\nARTICLE 9 NONCOMPETITION AND NONDISCLOSURE………………………………. 29<\/p>\n 9.1 Noncompetition and Nondisclosure………………………………. 29
\n 9.2 Specific Performance…………………………………………. 30
\n 9.3 Reasonable Restraint…………………………………………. 30
\n 9.4 Severability………………………………………………… 30
\n 9.5 Independent Covenants………………………………………… 31
\n 9.6 Materiality…………………………………………………. 31 <\/p>\n
ARTICLE 10 TERMINATION AND ABANDONMENT…………………………………… 31<\/p>\n
ARTICLE 11 POST-CLOSING COVENANTS OF SELLER AND SHAREHOLDER………………… 32<\/p>\n
11.1 Further Assurances…………………………………………… 32
\n 11.2 UCC Matters…………………………………………………. 32
\n 11.3 Collection of Receivables…………………………………….. 32
\n 11.4 Retentionof Retained Business Records………………………….. 32
\n 11.5 Corporate Name Changes……………………………………….. 32 <\/p>\n
ARTICLE 12 MISCELLANEOUS……………………………………………….. 33<\/p>\n
12.1 Time is of the Essence……………………………………….. 33
\n 12.2 Governing Law……………………………………………….. 33
\n 12.3 Terms and Captions…………………………………………… 33
\n 12.4 Severability………………………………………………… 33
\n 12.5 Notices…………………………………………………….. 33
\n 12.6 Counterparts………………………………………………… 34
\n 12.7 Schedules and Exhibits……………………………………….. 35
\n 12.8 Survival……………………………………………………. 35
\n 12.9 Confidentiality……………………………………………… 35
\n 12.10 Press Releases and Announcements………………………………. 35
\n 12.11 Binding Effect………………………………………………. 35
\n 12.12 Assignment………………………………………………….. 35
\n 12.13 Entire Agreement; Modification of Agreement…………………….. 36
\n 12.14 Remedy at Law Inadequate……………………………………… 36
\n 12.15 Remedies Cumulative………………………………………….. 36
\n 12.16 Expenses……………………………………………………. 36
\n 12.17 No Third Party Beneficiaries………………………………….. 36 <\/p>\n
<\/c><\/s><\/table>\n
-iii-<\/p>\n
ASSET PURCHASE AGREEMENT<\/p>\n
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered
\ninto as of the 31st day of December, 1998, by and among WebMD, Inc., a Georgia
\ncorporation (“Purchaser”), certifiedemail.com, Inc., a Georgia corporation
\n(“Seller”) and Gary B. “Court” Coursey, Jr., an individual resident of Georgia
\nand the holder of all the voting stock of Seller (“Shareholder”).<\/p>\n
W I T N E S S E T H
\n – – – – – – – – – –<\/p>\n
WHEREAS, Seller has developed a proprietary system for certifying the
\ndelivery of electronic mail via the internet (the “System”); and<\/p>\n
WHEREAS, Seller is engaged in the business of marketing services
\n(“Services”) provided by the Seller using the System (the “Business”); and<\/p>\n
WHEREAS, Shareholder has represented that he owns all of the issued
\nand outstanding shares of voting securities of Seller (the “Voting Shares”); and<\/p>\n
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
\nto sell to Purchaser, substantially all of the assets and goodwill of Seller as
\nhereinafter described upon the terms and conditions hereinafter set forth; and<\/p>\n
WHEREAS, Purchaser and Seller desire that this Agreement shall set
\nforth their full and complete understanding of the terms and conditions under
\nwhich Seller shall sell and Purchaser shall purchase such assets and goodwill of
\nSeller;<\/p>\n
NOW THEREFORE, for and in consideration of the mutual promises herein
\ncontained, and for other good and valuable consideration, the receipt,
\nsufficiency and adequacy of which are hereby acknowledged, the parties hereto
\nagree as follows:<\/p>\n
ARTICLE 1<\/p>\n
PURCHASE OF ASSETS<\/p>\n
1.1 ASSETS.<\/p>\n
Subject to the terms and conditions hereof, on the Closing Date (as
\nhereinafter defined) Seller and Shareholder shall sell, transfer, assign and
\nconvey to Purchaser, and Purchaser shall purchase and acquire from Seller, all
\nof the following properties, assets, rights, contracts and businesses
\n(collectively, the “Assets”) (but, except as set forth in Section 1.3, none of
\nthe liabilities associated therewith) of Seller and Shareholder:<\/p>\n
-1-<\/p>\n
(a) Personal Property. All of the furniture, fixtures, furnishings,
\n —————–
\nmachinery, equipment, computer hardware, peripherals and accessories, vehicles
\n(including motor vehicle titles and current registrations), technical bulletins,
\nproduct literature, office supplies and all other tangible personal property of
\nwhatever type or description owned or leased by Seller or otherwise used in the
\nBusiness (the “Personal Property”) and all attachments thereto and personal
\nproperty (including tools and spare parts) associated therewith including,
\nwithout limitation, those items listed on Schedule 1.1(a) attached hereto;
\n —————<\/p>\n
(b) Inventory. All right, title and interest in and to the inventory,
\n ———
\nmaterials, parts, work in progress, returned goods and other items used in or
\narising out of the conduct of the Business including, without limitation, those
\nitems set forth in Schedule 1.1(b) attached hereto;
\n —————<\/p>\n
(c) Customer Contracts. All right, title and interest in and to all
\n ——————
\nwritten and oral contracts and other agreements to provide e-mail services
\n(“Customer Contracts”) set forth in Schedule 1.1(c), attached hereto and marked
\n —————
\nwith an “*”; provided, however, that Purchaser is not assuming nor is obligated
\nto fulfill, by reason of this Agreement, any obligation, guarantee or
\nresponsibility to any customer under the Customer Contracts or otherwise which
\nresults from the performance or provision of any services or actions by Seller
\nor failure by Seller to provide any services or actions prior to the Closing
\nDate;<\/p>\n
(d) Cash and Cash Equivalents All right, title and interest in and to all
\n ————————-
\ncash of the Seller which is on hand as of the Closing Date including, without
\nlimitation, cash in the accounts set forth in Schedule 1.1(d) attached hereto;
\n —————<\/p>\n
(e) Accounts and Receivables. All right, title and interest in and to all
\n ————————
\nmonies, sums and amounts held by or owed to the Seller in or in connection with
\nall accounts, accounts receivable, notes, notes receivable, instruments, drafts,
\ndocuments, chattel paper and other receivables and rights to the payment of
\nmoney or receipt of other benefits which remain uncollected or unreceived on the
\nClosing Date, whether or not evidenced by a writing or reflected in the
\nfinancial statements to be delivered by Seller to Purchaser pursuant to Section
\n3.6 hereof (the “Receivables”), including, without limitation, those
\nparticularly set out in Schedule 1.1(e) attached hereto;
\n —————
\n (f) Operating Contracts. All rights of Seller pursuant to employment
\n ——————-
\nagreements, nondisclosure agreements, confidentiality agreements, invention
\nassignment agreements, covenants not to compete, licenses, personal service
\ncontracts, data processing contracts, joint venture or partnership agreements,
\ncontracts with any labor organizations, supplier contracts, loan agreements,
\nbonds, mortgages, options to purchase land and other material contracts
\n(“Operating Contracts”) including, but not limited to, those set forth on
\nSchedule 1.1(f) attached hereto, but excluding those set forth on Schedule 1.2
\n————— ————
\nattached hereto; provided, however, that Purchaser is not assuming nor is
\nobligated to fulfill, by reason of this Agreement, any obligation, guarantee or
\nresponsibility to any party under the Operating Contracts or otherwise which
\nresults from the performance or provision of any services or actions by Seller
\nor failure by Seller to provide any services or actions;<\/p>\n
-2-<\/p>\n
(g) Intellectual Property. All right, title and interest of Seller in and
\n ———————
\nto any intellectual property including, without limitation:<\/p>\n
(i) patents, patent applications, patent disclosures, and
\nimprovements thereto, whether registered or unregistered, including, without
\nlimitation, those described in Schedules 3.16.(a), 3.16(b), 3.16(d), 3.16(e),
\n ———————————————-
\nand 3.16(g);
\n———–<\/p>\n
(ii) trademarks, service marks, logos, internet domain names, trade
\nnames and corporate names, whether registered or unregistered, and registrations
\nand applications for registration thereof, including, without limitation, those
\ndescribed in Schedules 3.16.(a), 3.16(b), 3.16(d), 3.16(e), and 3.16(g);
\n ———————————————————-<\/p>\n
(iii) copyrights, whether registered or unregistered, and
\nregistration and applications for registration thereof, including, without
\nlimitation, those described in Schedules 3.16.(a), 3.16(b), 3.16(d), 3.16(e),
\n ———————————————-
\nand 3.16(g);
\n———–<\/p>\n
(iv) computer software (including any source or object codes thereof
\nor documentation relating thereto), data and documentation, including, without
\nlimitation, those items described in Schedules 3.16.(a), 3.16(b), 3.16(d),
\n ————————————-
\n3.16(e), and 3.16(g);
\n——————–<\/p>\n
(v) trade secrets and confidential business information, know-how,
\nmanufacturing and production processes and techniques, research and development
\ninformation, drawings, specifications, designs, plans, proposals, technical
\ndata, copyrightable work, financial, marketing and business data, pricing and
\ncost information, business, customer and supplier lists, including, without
\nlimitation, those described in Schedules 3.16.(a), 3.16(b), 3.16(d), 3.16(e),
\n ———————————————-
\nand 3.16(g).
\n———–<\/p>\n
The foregoing shall be collectively known as the “Intellectual Property.”<\/p>\n
(h) Intangible Property. Except as otherwise provided in this Agreement,
\n ——————-
\nall right, title and interest in all:<\/p>\n
(i) claims, deposits, prepayments, refunds, causes of action,
\nchoses in action, rights of recovery, rights of set off and rights of recoupment
\n(including any such item relating to the payment of any federal, state or local
\ntax) arising in connection with the Business, including, without limitation,
\nthose described in Schedule 1.1(h), attached hereto; and
\n —————<\/p>\n
(ii) franchises, approvals, permits, licenses, orders,
\nregistrations, certificates, variances and similar rights obtained from
\ngovernments and governmental agencies for use in connection with the Business,
\nincluding, without limitation, those described in Schedule 1.1(h).
\n —————<\/p>\n
(i) Other Assets. All other assets and rights relating to the Business
\n ————
\nnot specifically enumerated or excluded herein, including but not limited to,
\nall records relating to products and customers of the Business since its
\ninception, copies of records and data maintained on computer systems, all other
\ntransferable rights in and to intangible assets used or held for use in the
\nBusiness,<\/p>\n
-3-<\/p>\n
including goodwill, all proceeds (including insurance policies and proceeds of
\ninsurance) and products related to the Assets and the Business, all right, title
\nand interest to all books, ledgers, files, documents, correspondence, telephone
\nnumbers, telephone directory advertising, all state unemployment and worker’s
\ncompensation reserve amounts and experience rates to the extent permitted or
\nrequired under the laws of the state of Georgia, reports and other printed
\nmaterials; provided, however, that Seller may retain possession of such books
\nand records that Seller is legally required to maintain, but shall keep such
\nrecords at its principal place of business and shall provide Purchaser
\nreasonable access thereto after the Closing Date.<\/p>\n
1.2 ASSETS EXCLUDED.<\/p>\n
Notwithstanding the foregoing, the Assets shall not include any of the
\nfollowing: the corporate seals, certificates of incorporation, minute books,
\nstock books, tax returns, books of account or other records having to do with
\nthe corporate organization of Seller; the rights which accrue or will accrue to
\nSeller under this Agreement; the rights to any of Seller’s claims for any
\nfederal, state, local, or foreign tax refunds; or the assets, properties or
\nrights set forth on Schedule 1.2, attached hereto.
\n ————<\/p>\n
1.3 LIABILITIES.<\/p>\n
Schedule 1.3 sets forth all of the mature and contingent liabilities of any
\n ————
\nnature whatsoever of Seller existing as of the date of this Agreement. As of the
\nClosing Date, Purchaser shall assume and agree to discharge only those
\nobligations, liabilities and duties of Seller for certain trade payables and
\naccrued expenses related to the Assets (which shall not exceed the current fair
\nmarket value of the related Assets and shall not include liabilities owed to
\npersons related to Seller or its officers) set forth in Schedule 1.3(a) attached
\n —————
\nhereto (the “Liabilities”). Except as specifically provided in Schedule 1.3(a),
\n —————
\nit is expressly understood and agreed between the parties hereto that:<\/p>\n
(a) General Warranties of Title. The Assets shall be conveyed or assigned
\n —————————
\nby Seller to Purchaser, with general warranties of title, free and clear of any
\nand all liens, restrictions, easements, security interests, security agreements,
\nsecurity deeds, claims and encumbrances (including leases), and Purchaser shall
\nnot be deemed to have assumed or to have taken any Assets subject to, and Seller
\nshall be solely liable and responsible for satisfying and discharging in a
\ntimely manner, all other liabilities and obligations of Seller, whether known or
\nunknown, mature or contingent.<\/p>\n
(b) Seller’s Breach under Contracts and Agreements. Purchaser shall not
\n ———————————————-
\nassume, and Seller shall remain liable for, all claims and liabilities, whether
\narising on or before, or subsequent to Closing, resulting from Seller’s or
\nShareholder’s breach, on or before Closing, of any covenant, condition or other
\nobligation required of Seller or Shareholder under any contract or agreement
\nincluding, without limitation, any contract or agreement to provide e-mail
\nservices or tracking services.<\/p>\n
(c) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 1.3, IT IS EXPRESSLY
\nUNDERSTOOD AND AGREED THAT PURCHASER SHALL NOT ASSUME AND IS NOT ASSUMING, NOR
\nSHALL PURCHASER BECOME LIABLE, OBLIGATED<\/p>\n
-4-<\/p>\n
OR RESPONSIBLE FOR THE PAYMENT OF, ANY DEBTS, LIABILITIES OR OBLIGATIONS OR THE
\nPERFORMANCE OF ANY DUTIES OF SELLER, OF ANY KIND OR NATURE WHATSOEVER, WHETHER
\nNOW OR HEREAFTER ARISING AND WHETHER CONTINGENT OR LIQUIDATED IN AMOUNT,
\nINCLUDING, WITHOUT LIMITATION, ANY DEBTS, LIABILITIES, OBLIGATIONS OR DUTIES
\nARISING OUT OF ACCOUNTS PAYABLE, TAX LIABILITIES, EMPLOYEE BENEFITS, CONTRACTS,
\nAGREEMENTS OR OTHER TYPES OF LIABILITIES OF SELLER OR RELATED TO THE OPERATION
\nOF THE BUSINESS.<\/p>\n
1.4 CLOSING.<\/p>\n
The closing (the “Closing”) of all the transactions contemplated herein
\nshall take place not later than the 31st day of December, 1998 (the “Closing
\nDate”) at 10:00 a.m., Atlanta, Georgia Time, at the offices of Nelson Mullins
\nRiley & Scarborough, L.L.P., First Union Plaza, 999 Peachtree Street, N.E.,
\nSuite 1400, Atlanta, Georgia 30309, or at such other time and place as the
\nparties shall mutually agree. Exclusive possession of the Assets shall be
\ndelivered to Purchaser at Closing.<\/p>\n
(a) Deliveries By Seller and Shareholder. At the Closing, Seller and
\n ————————————
\nShareholder shall deliver to Purchaser:<\/p>\n
(i) duly executed assignments, bills of sale, deeds, certificates
\nof title and other instruments of conveyance sufficient to transfer and vest in
\nPurchaser good and marketable title to the Assets, with general warranties of
\ntitle, free and clear of any and all liens, restrictions, easements, security
\ninterests, security agreements, security deeds, claims and encumbrances
\n(including leases), except those liabilities specifically assumed by Purchaser
\npursuant to Section 1.3 hereof, together with any consents, permits and
\napprovals that may be required of any third parties;<\/p>\n
(ii) certificates executed by a duly authorized executive officer of
\nSeller and by Shareholder to the effect that all warranties and representations
\nof Seller and Shareholder contained in this Agreement are true and correct at
\nand as of the Closing and all conditions precedent to the obligations of
\nPurchaser to consummate the transactions contemplated herein, not otherwise
\nwaived by Purchaser, have been fulfilled by Seller and Shareholder;<\/p>\n
(iii) all consents to the assignment of any contracts or other
\nagreements which require such consents prior to sale, assignment or other
\ntransfer of such contracts or other agreements;<\/p>\n
(iv) a certificate of incumbency certified by Seller’s secretary
\ntogether with certified copies, dated as of Closing, of the resolutions of
\nShareholder and of the board of directors of Seller, unanimously approving and
\nauthorizing this Agreement and the transactions contemplated hereby;<\/p>\n
(v) true and correct copies, certified by Seller’s secretary, of
\nthe Articles of Incorporation and Bylaws of Seller;<\/p>\n
-5-<\/p>\n
(vi) certificates, dated not more than ten (10) days prior to the
\nClosing Date, from Seller’s state of incorporation and each state in which
\nSeller is qualified to conduct its Business evidencing the good standing of
\nSeller in each such state; and<\/p>\n
(vii) an Escrow Agreement, substantially in the form attached hereto
\nas Exhibit A (the “Escrow Agreement”); and
\n ———<\/p>\n
(viii) such other certificates or documents reasonably requested by
\nPurchaser.<\/p>\n
(b) Deliveries by Purchaser. At the Closing Purchaser shall deliver to
\n ———————–
\nSeller and Shareholder:<\/p>\n
(i) the Purchase Price as provided in Article 2 hereof;<\/p>\n
(ii) an Assumption Agreement, substantially in the form attached
\nhereto as Exhibit B;
\n ———-<\/p>\n
(iii) the Escrow Agreement; and<\/p>\n
(iv) such other certificates or documents reasonably requested by
\nSeller.<\/p>\n
(c) Original Contracts and Records. Simultaneously with the deliveries
\n ——————————
\nrequired by Section 1.4(a) above, Seller and Shareholder shall also deliver
\noriginal counterparts of all of the agreements, contracts, commitments, leases,
\nplans, bids, quotations, proposals, instruments, computer programs and software,
\ndata bases whether in the form of diskettes, computer tapes or otherwise,
\nrelated object and source codes, manuals and guidebooks, price books and price
\nlists, customer and subscriber lists, supplier lists, sales records, files,
\ncorrespondence, legal opinions, rulings issued by governmental entities, and
\nother documents, books, records, papers, files, office supplies and data
\nbelonging to Seller or Shareholder which are part of the Assets, and all such
\nsteps will be taken as may be required to put Purchaser in actual possession and
\noperating control of the Assets.<\/p>\n
(d) Third Party Consents. Seller represents and warrants that no person
\n ——————–
\nother than Purchaser has any agreement, option, commitment or right to acquire
\nany of Seller’s assets, properties or rights or interests therein.<\/p>\n
(e) Further Assurances. Seller and Shareholder from time to time after
\n ——————
\nthe Closing, at Purchaser’s request, will execute, acknowledge and deliver to
\nPurchaser such other instruments of conveyance and transfer and will take such
\nother actions and execute and deliver such other documents, certifications and
\nfurther assurances as Purchaser may reasonably require in order to vest more
\neffectively in Purchaser, or to put Purchaser more fully in possession of, any
\nof the Assets. Each of the parties hereto will cooperate with the other and
\nexecute and deliver to the other parties hereto such other instruments and
\ndocuments and take such other actions as may be<\/p>\n
-6-<\/p>\n
reasonably requested from time to time by any other party hereto as necessary to
\ncarry out, evidence and confirm the intended purposes of this Agreement.<\/p>\n
ARTICLE 2<\/p>\n
PURCHASE PRICE
\n2.1 PURCHASE PRICE.<\/p>\n
(a) Subject to the Escrow Agreement, the purchase price for all of the
\nAssets (the “Purchase Price”) shall be the assumption of the liabilities set
\nforth on Schedule 1.3(a) hereto and the issuance by Purchaser to Seller of
\n —————
\n50,000 shares of Purchaser’s Series D Common Stock (the “WebMD Shares”) to be
\ndelivered as provided in Section 2.2 herein. The WebMD Shares shall be held in
\nescrow and transferred to Seller’s shareholders in accordance with the Escrow
\nAgreement in the percentages set forth on Schedule 2.1, and Seller shall take
\n ————
\nall action necessary to cause the WebMD Shares to be distributed in such manner.
\nThe WebMD Shares will be restricted securities and shall be marked with
\nsubstantially the following legend:<\/p>\n
“These securities have not been registered under the Securities
\n Act of 1933, as amended (the “1933 Act”), or under the provisions
\n of any applicable state securities laws, but have been acquired
\n by the registered holder hereof for purposes of investment and in
\n reliance on statutory exemptions under the 1933 Act, and under
\n any applicable state securities laws. These securities may not be
\n sold, pledged, transferred or assigned except in a transaction
\n which is exempt under provisions of the 1933 Act and any
\n applicable state securities laws or pursuant to an effective
\n registration statement; and in the case of an exemption, only if
\n the Company has received an opinion of counsel satisfactory to
\n the Company that such transaction does not require registration
\n of these securities.”<\/p>\n
Seller warrants that Schedule 2.1 contains a complete and accurate list of
\n ————
\nall holders of securities of Seller (together with the class and number of
\nsecurities held by each such holder).<\/p>\n
(b) In connection with the issuance of any WebMD Shares to Seller or
\nSeller’s shareholders, such parties will execute and deliver to Purchaser and
\nthe other shareholders of Purchaser a joinder agreement to the Restated
\nShareholders Agreement, dated as of October 18, 1996, as amended, among
\nPurchaser and Purchaser’s shareholders named therein and attached hereto as
\nExhibit C (“Shareholders Agreement”). The WebMD Shares shall be marked with a
\n———
\nlegend referencing the terms and conditions of the Shareholders Agreement.<\/p>\n
2.2 PAYMENT OF PURCHASE PRICE.<\/p>\n
At the Closing, Purchaser will deliver:<\/p>\n
(a) to the Seller, no shares of Purchaser’s Series D Common Stock; and<\/p>\n
-7-<\/p>\n
(b) to the Escrow Agent, 50,000 shares of Purchaser’s Series D Common
\nStock (the “Escrow Amount”) to be held by the Escrow Agent on the terms and
\nconditions as set forth in the Escrow Agreement.<\/p>\n
2.3 TRANSFER TAXES AND FILING FEES.<\/p>\n
Seller shall be responsible for and shall pay any and all costs and
\nexpenses for taxes, fees, stamps, charges, and all documentary, recording or
\nfiling fees payable in connection with the transfer of the Assets (collectively,
\nthe “Fees”).<\/p>\n
Seller warrants that it has the financial resources to pay the Fees and
\nwill not fail to pay the Fees after the Closing.<\/p>\n
ARTICLE 3<\/p>\n
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER<\/p>\n
Seller and Shareholder hereby jointly and severally make each of the
\nfollowing representations and warranties to Purchaser, each of which is true and
\ncorrect on the date hereof and will be true and correct on the Closing Date,
\nexcept as expressly disclosed herein, each of which shall be unaffected by any
\ninvestigation heretofore or hereafter made by Purchaser and each of which shall
\nsurvive Closing and the transactions contemplated hereby:<\/p>\n
3.1 ORGANIZATION AND GOOD STANDING.<\/p>\n
Seller is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Georgia, and has the full power and
\nauthority to own and lease its properties and to operate the Business in all
\nplaces where it does business. Seller’s principal place of business is located
\nin Fulton County, Georgia, and has been so located since its incorporation.<\/p>\n
3.2 AUTHORIZATION FOR AGREEMENT.<\/p>\n
The execution, delivery and performance of this Agreement by Seller and
\nShareholder and the consummation of the transactions contemplated hereby have
\nbeen duly authorized by all necessary corporate action of Seller, all requisite
\ncorporate actions have been taken by Seller to carry out the terms of this
\nAgreement, and Seller has delivered to Purchaser a Secretary’s Certificate which
\nevidences such corporate actions.<\/p>\n
-8-<\/p>\n
3.3 AUTHORITY.<\/p>\n
All of the Voting Shares are owned by Shareholder, and, except as listed on
\nSchedule 3.3 attached hereto, are free and clear of all liens, encumbrances and
\n————
\nclaims of every kind. Shareholder and Seller have the full legal right, power
\nand authority to enter into this Agreement and to consummate the transactions
\ncontemplated hereby to the extent required. Neither the execution nor the
\ndelivery of this Agreement nor the consummation of the transactions contemplated
\nconflicts or will conflict with or results or will result in a breach of
\nSeller’s Articles of Incorporation, Bylaws, or the terms, conditions or
\nprovisions of any undertaking to which Shareholder or Seller are parties or by
\nwhich Seller, Shareholder or Seller’s Business or Assets are bound. This
\nAgreement constitutes the valid and binding obligation of Shareholder and
\nSeller, enforceable against each of them in accordance with its terms.<\/p>\n
3.4 CAPITAL STOCK.<\/p>\n
The authorized capital stock of Seller consists solely of 20 million
\nshares of common stock, no par value per share; 10 million shares are voting
\nshares designated as Class A Common Stock, of which 3.6 million shares are
\nissued and outstanding; and 10 million shares are nonvoting shares designated as
\nClass B Common Stock, of which 333,337 shares are issued and outstanding. Each
\nshare of Seller’s stock is duly and validly authorized and issued, fully paid
\nand non-assessable, and was not issued in violation of the preemptive rights of
\nany past or present shareholder. In addition, each share of Seller’s stock has
\nbeen issued in compliance with all federal and state securities laws. No option,
\nwarrant, call, conversion right or commitment of any kind exists which obligates
\nSeller to issue any of its authorized but unissued capital stock except as
\ndisclosed on Schedule 3.4 hereto.
\n ————<\/p>\n
3.5 VOTING STRUCTURE.<\/p>\n
Immediately upon execution of this Agreement, Shareholder will relinquish
\nall but one share of Shareholder’s Class A Common Stock. Otherwise, no change in
\nvoting structure or relative ownership of Seller is contemplated or will be made
\nafter the date of this Agreement.<\/p>\n
3.6 FINANCIAL STATEMENTS.<\/p>\n
Shareholder and Seller have delivered to Purchaser copies of the financial
\nstatements (collectively, the “Financial Statements”) of Seller attached hereto
\nas Schedule 3.6.
\n ————<\/p>\n
Except as noted in Schedule 3.6, such Financial Statements fairly present
\n ————
\nthe financial condition and results of the operations of Seller as of the date
\nand for the periods indicated thereon.<\/p>\n
3.7 DISCLOSURE OF LIABILITIES.<\/p>\n
Shareholder and Seller have delivered to Purchaser an accurate list as of
\nthe Balance Sheet Date, attached hereto as Schedule 1.3, of all liabilities of
\n ————
\nSeller, which are reflected in the most recent available Balance Sheet and all
\nliabilities incurred thereafter, whether incurred in the ordinary course of
\nbusiness or otherwise which are not otherwise reflected in the Balance Sheet of
\nany kind,<\/p>\n
-9-<\/p>\n
character and description, whether accrued, absolute, secured or unsecured,
\ncontingent or otherwise, together with, in the case of those liabilities which
\nare not fixed, an estimate of the maximum amount which may be payable. For each
\nsuch liability for which the amount is not fixed or is contested, Shareholder
\nand Seller have provided the following information:<\/p>\n
(a) a summary description of the liability together with the following:<\/p>\n
(i) copies of all relevant documentation relating thereto;<\/p>\n
(ii) amounts claimed and any other action or relief sought; and<\/p>\n
(iii) name of claimant and all other parties to the claim, suit or
\nproceeding.<\/p>\n
(b) the name of each court or agency before which such claim, suit or
\nproceeding is pending;<\/p>\n
(c) the date such claim, suit or proceeding was instituted; and<\/p>\n
(d) a reasonable best estimate by the Shareholder and Seller of the
\nmaximum amount, if any, which is likely to become payable with respect to each
\nsuch liability.<\/p>\n
Except as set forth on Schedule 1.3, Seller has no, and will not have as of
\n ————
\nthe Closing Date any additional liabilities nor is there any basis for any
\npresent or future charge, complaint, action, suit, proceeding, hearing,
\ninvestigation, claim or demand against Seller giving rise to any liabilities
\nwhich have not been disclosed on the most recent available Balance Sheet or
\nwhich have arisen since the Balance Sheet Date outside of the ordinary course of
\nbusiness.<\/p>\n
3.8 PERSONAL PROPERTY.<\/p>\n
Schedule 1.1(a) contains an accurate and complete list and description as
\n —————
\nof the Balance Sheet Date and as of the date hereof, of all personal property
\nowned or leased by Seller, including true and correct copies of leases for
\nequipment used in the operation of the Business of Seller and including an
\nindication as to which assets were formerly owned by business or personal
\naffiliates of Shareholder or Seller. Except as shown on Schedule 1.1(a), all of
\n —————
\nthe furniture, fixtures, furnishings, machinery, equipment, vehicles (including
\nmotor vehicle titles and current registrations) and other tangible personal
\nproperty are in good working order and condition, ordinary wear and tear
\nexcepted, free from defects (latent and patent), have been maintained in
\naccordance with normal industry practice, and are suitable for the purposes for
\nwhich they are presently used. All equipment leases for leased personalty set
\nforth on Schedule 1.1(a) are in full force and effect and constitute valid and
\n —————
\nbinding agreements of the parties (and their successors) thereto in accordance
\nwith their respective terms.<\/p>\n
-10-<\/p>\n
3.9 OWNED REAL PROPERTY.<\/p>\n
Schedule 3.9 contains an accurate and complete list of all real property
\n ————
\nowned by Seller as of the Balance Sheet Date and as of the date hereof (the
\n“Real Property”), together with all buildings and structures presently situated
\nor to be constructed thereon, rents, issues and profits thereof, all deferred or
\nunpaid items with respect thereto, all mineral rights on or underneath the Real
\nProperty and all easements, appurtenances and rights appurtenant thereto or
\notherwise arising in connection therewith. With respect to such Real Property:<\/p>\n
(a) Good and Marketable Title. Seller has good and marketable title to
\n ————————-
\nthe Real Property, free and clear of any security interests, easements,
\ncovenants, or other restrictions, except for (i) installments of special
\nassessments not yet delinquent and (ii) recorded easements, covenants, and other
\nrestrictions which do not impair the current use, occupancy, value, or the
\nmarketability of title of the Real Property;<\/p>\n
(b) Pending or Threatened Actions. There are no (i) pending or threatened
\n —————————–
\ncondemnation proceedings related to the Real Property, (ii) pending or
\nthreatened litigation or administrative actions relating to the Real Property,
\nor (iii) other matters adversely affecting the current use, occupancy, or value
\nthereof; <\/p>\n
(c) Legal Description and Compliance with all Laws. The legal description
\n ———————————————-
\nfor the Real Property contained in the deeds thereof describe such parcels fully
\nand adequately, the buildings and improvements are located within the boundary
\nlines of the described parcels of land, are not in violation of applicable
\nsetback requirements, zoning laws, and ordinances (and none of the properties or
\nbuildings or improvements thereon are subject to “permitted non-conforming use”
\nof “permitted non-conforming structure” classifications), and do not encroach on
\nany easement which may burden the land, the land does not serve any adjoining
\nproperty for any purpose inconsistent with the use of the land, the property is
\nnot located within a flood plain or subject to any similar type restriction for
\nwhich any permits or licenses necessary to the use thereof have not been
\nobtained, and access to the property is provided by paved public right-of-way
\nwith adequate curb cuts available;<\/p>\n
(d) Governmental Approvals. All facilities, including all buildings and
\n ———————-
\nstructures presently situated or to be constructed (the “Facilities”) on the
\nReal Property, have received all approvals of governmental authorities
\n(including licenses and permits) required in connection with the ownership or
\noperation thereof and have been operated and maintained in accordance with
\napplicable laws, rules, and regulations;<\/p>\n
(e) Additional Leases or Agreements. There are no leases, subleases,
\n ——————————-
\nlicenses, concessions, or other agreements, written or oral, granting to any
\nparty or parties the right of use or occupancy of any portion of the parcels of
\nReal Property;<\/p>\n
(f) Options. There are no outstanding options or rights of first refusal
\n ——-
\nto purchase the Real Property or any portion thereof or interest therein;<\/p>\n
-11-<\/p>\n
(g) Possession. There are no other parties in possession of the Real
\n ———-
\nProperty or any portion thereof;<\/p>\n
(h) Adequate Service. All Facilities located on the Real Property are
\n —————-
\nsupplied with utilities and other services necessary for the operation of such
\nFacilities, including gas, electricity, water, telephone, sanitary sewer, and
\nstorm sewer, all of which services are adequate in accordance with applicable
\nlaws, ordinances, rules, and regulations and are provided via public road or via
\npermanent, irrevocable, appurtenant easements benefiting the Real Property; and<\/p>\n
(i) Access. Each parcel of Real Property abuts on and has direct
\n ——
\nvehicular access to a public road or access via permanent, irrevocable,
\nappurtenant easements benefiting the Real Property.<\/p>\n
3.10 LEASEHOLD INTERESTS.<\/p>\n
Schedule 3.10 contains an accurate and complete list of all leasehold
\n ————–
\ninterests held by Seller as of the Balance Sheet Date and as of the date hereof
\n(the “Leasehold Property”), together with all buildings and structures presently
\nsituated or to be constructed thereon, rents, issues and profits thereof, all
\ndeferred or unpaid items with respect thereto, all mineral rights on or
\nunderneath the Leasehold Property and all easements, appurtenances and rights
\nappurtenant thereto or otherwise arising in connection therewith granted under
\nthe leasehold. Seller has delivered to Purchaser correct and complete copies of
\nthe lease granting the leasehold interests in the Leasehold Property (the
\n“Leases”). With respect to each such Lease:<\/p>\n
(a) Full Force and Effect. The Lease is legal, valid, binding,
\n ———————
\nenforceable, and in full force and effect;<\/p>\n
(b) Full Force and Effect after Closing. The Lease will continue to be
\n ———————————–
\nlegal, valid, binding, enforceable, and in full force and effect on identical
\nterms following the Closing;<\/p>\n
(c) No Default or Breach. No party to the Lease is in breach or default,
\n ——————–
\nand no event has occurred which, with notice or lapse of time, would constitute
\na breach or default or permit termination, modification, or acceleration
\nthereunder;<\/p>\n
(d) No Repudiation. No party to the Lease has repudiated any provision
\n ————–
\nthereof;<\/p>\n
(e) No Disputes. There are no disputes, oral agreements, or forbearance
\n ———–
\nprograms in effect for the Lease;<\/p>\n
(f) No Assignment or Transfer. Seller has not assigned, transferred,
\n ————————-
\nconveyed, mortgaged, deeded in trust, or encumbered any interest in the
\nLeasehold Property;<\/p>\n
(g) Government Approvals. All leased facilities, including all buildings
\n ——————–
\nand structures presently situated on or to be constructed on the Leasehold
\nProperty (the “Leased Facilities”), leased thereunder have received all
\napprovals of governmental authorities (including licenses and permits) <\/p>\n
-12-<\/p>\n
required in connection with the operation thereof and have been operated and
\nmaintained in accordance with applicable laws, rules, and regulations;<\/p>\n
(h) Utilities and Service. All Leased Facilities thereunder are supplied
\n ———————
\nwith utilities and other services necessary for the operation of said
\nfacilities; and<\/p>\n
(i) Good and Marketable Title. The owner of the Leased Facilities has good
\n ————————-
\nand marketable title to the parcel of real property, free and clear of any
\nsecurity interest, easement, covenant, or other restriction, except for (i)
\ninstallments of special assessments not yet delinquent and (ii) recorded
\neasements, covenants, and other restrictions which do not impair the current
\nuse, occupancy, or value, or the marketability of title, of the property subject
\nthereto.<\/p>\n
3.11 INVENTORY.<\/p>\n
Schedule 1.1(b) contains a complete and accurate list and description of
\n —————
\nall inventory of Seller as of the date of this Agreement. Except as noted on
\nSchedule 1.1(b), the inventory is not obsolete, damaged or defective, has been
\n—————
\nstored and maintained in accordance with normal industry practice and is
\nsuitable for the purposes for which it is presently used.<\/p>\n
3.12 CUSTOMERS.<\/p>\n
Schedule 1.1(c) contains a complete and accurate list of all customers of
\n —————
\nSeller as of the date of this Agreement. All such customers are under a written
\ncontract with Seller to provide the Services. All Services to customers have
\nbeen sold and rendered pursuant to such contracts, and have been performed in
\ncompliance with the laws, rules and regulations of and under appropriate
\nfederal, state and local authorities, regulations and laws except to the extent
\nset forth on Schedule 1.1(c). In addition, Seller is not liable for any claims
\n —————
\nor liabilities resulting from Seller’s breach of any covenant, condition or
\nother obligation required of Seller under any contract or agreement to provide
\nServices. Shareholder and Seller have previously delivered to Purchaser copies
\nof all such customer contracts and Seller warrants that none of Seller’s
\ncustomers have canceled or substantially reduced or are currently attempting or
\nthreatening to cancel or substantially reduce service.<\/p>\n
3.13 FINANCIAL ACCOUNTS.<\/p>\n
Schedule 1.1(d) contains a complete and accurate list of all accounts of
\n —————
\nthe Seller and all other accounts used in the Business and a detailed
\ndescription of:<\/p>\n
(a) the name of each financial institution in which the Seller has
\naccounts or safe deposit boxes;<\/p>\n
(b) the names in which the accounts or boxes are held;<\/p>\n
(c) the type of account; and<\/p>\n
-13-<\/p>\n
(d) the name of each person authorized to draw on or have access thereto.<\/p>\n
3.14 ACCOUNTS AND NOTES RECEIVABLE.<\/p>\n
Schedule 1.1(e) contains a complete and accurate list of all Receivables of
\n —————
\nSeller as of the Balance Sheet Date and as of the date hereof which list
\nincludes, but is not limited to, receivables from and advances to employees and
\nShareholder. On the Closing Date, Shareholder and Seller shall provide Purchaser
\nwith an aging of all accounts and notes receivable showing amounts due in 30-day
\naging categories. Except for amounts reserved against on the most recent Balance
\nSheet or otherwise disclosed on Schedule 1.1(e), the accounts and notes
\n —————
\nreceivable will be fully collectible by Purchaser within 60 days of Closing,
\nwithout offset, recoupment, counterclaim, claim or diminution.<\/p>\n
3.15 OPERATING CONTRACTS.<\/p>\n
Schedule 1.1(f) contains a complete and accurate list of all Operating
\n —————
\nContracts as of the Balance Sheet Date and as of the date hereof. Shareholder
\nand Seller further warrant that each has delivered to Purchaser true copies of
\nsuch agreements. Except to the extent set forth on Schedule 1.1(f), Seller has
\n —————-
\ncomplied with all material commitments and obligations pertaining to it and is
\nnot in material default under such Operating Contracts and no notice of default
\nhas been received. The Seller is not a party to any contract, agreement or other
\ninstrument or commitment except as set forth on Schedule 1.1(f).
\n —————<\/p>\n
3.16 COMPUTER SOFTWARE; OTHER INTELLECTUAL PROPERTY.<\/p>\n
(a) Schedule 3.16(a) contains a complete and accurate list of the computer
\n —————-
\nsoftware that is owned by Seller and used in its business (the “Owned
\nSoftware”), except for commercially available business systems, software
\napplications and other commercially available over-the-counter “shrink-wrap”
\nsoftware that is generally used by Seller in the ordinary course of its business
\n(the “Business Software”). Except as set forth in Schedule 3.16(a), Seller has
\n —————-
\nexclusive rights and title to the Owned Software, free and clear of all claims,
\nincluding claims or rights of joint owners and employees, agents, consultants,
\ncustomers, licensees or any other parties who may have been involved in the
\ndevelopment, creation, marketing, maintenance, enhancement or licensing of such
\ncomputer software. Each employee, contract programmer, independent contractor,
\nnonemployee agent and person or other entity who has performed development or
\ncomputer programming services for Seller in connection with the Owned Software
\nhas executed a confidentiality agreement in favor of Seller, and Seller has
\nobtained an assignment or license of, or otherwise owns, the intellectual
\nproperty resulting therefrom. Except as set forth in Schedule 3.16(a) and except
\n —————-
\nfor commercially available “shrink-wrap” software, the Owned Software is not
\ndependent on any Licensed Software (as defined in Subsection 3.16(b) below) in
\norder to operate fully in the manner in which it is intended. No Owned Software
\nhas been published or disclosed to any other parties except pursuant to
\ncontracts requiring such other parties to keep the Owned Software confidential.
\n(For purposes of the preceding sentence, marketing materials that describe the
\nOwned Software and its functions <\/p>\n
-14-<\/p>\n
in general shall not be deemed a publication or disclosure of the Owned
\nSoftware.) To the best of Seller’s knowledge, no such other party has breached
\nany such obligation of confidentiality.<\/p>\n
(b) Schedule 3.16(b) contains a complete and accurate list of all software
\n —————-
\n(other than the Business Software) of which Seller is a licensee or lessee or
\nthat Seller otherwise has obtained the right to use (collectively, the “Licensed
\nSoftware”). Schedule 3.16(b) also (a) sets forth a list of all license fees,
\n —————-
\nrents, royalties or other charges that Seller is required or obligated to pay
\nwith respect to Licensed Software and (b) a description of each license, lease
\nor other agreement applicable to the Licensed Software. Seller has the right and
\nlicense to use, sublicense, modify and copy Licensed Software necessary to
\noperate Seller’s business, free and clear of any limitations or encumbrances.
\nSeller is in full compliance with all material provisions of each license, lease
\nor other agreement relating to the Licensed Software. Except as disclosed in
\nSchedule 3.16(b), none of the Licensed Software has been incorporated into or
\n—————-
\nmade a part of any Owned Software. Seller has not published or disclosed any
\nLicensed Software to any other party except, in the case of Licensed Software
\nthat Seller leases or markets to others, pursuant to contracts requiring such
\nother parties to keep the Licensed Software confidential. To the best of
\nSeller’s knowledge, no party to whom Seller has disclosed Licensed Software has
\nbreached such obligation of confidentiality.<\/p>\n
(c) The Owned Software, the Licensed Software, and the Business Software
\nconstitute all software used in Seller’s business (the “Seller Software”). The
\ntransactions contemplated herein will not cause a breach or default under any
\nlicenses, leases or similar agreements relating to the Seller Software or impair
\nSeller’s ability to use the Seller Software in the same manner as the Seller
\nSoftware is currently used or is contemplated to be used by Seller. Seller
\nneither has infringed nor is infringing any intellectual property rights of any
\nthird party with respect to the Owned Software, and, to the best of Seller’s
\nknowledge, no other person or entity is infringing any intellectual property
\nrights of Seller with respect to the Owned Software.<\/p>\n
(d) Seller and, to the best of Seller’s knowledge, each other party to any
\nlicensing, leasing or similar arrangements under which Seller is the licensor or
\nlessor or has otherwise granted the right to use the Seller Software are in full
\ncompliance therewith and are not in breach of their respective obligations with
\nrespect thereto. Seller is not a party to any license, installation agreement,
\nmaintenance agreement, data processing agreement, services agreement or other
\nagreement pursuant to which it is committed to perform software installation,
\nmodifications, enhancements or services without payment or for payments that, in
\nthe aggregate, are less than the cost to perform such installation,
\nmodifications, enhancements or services. Except as disclosed on Schedule
\n ——–
\n3.16(d), Seller has not granted any licenses or other rights and Seller has no
\n——-
\nobligation to grant licenses or other rights with respect to the Seller
\nSoftware. Seller has complied in all material respects with its obligations to
\nits customers, licensees and lessees in respect of the Seller Software.<\/p>\n
(e) Schedule 3.16(e) lists and separately identifies all agreements
\n —————-
\npursuant to which Seller has granted marketing or brokering rights in the Seller
\nSoftware to third parties.<\/p>\n
-15-<\/p>\n
(f) Seller has taken all reasonable and appropriate actions under the laws
\nof all applicable foreign jurisdictions, if any, where Seller has marketed or
\nlicensed the Seller Software to protect its ownership interests in,
\nconfidentiality rights of, and rights to market, license, modify or enhance, the
\nSeller Software.<\/p>\n
(g) Schedule 3.16(g) hereto sets forth a complete and correct list and
\n —————-
\nsummary description of all patents, patent applications, patent disclosures, and
\nimprovements thereto, whether registered or unregistered, trademarks, service
\nmarks, logos, internet domain names, trade names and corporate names, whether
\nregistered or unregistered, and registrations and applications for registration
\nthereof, copyrights, whether registered or unregistered, and registration and
\napplications for registration thereof, together with a complete list of all
\nlicenses granted by or to Seller with respect to any of the above. Seller has
\nprotected by way of patent, trademark or copyright registration or application
\nor otherwise the property listed in Schedule 3.16(g) hereto to the extent
\n —————-
\nreasonably necessary for the conduct of its business as now conducted. Seller
\nvalidly owns or is validly licensed to use all inventions, processes, know-how,
\nformulas, patterns, designs, trade secrets and confidential information that are
\nused in the conduct of its business as now conducted. All such rights and all
\nrights listed in Schedule 3.16(g) hereto are valid and enforceable and are free
\n —————-
\nfrom any security interest, lien or encumbrance or any default on the part of
\nSeller, and are not now involved in any pending or, to the knowledge of Seller,
\nthreatened interference proceeding. No option, license, sublicense or other
\nagreement has been granted in respect of any patent, trademark, brand name,
\ntrade secret, confidential information, copyright or pending application
\ntherefor listed in Schedule 3.16(g) hereto, except as noted in Schedule 3.16(g).
\n —————- —————-
\nNeither the Owned Software nor any of Seller’s other owned intellectual property
\ninfringes any patent, trademark, service mark, trade or company name, copyright
\nor application therefor or any other related technological right of any other
\nperson. None of the rights of Seller described in this Section 3.16(g) will be
\nimpaired in any way by the transactions provided for herein, and all of such
\nrights will be fully enforceable after the Closing Date without the consent or
\nagreement of any other party. Seller does not believe it is or will be necessary
\nto utilize any inventions of any of its employees made outside of their
\nemployment by Seller.<\/p>\n
(h) Seller has taken all reasonable actions to protect all trade secrets
\nand confidential information associated with the Business.<\/p>\n
(i) The Intellectual Property is adequate for the operation of the
\nBusiness as currently conducted and as proposed to be conducted.<\/p>\n
3.17 INTANGIBLE PROPERTY.<\/p>\n
Schedule 1.1(h) contains a complete and accurate list and summary
\n —————
\ndescription as of the Balance Sheet Date and as of the date hereof, of all
\nclaims, deposits, prepayments, refunds, causes of action, choses in action,
\nrights of recovery, rights of set off and rights of recoupment (including any
\nsuch item relating to the payment of any federal, state or local tax),
\nfranchises, approvals, permits, licenses, orders, registrations, certificates,
\nvariances and similar rights obtained from governments and governmental agencies
\nowned or held by Seller, all of which are now valid, in <\/p>\n
-16-<\/p>\n
good standing and in full force and effect. Except as set forth on Schedule
\n ——–
\n1.1(h), such franchises, approvals, permits, licenses, orders, registrations,
\n——
\ncertificates, variances and similar rights are adequate for the operation of
\nSeller’s Business as presently constituted.<\/p>\n
3.18 INSURANCE.<\/p>\n
Schedule 3.18 contains a complete and accurate list as of the Balance Sheet
\n ————-
\nDate and as of the date hereof, of all insurance policies carried by Seller and
\nall insurance loss runs or workmen compensation claims received for the past two
\n(2) policy years. Seller has delivered complete copies of all policies currently
\nin effect. The insurance carried by Seller with respect to its properties,
\nassets and Business is with reputable insurers. Such insurance policies are
\ncurrently in full force and effect and shall remain in full force and effect
\nthrough the Closing Date. Seller’s insurance has never been canceled and Seller
\nhas never been denied coverage.<\/p>\n
3.19 EMPLOYEES.<\/p>\n
Schedule 3.19 contains a complete and accurate list of all officers,
\n ————-
\ndirectors and employees of Seller and the rate of compensation (and the portions
\nthereof attributable to salary, bonus and other compensation, respectively), job
\ntitle and date of employment as of the Balance Sheet Date and as of the date
\nhereof. Seller warrants that with respect to all employees, Seller is and has
\nbeen at all times in compliance with all federal, state and local laws, rules
\nand regulations with respect to employment, wages, hours and benefits. Seller is
\nnot engaged in any unfair labor practices nor are any unfair labor practices or
\nother complaints against Seller filed with or threatened to be filed with or by
\nthe National Labor Relations Board, Equal Employment Opportunity Commission,
\nDepartment of Labor or any similar agency or instrumentality of any state or
\nlocal government; and Seller has experienced no labor interruptions over the
\npast two years and considers its relationship with employees to be good.<\/p>\n
3.20 BENEFIT PLANS.<\/p>\n
Schedule 3.20 contains a complete and accurate list of all employee benefit
\n ————-
\nplans (the “Benefit Plans”) of Seller, including employment agreements and any
\nother agreements containing “golden parachute” provisions, and deferred
\ncompensation agreements, together with copies of such plans, agreements and any
\ntrusts related thereto, and classifications of employees covered thereby as of
\nthe Balance Sheet Date and as of the date hereof. With respect to such Benefit
\nPlans, Seller warrants:<\/p>\n
(a) Except as described in Schedule 3.20, Seller does not have a pension,
\n ————-
\nprofit sharing, deferred compensation, stock option, employee stock purchase or
\nother employee benefit plan or arrangement.<\/p>\n
(b) Except as described in Schedule 3.20, all employee benefit plans are
\n ————-
\nin substantial compliance with all applicable provisions of ERISA and the
\nregulations issued thereunder, as well as with all other applicable federal,
\nstate and local statutes, ordinances and regulations. All such plans that are
\nintended to qualify (the “Qualified Plans”) under Section 401(a) of the Internal<\/p>\n
-17-<\/p>\n
Revenue Code of 1986, as amended (the “Code”), have been determined by the
\nInternal Revenue Service to be so qualified, and copies of such determination
\nletters are included as part of Schedule 3.20 hereof.
\n ————-<\/p>\n
(c) Except as disclosed in Schedule 3.20, all reports and other documents
\n ————-
\nrequired to be filed with any governmental agency or distributed to plan
\nparticipants or beneficiaries (including, but not limited to, actuarial reports,
\naudits or tax returns) have been timely filed or distributed, and copies thereof
\nare included as part of Schedule 3.20 hereof.
\n ————-<\/p>\n
(d) Neither Shareholder, any plan listed on Schedule 3.20, nor Seller has
\n ————–
\nengaged in any transaction prohibited under the provisions of Section 4975 of
\nthe Code or Section 406 of ERISA. No such plan listed in Schedule 3.20 has
\n ————-
\nincurred an accumulated funding deficiency, as defined in Section 412(a) of the
\nCode and Section 302(1) of ERISA; and Seller has not incurred any liability for
\nexcise tax or penalty due to the Internal Revenue Service nor any liability to
\nthe Pension Benefit Guaranty Corporation. Shareholder and Seller further
\nrepresent that:<\/p>\n
(i) there have been no terminations, partial terminations or
\ndiscontinuance of contributions to any such Qualified Plan intended to qualify
\nunder Section 401(a) of the Code without notice to and approval by the Internal
\nRevenue Service;<\/p>\n
(ii) no plan listed in Schedule 3.20 subject to the provisions of
\n ————-
\nTitle IV of ERISA has been terminated;<\/p>\n
(iii) there have been no “reportable events” (as that phrase is
\ndefined in Section 4043 of ERISA) with respect to any plan listed in Schedule
\n ——–
\n3.20;
\n—-<\/p>\n
(iv) Seller has not incurred liability under Section 4062 of ERISA;
\nand<\/p>\n
(v) Except as otherwise noted on Schedule 3.20, Seller will
\n ————-
\nterminate the employee benefit plans identified on Schedule 3.20 prior to
\n ————-
\nClosing and Purchaser hereby consents to such termination.<\/p>\n
3.21 ADMINISTRATIVE ACTION AND LITIGATION.<\/p>\n
Except as set forth on Schedule 1.3:
\n ————<\/p>\n
(i) Seller and Shareholder are not in default under any law or
\nregulation or under any order of any court or federal, state, municipal or other
\ngovernmental department, commission, board, bureau, agency or instrumentality
\nhaving jurisdiction over Seller;<\/p>\n
(ii) there are no charges, complaints, actions, suits, proceedings,
\nhearings, investigations, claims or demands pending or threatened against or
\naffecting Seller and Shareholder, at law or in equity by third parties, or
\nothers, or before any federal, state, municipal or other governmental
\ndepartment, commission, board, bureau, agency or instrumentality having
\njurisdiction over it; and<\/p>\n
-18-<\/p>\n
(iii) no notice of any claim, action, suit or proceeding, whether
\npending or threatened, has been received. Seller and Shareholder have conducted
\nand are conducting the Business in substantial compliance with requirements,
\nstandards, criteria and conditions set forth in applicable federal, state and
\nlocal statutes, ordinances, permits, licenses, orders, approvals, variances,
\nrules and regulations and is not in violation of any of the foregoing which
\nmight adversely affect the operations, affairs, prospects, properties, assets,
\nprofits or condition (financial or otherwise) of the Business, taken as a whole.<\/p>\n
3.22 TAX RETURNS AND AUDITS.<\/p>\n
Seller has timely filed all requisite federal, state and other tax returns
\nfor all fiscal periods ending on or before the Balance Sheet Date. Seller has
\ncurrently paid when due all taxes levied and imposed in connection with the
\noperation of its Business, including, without limitation, applicable sales and
\nuse taxes, social security taxes, business license taxes, federal and state
\nincome taxes, employment taxes, federal and state withholding taxes,
\nunemployment taxes, workmen’s compensation taxes, franchise taxes, property
\ntaxes, ad valorem taxes and all similar taxes; except as set forth on Schedule
\n ——–
\n1.3, there are no open years, examinations in progress or claims against it for
\n—
\nfederal, state or other taxes (including penalties and interest) for any period
\nor periods prior to and including the Balance Sheet Date and no notice of any
\nclaim, whether pending or threatened, for taxes has been received. The amounts
\nshown as accruals for taxes on the Financial Statements of Seller as of the
\nBalance Sheet Date are sufficient for the payment of all taxes of the kind
\nindicated (including penalties and interest) for all fiscal periods ended on or
\nbefore that date. Copies of any (a) tax examinations (b) extensions of statutory
\nlimitations, and (c) the federal and local income tax returns and franchise tax
\nreturns of Seller for its last two fiscal years, or such shorter period of time
\nas it shall have existed, are attached hereto as Schedule 3.22.
\n ————-<\/p>\n
3.23 FULL DISCLOSURE; REQUIRED CONSENTS.<\/p>\n
The certified copies of the Articles of Incorporation and Bylaws, both as
\namended to date, of Seller and the copies of all leases, instruments,
\nagreements, licenses, permits, certificates or other documents which are
\nincluded on Schedules attached hereto or which have been delivered to Purchaser
\nin connection with the transaction contemplated hereby are complete and correct.
\nSeller and any other party therein is not in default thereunder except as set
\nforth in the Schedules and documents attached to this Agreement. The rights and
\nbenefits of Seller thereunder will not be adversely affected by the transactions
\ncontemplated hereby and the execution of this Agreement or the attachments and
\nthe performance of the obligations hereunder will not violate or result in a
\nbreach or constitute a default under any of the terms or provisions of the
\nArticles of Incorporation and Bylaws, and leases, instruments, agreements,
\nlicenses, permits, certificates or other documents. Except as set forth in
\nSchedule 3.23, none of such leases, instruments, agreements, contracts,
\n————-
\nlicenses, permits, certificates or other documents requires notice to, or the
\nconsent or approval of, any governmental agency or other third party to the
\ntransactions contemplated to remain in full force and effect.<\/p>\n
-19-<\/p>\n
3.24 ENVIRONMENTAL MATTERS.<\/p>\n
Seller has obtained all permits, licenses and other authorizations which
\nare required in connection with the conduct of the Business under Regulations
\nrelating to pollution or protection of the environment, including Regulations
\nrelating to emissions, discharges, releases or threatened releases of
\npollutants, contaminants, chemicals, or industrial, toxic or hazardous
\nsubstances or wastes into the environment (including without limitation ambient
\nair, surface water, groundwater, or land), or otherwise relating to the
\nmanufacture, processing, distribution, use, treatment, storage, disposal,
\ntransport, or handling of pollutants, contaminants, chemicals, or industrial,
\ntoxic or hazardous substances or wastes.<\/p>\n
Seller and the Business are in full compliance with all the terms and
\nconditions of all required permits, licenses and authorizations, and are also in
\nfull compliance with all other limitations, restrictions, conditions, standards,
\nprohibitions, requirements, obligations, Schedules and timetables contained in
\nthose laws or contained in any regulation, code, plan, order, decree, judgment,
\ninjunction, notice or demand letter issued, entered, promulgated or approved
\nthereunder. During the period of Seller’s ownership or lease of any Real
\nProperty there have been no emissions, migrations, releases, discharges,
\nspillage or disposals in, on, at, under, adjacent to or affecting (or
\npotentially affecting) such Real Property or any neighboring properties.<\/p>\n
Shareholder and Seller are not aware of, nor have Shareholder or Seller
\nnor any of Seller’s subsidiaries received notice of, any past, present or future
\nevents, conditions, circumstances, activities, practices, incidents, actions or
\nplans which may interfere with or prevent compliance or continued compliance
\nwith those laws or any regulations, code, plan, order, decree, judgment,
\ninjunction, notice or demand letter issued, entered, promulgated or approved
\nthereunder, or which may give rise to any common law or legal liability, or
\notherwise form the basis of any claim, action, demand, suit, proceeding,
\nhearing, study or investigation, based on or related to the manufacture,
\nprocessing, distribution, use, treatment, storage, disposal, transport, or
\nhandling, or the emission, discharge, release or threatened release into the
\nenvironment, of any pollutant, contaminant, chemical, or industrial, toxic or
\nhazardous substance or waste.<\/p>\n
There is no civil, criminal or administrative action, suit, demand, claim,
\nhearing, notice or demand letter, notice of violation, investigation, or
\nproceeding pending or, to the best of its knowledge, threatened against Seller
\nin connection with the conduct of the Business relating in any way to the laws
\nreferred to in this Article or any regulation, code, plan, order, decree,
\njudgment, injunction, notice or demand letter issued, entered, promulgated or
\napproved under such laws.<\/p>\n
Seller agrees to provide reasonable cooperation to Purchaser in connection
\nwith Purchaser’s application for the transfer, renewal or issuance of any
\npermits, licenses, approvals or other authorizations or to satisfy any
\nregulatory requirements involving the Assets.<\/p>\n
-20-<\/p>\n
3.25 OUTSTANDING LIABILITIES.<\/p>\n
Except for the liabilities being assumed by Purchaser as set forth on
\nSchedule 1.3(a), Seller has paid or made arrangements for the payment of all
\n—————
\nmonies and similar indebtedness owed to any of its creditors in such a manner so
\nas to prevent Purchaser from incurring any liability for the payment thereof
\nand\/or any such creditors from asserting a claim against the transactions
\ncontemplated hereunder upon any alleged violation of the Bulk Sales Law
\nprovisions of the State of Georgia. Seller and Shareholder acknowledge that
\nPurchaser, Seller and Shareholder have agreed to waive compliance with such Bulk
\nSales Law; provided, however, that Purchaser may publish a notice of the sale of
\nthe Assets in accordance therewith.<\/p>\n
3.26 NO INTEREST IN OTHER ENTITIES.<\/p>\n
Seller owns no shares of any corporation or any ownership or other
\ninvestment interest, either of record, beneficially or equitably, in any
\nassociation, partnership, joint venture or other legal entity. Seller’s interest
\nin the Assets is held directly by Seller and not through any association,
\npartnership, joint venture or other legal entity.<\/p>\n
3.27 NO MATERIAL OCCURRENCES.<\/p>\n
Since the Balance Sheet Date, there has not been:<\/p>\n
(a) any change in the financial condition, assets, liabilities
\n(contingent or otherwise), income or Business of Seller;<\/p>\n
(b) any damage, destruction or loss (whether or not covered by insurance)
\nmaterially adversely affecting the properties or Business of Seller;<\/p>\n
(c) any change in the authorized capital of Seller or in its securities
\noutstanding or any change in its ownership interests or any grant of any
\noptions, warrants, calls, conversion rights or commitments;<\/p>\n
(d) any declaration or payment of any dividend or distribution in respect
\nof the capital stock or any direct or indirect redemption, purchase or other
\nacquisition of any if the capital stock of Seller;<\/p>\n
(e) any increase in the compensation, bonus, sales commissions of fee
\narrangement payable or to become payable by Seller to any of its officers,
\ndirectors, shareholders, employees, consultants or agents, or any payments made
\nto or for the benefit of Shareholder that were not normal and ordinary and
\nconsistent with past practices of Seller;<\/p>\n
(f) any work interruptions, labor grievances or claims filed, proposed
\nlaw or regulation or any event or condition of any character, materially
\nadversely affecting the Business or future prospects of Seller;<\/p>\n
-21-<\/p>\n
(g) any sale or transfer, or any agreement to sell or transfer, any
\nassets, property or rights of Seller to any person, including, without
\nlimitation, the Shareholder or their affiliates;<\/p>\n
(h) any cancellation, or agreement to cancel, any indebtedness or other
\nobligation owing to Seller, including, without limitation, any indebtedness or
\nobligation of any shareholder or any affiliate thereof;<\/p>\n
(i) any plan, agreement or arrangement granting any preferential rights
\nto purchase or acquire any interest in any of the assets, property or rights of
\nSeller or requiring consent of any party to the transfer and assignment of any
\nsuch assets, property or rights;<\/p>\n
(j) any purchase or acquisition, or agreement, plan or arrangement to
\npurchase or acquire, any property, rights or assets;<\/p>\n
(k) any waiver of any material rights or claims of Seller;<\/p>\n
(l) any breach, amendment or termination of any material contract,
\nagreement, license, permit or other right to which Seller is a party; or<\/p>\n
(m) any transaction by Seller outside the ordinary course of its
\nBusiness.<\/p>\n
3.28 YEAR 2000 WARRANTY.<\/p>\n
Seller warrants that the occurrence in or use by the Purchaser of dates on
\nor after January 1, 2000 (the “Millennial Dates”) will not have an adverse
\neffect on the performance of the Business purchased herein with respect to date-
\ndependent data, computations, output or other functions (including, without
\nlimitation, calculating, computing or sequencing) and the Seller’s Services and
\nBusiness will create, store and generate output data related to or including the
\nMillennial Dates without errors or omissions.<\/p>\n
3.29 INVESTMENT.<\/p>\n
Seller and each shareholder of Seller who will receive the WebMD Shares
\nshall deliver to Purchaser an acknowledgment that the WebMD Shares have not
\nbeen, and will not be, registered under the Securities Act of 1933, as amended,
\nor under any state securities laws and that the WebMD Shares are being offered
\nand sold are in reliance upon federal and state exemptions for transactions not
\ninvolving a public offering. Seller and each shareholder of Seller shall further
\nrepresent that (a) the WebMD Shares are being acquired solely for Seller’s or
\nshareholder’s own account for investment purposes, and not with a view to the
\ndistribution thereof (except to the shareholders of Seller); (b) Seller and each
\nshareholder is a sophisticated investor with knowledge and experience in
\nbusiness and financial matters; (c) Seller and each shareholder has received
\ncertain information concerning Purchaser and has had the opportunity to obtain
\nadditional information as desired in order to evaluate the merits and risks
\ninherent in holding the WebMD Shares; (d) Seller and each shareholder is able to
\nbear the economic risk and lack of liquidity<\/p>\n
-22-<\/p>\n
inherent in holding the WebMD Shares; and (f) Seller and each shareholder is an
\naccredited investor for the reasons set forth on Schedule 3.29 attached hereto.
\n ————-<\/p>\n
3.30 BROKERS’ FEES.<\/p>\n
Shareholder and Seller have not engaged any broker or finder and shall
\nindemnify Purchaser against any and all claims for payment of brokerage
\ncommissions or finder’s fee in connection with the transactions contemplated
\nherein.<\/p>\n
3.31 PRIVATE PLACEMENT MEMORANDUM.<\/p>\n
Seller and Shareholder have not provided to any party the Private
\nPlacement Memorandum of certifiedemail.com, Inc. dated January 21, 1998 (or any
\nportion thereof) for any reason, including, but not limited to, as an inducement
\nto invest in Seller.<\/p>\n
ARTICLE 4<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PURCHASER<\/p>\n
Purchaser hereby warrants and represents to Seller, all of which
\nrepresentations and warranties are true and correct as of the date hereof and
\nwill be true and correct on the Closing Date, and shall survive Closing, as
\nfollows:<\/p>\n
4.1 ORGANIZATION AND GOOD STANDING.<\/p>\n
Purchaser is a corporation duly organized, validly existing and in good
\nstanding under the laws of the State of Georgia, and has the full power and
\nauthority to own and lease its properties and to operate its business in all
\nplaces where it does business. Purchaser’s principal place of business is
\nlocated in Fulton County, Georgia, and has been so located since its
\nincorporation.<\/p>\n
4.2 AUTHORIZATION FOR AGREEMENT.<\/p>\n
The execution and delivery of this Agreement has been duly authorized by
\nthe Board of Directors of Purchaser, all requisite corporate actions have been
\ntaken by Purchaser to carry out the terms of this Agreement, and Purchaser has
\ndelivered to Seller a Secretary’s Certificate which evidences such corporate
\nactions.<\/p>\n
4.3 LEGAL AUTHORITY.<\/p>\n
Purchaser has the full legal right, power and authority to enter into this
\nAgreement and to consummate the transactions contemplated hereby to the extent
\nrequired hereby. Neither the execution nor delivery of this Agreement nor the
\nconsummation of the transactions contemplated hereby conflicts or will conflict
\nwith or results or will result in a breach of Purchaser’s Articles of<\/p>\n
-23-<\/p>\n
Incorporation, Bylaws, or the terms, conditions or provisions of any undertaking
\nto which Purchaser is a party or by which Purchaser or its business or assets
\nare bound.<\/p>\n
4.4 VALID AND BINDING OBLIGATION.<\/p>\n
This Agreement constitutes the valid and binding obligation of Purchaser,
\nenforceable in accordance with its terms.<\/p>\n
4.5 ACCOUNTS RECEIVABLE.<\/p>\n
Purchaser hereby represents and warrants that it will attempt to collect
\nthe accounts receivable of Seller being sold to Purchaser by Seller pursuant to
\nthe terms of this Agreement in accordance with the Purchaser’s existing business
\npractices relating to the collection of accounts receivables.<\/p>\n
ARTICLE 5<\/p>\n
ADDITIONAL PRE-CLOSING COVENANTS<\/p>\n
The parties additionally agree as follows with respect to the period
\nbetween the execution of this Agreement and the Closing:<\/p>\n
5.1 FULL ACCESS; DUE DILIGENCE.<\/p>\n
Purchaser and its representatives may, at reasonable times, visit the
\npremises of Seller and inspect the Assets and have full access to all of the
\nbooks, properties, contracts, commitments and records of Seller for the purpose
\nof examining and conducting a prudent due diligence inquiry of the Business and
\nthe Assets. Seller and its officers, employees and agents shall cooperate with
\nand assist in every respect Purchaser and its representatives in connection with
\nthis inspection. Promptly after the execution of this Agreement, Seller shall
\ndeliver to Purchaser a copy of all title insurance policies and other evidence
\nof Seller’s ownership or leasehold interest in real property, together with
\nsurveys, soil tests, and any other material report, study or documents regarding
\nthe Assets that is in the possession of Seller or otherwise available to Seller.<\/p>\n
5.2 OPERATION OF THE BUSINESS IN REGULAR COURSE.<\/p>\n
Seller shall diligently proceed to conduct the Business in the ordinary
\ncourse and will take no action, embark on any course of inaction, or enter into
\nany transaction outside of the ordinary course of business. Without limiting the
\nforegoing, Seller shall not enter into any contract or commitment to sell or
\nlease any equipment, machinery, or other assets constituting the Assets or
\nengage in material transactions affecting the Assets without prior written
\nconsent of Purchaser.<\/p>\n
-24-<\/p>\n
5.3 APPROVALS.<\/p>\n
Seller will use its best efforts to obtain any consents by any third party
\nor government authority or agency required or deemed desirable by Purchaser in
\nconnection with the consummation of the transactions contemplated hereby.<\/p>\n
5.4 PRESERVATION OF ASSETS.<\/p>\n
Seller shall diligently preserve and maintain the Assets in the ordinary
\ncourse of business and in a manner consistent with prudent business practices.<\/p>\n
5.5 PRESERVATION OF ORGANIZATION.<\/p>\n
Seller shall use its best efforts to preserve Seller’s business
\norganization intact, to keep available to Seller the present employees of Seller
\nand to preserve for Purchaser the present relationships of Seller with its
\ncustomers, suppliers and others having business relations with it.<\/p>\n
5.6 USE OF PROPERTY.<\/p>\n
All tangible property of Seller and real property used in the Business
\nwill be used, operated, maintained and repaired in a careful and efficient
\nmanner.<\/p>\n
5.7 NO DEFAULT.<\/p>\n
Seller shall not act or omit to do any act, or permit any act or omission
\nto act, which will cause a breach of any contract, permit, license, commitment
\nor obligation.<\/p>\n
5.8 RISK OF LOSS.<\/p>\n
Seller shall maintain in full force and effect all of its insurance
\npresently in effect and shall bear all risk of loss with respect to the Assets.<\/p>\n
5.9 NOTICE OF DEVELOPMENTS.<\/p>\n
Seller shall give prompt written notice to Purchaser of any material
\ndevelopments affecting the Assets, liabilities, business, financial condition,
\noperations, results of operations, or future prospects of the Business. Each
\nparty will give prompt notice to the other of any material development affecting
\nthe ability of the parties to consummate the transactions contemplated hereby.<\/p>\n
-25-<\/p>\n
ARTICLE 6<\/p>\n
CONDITIONS PRECEDENT TO PURCHASER’S OBLIGATIONS<\/p>\n
Each and every obligation of Purchaser to be performed on the Closing Date
\nshall be subject to the satisfaction prior to or on the Closing Date of the
\nfollowing conditions, unless waived in writing by Purchaser:<\/p>\n
6.1 REPRESENTATIONS AND WARRANTIES TRUE; COMPLIANCE WITH AGREEMENT.<\/p>\n
The representations and warranties of Shareholder and Seller in this
\nagreement shall be true and correct on and as of the Closing Date with the same
\neffect as though such representations and warranties had been made or given on
\nand as of such Closing Date, and Seller and Shareholder shall have performed and
\ncomplied with all of their obligations under this Agreement which are to be
\nperformed or complied with by them prior to or on the Closing Date, and
\nPurchaser shall receive a certificate to that effect as described in Section
\n1.4(a).<\/p>\n
6.2 CORPORATE DOCUMENTS AND RESOLUTIONS.<\/p>\n
Seller shall deliver or cause to be delivered to Purchaser those items set
\nforth in Section 1.4.<\/p>\n
6.3 NO MATERIAL CHANGE.<\/p>\n
The Assets shall be in substantially the same or superior condition as
\nexisting on the date of this Agreement and not be adversely affected or
\nthreatened to be affected in any way as a result of fire, explosion, earthquake,
\ndisaster, accident, condemnation, any action or threatened action by the United
\nStates or any governmental authority, flood, embargo, riot, civil disturbance,
\nuprising, activity of armed forces or act of God or public enemy. To the extent
\nany item of the Assets is damaged, destroyed, condemned or suffers a casualty
\nprior to the Closing Date, at Purchaser’s option, the Purchase Price shall be
\nreduced by an appropriate amount.<\/p>\n
6.4 OPINION OF COUNSEL.<\/p>\n
Purchaser shall receive from counsel for Shareholder and Seller a written
\nopinion, dated as of the Closing Date, addressed to Purchaser in form and
\nsubstance satisfactory to Purchaser, in the form attached hereto as Exhibit D.
\n ———<\/p>\n
6.5 PROCEEDINGS AND INSTRUMENTS SATISFACTORY.<\/p>\n
All proceedings, corporate or otherwise, to be taken in connection with
\nthe transactions contemplated by this Agreement and all appropriate documents
\nincident thereto shall be satisfactory in form and substance to Purchaser; and
\nSeller shall have made available to Purchaser for examination the originals or
\ntrue and correct copies of all records and documents which Purchaser may
\nreasonably request in connection with the transactions contemplated hereby.<\/p>\n
-26-<\/p>\n
ARTICLE 7<\/p>\n
CONDITIONS PRECEDENT TO SELLER’S AND SHAREHOLDER’S OBLIGATIONS<\/p>\n
Each and every obligation of Seller and Shareholder to be performed on the
\nClosing Date shall be subject to the satisfaction prior to or on the Closing
\nDate of the following conditions, unless waived in writing by Seller:<\/p>\n
7.1 REPRESENTATIONS AND WARRANTIES TRUE.<\/p>\n
The representations and warranties of Purchaser in this Agreement shall
\nbe true and correct on and as of the Closing Date with the same effect as though
\nsuch representations and warranties had been made or given on and as of such
\nClosing Date, and Seller shall have received a certificate from an executive
\nofficer of Purchaser to that effect.<\/p>\n
ARTICLE 8<\/p>\n
INDEMNIFICATION BY SELLER<\/p>\n
8.1 INDEMNIFICATION.<\/p>\n
Seller and Shareholder hereby agree to jointly and severally indemnify,
\ndefend and hold harmless Purchaser and its officers, directors, employees,
\nagents, representatives, successors and assigns of, from, against, and in
\nrespect of any and all loss, liability and expense resulting from:<\/p>\n
(a) Any and all liens, restrictions, easements, security interests,
\nsecurity agreements, security deeds, claims and encumbrances (including leases)
\nagainst any of the Assets, and all other liabilities and obligations of Seller,
\nwhether known or unknown, mature or contingent to the extent such liabilities
\nand obligations are not to be expressly assumed by Purchaser pursuant to Section
\n1.3 hereof;<\/p>\n
(b) Any misrepresentation, breach of representation or warranty, or
\nnonfulfillment of any obligation on the part of the Seller or Shareholder made
\nor given in or with respect to this Agreement, or from any misrepresentation in
\nor omission from any Schedule hereto or other instrument furnished or to be
\nfurnished to Purchaser in connection with the transactions provided for in this
\nAgreement; and<\/p>\n
(c) Any and all actions, suits, proceedings, claims, demands,
\nassessments, judgments, costs and expenses (including attorney, engineer, and
\nexpert witness fees) incident to any of the foregoing provisions. Seller and
\nShareholder hereby waive any and all contractual, statutory and other causes of
\naction, at law or in equity, which Seller or Shareholder have or may have now or
\nin the future against Purchaser arising out of or in any manner connected with
\nthe foregoing.<\/p>\n
-27-<\/p>\n
Without limiting the generality of the foregoing, Seller and Shareholder
\nagree that they will continue to defend at their own expense any pending actions
\nagainst Seller which are based on dealings prior to the Closing Date with
\ncustomers, suppliers and other parties, and Purchaser agrees to cooperate with
\nSeller and Shareholder in such matters.<\/p>\n
8.2 NOTICE AND PAYMENT.<\/p>\n
Purchaser shall give Seller and Shareholder written notice of any claim,
\nsuit, liability or demand which gives rise to indemnification by Seller and
\nShareholder pursuant to this Agreement (hereinafter referred to as “Purchaser’s
\nNotice”). Such notice shall describe the claim in reasonable detail and shall
\nindicate the amount (estimated if necessary) of the loss that has been or may be
\nsustained by Purchaser.<\/p>\n
(a) Seller or Shareholder may elect to compromise or defend, at Seller’s
\nor Shareholder’s own expense and by Seller’s or Shareholder’s own counsel, any
\nmatter involving the asserted liability of Purchaser so long as Seller or
\nShareholder pursue the same diligently and in good faith. If Seller or
\nShareholder undertake to compromise or defend such asserted liability, Seller or
\nShareholder shall within 15 days (or sooner, if the nature of the asserted
\nliability so requires) notify Purchaser of their intent to do so, and Purchaser
\nshall cooperate, at the expense of Seller or Shareholder, in the compromise of,
\nor defense against, any such asserted liability. Notwithstanding the foregoing,
\nPurchaser shall have the right to participate in any matter through counsel of
\nits own choosing at its own expense; provided that Seller’s or Shareholder’s
\ncounsel shall be lead counsel. After Seller or Shareholder have notified
\nPurchaser of their intention to undertake to defend or settle any such asserted
\nliability, and for so long as Seller or Shareholder diligently pursue such
\ndefense, Seller and Shareholder shall not be liable for any additional legal
\nexpenses incurred by Purchaser in connection with any defense or settlement of
\nsuch asserted liability, except to the extent such participation is requested by
\nSeller or Shareholder, in which event Purchaser shall be reimbursed by Seller or
\nShareholder for reasonable additional legal expenses, out-of-pocket expenses and
\nallocable share of employee compensation incurred in connection with such
\nparticipation for any employee whose participation is so requested. If Seller or
\nShareholder desire to accept a final and complete reasonable settlement of
\nasserted liability and Purchaser refuses to consent to such reasonable
\nsettlement, then Seller’s and Shareholder’s liability under this Article 8 with
\nrespect to such asserted liability shall be limited to the amount so offered in
\nsettlement and Purchaser shall reimburse Seller or Shareholder for any
\nadditional costs of defense which it subsequently incurs with respect to such
\nclaim.<\/p>\n
(b) If Seller or Shareholder do not undertake to defend such matter to
\nwhich Purchaser is entitled to indemnification hereunder, or fail to diligently
\npursue such defense, Purchaser may undertake such defense through counsel of its
\nown choice, at the cost and expense of Seller or Shareholder, and Purchaser may
\nsettle such matter, and Seller or Shareholder shall reimburse Purchaser for the
\namount paid in such settlement and any other liabilities or expenses incurred by
\nPurchaser in connection therewith, provided, however, that Purchaser shall not
\nsettle any such claim without the written consent of Seller and Shareholder,
\nwhich consent shall not be unreasonably withheld.<\/p>\n
-28-<\/p>\n
(c) All sums paid by Purchaser for which Seller or Shareholder are
\nobligated to reimburse Purchaser under this Article 8 (together with interest
\nthereon from the date of Purchaser’s payment of any amounts until paid in full)
\nshall be paid within ten days of demand with interest calculated at the maximum
\nrate allowed under Georgia law.<\/p>\n
ARTICLE 9<\/p>\n
NONCOMPETITION AND NONDISCLOSURE<\/p>\n
9.1 NONCOMPETITION AND NONDISCLOSURE.<\/p>\n
Shareholder and Seller agree that, for a period of two (2) years following
\nthe Closing Date, they shall not, directly or indirectly, for themselves or for
\nor through Seller’s present officers, directors, shareholders, or agents:<\/p>\n
(a) Nonsolicitation of Customers. Solicit or attempt to solicit Customers
\n —————————-
\n(as defined below), directly or indirectly, to induce or encourage them to
\nacquire or obtain from anyone other than the Purchaser, service competitive with
\nor substitute for any Service. For purposes of this Section, a “Customer” refers
\nto any person or group of persons with whom Seller or Shareholder has or had
\ndirect material contact with regard to sales, delivery or support of the
\nServices, including prospective clients or customers;<\/p>\n
(b) Nonsolicitation of Employees. Employ, induce, solicit for employment,
\n —————————-
\nor assist others in employing, inducing or soliciting for employment any
\nindividual who is at any time during such period an employee of the Purchaser
\nfor the purpose of providing services that are the same or similar to the types
\nof services offered or engaged in by Seller, the Shareholder or the Purchaser as
\nof the date of this Agreement;<\/p>\n
(c) Noncompetition. Engage directly or indirectly in any business which is
\n ————–
\nsimilar to Seller’s Business, whether such engagement be as an employer,
\nofficer, director, owner, investor, employee, partner or consultant.
\nNotwithstanding the above, the foregoing covenant shall not be deemed to
\nprohibit Shareholder or Seller, its officers, directors or employees from
\nacquiring as an investment not more than one percent of the capital stock of a
\ncompeting business, whose stock is traded on a national securities exchange or
\nover-the-counter;<\/p>\n
(d) Proprietary Information. Not disclose at any time now or in the
\n ———————–
\nfuture, Seller’s or Purchaser’s proprietary information, trade secrets,
\ncustomers, or other confidential information, including, but not limited to,
\nnonpublic financial statements, price lists and pricing information, information
\nconcerning costs, charges, operating procedures and results, marketing and
\nbusiness plans, mailing lists, marketing research, whether in existence or
\nproposed, to any person, firm, partnership, corporation or business for any
\nreason or purpose whatsoever.<\/p>\n
-29-<\/p>\n
If the final judgment of a court of competent jurisdiction declares that
\nany term or provision of this Section 9.1 is invalid or unenforceable, the
\nparties agree that the court making the determination of invalidity or
\nunenforceability shall have the power to reduce the scope, duration, or area of
\nthe term or provision, to delete specific words or phrases, or to replace any
\ninvalid or unenforceable term or provision with a term or provision that is
\nvalid and enforceable and that comes closest to expressing the intention of the
\ninvalid or unenforceable term or provision, and this Agreement shall be
\nenforceable as so modified after the expiration of the time within which the
\njudgment may be appealed.<\/p>\n
9.2 SPECIFIC PERFORMANCE.<\/p>\n
Each of the parties acknowledges and agrees that the Purchaser would be
\ndamaged irreparably in the event any of the provisions of this Agreement are not
\nperformed in accordance with their specific terms or otherwise are breached.
\nAccordingly, each of the Parties agrees that the Purchaser shall be entitled to
\nan injunction or injunctions to prevent breaches of the provisions of this
\nAgreement and to enforce specifically this Agreement and the terms and
\nprovisions hereof in addition to any other remedy to which Purchaser may be
\nentitled, at law or equity.<\/p>\n
9.3 REASONABLE RESTRAINT.<\/p>\n
It is agreed between the parties that the foregoing covenants in this
\nArticle 9 impose a reasonable restraint on Shareholder and Seller in light of
\nthe activities and business of Shareholder and Seller as of the date of this
\nAgreement.<\/p>\n
9.4 SEVERABILITY.<\/p>\n
The covenants in this Article 9 are severable and separate, and the
\nunenforceability of any specific covenant shall not affect the provisions of any
\nother covenant. Moreover, in the event any court of competent jurisdiction shall
\ndetermine that the scope, time, or territorial restrictions set forth herein are
\nunreasonable, then it is the intention of the parties that such restrictions be
\nenforced to the fullest extent which the court deems reasonable, and the
\nAgreement shall thereby be reformed.<\/p>\n
9.5 INDEPENDENT COVENANTS.<\/p>\n
All of the covenants in this Article 9 shall be construed as an agreement
\nindependent of any other provision of this Agreement, and the existence of any
\nclaim or cause of action of Shareholder or Seller against Purchaser, whether
\npredicated on this Agreement or otherwise, shall not constitute a defense to the
\nenforcement by Purchaser of such covenants. It is specifically agreed that the
\nperiod of two years stated above, shall be computed by excluding from such
\ncomputation any time during which Shareholder or Seller are in violation of any
\nprovision of this Article 9 and any time during which there is pending in any
\ncourt of competent jurisdiction any action (including any appeal from any
\njudgment) brought by any person, whether or not a party to this Agreement, in
\nwhich action Purchaser seeks to enforce the agreements and covenants of
\nShareholder and Seller or <\/p>\n
-30-<\/p>\n
in which any person contests the validity of such agreements and covenants or
\ntheir enforceability or seeks to avoid their performance or enforcement.<\/p>\n
9.6 MATERIALITY.<\/p>\n
Shareholder and Seller hereby agree that this Article 9 is a material and
\nsubstantial part of this transaction.<\/p>\n
ARTICLE 10<\/p>\n
TERMINATION AND ABANDONMENT<\/p>\n
This Agreement may be terminated and abandoned on or prior to the Closing
\nDate as follows: (i) by mutual consent of all parties hereto; (ii) by Purchaser
\nif the conditions precedent contained in Article 6 hereof have not been
\nfulfilled or waived in writing on or prior to the Closing Date; (iii) by
\nPurchaser if Purchaser is not satisfied with the results of its continuing
\nbusiness, legal and accounting due diligence regarding the Seller, Shareholder
\nor Business; or (iv) by Seller if the conditions precedent contained in Article
\n7 hereof have not been fulfilled or waived in writing on or prior to the Closing
\nDate. In the event of termination by any party as provided above, written notice
\nshall promptly be given to the other parties and each party shall pay its own
\nexpenses incident to the preparation for the consummation of this Agreement and
\nthe transactions contemplated hereby. A termination under the provisions of this
\nArticle 10 shall not prejudice any claim for damages that any party may have
\nhereunder or at law or in equity.<\/p>\n
ARTICLE 11<\/p>\n
POST-CLOSING COVENANTS OF SELLER AND SHAREHOLDER<\/p>\n
11.1 FURTHER ASSURANCES.<\/p>\n
Seller shall execute and deliver or cause to be executed and delivered such
\nfurther instruments and take such other action as Purchaser may require to more
\neffectively carry out the transfer of the Assets and the consummation of the
\nmatters contemplated by this Agreement.<\/p>\n
11.2 UCC MATTERS.<\/p>\n
From and after the Closing Date, Seller will promptly refer all inquiries
\nwith respect to ownership of the Assets or the Business to Purchaser. In
\naddition, Seller will execute such documents and financing statements as
\nPurchaser may request from time to time to evidence transfer of the Assets to
\nPurchaser, including any necessary assignments of financing statements.<\/p>\n
-31-<\/p>\n
11.3 COLLECTION OF RECEIVABLES.<\/p>\n
After Closing, Purchaser shall have the sole right to collect and to
\nendorse with the name of Seller any checks received on account of any
\nreceivables. If Seller receives payment from customers owing hereunder to
\nPurchaser, Seller will remit such payments to Purchaser within ten (10) days of
\nreceipt thereof.<\/p>\n
11.4 RETENTION OF RETAINED BUSINESS RECORDS.<\/p>\n
Seller agrees that prior to the destruction of any business records which
\ndeal with matters prior to the Closing Date and which are not transferred to
\nPurchaser pursuant to this Agreement, Seller will advise Purchaser, in writing,
\nof such intended destruction. If, within thirty (30) days after such notice,
\nPurchaser notifies Seller that Purchaser wishes to have such records preserved,
\nSeller will deliver such records to Purchaser, at Purchaser’s expense.<\/p>\n
11.5 CORPORATE NAME CHANGES.<\/p>\n
On the Closing Date, Seller shall change its corporate name, at Purchaser’s
\nexpense, to another name which is not similar to “certifiedemail.com, Inc.,”
\n“certifiedemail” or any other name which is likely to cause confusion with
\n“certifiedmail.com, Inc.” or “certifiedemail.” Seller further agrees that after
\nthe Closing Date, it shall no longer use any of such names without the prior
\nwritten consent of Purchaser in each instance.<\/p>\n
ARTICLE 12<\/p>\n
MISCELLANEOUS<\/p>\n
12.1 TIME IS OF THE ESSENCE.<\/p>\n
Time is of the essence of this Agreement.<\/p>\n
12.2 GOVERNING LAW.<\/p>\n
This Agreement shall be governed, construed and enforced in accordance with
\nthe laws of the State of Georgia notwithstanding principles of conflicts of
\nlaws.<\/p>\n
12.3 TERMS AND CAPTIONS.<\/p>\n
The term “Agreement” as used herein, as well as the terms “herein,”
\n“hereof,” “hereunder” and the like shall mean this Agreement in its entirety and
\nall Schedules and Exhibits attached hereto and made a part hereof. The captions
\nand section headings hereof are for reference and convenience only and do not
\nenter into or become part of the context. All pronouns, singular and plural,
\nmasculine, feminine or neuter, shall mean and include the person, entity, firm,
\nor corporation to which they relate as the context may require.<\/p>\n
-32-<\/p>\n
12.4 SEVERABILITY.<\/p>\n
In the event that any term, covenant, condition, agreement, section or
\nprovision hereof shall be deemed invalid or unenforceable by a court of
\ncompetent and final jurisdiction, this Agreement shall not terminate or be
\ndeemed void or voidable, but shall continue in full force and effect and there
\nshall be substituted for such stricken provision a like but legal and
\nenforceable provision which most nearly accomplishes the intention of the
\nparties hereto.<\/p>\n
12.5 NOTICES.<\/p>\n
All notices, requests, demands, and other communications shall be deemed to
\nhave been duly given if in writing and sent by hand or reliable overnight
\ndelivery, telecopier (receipt confirmed) or certified or registered mail,
\npostage prepaid, to the appropriate address indicated below or to such other
\naddress as may be given in a notice sent to the other parties hereto:<\/p>\n
If to Purchaser:<\/p>\n
WebMD, Inc.
\n 400 The Lenox Building
\n 3399 Peachtree Road, NE
\n Atlanta, Georgia 30326
\n Telephone: (404) 479-7600
\n Telecopier: (404) 479-7651
\n Attention: Chief Executive Officer<\/p>\n
with a copy to:<\/p>\n
Nelson Mullins Riley & Scarborough, L.L.P.
\n 999 Peachtree Street, N.E., Suite 1400
\n Atlanta, Georgia 30309
\n Telephone: (404) 817-6000
\n Telecopier: (404) 817-6050
\n Attention: James Walker IV, Esq.<\/p>\n
If to Seller and\/or Shareholder:<\/p>\n
certifiedemail.com, Inc.
\n 2870 Peachtree Road, Suite 414
\n Atlanta, Georgia 30305
\n Telephone: (404) ________
\n Telecopier: (404) 705-5836
\n Attention: Mr. Gary B. “Court” Coursey<\/p>\n
-33-<\/p>\n
with a copy to:<\/p>\n
The Law Offices of Kirby Turnage
\n 999 Peachtree Street, N.E.
\n Suite 1700
\n Atlanta, Georgia 30309
\n Attention: Kirby Turnage, Esq.<\/p>\n
12.6 COUNTERPARTS.<\/p>\n
This Agreement may be executed in one or more counterparts, each of which
\nshall be deemed an original and all of which together shall constitute one and
\nthe same instrument.<\/p>\n
12.7 SCHEDULES AND EXHIBITS.<\/p>\n
Each Schedule and Exhibit referred to in this Agreement is hereby
\nincorporated by reference and made an integral part hereof, and may be referred
\nto in this Agreement and any other related instrument or document without being
\nattached thereto.<\/p>\n
12.8 SURVIVAL.<\/p>\n
All representations, warranties, covenants and agreements contained in
\nthis Agreement and in any document delivered or to be delivered pursuant to this
\nAgreement shall survive Closing and the consummation of the transactions
\ncontemplated herein, notwithstanding any investigation or examination made by or
\non behalf of any of the parties.<\/p>\n
12.9 CONFIDENTIALITY.<\/p>\n
Whether or not the transactions contemplated herein are consummated, the
\nparties hereto agree to keep confidential any and all information and data with
\nrespect to another party which it received as a result of any investigation or
\ndisclosure made in connection with this Agreement and which is not otherwise
\navailable to third parties; provided, however, that each party shall be
\npermitted to disclose any such information or data (a) to the extent such party
\nbelieves that such disclosure is reasonably required by applicable law or
\nregulation, and (b) as is necessary to obtain consents to the transactions
\ncontemplated hereby. In the event the transactions contemplated by this
\nAgreement are not consummated, each party shall return all documents, work
\npapers, financial statements and other materials and information obtained from
\nanother party, or its agents, pursuant to this Agreement.<\/p>\n
12.10 PRESS RELEASES AND ANNOUNCEMENTS.<\/p>\n
No party shall issue any press release or announcement or make any other
\npublic disclosure relating to the subject matter of this Agreement prior to the
\nClosing Date without the prior written approval of the other Party, which
\nconsent shall not be unreasonably withheld; provided, however, that any party
\nmay make any public disclosure it believes in good faith is required by law or<\/p>\n
-34-<\/p>\n
regulation, in which case, the disclosing party will advise the other party
\nprior to making the disclosure.<\/p>\n
12.11 BINDING EFFECT.<\/p>\n
This Agreement shall be binding upon and shall inure to the benefit or
\ndetriment of the parties hereto and their respective heirs, personal
\nrepresentatives, permitted successors and assigns.<\/p>\n
12.12 ASSIGNMENT.<\/p>\n
No party may assign any of its rights, duties or obligations under this
\nagreement without the prior written consent of the other parties and any attempt
\nto do so shall be null and void and of no force and effect upon the non-
\nconsenting party.<\/p>\n
12.13 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT.<\/p>\n
This Agreement embodies the entire agreement of the parties relating to
\nthe subject matter and supersedes all prior oral or written agreements between
\nthe parties with respect to said subject matter. No amendment or modification of
\nthis Agreement shall be valid or binding upon the parties unless made in writing
\nand signed by each of the parties.<\/p>\n
12.14 REMEDY AT LAW INADEQUATE.<\/p>\n
Shareholder and Seller hereby acknowledge and agree that, upon any actual
\nor threatened breach of any of the provisions of this Agreement, Purchaser will
\nsuffer irreparable damages and its remedy at law will be inadequate, and
\nPurchaser and its successors and assigns shall be entitled to injunctive or
\nother equitable relief in addition to any other remedy it may have for a breach
\nof such provisions.<\/p>\n
12.15 REMEDIES CUMULATIVE.<\/p>\n
All remedies, rights, powers and privileges conferred hereunder upon the
\nparties, unless otherwise provided, shall be cumulative and not restricted to
\nthose provided by law.<\/p>\n
12.16 EXPENSES.<\/p>\n
Each party shall pay its own expenses in connection with the preparation
\nof this Agreement and the consummation of the transactions contemplated hereby.<\/p>\n
12.17 NO THIRD PARTY BENEFICIARIES.<\/p>\n
Nothing in this Agreement is intended to create a benefit in favor of, or
\nan obligation to, any person or entity not a party to this Agreement.<\/p>\n
-35-<\/p>\n
IN WITNESS WHEREOF, Shareholder has executed this Agreement and Seller and
\nPurchaser have caused their duly authorized officers to execute this Agreement,
\nunder seal, all as of the day and year first above written.<\/p>\n
“SELLER”<\/p>\n
certifiedemail.com, Inc.,
\n a Georgia corporation<\/p>\n
By: \/s\/ Gary B. “Court” Coursey, Jr.
\n ——————————–
\n Its: President
\n ——————————–<\/p>\n
[CORPORATE SEAL]<\/p>\n
“SHAREHOLDER”<\/p>\n
\/s\/ Gary B. “Court” Coursey, Jr.
\n ————————————-
\n Gary B. “Court” Coursey, Jr.<\/p>\n
“PURCHASER”<\/p>\n
WebMD, Inc., a Georgia corporation<\/p>\n
By: \/s\/ W. Michael Heekin
\n ——————————–
\n Its: Executive Vice President
\n ——————————–
\n [CORPORATE SEAL]<\/p>\n
-36-<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9303],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9623,9622],"class_list":["post-43314","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-webmd-corp","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43314","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=43314"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43314"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43314"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}