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EXHIBIT 4.2
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and entered
into effective as of 24th December, 1998, between ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, a
_______ [corporation/individual] with offices located at
_________________________________, (the "SELLER") and IMSI, a California
corporation with offices located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ("IMSI").
PRELIMINARY STATEMENT
The IMSI desires to purchase, and the Seller desires to sell, certain of
the assets of the Seller, for the consideration set forth below, subject to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. SALE AND DELIVERY OF THE ASSETS
1.1 Assets to be Purchased
(a) Subject to and upon the terms and conditions of this
Agreement at the closing of the transactions contemplated
by this Agreement (the "CLOSING"), the Seller shall sell,
transfer, convey, assign, deliver and where applicable,
license to the IMSI, and the IMSI shall purchase from the
Seller, the following properties, assets and other rights
and interests of the Seller including:
(i) all web site materials including, without
limitation, all website content, web links,
databases, agreements, records and object and
source code relating to the URL known as
"▇▇▇▇▇▇▇.▇▇▇" (collectively, the "SITE");
(ii) all books, records and accounts, correspondence,
production records, technical, accounting, customer
lists, customer registration files and databases,
and any confidential information which has been
reduced to writing relating to the Site;
(iii) all of the Seller's right, title and interest i
and to, including the right to enforce, all
intangible property rights, including but not
limited to inventions, discoveries, trade secrets,
United States and foreign patents and
applications, the domain name
"▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇" and any derivation
thereof, trademark registrations, applications for
trademark registrations, logos, copyrights,
copyright registrations, owned or where not owned
used by the Seller in its business as it relates
to the Site (collectively, the "INTANGIBLE
Property");and
(b) The Site, Intangible Property and other properties, assets
and business of the Seller described in paragraph (a)
above shall be referred to collectively as the "ASSETS."
1.2 Further Assurances. At any time and from time to time after the
Closing, at the IMSI's request and without further consideration, the Seller
promptly shall execute and deliver such instruments of sale, transfer,
conveyance, assignment and conformation, and take such other action, as the IMSI
may reasonably request to more effectively transfer, convey and assign to the
IMSI, and to confirm the IMSI's title to, all of the Assets, to put the IMSI in
actual possession and operating control thereof, to assist the IMSI in
exercising all rights with respect thereto and to carry out the purpose and
intent of this Agreement. Seller agrees to effectuate the transfer of the Domain
Name registration in a timely manner. Specifically, Seller agrees to prepare and
transmit the necessary InterNIC (or any successor domain name registration
organization) registration templates and/or to correspond with InterNIC to
authorize transfer of the Domain Name and pay any fees associated therewith.
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1.3. Purchase Price.
(a) The purchase price for the Assets shall be equal to the
sum of three hundred ten thousand dollars (U.S.
$310,000.00), one hundred sixty thousand dollars (U.S.
$160,000.00) in cash and one hundred fifty thousand
dollars (U.S. $150,000.00) in common stock of IMSI,
payable as follows:
- One hundred sixty thousand dollars (U.S. $160,000.00)
shall be paid pursuant to the terms of the IMSI Note.
- Within thirty (30) days of the Closing, IMSI shall
deliver to the Seller the number of shares of IMSI
Common Stock equal to the average of the closing
prices per share of IMSI Common Stock (in U.S.
dollars) as quoted on the Nasdaq National Market (or
such other exchange or quotation system on which IMSI
Common Stock is then traded or quoted) and reported
in The Wall Street Journal for the ten (10) trading
days ending on, and inclusive of, the date as of
which such determination is being made for a total
value of one hundred fifty thousand dollars (U.S.
$150,000.00.)
1. Fractional Shares. No fractional shares
of IMSI Common Stock shall be issued in
connection with the Exchange.
2. Registration Rights. Effective upon the
Closing, the Seller shall be granted
registration rights under the Securities
Act of 1933, as amended (the "1933
ACT".) IMSI shall endeavor to register
the Seller's shares of IMSI Common the
next time IMSI does a stock registration
filing with the SEC on a form suitable
for registration of such shares (i.e.,
not a form relating to employee benefit
plans, a merger or similar transaction.)
Nothing herein shall require IMSI to
separately register the Seller's shares
of IMSI Common Stock.
3. Limitations on Sale, Transfer of IMSI
Common Stock. The Seller shall not sell,
transfer, gift or encumber in excess of
ten percent (10%) of the total number of
shares of IMSI Common Stock provided to
the Seller pursuant to this Agreement,
in any one calendar month during the
twelve (12) month period following the
date the IMSI Common Stock becomes
tradable without the prior written
consent of IMSI. Additionally, the
Seller shall give IMSI advance written
notice of any proposed sale of IMSI
Common Stock pursuant to this Agreement,
at least ten (10) business days in
advance of the proposed sale. IMSI shall
have a perpetual right of first refusal
to either purchase such proposed sale
shares or to arrange for a third party
to purchase such shares.
1.4 No Liabilities. IMSI shall assume no liabilities, obligations or
agreements of the Seller whatsoever and the Seller shall remain
solely responsible for, and shall indemnify the IMSI against, all
such liabilities, obligations and agreements.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the IMSI as follows:
2.1 Authorization. The execution, delivery and performance by the
Seller of this Agreement and the agreements provided for herein,
and the consummation by the Seller of the transactions
contemplated hereby and thereby, will not, with or without the
giving of notice or the passage of time or both, (a) violate the
provisions of any law, rule or regulation applicable to the
Seller; or (b) violate any judgment, decree, order or award of
any court, governmental body or arbitrator.
2.3 Ownership of the Assets. Seller is the exclusive owner of all
right, title and interest in and to the assets.
2.4 Litigation and Claims. The Seller is not a party to, or
threatened with, and none of the Assets are subject to, any
litigation, suit, action, investigation, proceeding or
controversy before any court, administrative agency or other
governmental authority relating to or affecting the Assets.
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2.6 No Infringement. The Site and the Intangible property do not
infringe on any patent, trademark, trade name, copyright or other
proprietary right of any third party.
2.7 Regulatory Approvals. All consents, approvals, authorizations and
other requirements prescribed by any law, rule or regulation
which must be obtained or satisfied by the Seller and which are
necessary for the execution and delivery by the Seller of this
Agreement and the documents to be executed and delivered by the
Seller in connection herewith have been obtained and satisfied.
2.8 Disclosure. No representation or warranty by the Seller in this
Agreement contains any untrue statement of a material fact.
3. REPRESENTATIONS AND WARRANTIES OF THE IMSI
The IMSI represents and warrants to the Seller as follows:
Authorization. The execution, delivery and performance of this Agreement
and the agreements provided for herein, and the consummation by the IMSI
of the transactions contemplated hereby and thereby, will not, with or
without the giving of notice or the passage of time or both, (a) violate
the provisions of any law, rule or regulation applicable to such party;
(b) violate the provisions of the Certificate of Incorporation; or
By-laws of the IMSI (c) violate any judgment, decree, order or aware of
any court, governmental body or arbitrator.
4. INDEMNIFICATION
4.1 The Seller hereby indemnifies and holds harmless the IMSI against
all claims, damages, losses, liabilities, costs and expenses
(including, without limitation, settlement costs and any legal,
accounting or other expenses for investigating or defending any
actions or threatened actions) incurred by the IMSI in connection
with each and all of the following:
(a) Any breach by the Seller of any
representation or warranty in this
Agreement;
(b) Any intellectual property or other
proprietary claim relating to Site or
anything on the Site;
and
(c) Any tax liabilities or obligations of
the Seller.
4.2 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder the IMSI (the "INDEMNIFIED PARTY")
shall promptly notify the Seller (the "INDEMNIFYING PARTY") of
the claim and, when known, the facts constituting the basis for
such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal
proceedings by a third party. The Indemnified Party shall not
settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which shall not be
unreasonable withheld, unless suit shall have been instituted
against it and the Indemnifying Party shall not have taken
control of such suit after notification thereof as provided in
Section 4.1 of this Agreement.
4.3 Payment of Indemnification Obligation. The Seller hereby agrees
that any claim for indemnification by the IMSI under this Section
4 or under any other provision of this Agreement may, at IMSI's
option, be set off against any of the IMSI's obligations to make
payments to the Seller under this Agreement, if any.
5. CONFIDENTIALITY
5.1 All documentation and information provided to in anticipation
of this agreement, both written and oral, by the party
disclosing the information ("the Disclosing Party") is
proprietary or confidential, including without limitation the
terms of this or any other agreement between the parties,
financial documents, copies of third party agreements in whole
or in part, drawings, computer program listings, techniques,
algorithms and processes and technical and marketing
information ("Confidential Information.") All information
supplied by the Disclosing Party in connection with this
Agreement shall be treated confidentially by the recipient of
the confidential information ("Recipient") and its employees,
and shall
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not be disclosed by the Recipient without the Disclosing Party's
prior written consent.
5.2 The parties agree that, in the event of Recipient's breach or
threatened breach of the confidentiality provision hereof, an
action at law for damages would not be adequate to protect the
rights of the Disclosing Party. Therefore, Recipient agrees that
in the event of a breach or threatened breach, the disclosing
party shall be entitled to injunctive and/or other equitable
relief to prevent a breach thereof and to secure their
enforcement, which shall be in addition to any other rights of
the disclosing party. Recipient acknowledges and agrees that the
Disclosing party shall be entitled to punitive damages in the
event that the confidentiality provision is breached.
6. MISCELLANEOUS
6.1 Notices Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
telex, federal express, registered or certified mail, postage prepaid,
addressed as follows or to such other address of which the parties may
have given notice:
If to IMSI; If to Seller:
IMSI ______________________
▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇: ___________
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ______________________
Telephone: ___________
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Facsmile: ___________
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
Legal Department
FAX: #415/▇▇▇-▇▇▇▇
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally; or (b) three
business days after being sent, if sent by registered or certified mail.
6.2 Successors and Assigns. Neither party may assign its respective
obligations hereunder without the prior written consent of the
other party. Any assignment in contravention of this provision
shall be void.
6.3 Entire Agreement. This Agreement represents the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and
understandings between such parties.
6.4 Expenses. Except as otherwise expressly provided herein, the IMSI
and the Seller shall each pay their own expenses in connection
with this Agreement and the transactions contemplated hereby.
6.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of California, notwithstanding any
conflict of laws.
6.6 Section Headings. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit, or
restrict the contractual obligations of the parties.
6.7 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
signed under seal as of the date first set forth above.
____________________ IMSI
By: By:
Name: Name:
Title: Title:
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SCHEDULE A
LIST OF SITE ADVERTISING AGREEMENTS AND MONTHLY REVENUE
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SCHEDULE B
SITE TRAFFIC STATISTICS
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SCHEDULE C
SECURED PROMISSORY NOTE
IN THE AMOUNT OF International Microcomputer Software Inc.
US$160,000.00 December 24th, 1998
1. OBLIGATION. In partial consideration for the exchange (the terms and
conditions set forth in the Asset Purchase Agreement (the "Asset Purchase
Agreement") between the parties and incorporated herein by reference) by
_______., (Seller) an ________ corporation, International Microcomputer Software
Inc., (IMSI) a California corporation, promises to pay to Seller at Seller's
then current address, the unpaid principal amount due under this Secured
Promissory Note ("Note.") Full payment of this Note by IMSI is contingent upon
the successful unencumbered transfer of the Assets to IMSI as described in the
Asset Purchase Agreement.
2. REPAYMENT. This Note will be repaid by IMSI to Seller in full on 15th March
1999. This Note, or any portion thereof, can be paid in advance by IMSI at any
time without penalty.
3. EVENTS OF DEFAULT BY PURCHASER. If any of the following events should occur
(each herein individually referred to as an "Event of Default"), Seller may
declare the entire unpaid principal on this Note, immediately due and payable,
by notice in writing to IMSI, without any other presentment, demand, protest or
other notice of any kind of character, all of which are hereby expressly waived,
anything herein to the contrary notwithstanding:
3.1 FAILURE TO MAKE PAYMENT. Default in the payment of this Note when
due and payable pursuant to the provisions of Section 2 if such default is not
cured by IMSI within thirty (30) days after Seller notifies IMSI of such
payment's past due status in writing.
3.2 INSTITUTION OF BANKRUPTCY. The institution by IMSI of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under the
Federal Bankruptcy code, or any other similar federal or state law, or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee, or other similar official, of IMSI, or
of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due or the taking of corporate action
by IMSI in furtherance of any such action or comparable proceedings in IMSI's
non-U.S. jurisdiction; or
3.3 NONDISMISSAL OF BANKRUPTCY PROCEEDINGS. If, within thirty (30) days
after the commencement of an action against IMSI seeking any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such action will not have been
dismissed or all orders or proceedings thereunder affecting the operations or
the business of IMSI stayed, or if the stay of any such order or proceeding will
thereafter be set aside, or if, within thirty (30) days after the appointment
without the consent or acquiescence of IMSI of any trustee, receiver or
liquidator of IMSI or of all of any substantial part of the properties of IMSI,
such appointment will not have been vacated or comparable proceedings in IMSI's
non-U.S. jurisdiction.
4. EVENT OF DEFAULT BY SELLER. If the Seller has failed to comply with any term
or condition of the Asset Purchase Agreement, this Note will not mature until
such failure of Seller is either remedied or excused by IMSI in writing.
5. PAYMENT OF EXPENSES AND ATTORNEYS' FEES. In case of default in the payment of
this Note by IMSI or an Event of Default by Seller, the defaulting party will
pay to the non-defaulting party such amount as will be sufficient to cover the
cost and expenses of collection, including, without limitation, reasonable
attorney's fees, expenses, and disbursements. No course of dealing and no delay
on the part of the non-defaulting party in exercising any right will operate as
a waiver thereof or otherwise prejudice it's right,
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powers, or remedies. No right, power, or remedy conferred by this Note upon the
non-defaulting party will be exclusive of any other rights, power, or remedy
referred to in this Note, or now or hereafter available at law, in equity, by
statute, or otherwise.
6. GOVERNING LAW. The validity, construction and performance of this Note will
be governed by the laws of the State of California, excluding that body of law
pertaining to conflicts of law.
IN WITNESS WHEREOF, IMSI has caused this Note to be executed as
of the date and year first above written.
International Microcomputer Software Inc.
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
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