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Exhibit 2.5
MEDSCAPE, INC.
February 2, 1999
Xxx Xxxxxxxxxxxx, M.D.
Xxxxx 000
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Dear Xxx:
The following sets forth the terms upon which you have agreed to
sell, and Medscape, Inc. ("Medscape") has agreed to purchase, all right, title
and interest in and to the content, url address, trademarks, service marks and
other assets of xxxxxxxx.xxx (the "Web Site"), a web site that provides clinical
articles, interactive tools and related information on orthopedic medicine,
procedures and related topics to orthopedic surgeons, clinicians and consumers
(the "Assets"). A complete list of the Assets is attached hereto as Exhibit A.
1. Purchase and Sale. You shall sell to Medscape, and Medscape shall
purchase from you (the "Sale"), the Assets upon the terms and conditions set
forth herein. The closing of the Sale (the "Closing") shall take place
simultaneously with the execution and delivery of this letter agreement at the
offices of Patterson, Belknap, Xxxx & Xxxxx LLP, 1133 Avenue of the Americas,
New York, New York. At the Closing:
a. You shall execute and deliver to Medscape a xxxx of sale in the
form attached hereto as Exhibit B pursuant to which you shall transfer title to
the Assets to Medscape, and you shall execute and deliver to Medscape such
further instruments of transfer and conveyance as it may reasonably request to
transfer effectively title to the Assets. From and after the Closing, you agree
to use your reasonable best efforts to assist in transferring the content of the
Web Site to Xxxxxxxx.xxx;
b. Medscape shall grant to you options (the "Options") to purchase
25,000 shares of Medscape's Class B Common Stock, par value $.01 per share (the
"Stock") at an exercise price of $2.50 per share, pursuant to the Medscape Stock
Option Plan and pursuant to Medscape's standard stock option agreement (as
modified to reflect the terms hereof), copies of which are attached hereto as
Exhibit C. One-half of the Options shall vest as of the Closing and the balance
shall vest on the first anniversary of the Closing unless your employment by
Medscape shall have been
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terminated prior to such anniversary (other than by the Company without Good
Cause (as defined in the employment agreement described below)). Upon your
exercise of any Options, Medscape shall pay you an additional $1.64 for each
share of Stock acquired upon such exercise.
c. Each of you and Medscape will execute and deliver an employment
agreement in the form attached hereto as Exhibit D (the "Employment Agreement").
d. Medscape shall not assume any liabilities in connection with the
Sale.
2. Representations and Warranties of Xx. Xxxxxxxxxxxx. You hereby
represent and warrant to Medscape as follows:
a. Title to Assets. You have good, valid and marketable title to the
Assets, free and clear of all claims, liens, security interests, pledges,
restrictions, encumbrances and rights of others of any kind (including without
limitation liens or other encumbrances imposed by any taxing authority)
(collectively "Liens"). All of the Assets are owned directly by you and upon the
Sale, Medscape will receive good, valid and marketable title thereto, free and
clear of all Liens.
b. Authority. You have all requisite capacity and authority to
execute and deliver this letter agreement and each of the Exhibits hereto and to
consummate the transactions contemplated hereby and thereby and such execution,
delivery and consummation by you do not require the approval of any other party.
Each of this letter agreement and the Exhibits hereto have been duly executed
and delivered by you and each constitutes your legal, valid and binding
obligation enforceable against you in accordance its terms.
c. Sufficiency of Assets. The Assets comprise all of the assets
which are necessary to maintain the Web Site.
d. Litigation. There is no lawsuit, claim, action or proceeding
pending, or to your knowledge threatened, against or affecting you relating to
the Web Site or the Assets of the transactions contemplated hereby.
e. Intellectual Property. Except as set forth on Schedule 2.e, you
have the unrestricted right to use and hold the copyright to (and hereby assign
the same to Medscape) all of the data which comprise all of the databases used
in connection with the Web Site including data taken directly from any and all
external sources as well as derived data. The Web Site does not infringe, and
has not at any time infringed, any patent, trademark, copyright or other
intellectual property right of any person or entity.
f. Web Site Traffic. The Web Site traffic statistics set forth on
Schedule 2.f are true, complete and correct.
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g. No Employees. You do not now employ, and have not at any time
employed, any person in connection with the Web Site.
h. Finders, etc. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of you who would have a claim to any fee or commission from you or Medscape in
connection with the transactions contemplated by this letter agreement.
i. Investment Intent; Suitability. You are acquiring the Options,
and the Stock issuable upon the exercise thereof, for investment purposes only
and not with a view to the distribution thereof. You further understand that the
Options are not transferable [except under the limited circumstances permitted
by the Stock Option Plan and the stock option agreement attached as Exhibit C]
and that the shares of Stock issuable upon the exercise thereof may not be sold
unless the sale is registered under the Securities Act of 1933, as amended, or
is exempt therefrom. You acknowledge that you have such knowledge and experience
in financial and business matters as to enable you to evaluate the merits and
risks of an investment in the capital stock of Medscape. You further acknowledge
that you have made your own independent investigation of Medscape and have been
given the opportunity to ask questions of senior personnel of Medscape;
provided, that except for the representations set forth in Section 3 below, you
have not relied upon any representation or warranty made by Medscape or any of
its personnel in making your investment decision.
3. Representations and Warranties of Medscape
a. Authority. Medscape has all requisite power and authority to
execute and deliver this letter agreement and each of the Exhibits hereto and to
consummate the transactions contemplated hereby and thereby and such execution,
delivery and consummation by Medscape does not require the approval of any other
party. Each of this letter agreement and the Exhibits hereto have been duly
executed and delivered by Medscape and each constitutes its legal, valid and
binding obligation enforceable against Medscape in accordance its terms.
b. Due Authorization of Options and Stock. The issuance, sale and
delivery of the Options and the Stock have been duly authorized by all requisite
corporate action on the part of Medscape. Upon the exercise of the Options, the
issuance of the Stock in accordance with the terms thereof and payment of the
option price in full, the Stock will be validly issued and outstanding, fully
paid and non-assessable, free and clear of all Liens of any kind other than
those created or permitted by you.
c. Litigation. There is no lawsuit, claim, action or proceeding
pending, or to the knowledge of Medscape threatened, against or affecting
Medscape which relates to the transactions contemplated hereby.
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d. Finders, etc. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Medscape who would have a claim to any fee or commission from you or Medscape
in connection with the transactions contemplated by this letter agreement.
e. Financial Statements. The audited balance sheet of Medscape as of
December 31, 1997 and the unaudited balance sheet of Medscape as of December 31,
1998 annexed hereto as Schedule 3.e.1 have been prepared from the books and
records of Medscape and fairly present in all material respects the financial
position of Medscape as of the respective dates thereof in conformity with
generally accepted accounting principles consistently applied ("GAAP") (except
as noted on Schedule 3.e.1). The audited statement of income of Medscape for the
year ended December 31, 1997 and the unaudited income statement of Medscape as
of December 31, 1998 annexed hereto as Schedule 3.e.2 have been prepared from
the books and records of Medscape and fairly present in all material respects
the results of operations of Medscape for the respective periods covered thereby
in conformity with GAAP (except as noted on Schedule 3.e.2.
f. Stock Option Plan. The Stock Option Plan included as part of
Exhibit C is a true and complete copy of Medscape's Stock Option Plan as in
effect on the date hereof.
4. Covenants
a. Restrictive Covenants. The provisions of Section 9 and Section 10
of the Employment Agreement are incorporated by reference herein. You
acknowledge that the incorporation of the restrictive covenants and remedies in
this letter agreement is a material inducement to Medscape's execution and
delivery hereof and its consummation of the transactions contemplated hereby.
b. Further Assurances. Each of the parties hereto covenants and
agrees to take any and all such further action and to execute, acknowledge and
deliver such instruments, documents and agreements as the other party may
reasonably request to effectuate, consummate or confirm the transactions
contemplated hereby.
5. Survival of Representations and Warranties; Indemnification.
a. The representations and warranties of the parties hereto shall
survive the Closing and the Sale.
b. You agree promptly to indemnify, defend and hold harmless
Medscape from and against any and all assessments, judgments, debts,
obligations, liabilities, losses, costs, damages or expenses (including
interest, penalties and reasonable out-of-pocket fees, expenses and
disbursements in connection with any action, suit or proceeding) (collectively,
"Damages"), suffered, paid or incurred by Medscape resulting
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from or caused by or arising out of any breach of the representations and
warranties made by you to Medscape in this letter agreement or in any Exhibit or
Schedule hereto or any certificate delivered hereunder or resulting from or
caused by or arising out of any failure by you to perform any of your covenants
or agreements contained herein or therein or relating to any of your liabilities
which are not assumed by Medscape.
c. Medscape agrees promptly to indemnify and hold harmless you from
and against any and all Damages suffered, paid or incurred by you resulting from
or caused by or arising out of any breach of the representations and warranties
made by Medscape in this letter agreement or any Exhibit or Schedule hereto or
any certificate delivered hereunder or resulting from or caused by or arising
out of any failure by Medscape to perform any covenant or agreement of Medscape
contained in this letter agreement.
d. Promptly after receipt by a party seeking indemnification
hereunder (an "Indemnified Party") of notice of any claim or the commencement by
any third party of any action, suit or proceeding which might result in the
other party hereto (the "Indemnifying Party") becoming obligated to indemnify or
make any other payment to the Indemnified Party under this letter agreement, the
Indemnified Party shall notify the Indemnifying Party forthwith in writing of
the commencement thereof or of the claim, and shall furnish the Indemnifying
Party with all information and documents relating thereto promptly after its
receipt thereof. The failure of the Indemnified Party to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have on account of this indemnification or otherwise, except and
only to the extent that the Indemnifying Party is materially prejudiced thereby.
The Indemnifying Party shall have the right, within thirty (30) days after being
so notified, to assume and control the defense of such claim, litigation or
proceeding with counsel reasonably satisfactory to the Indemnified Party in good
faith and at the Indemnifying Party's own expense; provided that unless and
until the Indemnifying Party shall assume such defense pursuant to this
sentence, the Indemnified Party shall have the right to conduct and control the
defense of such claim, litigation or proceeding (including the settlement
thereof) without the Indemnifying Party's consent and shall be entitled to
payment from the Indemnifying Party of all reasonable costs of such defense
(including attorney's fees and expenses). In any such claim, litigation or
proceeding the defense of which the Indemnifying Party shall have so assumed,
the Indemnified Party shall have the right to participate therein and retain its
own counsel at its own expense, unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of the same
counsel or (ii) the named parties to any such litigation or proceeding
(including impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and representation of such parties by the same counsel would
be inappropriate due to actual or potential differing interests between them; in
the case of clause (ii) above, such separate counsel may be retained by the
Indemnified Party at the expense of the Indemnifying Party. The Indemnifying
Party may elect to settle any claim, action or proceeding defended by it without
the written consent of the Indemnified Party provided that such settlement is
limited to payment of monetary
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damages which are payable in full by the Indemnifying Party and the Indemnified
Party is fully discharged at the time of the settlement from any liability with
respect to the claim, action or proceeding, and the Indemnified Party shall not
admit any liability with respect thereto or settle, compromise, pay or discharge
the same without the prior written consent of the Indemnifying Party so long as
the Indemnifying Party is controlling or defending such claim in good faith. The
Indemnifying Party may not enter into any settlement that is not limited to
payment of monetary damages without the Indemnified Party's prior written
consent which will not be unreasonably withheld. Each of the parties covenants
to use all reasonable efforts to cooperate fully with respect to the defense of
any claim, action or proceeding covered by this Section 5.
6. Miscellaneous.
a. Entire Agreement. This letter agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and no
amendment, waiver or modification hereof shall be valid or binding unless made
in writing and signed by the party against whom enforcement thereof is sought.
This letter agreement supersedes all prior agreements, representations and
understandings of the parties hereto relating to the purchase of the Assets by
Medscape.
b. No Reliance. The parties hereto each represent to the other that
in executing this letter agreement each does not rely upon, and has not relied
upon, any representation or statement not set forth herein with regard to the
subject matter, basis or effect of this letter agreement or otherwise.
c. Notices. All notices, consents, waivers or other communications
required or permitted to be given or made pursuant to any of the provisions of
this letter agreement (collectively, "Notices") shall be in writing and shall be
deemed to have been duly given or made for all purposes if sent by certified or
registered mail, return receipt requested, and postage prepaid, hand delivered,
sent by confirmed telecopy or other confirmed electronic means or by express
mail service or other verified overnight courier service to the party at its or
his address as it appears below, or at such other address as either party may
specify by Notice give to the other party in accordance with this Section 6.c
and with copies to the parties indicated below. A Notice shall only be deemed
given or received on a business day (any day other than Saturday, Sunday or
Federal legal holiday). The date any such Notice shall be deemed given and
received is: (i) if hand delivered, on the date of hand delivery; (ii) if sent
by registered or certified mail, three (3) business days following the posting
of the mail; (iii) if sent by express mail or other verified overnight courier
service, the date received; or (iv) if sent by confirmed telecopy or other
confirmed electronic means, the date when receipt is confirmed by the same
means:
If to you:
Xxx Xxxxxxxxxxxx, M.D.
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Suite 300
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxx, Esq.
000 Xxxxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
If to Medscape:
Medscape, Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxx, President and CEO
Telecopy No.: (000) 000-0000
with a copy to:
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
d. No Assignment. Neither this letter agreement nor the right to
receive any payments hereunder may be assigned by Xx. Xxxxxxxxxxxx, and any
attempted assignment shall be null and void and of no effect. This letter
agreement shall be binding upon Xx. Xxxxxxxxxxxx, his heirs, executors and
administrators and upon Medscape, its successors and assigns.
e. No Modification. No termination, alteration, modification or
variation or waiver of this letter agreement or any of the provisions hereof
shall be effective unless in writing executed by the parties hereto, or in the
case of a waiver, by the party or parties waiving compliance. No waiver of any
default or breach of this letter agreement shall be deemed a continuing waiver
or a waiver of any other breach or default. No course of dealing nor any delay
on the part of either party in exercising any rights hereunder shall operate as
a waiver of any such rights.
f. Governing Law. This letter agreement shall be governed,
interpreted and construed according to the internal laws of the State of New
York without regard to conflict of laws principles. Any legal action or
proceeding with respect to this letter
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agreement or any transaction related hereto shall be brought in the courts of
the State of New York or of the United States District Court for the Southern
District of New York, and, by the execution and delivery of this letter
agreement, each of the parties hereto hereby consents for itself and in respect
of its property to the exclusive jurisdiction of the aforesaid courts and agrees
that service of process in any legal action or proceeding with respect to this
letter agreement or any transaction related hereto may be made on such party by
delivery of such process by certified mail, return receipt requested, to such
party at its address set forth in the heading hereof with the same effect as if
such process was personally served on such party within the State of New York.
Each of the parties hereto hereby irrevocably waives, to the extent permitted by
applicable law, any objection, including, but not limited to, any objection to
the laying of venue or based on the ground of forum non conveniens, which it may
now or hereafter have to the bringing of any action or proceeding in such
jurisdictions in respect of this letter agreement or any transaction related
hereto. Nothing contained herein shall affect the right of any party hereto to
serve process in any other manner permitted by law.
g. Severability. Should any clause, paragraph or part of this letter
agreement be held or declared to be void or illegal for any reason by a court of
competent jurisdiction, such provision shall be ineffective, but all other
clauses, paragraphs or parts of this letter agreement which can be effected
without such illegal clause, paragraph or part shall nevertheless remain in full
force and effect.
h. Headings. The headings and captions contained in this letter
agreement are for reference purposes only and shall not affect the meaning or
interpretation of this letter agreement.
i. Expenses. Each party shall be responsible for its own expenses in
connection with the negotiation, documentation and consummation of the
transactions contemplated hereby.
If the foregoing correctly reflects our agreement with respect to
the foregoing, please sign below where indicated whereupon this letter agreement
will become binding upon you and Medscape.
Very truly yours,
MEDSCAPE, INC.
BY: /s/ Xxxx X.Xxxxxx
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Xxxx X. Xxxxxx
President and Chief Executive
Officer
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AGREED:
/s/ Xxx Xxxxxxxxxxxx
----------------------
Xxx Xxxxxxxxxxxx, M.D.
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