SALE AND PURCHASE
AGREEMENT
TRUENET
CORPORATION
TrueNet Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
January 31, 1997
SALE & PURCHASE AGREEMENT
Parties - This Sale & Purchase Agreement entered into as of the 31st day of
January 1997, is by and between Net Lnnx, Inc., a publicly traded Pennsylvania
Corporation, (Xxxxxx X. Xxxxx, President), herein called "Seller" of 000
Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx xxxxx, Xxxxxxx 00000; and The Banana
Corporation, Inc., a Florida Corporation, (Xxxxx Xxxxxxxx, President) herein
called "Buyer" of Mercede Executive Park, 0000-000 Xxxxx Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, collectively herein known as Parties.
Agreement - In consideration of the mutual covenants and the respective
undertakings of the Parties hereto, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties
agree, subject to the following terms and conditions, to Sell and Purchase,
respectively, one hundred (100%) percent of the Common Stock of the assets as
identified herein of TrueNet Corporation. TrueNet Corporation, herein called
TrueNet, is a Florida Corporation in good standing, presently operated by the
Seller as an Internet Service Provider (ISP) business in the Commerce Center
at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000.
Sellers Representation - As of the date of this Agreement, the Seller
represents that TrueNet is an operating Internet Service Provider business
legally operating in West Palm Beach; that all hardware, software,
peripherals, and equipment reasonably required to operate the TrueNet ISP
business for dial-up and ISDN accounts, Internet serving, and mail serving are
being transferred to the Buyer under the terms and conditions herein; and that
all material information pertaining to the business, corporation, and
equipment lease obligations has been provided to the Buyer. Further, the
Seller represents that, as of the date of execution of this Agreement,
TrueNet, Inc., has no outstanding obligations, momentarily, contractually, or
otherwise, and the said stock and assets are being transferred to the Buyer
free and clear of all liens and encumbrances, except for equipment lease
obligations specifically listed herein and Customer Service Contracts
transferred herewith.
Seller Stock Transfer - The Seller herewith transfers to the buyer one hundred
(100%) percent of the common stock of TrueNet Corporation, free and clear of
all liens, encumbrances, UCC filings, tax liabilities, employee wages or
withholding taxes, and/or any other liabilities as of the date of this
Agreement, except for equipment lease payment obligations undertaken by the
buyer as herein identified. All corporate records, corporate minute book,
accounting ledgers, financial statements, tax records, and all other related
corporate documents shall be immediately delivered to the buyer upon the
execution of this Agreement, together with the appropriately endorsed stock
certificates.
Trade name Transfer - The Seller herewith transfers to the Buyer all ownership
in and the full exclusive rights to the "TrueNet" trade name, trademark and
logotype, which shall be conveyed free and clear of all liens and
encumbrances.
Operating License - The Seller will permit TrueNet Corporation, under the
ownership of the buyer, to utilize the current city and/or county
occupational/mercantile license(s) required for business operations at the
location, until such time as the said license expires, is renewed by TrueNet
Corporation, or is transferred to the Banana Corporation.
Equipment Transfer - The Seller herewith transfers to the Buyer all of the
equipment listed in Exhibit I of this Agreement, together with any other
equipment remaining on the premises, free and clear of all liens and
encumbrances. Initials in the designated area by both Parties, next to each
individual item on the chart, indicates the respective transfer and receipt.
All warranties, service contracts, manuals, receipts, and other related
documentation and back-up tapes shall be provided to the Buyer.
Equipment Leases - The Seller herewith transfers to the Buyer all of the
equipment listed in Exhibit II of this Agreement, subject to the remaining
lease payments, account balances, and residuals which the Seller represents as
true and accurate. Initials in the designated area by both parties, next to
each individual item on the chart, indicates the respective transfer and
receipt. The Buyer shall assume the responsibility to pay all contract
amounts at current lease rates. Payment shall be made on behalf of the
original Lessee who shall remain on the original lease, at the same time and
manner as listed in the original lease. The Buyer's equipment lease payment
responsibility shall commence April 1st, 1997. The Seller shall be
responsible to pay interim payments and
for any remaining leased equipment not transferred to the Buyer, and such
payment and/or other obligations under the lease shall be made on a timely
basis as to not affect the Buyer's use of the said equipment throughout the
lease term. All warranties, service contracts, manuals, receipts, and other
related documentation hall be provided to the Buyer.
Leased Equipment Purchase - The Buyer shall have the exclusive right of first
refusal to purchase all of the transferred equipment listed in Exhibit II of
this Agreement outright at the end of the lease at the residual amount and
time frame specified in the original lease(s). The Buyer shall give a 30-day
notice to the Seller prior to the expiration of the lease of its decision to
exercise its purchase option.
Customers - The Seller agrees that all existing lead lists, customer
proposals, and service contracts shall be transferred and remain with the
TrueNet business. The Seller shall not notify, solicit, or otherwise contact
said existing or former prospects or customers for any purpose, without the
express written permission of the Buyer. The Seller shall provide the Buyer a
list of all accounts, both current and former, together with their respective
account and payment records and account information. The Seller will assist
the Buyer, on a reasonable basis until April 1st, 1997, to retain customer
through positive public relations efforts and to obtain referral letters from
existing customers as directed by the Buyer.
Merchant Account - Seller shall assist Buyer in assuming the use and
ownership transfer of TrueNet's merchant account (i.e., Visa, MasterCard,
etc.).
Existing Phone Lines - The Buyer shall assume the responsibility for the
payment of all telephone services necessary to provide ISP service and operate
the business of the execution of this Agreement. The Seller shall cooperate
with the Buyer in transferring the necessary services in a smooth and orderly
fashion as not to interrupt existing customer service or business operations.
At the option of the Buyer, the Seller shall transfer the existing contracts
for both local phone lines and the T1 connection to the Buyer together with
all existing equipment installed/owned by the provider(s) which shall remain
connected on the premises. Buyer shall have a period of not more than 60-days
to establish or transfer such services into a billing account under TrueNet,
Inc. Seller shall immediately pay any outstanding account balances to
telephone providers.
Phone Numbers - The Seller shall provide the Buyer with the continuing use of
its current telephone numbers including its primary Business Number
000-000-0000, Fax Number 000-000-0000, and Dial-up Number 000-000-0000; and
shall assist the Buyer effectuating a transfer of such telephone numbers with
the Telephone company.
Yellow Page Ads - Any prepaid Yellow Page advertising shall be transferred to
the Buyer. The Buyer shall not be responsible for any Yellow Page advertising
contracted by the Seller, unless otherwise agreed to in writing following a
review of the said contracts.
Internet Numbers - The Seller shall provide the Buyer with the continuing use
of its current Internet-related identification and access numbers including
those for servers, domain names, e-mail addresses, URLs, and other
Internet-related numbers presently in place and/or required for the TrueNet
operation. The Seller shall assist the Buyer in effectuating a transfer of
such numbers with InterNic and similar registrars including search engines
listings.
Web Design/Software - The Seller shall provide the Buyer with the continuing
use of TrueNet's WebPage(s) and shall provide a disk copy of the said
WebPage(s), dial-up configuration disk(s), and other materials developed for
Web presence, Web Hosing, and Web marketing together with all operating
systems, utilities, productivity, Web development/accounting, Graphics, or
other software programs presently owed by the Company. The Seller shall
assist the Buyer in effectuating an immediate transfer of the ownership
rights, and licensure of these materials to the Buyer.
Premises Lease - The Buyer will assume the occupation of the existing premises
which comprises approximately 1,250 square feet. The Seller shall remove all
items not being transferred to the Buyer from the premises by January 31,
1997, and shall be relieved of lease obligations upon expiration of such lease
on the same day, subject to the Lease Deposit provision below. The Buyer
shall
immediately assume premises lease obligations, under a new lease negotiated
with the Commerce Center.
Lease Deposit - The Seller shall provide the Buyer with the continuing use of
its current lease security deposit throughout the period during which the
Seller occupies a space of approximately 64-100 square feet within the TrueNet
office; which period shall not be less than 90-days from the date of this
Agreement. Following the 90-day period and the vacating of the office by the
Seller, the Buyer shall reimburse the Seller in an amount equal to the said
security deposit. At its option, the Buyer can require the Seller to vacate
the premises at any time following security deposit reimbursement and the
expiration of the said 90-day period. During occupation, the Seller shall be
responsible for its own business expenses including telephone service, local
and long-distance phone/fax calls, office supplies, and any other such
expense.
Account Adjustments - Except for Equipment Leases, all current obligations
that are necessary for the continued operation of the Business and accounts
receivable shall be adjusted as of the date of the execution of this
Agreement. The Seller shall provide the Buyer with a complete list of
TrueNet's obligations, contracts, and other expenses originated by the Seller
and necessary for the continued operation of the TrueNet business. The Seller
shall have paid all outstanding obligations, be responsible to pay all
outstanding obligations, or otherwise make arrangement to pay the obligations
or fulfill the said contracts as of the date of the execution of this
Agreement, while immediately releasing TrueNet and/or the Buyer of any such
obligations. The Buyer, at its option may continue with the contracts under
True Net, or terminate contracts it deems unrelated to the service or
unnecessary to the operation and/or replace such service under more favorable
terms and conditions. The Buyer shall be responsible for all continued or
newly-opened accounts as of the date of execution of this Agreement. Current
licenses, registrations, subscriptions, and other prepaid expenses shall be
transferred to the Buyer without adjustment.
Seller Stock Transfer - The Buyer herewith transfers to the Seller ownership
of ten (10%) percent of the common stock (100,000 shares) of the Banana
Corporation, Inc., (or its Successor) a Florida corporation, with 1,000,000
authorized shares of founder's common stock. The appropriately endorsed stock
certificates shall be transferred no later than 60 days following the
execution of this Agreement, together with the Company's standard shareholder
agreement which must be authorized by the Seller at the time of such
transfer. The said shareholder agreement shall restrict the sale of this
stock for a 36-month period, except in the event of the exercise of the
Buyer's repurchase provision described in the next section.
Stock Re-Purchase Provision - Prior to the expiration of one year from the
execution of this Agreement, the Seller (Net Lnnx) agrees that the Buyer
(Banana Corp.), at its option, may re-purchase its common stock at a price of
$1.50 per share up to fifty (50%) percent of the shares of stock originally
transferred to the Seller (50,000 shares). If the Buyer exercises this
re-purchase provision, the Seller's Stock Purchase Option described in the
next section shall be considered null and void. Upon timely notification from
the Buyer, the Parties agree to enter into an agreement for the repurchase of
the said stock, which transaction shall close no later than 6-months following
the full execution of the repurchase agreement.
Stock Purchase Option - At the time of a secondary offering, but in no event
later than the expiration of one year from the execution of this Agreement,
whichever occurs first, the Buyer agrees that the Seller may purchase
additional stock, equally from the Company's, excluding shares owned by Net
Lnnx, Inc., at a price of $1.50 per share upon to a maximum of 100,000 shares
equal to an additional ten (10%) percent ownership share at the founder level
prior to any dilution (based on the current 1,000,000 shares in the Company, whi
ch may be adjusted). This Option is subordinate to the above Stock
Re-Purchase Provision, regardless of the order of notification.
Press Releases - All press releases by Net Lnnx, Inc. relating to the
ownership transfer of TrueNet require the prior approval of Banana Corp.,
Inc., which approval will not be unreasonably withheld.
Location - The Buyer agrees to operate the Internet Service Provider business,
and continue to maintain the Equipment listed herein at its current location
until such time as the liste equipment is fully paid for and ownership is
transferred to the Buyer by the leasing company who presently holds a security
interest therein. The location may not be changed without the Seller's prior
written consent, which consent shall not be unreasonably withheld provided
that any relocation is within 75 miles of the present location, and does not
interrupt the operation of the business for more than sixty (60) calendar days
from the
time of closing the original location to the opening of the new location.
Unfair Competition - The Seller agrees, in the event it continues to operate
or subsequently begins to operate any other business, not to use any
reproduction or colorable imitation of the Proprietary Marks, Trade Dress,
methods of operation or undertake any other conduct either in connection with
such other business or the promotion thereof, which is likely to cause
confusion, mistake or deception, or which is likely to dilute the Buyer's
rights in and to the Proprietary Marks. In addition, the Seller agrees not to
utilize any designation of origin or description or representation which
falsely suggests or represents an association or connection with TrueNet,
Banana On-Line, The Banana Corporation or any of affiliates so as to
constitute unfair competition. This section shall not be deemed to relieve,
directly or indirectly, the Seller's obligations under the section(s) below.
Competition with the Buyer - The Seller agrees that the Buyer would be unable
to protect its Confidential Information against unauthorized use or disclosure
and would be unable to encourage a free exchange of ideas and information
within its business or franchisees system if the Seller, a stockholder in the
Buyer's company, were permitted to hold interests in any Competitive
Business. Therefore, the Seller covenants that during a 36-month period
following the execution of this Agreement, except as otherwise provided in
this Agreement or approved in writing by the Buyer, that the Seller will not
directly or indirectly, as owner, officer, director, employee, agent, lender,
investor, broker, consultant, franchisee or in any other similar capacity
whatsoever be connected in any manner with the ownership, management,
operation or control, or conduct of a Competitive Business within the United
States (provided that this restriction shall not apply to a 5% or less
beneficial interest in a publicly-held corporation). The Seller acknowledges
and confirms that the length of the term and geographical restrictions
contained in this Section are fair and reasonable and are not the result of
overreaching, duress or coercion of any kind. The Seller further acknowledges
and confirms that its full, uninhibited and faithful observance of each of the
covenants contained in this Section will not cause any undue hardship,
financial or otherwise, and that enforcement of each of the covenants
contained in this Section will not impair its ability to obtain employment
commensurate with its abilities and on terms fully acceptable to its or
otherwise to obtain income required for the comfortable support of its or its
family, and the satisfaction of the needs of its creditors. The Seller
acknowledges and confirms that its special knowledge of the business of an
Internet Service Provider and/or Internet-related retail store/cafe (and
anyone acquiring such knowledge through the Seller) is such as would cause the
Buyer and its business serious injury and loss if it (or anyone acquiring such
knowledge through the Seller) were to use such knowledge to the benefit of a
competitor or were to compete with the Buyer or any of its company-owned ISPs
and/or Internet related retail stores, catalog distributors, multilevel
distributors, or franchisees. In the event that any court shall finally hold
that the time or territory or any other provision stated in this Section
constitutes an unreasonable restriction upon the Buyer, the Seller agrees that
the provisions of this Agreement shall not be rendered void, but shall apply
as to time and territory or to such other extent as such court may judicially
determine or indicate constitutes a reasonable restriction under the
circumstances involved.
Diversion of Business and Interference with the Buyer - The Seller covenants
that a 36-month period following the execution of this Agreement, except as
otherwise provided in this Agreement or approved in writing by the Buyer that
the Seller will not directly or indirectly, solicit or otherwise attempt to
induce, by combining or conspiring with, or attempting to do so, or in any
other manner influence any Business Affiliate of the Buyer to terminate or
modify his, her or its business relationship with the Buyer or to compete
against the Buyer; or in any manner wrongfully interfere with, disturb,
disrupt, decrease or otherwise jeopardize the business of the Buyer.
Miscellaneous Terms and Conditions
A) Amendments. The provisions of the Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by the
Party s to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to the Agreement.
B) Binding Effect. All of the terms and provisions of the Agreement,
whether so express or not, shall be binding upon, inure to the benefit of, and
be enforceable by the Parties and their respective administrators, executors,
legal representative, heirs, successors and permitted assigns.
C) Severability. If any provision of the Agreement or any other Agreement
entered into pursuant hereto is contrary to, prohibited by or deemed invalid
under applicable law or regulation, such provision shall be inapplicable and
deemed omitted to the extent so contrary, prohibited or invalid, but the
remainder hereof shall not be invalidated thereby and shall be given full
force ad effect so far as possible.
D) Survival. All covenants, agreements, representations and warranties
made herein or otherwise made in writing by any party pursuant hereto shall
survive the execution and delivery of the Agreement and the consummation to
the transactions contemplated hereby.
E) Waivers. The failure or delay of any Party at any time to require
performance by another Party of any provision of the Agreement, even if known,
shall not affect the right of such Party to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by
any Party of any breach of any provision to the Agreement should not be
construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power
or remedy under the Agreement. No notice to or demand on any party in any
case shall, of itself, entitle such party to any other or further notice of
demand in similar or other circumstances.
F) Third Parties. Unless expressly stated herein to the contrary, nothing
in the Agreement, whether express or implied, is intended to confer rights or
remedies under or by reason of the Agreement to any person other than the
Parties hereto and their respective administrators, executors, other legal
representatives, heirs, successors and permitted assigns.
G) Jurisdiction and Venue. The Parties acknowledge that a substantial
portion of negotiations and anticipated performance and execution of the
Agreement occurred or shall occur in Palm Beach County, Florida, and that,
therefore, without limiting the jurisdiction or venue of any other federal or
state courts, each of the Parties irrevocably and unconditionally (a) agrees
that any suit, action or legal proceeding arising out of or relating to the
Agreement may be brought in the courts of record of the State of Florida in
Palm Beach County or the court of the United States, Southern District of
Florida; (b) consents to the jurisdiction of each such court in any suit,
action or proceeding; (c) waives any objection which it may have to the laying
of venue of any such suit, action or proceeding in any of such courts.
H) Enforcement Costs. If any legal action or other proceeding is brought
for the enforcement of the Agreement or because of an alleged dispute, breach,
default, or misrepresentation in connection with any provision of the
Agreement, the successful or prevailing Party or Parties shall be entitled to
recover reasonable attorneys fees, sales and use taxes, court costs and all
expenses even if not taxable as a court cost (including without limitation,
all such fees, taxes, costs and expenses incident to arbitration, appellate,
bankruptcy and post-judgment proceedings), incurred in that action or
proceeding, in addition to any other relief to which such Party or Parties may
be entitled. Attorneys' fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and all
other charges billed by the attorney to the prevailing Party.
I) Governing Law. The Agreement and all transactions contemplated by the
Agreement shall be governed by, and construed and enforced in accordance with,
the internal laws of the State of Florida with regard to principles of
conflicts of laws.
J) Entire Agreement. The Agreement, its Exhibits, its Addendum (if any),
and all other written agreements related to this Agreement and expressly
referenced in this Agreement, represents the entire understanding and
agreement among the Parties with respect to the subject matter hereof, and
supersedes all other negotiations, understandings and representations (if any)
mad by and among such Parties. No representations, inducements, promises or
agreements, oral or otherwise, if any, not embodied in this Agreement, its
Exhibits and all other written agreements related to this Agreement and
expressly referenced in this Agreement shall be of any force and effect.
K) Interpretation. Each of the parties acknowledge that they have been or
have had the opportunity to have been represented by their own counsel
throughout the negotiations and at the execution of this Agreement and all of
the other documents executed incidental to this Agreement and, therefore, none
of the parties shall, while this Agreement is effective or after its
termination, claim or assert that any of the provisions of this Agreement or
any of the other documents should be construed against the drafter of this
Agreement or any of the other documents.
L) Receipt of Completed Agreement. The Parties acknowledge the receipt of
a completed copy of this Agreement and all related agreements, containing all
materials terms, with all blanks filled in (except for the date, signatures
and any minor matters not material to the agreements) prior to the execution
of this Agreement.
M) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient in writing, and if sent be registered mail to
either Party at his or its last known address.
N) Indemnification. Parties will indemnify and hold Constructive Ideas,
Inc. and Xxxx X. Xxxxx harmless for any claims initiated by themselves or by
any customers, suppliers, investors, lenders, or other third parties arising
out of its relationship with the Parties.
O) Further Assurances. The Parties agree to execute and deliver such
further and other transfers, assignments, and documents, and to do all matters
and things that are legally required or reasonably necessary to effectuate the
intentions of this Agreement. This provision shall survive the closing.
P) Authority. The Parties acknowledge that they are corporate officers
of, and have the legal authority to obligate, their respective corporations to
this Agreement on which the full and proper name of Corporation(s) and
officer's title appear at the signature line below.
Q) Executed Agreement Copies. The Parties agree that a fully executed copy
of this agreement has been delivered to each party immediately upon its mutual
acceptance.
Acceptance - Intending to be legally bound, the above terms and conditions are
accepted by both parties on date indicated.
Agreed for Banana Corporation, Inc.: /s/Xxxxx Xxxxxxxx, President
Date: 01/31/97
Agreed for Net Lnnx, Inc. /s/Xxxxxx X. Xxxxx, President
Date: 01/31/97
Exhibit I - Equipment Purchase Q Serial Description Initial
N
Terminal Server (30 modems) 1 Xxxxxxxxxx Portmaster
Patch Panel & Cable 1
Local Network & Hub (Ethernet) 13-com FMS2
StarPlus Digital Phone System 5
& Phones
White Board 1
Right Angle Desks (1) 3
Desk (1) 1
Desk Chairs (1) 3
Casual Chairs (1) 3
Lateral File (1) 1
5-Shelf Unit (1) 1
Typing Table 1
Literature Rack 1
____________________________________
Note 1 - Matching sets - dark colored office furniture
Exhibit II - Equipment Leases Serial Q Cost/ Price Total Rent Initial
N 1000
Internet Server HP 5-133LC4441149 1 39.32 10,327 406
Internet Server HP 5-133LC 4141152 1 39.32 10,317 406
Internet Server HP 5-133LC
Router (Cisco 2501) 25508885 1 48.44 2,400 115
Modem USRobotics Sportster 28.8 44 48.44 187 216
ISDN Router - Ascend 6121446 1 48.44 16,825 815
(96/128K)
UPS SmartModem 700 (APC) 595127910885 1 48.44 398 12.20
UPS SmartModem 700 (APC) 596017969490 1 48.44 398
UPS SmartModem 700 (APC) 596017969488 1 48.44 398
UPS SmartModem 700 (APC) S76017969492 1 48.44 398
UPS SmartModem 700 (APC) 595127916738 1 48.44 398
UPS SmartModem 700 (APC) 000000000000 1 48.44 000
Xxxxxx - Xxxxxxxxx XXX XXXXX000000 1 132.92
HP Fax - 700 (CS530A) MY5AQA304S 1 23.18
HP5/166 Desktop US61051257 1 5,954 5954 240
Workstation(1)
HP5/166 Desktop US61058412 1
Workstation(1)
HP5/166 Desktop
Workstation(1)
Monitor 15" (HP-1024) KR54865827 1 48.44 413 413 20
Monitor 15" (HP-1024) KR54865829 1 48.44 413 413 20
Monitor 15" (HP-1024) 1 48.44 413 413 20
Monitor 15" (HP-1024) 1 48.44 413 413 20
HP DeskJet Color Printer 1
Modem Racks Cabinet (APC) 4
________________________________/
Note 1 - Includes CPU, Keyboard, Mouse, Case, Components
