-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WdC8vN8/ZDHRfb6CZE/UeaNu/Mm7uHW4dc43xhuBTLqpVZXQk/Gpf/PSFQJapEzE nw3OlqwhKxovK5dolg/A0A== 0001092388-00-000006.txt : 20000202 0001092388-00-000006.hdr.sgml : 20000202 ACCESSION NUMBER: 0001092388-00-000006 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000120 GROUP MEMBERS: BILL GROSS IDEALAB INC GROUP MEMBERS: IDEALAB! HOLDINGS, L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GOTO COM INC CENTRAL INDEX KEY: 0001060439 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 954652060 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-56987 FILM NUMBER: 510436 BUSINESS ADDRESS: STREET 1: 14 W UNION STREET CITY: PASADENA STATE: CA ZIP: 91103 BUSINESS PHONE: 6265856900 MAIL ADDRESS: STREET 1: 14 W UNION STREET CITY: PASADENA STATE: CA ZIP: 91103 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BILL GROSS IDEALAB INC CENTRAL INDEX KEY: 0001045647 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954569774 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 130 W UNION STREET CITY: PASADENA STATE: CA ZIP: 91103 BUSINESS PHONE: 6265856900 MAIL ADDRESS: STREET 1: 130 W UNION ST CITY: PASADENA STATE: CA ZIP: 91103 SC 13D/A 1 SCHEDULE 13D, AMENDMENT #1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (AMENDMENT NO. 1) UNDER THE SECURITIES EXCHANGE ACT OF 1934 GOTO.COM, INC. ----------------------------------------------------------------- (Name of Issuer) Common Stock, $0.0001 par value per share ----------------------------------------------------------------- (Title of Class of Securities) 38348T107 ----------------------------------------------------------------- (CUSIP Number) Todd Tappin Chief Financial Officer GoTo.Com, Inc. 140 West Union Street Pasadena, California 91103 (626) 685-5600 ----------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 17, 2000 ------------------------------------------------------------------ (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
SCHEDULE 13D - ----------------------------------------------- ---------------------------------------------- CUSIP NO. 38348T107 PAGE 2 OF 10 - ----------------------------------------------- ---------------------------------------------- - -------- ----------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON BILL GROSS' IDEALAB! TAX I.D. NO. 95-4569774 - -------- ----------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / - -------- ----------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------- ----------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------- ----------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------- ----------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION CALIFORNIA - ------------------------ ------ ------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES 4,174,449 SHARES BENEFICIALLY OWNED BY EACH ------ ------------------------------------------------------------------------------------ REPORTING 8 SHARED VOTING POWER PERSON WITH 0 ------ ------------------------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 4,174,449 SHARES ------ ------------------------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - -------- ----------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,174,449 SHARES - -------- ----------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - -------- ----------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% - -------- ----------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------- -----------------------------------------------------------------------------------------------------------
SCHEDULE 13D
- ----------------------------------------------- ---------------------------------------------- CUSIP NO. 38348T107 PAGE 3 OF 10 - ----------------------------------------------- ---------------------------------------------- - -------- ----------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON IDEALAB! HOLDINGS, L.L.C. TAX I.D. NO. 95-4729649 - -------- ----------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / - -------- ----------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------- ----------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------- ----------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / - -------- ----------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------ ------ ------------------------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 9,192,882 SHARES OWNED BY EACH REPORTING ------ ------------------------------------------------------------------------------------ PERSON WITH 8 SHARED VOTING POWER 0 ------ ------------------------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 9,192,882 SHARES ------ ------------------------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - -------- ----------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,192,882 SHARES - -------- ----------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - -------- ----------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.2% - -------- ----------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------- -----------------------------------------------------------------------------------------------------------
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!, 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 4,074,449 shares of Common Stock from eight stockholders of the Company in exchange for an aggregate consideration of $332,255,920 in cash. On January 17, 2000, Idealab Co. entered in an agreement to purchase 100,000 shares of Common Stock from idealab! Capital Partners I-B, L.P., a Delaware limited partnership, for $8,000,000 in cash. Upon consummation of such stock purchases contemplated in the stock purchase agreements, Idealab Co. will own approximately 9.2% of the total shares of Common Stock outstanding (which excludes the shares of Common Stock held directly and beneficially by Idealab Holdings and which is based on 45,532,469 shares of Common Stock outstanding Page 5 of 10 on September 30, 1999). Consummation of such purchases of shares 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 Exhibits 2-10 (the "Stock Purchase Agreements") and incorporated by reference herein. The source of the cash consideration to be paid in the 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 20.2% 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 4,174,449 additional shares of Common Stock, which constitute approximately 9.2% 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 13,367,331 shares of Common Stock, which constitute approximately 29.4% of the 45,532,469 outstanding shares of Common Stock as of September 30, 1999. As of January 17, 2000, certain executive officers and directors of the Reporting Persons owned an aggregate of approximately 439,731 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 13,367,331 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. Page 6 of 10 (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 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. Exhibit 10. Stock Purchase Agreement, dated as of January 17, 2000, by and between Bill Gross' idealab! and idealab! Capital Partners I-B, L.P. * Previously filed on Schedule 13D, dated December 23, 1999. 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 20, 2000 BILL GROSS' IDEALAB! By: /s/ Bill Gross ------------------------- Name: Bill Gross Title: Chairman of the Board and President Dated: January 20, 2000 IDEALAB! HOLDINGS, L.L.C. By: /s/ Bill Gross ------------------------- Name: Bill Gross Title: Managing Member 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! is set forth below. Unless otherwise indicated below, the business address of each director and executive officer is Bill Gross' idealab!, 130 West Union Street, Pasadena, California 91103.
PRINCIPAL OCCUPATION, IF OTHER THAN AS NAME AND BUSINESS POSITION WITH BILL GROSS' EXECUTIVE OFFICER OF BILL GROSS' ADDRESS IDEALAB! IDEALAB! ----------------------------------- ---------------------------------- ---------------------------------------- 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 Fiancial Officer Douglas McPherson Vice-President and General Counsel
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.
PRINCIPAL OCCUPATION, IF OTHER THAN AS NAME AND BUSINESS POSITION WITH IDEALAB! HOLDINGS, EXECUTIVE OFFICER OF IDEALAB! ADDRESS L.L.C. HOLDINGS, L.L.C. ----------------------------------- ---------------------------------- ---------------------------------------- Bill Gross' idealab! Member Bill Gross Managing Member
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 10. Stock Purchase Agreement, dated as of January 17, 2000, by and between Bill Gross' idealab! and idealab! Capital Partners I-B, L.P. * Previously filed on Schedule 13D, dated December 23, 1999. EX-99.10 2 EXHIBIT 99.10 EXHIBIT 10 STOCK PURCHASE AGREEMENT This Stock Purchase Agreement ("AGREEMENT") is made as of January 17, 2000 between Bill Gross' idealab!, a California corporation ("BUYER"), and idealab! Capital Partners I-B, L.P., a Delaware limited partnership ("SELLER"). RECITALS Seller desires to sell, and Buyer desires to purchase, 100,000 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 $8,000,000 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, concurrent with the closing of those certain Stock Purchase Agreements between (a) Buyer and Moore Global Investments, Ltd., Multi-Strategies Fund Ltd., Remington Investments Strategies, L.P., and Multi-Strategies Fund L.P., (b) Buyer and Kline Hawkes California SBIC, (c) Buyer and Bob Kavner, (d) Buyer and Oliver A. McBryan, (e) Buyer and William S. Elkus, (f) Buyer and Bruce Hendricks, (g) Buyer and Howard L. Morgan, and (h) Buyer and Jim Armstrong, all dated as of December 23, 1999, 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: 1 (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) $8,000,000 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 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. 2.2 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 2 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 ("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"). 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 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 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. 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. 4 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 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 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. Notwithstanding the foregoing, nothing in this Section 4.1 shall in any way prevent or prohibit any agent or representative of Seller from taking any action to fulfill his fiduciary duties as a director of the Company. 4.2 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): 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 5 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. 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 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. 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 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. 7 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: idealab! Capital Partners I-B, L.P. 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 8 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 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 9 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. 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] 10 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: IDEALAB! CAPITAL PARTNERS I-B, L.P. By: /s/ William S. Elkus ---------------------------- Name: William S. Elkus Title: Senior Managing Director -----END PRIVACY-ENHANCED MESSAGE-----