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EXHIBIT 2.1
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ASSET ACQUISITION AGREEMENT
by and between
INFOSEEK CORPORATION
as "Seller"
and
BIZWATCH, INC.
as "Purchaser"
Dated as of December 11, 1997
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TABLE OF CONTENTS
PAGE
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I. DEFINITIONS ...................................................................................... 1
II. PURCHASE AND SALE OF ASSETS ...................................................................... 3
Section 2.1. Purchase and Sale of the Assets ............................................. 3
Section 2.2. Assumption of Liabilities ................................................... 3
Section 2.3. Closing ..................................................................... 4
Section 2.4. Purchase Price .............................................................. 4
Section 2.5. Delivery of Purchase Price and Transfer of Assets ........................... 4
Section 2.6. Further Assurances, Etc. .................................................... 5
III. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER ................................................. 6
Section 3.1. Authorization ............................................................... 6
Section 3.2. Opinion of Counsel .......................................................... 6
Section 3.3. Legal Prohibition ........................................................... 6
Section 3.4. Legislation ................................................................. 6
Section 3.5. Consents and Approvals ...................................................... 6
Section 3.6. Closing Matters ............................................................. 6
Section 3.7. Instruments of Transfer, Conveyance and Assignment .......................... 7
Section 3.8. QIP Investment .............................................................. 7
Section 3.9. Additional Agreements ....................................................... 7
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER .................................................... 7
Section 4.1. Authorization ............................................................... 7
Section 4.2. Opinion of Counsel .......................................................... 7
Section 4.3. Legal Prohibition ........................................................... 7
Section 4.4. Additional Agreements ....................................................... 7
V. REPRESENTATIONS AND WARRANTIES OF SELLER ......................................................... 8
Section 5.1. Organization and Qualification/Ownership of Seller .......................... 8
Section 5.2. Due Authorization ........................................................... 8
Section 5.3. No Conflict ................................................................. 9
Section 5.4. Title to Assets ............................................................. 9
Section 5.5. Contracts, Obligations and Commitments ...................................... 9
Section 5.6. Litigation .................................................................. 10
Section 5.7. Acquisition of Infoseek Shares .............................................. 10
Section 5.8. Brokers ..................................................................... 11
VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER ...................................................... 11
Section 6.1. Organization ................................................................ 11
Section 6.2. Due Authorization ........................................................... 11
Section 6.3. No Conflict ................................................................. 11
Section 6.4. Capitalization .............................................................. 12
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VII. POST-CLOSING MATTERS ............................................................................. 12
Section 7.1. Use of Name ................................................................. 12
Section 7.2. Use of Infoseek Business Channel ............................................ 12
Section 7.3. Ultraseek License ........................................................... 13
Section 7.4. Subrogation of Purchaser .................................................... 13
Section 7.5. Sharing of Data ............................................................. 13
VIII. INDEMNIFICATION ................................................................................. 13
Section 8.1. Survival of Representations and Warranties .................................. 13
Section 8.2. Seller's Indemnity .......................................................... 13
Section 8.3. Purchaser's Indemnity ....................................................... 14
Section 8.4. Notice and Defense of Claims ................................................ 15
Section 8.5. Payment/Reimbursement ....................................................... 15
IX. MISCELLANEOUS ..................................................................................... 16
Section 9.1. Expenses .................................................................... 16
Section 9.2. Amendment ................................................................... 16
Section 9.3. Entire Agreement; Assignment ................................................ 16
Section 9.4. Headings .................................................................... 16
Section 9.5. Notices ..................................................................... 16
Section 9.6. Severability ................................................................ 17
Section 9.7. Waiver ...................................................................... 17
Section 9.9. Governing Law ............................................................... 17
Section 9.8. Third Parties ............................................................... 18
Section 9.10. Counterparts ................................................................ 18
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SCHEDULES
Schedule 2.1(a) Tangible Personal Property Owned
Schedule 2.1(b) Assumed Contracts
Schedule 2.1(c) Intellectual Property
Schedule 3.5 Consents and Approvals
Schedule 5.3 Seller's Conflicts
Schedule 5.4 Permitted Liens
Schedule 6.4 Capitalization
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ASSET ACQUISITION AGREEMENT
Asset Acquisition Agreement, dated as of December 11, 1997, by and
between Infoseek Corporation, a California corporation ("Seller"), and BizWatch,
Inc., a Delaware corporation ("Purchaser").
WHEREAS, Purchaser desires to purchase, and Seller desires to sell, the
Assets (as defined herein);
WHEREAS, in order to effectuate the sale and purchase of the Assets,
Seller shall sell, and Purchaser shall purchase, the Assets upon the terms and
conditions hereinafter set forth; and
WHEREAS, the parties hereto intend that the transfer of the Assets
contemplated hereby qualify as a contribution to the capital of Purchaser
pursuant to Section 351 of the Code (as defined herein) and that the liabilities
assumed by Purchaser, as well as the Infoseek Warrant (as defined herein) and
the Cash Consideration (as defined herein) payable in accordance with Section
2.4 hereof, be considered the "receipt of property" pursuant to Section 351(b)
of the Code.
NOW, THEREFORE, in reliance upon the covenants and agreements set forth
herein, the parties hereto agree as follows:
I. DEFINITIONS
The following terms shall have the following respective meanings for all
purposes of this Agreement:
"Agreement" means this Asset Acquisition Agreement, as it may be
amended from time to time.
"Assets" has the meaning set forth in Section 2.1.
"Assumed Contracts" has the meaning set forth in Section 2.1(b).
"Assumed Liabilities" has the meaning set forth in Section 2.2.
"Cash Consideration" has the meaning set forth in Section 2.4(c).
"Closing" means the execution and delivery of this Agreement and
the completion of the acquisition of the Assets pursuant hereto.
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"Closing Date" means December 11, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations promulgated thereunder.
"Common Stock" means the common stock, $.001 par value per share,
of Purchaser.
"Distribution Agreement" means that certain Distribution
Agreement, dated the Closing Date, by and between Seller and Purchaser.
"Governmental Entity" means any court, administrative agency,
commission or other governmental authority or instrumentality.
"Infoseek Shares" has the meaning set forth in Section 2.4(a).
"Infoseek Warrant" has the meaning set forth in Section 2.4(b).
"Intellectual Property" means all industrial and intellectual
property rights listed on Schedule 2.1(c).
"Managing Founders" means Xxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxxx, Xxxx
Xxxxx and Xxxxx XxXxx.
"Person" means an individual, partnership, corporation, limited
liability company, joint venture, unincorporated organization, trust, other
legal entity, cooperative or a governmental entity or agency thereof.
"Prime Rate" has the meaning set forth in Section 8.5.
"QIP" means Quantum Industrial Partners LDC, Geosor Corporation,
Xxxxx Xxxxxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx and Xxxx Xxxx.
"Securities Purchase Agreement" means that certain Securities
Purchase Agreement, dated the Closing Date, among QIP, the Managing Founders and
Purchaser.
"Seller's knowledge" means the actual knowledge of Seller's
officers, directors, employees and consultants other than any officer, employee,
or consultant of Seller's Corporate Information Division, including the Managing
Founders.
"Shareholders Agreement" means that certain Shareholders
Agreement, dated the Closing Date, among Seller, QIP, the Managing Founders and
Purchaser.
"Trademark License Agreement" means that certain Trademark License
Agreement, dated the Closing Date, by and between Seller and Purchaser.
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"Transition Date" means July 23, 1997.
"Ultraseek License Agreement" means that certain Online License
Agreement, dated the Closing Date, by and between Seller and Purchaser.
"Warrant Agreement" means that certain Warrant Agreement, dated
the Closing Date, between Seller and Purchaser.
II. PURCHASE AND SALE OF ASSETS
Section 2.1. Purchase and Sale of the Assets. At the Closing, upon
the terms and subject to the terms and conditions contained herein, Seller shall
sell, transfer, convey, assign and deliver to Purchaser, effective as of the
Closing, and Purchaser shall purchase and acquire from Seller, all of Seller's
right, title and interest in and to certain assets of Seller as set forth on
Schedules 2.1(a), 2.1(b) and 2.1(c) (collectively, the "Assets," except with
respect to the definition of "Assets" in Article V hereof which definition shall
be deemed not to include the Intellectual Property), which Assets shall consist
of the following:
(a) all machinery, equipment, fixtures, supplies, computers,
computer hardware and software, and other tangible personal property of Seller
listed on Schedule 2.1(a), including, without limitation, Seller's rights under
warranties (expressed and implied) relating thereto;
(b) all of the rights and benefits accruing to Seller after the
Closing under those contracts listed on Schedule 2.1(b), except to the extent
that each such contract may not be assigned to Purchaser without the consent of
the other party thereto, which consent has not been obtained (the "Assumed
Contracts"); and
(c) all the Intellectual Property described on Schedule 2.1(c).
Section 2.2. Assumption of Liabilities. At the Closing, upon the
terms and subject to the conditions contained herein, simultaneously with the
transfer, conveyance and assignment to Purchaser of the Assets, Purchaser shall
assume, effective as of the Closing Date, and discharge in accordance with their
terms, only the obligations and liabilities of Seller (a) under the Assumed
Contracts to the extent that they are uncompleted and outstanding at the Closing
Date, (b) any damages or sums that may be or become payable to third parties
resulting from the operation of the Assets after the Closing Date, (c) any
damages or sums that may be or become payable to third parties resulting from
the operation of the Intellectual Property after the Transition Date and (d)
except as otherwise provided herein, any costs, obligations, expenses or
liabilities arising out of the consummation of the transactions contemplated
hereby, including, without limitation, any transfer, sales or other taxes which
become payable by Seller as a result thereof; provided, Purchaser expressly does
not assume any other liabilities including, without limitation, (i) any
liabilities, duties or obligations of Seller
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under any Assumed Contracts which are performable or have arisen or may arise
with respect to provisions of or any breaches of the Assumed Contracts occurring
before the Closing Date, (ii) any damages or other sums that may be or become
payable to third parties resulting from the operation of the Assets, other than
the Intellectual Property, on or before the Closing Date, (iii) any damages or
other sums that may be or become payable to third parties resulting from the
operation of the Intellectual Property on or before the Transition Date, and
(iv) any obligation of Seller for federal, state, local or foreign tax liability
(including interest, penalties or additions to tax relating thereto) arising
from the ownership of the Assets prior to the Closing Date. For convenience of
reference, the foregoing liabilities and obligations of Seller being assumed by
Purchaser are collectively referred to herein as the "Assumed Liabilities."
Section 2.3. Closing. Subject to the provisions of Articles III and IV
hereof, the Closing shall take place on the Closing Date at 10:00 a.m., New York
time, at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 153 East 53rd Street, New
York, New York, or such other time, place or date as Seller and Purchaser may
mutually agree.
Section 2.4. Purchase Price. The aggregate purchase price for the Assets
shall be as follows:
(a) 8,500 shares (the "Infoseek Shares") of Common Stock,
subject to the terms and conditions of the Shareholders Agreement;
(b) a warrant (the "Infoseek Warrant") to purchase up to 10,775
additional shares of Common Stock, subject to the terms and conditions of (i)
the Warrant Agreement and (ii) the Shareholders Agreement; and
(c) $1,000,000 in cash (the "Cash Consideration").
Section 2.5. Delivery of Purchase Price and Transfer of Assets.
(a) On the Closing Date, Purchaser shall deliver to Seller (i) stock
certificate(s) representing the Infoseek Shares in the name(s) and
denomination(s) specified by Seller at least two business days prior to Closing,
(ii) the Infoseek Warrant and (iii) the Cash Consideration by wire transfer of
immediately available federal funds to an account specified by Seller at least
two business days prior to Closing.
(b) At the Closing, Seller shall deliver to Purchaser (i) a
duly executed xxxx of sale covering the Assets being sold hereby, in form and
substance reasonably acceptable to Purchaser and its counsel, (ii) duly executed
title and transfer documents covering any of the Assets for which there exists a
certificate of title, (iii) duly executed assignments covering the Assets in
form and substance reasonably acceptable to Purchaser and its counsel and in
recordable form as appropriate, and (iv) such other instruments of sale,
conveyance, transfer and assignment, in form and substance reasonably
satisfactory to Purchaser and its counsel, as shall be necessary and effective
to transfer and assign to, and vest in, Purchaser all of Seller's right, title
and interest in and to the Assets, but only to the extent of Seller's right,
title or
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interest therein, including, without limitation, (A) good and valid title in and
to all of the Assets owned by Seller, (B) good and valid leasehold interests in
and to all of the Assets leased by Seller as lessee, and (C) all of Seller's
rights under all Assumed Contracts except to the extent that each such Assumed
Contract may not be assigned to Purchaser without the consent of the other party
thereto, which consent has not been obtained, and, simultaneously with such
delivery, all such steps will be taken as may reasonably be required to put
Purchaser in actual possession and operating control of the Assets.
(c) At the Closing, closing costs shall be allocated and
prorations made as follows, such costs to be paid within a commercially
reasonable time after Closing:
(i) Closing Costs. Purchaser shall pay any and all transfer and
sales taxes, if any, and recording charges owed in connection with the
sale and transfer of the Assets and shall pay fifty percent (50%) of
Seller's reasonable legal fees in connection with this Agreement and the
transactions contemplated hereby, provided that the amount to be paid by
Purchaser shall not exceed $25,000; and
(ii) Taxes. Personal property taxes and general and special
assessments shall be prorated through the Closing Date on the basis of
the fiscal year for such taxes and assessments. If the Closing Date shall
occur before the personal property tax rate for such fiscal year is
fixed the apportionment of taxes shall be made on the basis of the taxes
assessed for the preceding fiscal year. After the personal property taxes
are finally fixed for the fiscal year in which the Closing Date occurs,
Seller and Purchaser shall make a recalculation of the apportionment of
such taxes, and Seller or Purchaser, as the case may be, shall make an
appropriate payment to the other based on such recalculation.
Section 2.6. Further Assurances Etc. Seller shall, at any time and from
time to time after the Closing, upon the request of Purchaser and at the expense
of Purchaser, do, execute, acknowledge and deliver, and cause to be done,
executed, acknowledged or delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney or assurances as may be reasonably
required for the better transferring, assigning, conveying, granting, assuring
and confirming to Purchaser the Assets, or to vest in Purchaser good and
marketable title to the Assets; provided, however, that Seller shall not be
obligated to take any action pursuant to this Agreement which attempts to confer
any greater rights in the Assets to Purchaser after the Closing than the rights
held by Seller in the Assets prior to the Closing. Each of the parties hereto
will cooperate with the other and execute and deliver to the other such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by the other party hereto as necessary to carry out,
evidence and confirm the intended purposes of this Agreement.
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III. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser under this Agreement to consummate the
purchase of the Assets at the Closing shall be subject to the satisfaction, at
or prior to the Closing, of all of the following conditions, to the satisfaction
of Purchaser (any of which may be waived in writing in whole or in part by
Purchaser):
Section 3.1 Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by Seller and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken, and Seller shall have full power and right to sell and transfer
the Assets as contemplated hereby.
Section 3.2. Opinion of Counsel. Purchaser shall receive from Wilson,
Sonsini, Xxxxxxxx & Xxxxxx, counsel to Seller, a written opinion, dated the
Closing Date, in a form reasonably satisfactory to Purchaser's counsel.
Section 3.3. Legal Prohibition. On the Closing Date, no injunction or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action or proceeding shall have been instituted and remain
pending or threatened before a Governmental Entity to restrain or prohibit the
transactions contemplated by this Agreement.
Section 3.4. Legislation. No federal, state or local statute, rule or
regulation shall have been enacted the effect of which would be to prohibit,
restrict, impair or delay in any material respect the consummation of the
transactions contemplated hereby or any of the conditions to the consummation of
such transactions or restrict or impair in any material respect the ability of
Purchaser to own or conduct the Business as currently conducted.
Section 3.5. Consents and Approvals. Schedule 3.5 sets forth all
authorizations, consents, waivers, approvals, orders, registrations,
qualifications, designations, declarations, filings or other action required
with or from any federal, state or local Governmental Entity or third party
(including, without limitation, all parties to each of the Assumed Contracts, if
necessary) which have been obtained in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby and which shall be reasonably satisfactory to Purchaser and
its counsel, and copies thereof shall have been delivered to Purchaser no later
than three (3) days prior to the Closing.
Section 3.6. Closing Matters. All proceedings to be taken by Seller in
connection with the consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to Purchaser and its counsel.
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Section 3.7. Instruments of Transfer Conveyance and Assignment.
Purchaser shall receive a duly executed xxxx of sale and such other instruments
of transfer, conveyance and assignment as are reasonably required to effect the
sale, transfer, conveyance and assignment of the Assets to Purchaser in
accordance herewith, including an appropriately prepared and executed UCC-3
Termination Statement.
Section 3.8. QIP Investment. On the Closing Date, concurrently
with the Closing, Puchaser, the Managing Founders and QIP shall consummate the
transactions contemplated by the Securities Purchase Agreement. Seller agrees to
use its reasonable best efforts to consummate such transaction.
Section 3.9. Additional Agreements. Purchaser shall receive the
following agreements duly executed on behalf of Seller (i) the Ultraseek License
Agreement and (ii) the Warrant Agreement, (iii) the Trademark License Agreement
and (iv) the Distribution Agreement.
IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligation of Seller under this Agreement to consummate the sale of
the Assets at the Closing shall be subject to the satisfaction, at or prior to
the Closing, of all of the following conditions, to the reasonable satisfaction
of Seller:
Section 4.1. Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement by Purchaser and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken, and Purchaser shall have full power and right to acquire the
Assets and assume the Assumed Liabilities as contemplated hereby.
Section 4.2. Opinion of Counsel. Seller shall receive from Fulbright &
Xxxxxxxx L.L.P., counsel to Purchaser, a written opinion, dated the Closing
Date, in a form reasonably satisfactory to Seller's counsel.
Section 4.3. Legal Prohibition. On the Closing Date, no injunction or
order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions
unlawful and no action or proceeding shall have been instituted and remain
pending before a Governmental Entity to restrain or prohibit the transactions
contemplated by this Agreement.
Section 4.4. Additional Agreements. Seller shall receive the following
agreements duly executed on behalf of Purchaser (i) the Ultraseek License
Agreement, (ii) the Warrant Agreement, (iii) the Trademark License Agreement and
(iv) the Distribution Agreement.
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V. REPRESENTATIONS AND WARRANTIES OF SELLER
Notwithstanding anything to the contrary contained in this Agreement,
Seller makes no representations or warranties whatsoever with respect to any of
the Intellectual Property, except and only to the extent set forth in Sections
5.2(b), 5.4 and 5.6 below and in Schedule 2.1(c) attached hereto. Seller hereby
represents and warrants to Purchaser that:
Section 5.1. Organization and Qualification/Ownership of Seller. (i)
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of California and has all requisite corporate power
and authority and all material licenses and permits necessary to own, lease and
operate the Assets. Seller is qualified as a foreign corporation in each
jurisdiction required to own, lease or operate the Assets. Seller has not
knowingly taken any action, or failed to take any action, which action or
failure will preclude or prevent Purchaser from using the Assets substantially
in the same manner in which Seller has heretofore conducted the same.
Section 5.2. Due Authorization. (a) Seller has all requisite corporate
power and authority to execute and deliver this Agreement and all other
agreements contemplated hereby to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Seller of this
Agreement and the other documents contemplated hereby, the performance by Seller
of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly and validly executed by Seller, and this Agreement and
each other agreement contemplated hereby to which Seller is a party are, upon
execution and delivery hereof and thereof by Seller, legal, valid and binding
obligations of Seller, enforceable against it in accordance with the terms
hereof and thereof (except as the enforceability hereof and thereof may be
limited by any applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at law).
(b) Seller has all requisite corporate power and authority to
sell, convey, assign, transfer and deliver the Assets and the Intellectual
Property to Purchaser (subject to any consents or waivers of third parties
required in connection with such sale, conveyance, assignment, transfer and
delivery of the Assets, the Intellectual Property or any part thereof). The
instruments of transfer, conveyance and assignment executed and delivered by
Seller to Purchaser at the Closing are, upon execution and delivery thereof,
valid and binding obligations of Seller, enforceable in accordance with their
respective terms, sufficient for purposes of recordation and filing where
permitted by law, sufficient to transfer, convey and assign to Purchaser all
right, title and interest of Seller in and to the Assets to the extent set forth
herein.
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Section 5.3. No Conflict. Except as set forth in Schedule 5.3, neither
the execution and delivery by Seller of this Agreement or any of the other
documents contemplated hereby, nor the consummation by Seller of the
transactions contemplated hereby or thereby, nor compliance by Seller with any
of the provisions hereof or thereof, will: (a) conflict with, result in a breach
or violation of or constitute (or with notice or lapse of time or both
constitute) a default under, in any material respect, (i) the Articles of
Incorporation or Bylaws of Seller, (ii) to the knowledge of Seller, any law,
statute, rule, regulation, order, judgment, decree, writ or injunction
applicable to any of the Assets, or (iii) to the knowledge of Seller, any of the
terms, conditions or provisions of any note, bond, lease, mortgage, indenture,
license or other instrument, contract or agreement to which Seller is a party or
by which Seller (or any of the Assets) is subject or bound; (b) result in the
creation of, or give any party the right to create, any lien, charge, option,
security interest, encumbrance or other claim upon any of the Assets; (c)
terminate or modify, or give any third party the right to terminate or modify,
the provisions or terms of any Assumed Contract; (d) require Seller or, to the
knowledge of Seller, Purchaser to obtain any authorization, consent, approval or
waiver from, or to notify or to make any filing with, any Governmental Entity or
to obtain the approval or consent of any other Person; or (e) to the knowledge
of Seller, result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, qualification, authorization or approval
applicable to the Assets.
Section 5.4. Title to Assets. Seller has good and valid title to, or
valid and subsisting leasehold interests in or valid licenses to use, all of the
Assets, free and clear of all mortgages, liens, pledges, security interests,
charges, claims, restrictions and other encumbrances and defects of title of any
nature whatsoever, except for (i) liens for current personal property taxes not
yet due and payable and (ii) liens disclosed on Schedule 5.4 hereto. To the
knowledge of Seller, none of the Intellectual Property is subject to any liens,
pledges, security interests, charges, claims (including claims of infringement),
restrictions and other encumbrances and defects of title of any nature.
Schedules 2.1(a) and 2.1(b) identify those Assets which are owned by Seller and
those Assets which are leased or licensed by Seller. None of the Assets are
owned, leased, licensed or used by any Person other than Seller. To Seller's
knowledge, Seller has not leased, licensed, mortgaged, pledged, created any
security interests in or encumbrances on, or otherwise transferred any rights to
own or use any of the Intellectual Property (each, an "Encumbrance") other than
to (x) Purchaser, (y) the Managing Founders and (z) Wayfarer Communications,
Inc.; provided, however, that Seller shall not be responsible for, or deemed to
have knowledge of, (a) any actions creating an Encumbrance by (i) Purchaser,
(ii) the Managing Founders, (iii) any other employees or contractors of Seller's
Corporate Information Division or (iv) Wayfarer Communications, Inc. or any
third party who gained access to the Intellectual Property at Wayfarer
Communications, Inc., or (b) any other Encumbrance known by the Managing
Founders to exist prior to the Closing.
Section 5.5. Contracts, Obligations and Commitments. For purposes
hereof, each contract, agreement, arrangement, plan, lease or similar instrument
listed on Schedule 2.1(b) is referred to herein as an "Assumed Contract" and
collectively referred
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to herein as the "Assumed Contracts." Except as set forth on Schedule 2.1(b),
each Assumed Contract is a valid and binding obligation of Seller and, to
Seller's knowledge, the other parties thereto, enforceable in accordance with
its terms (except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity, regardless of whether such enforceability is
considered in equity or at law), and is in full force and effect. Neither Seller
nor, to Seller's knowledge, any other party thereto has breached any material
provision of, or is in default in any material respect under the terms of, any
of the Assumed Contracts. To Seller's knowledge, no condition exists which, with
the passage of time, the giving of notice, or both, would result in a default
under the terms of any of the Assumed Contracts. Seller has heretofore made
available to Purchaser copies of all Assumed Contracts. Except as set forth on
Schedule 2.1(b), each Assumed Contract may be assigned to Purchaser without the
consent of the other party thereto.
Section 5.6. Litigation. Neither Seller, nor any current director,
manager, officer or employee of Seller, is a party to any pending or threatened
claim, action, suit, proceeding or investigation, at law or in equity or
otherwise in, before or by any court or governmental board, commission, agency,
department or office, or private arbitration tribunal related to the Assets or
the Intellectual Property, nor does Seller know of any basis therefor, (i)
arising in connection with the Assets or the Intellectual Property prior to the
Transition Date, (ii) which arises out of any contract, agreement, letter of
intent or arrangement alleged to have been entered into or agreed to by Seller
and which conflicts with this Agreement or the transactions contemplated hereby,
or gives rise to a claim or right of any kind of any person as a result of the
execution of this Agreement or the consummation of the transactions contemplated
hereby, (iii) which, if successful, could adversely affect the right of
Purchaser after the Closing Date to own any of the Assets or the Intellectual
Property, or (iv) to suspend, revoke, annul, limit, terminate, amend or modify
any permit, license, consent, qualification, authorization or approval
applicable to the Assets or the Intellectual Property. Seller is not a party or
subject to any order, ruling, judgment, decree or stipulation which affects the
Assets or the Intellectual Property, or which would prevent the transactions
contemplated by this Agreement. To Seller's knowledge, no facts exist, and no
investigation has been instituted by any Governmental Entity, which might result
in any such action or proceeding.
Section 5.7. Acquisition of Infoseek Shares. (a) Seller (i) is
experienced in evaluating and investing in companies such as Purchaser, (ii)
understands that it may lose its entire investment in Purchaser and can afford
to sustain such loss and (iii) is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended.
(b) Seller is acquiring the Infoseek Shares for its own account
for investment purposes and not with a view to, or for resale in connection
with, any distribution thereof, nor with any present intention of distributing
the Infoseek Shares.
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(c) Seller has had an opportunity to review with, and ask
questions of, Purchaser and the Managing Founders regarding the business,
management and financial affairs of Purchaser, and Seller has been furnished
with copies of documents which it has requested.
Section 5.8. Brokers. Seller has not paid or become obligated to pay any
fee or commission to any broker, finder, investment banker or other intermediary
in connection with the transactions contemplated by this Agreement.
VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 6.1. Organization. Purchaser is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to purchase the Assets in
accordance with the terms of this Agreement.
Section 6.2. Due Authorization. Purchaser has all requisite corporate
power and authority to execute and deliver this Agreement and all other
agreements contemplated hereby to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Purchaser of this
Agreement and the other documents contemplated hereby, the performance by
Purchaser of its obligations hereunder and thereunder, and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly and validly executed by Purchaser, and this Agreement
and each other agreement contemplated hereby to which Purchaser is a party are,
upon execution and delivery hereof and thereof by Purchaser, legal, valid and
binding obligations of Purchaser, enforceable against it in accordance with its
terms hereof and thereof (except as the enforceability hereof and thereof may be
limited by any applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at law).
Section 6.3. No Conflict. Neither the execution and delivery by
Purchaser of this Agreement or any of the other documents contemplated hereby,
nor the consummation by Purchaser of the transactions contemplated hereby or
thereby, nor compliance by Purchaser with any of the provisions hereof or
thereof, will: (a) conflict with, result in a breach or violation of or
constitute (or with notice or lapse of time or both constitute) a default under,
in any material respect, (i) the Certificate of Incorporation or Bylaws of
Purchaser, (ii) to the knowledge of Purchaser, any law, statute, rule,
regulation, order, judgment, decree, writ or injunction applicable to Purchaser
or (iii) to the knowledge of Purchaser, any of the terms, conditions or
provisions of any note, bond, lease, mortgage, indenture, license or other
instrument,
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contract or agreement to which Purchaser is a party or by which Purchaser (or
the Infoseek Shares or the Infoseek Warrant) is subject or bound; (b) result in
the creation of, or give any party the right to create, any lien, charge,
option, security interest, encumbrance or other claim upon the Infoseek Shares
or the Infoseek Warrant except as set forth in the Warrant Agreement and the
Shareholders Agreement; (c) terminate or modify, or give any third party the
right to terminate or modify, the provisions or terms of any material agreement
or commitment to which Purchaser is a party and by which the Infoseek Shares or
the Infoseek Warrant are subject or bound; or (d) to the knowledge of Purchaser,
require Purchaser to obtain any authorization, consent, approval or waiver from,
or to notify or to make any filing with, any Governmental Entity or to obtain
the approval or consent of any other Person.
Section 6.4. Capitalization. Immediately following the Closing,
Purchaser's authorized capital stock shall consist of: (a) 200,000 shares of
Common Stock, of which 50,000 shares, including any shares of Common Stock held
by Seller, are issued and outstanding; and (b) 50,000 shares of preferred stock,
$.001 par value per share, none of which shares are issued and outstanding. Upon
consummation of the Closing, all issued and outstanding shares of Common Stock
of Purchaser, including any shares of Common Stock held by Seller, will have
been duly authorized and validly issued, will be fully paid and nonassessable,
will be owned of record and, to the knowledge of Purchaser, beneficially by the
stockholders and in the amounts set forth on Schedule 6.4 and will have been
offered, issued, sold and delivered by Purchaser in compliance with applicable
federal and state securities laws, except for noncompliance with state
securities laws that would not have a material adverse effect upon Purchaser.
Except as set forth on Schedule 6.4, there are no outstanding preemptive or
other preferential rights, conversion rights or other rights, options, warrants
or agreements granted or issued by or binding upon Purchaser for the purchase or
acquisition of any shares of its Common Stock. To Purchaser's knowledge, no
holder of Common Stock has granted any option or other right to purchase from
such shareholder any interest in any share of Common Stock other than as set
forth on Schedule 6.4. Purchaser holds no shares of its capital stock in its
treasury.
VII. POST-CLOSING MATTERS
Section 7.1. Use of Name. Seller and Purchaser shall enter into and
perform their respective obligations under the Trademark License Agreement to
use but not sublicense the name "Infoseek" and certain variants thereof, in the
form attached hereto as Schedule 7.1.
Section 7.2. Use of Infoseek Business Channel. (a) Seller and Purchaser
shall enter into and perform their respective obligations under the Distribution
Agreement, in the form attached hereto as Schedule 7.2.
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Section 7.3. Ultraseek License. Seller and Purchaser shall enter into
and perform their respective obligations under the Ultraseek License Agreement,
in the form attached hereto as Schedule 7.3.
Section 7.4. Subrogation of Purchaser. In the event Purchaser shall
become liable for or suffer any damage with respect to any matter occurring on
or before the Closing Date which was covered by insurance maintained by Seller
on or prior to the Closing Date, Seller agrees that Purchaser shall be and
hereby is, to the extent permitted under such policies, subrogated to any rights
of Seller under such insurance coverage, and, in addition, Seller agrees to
promptly remit to Purchaser any insurance proceeds which Seller may receive on
account of any such liability or damage.
Section 7.5. Sharing of Data. Purchaser shall have the right following
the Closing Date to have reasonable access to those corporate minute books,
stock books, tax returns and other corporate records and files of Seller that
are retained by Seller pursuant to the terms of this Agreement to the extent any
of the foregoing relates to the Assets, is necessary in connection with the use
of the Assets or is otherwise needed by Purchaser in order to comply with its
obligations under applicable securities, tax or other laws and regulations.
Seller shall have the right following the Closing Date to have reasonable access
to those documents and records included in the Assets to the extent any such
documents or records are needed by Seller in order to comply with its
obligations under applicable securities, tax or other laws and regulations.
VIII. INDEMNIFICATION
Section 8.1. Survival of Representations and Warranties. All
representations and warranties contained in Articles V and VI and in Schedule
2.1(c) of this Agreement shall survive the Closing and shall remain in full
force and effect for a period of twelve months following the Closing, regardless
of any investigation made by Purchaser or Seller or on their respective behalf,
except as to (a) Seller's representations and warranties contained in Section
5.4 hereof, which survive and shall continue without time limit, (b) any matters
with respect to which a bona fide written claim shall have been made or an
action at law or in equity shall have commenced before such date, in which event
survival shall continue (but only with respect to, and to the extent of, such
claim) until the final resolution of such claim or action, including all
applicable periods for appeal and (c) the parties' covenants contained in
Articles II and VII and in Schedule 2.1(c) of this Agreement which shall
survive, unless otherwise terminable as set forth therein.
Section 8.2. Seller's Indemnity. Subject to the limitations set forth in
Section 8.4 hereof, Seller shall indemnify and hold harmless Purchaser and its
successors and assigns at all times after the Closing Date against and in
respect of:
(a) any damage, loss, cost, expense or liability (including
reasonable attorneys' fees) (collectively, "Losses") resulting to Purchaser from
any breach of any
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representation or warranty or nonfulfillment of any agreement or covenant on the
part of Seller under this Agreement or from any material misrepresentation in
any certificate or other instrument furnished by Seller to Purchaser hereunder;
(b) any and all Losses arising out of or in connection with the
operation or ownership of the Intellectual Property on or before the Transition
Date;
(c) any and all Losses arising out of or in connection with the
operation or ownership of any of the Assets, other than the Intellectual
Property, on or before the Closing Date; and
(d) any and all Losses incurred by Purchaser as a result of
noncompliance by Seller with any applicable bulk transfer or similar law or by
virtue of common law, statute or regulation imposing or attempting to impose
transferee liability on Purchaser other than with respect to the Assumed
Liabilities.
Seller shall not be liable to Purchaser under this Section 8.2 except to
the extent that the Losses exceed $25,000 in the aggregate, and in no event
shall Seller be liable to Purchaser for Losses in excess of $500,000 in the
aggregate. This indemnity agreement in this Section 8.2 shall be the sole,
exclusive and maximum remedy of Purchaser for breaches of representations,
warranties and covenants of Seller contained herein, in the Trademark License
Agreement and in the Distribution Agreement, except that this limitation shall
not foreclose any other rights or remedies Purchaser may have to specific
performance to enforce the provisions of this Agreement, the Trademark License
Agreement or the Distribution Agreement.
Section 8.3. Purchaser's Indemnity. Subject to the limitations set
forth in Section 8.4 hereof, Purchaser shall indemnify and hold harmless Seller
and its successors and assigns at all times after the Closing Date against and
in respect of:
(a) any Losses resulting to Seller from any breach of any
representation or warranty or nonfulfillment of any agreement or covenant on the
part of Purchaser under this Agreement or from any material misrepresentation in
any certificate or other instrument furnished by Purchaser to Seller hereunder;
(b) all Assumed Liabilities;
(c) any and all Losses arising out of or in connection with the
operation of the Intellectual Property after the Transition Date; and
(d) any and all Losses arising out of or in connection with the
operation or ownership of any of the Assets, after the Closing Date.
Notwithstanding anything to the contrary contained herein, with respect
to Losses resulting to Seller arising out of or in connection with KAM
Associates, Inc., Purchaser shall not be liable to Seller under this
Section 8.3. This indemnity
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agreement in this Section 8.3 shall not be limited in any manner whatsoever,
including as to duration or dollar amount, except in accordance with Section 8.1
above, and this indemnity shall not foreclose any other rights or remedies
Seller may have to specific performance to enforce the provisions of this
Agreement.
Section 8.4. Notice and Defense of Claims. Each party entitled to
indemnification under this Article VIII (the "Indemnified Party") shall give
notice to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought and shall permit the Indemnifying Party to
assume, at the Indemnifying Party's expense, the defense of any such claim or
any litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and that the Indemnified Party may participate in such
defense at such party's expense; and provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article VIII. The Indemnifying
Party, in the defense of any such claim or litigation, shall not, except with
the consent of the Indemnified Party, consent to entry of any judgment or entry
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the Indemnified Party of a release from
all liability in respect to such claim or litigation. The Indemnified Party
shall furnish such information regarding itself or the claim in question as the
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
Section 8.5. Payment/Reimbursement. At the time the amount of any
liability on the part of the Indemnifying Party under this Article VIII is
determined (which in the case of payment to third persons shall be the earlier
of (i) the date such payments have been reasonably determined to be payable or
(ii) the date that a court of competent jurisdiction shall enter a final
judgment, order or decree (after exhaustion of appeal rights) establishing such
liability) (such loss or amount being hereinafter referred to as the "Indemnity
Claim"), the Indemnifying Party shall forthwith, upon notice from the
Indemnified Party, pay to the Indemnified Party the amount of the Indemnity
Claim. If such amount is not paid forthwith, then the Indemnified Party may, at
its option, take legal action against the Indemnifying Party for reimbursement
in the amount of its Indemnity Claim. For purposes hereof the Indemnity Claim
shall include the amounts so paid, or determined to be owing, by the Indemnified
Party together with costs and reasonable attorney's fees associated with
collecting such Indemnity Claim and interest on the foregoing items at the Prime
Rate (as defined below) from the date the Indemnity Claim is due from the
Indemnifying Party to the Indemnified Party as hereinabove provided until the
Indemnity Claim shall be paid.
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IX. MISCELLANEOUS
Section 9.1. Expenses. Each party to this Agreement shall pay its own
costs and expenses relating to this Agreement, the negotiations leading up to
this Agreement and the transactions contemplated by this Agreement, whether or
not the transactions herein contemplated shall be consummated, except, however,
that Purchaser shall pay fifty percent (50%) of Seller's reasonable legal
expenses, provided that the amount to be paid by Purchaser shall not exceed
$25,000.
Section 9.2. Amendment. This Agreement shall not be amended or modified
except by a writing duly executed by Seller and Purchaser.
Section 9.3. Entire Agreement: Assignment. This Agreement, including the
Schedules hereto and the other instruments, agreements and documents delivered
pursuant to this Agreement contain all of the terms, conditions and
representations and warranties agreed upon by the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
negotiations, correspondence, undertakings and communications of the parties,
oral or written, respecting such subject matter, including, without limitation,
that certain letter, dated September 18, 1997, from Seller to Xxxxx Xxxxxxxx, as
a representative of Purchaser, together with the Term Sheet attached thereto;
provided, however, that Section 10, entitled Indemnification, of that certain
Asset Loan Agreement, made as of November 13, 1997, by and between Seller and
Purchaser, is hereby incorporated herein by reference and shall survive the
Closing but only to the extent that Seller shall be entitled to indemnification
thereunder for Losses resulting from any use of the Loaned Assets (as defined
therein) prior to the Closing Date. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations of any party hereunder may be
assigned by such party without the prior written consent of the other party
hereto.
Section 9.4. Headings. The headings contained in this Agreement are
intended solely for convenience and shall not affect the rights of the parties
to this Agreement.
Section 9.5. Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given (a) on the date of delivery, if
delivered to the persons identified below, (b) seven calendar days after mailing
if mailed, with proper postage, by certified or registered mail, return receipt
requested, (c) on the date of receipt if sent by telex or telecopy, and
confirmed in writing in the manner set forth in (b) on or before the next day
after the sending of the telex or telecopy, or (d) one business day after
delivered to a nationally recognized overnight courier service marked for
overnight delivery, in each case addressed as follows:
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If to Seller: Infoseek Corporation
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
Telephone: 408/000-0000
Telecopy: 408/734-9350
with a copy to: Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: 650/000-0000
Telecopy: 650/496-7556
If to Purchaser: BizWatch, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Telephone: 703/000-0000
Telecopy: 703/683-4707
with a copy to: Fulbright & Xxxxxxxx L.L.P.
Market Square
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: 202/000-0000
Telecopy: 202/662-4643
Such addresses and numbers may be changed, from time to time, by means of a
notice given in the manner provided in this Section 9.5.
Section 9.6. Severability. If any provision of this Agreement is held to
be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the full extent possible.
Section 9.7. Waiver. Waiver of any term or condition of this Agreement
by any party shall only be effective if in writing and shall not be construed as
a waiver of any subsequent breach or failure of the same term or condition, or a
waiver of any other term or condition of this Agreement.
Section 9.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware.
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Section 9.9. Third Parties. Except as specifically set forth or referred
to herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person other than the parties hereto and their
successors or assigns any rights or remedies under or by reason of this
Agreement.
Section 9.10. Counterparts. This Agreement may be signed in two or
more counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original of this Agreement.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the date set forth above.
PURCHASER: BIZWATCH, INC.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: XXXXX X. XXXXXXXX
Title: PRESIDENT
SELLER: INFOSEEK CORPORATION
By: /s/ XXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President Finance & CFO
