ASSET PURCHASE AGREEMENT

Exhibit 2.1

 

 

ASSET PURCHASE AGREEMENT

 

between

INSURE.COM, INC.

and

QUINSTREET, INC.

Dated as of

October 9, 2009

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

-ii-

TABLE OF CONTENTS

(continued)

 

 

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 9, 2009, is entered into by and between Insure.com, Inc., a Delaware corporation, (the “ Seller ”), and QuinStreet, Inc., a California corporation (“ Purchaser ” and, together with Seller, each a “ Party ” and, collectively, the “ Parties ”).

WHEREAS, among other websites, Seller is the owner and operator of those certain websites (including the content thereon and all associated software code) and those certain domain names associated with such websites identified in Section 2.1(a) of the Disclosure Schedule (collectively, the “ Websites ”);

WHEREAS, apart from other primary business activities, including, without limitation, selling certain insurance products, Seller generates customer leads and referral click traffic and publishes insurance information for consumers through the Websites (the “ Transferred Business ”); and

WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Websites and certain other assets specified herein (collectively, the “ Transferred Assets ”), in consideration for the payments from Purchaser and Purchaser’s assumption of certain liabilities of Seller, each as specified herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, Seller and Purchaser hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Defined Terms . For purposes of this Agreement:

“ Agreement ” shall have the meaning set forth in the Preamble to this Agreement.

“ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.

“ Allocation Schedule ” shall have the meaning as set forth in Section 7.5 of this Agreement.

“ Ancillary Agreements ” means the Transition Services Agreement, the Bill of Sale, the Copyright Assignment Agreement, Transferred Marks Assignment Agreement, the Domain Name Transfer Agreement, and the Assumption Agreement.

“ Anniversary Payment ” shall have the meaning set forth in Section 3.2(a)(ii) of this Agreement.

“ Assets ” of any Person means all of such Person’s right, title and interest in and to all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible and wherever situated), including Contracts and Intellectual Property.

“ Assumed Contracts ” shall have the meaning set forth in Section 2.1(b) of this Agreement.

“ Assumed Liabilities ” shall have the meaning set forth in Section 2.3 of this Agreement.

“ Bill of Sale ” shall have the meaning set forth in Section 3.3(b) of this Agreement.

“ Breach ” of a representation, warranty, covenant, obligation or other provision means there is or has been any inaccuracy in or breach of, or any failure to comply with or perform, such representation, warranty, covenant, obligation or other provision.

“ Business Day ” means any day that is not a Saturday, a Sunday or a scheduled holiday of the Federal Reserve Bank of New York.

“ Closing ” shall have the meaning set forth in Section 3.1 of this Agreement.

“ Closing Date ” means the date of the Closing.

“ Closing Payment ” shall have the meaning set forth in Section 3.2(a)(i) of this Agreement.

“ Code ” means the Internal Revenue Code of 1986, as amended through the date hereof.

“ Confidentiality Agreement ” shall have the meaning set forth in Section 6.2 of this Agreement.

“ Contract ” means any legally binding agreement, written commitment, arrangement, lease, license, understanding or contract.

“ control ” (including the terms “ controlled by ” and “ under common control with ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by Contract, credit arrangement or otherwise.

“ Copyright Assignment Agreement ” shall have the meaning set forth in Section 3.3(c) of this Agreement.

“ Copyrights ” means all works of authorship, and all copyrights therein.

“ Databases ” means all proprietary databases and other data sets and compilations, whether written, electronic or in another form, and all documentation relating to the foregoing, including manuals, memoranda and records.

“ Delaware Law ” means the General Corporation Law of the State of Delaware.

“ Disclosure Schedule ” means the Disclosure Schedule attached hereto as E XHIBIT A , dated as of the date hereof, delivered by Seller to Purchaser in connection with this Agreement.

“ Domain Name Transfer Agreement ” shall have the meaning set forth in Section 3.3(e) of this Agreement.

“ Encumbrance ” means any security interest, pledge, hypothecation, mortgage, lien, lease, license, option, exception, reservation, limitation, impairment, imperfection of title, condition or known restriction of any nature or similar encumbrance.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Assets ” shall have the meaning set forth in Section 2.2 of this Agreement.

 

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“ Excluded Liabilities ” shall have the meaning set forth in Section 2.4 of this Agreement.

“ Excluded Websites ” shall have the meaning set forth in Section 2.2(a) of this Agreement.

“ GAAP ” means United States generally accepted accounting principles and practices in effect from time to time as consistently applied.

“ Governmental Authority ” means any federal, national, supranational, state, provincial, local, foreign or other government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body with applicable jurisdiction.

“ Governmental Authorization ” shall mean any: (a) permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization that is, has been or may in the future be issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement; or (b) right under any Seller Contract with any Governmental Authority.

“ Governmental Order ” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“ Indemnification Claim Dispute ” shall have the meaning set forth in Section 8.5(c) of this Agreement.

“ Indemnification Claim Notice ” shall have the meaning set forth in Section 8.5(a) of this Agreement.

“ Indemnified Party ” means a Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be.

“ Indemnifying Party ” means Seller pursuant to Section 8.2 and Purchaser pursuant to Section 8.3, as the case may be.

“ Intellectual Property ” shall mean and include all algorithms, application programming interfaces, databases and data collections, diagrams, formulae, inventions (whether or not patentable), know-how, logos, marks (including brand names, product names, logos, and slogans), methods, network configurations and architectures, lists, processes, proprietary information, protocols, schematics, specifications, software, software code (in any form including source code and executable or object code), subroutines, test results, user interfaces, techniques, URLs, web sites, works of authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

“ Intellectual Property Rights ” means any and all intellectual property rights and other similar proprietary rights in any jurisdiction, whether registered or unregistered, whether owned or held for use under license, including all rights and interests pertaining to or deriving from: (a) Patents, inventions, invention disclosures, discoveries and improvements, whether or not patentable; (b) Software; (c) Copyrights; (d) Trade Secrets; (e) Trademarks; (f) Databases; (g) Internet Properties; (h) publicity rights; and (i) moral rights; including in each case of (a) through (i) any registrations of, applications to register, and renewals and extensions, continuations, continuations-in-part, counterparts, divisions, or reissues of, and applications for, any of the foregoing with or by any governmental authority in any jurisdiction.

 

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“ Internet Properties ” means all rights to Uniform Resource Locators and domain names.

“ IRS ” means the United States Internal Revenue Service.

“ Knowledge of Seller ” or similar terms used in this Agreement means any fact, matter or circumstance of which any individual identified on Section 1.1 of the Disclosure Schedule had actual knowledge after due inquiry.

“ Legal Requirement ” shall mean any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation as of the date hereof.

“ Liabilities ” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Legal Requirement, Proceeding or Governmental Order and those arising under any Contract, arrangement, commitment or undertaking.

“ Loss ” shall have the meaning set forth in Section 8.2 of this Agreement.

“ Material Adverse Effect ” shall mean any act, occurrence, fact, event, omission or circumstance (other than the effect of (i) the Agreement and transaction contemplated herein; (ii) general economic or political conditions; (iii) conditions or events affecting the internet commerce industry generally; (iv) conditions or events affecting the U.S. securities markets generally; or (v) changes in any Legal Requirements, except, with respect to each of (i) – (v), to the extent such effects disproportionately affect the Transferred Business or the Transferred Assets) which either is, or in the reasonable judgment of an experienced, prudent business person would be reasonably likely to be, material and adverse to the Transferred Business, the Transferred Assets or the underlying value of the Transferred Assets or results, or in the reasonable judgment of an experienced, prudent business person would be reasonably likely to result, in a reasonable decision not to purchase the Transferred Assets, taken as a whole, on the terms and conditions set forth in this Agreement.

“ Open Source Code ” means any software code that is distributed as “free software” or “open source software” or is otherwise distributed publicly in source code form under terms that permit modification and redistribution of such software. Open Source Code includes software code that is licensed under the GNU General Public License, GNU Lesser General Public License, Mozilla License, Common Public License, Apache License, BSD License, Artistic License, or Sun Community Source License.

“ Ordinary Course of Business ” means, with respect to the operation by Seller of the Transferred Business, the operation thereof in the ordinary course of business consistent with prior practices with respect to the operation thereof.

“ Organizational Documents ” means, with respect to a particular Person, the limited liability company agreement, limited partnership agreement, partnership agreement, certificate of formation, certificate of incorporation, bylaws or any other similar organizational document of such Person.

“ Patents ” means all patents and patent applications.

“ Party ” and “ Parties ” shall have the meanings set forth in the Preamble to this Agreement.

 

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“ Permitted Encumbrances ” means (a) Encumbrances for Taxes and other governmental charges and assessments that are (i) not yet due and payable or (ii) being contested by appropriate proceedings in good faith, in the case of clause (ii), for which an appropriate reserve has been established on Seller’s Financial Statements in accordance with GAAP, (b) statutory Encumbrances of landlords, lessors, carriers, warehousemen, mechanics and materialmen and other similar statutory Encumbrances imposed by Legal Requirements, in each case that are arising in the Ordinary Course of Business, that are not material individually or in the aggregate to Seller and, secure obligations not more than 60 days past due, (c) Encumbrances created by this Agreement or any of the Ancillary Agreements, or in connection with the Transactions, or by the actions of Purchaser and (d) Encumbrances set forth in Section 1.1 of the Disclosure Schedule.

“ Permitted Purposes ” shall have the meaning set forth in Section 6.1 of this Agreement.

“ Person ” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

“ Proceeding ” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation that is or has been commenced, brought, conducted or heard by or before, or that otherwise has involved or may involve, any Governmental Authority or any arbitrator or arbitration panel.

“ Promissory Note ” shall have the meaning set forth in Section 3.2(a)(ii) of this Agreement.

“ Purchase Price ” shall have the meaning set forth in Section 3.2(a) of this Agreement.

“ Purchaser ” shall have the meaning set forth in the Preamble to this Agreement.

“ Purchaser Officers ” means Timothy Stevens, Dan Caul, Scott Mackley, Jon Kelly, Jennie Kim, Genia Jacques and Bill Schmitt.

“ Purchaser Indemnified Party ” shall have the meaning set forth in Section 8.2 of this Agreement.

“ Registered IP ” shall mean (a) all Intellectual Property Rights that are registered, filed, or issued under the authority of any Governmental Authority, including all registered Patents, registered Copyrights and registered Trademarks, (b) all Internet Properties and (c) all applications for any of the foregoing.

“ Registered Transferred IP ” shall mean all Transferred IP that is Registered IP.

Each of the following shall be deemed to be a “ Related Party ”: (a) each individual who is an officer or director of Seller or any of its Affiliates; (b) each member of the immediate family of each of the individuals referred to in clause (a) above; and (c) any Entity in which any one of the individuals referred to in clauses (a) and (b) above holds or held (or in which more than one of such individuals collectively hold or held), beneficially or otherwise, a controlling interest.

“ Remaining Business ” shall have the meaning set forth in Section 6.3(d) of this Agreement.

 

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“ Representative ” of a Person means such Person’s members, directors, controlling Persons, officers, employees, agents, partners and advisors (including attorneys, accountants, consultants, bankers, financial advisors and prospective sources of financing for the Transactions), as applicable.

“ Sale ” means the sale by Seller of the Transferred Assets to Purchaser pursuant to this Agreement.

“ Seller ” shall have the meaning set forth in the Preamble to this Agreement.

“ Seller Contracts ” means all Contracts of Seller or any Affiliate of Seller used solely in connection with or solely related to the Websites or Transferred Business.

“ Seller Indemnified Party ” shall have the meaning set forth in Section 8.3 of this Agreement.

“ Seller IP Contract ” shall mean any Seller Contract to which Seller is a party or by which Seller is bound, that contains any assignment or license of, or covenant not to assert or enforce, any Intellectual Property or Intellectual Property Right or that relates to any Transferred IP.

“ Seller Organizational Documents ” shall have the meaning set forth in Section 2.2(h) of this Agreement.

“ Seller Privacy Policy ” means each privacy policy of Seller relating to the Websites, including any policy relating to the Transferred Business in effect at any time within the two year period prior to the Closing Date.

“ Seller Records ” means Seller’s accounting, business, advertiser and financial records to the extent that they relate to the Transferred Assets. In addition, the advertiser records included in the Seller Records must include in the leads and click data, the identity of the “advertiser” (i.e., the lead buyer, including when Seller is using the lead itself).

“ Software ” means all computer software and firmware, including data files other than any personal or user data, source code, object code and software-related specifications and documentation.

“ Specified Representations ” shall have the meaning set forth in Section 8.1 of this Agreement.

“ Straddle Period ” shall have the meaning set forth in Section 7.2 of this Agreement.

“ Subsidiary ” means, with respect to any Person, any and all corporations, partnerships, limited liability companies, joint ventures, associations and other entities controlled by such Person.

“ Tax ” or “ Taxes ” means all taxes, assessments, charges, duties, fees, levies, imposts or other governmental charges, including all federal, state, local, municipal, county, foreign and other income, franchise, profits, capital gains, capital stock, capital structure, transfer, gross receipt, sales, use, transfer, service, occupation, ad valorem, property, excise, severance, windfall profits, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental (including taxes under Code Section 59A), alternative, minimum, add-on, value-added, withholding and other taxes, assessments, charges, duties, fees, levies, imposts or other governmental charges of any kind whatsoever in the nature of a tax (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), and all estimated taxes, deficiency assessments, additions to tax, additional amounts imposed by any governmental authority (domestic or foreign), and any penalties and interest with respect thereto.

 

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“ Tax Return ” means any report, return, election, document, estimated tax filing, declaration or other filing required to be supplied to any taxing authority or jurisdiction with respect to Taxes, including any amendments thereto.

“ Third Party ” means any Person or group other than a Party hereto.

“ Third Party Claim ” shall have the meaning set forth in Section 8.6 of this Agreement.

“ Trademarks ” means all registered and common law trademarks, trade names, service marks, certification marks, service names, brands, trade dress and logos, trademark and service mark registrations and applications, and the goodwill associated therewith.

“ Trade Secrets ” means all trade secrets, business, technical and know-how information, non-public information and confidential information and rights to limit the use or disclosure thereof by any Person.

“ Transactions ” means the transactions contemplated by this Agreement and the Ancillary Agreements, including the Sale.

“ Transfer Taxes ” shall have the meaning set forth in Section 7.1 of this Agreement.

“ Transferred Assets ” means only the Assets purchased by Purchaser as set forth in Section 2.1 of this Agreement.

“ Transferred Business ” shall have the meaning set forth in the Preamble to this Agreement.

“ Transferred Business Governmental Authorizations ” shall have the meaning set forth in Section 4.9.

“ Transferred IP ” shall mean all Intellectual Property and Intellectual Property Rights owned (whether exclusively, jointly with another Person, or otherwise) by Seller that is used in, or necessary for, or arises out of the operation of the Websites and Transferred Business as currently conducted, including all Intellectual Property Rights in or pertaining to the Transferred Website Content.

“ Transferred Software ” shall have the meaning set forth in Section 4.6(k) of this Agreement.

“ Transferred Trademarks ” shall have the meaning set forth in Section 4.6(g)(ii) of this Agreement.

“ Transferred Website Content ” means all content on the Websites (whether placed thereon by Seller, users or other third parties).

“ Transition Services Agreement ” shall have the meaning set forth in Section 3.3(a) of this Agreement.

“ Transferred Marks Assignment Agreement ” shall have the meaning set forth in Section 3.3(d) of this Agreement.

“ URL ” means a uniform resource locator.

“ Website Tools ” shall have the meaning set forth in Section 4.6(s) of this Agreement.

 

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“ Websites ” shall mean the websites (including the content thereon and all associated software code) and the domain names associated with such websites identified in Section 2.1(a) of the Disclosure Schedule.

1.2 Interpretation and Rules of Construction . In this Agreement, except to the extent otherwise provided or the context otherwise requires:

(a) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

(b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;

(c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;

(d) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;

(e) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;

(f) when a reference is made in this Agreement to Seller having delivered a document to Purchaser, such reference shall include Seller having included such document on the virtual data site created for purposes of the Transactions

(g) references to “$” or “dollars” and words of similar import, when used in this Agreement, refer to United States Dollars; and

(h) references to a Person are also to its successors and permitted assigns.

ARTICLE II

PURCHASE AND SALE OF TRANSFERRED ASSETS

2.1 Transfer of Assets . At the Closing, and upon the terms and conditions herein set forth, Seller shall sell, transfer, convey, assign and deliver to Purchaser, free and clear of all Encumbrances other than Permitted Encumbrances, and Purchaser shall purchase and acquire from Seller, all of Seller’s right, title and interest in, to and under only the following assets, properties and rights, as the same exist on the date hereof, wherever located, together with all rights belonging or appertaining to the same in any way (collectively, the “ Transferred Assets ”):

(a) the Websites;

(b) subject to Section 6.5(b) and (c), all of Seller’s rights under all Seller Contracts that are specifically identified in Section 2.1(b) of the Disclosure Schedule (the “ Assumed Contracts ”);

(c) all Transferred IP;

(d) originals or copies of all Seller Records;

 

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(e) to the extent transferable under applicable Legal Requirements, all rights of Seller solely relating to the Transferred Assets under Governmental Authorizations (other than Seller’s insurance licenses and other Governmental Authorizations required to conduct business as an insurance agent or brokerage), if any;

(f) originals or copies of reports of Seller relating to leads and clicks generated through the Websites as the same solely relate to the Transferred Assets;

(g) all revenue generated from the Websites for the period beginning after the Closing (except as set forth in the Transition Services Agreement);

(h) the pay per click accounts with Google™, Yahoo™ and/or MSN™;

(i) all of the Website Tools other than the Website Tool listed in Section 2.1(i) of the Disclosure Schedule;

(j) all of the assets listed in Section 2.1(j) of the Disclosure Schedule; and

(k) all goodwill relating to the foregoing.

2.2 Excluded Assets . The Transferred Assets do not include any other Assets of the Seller other than the Transferred Assets explicitly listed in Section 2.1 hereof (all Assets not being acquired by Purchaser are herein referred to as the “ Excluded Assets ”), including, without limitation, the following Assets of the Seller:

(a) the websites (including the content thereon and all associated software code) and the domain names associated with such websites identified in Section 2.2(a) of the Disclosure Schedule (the “Excluded Websites” );

(b) any Assets of Seller that are not primarily used in the Transferred Business;

(c) all cash and cash equivalents (including marketable securities and short term investments), bank deposits, bank accounts, accounts receivable and other current assets of Seller;

(d) any furniture, fixtures, equipment (including motor vehicles), computer hardware, office equipment and apparatuses, tools, machinery and supplies and other tangible property of Seller;

(e) Seller’s life insurance quoting engine;

(f) Seller’s insurance licenses and other Governmental Authorizations to conduct business as an insurance agent or brokerage;

(g) all rights of Seller arising under this Agreement and any Ancillary Agreement;

(h) Seller’s corporate seal, minute book, charter documents, stock certificates, stock records and other Organizational Documents (together, the “ Seller Organizational Documents ”);

(i) any capital stock of Seller;

(j) all Tax assets of any nature including, without limitation, refunds of any Taxes of the Seller and all tax records and Tax Returns of the Seller;

 

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(k) all equity interests Seller holds in any other Person, including any of Seller’s Subsidiaries; and

(l) any assets set forth in Section 2.2(k) of the Disclosure Schedule.

2.3 Assumption of Liabilities . At the Closing, Purchaser shall assume, and Purchaser shall hereafter pay, perform, satisfy and discharge when due, the following Liabilities of Seller (collectively, the “ Assumed Liabilities ”):

(a) all liabilities and obligations of Seller under the Assumed Contracts (including Assumed Contracts subject to Sections 6.5(b) or (c) below) , but only to the extent such liabilities and obligations (A) arise after the Closing Date, (B) do not arise from or relate to any Breach by Seller of any provision of any of such Assumed Contracts and (C) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse of time, would constitute or result in a Breach of any of such Assumed Contracts;

(b) all Liabilities for Taxes relating to or arising out of the Transferred Assets or the operation of the Transferred Business after the Closing Date except for such Taxes that are the responsibility of Seller pursuant to Article VII;

(c) to the extent expressly provided for under the Transition Services Agreement, all Liabilities arising out of or relating to the Transferred Assets incurred after the Closing Date; and

(d) all Liabilities listed in Section 2.3 of the Disclosure Schedule.

2.4 Excluded Liabilities . Seller shall retain and shall hereafter pay, perform, satisfy and discharge when due, all Liabilities other than Assumed Liabilities, including, without limitation, the following Liabilities (the “ Excluded Liabilities ”):

(a) all Liabilities relating to or arising out of the Excluded Assets;

(b) all Liabilities arising out of any transaction or obligation incurred by Seller on or after the Closing Date, except for Liabilities arising out of or related to the Transferred Assets to the extent expressly provided for under the Transition Services Agreement;

(c) all Liabilities for or in connection with any dividends, distributions or redemptions with respect to any security of Seller or its Affiliates;

(d) any expenses or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement or the Ancillary Agreements and the consummation of the Transactions;

(e) all Liabilities for Taxes relating to the operation of the Transferred Business, or arising out of the Transferred Assets prior to the Closing Date except for such Taxes that are the responsibility of Purchaser pursuant to Article VII;

(f) any Liability of Seller to any current or former employee, contractor or other service provider of Seller, including for severance pay and accrued vacation payments;

(g) any Liability of Seller to any Affiliate of Seller; and

 

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(h) any other Liability that is not referred to specifically in Section 2.3.

ARTICLE III

CLOSING; CONSIDERATION

3.1 Closing . Subject to the terms and conditions of this Agreement, the sale and purchase of the Transferred Assets contemplated by this Agreement shall take place at a closing (the “ Closing ”) to be held concurrent with the execution of this Agreement.

3.2 Consideration . The aggregate consideration for the sale and transfer of the Transferred Assets shall be:

(a) $16,000,000 payable in United States Dollars (the “ Purchase Price ”), payable as follows:

(i) on the Closing Date, Purchaser shall pay to Seller an amount in cash equal to $15,000,000 (the “ Closing Payment ”); and

(ii) on the Closing Date, Purchaser shall deliver to Seller a promissory note in the form attached hereto as E XHIBIT  I (the “ Promissory Note ”), which Promissory Note shall provide that Purchaser will pay Seller $1,000,000 on the one year anniversary of the Closing (such payment, the “ Anniversary Payment ”); and.

(b) the assumption by Purchaser of the Assumed Liabilities.

All payments of the Purchase Price shall be made by wire transfer or as otherwise directed by Seller in writing when due pursuant to the terms of this Agreement.

3.3 Seller’s Deliveries . At the Closing, Seller shall deliver to Purchaser:

(a) the Transition Services Agreement in substantially the form attached hereto as E XHIBIT  B (the “ Transition Services Agreement ”), executed by an authorized officer of Seller;

(b) a Bill of Sale and Assignment in substantially the form attached hereto as E XHIBIT  C (the “ Bill of Sale ”), executed by an authorized officer of Seller;

(c) a Copyright Assignment Agreement in substantially the form attached hereto as E XHIBIT  D transferring all of the Copyrights comprised in the Transferred IP to Purchaser (the “ Copyright Assignment Agreement ”), executed by an authorized officer of Seller;

(d) a Transferred Marks Assignment Agreement in substantially the form attached hereto as E XHIBIT  E transferring all of the Trademarks comprised in the Transferred IP to Purchaser (the “ Transferred Marks Assignment Agreement ”), executed by an authorized officer of Seller;

(e) a Domain Name Transfer Agreement in substantially the form attached hereto as E XHIBIT  F transferring all of the Websites to Purchaser (the “ Domain Name Transfer Agreement ”), executed by an authorized officer of Seller;

(f) a certificate, in form and substance reasonably satisfactory to Purchaser, of a Secretary, Assistant Secretary or other similar officer of Seller certifying as to the resolutions of the board of directors of Seller approving and authorizing this Agreement, the Ancillary Agreements and the Transactions;

 

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(g) a good standing certificate of Seller issued by the Secretary of State of the State of Delaware, dated as of a recent date;

(h) copies of each Assumed Contract;

(i) those consents to assignment executed by Third Parties under certain Assumed Contracts as set forth on Schedule 3.3(i);

(j) a legal opinion from counsel to Seller substantially in the form attached hereto as E XHIBIT H;

(k) a completed and executed certificate of evidence of non-foreign status that complies with Treasury Regulation Section 1.1445-2(b)(2);

(l) evidence of ownership and control of, full access to and ability to utilize, all existing accounts with service providers required to operate and send traffic to the Websites including, but not limited to, registrars accounts and pay per click campaigns sending traffic to the Websites shall be transferred to Purchaser, including but not limited to the transfer of billing information and all login and password information related to such accounts;

(m) a fully zipped up set of source code for the Websites; and

(n) copies of the files for the databases for the Websites, including a data file dump of the CVS system related to the Transferred Assets.

3.4 Purchaser’s Deliveries . At the Closing, Purchaser shall deliver to Seller:

(a) the Closing Payment;

(b) the Transition Services Agreement in substantially the form attached hereto as E XHIBIT  B , executed by an authorized officer of Purchaser;

(c) an executed instrument of assumption of liabilities with respect to the Assumed Liabilities substantially in the form of the Assumption of Liabilities Agreement attached hereto as E XHIBIT  G ( the “ Assumption of Liabilities ”);

(d) a Copyright Assignment Agreement in substantially the form attached hereto as E XHIBIT  D , executed by an authorized officer of Purchaser;

(e) a Transferred Marks Assignment Agreement in substantially the form attached hereto as E XHIBIT  E , executed by an authorized officer of Purchaser;

(f) a Domain Name Transfer Agreement in substantially the form attached hereto as E XHIBIT  F , executed by an authorized officer of Purchaser;

(g) a certificate, in form and substance reasonably satisfactory to Seller, of a Secretary, Assistant Secretary or other similar officer of Purchaser certifying as to the resolutions of the board of directors of Purchaser approving and authorizing this Agreement, the Ancillary Agreements and the Transactions;

(h) the Promissory Note, executed by an authorized officer of Purchaser;

 

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(i) a good standing certificate of Purchaser issued by the Secretary of State of the State of California, dated as of a recent date; and

(j) a certificate, in form and substance reasonably satisfactory to Seller, of Purchaser’s Secretary certifying as to the due organization of the Purchaser and due authorization of this Agreement, the Ancillary Agreements and the Transactions.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

OF SELLER

Except as specifically set forth in the disclosure schedule attached hereto as Exhibit A (the “ Disclosure Schedule ”), Seller hereby represents and warrants to Purchaser that the statements contained in this Article IV are true, correct and complete as of the date hereof or, if a representation or warranty is made as of a specified date, as of such date. Notwithstanding anything to the contrary herein, (1) the representations and warranties set forth in this Article IV are made for the purpose of allocating contractual risk between the parties hereto and shall not constitute or be deemed to be an admission of fact to any third party concerning any item set forth herein and (2) the use and meaning of the term “material” (and variations thereof) herein may be different from the use and meaning of such term under applicable securities laws.

4.1 Due Organization; Power; No Subsidiaries; Etc . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller has all requisite corporate power and authority to own, operate or lease the Transferred Assets. Seller is duly authorized to conduct business and is in good standing in each jurisdiction where such authorization is required to own, operate or lease the Transferred Assets, except where the failure to be so qualified does not constitute a Material Adverse Effect. Seller has only operated the Transferred Assets through Seller and not through any Subsidiary or other Entity and no Subsidiary of Seller or any other Entity in which Seller holds an interest owns any of the Transferred Assets. No proceeding contemplating the dissolution or liquidation of Seller or the winding up or cessation of Seller’s business or affairs is pending.

4.2 Due Authorization . The execution and delivery by Seller of this Agreement and the Ancillary Agreements, the performance of its obligations hereunder and thereunder, and the Transactions have been duly and validly authorized by all necessary corporate action on the part of Seller. Except as otherwise provided in Section 4.2 of the Disclosure Schedule, Seller has the right, power and authority to execute and deliver this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder. Seller has obtained the unanimous approval of its board of directors for the approval of this Agreement, the Ancillary Agreements and the Transactions prior to the execution of this Agreement. This Agreement and each of the Ancillary Agreements, when executed and assuming due authorization, execution and delivery by Purchaser, have been duly executed and delivered by Seller and constitute valid and legally binding obligations of Seller enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium or other similar laws affecting the enforcement of creditors rights in general, or by general principles of equity.

4.3 No Conflict; Third Party Consents . Except as otherwise provided in Section 4.3 of the Disclosure Schedule, the execution and delivery of this Agreement, the Ancillary Agreements, and the consummation of the Transactions, will not (a) violate or conflict with the provisions of Seller’s certificate of incorporation or bylaws, (b) result in the imposition of any Encumbrance (other than the rights of Purchaser hereunder) upon any of the Transferred Assets, (c) cause the acceleration, cancellation or material modification of any obligation under, create in any party the right to terminate, constitute a

 

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default or breach of, or violate or conflict with the terms, conditions or provisions of, or result in the loss of a material benefit under, any Contract to which Seller is a party or by which Seller or the Transferred Assets are bound or (d) result in a material breach or violation by Seller of any of the terms, conditions or provisions of any Legal Requirement, Governmental Authorization or Governmental Order solely with respect to the Transferred Assets, except as set forth on Section 4.3(d) of the Disclosure Schedule. Except as set forth on Section 4.3(d) of the Disclosure Schedule, Seller is not required to give any notice to any Person, and except as set forth on Section 4.3(e) of the Disclosure Schedule, no consent, approval or authorization of, or registration or filing with, any Person or Governmental Authority is required in connection with the execution, delivery or performance by Seller of this Agreement or any of the Ancillary Agreements or the consummation of the Transactions.

4.4 Absence of Changes . Since June 30, 2009, (i) each of Seller and its Subsidiaries has, in all material respects, operated the Websites and the Transferred Assets in the Ordinary Course of Business consistent with past practice; (ii) there has not occurred any change, event or cond