$27,500,000 NOTE PURCHASE AGREEMENT
dated as of May 5, 1999
between
XXXXXXXX.XXX, INC.
and INTUIT INC.
TABLE OF CONTENTS
-----------------
1. PURCHASE, SALE AND TERMS OF NOTE........................................ 1
1.01. Authorization of Notes........................................ 1
1.02. The Shares.................................................... 1
1.03. Purchase Price and Closing.................................... 1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 2
2.01. Organization, Standing and Power.............................. 2
2.02. Authority; Enforceability No Conflict......................... 2
2.03. Capitalization................................................ 3
2.04. Subsidiaries.................................................. 6
2.05. Status of Note and Shares..................................... 6
2.06. Financial Statements.......................................... 6
2.07. Actions Pending............................................... 6
2.08. Compliance with Law........................................... 7
2.09. No Material Adverse Change.................................... 7
2.10. Certain Fees.................................................. 7
2.11. Disclosure.................................................... 7
2.12. Securities Act of 1933........................................ 8
2.13. Governmental Approvals........................................ 8
2.14. Unites States Real Property Holding Corporation............... 8
2.15. Representations Under Series B Purchase Agreeement............ 8
2.16. Year 2000 Compliances......................................... 8
2.17. Patents and Other Proprietary Rights.......................... 9
2.18. No Conflict of Interest....................................... 10
2.19. Merger or Sale................................................ 10
2.20. Disclosure.................................................... 10
2.21. Tax Returns and Payments...................................... 11
2.22. Labor Agreements and Actions.................................. 11
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................... 11
3.01. Organization and Standing of the Purchaser.................... 11
3.02. Authority; Enforceability; No Conflict........................ 11
3.03. Acquisition for Investment.................................... 12
3.04. Financing..................................................... 12
4. CONDITIONS TO PURCHASER'S OBLIGATIONS FOR CLOSING....................... 12
4.01. Representations and Warranties................................ 13
4.02. Secretary's Certificate....................................... 13
4.03. Officer's Certificate......................................... 13
4.04. Series E Preferred Stock...................................... 13
4.05. Consents, Licenses, Approvals, etc............................ 13
4.06. Good Standing Certifcates..................................... 13
4.07. No Proceedings or Litigation.................................. 14
4.08. [Intentionally Omitted]....................................... 14
4.09. Legal Opinions................................................ 14
4.10. Consents and Waivers of Equity Holders........................ 14
4.11. Other Consents................................................ 14
4.12. Expenses...................................................... 14
4.13. Compliance with this Agreement................................ 14
4.14. Proceedings Satisfactory...................................... 14
4.15. Proxy......................................................... 15
5. COVENANTS OF THE COMPANY
5.01. Covenants of the Company Under the Series B Purchase
Agreement..................................................... 15
5.02 Future Senior Subordinated Obligations........................ 15
5.03. Issuance of Equity Securities................................. 15
6. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTE......................... 16
6.01. Note Register; Ownership of Notes............................. 16
6.02. Transfer and Exchange of the Note............................. 16
6.03. Replacement of Notes.......................................... 16
7. PAYMENTS ON NOTES; REDEMPTION; CONVERSION............................... 16
7.01. Place of Payment.............................................. 16
7.02. [Intentionally Omitted]....................................... 16
7.03. Mandatory Redemption.......................................... 16
7.04. Optional Redemption........................................... 17
7.05. [Intentionally Omitted]....................................... 17
7.06. Maturity; Surrender; etc...................................... 17
7.07. Conversion Privilege.......................................... 17
8. SUBORDINATION OF SENIOR SUBORDINATED OBLIGATIONS........................ 18
8.01. Generally..................................................... 18
8.02. Restrictions.................................................. 18
8.03. Permitted Payments............................................ 18
8.04. Turnover of Payments.......................................... 19
8.05. Insolvency, etc............................................... 19
8.06. Obligations Not Impaired...................................... 19
8.07. Payment of Senior Xxxx; Subrogation........................... 19
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9. EVENTS OF DEFAULT AND ACCELERATION...................................... 20
10. REMEDIES ON DEFAULT, ETC................................................ 21
10.01. Remedies...................................................... 21
10.02. Annulment of Defaults......................................... 21
10.03. Waivers....................................................... 22
11. DEFINITIONS AND ACCOUNTING TERMS........................................ 22
11.01. Certain Defined Terms......................................... 22
11.02. Accounting Terms.............................................. 27
12. INDEMNIFICATION......................................................... 27
12.01. General Indemnity............................................. 27
12.02. Indemnification Procedures.................................... 27
13. MISCELLANEOUS........................................................... 29
13.01. No Waiver; Cumulative Remedies................................ 29
13.02. Amendment, Waivers and Consents............................... 29
13.03. Addresses for Notices......................................... 29
13.04 Costs, Expenses and Taxes..................................... 30
13.05 Binding Effect ; Assignment................................... 30
13.06. Survival of Representations and Warranties.................... 30
13.07. Prior Agreements.............................................. 31
13.08. Severability.................................................. 31
13.09. Confidentiality............................................... 31
13.10. Governing Law................................................. 31
13.11. Headings...................................................... 31
13.12. Counterparts.................................................. 31
13.13. Further Assurances............................................ 32
13.14. Waiver........................................................ 32
13.15. Specific Enforcement.......................................... 32
iii
$27,500,000 NOTE PURCHASE AGREEMENT
Dated as of May 5, 1999.
Intuit Inc.
Ladies and Gentlemen :
XXXXXXXX.XXX, INC., a Florida coporation (the "company"), hereby agrees
with Intuit Inc. as follows :
1. PURCHASE, SALE AND TERMS OF NOTE
1.01. Authorization of Note. The Company has authorized the issuance
and sale of a $27,500,000, 12% Seniuor Subordinated Convertible Note (the
"Note") due May 5, 2001 (the "Final Maturity Date"), to be substantially in the
form of Exhibit A and to be convertible into shares of Series E Preferred Stock
or Common Stock as provided in Section 7.07.
1.02. The Shares. The Company has authorized and has reserved and
covenants to continue to reserve, free of preemtive rights and other similar
contractual rights of stockholders, (a) a sufficient number of authorized but
unissued shares of Series E Preferred Stock (the "Preferred Shares") to satisfy
the rights of conversion of the Note, and (b) a sufficient number of authorized
but unissued shares of Common Stock (the "Common Shares") to satisfy the rights
of conversion of the Note or Preferred Shares.
1.03. Purchase Price and Closing. The Company agrees to issue and sell
to Intuit Inc. (the "Purchaser") and, in consideration of and in express
reliance upon the representations, warranties, covenants, terms and conditions
of this Agreement, the Purchaser Agrees to purchase the Note for an amount equal
to one hundred percent (100%) of the principal amount thereof. The closing of
the purchase and sale of the Note hereunder (the "Closing") shall take place at
the offices of Messrs. LeBoeuf, Lamb, Greens and MacRac, L.L.P., 000 Xxxxxx
Xxxxxxx, Xxxxxxx, XX 00000 at 10:00 a.m. on May 5, 1999, or at such time and
date thereafter as the Purchaser and the Company may agree (the "Closing Date").
At the Closing, the Company will deliver to the Purchaser the Note against
delivery of a check or checks payable to the order
of the Company, or a transfer of funds to the account of the Company by wire
transfer, representing the net cash consideration for the Note.
1.04. Use of Proceeds. The Company shall use the cash proceeds from the
sale of the Note for general working capital purpose.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
2.01. Organization, Standing and Power. Each of the Company and the
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of the
Company and the Subsidiaries has all requisite power and authority to own, lease
and operate its properties and assets and to conduct its business as now being
conducted and is duly qualified to do business in good standing in those foreign
jurisdictions in which such qualification is required.
2.02. Authority; Enforceability; No Conflict. The Company has all
requisite corporate power and authority to enter into this Agreement to issue,
and sell the Note, and to carry out its obligations hereunder. The execution
delivery and performance of this Agreement by the Company and the issuance and
sale of the Note by the Company have been duly and validly authorized by all
requisite corporate proceedings on the part of the Company. This Agreement when
executed and delivered by the Company is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium, rehabilitation, liquidation, conservatorship,
receivership, or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any preceeding therefor
may be brought. Except as set forth on Schedule 2.02, the execution and delivery
of the Agreement by the Company does not, and the consummation by the Company of
the transactions contemplated hereby and thereby will not result in or
constitute; (a) a default, breach or violation of or under the Articles of
Incorporation or the By-laws, (b) a default, breach or violation of or under any
mortgage, deed of trust, indenture, note, bond, license, lease agreement or
other instrument or obligation to which the Company or any Subsidary is a party
or by which any of their respective properties or assets are bound, (c) a
violation of any statue, rule, regulation, order, judgement or decree of any
court, public body or authority by which the Company, any Subsidiary or any of
their respective properties or assets are bound, (d) an event which (with notice
or lapse of time or both) would permit any Person to terminate, accelerate the
performance required by, or accelerate the maturity of any indebtedness or
obligation of the Company or any Subsidiary under
2
any agreement or commitment to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound or by which any of
their respective properties or assets are bound, (e) the creation or imposition
of any lien, charge or encumbrance on any property of the Company or any
Subsidiary under any agreement or commitment to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or by
which any of their respective properties or assets are bound, or (f) an event
which would require any consent under any agreement to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or by
which any of their respective properties or assets are bound.
2.03. Capitalization. The authorized capital stock of the Company
consists of:
(a) 30,000,000 shares of Common Stock, of which (1) 1,385,457
shares are outstanding, (2) 225,225 are reserved for issuance upon conversion of
the Series A Preferred Stock, (3) 1,171,191 are reserved for issuance upon
conversion of the Series B Preferred Stock, (4) 1,107,000 are reserved for
issuance upon conversion of the Series C Preferred Stock, (5) 1, 350,000 are
reserved for issuance upon conversion of the Series D Preferred Stock, (6)
500,000 are reserved for issuance upon conversion of the Series E Preferred
Stock or this Note, (7) 100,000 are reserved for issuance upon conversion of the
Special Preferred Stock (Northern California Division). (8) 3,000,000 are
reserved for issuance under the Company's stock option plan, (9) 247,500 are
reserved for issuance upon the exercise of warrants held by former 14%
Subordinated Debenture holders, (10) 500,000 are reserved for issuance upon the
exercise of warrants held by Superior Bank, FSB, pursuant to a Sale and
Marketing Agreement dated as of April 28, 1995, as amended between the Company
and Superior Bank, FSB (the "Sale and Marketing Agreement"), (11) 13,333 are
reserved for issuance upon conversion of the 12% Convertible Debenture maturing
May 1, 1999, (12) 25,000 are reserved for issuance upon the exercise of options
held by Xxxx Xxxxxxx and Xxxx Xxxxxxx (the "Buscema Options"). (13) 100,000 are
reserved for issuance upon conversion of rights, in the Releads Group held by
Xxxx Xxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxxxx under an Agreement for Operation of
First Realty Network, Inc., dated as of December 5, 1996, as amended (the " FRN
Agreement"); (14) 109,728 are reserved for issuance upon the exercise of the
warrants held or which may be obtained by FirstMN, LLC (other than as former 14%
Subordinated Debenture holder,) (15) 92,436 are reserved for issuance upon the
exercise of warrants held by Xxxxxxx Xxxxx & Associates, Inc., (16) 50,000 are
reserved for issuance upon the exercise of warrants held by former holders or
12% Senior Subordinated Convertible Notes dated August 31, 1997, (17) 66,667 are
reserved for issuance upon the exercise of warrants held by former holders of
12% Senior Subordinated Convertible Notes dated January 30, 1998, (18) 100,000
are reserved for issuance pursuant to the exercise of warrants which may be
earned by Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxx Xxxxx,
3
pursuant to the merger agreement with RM Holdings, Inc., (19) 36,000 are
reserved for issuance upon the exercise of warrants held by Xxxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx, (20) 100,000 are reserved for issuance
upon conversion of rights held by Xxxxxx.xxx, LLC under the Domain Name
Assignment Agreement dated as of January 1, 1999, between the Company and
Xxxxxx.xxx LLC (the "Domain Name Assignment"), (21) 6,668 are reserved for
issuance upon exercise of the warrants held by holders of the 12% Senior
Subordinated Notes dated February 9, 1999, (22) 53,344 are reserved for issuance
upon exercise of warrants held by holders of the 12% Senior Subordinated Notes
dated February 26, 1999, (23) 20,000 are reserved for issuance upon exercise of
warrants held by holders of 12% Senior Subordinated Notes dated April 19, 1999,
(24) 4,000 are reserved for issuance upon exercise of warrants held by Mortgage
Loan Specialties, Inc. and First Capital Corporation of Los Angeles and (25)
8,000 are reserved for issuance upon exercise of warrants held by Xxxxx
Xxxxxxxxxx.
(b) 15,000,000 shares of Preferred Stock, of which (ii) 225,225
have been designated Series A Preferred Stock (all of which are outstanding),
(ii) 1,000 have been designated Special Preferred Stock (Northern California
Division) (all of which are outstanding), (iii) 1,171,191 have been designated
Series B Preferred Stock (959,614 of which are outstanding), (iv) 1,107,000 have
been designated Series C Preferred Stock (739,336 of which are outstanding), (v)
1,350,000 have been designated Series D Preferred Stock (1,273,898 of which are
outstanding and 18,650 of which have been reserved for issuance upon exercise of
warrants held by Dominion Fund III), and (vi) 500,000 have been designated
Series E Preferred Stock (458,334 of which have been reserved for issuance upon
conversion of the Note). All of the outstanding shares of Common Stock, Series
A Preferred Stock, Special Preferred Stock (Northern California Division),
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
have been duly authorized and validly issued, and are fully-paid and
non-assessable.
Except (i) the Preferred Stock referred to herein (ii) options and
warrants referred to herein, (iii) as required by the Sale and Marketing
Agreement, (iv) as required by the Series B Preferered Stock Purchase Agreement
dated as of March 29, 1996 among the Company, Purchasers of the Series B
Preferred Stock, purchases of the Series C Preferred Stock, purchasers of the
Series D Preferred Stock, Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxx Xxxxx, as
amended ("Series B Purchase Agreement"), (v) as required by the Operating
Agreement for the Northern California Division dated July 1, 1997 among the
Company. Xxxxx-XxXxxxxx Real Estate, Inc. and Xxxx Xxxxx ("Operating
Agreement"), as amended, (vi) as required by the Agreement Relating to Purchase
of Xxxx Xxxxx'x Rights in Northern California Division dated as of January 1,
1998, between the Company and Xxxx Xxxxx, (vii) as required by the Employment
Agreement dated July 18, 1997 between the Company and Xxxxx Xxxxxx, (viii) as
required by the Employment Agreements dated on or about January 28, 1998,
between the Company and Xxxx X. Xxxxxxx, Xxxxx
4
Xxxxxx and Xxxxxxx Xxxxxx, (ix) as required by the Domain Name Assignment
Agreement, (x) as required by the Technology Member Correspondent Agreement
dated on or about November 1, 1998, between the Company and Mortgage Loan
Specialists, Inc. and (xi) as required by the Technology Member correspondent
Agreement dated on or about November 1, 1998, between the Company and First
Capital Corporation of Los Angeles, there are no outstanding preemptive,
conversion or other rights, options, warrants or agreements granted or issued by
or binding upon the Company for the purchase of acquisition of any shares of
capital stock of the Company or any other securities convertible into,
exchangeable for or evidencing the right to subscribe to any shares of such
capital stock.
All outstanding shares of capital stock, convertible securities,
rights, options and warrants of the Company are owned by the stockholders and in
the numbers specified on Schedule 2.03. Except as required by the terms of the
Buscema Options, the Special Preferred Stock (Northern California Division), the
contingent repurchase rights of Superior Bank, F.S.B. under the Sale and
Marketing Agreement, the Agreement dated as of April 1, 1998, between the
Company and Superior Bank, F.S.B., the FRN Agreement, the Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred
Stock, the Operating Agreement and the Domain Name Assignment Agreement, the
Company is not subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or reetire any shares of its capital stock or any
convertible securities, rights or options of the type described in the preceding
sentence.
Except as required by the terms of the Registration Rights Agreement
dated May 1, 1996, between the Company and Xxxxxxx Xxxxx & Associates, Inc., the
Registration Rights Agreement dated March 15, 1996, between the Company and
Xxxxx-XxXxxxxx Real Estate, Inc., the Operating Agreement, the Series B Purchase
Agreement, as amended, registration rights held by Dominion Fund III under the
Warrant to Purchase Shares of Series D Preferred Stock dated April 1, 1998 and
the Registration Rights Agreement dated as of January 1, 1999, between the
Company and Xxxxxx.xxx, LLC, the Company is not a party to any agreement
granting registration rights to any person with respect to any of its equity of
debt securities.
Except as set forth in the Related Agreements and the Xxxxx-XxXxxxxx
Merger Agreement (which restricts the transfer of the Special Preferred Stock
Northern California Division)), the Company is not a party to, and it has no
knowlege of, any agreement restricting the voting or transfer of any shares of
the capital stock of the Company other than agreements enforcing restrictions
under state and federal securities laws. The offer and sale of all capital
stock, convertible securities, rights or options of the Company issued prior to
the Closing Date complied with or was exempt from all applicable federal and
state securities laws and no stockholder has a right of recission or damages
with respect thereto.
5
2.04. Subsidiaries. Schedule 2.04 sets forth each Subsidiary and each
Independent Division, showing the jurisdiction of the incorporation or
organization of each Subsidiary and showing the percentage of each Person's
ownership of the outstanding stock or other interests of each such Subsidiary or
Independent Division. All of the outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued, and are fully paid and
non-assessable. Except as set forth on Schedule 2.04 (i) there are no
outstanding preemptive, conversion or other rights, options, warrants or
agreements granted or issued by or binding upon any Subsidiary or the Company
with respect to any Subsidiary or Independent Division for the purchase or
acquisition of any shares of capital stock of any Subsidiary or any other
securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock or any other similar ownership
interests of any Independent Division and (ii) neither the Company nor any
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of capital stock or any convertible
securities, rights, options or warrants of any Subsidiary or similar ownership
interests of any Independent Division. Except as set forth herein, neither the
Company nor any Subsidiary is a party to, nor has any knowledge of, any
agreement restricting the voting transfer of any shares of the capital stock of
any Subsidiary or similar ownership interests of any independent Division.
2.05. Statue of Note and Shares. The Note to be issued at the Closing
has been duly authorized by all necessary corporate action on the part of the
Company. The shares have been duly authorized by all necessary corporate action
on the part of the Company and have been duly reserved for issuance. When the
Shares are issued such shares will be validly issued and outstanding, fully paid
and nonassessable and the issuance of such shares will not be subject to
preemptive or other similar contractual rights of any other stockholder of the
Company.
2.06. Financial Statements. As set forth on Schedule 2.06 hereto, the
audited consolidated balance sheet of the Company and the Subsidiaries as at
December 31, 1998, and the related consolidated income statements and statments
of cash flows and changes in stockholders' equity of the Company and the
Subsidiaries' for the fiscal periods then ended, together with the opinion
thereon of KPMG Peat Marwick LLP, independant certified public accountants, are
complete and correct in all material respects and fairly present the financial
condition of the Company and the Subsidiaries at such dates and the results of
the operations of the Company and the Subsidiaries for the periods covered by
such statements, all in accordance with GAAP consistently applied.
2.07. Actions Pending. There is no action, suit, claim, investigation
or proceeding pending or, to the knowlege of the Company threatened against the
Company or any Subsidiary which questions the validity of this Agreement or any
of the Related Agreements or any action taken or to be taken, pursuant hereto or
thereto.
6
Except as set forth on Schedule 2.07, there is no action, suit, claim,
investigation or proceeding pending or, to the knowledge of the Company,
threatened, against or involving the Company, any Subsidiary or any of their
respective properties or assets. There are no outstanding orders, judgments,
injunctions, awards or decrease of any court, arbitrator or governmental or
regulatory body against the Company or any Subsidiary.
2.08. Compliance with Law. The business of the Company and the
Subsidiaries has been and is presently being conducted so as to comply with all
applicable federal, state, and local governmental laws, rules, regulations and
ordinances (including, without limitation, all rules and regulations pertaining
to the producing, processing, underwriting, selling and servicing of residential
mortgage loans, loan brokerage operations and the sale of "business
opportunities"). Each of the Company and the Subsidiaries has all franchises,
permits, licenses, consents and other governmental or regulatory authorizations
and approvals necessary for the conduct of its business as now being conducted
by it.
2.09. No Material Adverse Change. Except as set forth on Schedule 2.09.
since December 31, 1998, (a) there has been no material adverse change in the
business, assets, operations, affairs, prospects or financial condition of the
Company or any Subsidiary; and (b) neither the business, financial condition,
operation, prospects or affairs of the company, any Subsidiary nor any of their
respective properties or assets have been adversely affected in any material
respect as the result of any legislative or regulatory change, any revocation or
change in any franchise, permit, license or right to do business, or any other
event or occurrence, whether or not insured against.
2.10. Certain Fees. No broker's, finder's or financial advisory fees or
commissions will be payable by the Company or any Subsidiary with respect to the
transactions contemplated by this Agreement and the Related Agreements.
2.11. Disclosure. Neither this Agreement or the Schedules hereto, nor
any other document, certificate or instrument furnished to the Purchaser by or
on behalf of the Company in connection with the transactions contemplated by
this Agreement, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading. The parties further agree that any agreement, event,
condition or other item which is disclosed on a particular Schedule hereto shall
be deemed to be disclosed for the purposes of all other Schedules to which it is
relevant, provided that all of the terms or effects of any such item which are
relevant to any Schedule hereto are adequately disclosed.
7
2.12. Securities Act of 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Note and the Shares hereunder. Neither the
Company nor anyone acting on its behalf has or will sell, offer to sell or
solicit offers to buy the Note or similar securities to, or solicit offers with
respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any Person, so as to bring the issuance and
sale of the Note under the registration provisions of the Securities Act and
applicable state securities laws.
2.13. Governmental Approvals. Except as set forth on Schedule 2.13 and
except for the filing of any notice prior or subsequent to the Closing that may
be required under applicable state and/or federal securities laws (which, if
required, shall be filed or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary for, or in connection with, the execution and
delivery by the Company of this Agreement, for the offer, issue, sale, execution
or delivery of the Note, or for the performance by the Company of its
obligations under this Agreement.
2.14. United States Real Property Holding Corporation. Neither the
Company nor any Subsidiary is now nor has ever been a "United States Real
Property Holding Corporation" as defined in Section 897(c)(2) of the Code and
Section 1.897-2(b) of the Regulations promulgated by the Internal Revenue
Service.
2.15. Representations Under Series B Purchase Agreement. Except as set
forth on Schedule 2.15, the representations and warranties of the Company set
forth in Article 2 of the Series B Purchase Agreement are true and correct and
with the same effect as though made at and as of the date hereof, except for
those representations and warranties which speak of a specific date which remain
true and correct as of such date.
2.16. Year 2000 Compliance. The Company's web site and all of the
services and products of the Company, both individually and when operating in
conjunction with all other systems or products with which they are designed to
interface, are Year 2000 Compliant. "Year 2000 Compliant" means that such
hardware or software will: (a) process date data from at least the years 1900
through 2101 without error or interruption; (b) maintain functionality with
respect to the introduction, processing, or output of records containing dates
falling on or after January 1, 2000; and (c) be inoperable with other software
or hardware which may deliver records to, receive records from, or interact with
such hardware or software in the course of conducting the business of the
Company, including processing data and providing the services offered by the
Company. All of the Company's internal computer systems are, both individually
and in conjunction with all other systems with which they interface, Year 2000
Compliant. The Company has made inquiries
8
of its manufacturers, suppliers and customers and, to its knowledge, the Company
is not relying on any third party whose systems are not Year 2000 Compliant.
Except as set forth on Schedule 2.16, the Company does not have any material
expenses or other material liabilities associated with securing Year 2000
Compliance, or making contingency arrangements to address Year 2000 Compliance
issues, with respect to the Company's web site, services or products, internal
computer systems or the computer systems or products or services of the
Company's manufacturers, suppliers or customers.
2.17. Patents and Other Proprietary Rights. Except as set forth on
Schedule 2.17, (a) To the knowledge of the Company after reasonable inquiry; (l)
the Company has sufficient title and ownership of all patents, patent
applications, trademarks, service marks, mask works, trade names, copyrights,
trade secrets, information, proprietary rights and processes ("Intellectual
Property") necessary for its business as now conducted, and believes it can
obtain, on commercially reasonable terms, any additional rights necessary for
its business as contemplated at the Closing, and (ii) the Company's Intellectual
Property does not, and would not, conflict with or constitute an infringement of
the rights of others;
(b) There are no outstanding options, licenses, or agreements of
any kind that grant rights to any other Person to manufacture, license,
products, assemble, market or sell the Company's products or services, nor is
the Company bound by or a party to any options, licenses, or agreements of any
kind with respect to the patents, trademarks, service marks, trade name,
copyrights, trade secrets, licenses, information, proprietary rights, and
processes of any other person or entity;
(c) The Company has not received any communications alleging that
the Company or its employees has violated or infringed or, by conducting its
business as proposed, would violate on infringe any of the patents, trademarks,
service marks, trade names, copyrights, or trade secrets, or any proprietary
rights of any other person or entity;
(d) To the knowledge of the Company after reasonable inquiry, no
employee is obligated under any applicable law or under any contract (including
licenses, covenants, or commitments of any nature) or other agreement, or
subject to any judgment, decree, or order of any court or administrative agency,
that would interfere with the use of such employee's best efforts to promote the
interests of the Company or that would conflict with the Company's business as
contemplated at the Closing; and
(e) Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as contemplated at the Closing, will, to the
Company's knowledge, conflict with or result in a breach of the terms,
conditions,
9
or provisions of, or constitute a default under, any contract, covenant, or
instrument under which any of such employees is now obligated. The Company does
not believe it is or will be necessary to utilize any inventions of any of its
employees (or people it currently intends to hire) made prior to their
employment by the Company where the Company does not otherwise have good title
or valid license to such inventions.
2.18. No Conflict of Interest. Except as set forth on Schedule 2.18,
(i) the Company is not indebted, directly or indirectly, to any of its officers
or directors or to their respective spouses or children, in any amount
whatsoever other than in connection with expenses or advances of expenses
incurred in the ordinary course of business; (ii) to the best of the Company's
knowledge, none of the Company's officers or directors, or any members of their
immediate families, are, directly or indirectly, indebted to the Company (other
than in connection with purchases of the Company's stock) or have any direct or
indirect ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company except that officers, directors
and/or shareholders of the Company may own stock in (but not exceeding two
percent of the outstanding capital stock of) any publicly traded companies that
may compete with the Company; (iii) to the best of the Company's knowledge, none
of the Company's officers or directors or any members of their immediate
families are, directly or indirectly, interested in any material contract with
the Company; and (iv) the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
2.19. Merger or Sale. The Company has not engaged in the past three (3)
months in any discussion (i) with any representative of any corporation or
corporations, except for the Purchaser, regarding the merger of the Company with
or into any such corporation or corporations, except to the extent such merger
has become effective prior to the date hereof, (ii) with any representative of
any corporation, partnership, association or other business entity or any
individual, except for the Purchaser, regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company would be disposed of, or (iii)
regarding any other form of liquidation, dissolution or winding up of the
Company.
2.20. Disclosure. The Company has fully provided Purchaser with all the
information that Purchaser has requested for deciding whether to purchase the
Note and all information that the Company believes is reasonably necessary to
enable Purchaser to make such a decision, including certain of the Company's
projections describing its proposed business (collectively, the "Business
Plan"). No representation or warranty of the Company contained in this Agreement
and the exhibits attached hereto, any certificate furnished or to be furnished
to Purchaser at the Closing, or the Business Plan (when read together) contains
any untrue statement
10
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. To the extent the Business Plan was
prepared by management of the Company, the Business Plan and the financial and
other projections contained in the Business Plan were prepared in good faith;
however, the Company does not warrant that it will achieve such projections.
2.21. Tax Returns Payments. The Company has filed all tax returns and
reports as required by law. These returns and reports are true and correct in
all material respects. The Company has paid all taxes and other assessments due.
2.22. Labor Agreements and Actions. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company, nor is the Company aware of any
labor organization activity involving its employees. The employment of each
officer and employee of the Company is terminable at the will of the Company.
The Company has complied in all material respects with all applicable state and
federal equal employment opportunity laws and with other laws related to
employment.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
3.01. Organization and Standing of the Purchaser. The Purchaser is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
3.02. Authority; Enforceability; No Conflict. The Purchaser has all
requisite power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by the Purchaser has been duly and validly authorized by all requisite
proceedings on the part of the Purchaser. This Agreement when executed and
delivered by the Purchase is a valid and binding obligation of the Purchaser,
enforceable against it in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, rehabilitation, liquidation, conservatorship, receivership or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
11
of the court before which any proceeding therefore may be brought. The execution
and delivery of this Agreement by the Purchaser does not, and consummation by
the Purchaser of the transactions contemplated hereby will not, result in or
constitute (a) a default, breach or violation of or under the organizational
documents of the Purchaser, (b) a default, breach or violation of or under any
mortgage, deed of trust, indenture, note, bond, license, lease agreement or
other instrument or obligation to which the Purchaser is a party or by which any
of its properties or assets are bound, except for any defaults, breaches or
violations which would not, individually or in the aggregate, have Material
Adverse Effect on the Purchase or prevent or materially delay the consummation
by the Purchaser of the transactions contemplated hereby, or (c) a violation of
any statute, rule, regulation, order, judgment or decree of any court, public
body or authority, except for any violations which would not, individually or in
the aggregate, have Material Adverse Effect on the Purchaser or prevent or
materially delay the consummation by the Purchaser of the transactions
contemplated hereby.
3.03. Acquisition for Investment. The Purchaser is an "accredited
investor" as defined in Regulation D under the Securities Act, and is acquiring
the Note solely for its own account for the purposes of investment and not with
a view to or for sale in connection with any distribution thereof, and it has no
present intention or plan to effect any distribution of the Note. The Purchaser
acknowledges that it is able to bear the financial risks associated with an
investment in the Note and that it has been given full access to such records of
the Company and the Subsidiaries and to the officers of the Company and the
Subsidiaries as it has deemed necessary and appropriate to conducting its due
diligence investigation. The Note may bear a legend to the following effect:
"This security has not been registered under the Securities
Act of 1933, as amended, or the laws of any state and may
not be sold or transferred except in compliance with that
Act and such laws."
3.04. Financing. The Purchaser has sufficient funds and will have
sufficient funds at all times through the Closing Date to consummate the
transactions contemplated hereby. The Purchaser will not be rendered insolvent
by reason of its investments in the Company nor will be left with unreasonably
small capital for purposes at operating its businesses.
4. CONDITIONS TO PURCHASER'S OBLIGATIONS FOR CLOSING
The obligation of the Purchaser to purchase and pay for the Note to be
purchased by it at the Closing is subject to the following conditions:
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4.01. Representations and Warranties. Each of the representations and
warranties set forth in Section 2 hereof shall be true, accurate and correct at
the Closing Date with the same effect as though made at end as of such time.
4.02. Secretary's Certificate. The Purchaser shall have received a
certificate of the Secretary or an Assistant Secretary of the Company, dated
the Closing Date, (a) attesting to corporate action taken by the Company,
including resolutions of the Board of Directors authorizing (i) the execution,
delivery and performance by the Company of this Agreement, (ii) the issuance of
the Note to be issued to the Purchaser, (iii) the amendment of the Company's
Articles of Incorporation to authorize Series E Preferred Stock, and (iv) the
execution, delivery and performance by the Company of all other agreements or
matters contemplated hereby or executed in connection herewith, (b) certifying
the names and true signatures of the officers or the Company authorized to sign
this Agreement, the Note, and the other documents, instruments or certificates
to be delivered pursuant hereto and thereto, together with the true signatures
of such officers and (c) verifying that the Articles of Incorporation and the
By-Laws (see attached thereto) are true, correct and complete as of the Closing
Date.
4.03. Officer's Certificate. The Purchaser shall have received a
certificate of the President and Treasurer of the Company (an "Officer's
Certificate"), dated the Closing Date, which shall certify that the
representations and warranties contained in Section 2 hereof are true and
correct as of the Closing Date and that all conditions required to be performed
prior to or at the Closing have been performed as of the Closing Date.
4.04. Series E Preferred Stock. The Company shall have amended and
restated its Articles of Incorporation in the form attached as Exhibit B. The
Company shall not take any corporate action or otherwise amend its Articles of
Incorporation prior to the conversion of the Note hereunder without the written
consent of the holder of the Note, if such corporate action or amendment would
change any of the rights, preferences, privileges of or limitations provided in
the Company's Articles of Incorporation with respect to the Series E Preferred
Stock.
4.05. Consents, Licenses, Approvals, etc. The Purchaser shall have
received certified true copies of all consents, licenses and approvals required
or advisable in connection with the execution, delivery, performance, validity
and enforceability of this Agreement, and such consents, licenses and approvals
shall be in full force and effect and be reasonably satisfactory in form and
substance to the Purchaser.
4.06. Good Standing Certificates. The Purchaser shall have received a
certificate of the appropriate public official in the jurisdiction of
incorporation of the Company and each Subsidiary as to the due incorporation and
good standing of the
13
Company and such Subsidiary together with, in the case of the Company, a
certified copy of the Articles of Incorporation of the Company.
4.07. No Proceedings of Litigation. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any Subsidiary, or any of the officers or directors of
the Company or any Subsidiary seeking to restrain, prevent or change the
transactions contemplated by this Agreement, or seeking damages in connection
with such transactions.
4.08. [Intentionally Omitted]
4.09. Legal Opinions. The Purchaser shall have received a legal opinion
from Xxxxx & Xxxxxxx, counsel to the Company, dated the Closing Date and
substantially in the form of opinion attached as Exhibit C.
4.10. Consents and Waivers of Equity Holders. The Company shall have
obtained written agreements from a majority of the holders of each of the Series
A, Series B, Series C and Series D Preferred Stock consenting to the issuance of
the Note and to the establishment and conversion of the Series E Preferred Stock
and waiving any rights of first offer such holders may otherwise have with
respect to the issuance of the Note or the Shares.
4.11. Other Consents. The Company shall have obtained consent to the
transactions contemplated hereby from Xxxxxx River Funding, Inc. Residential
Funding Corporation and Bank United pursuant to the terms of the Xxxxxx River
Funding Agreement, Residential Funding Agreement and Bank United Funding
Agreement, respectively. The Company shall have obtained a written agreeement
from Superior Bank FSB that the transactions contemplated hereby do not
constitute a "Material Transaction Event" in accordance with the provisions of
that certain Buyback Agreement by and between the Company and Superior Bank FSB,
dated April 1, 1998.
4.12. Expenses. All fees and disbursements required to be paid pursuant
to Section 13.04 hereof shall have been paid in full.
4.13. Compliance with this Agreement. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
4.14. Proceedings Satisfactory. All proceedings taken in connection
with the issuance and sale of the Note and all documents and papers relating
thereto shall be satisfactory in form and substance to the Purchaser. The
Purchaser shall have
14
received copies of such documents and papers as they may reasonably request in
connection with this Agreement.
4.15. Proxy. The Xxxx Xxxxxx Revocable Trust shall have executed an
irrevocable proxy in favor of the Purchaser in the form attached as Exhibit D.
5. COVENANTS OF THE COMPANY
5.01. Covenants of the Company Under the Series B Purchase Agreement.
The Company covenants and agrees that on and after the Closing Date and until
the earlier of (i) the date on which the Note shall be paid in full and Shares
shall no longer be held of record by the Purchaser or (ii) the consummation of a
Qualified Public Offering (as defined in the Series B Purchase Agreement) it
will comply, for the benefit of the Purchaser, in all respects with the
covenants of the Company set forth in Articles 6 and 7 of the Series B Purchase
Agreement.
5.02. Future Senior Subordinated Obligations. The Company covenants and
agrees that on or after the Closing Date, it will not incur any liability for
borrowed money evidenced by a note or similar obligation, other than Senior
Debt, Future Senior Subordinated Obligations and trade accounts payable incurred
in the ordinary course of business, which is not expressly subordinate to,
junior in right of payment by its terms to, and on terms and conditions approved
by the holder of the Senior Subordinated Obligations.
5.03. Issuance of Equity Securities. The Company shall not issue any
equity securities or any warrants, options or other rights to acquire equity
securities or take any other action prior to the conversion of the Note
hereunder if such action would cause the Conversion Value to be less than
$60.00, unless prior to taking such action, the Company (a) shall have obtained
from a majority of the holders of Series B, Series C and Series D Preferred
Stock (i) a written consent to the issuance of the shares of Series E Preferred
Stock required to be issued upon conversion of the Note following such reduction
in the Conversion Value and to the amendment of the Articles of Incorporation to
authorize a sufficient number of shares for such conversion and (ii) a waiver of
any preemptive rights such holders may otherwise have with respect to the
insurance of such additional shares and (b) shall have amended its Articles of
Incorporation to authorize a sufficient number of shares of Series E Preferred
Stock and/or Common Stock to satisfy the conversion rights of the Purchaser
hereunder. The Company shall not issue shares of the Series E Preferred Stock
prior to the conversion of the Note hereunder without the written consent of the
holder of the Note.
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6. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTE
6.01 Note Register; Ownership of Notes. The Company will keep at its
principal office a register in which the Company will provide for the
registration of Notes and the registration of transfers of Notes. The Company
may treat the Person in whose name any Note is registered on such register as
the owner thereof for the purpose of receiving payment of the principal of and
the premium, if any, and interest on such Note and for all other purposes,
whether or not such Note shall be overdue, and the Company shall not be affected
by any notice to the contrary.
6.02. Transfer and Exchange of the Note. Upon surrender of the Note for
registration of transfer or for exchange to the Company at its principal office,
the Company at its expenses will execute and delivery in exchange therefor a new
Note or Notes of the same class as such surrendered Note in denominations, as
requested by the holder or transferee, which aggregate the unpaid principal
amount of such surrendered Note. Each such new Note shall be registered in the
name of such Person as such holder or transferee may request, shall be dated so
that there will be no loss of interest on such surrendered Note and shall be
otherwise of like tenor.
6.03. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction, upon delivery of
an indemnity bond in such reasonable amount as the Company may determine (or, in
the case of any Note held by a Purchaser or any institutional investor, of any
indemnity agreement from the Purchaser or such other holder reasonably
satisfactory to the Company), or in the case of any such mutilation, upon the
surrender of such Note for cancellation to the Company at its principal office,
the Company at its expense will execute and deliver, in lieu thereof, a new Note
of the same class and of like tenor, dated so that there will be no loss of
interest on such lost, stolen, destroyed or mutilated Note. Any Note in lieu of
which any such new Note has been executed and delivered by the Company shall not
be deemed to be an outstanding Note for any purpose hereof.
7. PAYMENTS ON NOTES: REDEMPTION; CONVERSION
7.01. Place of Payment. Payments of principal and interest becoming due
and payable on the Note shall be made at the address of each holder set forth on
Schedule 1.01 hereof, unless the Company, by written notice from each holder of
any Note, shall be notified to make payment at a different address.
7.02. [Intentionally Omitted].
7.03. Mandatory Redemption. The Company shall, upon notice not less
than 60 days prior to the date fixed for such redemption and after giving the
holder of the
16
Note reasonable opportunity to convert the Note under Section 7.07 below, redeem
the Note at 100% of the principal amount thereof without premium on the earlier
of (a) the Final Maturity Date (b) the Initial Public Offering, or (c) a merger
of the Company with or into any other corporations, the conveyance transfer or
lease of substantially all of its assets in a single transaction or series of
transactions, or a sale in one or more transactions of more than 50% of the
Common Stock of the Company on a fully diluted basis. Failure to provide notice
as required above shall not invalidate any such redemption, except where failure
to provide such notice does not allow the holder of the Note reasonable
opportunity to convert the Note as provided in Section 7.07 below.
7.04. Optional Redemption. (a) At any time or from time to time the
Company may, at its option, upon notice to the Purchaser not less than 60 days
prior to the date fixed for such redemption and after giving the holder of the
Note reasonable opportunity to convert the Note under Section 7.07 below, redeem
all or any part of the Note at 100% of the principal amount of the Note so
redeemed. Failure to provide notice as required above shall not invalidate any
such redemption, except where failure to provide such notice does not allow the
holder of the Note reasonable opportunity to convert the Note as provided in
Section 7.07 below.
(b) Any redemption of the Note pursuant to this Section 7.04
shall be accompanied by an Officer's Certificate (a) stating the principal
amount of the Note to be redeemed, (b) stating the proposed date of redemption
(c) stating the accrued interest on each such Note to the proposed date of
redemption to be paid in accordance with Section 7.06 and (d) stating that the
proposed redemption does not violate Article 8 of this Agreement or the terms or
any subordination agreement to which the Note may be subject.
7.05. [Intentionally Omitted.]
7.06. Maturity; Surrender; etc. In the case of the redemption of the
Note, the principal amount of the Note to be redeemed shall mature and become
due and payable on the date fixed for such redemption, together with interest on
such principal amount accrued to such date. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest, interest on such principal amount shall cease to
accrue. Any Note redeemed in full shall be surrendered to the Company upon the
Company's written request and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any repaid principal amount of any Note.
7.07. Conversion Privilege. In the event the Purchaser shall give
irrevocable written notice to the Company that it will not make an offer to the
Company to acquire, by merger or otherwise, 50% or more of the Common Stock or
assets of the Company (the date of such notice being the "Conversion Date"), the
unpaid principal
17
amount of the Note outstanding or any portion thereof may, at the election of
the holder thereof, at any time on or after the Conversion Date, be converted
into the number of fully paid and nonassessable (i) shares of Series E Preferred
Stock, or (ii) if an event of automatic conversion shall have occurred with
respect to the Series E Preferred Stock, shares of Common Stock, determined
pursuant to this Section 7.O7. The number of shares of Series E Preferred Stock
or Common Stock to which the holder of the Note shall be entitled to receive
upon conversion shall be the product obtained by dividing the principal amount
of the Note being converted by the Conversion Value. The holder shall exercise
this privilege by delivery to the Company of a written notice at least 10 days
prior to the date fixed for conversion specifying the principal amount of the
Note to be converted.
8. SUBORDINATION OF SENIOR SUBORDINATED OBLIGATIONS
8.01. Generally. All Senior Subordinated Obligations are subordinate
and junior in right of payment to all Senior Debt, but only to the extent
provided in this Article 8.
8.02. Restrictions. Except to the extent expressly permitted in this
Article, or as otherwise consented to in writing by all holders of Senior Debt,
the Purchaser shall not (a) receive payment of or collect in whole or in part,
or xxx upon, the Senior Subordinated Obligations; (b) sell, assign, transfer,
pledge, hypothecate or encumber the Senior Subordinated Obligations unless the
proposed purchaser, assignee, transferee or pledgee acknowledges in writing that
it is bound by this Article; (c) enforce any lien they may now or in the future
have on the Senior Subordinated Obligations; (d) join in any petition in
bankruptcy, assignment for the benefit of creditors or creditors' agreement,
other than the filing of a claim or proof of debt or except as directed by all
holders of Senior Debt, so long as the Senior Debt of Company, or commitment to
extend credit to the Company in respect thereof, is in existence; or (e) accept
any pledge or transfer of property (other than shares of stock of the Company)
as security for or in payment of the Senior Subordinated Obligations, or
otherwise deface the Senior Subordinated Obligations.
8.03. Permitted Payments. So long as no default shall have occurred in
payment or performance of any obligation of the Company with respect to the
Senior Debt, payments of interest and principal on the Senior Subordinated
Obligations may be made at payment dates as specified under the Note (it being
understood that no prepayment shall be made of the Senior Subordinated
Obligations and no modification, for default or otherwise, of such payment dates
as specified in the Note shall be permitted without the prior written consent of
all holders of the Senior Debt). Upon prior written notice to all holders of the
Senior Debt, the Purchaser shall be permitted to accelerate the Senior
Subordinated Obligations upon any Event of Default (as defined herein). In the
event the Company or any holder of Senior Debt provides notice to the Purchaser
of default with respect to the Senior Debt of the Company,
18
no interest and no principal payments on the Senior Subordinated Obligations
shall be made without the prior written consent of all holders of such Senior
Debt. The subordination of claims of the Purchaser hereunder shall remain in
effect so long as there shall be outstanding any Senior Debt of the Company.
8.04. Turnover of Payments. In the event that the Purchaser receives a
payment from the Company in violation of the terms of this Article 8, the
Purchaser (a) shall hold such money in trust for the benefit of the holders of
Senior Debt, and (b) shall, upon request of the holders of Senior Debt,
forthwith remit an amount equal to such payment to such holders, or the payment
in the exact form received (but with any necessary endorsement to such holders
without recourse). After the Purchaser has received notice that a payment has
been made to the Purchaser in violation of the terms of this Article 8, the
Purchaser shall segregate such payment from (and shall not commingle such
payment with any of) the other funds of the Purchaser.
8.05. Insolvency, etc. In case of any assignment of the Company for the
benefit of creditors, or in case of any bankruptcy proceedings instituted by or
against the Company, or in case of the appointment of any receiver for the
Company's business or assets, or in case of any dissolution or winding up of the
affairs of the Company, the Company and any assignee, trustee in bankruptcy,
receiver, or other person or persons in charge, are hereby directed to pay to
the holders of Senior Debt the full amount of the Senior Debt of the Company
before making any payment of principal or interest to the Purchaser. Upon
payment in full of the amount of the Senior Debt, the Purchaser shall be
entitled to receive any excess proceeds.
8.06. Obligations Not Impaired. Nothing contained in this Article 8
shall impair, as between the Company and any holder of Senior Subordinated
Obligations, the obligation of the Company to pay to such holder the principal
thereof and premium, if any, and interest thereon as and when the same shall
become due and payable in accordance with the terms thereof, or prevent any
holder of Senior Subordinated Obligations from exercising all rights, powers and
remedies otherwise permitted by applicable law or under any agreement under
which such Senior Subordinated Obligations were incurred, all subject to the
rights of the holders of Senior Debt to receive cash, securities or other
property otherwise payable or deliverable to the holders of Senior Subordinated
Obligations.
8.07. Payment of Senior Debt Subrogation. Upon the payment in full in
cash of all Senior Debt, the holders of Senior Subordinated Obligations shall be
subrogated to all rights of any holder of Senior Debt to receive any further
payments or distributions applicable to Senior Debt until all Senior
Subordinated Obligations shall have been paid in full, and such payments or
distributions received by the holders of Senior Subordinated Obligations by
reason of such subrogation, of cash, securities or other property that otherwise
would be paid or distributed to the holders of Senior Debt, shall, as between
the Company and its creditors other than the holders of
19
Senior Debt, on the one hand, and the holders of Senior Subordinated
Obligations, on the other hand, be deemed to be payment by the Company on
account of Senior Debt and not on account of Senior Subordinated Obligations.
9. EVENTS OF DEFAULT AND ACCELERATION
The following conditions or events shall constitute events of default
("Events of Default"):
(a) if the Company shall default in the payment of any principal
on any Note when the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) if the Company shall default in the payment of any interest on
any Note for more than five days after the same becomes due and payable; or
(c) if the Company shall default in the performance of or
compliance with any term contained in Article 5 hereto; or
(d) if the Company shall default in the performance of or
compliance with any other term contained herein or in the Related Agreements and
such default shall not have been remedies within 30 days after the earlier of
(x) an officer of the Company obtaining knowledge of such default and (y)
receipt by the Company of written notice of such default from any holder of any
Note; or
(e) if any representation or warranty made in writing by or on
behalf of the Company herein or in any instrument furnished in compliance with
or in reference hereto or otherwise in connection with the transactions
contemplated hereby shall prove to have been false or incorrect in any material
respect on the date as of which made; or
(f) if the Company or any Subsidiary shall be in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or interest on any indebtedness with a principal amount in excess of
$50,000 (other than the Note) or in the performance of or compliance with any
term of any evidence of any such indebtedness or of any mortgage, indenture or
other agreement relating thereto the effect of which is to cause such
indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment, and such default, event or condition shall
continue for more than the period of grace, if any, specified therein and shall
not have been waived pursuant thereto; or
(g) if the Company or any Subsidiary shall (i) be generally not
paying its debts as they become due, (ii) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition
20
in bankruptcy, for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, (iii) make an assignment for the benefit of
its creditors, (iv) consent to the appointment of a custodian, receiver, trustee
or other officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) be adjudicated an insolvent or be
liquidated, or (vi) take corporate action for the purpose of any of the
foregoing; or
(h) if a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by the Company or any
Subsidiary, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any Subsidiary, or
if any such petition shall be filed against the Company of any Subsidiary and
such petition shall not be dismissed within 30 days; or
(i) if a final judgment which, with other outstanding final
judgments against the Company and the Subsidiaries, exceeds $100,000 shall be
entered against the Company or any Subsidiary and if, within 60 days after entry
thereof, such judgment shall not have been discharged or execution thereof
stayed pending appeal, or if, within 60 days after the expiration of any such
stay, such judgment shall not have been discharged.
10. REMEDIES ON DEFAULT, ETC.
10.01. Remedies. Upon the occurrence of any Event of Default, the
holder of the Note may proceed to protect and enforce its rights by suit in
equity, action at law and/or other appropriate proceeding either for specific
performance of any covenant, provision or condition contained in this Agreement
or any Related Agreement, or in aid of the exercise of any power granted in this
Agreement or any Related Agreement, and (unless there shall have occurred an
Event of Default under Section 9(g) or 9(h), in which case the unpaid balance of
the Note shall automatically become due and payable) may at its option by notice
to the Company declare all or any part of the unpaid principal amount of the
Note then outstanding to be forthwith due and payable, and thereupon such unpaid
principal amount or part thereof, together with interest accrued thereon and all
other sums, if any, payable under this Agreement, the Note or the other Related
Agreements, shall become so due and payable without presentation, presentment,
protest or further demand or notice of any kind, all of which are hereby
expressly waived, and such holder or holders may proceed to enforce payment of
such amount or part thereof in such manner as it or they may elect.
21
10.02 Annulment of Defaults. An Event of Default shall not be deemed
to be in existence or to have occurred for any purpose of this Agreement until
the expiration of all grace periods under this Agreement or if the holder of the
Note shall have waived such event in writing or stated in writing that the same
has been cured to its reasonable satisfaction. No waiver or statement of
satisfactory cure pursuant to this Section 10.02 shall extend to or affect any
subsequent or other Event of Default not specifically identified in such waiver
or statement of satisfactory cure pursuant to this Section 10.02 shall extend to
or affect any subsequent or other Event of Default not specifically identified
in such waiver or statement of satisfactory cure or impair any of rights of the
holder of any Note or Shares upon the occurence thereof.
10.03 Waivers. The Company hereby waives to the extent not prohibited
by applicable law which cannot be waived (a) all presentments, demands for
performance, notice of nonperformance (except to the extent specifically
required by the provisions hereof), (b) any requirement of diligence or
promptness on the part of any holder of the Note or the Shares in the
enforcement of its rights under this Agreement or the Note, (c) except to the
extent required by other provisions of this Agreement, any and all notices of
every kind and description which may be required to be given by any statute or
rule of law, and (d) any defense of any kind (other than indefeasable payment)
which it may now or hereafter have with respect to its liability under this
Agreement.
11. DEFINITIONS AND ACCOUNTING TERMS
11.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"12% Subordinated Debentures" shall mean the 12% Convertible
Subordinated Debentures issued by the Company, maturing on May 1, 1999.
"14% Subordinated Debenture Holders" shall mean any holder of the 14%
Subordinated Debentures.
"14% Subordinated Debentures" shall mean the 14% Subordinated
Debentures, issued by the Company maturing on September 30, 1997.
"Additional Interest" shall have the meaning assigned to such term
inSection 7.02.
"Agreement" shall mean this $27,500,000 Note Purchase Agreement,
including all amendments, modifications or supplements thereto.
"Articles of Incorporation" shall mean the Articles of Incorporation of
the Company, including all amendments, modifications or supplements thereto.
22
"Bank United Funding Agreement" shall mean that certain Warehousing
Credit and Security Agreement dated as of July 1, 1998 between the Company and
Bank United.
"Board of Directors" shall mean the Board of directors of the Company
as constituted from time to time.
"Buscema Options" shall have the meaning assigned to such term in
Section 2.03.
"Business Plan" shall have the meaning assigned to such term in Section
2.21.
"By-Laws" shall mean the By-Laws of the Company, including all the
amendments, modifications or supplements thereto.
"Closing" shall have the meaning assigned to such term in Section 1.03.
"Closing Date" shall have the meaning assigned to such term in Section
1.03.
"Common Shares" shall have the meaning assigned to such term in Section
1.02.
"Common Stock" shall mean (a) the Company's Common Stock, $0.01 par
value, as authorized on the date of this Agreement, (b) any other capital stock
of any class or classes (however designated) of the Company, authorized on or
after the date hereof, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies or in the absence of any
provision to the contrary in the Certificate of Incorporation or the By-laws, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (c) any other securities into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
"Company" shall have the meaning assigned to such term in the
introductory sentence hereof.
"Conversion Date" shall have the meaning assigned to such term in
Section 7.07.
"Conversion Value" shall mean (i) $60.00 (with respect to conversion of
the Note to shares of Series E Preferred Stock), and (ii) the Series E
Applicable
23
Conversion Value, as defined in the Articles of Incorporation of the Company, as
amended and restated (with respect to conversion of the Note to shares of Common
Stock).
"Xxxxxx River Funding Agreement" shall mean that certain Warehousing
Credit Agreement dated as of August 7, 1998 between the Company and Xxxxxx River
Funding, Inc.
"Domain Name Assignment Agreement" shall have the meaning assigned to
such term in Section 2.03.
"Event of Default" shall have the meaning assigned to such term in
Article 9.
"Final Maturity Date" shall have the meaning assigned to such term in
Section 1.01.
"FRN Agreement" shall mean that certain Second Amendment to Agreement
for the Operation of First Realty Network, Inc., dated on or about December 23,
1996, among the Company, Releads U.S.A., Inc., First Realty Network, Inc.,
Consumer Real Estate Research, Inc., and Xxxx Xxxxx, Xxxxx Xxxxxx and Xxxxxx
Xxxxxxxx.
"Future Senior Subordinated Obligations" shall mean any indebtedness
consented to by the holder of the Senior Subordinated Obligations.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 2.06 (except for changes concurred in by the independent
public accountants to the Company and the Subsidiaries).
"Indebtedness" shall mean (a) any liability for borrowed money or
evidenced by a note or similar obligation given in connection with the
acquisition of any property or other assets (other than trade accounts payable
incurred in the ordinary course of business); (b) all guaranties, endorsements
and other contingent obligations, in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company's balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business, and (c) the present value of any lease payments due under leases
required to be capitalized in accordance with GAAP.
"Independent Division" shall mean any division of the Company or any
Subsidiary which is organized or operated pursuant to an agreement with any
other.
24
Person or Persons which grants such Person or Persons an ownership interest in
or other claim to the assets, revenue or value of such Division.
"Initial Public Offering" shall mean an initial public offering of the
Company's Common Stock pursuant to a registration statement filed under the
Securities Act of 1933, as amended.
"Intellectual Property" shall have the meaning assigned to such term in
Section 2.17.
"Xxxxx-XxXxxxxx Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of March 15, 1996 among the Company, Western American Mortgage
Company and Xxxxx XxXxxxxx Real Estate, Inc. and the Amended and Restated
Operating Agreement as of July 1, 1998 among the Company, Xxxxx-XxXxxxxx Real
Estate, Inc. and Xxxx Xxxxx.
"Material Adverse Effect" means any material adverse effect on (a) the
business, profits, properties or condition of the Company and the Subsidiaries,
taken as a whole, (b) the ability of the Company to perform its obligations
under the Agreement or any Related Agreement and (c) the binding nature,
validity or enforceability of this Agreement or any Related Agreement, which, in
each case, arises from, or reasonably could be expected to arise from, any
action or omission of action on the part of the Company or any subsidiary or
the occurence of any event or the existence of any fact or condition in respect
of the Company or any Subsidiary or any of their respective properties.
"Note" shall have the meaning assigned to such term in Section 1.01.
"Operating Agreement" shall mean the Operating Agreement for the
Northern California Division, dated on or about July 1, 1997, among the Company,
Xxxxx-XxXxxxxx Real Estate, Inc., and Xxxx Xxxxx.
"Person" shall mean an individual, corporation, partnership, joint
venture, trust, university, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Preferred Shares" shall have the meaning assigned to such term in
Section 1.02.
"Purchaser" shall have the meaning assigned to such term in Section
1.03.
"Residential Funding Agreement" shall mean that certain First Amended
and Restated Warehousing Credit and Security Agreement dated as of June 8, 1994
between the Company and Residential Funding Corporation, as amended.
25
"Related Agreements" shall mean the Note, the Series B Purchase
Agreement and the "Related Documents" defined therein, including all amendments,
modifications or supplements thereto.
"Sale and Marketing Agreement" shall have the meaning assigned to such
term in Section 2.03.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time or any other federal set, rule or regulation requiring registration
with any federal agency in connection with a public offering of registration
securities.
"Senior Debt" shall mean the unpaid principal of, premium (if any) and
interest of the Warehouse Lines of Credit.
"Senior Subordinated Obligations" shall mean the unpaid principal of,
premium (if any) and interest on the Note and all other obligations of the
Company and the Subsidiaries of any kind whatsoever under or in respect of this
Agreement and the Related Agreements.
"Series A Preferred Stock" shall mean the shares of Preferred Stock
desginated Series A Referred Stock.
"Series B Preferred Stock" shall mean the shares of Preferred Stock
designated Series B Preferred Stock.
"Series B Purchase Agreement" shall mean that certain Series B
Preferred Stock Purchase Agreement, dated as of March 29, 1996, by and among
the Company and the Purchaser listed on Schedule 1.01 thereto, as amended.
"Series C Preferred Stock" shall mean the shares of Preferred Stock
designated Series C Preferred Stock.
"Series D Preferred Stock" shall mean the shares of Preferred Stock desginated
Series D Preferred Stock.
"Series E Preferred Stock" shall mean the shares of Preferred Stock
designated Series E Preferred Stock.
"Shares" shall have the meaning assigned to such term in Section 1.02.
"Special Preferred Stock (Northern California Division)" shall mean the
shares of Preferred Stock designated Special Preferred Stock (Northern
California Division).
26
"Stock Option Plan" shall mean any qualified or non-qualified incentive
stock option plan of the Company which is adopted by the Board of Directors,
including all amendments, supplements or modifications thereto.
"Subsidiary" shall mean any corporation or other entity of which at
least a majority of the securities or other ownership interest having ordinary
voting power (absolutely or contingently) for the election of directors or
other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.
"Warehouse Lines of Credit" shall mean collectively (i) the line of
credit of the Company with Residential Funding Corporation pursuant to the
Residential Funding Agreement, as the same may be amended or increased or
otherwise modified from time to time and any refinancing or replacements
thereof, (ii) the line of credit of the Company with Bank United pursuant to the
Bank United Funding Agreement, as the same way may be amended or increased or
otherwise modified from time to time any refinancing or replacements thereof,
{iii} the line of credit of the Company with Xxxxxx River Funding Inc. pursuant
to the Xxxxxx River Funding Agreement, as the same may be amended or increased
or otherwise modified from time to time and any refinancing or replacement
thereof and (iv) any other similar line of credit approval by the Required
Holders, the terms of which require the Senior Subordinated Obligations to be
subordinated to the borrowings by the Company thereunder.
"Year 2000 Compliment" shall have the meaning assigned to such term in
Section 5.05.
11.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistently applied, and all
financial data submitted pursuant to this Agreement, unless otherwise specified,
shall be prepared in accordance with GAAP.
12. INDEMNIFICATION
12.01. General Indemnity. The Company agrees to indemnify and save
harmless the Purchaser and its respective directors, officers, affiliates,
successors and assigns from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorneys' fees, charges and disbursements) incurred by the Purchaser
as a result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein or in any of the Related Agreements. The
Purchaser agrees to indemnify and save harmless the Company and its directors,
officers, affiliates, successors and assigns from and against any and all
losses, liabilities, deficiencies, costs, damages and expenses (including,
without limitation, reasonable attorneys' fees, charges and
27
disbursements) incurred by any such Person as a result of any inaccuracy in or
breach of the representations, warranties or covenants made by the Purchaser
herein.
12.02. Indemnification Procedure. Any party entitled to indemnification
under this Section 12 (an "indemnified party") will give written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
promptly after the discovery by such party of any matters giving rise to a claim
for indemnification; provided that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Section 12 except to the
extent that the indemnifying partying is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist in respect of such action, proceeding or
claim, to assume the defense thereof, with counsel reasonably satisfactory to
the indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within (30) days of receipt of any indemnification notice
to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expenses, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. Anything in this Section
12 to the contrary not withstanding, the indemnifying party shall not, without
the indemnified party's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party, a release from all liability in respect of such claim. The
28
indemnification required by this Section 12 shall be made by periodic
payments of the amount thereof during the course of the investigation of
defense, as and when bills are received or expense, loss, damage or liability is
incurred. The indemnity agreements contained herein shall be in addition to (a)
any cause of action or similar right of the indemnified party against the
indemnifying party or others, and (b) any liabilities the indemnifying party may
be subject to pursuant to the law.
13. MISCELLANEOUS
13.01. No Waiver; Cumulative Remedies. No failure or delay on the part
of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
13.02. Amendments, Waivers and Consents. Any provision in the Agreement
to the contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to this Agreement or any Related
Agreement may be made, and compliance with any covenant or provision set forth
herein may be omitted or waived, if the Company shall obtain consent thereto in
writing from the holder of the Note. Any waiver or consent may be given subject
to satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
13.03. Addresses for Notices. Any notice, demand, request, waiver or
other communication under this Agreement or any Related Agreement shall be in
writing and shall be deemed to have been duly given on the date of service if
personally served or on the third day after mailing to the party to whom notice
is to be given, by first class mail, registered, return receipt requested,
postage prepaid and addressed as follows:
To the Company: Xxxxxxxx.xxx, Inc.
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
With a copy to: Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Luthor X. Xxxxxx, Esq.
To the Purchaser: Intuit Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
With a copy to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx,. Esq.
29
13.04. Costs Expenses and Taxes. As condition precedent to the Closing,
the Company afrees to pay at the Closing in connection with the preparation,
execution and delivery of the Agreement and the issuance of the Note to be
issued at the Closing, the reasonable fees and other out-of-pocket expenses of
Messrs. LeBeoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. In addition, the Company shall
pay the reasonable fees and out of pocket expenses of legal counsel, independant
public accountants, consultants and other outside experts retained by the
Purchaser in connection with any amendment or waiver to this Agreement or any
Related Agreement by the Purchaser. In addition, the Company shall pay any and
all stamp, or other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement, the issuance of
the Note and the other istruments and documents to be delivered hereunder or
thereunder, and agrees to save the Purchaser harmless from and against any and
all liabilities with respect to or resulting from any delay or omission to pay
such taxes.
13.05. Binding Effect; Assignment. This Agreement and each Related
Agreement to which it is a party shall be binding upon and inure to the benefit
of each of the Company and the Purchaser and its respective heirs, successors
and assigns, except that the Company shall not have the right to delegate its
obligations hereunder or to assign its rights hereunder or any interest herein
without the prior written consent of the holder of the Note. In addition, the
Company acknowledges and agrees that the Purchaser hereunder may assign all or
any portion of its rights under the Note held by it to any other Person not
currently a Purchaser hereunder. Upon any such assignment (i) the Purchaser
shall deliver the Note held by it to the Company for cancellation and reissuance
in the names and amounts as directed by the Purchaser, (ii) the Company, the
Purchaser and the assignee shall enter into an amendment to this Agreement in
order to make the assigneee a Purchaser hereunder and entitled to all the rights
evidenced hereby and to amend Schedule 1.01 hereto to reflect such assignment
and (iii) the Company shall cause to be issued to such assignee either a legal
opinion in the form issued to the assigning Purchaser pursuant to Section 4.09
of this Agreement or a letter from the issuer of such opinion stating that the
assignee may rely on such opinion as if it were issued to assignee hereunder.
30
13.06. Survival of Representations and Warranties. All representations
and warranties made in this Agreement, each Related Agreement, the Note, or any
other instrument or document delivered in connection herewith or therewith,
shall survive the execution and delivery hereof or thereof for a period of two
years.
13.07. Prior Agreements. This Agreement, each Related Agreement, and
the other agreements executed and delivered herewith constitute the entire
agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
13.08. Severability. The provisions of this Agreement, and each Related
Agreement are severable and, in the event that any court of competent
jurisdiction shall determine that any one or more of the provisions or part of a
provision contained in this Agreement, or any Related Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement shall be reformed and construed as if
such invalid or illegal or unenforceable provision, or part of a provision, had
never been contained herein, and such provisions or part reformed so that it
would be valid, legal and enforceable to the maximum extent possible.
13.09. Confidentially. The Purchaser agrees that it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which the Purchaser may obtain from the Company pursuant to
financial statements, reports and other materials submitted by the Company to
the Purchaser pursuant to this Agreement, or pursuant to visitation or
inspection rights granted hereunder or under any Related Agreement, unless such
information is known, or until such information becomes known, to the public;
provided, however, that the Purchaser may disclose such information (a) on a
confidential basis to their attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection
with their investment in the COmpany, (b) to any prospective purchaser of the
Note or Shares from the Purchaser as long as such prospective purchaser agrees
in writing to be bound by the provisions of this Section 13.09, (c) to any
entity controlling, controlled by or under common control with the Purchaser, or
to any partner of the Purchaser, or (d) as required by applicable law.
13.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF FLORIDA, AND
WITHOUT GIVING EFFECT TO CHOICE OF LAW PROVISIONS.
13.11. Headings. Article, section and subsection headings in this
.Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
31
13.12 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
13.13. Further Assurances. From and after the date of this Agreement,
upon the request of the Purchaser or the Company, each of the Company and the
Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, each related
Agreement and the Shares.
13.14. Waiver. At any time prior to the Closing Date, any party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party granting such waiver but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or future failure.
13.15. Specific Enforcement. The Purchaser and the Company acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement and each Related Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement, each
Related Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction, this
being in addition to any other remedy to which they may be entitled at law or
equity.
(SIGNATURE PAGE FOLLOWS)
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date and year first above written.
XXXXXXXX.XXX, INC.
By: /s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: Chairman/CEO
PURCHASER:
INTUIT INC.
By:/s/ Xxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxx X. Xxxxx
Title:VP Business Development
(SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT)
