ASSET PURCHASE AGREEMENT
ASSET
PURCHASE AGREEMENT, dated as of January 15, 2008 (the “Agreement”), by and among
XxxXxxxxxxxxxXxxxxxxx.xxx, Inc., a corporation existing under the laws of Nevada
(the “Parent”), RazorData Corp., a corporation existing under the laws of Nevada
and a wholly owned subsidiary of Parent (“Acquisition Sub”), Razor Data, LLC, a
privately held limited liability company existing under the laws of Utah (the
“Seller”), Boya Systems, LLC, a limited liability company existing under the
laws of Utah (“Boya”) and Rabble, LLC, a limited liability company existing
under the laws of Utah (“Rabble” and collectively with Boya, the
“Owners”).
W
I T N E S S E T H:
WHEREAS,
the Seller is engaged in the business of providing customers in the financial
community with stock market information and tools; comprehensive database
creation and management; distributed web hosting and network environments and
complete eContent creation and management (the “Business”); and
WHEREAS,
subject to the terms and conditions hereof, Seller desires to sell, transfer
and
assign to Acquisition Sub, and Acquisition Sub desires to purchase from Seller,
all of the properties, rights and assets constituting the Business.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE
I.
PURCHASE
AND SALE OF ASSETS.
1.1. Sale
of Assets.
Seller
agrees to sell, assign, transfer and deliver to Acquisition Sub, and Acquisition
Sub agrees to purchase from Seller, all of Seller’s right, title and interest in
and to all of the properties, assets and business of the Business, of every
kind
and description, tangible and intangible, real, personal or mixed, and wherever
located, but excluding the Excluded Assets, including, without limitation,
the
following:
(a) Equipment.
All
assets of any kind or nature, including all fixed assets, equipment, furniture,
fixtures, leasehold improvements located within the Seller’s office located at
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxx 00000, inventory, office
materials, software, supplies and other tangible personal property of every
kind
and description owned by Seller and used or held for use in connection with
the
Business, all as set forth on Schedule 1.1(a) attached hereto
(“Equipment”);
(b) Contracts.
All of
the rights of Seller under, and interest of Seller in and to, all contracts
relating to the Business, a true, correct and complete list of which contracts
is attached hereto as Schedule 1.1(b) (“Contracts”);
(c) Intellectual
Property.
All of
Seller’s Intellectual Property relating to the Business, as set forth on
Schedule 1.1(c) attached hereto;
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(d) Goodwill.
All of
the goodwill of Seller in, and the going concern value of, the Business, and
all
of the business and customer lists and accounts, proprietary information,
marketing materials and trade secrets related to the Business;
(e) Claims.
All
claims, entitlements, rebates, refunds, settlements, awards or other rights
related to any Assets or the operation of the Business prior to the Closing
Date;
(f) Records.
All of
Seller’s customer logs, location files and records, and other business files and
records, in each case relating to the Business; and
The
assets, properties and business of Seller being sold to and purchased by Parent
under this Section 1.1 are referred to herein collectively as the
“Assets.”
1.2. Excluded
Assets.
There
shall be excluded from the Assets and retained by Seller, the following assets
(the “Excluded Assets”):
(a) Assets.
All
assets identified on Schedule 1.2(a) attached hereto, and all other assets
of
Seller which are not used or held for use in connection with the Business or
otherwise necessary to the operation of the Business; and
(b) Membership
Records.
All of
Seller’s membership and other organizational records.
1.3. Assumed
Liabilities; Excluded Liabilities; Employees.
(a) Assumed
Liabilities.
Acquisition Sub shall accept and assume, and shall become and be fully liable
and responsible for, and other than as expressly set forth herein Seller shall
have no further liability or responsibility for or with respect to, (i)
liabilities and obligations arising out of events occurring on and after the
Closing Date related to Acquisition Sub’s ownership of the Assets and
Acquisition Sub’s operation of the Business after the consummation of the
transactions contemplated herein; (ii) all obligations and liabilities of Seller
which are to be performed after the Closing Date arising under the Contracts;
and (iii) the liabilities identified on Schedule 1.3(a) attached hereto
(collectively, the “Assumed Liabilities”). The assumption of the Assumed
Liabilities by Acquisition Sub hereunder shall not grant any new, or enlarge
any
existing, rights of third parties under contracts or arrangements with Parent
or
Seller or any of their respective affiliates or subsidiaries.
(b) Excluded
Liabilities.
It is
expressly understood that, except for the Assumed Liabilities, Acquisition
Sub
shall not assume, pay or be liable for any liability or obligation of Seller
of
any kind or nature at any time existing or asserted, whether, known, unknown,
fixed, contingent or otherwise, not specifically assumed herein by Parent or
Acquisition Sub, and any liability or obligation relating to, resulting from
or
arising out of (i) the Excluded Assets, (ii) the employees of the Business
or
(iii) any fact existing or event occurring prior to, or relating to the
operation of the Business prior to, the date hereof.
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(c) Employees,
Wages and Benefits.
(i) Seller
shall terminate or reassign all of its employees related to the Business
effective as of the Closing Date and neither Parent nor Acquisition Sub shall
assume or have any obligations or liabilities with respect to such employees
or
such terminations, including, without limitation, any severance obligation.
(ii) Parent
and Acquisition Sub specifically reserve the right, on or after the Closing
Date, to employ or reject any of Seller’s employees or other applicants in its
sole and absolute discretion. Nothing in this Agreement shall be construed
as a
commitment or obligation of Parent to accept for employment, or otherwise
continue the employment of, any of Seller’s employees, and no employee shall be
a third party beneficiary of this Agreement.
(iii) Seller
shall pay all wages, salaries, commissions, and the cost of all fringe benefits
provided to its employees which shall have become due for work performed as
of
and through the Closing Date, and Seller shall collect and pay all Taxes in
respect of such wages, salaries, commissions and benefits.
(iv) Seller
acknowledges and agrees that neither Parent nor Acquisition Sub shall acquire
any rights or interests of Seller in, or assume or have any obligations or
liabilities of Seller under, any benefit plans maintained by Seller, or for
the
benefit of any employees of Seller, including, without limitation, obligations
for severance; provided, however, that for the year 2008 Acquisition Sub shall
honor all vacation policies of Seller with respect to former employees of Seller
who are hired by Acquisition Sub.
1.4. Purchase
Price; Adjustment; Payment.
(a) Purchase
Price.
The
purchase price for the Assets, and subject to the assumption by Acquisition
Sub
of the Assumed Liabilities, shall be (i) an aggregate of Three Million Dollars
($3,000,000.00) evidenced by convertible debentures, substantially in the form
of Exhibit A hereto (the “Debentures”), and (ii) an aggregate of Thirty-Eight
Million (38,000,000) shares of common stock, par value $0.001 per share, of
Parent (the “Common Stock” and collectively with the Debentures, the “Purchase
Price”), which shall be payable to the Owners, in accordance with Section
1.4(b).
(b) Payment
of Purchase Price.
The
Parent shall deliver the Purchase Price to the individuals and/or entities
designated by the Owners, as set forth on Schedule 1.4(b) annexed
hereto:
(i) on
the
Closing Date hereof (as hereafter defined), (a) the Debentures, and (b) an
aggregate of Thirty-Two Million (32,000,000) shares of Common
Stock;
(ii) on
the
two year anniversary of the Closing Date, an aggregate of Four Million
(4,000,000) shares of Common Stock; and
(iii) on
the
three year anniversary of the Closing Date, an aggregate of Two Million
(2,000,000) shares of Common Stock.
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1.5. Purchase
Price Allocation.
Parent,
Acquisition Sub and Seller shall mutually agree on the allocation of the
Purchase Price. Such allocation shall be binding upon Parent, Acquisition Sub
and Seller for all purposes (including financial accounting purposes, financial
and regulatory reporting purposes and tax purposes). Parent, Acquisition Sub
and
Seller each further agrees to file its Federal income tax returns and its other
tax returns reflecting such allocation, Form 8594 and any other reports required
by Section 1060 of the Internal Revenue Code of 1986, as amended (the
“Code”).
1.6. Records
and Contracts.
Seller
shall deliver to Parent and Acquisition Sub all of the Contracts, with such
assignments thereof and consents to assignments as are necessary to assure
Parent and Acquisition Sub of the full benefit of the same. Seller shall also
deliver to Parent and Acquisition Sub all of Seller’s files and records
constituting Assets.
1.7. Further
Assurances.
Seller
shall, from time to time after the consummation of the transactions contemplated
herein, at the request of Parent or Acquisition Sub and without further
consideration, execute and deliver further instruments of transfer and
assignment and take such other action as Parent or Acquisition Sub may
reasonably require to more effectively transfer and assign to, and vest in,
Parent or Acquisition Sub the Assets free and clear of all Liens.
1.8. Sales
and Transfer Taxes.
All
sales, transfer, use, recordation, documentary, stamp, excise taxes, personal
property taxes, fees and duties (including any real estate transfer taxes)
under
applicable law incurred in connection with this Agreement or the transactions
contemplated hereby will be borne and paid by Parent.
1.9. Transfer
of Subject Assets.
Seller
shall deliver or cause to be delivered to Acquisition Sub good and sufficient
instruments of transfer transferring to Acquisition Sub title to all of the
Assets, together with all required consents. Such instruments of transfer (a)
shall contain appropriate warranties and covenants which are usual and customary
for transferring the type of property involved under the laws of the
jurisdictions applicable to such transfers, (b) shall be in form and substance
reasonably satisfactory to Acquisition Sub and its counsel, (c) shall
effectively vest in Acquisition Sub good and marketable title to all of the
Assets free and clear of all Liens (as hereafter defined), and (d) where
applicable, shall be accompanied by evidence of the discharge of all Liens
against the Assets.
ARTICLE
II.
CLOSING
AND TERMINATION
2.1. Closing
Date.
Subject
to the satisfaction of the conditions set forth in Sections 6.1 and 6.2 hereof
(or the waiver thereof by the party entitled to waive that condition), the
closing of the sale and purchase of the Assets provided for in Section 1.1
hereof (the “Closing”) shall take place at the offices of Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP located at 00 Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, XX 00000 (or at such other place as the parties may mutually agree
upon) on or before January 15, 2008. The date on which the Closing shall be
held
is referred to in this Agreement as the “Closing Date”
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2.2. Termination
of Agreement. This
Agreement may be terminated prior to the Closing as follows:
(a) at
the
election of the Seller or the Parent on or after January 15, 2008, if the
Closing shall not have occurred by the close of business on such date, provided
that the terminating party is not in default of any of its obligations
hereunder;
(b) by
mutual
written consent of the Seller and the Parent; or
(c) by
the
Seller or the Parent if there shall be in effect a final nonappealable order
of
a court, government or governmental agency or body of competent jurisdiction
(“Governmental Body”) of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
it being agreed that the parties hereto shall promptly appeal any adverse
determination which is not nonappealable (and pursue such appeal with reasonable
diligence).
2.3. Procedure
Upon Termination.
In the
event of termination and abandonment by the Parent or the Seller, or both,
pursuant to Section 2.2 hereof, written notice thereof shall forthwith be given
to the other party or parties, and this Agreement shall terminate, and the
purchase of the Assets hereunder shall be abandoned, without further action
by
the Parent or the Seller. If this Agreement is terminated as provided herein
each party shall redeliver all documents, work papers and other material of
any
other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the
same.
2.4. Effect
of Termination.
In the
event that this Agreement is validly terminated as provided herein, then each
of
the parties shall be relieved of their duties and obligations arising under
this
Agreement after the date of such termination and such termination shall be
without liability to the Parent or the Seller; provided, however, that nothing
in this Section 2.4 shall relieve the Parent or the Seller of any liability
for
a breach of this Agreement.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF THE SELLER AND THE OWNERS
The
Seller and the Owners, jointly and severally hereby represent and warrant to
the
Parent and Acquisition Sub that:
3.1. Organization
and Good Standing.
The
Seller is a limited liability company duly organized, validly existing and
in
good standing under the laws of the jurisdiction of its formation as set forth
above and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now conducted. The Seller is duly
qualified or authorized to do business and is in good standing under the laws
of
each jurisdiction in which it owns or leases real property and each other
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification or authorization, except where failure
to
be so qualified would not have a material adverse effect on the business, assets
or financial condition of the Seller taken as a whole (“Material Adverse
Effect”).
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3.2. Authorization
of Agreement.
The
Seller and the Owners have all requisite membership or personal, as the case
may
be, power, authority and legal capacity to execute and deliver this Agreement,
and each other agreement, document, or instrument or certificate contemplated
by
this Agreement or to be executed by the Seller or the Owners in connection
with
the consummation of the transactions contemplated by this Agreement (together
with this Agreement, the “Seller Documents”), and to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and each of the Seller
Documents will be at or prior to the Closing, duly and validly executed and
delivered by the Seller or the Owners and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the Seller Documents when so executed and delivered
will constitute, legal, valid and binding obligations of the Seller, enforceable
against the Seller or the Owners, as applicable, in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in
equity).
3.3. Ownership
of Seller.
The
Owners collectively own 100% of the membership interests of the Seller, free
and
clear of any and all liens, charges or encumbrances or any kind or
nature.
3.4. No
Subsidiaries.
The
Seller has no subsidiaries.
3.5. Conflicts;
Consents of Third Parties.
(a) Except
as
set forth in Schedule 3.5(a), none of the execution and delivery by the Seller
or Owners of this Agreement and the Seller Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Seller with
any of the provisions hereof or thereof will (i) conflict with, or result in
the
breach of, any provision of the limited liability company agreement of the
Seller; (ii) conflict with, violate, result in the breach or termination of,
or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Seller or any Owner
is
a party or by which any of them or any of their respective properties or assets
is bound; (iii) violate any statute, rule, regulation, order or decree of any
governmental body or authority by which the Seller is bound; or (iv) result
in
the creation of any Lien upon the properties or assets of the Seller except,
in
case of clauses (ii), (iii) and (iv), for such violations, breaches or defaults
as would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) No
consent, waiver, approval, order, permit or authorization of, or declaration
or
filing with, or notification to, any person or Governmental Body is required
on
the part of the Seller, the Seller in connection with the execution and delivery
of this Agreement or the Seller Documents, or the compliance by the Seller
as
the case may be, with any of the provisions hereof or thereof.
3.6. Ownership
and Transfer of Assets.
Seller
has good and marketable title to all of the Assets free and clear of all
mortgages, pledges, security interests, charges, liens, restrictions and
encumbrances of any kind (collectively, “Liens”) whatsoever. Upon the sale,
assignment, transfer and delivery of the Assets to the Acquisition Sub hereunder
and under the Seller Documents, there will be vested in the Acquisition Sub
good, marketable and indefeasible title to the Assets, free and clear of all
Liens. The Assets include all of the assets and properties (i) held for use
by
Seller to conduct the Business as presently conducted and (ii) necessary for
Acquisition Sub to operate the Business in the same manner as such business
is
currently operated by Seller. All of the tangible Assets are in good repair,
have been well maintained and are in good operating condition, do not require
any material modifications or repairs, and comply in all material respects
with
applicable laws, ordinances and regulations, ordinary wear and tear
excepted.
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3.7. Financial
Statements.
The
Seller has delivered or caused to be delivered to the Parent copies of (i)
the
audited consolidated balance sheets of the Seller as of December 31, 2006 and
2005 and the related audited consolidated statements of income and of cash
flows
of the Seller for the years then ended and (ii) the unaudited but reviewed
consolidated balance sheet of the Seller as of September 30, 2007 and the
related consolidated statements of income and cash flows of the Seller for
the
nine-month period then ended (such audited and unaudited statements, including
the related notes and schedules thereto, are referred to herein as the “Seller
Financial Statements”). Each of the Seller Financial Statements is complete and
correct in all material respects, has been and will be prepared in accordance
with GAAP (subject to normal year-end adjustments in the case of the unaudited
statements) and in conformity with the practices consistently applied by the
Seller without modification of the accounting principles used in the preparation
thereof and will present fairly the financial position, results of operations
and cash flows of the Seller as at the dates and for the periods indicated.
For
the purposes hereof, the unaudited but reviewed consolidated balance sheet
of
the Seller as of September 30, 2007 is referred to as the “Seller Balance Sheet”
and September 30, 2007 is referred to as the “Seller Balance Sheet
Date”.
3.8. No
Undisclosed Liabilities.
The
Seller has no indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise, and whether due or to become due)
that would have been required to be reflected in, reserved against or otherwise
described on the Seller Balance Sheet or in the notes thereto in accordance
with
GAAP which was not fully reflected in, reserved against or otherwise described
in the Seller Balance Sheet or the notes thereto or was not incurred in the
ordinary course of business consistent with past practice since the Seller
Balance Sheet Date.
3.9. Absence
of Certain Developments.
Except
as expressly contemplated by this Agreement or as set forth on Schedule 3.9,
since the Seller Balance Sheet Date:
(i) there
has
not been an event which had a Material Adverse Effect nor has there occurred
any
event which is reasonably likely to result in a Material Adverse
Effect;
(ii) there
has
not been any damage, destruction or loss, whether or not covered by insurance,
with respect to the property and assets of the Seller having a replacement
cost
of more than $10,000 for any single loss or $25,000 for all such
losses;
(iii) there
has
not been any declaration, setting aside or payment of any distribution in
respect of any membership interest of the Seller or any repurchase, redemption
or other acquisition by the Seller of any outstanding membership, or other
ownership interest in, the Seller;
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(iv) the
Seller has not awarded or paid any bonuses to employees of the Seller with
respect to the fiscal year ended 2006, except to the extent accrued on the
Seller Balance Sheet or entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such agreement) or agreed to
increase the compensation payable or to become payable by it to any of the
Seller’s directors, officers, employees, agents or representatives or agreed to
increase the coverage or benefits available under any severance pay, termination
pay, vacation pay, company awards, salary continuation for disability, sick
leave, deferred compensation, bonus or other incentive compensation, insurance,
pension or other employee benefit plan, payment or arrangement made to, for
or
with such directors, officers, employees, agents or representatives (other
than
normal increases in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a material increase
in
the benefits or compensation expense of the Seller);
(v) there
has
not been any change by the Seller in accounting or Tax reporting principles,
methods or policies;
(vi) the
Seller has not entered into any transaction or Contract or conducted its
business other than in the ordinary course consistent with past
practice;
(vii) the
Seller has not failed to promptly pay and discharge current liabilities except
where disputed in good faith by appropriate proceedings;
(viii) the
Seller has not made any loans, advances or capital contributions to, or
investments in, any person or paid any fees or expenses to the Seller or any
Affiliate of the Seller;
(ix) the
Seller has not mortgaged, pledged or subjected to any Lien any of its assets,
or
acquired any assets or sold, assigned, transferred, conveyed, leased or
otherwise disposed of any assets of the Seller, except for assets acquired
or
sold, assigned, transferred, conveyed, leased or otherwise disposed of in the
ordinary course of business consistent with past practice;
(x) the
Seller has not discharged or satisfied any Lien, or paid any obligation or
liability (fixed or contingent), except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not be material
to the Seller;
(xi) the
Seller has not canceled or compromised any debt or claim or amended, canceled,
terminated, relinquished, waived or released any Contract or right except in
the
ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Seller;
(xii) the
Seller has not made or committed to make any capital expenditures or capital
additions or betterments in excess of $10,000 individually or $25,000 in the
aggregate;
(xiii) the
Seller has not instituted or settled any material legal proceeding;
and
(xiv) the
Seller has not agreed to do anything set forth in this Section 3.9.
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3.10. Taxes.
(a) Except
as
set forth on Schedule 3.10 (A) all Tax returns required to be filed by or on
behalf of the Seller have been properly prepared and duly and timely filed
with
the appropriate taxing authorities in all jurisdictions in which such Tax
returns are required to be filed (after giving effect to any valid extensions
of
time in which to make such filings), and all such Tax returns were true,
complete and correct in all material respects; (B) all Taxes payable by or
on
behalf of the Seller or in respect of its income, assets or operations have
been
fully and timely paid, and adequate reserves or accruals for Taxes have been
provided in the Seller Balance Sheet with respect to any period for which Tax
Returns have not yet been filed or for which Taxes are not yet due and owing;
and (C) the Seller has not executed or filed with the Internal Revenue Service
(the “IRS”) or any other taxing authority any agreement, waiver or other
document or arrangement extending or having the effect of extending the period
for assessment or collection of Taxes (including, but not limited to, any
applicable statute of limitation), and no power of attorney with respect to
any
Tax matter is currently in force. “Tax or Taxes” means all federal, state, local
or other taxes or similar governmental charges, fees, levies or
assessments.
(b) The
Seller has complied in all material respects with all applicable Laws (as
defined in Section 3.18), rules and regulations relating to the payment and
withholding of Taxes and has duly and timely withheld from employee salaries,
wages and other compensation and has paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under all Laws.
(c) Parent
has received complete copies of (A) all federal, state, local and foreign income
or franchise Tax Returns of the Seller and (B) any audit report issued within
the last three (3) years relating to any material Taxes due from or with respect
to the its income, assets or operations. All income and franchise Tax returns
filed by or on behalf of the Seller for the taxable years ended on the
respective dates set forth on Schedule 3.10 have been examined by the relevant
taxing authority or the statute of limitations with respect to such Tax Returns
has expired.
(d) Schedule
3.10 lists all material types of Taxes paid and material types of Tax Returns
filed by or on behalf of the Seller. Except as set forth on Schedule 3.10,
no
claim has been made by a taxing authority in a jurisdiction where the Seller
does not file Tax Returns such that it is or may be subject to taxation by
that
jurisdiction.
(e) Except
as
set forth on Schedule 3.10, all deficiencies asserted or assessments made as
a
result of any examinations by the IRS or any other taxing authority of the
Tax
Returns of or covering or including the Seller that are owed by the Seller
have
been fully paid, and there are no other audits or investigations by any taxing
authority in progress, nor has the Seller received any written notice from
any
taxing authority that it intends to conduct such an audit or investigation.
No
issue has been raised in writing by a federal, state, local or foreign taxing
authority in any current or prior examination which, by application of the
same
or similar principles, could reasonably be expected to result in a proposed
deficiency for any subsequent taxable period.
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(f) Except
as
set forth on Schedule 3.10, the Seller has not (A) agreed to or is not required
to make any adjustments pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by the Seller or has any knowledge that the IRS has proposed
any such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any changes in
accounting methods that relate to the business or operations of the Seller,
(B)
executed or entered into a closing agreement pursuant to Section 7121 of the
Code or any predecessor provision thereof or any similar provision of state,
local or foreign law with respect to the Seller, or (C) requested any extension
of time within which to file any Tax Return, which Tax Return has since not
been
filed within the period of limitations.
(g) No
property owned by the Seller is (i) property required to be treated as being
owned by another person pursuant to the provisions of Section 168(f)(8) of
the
Internal Revenue Code of 1954, as amended and in effect immediately prior to
the
enactment of the Tax Reform Act of 1986, (ii) constitutes “tax-exempt use
property” within the meaning of Section 168(h)(1) of the Code or (iii) is
“tax-exempt bond financed property” within the meaning of Section 168(g) of the
Code.
(h) The
Seller is not a foreign person within the meaning of Section 1445 of the
Code.
(i) The
Seller is not a party to any tax sharing or similar agreement or arrangement
(whether or not written) pursuant to which it will have any obligation to make
any payments after the Closing.
(j) There
is
no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount
that
would not be deductible by the Parent, the Affiliates or their respective
affiliates by reason of Section 280G of the Code, or would constitute
compensation in excess of the limitation set forth in Section 162(m) of the
Code.
(k) The
Seller is not subject to any private letter ruling of the IRS or comparable
rulings of other taxing authorities.
(l) There
are
no liens as a result of any unpaid Taxes upon any of the assets of the
Seller.
(m) Except
as
set forth on Schedule 3.10, the Seller has no elections in effect for federal
income tax purposes under Sections 108, 168, 441, 463, 472, 1017, 1033 or 4977
of the Code.
(n) The
Seller has never owned any subsidiaries and has never been a member of any
consolidated, combined or affiliated group of corporations for any Tax
purposes.
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3.11. Real
Property.
(a) Seller
does not own any interest in any real property. Schedule 3.11(a) sets forth
a
complete list of all real property and interests in real property leased by
the
Seller (individually, a “Real Property Lease” and the real properties specified
in such leases being referred to herein individually as a “Seller Property” and
collectively as the “Seller Properties”) as lessee or lessor. The Seller
Property constitutes all interests in real property currently used or currently
held for use in connection with the Business of the Seller and which are
necessary for the continued operation of the Business of the Seller as the
Business is currently conducted. The Seller has a valid and enforceable
leasehold interest under each of the Real Property Leases, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in
a
proceeding at law or in equity), and Seller has not received any written notice
of any default or event that with notice or lapse of time, or both, would
constitute a default by the Seller under any of the Real Property Leases. All
of
the Seller Property, buildings, fixtures and improvements thereon owned or
leased by the Seller are in good operating condition and repair (subject to
normal wear and tear). The Seller has delivered or otherwise made available
to
the Parent true, correct and complete copies of the Real Property Leases,
together with all amendments, modifications or supplements, if any,
thereto.
(b) The
Seller has all material certificates of occupancy and permits of any
Governmental Body necessary or useful for the current use and operation of
each
Seller Property, and the Seller has fully complied with all material conditions
of the permits applicable to it. No default or violation, or event that with
the
lapse of time or giving of notice or both would become a default or violation,
has occurred in the due observance of any permit.
(c) There
does not exist any actual or, to the best knowledge of the Seller, threatened
or
contemplated condemnation or eminent domain proceedings that affect any Seller
Property or any part thereof, and the Seller has not received any notice, oral
or written, of the intention of any Governmental Body or other person to take
or
use all or any part thereof.
(d) The
Seller has not received any written notice from any insurance company that
has
issued a policy with respect to any Seller Property requiring performance of
any
structural or other repairs or alterations to such Seller Property.
(e) The
Seller does not own or hold, and is not obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any real estate or any portion thereof or interest
therein.
3.12. Tangible
Personal Property.
(a) Schedule
3.12(a) sets forth all leases of personal property (“Personal Property Leases”)
involving annual payments in excess of $10,000 relating to personal property
used in the business of the Seller or to which the Seller is a party or by
which
the properties or assets of the Seller is bound. The Seller has delivered or
otherwise made available to the Parent true, correct and complete copies of
the
Personal Property Leases, together with all amendments, modifications or
supplements thereto.
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(b) The
Seller has a valid leasehold interest under each of the Personal Property Leases
under which it is a lessee, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and subject, as to enforceability, to general principles
of
equity (regardless of whether enforcement is sought in a proceeding at law
or in
equity), and there is no default under any Personal Property Lease by the Seller
or, to the best knowledge of the Seller, by any other party thereto, and no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder.
(c) The
Seller has good and marketable title to all of the items of tangible personal
property reflected in the Seller Balance Sheet (except as sold or disposed
of
subsequent to the date thereof in the ordinary course of business consistent
with past practice), free and clear of any and all liens other than as set
forth
on Schedule 3.12. All such items of tangible personal property which,
individually or in the aggregate, are material to the operation of the business
of the Seller are in good condition and in a state of good maintenance and
repair (ordinary wear and tear excepted) and are suitable for the purposes
used.
(d) All
of
the items of tangible personal property used by the Seller under the Personal
Property Leases are in good condition and repair (ordinary wear and tear
excepted) and are suitable for the purposes used.
3.13. Intangible
Property.
Schedule
3.13 contains a complete and correct list of each patent, trademark, trade
name,
service xxxx and copyright owned or used by the Seller as well as all
registrations thereof and pending applications therefor, and each license or
other agreement relating thereto. Except as set forth on Schedule 3.13, each
of
the foregoing is owned by the party shown on such Schedule as owning the same,
free and clear of all mortgages, claims, liens, security interests, charges
and
encumbrances and is in good standing and not the subject of any challenge.
There
have been no claims made and the Seller has not received any notice or otherwise
knows or has reason to believe that any of the foregoing is invalid or conflicts
with the asserted rights of others. The Seller possesses, owns or licenses
all
patents, patent licenses, trade names, trademarks, service marks, brand marks,
brand names, copyrights, know-how, formulate and other proprietary and trade
rights necessary for the conduct of its business as now conducted, not subject
to any restrictions and without any known conflict with the rights of others
and
has not forfeited or otherwise relinquished any such patent, patent license,
trade name, trademark, service xxxx, brand xxxx, brand name, copyright,
know-how, formulate or other proprietary right necessary for the conduct of
its
business as conducted on the date hereof. The Seller is under no obligation
to
pay any royalties or similar payments in connection with any license to any
Affiliate thereof. As used in this Agreement, “Affiliate” means, with respect to
any person, any other person directly or indirectly controlling, controlled
by
or under common control with such person and for purposes of individuals,
Affiliates would include an individual’s spouse and minor children.
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3.14. Material
Contracts.
Schedule
3.14 sets forth all of the following Contracts to which the Seller is a party
or
by which it is bound (collectively, the “Material Contracts”): (i) Contracts
with any current officer or director of the Seller; (ii) Contracts with any
labor union or association representing any employee of the Seller; (iii)
Contracts pursuant to which any party is required to purchase or sell a stated
portion of its requirements or output from or to another party; (iv) Contracts
for the sale of any of the assets of the Seller other than in the ordinary
course of business or for the grant to any person of any preferential rights
to
purchase any of its assets; (v) joint venture agreements; (vi) material
Contracts containing covenants of the Seller not to compete in any line of
business or with any person in any geographical area or covenants of any other
person not to compete with the Seller in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by the Seller
of
any operating business or the capital stock of any other person; (viii)
Contracts relating to the borrowing of money; or (ix) any other Contracts,
other
than Real Property Leases, which involve the expenditure of more than $25,000
in
the aggregate or $10,000 annually or require performance by any party more
than
one year from the date hereof. There have been made available to the Parent,
its
affiliates and their representatives true and complete copies of all of the
Material Contracts. Except as set forth on Schedule 3.14, all of the Material
Contracts and other agreements are in full force and effect and are the legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity). Except
as
set forth on Schedule 3.14, the Seller is not in default in any material respect
under any Material Contracts, nor, to the knowledge of the Seller, is any other
party to any Material Contract in default thereunder in any material
respect.
3.15. Employee
Benefits.
(a) Schedule
3.15(a) sets forth a complete and correct list of (i) all “employee benefit
plans”, as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), and any other pension plans or employee
benefit arrangements, programs or payroll practices (including, without
limitation, severance pay, vacation pay, company awards, salary continuation
for
disability, sick leave, retirement, deferred compensation, bonus or other
incentive compensation, stock purchase arrangements or policies,
hospitalization, medical insurance, life insurance and scholarship programs)
maintained by the Seller or to which the Seller contributes or is obligated
to
contribute thereunder with respect to employees of the Seller (“Employee Benefit
Plans”) and (ii) all “employee pension plans”, as defined in Section 3(2) of
ERISA, maintained by the Seller or any trade or business (whether or not
incorporated) which are under control, or which are treated as a single
employer, with Seller under Section 414(b), (c), (m) or (o) of the Code (“ERISA
Affiliate”) or to which the Seller or any ERISA Affiliate contributed or is
obligated to contribute thereunder (“Pension Plans”). Schedule 3.15(a)
identifies, in separate categories, Employee Benefit Plans or Pension Plans
that
are (i) subject to Section 4063 and 4064 of ERISA (“Multiple Employer Plans”),
(ii) multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
(“Multiemployer Plans”) or (iii) “Benefit Plans”, within the meaning of Section
5000(b)(1) of the Code providing continuing benefits after the termination
of
employment (other than as required by Section 4980B of the Code or Part 6 of
Title I of ERISA and at the former employee’s or his beneficiary’s sole
expense).
(b) Each
of
the Employee Benefit Plans and Pension Plans intended to qualify under Section
401 of the Code (“Qualified Plans”) so qualifies and the trusts maintained
thereto are exempt from federal income taxation under Section 501 of the Code,
and, except as disclosed on Schedule 3.15(b), nothing has occurred with respect
to the operation of any such plan which could cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code.
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(c) All
contributions and premiums required by Law or by the terms of any Employee
Benefit Plan or Pension Plan which are money purchase plans or any agreement
relating thereto have been timely made (without regard to any waivers granted
with respect thereto) to any funds or trusts established thereunder or in
connection therewith, and no accumulated funding deficiencies exist in any
of
such plans subject to Section 412 of the Code.
(d) No
Employee Benefit Plans and Pension Plans are subject to Title IV of
ERISA.
(e) Each
of
the Employee Benefit Plans and Pension Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable
Law.
3.16. Labor.
(a) Except
as
set forth on Schedule 3.16(a), the Seller is not party to any labor or
collective bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of the Seller. The Seller has delivered
or
otherwise made available to the Parent true, correct and complete copies of
the
labor or collective bargaining agreements listed on Schedule 3.16(a), together
with all amendments, modifications or supplements thereto.
(b) Except
as
set forth on Schedule 3.16(b), no employees of the Seller are represented by
any
labor organization. No labor organization or group of employees of the Seller
has made a pending demand for recognition, and there are no representation
proceedings or petitions seeking a representation proceeding presently pending
or, to the best knowledge of the Seller, threatened to be brought or filed,
with
the National Labor Relations Board or other labor relations tribunal. There
is
no organizing activity involving the Seller pending or, to the best knowledge
of
the Seller, threatened by any labor organization or group of employees of the
Seller.
(c) There
are
no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or (ii)
material grievances or other labor disputes pending or, to the best knowledge
of
the Seller, threatened against or involving the Seller. There are no unfair
labor practice charges, grievances or complaints pending or, to the best
knowledge of the Seller, threatened by or on behalf of any employee or group
of
employees of the Seller.
3.17. Litigation.
Except
as set forth in Schedule 3.17, there is no suit, action, proceeding,
investigation, claim or order pending or, to the knowledge of the Seller,
overtly threatened against the Seller (or to the knowledge of the Seller,
pending or threatened, against any of the officers, directors or key employees
of the Seller with respect to their business activities on behalf of the Seller,
or to which the Seller is otherwise a party, which, if adversely determined,
would have a Material Adverse Effect, before any court, or before any
governmental department, commission, board, agency, or instrumentality; nor
to
the knowledge of the Seller is there any reasonable basis for any such action,
proceeding, or investigation. The Seller is not subject to any judgment, order
or decree of any court or governmental agency except to the extent the same
are
not reasonably likely to have a Material Adverse Effect and is not engaged in
any legal action to recover monies due it or for damages sustained by
it.
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3.18. Compliance
with Laws; Permits. Except
as
set forth in Schedule 3.18, the Seller is in compliance with all federal, state
and local statutes, laws, rules, regulations, orders and ordinances (“Laws”)
applicable to it or to the conduct of its business or operations or the use
of
its properties (including any leased properties) and assets, except for such
non-compliances as would not, individually or in the aggregate, have a Material
Adverse Effect. The Seller has all governmental permits and approvals from
state, federal or local authorities which are required for it to operate its
business, except for those the absence of which would not, individually or
in
the aggregate, have a Material Adverse Effect.
3.19. Environmental
Matters.
Except
as set forth on Schedule 3.19 hereto:
(a) the
operations of the Seller are in compliance with all applicable laws promulgated
by any governmental entity which prohibit, regulate or control any hazardous
material or hazardous material activity (“Environmental Laws”) and all permits
issued pursuant to Environmental Laws or otherwise;
(b) the
Seller has obtained all permits required under all applicable Environmental
Laws
necessary to operate its business;
(c) the
Seller is not the subject of any outstanding written order or Contract with
any
governmental authority or person respecting (i) Environmental Laws, (ii)
remedial action or (iii) any release or threatened release of a Hazardous
Material (“Release”);
(d) the
Seller has not received any written communication alleging either or both that
it may be in violation of any Environmental Law, or any permit issued pursuant
to Environmental Law, or may have any liability under any Environmental
Law;
(e) the
Seller does not have any current contingent liability in connection with any
Release into the indoor or outdoor environment (whether on-site or
off-site);
(f) there
are
no investigations of the business, operations, or currently or previously owned,
operated or leased property of the Seller pending or, to the Seller’s knowledge,
threatened which could lead to the imposition of any liability pursuant to
Environmental Law;
(g) to
the
Seller’s knowledge, there is not located at any of the properties of the Seller
any (i) underground storage tanks, (ii) asbestos-containing material or (iii)
equipment containing polychlorinated biphenyls; and,
(h) the
Seller has provided to the Parent all environmentally related audits, studies,
reports, analyses, and results of investigations that have been performed with
respect to the currently or previously owned, leased or operated properties
of
the Seller.
3.20. Insurance.
Schedule
3.20 sets forth a complete and accurate list of all policies of insurance of
any
kind or nature covering the Seller or any of its employees, properties or
assets, including, without limitation, policies of life, disability, fire,
theft, workers compensation, employee fidelity and other casualty and liability
insurance. All such policies are in full force and effect, and, to the Seller’s
knowledge, it is not in default of any provision thereof, except for such
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.
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3.21. Inventories;
Receivables; Payables.
(a) The
inventories of the Seller are in good and marketable condition, and are saleable
in the ordinary course of business.
(b) All
accounts receivable of the Seller have arisen from bona fide transactions in
the
ordinary course of business consistent with past practice. All accounts
receivable of the Seller reflected on the Seller Balance Sheet are good and
collectible at the aggregate recorded amounts thereof, net of any applicable
reserve for returns or doubtful accounts reflected thereon, which reserves
are
adequate and were calculated in a manner consistent with past practice and
in
accordance with GAAP consistently applied. All accounts receivable arising
after
the Seller Balance Sheet Date are good and collectible at the aggregate recorded
amounts thereof, net of any applicable reserve for returns or doubtful accounts,
which reserves are adequate and were calculated in a manner consistent with
past
practice and in accordance with GAAP consistently applied. The parties agree
and
acknowledge that Buyer’s sole remedy for a breach of this representation and
warranty shall be to require Seller to repurchase uncollected accounts
receivable.
(c) All
accounts payable of the Seller reflected in the Seller Balance Sheet or arising
after the date thereof are the result of bona fide transactions in the ordinary
course of business and have been paid or are not yet due and
payable.
3.22. Customers
and Suppliers.
Schedule
3.22 sets forth a list of the twenty (20) largest customers and the twenty
(20)
largest suppliers of the Seller, as measured by the dollar amount of purchases
therefrom or thereby, during each of the fiscal years ended 2007 and 2006,
showing the approximate total sales by the Seller to each such customer and
the
approximate total purchases by the Seller from each such supplier, during such
period. Since the Seller Balance Sheet Date, there has not been any material
adverse change in the business relationship of the Seller with any customer
or
supplier listed on Schedule 3.22.
3.23. Banks.
Schedule
3.23 contains a complete and correct list of the names and locations of all
banks in which the Seller has accounts or safe deposit boxes and the names
of
all persons authorized to draw thereon or to have access thereto. Except as
set
forth on Schedule 3.23, no person holds a power of attorney to act on behalf
of
the Seller.
3.24. No
Misrepresentations.
No
representation or warranty of the Seller contained in this Agreement or in
any
schedule hereto or in any certificate or other instrument furnished by the
Seller to the Parent pursuant to the terms hereof, taken as a whole, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein or therein not
misleading.
3.25. Financial
Advisors.
No
person has acted, directly or indirectly, as a broker, finder or financial
advisor for the Seller in connection with the transactions contemplated by
this
Agreement and no person is entitled to any fee or commission or like payment
in
respect thereof.
3.26. Investment
Intention.
The
Seller is acquiring the Common Stock for its own account, for investment
purposes only and not with a view to the distribution (as such term is used
in
Section 2(11) of the Securities Act of 1933. The Seller understands that the
Common Stock has not been registered under the Securities Act and cannot be
sold
unless subsequently registered under the Securities Act or an exemption from
such registration is available.
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3.27. Accredited
Investor.
The
Seller is, and each of the Owners are, an “accredited investor” within the
meaning of Rule 501 promulgated under the Securities Act. The Seller is in
a
financial position to hold the Common Stock and is able to bear the economic
risk and withstand a complete loss of the Seller’s investment in the Common
Stock. The Seller recognizes that the Common Stock involves a high degree of
risk. The Seller is a sophisticated investor, is able to fend for itself in
the
transaction contemplated by this Agreement, and has such knowledge and
experience in financial and business matters that the Seller is capable of
evaluating the merits and risks of the prospective investment in the Common
Stock.
3.28. Patriot
Act.
The
Seller certifies that, to the best of the Seller’s knowledge, the Seller has not
been designated, and is not owned or controlled, by a “suspected terrorist” as
defined in Executive Order 13224. The Seller hereby acknowledges that the Parent
seeks to comply with all applicable Laws concerning money laundering and related
activities. In furtherance of those efforts, the Seller hereby represents,
warrants and agrees that: (i) none of the cash or property owned by the Seller
has been or shall be derived from, or related to, any activity that is deemed
criminal under United States law; and (ii) no contribution or payment by the
Seller has, and this Agreement will not, cause the Seller to be in violation
of
the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF
PURCHASER
AND ACQUISITION SUB
The
Parent and the Acquisition Sub jointly and severally represent and warrant
that:
4.1. Organization
and Good Standing.
(a) The
Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada; and
(b) Acquisition
Sub is a corporation duly incorporated and validly existing and in good standing
under the laws of the State of Nevada.
4.2. Authorization
of Agreement.
(a) The
Parent and the Acquisition Sub have full corporate power and authority to
execute and deliver this Agreement, and each other agreement, document,
instrument or certificate contemplated by this Agreement or to be executed
by
the Parent in connection with the consummation of the transactions contemplated
hereby and thereby (the “Parent Documents”), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
the
Parent and Acquisition Sub of this Agreement and each Parent Document have
been
duly authorized by all necessary corporate action on behalf of the Parent and
Acquisition Sub. This Agreement has been, and each Parent Document will be
at or
prior to the Closing, duly executed and delivered by the Parent and (assuming
the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each Parent Document when so executed
and delivered will constitute, legal, valid and binding obligations of the
Parent and Acquisition Sub, enforceable against the Parent and Acquisition
Sub
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
-17-
(b) Acquisition
Sub has the corporate power, capacity and authority to enter into and complete
this Agreement;
4.3. Conflicts;
Consents of Third Parties.
(a) Except
as
set forth on Schedule 4.3 hereto, neither of the execution and delivery by
the
Parent or Acquisition Sub of the Parent Documents, nor the compliance by the
Parent or the Acquisition Sub with any of the provisions hereof or thereof
will
(i) conflict with, or result in the breach of, any provision of the certificate
of incorporation, or certificate of formation, or by-laws, or limited liability
company agreement of the Parent or Acquisition Sub, respectively, (ii) conflict
with, violate, result in the breach of, or constitute a default under any note,
bond, mortgage, indenture, license, agreement or other obligation to which
the
Parent or Acquisition Sub is a party or by which the Parent, Acquisition Sub
or
their respective properties or assets are bound or (iii) violate any statute,
rule, regulation, order or decree of any governmental body or authority by
which
the Parent or Acquisition Sub is bound, except, in the case of clauses (ii)
and
(iii), for such violations, breaches or defaults as would not, individually
or
in the aggregate, have a Material Adverse Effect on the business, properties,
results of operations, prospects, conditions (financial or otherwise) of the
Parent and its subsidiaries, taken as a whole.
(b) No
consent, waiver, approval, order, permit or authorization of, or declaration
or
filing with, or notification to, any person or Governmental Body is required
on
the part of the Parent in connection with the execution and delivery of this
Agreement or the Parent Documents or the compliance by Parent with any of the
provisions hereof or thereof.
4.4. Litigation.
There
are no legal proceedings pending or, to the best knowledge of the Parent,
threatened that are reasonably likely to prohibit or restrain the ability of
the
Parent or Acquisition Sub to enter into this Agreement or consummate the
transactions contemplated hereby.
4.5. Financial
Advisors.
Except
as set forth on Schedule 4.5, no person has acted, directly or indirectly,
as a
broker, finder or financial advisor for the Parent in connection with the
transactions contemplated by this Agreement and no person is entitled to any
fee
or commission or like payment in respect thereof.
-18-
4.6. Patriot
Act.
The
Parent certifies that, to the best of the Parent’s knowledge, the Parent has not
been designated, and is not owned or controlled, by a “suspected terrorist” as
defined in Executive Order 13224. The Parent hereby acknowledges that the Seller
seeks to comply with all applicable Laws concerning money laundering and related
activities. In furtherance of those efforts, the Parent hereby represents,
warrants and agrees that: (i) none of the cash or property owned by the Seller
has been or shall be derived from, or related to, any activity that is deemed
criminal under United States law; and (ii) no contribution or payment by the
Parent has, and this Agreement will not, cause the Parent to be in violation
of
the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001.
4.7. No
Knowledge of Breaches.
Parent
does not have actual knowledge of any breach of any representation and warranty
made by Seller and the Owners hereunder.
ARTICLE
V.
COVENANTS
5.1. Access
to Information.
The
Seller and Owners agree that, prior to the Closing Date, the Parent shall be
entitled, through its officers, employees and representatives (including,
without limitation, its legal advisors and accountants), to make such
investigation of the properties, businesses and operations of the Seller and
such examination of the books, records and financial condition of the Seller
as
it reasonably requests and to make extracts and copies of such books and
records. Any such investigation and examination shall be conducted during
regular business hours and under reasonable circumstances, and the Seller shall
cooperate fully therein. No investigation by the Parent prior to or after the
date of this Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of the Seller contained in the Seller
Documents. In
order
that the Parent may have full opportunity to make such physical, business,
accounting and legal review, examination or investigation as it may reasonably
request of the affairs of the Seller, Seller shall cause its officers,
employees, consultants, agents, accountants, attorneys and other representatives
to cooperate fully with such representatives in connection with such review
and
examination.
5.2. Conduct
of the Business Pending the Closing.
(a) Except
as
otherwise expressly contemplated by this Agreement or with the prior written
consent of the Parent, the Seller shall:
(i) conduct
its business only in the ordinary course consistent with past
practice;
(ii) use
its
best efforts to (A) preserve its present business operations, organization
(including, without limitation, management and the sales force) and goodwill
and
(B) preserve its present relationship with persons having business dealings
with
it;
(iii) maintain
(A) all of its assets and properties in their current condition, ordinary wear
and tear excepted and (B) insurance upon all of its properties and assets in
such amounts and of such kinds comparable to that in effect on the date of
this
Agreement;
(iv) (A)
maintain its books, accounts and records in the ordinary course of business
consistent with past practices, (B) continue to collect accounts receivable
and
pay accounts payable utilizing normal procedures and without discounting or
accelerating payment of such accounts, and (C) comply with all contractual
and
other obligations applicable to its operation; and
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(v) comply
in
all material respects with applicable Laws.
(b) Except
as
otherwise expressly contemplated by this Agreement or with the prior written
consent of the Parent, the Seller shall not:
(i) except
for trade payables and for indebtedness for borrowed money incurred in the
ordinary course of business and consistent with past practice, borrow monies
for
any reason or draw down on any line of credit or debt obligation, or become
the
guarantor, surety, endorser or otherwise liable for any debt, obligation or
liability (contingent or otherwise) of any other person;
(ii) subject
to any Lien (except for liens that do not materially impair the use of the
property subject thereto in their respective businesses as presently conducted),
any of its properties or assets (whether tangible or intangible);
(iii) acquire
any material properties or assets or sell, assign, transfer, convey, lease
or
otherwise dispose of any of its material properties or assets (except for fair
consideration in the ordinary course of business consistent with past
practice);
(iv) cancel
or
compromise any debt or claim or waive or release any material right except
in
the ordinary course of business consistent with past practice;
(v) enter
into any commitment for capital expenditures in excess of $10,000 for any
individual commitment and $25,000 for all commitments in the
aggregate;
(vi) introduce
any material change with respect to its operation, including any material change
in the types, nature, composition or quality of its products or services,
experience any material change in any contribution of its product lines to
its
revenues or net income, or, other than in the ordinary course of business,
make
any change in product specifications or prices or terms of distributions of
such
products;
(vii) enter
into any transaction or make or enter into any Contract which by reason of
its
size or otherwise is not in the ordinary course of business consistent with
past
practice;
(viii) enter
into or agree to enter into any merger or consolidation with, any corporation
or
other entity, and not engage in any new business or invest in, make a loan,
advance or capital contribution to, or otherwise acquire the securities of
any
other person;
(ix) except
for transfers of cash pursuant to normal cash management practices, make any
investments in or loans to, or pay any fees or expenses to, or enter into or
modify any contract with any Affiliate; or
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(x) agree
to
do anything prohibited by this Section 5.2 or anything which would make any
of
the representations and warranties of the Seller in this Agreement or the Seller
Documents untrue or incorrect in any material respect as of any time through
and
including the Closing Date.
5.3. Consents.
The
Seller shall use its best efforts, and the Parent shall cooperate with the
Seller, to obtain at the earliest practicable date all consents and approvals
required to consummate the transactions contemplated by this Agreement,
including, without limitation, the consents and approvals referred to in Section
3.5(b) hereof; provided, however, that neither the Seller nor the Parent shall
be obligated to pay any consideration therefor to any third party from whom
consent or approval is requested.
5.4. Other
Actions.
Each of
the Seller, Owners, Parent and Acquisition Sub shall use its best efforts to
(i)
take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
5.5. No
Solicitation.
The
Seller will not, and will not cause or permit any of its members, officers,
employees, representatives or agents (collectively, the “Representatives”) to,
directly or indirectly, (i) discuss, negotiate, undertake, authorize, recommend,
propose or enter into, either as the proposed surviving, merged, acquiring
or
acquired corporation, any transaction involving a merger, consolidation,
business combination, purchase or disposition of any amount of the assets or
capital stock or other equity interest in it other than the transactions
contemplated by this Agreement (an “Acquisition Transaction”), (ii) facilitate,
encourage, solicit or initiate discussions, negotiations or submissions of
proposals or offers in respect of an Acquisition Transaction, (iii) furnish
or
cause to be furnished, to any person, any information concerning its business,
operations, properties or assets in connection with an Acquisition Transaction,
or (iv) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other person to do or
seek
any of the foregoing. The Seller will inform the Parent in writing immediately
following the receipt by the Seller or any Representative of any proposal or
inquiry in respect of any Acquisition Transaction.
5.6. Preservation
of Records.
The
Seller, Owners, the Parent and Acquisition Sub agree that each of them shall
preserve and keep the records held by it relating to the business of the Seller
for a period of three years from the Closing Date (six years with respect to
tax
related records) and shall make such records and personnel available to the
other as may be reasonably required by such party in connection with, among
other things, preparation of financial statements, disclosure of information
to
the Securities and Exchange Commission, stock exchange or similar entity, any
insurance claims by, legal proceedings against or governmental investigations
of
the Seller, the Parent or Acquisition Sub or any of their Affiliates or in
order
to enable the Seller, the Parent or Acquisition Sub to comply with their
respective obligations under this Agreement, the Employment Agreements and
each
other agreement, document or instrument contemplated hereby or thereby. In
the
event the Seller, the Parent or Acquisition Sub wishes to destroy such records
after that time, such party shall first give ninety (90) days prior written
notice to the other and such other party shall have the right at its option
and
expense, upon prior written notice given to such party within that ninety (90)
day period, to take possession of the records within one hundred and eighty
(180) days after the date of such notice.
-21-
5.7. Publicity.
Neither
the Seller, the Parent nor the Acquisition Sub shall issue any press release
or
public announcement concerning this Agreement or the transactions contemplated
hereby without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless, in the
sole
judgment of the Parent or the Seller, disclosure is otherwise required by
applicable Law or by the applicable rules of any stock exchange on which the
Parent or the Seller lists securities, provided that, to the extent required
by
applicable Law, the party intending to make such release shall use its best
efforts consistent with such applicable Law to consult with the other party
with
respect to the text thereof.
5.8. Use
of Name.
The
Seller hereby agrees that upon the consummation of the transactions contemplated
hereby, the Parent and Acquisition Sub shall have the sole right to the use
of
the name “Razor Data” and variations thereof and the Seller shall not, and shall
not cause or permit any Affiliate to use such name or any variation or
simulation thereof.
5.9. Board
Appointments.
The
Parent hereby agrees that upon the consummation of the transactions contemplated
hereby, the members
of Investment Tools and Training, LLC shall be granted the right to nominated
two independent qualified individuals to serve as members of the Board of
Directors of the Parent
and
that
the Parent
shall
take all actions necessary to elect, or have elected, such individuals.
Notwithstanding the foregoing, the Parent
shall
have the right to determine the qualifications of such individuals nominated
by
the
members
of Investment Tools and Training, LLC.
5.10. Service
Agreements.
Subsequent to the consummation of the transactions contemplated hereby, the
Parent
shall enter into service agreements with Rhino Maeo LLC and Zava LLC at
reasonable rates to be agreed upon by the parties thereto.
ARTICLE
VI.
CONDITIONS
TO CLOSING
6.1. Conditions
Precedent to Obligations of Parent and Acquisition Sub.
The
obligation of the Parent and Acquisition Sub to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to
the
Closing Date, of each of the following conditions (any or all of which may
be
waived by the Parent in whole or in part to the extent permitted by applicable
Law):
(a) all
representations and warranties of the Seller and Owners contained herein shall
be true and correct as of the Closing Date;
(b) all
representations and warranties of the Seller contained herein qualified as
to
materiality shall be true and correct, and the representations and warranties
of
the Seller contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with the same
effect as though those representations and warranties had been made again at
and
as of that time;
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(c) the
Seller shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied
with by it on or prior to the Closing Date;
(d) the
Parent shall have been furnished with certificates (dated the Closing date
and
in form and substance reasonably satisfactory to the Parent) executed by the
Seller certifying as to the fulfillment of the conditions specified in Sections
6.1(a), 6.1(b) and 6.1(c) hereof;
(e) the
Parent shall have obtained all consents and waivers referred to in Section
4.3
hereof with respect to the transactions contemplated by this Agreement and
the
Parent Documents;
(f) there
shall not have been or occurred any event which will have a Material Adverse
Effect;
(g) the
Seller shall have obtained all consents and waivers referred to in Section
3.5
hereof, in a form reasonably satisfactory to the Parent, with respect to the
transactions contemplated by this Agreement and the Seller
Documents;
(h) no
legal
proceedings shall have been instituted or threatened or claim or demand made
against the Seller or the Parent seeking to restrain or prohibit or to obtain
substantial damages with respect to the consummation of the transactions
contemplated hereby, and there shall not be in effect any order by a
Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated
hereby;
(i) the
Parent shall have completed its due diligence review of the Business and the
Assets, and the results of such review shall be satisfactory to the Parent
in
its sole and absolute discretion;
(j) the
Parent shall have obtained the financing required to consummate the transaction
contemplated hereunder on terms reasonably satisfactory to it; and
(k) the
Parent shall have received disclosure schedules required pursuant to Article
3
hereof, which shall be reasonably satisfactory to the Parent.
6.2. Conditions
Precedent to Obligations of the Seller and Owners.
The
obligations of the Seller and Owners to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions (any or all of which may be waived
by
the Seller in whole or in part to the extent permitted by applicable
law):
(a) all
representations and warranties of the Parent and Acquisition Sub contained
herein shall be true and correct as of the date hereof;
(b) all
representations and warranties of the Parent and Acquisition Sub contained
herein qualified as to materiality shall be true and correct, and all
representations and warranties of the Parent and Acquisition Sub contained
herein not qualified as to materiality shall be true and correct in all material
respects, at and as of the Closing Date with the same effect as though those
representations and warranties had been made again at and as of that
date;
-23-
(c) the
Parent and Acquisition Sub shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by Parent and Acquisition Sub on or prior to the
Closing Date;
(d) the
Seller shall have been furnished with certificates (dated the Closing Date
and
in form and substance reasonably satisfactory to the Seller) executed by the
Chief Executive Officer and Chief Financial Officer of the Parent and the
Acquisition Sub certifying as to the fulfillment of the conditions specified
in
Sections 6.2(a), 6.2(b) and 6.2(c), and resolutions of the Board of Directors
of
the Parent and Acquisition Sub authorizing the acquisition of the
Seller;
(e) there
shall not be in effect any order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation
of
the transactions contemplated hereby; and
(f) Xxxxxxxx
X. Xxxxxx and Xxxx Xxxxx shall enter into a Voting and Support Agreement with
Newsgrade Corporation, a shareholder of the Buyer, pursuant to which Xx. Xxxxxx
and Xx. Xxxxx shall be granted a proxy with the right vote the shares of common
stock of the Buyer owned by Newsgrade Corporation.
ARTICLE
VII.
DOCUMENTS
TO BE DELIVERED
7.1. Documents
to be Delivered by the Seller.
At the
Closing, the Seller shall deliver, or cause to be delivered, to the Parent
and
Acquisition Sub the following:
(a) copies
of
all consents and waivers referred to in Section 6.1(g) hereof;
(b) Assignment,
Xxxx of Sale and Assumption Agreement, substantially in the form of Exhibit
B
hereto, duly executed;
(c) Employment
Agreements, substantially in the form of Exhibit C hereto, duly executed;
(d) Registration
Rights Agreement, substantially in the form of Exhibit D hereto, duly executed;
(e) Lock
Up
Agreement, substantially in the form of Exhibit E hereto, duly executed by
each
of the Owners; and
(f) such
other documents as the Parent and Acquisition Sub shall reasonably
request.
7.2. Documents
to be Delivered by the Parent.
At the
Closing, the Parent and Acquisition Sub shall deliver to the Seller the
following:
(a) the
Common Stock pursuant to Section 1.4(b)(i);
-24-
(b) the
certificates and resolutions referred to in Section 6.2(d) hereof;
(c) Assignment,
Xxxx of Sale and Assumption Agreement, substantially in the form of Exhibit
B
hereto, duly executed;
(d) Employment
Agreements, substantially in the form of Exhibit C hereto, duly executed;
(e) Registration
Rights Agreement, substantially in the form of Exhibit D hereto, duly executed;
and
(f) such
other documents as the Seller shall reasonably request.
ARTICLE
VIII.
INDEMNIFICATION
8.1. Indemnification.
(a) Subject
to Section 8.2 hereof, the Seller and the Owners hereby agree to defend,
indemnify and hold the Parent, Acquisition Sub and their respective directors,
officers, employees, Affiliates, agents, successors and assigns (collectively,
the “Parent Indemnified Parties”) harmless from and against:
(i) any
and
all liabilities of the Seller of every kind, nature and description, absolute
or
contingent, existing as against the Seller prior to and including the Closing
Date or thereafter coming into being or arising by reason of any state of facts
existing, or any transaction entered into, on or prior to the Closing Date,
except to the extent that the same have been fully provided for (and accrued
and
applied as a liability) in the Parent Balance Sheet or were incurred in the
ordinary course of business between the Parent Balance Sheet Date and the
Closing Date;
(ii) any
and
all losses, liabilities, obligations, damages, costs and expenses based upon,
attributable to or resulting from the failure of any representation or warranty
of the Seller set forth in Article IV hereof, or any representation or warranty
contained in any certificate delivered by or on behalf of the Seller pursuant
to
this Agreement, to be true and correct in all respects as of the date made;
(iii) any
and
all losses, liabilities, obligations, damages, costs and expenses based upon,
attributable to or resulting from the breach of any covenant or other agreement
on the part of the Seller under this Agreement;
(iv) any
and
all notices, actions, suits, proceedings, claims, demands, assessments,
judgments, costs, penalties and expenses, including attorneys’ and other
professionals’ fees and disbursements (collectively, “Expenses”) incident to any
and all losses, liabilities, obligations, damages, costs and expenses with
respect to which indemnification is provided hereunder (collectively,
“Losses”).
(b) Subject
to Section 8.2 hereof, the Parent and Acquisition Sub hereby agree to defend,
indemnify and hold the Seller, the Owners and their Affiliates, agents,
successors and assigns (collectively, the “Seller Indemnified Parties”) harmless
from and against:
-25-
(i) any
and
all Losses based upon, attributable to or resulting from the failure of any
representation or warranty of the Parent and Acquisition Sub set forth in
Article V hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of the Parent pursuant to this Agreement, to be true
and correct as of the date made;
(ii) any
and
all Losses based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Parent and Acquisition Sub under
this Agreement;
(iii) any
and
all Losses of the Parent or Acquisition Sub of every kind, nature and
description, absolute or contingent, existing as against the Parent or
Acquisition Sub after the Closing Date coming into being or arising by reason
of
any state of facts existing, or any transaction entered into, after the Closing
Date, except for (A) such Losses for which Seller and the Owners have an
obligation to indemnify the Parent Indemnified Parties pursuant to Section
8.1
and (B) such Losses that affect all shareholders of Parent or Acquisition Sub
by
virtue of their status as shareholders; and
(iv) any
and
all Expenses incident to the foregoing.
8.2. Limitations
on Indemnification. An
indemnifying party shall not have any liability under Section 8.1(a) or Section
8.1(b) hereof unless the aggregate amount of Losses and Expenses to the
indemnified parties finally determined to arise thereunder exceeds $20,000
(the
“Basket”) and, in such event, the indemnifying party shall be required to pay
the entire amount of such Losses and Expenses. Notwithstanding anything else
contained herein, the maximum liability the Sellers in the aggregate shall
be
required to pay hereunder shall be the amount of $10,600,000. In addition to
the
foregoing, in the event that the Owners are an indemnifying party under Section
8.1(a), the Owners shall not be jointly liable for the aggregate amount of
and
such Losses and Expenses and each Owner shall be severally liable solely for
their respective proportionate shares of such Losses and Expenses
8.3. Indemnification
Procedures.
(a) In
the
event that any Legal Proceedings shall be instituted or that any claim or demand
(“Claim”) shall be asserted by any person in respect of which payment may be
sought under Section 8.1 hereof (regardless of the Basket referred to above),
the indemnified party shall reasonably and promptly cause written notice of
the
assertion of any Claim of which it has knowledge which is covered by this
indemnity to be forwarded to the indemnifying party. The indemnifying party
shall have the right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory to the indemnified
party, and to defend against, negotiate, settle or otherwise deal with any
Claim
which relates to any Losses indemnified against hereunder. If the indemnifying
party elects to defend against, negotiate, settle or otherwise deal with any
Claim which relates to any Losses indemnified against hereunder, it shall within
five (5) days (or sooner, if the nature of the Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects
not
to defend against, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its obligation
to indemnify the indemnified party for such Losses under this Agreement, the
indemnified party may defend against, negotiate, settle or otherwise deal with
such Claim. If the indemnified party defends any Claim, then the indemnifying
party shall reimburse the indemnified party for the Expenses of defending such
Claim upon submission of periodic bills. If the indemnifying party shall assume
the defense of any Claim, the indemnified party may participate, at his or
its
own expense, in the defense of such Claim; provided, however, that such
indemnified party shall be entitled to participate in any such defense with
separate counsel at the expense of the indemnifying party if, (i) so requested
by the indemnifying party to participate or (ii) in the reasonable opinion
of
counsel to the indemnified party, a conflict or potential conflict exists
between the indemnified party and the indemnifying party that would make such
separate representation advisable; and provided, further, that the indemnifying
party shall not be required to pay for more than one such counsel for all
indemnified parties in connection with any Claim. The parties hereto agree
to
cooperate fully with each other in connection with the defense, negotiation
or
settlement of any such Claim.
-26-
(b) After
any
final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the expiration of the
time in which to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the indemnifying party shall be required to pay all of the sums so due
and
owing to the indemnified party by wire transfer of immediately available funds
within ten (10) business days after the date of such notice.
(c) The
failure of the indemnified party to give reasonably prompt notice of any Claim
shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such
failure.
ARTICLE
IX.
MISCELLANEOUS
9.1. Payment
of Sales, Use or Similar Taxes.
All
sales, use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever, applicable to, or resulting from,
the transactions contemplated by this Agreement shall be borne by the
Parent.
9.2. Survival
of Representations and Warranties.
The
parties hereto hereby agree that the representations and warranties contained
in
this Agreement or in any certificate, document or instrument delivered in
connection herewith, shall survive the execution and delivery of this Agreement,
and the Closing hereunder, regardless of any investigation made by the parties
hereto; provided, however, that any claims or actions with respect thereto
shall
terminate unless within twenty-four (24) months after the Closing Date written
notice of such claims is given to the Seller or such actions are
commenced.
9.3. Expenses.
Except
as otherwise provided in this Agreement, the Seller, the Parent and Acquisition
Sub shall each bear its own expenses incurred in connection with the negotiation
and execution of this Agreement and each other agreement, document and
instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
-27-
9.4. Specific
Performance.
The
Seller and Owners acknowledge and agree that the breach of this Agreement would
cause irreparable damage to the Parent and Acquisition Sub and that the Parent
and Acquisition Sub will not have an adequate remedy at law. Therefore, unless
validly terminated pursuant to Section 2.2 of this Agreement, the obligations
of
the Seller under this Agreement, including, without limitation, the Seller’s
obligation to sell the Assets to the Parent and Acquisition Sub, shall be
enforceable by a decree of specific performance issued by any court of competent
jurisdiction, and appropriate injunctive relief may be applied for and granted
in connection therewith. Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which any party may
have under this Agreement or otherwise.
9.5. Further
Assurances.
The
Seller, the Parent and Acquisition Sub each agrees to execute and deliver such
other documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
9.6. Submission
to Jurisdiction; Consent to Service of Process
(a) The
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of
any federal or state court located within the State of New York over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims
in
respect of such dispute or any suit, action proceeding related thereto may
be
heard and determined in such courts. The parties hereby irrevocably waive,
to
the fullest extent permitted by applicable Law, any objection which they may
now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Each
of
the parties hereto hereby consents to process being served by any party to
this
Agreement in any suit, action or proceeding by the mailing of a copy thereof
in
accordance with the provisions of Section 9.10.
9.7. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
9.8. Entire
Agreement; Amendments and Waivers.
This
Agreement (including the schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of
any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation
by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant
or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further
or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise
of
any other right, power or remedy. All remedies hereunder are cumulative and
are
not exclusive of any other remedies provided by law.
-28-
9.9. Table
of Contents and Headings.
The
table of contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
9.10. Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when delivered personally or mailed by certified mail,
return receipt requested, to the parties (and shall also be transmitted by
facsimile to the persons receiving copies thereof) at the following addresses
(or to such other address as a party may have specified by notice given to
the
other party pursuant to this provision):
If
to
Parent or Acquisition Sub:
XxxXxxxxxxxxxXxxxxxxx.xxx,
Inc.
000
Xxxxxxx Xxxxxx, 00xx xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxxx X. Xxxxxx, Chief Executive Officer
Phone:
(000) 000-0000
Fax: (000)
000-0000
With
a
copy to:
Xxxxxx
Xxxxxxx, Esq.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Phone:
000-000-0000
Fax:
000-000-0000
If
to
Seller or Owners:
Razor
Data, LLC
0000
Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx,
Xxxx 00000
Attn:
Xxxxx Xxxxxxxx, Member
Phone:
[_________]
Fax:
[_________]
-29-
With
a
copy to:
Xxxxxx
& XxXxxxxx, P.C.
Attorneys
at Law
000
Xxxx
000 Xxxxx
Xxxx,
Xxxx 00000
Attn:
Xxxxxxx X. Xxxxx, Esq.
Phone:
(000) 000-0000
Fax:
(000) 000-0000
9.11. Severability.
If any
provision of this Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect.
9.12. Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
person or entity not a party to this Agreement except as provided below. No
assignment of this Agreement or of any rights or obligations hereunder may
be
made by either the Seller or the Parent (by operation of law or otherwise)
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however,
that
the Parent may assign this Agreement and any or all rights or obligations
hereunder (including, without limitation, the Parent’s rights to purchase the
Assets, the Parent’s rights to seek indemnification and the Parent’s rights to
rely on any of Seller’s or the Owners’ representations and warranties made
hereunder) to any Affiliate of the Parent. Upon any such permitted assignment,
the references in this Agreement to the Parent shall also apply to any such
assignee unless the context otherwise requires.
9.13. Counterparts.
This
Agreement may be executed in counterparts, each of which when executed by any
party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies
of
this Agreement by facsimile will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.
[Remainder
of page intentionally left blank]
-30-
IN
WITNESS WHEREOF
the
parties have executed this Agreement effective as of the day and year first
above written.
| XXXXXXXXXXXXXXXXXXXXX.XXX, INC. | |
|
By:
|
/s/
Xxxxxxxx X. Xxxxxx
|
|
Name:
Xxxxxxxx X. Xxxxxx
|
|
|
Title:
Chief Executive Officer
|
|
| RAZORDATA CORP. | |
|
By:
|
/s/
Xxxxxxxx X. Xxxxxx
|
|
Name:
Xxxxxxxx X. Xxxxxx
|
|
|
Title:
Chief Executive Officer
|
|
| RAZOR DATA, LLC | |
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
Name:
Xxxxx Xxxxxxxx
|
|
|
Title:
Manager
|
|
| OWNERS: | |
| BOYA SYSTEMS, LLC | |
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
Name:
Xxxxx Xxxxxxxx
|
|
|
Title:
Manager
|
|
| RABBLE, LLC | |
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
Name:
Xxxxx Xxxxxxxx
|
|
|
Title:
Manager
|
|
-31-
