\nARTICLE 12 MISCELLANEOUS………………………………………………………………………27<\/p>\n Section 12.1 Notices…………………………………………………………………….27<\/p>\n
Section 12.2 Entire Agreement; Amendment…………………………………………………..29<\/p>\n
Section 12.3 Counterparts………………………………………………………………..29<\/p>\n
Section 12.4 Expenses……………………………………………………………………29<\/p>\n
Section 12.5 Further Assurances…………………………………………………………..29<\/p>\n
Section 12.6 Construction………………………………………………………………..29<\/p>\n
Section 12.7 Joint and Several Obligations…………………………………………………29<\/p>\n
Section 12.8 Governing Law……………………………………………………………….30<\/p>\n
Section 12.9 Cooperation…………………………………………………………………30<\/p>\n
Section 12.10 Severability……………………………………………………………….30<\/p>\n
Section 12.11 Survival…………………………………………………………………..30<\/p>\n
Section 12.12 Headings…………………………………………………………………..30<\/p>\n
<\/c><\/s><\/table>\n
-v-<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (“Agreement”) is made and entered into
\nthis 12th day of May, 1998, by and among InfoSpace, Inc., a Delaware corporation
\n(“InfoSpace”); OutPost Network, Inc., a Washington corporation (“OutPost”), the
\nshareholders of OutPost listed on the signature page for this Agreement (which
\nshareholders are either designated therein as each a “Principal Shareholder” and
\ncollectively, the “Principal Shareholders” or each as a “Recent Investor” and
\ncollectively, the “Recent Investors”), and OutPost Acquisition, Inc., a
\nWashington corporation (“Acquisition”). The term “Shareholder” is used from
\ntime to time herein and refers to any shareholder of OutPost. The term
\n“Principal Shareholder” or “Principal Shareholders” does not refer to or include
\nany Recent Investor.<\/p>\n
RECITALS<\/p>\n
WHEREAS, Acquisition is a recently formed Washington corporation and
\nInfoSpace is the owner of all of the issued and outstanding shares of the common
\nstock of Acquisition;<\/p>\n
WHEREAS, the parties intend that, subject to the terms and conditions
\nhereinafter set forth, Acquisition be merged with and into OutPost pursuant to
\nthis Agreement and the Articles of Merger (the “Articles of Merger”)
\nsubstantially in the form of Exhibit 1A attached hereto (the “Merger”);<\/p>\n
WHEREAS, the Merger is intended to qualify as a tax-free reorganization
\nwithin the meaning of Section 368(a) of the Internal Revenue Code of 1996, as
\namended (the “Code”); and<\/p>\n
WHEREAS, the respective Boards of Directors of InfoSpace, OutPost and
\nAcquisition have approved the Merger pursuant to this Agreement and the Articles
\nof Merger;<\/p>\n
NOW, THEREFORE, in order to consummate the Merger and in consideration of
\nthe mutual representations, warranties and agreements contained herein, the
\nparties hereto agree as follows:<\/p>\n
ARTICLE 1 – TERMS OF MERGER<\/p>\n
SECTION 1.1 THE MERGER<\/p>\n
Subject to the terms and conditions of this Agreement and the laws of the
\nState of Washington, InfoSpace, Acquisition and OutPost shall execute and file,
\namong other things, the Articles of Merger in the Office of the Secretary of
\nState of the State of Washington (the “Washington Secretary of State”) pursuant
\nto which the separate existence of Acquisition shall cease and Acquisition shall
\nbe merged with and into OutPost on the Effective Date (as defined in Section
\n1.2). Acquisition and OutPost are sometimes collectively referred to as the
\n“Constituent Corporations” and OutPost is sometimes referred to as the
\n“Surviving Corporation.”<\/p>\n
SECTION 1.2 EFFECTIVE DATE OF THE MERGER<\/p>\n
The Merger shall become effective on the date the Articles of Merger and
\nany other documents required by the Business Corporation Act of the State of
\nWashington (the “Corporation Law”) shall be duly executed, acknowledged or
\nverified and filed with the Washington Secretary of State in accordance with the
\nCorporation Law (the “Effective Date”). If the Washington Secretary of State
\nrequires any changes in the Articles of Merger as a condition to filing the
\nArticles of Merger, InfoSpace, Acquisition, OutPost and the Principal
\nShareholders will execute necessary revisions incorporating such changes,
\nprovided such changes are not materially inconsistent with or result in any
\nmaterial changes in the terms of this Agreement or the Articles of Merger.<\/p>\n
SECTION 1.3 ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION<\/p>\n
At the Effective Date and without any further action on the part of the
\nConstituent Corporations, the Articles of Incorporation of OutPost, shall be and
\nremain the Articles of Incorporation of the Surviving Corporation. Such
\nArticles of Incorporation may thereafter be altered, amended or repealed in
\naccordance with the provisions thereof or applicable law. As of the date this
\nAgreement is executed, the Restated Articles of Incorporation, as amended, are
\nin effect in the form of Exhibit 1.3A. As of the Effective Date, the Restated
\nArticles of Incorporation, as amended, shall have been further amended as set
\nforth in Exhibit 1.3B. Prior to or as of the Effective Date, no other
\namendments or restatements shall have been made to the Restated Articles of
\nIncorporation as amended, or, except as specifically set forth herein.<\/p>\n
SECTION 1.4 BYLAWS OF THE SURVIVING CORPORATION<\/p>\n
At the Effective Date and without any further action on the part of the
\nConstituent Corporations, the Bylaws of OutPost, a copy of which is attached
\nhereto as Exhibit 1.4, shall be and remain the Bylaws of the Surviving
\nCorporation, until altered, repealed or amended in accordance with the
\nprovisions thereof and applicable law. Prior to or as of the Effective Date, no
\nother amendments or restatements shall have been made to the Bylaws except as
\nspecifically set forth herein.<\/p>\n
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SECTION 1.5 CORPORATE GOVERNANCE<\/p>\n
1.5.1 As of the Effective Date, the directors and officers of OutPost
\nshall have resigned and at the Effective Date, the shareholder of the Surviving
\nCorporation shall elect replacement directors and the new directors shall elect
\nreplacement officers of the Surviving Corporation, each of such persons to hold
\noffice, subject to the applicable provisions of the Articles of Incorporation
\nand Bylaws of the Surviving Corporation, and applicable law.<\/p>\n
1.5.2 As of the Effective Date, InfoSpace shall have amended its
\ncertificate of incorporation to provide for a board consisting of five (5)
\ndirectors, and InfoSpace, Naveen Jain, John Stanton, Theresa E. Gillespie, the
\nStanton Family Trust, Kurt Dahl, John Arnold, Douglas C. Lawrence, Donald
\nGuthrie, Mikal J. Thomsen, Kirlin Partners LLC, The Walter Group, Inc., and
\nDavid Wagner shall have entered into a Voting Agreement in the form of Exhibit
\n1.5.2.<\/p>\n
SECTION 1.6 CONVERSION OF SHARES<\/p>\n
Upon the effectiveness of the Merger, the manner of converting and
\nexchanging the shares of the Constituent Corporations shall be as follows:
\nInfoSpace shall issue a total of not more than 3,000,000 shares of its Common
\nStock, par value $.0001\/share. Each issued and outstanding share of the Common
\nStock of OutPost (the “OutPost Stock”) shall, by virtue of the Merger and
\nwithout any action on the part of the holder thereof, automatically be converted
\ninto a fraction (the “Conversion Ratio”) of one fully paid and nonassessable
\nshare of Common Stock of InfoSpace (“InfoSpace Common”). The Conversion Ratio
\nshall be a fraction with a numerator equal to 3,000,000, and a denominator equal
\nto the total number of shares of OutPost Stock issued and outstanding
\nimmediately prior to the Effective Date. On or after the Effective Date, all
\ncertificates representing shares of OutPost Stock shall be surrendered to the
\nSecretary of the Surviving Corporation, whereupon there shall be issued to the
\nrespective holder of each such certificate a certificate representing the number
\nof shares of InfoSpace Common into which such shares have been converted as
\nprovided herein.<\/p>\n
SECTION 1.7 ACQUISITION COMMON STOCK<\/p>\n
Each share of common stock, no par value, of Acquisition (“Acquisition
\nCommon Stock”) issued and outstanding immediately prior to the Merger shall, by
\nvirtue of the Merger and without any action on the part of the holder thereof,
\nbe automatically converted into and exchangeable for one share of the common
\nstock, no par value, of the Surviving Corporation.<\/p>\n
-3-<\/p>\n
SECTION 1.8 NO FRACTIONAL SHARES<\/p>\n
No fractional share of InfoSpace Common will be issued in the Merger, but,
\nin lieu thereof, each holder of OutPost Stock who would otherwise be entitled to
\na fraction of a share of InfoSpace Common (after aggregating all fractional
\nshares of InfoSpace Common to be received by such holder) will be entitled to
\nreceive an amount of cash (rounded to the nearest whole cent) equal to the
\nproduct of (a) the fraction multiplied by (b) $2.00.<\/p>\n
SECTION 1.9 EXCHANGE OF SHARES; STOCK TRANSFER BOOKS<\/p>\n
On the Effective Date of the Merger, each holder of an outstanding
\ncertificate or certificates theretofore representing shares of OutPost Stock
\nshall be entitled, upon surrender of such certificate or certificates to the
\nSurviving Corporation, to receive in respect of each share represented by such
\ncertificate or certificates, InfoSpace Common in accordance with Section 1.6 and
\nif applicable, cash in accordance with Section 1.8. The cash payment, if any,
\nshall be made by corporate check of InfoSpace made payable to the holder of
\nrecord of OutPost Stock as shown on Schedule 2.3 in respect of which payment is
\nbeing made. At the Effective Date of the Merger there shall be no further
\nregistry of transfers on the records in respect of OutPost Stock outstanding
\nimmediately prior to the Effective Date of the Merger. If any payment is to be
\nmade in the form of a check payable to a name other than that in which the
\ncertificate for OutPost Stock surrendered is registered, or if InfoSpace Common
\nis to be issued in a name other than that in which the certificate for OutPost
\nStock surrendered is registered, it shall be a condition of such distribution
\nthat the certificate so surrendered shall be properly endorsed and otherwise in
\nproper form for transfer and that the person requesting such payment or
\nInfoSpace Common shall pay to the Surviving Corporation any transfer or other
\ntaxes required, or shall establish to the satisfaction of the Surviving
\nCorporation that such taxes have been paid or are not applicable. If, after the
\nEffective Date of the Merger, certificates are presented to the Surviving
\nCorporation, they shall be cancelled and exchanged for such cash payment and
\nInfoSpace Common as provided herein.<\/p>\n
SECTION 1.10 TREASURY AND OTHER STOCK<\/p>\n
All shares of OutPost Stock which are held by OutPost as treasury shares
\n(if any) shall cease to exist as of the Effective Date, without any conversion
\nthereof or exchange with respect thereto.<\/p>\n
SECTION 1.11 EXERCISE OF STOCK RIGHTS<\/p>\n
On the Effective Date, any option, warrant or other right to purchase
\nshares of OutPost Stock (“OutPost Options”), which is outstanding on the
\nEffective Date, shall be cancelled unless exercised prior to the Effective Date.<\/p>\n
-4-<\/p>\n
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF
\n OUTPOST AND PRINCIPAL SHAREHOLDERS<\/p>\n
Each of the Principal Shareholders and OutPost jointly and severally
\nrepresent and warrant to InfoSpace, as follows; provided however that John
\nStanton, Theresa E. Gillespie, the Stanton Family Trust, Kirlin Partners LLC,
\nDouglas C. Lawrence, Donald Guthrie, Mikal J. Thomsen, and The Walter Group,
\nInc. (the “Recent Investors”) make only those representations and warranties set
\nforth in the second sentence of Section 2.3, and in Sections 2.2 and 2.8.2
\nbelow, and such representations and warranties are made severally and not
\njointly by each Recent Investor.<\/p>\n
SECTION 2.1 CORPORATE ORGANIZATION<\/p>\n
OutPost is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Washington; has the corporate power and
\nauthority to own, operate and lease its properties as presently owned, operated
\nand leased and to carry on its business as it is now being conducted. OutPost
\nowns no interest in any corporation, partnership, joint venture or other entity
\nor association.<\/p>\n
SECTION 2.2 BINDING AGREEMENT<\/p>\n
This Agreement, upon due execution by InfoSpace and the other parties
\nhereto, will constitute the legal, valid and binding obligations of OutPost, the
\nPrincipal Shareholders, and the Recent Investors, enforceable in accordance with
\nits terms, except as same may be limited by bankruptcy, insolvency,
\nreorganization or other laws affecting the enforcement of creditors’ rights
\ngenerally.<\/p>\n
SECTION 2.3 OUTPOST STOCK<\/p>\n
Schedule 2.3 sets forth a complete an accurate description of the number of
\nshares of OutPost Stock that will be issued and outstanding as of the Effective
\nDate. As of the Effective Date, the OutPost Stock described in Schedule 2.3
\nshall be duly authorized and issued, fully paid and non-assessable. Except for
\nthe agreements described in Schedule 2.3, neither OutPost nor any Principal
\nShareholder or Recent Investor is a party to any written or oral agreement,
\nunderstanding, arrangement or commitment with respect to the OutPost Stock or
\nwhich imposes any obligation on OutPost, or any Principal Shareholder or Recent
\nInvestor or creates or may create any rights in any person regarding OutPost
\nStock, or any rights to acquire any capital stock or other interest in OutPost.
\nNo shares of preferred stock in OutPost will be issued and outstanding as of the
\nEffective Date, and no other shares of OutPost Stock shall be issued and
\noutstanding except as described in Schedule 2.3.<\/p>\n
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SECTION 2.4 PROPERTIES<\/p>\n
OutPost has good and marketable title to all of the assets used in its
\nbusiness as conducted on the date hereof (the “Assets”). As of the Effective
\nDate, the Assets will be free and clear of all encumbrances, liens, security
\ninterests and charges of every kind and character. None of the Assets is
\nsubject to a contract, option or commitment for sale; and all the Assets are
\nowned by OutPost. All such Assets are in OutPost’s possession or under its
\ncontrol.<\/p>\n
SECTION 2.5 INTEREST IN ASSETS<\/p>\n
OutPost has not granted, and there is not outstanding, any option, right,
\nagreement or other obligation pursuant to which any party could claim a right to
\nacquire in any way all or any part of or interest in the Assets.<\/p>\n
SECTION 2.6 EFFECTIVE AGREEMENT<\/p>\n
The execution, delivery and performance of this Agreement by OutPost and
\nthe Principal Shareholders and the consummation of the transactions contemplated
\nherein do not require the consent, waiver, approval, license or authorization of
\nany person or public authority; do not conflict with, result in a breach of or
\nconstitute a default under any applicable law, judgment, order, injunction,
\ndecree, rule or regulation, or ruling of any court or government instrumentality
\nor the Articles of Incorporation or Bylaws of OutPost, or with or without the
\ngiving of notice and\/or the passage of time, any mortgage, deed of trust,
\nlicense, lease, indenture or other agreement or any instrument or any order,
\njudgment or any other restriction of any kind or character, to which OutPost or
\nany Principal Shareholder is a party or by which OutPost or any Principal
\nShareholder or any of their respective properties may be bound; do not give to
\nothers any right to terminate, or result in termination of, any such
\ninstruments; do not result in termination of any provisions of such instruments;
\nand do not result in the creation of any lien, charge or encumbrance on any of
\nthe Assets.<\/p>\n
SECTION 2.7 DEFAULTS OF OTHERS<\/p>\n
Neither OutPost nor any Principal Shareholder has received any notice,
\nformal or otherwise, from any other party with whom OutPost has any material
\ncontractual arrangement of a failure to comply with or default (without regard
\nto any requirement of notice or grace period or both) in the observance or
\nperformance of any material term, condition, or provision of any such
\ncontractual agreement which may affect the Assets.<\/p>\n
SECTION 2.8 LITIGATION<\/p>\n
2.8.1 Except with respect to a possible breach of contract suit threatened
\nby Patrick R. Adkisson, there is no suit, action, arbitration, legal,
\nadministrative or other <\/p>\n
-6-<\/p>\n
proceeding pending or threatened which may materially adversely affect the
\nAssets, OutPost’s ability to conduct its business after the Closing, or
\nPrincipal Shareholders’ ability to perform any of their obligations under this
\nAgreement. There is no governmental regulation, rule, law or investigation
\npending or threatened which may materially adversely affect the business of
\nOutPost, or Principal Shareholders’ ability to perform any of their obligations
\nunder this Agreement.<\/p>\n
2.8.2 The Principal Shareholders (and the Recent Investors) are not
\nsubject to, or party to or otherwise bound by, any suit, action or other legal
\nproceeding, or any suit, action or other legal proceeding, or any order, writ,
\ninjunction, decree or ruling of any federal, state or local court, governmental
\nagency or quasi-governmental authority which would prohibit or impair any such
\nPrincipal Shareholder’s or Recent Investor’s power to execute and deliver this
\nAgreement, or perform any of their respective obligations under this Agreement.<\/p>\n
SECTION 2.9 INSURANCE<\/p>\n
Schedule 2.9 sets forth a correct and complete list of all of the policies
\nof insurance and fidelity or surety bonds maintained by OutPost. OutPost has
\nreceived no notices of any outstanding requirements or recommendations from any
\ninsurance company that issued a policy with respect to any of the properties and
\nassets of OutPost during the previous five years, from any board of fire
\nunderwriters of other body exercising similar functions or from any governmental
\nauthority requiring or recommending that (i) any repair or other material work
\nbe done on or with respect to any of the properties and assets owned, used or
\noccupied by OutPost; or (ii) any material, equipment or facilities be installed
\non, or in connection with, any of the properties or assets owned, used or
\noccupied by OutPost.<\/p>\n
SECTION 2.10 EMPLOYEE BENEFITS, RETIREMENT AND WELFARE PLANS<\/p>\n
Except as set forth on Schedule 2.10, there are no employee welfare or
\nbenefit plans sponsored by OutPost or in which OutPost employees, as OutPost
\nemployees, participate. The Principal Shareholders have delivered to InfoSpace
\nall documents that set forth the terms of or otherwise relating to each such
\nplan and all personnel, payroll, and employment manuals and policies. OutPost
\nhas performed all of its obligations under all such plans.<\/p>\n
SECTION 2.11 EMPLOYEES<\/p>\n
Schedule 2.11 hereto contains a list of all persons employed by OutPost
\n(singly, an “Employee” and collectively, the “Employees”), together with (i) the
\namount of the current annualized salary or hourly wage of such person, (ii)
\nwhether such person is considered in due course for discretionary bonuses,
\ntogether with the amount of such bonus paid to such person by OutPost with
\nrespect to the period ended December 31, <\/p>\n
-7-<\/p>\n
1996, (iii) whether any such person is contractually or otherwise entitled to
\nany non-discretionary bonus with respect to all or part of the year ending
\nDecember 31, 1997 and, if so, the method of computation of such bonus, (iv)
\nwhether any such person is contractually or otherwise entitled to any commission
\nwith respect to all or part of the year ending December 31, 1997 and, if so, the
\nmethod of computation and the amount (or estimated amount) of commissions that
\nwill be payable for the year ending December 31, 1997, and (v) whether such
\nperson is involved in the development of the “Virtual Outlet” technology.<\/p>\n
SECTION 2.12 LABOR RELATIONS<\/p>\n
OutPost is in compliance with all federal, state and local laws and
\nregulations respecting employment and employment practices, terms and conditions
\nof employment and wages and hours. OutPost is not a party to any collective
\nbargaining agreement, and there is no strike, dispute, grievance, controversy or
\nother labor trouble existing or threatened against OutPost, and no grounds for
\nany such action.<\/p>\n
SECTION 2.13 ABSENCE OF CERTAIN CHANGES<\/p>\n
Since December 31, 1997, there has not been:<\/p>\n
2.13.1 any material damage, destruction or loss (whether or not
\ncovered by insurance) affecting the Assets or the results of operations of
\nOutPost; or<\/p>\n
2.13.2 any sale, transfer, pledge, mortgage, abandonment or other
\ndisposition of any of the Assets, or any agreement to do so, except in the
\nordinary course of business.<\/p>\n
SECTION 2.14 COMPLIANCE WITH LAWS<\/p>\n
OutPost is in material compliance with all laws, regulations, or
\ngovernmental orders relating to the Assets or the business. OutPost has not
\nbeen charged with a violation of any law, regulation, or governmental order
\nrelating to the Assets or the business. OutPost is not in default or violation
\nof or with respect to any judgment, order, injunction or decree of any court or
\ngovernmental instrumentality adversely affecting the Assets or the business.<\/p>\n
SECTION 2.15 ENVIRONMENTAL<\/p>\n
No Hazardous Substances have been released at, in or under OutPost’s
\npremises, or have migrated into or under such premises. No Hazardous Substances
\nhave migrated from the Facility, or been disposed of offsite. No toxic
\nsubstances, as regulated under the Toxic Substances Control Act (“TSCA”), 15
\nU.S.C. (S)(S) 2601 through 2671 and any <\/p>\n
-8-<\/p>\n
regulations promulgated pursuant thereto, or otherwise, have ever been used by
\nOutPost at its premises or elsewhere.<\/p>\n
SECTION 2.16 GOVERNMENTAL LICENSES, ETC.<\/p>\n
OutPost has all governmental licenses (including Occupational Safety and
\nHealth Administration or environmental agency licenses) required, if any, for
\nthe conduct of its business and all such licenses, which are listed in Schedule
\n2.16 hereto, are currently in full force and effect. (i) There have been no
\nmaterial violations of any of the terms and conditions of any such licenses,
\n(ii) there is no action pending or threatened by any governmental authority
\nseeking to cancel, revoke, rescind, limit, or terminate any such license, (iii)
\nconsummation of the transactions contemplated by this Agreement will neither
\nresult in a violation of any of the terms and conditions of any such license or
\nof any statute or regulation under which it was issued nor impair the validity
\nof any such license, and (iv) each such license shall remain in full force and
\neffect in accordance with its terms.<\/p>\n
SECTION 2.17 OFFICERS AND DIRECTORS; POWERS OF ATTORNEY<\/p>\n
Schedule 2.17 hereto contains a list of all officers and directors of
\nOutPost, and no person holds general or special powers of attorney from OutPost.<\/p>\n
SECTION 2.18 STATEMENTS TRUE, COMPLETE AND CORRECT<\/p>\n
The statements about OutPost contained herein, in the Exhibits, the
\nSchedules, or in any Offering Memorandum delivered to the Shareholders by
\nInfoSpace in connection with the Merger (the “Offering Memorandum”) or in any
\nother written documents executed and delivered at the Closing which are required
\nunder this Agreement by or on behalf of OutPost or the Principal Shareholders,
\nare true, complete and correct in all material respects, and such statements
\ncontained herein, in the Exhibits, the Schedules, the Offering Memorandum and
\nsuch other documents do not omit any material fact which, if disclosed, might
\nreasonably have been expected to affect the decision of InfoSpace to enter into
\nthis Agreement. The statements and information of the Principal Shareholders
\ncontained in the Exhibits, the Schedules, the Offering Memorandum and such other
\ndocuments shall be deemed to constitute representations and warranties of
\nPrincipal Shareholders under this Agreement to the same extent as if herein set
\nforth in full.<\/p>\n
SECTION 2.19 VIRTUAL OUTLET<\/p>\n
OutPost owns the entire and exclusive right, title and interest in and to
\nthe “Virtual Outlet” technology (“VO”), free and clear of any and all liens,
\nencumbrances, interests or other restrictions of any kind. OutPost has filed
\nand is vigorously prosecuting a U.S. patent relating to certain aspects of VO
\nand is the sole and exclusive owner of all rights in <\/p>\n
-9-<\/p>\n
and to such patent application and any and all Letters Patent which may be
\ngranted or issued in connection with VO. VO is an original work and no portion
\nof VO has been copied from any other person or infringes or otherwise violates
\nthe copyright, trade secret, confidentiality, contract or license rights of any
\nthird party. To the best of OutPost’s knowledge, VO does not infringe the patent
\nor trademark rights of any third party. There are no patent infringement suits
\nor asserted patent infringement claims pertaining to VO pending or threatened as
\nof the date of this Agreement and OutPost is not aware of any potential patent
\ninfringement claims. OutPost is not operating under or paying royalties under
\nany patent license or technical information agreement applicable to VO, nor is
\nit committed in any way to enter into any such agreement. No third party has any
\nlicense or other rights in or to VO. VO is not fully developed.<\/p>\n
SECTION 2.20 CONTRACTS<\/p>\n
Except as set forth on Schedule 2.21 or any other Schedule hereto, OutPost
\nis not a party to or bound by:<\/p>\n
(a) any contract for the purchase, sale or lease of real property or
\nany option to purchase or sell real property;<\/p>\n
(b) any indebtedness, obligation or liability for borrowed money, or
\nliability for the deferred purchase price of property in excess of $5,000, or
\nany instrument guaranteeing any indebtedness, obligation or liability, or any
\nobligation to incur any of the foregoing;<\/p>\n
(c) any joint venture, partnership or other arrangement involving a
\nsharing of profits involving OutPost;<\/p>\n
(d) any agreement that is material to the business of OutPost and
\nwhich includes provisions regarding minimum volumes or volume discounts,
\nexcluding outstanding price quotations;<\/p>\n
(e) any agreement that is material to the business of OutPost and
\npursuant to which a rebate, discount, bonus, commission or other payment with
\nrespect to the sale of any product or service of OutPost will be payable or
\nrequired after the Effective Date;<\/p>\n
(f) any guarantee of the obligations of OutPost’s customers,
\nsuppliers, officers, directors, employees or Affiliates or others;<\/p>\n
(g) any consignment, distributor, dealer, manufacturer’s
\nrepresentative, sales agency, advertising representative or advertising or
\npublic relations contract that is material to OutPost;<\/p>\n
(h) any agreement limiting OutPost’s ability to engage in any business
\nanywhere in the world;<\/p>\n
-10-<\/p>\n
(i) any contract which provides for, or relates to, any non-
\ncompetition or confidentiality arrangement with any Person, including any
\ncurrent or former officer or employee of OutPost;<\/p>\n
(j) any contract or group of related contracts for capital
\nexpenditures in excess of $5,000 for any single project or related series of
\nprojects;<\/p>\n
(k) any contract which involves payments or receipts by the Company of
\nmore than $5,000; or<\/p>\n
(l) any contract not made in the ordinary course of business.<\/p>\n
SECTION 2.21 STATUS OF CONTRACTS<\/p>\n
Each of the leases, contracts and other agreements listed on Schedule 2.21
\n(collectively, the “Material Contracts”), constitutes a valid and binding
\nobligation of the Company and, to the knowledge of OutPost or any of the
\nPrincipal Shareholders, the other parties thereto, and is in full force and
\neffect and each of the Material Contract (except for those Material Contracts
\nwhich by their terms will expire prior to the Closing Date or will be otherwise
\nterminated prior to the Closing Date in accordance with the provisions hereof)
\nwill continue in full force and effect after the Closing Date, in each case
\nwithout breaching the terms thereof or resulting in the forfeiture or impairment
\nof any rights thereunder and without the consent, approval or act of, or the
\nmaking of any filing with, any other party. OutPost has fulfilled and performed
\nits obligations under each of the Material Contracts and OutPost is not in, or,
\nto the knowledge of OutPost and the Principal Shareholders, alleged to be in,
\nbreach or default under, nor is there or, to the knowledge of OutPost and the
\nPrincipal Shareholders, is there alleged to be any basis for termination of any
\nof the Material Contracts. To the knowledge of OutPost or any of the Principal
\nShareholders, no other party to any of the Material Contracts has breached or
\ndefaulted thereunder. No event has occurred and no condition or state of facts
\nexists which, with the passage of time or the giving of notice or both, would
\nconstitute such a default or breach by OutPost or, to the knowledge of OutPost,
\nor any of the Principal Shareholders, by any other party. OutPost is not
\ncurrently renegotiating any of the Material Contracts or paying damages in lieu
\nof performance thereunder.<\/p>\n
SECTION 2.22 COMMISSIONS<\/p>\n
There is no agent, broker, investment banker, finder or other person or
\nfirm who would have any valid claim against OutPost for a commission, finder’s
\nfee or brokerage fee in connection with this Agreement or any of the
\ntransitions, transfers or assignments contemplated hereby.<\/p>\n
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SECTION 2.23 TAX RETURNS<\/p>\n
OutPost has filed on or before their respective due dates or extensions
\nthereof all federal, state and local tax returns and reports as are required to
\nbe filed; all such returns are true, correct and complete; and to the best of
\nits knowledge, OutPost has duly paid or accrued in full for any federal, state
\nand local taxes or other charges due or claimed to be due to any federal, state
\nor local taxing authorities, including, without limitation, employee withholding
\namounts. There are no tax liens upon any property or assets of OutPost other
\nthan liens for current taxes not yet paid or payable. No federal, state or local
\ntax returns of OutPost are currently under examination by any taxing authority,
\nand, to the best of its knowledge, if any such examination is hereafter made and
\nthe results are determined adversely to OutPost, such results will not have a
\nmaterial adverse effect on the operations of OutPost taken as a whole as if
\ndetermined prior to the Merger. There are no outstanding agreements or waivers
\nextending the statutory period of limitation applicable to assessment of any
\nfederal, state or local income tax.<\/p>\n
SECTION 2.24 FINANCIAL INFORMATION<\/p>\n
Schedule 2.25 contains the unaudited financial statements of OutPost for
\nthe periods ending December 31, 1997 and December 31, 1996, which accurately
\npresent the matters set forth therein.<\/p>\n
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF INFOSPACE<\/p>\n
InfoSpace represents and warrants to the OutPost Shareholders, as follows:<\/p>\n
SECTION 3.1 CORPORATE ORGANIZATION<\/p>\n
InfoSpace is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Delaware, and has the corporate power
\nand authority to own, operate and lease its properties as presently owned,
\noperated and leased and to carry on its business as it is now being conducted.
\nInfoSpace’s only subsidiary is Acquisition.<\/p>\n
SECTION 3.2 BINDING AGREEMENT<\/p>\n
This Agreement, upon its execution by OutPost and the Principal
\nShareholders, will constitute the legal, valid and binding obligation of
\nInfoSpace, enforceable in accordance with its terms, except as the same may be
\nlimited by bankruptcy, insolvency, reorganization or other laws affecting the
\nenforcement of creditors’ rights generally.<\/p>\n
SECTION 3.3 EFFECTIVE AGREEMENT<\/p>\n
The execution, delivery and performance of this Agreement by InfoSpace and
\nconsummation by it of the transactions contemplated herein do not require the
\nconsent, <\/p>\n
-12-<\/p>\n
waiver, approval, license or authorization of any person or public authority; do
\nnot conflict with, result in a breach of or constitute a default under any
\napplicable law, judgment, order, injunction, decree, rule or regulation, or
\nruling of any court or governmental instrumentality or the charter and governing
\ndocuments of InfoSpace, or, with or without notice of and\/or the passage of
\ntime, any mortgage, deed of trust, license, indenture or other agreement or
\nother instrument, or any order, judgment or any other restriction of any kind or
\ncharacter to which InfoSpace is a party or by which InfoSpace may be bound; do
\nnot give to others any right to terminate, or result in termination of, any such
\ninstruments; and do not result in termination of any provision of such
\ninstruments.<\/p>\n
SECTION 3.4 COMMISSIONS<\/p>\n
There is no agent, broker, investment banker, finder or other person or
\nfirm who would have any valid claim against OutPost or the Shareholders for a
\ncommission, finder’s fee or brokerage fee in connection with this Agreement or
\nany of the transactions, transfers or assignments contemplated hereby.<\/p>\n
SECTION 3.5 STATEMENTS TRUE, COMPLETE AND CORRECT<\/p>\n
The statements about InfoSpace contained herein, in the Exhibits, the
\nSchedules, and the Offering Memorandum or in any other written documents
\nexecuted and delivered at the Closing which are required under this Agreement by
\nor on behalf of InfoSpace are true, complete and correct in all material
\nrespects, and such statements contained herein, the Exhibits, the Schedules, the
\nOffering Memorandum and such other documents do not omit any material fact
\nwhich, if disclosed, might reasonably have been expected to affect the decision
\nof the Principal Shareholders to enter into this Agreement. The statements and
\ninformation of InfoSpace contained in the Exhibits, the Schedules, the Offering
\nMemorandum and such other documents shall be deemed to constitute
\nrepresentations and warranties of InfoSpace under this Agreement to the same
\nextent as if herein set forth in full.<\/p>\n
SECTION 3.6 INFOSPACE STOCK<\/p>\n
Subject to the terms of this Agreement, the shares of InfoSpace Stock to be
\nissued to OutPost Shareholders pursuant hereto, as of the Effective Date, will
\nbe duly authorized and issued, fully paid, and non-assessable. As of the
\nEffective Date, InfoSpace will have authorized not more than a total of
\n55,000,000 shares of stock, consisting of not more than 40,000,000 shares of
\nCommon Stock, $.0001 par value\/share, and 15,000,000 shares of Preferred Stock,
\n$.0001 par value\/share. As of the date of this Agreement, InfoSpace has issued
\nand outstanding 22,155,510 shares of Common Stock, and no shares of Preferred
\nStock. As of the Effective Date, not more than 5,000,000 shares of InfoSpace
\nStock will be reserved for issuance under the InfoSpace, Inc. 1996 Flexible
\nStock Incentive Plan, as amended (the “InfoSpace Plan). As of the Effective
\nDate, options to acquire up to 2,451,000 shares of Common Stock have been
\ngranted pursuant to the Plan. <\/p>\n
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As of the date of this Agreement, warrants to acquire up to 3,500,000 shares of
\nthe Common Stock will be outstanding. Between the date of this Agreement is
\nexecuted and the Effective Date, or soon thereafter, certain changes to
\nInfoSpace’s capitalization, as described in Schedule 3.6, may occur.<\/p>\n
SECTION 3.7 FINANCIAL INFORMATION<\/p>\n
Schedule 3.7 contains the audited financial statements of InfoSpace, which
\nare to be delivered to the Shareholders in connection with the Offering
\nMemorandum (as defined below), and which have been prepared in accordance with
\ngenerally accepted accounting principles by an independent certified public
\naccounting firm, and fairly present the matters set forth therein.<\/p>\n
SECTION 3.8 NO AGREEMENTS<\/p>\n
As of the Effective Date, and except as disclosed in Section 3.6, InfoSpace
\nis not a party to any written or oral agreement, understanding, arrangement or
\ncommitment with respect to the InfoSpace Stock that would be violated by the
\nMerger or which imposes any obligation on any InfoSpace Shareholder, or creates
\nor may create any rights in any person, regarding InfoSpace Stock, or any rights
\nto acquire any capital stock or other interest in InfoSpace. There are no
\npreemptive rights to the shares of InfoSpace Stock to be issued pursuant hereto.<\/p>\n
SECTION 3.9 LITIGATION<\/p>\n
Except as set forth in Schedule 3.9, there is no suit, action, arbitration,
\nlegal, administrative or other proceeding pending or threatened which may
\nmaterially adversely affect InfoSpace or the Merger.<\/p>\n
SECTION 3.10 TAX RETURNS<\/p>\n
InfoSpace has filed on or before their respective due dates or extensions
\nthereof all federal, state and local tax returns and reports as are required to
\nbe filed; all such returns are true, correct and complete; and to the best of
\nits knowledge, InfoSpace has duly paid or accrued in full for any federal, state
\nand local taxes or other charges due or claimed to be due to any federal, state
\nor local taxing authorities, including, without limitation, employee withholding
\namounts. There are no tax liens upon any property or assets of InfoSpace other
\nthan liens for current taxes not yet paid or payable. No federal state or local
\ntax returns of InfoSpace are currently under examination by any taxing
\nauthority, and, to the best of its knowledge, if any such examination is
\nhereafter made and the results are determined adversely to InfoSpace, such
\nresults will not have a material adverse effect on the operations of InfoSpace
\ntaken as a whole as if determined prior to the Merger. There are no outstanding
\nagreements or waivers extending the statutory period of limitation applicable to
\nassessment of any federal, state or local income tax.<\/p>\n
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ARTICLE 4 COVENANTS<\/p>\n
SECTION 4.1 OUTPOST’S AND THE PRINCIPAL SHAREHOLDERS’ NEGATIVE COVENANTS<\/p>\n
Between the date hereof and the Effective Date, Principal Shareholders and
\nOutPost covenant that they will not, except with InfoSpace’s written consent:<\/p>\n
4.1.1 Take any action or permit to exist any condition which would
\ncause any of the representations and warranties of the Principal Shareholders
\nand OutPost contained in this Agreement to be untrue in any material respect on
\nthe Effective Date.<\/p>\n
4.1.2 Enter into any agreement or undertaking affecting OutPost, the
\nbusiness or the Assets, other than in the ordinary course of business.<\/p>\n
SECTION 4.2 OUTPOST’S AND PRINCIPAL SHAREHOLDERS’ AFFIRMATIVE COVENANTS<\/p>\n
Between the date hereof and the Effective Date, and post-Effective Date as
\napplicable, Principal Shareholders and OutPost will:<\/p>\n
4.2.1 Use their reasonable efforts to (A) complete the transactions
\ncontemplated herein; and (B) continue to operate OutPost’s business as a going
\nconcern.<\/p>\n
4.2.2 At all reasonable times give to InfoSpace and its
\nrepresentatives full access during normal business hours to all of the
\nproperties, books and records of OutPost relating to the business and furnish
\nInfoSpace with such information concerning the operation of the business as
\nInfoSpace may reasonably require.<\/p>\n
4.2.3 Maintain in force the existing hazard and liability insurance
\npolicies, or comparable coverage, for the Assets, and, whether or not covered by
\nsuch insurance, repair, replace, or restore any of the Assets which may be
\ndamaged, destroyed or stolen.<\/p>\n
4.2.4 Cause all liens, charges or encumbrances on any of the Assets
\nto be satisfied, terminated and removed.<\/p>\n
4.2.5 Obtain all necessary consents of the Principal Shareholders to
\nconsummate the transactions contemplated herein, including without limitation
\nthe formal consent of the Board of Directors of OutPost and of the Principal
\nShareholders of OutPost.<\/p>\n
4.2.6 Cause all liabilities of OutPost as of March 4, 1998, for
\nproducts or services acquired from, or amounts (including without limitation
\ntaxes, including employee payroll taxes, interest and penalties) or accounts
\npayable owed to, any governmental or private entity or person, including without
\nlimitation any amounts owing to InfoSpace in connection with advertising
\nagreements between OutPost and InfoSpace, relating to or arising out of the
\noperation of OutPost prior to March 4, 1998 in excess of <\/p>\n
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the sum of (i) $35,000, plus (ii) any amounts owing to InfoSpace accrued as of
\nFebruary 1, 1998, and all subsequent months (collectively, the “Financial
\nLiabilities”), to be fully paid and discharged.<\/p>\n
4.2.7 Even after Closing, not disclose or otherwise use the
\nproprietary or confidential business information of InfoSpace contained in the
\nOffering Memorandum, except that Principal Shareholders may use such information
\nfor purposes of determining whether to approve the Merger.<\/p>\n
4.2.8 Any termination costs, including without limitation, severance
\npay, accrued vacation benefits, relating to those employees of OutPost who will
\nbe terminated as of the Effective Date, shall be a liability of the Principal
\nShareholders. From and after the Effective Date, InfoSpace shall have no
\nliability to any such person, except with those it negotiates terms of
\nemployment as described in Section 5.9.<\/p>\n
SECTION 4.3 INFOSPACE’S AFFIRMATIVE COVENANT<\/p>\n
InfoSpace covenants that:<\/p>\n
4.3.1 In advance of Closing and the special meeting of the OutPost
\nShareholders called to obtain Shareholder approval of the Merger, it will
\ndistribute to the OutPost Shareholders the Offering Memorandum, together with
\ncertain financial information.<\/p>\n
4.3.2 It will use its reasonable efforts to (A) complete the
\ntransactions contemplated herein; and (B) continue to operate InfoSpace’s
\nbusiness.<\/p>\n
4.3.3 It will negotiate the terms of employment of the persons listed
\nin Section 5.9 in good faith, but the final terms of such arrangements must be
\ndeemed satisfactory to InfoSpace in its discretion.<\/p>\n
SECTION 4.4 POST-CLOSING<\/p>\n
After the Effective Date, InfoSpace and each of the Principal Shareholders
\nrespectively agree that each will:<\/p>\n
4.4.1 Promptly take such actions and properly execute and deliver
\nsuch further instruments as, in the reasonable opinion of InfoSpace, may be
\nnecessary to assure, complete and evidence the transactions provided for in this
\nAgreement.<\/p>\n
4.4.2 In the event any Principal Shareholder receives any payment of
\nmonies relating to the Assets or the business which was or should have been
\ndirected to OutPost directly, such Principal Shareholder will promptly forward
\nsuch payment to the Surviving Corporation.<\/p>\n
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4.4.3 In no event will any Shareholder do business independent of the
\nSurviving Corporation using the name “OutPost” or any word confusingly similar
\nto “OutPost” after the Closing.<\/p>\n
4.4.4 InfoSpace will grant options to acquire a total of 298,000
\nshares of InfoSpace Stock to the persons listed in Section 5.9. InfoSpace shall
\ndetermine how the pool of 298,000 shares shall be allocated among such persons,
\nthe vesting period, and the other terms of such grants, except however, that the
\nexercise price per share shall be $.01.<\/p>\n
SECTION 4.5 NOTIFICATIONS AS TO REPRESENTATIONS<\/p>\n
In the event that any party shall at any time, either before or after the
\nEffective Date, determine that any representation or warranty of either party
\ncontained in this Agreement is not true or correct in any material respect as of
\nthe date made, or that any covenant has been breached, such party shall promptly
\ngive the other party written notice thereof, including a description of such
\ninaccuracy or breach. Upon learning of such inaccuracy or breach, the party
\nwhose representation or warranty was not true or which breached a covenant shall
\nhave twenty (20) business days to cure such inaccuracy or breach, and if so
\ncured, such conditions shall be deemed timely satisfied, and the Effective Date
\nshall, to the extent needed, be extended to the date of such satisfaction. Any
\npostponement of the Effective Date pursuant to this provision shall not be a
\nwaiver of any claim an aggrieved party may have as a result of any such breach.<\/p>\n
ARTICLE 5 CONDITIONS TO INFOSPACE’S OBLIGATION TO CLOSE<\/p>\n
The obligation of InfoSpace to consummate the transactions contemplated
\nherein shall be subject to the fulfillment on or prior to the Effective Date of
\nthe following conditions, which conditions OutPost, the Principal Shareholders
\nand the Recent Investors agree to use their reasonable best efforts to fulfill,
\nand which InfoSpace may elect to waive in its sole discretion (InfoSpace agrees
\nto use reasonable efforts to cooperate with the Principal Shareholders and the
\nRecent Investors as Principal Shareholders or Recent Investors may reasonably
\nrequest in order to facilitate the Principal Shareholders’ or the Recent
\nInvestors’, as the case may be, satisfying these conditions):<\/p>\n
SECTION 5.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING<\/p>\n
The representations and warranties made by OutPost, the Principal
\nShareholders and the Recent Investors herein shall be true, complete and correct
\nin all material respects on and as of the Effective Date with the same effect as
\nthough such representations and warranties had been made or given on and as of
\nthe Effective Date. It is understood that in determining whether there has been
\nany material misrepresentation or material adverse<\/p>\n
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event, all occurrences and adverse events shall be aggregated to determine the
\napplicability or breach of the provisions of this Agreement.<\/p>\n
SECTION 5.2 COMPLIANCE WITH AGREEMENT<\/p>\n
OutPost and the Principal Shareholders shall have performed and complied
\nwith all of their material obligations under this Agreement which are to be
\nperformed or complied with by them prior to or at the Closing.<\/p>\n
SECTION 5.3 NO MATERIAL CHANGE<\/p>\n
Since December 31, 1997, there shall not have been, nor to the knowledge of
\nOutPost or the Principal Shareholder shall there have been threatened to be, any
\nevent, condition or circumstance which would materially and adversely affect the
\nAssets or InfoSpace’s prospects for successfully operating the business, and
\nthere shall be no material adverse factors relating to the business which have
\nnot been disclosed in writing to InfoSpace.<\/p>\n
SECTION 5.4 NO INJUNCTION<\/p>\n
As of the Effective Date,<\/p>\n
5.4.1 there shall be no injunction or restraining order of any nature
\nissued by any court of competent jurisdiction or by any administrative body or
\nagency which directs or which has the effect of directing that this Agreement or
\nany material transaction contemplated hereby shall not be consummated as herein
\nprovided or which may materially affect the Assets or InfoSpace’s ability to
\nconduct business;<\/p>\n
5.4.2 there shall be no investigation, action or other proceeding
\npending before any court or governmental authority or threatened against
\nOutPost, or any of the directors or officers of OutPost, or in connection with
\nthis Agreement, or the consummation of the transactions contemplated by this
\nAgreement, which may in the opinion of InfoSpace (after consideration of any
\ndefense) materially and adversely affect the Assets or InfoSpace’s ability to
\nconduct the business; and<\/p>\n
5.4.3 none of the parties hereto shall have received from any
\ngovernmental authority any notice (oral or written) of any potential litigation,
\ncivil, criminal or administrative, against any Shareholder or InfoSpace for a
\nviolation alleged to arise out of the consummation of the transactions
\ncontemplated hereby.<\/p>\n
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SECTION 5.5 CASUALTY<\/p>\n
5.5.1 The Assets shall not have been adversely affected in any
\nmaterial way by, or sustained any material loss, whether or not insured, as a
\nresult of any fire, flood, accident, explosion, strike, labor disturbance, riot,
\nact of God or the public enemy or other calamity or casualty, unless all such
\nloss or damage resulting therefrom shall have been fully cured, repaired or
\nrestored by Principal Shareholders prior to the Effective Date, as it may be
\npostponed pursuant to Section 4.5 hereof.<\/p>\n
5.5.2 If any such casualty losses occur between the date hereof and
\nthe Effective Date which do not materially and adversely affect the Assets or
\nInfoSpace’s ability to conduct the business, OutPost shall repair the damage at
\nits cost and expense and all insurance proceeds and claims in connection
\ntherewith shall belong to OutPost.<\/p>\n
SECTION 5.6 SHAREHOLDER CONSENTS<\/p>\n
The Merger shall have been approved by the OutPost Shareholders in
\naccordance with the Washington Business Corporation Act.<\/p>\n
SECTION 5.7 CERTIFICATE OF FULFILLMENT OF CONDITIONS<\/p>\n
The Principal Shareholders shall have delivered to InfoSpace a certificate
\nof the Principal Shareholders certifying in such detail as InfoSpace may
\nreasonably specify their respective fulfillment of the conditions set forth in
\nthis Article 5.<\/p>\n
SECTION 5.8 LIMITATION ON LIABILITIES<\/p>\n
The total Financial Liabilities of OutPost as of March 4, 1998, including
\nthose owed by OutPost to InfoSpace in connection with certain advertising
\nagreements, shall not exceed the sum of (i) $35,000 plus (ii) any amounts owing
\nto InfoSpace accrued as of February 1, 1998, and all subsequent months.<\/p>\n
SECTION 5.9 EMPLOYMENT OF KEY INDIVIDUALS<\/p>\n
InfoSpace shall have concluded employment negotiations satisfactory to it
\nin its sole discretion with John Arnold, Peter Claar, John Bennett, Gray
\nMcGuire, Philip Johansen, Charles Fontaine, Mary Swanson, and Kelli Bradley.
\nWith the exception of such persons, the employment by OutPost of all other
\npersons shall be terminated as of the Effective Date.<\/p>\n
SECTION 5.10 RESIGNATION OF OUTPOST OFFICERS AND DIRECTORS<\/p>\n
As of the Effective Date, all of the existing officers and directors of
\nOutPost shall have tendered their written resignations from their positions with
\nOutPost.<\/p>\n
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SECTION 5.11 APPRAISAL RIGHTS<\/p>\n
Following the completion of the OutPost shareholder meeting called to
\nobtain approval of the Merger, no OutPost Shareholder shall have satisfied the
\nrequirements to qualify as a dissenting shareholder, as set forth in RCW
\n23B.13.210.<\/p>\n
SECTION 5.12 INVESTMENT CERTIFICATE<\/p>\n
InfoSpace shall have received an executed Investment Certificate in the
\nform of Exhibit 5.12 attached hereto from each OutPost Shareholder.<\/p>\n
ARTICLE 6 CONDITIONS TO OUTPOST’S AND PRINCIPAL
\n SHAREHOLDERS’ OBLIGATIONS TO CLOSE<\/p>\n
The obligation of OutPost and the Principal Shareholders to consummate the
\ntransactions contemplated herein shall be subject to the fulfillment on or prior
\nto the Effective Date of the following conditions, which conditions InfoSpace
\nagrees to use its reasonable best efforts to fulfill (OutPost and the Principal
\nShareholders agree to use reasonable efforts to cooperate with InfoSpace as
\nInfoSpace may reasonably request in order to facilitate InfoSpace’s satisfying
\nthese conditions):<\/p>\n
SECTION 6.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING<\/p>\n
The representations and warranties made by InfoSpace herein shall be true,
\ncomplete and correct in all material respects on and as of the Effective Date
\nwith the same effect as though such representations and warranties had been made
\nor given on and as of the Effective Date. It is understood that in determining
\nwhether there has been any material misrepresentation or material adverse event,
\nall occurrences and adverse events shall be aggregated to determine the
\napplicability or breach of the provisions of this Agreement.<\/p>\n
SECTION 6.2 COMPLIANCE WITH AGREEMENT<\/p>\n
InfoSpace shall have performed and complied with all of its material
\nobligations under this Agreement which are to be performed or complied with by
\nit prior to or at the Closing.<\/p>\n
SECTION 6.3 NO INJUNCTION<\/p>\n
As of the Effective Date (unless otherwise specified),<\/p>\n
6.3.1 there shall be no injunction or restraining order of any nature
\nissued by any court of competent jurisdiction or by any administrative body or
\nagency which directs or which has the effect of directing that this Agreement or
\nany material transaction contemplated hereby shall not be consummated as herein
\nprovided; and<\/p>\n
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6.3.2 none of the parties hereto shall have received from any
\ngovernmental authority any notice (oral or written) or any potential litigation,
\ncivil, criminal or administrative, against the Principal Shareholders or
\nInfoSpace for a violation alleged to arise out of the consummation of the
\ntransactions contemplated hereby.<\/p>\n
SECTION 6.4 CERTIFICATE OF FULFILLMENT OF CONDITIONS<\/p>\n
InfoSpace shall have delivered to the Principal Shareholders a certificate
\nof InfoSpace certifying in such detail as the Principal Shareholders may
\nreasonably specify the fulfillment of the conditions set forth in Sections 6.1,
\n6.2 and 6.3 of this Agreement.<\/p>\n
SECTION 6.5 OFFERING MEMORANDUM<\/p>\n
In advance of the special meeting of the OutPost Shareholders held for the
\npurpose of obtaining OutPost Shareholder approval of the Merger, InfoSpace shall
\nhave delivered the Offering Memorandum in a form approved by its board of
\ndirectors to the OutPost Shareholders, and any information regarding OutPost
\nshall be in a form approved by the OutPost Board of Directors, together with
\nassociated financial information about OutPost and InfoSpace that is consistent
\nwith the covenants made herein and any financial information that has previously
\nbeen provided to the OutPost Shareholders.<\/p>\n
SECTION 6.6 SHAREHOLDER CONSENTS<\/p>\n
The OutPost Shareholders shall have authorized and consented to the
\ntransactions contemplated herein.<\/p>\n
SECTION 6.7 DUE DILIGENCE<\/p>\n
The Board of Directors of OutPost shall have conducted a satisfactory due
\ndiligence review of InfoSpace’s books and records.<\/p>\n
ARTICLE 7 THE CLOSING<\/p>\n
SECTION 7.1 CLOSING<\/p>\n
Subject to the terms and conditions of this Agreement, the execution of any
\nfinal documents, instruments, agreements or other items, or actions necessary to
\neffect the Merger, shall take place on or before the Effective Date, as defined
\nin Section 1.2, at the offices of Garvey, Schubert & Barer, 1191 Second Avenue,
\n18th Floor, Seattle, Washington.<\/p>\n
SECTION 7.2 OUTPOST’S AND PRINCIPAL SHAREHOLDERS’ PERFORMANCE<\/p>\n
On the Effective Date, OutPost and the Principal Shareholders, as the case
\nmay be, agree to deliver or cause to be delivered to InfoSpace the following:<\/p>\n
-21-<\/p>\n
7.3.1 The minute books, stock record books, seals and certificates of
\nOutPost;<\/p>\n
7.3.2 Copies of the Articles of Incorporation (and all amendments
\nthereto) of OutPost certified, as of a recent date, by the Secretary of State
\nof Washington, copies of the Bylaws (and all amendments thereto) of OutPost
\ncertified, as of the Effective Date, by a duly authorized officer of OutPost and
\ncopies of the resolutions of the Board of Directors and the OutPost Shareholders
\napproving the Merger, certified, as of the Effective Date, by a duly authorized
\nofficer of OutPost;<\/p>\n
7.3.3 Certificates of good standing and tax status letter of recent
\ndate from appropriate officials in Washington showing OutPost to be a
\ncorporation validly existing, in good standing, with all taxes, including sales
\ntaxes, paid (to the extent the same are due and payable);<\/p>\n
7.3.4 Evidence of official searches by the secretary of state or
\nother appropriate official of each state in which OutPost or any subsidiary of
\nOutPost is qualified to do business, dated not earlier than ten (10) business
\ndays before Closing, showing no effective financing statements filed under the
\nUniform Commercial Code against the assets of OutPost, and evidence of judgment
\nand federal tax lien searches with respect to OutPost and each of its
\nsubsidiaries showing no such lien or judgment and dated not earlier than ten
\nbusiness days before the Closing;<\/p>\n
7.3.5 A certificate of Principal Shareholders in accordance with and
\nto the effect set forth in Section 5.7 hereof.<\/p>\n
SECTION 7.4 INFOSPACE’S PERFORMANCE<\/p>\n
On the Effective Date, InfoSpace agrees to deliver or cause to be delivered
\nto Principal Shareholders the following:<\/p>\n
7.4.1 A copy of the resolutions adopted by the Board of Directors of
\nInfoSpace authorizing and approving the execution and delivery of this Agreement
\nand the consummation of the transactions contemplated by this Agreement,
\ncertified by the Secretary of InfoSpace.<\/p>\n
7.4.3 A certificate of good standing from appropriate officials in
\nDelaware, and of qualification to conduct business as a foreign corporation from
\nappropriate officials in Washington, both of recent date, and showing InfoSpace
\nto be a corporation validly existing, in good standing, and in the State of
\nWashington qualified as a foreign corporation. On the Effective Date, InfoSpace
\nfurther agrees to reimburse John W. Stanton for all unreimbursed amounts paid by
\nJohn W. Stanton to or on behalf of OutPost in order to cover OutPost’s costs of
\noperation for the period from March 4, 1998, until the Effective Date.<\/p>\n
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SECTION 7.5 FAILURE TO CLOSE<\/p>\n
If for any reason the transactions contemplated by this Agreement are not
\nconsummated on the Effective Date or any mutually agreed extension thereof, both
\nparties agree that any and all documents, instruments or other information
\npertaining to the business and\/or operations of either party, which was
\nexchanged in anticipation of consummation of the transactions contemplated by
\nthis Agreement, shall be returned to the supplying party, without retaining
\ncopies thereof.<\/p>\n
ARTICLE 8 ANNOUNCEMENTS<\/p>\n
InfoSpace, OutPost and Principal Shareholders agree that between the date
\nof this Agreement and the Effective Date, any communications, press releases,
\npublic announcements or other publicity proposed to be released or permitted by
\neither party concerning this Agreement or the transactions hereby contemplated
\nshall be subject to prior review by and written approval of the other party.<\/p>\n
ARTICLE 9 TERMINATION AND ABANDONMENT<\/p>\n
SECTION 9.1 REASONS FOR TERMINATION<\/p>\n
This Agreement and the transactions contemplated herein may be terminated
\nand abandoned prior to or at the Closing for the following reasons:<\/p>\n
9.1.1 By the mutual written consent of InfoSpace and OutPost.<\/p>\n
9.1.2 By InfoSpace, if (i) by the Effective Date, the conditions set
\nforth in Article 5 hereof have not been met, and have not been waived by
\nInfoSpace, or (ii) due to any material cause beyond the control of InfoSpace,
\nthe parties are unable to consummate the transactions contemplated herein.<\/p>\n
9.1.3 By the Principal Shareholders, if (i) by the Effective Date,
\nthe conditions set forth in Article 6 hereof have not been met, and have not
\nbeen waived by the Principal Shareholders, or (ii) due to any material cause
\nbeyond the control of OutPost, InfoSpace or the Principal Shareholders are
\nunable to consummate the transactions contemplated herein.<\/p>\n
9.1.4 By either OutPost or InfoSpace, if the Effective Date is not by
\nor before June 30, 1998.<\/p>\n
SECTION 9.2 EFFECT OF TERMINATION<\/p>\n
A termination pursuant to Section 9.1.2 or Section 9.1.3 above shall be
\nwithout prejudice to any other remedy the terminating party may have as a result
\nof the failure of the other party to perform.<\/p>\n
-23-<\/p>\n
ARTICLE 10 RESTRICTIONS ON TRANSFER<\/p>\n
Each certificate evidencing shares of InfoSpace Common issued to any
\nOutPost Shareholder in connection with the Share Exchange shall bear a legend in
\nsubstantially the following form:<\/p>\n
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
\n 1933 OR ANY STATE SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
\n OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THE
\n SECURITIES ACT OF 1933 AND ANY SUCH APPLICABLE STATE SECURITIES ACTS
\n OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”<\/p>\n
ARTICLE 11 INDEMNITIES<\/p>\n
SECTION 11.1 PRINCIPAL SHAREHOLDER AND RECENT INVESTOR INDEMNITIES<\/p>\n
11.1.1 PRINCIPAL SHAREHOLDERS’ INDEMNITY. To the extent provided
\nbelow in this Article 11, the Principal Shareholders (but not the Recent
\nInvestors, except as expressly stated herein) jointly and severally agree to
\nindemnify and save InfoSpace, OutPost and their respective officers, directors,
\nemployees and agents (the “InfoSpace Indemnified Parties”) harmless from and
\nagainst all expenses, claims, charges, losses, damages, fines or penalties,
\nincluding without limitation reasonable attorneys’ fees, incurred by any of the
\nInfoSpace Indemnified Parties in defending or resisting any claims, actions or
\nproceedings or in enforcing this indemnity (hereinafter “Damages”), arising out
\nof, based upon, resulting from or in connection with any breach, inaccuracy,
\nfailure to perform or satisfy, or violation of any representations, warranties,
\nobligations or covenants of OutPost or the Principal Shareholders contained,
\ndisclosed or set forth in this Agreement or in any document (including any
\nSchedule or Exhibit) furnished by OutPost or the Principal Shareholders to
\nInfoSpace pursuant to or in connection with this Agreement.<\/p>\n
11.1.1(a) FINANCIAL LIABILITIES. In the event a party makes a claim
\nagainst an InfoSpace Indemnified Party for a Financial Liability that was not
\nsatisfied as of the Effective Date, the Principal Shareholders (but not the
\nRecent Investors) agree to provide for the payment of the same up to a total of
\n$250,000. It is understood that in order to generate the cash necessary to pay
\nany such amounts the Recent Investors or any one or more of them will agree to
\npurchase from the Principal Shareholders, and the Principal Shareholders will
\nagree to sell, shares of InfoSpace Stock held by the Principal Shareholders at
\nthe equivalent price of five cents per share of OutPost common stock determined
\nimmediately before the closing. If the amount received by the Principal
\nShareholders on the sale of all of their shares of such InfoSpace Stock to the
\nRecent <\/p>\n
-24-<\/p>\n
Investors is less than the amount needed to reimburse InfoSpace for Financial
\nLiabilities it has paid (not to exceed $250,000), then the Recent Investors
\nagree to reimburse InfoSpace for any such deficiency. Such reimbursement may be
\nmade by any or all the Recent Investors.<\/p>\n
11.1.1(b) SETTLEMENT BY STOCK ISSUANCE. To address any possible
\nliability that may be settled by issuance of shares of InfoSpace Stock, at the
\nclosing a portion of the shares of InfoSpace stock otherwise distributable to
\nthe OutPost shareholders that is equal to 100,000 shares of OutPost stock on a
\nconverted basis will be set aside and remain undistributed (the “escrowed
\nshares”). If any stock is to be issued in settlement of claims against OutPost
\narising out of or relating to the conduct of its business prior to or as of the
\nEffective Date, the escrowed shares shall be used to satisfy that obligation.
\nIf a Claim is to be resolved by the payment of cash or cash equivalents, such
\npayment obligation shall be deemed a Financial Liability subject to the
\nprovisions of subparagraph 11.1.1(a) above. Upon expiration of the indemnity
\nperiod provided in Section 11.4, any remaining unissued escrowed shares shall be
\nissued to the former OutPost shareholders on a prorata basis, determined as of
\nthe time immediately after the closing.<\/p>\n
11.1.1(c) OTHER DAMAGES. In the event an InfoSpace Indemnified Party
\nincurs other Damages, the Principal Shareholders agree to indemnify such
\nInfoSpace Indemnified Party for such Damages in the manner provided in this
\nsubparagraph. Payment of the indemnification responsibility shall be made
\nsolely by the return to InfoSpace of shares of stock in InfoSpace held by such
\nPrincipal Shareholders that were acquired in the Merger. If the value of all
\nsuch stock held by those Principal Shareholders is not adequate to compensate
\nfor such other Damages, then the Recent Investors agree to return to InfoSpace
\nup to 25% of the InfoSpace stock that was acquired by all Recent Investors in
\nthe Merger (the “Reimbursement Stock Pool”). If any of the Recent Investors
\nacquired stock from the Principal Shareholders so that the Principal
\nShareholders could satisfy any Financial Liabilities as provided in subparagraph
\n11.1.1(a) above, then the Recent Investors will also agree to include such
\nshares in calculating the number of shares in the Reimbursement Stock Pool. The
\nreturn of shares by the Recent Investors shall be made by such of the Recent
\nInvestors as the Recent Investors shall agree. For purposes of satisfying this
\nobligation, the InfoSpace stock held by the Principal Shareholders and the
\nRecent Investors will be valued based on the last “valuing transaction” or, if
\nnone, at $2.00 per share. A “valuing transaction” is one involving a sale or
\ntransfer of InfoSpace stock as the result of a good faith arm’s length
\nnegotiation.<\/p>\n
11.1.1(d) AGREEMENT NOT TO TRANSFER SHARES. The Principal
\nShareholders and the Recent Investors agree that during the indemnification
\nperiod set forth in Section 11.4 below, they shall retain the shares of stock in
\nInfoSpace received by them in exchange for their shares of OutPost on the
\nEffective Date; provided, however, that during such period such shares may be
\nsold or transferred to any other Principal Shareholder or Recent Investor in
\nwhich case such shares shall remain subject to the <\/p>\n
-25-<\/p>\n
indemnification responsibilities of the party transferring the same, (i.e., if
\nthe shares are transferred by a Principal Shareholder to a Recent Investor, the
\nshares shall remain liable to satisfy the obligations of the Principal
\nShareholder, without regard to the 25% limitation for shares held by Recent
\nInvestors set forth in subparagraph 11.1.1(c)), and the party making such
\ntransfer shall be released from any indemnification responsibility that is
\nsubject to satisfaction solely by the transfer of such shares.<\/p>\n
11.1.2 RECENT INVESTORS. Each Recent Investor, severally and not
\njointly, agrees to indemnify and save the InfoSpace Indemnified Parties harmless
\nfrom and against all Damages arising out of, based upon, resulting from, or in
\nconnection with any breach, inaccuracy, failure to perform or satisfy, or
\nviolation of any representation, warranty, obligation or covenant expressly made
\nby him, her or it herein.<\/p>\n
SECTION 11.2 INFOSPACE’S INDEMNITY<\/p>\n
InfoSpace agrees to indemnify and save the Principal Shareholders and the
\nRecent Investors harmless from and against all Damages that the Principal
\nShareholders or the Recent Investors may suffer, sustain, incur or become
\nsubject to whether directly or indirectly, arising out of, based upon, resulting
\nfrom or in connection with (a) any breach, inaccuracy, failure to perform or
\nsatisfy, or violation of any representations, warranties, obligations or
\ncovenants of InfoSpace contained, disclosed or set forth in this Agreement or in
\nany document (including any Schedule or Exhibit) furnished by InfoSpace pursuant
\nto or in connection with this Agreement, or (b) the operation of the business or
\nownership of the Assets after the Effective Date.<\/p>\n
SECTION 11.3 PROCEDURE AND PARTICIPATION<\/p>\n
11.3.1 If any matter shall arise which a party seeking
\nindemnification believes to be covered by the indemnification provisions
\nhereunder, the party seeking indemnification shall give written notice thereof
\nto the other party promptly (in no event more than forty-five (45) days) after
\nit learns of the existence of such matter (the “Indemnification Claim”). The
\nparty from whom indemnification is sought shall have the following options (i)
\ndeny liability for the Indemnification Claim, or (ii) if the Indemnification
\nClaim does not involve a third party, to acknowledge liability for such claim,
\nor (iii) if the Indemnification Claim does involve a third party, to undertake
\nat its cost and expense (including legal fees, court costs and interest charges
\nbut excluding legal fees which indemnities may incur in monitoring the
\nproceedings after the assumption of the indemnification obligation by
\nindemnitor) action appropriate to the matter, including, but not limited to, the
\nright to assume the defense of any claims, demands, or actions or protest of any
\ntax. The parties shall cooperate fully in any such action, making available to
\neach books or records necessary thereto.<\/p>\n
11.3.2 If the party from whom indemnification is sought does not
\nexercise either option (ii) or option (iii) above within twenty (20) days of
\nsuch notice (or such <\/p>\n
-26-<\/p>\n
shorter time specified in such notice as the circumstances of the matter may
\ndictate) the party seeking indemnification shall be free to dispose of the
\nmatter in such manner as it may determine in good faith to be in its best
\ninterest. If the party from whom indemnification is sought exercises option (i)
\nabove, and if the parties do not amicably dispose of the claim for
\nindemnification within thirty (30) days, the party seeking indemnification may
\nbring action on the claim. If the party from whom indemnification is sought does
\nnot exercise any of the options outlined above within twenty (20) days after the
\ndate of the original notice seeking indemnification, the party from whom
\nindemnification is sought shall be conclusively presumed to have agreed to the
\nclaim for indemnification. Either party may offset any amounts owed by such
\nparty to the other party hereto against amounts claimed as Damages pursuant to
\nthis Article 11.<\/p>\n
SECTION 11.4 SURVIVAL OF INDEMNIFICATION; EXCLUSIVE REMEDY<\/p>\n
After the Effective Date the indemnification provided for in this Article
\n11 shall be the exclusive remedy provided to the parties for any breach of this
\nAgreement or any of its terms. Such indemnification obligations shall survive
\nthe Effective Date for a period of twelve months; provided, however, that any
\nclaim for indemnification for any Damages arising from a failure to withhold or
\npay taxes (including without limitation, employee payroll taxes) to any federal,
\nstate or local governmental authority shall survive for a period of twenty-four
\nmonths after the Effective Date. Notwithstanding the foregoing, any
\nindemnification obligation created herein shall terminate and be of no further
\nforce or effect on the closing of any initial public offering of stock in
\nInfoSpace pursuant to an effective registration statement filed under the U.S.
\nSecurities Act of 1933, as amended.<\/p>\n
Any claim for indemnification that is not made within the time periods set
\nforth in this subparagraph shall be forever barred as against all potential
\nindemnifying parties.<\/p>\n
ARTICLE 12 MISCELLANEOUS<\/p>\n
SECTION 12.1 NOTICES<\/p>\n
Any notices or communications required or permitted hereunder shall be
\nsufficiently given if sent by registered or certified mail, return receipt
\nrequested, postage prepaid, addressed as follows:<\/p>\n
To InfoSpace: 8424 – 154th Avenue N.E.
\n Redmond, Washington 98052
\n Attn: Naveen Jain<\/p>\n
-27-<\/p>\n
With a copy to: Bruce A. Robertson
\n Garvey Schubert & Barer
\n Second & Seneca Bldg.
\n 1191 Second Avenue, 18th Floor
\n Seattle, Washington 98101<\/p>\n
To Principal Shareholders: John Arnold<\/p>\n
____________________________
\n ____________________________<\/p>\n
Kurt Dahl<\/p>\n
____________________________
\n ____________________________<\/p>\n
David Wagner<\/p>\n
____________________________
\n ____________________________<\/p>\n
With a copy to: Philip M. Roberts
\n Ryan Swanson & Cleveland
\n 1201 Third Avenue, Suite 3400
\n Seattle, WA 98101-3034<\/p>\n
To Recent Investors: John W. Stanton
\n Western Wireless Corporation
\n 2001 NW Sammamish Road, Suite 100
\n Issaquah, WA 98027<\/p>\n
With a copy to: Douglas C. Lawrence
\n Stokes Lawrence, P.S.
\n 800 Fifth Avenue, Suite 4000
\n Seattle, WA 98104<\/p>\n
or such other address as shall be furnished by like notice by such party.
\nNotices shall be deemed to have been duly given at the time delivered by hand,
\nif personally delivered; five business days after being deposited in the mail,
\nfirst class postage prepaid, return receipt requested, if mailed; when receipt
\nconfirmed, if sent by an overnight air courier service guaranteeing next day
\ndelivery.<\/p>\n
This Agreement shall be binding upon and shall inure to the benefit of the
\nparties hereto, and their respective successors. Nothing herein expressed or
\nimplied is intended to confer upon any person, other than the parties executing
\nthis Agreement and their permitted assignees, any rights, remedies, obligations
\nor liabilities under or by reason of this Agreement.<\/p>\n
-28-<\/p>\n
SECTION 12.2 ENTIRE AGREEMENT; AMENDMENT<\/p>\n
This Agreement and the Schedules, Exhibits and appendices attached hereto
\nand to be attached hereto, and the documents delivered pursuant hereto,
\nconstitute the entire Agreement and understanding between the parties hereto and
\nsupersede and revoke any prior agreement or understanding relating to the
\nsubject matter of this Agreement. No change, amendment, termination or
\nattempted waiver of any of the provisions hereof shall be binding upon any
\nparty, unless said act is in writing and signed by the President or other senior
\nofficer of the party to be bound.<\/p>\n
SECTION 12.3 COUNTERPARTS<\/p>\n
This Agreement may be executed simultaneously in two or more counterparts,
\neach of which shall be deemed an original and all of which together shall
\nconstitute but one and the same instrument.<\/p>\n
SECTION 12.4 EXPENSES<\/p>\n
Whether or not the transactions herein contemplated shall be consummated,
\nthe parties hereto will each pay their own fees, expenses and disbursements and
\nthose of their professional advisors in connection with the subject matter of
\nthis Agreement and all other costs and expenses incurred in performing and
\ncomplying with all conditions to be performed under this Agreement. Any such
\nfees, expenses or disbursements incurred by OutPost shall be subject to the
\ncovenant of OutPost and the Principal Shareholders set forth in Section 4.2.6.<\/p>\n
SECTION 12.5 FURTHER ASSURANCES<\/p>\n
Upon reasonable request from time to time, the parties hereto will deliver
\nand\/or execute such further instruments which are necessary to or appropriate
\nwith respect to the consummation of the transactions contemplated by this
\nAgreement. None of the documents or instruments requested hereunder shall
\ncontain an undertaking or representation not contained in this Agreement or
\ninconsistent with the understanding and representations contained in this
\nAgreement.<\/p>\n
SECTION 12.6 CONSTRUCTION<\/p>\n
Within this Agreement, the singular shall include the plural and the plural
\nshall include the singular, and any gender shall include all other genders, all
\nas the meaning and the context of this Agreement shall require.<\/p>\n
SECTION 12.7 JOINT AND SEVERAL OBLIGATIONS<\/p>\n
All obligations of the Principal Shareholders hereunder shall be the joint
\nand several obligations of all Principal Shareholders.<\/p>\n
-29-<\/p>\n
SECTION 12.8 GOVERNING LAW<\/p>\n
This Agreement shall be governed and enforced and the rights and
\nliabilities of all parties hereto shall be construed in accordance with the
\ninternal laws of the State of Washington, without giving effect to any conflict
\nof laws provisions.<\/p>\n
SECTION 12.9 COOPERATION<\/p>\n
The parties hereto will cooperate fully with each other and their
\nrespective counsel and accountants in connection with all steps to be taken as
\npart of their obligations under this Agreement.<\/p>\n
SECTION 12.10 SEVERABILITY<\/p>\n
The unenforceability or invalidity of any part or parts of this Agreement
\nshall not affect the enforceability or validity of the balance of the Agreement,
\nwhich shall remain in full force and effect.<\/p>\n
SECTION 12.11 SURVIVAL<\/p>\n
The covenants, agreements, representations and warranties of the parties
\ncontained herein or in any certificate or other writing or Exhibits delivered
\npursuant hereto or in connection herewith shall survive the Closing of the
\ntransactions contemplated herein.<\/p>\n
SECTION 12.12 HEADINGS<\/p>\n
The headings of the sections of this Agreement are inserted for convenience
\nonly and shall not constitute a part hereof.<\/p>\n
[The remainder of this pageintentionally left blank.]<\/p>\n
-30-<\/p>\n
IN WITNESS WHEREOF, the undersigned parties, acting through their duly
\nauthorized agents, have caused this Agreement to be duly executed as of the day
\nand year first written above.<\/p>\n
Principal Shareholders:<\/p>\n
PRINCIPAL SHAREHOLDERS:<\/p>\n
\/s\/ John Arnold \/s\/ Kurt Dahl \/s\/ David Wagner
\n———————- ———————- ————————–
\n John Arnold Kurt Dahl David Wagner<\/p>\n
RECENT INVESTORS:<\/p>\n
\/s\/ John W. Stanton \/s\/ Theresa E. Gillespie \/s\/ Donald Guthrie
\n———————- ———————— ————————–
\n John W. Stanton Theresa E. Gillespie Stanton Family Trust,
\n by Donald Guthrie, Trustee<\/p>\n
\/s\/ Douglas C. Lawrence \/s\/ Donald Guthrie \/s\/ Mikal J. Thomsen
\n———————- ———————- ————————–
\n Douglas C. Lawrence Donald Guthrie Mikal J. Thomsen<\/p>\n
The Walter Group, Inc.: Kirlin Partners LLC:<\/p>\n
By [illegible] By [illegible]
\n ————————— —————————-
\n Its: Chairman Its: Manager
\n ———————— ————————- <\/p>\n
InfoSpace, Inc.: OutPost Acquisition, Inc.:<\/p>\n
By Naveen Jain By Naveen Jain
\n ————————— —————————-
\n Its: Its:
\n ———————– ————————–<\/p>\n
OutPost Network, Inc.:<\/p>\n
By [illegible]
\n —————————
\n Its: President\/CEO
\n ———————— <\/p>\n
-31-<\/p>\n
EXHIBIT 1A<\/p>\n
TO THE AGREEMENT AND PLAN OF MERGER<\/p>\n
ARTICLES OF MERGER OF<\/p>\n
OUTPOST NETWORK, INC.<\/p>\n
AND<\/p>\n
OUTPOST ACQUISITION, INC.<\/p>\n
Pursuant to the provisions of RCW 23B.11.050, the following Articles of
\nMerger are executed for the purpose of merging OUTPOST ACQUISITION, INC., a
\nWashington corporation (the “Merging Corporation”) into OUTPOST NETWORK, INC., a
\nWashington corporation (the “Surviving Corporation”).<\/p>\n
1. The Plan of Merger is attached hereto as Exhibit A.
\n ——— <\/p>\n
2. The merger was duly approved by the shareholders of the Merging
\nCorporation and the Surviving Corporation pursuant to the provisions of RCW
\n23B.11.030.<\/p>\n
DATED this ___ day of ______________, 1998.<\/p>\n
OUTPOST NETWORK, INC.<\/p>\n
By:
\n ———————————————-
\n Signature<\/p>\n
———————————————-
\n Print\/Type Name<\/p>\n
———————————————-
\n Title<\/p>\n
OUTPOST ACQUISITION, INC.<\/p>\n
By:
\n ———————————————-
\n Signature<\/p>\n
———————————————-
\n Print\/Type Name<\/p>\n
———————————————-
\n Title<\/p>\n
-2-<\/p>\n
EXHIBIT 1A<\/p>\n
TO THE AGREEMENT AND PLAN OF MERGER<\/p>\n
PLAN OF MERGER<\/p>\n
OF<\/p>\n
OUTPOST NETWORK, INC.<\/p>\n
AND<\/p>\n
OUTPOST ACQUISITION, INC.<\/p>\n
WHEREAS, this is a Plan of Merger dated May ____ 1998, between OutPost
\nNetwork, Inc., a Washington corporation (hereinafter referred to as the
\n“Surviving Corporation” or sometimes as “OutPost”), and OutPost Acquisition,
\nInc., a Washington corporation (hereinafter referred to as the “Merging
\nCorporation” or sometimes as “Acquisition”) (the Surviving Corporation and
\nMerging Corporation are sometimes collectively referred to as the “Constituent
\nCorporations”); and<\/p>\n
WHEREAS, the Board of Directors of both corporations hereto deem it
\ndesirable and in the best interests of the corporations and their shareholders
\nthat Acquisition be merged into OutPost;<\/p>\n
NOW, THEREFORE, in consideration of the mutual promises and covenants, and
\nsubject to the conditions herein set forth, the merging corporations agree as
\nfollows:<\/p>\n
1. THE MERGER. The corporations shall be merged into a single corporation
\nby Acquisition merging into and with OutPost, the Surviving Corporation, which
\ncorporation shall survive the merger pursuant to the provisions of RCW
\n23B.11.010, et. seq. Upon such merger, the separate corporate existence of
\n ——-
\nAcquisition shall cease and the Surviving Corporation shall become the owner,
\nwithout other transfer, of all of the rights, obligations and property of the
\nMerging Corporation.<\/p>\n
2. Effective Date of Merger. The merger shall become effective on the
\ndate the Articles of Merger and any other documents required by the Business
\nCorporation Act of the State of Washington (the “Corporation Law”) shall be duly
\nexecuted, acknowledged or verified and filed with the Washington Secretary of
\nState in accordance with the Corporation Law (the “Effective Date”). If the
\nWashington Secretary of State requires any changes in the Articles of Merger as
\na condition to filing the Articles of Merger, both the Surviving Corporation and
\nthe Merging Corporation will execute<\/p>\n
necessary revisions incorporating such changes, provided such changes are not
\nmaterially inconsistent with or result in any material changes in the terms of
\nthe Agreement and Plan of Merger dated as of May __, 1998, by and among
\nInfoSpace, Inc., OutPost Network, Inc., Certain Principal Shareholders of
\nOutPost Network, Inc. and OutPost Acquisition, Inc. (hereinafter referred to as
\nthe “Agreement and Plan”).<\/p>\n
3. ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. At the
\nEffective Date and without any further action on the part of the Constituent
\nCorporations, the restated Articles of Incorporation of OutPost, as amended, a
\ncopy of which is attached hereto as Exhibit 1, shall be and remain the Articles
\n ———
\nof Incorporation of the Surviving Corporation. Such Articles of Incorporation
\nmay thereafter be altered, amended or repealed in accordance with the provisions
\nthereof or applicable law.<\/p>\n
4. BYLAWS OF THE SURVIVING CORPORATION. At the Effective Date and without
\nany further action on the part of the Constituent Corporations, the Bylaws of
\nthe OutPost, a copy of which is attached hereto as Exhibit 2, shall be and
\n ———
\nremain the Bylaws of the Surviving Corporation, until altered, repealed or
\namended in accordance with the provisions thereof and applicable law.<\/p>\n
5. CORPORATE GOVERNANCE. As of the Effective Date, the directors and
\nofficers of OutPost shall have resigned and at the Effective Date, the
\nshareholder of the Surviving Corporation shall elect replacement directors, and
\nthe new directors shall elect replacement officers of the Surviving Corporation,
\neach of such persons to hold office, subject to the applicable provisions of the
\nArticles of Incorporation and Bylaws of the Surviving Corporation, and
\napplicable law.<\/p>\n
6. CONVERSION OF SHARES. Upon the effectiveness of the merger, the manner
\nof converting and exchanging the shares of the Constituent Corporations shall be
\nas follows: InfoSpace, Inc., a Delaware corporation (hereinafter referred to as
\n“InfoSpace”), shall issue a total of not more than 3,000,000 shares of its
\ncommon stock, par value $.0001\/share. Each issued and outstanding share of the
\ncommon stock of OutPost (collectively “OutPost Stock”) shall, by virtue of the
\nmerger and without any action on the part of the holder thereof, automatically
\nbe converted into a fraction (the “Conversion Ratio”) of one fully paid and
\nnonassessable share of common stock of InfoSpace (“InfoSpace Common”). The
\nConversion Ratio shall be a fraction with a numerator equal to 3,000,000, and a
\ndenominator equal to the total number of shares of OutPost Stock issued and
\noutstanding immediately prior to the Effective Date. On or after the Effective
\nDate, all certificates representing shares of OutPost Stock shall be surrendered
\nto the Secretary of the Surviving Corporation, whereupon there shall be issued
\nto the respective holder of each such certificate a certificate representing the
\nnumber of shares of InfoSpace Common into which such shares have been converted
\nas provided herein.<\/p>\n
-2-<\/p>\n
7. ACQUISITION COMMON STOCK. Each share of common stock, no par value, of
\nAcquisition (“Acquisition Common Stock”) issued and outstanding immediately
\nprior to the merger shall, by virtue of the merger and without any action on the
\npart of the holder thereof, be automatically converted into and exchangeable for
\none share of the common stock, no par value, of the Surviving Corporation.<\/p>\n
8. NO FRACTIONAL SHARES. No fractional share of InfoSpace Common will be
\nissued in the merger, but, in lieu thereof, each holder of OutPost Stock who
\nwould otherwise be entitled to a fraction of a share of InfoSpace Common (after
\naggregating all fractional shares of InfoSpace Common to be received by such
\nholder) will be entitled to receive an amount of cash (rounded to the nearest
\nwhole cent) equal to the product of (a) the fraction multiplied by (b) $2.00.<\/p>\n
9. EXCHANGE OF SHARES; STOCK TRANSFER BOOKS. On the Effective Date of the
\nmerger, each holder of an outstanding certificate or certificates theretofore
\nrepresenting shares of OutPost Stock shall be entitled, upon surrender of such
\ncertificate or certificates to the Surviving Corporation, to receive in respect
\nof each share represented by such certificate or certificates, InfoSpace Common
\nin accordance with Section 1.6 of the Agreement and Plan, and if applicable,
\ncash in accordance with Section 1.8 of the Agreement and Plan. The cash
\npayment, if any, shall be made by corporate check of InfoSpace made payable to
\nthe holder of record of OutPost Stock as shown on Schedule 2.3 of the Agreement
\nand Plan in respect of which payment is being made. At the Effective Date of
\nthe merger there shall be no further registry of transfers on the records in
\nrespect of OutPost Stock outstanding immediately prior to the Effective Date of
\nthe merger. If any payment is to be made in the form of a check payable to a
\nname other than that in which the certificate for OutPost Stock surrendered is
\nregistered, or if InfoSpace Common is to be issued in a name other than that in
\nwhich the certificate for OutPost Stock surrendered is registered, it shall be a
\ncondition of such distribution that the certificate so surrendered shall be
\nproperly endorsed and otherwise in proper form for transfer and that the person
\nrequesting such payment or InfoSpace Common shall pay to the Surviving
\nCorporation any transfer or other taxes required, or shall establish to the
\nsatisfaction of the Surviving Corporation that such taxes have been paid or are
\nnot applicable. If, after the Effective Date of the merger, certificates are
\npresented to the Surviving Corporation, they shall be cancelled and exchanged
\nfor such cash payment and InfoSpace Common as provided herein.<\/p>\n
10. TREASURY AND OTHER STOCK. All shares of OutPost Stock which are held
\nby OutPost as treasury shares (if any) shall cease to exist as of the Effective
\nDate, without any conversion thereof or exchange with respect thereto.<\/p>\n
11. EXERCISE OF STOCK RIGHTS. On the Effective Date, any option, warrant
\nor other right to purchase shares of OutPost Stock (“OutPost Options”), which is
\noutstanding on the Effective Date, shall be cancelled unless exercised prior to
\nthe Effective Date.<\/p>\n
-3-<\/p>\n
12. SHAREHOLDER APPROVAL. This Plan of Merger shall be submitted to the
\nshareholders of each corporation for their approval in the manner provided by
\napplicable laws of the State of Washington at meetings to be held on or before
\nMay 20, 1998, or at such other time as the Board of Directors of each
\ncorporation shall agree. After approval by a vote of the holders of not less
\nthan two-thirds (2\/3rds) of the issued and outstanding shares of each
\ncorporation entitled to vote thereon, the Articles of Merger shall be filed as
\nrequired by the laws of the State of Washington.<\/p>\n
13. ABANDONMENT OF MERGER. In accordance with the terms of the Agreement
\nand Plan, the Board of Directors of either corporation may, in its discretion,
\nabandon this merger, subject to the rights of third parties under any contracts
\nrelating thereto, without further action or approval by the shareholders of the
\ncorporation, at any time prior to the filing date of the Articles of Merger with
\nthe Secretary of State.<\/p>\n
14. EXECUTION IN COUNTERPARTS. This Plan of Merger may be executed in any
\nnumber of counterparts and all such counterparts and copies shall be and
\nconstitute an original instrument.<\/p>\n
I CERTIFY, under penalty of perjury under the laws of the State of
\nWashington, that the foregoing is true and correct to the best of my knowledge.<\/p>\n
DATED May ___, 1998.<\/p>\n
SURVIVING CORPORATION:<\/p>\n
OUTPOST NETWORK, INC., a Washington corporation<\/p>\n
By
\n ———————————————–
\n Its
\n ——————————————-<\/p>\n
-4-<\/p>\n
I CERTIFY, under penalty of perjury under the laws of the State of
\nWashington, that the foregoing is true and correct to the best of my knowledge.<\/p>\n
DATED May ___, 1998.<\/p>\n
MERGING CORPORATION:<\/p>\n
OUTPOST ACQUISITION, INC., a Washington
\n corporation<\/p>\n
By
\n ———————————————–
\n Its
\n ——————————————-<\/p>\n
-5-<\/p>\n
EXHIBIT 1.5.2<\/p>\n
VOTING AGREEMENT
\n —————-<\/p>\n
THIS VOTING AGREEMENT (the “Agreement”) is made as of this _____ day of
\nMay, 1998 among Naveen Jain, John W. Stanton, Theresa E. Gillespie, the Stanton
\nFamily Trust, John Arnold, Kurt Dahl, Douglas C. Lawrence, Donald Guthrie, Mikal
\nJ. Thomsen, Kirlin Partners LLC, The Walter Group, Inc. and David Wagner
\n(collectively, the “Shareholders”), and shall be effective as of the Effective
\nDate as defined in the Agreement and Plan of Merger by and among InfoSpace,
\nInc., OutPost Network, Inc., certain shareholders of OutPost Network, Inc. and
\nOutPost Acquisition, Inc. dated as of May ___, 1998. From time to time, John
\nW. Stanton, Theresa E. Gillespie, the Stanton Family Trust, John Arnold, Kurt
\nDahl, Douglas C. Lawrence, Donald Guthrie, Mikal J. Thomsen, Kirlin Partners
\nLLC, The Walter Group, Inc., and David Wagner shall be collectively referred to
\nherein as the “Former OutPost Shareholders.”<\/p>\n
RECITALS:<\/p>\n
The Shareholders desire to provide for the election of nominees of
\nparticular persons as directors of InfoSpace, Inc., a Delaware corporation (the
\n“Company”) during the term of this Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the mutual promises and covenants
\ncontained herein, the parties agree as follows:<\/p>\n
1. Term. This Agreement shall terminate on the earlier to occur of
\n —-
\n(i) 6:00 P.M. Pacific Time on the second anniversary of this Agreement; or (ii)
\nthe closing of an underwritten registered public offering of the Company’s
\ncommon stock at a public offering price per share equal to or greater than $5.00
\nper share and from which the gross proceeds of sale exceed $10,000,000.<\/p>\n
2. Election of Directors.
\n ——————— <\/p>\n
(a) At any meeting of the shareholders of the Company (or in
\nconnection with any action taken by written consent of the shareholders of the
\nCompany) for the purpose of electing directors, Mr. Naveen Jain shall vote the
\nshares of InfoSpace common and\/or preferred stock entitled to vote and held by
\nhim so as to elect the following nominees as directors of the Company: first,
\nfor four persons who are nominated by Mr. Jain; and second, for Mr. John Arnold,
\nor another nominee of the Former OutPost Shareholders who then hold stock in the
\nCompany.<\/p>\n
(b) At any meeting of the shareholders of the Company (or in
\nconnection with any action taken by written consent of the shareholders of the
\nCompany) <\/p>\n
for the purpose of electing directors, the Former OutPost Shareholders who then
\nheld stock in the Company shall each vote the shares of InfoSpace common and\/or
\npreferred stock entitled to vote and held by such Former OutPost Shareholders so
\nas to elect the following nominees as directors of the Company: first, for four
\npersons who are nominated by Mr. Jain; and second, for Mr. John Arnold, or
\nanother nominee of the Former OutPost Shareholders.<\/p>\n
3. Resignation or Termination of John Arnold. During the term
\n —————————————–
\nhereof, in the event Mr. Arnold resigns from employment by OutPost Network, Inc.
\n(“OutPost”), a wholly-owned subsidiary of the Company, he shall concurrently
\nresign from his positions as a director of the Company and of OutPost, and the
\nFormer OutPost Shareholders who then hold shares in the Company shall nominate a
\nreplacement director to serve until the next annual meeting of shareholders for
\nthe Company. In the event Mr. Arnold’s employment is terminated by OutPost, and
\nMr. Arnold does not immediately resign from his positions as a director of the
\nCompany and of OutPost, then the Shareholders (with the exception of Mr. Arnold)
\nshall call a special meeting of the shareholders of the Company for the purpose
\nof voting whether to remove Mr. Arnold as a director for the Company. The
\nShareholders (with the exception of Mr. Arnold) agree to vote their shares in
\nfavor of removal, and upon such event, the Former OutPost Shareholders (except
\nMr. Arnold) who then hold stock in the Company shall nominate a replacement
\ndirector to serve until the next annual meeting of shareholders for the Company.<\/p>\n
4. Modification. This Agreement may only be amended by a written
\n ————
\ninstrument signed by each of the Shareholders.<\/p>\n
5. Binding Effect. This Agreement may not be assigned by any
\n ————–
\nShareholder without the consent of the other Shareholders, which may be withheld
\nin each such Shareholder’s sole discretion. Except as expressly provided to the
\ncontrary herein, this Agreement shall be binding upon and inure to the benefit
\nof the parties hereto and their permitted successors and each such successor
\nshall be expressly obligated to be bound by all of the terms and conditions of
\nthis Agreement. Shares sold by the Shareholders shall not be bound by the terms
\nof this Agreement and the legend set forth in Section 8 shall not remain on such
\nshares. This Agreement runs personally to the signatories hereof (and permitted
\nsuccessors) and is not an incident of ownership of the Company’s stock.<\/p>\n
6. Governing Law. This Agreement shall be governed by, and construed
\n ————-
\nin accordance with, the laws of the State of Washington as applied to contracts
\nentered into by Washington residents and wholly to be performed within
\nWashington.<\/p>\n
-2-<\/p>\n
7. Counterparts. This Agreement may be executed in two or more
\n ————
\ncounterparts, each of which shall be deemed an original, but all of which
\ntogether shall constitute one and the same instrument.<\/p>\n
8. Notices. Communications to the parties hereunder shall be given
\n ——-
\nin writing and shall be deemed effectively given upon personal delivery or upon
\ndispatch via registered or certified mail to a party at its address hereinafter
\nshown below its signature or at such other address as such party may designate
\nby 10 days advance written notice to the other party.<\/p>\n
9. Legend. Each certificate for the InfoSpace Shares owned by the
\n ——
\nShareholders shall bear the following legend:<\/p>\n
The securities represented hereby are subject to restrictions upon voting
\nwhich are set forth in that certain “Voting Agreement” dated May ___, 1998. A
\ncopy of such Voting Agreement may be obtained from the Company or its legal
\ncounsel.<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
\nthe day and year first above written.<\/p>\n
————————————————–
\n Naveen Jain
\n 8424 – 154th Avenue N. E.
\n Redmond, Washington 98052<\/p>\n
————————————————–
\n John W. Stanton
\n 2001 N.W. Sammamish Road, Suite 100
\n Issaquah, Washington 98027<\/p>\n
————————————————–
\n Theresa E. Gillespie
\n 2001 N.W. Sammamish Road, Suite 100
\n Issaquah, Washington 98027<\/p>\n
THE STANTON FAMILY TRUST<\/p>\n
-3-<\/p>\n
By:
\n ———————————————-
\n Donald Guthrie, Trustee<\/p>\n
2001 N.W. Sammamish Road, Suite 100
\n Issaquah, Washington 98027<\/p>\n
————————————————-
\n John Arnold
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
————————————————–
\n Kurt Dahl
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
————————————————–
\n David Wagner
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
————————————————–
\n Douglas C. Lawrence
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
————————————————–
\n Donald Guthrie
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
-4- <\/p>\n
————————————————–
\n Mikal J. Thomsen
\n (Street Address)
\n (City\/State) (Zip)<\/p>\n
KIRLIN PARTNERS LLC<\/p>\n
By:
\n ———————————————-
\n Its:
\n —————————————–<\/p>\n
(Street Address)
\n (City\/State) (Zip)<\/p>\n
THE WALTER GROUP, INC.<\/p>\n
By:
\n ———————————————-
\n Its:
\n —————————————–<\/p>\n
(Street Address)
\n (City\/State) (Zip)<\/p>\n
-5- <\/p>\n
SCHEDULE 2.3<\/p>\n
On April 8, 1998, the Board of Directors for OutPost unanimously adopted
\nthe proposed Plan of Merger of OutPost with Acquisition and recommended its
\napproval to the OutPost shareholders. On April 9, 1998 (the “Record Date”),
\nnotice of a special shareholders’ meeting to be held April 30, 1998 for
\nconsideration of the proposed merger was given to shareholders of record holding
\nthe three million five hundred eighty two thousand seven hundred fifty
\n(3,582,750) outstanding common shares of OutPost Stock. The shareholders of
\nrecord on the Record Date are set forth on Schedule 2.3A.<\/p>\n
On the Record Date, OutPost was in default with respect to convertible
\ndebentures held by various individuals (“Convertible Debenture Holders”)
\ntotaling approximately Five Hundred Forty Thousand Dollars ($540,000). OutPost
\nand the Convertible Debenture Holders have agreed in principle, subject to
\nexecution of definitive agreements, that the debentures will be surrendered in
\nexchange for the issuance of ten million eight hundred thousand (10,800,000)
\nshares of OutPost common stock. Thereafter, the Convertible Debenture Holders
\nshall have right as shareholders in OutPost, and shall have waived any and all
\nother rights previously existing under the convertible debentures.<\/p>\n
OutPost’s Board of Directors has previously authorized the issuance of
\nwarrants permitting the holders thereof to purchase up to Eight Million Nine
\nHundred Thirty Six Thousand (8,936,000) shares of OutPost Stock upon providing
\nOutPost with notice of exercise and the tender of the exercise price of one cent
\n($0.01) per share of OutPost Stock. These rights are held by the individuals
\nand entities identified on Schedule 2.3B.<\/p>\n
OutPost’s Board of Directors will recommend to its shareholders that
\nOutPost’s Articles of Incorporation be amended prior to the Effective Date to
\neliminate the Series B preferred shares and increase authorized common stock to
\nThirty Five Million (35,000,000) shares.<\/p>\n
OutPost and a former employee have settled, subject to execution of
\ndefinitive documents, the former employee’s claim that he was entitled to an
\nequity interest in OutPost. Prior to Effective Date, Fifty Thousand (50,000)
\nshares of OutPost Common Stock will be issued to Patrick Adkisson for no
\nadditional consideration.<\/p>\n
OutPost has agreed to issue two million (2,000,000) shares of its common
\nstock to Daniel Kranzler and one million (1,000,000) shares of its common stock
\nto The Walter Group in connection with financial consulting services rendered by
\neach of them to OutPost during 1997 and continuing to the Effective Date. These
\nadditional three million (3,000,000) shares shall be issued prior to the
\nEffective Date.<\/p>\n
Prior to the Effective Date, OutPost may issue up to five million six
\nhundred thirty one thousand two hundred fifty (5,631,250) shares for payment of
\nFive Cents ($0.05) per share to creditors and\/or existing shareholders. Such
\nconsideration will be paid in cash or as a reduction of amounts payable by
\nOutPost to such prospective shareholders. The names of all shareholders or
\ncreditors who may acquire shares as described in this paragraph are set forth on
\nSchedule 2.3C. As of the Effective Date no more than thirty two million
\n(32,000,000) shares of OutPost Stock shall be outstanding.<\/p>\n
-2-<\/p>\n
SCHEDULE 3.6<\/p>\n
InfoSpace is currently negotiating a financing transaction that would
\ninvolve the issuance of shares of InfoSpace Common. Definitive agreements have
\nnot yet been finalized. As of the date of this Agreement, the parties to that
\nnegotiation contemplate an investment of $3,000,000 to acquire 1,500,000 shares
\nof InfoSpace Common at a price of $2\/share. The contemplated investment also
\nincludes the issuance of warrants to acquire up to 3,750,000 shares of InfoSpace
\nCommon, which warrants would have a term of ten years and staggered exercise
\nprices. The warrants are subject to a right of repurchase by InfoSpace, which
\nright is reduced based on the investor’s performance in assisting InfoSpace
\nobtain additional financing over the course of approximately the next four
\nyears.<\/p>\n
InfoSpace is also considering entering into a significant distribution
\nagreement with a third party. Such a distribution agreement would be in
\nfurtherance of InfoSpace’s overall aim of increasing its viewership over the
\nInternet. Concluding such a distribution agreement would involve a substantial
\nfinancial commitment by InfoSpace, and InfoSpace may make another offering of
\nshares of InfoSpace Common and warrants to acquire InfoSpace Common in order to
\nraise additional capital so as to meet this financial commitment. OutPost and
\nits shareholders should be aware that in pursuing its business plan, InfoSpace
\n(1) may assume significant financial obligations, and (2) contemplates issuing
\nshares of InfoSpace Common in order to raise sufficient funds to meet such
\nobligations. The issuance of the shares and warrants discussed in the first
\nparagraph of this Schedule 3.6, and the potential issuance of additional shares
\nof InfoSpace Common Stock and warrants to acquire InfoSpace Common discussed in
\nthis second paragraph of Schedule 3.6, would result in dilution of the former
\nOutPost Shareholders’ interest in InfoSpace.<\/p>\n
SCHEDULE 3.9<\/p>\n
LITIGATION<\/p>\n
1. InfoSpace is involved in a dispute with a former consultant who claims
\nthe right to purchase shares of InfoSpace stock in connection with consulting
\nservices. The dispute is being mediated and the maximum number of InfoSpace
\nshares that could be subject to purchase in connection therewith is 3,500,000.<\/p>\n
2. A complaint for federal trademark infringement and unfair competition,
\nstatutory unfair practices, and common law trademark infringement and unfair
\ncompetition was filed in U.S. District Court for the Northern District of
\nCalifornia on February 18, 1998 by Infospace, Inc., a California corporation,
\nagainst InfoSpace.<\/p>\n
3. A complaint for specific performance, tortious termination of
\nemployment, fraud, breach of fiduciary duty, intentional infliction of emotional
\ndistress, and for injunctive relief was filed in Superior Court of California,
\nCounty of Santa Clara on May 15, 1998 by Mohammed Kaleemuddin, also known as
\nMark Kaleem, a former employee of InfoSpace, against InfoSpace, Naveen Jain,
\nand certain unnamed defendants.<\/p>\n
EXHIBIT 5.12<\/p>\n
INVESTMENT CERTIFICATE<\/p>\n
The undersigned shareholder (the “Shareholder”) of OutPost Network, Inc., a
\nWashington corporation (“OutPost”), will be receiving shares (the “Shares”) of
\nthe common stock, par value $.0001\/share, of InfoSpace, Inc., a Delaware
\ncorporation (“InfoSpace”), in connection with a transaction in which InfoSpace’s
\nwholly-owned subsidiary, OutPost Acquisition, Inc., a Washington corporation
\n(“Acquisition”), will be merged with and into OutPost (the “Merger”). The
\nMerger is to be accomplished in accordance with the terms of an Agreement and
\nPlan of Merger dated as of May ___, 1998 among InfoSpace, Acquisition, OutPost
\nand the OutPost shareholders named therein (the “Merger Agreement”). As a
\ncondition to the Merger, the Shareholder hereby represents as follows:<\/p>\n
1. The Shareholder has received and reviewed the Offering Memorandum
\nprepared in connection with the Merger, which includes copies of the following:<\/p>\n
(a) The Merger Agreement;<\/p>\n
(b) Certain financial statements of InfoSpace; and<\/p>\n
(c) Certain financial statements of OutPost.<\/p>\n
2. The Shareholder is acquiring all of the Shares for the Shareholder’s
\nown account and not with a view to or for sale in connection with any
\ndistribution of the Shares. The Shareholder specifically represents that the
\nentire legal and beneficial interest in the Shares is being acquired for, and
\nwill be held for, the Shareholder’s account only and not for the account of, or
\notherwise on behalf of, any other person.<\/p>\n
3. The Shareholder understands that the Shares to be issued in the Merger
\nwill not be registered under the Securities Act of 1933, as amended (the “Act”),
\nin reliance upon an exemption from the registration requirements of the Act.<\/p>\n
4. The Shareholder hereby agrees that he\/she will not sell, transfer,
\nassign, pledge, hypothecate or otherwise dispose of the Shares absent an
\neffective Registration Statement under the Act covering such disposition, or
\nwithout InfoSpace first receiving an opinion of counsel, which may be counsel
\nfor InfoSpace, reasonably acceptable to InfoSpace, and shall be to the effect
\nthat such sale, transfer, assignment, pledge, hypothecation or other disposition
\nis or will be exempt from the registration and prospectus delivery requirements
\nof the Act and the registration or qualification requirements of any applicable
\nstate securities laws.<\/p>\n
5. The Shareholder understands and agrees that all certificates evidencing
\nthe Shares to be issued to the Shareholder will bear substantially the following
\nlegend:<\/p>\n
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
\n 1933 OR ANY STATE SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
\n OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THE
\n SECURITIES ACT OF 1933 AND ANY SUCH APPLICABLE STATE SECURITIES ACTS
\n OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”<\/p>\n
6. Check one: [ ] the Shareholder is an accredited investor as defined in
\nRule 501(a) of Regulation D as adopted by the U.S. Securities and Exchange
\nCommission, or [ ] the Shareholder is not an accredited investor, but
\nacknowledges that John W. Stanton has acted as the Shareholder’s purchaser
\nrepresentative (as defined in Rule 501(h) of Regulation D as adopted by the U.S.
\nSecurities and Exchange Commission) in connection with evaluating the merits and
\nrisks of the Merger, and the Shareholder, acting together with Mr. Stanton, has
\nsuch knowledge and experience in financial and business matters, that the
\nShareholder is capable of evaluating the merits and risks of the prospective
\ninvestment.<\/p>\n
Dated: __________, 1998<\/p>\n
——————————————
\n Signature of Shareholder<\/p>\n
————————————————-
\n Print\/Type Name<\/p>\n
CONFIRMED AND ACCEPTED:<\/p>\n
INFOSPACE, INC.<\/p>\n
By:
\n ———————————
\n Naveen Jain, Its President<\/p>\n
-2-<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7855],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43079","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-infospace-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43079"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43079"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43079"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}