ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of March 4, 2003 by and among BizLand, Inc. a Delaware corporation (the "Purchaser"), and Network Commerce, Inc., a Washington corporation (the "Seller")....
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of March 4, 2003 by and among BizLand, Inc. a Delaware corporation (the "Purchaser"), and Network Commerce, Inc., a Washington corporation (the "Seller"). RECITALS A. Seller, through its NCI Hosting operating division, provides web hosting, domain registration and other online business services to its customers; B. Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, certain of its customers of NCI Hosting and its relationships therewith, and certain other assets, all upon the terms and subject to the conditions set forth in this Agreement. AGREEMENT In consideration of the mutual promises herein contained, Purchaser and Seller, intending to be legally bound, agree as follows: SECTION 1. PURCHASED ASSETS AND ASSUMED LIABILITIES 1.1. Purchased Assets. (a) On the terms and subject to the conditions of this Agreement, on the Closing Date (defined below) Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the Hosting Customers (as defined below) of Seller, all accounts receivable outstanding as of the Closing Date for NCI Hosting services provided to the Hosting Customers (the "Accounts Receivable"), and the assets described on Schedule 1.1 hereto (collectively, the "Purchased Assets"). (b) As used herein, the "Hosting Customers" means customers of Seller's NCI Hosting division that have either (i) met the following criteria, or (ii) had one or more of the following criteria, in whole or in part, waived with respect to it and has been accepted by Purchaser as a customer Purchaser desires to purchase. The Hosting Customers as of the date hereof are set forth on Schedule 4.6 hereto, which Schedule may be updated from time to time by mutual agreement of Purchaser and Seller prior to the Closing Date (as defined herein) hereunder in order to add additional Hosting Customers of Seller after the date hereof. The Hosting Customer criteria are as follows, any of which may be waived, in whole or in part, by Purchaser, in its reasonable discretion, with respect to a customer: (i) with respect to each customer, Seller must provide to Purchaser the most recent billing information for each such customer as contained in Seller's records, consisting of the customer's billing address, e-mail address, and credit card information, and either (X) the customer must have an account receivable balance with Seller as of the Closing Date; OR (Y) the customer must have an active account with Seller as of the Closing Date (which shall include all active accounts, any accounts on which there are amounts past-due and any accounts that have been suspended but not yet cancelled) and such account must not have been cancelled or otherwise terminated by Seller or the customer
1
1.2. Assumed Liabilities.
Effective as of the Migration Date, Purchaser will assume Seller's deferred revenue liabilities with respect to the Hosting
Customers for services paid for but not rendered. In addition, Purchaser will assume Seller's obligations under that certain E-Mail
Services Agreement, dated April 2, 1998, by and between Seller and Critical Path, Inc. (provided, however, that Seller will be
responsible for bringing current any past due amounts owing under that agreement out of and to the extent of proceeds from the
Purchase Price), and any other executory contracts identified in filings made from time to time with the Bankruptcy Court (defined in
Section 1.5 below).
1.3. Excluded Assets and Liabilities.
Notwithstanding anything in this Agreement to the contrary, except for the Purchased Assets described above in this Section
1 and the assumed liabilities in Section 1.2, Purchaser is not purchasing any other assets, Seller's hardware and Seller's
nameservers, any customers of Seller other than the Hosting Customers or any third-party software or licenses thereto, or assuming
any liabilities of Seller (other than any liability resulting from the provision of services to such Hosting Customers after the
Closing Date) whether in connection with Seller's business or otherwise. In furtherance and not in limitation of the foregoing,
notwithstanding anything herein to the contrary, other than in connection with the accounts receivable that constitute part of the
Purchased Assets and any charge backs that relate thereto, Purchaser is not acquiring any liability associated with the Hosting
Customers for services rendered prior to the Closing Date, nor is Purchaser assuming any liabilities of Seller or any other person to
such Hosting Customers or any other person under any of Seller's contracts or agreements (oral, written or otherwise) with such
customer.
1.4. Migration and Transition Support.
(a) Purchaser shall provide certain billing services for Seller prior to the Closing Date, provided, however, that such
billing services shall commence only following receipt of, and shall be subject to all the terms and conditions of, an order from the
Bankruptcy Court (defined in Section 1.5 below) authorizing Purchaser to provide the billing services described in this Section 1.4.
In particular, for any of Seller's outstanding accounts receivable due from Hosting Customers in connection with services provided
through Seller's NCI Hosting division, whether for new services or recurring services, which accounts receivable are outstanding for
any billing period prior to March 31, 2003 ("Billing Period") , Purchaser shall be entitled to xxxx such Hosting Customers and
process customer credit cards on behalf of Seller. Purchaser shall remit to Seller ninety percent (90%) of all amounts collected
for the Billing Period ("Credit Card Receivables"). It is contemplated by the parties that Purchaser shall xxxx such Hosting
Customers for the billing periods prior to March 31, 2003 and shall remit the Credit Card Receivables to Seller in three installments
as the Second Payment due hereunder. In the event that the Closing does not occur, Purchaser promptly shall cease all such billing
activities and shall transfer to Seller any cash received for the accounts receivable (including any cash that may be received in the
future from the successful processing of customer credit cards), less a ten percent (10%) administrative fee for such billing
services.. Seller does not make any representation or warranty as to any such accounts receivable, including as to their
collectibility.
(b) For the period (the "Support Period") beginning from the date of this Agreement and ending on the earlier of the
date (the "Migration Date") (i) that is 60 days after the Effective Date and (ii) on which the Hosting Customers shall be
Successfully Migrated, Seller and Purchaser shall use their respective reasonable best efforts to support the migration of the
Hosting Customers' web sites and other data, including completion of any domain name pointing adjustments as reasonably requested by
Purchaser, to Purchaser's servers, with the intent that migration be completed within 60 days of the Effective Date Date. Seller and
Purchaser further shall use their respective reasonable best efforts to support the transition of customers to being Successfully
Migrated as reasonably requested by Purchaser, including, without limitation, arranging for introductions to the customers, assisting
in the explanation of the transaction to such customers and providing technical assistance to Purchasers migration team members.
Seller shall cooperate with Purchaser and shall use its reasonable best efforts to perform each of the steps and provide the
transition support as required under Schedule 1.3 hereto, and to take any other actions reasonably requested by Purchaser during the
Support Period (the "Transition Support").
2
(c) During the Support Period, Seller shall use its reasonable best efforts to cooperate with Purchaser for domain
renewals by Hosting Customers who renew during such period, (i) by assisting by assigning to Purchaser Seller's agreements with such
domain name registrar for such customers, and (ii) reasonably cooperating with Purchaser to obtain such Registrars agreement to such
assignment.
(d) Any out-of-pocket or third-party costs or expenses incurred by Seller or Purchaser in connection with the migration,
Transition Support or other support or cooperation efforts of the parties shall be at Purchaser's sole expense, provided that any
expenses incurred by Seller for which it seeks re-imbursement from Purchaser must be pre-approved in writing.
(e) As used herein the term "Successfully Migrated" shall mean that:
(i) the Hosting Customer's web site has been migrated to Purchaser's network; and
(ii)Seller has transferred all of the Hosting Customer's billing, support, and other records to Purchaser;
(e) Purchaser shall be solely responsible for providing each Hosting Customer with notice of Purchaser's "Terms of
Service" (as set forth in its web site (xxx.xxxxxxx.xxx) as in effect from time to time) and entering into such customer contracts
and/or billing arrangements with the Hosting Customers as Purchaser deems appropriate. Purchaser reserves the right to terminate any
customer in accordance with its Terms of Service; provided, however, that no such termination shall result in a reduction in the
Purchase Price. The failure of any Hosting Customer to accept Purchaser's Terms of Service or any other failure to become a customer
of Purchaser shall not result in a reduction in the Purchase Price.
1.5. Bankruptcy Court Approval
The parties acknowledge and agree that this Agreement, the transaction contemplated herein, and the assumption and
assignment by Seller to Purchaser of any related executory contracts (or procedures for the assumption and assignment thereof)
pursuant to Sections 105, 363, and 365 of the Bankruptcy Code will be subject to approval by an order or orders of the United States
Bankruptcy Court in the Western District of Washington (the "Bankruptcy Court") not inconsistent with the terms of this Agreement,
unless otherwise agreed in writing by Seller and Purchaser. Such order or orders (i) shall include a finding that Purchaser is
subject to the protections of Sections 363(f) and 363(m) of the Bankruptcy Code, (ii) shall have been entered by the Bankruptcy
Court, and (iii) shall not have been stayed or vacated (the "Final Order"). The date of entry of the Final Order shall be the
"Effective Date" of this Agreement.
SECTION 2. PURCHASE PRICE
2.1. Purchase Price.
The purchase price (the "Purchase Price") for the Purchased Assets will be $500,000 payable in four installments.
2.2. Payment of the Purchase Price.
The Purchase Price will be payable and subject to the terms as follows:
3
(a) Initial Payment. The initial payment of $15,000 (the "Initial Payment") shall be deposited and placed in escrow with legal
counsel to Seller (the "Deposit"), on the Effective Date. The Initial Payment shall be released to the Seller on the Third Payment
Date (as defined below).
(b) Second Payment. The Second Payment shall be paid to Seller on March 14, 2003, March 21, 2003 and March 28, 2003 by wire
transfer of immediately available funds to an account designated by Seller. The Second Payment shall be the total of the Credit Card
Receivables as billed and collected by Purchaser during the Billing Period
(c) Third Payment. The Third Payment shall be paid to Seller twenty (20) business days after the Effective Date (the "Third
Payment Date") by wire transfer of immediately available funds to an account designated in writing by Seller. The Third Payment shall
be the amount owed after subtracting the Initial Payment and the Second Payment from $250,000.
(d) Final Payment. Sixty (60) calendar days after the Effective Date, Purchaser shall pay the final payment of $250,000. The
Final Payment shall be personally guaranteed by a member of the Board of Directors of Purchaser (whose financial condition is
reasonably acceptable to Seller), such guarantee to be executed and delivered on the Third Payment Date. The Final Payment shall be
paid by wire transfer of immediately available funds to an account designated in writing by Seller.
(e) Guarantee. The Guarantee shall be effective as of the Closing Date. In the event that the Guarantor ceases to be a
Director of the Purchaser in the period between the Closing Date and the Final Payment Date the Guarantee shall cease to be effective
and the Purchaser shall immediately either (a) provide a substitute Guarantee from an officer, director or shareholder of the
Purchaser (whose financial condition is reasonably acceptable to Seller). In the event that Purchases fails to obtain an acceptable
substitute Guarantor then Purchaser shall place the Final Payment in escrow with counsel for the Seller.
2.3. Deposit / Break-up Fee
(a) Deposit. The Initial Payment shall be paid to and placed in the Deposit with counsel for Seller to be held in
escrow and applied to the Purchase Price in the event of the consummation of the Closing pursuant to this Agreement. In the event
that (i) Purchaser terminates this Agreement after approval by the Bankruptcy Court or (ii) the Bankruptcy Court approves the
transaction with Purchaser pursuant to this Agreement and Seller is otherwise ready, willing and able to consummate the transaction
by the Closing but Purchaser fails to consummate the transactions by the Closing, then in either case $15,000 shall be due to Seller
as liquidated damages, and the balance of the Deposit, if any, shall be returned to Purchaser.
(b) Break-Up Fee. In the event that (i) Seller terminates the Purchase Agreement after approval by the Bankruptcy Court
or (ii) the Bankruptcy Court approves the transaction with a third party bidder on terms and conditions similar to this Agreement and
Purchaser is otherwise ready, willing and able to consummate the transaction by the Closing, then in either case a break-up fee of
$15,000 shall be paid to Purchaser as liquidated damages, and the Deposit shall be returned to Purchaser.
SECTION 3. CLOSING
3.1. Closing.
The closing of the purchase and sale of the Purchased Assets (the "Closing") shall take place on the Third Payment Date,
(the "Closing Date"). The Closing shall take place via facsimile or overnight delivery, or at such other place or time as Purchaser
and Seller may mutually agree.
4
3.2. Seller's Obligations at Closing
At the Closing, Seller shall deliver to Purchaser:
(a) a certificate (the "Seller's Closing Certificate") setting forth that, except as otherwise expressly provided in
Seller's Closing Certificate, (i) each of the representations and warranties made by Seller in this Agreement was accurate in all
material respects as of the Closing Date as if made on the Closing Date, (ii) each of the obligations that Seller is required to have
performed pursuant to this Agreement at or prior to the Closing has been duly performed in all material respects, and (iii) each of
the conditions set forth in Section 6 has been satisfied in all material respects;
(b) copies of all required Consents (as defined below), if any; and
(c) each of the other appropriate instruments of transfer, conveyance and assignment with respect to the Purchased
Assets to be delivered by or entered into by Seller at the Closing in connection with or pursuant to this Agreement (together with
this Agreement, the "Transaction Documents"), duly executed by Seller.
3.3. Purchaser's Obligations.
At the Closing, Purchaser shall deliver to Seller:
(a) The Third Payment pursuant to Section 2.2(c)
(b) the personal guarantee of a member of the Board of Directors of Purchaser (whose financial condition is reasonably
acceptable to Seller) in the form of Exhibit B to this Agreement.
(c) a certificate (the "Purchaser's Closing Certificate") setting forth that, except as otherwise expressly provided in
Purchaser's Closing Certificate, (i) each of the representations and warranties made by Purchaser in this Agreement
is accurate in all material respects as of the Closing Date as if made on the Closing Date, (ii) each of the
obligations that Purchaser is required to have performed pursuant to this Agreement at or prior to the Closing has
been duly performed in all material respects, and (iii) each of the conditions set forth in Section 7 has been
satisfied in all material respects; and
(d) each of the agreements and documents contemplated to be delivered or entered into by Purchaser at the Closing
pursuant to or in connection with this Agreement, including each of the Transaction Documents, duly executed by
Purchaser.
3.4. Instruments of Conveyance.
At the Closing, Seller shall (at its own expense) execute and deliver to Purchaser such bills of sale, endorsements,
assignments and other instruments of transfer (in substantially the form attached to this Agreement as Exhibit 3.4) and shall take
such other actions as Purchaser may reasonably require in order to transfer title to the Purchased Assets sold to Purchaser on the
Closing Date.
3.5. Further Assurances, Etc.
Seller shall, at any time after the Closing and upon the request of Purchaser, take such other actions as Purchaser may
reasonably request in order to carry out the intent of this Agreement, including, without limitation, executing and delivering all
such further instruments of transfer as may be required to fully transfer to Purchaser the Purchased Assets in accordance with the
terms hereof.
5
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants, to and for the benefit of Purchaser as set forth below as of the date hereof, except as set
forth on the disclosure Schedules referenced herein (which Schedules shall be updated by Seller prior to the Closing Date, if
necessary) and except for any approval, process or requirements of the Bankruptcy Court and subject to issuance of the Final Order.
As used in this Agreement, the words "to the best of Seller's knowledge and belief," or variations thereof, shall mean the actual
knowledge of N. Xxxxx Xxxxxxx and the applicable employees of Seller with primary responsibility for Seller's NCI Hosting division
after having made reasonable inquiries and investigations as to the subject matter of such representation and warranty.
4.1. Authority; Binding Nature of Agreements.
Seller has the requisite corporate power and authority to enter into and to perform its obligations under this Agreement and
the other Transaction Documents, and the execution, delivery and performance by Seller of this Agreement and the other Transaction
Documents have been duly authorized by all necessary corporate action of Seller. Each of this Agreement and the other Transaction
Documents constitutes, or upon execution and delivery will constitute, the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
4.2. Non-Contravention; Consents.
(a) Neither the execution and delivery of any of this Agreement or the other Transaction Documents, nor the consummation
of the transaction contemplated hereby, will (with or without notice or lapse of time) (i) contravene, conflict with or result in a
violation of any of the provisions of Seller's organizational documents, (ii) contravene, conflict with or result in a violation of,
or give any governmental body or other person or entity the right to challenge the transactions contemplated hereby or to exercise
any remedy or obtain any relief under, any federal, state, county, or local law, statute, rule, regulation, ordinance, code, or any
decree, ruling, order, writ, injunction, award or judgment of any court or governmental, regulatory or administrative authority
(collectively "Law") applicable to Seller or with respect to which any of the Purchased Assets is subject; or (iii) result in the
imposition or creation of any liens, claims, charges, security interests, encumbrances or other rights of a third party
(collectively, "Encumbrances") upon or with respect to some or all of the Purchased Assets.
(b) Except as set forth in Section 1.5 above, Seller was, is and will not be required to make any filing with or give
any notice to, or to obtain any approval, consent, ratification, permission, waiver or authorization (collectively, "Consent") from,
any person, entity or governmental body or authority in connection with the execution and delivery of any of this Agreement and the
other Transaction Documents or the consummation of the transaction contemplated hereby.
4.3. Organization.
Seller has all necessary corporate power and authority to own the Purchased Assets in the manner in which such assets are
currently owned.
4.4. Financial Statements and Other Information.
(a) Seller has delivered or otherwise made available to Purchaser the financial and other information described on
Schedule 4.4 hereto (collectively, the "Information").
(b) To the best of Seller's knowledge and belief, all of the Information is accurate and complete in all material
respects and, to the extent such Information includes financial statements of Seller (i.e., balance sheets or statements of
operation), such financial statements present fairly the financial position of Seller and related subsidiaries or operating units as
of the respective dates thereof and the results of operations of seller for the periods covered thereby, as applicable.
6
4.5. Title to Purchased Assets; No Encumbrances.
Seller is the true and lawful owner of and has good and marketable title to all of the Purchased Assets. Upon consummation
of the transaction contemplated by this Agreement, Purchaser will acquire good and marketable title to all of such Purchased Assets,
free and clear of all Encumbrances.
4.6. Hosting Customers.
(a) To the best of Seller's knowledge and belief, Schedule 4.6 hereto identifies and provides an accurate and complete
list of the Hosting Customers receiving web hosting services from Seller pursuant to a contract or agreement with Seller (a "Customer
Contract") for such services, which Schedule may be updated from time to time by Seller to account for new Hosting Customers between
the date of this Agreement and the Closing Date. Seller has made available to Purchaser a copy of Seller's form Customer Contract
that it uses with Hosting Customers for web hosting services.
(b) To the best of Seller's knowledge and belief, each Customer Contract is valid and in full force and effect, and is
enforceable by Seller in accordance with its terms.
(c) Except as set forth in Schedule 4.6 (c) hereto:
(i) to the best of Seller's knowledge and belief, no party has violated or breached, or declared or committed any
default under, any Customer Contract; and
(ii)to the best of Seller's knowledge and belief, no event has occurred, and no circumstance or condition exists,
that would (with or without notice or lapse of time) (A) result in a violation or breach of any of the
provisions of any Customer Contract, (B) give any person or entity the right to declare a default or exercise
any remedy under any Customer Contract, or (C) give any person or entity the right to cancel, terminate or
modify any Customer Contract.
4.7. No Proceedings or Claims.
Except as set forth in Schedule 4.7 hereto, there are no other actions, suits, legal, administrative or regulatory
proceedings or investigations pending, or to the best of Seller's knowledge, threatened, against or relating to Seller, the Purchased
Assets or the transactions contemplated hereby. No Hosting Customer or other person or entity has ever asserted, or threatened in
writing to Seller to assert, any material claim against Seller in connection with the Purchased Assets. To the knowledge of Seller,
no event has occurred, and no condition or circumstance exists, that would (with or without notice or lapse of time) give rise to or
serve as a basis for the commencement of any such proceeding or the assertion of any such claim.
4.8. Brokers.
Seller has not agreed or become obligated to pay, or has not taken any action that might result in any person or entity
claiming to be entitled to receive, any brokerage commission, finder's fee or similar commission or fee in connection with the
transactions contemplated hereby.
7
4.9. Full Disclosure.
Seller has provided Purchaser and Purchaser's representatives with full and complete access to all of Seller's records and
other documents and data related to the Purchased Assets.
4.10. Non-Solicitation.
Seller agrees for a period of two (2) years from the Closing Date, it will not, directly or indirectly solicit any of the
Hosting Customers for any services or products, including, without limitation, shared web hosting and domain name sales, but
excluding any Hosting Customers to whom Seller has provided services or products through its NCI Marketing division or its other
business activities.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants, to and for the benefit of Seller, as follows:
5.1. Authority; Binding Nature of Agreement, Etc.
Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware,
and has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction
Documents to which Purchaser is a party. The execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party have been duly authorized by all necessary corporate action of Purchaser. This Agreement and all
other Transaction Documents contemplated to be executed and delivered by Purchaser each constitutes the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms.
5.2. Non-Contravention; Consents.
(a) Neither the execution and delivery of any of this Agreement or the other Transaction Documents, nor the consummation
of the transaction contemplated hereby, will (with or without notice or lapse of time) (i) contravene, conflict with or result in a
violation of any of the provisions of Purchaser's organizational documents, or (ii) contravene, conflict with or result in a
violation of, or give any governmental body or other person or entity the right to challenge the transactions contemplated hereby or
to exercise any remedy or obtain any relief under, any Law applicable to Purchaser.
(b) Purchaser was, is and will not be required to make any filing with or give any notice to, or to obtain any Consent
from, any person, entity or governmental body or authority in connection with the execution and delivery of any of this Agreement and
the other Transaction Documents or the consummation of the transaction contemplated hereby.
5.3. Due Diligence.
Purchaser has had an opportunity to undertake any and all due diligence it has determined reasonable or necessary in order
to allow it to proceed with this transaction. Purchaser has been afforded the opportunity to ask questions and receive answers from
Seller regarding the Purchased Assets, and to obtain any additional information necessary to verify the accuracy of the information
given to Purchaser, and all such questions have been answered to Purchaser's full satisfaction. Without in any way limiting the
representations and warranties of Seller set forth in this Agreement, Purchaser has been solely responsible for its own due diligence
investigation of Seller and the Purchased Assets.
8
5.4. Available Funds.
Purchaser has sufficient cash on hand or available without restriction under its existing credit facilities to pay in full
the Purchase Price.
5.5. Brokers.
Purchaser has not agreed or become obligated to pay, or has not taken any action that might result in any person or entity
claiming to be entitled to receive, any brokerage commission, finder's fee or similar commission or fee in connection with the
transactions contemplated hereby.
SECTION 6. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT CLOSING
Purchaser's obligation to purchase the Purchased Assets and to take the other actions required to be taken by Purchaser on
the Closing Date is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be
waived by Purchaser, in whole or in part):
6.1. Accuracy of Representations.
The representations and warranties made by Seller in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing
Date.
6.2. Performance of Obligations.
Seller shall have performed all material obligations herein required to be performed or observed by it on or prior to the
Closing Date.
6.3. Additional Documents.
Purchaser shall have received the following documents:
(a) an updated Disclosure Schedule as of the Closing Date, which update can be given via listing any exceptions to the
accurateness of any representations and warranties as part of Seller's Closing Certificate referred to in Section 3.3(a) above ;
(b) evidence satisfactory to Purchaser that the Consents referenced in Section 4.2 with respect to Seller remain in full
force and effect;
(c) an executed original of each Transaction Document (including without limitation the Xxxx of Sale substantially in
the form attached as Schedule 6.3(c) hereto) to which Seller is a party and evidence satisfactory to Purchaser that no default has
occurred or is continuing under any of such instruments, agreements or other documents;
SECTION 7. CONDITIONS TO SELLER'S OBLIGATIONS AT THE CLOSING
Seller's obligation to sell the Purchased Assets and to take the other actions required to be taken by Seller at the Closing
Date, is subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which may be
waived by Seller, in whole or in part):
9
7.1. Accuracy of Representations.
The representations and warranties of Purchaser contained in Section 5 shall be true on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and as of the Closing Date.
7.2. Performance of Obligations.
Purchaser shall have performed all material obligations herein required to be performed or observed by it on or prior to the
Closing Date.
7.3. Additional Documents.
Seller shall have received an executed original of each Transaction Document to which Purchaser is a party.
SECTION 8. SURVIVAL OF REPRESENTATIONS AND COVENANTS.
The representations, warranties, covenants and obligations of Seller and Purchaser hereunder and under the other Transaction
Documents shall survive the Closing Date hereunder. All of said representations and warranties shall remain in full force and effect
and shall survive for a period of six months following the Closing Date.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1. Fees and Expenses.
Except as otherwise specifically provided herein, each party shall pay its own fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
9.2. Attorneys' Fees.
If any legal action or other legal proceeding relating to any of the Transaction Documents or the enforcement of any
provision of any of the Transaction Documents is brought against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other relief to which the prevailing party may be entitled).
9.3. Transfer Taxes.
Seller and Purchaser shall equally share and be responsible for all sales, use and transfer taxes due by reason of the
consummation of the transactions contemplated by this Agreement.
9.4. Notices.
Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express
delivery service or by telecopier) to the address or telecopier number set forth beneath the name of such party below (or to such
other address or telecopier number as such party shall have specified in a written notice given to the other parties hereto):
if to Seller:
Network Commerce, Inc.
000 0xx Xxxxxx Xxxxx, Xxxxx 000 X,
Xxxxxxx, XX 00000
Attention: CEO
Telecopier: (000) 000-0000
10
With a required copy to:
Cairncross & Hempelmann, P.S.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
if to Purchaser:
BizLand Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: CEO
Telecopier: (000) 000-0000
With a copy to:
BizLand Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Telecopier: (000) 000-0000
9.5. Counterparts.
This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
9.6. Governing Law; Dispute Resolution; Venue; Waiver of Jury Trial.
Except to the extent the mandatory provisions of the Bankruptcy Code apply, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Washington applicable to contracts made and to be performed entirely within
such state without regard to principles of conflicts or choice of laws or any other law that would make the laws of any other
jurisdiction other than the State of Washington applicable hereto. The parties agree that, except as provided herein without
limitation of any party's right to appeal any order of the Bankruptcy Court, (a) the Bankruptcy Court shall retain jurisdiction to
enforce the terms of this Agreement and to decide any claims or disputes that may arise or result from, or be connected with, this
Agreement, any breach or default hereunder, or the transactions contemplated herein; and (b) any and all actions or causes of action
relating to the foregoing shall be filed and maintained only in the Bankruptcy Court, and the parties hereby consent and submit to
the jurisdiction of the Bankruptcy Court. The parties hereto irrevocably and unconditionally waive trial by jury in any legal action
or proceeding relating to the Agreement and any agreements entered into in connection herewith and any amendment, waiver, consent, or
other document that amends waives, supplements, or otherwise modifies the Agreement or any of the agreements entered into in
connection herewith and therewith.
9.7. Successors and Assigns.
This Agreement shall be binding upon Seller and its successors and assigns (if any) and Purchaser and its successors and
assigns (if any). This Agreement shall inure to the benefit of Seller, Purchaser, and the respective successors and assigns (if any)
of the foregoing. Purchaser may freely assign any or all of its rights under this Agreement, in whole or in part, to any other
person or entity, including without limitation any affiliate thereof, with the consent of the Bankruptcy Court.
11
9.8. Remedies Cumulative.
The rights and remedies of the parties hereto shall be cumulative (and not alternative).
9.9. Waiver.
No failure or delay on the part of any party hereto to exercise any right or remedy under this Agreement shall operate as a
waiver of such right or remedy, and no single or partial exercise of any such right or remedy shall preclude any other or further
exercise thereof. No party shall be deemed to have waived any claim arising out of this Agreement, or any right or remedy under this
Agreement, unless the waiver of such claim, right or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party.
9.10. Amendments.
This Agreement may not be amended other than by a written instrument duly executed and delivered by a duly authorized
officer on behalf of Purchaser and Seller, respectively.
9.11. Severability.
In the event that any provision of this Agreement shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement shall not be impaired or otherwise affected and shall continue to be valid and enforceable to
the fullest extent permitted by law.
9.12. Parties in Interest.
None of the provisions of this Agreement is intended to provide any rights or remedies to any person or entity other than
the parties hereto and their respective successors and assigns (if any).
9.13. Entire Agreement.
The Transaction Documents (including Schedules and Exhibits thereto) set forth the entire understanding of the parties
relating to the subject matter thereof and supersede all prior written or oral agreements and understandings among or between any of
the parties relating to the subject matter thereof.
9.14. Setoff.
Purchaser shall not have any right of setoff against any amounts owed to Seller resulting from any breach of the covenants,
representations or warranties set forth herein.
9.15. Confidential Information.
Purchaser acknowledges that it has had access to or has gained knowledge of certain non-public information of Seller and its
customers (including, without limitation, customer lists, credit card and billing information, product plans, business plans,
promotional and marketing strategies and activities, and trade secrets) ("Confidential Information") in connection with Purchaser's
review and due diligence investigation and negotiation regarding the proposed purchase of assets of the Company's NCI Hosting
business (the "Transaction"). Purchaser acknowledges and agrees that all such Confidential Information are valuable and confidential
assets of the Company. Purchaser, and its officers, directors, employees, agents and members, shall hold any and all such
12
Confidential Information in trust and confidence and shall not use or disclose any such information other than solely in connection with the Transaction; provided, further that in the event this Agreement is terminated or Closing does not otherwise occur, Purchaser shall promptly return to Seller all materials (whether in written, electronic or other format) containing any such Confidential Information.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY.]
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
| "PURCHASER" | BIZLAND,
INC. a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
|
| "SELLER" | Network
Commerce, Inc.
By: /s/ N. Xxxxx
Xxxxxxx |
14
