EXHIBIT 2.4
EXCHANGE AGREEMENT
AMONG
IXL HOLDINGS, INC.
AND
XXXXX X. XXXXX,
R. XXX XXXXXXXX, III,
XXXXX X. XXXXX,
XXXXX X. XXXXXXXXXX
AND
XXXX XXXX
______________________________
Dated as of April 30, 1996
______________________________
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions................................................ 2
1.2 Singular/Plural; Gender.................................... 5
ARTICLE II
THE EXCHANGE
2.1 Exchange................................................... 5
2.2 Payment on Closing......................................... 5
2.3 Closing Date Deliveries.................................... 5
2.4 Risk of Loss............................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
3.1 Corporate Organization..................................... 6
3.2 ETV Stock.................................................. 6
3.3 Subsidiaries............................................... 6
3.4 Title to Stock............................................. 6
3.5 Seller Investment Representations.......................... 6
3.6 Absence of Conflicting Agreements.......................... 9
3.7 Title to ETV Assets; Liens and Encumbrances................ 9
3.8 ETV Assets................................................. 9
3.9 Equipment.................................................. 10
3.10 Contracts.................................................. 10
3.11 Intangible Property........................................ 11
3.12 Financial Statements....................................... 11
3.13 Absence of Undisclosed Liabilities......................... 12
3.14 No Adverse Change.......................................... 12
3.15 No Litigation; Labor Disputes; Compliance with Law......... 13
3.16 Tax Returns and Tax Reports................................ 13
3.17 Governmental Authorizations................................ 14
3.18 Compliance with Governmental Requirements.................. 14
3.19 Banks; Powers of Attorney.................................. 15
3.20 Employees.................................................. 15
3.21 Employee Welfare Plans..................................... 15
3.22 Environmental Compliance................................... 15
3.23 Customer Relations......................................... 16
3.24 Representation as of the Closing Date...................... 16
3.25 Affiliate Transactions..................................... 16
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3.26 Disclosure................................................. 16
3.27 Reliance on Representations and Warranties of Buyer........ 17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization............................................... 17
4.2 Authorization; Enforceability.............................. 17
4.3 Absence of Conflicting Agreements.......................... 18
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
5.1 Compliance with Agreement.................................. 18
5.2 Proceedings and Instruments Satisfactory................... 18
5.3 Representations and Warranties............................. 18
5.4 Deliveries at Closing...................................... 18
5.5 Other Documents............................................ 19
5.6 Absence of Investigations and Proceedings.................. 19
5.7 Governmental Consents...................................... 19
5.8 Absence of Liens........................................... 19
5.9 No Material Adverse Change................................. 19
5.10 Approvals and Consents..................................... 19
5.11 Stock Purchase and Exchanges............................... 19
5.12 Amendment to Articles of Incorporation..................... 19
5.13 Bylaws..................................................... 19
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
6.1 Compliance with Agreement................................... 20
6.2 Proceedings and Instruments Satisfactory.................... 20
6.3 Representations and Warranties.............................. 20
6.4 Deliveries at Closing....................................... 20
6.5 Other Documents............................................. 20
6.6 Absence of Investigations and Proceedings................... 20
6.7 Governmental Consents....................................... 20
ARTICLE VII
MISCELLANEOUS
7.1 Further Assurances.......................................... 21
7.2 Entire Agreement; Amendment; and Waivers.................... 21
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7.3 Expenses................................................... 21
7.4 Benefit; Assignment........................................ 21
7.5 Notices.................................................... 21
7.6 Counterparts; Headings..................................... 22
7.7 Severability............................................... 23
7.8 Investigations; Non-Survival of Warranties................. 23
7.9 Governing Law.............................................. 23
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LIST OF EXHIBITS
Exhibit A Exchange Consideration
Exhibit B Registration Rights Agreement
Exhibit C Stockholders' Agreement
Exhibit D Sellers' Certificate
Exhibit E Amended and Restated Certificate of Incorporation
Exhibit F Amended and Restated Bylaws
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LIST OF SCHEDULES
Schedule 3.1 Corporate Organization
Schedule 3.2 ETV Stock
Schedule 3.6 Absence of Conflicting Agreements
Schedule 3.7 Title to ETV Assets; Liens and
Encumbrances
Schedule 3.9 Equipment
Schedule 3.10 Contracts
Schedule 3.11 Intangible Property
Schedule 3.12(a) Financial Statements
Schedule 3.12(b) Interim Financial Statements
Schedule 3.13 Indebtedness of ETV to Sellers
Schedule 3.13(a) Absence of Undisclosed Liabilities
Schedule 3.13(b) Permitted Liens
Schedule 3.14 Adverse Change
Schedule 3.15 Litigation; Labor Disputes; Compliance with Law
Schedule 3.16 Tax Returns and Tax Reports
Schedule 3.17 Governmental Authorizations
Schedule 3.18 Compliance with Governmental Requirements
Schedule 3.19 Bank; Powers of Attorney
Schedule 3.20 Employees
Schedule 3.21 Employee Welfare Plans
Schedule 3.25 Affiliate Transactions
Schedule 4.3 Absence of Conflicting Agreements
Schedule 5.10 Approvals and Consents
EXCHANGE AGREEMENT
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THIS EXCHANGE AGREEMENT ("Agreement") dated as of April 30, 1996, by and
among Xxxxx X. Xxxxx, R. Xxx Xxxxxxxx, III, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxxx
and Xxxx Xxxx (individually a "Seller" and collectively, "Sellers") and IXL
Holdings, Inc., a Delaware corporation ("Buyer").
RECITALS
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A. Buyer desires to acquire all of the outstanding shares of Common Stock,
par value $1.00 per share (the "Stock"), of Entrepreneur Television, Inc., a
Georgia corporation ("ETV").
X. Xxxxxxx own all of the issued and outstanding Stock of ETV.
C. Each Seller desires to exchange the Stock owned by such Seller for
shares of Class B Common Stock, par value $.01 per share ("Class B Common
Stock"), of Buyer and cash in the respective amounts as set forth herein.
D. Contemporaneously with the closing of the exchange contemplated hereby
(the "Exchange"), (i) certain of the existing stockholders of Buyer and certain
other investors, including without limitation, Xxxxx Investment Associates V,
L.P. ("KIA V") and Xxxxx Equity Partners V, L.P. ("KEP"), will purchase certain
additional capital stock of Buyer (the "Stock Purchase") and (ii) Buyer will
exchange certain of its capital stock in return for (x) all of the issued and
outstanding capital stock of iXL Interactive Excellence, Inc., a Georgia
corporation ("IXL") (the "IXL Exchange"); (y) all of the issued and outstanding
capital stock of Creative Video, Inc., a Georgia corporation ("CVI") (the "CVI
Exchange"); and (z) all of the issued and outstanding capital stock of Creative
Video Library, Inc., a Georgia corporation ("CVL") (the "CVL Exchange").
E. The parties hereto intend that the Exchange, the Stock Purchase, the
IXL Exchange, the CVL Exchange and the CVI Exchange will take place
simultaneously and the stock transferred and cash provided to Buyer in
connection with such transactions will qualify under Section 351 of the Internal
Revenue Code.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants, agreements and conditions set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. Except as specified otherwise, when used in this
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Agreement and any Exhibits or Schedules, the following terms shall have the
meanings specified:
"Accounts Receivable" shall mean all accounts receivable, loans receivable
and other receivables of ETV existing as of the close of business on the Closing
Date, as determined in accordance with generally accepted accounting principles,
consistently applied.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"Agreement" shall mean this Exchange Agreement, together with the Schedules
and Exhibits attached hereto, as the same shall be amended from time to time in
accordance with the terms hereof.
"Business" shall mean ETV's business of video production and editing and
the marketing and performance of services in connection with such activities.
"Buyer" shall mean IXL Holdings, Inc., a Delaware corporation.
"Cash" shall mean all cash and cash equivalents of ETV as of the Closing.
"Cash Consideration" shall mean the excess, if any, of SEVENTY THOUSAND
DOLLARS ($70,000) over the Outstanding Liabilities of ETV.
"Class B Common Stock" shall mean the Class B Common Stock, par value $.01
per share, of Buyer, which shall be fully paid and non-assessable upon issuance.
"Closing Date" shall mean: (i) April 30, 1996, or (ii) such other date as
Buyer and Sellers may agree upon in writing. The Closing shall be deemed
effective as of 12:01 A.M. on the Closing Date.
"Closing" shall mean the conference to be held at 10:00 a.m., Atlanta,
Georgia time on the Closing Date at the offices of Xxxxxx & Xxxxxx, a
Professional corporation, One Buckhead Plaza, 0000 Xxxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, or at such other time and place as the parties may
mutually agree to in writing, at which the transactions contemplated by this
Agreement shall be consummated.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contracts" shall mean those agreements under which ETV conducts the
Business or by which its properties are bound, whether written or oral as listed
in Schedule 3.10.
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"ETV" shall mean Entrepreneur Television, Inc., a Georgia corporation.
"ETV Assets" shall mean the right, title and interest of ETV in and to all
assets used or useful in, or material to, the operation of the Business,
including, without limitation, the Accounts Receivable, the Cash, the Equipment,
the Intangible Property, the Licenses, and the Contracts.
"Equipment" shall mean all items of equipment, computers, furniture and
other machinery of ETV.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Environmental Laws" shall mean shall mean all applicable rules and
regulations of federal, state and local laws, including statutes, regulations,
ordinances, codes, rules, as amended, relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the
environment or Hazardous Materials or toxic substances including, but not
limited to, the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976, the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, regulations of the Environmental Protection Agency, the
Toxic Substance Control Act, regulations of the Nuclear Regulatory Agency, and
regulations of any state department of natural resources or state environmental
protection agency now or at any time hereafter in effect.
"Event of Loss" shall mean any loss, taking, condemnation, damage or
destruction of or to any of the ETV Assets.
"Exchange Consideration" shall mean the aggregate consideration to be
received by the Sellers as set forth on Exhibit A, consisting of a total of 300
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shares of Class B Common Stock and the Cash Consideration.
"Exhibits" shall mean those Exhibits referred to in this Section 1.1 and
attached to this Agreement and which are hereby incorporated herein and made a
part hereof.
"Financial Statements" shall mean the financial statements of ETV described
in Section 3.14.
"Intangible Property" shall mean all the copyrights, trademarks, patents,
trade secrets and all other intellectual property of every type, whether
registered with any governmental agency or not so registered, owned or applied
for by ETV or any Seller on behalf of ETV.
"Knowledge of Sellers" shall mean the actual knowledge of Xxxxx X. Xxxxx,
R. Xxx Xxxxxxxx, III, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxxx and Xxxx Xxxx, or such
knowledge as would have been acquired by such persons upon a reasonable
investigation of ETV and its Business.
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"Licenses" shall mean those licenses, permits and authorizations issued
by any federal, state or local governmental or regulatory authority or agency
for the operation of ETV and its Business.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, claim, lien, lease or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
affecting any assets or property, including any agreement to give or grant any
of the foregoing, any conditional sale or other title retention agreement and
the filing of or agreement to give any financing statement with respect to any
assets or property under the Uniform Commercial Code or comparable law of any
jurisdiction.
"Outstanding Liabilities" shall mean all liabilities of ETV as shown on the
balance sheets as of March 31, 1996, determined in accordance with generally
accepted accounting principles.
"Permitted Liens" shall mean the following Liens: (a) Liens existing on the
Closing Date to remain on the ETV Assets as listed on Schedule 3.15(a); (b)
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Liens for taxes, assessments or other governmental charges or levies not yet
due; (c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business of ETV consistent with past practices for amounts not yet
due; (d) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business of ETV consistent with past practices in
connection with worker's compensation, unemployment insurance or other types of
social security; and (e) minor defects of title, easements, rights-of-way,
restrictions and other similar charges or encumbrances not materially detracting
from the value of the ETV Assets or interfering with the ordinary conduct of the
Business.
"Person" shall mean any natural person, general or limited partnership,
corporation, limited liability company, association or other entity.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement to be entered into by Sellers, Buyer and certain stockholders of Buyer
at Closing substantially in the form attached hereto as Exhibit B.
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"Schedules" shall mean those schedules referred to in this Agreement which
have been delivered concurrently with the execution of this Agreement, which are
hereby incorporated herein and made a part hereof.
"Section" or "Sections" shall mean any or all sections of this Agreement.
"Seller and Sellers" shall mean, individually or collectively, as the
context may require, Xxxxx X. Xxxxx, R. Xxx Xxxxxxxx, III, Xxxxx X. Xxxxx, Xxxxx
X. Xxxxxxxxxx and Xxxx Xxxx.
"Sellers' Certificate" shall mean the certificate of the Sellers in the
form of Exhibit D attached hereto.
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"Stock" shall mean the issued and outstanding shares of Common Stock, par
value $1.00 per share, of ETV held by the Sellers.
"Stockholders Agreement" shall mean the Stockholders Agreement to be
entered into by Sellers and Buyer at the Closing substantially in the form
attached hereto as Exhibit C.
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1.2 Singular/Plural; Gender. Where the context so requires or permits, the
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use of the singular form includes the plural, and the use of the plural form
includes the singular, and the use of any gender includes any and all genders.
ARTICLE II
THE EXCHANGE
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2.1 Exchange. At the Closing on the Closing Date, on the terms and
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subject to the conditions of this Agreement, each Seller shall sell, transfer
and deliver to Buyer, and Buyer shall purchase from such Seller, the Stock set
forth opposite such Seller's name on Exhibit A for the Exchange Consideration
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set forth opposite such Seller's name on Exhibit A, consisting of the aggregate
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number of shares of Class B Common Stock and the amount of Cash Consideration
set forth opposite such Seller's name on Exhibit A.
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2.2 Payment on Closing. At the Closing on the Closing Date, Buyer shall
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pay Sellers an amount equal to the Cash Consideration, by wire transfer of
immediately available funds or other form of agreed upon payment in the amounts
set forth on Exhibit A hereto.
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2.3 Closing Date Deliveries. At the Closing on the Closing Date:
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(a) Each Seller shall deliver, or cause to be delivered, to Buyer
properly executed and dated as of the Closing Date, where applicable: (i) stock
certificates representing all outstanding Stock owned by such Seller accompanied
by stock powers duly endorsed to Buyer in each case in proper form for transfer;
(ii) the resignation of those members of the Board of Directors of ETV as shall
be designated by Buyer; (iii) the stock books, stock ledgers, minute books,
corporate seals and all other corporate records of ETV; (iv) the Sellers'
Certificate; (v) the Stockholders' Agreement; (vi) the Registration Rights
Agreement; and (vii) such other documents as provided in Article VI hereof.
(b) In addition to the Cash Consideration described in Section 2.2,
Buyer shall deliver, or cause to be delivered to Sellers, executed and dated as
of the Closing Date, where applicable (i) the Stockholders' Agreement; (ii) the
Registration Rights Agreement; and (iii) stock certificates representing the
Class B Common Stock to be issued to each of the Sellers as set forth on Exhibit
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A.
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2.4 Risk of Loss. The risk of all Events of Loss prior to the Closing
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shall be upon Sellers and the risk of all Events of Loss at or subsequent to the
Closing shall be upon Buyer.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Xxxxx Xxxxx and R. Xxx Xxxxxxxx, III jointly and severally represent and
warrant to Buyer and Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxxx and Xxxx Xxxx severally
represent and warrant to Buyer (which representations and warranties shall
survive the Closing) as follows:
3.1 Corporate Organization. ETV is a corporation duly organized, validly
----------------------
existing and in good standing under the laws of the State of Georgia. ETV has
the power to own or lease its properties and to carry on its business in the
place where such properties are now owned, leased or operated and such business
is now conducted. ETV is duly qualified and licensed and in good standing as a
foreign corporation in each jurisdiction set forth in Schedule 3.1, constituting
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each jurisdiction in which such qualification is required. Copies of the
articles of incorporation and all amendments thereto, the bylaws as amended and
currently in force, stock records and corporate minutes of ETV have been
delivered to Buyer, and are true, complete and correct as of the date hereof.
3.2 ETV Stock. ETV has authorized capital stock consisting of 10,000
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shares of Common Stock, $1.00 par value per share, of which only 795 shares of
such Stock are issued and outstanding. All shares of Stock issued and
outstanding are owned of record and beneficially by Sellers as set forth on
Exhibit A. All of the issued and outstanding Stock is duly authorized and
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validly issued, fully paid and nonassessable, and there are no preemptive rights
in respect thereof. Except as set forth on Schedule 3.2, there are no
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outstanding options, warrants or other rights to subscribe for or purchase from
ETV or the Sellers, no contracts or commitments providing for the issuance of,
or the granting of rights to acquire, and no securities convertible into or
exchangeable for, any Stock or other capital stock or any other ownership
interest of ETV.
3.3 Subsidiaries. ETV does not own capital stock or other ownership
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interests in any corporation, partnership or other entity. There are no
outstanding contractual obligations of ETV to acquire any outstanding shares of
capital stock or other ownership interests of any corporation, partnership or
other entity. ETV does not have any investment (either debt or equity), or
commitments to make any such investment, in any corporation, joint venture,
general or limited partnership, business enterprise or other Person.
3.4 Title to Stock. Sellers have legal and beneficial title to the Stock
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free and clear of any Liens (other than restrictions imposed by applicable state
and federal securities laws), and there are no claims pending with respect to
the title of Sellers in the Stock.
3.5 Seller Investment Representations. Each Seller represents and
---------------------------------
warrants as follows:
(a) Private Offering. Neither such Seller nor anyone acting on such
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Seller's behalf has issued, sold or offered any security of ETV to any Person
under circumstances that
6
would cause the consummation of the Exchange, as contemplated by this Agreement,
to be subject to the registration requirements of the Act. Neither such Seller
nor anyone acting on such Seller's behalf has offered or will offer the Stock or
any part thereof or any similar securities for sale to, or solicit any offer to
acquire any of the same from, any Person so as to make the consummation of the
Exchange subject to the registration requirements of the Act.
(b) Investment Intentions and Restrictions on Disposition. Such Seller
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is acquiring the Class B Common Stock solely for such Seller's own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof. Such Seller agrees that such Seller will not, directly or
indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of
any of the shares of Class B Common Stock (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of any of the Class B Common
Stock) except in compliance with the Act, and Stockholders' Agreement. Such
Seller further understands, acknowledges and agrees that none of the Class B
Common Stock may be transferred, sold, pledged, hypothecated or otherwise
disposed of (i) unless the provisions of the Stockholders' Agreement shall have
been complied with and (ii) unless such disposition is pursuant to an effective
registration statement under the Act and is exempt from (or in compliance with)
applicable state securities laws, or is exempt from the provisions of Section 5
of the Act and is exempt from (or in compliance with) applicable state
securities laws.
(c) Restrictions on Transfer. Such Seller acknowledges receipt of
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advice that (i) the shares of Class B Common Stock have not been registered
under the Act, (ii) the Class B Common Stock must be held indefinitely and such
Seller must continue to bear the economic risk of the investment in the Class B
Common Stock unless shares of such Class B Common Stock are subsequently
registered under the Act or an exemption from such registration is available,
(iii) there may not be any public market for the Class B Common Stock in the
foreseeable future, (iv) Rule 144 promulgated under the Act is not presently
available with respect to sales of any securities of Buyer and Buyer has made no
covenant to make such Rule available and such Rule is not anticipated to be
available in the foreseeable future, (v) when and if the Class B Common Stock
may be disposed of without registration in reliance upon Rule 144, such
disposition can be made only in limited amounts and in accordance with the terms
and conditions of such Rule, (vi) if the exemption afforded by Rule 144 is not
available, public sale without registration will require the availability of an
exemption under the Act, (vii) restrictive legends in the form set forth in the
Stockholders' Agreement shall be placed on the certificates representing the
Class B Common Stock and (viii) a notation shall be made in the appropriate
records of Buyer indicating that the shares of Class B Common Stock are subject
to restrictions on transfer pursuant to the Stockholders' Agreement and, if
Buyer should in the future engage the services of a stock transfer agent,
appropriate stop-transfer instructions will be issued to such transfer agent
with respect to the Stock.
(d) Risk of Investing in Buyer; Ability to Bear Risk. Such Seller
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represents and warrants that (i) the financial situation of such Seller is such
that Seller can afford to bear the economic risk of holding the Class B Common
Stock for an indefinite period and (ii) such Seller can afford to suffer the
complete loss of his investment in the Class B Common Stock. Such Seller
understands and acknowledges that the shares of Class B Common Stock received
7
by such Seller hereunder represent an investment by Seller in Buyer and
recognizes that (w) such investment in Buyer is subject to substantial
uncertainty concerning the business prospects of Buyer and that Buyer's
businesses face rapid technological change which could result in greater
competition for Buyer or cause Buyer to lower the prices of its products or
services; (x) Buyer intends to pursue acquisitions of software development
businesses, software service businesses, multimedia businesses and other
businesses as a component of its growth strategy and that the success of Buyer
will depend on Buyer's ability to identify, acquire and finance suitable
acquisition candidates on acceptable terms and to integrate such acquisitions
effectively into Buyer; (y) after the Exchange, Buyer will be controlled by KIA
V as a result of KIA V's ownership of more than 80% of the voting stock of Buyer
following the Stock Purchase, and that KIA V will be able to determine the
outcome of all matters required to be submitted to stockholders of Buyer for
approval (except as otherwise provided by law or by Buyer's Certificate of
Incorporation or Bylaws or the Stockholders' Agreement); and (z) Sellers'
aggregate ownership of Buyer immediately following the Exchange will likely be
subject to dilution upon exercise of stock options to be granted to certain
officers and directors of Buyer and the possible issuance from time to time of
additional shares of capital stock of Buyer and warrants to acquire stock of
Buyer to existing and future investors of Buyer.
(e) Access to Information; Sophistication. Such Seller has been
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granted the opportunity to ask questions of, and receive answers from,
representatives of Buyer concerning the terms and conditions of the purchase of
the Class B Common Stock and to obtain any additional information that Seller
deems necessary. Such Seller's knowledge and experience in financial business
matters is such that Seller is capable of evaluating the merits and risk of the
investment in the Class B Common Stock and such Seller has carefully reviewed
the terms and provisions of the Stockholders' Agreement and has evaluated the
restrictions and obligations contained therein.
(f) Knowledge Concerning IXL, CVI and CVL. Such Seller is familiar
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with the businesses and operations of each of IXL, CVI and CVL and understands
and acknowledges that, after the IXL Exchange, CVI Exchange and CVL Exchange, a
significant portion of the business of Buyer will be comprised of the businesses
and operations of IXL, CVI and CVL. Such Seller has been granted the opportunity
to ask questions of, and receive answers from, representatives of Buyer
concerning the business, operations and financial results of each of IXL, CVI
and CVL and to obtain any additional information that Seller deems necessary.
Such Seller's knowledge and experience in financial business matters is such
that Seller is capable of evaluating the merits and risk of the investment in
the Class B Common Stock in view of the IXL Exchange, CVI Exchange and the CVL
Exchange and has evaluated the effect of such transactions on such Seller's
purchase of the Class B Common Stock of Buyer hereunder.
(g) Due Execution and Delivery. Such Seller (i) has duly executed and
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delivered this Agreement, (ii) this Agreement constitutes and, upon execution
thereof, the Stockholders' Agreement will constitute Seller's legal, valid and
binding obligations, enforceable against such Seller in accordance with their
respective terms, (iii) no consent, approval, authorization, order, filing,
registration or qualification of or with any court, governmental authority or
third person is required to be obtained by such Seller in connection with the
8
execution and delivery of this Agreement or the Stockholders' Agreement or the
performance of such Seller's obligations hereunder or thereunder and (iv) such
Seller is a resident of the state of Georgia.
(h) Accredited Investor. Such Seller is an "accredited investor" as
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such term is defined in Rule 501(a) promulgated under the Act, a copy of such
definition being attached to this Agreement.
3.6 Absence of Conflicting Agreements. Except as set forth in Schedule
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3.6, neither the execution, delivery or performance of this Agreement by Sellers
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nor the consummation of the sale and purchase of the Stock does or will, after
the giving of notice, or the lapse of time, or otherwise:
(a) conflict with, result in a breach of, or constitute a default
under, the articles of incorporation or bylaws of ETV, any federal, state or
local law, statute, ordinance, rule or regulation, or any court or
administrative order or process or any contract, agreement, arrangement,
commitment or plan to which Sellers or ETV are a party or by which Sellers or
ETV or its property are bound and which relates to the ownership or operation of
the Business, ETV Assets, or the Stock, including without limitation any
stockholders' or buy-sell agreement;
(b) result in the creation of any Lien upon the Stock or any of the
ETV Assets;
(c) terminate, amend or modify, or give any party the right to
terminate, amend, modify, abandon or refuse to perform, any contract, agreement,
arrangement, commitment or plan to which ETV is a party;
(d) accelerate or modify, or give any party the right to accelerate or
modify, the time within which, or the terms under which, any duties or
obligations are to be performed, or any rights or benefits are to be received,
under any contract, agreement, arrangement, commitment or plan to which ETV is a
party; or
(e) require the consent, waiver, approval, permit, license, clearance
or authorization of, or any declaration or filing with, any court or public
agency or other authority, or the consent of any Person under any agreement,
arrangement or commitment of any nature which Sellers or ETV are a party to or
bound or by or which the ETV Assets are bound or subject.
3.7 Title to ETV Assets; Liens and Encumbrances. Except as set forth on
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Schedule 3.7, and except for Permitted Liens, ETV owns good and marketable title
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to or has valid and enforceable leasehold interests in all of the ETV Assets
free and clear of any and all Liens.
3.8 ETV Assets. The ETV Assets include all of the assets, properties and
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rights of every type and description, personal and mixed, tangible and
intangible, that are necessary for, used or useable in the conduct of the
Business in the manner in which the Business has been and
9
is now conducted. ETV neither owns nor holds any interest in real property,
whether by lease or otherwise.
3.9 Equipment. Except as set forth in Schedule 3.9:
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(a) each material item of Equipment is in good condition and repair,
ordinary wear and tear excepted and is fit for operation in its intended use;
(b) the Equipment includes all material items of tangible personal
property utilized by ETV in connection with owning and operating the Business;
(c) none of the material items of Equipment or other assets owned,
used or operated by ETV in connection with the Business, or the ownership,
leasing or operation thereof, is in violation of any law, ordinance, code, rule
or regulation, the violation of which would have a material adverse impact on
the Business, and no written notice from any governmental authority or other
Person has been served upon or given to Sellers or ETV claiming any violation of
any such law, ordinance, code, rule or regulation, or requiring or calling
attention to the need for any repair, modification, replacement, installation or
other work on or in connection with such Equipment or assets; and
(d) the list of Equipment on Schedule 3.9 is a true and correct list
------------
of all material items of tangible personal property necessary for or used in the
operation of the Business in the manner in which it has been and is now
operated.
3.10 Contracts. Except as set forth in Schedule 3.10:
--------- -------------
(a) ETV has performed each term, covenant and condition of each of
the Contracts, and no event of default, or event which with the passing of time
or giving of notice would constitute a material default, exists under any of the
Contracts;
(b) the Contracts described in Schedule 3.10 constitute all of the
-------------
agreements relating to properties, undertakings or commitments to or from third
parties in the conduct of the Business other than each contract which is
cancelable by ETV without breach or penalty on not more than thirty (30) days
notice and which involves average annual payments or receipts by ETV of less
than $500 in the case of any single contract and $2,500 in the aggregate;
(c) each of the Contracts is in full force and effect, unimpaired by
any acts or omissions of ETV or its officers, and constitutes the legal and
binding obligation of the parties thereto in accordance with its terms;
(d) Sellers have furnished true and complete copies of all Contracts,
including all amendments, modifications and supplements thereto, and Schedule
--------
3.10 contains summaries of the provisions of all oral contracts; and
----
10
(e) No consent, approval or waiver from any Person is required in
connection with the transactions contemplated by this Agreement.
3.11 Intangible Property. Except as set forth on Schedule 3.11:
------------------- -------------
(a) none of the Intangible Property infringes any proprietary right
of any Person and there are no claims, demands or proceedings instituted,
pending or threatened by any third party pertaining to or challenging ETV's
right to use any of the Intangible Property;
(b) there are no facts which would render any of the Intangible
Property invalid or unenforceable;
(c) there is no trademark, trade name, patent or copyright owned by a
third party which ETV is using without license to do so and there is no
Intangible Property owned by a third party that ETV is using without a license
to do so;
(d) the Intangible Property constitutes all the copyrights, patents,
trade secrets, trademarks, and other intellectual property utilized by ETV in
connection with owning and operating the Business; and
(e) Schedule 3.11 contains a true and complete list of all Intangible
-------------
Property and all agreements pursuant to which ETV licensed or authorized others
to use the Intangible Property.
3.12 Financial Statements.
--------------------
(a) Attached as Schedule 3.12(a) are true and complete copies of the
---------------
unaudited financial statements of ETV, as of December 31, 1991, December 31,
1992, December 31, 1993, December 31, 1994 and December 31, 1995, and the
related statements of income, for the fiscal years then ended (the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
preceding years and present fairly the financial condition of ETV as at the date
indicated and the results of its operations for the periods then ended, except
for the absence of footnotes.
(b) Attached as Schedule 3.12(b) are true and complete copies of the
-----------------
unaudited financial statements of ETV, as of March 31, 1996 and the related
statements of income, and changes in cash flows for the period then ended (the
"Interim Financial Statements"). The Interim Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with the Financial Statements and present fairly the
financial condition of ETV as at the date indicated and the results of its
operations for the periods then ended; subject, however, to year-end adjustments
-------- -------
which, in the aggregate, are not adverse and except for the absence of
footnotes.
11
3.13 Absence of Undisclosed Liabilities.
----------------------------------
(a) ETV has no debt, liability or obligation of any kind, whether
accrued, absolute, contingent or otherwise, including, without limitation, any
liability or obligation on account of taxes or any governmental charges or
penalty, interest or fines, required to be reflected in its financial statements
in accordance with generally accepted accounting principles which would have, or
which in the case of contingent or inchoate liabilities, would have if accrued
or absolute, an adverse effect on the financial condition of ETV, except (i)
those liabilities reflected in the Financial Statements and Interim Financial
Statements, (ii) liabilities disclosed in Schedule 3.13(a), (iii) liabilities
----------------
incurred in the ordinary course of business (other than contingent liabilities)
since March 31, 1996, none of which has, individually or in the aggregate,
adversely affected the business, assets, results of operations or financial
condition of ETV and (iv) liabilities incurred in connection with the
transactions provided for in this Agreement.
(b) Except as set forth on Schedule 3.13(b), ETV has not, by written
----------------
instrument or otherwise, guaranteed the payment or collection or pledged any of
its assets to secure payment of any unsatisfied indebtedness of any Person.
Schedule 3.13 sets forth all indebtedness of ETV to Sellers.
-------------
3.14 No Adverse Change. Except as set forth on Schedule 3.14, since March
----------------- -------------
31, 1996, there has been no:
(a) material adverse change in the financial condition or results of
operations of the Business;
(b) declaration, setting aside or payment, directly or indirectly, of
any cash or noncash dividend or other cash or noncash distribution in respect of
any of the securities of ETV or any direct or indirect redemption, purchase or
other acquisition of any securities of ETV or agreement to do so;
(c) damage, destruction or loss, whether or not covered by insurance,
adversely affecting the business or properties of ETV;
(d) increase in compensation payable or to become payable to any of
the officers, directors or employees of ETV or in any bonus payment or
arrangement made with any such person, or any change in personnel policies or
benefits except pursuant to existing compensation and fringe benefit plans,
practice and arrangements;
(e) contract, commitment or transaction entered into or consummated
by ETV except in the ordinary course of business;
(f) sale, assignment, lease or other transfer or disposition of any
of the assets or properties of ETV except in the ordinary course of business or
in connection with the acquisition of similar property or assets in the ordinary
course of business;
12
(g) extraordinary losses (whether or not covered by insurance) or
waiver by ETV of any extraordinary rights of value;
(h) notice from any customer as to the customer's intention not to
conduct business with ETV, the result of which loss or losses of business,
individually or in the aggregate, has had, or could reasonably be expected to
have, a material adverse effect on the Business; or
(i) other event or condition of any character, that has or might
reasonably have a material adverse effect on ETV's financial condition or
assets.
3.15 No Litigation; Labor Disputes; Compliance with Law. Except as set
--------------------------------------------------
forth on Schedule 3.15:
-------------
(a) there is no decree, judgment, order or litigation at law or in
equity, no arbitration proceeding, and no proceeding before or by any
commission, agency or other administrative or regulatory body or authority,
pending or, to the Knowledge of Sellers, threatened, to which ETV is a party or
to which ETV or the ETV Assets are subject;
(b) ETV is not subject to or bound by any labor agreement, there is
no labor dispute, grievance, controversy, strike or request for union
representation pending or, to the Knowledge of Sellers, threatened against ETV,
and there has been no occurrence of any event which would give rise to any such
strike, request for union representation or other labor dispute, grievance or
controversy; and
(c) To the Knowledge of Sellers, ETV owns and operates, and has owned
and operated, its properties and assets, and carried on and conducted, and has
carried on and conducted, the Business in substantial compliance with all
federal, state and local laws, statutes, ordinances, rules and regulations, and
any court or administrative order or process, including, without limitation,
Occupational Safety and Health Administration, Equal Employment Opportunity
Commission, National Labor Relations Board and Environmental Laws.
3.16 Tax Returns and Tax Reports.
---------------------------
(a) Except as set forth on Schedule 3.16, all federal, state and
-------------
local tax returns and tax reports required to be filed by ETV have been filed
with the appropriate governmental agencies in all jurisdictions in which such
returns and reports are required to be filed, and ETV has not requested any
extension of time within which to file any such returns or reports which have
not been filed within such extension of time. All federal, state and local
income, profits, franchise, withholding and sales, use, occupation, property,
excise and other taxes (including interest and penalties) due from ETV in
accordance with such returns and reports have been fully paid. Each item
reflected on each of ETV's federal tax returns is complete, accurate and correct
in all respects.
13
(b) Except as set forth on Schedule 3.16: (i) no issues have been
-------------
asserted by the Internal Revenue Service or any other taxing authority in
connection with an examination of any of the returns and reports referred to in
Section 3.16(a) which might, if determined adversely to ETV, materially
adversely affect the financial condition or business of ETV; and (ii) no waivers
of statutes of limitation with respect to taxes have been given with respect to
ETV. The federal income tax returns and information reports of ETV have been
examined by the Internal Revenue Service for the period or periods set forth in
Schedule 3.16, which lists all revenue agent reports issued in connection with
-------------
audits of ETV. All deficiencies asserted or assessments made as a result of
examinations by the Internal Revenue Service or by appropriate state tax
authorities have been fully paid or adequately reflected on either the Financial
Statements, the Interim Financial Statements or on Schedule 3.16.
-------------
(c) Schedule 3.16 accurately reflects all currently proposed
-------------
adjustments to the taxable income of ETV for the years ended December 31, 1991
through December 31, 1995.
(d) ETV is not a party to or bound by, and has no obligation under,
any tax sharing or similar agreement, except for obligations provided by law
arising out of the filing of a consolidated federal income tax return or any
consolidated, unitary or combined state or local tax return or report of ETV.
(e) ETV has not consented and will not consent to have the provisions
of Section 341(f)(2) of the Code (or equivalent state law provisions) apply to
it and ETV has not agreed to, and has not been requested to make, any adjustment
under Section 481(c) of the Code by reason of a change in accounting method or
otherwise.
3.17 Governmental Authorizations. Except as set forth in Schedule 3.17,
--------------------------- -------------
no qualifications, registrations, filings, privileges, franchises, licenses,
permits, approvals or authorizations other than the Licenses are required in
order for ETV to own and operate the Business in the manner operated on the date
hereof. All Licenses are currently in full force and effect. As of the date
hereof, no action or proceeding is pending or, to the Knowledge of Sellers,
threatened before any governmental authority to revoke, refuse to renew or
modify such Licenses or other authorizations of the Business.
3.18 Compliance with Governmental Requirements. The Business, its
-----------------------------------------
physical facilities and electrical and mechanical systems are being and have
been operated in all respects in accordance with the specifications of the
applicable Licenses and with each document submitted in support of such
Licenses, and the Business is in compliance with all requirements, rules and
regulations of all governmental authorities, including without limitation, the
United States Occupational Safety and Health Administration. Except as set forth
in Schedule 3.18 and to the Knowledge of Sellers, all obligations, reports and
-------------
other filings required by all governmental authorities, including without
limitation, the United States Occupational Safety and Health Administration,
with respect to the Business have been duly and currently filed as of the date
hereof. There is currently pending no proceeding or complaint before any
governmental authority relating to the Business.
14
3.19 Banks; Powers of Attorney. Schedule 3.19 lists the names of each bank
-------------------------
in which ETV has an account or safe deposit box and the names of all Persons
authorized to draw thereon or to have access thereto and the names of all
Persons holding powers of attorney from ETV, and a summary statement of the
terms thereof.
3.20 Employees. Schedule 3.20 is a true and complete list of the names and
--------- -------------
current annual salary rates or hourly wage rates of all employees of ETV, which
list includes for each such Person the amounts paid or payable as salary or
wages and describes any other future compensation arrangements for employees.
3.21 Employee Welfare Plans.
----------------------
(a) Except as set forth on Schedule 3.21, ETV has not at any time
-------------
maintained or been a party to or made contributions to any of the following: any
"employee pension benefit plan", (as such term is defined in Section 3(2) of
ERISA); or any "employee welfare benefit plan" (as such term is defined in
Section 3(1) of ERISA), whether written or oral. All employee benefit plans
maintained by ETV or to which ETV is obligated to contribute, are, and have in
the past been, in all respects maintained, funded and administered in compliance
with ERISA, and other applicable law; no such plan subject to Title IV of ERISA
has been terminated; no proceedings to terminate any such plan have been
instituted under Subtitle C of Title IV of ERISA; no reportable event within the
meaning of Section 4043 of Subtitle C of ERISA has occurred for any such plan
maintained by ETV; ETV has not withdrawn from a multi-employer plan (as defined
in Section 4001(a) of ERISA); the consummation of the transactions contemplated
hereby will not result in any withdrawal liability on the part of ETV under a
multi-employer plan; no benefit plan established or maintained by ETV or to
which ETV is obligated to contribute, has any accumulated funding deficiency (as
defined in ERISA); and ETV has not incurred any liability to the Pension Benefit
Guaranty Corporation with respect to any such plan.
(b) ETV has no formal or informal employee severance policy. Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, bonus, unemployment compensation or golden
parachute) becoming due to any director, officer or other employee of the
Company, (ii) increase any benefits otherwise payable under any ETV benefit plan
or (iii) result in the acceleration of the time of payment or vesting of any
such benefits.
3.22 Environmental Compliance.
------------------------
(a) ETV is not a party to any litigation or administrative
proceeding or, to the Knowledge of Sellers, is any litigation or administrative
proceeding threatened against it, which in either case (i) asserts or alleges
that ETV violated any Environmental Laws, (ii) asserts or alleges that ETV is
required to clean up, remove or take remedial or other response action due to
the disposal, depositing, discharge, leaking or other release of any hazardous
or toxic substances or materials or (iii) asserts or alleges that ETV is
required to pay all or a portion of the cost of any past, present or future
cleanup, removal or remedial or other response action
15
which arises out of or is related to the disposal, depositing, discharge,
leaking or other release of any hazardous or toxic substances or materials by
ETV.
(b) No Person has caused or permitted materials to be stored,
deposited, treated, recycled or disposed of on, under or at any real property
owned, leased, used or occupied by ETV which materials, if known to be present,
would require cleanup, removal or some other remedial action under any
Environmental Laws.
(c) There are not now, nor have there previously been, tanks or
other facilities on, under, or at any real property owned, leased, used or
occupied by ETV which contained materials which, if known to be present in soils
or ground water, would require cleanup, removal or some other remedial action
under Environmental Laws.
(d) There are no conditions existing currently which would subject
ETV or Sellers to damages, penalties, injunctive relief or cleanup costs under
any Environmental Laws or which require or are likely to require cleanup,
removal, remedial action or other response pursuant to Environmental Laws by
ETV.
(e) ETV is not subject to any judgment, order or citation related to
or arising out of any Environmental Laws and has not been named or listed as a
potentially responsible party by any governmental body or agency in a matter
related to or arising out of any Environmental Laws.
3.23 Customer Relations. No communications have been made to ETV or
------------------
Sellers which would indicate that (a) any current customer of the Business which
accounted for more than 5% of its total net sales for the calendar year ending
December 31, 1995, or (b) any current supplier of the Business (if such
suppliers could not be replaced by the Sellers at comparable cost), will
terminate or substantially alter its business relations or the amount of
business with ETV.
3.24 Representation as of the Closing Date. Sellers' representations and
-------------------- ----------------
warranties set forth in this Agreement shall be true and correct on and as of
the Closing Date, as though such representations and warranties were made on and
as of such time.
3.25 Affiliate Transactions. Except as set forth on Schedule 3.25, none of
---------------------- -------------
the Sellers nor any of their respective family members or affiliates has any
agreement, contract or other arrangement with ETV. Each Seller hereby releases,
waives and discharges any and all claims such Seller may have, whether fixed or
contingent, known or unknown, against any of ETV, Buyer or Xxxxx Communications,
Inc., or any of their affiliates, respective officers, directors, employees,
agents or representatives arising out of any events occurring or facts existing
on or prior to the date hereof, except for rights under this Agreement and the
transaction documents contemplated hereby. Such Seller has not assigned any such
claims to any third party.
3.26 Disclosure. No statement of fact by Sellers contained in this
----------
Agreement and no written statement of fact furnished by Sellers to Buyer
pursuant to this Agreement contains any
16
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements herein or therein contained not misleading.
3.27 Reliance on Representations and Warranties of Buyer. Sellers
---------------------------------------------------
understand and acknowledge that the representations and warranties of Buyer
contained in Article IV of this Agreement are the exclusive representations of
Buyer with respect to the subject matter hereof and the transactions
contemplated herein. With respect to the subject matter hereof and the
transactions contemplated herein, each Seller represents and warrants that (i)
no representation or warranty, express or implied, whether written or oral, as
to the financial condition, results of operations, prospects, properties or
business of Buyer or as to the desirability or value of an investment in Buyer
has been made to such Seller by or on behalf of Buyer other than those set forth
in Article IV hereof and the Stockholders Agreement, (ii) such Seller has relied
upon such Seller's own independent appraisal and investigation, and the advice
of such Seller's own counsel, tax advisors and other advisors, regarding the
risks of an investment in Buyer, and (iii) such Purchaser will continue to bear
sole responsibility for making his or her own independent evaluation and
monitoring of the risks of its investment in Buyer. Sellers acknowledge and
agree that all transactions contemplated herein between Sellers and Buyer, and
any other stockholders of Buyer, are arms-length transactions and that there is
no special relationship of trust, fiduciary relationship or other relationship
between Sellers and Buyer or any other stockholders of Buyer except as expressly
set forth herein or the documents executed in connection with the transactions
contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization. Buyer is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of the State of Delaware and on the
Closing Date Buyer will be duly qualified to do business as a foreign
corporation in Georgia, and Buyer has full corporate power to purchase the Stock
pursuant to this Agreement.
4.2 Authorization; Enforceability. The execution, delivery and
-----------------------------
performance of this Agreement and all of the documents and instruments required
hereby Buyer and the consummation by Buyer of the transactions contemplated
hereby and thereby, are within the corporate power of Buyer and have been duly
authorized by all necessary corporate action by Buyer. This Agreement is, and
the other documents and instruments required hereby will be, when executed and
delivered by Buyer the valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, subject only to
bankruptcy, insolvency, reorganization, moratoriums or similar laws at the time
in effect affecting the enforceability or right of creditors generally and by
general equitable principles which may limit the right to obtain equitable
remedies.
17
4.3 Absence of Conflicting Agreements. Except as set forth on Schedule
--------------------------------- --------
4.3, neither the execution, delivery or performance of this Agreement by Buyer
---
nor the consummation of the sale and purchase of the Stock or any other
transaction contemplated by this Agreement, does or will, after the giving of
notice, or the lapse of time, or otherwise:
(a) conflict with, result in a breach of, or constitute a default
under, the certificate of incorporation or bylaws of Buyer, or any material
federal, state or local law, statute, ordinance, rule or regulations applicable
to Buyer, or any court or administrative order or process, or any material
contract, agreement, arrangement, commitment or plan to which Buyer is a party
or by which Buyer or its assets is bound;
(b) require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
governmental or public agency; or
(c) require the consent of any Person under any material agreement,
material arrangement or material commitment of any nature which Buyer is a party
to or bound by.
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
5.1 Compliance with Agreement. Sellers shall have performed and complied
-------------------------
in all material respects with all of their respective obligations under this
Agreement which are to be performed or complied with by it prior to or at the
Closing.
5.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
----------------------------------------
or other, to be taken by Sellers in connection with the performance of this
Agreement, and all documents incident thereto, shall be complete to the
reasonable satisfaction of Buyer and Buyer's counsel and Sellers shall have made
available to Buyer for examination the originals or true and correct copies of
all documents which Buyer may reasonably request in connection with the
transactions contemplated by this Agreement.
5.3 Representations and Warranties . The representations and warranties
------------------------------
made by Sellers in this Agreement shall be true and correct in the aggregate in
all material respects as of the Closing Date with the same force and effect as
though such representations and warranties had been made on the Closing Date,
except for changes permitted or contemplated by this Agreement.
5.4 Deliveries at Closing. Sellers shall have delivered or caused to be
---------------------
delivered to Buyer the documents, each properly executed and dated as of the
Closing Date as required
18
pursuant to Section 2.3(a), and all other documents required to vest in buyer
good title to the Stock as contemplated by this Agreement.
5.5 Other Documents. Sellers shall have delivered to Buyer such documents
---------------
and certificates of officers of ETV and public officials as shall be reasonably
requested by Buyer's counsel to establish the existence and good standing of
ETV, the due authorization of this Agreement and the transactions contemplated
hereby, and any other aspect in connection with this Agreement.
5.6 Absence of Investigations and Proceedings. No action or proceeding or
-----------------------------------------
formal investigation by any Person or governmental agency shall be pending with
the object of challenging or preventing the Closing and no other proceedings
shall be pending with such object or to collect material damages from Buyer on
account thereof.
5.7 Governmental Consents. All authorizations, consents or approvals of
---------------------
any and all governmental regulatory authorities necessary in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained and be in full force and effect.
5.8 Absence of Liens. On the Closing Date and simultaneously with the
----------------
Closing, there shall not be any Liens on the ETV Assets except for Permitted
Liens.
5.9 No Material Adverse Change. Between the date of this Agreement and
--------------------------
the Closing, there shall have been no material adverse change in the financial
condition, prospects or results of operation of the Business nor any adverse
change in the condition of the ETV Assets, including without limitation a
default under the terms of any of the Contracts or Leases (unless expressly
consented to or waived in writing) which would permit the acceleration of
amounts due thereunder of termination thereof.
5.10 Approvals and Consents. There shall have been secured such
----------------------
permissions, approvals, determinations, consents and waivers to the transactions
contemplated by this Agreement for such agreements set forth on Schedule 5.10.
5.11 Stock Purchase and Exchanges. The Stock Purchase, the CVI Exchange,
----------------------------
the IXL Exchange and the CVL Exchange shall have been consummated prior to or
contemporaneously with the Exchange.
5.12 Amendment to Articles of Incorporation. The Articles of Incorporation
--------------------------------------
of ETV shall have been amended and restated in the form attached hereto as
Exhibit E.
---------
5.13 Bylaws. ETV shall have adopted Amended and Restated Bylaws in the
------
form attached hereto as Exhibit F.
---------
19
If any of the conditions set forth in this Article V have not been
satisfied, Buyer may in its sole discretion nevertheless elect to proceed with
the consummation of the transactions contemplated hereby.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
Each and every obligation of Sellers to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
6.1 Compliance with Agreement. Buyer shall have performed and complied
-------------------------
with all of its obligations under this Agreement which are to be performed or
complied with by it prior to or at the Closing.
6.2 Proceedings and Instruments Satisfactory. All proceedings, corporate
----------------------------------------
or other, to be taken by Buyer in connection with the transactions contemplated
by this Agreement, and all documents incident thereto, shall be complete to the
reasonable satisfaction of Sellers' counsel, and Buyer shall have made available
to Sellers for examination the originals or true and correct copies of all
documents which Sellers may reasonably request in connection with the
transactions contemplated by this Agreement.
6.3 Representations and Warranties. The representations and warranties
------------------------------
made by Buyer shall be true and correct in all material respects as of the
Closing Date with the same force and effect as though such representations and
warranties had been made on the Closing Date.
6.4 Deliveries at Closing. Buyer shall have delivered or caused to be
---------------------
delivered to Sellers the documents, each properly executed and dated as of the
Closing Date required pursuant to Section 2.3(b). Buyer shall also have made the
payments described in Section 2.2.
6.5 Other Documents. Buyer shall have delivered to Sellers such documents
---------------
and certificates of officers of Buyer and of public officials as shall be
reasonably requested by Sellers' counsel to establish the existence and good
standing of Buyer and the due authorization of this Agreement and the
transactions contemplated hereby by Buyer.
6.6 Absence of Investigations and Proceedings. No action or proceeding or
-----------------------------------------
formal investigation by any Person or governmental agency shall be pending with
the object of challenging or preventing the Closing and no other proceedings
shall be pending with such object or to collect damages from ETV or Sellers on
account thereof.
6.7 Governmental Consents. All material authorizations, consents or
------------ --------
approvals of any and all governmental regulatory authorities necessary in
connection with the consummation of the transactions contemplated by this
Agreement shall have been obtained and be in full force and effect.
20
If any of the conditions set forth in this Article VI have not been
satisfied, all of the Sellers may in their sole discretion nevertheless
unanimously elect to proceed with the consummation of the transactions
contemplated hereby.
ARTICLE VII
MISCELLANEOUS
7.1 Further Assurances. From time to time after the Closing Date, upon
------------------
the reasonable request of any party hereto, the other party or parties hereto
shall execute and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and take such further action
as the requesting party may reasonably request in order to effectuate fully the
purposes, terms and conditions of this Agreement.
7.2 Entire Agreement; Amendment; and Waivers. This Agreement and the
----------------------------------------
documents referred to herein and to be delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter hereof,
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision or breach of this Agreement,
whether or not similar, unless otherwise expressly provided. Each of the Sellers
expressly agrees with Buyer that the Sellers may agree to and execute, on behalf
of the Sellers, any and all amendments, supplements, modifications, waivers or
termination of this Agreement.
7.3 Expenses. Except as otherwise specifically provided herein, whether or
--------
not the transactions contemplated by this Agreement are consummated, each of the
parties hereto shall pay the fees and expenses of its respective counsel,
accountants and other experts incident to the negotiation and preparation of
this Agreement and consummation of the transactions contemplated hereby.
7.4 Benefit; Assignment. This Agreement shall be binding upon and inure to
-------------------
the benefit of and shall be enforceable by Buyer and Sellers and their
respective successors and permitted assigns. This Agreement shall not be
assigned by any party without the prior written consent of the other party.
7.5 Notices. All communications or notices required or permitted by this
-------
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an officer of the other party, or
when sent by telecopy or facsimile machine to the number shown below, or when
properly deposited for delivery by commercial overnight delivery service,
prepaid, or by deposit in the United States mail, certified or registered mail,
postage prepaid, return receipt requested, and addressed as follows, unless and
until either of
21
such parties notifies the other in accordance with this Section of a change of
address or change of telecopy number:
If to Buyer: IXL Holdings, Inc.
c/x Xxxxx Communications, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: U. Xxxxxxx Xxxxx, Xx.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxx, a Professional Corporation
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and to: Xxxxx & Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, XX, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Sellers: Creative Video Library, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxx Xxx, Esq.
X.X. Xxx 00000
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
7.6 Counterparts; Headings. This Agreement may be executed in several
----------------------
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
22
7.7 Severability. If any provision, clause or part of this Agreement or
------------
the application thereof under certain circumstances is held invalid, or
unenforceable, the remainder of this Agreement, or the application of such
provision, clause or part under other circumstances, shall not be affected
thereby.
7.8 Investigations; Non-Survival of Warranties. The respective
------------------------------------------
representations and warranties of Sellers and Buyer contained herein or in any
certificate or other documents delivered prior to or at the Closing shall not be
deemed waived or otherwise affected by any investigations made by any party
hereto. Each and every such representation and warranty shall survive for two
(2) years following the Closing, except that the representations and warranties
contained in Sections 3.17 and 3.22 shall survive the Closing until the
applicable statutes of limitation time periods expire with respect to any claims
under such Sections.
7.9 Governing Law. This Agreement shall be construed and interpreted
-------------
according to the laws of the State of Georgia, without regard to the conflict of
law principles thereof. The exclusive venue of adjudication of any dispute or
proceeding arising out of the Agreement or the performance hereof shall be the
courts located in the County of Xxxxxx, State of Georgia, and the parties hereto
hereby consent to and submit to the jurisdiction of any court located in the
County of Xxxxxx, State of Georgia and hereby waives, to the fullest extent
permitted by applicable law, any objection which such party may have to the
laying of venue of any such proceeding brought in such court and any claim that
such proceeding brought in such court has been brought in an inconvenient forum.
EACH OF THE PARTIES WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[Signatures commence on following page]
23
IN WITNESS WHEREOF, the parties have executed this Exchange Agreement as of
the day and year first above written.
BUYER:
-----
IXL HOLDINGS, INC.
By: /s/ U. Xxxxxxx Xxxxx Xx.
----------------------------------------
Name: U. Xxxxxxx Xxxxx Xx.
----------------------------------
Title: CEO
----------------------------------
SELLERS:
-------
/s/ Xxxxx X. Xxxxx
---------------------------------------------
XXXXX X. XXXXX
/s/ R. Xxx Xxxxxxxx, III
---------------------------------------------
R. XXX XXXXXXXX, III
/s/ Xxxxx X. Xxxxx
---------------------------------------------
XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------------
XXXXX X. XXXXXXXXXX
/s/ Xxxx Xxxx
---------------------------------------------
XXXX XXXX
24
IXL Exhibits
------------
A. Exchange Consideration (see attached)............................ Exhibit A
B. Registration Rights Agreement.................................... Exhibit B
C. Stockholders' Agreement.......................................... Exhibit C
X. Xxxxxxx' Certificate............................................. Exhibit D
E. Amended and Restated Bylaws...................................... Exhibit E
EXHIBIT A
---------
OWNERSHIP OF STOCK AND EXCHANGE CONSIDERATION
---------------------------------------------
EXCHANGE CONSIDERATION
----------------------------------
CASH SHARES OF CLASS B
SELLER OWNERSHIP OF STOCK CONSIDERATION* COMMON STOCK
-------------------- ------------------- -------------- -----------------
Xxxxx X. Xxxxx 400 Shares of Stock $ 35,210.00 151
R. Xxx Xxxxxxxx, III 265 Shares of Stock $ 23,310.00 100
Xxxxx X. Xxxxx 50 Shares of Stock $ 4,410.00 19
Xxxxx X. Xxxxxxxxxx 30 Shares of Stock $ 2,660.00 11
Xxxx Xxxx 50 Shares of Stock $ 4,410.00 19
-------------- -----------------
TOTALS $ 70,000.00 300
============== =================
____________________
* Less pro rata share of Outstanding Liabilities and Closing Expenses of
Sellers.
A-1
LIST OF SCHEDULES
Schedule 3.1 Corporate Organization
Schedule 3.2 ETV Stock
Schedule 3.6 Absence of Conflicting Agreements
Schedule 3.7 Title to ETV Assets; Liens and
Encumbrances
Schedule 3.9 Equipment
Schedule 3.10 Contracts
Schedule 3.11 Intangible Property
Schedule 3.12(a) Financial Statements
Schedule 3.12(b) Interim Financial Statements
Schedule 3.13 Indebtedness of ETV to Sellers
Schedule 3.13(a) Absence of Undisclosed Liabilities
Schedule 3.13(b) Permitted Liens
Schedule 3.14 Adverse Change
Schedule 3.15 Litigation; Labor Disputes; Compliance with Law
Schedule 3.16 Tax Returns and Tax Reports
Schedule 3.17 Governmental Authorizations
Schedule 3.18 Compliance with Governmental Requirements
Schedule 3.19 Bank; Powers of Attorney
Schedule 3.20 Employees
Schedule 3.21 Employee Welfare Plans
Schedule 3.25 Affiliate Transactions
Schedule 4.3 Absence of Conflicting Agreements
Schedule 5.10 Approvals and Consents
