EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
This agreement ("Agreement") is made as of July 11, 2003, by and between
Jupitermedia Corporation, a Delaware corporation ("Purchaser"), with a principal
place of business at 00 Xxx Xxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxx 00000, and
XxxX.xxx, Inc. with a Federal U.S. Tax ID of 00-0000000 (the "Seller"), whose
principal place of business is 000 Xxxxx Xx., Xxxxxxxx Xxxx, XX 00000, pursuant
to the following terms and conditions.
WHEREAS, the Seller now owns and wishes to sell its network of Internet Web
sites, e-mail newsletters, discussion forums, and all of the related Internet
Web site pages, content, domain names, subscriber lists, e-mail newsletters,
discussion forums and other assets, as more fully specified below, collectively
known as DevX or XxxX.xxx, the home page of which is shown on Exhibit A, (the
Web site, e-mail newsletters and other assets collectively the "Web site"), to
Purchaser on the terms set forth hereinbelow; and
WHEREAS, Purchaser wishes to purchase the assets of the Web site from the
Seller and to retain certain employees of Seller to maintain and operate the Web
site as herein provided;
NOW, THEREFORE, in consideration of the foregoing premises, the
mutual covenants and agreements contained herein, and such other good and
valuable consideration, Purchaser and the Seller hereby agree as follows:
1. GRANT.
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(a) Purchaser hereby agrees to purchase and the Seller hereby agrees to
sell the following assets: any and all of the Seller's rights, title and
interest in and to all non-cash assets and properties constituting, relating to,
or used with, the Web site, including but not limited to all content; text;
graphics; images; audio; video; databases; HTML; DHTML and SHTML files; XML;
WAP; cgi and other scripts, all programming code (source and object), subscriber
databases (including, but not limited to, postal and e-mail); mailing lists
(postal and e-mail); user lists, member lists; archives; discussion lists,
discussion forums, source code libraries, e-learning solutions, vendor
development portals, corporate development portals, get help library, webinars,
on-line workshops, server and traffic logs; e-mail newsletters (as listed on
Exhibit B, hereafter the "E-mail Newsletters"); archives of e-mail newsletters;
e-mail subscriber lists; customer and advertiser lists; work-in-process;
goodwill; copyrights; copyright applications; trademarks including all goodwill
and common law rights (including but not limited to those listed on Exhibit B
(the "Trademarks")); trademark applications (as listed on Exhibit B); names
(including, but not limited to, DevX and XxxX.xxx and all derivations thereof);
design; trade dress; logos; graphics; marketing materials; promotional
materials; web sites, domain names (as listed on Exhibit B (the "Domain
Names")); architecture; patents; patent applications; intellectual property;
property rights; pages; advertising space reservation and advertising insertion
orders; commerce and other contracts (as listed in Exhibit C); any deposits,
advance payments or
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accounts receivable related to any advertising contracts, orders, subscriptions,
or other items assumed by Purchaser (as listed in Exhibit C) or fulfilled by
Purchaser after the date of this Agreement; and all business, accounting, legal
and technical books and records related to the Web site; all operating systems;
Internet Web servers; interpreters; compilers; routers; application software;
database software; banner rotation software; all computer workstations including
monitors, keyboards, mice, printers and modems, fax machines, copy machines and
other office furniture and equipment (such software, hardware and equipment as
listed in Exhibit D), of Seller (the Web site and all of the previous assets
hereafter, collectively referred to as the "Assets").
(b) The Assets will be transferred to Purchaser upon Closing and the Seller
shall execute all required documents and shall do all things that are deemed
necessary by Purchaser for the valid transfer of any of the Assets including,
but not limited to, executing all domain name transfer forms for each Domain
Name, and the trademark assignment form, attached as Exhibit E. Following the
Closing, the Web site shall reside solely on Purchaser's servers, its
distribution and mirroring shall be maintained solely by Purchaser.
(c) The Seller acknowledges that Purchaser is not purchasing or assuming
any liabilities, obligations or indebtedness of the Seller, the Web site or the
Assets arising from any event occurring prior to the date of this Agreement (the
"Excluded Liabilities"), except as specifically listed on Exhibit C (the
"Assumed Liabilities") no matter when any claim for such liabilities,
obligations or indebtedness is made. The Seller hereby covenants and agrees to
pay, perform and fully discharge the Excluded Liabilities.
(d) The Purchaser agrees to offer employment to certain employees of the
Seller as listed on Exhibit F.
(e) The Seller agrees that it will change its corporate name to a name that
does not use the Trademarks promptly following the Closing.
(f) The Seller agrees that Purchaser and the employees operating the Web
site may remain in Seller's office space located at 000 Xxxxx Xx., Xxxxxxxx
Xxxx, XX, through the end of August 2003. Seller shall be solely responsible for
the office rent for the month of July 2003 and Purchaser shall reimburse Seller
for the base office rent for the month of August 2003.
(g) Seller shall provide Purchaser with access to, and use of, Seller's
Internet and telephone service in the office until August 31, 2003 and with
access to, and use of, Seller's server hosting with Exodus Communications for up
to a period of ninety days following the date of Closing. Purchaser shall
reimburse Seller for all of its direct costs incurred in complying with this
Section 1(g). In addition, Purchaser shall use commercially reasonable efforts
to terminate its use of the foregoing services before the specified time
periods.
(h) Seller and Purchaser shall (i) each provide the other with such
assistance as may reasonably be requested by them in connection with the
preparation of any tax returns, or in connection with any audit or other
examination by any taxing authority or any judicial or
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administrative proceedings, (ii) each retain and provide to the other any
records or other information which may be relevant to any such tax return, audit
or examination, proceeding or determination or securities filing, (iii) each
retain and provide the other with any final determination of any such audit or
examination, proceeding or determination that affects any amount required to be
shown on any tax return or in any securities filing of the other for any period.
In addition to the foregoing, upon request of Purchaser, Seller shall provide
management representation letters to Purchaser, and its accountants, for any
such periods ending on or prior to the date of Closing.
2. PROPRIETARY RIGHTS.
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The Seller acknowledges and agrees that nothing contained in this Agreement
shall cause the Seller to acquire any right, title, or interest in or to any
copyrights, trademarks, service marks, trade secrets, patents or other
intellectual property rights of Purchaser, or to acquire or retain any rights to
the Web site or the Assets whether originated before or after the date hereof.
3. NON-COMPETITION/NON-SOLICITATION.
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(a) The Seller agrees that it will not, anywhere in the world or in any
language during and for a period of three (3) years after the date of this
Agreement, directly or indirectly, whether as principal, agent, stockholder,
consultant, partner, employee, member, or in any other capacity whatsoever,
participate in, engage in, or be in any manner associated with the development,
publishing, marketing, distribution, creation, licensing or sale of any Internet
or World Wide Web site or Assets, or other paper or electronic product that is
similar to, or has any content or features similar to, or is likely to compete
or interfere with, or injure the value or prospects of the Web site, the Assets
or any of the content of the Web site anywhere in the world.
(b) The Seller further agrees that during and for a period of at least
three (3) years from the date of this Agreement it will not, jointly or
independently, directly or indirectly, solicit or induce or attempt to solicit
any employee, agent, representative or contractor of Purchaser, including any
former employees of the Seller, to terminate his, her or its employment,
representation or other association with Purchaser.
(c) The Seller acknowledges and agrees that because of the world wide
access of the Internet and World Wide Web, that the provisions of Paragraph 3(a)
and (b) are reasonable with respect to the scope of restriction, duration and
the geographic scope and are reasonably necessary to protect the value of the
Assets. In the event that a court of competent jurisdiction or other competent
authority should determine that the duration, geographic restriction, or scope
of the foregoing restrictions are unreasonable, then the Purchaser and the
Seller hereby authorize and empower such court to insert reasonable limitations
and enforce the restrictions in accordance therewith so as to achieve as nearly
as possible the business purpose and intent of such restrictions. Such
modification shall be effective, however, only with respect to the operation of
this Agreement in the jurisdiction in which such modification was made and this
Agreement shall remain in full force and effect without modification in all
other jurisdictions.
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4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.
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The Seller represents, warrants and covenants that, except as set forth on
the Seller Disclosure of Exceptions delivered to Purchaser contemporaneously
with execution of this Agreement, and attached as Exhibit L:
(a) the Assets are free and clear of all liens, encumbrances, security
interests, restrictions or claims of any kind or nature;
(b) it is the sole author and owner of all content including all images, text,
graphics, video and audio of the Web site or has the freely transferable
right to the content, images, text, graphics, video and audio of the Web
site;
(c) it is the sole owner of the Assets and that it has every right to enter in
this Agreement and sell the Assets;
(d) the un-audited balance sheets of the Seller at March 31, 2003 and May 31,
2003 (the "Balance Sheets") and related statements of income, retained
earnings and cash flow for the periods then ended (collectively, the
"Financial Statements"), (i) are included as Exhibit K, (ii) were prepared
in accordance with United States generally accepted accounting principles
("GAAP"), (iii) present fairly the financial condition and the results of
operations of the Company as of the dates and for the periods indicated
thereon, (iv) are complete, correct and accordance with the books of
account and records of the Company, (v) can be legitimately reconciled
with the financial statements and the financial records maintained and the
accounting methods applied by the Seller for federal income tax purposes,
and (vi) reflect accurately all costs and expenses for the Web site that
are required to be included in financial statements prepared in accordance
with GAAP.
(e) All accounts receivable of the Company that are reflected on the Balance
Sheets or on the accounting records of the Seller as of the Closing Date
(collectively, the "Accounts Receivable") represent or will represent
valid obligations arising from sales actually made or services actually
performed in the ordinary course of business. Unless paid prior to the
Closing Date, the Accounts Receivable are or will be as of the Closing
Date current (and not subject to claims of offset) and are payable
pursuant to written agreements with Seller and to the best of Seller's
knowledge there is no claim, breach, or other fact of any kind suggesting
that any such Accounts Receivable will not be paid when due. The reserves
shown on the Balance Sheets as of the Closing Date are calculated in
accordance with GAAP. There is no contest, claim, or right of set-off,
other than returns in the ordinary course of business, under any contract
with any obligor of an Accounts Receivable relating to the amount or
validity of such Accounts Receivable;
(f) There are no agreements between Seller and any related or affiliated party
in regard to the Web site or Assets;
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(g) Exhibit B contains a list of all material intellectual property related
to, or used in, the Web site including, but not limited to, domain names,
trademarks, copyright, patents, databases, and trade secrets.
(h) it first used the name DevX on October 27, 1999 and filed trademark
applications as listed on Exhibit B;
(i) except as set forth on Exhibit C attached hereto, has made no commitment,
agreement or understanding, whether verbally or in writing, to any other
party for the use or license of any content, Trademarks, Domain Names or
other intellectual property of the Web site or Assets after the date of
this Agreement;
(j) to the best of the Seller's knowledge, the Web site and Assets do not
infringe, and Seller has received no notice of any potential infringement,
of any statutory or common law copyright, trademark, contractual,
proprietary right, privacy or any other right of any other person or
entity;
(k) at all times the Web site and Assets have been operated or utilized in
full compliance with all applicable laws;
(l) the Assets are in good condition, ordinary wear and tear excepted;
(m) Exhibit D lists all of the software, codes, hardware or licenses used by
Seller to operate or maintain the Web site and, except as listed on
Exhibit D, there is no other software, codes, hardware or licenses used by
Seller for the operation or maintenance of the Web site or Assets;
(n) Exhibit G lists all of the contracts or agreements that are used by Seller
for the operation or maintenance of the Web site that are not being
transferred to Purchaser and except as noted on Exhibit G, there are no
other such contracts or agreements that are used by Seller for the
operation or maintenance of the Web site other then the assumed contracts
identified on Exhibit C;
(o) this Agreement constitutes the valid and binding obligation of the Seller,
enforceable against the Seller, in accordance with its terms;
(p) to the best knowledge of Seller, the Web site and the Assets do not
contain any viruses and the Seller have received no notice and has no
knowledge of any claim of any virus;
(q) there is no action, suit, litigation, hearing, proceeding or investigation
pending or, to the best of the Seller's knowledge, threatened, which could
have an adverse effect on the business, operations, prospects, earnings,
ownership or condition (financial or otherwise) of the Web site or the
Assets;
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(r) there have been not less than 4,497,368 and 4,961,211 "page views" of the
Web site respectively (excluding "mirrored sites") for each of the
calendar months of June, 2003 and May, 2003 respectively;
(s) there have been not less than 654,759 and 607,062 unique users of the Web
site as of June 30, 2003 and May 31, 2003, respectively;
(t) there has been $$440,070, $344,171 and $468,901 revenues for the Web site,
pursuant to GAAP for the calendar months of June, 2003, May, 2003 and
April, 2003 respectively;
(u) there have been not less than 391,353 and 390,407 total subscribers to the
E-mail Newsletters (excluding "mirrored sites") as of June 30, 2003 and
May 31, 2003, respectively;
(v) no consent, approval or authorization from any third party or any
governmental authorities is required in connection with the Seller's
execution and delivery of this Agreement or the performance of its
obligations hereunder;
(w) the Seller is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware and has the full
corporate power and authority to execute and deliver this Agreement and
consummate the transactions hereunder;
(x) the execution and delivery of this Agreement, or the consummation of the
transaction hereunder will not conflict with, or violate, (i) any
provision of the certificate of incorporation, bylaws or board of director
or shareholder resolutions of the Seller; or (ii) any contract of the
Seller in regard to the Assets;
(y) the representations and warranties of the Seller in this Agreement do not
contain any untrue statement of material fact or omit to state a material
fact necessary in order to make such representations and warranties, in
light of the circumstances under which they are made, not misleading;
(z) except as listed on Exhibit H, the Seller has not authorized any "mirror
sites" and is not aware of any unauthorized "mirror sites" for the Web
site or content of the Web site;
(aa) Seller is not aware of any information that is likely to have, or result
in, a material adverse effect on the Web site or Assets or the future
prospects of the Web site or Assets.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
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Purchaser represents and warrants to the Seller that Purchaser has full
legal capacity to enter into this Agreement; and that the execution and
performance of this Agreement by Purchaser (i) will not conflict with, or
violate any provision of the certificate of incorporation, bylaws or board of
director or shareholder resolutions of the Purchaser, and (ii) will not infringe
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upon any rights of any person or entity nor violate any other agreement or
contract to which Purchaser is a party. This Agreement constitutes the valid and
binding obligation of the Purchaser, enforceable against the Purchaser, in
accordance with its terms. No consent, approval or authorization from any third
party or any governmental authorities is required in connection with the
Purchaser's execution and delivery of this Agreement or the performance of its
obligations hereunder. The Purchaser Stock, as defined below, when issued to
Seller in accordance with the terms of this Agreement will be duly authorized,
validly issued and fully paid and will be free of encumbrances and restrictions
on transfer other than restrictions imposed by the securities laws and the
Registration Rights Agreement, as defined below. Purchaser is not aware of any
nonpublic information that is likely to have, or result in, a material adverse
effect on the Purchaser Stock. The representations and warranties of the
Purchaser in this Agreement do not contain any untrue statement of material fact
or omit to state a material fact necessary in order to make such representations
and warranties, in light of the circumstances under which they are made, not
misleading.
6. INDEMNITY/SURVIVAL.
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The Seller agrees to fully defend, indemnify and hold the Purchaser and its
parent, subsidiaries, officers, directors, employees and affiliates
(collectively the "Purchaser Indemnitees") harmless from, and against, any and
all loses, judgments, obligations, settlements, costs, damages, expenses,
liabilities, and other claims, including attorneys' fees and court costs, (the
"Damages") that are in any way connected to the Excluded Liabilities, or the
Seller's material breach of any representation, warranty, covenant or any other
term of this Agreement, provided, however, Seller shall not have any obligations
to indemnify the Purchaser from and against any Damages in excess of two million
two hundred and fifty thousand dollars ($2,250,000). All representations and
warranties of Seller shall survive the Closing and continue in full force and
effect for a period of twelve (12) months from the Closing Date, after which
they will expire. The foregoing indemnity shall be the sole and exclusive remedy
of the Purchaser Indemnitees for any Damages of any sort related to the Excluded
Liabilities or this Agreement. Recovery of any amount by a Purchaser Indemnitee
against Seller pursuant to the terms of this Section 6 shall be had first, from
the Escrow, and second to the extent the Escrow is insufficient, directly from
Seller.
Purchaser agrees to fully defend, indemnify and hold the Seller and its
parent, subsidiaries, officers, directors, employees and affiliates
(collectively the "Seller Indemnitees") harmless from, and against, any and all
Damages suffered or incurred by Seller or any Seller Indemnitee that are in any
way connected to the Assumed Liabilities or any breach by Purchaser of this
Agreement for a period of twelve (12) months from the Closing Date, after which
they will expire.; PROVIDED HOWEVER, that nothing in this section will impose on
Purchaser any duty to indemnify Seller for any Excluded Liabilities.
As used herein, an "Indemnified Party" means a party seeking
indemnification pursuant to this Section, as applicable, and the term
"Indemnifying Party" means the party who is obligated to provide indemnification
under this Section, as applicable. The Indemnified Party agrees to
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give the Indemnifying Party prompt written notice of any event, or any claim,
action, suit, demand, assessment, investigation, arbitration or other proceeding
by or in respect of a third party (a "Third-Party Claim") of which it has
knowledge, for which such Indemnified Party is entitled to indemnification under
this Section 6. In the case of a Third-Party Claim, the Indemnifying Party will
have the right to direct, through counsel of its own choosing, the defense or
settlement of any such Third-Party Claim at its own expense. In such case the
Indemnified Party may participate in such defense, but in such case the expenses
of the Indemnified Party will be paid by the Indemnified Party. The Indemnified
Party will promptly provide the Indemnifying Party with access to the
Indemnified Party's records and personnel relating to any such Third-Party Claim
during normal business hours and will otherwise cooperate with the Indemnifying
Party in the defense or settlement of such Third-Party Claim, and the
Indemnifying Party will reimburse the Indemnified Party for all its reasonable
out-of-pocket costs and expenses incurred in providing such access, personnel
and cooperation. Upon assumption of the defense of any such Third-Party Claim by
the Indemnifying Party, the Indemnified Party will not pay, or permit to be
paid, any part of any claim or demand arising from such Third-Party Claim,
unless the Indemnifying Party consents in writing to such payment (which consent
will not be unreasonably withheld) or unless a final judgment from which no
appeal may be taken by or on behalf of the Indemnified Party is entered against
the Indemnified Party for such liability. No such Third-Party Claim may be
settled by the Indemnifying Party without the written consent of the Indemnified
Party, which consent will not be unreasonably withheld. If the Indemnifying
Party fails to defend or fails to prosecute or withdraws from such defense, then
the Indemnified Party will have the right to undertake the defense or settlement
thereof, at the Indemnifying Party's expense. If the Indemnified Party assumes
the defense of any such Third-Party Claim pursuant to this Section and proposes
to settle such Third-Party Claim prior to a final judgment thereon or to forgo
appeal with respect thereto, then the Indemnified Party will give the
Indemnifying Party prompt written notice thereof and the Indemnifying Party will
have the right to participate in the settlement or assume or reassume the
defense of such Third-Party Claim.
7. PURCHASE PRICE AND OTHER CONSIDERATION.
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In consideration of the purchase of the Assets, the assumption of the
Assumed Liabilities and of the Seller's representations, warranties, covenants
and agreements as set forth in this Agreement, Purchaser agrees to pay the
Seller the following (the "Purchase Price"):
i. A total cash payment of two million two hundred and fifty thousand
dollars ($2,250,000) (the "Cash Payment") to be paid as follows:
A. One million nine hundred twelve thousand five hundred dollars
($1,912,500) less any amounts paid directly by Purchaser at
Closing to Comerica to satisfy the conditions of Section 4(a) of
this Agreement, upon execution of this Agreement by the parties,
together with any Exhibits, by check or wire transfer to an
account designated by the Seller;
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B. A cash escrow equal to fifteen percent (15%) of the Cash Payment,
in the amount of three hundred thirty seven thousand five hundred
dollars ($337,500), as may later be adjusted pursuant to the
post-closing Purchase Price adjustment below, to be held
according to the terms of the Escrow Agreement, and delivered to
the Escrow Agent (as defined in the Escrow Agreement, attached
hereto, and made a part hereof, as Exhibit I) (the "Escrow");
ii. Two hundred thousand (200,000) shares of restricted common stock, par
value $0.01 per share, of the Purchaser (the "Purchaser Stock"),
pursuant to the terms of the Registration Rights Agreement, attached
hereto, and made a part hereof, as Exhibit J.
iii. Assumption of the Assumed Liabilities.
iv. The post-closing Purchase Price adjustment, to be funded out of
Escrow, shall be as follows:
A. As soon as reasonably practical after the signing of this
Agreement (the "Closing Date"), but in no event more than thirty
(30) days after the Closing Date, the Purchaser shall prepare and
deliver to Seller a balance sheet of the Web site as of the close
of business on the Closing Date (the "Closing Date Balance
Sheet"), together with (i) a draft schedule (the "Draft
Adjustment Report") showing the Purchaser's computation of the
Net Asset Adjustment (as defined below) as of the Closing Date
and the Purchaser's proposed Purchase Price adjustment to be made
in accordance with this section and the Net Asset Adjustment, and
upon request (ii) provide reasonable detailed back-up information
used to prepare the Closing Date Balance Sheet and the Draft
Adjustment Report. The Closing Date Balance Sheet shall be
prepared in accordance with GAAP, applied on a consistent basis.
"Net Asset Adjustment" means, with respect to the Web site, any
increase, or decrease, as of the Closing Date , in the amount
that assets excluding cash, but including net accounts receivable
and other assets, exceeds the Assumed Liabilities (provided such
assets are included in the Assets). Per the March 31, 2003
Balance Sheet the total non-cash assets equaled one million five
hundred eighty seven thousand one hundred eighty seven dollars
($1,587,187), including eight hundred twenty seven thousand three
hundred and one dollars ($827,301) of net accounts receivable and
seven hundred fifty nine thousand eight hundred and eighty six
dollars ($759,886) of other assets, and the Assumed Liabilities
consisted of nine hundred eighty three thousand nine hundred and
seventy three ($983,973) of accounts payable and accruals and
five hundred ninety nine thousand six hundred eighty eight
dollars ($599,688) of deferred revenue. Any decrease in assets or
increase in Assumed Liabilities, from the figures above, shall
result in a comparable decrease in the Purchase Price and any
increase in assets or decrease in Assumed Liabilities,
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from the figures above, shall result in a comparable increase in
the Purchase Price provided such assets are included in the
Assets.
B. During the thirty (30) day-period after the Seller's receipt of
the Closing Date Balance Sheet and the Draft Adjustment Report,
the Seller and the Purchaser shall cooperate with each other to
resolve any disagreements between them with respect to the Draft
Adjustment Report and Purchaser shall provide Seller with any
additional detailed back-up information reasonably requested by
Seller. In the event the Seller and the Purchaser agree on the
Draft Adjustment Report and the proposed Net Asset Adjustment set
forth therein (such agreement to be indicated in writing by the
Seller and the Purchaser by signing such Draft Adjustment
Report), then the Draft Adjustment Report shall be deemed to be
the final Adjustment Report (the "Adjustment Report"), and the
Net Asset Adjustment set forth therein shall be conclusive and
binding upon the Purchaser and the Seller and shall have the
effect of adjusting the Purchase Price as set forth therein.
C. In the event the Seller and the Purchaser shall not reach
agreement on all aspects of the Draft Adjustment Report,
including with respect to the Net Asset Adjustment set forth
therein, within such thirty (30) day period after the Seller's
receipt of the Closing Date Balance Sheet and the Draft
Adjustment Report, the Seller shall promptly (but in no event
later than five (5) days following the expiration of such thirty
(30) day period) prepare a written notice of its objections (the
"Objection Notice"): (i) objecting in good faith to the Closing
Date Balance Sheet or the Net Asset Adjustment set forth in the
Draft Adjustment Report, (ii) setting forth the items being
disputed and the reasons therefor, and (iii) specifying the
Seller's calculation of the Net Asset Adjustment as of the
Closing Date and the adjustment to be made in accordance with
this section. In connection with the preparation of the Objection
Notice, the Purchaser shall provide reasonable cooperation and
grant the Seller's accountants and other representatives
reasonable access to all of the books and records of the Web
site. If the Seller fails to deliver timely notice of its
objection to the Closing Date Balance Sheet or the Net Asset
Adjustment as set forth in the Draft Adjustment Report, then the
Draft Adjustment Report shall be deemed to be the Adjustment
Report, and the Net Asset Adjustment set forth therein shall be
conclusive and binding upon the Purchaser and the Seller and
shall have the effect of adjusting the Purchase Price as set
forth therein.
D. The matters in dispute shall be determined by a nationally
recognized independent public accounting firm mutually
satisfactory to the Purchaser and the Seller (the "Arbiter"), and
the Purchaser and the Seller shall promptly deliver to the
Arbiter the Closing Date Balance Sheet, the Draft Adjustment
Report and Seller's Objection Notice. Promptly, but not later
than thirty (30) days after the acceptance of its appointment,
the Arbiter shall determine
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(based solely on presentations by the Seller and the Purchaser to
the Arbiter and not by independent review) only those items in
dispute and shall render a report as to its resolution of such
items and the resulting calculation of the Net Asset Adjustment.
For purposes of the Arbiter's determination, the amounts to be
included shall be the appropriate amounts from the Closing Date
Balance Sheet or the Draft Adjustment Report, as the case may be,
as to items that are not in dispute, and the amounts determined
by the Arbiter, as to items that are submitted for resolution by
the Arbiter. In resolving any disputed item, the Arbiter may not
assign a value to such item greater than the greatest value for
such item claimed by either party in the Closing Date Balance
Sheet, Draft Adjustment Report or Objection Notice or less than
the lowest value for such item claimed by either party in the
Closing Date Balance Sheet, Draft Adjustment Report or Objection
Notice. The Purchaser and the Seller shall cooperate with the
Arbiter in making its determination and such determination shall
be conclusive and binding upon the Purchaser and the Seller.
E. If there is a substantially prevailing party (as determined by
the Arbiter), then the reasonable fees and expenses of the
Arbiter shall be paid by the other party. If there is no
substantially prevailing party, then the Purchaser and the Seller
shall each bear one-half of the fees and expenses of the Arbiter.
F. Any Net Asset Adjustment pursuant to this section shall be paid
(i) initially out of the Escrow or (ii) as necessary, by either
party, within five (5) business days after the final
determination of the Net Asset Adjustment, in accordance with
this section including, as needed, to maintain the Escrow;
provided that any payments required to maintain the Escrow (at
15% of the Cash Payment as adjusted by the Net Asset Adjustment)
shall be made by depositing a number of shares of the Purchaser
Stock into the Escrow equal to the amount of such required
payment divided by the average trading price of the Purchaser
Stock over the five day period prior to the Closing.
8. CLOSING.
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The closing of the transactions contemplated hereby (the "Closing") shall
be upon mutual execution of this Agreement by the parties, together with any and
all Exhibits (the "Closing Date") and shall be held at the offices of Purchaser.
9. JURISDICTION.
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The execution, performance and interpretation of this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without regard to Delaware's choice of law rules.
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10. NOTICES.
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All notices required or permitted to be given under this Agreement must be
in writing, and will be deemed given on the date of receipt if delivered in
person, or on the date of mailing if mailed by overnight courier or registered
or certified mail, postage prepaid, return receipt requested, to the applicable
party, in the case of Purchaser, at its address indicated on the first page of
this Agreement, and in the case of Seller at the following address: x/x Xxxxxx
Xxxxxxx Xxxxxxx Partners, Attn: CFO , 0 Xxxxx Xxxx, 0xx Xxxxx , Xxx Xxxxxxxxx,
XX 00000. Either party may change its address for purposes of this Agreement by
giving five (5) business days' prior written notice of such change of address to
the other party in the manner described in this Section.
11. BINDING EFFECT; ASSIGNMENT.
--------------------------
The Seller shall not assign any of its rights, or delegate any of its
obligations under this Agreement to any third party without the consent of
Purchaser. This Agreement is binding upon, and shall inure solely to the benefit
of, the parties hereto and their respective heirs, personal representatives,
successors and permitted assigns. This Agreement is not intended to benefit, and
shall not be construed as benefiting, any third party, and no third party shall
have standing to enforce any provision of this Agreement.
12. MODIFICATION.
------------
No purported modification, amendment or waiver of any term of this
Agreement shall be effective unless it is in writing, subsequent to this
Agreement and signed by both parties hereto.
13. CONFIDENTIALITY.
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The financial terms of this Agreement shall be confidential and shall not
be disclosed by either party without the other party's prior written consent
except as may be required by law; provided that a party may disclose such terms
to its employees, directors, stockholders, creditors, and other interest
holders. The Seller shall not issue a press release or make any other public
statements related to this Agreement or the transaction incorporated herein
without the express written consent of Purchaser.
14. EXPENSES.
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Except as expressly set forth in this Agreement, each party to this
Agreement shall bear all of its legal, accounting, investment banking (if any),
and other fees and expenses incurred by it or on its behalf in connection with
the transactions contemplated by this Agreement.
15. COUNTERPART.
-----------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same agreement. Facsimile copies shall also be deemed originals.
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16. SEVERABILITY.
------------
The Seller also agrees that the provisions of this Agreement are severable
and separate and that the unenforceability of any specific provision or part of
any provision shall not affect the validity of any other provision or term of
this Agreement.
17. ENTIRE AGREEMENT.
----------------
This Agreement, the Seller Disclosure Schedule, the Escrow Agreement and
the Registration Rights Agreement, together with each of the exhibits and
schedules hereto and thereto, constitute the entire, final and exclusive
agreement of Purchaser and the Seller with respect to the subject matter hereof
and supersedes any and all prior and contemporaneous understandings or
agreements, whether oral or written, concerning such subject matter. Each party
acknowledges that it enters into this Agreement without relying on any statement
by the other party which is not specifically set forth in this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.
JUPITERMEDIA CORPORATION ("Purchaser") XXXX.XXX, INC. ("Seller")
By: By:
------------------------------- --------------------------------
Title: Title:
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Printed Name: Printed Name:
--------------------- ----------------------
Date: Date:
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