EXHIBIT 2.3
EXCHANGE AGREEMENT
AMONG
IXL HOLDINGS, INC.
AND
XXXXXXX XXXXXXX XXXXX,
XXXXXXX XXXXXXXX,
XXXXXX X. XXXX
AND
XXXXXX X. XXXXXX
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Dated as of April 30, 1996
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions................................................. 2
1.2 Singular/Plural; Gender..................................... 5
ARTICLE II
THE EXCHANGE
2.1 Exchange.................................................... 5
2.2 Payment on Closing.......................................... 5
2.3 Closing Date Deliveries..................................... 6
2.4 Risk of Loss................................................ 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
3.1 Corporate Organization...................................... 6
3.2 IXL Stock................................................... 6
3.3 Subsidiaries................................................ 7
3.4 Title to Stock.............................................. 7
3.5 Seller Investment Representations........................... 7
3.6 Absence of Conflicting Agreements........................... 9
3.7 Title to IXL Assets; Liens and Encumbrances................. 10
3.8 IXL Assets.................................................. 10
3.9 Equipment................................................... 10
3.10 Contracts................................................... 11
3.11 Intangible Property......................................... 11
3.12 Software.................................................... 12
3.13 Leases...................................................... 12
3.14 Financial Statements........................................ 13
3.15 Absence of Undisclosed Liabilities.......................... 13
3.16 No Adverse Change........................................... 14
3.17 No Litigation; Labor Disputes; Compliance with Law.......... 15
3.18 Tax Returns and Tax Reports................................. 15
3.19 Governmental Authorizations................................. 16
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3.20 Compliance with Governmental Requirements.................... 16
3.21 Banks; Powers of Attorney.................................... 16
3.22 Employees.................................................... 17
3.23 Employee Welfare Plans....................................... 17
3.24 Environmental Compliance..................................... 17
3.25 Customer Relations........................................... 18
3.26 Representation as of the Closing Date........................ 18
3.27 Affiliate Transactions....................................... 18
3.28 Disclosure................................................... 18
3.29 Reliance on Representations and Warranties of Buyer.......... 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization................................................. 19
4.2 Authorization; Enforceability................................ 19
4.3 Absence of Conflicting Agreements............................ 19
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
5.1 Compliance with Agreement.................................... 20
5.2 Proceedings and Instruments Satisfactory..................... 20
5.3 Representations and Warranties............................... 20
5.4 Deliveries at Closing........................................ 20
5.5 Other Documents.............................................. 20
5.6 Absence of Investigations and Proceedings.................... 21
5.7 Governmental Consents........................................ 21
5.8 Absence of Liens............................................. 21
5.9 No Material Adverse Change................................... 21
5.10 Approvals and Consents....................................... 21
5.11 Stock Purchase and Exchanges................................. 21
5.12 Termination of Buy-Sell Agreement............................ 21
5.13 Bylaws....................................................... 21
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ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
6.1 Compliance with Agreement........................................ 22
6.2 Proceedings and Instruments Satisfactory......................... 22
6.3 Representations and Warranties................................... 22
6.4 Deliveries at Closing............................................ 22
6.5 Other Documents.................................................. 22
6.6 Absence of Investigations and Proceedings........................ 22
6.7 Governmental Consents............................................ 22
ARTICLE VII
FURTHER AGREEMENTS
7.1 Payment of Sellers' Personal Promissory Note to Xxxxx Communica-
tions............................................................ 23
ARTICLE VIII
MISCELLANEOUS
8.1 Further Assurances............................................... 23
8.2 Entire Agreement; Amendment; and Waivers......................... 23
8.3 Expenses......................................................... 23
8.4 Benefit; Assignment.............................................. 23
8.5 Notices.......................................................... 24
8.6 Counterparts; Headings........................................... 25
8.7 Severability..................................................... 25
8.8 Investigations; Non-Survival of Warranties....................... 25
8.9 Governing Law.................................................... 25
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LIST OF EXHIBITS
Exhibit A Exchange Consideration
Exhibit B Registration Rights Agreement
Exhibit C Stockholders' Agreement
Exhibit D Sellers' Certificate
Exhibit E Amended and Restated Bylaws
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LIST OF SCHEDULES
Schedule 3.1 Corporate Organization
Schedule 3.2 IXL Stock
Schedule 3.6 Absence of Conflicting Agreements
Schedule 3.7 Title to IXL Assets; Liens and
Encumbrances
Schedule 3.9 Equipment
Schedule 3.10 Contracts
Schedule 3.11 Intangible Property
Schedule 3.12 Software
Schedule 3.13 Leases
Schedule 3.14(a) Financial Statements
Schedule 3.14(b) Interim Financial Statements
Schedule 3.15 Indebtedness of IXL to Sellers
Schedule 3.15(a) Absence of Undisclosed Liabilities
Schedule 3.15(b) Guaranty of Indebtedness
Schedule 3.16 Adverse Change
Schedule 3.17 Litigation; Labor Disputes;
Compliance with Law
Schedule 3.18 Tax Returns and Tax Reports
Schedule 3.19 Governmental Authorizations
Schedule 3.20 Compliance with Governmental Requirements
Schedule 3.21 Bank; Powers of Attorney
Schedule 3.22 Employees
Schedule 3.23 Employee Welfare Plans
Schedule 3.27 Affiliate Transactions
Schedule 4.3 Absence of Conflicting Agreements
Schedule 5.10 Approvals and Consents
EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT ("Agreement") dated as of April 30, 1996, by
and among Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X. Xxxx and
Xxxxxx X. Xxxxxx (individually a "Seller" and collectively, "Sellers") and
IXL Holdings, Inc., a Delaware corporation ("Buyer").
RECITALS
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A. Buyer desires to acquire all of the outstanding shares of Voting
Common Stock, par value $1.00 per share, and Non-Voting Stock, par value
$1.00 per share (collectively, the "Stock"), of iXL Interactive Excellence,
Inc., a Georgia corporation ("IXL").
X. Xxxxxxx own all of the issued and outstanding Stock of IXL.
C. Each Seller desires to exchange the Stock owned by such Seller
for shares of Class B Common Stock, par value $.01 per share ("Class B
Common Stock"), of Buyer and cash in the respective amounts as set forth
herein.
D. Contemporaneously with the closing of the exchange contemplated
hereby (the "Exchange"), (i) certain of the existing stockholders of Buyer
and certain other investors, including without limitation Xxxxx Investment
Associates V, L.P. ("KIA V") and Xxxxx Equity Partners V, L.P. ("KEP"),
will purchase certain additional capital stock of Buyer (the "Stock
Purchase") and (ii) Buyer will exchange certain of its capital stock in
return for (x) all of the issued and outstanding capital stock of Creative
Video, Inc., a Georgia corporation ("CVI") (the "CVI Exchange"); (y) all of
the issued and outstanding capital stock of Creative Video Library, Inc., a
Georgia corporation ("CVL") (the "CVL Exchange"); and (z) all of the issued
and outstanding capital stock of Entrepreneur Television, Inc., a Georgia
corporation ("ETV") (the "ETV Exchange").
E. The parties hereto intend that the Exchange, the Stock Purchase,
the CVI Exchange, the CVL Exchange and the ETV Exchange will take place
simultaneously and the stock transferred and cash provided to Buyer in
connection with such transactions will qualify under Section 351 of the
Internal Revenue Code.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants, agreements and conditions set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. Except as specified otherwise, when used in this
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Agreement and any Exhibits or Schedules, the following terms shall have the
meanings specified:
"ACCOUNTS RECEIVABLE" shall mean all accounts receivable, loans
receivable and other receivables of IXL existing as of the close of
business on the Closing Date, as determined in accordance with generally
accepted accounting principles, consistently applied.
"ACT" shall mean the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
"AGREEMENT" shall mean this Exchange Agreement, together with the
Schedules and Exhibits attached hereto, as the same shall be amended from
time to time in accordance with the terms hereof.
"BUSINESS" shall mean IXL's business of marketing, developing and
distributing software, multimedia applications, Internet applications and
"Intranet" applications and the marketing and performance of services in
connection with such activities.
"BUYER" shall mean IXL Holdings, Inc., a Delaware corporation.
"CASH CONSIDERATION" shall mean $105,000.00.
"CASH" shall mean all cash and cash equivalents of IXL as of the
Closing.
"CLASS B COMMON STOCK" shall mean the Class B Common Stock, par value
$.01 per share, of Buyer, which shall be fully paid and non-assessable upon
issuance.
"CLOSING DATE" shall mean: (i) April 30, 1996, or (ii) such other date
as Buyer and Sellers may agree upon in writing. The Closing shall be deemed
effective as of 12:01 A.M. on the Closing Date.
"CLOSING" shall mean the conference to be held at 10:00 a.m., Atlanta,
Georgia time on the Closing Date at the offices of Xxxxxx & Xxxxxx, a
Professional corporation, One Buckhead Plaza, 0000 Xxxxxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000, or at such other time and place as the
parties may mutually agree to in writing, at which the transactions
contemplated by this Agreement shall be consummated.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
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"CONTRACTS" shall mean those agreements (other than the Leases) under
which IXL conducts the Business or by which its properties are bound,
whether written or oral as listed in Schedule 3.10.
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"ENVIRONMENTAL LAWS" shall mean shall mean all applicable rules and
regulations of federal, state and local laws, including statutes,
regulations, ordinances, codes, rules, as amended, relating to the
discharge of air pollutants, water pollutants or process waste water or
otherwise relating to the environment or Hazardous Materials or toxic
substances including, but not limited to, the Federal Solid Waste Disposal
Act, the Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource Conservation and Recovery Act of 1976, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, regulations
of the Environmental Protection Agency, the Toxic Substance Control Act,
regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency
now or at any time hereafter in effect.
"EQUIPMENT" shall mean all items of equipment, computers, furniture
and other machinery of IXL.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF LOSS" shall mean any loss, taking, condemnation, damage or
destruction of or to any of the IXL Assets.
"EXCHANGE CONSIDERATION" shall mean the aggregate consideration to be
received by the Sellers as set forth on Exhibit A, consisting of a total of
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16,740 shares of Class B Common Stock and the Cash Consideration, subject
to adjustment pursuant to Section 2.2.
"EXHIBITS" shall mean those Exhibits referred to in this Section 1.1
and attached to this Agreement and which are hereby incorporated herein and
made a part hereof.
"FINANCIAL STATEMENTS" shall mean the financial statements of IXL
described in Section 3.14.
"INTANGIBLE PROPERTY" shall mean all the copyrights, trademarks,
patents, trade secrets and all other intellectual property of every type,
whether registered with any governmental agency or not so registered, owned
or applied for by IXL or any Seller on behalf of IXL.
"IXL ASSETS" shall mean the right, title and interest of IXL in and to
all assets used or useful in, or material to, the operation of the
Business, including without limitation the Accounts Receivable, the Cash,
the Equipment, the Intangible Property, the Leases, the Licenses, the
Contracts, the Products and the Software, but excluding those items of
tangible personal property listed on Schedule 3.9 and designated on such
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Schedule as being owned individually by a Seller or other identified
Person.
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"KNOWLEDGE OF SELLERS" shall mean the actual knowledge of Xxxxxxx
Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X. Xxxx and Xxxxxx X. Xxxxxx, or
such knowledge as would have been acquired by such persons upon a
reasonable investigation of IXL and its Business.
"LEASES" shall mean those leases of real and personal property to
which IXL is a party as listed on Schedule 3.13.
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"LICENSES" shall mean those licenses, permits and authorizations
issued by any federal, state or local governmental or regulatory authority
or agency for the operation of IXL and its Business.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, claim, lien, lease or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
affecting any assets or property, including any agreement to give or grant
any of the foregoing, any conditional sale or other title retention
agreement and the filing of or agreement to give any financing statement
with respect to any assets or property under the Uniform Commercial Code or
comparable law of any jurisdiction.
"OUTSTANDING LIABILITIES" shall mean all liabilities of IXL as shown
on the balance sheets as of March 31, 1996, determined in accordance with
generally accepted accounting principles.
"PERMITTED LIENS" shall mean the following Liens: (a) Liens existing
on the Closing Date to remain on the IXL Assets as listed on Schedule
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3.15(a); (b) Liens for taxes, assessments or other governmental charges or
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levies not yet due; (c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business of IXL consistent with past practices
for amounts not yet due; (d) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business of IXL
consistent with past practices in connection with worker's compensation,
unemployment insurance or other types of social security; (e) minor defects
of title, easements, rights-of-way, restrictions and other similar charges
or encumbrances not materially detracting from the value of the IXL Assets
or interfering with the ordinary conduct of the Business; and (f) Liens not
created by IXL which affect the underlying fee interest of any real
property leased by IXL.
"PERSON" shall mean any natural person, general or limited
partnership, corporation, limited liability company, association or other
entity.
"PRODUCTS" shall mean the Software and the proprietary computer
application technology known as the "Pitchman Presentation System" and all
other multimedia, Internet, "Intranet" or other computer application
products developed, owned or licensed by IXL.
"REAL PROPERTY" shall mean IXL's leasehold interest in its premises
located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000.
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"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement to be entered into by Sellers, Buyer and the certain stockholders
of Buyer at Closing substantially in the form attached hereto as Exhibit B.
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"SCHEDULES" shall mean those schedules referred to in this Agreement
which have been delivered concurrently with the execution of this
Agreement, which are hereby incorporated herein and made a part hereof.
"SECTION" OR "SECTIONS" shall mean any or all sections of this
Agreement.
"SELLER AND SELLERS" shall mean, individually or collectively, as the
context may require, Xxxxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X.
Xxxx and Xxxxxx X. Xxxxxx.
"SELLERS' CERTIFICATE" shall mean the certificate of the Sellers in
the form of Exhibit D attached hereto.
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"SOFTWARE" shall mean (i) the proprietary computer software programs
identified on Schedule 3.12 hereto, in source and object code form, and
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(ii) the associated technical and user documentation identified on Schedule
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3.12.
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"STOCK" shall mean the issued and outstanding shares of Voting Common
Stock, par value $1.00 per share and shares of Non-Voting Stock, par value
$1.00 per share, of IXL held by the Sellers.
"STOCKHOLDERS AGREEMENT" shall mean the Stockholders Agreement to be
entered into by Sellers and Buyer at the Closing substantially in the form
attached hereto as Exhibit C.
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1.2 Singular/Plural; Gender. Where the context so requires or
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permits, the use of the singular form includes the plural, and the use of
the plural form includes the singular, and the use of any gender includes
any and all genders.
ARTICLE II
THE EXCHANGE
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2.1 Exchange. At the Closing on the Closing Date, on the terms and
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subject to the conditions of this Agreement, each Seller shall sell,
transfer and deliver to Buyer, and Buyer shall purchase from such Seller,
the Stock set forth opposite such Seller's name on Exhibit A for the
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Exchange Consideration set forth opposite such Seller's name on Exhibit A,
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consisting of the aggregate number of shares of Class B Common Stock and
the amount of Cash Consideration set forth opposite such Seller's name on
Exhibit A.
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2.2 Payment on Closing. At the Closing on the Closing Date, Buyer
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shall pay Sellers an amount equal to the Cash Consideration, by wire
transfer of immediately available funds or other form of agreed upon
payment in the amounts set forth on Exhibit A hereto.
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2.3 Closing Date Deliveries. At the Closing on the Closing Date:
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(a) Each Seller shall deliver, or cause to be delivered, to Buyer
properly executed and dated as of the Closing Date, where applicable: (i) stock
certificates representing all outstanding Stock owned by such Seller accompanied
by stock powers duly endorsed to Buyer in each case in proper form for transfer;
(ii) the resignation of those members of the Board of Directors of IXL as shall
be designated by Buyer; (iii) the stock books, stock ledgers, minute books,
corporate seals and all other corporate records of IXL; (iv) the Sellers'
Certificate; (v) the Stockholders' Agreement; (vi) the Registration Rights
Agreement; and (vii) such other documents as provided in Article VI hereof.
(b) In addition to the Cash Consideration described in Section 2.2,
Buyer shall deliver, or cause to be delivered to Sellers, executed and dated as
of the Closing Date, where applicable (i) the Stockholders' Agreement; (ii) the
Registration Rights Agreement; and (iii) stock certificates representing the
Class B Common Stock to be issued to each of the Sellers as set forth on Exhibit
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A.
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2.4 Risk of Loss. The risk of all Events of Loss prior to the Closing
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shall be upon Sellers and the risk of all Events of Loss at or subsequent to the
Closing shall be upon Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Xxxxxxx Xxxxxxx Xxxxx and Xxxxxxx Xxxxxxxx jointly and severally represent
and warrant to Buyer and Xxxxxx Xxxx and Xxxxxx Xxxxxx severally represent and
warrant to Buyer (which representations and warranties shall survive the
Closing) as follows:
3.1 Corporate Organization. IXL is a corporation duly organized, validly
----------------------
existing and in good standing under the laws of the State of Georgia. IXL has
the power to own or lease its properties and to carry on its business in the
place where such properties are now owned, leased or operated and such business
is now conducted. IXL is duly qualified and licensed and in good standing as a
foreign corporation in each jurisdiction set forth in Schedule 3.1, constituting
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each jurisdiction in which such qualification is required. Copies of the
articles of incorporation and all amendments thereto, the bylaws as amended and
currently in force, stock records and corporate minutes of IXL have been
delivered to Buyer, and are true, complete and correct as of the date hereof.
3.2 IXL Stock. IXL has authorized capital stock consisting of (i) 10,000
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shares of Voting Common Stock, $1.00 par value per share, of which only 3,348
shares of such Voting Common Stock are issued and outstanding and (ii) 10,000
shares of Non-Voting Stock, $1.00 par value per share, none of which Non-Voting
Stock are issued and outstanding. All shares of Stock issued and outstanding are
owned of record and beneficially by Sellers as set forth on Exhibit A. All of
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the issued and outstanding Stock is duly authorized and validly issued, fully
paid and nonassessable, and there are no preemptive rights in respect thereof.
Except as set
6
forth on Schedule 3.2, there are no outstanding options, warrants or other
------------
rights to subscribe for or purchase from IXL or the Sellers, no contracts or
commitments providing for the issuance of, or the granting of rights to acquire,
and no securities convertible into or exchangeable for, any Stock or other
capital stock or any other ownership interest of IXL.
3.3 Subsidiaries. IXL does not own capital stock or other ownership
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interests in any corporation, partnership or other entity. There are no
outstanding contractual obligations of IXL to acquire any outstanding shares of
capital stock or other ownership interests of any corporation, partnership or
other entity. IXL does not have any investment (either debt or equity), or
commitments to make any such investment, in any corporation, joint venture,
general or limited partnership, business enterprise or other Person.
3.4 Title to Stock. Sellers have legal and beneficial title to the Stock
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free and clear of any Liens (other than restrictions imposed by applicable state
and federal securities laws), and there are no claims pending with respect to
the title of Sellers in the Stock.
3.5 Seller Investment Representations. Each Seller represents and warrants
---------------------------------
as follows:
(a) Private Offering. Neither such Seller nor anyone acting on such
----------------
Seller's behalf has issued, sold or offered any security of IXL to any Person
under circumstances that would cause the consummation of the Exchange, as
contemplated by this Agreement, to be subject to the registration requirements
of the Act. Neither such Seller nor anyone acting on such Seller's behalf has
offered or will offer the Stock or any part thereof or any similar securities
for sale to, or solicit any offer to acquire any of the same from, any Person so
as to make the consummation of the Exchange subject to the registration
requirements of the Act.
(b) Investment Intentions and Restrictions on Disposition. Such Seller
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is acquiring the Class B Common Stock solely for such Seller's own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof. Such Seller agrees that such Seller will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of
any of the shares of Class B Common Stock (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of any of the Class B Common
Stock) except in compliance with the Act, and Stockholders' Agreement. Such
Seller further understands, acknowledges and agrees that none of the Class B
Common Stock may be transferred, sold, pledged, hypothecated or otherwise
disposed of (i) unless the provisions of the Stockholders' Agreement shall have
been complied with and (ii) unless such disposition is pursuant to an effective
registration statement under the Act and is exempt from (or in compliance with)
applicable state securities laws, or is exempt from the provisions of Section 5
of the Act and is exempt from (or in compliance with) applicable state
securities laws.
(c) Restrictions on Transfer. Such Seller acknowledges receipt of
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advice that (i) the shares of Class B Common Stock have not been registered
under the Act, (ii) the Class B Common Stock must be held indefinitely and such
Seller must continue to bear the economic risk of the investment in the Class B
Common Stock unless shares of such Class B Common
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Stock are subsequently registered under the Act or an exemption from such
registration is available, (iii) there may not be any public market for the
Class B Common Stock in the foreseeable future, (iv) Rule 144 promulgated under
the Act is not presently available with respect to sales of any securities of
Buyer and Buyer has made no covenant to make such Rule available and such Rule
is not anticipated to be available in the foreseeable future, (v) when and if
the Class B Common Stock may be disposed of without registration in reliance
upon Rule 144, such disposition can be made only in limited amounts and in
accordance with the terms and conditions of such Rule, (vi) if the exemption
afforded by Rule 144 is not available, public sale without registration will
require the availability of an exemption under the Act, (vii) restrictive
legends in the form set forth in the Stockholders' Agreement shall be placed on
the certificates representing the Class B Common Stock and (viii) a notation
shall be made in the appropriate records of Buyer indicating that the shares of
Class B Common Stock are subject to restrictions on transfer pursuant to the
Stockholders' Agreement and, if Buyer should in the future engage the services
of a stock transfer agent, appropriate stop-transfer instructions will be issued
to such transfer agent with respect to the Stock.
(d) Risk of Investing in Buyer; Ability to Bear Risk. Such Seller
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represents and warrants that (i) the financial situation of such Seller is such
that Seller can afford to bear the economic risk of holding the Class B Common
Stock for an indefinite period and (ii) such Seller can afford to suffer the
complete loss of his investment in the Class B Common Stock. Such Seller
understands and acknowledges that the shares of Class B Common Stock received by
such Seller hereunder represent an investment by Seller in Buyer and recognizes
that (w) such investment in Buyer is subject to substantial uncertainty
concerning the business prospects of Buyer and that Buyer's businesses face
rapid technological change which could result in greater competition for Buyer
or cause Buyer to lower the prices of its products or services; (x) Buyer
intends to pursue acquisitions of software development businesses, software
service businesses, multimedia businesses and other businesses as a component of
its growth strategy and that the success of Buyer will depend on Buyer's ability
to identify, acquire and finance suitable acquisition candidates on acceptable
terms and to integrate such acquisitions effectively into Buyer; (y) after the
Exchange, Buyer will be controlled by KIA V as a result of KIA V's ownership of
more than 80% of the voting stock of Buyer following the Stock Purchase, and
that KIA V will be able to determine the outcome of all matters required to be
submitted to the stockholders of Buyer for approval (except as otherwise
provided by law or by Buyer's Certificate of Incorporation or Bylaws or the
Stockholders' Agreement); and (z) Sellers' aggregate ownership of Buyer
immediately following the Exchange will likely be subject to dilution upon
exercise of stock options to be granted to certain officers and directors of
Buyer and the possible issuance from time to time of additional shares of
capital stock of Buyer and warrants to acquire stock of Buyer to existing and
future investors of Buyer.
(e) Access to Information; Sophistication. Such Seller has been
-------------------------------------
granted the opportunity to ask questions of, and receive answers from,
representatives of Buyer concerning the terms and conditions of the purchase of
the Class B Common Stock and to obtain any additional information that Seller
deems necessary. Such Seller's knowledge and experience in financial business
matters is such that Seller is capable of evaluating the merits and risk of the
investment in the Class B Common Stock and such Seller has carefully reviewed
the terms and
8
provisions of the Stockholders' Agreement and has evaluated the restrictions and
obligations contained therein.
(f) Knowledge Concerning CVI, CVL and ETV. Such Seller is familiar
----------------------------- -------
with the businesses and operations of each of CVI, CVL and ETV and understands
and acknowledges that, after the CVI Exchange, CVL Exchange and ETV Exchange, a
significant portion of the business of Buyer will be comprised of the businesses
and operations of CVI, CVL and ETV. Such Seller has been granted the opportunity
to ask questions of, and receive answers from, representatives of Buyer
concerning the business, operations and financial results of each of CVI, CVL
and ETV and to obtain any additional information that Seller deems necessary.
Such Seller's knowledge and experience in financial business matters is such
that Seller is capable of evaluating the merits and risk of the investment in
the Class B Common Stock in view of the CVI Exchange, CVL Exchange and the ETV
Exchange and has evaluated the effect of such transactions on such Seller's
purchase of the Class B Common Stock of Buyer hereunder.
(g) Due Execution and Delivery. Such Seller (i) has duly executed and
--------------------------
delivered this Agreement, (ii) this Agreement constitutes and, upon execution
thereof, the Stockholders' Agreement will constitute Seller's legal, valid and
binding obligations, enforceable against such Seller in accordance with their
respective terms, (iii) no consent, approval, authorization, order, filing,
registration or qualification of or with any court, governmental authority or
third person is required to be obtained by such Seller in connection with the
execution and delivery of this Agreement or the Stockholders' Agreement or the
performance of such Seller's obligations hereunder or thereunder and (iv) such
Seller is a resident of the state of Georgia.
(h) Accredited Investor. Such Seller is an "accredited investor" as
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such term is defined in Rule 501(a) promulgated under the Act, a copy of such
definition being attached to this Agreement.
3.6 Absence of Conflicting Agreements. Except as set forth in Schedule
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3.6, neither the execution, delivery or performance of this Agreement by Sellers
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nor the consummation of the sale and purchase of the Stock does or will, after
the giving of notice, or the lapse of time, or otherwise:
(a) conflict with, result in a breach of, or constitute a default
under, the articles of incorporation or bylaws of IXL, any federal, state or
local law, statute, ordinance, rule or regulation, or any court or
administrative order or process or any contract, agreement, arrangement,
commitment or plan to which Sellers or IXL are a party or by which Sellers or
IXL or its property are bound and which relates to the ownership or operation of
the Business, IXL Assets, or the Stock, including without limitation any
stockholders' or buy-sell agreement;
(b) result in the creation of any Lien upon the Stock or any of the
IXL Assets;
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(c) terminate, amend or modify, or give any party the right to
terminate, amend, modify, abandon or refuse to perform, any contract, agreement,
arrangement, commitment or plan to which IXL is a party;
(d) accelerate or modify, or give any party the right to accelerate or
modify, the time within which, or the terms under which, any duties or
obligations are to be performed, or any rights or benefits are to be received,
under any contract, agreement, arrangement, commitment or plan to which IXL is a
party; or
(e) require the consent, waiver, approval, permit, license, clearance
or authorization of, or any declaration or filing with, any court or public
agency or other authority, or the consent of any Person under any agreement,
arrangement or commitment of any nature which Sellers or IXL are a party to or
bound or by or which the IXL Assets are bound or subject.
3.7 Title to IXL Assets; Liens and Encumbrances. Except as set forth on
-------------------------------------------
Schedule 3.7, and except for Permitted Liens, IXL owns good and marketable title
------------
to or has valid and enforceable leasehold interests in all of the IXL Assets
free and clear of any and all Liens.
3.8 IXL Assets. The IXL Assets include all of the assets, properties and
----------
rights of every type and description, real, personal and mixed, tangible and
intangible, that are necessary for, used or useable in the conduct of the
Business in the manner in which the Business has been and is now conducted.
3.9 Equipment. Except as set forth in Schedule 3.9:
--------- ------------
(a) each material item of Equipment is in good condition and repair,
ordinary wear and tear excepted and is fit for operation in its intended use;
(b) the Equipment includes all material items of tangible personal
property utilized by IXL in connection with owning and operating the Business;
(c) none of the material items of Equipment or other assets owned,
used or operated by IXL in connection with the Business, or the ownership,
leasing or operation thereof, is in violation of any law, ordinance, code, rule
or regulation, the violation of which would have a material adverse impact on
the Business, and no written notice from any governmental authority or other
Person has been served upon or given to Sellers or IXL claiming any violation of
any such law, ordinance, code, rule or regulation, or requiring or calling
attention to the need for any repair, modification, replacement, installation or
other work on or in connection with such Equipment or assets; and
(d) the list of Equipment on Schedule 3.9 is a true and correct list
------------
of all material items of tangible personal property necessary for or used in the
operation of the Business in the manner in which it has been and is now
operated.
10
3.10 Contracts. Except as set forth in Schedule 3.10:
--------- -------------
(a) IXL has performed each term, covenant and condition of each of
the Contracts, and no event of default, or event which with the passing of time
or giving of notice would constitute a material default, exists under any of the
Contracts;
(b) the Contracts described in Schedule 3.10 constitute all of the
-------------
agreements relating to properties, undertakings or commitments to or from third
parties in the conduct of the Business other than each contract which is
cancelable by IXL without breach or penalty on not more than thirty (30) days
notice and which involves average annual payments or receipts by IXL of less
than $500 in the case of any single contract and $2,500 in the aggregate;
(c) each of the Contracts is in full force and effect, unimpaired by
any acts or omissions of IXL or its officers, and constitutes the legal and
binding obligation of the parties thereto in accordance with its terms;
(d) Sellers have furnished true and complete copies of all Contracts
listed on Schedule 3.10, including all amendments, modifications and supplements
-------------
thereto, and Schedule 3.10 contains summaries of the provisions of all oral
-------------
contracts; and
(e) No consent, approval or waiver from any Person is required in
connection with the transactions contemplated by this Agreement.
3.11 Intangible Property. Except as set forth on Schedule 3.11:
------------------- -------------
(a) none of the Intangible Property infringes any proprietary right
of any Person and there are no claims, demands or proceedings instituted,
pending or threatened by any third party pertaining to or challenging IXL's
right to use any of the Intangible Property;
(b) there are no facts which would render any of the Intangible
Property invalid or unenforceable;
(c) there is no trademark, trade name, patent or copyright owned by a
third party which IXL is using without license to do so and there is no
Intangible Property owned by a third party that IXL is using without a license
to do so;
(d) to the Knowledge of Sellers, the Intangible Property constitutes
all the copyrights, patents, trade secrets, trademarks, and other intellectual
property utilized by IXL in connection with owning and operating the Business;
and
(e) Schedule 3.11 contains a true and complete list of all Intangible
-------------
Property and all agreements pursuant to which IXL licensed or authorized others
to use the Intangible Property.
11
3.12 Software.
--------
(a) To the Knowledge of Sellers, all of the Software and every
severable component thereof performs substantially in accordance with the
applicable documentation set forth on Schedule 3.12 and is free of material
-------------
defects in programming and operation. IXL has delivered (or made available) to
Buyer complete and accurate copies of all user and technical documentation
related to the Software.
(b) To the Knowledge of Sellers, no employee of IXL is, or is now
expected to be, in default under any employment contract, agreement or
arrangement relating to the Software or any noncompetition arrangement or
restrictive covenant relating to the Software or its development or
exploitation. Except as set forth on Schedule 3.12, the Software was developed
-------------
exclusively by the employees of IXL during such time as they were employed by
IXL. The Software does not include any inventions or developments of such
employees made prior to the time that they became employees of IXL and the
Software does not include any proprietary intellectual property of any previous
employer of any such employees.
(c) All right, title and interest in and to the Software is owned by
IXL and the Software is free and clear of all liens and rights of others and is
fully transferable to Buyer, and, except as set forth on Schedule 3.11, no
-------------
Person other than IXL has any right, title or interest in or to the Software,
including, without limitation, any license, contingent interest or otherwise.
The development, use, sale and exploitation of the Software by IXL does not
violate any material rights of any other Person, and IXL has not received any
written communication alleging such a violation. Except as set forth on Schedule
--------
3.11, IXL has no obligation to compensate any Person for the development, use,
----
sale or exploitation of the Software and IXL has not granted to any other Person
or entity any license, option or other right to develop, use, sell or exploit in
any manner the Software, whether requiring the payment of royalties or not.
(d) Except as set forth on Schedule 3.12, IXL has kept secret the
-------------
source code for, and other trade secret materials relating to, the Software and
has not disclosed any of such source code or materials to any person or entity.
To the Knowledge of Sellers, IXL has taken appropriate measures to protect the
confidential and proprietary nature of the Software, including, without
limitation, the use of confidentiality and intellectual property rights
agreements with all of its employees having access to the Software source and
object code. Except as set forth on Schedule 3.11, there have been no patents
-------------
applied for and no copyrights registered for any part of the Software. Except as
set forth in Schedule 3.11, there are no trademark rights of any person relating
-------------
to the Software.
(e) To the Knowledge of Sellers, no person is using the Software in
violation of any of the rights thereto of IXL.
3.13 Leases. Except as set forth on Schedule 3.13:
------ -------------
(a) IXL has performed each item, covenant and condition of each of
the Leases which is to be performed by IXL at or before the date hereof, and no
default, or event
12
which with the passing of time or giving of notice or both would constitute an
event of default, exists under any Lease;
(b) the Leases constitute all of the lease agreements between IXL and
other Persons, and all of the Leases are described on Schedule 3.13;
-------------
(c) each of the Leases is in full force and effect, unimpaired by any
acts or omissions of IXL or its officers, employees or agents, and constitutes
the legal and binding obligation of the parties in accordance with their terms;
(d) IXL has furnished true and complete copies of the Leases to
Buyer, including any and all amendments thereto;
(e) there are no leasing commissions or similar payments due from IXL
arising out of, resulting from or with respect to any Lease; and
(f) no consent, approval or waiver from any Person is required with
respect to the Leases in connection with the transactions contemplated by this
Agreement.
3.14 Financial Statements.
--------------------
(a) Attached as Schedule 3.14(a) are true and complete copies of the
----------------
unaudited financial statements of IXL, as of December 31, 1991, December 31,
1992, December 31, 1993, December 31, 1994, and December 31, 1995, and the
related statements of income for the fiscal years then ended (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
preceding years and present fairly the financial condition of IXL as at the date
indicated and the results of its operations for the periods then ended except
for the absence of footnotes.
(b) Attached as Schedule 3.14(b) are true and complete copies of the
----------------
unaudited financial statements of IXL, as of March 31, 1996 and the related
statements of income, for the period then ended (the "Interim Financial
Statements"). The Interim Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a basis consistent with
the Financial Statements and present fairly the financial condition of IXL as at
the date indicated and the results of its operations for the periods then ended;
subject, however, to year-end adjustments which, in the aggregate, are not
------- -------
adverse and except for the absence of footnotes.
3.15 Absence of Undisclosed Liabilities.
----------------------------------
(a) IXL has no debt, liability or obligation of any kind, whether
accrued, absolute, contingent or otherwise, including, without limitation, any
liability or obligation on account of taxes or any governmental charges or
penalty, interest or fines, required to be reflected in its financial statements
in accordance with generally accepted accounting principles which would have, or
which in the case of contingent or inchoate liabilities, would have if
13
accrued or absolute, an adverse effect on the financial condition of IXL, except
(i) those liabilities reflected in the Financial Statements and Interim
Financial Statements, (ii) liabilities disclosed in Schedule 3.15(a), (iii)
----------------
liabilities incurred in the ordinary course of business (other than contingent
liabilities) since March 31, 1996, none of which has, individually or in the
aggregate, adversely affected the business, assets, results of operations or
financial condition of IXL and (iv) liabilities incurred in connection with the
transactions provided for in this Agreement.
(b) Except as set forth on Schedule 3.15(b), IXL has not, by written
----------------
instrument or otherwise, guaranteed the payment or collection or pledged any of
its assets to secure payment of any unsatisfied indebtedness of any Person.
Schedule 3.15 sets forth all indebtedness of IXL to Sellers.
-------------
3.16 No Adverse Change. Except as set forth on Schedule 3.16, since March
----------------- -------------
31, 1996, there has been no:
(a) material adverse change in the financial condition or results of
operations of the Business;
(b) declaration, setting aside or payment, directly or indirectly, of
any cash or noncash dividend or other cash or noncash distribution in respect of
any of the securities of IXL or any direct or indirect redemption, purchase or
other acquisition of any securities of IXL or agreement to do so;
(c) damage, destruction or loss, whether or not covered by insurance,
adversely affecting the business or properties of IXL;
(d) increase in compensation payable or to become payable to any of
the officers, directors or employees of IXL or in any bonus payment or
arrangement made with any such person, or any change in personnel policies or
benefits except pursuant to existing compensation and fringe benefit plans,
practice and arrangements;
(e) contract, commitment or transaction entered into or consummated
by IXL except in the ordinary course of business;
(f) sale, assignment, lease or other transfer or disposition of any
of the assets or properties of IXL except in the ordinary course of business or
in connection with the acquisition of similar property or assets in the ordinary
course of business;
(g) extraordinary losses (whether or not covered by insurance) or
waiver by IXL of any extraordinary rights of value;
(h) notice from any customer as to the customer's intention not to
conduct business with IXL, the result of which loss or losses of business,
individually or in the
14
aggregate, has had, or could reasonably be expected to have, a material adverse
effect on the Business; or
(i) other event or condition of any character, that has or might
reasonably have a material adverse effect on IXL's financial condition or
assets.
3.17 No Litigation; Labor Disputes; Compliance with Law. Except as set
--------------------------------------------------
forth on Schedule 3.17:
-------------
(a) there is no decree, judgment, order or litigation at law or in
equity, no arbitration proceeding, and no proceeding before or by any
commission, agency or other administrative or regulatory body or authority,
pending or, to the Knowledge of Sellers, threatened, to which IXL is a party or
to which IXL or the IXL Assets are subject;
(b) IXL is not subject to or bound by any labor agreement, there is
no labor dispute, grievance, controversy, strike or request for union
representation pending or, to the Knowledge of Sellers, threatened against IXL,
and there has been no occurrence of any event which would give rise to any such
strike, request for union representation or other labor dispute, grievance or
controversy; and
(c) To the Knowledge of Sellers, IXL owns and operates, and has owned
and operated, its properties and assets, and carried on and conducted, and has
carried on and conducted, the Business in substantial compliance with all
federal, state and local laws, statutes, ordinances, rules and regulations; and
any court or administrative order or process, including, without limitation,
Occupational Safety and Health Administration, Equal Employment Opportunity
Commission, National Labor Relations Board and Environmental Laws.
3.18 Tax Returns and Tax Reports.
---------------------------
(a) Except as set forth on Schedule 3.18, all federal, state and
-------------
local tax returns and tax reports required to be filed by IXL have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns and reports are required to be filed, and IXL has not requested any
extension of time within which to file any such returns or reports which have
not been filed within such extension of time. All federal, state and local
income, profits, franchise, withholding and sales, use, occupation, property,
excise and other taxes (including interest and penalties) due from IXL in
accordance with such returns and reports have been fully paid. Each item
reflected on each of IXL's federal tax returns is complete, accurate and
correct in all respects.
(b) Except as set forth on Schedule 3.18: (i) no issues have been
-------------
asserted by the Internal Revenue Service or any other taxing authority in
connection with an examination of any of the returns and reports referred to in
Section 3.18(a) which might, if determined adversely to IXL, materially
adversely affect the financial condition or business of IXL; and (ii) no waivers
of statutes of limitation with respect to taxes have been given with respect to
IXL. The federal income tax returns and information reports of IXL have been
examined by
15
the Internal Revenue Service for the period or periods set forth in Schedule
--------
3.18, which lists all revenue agent reports issued in connection with audits of
----
IXL. All deficiencies asserted or assessments made as a result of examinations
by the Internal Revenue Service or by appropriate state tax authorities have
been fully paid or adequately reflected on either the Financial Statements, the
Interim Financial Statements or on Schedule 3.18.
-------------
(c) Schedule 3.18 accurately reflects all currently proposed
-------------
adjustments to the taxable income of IXL for the years ended December 31, 1991
through December 31, 1995.
(d) IXL is not a party to or bound by, and has no obligation under,
any tax sharing or similar agreement, except for obligations provided by law
arising out of the filing of a consolidated federal income tax return or any
consolidated, unitary or combined state or local tax return or report of IXL.
(e) IXL has not consented and will not consent to have the provisions
of Section 341(f)(2) of the Code (or equivalent state law provisions) apply to
it and IXL has not agreed to, and has not been requested to make, any adjustment
under Section 481(c) of the Code by reason of a change in accounting method or
otherwise.
3.19 Governmental Authorizations. Except as set forth in Schedule 3.19,
--------------------------- -------------
no qualifications, registrations, filings, privileges, franchises, licenses,
permits, approvals or authorizations other than the Licenses are required in
order for IXL to own and operate the Business in the manner operated on the date
hereof. All Licenses are currently in full force and effect. As of the date
hereof, no action or proceeding is pending or, to the Knowledge of Sellers,
threatened before any governmental authority to revoke, refuse to renew or
modify such Licenses or other authorizations of the Business.
3.20 Compliance with Governmental Requirements. The Business, its
-----------------------------------------
physical facilities and electrical and mechanical systems are being and have
been operated in all respects in accordance with the specifications of the
applicable Licenses and with each document submitted in support of such
Licenses, and the Business is in compliance with all requirements, rules and
regulations of all governmental authorities, including without limitation, the
United States Occupational Safety and Health Administration. Except as set forth
in Schedule 3.20, and to the Knowledge of Sellers, all obligations, reports and
-------------
other filings required by all governmental authorities, including without
limitation, the United States Occupational Safety and Health Administration,
with respect to the Business have been duly and currently filed as of the date
hereof. There is currently pending no proceeding or complaint before any
governmental authority relating to the Business.
3.21 Banks; Powers of Attorney. Schedule 3.21 lists the names of each
------------------------- -------------
bank in which IXL has an account or safe deposit box and the names of all
Persons authorized to draw thereon or to have access thereto and the names of
all Persons holding powers of attorney from IXL, and a summary statement of the
terms thereof.
16
3.22 Employees. Schedule 3.22 is a true and complete list of the names and
--------- -------------
current annual salary rates or hourly wage rates of all employees of IXL, which
list includes for each such Person the amounts paid or payable as salary or
wages and describes any other future compensation arrangements for employees .
3.23 Employee Welfare Plans.
----------------------
(a) Except as set forth on Schedule 3.23, IXL has not at any time
-------------
maintained or been a party to or made contributions to any of the following: any
"employee pension benefit plan", (as such term is defined in Section 3(2) of
ERISA); or any "employee welfare benefit plan" (as such term is defined in
Section 3(1) of ERISA), whether written or oral. All employee benefit plans
maintained by IXL or to which IXL is obligated to contribute, are, and have in
the past been, in all respects maintained, funded and administered in compliance
with ERISA, and other applicable law; no such plan subject to Title IV of ERISA
has been terminated; no proceedings to terminate any such plan have been
instituted under Subtitle C of Title IV of ERISA; no reportable event within the
meaning of Section 4043 of Subtitle C of ERISA has occurred for any such plan
maintained by IXL; IXL has not withdrawn from a multi-employer plan (as defined
in Section 4001(a) of ERISA); the consummation of the transactions contemplated
hereby will not result in any withdrawal liability on the part of IXL under a
multi-employer plan; no benefit plan established or maintained by IXL or to
which IXL is obligated to contribute, has any accumulated funding deficiency (as
defined in ERISA); and IXL has not incurred any liability to the Pension Benefit
Guaranty Corporation with respect to any such plan.
(b) IXL has no formal or informal employee severance policy. Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, bonus, unemployment compensation or golden
parachute) becoming due to any director, officer or other employee of the
Company, (ii) increase any benefits otherwise payable under any IXL benefit plan
or (iii) result in the acceleration of the time of payment or vesting of any
such benefits.
3.24 Environmental Compliance.
------------------------
(a) IXL is not a party to any litigation or administrative proceeding
or, to the Knowledge of Sellers, is any litigation or administrative proceeding
threatened against it, which in either case (i) asserts or alleges that IXL
violated any Environmental Laws, (ii) asserts or alleges that IXL is required to
clean up, remove or take remedial or other response action due to the disposal,
depositing, discharge, leaking or other release of any hazardous or toxic
substances or materials or (iii) asserts or alleges that IXL is required to pay
all or a portion of the cost of any past, present or future cleanup, removal or
remedial or other response action which arises out of or is related to the
disposal, depositing, discharge, leaking or other release of any hazardous or
toxic substances or materials by IXL.
(b) No Person has caused or permitted materials to be stored,
deposited, treated, recycled or disposed of on, under or at any Real Property
owned, leased, used or
17
occupied by IXL which materials, if known to be present, would require cleanup,
removal or some other remedial action under any Environmental Laws.
(c) There are not now, nor have there previously been, tanks or other
facilities on, under, or at any real property owned, leased, used or occupied by
IXL which contained materials which, if known to be present in soils or ground
water, would require cleanup, removal or some other remedial action under
Environmental Laws.
(d) There are no conditions existing currently which would subject
IXL or Sellers to damages, penalties, injunctive relief or cleanup costs under
any Environmental Laws or which require or are likely to require cleanup,
removal, remedial action or other response pursuant to Environmental Laws by
IXL.
(e) IXL is not subject to any judgment, order or citation related to
or arising out of any Environmental Laws and has not been named or listed as a
potentially responsible party by any governmental body or agency in a matter
related to or arising out of any Environmental Laws.
3.25 Customer Relations. No communications have been made to IXL or
------------------
Sellers which would indicate that (a) any current customer of the Business which
accounted for more than 5% of its total net sales for the calendar year ending
December 31, 1995, or (b) any current supplier of the Business (if such
suppliers could not be replaced by the Sellers at comparable cost), will
terminate or substantially alter its business relations or the amount of
business with IXL.
3.26 Representation as of the Closing Date. Sellers' representations and
-------------------------------------
warranties set forth in this Agreement shall be true and correct on and as of
the Closing Date, as though such representations and warranties were made on and
as of such time.
3.27 Affiliate Transactions. Except as set forth on Schedule 3.27, none of
---------------------- -------------
the Sellers nor any of their respective family members or affiliates has any
agreement, contract or other arrangement with IXL. Each Seller hereby releases,
waives and discharges any and all claims such Seller may have, whether fixed or
contingent, known or unknown, against any of IXL, Buyer or Xxxxx Communications,
Inc., or any of their respective affiliates, officers, directors, employees,
agents or representatives arising out of any events occurring or facts existing
on or prior to the date hereof, except for rights under this Agreement and the
transaction documents contemplated hereby. Such Seller has not assigned any such
claims to any third party.
3.28 Disclosure. No statement of fact by Sellers contained in this
----------
Agreement and no written statement of fact furnished by Sellers to Buyer
pursuant to this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein contained not misleading.
3.29 Reliance on Representations and Warranties of Buyer. Sellers
---------------------------------------------------
understand and acknowledge that the representations and warranties of Buyer
contained in Article IV of this Agreement are the exclusive representations of
Buyer with respect to the subject matter hereof
18
and the transactions contemplated herein. With respect to the subject matter
hereof and the transactions contemplated herein, each Seller represents and
warrants that (i) no representation or warranty, express or implied, whether
written or oral, as to the financial condition, results of operations,
prospects, properties or business of Buyer or as to the desirability or value of
an investment in Buyer has been made to such Seller by or on behalf of Buyer
other than those set forth in Article IV hereof and the Stockholders Agreement,
(ii) such Seller has relied upon such Seller's own independent appraisal and
investigation, and the advice of such Seller's own counsel, tax advisors and
other advisors, regarding the risks of an investment in Buyer, and (iii) such
Seller will continue to bear sole responsibility for making his or her own
independent evaluation and monitoring of the risks of its investment in Buyer.
Sellers acknowledge and agree that all transactions contemplated herein between
Sellers and Buyer, and any other stockholders of Buyer, are arms-length
transactions and that there is no special relationship of trust, fiduciary
relationship or other relationship between Sellers and Buyer or any other
stockholders of Buyer except as expressly set forth herein or the documents
executed in connection with the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization. Buyer is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of the State of Delaware and on the
Closing Date Buyer will be duly qualified to do business as a foreign
corporation in Georgia, and Buyer has full corporate power to purchase the Stock
pursuant to this Agreement.
4.2 Authorization; Enforceability. The execution, delivery and performance
-----------------------------
of this Agreement and all of the documents and instruments required hereby and
the consummation by Buyer of the transactions contemplated hereby and thereby,
are within the corporate power of Buyer and have been duly authorized by all
necessary corporate action by Buyer. This Agreement is, and the other documents
and instruments required hereby will be, when executed and delivered by Buyer
the valid and binding obligations of Buyer enforceable against Buyer in
accordance with their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratoriums or similar laws at the time in effect affecting the
enforceability or right of creditors generally and by general equitable
principles which may limit the right to obtain equitable remedies.
4.3 Absence of Conflicting Agreements. Except as set forth on Schedule
--------------------------------- --------
4.3, neither the execution, delivery or performance of this Agreement by Buyer
---
nor the consummation of the sale and purchase of the Stock or any other
transaction contemplated by this Agreement, does or will, after the giving of
notice, or the lapse of time, or otherwise:
(a) conflict with, result in a breach of, or constitute a default
under, the certificate of incorporation or bylaws of Buyer, or any material
federal, state or local law,
19
statute, ordinance, rule or regulations applicable to Buyer, or any court or
administrative order or process, or any material contract, agreement,
arrangement, commitment or plan to which Buyer is a party or by which Buyer or
its assets is bound;
(b) require the consent, waiver, approval, permit, license, clearance
or authorization of, or any declaration or filing with, any court or
governmental or public agency; or
(c) require the consent of any Person under any material agreement,
material arrangement or material commitment of any nature which Buyer is a party
to or bound by.
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
5.1 Compliance with Agreement. Sellers shall have performed and complied
-------------------------
in all material respects with all of their respective obligations under this
Agreement which are to be performed or complied with by it prior to or at the
Closing.
5.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
----------------------------------------
or other, to be taken by Sellers in connection with the performance of this
Agreement, and all documents incident thereto, shall be complete to the
reasonable satisfaction of Buyer and Buyer's counsel and Sellers shall have made
available to Buyer for examination the originals or true and correct copies of
all documents which Buyer may reasonably request in connection with the
transactions contemplated by this Agreement.
5.3 Representations and Warranties. The representations and warranties
------------------------------
made by Sellers in this Agreement shall be true and correct in the aggregate in
all material respects as of the Closing Date with the same force and effect as
though such representations and warranties had been made on the Closing Date,
except for changes permitted or contemplated by this Agreement.
5.4 Deliveries at Closing. Sellers shall have delivered or caused to be
---------------------
delivered to Buyer the documents, each properly executed and dated as of the
Closing Date as required pursuant to Section 2.3(a), and all other documents
required to vest in buyer good title to the Stock as contemplated by this
Agreement.
5.5 Other Documents. Sellers shall have delivered to Buyer such documents
---------------
and certificates of officers of IXL and public officials as shall be reasonably
requested by Buyer's counsel to establish the existence and good standing of
IXL, the due authorization of this Agreement and the transactions contemplated
hereby, and any other aspect in connection with this Agreement.
20
5.6 Absence of Investigations and Proceedings. No action or proceeding or
-----------------------------------------
formal investigation by any Person or governmental agency shall be pending with
the object of challenging or preventing the Closing and no other proceedings
shall be pending with such object or to collect material damages from Buyer on
account thereof.
5.7 Governmental Consents. All authorizations, consents or approvals of
---------------------
any and all governmental regulatory authorities necessary in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained and be in full force and effect.
5.8 Absence of Liens. On the Closing Date and simultaneously with the
----------------
Closing, there shall not be any Liens on the IXL Assets except for Permitted
Liens.
5.9 No Material Adverse Change. Between the date of this Agreement and
--------------------------
the Closing, there shall have been no material adverse change in the financial
condition, prospects or results of operation of the Business nor any adverse
change in the condition of the IXL Assets, including without limitation a
default under the terms of any of the Contracts or Leases (unless expressly
consented to or waived in writing) which would permit the acceleration of
amounts due thereunder of termination thereof.
5.10 Approvals and Consents. There shall have been secured such
----------------------
permissions, approvals, determinations, consents and waivers to the transactions
contemplated by this Agreement for such agreements set forth on Schedule 5.10.
-------------
5.11 Stock Purchase and Exchanges. The Stock Purchase, the CVI Exchange,
----------------------------
the CVL Exchange and the ETV Exchange shall have been consummated prior to or
contemporaneously with the Exchange.
5.12 Termination of Buy-Sell Agreement. The Buy-Sell Agreement dated as
---------------------------------
of September 7, 1994, among certain of the Sellers and IXL, as amended, shall
have been terminated and be of no further force or effect.
5.13 Bylaws. IXL shall have adopted Amended and Restated Bylaws in the
------
form attached hereto as Exhibit E.
---------
If any of the conditions set forth in this Article V have not been
satisfied, Buyer may in its sole discretion nevertheless elect to proceed with
the consummation of the transactions contemplated hereby.
21
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
Each and every obligation of Sellers to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
6.1 Compliance with Agreement. Buyer shall have performed and complied
-------------------------
with all of its obligations under this Agreement which are to be performed or
complied with by it prior to or at the Closing.
6.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
----------------------------------------
or other, to be taken by Buyer in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be complete to the
reasonable satisfaction of Sellers' counsel, and Buyer shall have made available
to Sellers for examination the originals or true and correct copies of all
documents which Sellers may reasonably request in connection with the
transactions contemplated by this Agreement.
6.3 Representations and Warranties. The representations and warranties
------------------------------
made by Buyer shall be true and correct in all material respects as of the
Closing Date with the same force and effect as though such representations and
warranties had been made on the Closing Date.
6.4 Deliveries at Closing. Buyer shall have delivered or caused to be
---------------------
delivered to Sellers the documents, each properly executed and dated as of the
Closing Date required pursuant to Section 2.3(b). Buyer shall also have made the
payments described in Section 2.2.
6.5 Other Documents. Buyer shall have delivered to Sellers such documents
---------------
and certificates of officers of Buyer and of public officials as shall be
reasonably requested by Sellers' counsel to establish the existence and good
standing of Buyer and the due authorization of this Agreement and the
transactions contemplated hereby by Buyer.
6.6 Absence of Investigations and Proceedings. No action or proceeding or
-----------------------------------------
formal investigation by any Person or governmental agency shall be pending with
the object of challenging or preventing the Closing and no other proceedings
shall be pending with such object or to collect damages from IXL or Sellers on
account thereof.
6.7 Governmental Consents. All material authorizations, consents or
------------ --------
approvals of any and all governmental regulatory authorities necessary in
connection with the consummation of the transactions contemplated by this
Agreement shall have been obtained and be in full force and effect.
If any of the conditions set forth in this Article VI have not been
satisfied, all of the Sellers may in their sole discretion nevertheless
unanimously elect to proceed with the consummation of the transactions
contemplated hereby.
22
ARTICLE VII
FURTHER AGREEMENTS
7.1 Payment of Sellers' Personal Promissory Note to Xxxxx Communications.
--------------------------------------------------------------------
Immediately following the Closing, Sellers shall use $100,000 of the Cash
Consideration to repay that certain demand promissory note of Sellers dated
April 29, 1996 in the original principal amount of $100,000 and held by Xxxxx
Communications, Inc. The obligations of Sellers hereunder shall be joint and
several.
ARTICLE VIII
MISCELLANEOUS
8.1 Further Assurances. From time to time after the Closing Date, upon the
------------------
reasonable request of any party hereto, the other party or parties hereto shall
execute and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and take such further action
as the requesting party may reasonably request in order to effectuate fully the
purposes, terms and conditions of this Agreement.
8.2 Entire Agreement; Amendment; and Waivers. This Agreement and the
----------------------------------------
documents referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter hereof,
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision or breach of this Agreement,
whether or not similar, unless otherwise expressly provided. Each of the Sellers
expressly agrees with Buyer that the Sellers may agree to and execute, on behalf
of the Sellers, any and all amendments, supplements, modifications, waivers or
termination of this Agreement.
8.3 Expenses. Except as otherwise specifically provided herein, whether
--------
or not the transactions contemplated by this Agreement are consummated, each of
the parties hereto shall pay the fees and expenses of its respective counsel,
accountants and other experts incident to the negotiation and preparation of
this Agreement and consummation of the transactions contemplated hereby.
8.4 Benefit; Assignment. This Agreement shall be binding upon and inure to
-------------------
the benefit of and shall be enforceable by Buyer and Sellers and their
respective successors and permitted assigns. This Agreement shall not be
assigned by any party without the prior written consent of the other party.
23
8.5 Notices. All communications or notices required or permitted by this
-------
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an officer of the other party, or
when sent by telecopy or facsimile machine to the number shown below, or when
properly deposited for delivery by commercial overnight delivery service,
prepaid, or by deposit in the United States mail, certified or registered mail,
postage prepaid, return receipt requested, and addressed as follows, unless and
until either of such parties notifies the other in accordance with this Section
of a change of address or change of telecopy number:
If to Buyer: IXL Holdings, Inc.
c/x Xxxxx Communications, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: U. Xxxxxxx Xxxxx, Xx.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxx, a Professional Corporation
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and to: Xxxxx & Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, XX, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Sellers: IXL Interactive Excellence, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxx Xxx, Esq.
X.X. Xxx 00000
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
24
8.6 Counterparts; Headings. This Agreement may be executed in several
----------------------
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
8.7 Severability. If any provision, clause or part of this Agreement or
------------
the application thereof under certain circumstances is held invalid, or
unenforceable, the remainder of this Agreement, or the application of such
provision, clause or part under other circumstances, shall not be affected
thereby.
8.8 Investigations; Non-Survival of Warranties. The respective
------------------------------------------
representations and warranties of Sellers and Buyer contained herein or in any
certificate or other documents delivered prior to or at the Closing shall not be
deemed waived or otherwise affected by any investigations made by any party
hereto. Each and every such representation and warranty shall survive for two
(2) years following the Closing, except that the representations and warranties
contained in Sections 3.18 and 3.23 shall survive the Closing until the
applicable statutes of limitation time periods expire with respect to any claims
under such Sections.
8.9 Governing Law. This Agreement shall be construed and interpreted
-------------
according to the laws of the State of Georgia, without regard to the conflict of
law principles thereof. The exclusive venue of adjudication of any dispute or
proceeding arising out of the Agreement or the performance hereof shall be the
courts located in the County of Xxxxxx, State of Georgia, and the parties hereto
hereby consent to and submit to the jurisdiction of any court located in the
County of Xxxxxx, State of Georgia and hereby waives, to the fullest extent
permitted by applicable law, any objection which such party may have to the
laying of venue of any such proceeding brought in such court and any claim that
such proceeding brought in such court has been brought in an inconvenient forum.
EACH OF THE PARTIES WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
25
IN WITNESS WHEREOF, the parties have executed this Exchange Agreement as of
the day and year first above written.
BUYER:
-----
IXL HOLDINGS, INC.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
--------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
---------------------------
Title: CEO
--------------------------
SELLERS:
-------
/s/ Xxxxxxx Xxxxxxx Xxxxx
-------------------------------------
XXXXXXX XXXXXXX XXXXX
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxx X. Xxxx
-------------------------------------
XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
XXXXXX X. XXXXXX
26
ETV EXHIBIT LIST
Exhibit A Exchange Consideration (see Attached)
Exhibit B Registration Rights Agreement
Exhibit C Stockholders' Agreement
Exhibit D Sellers' Certificate
Exhibit E Articles of Incorporation of ETV
Exhibit F Amended and Restated Bylaws of ETV
EXHIBIT A
---------
OWNERSHIP OF STOCK AND EXCHANGE CONSIDERATION
---------------------------------------------
EXCHANGE CONSIDERATION
------------------------------------
CASH SHARES OF CLASS B
SELLER OWNERSHIP OF STOCK CONSIDERATION COMMON STOCK
---------------------- --------------------- --------------- -------------------
Xxxxxxx Xxxxxxx Xxxxx 1698 Shares of Voting $ 53,256.00
Common Stock 8,490
Xxxxxxx Xxxxxxxx 1000 Shares of Voting $ 31,364.00 5,000
Common Stock
Xxxxxx X. Xxxx 390 Shares of Voting $ 12,232.00 1,950
Common Stock
Xxxxxx X. Xxxxxx 260 Shares of Voting $ 8,148.00 1,300
-------------- -------------------
Common Stock
TOTALS $ 105,000.00 16,740
============== ===================
A-1
LIST OF SCHEDULES
Schedule 3.1 Corporate Organization
Schedule 3.2 IXL Stock
Schedule 3.6 Absence of Conflicting Agreements
Schedule 3.7 Title to IXL Assets; Liens and
Encumbrances
Schedule 3.9 Equipment
Schedule 3.10 Contracts
Schedule 3.11 Intangible Property
Schedule 3.12 Software
Schedule 3.13 Leases
Schedule 3.14(a) Financial Statements
Schedule 3.14(b) Interim Financial Statements
Schedule 3.15 Indebtedness of IXL to Sellers
Schedule 3.15(a) Absence of Undisclosed Liabilities
Schedule 3.15(b) Guaranty of Indebtedness
Schedule 3.16 Adverse Change
Schedule 3.17 Litigation; Labor Disputes;
Compliance with Law
Schedule 3.18 Tax Returns and Tax Reports
Schedule 3.19 Governmental Authorizations
Schedule 3.20 Compliance with Governmental Requirements
Schedule 3.21 Bank; Powers of Attorney
Schedule 3.22 Employees
Schedule 3.23 Employee Welfare Plans
Schedule 3.27 Affiliate Transactions
Schedule 4.3 Absence of Conflicting Agreements
Schedule 5.10 Approvals and Consents
