UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
GOTO.COM, INC.
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(Name of Issuer)
Common Stock, $0.0001 par value per share
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(Title of Class of Securities)
38348T107
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(CUSIP Number)
Todd Tappin
Chief Financial Officer
GoTo.Com, Inc.
140 West Union Street
Pasadena, California 91103
(626) 685-5600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 23, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: / /.
(Continued on the following page)
Page 1 of 10 Pages
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SCHEDULE 13D
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CUSIP NO. 38348T107 PAGE 2 OF 10
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1 NAME OF REPORTING PERSON
BILL GROSS' IDEALAB!, INC.
TAX I.D. NO. 95-4569774
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 4,074,448 SHARES
OWNED BY EACH ---------------------------------------------------------------
REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
4,074,448 SHARES
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,074,448 SHARES
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.95%
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14 TYPE OF REPORTING PERSON
CO
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SCHEDULE 13D
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CUSIP NO. 38348T107 PAGE 3 OF 10
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1 NAME OF REPORTING PERSON
IDEALAB! HOLDINGS, L.L.C.
TAX I.D. NO. 95-4729649
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 9,192,882 SHARES
OWNED BY EACH ---------------------------------------------------------------
REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
9,192,882 SHARES
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,192,882 SHARES
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.19%
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14 TYPE OF REPORTING PERSON
OO
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Page 4 of 10
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock, par value
$0.0001 per share (the "Common Stock"), of GoTo.Com, Inc., a Delaware
corporation (the "Company"). The principal executive offices of the Company are
located at 140 West Union Street, Pasadena, California 91103.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed jointly by Bill Gross'
idealab!, Inc., a California corporation ("Idealab Co."), and idealab! Holdings,
L.L.C., a Delaware limited liability company and a wholly-owned subsidiary of
Idealab Co. ("Idealab Holdings," and together with Idealab Co., the "Reporting
Persons").
(b) The address of the Reporting Persons' principal office is
130 West Union Street, Pasadena, California 91103. The names, business addresses
and principal businesses of each of the directors and executive officers of each
of the Reporting Persons are set forth on SCHEDULE I hereto and incorporated by
reference herein.
(c) The principal business of each of the Reporting Persons is
the creation and operation of internet businesses.
(d) During the last five years, neither of the Reporting
Persons nor, to the best of their knowledge, any of the executive officers or
directors of either of the Reporting Persons, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, neither of the Reporting
Persons nor, to the best of their knowledge, any of the executive officers or
directors of either of the Reporting Persons, has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) To the best knowledge of the Reporting Persons, each of
the executive officers and directors of each of the Reporting Persons is a
United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
See Item 4 below.
ITEM 4. PURPOSE OF TRANSACTION.
On December 23, 1999, Idealab Co. entered into agreements to
purchase an aggregate of 4,074,448 shares of Common Stock, representing
approximately 8.95% of the total shares of Common Stock outstanding (based on
45,532,469 shares of Common Stock outstanding on September 30, 1999), from eight
stockholders of the Company in exchange for an aggregate consideration of
$332,255,840 in cash in Idealab Co. Consummation of such purchases of Common
Stock is conditioned on the expiration or termination of the waiting period
imposed under the Hart-Scott-Rodino Improvements Act of 1976, as amended. The
agreements evidencing such stock purchase transactions are attached hereto as
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Page 5 of 10
EXHIBITS 2-9 and incorporated by reference herein (the "Stock Purchase
Agreements"). The source of the cash consideration to be paid in such stock
purchase transactions is working capital of Idealab Co. Following Idealab Co.'s
consummation of such stock purchase transactions, Idealab Co. will contribute
all of the newly acquired shares of Common Stock to Idealab Holdings.
All of the shares of Common Stock reported herein were
acquired for investment purposes. The Reporting Persons may acquire or dispose
of securities of the Company, including shares of Common Stock, directly or
indirectly, in open-market or privately negotiated transactions, depending upon
the Reporting Persons' evaluation of the performance and prospects of the
Company, and upon other developments and circumstances, including, but not
limited to, general economic and business conditions, stock market conditions
and the interpretation of the factors which cause a company to qualify as an
investment company under the Investment Company Act of 1940, as amended.
Except as described herein, the Reporting Person has no
present plan or proposal which relates to, or could result in, any of the events
referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D.
However, the Reporting Person will continue to review the business of the
Company and, depending upon one or more of the factors referred to above, may in
the future propose that the Company take one or more of such actions.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, Idealab Holdings is the direct
record and beneficial owner of 9,192,882 shares of Common Stock, which
constitute approximately 20.19% of the 45,532,469 outstanding shares of Common
Stock as of September 30, 1999. Pursuant to the consummation of the stock
purchase transactions described herein, Idealab Co. may be deemed to
beneficially own 4,074,448 additional shares of Common Stock, which constitute
approximately 8.95% of the 45,532,469 outstanding shares of Common Stock as of
September 30, 1999. Following Idealab Co.'s consummation of the stock purchase
transactions contemplated by the Stock Purchase Agreements, Idealab Co. will
contribute all of the newly acquired shares of Common Stock to Idealab Holdings,
at which point Idealab Holdings will be the direct and beneficial owner of
13,267,330 shares of Common Stock. As of December 23, 1999, certain executive
officers and directors of the Reporting Persons owned an aggregate of
approximately 398,985 shares of Common Stock. The Reporting Persons disclaim any
beneficial interest in such shares.
(b) The Reporting Persons have sole power to vote or direct
the vote, and to dispose or to direct the disposition of the 13,267,330 shares
of Common Stock that they own of record or may be deemed to beneficially own.
(c) Except as described in Item 4 above, there have not been
any transactions in the shares of Common Stock effected by or for the account of
either of the Reporting Persons or any executive officer or director of either
of the Reporting Persons during the past 60 days.
(d) Except as stated in this Item 5, to the best knowledge of
the Reporting Persons, no other person has the right to receive or the power to
direct the receipt of dividends from, or the
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Page 6 of 10
proceeds from the sale of, the shares of Common Stock owned of record or
beneficially owned by either of the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
See Item 4.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Joint Filing Agreement, dated as of January 3, 2000.
Exhibit 2. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Kline
Hawkes California SBIC.
Exhibit 3. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Howard
L. Morgan.
Exhibit 4. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Oliver
A. McBryan.
Exhibit 5. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Bob
Kavner.
Exhibit 6. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and
William S. Elkus.
Exhibit 7. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Bruce
Hendricks.
Exhibit 8. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Moore
Global Investments, Ltd., Multi-Strategies Fund
Ltd., Remington Investments Strategies, L.P. and
Multi-Strategies Fund L.P.
Exhibit 9. Stock Purchase Agreement, dated as of December 23,
1999, by and between Bill Gross' idealab! and Jim
Armstrong.
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Page 7 of 10
SIGNATURES
After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: January 3, 2000 BILL GROSS' IDEALAB!, INC.
By: /s/ Billl Gross
----------------------------
Name: Bill Gross
Title: Chairman of the Board
and President
Dated: January 3, 2000 IDEALAB! HOLDINGS, L.L.C.
By: /s/ Bill Gross
----------------------------
Name: Bill Gross
Title: Managing Member
<PAGE>
Page 8 of 10
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
BILL GROSS' IDEALAB!
The name, business address, present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each of the
directors and executive officers of Bill Gross' idealab!, Inc., is set forth
below. Unless otherwise indicated below, the business address of each director
and executive officer is Bill Gross' idealab!, Inc., 130 West Union Street,
Pasadena, California 91103.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, IF
OTHER THAN AS EXECUTIVE
NAME AND BUSINESS POSITION WITH BILL OFFICER OF BILL GROSS'
ADDRESS GROSS' IDEALAB! IDEALAB!
- ----------------- ------------------ ------------------------
<S> <C> <C>
Bill Gross Chairman of the Board and
President
Lawrence Gross Vice-Chairman and Director
Robert Kavner Vice-Chairman and Director
Howard Morgan Vice-Chairman and Director
Thomas Hughes Director
Marcia Goodstein Vice-Chairman,
Chief Operating Officer and
Director
Bradley O. Ramberg Vice-President and
Chief Financial Officer
Douglas McPherson Vice-President and
General Counsel
</TABLE>
<PAGE>
Page 9 of 10
DIRECTORS AND EXECUTIVE OFFICERS OF
IDEALAB! HOLDINGS, L.L.C.
The name, business address, present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each of the
directors and executive officers of idealab! Holdings, L.L.C. is set forth
below. Unless otherwise indicated below, the business address of each director
and executive officer is idealab! Holdings, L.L.C., 130 West Union Street,
Pasadena, California 91103.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, IF
OTHER THAN AS EXECUTIVE
NAME AND BUSINESS POSITION WITH IDEALAB! OFFICER OF IDEALAB!
ADDRESS HOLDINGS, L.L.C. HOLDINGS, L.L.C.
- ----------------- --------------------- ------------------------
<S> <C> <C>
Bill Gross' idealab, Inc. Member
Bill Gross Managing Member
</TABLE>
<PAGE>
Page 10 of 10
EXHIBIT INDEX
Exhibit 1. Joint Filing Agreement, dated as of January 3, 2000.
Exhibit 2. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Kline Hawkes California
SBIC.
Exhibit 3. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Howard L. Morgan.
Exhibit 4. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Oliver A. McBryan.
Exhibit 5. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Bob Kavner.
Exhibit 6. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and William S. Elkus.
Exhibit 7. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Bruce Hendricks.
Exhibit 8. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Moore Global
Investments, Ltd., Multi-Strategies Fund Ltd., Remington
Investments Strategies, L.P. and Multi-Strategies Fund L.P.
Exhibit 9. Stock Purchase Agreement, dated as of December 23, 1999, by
and between Bill Gross' idealab! and Jim Armstrong.
EXHIBIT 1
JOINT FILING AGREEMENT
The undersigned hereby agree to jointly file a statement on
Schedule 13D, together with any amendments thereto (collectively, the "Schedule
13Ds"), with the Securities and Exchange Commission pursuant to the requirements
of Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended.
This Joint Filing Agreement may be signed in counterpart copies.
(Signature Page Follows)
<PAGE>
Date: January 3, 2000 BILL GROSS' IDEALAB!, INC.
By: /s/ Bill Gross
-----------------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Date: January 3, 2000 IDEALAB! HOLDINGS, L.L.C.
By: /s/ Bill Gross
-----------------------------------
Name: Bill Gross
Title: Managing Member
EXHIBIT 2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and Kline
Hawkes California SBIC, a Delaware limited partnership ("SELLER").
RECITALS
A. Seller desires to sell, and Buyer desires to purchase, 1,000,000
shares (together with all contractual rights of Seller in such shares, the
"SHARES") of common stock, $.0001 par value per share, of GoTo.com, Inc., a
Delaware corporation (the "COMPANY"), for the consideration and on the terms set
forth in this Agreement.
B. Immediately following such purchase of the Shares, Buyer intends to
sell, and Seller intends to purchase, 400,000 shares of Series D Preferred
Stock, no par value, of Buyer ("SERIES D PREFERRED STOCK") for $100 per share.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer paying to Seller $80,000,000 (the
"PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
<PAGE>
(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
(ii) a certificate executed by Seller to the effect that, except
as otherwise stated in such certificate, each of Seller's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $40,000,000 of the Purchase Consideration in cash by wire
transfer of immediately available funds in accordance with Seller's
written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
(c) In lieu of Buyer delivering the remaining $40,000,000 of the
Purchase Consideration to Seller, and Seller receiving such consideration,
the remaining $40,000,000 of the Purchase Consideration will be applied to
Seller's purchase of 400,000 shares of Series D Preferred Stock for $100
per share pursuant to (i) a Series D Preferred Stock Purchase Agreement,
dated as of the Closing Date (the "SERIES D PURCHASE AGREEMENT") and (ii)
an Amended and Restated Investor Rights Agreement, dated as of the Closing
Date (the "INVESTOR RIGHTS AGREEMENT," and together with the Series D
Purchase Agreement, the "INVESTMENT AGREEMENTS"), which the parties will
enter into on the Closing Date substantially in the forms attached hereto
as EXHIBITS A AND B, respectively.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 ORGANIZATION AND GOOD STANDING
Seller is a limited partnership duly organized, validly existing, and
in good standing under the laws of Delaware. Seller has requisite partnership
power and authority to carry on its business as presently conducted and as
proposed to be conducted. Seller is duly qualified to transact business and is
in good standing in each jurisdiction in which the failure so to qualify would
have a material adverse effect on its business, assets, financial condition,
results of operations or properties.
2
<PAGE>
2.2 PARTNERSHIP POWER
Seller has all requisite legal and partnership power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
2.3 AUTHORIZATION
All partnership action on the part of Seller, its officers and
partners necessary for the authorization, execution, delivery and performance of
this Agreement by Seller and the performance of Seller's obligations under this
Agreement has been taken. Neither the execution, delivery or performance of this
Agreement by Seller nor the consummation or performance of any or all of the
transactions contemplated by this Agreement, including, without limitation, the
sale of the Shares by Seller to Buyer, the performance by Buyer and Seller of
their respective covenants and obligations under this Agreement (including
entering into the Investment Agreements), and Buyer's acquisition and ownership
of the Shares (the "CONTEMPLATED TRANSACTIONS"), by Seller will give any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
("PERSON") the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to: (i) any provision of Seller's limited
partnership agreement or similar document adopted or filed in connection with
the creation, formation, or organization of Seller, or any amendment to any of
the foregoing ("SELLER'S ORGANIZATIONAL DOCUMENTS"); (ii) any resolution adopted
by the partners of Seller; (iii) any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute or treaty (except for
compliance with the HSR Act) ("LEGAL REQUIREMENT") or any award, decision,
injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made,
or rendered by any court, administrative agency, or other governmental body or
by any arbitrator ("ORDER") to which Seller may be subject; or (iv) any contract
to which Seller is a party or by which Seller may be bound. Seller is not and
will not be required to obtain any consent from any Person in connection with
the execution, delivery and performance of this Agreement.
2.4 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in any violation of, or conflict with, or constitute,
with or without the passage of time and the giving of notice, a default under,
Seller's limited partnership agreement or any of its agreements nor result in
the creation of, any mortgage, pledge, lien, encumbrance or charge upon the
Shares.
2.5 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of its Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"); PROVIDED,
HOWEVER, that the Shares may be subject to restrictions on transfer under state
and/or federal securities laws. No
3
<PAGE>
legend or other reference to any purported Encumbrance appears upon any
certificate representing the Shares (other than a legend or other reference with
respect to the proviso in the preceding sentence). There are no contracts
relating to the issuance, sale, or transfer of the Shares.
2.6 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
under this Agreement.
3.3 CAPITALIZATION
The authorized capital stock of Buyer consists of 110,000,000 shares
of common stock, no par value ("COMMON STOCK"), and 38,000,000 shares of
Preferred Stock, no par value, of which 3,450,000 shares are designated "SERIES
A PREFERRED STOCK," 6,002,000 shares are designated "SERIES B PREFERRED STOCK,"
6,000,000 shares are designated "SERIES C PREFERRED STOCK," and 13,000,000 are
designated "SERIES D PREFERRED STOCK." Immediately prior to entering into this
Agreement, there shall be outstanding 53,833,021 shares of Common Stock,
3,450,000 shares of Series A Preferred Stock, 5,717,135 shares of Series B
Preferred Stock, 6,000,000 shares of Series C Preferred Stock, and approximately
5,057,020 shares of Series D Preferred Stock (which number of shares of Series D
Preferred Stock may increase or decrease by 300,000). All of the outstanding
shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable, and were issued in compliance with applicable federal and state
securities laws. Buyer has reserved a sufficient number of shares of Series D
Preferred Stock for issuance hereunder, 3,450,000 shares of Common Stock for
issuance upon conversion of the Series A Preferred Stock, 6,002,000 shares of
Common Stock for issuance upon conversion of the Series B Preferred Stock,
6,000,000 shares of Common Stock for issuance upon conversion of the Series C
Preferred Stock, 13,000,000 shares of Common Stock for issuance upon
4
<PAGE>
conversion of the Series D Preferred Stock, 15,000,000 shares of Common Stock
for issuance under Buyer's 1996 Stock Plan, 17,500,000 shares of Common Stock
for issuance under Buyer's 1999 Executive Stock Plan, and 9,000,000 shares of
Common Stock for issuance under Buyer's 1999 Employee Stock Plan. Of the
15,000,000 shares of Common Stock Buyer has reserved for issuance under Buyer's
1996 Stock Plan, options to purchase 1,526,736 shares are outstanding and
534,835 shares remain available for future grants. Of the 17,500,000 shares of
Common Stock Buyer has reserved for issuance under Buyer's 1999 Executive Stock
Plan, options to purchase 16,005,000 shares are outstanding and 1,495,000 shares
remain available for future grants. Of the 9,000,000 shares of Common Stock
Buyer has reserved for issuance under Buyer's 1999 Employee Stock Plan, options
to purchase 1,951,165 shares are outstanding and 6,145,335 shares remain
available for future grants. Except for (i) conversion privileges of the Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and
Series D Preferred Stock and (ii) outstanding options (or options reserved for
future grant) to purchase shares of Common Stock granted to employees or
consultants pursuant to Buyer's stock plans or arrangements, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from Buyer of any shares
of its capital stock.
3.4 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, the authorization, sale, issuance and
delivery of the Purchase Consideration and the performance of Buyer's
obligations under the Agreement has been taken. This Agreement, when executed
and delivered by Buyer, shall constitute a valid and binding obligation of
Buyer, enforceable in accordance with its terms.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.6 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or
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finders' fees or agents' commissions or any other similar payments in connection
with this Agreement.
3.7 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any director, officer, employee,
agent, consultant, advisor, or other representative of Seller, including legal
counsel, accountants, and financial advisors ("REPRESENTATIVES"), directly or
indirectly, from soliciting, initiating, or encouraging any inquiries or
proposals from, discussing or negotiating with, providing any non-public
information to, or considering the merits of any unsolicited inquiries or
proposals from, any Person (other than Buyer) relating to any transaction
involving the sale of the business or assets of the Company, or any of the
capital stock of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
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5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered
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collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all material
respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Sections 1.3(b)(i) and 1.3(b)(iii).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before
February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 7.1, all
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further obligations of the parties under this Agreement will terminate, except
that the obligations in Section 8.1 will survive; PROVIDED, HOWEVER, that if
this Agreement is terminated by a party because of the breach of the Agreement
by the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing, Seller shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
Kline Hawkes California SBIC
11726 San Vicente Boulevard
Suite 300
Los Angeles, California 90049
Attention: Jay Ferguson
Facsimile No.: (310) 442-4707
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with a copy to:
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th Floor
Los Angeles, California 90067
Attention: Howard Kern, Esq.
Facsimile No. (310) 728-2336
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party
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or of the right of the party giving such notice or demand to take further action
without notice or demand as provided in this Agreement or the documents referred
to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement to any
subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
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8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
---------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: KLINE HAWKES CALIFORNIA SBIC
By: /s/ Joseph E. Ferguson
---------------------------
Name: Joseph E. Ferguson
Title: Treasurer and Secretary
S-1
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EXHIBIT A
BILL GROSS' IDEALAB!
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
[intentionally omitted]
<PAGE>
EXHIBIT B
BILL GROSS' IDEALAB!
INVESTOR RIGHTS AGREEMENT
[intentionally omitted]
EXHIBIT 3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and
Howard L. Morgan, an individual residing in Pennsylvania ("SELLER").
RECITALS
A. Seller desires to sell, and Buyer desires to purchase, 66,666
shares (together with all contractual rights of Seller in such shares, the
"SHARES") of common stock, $.0001 par value per share, of GoTo.com, Inc., a
Delaware corporation (the "COMPANY"), for the consideration and on the terms set
forth in this Agreement.
B. Immediately following such purchase of the Shares, Buyer intends to
sell, and Seller intends to purchase, 25,000 shares of Series D Preferred Stock,
no par value, of Buyer ("SERIES D PREFERRED STOCK") for $100 per share.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer paying to Seller $5,333,280 (the
"PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
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(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $2,833,280 in cash by wire transfer of immediately available
funds in accordance with Seller's written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
(c) In lieu of Buyer delivering the remaining $2,500,000 of the
Purchase Consideration to Seller, and Seller receiving such consideration,
the remaining $2,500,000 of the Purchase Consideration will be applied to
Seller's purchase of 25,000 shares of Series D Preferred Stock for $100 per
share pursuant to (i) a Series D Preferred Stock Purchase Agreement, dated
as of the Closing Date (the "SERIES D PURCHASE AGREEMENT") and (ii) an
Amended and Restated Investor Rights Agreement, dated as of the Closing
Date (the "INVESTOR RIGHTS AGREEMENT," and together with the Series D
Purchase Agreement, the "INVESTMENT AGREEMENTS"), which the parties will
enter into on the Closing Date substantially in the forms attached hereto
as EXHIBITS A AND B, respectively.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 AUTHORITY
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement (including entering
into the Investment Agreements), and Buyer's acquisition and ownership of the
Shares (the "CONTEMPLATED TRANSACTIONS"), by Seller will give any individual,
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corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
("PERSON") the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to: (i) any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty (except for compliance with the HSR Act) ("LEGAL REQUIREMENT") or any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or other
governmental body or by any arbitrator ("ORDER") to which Seller may be subject;
or (ii) any contract to which Seller is a party or by which Seller may be bound.
Seller is not and will not be required to obtain any consent from any Person in
connection with the execution, delivery and performance of this Agreement.
2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of his Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). No legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
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3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
under this Agreement.
3.3 CAPITALIZATION
The authorized capital stock of Buyer consists of 110,000,000 shares
of common stock, no par value (the "COMMON STOCK"), and 38,000,000 shares of
Preferred Stock, no par value, of which 3,450,000 shares are designated "SERIES
A PREFERRED STOCK," 6,002,000 shares are designated "SERIES B PREFERRED STOCK,"
6,000,000 shares are designated "SERIES C PREFERRED STOCK," and 13,000,000 are
designated "SERIES D PREFERRED STOCK." Immediately prior to entering into this
Agreement, there shall be outstanding 53,833,021 shares of Common Stock,
3,450,000 shares of Series A Preferred Stock, 5,717,135 shares of Series B
Preferred Stock, 6,000,000 shares of Series C Preferred Stock, and approximately
5,057,020 shares of Series D Preferred Stock (which number of shares of Series D
Preferred Stock may increase or decrease by 300,000). All of the outstanding
shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable, and were issued in compliance with applicable federal and state
securities laws. Buyer has reserved a sufficient number of shares of Series D
Preferred Stock for issuance hereunder, 3,450,000 shares of Common Stock for
issuance upon conversion of the Series A Preferred Stock, 6,002,000 shares of
Common Stock for issuance upon conversion of the Series B Preferred Stock,
6,000,000 shares of Common Stock for issuance upon conversion of the Series C
Preferred Stock, 13,000,000 shares of Common Stock for issuance upon conversion
of the Series D Preferred Stock, 15,000,000 shares of Common Stock for issuance
under Buyer's 1996 Stock Plan, 17,500,000 shares of Common Stock for issuance
under Buyer's 1999 Executive Stock Plan, and 9,000,000 shares of Common Stock
for issuance under Buyer's 1999 Employee Stock Plan. Of the 15,000,000 shares of
Common Stock Buyer has reserved for issuance under Buyer's 1996 Stock Plan,
options to purchase 1,526,736 shares are outstanding and 534,835 shares remain
available for future grants. Of the 17,500,000 shares of Common Stock Buyer has
reserved for issuance under Buyer's 1999 Executive Stock Plan, options to
purchase 16,005,000 shares are outstanding and 1,495,000 shares remain available
for future grants. Of the 9,000,000 shares of Common Stock Buyer has reserved
for issuance under Buyer's 1999 Employee Stock Plan, options to purchase
1,951,165 shares are outstanding and 6,145,335 shares remain available for
future grants. Except for (i) conversion privileges of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D
Preferred Stock and (ii) outstanding options (or options reserved for future
grant) to purchase shares of Common Stock granted to employees or consultants
pursuant to Buyer's stock plans or arrangements, there are no outstanding
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from Buyer of any shares of its
capital stock.
3.4 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, the authorization, sale, issuance and
delivery of the Purchase Consideration and the performance of Buyer's
obligations under the Agreement has been taken. This Agreement, when executed
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and delivered by Buyer, shall constitute a valid and binding obligation of
Buyer, enforceable in accordance with its terms.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.6 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.7 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any employee, agent, consultant,
advisor, or other representative of Seller, including legal counsel,
accountants, and financial advisors ("REPRESENTATIVES"), directly or indirectly,
from soliciting, initiating, or encouraging any inquiries or proposals from,
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discussing or negotiating with, providing any non-public information to, or
considering the merits of any unsolicited inquiries or proposals from, any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
("PERSON") (other than Buyer) relating to any transaction involving the sale of
the business or assets of the Company, or any of the capital stock of the
Company, or any merger, consolidation, business combination, or similar
transaction involving the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to
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obtain beneficial ownership of, the Shares or (b) is entitled to all or any
portion of the Purchase Consideration payable to Seller for the Shares.
5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Sections 1.3(b)(i) and 1.3(b)(ii).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
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7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it or he may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 7.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Section 8.1 will survive; PROVIDED, HOWEVER, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its or his obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its or his own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
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8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing, Seller shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
Howard L. Morgan
746 Mt. Moro Road
Villanova, Pennsylvania 19085
Facsimile No.: (413) 556-1781
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the
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appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its or his rights under this Agreement
without the prior consent of the other parties, which will not be unreasonably
withheld, except that Buyer may assign any of its rights under this Agreement to
any subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
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8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
--------------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: HOWARD L. MORGAN
/s/ Howard L. Morgan
-----------------------------------
S-1
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CONSENT OF SPOUSE
I, Eleanor Morgan, spouse of Howard L. Morgan, have read and approve
---------------
the foregoing Agreement. In consideration of granting of the right to my spouse
to receive the Purchase Consideration as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the foregoing Agreement.
Dated: December 23, 1999
/s/ Eleanor Morgan
-----------------------------
(Signature of Spouse)
<PAGE>
EXHIBIT A
BILL GROSS' IDEALAB!
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
[intentionally omitted]
<PAGE>
EXHIBIT B
BILL GROSS' IDEALAB!
INVESTOR RIGHTS AGREEMENT
[intentionally omitted]
EXHIBIT 4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and
Oliver A. McBryan, an individual residing in Colorado ("SELLER").
RECITALS
A. Seller desires to sell, and Buyer desires to purchase, 200,000
shares (together with all contractual rights of Seller in such shares, the
"SHARES") of common stock, $.0001 par value per share, of GoTo.com, Inc., a
Delaware corporation (the "COMPANY"), for the consideration and on the terms set
forth in this Agreement.
B. Immediately following such purchase of the Shares, Buyer intends to
sell, and Seller intends to purchase, 110,000 shares of Series D Preferred
Stock, no par value, of Buyer ("SERIES D PREFERRED STOCK") for $100 per share.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer paying to Seller $16,000,000 (the
"PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
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(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $5,000,000 of the Purchase Consideration in cash by wire
transfer of immediately available funds in accordance with Seller's
written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
(c) In lieu of Buyer delivering the remaining $11,000,000 of the
Purchase Consideration to Seller, and Seller receiving such consideration,
the remaining $11,000,000 of the Purchase Consideration will be applied to
Seller's purchase of 110,000 shares of Series D Preferred Stock for $100
per share pursuant to (i) a Series D Preferred Stock Purchase Agreement,
dated as of the Closing Date (the "SERIES D PURCHASE AGREEMENT") and (ii)
an Amended and Restated Investor Rights Agreement, dated as of the Closing
Date (the "INVESTOR RIGHTS AGREEMENT," and together with the Series D
Purchase Agreement, the "INVESTMENT AGREEMENTS"), which the parties will
enter into on the Closing Date substantially in the forms attached hereto
as EXHIBITS A AND B, respectively.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 CORPORATE POWER
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement (including entering
into the Investment Agreements), and Buyer's acquisition and
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ownership of the Shares (the "CONTEMPLATED TRANSACTIONS"), by Seller will give
any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
("PERSON") the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to: (i) any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty (except for compliance with the HSR Act) ("LEGAL REQUIREMENT") or any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or other
governmental body or by any arbitrator ("ORDER") to which Seller may be subject;
or (ii) any contract to which Seller is a party or by which Seller may be bound.
Seller is not and will not be required to obtain any consent from any Person in
connection with the execution, delivery and performance of this Agreement.
2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of his Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). No legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing
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in each jurisdiction in which the failure so to qualify would have a material
adverse effect on its business, assets, financial condition, results of
operations or properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
under this Agreement.
3.3 CAPITALIZATION
The authorized capital stock of Buyer consists of 110,000,000 shares
of common stock, no par value (the "COMMON STOCK"), and 38,000,000 shares of
Preferred Stock, no par value, of which 3,450,000 shares are designated "SERIES
A PREFERRED STOCK," 6,002,000 shares are designated "SERIES B PREFERRED STOCK,"
6,000,000 shares are designated "SERIES C PREFERRED STOCK," and 13,000,000 are
designated "SERIES D PREFERRED STOCK." Immediately prior to entering into this
Agreement, there shall be outstanding 53,833,021 shares of Common Stock,
3,450,000 shares of Series A Preferred Stock, 5,717,135 shares of Series B
Preferred Stock, 6,000,000 shares of Series C Preferred Stock, and approximately
5,057,020 shares of Series D Preferred Stock (which number of shares of Series D
Preferred Stock may increase or decrease by 300,000). All of the outstanding
shares of capital stock are duly authorized, validly issued, fully paid and
nonassessable, and were issued in compliance with applicable federal and state
securities laws. Buyer has reserved a sufficient number of shares of Series D
Preferred Stock for issuance hereunder, 3,450,000 shares of Common Stock for
issuance upon conversion of the Series A Preferred Stock, 6,002,000 shares of
Common Stock for issuance upon conversion of the Series B Preferred Stock,
6,000,000 shares of Common Stock for issuance upon conversion of the Series C
Preferred Stock, 13,000,000 shares of Common Stock for issuance upon conversion
of the Series D Preferred Stock, 15,000,000 shares of Common Stock for issuance
under Buyer's 1996 Stock Plan, 17,500,000 shares of Common Stock for issuance
under Buyer's 1999 Executive Stock Plan, and 9,000,000 shares of Common Stock
for issuance under Buyer's 1999 Employee Stock Plan. Of the 15,000,000 shares of
Common Stock Buyer has reserved for issuance under Buyer's 1996 Stock Plan,
options to purchase 1,526,736 shares are outstanding and 534,835 shares remain
available for future grants. Of the 17,500,000 shares of Common Stock Buyer has
reserved for issuance under Buyer's 1999 Executive Stock Plan, options to
purchase 16,005,000 shares are outstanding and 1,495,000 shares remain available
for future grants. Of the 9,000,000 shares of Common Stock Buyer has reserved
for issuance under Buyer's 1999 Employee Stock Plan, options to purchase
1,951,165 shares are outstanding and 6,145,335 shares remain available for
future grants. Except for (i) conversion privileges of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D
Preferred Stock and (ii) outstanding options (or options reserved for future
grant) to purchase shares of Common Stock granted to employees or consultants
pursuant to Buyer's stock plans or arrangements, there are no outstanding
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from Buyer of any shares of its
capital stock.
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3.4 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, the authorization, sale, issuance and
delivery of the Purchase Consideration and the performance of Buyer's
obligations under the Agreement has been taken. This Agreement, when executed
and delivered by Buyer, shall constitute a valid and binding obligation of
Buyer, enforceable in accordance with its terms.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.6 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.7 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
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4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any director, officer, employee,
agent, consultant, advisor, or other representative of Seller, including legal
counsel, accountants, and financial advisors ("REPRESENTATIVES"), directly or
indirectly, from soliciting, initiating, or encouraging any inquiries or
proposals from, discussing or negotiating with, providing any non-public
information to, or considering the merits of any unsolicited inquiries or
proposals from, any Person (other than Buyer) relating to any transaction
involving the sale of the business or assets of the Company, or any of the
capital stock of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
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5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Sections 1.3(b)(i) and 1.3(b)(ii).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
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7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it or he may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 7.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Section 8.1 will survive; PROVIDED, HOWEVER, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its or his obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its or his own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
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8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing, Seller shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
Oliver A. McBryan
1901 Park Lake Drive
Boulder, Colorado 80301
Facsimile No.: (303) 665-0556
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the
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appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement to any
subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
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8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
---------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: OLIVER A. McBRYAN
/s/ Oliver A. McBryan
---------------------------
S-1
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CONSENT OF SPOUSE
I, Ann McBryan, spouse of Oliver A. McBryan, have read and approve
------------
the foregoing Agreement. In consideration of granting of the right to my spouse
to receive the Purchase Consideration as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the foregoing Agreement.
Dated: December 23, 1999
/s/ Ann McBryan
-----------------------------
(Signature of Spouse)
<PAGE>
EXHIBIT A
BILL GROSS' IDEALAB!
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
[intentionally omitted]
<PAGE>
EXHIBIT B
BILL GROSS' IDEALAB!
INVESTOR RIGHTS AGREEMENT
[intentionally omitted]
EXHIBIT 5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and Bob
Kavner, an individual residing in California ("SELLER").
RECITALS
Seller desires to sell, and Buyer desires to purchase, 375,871 shares
(together with all contractual rights of Seller in such shares, the "SHARES") of
common stock, $.0001 par value per share, of GoTo.com, Inc., a Delaware
corporation (the "COMPANY"), for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer delivering to Seller $30,069,680 in
cash (the "PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
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(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $30,069,680 in cash by wire transfer of immediately available
funds in accordance with Seller's written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 AUTHORITY
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement, and Buyer's
acquisition and ownership of the Shares (the "CONTEMPLATED TRANSACTIONS"), by
Seller will give any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or governmental body ("PERSON") the right to prevent, delay, or otherwise
interfere with any of the Contemplated Transactions pursuant to: (i) any
federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty (except for compliance with the HSR Act)
("LEGAL REQUIREMENT") or any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other governmental body or by any arbitrator ("ORDER")
to which Seller may be subject; or (ii) any contract to which Seller is a party
or by which Seller may be bound. Seller is not and will not be required to
obtain any consent from any Person in connection with the execution, delivery
and performance of this Agreement.
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2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of his Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). No legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
3.3 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, and the performance of Buyer's
obligations under the Agreement has been taken. The Agreement, when executed and
delivered by Buyer, shall constitute a valid and binding obligation of Buyer,
enforceable in accordance with its terms.
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3.4 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.5 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.6 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any employee, agent, consultant,
advisor, or other representative of Seller, including legal counsel,
accountants, and financial advisors ("REPRESENTATIVES"), directly or indirectly,
from soliciting, initiating, or encouraging any inquiries or proposals from,
discussing or negotiating with, providing any non-public information to, or
considering the merits of any unsolicited inquiries or proposals from, any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
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("PERSON") (other than Buyer) relating to any transaction involving the sale of
the business or assets of the Company, or any of the capital stock of the
Company, or any merger, consolidation, business combination, or similar
transaction involving the Company. Notwithstanding the foregoing, nothing in
this Section 4.2 shall in any way prevent or prohibit Seller from taking any
action to fulfill his fiduciary duties as a director of the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
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<PAGE>
5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Section 1.3(b)(i).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
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(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it or he may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 7.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Section 8.1 will survive; PROVIDED, HOWEVER, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its or his obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing,
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Seller shall keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), PROVIDED that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
Bob Kavner
20680 Leonard Road
Saratoga, California 95070
Facsimile No.: (408) 867-9853
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
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8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its or his rights under this Agreement
without the prior consent of the other parties, which will not be unreasonably
withheld, except that Buyer may assign any of its rights under this Agreement to
any subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections"
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refer to the corresponding Section or Sections of this Agreement. All words used
in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
----------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: BOB KAVNER
/s/ Bob Kavner
----------------------------
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CONSENT OF SPOUSE
I, Allyson Kavner, spouse of Bob Kavner, have read and approve the
---------------
foregoing Agreement. In consideration of granting of the right to my spouse to
receive the Purchase Consideration as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the foregoing Agreement.
Dated: December 23, 1999
/s/ Allyson Kavner
-----------------------------
(Signature of Spouse)
EXHIBIT 6
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and
William S. Elkus, an individual residing in California ("SELLER").
RECITALS
Seller desires to sell, and Buyer desires to purchase, 166,911 shares
(together with all contractual rights of Seller in such shares, the "SHARES") of
common stock, $.0001 par value per share, of GoTo.com, Inc., a Delaware
corporation (the "COMPANY"), for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer delivering to Seller $13,352,880 in
cash (the "PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
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(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $13,352,880 in cash by wire transfer of immediately available
funds in accordance with Seller's written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 AUTHORITY
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement, and Buyer's
acquisition and ownership of the Shares (the "CONTEMPLATED TRANSACTIONS"), by
Seller will give any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability Buyer, joint
venture, estate, trust, association, organization, labor union, or other entity
or governmental body ("PERSON") the right to prevent, delay, or otherwise
interfere with any of the Contemplated Transactions pursuant to: (i) any
federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty (except for compliance with the HSR Act)
("LEGAL REQUIREMENT") or any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other governmental body or by any arbitrator ("ORDER")
to which Seller may be subject; or (ii) any contract to which Seller is a party
or by which Seller may be bound. Seller is not and will not be required to
obtain any consent from any Person in connection with the execution, delivery
and performance of this Agreement.
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2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of its Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). No legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
3.3 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, and the performance of Buyer's
obligations under the Agreement has been taken. The Agreement, when executed and
delivered by Buyer, shall constitute a valid and binding obligation of Buyer,
enforceable in accordance with its terms.
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3.4 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.5 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.6 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any employee, agent, consultant,
advisor, or other representative of Seller, including legal counsel,
accountants, and financial advisors ("REPRESENTATIVES"), directly or indirectly,
from soliciting, initiating, or encouraging any inquiries or proposals from,
discussing or negotiating with, providing any non-public information to, or
considering the merits of any unsolicited inquiries or proposals from, any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body
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("PERSON") (other than Buyer) relating to any transaction involving the sale of
the business or assets of the Company, or any of the capital stock of the
Company, or any merger, consolidation, business combination, or similar
transaction involving the Company. Notwithstanding the foregoing, nothing in
this Section 4.2 shall in any way prevent or prohibit Seller from taking any
action to fulfill his fiduciary duties as a director of the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
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5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Section 1.3(b)(i).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
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(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it or he may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 7.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Section 8.1 will survive; PROVIDED, HOWEVER, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its or his obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its or his own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing,
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Seller shall keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
William S. Elkus
c/o idealab! Capital Partners
130 West Union Street
Pasadena, California 91103
Facsimile No.: (310) 573-6277
with a copy to:
James K. Baer
Strategic Law Partners
333 South Grand Avenue, Suite 3970
Los Angeles, California 90071
Facsimile No.: (213) 213-7301
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
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8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its or his rights under this Agreement
without the prior consent of the other parties, which will not be unreasonably
withheld, except that Buyer may assign any of its rights under this Agreement to
any subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
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8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
--------------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: WILLIAM S. ELKUS
/s/ William S. Elkus
--------------------------------
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CONSENT OF SPOUSE
I, Leslie Elkus, spouse of William S. Elkus, have read and approve
-------------
the foregoing Agreement. In consideration of granting of the right to my spouse
to receive the Purchase Consideration as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the foregoing Agreement.
Dated: December 23, 1999
/s/ Leslie Elkus
-----------------------------
(Signature of Spouse)
EXHIBIT 7
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and Bruce
Hendricks, an individual residing in Maryland ("SELLER").
RECITALS
Seller desires to sell, and Buyer desires to purchase, 150,000 shares
(together with all contractual rights of the Seller in such shares, the
"SHARES") of common stock, $.0001 par value per share, of GoTo.com, Inc., a
Delaware corporation (the "COMPANY"), for the consideration and on the terms set
forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer delivering to Seller $12,000,000 in
cash (the "PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
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(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $12,000,000 in cash by wire transfer of immediately available
funds in accordance with Seller's written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except
as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 AUTHORITY
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement, and Buyer's
acquisition and ownership of the Shares (the "CONTEMPLATED TRANSACTIONS"), by
Seller will give any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or governmental body ("PERSON") the right to prevent, delay, or otherwise
interfere with any of the Contemplated Transactions pursuant to: (i) any
federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty (except for compliance with the HSR Act)
("LEGAL REQUIREMENT") or any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other governmental body or by any arbitrator ("ORDER")
to which Seller may be subject; or (i) any contract to which Seller is a party
or by which Seller may be bound. Seller is not and will not be required to
obtain any consent from any Person in connection with the execution, delivery
and performance of this Agreement.
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2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of its Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). Except for
legends or other references to any purported Encumbrance appearing on the
certificates representing the Shares as of the date of this Agreement, no legend
or other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
3.3 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, and the performance of Buyer's
obligations under the Agreement has been taken. The
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Agreement, when executed and delivered by Buyer, shall constitute a valid and
binding obligation of Buyer, enforceable in accordance with its terms.
3.4 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.5 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.6 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, at
Buyer's expense, Buyer will make all filings, and thereafter make any other
required submissions, with respect to this Agreement, required to be made by
Buyer under the HSR Act and any related governmental request thereunder. Seller
shall cooperate with Buyer in the preparation of such filing and furnish to
Buyer any information about Seller required for Buyer to complete such filings.
4.2 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under
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applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
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5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Section 1.3(b)(i).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure
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of Seller to comply with their obligations under this Agreement) and Seller
have not waived such condition on or before the Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 1999, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights, including the right of specific performance, it or he may have
under this Agreement or otherwise, and the exercise of a right of termination
will not be an election of remedies. If this Agreement is terminated pursuant to
Section 7.1, all further obligations of the parties under this Agreement will
terminate, except that the obligations in Section 8.1 will survive; PROVIDED,
HOWEVER, that if this Agreement is terminated by a party because of the breach
of the Agreement by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its or his obligations under
this Agreement, the terminating party's right to pursue all legal remedies,
including the right of specific performance, will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Unless consented to by Buyer in
advance or required by law, prior to the Closing, Seller shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or
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to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
Seller:
Bruce Hendricks
11844 Beekman Place
Potomac, Maryland 20854
Facsimile No.: (301) 951-3241
with a copy to:
Hale & Dorr, LLP
1455 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Attention: Steven Snider, Esq.
Facsimile No.: (202) 393-6521
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Maryland, and each of the parties consents
to the jurisdiction of such courts (and of the appropriate appellate courts) in
any such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or
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privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement to any
subsidiary of Buyer and that Seller may, for estate planning purposes only,
assign any of its rights under this Agreement to a trust. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require.
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Unless otherwise expressly provided, the word "including" does not limit the
preceding words or terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of Maryland
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
-------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller: BRUCE HENDRICKS
/s/ Bruce Hendricks
-------------------------
S-1
EXHIBIT 8
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and Moore
Global Investments, Ltd., a limited company organized under the laws of the
Bahamas ("MOORE"), Multi-Strategies Fund Ltd., a limited company organized under
the laws of the Bahamas ("MULTI-STRATEGIES CO."), Remington Investments
Strategies, L.P., a Delaware limited partnership ("REMINGTON"), and
Multi-Strategies Fund L.P., a Delaware limited partnership ("MULTI-STRATEGIES
L.P."). Each of Moore, Remington, Multi-Strategies Co. and Multi-Strategies L.P.
is "SELLER," and Moore, Remington, Multi-Strategies Co. and Multi-Strategies
L.P. are, collectively, "SELLERS."
RECITALS
A. Sellers desire to sell, and Buyer desires to purchase, 2,100,000
shares (together with all contractual rights of Sellers in such shares, the
"SHARES") of common stock, $.0001 par value per share, of GoTo.com, Inc., a
Delaware corporation (the "COMPANY"), for the consideration and on the terms set
forth in this Agreement.
B. Immediately following such purchase of the Shares, Buyer intends to
sell, and Sellers intend to purchase, 1,743,000 shares of Series D Preferred
Stock, no par value, of Buyer ("SERIES D PREFERRED STOCK") for $100 per share.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Sellers will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Sellers, in exchange for Buyer paying to Sellers $174,300,000 (the
"PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
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1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Each Seller will deliver to Buyer:
(i) the certificates representing the Shares owned by such
Seller, duly endorsed (or accompanied by duly executed stock powers)
for transfer to Buyer; and
(ii) a certificate executed by Seller representing and warranting
to Buyer that each of such Seller's representations and warranties in
this Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to each Seller a certificate executed by Buyer
to the effect that, except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was accurate in
all respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date.
(c) In lieu of Buyer delivering the Purchase Consideration to Sellers,
and Sellers receiving such consideration, the Purchase Consideration will
be applied to Sellers' purchase of 1,743,000 shares of Series D Preferred
Stock for $100 per share pursuant to (i) a Series D Preferred Stock
Purchase Agreement, dated as of the Closing Date (the "SERIES D PURCHASE
AGREEMENT") and (ii) an Amended and Restated Investor Rights Agreement,
dated as of the Closing Date (the "INVESTOR RIGHTS AGREEMENT," and together
with the Series D Purchase Agreement, the "INVESTMENT AGREEMENTS"), which
the parties will enter into on the Closing Date substantially in the forms
attached hereto as EXHIBITS A AND B, respectively.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyer for itself only as
follows:
2.1 ORGANIZATION AND GOOD STANDING
Moore is a limited company duly organized, validly existing, and in
good standing under the laws of the Bahamas. Multi-Strategies Co. is a limited
company duly organized, validly existing, and in good standing under the laws of
the Bahamas. Remington is a limited partnership duly organized, validly existing
and in good standing under the laws of the state of Delaware. Multi-Strategies
L.P. is a limited partnership duly organized, validly existing and in good
standing under the laws of the state of Delaware. Each of Moore and
Multi-Strategies Co. has requisite corporate power and authority, and each of
Remington and Multi-Strategies L.P. has requisite partnership power and
authority, to carry on its respective businesses as presently conducted and as
proposed to be conducted. Each Seller is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure so to qualify
would
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have a material adverse effect on its business, assets, financial condition,
results of operations or properties.
2.2 CORPORATE POWER; PARTNERSHIP POWER
Each of Moore and Multi-Strategies Co. has all requisite legal and
corporate power and authority, and each of Remington and Multi-Strategies L.P.
has all requisite legal and partnership power and authority, to execute and
deliver this Agreement and to perform its respective obligations under this
Agreement.
2.3 AUTHORIZATION
All corporate action on the part of each of Moore and Multi-Strategies
Co., their respective officers, directors and shareholders, and all partnership
action on the part of each of Remington and Multi-Strategies L.P, their
respective partners and officers, necessary for the authorization, execution,
delivery and performance of this Agreement by each Seller and the performance of
each Seller's obligations under this Agreement has been taken. Neither the
execution, delivery or performance of this Agreement by Sellers nor the
consummation or performance of any or all of the transactions contemplated by
this Agreement, including, without limitation, the sale of the Shares by Sellers
to Buyer, the performance by Buyer and Sellers of their respective covenants and
obligations under this Agreement (including entering into the Investment
Agreements), and Buyer's acquisition and ownership of the Shares (the
"CONTEMPLATED TRANSACTIONS"), by Sellers will give any individual, corporation
(including any non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization,
labor union, or other entity or governmental body ("PERSON") the right to
prevent, delay, or otherwise interfere with any of the Contemplated Transactions
pursuant to: (i) any provision of any Seller's articles of incorporation,
bylaws, charter, limited partnership agreement or similar document adopted or
filed in connection with the creation, formation, or organization of any Seller,
or any amendment to any of the foregoing ("SELLER'S ORGANIZATIONAL DOCUMENTS");
(ii) any resolution adopted by the board of directors or the stockholders of
either Moore or Multi-Strategies Co. or by the general partners of either
Remington or Multi-Strategies L.P.; (iii) any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty (except for compliance with the HSR Act) ("LEGAL REQUIREMENT") or any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or other
governmental body or by any arbitrator ("ORDER") to which any Seller may be
subject; or (iv) any contract to which any Seller is a party or by which any
Seller may be bound. Each Seller is not and will not be required to obtain any
consent from any Person in connection with the execution, delivery and
performance of this Agreement.
2.4 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in any violation of, or conflict with, or constitute,
with or without the passage of time and the giving of notice, a default under,
(i) Moore's articles of incorporation, as amended,
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or bylaws, as amended, (ii) Multi-Strategies Co.'s articles of incorporation, as
amended, or bylaws, as amended, (iii) Remington's limited partnership agreement,
as amended, (iv) Multi-Strategies L.P.'s limited partnership agreement, as
amended, or (v) any of any Seller's agreements nor result in the creation of,
any mortgage, pledge, lien, encumbrance or charge upon the Shares.
2.5 OWNERSHIP
Each Seller is and will be on the Closing Date the record and
beneficial owner and holder of its Shares, free and clear of all charges,
claims, community property interests, conditions, equitable interests, liens,
options, pledges, security interests, rights of first refusal, or restrictions
of any kind, including any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership (except for restrictions
with respect to applicable securities laws) ("ENCUMBRANCES"). No legend or other
reference to any purported Encumbrance appears upon any certificate representing
the Shares. There are no contracts relating to the issuance, sale, or transfer
of the Shares.
2.6 BROKERS OR FINDERS
Each Seller has not incurred, and will not incur, directly or
indirectly, as a result of any action taken by such Seller, any obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
under this Agreement.
3.3 CAPITALIZATION
The authorized capital stock of Buyer consists of 110,000,000 shares
of common stock, no par value ("COMMON STOCK"), and 38,000,000 shares of
Preferred Stock, no par value, of which 3,450,000 shares are designated "SERIES
A PREFERRED STOCK," 6,002,000 shares are
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designated "SERIES B PREFERRED STOCK," 6,000,000 shares are designated "SERIES C
PREFERRED STOCK," and 13,000,000 are designated "SERIES D PREFERRED STOCK."
Immediately prior to entering into this Agreement, there shall be outstanding
53,833,021 shares of Common Stock, 3,450,000 shares of Series A Preferred Stock,
5,717,135 shares of Series B Preferred Stock, 6,000,000 shares of Series C
Preferred Stock, and approximately 5,057,020 shares of Series D Preferred Stock
(which number of shares of Series D Preferred Stock may increase or decrease by
300,000). All of the outstanding shares of capital stock are duly authorized,
validly issued, fully paid and nonassessable, and were issued in compliance with
applicable federal and state securities laws. Buyer has reserved a sufficient
number of shares of Series D Preferred Stock for issuance hereunder, 3,450,000
shares of Common Stock for issuance upon conversion of the Series A Preferred
Stock, 6,002,000 shares of Common Stock for issuance upon conversion of the
Series B Preferred Stock, 6,000,000 shares of Common Stock for issuance upon
conversion of the Series C Preferred Stock, 13,000,000 shares of Common Stock
for issuance upon conversion of the Series D Preferred Stock, 15,000,000 shares
of Common Stock for issuance under Buyer's 1996 Stock Plan, 17,500,000 shares of
Common Stock for issuance under Buyer's 1999 Executive Stock Plan, and 9,000,000
shares of Common Stock for issuance under Buyer's 1999 Employee Stock Plan. Of
the 15,000,000 shares of Common Stock Buyer has reserved for issuance under
Buyer's 1996 Stock Plan, options to purchase 1,526,736 shares are outstanding
and 534,835 shares remain available for future grants. Of the 17,500,000 shares
of Common Stock Buyer has reserved for issuance under Buyer's 1999 Executive
Stock Plan, options to purchase 16,005,000 shares are outstanding and 1,495,000
shares remain available for future grants. Of the 9,000,000 shares of Common
Stock Buyer has reserved for issuance under Buyer's 1999 Employee Stock Plan,
options to purchase 1,951,165 shares are outstanding and 6,145,335 shares remain
available for future grants. Except for (i) conversion privileges of the Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and
Series D Preferred Stock and (ii) outstanding options (or options reserved for
future grant) to purchase shares of Common Stock granted to employees or
consultants pursuant to Buyer's stock plans or arrangements, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from Buyer of any shares
of its capital stock.
3.4 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, the authorization, sale, issuance and
delivery of the Purchase Consideration and the performance of Buyer's
obligations under the Agreement has been taken. This Agreement, when executed
and delivered by Buyer, shall constitute a valid and binding obligation of
Buyer, enforceable in accordance with its terms.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such
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violation would have a material adverse effect on its business, assets,
financial condition, results of operations or properties. The execution,
delivery and performance of and compliance with this Agreement will not result
in any violation of, or conflict with, or constitute, with or without the
passage of time and the giving of notice, a default under, Buyer's articles of
incorporation, as amended, or bylaws, as amended, or any of its agreements nor
result in the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of Buyer; and there is no such violation or
default which materially and adversely affects the business of Buyer or any of
its properties or assets.
3.6 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.7 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLERS PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Each Seller shall cooperate with
Buyer in the preparation of such filing and furnish to Buyer any information
about such Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, each Seller will not, and will prevent any director, partner,
officer, employee, agent, consultant, advisor, or other representative of such
Seller, including legal counsel, accountants, and financial advisors
("REPRESENTATIVES"), directly or indirectly, from soliciting, initiating, or
encouraging any inquiries or proposals from, discussing or negotiating with,
providing any non-public information to, or considering the merits of any
unsolicited inquiries or proposals from, any Person (other than Buyer) relating
to any transaction involving the sale of the business or assets of the Company,
or any of the capital stock of the Company, or any merger, consolidation,
business combination, or similar transaction involving the Company.
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4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers, directors and/or general partners of Buyer and Sellers
shall take all such necessary action.
4.4 NO AMENDMENT OR WAIVER OF ANTIDILUTION PROVISIONS
Buyer agrees not to amend or seek any waivers with respect to the
anti-dilution provisions in Article IV of Buyer's articles of incorporation
(other than amending the cross reference to Section C.6.d in the first sentence
of Section C.2 of Article IV) prior to the Closing.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLERS' PERFORMANCE
(a) All of the covenants and obligations that each Seller is required
to perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Sellers to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to
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obtain beneficial ownership of, the Shares or (b) is entitled to all or any
portion of the Purchase Consideration payable to Sellers for the Shares.
5.4 NO PROHIBITION
Neither the consummation nor the performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Each Seller's obligation to sell the Shares and to take the other
actions required to be taken by such Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by such Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Section 1.3(b)(i).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Sellers to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
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6.4 FINANCING
Buyer shall have issued at least $100.0 million of Series D Preferred
Stock to parties unrelated to Buyer.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Sellers if a material breach of any provision
of this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Sellers, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Sellers to comply with their obligations under this
Agreement) and Sellers have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before
February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 7.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Section 8.1
will survive; PROVIDED, HOWEVER, that if this Agreement is terminated by a party
because of the breach of the Agreement by the other party or because one or more
of the conditions to the terminating party's obligations under this Agreement is
not satisfied as a result of the other party's failure to comply with its
obligations under this Agreement, the terminating party's right to pursue all
legal remedies will survive such termination unimpaired.
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8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
8.2 PUBLIC ANNOUNCEMENTS
Except as required by law, any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as Buyer determines.
Unless consented to by Buyer in advance or required by law, prior to the
Closing, Sellers shall keep this Agreement strictly confidential and may not
make any disclosure of this Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers:
Moore Global Investments, Ltd.,
Multi-Strategies Fund Ltd.,
Remington Investments Strategies, L.P., and
Multi-Strategies Fund L.P.
c/o Moore Capital Management, Inc.
1251 Avenue of the Americas
New York, New York 10020
Attention: Michael Heffernan
Facsimile No.: (212) 575-6832
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Moore Capital Management, Inc.
1251 Avenue of the Americas
New York, New York 10020
Attention: Steve Nelson
Facsimile No.: (212) 782-7194
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Attention: James E. Kaye, Esq.
590 Madison Avenue, Floor 20
New York, New York 10022
Facsimile No.: (212) 872-1002
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege
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or the exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement to any
subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
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8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer:
BILL GROSS' IDEALAB!
By: /s/ Bill Gross
--------------------------------
Name: Bill Gross
Title: Chairman of the Board and
President
Seller:
MOORE GLOBAL INVESTMENTS, LTD.
By: Moore Capital Management, Inc.
By: /s/ Savvas Savvinidis
--------------------------------
Name: Savvas Savvinidis
Its: Trading Advisor
Title: Director of Operations
Seller:
MULTI-STRATEGIES FUND LTD.
By: Moore Capital Management, Inc.
By: /s/ Savvas Savvinidis
--------------------------------
Name: Savvas Savvinidis
Its: Trading Advisor
Title: Director of Operations
S-1
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Seller:
REMINGTON INVESTMENTS STRATEGIES, L.P.
By: Moore Capital Advisors, L.L.C.
By: /s/ Savvas Savvinidis
--------------------------------
Name: Savvas Savvinidis
Its: General Partner
Title: Director of Operations
Seller:
MULTI-STRATEGIES FUND L.P.
By: Moore Capital Advisors, L.L.C.
By: /s/ Savvas Savvinidis
--------------------------------
Name: Savvas Savvinidis
Its: General Partner
Title: Director of Operations
S-2
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EXHIBIT A
BILL GROSS' IDEALAB!
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
[intentionally omitted]
<PAGE>
EXHIBIT B
BILL GROSS' IDEALAB!
INVESTOR RIGHTS AGREEMENT
[intentionally omitted]
EXHIBIT 9
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("AGREEMENT") is made as of December 23,
1999 between Bill Gross' idealab!, a California corporation ("BUYER"), and Jim
Armstrong, an individual residing in California ("SELLER").
RECITALS
Seller desires to sell, and Buyer desires to purchase, 15,000 shares
(together with all contractual rights of Seller in such shares, the "SHARES") of
common stock, $.0001 par value per share, of GoTo.com, Inc., a Delaware
corporation (the "COMPANY"), for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE OF SHARES; CLOSING
1.1 SALE OF SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller, in exchange for Buyer delivering to Seller $1,200,000 in
cash (the "PURCHASE CONSIDERATION").
1.2 CLOSING
The purchase and sale provided for in this Agreement will take place
(the "CLOSING") at the offices of Latham & Watkins, at 633 West Fifth Street,
Los Angeles, California, 90071, at 7:00 a.m. (local time) on the date that is
two business days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law
(the "HSR ACT"), or at such other time and place as the parties may agree (the
"CLOSING DATE"). Subject to the provisions of Section 7, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 1.2 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
1.3 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) the certificates representing the Shares owned by Seller,
duly endorsed (or accompanied by duly executed stock powers) for
transfer to Buyer; and
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(ii) a certificate executed by Seller representing and warranting
to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
(b) Buyer will deliver to Seller:
(i) $1,200,000 in cash by wire transfer of immediately available funds
in accordance with Seller's written wiring instructions; and
(ii) a certificate executed by Buyer to the effect that, except as
otherwise stated in such certificate, each of Buyer's representations and
warranties in this Agreement was accurate in all respects as of the date of
this Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 AUTHORITY
Seller has all requisite legal power and authority to execute and
deliver this Agreement and to perform his obligations under this Agreement.
2.2 AUTHORIZATION
Neither the execution, delivery or performance of this Agreement by
Seller nor the consummation or performance of any or all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Shares by Seller to Buyer, the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement, and Buyer's
acquisition and ownership of the Shares (the "CONTEMPLATED TRANSACTIONS"), by
Seller will give any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or governmental body ("PERSON") the right to prevent, delay, or otherwise
interfere with any of the Contemplated Transactions pursuant to: (i) any
federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty (except for compliance with the HSR Act)
("LEGAL REQUIREMENT") or any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other governmental body or by any arbitrator ("ORDER")
to which Seller may be subject; or (ii) any contract to which Seller is a party
or by which Seller may be bound. Seller is not and will not be required to
obtain any consent from any Person in connection with the execution, delivery
and performance of this Agreement.
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2.3 COMPLIANCE WITH OTHER INSTRUMENTS
The execution, delivery and performance of and compliance with this
Agreement will not result in the creation of, any mortgage, pledge, lien,
encumbrance or charge upon the Shares.
2.4 OWNERSHIP
Seller is and will be on the Closing Date the record and beneficial
owner and holder of his Shares, free and clear of all charges, claims, community
property interests, conditions, equitable interests, liens, options, pledges,
security interests, rights of first refusal, or restrictions of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership ("ENCUMBRANCES"). No legend or
other reference to any purported Encumbrance appears upon any certificate
representing the Shares. There are no contracts relating to the issuance, sale,
or transfer of the Shares.
2.5 BROKERS OR FINDERS
Seller has not incurred, and will not incur, directly or indirectly,
as a result of any action taken by Seller, any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or any other similar payments in connection with this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of California. Buyer has requisite
corporate power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted and as proposed to be conducted.
Buyer is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on its business, assets, financial condition, results of operations or
properties.
3.2 CORPORATE POWER
Buyer has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
3.3 AUTHORIZATION
All corporate action on the part of Buyer, its officers, directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by Buyer, and the performance of Buyer's
obligations under the Agreement has been taken. The Agreement, when executed and
delivered by Buyer, shall constitute a valid and binding obligation of Buyer,
enforceable in accordance with its terms.
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3.4 COMPLIANCE WITH OTHER INSTRUMENTS
Buyer is not in violation or default of any term of its articles of
incorporation, as amended, or bylaws, as amended, or any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment, order or decree, and to its knowledge is not in violation of any
statute, rule or regulation applicable to Buyer where such violation would have
a material adverse effect on its business, assets, financial condition, results
of operations or properties. The execution, delivery and performance of and
compliance with this Agreement will not result in any violation of, or conflict
with, or constitute, with or without the passage of time and the giving of
notice, a default under, Buyer's articles of incorporation, as amended, or
bylaws, as amended, or any of its agreements nor result in the creation of, any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Buyer; and there is no such violation or default which materially and
adversely affects the business of Buyer or any of its properties or assets.
3.5 BROKERS OR FINDERS
Buyer has not incurred, and will not incur, directly or indirectly, as
a result of any action taken by Buyer, any obligation or liability, contingent
or otherwise, for brokerage or finders' fees or agents' commissions or any other
similar payments in connection with this Agreement.
3.6 FIRPTA
Buyer is not, and has not been at any time during the five year period
ending on the date of this Agreement, a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Internal Revenue Code
of 1986, as amended.
4. COVENANTS OF BUYER AND SELLER PRIOR TO CLOSING DATE
4.1 FILING FOR HSR APPROVAL
As promptly as practicable after the date of this Agreement, Buyer
will make all filings, and thereafter make any other required submissions, with
respect to this Agreement, required to be made by Buyer under the HSR Act and
any related governmental request thereunder. Seller shall cooperate with Buyer
in the preparation of such filing and furnish to Buyer any information about
Seller required for Buyer to complete such filings.
4.2 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Section 7, Seller will not, and will prevent any director, officer, employee,
agent, consultant, advisor, or other representative of Seller, including legal
counsel, accountants, and financial advisors ("REPRESENTATIVES"), directly or
indirectly, from soliciting, initiating, or encouraging any inquiries or
proposals from, discussing or negotiating with, providing any non-public
information to, or considering the merits of any unsolicited inquiries or
proposals from, any
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Person (other than Buyer) relating to any transaction involving the sale of the
business or assets of the Company, or any of the capital stock of the Company,
or any merger, consolidation, business combination, or similar transaction
involving the Company.
4.3 FURTHER ASSURANCES
(a) Subject to the terms and conditions herein, each of the parties
hereto agrees to use its or his reasonable best efforts to take, or cause
to be taken, all appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Buyer and Seller shall take all such
necessary action.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
5.1 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to Section 1.3
must have been delivered, and each of the other covenants and obligations
in Section 4 must have been performed and complied with in all material
respects.
5.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
5.3 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, the Shares or (b) is
entitled to all or any portion of the Purchase Consideration payable to Seller
for the Shares.
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5.4 NO PROHIBITION
Neither the consummation nor the performance of any or all of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
governmental body.
5.5 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
6.1 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 1.3 and must have transferred the
Purchase Consideration pursuant to Section 1.3(b)(i).
6.2 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
6.3 HSR ACT
Any applicable waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
7. TERMINATION
7.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
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(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has
not been waived;
(b) by Buyer if any of the conditions in Section 5 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section 6 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with their obligations under this
Agreement) and Seller have not waived such condition on or before the
Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement
to comply fully with its or his obligations under this Agreement) on or
before February 28, 2000, or such later date as the parties may agree upon.
7.2 EFFECT OF TERMINATION
Each party's right of termination under Section 7.1 is in addition to
any other rights it or he may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 7.1, all further obligations of the
parties under this Agreement will terminate, except that the obligations in
Section 8.1 will survive; PROVIDED, HOWEVER, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its or his obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such termination
unimpaired.
8. GENERAL PROVISIONS
8.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party
to this Agreement will bear its or his respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
8.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer
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determines. Unless consented to by Buyer in advance or required by law, prior to
the Closing, Seller shall keep this Agreement strictly confidential and may not
make any disclosure of this Agreement to any Person.
8.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Seller:
Jim Armstrong
c/o idealab! Capital Partners
130 West Union Street
Pasadena, California 91103
Facsimile No.: (626) 535-2703
Buyer:
Bill Gross' idealab!
130 West Union Street
Pasadena, California 91103
Attention: General Counsel
Facsimile No.: (626) 535-2703
with a copy to:
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Attention: David M. Hernand, Esq.
Facsimile No.: (213) 891-8763
8.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue
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laid therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
8.5 WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
8.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its or his rights under this Agreement
without the prior consent of the other parties, which will not be unreasonably
withheld, except that Buyer may assign any of its rights under this Agreement to
any subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
8.8 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
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8.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.10 GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
8.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Buyer: BILL GROSS' IDEALAB!
By: /s/ Bill Gross
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Name: Bill Gross
Title: Chairman of the Board and
President
Seller: JIM ARMSTRONG
/s/ Jim Armstrong
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CONSENT OF SPOUSE
I, Kamela Peden Armstrong, spouse of Jim Armstrong, have read and
-----------------------
approve the foregoing Agreement. In consideration of granting of the right to my
spouse to receive the Purchase Consideration as set forth in the Agreement, I
hereby appoint my spouse as my attorney-in-fact in respect to the exercise of
any rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws of the State of
California or similar laws relating to marital property in effect in the state
of our residence as of the date of the signing of the foregoing Agreement.
Dated: December 23, 1999
/s/ Kamela Peden Armstrong
-----------------------------
(Signature of Spouse)
