Exhibit 10.17
ASSET PURCHASE AGREEMENT
by and between
BRAINSTORM INTERACTIVE, INC.
and
OPUS360 CORPORATION
and
XXXXX XXXXXX AND XXX XXXXXX
(as to Article V, Section 7.1, Section 7.2, Section 7.3,
Section 7.5, Section 7.6 and Section 7.8 only)
Dated as of January 12, 2000
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of January 12,
2000, by and among Brainstorm Interactive, Inc., a Delaware corporation
("Seller"), Opus 360 Corporation, a Delaware corporation ("Buyer") and Xxxxx
Xxxxxx and Xxx Xxxxxx (each a "Stockholder" and collectively, the
"Stockholders") as to Article V, Section 7.1, Section 7.2, Section 7.3, Section
7.5, Section 7.6 and Section 7.8 only.
W I T N E S S E T H
WHEREAS, Seller operates a vertical portal under the Uniform Resource
Locator "XxxxxxxxXxxxxx.xxx" which includes a graphical user interface and
proprietary software that assists young professionals to develop skills, make
contacts and learn about the latest developments across a wide range of
industries (the "Business");
WHEREAS, Seller holds all of the right, title and interest in and to or
has the right to license the assets and rights both tangible and intangible
currently existing which collectively constitute the Business;
WHEREAS, pursuant to the terms and subject to the conditions set forth in
this Agreement, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, substantially all of the assets and rights of the Business (other
than those specifically excluded as described in this Agreement); and
WHEREAS, the Stockholders collectively own 69% of the issued and
outstanding capital stock of Seller.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth and the schedules, certificates, exhibits and documents attached
hereto or referenced herein, and intending to be legally bound hereby, the
parties hereby agree as follows:
I.
1.
ARTICLE DEFINITIONS ARTICLE
DEFINITIONS
I.
II.
For the purposes of this Agreement, the following terms shall have the
following respective meanings:
III.
"Acquired Assets" has the meaning set forth in Section 2.1(b) hereof.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations promulgated under the Securities Exchange Act of 1934, as
amended.
"Agreement" has the meaning set forth in the preamble hereof.
"Allocation" has the meaning set forth in Section 7.1 hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.2 hereof.
"Best Efforts" means the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; provided, however, that an obligation
to use such Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions (i) that would result in a materially
adverse change in the benefits to such Person under this Agreement and the
Related Agreements and the transactions contemplated hereby and thereby or (ii)
that would require a substantial expenditure which was disproportionate to the
benefit to be obtained.
"Xxxx of Sale" means the duly executed xxxx of sale and assignment and
assumption agreement, by and between Seller and Buyer, that each shall deliver
effecting the sale, assignment, transfer, conveyance and delivery of the
Acquired Assets.
"Business" has the meaning set forth in the preamble hereof.
"Buyer" has the meaning set forth in the preamble hereof.
"Buyer Indemnified Parties" has the meaning set forth in Section 9.2
hereof.
"Cash Consideration" has the meaning set forth in Section 2.4 hereof.
2
"Closing" means the closing of the transactions contemplated by this
Agreement set forth in Section 2.5 hereof.
"Closing Date" has the meaning set forth in Section 2.5 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Business" has the meaning set forth in Section 7.2 hereof.
"Confidentiality Agreement" has the meaning set forth in Section 7.3
hereof.
"Contracts" has the meaning set forth in Section 2.1(b)(i) hereof.
"Co-President's Certificate" has the meaning set forth in Section 2.6(c)
hereof.
"DGCL" means the Delaware General Corporation Law, as amended.
"Domain Names" include the Uniform Resource Locators "XxxxxxxxXxxxxx.xxx",
"XxxxxxXxx.xxx" and "XxXxxXxx.xxx".
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" has the meaning set forth in Section 2.1(d) hereof.
"Excluded Liabilities" has the meaning set forth in Section 2.3 hereof.
"Globix Agreements" means (i) the Co-Location Service Agreement executed
on June 10, 1999, by and between Globix Corporation and Seller and (ii) the
Master Rental Agreement executed on June 17, 1999, by and between Globix
Corporation and Seller.
"Governmental Entity" has the meaning set forth in Section 4.3 hereof.
"Indemnified Party" has the meaning set forth in Section 9.5 hereof.
"Indemnifying Party" has the meaning set forth in Section 9.5 hereof.
3
"Intellectual Property" has the meaning set forth in Section 2.1(b)(vii)
hereof.
"Legal Requirement" means all applicable laws, statutes, ordinances,
judgments, orders, rules, regulations or requirements.
"Lien" means any mortgage, pledge, hypothecation, assignment for security
purposes, deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including without
limitation any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Losses" has the meaning set forth in Section 9.2 hereof.
"Member Networks" has the meaning set forth in Section 2.1(b)(v) hereof.
"Member Profiles" has the meaning set forth in Section 2.1(b)(ii) hereof.
"Permits" has the meaning set forth in Section 2.1(b)(x) hereof.
"Person" means and includes any natural person, firm, individual,
partnership, joint venture, company, limited liability company, corporation,
business trust, trust, association, unincorporated organization or a
Governmental Entity.
"Plan" means each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance or termination pay, hospitalization or
other medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to or required to be contributed to by
either Seller or any ERISA Affiliate for the benefit of any employee or
terminated employee of either Seller or any ERISA Affiliate, whether formal or
informal.
"Promissory Note" has the meaning set forth in Section 2.4 hereof.
"Proprietary Software" has the meaning set forth in Section 2.1(b)(iv)
hereof.
"Purchase Price" has the meaning set forth in Section 2.4 hereof.
4
"Records" has the meaning set forth in Section 3.1(b) hereof.
"Related Agreements" means the Xxxx of Sale and the following duly
executed, and where appropriate, notarized, good and sufficient agreements and
instruments required to be executed or delivered pursuant to this Agreement (i)
the Sublease Agreement, (ii) the Instrument of Domain Names Assignment, dated as
of the date hereof, by and between Buyer and Seller, (iii) the Trademarks
Assignment, dated as of the date hereof, by and between Buyer and Seller, (iv)
the Network Solutions, Inc. Registrant Name Change Agreements, dated as of the
date hereof, executed by Seller and acknowledged by Buyer, (v) each of the
Contracts assignments executed by Seller and acknowledged by the other party to
the contract and (vi) the Website Terms of Service Assignment.
"Restraints" has the meaning set forth in Section 8.1(b) hereof.
"Seller" has the meaning set forth in the preamble hereof.
"Seller Disclosure Schedule" means the disclosure schedule delivered by
Seller to Buyer at the Closing.
"Seller Indemnified Parties" has the meaning set forth in Section 9.3
hereof.
"Stockholder" has the meaning set forth in the preamble hereof.
"Stockholder Approval" has the meaning set forth in Section 2.6(c) hereof.
"Sublease Agreement" means the Sublease and Assumption Agreement, dated as
of the date hereof, by and between Buyer and Seller.
"Subsidiary" means with respect to any Person, any corporation or other
legal entity of which such Person owns, directly or indirectly, more than 50% of
the outstanding stock or other equity interests, the holders of which are
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
"Survival Period" has the meaning set forth in Section 9.1 hereof.
"Taxes" means all taxes, levies or other like assessments, charges or fees
(including estimated taxes, charges and fees), including, without limitation,
income,
5
corporation, advance corporation, gross receipts, transfer, excise, property,
sales, use, value-added, license, payroll, pay as you earn, withholding, social
security and franchise or other governmental taxes or charges, including customs
duties, fees, penalties or charges, imposed by the United States or any state,
county, local or foreign government or subdivision or agency thereof; and such
term shall include any interest, penalties or additions to tax attributable to
such taxes.
"Tax Return" has the meaning set forth in Section 4.10 hereof.
"Trademarks" include "IndustryInsite", "JobFlash" and "BranchOut".
"Transitional Services Period" has the meaning set forth in Section 7.5
hereof.
"Website Terms of Service Assignment" means the Website Terms of Service
Assignment, dated as of the date hereof, by and between Buyer and Seller.
1 ARTICLE
PURCHASE AND SALE OF ACQUIRED ASSETS
1.1 SECTION Purchase and Sale .
(a) Assets. In reliance on the representations, warranties, covenants and
agreements set forth in this Agreement and subject to paragraphs (d) and (e) of
this Section 2.1 and to the other terms and conditions of this Agreement and the
Related Agreements, Seller shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase, acquire and accept from Seller, in each case
free and clear of all Liens, all of Seller's right, title and interest in and to
all of the Acquired Assets.
(b)
(c) Subject to Section 2.1(d), the term "Acquired Assets" means all of Sellers
right, title and interest in and to all of the properties, contracts, rights and
other assets (of every kind, nature, character and description, whether tangible
or intangible, whether accrued, contingent or otherwise, wherever situated and
currently existing) that are exclusively related to the Business as described in
this Section 2.1(b) and as set forth on each of the Seller Disclosure Schedules
that collectively constitute Schedule 2.1(b) of the Seller Disclosure Schedule:
6
(d)
(i) all rights and incidents of ownership of Seller in, to and under the
contracts, agreements, arrangements (whether set forth in a written instrument
or pursuant to an oral understanding), licenses and sublicenses exclusively
related to the Intellectual Property and the Business (collectively, the
"Contracts") set forth on Schedule 2.1(b)(i) of the Seller Disclosure Schedule;
(ii)
(iii) all member profiles of persons who have registered to become members of
XxxxxxxxXxxxxx.xxx (providing information that may include e-mail address, name,
primary industry, primary job function, years of working experience and metro
area, current company, past companies, titles, employment dates, job
responsibilities, college name and year of graduation, program of study and
personal interests) (collectively, the "Member Profiles"), subject to any
privacy policy posted on XxxxxxxxXxxxxx.xxx at the time such Member Profile was
first collected by Seller or the privacy rights, if any, of such registered
member under current applicable law;
(iv)
(v) the graphical user interface of the pages contained at the Uniform Resource
Locator "XxxxxxxxXxxxxx.xxx";
(vi)
(vii) all proprietary software used in the functioning of the XxxxxxxxXxxxxx.xxx
Website owned by Seller (including software that enables the member search tools
feature, common-bond mapping feature, private e-mailing feature, members online
feature, mentorship services feature, contact lists feature, e-mail newsletters
feature, member newsletters feature, data e-mails feature, personalized,
industry specific news feature, career research feature, job placement services
feature and administrative tools feature) (collectively, the "Proprietary
Software") including the Proprietary Software set forth on Schedule 2.1(b)(iv)
of the Seller Disclosure Schedule;
(viii)
(ix) member networks (including networks based on industries, job functions,
current and past companies, colleges, graduate schools, high schools,
fraternities/sororities and military experience) (collectively, the "Member
Networks");
(x)
(xi) all prepaid expenses relating exclusively to the Business;
(xii)
(xiii) any and all of the following and all statutory and/or common law rights
throughout the world in, arising out of, or associated therewith: (a) set forth
on Schedule 2.1(b)(vii)(a) of the Seller Disclosure Schedule is a list of all
patents and applications therefor, including docketed patent disclosures
awaiting filing, reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (b) all inventions (whether
patentable or not), inventions disclosures and improvements, all trade secrets,
confidential business information (including ideas, research and development,
know how, compositions, designs, specifications, pricing and cost information
and business and market plans and proposals), proprietary information,
manufacturing, engineering and technical drawings and specifications, processes,
designs and technology; (c) all works of authorship, "moral rights", copyrights
(including derivative works thereof), mask works, copyright and mask work
registrations and applications therefor; (d) all trade names, trade dress,
logos, product names, collective marks, collective membership marks, trademarks
certification marks and service marks, trademark and service xxxx registrations
and applications together with the good will of the business symbolized by the
names and the marks (including the "Trademarks"); (e) all rights to use computer
software including all source code (including custom, hard copy and soft copy,
as well as all data and related documents, object code, databases, passwords,
encryption technology, firmware, development tools, files, records and data, and
all media on which any of the foregoing is recorded; (f) all e-mail, Uniform
Resource Locators, World Wide Website addresses and Domain Names related to the
business; (g) any similar, corresponding or equivalent rights to any of the
foregoing; (h) all documentation related to any of the foregoing; and (i) all
goodwill associated with any of the foregoing ((a) through (g) above,
collectively, the "Intellectual Property"), in each case, owned, used or
licensed by Seller that are exclusively related to the Business, including the
Intellectual Property set forth on Schedule 2.1(b)(vii) of the Seller Disclosure
Schedule;
(xiv)
(xv) all works in progress relating to Intellectual Property in development, in
each case, owned, used or licensed by Seller or being developed by or on behalf
of Seller that are exclusively related to the Business;
(xvi)
(xvii) all works in progress relating to Proprietary Software in development
owned by Seller that are exclusively related to the Business;
(xviii)
(xix) all of Seller's permits, licenses, approvals, consents and authorizations
by any Governmental Entity (collectively, "Permits"), that are primarily used or
held for use in the Business or related to the Acquired Assets;
(xx)
(xxi) subject to Section 3.1 hereof, all of Seller's books, records and other
documents and information relating exclusively to the Business or the Acquired
Assets, including all passwords, resets, encryption technology, archives, log
files, quality records, engineering designs, software agreements and software
configurations;
(xxii)
(xxiii) subject to Section 3.1 hereof, all of Seller's files, indices, market
research studies, surveys, reports, analyses, compilations, forecasts,
projections, complaint logs, presentations, Website terms and conditions of use
and privacy policies and similar information relating exclusively to the
Business or the Acquired Assets;
(xxiv)
(xxv) the goodwill of the Business in or arising from the Acquired Assets;
(xxvi)
(xxvii) all sales data, brochures, catalogues, literature, forms, mailing lists,
art work, photographs and advertising material, in whatever form or media
relating exclusively to the Business or the Acquired Assets; and
(xxviii)
(xxix) all claims, causes of action, choses in action, rights of recovery and
rights of set-off of any kind in favor of Seller and relating exclusively to,
arising exclusively out of, or resulting exclusively from the Business, the
Acquired Assets or the Assumed Liabilities; provided, however, Seller shall have
such rights as they relate exclusively to, arise exclusively out of or result
exclusively from the Excluded Assets or the Excluded Liabilities.
(xxx)
(e) Instruments of Transfer. The sale, assignment, transfer, conveyance and
delivery of the Acquired Assets shall be effected by the execution and delivery
by Seller and Buyer of the Xxxx of Sale substantially in the form attached as
Exhibit A hereto.
(f)
(i) Excluded Assets. Notwithstanding anything contained in paragraph (b) of this
Section 2.1 to the contrary, the Acquired Assets shall not include any of the
following (the "Excluded Assets"): all rights that accrue or will accrue to
Seller under this Agreement or the Related Agreements; (ii) all cash and cash
equivalents; (iii) Seller's accounting systems and non-proprietary software;
(iv) Seller's accounts receivable; (v) Seller's machinery, equipment, tooling,
furniture, fixtures, vehicles and office supplies; (vi) Seller's corporate
charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents,
taxpayer and other identification numbers, seals, minute books, stock transfer
books, blank stock certificates, and other documents relating to the
organization, maintenance and existence of Seller as a corporation; (vii)
Seller's computer hardware; (viii) all contracts and other assets set forth on
Schedule 2.1(d) of the Seller Disclosure Schedule; (ix) the intellectual
property and other assets relating exclusively to Seller's product named
"ReviewMe"; and (x) the trademark "Brainstorm Interactive".
(ii)
(g) Nonassignability. Anything contained in this Agreement or any Related
Agreement to the contrary notwithstanding, unless otherwise waived in a written
instrument by an authorized representative of Buyer neither this Agreement nor
any Related Agreement shall constitute an assignment, transfer, sublicense or
sublease of, or an agreement to assign, transfer, sublicense or sublease, any
right, title or interest in, to or under any, contract, agreement, arrangement
(whether set forth in a written instrument or pursuant to an oral
understanding), license or sublicense, or any claim or right to any benefit
arising thereunder or resulting therefrom, if an attempted assignment, transfer,
sublicense or sublease thereof, without the consent or waiver of a third party
thereto including a Governmental Entity, would constitute a breach thereof or a
violation of any Legal Requirement, or in any way adversely affect the rights of
Buyer or Seller hereunder or thereunder, unless and until such consent or waiver
has been duly obtained and delivered to Buyer or such assignment, transfer,
sublicense or sublease has otherwise become lawful.
(h)
1.2 SECTION Assumed Liabilities . In reliance on the representations,
warranties, covenants and agreements set forth in this Agreement and subject to
the terms of this Agreement, at the Closing, and concurrently with the purchase
described in Section 2.1 hereof, Buyer shall assume and be responsible for, and
hereby agrees to pay, honor, discharge or perform in due course and upon
presentment, the following liabilities and obligations of Seller in connection
with the Business (the "Assumed Liabilities"):
1.3
(a) All liabilities and obligations of Seller arising after the Closing Date
under any Contracts assigned to Buyer pursuant to Section 2.1(b)(i) that are
specifically set forth in Schedule 2.1(b)(i) of the Seller Disclosure Schedule
and not excluded by Seller on Schedule 2.1(d) of the Seller Disclosure Schedule;
(b)
(c) All liabilities and obligations of Seller after the Closing Date under the
Sublease Agreement, including the requirement to pay any Fees (as such term is
defined in the Sublease Agreement) required to be paid pursuant to the terms
of the Sublease Agreement, only for the term of the Sublease Agreement and any
extension or renewal thereof; and
(d)
(e) All liabilities and obligations relating exclusively to the Business after
the Closing Date relating exclusively to, arising exclusively out of or
resulting exclusively from the ownership, operation and management by Buyer,
subject to Section 7.5 hereof and Section 7.7 hereof, of the Business and/or the
Acquired Assets during the period after the Closing Date.
(f)
1.4 SECTION Excluded Liabilities . Notwithstanding anything in this Agreement to
the contrary, Buyer shall not assume and shall be deemed not to have assumed and
be responsible for, and Seller shall be solely and exclusively liable and
responsible for all debts, obligations, contracts or liabilities which are not
Assumed Liabilities (the "Excluded Liabilities"), including the following
illustrative examples:
1.5
(a) All liabilities and obligations incurred in connection with or related to
the Excluded Assets;
(b)
(c) All liabilities and obligations for Taxes of Seller and Seller's
Stockholders;
(d)
(e) All liabilities and obligations whatsoever to any current or former
employee, consultant, independent contractor or temporary worker, of Seller,
including without limitation, any liability or obligation that arises under any
Plan, or any other employee benefit arrangement or policy, or under applicable
law;
(f)
(g) All attorneys', accountants', brokers' or finder's fees or other costs or
expenses of Seller incurred in connection with this Agreement and any Related
Agreement or the transactions contemplated hereby or thereby;
(h)
(i) All liabilities, obligations and costs arising out of or relating to any
product liability claim, action, demand, suit or proceeding against Seller or
any of its Affiliates relating to, arising out of, or resulting from the
ownership, operation or management of, or services performed by or on behalf of
Seller relating exclusively to, arising exclusively out of, or resulting
exclusively from the Business, in each case, on or prior to the Closing Date,
whether a claim therefor is asserted before, on or after the Closing Date, and
whether or not the claim is an indemnification claim by a licensor or other
party to a contract against Buyer or its Affiliates as as-
signee of Seller under a Contract, including liabilities, obligations and costs
arising out of or relating to any misappropriation of membership information,
violation of the XxxxxxxxXxxxxx.xxx Website terms and conditions of use and
privacy policies or infringement claims relating to Intellectual Property or
Proprietary Software;
(j) All liabilities accrued on or prior to the Closing Date and current (up and
until the day after the Closing Date) liabilities and accounts payable of the
Business, in each case, even if payable after the Closing Date; and
(k)
(l) All liabilities and obligations of Seller arising on or before the Closing
Date and required to be performed on or prior to the Closing Date even if such
liabilities and obligations are payable after the Closing Date under any
Contracts (including, without limitation, all shared revenue payment obligations
of Seller accrued under any Contracts on or prior to the Closing Date even if
payable after the Closing Date).
(m)
1.6 SECTION Purchase Price . The purchase price (the "Purchase Price") for the
Acquired Assets shall consist of an aggregate of $1,000,000, as follows: (a)
$650,000 (the "Cash Consideration") payable to Seller on the Closing Date by
certified check or wire transfer in immediately available funds pursuant to
written instructions provided by an authorized representative of Seller at least
one (1) business day prior to Closing and (b) issuing, executing and delivering
to Seller on the Closing Date a promissory note in the principal amount of
$350,000 having the terms and subject to the conditions contained therein,
substantially in the form of Exhibit B hereto (the "Promissory Note").
1.7
1.8 SECTION Closing . Subject to the terms and conditions of this Agreement,
including the satisfaction or waiver of all conditions as set forth in Article
VIII the "Closing" of the purchase and sale of the Acquired Assets shall take
place at a mutually agreed upon time, date and location for the Closing;
provided that the parties may elect to have the Closing be conducted through a
facsimile exchange of documents and signature pages. The date and time of such
Closing shall be referred to herein as the "Closing Date."
1.9
1.10 SECTION Deliveries by Seller . At the Closing, Seller shall deliver or
cause to be delivered to Buyer (unless delivered previously) the following:
1.11
(a) an executed copy of this Agreement and the Related Agreements and the Seller
Disclosure Schedules;
(b)
(c) a certificate executed by the Co-President of Seller, dated the Closing
Date, in form and substance reasonably satisfactory to Buyer, certifying to the
fulfillment of the conditions set forth in Sections 8.1 and 8.2 hereof,
substantially in the form attached as Exhibit C hereto;
(d) a copy of the action by written consent of the stockholders of Seller
pursuant to Section 228(a) of the DGCL authorizing and approving (i) the sale,
assignment, transfer, conveyance and delivery of the Acquired Assets to Buyer in
compliance with Section 271 of the DGCL and (ii) the execution and delivery of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby (the "Stockholder Approval"),
certified as true, complete and correct on the Closing Date in a written
instrument executed by the Co-President of Seller, substantially in the form of
Exhibit D hereto (the "Co-President's Certificate");
(e)
(f) a copy of the unanimous written consent of the Board of Directors of Seller
pursuant to Section 141(f) of the DGCL authorizing and approving (i) the sale,
assignment, transfer, conveyance and delivery of the Acquired Assets to Buyer in
compliance with Section 271 of the DGCL and (ii) the execution and delivery of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby, certified as true, complete and
correct on the Closing Date under the Co-President's Certificate;
(g)
(h) a copy of the Certificate of Incorporation of Seller dated as of a date
within three (3) business days of the Closing Date, certified under the
Co-President's Certificate as not having been amended, and no document with
respect to an amendment to it having been filed in the office of the Secretary
of State of the State of Delaware since the respective date thereof and no
action having been taken by Seller in contemplation of any such amendment or the
dissolution, merger or consolidation of Seller other than the transactions
contemplated by this Agreement and the Related Agreements;
(i)
(j) a copy of the Long-Form Good Standing Certificate of Seller dated as of the
business day immediately prior to the Closing Date from the Secretary of State
of the State of Delaware accompanied by a Bring-Down Good Standing Certificate
of Seller dated as of the Closing Date from the Secretary of State of the State
of Delaware, in each case, certified as true, complete and correct on the date
set forth thereon under the Co-President's Certificate;
(k)
(l) an executed acknowledgment of the sublease of the Globix Agreements;
(m)
(n) IndustryInsite Manual for the stored procedures and IndustryInsite
ER/schema/data dictionary diagrams for the database; and
(o) all other documents, instruments and writings necessary to consummate the
transactions contemplated hereby or expressly required to be delivered by Seller
at or prior to the Closing pursuant to this Agreement and the Related
Agreements.
(p)
1.12 SECTION Deliveries by Buyer . At the Closing, Buyer shall deliver or cause
to be delivered to Seller (unless delivered previously) the following:
1.13
(a) the Cash Consideration;
(b)
(c) the executed and acknowledged Promissory Note;
(d)
(e) an executed copy of this Agreement and the Related Agreements (as
applicable);
(f)
(g) a certificate executed by the Chief Executive Officer or the Chief Financial
Officer of Buyer, dated the Closing Date, in form and substance reasonably
satisfactory to Seller, certifying to the fulfillment of the conditions set
forth in Sections 8.1(b) and 8.3 hereof, substantially in the form attached as
Exhibit E hereto;
(h)
(i) an executed copy of the Globix Corporation Acceptable Use Policy; and
(j)
(k) all other documents, instruments and writings necessary to consummate the
transactions contemplated hereby or expressly required to be delivered by Buyer
at or prior to the Closing pursuant to this Agreement and the Related
Agreements.
(l)
1 ARTICLE RELATED MATTERS ARTICLE
1 RELATED MATTERS
1.1 SECTION Books and Records of the Business .
(a) Seller agrees to deliver to Buyer or make available to Buyer, at or as soon
as practicable after the Closing, as requested by Buyer, (i) all books and
records of Seller to the extent such books and records relate exclusively to the
Business and (ii) a copy of that portion of all other books and records that
relate exclusively to the Business (in the case of each of (i) and (ii) above,
including correspondence, memoranda and the like). Notwithstanding the foregoing
and except as otherwise provided in Section 2.1(b) hereof, Seller shall not be
obligated to provide (i) any books and records that relate exclusively to, or
(ii) any distinct portion of any books and records that relate exclusively to,
Seller as a whole or any businesses, divisions or Subsidiaries of Seller other
than the Business.
(b)
(c) For a period of three (3) years following the Closing Date, or for such
longer period as may be required to satisfy applicable laws, regulations or
agreements, (i) Seller shall retain all books and records relating to the
Business that are integrated or non-separable from the books and records related
to any businesses, divisions or Subsidiaries of Seller other than the Business
and (ii) Buyer shall retain all other books and records of the Business,
including all other such books and records of the Business required to be
retained pursuant to obligations imposed by any contract, statute, rule or
regulation (such books and records of the Business collectively, the "Records").
(d)
(e) For a period of three (3) years following the Closing Date, or for such
longer periods as may be required to satisfy applicable laws, regulations or
agreements, or record retention requirements of Governmental Entities, (i) each
party hereto shall provide to duly authorized representatives of the other party
and their Affiliates who wish to review any Records for bona fide business
reasons reasonable access, during regular business hours, to (A) employees of
such party, if any, who are familiar with such Records and who can assist such
representatives of such other party, at such other party's own expense, in
locating, explaining or otherwise reviewing such Records and (B) use of such
party's copying facilities, clerical services and telephone in a reasonable
manner at such other party's own expense and
(ii) neither Seller nor Buyer shall dispose of or destroy any Records within
such period without written permission of the other party.
(f)
(g)
2 ARTICLE REPRESENTATIONS AND WARRANTIES OF SELLER ARTICLE
1 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer:
1.1 SECTION Organization and Standing of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on the
Business as it is now being conducted and proposed to be conducted and to own,
license, lease and operate all of the Acquired Assets owned, licensed, leased or
operated by it. Seller is duly qualified as a foreign corporation or licensed to
do business and is in good standing in each jurisdiction in which the Acquired
Assets owned, licensed, leased or operated by it or the nature of the Business
makes such qualification or licensing necessary. Seller is not a participant in
any joint venture or partnership with any other Person or party with respect to
any Acquired Assets.
1.2
1.3 SECTION Authorization and Enforcement . Seller has full power and authority
to execute and deliver this Agreement and the Related Agreements and to perform
its obligations hereunder and thereunder. This Agreement is, and each of the
Related Agreements to be executed and delivered by Seller pursuant hereto will
be, when executed and delivered by Seller (in each case assuming due
authorization, execution and delivery thereof by Buyer and each of the
Stockholders, as applicable), a valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except as such enforcement
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and (b) the
availability of equitable remedies. The (i) the sale, assignment, transfer,
conveyance and delivery of the Acquired Assets to Buyer and (ii) the execution
and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized and approved by the Board of Directors of Seller. The (i) the sale,
assignment, transfer, conveyance and delivery of the Acquired Assets to Buyer
and (ii) the execution and delivery of this Agreement and the Related Agreements
and the consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized and approved by the stockholders
of Seller pursuant to the Stockholder Approval. No other corporate or
stockholder action is necessary to authorize the execution, delivery or
performance of this Agreement and the Related Agreements.
1.1 SECTION No Violation or Conflict by Seller and Approvals.
1.2
(a) Neither the execution, delivery or performance of this Agreement or the
Related Agreements by Seller, nor the consummation of the transactions
contemplated hereby or thereby by Seller, will (i) violate any provisions of the
certificate of incorporation, by-laws or other governing documents of Seller,
(ii) result in (with or without the giving of notice or lapse of time or both) a
violation or breach of, conflict with, loss of a material benefit under or
result in the creation of a Lien upon, or constitute a default or give rise to
any right of termination, cancellation or acceleration under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
letter of credit, other evidence of indebtedness, guarantee, license, lease,
agreement or Contract or other instrument or obligation to which Seller is a
party or by which any of the Acquired Assets may be bound or affected or (iii)
violate any order, injunction, judgment, decree, statute, rule or regulation of
any foreign, United States, state or local governmental entity or municipality
or subdivision thereof or court, tribunal, commission, board, bureau, agency or
legislative, executive, governmental or regulatory authority or agency (a
"Governmental Entity") to which Seller is a party or by which any of the
Acquired Assets may be bound or affected.
(a) No filing or registration with, notification to, or authorization, consent
or approval of, any Governmental Entity is required in connection with the
execution, delivery and performance of this Agreement or the Related Agreements
by Seller.
1.1 SECTION Title; Properties and Acquired Assets Necessary for Conduct of
Business. The Acquired Assets used in the Business are set forth on each of the
Seller Disclosure Schedules that collectively constitute Schedule 2.1(b) of the
Seller Disclosure Schedule. Other than the Excluded Assets, the Acquired Assets
include all properties and assets necessary to permit the Business to be
conducted as currently conducted. Other than the Excluded Assets, all of the
assets used exclusively in the conduct of the Business are included in the
Acquired Assets. Seller owns, or otherwise has a valid interest providing
sufficient and legally enforceable rights to use, all of the Acquired Assets
free and clear of all Liens.
1.1 SECTION Contracts. Schedule 2.1(b)(i) of the Seller Disclosure Schedule
includes a complete and correct list of all Contracts, including all amendments
thereto. True and complete copies of the Contracts and all written amendments
thereto have been provided to Buyer. Seller is not a party to or bound by any
oral Contracts. Except as set forth in any Contract listed, or as otherwise set
forth, in Schedule 2.1(b)(i) of the Seller Disclosure Schedule, each such
Contract is in full force and effect and enforceable against the parties to each
such Contract in accordance with their respective terms, and none of Seller, nor
any other party thereto, is in breach of, or default under, any such Contract,
and no event has occurred that with notice or passage of time or both would
constitute such a breach or default thereunder by Seller or any other party
thereto.
1.1 SECTION Proprietary Software and Intellectual Property. Schedule 2.1(b)(iv),
Schedule 2.1(b)(vii)(a) and Schedule 2.1(b)(vii) of the Seller Disclosure
Schedule contain a complete and correct list of all Proprietary Software and
Intellectual Property. The foregoing, together with the rights of enforcement
for both known and unknown past infringement, and licenses thereof and thereto,
is a complete and correct list of all Proprietary Software and Intellectual
Property that is being used to conduct the Business as it is now conducted.
Seller owns, or is licensed or otherwise possesses legally enforceable rights to
use the Proprietary Software and Intellectual Property, including all required
computer software licenses. As of the date of this Agreement, there are no
oppositions, cancellations, invalidity proceedings, interferences or
re-examination proceedings presently pending by any Governmental Entity with
respect to the Proprietary Software and Intellectual Property. If applicable,
each item of Proprietary Software and Intellectual Property has been used with
the authorization of every other claimant thereto and to the knowledge of
Seller, the execution, delivery and performance of this Agreement or the Related
Agreements will not impair such use by Buyer. As of the date of this Agreement,
Seller has not to its knowledge interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of any
third party with respect to the Proprietary Software and Intellectual Property,
and Seller has not received any charge, complaint, claim, demand or notice of
any such interference, infringement, misappropriation or violation (including
any claim that Seller must refrain from using any intellectual property rights
of any third party) with respect to the Proprietary Software and Intellectual
Property. As of the date of this Agreement, to the knowledge of Seller after a
reasonable investigation, no third party has interfered with, infringed upon or
misappropriated or otherwise come into conflict with any Proprietary Software
and Intellectual Property rights of Seller. As of the date of this Agreement,
there are no pending claims, including litigation, arbitration, opposition
proceedings, petitions to cancel, interferences, administrative proceedings,
demand letters, cease and desist letters, or other demands, challenges or
disputes of any nature, challenging, impacting or involving the Proprietary
Software and Intellectual Property rights of Seller. The Proprietary Software
and Intellectual Property: (a) does not infringe, or constitute an infringement
or misappropriation of any person's or entity's patent right to the knowledge of
Seller (to the knowledge of Seller only refers to patent right), design right,
copyright, trademark, service xxxx (and any application or registration
respecting the foregoing), database right, trade secret, know-how and/or other
present or future intellectual property right of any type, wherever in the world
enjoyable or other similar rights of any third party; (b) is not libelous, an
invasion of privacy, obscene or does not otherwise violate any law or right of
any person or entity; or (c) will not with respect to Proprietary Software, due
to the Year 2000 century date change: (i) have any operational impediments; (ii)
malfunction; (iii) cease to perform; (iv) generate incorrect or ambiguous data
or results with respect to leap years, same-century and multi-century formulas,
functions, and data; or (v) produce incorrect or ambiguous results with respect
to leap years, same-century and multi-century formulas, functions, data values
and date-data interfaces. Any Proprietary Software delivered to Buyer does not
contain any (i) back door, time bomb, drop dead device, or other software
routine designed to disable a computer program automatically, with the passage
of time or under the positive control of Seller or (ii) any virus, Trojan horse,
worm, or other software routine or hardware component designed to permit
unauthorized access, to disable, erase, modify or otherwise harm any software,
hardware or data or to perform any other such actions. As of January 7, 2000,
Seller represents that there were 63,009 Member Profiles of XxxxxxxxXxxxxx.xxx.
1.1 SECTION Litigation. As of the date of this Agreement, there is no claim,
action or proceeding pending or to the knowledge of Seller, threatened by or
against Seller, that names Seller as a party, or, is otherwise by or before any
Governmental Entity with respect to the Acquired Assets or the Business or that
challenges the ability of Seller to perform its obligations under this Agreement
or under the Related Agreements or to convey to Buyer good, valid and marketable
title to the Acquired Assets. There is no outstanding order, judgment,
injunction, award or decree of any Governmental Entity or any settlement
agreement that names Seller as a party or is binding upon Seller with respect to
the Acquired Assets which affects the ownership, use or operation of the
Business or the Acquired Assets.
1.1 SECTION Compliance with Applicable Law. Seller is in compliance with all
applicable laws, ordinances, rules and regulations of any Governmental Entity
applicable to the Business or the Acquired Assets. All Permits required to
conduct the Business have been obtained, are in full force and effect and are
being complied with in all respects.
1.1 SECTION Non-Competition. Seller is not a party to any non-competition
agreement or any other agreement, contract, arrangement or understanding that
restricts the ability of Seller to compete in any business or market (including,
without limitation, product, service and geographic markets).
(a) SECTION Taxes. Seller has duly and timely filed all returns, reports,
information returns or other documents (including any related or supporting
information) ("Tax Returns") required to be filed with any taxing authority with
respect to Taxes on or before the Closing Date, and all such Tax Returns are
true, complete and correct in all material respects and Seller has timely paid
any and all taxes, charges, fees, duties, levies, penalties or other assessments
imposed by any Governmental Entity, including Taxes for all periods ending on
the date hereof, regardless of whether due or claimed to be due from it by any
taxing authority, (b) there are no claims (including any claim as defined in the
Code or any similar encumbrances for Taxes) upon the Acquired Assets except for
statutory liens for current Taxes not yet due for which adequate reserves have
been established if required pursuant to United States generally accepted
accounting principles and (c) no federal, state, local or foreign audits or
other administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of Seller and no such audit or proceeding is
threatened.
1.1 SECTION Disclosure. This Agreement and the Related Agreements to be
furnished on the Closing Date to Buyer by or on behalf of Seller pursuant
hereto, do not contain any untrue statement of a material fact or omit to state
a material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein in light of the circumstances under which
they were made, not misleading.
1.1 SECTION Member Profiles . Seller has not collected any personally
identifiable information from any user, via XxxxxxxxXxxxxx.xxx, which is
included in the Member Profiles, whom Seller knew or reasonably should have
known was, at the time of collection, under the age of thirteen.
1.1 SECTION E-mail Messages . Seller has not in connection with
XxxxxxxxXxxxxx.xxx: (i) sent e-mail messages not explicitly requested by the
recipient to individual e-mail accounts or copies of a single message to many
e-mail accounts, including, but not limited to, bulk commercial advertising or
informational announcements (i.e., mailbombing, other than to registered members
of IndustryInsite in compliance with the XxxxxxxxXxxxxx.xxx Website terms and
conditions of use and privacy policies and the Globix Sublease), (ii) continued
to send e-mail messages to a recipient that has indicated that he/she does not
wish to receive them; or (iii) sent e-mail with forged TCP/IP packet header
information.
1.1 SECTION Certain Fees . Neither Seller nor any of its Affiliates has employed
any financial advisor or finder or incurred any liability for any financial
advisory or finders' fees in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby.
1 ARTICLE
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder represents and warrants, jointly and severally, to Buyer as
follows: SECTION Individual Capacity . Each Stockholder has all requisite legal
capacity to enter into this Agreement and the Related Agreements and to perform
all of the obligations required to be performed by each Stockholder hereunder
and thereunder.
1.1 SECTION No Violation or Conflict by Stockholders and Approvals .
1.2
(a) Neither the execution, delivery or performance of this Agreement or the
Related Agreements by any Stockholder in his capacity as such nor the compliance
by any Stockholder in his capacity as such with any of the provisions hereof or
thereof will (i) result in (with or without the giving of notice or lapse of
time or both) a violation or breach of, conflict with, loss of a material
benefit under or result in the creation of a Lien upon, or constitute a default
or give rise to any right of termination, cancellation or acceleration under any
of the terms, conditions or provisions of any Contract to which Seller is a
party or by which any of the Acquired Assets may be bound or affected or (ii)
violate any order, injunction, judgment, decree, statute, rule or regulation of
any Governmental Entity to which Seller is a party or by which any of the
Acquired Assets may be bound or affected.
(a) No filing or registration with, notification to, or authorization, consent
or approval of, any Governmental Entity is required in connection with the
execution, delivery and performance of this Agreement or the Related Agreements
by any Stockholder in his capacity as such.
1.1 SECTION Certain Fees . No Stockholder has employed any financial advisor or
incurred any liability for financial advisory or finders' fees in connection
with this Agreement or the Related Agreements or the transactions contemplated
hereby or thereby.
1.1 SECTION Non-competition. Neither Stockholder is a party to any
non-competition agreement or any other agreement, contract, arrangement or
understanding that restricts the ability of Seller to compete in any business or
market (including, without limitation, product, service and geographic markets).
1.2
1 ARTICLE REPRESENTATIONS AND WARRANTIES OF BUYER ARTICLE
1 REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to Seller as follows:
1.1 SECTION Corporate Organization; Authority and Enforcement .
1.2
(a) Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation.
(a) The Buyer has all requisite corporate power and authority to execute and
deliver this Agreement, the Related Agreements and the Promissory Note and to
perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement, the Related Agreements and the Promissory Note by Buyer and the
performance by Buyer of its respective obligations hereunder and thereunder have
been duly and validly authorized by the Board of Directors of Buyer and no other
corporate or stockholder action on the part of Buyer is necessary to authorize
the execution, delivery and performance of this Agreement, the Related
Agreements and the Promissory Note. This Agreement is, and each of the Related
Agreements and the Promissory Note to be executed and delivered by Buyer
pursuant hereto will be, when executed and delivered by Buyer (in each case
assuming due authorization, execution and delivery by Seller and each of the
Stockholders, as applicable) a valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as such
enforcement may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
and (b) the availability of equitable remedies.
1.1 SECTION No Violation or Conflict by Buyer and Approvals.
1.2
(a) Neither the execution, delivery or performance of this Agreement, the
Related Agreements or the Promissory Note by Buyer, nor the consummation of the
transactions contemplated hereby or thereby by Buyer, will (i) violate any
provisions of the certificate of incorporation, by-laws or other governing
documents of Buyer, (ii) result in (with or without the giving of notice or
lapse of time or both) a violation or breach of, conflict with, loss of a
material benefit under or result in the creation of a Lien upon, or constitute a
default or give rise to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, letter of credit, other evidence of indebtedness,
guarantee, license, lease, agreement or contract or other instrument or
obligation to which Buyer is a party or (iii) violate any order, injunction,
judgment, decree, statute, rule or regulation of any Governmental Entity to
which Buyer is a party.
(a) No filing or registration with, notification to, or authorization, consent
or approval of, any Governmental Entity is required in connection with the
execution, delivery and performance of this Agreement, the Related Agreements or
the Promissory Note by Buyer.
1.1 SECTION Litigation . As of the date of this Agreement, there is no claim,
action or proceeding pending or, to the knowledge of Buyer, threatened against
Buyer that challenges the validity of this Agreement, the Related Agreements or
the Promissory Note or the ability of Buyer to perform its obligations hereunder
or thereunder, by or before any Governmental Entity.
1.1 SECTION Certain Fees . Neither Buyer nor any of its Affiliates has employed
any financial advisor or finder or incurred any liability for any financial
advisory or finders' fees in connection with this Agreement or the Related
Agreements or the transactions contemplated hereby or thereby; except for
arrangements with Xxxxxxxxx & Co. LLC which shall be satisfied by Buyer.
1.1 SECTION Disclosure . This Agreement, the Related Agreements and the
Promissory Note to be furnished on the Closing Date to Seller by or on behalf of
Buyer pursuant hereto do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein in light of the
circumstances under which they were made, not misleading.
1 ARTICLE COVENANTS ARTICLE
1 COVENANTS
1.1 SECTION Allocation of Purchase Price . Buyer and Seller shall agree to the
allocation of the Purchase Price and the Assumed Liabilities (other than
contingent liabilities) among the Acquired Assets to be purchased hereunder (the
"Allocation"), which Allocation shall be mutually agreed upon by Buyer and
Seller as soon as practicable after the Closing Date. The Allocation shall be
made in accordance with Section 1060 of the Code and applicable Treasury
Regulations. Each of Seller and Buyer shall (a) be bound by the Allocation for
purposes of determining any Taxes, (b) prepare and file, and cause its
Affiliates to prepare and file, its Tax Returns on a basis consistent with the
Allocation and (c) take no position, and cause its Affiliates to take no
position, inconsistent with the Allocation on any applicable Tax Return, in any
proceeding before any taxing authority or otherwise. In the event that the
Allocation is disputed by any taxing authority, the party receiving notice of
the dispute shall promptly notify the other party hereto in writing concerning
resolution of the dispute. For purposes of the Allocation, the Parties hereto
agree that $15,000 of the Purchase Price shall be allocated to the agreement not
to compete or solicit described below in Section 7.2 hereof, $7,500 of which
shall be paid to Seller in consideration for such agreement and $7,500 of which
shall be treated as paid to the Stockholders in consideration for such agreement
who in turn shall be treated as contributing such funds to Seller.
1.1 SECTION Agreement Not to Compete or Solicit . In order to assure Buyer the
complete benefit of the ownership of the Acquired Assets and the Business,
Seller and each Stockholder, without further consideration or remuneration,
covenant that, for a period of three (3) full years after the Closing Date,
neither Seller any of its Affiliates, nor any Stockholder shall: (i) engage in a
business similar to that of the Business as of the date of this Agreement (a
"Competing Business"), anywhere in the world whether such engagement shall be as
owner, partner, agent, consultant, advisor or shareholder (except as the holder
of not more than 3% of the fully diluted shares of a corporation whose stock is
listed on any national or regional securities exchange or reported by the
National Association of Securities Dealers Automated Quotation System or any
successor thereto); (ii) solicit the employment of any person while such person
is in the employ of Buyer or its Affiliates; (iii) solicit any Person who is a
member of XxxxxxxxXxxxxx.xxx at the Closing Date for purposes of offering to
such member any service that competes with any service offered by the Business
as of the Closing Date; (iv) induce or attempt to induce any individual,
business, corporation, firm, partnership or other business entity that is a
customer or supplier to Buyer or any distributor or seller of products of Buyer,
or that is otherwise a contracting party with Buyer, to terminate or otherwise
adversely change or cancel any written or oral agreement with Buyer; or (v)
propose, threaten or make public its or their intention to do any of the
foregoing. Seller and each Stockholder acknowledge that the periods of
restriction, the geographical areas of restriction and the restraints imposed by
the provisions of this Section 7.2 are fair and reasonably required for the
protection of Buyer. In the event that any of the provisions of this Section 7.2
relating to the geographic areas of restriction or the periods of restriction
shall be deemed to exceed the maximum area or period of time which a court of
competent jurisdiction would deem enforceable in a non-appealable final ruling,
the geographic areas and times shall, for the purposes of this Agreement, be
deemed to be the maximum areas or time periods which a court of competent
jurisdiction would deem valid and enforceable in any state in which such court
of competent jurisdiction shall be convened.
1.1 SECTION Nondisclosure of Proprietary Data. Subject to the Confidentiality
Agreement, dated October 4, 1999, between Buyer and Seller (the "Confidentiality
Agreement"), the terms of which Confidentiality Agreement shall continue in full
force and effect after the Closing Date, Seller and each of the Stockholders
agree that they shall not, at any time, make use of, divulge or otherwise
disclose, directly or indirectly, any trade secret or other proprietary data
(including, without limitation, any Member Profile, list of registered members
of IndustryInsite, record or financial or other information constituting a trade
secret) concerning the Business that Seller and each of the Stockholders may
have learned as a stockholder, officer, director or employee of Seller, unless
such information has become generally available and known to the public other
than as a result of a prohibited disclosure by Seller or one of the Stockholders
or any disclosure of such information may be made by Seller or one of the
Stockholders as otherwise required by Legal Requirement in the opinion of
counsel; provided that Seller and/or the Stockholders agree to provide
reasonable written notice to Buyer in connection with a potential disclosure
pursuant to a Legal Requirement and agree to allow Buyer the opportunity to
contest such disclosure at Buyer's sole cost and expense and agree to reasonably
assist Buyer in such action.
1.1 SECTION Bulk Transfer Laws . Buyer and Seller hereby waive compliance by
Seller with the provisions of any so-called "bulk transfer law" of any
jurisdiction in connection with the sale of the Acquired Assets to Buyer.
1.1 SECTION Seller and Stockholder Cooperation . In order to assure Buyer the
complete benefit of the Acquired Assets and the Business, the Seller and each of
the Stockholders, without further consideration or remuneration, (a) until the
earlier to occur of (i) ninety (90) days from the Closing Date, (ii) the date
that Buyer's technology personnel make substantial modifications or changes to
the layout or functionality of the XxxxxxxxXxxxxx.xxx Website or (iii) the date
that Buyer substantially completes integration of the XxxxxxxxXxxxxx.xxx Website
into its existing network (the "Transitional Services Period"), Seller and each
of the Stockholders covenant and agree to manage, operate and maintain the
XxxxxxxxXxxxxx.xxx Website as it is currently being managed, operated and
maintained and agree to cooperate with the management of Buyer on an on-going
basis during such period including implementing any non-substantial
modifications or changes to the layout or functionality of the
XxxxxxxxXxxxxx.xxx Website at the reasonable request of Buyer during such
period; the Seller and each of the Stockholders covenant and agree to provide
the same level of system administration as is currently being devoted to the
XxxxxxxxXxxxxx.xxx Website; the Seller and each of the Stockholders covenant and
agree to use their Best Efforts to prevent any unauthorized access, or
modification to the XxxxxxxxXxxxxx.xxx Website, database, Member Profiles or
Proprietary Software and in the case of any such event, agree to fully cooperate
with Buyer to alleviate or fix the situation; the Seller and each of the
Stockholders covenant and agree to provide up to five (5) days of orientation
and training to employees of or consultants to Buyer on the maintenance,
operation, management, updating or modifying of the XxxxxxxxXxxxxx.xxx Website,
in among the following areas: (i) IT Staffing, including support of servers and
infrastructure; (ii) daily administration of the XxxxxxxxXxxxxx.xxx Website;
(iii) technical programming; and (iv) support of registered members and users
and (b) for a period of thirty (30) days from the ending date of the
Transitional Services Period, Seller and each of the Stockholders covenant and
agree to promptly assist on an ongoing basis, not to exceed ten (10) hours per
week, employees of or consultants to Buyer in its integration of the Proprietary
Software into Buyer's network and the on-going maintenance of the Proprietary
Software subsequent to its integration into Buyer's network, such assistance
shall include, among other matters, consultation and advice either on Buyer's
premises or through telephone consultation relating to the integration and
functionality of the Proprietary Software; Buyer agrees to give reasonable
notice, when possible, to Seller's employees and each Stockholder, as the case
may be, when requesting such assistance.
1.1 SECTION Prohibition on Distribution of a Portion of the Purchase Price to
Stockholders of Seller . Seller and each of the Stockholders covenant and agree
that during the Survival Period, Seller shall not distribute, loan, transfer,
dividend or effect any redemption or repurchase of capital stock of Seller or
set aside or put into escrow for distribution to stockholders of Seller, in one
or a series of transactions, $500,000 of the proceeds of the Purchase Price for
the stockholders of Seller, including in one or a series of transactions by
which goods, services (except for salary and other remuneration payable in the
ordinary course of business and consistent with past practice) or other assets
are purchased with any such portion of the proceeds of the Purchase Price and
such goods, services (except for salary and other remuneration payable in the
ordinary course of business and consistent with past practice) or other assets
are distributed to the stockholders of Seller; provided, however, that nothing
contained herein shall prevent Seller from using the proceeds of the Purchase
Price to fund its ongoing business operations and new product developments;
provided, further, that in the event there is a change of control transaction by
which an entity, not a stockholder of Seller as of the date hereof, acquires
subsequent to the Closing Date greater than 50% of Seller's outstanding capital
stock in one or a series of transactions, this provision shall terminate and be
of no further force or effect assuming that such entity has a net worth of at
least $2,500,000 at the time of such proposed transaction(s) and certified
financial statements evidencing such are delivered to Buyer prior to the
consummation of the transaction(s).
1.1 SECTION Removal of Content . Buyer acknowledges and agrees that Seller shall
within five (5) business days of the Closing Date remove only the following from
the XxxxxxxxXxxxxx.xxx Website: (a) all content provided by XxxXxxx.xxx; (ii)
all advertisements provided by 24/7 Media, Inc.; (iii) all content provided by
CareerMoasic, a division of Xxxxxxx Xxxxx Advertising; and (iv) all content
provided by CareerCentral Corporation. Buyer acknowledges and agrees that Seller
shall within five (5) business days delete all references to "Brainstorm",
"Brainstorm Interactive", "Brainstorm Interactive, Inc." or any other
identifying xxxx, logo, or name, and at the same time replace such references
with "Opus 360 Corporation" or such other identifying xxxx of Buyer as Buyer's
management reasonably requests. Seller covenants and agrees to be for
responsible for the payment of all charges and revenue sharing payment
obligations accrued, if any, under such contracts even if payable after the
Closing Date until the content is removed from the XxxxxxxxXxxxxx.xxx Website.
Buyer agrees to cooperate and assist Seller in the removal of the content
specified in clauses (i) through (iv) above.
1.1 SECTION Transition Announcement . Seller and each Stockholder agree to
cooperate with the management of Buyer in the preparation, drafting and
dissemination of a transition announcement, which explains the ownership change;
each Stockholder agrees to provide a quotation for attribution which extols the
benefits to registered members and users of XxxxxxxxXxxxxx.xxx of the
integration of XxxxxxxxXxxxxx.xxx into Buyer's existing suite of technology
offerings and encouraging registered members and users of XxxxxxxxXxxxxx.xxx to
become registered "Free Agents" on Buyer's XxxxXxxxx.xxx Website; Seller and
each Stockholder acknowledge that this transition announcement may take the form
of both a written press release to be disseminated by Buyer and a posting on the
home page of XxxxxxxxXxxxxx.xxx.
1 ARTICLE CONDITIONS PRECEDENT ARTICLE
1 CONDITIONS PRECEDENT
1.1 SECTION Effect the Closing. The respective obligation of each party to
effect the Closing is subject to the satisfaction or waiver on or prior to the
Closing of the following conditions:
(a) Stockholder Approval . The Stockholder Approval shall have been obtained.
(b)
(c) No Injunctions or Restraints . No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by any court or other Governmental Entity of competent jurisdiction or other
legal restraint or prohibition (collectively, "Restraints") shall be in effect
(i) preventing the consummation of the Closing or (ii) which otherwise is
reasonably likely to materially adversely affect the Seller, the Business, the
Acquired Assets or the transactions contemplated in this Agreement or the
Related Agreements, as applicable; provided, however, that each of the parties
shall have used all reasonable efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such Restraints that may be
entered.
1.1 SECTION Conditions to Obligations of Buyer . The obligation of Buyer to
effect the Closing is further subject to satisfaction or waiver (in writing by
Buyer) of the following conditions:
(a) Representations and Warranties . The representations and warranties of
Seller and each Stockholder set forth herein shall be true and correct as of the
Closing Date.
(b)
(c) Performance of Obligations of Seller . Seller shall have performed and
complied with all of its obligations, agreements and covenants and satisfied all
the conditions on its part under this Agreement and the Related Agreements and
required to be performed or satisfied by it at or prior to the Closing Date.
(d)
(e) Assignments. Seller shall have completed and executed, and where applicable,
obtained notarization of all assignment instruments that may be required to
effect the sale, assignment, transfer, conveyance and delivery of the
Trademarks, the Domain Names and the Contracts and that may be required in
connection with the performance by Seller of its obligations under this
Agreement and the Related Agreements.
1.1 SECTION Conditions to Obligations of Seller . The obligation of Seller to
effect the Closing is further subject to satisfaction or waiver (in writing by
Seller) of the following conditions:
(a) Representations and Warranties . The representations and warranties of Buyer
set forth herein shall be true and correct as of the Closing Date.
(b)
(c) Performance of Obligations of Buyer . Buyer shall have performed and
complied with all of its obligations, agreements and covenants and satisfied all
the conditions on its part under this Agreement and the Related Agreements and
required to be performed or satisfied by it at or prior to the Closing Date.
1.1 SECTION Frustration of Closing Conditions . Neither Buyer nor Seller may
rely on the failure of any condition set forth in Section 8.1, 8.2 or 8.3
hereof, as the case may be, to be satisfied if such failure was caused by such
party's failure to use Best Efforts to consummate the Closing and the other
transactions contemplated by this Agreement.
1 ARTICLE SURVIVAL; INDEMNIFICATION ARTICLE
SURVIVAL; INDEMNIFICATION
1
1.1 SECTION Survival. Each of the representations and warranties and covenants
and agreements made by the parties in this Agreement, including the Seller
Disclosure Schedules and Exhibits hereto and the certificates delivered in
accordance with Article II hereof (insofar as the Seller Disclosure Schedules,
Exhibits and such certificates relate to such representations and warranties and
covenants and agreements) and the Related Agreements shall survive the Closing
for a period of twelve (12) months (the "Survival Period"), except (a) that as
to any representation or warranty or covenant or agreement that references a
definitive or calculable period of time for its survival, then in such case the
time period so stated or calculable shall govern and (b) as to any
representation or warranty or covenant or agreement relating exclusively to
Excluded Liabilities in respect of Seller and relating exclusively to Assumed
Liabilities in respect of Buyer shall survive indefinitely. If notice of a claim
for indemnification pursuant to this Article IX is given prior to the expiration
of the Survival Period, such representations and warranties and covenants and
agreements shall survive indefinitively only for the purpose of such claim until
such claim is finally resolved.
1.1 SECTION Indemnification by Seller. From and after the Closing and subject to
the provisions of this Article IX, Seller shall indemnify, defend and hold
harmless Buyer, its directors, officers, employees, Affiliates, controlling
persons, agents and representatives and their successors and assigns (the "Buyer
Indemnified Parties") from and against any and all actions, proceedings, costs,
damages, claims and payments whatsoever, including reasonable attorneys' fees
(collectively, "Losses") which may be asserted against, resulting to, imposed
on, sustained, incurred or suffered by any of the Buyer Indemnified Parties
arising out of, relating to or on account of (a) the Excluded Liabilities, (b)
any breach of any representation or warranty of Seller made in this Agreement or
the Related Agreements, (c) any breach or failure to perform of any covenant or
agreement of Seller made in this Agreement or the Related Agreements and (d) any
liability of Buyer arising from the non-compliance with applicable bulk sales
laws or the Uniform Commercial Code.
1.1 SECTION Indemnification By Buyer . From and after the Closing and subject to
the provisions of this Article IX, Buyer shall indemnify and hold harmless
Seller, its directors, officers, employees, Affiliates, controlling persons,
agents and representatives and their successors and assigns (the "Seller
Indemnified Parties") from and against any and all Losses which may be asserted
against, resulting to, imposed on, sustained, incurred or suffered by any of the
Seller Indemnified Parties arising out of, relating to or on account of (a) the
Assumed Liabilities, (b) any breach of any representation or warranty of Buyer
made in this Agreement or the Related Agreements and (c) any breach or failure
to perform of any covenant or agreement of Buyer made in this Agreement or the
Related Agreements.
1.1 SECTION Certain Limitations. Notwithstanding anything to the contrary
contained herein, no indemnification shall be available to Indemnified Parties
for Losses arising solely in respect of the subject matter of either Section
9.2(b) hereof or Section 9.3(b) hereof until the aggregate amount of such Losses
exceeds $50,000 and then to the full extent of such Losses; and in no event
shall an Indemnifying Party's indemnification obligations for Losses arising
solely in respect of the subject matter of either Section 9.2(b) hereof or
Section 9.3(b) hereof exceed $500,000; provided that a party who prevails in any
action or claim other than through this Article IX based on a claim arising
solely in respect of the subject matter of Section 9.2(b) hereof, Section 9.3(b)
hereof or Article V hereof agrees to be subject to the minimum and maximum
thresholds of this Section 9.4 as to any damages awarded in such action or claim
or any settlement in respect thereof. All indemnification payments made
hereunder shall be treated as an adjustment to the Purchase Price for all Tax
purposes.
SECTION 9.5. Claims Procedure . The following procedure shall govern any
claims which may be brought pursuant to the indemnification provisions of this
Agreement.
(a) The party seeking indemnification (the "Indemnified Party") shall promptly
give written notice to the party against whom indemnification is sought (the
"Indemnifying Party") of all claims, whether between the parties or raised by a
third party, that could constitute a claim for indemnification. The written
notice shall specify to the extent known by the Indemnified Party (a) the
factual basis for such claim and (b) the amount of or estimated amount of such
claim (which estimate shall not be conclusive of the final amount of such
claim); provided, however, that any such failure to give such written notice
will not waive any rights of the In-
demnified Party except to the extent the rights of the Indemnifying Party are
actually prejudiced.
(b)
(c) With respect to claims between the parties, following receipt of notice from
the Indemnified Party of a claim, the Indemnifying Party shall have thirty (30)
days to make such investigation of the claim as the Indemnifying Party deems
necessary or desirable. For the purposes of such investigation, the Indemnified
Party agrees to make available to the Indemnifying Party and/or its authorized
representative(s) the information relied upon by the Indemnified Party to
substantiate the claim, as well as any other information bearing thereon
reasonably requested by the Indemnifying Party. If the Indemnified Party and the
Indemnifying Party agree at or prior to the expiration of the thirty-day period
to the validity and amount of such claim, the Indemnifying Party shall
immediately pay to the Indemnified Party the full amount of the claim in
immediately available funds.
(d)
(e) With respect to any claim by a third party as to which the Indemnified Party
is entitled to indemnification hereunder, the Indemnifying Party may, and upon
request of the Indemnified Party shall, retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in connection with such claim or demand and
shall promptly pay the fees and disbursements of such counsel with regard
thereto. In the event an Indemnifying Party shall retain such counsel, an
Indemnified Party shall have the right to retain its own counsel, but the fees
and disbursements of such counsel shall be at the expense of such Indemnified
Party unless (i) the Indemnifying Party and such Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would in the
reasonable judgment of the Indemnified Party be inappropriate due to actual or
potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. No Indemnifying Party shall be
liable to an Indemnified Party for any settlement of any action or claim without
the consent of the Indemnifying Party which consent shall not be unreasonably
withheld or delayed, subject to the next sentence. The Indemnifying Party shall
not, without the prior written consent of the Indemnified Party, settle or
compromise any claim or consent to the entry of any judgment that does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party a release from all liability in respect of
such claim.
1 ARTICLE MISCELLANEOUS
ARTICLE 1 MISCELLANEOUS
1.1 SECTION Further Assurances. From time to time after the Closing Date, at the
request of any party hereto and at the expense of such party, the parties hereto
shall execute and deliver to such requesting party such documents and take such
other action as such requesting party may reasonably request in order to
consummate more effectively the transactions contemplated hereby and by the
Related Agreements. The parties understand that this Section 10.1 is in addition
to the obligations of the Seller and each of the Stockholders set forth in
Section 7.5 and not a substitute therefore.
1.1 SECTION Notices . All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and may be given by any of the following methods: (a) personal
delivery, (b) facsimile transmission or (c) overnight delivery service. Notices
shall be sent to the appropriate party at its address or facsimile number given
below (or at such other address or facsimile number for such party as shall be
specified by written notice given hereunder):
If to Buyer, to:
Opus360 Corporation
Attention: Xxx Xxxxxxxx, Chief Executive Officer
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Attention: Xxxxxx X. Xxxxxxx, Esquire
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to Seller, to:
Brainstorm Interactive, Inc.
Attention: Xxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
Attention: Xxxxxx X. Xxxxx, Esquire
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
All such notices, requests, demands, waivers and other communications shall be
deemed received upon (i) actual receipt thereof by the addressee, (ii) actual
delivery thereof to the appropriate address or (iii) in the case of a facsimile
transmission, upon transmission thereof by the sender and issuance by the
transmitting machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error.
1.1 SECTION Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated herein is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner.
1.1 SECTION Assignment; Binding Effect . Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned, directly or
indirectly, including, without limitation, by operation of law, by any party
hereto without the prior written consent of the other parties hereto, except
that Buyer may assign any or all of its rights hereunder to an Affiliate of
Buyer or to a Subsidiary of Buyer. Subject to the preceding sentence, this
Agreement and all of the provisions hereof shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
1.1 SECTION Amendment; Waiver. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Buyer and Seller (and as to each Stockholder to the
extent such amendment addresses a provision of this Agreement that materially
affects such Stockholder), or in the case of a waiver, by the party against whom
the waiver is to be effective. No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
1.1 SECTION No Third Party Beneficiaries . This Agreement is solely for the
benefit of Seller and its successors and permitted assigns, with respect to the
obligations of Buyer under this Agreement, and for the benefit of Buyer, and its
successors and permitted assigns, with respect to the obligations of Seller,
under this Agreement, and this Agreement shall not be deemed to confer upon or
give to any other third party any remedy, claim, liability, reimbursement, cause
of action or other right.
1.1 SECTION Interpretation. When a reference is made in this Agreement to
Articles or Sections, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. Whenever the words "include," "includes"
or "including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
1.1 SECTION Entire Agreement. This Agreement, together with the Seller
Disclosure Schedules and the Exhibits, certificates and other documents referred
to herein or delivered pursuant hereto that form a part hereof, the Related
Agreements and the Confidentiality Agreement, constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
SECTION 10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
1.1 SECTION Specific Performance . The parties acknowledge and agree that any
breach of the terms of this Agreement and the Related Agreements would give rise
to irreparable harm for which money damages would not be an adequate remedy and
accordingly the parties agree that, in addition to any other remedies, each
shall be entitled to enforce the terms of this Agreement and the Related
Agreements by a decree of specific performance without the necessity of proving
the inadequacy of money damages as a remedy.
1.1 SECTION Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
1.1 SECTION Publicity. Except as set forth below, no press release or
announcement concerning the existence of this Agreement or any of the Related
Agreements or the transactions contemplated hereby or thereby shall be issued by
any party without the prior written consent of the other party, except that in
the event Buyer shall deem such press release or announcement to be required by
law, rule or regulation (including applicable Federal and State securities laws,
rules and regulations and applicable stock exchange or Nasdaq rules).
1.1 SECTION Submission to Jurisdiction . Each of the parties submits to the
exclusive jurisdiction of any State or Federal court sitting in the State of
Delaware in any action or proceeding arising out of or relating to this
Agreement, agrees that all claims in respect of the action or proceeding may be
heard and determined in any such court and agrees not to bring any action or
proceeding arising out of or relating to this Agreement and the related
Agreements in any other court. Each of the parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety or other security that might be required of any party
with respect hereto.
1.1 SECTION Expenses. Each of the parties hereto shall pay its own cost and
expenses in connection with this Agreement and the Related Agreements and the
transactions contemplated hereby and thereby.
1.1 SECTION No Strict Construction. The language used in this Agreement and the
Related Agreements shall be deemed to be the language chosen by Seller, each
Stockholder and Buyer to express their mutual intent, and no rules of strict
construction shall be applied against any party.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
OPUS360 CORPORATION
By: /s/ Xxxx XxXxxx
-----------------------
Name: Xxxx XxXxxx
Title: Sr. VP, CFO
BRAINSTORM INTERACTIVE, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title:
IN WITNESS WHEREOF, each Stockholder accepts and agrees to the terms of
this Agreement as to Article V, Section 7.1, Section 7.2, Section 7.3, Section
7.5, Section 7.6 and Section 7.8 only and hereby executes the Agreement as of
the day and year first above written.
/s/ Xxxxx Xxxxxx
----------------------------
Xxxxx Xxxxxx
/s/ Xxx Xxxxxx
----------------------------
Xxx Xxxxxx
