EXHIBIT 2.12
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
IXL HOLDINGS, INC.,
IXL-SAN FRANCISCO, INC.
GREEN ROOM PRODUCTIONS, L.L.C.,
AND
THE CONTROLLING MEMBERS
DATED AS OF FEBRUARY 5, 1998
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT is entered into this 5th day of February,
1998, by and between GREEN ROOM PRODUCTIONS, L.L.C., a Virginia limited
liability company ("Seller"), IXL-SAN FRANCISCO, INC., a Delaware corporation
("Buyer"), IXL HOLDINGS, INC., a Delaware corporation ("IXL"), and certain of
the members of Seller listed on the signature page hereto (the "Controlling
Members").
R E C I T A L S:
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A. Seller is engaged in the business of web page design and internet
hosting (the "Business").
B. The Controlling Members own 62.88% of the issued and outstanding
membership interests of Seller.
C. Seller is willing to sell to Buyer and Buyer is willing to purchase
from Seller, substantially all of the assets, business, properties and rights of
Seller related to the conduct of the Business on the terms and subject to the
conditions set forth herein.
D. Buyer is a wholly owned subsidiary of IXL.
E. It is anticipated that following the Closing (as herein defined) the
Controlling Members will liquidate the Seller and distribute the consideration
received pursuant to this Agreement to its members (the "Green Room Members")
who will became stockholders in IXL.
NOW, THEREFORE, in consideration of the mutual covenants, benefits,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
ARTICLE I
PURCHASE AND SALE
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1.1 Purchase and Sale. Contemporaneously with the execution and delivery
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of this Agreement, and upon the terms and conditions hereof, Seller shall sell
and deliver to Buyer, and Buyer shall purchase, all of Seller's right, title and
interest in and to the Equipment (as defined in Section 2.11 hereof), the
Intellectual Property (as defined in Section 2.12(a) hereof), the Software (as
defined in Section 2.12(b) hereof), the Leases (as defined in Section 2.14
hereof), the Contracts (as defined in Section 2.15 hereof), the Permits (as
defined in Section 2.21 hereof), the Accounts Receivable (as defined in Section
2.23 hereof), all moneys of Seller relating to the Business, whether in the form
of cash, cash equivalents, marketable securities, short term investments or
deposits in bank of other financial institution accounts of any kind (the
"Cash"), and all other assets, tangible and intangible, used or useable in the
operation of the Business and not otherwise
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specifically referred to in this Agreement (the "Miscellaneous Assets"),
excepting only those assets listed on Schedule 1.1 (the "Retained Assets"). The
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Equipment, the Intellectual Property, the Software, the Leases, the Contracts,
the Permits, the Accounts Receivable, the Cash and the Miscellaneous Assets are
collectively referred to herein as the "Purchased Assets." Seller shall not
transfer, convey or assign to Buyer, but shall retain, all of its right, title
and interest in and to the Retained Assets.
1.2 The Closing. The closing of the aforementioned purchase and sale (the
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"Closing") shall take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, A Professional
Corporation, One Buckhead Plaza, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the parties may mutually agree. The
date upon which the Closing occurs is hereinafter referred to as the "Closing
Date."
1.3 Purchase Price. As consideration for the purchase of the Purchased
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Assets, Buyer shall pay to Seller an amount equal to $1,800,000, (the "Purchase
Price"), payable as follows:
(a) 344,270 shares of validly issued, fully paid and nonassessable
Class B Common Stock of IXL, $.01 par value (the "IXL Stock"), valued at $5.00
per share as of the date hereof (subject to Section 7.9 hereof) to be delivered
to Buyer at the Closing; and
(b) cash in the amount of $78,649.
1.4 Assumption of Liabilities. In addition to the payment of the Purchase
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Price, as additional consideration for the purchase of the Purchased Assets,
Buyer shall assume: (a) the liabilities of Seller listed on Schedule 1.4 hereto;
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and (b) the obligations of Seller under the Contracts and the Leases, in each
case arising from and accruing with respect to the operation of the Business
after the Closing Date, except any Contracts or Leases included in the Retained
Assets (the "Assumed Liabilities"). Seller shall be responsible for all the
obligations and liabilities of Seller whether now existing or previously or
hereafter incurred other than the Assumed Liabilities, including but not be
limited to (a) all taxes that result from or have accrued in connection with the
operation of the Business prior to the Closing Date except to the extent any
such liabilities are listed on Schedule 1.4; (b) liabilities and obligations
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arising under Contracts and Leases transferred to Buyer in accordance with this
Agreement to the extent such liabilities and obligations arise during or relate
to or have accrued in connection with any period prior to the Closing except to
the extent any such liabilities are listed on Schedule 1.4; (c) all liabilities
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and obligations accruing with respect to the operation of the Business prior to
the Closing except to the extent any such liabilities are listed on Schedule
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1.4; (d) all liabilities related to the Green Room Benefit Plans; and (e) all
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liabilities and obligations of Seller under this Agreement and any other
agreement entered into in connection herewith (collectively, the "Retained
Liabilities").
1.5 Allocation of Purchase Price. The Purchase Price will be allocated
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among the items of Equipment in accordance with their respective net book
values, as reflected on the most recent Seller Financial Statement (as defined
in Section 2.6 hereof). The remainder of the Purchase Price will be allocated
to goodwill and other intangible assets. Each of the parties hereto agrees to
report the federal, state and local income and other tax consequences of the
transactions contemplated by this Agreement in a manner consistent with such
allocation.
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1.6 Other Deliveries. In addition to the foregoing, at the Closing, each
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of Buyer, IXL, and Seller shall make the deliveries described in Article V
hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller and the Controlling Members, jointly and severally, represent and
warrant to Buyer, which representations and warranties shall survive the Closing
in accordance with Section 7.1 of this Agreement, as follows:
2.1 Organization and Qualification. Seller is a limited liability company
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duly organized, validly existing and in good standing under the laws of the
State of Virginia. Seller has the requisite power and authority to carry on the
Business as it is now being conducted and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified or
licensed would not be reasonably expected to have a material adverse effect on
the Seller's operations, assets or financial condition. True and complete
copies of (x) the Articles of Organization, and (y) the Amended and Restated
Operating Agreement of the Seller, dated as of April 1, 1997 (the "Operating
Agreement"), both as in effect on the date hereof, are attached as Schedule 2.1
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hereto.
2.2 Authority. Seller has the necessary power and authority to execute
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and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby by Seller have been duly and validly
authorized and approved by the Controlling Members in accordance with the terms
of the Operating Agreement and applicable law, and no other proceedings on the
part of Seller or the Controlling Members are necessary to authorize or approve
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Seller and each Controlling
Member, and assuming the due authorization, execution and delivery by Buyer and
IXL, constitutes the valid and binding obligation of Seller and each Controlling
Member, enforceable against Seller and each Controlling Member in accordance
with its terms subject, in each case, to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application relating to or affecting
creditors' rights and to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing.
2.3 Membership of Seller. The membership interests of Seller are owned by
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the Green Room Members as set forth on Schedule 2.3 hereto.
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2.4 Subsidiaries. Seller has no subsidiaries and does not otherwise own
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or control, directly or indirectly, any equity interest in, or any security
convertible into an equity interest in, any corporation, partnership, limited
liability company, joint venture, association or other business entity (any of
the foregoing, an "Entity").
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2.5 No Conflicts, Required Filings and Consents. Except as set forth on
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Schedule 2.5 hereto, none of the execution and delivery of this Agreement by
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Seller or the Controlling Members, the consummation by Seller and the
Controlling Members of the transactions contemplated hereby or compliance by
Seller with any of the provisions hereof will:
(a) conflict with or violate the Articles of Organization of Seller or
the Operating Agreement;
(b) result in a violation of any statute, ordinance, rule, regulation,
order, judgment or decree applicable to Seller or the Purchased Assets;
(c) result in a violation or breach of, or constitute a default (or an
event that, with notice or lapse of time or both, would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, contract, agreement,
arrangement, lease, license, permit, judgment, decree, franchise or other
instrument or obligation to which Seller is a party or by which the Purchased
Assets may be bound or affected;
(d) result in the creation of any lien, charge, security interest,
pledge, option, right of first refusal, voting proxies or other voting agreement
or encumbrance of any kind or nature (any of the foregoing, a "Lien") on any of
the Purchased Assets; or
(e) require any consent, waiver, license, approval, authorization,
order, permit, registration or filing with, or notification to (any of the
foregoing being a "Consent"), of (i) any government or subdivision thereof,
whether domestic, foreign or multinational, or any administrative, governmental,
or regulatory authority, agency, commission, court, tribunal or body, whether
domestic, foreign or multinational (a "Governmental Entity"); or (ii) any other
individual, corporation, trust, partnership, limited liability company or other
entity (collectively, a "Person").
2.6 Financial Statements. Seller has heretofore furnished Buyer with a
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true and complete copy of the unaudited financial statements of Seller for the
years ending December 31, 1996 and 1997, (collectively herein referred to as the
"Seller Financial Statements"). The Seller Financial Statements present fairly
the financial position and operating results of Seller as of the dates, and
during the periods, indicated therein and have been prepared on a consistent
basis.
2.7 Absence of Changes. Except as provided in Schedule 2.7 hereto, since
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December 31, 1997, (a) Seller has not entered into any transaction affecting the
Purchased Assets that was not in the ordinary course of business; (b) there has
been no material damage, destruction or loss of any of the Purchased Assets
(whether or not covered by insurance); (c) there has been no distribution to any
member of Seller in respect of his membership interest, whether in cash or
property, and no purchase or redemption of the membership interest of any member
of Seller; (d) Seller has not failed to satisfy any of its debts, obligations or
liabilities related to the Business or the Purchased Assets as the same become
due and owing; (e) there have been no capital expenditures in excess of $10,000
for any single item, or $25,000 in the aggregate; (f) Seller has not ceased to
transact business with any customer that, as of the date of such cessation,
represented more than 5% of the annual gross revenues of Seller; (g) there has
been no termination or resignation of any key
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employee or officer of Seller, and to the knowledge of Seller and the Green Room
Members, no such termination or resignation is threatened; (h) there has been no
change in accounting methods or practices or Seller, or revaluation of any of
the Purchased Assets (other than Accounts Receivable (as defined in Section 2.23
hereof) written down in the ordinary course of business that are not in excess
of $10,000 for any single Seller Account Receivable and $25,000 in the
aggregate); (i) there has been no amendment or termination of any material oral
or written contract, agreement or license related to the Business, to which
Seller is a party or by which it is bound, except in the ordinary course of
business, or except as expressly contemplated by this Agreement; (j) there has
been no agreement or commitment to do any of the foregoing; and (k) there has
been no other event or condition pertaining to and materially affecting the
Purchased Assets or the ability of Seller to consummate the transactions
contemplated by this Agreement.
2.8 Undisclosed Liabilities. Seller does not have any debt, liability or
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obligation of any kind, whether accrued, absolute or otherwise, including,
without limitation, any liability or obligation on account of taxes or any
governmental charges or penalty, interest or fines, except (a) liabilities
incurred in the ordinary course of business after December 31, 1997 that would
not, whether individually or in the aggregate, have a material adverse impact on
the business or financial condition of the Seller; (b) liabilities reflected on
the Seller Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated by this Agreement.
2.9 Purchased Assets. The Purchased Assets include all of the assets,
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properties and rights of every type and description, real, personal and mixed,
tangible and intangible, that are necessary for, or used in, the conduct of the
Business as conducted by Seller.
2.10 Title to Properties. Except as set forth on Schedule 2.10 hereto,
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Seller has good and marketable title to all of the Purchased Assets (other than
leasehold interests), and good title to all leasehold interests included as part
of the Purchased Assets, in each case, free and clear of any and all Liens other
than liens for taxes not yet due and payable.
2.11 Equipment. Seller has heretofore furnished IXL with a true and
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correct list of all items of tangible personal property (including, without
limitation, computer hardware) necessary for or used in the operation of the
Business in the manner in which it has been and is now operated by Seller (the
"Equipment"), except for personal property having a net book value of less than
$10,000, all of which is included as part of the Purchased Assets. Each item of
Equipment included in the Purchased Assets is in good condition and repair,
ordinary wear and tear excepted.
2.12 Intellectual Property.
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(a) Seller has heretofore furnished IXL with a true and complete list
of all proprietary technology, trade secrets, know-how, patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service ▇▇▇▇ rights, and copyrights used or required to be used by Seller in the
operation of the Business (the "Intellectual Property"), except for any
Intellectual Property which is not material to the Business, all of which is
included as part of the Purchased Assets. Seller owns, or is validly licensed
or otherwise has the right to use or exploit, all of the Intellectual Property,
free of any obligation to make any payment (whether of a royalty, license fee,
compensation or otherwise). No claims are pending or, to the knowledge of
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Seller, threatened, that Seller is infringing or otherwise adversely affecting
the rights of any Person with regard to any of the Intellectual Property. Seller
has used its reasonable best efforts to protect its rights in the Intellectual
Property and, to the knowledge of Seller, no Person is infringing the rights of
Seller with respect to any Intellectual Property. No intangible property is
required for the conduct of the Business other than the Intellectual Property.
To the knowledge of Seller, use of the name "Green Room Productions, Inc." does
not infringe upon the rights of any Person.
(b) Seller has heretofore furnished IXL with a true and complete list
of all computer software used or required to be used by Seller in the conduct
of the Business (the "Software"), except for Software which is not material to
the Business, all of which is included as part of the Purchased Assets. Except
as set forth on Schedule 2.12 hereto, Seller currently licenses, or otherwise
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has the legal right to use, all of the Software (including any upgrades,
alterations or enhancements with respect thereto), and all of the Software is
being used in compliance with any applicable licenses or other agreements.
2.13 Real Property. Seller owns no real property.
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2.14 Leases. Schedule 2.14 hereto sets forth a list of all leases pursuant
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to which Seller leases, as lessor or lessee, real or personal property used in
operating the Business or otherwise (the "Leases"), all of which are included as
part of the Purchased Assets. Copies of the Leases, which have previously been
provided to IXL, are true and complete copies thereof. All of the Leases are
valid, binding and enforceable in accordance with their respective terms, and
there is not under any such Lease any existing default by Seller, or, to the
knowledge of Seller by any other party thereto, or any condition or event of
that, with notice or lapse of time or both, would constitute a default. Seller
has not received notice that the lessor of any of the Leases intends to cancel,
suspend or terminate the Leases or to exercise or not exercise any options under
any of the Leases. Except as set forth on Schedule 2.14, all of the Leases are
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assignable to Buyer without the consent or approval of any other person in
connection with the transactions contemplated by this Agreement.
2.15 Contracts. Schedule 2.15 hereto sets forth a true and complete list
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of all contracts, agreements and commitments (whether written or oral) to which
Seller is, directly or indirectly, a party (in its own name or as a successor in
interest), or by which it or the Purchased Assets are otherwise bound,
including, without limitation, any service agreements, customer agreements,
supplier agreements, agreements to lend or borrow money, shareholder agreements,
employment agreements, agreements relating to the Intellectual Property and the
like (collectively, the "Contracts"), except only those Contracts which involve
less than $10,000 and are cancelable , without penalty, on no more than 90 days
notice, all of which are included as part of the Purchased Assets.
True and complete copies of each Contract required to be listed on Schedule
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2.15 (or a true and complete narrative description of any oral Contract) have
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previously been provided to IXL. Neither Seller nor, to the knowledge of
Seller, any other party to any of the Contracts, (x) is in default under (nor
does there exist any condition that, with notice or lapse of time or both, would
cause such a default under) any of the Contracts, or (y) has waived any right it
may have under any of the Contracts, the waiver of which would have a material
adverse effect on the business, assets or financial condition of Seller. All of
the Contracts constitute the valid and binding obligation of
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Seller, enforceable in accordance with their respective terms, and, to the
knowledge of Seller and the other parties thereto. Except as set forth on
Schedule 2.15 all of the Contracts are assignable to Buyer without the consent
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or approval of any other Person in connection with the transactions contemplated
by this Agreement.
2.16 Payroll Information. Seller has previously provided IXL with a true
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and complete copy of the most recent payroll report of Seller, showing all
current employees of Seller and their current levels of compensation, other than
bonuses and other extraordinary compensation. Seller has paid all compensation
required to be paid to employees of Seller on or prior to the date hereof.
2.17 Litigation. Except as set forth on Schedule 2.17 hereto, there is no
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suit, action, claim, investigation or proceeding pending or, to the knowledge of
Seller, threatened against or affecting Seller or the Purchased Assets, nor is
there any judgment, decree, injunction or order of any applicable Governmental
Entity or arbitrator outstanding against Seller that, either individually or in
the aggregate, would have a material adverse effect on the Purchased Assets or
the financial condition of Seller.
2.18 Employee Benefit Plans/Labor Relations.
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(a) Except as disclosed in Schedule 2.18 hereto, there are no employee
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benefit plans, agreements or arrangements maintained by Seller, including,
without limitation, (i) "employee benefit plans," within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (ii) affirmative action plans; (iii) current or deferred
compensation, pension, profit sharing, vacation or severance plans or programs;
or (iv) medical, hospital, accident, disability or death benefit plans
(collectively, "Green Room Benefit Plans"). All Green Room Benefit Plans are
administered in accordance with, and are in compliance with, all applicable laws
and regulations. No default exists with respect to the obligations of Seller
under any Green Room Benefit Plans.
(b) Seller is not a party to any collective bargaining agreement, no
such agreement determines the terms and conditions of employment of any employee
of Seller, no collective bargaining agent has been certified as a representative
of any of the employees of Seller, no representation campaign or election is now
in progress with respect to any employee of Seller and there are no labor
disputes, grievances, controversies, strikes or requests for union
representation pending, or, to the knowledge of Seller, threatened, relating to
or affecting the Business. To the knowledge of Seller, no event has occurred
that could give rise to any such dispute, controversy, strike or request for
representation.
2.19 ERISA.
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(a) All Green Room Benefit Plans that are subject to ERISA have been
administered in accordance with, and are in compliance with, the applicable
provisions of ERISA. Each of Green Room Benefit Plans that is intended to meet
the requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), has been determined by the Internal Revenue Service to
meet such requirements within the meaning of such provision. No Green Room
Benefit Plan is subject to Title IV of ERISA or Section 412 of the Code. Seller
has not
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engaged in any non-exempt "prohibited transactions," as such term is defined in
Section 4975 of the Code or Section 406 of ERISA, involving Green Room Benefit
Plans that would subject Seller to the penalty or tax imposed under Section
502(i) of ERISA or Section 4975 of the Code. Seller has not engaged in any
transaction described in Section 4069 of ERISA within the last five years.
Except as disclosed in Schedule 2.19 hereto, neither the execution and delivery
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of this Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including, without limitation, severance,
unemployment compensation or golden parachute) becoming due to any director or
other employee of Seller, (ii) increase any benefits otherwise payable under any
Green Room Benefit Plan or (iii) result in the acceleration of the time of
payment or vesting of any such benefits to any extent.
(b) No notice of a "reportable event," within the meaning of Section
4043 of ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for any Green Room Benefit Plan that is an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is intended to meet the requirements of Section 401(a) of the Code (a
"Pension Plan"), or by any entity that is considered one employer with Seller
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA Affiliate"),
within the 12-month period ending on the date hereof. Seller has not incurred
any liability to the Pension Benefit Guaranty Corporation in respect of any
Green Room Benefit Plan that remains unpaid.
2.20 Taxes. Seller has duly and timely filed all federal, state and local
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income, franchise, excise, real and personal property and other tax returns and
reports, including extensions, required to have been filed by Seller on or prior
to the date hereof. Seller has duly and timely paid all taxes and other
governmental charges, and all interest and penalties with respect thereto,
required to be paid by Seller (whether by way of withholding or otherwise) to
any federal, state, local or other taxing authority (except to the extent the
same are being contested in good faith, and adequate reserves therefore have
been provided in the applicable Seller Financial Statement). As of the date
hereof, all deficiencies proposed as a result of any audits have been paid or
settled. There are, and after the date of this Agreement will be, no tax
deficiencies (including penalties and interest) of any kind assessed against or
relating to Seller with respect to any taxable periods ending on or before, or
including, the Closing Date of a character or nature that would result in Liens
or claims on any of the Purchased Assets or on Buyer's title or use of the
Purchased Assets or that would result in any claim against Buyer.
2.21 Compliance with Applicable Laws. Seller holds all permits, licenses,
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variances, exemptions, orders and approvals of all Governmental Entities
necessary to own, lease or operate all of the Purchased Assets, as appropriate,
and to carry on the Business as now conducted (the "Permits"), except for such
permits which are not material to the Business. To the knowledge of Seller,
Seller is in material compliance with all applicable laws, ordinances and
regulations and the terms of the Permits, and all such Permits are assignable to
Buyer in connection with the transactions contemplated by this Agreement.
Schedule 2.21 hereto sets forth a list of the Permits, a true and correct copy
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of each of which has been provided to IXL.
2.22 Brokers. Except as set forth on Schedule 2.22 hereto, no broker or
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finder is entitled to any broker's or finder's fee or other commission in
connection with the transactions contemplated by this Agreement as a result of
arrangements made by or on behalf of Seller.
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2.23 Accounts Receivable. All accounts, notes, contracts and other
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receivables of Seller included in the Purchased Assets (collectively, "Accounts
Receivable") were acquired by Seller in the ordinary course of business arising
from bona fide transactions completed in accordance with the terms and
provisions contained in any documents related thereto. To the knowledge of
Seller, there are no set-offs, counterclaims or disputes asserted with respect
to any Accounts Receivable that would result in claims in excess of the reserve
for bad debts set forth on the Seller Financial Statements and, subject to such
reserve, all Accounts Receivable are collectible in full.
2.24 Accounts Payable. All accounts, notes, contracts and other amounts
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payable of Seller included in the Assumed Liabilities are currently within their
respective terms, and are neither in default nor otherwise past due by more than
90 days.
2.25 Insurance. Seller currently maintains, and has for at least the past
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year maintained, in full force and effect, all insurance policies that are
required to be maintained for the conduct of the Business (collectively, the
"Insurance Policies"). All of the Insurance Policies are listed on Schedule
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2.25 hereto, and true and compete copies of all Insurance Policies have
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previously been provided to Buyer. Seller (i) is not in default regarding the
provisions of any Insurance Policy; (ii) has paid all premiums due thereunder;
and (iii) has not failed to present any notice or present any material claim
thereunder in a due and timely fashion.
2.26 Bankruptcy. Neither Seller, the Controlling Members, nor any entities
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affiliated, related or controlled by any of such parties, has filed a petition
or request for reorganization or protection or relief under the bankruptcy laws
of the United States or any state or territory thereof, made any general
assignment for the benefit of creditors, or consented to the appointment of a
receiver or trustee, including a custodian under the United States bankruptcy
laws, whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
2.27 Disclosure. No statement of fact by Seller contained in this
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Agreement and no written statement of fact furnished or to be furnished by
Seller to Buyer pursuant to or in connection with this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein contained not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IXL AND BUYER
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Each of IXL and Buyer jointly and severally represents and warrants to
Seller which representations and warranties shall survive the Closing in
accordance with Section 7.1 of this Agreement, as follows:
3.1 Organization and Qualification. Each of IXL and its Subsidiaries (as
------------------------------
defined in Section 7.10 hereof) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
Each of IXL and its Subsidiaries has the requisite
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corporate power and authority to carry on its business as it is now being
conducted and is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary. Complete and correct copies of the Certificates of Incorporation and
Bylaws of IXL and Buyer as in effect on the date hereof are attached as Schedule
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3.1 hereto.
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3.2 Authority. Each of IXL and Buyer has the necessary corporate power
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and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by each of IXL and
Buyer have been duly and validly authorized and approved by their respective
Board of Directors and shareholders, and no other corporate or shareholder
proceedings on the part of either IXL or Buyer, or their respective boards of
directors or shareholders, are necessary to authorize or approve this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of IXL and Buyer, and assuming the due
authorization, execution and delivery by Seller and the Controlling Members,
constitutes the valid and binding obligation of each of IXL and Buyer,
enforceable against each of IXL and Buyer in accordance with its terms.
3.3 No Conflicts, Required Filings and Consents. Except as set forth on
-------------------------------------------
Schedule 3.3 hereto, none of the execution and delivery of this Agreement by IXL
------------
or Buyer, the consummation by IXL and Buyer of the transactions contemplated
hereby or compliance by IXL and Buyer with any of the provisions hereof will:
(a) conflict with or violate the Certificate of Incorporation or
Bylaws of IXL or Buyer, or the organizational documents of any other
Subsidiaries;
(b) result in a violation of any statute, ordinance, rule, regulation,
order, judgment or decree applicable to IXL or its Subsidiaries, or by which
IXL, any of its Subsidiaries, or their respective properties or assets may be
bound or affected;
(c) result in a violation or breach of, or constitute a default (or an
event that, with notice or lapse of time or both, would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any note, bond, mortgage, indenture, or any material contract,
agreement, arrangement, lease, license, permit, judgment, decree, franchise or
other instrument or obligation to which IXL or any of its Subsidiaries is a
party or by which IXL, any of its Subsidiaries or their respective properties
may be bound or affected;
(d) result in the creation of any Lien on any of the property or
assets of IXL or any of its Subsidiaries; or
(e) require any Consent of (i) any Governmental Entity (except for
compliance with any applicable requirements of any applicable securities laws),
or (ii) any other Person.
3.4 Litigation. Except as set forth on Schedule 3.4 hereto, there is no
---------- ------------
suit, action, claim, investigation or proceeding pending or, to the knowledge of
IXL, threatened against or affecting IXL or its Subsidiaries, nor is there any
judgment, decree, injunction or order of any applicable
-10-
Governmental Entity or arbitrator outstanding against IXL or its Subsidiaries
that, either individually or in the aggregate, would have a material adverse
effect on the assets, business or financial condition of IXL and its
Subsidiaries, taken as a whole.
3.5 Brokers. Except as disclosed on Schedule 3.5 hereto, no broker or
------- ------------
finder is entitled to any broker's or finder's fee or other commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of IXL or Buyer.
3.6 IXL Stock.
---------
(a) As of the date hereof, the authorized capital stock of IXL
consists of (i) (A) 50,000,000 shares of Class A Common Stock, $.01 par value,
of which no shares are validly issued and outstanding, and (B) 100,000,000
shares of Class B Common Stock, $.01 par value, of which 8,443,356 shares are
validly issued and outstanding (taking into account the stock split described in
Section 7.9 hereof, but without taking into account any shares of IXL Stock to
be issued pursuant to this Agreement), fully paid and nonassessable; (ii)
500,000 shares of blank check preferred stock, (A) 250,000 of which have been
designated as Class A Convertible Preferred stock, of which 169,260 shares are
validly issued and outstanding, fully paid and nonassessable, (B) 100,000 of
which have been designated as Class B Convertible Preferred stock, of which
83,075 shares are validly issued and outstanding, fully paid and nonassessable,
and (C) 15,000 of which have been designated as Class C Convertible Preferred
stock, of which 9,232 shares are validly issued and outstanding, fully paid and
nonassessable. Except as set forth on Schedule 3.6 hereto, there are no
------------
options, warrants, calls, agreements, commitments or other rights presently
outstanding that would obligate IXL to issue, deliver or sell shares of its
capital stock, or to grant, extend or enter into any such option, warrant, call,
agreement, commitment or other right. In addition to the foregoing, as of the
date hereof, IXL has no bonds, debentures, notes or other indebtedness issued or
outstanding that have voting rights (or which are convertible into or
exercisable for securities having the right to vote) in IXL.
(b) When delivered to the Seller in accordance with the terms hereof,
the IXL Stock will be (i) duly authorized, validly issued, fully paid and
nonassessable, and (ii) free and clear of all Liens other than restrictions
imposed by the Stockholders' Agreement and by federal and state securities laws.
3.7 Subsidiaries. Except as set forth on Schedule 3.7 hereto, IXL has no
------------ ------------
subsidiaries and does not otherwise own or control, directly or indirectly, any
equity interest in, or any security convertible into an equity interest in, any
Entity. Schedule 3.7 hereto lists the name of each of the Subsidiaries of IXL,
------------
and indicates their respective jurisdictions of incorporation, and the
percentage of the Subsidiary owned where the Subsidiary is not wholly-owned.
3.8 Financial Statements. IXL has heretofore furnished Seller with a true
--------------------
and complete copy of (a) the audited financial statements of IXL Interactive
Excellence, Inc. (n/k/a iXL, Inc.) for the years ended December 31, 1993, 1994
and 1995, and for the four-month period ending April 30, 1996; (b) audited
combined financial statements for Creative Video, Inc. (n/k/a iXL, Inc.),
Creative Video Library, Inc. and Entrepreneur Television, Inc. for the years
ending December 31, 1993, 1994 and 1995, and for the four-month period ending
April 30, 1996; (c) the audited
-11-
consolidated financial statements for IXL and its Subsidiaries for the eight
months ended December 31, 1996; and (iv) the unaudited consolidated financial
statements for IXL and its Subsidiaries, dated November 30, 1997 (collectively,
the "IXL Financial Statements"). The IXL Financial Statements present fairly in
all material respects the consolidated financial position, results of
operations, shareholders' equity and cash flows of IXL at the respective dates
or for the respective periods to which they apply. Except as disclosed therein,
such statements and related notes have been prepared each in accordance with
GAAP consistently applied throughout the periods involved (except, in the case
of the unaudited financial statements, for the exclusion of footnotes and normal
year end adjustments which would not be material in amount or effect).
3.9 Undisclosed Liabilities. Except as set forth on Schedule 3.9 hereto,
----------------------- ------------
neither IXL nor any of its Subsidiaries has any debt, liability or obligation of
any kind, whether accrued, absolute or otherwise, including, without limitation,
any liability or obligation on account of taxes or any governmental charges or
penalty, interest or fines, except (a) liabilities incurred in the ordinary
course of business after November 30, 1997 that would not, whether individually
or in the aggregate, have a material adverse impact on the business or financial
condition of the IXL and its Subsidiaries, taken as a whole; (b) liabilities
reflected on the IXL Financial Statements; and (c) liabilities incurred as a
result of the transactions contemplated by this Agreement.
3.10 Compliance with Applicable Laws. IXL or its Subsidiaries holds all
-------------------------------
material permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary to own, lease or operate all of the assets and
properties of IXL and its Subsidiaries, as appropriate, and to carry on IXL's
business as now conducted (the "IXL Permits"). To the knowledge of IXL, IXL and
its Subsidiaries are in material compliance with all applicable laws, ordinances
and regulations and the terms of the IXL Permits.
3.11 Bankruptcy. Neither IXL nor any of its Subsidiaries has filed a
----------
petition or request for reorganization or protection or relief under the
bankruptcy laws of the United States or any state or territory thereof, made any
general assignment for the benefit of creditors, or consented to the appointment
of a receiver or trustee, including a custodian under the United States
bankruptcy laws, whether such receiver or trustee is appointed in a voluntary or
involuntary proceeding.
3.12 Absence of Changes. Except as provided in Schedule 3.12 hereto, since
------------------ -------------
November 30, 1997, there has not been (a) any transaction, commitment, dispute
or other event or condition (financial or otherwise) of any character (whether
or not in the ordinary course of business) individually or in the aggregate that
has had, or would reasonably be expected to have, a material adverse effect on
the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of IXL and its Subsidiaries, taken as a
whole; (b) any damage, destruction or loss, whether or not covered by insurance,
which has had, or would reasonably be expected to have, a material adverse
effect on the business, properties, assets, condition (financial or otherwise),
liabilities or results of operations of IXL and its Subsidiaries, taken as a
whole; (c) any entry into any commitment or transaction material to IXL and its
Subsidiaries, taken as a whole (including, without limitation, any borrowing or
sale of assets) except in the ordinary course of business consistent with past
practice; (d) any declaration, setting aside or payment of any dividend or
distribution (whether in cash, stock or property) with respect to its capital
stock; (e) any material change in its accounting principles, practices or
methods; (f) any split, combination or
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reclassification of any of IXL's capital stock or the issuance or authorization
of any issuance of any other securities in respect of, in lieu of or in
substitution for, shares of IXL's capital stock; or (g) any agreement (whether
or not in writing), arrangement or understanding to do any of the foregoing.
3.13 Intellectual Property.
---------------------
(a) IXL and its Subsidiaries own, or are validly licensed or
otherwise have the right to use or exploit, all of the material technology,
trade secrets, know-how, patents, patent rights, trademarks, trademark rights,
trade names, trade name rights, service marks, service ▇▇▇▇ rights, and
copyrights used or required to be used by IXL and its Subsidiaries in the
operation of their respective business (the "IXL Intellectual Property"). No
claims are pending or, to the knowledge of IXL, threatened, that IXL or its
Subsidiaries are infringing or otherwise adversely affecting the rights of any
Person with regard to any IXL Intellectual Property, IXL has used its reasonable
best efforts to protect its rights in the IXL Intellectual Property and, to the
knowledge of IXL, no Person is infringing the rights of IXL with respect to any
of the IXL Intellectual Property.
(b) IXL current licenses, or otherwise has the legal right to use,
all material computer software used or required to be used by IXL and its
Subsidiaries in the conduct of their respective businesses (including any
upgrades, alterations or enhancements with respect thereto), and all such
software is being used in material compliance with any applicable licenses or
other agreements.
3.14 Taxes. IXL and its Subsidiaries have duly and timely filed all
-----
federal, state and local income, franchise, excise, real and personal property
and other tax returns and reports, including extensions, required to have been
filed by IXL and its Subsidiaries on or prior to the date hereof. IXL and its
Subsidiaries have duly and timely paid all taxes and other governmental charges,
and all interest and penalties with respect thereto, required to be paid by IXL
and its Subsidiaries (whether by way of withholding or otherwise) to any
federal, state, local or other taxing authority (except to the extent the same
are being contested in good faith, and adequate reserves therefor have been
provided in the applicable IXL Financial Statement). As of the date hereof, all
deficiencies proposed as a result of any audits have been paid or settled.
3.15 Disclosure. No statement of fact by IXL or Buyer contained in this
----------
Agreement and no written statement of fact furnished or to be furnished by IXL
or Buyer to Seller pursuant to or in connection with this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements herein or
therein contained not misleading.
ARTICLE IV
ADDITIONAL AGREEMENTS
---------------------
4.1 Public Announcements. The parties agree that, except as may otherwise
--------------------
be required to comply with applicable laws and regulations (including, without
limitation, applicable securities
-13-
laws) or to obtain consents required hereunder, public disclosure of the
transactions contemplated by this Agreement shall be made only upon or after the
consummation of the transactions contemplated by this Agreement. Any such
disclosure shall be coordinated by IXL, and none of Seller nor the Controlling
Members shall make any such disclosure without the prior written consent of IXL.
4.2 Transfer and Gains Taxes and Certain Other Taxes and Expenses. Each
-------------------------------------------------------------
of Seller and Buyer will pay 50% of all transfer, gains and other similar taxes
and all documentary stamps, filing fees, recording fees and sales and use taxes,
if any, and any penalties or interest with respect thereto, payable in
connection with consummation of the transactions contemplated by this Agreement.
4.3 Further Assurances. From time to time after the date hereof, upon the
------------------
reasonable request of any party hereto, the other party or parties hereto shall
execute and deliver or cause to be executed and delivered such further
instruments, and take such further action, as the requesting party may
reasonably request in order to effectuate fully the purposes, terms and
conditions of this Agreement.
ARTICLE V
DELIVERIES AT CLOSING
---------------------
5.1 Deliveries of Seller and the Green Room Members.
-----------------------------------------------
(a) At the Closing, and as a condition to Buyer's and IXL's
obligation to consummate the transactions contemplated hereby, Seller shall
deliver, or cause to be delivered, to Buyer, properly executed and dated as of
the date hereof: (i) the ▇▇▇▇ of Sale and Assignment in the form of Exhibit "A"
----------
hereto (the "▇▇▇▇ of Sale"); (ii) the Assumption Agreement in the form of
Exhibit "B" hereto (the "Assumption Agreement"); (iii) the Assignment and
-----------
Assumption of Contracts in the form of Exhibit "C" hereto (the "Contract
-----------
Assignment"); (iv) the Assignment and Assumption of Leases in the form of
Exhibit "D" hereto (the "Lease Assignment"); (v) the Trademark Assignment in the
-----------
form of Exhibit "E" hereto (the "Trademark Assignment"); (vi) an Agreement to be
-----------
Bound to Registration Rights Agreement, substantially in the form of Exhibit "F"
-----------
hereto executed by each Green Room Member (the "Agreement to be Bound to
Registration Rights Agreement"); (vii) an Agreement to be Bound to Stockholders
Agreement executed by each Green Room Member, substantially in the form of
Exhibit "G" hereto; (viii) a closing certificate of Seller, substantially in the
-----------
form of Exhibit "H" hereto; (ix) an Acknowledgment and Representation Letter
-----------
executed by each Green Room Member in the form of Exhibit I attached hereto; (x)
---------
Seller's opinion of counsel, substantially in the form of Exhibit "J" hereto;
-----------
and (xi) such other documents as provided in Article VII hereof or as Buyer
shall reasonably request.
(b) In addition to the foregoing, and as a further condition to
Buyer's and IXL's obligation to consummate the transactions contemplated by this
Agreement, at or prior to the Closing, Seller and the Green Room Members shall
have (i) obtained or caused to be obtained all of the Consents listed on
Schedule 5.1(b) hereto; and (ii) delivered to Buyer a Certificate of Good
---------------
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Standing of Seller, and a copy of the Articles of Organization of Seller, both
as certified by the Secretary of State of Virginia.
5.2 Deliveries of Buyer.
-------------------
(a) In addition to the payment of the Purchase Price in accordance
with Section 1.3 hereof (including the delivery of certificates representing the
shares of IXL Stock being delivered to Seller in connection therewith), at the
Closing, and as a condition to Seller's and each Controlling Members' obligation
to consummate the transactions contemplated hereby, Buyer shall deliver, or
cause to be delivered, to Seller, properly executed and dated as of the date
hereof: (i) the ▇▇▇▇ of Sale; (ii) a closing certificate of IXL, substantially
in the form of Exhibit "K-1" hereof, and a closing certificate of Buyer,
-------------
substantially in the form of Exhibit "K-2" hereto; (iii) the Assumption
-------------
Agreement; (iv) the Contract Assignment; (v) the Lease Assignment; (vi) the
Trademark Assignment; (vii) an Agreement to be Bound to Registration Rights
Agreement; (viii) Buyer's opinion of counsel, substantially in the form of
Exhibit "L" hereto; and (ix) such other documents as Seller shall reasonably
-----------
request.
(b) In addition to the foregoing, and as a further condition to
Buyer's obligation to consummate the transactions contemplated by this
Agreement, at or prior to the Closing, Buyer shall have (i) obtained or caused
to be obtained all of the Consents listed on Schedule 5.2(b) hereto; and (ii)
---------------
delivered to Seller a Certificate of Good Standing of IXL and Buyer, and a copy
of the Certificate of Incorporation of IXL and Buyer, all as certified by the
Secretary of State of Delaware.
ARTICLE V
INDEMNIFICATION
---------------
6.1 Indemnification by Buyer. (a) Each of IXL and Buyer shall jointly and
------------------------
severally indemnify and hold Seller, the Green Room Members and Seller's
officers, directors and employees (collectively, the "Seller Indemnified
Parties") harmless from and against, and agree promptly to defend each of the
Seller Indemnified Parties from and reimburse each of the Seller Indemnified
Parties for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including, without limitation, reasonable
attorney fees and other legal costs and expenses) (collectively, a "Seller
Loss") that any of the Seller Indemnified Parties may at any time suffer or
incur, or become subject to, as a result of or in connection with:
(i) any breach or inaccuracy of any of the representations
and warranties made by Buyer or IXL in or pursuant to this Agreement, or in any
instrument, certificate or affidavit delivered by Buyer or IXL at the Closing in
accordance with the provisions hereof;
(ii) any failure by Buyer or IXL to carry out, perform,
satisfy and discharge any of its respective covenants, agreements, undertakings,
liabilities or obligations under this Agreement or under any of the documents
and materials delivered by Buyer or IXL pursuant to this Agreement;
-15-
(iii) the Assumed Liabilities; and
(iv) any suit, action or other proceeding arising out of,
or in any way related to, any of the matters referred to in this Section 6.1(a).
(b) Notwithstanding any other provision to the contrary neither Buyer
nor IXL shall have any liability under Section 6.1(a)(i) above (i) unless the
aggregate of all Seller Losses for which IXL and Buyer would be liable but for
this sentence exceeds, on a cumulative basis, an amount equal to $75,000 and
then only to the extent of such excess, (ii) for amounts in excess of $1,800,000
in the aggregate, and (iii) unless a claim has been asserted with respect to the
matters set forth in Section 6.1(a)(i), or 6.1(a)(iv) to the extent applicable
to Section 6.1(a)(i), within two years of the date hereof. Notwithstanding any
implication to the contrary contained herein, the parties acknowledge and agree
that a decrease in the value of IXL Stock would not, by itself, constitute a
Seller Loss, unless and to the extent a decrease in the value of IXL Stock has
been demonstrated to be as a result of any event described in Sections
6.1(a)(i), (ii), (iii) or (iv) above.
6.2 Indemnification by Seller. (a) Each of Seller and the Controlling
-------------------------
Members shall jointly and severally indemnify and hold IXL, Buyer, and their
respective shareholders, directors, officers and employees (collectively, the
"Buyer Indemnified Parties") harmless from and against, and agree to promptly
defend each of the Buyer Indemnified Parties from and reimburse each of the
Buyer Indemnified Parties for, any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including, without limitation,
reasonable attorney fees and other legal costs and expenses) (collectively, a
"Buyer Loss") that any of the Buyer Indemnified Parties may at any time suffer
or incur, or become subject to, as a result of or in connection with:
(i) any breach or inaccuracy of any representations and
warranties made by Seller or the Controlling Members in or pursuant to this
Agreement, or in any certificate or affidavit delivered by the same at the
Closing in accordance with the provisions hereof;
(ii) any failure by Seller or the Controlling Members to
carry out, perform, satisfy and discharge any of their respective covenants,
agreements, undertakings, liabilities or obligations under this Agreement or
under any of the documents and materials delivered by Seller or the Controlling
Members pursuant to this Agreement;
(iii) the Retained Liabilities; and
(iv) any suit, action or other proceeding arising out of,
or in any way related to, any of the matters referred to in this Section 6.2(a).
(b) Notwithstanding any other provision to the contrary neither
Seller nor the Green Room Members shall have any liability under Section
6.2(a)(i) above (i) unless the aggregate of all Buyer Losses for which Seller
and the Green Room Members would be liable but for this sentence exceeds, on a
cumulative basis, an amount equal to $75,000, and then only to the extent of
such excess, (ii) for amounts in excess of $1,800,000 in the aggregate, and
(iii) unless a claim has
-16-
been asserted with respect to the matters set forth in Section 6.2(a)(i), or
6.2(a)(iv) to the extent applicable to Section 6.2(a)(i), within two years of
the date hereof.
6.3 Notification of Claims; Election to Defend.
------------------------------------------
(a) A party entitled to be indemnified pursuant to Section 6.1 or 6.2
hereof, as the case may be (the "Indemnified Party"), shall notify the party
liable for such indemnification (the "Indemnifying Party") in writing of any
claim or demand (a "Claim") that the Indemnified Party has determined has given
or could give rise to a right of indemnification under this Agreement. Subject
to the Indemnifying Party's right to defend in good faith third party Claims as
hereinafter provided, the Indemnifying Party shall satisfy its obligations under
this Article VI within 30 days after the receipt of written notice thereof from
the Indemnified Party. Any amounts paid thereafter shall include interest
thereon for the period commencing at the end of such 30-day period and ending on
the actual date of payment, at a rate of 15% per annum, or, if lower, at the
highest rate of interest permitted by applicable law at the time of such
payment.
(b) If the Indemnified Party shall notify the Indemnifying Party of
any Claim pursuant to Section 6.3(a) hereof, and if such Claim relates to a
Claim asserted by a third party against the Indemnified Party that the
Indemnifying Party acknowledges is a Claim for which it must indemnify or hold
harmless the Indemnified Party under Section 6.1 or 6.2 hereof, as the case may
be, the Indemnifying Party shall have the right, at its sole cost and expense,
to employ counsel of its own choosing to defend any such Claim asserted against
the Indemnified Party; provided, however, that if the Indemnified Party (i)
-------- -------
reasonably believes that its interests with respect to a Claim (or any material
portion thereof) are in conflict with the interests of the Indemnifying Party
with respect to such Claim (or portion thereof), and (ii) promptly notifies the
Indemnifying Party, in writing, of the nature of such conflict, then the
Indemnified Party shall be entitled to choose, at the sole cost and expense of
the Indemnifying Party, independent counsel to defend such Claim (or the
conflicting portion thereof). The Indemnified Party shall have the right to
participate in the defense of any such Claim at its own expense (except to the
extent provided in the foregoing sentence), but the Indemnifying Party shall
retain control over such litigation (except as provided in the foregoing
sentence). The Indemnifying Party shall notify the Indemnified Party in
writing, as promptly as possible (but in any case before the due date for the
answer or response to a claim) after the date of the notice of claim given by
the Indemnified Party to the Indemnifying Party under Section 6.3(a) hereof of
its election to defend in good faith any such third party Claim. So long as the
Indemnifying Party is defending in good faith any such Claim asserted by a third
party against the Indemnified Party (or has been relieved of the obligation to
defend such Claim in accordance with this Section 6.3(b) as a result of a
conflict of interest between the Indemnified Party and the Indemnifying Party),
the Indemnified Party shall not settle or compromise such Claim without the
prior written consent of the Indemnifying Party. The Indemnified Party shall
cooperate with the Indemnifying Party in connection with any such defense and
shall make available to the Indemnifying Party or its agents all records and
other materials in the Indemnified Party's possession reasonably required by it
for its use in contesting any third party Claim; provided, however, that the
-------- -------
Indemnifying Party shall have agreed, in writing, to keep such records and other
materials confidential except to the extent required for defense of the relevant
Claim. Whether or not the Indemnifying Party elects to defend any such Claim,
the Indemnified Party shall have no obligations to do so. Within 30 days after
a final determination (including, without limitation, a
-17-
settlement) has been reached with respect to any Claim contested pursuant to
this Section 6.3(b), the Indemnifying Party shall satisfy its obligations with
respect thereto. Any amounts paid thereafter shall include interest thereon for
the period commencing at the end of such 30-day period and ending on the actual
date of payment, at a rate of 15% per annum, or, if lower, at the highest rate
of interest permitted by applicable law at the time of such payment.
ARTICLE VII
GENERAL PROVISIONS
------------------
7.1 Survival; Recourse. None of the agreements contained in this
------------------
Agreement shall survive the Closing, except that (i) the covenants contained in
Article IV hereof and the obligations to indemnify contained in Article VI
hereof shall survive indefinitely (except to the extent a shorter period of time
is explicitly specified therein) and (ii) the representations and warranties
made in Articles II and III of this Agreement shall survive the Closing for a
period of two years, and shall survive any independent investigation by the
parties, and any dissolution, merger or consolidation of Seller or Buyer, and
shall bind the legal representatives, assigns and successors of Seller, the
Controlling Members, IXL and Buyer.
7.2 Notices. All notices or other communications under this Agreement
-------
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by personal delivery, by telecopy (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to Seller: Green Room Productions, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopy: 415/289-7001
Telephone: 415/▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇▇ Doll & ▇▇▇▇▇▇▇▇ PLLC
1300 SunTrust Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: 615/743-1900
Telephone: 615/▇▇▇-▇▇▇▇
If to the Controlling Members: To the address listed under the signature
line of the applicable Controlling Member
-18-
If to IXL or Buyer: IXL Holdings, Inc.
Two Park Place
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: 404/267-3801
Telephone: 404/▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, A Professional Corporation
One Buckhead Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: 404/233-5824
Telephone: 404/▇▇▇-▇▇▇▇
and to: ▇▇▇▇▇ & Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Esq.
Telecopy: 212/223-2379
Telephone: 212/▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
7.3 Entire Agreement. This Agreement and the documents, schedules and
----------------
instruments referred to herein and to be delivered pursuant hereto constitute
the entire agreement between the parties pertaining to the subject matter
hereof, and supersede all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof. There are no other representations or warranties, whether
written or oral, between the parties in connection the subject matter hereof,
except as expressly set forth herein.
7.4 Assignments; Parties in Interest. Neither this Agreement nor any of
--------------------------------
the rights, interests or obligations hereunder may be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the rights, interests and
obligations of Buyer hereunder may be assigned to any wholly owned subsidiary of
Buyer without such prior consent. Subject to the preceding sentence, this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person not a party hereto any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement, except as otherwise
provided herein.
7.5 Governing Law. This Agreement shall be governed in all respects by
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the laws of the State of Georgia (without giving effect to the provisions
thereof relating to conflicts of law).
-19-
7.6 Headings. The descriptive headings herein are nserted for convenience
--------
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
7.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute a single agreement.
7.8 Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economics or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon determination that any term or other provision
hereof is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
7.9 Stock Split. The parties hereby agree and acknowledge that the per
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share value of IXL Stock for purposes of this Agreement has been determined in
part by taking into account a 100 to 1 stock split of IXL Stock that is expected
to be effective on February 15, 1998 for all holders of record of IXL Stock as
of January 9, 1998. If the aforementioned stock split does not occur for any
reason, the parties agree that the per share value of IXL Stock shall be $500,
and that the provisions of this Agreement shall be adjusted accordingly.
7.10 Certain Definitions. As used in this Agreement:
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(a) the term "Subsidiary" or "Subsidiaries" means any Entity of which
IXL (either alone or through or together with any other Subsidiary) owns,
directly or indirectly, stock or other equity interests the holders of that are
entitled to more than 50% of the vote for the election of the board of directors
or other governing body of such Entity (including, without limitation, Buyer);
provided, however, that with respect to IXL, the terms "Subsidiary" and
-------- -------
"Subsidiaries" shall not include University Netcasting, Inc.; and
(b) any representation or warranty stated to be made "to the
knowledge" of a party shall refer to such party's knowledge following reasonable
inquiry as to the matter in question, and any representation or warranty stated
to be made "to the Knowledge of Seller" shall include the knowledge of the
Controlling Members.
- SIGNATURES ON THE FOLLOWING PAGE -
-20-
IN WITNESS WHEREOF, Buyer, Seller and IXL have caused this Agreement
to be signed by their respective officers thereunder duly authorized, and the
Controlling Members have signed this Agreement, all as of the date first written
above.
"SELLER"
GREEN ROOM PRODUCTIONS, L.L.C.,
a Virginia limited liability company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Manager
"BUYER"
IXL-SAN FRANCISCO, INC., a Delaware
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
"IXL"
IXL HOLDINGS, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
- SIGNATURES CONTINUE ON THE FOLLOWING PAGE -
-21-
"CONTROLLING MEMBERS"
/s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇
Address:
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------
------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Address:
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------
------------------------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇. ▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------
------------------------------
-22-
EXHIBITS
--------
▇▇▇▇ of Sale ...................................................... Exhibit A
Assumption Agreement .............................................. Exhibit B
Contract Assignment ............................................... Exhibit C
Lease Assignment .................................................. Exhibit D
Trademark Assignment .............................................. Exhibit E
Agreement to be Bound to Registration Rights Agreement ............ Exhibit F
Agreement to be Bound to Stockholders' Agreement .................. Exhibit G
Seller's Closing Certificate ...................................... Exhibit H
Acknowledgment and Representation Letter .......................... Exhibit I
Seller's Opinion of Counsel ....................................... Exhibit J
IXL's Closing Certificate ......................................... Exhibit K-1
Buyer's Closing Certificate ....................................... Exhibit K-2
Buyer's Opinion of Counsel ........................................ Exhibit L
SCHEDULE 1.1
------------
RETAINED ASSETS
SCHEDULE 1.4
------------
ASSUMED LIABILITIES
SCHEDULE 2.1
------------
ARTICLES OF ORGANIZATION AND AMENDED AND RESTATED OPERATING AGREEMENT OF SELLER
SCHEDULE 2.3
------------
MEMBERSHIP OF SELLER
SCHEDULE 2.5
------------
CONFLICTS, REQUIRED FILINGS AND CONSENTS
SCHEDULE 2.7
------------
EXCEPTIONS TO ABSENCE OF CHANGES
SCHEDULE 2.10
-------------
EXCEPTIONS TO TITLE TO PROPERTIES
SCHEDULE 2.12
-------------
EXCEPTIONS TO INTELLECTUAL PROPERTY RIGHTS
SCHEDULE 2.14
-------------
LEASES
SCHEDULE 2.15
-------------
CONTRACTS
SCHEDULE 2.17
-------------
LITIGATION
SCHEDULE 2.18
-------------
EMPLOYEE BENEFIT PLANS/LABOR RELATIONS
SCHEDULE 2.19
-------------
ERISA
SCHEDULE 2.21
-------------
PERMITS
SCHEDULE 2.22
-------------
BROKERS
SCHEDULE 2.25
-------------
INSURANCE
SCHEDULE 3.1
------------
CERTIFICATES OF INCORPORATION AND BYLAWS OF IXL AND BUYER
SCHEDULE 3.3
------------
CONFLICTS, REQUIRED FILINGS AND CONSENTS
SCHEDULE 3.4
------------
IXL AND BUYER LITIGATION
SCHEDULE 3.5
------------
IXL AND BUYER BROKERS
SCHEDULE 3.6
------------
OBLIGATIONS OF IXL TO ISSUE IXL OPTIONS, WARRANTS AND OTHER STOCK RIGHTS
SCHEDULE 3.7
------------
SUBSIDIARIES
SCHEDULE 3.9
------------
IXL AND BUYER UNDISCLOSED LIABILITIES
SCHEDULE 3.12
-------------
EXCEPTIONS TO ABSENCE OF CHANGE
SCHEDULE 5.1(B)
---------------
REQUIRED CONSENTS OF GREEN ROOM
SCHEDULE 5.2(B)
---------------
IXL AND BUYER CONSENTS