduced to equal the quotient of
$17,500,000 (less any Initial Pre-Earnout Losses being deducted) divided by
the Five Day Average. The Initial Earn-Out Payment shall be made within 30
days following the date that the Seller has received written verification
(in the manner set forth on Schedule 2.4) that the Initial Performance
Statistics set forth on such Schedule have been achieved (such date, the
"Initial Earn-Out Payment Date").
(ii) In the event that on or before November 30, 2000 (u)
the Initial Performance Statistics were achieved for a period of three
consecutive months, and (v) each of the performance statistics set forth on
Schedule 2.4(a)(ii) (the "Second Performance Statistics" and together with
the Initial Performance Statistics, each "Performance Statistics") for the
Relevant Webpages has been achieved (each as determined in the manner set
forth on such Schedule) for a period of three consecutive calendar months,
Parent shall deliver to Seller, in the manner set forth below, the Second
Earn-Out Payment. The "Second Earn-Out Payment" shall consist of such
number of newly issued shares of Parent Common Stock as are equivalent to
the quotient of (1) $6,250,000 (the "Second Cash Amount") less the
difference between any amount of Second Pre-Earnout Losses (as defined
below) and the Deductible Amount (as defined below) divided by (2) the
Reference Share Price provided that in the event the Second Earn-Out
Payment (calculated without deducting any amount of Pre-Earnout Losses from
the Second Cash Amount) together with the Value of the Initial Earn-Out
Payment in the aggregate exceeds $17,500,000, the number of shares
delivered in the Second Earn Out Payment shall be reduced to equal the
quotient of (y) $17,500,000 (less any Second Pre-Earnout Losses) less the
Value of the Initial Earn-Out Payment divided by (z) the Second Five Day
Average. The Second Earn-Out Payment shall be made within 30 days following
the date that the Seller has received written verification (in the manner
set forth on Schedule 2.4(a)(ii)) that the Performance Statistics set forth
on such Schedule have been achieved (such date, the "Second Earn-Out
Payment Date").
The "Deductible Amount" shall mean (a) zero, if the Initial
Pre-Earnout Losses were $50,000 or greater or (b) the difference between
$50,000 and any Initial Pre-Earnout Losses, if the Initial Pre-Earnout
Losses were less than $50,000.
"Second Pre-Earnout Losses" shall mean any Losses incurred
on or after the Initial Earn-Out Payment Date and prior to the Second
Earn-Out Payment Date.
The "Second Five Day Average" shall mean the average closing
price of Parent Common Stock as reported on the Nasdaq National Market for
the five trading days immediately preceding the Second Earn-Out Payment
Date, if any.
The "Value of the Initial Earn-Out Payment" shall mean (a)
the product of the Initial Cash Amount less any Initial Pre-Earnout Losses
in excess of $50,000 and the reference share price, the amount the Initial
Earn-Out does not exceed $17,500,000 and (b) the product of the Initial
Cash Amount less any Initial Pre-Earnout Losses, in excess of $50,000 and
the Initial Five Day Average in the event that the Initial Earn-out Payment
exceeds $17,500,000 calculated using the Reference Share Price.
(iii) (A) If at any time subsequent to the Transition Period
(as defined in Section 5.13) the connection between Parent, or any of its
Affiliates operating Webjump, and the Internet is disrupted, such
disruption adversely affects Webjump, and such disruption is the result of
circumstances solely within the control of Parent or its Affiliates (a
"Disruption"), then, in order to attribute Performance Statistics to
Webjump for such Disrupted period, Parent shall, at its option (i) for each
day of the Disruption, credit Webjump with the ad impressions served during
the last full day immediately preceding the Disruption; (ii) for each day
of the Disruption, credit Webjump with a number of unique visitors equal to
average daily unique visitors for that month without giving effect to the
Disrupted period; or (iii) deem the Performance Statistics to be satisfied
for the affected month.
(B) If at any time subsequent to the Transition Period
(as defined in Section 5.13) the connection between Parent, or any of its
Affiliates operating Webjump, and the Internet is disrupted, such
disruption adversely affects Webjump, and such disruption is the result of
a general internet outage (an "Internet Disruption"), then, in order to
attribute Performance Statistics to Webjump for such affected period,
Parent shall, at its option, (i) for each day of the Internet Disruption,
credit Webjump with the ad impressions served during the last full day
immediately preceding the Internet Disruption; (ii) for each day of the
Internet Disruption, credit Webjump with a number of unique visitors equal
to average daily unique visitors for that month without giving effect to
the Internet Disrupted period; or (iii) disregard the Internet Disrupted
period for purposes of determining whether the Performance Statistics have
been acheived and deem the days immediately preceding and following the
Internet Disruption period to be consecutive.
In no event shall a Disruption be deemed to occur as a result of any
malfunction of any legacy systems or software assumed from Seller or the
Stockholders.
(iv) In order to ensure that the Performance Statistics
accurately reflect user traffic levels, Parent, Seller and the Majority
Stockholder shall use their commercially reasonable best efforts to
cooperate with one another to detect and deter webmasters' attempts to
disable the serving of 468x60 banner advertisements on web pages hosted by
Webjump; provided that in no event shall any party violate any user
agreement or privacy policy currently applicable to such webmasters.
(b) In the event any Earn-Out Payment is reduced by reason
of any Pre-Earn-Out Losses, and subsequent to such Earn-Out Payment Date it
is determined that the Parent Indemnified Group was not entitled to
indemnification for any portion of such Pre-Earn-Out Losses, Parent shall
deliver to Seller that number of newly issued shares of Parent Common Stock
as are equivalent to the quotient of the amount of such Pre-Earnout Losses
that are reversed divided by the lesser of (i) Reference Share Price, (ii)
the Initial Five Day Average, or (iii) the Second Five Day Average
Reference Share Price (the "Make-Whole Payment");
(c) "Reference Share Price" shall mean the average closing
of the Parent Common Stock as reported on the Nasdaq National Market for
the five trading days immediately preceding the date hereof.
Section 2.5 Cash in Lieu of Fractional Shares. Notwithstanding
anything in this Agreement to the contrary, no certificates or scrip
evidencing fractional shares of Parent Common Stock shall be issued in
connection with the Sale. In lieu of any such fractional shares, Seller
shall be paid an amount in cash (without interest), rounded to the nearest
cent, determined by multiplying (x) the Reference Share Price by (y) the
fractional interest to which Seller would otherwise be entitled.
Section 2.6 Restricted Securities. The shares of Parent Common Stock
issued in connection with the Sale will be "restricted securities" under
the Securities Act and Rule 144 promulgated thereunder and may only be sold
or otherwise transferred pursuant to an effective registration statement
under the Securities Act or an exemption from the registration requirements
of the Securities Act. It is understood that the certificates evidencing
the shares of Parent Common Stock issued in connection with the Sale will
bear one or more of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in
effect with respect to the securities under such Act or an opinion of
counsel satisfactory to Parent that such registration is not required or
unless sold pursuant to Rule 144 of such Act."
(b) Any legend required by applicable state Law.
Section 2.7 Registration Rights. Holders of Parent Common Stock issued
pursuant to this Agreement shall, as of the Closing, be entitled to certain
registration rights with respect to such shares as provided in the
Registration Rights Agreement to be executed and delivered by Parent and
Seller at Closing (the "Registration Rights Agreement"), the form of which
is set forth as Exhibit 2.7 hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE STOCKHOLDERS
Seller and the Majority Stockholder each hereby jointly and
severally represent and warrant and, where indicated, the Minority
Stockholders each severally represent and warrant to Parent and Acquisition
Sub as of the date of this Agreement and as of the Closing Date as follows:
Section 3.1 Organization. (a) Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on
the business of Webjump as it is now being conducted. Seller is duly
qualified and licensed as a foreign corporation to do business, and is in
good standing (and has paid all relevant franchise or analogous taxes), in
each jurisdiction where the character of its assets owned or held under
lease or the nature of its business makes such qualification necessary and
where failure to so qualify or be in good standing would have a Material
Adverse Effect (as defined in Section 9.3) on Webjump.
Section 3.2 Authority. Each of the Seller, the Stockholders and any of
the signatories to any of the Ancillary Documents (as defined in Section
9.3(a)) has the requisite right, power and authority (and, in the case of
each of the Stockholders, legal capacity) to enter into this Agreement and
any Ancillary Documents to which it is a party and to carry out its
obligations hereunder and thereunder. This Agreement has been, and each of
the Ancillary Documents to which it is a party has been or will be, duly
and validly executed and delivered by each of the Seller and the
Stockholders and constitutes, and each of the Ancillary Documents to which
it is a party constitutes, or will upon execution and delivery constitute,
a valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting creditors rights generally or by general principles of
equity. All proceedings or other actions on the part of the Seller and each
Stockholder necessary to authorize this Agreement or any of the Ancillary
Documents to which it is a party and the transactions contemplated hereby
or thereby have been taken.
Section 3.3 Financial Statements. Schedule 3.3 sets forth (1) the
balance sheet of Seller as of the fiscal year ended September 30, 1999 (the
"1999 Balance Sheet"), and the related statement of operations for the
fiscal year then ended (collectively, with the 1999 Balance Sheet, the
"1999 Financial Statements"), (2) the balance sheet of Seller as of October
31, 1999 (the "Most Recent Balance Sheet") and the related statement of
operations for the period beginning October 1, 1999 and ending October 31,
1999 (collectively with the Most Recent Balance Sheet, the "Most Recent
Financial Statements") (the financial statements referred to in clauses (1)
and (2) collectively, the "Financial Statements"). The Financial Statements
(i) are in accordance with the books and records of Seller, and (ii) fairly
present the financial position and results of operations of Seller in all
material respects as of the respective dates and for the respective periods
referred to therein. The books of account and other financial and corporate
records of Seller are complete and correct in all material respects.
Section 3.4 Compliance with Laws; Permits. (a) Except as set forth on
Schedule 3.4(a), Webjump has been in compliance at all times and presently
is in compliance with all applicable foreign and domestic (federal, state
and local) laws, statutes, ordinances, rules, regulations, including,
without limitation, Environmental Laws (as defined in Section 3.4(b)(ii))
(collectively, "Laws") and Orders (as defined in Section 3.5) in all
material respects. Except as set forth on Schedule 3.4(a), neither Seller
nor the Majority Stockholder is aware of, nor have any of them received,
any notice of any failure to comply with any Law with respect to Webjump. A
complete and correct list of each material license, permit, consent,
registration, certificate, franchise, approval, Order or other
authorization of any Governmental Entity (as defined in Section 3.5) (each,
a "Webjump Permit") held by Seller, the Stockholders or any third party
primarily relating to Webjump is set forth on Schedule 3.4(a), and, except
as otherwise may be set forth on such Schedule such list contains all
Webjump Permits required in connection with Webjump's business as presently
conducted. All of the Webjump Permits are valid and in full force and
effect, and the Seller, the Stockholders and any such third party has duly
performed and is in compliance with all of its obligations under such
Webjump Permits. No event (including without limitation the execution,
delivery and performance of this Agreement and the consummation of the
Sale) has occurred with respect to such Webjump Permits which allows, or
after notice or lapse of time or both would allow, the suspension,
limitation, revocation, non-renewal or termination thereof or would result
in any other impairment of the rights in and under any of such Webjump
Permits, and no terminations thereof or proceedings to suspend, limit,
revoke or terminate any Webjump Permit have been threatened.
(b) (i) Neither the Seller nor any Stockholder has received
any notices, directives, violation reports, actions or claims or other
communications from or by any foreign, federal, state or local governmental
agency or any other Person concerning Webjump or any of its predecessors
and any Environmental Laws, including, without limitation, requests to
perform any investigatory or remedial activity, or alleging that, in
connection with Hazardous Materials (as defined in Section 3.4(b)(ii)),
conditions at any real properties used in connection with Webjump have
resulted in or caused or threatened to result in or cause injury or death
to any Person or damage to any property, including, without limitation,
damage to natural resources, and no such notices, directives, violation
reports, actions, claims, assessments or allegations exist; (ii) neither
Seller nor any Stockholder currently leases, operates or owns any real
properties used in connection with Webjump that are listed or, to the
knowledge (as defined in Section 9.3(a)) of any such party, are threatened
to be listed on a "Superfund" list or with respect to which there is any
pending proceeding or investigation under any Environmental Law and, to the
knowledge of any such party, no such proceeding or investigation is
threatened; (iii) throughout the period of operation of any real properties
in connection with Webjump, such properties have been operated and continue
to be operated in material compliance with all Environmental Laws; (iv) to
the knowledge of Seller (as defined in Section 9.3(a)) and the
Stockholders, no underground or above-ground storage tanks either are, or
have been, located at, on, under, about, or within any of such real
properties; (v) there has been no spill, discharge, release, contamination
or cleanup by Seller or the Stockholders of any Hazardous Materials used,
generated, treated, stored, disposed of or handled by Seller or the
Stockholders at such real properties and, to the knowledge of Seller and
the Stockholders, no spill, discharge or release or contamination or
cleanup by Seller and the Stockholders of any Hazardous Materials has
occurred on or to such real properties by any third party; (vi) neither
Seller nor the Stockholders have used, generated, treated, stored, disposed
of, handled, transported or released any Hazardous Material in a manner
which would give rise to any Liability (as defined in Section 3.7) under
any Environmental Laws; (vii) to the knowledge of Seller and the
Stockholders, there are no facts, events, or conditions (including, without
limitation, the generation, treatment, transport, storage, emission,
disposal, release or other placement, deposit or location of any substance)
which interfere with or prevent continued compliance by Seller or the
Stockholders with, or give rise to any present or potential Liability
(including with respect to past activities) under, any Environmental Laws
with respect to Webjump; and (viii) Seller and the Stockholders have
obtained, are in material compliance with, and have made all appropriate
filings for issuance or renewal of, all applicable Webjump Permits which
are required to be obtained under all applicable Environmental Laws,
including, without limitation, those regulating emissions, discharges, or
releases of Hazardous Materials, and all such Webjump Permits are in full
force and effect.
(ii) For the purposes of this Agreement, the term
"Environmental Laws" shall mean, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. xx.xx.
9601 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. xx.xx. 11001 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. xx.xx. 6901 et seq., the Toxic Substances Control
Act, 15 U.S.C. xx.xx. 2601 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. xx.xx. 136 et seq., the Clean Air Act, 42 U.S.C.
xx.xx. 7401 et seq., the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. xx.xx. 1251 et seq., the Safe Drinking Water Act, 42 U.S.C.
xx.xx. 300f et seq., the Occupational Safety and Health Act, 29 U.S.C.
xx.xx. 641, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
xx.xx. 1801, et seq., as any of the above statutes have been or may be
amended from time to time, all rules and regulations promulgated pursuant
to any of the above statutes, and any other applicable foreign, federal,
state or local law, statute, ordinance, rule or regulation governing
Environmental Matters (as defined below), as the same have been or may be
amended from time to time, including any common law cause of action
(including, without limitation, nuisance and trespass causes of action)
providing any right or remedy relating to Environmental Matters, all
indemnity agreements and other contractual obligations (including without
limitation leases, asset purchase agreements and merger agreements)
relating to Environmental Matters, and all applicable judicial and
administrative decisions and Orders relating to Environmental Matters; the
term "Hazardous Materials" shall mean any pollutants, contaminants,
substances, materials, wastes, constituents, compounds, chemicals, natural
or manmade elements or forces (including, without limitation, petroleum or
any by-products or fractions thereof, any form of natural gas, lead,
asbestos or asbestos-containing materials, building construction materials
and debris, polychlorinated biphenyls ("PCBs") or PCB-containing equipment,
radon and other radioactive elements, electromagnetic field and other types
of radiation, sonic forces, infectious, carcinogenic, mutagenic, or
etiologic agents, pesticides, defoliants, explosives, flammables,
corrosives and urea formaldehyde foam insulation) that are regulated by, or
may now or in the future form the basis of Liability under, any
Environmental Laws; and the term "Environmental Matters" shall mean any
matter arising out of, relating to, or resulting from pollution,
contamination, protection of the environment, human health or safety, or
health or safety of employees, and any matter relating to emissions,
discharges, disseminations, releases or threatened releases of Hazardous
Materials into the air (indoor or outdoor), surface water, groundwater,
soil, buildings, facilities, real or personal property or fixtures, or
otherwise arising out of, relating to, or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, release or threatened release of Hazardous Materials.
Section 3.5 Consents; No Violations. (a) Except as set forth on
Schedule 3.5(a), neither the execution, delivery or performance of this
Agreement or the Ancillary Documents by the Seller or the Stockholders, nor
the consummation of the transactions contemplated hereby or thereby will
(i) conflict with, or result in a breach or a violation of, any provision
of the Certificate of Incorporation or the By-laws or the other
organizational documents of the Seller; (ii) constitute, with or without
notice or the passage of time or both, a breach, violation or default,
create any lien, pledge, charge, assessment, security interest, mortgage
claim, option, easement, imperfection of title, tenancy or other legal or
equitable right of others or other encumbrance of any character whatsoever
(including, without limitation, right of first refusal) (each, an
"Encumbrance"), or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration, under (x) any Law, (y) any judgment, order, injunction,
ruling, decree, stipulation or award of any Governmental Entity or private
arbitration panel (each, an "Order") to which Seller or Webjump is subject
or by which the Seller, any Stockholder or any of their respective
properties is bound or (z) any Webjump Permit or Commitment of the Seller
or any Stockholder pertaining to Webjump; (iii) require any consent,
approval or authorization of, notification to, filing with, or exemption or
waiver by, any governmental or regulatory authority (including with respect
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act")), agency, court, commission, body or other governmental
entity (each, a "Governmental Entity") or third party; or (iv) create any
Encumbrance upon any of the assets or properties of Webjump.
(b) Xxxxx Xxxxxxx (x) is the "ultimate parent entity" as
defined in the rules promulgated by the Federal Trade Commission to
implement the HSR Act (the "HSR Rules") and (y) does not meet the $10
million "size of person" test as set forth in the HSR Rules.
Section 3.6 Commitments. (a) Schedule 3.6(a) sets forth a true and
complete list of all contracts, agreements, understandings, arrangements or
commitments of any nature whatsoever, whether written or oral, including
all amendments thereof and supplements thereto ("Commitments") of the
following types which relate to or have been entered into in connection
with the operation of Webjump to which (i) the Seller is a party or (ii)
any Stockholder is a party; or (iii) in any event, by or to which Webjump
or any properties related thereto may be bound or subject:
(i) Commitments for the sale of any real or personal
(tangible or intangible) properties other than in the ordinary course
of business, or for the grant of any option or preferential rights to
purchase any such properties;
(ii) Commitments for the construction, modification or
repair of any building, structure or facility or for the incurrence of
any capital expenditures or for the acquisition of fixed assets;
(iii) Commitments relating to the acquisition by Seller of
any operating business or the capital stock of any other Person that
has not been consummated or that has been consummated but contains
representations, covenants, guaranties, indemnities or other
obligations that remain in effect;
(iv) Commitments relating to any Litigation (as defined in
Section 3.13);
(v) Commitments relating to the lending or borrowing of
money, including loan agreements, guarantees of any debt, obligation
or other Liability of any Person, performance bonds, letters of
credit, bankers acceptances and similar instruments or arrangements,
and Commitments otherwise relating to indebtedness;
(vi) Commitments containing any agreement to indemnify any
Person;
(vii) Commitments containing covenants of the Seller, any
predecessor thereto, any Stockholder or any Employee not to compete,
do business in any line of business or in any geographical area or
with any Person, or to disclose certain information, or covenants of
any other Person not to compete in any line of business or in any
geographical area or disclose information;
(viii) Commitments pursuant to leases, subleases, licenses
or which otherwise grant the right to use any real or personal
property;
(ix) Commitments in respect of licenses or other Commitments
relating to Webjump Proprietary Assets;
(x) Commitments relating to retailer relationships,
e-commerce relationships and advertising arrangements;
(xi) Commitments in respect of any joint venture,
partnership or other similar arrangement (including, without
limitation, any joint development agreement);
(xii) Commitments with any Governmental Entity;
(xiii) Commitments relating to general or special powers of
attorney (whether as grantor or grantee);
(xiv) Commitments with any Employee or consultant relating
to (A) non-disclosure, confidentiality, assignment of inventions,
proprietary rights or non-competition agreements and (B) severance,
bonus or similar arrangements that become operative in connection with
or following the Sale or otherwise;
(xv) Commitments (other than those specified in any of
clauses (i) through (xiv) of this clause (a)) which relate to or
affect the business, operations or any of the assets or properties of
Webjump in any way, except those (A) which are specifically not
required to be scheduled pursuant to the provisions of any of clauses
(i) through (xiv) of this paragraph (a), (B) which are cancelable on
90 days' or less notice without any penalty or other financial
obligation and which involve payments of less than $5,000 in such 90
day period, or (C) which involve annual aggregate payments of $5,000
or less; and, in the case of each of clauses (A), (B) and (C) above,
are not material; and
(xvi) Commitments currently in negotiation of a type which
if entered into would be required to be listed on Schedule 3.6(a) or
to be disclosed on any other Schedule hereto.
(b) True and complete copies of all Commitments listed on
Schedule 3.6(a) have been delivered to Parent. Except as set forth on
Schedule 3.6(b), all of the Commitments referred to in the preceding
paragraph (a) are (i) valid, binding, in full force and effect and
enforceable in accordance with their terms against Seller or the applicable
Stockholders (as the case may be), and, to the knowledge of Seller and the
Stockholders, against the respective counterparties to such Commitments,
and (ii) to the extent such Commitment is to be assigned to Acquisition
Sub, is assignable to Acquisition Sub without the consent of any party
thereto. Complete copies (or, if oral, full written descriptions) of all
Commitments required to be so listed, including all amendments thereto, and
complete copies of all standard form Commitments used by Seller, the
Stockholders or any other party in the conduct of Webjump's business, have
been delivered to Parent. Except as set forth on Schedule 3.6(b), (i) there
is no breach, violation or default and no event which, with notice or lapse
of time or both, would constitute a breach, violation or default, or give
rise to any Encumbrance or right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration, under any Commitment listed or required to be listed on
Schedule 3.6(a) and (ii) none of the Seller or the Stockholders or, to the
knowledge of Seller, any other party to any of the Commitments listed on
Schedule 3.6(a) is in material arrears in respect of the performance or
satisfaction of the terms and conditions on its part to be performed or
satisfied under any of such Commitments and no waiver or indulgence has
been granted by any of the parties thereto.
Section 3.7 Absence of Undisclosed Liabilities. Except as set forth on
Schedule 3.7, Seller does not have any debts, liabilities or obligations
with respect to Webjump (absolute, accrued, contingent or otherwise)
matured or unmatured ("Liabilities") other than (a) Liabilities which are
adequately reflected, or fully accrued or provided for in the Financial
Statements or (b) Liabilities arising since the date of the Most Recent
Financial Statements in the ordinary course of business consistent (in
amount and kind) with past practice which are not, individually or in the
aggregate, material.
Section 3.8 Absence of Certain Changes. Except as set forth on
Schedule 3.8, since the date of the Most Recent Financial Statements: (i)
business of Webjump has been conducted in the ordinary course consistent
with past practice, and (ii) neither Seller nor any Stockholder has, with
respect to Webjump (a) suffered any change, event or development or series
of changes, events or developments which individually or in the aggregate
has had or could reasonably be expected to have a Material Adverse Effect
on Webjump; (b) suffered any damage, destruction or casualty loss to its
properties (whether or not covered by insurance) which individually or in
the aggregate has been or could reasonably be expected to be material; (c)
been the subject of any threatened or commenced investigation by a
Governmental Entity or Litigation; (d) canceled or compromised any debts or
waived or permitted to lapse any claims or rights or sold, transferred or
otherwise disposed of any of its properties or assets; (e) made or
committed to make any capital expenditure or Commitment individually or in
the aggregate in excess of $5,000; (f) made any change in any method of
accounting or accounting practice; (g) increased any salaries, wages or
employee benefits, paid any bonuses, or otherwise increased the
compensation of any of its officers, directors, Employees or consultants,
other than in the ordinary course of business and consistent with past
practice; (h) made any loan to or engaged in any other transaction with any
officer, director, Employee, consultant or shareholder, other than advances
to such persons in the ordinary course of business in connection with
travel and other business-related expenses; or (i) agreed to take any
action referred to in this Section 3.8.
Section 3.9 Brokers and Finders; Fees. Except as set forth in Schedule
3.9 hereto, which fees shall be paid exclusively by Seller, neither Seller
nor any Stockholder has employed any broker or finder or incurred any
Liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby.
Section 3.10 Real Estate. (a) "Owned Real Property" shall mean the
real property owned by any Person that is used in connection with Webjump,
together with all buildings and other structures, facilities or
improvements currently or hereafter located thereon, all fixtures, systems,
equipment and items of personal property of such Person attached or
appurtenant thereto and all easements, licenses, rights and appurtenances
relating to the foregoing. Schedule 3.10(a) sets forth a list of all Owned
Real Property and the Person owning such property. With respect to the
Owned Real Property, (i) the Person set forth on such Schedule as the owner
has good and marketable title in fee simple to the Owned Real Property,
free and clear of all Encumbrances except for (A) Encumbrances disclosed in
Schedule 3.10(a), (B) liens for Taxes not yet due and payable, and (C)
Encumbrances that do not interfere with the use of the Owned Real Property,
as currently used, (ii) there are no outstanding options or rights of first
refusal in favor of any other party to purchase the Owned Real Property or
any portion thereof or interest therein, (iii) there are no leases,
subleases, licenses, options, rights, concessions or other agreements
affecting any portion of the Owned Real Property, (iv) all existing water,
sewer, gas, electricity, telephone and other utilities required for the
construction, use, occupancy, operation and maintenance of the Owned Real
Property are adequate in all material respects for the use, occupancy,
operation and maintenance thereof, as currently conducted or currently
exists, and (v) such Person has all rights of access necessary for ingress
to and egress from the Owned Real Property from or to public streets.
(b) "Leased Real Property" shall mean the real property
leased or subleased by a Person in connection with Webjump, as tenant,
together with, to the extent leased or subleased by such Person, all
buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures, systems, equipment and items of
personal property of such Person attached or appurtenant thereto, and all
easements, licenses, rights and appurtenances relating to the foregoing.
Schedule 3.10(b) sets forth a list of all Leased Real Property and the
Person leasing such property as a tenant. With respect to the Leased Real
Property, (i) the Person listed on such Schedule has good and valid
leasehold estates in the Leased Real Property, free and clear of all
Encumbrances that do not interfere with the use of the Leased Real
Property, as currently used, (ii) all existing water, sewer, gas,
electricity, telephone and other utilities required for the construction,
use, occupancy, operation and maintenance of the Leased Real Property are
adequate in all material respects for the use, occupancy, operation and
maintenance thereof, as currently conducted or currently exists, and (iii)
such Person has all rights of access necessary for ingress to and egress
from the Leased Real Property from or to public streets. Except as set
forth on Schedule 3.10(b), (A) each such lease or sublease is legal, valid,
binding and enforceable and in full force and effect and (B) the execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement will not cause a material breach or require
any third party consent under any such lease or sublease.
(c) Except as set forth on Schedule 3.10(c), (i) there are
not now nor have there ever been any pending or, to the knowledge of Seller
or the Majority Stockholder, threatened condemnation or eminent domain
proceedings or their local equivalent with respect to the Owned Real
Property or the Leased Real Property, (ii) the Owned Real Property, the use
and occupancy thereof and the conduct of Webjump's business thereon and
therein do not violate any deed restrictions, applicable Law consisting of
building codes, zoning, subdivision or other land use or similar Laws the
violation of which would adversely affect the use, value or occupancy of
any such property or the conduct of such business thereon, (iii) there are
not now nor have there ever been any violations by Seller or the
Stockholders of any of the restrictions or Laws described in the foregoing
clause (ii), and (iv) none of the structures or improvements on any of the
Owned Real Property encroaches upon real property of another Person, and no
structure or improvement of another Person encroaches upon any of the Owned
Real Property or Leased Real Property, which would materially interfere
with the use thereof in the ordinary course of business.
Section 3.11 Sufficiency of Assets. The assets, rights, and properties
owned, leased or licensed by Seller with respect to Webjump constitute all
assets, rights, and properties used or held for use in, and necessary for,
the conduct of Webjump's business as presently conducted.
Section 3.12 Tangible Property. Except as set forth on Schedule 3.12,
the buildings, facilities, machinery, equipment (including computer
equipment and servers), furniture, leasehold and other improvements,
fixtures, vehicles, structures, any related items and other tangible
property that are required to properly operate Webjump or are individually
or in the aggregate material to the business, financial condition,
operations, results of operations or prospects of Webjump (the "Tangible
Property") are in good operating condition and repair (normal wear and tear
excepted), free of any material structural or engineering defects, are
being maintained and replaced in accordance with past practice, and are
suitable for their current use. Seller has good and marketable title to, or
a valid leasehold interest in or contractual right to use, all Tangible
Property, free and clear of all Encumbrances, except as disclosed on
Schedule 3.12.
Section 3.13 Litigation and Orders. Except as set forth on Schedule
3.13, there is no claim, demand, notice, action, suit, proceeding,
arbitration, investigation, audit, inquiry or hearing by or before any
Governmental Entity or private arbitration tribunal ("Litigation") pending
or, to the knowledge of Seller or the Majority Stockholder, threatened
against, affecting or involving Webjump, or any of its rights or
properties, or which seeks to prevent or challenge the transactions
contemplated hereby. There are no unsatisfied judgments against or
affecting Webjump or any consent decrees or other Orders to which Webjump
is subject or its assets or properties are bound.
Section 3.14 Webjump Proprietary Assets. (a) Schedule 3.14(a)(i) sets
forth, with respect to each Webjump Proprietary Asset registered with any
Governmental Entity or for which an application has been filed with any
Governmental Entity, (i) a statement identifying such Webjump Proprietary
Asset, and (ii) the names of the jurisdictions covered by the applicable
registration or application. Schedule 3.14(a)(ii) identifies all other
Webjump Proprietary Assets owned by Seller, the Stockholders or any third
party. Schedule 3.14(a)(iii) identifies each Webjump Proprietary Asset
licensed to Seller, the Stockholders or any third party by any Person
(except for any Webjump Proprietary Asset that is licensed to Seller, the
Majority Stockholder or any third party under any third party software
license generally available to the public at a cost of less than $10,000),
and identifies the license agreement under which such Webjump Proprietary
Asset is being licensed to Seller, the Stockholders or any third party.
Except as set forth on Schedule 3.14(a)(iv), Seller has good, valid and
marketable title to all of Webjump Proprietary Assets owned by Seller and
identified in Schedules 3.14(a)(i) and 3.14(a)(ii), free and clear of all
liens and other Encumbrances, and has a valid right to use all Webjump
Proprietary Assets identified in Schedule 3.14(a)(iii). Except as set forth
in Schedule 3.14(a)(v), neither Seller, any Stockholder nor any third party
is obligated to make any payment to any Person for the use of any Webjump
Proprietary Asset. Except as set forth in Schedule 3.14(a)(vi), neither
Seller, any Stockholder nor any third party has developed jointly with any
other Person any Webjump Proprietary Asset with respect to which such other
Person has any rights.
(b) Seller and the Majority Stockholder have taken all
measures and precautions necessary to protect and maintain the
confidentiality and secrecy of all Webjump Proprietary Assets (except
Webjump Proprietary Assets whose value would be unimpaired by public
disclosure) and otherwise to maintain and protect the value of all Webjump
Proprietary Assets. Except as set forth in Schedule 3.14(b), neither
Seller, any Stockholder nor any third party has (other than pursuant to
license agreements identified in Schedule 3.6) disclosed or delivered to
any Person, or permitted the disclosure or delivery to any Person of, (i)
the source code, or any portion or aspect of the source code, of any
Webjump Proprietary Asset, or (ii) the object code, or any portion or
aspect of the object code, of any Webjump Proprietary Asset.
(c) To the knowledge of Seller, none of the Webjump
Proprietary Assets infringes any Proprietary Asset (as defined in Section
3.14(g)) that is subject to patent protection owned or used by any other
Person. None of the Webjump Proprietary Assets infringes any Proprietary
Asset that is not subject to patent protection owned or used by any other
Person. Neither of Seller, nor any Stockholder is infringing,
misappropriating or making any unlawful use of, and neither of such parties
has at any time infringed, misappropriated or made any unlawful use of, or
received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Proprietary Asset owned or used by any other Person in
connection with the Webjump. To the knowledge of Seller and the Majority
Stockholder, no other Person is infringing, misappropriating or making any
unlawful use of, and no Proprietary Asset owned or used by any other Person
infringes or conflicts with, any Webjump Proprietary Asset.
(d) Except as set forth in Schedule 3.14(d), (i) each
Webjump Proprietary Asset conforms in all material respects with any
specification, documentation, performance standard, representation or
statement made or provided with respect thereto by Seller or the Majority
Stockholder; and (ii) to the knowledge of Seller and the Majority
Stockholder, there has not been any claim by any customer or other Person
alleging that any Webjump Proprietary Asset (including each version thereof
that has ever been licensed or otherwise made available by Seller, the
Majority Stockholder or any third party to any Person) does not conform in
all material respects with any written specification, documentation,
performance standard, representation or statement made or provided by
Seller, the Majority Stockholder or such third party, and, to the knowledge
of Seller and the Majority Stockholder, there is no valid legal basis for
any such claim.
(e) Except as set forth in Schedule 3.14(e), none of Seller,
the Stockholders nor any third party has licensed any Webjump Proprietary
Assets to any Person on an exclusive basis.
(f) Except as set forth in Schedule 3.14(f), (i) all
Stockholders and current and former Employees of Seller have executed and
delivered to Seller an agreement (containing no exceptions to or exclusions
from the scope of its coverage) that is substantially identical to the form
of Agreement Regarding Conflicts of Interest, Confidentiality and
Assignment of Intellectual Property, appended to Schedule 3.14, and (ii)
all current and former consultants and independent contractors to Seller
have executed and delivered to Seller a similar agreement (containing no
exceptions to or exclusions from the scope of its coverage).
(g) For the purposes of this Agreement, the term "Business
Proprietary Asset" shall mean any Proprietary Asset owned or licensed by
Seller in connection with Webjump including "Licensed Technology" (as
defined in the License Agreement); and the term "Proprietary Asset" shall
mean any: (a) patent, patent application, trademark (whether registered or
unregistered), trademark application, trade name, fictitious business name,
service xxxx (whether registered or unregistered), service xxxx
application, domain name, copyright (whether registered or unregistered),
copyright application, maskwork, maskwork application, trade secret,
know-how, customer list, franchise, system, computer software, computer
program, invention, design, blueprint, engineering drawing, proprietary
product, technology proprietary right or other intellectual property right
or intangible asset; or (b) the right to use or exploit any of the
foregoing.
Section 3.15 Year 2000 Compliance. Webjump Proprietary Assets will:
(a) accurately process date information before, during and after January 1,
2000, including, but not limited to, accepting date input, providing date
output and performing calculations on dates or portions of dates; (b)
function accurately and without interruption before, during and after
January 1, 2000 without any change in operations associated with the advent
of the new century; (c) respond to two digit year date input in a way that
resolves the ambiguity as to century in a disclosed, defined and
predetermined manner; (d) store and provide output of date information in
ways that are unambiguous as to century; and (e) account for and correctly
identify leap years (including identifying that the year 2000 is recognized
as a leap year). Seller makes no representation or warranty with respect to
year 2000 compliance of any Proprietary Assets licensed from any third
party, except as provided in any written documentation accompanying such
Proprietary Assets or contained in any agreement between Seller and such
third party regarding such Proprietary Assets, nor does Seller make any
representation or warranty with respect to the operation of the Proprietary
Assets or Webjump Proprietary Assets in conjunction with any third party
software or hardware.
Section 3.16 Taxes. (a) (i) All Taxes required to be paid by or with
respect to Seller or any Stockholder have been or will be paid when
required by Law; (ii) the Acquired Assets are not subject to any
Encumbrances arising out of unpaid Taxes which are due and payable; (iii)
no taxing authority in a jurisdiction where Seller does not file Tax
Returns has made a claim, assertion or threat that Seller is or may be
subject to taxation by that jurisdiction; (iv) Schedule 3.16 sets forth a
list of all jurisdictions in which income, franchise or sales Tax Returns,
reports, or other filings were, or were required to be, filed by Seller
with respect to the Acquired Assets for the two most recently completed
taxable years; (v) none of the Acquired Assets is property that is required
to be treated as being owned by any other Person pursuant to the "safe
harbor lease" provisions of section 168(f)(8) of the Internal Revenue Code
of 1954 and none of the Acquired Assets are "tax exempt use property"
within the meaning of section 168(h) of the Code; (vi) Seller has not
agreed and is not required to include in income any adjustment pursuant to
Section 481 or 482 of the Code (or analogous provisions of foreign, state
or local Law) which could affect the Liability for Taxes of Seller for any
period (or portion of a period) after the date hereof, and the IRS (or
other taxing authority) has not proposed, and to the knowledge of Seller
and the Majority Stockholder, is not considering, any such adjustment which
could have such an effect; (vii) Seller has not disposed of property in a
transaction being accounted for under the installment method pursuant to
Section 453 of the Code; (viii) there are no deficiencies which have been
asserted, proposed or threatened against Seller which have not been paid;
(ix) there are no audits with respect to Taxes of Seller which are ongoing
or which have been threatened or proposed; and (x) Seller represents that
it will transfer to Acquisition Sub in the Sale substantially all of the
properties of Seller within the meaning of Section 368(a)(1)(C) of the
Code;
(b) For purposes of this Agreement, (i) "Tax" (and, with
correlative meaning, "Taxes") means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad
valorem, inventory, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalty or addition to tax, imposed by any
Governmental Entity, and includes, without limitation, any taxes of another
Person, including taxes owing under a contract, as transferee or successor,
under Treas. Reg. ss. 1.15026 or analogous provision of state, foreign or
local law or otherwise, (ii) "Tax Return" means any return, report or
similar statement required to be filed with respect to any Tax (including
any attached schedules), including, without limitation, any information
return, claim for refund, amended return or declaration of estimated Tax,
and (iii) "Income Tax" or "Income Taxes" means any federal, state, local or
foreign income, franchise or similar Tax and in each instance any interest,
penalties or additions to Tax attributable to such Tax.
Section 3.17 Insurance. Schedule 3.17 sets forth a list of all
policies or binders of fire, liability, product liability, workers
compensation, vehicular and other insurance held by or on behalf of Seller
or the Majority Stockholder with respect to Webjump, including the amounts
of such insurance and annual premiums with respect thereto. Such policies
and binders are in full force and effect. Seller and the Majority
Stockholder have obtained and maintained in full force and effect insurance
with responsible and reputable insurance companies or associations in such
amounts, on such terms, with such deductibles, and covering such risks, as
is customarily carried by reasonably prudent Persons conducting businesses
or owning assets similar to those of Webjump, and have maintained in full
force and effect liability insurance against claims for personal injury or
death or property damage occurring in connection with the activities of
Webjump, or any properties owned, occupied or controlled by it in such
amount as is customarily carried by reasonably prudent Persons conducting
businesses or owning assets similar to those of Webjump. There is no
default with respect to any provision contained in any such policy or
binder, nor has Seller or the Majority Stockholder failed to give any
notice or present any claim under any such policy or binders in due and
timely fashion. There are no outstanding claims by Seller or the Majority
Stockholder in excess of normal retentions that are not covered under any
such policies or binders and there has not occurred any event that might
reasonably form the basis of any claim in excess of normal retentions that
is not covered against or relating to Seller or the Majority Stockholder
that is not covered by any of such policies or binders. No notice of
cancellation or non-renewal of any such policies or binders has been
received by Seller or the Majority Stockholder.
Section 3.18 [Intentionally Omitted].
Section 3.19 Personnel Information. Schedule 3.19 contains a list of
all individuals employed by Seller or any other Person with respect to
Webjump and all directors and independent contractors providing material
services in connection with the operation of Webjump and their current
salaries.
Section 3.20 Affiliate Relationships. (a) Except as set forth on
Schedule 3.20(a), no (i) officer, director or Stockholder of Seller, (ii)
spouse, former spouse, child, parent, parent of a spouse, sibling or
grandchild of any of the Persons described in clause (i), or (iii) trust,
partnership or corporation in which any of the Persons described in clause
(i) or (ii) has or has had a direct or indirect interest (together with the
Persons described in clauses (i) and (ii), a "Related Person") in: (A) any
entity which furnishes or sells or proposes to furnish or sell services or
products to Webjump, (B) any entity that purchases from or sells or
furnishes to Seller any products or services, or (C) (including, without
limitation, as a party to) any Commitment to which Seller is a party with
respect to Webjump or which otherwise is required to be disclosed in
Schedule 3.6(a).
(b) Set forth in Schedule 3.20(b) is a list of all
arrangements, agreements and contracts with any Related Person with respect
to Webjump.
Section 3.21 No Termination of Business Relationship. None of the
Persons having a material relationship with Webjump has given notice or
other indication of any intention to cancel or otherwise terminate such
relationship and, to the knowledge of Seller and the Stockholders, no event
has occurred or failed to occur (including, without limitation, the
transactions contemplated hereby) which would precipitate the cancellation
or termination of, or entitle any such entity or customer to terminate,
such a business relationship.
Section 3.22 Entire Business of Webjump. Other than those assets
described in Sections 1.2(vi) (leased equipment), and 1.2(ix)(licensed
Webjump Proprietary Assets), all the assets, properties, and rights
necessary for the conduct of Webjump's operations as currently conducted
are being conveyed by Seller to Acquisition Sub hereunder. Without limiting
the generality of the foregoing, the Acquired Assets, together with the
Licensed Technology, include all assets and properties which are currently
used or held for use in connection with the conduct and operation of
Webjump's business, and, as of the Closing Date, the Acquired Assets,
together with the Licensed Technology, will include all of the assets and
properties required to conduct and operate Webjump's business as it is now
being conducted and operated.
Section 3.23 Performance Data. The operating and performance data (the
"Performance Data") set forth on Schedule 3.23 accurately and fairly
presents in all material respects the data generated by NetGravity ad
serving software and to the knowledge of Seller does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading. Seller and
the Majority Stockholder specifically acknowledge that the accuracy in all
material respects of this representation is material to Parent's decision
to enter into the transactions contemplated by this Agreement.
Section 3.24 Domain Names. Xxxxxxx.xxx is not currently on the
Realtime Blackhole List nor, to the knowledge of Seller, any other similar
list of rogue or blacklisted websites, nor are Seller or the Majority
Stockholder aware of any threats to place Xxxxxxx.xxx on such lists, other
than as would not have a Material Adverse Effect on Webjump.
Section 3.25 User Agreements. Schedule 3.25 contains a list of
agreements entered into with users of WebJump, the time periods they were
deployed on the XxxXxxx.xxx network of websites, the pages on which the
user agreements were displayed, and the manner by which the agreement was
formed (e.g., clickthrough). Neither Seller nor the Stockholders are aware
of any reason why any agreement (or any portion thereof) formed with users
of the XxxXxxx.xxx service will not be fully enforced in all respects.
Section 3.26 Privacy Policies. Schedule 3.26 contains a list of
privacy policies promised to users of WebJump, the time period they were
deployed on the XxxXxxx.xxx site, the pages on which the policies were
displayed, and the manner by which the policies were formed as agreements
(e.g., clickthrough). Seller has complied in every respect with such
privacy policies, and Seller and the Majority Stockholder are not aware of
any circumstance by which users or third parties could assert with a valid
legal basis that Seller has not complied with its privacy policies.
Section 3.27 Liability for User Content. Except as disclosed on
Schedule 3.27, Seller has not received any written communications from any
third party indicating that the third party had a valid legal basis to
believe that Seller may be liable for user content hosted in connection
with Webjump that would have a Material Adverse Effect on Webjump taken as
a whole.
Section 3.28 Investment Intent. Each Stockholder severally represents
that they are acquiring the Parent Common Stock as principal for their own
account for investment and not with a view to, or for sale in connection
with, any distribution thereof in contravention of the Securities Act, nor
with any present intention of distributing or selling the same in
contravention of the Securities Act.
Section 3.29 Necessary Information. Each Stockholder believes he or
she has received all the information he or she considers necessary or
appropriate for deciding whether to purchase the Parent Common Stock. Each
Stockholder further represents that he or she has had an opportunity to ask
questions and receive answers from Parent regarding the terms and
conditions of the offering of the Parent Common Stock and the business,
properties, prospects and financial condition of Parent.
Section 3.30 Stockholders of Seller. Schedule 3.30 sets forth a true,
correct and complete list of all holders of Seller's capital stock,
together with the number of shares held by such parties and the percentage
of outstanding shares represented thereby at Closing.
Section 3.31 Disclosure. No statement (including the representations,
warranties and covenants) made by Seller and the Stockholders contained in
this Agreement, the Schedules and Exhibits to this Agreement, the Ancillary
Documents, or the documents, written statements or certificates furnished
or to be furnished to Parent or Acquisition Sub or their representatives
pursuant hereto or in connection with the transactions contemplated hereby
constitutes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to Seller and the Stockholders as of
the date of this Agreement and as of the Closing Date as follows:
Section 4.1 Organization. Parent is a corporation duly organized,
validly existing and in good standing under the Laws of the State of
Delaware and has the requisite corporate power and authority to carry on
its business as it is now being conducted. Acquisition Sub is a Limited
Liability Company duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as it is now being conducted.
Each of Parent and Acquisition Sub is, or in the case of Acquisition Sub,
duly qualified and licensed as a foreign corporation and foreign limited
liability company respectively, to do business, and is in good standing
(and has paid all relevant franchise or analogous taxes), in each
jurisdiction where the character of its assets owned or held under lease or
the nature of its business makes such qualification necessary, except where
the failure to be so qualified and in good standing would not, individually
or in the aggregate, have a material adverse effect on the ability of
Parent and Acquisition Sub to perform their obligations under this
Agreement.
Section 4.2 Authority. Each of Parent and Acquisition Sub has the
requisite right, power and authority to enter into this Agreement and any
Ancillary Documents to which it is a party and to carry out its obligations
hereunder and thereunder. This Agreement has been, and each Ancillary
Document to which Parent and Acquisition Sub are parties will be, duly and
validly executed and delivered by Parent and Acquisition Sub and constitute
or will constitute, as the case may be, a valid and binding obligation of
Parent and Acquisition Sub, enforceable against them in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar Laws affecting
creditors' rights generally or by general principles of equity. All
corporate proceedings or other actions on the part of each of Parent and
Acquisition Sub necessary to authorize this Agreement or any of the
Ancillary Documents to which it is a party and the transactions
contemplated hereby and thereby have been taken.
Section 4.3 Acquisition Sub's Operations. Acquisition Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby
and has not (i) engaged in any business activities, (ii) conducted any
operations other than in connection with the transactions contemplated
hereby or (iii) incurred any Liabilities other than in connection with the
transactions contemplated hereby.
Section 4.4 Capitalization; Title to Shares. (a) The authorized
capital stock of Parent consists of 100,000,000 shares of Parent Common
Stock and 3,000,000 shares of preferred stock, $0.001 per share, of which
26,534,063 shares of Parent Common Stock and no shares of preferred stock
were issued and outstanding as of September 30, 1999. All the issued and
outstanding shares of Parent Common Stock are validly issued, fully paid
and nonassessable. Except pursuant to this Agreement and except as
disclosed in Parent SEC Reports (as defined in Section 4.7(a)) or issued
pursuant to any of Parent's stock option plans, there are no shares of
capital stock of Parent authorized and there are no outstanding
subscriptions, options, warrants, rights, stock-based or stock-related
awards or convertible or exchangeable securities or other agreements to
which Parent is a party of any character relating to, or obligating Parent
to issue, grant, award, transfer or sell, any issued or unissued shares of
Parent's capital stock or other securities of Parent. Except as disclosed
in Parent SEC Reports, there are no voting trusts, proxies or other
agreements or understandings to which Parent is a party with respect to the
voting of capital stock of Parent. Parent has full corporate power and
authority to deliver Parent Common Stock to the Seller pursuant to the Sale
and to transfer to the Seller good and valid title to the Parent Common
Stock.
(b) Parent is the sole member of Acquisition Sub. There are
no options, warrants, or other convertible or exchangeable securities,
subscriptions, rights (including, without limitation, preemptive rights),
related awards or other contracts, agreements or arrangements (or
Commitments with respect to issuance of any of the foregoing) to which
Acquisition Sub is a party or by which Acquisition Sub may be bound of any
character relating, or obligating Acquisition Sub, to issue, grant, award,
transfer or sell any membership interest in Acquisition Sub capital stock.
Section 4.5 Parent Common Stock. The Parent Common Stock to be
received by Seller will be, when delivered, duly authorized, validly
issued, fully paid and nonassessable, and none of the Parent Common Stock
has been issued in violation of any applicable preemptive rights and none
of such Parent Common Stock is subject to any Encumbrance except as may be
provided under applicable federal or state securities laws.
Section 4.6 Consents; No Violations. Except as set forth on Schedule
4.6, neither the execution, delivery or performance of this Agreement or
the Ancillary Documents by Parent or Acquisition Sub nor the consummation
of the transactions contemplated hereby or thereby will (a) conflict with,
or result in a breach or a violation of, any provision of the charter or
bylaws of Parent or Acquisition Sub; (b) constitute, with or without notice
or the passage of time or both, a breach, violation or default, create an
Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or
acceleration, under (i) any Law, (ii) any Order to which Parent or
Acquisition Sub is subject or by which Parent, Acquisition Sub or any of
their respective properties are bound or (iii) any permit or Commitment of
Parent or Acquisition Sub, or to which Parent, Acquisition Sub or any of
their respective properties are subject; (c) require any consent, approval
or authorization of, notification to, filing with, or exemption or waiver
by, any Governmental Entity or third party; or (d) create any Encumbrance
upon any of the assets or properties of Parent or Acquisition Sub; except
any such conflict, breach, violation, default, creation or requirement
described in any of clause (a), (b), (c) or (d) that would not have a
material adverse effect on Parent's or Acquisition Sub's ability to
consummate the transactions contemplated by this Agreement or the Ancillary
Documents.
Section 4.7 SEC Reports; Financial Statements. (a) Parent has filed
all forms, reports and documents (including all Exhibits, Schedules and
Annexes thereto) required to be filed by it with the Securities and
Exchange Commission (the "SEC") since November 12, 1998, including any
amendments or supplements thereto (collectively, as of the date hereof, the
"Parent SEC Reports"). The Parent SEC Reports as of their respective filing
dates (i) were in all material respects in accordance with the requirements
of the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as the case may be, and the rules and regulations
promulgated thereunder, and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) The financial statements, including all related notes
and schedules, contained in the Parent SEC Reports (or incorporated therein
by reference) fairly present in all material respects, the consolidated
financial position of Parent and its consolidated subsidiaries as at the
respective dates thereof and the consolidated results of operations,
retained earnings and cash flows of Parent and its consolidated
subsidiaries for the respective periods indicated, in each case in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except for changes in accounting principles disclosed in the
notes thereto) and the rules and regulations of the SEC, except that
interim financial statements are subject to normal year end adjustments
which are not and are not expected to be, individually or in the aggregate,
material in amount and do not include certain notes which may be required
by GAAP but which are not required by Form 10-Q of the Exchange Act.
Section 4.8 Absence of Certain Changes. Since September 30, 1999,
there has not occurred any event which would have a Material Adverse Effect
on the ability of Parent or Acquisition Sub to perform their obligations
under this Agreement.
Section 4.9 Litigation. Except as disclosed in Parent SEC Reports
filed prior to the date hereof, there is no Litigation pending or, to the
knowledge of Parent, threatened, against Parent or Acquisition Sub or any
of their properties or assets, except for Litigation which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Parent or Acquisition Sub to perform their
obligations under this Agreement.
Section 4.10 Board Action. The Board of Directors of Parent has
approved this Agreement, the Ancillary Documents and the transactions
contemplated hereby and thereby, including the Sale.
Section 4.11 Brokers and Finders. Neither Parent nor Acquisition Sub
has employed any broker or finder or incurred any Liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby.
ARTICLE V
COVENANTS
Section 5.1 No Solicitation. From the date of this Agreement until the
Closing, other than in connection with the transactions contemplated
hereby, neither Seller nor any Stockholder shall solicit, propose or
facilitate (including by way of providing information regarding Webjump to
any Person), directly or indirectly, any inquiries, discussions, offers or
proposals for, continue or enter into negotiations looking toward, or enter
into or consummate any agreement or understanding in connection with any
offer or proposal regarding, any purchase or other acquisition of all or
any portion of Webjump, the business or assets of Webjump (other than the
ordinary course of business sale of inventory or replacement of assets), or
any of the capital stock (whether newly issued or currently outstanding) of
Seller, or any merger, business combination or recapitalization involving
Seller or its business, other than as expressly contemplated or permitted
by this Agreement; and Seller and the Stockholders shall cause the
officers, directors, employees, representatives, agents and Affiliates of
Seller to refrain from engaging in any of the above activities that Seller
is restricted from engaging in. Seller shall promptly notify Parent orally
and in writing of any such inquiries, discussions, offers or proposals
(including, without limitation, the terms and conditions of any such offers
or proposals, any amendments or revisions, and the identity of the Person
making any of the foregoing), and shall keep Parent promptly and fully
informed of the status and terms of any such inquiry, discussion, offer or
proposal.
Section 5.2 Interim Operations. (a) Unless Parent otherwise agrees in
writing and except as otherwise expressly contemplated by this Agreement,
between the date of this Agreement and the Closing, Seller shall, and the
Stockholders shall cause Seller to, (i) conduct Webjump's business only in
the ordinary course and consistent with past practice; (ii) use reasonable
best efforts to preserve and maintain its assets and properties and the
current relationships of Webjump with its respective customers, users,
suppliers, advertisers, distributors, agents, officers and employees and
other Persons with which Webjump has significant business relationships;
(iii) use reasonable best efforts to maintain all of the material assets
owned or used by Webjump in the ordinary course of business consistent with
past practice; (iv) continue capital expenditures substantially in
accordance with past practice; (v) maintain insurance in full force and
effect substantially comparable in amount, scope and coverage to that in
effect on the date of this Agreement; (vi) use reasonable best efforts to
preserve the goodwill and ongoing operations of Webjump; (vii) maintain the
books and records of Seller in the usual, regular and ordinary manner, on a
basis consistent with past practice; (viii) perform and comply in all
material respects with its Commitments; and (ix) comply in all material
respects with applicable Laws.
(b) Except as expressly contemplated by this Agreement or as
provided in Schedule 5.2(b), between the date of this Agreement and the
Closing, Seller will not, and the Stockholders will cause Seller not to,
and where applicable, Majority Stockholder will not, do any of the
following without the prior written consent of Parent:
(i) create any Encumbrance on any properties or assets
(whether tangible or intangible) relating to Webjump;
(ii) (A) sell, assign, transfer, lease or otherwise dispose
of or agree to sell, assign, transfer, lease or otherwise dispose of
any assets of Webjump or (B) cancel any indebtedness owed to Seller
with respect to Webjump;
(iii) merge or consolidate with any Person;
(iv) acquire assets or capital stock of or other equity
interests in any Person;
(v) (A) issue, incur, create, assume or otherwise become
liable for any indebtedness, (B) assume, grant, guarantee or endorse,
or make any other accommodation or arrangement making Seller
responsible for, any Liabilities of any other Person, (C) make any
loans, advances or capital contributions to, or investments in, any
Person or (D) repay any amounts owing under any indebtedness;
(vi) change any method of accounting or accounting practice
used by Seller;
(vii) (A) enter into or adopt or amend any existing
Commitment relating to severance, (B) enter into or adopt or amend any
existing severance plan, (C) enter into or adopt or amend any
Commitment, (D) grant any options or awards pursuant to equity-based
plans, or (E) grant any increases in compensation (except compensation
increases associated with promotions and annual reviews in the
ordinary course of business, which such compensation increases shall
be subject to the prior written approval of Parent, which approval
shall not be unreasonably withheld);
(viii) with respect to Webjump, accelerate or delay the
purchase of supplies or inventory, the shipment or sale of inventory,
the collection of accounts or notes receivable or the payment of
accounts or notes payable or accrued liabilities or expenses or
otherwise operate Webjump, in each case, in a manner that would be
inconsistent with past practice;
(ix) except as set forth in Schedule 5.2(b)(ix), engage in
any transaction with respect to Webjump with any of the Stockholders
or any of their Affiliates;
(x) enter into, modify, terminate, amend, or waive, release
or assign any rights or claims with respect to any Commitment other
than in the ordinary course of business consistent with past practice;
(xi) allow the lapse of any rights of ownership or use by
Seller, any Stockholder or any party to the License Agreement of any
Webjump Proprietary Assets;
(xii) take any action outside of the ordinary course of
business that would create a Tax liability for Seller with respect to
Webjump;
(xiii) take any action that is reasonably likely to result
in the representations and warranties set forth in Article III
becoming false or inaccurate in any material respect as of the Closing
Date; or
(xiv) agree to take any of the actions referred to in this
Section 5.2(b).
Section 5.3 Tax Provisions. (a) All transfer, transfer gains,
documentary, sales, use, stamp, registration and other such federal, state
and local Taxes and fees (including any penalties, interest, additions to
Tax and costs and expenses relating to such Taxes) incurred in connection
with the consummation and performance of the transactions contemplated
hereby (collectively the "Transfer Taxes") shall be borne by the Seller and
Seller shall timely prepare and file all Tax Returns and other filings with
respect thereto.
(b) Any real or personal property Taxes imposed with respect
to the Acquired Assets for the taxable period including the Closing Date,
shall be allocated between Seller and Parent in proportion to the relative
number of days in the taxable period prior to or ending on the Closing
Date, respectively, and the number of days in the taxable period ending
subsequent to the Closing Date.
Section 5.4 Access and Information. (a) From the date hereof until the
Closing, each of Seller and the Stockholders shall, and shall cause the
Employees of Seller to, afford to Parent and its officers, directors,
employees, counsel, accountants, advisors, representatives and agents
access to the Employees, customers, suppliers, properties and offices and
other facilities of Seller, and to Seller's books and records (including,
without limitation, Tax Returns and work papers of Seller's auditors) and
Commitments, and shall furnish Parent and such others all financial,
operating, technical and other data and information which Parent, through
its officers, directors, employees, counsel, accountants, advisors,
representatives or agents, may from time to time reasonably request.
(b) In connection with the continuing operation of Webjump's
business between the date of this Agreement and the Closing, Seller shall
use all reasonable best efforts to consult in good faith on a regular and
frequent basis with representatives of Parent to report material
operational developments and the general status of ongoing operations.
Seller and the Stockholders acknowledge that any such consultation shall
not constitute a waiver by Parent of any rights it may have under this
Agreement and that Parent shall not have any Liability or responsibility
for any actions of Seller or any of its Employees or Affiliates with
respect to matters which are the subject of such consultations.
Section 5.5 Consents. The parties hereto agree to cooperate in
obtaining any consents of any third parties necessary or desirable to any
party in connection with the transactions contemplated hereunder (each, a
"Consent"). The parties hereto agree that in the event such a Consent is
not obtained prior to the Closing and the Closing occurs, the Seller and
the Stockholders will, subsequent to the Closing, cooperate with Parent and
Acquisition Sub in attempting to obtain such Consent.
Section 5.6 Best Efforts. Subject to the terms and conditions in this
Agreement, each of the parties hereto shall use its commercially reasonable
best efforts to take promptly, or cause to be taken, all actions and to do
promptly, or cause to be done, all things necessary, proper or advisable
under applicable Laws to consummate and make effective the transactions
contemplated hereby and to cause the conditions to the Sale to be
satisfied.
Section 5.7 Notice. During the period from the date hereof to the
Closing, each party hereto shall give prompt written notice to the other
parties hereto of (a) the occurrence, or failure to occur, of any event
which occurrence or failure would cause or be likely to cause any
representation or warranty of the party giving notice contained in this
Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing, or (b) any failure of the party giving
notice to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such party hereunder; provided, however, that
the delivery of any notice pursuant to this Section 5.7 shall not limit or
otherwise affect the remedies available hereunder to the parties receiving
notice, or modify in any way any disclosure made in this Agreement or the
Schedules hereto as of the date hereof.
Section 5.8 Non-Competition Agreement. Each of the Stockholders agrees
that (a) for a period of three (3) years immediately following the Closing,
it shall not, without the prior written consent of Parent, engage in any
Competitive Activity (as defined below) anywhere in the world, and (b) for
a period of three years following the Closing it shall not, without the
prior written consent of Parent, directly or indirectly solicit for
employment, including, without limitation, recommending to any subsequent
employer the solicitation for employment of, or hire, any employee of
Parent. The Parties acknowledge and agree that (w) the Stockholders will
receive substantial and valuable benefits under this Agreement in
consideration of the covenants and agreements of the Stockholders set forth
in this Section 5.8, (x) Parent would not have executed and delivered this
Agreement, or agreed to consummate the transactions contemplated hereby
upon the terms and conditions set forth in this Agreement, if the
Stockholders had not entered into the covenants and agreements set forth in
this Section 5.8, (y) the Parties intend that such agreements and covenants
be enforceable and that it would be grossly inequitable if a court or
judicial tribunal were to not enforce such covenants and agreements to the
fullest extent provided herein, and (z) the geographical scope of this
Section 5.8 is necessary because Competitive Activities (as defined below)
can be conducted from virtually any location in the world due to the fact
that the businesses of Seller are conducted on and through the Internet and
because Webjump operates on the Internet, the goodwill associated with
Webjump has spread throughout the world. "Competitive Activity" shall mean
engaging in any of the following activities: (i) serving as a director of
any Competitor (as defined below); (ii) directly or indirectly (x)
controlling any Competitor or (y) owning any equity or debt interests in
any Competitor (other than equity or debt interests which are publicly
traded and do not exceed 5% of the particular class of interests then
outstanding) (it being understood that, if any such interests in any
Competitor are owned by an investment vehicle or other entity in which the
Stockholder owns an equity interest, a portion of the interests in such
Competitor owned by such entity shall be attributed to the Stockholder,
such portion determined by applying the percentage of the equity interest
in such entity owned by the Stockholder to the interests in such Competitor
owned by such entity); (iii) soliciting, diverting, taking away,
appropriating or otherwise interfering as a Competitor with any of the
customers or suppliers of Webjump or any Affiliate controlled by Webjump;
or (iv) employment by (including serving as an officer of), or providing
consulting services to, any Competitor. "Competitor" shall mean any Person
that is engaged in any business that either provides or markets itself as a
provider of free web page hosting services (unless the marketing emphasizes
that the hosting services are targeted towards content described on
Schedule 5.8), without regard to size, or is engaged in owning, operating
or acquiring directly or indirectly (through a corporation, trust,
partnership or other Person) one or more entities engaged in such business,
without regard to size. If any restriction set forth in this Section 5.8 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted to
extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
Section 5.9 Further Assurances. After the Closing, each of the Parties
will, at the request of any other Party (a "Requesting Party"), execute,
acknowledge and deliver to such Requesting Party all such further
assignments, conveyances, endorsements, deeds, powers of attorney, consents
and other documents and take such other action as a Requesting Party may
reasonably request to consummate the transactions contemplated hereby.
Section 5.10 Obligations of the Stockholders. Each of the Stockholders
agrees to cause Seller and each of the parties to any Ancillary Documents
to perform each of its covenants and agreements contained in this Agreement
and the Ancillary Documents to be performed prior to or at Closing, and to
be responsible for any breach by Seller thereof.
Section 5.11 Confidentiality. Each of the Stockholders agrees that no
Stockholder will disclose to any third party or use any Confidential
Information after the date hereof. "Confidential Information" shall mean
any information relating to Webjump which is in the possession of any
Stockholder or its Affiliates on the date hereof or on the Closing Date,
other than information which is or becomes available to the public (other
than as a result of the disclosure by such Stockholder or any of its
Affiliates of such information in contravention of the covenants set forth
in this Section 5.11).
Section 5.12 Termination of Certain Commitments. Seller agrees that
prior to Closing it will, without incurring any penalty or other liability,
terminate the Commitments set forth on Schedule 5.12 [such commitments to
be listed]
Section 5.13 Transition Period. Seller and the Majority Stockholder
agree to cooperate with Parent in order to assist in integrating the
operations of Webjump into the operations of Parent for a reasonable period
of time following Closing (the "Transition Period"). Such cooperation shall
include (a) providing adequate office space without charge for employees
engaged solely in the operation of Webjump for a period of two months
following Closing, and thereafter for the compensation set forth on
Schedule 5.13, (b) providing reasonable office services, including
telephone, Internet access, office equipment and other related services
consistent with past practices in connection with operating Webjump, at
cost, (c) as soon as practicable following Closing, providing hosting of
Webjump without cost on dedicated servers and computer equipment separated
from other of Seller's web properties in substantially the same manner in
which such business has been hosted prior to Closing; provided that
bandwidth costs shall be reimbursed at the cost per megabit per month set
forth on Schedule 5.13, further provided, Seller shall certify to Parent
the average aggregate bandwidth delivered in connection with the operation
of Webjump for any given month during the Transition Period, (d) providing
reasonable access to and services from personnel of the Seller, including
Xxxx Xxxxx and other technical personnel, necessary for the continued
operation and successful integration of Webjump's operations with those of
Parent, (e) providing rapid technical response for operational emergencies,
(f) providing prompt error correction and technical support for any Webjump
Proprietary Assets licensed pursuant to the License Agreement, (g)
providing customer service support and personnel, including Xxxxxx
Xxxxxxxx, to service Webjump in substantially the same manner as has been
provided prior to the date hereof for sixty (60) days free of charge and
thereafter at cost as set forth on Schedule 5.13, such service and support
to be maintained until such time as Parent has established an independent
and fully operational support staff for Webjump, (h) providing training for
customer service personnel hired by Parent to support Webjump, (i)
providing reasonable back up documentation regarding any services listed
above for which Parent is paying, (j) providing electronic data back up for
all data information listed in Section 1.1(x) and delivering such backup
promptly following Closing and regularly following subsequent back-ups and
(k) providing information post-Closing required or desired by Parent
regarding any aspect of Webjump (the "Transition Services"). Parent shall
reimburse the Seller or the Majority Stockholder, as applicable, for the
Transition Services in accordance with the fee schedule set forth on
Schedule 5.13.
Section 5.14 Promotion of WebJump Site. For a period of 12 months
following the Earn-Out Payment Date, the Seller and the Majority
Stockholder hereby agree to provide continuous promotion for Webjump's home
page hosting services and other services of Parent by serving button
advertisements in the frameset surrounding each page view served in the
Xxx0000.xxx network of websites and by serving text advertisements within
the drop down menu accessible from the frameset of pages served on
Xxx0000.xxx., consistent with past practices (including with respect to
frequency and duration) for the promotion of Webjump, subject to the
consent of the Majority Stockholder, which will not be unreasonably
withheld, provided that the size and prominence of the promotional button
shall not exceed the size and prominence of the promotional button for
Webjump as run on the Xxx0000.xxx network or websites, consistent with past
practice. The content design and configuration of such advertisements shall
be as determined by Parent.
Section 5.15 Affiliates. No later than the close of business on the
business day immediately preceding the Closing Date, Seller shall deliver
to Parent a list of names and addresses of those Persons who are, in the
opinion of Seller, as of such date, "affiliates" of Seller within the
meaning of Rule 145 under the Securities Act. Seller shall provide to
Parent such information and documents as Parent shall reasonably request
for purposes of reviewing such list. There shall be added to such list the
names and addresses of any other Person subsequently identified by either
Parent (by written notice to Seller) or Seller as a Person who may be
deemed to be such an affiliate of Seller. To the extent not already
delivered to Parent, Seller shall exercise its reasonable best efforts to
deliver or cause to be delivered to Parent, as promptly as practicable
after the date hereof but in no event later than the Closing, from each
affiliate of Seller identified in the foregoing list (as the same may be
supplemented as aforesaid), a letter substantially in the form attached as
Exhibit 5.16 (the "Affiliates Letter").
Section 5.16 Contact with WebJump Users. Without limiting any other
provision of this Agreement, prior to the Closing, Seller and the
Stockholders shall not (a) email or otherwise contact users of WebJump
regarding this Agreement or advertise or promote any free web hosting
service other than Xxx0000.xxx (and then, only for the purpose of hosting
content as described on Schedule 5.8), (b) disclose any email addresses or
other contact information of users of the XxxXxxx.xxx site to any third
party, (c) otherwise promote on WebJump any free web hosting service other
than Xxx0000.xxx (and then, only for the purpose of hosting content as
described on Schedule 5.8), or (d) use or disclose any other data
associated with users of the XxxXxxx.xxx site for any purpose other than as
necessary for the normal operation of the site consistent with past
practices. Following Closing, with respect to Section 5.16(d), neither
Seller nor any Stockholder shall use or disclose the data for any purpose
without the prior written consent of Parent.
Section 5.17 Financial Statements. Each of Seller and Majority
Stockholder shall use their best efforts to assist Parent in producing any
required financial information relating to Webjump necessary in Parent's
opinion in order to comply with applicable Laws.
Section 5.18 Employees. Following the public annoucement of the Sale,
Parent shall be permitted to contact Seller's customer service employees
for the purpose of solicitation of employment with Parent. Parent shall use
reasonable efforts to coordinate with Seller the transition of any such
employees actually hired by Parent or Acquisition Sub with Seller.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Obligations of Parent and Acquisition Sub.
The obligations of Parent and Acquisition Sub to consummate the Sale and
the other transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver at or prior to Closing of each of the following
conditions:
(a) Representations and Warranties. Each representation and
warranty of Seller and each Stockholder contained in this Agreement shall
be true and correct in all material respects (without giving effect to any
materiality or knowledge (or, in each case, correlative meaning)
qualifications included in such representations and warranties), when made
and on and as at the Closing Date (except to the extent such
representations and warranties shall have been expressly made as of an
earlier date, in which case such representations and warranties shall have
been true and correct as of such earlier date) with the same force and
effect as if made on and as at the Closing.
(b) Agreements and Covenants. Seller and each Stockholder
shall have performed in all material respects each agreement and covenant
required by this Agreement to be performed by them at or before the
Closing.
(c) Certificates. Parent shall have received a certificate
of the Seller and the Stockholders certifying that the conditions set forth
in paragraphs (a) and (b) above have been satisfied.
(d) Consents. All other Consents necessary or desirable in
connection with any item disclosed or required to be disclosed pursuant to
clauses (ii)(z), (iii) or (iv) of Section 3.6(a) shall have been obtained
or given.
(e) No Prohibitions. No statute, rule or regulation or Order
of any court or administrative agency shall be in effect which prohibits
Parent or Acquisition Sub from consummating the transactions contemplated
hereby.
(f) No Material Adverse Change. Since the date of the Most
Recent Financial Statements, Webjump shall not have suffered any Material
Adverse Change.
(g) Blue Sky Approvals. Parent shall have obtained all
necessary blue sky approvals for the issuance of the Parent Common Stock
pursuant to the Sale.
(h) Secretary's Certificate. Seller shall have delivered to
Parent a certificate of its Secretary certifying as to:
(i) a written stockholder approval and resolutions of
Seller's Board of Directors authorizing the execution, delivery and
performance of this Agreement and the execution, delivery and
performance of all other agreements, documents and transactions
contemplated hereby; and
(ii) the incumbency of its officers executing this
Agreement and the Ancillary Documents.
(j) Escrow Agreement. Seller, each of the Stockholders and
the Escrow Agent (as defined in Section 8.4(a)) shall have executed the
Escrow Agreement.
(k) Covenants Not to Xxx. The Majority Stockholder, Xxxx
Xxxxxxx, and Ideaflood shall have executed and delivered the not to xxx as
set forth in Exhibit 6.1(k).
(l) Affiliates Letters. Parent shall have received an
Affiliates Letter from each Person identified as an affiliate of Seller
pursuant to Section 5.15.
(m) FIRPTA Certificate. Seller shall furnish to Parent, on
or before the Closing Date, a statement in the form required by Section
1445 of the Code and the regulations thereunder that Seller is not a
"foreign person" within the meaning of those provisions.
(n) Advertising Representative Agreement. The Majority
Stockholder shall have caused Greenwich Standard Limited d/b/a Web1000 to
execute and deliver the Advertising Representative Agreement in the form
attached hereto as Exhibit 6.1(n).
(o) Key Customer Service Employees. Certain key customer
service representatives employed by Seller shall have agreed to continue
employment with Webjump on terms reasonably satisfactory to Parent.
(p) License Agreement. Seller shall have executed and
delivered the License Agreement in substantially the form attached hereto
as Exhibit 6.1(p) (the "License Agreement").
(q) Termination of Certain Commitments. Seller shall have
terminated the Commitments described in Schedule 5.12.
Section 6.2 Conditions to Obligations of Seller and the Stockholders.
The obligations of Seller and the Stockholders to consummate the Sale and
the other transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver at or prior to Closing of each of the following
conditions:
(a) Representations and Warranties. Each representation and
warranty of Parent and Acquisition Sub contained in this Agreement shall be
true and correct in all material respects (without giving effect to any
materiality or knowledge (or, in each case, correlative meaning)
qualifications included in such representations and warranties) when made
and on and as at the Closing (except to the extent such representations and
warranties shall have been expressly made as of an earlier date, in which
case such representations and warranties shall have been true and correct
as of such earlier date) with the same force and effect as if made on and
as at the Closing.
(b) Agreements and Covenants. Each of Parent and Acquisition
Sub shall have performed in all material respects each of its agreements
and covenants required by this Agreement to be performed by them at or
before the Closing.
(c) Certificates. Seller shall have received a certificate
of Parent certifying that the conditions set forth in paragraphs (a) and
(b) above have been satisfied.
(d) Consents; No Prohibition. No statute, rule or regulation
or Order of any court or administrative agency shall be in effect which
prohibits Seller or the Stockholders from consummating the transactions
contemplated hereby.
(e) Secretary's Certificate. Parent shall have delivered to
Seller a certificate of its secretary certifying as to:
(i) resolutions of its Board of Directors authorizing
the execution, delivery and performance of this Agreement and the
execution, delivery and performance of all other agreements, documents
and transactions contemplated hereby; and
(ii) the incumbency of its officers executing this
Agreement and the Ancillary Documents.
(f) Escrow Agreement. Parent, Acquisition Sub and the Escrow
Agent shall have executed the Escrow Agreement.
(g) Registration Rights Agreement. Parent shall have
executed the Registration Rights Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated at any time
before the Closing (except as otherwise provided) as follows:
(a) by mutual written consent of each of Parent, Seller and
the Majority Stockholder;
(b) by either Seller or Parent, if the Closing shall not
have occurred on or before December 3, 1999 (the "Termination Date").
(c) by either Seller or Parent, if there shall have been a
breach by the other (or any Affiliate of the other) of any of its (x)
representations or warranties contained in this Agreement, which breach
would result in the failure to satisfy one or more of the conditions set
forth in Section 6.1(a) (in the case of a breach by Seller or any of its
Affiliates) or Section 6.2(a) (in the case of a breach by Parent or any of
its Affiliates), or (y) covenants or agreements contained in this
Agreement, which breach would result in the failure to satisfy one or more
of the conditions set forth in Section 6.1(b) (in the case of a breach by
Seller or any of its Affiliates) or Section 6.2(b) (in the case of a breach
by Parent or any of its Affiliates), and in any such case such breach shall
be incapable of being cured or, if capable of being cured, shall not have
been cured after notice thereof shall have been received by the party
hereto alleged to be in breach.
Section 7.2 Effect of Termination and Abandonment. In the event of
termination of this Agreement pursuant to this Article VII, this Agreement
shall become void and of no effect with no Liability on the part of any
Party (or of any of its representatives); provided, however, that no such
termination shall relieve the defaulting or breaching Party (whether or not
it is the terminating Party hereto) from any Liability to any other Party
hereto; and provided, further, that Sections 5.11 (confidentiality), 9.1
(public announcements), 9.2 (notices), 9.8 (governing law) and 9.9
(transaction costs) and this Section 7.2 shall survive the termination of
this Agreement.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival. The representations and warranties of the
parties hereto contained herein or in any Ancillary Document, including,
but not limited to, the License Agreement, shall expire, together with any
associated right of indemnification, on the date that is eighteen (18)
months from the Closing Date, except that the representations and
warranties set forth in Sections 3.4(b) (environmental), 3.14 (Webjump
Proprietary Assets), 3.16 (Taxes), and 3.22 (Entire Business of Webjump)
shall survive until 30 days following the expiration of the applicable
statute of limitations (including any extensions thereof). After the
expiration of such periods, any claim by a party hereto based upon any such
representation or warranty shall be of no further force and effect, except
to the extent a party hereto has asserted a claim in accordance with this
Article VIII for breach of any such representation or warranty prior to the
expiration of such period, in which event any representation or warranty to
which such claim relates shall survive with respect to such claim until
such claim is resolved as provided in this Article VIII. All covenants and
agreements of the parties hereto shall survive the Closing until performed
in accordance with their terms.
Section 8.2 Indemnification by Parent. (a) From and after the Closing
Date, Parent shall indemnify, defend and hold harmless the Stockholders and
their Affiliates (collectively, the "Stockholder Indemnified Group") from
and against all Liabilities, Losses, damages, penalties, claims (including
third-party claims, whether or not meritorious), costs, interest,
judgments, fines, amounts paid in settlement and expenses (including,
without limitation, reasonable attorney's fees, whether incurred in
connection with a claim for indemnification hereunder or in connection with
any third party claim) (collectively, "Losses") incurred or suffered by any
member of the Stockholder Indemnified Group based upon, resulting from or
arising out of (i) the breach of any representation or warranty of Parent
or Acquisition Sub contained in this Agreement or any of the Ancillary
Documents or (ii) the breach of any covenant or agreement of Parent or
Acquisition Sub contained in this Agreement or any of the Ancillary
Documents.
(b) Parent's indemnification obligations pursuant to Section
8.2(a)(i) shall be effective only after the amount of Losses, in the
aggregate, incurred by the Stockholder Indemnified Group exceed $50,000,
and if such aggregate liabilities exceed $50,000, Parent shall be liable
for all such Losses, subject to the following sentence, but only to the
extent such Losses exceed the initial $50,000. The maximum amount
recoverable by the Stockholder Indemnified Group, in the aggregate, under
Section 8.2(a)(i) shall be the aggregate number of shares of Parent Common
Stock issuable in connection with the Sale (the "Issuable Shares"). Parent
shall make indemnification payments pursuant to this Section 8.2 in the
form of Parent Common Stock, and any such shares shall be valued at the
greater of the (i) Reference Share Price, (ii) the Initial Earnout Buyout
Five Day Average and (iii) the Second Five Day Average.
(c) The Seller and each of the Stockholders hereby each
acknowledge and agree that, except (i) as expressly otherwise provided
herein or (ii) to the extent any Losses incurred by such party result from
any fraudulent misrepresentation by Parent (iii) or for claims arising
under applicable securities laws, the Stockholder Indemnified Group's sole
and exclusive monetary remedy with respect to any and all claims based
upon, resulting from or arising out of the breach of this Agreement or any
Ancillary Document by Parent or Acquisition Sub shall be pursuant to the
indemnification provisions of this Article VIII (including, without
limitation, Section 8.1).
Section 8.3 Indemnification by Seller and the Stockholders. (a) (1)
From and after the Closing Date, Seller and the Majority Stockholder,
jointly and severally, and each of the Minority Stockholders, severally on
a pro rata basis based upon the percentage ownership of the capital Stock
of Seller, shall indemnify, defend and hold harmless Parent, Acquisition
Sub, and each of their respective Affiliates, officers, directors,
employees, members, agents, successors, transferees and assigns
(collectively, "Parent Indemnified Group") from and against all Losses
incurred or suffered by any member of Parent Indemnified Group based upon,
resulting from, arising out of or relating to (i) the failure of Seller or
any Stockholder to pay, perform or discharge when due any of the Retained
Liabilities, (ii) the breach of any representation or warranty of any of
the Stockholders or Seller contained in this Agreement or any of the
Ancillary Documents, including, but not limited to, the License Agreement,
or (iii) the breach of any covenant or agreement of any of the Stockholders
or Seller contained in this Agreement or any of the Ancillary Documents.
(2) From and after the Closing Date, Seller and the Majority
Stockholder, jointly and severally, and each of the Minority Stockholders,
severally on a pro rata basis based upon the percentage ownership of the
capital Stock of Seller, shall indemnify, defend and hold harmless the
Parent Indemnified Group from and against all Losses incurred or suffered
by any member of Parent Indemnified Group, in whole or in part, based upon,
resulting from, arising out of or relating to (i) acts or the failure to
act during the period prior to the Closing Date, with respect to any
Employee (whether or not any such Employee becomes employed or is otherwise
retained by the Parent or any of its affiliates at any time following the
Closing Date) or (ii) any Seller Employee Plan or Employee Agreement,
including any such loss based upon, resulting from, arising out of, or
relating to any member of the Parent Indemnified Group being, or being
deemed, a successor, employer, sponsor or the like with respect to any
Employee, Seller Employee Plan or Employee Agreement.
"Employee" shall mean each current, former, or retired
employee, officer, consultant, advisor, independent contractor, agent or
director of Seller or the Majority Stockholder.
"Employee Agreement" shall mean each management, employment,
severance, change of control, consulting, non-compete, confidentiality, or
similar Commitment pursuant to which Seller has or may have any Liability.
"Seller Employee Plan" shall mean each plan, trust, program,
policy, payroll practice, contract, agreement or other arrangement
providing for compensation, severance, termination pay, performance awards,
stock or stock-related awards, fringe benefits or other employee benefits
of any kind, whether formal or informal, funded or unfunded, written or
oral and whether or not legally binding(other than an Employee Agreement)
to which Seller has or may have any Liability, contingent or otherwise with
respect to any Employee including, but not limited to, any obligations
arising out of the transactions contemplated hereby.
(b) Seller and the Stockholders' indemnification obligations
pursuant to Section 8.3(a)(1)(ii) shall be effective only after the amount
of Losses, in the aggregate, incurred by Parent Indemnified Group exceed
$50,000 (the "Basket"), and if such aggregate liabilities exceed the
Basket, Seller and the Stockholders shall be liable for the dollar value of
such liabilities in excess of the Basket, but only to the extent such
Losses exceed the Basket. The Basket shall not be applicable to a breach of
the representations and warranties in Sections 3.4(b) (environmental), 3.14
(Webjump Proprietary Assets), 3.16 (Taxes), and 3.22 (entire business of
Webjump). The maximum amount recoverable, in the aggregate, under Section
8.3(a)(1)(ii) from Seller and any Stockholder (the "Cap") shall be an
amount in cash equal to the sum of (x) the product of the Issuable Shares
issued pursuant to Section 2.3(c) multiplied by the Reference Share Price,
and (y) the product of any Issuable Shares issued pursuant to Section 2.7
and the greater of the Initial Five Day Average, the Second Five Day
Average, and the Reference Share Price; provided, however, that the Cap
shall not be applicable to amounts recoverable as a result of a breach of
the representations and warranties contained in Sections 3.4(b), 3.14,
3.16, and 3.22.
(c) Indemnification for any Losses claimed by the Parent
Indemnified Group shall be made in the following manner:
(1) If a claim for indemnification is made prior to any Earn-Out
Payment Date, then indemnification for such claim shall be made
by set-off against any Earn-Out Payment on the Earn-Out Payment
Date, if any.
(2) If a claim for indemnification is made after the Earn-Out Payment
Date, indemnification may be made by set-off against the Escrowed
Shares (as defined in Section 8.4(a)). In the event the amount of
the claim exceeds the value of the Escrowed Shares, any excess
amount shall be paid in cash.
(3) In the event there is no Earn-Out Payment Date, indemnification
for any claim shall be made solely in cash.
The value of the Escrowed Shares shall be determined by
multiplying the number of Escrowed Shares by the price used in determining
the number of shares issued in connection with any Earn Out Payment.
(e) Parent acknowledges and agrees that, except (i) as
expressly otherwise provided herein or (ii) to the extent any Losses
incurred by Parent Indemnified Group result from any fraudulent
misrepresentation by any Stockholder or Seller, Parent Indemnified Group's
sole and exclusive economic remedy with respect to any and all claims based
upon, resulting from or arising out of the breach of this Agreement or any
Ancillary Document by any Stockholder or Seller shall be pursuant to the
indemnification provisions of this Article VIII.
Section 8.4 Escrow. (a) The number of shares of Parent Common Stock
delivered to Seller at Closing pursuant to Section 2.4 shall be reduced by
an aggregate number of shares equal to twenty percent (20%) of the shares
of Parent Common Stock delivered in respect of any Earn-Out Payment (the
"Escrowed Shares"). The Escrowed Shares shall be held in escrow pursuant to
an Escrow Agreement in the form attached as Exhibit 8.4 hereto (the "Escrow
Agreement"). On the Earn-Out Payment Date, Parent shall deposit such
Escrowed Shares with the escrow agent (the "Escrow Agent") pursuant to the
terms of the Escrow Agreement.
(b) Any claim by a member of Parent Indemnified Group for
indemnification shall be made by giving written notice in accordance with
the terms of Section 8.5. In the event that the Escrow Agent releases
Escrowed Shares in satisfaction of a claim pursuant to the terms of the
Escrow Agreement, the Escrow Agent shall release to the member of Parent
Indemnified Group Escrowed Shares, as applicable, having an aggregate value
(with shares valued at the lower of (i) the Reference Share Price, (ii) the
Initial Five Day Average, and (iii) the Second Five Day Average) equal to
the Losses, if any, ultimately allowed under such claim. Parent shall
thereupon retire (and hold in treasury) or cancel such released shares and,
if the member of Parent Indemnified Group with respect to such Losses is
not Parent, pay or cause to be paid such Losses to such member of Parent
Indemnified Group.
Section 8.5 Indemnification Procedure. (a) The party seeking
indemnification under this Agreement (the "Indemnified Party") shall
promptly notify the party from which indemnification is being sought (the
"Indemnifying Party") (or, if indemnification is sought pursuant to the
Escrow Agreement, Seller and the Escrow Agent) of the facts and
circumstances upon which the Indemnified Party intends to base a claim for
indemnification hereunder ("Indemnification Notice"). Indemnification
Notice shall in all events be considered prompt if given (1) no later than
15 days after the Indemnified Party learns of the facts upon which it will
claim such indemnification or (2) if earlier, in sufficient time to allow
the Indemnifying Party to exercise its rights pursuant to this Article
VIII; provided, however, that the failure to provide such Indemnification
Notice of claims promptly (so long as a notice of claims is given before
the date on which the applicable representation or warranty has ceased to
survive) shall not affect the obligations of the Indemnifying Party
hereunder except to the extent the Indemnifying Party is prejudiced
thereby. The Indemnifying Party shall have the right, at its own cost, to
participate jointly in the defense of any third-party claim, demand,
lawsuit or other proceeding in connection with which the Indemnified Party
has claimed indemnification hereunder, and may elect (the "Election") to
take over the defense of such claim within 10 business days following
Indemnification Notice thereof upon its written unconditional
acknowledgment of its obligation to indemnify the Indemnified Party with
respect to such claim; provided, however, that Parent shall be permitted,
at its option, to require that Seller or the Stockholders shall not take
over the defense of any claim brought by any Person with which Parent or
Acquisition Sub has a material business relationship against any member of
Parent Indemnified Group for which indemnification is available pursuant to
this Article VIII, and upon exercise of such option such member of Parent
Indemnified Group shall defend such claim, subject to the following
conditions: (i) Seller and the Stockholders shall be entitled, in their
discretion and at their expense, to engage counsel and to participate in
any discussions, meetings, negotiations and other communications which may
be held or conducted between such member of Parent Indemnified Group and
such customer or supplier, or their respective counsels, with respect to
such claim; (ii) such member of Parent Indemnified Group shall consult with
Seller before making or communicating to such customer or supplier, or its
counsel, any decisions concerning such member's strategy or position with
respect to the defense of such claim; and (iii) such member of Parent
Indemnified Group shall not settle or otherwise dispose of such claim
without the consent of Seller. If the Indemnifying Party makes an Election,
(x) it shall keep the Indemnified Party informed as to the status of the
applicable matter and shall send promptly copies of all pleadings to the
Indemnified Party, (y) with respect to any issue involved in such claim, it
shall have the sole right, with respect to claims or portions of claims
seeking monetary damages only, to settle or otherwise dispose of such claim
on such terms as it, in its sole discretion, shall deem appropriate;
provided, however, that the consent of the Indemnified Party to the
settlement or disposition shall be required if such settlement or
disposition shall result in or would reasonably be expected to result in
any Liability to, equitable relief against or adverse business effect on
the Indemnified Party, which consent shall not be unreasonably withheld or
delayed, and (z) the Indemnified Party shall have the right to participate
jointly in the defense of such claim, but shall do so at its own cost not
subject to reimbursement. If the Indemnifying Party does not elect to take
over the defense of a third-party claim, the Indemnified Party shall have
the right to contest, compromise or settle such claim in the exercise of
its reasonable judgment.
(b) Notwithstanding any provision of this Article VIII to
the contrary, with respect to any third-party claim or demand that the
Indemnifying Party is defending, the Indemnified Party shall have the right
to retain separate counsel to represent it and the Indemnifying Party shall
pay the fees and expenses of such separate counsel if the Indemnified Party
receives and certifies to the Indemnified Party that it has received advice
of counsel to the effect that there exist sufficient conflicts that make it
reasonably necessary or appropriate for separate counsel to represent the
Indemnified Party and the Indemnifying Party.
(c) The amounts for which an Indemnifying Party shall be
liable under Sections 8.2 and 8.3 of this Agreement shall be net of any
insurance proceeds received by the Indemnified Party (less the costs of
collection of such insurance proceeds) compensating the Indemnified Party
for Losses of the Indemnified Party for which the Indemnifying Party would
otherwise be liable pursuant to this Article VIII.
(d) An Indemnifying Party shall have the right to dispute
the validity of any claim submitted for indemnification, reimbursement or
contribution hereunder.
(e) Any indemnification payment made pursuant to this
Agreement shall be treated by the Parties as an adjustment to the
consideration paid in connection with the Sale.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Public Announcements. No Party shall make any public
statements, including, without limitation, any press releases, with respect
to this Agreement and the transactions contemplated hereby without the
prior written consent of Seller and Parent, except as may be required by
Law.
Section 9.2 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date of receipt and shall be delivered
personally or mailed by registered or certified mail (postage prepaid,
return receipt requested), sent by overnight courier or sent by telecopy,
to the applicable Party at the following addresses or telecopy numbers (or
at such other address or telecopy number for a Party as shall be specified
by like notice):
(a) if to Seller or any Stockholder:
Xxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx & Xxxxx LLP
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) if to Parent or Acquisition Sub:
xxxxxxxx.xxx, inc.
c/o Xxxxxxx Mass, General Counsel
000 Xxxxxxxx, 00xx xxxxx
Xxx Xxxx, X.X. 00000
Telecopy No.: (000) 000-0000
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx Jacob, Esq.
Xxxxxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Section 9.3 Certain Definitions; Certain Interpretations. (a) For
purposes of this Agreement, the following terms shall have the following
meanings:
"Affiliate" of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
Person. Seller, the Majority Stockholder and the Minority Stockholders
shall each be deemed to be an Affiliate of the other.
"Ancillary Documents" shall mean all Commitments,
certificates and other documents delivered simultaneously with this
Agreement or to be delivered at the Closing in connection with the
transactions contemplated hereby including, without limitation, the
Registration Rights Agreement, the License Agreement and the Escrow
Agreement.
"control" (including the terms "controlled by" and "under
common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise.
"knowledge" means the knowledge of the party.
"knowledge of Seller" means the actual knowledge of the
Majority Stockholder, Xxxx Xxxxxxx, Xxxx Xxxxxx or Xxxxx Xxxxxxx.
"material" with respect to a Person or Webjump shall mean
any event, change or effect that is or would be material to the
condition (financial or otherwise), properties, assets, liabilities,
operations, results of operation, prospects or properties of such
Person or the Webjump, as applicable, taken as a whole.
"Material Adverse Effect" with respect to a Person shall
mean any event, change or effect that is or would be materially
adverse to the condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operation, prospects or
properties of such Person or Webjump, as applicable, taken as a whole.
"Person" shall mean an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other
entity or organization, including a Governmental Entity.
(b) Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be understood to be followed by the
words "without limitation" if such words are not already present. The words
"to the knowledge of Seller and the Stockholders" and words of similar
import shall mean the knowledge of any officer of Seller or any
Stockholder.
(c) All pronouns used herein shall be deemed to refer to the
masculine, feminine or neuter gender as the context requires.
Section 9.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any Party. Upon a determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the maximum extent possible.
Section 9.6 Entire Agreement; No Third Party Beneficiaries. This
Agreement, constitutes the entire agreement and supersedes any and all
other prior agreements and undertakings, both written and oral, among the
Parties, or any of them, with respect to the subject matter hereof and,
except as specifically set forth herein, does not and is not intended to,
confer upon any Person other than the Parties any rights or remedies
hereunder.
Section 9.7 Assignment. Except as otherwise set forth herein, this
Agreement shall not be assigned by any Party by operation of law or
otherwise without the express written consent of each of the other Parties.
Section 9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of New York without
regard to the conflicts of laws provisions thereof. Each of the Parties
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and the courts of the
United States of America each located in the Borough of Manhattan in the
City of New York for any Litigation arising out of or relating to this
Agreement or the Sale or any of the other transactions contemplated hereby
(and agrees not to commence any Litigation relating hereto except in these
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in
Section 9.2 shall be effective service of process for any Litigation
brought against it in any such court. Each of the Parties hereby
irrevocably and unconditionally waives any objection to the laying of venue
of any Litigation arising out of this Agreement or the Sale or any of the
other transactions contemplated hereby in the courts of the State of New
York or the courts of the United States of America located in the Borough
of Manhattan in the City of New York and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court
that any such Litigation brought in any such court has been brought in an
inconvenient forum. Each of the parties hereto hereby irrevocably and
unconditionally waives any right it may have to trial by jury in connection
with any Litigation arising out of or relating to this Agreement, the Sale
or any of the other transactions contemplated hereby or thereby.
Section 9.9 Transaction Costs. All fees and expenses of financial,
legal, accounting and other advisors retained by Seller, the Majority
Stockholder, the Minority Stockholders or by Seller on behalf of any
Stockholder and other out-of-pocket costs of such parties incurred in
connection with the transactions contemplated hereby shall be paid by the
Stockholders or the Seller. All fees and expenses of financial, legal,
accounting and other advisors retained by Parent and other out-of-pocket
costs of Parent incurred in connection with the transactions contemplated
hereby shall be paid by Parent.
Section 9.10 Amendments. This Agreement may be amended only pursuant
to a writing executed and delivered by Parent, Seller and the Stockholders,
and only in accordance with the provisions of applicable Law.
Section 9.11 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different Parties in separate counterparts,
each of which when executed shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 9.12 Bulk Sales Laws. Parent hereby waives compliance by
Seller and the Stockholders with the provisions of any so-called bulk sales
or bulk transfer law in any jurisdiction in connection with the
transactions contemplated hereby; provided, that Seller and the Majority
Stockholder shall jointly and severally indemnify the Parent Indemnified
Group against any Losses in connection with or arising out of or relating
to the failure of Seller or the Majority Stockholder to comply with such
laws.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
XXXXXXXX.XXX, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and
Chief Operating Officer
JUMP ACQUISITION LLC
By: its managing member
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and
Chief Operating Officer
XXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx Xxxxxxx
-----------------------------
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-----------------------------
XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-----------------------------
XXXXX XXXXXXX
