EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
dated as of November 29, 2005
by and between
WEB INTERNET, LLC,
a California limited liability company,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
and
INTERLAND, INC.,
a Minnesota corporation
This ASSET PURCHASE AGREEMENT dated as of November 29, 2005, is made and
entered into by and among WEB INTERNET, LLC, a California limited liability
company ("Web Internet"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), (Web Internet and ▇▇▇▇▇▇
hereinafter individually a "Seller" and collectively "Sellers") and INTERLAND,
INC., a Minnesota corporation ("Purchaser"). Capitalized terms not otherwise
defined herein have the meanings set forth in Article 8.
WHEREAS, Sellers own and operate a web hosting, domain registration and
online service business ("Web Business"); and
WHEREAS, Sellers desire to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from Sellers, all of the assets that
are necessary or incidental for the daily operation of the Web Business by
Purchaser following Closing, and in connection therewith, Sellers have agreed to
assign and Purchaser has agreed to assume substantially all liabilities related
to the Web Business (except those liabilities hereinafter specifically excluded
from such sale), all on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1.
SALE OF ASSETS AND CLOSING
1.1 Assets.
(a) Assets to be Transferred by Web Internet to Purchaser. On the terms and
subject to the conditions set forth in this Agreement, Web Internet hereby
agrees to sell, transfer, convey, assign and deliver to Purchaser, and Purchaser
hereby agrees to purchase and pay for, at the Closing, free and clear of all
Liens other than Permitted Liens, all of Web Internet's right, title and
interest in, to and under the assets of Web Internet used in the Web Business
(other than the Excluded Assets), including, without limitation, the following
(collectively the "Web Internet Assets"):
(i) All customer accounts, agreements and contracts with customers of
the Web Business (the "Customer Accounts") listed in Schedule 1.1(a), attached
hereto;
(ii) All third party contracts and agreements pertaining to the Web
Business listed in Schedule 1.1(a), attached hereto (the "Third Party
Agreements");
(iii) All domain names owned by Web Internet, including without
limitation those domain names listed in Section (a)(iii) of Schedule 1.1,
attached hereto (the "Domain Names");
(iv) All prepaid and similar items connected with the Web Business;
(v) All spare parts inventories of the Web Business, including without
limitation those spare parts listed in Section (a)(v) of Schedule 1.1, attached
hereto;
(vi) All personal property owned by Web Internet and used in the
operation of the Web Business wherever located, including without limitation the
machinery and equipment, computer equipment and systems, software, materials,
furniture and office equipment listed in Section (a)(vi) of Schedule 1.1,
attached hereto ("Web Internet Personal Property");
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(vii) All supplier lists applicable to the Web Business;
(viii) All customer lists applicable to the Web Business;
(ix) All other orders, contracts, agreements and commitments
pertaining to the Web Business that are listed in Schedule 1.1(a), attached
hereto (the "Contracts")
(x) The Intellectual Property owned by Web Internet or licensed by Web
Internet from third parties used exclusively in the Web Business, including
without limitation the Web Internet Intellectual Property listed in Section
(a)(x) of Schedule 1.1, attached hereto (the "Web Internet Intellectual
Property"); provided that with respect to licenses for third party intellectual
property, Web Internet is obligated to obtain any required third party consents
for assignment to Purchaser;
(xi) All permits, franchises, licenses, bonds, approvals and
qualifications of the Web Business that are capable of being transferred to
Purchaser ("Web Internet Permits") issued by any government or governmental
unit, agency, board, body or instrumentality, whether federal, state or local
and all applications therefore pertaining to the Web Business, including without
limitation those listed in Section (a)(xi) of Schedule 1.1, attached hereto;
(xii) All business books and records of the Web Business, including
copies of all financial, operating, inventory, payroll and customer records and
all sales and promotional literature, correspondence and files;
(xiii) All interests in Perfect Privacy LLC;
(xiv) All of Sellers' rights, if any, in the Web Service Company
Assets;
(xv) All cash and cash equivalents owned by Web Internet at the
Closing (collectively, the "Web Internet Cash") which shall be delivered by
means of a wire transfer of immediately available funds at the Closing; and
(xvi) All other assets, tangible or intangible, owned by Web Internet
that are primarily used in the Web Business (other than the Excluded Assets),
and including without limitation the assets listed in Section (a)(xvi) of
Schedule 1.1, attached hereto.
(b) Excluded Assets. Notwithstanding anything to the contrary contained in
this Agreement, the following assets of Sellers are not part of the sale and
purchase contemplated hereunder and are excluded from the Assets and shall
remain the property of the Sellers: (i) the minute books, tax records, personnel
records and other organization documents of Sellers, (ii) Sellers' rights under
this Agreement, and (iii) any assets listed in Section (b) of Schedule 1.1
(collectively the "Excluded Assets").
1.2 Liabilities.
(a) Assumed Liabilities. In connection with the sale, transfer, conveyance,
assignment and delivery of the Assets pursuant to this Agreement, on the terms
and subject to the conditions set forth in this Agreement, at the Closing,
Purchaser hereby agrees to assume and to pay and perform and discharge when due
(i) the obligations of Web Internet under the Customer Accounts, Third Party
Agreements and Contracts, excluding any obligations of Web Internet under such
Customer Accounts, Third Party Agreements and Contracts which obligations result
from Web Internet's violation or breach of any such Customer Accounts, Third
Party Agreements and Contracts (collectively, the "Scheduled Liabilities").
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(b) Retained Liabilities. Except as set forth in Section 1.2(a), above, and
Sections 1.3(a)(ii) and 4.8, below, Purchaser shall not assume by virtue of this
Agreement or the transactions contemplated hereby, and shall have no liability
for, any Liabilities or obligations of Sellers (including, without limitation,
those related to the Web Business) of any kind, character or description
whatsoever, whether actual or contingent, direct or indirect, matured or
unmatured, liquidated or unliquidated, or known or unknown, whether arising out
of occurrences prior to, at or after the date of this Agreement (the "Retained
Liabilities"). Sellers hereby acknowledge that they are retaining the Retained
Liabilities, and each Seller agrees to pay, discharge and perform all such
liabilities and obligations promptly as and when due. Without limiting the
generality of the foregoing, Purchaser shall not assume or be obligated to pay,
perform or discharge any liabilities, obligations or commitments of any Seller
relating to or arising out of any of the following, whether or not disclosed in
any schedule to this Agreement:
(i.) Transaction Documents. All liabilities and obligations arising
out of each Seller's obligations under this Agreement and the other documents
executed in connection with the transactions contemplated herein;
(ii.) Taxes. All liabilities for current and deferred federal, state
and local Taxes of each Seller or its Affiliates.
(iii.) Indebtedness. Except as otherwise provided in this Agreement,
all liabilities and obligations to repay indebtedness for borrowed money
incurred by a Seller, or any Affiliate of a Seller including applicable lines of
credit and guarantees of third party obligations;
(iv.) Professional Fees. All liabilities and obligations of a Seller
or any Affiliate of a Seller for fees, costs and expenses of attorneys,
independent public accountants, investment bankers or other representatives
incurred in connection with the negotiation, preparation or consummation of this
Agreement and the transactions contemplated herein;
(v.) Litigation. All liabilities and obligations of a Seller or any
Affiliate of a Seller arising out of any action, claim or lawsuit based on any
state of facts or events occurring on or prior to the Closing Date.
1.3 Purchase Price; Allocation.
(a) Purchase Price. The purchase price for the Assets shall be Three
Million Three Hundred Sixty-Seven Thousand One Hundred Ninety-Seven United
States Dollars (US $3,367,197.00) (the "Purchase Price"). The Purchase Price
shall be payable as follows:
(i) Cash Payment. At the Closing, Purchaser shall deliver to Web
Internet an amount equal to Three Hundred Sixty-Seven Thousand One Hundred
Ninety-Seven United States Dollars (US $367,197.00) (the "Cash Payment") by wire
transfer of immediately available United States funds to such bank account as
Web Internet designates to Purchaser in writing prior to the closing.
(ii) Assumption of Indebtedness. At the Closing, in addition to the
Assumed Liabilities to be assumed by Purchaser pursuant to Section 1.2(a),
Purchaser shall: (i) assume the obligations of Web Internet under that certain
line of Credit Note and Loan Agreement dated January 1, 2003 as amended by that
certain Amended Loan Agreement dated August 31, 2004 between Web Service, Inc.
("Web Service") and Web Internet (the "Web Service Debt Agreement") in the
principal amount of $2,250,000 payable to Web Service (the "Web Service Debt")
on terms acceptable to Purchaser, Sellers and Web Service; and (ii) either
assume or repay in full the obligation of Web Internet under that certain
Convertible Promissory Note dated December 30, 2004 in the principal amount of
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$750,000 payable to SWSoft Holdings, Ltd., a Bermuda corporation (the
"Convertible Note") on terms acceptable to Purchaser, Sellers and SWSoft
Holdings, Ltd.
(b) Allocation. The parties agree that the Purchase Price and all other
amounts constituting consideration within the meaning of Section 1060 of the
Code (the "Consideration"), shall be allocated among the Assets in accordance
with Section 1060 of the Code. No later than thirty (30) days after the Closing,
the Purchaser shall cause to be prepared and delivered to the Sellers a schedule
allocating the Consideration to the Assets (the "Purchase Price Allocation").
The Sellers shall have the right to review the Purchase Price Allocation and any
work sheets and other papers prepared in connection with the Purchase Price
Allocation. The Sellers will be deemed to have accepted such Purchase Price
Allocation unless they provide written notice of disagreement to the Purchaser
within 15 days after the receipt of the Purchaser's Purchase Price Allocation.
If the Sellers timely provide such notice, the Purchaser and the Sellers shall
use commercially reasonable efforts to resolve any dispute between them
concerning the Purchase Price Allocation. If Sellers and Purchaser are able to
resolve such dispute (or if Sellers have accepted or have been deemed to accept
the Purchase Price Allocation), the Purchaser and the Sellers shall file or
cause to be filed all Tax Returns (including IRS Form 8594) consistent with the
Purchase Price Allocation, and neither the Purchaser nor the Sellers (or any of
their respective Affiliates) will take a position inconsistent with the Purchase
Price Allocation on any Tax Return, in any proceeding before any taxing
authority or otherwise. If a taxing authority disputes the Purchase Price
Allocation, the party receiving notice of the dispute will promptly notify the
other parties hereto concerning such dispute. Notwithstanding anything herein to
the contrary, if the parties do not agree to the Purchase Price Allocation,
neither party shall be obligated to utilize the Purchase Price Allocation of the
other in the preparation of any Tax Return.
(c) Method of Conveyance. At the Closing, (i) Sellers will assign and
transfer to Purchaser good and valid title in and to the Assets (free and clear
of all Liens, other than Permitted Liens) by delivery of good and sufficient
instruments of conveyance, assignment, registration and transfer (the
"Assignment Instruments"), in form and substance reasonably acceptable to
Sellers' and Purchaser's counsel, as shall be effective to vest in Purchaser
good and valid title to the Assets free and clear of any Liens other than
Permitted Liens; and (ii) Purchaser will assume from Seller the due payment,
performance and discharge of the Assumed Liabilities by delivery of good and
sufficient instruments of assumption, in form and substance reasonably
acceptable to Purchaser's and Seller's counsel, as shall be effective to cause
Purchaser to assume the Assumed Liabilities as and to the extent provided in
Section 1.2(a) (the "Assumption Instruments").
(d) Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place on December 31, 2005 (the "Closing Date"), at
the offices of Purchaser, Atlanta, Georgia at 10:00 a.m. or at such other time
as the parties may mutually agree. The Closing shall be deemed effective as of
11:59 p.m., Atlanta time, on the Closing Date.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, jointly and severally, hereby represents and warrants to
Purchaser as follows:
2.1 Organization of Web Internet. Web Internet (i) is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of California and (ii) has full power and authority to conduct the Web
Business as and to the extent now conducted and to own, use and lease the
Assets.
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2.2 Authority. Each Seller has full power and authority to execute and
deliver this Agreement and the other Transaction Documents, to perform his, her
and its obligations hereunder and to consummate the transactions contemplated
thereby, including without limitation to sell and transfer (pursuant to this
Agreement) the Assets. The execution and delivery by each Seller of this
Agreement and the other Transaction Documents, and the performance by each
Seller of his, her and its obligations thereunder, have been duly and validly
authorized. The execution and delivery by Web Internet of this Agreement and the
Transaction Documents to which it is a party and the performance by it of its
obligations thereunder, have been duly and validly authorized by the board of
directors of each of them, and no other corporate action on the part of any of
them or any of its equity holders being necessary. This Agreement and each
Transaction Documents constitutes legal, valid and binding obligations of each
Seller enforceable against each of them, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws and subject to limitations
imposed by general equitable principles.
2.3 No Conflicts.
(a) The execution and delivery by each Seller of this Agreement and the
Transaction Documents and the consummation of the transactions contemplated
thereby will not:
(i) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to the Sellers or any of the Assets; or
(ii) conflict with or result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under, or
require such Seller to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of,
or result in the creation or imposition of any Lien upon such Seller or any of
his, her or its assets under, any contract or license to which such Seller is a
party or by which any of his, her or its assets are bound except for such
breaches and defaults which would not, individually or in the aggregate, have a
Material Adverse Effect on Web Internet.
(b) The execution and delivery by Web Internet of this Agreement and the
Transaction Documents and the consummation of the transactions contemplated
thereby will not conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Certificate of Incorporation of the
Operating Agreement (or other comparable corporate charter documents) of Web
Internet.
2.4 No Consents. No permit, consent, approval, novation, authorization or
other Order of or filing with any Governmental or Regulatory Authority or any
other Person is required with respect to any Seller (or its Affiliates) in
connection with the execution, delivery and consummation of this Agreement or
the Transaction Documents, or the actions of such Seller contemplated thereby,
or to permit Purchaser to continue to conduct the Web Business as it is
currently conducted following the purchase of the Assets by Purchaser pursuant
hereto, except for (a) compliance with any applicable requirements of the
Securities Act and the Exchange Act, (b) the consents to the assignment of the
Customer Accounts, Third Party Agreements and Contracts listed on Schedule 2.11
attached hereto and (c) consents not obtained which would not, individually or
in the aggregate, have a Material Adverse Effect. No permit, consent, approval,
novation, authorization or other Order of or filing with any Governmental or
Regulatory Authority or any other Person is required with respect to Web
Internet in connection with the execution, delivery and consummation of the
Transition Agreement or the actions of Web Internet contemplated thereby.
2.5 Taxes. Except as disclosed on Schedule 2.5, there are no pending or, to
the knowledge of Sellers, threatened, actions or proceedings, assessments or
collections of Taxes of any kind with respect to the Web Business or the Assets
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that could subject Purchaser to any liability for Taxes for any period (or
portion thereof) ending prior to the Closing Date or could materially impair any
of the Assets.
(a) There are no Liens for Taxes upon any of the Assets or any property
with respect to the Web Business, except for Permitted Liens.
(b) None of the Assets is property (i) which any Seller or Purchaser is or
will be required to treat as owned by another person pursuant to the provisions
of Section 168(f) of the Internal Revenue Code of 1954 (as in effect immediately
prior to the Tax Reform Act of 1986); (ii) is "tax-exempt use property" within
the meaning of Section 168(h)(1) of the Code; (iii) is property used
predominately outside the United States within the meaning of Prop. Treas. Reg.
ss. 1.168-2(g)(5); or (iv) is "tax-exempt bond financed property" within the
meaning of Section 168(g)(5) of the Code.
(c) Except as disclosed on Schedule 2.5, there are no unpaid Taxes of any
Seller for which Purchaser may become liable.
(d) Schedule 2.5 discloses all jurisdictions in which the Web Business is
doing business and where it is required to file Tax Returns.
(e) No Seller is a foreign person within the meaning of Section 1445(b)(2)
of the Code.
(f) Purchaser is not required to withhold from the Purchase Price any
amounts for Taxes of any Seller.
2.6 Legal Proceedings. As of the date of this Agreement, except as set
forth on Schedule 2.6, there is no suit, action, hearing, claim, audit,
compliance review, legal, administrative, arbitration, citation, unfair labor
practice charge, employment discrimination charge or other proceeding pending
or, to the knowledge of any Seller, threatened, nor to the knowledge of any
Seller, any investigation pending or threatened affecting the Web Business, any
Seller or any of the Assets before any Governmental or Regulatory Authority
which would have a Material Adverse Effect on the Web Business or the Assets or
that would reasonably be expected to materially adversely affect the ability of
Sellers to consummate the transactions contemplated hereby; and there is no
judgment, decree, injunction, ruling, award, charge, Order or writ of any
Governmental or Regulatory Authority outstanding against, binding upon or
involving the Web Business or the Assets. No Seller is currently charged with
or, to their knowledge, currently under investigation with respect to, any
violation of any provision of any legal Rule in respect of the Web Business. No
director, officer or employee of Web Internet is currently charged with or, to
their knowledge, currently under investigation with respect to, any violation of
any provision of any Legal Rule in respect of the Web Business.
2.7 Legal Compliance. Web Internet is in compliance with all Legal Rules
applicable to it, except for violations which in the aggregate would not have a
Material Adverse Effect with respect to the Web Business or the Assets, or
materially impede Purchaser's ability to use and enjoy the Assets in a manner
substantially similar to the manner in which the Assets were used and enjoyed by
Sellers in the conduct of the Web Business. Web Internet owns, holds or
possesses or lawfully use in the operation of the Web Business all permits,
certificates, licenses, approvals and other authorizations ("Authorizations")
required in connection with the operation of the Web Business as now conducted,
all of which are valid and effective, except for those which in the aggregate,
if not obtained or valid and effective, would not have a Material Adverse Effect
on the Web Business or the Assets. All such material Authorizations are listed
and described on Schedule 2.7. Sellers shall be solely responsible for all
notices and payment obligations arising under the Worker Adjustment and
Retraining Act or any comparable state or local law with respect to the
termination or layoff by Web Internet of any of the employees of the Web
Business which occur on or before the Closing. Sellers further agree to
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indemnify and hold Purchaser harmless for any costs, legal fees, liability or
damages or claims asserted against Sellers arising out of Sellers' failure to
provide the required notices or payments with respect to such terminations or
layoffs.
2.8 ERISA Matters. Purchaser will incur no liability with respect to, or on
account of, and Sellers will retain any liability for, and on account of, any
Benefit Plan. Except as set forth on Schedule 2.8, neither Web Internet nor any
Affiliate of Web Internet has, with respect to any employee of Web Internet,
maintained or contributed to, or been obligated or required to contribute to,
any Plan. Web Internet has complied, in all material respects, with its
obligations (including obligations to make contributions) in respect of the
Benefit Plans, there is no outstanding material liability of Web Internet or any
Affiliate of Web Internet to any such Benefit Plan and all such Benefit Plans
are, to the extent required by applicable law, fully funded to meet potential
claims for benefits by such employees and any former employee. Neither Web
Internet nor any Affiliate of Web Internet has or has had, any liability,
contingent or otherwise, (i) under a multiemployer plan as defined in Section
3(37) of ERISA, (ii) under any Plan or arrangement that provides post-retirement
welfare benefits except as may be required under Section 4980B of the Code, or
(iii) under any Plan that is subject to Title IV of ERISA or Section 412 of the
Code.
2.9 Title to Assets; Business. Sellers own all right, title and interest
in, and have good title to, or in the case of leased or licensed Assets, a valid
leasehold or license or similar interest in, all of the Assets, free and clear
of any and all Liens, except for Permitted Liens and except as set forth on
Schedule 2.9. The sale of the Assets by Sellers to Purchaser pursuant to this
Agreement and the Transaction Documents will effectively convey all of Sellers'
rights in the Assets to Purchaser.
2.10 Intellectual Property Rights. All Intellectual Property necessary to
the conduct of the Web Business as conducted by Sellers immediately prior to
Closing is included in the Assets. All of the Web Internet Intellectual Property
included in the Assets is either the sole and exclusive property of Sellers (the
"Owned Intellectual Property") or is the subject of a license from third parties
in favor of Web Internet under a contract (the "Licensed Intellectual
Property"). Schedule 2.10 sets forth all patents, trademarks, service marks,
brand names, domain names and copyrights included within the definition of
Intellectual Property and related to or used in the Web Business. Except as
disclosed on Schedule 2.10, Sellers have not granted any third party any license
to use the Owned Intellectual Property. With respect to the Owned Intellectual
Property, except as set forth on Schedule 2.10, (i) Sellers have the exclusive
right to use the Owned Intellectual Property included in the Assets, (ii) all
registrations with and applications to Governmental or Regulatory Authorities
required in respect of such Owned Intellectual Property are valid and in full
force and effect and, as of the Closing Date, all Taxes or maintenance fees or
the taking of any other actions by Sellers required to maintain their validity
or effectiveness have been paid or taken, (iii) there are no restrictions on the
direct or indirect transfer of such Owned Intellectual Property, (iv) Sellers
will deliver to Purchaser, on or within fifteen (15) business days after the
execution of this Agreement, documentation, to the extent existing, with respect
to any invention, process, design, computer program or other know-how or trade
secret included in such Owned Intellectual Property, which documentation is
accurate in all material respects, (v) Sellers have taken security measures that
Sellers deem reasonable to protect the secrecy, confidentiality and value of any
of its trade secrets included in the Owned Intellectual Property, (vi) to
Sellers' knowledge, no such Owned Intellectual Property is being infringed by
any other Person, (vii) to Sellers' knowledge, no third party has asserted
ownership rights in such Owned Intellectual Property, and (viii) no action is
pending or, to the knowledge of Sellers, threatened, that seeks to limit, cancel
or question the validity of Sellers' right to own or use such Owned Intellectual
Property. With respect to the Licensed Intellectual Property, (a) Sellers'
conduct of the Web Business prior to the Effective Date is in material
compliance with respect to any applicable contract governing the use of such
Licensed Intellectual Property, (b) Sellers have received no notice from any
party to an applicable contract that it is in breach of any material obligations
in such contract, (c) to Seller's knowledge, there are no registrations with and
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applications to Governmental or Regulatory Authorities required in respect of
such Licensed Intellectual Property, (d) Seller will deliver to Purchaser, on or
within fifteen (15) business days after the execution of this Agreement, all
documentation in its possession relating to such Licensed Intellectual Property,
and (e) to the knowledge of Sellers, no party to any license agreement relating
to Licensed Intellectual Property is, or is alleged to be, in breach or default
thereunder. To Sellers' knowledge, the use of the Assets and the operation of
the Web Business do not infringe upon any Intellectual Property right of any
third party, and to Sellers' knowledge, no former or current employee, agent,
consultant or independent contractor involved in the conception or development
of Owned Intellectual Property has a valid claim of ownership to the Owned
Intellectual Property. Sellers have not received notice that any Seller is
infringing any Intellectual Property of any other Person in connection with the
conduct of the Web Business, no claim is pending or, has been made upon any
Seller to such effect that has not been resolved.
2.11 Contracts and Agreements. As of the date hereof, Schedule 2.11 sets
forth all written contracts, agreements, leases, licenses or instruments
relating to the Web Business and that are material to the Web Business
including, without limitation, the Customer Accounts, Third Party Agreements and
Contracts listed on Schedule 1.1(a). Each contract and agreement listed on
Schedule 2.11 with respect to Seller (i) is valid, binding, enforceable and in
full force and effect in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity), (ii) subject to obtaining
any necessary consents in respect thereto in accordance with Section 4.7 hereof,
the consummation of the transactions contemplated herein will not affect the
validity, binding nature or enforceability thereof, (iii) to Sellers' knowledge,
Sellers that are parties to the contracts and agreements listed on Schedule 2.11
are not, and the other party thereto is not, in default thereof and (iv) to
Sellers' knowledge, no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification or
acceleration thereunder.
2.12 Financial Statements. Copies of certain unaudited financial statements
of Web Internet are included on Schedule 2.12 (the "Financial Statements"). The
Financial Statements present fairly the financial condition and results of
operations of Web Internet as of such dates, and are correct and complete and
consistent with the books and records of Web Internet in all material respects.
2.13 Condition of Tangible Assets. All material facilities, equipment and
other material items of tangible property and assets that are included in the
Assets are in the aggregate in operating condition and repair, subject to normal
wear and maintenance, and are usable in the regular and ordinary course of
business.
2.14 Debt Instruments. Except for (i) the Web Service Debt, (ii) the
Convertible Promissory Note, (iii) Liabilities disclosed on the Financial
Statements, (iv) Liabilities incurred in the ordinary course of business since
the date of the balance sheet included in the Financial Statements and (v) the
Liabilities listed on Schedule 2.14(a), Web Internet does not have any
debentures, notes, mortgages, indentures, guarantees, capitalized leases or
other instruments related to the Web Business under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed,
in each case to which Web Internet is currently a party, has or may acquire
rights or may become subject to any Liability or obligation or by which it or
the Assets are bound. No Seller is a guarantor or otherwise indirectly or
collaterally liable for any Liability related to the Web Business of any other
Person. None of the Liabilities of the Web Business or of any Seller incurred in
connection with the conduct of the Web Business is guaranteed by or subject to a
similar contingent obligation of any other Person. Schedule 2.14(b) sets forth,
as of the Agreement Date, the outstanding principal amount of each of the
Convertible Promissory Note and the Web Service Debt, together with the accrued
and unpaid interest applicable to each of them.
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2.15 Sufficiency of Assets. The Assets and the Excluded Assets constitute
all of the assets necessary to operate the Web Business in the manner presently
operated by the Sellers.
2.16 Brokers. No Seller has Liability, directly or indirectly, to pay any
fees, commissions or other amounts to any Person in connection with this
Agreement or the transactions contemplated hereby or in connection with any sale
of the Assets. Sellers agree to indemnify and hold harmless Purchaser for any
such Liability.
2.17 Disclosure. To Sellers' knowledge, no representation or warranty made
by any Seller in this Agreement or in any of the Schedules or Exhibits appended
hereto contains any untrue statement of a material fact or omits a material fact
necessary to make each statement contained herein or therein, in light of the
circumstances in which they were made, not materially misleading.
2.18 Solvency. The consummation of the transactions contemplated by this
Agreement will not cause either Seller to cease to (i) have assets that are
greater than the sum of all its debts or (ii) be capable of paying its debts as
they become due. Neither Seller is entering into this Agreement or any of the
other agreements referenced in this Agreement with the intent to defraud, delay
or hinder their respective creditors and the consummation of the transactions
contemplated by this Agreement, and the other agreements referenced in this
Agreement, will not have any such effect. The transactions contemplated in this
Agreement or any agreements referenced in this Agreement will not constitute a
fraudulent conveyance, or otherwise give rise to any right of any creditor of
either Seller to any of the Assets after the Closing.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
3.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota, and has
full corporate power and authority to own and/or lease all of its properties and
assets, and to carry on its business as now being conducted.
3.2 Authority; Non-Contravention. This Agreement, and the other agreements
contemplated hereby to be executed by the Purchaser pursuant hereto have been
duly executed and delivered by Purchaser, and constitute valid and binding
obligations of Purchaser enforceable against it in accordance with their terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws and subject to limitations
imposed by general equitable principles. The Purchaser has full power and
authority to execute and deliver and perform its obligations under this
Agreement, and the other agreements contemplated herein to be executed by
Purchaser. The execution and delivery by Purchaser of this Agreement does not,
and the execution and delivery by Purchaser of this Agreement, the performance
by Purchaser of its obligations under this Agreement and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
a violation or breach of any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of Purchaser.
3.3 No Consents. No permit, consent, approval, novation, authorization or
other Order of or filing with any Governmental or Regulatory Authority or any
other Person is required in connection with the execution, delivery and
9
consummation of this Agreement and the other agreements contemplated hereby to
be executed by Purchaser or the actions of the Purchaser contemplated hereby.
3.4 Brokers. Purchaser has no Liability, directly or indirectly, to pay any
fees, commissions or other amounts to any Person in connection with this
Agreement or the transactions contemplated hereby or in connection with any
purchase of the Assets. Purchaser agrees to indemnify and hold harmless Sellers
from any such liability.
3.5 Disclosure. No representation or warranty made by Purchaser in this
Agreement or in any of the Schedules or Exhibits appended hereto contains any
untrue statement of a material fact or omits a material fact necessary to make
each statement contained herein or therein, in light of the circumstances in
which they were made, not materially misleading.
ARTICLE 4.
COVENANTS OF SELLERS AND PURCHASERS
4.1 Operation of Web Business. Prior to the Closing, Sellers shall operate
the Web Business in substantially the same manner as they were operating the Web
Business on the date hereof, consistent with past custom and practice, and
Sellers shall use their commercially reasonable efforts to preserve the Web
Business and its goodwill and all Customer Accounts, Third Party Agreements and
Contracts listed or described in any Schedule to this Agreement. Prior to the
Closing, Sellers: (i) shall promptly notify Purchaser of any material change in
the condition (financial or otherwise) of the business, assets, or Liabilities
of the Web Business; (ii) shall promptly advise Purchaser in writing of the
commencement or threat of any material claim, litigation or investigative
proceeding relating to the Web Business or the Assets; (iii) shall not dispose
of, mortgage, pledge or otherwise encumber any of the Assets, except in the
ordinary course of the Web Business; (iv) shall not amend, terminate or change
(except in the ordinary course of business consistent with past practice) any
Customer Account, Third Party Agreement or Contract listed or described in any
Schedule to this Agreement, or do or permit any act or omit to do any act which
will cause a breach of any such agreement or contract. No disclosure pursuant to
this Section 4.1 shall be deemed to amend or supplement any Schedule attached
hereto or to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant.
4.2 Full Access. Sellers will permit representatives of Purchaser to have
full access (at all reasonable times, and in a manner so as not to interfere
with the normal business operations of the Web Business) to all premises,
properties, personnel, books, records, contracts, and documents of or pertaining
to the Web Business and the Assets.
4.3 ICANN Registrar Accreditation. At the Closing, Web Internet shall have
completed, executed and delivered to Purchaser the section of the ICANN
application for Transfer of Registrar Accreditation entitled Request to Transfer
Accreditation.
4.4 Employment Agreements. At the Closing, Purchaser shall offer employment
to each of Pemble, Trahey, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ on the
terms set forth in Schedule 4.5, attached hereto.
4.5 Further Actions. On and after the Closing, each of the parties hereto
shall execute such documents and other instruments and take such further actions
as may be reasonably required or desirable to carry out the provisions hereof
and consummate the transactions contemplated hereby. Upon the terms and subject
10
to the conditions hereof, each of the parties hereto shall use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all other things necessary, proper or advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement and to obtain and record in a timely manner all necessary
waivers, assignments, consents, including specifically consents to the
assignment of the Customer Accounts, the Third Party Agreements and the
Contracts, listed in Schedule 2.11, attached hereto and assignment of the Web
Service Company Assets, and approvals and to effect all necessary registrations
and filings.
4.6 Noncompetition Covenant. For two (2) years after the Closing Date, none
of the Sellers or their Affiliates may engage, directly or indirectly, within
any area in which the Web Business is currently conducted, in the provision of
web hosting services or domain registration services to customers or acquire,
own, manage, operate, control, be employed by or participate in the ownership,
management operation or control of, except on behalf of Purchaser (pursuant to
the Transaction Documents or otherwise) or be connected in any manner with, any
business advertising web hosting services or domain registration services of the
type and character engaged in by the Web Business on and prior to the Closing
Date. For these purposes, ownership of securities of 1% or less of any class of
securities of a Person engaged in the business of providing website hosting or
domain registration services shall not be considered to be competition with the
Purchaser.
4.7 Post-Closing Obligations of Web Internet. For a period of one year and
one day after the Closing Date, Web Internet agrees that it will not (i) make an
assignment for the benefit of creditors, (ii) file a petition in bankruptcy or
seeking reorganization, (iii) file a petition to have a receiver appointed to
take possession of all or substantially all of its assets, or (iv) engage in any
business activity, voluntarily assume or undertake any indebtedness, liability
or obligation or acquire any significant asset except (Y) to the extent
contemplated by the Transition Agreement or (Z) as Interland may consent in
writing.
4.8 Post-Closing Obligations of Interland. Interland agrees to promptly
reimburse Web Internet in respect of all other Liabilities and obligations of
Web Internet (including, without limitation, those related to the Web Business)
of any kind, character or description whatsoever, whether actual or contingent,
direct or indirect, matured or unmatured, liquidated or unliquidated, or known
or unknown, whether arising out of occurrences prior to, at or after the date of
this Agreement (the "Unscheduled Liabilities"); provided, however, that in no
event shall Purchaser be liable for Unscheduled Liabilities (w) that constitute
a liability or obligation of Web Internet under this Agreement, (x) that are
incurred by Web Internet after the later of (i) six months following the Closing
Date or (ii) the termination date of the Transition Agreement or (y) that
exceed, in the aggregate, the Unscheduled Liabilities Cap (as hereafter
defined). For purposes of this section 4.8, the Unscheduled Liabilities Cap
shall be $200,000; provided, however, that in the event the Web Internet Cash at
Closing is less than $469,000, the Unscheduled Liabilities Cap shall be reduced
dollar-for-dollar by the amount equal to the difference between the actual Web
Internet Cash at Closing and $469,000. (The Scheduled Liabilities and the
Unscheduled Liabilities (up to the Unscheduled Liabilities Cap) are referred to
collectively herein as the "Assumed Liabilities.")
ARTICLE 5.
CONDITIONS OF CLOSING BY PURCHASER
The obligations of Purchaser hereunder are, at its option, subject to
satisfaction, on or prior to the Closing Date or such earlier date as
specifically provided below, of each of the following conditions:
5.1 Representations, Warranties and Covenants.
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(a) All representations and warranties of Sellers made in this Agreement or
in any Exhibit, Schedule or document delivered pursuant hereto, shall be true
and complete in all material respects as of the date hereof and on and as of the
Closing Date as if made on and as of that date.
(b) All of the terms, covenants and conditions to be complied with and
performed by Sellers on or prior to the Closing Date shall have been complied
with or performed in all material respects.
(c) Purchaser shall have received a certificate, dated as of the Closing
Date, from Seller, executed by all Sellers to the effect that: (a) the
representations and warranties of Sellers contained in this Agreement are true
and complete in all material respects on and as of the Closing Date as if made
on and as of that date; and (b) Sellers have complied with or performed in all
material respects all terms, covenants and conditions to be complied with or
performed by it on or prior to the Closing Date.
5.2 Adverse Proceedings. No suit, action, claim or governmental proceeding
shall be pending against, and no order, decree or judgment of any court, agency
or other governmental authority shall have been rendered against, any party
hereto which: (a) would render it unlawful, as of the Closing Date, to effect
the transactions contemplated by this Agreement in accordance with its terms;
(b) questions the validity or legality of any transaction contemplated hereby;
(c) seeks to enjoin any transaction contemplated hereby; or (d) is a petition of
bankruptcy by or against any Seller, an assignment by any Seller for the benefit
of its creditors, or other similar proceeding.
5.3 Material Adverse Change. Between the date of this Agreement and the
Closing Date, there shall have occurred no Material Adverse Change in the
condition (financial or otherwise) or operations of the Web Business or the
Assets nor any material adverse change in the Customer Accounts, Third Party
Agreements or Contracts, as determined in the sole discretion of Purchaser.
5.4 ▇▇▇▇▇▇ Employment Agreement. ▇▇▇▇▇▇ and Purchaser shall have executed
the employment agreement in the form attached hereto as Exhibit A (the "▇▇▇▇▇▇
Employment Agreement").
5.5 Closing Deliveries. All closing deliveries of Sellers set forth in this
Agreement have been executed and delivered to Purchaser, including, without
limitation, the execution and delivery of the Assignment Instruments and the
Assumption Instruments.
5.6 ICANN Registrar Accreditation. Web Internet shall have completed,
executed and delivered to Purchaser the section of the ICANN application for
Transfer of Registrar Accreditation entitled Request to Transfer Accreditation.
5.7 Transition Agreement. Purchaser and Web Internet shall have entered
into a Transition Agreement, in the form attached hereto as Exhibit B.
5.6 Permits and Authorizations. Purchaser shall have all material permits,
licenses, authorizations and approvals necessary for it to operate the Web
Business.
5.9 Amendment to Web Service Debt Agreement. Purchaser and Web Service have
entered into an Amendment to the Web Service Debt Agreement on terms acceptable
to Purchaser, Sellers and Web Service.
5.10 Amendment to Convertible Promissory Note. Either (a) Purchaser and
SWSOFT Holdings LTD have entered into an Amendment to the Convertible Promissory
Note on terms acceptable to Purchaser, Sellers and SWSOFT Holdings LTD or (b)
SWSOFT Holdings LTD shall have agreed to release Purchaser and Sellers from any
12
and all obligations under the Convertible Promissory Note in consideration of
Purchaser's payment of a lump sum in an amount acceptable to Purchaser.
5.11 Web Service Company Assets. Web Service shall have executed an
appropriate assignment and assumption agreement sufficient to transfer to
Purchaser exclusive ownership of the trademark and domain name rights listed on
Schedule 5.11.
5.12 Membership Quitclaim. Each of the members of Web Internet shall have
executed and delivered to Purchaser a quitclaim assignment agreement sufficient
to transfer to Purchaser any interest such members may have in any of the Assets
or in any assets used by Web Internet in the Web Business.
5.13 Membership Interests Option. Each of the members of Web Internet shall
have executed and delivered to Purchaser a Membership Interests Option Agreement
that authorizes Purchaser to purchase all of the membership interests in Web
Internet, at any time after Closing, in consideration of ten dollars ($10.00).
5.14 Consents. All consents, approvals and waivers from governmental
authorities, customers and other parties necessary to permit Sellers to transfer
the Assets to Purchaser as contemplated hereby (including all necessary consents
to the assignment of Customer Accounts, the Third Party Agreements and the
Contracts) shall have been obtained to Purchaser's satisfaction, unless such
consents, approvals and waivers shall have been waived by Purchaser.
ARTICLE 6.
CONDITIONS OF CLOSING BY SELLERS
The obligations of Sellers hereunder are, at Sellers' option, subject to
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
6.1 Representations, Warranties and Covenants.
(a) All representations and warranties of Purchaser made in this Agreement
or in any Exhibit, Schedule or document delivered pursuant hereto, shall be true
and complete in all material respects as of the date hereof and on and as of the
Closing Date as if made on and as of that date, except for changes expressly
permitted or contemplated by the terms of this Agreement, and except to the
extent expressly made as of an earlier date.
(b) All the terms, covenants and conditions to be complied with and
performed by Purchaser on or prior to the Closing Date shall have been complied
with or performed in all material respects.
(c) Sellers shall have received a certificate, dated as of the Closing
Date, executed by an authorized officer of Purchaser, to the effect that: (a)
the representations and warranties of Purchaser contained in this Agreement are
true and complete in all material respects on and as of the Closing Date as if
made on and as of that date; and (b) that Purchaser has complied with or
performed in all material respects all terms, covenants and conditions to be
complied with or performed by it on or prior to the Closing Date.
6.2 Adverse Proceedings. No suit, action, claim or governmental proceeding
shall be pending against, and no order, decree or judgment of any court, agency
or other governmental authority shall have been rendered against, any party
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hereto which: (a) would render it unlawful, as of the Closing Date, to effect
the transactions contemplated by this Agreement in accordance with its terms;
(b) questions the validity or legality of any transaction contemplated hereby;
(c) seeks to enjoin any transaction contemplated hereby; or (d) is a petition of
bankruptcy by or against Purchaser, an assignment by Purchaser for the benefit
of its creditors, or other similar proceeding.
6.3 Closing Deliveries. All closing deliveries of Purchaser set forth in
this Agreement have been executed and delivered to Sellers, including, without
limitation, the execution and delivery of the Assignment Instruments and the
Assumption Instruments.
6.4 ▇▇▇▇▇▇ Employment Agreement. ▇▇▇▇▇▇ and Purchaser shall have executed
the ▇▇▇▇▇▇ Employment Agreement.
6.5 Transition Agreement. Purchaser and Web Internet shall have entered
into a Transition Agreement, in the form attached hereto as Exhibit B.
6.6 Amendment to Web Service Debt Agreement. Purchaser and Web Service have
entered into an Amendment to the Web Service Debt Agreement on terms acceptable
to Purchaser, Sellers and Web Service, including, without limitation, an
unconditional release from Web Service of Sellers' obligations thereunder.
6.7 Amendment to Convertible Promissory Note. Either (a) Purchaser and
SWSOFT Holdings LTD have entered into an Amendment to the Convertible Promissory
Note on terms acceptable to Purchaser, Sellers and SWSOFT Holdings LTD,
including, without limitation, an unconditional release from Web Service of
Sellers' obligations thereunder. or (b) SWSOFT Holdings LTD shall have agreed to
release Purchaser and Sellers from any and all obligations under the Convertible
Promissory Note in consideration of Purchaser's payment of a lump sum in an
amount acceptable to Purchaser .
6.8 Consents. All consents, approvals and waivers from governmental
authorities, customers and other parties necessary to permit Sellers to transfer
the Assets to Purchaser as contemplated hereby (including all necessary consents
to the assignment of Customer Accounts, the Third Party Agreements and the
Contracts) shall have been obtained to Seller's satisfaction, unless such
consents, approvals and waivers shall have been waived by Seller.
ARTICLE 7.
INDEMNIFICATION AND SURVIVAL
7.1 Indemnification by Sellers. On and after the Closing Date, subject to
the limitations set forth below, each Seller, jointly and severally, shall
defend, indemnify and hold harmless Purchaser, each of its Affiliates and each
of their respective Affiliates, officers, directors, employees, agents,
successors and assigns (collectively, "Purchaser's Indemnified Persons"), and
shall reimburse Purchaser's Indemnified Persons, for, from and against, each and
every demand, claim (including Customer Claims and other third party claims),
fine, fee, penalty, deficiency, loss, liability, judgment, and damage (including
interest, costs and expenses, including court costs, fines, penalties, fees of
accountants and other experts and other expenses of litigation, reasonable
attorneys' fees) (each a "Loss," and collectively, "Losses") imposed on or
incurred by Purchaser's Indemnified Persons, directly or indirectly, relating
to, resulting from or arising out of: (i) any breach of any representation or
warranty made by Sellers in any respect, whether or not Purchaser's Indemnified
Persons relied thereon or had any knowledge thereof; or (ii) any breach or
14
nonfulfillment of any covenant, agreement or other obligation of Sellers under
this Agreement, or any certificate or other document delivered or to be
delivered pursuant hereto; or (iii) relating to, resulting from or arising out
of any Retained Liability or for any Taxes of the Sellers for any period ending
on or before the Closing; or (iv) the operation of the Web Business or the use
or ownership of the Assets prior to the Closing.
Notwithstanding the foregoing,
(a) the Sellers shall have no obligation to indemnify or hold harmless the
Purchaser except to the extent that the aggregate amount of Losses incurred by
the Purchaser exceeds $100,000; and
(b) the Sellers shall have no obligation to make indemnification payments
hereunder that exceed in the aggregate the sum of (i) $300,000, plus (ii) the
market value (defined as the average closing price of Interland, Inc. common
stock at the close of the market for the twenty days preceding the date on which
Purchaser gives written notice of a request for indemnification to Sellers) of
the vested portion of the restricted stock issued at Closing by Purchaser to
Will ▇▇▇▇▇▇).
In determining the foregoing thresholds and in otherwise determining the
amount of any Losses for which the Purchaser is entitled to assert a claim for
indemnification, the amount of any such Losses shall be determined after
deducting therefrom the amount of any insurance proceeds or other third party
recoveries received by the Purchaser in respect of such Losses. The amount of
Losses shall also take into account tax costs and benefits to the Purchaser as a
result of the matters giving rise to the Losses.
7.2 Indemnification by Purchaser On and after the Closing Date, Purchaser
shall defend, indemnify and hold harmless Sellers and their Affiliates,
officers, employees, agents, successors and assigns (Sellers and such other
Persons, collectively "Sellers Indemnified Persons") and shall reimburse Sellers
Indemnified Persons for, from and against all Losses imposed on or incurred by
Sellers Indemnified Persons, directly or indirectly, relating to, resulting from
or arising out of (i) any breach of any representation or warranty made by
Purchaser in this Agreement in any respect, whether or not Sellers Indemnified
Persons relied thereon or had knowledge thereof, or (ii) any breach or
nonfulfillment of any covenant, agreement or other obligation of Purchaser under
this Agreement or any certificate or other document delivered or to be delivered
pursuant hereto, or (iii) relating to, resulting from or arising out of any
Assumed Liability for any period ending after the Closing; or (iv) the operation
of the Web Business or the use or ownership of the Assets from and after the
Closing.
Notwithstanding the foregoing,
(a) the Purchaser shall have no obligation to indemnify or hold harmless
the Sellers except to the extent that the aggregate amount of Losses incurred by
the Sellers exceeds $100,000; provided, however, that this limitation shall not
apply to Purchaser's obligation and pay when due the Assumed Liabilities; and
(b) the Purchasers shall have no obligation to make indemnification
payments hereunder that exceed in the aggregate (i) the amount determined in
subsection 7.1(b) above plus (ii) the amount of the Assumed Liabilities.
In determining the foregoing thresholds and in otherwise determining the
amount of any Losses for which the Sellers are entitled to assert a claim for
indemnification, the amount of any such Losses shall be determined after
deducting therefrom the amount of any insurance proceeds or other third party
15
recoveries received by the Sellers in respect of such Losses. The amount of
Losses shall also take into account tax costs and benefits to the Sellers as a
result of the matters giving rise to the Losses.
7.3 Notice and Defense of Third-Party Claims. If any action, claim or
proceeding shall be brought or asserted by a third party against an indemnified
party or any successor thereto (the "Indemnified Person") in respect of which
indemnity may be sought under this Article 7 from an indemnifying person or any
successor thereto (the "Indemnifying Person"), the Indemnified Person shall give
prompt written notice of such action or claim to the Indemnifying Person who
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Person and the payment of all expenses; except
that any delay or failure to so notify the Indemnifying Person shall relieve the
Indemnifying Person of its obligations hereunder only to the extent, if at all,
that it is prejudiced by reason of such delay or failure. The Indemnified Person
shall have the right to employ separate counsel in any of the foregoing actions,
claims or proceedings and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Indemnified Person
unless both the Indemnified Person and the Indemnifying Person are named as
parties and the Indemnified Person shall in good faith determine that the
representation by the same counsel is inappropriate.
7.4 Survival of Representations and Warranties and Agreements. The
representations and warranties made by the parties in this Agreement or in any
document, certificate or instrument executed and delivered pursuant hereto
(including those made in the Schedules and Exhibits hereto) shall survive the
Closing hereunder and shall not merge in the performance of any obligation by
any party hereto, and will remain in full force through and including March 31,
2007, without regard to any investigation made by any of the parties; provided,
however, that (i) the representations and warranties set forth in Sections 2.5
(Taxes) and 2.8 (ERISA Matters) will survive until 30 days after the expiration
of the applicable statute of limitations (with extensions). Any claim (whether
or not fixed as to liability or liquidated as to amount) pending on the
expiration date of the applicable survival period set forth above for which a
claim notice has been given in accordance with this Article VII on or before
such expiration date may continue to be asserted and indemnified against until
finally resolved. All covenants and obligations undertaken by the parties in
this Agreement or in any document, certificate or instrument executed and
delivered pursuant hereto (including those made in the Schedules or Exhibits
hereto) shall survive in accordance with their terms.
7.5 Exclusive Remedy. From and after the Closing, no party hereto shall be
liable or responsible in any manner whatsoever to the other parties, whether for
indemnification or otherwise, except for indemnity as expressly provided in this
Article 7 and elsewhere in this Agreement which provides the exclusive remedies
and causes of action of the parties hereto with respect to any matter arising
out of or in connection with the Agreement or any Schedule hereto or any opinion
or certificate delivered in connection herewith; provided that the limitations
contained in this Article 7 shall not apply to any claims arising out of the
fraud of any party. After the Closing, Purchaser shall not be entitled to a
rescission of the sale of the Assets. Notwithstanding anything to the contrary
contained herein, the rights and remedies set forth in the Transition Agreement
shall be the sole and exclusive source of rights and remedies in respect thereto
and the parties' respective rights thereunder shall not be governed or limited
by any provision contained herein.
7.6 Liability Limitation. Notwithstanding anything to the contrary
contained herein, in no event shall any party be liable for any punitive,
special, incidental or consequential damages, including lost profits, arising
out of any breach of representations, warranties, covenants or other provisions
of this Agreement.
16
ARTICLE 8.
DEFINITIONS
(a) Defined Terms. As used in this Agreement, the following defined terms
have the meanings indicated below:
"401(k) Plan" has the meaning ascribed to it in Section 5.3
"Affiliate" means any Person that directly, or indirectly through one of
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agreement" means this Asset Purchase Agreement and the Schedules and
Exhibits hereto, as the same shall be amended from time to time.
"Assets" are the Web Internet Assets.
"Assignment Instruments" has the meaning ascribed to it in Section 1.4(a).
"Assumed Liabilities" has the meaning ascribed to it in Section 4.8.
"Assumption Instruments" has the meaning ascribed to it in Section 1.4(a).
"Benefit Plan" means any Plan established by any Seller, or any
predecessors or Affiliates of any Seller, existing since August 31, 2001 to
which any Seller contributes or has contributed or under which any Seller or any
of its Affiliates has, or since August 31, 2001 had, an obligation to
contribute, on behalf of any employee, former employee or director, or under
which any employee, former employee or director of any Seller or any dependent
or beneficiary thereof is covered, is eligible for coverage or has benefit
rights.
"Business Day" means a day other than Saturday, Sunday or any day on which
banks located in the State of New York are authorized or obligated to close.
"Closing" means the closing of the transactions contemplated by Section
1.5.
"Closing Date" has the meaning set forth in Section 1.5.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Confidential Information" has the meaning ascribed to it in Section 9.6.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
17
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States or any state, county, city or other political subdivision
thereof.
"Indebtedness" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases, but not any real estate leases, and (v) in the nature
of guarantees of the obligations described in clauses (i) through (iv) above of
any other Person.
"Indemnified Person" has the meaning ascribed to it in Section 7.3.
"Indemnifying Person" has the meaning ascribed to it in Section 7.3.
"Intellectual Property" means all patents and patent rights, trademarks and
trademark rights, trade names and trade name rights, service marks and service
▇▇▇▇ rights, service names and service name rights, brand names, domain names,
inventions, processes, formulae, copyrights and copyright rights, trade dress,
business and product names, logos, slogans, trade secrets, industrial models,
processes, designs, methodologies, computer programs (including all source
codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how, all pending applications for and
registrations of patents, trademarks, service marks and copyrights and all
goodwill pertaining to the forgoing.
"IRS" means the United States Internal Revenue Service. ---
"Knowledge" means, with respect to Web Internet, the knowledge of Will
▇▇▇▇▇▇ and the other members of Web Internet.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, or any state,
county, city or other political subdivision, or any Governmental or Regulatory
Authority.
"Licensed Intellectual Property" has the meaning assigned to it in Section
2.10.
"Legal Rules" means the requirements of all laws, codes, statutes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations of all Governmental or Regulatory Authorities
with jurisdiction.
"Liabilities" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"Licensed Intellectual Property" has the meaning ascribed to it in Section
2.10.
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale contract, title retention contract or other contract to give
any of the foregoing.
18
"Loss" and "Losses" have the meanings ascribed to them in Section 7.1
"Material Adverse Effect" and "Material Adverse Change" mean any Loss in
excess of $50,000 resulting from a breach of an individual representation,
warranty or covenant.
"NASDAQ" has the meaning ascribed to it in Section 9.5.
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"Owned Intellectual Property" has the meaning assigned to it in Section
2.10.
"Panel" has the meaning ascribed to it in Section 9.9.
"Permitted Lien" means (i) any Lien for Taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established, (ii) any statutory Lien arising in the ordinary
course of business by operation of Law with respect to a Liability that is not
yet due or delinquent and (iii) those liens identified on Schedule 2.9.
"Person" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a multiemployer
plan within the meaning of Section 3(37) of ERISA.
"Purchase Price" has the meaning ascribed to it in Section 1.3(a).
"Purchase Price Allocation" has the meaning ascribed to it in Section
1.3(b).
"Purchaser Representatives" means Purchaser's officers, employees, counsel,
advisors and representatives.
"Purchaser's Indemnified Persons" has the meaning ascribed to it in Section
7.1.
"Representatives" means officers, directors, employees, agents, counsel,
accountants, financial advisors, consultants and other representatives.
"Retained Liabilities" has the meaning ascribed to it in Section 1.2(b).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" has the meaning ascribed to it in the forepart of this Agreement.
19
"Tax" and "Taxes" mean any Governmental or Regulatory Authority income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax, fee, charge, lien impost or assessment of any
kind whatsoever, including any interest, penalty, or addition thereto.
"Tax Returns" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Transaction Documents" means this Agreement, the Transition Agreement, the
Assignment Instruments, the Assumption Instruments and any other documents,
instruments or contracts entered into by any of the parties to this Agreement in
connection with this Agreement or the Closing.
"Web Service Company Assets" means the domain name, "▇▇▇.▇▇▇", Web
Service's trademark rights, if any, in the trademark "▇▇▇.▇▇▇", Web Service's
trademark rights, if any, in the trademark "WEBDOTCOM", all of Web Service's
goodwill therein, and any other assets required to be transferred to Purchaser
by Web Service at Closing.
(b) Construction of Certain Terms and Phrases. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender;
(ii) words using the singular or plural number also include the plural or
singular number, respectively; (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement and (v) the phrases "ordinary course of business" and "ordinary course
of business consistent with past practice" refer to the business and practice of
Seller in connection with the Business. Whenever this Agreement refers to a
number of days, such number shall refer to calendar days unless Business Days
are specified.
ARTICLE 9.
MISCELLANEOUS
9.1 Notices. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission (which is acknowledged by other means)
or mailed (first class postage prepaid) to the parties at the following
addresses or facsimile numbers:
If to Sellers, to:
Will ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Jeffer, Mangels, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇▇ of the Stars, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller, to:
Interland, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & French, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇..
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt as of such time as
receipt is acknowledged by other than automatic means, and (iii) if delivered by
mail in the manner described above to the address as provided in this Section,
be deemed given upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy of
such notice, request or other communication is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.
9.2 Entire Agreement. This Agreement (including the Recitals, Schedules and
Exhibits hereto) and the other agreements and instruments, the execution and
delivery of which are provided for herein, constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and terminates and supersedes any and all prior agreements, arrangements and
understandings, both oral and written, among the parties hereto concerning the
subject matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER PURCHASER
NOR ANY SELLER MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY HIMSELF, HERSELF OR
ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL
ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
21
ONE OR MORE OF THE FOREGOING.
9.3 Expenses. Subject to Section 9.4 and except as otherwise expressly
provided herein, Purchaser and Sellers will pay his, her or its own respective
costs and expenses in connection with the negotiation, preparation, execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, including, but not limited to, attorneys' fees,
accountants' fees and other professional fees and expenses.
9.4 Attorneys' Fees. If a legal proceeding is brought to enforce or
interpret the provisions of this Agreement or any other agreement or instrument
provided for herein or as to the rights or obligations of any party to this
Agreement or such other agreement or instrument, the prevailing party in such
action shall be entitled to recover as an element of such party's costs of suit,
and not as damages, a reasonable attorneys' fee to be fixed by the court. The
prevailing party shall be the party who is entitled to recover its costs of suit
as ordered by the court or by applicable law or court rules. A party not
entitled to recover its costs shall not recover attorneys' fees.
9.5 Public Announcements. Except as otherwise required by Law or the rules
and regulations of the Nasdaq National Market ("NASDAQ"), neither Sellers nor
Purchaser will issue or make any reports, statements or releases to the public
or generally to the employees, customers, suppliers or other Persons to whom
Sellers sell goods or provides services in connection with the Web Business or
with whom Sellers otherwise have significant business relationships in
connection with the Web Business with respect to this Agreement or the
transactions contemplated hereby without the consent of the other parties
hereto, which consent shall not be unreasonably withheld. If any party is unable
to obtain the approval of its public report, statement or release from the other
parties and such report, statement or release is required by Law or NASDAQ, then
such party may make or issue the legally required report, statement or release
and promptly furnish the other parties with a copy thereof. Sellers and
Purchaser will also obtain the other parties' prior approval of any press
release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement, except as
otherwise required by law, or NASDAQ.
9.6 Confidentiality. Each party hereto will hold, and will use its best
efforts to cause his, her or its Affiliates, and their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative), all documents and information concerning any
other party or any of his, her or its Affiliates and their respective customers
furnished to such party by any other party or such other party's
Representatives, or obtained in the course of its performance of this Agreement
or the Transition Agreement (the "Confidential Information"), except to the
extent that such documents or information can be shown to have been (a)
previously known by the party receiving such documents or information, (b) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (c) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential; provided that following the
Closing the foregoing restrictions will not apply to Purchaser's use of
documents and information concerning the Web Business, the Assets or the Assumed
Liabilities furnished by Sellers hereunder but will continue to apply to
documents and information, if any, solely concerning the Sellers, but not
relating to the Web Business, Assets or Assumed Liabilities. Notwithstanding the
foregoing sentence, the restrictions contained in this Section 9.6 shall not
bind a party if such party is (i) compelled to disclose by judicial or
administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law, or (ii) if such Confidential Information is disclosed in an
22
Action or Proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder,
9.7 Waiver and Amendment. No waiver, amendment, modification or change of
any provision of this Agreement shall be effective unless and until made in
writing and signed by Purchaser (by a duly authorized officer other than any
former employee or direct or indirect owner of any of the Sellers) and Sellers.
No waiver, forbearance or failure by any party of its right to enforce any
provision of this Agreement shall constitute a waiver or estoppel of such
party's right to enforce any other provision of this Agreement or a continuing
waiver by such party of compliance with any provision.
9.8 Successors and Assigns; No Third Party Beneficiaries. This Agreement
shall not be assigned or assignable by any Seller without the prior written
consent of Purchaser or by Purchaser without the prior written consent of
Sellers; provided, however, that Purchaser may assign without the consent of
Sellers, but with not less than ten Business Days advance notice to Sellers, its
rights hereunder to any Affiliate of which Purchaser owns at least 80% of the
issued and outstanding equity thereof; in which event all references herein to
Purchaser shall be deemed references to such assignee, except that all
representations and warranties made herein with respect to Purchaser as of the
date of this Agreement shall be deemed representations and warranties also to be
made with respect to such assignee to the extent applicable as of the date of
such designation. No such assignment shall relieve Purchaser of any obligation
hereunder. Any purported assignment in violation of this Agreement will be void
ab initio. Subject to the preceding sentence, each term and provision of this
Agreement shall be binding upon and enforceable against and inure to the benefit
of any successors or assigns of Purchaser and any successors or assigns of each
of the Sellers. Nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties and their respective successors and
assigns any rights or remedies under or by reason of this Agreement.
Notwithstanding the foregoing, Purchaser may assign its rights and remedies with
respect to the representations, warranties, covenants, and indemnities of
Sellers as collateral security for any borrowings, but in any action brought by
any assignee of such rights and remedies, Sellers may assert any defense,
counterclaim or setoff he, she or it could have asserted had such action been
brought by Purchaser and no such assignment shall, without the further consent
of Sellers (which consent shall not be unreasonably withheld), constitute a
permitted delegation of Purchaser's duties.
9.9 Dispute Resolution. As to disputes seeking only monetary damages (and
not equitable relief) in an amount not greater than $500,000, in the event of
any dispute or disagreement between Sellers and Purchaser as to the
interpretation of any provision of this Agreement and the Transition Agreement
(or the performance of obligations thereunder), the matter, upon written request
of either party, shall be referred to representatives of the parties for
decision. The representatives shall promptly meet in a good faith effort to
resolve the dispute. If the representatives do not agree upon a decision within
thirty (30) calendar days after reference of the matter to them, any
controversy, dispute or claim arising out of or relating in any way to this
Agreement or the transactions arising hereunder shall be settled exclusively by
arbitration in the City of Atlanta, Georgia. Such arbitration shall be
administered by the American Arbitration Association ("AAA") in accordance with
its then prevailing rules, by a panel of three (3) independent and impartial
arbitrators selected in accordance with such rules (the "Panel").
Notwithstanding anything to the contrary provided in Section 9.13 hereof, the
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. ss. 1 et
seq. The fees and expenses of the AAA and the Panel shall be shared equally by
Purchaser and the Sellers and advanced by them from time to time as required;
provided that at the conclusion of the arbitration, the Panel shall award costs
and expenses (including the costs of the arbitration previously advanced and the
fees and expenses of attorneys, accountants and other experts) to the prevailing
party. No pre-arbitration discovery shall be permitted, except that the Panel
shall have the power in its sole discretion, on application by any party, to
order pre-arbitration examination solely of those witnesses and documents that
any other party intends to introduce in its case-in-chief at the arbitration
23
hearing. Purchaser and Sellers shall instruct the Panel to render its award
within thirty (30) days following the conclusion of the arbitration hearing. The
Panel shall not be empowered to award to any party equitable relief of any kind
or any damages of the type not permitted to be recovered under Section 7.6 of
this Agreement in connection with any dispute between or among the parties
arising out of or relating in any way to this Agreement or the transactions
arising hereunder, and each party hereby irrevocably waives any right to recover
such damages. Notwithstanding anything to the contrary provided in this Section
9.9 and without prejudice to the above procedures, any party may apply to any
court of competent jurisdiction for temporary injunctive or other provisional
judicial relief if such action is necessary to avoid irreparable damage or to
preserve the status quo until such time as the Panel is selected and available
to hear such party's request for temporary relief. The award rendered by the
Panel shall be final and not subject to judicial review and judgment thereon may
be entered in any court of competent jurisdiction.
9.10 Incorporation of Schedules. All Schedules hereto are by this reference
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
9.11 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.
9.12 Interpretation. The provisions of this Agreement are intended to be
interpreted and construed in a manner so as to make such provisions valid,
binding and enforceable. In the event that any provision of this Agreement is
determined to be partially or wholly invalid, illegal or unenforceable, then
such provision shall be deemed to be modified or restricted to the extent
necessary to make such provision valid, binding and enforceable, or, if such
provision cannot be modified or restricted in a manner so as to make such
provision valid, binding and enforceable, then such provision shall be deemed to
be excised from this Agreement and the validity, binding effect and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired in any manner. Nothing in this Agreement shall be
interpreted or construed as creating, expressly or by implication, a
partnership, joint venture, agency relationship or employment relationship
between the parties hereto or any of their respective officers, directors,
agents, employees or representatives.
9.13 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Georgia applicable to a contract
executed and performed in such State, without giving effect to the conflicts of
laws principles thereof.
9.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.15 Jurisdiction; Agents for Service of Process. Subject to Section 9.9,
any judicial proceeding brought against any of the parties to this Agreement on
any dispute arising out of this Agreement or any matter related hereto shall be
brought in the District Court for the Northern District of Georgia, and, by
execution and delivery of this Agreement, each of the parties accepts the
exclusive jurisdiction of such court, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. The foregoing
consents to jurisdiction shall not constitute general consents to jurisdiction
in the State of Georgia for any purpose except as provided above and shall not
be deemed to confer rights on any third party. The prevailing party or parties
in any such litigation shall be entitled to receive from the losing party or
parties all costs and expenses, including reasonable counsel fees, incurred by
the prevailing party or parties. Each party agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's address set
forth in Section 9.1 shall be effective service of process for any action, suit
or proceeding in Georgia with respect to any matters for which it has submitted
to jurisdiction pursuant to this Section 9.15.
24
9.16 Disclosure. Any matter set forth in any section of the Schedules
shall be deemed set forth in all other sections of the Schedules to the extent
that such matter could reasonably be responsive to such other sections of the
Schedules whether or not a specific cross-reference appears. In addition,
matters reflected in the Schedules are not necessarily limited to matters
required by this Agreement to be reflected in the Schedules. Such additional
matters are set forth for informational purposes only and do not necessarily
include other matters of a similar nature. The information contained in this
Agreement, the Schedules and Exhibits is disclosed solely for purposes of this
Agreement, and no information contained herein or therein shall be deemed to be
an admission by any party hereto to any third party of any matter whatsoever
(including any violation of applicable Law or breach of contract).
9.17 Individuals. Each party agrees that each individual acting solely in
his or her capacity as an officer or employee of his or her respective
principal, which is a party hereto, will in no event be personally responsible
for acts taken reasonably believed to be taken within the scope of his/her
employment and each party covenants not to ▇▇▇ any such individual for acts
reasonably believed to be taken within his/her employment.
9.18 Cooperation. The Purchaser and Sellers each acknowledge that after the
Closing the parties will employ certain persons who have detailed and unique
knowledge of aspects of the other party's business including general accounting
issues with respect to pre-Closing periods and Closing matters. The parties
shall cooperate in all reasonable respects in connection with pre-Closing
general accounting issues and Closing matters; provided, however that any such
cooperation shall not unduly or unreasonably interrupt the operation of the
business of either Purchaser or Sellers, as the case may be.
9.19 Termination
(a) If any condition precedent to Sellers' obligations hereunder is not
satisfied or is incapable of satisfaction and such condition is not waived by it
at or prior to December 31, 2005, or if any condition precedent to Purchaser's
obligations hereunder is not satisfied or is incapable of satisfaction and such
condition is not waived by it at or prior to December 31, 2005, Sellers or
Buyer, as the case may be, may terminate this Agreement at its option by notice
to the other party. If a condition precedent to any party's obligations is not
satisfied, nothing contained herein shall be deemed to require any party to
terminate this Agreement, rather than to waive such condition precedent and
proceed with the Closing.
(b) In the event of the termination of this Agreement, no party shall
thereafter be liable to the other, except that any party in willful breach of
its obligations hereunder shall be liable to the other party for such willful
breach, and, in addition, each of the parties shall reserve and retain all, and
no party shall have waived any, of its rights and remedies as existed prior to
the execution of this Agreement.
[Signature Pages to Follow]
25
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party as of the date first above written.
PURCHASER:
INTERLAND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Chief Executive Officer
-----------------------------------
SELLERS:
WEB INTERNET, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Chief Executive Officer
-----------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Disclosure Schedules
--------------------
Exh A - ▇▇▇▇▇▇ Employment Agreement
Exh B - Transition Service Agreement
Exh C - Intellectual Property Purchase and Sale Agreement
Exh A - Form of Security and Pledge Agreement
Exh B - Form of Amended and Restated Line of Credit Note and Loan Agreement
Exh C - Form of ▇▇▇▇ of Sale