Exhibit 2.4
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXXXX.XXX,
CLOSE REACH MERGER CORP.,
A WHOLLY OWNED DIRECT SUBSIDIARY OF XXXXXXXX.XXX,
MIVA CORPORATION,
AND THE MIVA PRINCIPAL STOCKHOLDERS
SEPTEMBER 2, 2003
TABLE OF CONTENTS
Page No.
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ARTICLE I THE MERGER.......................................................... 1
1.1 The Merger................................................. 1
1.2 Effective Time............................................. 1
1.3 Effects of the Merger...................................... 2
1.4 Certificate of Incorporation and Bylaws.................... 2
1.5 Directors and Officers of the Surviving Corporation........ 2
ARTICLE II CONVERSION OF SECURITIES............................................ 2
2.1 Merger Consideration; Conversion of Capital Stock.......... 2
2.2 Allocation and Disbursement of Merger Consideration........ 3
2.3 Fractional Shares; Adjustments............................. 4
2.4 Exchange of Certificates................................... 4
2.5 Escrow Account............................................. 8
2.6 Adjustment to Merger Consideration......................... 8
2.7 Dissenting Shares.......................................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF FINDWHAT AND SUBCORP.............. 10
3.1 Organization and Standing.................................. 10
3.2 Corporate Power and Authority.............................. 10
3.3 Conflicts; Consents and Approvals.......................... 10
3.4 Subcorp.................................................... 11
3.5 Actions.................................................... 11
3.6 Financial Ability.......................................... 11
3.7 Capitalization of FindWhat and Subcorp..................... 12
3.8 Subsidiaries............................................... 12
3.9 Brokerage and Finders' Fees................................ 13
3.10 Board Recommendation; Required Vote........................ 13
3.11 FindWhat SEC Documents..................................... 13
3.12 Books and Records.......................................... 14
3.13 No Undisclosed Liabilities................................. 14
3.14 No Material Adverse Change................................. 14
3.15 Disclosure................................................. 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MIVA.............................. 15
4.1 Organization and Standing.................................. 15
4.2 Subsidiaries............................................... 15
4.3 Corporate Power and Authority.............................. 15
4.4 Capitalization of Miva..................................... 16
4.5 Conflicts; Consents and Approvals.......................... 16
4.6 Brokerage and Finders' Fees................................ 17
4.7 Books and Records; Financial Statements.................... 17
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TABLE OF CONTENTS
Page No.
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4.8 Compliance with Law........................................ 17
4.9 Actions.................................................... 18
4.10 No Material Adverse Change................................. 18
4.11 Taxes...................................................... 18
4.12 Intellectual Property...................................... 20
4.13 Title to Assets and Properties............................. 22
4.14 Employee Benefit Plans..................................... 22
4.15 Contracts.................................................. 24
4.16 Labor Matters.............................................. 26
4.17 Undisclosed Liabilities.................................... 27
4.18 Operation of Miva's Business; Relationships................ 27
4.19 Permits.................................................... 27
4.20 Real Property.............................................. 27
4.21 Environmental Matters...................................... 28
4.22 Board Recommendation....................................... 29
4.23 Accounts Receivable........................................ 29
4.24 Insurance.................................................. 29
4.25 Product Warranty........................................... 30
4.26 Data Protection Matters.................................... 30
4.27 Foreign Corrupt Practices Act.............................. 30
4.28 Disclosure................................................. 31
ARTICLE V COVENANTS OF THE PARTIES............................................ 31
5.1 Mutual Covenants........................................... 31
5.2 Covenants of FindWhat...................................... 33
5.3 Covenants of Miva.......................................... 35
ARTICLE VI CONDITIONS.......................................................... 40
6.1 Conditions to the Obligations of Each Party................ 40
6.2 Conditions to Obligations of Miva and the Miva Principal
Stockholders............................................... 40
6.3 Conditions to Obligations of FindWhat and Subcorp.......... 41
ARTICLE VII TERMINATION AND AMENDMENT........................................... 42
7.1 Termination................................................ 42
7.2 Effect of Termination...................................... 43
ARTICLE VIII GENERAL SURVIVAL; INDEMNIFICATION................................... 43
8.1 Survival of Representations and Warranties................. 43
8.2 Indemnification............................................ 43
8.3 Insurance Recoveries....................................... 47
(ii)
TABLE OF CONTENTS
Page No.
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ARTICLE IX MISCELLANEOUS....................................................... 48
9.1 Notices.................................................... 48
9.2 Interpretation............................................. 49
9.3 Counterparts............................................... 50
9.4 Entire Agreement........................................... 50
9.5 Third-Party Beneficiaries.................................. 50
9.6 Governing Law; Venue....................................... 50
9.7 Arbitration................................................ 50
9.8 Specific Performance....................................... 51
9.9 Assignment................................................. 51
9.10 Expenses................................................... 51
9.11 Severability............................................... 51
9.12 Letter of Intent........................................... 52
9.13 Amendment.................................................. 52
EXHIBITS
Form of Miva Stockholder Voting Agreement Exhibit A
Form of Exchange Agent Instructions Exhibit B
Form of Letter of Transmittal Exhibit C
Form of Escrow Agreement Exhibit D
Form of Promissory Note Exhibit E
Form of Investment Representation Certificate Exhibit F
Form of Miva Executive Employment Agreement Exhibit G
Form of Miva Employment Agreement Exhibit H
SCHEDULES
Merger Consideration Allocation per Miva Stockholder Schedule 1
Calculation and Allocation of Remaining Closing Cash Consideration Schedule 1A
Calculation and Allocation of Closing Stock Consideration Schedule 1B
Calculation of Escrow Stock Consideration Schedule 1C
Addresses for Notice; Wire Transfer Instructions Schedule 2
FindWhat Disclosure Schedule Attached
Miva Disclosure Schedule Attached
(iii)
INDEX OF TERMS
Section Page No.
------- --------
A
Acquisition Proposal 5.3(d)(i) ................. 38
Action 3.5 ................. 11
Affiliate 9.2(d) ................. 50
Aggregate Series A Closing Stock Consideration .. Schedule 1B-1(c)
Aggregate Series B Closing Stock Consideration .. Schedule 1B-1(E)
Agreement Preamble ................. 1
Applicable Laws 2.4(d) ................. 6
B
Benefit Obligation 4.14(k)(i) ................. 23
Books of Account 4.7(a) ................. 17
C
California Merger Documents 1.2 .................. 2
California Secretary of State 1.2 .................. 2
Cash Consideration 2.1 .................. 2
Certificate of Merger 1.2 .................. 1
Certificates 2.3(b) .................. 4
CGCL 1.1 .................. 1
Closing 1.2 .................. 2
Closing Cash Consideration 2.2(b) .................. 3
Closing Date 1.2 .................. 2
Closing Stock Consideration 2.2(b) .................. 3
Code 2.4(i) .................. 7
Commission 3.11 ................. 13
Contract 4.15(a) ................. 24
Controlled Group Liability 4.14(k)(ii) ................. 24
Cut-Off Date 8.1(a) ................. 43
D
Damages 8.2(a) ................. 43
Data Protection Laws 4.26(b) ................. 30
Delaware Secretary of State 1.2 .................. 1
Department 5.1(e) ................. 33
DGCL 1.1 .................. 1
Dissenting Shares 2.7 .................. 9
E
Effective Time 1.2 .................. 2
Eligible Stockholder 5.2(c)(i) ................. 34
Encumbrance 3.3(b) ................. 11
(1)
INDEX OF TERMS
Section Page No.
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Environmental Laws 4.21(e) ................. 28
ERISA 4.14(k)(iii) ................. 24
ERISA Affiliate 4.14(k)(iv) ................. 24
Escrow Account 2.5(a) ................. 8
Escrow Agreement 2.5(a) ................. 8
Escrow Cash Consideration 2.2(a) ................. 3
Escrow Stock Consideration 2.2(a) ................. 3
Estimated Transaction Expenses 9.10(b) ................. 51
Exchange Act 3.11 ................. 13
Exchange Agent 2.4(b) ................. 5
Exchange Agent Instructions 2.4(b) ................. 5
Exchange Fund 2.4(b) .................. 5
F
Fairness Hearing 5.1(a) ................. 31
Fairness Hearing Expenses 9.10(a) ................. 51
FindWhat Articles 3.1 ................. 10
FindWhat Bylaws 3.1 ................. 10
FindWhat Capital Stock 3.7(a) ................. 12
FindWhat Common Stock 3.7(a) 12
FindWhat Disclosure Schedule Article III ................. 10
FindWhat Indemnified Parties 8.2(a) ................. 43
FindWhat Indemnifying Parties 8.2(c) ................. 46
FindWhat Preamble ................. 1
FindWhat Preferred Stock 3.7(a) ................. 12
FindWhat SEC Documents 3.11 ................. 13
G
Governmental Authority 2.3(g) .................. 7
H
Hazardous Materials 4.21(f) ................. 29
I
Iem Preamble ................. 1
Indemnified Parties 8.2(d)(i) ................. 46
Indemnity Limit 8.2(a)(ii) ................. 44
Insurance Policies 4.24 ................. 29
Insurance Policy 4.24 ................. 29
Intellectual Property 4.12(d) ................. 21
Investment Representation Certificate 5.3(e) ................. 39
IRI Preamble ................. 1
(2)
INDEX OF TERMS
Section Page No.
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K
Knowledge 9.2(e) ................. 50
L
Lease 4.20(b) ................. 27
Letter of Intent 5.3(c) ................. 38
Letter of Transmittal 2.4(c) .................. 5
Xxxx Xxxxxxx 1.2 .................. 2
M
Material Adverse Effect 9.2(b) ................. 49
Merger Recitals .................. 1
Merger Consideration 2.1 .................. 2
Miva Board Recommendation 4.22 ................. 29
Miva Bylaws 4.1 ................. 15
Miva Capital Stock 4.4(a) ................. 16
Miva Certificate 4.1 ................. 15
Miva Common Stock 4.4(a) ................. 16
Miva Disclosure Schedule Article IV 15
Miva Employee 4.14(k)(v) ................. 24
Miva Employment Agreement 6.3(h) ................. 42
Miva Executive Employment Agreement 6.3(g) ..................42
Miva Financial Statements 4.7(b) ................. 17
Miva Indemnified Parties 8.2(c) ................. 46
Miva Indemnifying Parties 8.2(a) ................. 43
Miva Plans 4.14(k)(vi) ................. 24
Miva Preamble ................. 1
Miva Preferred Stock 4.4(a) ................. 16
Miva Principal Stockholders Preamble ................. 1
Miva Stockholder 2.3(b) ................. 4
Miva Stockholder Voting Agreement Recitals .................. 1
Miva Stockholders Meeting 5.3(a) ................. 35
Multiemployer Plan 4.14(k)(vii) ................. 24
Multiple Employer Plan 4.14(k)(viii) ................. 24
N
Notice of Disagreement 2.6(c) ................. 9
P
Permits 4.19 ................. 27
Personal Data 4.26(c) ................. 30
Post-Closing Liabilities Statement 2.6(b) ................. 8
Preliminary Liabilities Statement 2.6(a) ................. 8
(3)
INDEX OF TERMS
Section Page No.
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Q
Qualified Plan 4.14(k)(ix) ................. 24
R
Remaining Closing Cash Consideration 2.2(c)(ii) ................. 3
S
Securities Act 3.11 ................. 13
Series A Holders 2.2(c)(ii) ................. 3
Series A Preference 2.2(c)(ii) ................. 3
Series A Shares 2.2(c)(ii) ................. 3
Series B Holders 2.2(c)(ii) ................. 3
Series B Preference 2.2(c)(ii) ................. 3
Series B Shares 2.2(c)(ii) ................. 3
Stock Closing Price .. Schedule 1B-1(B)1
Stock Consideration 2.1............................. 3
Subcorp Preamble ....................... 1
Subsidiary 9.2(c).......................... 49
Sumitomo Preamble ....................... 1
Surviving Corporation 1.1............................. 1
T
Tax 4.11(n) ................. 20
Tax Returns 4.11(m) ................. 20
Taxes 4.11(n) ................. 20
(4)
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of September 2, 2003, by and among XxxxXxxx.xxx, a Nevada corporation
("FindWhat"), Close Reach Merger Corp., a Delaware corporation and a wholly
owned subsidiary of FindWhat ("Subcorp"), Miva Corporation, a California
corporation ("Miva"), and Xxxxxx Xxxxxx, an individual resident in the State of
California, Xxxx XxXxxxxxx, an individual resident in the State of California,
Mony Iem, an individual resident in Thailand ("Iem"), Sumitomo Corporation, a
Japanese corporation ("Sumitomo"), and Internet Research Institute, Inc., a
Japanese corporation ("IRI") (collectively, the "Miva Principal Stockholders").
PRELIMINARY STATEMENTS
WHEREAS, the respective Boards of Directors of FindWhat, Subcorp and Miva
have determined the merger of Subcorp with and into Miva, in the manner
contemplated herein (the "Merger"), to be desirable and in the best interests of
their respective stockholders and, by resolutions duly adopted, have approved
and adopted this Agreement;
WHEREAS, as an inducement to FindWhat's willingness to enter into this
Agreement, the Miva Principal Stockholders, collectively the holders of a
majority of the issued and outstanding shares of Miva's capital stock, are
entering into a voting agreement, dated as of the date hereof, substantially in
the form of Exhibit A (the "Miva Stockholder Voting Agreement"), pursuant to
which the Principal Miva Stockholders have agreed, among other things, to vote
their shares of Miva capital stock in favor of the adoption of this Agreement
and the consummation of the Merger; and
WHEREAS, FindWhat, Subcorp, Miva and the Miva Principal Stockholders
desire to make certain representations, warranties, covenants and agreements in
connection with such merger and also to prescribe various conditions to the
merger.
NOW, THEREFORE, in consideration of these premises and the mutual and
dependent promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation Law
(the "DGCL") and the California General Corporation Law (the "CGCL"), Subcorp
shall be merged with and into Miva at the Effective Time. As a result of the
Merger, the separate corporate existence of Subcorp shall cease and Miva shall
continue its existence under the laws of the State of California as a
wholly-owned subsidiary of FindWhat. Miva, in its capacity as the corporation
surviving the Merger, is hereinafter sometimes referred to as the "Surviving
Corporation."
1.2 Effective Time. As promptly as possible on the Closing Date, the
parties shall cause the Merger to be consummated by filing (a) with the
Secretary of State of the State of Delaware (the "Delaware Secretary of State")
a certificate of merger (the "Certificate of Merger") in such form as is
required by and executed in accordance with the DGCL and (b) with
1
the Secretary of State of the State of California (the "California Secretary of
State") this Agreement and an officer's certificate from FindWhat and Miva
(collectively, the "California Merger Documents") in such form as is required by
and executed in accordance with the CGCL. The Merger shall become effective (the
"Effective Time") when the Certificate of Merger has been filed with the
Delaware Secretary of State and when the California Merger Documents have been
filed with the California Secretary of State or at such later time as shall be
agreed upon by FindWhat and Miva and specified in the Certificate of Merger and
the California Merger Documents. Prior to the filings referred to in this
Section 1.2, a closing (the "Closing") shall be held at the offices of Miva's
counsel, Xxxx, Forward, Xxxxxxxx & Scripps LLP ("Xxxx Xxxxxxx"), 000 Xxxx
Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, or such other place as the
parties may agree on, as soon as practicable (but in any event within ten
business days) following the date upon which all conditions set forth in Article
VI that are capable of being satisfied prior to the Closing have been satisfied
or waived, or at such other date as FindWhat and Miva may agree; provided that
the conditions set forth in Article VI have been satisfied or waived at or prior
to such date. The date on which the Closing takes place is referred to herein as
the "Closing Date." For all purposes, the Closing shall be effective as of 12:01
a.m. on the Closing Date.
1.3 Effects of the Merger. At and after the Effective Time, the separate
existence of Subcorp will cease, and Miva as the Surviving Corporation and
successor shall succeed to all the rights and property of Subcorp and Miva, and
shall be subject to all the debts and liabilities of Subcorp and Miva except as
otherwise expressly provided in Section 9.10 of this Agreement.
1.4 Certificate of Incorporation and Bylaws. The (a) Amended and
Restated Certificate of Incorporation of Miva, as in effect immediately prior to
the Effective Time, shall be the certificate of incorporation of the Surviving
Corporation in the Merger and (b) Bylaws of Miva in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation; in each
case, until amended in accordance with the CGCL.
1.5 Directors and Officers of the Surviving Corporation. From and after
the Effective Time, the officers of Miva shall be the officers of the Surviving
Corporation and the directors of Subcorp shall be the directors of the Surviving
Corporation, in each case, until their respective successors are duly elected
and qualified. On the Closing Date, Miva shall deliver to FindWhat evidence
satisfactory to FindWhat of the resignations of the directors of Miva and any
Subsidiary, with such resignations to be effective as of the Effective Time.
FindWhat shall cause the election of new directors, as determined by FindWhat,
for Miva and any Subsidiary to be effective as of the resignation of the former
directors of Miva and any Subsidiary.
ARTICLE II
CONVERSION OF SECURITIES
2.1 Merger Consideration; Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of FindWhat,
Subcorp or Miva or their respective stockholders, each share of Miva Capital
Stock issued and outstanding immediately prior to the Effective Time (exclusive
of Dissenting Shares) shall be converted into, and shall represent the right to
receive, that portion of the aggregate amount of $5,462,000 (such aggregate
amount, as adjusted pursuant to Section 2.6 if applicable, the "Merger
Consideration"), as such share is entitled, with one-half of such Merger
Consideration payable in cash (such aggregate amount, the "Cash Consideration"),
and one-half of such Merger Consideration payable in
2
FindWhat Common Shares (such aggregate amount, the "Stock Consideration");
provided, however, that the aggregate Stock Consideration shall not be lower
than 94,310 shares of FindWhat Common Shares (if FindWhat's trailing thirty day
average as reported on the NASDAQ National Market for the 30 trading days ending
three days prior to the Closing Date is greater than $28.96) or greater than
182,333 shares of FindWhat Common Shares (if FindWhat's trailing thirty day
average as reported on the NASDAQ National Market for the 30 trading days ending
three days prior to the Closing Date is less than $14.98).
2.2 Allocation and Disbursement of Merger Consideration. The Merger
Consideration shall be allocated and distributed as set forth on Schedule 1,
with the amounts set forth on such Schedule 1 calculated as follows, as more
specifically set forth on Schedules 1A, 1B and 1C:
(a) Deposit to Escrow. At the Closing, one-half of the Cash
Consideration (the "Escrow Cash Consideration") and one-half of the Stock
Consideration (the "Escrow Stock Consideration") shall be paid by FindWhat to
the Escrow Agent, for deposit into the Escrow Account, as set forth in Section
2.5.
(b) Hold-Back. At the Closing, (i) 50% of the Fairness Hearing
Expenses, as set forth in Section 9.10, shall be deducted and held back from the
remaining one-half of the Cash Consideration not deposited into the Escrow
Account pursuant to Section 2.2(a) (such remaining one-half, less such Fairness
Hearing Expenses, the "Closing Cash Consideration"), and (ii) 50% of the
Fairness Hearing Expenses, as set forth in Section 9.10, shall be deducted and
held back from the remaining one-half of the Stock Consideration not deposited
into the Escrow Account pursuant to Section 2.2(a) (such remaining one-half,
less such Fairness Hearing Expenses, the "Closing Stock Consideration").
(c) Cash Payable at Closing. At the Closing, the Closing Cash
Consideration shall be allocated and distributed as follows
(i) First, the Estimated Transaction Expenses, as set forth
in Section 9.10, shall be paid by wire transfer of immediately available funds
to the account of Xxxx Xxxxxxx, and pursuant to the instructions, set forth on
Schedule 2.
(ii) Second, all Closing Cash Consideration remaining after
the hold back of the Fairness Hearing Expenses and the payment of the Estimated
Transaction Expenses (the "Remaining Closing Cash Consideration") shall be paid,
on a pari passu basis: (A) to the holders (the "Series A Holders") of Series A
Preferred Stock (the "Series A Shares") in partial payment of their liquidation
preference of $2.40 per share (the "Series A Preference") and (B) to the holders
(the "Series B Holders") of Series B Preferred Stock (the "Series B Shares") in
partial payment of their liquidation preference of $2.50 per share (the "Series
B Preference"). Such Remaining Closing Cash Consideration shall be calculated
and allocated among the Series A Holders and the Series B Holders as set forth
on Schedule 1A and shall be paid (X) with respect to amounts payable to Iem,
Sumitomo and IRI, by wire transfer of immediately available funds to the
accounts set forth on Schedule 2 and (Y) with respect to the remaining Series A
Holders and Series B Holders, to the Exchange Agent for disbursement as set
forth in Section 2.4.
(d) Stock Payable at Closing. At the Closing, the Closing Stock
Consideration shall be allocated and distributed to the Series A Holders and the
Series B
3
Holders in partial payment of the Series A Preference and the Series B
Preference, respectively. Such Closing Stock Consideration shall be calculated
and allocated among the Series A Holders and the Series B Holders as set forth
on Schedule 1B and shall be paid by delivery of certificates representing that
number of FindWhat Common Shares to which each such Series A Holder and Series B
Holder is entitled. Such delivery shall be made (X) with respect to Iem,
Sumitomo and IRI, at the Closing, and (Y) immediately after the Closing, to the
Exchange Agent for disbursement as set forth in Section 2.4, with respect to the
remaining Series A Holders and Series B Holders.
(e) Conversion of Subcorp Stock. Each share of capital stock of
Subcorp outstanding at the Effective Time shall be converted into and become one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
2.3 Fractional Shares; Adjustments.
(a) No certificates for fractional FindWhat Common Shares shall be
issued as a result of the conversion provided for in Section 2.1 and such
fractional share interests will not entitle the owner thereof to vote or have
any rights of a holder of FindWhat Common Shares.
(b) In lieu of any such fractional FindWhat Common Shares, the
holder of a certificate or certificates (the "Certificates") that immediately
prior to the Effective Time represented outstanding shares of Miva Capital Stock
(each, a "Miva Stockholder") whose shares were converted into the right to
receive the Merger Consideration pursuant to Section 2.1(a), upon presentation
of such fractional interest represented by an appropriate Certificate for Miva
Capital Stock to the Exchange Agent pursuant to Section 2.3, shall be entitled
to receive a cash payment therefor in an amount equal to the value of such
fractional interest. Such payment with respect to fractional shares is intended
to avoid the expense and inconvenience of issuing fractional shares and to
provide a mechanical rounding off of, and is not a separately bargained for,
consideration. If more than one Certificate shall be surrendered for the account
of the same holder, the number of shares of Miva Capital Stock for which
Certificates have been surrendered shall be appropriately adjusted to provide to
the Miva Stockholders the same economic effect as contemplated by this
Agreement. The fractional share interests of each Miva Stockholder will be
aggregated, and no Miva Stockholder will receive cash in an amount greater than
the value of one full FindWhat Common Share for such fractional share interest.
2.4 Exchange of Certificates.
(a) Exchange at Closing. At the Closing, each Miva Principal
Stockholder shall deliver the Certificate or Certificates representing such Miva
Principal Stockholder's shares of Miva Capital Stock (or affidavits of lost
certificates in lieu thereof), duly endorsed in blank or accompanied by stock
powers duly executed in blank, and in exchange for such delivery shall receive
(i) the Cash Consideration (as determined pursuant to Section 2.1) to which such
Miva Principal Stockholder is entitled, payable by wire transfer of immediately
available funds to the account specified by such Miva Principal Stockholder, and
(ii) the Stock Consideration, payable by delivery of a stock certificate naming
such Miva Principal Stockholder as the holder thereof; provided, however, that
each of (i) and (ii) above shall be subject to (b) below.
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(b) Exchange Agent. As of the Effective Time, FindWhat shall
deposit with a bank, trust company or such other exchange agent as may be
designated by FindWhat (the "Exchange Agent") and which shall be reasonably
acceptable to Miva, for the benefit of Miva Stockholders, for exchange in
accordance with this Section 2.3, the Merger Consideration not deposited into
the Escrow Account pursuant to Section 2.4, comprised of (i) fifty percent (50%)
of the certificates representing FindWhat Common Shares issuable pursuant to
Section 2.1 in exchange, in part, for outstanding shares of Miva Capital Stock,
and (ii) fifty percent (50%) of the cash, pursuant to Section 2.1 in exchange,
in part, for outstanding shares of Miva Capital Stock (together with any
dividends or distributions with respect to the cash portion thereof, the
"Exchange Fund") together with any additional cash needed to fulfill the
requirements of Section 2.2 for fractional shares. The parties shall deliver
instructions to the Exchange Agent substantially in the form attached as Exhibit
B (the "Exchange Agent Instructions").
(c) Exchange Procedures. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
Certificate, a letter of transmittal and instructions for effecting the
surrender of the Certificates in exchange for certificates representing such
number of FindWhat Common Shares as such Miva Stockholder is entitled,
substantially in the form attached as Exhibit C (the "Letter of Transmittal").
Upon surrender of a Certificate for cancellation to the Exchange Agent, together
with a duly executed Letter of Transmittal, the holder of such Certificate shall
be entitled to receive in exchange therefor (i) a certificate or certificates
representing that whole number of FindWhat Common Shares which such holder has
the right to receive pursuant to Section 2.1 in such denominations and
registered in such names as such holder may request, and (ii) payment by check
or wire transfer of funds in U.S. dollars representing (A) the amount of the
Cash Consideration which such holder has the right to receive pursuant to the
provisions of this Article II, and (B) the amount of cash in lieu of fractional
shares, if any, and unpaid dividends and distributions, if any, which such
holder has the right to receive pursuant to the provisions of this Article II,
after giving effect to any required withholding tax. The shares represented by a
Certificate so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on the cash in lieu of fractional shares, if any, and unpaid
dividends and distributions, if any, payable to holders of shares of Miva
Capital Stock. In the event of a transfer of ownership of shares of Miva Capital
Stock that is not registered on the transfer records of Miva, a certificate
representing the proper number of FindWhat Common Shares, together with a check
for the cash to be paid as part of the Merger Consideration and for the cash to
be paid in lieu of fractional shares, if any, and unpaid dividends and
distributions, if any, may be issued to such transferee if the Certificate
representing such shares of Miva Capital Stock held by such transferee is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.3, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon surrender a certificate representing
FindWhat Common Shares, cash as part of the Merger Consideration, and cash in
lieu of fractional shares, if any, and unpaid dividends and distributions, if
any, as provided in this Article II. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
FindWhat, the posting by such person of a bond in such reasonable amount as
FindWhat may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent will deliver in exchange
for such lost, stolen or destroyed
5
Certificate, a certificate representing the proper number of FindWhat Common
Shares, together with a check for the cash to be paid as part of the Merger
Consideration, and for the cash to be paid in lieu of fractional shares, if any,
with respect to the shares of Miva Capital Stock formerly represented thereby,
and unpaid dividends and distributions on FindWhat Common Shares, if any, as
provided in this Article II.
(d) Distributions with Respect to Unexchanged Shares.
Notwithstanding any other provisions of this Agreement, no dividends or other
distributions declared or made after the Effective Time with respect to FindWhat
Common Shares having a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate, no cash payment as part of the Merger
Consideration and no cash payment in lieu of fractional shares shall be paid to
any such holder, until the holder shall surrender such Certificate as provided
in this Section 2.3. Subject to the effect of all applicable constitutions,
laws, statutes, treaties, orders, rules, regulations, ordinances, notices,
approvals, policies or guidelines promulgated, or judgments, decisions, decrees,
or orders of any Governmental Authority (collectively, "Applicable Laws"),
following surrender of any such Certificate, there shall be paid to the holder
of the certificates representing whole FindWhat Common Shares issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore payable with respect to such whole FindWhat Common Shares and not
paid, less the amount of any withholding taxes that may be required thereon,
(ii) the amount of cash representing a portion of the Merger Consideration, and
(iii) at the appropriate payment date subsequent to surrender, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole FindWhat Common Shares, less the amount of any withholding
taxes which may be required thereon.
(e) No Further Ownership Rights in Miva Capital Stock. All Merger
Consideration issued and/or paid upon surrender of Certificates in accordance
with the terms hereof (including any cash paid pursuant to this Article II)
shall be deemed to have been issued and/or paid in full satisfaction of all
rights pertaining to such shares of Miva Capital Stock represented thereby, and,
as of the Effective Time, the stock transfer books of Miva shall be closed and
there shall be no further registration of transfers on the stock transfer books
of Miva of shares of Miva Capital Stock outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled and exchanged as
provided in this Section 2.3.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to Miva Stockholders six months after the date of the
mailing required by Section 2.3(b) shall be delivered to FindWhat, upon demand
thereby, and holders of Certificates who have not theretofore complied with this
Section 2.3 shall thereafter look only to FindWhat for payment of any claim to
FindWhat Common Shares, cash as a portion of the Merger Consideration or cash in
lieu of fractional shares thereof, or dividends or distributions, if any, in
respect thereof.
(g) No Liability. None of FindWhat, the Surviving Corporation or
the Exchange Agent shall be liable to any person in respect of any shares of
Miva Capital Stock (or dividends or distributions with respect thereto) or cash
from the Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered prior to seven years after the Effective Time or
6
immediately prior to such earlier date on which any cash, any cash in lieu of
fractional shares or any dividends or distributions with respect to whole shares
of Miva Capital Stock in respect of such Certificate would otherwise escheat to
or become the property of any Governmental Authority, any such cash, dividends
or distributions in respect of such Certificate shall, to the extent permitted
by Applicable Law, become the property of FindWhat, free and clear of all claims
or interest of any person previously entitled thereto. For purposes of this
Agreement, "Governmental Authority" means any (A) nation, region, state, county,
city, town, village, district or other jurisdiction, (B) federal, state, local,
municipal, foreign or other government, (C) federal, state, local municipal,
foreign or multi-national court, arbitral tribunal, administrative agency or
commission, (D) other governmental, quasi-governmental, public, or regulatory
body, agency, instrumentality or authority of any nature, (E) multi-national
organization, (F) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, policy, regulatory or taxing authority or
power of any nature or (G) official of any of the foregoing.
(h) Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund as directed by FindWhat, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to FindWhat upon termination of the Exchange Fund pursuant to Section
2.3(e).
(i) Withholding Rights. Each of the Surviving Corporation and
FindWhat shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable pursuant to this Agreement to any holder of shares of Miva
Capital Stock (other than any holder of Miva Preferred Stock party to this
Agreement), such amounts as it is required to deduct and withhold with respect
to the making of such payment under the United States Internal Revenue Code of
1986, as amended (the "Code") or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by the Surviving Corporation or
FindWhat, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Miva Capital Stock in respect of which such deduction and withholding was made
by the Surviving Corporation or FindWhat, as the case may be. Any Tax withheld
by FindWhat or the Surviving Corporation shall be paid by FindWhat or the
Surviving Corporation, as the case may be, to the appropriate Governmental
Authority when due in accordance with Applicable Law and FindWhat or the
Surviving Corporation, as the case may be, shall within 30 days of the payment
of such Tax deliver to the holder of the shares of Miva Capital Stock evidence
reasonably satisfactory to such holder that payment was duly remitted to the
appropriate Governmental Authority.
(j) Restrictive Legend. In the event a permit is not granted
approving the issuance of FindWhat Common Shares to be issued to Miva
Stockholders at the Closing pursuant to the Fairness Hearing, then each
certificate evidencing such FindWhat Common Shares shall bear the following
legend in conspicuous type:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION WITHOUT
AN OPINION OF COUNSEL SATISFACTORY
7
TO THE CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED.
2.5 Escrow Account.
(a) Escrow Agreement. On or prior to the Closing Date, FindWhat
and Miva shall establish an escrow at Union Bank of California, N.A. (the
"Escrow Account"), by the execution and delivery of an Escrow Agreement
substantially in the form attached as Exhibit D hereto (the "Escrow Agreement").
(b) Deposit of Merger Consideration. On the Closing Date, FindWhat
shall pay to the Escrow Agent, for immediate deposit into the Escrow Account,
(i) the Escrow Cash Consideration, by delivery of a promissory note in the form
attached as Exhibit E to the account of Escrow Agent, and pursuant to the
instructions, set forth on Schedule 2, and (i) the Escrow Stock Consideration,
by delivery of one or more certificates, duly endorsed in blank, representing
that number of FindWhat Common Shares comprising the Escrow Stock Consideration,
calculated as set forth on Schedule 1C.
(c) Disbursement of Merger Consideration. All of the Escrow Cash
Consideration and Escrow Stock Consideration deposited in the Escrow Account
shall be available, in accordance with the Escrow Agreement, to secure the
performance of the Miva Principal Stockholders' indemnity obligations under
Section 8.2 hereof and shall be paid to the Miva Stockholders as set forth on
Schedule 1 in accordance with (and with any amounts set forth on Schedule 1
subject to adjustment in accordance with) the terms and subject to the
conditions set forth in the Escrow Agreement.
2.6 Adjustment to Merger Consideration.
(a) The Cash Consideration and Stock Consideration components of
the Merger Consideration payable prior to the adjustments set forth in Sections
2.2(a) and 2.2(b) shall be equally reduced on a dollar-for-dollar basis by the
amount, if any, by which the outstanding liabilities and obligations of Miva,
including but not limited to future rent payments, future severance payments and
other non-balance sheet obligations (exclusive of any Estimated Transaction
Expenses) are collectively in excess of Two Million Five Hundred Thirty Thousand
and no/100 Dollars ($2,530,000.00) as of the Closing Date. The amount of such
outstanding liabilities and obligations shall be evidenced by a balance sheet,
financial statement and other non-balance sheet certificate of Miva, prepared in
accordance with Miva's customary historical practices, which shall be delivered
by the chief financial officer of Miva to the chief financial officer of
FindWhat and each Miva Principal Stockholder no later than three business days
prior to the Closing Date (the "Preliminary Liabilities Statement").
(b) Miva shall prepare and deliver to FindWhat and each of the
Miva Principal Stockholders on the 30th calendar day following the Closing Date
an updated balance sheet, financial statement and other non-balance sheet
certificate of Miva, prepared by the chief financial officer of Miva in
accordance with Miva's customary historical practices (the "Post-Closing
Liabilities Statement").
(c) FindWhat may review the Post-Closing Liabilities Statement for
a period of up to 30 calendar days following the Closing Date. Miva shall
reasonably cooperate with FindWhat to permit FindWhat and its representatives to
conduct such review, including but not limited to providing FindWhat with
reasonable access to Miva's books and records used in
8
preparation of the Liabilities Statement. Within 30 calendar days after
FindWhat's receipt of the Post-Closing Liabilities Statement, FindWhat shall
deliver a Notice to each Miva Principal Stockholder advising of (i) FindWhat's
acceptance of the Post-Closing Liabilities Statement or (ii) FindWhat's
disagreement with the Post-Closing Liabilities Statement, specifying in
reasonable detail all disputed items and the basis therefore (the "Notice of
Disagreement").
(d) In the event of a disagreement, FindWhat and the Miva
Principal Stockholders will collectively use their reasonable best efforts to
resolve such disagreement. If such disagreement is so resolved within 15
calendar days after receipt by the Miva Principal Stockholders of the Notice of
Disagreement, then the Post-Closing Liabilities Statement will be modified as
mutually agreed by the parties and the Escrow Amount shall be accordingly
adjusted down, if applicable. If FindWhat and the Miva Principal Stockholders
are unable to resolve such disagreement during such 15-day period, then FindWhat
and Miva Principal Stockholders shall, within five business days after the end
of such 15-day period, mutually select a single, neutral arbitrator to review
the Post-Closing Liabilities Statement and the work papers used in connection
with the preparation thereof and to resolve those issues in dispute by analyzing
and reconciling such items and their underlying computations, without
independent review. Such arbitration shall be conducted as set forth in Section
9.7 of this Agreement. The decision of the arbitrator as to any modifications to
those items in dispute, if any, that should be made to the Post-Closing
Liabilities Statement shall be final and binding upon the parties and all of
such modifications shall be made to the Post-Closing Liabilities Statement and
the Escrow Amount shall be accordingly adjusted down, if applicable. FindWhat
and Miva shall jointly send a Notice to the Escrow Agent to disburse funds from
the Escrow Amount to FindWhat as a result of any adjustments to the Escrow
Amount pursuant to this Section 2.6. FindWhat or any Miva Principal Stockholder
may enter judgment upon the decision of the arbitrator in any court of competent
jurisdiction. The fees and expenses of the arbitrator shall be paid equally by
FindWhat, on the one hand, and the Miva Principal Stockholders, on the other
hand and, in the case of the latter, from the Escrow Amount.
2.7 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, shares of Miva Capital Stock outstanding immediately prior to the
Effective Time and held by a Miva Stockholder who has not voted in favor of the
Merger or consented thereto in writing and who has demanded appraisal for such
shares in accordance with Sections 1300-1312 of the CGCL, if such Sections
1300-1312 provide for appraisal rights for such shares in the Merger
("Dissenting Shares"), shall not be converted into the right to receive the
Merger Consideration as provided in Section 2.1(a) and shall instead be
converted into the right to receive payment of the appraised value of such
Dissenting Shares in exchange for the Dissenting Shares in accordance with the
provisions of Sections 1300-1312 unless and until such holder fails to perfect
or withdraws or otherwise loses such holder's right to appraisal and payment
under the CGCL. If, after the Effective Time, any such holder fails to perfect
or withdraws or loses such holder's right to appraisal, such Dissenting Shares
shall thereupon be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Consideration, if any, to which such
holder is entitled, without interest or dividends thereon, upon the surrender in
the manner provided in Section 2.3 of the Certificate(s) which formerly
represented shares of Miva Capital Stock. Miva shall give FindWhat prompt notice
of any demands received by Miva for appraisal of shares of Miva Capital Stock
and, prior to the Effective Time, FindWhat shall have the right to reasonably
participate with Miva in the handling of all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, Miva shall not, except
with the prior
9
written consent of FindWhat, not to be unreasonably withheld, make any payment
with respect to, or settle or offer to settle, any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FINDWHAT AND SUBCORP
In order to induce Miva and the Miva Principal Stockholders to enter into
this Agreement, FindWhat and Subcorp, jointly and severally, hereby represent
and warrant to Miva and the Miva Principal Stockholders that the statements
contained in this Article III are true, correct and complete, except as
otherwise expressly set forth in this Article III or in the disclosure schedule
to be delivered by FindWhat to Miva and incorporated herein by reference (as
dated the date hereof, and as may be amended and supplemented as of the Closing
Date, the "FindWhat Disclosure Schedule"), as of the date hereof and as of the
Closing Date unless another date is expressly stated below or in the FindWhat
Disclosure Schedule.
3.1 Organization and Standing. Each of FindWhat, Subcorp and each other
subsidiary of FindWhat is a corporation duly organized, validly existing and,
where applicable, in good standing under the laws of its state of incorporation
with full corporate power and authority to own, lease, use and operate its
properties and to conduct its business as and where now owned, leased, used,
operated and conducted. Each of FindWhat, Subcorp and each other subsidiary of
FindWhat is duly qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the property
it owns, leases or operates, requires it to so qualify, except where the failure
to be so qualified or in good standing in such jurisdiction would not have a
Material Adverse Effect on FindWhat and its subsidiaries taken as a whole.
FindWhat is not in default in the performance, observance or fulfillment of any
provision of the FindWhat Articles of Incorporation, as amended (the "FindWhat
Articles"), or the FindWhat Amended and Restated Bylaws, as amended, as in
effect on the date hereof (the "FindWhat Bylaws"), and Subcorp and each other
subsidiary of FindWhat is not in default in the performance, observance or
fulfillment of any provisions of its Certificate of Incorporation or Bylaws.
FindWhat has heretofore furnished to Miva complete and correct copies of the
FindWhat Articles and the FindWhat Bylaws and the Certificate of Incorporation
and Bylaws of Subcorp and each other subsidiary of FindWhat.
3.2 Corporate Power and Authority. Each of FindWhat and Subcorp has all
requisite corporate power and authority to enter into and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by
FindWhat and Subcorp have been duly authorized by all necessary corporate action
on the part of each of FindWhat and Subcorp. This Agreement has been duly
executed and delivered by each of FindWhat and Subcorp, and constitutes the
legal, valid and binding obligation of each of FindWhat and Subcorp enforceable
against each of them in accordance with its terms, except to the extent that
such enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles.
3.3 Conflicts; Consents and Approvals. Except as set forth in Section
3.3 in the FindWhat Disclosure Schedule, neither the execution and delivery of
this Agreement by FindWhat or Subcorp nor the consummation of the transactions
contemplated hereby or thereby will:
10
(a) conflict with, or result in a breach of any provision of, the
FindWhat Articles or the FindWhat Bylaws, the Subcorp Certificate of
Incorporation or Bylaws or the governing documents of any other subsidiary of
FindWhat;
(b) materially violate, or conflict with, or result in a material
breach of any provision of, or constitute a material default (or an event that,
with the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any party (with the giving of notice, the passage of
time or otherwise) to terminate, accelerate, modify or call a material default
under, or result in the creation of any material Encumbrance upon any of the
properties or assets of FindWhat or any of its subsidiaries under, any of the
terms, conditions or provisions of any material note, bond, mortgage, indenture,
deed of trust, license, contract, undertaking, agreement, lease or other
instrument or obligation to which FindWhat or any of its subsidiaries is a party
(for purposes of this Agreement, "Encumbrance" means any charge, claim,
mortgage, servitude, easement, right of way, equitable interest, lease or other
possessory interest, conditional sale or other title retention arrangement,
lien, pledge, security interest, preference, priority, right of first refusal or
similar restriction);
(c) materially violate any (i) order, writ, injunction, decree,
statute, ruling, assessment, or arbitration or award of any Governmental
Authority; or (ii) Applicable Laws relating to FindWhat or any of its
subsidiaries or their respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by FindWhat or any of its affiliates with, any third
party or any Governmental Authority, other than registrations or other actions
required under federal and state securities laws as are contemplated by this
Agreement.
3.4 Subcorp. Subcorp was formed solely for the purpose of engaging in
the transactions contemplated by this Agreement. Subcorp has not, and at the
Effective Time will not have, engaged in any activities or incurred any
obligations or liabilities, except the activities relating to the transactions
contemplated by this Agreement and obligations and liabilities incurred in
connection with those activities and with the transactions contemplated by this
Agreement.
3.5 Actions. There is no Action against FindWhat and Subcorp which
questions the validity of this Agreement or the Merger or any action taken or be
taken pursuant hereto or pursuant to the Merger. For purposes of this Agreement,
"Action" means any action, arbitration, audit, examination, suit, proceeding,
hearing or litigation, whether formal or informal, and whether public or
private, commenced, brought, conducted or heard by or before, pending or
threatened, or otherwise. Section 3.5 in the FindWhat Disclosure Schedule sets
forth each instance in which FindWhat or a subsidiary of FindWhat is subject to
any Action pending or, to the Knowledge of FindWhat, threatened against
FindWhat. Since January 1, 2002, neither FindWhat nor any of its subsidiaries
has been subject to any order, writ, injunction or decree relating to its method
of doing business or its relationship with past, existing or future users or
purchasers of any goods or services.
3.6 Financial Ability. FindWhat and Subcorp at the Effective Time will
have a sufficient number of FindWhat Common Shares and sufficient cash funds to
pay the Merger Consideration, and to pay all related fees and expenses.
11
3.7 Capitalization of FindWhat and Subcorp.
(a) The authorized capital stock of FindWhat consists of
50,000,000 common shares (the "FindWhat Common Stock") and 500,000 preferred
shares (the "FindWhat Preferred Stock"). At the date of this Agreement, (i)
20,422,803 shares of FindWhat Common Stock, par value of $.001, are issued and
outstanding, (ii) 7,000 shares of FindWhat Common Stock are held as treasury
stock (which does not include shares of FindWhat Common Stock reserved for
issuance as set forth in clause (iii) below), (iii) 1,766,839 shares of FindWhat
Common Stock are reserved for issuance upon the exercise or conversion of
options, warrants or convertible securities granted or issuable by FindWhat, not
including FindWhat's 1999 Stock Incentive Plan, (iv) 3,377,988 shares of
FindWhat Common Shares are reserved for issuance under FindWhat's 1999 Stock
Incentive Plan, and (v) no shares of Preferred Stock are issued and outstanding.
The FindWhat Common Stock and the FindWhat Preferred Stock are referred to
herein collectively as the "FindWhat Capital Stock." Each outstanding share of
FindWhat Capital Stock is duly authorized and validly issued, fully paid and
nonassessable, and has not been issued in violation of any preemptive or similar
rights. The issuance and sale of all of the shares of FindWhat Capital Stock
described in this Section 3.7(a) have been in compliance in all material
respects with applicable federal and state securities laws.
(b) Subcorp's authorized capital stock consists solely of 1,000
shares of Subcorp Common Stock, of which, as of the date hereof, 100 were issued
and outstanding and none were reserved for issuance. As of the date hereof, all
of the outstanding shares of Subcorp Common Stock are owned free and clear of
any Encumbrances by FindWhat.
3.8 Subsidiaries
(a) FindWhat does not own, directly or indirectly, any equity or
other ownership interest in any corporation, partnership, joint venture or other
entity or enterprise, except for the subsidiaries set forth in Section 3.8(a) in
the FindWhat Disclosure Schedule. Except as set forth in Section 3.8(a) in the
FindWhat Disclosure Schedule, FindWhat is not subject to any obligation or
requirement to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any subsidiary or any other person. Except
as set forth in Section 3.8(a) in the FindWhat Disclosure Schedule, FindWhat
owns, directly or indirectly, 100% of the capital stock (or other ownership
interests having by their terms ordinary voting power to elect a majority of
directors or others performing similar functions) of each of its subsidiaries.
Each of the outstanding shares of capital stock or other equity interests of the
subsidiaries of FindWhat is (in so far as is applicable) duly authorized,
validly issued, fully paid and nonassessable, and is owned, directly or
indirectly, by FindWhat free and clear of all Encumbrances.
(b) The following information for each subsidiary of FindWhat is
set forth in Section 3.8(b) in the FindWhat Disclosure Schedule, as applicable:
(i) its name and jurisdiction of incorporation or organization; (ii) its
authorized capital stock or capital; and (iii) the number of issued and
outstanding shares of capital stock or capital and the record (legal) or
beneficial owner(s) thereof. Other than as set forth in Schedule 3.8(b) in the
FindWhat Disclosure Schedule, the ledgers, articles of association, stock
records, or share certificates for each subsidiary are complete and up to date
and reflect the persons listed in Schedule 3.8(b) in the FindWhat Disclosure
Schedule as the record (legal) or beneficial owner(s) of the outstanding
12
shares of capital stock or capital of the relevant FindWhat Subsidiaries. Other
than as set forth in Section 3.8(b) in the FindWhat Disclosure Schedule, there
are no outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale or transfer of any securities of any subsidiary, nor are
there outstanding any securities that are convertible into or exchangeable for
any shares of capital stock of any subsidiary, and neither FindWhat nor any
subsidiary has any obligation of any kind to issue any additional securities of
any subsidiary or to pay for or repurchase any securities of any subsidiary or
any predecessor thereof.
3.9 Brokerage and Finders' Fees. Neither FindWhat nor any stockholder,
director, officer or employee thereof, has incurred or will incur on behalf of
FindWhat or any of its affiliates, any brokerage, finders' or similar fee in
connection with the transactions contemplated by this Agreement.
3.10 Board Recommendation; Required Vote. The board of directors of
FindWhat, at a meeting duly called and held, has by majority vote of those
directors present and constituting a quorum of the directors then in office
determined that this Agreement and the transactions contemplated hereby,
including the Merger, are fair to and in the best interests of the FindWhat
Stockholders. No vote of any holder of FindWhat Capital Stock is required under
the FindWhat Articles, FindWhat Bylaws or Applicable Law with respect to this
Agreement or the transactions contemplated hereby.
3.11 FindWhat SEC Documents. FindWhat has timely filed with the U.S.
Securities and Exchange Commission (the "Commission") all forms, reports,
schedules, statements and other documents (including exhibits and other
information incorporated therein) required to be filed by it since January 1,
2000 under the Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (such
documents, as supplemented and amended since the time of filing, collectively,
the "FindWhat SEC Documents"). No subsidiary of FindWhat is required to file any
form, report, registration statement, prospectus or other document with the
Commission. The FindWhat SEC Documents, including, without limitation, any
financial statements or schedules included in the FindWhat SEC Documents, at the
time filed (and, in the case of registration statements and proxy statements, on
the dates of effectiveness and the dates of mailing, respectively and, in the
case of any FindWhat SEC Document amended or superseded by a filing prior to the
date of this Agreement, then on the date of such amending or superseding
filing): (a) 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 light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be. The financial statements of FindWhat (including the related notes)
included in the FindWhat SEC Documents at the time filed (and, in the case of
registration statements and proxy statements, on the dates of effectiveness and
the dates of mailing, respectively, and, in the case of any FindWhat SEC
Document amended or superseded by a filing prior to the date of this Agreement,
then on the date of such amending or superseding filing) complied in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-QSB of
the
13
Commission), and fairly present (subject, in the case of unaudited statements,
to normal, recurring audit adjustments not material in amount) in all material
respects the consolidated financial position of FindWhat and its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Except as set forth in
Section 3.11 in the FindWhat Disclosure Schedule, from the date of incorporation
FindWhat has maintained its books of account in accordance in all material
respects with Applicable Law and all books and records are complete and correct
in all material respects, fairly and accurately reflect the income, expenses,
assets and liabilities of FindWhat and its subsidiaries in all material
respects, including the nature thereof and the transactions giving rise thereto,
and provide a fair and accurate basis for the preparation of the financial
statements of FindWhat included in the FindWhat SEC Documents.
3.12 Books and Records. Except as set forth in Section 3.12 in the
FindWhat Disclosure Schedule, from its date of incorporation FindWhat and its
subsidiaries have, in all material respects, maintained their minute books,
stock books, stock ledgers, quota registers and other local equivalents in
accordance in all material respects with Applicable Law, sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act,
including the maintenance of an adequate system of internal controls. The minute
books of FindWhat and its subsidiaries contain accurate and complete records of
all proceedings, consents and meetings held of, and corporate action taken by,
their stockholders, the boards of directors, and committees of the boards of
directors, and other governing bodies, as applicable, and no meeting of any such
stockholders, board of directors, committee or other governing body has been
held for which minutes have not been prepared and are not contained in such
minute books. The books of account of FindWhat and its subsidiaries are complete
and correct in all material respects, have been maintained in accordance with
Applicable Law, fairly and accurately reflect the income, expenses, assets and
liabilities of FindWhat and its subsidiaries, including the nature thereof and
the transactions giving rise thereto, and provide a fair and accurate basis for
the preparation of the FindWhat financial statements set forth in the FindWhat
SEC Documents. The signatures appearing on all documents contained in such books
of account are the true signatures of the persons purporting to have signed the
same, and copies thereof have been provided to Miva.
3.13 No Undisclosed Liabilities. Except (a) as and to the extent
disclosed or reserved against on the audited balance sheet of FindWhat as of
December 31, 2002, (b) as incurred after the date thereof in the ordinary course
of business consistent with past practice or (c) as set forth in Section 3.13 in
the FindWhat Disclosure Schedule, FindWhat and its subsidiaries do not have any
liabilities or obligations of any nature, whether known or unknown, absolute,
accrued, contingent, xxxxxx, inchoate or otherwise and whether due or to become
due, that, individually or in the aggregate, have or would reasonably be
expected to have a Material Adverse Effect on FindWhat and its subsidiaries
taken as a whole.
3.14 No Material Adverse Change. Except as set forth in Section 3.14 in
the FindWhat Disclosure Schedule, since December 31, 2002, there has been no
material adverse change in the assets, liabilities, results of operations,
business prospects, or financial condition of FindWhat or any event, occurrence
or development that would reasonably be expected to have a Material Adverse
Effect on FindWhat and its subsidiaries taken as a whole.
3.15 Disclosure. Nothing contained in this Agreement constitutes any
disclosure by FindWhat or Subcorp of any material non-public information. The
representations and
14
warranties contained in this Article III, taken as a whole, do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make such representations and warranties, in light of the
circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MIVA
In order to induce Subcorp and FindWhat to enter into this Agreement, Miva
hereby represents and warrants to FindWhat and Subcorp that the statements
contained in this Article IV are true, correct and complete, except as otherwise
expressly set forth in this Article IV or in the disclosure schedule to be
delivered by Miva to FindWhat and incorporated herein by reference (as dated the
date hereof, and as may be amended and supplemented as of the Closing Date, the
"Miva Disclosure Schedule"), as of the date hereof and as of the Closing Date
unless another date is expressly stated below or in the Miva Disclosure
Schedule.
4.1 Organization and Standing. Miva is a corporation duly organized and
validly existing under the laws of the State of California with full corporate
power and authority to own, lease, use and operate its properties and to conduct
its business as and where now owned, leased, used, operated and conducted. Miva
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the property
it owns, leases, uses, or operates requires it to so qualify, be licensed or be
in good standing. Miva is not in default in the performance, observance or
fulfillment of any provision of its Amended and Restated Certificate of
Incorporation (the "Miva Certificate") or its Bylaws (the "Miva Bylaws"), as in
effect on the date hereof. Miva has previously furnished to FindWhat complete
and correct copies of the Miva Certificate and the Miva Bylaws, each as in
effect on the date hereof. Listed in Section 4.1 in the Miva Disclosure Schedule
is each jurisdiction in which Miva is qualified or licensed to do business and
whether Miva is in good standing in each applicable jurisdiction as of the date
of the Agreement.
4.2 Subsidiaries. Except as set forth in Section 4.2(a) in the Miva
Disclosure Schedule, Miva does not own, directly or indirectly, any equity or
other ownership interest in any corporation, partnership, joint venture or other
entity or enterprise. Notwithstanding anything in this Agreement to the
contrary, Miva makes no representation or warranty under this Agreement with
respect to Miva Deutschland GmbH. Except as set forth in Section 4.2(a) in the
Miva Disclosure Schedule, Miva is not subject to any obligation or requirement
to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any person.
4.3 Corporate Power and Authority. Miva has all requisite corporate
power and authority to enter into and deliver this Agreement, to perform its
obligations hereunder and, subject to approval of the Merger and the
transactions contemplated hereby by Miva Stockholders, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby by Miva
have been duly authorized by all necessary corporate action on the part of Miva,
subject to approval of the Merger and the transactions contemplated hereby by
Miva's board of directors and the requisite Miva Stockholders. This Agreement
has been duly executed and delivered by Miva and constitutes the legal, valid
and binding obligation of Miva, enforceable against Miva in accordance with its
terms, except to the extent that such enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the
15
enforcement of creditors' rights generally or by general equitable principles.
Capitalization of Miva.
4.4 Capitalization of Miva.
(a) The authorized capital stock of Miva consists of 30,000,000
common shares (the "Miva Common Stock") and 5,000,000 preferred shares (the
"Miva Preferred Stock"). At the date of this Agreement, (i) 12,550,702 shares of
Miva Common Stock, no par value, are issued and outstanding, (ii) 4,730,870
shares of Miva Common Stock are reserved for issuance upon the exercise or
conversion of options, warrants or convertible securities granted or issuable by
Miva, (iii) 562,501 shares of Miva Preferred Stock designated Series A Preferred
Stock, no par value, are issued and outstanding and (iv) 800,000 shares of Miva
Preferred Stock designated Series B Preferred Stock, no par value, are issued
and outstanding. The Miva Common Stock and the Miva Preferred Stock are referred
to herein collectively as the "Miva Capital Stock." Each outstanding share of
Miva Capital Stock is duly authorized and validly issued, fully paid and
nonassessable, and has not been issued in material violation of any preemptive
or similar rights.
(b) As of the date hereof, other than as set forth in clause
(a)(ii) above or in Section 4.4(b) in the Miva Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale, repurchase or transfer by Miva of any securities of Miva,
nor are there outstanding any securities which are convertible into or
exchangeable for any shares of Miva Capital Stock, and Miva has no obligation of
any kind to issue any additional securities or to pay for or repurchase any
securities of Miva or any predecessor. Set forth in Section 4.4(b) in the Miva
Disclosure Schedule is an accurate and complete list of the names of all holders
of Miva Capital Stock, and the number and class of shares held by each such Miva
Stockholder. Set forth in Section 4.4(b) in the Miva Disclosure Schedule is an
accurate and complete list of the names of all holders of options, warrants or
convertible instruments to purchase Miva Capital Stock, the number of shares
issuable to each such holder upon exercise of such option or warrant, and the
exercise price and vesting schedule with respect thereto.
(c) Except as set forth in Section 4.4(c) in the Miva Disclosure
Schedule, Miva has not agreed to register any securities of Miva under the
Securities Act or under any applicable securities law or granted registration
rights to any person or entity (other than agreements with respect to
registration rights that are no longer in effect as of the date of this
Agreement); complete and correct copies of all such agreements have previously
been provided to FindWhat.
4.5 Conflicts; Consents and Approvals. Except as set forth in Section
4.5 in the Miva Disclosure Schedule, neither the execution and delivery of this
Agreement by Miva, nor the consummation of the transactions contemplated hereby
will:
(a) conflict with, or result in a breach of any provision of, the
Miva Certificate or the Miva Bylaws;
(b) materially violate or conflict with, or result in a material
breach of any provision of, or constitute a material default (or an event that,
with the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any party (with the giving of notice, the passage of
time or otherwise) to terminate, accelerate, modify or call a
16
material default under, or result in the creation of any material Encumbrance
upon any of the properties or assets of Miva under, any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, deed of trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which Miva is a party, including without limitation, any Contract;
(c) materially violate any (i) order, writ, injunction, decree,
ruling, assessment, arbitration, or award of any Governmental Authority or
arbitrator or (ii) Applicable Laws relating to Miva or any of its properties or
assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by Miva or any of its affiliates with, any third party or
any Governmental Authority, other than (i) approval of the Merger and the
transactions contemplated hereby by Miva Stockholders, (ii) registrations or
other actions required under federal and state securities laws as are
contemplated by this Agreement, (iii) the filing of the Delaware Merger
Documents with the Delaware Secretary of State, and (iv) the filing of the
California Merger Documents with the California Secretary of State.
4.6 Brokerage and Finders' Fees. Except as set forth in Section 4.6 in
the Miva Disclosure Schedule, neither Miva nor any stockholder, director,
officer or employee thereof, has incurred or will incur on behalf of Miva, any
brokerage, finders' or similar fee in connection with the transactions
contemplated by this Agreement.
4.7 Books and Records; Financial Statements.
(a) Except as set forth in Section 4.7(a) in the Miva Disclosure
Schedule, from its date of incorporation, the minute books, stock books and
stock ledgers of Miva (the "Books of Account") have been maintained, in all
material respects, in accordance with Applicable Law. To the Knowledge of Miva,
the signatures of Miva personnel appearing on all documents contained in such
Books of Account are the true signatures of the persons purporting to have
signed the same, and complete and correct copies of such Books of Account have
been provided to FindWhat.
(b) Attached to Section 4.7(b) in the Miva Disclosure Schedule, as
previously delivered to FindWhat, are complete and correct copies of the
unaudited balance sheet of Miva as of June 30, 2003 and the related statements
of income for the period ended June 30, 2003 (the "Miva Financial Statements").
To the Knowledge of Miva, the Miva Financial Statements fairly present, in all
material respects, the financial condition and results of operations, changes in
stockholders' equity and cash flow of Miva as of, and for the period ended, June
30, 2003.
4.8 Compliance with Law. Except as set forth in Section 4.8 in the Miva
Disclosure Schedule and except with respect to Applicable Laws discussed
elsewhere in this Article IV including without limitation those relating to
Taxes (as set forth in Section 4.11), employee benefit plans (as set forth in
Section 4.14), labor matters (as set forth in Section 4.16), Permits (as set
forth in Section 4.19), Environmental Laws (as set forth in Section 4.21),
product warranties (as set forth in Section 4.25), Data Protection Laws (as set
forth in Section 4.26) and the Foreign Corrupt Practices Act (as set forth in
Section 4.27), to the Knowledge of Miva, Miva is in compliance, in all material
respects, and at all times since June 30, 2003 has been in compliance, in all
material respects, with all Applicable Laws relating to Miva or its businesses
or properties, except where the failure to be in compliance with such Applicable
Laws
17
(individually or in the aggregate) would not reasonably be expected to have a
Material Adverse Effect on Miva, or where such noncompliance has been cured and
is reasonably expected to have no material impact on the future business or
operations of Miva. Miva has received no written notice of any pending
investigation or review by any Governmental Authority with respect to Miva and,
to the Knowledge of Miva, no such investigation or review is threatened, nor has
any Governmental Authority indicated in writing an intention to conduct the
same.
4.9 Actions. Section 4.9 in the Miva Disclosure Schedule sets forth each
instance in which Miva has received written notice of an Action pending and each
instances in which, to the Knowledge of Miva, any Action is threatened against
Miva. Since June 30, 2003, Miva has not received written notice of Miva being
subject to any order, writ, injunction or decree relating to its method of doing
business or its relationship with past, existing or future users or purchasers
of any goods or services.
4.10 No Material Adverse Change. Except as set forth in Section 4.10 in
the Miva Disclosure Schedule, since June 30, 2003, to the Knowledge of Miva
there has been no material adverse change in the assets, liabilities, results of
operations, business prospects, or financial condition of Miva or any event,
occurrence or development that would reasonably be expected to have a Material
Adverse Effect on Miva.
4.11 Taxes.
(a) Except as set forth in Section 4.11(a) in the Miva Disclosure
Schedule:
(i) Miva has filed all Tax Returns (including, but not
limited to, those filed on a consolidated, combined or unitary basis) required
to have been filed by Miva prior to the date hereof;
(ii) To the Knowledge of Miva, all such Tax Returns referred
to in clause (a)(i) above were true and correct (except for such inaccuracies
which are individually, and in the aggregate, not material) and Miva has paid
or, prior to the Effective Time, will pay within the time and manner prescribed
by Applicable Law, all Taxes, interest and penalties required to be paid in
respect of the periods covered by such Tax Returns due to any federal, state,
foreign, local or other Tax authority;
(iii) Miva has no liability for Taxes that is materially in
excess of the amount reserved on the Miva Financial Statements;
(iv) Miva has not requested or filed any document having the
effect of causing any extension of time within which to file any returns in
respect of any fiscal year which have not since been filed;
(v) Miva has not received written notice of any currently
due and payable deficiency for any material Tax from any Tax authority;
(vi) Miva has not received written notice that it is the
subject of any currently ongoing Tax audit;
(vii) As of the date of this Agreement, Miva has not received
written notice from any Tax authority of any pending requests for waivers of the
time to assess any material Tax, other than those made in the ordinary course
and for which payment has been made;
18
(viii) Miva has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency;
(ix) There are no recorded Encumbrances with respect to Taxes
upon any of the properties or assets, real or personal, tangible or intangible
of Miva (other than liens for Taxes not yet due and/or delinquent); and
(x) No written claim has ever been received by Miva from a
Governmental Authority in a jurisdiction where Miva files Tax Returns that Miva
is or may be subject to taxation by that jurisdiction.
(b) Miva is not obligated by any Contract, agreement or other
arrangement to indemnify any other person with respect to material Taxes. Miva
is not now or has ever been a party to or bound by any agreement or arrangement
(whether or not written and including, without limitation, any arrangement
required or permitted by law) binding Miva that (i) requires Miva to make any
Tax payment to or for the account of any other person, (ii) affords any other
person the benefit of any net operating loss, net capital loss, investment Tax
credit, foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes (including, without limitation, deductions
and credits related to alternative minimum Taxes) of Miva, or (iii) requires or
permits the transfer or assignment of income, revenues, receipts or gains to
Miva, from any other person.
(c) Except as set forth in Section 4.11(c) in the Miva Disclosure
Schedule, Miva has withheld and paid over all material Taxes required to have
been withheld and paid over in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party.
(d) Miva has not agreed to make, or has received any written
notice from the Internal Revenue Service proposing that Miva make, any
adjustments pursuant to Sections 263A or 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by Miva, and Miva has no application pending with any
Governmental Authority requesting permission for any changes in accounting
methods that relate to the business or operations of Miva.
(e) Miva has not requested any private letter ruling of the
Internal Revenue Service or comparable ruling of other Governmental Authorities.
(f) The Tax Returns of Miva for the years ended 2002, 2001 and
2000, complete and correct copies of which are attached in Section 4.11(f) in
the Miva Disclosure Schedule, list all deductions giving rise to any
current-year Tax loss set forth on the applicable Tax Returns and the amount of
each such Tax loss in each jurisdiction.
(g) Except for the group for which Miva is presently a member, if
any, Miva has never been a member of an affiliated group of corporations, within
the meaning of Section 1504 of the Code, other than as a common parent
corporation, within the meaning of Section 1504 of the Code (or any similar
provision of state or local law), except where Miva was the common parent
corporation of such affiliated group.
(h) To the Knowledge of Miva, Miva has no liability for the Taxes
of any person other than any of Miva under Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or successor,
by contract or otherwise.
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(i) All material elections with respect to the Tax Returns
are reflected in the Tax Returns.
(j) Miva is not or has not been, a United States real
property holding corporation (as defined in section 897(c)(2) of the Code)
during the applicable period specified in section 897(c)(1)(A)(ii) of the Code.
(k) Miva is nor or has nor been a party to any joint
venture, partnership, or other agreement that would be treated as a partnership
for U.S. federal income tax purposes.
(l) Miva has not participated in an international boycott as
defined in Section 999 of the Code (or any similar provision of state, local or
foreign law).
(m) As used in this Agreement, "Tax Returns" means all
federal, state, local and foreign Tax returns, declarations, schedules,
information returns, reports and forms, and any amendments to any of the
foregoing relating to Taxes, required to be filed with any Governmental
Authority responsible for the imposition or collection of Taxes.
(n) As used in this Agreement, "Tax" or "Taxes" means (i)
any federal, state, county, local or foreign taxes, charges, fees, levies or
other assessments, including all net income, gross income, premium, sales and
use, ad valorem, transfer, gains, profit, windfall profits, excise, franchise,
real and personal property, gross receipts, capital stock, production, business
and occupation, employment, disability, payroll, license, estimated, customs
duties, severance or withholding taxes, other taxes or similar charges of any
kind imposed by a Governmental Authority and includes any interest and penalties
(civil or criminal) on or additions to any such taxes or in respect of a failure
to comply with any requirement relating to any Tax Return and any expenses
incurred in connection with the determination, settlement or litigation of any
tax liability.
4.12 Intellectual Property.
(a) Set forth in Section 4.12(a) in the Miva Disclosure Schedule
is an accurate and complete list of (i) all material foreign and domestic
patents, patent applications, invention disclosures, trademarks, service marks,
trade names, internet domain names (and any registrations or applications for
registration for any of the foregoing trademarks, service marks, trade names and
internet domain names) and all material copyright applications and registrations
and all other material Intellectual Property rights owned or used by Miva, (ii)
other than as set forth in Section 4.15 in the Miva Disclosure Schedule, all
material customer agreements with respect to which Miva received gross revenue
of at least US$10,000 during the 12-month period from August 1, 2002 to July 31,
2003 and (ii) other than as set forth in Section 4.15 in the Miva Disclosure
Schedule, all material non-customer agreements to which Miva is a party which
concern any of its material Intellectual Property.
(b) Except as set forth in Section 4.12(b) in the Miva Disclosure
Schedule:
(i) Miva owns, free and clear of any material Encumbrances,
or has sufficient rights to, the Intellectual Property;
(ii) No written claim of invalidity or ownership with respect
to the Intellectual Property has been received by Miva from any third party and,
to the Knowledge of Miva, no Intellectual Property is the subject of any pending
or threatened Action;
20
(iii) No person or entity has asserted in a writing received
by Miva that, with respect to any Intellectual Property, Miva or any licensee of
Miva is infringing or has infringed any domestic or foreign patent, trademark,
service xxxx, trade name, or copyright or design right, or has misappropriated
or improperly used or disclosed any trade secret, confidential information or
know-how;
(iv) To the Knowledge of Miva, all material fees, annuities,
royalties, honoraria and other payments which are due from Miva on or before the
date of this Agreement for any of the Intellectual Property or under any
agreement related to the Intellectual Property have been paid;
(v) To the Knowledge of Miva, except as limited by the terms
of any license relating thereto, the making, using, selling, manufacturing,
marketing, licensing, reproduction, distribution, disposal, modification,
display, transmission or publishing of any process, machine, manufacture,
composition of matter, or material related to any part of the Intellectual
Property, does not and will not infringe in any material respect any domestic or
foreign patent, trademark, service xxxx, trade name, copyright, moral right or
other intellectual property right of any third party, and does not and will not
involve the misappropriation or improper use or disclosure of any trade secrets,
confidential information or know-how of any third party;
(vi) To the Knowledge of Miva, no unexpired foreign or
domestic patents or patent applications exist that are adverse to the material
interests of Miva;
(vii) To the Knowledge of Miva, there exists no (A) prior act
of Miva or any third party that would void or invalidate any of the Intellectual
Property or (B) conduct or use by Miva or any third party that would void or
invalidate any of the Intellectual Property; and
(viii) To the Knowledge of Miva, the execution, delivery and
performance of this Agreement by Miva, and the consummation of the transactions
contemplated hereby, will not materially breach, violate or conflict with any
instrument or agreement relating to the Intellectual Property to which Miva is a
party, will not cause the forfeiture or termination or give rise to a right of
forfeiture or termination of any of the Intellectual Property or in any way
impair the right of Miva, subject to Section 4.13(b)(v), to make, use, sell,
license or dispose of, distribute, modify, display or transmit or to bring any
action for the infringement of, any Intellectual Property.
(c) Miva has taken commercially reasonable steps to safeguard and
maintain the secrecy and confidentiality of (i) all material trade secrets and
(ii) to the extent required by Applicable Law, material patent applications and
their related inventions prior to the issuance of a patent registration
contained in the Intellectual Property.
(d) As used in this Agreement, "Intellectual Property" means all
material domestic or foreign patents, patent applications, inventions (whether
or not patentable), processes, products, technologies, discoveries,
copyrightable and copyrighted works, apparatus, trade secrets, trademarks,
logos, know-how, internet domain names, copyrights, trademark registrations and
applications, service marks, service xxxx registrations and applications, trade
names, trade dress, copyright registrations, customer lists, marketing and
customer information, licenses, technical information (whether confidential or
otherwise), software, and all documentation thereof, in each case that is owned
by, or licensed to Miva (other than third-party
21
"click wrap or "shrink wrap" software licenses, as to which Miva makes no
representations or warranties) on the date hereof.
4.13 Title to Assets and Properties. Except as set forth in Section 4.13
in the Miva Disclosure Schedule, Miva has good, absolute, marketable title to,
or a valid leasehold interest in, and unrestricted possession (other than under
the terms of relevant leases) of, the assets and properties used by Miva,
located on its premises or shown on the Miva Financial Statements, free and
clear of all Encumbrances, except for assets and properties disposed of in the
ordinary course of business since June 30, 2003.
4.14 Employee Benefit Plans.
(a) Except as set forth in Section 4.14(a) in the Miva Disclosure
Schedule, with respect to each Miva Plan, Miva has made available to FindWhat a
substantially correct and complete copy of the following (where applicable): (i)
each writing constituting a part of such Miva Plan, including without limitation
all plan documents, benefit schedules, trust agreements, and insurance contracts
and other funding vehicles; (ii) the three most recently filed Annual Reports
(Form 5500 Series) and accompanying schedules, if any; (iii) the current summary
plan description, if any; (iv) the most recent annual financial report, if any;
and (v) the most recent determination letter from the Internal Revenue Service,
if any.
(b) The Internal Revenue Service has issued a favorable
determination letter with respect to each Miva Plan that is intended to be a
Qualified Plan and, to the Knowledge of Miva, there are no existing
circumstances or any events that have occurred that could adversely affect the
qualified status of any Miva Plan that is a Qualified Plan or the related trust.
(c) All material contributions required to be made by Miva to any
Miva Plan by Applicable Laws or by any Miva Plan document or other contractual
undertaking, and all material premiums due or payable with respect to insurance
policies funding any Miva Plan, for any period through the date hereof, have
been made or paid in full.
(d) Except as set forth in Section 4.14(d) in the Miva Disclosure
Schedule, to the Knowledge of Miva, each Miva Plan has been maintained and
administered in material compliance with its terms and Applicable Law, including
ERISA and the Code. Except as set forth in Section 4.14(d) in the Miva
Disclosure Schedule, to the Knowledge of Miva there is not now, and there are no
existing circumstances that could reasonably be expected to give rise to, any
requirement for the posting of security with respect to a Miva Plan or the
imposition of any Encumbrance on the assets of Miva under ERISA or the Code with
respect to a Miva Plan.
(e) Miva has not, at any time within six years before the date
hereof, maintained, contributed to or been obligated to contribute to any
Multiemployer Plan or Multiple Employer Plan or any plan covered by Section 412
of the Code or Title IV of ERISA.
(f) To the Knowledge of Miva, there does not now exist, and there
are no existing circumstances that could reasonably be expected to result in,
any material Controlled Group Liability that would be a liability of Miva
following the Closing. Without limiting the generality of the foregoing, Miva
has not engaged in any transaction described in Section 4069 or Section 4204 of
ERISA.
(g) Except for health continuation coverage as required by Section
4980B of the Code or Part 6 of Title I of ERISA (or other Applicable Law
pertaining to COBRA or Cal-COBRA) and except as set forth in Section 4.14(h) in
the Miva Disclosure Schedule, to the
22
Knowledge of Miva, Miva has no material liability for life, health, medical or
other welfare benefits to former employees or beneficiaries or dependents
thereof and there has been no communication to employees of Miva that promises
or guarantees such employees retiree health or life insurance benefits or other
retiree death benefits.
(h) Except as set forth in Section 4.14(h) in the Miva Disclosure
Schedule, to the Knowledge of Miva, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in, cause the accelerated vesting or delivery of, or increase the amount
or value of, any payment or benefit to any employee, officer, director or
consultant of Miva. Without limiting the generality of the foregoing, no amount
paid or payable by Miva in connection with the transactions contemplated hereby,
either solely as a result thereof or as a result of such transactions in
conjunction with any other events, will be an "excess parachute payment" within
the meaning of Section 280G of the Code.
(i) Except as disclosed in Section 4.14(i) in the Miva Disclosure
Schedule, Miva has not received written notice of any pending, and to the
Knowledge of Miva there are no threatened, claims (other than claims for
benefits in the ordinary course), lawsuits or arbitrations that have been
asserted or instituted against the Miva Plans, any fiduciaries thereof with
respect to their duties to the Miva Plans, or the assets of any of the trusts
under any of the Miva Plans that would reasonably be expected to result in any
material liability of Miva to the Pension Benefit Guaranty Corporation, the US
Department of Treasury, the US Department of Labor or any Multiemployer Plan.
(j) Section 4.14(j) in the Miva Disclosure Schedule sets forth the
names of all directors and officers of Miva, the names of each employee of Miva,
and the total current salary, bonus eligibility, and fringe benefits and
perquisites that each such director, officer and employee is expected to receive
in the fiscal year ending December 31, 2003 based on current compensation
arrangements. Section 4.14(j) in the Miva Disclosure Schedule also sets forth
the liability of Miva for deferred compensation under any deferred compensation
plan, excess plan or similar arrangement (other than pursuant to Qualified
Plans) to each such director, officer and employee, together with the value, as
of the date specified thereon, of the assets (if any) set aside in any grantor
trust(s) to fund such liabilities. Except as disclosed in Section 4.14(j) in the
Miva Disclosure Schedule, there are no other material forms of compensation paid
to any such director, officer or employee of Miva. Except as set forth in
Section 4.14(j) in the Miva Disclosure Schedule, no officer, director, or
employee of Miva, or any immediate family member of any of the foregoing,
provides or causes to be provided to Miva any material assets, services or
facilities and Miva does not provide or cause to be provided to any such
officer, director, or employee, or any immediate family member of any of the
foregoing, any material assets, services or facilities.
(k) As used in this Agreement, the following terms have the
meanings given below:
(i) "Benefit Obligation" means Miva's aggregate financial
liability to provide all current, projected and contingent benefits to an
employee, or such employee's beneficiaries or dependents, as the case may be,
under the terms of any of the Miva Plans, regardless of whether an amount less
than such aggregate financial liability is reflected on Miva's financial
statements under applicable accounting rules.
23
(ii) "Controlled Group Liability" means any and all
liabilities (i) under Title IV of ERISA, (ii) under section 302 of ERISA, (iii)
under sections 412 and 4971 of the Code, (iv) resulting from a violation of the
continuation coverage requirements of section 601 et seq. of ERISA and section
4980B of the Code or the group health plan requirements of Section 701 et seq.
of ERISA, and (v) under corresponding or similar provisions of foreign laws or
regulations, in each case other than pursuant to the Miva Plans.
(iii) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(iv) "ERISA Affiliate" means, with respect to any entity,
trade or business, any other entity, trade or business that is a member of a
group described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes the first entity, trade or business, or that
is a member of the same "controlled group" as the first entity, trade or
business pursuant to Section 4001(a)(14) of ERISA. As of the date hereof, Miva
has no ERISA Affiliates.
(v) "Miva Employee" means a person who is, as of the
Effective Time, an active or inactive employee of Miva.
(vi) "Miva Plans" means all employee benefit plans, programs
and other arrangements providing benefits to any current or former employee,
officer, director or consultant (or any beneficiary or dependent thereof) in
respect of services provided to Miva, and whether covering one person or more
than one person, sponsored or maintained by Miva or to which Miva contributes
(or is obligated to contribute) or has any liability. Without limiting the
generality of the foregoing, the term "Miva Plans" includes each "employee
pension benefit plan" as defined in Section 3(2) of ERISA, each "employee
welfare benefit plan" as defined in Section 3(1) of ERISA, and each agreement,
plan, program, fund, policy, contract or arrangement (whether written or
unwritten) providing compensation, benefits, pension, retirement,
superannuation, profit sharing, stock bonus, stock option, stock purchase,
phantom or stock equivalent, bonus, thirteenth month, incentive, deferred
compensation, hospitalization, medical, dental, vision, vacation, life
insurance, death benefit, sick pay, disability, severance, termination,
indemnity, redundancy pay, educational assistance, holiday pay, housing
assistance, moving expense reimbursement, fringe benefit or similar employee
benefits covering any employee, former employee, or the beneficiaries and
dependents of any employee or former employee, regardless of whether it is
mandated under local law, voluntary, private, funded, unfunded, financed by the
purchase of insurance, contributory or non-contributory.
(vii) "Multiemployer Plan" means a "multiemployer plan" within
the meaning of Section 4001(a)(3) of ERISA. As of the date hereof, Miva has no
Multiemployer Plans.
(viii) "Multiple Employer Plan" means a plan that has two or
more contributing sponsors at least two of whom are not under "common control"
within the meaning of Section 4063 of ERISA. As of the date hereof, Miva has no
Multiple Employer Plans.
(ix) "Qualified Plan" means a "qualified plan" within the
meaning of Section 401(a) of the Code.
4.15 Contracts.
(a) Section 4.15(a) in the Miva Disclosure Schedule lists
substantially each, and Miva has provided FindWhat with materially correct and
complete copies or summaries of substantially each, material Contract
("Contract" means all written or oral contracts, agreements,
24
guarantees, licenses and executory commitments, other than Miva Plans and real
property leases) to which Miva is a party as of the date hereof and which falls
within any one or more of the following categories:
(i) Contracts not entered into in the ordinary course of
Miva's business and that involve expenditures or receipts by Miva of US$10,000
per month;
(ii) joint venture, partnership, strategic alliances and
other Contracts (however named) involving a sharing of profits, losses, costs or
liabilities;
(iii) leases for equipment or other personal property assets;
(iv) Contracts with respect to which Miva received gross
revenue of at least US$10,000 during the 12-month period from August 1, 2002 to
July 31, 2003 and which are either service contracts (including without
limitation outsourcing agreements, application service provider agreements,
hosting agreements and data center management agreements) and/or software
license agreements;
(v) Contracts containing covenants purporting to limit the
freedom of Miva to compete in any line of business or in any geographic area or
to hire any individual or group of individuals (including without limitation any
software license agreements that authorize or permit Miva to use the applicable
software only in particular business lines, languages or geographic areas);
(vi) Contracts providing for the settlement of disputed
claims (including disputed dollar amounts) with third parties;
(vii) powers of attorney that are currently outstanding;
(viii) Contracts entered into other than in the ordinary
course of business that contain or provide for an express undertaking to be
responsible for consequential damages;
(ix) Contracts which contain minimum purchase conditions in
excess of US$10,000 or requirements or other terms that restrict or limit the
purchasing relationships of Miva;
(x) Contracts relating to any outstanding commitment for
capital expenditures in excess of US$25,000;
(xi) Contracts with any labor organization, union, employee
representative or group of employees;
(xii) indentures, mortgages, promissory notes, loan
agreements, guarantees of borrowed money, letters of credit or other agreements,
instruments or commitments for the borrowing or the lending of money;
(xiii) Contracts providing for the creation of any Encumbrance
upon any of the assets of Miva;
(xiv) Contracts involving annual revenues to the business of
Miva in excess of 2.5% of Miva's annual revenues during any of their respective
past two fiscal years;
(xv) Contracts providing for "earn-outs", "savings
guarantees", "performance guarantees", or other contingent payments involving
more than US$10,000 per year or US$50,000 over the term of the Contract;
25
(xvi) Contracts with or for the benefit of (A) any corporate
affiliate of Miva or (B) any immediate family member of any shareholder,
director or officer of Miva;
(xvii) Contracts involving payments by Miva of more than
US$5,000 in any one month during the past 6 months;
(xviii) to the Knowledge of Miva, any Contracts that purport
to limit the ability of the directors, officers, agents or employees of Miva to
engage in or continue any conduct, activity or practice relating to the business
of Miva, or assign to Miva any rights to any invention, improvement or
discovery;
(xix) any cost-sharing, tax-sharing or transfer pricing
agreements between Miva and any related or unrelated party; and
(xx) each amendment, supplement and modification with respect
to any of the foregoing.
(b) Except as set forth in Section 4.15(b) in the Miva
Disclosure Schedule, to the Knowledge of Miva, all such Contracts are valid and
binding obligations of Miva and each other party thereto.
(c) Except as set forth in Section 4.15(c) in the Miva
Disclosure Schedule, neither Miva nor, to the Knowledge of Miva, any other party
thereto, is in material violation of or in material default in respect of, nor
to the Knowledge of Miva has there occurred an event or condition which with the
passage of time or giving of notice (or both) would constitute a material
default under or permit the termination of, any such Contract.
(d) As of the date hereof, except as set forth in Section
4.15(d) in the Miva Disclosure Schedule, Miva is not engaged in any
renegotiation of and, to the Knowledge of Miva, neither Miva nor any third party
thereto has any outstanding rights to renegotiate, any material amounts paid or
payable under such Contracts.
4.16 Labor Matters.
(a) Miva is not a party to any collective bargaining
agreement or labor union contract and is not required to consult or negotiate
with any local works council, union, labor board or any Governmental Authority
concerning the transactions contemplated by the Agreement.
(b) Set forth in Section 4.16(b) in the Miva Disclosure
Schedule is a list of each agreement to which Miva is a party pursuant to which
any individual employed by Miva or otherwise performing services primarily for
Miva receives compensation in excess of $20,000 per annum, and Miva has
furnished or made available to FindWhat substantially complete and correct
copies of any such agreements in writing. Except as set forth in Section 4.16(b)
in the Miva Disclosure Schedule, Miva has not materially breached or otherwise
materially failed to comply with any provisions of any agreement set forth
therein and, to the Knowledge of Miva, there are no grievances outstanding
thereunder. There is no labor strike, dispute or stoppage pending or, to the
Knowledge of Miva, threatened against Miva. To the Knowledge of Miva, no
campaign or other attempt for recognition is pending by any labor organization
or employee with respect to employees of Miva.
(c) Except as set forth in Section 4.16(c) in the Miva
Disclosure Schedule, to the Knowledge of Miva, Miva is in material compliance
with Applicable Laws and their own
26
policies respecting employment and employment practices, terms and conditions of
employment, wages and hours, equal opportunity, equal pay, civil rights, labor
relations, immigration, occupational health and safety, and payroll and wage
taxes.
(d) As of the date of this Agreement and except as set forth
in Section 4.16(d) in the Miva Disclosure Schedule or as required by Applicable
Law, (i) Miva is not a party to any outstanding employment agreements or
contracts with officers, managers and directors (or foreign equivalents) or Miva
Employees that are not terminable at will, or that provide for the payment of
any bonus or commission; and (ii) Miva is not a party to any agreement, policy
or practice that requires it to pay termination or severance pay to salaried,
non-exempt or hourly Miva Employees.
4.17 Undisclosed Liabilities. To the Knowledge of Miva, Miva has no
liabilities or obligations of any nature, whether absolute, accrued, contingent,
xxxxxx, inchoate or otherwise and whether due or to become due, that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Miva, other than (a) liabilities disclosed to
FindWhat in the Miva Financial Statements, (b) liabilities set forth in the Miva
Disclosure Schedule, and (c) liabilities incurred or accrued after the date
hereof in the ordinary course of business consistent with past practice and not
prohibited by this Agreement.
4.18 Operation of Miva's Business; Relationships.
(a) Except as set forth in Section 4.18(a) in the Miva Disclosure
Schedule, since June 30, 2003, Miva has not, except in the ordinary course of
business consistent with past practice, engaged in any transaction which, if
done after execution of this Agreement, would violate in any material respects
Section 5.3(b).
(b) Except as set forth in Section 4.18(b) in the Miva Disclosure
Schedule, since June 30, 2003, no material customer of Miva has indicated to
Miva in writing, or to the Knowledge of Miva verbally, that such customer will
stop or materially decrease purchasing materials, products or services from Miva
and no material supplier of Miva has indicated to Miva in writing, or to the
Knowledge of Miva verbally, that such supplier will stop or materially decrease
the supply of materials, products or services to Miva.
4.19 Permits. To the Knowledge of Miva, Miva is in possession of all
material licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders legally required in each jurisdiction to own,
lease and operate its properties and to carry on its business as currently
conducted, including under any applicable Environmental Laws (collectively, the
"Permits"). Miva has not received written notice of any Action pending, and to
the Knowledge of Miva no Action is threatened, regarding any of the Permits
which, if successful, would reasonably be expected to have a Material Adverse
Effect on Miva. Miva is not in conflict with, or in default or violation of, any
of the Permits, except for any such conflicts, defaults or violations which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Miva.
4.20 Real Property.
(a) Miva does not own any real property.
(b) Section 4.20(b) in the Miva Disclosure Schedule lists the only
lease for real property to which Miva is a party (the "Lease"). Miva does not
sublease any real property.
27
Miva has delivered to FindWhat a substantially correct and complete copy of the
Lease. With respect to the Lease:
(i) the Lease is legal, valid, binding, enforceable, and in
full force and effect with respect to Miva, and, to the Knowledge of Miva, with
respect to the other party thereto, the Lease is legal, binding, enforceable,
and in full force and effect;
(ii) to the Knowledge of Miva, no party to the Lease is in
breach or default thereunder, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(iii) Miva has not, and to the Knowledge of Miva no other
party thereto has, repudiated any provision thereof;
(iv) Miva has not received written notice of any disputes
with respect thereto, and Miva is not party to any oral agreements or
forbearance programs in effect as to the Lease;
(v) Miva has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold; and
(vi) to the Knowledge of Miva, the facility leased under the
Lease has received all approvals of Governmental Authorities (including Permits)
required to be received by Miva in connection with the operation thereof and
have been operated and maintained by Miva in accordance with Applicable Laws.
4.21 Environmental Matters. Except for matters disclosed in Section 4.21
in the Miva Disclosure Schedule:
(a) To the Knowledge of Miva, the properties, operations and
activities of Miva are in compliance in all material respects with all
applicable Environmental Laws and all past noncompliance of Miva with any
applicable Environmental Laws has been resolved without any pending, ongoing or
future obligation, cost or liability;
(b) Miva has not received any written notice of any pending Action
by or before any court or Governmental Authority under any Environmental Law,
and to the Knowledge of Miva no such Action is pending or threatened and there
is no basis for any present or future Action against it that may reasonably be
likely to lead to any liability;
(c) to the Knowledge of Miva, there has been no release, discharge
or emission of any Hazardous Material into the environment in material violation
of applicable Environmental Laws by Miva in connection with its currently leased
or formerly leased properties or operations that would be reasonably likely to
have a Material Adverse Effect on Miva; and
(d) to the Knowledge of Miva, there has been no material exposure
in violation of applicable Environmental Laws of any person or property to any
Hazardous Material in connection with the properties, operations and activities
of Miva that would be reasonably likely to have a Material Adverse Effect on
Miva.
(e) For purposes of this Agreement, the term "Environmental Laws"
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface
28
or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or
demand letters, injunctions, judgments, licenses, notices, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
(f) For purposes of this Agreement, the term "Hazardous Materials"
means chemicals, pollutants, contaminants, or industrial, toxic or hazardous
substances or wastes as those terms are defined or identified in any
Environmental Law or regulated by any Permit required by applicable
Environmental Law, including but not limited to petroleum products or
by-products, asbestos, and polychlorinated materials.
4.22 Board Recommendation. The board of directors of Miva, at a meeting
duly called and held, has by majority vote of those directors present, whether
in person, telephonically or by proxy, and constituting a quorum of the
directors then in office, (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the Miva Stockholders, and (ii) resolved to recommend to the
holders of the shares of Miva Capital Stock that such holders approve this
Agreement and the transactions contemplated herein, including the Merger (the
"Miva Board Recommendation").
4.23 Accounts Receivable. Except as set forth in Section 4.23 in the Miva
Disclosure Schedule, the accounts and notes receivable reflected in the Miva
Financial Statements (i) arose from bona fide sales transactions in the ordinary
course of business and are payable on ordinary trade terms, (ii) to the
Knowledge of Miva are legal, valid and binding obligations of the respective
debtors enforceable in accordance with their terms, (iii) are not subject to
valid set-off or counterclaim, and (iv) are collectible in the ordinary course
of business consistent with past practice in the aggregate recorded amounts
thereof.
4.24 Insurance. Section 4.24 in the Miva Disclosure Schedule lists all
insurance policies pursuant to which Miva is presently insured and during each
of the past three calendar years has been insured (each, an "Insurance Policy"
and, collectively, the "Insurance Policies"). To the Knowledge of Miva, each
Insurance Policy is, in all material respects, in full force and effect in
accordance with its terms and all premiums reflected on invoices received by
Miva to date have been paid in full. Except as set forth in Section 4.24 in the
Miva Disclosure Schedule, no written notice of cancellation with respect to any
Insurance Policy has been received by Miva with respect and, to the Knowledge of
Miva, there is no existing default or event which, with the giving of notice or
lapse of time or both, would constitute a default thereunder. Miva is a "named
insured" or an "insured" under each Insurance Policy. Except as set forth in
Section 4.24 in the Miva Disclosure Schedule, Miva has not been refused any
insurance, nor has the coverage of Miva been limited, by any insurance carrier
to which it has applied for insurance or with which it has carried insurance
during the past three years. To the Knowledge of Miva, the Insurance Policies
are of the type and in the amounts that would reasonably be expected to be
maintained in the ordinary course of business for similarly situated companies
in the same or a similar industry. Set forth in Section 4.24 in the Miva
Disclosure Schedule is (a) with respect to each Policy under which the annual
premium amount is fixed, the current amount of such premium, and (b) with
respect to each Policy under which the periodic or annual premium amount is
variable, the amount of the most recent periodic payment made and the
calculation formula with respect to such premium.
29
4.25 Product Warranty. To the Knowledge of Miva, within the three years
prior to the date hereof: (a) each product sold or delivered by Miva has been in
material conformity with any applicable express and implied warranties, (b) Miva
has no current liability for damages in connection with any such warranty (and
there is no basis for any present or future Action against it that may
reasonably be likely to lead to any liability) and (c) no product sold or
delivered by Miva is subject to any guaranty, warranty, or other indemnity
beyond the applicable standard terms and conditions of sale given by Miva, if
any, or as required by Applicable Law.
4.26 Data Protection Matters.
(a) Miva has not received written notice of any existing or
pending, and to the Knowledge of Miva there is no threatened, Action against
Miva by or before any court or Governmental Authority under any Data Protection
Law. Miva has never instituted a policy with respect to, or taken steps to
comply with or protect Personal Data as required under, any Data Protection Law.
(b) As used in this Agreement, the term "Data Protection Laws"
means all federal, state, local or foreign laws, statutes, orders, rules,
regulations, policies or guidelines, or judgments, decisions or orders entered
by any Governmental Authority, relating to Personal Data.
(c) As used in this Agreement, the term "Personal Data" means any
and all information that Miva maintains or otherwise processes that relates to
an identified or identifiable natural person, including employees, stockholders,
customers, customers of customers, vendors, contractors, and other business
partners of Miva, and any employees of or contractors to any of the foregoing.
4.27 Foreign Corrupt Practices Act.
(a) Miva has not, to secure any improper advantage in order to
obtain or retain business, directly or to the Knowledge of Miva indirectly
offered, paid, given, or promised to pay, or authorized the payment of, any
money, offer, gift, or other thing of value, to:
(i) an officer or employee of any Governmental Authority, or
any person acting in an official capacity for or on behalf of any Governmental
Authority;
(ii) any political party or official thereof;
(iii) any candidate for political or political party office;
or
(iv) any other individual or entity;
while knowing or having reason to believe that all or any portion of such
money or thing of value would be offered, given, or promised, directly or to the
Knowledge of Miva indirectly, to any person or entity listed in clauses (i) -
(iii) above.
(b) Miva maintains a system of internal accounting controls
adequate to insure that it maintains no off-the-books accounts and that its
assets are used only in accordance with its management's directives.
(c) No product sold or service provided by Miva has been directly,
or to the Knowledge of Miva indirectly, sold to or performed on behalf of Cuba,
Iraq, Iran, Libya, or Sudan.
30
4.28 Disclosure. The representations and warranties contained in this
Article IV, taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make such
representations and warranties, in light of the circumstances under which they
were made, not misleading.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Mutual Covenants.
(a) Reasonable Efforts; Notification. Each of the parties shall
cooperate with the other parties in connection with any filing to be made with
respect to the fairness hearing to be held under the California Securities Law
of 1986 pursuant to Section 5.3(e) hereof (the "Fairness Hearing") including,
with respect to the party making a filing, providing copies of all requisite
documents to the non-filing parties and their respective advisors prior to
filing and, if requested, accepting all reasonable additions, deletions or
changes suggested by such non-filing party in connection therewith.
(i) Each party shall use all commercially reasonable efforts
to furnish to each of the other parties all information required for any
application or other filing to be made pursuant to the Fairness Hearing. Each
party shall promptly inform the other parties of any communication with, and any
proposed understanding, undertaking, or agreement with, any Governmental
Authority regarding the Fairness Hearing. No party shall independently
participate in any meeting with any Governmental Authority in respect of any
such filings, investigation, or other inquiry without giving the other parties
prior notice of the meeting and, to the extent permitted by such Governmental
Authority, the opportunity to attend and/or participate. The parties hereto will
consult and cooperate with one another, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection with the
Fairness Hearing.
(ii) Each of the parties agrees to use all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (A) the obtaining of all other
necessary actions or nonactions, waivers, consents, licenses, permits,
authorizations, orders and approvals from Governmental Authorities and the
making of all other necessary registrations and filings (including other filings
with Governmental Authorities, if any), (B) the obtaining of all consents,
approvals or waivers from third parties set forth in Schedule 6.3(f) in the Miva
Disclosure Schedule, and (C) the execution and delivery of any additional
instruments necessary to consummate the transaction contemplated by this
Agreement.
(iii) Notwithstanding anything to the contrary in this
Agreement, (A) neither FindWhat nor any of its subsidiaries shall be required to
hold separate (including by trust or otherwise) or to divest any of their
respective businesses or assets, or to take or agree to take any action or agree
to any limitation that could reasonably be expected to have a Material Adverse
Effect on FindWhat combined with the Surviving Corporation after the Effective
Time, (B) prior to the Effective Time, Miva shall not be required to hold
separate (including by trust or otherwise) or to divest any of their respective
businesses or assets, or to take or agree to take any
31
other action or agree to any limitation that could reasonably be expected to
have a Material Adverse Effect on Miva, (C) neither party nor their respective
subsidiaries shall be required to take any action that would reasonably be
expected to substantially impair the benefits expected, as of the date hereof,
to be realized by such party or its subsidiaries from consummation of the Merger
and (D) neither party shall be required to waive any of the conditions to the
Merger set forth in Article VI as they apply to such party.
(b) Public Announcements. The initial press release concerning the
Merger and the transactions contemplated hereby shall be a joint press release
and shall be issued, upon the mutual agreement of the parties, on or after the
date of this Agreement. FindWhat and Miva shall consult with each other before
issuing, and give each other the opportunity to review and comment upon, any
other press release or public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by Applicable Law, court process or by obligations
pursuant to any listing agreement of FindWhat with any national securities
exchange or national securities quotation system. In addition to the foregoing,
neither FindWhat nor Miva shall issue any press release or otherwise make any
public statement or disclosure concerning non-public information relating to the
other party's business, financial condition or results of operations without the
consent of the other party, which consent shall not be unreasonably withheld,
conditioned or delayed, or except as required by Applicable Law.
(c) Notices of Certain Events. Each party hereto shall promptly
notify the other parties in writing of:
(i) the receipt by such party or any of such party's
subsidiaries of any notice or other communication from any person alleging that
the consent of such person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) subject to any applicable legal restrictions, the
receipt by such party or any of such party's subsidiaries of any notice or other
communication from any Governmental Authority in connection with the
transactions contemplated by this Agreement;
(iii) such party's obtaining Knowledge of any Actions
commenced or threatened against, relating to or involving or otherwise affecting
any of the other parties hereto, as the case may be, or, with respect to
FindWhat or Miva, any of their respective subsidiaries, which relate to the
consummation of the transactions contemplated by this Agreement; and
(iv) such party's obtaining Knowledge of the occurrence, or
failure to occur, of any event which occurrence or failure to occur will be
likely to cause the conditions set forth in Article VI not to be satisfied;
provided, however, that no such notification shall affect the representations,
warranties or obligations of the parties or the conditions to the obligations of
the parties hereunder, or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
(d) Notification. Between the date of this Agreement and the
Closing Date, each party hereto shall promptly notify the other parties hereto
in writing if such party becomes aware of any fact or condition that causes or
constitutes a breach in any of its representations and warranties as of the date
of this Agreement or any other date applicable to a representation or warranty
as set forth herein. Should any such fact or condition require any change in the
32
Miva Disclosure Schedule, Miva shall promptly deliver to FindWhat a supplement
to the Miva Disclosure Schedule specifying such change. Such delivery will not
affect any rights of any party under any other provision of this Agreement.
During the same period, each party shall promptly notify the other parties in
writing if such party becomes aware of the occurrence of any breach of any
covenant of such party in this Agreement or the occurrence of any event that may
make the satisfaction of the conditions in Article 6 impossible or unlikely.
(e) California Fairness Hearing. Promptly following execution of
this Agreement, FindWhat will file with the California Department of
Corporations (the "Department") an application for qualification of the FindWhat
Common Shares to be issued to the Miva Stockholders in connection with the
Merger pursuant to CGCL Sections 25121 and 25142. In connection with the
submission of such application and Fairness Hearing to be held by the Department
pursuant thereto in order to determine if a permit approving the issuance of
such FindWhat Common Shares is appropriate, the parties agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the approval of the
Merger and the granting of a permit; provided, however, that notwithstanding the
foregoing, or anything in this Agreement to the contrary, FindWhat shall not be
obligated to amend, modify, or rescind the FindWhat Articles, the FindWhat
Bylaws or any other comparable organizational documents of FindWhat or any of
its subsidiaries in order to allow the application for qualification to be
approved and a permit to be granted. The costs associated with the preparation
of the application and the conduct of the Fairness Hearing shall be borne by the
appropriate persons pursuant to Section 9.10 of this Agreement. The notice of
hearing to be filed with the California Commissioner of Corporations and mailed
to the Miva Stockholders, the statements and documents to be introduced into
evidence at the Fairness Hearing, and the notice of shareholder meeting to be
mailed to the Miva Stockholders (each to the extent prepared by or on behalf of
FindWhat) will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
5.2 Covenants of FindWhat.
(a) Subcorp. Prior to the Effective Time, Subcorp shall not
conduct any business or make any investments other than as specifically
contemplated by this Agreement and will not have any assets (other than a de
minimis amount of cash paid to Subcorp for the issuance of its stock to
FindWhat) or any material liabilities.
(b) Employees and Employee Benefits. From and after the Effective
Time, FindWhat shall cause the Surviving Corporation to honor the obligations of
Miva incurred prior to the Effective Time under all Miva Plans. From and after
the Effective Time, FindWhat shall treat all service by Miva Employees with Miva
(or any predecessor thereto) prior to the Effective Time for all purposes as
service with FindWhat (except for purposes of benefit accrual under defined
benefit pension plans or to the extent such treatment would result in
duplicative accrual on or after the Closing Date of benefits for the same period
of service), and, with respect to any medical or dental benefit plan in which
Miva Employees participate after the Effective Time, FindWhat shall waive or
cause to be waived any pre-existing condition exclusions and actively-at-work
requirements (provided, however, that no such waiver shall apply to a
pre-existing condition of any Miva Employee who was, as of the Effective Time,
excluded from
33
participation in a Miva Plan by virtue of such pre-existing condition), and
shall provide that any covered expenses incurred on or before the Effective Time
during the plan year of the applicable Miva Plan in which the Effective Time
occurs by a Miva Employee or a Miva Employee's covered dependent shall be taken
into account for purposes of satisfying applicable deductible, coinsurance and
maximum out-of-pocket provisions after the Effective Time to the same extent as
such expenses are taken into account for the benefit of similarly situated
employees of FindWhat and subsidiaries of FindWhat.
(c) Piggyback Registration. If a permit to issue the FindWhat
Common Shares is not granted pursuant to the Fairness Hearing then, at any time
after the Closing Date that FindWhat shall determine to register any of its
FindWhat Common Shares, either for its own account or for the account of a
holder of FindWhat Common Shares or as a result of a holder of FindWhat Common
Shares exercising demand registration rights, other than a registration (A)
relating solely to FindWhat Common Shares on a Form S-4 or Form S-8 (or any
successor forms), (B) with respect to which the FindWhat Common Shares held by
the Miva Stockholders would not be legally permitted to be included or (C)
currently pending or contemplated and set forth on Section 5.2(c) in the
FindWhat Disclosure Schedule, then FindWhat shall:
(i) at least 15 days prior to the filing of a registration
statement, other than as set forth in (c) (A), (B), or (C) above, promptly give
each Miva Stockholder who has exchanged Miva Capital Stock for FindWhat Common
Shares pursuant to the Merger (each, an "Eligible Stockholder") written notice
thereof by registered or certified mail, courier or personal delivery; and
(ii) use its best efforts to include in such registration
(and any related qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all of the FindWhat Common Shares held by
such Eligible Stockholder as specified in a written request or requests, made
within ten (10) days after receipt of such written notice from FindWhat by any
Eligible Stockholder but only to the extent that such inclusion does not
diminish the number of securities included by a holder of FindWhat Common Shares
who has demanded such registration.
(iii) If the registration of which FindWhat gives notice is
for a registered public offering involving an underwriting, FindWhat will so
advise the Eligible Stockholders as part of the written notice given pursuant to
subsection (i) above. In such event the right of any Eligible Stockholder to
registration pursuant to subsection (i) above shall be conditioned upon such
Eligible Stockholder's participation in such underwriting and the inclusion of
such Eligible Stockholder's FindWhat Common Shares in the underwriting to the
extent provided herein. The Eligible Stockholders proposing to distribute their
FindWhat Common Shares through such underwriting shall (together with FindWhat
and the other holders of FindWhat Common Shares distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by FindWhat
(or by the holders of FindWhat Common Shares who have demanded such
registration). Notwithstanding any other provision of this Section 5.2(c), if
the managing underwriter determines that marketing factors require a limitation
of the number of FindWhat Common Shares to be underwritten, the managing
underwriter may limit the number of FindWhat Common Shares to be included in
such registration. FindWhat will so advise the Eligible Stockholders and any
other holder of FindWhat Common Shares distributing their
34
FindWhat Common Shares through the underwriting pursuant to piggyback
registration rights similar to this Section 5.2(c), and the number of FindWhat
Common Shares to be registered and other securities that may be included in the
registration and underwriting shall be allocated among all stockholders in
proportion, as nearly as practicable, to the respective amounts of registrable
securities held by such stockholders and other securities held by other holders
at the time of filing the registration statement; provided, that the aggregate
amount of registrable securities held by selling Eligible Stockholders included
in the offering shall not be reduced below 25% of the total amount of securities
included in that offering. If any Eligible Stockholder disapproves of the terms
of any such underwriting, he or she may elect to withdraw therefrom by written
notice to FindWhat and the managing underwriter. Any FindWhat Common Shares
excluded or withdrawn from such underwriting shall be withdrawn from
registration, and shall not be transferred in a public distribution prior to
ninety (90) days after the effective date of the registration statement relating
thereto.
(iv) FindWhat shall have the right to terminate or withdraw
any registration initiated by it under this Section 5.2(c) prior to the
effectiveness of such registration whether or not any Eligible Stockholder has
elected to include such Eligible Stockholder's FindWhat Common Shares in such
registration.
(v) FindWhat shall bear the expenses associated with the
registration of FindWhat Common Shares pursuant to this Section 5.2(c) exclusive
of underwriters' and brokers' discounts and commissions and expenses of the
Eligible Stockholders' legal counsel.
(d) Waiver of Conflict. Each of FindWhat, Subcorp and (effective
after the Closing) Miva hereby agrees that Xxxx Xxxxxxx may represent any or all
of the Miva Stockholders in any matters arising after the Closing, whether or
not relating to the Merger or the other transactions contemplated by this
Agreement, and hereby waives any conflict of interest that may arise in
connection with such representation.
(e) Insurance. Each of FindWhat, Subcorp and (effective after the
Closing) Miva hereby agrees to maintain insurance with respect to Miva until at
least the second anniversary of the Closing, with such insurance to be at least
equal in amount and in scope to the policies listed in Schedule 4.24 and, to the
extent such policies provide coverage post-Closing for occurrences pre-Closing,
including without limitation director and officer liability coverage, to
maintain such policies in place.
5.3 Covenants of Miva.
(a) Miva Stockholders Meeting. Subject to Section 5.3(d), Miva
shall take all actions required by the CGCL, the Miva Certificate and the Miva
Bylaws to duly call, give notice of, convene and hold a special meeting of Miva
Stockholders (the "Miva Stockholders Meeting") on the earliest practicable date,
determined in reasonable consultation with FindWhat, to consider and vote upon
approval of (i) the Merger, (ii) this Agreement, and (iii) the other
transactions contemplated hereby to the extent the approval of such other
transactions by the Miva Stockholders is required thereby.
(b) Conduct of Miva's Operations. During the period from the date
of this Agreement to the Effective Time, or the date, if any, on which this
Agreement is earlier terminated pursuant to Section 7.1, and except as may
otherwise be agreed in writing by the parties, Miva shall conduct its operations
in the ordinary course of business consistent with past
35
practice, except as expressly contemplated by this Agreement, and shall use its
commercially reasonable efforts to maintain and preserve its business
organization and its material rights and franchises and to retain the services
of its officers and key employees and maintain relationships with material
customers, suppliers, lessees, licensees and other third parties, and to
maintain all of its material operating assets in their current condition (normal
wear and tear excepted). Without limiting the generality of the foregoing,
during the period from the date of this Agreement to the Effective Time, or the
date, if any, on which this Agreement is earlier terminated pursuant to Section
7.1, Miva shall not, except as otherwise expressly contemplated by this
Agreement and the transactions contemplated hereby or as set forth in Section
5.3(c) in the Miva Disclosure Schedule or with the prior written consent of
FindWhat:
(i) do or effect any of the following actions with respect
to its securities: (A) adjust, split, combine or reclassify its capital stock,
(B) make, declare or pay any dividend or distribution on, or directly or
indirectly redeem, purchase or otherwise acquire, any shares of its capital
stock or any securities or obligations convertible into or exchangeable for any
shares of its capital stock, (C) grant any person any right or option to acquire
any shares of its capital stock, (D) issue, deliver or sell or agree to issue,
deliver or sell any additional shares of its capital stock or any securities or
obligations convertible into or exchangeable or exercisable for any shares of
its capital stock or such securities (except pursuant to the exercise of Miva
options that are outstanding as of the date hereof), (E) enter into any
agreement, understanding or arrangement with respect to the sale, voting,
registration or repurchase of its capital stock, provided, however, that Miva is
hereby expressly permitted to take all lawful actions necessary in order to (x)
cause all outstanding options to be exercised or cancelled, (y) cause all
outstanding warrants to be exercised or cancelled and (z) cause any outstanding
convertible debt instruments to become non-convertible;
(ii) directly or indirectly sell, transfer, lease, pledge,
mortgage, encumber or otherwise dispose of any of its material property or
material assets other than in the ordinary course of business consistent with
past practice;
(iii) adopt or propose any changes in the Miva Certificate or
the Miva Bylaws;
(iv) merge or consolidate with any other person;
(v) acquire a material amount of assets or capital stock of
any other person outside of the ordinary course of business consistent with past
practice;
(vi) make any borrowings, incur, create, assume or otherwise
become liable for any indebtedness for borrowed money or assume, guarantee,
endorse or otherwise as an accommodation become responsible or liable for the
obligations of any other individual, corporation or other entity, other than in
the ordinary course of business, consistent with past practice;
(vii) create any subsidiaries;
(viii) enter into or modify any employment, severance,
termination or similar agreements or arrangements with, or grant any bonuses,
salary increases, severance or termination pay to, any officer, director,
consultant or employee other than pursuant to Applicable Law or contractual
commitments existing as of the date hereof in the ordinary course of business
consistent with past practice (provided past practices shall not be deemed into
36
include actions taken in connection with the Merger) or grant any increase in
the compensation or benefits of directors, officers, employees, consultants or
agents of Miva or grant, re-price, or accelerate the exercise or payment of any
Miva options or warrants or other equity-based awards other than increases in
the ordinary course of business consistent with past practice;
(ix) enter into, adopt or amend any Miva Plan, except as may
be required by Applicable Law;
(x) take any action that could give rise to severance
benefits payable to any officer or director of Miva as a result of consummation
of the transactions contemplated by this Agreement;
(xi) change any method or principle of accounting in a manner
that is inconsistent with past practice except to the extent required by
generally accepted accounting principles as advised by Miva's regular
independent accountants;
(xii) settle any Actions, whether now pending or hereafter
made or brought involving, individually or in the aggregate, an amount in excess
of US$50,000 other than settlement in the ordinary course of business or in
accordance with their terms, of liabilities disclosed, reflected or reserved
against in the most recent Miva financial statements (or the notes thereto) or
incurred since the date of such financial statements in the ordinary course of
business;
(xiii) modify, extend, amend or terminate, or waive, release
or assign any rights or claims with respect to, any Contract set forth in
Section 4.16 in the Miva Disclosure;
(xiv) enter into any confidentiality agreements or
arrangements other than in the ordinary course of business consistent with past
practice (other than as permitted, in each case, by Section 5.3(d));
(xv) write up, write down or write off the book value of any
assets, individually or in the aggregate, in excess of $20,000 except for
depreciation and amortization in accordance with generally accepted accounting
principles consistently applied;
(xvi) incur or commit to any capital expenditures in excess of
US$20,000 individually or US$60,000 in the aggregate, excluding capital
expenditures provided for or contemplated by the capital budget approved by
Miva's board of directors prior to the date hereof and as set forth in Section
5.3(b)(xvi) in the Miva Disclosure Schedule;
(xvii) make any payments in respect of policies of directors'
and officers' liability insurance (premiums or otherwise) other than premiums
paid in respect of its current or renewed or replacement policies;
(xviii) take any action that could likely result in the
representations and warranties set forth in Article IV becoming false or
inaccurate in any material respect;
(xix) enter into or carry out any other transaction other than
in the ordinary and usual course of business;
(xx) permit or cause any Subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing;
(xxi) make or revoke any Tax election, file any material
amended Tax Return, or settle any material audit or other proceeding with any
material Tax authority;
37
(xxii) enter into any agreement to purchase, or to lease for a
term in excess of one year, any real property, provided that Miva (A) may, as a
tenant, or a landlord, renew any existing lease for a term not to exceed
eighteen months and (B) nothing herein shall prevent Miva, in its capacity as
landlord, from renewing any lease pursuant to an option granted prior to the
date hereof; or
(xxiii) agree in writing or otherwise to take any of the
foregoing actions.
(c) Access to Information; Confidentiality. Upon reasonable
notice, Miva shall afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of FindWhat reasonable access
during normal business hours, during the period prior to the Effective Time, to
such of its properties, books, contracts, commitments, records, all other
information and data, officers and employees as FindWhat may reasonably request
and, during such period, Miva shall furnish promptly to FindWhat (a) a copy of
each report, schedule, and other document filed, published, announced or
received by it during such period pursuant to the requirements of Applicable
Laws (other than documents which such party is not permitted to disclose under
Applicable Laws), and (b) consistent with its legal obligations, all other
information concerning it and its business, properties and personnel as FindWhat
may reasonably request; provided, however, that Miva may restrict the foregoing
access to the extent that it reasonably concludes, after consultation with
outside legal counsel, that (i) any Applicable Law requires Miva to restrict
access to any properties or information, (ii) providing such access would result
in the loss of the attorney-client privilege, (iii) such documents discuss the
pricing or dollar value of the transactions contemplated by this Agreement, (iv)
such documents contain competitively sensitive information, the sharing of which
could constitute a violation of any applicable Antitrust Laws or (v) such
disclosure is reasonably likely to result in a breach of or default under any
contract or agreement to which Miva is a party. The parties shall hold any such
information in confidence to the extent required by, and in accordance with, the
provisions of the letter of intent dated as of July 9, 2003, between FindWhat
and Miva (the "Letter of Intent"). Each party shall make all commercially
reasonable efforts to minimize disruption to the business of the other party and
its subsidiaries which may result from the requests for data and information
hereunder. All requests for access and information shall be coordinated through
senior executives of the parties to be designated.
(d) No Solicitation.
(i) Miva will not, and will not permit or cause any
Subsidiary or any of the directors or officers of Miva or any Subsidiary, and
will direct Miva's employees, agents and representatives not to, directly or
indirectly, solicit, initiate, encourage, or furnish or disclose non-public
information in furtherance of, or otherwise facilitate any inquiries that may be
reasonably expected to lead to, the making of any proposal or offer with respect
to a merger, reorganization, share exchange, consolidation, or similar
transaction involving, or any purchase of 10% or more of the assets or any
equity of, Miva or any Subsidiary or any other business combination other than
the transactions contemplated by this Agreement (any such proposal or offer, an
"Acquisition Proposal").
(ii) Miva will not, and will not permit or cause any
Subsidiary or any of the officers or directors of it or any Subsidiary to, and
shall direct its and such Subsidiary's employees, agents and representatives not
to, directly or indirectly, engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
38
person relating to an Acquisition Proposal, whether before or after the date of
this Agreement, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; provided, however, nothing in this Agreement
shall prevent Miva or its board of directors from, at any time prior to the
Effective Time, (A) providing information in response to a request therefor by a
person who has made an unsolicited bona fide written Acquisition Proposal if the
board of directors of Miva receives from such person so requesting such
information an executed confidentiality agreement or non-disclosure agreement on
customary terms; (B) engaging in any negotiations or discussions with any person
who has made an unsolicited bona fide written Acquisition Proposal; or (C)
recommending such Acquisition Proposal to the Miva Stockholders, if and only to
the extent that (x) in each such case referred to in clause (A), (B) or (C)
above, Miva has not violated any of the restrictions set forth in this Section
5.3(c) and the board of directors of Miva determines in good faith after
consultation with outside legal counsel that such action is reasonably likely to
be necessary in order for its directors to comply with their respective
fiduciary duties under Applicable Law and (y) in the case referred to in clause
(C) above, the board of directors of Miva determines in good faith (after
consultation with its financial advisor) that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated, taking into account all legal,
financial, and regulatory aspects of the proposal and the person making the
proposal and would, if consummated, result in a more favorable transaction that
the transaction contemplated by this Agreement, taking into account the
long-term prospects and interests of Miva and the Miva Stockholders; and
provided, further, that prior to furnishing any information to such person, Miva
furnishes such information to FindWhat (to the extent such information has not
been previously furnished by Miva to FindWhat).
(iii) Miva will immediately cease all existing activities,
discussions and negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal and request the return of all confidential
information regarding such party provided to any such parties prior to the date
hereof pursuant to the terms of any confidentiality agreements or otherwise.
Miva will notify FindWhat immediately if any such inquiries, proposals, or
offers are received by, any such information is requested from, or any such
discussions or negotiations are sought to be initiated or continued with, any of
its representatives indicating, in connection with such notice, the name of such
person and the material terms and conditions of any proposals or offers and
thereafter shall keep FindWhat informed, on a reasonably current basis, on the
status and terms of any such proposals or offers and the status of any such
negotiations or discussions.
(e) Investment Representations by Miva Stockholders. Miva shall
use commercially reasonable efforts to cause each Miva Stockholder who notifies
Miva or FindWhat of such stockholder's intention to exchange his or her
Certificates for certificates evidencing FindWhat Common Shares to deliver to
Miva, on or prior to the Closing Date, a signed certificate, substantially in
the form attached as Exhibit F (the "Investment Representation Certificate"),
and Miva shall deliver to FindWhat, at the Closing, all such Investment
Representation Certificates received by Miva; provided, however, that Miva's
failure to receive any such Investment Representation Certificate despite
commercially reasonable efforts in such regard shall not constitute a breach of
this Agreement.
39
ARTICLE VI
CONDITIONS
6.1 Conditions to the Obligations of Each Party. The obligations of
FindWhat, Subcorp, Miva and the Miva Principal Stockholders to consummate the
Merger shall be subject to the satisfaction or waiver of the following
conditions:
(a) This Agreement, the Merger, and the transactions contemplated
hereby shall have been approved and adopted by Miva Stockholders in the manner
required by any Applicable Law.
(b) No provision of any Applicable Law or regulation and no
judgment, injunction, order, decree, ruling, assessment or arbitration award of
any Governmental Authority or arbitrator and any Contract with any Governmental
Authority pertaining to compliance with Applicable Law shall prohibit or enjoin
the consummation of the Merger or the transactions contemplated by this
Agreement or limit the ownership or operation by FindWhat, Miva or any of their
respective subsidiaries of any material portion of the businesses or assets of
FindWhat or Miva.
(c) There shall not be pending any Action (i) challenging or
seeking to restrain or prohibit the consummation of the Merger or any of the
other transactions contemplated by this Agreement, (ii) except to the extent
consistent with the obligations of the parties under Section 5.1(a), seeking to
prohibit or limit the ownership or operation by FindWhat, Miva or any of their
respective subsidiaries of, or to compel FindWhat, Miva or any of their
respective subsidiaries to dispose of or hold separate, any material portion of
the business or assets of FindWhat, Miva or any of their respective
subsidiaries, as a result of the Merger or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose limitations on the
ability of FindWhat to acquire or hold, or exercise full rights of ownership of,
any shares of capital stock of the Surviving Corporation, including the right to
vote such capital stock on all matters properly presented to the stockholders of
the Surviving Corporation or (iv) seeking to prohibit FindWhat or the Subsidiary
of FindWhat from effectively controlling in any material respect the business or
operations of FindWhat or the subsidiaries of FindWhat.
(d) The Fairness Hearing shall have been held and the permit to
issue FindWhat Common Shares sought pursuant thereto either issued or denied;
provided, however, that in the event Miva or any of the Miva Principal
Stockholders is responsible for the failure to hold the Fairness Hearing, then
Miva and the Miva Principal Stockholders shall be deemed to have waived this
condition to the Closing; and provided, further, that in the event FindWhat or
Subcorp is responsible for the failure to hold the Fairness Hearing, then Miva
and the Miva Principal Stockholders shall be entitled to exercise, and FindWhat
shall take all actions necessary to accommodate the exercise of, the rights set
forth in Section 5.2(c).
6.2 Conditions to Obligations of Miva and the Miva Principal
Stockholders. The obligations of Miva and the Miva Principal Stockholders to
consummate the Merger and the transactions contemplated hereby shall be subject
to the fulfillment of the following conditions unless waived by Miva:
(a) Each of the representations and warranties of each of FindWhat
and Subcorp contained in this Agreement shall be true and correct in all
material respects (but without regard to any materiality qualifications or
references to Material Adverse Effect
40
contained in any specific representation or warranty), in each case on the date
of this Agreement and on and as of the Closing Date as though made on and as of
the Closing Date (except for representations and warranties made as of some
other specified date, in which case as of such specified date), except where any
such failure of the representations and warranties to be true and correct,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on FindWhat, Miva or the transactions contemplated by
this Agreement.
(b) Each of FindWhat and Subcorp (i) shall have performed or
complied with all agreements and covenants required to be performed by it under
this Agreement at or prior to the Effective Time that are qualified as to
Material Adverse Effect and (ii) shall have performed or complied in all
material respects with all agreements and covenants required to be performed by
it under this Agreement at or prior to the Effective Time that are not qualified
as to Material Adverse Effect except where such non-performance or
non-compliance individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect on FindWhat.
(c) Each of FindWhat and Subcorp shall have furnished Miva and the
Miva Principal Stockholders with a certificate dated the Closing Date signed on
behalf of it by the Chairman, President or any Vice President to the effect that
the conditions set forth in Sections 6.2(a) and (b) have been satisfied.
6.3 Conditions to Obligations of FindWhat and Subcorp. The obligations
of FindWhat and Subcorp to consummate the Merger and the other transactions
contemplated hereby shall be subject to the fulfillment of the following
conditions unless waived by FindWhat:
(a) Each of the representations and warranties of Miva and the
Miva Principal Stockholders contained in this Agreement shall be true and
correct in all material respects (but without regard to any materiality
qualifications or references to Material Adverse Effect contained in any
specific representation or warranty), in each case, on the date of this
Agreement and on and as of the Closing Date as though made on and as of the
Closing Date (except for representations and warranties made as of some other
specified date, in which case, as of such specified date), except where any such
failure of the representations and warranties to be true and correct would not
reasonably be expected to have a Material Adverse Effect on Miva, FindWhat or
the transactions contemplated by this Agreement.
(b) Miva and the Miva Principal Stockholders (i) shall have
performed or complied with all agreements and covenants required to be performed
by it or them under this Agreement at or prior to the Effective Time that are
qualified as to Material Adverse Effect and (ii) shall have performed or
complied in all material respects with all agreements and covenants required to
be performed by it or them under this Agreement at or prior to the Effective
Time that are not qualified as to Material Adverse Effect except where such
non-performance or non-compliance would not reasonably be expected to have a
Material Adverse Effect on Miva.
(c) Miva shall have furnished FindWhat with an officer's
certificate dated the Closing Date to the effect that the conditions set forth
in Sections 6.3(a) and (b) have been satisfied.
(d) Miva shall have furnished FindWhat with a certificate dated
the Closing Date signed by its chief financial officer pursuant to Section 2.6.
41
(e) Since the date of this Agreement, except as set forth in
Section 4.10 of the Miva Disclosure Schedule delivered as of such date, there
shall not have been any change in the assets, liabilities, business prospects,
results of operations or financial condition of Miva that would constitute a
Material Adverse Effect on Miva as of the Closing Date.
(f) All consents set forth in Section 6.3(f) in the Miva
Disclosure Schedule shall have been obtained by Miva or waived by FindWhat.
(g) Each of Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxxxx and Xxxxxxx Xxxxxx shall have executed an employment agreement
with FindWhat substantially in the form attached hereto as Exhibit G (each, a
"Miva Executive Employment Agreement").
(h) Each of the Miva Employees set forth in Section 6.3(h) in the
Miva Disclosure Schedule shall have executed a non-competition, confidentiality
and employment agreement with Miva substantially in the form attached hereto as
Exhibit H (each, a "Miva Employment Agreement").
(i) Each outstanding option or warrant to acquire, and each issued
note convertible into, Miva Capital Stock, all of which are set forth in Section
6.3(i) in the Miva Disclosure Schedule, whether or not exercisable, vested or
converted, shall have been exercised or cancelled so that as of the Effective
Time no person shall have any options, warrants, or other rights to buy, or
convert into, any securities of the Surviving Corporation.
(j) The Labor Claim pending before the California Labor
Commissioner with respect to Miva and its former Executive Vice President as
defined in Section 4.9 in the Miva Disclosure Schedule shall have been dismissed
in accordance with the terms of the Settlement Agreement as defined in Section
4.9 in the Miva Disclosure Schedule with respect to the Labor Claim.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated and the Merger may be
abandoned prior to the Effective Time (notwithstanding any approval of this
Agreement by Miva Stockholders):
(a) by mutual written consent of FindWhat, Miva and the Miva
Principal Stockholders;
(b) by FindWhat, Miva or any of the Miva Principal Stockholders:
(i) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited, or if any judgment,
injunction, order or decree of a court or other competent Governmental Authority
enjoining FindWhat or Miva from consummating the Merger shall have been entered
and such judgment, injunction, order or decree shall have become final and
nonappealable; provided, that the party seeking to terminate this Agreement
pursuant to this Section 7.1(b)(i) shall have used commercially reasonable
efforts to prevent the entry of and to remove such impediment to the Merger;
(ii) if the Merger shall not have been consummated before
December 31, 2003; provided, however, that the right to terminate this Agreement
under this
42
Section 7.1(b)(ii) shall not be available to any party whose failure to perform
any material covenant or obligation under this Agreement has been the cause of
or resulted in the failure of the Merger to occur on or before such date; or
(iii) if at the Miva Stockholders Meeting (including any
adjournment or postponement thereof) the requisite vote of the Miva Stockholders
to approve the Merger and the transactions contemplated hereby shall not have
been obtained.
(c) by FindWhat if Miva has breached any of its representations
and warranties in Article IV of this Agreement and as a result thereof, the
condition set forth in Section 6.3(a) could not be satisfied;
(d) by FindWhat if there has been any change in the assets,
liabilities, business prospects, results of operations or financial condition of
Miva that would constitute a Material Adverse Effect on Miva;
(e) by Miva or the Miva Principal Stockholders if FindWhat and
Subcorp shall have breached any of their representations and warranties in
Article III of this Agreement and as a result thereof, the condition set forth
in Section 6.2(a) could not be satisfied; or
(f) by Miva or the Miva Principal Stockholders if there has been
any change in the assets, liabilities, business prospects, results of operations
or financial condition of FindWhat that would constitute a Material Adverse
Effect on FindWhat.
7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement, except for the second
sentence of Section 5.1(d), shall become void and have no effect, without any
liability on the part of any party or such party's directors, officers or
stockholders. Notwithstanding the foregoing, nothing in this Section 7.2 shall
relieve any party to this Agreement of liability for a material breach of any
provision of this Agreement.
ARTICLE VIII
GENERAL SURVIVAL; INDEMNIFICATION
8.1 Survival of Representations and Warranties.
(a) The representations, warranties, covenants and agreements made
herein by Miva shall survive, irrespective of any different survival period
under any applicable statute of limitation, until the second anniversary of the
Closing Date (the "Cut-Off Date").
(b) Irrespective of any different survival period under any
applicable statute of limitations, the representations, warranties, covenants
and agreements made herein by FindWhat shall survive until the second
anniversary of the Closing Date.
(c) This Section 8.1 shall not limit any covenant or agreement of
the parties hereto, which by its terms contemplates performance after the
Effective Time or after the termination of this Agreement.
8.2 Indemnification.
(a) The Miva Principal Stockholders, severally and not jointly
(the "Miva Indemnifying Parties"), shall indemnify and hold FindWhat, Subcorp
and the Surviving Corporation (collectively, the "FindWhat Indemnified Parties")
harmless from and against any and all liability, loss, cost and expense
whatsoever, including reasonable fees of legal counsel
43
and related disbursements (collectively, "Damages"), incurred by the FindWhat
Indemnified Parties as a result of or related to any breach of any
representation, warranty, covenant or agreement made as of the Closing Date by
Miva in Article IV or Article V of this Agreement or in any certificate or
schedule delivered pursuant thereto, subject to the following:
(i) In no circumstance shall the Miva Indemnifying Parties
be obligated to pay Damages, in aggregate, in excess of the aggregate value of
the Indemnity Limit.
(ii) No Miva Principal Stockholder shall be obligated to pay
Damages, in aggregate, in excess of the amount of Merger Consideration actually
received by such Miva Principal Stockholder (the aggregate Merger Consideration
actually received by all Miva Principal Stockholders as a group being the
"Indemnity Limit"), calculated as follows:
(A) The amount of Merger Consideration "actually
received" by any Miva Principal Stockholder for purposes of calculating the
Indemnity Limit and for any other purposes of this Section 8.2 shall be equal to
such Miva Principal Stockholder's share of the Merger Consideration less the sum
of (x) any adjustments made pursuant to Section 2.6, (y) the Fairness Hearing
Expenses and (z) the Estimated Transaction Expenses as adjusted pursuant to
Section 9.10(b).
(B) The value of the Stock Consideration component of
the Merger Consideration shall be calculated as follows:
(1) The value of the Closing Stock Consideration
shall be, and shall remain, equal to the Stock Closing Price.
(2) The value of any portion of the Escrow Stock
Consideration remaining in the Escrow Account shall be, and shall remain until
release from the Escrow Account, equal to the Stock Closing Price.
(3) The value of any portion of the Escrow Stock
Consideration released from the Escrow Account in order to pay a claim for
Damages shall be equal to the following on the date of release:
a. If, on the date of release, the
FindWhat Common Shares comprising such Escrow Stock Consideration are freely
tradeable (whether as a result of the Fairness Hearing, the effectiveness of a
piggyback registration or pursuant to Rule 144 under the Securities Act), then
the value of such FindWhat Common Shares shall equal the closing price of the
FindWhat Common Shares as reported on the NASDAQ National Market on the release
date.
b. If, on the date of release, the
FindWhat Common Shares comprising such Escrow Stock Consideration are not freely
tradeable, then the value of such FindWhat Common Shares shall be, and remain,
the fair market value of such FindWhat Common Shares on the date of release.
(4) The value of any portion of the Escrow Stock
Consideration released from the Escrow Account other than as set forth in clause
(ii)(B)(3) above, shall be equal to the following:
44
a. If, on the date of release, the
FindWhat Common Shares comprising such Escrow Stock Consideration are freely
tradeable (whether as a result of the Fairness Hearing, the effectiveness of a
piggyback registration or pursuant to Rule 144 under the Securities Act), then
the value of such FindWhat Common Shares shall equal the closing price of the
FindWhat Common Shares as reported on the NASDAQ National Market on the release
date.
b. If, on the date of release, the
FindWhat Common Shares comprising such Escrow Stock Consideration are not freely
tradeable, then the value of such FindWhat Common Shares shall be, and remain,
the fair market value of such FindWhat Common Shares on the date of release.
(iii) Payment of any Damages by any Miva Indemnifying
Party shall be comprised of cash and/or FindWhat Common Shares and such payments
shall be made first from the Stock Consideration until extinguished and then
from the Cash Consideration, with the value of such Stock Consideration computed
as set forth in clause (iv)(C) below.
(iv) The following shall be taken into account in calculating
and adjusting the Indemnity Limit:
(A) The Indemnity Limit shall be adjusted upward, by
the dollar value of the difference, in the event that the value of any FindWhat
Common Shares used to pay a given claim for Damages is greater than the Stock
Closing Price.
(B) The Indemnity Limit shall be adjusted downward, by
the dollar value of the difference, in the event that the value of any FindWhat
Common Shares used to pay a given claim for Damages is less than the Stock
Closing Price.
(C) The value of the Closing Stock Consideration, if
such FindWhat Common Shares are tradeable on the Closing Date, shall be, and
shall remain, equal to the Stock Closing Price for purposes of calculating the
Indemnity Limit.
(D) The value of any portion of the Escrow Stock
Consideration remaining in the Escrow Account shall be, and shall remain until
release from the Escrow Account, equal to the Stock Closing Price for purposes
of calculating the Indemnity Limit.
(v) No such Damages shall be required to be paid by the Miva
Indemnifying Parties until and unless the aggregate amount of Damages exceeds
$150,000, but if such aggregate amount of Damages exceeds $150,000 then the full
amount of such Damages up to the Indemnity Limit shall be required to be paid by
the Miva Indemnifying Parties.
(vi) To the extent any Miva Indemnifying Party is required to
pay pro rata Damages after receiving disbursements from the Escrow Account, such
disbursements may be required to be used to pay such pro rata Damages.
(b) Notwithstanding anything in this Agreement to the contrary,
the Miva Indemnifying Parties, severally and not jointly, shall indemnify and
hold FindWhat Indemnified Parties harmless from and against any and all Damages
incurred by the FindWhat Indemnified Parties as a result of or related to the
formation, conduct of business, and the dissolution or termination, in any form
or manner whatsoever, of Miva Deutschland GmbH; provided,
45
however, clauses (i), (ii), (iii), (iv) and (vi) of Section 8.2(a) shall apply
to the obligation of the Miva Indemnifying Parties pursuant to this Section
8.2(b); provided, further, the Miva Indemnifying Parties shall be liable for the
first and any subsequent dollar of Damages arising hereunder.
(c) FindWhat, Subcorp and the Surviving Corporation, jointly and
not severally (collectively, the "FindWhat Indemnifying Parties"), shall
indemnify and hold the Miva Stockholders (collectively, the "Miva Indemnified
Parties") harmless from and against any and all Damages incurred by the Miva
Indemnified Parties as a result of or related to any breach of any
representation, warranty, covenant or agreement made by FindWhat in this
Agreement. In no event shall the aggregate liability of FindWhat, Subcorp and
the Surviving Corporation exceed an amount equal to the Merger Consideration,
less the sum of (i) any adjustments made pursuant to Section 2.6, (ii) the
Fairness Hearing Expenses, and (iii) the Estimated Transaction Expenses as
adjusted pursuant to Section 9.10(b).
(d) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
the Miva Indemnifying Parties or the FindWhat Indemnifying Parties with respect
to which indemnity may be sought pursuant to this Article VIII, the following
procedures shall apply:
(i) The applicable FindWhat Indemnified Parties or Miva
Indemnified Parties (either, the "Indemnified Parties") shall promptly give
written notice thereof to the applicable Indemnifying Parties. The notice shall
state the information then available regarding the amount of the claim or
Damages and shall specify the provision or provisions of this Agreement under
which the right to indemnification is being asserted.
(ii) If within thirty days after receiving such notice, the
Indemnifying Parties give written notice to the Indemnified Parties stating they
intend to defend against such claim or Damages at their own cost and expense,
the defense (including the right to settle or compromise such action) of such
matter, including selection of counsel (subject to the consent of the
Indemnified Parties, which consent shall not be unreasonably withheld) and the
sole power to direct and control such defense, shall be by the Indemnifying
Parties and the Indemnifying Parties shall make no payment in respect of such
claim or Damages to any third party as long as the Indemnifying Parties are
conducting a good faith and diligent defense. In any such defense, the
Indemnifying Parties will consult with the Indemnified Parties in connection
with the Indemnifying Parties' defense.
(iii) In any such proceeding, each of the Indemnified Parties
shall have the right to retain its own counsel, at its own cost and expense
unless: (A) the Indemnifying Parties and the Indemnified Parties shall have
mutually agreed to the contrary; (B) the Indemnifying Parties have failed within
a reasonable time to retain counsel, in which event the Indemnified Parties
shall have the right to retain counsel at the expense of the Indemnifying
Parties; or (C) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnified Parties and the Indemnifying
Parties and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Parties shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for fees
and expenses of more than one separate firm (in addition to any local counsel)
for the Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm sought
46
to be indemnified by the Indemnifying Parties with respect to which the
Indemnified Parties seeks to be indemnified by the Indemnifying Parties shall be
designated in writing by the Indemnifying Parties. The Indemnifying Parties
shall not be liable for any settlement of any proceeding effected without such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Parties agree to indemnify the Indemnified Parties from and against any loss or
liability by reason of such settlement or judgment.
(iv) Notwithstanding the foregoing, if at any time the
Indemnified Parties shall have requested the Indemnifying Parties to reimburse
the Indemnified Parties for fees and expenses of counsel as contemplated herein,
the Indemnifying Parties agree that they shall be liable for any settlement of
any proceeding effected without their written consent herein if (x) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Parties of the aforesaid request; and (y) the Indemnifying Parties shall not
have reimbursed the Indemnified Parties in accordance with such request (other
than due to a reasonable dispute as to the validity of such request) prior to
the date of settlement. If no such notice of intent to dispute and defend is
given by the Indemnifying Parties, or if such diligent good faith defense is not
being or ceases to be conducted, the Indemnified Parties shall, at the expense
of the Indemnifying Parties, undertake the defense of such claim or Damages with
counsel selected by the Indemnified Parties, and shall have the right to
compromise or settle the same exercising reasonable business judgment. The
Indemnified Parties shall make available all information and assistance that the
Indemnifying Parties may reasonably request and shall cooperate with the
Indemnifying Parties in such defense.
(v) Notwithstanding anything herein to the contrary, the
Indemnifying Parties shall have the right to settle all claims of third parties
for which indemnification is payable hereunder without the consent of the
Indemnified Parties so long as such settlement releases the Indemnified Parties
from all liability for or in connection with such action.
(e) Notwithstanding anything herein to the contrary, no claim by
the Indemnified Parties against the Indemnifying Parties may be made unless
written notice of such breach is given in accordance with this Article VIII
prior to the expiration of the thirty day period immediately following the
Cut-Off Date.
(f) Except in the case of fraud and for any nonmonetary, equitable
relief to which any Indemnified Party may be entitled, the rights and remedies
set forth in Section 8.2 shall constitute the sole and exclusive rights and
remedies of the parties hereto under or with respect to the subject matter of
this Agreement
8.3 Insurance Recoveries. The Indemnified Party will use its
commercially reasonable efforts to first recover, under any insurance policy
maintained by the Indemnified Party, any Damages covered by such insurance
before seeking indemnification under Section 8.2. If, notwithstanding such
efforts, the Indemnifying Party is obligated to provide indemnification under
Section 8.2 for Damages covered by the insurance in question then, to the extent
permissible under Applicable Law and the applicable insurance policy, the
Indemnified Party shall assign to the Indemnifying Party all of its contractual
and tort rights against the insurer in connection with the insurer's failure to
perform under such insurance, and shall cooperate with the Indemnifying Party,
as reasonably requested, in the prosecution of such rights.
47
ARTICLE IX
MISCELLANEOUS
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, sent by facsimile
(with written confirmation of successful delivery) or dispatched by a nationally
recognized overnight courier service to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice from
such party to the other parties hereto):
(a) if to FindWhat or Subcorp:
XxxxXxxx.xxx
0000 Xxxxxxxxx Xxxxxxx Xxxx., Xxxxx 000
Xx. Xxxxx, Xxxxxxx 00000
Attention: Chairman and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Porter, Wright, Xxxxxx & Xxxxxx LLP
00 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq. and Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to Miva:
Miva Corporation
0000 Xxxxx Xx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Forward, Xxxxxxxx & Scripps LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(c) if to the Miva Principal Stockholders:
to the addresses set forth on Schedule 2 hereto.
48
9.2 Interpretation.
(a) When a reference is made in this Agreement to an Article or
Section, such reference shall be to an Article or Section of this Agreement
unless otherwise indicated. The headings, the table of contents and the index of
defined terms contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes", or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
(b) For the purposes of any provision of this Agreement, a
"Material Adverse Effect" with respect to any party shall be deemed to occur if
any event, change or effect has occurred which has a material adverse effect on
the business, assets (including intangible assets), liabilities (contingent or
otherwise), results of operations, business prospects, or financial condition of
such party taken as a whole, or a material adverse effect on the ability of such
party to timely perform its obligations under this Agreement and the other
transaction documents contemplated hereby; provided, however, none of the
following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Effect:
(i) with respect to any party, any change in or effect upon
the assets (including intangible assets), liabilities (contingent or otherwise),
financial condition, business prospects, or results of operations of such party
directly or indirectly arising out of or attributable to any decrease in the
market price of FindWhat Common Shares (but not any change or effect underlying
such decrease to the extent such change or effect would otherwise constitute a
Material Adverse Effect on FindWhat);
(ii) with respect to any party, any change in or effect upon
the assets (including intangible assets), liabilities (contingent or otherwise),
financial condition, business prospects, or results of operations of such party
directly or indirectly arising out of or attributable to (A) conditions, events,
or circumstances generally affecting the economy of the United States, or (B)
the general state of industries and market sectors in which such party operates;
and
(iii) with respect to Miva, any change in or effect upon the
assets (including intangible assets), liabilities (contingent or otherwise),
financial condition, or results of operations of Miva directly or indirectly
arising out of or attributable to the loss by Miva of any of its business
prospects or customers (including business of such business prospects or
customers), suppliers or employees (including, without limitation, any financial
consequence of such loss of customers (including business of such customers),
suppliers or employees) due primarily to the transactions contemplated hereby or
the public announcement of this Agreement, in each case arising after the date
of this Agreement.
(c) For purposes of this Agreement, a "Subsidiary" when used with
respect to any party means any individual partnership, firm, corporation,
association, trust, unincorporated organization (including any representative
office or branch) or other entity under the laws of any jurisdiction, (i) of
which such party or another subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or the Subsidiary of such party do not have 50% or more of the voting
interests in such partnership) or (ii) 50% or more of the securities or other
interests of which having by their terms ordinary voting power to elect at least
50% of the board of directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned
49
or controlled by such party or one or more of its subsidiaries (or if there are
no such voting securities or interests, 50% or more of the equity interests of
which is directly or indirectly owned or controlled by such party or one or more
of its subsidiaries).
(d) For purposes of this Agreement, "Affiliate" means a person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another person or beneficially
owns or has the power to vote or direct the vote of 10% of more of the voting
stock (or of any other form of general partnership, limited partnership or
voting equity interest in the case of a person that is not a corporation) of
such other person. For purposes of this definition, "control," including the
terms "controlling and "controlled" means through the ownership of voting
securities, by contract or credit arrangement, as trustee, partner or executor
or otherwise.
(e) For purposes of this Agreement, "Knowledge" means with respect
to any party the actual knowledge of the following individual or individuals:
(i) with respect to Miva, Xxxxxx Xxxxxx and Xxxxxxx Xxxxxxxx; and (ii) with
respect to FindWhat or Subcorp, Xxxxx Xxxxxxx-Xxxxxxxxx and Xxxxxxx Xxxxx.
9.3 Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one and the same Agreement. The parties may execute
more than one copy of the Agreement, each of which shall constitute an original.
9.4 Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) constitute the entire agreement among the
parties and supersede all prior agreements and understandings, agreements or
representations by or among the parties, written and oral, with respect to the
subject matter hereof and thereof.
9.5 Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended or shall be construed to create any third-party
beneficiaries, except to the extent provided herein with respect to Miva
Stockholders not party to this Agreement.
9.6 Governing Law; Venue.
(a) Except to the extent that the laws of the jurisdiction of
organization of any party hereto, or any other jurisdiction, are mandatorily
applicable to the Merger or to matters arising under or in connection with this
Agreement, this Agreement shall be governed by the laws of the State of
California without regard to its conflict of laws rules. Each of the parties
hereto agrees that a final judgment in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
(b) Each of the parties hereto irrevocably consents to the service
of any summons and complaint and any other process in any other action or
proceeding relating to the Merger, on behalf of itself or its property, by the
personal delivery of copies of such process to such party. Nothing in this
Section 9.6 shall affect the right of any party hereto to serve legal process in
any other manner permitted by law.
9.7 Arbitration. The parties to this Agreement shall submit to binding
arbitration before a single, neutral arbitrator of any dispute, controversy or
claim arising out of, or relating to, the transactions contemplated by this
Agreement or any breach hereof, provided, however, that the parties retain their
right to, and shall not be prohibited, limited or in any other way restricted
from, seeking or obtaining equitable relief from a court having jurisdiction
over the parties. Such arbitration shall be governed by and conducted through
the American Arbitration
50
Association in accordance with the Commercial Dispute Resolution Procedures. The
arbitration hearing shall be held in San Diego, California at a place to be
designated by the parties or, in the absence of their agreement, by the
arbitrator.
9.8 Specific Performance. The transactions contemplated by this
Agreement are unique. Accordingly, each of the parties acknowledges and agrees
that, in addition to all other remedies to which it may be entitled, each of the
parties hereto is entitled to a decree of specific performance, provided such
party is not in material default hereunder. The party prevailing in any
proceeding seeking such a decree shall be entitled to payment of all reasonable
legal fees and expenses by the non-prevailing party.
9.9 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns. Additionally, notwithstanding the foregoing
or anything to the contrary contained in this Agreement, FindWhat is
specifically permitted to adopt a holding company structure pursuant to Section
251(g) of the DGCL and assign this Agreement to the holding company or
consummate FindWhat's previously approved reincorporation into the State of
Delaware.
9.10 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expenses, subject to the following:
(a) All reasonable costs, fees, expenses and disbursements
(including attorneys' fees in an aggregate amount not to exceed $50,000)
incurred by FindWhat, in connection with, or relating to, the preparation of the
application and the conduct of the Fairness Hearing (the "Fairness Hearing
Expenses"), shall be deducted from the Merger Consideration as set forth in
Section 2.2(b).
(b) All reasonable costs, fees, expenses and disbursements
(including attorneys' fees) incurred by Miva, in connection with this Agreement
and the transactions contemplated hereby, including all such amounts incurred
after the Closing, that have not been paid by Miva prior to the Closing
(collectively, the "Estimated Transaction Expenses"), shall be payable from the
Merger Consideration as set forth in Section 2.2(c)(i). Any actual expenses in
excess of the Estimated Transaction Expenses shall be paid from the Escrow
Account as set forth in the Escrow Agreement prior to the final disbursement
therefrom. To the extent actual expenses are less than Estimated Transaction
Expenses, such excess shall be deposited into the Escrow Account prior to the
final disbursement therefrom.
9.11 Severability. The invalidity or unenforceability in whole or in part
of any covenant, promise or undertaking, or any section, subsection, sentence,
clause, phrase, word, or any of the provisions of this Agreement will not affect
the validity or enforceability of the remaining portions of this Agreement. If
for any reason, any provision is determined to be invalid or in conflict with
any existing, or future law or regulation by a court or agency having valid
jurisdiction, such will not impair the operation or have any other effect upon
such other provisions of this Agreement as may remain otherwise valid, and the
latter will continue to be given full force and effect and bind the parties
hereto.
51
9.12 Letter of Intent. FindWhat and Miva acknowledge and agree that the
execution and delivery of this Agreement by the parties hereto terminates the
Letter of Intent and that their respective obligations thereunder are hereby
null and void.
9.13 Amendment. This Agreement may be amended only by agreement in
writing executed by all of the parties hereto; provided, however, that FindWhat
and Miva shall be entitled to amend, and to deliver at closing as so amended,
the FindWhat Disclosure Schedule and the Miva Disclosure Schedule, respectively,
without the written consent of the other parties hereto; provided further, that
no amendment to Section 3.14 in the FindWhat Disclosure Schedule or to Section
4.10 in the Miva Disclosure Schedule shall restrict or prohibit the right of the
parties to terminate this Agreement pursuant to Section 7.1.
52
IN WITNESS WHEREOF, FindWhat, Subcorp, Miva and the Miva Principal
Stockholders have signed this Agreement and Plan of Merger as of the date first
written above.
XXXXXXXX.XXX
By: /s/ Xxxxx Xxxxxxx-Xxxxxxxxx
--------------------------------------------------
Name: Xxxxx Xxxxxxx-Xxxxxxxxx
Title: Chairman, Chief Executive Officer and President
CLOSE REACH MERGER CORP.
By: /s/ Xxxxx Xxxxxxx-Xxxxxxxxx
--------------------------------------------------
Name: Xxxxx Xxxxxxx-Xxxxxxxxx
Title: President
MIVA CORPORATION
By: /s/ Xxx Xxxxxx
--------------------------------------------------
Name: Xxx Xxxxxx
Title: Chief Executive Officer and President
MIVA PRINCIPAL STOCKHOLDERS
/s/ Xxxxxx Xxxxxx
------------------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxx XxXxxxxxx
------------------------------------------------------
Xxxx XxXxxxxxx
/s/ Mony Iem
------------------------------------------------------
Mony Iem
SUMITOMO CORPORATION
By: /s/ Xxxxxxx Xxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager, Information & Electric Systems Dept.
INTERNET RESEARCH INSTITUTE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President, CEO
