-----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, SwsNpeU8Y5+vgeAlusvsxEWsZ7jRe6wRb9Semj4EsnObXArW7+wqRRQqgO0/PwTu tMBoJsb3kJ78QM8cpM58VA== 0000892569-01-501138.txt : 20020411 0000892569-01-501138.hdr.sgml : 20020411 ACCESSION NUMBER: 0000892569-01-501138 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20011120 GROUP MEMBERS: FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HOMESEEKERS COM INC CENTRAL INDEX KEY: 0000938578 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 870397464 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-55337 FILM NUMBER: 1796665 BUSINESS ADDRESS: STREET 1: 6490 SOUTH MCCARRAN BLVD STREET 2: SUITE 28 CITY: RENO STATE: NV ZIP: 89509 BUSINESS PHONE: 7758276886 MAIL ADDRESS: STREET 1: 6490 SOUTH MCCARRAN BLVD STREET 2: SUITE 28 CITY: RENO STATE: NV ZIP: 89509 FORMER COMPANY: FORMER CONFORMED NAME: NDS SOFTWARE INC DATE OF NAME CHANGE: 19970107 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY NATIONAL FINANCIAL INC /DE/ CENTRAL INDEX KEY: 0000809398 STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361] IRS NUMBER: 860498599 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 17911 VON KARMAN AVE STREET 2: STE 300 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9496225000 MAIL ADDRESS: STREET 1: MLISS JONES KANE STREET 2: 17911 VON KARMAN AVE STE 300 CITY: IRVINE STATE: CA ZIP: 92614 SC 13D 1 a77365sc13d.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 HOMESEEKERS.COM, INC. (Name of Issuer) COMMON STOCK, $0.001 PAR VALUE (Title of Class of Securities) 437605108 (CUSIP Number)
PETER T. SADOWSKI, ESQ. NEIL A. JOHNSON EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL CHIEF FINANCIAL OFFICER FIDELITY NATIONAL FINANCIAL, INC. FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. 17911 VON KARMAN AVENUE, SUITE 300 4050 CALLE REAL IRVINE, CALIFORNIA 92614 SANTA BARBARA, CALIFORNIA 93110 (949) 622-5000 (805) 696-7000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) COPIES TO: C. CRAIG CARLSON, ESQ. STRADLING YOCCA CARLSON & RAUTH 660 NEWPORT CENTER DRIVE, SUITE, 1600 NEWPORT BEACH, CA 92660 TELEPHONE: (949) 725-4000 NOVEMBER 5, 2001 (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 that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), Section 240.13d-1(f) or Section 240.13d-1(g), check the following box [ ]. SCHEDULE 13D - --------------------------------- ------------------------------ CUSIP NO. 437605108 PAGE 2 OF 6 PAGES - --------------------------------- ------------------------------ ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Fidelity National Financial, Inc. 86-0498599 Fidelity National Information Solutions, Inc. 41-1293754 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) 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 Fidelity National Financial, Inc.: Delaware Fidelity National Information Solutions, Inc.: Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES Fidelity National Financial, Inc.: BENEFICIALLY 12,238,641 (See Item 5) OWNED BY ------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------- 9 SOLE DISPOSITIVE POWER Fidelity National Financial, Inc.: 12,238,641 (See Item 5) ------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Fidelity National Financial, Inc.: 12,238,641 (See Item 5 for calculation) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Twenty-five percent (25%) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) CO ================================================================================ 2 ITEM 1. SECURITY AND ISSUER. The class of equity securities to which this statement on Schedule 13D relates is the Common Stock, par value $0.001 per share (the "Common Stock"), of HomeSeekers.com, Inc., a Nevada corporation (the "Company"), with its principal executive offices located at 6490 South McCarran, Suite D-30, Reno, Nevada 89509. ITEM 2. IDENTITY AND BACKGROUND. This Statement is being filed on behalf of Fidelity National Financial, Inc., a Delaware corporation ("Fidelity"), and Fidelity National Information Solutions, Inc., a Delaware corporation and a majority-owned subsidiary of Fidelity and a Delaware corporation ("FNIS"). The principal executive offices of Fidelity are located at 17911 Von Karman Avenue, Suite 300, Irvine, California 92614. Fidelity is a holding company whose subsidiaries are engaged in the business of issuing title insurance policies and performing other title- and real estate-related services. The principal executive offices of FNIS are located at 4050 Calle Real, Santa Barbara, California, 93110. FNIS is a company engaged principally in providing real estate-related informational services. Information regarding the directors and executive officers of Fidelity and FNIS is set forth on Schedule I attached hereto, which schedule is hereby incorporated by reference. During the last five years, neither Fidelity nor, to the best knowledge of Fidelity, any person named in Schedule I attached hereto has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administration 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. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. On October 25, 2001, Fidelity agreed to loan the Company up to Four Million Dollars ($4,000,000). In return, Fidelity accepted (i) a convertible revolving promissory note (the "Note") and (ii) a stock purchase warrant (the "Warrant"). The aggregate potential equity represented in the Note and the Warrant is 25% of the Company's outstanding Common Stock. To the extent the Note is not converted to a number of shares of common Stock representing a 25% equity stake in the Company, the Warrant is exercisable to bring Fidelity's beneficial ownership to as much as 25% of the outstanding shares of Common Stock. Both the Note and the Warrant are filed as exhibits hereto. The descriptions of the Note and Warrant contained herein are not intended to be complete are qualified in their entirety by reference to their full texts. ITEM 4. PURPOSE OF TRANSACTION. The purpose of the Fidelity loan to the Company is to enable the Company to pay off existing debt so as to release lenders' liens on certain assets being purchased by FNIS, as described below. As an inducement to make the loan, Fidelity agreed to accept equity in the Company in the form of the Note and Warrant described in Item 3 above. 3 FNIS and the Company have entered into an agreement (the "Asset Purchase Agreement") whereby FNIS will purchase certain assets of the Company, such assets amounting to an estimated twenty percent (20%) of the Company's total assets. FNIS and the Company also entered into an agreement (the "Management Agreement") pursuant to which FNIS will provide management services to the Company until the earlier to occur between the close or the termination of the Asset Purchase Agreement. The Asset Purchase Agreement and the Management Agreement are filed as exhibits hereto. The descriptions of the Asset Purchase Agreement and the Management Agreement contained herein are not intended to be complete are qualified in their entirety by reference to their full texts. Except as set forth in this Item 4, Fidelity has no plans or proposals that relate to or would result in any of the matters set forth in clauses (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. As a result of the issuance to Fidelity of the Note and the Warrant, Fidelity has a currently exercisable right to purchase up to approximately 12,238,641 shares, or the equivalent 25% of the outstanding shares of the Company's common stock, calculated by applying Fidelity's right to acquire 25% of the Company's outstanding shares to the total of 48,954,561 as reported to the Securities and Exchange Commission in the Company's 10-K for the year ended June 30, 2001. While the actual number of shares issuable to Fidelity is likely to be greater than 12,238,641 because of the dilutive effect of exercising the Note and Warrant, because the Warrant is convertible for a number of Company shares that cannot be determined at this time Fidelity determined that reporting some estimate of such greater number of shares would be misleading. Fidelity has the sole right to receive or the power to direct the receipt of dividends from, or proceeds from the sale of, the shares of the Company's Common Stock issuable upon the exercise of the Note and the Warrant. FNIS has no rights to receive or control disposition of any of the shares of Common Stock discussed in this Statement. Except for the transactions set forth above, neither Fidelity nor FNIS has effected any transaction in HomeSeekers.com Common Stock during the past sixty (60) days. Except as described above, neither Fidelity, FNIS, nor, to the best knowledge of Fidelity and FNIS, any of the persons referred to in Schedule I attached hereto, beneficially own any shares of HomeSeekers.com, Inc. Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Fidelity and the Company entered into a Credit Agreement, pursuant to which Fidelity agreed to loan the Company up to Four Million Dollars ($4,000,000) for the purpose of repaying or canceling loan debt. The Company issued to Fidelity the Note and the Warrant. Fidelity and the Company also executed a security agreement securing the Company's obligations to Fidelity. FNIS and the Company entered into the aforementioned Asset Purchase Agreement and Management Agreement. 4 Except as described herein, neither Fidelity, FNIS, nor any other person referred to in Schedule I attached hereto, has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities HomeSeekers.com, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees or profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 99.1 Credit Agreement, dated October 25, 2001 99.2 Convertible Revolving Promissory Note, dated November 5, 2001 99.3 Purchase Warrant, dated November 5, 2001 99.4 Security Agreement, dated October 25, 2001 99.5 Asset Purchase Agreement, dated October 25, 2001; 99.6 Management Agreement, dated October 25, 2001; 5 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: November 15, 2001 FIDELITY NATIONAL FINANCIAL, INC. By: /s/ Marlan Walker Executive Vice President Date: November 15, 2001 FIDELITY NATIONAL INFORMATION SOLUTIONS, INC. By: /s/ Neil Johnson Chief Financial Officer 6 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSON The names, present principal occupations and business addresses of the directors and executive officers of the Reporting Person are set forth below. If no address is given, the director's or executive officer's business address is that of the Reporting Person. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to the Reporting Person. Each of the named individuals is a citizen of the United States. Directors and Officers of Fidelity: - ---------------------------------- William P. Foley, II Chairman of the Board and Chief Executive Officer Frank P. Willey Vice Chairman of the Board John J. Burns, Jr. Director John F. Farrell, Jr. Director Philip G. Heasley Director William A. Imparato Director Donald M. Koll Director Daniel D. (Ron) Lane Director General William Lyon Director J. Thomas Talbot Director Cary H. Thompson Director Richard P. Toft Director Patrick F. Stone President and Chief Operating Officer Alan L. Stinson Executive Vice President, Chief Financial Officer Peter T. Sadowski Executive Vice President, General Counsel Directors and Officers of FNIS: - ------------------------------ William P. Foley, II Chairman of the Board and Chief Executive Officer Willie D. Davis Director Richard J. Freeman Director Earl Gallegos Director Bradley Inman Director Patrick F. Stone Director Cary H. Thompson Director Eric D. Swenson President Neil A. Johnson Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Credit Agreement, dated October 25, 2001 99.2 Convertible Revolving Promissory Note, dated November 5, 2001 99.3 Purchase Warrant, dated November 5, 2001 99.4 Security Agreement, dated October 25, 2001 99.5 Asset Purchase Agreement, dated October 25, 2001; 99.6 Management Agreement, dated October 25, 2001; EX-99.1 3 a77365ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 EXECUTION COPY REVOLVING CREDIT AGREEMENT This REVOLVING CREDIT AGREEMENT (this "Agreement") is entered into as of the 25th day of October, 2001, by FIDELITY NATIONAL FINANCIAL, INC., a Delaware corporation (the "Lender") and HOMESEEKERS.COM, INCORPORATED, a Nevada corporation ("Borrower"). RECITALS WHEREAS, Borrower and E-Home.com, Inc. d/b/a Homemark ("Homemark") entered into a Securities Purchase Agreement dated as of June 6, 2001 (the "Homemark Securities Purchase Agreement"), wherein Homemark agreed, among other things, to lend and Borrower agreed to borrow up to $2,000,000; WHEREAS, pursuant to the Homemark Securities Purchase Agreement, Borrower and Homemark entered into a Loan Agreement dated as of June 6, 2001 (the "Homemark Loan Agreement"), wherein Homemark agreed to lend and Borrower agreed to borrow $1,000,000 ("Original Loan Amount"); WHEREAS, pursuant to the Homemark Loan Agreement, Borrower and Homemark entered into a Security Agreement and Financing Statement dated as of June 6, 2001 (the "Homemark Security Agreement"), wherein Homemark granted to Lender security interests in certain of its assets, as further provided in the Homemark Security Agreement; WHEREAS, pursuant to the Homemark Loan Agreement, Homemark loaned to Borrower $500,000, evidenced by a promissory note dated June 6, 2001 (the "First Homemark Loan"); WHEREAS, on or around June 19, 2001, pursuant to the Homemark Loan Agreement, Homemark loaned to Borrower an additional $500,000 (the "Second Homemark Loan"); WHEREAS, since June 19, 2001, Homemark has made additional loans to Borrower in the approximately aggregate amount of $1,000,000 (collectively with the First Homemark Loan and the Second Homemark Loan, the "Homemark Loans"); WHEREAS, to fund a payroll amount due and payable on October 23, 2001, Lender loaned to Borrower $400,000 as evidenced by a Secured Promissory Note dated October 23, 2001 (the "Payroll Loan"); WHEREAS, Fidelity National Information Solutions, Inc., a Delaware corporation and an affiliate of Lender, ("FNIS") has entered into an asset purchase agreement of even date herewith (the "FNIS Agreement") contemplating the purchase by FNIS of certain of Borrower's assets, pursuant to which FNIS has paid to Borrower $1,000,000 as a deposit to be applied against the purchase price for the assets; WHEREAS; as a condition to entering into this Agreement, Lender has required, and Borrower has agreed, that in the event the transactions contemplated under the FNIS Agreement are not consummated, Lender, to preserve its security interest in Borrower's assets, may repay that amount directly to FNIS and deem such amount a Revolving Advance (as defined in the Convertible Revolving Promissory Note (the "Note"), the form of which attached as Exhibit A), WHEREAS, the Borrower has requested that the Lender make available Revolving Advances, in an aggregate principal amount not to exceed $3,000,000 at any time outstanding, to allow the Borrower to pay off and cancel the Homemark Loans, the Payroll Loan, to fund ongoing operations, and, if necessary in Lender's sole discretion, to repay the deposit made by FNIS (the "FNIS Deposit") pursuant to the FNIS Agreement (in which case the aggregate principal amount shall not exceed $4,000,000); WHEREAS; as a condition to entering into this Agreement, Lender has required, and Borrower has agreed, to enter into the Security Agreement of even date herewith between Borrower and Lender (the "Security Agreement"), the form of which is attached as Exhibit B; WHEREAS; as a condition to entering into this Agreement, Lender has required, and Borrower has agreed, to enter into the Registration Rights Agreement of even date herewith between Borrower and Lender (the "Registration Rights Agreement"), the form of which is attached as Exhibit C; WHEREAS; as a condition to entering into this Agreement, Lender has required, and Borrower has agreed, for certain of Borrower's creditors to enter into a Subordination Agreement of even date herewith (the "Subordination Agreement"), the form of which is attached as Exhibit D; WHEREAS, as additional consideration for making the Revolving Advances, Lender has required Borrower to issue, and Borrower has agreed, to issue a warrant to purchase shares of common stock of Borrower in an amount that, taking into consideration the election by Lender, if any, to convert the Note, would result in Lender owning 20% of the fully diluted outstanding common stock of Borrower (the "Warrant"), the form of which is attached as Exhibit E; and WHEREAS, the Lender is willing to make such Revolving Advances available upon and subject to the terms and conditions hereinafter set forth. AGREEMENT In consideration of the promises and of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms have the following meanings: "Affiliate" means, with respect to any Person, a relative, partner, shareholder, director, officer or employee of such Person, or any parent or subsidiary of such Person, or any Person controlling, controlled by or under common control with such Person. "Agreement" shall have the meaning set forth in the introduction to the Agreement. -2- "Audit" means to inspect, audit and copy Borrower's books and records and the Collateral. "Borrower" has the meaning set forth in the introduction to this Agreement. "Borrower's Account" shall have the meaning set forth in Section 2.7 of this Agreement. "Borrower Recommendation" shall have the meaning set forth in Section 6.14 of this Agreement. "Borrower Shareholder Approval" shall have the meaning set forth in Section 6.13 of this Agreement. "Borrower Shareholder's Meeting" shall have the meaning set forth in Section 6.13 of this Agreement. "Business Day" means a day on which Lender is open for business. "Change of Control" shall be deemed to have occurred at such time as a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) (other than the current holders of the ownership interests in any Borrower) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, as a result of any single transaction of more than fifty percent (50%) of the total voting power of all classes of stock or other ownership interests then outstanding of any Borrower normally entitled to vote in the election of directors or analogous governing body. "Closing Date" shall mean the date of the initial funding under this Agreement. "Code" means the Uniform Commercial Code as adopted and in effect in the State of California from time to time. "Collateral" shall have the meaning set forth in the Security Agreement. "Copyrights" shall mean, collectively, (a) all copyrights, copyright registrations and applications for copyright registrations, (b) all renewals and extensions of all copyrights, copyright registrations and applications for copyright registration and (c) all rights, now existing or hereafter coming into existence, (i) to all income, royalties, damages and other payments (including in respect of all past, present or future infringements) now or hereafter due or payable under or with respect to any of the foregoing, (ii) to sue for all past, present and future infringements with respect to any of the foregoing and (iii) otherwise accruing under or pertaining to any of the foregoing throughout the world. "Default" means any event which with notice or passage of time or both would constitute an Event of Default. "Default Rate" shall have the meaning set forth in Section 3.1 of this Agreement. -3- "Event of Default" means any of the events set forth in Section 10.1 of this Agreement. "First Homemark Loan" shall have the meaning set forth in the recitals to this Agreement. "FNIS" shall have the meaning set forth in the recitals to this Agreement. "FNIS Agreement" shall have the meaning set forth in the recitals to this Agreement. "FNIS Deposit" shall have the meaning set forth in the recitals to this Agreement. "GAAP" means generally accepted accounting principles as in effect from time to time in the United States, consistently applied. "HMI" shall have the meaning set forth in Section 5.11 of this Agreement. "Homemark" shall have the meaning set forth in the recitals to this Agreement. "Homemark Loan Agreement" shall have the meaning set forth in the recitals to this Agreement. "Homemark Loans" shall have the meaning set forth in the recitals to this Agreement. "Homemark Parties" shall have the meaning set forth in Section 5.11 of this Agreement. "Homemark Securities Purchase Agreement" shall have the meaning set forth in the recitals to this Agreement. "Homemark Security Agreement" shall have the meaning set forth in the recitals to this Agreement. "Indemnified Liabilities" shall have the meaning set forth in Section 10.4 of this Agreement. "Intellectual Property" shall mean all Copyrights, all Patents and all Marks, together with (a) all inventions, processes, production methods, proprietary information, know-how and trade secrets; (b) all licenses or user or other agreements granted to the Borrower with respect to any of the foregoing, in each case whether now or hereafter owned or used, including the licenses or other agreements with respect to the Copyrights, Patents or Marks listed in Section 6.12(a) of the schedules; (c) all information, customer lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, engineering reports, test reports, manuals, materials standards, processing standards, performance standards, catalogs, computer and automatic machinery software and programs; (d) all field repair data, sales data and other information relating to sales or service of products now or hereafter manufactured; (e) all accounting information and all media in which or on -4- which any information or knowledge or data or records may be recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data; (f) the approvals of any governmental person now held or hereafter obtained by the Borrower in respect of any of the foregoing; and (g) all causes of action, claims and warranties now owned or hereafter acquired by the Borrower in respect of any of the foregoing. It is understood that Intellectual Property shall include all of the foregoing owned or acquired by the Borrower on a worldwide basis. "Interest Rate" shall have the meaning set forth in Section 3.1 of this Agreement. "Lender" shall have the meaning set forth in the introduction to this Agreement. "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including, without limitation, any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction. "Loan Documents" means this Agreement, the agreements and documents listed in Section 5.10, and any other agreement, instrument or document executed in connection herewith or therewith. "Marks" shall have the meaning set forth in the Security Agreement. "Material Adverse Effect" means a material adverse effect on (i) the business, assets, condition (financial or otherwise) or results of operations of Borrower or any subsidiary of Borrower (which for those purposes shall include any entity in which Borrower possesses 80% or more of the ownership or voting interests) or any guarantor of any of the Obligations, (ii) the ability of borrower or any guarantor of any of the Obligations to perform its obligations under this Agreement (including, without limitation, repayment of the Obligations as they come due) or (iii) the validity or enforceability of this Agreement or any other agreement or document entered into by any party in connection herewith, or the rights or remedies of Lender hereunder or thereunder. "Maturity Date" shall have the meaning set forth in the Note. "Maximum Revolving Advance Amount" shall have the meaning set forth in Section 2.1 of this Agreement. "Note" shall have the meaning set forth in the recitals to this Agreement. "Obligations" means all present and future Revolving Advances, loans, advances, debts, liabilities, obligations, guaranties, covenants, duties and indebtedness at any time owing by Borrower to Lender, whether evidenced by this Agreement or any note or other instrument or document, whether arising from an extension of credit, opening of a letter of credit banker's acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including, without limitation, those acquired by assignment and any participation by Lender in Borrower's -5- debts owing to others), absolute or contingent, due or to become due, including without limitation, all interest, charges, expenses, fees, attorneys' fees (including attorneys' fees and expenses incurred in bankruptcy), expert witness fees, audit fees letter of credit fees, collateral monitoring fees, closing fees, facility fees, termination fees, minimum interest charges and any other sums chargeable to Borrower under this Agreement or under any other present or future instrument or agreement between Borrower and Lender. "Original Loan Amount" shall have the meaning set forth in the recitals to this Agreement. "Patent" shall have the meaning set forth in the Security Agreement. "Payment Office" means Lender's chief executive offices located at 4050 Calle Real, Santa Barbara, California 93110, or such other office as Lender designates. "Payroll Loan" shall have the meaning set forth in the recitals to this Agreement. "Person" means any individual, sole proprietorship, general partnership, limited partnership, limited liability partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, government, or any agency or political divisions thereof, or any other entity. "Proxy Statement" shall have the meaning set forth in Section 6.16 of this Agreement. "Registration Rights Agreement" shall have the meaning set forth in the recitals to this Agreement. "Revolving Advance" shall have the meaning set forth in Section 2.1 of this Agreement. "Second Homemark Loan" shall have the meaning set forth in the recitals to this Agreement. "Security Agreement" shall have the meaning set forth in the recitals to this Agreement. "Solvent" means with respect to any person on a particular date, that on such date (a) at fair valuations, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair salable value of the properties and assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its properties and assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts beyond such Person's ability to pay as such debts mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that reasonably can be expected to become an actual or matured liability. -6- 2. REVOLVING ADVANCES, PAYMENTS. 2.1 Revolving Advances. Subject to the terms and conditions set forth in this Agreement, the Lender will make advances to the Borrower (each a "Revolving Advance") in an aggregate principal amount for all such Revolving Advances outstanding at any time not to exceed $3,000,000 (the "Maximum Revolving Advance Amount"); provided that the Maximum Revolving Advance Amount may be increased to $4,000,000 if Lender, in its sole and absolute discretion, is required to reimburse to FNIS the FNIS Deposit. 2.2 Procedure for Borrowing Revolving Advances. The Borrower may notify the Lender prior to 3:00 p.m. (California time) one Business Day in advance of the requested date of the Revolving Advance of Borrower's request to incur, on such day, a Revolving Advance hereunder. A form of request for Revolving Advance is attached to the Note. Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with the Lender, or with respect to any other Obligation, including, but not limited to, reimbursement of the FNIS Deposit in the event the transactions contemplated by the FNIS Agreement are not consummated, become due, same shall be deemed a request for a Revolving Advance as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation under this Agreement or any other agreement with the Lender, or to reimburse in full to FNIS the FNIS Deposit, and such request shall be irrevocable. 2.3 Disbursement of Revolving Advance Proceeds. All Revolving Advances shall be disbursed from whichever office or other place the Lender may designate from time to time and, together with any and all other Obligations of the Borrower to the Lender, shall be charged to Borrowers' Account on the Lender's books. Prior to the Maturity Date, the Borrower may use the Revolving Advances by borrowing, prepaying and reborrowing, all in accordance with the terms and conditions hereof. The proceeds of each Revolving Advance requested by the Borrower or deemed to have been requested by the Borrower under Section 2.2 hereof shall, with respect to requested Revolving Advances to the extent the Lender makes such Revolving Advances, be made available to the Borrower on the day so requested by way of credit to the Borrower's operating account with the Lender, in immediately available funds or, with respect to Revolving Advances deemed to have been requested by the Borrower, be disbursed by or to the Lender to be applied to the outstanding Obligations giving rise to such deemed request. 2.4 Maximum Revolving Advances. The aggregate balance of Revolving Advances outstanding at any time shall not exceed the Maximum Revolving Advance Amount. 2.5 Repayment of Revolving Advances. i. The Revolving Advances shall be due and payable in full on the Maturity Date subject to earlier prepayment as herein provided. ii. All payments of principal, interest and other amounts payable hereunder, or under any of the Loan Documents shall be made to the Lender at the Payment Office not later than 1:00 P.M. (California time) on the due date therefor in lawful money of the United States of America in funds immediately available to the Lender. The -7- Lender shall have the right to effectuate payment on any and all Obligations due and owing hereunder by charging Borrower's Account or by making Revolving Advances as provided in Section 2.2 hereof. iii. The Borrower shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including, but not limited to, any deduction for any setoff or counterclaim. 2.6 Repayment of Excess Revolving Advances. The aggregate balance of Revolving Advances outstanding at any time in excess of the maximum amount of Revolving Advances permitted hereunder shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or Event of Default has occurred. 2.7 Statement of Account. The Lender shall maintain, in accordance with its customary procedures, a loan account ("Borrower's Account") in the name of the Borrower and in the form attached as Schedule A to the Note, in which shall be recorded the date and amount of each Revolving Advance made by the Lender and the date and amount of each payment in respect thereof; provided, however, the failure by the Lender to record the date and amount of any Revolving Advance shall not adversely affect the Lender. Each fiscal quarter, the Lender shall send to the Borrower a statement showing the accounting for the Revolving Advances made, payments made or credited in respect thereof, and other transactions between the Lender and the Borrower during such quarter. The quarterly statements shall be deemed correct and binding upon the Borrower in the absence of manifest error and shall constitute an account stated between the Lender and the Borrower unless the Lender receives a written statement of the Borrower's specific exceptions thereto within thirty (30) days after such statement is received by the Borrower. The records of the Lender with respect to the loan account shall be conclusive evidence, absent manifest error, of the amounts of Revolving Advances and other charges thereto and of payments applicable thereto. 2.8 Additional Payments. Any sums expended by the Lender due to the Borrower's failure to perform or comply with its obligations under this Agreement or any other document may be charged to Borrower's Account as a Revolving Advance and added to the Obligations. 2.9 Manner of Payment. All payments (including prepayments) to be made by the Borrower on account of principal, interest and fees shall be made without set off or counterclaim and shall be made to the Lender at the Payment Office, in each case on or prior to 1:00 p.m., California time, in Dollars and in immediately available funds. 2.10 Use of Proceeds. The Borrower shall apply the proceeds of Revolving Advances to (i) to repay and cancel the Homemark Loans, (ii) to repay and cancel the Payroll Loan, (iii) if necessary in Lender's sole discretion, to repay the FNIS Deposit, and (iv) to provide for its working capital needs. In the event Borrower is requesting a Revolving Advance for the purpose of making payment to any Person, including but not limited to the purposes set forth in subsections (i), (ii), and (iii), above, Lender shall have the right to pay the Revolving Advance to such Person directly. -8- 3. INTEREST AND FEES. 3.1 Interest. Interest on Revolving Advances shall be payable in arrears on the Maturity Date. Interest charges shall be computed on the actual principal amount of Revolving Advances outstanding during the quarter at a rate per annum equal to the Prime Rate as published in the Wall Street Journal from time to time plus two percent (2%) (the "Interest Rate"). Whenever, subsequent to the date of this Agreement, the Prime Rate is increased or decreased, the Interest Rate shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Prime Rate during the time such change or changes remain in effect. Upon and after the occurrence of an Event of Default, and during the continuation thereof, the Obligations shall bear interest at the Interest Rate plus two percent (2%) per annum (the "Default Rate"). 3.2 Computation of Interest and Fees. Interest and fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed. If any payment to be made hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the Interest Rate during such extension. 3.3 Maximum Charges. In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under law. In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under law, such excess amount shall be first applied to any unpaid principal balance owed by the Borrower, and if the then remaining excess amount is greater than the previously unpaid principal balance, the Lender shall promptly refund such excess amount to the Borrower and the provisions hereof shall be deemed amended to provide for such permissible rate. 3.4 Increased Costs. In the event that any applicable law, treaty or governmental regulation, or any change therein or in the interpretation or application thereof, or compliance by the Lender with any request or directive (whether or not having the force of law) from any financial, monetary or other authority, shall: (a) subject the Lender to any tax of any kind whatsoever with respect to this Agreement or any Other Document or change the basis of taxation of payments to the Lender of principal, fees, interest or any other amount payable hereunder or under any Loan Document (except for changes in the rate of tax on the overall net income the Lender by the jurisdiction in which it maintains its principal office); or (b) impose, modify or hold applicable any reserve, special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by, any office of the Lender; and the result of any of the foregoing is to increase the cost to the Lender of making, renewing or maintaining its Revolving Advances hereunder by an amount that the Lender deems to be material or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Revolving Advances by an amount that the Lender deems to be material, -9- then, in any case the Borrower shall promptly pay the Lender, upon its demand, such additional amount as will compensate the Lender for such additional cost or such reduction, as the case may be. The Lender shall certify the amount of such additional cost or reduced amount to the Borrower, and such certification shall be conclusive absent manifest error. 4. APPLICATION OF REVOLVING ADVANCE TO REPAY FNIS DEPOSIT. Lender and Borrower acknowledge and agree that, at Lender's sole and absolute discretion, in the event FNIS determines not to proceed with the purchase of the MLS Contracts as contemplated by the Asset Purchase Agreement, Lender will repay the FNIS Deposit and apply such amount as a Revolving Advance. 5. CONDITIONS PRECEDENT. The obligation of Lender to make the Revolving Advances is subject to the satisfaction, in the sole discretion of Lender, at or prior to the first advance of funds hereunder, of each, every and all of the following conditions: 5.1 Status of Accounts at Closing. Borrower shall provide an accurate aged accounts payable statement. 5.2 Executed Agreement. Lender shall have received this Agreement duly executed and in form and substance satisfactory to Lender in its sole and absolute discretion. 5.3 Opinion of Borrower's Counsel. Lender shall have received an opinion of Borrower's counsel, in form and substance satisfactory to Lender in its sole and absolute discretion. 5.4 Priority of Lender's Lien. Lender shall have received the results of "of record" searches satisfactory to Lender in its sole and absolute discretion, reflecting its Uniform Commercial Code filings against Borrower indicating that Lender has a perfected, first priority lien in and upon all of the Collateral, subject only to Permitted Liens. 5.5 Insurance. Lender shall have received copies of the insurance binders or certificates evidencing Borrower's compliance with Section 8.2 hereof, including lender's loss payee endorsements. 5.6 Borrower's Existence. Lender shall have received copies of Borrower's articles or certificate of incorporation and all amendments thereto, and a Certificate of Good Standing, each certified by the Secretary of State of the state of Borrower's organization, and dated a recent date prior to the Closing Date, and Lender shall have received Certificates of Foreign Qualification for Borrower from the Secretary of State of each state wherein the failure to be so qualified could have a Material Adverse Effect. 5.7 Organizational Documents. Lender shall have received copies of Borrower's by-laws and all amendments thereto, and Lender shall have received copies of the resolutions of the board of directors of Borrower, authorizing the execution and delivery of this Agreement and the other documents contemplated hereby and authorizing the transactions contemplated hereunder and thereunder, and authorizing specific officers of Borrower to execute -10- the same on behalf of Borrower, in each case certified by the Secretary or other acceptable officer of Borrower as of the Closing Date. 5.8 Taxes. Lender shall have received evidence from Borrower that Borrower has complied with all tax withholding and Internal Revenue Service regulations, in form and substance satisfactory to Lender in its sole and absolute discretion. 5.9 Due Diligence. Lender shall have completed its due diligence with respect to Borrower. 5.10 Other Documents and Agreements. Lender shall have received such other agreements, instruments and documents as Lender may require in connection with the transactions contemplated hereby, all in form and substance satisfactory to Lender in Lender's sole and absolute discretion, and in form for filing in the appropriate filing office, including as are necessary to perfect and establish the priority of the liens granted by this Agreement, but not limited to: (i) Instruments or Certificates evidencing or representing the Revolving Advance, including the Note in the form attached as Exhibit A hereto; (ii) UCC-1 financing statements, fixture filings and termination; (iii) Security Agreement in the form attached as Exhibit B hereto; (iv) Registration Rights Agreement in the form attached as Exhibit C hereto; (v) Subordination Agreements in the form attached as Exhibit D hereto; and (vi) Warrant in the form attached as Exhibit F hereto; (vii) Disclosure Schedules pursuant to Article 6 of this Agreement. 5.11 Homemark Matters. Lender shall be satisfied, in its sole and absolute discretion, that the transactions contemplated by this Agreement, including the repayment of all obligations of Borrower to Homemark, HomeSeekers Management, Inc. ("HMI"), , or its Affiliates (collectively, the "Homemark Parties") the FNIS Agreement, or any other transaction between Lender and Borrower shall not be prohibited, challenged, or otherwise delayed for any reason by the Homemark Parties, or any other beneficiary of any agreement relating to the Homemark Loans or any other transaction between Borrower and any of the Homemark Parties. Lender may require, among other things, (i) that a Revolving Advance pay in full all amounts due the Homemark Parties under the Homemark Loans, (ii) that Borrower cause the Homemark Parties to release any and all Liens asserted by the Homemark Parties against any assets of Borrower, and (iii) that the Homemark Parties enter into a general release of claims with Borrower in form and substance satisfactory to Lender in its sole discretion. -11- 5.12 Amendment to Charter Documents. Lender shall be satisfied that Borrower has amended its charter documents to provide for the transactions contemplated by this Agreement, including amendment of Borrower's articles of incorporation authorizating additional shares of Common Stock in an amount sufficient to issue upon conversion of the Note and exercise of the Warrant. 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. In order to induce Lender to enter into this Agreement and to make Revolving Advances, Borrower represents and warrants to Lender as follows, and covenants that the following representations will continue to be true, and that Borrower will at all times comply with all of the following covenants. All exceptions to the representations and warranties contained in this Article 6 shall be attached to this Agreement as individually numbered schedules (collectively, the "Disclosure Schedules") corresponding to the applicable sections and subsections of this Article 6. The Disclosure Schedules shall diligently prepared and delivered by Borrower to Lender as soon as reasonably practicable, but in no event later than twenty-five (25) days following the execution of this Agreement. The Disclosure Schedules are subject to the approval of Buyer in accordance with section 5.10(vii) above. 6.1 Existence and Authority. Borrower is and will continue to be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Borrower is and will continue to be qualified and licensed to do business in all jurisdictions in which any failure to do so would have a Material Adverse Effect. The execution, delivery and performance by Borrower of this Agreement, and all other documents contemplated hereby (a) have been duly and validly authorized, (b) are enforceable against Borrower in accordance with their terms (except as enforcement may be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors' rights generally), and (c) do not violate Borrowers articles of incorporation or by-laws, or any law or any material agreement or instrument which is binding upon Borrower or its property, and (d) do not constitute grounds for acceleration of any material indebtedness or obligation under any material agreement or instrument which is binding upon Borrower or its property. 6.2 Name; Trade Names and Styles. The name of Borrower set forth in the heading to this Agreement is its correct name. Listed on the Schedule are all prior names of Borrower and all of its present and prior trade names. Borrower shall give Lender thirty (30) days' prior written notice before changing its name or doing business under any other name. Borrower has complied, and will in the future comply, with all laws relating to the conduct of business under a fictitious business name. 6.3 Place of Business; Location of Collateral. The addresses set forth in the heading to this Agreement is Borrower's chief executive offices. In addition, Borrower has places of business and Collateral located only at the locations set forth on the Schedule. Borrower will give Lender at least thirty (30) days' prior written notice before opening any additional place of business, changing its chief executive office, or moving any of the Collateral to a location other than Borrower's Address or one of the locations set forth on the Schedule. 6.4 Title of Collateral; Permitted Liens; Subordination of Permitted Liens. Borrower is now, and will at all times in the future be, the sole owner of all the Collateral, except for -12- items of Equipment which are leased by Borrower, liens listed on Section 6.4 of the Schedule ("Permitted Liens"), and Inventory sold in the ordinary course of business (provided that the security interests established by this Agreement shall attached to any proceeds of such sales). The Collateral now is and will remain free and clear of any and all liens, charges, security interests, encumbrances and adverse claims, except for Permitted Liens. Lender now has, and will continue to have, a first-priority perfected and enforceable security interest in all of the Collateral, subject only to the Permitted Liens, and Borrower will at all times defend Lender and the Collateral against all claims of others. Borrower will use its best efforts to cause the lenders holding the Permitted Liens to execute and deliver to Lender, in form acceptable to Lender, such waivers and subordinations as Lender shall specify, so as to cause Lender's security interest in the Collateral to be a first-priority perfected and enforceable security interests. None of the Collateral now is or will be affixed to any real property in such a manner, or with such intent, as to become a fixture. Borrower is not and will not become a lessee under any real property lease pursuant to which the lessor may obtain any rights in any of the Collateral and no such lease now prohibits, restrains, impairs or will prohibit, restrain or impair Borrower's right to remove any Collateral from the leased premises. Whenever any Collateral is located upon premises in which any third party has an interest (whether as owner, mortgagee, beneficiary under a deed of trust, lien or otherwise), Borrower shall, whenever requested by Lender, use its best efforts to cause such third party to execute and deliver to Lender, in form acceptable to Lender, such waivers and subordinations as Lender shall specify, so as to ensure that Lender's rights in the Collateral are, and will continue to be, superior to the rights of any such third party. Borrower will keep in full force and effect, and will comply with all the terms of, any lease of real property where any of the Collateral now or in the future may be located. 6.5 Maintenance of Collateral. Borrower will maintain the Collateral in good working condition, and Borrower will not use the Collateral for any unlawful purpose. Borrower will immediately advise Lender in writing of any material loss or damage to the Collateral. 6.6 Books and Records. Borrower shall: (a) keep full and accurate books and records relating to the Collateral and stamp or otherwise mark such books and records in such manner as Lender may reasonably require in order to reflect the liens granted by this Agreement; (b) furnish to Lender from time to time (but, unless any Event of Default shall have occurred and be continuing, no more frequently than monthly) statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral, as Lender may reasonably request, all in reasonable detail; (c) prior to filing, either directly or through Lender, licensee or other designee, any application for any Copyright, Patent or Mark, furnish to the Secured Party prompt notice of such proposed filing. 6.7 Financial Condition, Statements and Reports. All financial statements now or in the future delivered to Lender have been, and will be, prepared in conformity with GAAP (except, in the case of unaudited financial statements, for the absence of footnotes and subject to normal year-end adjustments) and now and in the future will fairly reflect the financial conditions of Borrower, at the times and for the periods therein stated. Between the last date covered by any such -13- statement provided to Lender and the date hereof, there has been no Material Adverse Effect. Borrower is now and will continue to be Solvent. 6.8 Tax Returns and Payments: Pension Contributions. Borrower has timely filed, and will timely file, all tax returns and reports required by foreign, federal, state and local law, and Borrower has timely paid, and will timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions now or in the future owed by Borrower. Borrower may, however, defer payment of any contested taxes, provided that Borrower (i) in good faith contests Borrower's obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (ii) notifies Lender in writing of the commencement of, and any material development in, the proceedings, and (iii) posts bonds or takes any other steps required to keep the contested taxes from becoming a lien upon any of the Collateral. As of the date hereof, Borrower is unaware of any claims or adjustments proposed for any of Borrower's prior tax years which would result in additional taxes becoming due and payable by Borrower. Borrower has paid, and shall continue to pay all amounts necessary to fund all present and future pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not and will not withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any such plan which could result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. Borrower shall, at all times, utilize the services of an outside payroll service providing for the automatic deposit of, or automatically deposit, all payroll taxes payable by Borrower. 6.9 Compliance with Law. Borrower has complied, and will comply, in all material respects, with all provisions of all material foreign, federal, state and local laws and regulations relating to Borrower, including, but not limited to, the Fair Labor Standards Act, and those relating to Borrower's ownership of real or personal property, the conduct and licensing of Borrower's business, and environmental matters. 6.10 Litigation. Except as disclosed in the Schedule, there is no claim, suit, litigation, proceeding or investigation pending or threatened by or against or affecting Borrower in any court or before any governmental agency which may result, either separately or in the aggregate, in a Material Adverse Effect. Borrower will promptly inform Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against Borrower involving an amount set forth on the Schedule. 6.11 Use of Proceeds. All proceeds of all Revolving Advances shall be used solely for lawful business purposes as set forth in more detail in Section 2.10. Borrower is not purchasing or carrying any "margin stock" (as defined in Regulation U of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any Revolving Advance will be used to purchase or carry any "margin stock" or to extend credit to others for the purpose of purchasing or carrying any "margin stock." 6.12 Intellectual Property. (a) Section 6.12(a) of the Schedules sets forth completely and correctly all Copyrights, Patents and Marks owned by Borrower on the Closing Date; except pursuant to licenses and other user agreements entered into by Borrower in the ordinary course of business and -14- listed in Section 6.12(a) of the Schedules, Borrower owns and possesses the right to use, and has done nothing to authorize or enable any other person to use, any Copyright, Patent or Mark listed in Section 6.12(a) of the Schedules; all registrations listed in Section 6.12(a) of the Schedules are valid and in full force and effect; and, except as may be set forth in Section 6.12(a) of the Schedules, Borrower owns and possesses the right to use all Copyrights, Patents and Marks listed in Section 6.12(a) of the Schedules; (b) Section 6.12(a) of the Schedules sets forth completely and correctly all licenses and other user agreements included in the Intellectual Property on the Closing Date; (c) Except as set forth in Section 6.12(a) of the Schedules, there is no violation by others of any right of Borrower with respect to any Copyright, Patent or Mark listed in Section 6.12(a) of the Schedules and (ii) Borrower is not infringing in any respect upon any Copyright, Patent or Mark of any other person; and no proceedings have been instituted, are pending against Borrower or, have been threatened against, and no claim has been received by, Borrower, alleging any such violation, except as may be set forth in Section 6.12(a) of the Schedules.. (d) Borrower (either itself or through licensees) will, for each Mark, (i) to the extent consistent with past practice and good business judgment, continue to use such Mark on each and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Mark in full force and effect free from any claim of abandonment for nonuse, (ii) maintain as in the past the quality of products and services offered under such Mark, (iii) employ such Mark with the appropriate notice of registration and (iv) not (and not permit any licensee or sublicensee to) do any act or knowingly omit to do any act whereby any Mark material to the conduct of its business may become invalidated. (e) Borrower (either itself or through licensees) will not do any act or knowingly omit to do any act whereby any Patent material to the conduct of its business may become abandoned or dedicated. (f) Borrower will notify Lender immediately if it knows or has reason to know that any Intellectual Property material to the conduct of its business may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding before any governmental person) regarding Borrower's ownership of any Intellectual Property material to its business, its right to copyright, patent or register the same (as the case may be), or its right to keep, use and maintain the same. (g) Borrower will take all necessary steps that are consistent with good business practices in any proceeding before any appropriate governmental person to maintain and pursue each application relating to any Intellectual Property (and to obtain the relevant registrations) and to maintain each registration material to the conduct of its business, including payment of maintenance fees, filing of applications for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings. (h) If any Intellectual Property material to the conduct of its business is infringed, misappropriated or diluted by a third party, Borrower will notify Lender within (10) days after it learns of such event and will, if consistent with good business practice, promptly sue for infringement, misappropriation or dilution, seek temporary restraints and preliminary injunctive -15- relief to the extent practicable, seek to recover any and all damages for such infringement, misappropriation or dilution and take such other actions as are appropriate under the circumstances to protect such Collateral. (i) Borrower will, through counsel acceptable to Lender, prosecute diligently any application for any Intellectual Property pending as of the date of this Agreement or thereafter made until the termination of this Agreement, make application on uncopyrighted but copyrightable material, unpatented but patentable inventions and unregistered but registerable Marks and preserve and maintain all rights in applications for any Intellectual Property; provided, however, that Borrower shall have no obligation to make any such application if making such application would be unnecessary or imprudent in the good faith business judgment of Borrower. Any expenses incurred in connection with such an application shall be borne by Borrower. Borrower will not abandon any right to file an application for any Intellectual Property or any pending such application in the United States without the consent of Lender, which consent shall not be unreasonably withheld. (j) Lender will have the right but not the obligation to bring suit in its own name to enforce the Copyrights, Patents and Marks and any license under such Intellectual Property, in which event Borrower will, at the request of Lender, do any and all lawful acts and execute and deliver any and all proper documents required by Lender in aid of such enforcement action. 6.13 Required Vote; Board Approval. (a) The only vote of the holders of any class or series of capital stock of the Borrower required by law, rule or regulation to approve this Agreement and/or any of the other transactions contemplated hereby is the affirmative vote (the "Borrower Shareholder Approval") of the holders of 51 percent of the outstanding shares of Borrower Common Stock in favor of the adoption and approval of this Agreement. (b) Borrower's Board of Directors has (a) determined that this Agreement and the transactions contemplated hereby, are in the best interests of Borrower and its shareholders, (b) approved this Agreement and the transactions contemplated hereby and (c) resolved (subject to Section 6.14) to recommend to such shareholders that they vote in favor of adopting and approving this Agreement in accordance with the terms hereof. 6.14 Shareholder Meeting. Borrower shall cause a meeting of its shareholders (the "Borrower Shareholders Meeting") to be duly called and held for the purpose of obtaining the Borrower Shareholder Approval as soon as reasonably practicable after the date of this Agreement. Except as provided in the next sentence, (a) the Borrower's Board of Directors shall recommend approval and adoption by its shareholders of this Agreement (the "Borrower Recommendation"), and (b) Borrower shall use its reasonable best efforts to solicit the Borrower Shareholder Approval. The Board of Directors of Borrower shall be permitted to (i) not recommend to the Borrower's shareholders that they give the Borrower Shareholder Approval or (ii) withdraw or modify in a manner materially adverse to Lender the Borrower Recommendation, only if the Board of Directors of Borrower by a majority vote determines in its good faith judgment (after consultation with its outside legal counsel) that it is necessary to so -16- withdraw or modify the Borrower Recommendation to comply with its fiduciary duties under applicable law. 6.15 Reasonable Best Efforts. Subject to the terms and conditions hereof, Borrower will use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as promptly as practicable after the date hereof, including (i) preparing and filing as promptly as practicable all documentation to effect all necessary applications, notices, petitions, filings, tax ruling requests and other documents and to obtain as promptly as practicable all consents, waivers, licenses, orders, registrations, approvals, permits, tax rulings and authorizations necessary or advisable to be obtained from any third party and/or any governmental entity in order to consummate the transactions contemplated by this Agreement and (ii) taking all reasonable steps as may be necessary to obtain all such material consents, waivers, licenses, registrations, permits, authorizations, tax rulings, orders and approvals, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any governmental entity vacated or reversed. 6.16 Certain Filings (a) As promptly as practicable after the date hereof, but in no event later than 30 days after the date of this Agreement, Borrower shall prepare and file with the SEC a proxy statement (the "Proxy Statement") for the purpose of obtaining the Borrower Shareholder Approval. Borrower shall mail the Proxy Statement to its shareholders as promptly as practicable, and, if necessary promptly circulate amended, supplemental or supplemented proxy material and, if required in connection therewith, resolicit proxies. (b) No filing of, or any amendment or supplement to, the Proxy Statement will be made by Borrower without providing Lender the opportunity to review and comment thereon. If at any time any information relating to either party, or any of their respective Affiliates, officers or directors should be discovered by the Borrower or Lender, that should be set forth in an amendment or supplement to the Proxy Statement, so that it would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party hereto and an appropriate amendment or supplement describing such information shall be promptly filed with the SEC and, to the extent required by law or regulation, disseminated to the shareholders of the Borrower. 7. [Intentionally Omitted] 8. ADDITIONAL DUTIES OF THE BORROWER. 8.1 Financial and Other Covenants. Borrower shall at all times comply with the financial and other covenants set forth in the Schedule. -17- 8.2 Insurance. Borrower shall, at all times insure all of the tangible personal property Collateral and carry such other business insurance, with insurers reasonably acceptable to Lender, in such form and amounts as Lender may reasonably require, and Borrower shall provide evidence of such insurance to lender, so that Lender is satisfied that such insurance is, at all times, in full force and effect. All liability insurance policies of Borrower shall name Lender as a loss payee thereon and Borrower shall cause a Lender's loss payee endorsement in form reasonably acceptable to Lender. Upon receipt of the proceeds of any such insurance, Lender shall apply such proceeds in reduction of the Obligations as Lender shall determine in its sole discretion, except that, provided no Default or Event of Default has occurred and is continuing, Lender shall release to Borrower insurance proceeds with respect to Equipment totaling less than the amount set forth in Section 8 of the Schedule, which shall be utilized by Borrower for the replacement of the Equipment with respect to which the insurance proceeds were paid. Lender may require reasonable assurance that the insurance proceeds so released will be so used. If Borrower fails to provide or pay for any insurance, Lender may, but is not obligated to, obtain the same at Borrower's expenses. Borrower shall promptly deliver to Lender copies of all reports made to insurance companies. 8.3 Reports. Borrower, at its expense, shall provide Lender with the written reports set forth in Section 8 of the Schedule, and such other written reports with respect to Borrower (including budgets, sales projections, operating pans and other financial documentation), as Lender shall from time to time reasonably specify. 8.4 Access to Collateral, Books and Records. At reasonably times but not less frequently than quarterly and on three (3) Business Days' notice, Lender, or its agents, shall have the right to perform Audits. Lender shall take reasonable steps to keep confidential all confidential information obtained in any Audit, but Lender shall have the right to disclose any such information to its auditors, regulatory agencies, and attorneys, and pursuant to any subpoena or other legal process. The Audits shall be at Borrower's expense and the charge for the Audits shall be Three Hundred Dollars ($300) per person per day (or such higher amount as shall represent Lender's then current standard charge for the same), plus reasonable out-of-pocket expenses. Borrower will not enter into any agreement with any accounting firm, service bureau or third party to store Borrower's books or records at any location other than Borrower's Address, without first notifying Lender of the same and obtaining the written agreement form such accounting firm, service bureau or other third party to give Lender the same rights with respect to access to books and records and related rights as Lender has under this Credit Agreement. 8.5 Negative Covenants. Borrower shall not, without Lender's prior written consent, (provided that the execution of any agreement by Lender or its Affiliates shall be deemed a consent) do any of the following: (a) merge or consolidate with another entity, except in a transaction in which (i) the owners of the Borrower hold at least fifty percent (50%) of the ownership interest in the surviving entity immediately after such merger or consolidation, and (ii) the Borrower is the surviving entity; (b) acquire or sell any assets, except (i) in the ordinary course of business, or (ii) in a transaction or a series of transactions not involving the payment of an aggregate amount in excess of the amount set forth in Section 8 of the Schedule; -18- (c) enter into any other transaction outside the ordinary course of business; (d) sell or transfer any Collateral, except for the sale of finished Inventory in the ordinary course of Borrower's business, and except for the sale of obsolete or unneeded Equipment in the ordinary course of business; (e) store any Inventory or other Collateral with any warehouseman or other third party; (f) sell any Inventory on a sale-or-return, guaranteed sale, consignment, or other contingent basis; (g) make any loans of any money or other assets, except (i) advances to customers or suppliers in the ordinary course of business, (ii) travel advances, employee relocation loans and other employee loans and advances in the ordinary course of business, and (iii) loans to employees, officers and directors for the purpose of purchasing equity securities of the Borrower; (h) incur any debts outside the ordinary course of business ; (i) guarantee or otherwise become liable with respect to the obligations of another party or entity, which would have a Material Adverse Effect; (j) pay or declare any dividends or distributions on the ownership interests in Borrower (except for dividends or distributions payable solely in stock form of ownership interests in Borrower); (k) make change in Borrower's capital structure except as contemplated herein; or (l) dissolve or elect to dissolve. Transactions permitted by the foregoing provisions of this Section are only permitted if no Default or Event of Default is continuing or would occur as a result of such transaction. 8.6 Litigation Cooperation. Should any third-party suit or proceeding be instituted by or against Lender with respect to any Collateral or relating to Borrower, Borrower shall, without expense to Lender, make available Borrower and its officers, employees and agents and Borrower's books and records, to the extent that Lender may deem them reasonably necessary in order to prosecute or defend any such suit or proceeding. 8.7 Further Assurances. Borrower agrees, at its expense, on request by Lender, to execute all documents and take all actions, as Lender, may deem reasonably necessary or useful in order to perfect and maintain Lender's perfected security interest in the Collateral, and in order to fully consummate the transactions contemplated by this Agreement. -19- 9. MATURITY DATE. 9.1 Maturity Date. This Agreement shall continue in effect until the Maturity Date provided that the Maturity Date may be extended in Lender's sole and absolute discretion. 9.2 Early Termination. This Agreement may be terminated prior to the Maturity Date as follows: (a) by Borrower, effective three (3) Business Days after written notice of termination is given to Lender; or (b) by Lender at any time after the occurrence of an Event of Default, without notice, effective immediately. 9.3 Payment of Obligations. On the Maturity Date or on any earlier effective date of termination, Borrower shall pay and perform in full all Obligations, whether evidenced by installment notes or otherwise, and whether or not all or any part of such Obligations are otherwise then due and payable. Notwithstanding any termination of this Agreement, all of Lender's security interests in all of the Collateral and all of the terms and provisions of this Agreement shall continue in full force and effect until, all Obligations have been paid and performed in full; provided that, without limiting the fact that Revolving Advances are subject to the discretion of Lender, Lender may, in its sole discretion, refuse to make any further Revolving Advances after termination. No termination shall in any way affect or impair any right or remedy of Lender, nor shall any such termination relieve Borrower any Obligation to Lender, until all of the Obligations have been paid and performed in full. Upon payment and performance in full of all the Obligations and terminating of this Agreement, Lender shall promptly deliver to Borrower terminating statements, requests for reconveyances and such other documents as may be required to fully terminate Lender's security interests. 10. EVENTS OF DEFAULT AND REMEDIES. 10.1 Events of Default. The occurrence of any of the following events shall constitute an "Event of Default" under this Agreement, and Borrower shall give Lender immediate written notice thereof: (a) Any warranty, representation, statement, report or certificate made or delivered to Lender by Borrower or any of Borrower's officers, employees or agents, now or in the future, shall be untrue and misleading and results in a Material Adverse Effect; or (b) Borrower shall fail to pay when due any Revolving Advance or any interest thereon or any other monetary Obligation; or (c) The total Revolving Advances and other Obligations outstanding at any time shall exceed the Maximum Revolving Advance Amount; or (d) Borrower shall fail to comply with the financial covenants (if any) set forth in the Schedule or shall fail to perform any other non-monetary Obligation which by its nature cannot be cured; or -20- (f) Borrower shall fail to perform any other non-monetary Obligation, which failure is not cured within five (5) Business Days after the date due or notice of Borrower's Failure to perform such Obligations; or (g) Any levy, assessment, attachment, seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any part of the Collateral which is not cured within ten (10) days after the occurrence of the same; or (h) Any default or event of default occurs under any obligation secured by a Permitted Lien, which is not cured within any applicable cure period or waived in writing by the holder of the Permitted Lien; or (i) Borrower breaches any material contract or obligation, which has or may reasonably be expected to have a Material Adverse Effect; or (j) Dissolution, termination of existence, insolvency or business failure of Borrower or any guarantor of any of the Obligations; or appointment of a receiver, trustee or custodian, for all or any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by Borrower or any guarantor of any of the Obligations under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect; or (k) The commencement of any proceeding against Borrower or any guarantor of any of the Obligations under any reorganization, bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect, which is (i) not timely controverted, or (ii) not cure by the dismissal thereof within thirty (30) days after the date commenced; or (l) Revocation or termination of, or limitation or denial of liability upon, any pledge of any certificate of deposit, securities or other property or asset of any kind pledged by any third party to secure any or all of the Obligations, or any attempt to do any of the foregoing, or commencement of proceedings by or against any such third party under any bankruptcy or insolvency law; or (m) Borrower or any guarantor of any of the Obligations makes any payment on account of any indebtedness or Obligation which has been subordinated to the Obligations, other than as permitted in the applicable subordination agreement, or if any person who has subordinated such indebtedness or Obligations terminates or in any way limits his subordination agreement; or (n) except as permitted under Section 8.5(a), Borrower shall suffer or experience any Change of Control without Lender's prior written consent, which consent shall be in the discretion of Lender in the exercise of its reasonable business judgment; or (o) Borrower shall generally not pay its debts as they become due, or Borrower shall conceal, remove or transfer any part of its property, with intent to -21- hinder, delay or defraud its creditors, or make or suffer any transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or (p) There shall be any Material Adverse Effect. Lender may cease making any Revolving Advances or extending any credit hereunder during any of the above cure periods. 10.2 Remedies. Upon the occurrence, and during the continuance, of any Event of Default, Lender, at its option and without notice or demand of any kind (all of which are hereby expressly waived by Borrower), may do any one or more of the following: (a) Cease making Revolving Advances or otherwise extending credit to Borrower under this Agreement or any other document or agreement; (b) Accelerate and declare all or any part of the Obligations to be immediately due, payable and performable, notwithstanding any deferred or installment payments allowed by any instrument evidencing or relating to any Obligation; All attorneys' fees, expenses, costs, liabilities and Obligations incurred by Lender (including attorneys' fees and expenses incurred in connection with bankruptcy) with respect to the foregoing shall be due from the Borrower to Lender on demand. Lender may charge the same to Borrower's loan account, and the same shall thereafter bear interest at the same rate as is applicable to the Receivable Revolving Advances. 10.3 [Intentionally Omitted] 10.4 Power of Attorney. Borrower grants to Lender an irrevocable power of attorney coupled with an interest, authorizing and permitting Lender (acting through any of its employees, attorneys or agents) at any time, at its option, but without obligation, with or without notice to Borrower, and at Borrower's expense, to do any or all of the following, in Borrower's name or otherwise, but Lender agrees to exercise the following powers in a commercially reasonable manner: (a) Execute on behalf of Borrower any documents that Lender may, in its sole discretion, deem advisable in order to perfect and maintain Lender's security interest in the Collateral, or in order to exercise a right of Borrower or Lender, or in order to fully consummate all the transactions contemplated under this Agreement, and all other present and future agreements; (b) Execute on behalf of Borrower any document exercising, transferring or assigning any option to purchase, sell or otherwise dispose of or to lease (as lessor or lessee) any real or personal property which is part of Lender's Collateral or in which Lender has an interest; (c) Execute on behalf of Borrower, any invoices relating to any Receivable, any draft against any Account Debtor and any notice to any Account Debtor, -22- any proof of claim in bankruptcy, any Notice of Lien, claim of mechanic's materialman's or other lien, or assignment or satisfaction of mechanic's materialman's or other lien; (d) Take control in any manner of any cash or non-cash items of payment or proceeds of Collateral; endorse the name of Borrower upon any instruments, or documents, evidence of payment or Collateral that may come into Lender's possession; (e) Endorse all checks and other forms of remittances received by Lender; (f) Pay, consent or settle any lien, charge, encumbrance, security interest and adverse claim in or to any of the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (g) Grant extensions of time to pay, compromise claims and settle Receivables and General Intangibles for less than face value and execute all releases and other documents in connection therewith; (h) Pay any sums required on account of Borrower's taxes or to secure the release of any liens therefor, or both; (i) Settle and adjust, and give releases of, any insurance claim that relates to any of the Collateral and obtain payment therefor; (j) Instruct any third party having custody or control of any books or records belonging to, or relating to, Borrower to give Lender the same rights or access and other rights with respect thereto as Lender has under this Agreement; and (k) Take any action or pay any sum required of Borrower pursuant to this Agreement and any other present or future agreements. Any and all sums paid and any and all costs, expenses, liabilities, obligations and attorneys' fees incurred by Lender (including attorneys' fees and expenses incurred pursuant to bankruptcy) with respect to the foregoing shall be added to and become part of the Obligations, and shall be payable upon demand. Lender may charge the foregoing to Borrower's loan account and the foregoing shall thereafter bear interest at the same rate applicable to the Receivable Revolving Advances. In no event shall Lender's rights under the foregoing power of attorney or any of Lender's other rights under this Agreement be deemed to indicate that Lender is in control of the business, management or properties of Borrower. Borrower shall pay, indemnify, defend and hold Lender and each of its officers, directors, employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all attorneys' fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against , imposed upon, or incurred by any of them in connection with or as a result of or related to the execution, delivery, enforcement, performance, and administration of this Agreement and any other Loan Documents or the transactions contemplated herein, and with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of -23- the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event or circumstance in any manner related thereto (all the foregoing, collectively, the "Indemnified Liabilities"). Borrower shall have no obligation to any Indemnified Person hereunder with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the Obligations. 11. GENERAL PROVISIONS. 11.1 Interest Computation. In computing interest on the Obligations, all checks, wire transfers and other items of payment received by Lender (including proceeds of Receivables and payment of the Obligations in full) shall be deemed applied by Lender on account of the Obligations upon receipt by Lender of immediately available funds, and, for purposes of the foregoing, any such funds received after 10:30 a.m. Central Standard Time, on any day shall be deemed received on the next Business Day. Lender shall not however, be required to credit Borrower's account for the amount of any item of payment which is unsatisfactory to Lender in its sole discretion, and Lender may charge Borrower's loan account for the amount of any time of payment which is returned to Lender unpaid. 11.2 Application of Payments. All payments with respect to the obligations may be applied, and in Lender's sole discretion reversed and re-applied, to the Obligations, in such order and manner as Lender shall determine in its sole discretion. 11.3 Charges to Accounts. Lender may, in its discretion, require that Borrower pay monetary Obligations in cash to Lender, or charge them to Borrower's Revolving Advance account, in which event they will bear interest from the date due to the date paid at the same rate applicable to the Revolving Advances. 11.4 Monthly Accountings. Lender shall provide Borrower monthly with an account of advances, charges, expenses and payments made pursuant to this Agreement. Such account shall be deemed correct accurate and binding on Borrower and an account stated (except for reverses and reapplications of payments made and corrections of errors discovered by Lender), unless Borrower notifies Lender in writing to the contrary within thirty (30) days after each account is rendered, describing the nature of any alleged errors or omissions. 11.5 Notices. All notices to be given under this Agreement shall be in writing and shall be given either personally or by reputable private delivery service or by regular first-class mail, facsimile or certified mail return receipt requested, addressed to Lender or Borrower at the addresses shown below: -24- If to Lender: Fidelity National Financial, Inc. 4050 Calle Real, Suite 220 Santa Barbara, California 93110-3413 Attn: Marlan Walker Telephone: (805) 696-7000 Facsimile: (805) 696-7809 If to Borrower: HomeSeekers.com, Incorporated 6490 S. McCarran, Suite D-30 Reno, Nevada 89509 Attn: President Telephone: (775) 824-8054 Facsimile: (775) 824-8050 All notices shall be deemed to have been given upon deliver in the case of notices personally delivered, faxed (at time of confirmation of transmission), or at the expiration of one (1) Business Day following delivery to the private delivery service, or two (2) Business Days following the deposit thereof in the Untied States mail, with postage prepaid. 11.6 Severability. Should any provision of this Agreement be held by any court of competent jurisdiction to be void and unenforceable, such defect shall not affect the remainder of this Agreement, which shall continue in full force and effect. 11.7 Integration. This Agreement and such other written agreements, documents and instruments as may be executed in connection herewith are the final, entire and complete agreement between Borrower and Lender and supersede all prior and contemporaneous negotiations and oral representations and agreements, all of which are merged and integrated into this Agreement. There are no oral understandings, representations or agreements between the parties which are not set forth in this Agreement or in other written agreements signed by the parties in connection herewith. 11.8 Waivers. The failure of Lender at any time or time to require Borrower to strictly comply with any of the provisions of this Agreement or any other present or future agreement between Borrower and Lender shall not waive or diminish any right of Lender later to demand and receive strict compliance therewith. Any waiver of any Default shall not waive or affect any other Default, whether prior or subsequent, and whether or not similar. None of the provisions of this Agreement or any other agreement now or in the future executed by Borrower and delivered to Lender shall be deemed to have been waived by any act or knowledge of Lender or its agents or employees, but only by a specific written waiver signed by an authorized officer of Lender and delivered to Borrower. Borrower waives demand, protest, notice of payment and nonpayment, release, compromise, settlement, extension or renewal of any commercial paper, instrument, account, General Intangibles, document or guaranty at any time held by Lender on -25- which Borrower is or may in any way be liable, and notice of any action taken by Lender, unless expressly required by this Agreement. 11.9 No Liability for Ordinary Negligence. Neither Lender, nor any of its directors, officers, employees, agents, attorneys or any other Persons affiliated with or representing Lender shall be liable for any claims, demands, losses or damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower or any other party through the ordinary negligence of Lender, or any of its directors, officers, employees, agents, attorneys or any other Person affiliated with or representing Lender, but nothing herein shall relieve Lender from liability for its own gross negligence or willful misconduct. 11.10 Amendment. The terms and provisions of this Agreement may not be waived or amended, except in a writing executed by Borrower and a duly authorized office of Lender. 11.11 Time of Essence. Time is of the essence in the performance by Borrower of each and every obligation under this Agreement. 11.12 Attorneys Fees, Costs and Charges. Borrower shall reimburse Lender for all attorneys' fees (including attorneys' fees and expenses incurred pursuant to bankruptcy) and all filing, recording, search, title insurance, appraisal, audit, and other costs incurred by Lender, pursuant to, and in connection with, or relating to this agreement (whether or not a lawsuit is filed), including, but not limited to, any attorneys' fees and costs (including attorneys' fees and expenses pursuant to bankruptcy) Lender incurs in order to do the following: prepare and negotiate this Agreement and the documents relating to this Agreement; obtain legal advice in connection with this Agreement or Borrower; enforce, or seek to enforce, any of its rights; prosecute actions against, or defend actions by, Account Debtors; commence, intervene in, or defend any action or proceeding; initiate any complaint to be relieved of the automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party claim, or other claim; examine, audit, copy, and inspect any of the Collateral or any of Borrower's books and records; protect, obtain possession of , lease, dispose of, or otherwise enforce Lender's security interest in the Collateral; and otherwise represent Lender in any litigation relating to Borrower. If either Lender or Borrower files any lawsuit against the other predicated on a breach of this Agreement, the prevailing party in such action shall be entitled to recover its costs and attorneys' fees (including attorneys' fees and expenses incurred pursuant to bankruptcy), including (but not limited to) attorneys' fees and costs incurred in the enforcement of, execution upon or defense of any order, decree, award or judgment. Borrower shall also pay Lender's standard charges for returned checks and for wire transfers, in effect from time to time. All attorneys' fees, costs and charges (including attorneys' fees and expenses incurred pursuant to bankruptcy) and other fees, costs and chargers to which Lender may be entitled pursuant to this agreement may be charged by Lender to Borrower's loan account and shall thereafter bear interest at the same rate as the Revolving Advances. 11.13 Benefit of Agreement. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of Borrower and Lender; provided, however, that Borrower may not assign or transfer any of its rights under this Agreement without the prior written consent of Lender, and any prohibited assignment shall be void. No consent by Lender to any assignment shall release Borrower from its liability for the Obligations. Lender may assign its rights and delegate its duties -26- hereunder without the consent of Borrower. Lender reserves the right to syndicate all or a portion of the transactions created herein or sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in Lender's rights and benefits hereunder. In connection with any such syndication, assignment or participation, Lender may disclose all documents and information which Lender now or hereafter may have relating to Borrower or Borrower's business. To the extent that Lender assigns its rights and obligations hereunder to a third Person, Lender thereafter shall be released from such assigned obligations to Borrower. 11.14 Publicity. Lender and Borrower, subject to approval of Lender which shall not be unreasonably withheld, shall issue appropriate press releases and to cause a tombstone to be published announcing the consummation of this transaction and the aggregate amount thereof. 11.15 Paragraph Headings Construction. Paragraph headings are only used in this Agreement for convenience. Borrower and Lender acknowledge that the headings may not describe completely the subject matter of the applicable paragraph, and the heading shall not be used in any manner to construe, limit, define, interpret any term or provision of this Agreement. The term "including," whenever used in this Agreement, shall mean "including (but not limited to)." This Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this agreement shall be construed strictly against Lender or Borrower under any rule of construction or otherwise. 11.16 Governing Law; Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and all rights and obligations of Lender and Borrower shall be governed by the internal laws of the State of California, without regard to its conflicts of law principles. As a material part of the consideration to Lender to enter into this Agreement, Borrower (a) agrees that all actions and proceedings relating directly or indirectly to this Agreement shall, at Lender's option, be litigated in course located within California, and that the exclusive venue therefor shall be Cook County; (b) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (c) waives any and all rights Borrower may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding. 11.17 Mutual Waiver of Jury Trial. BORROWER AND LENDER EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN LENDER AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF LENDER OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. [signature page follows] -27- LENDER: FIDELITY NATIONAL FINANCIAL, INC. By: /s/ Marlan Walker Name: Marlan Walker Title: Executive Vice President BORROWER: HOMESEEKERS.COM, INCORPORATED By: /s/ Thomas A. Chaffee, Jr. Name: Thomas A. Chaffee, Jr. Title: Sole Director/Acting CEO Schedule to Revolving Credit Agreement This Schedule forms an integral part of the Revolving Agreement between Lender and Borrower. SECTION 6 -- REPRESENTATIONS, WARRANTIES AND COVENANTS Section 6.2 -- Prior Names of Borrower: Section 6.2 -- Existing Trade Names of Borrower: Section 6.3 -- Other Locations and Addresses: Section 6.4 -- Permitted Liens Section 6.10 -- Material Adverse Litigation: Section 6.10 -- Future Claims and Litigation. Borrower will promptly inform Lender in writing of any claim, proceeding, litigation or investigation in the future threatened or instituted by or against Borrower involving any single claim of Fifty Thousand Dollars ($50,000) or more, or involving One Hundred Thousand Dollars ($100,000) or more in the aggregate. Section 6.12(a)--Intellectual Property. (i) List of Copyrights-. (ii) List of Patents-. (iii) List of Marks-. (iv) Material Contracts Licenses Agreements- 1) 2) . SECTION 8 -- ADDITIONAL DUTIES OF BORROWER Section 8.1 -- Other Provisions: Section 8.3 -- Reporting. Borrower shall provide Lender with the following: (i) MONTHLY INTERNALLY PREPARED FINANCIAL STATEMENTS, AS SOON AS AVAILABLE, AND IN ANY EVENT WITHIN FIFTEEN (15) DAYS AFTER THE END OF EACH FISCAL QUARTER OF BORROWER. (ii) ANNUAL FINANCIAL STATEMENTS, AS SOON AS AVAILABLE, AND IN ANY EVENT WITHIN NINETY (90) DAYS FOLLOWING THE END OF BORROWER'S FISCAL YEAR, CONTAINING THE UNQUALIFIED OPINION OF, AND CERTIFIED BY, AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT ACCEPTABLE TO LENDER. Section 8.5 -- Negative Covenants (Acquired Assets): $50,000 -3- Exhibit A Note Exhibit B Security Agreement Exhibit C Registration Rights Agreement Exhibit D Subordination Agreement Exhibit E Warrant EX-99.2 4 a77365ex99-2.txt EXHIBIT 99.2 EXHIBIT 99.2 THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. HOMESEEKERS.COM, INCORPORATED CONVERTIBLE REVOLVING PROMISSORY NOTE Up to $4,000,000 October 25, 2001 FOR VALUE RECEIVED, HOMESEEKERS.COM, INCORPORATED, a Nevada corporation (the "Company"), promises to pay to the order of FIDELITY NATIONAL FINANCIAL, INC., a Delaware corporation ("FNF"), or holder (either, the "Holder"), on the Maturity Date (as defined below), unless sooner paid or converted as provided below, the principal sum of Four Million Dollars ($4,000,000), or such lesser amount as shall equal the aggregate of the Revolving Advances made or deemed made by the Holder to the Company hereunder, plus accrued unpaid interest thereon. The outstanding principal balance of each Revolving Advance made pursuant to this Note shall bear interest at the Interest Rate from the date of such Revolving Advance to the date the principal sum of such Revolving Advance is paid in full. Payments of interest shall be due on each March 31, June 30, September 30 and December 31. All payments under this Note shall be made to the order of the Holder at 4050 Calle Real, Santa Barbara, California 93110, or such other address as Holder may designate in writing to the Company, and shall be applied first to accrued unpaid interest, if any, and then to principal. 1. Revolving Credit Agreement and Security Agreement. This Note is issued pursuant to that certain Revolving Credit Agreement, dated October 25, 2001 (the "Credit Agreement"), by and between FNF and the Company. Any Holder, by taking possession hereof, shall be entitled to the benefits and bound by the obligations set forth in the Credit Agreement. This Note is secured pursuant to that certain Security Agreement, dated even date herewith (the "Security Agreement"), by and between Fidelity and the Company, and any Holder shall, by taking possession of this Note, be entitled to the benefits and protections set forth therein. Copies of the Credit Agreement and the Security Agreement may be obtained from the Company without charge. 2. Revolving Note. The Company may make draw-downs ("Revolving Advances") under this Note from time to time in an aggregate amount not to exceed the principal amount of this Note. Such Revolving Advances shall be recorded on Schedule A attached hereto (the "Borrowers Account"), and absent manifest error, the Revolving Advances and other disbursement dates shown on Borrower's Account shall be conclusive and binding on the Holder. 3. Interest Rate. The outstanding principal balance of each Revolving Advance made pursuant to this Note shall bear interest at a variable rate equal to the Prime Rate as established by the Wall Street Journal from time to time plus two percent (2%) per annum from the date of such Revolving Advance to the date the principal sum of such Revolving Advance is paid in full. 4. Maturity Date. The date that this Note shall mature, and the principal amount outstanding hereunder, plus accrued unpaid interest thereon and any charges pertaining thereto, shall become due and payable (the "Maturity Date") shall be April 24, 2003. 5. Prepayments. The Company may voluntarily prepay this Note either in whole or in part without penalty or premium. The principal amount of Revolving Advances made hereunder and repaid may be re-borrowed. Such repayments shall be recorded by the Holder on Borrower's Account, and, absent manifest error, the repayments and repayment dates shown on Borrower's Account shall be conclusive and binding on the Holder. 6. Conversion. The outstanding principal balance and unpaid accrued interest on this Note shall, at Lender's sole option, convert into shares of the Company's [common] stock. The number of common shares to be issued upon such conversion shall be equal to the quotient obtained by dividing the aggregate outstanding principal and unpaid accrued interest due on this Note on the date of conversion by ten cents ($0.10). If at the time chosen for conversion by Lender there are insufficient authorized common shares to permit conversion of this Note in full, the Company will take all corporate action necessary to authorize a sufficient number of such shares to permit such stated conversion in full. (a) Manner of Conversion. Lender shall be deemed to be the holder of the common shares into which this Note converts as of the date of the conversion described above. At that time, Lender shall cease to have any rights pursuant to this Note but shall have all of the rights granted to it as a holder of common stock. To receive a certificate representing the common shares, Lender shall surrender this Note to the Company. As soon as practicable after the surrender of this Note, the Company shall (i) issue and deliver to Lender a certificate for the number of full common shares issuable upon conversion, and (ii) pay to Lender cash as provided in Section 6(b) below for any fraction of a common share which would otherwise be issuable upon conversion. (b) Fractional Shares. No fractional common shares shall be issued upon conversion of this Note. In place of a fractional share, the Company shall pay Lender an amount equal to the product obtained by multiplying the fractional share by the purchase price per share for the applicable common share. -2- 7. Waivers. The Company hereby waives diligence, presentment for payment, demand, protest, notice of non-payment, notice of dishonor, notice of protest, and any and all other notices and demands whatsoever. The Company shall remain bound under this Note until all principal and interest and any other amounts that are payable hereunder have been paid or converted in full, notwithstanding any extensions or renewals granted with respect to this Note or the release of any party liable hereunder. The Company, and any and all endorsers hereof, also waive the right to plead any and all statutes of limitations as a defense to any demand on this Note or any and all obligations or liabilities arising out of or in connection with this Note, to the fullest extent permitted by law. 8. Events of Default. Any of the following events shall constitute an event of default by the Company under this Note (an "Event of Default"): (a) the failure of the Company to pay to Holder, on the Maturity Date, any and all principal amounts due and owing under this Note; (b) the failure of the Company to pay to Holder interest payments when due; or (c) the occurrence of any other Event of Default pursuant to the Credit Agreement or the Security Agreement. Upon the occurrence of any Event of Default, as defined hereinabove, at Holder's option, Holder may declare immediately due and payable, and on any such declaration there shall become immediately due and payable, the entire unpaid principal balance of this Note, together with all accrued and unpaid interest under this Note and any other sums owing at the time of such declaration pursuant to this Note, and Holder shall be entitled to exercise all rights and remedies available to Holder hereunder and under applicable law, all of which rights and remedies shall be cumulative. Without limiting the generality of the foregoing, upon the occurrence of an Event of Default, the interest rate at which interest shall accrue on the principal sum and any other amounts that are due under this Note shall increase to a variable rate equal to the Prime Rate as established by the Wall Street Journal from time to time plus four percent (4%) per annum from the date of such Event of Default to the earlier of the Maturity Date and the date the principal sum of such Revolving Advance is paid in full Default Rate until all such amounts have been paid in full. 9. No Waiver by Holder. Any delay or omission on the part of Holder to exercise any of Holder's rights or remedies hereunder or under applicable law, including, without limitation, the right to accelerate amounts owing under this Note, shall not be deemed a waiver of that right or remedy or of any other right or remedy of Holder in respect thereof. The acceptance by Holder of any payment pursuant to the terms of this Note which is less than payment in full of all amounts due and -3- payable at the time of such payment shall not constitute a waiver of the right to exercise any of the Holder's rights or remedies under this Note or under applicable law at that time or at any subsequent time or nullify any prior exercise of any such rights or remedies without the express written consent of Holder, except as and to the extent provided to the contrary by applicable law. 10. Governing Law. This Note shall be governed by and construed according to and enforced under the internal laws of the State of California without giving effect to its choice of laws rules. 11. Binding Nature. The provisions of this Note shall be binding on the Company and shall inure to the benefit of the Holder. 12. Usury Savings Provisions. In the event Holder receives any sums under this Note which constitute interest in an amount in excess of that permitted by any applicable law, then, all such sums constituting interest in excess of that permitted to be paid under applicable law shall, at Holder's option, either be credited to the payment of principal owing hereunder or returned to the Company. 13. Severability. If, but only to the extent that, any provision of this Note shall be invalid or unenforceable, then, such offending provision shall be deleted from this Note, but only to the extent necessary to preserve the validity and effectiveness of this Note to the fullest extent permitted by applicable law. HOMESEEKERS.COM, INCORPORATED By: /s/ Thomas A. Chaffee, Jr. Its: Sole Director/Acting CEO -4- SCHEDULE A BORROWER'S ACCOUNT This Promissory Note evidences Loans made by Holder to the Maker, on the dates and in the principal amounts, at the interest rates and the maturity dates set forth below, subject to the payments of principal set forth below:
- ----------------- ----------------- --------- ------------ ------------ ------------------- -------------- Date Made Principal Interest Maturity Principal Description Verified By/ Amount of Loan Rate Date Payments Approved By - ----------------- ----------------- --------- ------------ ------------ ------------------- -------------- - ----------------- ----------------- --------- ------------ ------------ ------------------- -------------- - ----------------- ----------------- --------- ------------ ------------ ------------------- -------------- - ----------------- ----------------- --------- ------------ ------------ ------------------- --------------
Interest shall be due and payable at the Maturity Date. -5- FORM OF BORROWING CERTIFICATE ----------------------------- REQUEST FOR LOAN ----------------------------- TO: Fidelity National Financial, Inc. FROM: HomeSeekers.com, Incorporated DATE: ______________ AMOUNT: ____________________ DATE NEEDED:________________ REASON FOR REQUEST: ________________________________________________________________________________ REQUEST APPROVED BY: ___________________________________________ Name: COMPANY USE ONLY ________________________________________________________________________________ TRANSFER APPROVED BY: ________________________________ TRANSFER DATE: ________________ AMOUNT: ____________________ SPECIAL INSTRUCTIONS: ATTACH THIS SIGNED FORM TO THE REVOLVING PROMISSORY NOTE ________________________________________________________________________________ -6- EX-99.3 5 a77365ex99-3.txt EXHIBIT 99.3 EXHIBIT 99.3 EXECUTION COPY THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT PURSUANT TO A REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION. PURCHASE WARRANT Issued to: FIDELITY NATIONAL FINANCIAL, INC. Exercisable to Purchase Shares of Common Stock of HOMESEEKERS.COM, INCORPORATED Void after October 24, 2011 This is to certify that, for the value described herein and subject to the terms and conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and the Company (hereinafter defined) promises and agrees to sell and issue to the Warrantholder, at any time on or after October 25, 2001 and on or before October 24, 2011, at the Exercise Price (hereinafter defined) up to a number of shares of the Company's Common Stock which will result in the Warrantholder owning, including shares of Common Stock issued upon conversion of the Note, assuming full exercise of the Warrant and assuming Warrantholder elects not utilize a Cashless Exercise, 25% of the fully diluted shares of Common Stock outstanding after such exercise. By way of example only, in the event Warrantholder converts the Note into Common Stock, and after such conversion holds 1,000,000 shares of Common Stock, and the number of the fully diluted shares of Common Stock outstanding at the time of exercise, not including the Shares issuable upon exercise of this Warrant, was 100,000,000, this Warrant shall be exercisable for 24,000,000 shares of Common Stock at the Exercise Price. Notwithstanding anything herein to the contrary, under no circumstances is Warrantholder obligated to convert the Note into Common Stock. This Warrant Certificate is issued subject to the following terms and conditions: 1. Definitions of Certain Terms. Except as may be otherwise clearly required by the context, the following terms have the following meanings: (a) "Additional Shares of Common Stock" means all shares of Common Stock issued by the Company after the Effective Date, other than the following issuances of securities: - securities issued in connection with partnering arrangements or in financing transactions with equipment lessors, banks or similar institutional credit financing sources; - securities issued in connection with a bona fide merger, acquisition, reorganization or other business combination of or by the Company; - Common Stock issued upon conversion or exercise of options, warrants, preferred stock or other convertible securities of the Company outstanding on the Effective Date; - shares of Common Stock issuable or issued under the Company's stock option plan or employee stock purchase plan; and - securities issuances made in accordance with the adjustment of the Exercise Price pursuant to Section 4 hereof. (b) "Cashless Exercise" means a partial exercise of the Warrants in which, as payment of the Exercise Price thereof, the Warrantholder surrenders for cancellation by the Company a portion of the Warrants not being exercised that have a fair value (as hereinafter defined) equal to the aggregate Exercise Price of the Shares being acquired on such Cashless Exercise. For purposes hereof, the "fair value" of any Warrants surrendered for cancellation in a Cashless Exercise shall be determined by (i) multiplying 2 the number of the Shares that would otherwise be purchasable if those surrendered Warrants were then being exercised by the closing sale price for one share of Common Stock as of the date of such exercise, as reported by the Nasdaq National Market and (ii) subtracting from the product thereof the Exercise Price of those Shares. A Holder may only elect a Cashless Exercise if the Shares issuable by the Company on such exercise are publicly traded securities. (c) "Closing Date" means the date on which the Offering is closed. (d) "Commission" means the Securities and Exchange Commission. (e) "Common Stock" means the common stock, $0.001 par value, of the Company. (f) "Company" means HomeSeekers.com, Incorporated. (g) "Company's Expenses" means any and all expenses payable by the Company or the Warrantholder in connection with an offering described in Section 7 hereof, except Warrantholder's Expenses. (h) "Exchange Act" means the Securities Exchange Act of 1934, as amended (i) "Exercise Price" means the price at which the Warrantholder may purchase one Share upon exercise of Warrants as determined from time to time pursuant to the provisions hereof. The initial Exercise Price is $0.10 per Share. (j) "Rules and Regulations" means the rules and regulations of the Commission adopted under the Securities Act. (k) "Securities Act" means the Securities Act of 1933, as amended. (l) "Share" or "Shares" refers to one or more shares of Common Stock issuable on exercise of the Warrant. (m) "Warrantholder" means a record holder of the Warrant or Shares. The initial Warrantholder is Fidelity National Financial, Inc. (n) "Warrant" means the warrant evidenced by this certificate or any certificate obtained upon transfer or partial exercise of the Warrant evidenced by any such certificate. 2. [Intentionally Omitted] 3. Exercise of Warrants. All or any part of the Warrant may be exercised commencing on the Effective Date and ending at 5 p.m. Pacific Time on the tenth anniversary of the Effective Date by surrendering the Warrant, together with appropriate 3 instructions, duly executed by the Warrantholder or by its duly authorized attorney, at the office of the Company, 6490 S. McCarran, Suite D-30, Reno, Nevada 89509, Attention: President, or at such other office or agency as the Company may designate. The date on which such instructions are received by the Company shall be the date of exercise. If the Warrantholder has elected a Cashless Exercise, such instructions shall so state. Upon receipt of notice of exercise, the Company shall immediately instruct its transfer agent to prepare certificates for the Shares to be received by the Warrantholder upon completion of the Warrant exercise. When such certificates are prepared, the Company shall notify the Warrantholder and deliver such certificates to the Warrantholder or in accordance with the Warrantholder's instructions immediately upon payment in full by the Warrantholder, in lawful money of the United States, of the Exercise Price payable with respect to the Shares being purchased, if any. If the Warrantholder shall provide the Company with an opinion of counsel to the effect that such legend is not required, such certificates shall not bear a legend with respect to the Securities Act. The number and amount of Shares purchasable under the Warrant shall be fixed upon the first exercise of the Warrant. By way of example only, if the Warrantholder exercised the Warrant, but chose not to exercise the entire Warrant, the maximum number of Shares purchasable under the Warrant shall be fixed upon the date of first exercise. If fewer than all the Shares purchasable under the Warrant are purchased, the Company will, upon such partial exercise, execute and deliver to the Warrantholder a new Warrant Certificate (dated the date hereof), in form and tenor similar to this Warrant Certificate, evidencing that portion of the Warrant not exercised by fixing the number of Shares purchasable. The Shares to be obtained on exercise of the Warrant will be deemed to have been issued, and any person exercising the Warrants will be deemed to have become a holder of record of those Shares, as of the date of the payment of the Exercise Price. By way of example only, in the event Warrantholder converts the Note into Common Stock, and after such conversion holds 1,000,000 shares of Common Stock, and the number of the fully diluted shares of Common Stock outstanding at the time of exercise, not including the Shares issuable upon exercise of this Warrant, was 100,000,000, this Warrant shall be exercisable for 24,000,000 shares of Common Stock at the Exercise Price. If Warrantholder exercised a portion of the Warrant in an amount equal to 5,000,000 shares of Common Stock, the Company would issue a new Warrant Certificate (dated the date hereof) exercisable for 19,000,000 shares. 4. Adjustments in Certain Events. The number, class, and price of the Shares for which this Warrant is exercisable are subject to adjustment from time to time upon the happening of certain events as follows: (a) If the outstanding shares of the Company's Common Stock are divided into a greater number of shares or a dividend in stock is paid on the Common Stock, the number of Shares for which the Warrant is then exercisable will be proportionately increased and the Exercise Price will be proportionately reduced; and, conversely, if the outstanding shares of Common Stock are combined into a smaller number of shares of Common Stock, the number of Shares for which the Warrant is then exercisable will be 4 proportionately reduced and the Exercise Price will be proportionately increased. The increases and reductions provided for in this subsection 4(a) will be made with the intent and, as nearly as practicable, the effect that neither the percentage of the total equity of the Company obtainable on exercise of the Warrants nor the price payable for such percentage upon such exercise will be affected by any event described in this subsection 4(a). (b) In case of any change in the Common Stock through merger, consolidation, reclassification, reorganization, partial or complete liquidation, purchase of substantially all the assets of the Company, or other change in the capital structure of the Company, then, as a condition of such change, lawful and adequate provision will be made so that the holder of this Warrant Certificate will have the right thereafter to receive upon the exercise of the Warrant the kind and amount of shares of stock or other securities or property to which he would have been entitled if, immediately prior to such event, he had held the number of Shares obtainable upon the exercise of the Warrant. In any such case, appropriate adjustment will be made in the application of the provisions set forth herein with respect to the rights and interest thereafter of the Warrantholder, to the end that the provisions set forth herein will thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of the Warrant. The Company will not permit any change in its capital structure to occur unless the issuer of the shares of stock or other securities to be received by the holder of this Warrant Certificate, if not the Company, agrees to be bound by and comply with the provisions of this Warrant Certificate. (c) In the event the Company shall issue Additional Shares of Common Stock without consideration or for a consideration per share less than Exercise Price on the day of such issuance, the Exercise Price shall be reduced, concurrently with such issue, to a price determined by multiplying the Exercise Price in effect immediately prior to such issuance by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the Company for the total number of Additional Shares of Common Stock so issued would purchase at the Exercise Price in effect immediately prior to such issuance; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common Stock so issued; provided that, for the purposes of this subsection, the number of shares of Common Stock outstanding immediately prior to such issue shall be calculated on a fully diluted basis, as if all convertible securities had been fully converted into shares of Common Stock and any outstanding warrants, options or other rights for the purchase of shares of stock or convertible securities had been fully exercised (and the resulting securities fully converted into shares of Common Stock, if so convertible) as of such date. (d) When any adjustment is required to be made in the number of Shares or other securities or property purchasable upon exercise of the Warrant, the Company will promptly determine the new number of such Shares or other securities or property purchasable upon exercise of the Warrant and (i) prepare and retain on file a statement 5 describing in reasonable detail the method used in arriving at the new number of such Shares or other securities or property purchasable upon exercise of the Warrant and (ii) cause a copy of such statement to be mailed to the Warrantholder within thirty (30) days after the date of the event giving rise to the adjustment. (e) No fractional shares of Common Stock or other securities will be issued in connection with the exercise of the Warrant, but the Company will pay, in lieu of fractional shares, a cash payment therefor on the basis of the mean between the bid and asked prices of the Common Stock in the over-the-counter market or the closing price on a national securities exchange on the day immediately prior to exercise. (f) If securities of the Company or securities of any subsidiary of the Company are distributed pro rata to holders of Common Stock, such number of such securities will be distributed to the Warrantholder or his assignee upon exercise of this Warrant as the Warrantholder or assignee would have been entitled to if the portion of the Warrant evidenced by this Warrant Certificate had been exercised prior to the record date for such distribution. The provisions with respect to adjustment of the Common Stock provided in this Section 4 will also apply to the securities to which the Warrantholder or his assignee is entitled under this subsection 4(f). (g) Notwithstanding anything herein to the contrary, there will be no adjustment made hereunder on account of the sale of the Shares or other Securities purchasable upon exercise of the Warrant. 5. Reservation of Shares. The Company agrees that the number of shares of Common Stock or other Shares sufficient to provide for the exercise of the Warrant upon the basis set forth above will at all times during the term of the Warrant be reserved for exercise. 6. Validity of Shares. All Shares delivered upon the exercise of the Warrant will be duly and validly issued in accordance with their terms, and, in the case of capital stock, will, when issued and delivered in accordance with their terms against payment therefor as provided in the Warrant, be fully paid and nonassessable, and the Company will pay all documentary and transfer taxes, if any, in respect of the original issuance thereof upon exercise of the Warrant. 7. Transfer. This Warrant may be sold, transferred, assigned or hypothecated by Warrantholder, subject to applicable securities laws. The Warrant may be divided or combined, upon request to the Company by the Warrantholder, into a certificate or certificates evidencing the same aggregate number of Warrants. 8. No Rights as a Stockholder. Except as otherwise provided herein, the Warrantholder will not, by virtue of ownership of the Warrant, be entitled to any rights of a stockholder of the Company but will, upon written request to the Company, be entitled to receive such quarterly or annual reports as the Company distributes to its shareholders. 6 9. Notice. Any notices required or permitted to be given under the terms of this Warrant must be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and will be effective five days after being placed in the mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally, by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications are: If to the Company: HomeSeekers.com, Incorporated HomeSeekers.com, Incorporated 6490 S. McCarran, Suite D-30 Reno, Nevada 89509 Attn: President Telephone: (775) 824-8054 Facsimile: (775) 824-8050 If to Warrantholder: Fidelity National Financial, Inc. 4050 Calle Real Santa Barbara, California 93110 Telephone: (805) 696-7000 Facsimile: (805) 696-7809 Attn: General Counsel Each party will provide written notice to the other parties of any change in its address. 10. Applicable Law. This Warrant will be governed by and construed in accordance with the laws of the State of California, without reference to conflict of laws principles thereunder. [signature page to follow] 7 Dated as of October 25, 2001 HOMESEEKERS.COM, INCORPORATED. By: /s/ Thomas A. Chaffee, Jr. Its: Sole Director/Acting CEO 8 EX-99.4 6 a77365ex99-4.txt EXHIBIT 99.4 EXHIBIT 99.4 SECURITY AGREEMENT THIS SECURITY AGREEMENT, dated as of October 25, 2001 (the "Agreement"), is entered into by and between HOMESEEKERS.COM, INCORPORATED a Nevada corporation (the "Grantor") and FIDELITY NATIONAL FINANCIAL, INC., a Delaware corporation (the "Secured Party"), pursuant to the terms of that certain Credit Agreement, dated as of even date herewith (as modified, supplemented or amended from time to time, the "Credit Agreement"), by and between the Grantor and the Secured Party. Unless the context indicates otherwise, capitalized terms used herein without definition shall have the meanings given them in the Credit Agreement. W I T N E S S E T H: WHEREAS, the Grantor desires to incur Loans under the Credit Agreement; WHEREAS, it is a condition precedent to the incurrence of Loans under the Credit Agreement that the Grantor shall have executed and delivered to the Secured Party this Agreement; WHEREAS, the Grantor desires to execute this Agreement to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the benefits to the Grantor, the receipt and sufficiency of which are hereby acknowledged, the Grantor hereby makes the following representations and warranties to the Secured Party and hereby covenants and agrees with the Secured Party as follows. ARTICLE I SECURITY INTERESTS 1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its obligations under the Credit Agreement (the "Obligations"), the Grantor does hereby grant to the Secured Party a continuing security interest of first priority in, all of the right, title and interest of the Grantor in, whether now existing or hereafter from time to time acquired, all of the assets of Borrower currently owned or acquired hereafter, including, but not limited to all accounts, chattel paper, the commercial tort claims identified in Exhibit A, deposit accounts, documents, equipment, general intangibles, goods, instruments, investment property, letter of credit rights, letters of credit, money and any proceeds (including insurance proceeds) or income derived from the disposition of any assets of the Grantor (all of the above, collectively, the "Collateral"). (b) The security interest of the Secured Party under this Agreement extends to all Collateral of the kind described in preceding clause (a) which the Grantor may acquire at any time during the continuation of this Agreement. 1.2 Power of Attorney. The Grantor hereby constitutes and appoints the Secured Party its true and lawful attorney, irrevocably, with full power upon the occurrence of an Event of Default (in the name of the Grantor or otherwise) and the continuance thereof beyond any applicable grace period to act, require, demand, receive, compound and give acquittance for any and all monies and claims for monies due or to become due to the Grantor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Secured Party may deem to be necessary or advisable in the premises, which appointment as attorney is coupled with an interest. ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS The Grantor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows: 2.1 Necessary Filings. All filings, registrations and recordings (including the recordation of the security interest granted hereunder in Patents and Trademarks (both as defined below) in the applicable patent or trademark registries) necessary or appropriate to create, preserve, protect and perfect the security interest granted by the Grantor to the Secured Party hereby in respect of the Collateral have been accomplished (or will be accomplished upon the appropriate filings) and the security interest granted to the Secured Party pursuant to this Agreement in and to the Collateral constitutes a valid and enforceable perfected security interest therein superior and prior to the rights of all other persons therein and subject to no other Liens and is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfected security interests. 2.2 No Liens. The Grantor is, and as to Collateral acquired by it from time to time after the date hereof the Grantor will be, the owner of all Collateral free from any Lien or other right, title or interest of any Person (other than Liens created hereby), and the Grantor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Secured Party. 2.3 Other Financing Statements. There is no financing statement (or similar statement or instrument of registration, including patent or trademark registrations, under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral and so long as the Loan Agreement has not been terminated or any of the Obligations remain unpaid, the Grantor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration, including patent or trademark registrations, under the law of any jurisdiction) or statements relating to the Collateral, except financing statements, including patent or trademark registrations, filed or to be filed in respect of and covering the security interests granted hereby by the Grantor. 2.4 Chief Executive Office; Records. The chief executive office of the Grantor is located at 6490 S. McCarran, Suite D-30, Reno, Nevada 89509. The Grantor shall not establish a new location for such offices until (i) it shall have given to the Secured Party not less than 45 days' prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Secured Party may reasonably request, and (ii) with respect to such new location, it shall have taken all action, satisfactory to the Secured Party, to maintain the security interest of the Secured Party in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2 2.5 Location of Collateral. The Grantor agrees that all tangible Collateral now held or subsequently acquired by it shall be kept at (or shall be in transport to) its chief executive offices as identified in Section 2.4 above. The Grantor may establish a new location for the tangible Collateral only if (i) it shall have given to the Secured Party prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Secured Party may reasonably request, and (ii) with respect to such new location, it shall have taken all action reasonably satisfactory to the Secured Party to maintain the security interest of the Secured Party in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2.6 Recourse. This Agreement is made with full recourse to the Grantor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of the Grantor contained herein, in the Loan Agreement and otherwise in writing in connection herewith or therewith. ARTICLE III SPECIAL PROVISIONS CONCERNING TRADEMARKS 3.1 Additional Representations and Warranties. The Grantor represents and warrants that it is the true and lawful exclusive owner of the trademarks listed in Exhibit B (the "Marks") and that the Marks constitute all the trademarks registered in the United States Patent and Trademark Office and all foreign trademark registries that the Grantor now owns or uses in connection with its business. The Grantor represents and warrants that it owns or is licensed to use all the Marks. The Grantor further warrants that it is aware of no third party claim that any aspect of the Grantor's present or contemplated business operations infringes or will infringe any trademark. 3.2 Future Registered Marks. If any mark registration issues hereafter to the Grantor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or an applicable foreign registry, within 30 days of receipt of such certificate the Grantor shall deliver a copy of such certificate, and a grant of security in such mark, to the Secured Party, confirming the grant thereof hereunder, the form of such confirmatory grant to be substantially the same as the form hereof. 3.3 Remedies. If an Event of Default shall occur and be continuing, the Secured Party may, by written notice to the Grantor, take any or all of the following actions: (i) declare the entire right, title and interest of the Grantor in and to each of the Marks, together with all trademark rights and rights of protection to the same, vested, in which event such rights, title and interest shall immediately vest, in the Secured Party, in which case the Grantor agrees to execute an assignment in form and substance satisfactory to the Secured Party of all its rights, title and interest in and to the Marks to the Secured Party; (ii) take and use or sell the Marks and the goodwill of the Grantor's business symbolized by the Marks and the right to carry on the business and use the assets of the Grantor in connection with which the Marks have been used; and (iii) direct the Grantor to refrain, in which event the Grantor shall refrain, from using the Marks in any manner whatsoever, directly or indirectly, and, if requested by the Secured Party, change the Grantor's corporate name to eliminate therefrom any use of any Mark and execute such other and further documents that the Secured Party may request to further confirm this and to transfer ownership of the Marks and registrations and any pending trademark application in the United States Patent and Trademark Office or applicable foreign trademark registry to the Secured Party. 3 ARTICLE IV SPECIAL PROVISIONS CONCERNING PATENTS AND COPYRIGHTS 4.1 Additional Representations and Warranties. The Grantor represents and warrants that it is the true and lawful exclusive owner of all rights in the Patents listed in Exhibit C and in the Copyrights listed in Exhibit D, that said Patents constitute all the U.S. patents and applications for U.S. patents that the Grantor now owns and that said Copyrights constitute all the U.S. copyrights that the Grantor now owns. The Grantor represents and warrants that it owns or is licensed to practice under all Patents and Copyrights that it now owns, uses or practices under. The Grantor further warrants that it is aware of no third party claim that any aspect of the Grantor's present or contemplated business operations infringes or will infringe any Patent or any Copyright. 4.2 Licenses and Assignments. The Grantor hereby agrees not to divest itself of any right under a Patent or Copyright absent prior written approval of the Secured Party. 4.3 Infringements. The Grantor agrees, promptly upon learning thereof, to furnish the Secured Party in writing with all pertinent information available to the Grantor with respect to any infringement or other violation of the Grantor's rights in any significant Patent or Copyright, or with respect to any claim that practice of any significant Patent or copyright violates any property right of that party. The Grantor further agrees, absent direction of the Secured Party to the contrary, diligently to prosecute any Person infringing any significant Patent or Copyright. 4.4 Maintenance of Patents. At its own expense, the Grantor shall make timely payment of all post-issuance fees required pursuant to 35 U.S.C. Section 41 to maintain in force rights under each Patent. 4.5 Prosecution of Patent Application. At its own expense, the Grantor shall diligently prosecute all applications for U.S. patents listed on Exhibit C, and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies, absent written consent of the Secured Party. 4.6 Other Patents and Copyrights. Within 30 days of acquisition of a U.S. Patent or Copyright, or of filing of an application for a U.S. Patent or Copyright, the Grantor shall deliver to the Secured Party a copy of said Patent or Copyright, as the case may be, with a grant of security as to such Patent or Copyright, as the case may be, confirming the grant thereof hereunder, the form of such confirmatory grant to be substantially the same as the form hereof. 4.7 Remedies. If an Event of Default shall occur and be continuing, the Secured Party may, by written notice to the Grantor, take any or all of the following actions: (i) declare the entire right, title and interest of the Grantor in each of the Patents and Copy rights vested, in which event such right, title and interest shall immediately vest in the Secured Party, in which case the Grantor agrees to execute an assignment in form and substance satisfactory to the Grantor of all its right, title and interest to such Patents and Copyrights to the Secured Party; (ii) take and practice or sell the Patents and Copyrights; (iii) direct the Grantor to refrain, in which event the Grantor shall refrain, from practicing the Patents and Copyrights directly or indirectly, and the Grantor shall execute such other and further documents as the Secured Party may request further to confirm this and to transfer ownership of the Patents and Copyrights to the Secured Party. 4 ARTICLE V PROVISIONS CONCERNING ALL COLLATERAL 5.1 Protection of Security Interest. The Grantor will do nothing to impair the rights of the Secured Party in the Collateral. The Grantor shall not sell, convey or otherwise transfer all or any part of the Collateral or any rights therein. The Grantor will at all times keep the Collateral insured in favor of the Secured Party, at its own expense, to the Secured Party's reasonable satisfaction against fire, theft and all other risks to which such Collateral may be subject; all policies or certificates with respect to such insurance shall be endorsed to the Secured Party's satisfaction for the benefit of the Secured Party (including, without limitation, by naming the Secured Party as loss payee) and deposited with the Secured Party. If the Grantor shall fail to insure the Collateral to the Secured Party's reasonable satisfaction, or if the Grantor shall fail to so endorse and deposit all policies or certificates with respect thereto, the Secured Party shall have the right (but shall be under no obligation) to procure such insurance and the Grantor agrees to reimburse the Secured Party for all costs and expenses of procuring such insurance. The Secured Party may apply any proceeds of such insurance when received by it toward the payment of any of the Obligations to the extent the same shall then be due. The Grantor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of the Grantor to pay its Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to the Grantor. 5.2 Further Actions. The Grantor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Secured Party from time to time such lists, descriptions and designations of its Collateral, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Secured Party deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral. 5.3 Financing Statements. The Grantor agrees to execute and deliver to the Secured Party such financing statements, including recordations in the applicable Patent and Mark registries, in form acceptable to the Secured Party, as the Secured Party may from time to time reasonably request or as are necessary or desirable in the opinion of the Secured Party to establish and maintain a valid, enforceable, first priority security interest in the Collateral as provided herein and the other rights and security contemplated herein, all in accordance with the UCC as enacted in any and all relevant jurisdictions or any other relevant law. The Grantor will pay any applicable filing fees and related expenses. The Grantor hereby authorizes the Secured Party to file any such financing statements or recordations without the signature of the Grantor. 5 ARTICLE VI REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT 6.1 Remedies; Obtaining the Collateral Upon Default. The Grantor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, subject to any mandatory requirements of applicable law then in effect, the Secured Party, in addition to any rights now or hereafter existing under applicable law, shall have all rights as a secured creditor under the UCC in all relevant jurisdictions and may: (a) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from the Grantor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon the Grantor's premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of the Grantor; (b) instruct the obligor or obligors on any agreement, instrument or other obligation constituting the Collateral to render any performance required by the terms of such instrument or agreement directly to the Secured Party; (c) sell, assign or otherwise liquidate, or direct the Grantor to sell, assign or otherwise liquidate, any or all of the Collateral or any part thereof, and take possession of the proceeds of any such sale or liquidation; and (d) take possession of the Collateral or any part thereof, by directing the Grantor in writing to deliver the same to the Secured Party at any place or places designated by the Secured Party, in which event the Grantor shall at its own expense: (i) promptly cause the same to be moved to the place or places so designated by the Secured Party and there be delivered to the Secured Party, (ii) store and keep any Collateral so delivered to the Secured Party at such place or places pending further action by the Secured Party as provided in Section 6.2, and (iii) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition; it being understood that the Grantor's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Secured Party shall be entitled to a decree requiring specific performance by the Grantor of said obligation. 6.2 Remedies; Disposition of the Collateral. Any Collateral repossessed by the Secured Party under or pursuant to Section 6.1, and any other Collateral whether or not so repossessed by the Secured Party, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the 6 Secured Party may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Secured Party or after any overhaul or repair which the Secured Party shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceeding permitted by such requirements shall be made upon not less than 10 days' prior written notice to the Grantor specifying the time at which such disposition is to be made and the intended sale price or other consideration therefor, and shall be subject, for the 10 days after the giving of such notice, to the right of the Grantor or any nominee of the Grantor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than 10 days' prior written notice to the Grantor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Secured Party's option, be subject to reserve), after publication of notice of such auction not less than 10 days prior thereto in two newspapers in general circulation in Southern California. To the extent permitted by any such requirement of law, the Secured Party may bid for and become the purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section 6.2 without accountability to the Grantor (except to the extent of surplus money received as provided in Section 6.4). If, under mandatory requirements of applicable law, the Secured Party shall be required to make disposition of the Collateral within a period of time which does not permit the giving of notice to the Grantor as hereinabove specified, the Secured Party need give the Grantor only such notice of disposition as shall be reasonably practicable in view of such mandatory requirements of applicable law. 6.3 Waiver of Claims. Except as otherwise provided in this Agreement, THE GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE SECURED PARTY'S TAKING POSSESSION OR THE SECURED PARTY'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH GRANTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and the Grantor hereby further waives, to the extent permitted by law: (a) all damages occasioned by such taking of possession except any damages which are the direct result of the Secured Party's gross negligence or willful misconduct; (b) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Secured Party's rights hereunder; and (c) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and the Grantor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws. Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the Grantor therein and thereto, and shall be a perpetual bar both at law and in equity against the Grantor and 7 against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under the Grantor. 6.4 Application of Proceeds. The proceeds of any Collateral obtained pursuant to Section 6.1 or disposed of pursuant to Section 6.2 shall be applied as follows: (a) to the payment of any and all expenses and fees (including reasonable attorneys' fees) incurred by the Secured Party in obtaining, taking possession of, removing, insuring, repairing, storing and disposing of Collateral and any and all amounts incurred by the Secured Party in connection therewith; (b) next, any surplus then remaining to the payment of the Obligations in the following order of priority: (i) all interest accrued and unpaid; (ii) the principal amount owing on the Loans; and (iii) all other Obligations then owing; (c) if the Commitment is then terminated and no other Obligation is outstanding, any surplus then remaining shall be paid to the Grantor, subject, however, to the rights of the holder of any then existing Lien of which the Secured Party has actual notice (without investigation); provided, that Secured Party shall give written notice to Grantor of such third party Lien; it being understood that the Grantor shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the sums referred to in clauses (a) and (b) of this Section 6.4 with respect to the Grantor. 6.5 Remedies Cumulative. No failure or delay on the part of the Secured Party in exercising any right, power or privilege hereunder or under any other Loan Document and no course of dealing between the Grantor and the Secured Party shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Loan Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Secured Party would otherwise have. No notice to or demand on the Grantor in any case shall entitle the Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Secured Party to any other or further action in any circumstances without notice or demand. 6.6 Discontinuance of Proceedings. In case the Secured Party shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Secured Party, then and in every such case the Grantor, the Secured Party and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Secured Party shall continue as if no such proceeding had been instituted. 8 ARTICLE VII INDEMNITY 7.1 Indemnity. (a) The Grantor agrees to indemnify, reimburse and hold the Secured Party and its officers, directors, employees, representatives and agents (hereinafter in this Section 7.1 referred to individually as "Indemnitee" and collectively as "Indemnitees") harmless from any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements (including reasonable attorneys' fees and expenses) (for the purposes of this Section 7.1 the foregoing are collectively called "expenses") of whatsoever kind or nature which may be imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Loan Document or the documents executed in connection herewith and therewith or in any other way connected with the administration of the transactions contemplated hereby and thereby or the enforcement of any of the terms of or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any person (including any Indemnitee), or for property damage) or any contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 7.1(a) for expenses to the extent caused by the gross negligence or willful misconduct of such Indemnitee. The Grantor agrees that upon written notice by any Indemnitee of any assertion that could give rise to an expense, the Grantor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the Grantor of any such assertion of which such Indemnitee has knowledge. (b) Without limiting the application of Section 7.1(a), the Grantor agrees to pay, or reimburse the Secured Party for (if the Secured Party shall have incurred fees, costs or expenses because the Grantor shall have failed to comply with its obligations under this Agreement or any other Loan Document), any and all fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Secured Party's Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Secured Party's interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. (c) Without limiting the application of Section 7.1(a) or (b), the Grantor agrees to pay, indemnify and hold each Indemnitee harmless from and against any expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by the Grantor in this Agreement or any of the other Loan Documents or in any statement or writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any of the other Loan Documents. 9 (d) If and to the extent that the obligations of the Grantor under this Section 7.1 are unenforceable for any reason, Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 7.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute obligations secured by the Collateral. The indemnity obligations of the Grantor contained in this Article VII shall continue in full force and effect notwithstanding the full payment of all the Note and all of the other Obligations and notwithstanding the discharge thereof. ARTICLE VIII MISCELLANEOUS 8.1 Notices. All notices and other communications hereunder shall be made at the addresses, in the manner and with the effect provided in Section 8.2 of the Loan Agreement. 8.2 Waiver; Amendment. This Agreement may be charged, waived, discharged, or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. 8.3 Obligations Absolute. The obligations of the Grantor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from, any of the Loan Documents or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such instrument or agreement or this Agreement or any exercise or non-exercise of any right, remedy, power or privilege under or in respect of this Agreement or any other Loan Document; (c) any furnishing of any additional security to the Secured Party or any acceptance thereof or any sale, exchange, release, surrender or realization of or upon any security by the Secured Party; or (d) any invalidity, irregularity or unenforceability of all or part of the Obligations or of any security therefor. 8.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, that (a) the Grantor may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Secured Party, and (b) prior to the occurrence of an Event of Default and the continuance thereof beyond any applicable grace period, the Secured Party may not assign or transfer any of its rights or obligations hereunder without the prior written consent of the Grantor; provided, further, however, that the Secured Party may at any time transfer or assign any of its rights under the Loan Documents to an Affiliate. 8.5 Headings Descriptive, etc. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. The provisions of Section 1.2 of the Loan Agreement shall apply to this Agreement as if the reference therein to "Agreement" were to this Agreement. 10 8.6 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of California. 8.7 Grantor's Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that the Grantor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Secured Party shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Secured Party be required or obligated in any manner to perform or fulfill any of the obligations of the Grantor under or with respect to any Collateral. 8.8 Termination; Release. After the termination of the Loan Agreement, and when all Obligations have been paid in full, this Agreement shall terminate, and the Secured Party, at the request and expense of the Grantor, will execute and deliver to the Grantor the proper instruments (including UCC termination statements) acknowledging the termination of this Agreement, and will duly assign, transfer and deliver to the Grantor (without recourse and without any representation or warranty) such of the Collateral as may be in possession of the Secured Party and has not theretofore been sold or otherwise applied or released pursuant to this Agreement. 8.9 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. Address: HOMESEEKERS.COM, INCORPORATED 6490 S. McCarran, Suite D-30 Reno, Nevada 89509 By: /s/ Thomas A. Chaffee, Jr. Title: Sole Director/Acting CEO Address: FIDELITY NATIONAL FINANCIAL, INC. 4050 Calle Real Santa Barbara, California 93110 By: /s/ Marlan Walker Title: Executive Vice President 11 EXHIBIT A COMMERCIAL TORT CLAIMS Exhibit B MARKS Exhibit C PATENTS Exhibit D COPYRIGHTS EX-99.5 7 a77365ex99-5.txt EXHIBIT 99.5 EXHIBIT 99.5 EXECUTION COPY ASSET PURCHASE AGREEMENT BETWEEN FIDELITY NATIONAL INFORMATION SOLUTIONS, INC., AND HOMESEEKERS.COM, INC. Dated as of October 25, 2001 THIS ASSET PURCHASE AGREEMENT, is made and entered into as of October 25, 2001, by and between Fidelity National Information Solutions, Inc., a Delaware corporation ("Buyer"), and HomeSeekers.com, Inc., a Nevada corporation ("Seller"). R E C I T A L S: A. Seller is engaged in the business of providing certain services to the real estate industry. One of those businesses, referred by Seller as XMLSweb(TM), which is the subject of this Agreement (hereinafter, the "Business"), is an Intranet MLS System that provides an efficient, cost-effective method for MLS Organizations and Realtor Associations to implement a customized agent-access Intranet System. The products of the Business are designed to provide the agent more efficient electronic access to MLS data by providing flexible and cost-effective, web based alternatives to existing systems that an MLS may be using. B. Buyer wishes to acquire from Seller, and Seller wishes to sell, assign and transfer to Buyer, substantially all of the assets of the Business, including Seller's corporate and trade names and goodwill associated with the Business, all for the purchase price and upon the terms and subject to the conditions hereinafter set forth. C. Seller wishes to provide certain representations and warranties hereunder. D. Capitalized terms used herein without separate definition have the meanings given to such terms in Section 1.1. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties made herein and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS Section 1.1 Definition of Certain Terms. The terms defined in this Section 1.1, whenever used in this Agreement, shall have the respective meanings indicated below for all purposes of this Agreement. "Accounts Receivable": has the meaning set forth in Section 2.1(a). "Additional Consideration": has the meaning set forth in Section 3.2. "Affiliate": of a specified Person means a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person or a member of such specified Person's immediate family. "Control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. 1 "Agreement": means this Asset Purchase Agreement, as the same from time to time may be amended, supplemented or waived. "Assets": has the meaning set forth in Section 2.1. "Assumed Contracts": has the meaning set forth in Section 2.1(e). "Assumed Liabilities": has the meaning set forth in Section 3.4. "Books and Records": means all books and records, including manuals, price lists, mailing lists, lists of customers, sales and promotional materials, purchasing materials, personnel records, accounting records, tax records and litigation files (regardless of the media in which stored), in each case primarily relating to or primarily used in the Business and relating to the Assets. "Buyer Indemnitees": has the meaning set forth in Section 9.1. "Business": has the meaning set forth in Recital A. "Cash": means any and all cash and cash equivalents and similar type investments, such as certificates of deposit, treasury bills and other marketable securities. "Closing": has the meaning set forth in Section 3.1. "Closing Consideration": has the meaning set forth in Section 3.2. "Closing Date": has the meaning set forth in Section 3.1. "Code": means the Internal Revenue Code of 1986, as amended. "Competitive Products and Services": has the meaning set forth in Section 6.1.8. "Confidentiality Agreement": means that certain Mutual Confidentiality and Non-Disclosure Agreement executed by Seller and Buyer on October __, 2001. "Consent": means any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority. "Contracts": has the meaning set forth in Section 4.12(a). "Deposit": has the meaning set forth in section 3.2. "Employee Benefit Plan": means each "employee benefit plan" of Seller, as such term is defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, and (ii) is maintained or contributed to by Seller. 2 "Employee Plan": means each "employee benefit plan" of Buyer, as such term is defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, and (ii) is maintained or contributed to by Buyer. "Environmental Laws": means any and all Laws relating to the protection of the environment, to human health and safety, or to any emission, discharge, generation, processing, storage, holding, abatement, existence, Release, threatened Release, arranging for the disposal or transportation of any Hazardous Substances. "Environmental Liabilities and Costs": means any and all Losses imposed by, under or pursuant to Environmental Laws, based on, arising out of or otherwise in respect of (i) the ownership or operation of the Business or any real property owned, leased or operated by Seller, or (ii) the environmental conditions existing on the Closing Date on, under, above, or about any real property owned, leased or operated by the Business or Seller. "ERISA": means the Employee Retirement Income Security Act of 1974, as amended. "Excluded Assets": has the meaning set forth in Section 2.2. "Excluded Liabilities": has the meaning set forth in Section 3.5. "FF&E": has the meaning set forth in Section 2.1(b). "Financial Statements": has the meaning set forth in Section 4.4. "FNF Secured Loans": means (i) that certain Secured Promissory Note dated October 23, 2001, pursuant to which Fidelity National Financial, Inc. loaned Seller $400,000 to fund a payroll amount due and payable on October 23, 2001; and (ii) that certain Revolving Credit Agreement and Security Agreement of even date herewith pursuant to which FNF has agreed to make available and Seller has agreed to borrow certain revolving advances in an aggregate principal amount not to exceed $4,000,000, to allow the Borrower, among other things, to pay off and cancel the Homemark Secured Loans. "GAAP": means United States generally accepted accounting principles. "Governmental Approval": means any Consent of, with or to any Governmental Authority. "Governmental Authority": means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision thereof), or any tribunal or arbitrator(s) of competent jurisdiction, or any self-regulatory organization. "Hazardous Substance": means any substance that: (i) requires investigation, removal or remediation under any Environmental Law, or is defined, listed or identified as a "hazardous waste" or "hazardous substance" thereunder; or (ii) is toxic, explosive, 3 corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any Governmental Authority or Environmental Law. "Homemark Secured Loans": means (i) that certain Securities Purchase Agreement between Seller and E-Home.com, Inc. d/b/a Homemark ("Homemark") dated as of June 6, 2001 (the "Homemark Securities Purchase Agreement"), wherein Homemark agreed to lend and Seller agreed to borrow up to $2,000,000; (ii) that certain Loan Agreement dated as of June 6, 2001 (the "Homemark Loan Agreement"), wherein Homemark agreed to lend and Seller agreed to borrow $1,000,000; (iii) that certain Security Agreement and Financing Statement dated as of June 6, 2001, wherein Seller granted to Homemark security interests in certain of its assets; that certain Promissory Note dated June 6, 2001, pursuant to which Homemark loaned to Seller $500,000; (iv) the advance by Homemark to Seller on or around June 19, 2001, pursuant to the Homemark Loan Agreement, of an additional $500,000; and (v) the additional advances by Homemark to Seller, subsequent to June 19, 2001, in the approximate aggregate amount of $1,000,000. "Indemnified Party": has the meaning set forth in Section 9.3. "Indemnifying Party": has the meaning set forth in Section 9.3. "Intellectual Property": means: (i) any and all trademarks, service marks, brand names, certification marks, trade dress, assumed names, trade names, logos and other indications of origin, sponsorship or affiliation, together with the goodwill associated therewith (whether the foregoing are registered or unregistered); and registrations thereof in any jurisdiction and applications to register any of the foregoing in any jurisdiction, and any extension, modification or renewal of any such registration or application; (ii) any and all inventions, developments, improvements, discoveries, know how, concepts and ideas, whether patentable or not in any jurisdiction; (iii) any and all patents, revalidations, industrial designs, industrial models and utility models, patent applications (including reissues, continuations, divisions, continuations-in-part and extensions) and patent disclosures; (iv) any and all mask works and other semiconductor chip rights and registrations thereof; (v) any and all trade secrets and proprietary or confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person; (vi) any and all writings and other works, whether copyrighted, copyrightable or not in any jurisdiction, including computer programs and software (including source code, object code, data and databases); (vii) any and all copyrights, copyright registrations and applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; and (viii) any and all other intellectual property or proprietary rights. "IRS": means the Internal Revenue Service. "Law": means any and all provisions of any and all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Authority, and (ii) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority. "Lien": means any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, 4 voting trust agreement, interest, equity, option, lien, right of first refusal, charge or other restriction or limitation, including, without limitation, any Lien under the FNF Secured Loans or the Homemark Secured Loans. "Logo": means any symbol or logo incorporating a Name. "Losses": has the meaning set forth in Section 9.1. "Material Adverse Effect": means any event, circumstance, occurrence, fact, condition, change or effect that is materially adverse to the business, operations, results of operations, financial condition, prospects, properties, assets or liabilities of the Business taken as a whole. "Name": means any name, mark, trade name, trademark, service name or service mark. "Other Inventories": has the meaning set forth in Section 2.1(c). "Person": means any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business trust, Governmental Authority or other entity. "Purchase Price": has the meaning set forth in Section 3.2. "Release": means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal, migration, transporting, placing and the like, including the moving of any materials through, into or upon, any land, soil, surface water, ground water or air, or otherwise entering into the environment. "Software Development Agreement": has the meaning set forth in Section 7.2.10. "Specifications": has the meaning set forth in Section 7.2.10. "Subsidiaries": means each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing at least 50 percent of the outstanding voting stock or other equity interests. "Taxes": means any federal, state, provincial, local or foreign income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers' compensation, payroll, health care, withholding, estimated or other similar tax, duty or other governmental charge or assessment or deficiencies thereof, and including any interest, penalties or additions to tax attributable to the foregoing. 5 "Tax Returns": means any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof or supplement thereto. "Transferred Employee": has the meaning set forth in Section 6.2.5. "Version 8 Software": has the meaning set forth in Section 3.2. Section 1.2 Construction. All references herein to a Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or Schedule, unless otherwise indicated. ARTICLE 2 SALE AND PURCHASE OF THE ASSETS Section 2.1 Assets. Subject to and upon the terms and conditions set forth in this Agreement, at the Closing, Seller shall sell, transfer, set over, convey, assign and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all right, title and interest of Seller in and to all of Seller's assets and rights relating to the Business other than the Excluded Assets, as the same may exist on the Closing Date (collectively, the "Assets"), including, without limitation, the following assets and rights: (a) all accounts receivable, notes and drafts owing to Seller relating to the conduct of the Business ("Accounts Receivable"); (b) all furniture, fixtures, machinery, equipment and other tangible personal property (including work stations and data processing equipment) relating to or used in the Business (collectively, the "FF&E"); (c) all inventories of office and other supplies, spare parts and replacement and component parts related to the Business, whether on hand, in-transit or on order (collectively, the "Other Inventories"); (d) all rights in Intellectual Property used in the Business (including all Names and Logos incorporating "XMLSWeb" or any similar Name or Logo, alone or in any combination of words, and any combination, variation or derivation of any such Name or Logo or the domain name "XMLSWeb.com."), and the goodwill represented thereby and pertaining thereto; (e) all rights under the Contracts specifically listed on Schedule 2.1(e) by Buyer, in its sole discretion, prior to the Closing (the "Assumed Contracts") and no other Contracts or agreements of Seller; (f) all Books and Records, except as provided in Section 2.2(a); (g) all Governmental Approvals, including all applications therefor, to the extent transferrable; 6 (h) all rights to causes of action, lawsuits, claims and demands of any nature available to or being pursued by Seller with respect to the Business or the Assets; (i) all guarantees, warranties, indemnities and similar rights in favor of Seller with respect to the Business or the Assets; and (j) all computer hardware and software used in the Business, including all rights under licenses and other Intellectual Property, instruments or agreements relating thereto. Section 2.2 Excluded Assets. Seller shall retain and not transfer, and Buyer shall not purchase or acquire, or have any ownership claim or right in respect of, the following assets (collectively, the "Excluded Assets"): (a) All Cash of Seller; (b) all Books and Records that relate solely to Seller's businesses other than the Business or to corporate records, such as minute books, seals and similar items and all tax returns and financial statements and records of Seller; (c) all rights to causes of action, lawsuits, claims and demands of any nature available to or being pursued by Seller with respect to the Excluded Assets; (d) all refunds, credits, deposits, prepayments or overpayments with respect to Taxes paid or accrued by Seller; (e) all insurance policies; (f) all assets of any Employee Benefit Plan except to the extent otherwise agreed to herein; (g) all Names or Logos incorporating "HomeSeekers.com" or any similar Name or Logo, alone or in any combination of words, and any combination, variation or derivation of any such Name or Logo or the domain name "Homeseekers.com;" and (h) the IDXnet broker reciprocity product offering, including all computer hardware and software related solely thereto; but specifically not including any and all computer hardware, software, rights under licenses and other Intellectual Property, instruments or agreements also used in connection with XMLSWeb product offering (the "Shared Software"), it being expressly understood and agreed by Seller that all such Shared Software constitutes an Asset acquired by Buyer hereunder. Section 2.3 Joint Assets. Buyer and Seller acknowledge and agree that certain source code contained in software that comprises Assets is also used in connection with other products currently developed or being developed by Seller that are not part of the Business ("Shared Source Code"). Following the Closing, all such Shared Source Code shall be deemed jointly owned by Buyer and Seller and, subject to Section 6.1.8 below, may be used by Buyer or Seller for any lawful purpose. 7 ARTICLE 3 THE CLOSING Section 3.1 Place and Date. Subject to the fulfillment of the conditions specified in Article VII, any or all of which may be waived by the respective party or parties whose performance is conditioned upon satisfaction of such conditions, the purchase and sale of the Assets shall be consummated at a closing (the "Closing") to be held at the offices of Buyer located at 4050 Calle Real, Suite 200, Santa Barbara, California, on or around November 23, 2002, at 10:00 a.m., or on or at such other date, time or location as Buyer and Seller shall mutually agree (such date and time being herein referred to as the "Closing Date"). Section 3.2 Purchase Price. Subject to the terms and conditions set forth herein, in full consideration for the purchase of the Assets, Buyer shall pay to Seller (a) the cash sum of $1,000,000 within two (2) business days following the satisfaction of the conditions set forth in Sections 7.2.11, 7.2.12 and 7.2.14 below (the "Deposit"), (b) the cash sum of $1,000,000 on the Closing Date (the "Closing Consideration"), and (c) the possibility of an additional cash sum of $1,200,000 payable in accordance with the terms and conditions of the Software Development Agreement related to the development by Seller for the benefit of Buyer of Version 8 of its MLS software product offering in strict accordance with the Specifications (the "Version 8 Software") (the "Additional Consideration"). The Deposit, the Closing Consideration and the Additional Consideration, if any, is referred to herein as the "Purchase Price." The Purchase Price shall be made by direct wire transfer of immediately available funds to the account of Seller as designated by Seller. Upon the termination of this Agreement, regardless of the reason therefore, the Deposit shall automatically and without further action by the parties be converted into a loan payable by Seller to Buyer, with the entire principal amount becoming immediately due and payable on the date of such termination. If Seller fails to repay the Deposit when due, then the principal amount shall bear interest at the maximum rate allowed by law until such time as the entire principal and all accrued interest is paid in full. Section 3.3 Allocation of Purchase Price. The parties agree to allocate the Purchase Price among the Assets in accordance with Section 1060 of the Code as mutually agreed to by the parties within 180 days following the Closing Date; provided that the FF&E, the Other Inventories included in the Assets shall be allocated an amount equal to Seller's net book value for such Assets. All such mutually agreed to allocations shall be used by each party in preparing any filings required pursuant to Section 1060 of the Code or any similar provisions of state or local law and all relevant income and franchise tax returns. Neither Buyer nor Seller will take any position before any taxing authority or in any judicial proceeding that is inconsistent with such mutually agreed to allocations without the prior consent of the other party. The parties shall in good faith exercise reasonable efforts to support such reported allocations in any audit proceedings initiated by any taxing authority. Section 3.4 Assumption of Liabilities. Subject to the terms and conditions set forth herein, including, without limitation, Seller's indemnification obligations, at the Closing, Buyer shall assume and agree to pay, honor and discharge when due the following obligations of Seller (collectively, the "Assumed Liabilities"): 8 (a) all liabilities and obligations of related to the Assets arising on and after the Closing Date; and (b) all liabilities and obligations of Seller arising on and after the Closing Date under the Assumed Contracts. Section 3.5 Excluded Liabilities. Other than the Assumed Liabilities, Buyer shall not be responsible for any other debts, claims, commitments, liabilities or obligations of Seller or the Business (collectively, the "Excluded Liabilities"). Without limiting the generality of the foregoing and notwithstanding anything herein that may be to the contrary, Excluded Liabilities include any and all debts, claims, commitments, liabilities or obligations of Seller or the Business relating to or arising out of any of the following: (a) any indebtedness for borrowed money or any guarantees or similar obligations in respect of any indebtedness for borrowed money, including, without limitation, any and all liability, obligations and indebtedness arising under the FNF Secured Loans and the Homemark Secured Loans; (b) (i) any liability, obligation or commitment relating to or arising out of any Employee Benefit Plan, including any sponsorship, administration or contribution obligation of any Person under any Employee Benefit Plan or termination of any Employee Benefit Plan, or (ii) the employment or the termination of employment, on or prior to the Closing Date, of any employee of the Business by Seller; (c) any cause of action or judicial or administrative action, suit, proceeding or investigation, pending or threatened in writing as of the Closing Date, relating to periods on or prior to the Closing Date; (d) any failure or alleged failure by Seller to comply with, or any violation or alleged violation of, (i) any Law or Governmental Approval applicable to the Business or the Assets, or (ii) any Contract, which occurred or was alleged to have occurred prior to the Closing Date; (e) any infringement or alleged infringement of the rights of any other Person arising out of the use of any Intellectual Property in connection with the Business prior to the Closing Date; (f) any and all contingent liabilities arising out of the Business on or prior to the Closing Date; and any and all liabilities accruable under GAAP for the Business as of the Closing Date; (g) any liability for any Taxes imposed on Seller or attributable to Seller or imposed or attributable to the Business on or before the Closing Date; (h) any of the Excluded Assets; (i) all Environmental Liabilities and Costs (whether or not currently known, discoverable or regulated by applicable Law) arising from, relating to, in respect of or 9 incurred in connection with conditions existing or events occurring prior to the Closing Date; or (j) any claim, litigation, action or proceeding, whether or not pending or threatened, whether known or unknown, relating to the Business or the Assets and arising prior to the Closing. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER, SHAREHOLDER AND TAYLOR Seller represents and warrants to Buyer as of the date of this Agreement and the Closing Date as set forth in this Article 4. All exceptions to the representations and warranties contained in this Article 4 shall be attached to this Agreement as individually numbered schedules (collectively, the "Disclosure Schedules") corresponding to the applicable sections and subsections of this Article 4. The Disclosure Schedules shall be diligently prepared and delivered by Seller to Buyer as soon as reasonably practicable, but in no event later than twenty-five (25) days following the execution of this Agreement. The Disclosure Schedules are subject to the approval of Buyer in accordance with section 7.2.15 below. Section 4.1 Corporate Status. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Seller has full corporate power and authority to carry on the Business as it is currently conducted, and to own or lease and to operate the properties and assets of the Business (including the Assets). Seller is duly qualified to do business and is in good standing in each other jurisdiction in which it owns property or conducts the Business, except where the failure to so qualify or remain in good standing would not have a Material Adverse Effect. Section 4.2 Authorization, etc. Seller has all requisite power and authority (corporate or otherwise) to execute and deliver this Agreement, to perform fully its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery by Seller of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all requisite corporate action of Seller. Seller has duly executed and delivered this Agreement. This Agreement is a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting generally the enforcement of creditors' rights and by general principles of equity. Section 4.3 No Conflicts, etc. The execution, delivery and performance by Seller of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both), or result in the acceleration of or give rise to any party the right to terminate, modify or cancel under, or result in the loss of any rights, privileges, options or alternatives under, or result in the creation of any Lien on 10 any of the properties or assets of Seller (including the Assets) under (a) the Articles of Incorporation or Bylaws of Seller, (b) any Law applicable to Seller or any of its properties or assets (including the Assets), or (c) any Contract or other agreement or instrument to which Seller is a party or by which Seller or any of the Assets is bound, other than in the case of this clause (c) any such conflicts, violations or defaults that, individually or in the aggregate, (i) have not had and could not reasonably be expected to have a Material Adverse Effect, and (ii) have not impaired and could not reasonably be expected to impair Seller's ability to perform their obligations hereunder. No Governmental Approval or other Consent (including Consents under the Contracts) is required to be obtained or made by Seller in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Section 4.4 Financial Statements. Seller has delivered to Buyer all financial statements filed with the Securities and Exchange Commission ("SEC") since December 31, 2000 (collectively, the "Financial Statements"). The Financial Statements, including all related notes and schedules, contain true and accurate statements of each and all of the assets and liabilities of Seller and fairly present the financial position of Seller as at the respective dates thereof, and the results of operations and cash flows of Seller for the periods indicated, all in accordance with GAAP applied on a consistent basis throughout the periods involved. Section 4.5 Books and Records. The Books and Records of Seller, including financial records and books of account, are correct, complete and current in all material respects and have been maintained in accordance with sound business practices. Such Books and Records accurately, completely and fairly reflect the income, expenses, assets and liabilities of Seller, and Seller maintains internal accounting controls which provide reasonable assurance that: (a) transactions are recorded as necessary to permit preparation of reliable financial statements and to maintain accountability for earnings and assets; and (b) the recorded accountability of all assets is compared with existing assets at reasonable intervals. Section 4.6 Absence of Undisclosed Liabilities. Seller has no knowledge of any debts, claims, commitments, liabilities or obligations of any nature, absolute, accrued, contingent or otherwise and whether due or to become due, asserted or unasserted, arising out of or relating to the Business, except (a) as and to the extent reflected as a liability in the most recent Financial Statements filed with the SEC, and (b) liabilities and obligations that were incurred thereafter, in the ordinary course of business of the Business (consistent in amount and kind with past practice) and which would not have a Material Adverse Effect. Section 4.7 Absence of Changes. Except in the ordinary course of Seller's business or in connection with the transactions contemplated by this Agreement, since April 30, 2001, Seller has not in connection with or relating to the Business or the Assets: (a) suffered any Material Adverse Effect; (b) incurred, assumed, guaranteed or discharged any debt, claim, commitment, obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due (including any indebtedness for borrowed money), except current liabilities for trade or 11 business obligations incurred in connection with the purchase of goods or services in the ordinary course of business of the Business (consistent in amount and kind with prior practice); (c) other than pursuant to the FNF Secured Loans and the Homemark Secured Loans, mortgaged, pledged or subjected to any other Lien, any property, business or assets, tangible or intangible other than Liens for Taxes not yet due and payable and Liens for Taxes which are being contested in good faith and by appropriate proceedings with adequate reserves therefor having been maintained on Seller's Books and Records; (d) sold, transferred, leased to others or otherwise disposed of any of the Assets, or canceled or compromised any debt, claim, commitment, liability or obligation, or waived or released any right of substantial value; (e) received any notice of termination of any Contract; (f) suffered any damage, destruction or casualty loss (whether or not covered by insurance), in any case or in the aggregate, in excess of $25,000; (g) transferred or granted any rights under, or entered into any settlement regarding the breach, misappropriation, infringement or violation of, any Intellectual Property, or modified any existing rights with respect thereto; (h) made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any employee, distributor or agent of the Business, in each case other than increases in the ordinary course of business of the Business (consistent in amount and kind with past practice); (i) made any change in the accounting, auditing or tax methods, practices or principles of the Business; (j) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, agents, customers or suppliers; (k) except with respect to the payment of fees of lawyers or accountants, entered into any transaction, contract, arrangement, order, license, lease, permit, instrument, agreement or commitment other than in the ordinary course of business of the Business (consistent in amount and kind with past practice), or paid or agreed to pay any brokerage or finder's fee; (l) made any discount of appraisal rates, or granted any discount of charges for any other services rendered, to any customer on terms or in amounts materially more favorable than had been extended to that customer in the past; or (m) taken any action or omitted to take any action that would result in the occurrence of any of the foregoing. 12 Section 4.8 Taxes. (a) Seller has duly and timely filed all Tax Returns with respect to Taxes required to be filed on or before the Closing Date. All such Tax Returns are true, complete and correct. All Taxes owed by Seller (whether or not shown on any Tax Return) have been duly and timely paid. Seller has not extended or otherwise waived the benefit of any applicable statute of limitations or agreed to any extension of time with respect to a Tax assessment or deficiency. (b) Seller has withheld all required amounts in respect of Taxes from its employees, agents, contractors and nonresidents and, to the extent required, has remitted such amounts to the proper agencies. (c) Seller expects any authority to assess additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax liability of Seller either (i) claimed by any Governmental Authority in writing, or (ii) as to which Seller has knowledge based upon personal contact with any agent of such Governmental Authority. All federal, state, local and foreign income Tax Returns filed with respect to Seller for taxable periods since January 1, 1994, have been audited. Seller has delivered to Buyer correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies filed by, assessed against or agreed to by Seller since January 1, 1997. Section 4.9 Litigation. (a) There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation, civil, criminal, regulatory or otherwise, in law or in equity, pending or, to the knowledge of Seller, threatened, by or against or relating to Seller in connection with the Assets or the Business. (b) There are no judgments unsatisfied against Seller or consent decrees or injunctions to which Seller or the Assets are subject. (c) There is no action, claim, suit or proceeding pending, or to Seller's knowledge threatened, by or against or affecting Seller in connection with or relating to the transactions contemplated by this Agreement or of any action taken or to be taken in connection herewith or the consummation of the transactions contemplated hereby. Section 4.10 Compliance with Laws; Governmental Approvals and Consents. (a) Seller has complied in all material respects with all Laws applicable to the Business or the Assets. (b) All Governmental Approvals and other Consents material to the conduct of the Business as conducted by Seller prior to the Closing Date are in full force and effect, and Seller is in compliance in all material respects with each of such Governmental Approvals and Consents held by it with respect to the Assets and the Business. 13 Section 4.11 Assets. (a) Seller does not own any real property. All leases or other occupancy agreements pursuant to which Seller occupies or uses any real property or buildings or other structures to conduct the Business (i) are in full force and effect and constitute legal, valid and binding obligations of Seller and, to the knowledge of Seller, the other parties thereto, enforceable according to their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting generally the enforcement of creditors' rights and by general principles of equity, (ii) Seller is not in default under any of such leases and other occupancy agreements, (iii) to the knowledge of Seller, no other party to any of such leases and other occupancy agreements is in default thereunder, and (iv) there exist no conditions which, with notice or lapse of time, or both, would constitute a default by Seller (or, to the knowledge of Seller, a default by any other party thereto) under any of such leases and other occupancy agreements. (b) No personal property used by Seller in the Business is held by Seller under any lease, license, security agreement, conditional sales contract, or other title retention or security arrangement. No personal property used by Seller in the Business is not in the possession and under the control of Seller. The Assets include all inventory, machinery, equipment, furniture, leasehold and other improvements, fixtures, any related capitalized items and other tangible property (i) reasonably required for the conduct of the Business as now being conducted, or (ii) material to the financial condition or results of operations of the Business. The Assets are in good operating condition and repair (normal wear and tear excepted), and are suitable for their current use by Seller. The Assets do not include stock of or other equity interests in any Person. (c) Seller has good and valid title to the Assets (other than leased Assets), free and clear of restrictions on, or conditions to, transfer or assignment, and free and clear of all Liens, except for Liens for (i) Taxes not yet due and payable and Liens for Taxes which are being contested in good faith and by appropriate proceedings with adequate reserves therefor ("Permitted Liens"), and (ii) Liens arising under the FNF Secured Loans and the Homemark Secured Loans, which Liens shall be released at or prior to the Closing Date. Section 4.12 Contracts. (a) Seller has furnished Buyer with access to all material agreements, contracts, commitments, orders, licenses, leases and other instruments and arrangements, whether written or oral (the "Contracts") to which Seller is a party or by which it or any of its assets is bound which primarily relate to the Business, the Assets or the Governmental Approvals included in the Assets, together with all amendments thereto. (b) There does not exist under any Contract any event of default or event or condition that, after notice or lapse of time or both, could constitute a violation, breach or event of default thereunder on the part of Seller or, to the knowledge of Seller, any other party thereto except for such events or conditions that, individually and in the aggregate, (i) have not had or resulted in, and could not reasonably be expected to result in the future in, a Material Adverse Effect, and (ii) have not materially impaired the ability of Seller to 14 perform its obligations under this Agreement. Each Contract is a legal, valid, binding and enforceable obligation of Seller and, to the knowledge of Seller, the other parties thereto. Section 4.13 Territorial Restrictions. Seller is not restricted by any agreement or understanding with any other Person from carrying on the Business anywhere in the world. Section 4.14 Receivables. Seller's accounts receivable which have arisen in connection with the Business have arisen only from bona fide transactions in the ordinary course of business. Section 4.15 Intellectual Property. (a) All granted and issued patents, copyright registrations, and registered trademarks and service marks and all copyrights held by Seller are valid, enforceable and subsisting. Seller has the exclusive right to file, prosecute and maintain all applications and registrations with respect to the Intellectual Property. (b) None of the Intellectual Property is subject to any Lien in favor of any third party other than Liens resulting from the FNF Secured Loans and the Homemark Secured Loans (which Liens shall be released at or prior to Closing) and Seller owns all right, title and interest therein and thereto and, to Seller's knowledge, no other Person has any right, title or interest in or to any of the Intellectual Property. None of Seller's rights in or to any of the Intellectual Property shall be adversely affected by its execution or delivery of this Agreement or by the performance of its obligations hereunder. No claims with respect to any Intellectual Property have been asserted or, to Seller's knowledge, threatened by any Person against Seller. No use of any of the Intellectual Property by any Person (including Seller) constitutes or has constituted an unauthorized use, infringement, misappropriation or other violation of the Intellectual Property of any other Person and no valid grounds exist for any claims against Seller or any such Person with respect to any Intellectual Property. Without limiting the generality of the foregoing, no Person ever employed or otherwise engaged by Seller has asserted or, to Seller's knowledge, threatened any claim against Seller relating to any Intellectual Property. To Seller's knowledge, there has not been, nor is there presently, any unauthorized use, infringement, misappropriation or violation of any of the Intellectual Property by any Person. Seller has the full and exclusive right to possess, use, copy, distribute, display, transfer and license all of the Intellectual Property. (c) No Intellectual Property is subject to any outstanding order, award, decision, injunction, judgment, decree, stipulation or agreement in any manner restricting the transfer, use, enforcement or licensing thereof by Seller. Seller has not entered into any agreement to indemnify any other Person against any charge of infringement of any Intellectual Property. Seller has not entered into any agreement granting any third party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Intellectual Property. (d) Seller has paid all material fees, annuities and all other payments which have heretofore become due to any Governmental Authority with respect to the Intellectual 15 Property and has taken all steps reasonable and necessary to prosecute and maintain the same. (e) Seller has not transferred its title in or to any Intellectual Property. Seller has not permitted any Person to utilize any Intellectual Property. (f) Seller's use of the Intellectual Property is pursuant to valid and binding licenses and the execution and delivery by Seller of this Agreement and the consummation of the transactions contemplated hereby shall not alter or impair any such licenses. No Consent shall be required in connection with the transfer of such licenses to Buyer pursuant to this Agreement. Section 4.16 Insurance. All policies, and premiums on account thereof, of fire and casualty, liability (including errors and omissions), theft, fidelity, and other forms of insurance covering the Business is in amounts and provides coverage against such losses and risks as are generally maintained for comparable businesses and properties. Such policies of insurance are deemed to be adequate by Seller and will be outstanding and fully in force through the Closing Date. There is no claim by Seller pending under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters thereof, and Seller has not, within the last three years, been refused any insurance or had its coverage limited. Section 4.17 Environmental Matters. (a) Seller is and has been in compliance with all applicable Environmental Laws pertaining to any of the properties and assets of the Business and the use by Seller thereof. Seller has obtained all permits, licenses and other authorizations that are required under Environmental Laws necessary to operate the Business. Seller has not received notice of any violation of any applicable Environmental Law relating to any of the Assets or to any part of the premises utilized by the Business and, to the knowledge of Seller, no such accusation is threatened. (b) Seller has not caused or taken any action that resulted in, and Seller is not subject to, any material liability or obligation relating to (i) the environmental conditions on, under, or about any part of the premises utilized by the Business or other properties or assets owned, leased, operated or used by Seller in the Business, including the air, soil and groundwater conditions at such properties, or (ii) the use, management, handling, transport, treatment, generation, storage, disposal or Release of any Hazardous Substances by Seller. (c) No Hazardous Substances have been treated, stored or disposed of by Seller (or any other Person) at, on, or under any part of the premises utilized by the Business, which are required by applicable Environmental Laws currently in effect to be remediated by Seller, where the cost of such remediation, individually or in the aggregate, would have a Material Adverse Effect. (d) Seller has not received notice or other communication concerning any alleged liability for Environmental Liabilities and Costs in connection with any part of the premises utilized by the Business and, to Seller's knowledge, there exists no writ, 16 injunction, decree, order, judgment, lawsuit, claim, proceeding, citation, directive, or summons, pending or threatened, relating to any environmental matters with respect to any such premises. Section 4.18 Employee Matters. (a) Except as required by this Agreement, Seller does not have any employment contracts with any employees employed in the Business, and there is no pending termination of employment of any employee employed in the Business which would have a Material Adverse Effect. There are no employment agreements, pending negotiations, arrangements or understandings with employees employed in the Business having a fixed term. (b) There are no labor disputes pending or, to the knowledge of Seller, threatened against Seller in respect of the Business. Seller has not experienced any labor dispute, strike, picketing, handbilling, work slowdown, work stoppage or other concerted labor difficulty in the operation of the Business. (c) No charge or complaint of employment discrimination against Seller is pending or, to the knowledge of Seller, threatened before any federal, provincial or local agency, court or tribunal relating to the operation of the Business. (d) No charge or complaint against Seller is pending or, to the knowledge of Seller, threatened for payment of wages or other benefits under any federal, provincial or local employment standards law relating to the operation of the Business. (e) No charge or complaint against Seller is pending or, to the knowledge of Seller, threatened before the Workers' Compensation Board or any similar provincial or local agency relating to the operation of the Business. (f) No complaint or action against Seller by any current or former employee of Seller, including, but not limited to, a complaint or action alleging breach of an employment contract, wrongful discharge or breach of a duty of good faith and fair dealing in the employment relationship, is pending or, to the knowledge of Seller, threatened relating to the operation of the Business. (g) There are no pending or, to the knowledge of Seller, threatened claims against Seller for workers' compensation, unemployment insurance or disability benefits under any federal, provincial or local law relating to the operation of the Business. (h) All vacation, sick pay and bonuses earned by employees employed in the business through the Closing shall be fully paid and, except to the extent otherwise provided for herein, on or before the Closing Date, all benefits under any and all Employee Benefit Plans earned by employees employed in the Business through the Closing shall be fully paid by Seller to the appropriate Person, in compliance with applicable Law. Section 4.19 Brokers, Finders, etc. All negotiations relating to this Agreement, and the transactions contemplated hereby, have been carried on without the participation of any Person acting on behalf of Seller or its Affiliates in such manner as to give rise to any 17 valid claim against Buyer or its Affiliates for any brokerage or finder's commission, fee or similar compensation, or for any bonus payable to any officer, director, employee, agent or sales representative of or consultant to Seller or its Affiliates or any other Person upon consummation of the transactions contemplated hereby. Section 4.20 Suppliers and Customers. During the period from January 1, 2001 through the Closing Date, none of the 10 largest customers of the Business, in each case for the period from January 1, 2001 through the Closing Date, has canceled or substantially modified its agreement or commitment with Seller or the Business to supply services (or threatened in writing to do so). The relationship of Seller with each of its customers is a good commercial working relationship. Seller has no knowledge that any customer of the Business intends to cancel or otherwise substantially modify its relationship with Seller or the Business, or substantially modify its purchase of the services and products of the Business, either as a result of the transactions contemplated hereby or otherwise. Section 4.21 No Retention Agreements, etc. There are no retention agreements, severance agreements, change of control agreements and similar arrangements to which Seller, on the one hand, and any employee, consultant or other Person, on the other hand, are a party. Section 4.22 Bulk Sales Laws. The transactions contemplated by this Agreement, including, without limitation, the transfer of the Assets from Seller to Buyer, do not require any action by Buyer or Seller under any Law related to the transfer of assets, including, without limitation, any state bulk sales or similar Laws. Section 4.23 Representations Complete. None of the representations or warranties made by Seller in this Agreement (including the Exhibits and the Schedules hereto), nor any statement made in any Schedule, Exhibit, certificate, report, instrument, list or other document furnished or to be furnished by or on behalf of Seller pursuant hereto or thereto or in connection with the transactions contemplated hereby, contained, contains or will contain on the date delivered any untrue statement of a material fact, or omitted, omits or will omit on such date to state any material fact necessary in order to make the statements made, in light of the circumstances under which made, not misleading. Seller has disclosed to Buyer all facts of which they have knowledge that would reasonably be expected to have a Material Adverse Effect. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Seller as of the date of this Agreement and as of the Closing Date, as follows: Section 5.1 Corporate Status. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. 18 Section 5.2 Authorization, etc. Buyer has the corporate power and authority to execute and deliver this Agreement, to perform fully its obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all requisite corporate action. Buyer has duly executed and delivered this Agreement. This Agreement is a legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights in general and as the same may be limited by general principles of equity. Section 5.3 No Conflicts, etc. The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not conflict with or result in a violation of or under (with or without the giving of notice or the lapse of time or both) (a) the articles or certificate of incorporation or by-laws of Buyer, or (b) any contract, agreement or other instrument applicable to Buyer, or any of its properties or assets, except, in the case of clause (b) for violations and defaults that, individually and in the aggregate, have not materially impaired and shall not materially impair the ability of Buyer to perform its obligations under this Agreement. No Governmental Approval or other Consent is required to be obtained or made by Buyer in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. Section 5.4 Brokers, Finders, etc. All negotiations relating to this Agreement and the transactions contemplated hereby have been carried on without the participation of any Person acting on behalf of Buyer in such manner as to give rise to any valid claim against Seller for any brokerage or finder's commission, fee or similar compensation. ARTICLE 6 COVENANTS Section 6.1 Covenants of Seller. 6.1.1 Except as and to the extent required by applicable Law (in which case the nature of the announcement shall be described to Buyer, and Buyer shall be allowed reasonable time to comment prior to dissemination to the public), prior to the Closing, Seller shall not make any public comment, statement or communication nor shall Seller make any announcement to any of its customers, vendors or underwriters, with respect to, or otherwise disclose or permit the disclosure of the existence or terms of the discussions regarding, this Agreement or the transactions contemplated hereby or thereby without Buyer's prior written consent. 6.1.2 From the date hereof through the Closing Date, except as otherwise expressly permitted by this Agreement or as otherwise consented to by Buyer in writing, Seller shall carry on Seller's businesses (including the Business) only in the ordinary course of business consistent with past practice, and in substantially the same manner as heretofore conducted, and shall take no action which would adversely affect its ability to consummate the transactions contemplated hereunder. Without limiting the generality of 19 the foregoing, except as otherwise expressly provided in this Agreement, prior to the Closing, Seller will: (a) preserve intact its present corporate existence and business organizations, pay and discharge all debts and liabilities as they become due, and operate solely in the ordinary course of business in a manner consistent with the provisions of this Agreement and in compliance in all material respects with all applicable Laws, permits and licenses, commitments and Contracts of Seller; (b) use best efforts to maintain its relationships and goodwill with customers, clients, suppliers, vendors, underwriters, employees, agents and others with whom it has business dealings; (c) maintain its facilities, properties and assets in the same state of repair, order and condition as they were on the date hereof, normal wear and tear excepted; (d) keep proper books of record and account, in which full and correct entries shall be made of all financial transactions and the Assets and Business in accordance with GAAP consistently applied, and maintain its books, accounts and records in the ordinary course of business consistent with past practice; (e) maintain in full force and effect all existing governmental licenses, franchises and permits and insurance policies and binders; (f) promptly advise Buyer in writing of the threat or commencement against Seller or its Affiliates of any suit, claim or action of which it has knowledge and which could have a Material Adverse Effect on Seller, the Business or the Assets; and (g) promptly advise Buyer in writing of any event or the existence of any fact which makes untrue, or will make untrue as of the Closing, any representation or warranty of Seller set forth in this Agreement; provided, however, that no disclosure by Seller pursuant to this Section 6.1.2(g) shall be deemed to amend or supplement this Agreement, to limit or otherwise affect the remedies available to Buyer hereunder, or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant by Seller. 6.1.3 Without limiting the provisions of Section 6.1.2, from the date hereof through the Closing Date, except as otherwise expressly permitted by this Agreement or as otherwise consented to by Buyer in writing, Seller shall not: (a) Except in accordance with the terms and conditions of the FNF Secured Loans, amend its Articles of Incorporation or Bylaws (or similar organizational documents); (b) issue, sell, deliver, grant, accelerate, repurchase, redeem any options for, or otherwise agree or commit to issue, sell or deliver any equity interests in Seller, including, without limitation, stock or any other securities; (c) recapitalize, split, combine or reclassify any equity interests in Seller, including, without limitation, stock or other securities; declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, units or property or any combination 20 thereof) in respect of, or purchase, redeem or otherwise acquire any of its securities, or modify any of the terms of any such securities; (d) (A) other than debt in existence as of the date of this Agreement (including, without limitation, the FNF Secured Loans and the Homemark Secured Loans) or the refinancing of any such existing debt on more favorable terms to Seller, create, incur, assume, maintain or permit to exist any long-term debt or any short-term debt for borrowed money, provided, however, that Buyer's consent to the creation or incurrence of any new debt between the date of this Agreement through the Closing Date shall not be unreasonably withheld; (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or (C) make any loans, advances or capital contributions to, or investments in, any other Person; (e) make any capital expenditure or capital expenditure commitment in excess of $50,000 whether individually or in the aggregate; (f) grant (or commit to grant) any increase in the compensation (including incentive or bonus compensation) of any of its employees or institute, adopt or amend (or commit to institute, adopt or amend) any compensation or benefit plan, policy, program or arrangement or collective bargaining agreement applicable to any of its employees; (g) amend, terminate or enter into any employment, consulting, severance, change in control or similar agreement or arrangement (including any commitment to pay retirement or other benefits) to or with any of its officers, directors or employees, or any collective bargaining agreement or commitment; (h)(A) enter into or terminate any lease of real estate; (B) create any Lien on any assets or properties of Seller (including the Assets); (C) make any modifications of or changes in or terminate any existing Contract other than as may be required to consummate the transactions contemplated hereby; or (D) enter into any material Contract; (i) make, give or grant any bid or proposal, (A) involving an amount in excess of $10,000 (or amend, supplement or terminate any existing bid or proposal); or (B) involving a loss to Seller; (j) authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any Contract with respect to, any (A) plan of liquidation or dissolution, (B) merger or consolidation, (C) change in its capitalization; (D) sale, assignment, license, disposition of or transfer any Asset, other than sales of Seller's products and services to Buyer or its Subsidiaries; or (E) incurrence of any liabilities or obligations (including liabilities with respect to indebtedness, capital leases or guarantees thereof); (k) change any accounting methods, principles or practices followed by Seller, or any of the assumptions underlying, or methods of calculating, any bad debt, contingency or other reserve; 21 (l) change or revoke any election with respect to Taxes, change any Tax procedure or practice, or enter into any settlement or compromise of any dispute involving a Tax liability; (m) commence, compromise, settle or otherwise modify any material claim, lawsuit or judicial proceeding, or repay or prepay any liability, obligation or indebtedness prior to its stated maturity; (n) give or agree to give any discount of Seller's products and services, unless such discount is for Buyer or its Subsidiaries; (o) take any action or omit to take any action that would cause any of the representations or warranties contained herein not to be true and correct at any time between the date hereof and the Closing Date; or (p) commit or agree to do any of the foregoing. 6.1.4 From the date hereof through the Closing, Seller shall: (i) provide to Buyer complete access at all reasonable times to the Contracts, agreements between Seller and any Affiliate, Seller's Books and Records, offices and other facilities and properties (including physical inspections of any of the current premises); (ii) furnish Buyer with all financial, operating and other documents, records, data, work papers and other information regarding the Business, the Assets, Contracts, liabilities, personnel and properties of Seller as Buyer may from time to time reasonably request; and (iii) take all action necessary to enable Buyer to make such inspections, reviews and audits thereof as Buyer may reasonably request, and discuss the same with representatives of Seller. 6.1.5 From the date hereof to the Closing Date, as promptly as practicable, Seller will (i) use commercially reasonable efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated hereby on or before the Closing Date; (ii) file or supply, or cause to be filed or supplied, all applications, notifications and information required to be filed or supplied by Seller pursuant to applicable Law in connection with this Agreement, the sale and transfer of the Assets pursuant hereto and the consummation of the other transactions contemplated hereby; (iii) use all reasonable efforts to obtain, or cause to be obtained, all Consents (including any required under applicable Law or any Contract) necessary to be obtained by Seller in order to consummate the transactions contemplated pursuant to this Agreement; (iv) coordinate and cooperate with Buyer in exchanging such information and supplying such assistance as may be reasonably requested by Buyer in connection with any filings and other actions contemplated hereby. 6.1.6 Prior to the Closing Date, Seller, with the reasonable cooperation of Buyer, shall cause the transfer of, and the making of all applicable notifications with respect to, any Consents from any third party under any Contract or from any Governmental Authority, including any environmental permits, authorizations and similar instruments, that are required to be transferred or made in connection with the transactions contemplated hereby. 22 6.1.7 Following the Closing, Seller shall, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by Buyer, to confirm and assure the rights and obligations provided for in this Agreement and render effective the consummation of the transactions contemplated hereby or thereby. 6.1.8 (i) In connection with the purchase by Buyer of the Assets and the other transactions contemplated hereby, Seller will not, and will cause its Affiliates not to, for a period of 5 years following the Closing (provided such 5 year period shall be extended for any period of time Seller or its Affiliates is in breach of this subsection (h)), anywhere in the world directly or indirectly, design, create, market or sell products or provide services which are competitive to the Business at the time of the Closing ("Competitive Products and Services"). Without limiting the generality of the foregoing, neither Seller nor any of its Affiliates shall, directly or indirectly, be a director, officer or employee of, or consultant to, or own any interest in any Person that designs, creates, markets or sells Competitive Products or Services. The provisions of this Section 6.1.8 shall not be construed to prohibit the rendering of services by Seller or any of its Affiliates to Buyer or its Subsidiaries, or the ownership by Seller or any of its respective Affiliates of an aggregate interest of less than 5% of any publicly traded company with stock listed on a national exchange or Nasdaq that designs, creates, manufactures, sells or provides any Competitive Products and Services. Notwithstanding anything to the contrary above, Buyer acknowledges that Seller's continued development, marketing and sale of its IDXnet broker reciprocity product offering, as described by Seller to Buyer as of the date of this Agreement, does not constitute a Competitive Product and Service. In addition, Buyer acknowledges that for purposes of this Section 6.1.8(i) only, Chaffee Interactive, Inc. shall not be deemed an Affiliate of Seller and is not subject to the provisions of this Section 6.1.8(i). (ii) In connection with the transactions contemplated hereby, Seller will not, and will cause its Affiliates not to, for a period of 5 years following the Closing, directly or indirectly induce or solicit, or aid or assist any Person to induce or solicit, any employees or officers of Buyer or its Subsidiaries, to terminate, curtail or otherwise limit his or her employment by or business relationship with Buyer or its Subsidiaries. (iii) The parties hereto agree that the provisions of this Section 6.1.8 are reasonable. If a court determines, however, that any provision of this Section 6.1.8 is unreasonable, either in period of time, geographical area or otherwise, then the parties hereto agree that the provisions of this Section 6.1.8 should be interpreted and enforced to the maximum extent which such court deems reasonable. The provisions of this Section 6.1.8 shall inure to the benefit of Buyer, its Affiliates, and their respective successors and assigns. 6.1.9 Prior to the Closing, all information received from Buyer prior to the Closing shall be deemed received pursuant to the Confidentiality Agreement, and Seller shall comply with the confidentiality provisions of the Confidentiality Agreement with respect to such information. The confidentiality provisions of the Confidentiality Agreement are hereby incorporated herein by reference with the same effect as if fully set forth herein. 23 6.1.10 From and after the Closing, Seller will, and will cause its respective Affiliates to, hold in strict confidence, and not use to the detriment of Buyer or its Subsidiaries, any information with respect to Buyer, its Subsidiaries, or their respective business assets or properties, including, without limitation, the Business and the Assets. Without limiting the generality of the foregoing, Seller agrees, covenants and acknowledges that, from and after the Closing Date, it will not, and will cause its respective Affiliates not to, directly or indirectly, disclose, give, sell, use, or otherwise divulge any confidential or secret information (including but not limited to any technology, process, trade secrets, know-how, other intellectual property rights, strategies, financial statements or other financial information not otherwise publicly available, forecasts, operations, business plans, prices, discounts, products, product specifications, designs, plans, data or ideas) primarily used in or primarily related to Buyer, its Subsidiaries, or their respective business, assets or properties, including, without limitation, the Business and the Assets. Notwithstanding the foregoing, Seller may disclose such information (i) if compelled to disclose the same by judicial or administrative process or by other requirements of applicable Law (but subject to the following provisions of this Section 6.1.10); (ii) if the same hereafter is in the public domain through no fault of Seller; or (iii) if the same is later acquired by Seller from another source and such source is not under an obligation to another Person, Buyer or its Subsidiaries to keep such information confidential. If Seller or any of its Affiliates (the "Disclosing Party") is requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any such information, the Disclosing Party shall provide Buyer with prompt notice of any such request or requirement so that Buyer may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Section 6.1.10. If, in the absence of a protective order or other remedy or the receipt of a waiver by Buyer, the Disclosing Party nonetheless, based on the written advice of counsel, is required to disclose such information to any tribunal or else stand liable for contempt or suffer other censure or penalty, the Disclosing Party, without liability hereunder, may disclose that portion of such information which such counsel advises the Disclosing Party it is legally required to disclose. 6.1.11 From the date hereof through the Closing, Seller and its Affiliates shall (and shall cause their respective Affiliates to) immediately suspend any existing negotiations or discussions relating to any direct or indirect sale of substantially all of its assets or any sale of all or any portion of the Assets (collectively, a "Transaction"), and Seller shall not, and shall cause their respective Affiliates not to, directly or indirectly, (i) encourage, solicit, participate in or continue or initiate discussions or negotiations with, or provide any information to, otherwise cooperate with, or take any other action to facilitate knowingly any inquiries or the making of any proposal or offer, to any Person, which constitutes, or may reasonably be expected to lead to, any Transaction, or (ii) negotiate or discuss with any third party concerning any proposal or offer for a Transaction. Seller shall promptly notify Buyer of any such proposal initiated by any third party. Subject to the other terms and conditions of this Agreement, nothing contained in this Section 6.1.11 shall prohibit Seller and its Affiliates from continuing or entering into negotiations or discussions related to any transaction that does not constitute a Transaction, including, without limitation, any merger, joint venture, sale offer or tender offer for stock or other securities of, other transfer of actual or beneficial ownership of or other similar transaction involving Seller, its operations or less than substantially all its assets other than the Assets; provided, that any such negotiations or discussions, or the consummation of any such 24 transaction, shall be expressly subject to this Agreement and shall not in any way impair Buyer's rights under this Agreement. 6.1.12 Seller shall be responsible for filing any and all Tax Returns and shall be responsible for any and all tax liability related to the Business and the Assets for all periods prior to the Closing Date, including, without limitation, the period commencing January 1, 2001 and ending on the Closing Date. Section 6.2 Covenants of Buyer. 6.2.1 Except as and to the extent required by applicable Law (in which case the nature of the announcement shall be described to Seller, and Seller shall be allowed reasonable time to comment prior to dissemination), prior to the Closing, Buyer shall not make any public comment, statement or communication, nor shall Buyer make any announcement to any of its customers, vendors or underwriters, with respect to, or otherwise disclose or permit the disclosure of the existence or terms of the discussions regarding, this Agreement or the transactions contemplated hereby or thereby without the prior written consent of Seller. 6.2.2 From the date hereof to the Closing Date, as promptly as practicable, Buyer will: (i) file or supply, or cause to be filed or supplied, all applications, notifications and information required to be filed or supplied by Buyer pursuant to applicable Law in connection with this Agreement, the purchase and transfer of the Assets pursuant hereto and the consummation of the other transactions contemplated hereby; and (ii) coordinate and cooperate with Seller in exchanging such information and supplying such reasonable assistance as may be reasonably requested by Seller in connection with any filings and other actions contemplated by Section 6.1.5. Notwithstanding the foregoing, Buyer shall not be obligated to obtain or make any authorization, consent, filing or approval if, in Buyer's reasonable judgment, doing so could have a Material Adverse Effect on Buyer. 6.2.3 Following the Closing, Buyer shall, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by Seller, to confirm and assure the rights and obligations provided for in this Agreement and render effective the consummation of the transactions contemplated hereby. 6.2.4 Prior to the Closing, all information received from Seller prior to the Closing shall be deemed received pursuant to the confidentiality provisions of the Confidentiality Agreement, and Buyer shall comply with the confidentiality provisions of the Confidentiality Agreement with respect to such information. 6.2.5 On or prior to the Closing Date, Buyer shall offer employment to certain employees of Seller selected by Buyer in its sole discretion on such terms and conditions as determined by Buyer in its sole discretion. Those employees accepting such offer from Buyer are referred to herein as "Transferred Employees." As of the Closing Date, and without any interruption of coverage, Buyer shall provide to each Transferred Employee (i) participation in Employee Benefit Plans of Buyer consistent with that provided similarly situated employees of Buyer, and (ii) credit for service with Seller, determined on the Closing Date, for purposes of such participation. Buyer shall waive all 25 pre-existing condition exclusions and actively-at-work requirements and provide that any expenses incurred on or before the Closing Date by a Transferred Employee or a Transferred Employee's covered dependent shall be taken into account for purposes of satisfying applicable deductible, coinsurance and maximum out-of-pocket provisions. Section 6.3 Joint Covenant. Following the execution of this Agreement and continuing following the Closing, Buyer and Seller shall, in good faith, negotiate a Software Development, License and Marketing Agreement, or other similar agreement or agreements, pursuant to which (i) Buyer, at its option, may retain Seller to perform certain software development and/or support services for a mutually agreed upon fee, (ii) Seller shall license from Buyer the Shared Software necessary for Seller to operate the IDXnet broker reciprocity product offering for a mutually agreed upon fee, (iii) Seller and Buyer shall establish a cross-marketing relationship for certain mutually agreed upon products, including Seller's IDXnet broker reciprocity product offering, and related commissions to be mutually agreed upon by the parties; and (iv) such other terms and conditions as the parties may mutually agree. Buyer and Seller expressly understand and agree that the execution of the above described agreement or agreements shall not be a condition to close the transactions contemplated by this Agreement. Section 6.4 Management Agreement. Promptly following the execution of this Agreement, but in no event later than three (3) business days from such date, Buyer and Seller shall enter into a Management Agreement pursuant to which Buyer shall assume full management responsibilities of the Business, including control over the day-to-day operations, for the period commencing on the date of this Agreement and ending on the earlier of (i) the Closing, or (ii) the termination of this Agreement (the "Management Term"). The Management Agreement shall contain customary terms and conditions for a business relationship of this type. ARTICLE 7 CONDITIONS PRECEDENT Section 7.1 Conditions to Obligations of Each Party. The obligations of the parties hereto to consummate the transactions contemplated hereby at the Closing shall be subject to the fulfillment on or prior to the Closing Date of the following conditions: 7.1.1 Consummation of the transactions contemplated hereby shall not have been restrained, enjoined or otherwise prohibited by any Law, judicial order or arbitral decision. No governmental authority or agency shall have determined that any Law makes illegal the consummation of the transactions contemplated hereby, and no proceeding with respect to the application of any such Law to such effect shall be pending or threatened. Section 7.2 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the purchase of the Assets and the other transactions contemplated hereby at the Closing shall be subject to the fulfillment (or waiver by Buyer) on or prior to the Closing Date, of each of the following additional conditions: 26 7.2.1 Each of the representations and warranties of Seller contained in this Agreement or any other loan or other agreement to which Buyer and Seller are a party that is qualified as to materiality shall be true and correct and each such representation and warranty that is not so qualified shall be true and correct in all material respects, in each case on the date hereof and at and as of the Closing Date as though made on and as of the Closing Date. Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and any other loan or other agreement to which Buyer and Seller are a party to be performed or complied with by it prior to or on the Closing Date. 7.2.2 Since the date hereof, there shall not have occurred any (i) Material Adverse Effect (including any Material Adverse Effect due to any pending or threatened litigation) on the Business or the Assets; or (ii) material change in the Business, the Assets, any of Seller's Contracts or Commitments (other than its actual completion or progress toward the same), or Seller's financial condition, prospects or operations. 7.2.3 Seller shall have delivered to Buyer a certificate, dated the Closing Date and signed by a duly authorized officer, to the effect of Section 7.2.1 and Section 7.2.2. 7.2.4 Buyer shall have received from Seller a certificate, dated the Closing Date and signed by the secretary or equivalent officer of Seller, certifying to each of the following items of Seller, which shall be attached thereto: (i) copies of its Articles of Incorporation, and all amendments thereof to date, certified as of a recent date by the appropriate department or agency of the State of Nevada; (ii) copies of its Bylaws, and all amendments thereof to date; (iii) specimen signatures of its incumbent officers; (iv) certificates of good standing (or local law equivalent) of a recent date, certified by the Secretary of State or other appropriate official of each other state in which it is qualified to do business; and (vi) records of all action taken by Seller which are required by applicable Law approving this Agreement and the transactions contemplated herein. 7.2.5 Seller shall have filed or supplied, or shall have caused to be filed or supplied, all applications, notifications and information required to be filed or supplied by Seller pursuant to applicable Law in connection with this Agreement, the sale and transfer of the Assets pursuant hereto and the consummation of the other transactions contemplated hereby. Seller shall have obtained and shall have delivered to Buyer copies of all governmental and non-governmental Consents required to be obtained by Seller in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. No Consent so obtained shall: (i) have been conditioned upon the modification, cancellation or termination of any Contract, right, license or permit of Seller; (ii) impose on the Business or the Assets after the Closing any condition, provision or requirement not presently imposed upon thereon, or any condition that would be more restrictive after the Closing on the Business or the Assets than the conditions presently imposed thereon; (iii) necessitate the payment of premium or penalty by, or loss of benefit to, Buyer as successor owner of the Business and the Assets or necessitate an increase in tangible net worth of the Assets; or (iv) impose a requirement on Buyer or its Subsidiaries that, in Buyer's reasonable judgment, shall have a Material Adverse Effect on Buyer or its Subsidiaries. 27 7.2.6 All corporate and other proceedings of Seller in connection with this Agreement and the transactions contemplated hereby and thereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to Buyer, and Buyer shall have received from Seller all such documents and instruments, or copies thereof, certified if requested, as may be reasonably requested. 7.2.7 Seller shall have delivered to Buyer at the Closing all documents, certificates and agreements necessary to transfer to Buyer title to the Assets, free and clear of any and all Liens thereon, which documents, certificates and agreements shall each be in form and substance reasonably satisfactory to Buyer, including (i) a bill of sale, assignment and general conveyance, dated the Closing Date, with respect to the Assets, and (ii) assignment of all Contracts, Intellectual Property, and any other agreements and instruments constituting Assets, dated the Closing Date, assigning all of Seller's right, title and interest therein and thereto. 7.2.8 Seller shall have delivered to Buyer certificates of its managers and officers, in form and substance reasonably satisfactory to Buyer, dated the Closing Date, certifying that (i) no claims have been brought or, to such individual's knowledge, threatened against such individual which would or may give rise to a right to indemnification from Seller, and (ii) such individual has no claim against Seller (other than for any accrued and unpaid wages). 7.2.9 Buyer shall have completed to its sole satisfaction its business, financial and legal due diligence investigation of Seller, the Business and the Assets, and shall have found, in Buyer's sole discretion, Seller's prospects, Business, operations, Assets, Contracts, rights and liabilities, including its liabilities with respect to, and compliance with, Environmental Laws and legal and regulatory requirements, satisfactory. Without limiting the generality of the foregoing, Buyer shall have received true, complete and correct copies of each Contract of Seller or other document of Seller and shall have reviewed and be satisfied with the same. 7.2.10 Seller and Buyer shall entered into a Software Development Agreement, acceptable to Buyer in its sole discretion, pursuant to which Seller shall develop the Version 8 Software for the benefit of Buyer and in accordance with detailed specifications related to the nature and performance of the Version 8 Software. 7.2.11 Seller's counsel shall have delivered to Buyer a legal opinion letter substantially in the form of Exhibit A hereto. 7.2.12 Seller shall have (i) paid in full all amounts due Homemark under the Homemark Secured Loans and Homemark shall have accepted such payment in full satisfaction of the Homemark secured Loans, (ii) caused Homemark to release any and all Liens asserted by Homemark against the Assets, and (iii) entered into a general release of claims with Homemark in form and substance satisfactory to Buyer in its sole discretion. 7.2.13 Seller shall have caused FNF to release any and all Liens asserted by FNF against the Assets. 28 7.2.14 Seller shall have satisfied all conditions precedent set forth in Section 5 of the Revolving Credit Agreement between Seller and FNF of even date herewith. 7.2.15 Seller shall have delivered to Buyer the Disclosure Schedules within ten (10) days following the execution of this Agreement and Buyer shall have approved, in its sole discretion. each exception to the representations and warranties contained therein. Section 7.3 Conditions to Obligations of the Seller and Members. The obligation of Seller to consummate the transactions contemplated hereby at the Closing shall be subject to the fulfillment (or waiver by Seller), on or prior to the Closing Date, of the following additional conditions: 7.3.1 Each of the representations and warranties of Buyer contained in this Agreement that is qualified as to materiality shall be true and correct and each such representation and warranty that is not so qualified shall be true and correct in all material respects, in each case on the date hereof and at and as of the Closing Date as though made on and as of the Closing Date. Buyer shall have duly performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date. 7.3.2 All corporate proceedings of Buyer in connection with this Agreement and the transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to Seller, and Seller shall have received from Buyer all such documents and instruments, or copies thereof, certified if requested, as may be reasonably requested. ARTICLE 8 TERMINATION Section 8.1 Termination. This Agreement may be terminated at any time prior to the Closing Date: 8.1.1 by the written agreement of Buyer and Seller; 8.1.2 by Buyer, by notice to Seller, if the Closing shall not have been consummated pursuant hereto by 5:00 p.m. Pacific time on November 30, 2001; 8.1.3 by Buyer by notice to Seller, if any of the conditions set forth in Section 7.1 or Section 7.2 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by 5:00 p.m. Pacific time on November 22, 2001, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing; or 8.1.4 by Seller by notice to Buyer, if any of the conditions set forth in Section 7.1 or Section 7.3 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by 5:00 p.m. Pacific time on November 22, 2001, unless such 29 failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing. Section 8.2 Effect of Termination. If this Agreement is terminated pursuant to the provisions of Section 8.1, then this Agreement shall become void and have no effect, without any liability to any Person in respect hereof or of the transactions contemplated hereby on the part of any party hereto, except for any liability resulting from such party's breach of or default under this Agreement. ARTICLE 9 INDEMNIFICATION Section 9.1 Indemnification By Seller. Subject to the terms and conditions of this Article IX, Seller covenants and agrees to defend, indemnify and hold harmless Buyer and its Affiliates (including, after the Closing, Seller) and their respective officers, directors, employees, agents, advisers and representatives (collectively, the "Buyer Indemnitees"), from and against, and pay or reimburse the Buyer Indemnitees for, any and all claims, liabilities (including Tax liabilities), fines, costs, judgments, penalties or proceedings (whether absolute, accrued, conditional or otherwise and whether or not resulting from third party claims), including out-of-pocket expenses, court costs, consulting fees, expert witness fees and reasonable attorneys' fees and expenses incurred in the investigation or defense of any of the same or in asserting any of their respective rights hereunder (collectively, "Losses"), resulting from or arising out of: 9.1.1 any inaccuracy or defect in any representation or warranty of either Seller contained in this Agreement; or 9.1.2 any breach of any covenant or agreement of Seller contained in this Agreement; or 9.1.3 the Excluded Assets or the Excluded Liabilities; or 9.1.4 the Business, the Assets or the Assumed Liabilities prior to the Closing; or 9.1.5 the business and/or operation (or dissolution) of Seller following the Closing; or 9.1.6 the employment of the Transferred Employees by Seller, its Subsidiaries or their respective Affiliates prior to the Closing and the termination of the Transferred Employees by such entities pursuant to this Agreement. Section 9.2 Indemnification By Buyer. Subject to the terms and conditions of this Article IX, Buyer covenants and agrees to defend, indemnify and hold harmless Seller from and against any and all Losses resulting from or arising out of: 9.2.1 any inaccuracy or defect in any representation or warranty of Buyer contained in this Agreement; or 30 9.2.2 any breach of any covenant or agreement of Buyer contained in this Agreement; or 9.2.3 the Assumed Liabilities following to the Closing; or 9.2.4 the employment of the Transferred Employees by Buyer or its Subsidiaries following the Closing. Section 9.3 Indemnification Procedures. 9.3.1 In the case of any claim asserted by a third party against a party entitled to indemnification under this Agreement (each, an "Indemnified Party"), notice shall be given by the Indemnified Party to the party required to provide indemnification (the "Indemnifying Party") as soon as practicable after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnified Party shall permit the Indemnifying Party (at the expense of such Indemnifying Party) to assume the defense of any third party claim or any litigation with a third party resulting therefrom; provided, however, that (i) the counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be subject to the approval of the Indemnified Party (which approval shall not be unreasonably withheld or delayed); (ii) the Indemnified Party may participate in such defense at such Indemnified Party's expense (which shall not be subject to reimbursement hereunder except as provided below); and (iii) the omission by any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually and materially damaged as a result of such failure to give notice. Except with the prior consent of the Indemnified Party, no Indemnifying Party, in the defense of any litigation, shall consent to entry of any judgment or enter into any settlement that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnified Party of a general release from any and all liability with respect to such litigation. If the Indemnified Party shall in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by the Indemnifying Party might be expected to affect adversely the Indemnified Party's Tax liability or the ability of the Indemnified Party to conduct its business, or that the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect of such claim or any litigation relating thereto, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or litigation relating to any such claim at the sole cost of the Indemnifying Party; provided, however, that if the Indemnified Party does so take over and assume control, the Indemnified Party shall not settle such claim or litigation without the consent of the Indemnifying Party, such consent not to be unreasonably withheld or delayed. If the Indemnifying Party does not accept the defense of any matter as above provided, the Indemnified Party shall have the full right to defend against any such claim or demand at the sole cost of the Indemnifying Party and shall be entitled to settle or agree to pay in full such claim or demand. In any event, the Indemnifying Party and the Indemnified Party shall reasonably cooperate in the defense of any third party claim or litigation subject to this Article IX and the records of each shall be reasonably available to the other with respect to such third party defense. 31 9.3.2 With respect to any claim for indemnification hereunder which does not involve a third party claim, the Indemnified Party will give the Indemnifying Party notice of such claim. The Indemnifying Party may acknowledge and agree by notice to the Indemnified Party to satisfy such claim within 20 days of receipt of notice of such claim from the Indemnified Party. If the Indemnifying Party shall dispute such claim, the Indemnifying Party shall provide notice of such dispute to the Indemnified Party within such 20-day period, setting forth in reasonable detail the basis of such dispute. Upon receipt of notice of any such dispute, the Indemnified Party and the Indemnifying Party shall use reasonable efforts to resolve such dispute within 30 days of the date such notice of dispute is received. If the Indemnifying Party shall fail to provide notice to the Indemnified Party within 20 days of receipt of notice from the Indemnified Party that the Indemnifying Party either acknowledges and agrees to pay such claim or disputes such claim, the Indemnifying Party shall be deemed to have acknowledged and agreed to pay such claim in full and to have waived any right to dispute such claim. Once (i) the Indemnifying Party has acknowledged and agreed to pay any claim pursuant to this Section 9.3(b); (ii) any dispute under this Section 9.3(b) has been resolved in favor of indemnification by mutual agreement of the Indemnifying Party and the Indemnified Party; or (iii) any dispute under this Section 9.3(b) has been finally resolved in favor of indemnification by court order of any court having jurisdiction over such dispute, then the Indemnifying Party shall pay the amount of such claim to the Indemnified Party within 20 days of the date of acknowledgement or resolution, as the case may be, to such account and in such manner as is designated in writing by the Indemnified Party. 9.3.3 If a claim for indemnification has been made prior to the Expiration Date, the parties' rights and obligations under this Article IX in respect of such claim shall continue even if the Expiration Date shall occur prior to full resolution of such claim. Section 9.4 Limitation of Liability for Losses; Expiration of Representations and Warranties. Notwithstanding anything to the contrary in this Agreement, except for Losses arising from fraud or willful misconduct by the Indemnifying Party, the maximum aggregate liability (i) of Seller to indemnify the Buyer Indemnitees for Losses under Section 9.1, or (ii) of Buyer to indemnify Seller under Section 9.2, shall, in each case, not exceed the amount of the Purchase Price. Except in the event of fraud or willful misconduct, in which case all representations and warranties contained in this Agreement shall expire upon the expiration of the relevant statute of limitations, all representations and warranties contained in this Agreement shall survive the Closing for a period of two (2) years (the "Expiration Date"). ARTICLE 10 MISCELLANEOUS Section 10.1 Expenses. Seller shall be responsible for and bear all expenses, costs and fees (including investment banking, attorneys' and auditors' fees, any broker's or finder's fees, and any other expenses) incurred at any time by Seller in connection with pursuing or consummating the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith, whether or 32 not the transactions contemplated hereby shall be consummated. Buyer shall bear such expenses, costs and fees incurred by it. Section 10.2 Severability. If any provision of this Agreement, including any phrase, sentence, clause, Section or subsection is inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. Section 10.3 Notices. All notices, requests, demands, approvals, consents, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be (a) delivered personally; (b) mailed by first-class, registered or certified mail, return receipt requested, postage prepaid; (c) sent by nationally recognized next-day or overnight mail or delivery; or (d) sent by facsimile transmission, provided that the original copy thereof also is sent by certified or registered mail. (i) if to Buyer, to: Fidelity National Information Solutions, Inc. 4050 Calle Real, Suite 200 Santa Barbara, CA 93110 Attn: Eric Swenson, President (ii) if to Seller, to: HomeSeekers.com, Inc. _____________________________ _____________________________ Attn: _______________________ or, in each case, at such other address as may be specified in a written notice sent in accordance with the provisions of this Section 10.3 to the other parties hereto. All notices shall be deemed effective and given upon receipt; provided, however, that if any facsimile notice is received after 5:00 P.M. local time at the place of receipt, it shall be deemed to have been given as of the next following Business Day. Section 10.4 Attorneys' Fees. If any party hereto initiates any legal action arising out of or in connection with this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable attorneys' fees, expert witness fees and expenses incurred by the prevailing party in connection therewith (including fees and expenses incurred to prosecute any appeal or to enforce any judgment). This Section 10.4 shall not be deemed merged into any judgment rendered on this Agreement. Section 10.5 Liability for Transfer Taxes. Seller shall be responsible for and pay in a timely manner all sales, use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar taxes and fees, if any, arising out of or in connection with or attributable to the transfer of the Assets effected pursuant to this Agreement. 33 Section 10.6 Headings. The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement. Section 10.7 Entire Agreement. This Agreement (including the Schedules and Exhibits attached hereto) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between or among the parties with respect to the subject matter hereof except the confidentiality provisions set forth in the Confidentiality Agreement. Section 10.8 Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Section 10.9 Governing Law, Etc. This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal Laws of the State of California giving effect to the conflict of laws rules thereof. Section 10.10 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and its respective heirs, successors and permitted assigns. Section 10.11 Assignment. This Agreement shall not be assignable or otherwise transferable by any party hereto without the prior written consent of the other parties hereto. Section 10.12 No Third Party Beneficiaries. Except as provided in Article IX with respect to indemnification of Indemnified Parties hereunder, nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and its respective heirs, legal representatives, successors and permitted assigns. Section 10.13 Amendment; Waivers, etc. No discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time. Neither the waiver by any of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure by any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or default of a similar nature, or as a waiver of any of such provisions, rights or privileges hereunder. No amendment or modification of this Agreement shall be effective unless in a writing executed by all the parties hereto. Section 10.14 Acknowledgment. Seller and Buyer each acknowledges that the representations, warranties, agreements and covenants contained in this Agreement and in any document, instrument or certificate delivered pursuant hereto or in connection herewith shall not be deemed waived or otherwise affected by or as a result of any investigation by the other. 34 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. FIDELITY NATIONAL INFORMATION SOLUTIONS, INC., a Delaware corporation By: /s/ Eric D. Swenson Name: Eric D. Swenson Title: President HOMESEEKERS.COM, INC., a Nevada corporation By: /s/ Thomas A. Chaffee, Jr. Name: Thomas A. Chaffee, Jr. Title: Sole Director/Acting CEO 35 EXHIBIT A FORM OF LEGAL OPINION [Subject to reasonable and customary exceptions and qualifications], we are of the opinion that: 1. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada. The Company is duly qualified to do business as a foreign corporation and is in good standing in each other state in which the nature of its activities or of its properties owned or leased makes such qualification necessary, except to the extent that failure to so qualify would not have a material adverse effect on the Company. 2. The Company has the corporate power and authority to own its properties and assets, to carry on its business as presently conducted, and to enter into the Agreement and perform its obligations thereunder. 3. The Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company. 4. The Agreement is a legal, valid and binding obligation of the Company enforceable against it in accordance with their respective terms, except as the enforceability thereof may be subject to or limited by (a) bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors, and (b) general equitable principles, regardless of whether the issue of enforceability is considered in a proceeding in equity or at law. 5. The execution and delivery of the Agreement and the performance by the Company of its terms (a) will not breach or result in a violation of the Company's Articles of Incorporation or Bylaws, or any judgment, order or decree of any court or arbitrator, known to us, to which the Company is a party or is subject, (b) will not, to our knowledge, constitute a material breach of the terms, conditions or provisions of, or constitute a default under, any material contract, undertaking, indenture or other agreement or instrument identified in the Company's Annual Report on Form 10-K for the year ended [December 31], 2000, or filed with the SEC subsequent to the filing of such Form 10-K; and (c) neither is prohibited by, nor subjects the Company to, a fine, penalty, or other similar sanction under, any statute or regulation of the State of [California], or any federal statute or regulation, of a type which are typically applicable to transactions similar to those transactions contemplated by the Agreement. 6. No consent, approval or authorization of, or designation, declaration or filing with, any governmental authority is required in connection with the valid execution, delivery and performance by the Company of the Agreement, other than such consents, approvals, authorizations, designations, declarations or filings as have been made or obtained on or before the date hereof or which are not required to be made or obtained until after the date hereof. 36 7. Except as disclosed in the Agreement or the exhibits and schedules delivered in connection therewith, there is, to our current actual knowledge, no action, suit or proceeding pending against the Company or its properties in any court or before any governmental authority or agency, or arbitration board or tribunal (a) which seeks to restrain, enjoin, prevent the consummation of, or otherwise challenge the Agreement or any of the transactions contemplated thereby, or (b) which, if adversely determined, could reasonably be expected to have a material adverse effect on the Company or its business or properties (taken as a whole). 37 EX-99.6 8 a77365ex99-6.txt EXHIBIT 99.6 Exhibit 99.6 EXECUTION COPY MANAGEMENT AGREEMENT This Management Agreement (this "Agreement") is made to be effective as of October 25, 2001, by and between Fidelity National Information Solutions, Inc., a Delaware corporation ("FNIS"), and HomeSeekers.com, Inc., a Nevada corporation (the "Company"). RECITALS A. The parties hereto have entered into that certain Asset Purchase Agreement dated October 25, 2001 (the "Purchase Agreement"). All capitalized terms not otherwise ascribed a meaning herein shall have the meanings ascribed such defined terms as set forth in the Purchase Agreement. B. The Purchase Agreement contemplates that the parties enter into this Agreement pursuant to which FNIS shall manage the Business from the Effective Date until terminated as provided herein. C. FNIS has employees with substantial expertise in the Business. D. The Company desires to engage the services of certain FNIS employees set forth on Exhibit A hereto (the "Management Team") to operate and manage the Business in a manner consistent with the terms and conditions of this Agreement, and FNIS desires to cause the Management Team to provide such services to the Company. E. For and in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, covenant and agree as follows. AGREEMENT 1. GENERAL MANAGEMENT AND OPERATIONS. Subject to the terms hereof, during the term of this Agreement the Management Team shall manage all aspects of the Business, including the day-to-day operations. Notwithstanding the foregoing, (i) the Management Team shall report to the Board of Directors of the Company (the "Board") and shall perform such duties as reasonably assigned by the Board from time to time, subject to the terms and conditions of the Purchase Agreement, and (ii) the business and affairs of the Company as a whole shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board. If any proposed action of any member of the Management Team requires, under applicable state law or this Agreement, the approval of the Board, such proposed action shall be promptly submitted for approval to the Board, and in the absence of such approval the proposed action shall not be undertaken. 2. SERVICES. The Management Team shall manage all services and support incidental to or required in connection with the operations of the Business, which services will generally include, without limitation, administration, management, financial services, MLS real estate services, purchasing, accounts payable, accounts receivables, information technology, employee compensation and benefits, human resources and record keeping (collectively, the "Services"). 3. EXPENSE REDUCTIONS. The Management Team and the Company shall use best efforts to prepare an expense reduction plan for the Business as soon as reasonably practicable following the date of this Agreement (the "Plan"). The Plan will be prepared by the parties in good faith and in the best interests of the Business and the Company, taking into account the interests of FNIS under the Purchase Agreement. The Management Team and the Company shall use best efforts to begin implementing the Plan no later than November 2, 2001. 4. MANAGEMENT FEE. In consideration for the Services, the Company shall pay FNIS a management fee equal to $1,000 per month during the term of this Agreement, which amount shall be pro-rated for any partial month. 5. TERM AND TERMINATION. (a) TERM. The term of this Agreement shall begin on the date hereof and continue until the earlier to occur of: (i) the Closing, or (iii) the termination of the Purchase Agreement. (b) EARLY TERMINATION FOR CAUSE. Upon the occurrence of a material failure by either party to perform any of its respective covenants or obligations set forth in this Agreement, which failure continues for a period of ten (10) business days after written notice thereof from the non-breaching party, the non-breaching party shall be entitled to terminate this Agreement immediately upon written notice to the breaching party. (c) TERMINATION BY FNIS WITHOUT CAUSE. FNIS may terminate this Agreement at any time, with or without cause, upon five (5) days written notice thereof to the Company. 6. MANAGEMENT TEAM. FNIS may, with notice to the Company, add members to or remove members from the Management Team or increase the size of the Management Team. 7. INDEPENDENT CONTRACTOR. FNIS acknowledges and agrees that it will cause the Management Team to perform the Services on an independent contractor basis, and that neither FNIS nor the Management Team is an agent of the Company nor has the authority to bind the Company. Notwithstanding the foregoing, the Management Team may, in the course of the performance of the Services as approved and supervised by the Board, act on behalf of the Company as necessary to cause the Services to be performed. FNIS shall be solely responsible for all employee matters concerning the members of the Management Team, including without limitation hiring, firing, compensating and insuring such members, and shall be legally liable for any claims brought against the Management Team on an employer liability basis not arising directly from the performance of the Services in accordance with this Agreement. 8. REMEDIES. In addition to any remedies provided herein, the parties hereto shall have all other remedies permitted in law or in equity under the laws of the State of California and the laws of the United States for any breach by the other party of the terms and conditions hereof. 9. LIMITATIONS ON LIABILITY; INDEMNIFICATION. (a) The members of the Management Team shall have no liability to the Company under this Agreement. FNIS shall have no liability to the Company under this Agreement for any act or failure to act by the members of the Management Team in connection with the 2 provision of the Services under this Agreement, unless such act or failure to act constitutes gross negligence, recklessness or intentional misconduct or bad faith. (b) The Company shall indemnify, hold harmless and provide a defense to FNIS, its affiliates and each member of the Management Team against all claims, costs, demands, damages, losses, expenses or liabilities to or as a result of claims asserted by persons or entities not a party to this Agreement, resulting from or arising out of the provision by any member of the Management Team of the Services; provided, however, that the Company shall not so indemnify FNIS or any member of the Management Team against any such claim, cost, demand, damage, loss, expense or liability arising out of or resulting in any material respect from FNIS's or such Management Team member's gross negligence, recklessness or intentional misconduct or bad faith or FNIS's material breach of this Agreement. (c) FNIS shall indemnify, hold harmless and provide a defense to the Company and its affiliates against all claims, costs, demands, damages, losses, expenses or liabilities to or as a result of claims asserted by persons or entities not a party to this Agreement resulting from or arising out of or resulting in any material respect from FNIS's or any Management Team member's gross negligence, recklessness or intentional misconduct or bad faith or FNIS's material breach of this Agreement. 10. ASSIGNMENT. No party to this Agreement may assign all or any part of its interest in this Agreement without the prior express written consent of the other party, which consent shall not be unreasonably withheld. 11. INVALIDITY. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be valid under applicable law, but if any provision of this Agreement shall be invalid or prohibited hereunder, such provision shall be ineffective to the extent of such prohibition or invalidation, but shall not invalidate the remainder of such provision or the remaining provisions of this Agreement. 12. NOTICES. All notices shall be in writing and shall be sent by (i) personal delivery; (ii) first class mail, postage prepaid; (iii) national overnight courier, or (iv) telecopier, with written confirmation sent via any of the methods set forth in preceding clauses (i) through (iii). Notice shall be deemed given on the day such notice is delivered to the recipient or, with respect to any mailing, three days after such notice is deposited in the mail. Unless otherwise specified by a notice to the parties hereto, all notices shall be given or made upon the parties hereto at the address set forth below: IF TO THE COMPANY: HOMESEEKERS.COM, INC. ____________________________ ____________________________ Attn: Thomas Chaffee Fax: ____________________________ 3 IF TO FNIS: Fidelity National Information Solutions, Inc. 4050 Calle Real, Suite 100 Santa Barbara, California 93110 Attn: Eric Swenson Fax: (805) 696-7822 13. ARBITRATION. In the event of any dispute, claim question or disagreement arising out of or relating to this Agreement or the breach thereof, the parties hereto shall use their best efforts to settle such disputes, claims, questions or disagreements. To this effect, the parties shall consult and negotiate with each other, in good faith and, recognizing their mutual interest, attempt to reach a just and equitable solution satisfactory to both parties. If they do not reach such a resolution within a period of sixty (60) days, then upon notice of either party to the other, disputes, claim, questions or differences shall be finally settled by arbitration in Santa Barbara, California pursuant to the rules of the American Arbitration Association except as otherwise provided herein. In rendering any award, the arbitrator shall determine the rights and obligations of the parties according to substantive and procedural laws of Delaware. Any provision or remedy that would be available by a court of law shall be available from the arbitrator to the parties, pending arbitration. The parties may apply to any court having jurisdiction hereof and seeking injunctive relief so as to maintain the status quo until such time as the arbitration award is rendered or the controversy is otherwise resolved. The arbitrators will be selected from the panel of persons having experience with and knowledge of the real estate transaction industry. Parties hereto agree that no one may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all the parties. The parties shall each bear their own costs and expenses in connection with arbitration. 14. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties hereto with respect to the matters set forth herein, and supersedes all prior arrangements and understandings between the parties, and no other agreement, statement, or promise made by either party hereto which is not contained herein shall be binding or valid. 15. AMENDMENT. This Agreement may only be amended by written document signed by each of the parties hereto. 16. COUNTERPARTS. This Agreement shall be executed simultaneously or in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 17. GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California. 18. HEADINGS. The headings or captions of sections in this Agreement are for convenience and reference only and in no way define, limit, or describe the scope or intent of this Agreement or the provisions of such sections. 4 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. THE "COMPANY" HomeSeekers.com, Inc., a Nevada corporation By: /s/ Thomas A. Chaffee, Jr. Its: Sole Director/Acting CEO "FNIS" Fidelity National Information Solutions, Inc., a Delaware corporation By: /s/ Eric D. Swenson Its: President 5 EXECUTION COPY EXHIBIT A MEMBERS OF MANAGEMENT TEAM Garry Wright Tim Harrison Richard Jacobson -----END PRIVACY-ENHANCED MESSAGE-----