EXHIBIT 10.9
CONVEYANCE AGREEMENT
THIS CONVEYANCE AGREEMENT ("Agreement"), dated this 31st day of
December, 1997, is made and entered into by and between CyberSource Corporation,
a California Corporation ("CyberSource"), and Internet Commerce Services
Corporation, a Delaware corporation ("ICS").
ARTICLE 1.
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated to the contrary, apply to the terms used in this Agreement:
1.1. "Assets" means all of CyberSource's right, title and interest,
legal or equitable, in and to the assets, properties, rights, contract rights,
licenses, interests, claims, demands, causes of action, utility (and similar)
deposits, business, and goodwill used or acquired by CyberSource in connection
with its internet commerce services business (hereinafter referred to as the
"Commerce Services Business"), including the assets listed as Exhibit A attached
hereto, and the contents of such business throughout the United States and the
rest of the world including, but not limited to, all of the furniture, fixtures,
equipment and other items of personal property reflected on the balance sheet of
CyberSource relating to the Commerce Services Business and the contracts of the
Commerce Services Business. "Assets" specifically excludes the assets,
properties, rights, contract rights, licenses, interests, claims, demands,
causes of action, utility (and similar) deposits, business, and goodwill used or
acquired by CyberSource in connection with its Xxxxxxxx.xxx business.
1.2. "Liabilities" means, with respect to the Assets being transferred
pursuant to this Agreement, all of CyberSource's liabilities, duties and
obligations of every kind reflected on the balance sheet of CyberSource,
including the liabilities set forth on Exhibit C hereof, acquired by CyberSource
in connection with the Commerce Services Business, or associated with a contract
being transferred to ICS hereunder.
ARTICLE 2.
CONVEYANCES
CyberSource hereby grants, bargains, sells, conveys, assigns, transfers
and delivers all of the Assets to ICS and ICS hereby accepts such Assets, at and
as of the Effective Time hereinafter provided.
TO HAVE AND TO HOLD all and singular the said Assets hereby granted,
bargained, sold, conveyed, assigned, transferred and delivered or intended so to
be unto ICS, its successors and assigns, to and for its and their own use
forever, together with all and singular the properties, assets, members and
appurtenances thereunder belonging or in anyway incident or appertaining
thereto.
* Eleven pages of information in this document have been omitted pursuant to a
request for confidential treatment and filed separately with the Securities
and Exchange Commission.
If the conveyance and assignment attempted to be made hereunder of any
agreement, lease, permit, license, right, claim or other Asset would be
ineffective as between CyberSource and ICS without the consent of any third
person, or would serve as a cause for terminating or invalidating any such
agreement, lease, permit, license, right, claim or other Asset or would cause or
serve as a cause for the loss of ownership thereof, then such Asset is
temporarily excluded from the aforesaid conveyance and assignment to the extent
agreed by CyberSource and ICS. However, under such circumstances CyberSource
shall, to the greatest extent permitted, hold such Asset for the exclusive use
and benefit of ICS until such consent has been obtained. Upon the obtaining of
such consent no further conveyance or assignment shall be required, but full and
complete title to such Asset shall automatically become vested in ICS by virtue
of this Agreement.
ARTICLE 3.
ASSUMPTION OF LIABILITIES
In connection with the grant, bargain, sale, conveyance, assignment,
transfer and delivery made under Article 2 and for any conveyances, assignments,
transfers and deliveries to be made by CyberSource to ICS pursuant to Article 7,
ICS hereby assumes and agrees to perform and fully discharge all of the
Liabilities at and as of the Effective Time. ICS hereby agrees to indemnify,
defend and hold harmless CyberSource, its successors and assigns, of and from
any and all costs, liabilities and expense, including court costs and reasonable
attorneys' fees, arising from or connected with the Liabilities hereby assumed
to the extent of the assumption hereunder.
ARTICLE 4.
CONSIDERATION
In consideration of the transfer of the Assets to ICS hereunder, ICS
hereby agrees to issue, and shall be issuing at and as of the Effective Time
upon the written instruction of CyberSource to (i) the holders of the Series A
Preferred Stock of CyberSource 1,985,520 shares of the Series A Preferred Stock
of ICS ("ICS Series A"), (ii) the holders of the Series B Preferred Stock of
CyberSource 2,037,038 shares of Series B Preferred Stock of ICS ("ICS Series
B"), (iii) the holders of the Series C Preferred Stock of CyberSource 3,000,000
Series C Preferred Stock of ICS ("ICS Series C"), and to the holders of the
Company Common Stock 9,070,000 shares of the common stock of ICS ("ICS Common"),
each such issuance to be on a same percentage basis with respect to each
shareholder's shareholdings in CyberSource with the same preferential
characteristics (adjusted for the value of the distribution) for the Company's
preferred shareholders and with the same percentage ownership for each
shareholder as those which currently exist (the "ICS Stock Issuance"), and the
agreement by ICS to assume, perform and fully discharge all of the Liabilities.
CyberSource and ICS hereby agree that for tax purposes the capital stock issued
by ICS shall be deemed to have been issued to CyberSource and distributed by
CyberSource to its shareholders.
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ARTICLE 5.
WARRANTIES
EXCEPT AS SET FORTH IN ARTICLE 11 TO THE CONTRARY, ALL SALES,
CONVEYANCES, ASSIGNMENTS, TRANSFERS AND DELIVERIES TO BE MADE HEREUNDER WILL BE
MADE WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND (INCLUDING, WITHOUT
LIMITATION, ANY REPRESENTATION OR WARRANTY OF TITLE). ALL ASSETS, RIGHTS AND
BUSINESSES TO BE SOLD, CONVEYED, ASSIGNED, TRANSFERRED AND DELIVERED HEREUNDER
WILL BE SOLD, CONVEYED, ASSIGNED, TRANSFERRED AND DELIVERED "AS IS". CYBERSOURCE
EXPRESSLY DISCLAIMS ANY WARRANTIES OF CONDITION, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE. This Agreement is made, however, with full rights of
substitution and subrogation of ICS in and to all covenants, warranties and
other rights of indemnification by others heretofore given or made with respect
to any of the Assets.
ARTICLE 6.
SALES TAXES AND RECORDING FEES
The parties agree that ICS shall pay all sales, use and similar taxes
arising out of the sales, conveyances, assignments, transfers and deliveries to
be made hereunder, and shall pay all documentary, filing and recording fees
required in connection therewith.
ARTICLE 7.
FURTHER ASSURANCES
From time to time after the date hereof, and without any further
consideration, CyberSource will execute and deliver such instruments of
conveyance, assignment, transfer and delivery, and take such other action, as
ICS may reasonably request in order more effectively to vest in ICS beneficial
and record title to the Assets to be conveyed and assigned hereunder or intended
so to be and to put ICS in actual possession and operating control of such
Assets. After the date hereof, CyberSource agrees to use its best efforts to
obtain, without additional cost to ICS any and all consents and approvals that
may be necessary to vest or confirm title to all the Assets in ICS.
ARTICLE 8.
POWER OF ATTORNEY
CyberSource does hereby constitute and appoint ICS, its successors and
assigns, the true and lawful attorney of CyberSource with full power of
substitution for it and in its name, place and stead or otherwise on behalf of
CyberSource, its successors and assigns, and for the benefit of ICS, its
successors and assigns, to demand and receive from time to time any and all
property and assets, real, personal, and mixed, tangible and intangible, hereby
conveyed and assigned or intended so to be and to execute in the name of
CyberSource, its successors and assigns, deeds, assignments and other
instruments of further assurance and to give receipts and releases in respect of
the same, and from time to time to institute and prosecute in the name of ICS or
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CyberSource for the benefit of ICS as may be appropriate, any and all
proceedings at law, in equity or otherwise which ICS, its successors and
assigns, may deem proper in order to collect, assert or enforce any claims,
rights or title of any kind in and to the Assets hereby conveyed and assigned or
intended so to be, and to defend and compromise any and all actions, suits or
proceedings in respect of any of said Assets and to do any and all such acts and
things in furtherance of this Agreement as ICS, its successors or assigns, shall
deem advisable. CyberSource hereby declares that the appointment hereby made and
the powers hereby granted are coupled with an interest and are and shall be
irrevocable and perpetual and shall not be terminated by any act of CyberSource
or its successors or assigns or by operation of law.
ARTICLE 9.
SECURITIES LAW REPRESENTATIONS
CyberSource acknowledges that the capital stock to be issued pursuant to
the ICS Stock Issuance are being issued to it pursuant to a private offering
exemption from registration under the Securities Act of 1933, as amended (the
"Securities Act"), and, as a result thereof, the shares of ICS capital stock are
"restricted securities" for purposes of Rule 144 as promulgated under the
Securities Act. CyberSource represents and warrants that it and each of its
shareholders is an "accredited investor" as such term is defined in Regulation D
as promulgated under the Securities Act.
ARTICLE 10.
GENERAL
10.1. Registration Rights. The holders of ICS Series A, ICS Series B,
and ICS Series C are hereby granted by the Company the information rights and
registration rights with respect to their Preferred Stock holdings in ICS as
such holders have with respect to the shares of Preferred Stock of CyberSource.
10.2. XxXxxxxxx Transfers. Xxxxxxx X. XxXxxxxxx ("XxXxxxxxx") hereby
agrees that the holders of ICS Series A Interests, ICS Series B and ICS Series C
shall have co-sale and rights of first offer on proposed transfers of shares of
ICS capital stock by XxXxxxxxx to the same extent such holders have with respect
to the shares of Preferred Stock of CyberSource.
10.3. Effective Time. Regardless of when executed, this Conveyance
Agreement shall be effective as of 3:30 p.m., Pacific Standard Time (the
"Effective Time"), on December 31, 1997.
10.4. Headings. All article or section headings in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof.
10.5. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
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10.6. Integration. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.
10.7. Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
10.8. Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California.
ARTICLE 11.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
11.1 Representations and Warranties of CyberSource. CyberSource hereby
represents and warrants to ICS the following:
(a) Neither the execution of this Agreement by CyberSource nor
the consummation of the transactions contemplated hereby which are to be
performed by CyberSource violates the provisions of Section 500 the California
General Corporation Law (the "GCL") as applicable to CyberSource.
(b) All consents and approvals necessary or appropriate for
CyberSource to execute this Agreement and to consummate the transactions
contemplated hereby which are to be performed by CyberSource have been obtained,
except for such consents and approvals the failure of which to obtain would not
result in any material adverse effect on CyberSource or its shareholders; it
being specifically understood that the effect of Sections 502, 503 and 506 of
the GCL are expressly excluded from this representation.
(c) To the best knowledge of CyberSource , the transfer by
CyberSource of its internet commerce services business to ICS as provided in
this Agreement in exchange for stock of ICS qualifies as a Section 351
transaction under the Internal Revenue Code.
11.2 Representations and Warranties of ICS. ICS hereby represents and
warrants to CyberSource the following:
(a) ICS is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own and hold its properties, carry on its
business as now conducted and as proposed to be conducted. ICS has the corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated by this Agreement.
(b) The total number of shares of capital stock which ICS is
authorized to issue is forty million (40,000,000), divided into two classes as
follows: thirty million (30,000,000) shares of common stock, $.001 par value per
share (the "Common Stock") and ten million shares of preferred stock. $.001 par
value per share (the "Preferred Stock"). 1,985,520 shares of Preferred Stock
have been designated Series A Preferred Stock (the "Series A Stock"),
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2,500,000 shares of Preferred Stock have been designated Series B Preferred
Stock (the "Series B Stock") and 3,000,000 shares of Preferred Stock have been
designated Series C Preferred Stock (the "Series C Stock"). No such shares will
have been issued by ICS prior to the ICS Stock Issuance. The rights, preferences
and privileges of the Series A Stock, Series B Stock and the Series C Stock will
be as stated in the Certificate of Incorporation of ICS. Except as set forth in
this Agreement, ICS has no obligations as of the date of this Agreement to issue
any shares of its capital stock.
(c) All corporate action on the part of ICS, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of ICS hereunder
and for the authorization, issuance and delivery of the shares of capital stock
to be issued in the ICS Stock Issuance has been taken and this Agreement
constitutes a valid and legally binding agreement of ICS enforceable against ICS
in accordance with its terms, except as limited by (i) bankruptcy or insolvency
laws or (ii) equitable principles or public policy.
(d) The shares to be issued in the ICS Stock Issuance, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable. The Board of Directors of ICS has adopted resolutions reserving
the shares of Common Stock to be issued upon conversion of the Series A Stock,
Series B Stock and Series C Stock and when the shares of Common Stock are issued
upon such conversion in accordance with the Certificate of Incorporation of ICS,
such shares will be duly and validly issued, fully paid and nonassessable.
(e) ICS has no assets or liabilities other than those conveyed
pursuant to this Agreement.
11.3 Covenants of ICS. ICS hereby covenants that it will take all
actions reasonably necessary or appropriate to grant and preserve the rights of
the ICS stockholders set forth in Sections 10.1 and 10.2 of this Agreement and
any other rights or duties such stockholders have in their capacity as
CyberSource shareholders, such that the CyberSource shareholders will have
equivalent rights and duties in their capacity as ICS stockholders.
11.4 Beneficiaries of Representations and Warranties. The
representations and warranties of CyberSource and ICS set forth in this Article
11 are expressly made for the benefit of, in addition to the party specified
above, the shareholders and stockholders, as the case may be, of the relevant
entity. CyberSource expressly acknowledges that its shareholders are relying on
these representations and warranties in connection with their approval of this
Agreement and the transactions contemplated hereby. The representations and
warranties set forth in this Article 11 shall expire and be of no further force
and effect as of the close of business on January 30, 1998.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
INTERNET COMMERCE SERVICES
CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxxx
-------------------------------
/s/ Xxxxxxx XxXxxxxxx
----------------------------
Xxxxxxx XxXxxxxxx Name: Xxxxxxx X. XxXxxxxxx
----------------------------
Title: CEO
---------------------------
CYBERSOURCE CORPORATION
By: /s/ Xxxxxxx XxXxxxxxx
-------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: President and Chief Executive
Officer
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EXHIBIT A
LIST OF INCLUDED ASSETS
1. All contract, technology license and other rights between
CyberSource and third parties for the operation of the Commerce Services
Business, and other directly related services, including CyberSource's customer
contracts and employment agreements with Commerce Services Business employees,
including specifically those assets and liabilities set forth on the balance
sheet attached hereto as Exhibit B and the schedule of employees and other
assets contained in Appendix I hereto.
2. All technology currently used in the Commerce Services
Business;
3. The portion of the leases for the space occupied by the
Commerce Services Business and the Employees thereof; and
4. All of the employees of CyberSource who are singularly engaged
in the Commerce Services Business.
EXHIBIT B
CyberSource Corporation (ICS Division)
Balance Sheet at December 31, 1997
Assets ICS ICS
Current Assets
Cash & Equivalents $2,000,000
Accounts Receivable 816,546
Cost of Deferred Revenue
Intercompany Receivable
Other Current Assets 86,845
---------
Total Current Assets 2,903,391
Fixed Assets
Cost 1,372,363
Less: Accum. Depm. (336,580)
---------
Total Fixed Assets 1,035,783
Total Assets $3,938,174
==========
Liabilities
Current Liabilities
Accounts Payable 400,000
Deferred Revenue
Intercompany Payable
Other Current Liabilities 111,577
---------
Total Current Liabilities 511,577
Long Term Liabilities
Other Note Payable
Total Long Term Liabilities 0
Total Liabilities 511,577
Equity
Series A Preferred Stock 167,846
Series B Preferred Stock 823,054
Series C Preferred Stock 951,883
Common Stock 7,512
Paid in Capital 1,477,302
Retained Earnings 0
Net Income 0
Total Equity 3,427,597
Total Liabilities & Equity $3,939,174
==========
Unaudited, for management purposes only.
EXHIBIT C
[Missing]
APPENDIX I
*
* Eleven pages from this Appendix I have been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.
