EXHIBIT 2.10
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STOCK PURCHASE AGREEMENT
among
ARIEL WAY, INC.
and
MARKET CENTRAL, INC
September 24, 2004
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TABLE OF CONTENTS
ss.1. Definitions.................................................................................................4
ss.2. Purchase and Sale of Purchased Shares.......................................................................6
(a) Basic Transaction........................................................................................6
(b) Purchase Consideration...................................................................................6
(c) Closing..................................................................................................6
(d) Deliveries at Closing....................................................................................6
ss.3. Seller's Representations and Warranties....................................................................6
(a) Organization, Qualification, and Corporate Power.........................................................7
(b) Authorization of Transaction.............................................................................7
(c) Noncontravention.........................................................................................7
(d) Capitalization...........................................................................................7
(e) Subsidiaries and Equity Investments......................................................................8
(f) No Material Adverse Change; Subsequent Events............................................................8
(g) Legal Compliance.........................................................................................8
(h) Litigation...............................................................................................8
(i) Certain Business Relationships with Affiliates...........................................................8
(j) Brokers' Fees............................................................................................8
(k) Purchased Shares.........................................................................................8
(l) Disclaimer of Other Representations and Warranties.......................................................8
ss.4 Buyer's Representations and Warranties......................................................................9
(a) Organization, Qualification, and Corporate Power.........................................................9
(b) Authorization of Transaction.............................................................................9
(c) Noncontravention.........................................................................................9
(d) Brokers' Fees............................................................................................9
(e) Investment...............................................................................................9
ss.5. Pre-Closing Covenants.......................................................................................9
(a) General.................................................................................................10
(b) Operation of Business...................................................................................10
(c) Full Access.............................................................................................10
(d) Notice of Developments..................................................................................10
(e) Exclusivity.............................................................................................10
ss.6. Post-Closing Acknowledgements and Covenants................................................................10
(a) Mutual Acknowledgements Regarding Post-Closing Dividend of Purchased Shares.............................11
(b) Further Assurances......................................................................................11
ss.7. Conditions to Obligation to Close..........................................................................11
(a) Conditions to Buyer's Obligation........................................................................11
(b) Conditions to Seller's Obligation.......................................................................11
ss.8. Remedies for Breaches of This Agreement....................................................................12
(a) Survival of Representations and Warranties..............................................................12
(b) Indemnification Provisions for Buyer's Benefit..........................................................12
(c) Indemnification Provisions for Seller's Benefit.........................................................13
(d) Matters Involving Third Parties.........................................................................13
(e) Determination of Losses.................................................................................13
(f) Exclusive Remedy........................................................................................13
ss.9. Termination................................................................................................13
(a) Termination of Agreement................................................................................14
(b) Effect of Termination...................................................................................14
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ss.10. Miscellaneous.............................................................................................14
(a) Incorporation of Exhibits, Annexes, and Schedules.......................................................14
(b) Press Releases and Public Announcements.................................................................14
(c) No Third-Party Beneficiaries............................................................................14
(d) Construction............................................................................................15
(e) Entire Agreement........................................................................................15
(f) Succession and Assignment...............................................................................15
(g) Counterparts............................................................................................15
(h) Headings................................................................................................15
(i) Notices.................................................................................................15
(j) Governing Law; Jurisdiction.............................................................................16
(k) Amendments and Waivers..................................................................................16
(l) Severability............................................................................................16
(m) Expenses................................................................................................16
Exhibit A-- Purchase Consideration
Attachment A - CONVEY ON DEMAND and SNAP SOFTWARE - Software License and Service
Agreement
Attachment B - Assistance with Business Development and Strategic Support Services
Exhibit B - Disclosure Schedule
Annex I -- Exceptions to Seller's Representations and Warranties
Annex II -- Exceptions to Buyer's Representations and Warranties
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is entered into as of
September 24, 2004, by and among Market Central, Inc., a Delaware corporation
("BUYER"), and Ariel Way, Inc., a Delaware corporation ("SELLER"). Buyer and
Seller may be referred to individually herein as a "PARTY" and, collectively, as
the "PARTIES."
WHEREAS, Buyer and Seller mutually desire to consummate a transaction
whereby Buyer will purchase from Seller, and Seller will sell to Buyer, two
million (2,000,000) shares (the "PURCHASED SHARES") of the common stock, par
value $0.001 per share, of Seller (the "SELLER COMMON STOCK"), in exchange for
Buyer's payment of the Purchase Consideration as described (and defined) below;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
ss.1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"BUYER" has the meaning set forth in the preamble hereto.
"CLOSING" has the meaning set forth in ss.2(c) below.
"CLOSING DATE" has the meaning set forth in ss.2(c) below.
"CONFIDENTIAL INFORMATION" means any information concerning the Purchased
Shares and/or the businesses and affairs of Seller and its Affiliates that is
not already generally available to the public.
"DEVELOPMENT/SUPPORT SERVICES CONSIDERATION" has the meaning set forth in
ss.2(b) below.
"DGCL" means the General Corporation Law of the State of Delaware, as from
time to time amended and in effect.
"DISCLOSURE SCHEDULE" has the meaning set forth in ss.3 below.
"INDEMNIFIED PARTY" has the meaning set forth in ss.8(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in ss.8(d) below.
"KNOWLEDGE" means actual knowledge without independent inquiry or
investigation, which, in the case of an entity or Person other than a natural
person, shall mean the actual knowledge of the directors and senior executive
officers of such entity or other Person without independent inquiry or
investigation.
"LIEN" means any mortgage, pledge, lien, encumbrance, charge, or other
security interest, other than (a) liens incurred or arising (other than in
connection with the borrowing of money) in the Ordinary Course of Business for
amounts (x) not yet due and payable or (y) otherwise being actively contested in
good faith through appropriate proceedings, in each case for which appropriate
reserves are being maintained in accordance with generally accepted accounting
principles, and (b) solely in the case of the Purchased Shares, transfer
restrictions and similar limitations imposed thereon pursuant to the express
provisions of the Certificate of Incorporation or Bylaws of Seller, the DGCL,
the Securities Act or federal and state securities laws.
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"LOSSES" means all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, liabilities, obligations,
Taxes, liens, losses, expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
"MARKET CENTRAL TECHNOLOGY CONSIDERATION" has the meaning set forth in
ss.2(b) below.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means any effect or
change that would be materially adverse to the business of Seller and its
Subsidiaries, taken as a whole, or on the ability of any Party to consummate
timely the transactions contemplated hereby; provided that none of the following
shall be deemed to constitute, and none of the following shall be taken into
account in determining whether there has been, a Material Adverse Effect or
Material Adverse Change: (a) any adverse change, event, development, or effect
arising from or relating to (1) general business or economic conditions,
including such conditions related to the business of Seller and its
Subsidiaries, (2) national or international political or social conditions,
including the engagement by the United States in hostilities, whether or not
pursuant to the declaration of a national emergency or war, or the occurrence of
any military or terrorist attack upon the United States, or any of its
territories, possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States, (3) financial,
banking, or securities markets (including any disruption thereof and any decline
in the price of any security or any market index), (4) changes in United States
generally accepted accounting principles, (5) changes in law, rules,
regulations, orders, or other binding directives issued by any governmental
entity, or (6) the taking of any action contemplated by this Agreement and the
other agreements contemplated hereby, (b) any existing event, occurrence, or
circumstance with respect to which Buyer has Knowledge as of the date hereof,
and (c) any adverse change in or effect on the business of Seller and its
Subsidiaries that is cured by Seller before the earlier of (1) the Closing Date
and (2) the date on which this Agreement is terminated pursuant to ss.10 hereof.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business of any
specified Person(s) consistent with past custom and practice (including with
respect to quantity and frequency) of such Person(s).
"PARTY" has the meaning set forth in the preamble hereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity or a
governmental entity (or any department, agency, or political subdivision
thereof).
"PURCHASE CONSIDERATION" has the meaning set forth in ss.2(b) below.
"PURCHASED SHARES" has the meaning set forth in the recital above.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SELLER" has the meaning set forth in the preamble hereto.
"SELLER COMMON STOCK" has the meaning set forth in the recital above.
"SUBSIDIARY" shall mean, at any time, with respect to any Person (the
"Subject Person"), (i) any Person of which either (x) more than 50% of the
shares of stock or other interests entitled to vote in the election of directors
or comparable Persons performing similar functions (excluding shares or other
interests entitled to vote only upon the failure to pay dividends thereon or
other contingencies) or (y) more than a 50% interest in the profits or capital
of such Person are at the time owned or controlled directly or indirectly by the
Subject Person or through one or more Subsidiaries of the Subject Person or by
the Subject Person and one or more Subsidiaries of the Subject Person, or (ii)
any Person whose assets, or portions thereof, are consolidated with the net
earnings of the Subject Person and are recorded on the books of the Subject
Person for financial reporting purposes in accordance with GAAP.
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"TAX" or "TAXES" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"THIRD PARTY CLAIM" has the meaning set forth in ss.8(d) below.
ss.2. PURCHASE AND SALE OF PURCHASED SHARES.
(a) BASIC TRANSACTION. On and subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell to
Buyer, all of the Purchased Shares for the Purchase Consideration specified
below in ss.2(b).
(b) PURCHASE CONSIDERATION. Buyer agrees to deliver to Seller at the
Closing aggregate purchase consideration having a total value to Seller of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) (the "PURCHASE
CONSIDERATION"), payment of such Purchase Consideration to be effected by
Buyer's execution and delivery to Seller at Closing of: (i) an agreement in form
and substance satisfactory to Seller whereby Buyer shall commit to provide to
Seller, free of charge or any other cost or expense whatsoever to Seller, the
products, services and related interests and rights with respect to Market
Central Technology as are described in Exhibit A hereto (the "MARKET CENTRAL
TECHNOLOGY CONSIDERATION"), which Market Central Technology Consideration shall,
as and when provided in accordance with the foregoing agreement, have an
aggregate value to Seller of not less than Two Hundred Thousand and No/100
Dollars ($200,000.00), plus (ii) an agreement in form and substance satisfactory
to Seller whereby Buyer shall commit to provide to Seller, free of charge or any
other cost or expense whatsoever to Seller, certain business development and
strategic support services related to telecommunications and technology M&A,
marketing and technology activities, as well strategic business planning and
related assistance and services (the "DEVELOPMENT/SUPPORT SERVICES
CONSIDERATION"), which Development/Support Services Consideration shall be
rendered by Buyer's senior executives as and when directed by Seller and, when
so rendered, shall have an aggregate value to Seller of not less than Fifty
Thousand and No/100 Dollars ($50,000.00) as are described in Exhibit A hereto.
(c) CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of Xxxxxx Xxxx &
Xxxxxx LLP, in Vienna, Virginia, commencing at 10:00 a.m. local time on the
third (3rd) business day following the satisfaction or waiver of all conditions
to the obligations of the Parties to consummate the transactions contemplated
hereby (other than conditions with respect to actions the respective Parties
will take at the Closing itself) or such other date as Buyer and Seller may
mutually determine in writing (the "CLOSING DATE").
(d) DELIVERIES AT CLOSING. At the Closing, (i) Seller shall deliver to
Buyer the various certificates, instruments, and documents referred to in
ss.7(a) below, (ii) Buyer will deliver to Seller the various certificates,
instruments, and documents referred to in ss.7(b) below, (iii) Seller will
deliver to Buyer newly-issued stock certificates representing all of the
Purchased Shares, and (iv) Buyer will deliver to Seller the Purchase
Consideration specified in ss.2(b) above.
ss.3. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer that the statements contained in this ss.3 are correct and
complete as of the date of this Agreement and will be correct and complete in
all material respects as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.3(a)), except as set forth in the Disclosure Schedule delivered by Seller to
Buyer as attached hereto as Exhibit B, Annex I on and as of the date hereof (the
"DISCLOSURE SCHEDULE").
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(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Seller is duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware. Seller is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a Material
Adverse Effect. Seller has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. ss.3(a) of the Disclosure Schedule lists the directors and officers
of Seller.
(b) AUTHORIZATION OF TRANSACTION. Seller has corporate full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid, legal and binding obligation of
Seller, enforceable against Seller in accordance with its terms and conditions.
Seller is not required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for Seller to duly and fully perform its obligations as stipulated in
this Agreement. The execution, delivery and performance of this Agreement and
all other agreements contemplated hereby have been duly authorized by all
requisite corporate action of Seller.
(c) NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Seller is subject or any provision of
Seller's charter, bylaws, or other governing documents, (B) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any material agreement, contract, lease, license,
instrument, or other arrangement to which Seller is a party or by which Seller
is bound or to which any of its assets is subject, or (C) result in the
imposition or creation of a Lien upon or with respect to Purchased Shares.
(d) CAPITALIZATION. The entire authorized capital stock of Seller consists
of one hundred million (100,000,000) shares of Seller Common Stock out of which
fourteen million (14,000,000) shares are issued and outstanding, two million
(2,000,000) shares are reserved for issuance as the Purchase Shares hereunder
and four million (4,000,000) shares are held in treasury. All of the issued and
outstanding shares of Seller Common Stock as aforesaid have been duly
authorized, are validly issued, fully paid, and non-assessable, and are owned of
record by such Persons and in such amounts as listed in ss.3(d) of the
Disclosure Schedule. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments (other than this Agreement) that could require
Seller to issue, sell, or otherwise cause to become outstanding any of its
capital stock. Notwithstanding the foregoing, Buyer expressly acknowledges and
agrees that Seller is presently contemplating, and shall in all respects be
entitled and authorized to effect in Seller's sole and absolute discretion at
any time or from time to time prior to, at or after the Closing, one or more
issuances of all or any portion of the four million (4,000,000) unreserved
shares of Seller Common Stock currently held by Seller in treasury in connection
with any potential acquisition or equity-financing transaction(s) as Seller may
desire to effect hereafter. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any capital stock of Seller. Section 3(d) of the Disclosure Schedule
sets forth true, correct, and complete copies of the unaudited balance sheet,
and the related profit and loss statement for the Seller and each Subsidiary, on
a consolidated basis, as, at and for the period beginning on January 1, 2004 and
ending on September 23, 2004 (the "Seller Financial Statements"). The Seller
Financial Statements (i) have been prepared from, and are consistent with, the
books and records of the Seller and each respective Subsidiary; (ii) are
accurate and complete in all material respects; and (iii) fairly present, in all
material respects, the financial condition and results of operations of the
Seller and its Subsidiaries, on a consolidated basis, as at the dates, and for
the periods, stated therein. The financial books and records of the Seller and
each of its Subsidiaries are maintained in accordance with sound business
practices and applicable legal requirements.
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(e) SUBSIDIARIES AND EQUITY INVESTMENTS. Except as set forth in ss.3(e) of
the Disclosure Schedule, Seller does not have or maintain any direct or indirect
subsidiaries, nor does Seller otherwise own or have any right or commitment to
acquire, directly or indirectly, any outstanding capital stock of, or other
equity interests in, any Person.
(f) NO MATERIAL ADVERSE CHANGE; SUBSEQUENT EVENTS. At no time since the
date of Seller's original incorporation in Delaware on September 8, 2004, has
there occurred or existed any Material Adverse Change. Without limiting the
generality of the foregoing, at no time since such date has Seller or any of its
Affiliates engaged in any practice, taken any action, or entered into any
transaction outside the Ordinary Course of Business the primary purpose or
effect of which has been to decrease, deplete or impair the value of any of its
assets, businesses or prospects in any material respect.
(g) LEGAL COMPLIANCE. To the Knowledge of Seller, Seller has complied with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), except where the
failure to comply would not have a Material Adverse Effect.
(h) LITIGATION. ss.3(h) of the Disclosure Schedule sets forth each
instance in which Seller (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction, except where the injunction, judgment, order, decree, ruling,
action, suit, proceeding, hearing, or investigation would not have a Material
Adverse Effect.
(i) CERTAIN BUSINESS RELATIONSHIPS WITH AFFILIATES. Except as set forth in
ss.3(i) of the Disclosure Schedule, no Affiliate, director or officer of Seller
has been involved in any material business arrangement or relationship with
Seller within the past 12 months nor owns any material asset, tangible or
intangible, that is used in the business of Seller.
(j) BROKERS' FEES. Neither Seller nor any of its Affiliates has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement except as
set forth in ss.3(i) of the Disclosure Schedule.
(k) PURCHASED SHARES. Upon Buyer's delivery of the Purchase Consideration
at Closing as and in the manner provided in ss.2 above, the Purchased Shares
shall be duly authorized, validly issued, fully paid and non-assessable, and
shall be issued to Buyer free and clear of any and all Liens. The Purchased
Shares are not and, upon issuance thereof at Closing, shall not be subject to
any (x) option, warrant, purchase right, or other contract or commitment in
favor of any Person other than Buyer or (y) voting trust, proxy, or other
agreement or understanding with respect to the voting thereof.
(l) DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as
expressly set forth in this ss.3, Seller makes no representation or warranty,
express or implied, at law or in equity, as to the Purchased Shares or otherwise
in respect of Seller, any Affiliate of Seller, or any of their respective
assets, liabilities or operations, including with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. Buyer hereby acknowledges and agrees
that, except to the extent specifically set forth in this ss.3, Buyer is
purchasing the Purchased Shares on an "as-is, where-is" basis.
ss.4 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to Seller that the statements contained in this ss.4 are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this ss.4), except as set forth in Exhibit
B, Annex II attached hereto.
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(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Buyer is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where such qualification
is required, except where the lack of such qualification would not have a
Material Adverse Effect. Buyer has full corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties owned
and used by it. ss.4(a) of the Disclosure Schedule lists the directors and
officers of Buyer.
(b) AUTHORIZATION OF TRANSACTION. Buyer has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and
under any and all agreements relating the Purchase Consideration as contemplated
hereby. This Agreement (and each related agreement as aforesaid) constitutes the
valid, legal and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms and conditions. Buyer is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby have
been duly authorized by Buyer. Buyer has good and unencumbered title to and/or
other legally-sufficient rights to or interests in, and is fully and
unconditionally entitled to furnish and convey to Seller, any and all products,
services, rights and interests included or to be included in the Convey OnDemand
Consideration and the Development/Support Services Consideration deliverable to
Seller upon and after the Closing.
(c) NON-CONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Buyer is subject or any provision of
Buyer's charter, bylaws, or other governing documents or (B) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any material agreement, contract, lease, license,
instrument, or other arrangement to which Buyer is a party or by which it is
bound or to which any of its assets is subject.
(d) BROKERS' FEES. Neither Buyer nor any of its Affiliates has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
(e) INVESTMENT. Buyer (A) understands that the Purchased Shares have not
been, and will not be, registered under the Securities Act, or under any state
securities laws, and are being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (B) is
acquiring the Purchased Shares solely for its own account for investment
purposes and, other than any proposed dividend thereof (which shall not
constitute a "distribution" for purposes of this ss.4(e)(B)) by Buyer to its
stockholders as expressly acknowledged by the Parties under ss.6(a) below, not
with a view to the distribution thereof; (C) is a sophisticated investor with
knowledge and experience in business and financial matters, (D) has received
certain information concerning Seller and the Purchased Shares and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the Purchased Shares, (E) is able to
bear the economic risk and lack of liquidity inherent in holding the Purchased
Shares, and (F) together with its applicable Affiliate(s), is an Accredited
Investor.
ss.5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary or otherwise reasonably proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
Closing conditions set forth in ss.7 below).
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(b) OPERATION OF BUSINESS. Seller will not, and will not cause or permit
any of its Affiliates to, engage in any practice, take any action, or enter into
any transaction with respect to Seller outside the Ordinary Course of Business
of Seller. Without limiting the generality of the foregoing, Seller will not,
and will not cause or permit any of its Affiliates to, engage in any practice,
take any action, or enter into any transaction outside the Ordinary Course of
Business the primary purpose or effect of which is to decrease, deplete or
impair the value of any of its assets, businesses or prospects in any material
respect. Seller will cause its executive officers to use their respective
commercially reasonable efforts to preserve intact Seller's business
organization and the good will of its customers, suppliers, employees and others
having material business relations with Seller.
(c) FULL ACCESS. Seller will permit representatives of Buyer (including
legal counsel and accountants) to have full access at all reasonable times, and
in a manner so as not to interfere with the normal business operations of Seller
and its Affiliates, to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to Seller and
the Purchased Shares. Buyer will treat and hold as such any Confidential
Information it receives from any of Seller and/or its Affiliates and
representatives in the course of the reviews contemplated by this ss.5(c), will
not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever, will
return to Seller all tangible embodiments (and all copies) of the Confidential
Information which are in its possession.
(d) NOTICE OF DEVELOPMENTS.
(i) Seller may elect at any time to notify Buyer of any development
causing a breach of any of the representations and warranties in ss.3
above. Unless Buyer has the right to terminate this Agreement pursuant to
ss.9(a)(ii) below by reason of the development and exercises that right
within the period of fifteen (15) business days referred to in ss.9(a)(ii)
below, the written notice pursuant to this ss.5(d)(i) will be deemed to
have amended the Disclosure Schedule, to have qualified the
representations and warranties contained in ss.3 above, and to have cured
any misrepresentation or breach of warranty that otherwise might have
existed hereunder by reason of the development.
(ii) Each Party will give prompt written notice to the others of any
material adverse development causing a breach of any of his or its own
representations and warranties in ss.3 above. No disclosure by any Party
pursuant to this ss.5(d)(ii), however, shall be deemed to amend or
supplement Annex I or the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.
(e) EXCLUSIVITY. Seller will not (and will not cause or permit any
Affiliate, officer, director, employee or agent to) solicit, initiate, or
encourage the submission of any proposal or offer (including by engaging in any
discussions or negotiations or furnishing any information with respect to any
such matters) from any Person relating to the acquisition or disposition of any
material portion of the capital stock or assets of Seller (including any
acquisition structured as a merger, consolidation, or share exchange); provided,
however, that Seller, its Affiliates and their respective directors and officers
will remain free to participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing to the extent (x) relating to any proposed acquisition or
equity-financing transaction with respect to Seller Common Stock held in
treasury as referred to in ss.3(d) above, or (y) their fiduciary duties may
require.
ss.6. POST-CLOSING ACKNOWLEDGEMENTS AND COVENANTS. The Parties agree as
follows with respect to the period following the Closing.
(a) MUTUAL ACKNOWLEDGEMENTS REGARDING POST-CLOSING DIVIDEND OF PURCHASED
SHARES. Subject to and in compliance with all applicable requirements of Buyer's
charter, bylaws and other governing documents and all federal, state and local
laws, rules and regulations pertaining thereto, Buyer intends to effect, as soon
as practicable following the Closing, an in-kind dividend to its stockholders of
all or some portion of the Purchased Shares, but no less than eighty percent
(80%) of the Purchased Shares. For purposes of, but subject to, Buyer's
undertaking to make the foregoing dividend of the Purchased Shares, Seller
agrees to cooperate with Buyer in using commercially reasonable efforts to
effect the registration, at the Seller's expense, of the Purchased Shares under
the Securities Act and to provide such other notices and effect such other
filings under the Securities Act, Securities Exchange Act and/or comparable
state securities laws as may be necessary or reasonably appropriate in
connection with such registration and the authorization of such Purchased Shares
for public resale.
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(b) FURTHER ASSURANCES. In case at any time after the Closing any
further action is necessary or reasonably appropriate to carry out the purposes
and intent (including the Parties' intent as expressed in the foregoing ss.6(a))
of this Agreement, each of the Parties will take such further action (including
the execution and delivery of such further instruments and documents) as any
other Party reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to indemnification
therefor under ss.8 below).
ss.7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO BUYER'S OBLIGATION. Buyer's obligation to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.3 above shall
be true and correct in all material respects at and as of the Closing
Date, except to the extent that such representations and warranties are
qualified by terms such as "material" and "Material Adverse Effect," in
which case such representations and warranties shall be true and correct
in all respects at and as of the Closing Date;
(ii) Seller shall have performed and complied with all of its
pre-Closing covenants hereunder in all material respects as of and through
the Closing, except to the extent that such covenants are qualified by
terms such as "material" and "Material Adverse Effect," in which case
Seller shall have performed and complied with all of such covenants in all
respects as of and through the Closing;
(iii) there shall not be in effect any injunction, judgment, order,
decree, ruling, or change in law, rule or regulation preventing
consummation of any of the transactions contemplated by this Agreement;
(iv) Seller shall have signed and executed Convertible Debenture and
Standby Equity Distribution Agreement with Cornell Capital Partners, LP;
and
(v) Seller shall have delivered to Buyer a certificate to the effect
that each of the conditions specified above in ss.7(a)(i)-(iv) has been,
and remains as of the Closing Date, satisfied in all respects.
Buyer may waive any condition specified in this ss.7(a) by written notice to
such effect delivered in Buyer's sole and absolute discretion at any time prior
to or as of the Closing.
(b) CONDITIONS TO SELLER'S OBLIGATION. Seller's obligation to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.4 above shall
be true and correct in all material respects at and as of the Closing
Date, except to the extent that such representations and warranties are
qualified by terms such as "material" and "Material Adverse Effect," in
which case such representations and warranties shall be true and correct
in all respects at and as of the Closing Date;
(ii) Buyer shall have performed and complied with all of its
pre-Closing covenants hereunder in all material respects as of and through
the Closing, except to the extent that such covenants are qualified by
terms such as "material" and "Material Adverse Effect," in which case
Buyer shall have performed and complied with all of such covenants in all
respects as of and through the Closing;
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(iii) Seller shall have received from Buyer duly-executed
counterparts of the agreements with respect to the Purchase Consideration
referred to in clauses (i) and (ii) of ss.2(b) above, with such agreements
in each case being in form and substance satisfactory to Seller;
(iv) there shall not be in effect any injunction, judgment, order,
decree, ruling, or change in law, rule or regulation preventing
consummation of any of the transactions contemplated by this Agreement;
(v) the Board of Directors of Buyer shall have approved the
transactions contemplated by this Agreement; and
(vi) Buyer shall have delivered to Seller a certificate to the
effect that each of the conditions specified above in ss.7(b)(i)-(v) has
been, and remains as of the Closing Date, satisfied in all respects.
Seller may waive any condition specified in this ss.7(b) by written notice to
such effect delivered in Seller's sole and absolute discretion at any time prior
to or as of the Closing.
ss.8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the representations
and warranties of Seller contained in ss.3 above shall survive the Closing
hereunder (unless Buyer had Knowledge of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and effect until the
twelve (12) month anniversary of the Closing Date, whereupon any right, remedy
or claim by, through or on behalf of Buyer with respect to misrepresentation or
breach of any thereof shall be immediately and irrevocably waived and forever
barred. All of the representations and warranties of Buyer contained in ss.4
above shall survive the Closing hereunder (unless Seller knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing) and
continue in full force and effect until the twelve (12) month anniversary of the
Closing Date, whereupon any right, remedy or claim by, through or on behalf of
Seller with respect to misrepresentation or breach of any thereof shall be
immediately and irrevocably waived and forever barred.
(b) INDEMNIFICATION PROVISIONS FOR BUYER'S BENEFIT.
(i) In the event Seller breaches any of its representations, warranties,
and covenants contained herein, and provided that Buyer makes a written claim
for indemnification against Seller within the survival period (if there is an
applicable survival period pursuant to ss.8(a) above), then Seller shall
indemnify Buyer from and against any and all Losses (but excluding any Losses
suffered after the end of any applicable survival period) reasonably and
proximately resulting from such breach; provided that Seller will be obligated
only to indemnify Buyer from and against such Losses to the extent that (A) the
total amount of all such Losses incurred by Buyer as of and through the relevant
date equals or exceeds Twenty-Five Thousand Dollars ($25,000) in the aggregate
(which indemnity shall commence from the first Dollar of Loss exceeding such
threshold amount), and (B) the total amount of Losses for which Seller has
previously indemnified Buyer would not, when added together with the
indemnifiable Losses currently claimed by Buyer, exceed the total value to
Seller of the Purchase Consideration recited in ss.2(b) above, which amount
shall constitute Seller's maximum liability under any indemnity obligation
hereunder or any other theory or claim of damages or recovery asserted or
alleged by, through or on behalf of Buyer in connection with any matters subject
or in any manner related to this Agreement; and
(ii) Seller agrees to indemnify and hold harmless Buyer, each person, if
any, who controls Buyer within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and each director and officer of Buyer as follows:
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(A) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement (or any amendment thereto) referenced in Section 6(a) of this
Agreement, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in any preliminary or final
prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(B) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any claim that the dividend of the
Purchased Shares by Buyer to its stockholders was in any in violation of
any applicable provision of the Delaware General Corporation Code;
(C) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation
of the nature referred to above; provided that any such settlement is
effected with the written consent of Seller; and
(D) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Buyer),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to Seller by Buyer
expressly for use in such registration statement (or any amendment thereto), or
any preliminary or final prospectus (or any amendment or supplement thereto).
The indemnification provisions set forth in Section 8(b)(ii) shall not be
limited by the provisions of Section 8(b)(i).
(c) INDEMNIFICATION PROVISIONS FOR SELLER'S BENEFIT. In the event Buyer
breaches any of its representations, warranties, and covenants contained herein,
and provided that Seller makes a written claim for indemnification against Buyer
within the survival period (if there is an applicable survival period pursuant
to ss.8(a) above), then Buyer shall indemnify Seller from and against any and
all Losses (but excluding any Losses suffered after the end of any applicable
survival period) reasonably and proximately resulting from such breach; provided
that Buyer will be obligated only to indemnify Seller from and against such
Losses to the extent that (A) the total amount of all such Losses incurred by
Seller as of and through the relevant date equals or exceeds Twenty-Five
Thousand Dollars ($25,000) in the aggregate (which indemnity shall commence from
the first Dollar of Loss exceeding such threshold amount), and (B) the total
amount of Losses for which Buyer has previously indemnified Seller would not,
when added together with the indemnifiable Losses currently claimed by Seller,
exceed the total value to Seller of the Purchase Consideration recited in
ss.2(b) above, which amount shall constitute Buyer's maximum liability under any
indemnity obligation hereunder or any other theory or claim of damages or
recovery asserted or alleged by, through or on behalf of Seller in connection
with any matters subject or in any manner related to this Agreement.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the "INDEMNIFIED
PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which may give
rise to a claim for indemnification against any other Party (the
"INDEMNIFYING PARTY") under this ss.8, then the Indemnified Party shall
promptly (and in any event within five (5) business days after receiving
notice of the Third Party Claim) notify each Indemnifying Party thereof in
writing.
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(ii) Any Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with
counsel of his or its choice reasonably satisfactory to the Indemnified
Party; provided, however, that the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnified
Party (such consent not to be unreasonably withheld, conditioned or
delayed if the applicable judgment or proposed settlement involves only
the payment of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party).
(iii) Unless and until an Indemnifying Party assumes the defense of
the Third Party Claim as provided in ss.8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner
it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not to
be unreasonably withheld, conditioned or delayed).
(e) DETERMINATION OF LOSSES. All indemnification payments under this ss.8
shall be paid by the Indemnifying Party net of any Tax benefits and insurance
coverage that may be available to the Indemnified Party.
(f) EXCLUSIVE REMEDY. Buyer and Seller acknowledge and agree that the
foregoing indemnification provisions in this ss.8 shall be the exclusive remedy
of Buyer and Seller with respect to Seller, Buyer, their respective Affiliates,
the Purchased Shares and the transactions contemplated by this Agreement.
ss.9. TERMINATION.
(a) TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination as follows:
(i) Buyer and Seller may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing in the event (A) Seller has within
the then-previous ten (10) business days given Buyer any notice pursuant
to ss.5(d)(i) above and (B) the development that is the subject of the
notice has had a Material Adverse Effect;
(iii) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing (A) in the event Seller has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, Buyer has notified Seller of the
breach, and the breach has continued without cure for a period of fifteen
(15) business days after the notice of breach or (B) if the Closing shall
not have occurred on or before September 30, 2004, by reason of the
failure of any condition precedent under ss.7(a) hereof (unless the
failure results primarily from Buyer itself breaching any representation,
warranty, or covenant contained in this Agreement); and
(iv) Seller may terminate this Agreement by giving written notice to
Buyer at any time prior to the Closing (A) in the event Buyer has breached
any material representation, warranty, or covenant contained in this
Agreement in any material respect, Seller has notified Buyer of the
breach, and the breach has continued without cure for a period of fifteen
(15) business days after the notice of breach or (B) if the Closing shall
not have occurred on or before September 30, 2004, by reason of the
failure of any condition precedent under ss.7(b) hereof (unless the
failure results primarily from Seller breaching any representation,
warranty, or covenant contained in this Agreement).
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(b) EFFECT OF TERMINATION. If any Party terminates this Agreement pursuant
to ss.9(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in ss.5(d) above shall survive termination.
ss.10. MISCELLANEOUS.
(a) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party, except for
such public disclosures to the minimum extent reasonably and in good faith
believed by a Party, on the advice of its legal counsel, to be required by
applicable law or any listing or trading agreement concerning the
publicly-traded securities of such Party (in which case the disclosing Party
will use its best efforts to advise and cooperate with the other Party prior to
making such disclosure in order to minimize the scope and effect thereof to the
extent practicable in the circumstances).
(c) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns. Without limiting the foregoing, no stockholder
or Affiliate of Buyer shall, by virtue of any Purchased Shares dividend or
distribution reference made in ss.6(a) above or otherwise, have any right or
interest whatsoever in any transactions or other matters contemplated by this
Agreement.
(d) CONSTRUCTION. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word " including" shall mean including without limitation.
(e) ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire and exclusive agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
(f) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party hereto (such approval not to be unreasonably withheld,
condition or delayed in the case of any proposed assignment by a Party of any or
all of its rights and interests hereunder to one or more of its Affiliates,
subject to such Party's remaining fully responsible for the performance of all
of its obligations hereunder).
(g) COUNTERPARTS. This Agreement may be executed in one or more
counterparts (including by means of facsimile), each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
(h) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(i) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) when delivered
personally to the recipient, (ii) one business day after being sent to the
recipient by reputable overnight courier service (charges prepaid), (iii) one
business day after being sent to the recipient by facsimile transmission or
electronic mail, or (iv) four business days after being mailed to the recipient
by certified or registered mail, return receipt requested and postage prepaid,
and addressed to the intended recipient as set forth below:
IF TO SELLER: COPY TO:
Ariel Way, Inc. Xxxxxx Xxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxxxx Xxxxx 0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 0000 Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx Attention: Xxx Xxxxxxxxxx, Esq.
Xxxxx Xxxx, Esq.
Facsimile: 000-000-0000 Facsimile: 000-000-0000
IF TO BUYER: COPY TO:
Market Central, Inc. Xxxxxxxxx Trauig, LLP
0000X Xxx Xxxxxx Xxxx 0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(j) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the domestic laws of the Commonwealth of Virginia
without giving effect to any choice or conflict of law provision or rule
(whether of the Commonwealth of Virginia or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Virginia. Each Party hereby irrevocably and unconditionally
submits to the non-exclusive jurisdiction, forum and venue of any federal or
state court located in the Commonwealth of Virginia with respect to any dispute,
controversy or suit arising under or in connection with this Agreement or any
matter(s) contemplated hereby.
(k) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller. No waiver by any Party of any provision of this Agreement or any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be valid unless the same shall be in writing and
signed by the Party making such waiver, nor shall such waiver be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(l) SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) EXPENSES. Each of Buyer and Seller will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby; provided, however, that all
transfer, documentary, sales, use, stamp, registration and other such Taxes, and
all conveyance fees, recording charges and other fees and charges (including any
penalties and interest) incurred in connection with the consummation of the
transactions contemplated by this Agreement shall be paid by Buyer when due, and
Buyer shall, at its own expense, file all necessary Tax returns and other
documentation with respect to all such Taxes, fees and charges, and, if required
by applicable law.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
Seller: ARIEL WAY, INC.
------
________________________________
By: ____________________________
Title: _________________________
Buyer: MARKET CENTRAL, INC.
-----
________________________________
By: ____________________________
Title: _________________________
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EXHIBIT A
PURCHASE CONSIDERATION
PURCHASE CONSIDERATION. Buyer agrees to deliver to Seller at the Closing
aggregate purchase consideration having a total value to Seller of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) (the "PURCHASE CONSIDERATION"),
payment of such Purchase Consideration to be effected by Buyer's execution and
delivery to Seller at Closing of:
(i) an agreement in form and substance satisfactory to Seller whereby Buyer
shall commit to provide to Seller, free of charge or any other cost or expense
whatsoever to Seller, the products, services and related interests and rights
with respect to Market Central Technology as are described in Exhibit A,
Attachment A hereto (the "MARKET CENTRAL TECHNOLOGY CONSIDERATION"), which
Market Central Technology Consideration shall, as and when provided in
accordance with the foregoing agreement, have an aggregate value to Seller of
not less than Two Hundred Thousand and No/100 Dollars ($200,000.00). Buyer shall
have the right of Software License and Service Agreements as described by the
respective Attachments below for a total license fee of Two Hundred Thousand and
No/100 Dollars ($200,000.00).
Attachment A - Convey on Demand and SNAP Software - Software License and Service
Agreement
(ii) an agreement in form and substance satisfactory to Seller whereby Buyer
shall commit to provide to Seller, free of charge or any other cost or expense
whatsoever to Seller, certain business development and strategic support
services related to telecommunications and technology M&A, marketing and
technology activities, as well strategic business planning and related
assistance and services (the "DEVELOPMENT/SUPPORT SERVICES Consideration"),
which Development/Support Services Consideration shall be rendered by Buyer's
senior executives as and when directed by Seller and, when so rendered, shall
have an aggregate value to Seller of not less than Fifty Thousand and No/100
Dollars ($50,000.00) as are described in Exhibit A, Attachment B - Assistance
with Business Development and Strategic Support Services hereto.
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EXHIBIT A
ATTACHMENT A
MARKET CENTRAL TECHNOLOGY CONSIDERATION
CONVEY ON DEMAND AND SNAP SOFTWARE - SOFTWARE LICENSE AND SERVICES AGREEMENT
(See Separate Document)
-19-
EXHIBIT A
ATTACHMENT B
DEVELOPMENT/SUPPORT SERVICES CONSIDERATION
ASSISTANCE WITH BUSINESS DEVELOPMENT AND STRATEGIC SUPPORT SERVICES
Services Provided: Market Central senior executives will provide the Seller with
business development and strategic support services as independent consultants
related to telecom and technology M&A, marketing and technology activities, and
strategic business planning.
Senior Executives Providing the Services: The services provided shall be by Xx.
Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxxxx, both senior executive representatives of
Market Central, Inc., the Buyer
Period of Duration of Services Provided: Over a twelve (12) month period
starting upon the Closing Date of this Agreement
Minimum Number of Hours of Services Provided: A minimum of two hundred fifty
(250) hours of services over a twelve (12) month period
Point of Contact within Seller: The Chairman of the Board
Value of Services Provided: The services provided by Market Central are valued
at $50,000.00 based on an hourly rate of $200.00 per hour.
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EXHIBIT B
DISCLOSURE SCHEDULE
ANNEX I
EXCEPTION TO SELLER'S REPRESENTATIONS AND WARRANTIES
ss.3(d) Issued and outstanding shares of Seller Common Stock:
The Dunhem Family Trust 7,600,000 shares
Xxxxx Xxxxx 2,800,000 shares
Xxxxx Xxxxxxxx 1,100,000 shares
Xxxxxxxxxxx Xxxxxxxxx 480,000 shares
Xxxxx Xxxxxx 400,000 shares
Xxxxxxx X. Xxxxxx 300,000 shares
Xxxxx Xxxxxxxxx 300,000 shares
Xxxx Xxxxxxx 300,000 shares
Xxxxxx Xxxx 200,000 shares
Others, Reserve 520,000 shares
Total Issued 14,000,000 shares
ss.3(d) Outstanding Options
None Outstanding
ss.3(d) Outstanding Warrants
Three members of the Management Team Xxxx Xxxxxx, Xxxxx Xxxxx and Xxxxx
Xxxxxxxx respectively have been granted a warrant to acquire shares of the
Seller's Common Stock as follows from their respective employment agreements:
Mr. Dunhem, Kumar and Battikha respectively will, upon the completion of
an application by Ariel Way, Inc to become a public company or of an acquisition
or merger of Ariel Way, Inc. with a public corporate entity making the surviving
company a public company with the Ariel Way, Inc.'s shareholders controlling at
least eighty five percent (85%) of the surviving company, be granted a warrant,
assuming that the total number of outstanding public shares of the Company is
twenty million (20,000,000) shares of Common Stock, to acquire 1,150,000,
980,000, and 780,000 respectively shares of the Company's common stock at an
exercise price of $0.010 per share (the "Warrant Shares") to vest as follows:
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(i) 30,000, 25,000, and 20,000 respectively Warrant Shares shall vest each month
during the term of this Agreement or immediately if Mr. Dunhem, Kumar and
Battikha's respective employment is terminated without cause or for good reason
or due to a change in control, sale of a majority of the common stock or
substantially all of the assets of the Company or merger of the Company into or
with another company (unless such company is less than fifty percent (50%) of
the size (measured by market value) of the Company) or reverse merger with
another company; and (ii) 430,000, 380,000, and 300,000 respectively Warrant
Shares will vest immediately upon the Company achieving a $25 million market cap
for ten (10) consecutive trading days and a price per share of not less than
$0.50. The Warrant Shares granted hereunder must be exercised by the tenth
anniversary of the date of vesting or shall be forfeited by Mr. Dunhem, Kumar
and Battikha respectively. All Warrant Shares granted hereunder shall have a
"cashless" exercise provision which enables Mr. Dunhem, Kumar and Battikha
respectively to give up a portion of his Warrant Shares in order to exercise
others without paying cash for them. The number of warrant shares shall be
prorate adjusted if the assumption that the initial total number of outstanding
shares of public Common Stock of the surviving Company is different from twenty
million (20,000,000) shares of Common Stock. Further, the number, kind and
strike price of the stock Warrant Shares granted hereunder shall be
appropriately and equitably adjusted to reflect any stock dividend, stock split,
spin-off, split-off, extraordinary cash dividend, recapitalization,
reclassification or other major corporate action affecting the stock of the
Company to the end that after such event Mr. Dunhem, Kumar and Battikha's
respectively proportionate interest in the Company shall be maintained as before
the occurrence of such event. Mr. Dunhem, Kumar and Battikha respectively shall
also receive payment of any cash dividend or stock dividend declared and paid by
the Company as if Mr. Dunhem, Kumar and Battikha respectively had already
exercised all of his Warrant Shares, including unvested Warrant Shares.
ss.3(d) Seller Financial Statements
a. See separate document "Ariel Way, Inc., Balance Sheet, As of
September 23, 2004"
b. See separate document "Ariel Way, Inc., Profit & Loss, January 1,
2004 through September 23, 2004"
ss.3(i) Brokers' Fees
Seller has engaged Xx. Xxxxxxx X. Xxxxxx as Consultant, on a non-exclusive
basis to locate and refer to Seller companies that wish to engage in M&A
activities with Seller and to refer companies to Seller. Consultant is to be
paid upon the closing of a transaction as defined as the execution of a
definitive agreement and closing of a transaction between Seller and a company,
referred to Seller by Consultant. A total of 300,000 shares of Common Stock of
Seller has been set aside as compensation for Consultant.
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EXHIBIT B
DISCLOSURE SCHEDULE
ANNEX II
EXCEPTION TO BUYER'S REPRESENTATIONS AND WARRANTIES
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