\nARTICLE IIIA — REPRESENTATIONS AND WARRANTIES OF GUARANTOR ………………………………………. 26
\n SECTION 3A. I Organization ……………………………………………………………. 26
\n SECTION 3A.2 Authority; Corporate Action ……………………………………………….. 26
\n SECTION 3A.3 No Conflict; Required Filings and Consents ………………………………….. 27
\n SECTION 3A.4 Financial Statements ……………………………………………………… 27
\n SECTION 3A.5 Disclosure ………………………………………………………………. 28<\/p>\nARTICLE IV — NATURE AND SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
\n COVENANTS OF THE PARTIES ………………………………………………………. 28
\n SECTION 4.01 Survival ………………………………………………………………… 28
\n SECTION 4.02 Nonwaiver of Rights ………………………………………………………. 28<\/p>\n
ARTICLE V — COVENANTS ……………………………………………………………………….. 29
\n SECTION 5.01 Covenants of Seller ………………………………………………………. 29
\n SECTION 5.02 Mutual Covenants …………………………………………………………. 32
\n SECTION 5.03 Tax Filings ……………………………………………………………… 32<\/p>\n
ARTICLE VI — OTHER CLOSING MATTERS ……………………………………………………………. 33
\n SECTION 6.01 Other Documents to be Furnished by Purchaser to Seller ……………………….. 33
\n SECTION 6.02 Other Documents to be Furnished by Seller and Company to Purchaser …………….. 34
\n SECTION 6.03 Employee Matters …………………………………………………………. 35
\n SECTION 6.04 Facilities Services Agreement; License Agreement and Limited Technology
\n License …………………………………………………………………. 35<\/p>\n
ARTICLE VII — INDEMNIFICATION ………………………………………………………………… 36
\n SECTION 7.01 Indemnification by Seller …………………………………………………. 36
\n SECTION 7.02 Indemnification by Purchaser ………………………………………………. 36
\n SECTION 7.03 Procedure ……………………………………………………………….. 37
\n SECTION 7.04 Offset Rights ……………………………………………………………. 38
\n SECTION 7.05 Limitations ……………………………………………………………… 39<\/p>\n
ARTICLE VIII — DEFINITIONS …………………………………………………………………… 39
\n SECTION 8.01 Certain Defined Terms …………………………………………………….. 39<\/p>\n
ARTICLE IX — GENERAL PROVISIONS ………………………………………………………………. 41
\n SECTION 9.01 Expenses ………………………………………………………………… 41
\n SECTION 9.02 Notices …………………………………………………………………. 41
\n SECTION 9.03 Amendment ……………………………………………………………….. 42
\n SECTION 9.04 Headings ………………………………………………………………… 42
\n SECTION 9.05 Severability …………………………………………………………….. 42
\n SECTION 9.06 Entire Agreement …………………………………………………………. 43
\n SECTION 9.07 Benefit; Assignment ………………………………………………………. 43
\n SECTION 9.08 Governing Law; Consent to Jurisdiction ……………………………………… 43
\n SECTION 9.09 Counterparts …………………………………………………………….. 43
\n<\/c><\/s><\/table>\n
ii<\/p>\n
SCHEDULES AND APPENDICES<\/p>\n
Schedule 2.01(a) States in which the Company is Qualified
\nSchedule 2.01(b) Securities of Other Entities Owned by the Company
\nSchedule 2.03(a) Company Breaches, Defaults, Etc.
\nSchedule 2.03(b) Consents
\nSchedule 2.04 Capitalization
\nSchedule 2.05 Permits
\nSchedule 2.06(a) Unaudited Financial Statements of the Company and Seller
\nSchedule 2.06(b) Accrual Basis Schedule of A\/R, A\/P, Prepaids and Accrued
\n Expenses as of January 31, 2000; Liabilities
\nSchedule 2.06(e) Seller’s Certificate of Estimated Working Capital
\nSchedule 2.07 Company Real Property
\nSchedule 2.08(a) Company Material Contracts
\nSchedule 2.08(b) Required Consents to Material Contracts
\nSchedule 2.09 Company Litigation
\nSchedule 2.10 Company Tax Assessments, Audits and Investigations
\nSchedule 2.11 Company Changes since December 31, 1999
\nSchedule 2.12 Company Benefit Plans
\nSchedule 2.13 Employee Matters
\nSchedule 2.14 Company Insurance Policies
\nSchedule 2.15 Intellectual Property
\nSchedule 2.16 Company Domain Names
\nSchedule 2.17(a) Personal Property and Assets Not Material to Company
\nSchedule 2.17(b) Company Personal Property and Assets
\nSchedule 2.18 Bank Accounts
\nSchedule 2.20 Books and Records
\nSchedule 2.22 Company Related Transactions
\nSchedule 2.25(b) Third-Party Y2K Compliance
\nSchedule 2.26 Material Customers and Suppliers
\nSchedule 2.27 Receivables Exceptions<\/p>\n
EXHIBITS<\/p>\n
Exhibit A [Deleted]
\nExhibit B Plan W
\nExhibit C Legal Opinion of Graubard Mollen & Miller
\nExhibit D Legal Opinion of Testa, Hurwitz & Thibeault, LLP
\nExhibit E Form of Employee Waiver
\nExhibit F Facilities Service Agreement
\nExhibit G License Agreement
\nExhibit H Limited Technology License<\/p>\n
iii<\/p>\n
STOCK PURCHASE AGREEMENT<\/p>\n
STOCK PURCHASE AGREEMENT, dated as of February 18, 2000, among
\nOFFICE.COM INC. (“Purchaser”) and INDIVIDUAL.COM, INC. (“Company”) and NEWSEDGE
\nCORPORATION (“Seller”).<\/p>\n
WHEREAS, Seller is the record and beneficial owner of all of the
\noutstanding capital stock of the Company and desires to sell it to Purchaser on
\nthe terms and conditions set forth herein; and<\/p>\n
WHEREAS, Purchaser desires to purchase all of the outstanding stock
\nof the Company from Seller on the terms and conditions set forth herein;<\/p>\n
NOW THEREFORE, in consideration of the mutual representations,
\nwarranties, agreements and covenants hereinafter set forth, and other valuable
\nconsideration, the receipt and sufficiency of which is hereby acknowledged, the
\nparties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
PURCHASE AND SALE OF SHARES<\/p>\n
SECTION 1.01 Purchase and Sale of Shares; Closing Dates.<\/p>\n
(a) Purchase and Sale. Subject to the terms and conditions of this
\nAgreement, Purchaser agrees to purchase from Seller and Seller agrees to sell to
\nPurchaser an aggregate of 5,000,000 shares of the Company’s common stock, par
\nvalue $0.01 per share (“Shares”), which constitute all of the outstanding shares
\nof the capital stock of Company, for an aggregate purchase price of Ten Million
\nDollars in cash, subject to the adjustments herein (the “Purchase Price”), and
\npayable in accordance with Section 1.02 below.<\/p>\n
(b) Closing Dates.<\/p>\n
(i) The closing (“First Closing”) of the purchase and sale of
\n 4,000,000 of the Shares (the “Initial Shares”) and the other matters
\n contemplated by this Agreement shall<\/p>\n
take place at 11:00 a.m. on the date hereof (“First Closing Date”)
\n at the office of Graubard Mollen & Miller, 600 Third Avenue, New
\n York, New York 10016.<\/p>\n
(ii) The closing (“Second Closing”) of the purchase and sale
\n of the remaining 1,000,000 of the Shares (the “Remaining Shares”)
\n shall take place at 11:00 a.m. on such date (“Second Closing Date”),
\n not later than February 28, 2001, specified by Purchaser in written
\n notice given by Purchaser to Seller not later than five (5) business
\n days prior to the Second Closing Date, at the office of Graubard
\n Mollen & Miller specified above.<\/p>\n
SECTION 1.02 Purchase Price; Interest; Adjustments to Purchase Price.<\/p>\n
(a) Purchase Price. Subject to adjustment pursuant to subsection (c)
\nbelow and to the other terms and conditions of this Agreement, Purchaser shall
\npay the Purchase Price for the Shares to Seller in the following manner:<\/p>\n
(i) a wire transfer to an account specified in writing by
\n Seller (“Seller’s Account”) in the amount of $2,500,000 (“Initial
\n Installment”) upon execution of this Agreement;<\/p>\n
(ii) a wire transfer to Seller’s Account in the amount of
\n $2,500,000 on May 1, 2000 (“Second Installment”);<\/p>\n
(iii) a wire transfer to Seller’s Account in the amount of
\n $3,000,000 on or before December 31, 2000 (“Third Installment”); and<\/p>\n
(iv) subject to Section 7.04, a wire transfer to Seller’s
\n Account in the amount of $2,000,000 on February 28, 2001 (“Final
\n Payment”).<\/p>\n
The period from the First Closing Date until February 28, 2001 is hereinafter
\nreferred to as “Payment Period.”<\/p>\n
(b) Interest. Notwithstanding that the Third Installment is not due
\nuntil December 31, 2000, if the Third Installment is not paid by 5:30 p.m., on
\nSeptember 1, 2000 Purchaser shall pay simple<\/p>\n
2<\/p>\n
interest on the unpaid principal amount of the Third Installment at the rate of
\nthe then current prime rate per annum, as reported by The Wall Street Journal,
\nplus 2%, commencing from the First Closing Date through the date immediately
\npreceding the payment in full of the Third Installment; provided, however, that
\nif and to the extent that any amount of the Third Installment is reduced in
\naccordance with this Agreement, (i) any interest due on that portion of the
\nThird Installment that was reduced shall cease and (ii) any interest paid on the
\nportion of the Third Installment that was reduced shall be returned to Purchaser
\nwithin ten business days from the date the determination was made to reduce the
\nPurchase Price pursuant to this Agreement.<\/p>\n
(c) Adjustments to Purchase Price. The Purchase Price shall be
\nadjusted for any or all of the following, as applicable:<\/p>\n
(i) Working Capital; Long-Term Liabilities.<\/p>\n
(A) Schedule 2.06(e) reflects Estimated Working Capital
\n of $260,037 (“Estimated Working Capital”). Seller will receive
\n a credit for Estimated Working Capital in calculating Reviewed
\n Working Capital, subject to adjustment as provided herein and
\n in subsection (C) below). Company will maintain responsibility
\n to collect its receivables (“Receivables”), provided that any
\n Receivables collected by Seller (which Seller shall have the
\n right to retain up to $260,037) shall reduce Reviewed Working
\n Capital dollar for dollar, as follows. To the extent the
\n amount of Receivables collected and retained by Seller through
\n the date Reviewed Working Capital is calculated is less than
\n $260,037, then Seller shall be paid the amount of such
\n difference (subject to any adjustments as provided in (C)
\n below) when Reviewed Working Capital becomes final, together
\n with interest calculated weekly on the declining balance of
\n Estimated Working Capital less Receivables collected by Seller
\n up to $260,037 from Closing at the interest rate specified in
\n Section 1.02(b) above. Any amount of Receivables collected by
\n Seller in excess of the $260,037 shall be promptly remitted to
\n Purchaser, or shall be deducted from next Purchase Price
\n Installment dollar for dollar plus interest at the rate
\n specified above.<\/p>\n
(B) If Reviewed Working Capital (as defined below) which
\n shall include a credit for Estimated Working Capital as
\n provided in (A) above (it being<\/p>\n
3<\/p>\n
understood that such credit shall include all adjustments in
\n paragraph (A) above and to the Estimated Working Capital
\n amount calculated by Seller, and shall not be double counted
\n in computing Reviewed Working Capital), exceeds $0, Purchaser
\n shall pay to Seller an amount equal to such excess. If
\n Reviewed Working Capital is less than $0, Seller shall pay to
\n Purchaser an amount equal to the difference. The amount
\n payable pursuant to this subsection (B) shall be paid in
\n accordance with subsection (C) directly below.<\/p>\n
(C) (1) As soon as reasonably practicable following the
\n First Closing Date, Purchaser, at its cost, shall conduct a
\n review of the assets and liabilities, including long-term
\n liabilities, of the Company to verify the Working Capital of
\n the Company as at the First Closing Date (“Reviewed Working
\n Capital”). Each Party will make available all relevant working
\n papers and records to the other.<\/p>\n
(2) Upon completion of such review, Purchaser
\n shall deliver to Seller a report (“Working Capital
\n Report”) stating Purchaser’s determination of Reviewed
\n Working Capital and of the Company’s long-term
\n liabilities, if any, at the First Closing Date. Seller
\n shall have twenty (20) business days after it receives
\n the Working Capital Report to deliver any objections
\n thereto in writing to Purchaser. If Seller fails to
\n deliver such written objections within such 20-day
\n period (“Objection Period”), the Working Capital Report
\n will be final and binding on the Parties. After the
\n delivery of any written objection, the Parties will have
\n ten (10) business days in which to reach a mutually
\n satisfactory agreement as to such objections. If at the
\n end of such 10-day period (“Reconciliation Period”), the
\n Parties have not reached a mutually acceptable agreement
\n as to such objections, then the Parties will cause their
\n respective accountants to present the dispute to an
\n independent public accounting firm mutually agreed upon
\n between the Parties (“Mediator”) within five days of the
\n end of the Reconciliation Period (“Mediation Date”). The
\n Mediator will determine if the Working Capital Report,
\n the objections thereto by Seller or some combination
\n thereof are correct and will notify the Parties in<\/p>\n
4<\/p>\n
writing as to its determination (“Determination”) on or
\n before 10 business days after the Mediation Date. The
\n Determination will be binding on the Parties. The fees,
\n costs and expenses charged and incurred by the Mediator
\n in making its Determination will be borne equally by the
\n Purchaser and the Seller or as otherwise determined by
\n the Mediator in its sole discretion.<\/p>\n
(ii) Receivables.<\/p>\n
(A) If any of the accounts receivable which formed a
\n part of the Reviewed Working Capital remain unpaid 120 days
\n after the First Closing Date, the Purchase Price shall be
\n reduced by the amount of the difference. Any accounts
\n receivable with respect to which the Purchase Price has been
\n so reduced and are then later collected shall be for the
\n account of Seller.<\/p>\n
(B) Purchaser shall forward its determination of
\n noncollectable accounts receivable (“Receivables Calculation”)
\n to Seller within 135 days after the First Closing Date.
\n Purchaser shall make available to Seller all relevant
\n workpapers and records. Seller shall have twenty (20) business
\n days after it receives the Receivables Calculation to deliver
\n any objections thereto in writing to Purchaser. If Seller
\n fails to deliver such written objections within such 20-day
\n period (“Receivables Objection Period”), the Receivables
\n Calculation will be final and binding on the Parties. After
\n the delivery of any written objection, the Parties will have
\n 10 business days in which to reach a satisfactory agreement to
\n such objections. If at the end of such 10-day period
\n (“Receivables Reconciliation Period”), the Parties have not
\n reached a mutually acceptable agreement as to such objections,
\n the Parties will cause their respective accountants to present
\n to a Mediator within ten (10) business days of the end of the
\n Receivables Reconciliation Period (“Receivables Mediation
\n Date”). The Mediator will determine if the Receivables
\n Calculation, the objection thereto by Seller or some
\n combination thereof are correct and will notify the Parties in
\n writing as to its determination (“Receivables Determination”)
\n on or before 10 business days after the Receivables Mediation
\n Date. The Receivables Determination will be binding <\/p>\n
5<\/p>\n
on the Parties. The fees, costs and expenses charged and
\n incurred by the Mediator in making its Receivables
\n Determination will be borne equally by the Purchaser and the
\n Seller or as otherwise determined by the Mediator in its sole
\n discretion.<\/p>\n
(iii) Payment. Any payment to Seller or Purchaser, as the case
\n may be, pursuant to subsection 1.02(c), to the extent not already
\n paid, must be made within five business days following (A) the
\n expiration of the Objection Period or the Receivables Objection
\n Period, as the case may be (if no objections are made), (B) the
\n expiration of the Reconciliation Period or the Receivables
\n Reconciliation Period, as the case may be (if objections are made
\n and mutually resolved), or (C) the date of the Determination or the
\n Receivables Determination, as the case may be (if objections are
\n resolved by the Mediator). To the extent any such payment is not
\n timely made pursuant to this subsection, it may be deducted by
\n Purchaser from the amount of the next Purchase Price installment
\n (and subsequent installments, if necessary). Notwithstanding the
\n foregoing, payment by Seller with respect to long-term liabilities
\n of the Company other than those owed to Seller or any of its
\n Affiliates (“Third Party Long-Term Liabilities”) shall not be so
\n deducted and shall be paid by Seller to Purchaser on or before
\n February 28, 2001.<\/p>\n
SECTION 1.03 Prorations.<\/p>\n
(a) All employee salaries and benefits, utilities expenses, rights
\nto goods and services and all other economic benefits arising out of
\nprepayments, payments in advance and deposits by the Company and other items
\ncustomarily apportioned between buying and selling parties shall be allocated
\nbetween the Parties and pro rated as of the opening of business on February 15,
\n2000.<\/p>\n
(b) On or before 10 days after the First Closing Date, Purchaser
\nshall deliver a statement to Seller setting forth its determination of the
\nallocations and prorations provided for in Section 1.03(a), together with a
\nreasonably detailed supporting statement. Seller and its Representatives shall
\nbe permitted to request and receive information pertaining to the allocations
\nand prorations and such statement during the 15-day period after delivery of the
\nstatement. The amounts of the allocations and prorations set forth in such
\nstatement shall be final, conclusive and binding upon the Parties 15 days after
\nsuch statement has been delivered to Seller unless, during such 15-day period,
\nSeller delivers to Purchaser a notice objecting to such statement, which notice
\nshall included a reasonably detailed statement of the basis for<\/p>\n
6<\/p>\n
such objection. If Seller delivers such a notice, it and Purchaser shall
\nnegotiate in good faith to resolve the objections raised in the notice. If the
\nobjections are not resolved within 30 days after delivery of the notice,
\nPurchaser and Seller shall jointly select a nationally recognized firm of
\nindependent certified public accountants not affiliated with either Party to
\nresolve such objections and determine the amounts of the allocations and
\nprorations, which determination shall be final, conclusive and binding upon the
\nParties. Upon final determination of the allocations and prorations, the Parties
\nshall make appropriate payments to one another.<\/p>\n
SECTION 1.04 Second Closing; Final Payment. At the Second Closing, the
\nRemaining Shares shall be delivered by Seller to Purchaser duly endorsed for
\ntransfer (which may be effected by a separate stock power). The Final Payment
\n(subject to offset, if any, against the amount thereof pursuant to Section 7.04
\nhereof) shall be made by Purchaser on the later of the Second Closing Date or
\nFebruary 28, 2001 by wire-transfer to an account specified by Seller.<\/p>\n
ARTICLE II
\n REPRESENTATIONS AND WARRANTIES
\n OF SELLER AND THE COMPANY<\/p>\n
Seller and the Company, severally and jointly, represent and warrant to
\nthe Purchaser that, as of the date hereof<\/p>\n
SECTION 2.01 Organization; Subsidiaries.<\/p>\n
(a) Each of Seller and the Company is a corporation duly organized,
\nvalidly existing and in good standing under the laws of the state of its
\nincorporation; the Company is qualified to do business in each state where the
\nnature of the business it conducts or the properties it owns, leases or operates
\nrequires it to so qualify (which states are listed in Schedule 2.01(a)), except
\nwhere the failure to so qualify would not reasonably be expected to have, either
\nsingly or in the aggregate, a material adverse effect on the results of
\noperations, financial condition, business, assets or prospects of the Company or
\nmaterially impair either the Company’s or the Seller’s ability to consummate the
\ntransactions contemplated by this Agreement (a “Company Material Adverse
\nEffect”). The Company has all requisite corporate power to own, lease and
\noperate its properties and to carry on its business as now being conducted. <\/p>\n
7<\/p>\n
(b) Except as described on Schedule 2.01(b), the Company does not
\nown, directly or indirectly, any capital stock or other securities of any issuer
\nor any equity interest in any other entity, including any partnership, limited
\npartnership, limited liability company, business trust, joint venture or any
\nother business entity, and is not a party to any agreement to acquire any such
\nsecurities or interest.<\/p>\n
SECTION 2.02 Authority; Corporate Action. Each of the Company and Seller
\nhas the necessary power and authority to enter into this Agreement and the
\nBusiness Agreements to which it is a party, and to consummate the transactions
\ncontemplated hereby and thereby. All action necessary to be taken by each of the
\nCompany and Seller to authorize the execution, delivery and performance of this
\nAgreement and each of the Business Agreements to which they are a party and all
\nother instruments delivered by the Company (and Seller) in connection with the
\ntransactions contemplated hereby or thereby has been duly and validly taken and
\nthis Agreement each of the Business Agreements have been duly executed and
\ndelivered by each of the Company and Seller to the extent they a party hereto or
\nthereto. Subject to the terms and conditions hereof, this Agreement and the
\nBusiness Agreements constitute the valid, binding and enforceable obligation of
\neach of the Company and Seller to the extent they are a party hereto and
\nthereto, enforceable against such parties in accordance with their respective
\nterms, except as enforceability may be limited by applicable bankruptcy,
\ninsolvency, reorganization, moratorium, fraudulent transfer or similar laws of
\ngeneral application now or hereafter in effect affecting the rights and remedies
\nof creditors and by general principles of equity (regardless of whether
\nenforcement is sought in a proceeding at law or in equity).<\/p>\n
SECTION 2.03 No Conflict; Required Filings and Consents.<\/p>\n
(a) The execution and delivery of this Agreement, the Escrow
\nAgreement and the Business Agreements by the Company and Seller, and the
\nperformance by the Company and Seller of their respective obligations under this
\nAgreement, the Escrow Agreement and the Business Agreements to which it is a
\nparty, does not (i) conflict with or violate the Certificate of Incorporation or
\nBy-laws either of the Company or Seller, (ii) conflict with or violate any law,
\nstatute, ordinance, rule, regulation, order, judgment or decree applicable to
\neither of the Company or Seller or by which any of their respective properties
\nor assets is bound or subject, or (iii) except as set forth in Schedule 2.03(a),
\nresult in any breach of or constitute a default (or an event which with notice
\nor lapse of time or both would become a default) under, or give to others any
\nrights of termination, amendment, acceleration or cancellation of, or result in
\nthe creation of a Lien (as defined in Article VIII hereof) on any of the
\nproperties or assets of the Company pursuant to, any note, bond, mortgage,
\nindenture, contract, agreement, lease, license, permit, franchise or<\/p>\n
8<\/p>\n
other instrument or obligation to which the Company is a party or by which the
\nCompany or any of its properties or assets is bound or subject, except, in the
\ncase of clauses (ii) and (iii), above, for any such conflicts, violations,
\nbreaches, defaults or other alterations or occurrences that would not reasonably
\nbe expected to have a Company Material Adverse Effect.<\/p>\n
(b) The execution and delivery of this Agreement, the Escrow
\nAgreement and the Business Agreements by the Company and Seller, and the
\nperformance of this Agreement, the Escrow Agreement and the Business Agreements
\nby the Company and Seller, does not require any consent, approval, authorization
\nor permit of, or filing with or notification to, any governmental entity, except
\n(i) for compliance with the applicable requirements, if any, of the Securities
\nAct of 1933, as amended (“Securities Act”), the Securities Exchange Act of 1934,
\nas amended (“Exchange Act”), state securities laws or state takeover laws or
\nNasdaq; (ii) as set forth on Schedule 2.03(b) and (iii) where failure to obtain
\nsuch consents, approvals, authorizations or permits, or to make such filings or
\nnotifications, would not reasonably be expected to have a Company Material
\nAdverse Effect.<\/p>\n
SECTION 2.04 Capitalization; No Shareholder Agreements. The authorized
\ncapital stock of the Company and the number of issued and outstanding shares of
\nthe Company capital stock are set forth in Schedule 2.04. Any agreement existing
\nbetween any shareholder of the Company and any other party with respect to the
\nCompany’s capital stock has been terminated and is of no force or effect. Seller
\nis the sole record and beneficial owner of all of the Company’s capital stock,
\nfree and clear of all Liens. There are no options, warrants, subscriptions,
\nconversion rights or securities exchange rights or other securities or other
\ncontractual rights outstanding which require, or give any person the right to
\nrequire, the issuance, delivery or sale (including right of conversion or
\nexchange) of any Company capital stock whether unissued or owned by Seller,
\nwhether or not such rights are presently exercisable. There are no preemptive
\nrights, rights of first refusal or other similar agreements obligating the
\nCompany to offer any shares of its capital stock to any person and none of the
\nshares of the Company was issued in violation of any such rights. No holder of
\nany securities of the Company (or securities issuable in exchange therefor) has
\nthe right to require any party to register such securities under the Securities
\nAct of 1933, as amended (“Securities Act”), either on a “demand” or a
\n“piggyback” basis. All shares, options and warrants and other securities of the
\nCompany issued since its date of incorporation were issued in compliance with
\nthe registration provisions of the Securities Act or pursuant to an exemption
\ntherefrom. The Company does not have outstanding any bonds, debentures, notes or
\nother obligations under the terms of which the holders thereof have any rights
\nto vote with the shareholder of the Company.<\/p>\n
9<\/p>\n
SECTION 2.05 Licenses and Permits; Compliance with Laws. The Company holds
\nall permits, licenses and approvals from all Federal, state and local
\ngovernmental authorities (collectively, the “Permits”) necessary for it to own,
\nlease and operate its properties and to carry on its businesses as now being
\nconducted, and no such Permit has been rescinded and all such Permits are in
\nfull force and effect and are listed on Schedule 2.05, except for such Permits
\nthe failure to hold which would not reasonably be expected to have, either
\nsingly or in aggregate, a Company Material Adverse Effect. Seller holds all
\nPermits necessary to offer the services to the Company pursuant to the License
\nAgreement, and no such Permit has been rescinded and all such Permits are in
\nfull force and effect and listed on Schedule 2.05, except for such Permits the
\nfailure to hold which would not have a material adverse effect on Seller. The
\nbusiness of each of the Company and Seller is being and has been conducted in
\ncompliance with the Permits and all applicable laws, statutes, ordinances,
\nregulations, judgments, orders, decrees, concessions, grants and other
\nauthorizations of any governmental authority, except for such failures that
\nwould not reasonably be expected to have, either singly or in the aggregate, a
\nCompany Material Adverse Effect or a material adverse effect on Seller. Neither
\nthe Company nor Seller is in default in any respect under any of such Permits
\nand no event has occurred and no condition exists which, with the giving of
\nnotice, the passage of time, or both, would constitute a default thereunder,
\nexcept where such defaults would not reasonably be expected to have, either
\nsingly or in the aggregate, a Company Material Adverse Effect or a material
\nadverse effect on Seller. Neither the execution and delivery of this Agreement
\nnor any of the other documents contemplated hereby, including the Business
\nAgreements nor the consummation of the transactions contemplated hereby or
\nthereby nor compliance by each of the Company and Seller with any of the
\nprovisions hereof or thereof will result in any suspension, revocation,
\nimpairment, forfeiture or nonrenewal of any Permit, except for such Permits the
\nloss or impairment of which would not reasonably be expected to have, either
\nsingly or in the aggregate, a Company Material Adverse Effect. Neither the
\nCompany nor Seller provides any services with respect to the business of the
\nCompany that would require either of them to obtain any authorization or make
\nany registration in any foreign country.<\/p>\n
SECTION 2.06 Financial Statements; Financial Matters.<\/p>\n
(a) Attached as Schedule 2.06(a) are the unaudited financial
\nstatements of the Company and its predecessor for (i) the year ended December
\n31, 1999 consisting of a balance sheet, statement of operations and statement of
\nshareholders’ equity and (ii) each month (or portion thereof) from January 1,
\n2000 through the Closing (collectively, the “Company Financial Statements”). The
\nCompany<\/p>\n
10<\/p>\n
Financial Statements, including all related notes and schedules thereto, fairly
\npresent in all material respects the financial position and results of
\noperations of the Company and its predecessors as at the respective dates and
\nthe respective periods indicated therein in accordance with generally accepted
\naccounting principles applied on a consistent basis throughout the periods
\ninvolved and are consistent with the books and records of the Company.<\/p>\n
(b) Attached as Schedule 2.06(b) are schedules of the accounts
\nreceivable, prepaid expenses, accounts payable and accrued expenses of the
\nCompany, as of January 31, 2000, determined on an accrual basis in accordance
\nwith the books and records of the Company (which books and records are accurate
\nand complete). The accounts receivable of the Company reflected on Schedule
\n2.06(b) have arisen from bona fide transactions and are reflected on the books
\nand records of the Company. Reserves for any uncollectability of any such
\naccounts receivable are reflected on such schedule.<\/p>\n
(c) Liabilities.<\/p>\n
(i) Except for accounts payable and accrued expenses and as
\n set forth in Schedule 2.06(b), the Company has no debts,
\n liabilities, commitments or obligations (including, without
\n limitation, any unasserted claims for which there are circumstances
\n known or which should reasonably be known to exist by Seller or the
\n Company that could serve as a basis therefor), absolute or
\n contingent, liquidated or unliquidated, matured or unmatured, or due
\n or to become due.<\/p>\n
(ii) Neither Schedule 2.06(a) or (b) contains any intercompany
\n liabilities or long-term liabilities or any other liability not
\n incurred in the ordinary course of business.<\/p>\n
(iii) All indebtedness, intercompany liabilities and other
\n liabilities not incurred in the ordinary course of business or not
\n reflected on the Company Financial Statements have been canceled,
\n without taxable income to the Company, or have otherwise been
\n assumed by Seller in full, without recourse against the Company, as
\n of the date hereof.<\/p>\n
(d) Each of Seller’s and the Company’s books and records are
\naccurate and complete and sufficient to enable Purchaser or its agents to
\nprepare audited financial statements regarding the Company’s business for the
\nimmediately preceding two calendar years.<\/p>\n
11<\/p>\n
(e) Attached as Schedule 2.06(e) is a certificate prepared by Seller
\ncertifying as to the Company’s Working Capital as of the date hereof (“Estimated
\nWorking Capital”). As used herein, “Working Capital” means the current assets
\n(consisting of accounts receivable (without deduction for reserves) and prepaid
\nexpenses) of the Company minus the current liabilities (consisting of accounts
\npayable and accrued expenses) of the Company, all determined in accordance with
\ngenerally accepted accounting principles.<\/p>\n
(f) The Company Financial Statements reflect the operations of the
\nCompany as if the Company were operated as a stand-alone operation for the
\nentire period set forth therein.<\/p>\n
(g) Advertising revenues appearing in the Company Financial
\nStatements represent cash sales only and not barter or cash swap transactions,
\nexclusive of “e-commerce\/other” revenues that are less then 5% of total revenues
\nfor 1999.<\/p>\n
SECTION 2.07 Real Property. The Company does not own, and never has owned,
\nany real property. Schedule 2.07 contains a true, correct and complete list and
\nbrief description of all (i) real property leased or subleased by the Company
\nincluding the premises utilized by the Company with permission of Seller
\npursuant to the Facilities Services Agreement and (ii) other material real
\nproperty utilized or accessed by the Company in the operation of its business,
\nincluding the telephone and other shared properties with Seller pursuant to the
\nFacilities Services Agreement, and including all rights-of-way and easement
\nagreements, all of which properties are hereinafter referred to as the “Leased
\nReal Property”. Seller and the Company have provided to Purchaser true, correct
\nand complete copies of the leases for or other agreements or arrangements under
\nwhich the Company has the right to use the Leased Real Property (” Leases”) and
\nany sublease to or other similar agreement or arrangement with any third party
\nwith respect to such premises (“Subleases”). The space occupied by the Company
\nis adequate for its current operations. Except as set forth in Schedule 2.07,
\nneither Seller or the Company has subleased any Leased Real Property to others.
\nEach of Seller and the Company is in compliance with all of the provisions of
\nsuch Leases and Subleases and is not in default thereunder, except where such
\ndefault or noncompliance would not have a Company Material Adverse Effect. Each
\nsuch leasehold interest (i) is valid, subsisting and in full force and effect;
\nand (ii) is not subject to any Liens (other than collateral assignments of the
\nleases granted by the landlords thereunder to the extent permitted by the terms
\nof such Leases and which do not interfere with or detract from the Company’s use
\nof the property subject to such Leases). The rental set forth in each of the
\nLeases listed in Schedule 2.07 is the actual rental currently being paid or to
\nbe paid by<\/p>\n
12<\/p>\n
the Company and there are no separate agreements or understandings with respect
\nto same other than the Facilities Services Agreement and the Company is current
\non such rental obligations. Each parcel of Leased Real Property is occupied
\nunder a valid and current occupancy permit or the like to the extent required by
\nlaw. There are no facts known to the Company or Seller which would prevent any
\nLeased Real Property from being occupied by the Company immediately after the
\ndate hereof in substantially the same manner as before. The execution and
\ndelivery of this Agreement, and the performance of the obligations of the
\nCompany and Seller hereunder and under the Business Agreements, will not
\nconstitute a default under any Lease or Sublease and do not require the consent
\nof any other party to any Lease or Sublease except for consents listed on
\nSchedule 2.08(b), all of which have been obtained.<\/p>\n
SECTION 2.08 Material Contracts.<\/p>\n
(a) Schedule 2.08(a) sets forth a complete and correct list of all
\nmaterial agreements to which the Company (or to the extent such agreement is for
\nthe benefit of the Company, the Seller) is a party or by which it (or the
\nSeller) is bound and all or any portion of which are currently in effect and all
\nagreements of the following types regardless of materiality (collectively, the
\n“Material Contracts”): (i) agreements governing (A) website development,
\nmaintenance, and advertising or (B) network monitoring or maintenance; (ii)
\nemployment, severance, termination, consulting and retirement agreements; (iii)
\nloan agreements, indentures, letters of credit, mortgages, notes and other debt
\ninstruments; (iv) other agreements, other than contracts with customers and
\nsuppliers, that required or require aggregate payments in any twelve month
\nperiod to or by the Company of more than Fifty Thousand Dollars ($50,000) in the
\naggregate; (v) agreements containing any “change of control” provisions that
\nwill be triggered by any of the transactions contemplated by this Agreement;
\n(vi) agreements, arrangements or understandings with any director or officer of
\nthe Company or between the Company and Seller or any officer, director or
\nshareholder of the Company or with any Affiliate of any thereof; (vii)
\nagreements prohibiting the Company from engaging or competing in any line of
\nbusiness or limiting such competition; (viii) joint venture, partnership and
\nsimilar agreements; (ix) acquisition or divestiture agreements relating to the
\nsale or purchase of assets or stock of the Company (other than sales of
\ninventory in the ordinary course of business) or the purchase of assets or stock
\nof any other person (other than the purchase of inventory, supplies or equipment
\nin the ordinary course of business); (x) brokerage, finder’s or financial
\nadvisory agreements; (xi) guarantees of indebtedness for borrowed money of any
\nperson; and (xii) licensing and rights arrangements for any Intellectual
\nProperty (as defined in Article VIII), including all licenses of Intellectual
\nProperty and any related rights to or granted by the Company (or Seller to the
\nextent it is used<\/p>\n
13<\/p>\n
by the Company). True and complete copies of all Material Contracts have been
\ndelivered to Purchaser. Except as set forth on Schedule 2.08(a), the Company is
\nnot currently, nor has it been during the past two years, a party to any prime
\ncontract, subcontract, basic ordering agreement, letter contract, arrangement,
\npurchase order, or delivery order of any kind, including all amendments,
\nmodifications, and options thereunder or relating thereto, given by a party
\nholding itself out as a Federal or state government or agency, division,
\nsubdivision or procuring office or agent thereof that required payments by such
\nparty in any twelve month period of more than $5,000.<\/p>\n
(b) Except as set forth in Schedule 2.08(b), all Material Contracts
\nare valid and in full force and effect and the Company has not (nor does it or
\nSeller have any knowledge that any other party thereto has) violated any
\nprovision of, or committed or failed to perform any act which with or without
\nnotice, lapse of time or both would constitute a default under the provisions
\nof, any Material Contract, except for defaults that would not reasonably be
\nexpected to have, either singly or in the aggregate, a Company Material Adverse
\nEffect. The execution and delivery of this Agreement and the Business Agreements
\nand the performance of the obligations of the Company and Seller hereunder and
\nunder the Business Agreements to which it is a party will not constitute a
\ndefault under any Material Contract and do not require the consent of any other
\nparty to any Material Contract, except for consents listed on Schedule 2.08(b),
\nall of which have been obtained.<\/p>\n
SECTION 2.09 Litigation. Except as set forth on Schedule 2.09, there are
\nno actions, suits, arbitrations, mediations or other proceedings pending or, to
\nthe knowledge of the Company or Seller, threatened against the Company or Seller
\nat law or in equity before any court, Federal, state, municipal or other
\ngovernmental department or agency or other tribunal nor, to the knowledge of the
\nCompany or Seller, are there any customer complaints or other circumstances
\nwhich could reasonably be expected to serve as a basis for same. Neither the
\nCompany nor Seller or their respective properties or assets is subject to any
\norder, judgment, injunction or decree of any court or governmental authority.<\/p>\n
SECTION 2.10 Taxes. Tax Returns and Audits. Except as set forth in
\nSchedule 2.10, the Company has prepared and filed on a timely basis with all
\nappropriate Federal, state, local and foreign governmental authorities all
\nmaterial returns in respect of Taxes it is required to file on or prior to the
\ndate hereof and all such returns completely and accurately set forth the amount
\ndue of any Taxes relating to the applicable period. Except as set forth in
\nSchedule 2.10, the Company has paid in full all Taxes due on or before the date
\nhereof. In the case of Taxes accruing on or before the date hereof that are not
\ndue on or<\/p>\n
14<\/p>\n
before the date hereof, such Taxes do not exceed $5,000. The Company has
\nwithheld from each payment made to any of its present or former employees,
\nofficers, directors or other party all amounts required by law to be withheld
\nand has, where required, remitted such amounts within the applicable periods to
\nthe appropriate governmental authorities. In addition, other than as set forth
\non Schedule 2.10, (i) there are no assessments against the Company with respect
\nto Taxes that have been issued and are outstanding; (ii) no governmental
\nauthorities have audited or, to the knowledge of Seller, examined the Company in
\nrespect of Taxes; (iii) the Company has not executed or filed any agreement
\nextending the period of assessment or collection of any Taxes which has not yet
\nexpired by its terms; (iv) Company has not received written notification from
\nany governmental authority of its intention to commence any audit or
\ninvestigation; (v) the Company is not a party to, or bound by, nor does it have
\nany obligation under any Tax sharing or Tax indemnification agreement, provision
\nor arrangement, whether formal or informal, and no power of attorney, which is
\ncurrently in effect, has been granted with respect to any matter relating to
\nTaxes of the Company; and (vi) the Company is not presently required nor will it
\nbe required to include any adjustment in taxable income under Section 481 of the
\nCode (or any similar provision of the Tax laws of any jurisdiction) as a result
\nof any change in method of accounting or otherwise.<\/p>\n
SECTION 2.11 Absence of Certain Changes; Ordinary Course of Business.<\/p>\n
(a) Except as set forth on Schedule 2.11, the Company has not since
\nDecember 31, 1999:<\/p>\n
(i) operated the Company other than in accordance with its
\n past practices and Plan W, a copy of which is attached hereto as
\n Exhibit B;<\/p>\n
(ii) issued, delivered or agreed to issue any stock, bonds or
\n other corporate securities (whether authorized and unissued or held
\n in the treasury), or granted or agreed to grant any options
\n (including employee stock options), warrants or other rights for the
\n issue thereof (Schedule 2.11 to delineate all such items);<\/p>\n
(iii) borrowed or agreed to borrow any funds;<\/p>\n
(iv) incurred any obligation or liability, absolute, accrued,
\n contingent or otherwise, whether due or to become due, except
\n current liabilities incurred in the ordinary<\/p>\n
15<\/p>\n
course of business and consistent with prior practice and expenses
\n incurred in connection with the transactions contemplated by this
\n Agreement;<\/p>\n
(v) made capital expenditures exceeding $25,000 individually
\n or $50,000 in the aggregate;<\/p>\n
(vi) other than pursuant to this Agreement, discharged or
\n satisfied any obligation or encumbrance other than ordinary
\n operating expenses and trade payables reflected in the Financial
\n Statements, and trade payables and other operating expenses incurred
\n after December 31, 1999 in the ordinary course of business and
\n consistent with prior practice, all of which payments have been made
\n in a manner consistent with prior practice;<\/p>\n
(vii) failed to pay any payables when due, consistent with
\n prior practice;<\/p>\n
(viii) sold, transferred, leased to others or otherwise
\n disposed of any assets outside of the ordinary course of business or
\n canceled or compromised any debt or claim, or waived or released any
\n right of substantial value;<\/p>\n
(ix) received any notice of termination or threatened
\n termination of any Material Contract, Lease, Sublease, Permit or
\n other agreement, or suffered any damage, destruction or loss
\n (whether or not covered by insurance) the effect of which would
\n reasonably be expected to have a Company Material Adverse Effect;<\/p>\n
(x) encountered any labor union organizing activity, labor
\n disputes or had any material adverse change in its relations with
\n its employees or agents, clients or insurance carriers;<\/p>\n
(xi) made any accrual or arrangement for any payment or any
\n bonus, or any increase in compensation or any severance or
\n termination payment to (i) any present or former officer or employee
\n of the Company; or (ii) any person, firm or corporation which is or
\n was furnishing professional or consulting services to the Company;<\/p>\n
16<\/p>\n
(xii) transferred or granted any rights under, or entered into
\n any settlement regarding the breach or infringement of, any license
\n or any of the Intellectual Property used in the businesses or
\n operations of the Company, or licensed or otherwise transferred or
\n disposed of any of its material Intellectual Property;<\/p>\n
(xiii) declared or made, or agreed to declare or make, any
\n payment of dividends or distributions of any assets of any kind
\n whatsoever to its sole shareholder or any Affiliate of any of its
\n sole shareholder, or purchased or redeemed, or agreed to purchase or
\n redeem, any of its capital stock, or made or agreed to make any
\n payment to its sole shareholder or any Affiliate of its sole
\n shareholder, whether on account of debt, management fees or
\n otherwise;<\/p>\n
(xiv) suffered any material adverse change, in any case or in
\n the aggregate, in its assets, liabilities, financial condition,
\n results of operations or business; or<\/p>\n
(xv) entered into any agreement or made any commitment to take
\n any of the types of action described in any of the foregoing clauses
\n (other than clauses (ix), (x) or (xiv)).<\/p>\n
(b) Since December 31, 1999, Seller has used reasonable efforts to
\nfund the operation of the Company’s business through the date hereof, at the
\nlevel provided in Plan W, including $200,000 for online advertising in
\nreasonable consultation with Purchaser.<\/p>\n
SECTION 2.12 Employee Benefit Plans. Schedule 2.12 sets forth a list of
\nall the employee benefit plans (as defined in Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”)), programs and
\narrangements maintained by the Company and\/or Seller for the benefit of any
\ncurrent or former employee, officer or director of the Company (collectively,
\nthe “Company Benefit Plans”). Each Company Benefit Plan intended to be qualified
\nunder Sections 401(a) and 501(a) of the Code is the subject of a favorable
\ndetermination letter from the Internal Revenue Service that it is so qualified
\nand, to the knowledge of the Company and Seller, nothing has occurred since the
\ndate of the most recent letter that could reasonably be expected to materially
\nadversely affect the qualified status of such Company Benefit Plan (other than
\namendments to such Company Benefit Plan and changes in applicable law for which
\nthe remedial amendment period has not yet expired). Each Company Benefit Plan
\nhas been<\/p>\n
17<\/p>\n
operated in all material respects in accordance with the terms and requirements
\nof applicable law and all required returns and filings for each Company Benefit
\nPlan have been timely made, except for failures that would not have a Company
\nMaterial Adverse Effect. Neither the Company nor any other entity under common
\ncontrol (within the meaning of Section 414(b) or (c) of the Code) with the
\nCompany has incurred any direct or indirect liability under, arising out of or
\nby operation of Title IV of ERISA in connection with any Company Benefit Plan
\nand no fact or event exists, to the knowledge of the Company and Seller, that
\ncould reasonably be expected to give rise to any such liability. All
\ncontributions due and payable on or before the date hereof in respect of each
\nCompany Benefit Plan have been made in full and in proper form.<\/p>\n
SECTION 2.13 Labor Relations; Employees; Employee Offers. Neither Seller
\nnor the Company is a party to any collective bargaining agreement or other
\ncontract or agreement with any labor organization or other representative of any
\nof the employees of the Company regarding the employees of the Company. To the
\nknowledge of the Company and Seller, there have been no labor organization
\nactivities involving any of the employees of the Company during the last five
\nyears. Schedule 2.13 hereto contains a complete list of all of the current
\nemployees of the Company, including salary, bonus, target and variable pay and
\nall other material perquisites and benefits paid or accrued for the periods
\nspecified therein. Except as indicated in Schedule 2.13, none of such employees
\nis subject to an employment agreement or employment restriction with the Company
\nand all employees of the Company are terminable at will. No employee of the
\nCompany has any right or claim (legal, equitable or otherwise) to receive any
\nportion of the Purchase Price.<\/p>\n
SECTION 2.14 Insurance Policies; Claims. Schedule 2.14 sets forth all
\ninsurance policies and bonds maintained by or on behalf of the Company. The
\ninsurance policies and bonds set forth in Schedule 2.14 are provided by
\nreputable insurers or issuers, and provide adequate coverage for all normal
\nrisks incident to the businesses of the Company and its assets. No written
\nclaims have been received by the Company as a result of allegedly defective
\nproducts or services or any alleged libelous, slanderous or defamatory
\nstatements or activities and neither the Company nor Seller know of any
\ncircumstances which could reasonably be expected to give rise to any such claim.
\nNo insurance policy issued to or on behalf of or regarding the Company has ever
\nbeen canceled by the policy issuer. No issuer of any policy covering the Company
\nor any of its assets, operations or employees has refused to honor a claim
\nduring the past three years (other than health insurance claims of employees and
\ntheir dependents).<\/p>\n
SECTION 2.15 Intellectual Property.<\/p>\n
18<\/p>\n
(a) Prior to the date hereof, Seller has irrevocably assigned and
\ntransferred to the Company all rights and interests (ownership and otherwise)
\nworldwide in and to the Intellectual Property (as defined below) that is used
\nexclusively in connection with the business of the Company or its predecessors,
\nall of which, except for commercially available software packages, is listed in
\nSchedule 2.15. The Intellectual Property described in Schedule 2.15, together
\nwith the rights granted under the License Agreement and the rights to
\ncommercially available software packages, constitutes all the Intellectual
\nProperty (both owned and licensed) used or held by the Company in the conduct of
\nits business as it has heretofore been conducted and there are no other items of
\nIntellectual Property that are material to the Company or its business. The
\nCompany owns or possesses all right, title and interest in and to, or a valid
\nand enforceable license or other right to use, all of the Intellectual Property
\nthat is material to the conduct of its business (including all necessary rights
\nto display all content displayed on its websites). Schedule 2.15 identifies each
\npatent, copyright or other registration which has been or is issued to or is
\nused exclusively by the Company, except for commercially available software
\npackages, and identifies each entity which owns the rights to such Intellectual
\nProperty, if not the Company, and each pending patent or copyright application
\nor other application for registration which the Company has made with respect to
\nany of its Intellectual Property. Schedule 2.15 also identifies each registered
\nor unregistered trade name, statutory or common law trademark, service mark,
\ncorporate name and statutory or common law copyright used or held by the
\nCompany. Except as disclosed in Schedule 2.15, (i) the Company owns, free and
\nclear of all Liens and has the exclusive right to use all of its Intellectual
\nProperty; (ii) all registrations with respect thereto are in full force and
\neffect; (iii) all relevant documentation and explanatory materials relating
\nthereto in reasonable detail has been provided to Purchaser or Purchaser has
\nbeen provided access thereto; and (iv) the Company has taken appropriate and
\nreasonable security measures to protect the secrecy and confidentiality of the
\nCompany’s trade secrets and related Intellectual Property. All Intellectual
\nProperty licensed to third parties is listed on Schedule 2.15. Except as set
\nforth on Schedule 2.15, websites hosted or served by the Company or on behalf of
\nthe Company are operated on a continual 24-hour per day\/7-day per week basis.
\nThe Company has not, and, to its knowledge, any third-party content distributed
\nby it has not, infringed, misappropriated or otherwise violated any Intellectual
\nProperty of any other person. To the knowledge of the Company and Seller, no
\nperson is infringing upon any Intellectual Property right of the Company.<\/p>\n
(b) “Intellectual Property” means all patents, patent applications
\nand patent disclosures; all copyrights, copyright applications and copyright
\ndisclosures; all inventions (whether or not patentable and whether or not
\nreduced to practice); all registered and unregistered statutory and common<\/p>\n
19<\/p>\n
law trademarks, service marks and service mark rights, trade dress, trade names
\nand trade name rights, corporate names, and all the goodwill associated
\ntherewith; all registrations, applications and renewals for any of the
\nforegoing; all protocols, codes and operating systems; and all trade secrets,
\nconfidential information, formulae, compositions, manufacturing and production
\nprocesses and techniques, research information, drawings, specifications, design
\nplans, improvements, proposals, technical and computer data, documentation and
\nsoftware, brand names, inventions, processes, trade dress, business and product
\nnames, industrial models, designs, methodologies, computer programs (including
\nall source codes), databases, HTML, Java and related codes, technical
\ninformation, engineering and technical drawings, financial business and
\nmarketing plans, customer and supplier lists and related proprietary
\ninformation, marketing materials and all other proprietary intellectual property
\nrights, including all URLs, web sites and source codes.<\/p>\n
(c) Each of the Company and Seller has caused each of its current
\nemployees, consultants and independent contractors, as applicable, that have
\nworked on or contributed to the development or improvement of any of its
\nIntellectual Property, to execute applicable “work for hire” (as such term is
\nused in the Federal copyright statute) agreements and\/or assignments required to
\nvest in the Company full, effective, exclusive and original ownership of all
\nsuch Intellectual Property.<\/p>\n
SECTION 2.16 Domain Names; Registered Users.<\/p>\n
(a) Seller has irrevocably assigned and transferred to the Company
\nall rights in and to any domain names used or intended to be used by the
\nCompany.<\/p>\n
(b) Schedule 2.16 sets forth all domain names assigned to or
\nreserved by the Company. Except as set forth in Schedule 2.16, all such domain
\nnames have been validly obtained by the Company and are exclusive to the Company
\nin accordance with applicable Network Solutions, Inc. rules. Except as set forth
\nin Schedule 2.16, all filings, payments and actions have been made or taken and
\nthe domain names used in such manner as may be necessary to maintain the right
\nto such names. To the knowledge of the Company, none of such domain names are a
\nfederally registered trademark of any third party, except as set forth on
\nSchedule 2.16. The validity of such domain names have not been challenged by any
\nparty, and to the knowledge of the Company and Seller, no circumstances exist
\nwhich would reasonably form the basis for any such challenge.<\/p>\n
20<\/p>\n
(c) The number of registered users who permit the Company to send
\nthem E-mail, as determined by Digital Impact (a company that provides E-mail to
\nthe Company’s users) in connection with the Company’s E-mailing on or before
\nJanuary 31, 2000 is not less than 491,563. Seller has furnished Purchaser with a
\nlist of all persons who are currently active registered users of the Company’s
\nor its predecessors’ services through February 7, 2000. This list is contained
\nin zipped text files (active1.zip, active2.zip, active3.zip, active4.zip,
\nactive5.zip, active6.zip) attached to an E-Mail for James Mount of Computer
\nAssociates (james.mount@ca.com) per the Business and
\nTechnology Assessment project contracted by Guarantor. The names were selected
\nfrom the registered user database as accounts for which the “orderstatus” field
\nis set to “active.”<\/p>\n SECTION 2.17 Personal Properties; Assets.<\/p>\n
(a) Seller has contributed as capital to the Company, free and clear
\nof all Liens, all of Seller’s assets and property used in the conduct of the
\nbusiness or its predecessors, including, without limitation, all fixed and
\nintangible assets, inventory, Material Contracts and rights in Intellectual
\nProperty, other than as set forth on Schedule 2.17(a). The personal property and
\nassets listed on Schedule 2.17(a) are not material to the Company’s business,
\nprospects or operations.<\/p>\n
(b) Schedule 2.17(b) sets forth all of the personal properties and
\nassets owned or leased by the Company as of the Closing having an individual
\nvalue greater than $1,000. The Company (i) has good and marketable title to all
\nsuch personal properties and assets owned by it, free and clear of all Liens,
\nexcept (A) statutory Liens securing payments not yet due, (B) such imperfections
\nor irregularities of title, claims, Liens, charges, security interests or
\nencumbrances which do not secure monetary obligations and which do not
\nmaterially affect the use or marketability of the personal properties or assets
\nsubject thereto or affected thereby or otherwise materially impair the Company’s
\nbusiness operations or use of such assets and (C) as set forth on Schedule
\n2.17(b), and (ii) is the lessee of all other assets and personal property not
\nowned by it reflected on Schedule 2.17(b). Each lease for such personal property
\nthat is material to the business of the Company is valid without default
\nthereunder by the lessee or, to the knowledge of the Company and Seller, lessor,
\nand the Company is in possession of the personal property purported to be leased
\nthereunder. The personal properties and assets of the Company are in good
\noperating condition and repair (ordinary wear and tear excepted), and constitute
\nall of the personal properties and assets which are necessary for the businesses
\nand operations of the Company as currently conducted. The parties recognize that
\nfour pieces of computer equipment, as referenced on Schedule<\/p>\n
21<\/p>\n
2.17(b), are subject to lease obligations owed by Seller to its lease line
\nprovider in the total amount equal to approximately $24,000. The actual total
\namount of such lease\/lease line obligations are referred to herein as “Lease
\nLine Obligations.”<\/p>\n
SECTION 2.18 Bank Accounts. Schedule 2.18 sets forth the name of each bank
\nin which the Company has an account or safe deposit box, vault, lock-box or
\nother arrangement, the account number and description of each account at each
\nbank and the names of all persons authorized to draw thereon or to have access
\nthereto; and the names of all persons, if any, holding tax or other powers of
\nattorney from the Company. Prior to Closing, all cash held in shared account
\nallocable to the Company has been transferred to separate Company accounts.<\/p>\n
SECTION 2.19 Brokers. No broker, finder or investment banker is entitled
\nto any brokerage, finder’s or other fee or commission in connection with the
\ntransactions contemplated by this Agreement based upon arrangements made by or
\non behalf of the Company.<\/p>\n
SECTION 2.20 Records. Except as set forth on Schedule 2.20, the books of
\naccount, minute books, stock certificate books and stock transfer ledgers of the
\nCompany are complete and correct in all material respects, and except as set
\nforth on Schedule 2.20 there have been no material transactions involving the
\nCompany of the type typically recorded in such records that have not been
\nrecorded.<\/p>\n
SECTION 2.21 No Illegal or Improper Transactions. Neither the Company,
\nSeller (for the benefit of the Company) nor any officer, director, employee,
\nagent or Affiliate of the Company or Seller (for the benefit of the Company) has
\noffered, paid or agreed to pay to any person or entity (including any
\ngovernmental official) or solicited, received or agreed to receive from any such
\nperson or entity, directly or indirectly, any money or anything of value for the
\npurpose or with the intent of (i) obtaining or maintaining business for the
\nbenefit of the Company, (ii) illegally or improperly facilitating the purchase
\nor sale of any product or service, or (iii) avoiding the imposition of any fine
\nor penalty, in any manner which is in violation of any applicable ordinance,
\nregulation or law.<\/p>\n
SECTION 2.22 Related Transactions. Except as disclosed in Schedule 2.22,
\nand for compensation and related arrangements with employees for services
\nrendered consistent with past practices, no current director, officer, employee
\nor shareholder of the Company or Seller, nor any immediate family member of any
\nof the foregoing, is presently or has been within the one (1) year period prior
\nto the date<\/p>\n
hereof (a) a party to any transaction with the Company (including, but not
\nlimited to, any contract, agreement or other arrangements providing for the
\nfurnishing of services by, or rental of real or personal property from, or
\notherwise requiring payments to, any such director, officer, employee or
\nshareholder of the Company or Seller) which have terms that are currently in
\neffect, or (b) is the direct or indirect owner of a one (1%) percent or more
\nequity interest in any corporation, firm, association or business organization
\nwhich is a present competitor, supplier or customer of the Company, nor does any
\nsuch person receive income from any source other than the Company which relates
\nto the business of, or should properly accrue to, the Company.<\/p>\n
SECTION 2.23 Disclosure. The representations and warranties by Seller and
\nthe Company contained in this Agreement or any Schedule hereto or in any
\nBusiness Agreement do not contain any untrue statement of a material fact or,
\ntaken together, omit to state a material fact necessary in order to make the
\nstatements contained herein or therein not misleading.<\/p>\n
SECTION 2.24 Environmental, Health and Safety Matters.<\/p>\n
(a) Company is in compliance with Environmental, Health and Safety
\nRequirements, except for such noncompliance as would not reasonably be expected
\nto have a Company Material Adverse Effect.<\/p>\n
(b) Company has not received any written notice, report or other
\ninformation regarding any actual or alleged material violation of Environmental,
\nHealth, and Safety Requirements, or any material liabilities or potential
\nmaterial liabilities (whether accrued, absolute, contingent, unliquidated or
\notherwise), including any investigatory, remedial or corrective obligations,
\nrelating to the Company or its property arising under Environmental, Health, and
\nSafety Requirements, the subject of which would reasonably be expected to have,
\neither singly or in the aggregate, a Company Material Adverse Effect.<\/p>\n
(c) This Section 2.24 contains the sole and exclusive
\nrepresentations and warranties of the Company and Seller with respect to any
\nenvironmental, health or safety matters, including without limitation, any
\narising under any Environmental, Health & Safety Requirements which regard the
\nCompany.<\/p>\n
SECTION 2.25 Year 2000 Compliance. All Information Technology of the
\nCompany has<\/p>\n
23<\/p>\n
continued to operate in the year 2000 as it operated in the year 1999 and
\nearlier in a manner that is Y2K Compliant without programming that requires the
\nuse of a date earlier than January 1, 2000.<\/p>\n
SECTION 2.26 Material Customers and Suppliers. Schedule 2.26 lists the 10
\nlargest customers (measured by revenue) and 10 largest suppliers (measured by
\ncost of goods or services) over the 12-month period ended December 31, 1999 of
\nthe Company. To the knowledge of the Company and Seller, except as scheduled, no
\nsuch customer or supplier has indicated to the Company or Seller that it intends
\nto terminate or modify its relationship with the Company and no customer or
\nsupplier has ceased or materially reduced its business with the Company during
\nsuch period, has notified the Company or Seller of any potential bankruptcy or
\ninsolvency or accounts for more than 10% of the annual revenues or cost of goods
\nor services, as the case may be, of the Company.<\/p>\n
SECTION 2.27 Receivables. The Company has provided to Purchaser a list
\n(“Receivables Transfer Report”) of Receivables of Company as of December 31,
\n1999, showing separately those Receivables that, as of such date, had been due
\nand outstanding (a) 30 days or less, (b) 31 to 60 days, (c) 61 to 90 days, (d)
\n91 to 120 days and (e) more than 120 days. Except as set forth on Schedule 2.27,
\nall Receivables reflected in the Company Financial Statements and the
\nReceivables Transfer Report arose from the sale of services to persons not
\naffiliated with Company in the ordinary course of Company’s business consistent
\nwith past practice and constitute valid, undisputed and collectible claims of
\nSeller not subject to valid claims of set-off or other defenses or counterclaims
\nother than normal cash discounts accrued in the ordinary course of Company’s
\nbusiness consistent with past practice.<\/p>\n
ARTICLE III
\n REPRESENTATIONS AND WARRANTIES OF PURCHASER<\/p>\n
Purchaser represents and warrants to each of the Company and Seller as
\nfollows:<\/p>\n
SECTION 3.01 Organization. Purchaser is a corporation duly organized,
\nvalidly existing and in good standing under the laws of the state of its
\nincorporation. Purchaser is qualified to do business in each state where the
\nnature of the business it conducts or the properties it owns, leases or operates
\nrequires it to so qualify, except where the failure to so qualify would not,
\nsingly or in the aggregate, be reasonably expected to have a material adverse
\neffect on the results of operations, financial condition, business, assets<\/p>\n
24<\/p>\n
or prospects of Purchaser or materially impair Purchaser’s ability to consummate
\nthe transactions contemplated by this Agreement (a “Purchaser Material Adverse
\nEffect”).<\/p>\n
SECTION 3.02 Authority; Corporate Action. Purchaser has the necessary
\npower and authority to enter into this Agreement, and the Business Agreements to
\nwhich it is a party, and to consummate the transactions contemplated hereby and
\nthereby. All action necessary to be taken by Purchaser to authorize the
\nexecution, delivery and performance of this Agreement and each of the Business
\nAgreements to which it is a party and all other instruments delivered by
\nPurchaser in connection with the transactions contemplated hereby or thereby has
\nbeen duly and validly taken and this Agreement and each of the Business
\nAgreements to which it is a party, have been duly executed and delivered by the
\nPurchaser. Subject to the terms and conditions hereof, this Agreement and the
\nBusiness Agreements to which it is a party, constitute the valid, binding and
\nenforceable obligations of the Purchaser, enforceable in accordance with their
\nterms, except as enforceability may be limited by applicable bankruptcy,
\ninsolvency, reorganization, moratorium, fraudulent transfer or similar laws of
\ngeneral application now or hereafter in effect affecting the rights and remedies
\nof creditors and by general principles of equity (regardless of whether
\nenforcement is sought in a proceeding at law or in equity).<\/p>\n
SECTION 3.03 No Conflict; Required Filings and Consents.<\/p>\n
(a) The execution and delivery by Purchaser of this Agreement, the
\nEscrow Agreement and the Business Agreements to which it is a party and the
\nperformance by Purchaser of its obligations under this Agreement, the Escrow
\nAgreement and the Business Agreements to which it is a party does not (i)
\nconflict with or violate the Certificate of Incorporation or By-laws of
\nPurchaser, (ii) conflict with or violate any law, statute, ordinance, rule,
\nregulation, order, judgment or decree applicable to Purchaser or by which its
\nproperty or assets are bound or subject, or (iii) result in any breach of or
\nconstitute a default (or an event which with notice or lapse of time or both
\nwould become a default) under, or give to others any rights of termination,
\namendment, acceleration or cancellation of, or result in the creation of a Lien
\non any of the properties or assets of Purchaser pursuant to, any note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit, franchise or
\nother instrument or obligation to which Purchaser is a party or by which
\nPurchaser or any of its properties or assets is bound or affected, except, in
\nthe case of clauses (ii) and (iii), above, for any such conflicts, violations,
\nbreaches, defaults or other alterations or occurrences that would not reasonably
\nbe expected to have a Purchaser Material Adverse Effect.<\/p>\n
25<\/p>\n
(b) The execution and delivery by Purchaser of this Agreement, the
\nEscrow Agreement and the Business Agreements to which it is a party, and the
\nperformance of this Agreement, the Escrow Agreement and the Business Agreements
\nto which it is a party does not, require any consent, approval, authorization or
\npermit of, or filing with or notification to, any governmental entity, except
\n(i) for compliance with the applicable requirements, if any, of the Securities
\nAct, Exchange Act, state securities laws, or state takeover laws or Nasdaq, and
\n(ii) where failure to obtain such consents, approvals, authorizations or
\npermits, or to make such filings or notifications, would not reasonably be
\nexpected to have a Purchaser Material Adverse Effect.<\/p>\n
SECTION 3.04 Investment Representations. Purchaser represents that (a) all
\nof the Shares to be acquired by it from Seller pursuant to this Agreement will
\nbe acquired for its account and not with a view towards distribution thereof;
\n(b) it understands that it must bear the economic risk of the investment in the
\nCompany, which cannot be sold by it unless it is registered under the Securities
\nAct, or an exemption therefrom is available thereunder; and (c) it has had both
\nthe opportunity to ask questions and receive answers from the officers and
\ndirectors of the Company and all persons acting on the Company’s behalf
\nconcerning the business and operations of the Company and to obtain any
\nadditional information to the extent the Company possesses or may possess such
\ninformation or can acquire it without unreasonable effort or expense necessary
\nto verify the accuracy of such information. Purchaser acknowledges that (d) it
\nis an “accredited investor” as such term is defined in Regulation D promulgated
\nunder the Securities Act; and (e) it understands that the certificates
\nrepresenting the Shares shall bear legends to the effect that such Shares may
\nnot be transferred except upon compliance with (i) the registration requirements
\nof the Securities Act (or an exemption therefrom) and (ii) the provisions of
\nthis Agreement.<\/p>\n
SECTION 3.05 Brokers. No broker, finder or investment banker is entitled
\nto any brokerage, finder’s or other fee or commission in connection with the
\ntransaction contemplated by this Agreement based upon arrangements made by or on
\nbehalf of the Purchaser.<\/p>\n
SECTION 3.06 Disclosure. The representations and warranties by Purchaser
\ncontained in this Agreement or any Schedule hereto or in any Business Agreement
\ndo not contain any untrue statement of a material fact or, taken together, omit
\nto state a material fact necessary in order to make the statements contained
\nherein or therein not misleading.<\/p>\n
26<\/p>\n
ARTICLE IIIA
\n REPRESENTATIONS AND WARRANTIES OF GUARANTOR<\/p>\n
Win Star New Media Company, Inc. (“Guarantor”) represents and warrants to
\neach of the Company and Seller as follows:<\/p>\n
SECTION 3A.1 Organization. Guarantor is a corporation duly organized,
\nvalidly existing and in good standing under the laws of the state of its
\nincorporation. Guarantor is qualified to do business in each state where the
\nnature of the business it conducts or the properties it owns, leases or operates
\nrequires it to so qualify, except where the failure to so qualify would not,
\nsingly or in the aggregate, be reasonably expected to have a material adverse
\neffect on the results of operations, financial condition, business, assets or
\nprospects of Guarantor or materially impair Guarantor’s ability to guaranty the
\npayment by Purchaser of the Purchase Price (a “Guarantor Material Adverse
\nEffect”).<\/p>\n
SECTION 3A.2 Authority; Corporate Action. Guarantor has the necessary
\npower and authority to guaranty the payment by Purchaser of the Purchase Price
\nas set forth at the foot of this Agreement (the “Guaranty”). All action
\nnecessary to be taken by Guarantor to authorize the execution, delivery and
\nperformance of the Guaranty has been duly and validly taken and the Guaranty has
\nbeen duly executed and delivered by the Guarantor. The Guaranty constitutes the
\nvalid, binding and enforceable obligation of the Guarantor, enforceable in
\naccordance with its terms, except as enforceability may be limited by applicable
\nbankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
\nsimilar laws of general application now or hereafter in effect affecting the
\nrights and remedies of creditors and by general principles of equity (regardless
\nof whether enforcement is sought in a proceeding at law or in equity).<\/p>\n
SECTION 3A.3 No Conflict; Required Filings and Consents.<\/p>\n
(a) The execution and delivery by Guarantor of the Guaranty and the
\nperformance by Guarantor of its obligations under the Guaranty do not (i)
\nconflict with or violate the Certificate of Incorporation or By-laws of
\nGuarantor, (ii) conflict with or violate any law, statute, ordinance, rule,
\nregulation, order, judgment or decree applicable to Guarantor or by which its
\nproperty or assets are bound or subject, or (iii) result in any breach of or
\nconstitute a default (or an event which with notice or lapse of time or both
\nwould become a default) under, or give to others any rights of termination,
\namendment, acceleration or cancellation of, or result in the creation of a Lien
\non any of the properties or assets of<\/p>\n
27<\/p>\n
Guarantor pursuant to, any note, bond, mortgage, indenture, contract, agreement,
\nlease, license, permit, franchise or other instrument or obligation to which
\nGuarantor is a party or by which Guarantor or any of its properties or assets is
\nbound or affected, except, in the case of clauses (ii) and (iii), above, for any
\nsuch conflicts, violations, breaches, defaults or other alterations or
\noccurrences that would not reasonably be expected to have a Guarantor Material
\nAdverse Effect.<\/p>\n
(b) The execution and delivery by Guarantor of the Guaranty and the
\nperformance of the Guaranty by the Guarantor does not, require any consent,
\napproval, authorization or permit of, or filing with or notification to, any
\ngovernmental entity, except (i) for compliance with the applicable requirements,
\nif any, of the Securities Act, Exchange Act, state securities laws, or state
\ntakeover laws or Nasdaq, and (ii) where failure to obtain such consents,
\napprovals, authorizations or permits, or to make such filings or notifications,
\nwould not reasonably be expected to have a Guarantor Material Adverse Effect.<\/p>\n
SECTION 3A.4 Financial Statements. Attached as Schedule 3A.4 are the
\nunaudited consolidated financial statements of the Guarantor and its
\nsubsidiaries for the year ended December 31, 1999 consisting of a balance sheet,
\nstatement of operations and statement of stockholders’ equity (collectively, the
\n“Guarantor Financial Statements”). The Guarantor Financial Statements, including
\nall related notes and schedules thereto, fairly present in all material respects
\nthe financial position and results of operations of the Guarantor and its
\nsubsidiaries as at the respective dates and the respective periods indicated
\ntherein in accordance with generally accepted accounting principles applied on a
\nconsistent basis throughout the periods involved and are consistent with the
\nbooks and records of the Guarantor and its subsidiaries.<\/p>\n
SECTION 3A.5 Disclosure. The representations and warranties by Guarantor
\ncontained in this Agreement do not contain any untrue statement of a material
\nfact or, taken together, omit to state a material fact necessary in order to
\nmake the statements contained herein or therein not misleading.<\/p>\n
ARTICLE IV
\n NATURE AND SURVIVAL OF REPRESENTATIONS,
\n WARRANTIES AND COVENANTS OF THE PARTIES<\/p>\n
SECTION 4.01 Survival. Each representation and warranty made by any Party
\nunder this Agreement shall survive the execution of this Agreement, and shall
\ncontinue in full force and effect until such time as the obligation to indemnify
\nwith respect to such representation, warranty, covenant or<\/p>\n
28<\/p>\n
agreement under Section 7.01, 7.02 or 7.03, as the case may be, so terminates.
\nThe covenants and agreements contained in this Agreement shall survive the
\nexecution of this Agreement and shall continue until all obligations with
\nrespect thereto shall have been performed or satisfied or shall have been
\nterminated in accordance with their terms.<\/p>\n
SECTION 4.02 Nonwaiver of Rights. The representations, warranties,
\ncovenants and agreements made by any Party under this Agreement shall not be
\naffected or deemed waived by reason of the fact that the other Party or its
\nrepresentatives knew or should have known that any such representations,
\nwarranties, covenants or agreement is or might be inaccurate in any respect. Any
\nfurnishing of information by any Party to another pursuant to, or otherwise in
\nconnection with, this Agreement, including, without limitation, any information
\ncontained in any document, contract, book or record of the delivering Party to
\nwhich another Party shall have access or any information obtained by, or made
\navailable to, any Party as a result of any investigation made by or on behalf of
\nsuch Party prior to or after the date of this Agreement, shall not affect such
\nParty’s right to rely on any representation, warranty, covenant or agreement
\nmade or deemed made by another Party in this Agreement and shall not be deemed a
\nwaiver thereof.<\/p>\n
ARTICLE V
\n COVENANTS<\/p>\n
SECTION 5.01 Covenants of Seller. Seller agrees to the following
\ncovenants:<\/p>\n
(a) Confidentiality. Seller shall hold and shall cause its
\nRepresentatives to hold in strict confidence, unless compelled to disclose by
\njudicial or administrative process or by other requirements of law, all terms of
\nthis Agreement and related agreements and all documents and information
\nconcerning Purchaser or Guarantor furnished to them by Purchaser or its
\nRepresentatives in connection with the transactions contemplated by this
\nAgreement (except to the extent that such information can be shown to have been
\n(i) previously known by the Company or Seller, (ii) in the public domain through
\nno fault of the Company or Seller or (iii) lawfully acquired by Seller from
\nanother source, which source shall not be a person under confidentiality
\nobligation to Purchaser or Guarantor and, except as otherwise required by
\napplicable law, rule or regulation, Seller shall not release or disclose such
\ninformation to any other person, except its auditors, actuaries, attorneys,
\nfinancial advisors, bankers and other consultants and advisors who need to know
\nsame in connection with this Agreement and the transactions contemplated<\/p>\n
29<\/p>\n
hereby.<\/p>\n
(b) Non-use of Name. From and after the date hereof, Seller shall
\nnot establish or otherwise be associated with, as an owner, partner,
\nshareholder, employee or otherwise, any firm which utilizes the name
\n“Individual.com” or the name “NewsPage.com” or any variant thereof as part of
\nits business name other than in connection with their affiliation with the
\nCompany after the date hereof or grant to any person or entity the right to use
\nthe name “Individual.com” or the name “NewsPage.com” or any variant thereof or
\ngrant (or attempt to grant) any material rights to any Intellectual Property
\nowned or used in the business of the Company to any third party.<\/p>\n
(c) Further Assurances. Seller will from time to time after the date
\nhereof, at Purchaser’s reasonable request, execute, acknowledge and deliver to
\nPurchaser such other instruments of conveyance and transfer, and will deliver
\npasswords and codes and will take such other actions and execute and deliver
\nsuch other documents, certificates and further assurances as Purchaser may
\nreasonably request in order to vest more effectively in Purchaser, or to put
\nPurchaser more fully in possession of, any of the assets of the Company, or to
\nenable Purchaser to complete, perform or discharge any of the liabilities and
\nobligations of the Company.<\/p>\n
(d) Non-Competition. Seller agrees that it will not during the
\nperiod ending eighteen (18) months from the First Closing Date (the “Restricted
\nPeriod”), within the United States, directly or through a subsidiary or other
\nAffiliate, (i) engage in the business of providing free public access to news
\nover the Internet; (ii) hire (the restriction herein to apply only during the
\nsix-month period after the First Closing Date and to exclude employees of the
\nCompany who do not continue as employees of the Company after the First Closing
\nDate) or solicit for employment any employee of Purchaser or any Affiliate
\nthereof, including the Company; or (iii) interfere with, disrupt or attempt to
\ndisrupt the relationship between Purchaser or any Affiliate thereof, including
\nthe Company, and any of its lessors, lessees, licensors, licensees, information
\nproviders, vendors, customers or suppliers. Seller acknowledges that a remedy at
\nlaw for any breach or attempted breach of this Section 5.01(d) will be
\ninadequate and further agrees that any breach of this Section 5.01(d) will
\nresult in irreparable harm to the business of the Company, and covenants and
\nagrees not to oppose any demand for specific performance and injunctive and
\nother equitable relief in case of any such breach or attempted breach. Whenever
\npossible, each provision of this Section 5.01(d) shall be interpreted in such
\nmanner as to be effective and valid under applicable law but if any provision of
\nthis Section 5.01(d) shall be prohibited by or invalid under applicable law,
\nsuch provision shall<\/p>\n
30<\/p>\n
be ineffective to the extent of such prohibition or invalidity, without
\ninvalidating the remainder of such provision or the remaining provisions of this
\nSection 5.01(d). If any provision of this Section 5.01(d) shall, for any reason,
\nbe judged by any court of competent jurisdiction to be invalid or unenforceable,
\nsuch judgment shall not affect, impair or invalidate the remainder of this
\nSection 5.01(d) but shall be confined in its operation to the provision of this
\nSection 5.01(d) directly involved in the controversy in which such judgment
\nshall have been rendered. In the event that the provisions of this Section
\n5.01(d) should ever be deemed to exceed the time or geographic limitations
\npermitted by the applicable laws, then such provision shall be reformed to the
\nmaximum time or geographic limitations permitted by applicable law.<\/p>\n
(e) Employment. Purchaser will offer all employees of the Company
\nthe opportunity to continue employment with the Company on terms consistent with
\nPurchaser’s current employee policies. Such employees will be eligible to
\nreceive benefits afforded other similarly situated employees of Purchaser,
\nsubject to applicable waiting periods and other conditions; provided that any
\nseverance benefits afforded to employees of the Company who were employed prior
\nto the First Closing Date will not, during the six-month period after the First
\nClosing Date, be less favorable than the severance benefits afforded by the
\nSeller to its employees prior to the First Closing Date.<\/p>\n
(f) Severance Liabilities. To the extent not paid at or before the
\nClosing, Seller shall pay and assume all severance costs, and other related
\ncosts, if any, relating to any current and former employees of the Company who
\ndo not sign the waivers described in Section 6.03(a).<\/p>\n
(g) Cash Flow Statements. Seller shall deliver a statement of cash
\nflows for the Company for the year ended December 31, 1999 to Purchaser not
\nlater than March 31, 2000. Such cash flow statement will be prepared in
\naccordance with generally accepted accounting principles applied on a consistent
\nbasis and will be consistent with the books and records of the Company.<\/p>\n
(h) Audited Financial Statements. Upon reasonable notice to Seller
\nby Purchaser based upon Purchaser’s sole determination that audited year-end
\nfinancial statements are required by the Securities and Exchange Commission,
\nSeller shall present to Purchaser, financials statements for the Company’s years
\nended December 31, 1999 and\/or 1998, audited by an independent public accountant
\nmutually agreed upon by the Parties, and shall otherwise reasonably cooperate
\nwith Purchaser in connection therewith. In this regard, Purchaser agrees to pay
\nthe first $10,000 of such auditor fees with the balance to be split equally
\nbetween Purchaser and Seller.<\/p>\n
31<\/p>\n
(i) Assistance. For a period of 90 days from the date hereof, as
\nreasonably requested by Purchaser, Seller will make available to Purchaser and
\nits Representatives, at Seller’s sole cost, information and services relating to
\nthe Company or the transactions contemplated hereby, including financial
\nreports, human resources materials and information relating to technical
\noperations concerning the Company.<\/p>\n
(j) Media Metrix. Seller will cooperate with Purchaser in order to
\ncause the Company’s Media Metrix audience levels user statistics as of January
\n1, 2000, to be credited to Purchaser to the extent permitted by Media Metrix
\nrules.<\/p>\n
(k) Remaining Shares. Seller agrees that it shall not sell,
\nhypothecate or otherwise transfer the Remaining Shares or any portion thereof or
\ninterest therein to any party, other than Purchaser or its designee, or agree to
\ndo any of the foregoing. The certificates representing the Remaining Shares
\nshall bear a legend mutually satisfactory to the Parties to the effect that the
\nRemaining Shares are subject to the terms and conditions of this Agreement and
\nshall be held by counsel to Purchaser until the Second Closing, subject to
\nrelease to Seller on written request to such counsel.<\/p>\n
(l) Consents. Seller will continue to use commercially reasonable
\nefforts in consultation with Purchaser to obtain all required consents from
\nSeller’s content providers or secure substitute content acceptable to Purchaser.<\/p>\n
SECTION 5.02 Mutual Covenants.<\/p>\n
(a) Further Assurances. Each Party will, from time to time after the
\nClosing, at the reasonable request of the other Party, execute, acknowledge and
\ndeliver to the other Party such other instruments of conveyance and transfer and
\nwill take such other actions and execute and deliver such other documents,
\ncertificates and further assurances as the Other Party may reasonably request to
\nconsummate and carry out the transactions contemplated by this Agreement.<\/p>\n
(b) Publicity. No Party shall make any public announcements in
\nrespect of this Agreement or the transactions contemplated herein without prior
\nconsultation and approval by the other Party as to the form and content thereof,
\nwhich approval shall not be unreasonably withheld. Notwithstanding the
\nforegoing, Purchaser may make any disclosure which its counsel advises is
\nrequired by<\/p>\n
32<\/p>\n
applicable law or regulation, in which case Purchaser shall use commercially
\nreasonably efforts to give Seller and the Company reasonable advance notice.<\/p>\n
(c) Non-Competition. During the six-month period after the First
\nClosing Date, Purchaser agrees that it will not hire any employees of Seller.
\nDuring the nine-month period after the First Closing Date, Purchaser agrees that
\nit will not solicit for employment any employees of Seller.<\/p>\n
SECTION 5.03 Tax Filings.<\/p>\n
(a) Seller shall assist Purchaser and its Affiliates in the
\npreparation of or, if so requested by Purchaser, cause to be prepared and file
\nor cause to be filed on a timely basis all tax returns (including information
\nreturns) for the Company, at Seller’s sole cost, including the payment of all
\ntaxes due thereon, for all periods ending on or prior to the First Closing Date
\n(except with respect to any transaction not in the ordinary course of business
\noccurring on the First Closing Date after Purchaser’s purchase of the Company’s
\nstock, it being understood that the deemed sale of Company’s assets pursuant to
\nthe Section 338(h)(10) Election described in the next paragraph (b) shall not be
\ntreated as a transaction described in this parenthetical exception). Purchaser
\nshall provide or cause the Company to provide all Tax assistance and information
\nreasonably requested by Seller.<\/p>\n
(b) Seller, Purchaser and the Company agree to take all necessary
\nactions to make a timely and valid election under Section 338(h)(l0) of the Code
\n(and any corresponding elections under state, local, or foreign Tax law, where
\napplicable) (collectively, a “Section 338(h)(10) Election”) to treat the
\npurchase and sale of the stock of the Company hereunder as a deemed sale of the
\nassets of the Company for Tax purposes. Seller will pay any Tax attributable to
\nthe Company’s deemed asset sale resulting from the making of the Section
\n338(h)(l0) Election. Seller, Purchaser and the Company agree that the Purchase
\nPrice and the liabilities of the Company (plus other relevant items) will be
\nallocated to the assets of the Company for all relevant purposes (including Tax
\nand financial accounting purposes) in a manner consistent with the fair market
\nvalues set forth in the Allocation Schedule attached hereto. Seller, Purchaser
\nand the Company will file all Tax returns (including amended returns and claims
\nfor refund) and information repots in a manner consistent with such allocation.<\/p>\n
(c) Purchaser agrees to indemnify Seller for any Tax owed by Seller
\n(including Tax owed by Seller due to any such indemnification payment) resulting
\nfrom any transaction not in the ordinary<\/p>\n
33<\/p>\n
course of business occurring on the First Closing Date after Purchaser’s
\npurchase of the Initial Shares, it being understood that the deemed sale of
\nCompany’s assets pursuant to the Section 338(h)(l0) Election shall not be
\ntreated as a transaction described in this paragraph (c).<\/p>\n
ARTICLE VI
\n OTHER CLOSING MATTERS<\/p>\n
SECTION 6.01 Other Documents to be Furnished by Purchaser to Seller.
\nConcurrently with the execution of this Agreement, Purchaser has delivered to
\nSeller:<\/p>\n
(a) Legal Opinion. An opinion of even date hereof from Graubard
\nMollen & Miller, counsel to Purchaser, addressed to Seller, opining in all
\nmaterial respects to the matters set forth on Exhibit C annexed hereto.<\/p>\n
(b) Secretary’s Certificate. A certificate signed by the Secretary
\nof Purchaser, dated the date hereof, certifying (i) that the attached
\nCertificate of Incorporation and By-laws of Purchaser are true and complete,
\nhave not been modified and are full force and effect and (ii) as to the
\nincumbency of the officers of the Purchaser executing this Agreement, and the
\nBusiness Agreements to which it is a party.<\/p>\n
SECTION 6.02 Other Documents to be Furnished by Seller and Company to
\nPurchaser. Concurrently with the execution of this Agreement, Seller and\/or
\nCompany has delivered to Purchaser:<\/p>\n
(a) Legal Opinion. An opinion of even date hereof from Testa,
\nHurwitz & Thibeault, LLP, counsel to Seller, addressed to Purchaser, opining in
\nall material respects to the matters set forth on Exhibit D hereto;<\/p>\n
(b) Stock Certificate. A stock certificate representing the Initial
\nShares registered in the name of Purchaser and evidence of cancellation of all
\ncertificates representing the Initial Shares registered in the name of Seller.<\/p>\n
34<\/p>\n
(c) Secretary’s Certificates.<\/p>\n
(i) a certificate signed by the Secretary of the Company,
\n dated the date hereof, certifying (A) that the attached Certificate
\n of Incorporation and By-laws of the Company are true and complete,
\n have not been modified and are in full force and effect and (B) as
\n to the incumbency of the officers of the Company executing this
\n Agreement and the Business Agreements.<\/p>\n
(ii) a certificate signed by the Secretary of Seller, dated
\n the date hereof, certifying (A) that the Board of Director and
\n Shareholder resolutions approving and otherwise relating to the
\n transactions contemplated hereby and in the Business Agreements are
\n in full force and effect and have not been modified and (B) as to
\n the incumbency of the officers of Seller executing this Agreement
\n and the Business Agreements;<\/p>\n
(d) Consents. Copies of all private third party consents to the
\ntransactions contemplated hereby which are required as a result of the
\ntransactions contemplated hereby; and<\/p>\n
(e) Indebtedness. Documentation evidencing that all indebtedness,
\nintercompany liabilities and other liabilities of the Company not incurred in
\nthe ordinary course of business or not reflected on the Company’s Financial
\nStatements have been canceled at or prior to the First Closing Date without
\ntaxable income to the Company.<\/p>\n
(f) Director Resignations. Seller shall have provided to the Company
\nletters from all of their directors resigning as directors of the Company as of
\nthe First Closing Date.<\/p>\n
SECTION 6.03 Employee Matters.<\/p>\n
(a) Waiver by Employees of Company. Seller shall deliver to
\nPurchaser waivers executed by each employee of the Company in the form annexed
\nhereto as Exhibit E.<\/p>\n
(b) Continued Employment. Each of the employees listed on Schedule
\n6.03(b), including senior management employees, have agreed in writing to
\ncontinue as employees at will with the Company or an Affiliate thereof at
\nPurchaser’s sole discretion, on terms previously approved by Purchaser,<\/p>\n
35<\/p>\n
including customary confidentiality and work-for-hire provisions.<\/p>\n
(c) Termination of the Company Options, Warrants and Convertible
\nSecurities. All outstanding options, warrants or other securities exercisable or
\nexchangeable for or convertible into options of the Company shall have been
\ncanceled at or prior to the Closing without expense or future obligation to the
\nCompany. Seller shall provide evidence to Purchaser of the termination of all
\nsuch securities and rights held by any person other than an employee who has
\nsigned and delivered a release in the form of Exhibit E.<\/p>\n
(d) Company Compensation. Subject to Section 1.03 with respect to
\nthe period beginning February 15, 2000, Seller shall have paid all compensation
\ndue and owing to the Company’s employees and former employees for any and all
\nperiods of service prior to or ending on the First Closing Date, including
\nsalary, bonuses (performance or otherwise) incentives, severance benefits,
\nchange of control packages, unused or accrued vacation time and any other earned
\nor accrued compensation or benefits.<\/p>\n
SECTION 6.04 Facilities Services Agreement; License Agreement and Limited
\nTechnology License. Concurrently with the execution of this Agreement:<\/p>\n
(a) Facilities Services Agreement. Purchaser and Seller have entered
\ninto a Facilities Services Agreement in the form of Exhibit F.<\/p>\n
(b) License Agreement. The Company and Seller have entered into a
\nLicense Agreement in the form of Exhibit G.<\/p>\n
(c) Limited Technology License. The Company and Seller have entered
\ninto a perpetual nonexclusive Limited Technology License in the form of Exhibit
\nH.<\/p>\n
The Facilities Services Agreement, License Agreement and Limited
\nTechnology License are collectively referred to herein as the “Business
\nAgreements.”<\/p>\n
36<\/p>\n
ARTICLE VII
\n INDEMNIFICATION<\/p>\n
SECTION 7.01 Indemnification by Seller. Seller shall indemnify and hold
\nharmless Purchaser from and against, and shall reimburse Purchaser for, any
\nDamages which may be sustained, suffered or incurred by Purchaser and\/or
\nCompany, whether as a result of any Third Party Claim or otherwise, and which
\narise or result from or in connection with or are attributable to the breach of
\nany of the Company’s or Seller’s covenants, representations, warranties,
\nagreements, obligations or undertakings contained in this Agreement. Purchaser
\nmay offset any indemnification amount payable to it under this Section 7.01
\nagainst the Purchase Price which it is otherwise required to pay to Seller
\nand\/or any indemnification amount payable to Seller pursuant to Section 7.02.
\nClaims made for indemnity hereunder with respect to breaches of representations
\nand warranties must be made on or prior to February 28, 2001, except that with
\nrespect to claims arising as a result of a breach of the representations and
\nwarranties in (a) Sections 2.02 and 2.04, such claims may be made without
\nlimitation as to time except as provided by law, and (b) Section 2.10, such
\nclaims must be made prior to six months after the expiration of the statute of
\nlimitations for each respective Tax. Any claim for indemnity asserted within the
\nrelevant period shall survive until resolved.<\/p>\n
SECTION 7.02 Indemnification by Purchaser. Purchaser shall indemnify and
\nhold harmless Seller from and against, and shall reimburse Seller for, any
\nDamages which may be sustained, suffered or incurred by Seller, whether as a
\nresult of Third Party Claims or otherwise, and which arise or result from or in
\nconnection with or are attributable to the breach by Purchaser or Guarantor of
\nany of their respective covenants, representations, warranties, agreements,
\nobligations or undertakings contained in this Agreement. Seller may offset any
\nindemnification amount payable to it under this Section 7.02 against any
\nindemnification amount payable to Purchaser pursuant to Section 7.01. Claims
\nmade for indemnity hereunder with respect to breaches of representations and
\nwarranties must be made on or prior to February 28, 2001, except that with
\nrespect to Claims arising as a result of a breach of the representations and
\nwarranties in Section 3.02, such claims may be made without limitation as to
\ntime except as provided by law, and with respect to claims for indemnification
\narising under Section 5.03, such claims must be made prior to six months after
\nthe expiration of the applicable Tax statute of limitations. Any Claim for
\nindemnity asserted within the relevant period shall survive until resolved.<\/p>\n
37<\/p>\n
SECTION 7.03 Procedure.<\/p>\n
(a) Third Party Claims. In the event that a party entitled to
\nindemnification hereunder (an “Indemnified Party”) becomes aware of a Third
\nParty Claim for which a party (“Indemnifying Party”) would be liable to an
\nIndemnified Party hereunder, the Indemnified Party shall give reasonably prompt
\nnotice in writing to the Indemnifying Party of such Claim, identifying the basis
\nfor such Claim or demand, and the amount or the estimated amount thereof to the
\nextent then determinable (which estimate shall not be conclusive of the final
\namount of such Claim whether or not the Claim is a Third Party Claim (“Claim
\nNotice”); provided, however, that any delay in giving such Claim Notice will not
\nbe deemed a waiver of nor result in any discontinuation of any rights of the
\nIndemnified Party except to the extent the rights of the Indemnifying Party are
\nactually materially prejudiced by such delay. The Indemnifying Party may, and
\nupon request of the Indemnified Party shall, retain counsel (who shall be
\nreasonably acceptable to the Indemnified Party) to represent the Indemnified
\nParty and shall pay the reasonable fees and disbursements of such counsel with
\nregard thereto; provided, however, that any Indemnified Party is hereby
\nauthorized (upon giving ten (10) days prior written notice to the Indemnifying
\nParty), prior to the date on which it receives written notice from the
\nIndemnifying Party designating such counsel, to retain counsel, whose fees and
\nexpenses shall be at the expense of the Indemnifying Party, to file any motion,
\nanswer or other pleading and take such other action which it reasonably shall
\ndeem necessary to protect its interests or those of the Indemnifying Party until
\nthe date on which the Indemnified Party receives such notice from the
\nIndemnifying Party. After the Indemnifying Party shall retain such counsel, the
\nIndemnified Party shall have the right to retain its own counsel, but the fees
\nand expenses of such counsel shall be at the expense of such Indemnified Party
\nunless (x) the Indemnifying Party and the Indemnified Party shall have mutually
\nagreed to the retention of such counsel or (y) the named parties of any such
\nproceeding (including any impleaded parties) include both the Indemnifying Party
\nand the Indemnified Party and representation of both parties by the same counsel
\nwould be inappropriate due to actual or potential differing interests between
\nthem. The Indemnifying Party shall not, in connection with any proceedings or
\nrelated proceedings in the same jurisdiction, be liable for the fees and
\nexpenses of more than one such firm for the Indemnified Party (except to the
\nextent the Indemnified Party retained counsel to protect its (or the
\nIndemnifying Party’s) rights prior to the selection of counsel by the
\nIndemnifying Party). If requested by the Indemnifying Party, the Indemnified
\nParty agrees to cooperate with the Indemnifying Party and its counsel in
\ncontesting any Third Party Claim which the Indemnifying Party defends. A Third
\nParty Claim may not be settled by the Indemnifying Party without the prior
\nwritten consent of the Indemnified Party (which consent will not be unreasonably
\nwithheld) unless, as part of such settlement, the Indemnified Party shall<\/p>\n
38<\/p>\n
receive a full and unconditional release; provided, however, that the
\nIndemnifying Party shall not settle any claim without the prior written consent
\nof the Indemnified Party (which consent shall not be unreasonably withheld) if
\nsuch Claim is not exclusively for monetary Damages.<\/p>\n
(b) Direct Claims. In the event any Indemnified Party shall have a
\nDirect Claim against any Indemnifying Party hereunder, the Indemnified Party
\nshall send a Claim Notice with respect to such Claim to the Indemnifying Party.<\/p>\n
(c) Books and Records. After delivery of a Claim Notice or other
\nnotification of a claim, so long as any right to indemnification exists pursuant
\nto this Article VII, the affected Parties each agree to retain all books and
\nrecords related to such Claim. In each instance, the Indemnified Party shall
\nhave the right to be kept fully informed by the Indemnifying Party and its legal
\ncounsel with respect to any legal proceedings. Any information or documents made
\navailable to any Party hereunder and designated as confidential by the Party
\nproviding such information or documents and which is not otherwise generally
\navailable to the public and not already within the knowledge of the Party to
\nwhom the information is provided (unless otherwise covered by the
\nconfidentiality provisions of any other agreement among the Parties hereto, or
\nany of them), and except as may be required by applicable law, shall not be
\ndisclosed to any third party (except for the representatives of the Party being
\nprovided with the information, in which event the Party being provided with the
\ninformation shall request its representatives not to disclose any such
\ninformation which it otherwise required hereunder to be kept confidential).<\/p>\n
SECTION 7.04 Offset Rights. Notwithstanding anything to the contrary in
\nthis Agreement, to the extent Purchaser has a claim or alleges Damages
\n(including Damages which may arise under the License Agreement) against Seller
\nprior to February 28, 2001, Purchaser may offset the amount of such claim or
\nDamages, to the maximum extent of $1,000,000, against the Final Payment. This
\nshall not preclude Purchaser from pursuing reimbursement or indemnification with
\nrespect to the remaining amount of such claim or Damages or any other claim or
\nDamages. In addition, Purchaser may offset from Purchase Price payments the
\ngreater of (i) amount of Lease Line Obligation payments made by Purchaser and
\n(ii) the replacement value of computer equipment described in the last sentence
\nof Section 2.17(b).<\/p>\n
SECTION 7.05 Limitations.<\/p>\n
(a) Seller shall not be required to indemnify Purchaser or the
\nCompany pursuant to<\/p>\n
39<\/p>\n
this Article VII unless the aggregate of all amounts for which indemnity would
\notherwise be due against it exceeds $50,000, in which event such indemnification
\nshall apply only to Damages suffered by Seller and the Company in excess of the
\nfirst $50,000 thereof; provided that Third Party Long-Term Liabilities shall not
\nbe subject to such limitation and shall not be included as Damages for purposes
\nof calculating such limitation.<\/p>\n
(b) Notwithstanding anything to the contrary in this Article VII,
\nthe indemnification obligations of Seller under Section 7.01 shall be limited to
\n50% of the Purchase Price, except that Third Party Long-Term Liabilities shall
\nnot be subject to any limitation and shall not be included as Damages for
\npurposes of calculating such limitation.<\/p>\n
ARTICLE VIII
\n DEFINITIONS<\/p>\n
SECTION 8.01 Certain Defined Terms. As used in this Agreement, the
\nfollowing terms shall have the following meanings:<\/p>\n
“Affiliate” means, with respect to a person or entity, any person or
\nentity controlled by, under common control with or controlling such person or
\nentity.<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended.<\/p>\n
“Damages” means the dollar amount of any loss, damage, cost, expense or
\nliability, including, without limitation, reasonable attorneys’ fees and
\ndisbursements incurred by an Indemnified Party in any action or proceeding
\nbetween the Indemnified Party and the Indemnifying Party or between the
\nIndemnified Party and a third party, which is determined (as provided in Article
\nVII) to have been sustained, suffered or incurred by a Party and to have arisen
\nfrom or in connection with an event or state of facts which is subject to
\nindemnification under this Agreement; the amount of Damages shall be the amount
\nfinally determined by a court of competent jurisdiction or appropriate
\ngovernmental administrative agency (after the exhaustion of all appeals) or the
\namount agreed to upon settlement in accordance with the terms of this Agreement.<\/p>\n
“Direct Claim” means a claim by Party against another Party.<\/p>\n
40<\/p>\n
“Environmental, Health, and Safety Requirements” means all Federal, state,
\nlocal and foreign statutes, regulations, and ordinances concerning public health
\nand safety, worker health and safety, and pollution or protection of the
\nenvironment, including without limitation all those relating to the presence,
\nuse, production, generation, handling, transportation, treatment, storage,
\ndisposal, distribution, labeling, testing, processing, discharge, release,
\nthreatened release, control, or cleanup of any hazardous materials, substances
\nor wastes, as such requirements are enacted and in effect on or prior to the
\ndate hereof.<\/p>\n
“Information Technology” means electronic data, communications and other
\nsystems utilizing computer hardware, computer software, computer firmware and
\nother similar or related items including source codes, operating codes,
\nprograms, utilities and other software.<\/p>\n
“Lien” means any lien, claim, charge, option, security interest,
\nrestriction or encumbrance.<\/p>\n
“Party” means Purchaser, on the one hand, and Seller and\/or the Company,
\non the other hand (collectively, the “Parties”).<\/p>\n
“Representatives” of a Party means such Party’s employees, accountants,
\nauditors, actuaries, counsel, financial advisors, bankers, investment bankers
\nand consultants.<\/p>\n
“Tax” or “Taxes” means all income, gross receipts, sales, stock transfer,
\nexcise, bulk transfer, use, employment, franchise, profits, property or other
\ntaxes, fees, stamp taxes and duties, assessments, levies or charges of any kind
\nwhatsoever, together with any interest and any penalties, additions to tax or
\nadditional amounts imposed by any taxing authority with respect thereto.<\/p>\n
“Third Party Claim” means a claim, demand, suit, proceeding or action by a
\nperson, firm, corporation or government entity other than a Party hereto or any
\nAffiliate of such Party.<\/p>\n
“Y2K Compliant” means that Information Technology required for the
\nday-to-day operations of the Company records, stores, processes and presents
\ndate\/time data (including without limitation calculating, comparing and
\nsequencing) from, into and between the twentieth and twenty-first centuries,
\nincluding the years 1999 and 2000 and leap year calculations, and does not
\nmalfunction, cease to function or provide invalid or incorrect results or
\nmaterially degrade in performance as a result of date\/time data, including to
\nthe extent that other Information Technology which is Y2K Compliant, when used
\nin<\/p>\n
41<\/p>\n
combination with Information Technology of the Company, properly exchanges
\ndate\/time data with it.<\/p>\n
ARTICLE IX
\n GENERAL PROVISIONS<\/p>\n
SECTION 9.01 Expenses. Except as otherwise provided herein, all costs and
\nexpenses, including, without limitation, fees and disbursements of
\nRepresentatives, incurred in connection with this Agreement and the transactions
\ncontemplated hereby shall be paid by the Party incurring such costs and
\nexpenses; provided, however, that the Seller shall pay all such expenses
\nincurred by the Company.<\/p>\n
SECTION 9.02 Notices. All notices and other communications given or made
\npursuant hereto shall be in writing and shall be deemed to have been duly given
\nor made as of the date delivered personally or by facsimile or one day after
\ndelivery to a nationally recognized overnight courier, in each case, to the
\nParties at the following addresses or facsimile numbers (or at such other
\naddress or facsimile numbers for a Party as shall be specified by like notice,
\nexcept that notices of changes of address shall be effective upon receipt):<\/p>\n
(a) If to Seller:<\/p>\n
NewsEdge Corp.
\n 80 Blanchard Road
\n Burlington, MA 01803-5125
\n Attention: Donald L. McLagan, Chairman and Chief
\n Executive Officer
\n Facsimile No.: (781) 229-3060<\/p>\n
with a copy to:<\/p>\n
Testa, Hurwitz & Thibeault, LLP
\n 125 High Street
\n Boston, Massachusetts 02110-2704
\n Facsimile No.: (617) 248-7100
\n Attention: Lawrence S. Wittenberg, Esq.<\/p>\n
42<\/p>\n
(b) If to the Company:<\/p>\n
Individual.com, Inc.
\n 8 New England Executive Park
\n Burlington, MA 01803
\n Attention: Ilene H. Lang, President and Chief
\n Executive Officer
\n Facsimile No.: (781) 313-5412<\/p>\n
with a copy to:<\/p>\n
Office.com Inc.
\n 300 Park Avenue South
\n Fifteenth Floor
\n New York, New York 10010
\n Attention: William B. Schneck, Esq.
\n Facsimile No.: (212) 995-7782<\/p>\n
(c) If to Purchaser or Guarantor:<\/p>\n
Winstar New Media Company, Inc.
\n 685 Park Avenue
\n New York, New York 10017
\n Attention: Stuart B. Rekant and Jonathan S. Gitlin, Esq.
\n Facsimile No.: (212) 584-4001
\n (212) 986-6447<\/p>\n
in the case of subsection (b) or (c), with a copy to:<\/p>\n
Graubard Mollen & Miller
\n 600 Third Avenue
\n New York, New York 10016
\n Attention: David Alan Miller, Esq.
\n Facsimile No.: (212) 818-8881<\/p>\n
SECTION 9.03 Amendment. This Agreement may not be amended or modified
\nexcept by an instrument in writing signed by the Parties.<\/p>\n
SECTION 9.04 Headings. The headings contained in this Agreement are for
\nreference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
SECTION 9.05 Severability. If any term or other provision of this
\nAgreement is invalid, illegal or incapable of being enforced by any rule of law
\nor public policy, all other conditions and provisions of this Agreement shall
\nnevertheless remain in full force and effect so long as the economic or legal
\nsubstance of the transactions contemplated hereby is not affected in any manner
\nadverse to any Party. Upon such<\/p>\n
43<\/p>\n
determination that any term or other provision is invalid, illegal or incapable
\nof being enforced, the Parties shall negotiate in good faith to modify this
\nAgreement so as to effect the original intent of the Parties as closely as
\npossible in an acceptable manner to the end that transactions contemplated
\nhereby are fulfilled to the extent possible.<\/p>\n
SECTION 9.06 Entire Agreement. This Agreement, the Schedules and Exhibits
\nhereto and the Business Agreements constitute the entire agreement and supersede
\nany prior agreements (including any confidentiality agreement) and undertakings,
\nboth written and oral, between Seller, the Company, Purchaser and\/or the
\nGuarantor with respect to the subject matter hereof.<\/p>\n
SECTION 9.07 Benefit; Assignment. This Agreement shall inure to the
\nbenefit of and be binding upon the Parties and the successors and permitted
\nassigns of the Parties.<\/p>\n
SECTION 9.08 Governing Law; Consent to Jurisdiction. This Agreement shall
\nbe governed by, and construed in accordance with, the law of the State of New
\nYork, regardless of the laws that might otherwise govern under applicable
\nprinciples of conflicts of law. Each of Seller and the Company hereby submits to
\nthe jurisdiction of the courts (city, state and Federal) located in the County
\nof New York, State of New York, for any action, proceeding or claim brought by
\neither Purchaser or Guarantor pursuant to this Agreement or any other agreement,
\ninstrument or other document executed and delivered in connection with this
\nAgreement or pursuant hereto and waives any objection to the venue of any such
\nsuit, action or proceeding and the right to assert that such forum is not a
\nconvenient forum. Service of process in any such action or proceeding brought
\nagainst a Party may be made by registered mail addressed to such Party at the
\naddress set forth in Section 9.02 or to such other address as such Party shall
\nnotify the other Party in writing is to be used for such purpose pursuant to
\nSection 9.02.<\/p>\n
SECTION 9.09 Counterparts. This Agreement may be executed in one or more
\ncounterparts, and by the different Parties in separate counterparts, each of
\nwhich when executed shall be deemed to be an original but all of which when
\ntaken together shall constitute one and the same agreement.<\/p>\n
NEXT PAGE IS THE SIGNATURE PAGE<\/p>\n
44<\/p>\n
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
\nas of the date first written above.<\/p>\n
OFFICE.COM INC.<\/p>\n
By: \/s\/ Stuart B. Rekant
\n ————————————
\n Stuart B. Rekant, Vice Chairman and
\n Chief Executive Officer<\/p>\n
INDIVIDUAL.COM, INC.<\/p>\n
By: \/s\/ Ilene H. Lang
\n ————————————
\n Ilene H. Lang,
\n President and Chief Executive Officer<\/p>\n
NEWSEDGE CORPORATION<\/p>\n
By: \/s\/ Donald L. McLagan
\n ————————————
\n Donald L. McLagan,
\n Chairman and Chief Executive Officer<\/p>\n
GUARANTEE<\/p>\n
Winstar New Media Company, Inc., an Affiliate of Purchaser, hereby
\nguarantees the obligation of Purchaser to pay the Purchase Price pursuant to
\nthis Agreement.<\/p>\n
WINSTAR NEW MEDIA COMPANY, INC.<\/p>\n
By: \/s\/ Stuart B. Rekant
\n ————————————
\n Stuart B. Rekant, President<\/p>\n
Date:__________________________________
\n February 18, 2000<\/p>\n
45
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