EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ASK JEEVES, INC.
AND
KANISA INC.
RELATING TO
JEEVES SOLUTIONS
DATED AS OF May 28, 2003
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into
this 28th day of May, 2003, by and between Ask Jeeves, Inc., a Delaware
corporation ("SELLER"), and Kanisa Inc., a Delaware corporation ("BUYER").
RECITALS
WHEREAS, Jeeves Solutions ("SOLUTIONS") is a business unit of Seller and
Seller is the sole owner of the assets of Solutions;
WHEREAS, Solutions designs, creates, markets and sells self-service search
solutions to corporate customers; and
WHEREAS, Seller desires to sell, and Buyer desires to acquire, certain of
the assets of Solutions and in connection therewith Buyer will assume certain of
the liabilities of Solutions on the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereby agree as follows:
SECTION 1. SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 PURCHASE AND SALE OF ASSETS. Upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and covenants of the parties, on the Closing Date (as defined in
Section 3.1 hereof), Seller agrees to sell, convey, assign, transfer and deliver
to Buyer, and Buyer agrees to purchase, acquire and accept from Seller, the
Purchased Assets (as hereinafter defined). For purposes of this Agreement,
"PURCHASED ASSETS" means all of Seller's right, title and interest in and to the
assets, rights and properties used exclusively in the business of Solutions,
other than the Excluded Assets (as defined in Section 1.2 hereof), it being
understood that the Purchased Assets include, without limitation, the following:
(a) CUSTOMER CONTRACTS. The contracts, purchase and sales orders and
commitments, and other agreements, in each case with customers of
Solutions, set forth on Schedule 1.1(a) hereto (the "CUSTOMER CONTRACTS"),
provided that only Customer Contracts that are assigned to Buyer in
accordance with the provisions of this Agreement shall constitute
Purchased Assets;
(b) OTHER CONTRACTS. The contracts other than Customer Contracts set
forth on Schedule 1.1(b) hereto (collectively with the Customer Contracts,
the "ASSUMED CONTRACTS");
(c) EQUIPMENT AND PERSONAL PROPERTY. The equipment and tangible
personal property set forth on Schedule 1.1(c);
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(d) INTELLECTUAL PROPERTY. The software, whether in source code or
object code format, patents, patent applications, inventions, copyrights
and licenses set forth on Schedule 1.1(d) hereto (the "INTELLECTUAL
PROPERTY");
(e) RECORDS. Originals or copies of Seller's records relating
exclusively to the Purchased Assets or the business of Solutions,
including accounting records, sales data, customer lists, information
relating to customers, supplier lists, mailing lists, brochures and
advertising materials (the "RECORDS");
(f) PREPAID EXPENSES. Seller's prepaid expenses and deposits set
forth on Schedule 1.1(f) hereto;
(g) OTHER ASSETS. The other assets set forth on Schedule 1.1(g)
hereto.
1.2 ASSETS NOT TRANSFERRED. Notwithstanding anything to the contrary in
Section 1.1, the following assets, rights and properties of Seller are
specifically excluded from the Purchased Assets and shall be retained by Seller
(the "EXCLUDED ASSETS"):
(a) REFUND CLAIMS. Rights to or claims for losses, loss
carryforwards, refunds of taxes and other governmental charges for periods
ending on or prior to the Closing Date and the benefit of any tax credits
of Seller;
(b) CERTAIN THIRD PARTY CLAIMS. Rights of indemnification,
contribution, reimbursement or other claims of Seller against third
parties (including, without limitation, insurance carriers and parties to
any of the Assumed Contracts) in respect of liabilities or obligations
retained by Seller;
(c) PERMITS; CORPORATE ASSETS. The non-material Permits relating to
the Business or the Purchased Assets and assets relating to Seller's
corporate functions (including, but not limited to, the corporate charter,
taxpayer and other identification numbers, income tax records, seals,
minute books and stock transfer books);
(d) CASH AND CASH EQUIVALENTS. Cash and cash equivalents (such as
demand or time deposit accounts, certificates of deposit and U.S.
government obligations);
(e) TRADE NAME. All right, title or interest in, to and under the
names "xxx.xxx," "Ask Jeeves," "Jeeves Solutions," "xxxxxxxxxxxxxxx.xxx,"
"JeevesOne" and "Jeeves" or any derivation of any of the foregoing;
(f) ACCOUNTS RECEIVABLE. The accounts receivable of Solutions, in
the ordinary course of business consistent with past practice, as of the
Closing; and
(g) OTHER EXCLUDED ASSETS. The assets set forth on Schedule 1.2(g).
1.3 ASSUMPTION OF LIABILITIES.
(a) ASSUMED LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, as of the Closing Date Buyer shall assume
only the Assumed Liabilities.
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For purposes of this Agreement, "ASSUMED LIABILITIES" means liabilities,
claims, debts and obligations arising after the Closing Date under the
Assumed Contracts that constitute Purchased Assets.
(b) EXCLUDED LIABILITIES. Seller acknowledges that Buyer is not
purchasing, assuming or becoming responsible for any direct or indirect,
liability, indebtedness, obligation, commitment, expense, claim,
deficiency, guaranty or endorsement of any type whatsoever, whether
accrued or unaccrued, absolute or contingent, matured or unmatured,
liquidated or unliquidated, known or unknown, asserted or unasserted, due
or to become due, (including, without limitation, liabilities for Taxes or
liabilities under any benefit arrangement, multiemployer plan, pension
plan or welfare plan) (i) of Seller or Solutions, (ii) relating to the
business of Solutions or the Purchased Assets (including the Assumed
Contracts) arising from any event prior to or in connection with the
Closing or (iii) for purposes of clarity, the obligations of Seller to
sell, distribute and support the "Answers" solution to Ask Jeeves Japan
and the obligations of Ask Jeeves Japan to sell, distribute and support
the "Answers" solution (collectively, the "EXCLUDED LIABILITIES"), in each
case other than the Assumed Liabilities. The term "Excluded Liabilities"
also shall exclude, except as provided in Section 12 with respect to
Transfer Taxes and apportioned Taxes, any liability or obligation for
Taxes of Seller or any of its subsidiaries or any other member of any
consolidated, affiliated, combined or unitary group of which Seller or any
of its subsidiaries is or has been a member, arising on or prior to the
Closing Date.
SECTION 2. PURCHASE PRICE
2.1 PURCHASE PRICE AND ALLOCATION. The purchase price (the "PURCHASE
PRICE") to be paid by Buyer to Seller for the Purchased Assets shall be $4.25
million less the Purchase Price Adjustment (calculated in accordance with
Section 2.4) payable in accordance with Sections 2.2 and 2.3. The Purchase Price
shall be allocated among the Purchased Assets as set forth on Schedule 2.1 (the
"ALLOCATION"). Seller and Buyer agree (a) to be bound by the Allocation and (b)
to act in accordance with the Allocation in any Tax audit or similar proceedings
and in any Tax returns or similar filings. In the event that any Tax authority
disputes the Allocation, Seller or Buyer, as the case may be, shall promptly
notify the other party of the nature of such dispute.
2.2 PAYMENT AT CLOSING. On the Closing Date, Buyer shall pay to Seller by
wire transfer in accordance with the wire transfer instructions to be provided
to Buyer by Seller, an amount equal to $3.5 million.
2.3 NOTE. On the Closing Date, Buyer shall issue to Seller the Note (as
hereinafter defined) in the amount of $750,000 less the Purchase Price
Adjustment, which will become due on the one-year anniversary of the Closing
Date upon the terms and subject to the conditions set forth in the Note. The
principal amount of the Note shall be available on a non-exclusive basis to
compensate Buyer for Losses (as hereinafter defined) incurred or sustained by
Buyer as a result of (a) any Excluded Liability, (b) any inaccuracy or breach of
any representation, warranty, covenant or Agreement of Seller contained herein
or in any Ancillary Agreement (as hereinafter defined) or (c) the conduct of the
business of Solutions prior to the Closing Date subject to and in accordance
with the provisions and limitations set forth in Section 13. Buyer
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shall use its commercially reasonable efforts to provide Seller with a security
interest in the Purchased Assets as security for the payment in full of the
principal amount of the Note.
2.4 PURCHASE PRICE ADJUSTMENT. At or prior to the Closing, Seller shall
deliver to Buyer an executed assignment and consent in the form attached hereto
as Exhibit A or otherwise acceptable in form and substance to Buyer (each, a
"CUSTOMER CONSENT") from each of the customers set forth on Schedule 1.1(a). In
the event that one or more of the customer consents is not delivered to Buyer at
or prior to the Closing, there shall be calculated the "PURCHASE PRICE
ADJUSTMENT" equal to the product of (a) the quotient of (1) the sum of the
"POINTS" set forth opposite the name of each customer set forth on Schedule
1.1(a) for which a customer consent is not delivered to Buyer prior to the
Closing divided by (2) 100 multiplied by (b) $1,875,000. The principal amount of
the Note shall be reduced, subject to readjustment as set forth below, such that
it shall be reduced by the Purchase Price Adjustment. In the event that a
Customer Consent not delivered to Buyer at or prior to the Closing is delivered
to Buyer by Seller within six months after the Closing Date, the principal
amount of the Note shall be increased by an amount in cash equal to the product
of (x) the number of Points set forth opposite the name of the respective
customer on Schedule 1.1(a) multiplied by (y) $18,750, provided that such
customer has not terminated or failed to renew, and is not in breach of the
terms of, its respective contract, unless consented to in writing by Buyer. In
the event that a Customer Consent not delivered to Buyer on or prior to the six
month anniversary of the Closing is delivered to Buyer by Seller within one year
after the Closing Date, the principal amount of the Note shall be increased by
an amount in cash equal to the product of (x) the number of Points set forth on
Schedule 1.1(a) multiplied by (y) $14,063, provided that such customer has not
terminated or failed to renew, and is not in breach of the terms of, its
respective contract, unless consented to in writing by Buyer. Buyer shall not be
obligated to make any payments to Seller with respect to, and the principal
amount of the Note shall not be increased in connection with, Customer Consents
delivered after the one-year anniversary of the Closing Date.
SECTION 3. CLOSING
3.1 CLOSING. The closing (the "CLOSING") of the transactions contemplated
by this Agreement shall be held at 8:00 a.m. on the second business day
following satisfaction of all of the conditions set forth in Section 9 (the
"CLOSING DATE"), in the offices of O'Melveny & Xxxxx LLP, 000 Xxxxx Xxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000, or at such other time and place as the parties may
mutually agree.
3.2 DELIVERIES OF SELLER. Subject to the other terms and conditions of
this Agreement, at or prior to the Closing, Seller shall deliver to Buyer:
(a) a xxxx of sale and assignment and assumption agreement relating
to the sale of the Purchased Assets and assignment and assumption of the
Assumed Liabilities, substantially in the form of Exhibit B hereto (the
"XXXX OF SALE AND ASSUMPTION AGREEMENT") duly executed on behalf of
Seller;
(b) a License Agreement, dated as of the date of this Agreement, in
the form attached hereto as Exhibit C (the "LICENSE AGREEMENT") duly
executed on behalf of Seller (which shall be delivered on the date of this
Agreement);
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(c) a Marketing Agreement, dated as of the date of this Agreement,
in the form attached hereto as Exhibit D (the "MARKETING AGREEMENT") duly
executed on behalf of Seller (which shall be delivered on the date of this
Agreement);
(d) a Sublease Agreement, dated as of the Closing Date, in a form
reasonably satisfactory to each of Buyer and Seller (the "SUBLEASE") duly
executed on behalf of Seller, LMF Cochituate Corp. and CommercialWare,
Inc.;
(e) with respect to each Customer Contract with the customers set
forth on Schedule 1.1(a), either (i) a Customer Consent duly executed on
behalf of Seller and such customer or (ii) a "back-to-back" agreement,
dated as of the Closing Date, in the form attached hereto as Exhibit E
(each, a "BACK-TO-BACK AGREEMENT") with respect to such customer duly
executed on behalf of Seller;
(f) without duplication of Section 3.2(e) above, an assignment and
consent acceptable in form and substance to Buyer with respect to each of
the contracts, consents and approvals set forth in Schedule 3.2(f) (in the
case of such contracts, where consent to assignment is required by any
contract) and a copy of any notice required by any such contract in
connection with the transactions contemplated by this Agreement; provided,
however, that in lieu of an assignment and consent with respect to any
license set forth in Schedule 3.2(f), Seller may pay to Buyer an amount in
cash required for Buyer to obtain an equivalent license (it being
understood that Buyer shall be responsible to pay a pro rata portion of
the related license fee (other than fees required to be paid under the
equivalent license that would not have been required to be paid under the
original license, such as an initiation fee) in the event that the term of
such license extends beyond the term of the equivalent license held by
Seller); and
(g) an officers' certificate pursuant to Section 9.2(a) duly
executed on behalf of Seller.
3.3 DELIVERIES OF BUYER. Subject to the terms and conditions of this
Agreement, at or prior to the Closing, Buyer shall deliver to Seller:
(a) a counterpart signature page to the Xxxx of Sale and Assumption
Agreement;
(b) a counterpart signature page to the License Agreement (which
shall be delivered on the date of this Agreement);
(c) a counterpart signature page to the Marketing Agreement (which
shall be delivered on the date of this Agreement);
(d) a counterpart signature page to the Sublease;
(e) a counterpart signature page to each Back-to-Back Agreement;
(f) a one-year, non-interest bearing promissory note, dated as of
the Closing Date, in the form attached hereto as Exhibit F (the "NOTE"
and, collectively with the Xxxx
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of Sale and Assumption Agreement, the License Agreement, the Marketing
Agreement, the Sublease, the Customer Consents and the Back-to-Back
Agreements, the "ANCILLARY AGREEMENTS")) duly executed on behalf of Buyer;
(g) a duly executed officers' certificate pursuant to Section
9.3(a); and
(h) a wire transfer in an amount equal to $3.5 million.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 ORGANIZATION AND STANDING. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Seller has all necessary corporate power and corporate authority to execute and
deliver this Agreement and to perform its obligations hereunder. Seller has all
requisite corporate power and corporate authority to carry on the business of
Solutions as it is now being conducted. Seller is duly qualified or licensed to
do business as a foreign corporation in good standing in all jurisdictions where
Solutions conducts business, except where the failure to be so qualified or
licensed does not have a material adverse effect on the Purchased Assets or the
business of Solutions.
4.2 CONSENTS AND AUTHORIZATION. Schedule 4.2 contains a complete and
accurate list of all consents or approvals of third parties that are (a)
material to the Purchased Assets or the business of Solutions and (b) necessary
for the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Seller. All requisite corporate action
necessary to authorize the execution, delivery and performance by Seller of this
Agreement and each of the Ancillary Agreements has been taken. This Agreement
and the Ancillary Agreements constitute valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, arrangement or
other similar laws or equitable principles relating to or limiting creditors'
rights generally.
4.3 TITLE TO PURCHASED ASSETS. Seller has good and marketable title or
other right to use to all of the Purchased Assets. Seller holds all of the
foregoing free and clear of all mortgages, pledges, charges, liens, claims and
encumbrances of any kind, nature or description, except for (i) liens for taxes,
assessments or other statutory or governmental charges not yet due or being
contested in good faith by appropriate proceedings or (ii) other encumbrances
which, individually or in the aggregate, do not impair or interfere with the
conduct of the business of Solutions in any material respect.
4.4 NO BREACH. The execution and delivery of this Agreement by Seller do
not and the consummation of the transactions contemplated hereby by Seller will
not (a) violate any provision of Seller's Certificate of Incorporation or
Bylaws, (b) result in a breach (or any event which, with notice or lapse of time
or both, would constitute a breach) of any term or provision of, or constitute a
default under, any agreement or arrangement to which Seller is a party or by
which the Purchased Assets are bound, (c) result in the creation of any lien,
charge or encumbrance on the Purchased Assets or (d) violate any statute or law
or any judgment, decree, order, regulation or rule of any court or governmental
authority to which Seller is bound or
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affected, in the case of clauses (b), (c) and (d) that would have a material
adverse effect on the Purchased Assets or the business of Solutions or the
ability of Seller to complete the transactions contemplated by this Agreement
and the Ancillary Agreements.
4.5 LITIGATION AND CLAIMS. Except as set forth on Schedule 4.5, there is
no action, suit, claim, proceeding or investigation (collectively, "ACTION")
pending or, to the Seller's knowledge, threatened against Seller before or by
any federal, state, municipal or other governmental court, agency or
instrumentality against, relating to or affecting the business of Solutions or
the Purchased Assets or seeking to prevent Seller's performance of this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby. There are currently no outstanding judgments, decrees or orders of
any court or any governmental or administrative agency against or affecting the
business of Solutions or any of the Purchased Assets. Schedule 4.5 contains a
complete and accurate list of all Actions to which Seller has been a party
during the two years prior to the date hereof material to the business of
Solutions or any of the Purchased Assets, or any such Action that was settled
during the two years prior to the date hereof prior to the institution of formal
proceedings.
4.6 FINANCIAL STATEMENTS. Seller has delivered to Buyer copies of its
audited financial statements as at and for the year ended December 31, 2002 and
its unaudited financial statements as at and for the three-month period ended
March 31, 2003 (the "FINANCIAL STATEMENTS"). The Financial Statements are, in
all material respects, true and complete and in accordance with Seller's books
and records, have been prepared in accordance with generally accepted accounting
principles in the United States consistently applied ("GAAP") and fully and
fairly present in all material respects the results of the business of Seller
for the periods indicated. Seller maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed with management's authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in accordance with GAAP
and to maintain accountability for assets and (iii) access to assets is
permitted only in accordance with management's authorization. Seller has not
engaged in any transaction, maintained any bank account or used any corporate
funds in connection with the Purchased Assets or the business of Solutions,
except for transactions, bank accounts or funds which (x) have been and are
reflected in Seller's normally maintained financial and accounting books and
records or (y) are not material to the Purchased Assets or the business of
Solutions. The financial information related to the business of Solutions set
forth on Schedule 4.6 was prepared in good faith and in a manner consistent with
the information included in the Financial Statements.
4.7 INTELLECTUAL PROPERTY.
(a) Schedule 1.1(d) lists (i) all patents, patent applications and
registered domain names included in the Intellectual Property that are
used by Seller exclusively in connection with the conduct of the business
of Solutions as currently conducted; (ii) all licenses (both in-bound and
out-bound) as to which Seller is a party and pursuant to which any Person
is authorized to use any Intellectual Property; and (iii) all licenses as
to which Seller is a party and pursuant to which Seller is authorized to
use any third party patents which are incorporated into any Solutions
product, except for licenses that are available to, and used by,
businesses generally.
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(b) Seller possesses all non-patent rights, and, to the knowledge of
Seller, all patent rights, necessary to use the Intellectual Property in
the business of Solutions as currently conducted.
(c) To the knowledge of Seller, there is no unauthorized use,
disclosure, infringement or misappropriation of any Intellectual Property
by any third party.
(d) To the knowledge of Seller, Seller is not in breach of any
inbound license agreement relating to the Intellectual Property.
(e) Seller has not been sued in any action, suit or proceeding or
received any written notice with respect to any Intellectual Property.
(f) Seller has not brought any action, suit or proceeding for
infringement of Intellectual Property or breach of any license or
agreement involving Intellectual Property against any third party.
(g) Seller has secured valid written assignments from any and all
employees, contractors and consultants who contributed to the creation or
development of Intellectual Property of the rights to such contributions
that Seller does not already own by operation of law.
(h) Seller has taken all reasonably necessary steps to protect and
preserve the confidentiality of all Intellectual Property not otherwise
protected by patents, patent applications or copyright.
(i) To Seller's knowledge only with respect to patent rights and
without any qualification as to knowledge with respect to non-patent
rights, neither the Intellectual Property nor any portion thereof
infringes or violates any intellectual property rights of any third party.
4.8 CONTRACTS. Schedule 4.8 lists each contract to which Seller is a party
that (a) is material to the Purchased Assets or the business of Solutions and
(b) relates exclusively to the business of Solutions as currently conducted or
any of the Purchased Assets. True, correct and complete copies of the contracts
appearing on Schedule 4.8, including all amendments, supplements and side
letters, if any, have been delivered to Buyer. Except for liabilities,
commitments and obligations expressly set forth in the contracts listed in
Schedule 4.8, Seller has no liabilities, commitments or obligations that are
material to the Purchased Assets or the business of Solutions, whether pursuant
to written or verbal contract or otherwise, to any customer. Seller has duly
performed all of its material obligations under each such contract to the extent
that such obligations to perform have accrued. To Seller's knowledge, each other
party has performed all of its material obligations under each such contract to
the extent that such obligations to perform have accrued. No breach or default,
alleged material breach or default, or event which would (with or without the
passage of time, notice or both) constitute a material breach or default under
any such contract by Seller (or, to the knowledge of Seller, any other party or
obligor with respect thereto), has occurred, and no written notice of any claim
of breach or default has been given to Seller. All of such contracts are valid
and binding obligations of Seller and enforceable against Seller and, to
Seller's knowledge, the other parties thereto in
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accordance with their terms with no existing or, to Seller's knowledge,
threatened default by Seller or, to Seller's knowledge, any other party thereto.
4.9 EMPLOYEES. No employees of Solutions are represented by a union or
other labor organization. Seller is not a party to or bound by any collective
bargaining agreement. There has been no labor strike, dispute, slowdown,
stoppage or other material labor difficulty during the last three years pending
or threatened against or affecting Seller with respect to Solutions. There is no
pending or, to Seller's knowledge, threatened charge, complaint, or petition by,
against or involving Solutions before the National Labor Relations Board, the
Equal Employment Opportunity Commission, the Occupational Health and Safety
Administration or any other federal, state or local labor authority.
4.10 GOVERNMENTAL ORDERS AND PERMITS. Seller is not subject to any
judicial, governmental or administrative order, judgment or decree with regard
to Solutions or any of the Purchased Assets. There are no material governmental
licenses, permits, approvals, authorizations, exemptions, classifications or
certificates (collectively, "PERMITS") necessary for the conduct of the business
of Solutions.
4.11 TAXES. None of the Purchased Assets is subject to any liens for Taxes
(other than for Taxes not yet due and payable). In the hands of Seller, none of
the Purchased Assets (i) is property that is required to be treated as being
owned by any other Person pursuant to the provisions of former Section 168(f)(8)
of the Internal Revenue Code of 1986 (the "CODE"); (ii) is "tax-exempt use
property" within the meaning of Section 168(h) of the Code; or (iii) directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code which debt Purchaser is assuming. For purposes of this
Agreement, "TAXES" means all federal, state, local and foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not.
4.12 RELATIONSHIPS. Schedule 4.12 sets forth all transactions since
January 1, 2002 that are (a) material to the Purchased Assets or the business of
Solutions and (b) between Solutions and (i) other divisions or subsidiaries of
Seller; (ii) any third parties which were not on an arms-length basis; and (iii)
any directors or officers or employees of Seller or Solutions (each, a "RELATED
PARTY"), excluding for these purposes normal salary, wages, bonuses and other
compensation benefits payable to Solutions' employees.
4.13 INSURANCE. Schedule 4.13 is a true and correct list of all the
policies of insurance presently in force covering the business of Solutions and
the Purchased Assets. Seller is not in material default under any of such
policies.
4.14 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in Schedule
4.14, since March 31, 2003 there has not been any:
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(a) failure to operate the business in the ordinary course
consistent with past practice;
(b) except in the ordinary course of business consistent with past
practice, material sale, assignment, license, transfer or encumbrance of
any of the Purchased Assets, tangible or intangible, singly or in the
aggregate;
(c) new contracts relating to the business of Solutions or the
Purchased Assets, or extensions, modifications, terminations or renewals
thereof, except where entered into, modified or terminated in the ordinary
course of business consistent with past practice;
(d) except in the ordinary course of business consistent with past
practice, disposition or lapsing of any of any proprietary rights in the
Intellectual Property constituting Purchased Assets, in whole or in part;
(e) to Seller's knowledge, disclosure by Seller or any employee of
Seller of any trade secret (including, without limitation, process and
know-how) relating exclusively to the business of Solutions to any Person
not an employee or not otherwise subject to a non-disclosure agreement or
fiduciary obligation of confidentiality;
(f) material change in accounting methods or practices by Seller
relating to the business of Solutions or the Purchased Assets;
(g) material revaluation by Seller of any of the Purchased Assets or
any portion thereof, including writing off or establishing reserves with
respect to inventory, notes or accounts receivable;
(h) physical damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the Purchased Assets or the
business of Solutions;
(i) capital expenditure or execution of any lease or any incurring
of liability therefor by Seller relating to the business of Solutions or
the Purchased Assets, involving payments or obligations in excess of
$100,000 in the aggregate;
(j) failure to pay when due any obligation of Seller relating to the
business of Solutions or the Purchased Assets, other than obligations that
are not material to the business of Solutions or the Purchased Assets;
(k) cancellation of any indebtedness or waiver of any rights of
substantial value relating to the Purchased Assets or the business of
Solutions by Seller, except (i) in the ordinary course of business
consistent with past practice (ii) indebtedness or rights that are not
material to the business of Solutions or the Purchased Assets;
(l) indebtedness incurred by Seller for borrowed money, or any
commitment to borrow money entered into by Seller, in connection with the
business of Solutions or
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relating to the Purchased Assets, except for indebtedness that is not
material to the business of Solutions or the Purchased Assets;
(m) payment, discharge or satisfaction of any liabilities of Seller
relating to the business of Solutions or the Purchased Assets other than
the payment, discharge or satisfaction of liabilities as they come due or
otherwise in the ordinary course of business consistent with past practice
of liabilities; or
(n) agreement by Seller directly or indirectly to do any of the
foregoing.
4.15 EMPLOYEES' PROPRIETARY RIGHTS. To Seller's knowledge, none of the
Employees (as hereinafter defined) is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of such employee's efforts to promote the interests
of Solutions or that would conflict with the business of Solutions. Neither the
execution nor delivery of this Agreement nor the carrying on the business of
Solutions will, to Seller's knowledge, conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any of such employees is now
obligated.
4.16 COMPLIANCE WITH LAW. Seller has conducted the business of Solutions
in compliance in all material respects with all applicable laws, statutes,
ordinances, regulations, rules, notice requirements, court decisions, agency
guidelines, principles of law and orders of any foreign, federal, state or local
government and any other governmental department or agency (collectively,
"REGULATIONS"). Seller has not received any notice to the effect that, or has
otherwise been advised that, Seller or any predecessor is not in compliance with
any such Regulations, and Seller has no reason to anticipate that any existing
circumstances are likely to result in a violation of any of the foregoing.
4.17 ASSETS NECESSARY TO CONDUCT THE BUSINESS. Except for the Excluded
Assets, the excluded third party intellectual property set forth on Schedule
4.17 and Seller Licensed Assets (as defined in the License Agreement), the
Intellectual Property constituting Purchased Assets and the books and records of
Seller relating to the customers who execute Customer Consents (the "CUSTOMER
INFORMATION") constitute all of the intellectual property rights and Customer
Information of Seller necessary for the conduct of the business of Solutions.
4.18 NO OTHER AGREEMENTS TO SELL THE PURCHASED ASSETS. Seller has no legal
obligation, absolute or contingent, to any other person or entity, whether an
individual, trustee, corporation, limited liability company, general
partnership, limited partnership, trust, unincorporated organization, business
association, firm, joint venture, governmental agency or authority or any
similar entity (collectively, "PERSON") to sell the Purchased Assets or any
portion thereof or to sell any portion of the business of Solutions or to effect
any merger, consolidation or other reorganization relating to the Purchased
Assets or the business of Solutions or to enter into any agreement with respect
thereto, except pursuant to this Agreement.
4.19 FOREIGN CORRUPT PRACTICES ACT. Neither Seller nor any predecessor,
nor to Seller's knowledge, any agent, employee or other Person associated with
or acting on behalf of
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Seller or any predecessor has, directly or indirectly, used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity, made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or made any unlawful bribe, rebate, payoff,
influence payment, kickback or other similar unlawful payment.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 ORGANIZATION, STANDING AND AUTHORITY. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all necessary corporate power and corporate authority to
enter into this Agreement and to perform its obligations hereunder.
5.2 CONSENTS AND AUTHORIZATION. All consents or approvals of third parties
necessary for the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby by Buyer
have been obtained. All requisite corporate action necessary to authorize the
execution, delivery and performance by Buyer of this Agreement and each of the
Ancillary Agreements has been taken. This Agreement and the Ancillary Agreements
constitute valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, arrangement or other similar laws or equitable
principles relating to or limiting creditors' rights generally.
5.3 LITIGATION AND CLAIMS. There is no action, suit, claim, proceeding or
investigation pending, or to the knowledge of Buyer, threatened, against Buyer
or before or by any Federal, state, municipal or other governmental court,
agency or instrumentality which seeks to prevent Buyer's performance of this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby.
5.4 NO BREACH. The execution and delivery of this Agreement by Buyer do
not and the consummation of the transactions contemplated hereby by Buyer will
not (a) violate any provision of Buyer's Certificate of Incorporation or Bylaws,
(b) result in the breach (or an event which, with notice or lapse of time or
both, would constitute a breach) of any term or provision of, or constitute a
default under any indenture, mortgage, deed of trust or other agreement or
arrangement to which Buyer is a party or by which it is bound, or (c) violate
any statute or law or any judgment, decree, order, regulation or rule of any
court or governmental authority to which Buyer is bound or affected, in the case
of clauses (b) and (c) that would have a material adverse effect on the ability
of Buyer to complete the transactions contemplated by this Agreement and the
Ancillary Agreements.
5.5 FINANCIAL CAPACITY. Buyer has and, on the Closing Date and the
maturity date of the Note, will have sufficient funds to pay the Purchase Price.
5.6 FINANCIAL STATEMENTS. Buyer's unaudited financial information
delivered to Seller was prepared in good faith, was prepared in accordance with
Buyer's standard practice, is
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in accordance with Buyer's books and records in all material respects, and
accurately and fairly represent the financial condition of Buyer and Buyer's
results of operations for the dates and periods presented therein in all
material respects, provided that such financial information does not include
footnotes and is subject to normal year-end adjustments.
SECTION 6. TERMINATION OF OBLIGATIONS; SURVIVAL
6.1 TERMINATION OF AGREEMENT.
Anything herein to the contrary notwithstanding, this Agreement and the
transactions contemplated by this Agreement shall terminate at the election of
Buyer or Seller at any time prior to Closing and after the close of business on
the two-month anniversary of the date of this Agreement (provided that this
provision shall not be available (i) to Buyer if Seller has the right to
terminate this Agreement pursuant to Section 6.1(c) or (ii) to Seller if Buyer
has the right to terminate this Agreement pursuant to Section 6.1(b)), unless
extended by mutual consent in writing of Buyer and Seller and may otherwise be
terminated at any time before the Closing as follows and in no other manner:
(a) Mutual Consent. By mutual consent in writing of Buyer and
Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer upon written
notice to Seller if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligations of Buyer to
consummate the transactions contemplated by this Agreement.
(c) Conditions to Seller's Performance Not Met. By Seller upon
written notice to Buyer if any event occurs which would render impossible
the satisfaction of one or more conditions to the obligation of Seller to
consummate the transactions contemplated by this Agreement.
(d) Breach. By Buyer or Seller if there has been a material
misrepresentation or material breach on the part of the other party in its
representations, warranties or covenants set forth herein (in each case,
without regard to any qualification as to materiality); provided, however,
that if such breach or misrepresentation is susceptible to cure, Seller or
Buyer, as the case may be, shall have 10 business days after receipt of
notice from the other party of its intention to terminate this Agreement
if such misrepresentation or breach continues in which to cure such breach
or misrepresentation before the other party may so terminate this
Agreement.
(e) By Buyer if Seller fails to deliver to Buyer, on or prior to the
45th day after the date of this Agreement, the Required Consents. The
Customer Consents described in Schedule 6.1(e) are referred to as the
"REQUIRED CONSENTS."
6.2 EFFECT OF TERMINATION.
In the event that this Agreement shall be terminated pursuant to this
Section 6, all further obligations of the parties under this Agreement shall
terminate without further liability of any party to another; provided that the
obligations of the parties contained in Section 15.12 regarding
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the payment of expenses shall survive any such termination.
6.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties made by Seller and Buyer herein shall
survive the Closing Date for a period of twelve (12) months (the "SURVIVAL
PERIOD"), except that the representations and warranties set forth in Section
4.11 shall survive the Closing until sixty (60) days beyond the expiration of
the applicable statutes of limitations.
SECTION 7. COVENANTS OF SELLER
7.1 OPERATION IN ORDINARY COURSE. Between the date of this Agreement and
the Closing Date, Seller shall:
(a) operate Solutions in the ordinary and normal course and
consistent with past practice, taking into account the disclosure set
forth in Schedule 4.14(a).
(b) promptly notify Buyer of any change in the ordinary and normal
conduct of Solutions or any occurrence which does or is reasonably likely
to cause any of the representations or warranties made by Seller herein to
be incomplete or incorrect in any material respect or any of the covenants
or agreements made by, or other obligations of Seller contained herein, to
be breached in any material respect.
7.2 PUBLICITY. Prior to the date hereof, Buyer and Seller have agreed to
the forms of press release to be issued by each party in connection with the
execution of this Agreement (the "APPROVED RELEASES"). Between the date of this
Agreement and the Closing Date, Seller shall not refer to Buyer's business in
any public filing or statement in any way inconsistent with the Approved
Releases.
7.3 USE OF TRADE NAMES. From and after the Closing, during the
Non-Competition Period, Seller shall not use the names "Jeeves Solutions" or
"xxxxxxxxxxxxxxx.xxx" in Seller's business for any commercial purpose.
7.4 INSURANCE. Seller shall maintain commercially reasonable levels of
insurance coverage in full force and effect through the Closing Date.
7.5 HOSTING. Seller shall provide Operational Support in the form of
hosting services (the "HOSTING SERVICES") to the fifteen (15) customers listed
on Schedule 7.5 for the period of time (the "HOSTING PERIOD") specified in each
such customer's current Service Level Agreement with Seller as of the Closing
Date or, with respect to customers for which there is no Service Level
Agreement, as specified in Schedule 7.5. "OPERATIONAL SUPPORT" as used in this
Section 7.5 shall include facility, bandwidth, hardware maintenance, monitoring
and equipment. The Hosting Services shall be provided pursuant to the existing
Service Level Agreement that each such customer has with Seller or, with respect
to customers for which there is no Service Level Agreement, in accordance with
the Service Level Agreement included in Schedule 7.5. Buyer shall pay Seller a
hosting fee (the "HOSTING FEE") in the aggregate amount of $18,804 per month for
the 15 customers, which Hosting Fee shall be paid monthly in arrears and reduced
by any downtime credits. The Hosting Fee shall be reduced on a pro rata basis in
the event that, prior to
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the end of the applicable Hosting Period for a hosted customer, Buyer from time
to time informs Seller in writing that such Hosting Services are no longer
required with respect to that customer.
7.6 INVOICING. Schedule 7.6 sets forth a list of certain Customer
Contracts, together with (a) payment terms, (b) current invoicing status, (c) a
division of responsibility for invoicing and (d) the agreement of the parties
with respect to future payments to be received thereunder. Each of Buyer and
Seller agree to be bound by the payment allocation and other provisions set
forth in Schedule 7.6. In the event that any party receives a payment that the
other party is entitled to receive pursuant to the allocation set forth in
Schedule 7.6, the party receiving the payment shall promptly (i) provide written
notice thereof to the other party and (ii) make a cash payment to the other
party equal to the amount of any such payment received, provided that Seller
shall not be required to make any such payments to Buyer prior to the Closing
Date. The parties agree to use their commercially reasonable efforts to
cooperate with each other in connection with the collection of all invoiced
amounts under the Customer Contracts.
7.7 NON-DISCLOSURE AGREEMENTS. At Buyer's request and expense, Seller
agrees to cooperate with Buyer to enforce all of Seller's rights under any such
non-disclosure or confidentiality agreement against any third party that Buyer
reasonably believes to have breached any material term thereof.
SECTION 8. COVENANTS OF BUYER
8.1 BOOKS AND RECORDS; PERSONNEL. For a period of four years from the
Closing Date:
(a) Buyer shall not dispose of or destroy any of the material
business records and files of Solutions transferred to Buyer pursuant to
the transactions contemplated by this Agreement without first offering to
turn over possession thereof to Seller by notice to Seller at least 30
days prior to the proposed date of such disposition or destruction.
(b) Buyer shall allow Seller and its agents access to all business
records and files of Solutions transferred to Buyer pursuant to the
transactions contemplated by this Agreement, during normal working hours
at Buyer's principal place of business or at any location where such
records are stored, and Seller shall have the right, at its own expense,
to make copies of any such records and files, in each case as may be
reasonably necessary for Seller, including in connection with litigation
or arbitration, tax audits or returns or governmental investigations
relating to the business of Solutions, the Purchased Assets and/or the
Assumed Liabilities. Any such access or copying shall be had or done only
upon advance written notice from Seller to Buyer and in such a manner so
as not to interfere with the normal conduct of Buyer's business.
Notwithstanding any other provision of this Section 8.1, Buyer shall have
no obligation under this Section 8.1 to furnish or make available records
or information to any third party that could reasonably be deemed at such
time to be a competitor of Buyer.
8.2 PUBLICITY. Prior to the date hereof, Buyer and Seller have agreed to
the Approved Releases. Between the date of this Agreement and the Closing Date,
Buyer shall discuss and coordinate with Seller in connection with any public
filing or announcement concerning the
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transactions contemplated hereby. Unless otherwise required by law, Buyer shall
not make any public filing, announcement or statement concerning the
transactions contemplated hereby without the prior written consent of Seller,
which consent shall not be unreasonably withheld or delayed.
8.3 EMPLOYEES/EMPLOYEE BENEFITS.
(a) EMPLOYMENT OFFERS. Buyer agrees to make an offer of at will
employment to each employee of Seller set forth on Schedule 8.3(a) (the
"EMPLOYEES"), which offers shall be at not less than market rates (it
being understood that market rates shall be determined with respect to
Buyer and comparable companies to Buyer). Buyer shall use its commercially
reasonable best efforts to hire each such Employee consistent with the
historical hiring practices of Buyer (it being understood that Buyer shall
not be obligated to offer or pay any "signing" or similar bonus to any
such Employee to the extent such bonuses are inconsistent with Buyer's
practices). The employment of all Employees that have accepted offers of
employment with Buyer shall be terminated immediately prior to the
Closing. Nothing contained in this Agreement shall confer upon any
Employee any right with respect to employment or continuance thereof, nor
shall anything herein interfere with Buyer's right to terminate the
employment of any Employee at any time, with or without cause and with or
without prior notice, or restrict Buyer in the exercise of its independent
business judgment in modifying any of the terms and conditions of
employment of any Employee. Buyer agrees for purposes of its obligations
to Seller regarding indemnification under Section 13.2(c) hereof, Buyer's
conduct of the Solutions business shall include any action that would
constitute a "Mass Layoff" or "Plant Closing" under either U.S. federal or
California law.
(b) PAYROLL TAX. Seller agrees to make a clean cutoff of payroll and
payroll tax reporting with respect to Employees paying over to the
appropriate governmental authority those amounts withheld or required to
be withheld for periods ending on or prior to the Closing Date. Seller
also agrees to issue, by the date prescribed by the Internal Revenue
Service regulations, Forms W-2 for wages paid through the Closing Date.
Buyer shall be responsible for all payroll and payroll tax obligations
after the closing Date for Employees hired by it in accordance with this
Agreement
(c) COOPERATION. Seller and Buyer will cooperate with respect to any
filings and information necessary to effect the transactions contemplated
by this Section 8.3, including transfer of employment records after
securing employee consent to such transfer.
8.4 CUSTOMER CONSENTS. Buyer agrees to cooperate with Seller in connection
with the solicitation of the Required Consents.
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SECTION 9. CONDITIONS PRECEDENT TO CLOSING
9.1 GENERAL CONDITIONS PRECEDENT TO CLOSING. The obligations of Buyer and
Seller under this Agreement are subject to the satisfaction of the following
conditions on or before the Closing Date:
(a) NO INJUNCTIONS. There shall not be in effect any injunction,
order or decree of a court of competent jurisdiction that prohibits the
transactions contemplated by this Agreement or any Ancillary Agreement by
Buyer or Seller.
(b) APPROVALS. To the extent required by applicable law, all permits
and approvals required to be obtained from any governmental entity shall
have been received or obtained on or prior to the Closing Date without the
imposition of any burdens or conditions materially adverse to the party or
parties entitled to the benefit thereof.
9.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of
Buyer under this Agreement are subject to the satisfaction of the following
conditions on or before the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in this Agreement (without regard to any
qualification as to materiality) shall be true and correct in all material
respects at and as if made on the Closing Date. Seller shall have
performed and complied in all material respects with all covenants and
agreements contained in this Agreement required to be performed or
complied with by it prior to the Closing Date. Buyer shall have received
at the Closing a certificate, dated as of the Closing Date, signed by the
Chairman of the Board or President and the Chief Financial Officer of
Seller to such effect;
(b) CLOSING DOCUMENTS. Seller shall have delivered to Buyer the
Ancillary Agreements and other documents and items described in Section
3.2 (including the cash payments, if any, under Sections 3.2(f) and 7.6)
and such other documents and items as Buyer may reasonably request in
connection with the transactions contemplated by this Agreement and the
Ancillary Agreements; and
(c) EMPLOYEES. The minimum number of Employees and the minimum
number of Key Employees, in each case as specified on Schedule 8.3(a),
shall have accepted and not revoked Buyer's offer of employment made
pursuant to the provisions of Section 8.3(a).
(d) REQUIRED CONSENTS. Seller shall have obtained and delivered to
Buyer the Required Consents.
9.3 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations of
Seller under this Agreement are subject to the satisfaction of the following
conditions on or before the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in this Agreement (without regard to any
qualification as to materiality)
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shall be true and correct in all material respects at and as if made on
the Closing Date. Buyer shall have performed and complied in all material
respects with all covenants, agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to the
Closing Date. Seller shall have received at the Closing a certificate,
dated as of the Closing Date, signed by the Chief Executive Officer and
the Chief Financial Officer of Buyer to such effect; and
(b) CLOSING DOCUMENTS. Buyer shall have delivered to Seller the
Ancillary Agreements (including the Note) and other documents and items
described in Section 3.3 and such other documents and items as Seller may
reasonably request in connection with the transactions contemplated by
this Agreement and the Ancillary Agreements.
(c) PURCHASE PRICE. Buyer shall have transferred to Seller, by wire
transfer of immediately available funds, an amount equal to $3.5 million.
SECTION 10. BROKERS
Seller and Buyer each represent to the other that neither it nor any of
its affiliates has dealt with any broker or finder in this transaction, except
that Seller has retained Credit Suisse First Boston LLC (it being understood
that Seller shall be solely responsible for the fees and expenses of Credit
Suisse First Boston LLC), and each agrees to indemnify the other against any
loss, cost or expense, including reasonable attorneys' fees, incurred as a
result of any claim for a fee or commission asserted by any broker or finder,
with respect to this Agreement or the consummation of the transactions provided
for in this Agreement whose claim arises through the indemnifying party or any
of its affiliates.
SECTION 11. REASONABLE EFFORTS; FURTHER ASSURANCES
Each of Buyer and Seller shall use its commercially reasonable efforts to
effectuate the transactions contemplated hereby and to fulfill and cause to be
fulfilled the conditions to Closing under this Agreement. Each party shall
execute and deliver both before and after the Closing such further certificates,
agreements and other documents and take such other actions as the other party
may reasonably request to consummate or implement the transactions contemplated
hereby or to evidence such events or matters.
SECTION 12. TAXES
12.1 TRANSFER TAXES. The responsibility for paying all transfer, stamp,
documentary, sales, use, registration, value-added and other similar Taxes
(including all applicable real estate transfer Taxes) and related fees
(including any penalties, interest and additions to Taxes) incurred in
connection with this Agreement and the transactions contemplated hereby will be
shared by Buyer and Seller as follows: Buyer shall be solely responsible for the
initial $10,000 of aggregate Transfer Taxes; and each of Buyer and Seller shall
be responsible for 50% of all Transfer Taxes in excess of $10,000 in the
aggregate. The parties agree to use their commercially reasonable efforts to
cooperate to minimize all such taxes.
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12.2 PRORATION OF REAL AND PERSONAL PROPERTY TAXES.
Real and personal property Taxes and assessments on the Purchased
Assets for any taxable period commencing prior to the Closing Date and ending
after the Closing Date shall be prorated on a per diem basis between Buyer and
Seller as of the Closing Date, provided, however, that Seller shall not be
responsible for any increased assessments on real or personal property resulting
from the transactions contemplated hereby. All such prorations shall be
allocated so that items relating to time periods ending on or prior to the
Closing Date shall be allocated to Seller and items relating to time periods
beginning after the Closing Date shall be allocated to Buyer, provided, however,
that the parties shall allocate any real property Tax in accordance with Section
164(d) of the Code. The amount of all such prorations shall be settled and paid
on the Closing Date, provided that final payments with respect to prorations
that are not able to be calculated as of the Closing Date shall be calculated
and paid as soon as practicable thereafter. If any of the real or personal
property tax rates for the current taxable period are not established by the
Closing Date, the prorations shall be made on the basis of the rate in effect
for the preceding taxable period, and such proration shall be adjusted upon
presentation of written evidence by the Buyer that the actual taxes paid differ
from the amount assumed on the Closing Date.
12.3 WITHHOLDING EXEMPTION. Seller shall deliver to Buyer at the Closing
all necessary forms and certificates complying with applicable law, duly
executed and acknowledged, certifying that the transactions contemplated hereby
are exempt from withholding under Section 1445 of the Code.
12.4 CHARACTERIZATION OF PAYMENTS. Any payments made to any party pursuant
to Section 13 shall constitute an adjustment of the Purchase Price for Tax
purposes and shall be treated as such by Buyer and Seller on their Tax Returns
to the extent permitted by law.
SECTION 13. INDEMNIFICATION
13.1 INDEMNITIES BY SELLER. Seller will be liable for and hereby agrees to
indemnify and defend Buyer from and against any and all losses, liabilities,
damages, demands, claims, actions, judgments or causes of action, assessments,
costs and expenses (including, without limitation, interest, penalties and
reasonable attorneys' fees) (collectively, "LOSSES") incurred or sustained by
Buyer as a result of (a) any Excluded Liability, (b) any inaccuracy or breach of
any representation, warranty, covenant or agreement of Seller contained herein
or in any Ancillary Agreement or (c) the conduct of the business of Solutions
prior to the Closing. Notwithstanding the foregoing, Seller shall not be liable
to Buyer for any consequential or speculative damages, it being understood that
Buyer's loss of revenue or income under any Customer Contract resulting from or
arising out of any such breach shall not be deemed to be consequential or
speculative damages.
13.2 INDEMNITIES BY BUYER. Buyer will be liable for and hereby agrees to
indemnify and defend Seller from and against any and all Losses incurred or
sustained by Seller as a result of (a) any Assumed Liability, (b) any inaccuracy
or breach of any representation, warranty, covenant or agreement of Buyer
contained herein or in any Ancillary Agreement or (c) the
19
conduct of the business of Solutions after the Closing. Notwithstanding the
foregoing, Buyer shall not be liable to Seller for any consequential or
speculative damages.
13.3 LIMITATIONS. Seller shall have no liability (for indemnification or
otherwise) with respect to any matter described in Section 13.1 (other than any
liability (for indemnification or otherwise) resulting from or arising out of
any breach of Seller's representations and warranties set forth in Section 4.11
(Taxes)) until the total of all Losses with respect to all such matters exceeds
an amount equal to $75,000 (the "LOSS THRESHOLD"), in which case Buyer shall be
entitled to recover all Losses (including such $75,000), subject to the
limitations set forth below, for which Seller may be liable. Except as otherwise
set forth in Section 5.4 of the License Agreement, no party's aggregate
liability (for indemnification or otherwise) arising out of this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby shall
exceed $1.5 million, provided that this limitation shall not apply in the case
of any Major Claim. "MAJOR CLAIM" shall mean (a) with respect to Seller, (i) any
Excluded Liabilities or (ii) any breach of Seller's representations in Section
4.1 (except the last sentence thereof), 4.2 (except the first sentence thereof),
4.3 and 4.11, and (b) with respect to Buyer, (i) any Assumed Liabilities, (ii)
any breach of Buyer's representations in Sections 5.1 or 5.2 (except for the
first sentence thereof) or (iii) any breach of (x) Buyer's obligation to pay the
Purchase Price in accordance with the provisions of this Agreement and the Note.
Except as otherwise set forth in Section 5.4 of the License Agreement, no party
will be entitled to recover for Losses in excess of the Purchase Price for all
claims arising out of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby, including Major Claims. Excluding
claims arising under the License Agreement, no party may initiate any claim for
indemnification pursuant to this Section 13 after the fourteen-month anniversary
of the Closing Date.
13.4 NOTICE AND DEFENSE. Promptly upon receipt by either Seller or Buyer
of notice of the assertion of any claim in respect to which indemnity may be
sought against the other party (the "INDEMNIFYING PARTY") pursuant to this
Section 13 that party (the "INDEMNIFIED PARTY") shall notify the Indemnifying
Party in writing and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party, and the payment of all expenses. The failure of any Indemnified Party to
give timely notice hereunder shall not affect rights to indemnification
hereunder, except and only to the extent that, the Indemnifying Party
demonstrates actual material damage caused by such failure, and then only to the
extent thereof. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expense of the Indemnified Party
unless (a) the Indemnifying Party has agreed to pay such fees and expenses, (b)
the Indemnifying Party shall have failed to assume the defense of such action or
proceeding and has failed to employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding or (c) the named parties to
any such action or proceeding (including any impleaded parties) include both the
Indemnified and Indemnifying Party, and the Indemnified Party shall have been
advised by counsel that there are one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party (in which case, if the Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of the
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such
20
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Indemnified Party, which firm
shall be designated in writing by the Indemnified Party). The Indemnifying Party
will not consent to the entry of any judgment or enter into any settlement with
respect to any claim without the prior written consent of the Indemnified Party
(which consent will not be unreasonably withheld or delayed) unless the judgment
or proposed settlement (a) includes an unconditional release of all liability of
each Indemnified Party with respect to such claim, (b) involves only the payment
of money damages that are fully covered by the Indemnifying Party and (c) does
not impose an injunction or other equitable relief upon the Indemnified Party.
The Indemnifying Party shall not be liable for any settlement of any such action
or proceeding affected without its written consent, but if settled with its
written consent, or if there be a final judgment for the plaintiff in any such
action or proceeding, the Indemnifying Party shall indemnify and hold harmless
the Indemnified Party from and against any loss or liability by reason of such
settlement or judgment.
13.5 SATISFACTION OF CLAIMS. In the event that Buyer makes a claim for
indemnification pursuant to this Section 13, such claim shall be made in
accordance with the provisions of this Section 13 and shall be specified in a
written notice (the "SATISFACTION NOTICE") to Seller. The principal amount of
the Note shall be reduced, on a dollar for dollar, basis to the extent necessary
to satisfy in full any such resolved claim subject to the limitations of
liability set forth in this Section 13. In the event of an unresolved claim at
the time the Note is due and payable, Buyer shall be permitted to delay payment
of such portion of the Note reasonably necessary to satisfy in full the portion
of such unresolved claim until resolution of such claim. Seller shall have 30
days to review and, if Seller disagrees with any matter set forth in a
Satisfaction Notice, object in writing to such Satisfaction Notice. In case
Seller shall not object in writing to any claim or claims made in any
Satisfaction Notice within such 30-day period, Seller shall be deemed to have
agreed to such Satisfaction Notice and the reduction of the principal amount of
the Note as set forth herein. In case Seller shall object in writing to any
claim or claims made in any Satisfaction Notice within such 30-day period, Buyer
and Seller shall attempt in good faith to agree upon the rights of the
respective parties with respect to each of such claims. If Buyer and Seller
should so agree, such agreement shall be set forth in writing and signed by both
parties. If no such agreement can be reached after good faith negotiation,
subject to Section 13.6 either Buyer or Seller may pursue all remedies available
to it under the provision of this Agreement, at law or in equity to resolve the
validity or amount of the disputed claim.
13.6 EXCLUSIVE REMEDY. The provisions of this Section 13 shall constitute
the exclusive remedy after the Closing Date for any and all Losses asserted
against, resulting from, imposed upon or incurred or suffered by the parties to
this Agreement as a result of, or based upon or arising from the transactions
contemplated by this Agreement.
21
SECTION 14. ADDITIONAL COVENANTS
14.1 NONCOMPETITION; CONFIDENTIAL INFORMATION.
(a) NONCOMPETITION. Seller hereby covenants and agrees with Buyer
that, at all times until the earlier of (i) three years following the
Closing Date and (ii) the date on which Buyer ceases to exist (the
"NONCOMPETITION PERIOD"), Seller shall not in any manner, directly or
indirectly (including through entities controlled by Seller), engage in
the business of the development, marketing, sale, distribution, service or
support of enterprise search, knowledge management or related applications
to corporations directly or through distribution partners (the "BUSINESS")
(i) in any state of the United States or (ii) in any country in which
Buyer currently conducts business; provided, however, that in the event of
a Change of Control of Seller, this Section 14.1 shall not prohibit the
party obtaining control of Seller from engaging in the Business provided
that the Business either (x) existed as of such change of Control or (y)
is independently developed by such party wholly separate and independent
from Seller after such Change of Control. For purposes of this section,
"ENGAGING IN" means actively investing in (and shall not include passively
investing in any company that makes bona fide investments), soliciting
customers for, owning stock or any other equity interest in, lending money
to, guaranteeing the debts or obligations of, permitting one's name to be
used in connection with, licensing technology or intellectual property
rights or otherwise materially engaging in, either individually or in a
partnership or in conjunction with any other person or entity. Subject to
the foregoing, the sale, distribution and support of any Excluded Assets
shall not, by itself, be deemed to be engaging in the Business or
otherwise a breach of this Section 14.1. For purposes of this Section
14.1, a "CHANGE OF CONTROL" means any of the following: (1) any sale or
transfer of all or substantially all of the assets of Seller; (2) any
merger consolidation or other business reorganization in which the holders
of Seller's outstanding voting securities immediately prior to such
transaction do not hold, immediately following such transaction,
securities representing 50% or more of the combined voting power of the
outstanding securities of the surviving entity; (3) the acquisition by any
person (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), of
beneficial ownership (within the meaning of Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of securities
representing 50% or more of the combined voting power of the then
outstanding securities of Seller.
(b) NO SOLICITATION. During the Noncompetition Period, Seller agrees
not to directly solicit the employment of any employee of Buyer or any
parent or subsidiary of Buyer.
(c) REMEDIES. The necessity of protection against the competition of
Seller and the nature and scope of such protection has been carefully
considered and agreed upon by the parties hereto. Seller acknowledges that
the nature of the business of Solutions is highly competitive, that one of
the most valuable Purchased Assets of Solutions is its goodwill in the
marketplace and among its customers, which Seller developed and maintained
in the course of Seller's ownership of Solutions, and that Buyer, in
purchasing the Purchased Assets and entering into the transactions
22
contemplated by this Agreement, has relied on the fact that it will
acquire the goodwill of Solutions and therefore on Seller's willingness to
restrict Seller's ability to compete with Buyer or any current or future
affiliate of Buyer in the conduct of the business of Solutions. Seller and
Buyer hereby agree and acknowledge that the duration, scope and geographic
area applicable to the restrictions set forth in this Section 14.1 are
fair, reasonable and necessary and include the area in which the goodwill
of the business of Solutions has been developed by Seller. Seller
acknowledges that the consideration provided for herein is sufficient and
adequate to compensate Seller for agreeing to the restrictions contained
in this Section 14.1 and that such restrictions will not cause Seller
undue hardship. If, however, any court determines that the foregoing
restrictions are unreasonable and for that reason unenforceable, such
restrictions shall be modified, rewritten or interpreted to include as
much of their nature and scope as will render them enforceable. Seller and
Buyer agree that a monetary remedy for a breach of this Section 14.1 will
be inadequate and will be impracticable and extremely difficult to prove,
and further agree that such a breach would cause Buyer irreparable harm,
and that Buyer shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damages. Seller agrees that
Buyer shall be entitled to such injunctive relief, including temporary
restraining orders, preliminary injunctions and permanent injunctions,
without the necessity of posting bond or other undertaking in connection
therewith. Any such requirement of bond or undertaking is hereby waived by
Seller, and Seller acknowledges that in the absence of such a waiver, a
bond or undertaking may be required by the court.
14.2 CONFIDENTIAL INFORMATION.
(a) CONFIDENTIAL INFORMATION. The parties acknowledge that they have
received or may receive confidential information relating to the other
party's products, concepts, inventions and technology relating to such
products, product, business and financial plans, customer lists and
information and trade secrets in connection with the performance of this
Agreement, together with such other information designated as confidential
or proprietary by one party or which should be reasonably understood by
the receiving party as confidential information of the disclosing party
(collectively, "CONFIDENTIAL INFORMATION"). The schedules and exhibits to
the License Agreement shall be considered Confidential Information of the
respective parties. Confidential Information shall not include any
information which: (i) is or falls into the public domain without fault of
the receiving party; (ii) the receiving party can show was in its
possession prior to receipt thereof from the disclosing party; (iii) the
receiving party receives from a third party with no obligation of
confidence to the disclosing party; or (iv) the receiving party
independently develops without benefit of any Confidential Information of
the disclosing party.
(b) USE OF CONFIDENTIAL INFORMATION. Except as (i) expressly
permitted or required in carrying out this Agreement or any of the
Ancillary Agreements or (ii) such limited disclosures in confidence as may
be reasonably necessary to either party's attorneys and accountants, the
receiving party of any Confidential Information ("RECIPIENT") disclosed by
a disclosing party ("DISCLOSER") shall not use such Confidential
Information or disclose such Confidential Information to any third party,
23
during the term of the License Agreement and thereafter, without the prior
written consent of Discloser. Thus, Recipient shall use the Confidential
Information only to perform its obligations under this Agreement and the
Ancillary Agreements and to the extent permitted in the licenses granted
thereunder. Recipient may disclose the Discloser's Confidential
Information to its employees (both standard employees and temporary
employees), consultants or contractors on a need-to-know basis solely for
the purposes of this Agreement and the Ancillary Agreements. Prior to
disclosing Discloser's Confidential Information to an employee, consultant
or contractor, Recipient shall have executed with such party an agreement
which restricts use or disclosure of Discloser's Confidential Information
(or categories of Confidential Information which encompass Confidential
Information) in a manner consistent with this Agreement. Recipient shall
protect such Confidential Information with the same degree of care used to
protect its own proprietary information of like importance, but in any
case using no less than a reasonable degree of care.
(c) REQUIRED DISCLOSURE. Nothing in this Agreement shall prohibit
either party from disclosing Confidential Information of the other party
as required by law or by judicial or governmental order or by deposition,
interrogatory, request for documents, subpoena, civil investigative demand
or similar process in a judicial or governmental proceeding ("REQUIRED
DISCLOSURE"), provided that the disclosing party shall (i) give the other
party prompt notice of such Required Disclosure prior to disclosure, (ii)
cooperate with the other party in the event that it elects to contest such
disclosure or seek a protective order with respect thereto and (iii) in
any event only disclose the exact Confidential Information, or portion
thereof, specifically requested by the Required Disclosure. The parties
acknowledge that Seller may be obligated to file this Agreement and one or
more of the Ancillary Agreements as "material contracts" under the
Securities Exchange Act of 1934, as amended.
(d) OWNERSHIP OF CONFIDENTIAL INFORMATION. All Confidential
Information shall remain the property of the respective Discloser and
shall be returned to the owner thereof or destroyed upon written request,
except as expressly permitted or required in carrying out this Agreement
and the Ancillary Agreements or upon Recipient's determination that it no
longer has a need for such Confidential Information. Recipient's duty to
protect Confidential Information commences upon receipt of the
Confidential Information.
(e) NO LICENSES OR WARRANTIES FOR CONFIDENTIAL INFORMATION. Except
as otherwise provided in the License Agreement, no license under any
Intellectual Property Right (as defined in the License Agreement) is
granted or implied by the conveying of Confidential Information to
Recipient. None of the Confidential Information which may be disclosed by
Discloser shall constitute any representation, warranty, assurance,
guarantee, or inducement by Discloser of any kind, and, in particular,
with respect to the non-infringement of any Intellectual Property Rights,
or other rights of third persons or of Discloser.
24
SECTION 15. MISCELLANEOUS
15.1 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits to this
Agreement and the documents specifically referred to herein and therein
constitute the entire agreement and understanding of the parties and supersede
any prior oral or written agreement, understanding, representation, warranty,
promise or document relating to the subject matter of this Agreement.
15.2 MODIFICATION. This Agreement may be amended or modified only by a
written instrument executed by the parties hereto.
15.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.4 SECTION HEADINGS. The section and other headings contained in this
Agreement and in the Exhibits and Schedules hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement, the Exhibits or the Schedules.
15.5 WAIVER. No omission or delay by any party in exercising any right,
power or privilege hereunder shall impair the exercise of any such right, power
or privilege or be construed to be a waiver hereof or of any default or to be an
acquiescence therein, and any single or partial exercise of any such right,
power or privilege shall not preclude other or further exercises thereof or the
exercise of any other right, power or privilege. No waiver shall be valid unless
in writing and signed by the party to be charged, and then only to the extent
therein specified.
15.6 SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
15.7 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with laws of the State of California without reference to
the conflicts of law principles thereof.
15.8 NON-ASSIGNABILITY. This Agreement is not assignable by either party
hereto without the prior written consent of the other party.
15.9 PARTIES IN INTEREST. All of the terms and provisions of this
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and any permitted successors and assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
15.10 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given, (i)
if delivered in person, (ii) if
25
mailed by certified or registered mail, postage prepaid, or (iii) if transmitted
by facsimile, provided that any notice so given is also mailed as provided in
clause (ii) above, as follows:
If to Seller: Ask Jeeves, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, General Counsel
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to Buyer: Kanisa Inc.
00000 Xxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
or to such other address as the party to be notified shall have furnished to the
other party in writing. Any notice given in accordance with the foregoing shall
be deemed to have been given, (i) when delivered in person, or by courier or a
nationally recognized overnight delivery service, (ii) when transmitted by
facsimile as provided for above, or (iii) three business days following the date
on which it shall have been mailed.
15.11 KNOWLEDGE CONVENTION. Any representation or warranty herein made to
a party's knowledge (or words of similar import) is limited to the actual
knowledge possessed by the executive officers of such party.
15.12 EXPENSES. Buyer and Seller shall each pay its own respective legal,
accounting, advisory and other fees and other out-of-pocket expenses incurred in
connection with the
26
transactions contemplated by this Agreement and will not look to the other party
for any contribution toward such expenses.
15.13 WAIVER OF JURY TRIAL. EACH SIGNATORY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM
OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY DEALINGS BETWEEN ANY OF THE SIGNATORIES HERETO
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY. The scope of this waiver is intended to be all encompassing
of any and all disputes that may be filed in any court and that relate the
subject matter of this Agreement or any of the transactions contemplated hereby,
including, without limitation, contract claims, tort claims, and all other
common law and statutory claims. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications to this Agreement, any
of the transactions contemplated hereby or to any other document or agreement
relating to the transactions contemplated hereby.
15.14 ATTORNEY FEES. If any party to this Agreement brings an action to
enforce its rights under this Agreement in accordance with the provisions
hereof, the prevailing party shall be entitled to recover its actual
out-of-pocket costs and expenses, including without limitation attorneys' fees
and court costs reasonably incurred in connection with such action, including
any appeal of such action.
SERVICE OF PROCESS; CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY PROCESS, PLEADING, NOTICES OR OTHER
PAPERS BY THE MAILING OF COPIES THEREOF BY REGISTERED, CERTIFIED OR FIRST CLASS
MAIL, POSTAGE PREPAID, TO SUCH PARTY AT SUCH PARTY'S ADDRESS SET FORTH HEREIN,
OR BY ANY OTHER METHOD PROVIDED OR PERMITTED UNDER CALIFORNIA LAW.
EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (I) AGREES THAT ANY SUCH
SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF THIS AGREEMENT MAY BE
BROUGHT IN THE UNITED STATES DISTRICT COURT IN THE NORTHERN DISTRICT OF THE
STATE OF CALIFORNIA OR, IF SUCH COURT DOES NOT HAVE JURISDICTION OR WILL NOT
ACCEPT JURISDICTION, IN ANY COURT OF GENERAL JURISDICTION IN THE COUNTY OF SANTA
XXXXX, STATE OF CALIFORNIA; (II) CONSENTS TO THE JURISDICTION OF ANY SUCH COURT
IN ANY SUCH SUIT, ACTION OR PROCEEDING; AND (III) WAIVES ANY OBJECTION WHICH
SUCH PARTY MAY HAVE OT THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY SUCH COURT.
27
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
SELLER:
ASK JEEVES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Title: General Counsel and Secretary
----------------------------------
BUYER:
KANISA INC.
a Delaware corporation
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Title: CEO
----------------------------------
S-1
EXHIBIT A
CUSTOMER CONSENT
[Ask Jeeves, Inc. Letterhead]
May __, 2003
[Name]
[Address]
Re: Proposed transfer by Ask Jeeves, Inc. of substantially all of the assets
of Jeeves Solutions, a division of Ask Jeeves, Inc.
Dear [Name]:
Ask Jeeves, Inc. plans to sell substantially all of the assets of Jeeves
Solutions, a division of Ask Jeeves, to Kanisa, Inc. Your [___________]
agreement, dated as of [______], with Ask Jeeves (the "Agreement") may require
that we seek your consent to any assignment of the Agreement in connection with
this transaction. Accordingly, Ask Jeeves hereby respectfully requests that you
consent to the assignment of the Agreement to Kanisa by signing and returning
the form of consent attached to this letter.
We are working hard with the Kanisa to close the sale by [_______]. To that end,
we ask that you please respond to this letter if at all possible by no later
than [_________]. Should you have any questions about the consent or the
proposed transaction with Kanisa, please feel free to contact me at (510)
___-_____ or _______@xxxxxxxxx.xxx
Sincerely,
[Name]
FORM OF CONSENT
May ___, 2003
Ask Jeeves, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Re: Proposed transfer by Ask Jeeves, Inc. of substantially all of the assets
of Jeeves Solutions, a division of Ask Jeeves, Inc.
Ladies and Gentlemen:
Reference is made herein to [_______] (the "Agreement").
The undersigned hereby consents to the transfer by Ask Jeeves, Inc., a Delaware
corporation ("Ask Jeeves"), of substantially all of the assets of Jeeves
Solutions, a division of Ask Jeeves, to Kanisa, Inc. ("Kanisa") and the
assignment of the Agreement to Kanisa, for all purposes under the Agreement.
This consent is not intended to modify any term or provision of the Agreement
and does not apply to any transaction other than the proposed transaction with
Kanisa.
_____________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT B
XXXX OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
This Xxxx of Sale and Assignment and Assumption Agreement (this "XXXX OF
SALE") is made as of May ___, 2003 by and between Ask Jeeves, Inc., a Delaware
corporation ("SELLER"), and Kanisa, Inc., a Delaware corporation ("BUYER").
Seller and Buyer are parties to that certain Asset Purchase Agreement dated as
of May __, 2003 (the "PURCHASE AGREEMENT"), and this Xxxx of Sale is being made
and entered into pursuant thereto. Capitalized terms used without definitions in
this Xxxx of Sale will have the same meanings ascribed to such terms in the
Purchase Agreement.
1. SALE OF PURCHASED ASSETS. Buyer has on the date hereof purchased the
Purchased Assets from Seller as provided in the Purchase Agreement. In
accordance with and subject to the terms and conditions of the Purchase
Agreement, for good and valuable consideration, the receipt of which is hereby
acknowledged, Seller hereby unconditionally and irrevocably sells, assigns,
bargains, transfers, conveys and delivers to Buyer, and Buyer hereby acquires,
all legal, beneficial and other right, title and interest in and to the
Purchased Assets. Notwithstanding the foregoing, with respect to each Purchased
Asset set forth on Schedule A hereto, neither the Purchase Agreement nor this
Xxxx of Sale shall constitute an assignment or transfer (or an attempted
assignment or transfer) thereof until any consent, approval or waiver of another
party thereto or any third party (including any governmental authority) required
for such assignment or transfer has been duly obtained.
2. ASSUMPTION OF ASSUMED LIABILITIES. In accordance with and subject to
the terms and conditions set forth in the Purchase Agreement, in partial
consideration for the sale and transfer of the Purchased Assets by Seller, Buyer
hereby undertakes to assume, pay, perform, satisfy and discharge all of the
Assumed Liabilities and to be bound by the terms of the Assumed Contracts. The
foregoing assumption shall be effective immediately; provided that that with
respect to each Assumed Liability and Assumed Contract set forth on Schedule B
hereto, neither the Purchase Agreement nor this Xxxx of Sale shall constitute an
assignment or transfer (or attempted assignment or transfer) thereof until any
consent, approval or waiver of another party or any third party (including any
governmental authority) required for any transfer or assignment has been duly
obtained. Buyer does not assume and does not agree to assume or pay any
Liabilities other than Assumed Liabilities.
3. FURTHER ASSURANCES. Each of Buyer and Seller, for itself and its
successors and assigns, hereby covenants and agrees that, without further
consideration, at any time and from time to time after the date hereof, it will
cooperate with the other party hereto to execute and deliver such other
documents and instruments and to do such further acts and things as from time to
time may be reasonably requested by such other party to evidence, vest, perfect
and confirm, document and carry out Seller's sale of the Purchased Assets to
Buyer, and Buyer's right, title and interest therein, Buyer's assumption of the
Assumed Liabilities, and Seller's assignment of the Assumed Contracts to Buyer,
in each case as contemplated by the Purchase Agreement and this Xxxx of Sale.
4. EFFECT OF XXXX OF SALE. Nothing in this Xxxx of Sale will, or will be
deemed to, modify or otherwise affect any provisions of the Purchase Agreement
or affect or modify any of
the rights or obligations of the parties under the Purchase Agreement. In the
event of any conflict between the provisions hereof and the provisions of the
Purchase Agreement, the provisions of the Purchase Agreement will govern and
control. This Xxxx of Sale may be executed in counterparts, and facsimile
signatures will have the full legal effect of the original signatures.
[REMAINDER OF PAGE IS INTENTIONALLY BLANK]
2
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale to be executed on
the date first written above.
ASK JEEVES, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
KANISA, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
[SIGNATURE PAGE TO XXXX OF SALE]
3
EXHIBIT C
LICENSE AGREEMENT
This License Agreement ("AGREEMENT") is made and entered into as of
the Closing Date (as defined below) by and between Ask Jeeves, Inc., a Delaware
corporation, having a principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000 ("SELLER") and Kanisa, Inc., a Delaware corporation,
having a principal place of business at 00000 Xxxxxxx Xxxxx Xxxx., Xxxxx 000,
Xxxxxxxxx, XX, 00000 ("BUYER").
WHEREAS, Jeeves Solutions ("SOLUTIONS") is a business unit of Ask
Jeeves, Inc., and Seller is the sole owner of the assets of Solutions;
WHEREAS, concurrent with and as a condition to the execution of this
Agreement, the parties are entering into an Asset Purchase Agreement ("APA")
whereby Buyer is acquiring certain assets of Solutions ("ACQUIRED ASSETS") from
Seller;
WHEREAS, Buyer desires a non-exclusive license to certain identified
assets of Seller for Buyer's use with the Acquired Assets and Seller is willing
to grant a license to such assets ("SELLER LICENSED ASSETS") to Buyer; and
WHEREAS, Seller desires a non-exclusive license to certain of the
Acquired Assets from Buyer and Buyer is willing to grant such a license to
Seller.
NOW, THEREFORE, in consideration of the above, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. DEFINITIONS
1.1 "BUYER LICENSED ASSETS" shall mean those certain assets of Seller that
are acquired by Buyer pursuant to the APA and licensed by Buyer to Seller
hereunder as set forth on Exhibit A hereto.
1.2 "BUYER'S BUSINESS" shall mean the development, marketing, sale,
distribution, service or support of enterprise search, knowledge management, or
related applications to corporations directly or through distribution partners.
1.3 "CLOSING DATE" as used in this Agreement shall have the meaning
ascribed to it in the APA.
1.4 "DERIVATIVE WORKS" shall mean a work that is based upon one or more
preexisting works, such as a revision, modification, translation, abridgment,
condensation, expansion, or any other form in which such preexisting works may
be recast, transformed, or adapted, and that, if prepared without the
authorization of the owner of the copyright in such preexisting work, would
constitute a copyright infringement. For purposes hereof, Derivative Work shall
also include any compilation that incorporates such a preexisting work.
1.5 "INTELLECTUAL PROPERTY RIGHTS" shall mean any intellectual property or
proprietary rights, including but not limited to patent rights (including patent
applications and
disclosures), copyright rights, trade secret rights and any other intangible
rights of a similar nature to any of the foregoing whether or not registered, in
any part of the world.
1.6 "LICENSED PRODUCTS" shall mean any product or service.
1.7 "SELLER LICENSED ASSETS" shall mean the "Seller Licensed Patents" and
"Seller Licensed Software and Related IP" that are set forth on Exhibit B
hereto.
1.8 "SELLER'S BUSINESS" shall mean Seller's search technology-related
business on the world wide web or any consumer-facing Internet media properties.
1.9 "KNOWLEDGE" as used in this Agreement shall have the meaning ascribed
to it in Section 15.11 of the APA.
2. LICENSE
2.1 LICENSE FROM SELLER TO BUYER. Subject to the terms and conditions of
this Agreement, Seller hereby grants to Buyer, under Seller's Intellectual
Property Rights:
(a) in and to the Seller Licensed Software and Related IP that are
either owned by Seller or licensable by Seller without incurring any license
fees or other amounts payable to third parties a non-exclusive, non-transferable
(except as allowed under Section 7.3 herein), non-sublicensable, non-royalty
bearing and fully paid, worldwide and perpetual license to use, reproduce,
distribute, display, modify or create derivative works from any of the Seller
Licensed Software and Related IP, and sell or otherwise dispose of (either
directly or indirectly through distributors, resellers or other distribution
channels) any Licensed Products solely in the Buyer's Business; and
(b) in and to the Seller Licensed Patents a non-exclusive,
non-transferable (except as allowed under Section 7.3 herein),
non-sublicensable, non-royalty bearing and fully paid, worldwide and perpetual
license to make, have made, offer for sale, sell (either directly or indirectly
through distributors, resellers or other distribution channels), import or
otherwise dispose of any Licensed Products solely in the Buyer's Business.
2.1.1 DELIVERY OF SELLER LICENSED ASSETS. Within 3 business days after the
Closing Date, to the extent that delivery has not occurred under the APA, Seller
will deliver the Seller Licensed Assets to Buyer.
2.2 LICENSE FROM BUYER TO SELLER. Subject to the terms and
conditions of this Agreement, Buyer hereby grants to Seller, under Buyer's
Intellectual Property Rights:
(a) in and to the Buyer Licensed Assets (Group A), a non-exclusive,
non-transferable (except as allowed under Section 7.3 herein),
non-sublicensable, non-royalty bearing and fully paid, worldwide and perpetual
license to use, reproduce, distribute, display, modify or create derivative
works from any of the Buyer Licensed Assets (Group A), and sell or otherwise
dispose of (either directly or indirectly through distributors, resellers or
other distribution channels) any Licensed Products solely in the Seller's
Business; and
2
(b) in and to the Buyer Licensed Assets (Group B), a non-exclusive,
non-transferable (except as allowed under Section 7.3 herein),
non-sublicensable, non-royalty bearing and fully paid, worldwide, perpetual
license for internal use of such Buyer Licensed Assets (Group B) by Seller.
2.3 RESTRICTIONS & OBLIGATIONS.
(a) Seller hereby agrees that it shall not use or otherwise exploit
the Buyer Licensed Assets, or any portion thereof, except as expressly
authorized in this Agreement.
(b) Seller will provide the following support and maintenance at no
charge to Buyer in connection with the Seller Licensed Assets: (i) promptly
following the Closing Date, on a schedule as mutually agreed, Seller will
provide Buyer with training on the use and integration of the Seller Licensed
Assets with the Acquired Assets; (ii) for a period of 3 full calendar months
from the Closing Date (the "Initial Support Period"), Seller will provide Buyer
with a designated engineer who will provide up to 60 hours of technical support
per month as and when reasonably requested by Buyer in connection with the
Acquired Asset known as the Enterprise Integration Server; and (iii) for a
period of 3 full calendar months from the end of the Initial Support Period,
Seller will provide Buyer with a designated engineer who will provide up to 40
hours of technical support per month as and when reasonably requested by Buyer
in connection with the Acquired Asset known as the Enterprise Integration
Server.
(c) Buyer hereby agrees that it shall not use or otherwise exploit
the Seller Licensed Assets, or any portion thereof, except as expressly
authorized in this Agreement.
(d) Seller hereby agrees that, to the extent Seller becomes aware of
any additional patent or patent application that was inadvertently not listed on
Exhibit B, Seller shall notify Buyer and with the mutual agreement of the
parties that such additional patent or patent application should have been
listed on Exhibit B as contemplated by the rights granted under this Agreement
and with no liability on either party associated with such addition, the parties
shall enter into an amendment to this Agreement whereby such patent or patent
application shall be added to Exhibit B.
2.4 PROPRIETARY RIGHTS.
(a) Seller hereby acknowledges and agrees that Buyer owns all right,
title and interest in and to the Buyer Licensed Assets (including Derivative
Works thereof, except to the extent created by or on behalf of Seller with
respect to Buyer Licensed Software and Related IP ("Seller Modifications"),
which Seller Modifications shall be owned by Seller), and all Intellectual
Property Rights therein. Buyer reserves all right, title and interest in and to
the Buyer Licensed Assets (including Derivative Works thereof except for the
Seller Modifications) and, except for the licenses expressly granted in this
Agreement, no right, title, ownership, interest or license in or to the Buyer
Licensed Assets (including Derivative Works thereof except for the Seller
Modifications)
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whether by implication, estoppel or otherwise, is granted, assigned or
transferred to Seller under, or in connection with, this Agreement.
(b) Buyer hereby acknowledges and agrees that, as between Buyer and
Seller, Seller owns all right, title and interest in and to the Seller Licensed
Assets (including Derivative Works thereof, except to the extent created by or
on behalf of Buyer with respect to the Seller Licensed Software and Related IP
("Buyer Modifications"), which Buyer Modifications shall be owned by Buyer), and
all Intellectual Property Rights therein. Seller reserves all right, title and
interest in and to the Seller Licensed Assets (including Derivative Works
thereof except for the Buyer Modifications ) and, except for the licenses
expressly granted in this Agreement, no right, title, ownership, interest or
license in or to the Seller Licensed Assets (including Derivative Works thereof
except for the Buyer Modifications ) whether by implication, estoppel or
otherwise, is granted, assigned or transferred to Buyer under, or in connection
with, this Agreement.
3. NOTICE OF INFRINGEMENT
3.1 In the event Seller becomes aware of any infringement of any
Intellectual Property Right possessed by Buyer related to the Acquired Assets or
the Seller Licensed Assets, it shall promptly provide notice thereof in writing
to Buyer.
3.2 In the event Buyer becomes aware of any infringement of any
Intellectual Property Right possessed by Seller related to the Seller Licensed
Assets, it shall promptly provide notice thereof in writing to Seller.
3.3 Seller will be responsible for the prosecution and maintenance of the
patents and patent applications included in the Seller Licensed Assets.
4. CONFIDENTIALITY
4.1 CONFIDENTIAL INFORMATION. The confidentiality provisions of the APA
are hereby incorporated herein in full by this reference and will govern all
transactions hereunder.
5. WARRANTIES; DISCLAIMER; LIMITATION OF LIABILITY
5.1 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby represents and
warrants that:
(a) it has the power and authority to enter into this Agreement and
to perform its obligations hereunder;
(b) this Agreement is binding on, and enforceable against, Buyer in
accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditor's rights and by rules of law
governing specific performance, injunctive relief or other equitable remedies;
and
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(c) compliance with this Agreement by Buyer shall not conflict with
or result in the breach of any agreement to which Buyer is a party or to which
Buyer is otherwise bound.
5.2 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby represents and
warrants that:
(a) it has the power and authority to enter into this Agreement and
to perform its obligations hereunder; Seller further represents and warrants the
following: (i) to the Seller's knowledge only with respect to patent rights and
without any knowledge qualifier with respect to non-patent rights, Seller has
the right to grant to Buyer the licenses to use the Seller Licensed Assets set
forth in this Agreement without violating any rights of a third party; (ii)
Seller has not previously or otherwise granted any rights to any third party
which conflict with the rights granted herein; (iii) there is no violation,
litigation, arbitration or other proceeding pending with regard to the Seller
Licensed Assets before any court or any other governmental or administrative
agency, nor has Seller received any written notice regarding any violation by
Seller in connection with the Seller Licensed Assets; (iv) the Seller Licensed
Assets were created, developed, registered and protected in compliance with all
applicable laws and regulations and, to the Seller's knowledge only with respect
to patent rights and without any knowledge qualifier with respect to non-patent
rights, the Seller Licensed Assets in no way constitute an infringement or other
violation of any intellectual property rights of any third party; (v) there are
no liens, conveyances, mortgages, assignments, encumbrances or other agreements
to which Seller is a party or by which it is bound which would prevent or impair
the full exercise of all substantive rights granted to Buyer hereunder; and (vi)
to the knowledge of Seller, there is no unauthorized use, disclosure,
infringement or misappropriation of any Seller Licensed Assets by any third
party;
(b) this Agreement is binding on, and enforceable against, Seller in
accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditor's rights and by rules of law
governing specific performance, injunctive relief or other equitable remedies;
(c) compliance with this Agreement by Seller shall not conflict with
or result in the breach of any agreement to which Seller is a party or to which
Seller is otherwise bound; and
(d) with respect to any of the Seller Licensed Assets which are
delivered to Buyer, those Seller Licensed Assets will conform to their
respective specifications and be free of defects in workmanship and materials
and, through delivery by Seller, will be free of any viruses and methods for
disrupting the normal operation of or gaining access to Buyer's computing
resources.
5.3 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH ABOVE AND EXCEPT FOR EACH
PARTY'S RESPECTIVE REPRESENTATIONS AND WARRANTIES UNDER THAT CERTAIN ASSET
PURCHASE AGREEMENT DATED MAY 28, 2003 (AND
5
RELATED ACQUISITION DOCUMENTS), THE BUYER LICENSED ASSETS, THE SELLER LICENSED
ASSETS AND ANY RELATED INFORMATION PROVIDED BY EITHER PARTY TO THE OTHER PARTY
UNDER THIS AGREEMENT ARE PROVIDED "AS IS", AND NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE BUYER LICENSED ASSETS, THE SELLER LICENSED ASSETS
AND ANY RELATED INFORMATION PROVIDED UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NONINFRINGEMENT OF THIRD PARTY RIGHTS. ALL SUCH WARRANTIES ARE HEREBY
EXPRESSLY DISCLAIMED.
5.4 LIMITATION OF LIABILITY. EXCLUDING DAMAGES ARISING OUT OF ANY CLAIM
THAT ONE PARTY HAS MISAPPROPRIATED THE OTHER PARTY'S INTELLECTUAL PROPERTY OR
CONFIDENTIAL INFORMATION HEREUNDER: (i) IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, EXEMPLARY, PUNITIVE, INCIDENTAL,
INDIRECT OR SPECIAL DAMAGES OR COSTS HOWSOEVER ARISING OUT OF OR RELATED TO THIS
AGREEMENT, UNDER ANY THEORY OF LIABILITY, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR COSTS; AND (ii) IN NO EVENT SHALL
EITHER PARTY'S MAXIMUM AGGREGATE LIABILITY TO THE OTHER PARTY UNDER THIS
AGREEMENT EXCEED $1.5 MILLION.
6. TERM; TERMINATION
6.1 TERM. The term of this Agreement shall continue unless terminated
pursuant to Section 6.2.
6.2 TERMINATION. The Agreement may be terminated by either party upon
thirty (30) days prior written notice for any material default or breach of any
of the material terms and conditions of this Agreement by the other party,
unless the defaulting party has cured such failure or default within such 30-day
period.
6.3 BANKRUPTCY.
(a) Buyer acknowledges that the Buyer Licensed Assets constitute
"intellectual property" to the extent provided under the United States
Bankruptcy Code (the "BANKRUPTCY CODE"), and if Buyer is subject to a proceeding
under the Bankruptcy Code and rejects this Agreement, Seller may elect to retain
its rights to the Buyer Licensed Assets under this Agreement as provided under
Section 365(n) of the Bankruptcy Code.
(b) Seller acknowledges that the Seller Licensed Assets constitute
"intellectual property" to the extent provided under the Bankruptcy Code, and if
Seller is subject to a proceeding under the Bankruptcy Code and rejects this
Agreement, Buyer may elect to retain its rights to the Seller Licensed Assets
under this Agreement as provided under Section 365(n) of the Bankruptcy Code.
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6.4 EFFECT OF TERMINATION. Upon termination of this Agreement for any
reason, the parties' respective rights and obligations under this Agreement
shall terminate and be of no force and effect except that, the following
provisions shall survive any termination of this Agreement and remain in full
force and effect: Sections 2.4, 4, 5.3, 5.4, 6.3, 6.4 and 7 and any other
provisions that by their terms should survive any such termination of this
Agreement.
7. GENERAL PROVISIONS
7.1 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the addresses specified on the first page of this Agreement, or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 7.1.
7.2 FORCE MAJEURE. No party shall be held liable or responsible to any
other party nor be deemed to have defaulted under or breached this Agreement for
failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotion, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority;
provided, however, that the party so affected shall promptly notify the other
party of the force majeure event and use reasonable commercial efforts to avoid
or remove such causes of non-performance, and shall continue performance
hereunder with reasonable dispatch whenever such causes are removed.
7.3 NO ASSIGNMENT. Neither party (the "Assigning Party") shall assign or
transfer this Agreement, in whole or in part, without the prior written consent
of the other party (the "Non-Assigning Party") except that this Agreement may be
assigned or transferred by the Assigning Party to an acquirer of all, or
substantially all, of the Assigning Party's assets, business or stock (which in
the case of Buyer, means all, or substantially all, of Buyer's assets, business
or stock or all, or substantially all, of the Acquired Assets ) (in each case,
an "Acquirer"). However, notwithstanding the foregoing, without the
Non-Assigning Party's consent: (i) Seller may not assign or transfer this
Agreement to any Acquirer where such Acquirer could reasonably be deemed to be a
competitor of Buyer; and (ii) Buyer may not assign or transfer this Agreement to
any of the entities listed on Exhibit C ("Seller Competitors"). Seller may
replace any of the entities identified on Exhibit C with any other entities
("Replacement Entities"), provided, however, that Seller may only exercise such
right during the 30-day period immediately following each annual anniversary of
the Closing Date, and only if each of such Replacement Entities could reasonably
be deemed to be a competitor of Seller. Any attempted assignment of rights,
duties, or obligations hereunder, except in accordance with this Agreement,
shall be null and void. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties and their permitted
successors and assigns. At any time during the term hereof, if Buyer wishes to
assign or transfer this Agreement to a Seller Competitor or in any other
transaction which requires Seller's consent hereunder, the parties shall use
commercially reasonable efforts to co-operate and identify, as much as
reasonably practical, the parts of the Software and Related IP listed on
Schedule 1.1(d) of the APA that are
7
covered by the Seller Licensed Patents. The parties further agree that any of
the Software and Related IP that is not identified as being covered by the
Seller Licensed Patents, shall be deemed to be non-infringing as to such Seller
Licensed Patents and shall be so documented in writing between the parties.
7.4 INDEPENDENT CONTRACTORS. In performing this Agreement, each of the
parties shall operate as, and have the status of, an independent contractor.
This Agreement does not create any agency, employment, partnership, joint
venture, franchise or other similar or special relationship between the parties.
Neither party shall have the right or authority to assume or create any
obligations or to make any representations, warranties or commitments on behalf
of the other party or its affiliates, whether express or implied, or to bind the
other party or its affiliates in any respect whatsoever.
7.5 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without regard
to principles of conflicts of law thereof.
7.6 INJUNCTIVE RELIEF.
(a) Seller acknowledges and agrees that any breach of this Agreement
relating to Buyer's Intellectual Property Rights in the Acquired Assets or
Buyer's license to the Seller Licensed Assets would cause irreparable harm to
Buyer for which recovery of money damages would be inadequate. Therefore, in
addition to any and all remedies available to Buyer at law or in equity, Buyer
shall be entitled to obtain any injunctive relief to protect its rights under
this Agreement.
(b) Buyer acknowledges and agrees that any breach of this Agreement
relating to Seller's Intellectual Property Rights in the Seller Licensed Assets
or Seller's license to the Buyer Licensed Assets would cause irreparable harm to
Seller for which recovery of money damages would be inadequate. Therefore, in
addition to any and all remedies available to Seller at law or in equity, Seller
shall be entitled to obtain any injunctive relief to protect its rights under
this Agreement.
7.7 ENTIRE AGREEMENT. Together with the parties' respective rights and
obligations under the APA and the Ancillary Agreements as defined therein, this
Agreement is a complete and exclusive statement of all the terms and
representations of the agreement among the parties hereto with respect to the
subject matter hereof and supersedes any previously existing agreements which
may exist between the parties hereto with respect to the subject matter hereof.
This Agreement shall not be varied, supplemented, qualified or interpreted by
any prior course of dealing between the parties hereto or by any usage of trade.
7.8 AMENDMENT. No supplement, modification or amendment to this Agreement
shall be binding unless evidenced by a writing signed by the party against whom
it is sought to be enforced.
7.9 WAIVER. No waiver of any provision or consent to any action shall
constitute a waiver of any other provision or consent to any other action,
whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver
8
in the future except to the extent specifically set forth in writing. No waiver
shall be binding unless executed in writing by the party making the waiver.
7.10 SEVERABILITY. If any term or provision of this Agreement shall be
found to be illegal or unenforceable, then, notwithstanding such finding, this
Agreement shall remain in full force and effect and such term or provision,
shall be deemed stricken or modified as necessary; provided, however, that the
intent of this Agreement is still maintained.
7.11 HEADINGS; INTERPRETATION. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement. The parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
7.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
SIGNATURE PAGE TO LICENSE AGREEMENT FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of May __, 2003.
ASK JEEVES, INC. KANISA, INC.
By:_____________________________ By:________________________________
Name:___________________________ Name:______________________________
Title:__________________________ Title:_____________________________
SIGNATURE PAGE TO LICENSE AGREEMENT
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EXHIBIT D
MARKETING AGREEMENT
This Marketing Agreement (the "AGREEMENT") is made as of May 28, 2003
("EFFECTIVE DATE"), by and between Kanisa Inc., a Delaware corporation with
offices at 00000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("BUYER"),
and Ask Jeeves, Inc., a Delaware corporation with offices at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, XX 00000 ("SELLER").
RECITALS
WHEREAS, Solutions (as defined below) is a business that, among other
things, designs, creates, markets and sells self-service search solutions to
corporate customers;
WHEREAS, Buyer has acquired certain Solutions assets as set forth in the
Asset Purchase Agreement (as defined below); and
WHEREAS, the parties desire that Seller provide certain marketing services
in connection with the marketing of Solutions products and services.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein and in the Asset Purchase Agreement,
the parties hereby agree as follows:
1. DEFINITIONS
Defined terms not defined herein shall have the meanings ascribed to them
in the Asset Purchase Agreement.
1.1 ASSET PURCHASE AGREEMENT. "Asset Purchase Agreement" means the Asset
Purchase Agreement, dated as of the date hereof, by and between Buyer and
Seller.
1.2 LICENSE AGREEMENT. "License Agreement" means the License Agreement,
dated as of the date hereof, by and between Buyer and Seller.
1.3 LICENSED TRADEMARK. "Licensed Trademark" means U.S. Registration No.
02,412,106 for the Ask Button xxxx.
1.4 SOLUTIONS. "Solutions" shall have the meaning set forth in the Asset
Purchase Agreement.
2. PROMOTIONAL OBLIGATIONS
2.1 SEARCH RESULTS. Seller shall, free of charge, provide on xxx.xxx.xxx
editorially crafted results (the "EDITORIAL RESULTS") relating to Buyer in
response to a maximum of five knowledge-based search queries as defined mutually
by the parties ("SEARCH QUERIES") prior to the Closing Date (as defined in the
Asset Purchase Agreement). The Editorial Results shall appear on the first page
of search results presented for the Search Queries.
3. OBLIGATIONS OF SELLER
3.1 CUSTOMER REFERRAL OBLIGATIONS. Seller shall use commercially
reasonable efforts, at its own expense, to provide references about Buyer to
existing and prospective customers of Solutions products and services. Without
limiting the generality of the foregoing, Seller shall use commercially
reasonable efforts to:
(a) participate in all calls and meetings necessary to address
customer questions and concerns related to the acquisition of the business of
Solutions pursuant to the Asset Purchase Agreement and provide support and
justification for such acquisition;
(b) make available appropriate employees (including senior
executives when appropriate) to accept reference calls from Solutions existing
and prospective customers, which employees shall provide references about Buyer;
and
(c) document and promptly forward all prospect phone calls and
prospect contact data regarding Solutions or enterprise search to Buyer.
3.2 TOLL FREE NUMBER AND ELECTRONIC SOURCE FILES FOR THE
XXXXXXXXXXXXXXX.XXX WEB SITE. Seller will list the phone number (000) 000-0000
on the xxxxxxxxxxxxxxx.xxx web site during the period set forth in Section
3.6(a), after which xxxx Xxxxxx can no longer advertise the number, provided
that such number may remain active.
3.3 OTHER REFERENCE OBLIGATIONS. For a period of six (6) months after the
Effective Date, Seller will make available appropriate employees (including
senior executives when appropriate) to accept reference calls from analysts and
prospective investors in Buyer.
3.4 PROSPECTIVE CUSTOMER E-MAILS AND CALLS. Seller shall use commercially
reasonable efforts (a) to forward to Buyer at an e-mail address designated by
Buyer all e-mails from prospective customers, (b) to refer to Buyer at a
telephone number designated by Buyer all telephone inquiries from prospective
customers and (c) to assist Buyer in preparation of customer mailing lists and
other sales and marketing efforts.
3.5 ACCESS TO MARKETING PERSONNEL. Seller will cooperate with Buyer to aid
in the transition and integration of Solutions to Buyer. Such activities shall
include but not be limited to corporate communications, understanding historical
marketing efforts, and other activities reasonably specified by Buyer.
3.6 WEB SITES.
(a) In a manner consistent with past practices, Seller will maintain
operations of the Solutions web site on behalf of Buyer for one hundred eighty
(180) days or, at the option of Buyer, less after the Effective Date. During
such time, Seller shall ensure that said web site contains a link to the
parties' mutually agreed upon press release in an area of the web site as
specified by Buyer.
(b) Seller shall redirect domain name traffic from
xxxxxxxxxxxxxxx.xxx to the appropriate Uniform Resource Locator ("URL") as
designated by Buyer after such URL is
2
established. If Buyer desires to change the URL to which traffic is redirected,
Buyer shall notify Seller in writing of the new URL and Seller shall change the
destination of redirected traffic to such new URL as soon as reasonably
practicable and not later than five (5) days after receipt of such request.
(c) On Seller's corporate web site with a URL of
xxx.xxxxxxxxxxxx.xxx, Seller will feature a link to the press release issued by
Seller upon the announcement of Buyer's acquisition of the Solutions business.
In addition, Seller shall provide links from all appropriate references to
Solutions found on all Seller web sites and properties existing as of May 22,
2003 to the Solutions web site.
3.7 NON-DISPARAGEMENT. Neither party shall make any statement or act in
any manner that disparages the other party's good name or reputation or
otherwise portrays the other party's products or services (including without
limitation Solutions products and services) in a negative light.
3.8 JEEVES SOLUTIONS BRAND. Seller shall permit existing customers of
Solutions to continue to display the Jeeves Solutions brands on their web site
for the longer of (i) a commercially reasonable period of time in order to
effect a reasonable transition of Solutions to Buyer or (ii) as otherwise
permitted in any customer agreement between Seller and any such existing
customers of Solutions.
4. TRADEMARK LICENSE
4.1 Effective as of the Closing Date, subject to the terms and conditions
of this Agreement, Seller hereby grants to Buyer a non-exclusive,
non-transferable (except as set forth in Section 9), non-sublicensable,
non-royalty bearing, fully paid license ("TRADEMARK LICENSE") for a period of
one (1) year from the Closing Date, to use the Licensed Trademark in connection
with the marketing and sale of Licensed Products (as defined in the License
Agreement) solely in the Buyer's Business (as defined in the License Agreement).
4.2 The Trademark License shall be subject to the following:
(a) All goodwill associated with, or that arises from, Buyer's use
of the Licensed Trademark shall inure to the sole benefit of Seller;
(b) Buyer shall not use the Licensed Trademark in a manner that
would be disparaging to, or that would otherwise harm the goodwill associated
with, the Licensed Trademark, or in any manner which implies or indicates a
partnership or other relationship between the parties other than the parties'
relationship as contemplated under the Asset Purchase Agreement and this
Marketing Agreement and the License Agreement;
(c) Buyer shall not use, apply to register, or own any trade name,
trademark, domain names or trade dress which incorporates, or is likely to be
confused with, or would tend to dilute, the Licensed Trademark;
3
(d) Buyer shall include such trademark markings, such as TM or (R),
in close proximity to the Licensed Trademark as are reasonably requested by
Seller and are legally permitted; and
(e) Buyer shall include a statement in proximity to the Licensed
Trademark which indicates that such Licensed Trademark is under license from
Seller.
5. DISCLAIMER OF WARRANTIES. THE LICENSED TRADEMARK IS PROVIDED "AS IS" WITHOUT
ANY WARRANTY OF ANY KIND, AND EXCEPT FOR REPRESENTATIONS AND WARRANTIES
EXPRESSLY MADE BY SELLER AND BUYER IN THE ASSET PURCHASE AGREEMENT, NEITHER
SELLER NOR BUYER MAKES ANY REPRESENTATION OR WARRANTY REGARDING THE SOLUTIONS OR
SOLUTIONS PRODUCTS OR SERVICES OR LICENSED TRADEMARK, AND EACH PARTY HEREBY
DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR
NONINFRINGEMENT.
6. TERM AND TERMINATION
6.1 TERM. This Agreement will commence in force on the Effective Date and
will, unless sooner terminated under this Section 6, continue for a term of one
year, at which time this Agreement shall terminate unless extended by the mutual
agreement in writing of the parties.
6.2 TERMINATION. This Agreement may be terminated for material breach of
any provision of this Agreement by either party, provided that written notice of
the breach has been given to the breaching party and the breaching party has not
cured the breach within 30 days after delivery of the notice. The provisions of
Sections 1, 7, 8 and 9 will survive expiration or termination of this Agreement;
all other rights and obligations of the parties shall cease upon expiration or
termination of this Agreement.
7. CONFIDENTIAL INFORMATION. The confidentiality provisions of the Asset
Purchase Agreement are hereby incorporated herein in full by this reference and
will govern all transactions hereunder.
8. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY'S TOTAL CUMULATIVE
LIABILITY IN CONNECTION WITH THIS AGREEMENT, WHETHER UNDER THEORY OF TORT,
CONTRACT, NEGLIGENCE, STRICT LIABILITY, BREACH OF WARRANTY, OR OTHERWISE EXCEED
SEVENTY-FIVE THOUSAND DOLLARS ($75,000). NEITHER PARTY WILL BE LIABLE FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF THIS
AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.
9. MISCELLANEOUS. If any portion of this Agreement is held to be unenforceable,
the remainder of this Agreement will remain valid. This Agreement may not be
assigned by Seller without Buyer's prior written consent. Buyer may assign this
Agreement without Seller' consent to any entity that acquires all or
substantially all of Buyer's assets, stocks, business or assets,
4
whether by merger, acquisition, asset purchase or otherwise; provided, however,
that Buyer shall not have the right, without the prior written consent of
Seller, to assign or transfer this Agreement to any such acquirer where such
acquirer could reasonably be deemed to be a direct competitor of Seller. Subject
to the foregoing, this Agreement will inure to the benefit of the parties'
successors and assigns. The relationship of Buyer and Seller established by this
Agreement is that of independent contractors, and Buyer and Seller are not in a
joint venture, partnership or franchisor/franchisee relationship. All notices
must be either sent registered or certified mail, return receipt requested, or
served personally to the applicable address set forth above. This Agreement will
be governed by the laws of the State of California without regard to its
conflicts of laws provisions. The terms and conditions of this Agreement
constitute the entire Agreement between the parties and supersede all previous
agreements, whether oral or written, between the parties with respect to the
subject matter hereof. Each party represents that all corporate action necessary
for the authorization, execution and delivery of this Agreement by such party
and the performance of its obligations hereunder has been taken. No amendment or
waiver of this Agreement will be binding unless it has been assented to in
writing by both parties. This Agreement may be executed in counterparts, which,
taken together, shall be regarded as one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the Effective Date.
KANISA INC. ASK JEEVES, INC.
By: By:
------------------------- ----------------------------
Title: Title:
------------------------- ----------------------------
Date: Date:
------------------------- ----------------------------
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EXHIBIT E
BACK TO BACK AGREEMENT
This Agreement ("AGREEMENT") is entered into as of ___________ by and
between Ask Jeeves, Inc., a Delaware corporation ("ASK JEEVES") and Kanisa Inc.,
a Delaware corporation ("KANISA").
WHEREAS, Ask Jeeves and Kanisa are parties to that certain Asset Purchase
Agreement dated as of May __, 2003 (the "ASSET PURCHASE AGREEMENT").
WHEREAS, Customer (as defined below) has not consented to the assignment
of the Customer Agreement (as defined below) by Ask Jeeves to Kanisa.
WHEREAS, Kanisa and Ask Jeeves have agreed that Kanisa shall perform all
of the obligations of Ask Jeeves, and shall be entitled to receive all of the
customer payments, under that certain ________ Agreement, by and between Ask
Jeeves and _________ (the "CUSTOMER"), dated as of ___________ (the "CUSTOMER
AGREEMENT").
THEREFORE, AND IN CONSIDERATION OF the premises and mutual agreements
herein, Ask Jeeves and Kanisa agree as follows:
1. SERVICES.
1.1 SERVICES TO BE PROVIDED. Kanisa shall timely and fully perform the
services and other obligations of Ask Jeeves (the "SERVICES") under the Customer
Agreement attached hereto as Exhibit A and incorporated herein by this
reference. Kanisa agrees that it will comply with all of the provisions,
obligations and restrictions in the Customer Agreement, including, without
limitation, the confidentiality provisions thereof. Notwithstanding the
foregoing, the parties hereto agree and acknowledge that until such time as the
Customer Agreement is assigned to Kanisa, Ask Jeeves shall continue to invoice
and receive amounts due under the Customer Agreement from the Customer, and
shall pay any such received amounts to Kanisa in accordance with Section 2
hereof.
1.2 COMPLIANCE WITH LAWS. Kanisa shall comply with all applicable federal,
state and local laws and regulations in connection with its performance of the
Services.
1.3 CUSTOMER COMMUNICATIONS. Each of the parties hereto shall coordinate
with the other with respect to communications with the Customer, other than
invoicing, in connection with the provision of the Services by Kanisa.
2. PAYMENT TERMS. Kanisa shall be entitled to all payments made by the Customer
after the date hereof under the Customer Agreement in connection with the
performance of the Services. Ask Jeeves shall pay Kanisa such amounts within
thirty (30) days of receipt of payment from the Customer.
3. INDEMNITIES.
3.1 Kanisa shall indemnify, defend and hold harmless Ask Jeeves and its
directors, employees, affiliates and agents, from and against any third party
claims, demands, loss, damage or expense (including attorney's fees) incurred by
Ask Jeeves relating to a beach of this Agreement by Kanisa.
3.2 Ask Jeeves shall indemnify, defend and hold harmless Kanisa and its
directors, employees, affiliates and agents, from and against any third party
claims, demands, loss, damage or expense (including attorney's fees) incurred by
Kanisa relating to or caused by a beach of this Agreement by Ask Jeeves.
4. GENERAL TERMS AND CONDITIONS.
4.1 NOTICES. All notices, consents, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given (a)
when delivered by hand (with written confirmation of receipt), (b) when sent by
facsimile transmission (with written confirmation of receipt), provided it is
sent prior to 5:00 p.m., California time, on a business day and otherwise on the
next business day, and provided further that a copy is mailed by a nationally
recognized overnight delivery service (e.g. FedEx) or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service, in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
if to Kanisa:
Kanisa Inc.
00000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
if to Ask Jeeves:
Ask Jeeves, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
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with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
4.2 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of California. With respect to any
litigation arising out of or relating to this Agreement, each party agrees that
it shall be heard by the state or federal courts with jurisdiction to hear such
suits located in Santa Xxxxx County, California, and each party irrevocably
consents to jurisdiction and venue in such courts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ASK JEEVES, INC. KANISA INC.
By By
------------------------------ ------------------------------
Name Name
----------------------------- -----------------------------
Title Title
---------------------------- ----------------------------
Date Date
----------------------------- -----------------------------
3
EXHIBIT F
PROMISSORY NOTE
Up to U.S. $750,000 Dated: _____, 2003
1. Principal.
For value received, the undersigned, Kanisa Inc., a Delaware
corporation ("Maker"), hereby promises to pay to Ask Jeeves, Inc., a Delaware
corporation ("Holder"), the aggregate principal sum of Seven Hundred Fifty
Thousand U.S. Dollars (U.S. $750,000) or such lesser amount as shall from time
to time be set forth in the column entitled "Aggregate Principal" in the grid
attached hereto as Exhibit A (the "Principal"), without interest, upon the terms
and subject to the conditions provided for in this Promissory Note (this
"Note"). The Principal Amount shall be adjusted from time to time in accordance
with the provisions of Sections 2.4 and 13.5 of the Asset Purchase Agreement,
dated as of May ___, 2003 (the "Asset Purchase Agreement"), by and between Maker
and Holder. Any such adjustments shall be promptly and accurately recorded in
Exhibit A.
2. Payments.
(a) Maturity. Subject to the provisions of Sections 2.3 and 13.5
of the Asset Purchase Agreement and except to the extent prepaid pursuant to
Section 4, the Principal shall be due and payable in full in cash on the earlier
of (i) one year anniversary of the date of this Note and (ii) the sale by Maker
of the business of Solutions (as defined in the Asset Purchase Agreement) or all
or substantially all of the Purchased Assets (as defined in the Asset Purchase
Agreement) to a third party, the sale by Maker of all or substantially all of
its assets, or the merger or consolidation of Maker in which the stockholders of
Maker immediately prior to such merger or consolidation own less than a majority
of the outstanding voting power of the surviving entity immediately after such
merger or consolidation (the "Maturity Date").
(b) Payment Date. All payments under this Note shall be made on
the respective day designated or, if not a business day, the first business day
thereafter. As used herein, "business day" means a day other than a Saturday,
Sunday or a day on which banks are authorized to close in San Francisco,
California.
(c) Default. Upon an occurrence of an Event of Default, the
Principal Amount shall be immediately due and payable in cash and Holder may
exercise any or all of the Holders' rights and remedies available to the Holder
under applicable law.
3. Manner of Payment.
Any payment under this Note shall be payable to Holder in lawful
currency of the United States of America by wire transfer to an account
designated in writing by Holder not less than two business days prior to the
scheduled date of such payment.
4. Prepayment.
At any time or from time to time Maker may prepay all or any portion
of the principal amount of this Note, without penalty or premium, with prior
written notice to Holder. Any prepayment permitted pursuant to this Note shall
be made as provided in Section 3. Promptly after any prepayment of this Note as
set forth above, Holder shall surrender this Note to Maker for cancellation (or
appropriate notation on, or replacement of, the Note in the case of a partial
prepayment), or, if not surrendered, such notation shall be made in the books
and records of Maker and be binding upon Holder. In the event that this Note is
prepaid and, within one year after the Closing Date (as defined in the Asset
Purchase Agreement), Holder delivers a Customer Consent (as defined in the Asset
Purchase Agreement) to Maker in accordance with the provisions of Section 2.4 of
the Asset Purchase Agreement, then Maker shall pay to Holder in cash the
applicable amount set forth in Section 2.4 of the Asset Purchase Agreement. The
preceding sentence shall survive any cancellation of this Note.
5. Events of Default. The occurrence of any of the following shall be
deemed to be an event of default (an "Event of Default") hereunder:
(a) Maker (i) filing any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future bankruptcy, insolvency or similar
statute, law or regulation (a "Filing"), (ii) filing any answer admitting or not
contesting the material allegations of a petition filed against Maker in any
such proceeding, (iii) seeking, consenting to or acquiescing in the appointment
of any trustee, custodian, receiver or liquidator of Maker or all or any
substantial part of its properties (an "Appointment") or (iv) taking any action
for the purpose of any of the foregoing;
(b) a Filing is made against Maker without its consent and is not
stayed or dismissed within 90 days, or an order for an Appointment is entered;
(c) Maker states in writing that it is insolvent or otherwise
unable to pay its debts when due;
(d) Maker defaults on the repayment of any principal or interest
on any debt, loan or credit arrangements in excess of $100,000 in the aggregate
to which Maker is a party; or
(e) Maker does not make any payment hereunder when due.
6. Notices.
All notices, consents, waivers and other communications under this
Note must be in writing and will be deemed to have been duly given (a) when
delivered by hand (with written confirmation of receipt), (b) when sent by
facsimile transmission (with written confirmation of receipt), provided it is
sent prior to 5:00 p.m., California time, on a business day and otherwise on the
next business day, and provided further that a copy is mailed by a nationally
recognized overnight delivery service (e.g., Federal Express) or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery
service, in each case to the appropriate addresses and
2
facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):
(a) If to Maker:
Kanisa Inc.
00000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) If to Holder:
Ask Jeeves, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, General Counsel
Facsimile: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
7. Collection Costs; Waivers.
If any default occurs in any payment due under this Note, Maker
promises to pay all reasonable costs and expenses, including reasonable
attorneys' fees and costs, incurred by Holder hereof to enforce this Note or in
otherwise collecting or attempting to collect the indebtedness under this Note
and hereby waives the right to plead any and all statutes of limitation as a
defense to a demand hereunder to the full extent permitted by applicable law.
None of the provisions hereof and none of Holder's rights or remedies hereunder
on account of any past or future defaults shall be deemed to have been waived by
Holder's acceptance of any past due payment or by any indulgence granted by
Holder to Maker. Maker hereby waives presentment, demand, protest and notice
thereof or of dishonor, and agrees that this Note is full recourse and that,
accordingly, it shall remain liable
3
for all amounts due hereunder notwithstanding any extension of time or change in
the terms of payment of this Note granted by Holder hereof or any delay or
failure by Holder hereof to exercise any rights under this Note.
8. Headings.
Headings used in this Note are inserted for convenience only and
shall not be deemed to constitute a part hereof.
9. Governing Law.
THIS NOTE IS AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.
10. Amendments.
This Note may not be modified or changed except by written
instrument signed by each of the parties hereto which expressly states the
intention of the parties to modify or change this Note.
11. Waiver of Jury Trial.
MAKER AND HOLDER EACH WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION ARISING OUT OF THIS NOTE. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Note, including, without
limitation, contract claims, tort claims and all other common law and statutory
claims. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing, and this waiver shall apply to any subsequent amendments,
supplements or other modifications to this Note or to any other document or
agreement relating to the transactions contemplated by this Note.
12. Negotiation of Note.
EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED
BY INDEPENDENT COUNSEL OF ITS CHOICE, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT COUNSEL OF ITS OWN CHOOSING, AND THAT TO THE EXTENT,
IF ANY, THAT IT DESIRED, EACH PARTY HERETO AVAILED ITSELF OF THIS RIGHT AND
OPPORTUNITY THROUGHOUT ALL NEGOTIATIONS THAT HAVE PRECEDED THE EXECUTION OF THIS
NOTE, AND THAT IT HAS EXECUTED THE SAME WITH THE CONSENT AND UPON THE ADVICE OF
SAID INDEPENDENT COUNSEL. EACH PARTY HERETO AND ITS COUNSEL COOPERATED IN THE
DRAFTING AND PREPARATION OF THIS NOTE AND THE DOCUMENTS REFERRED TO HEREIN, AND
ANY AND ALL DRAFTS RELATING THERETO SHALL BE DEEMED THE WORK PRODUCT OF THE
PARTIES AND MAY NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF ITS PREPARATION.
ACCORDINGLY, ANY RULE OF LAW, OR ANY LEGAL DECISION THAT WOULD REQUIRE
INTERPRETATION OF ANY AMBIGUITIES IN THIS NOTE AGAINST THE PARTY THAT DRAFTED
IT, IS OF NO APPLICATION AND IS HEREBY EXPRESSLY WAIVED. THE PROVISIONS OF THIS
NOTE SHALL BE INTERPRETED IN A REASONABLE MANNER TO EFFECT THE INTENTIONS OF THE
PARTIES AND THIS NOTE.
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(Signature page follows)
5
IN WITNESS WHEREOF, this Promissory Note has been duly executed as
of the first date set forth above.
KANISA INC.
By:
---------------------------------
Authorized Signatory
Acknowledged and Agreed to:
ASK JEEVES, INC.
By:
---------------------------------
Authorized Signatory
EXHIBIT A
Date Amount Aggregate Principal
---- ------ -------------------
_____, 2003 $[750,000 less Purchase Price $[750,000 less Purchase Price
Adjustment] Adjustment]
