PATENT PURCHASE AGREEMENT
Exhibit
10.2
THIS
PATENT PURCHASE AGREEMENT (this “Agreement”)
is
effective as of June 22, 2006 (the “Effective
Date”),
by
and among ELECTRONIC
BILLBOARD TECHNOLOGY, INC.,
a
Delaware corporation (the “Seller”),
NANO-PROPRIETARY,
INC.,
a Texas
corporation (the “Stockholder”)
and
NOVUS
COMMUNICATION TECHNOLOGIES, INC.,
an Ohio
corporation (the “Purchaser”).
Background
Seller
desires to sell and Purchaser desires to purchase substantially all of the
system and method patents and patent applications related thereto of Seller
related to digital billboard networks and advertising therewith, all as more
particularly described in this Agreement.
NOW
THEREFORE,
in
consideration of the representations, warranties and covenants contained
in this
Agreement and other consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. CLOSING.
The
closing of this Agreement (the “Closing”)
will
take place within five business days following the date on which the conditions
set forth in this Agreement have been satisfied or duly waived or on such
other
date as the parties mutually agree, but in no event later than June 22, 2006
(the “Closing
Date”).
2. ASSETS
TO BE PURCHASED.
On
the
Closing Date and subject to the terms and conditions of this Agreement, Seller
shall sell, convey, transfer, assign, set over and deliver to Purchaser all
of
Seller’s right, title and interest in and to the following assets (collectively,
the “Purchased
Assets”):
2.1 all
system or method patents or patent applications (and all patents issuing
therefrom), owned or licensed by Seller, related to digital billboard networks
or advertising, and all goodwill associated therewith, including, but not
limited to, those listed on Exhibit
A
and all
continuations, continuations-in-part, divisionals, reexaminations, reissues,
extensions, and foreign counterparts, as well as all patents or patent
applications claiming priority from any of the foregoing, and the right to
claim
priority to any of the foregoing (the “Intellectual
Property”);
2.2 all
documents and documentation (whether in written or electronic form), owned,
possessed, in the custody of or under the control of Seller, which are related
to the Intellectual Property, including, but not limited to, research
documentation, inventors’ notebooks, prototypes, designs, software and similar
materials, invention disclosure documents, and file histories for any patents
and patent applications; and
2.3 the
right
to all causes of action (either in law or in equity) and the right to xxx,
counterclaim, cross-claim, and recover for past, present or future infringement,
misappropriation or violation of the Intellectual Property (or any portion
thereof) in the United States and throughout the world.
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3. CONSIDERATION;
CASH TO CLOSE; DOCUMENTS TO BE DELIVERED AT CLOSING; CLOSING
PROCEDURE.
In
exchange for Seller's fulfillment of its obligations hereunder, Purchaser
agrees
to pay Seller the following consideration ("Consideration"):
3.1 Initial
Consideration.
The
initial consideration for the Purchased Assets payable hereunder shall be
$1,000,000.00 (the “Initial
Consideration”),
subject to the adjustment expressly set forth below. All adjustments to the
Initial Consideration shall be set forth on a closing statement that Purchaser
prepares and delivers to Seller prior to the Closing (the “Closing
Statement”).
Purchaser shall pay $1,000.00 of the Initial Consideration to each of the
Stockholder and Seller as set forth on the Closing Statement pursuant to
the
terms and conditions of the non-compete agreements between Purchaser and
each of
Seller and Stockholder in the form set forth on Exhibit
B
(the
“Noncompete
Agreements”).
The
Initial Consideration as adjusted on the Closing Statement shall be referred
to
herein as “Cash
to Close.”
All
of
the Cash to Close shall be paid in immediately available funds to Seller
in the
manner set forth on the Closing Statement. The parties hereby agree that
the
Closing Statement shall reflect an adjustment in favor of Purchaser in the
amount of $100,000, which reflects the amount Purchaser has previously paid
to
Seller towards the Purchase Price.
3.2 Royalty.
3.2.1 In
addition to the Initial Consideration, as further consideration for the
transactions contemplated hereby, Purchaser shall pay to Seller a royalty
(the
"Royalty")
in the
amount and pursuant to the terms set forth on Exhibit
C.
3.2.2 As
used
herein, "Licensing
Revenue"
shall
mean all revenues actually received by NOVUS Partners LLC ("Partners")
from
third party licensees (whether in the form of a royalty or licensing fee),
but
only with respect to activities by any such licensee which fall within the
scope
of (including as to term and geography) any issued patent included in the
Patent
Package (as defined below).
3.2.3 As
used
herein, "Direct
Expenses"
shall
mean any and all expenses incurred by Purchaser and Partners which are related
to the prosecution, maintenance and defense of the Purchased Assets. Defense
of
the Purchased Assets shall include all expenses associated with patent
reexaminations or oppositions (or similar proceedings), as well as any other
administrative or court proceeding in which the validity, ownership or
enforceability of a Purchased Asset is challenged by a third party, whether
by
way of direct claim (e.g., a declaratory judgment action), counter claim
or
cross claim. Purchaser or its assignee shall be solely responsible for the
prosecution, maintenance and enforcement of the Patent Package, including
the
Purchased Assets. Notwithstanding the foregoing, Direct Expenses will not
include counterclaims or cross claims made by a third party in response to
litigation initiated by Partners, including, without limitation, any patent
infringement litigation brought by Partners against such third party. Such
litigation expenses and costs shall be included in the litigation expenses
described in Section 3.2.10
below.
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3.2.4 As
used herein, "Patent Package" shall mean the Intellectual Property,
together with the patents and patent applications (and all patents issuing
therefrom) identified in Exhibit D hereto, and all continuations,
continuations-in-part, divisionals, reexaminations, reissues, extensions,
and
foreign counterparts, as well as all patents or patent applications claiming
priority from any of the foregoing. The Patent Package shall further include
any
additional patents and patent applications claiming systems or methods for
networked digital advertising which are developed by Partners. A patent or
patent application shall be considered to have been developed by Partners
if all
of the named inventors, at the time of their invention, had an obligation
to
assign their rights in that invention to Partners. Partners may, in its sole
discretion, offer to add to the Patent Package any additional patent or patent
application acquired by Partners. Such offer shall be made in writing, and
Seller may elect, within thirty (30) days after receipt, to accept the offer.
If
the offer is accepted by Seller, ******* percent (**%) of the purchase
price ("Allocated Acquisition Costs") for the added patent or patent
application shall be deemed a credit against Royalties owed to Seller (including
future Royalties).
3.2.5 Royalty
payments shall be to Seller payable quarterly. Within sixty (60) days of
the end
of each calendar quarter, Purchaser shall pay the Royalty to Seller for that
calendar quarter, and each such payment shall be accompanied by a Royalty
report
setting forth the Licensing Revenue as well as deducted Direct Expenses and
Allocated Acquisition Costs.
3.2.6 Without
limiting Partners' obligations to pay to Seller all Royalty payments and
other
amounts due under Sections 3.2.1, 3.2.8 and 3.2.10, commencing with the calendar
year 2006, Partners shall pay Seller a minimum royalty (the "Minimum
Royalty")
according to the schedule and terms set forth on Exhibit
C.
3.2.7 In
the
event that the Minimum Royalty for any calendar year is not paid in accordance
with Section 3.2.5
because
Partners has not received Licensing Revenue in an amount sufficient to cause
the
Minimum Royalty to be paid to Seller, within thirty (30) days of written
notice
thereof by Seller, Seller's sole and exclusive remedy, notwithstanding anything
to the contrary contained herein, is the assignment of the Purchased Assets
back
to Seller; provided that, any existing license of the Purchased Assets shall
continue in force, and Seller shall continue to receive Royalties from Licensing
Revenue received by Partners from such licenses.
3.2.8 In
the
event that Partners, in its sole discretion, sells any patent or patent
application in the Patent Package, Seller shall receive ****** percent
(**%) of the sales price allocated to the Patent Package.
3.2.9 Seller
shall have the right to inspect Purchaser's and Partners records to confirm
the
accuracy of Royalty payments once a year. Such inspection shall occur upon
reasonable notice and during regular business hours, shall be conducted by
an
independent auditor mutually acceptable to the parties hereto at Seller's
expense, and Purchaser and Partners shall allow the auditor to have full
access
to all reasonably necessary information. If the auditor determines that the
amount of Royalty has been under-paid, Purchaser shall immediately pay Seller
the amount of any under-paid Royalty. If the Royalty has been under-paid
by an
amount of ten percent (10%) or greater and there is not a good faith dispute
as
to the amount of Royalty due, Purchaser shall also pay Seller the cost of
the
inspection, including the cost of the independent auditor.
____________
*
Confidential Treatment Requested
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3.2.10 Should
Partners, in its sole discretion, institute an action for infringement of
the
Patent Package, Seller shall receive **** percent (**%) of any
recovery, whether that recovery is by way of judgment, award, decree or
settlement. However, all litigation expenses incurred by Partners with respect
to the Patent Package shall be deducted from any recovery before Seller's
**%
share is calculated.
3.3 Documents
to be Delivered at Closing.
The Noncompete
Agreements, the
Intellectual Property Assignment and Assumption Agreements (as defined herein),
and
any
other agreements, documents, or instruments that this Agreement contemplates
are
collectively referred to in this Agreement as the “Collateral
Agreements.”
3.3.1 At
the
Closing, Seller shall deliver to Purchaser:
(a) (i)
documents in form and substance satisfactory to counsel for Purchaser evidencing
releases of any liens, claims, pledges, security interests or other encumbrances
(collectively, the “Liens”)
on any
of the Purchased Assets, (ii) such other instruments of conveyance, assignment
and transfer, in form and substance satisfactory to Purchaser and its counsel,
as shall be effective to convey, transfer and assign to Purchaser good and
marketable title to the Purchased Assets, free of all Liens;
(b) a
copy of
the text of the resolutions adopted by the board of directors of Seller and
the
Stockholder authorizing the execution, delivery and performance of this
Agreement and the consummation of all of the transactions contemplated in
this
Agreement, duly certified by Seller’s secretary or assistant secretary to the
effect that such copies are true, correct and complete copies of such
resolutions and that such resolutions were duly adopted and have not been
amended or rescinded;
(c) a
xxxx of
sale and assignment and assumption agreement pursuant to which, as of the
Closing Date, Seller will assign to Purchaser all the Purchased Assets,
substantially in the form set forth on Exhibit
E
(“Xxxx
of Sale and Assignment and Assumption Agreement”);
(d) a
certificate of good standing of Seller from the secretary of state of the
state
where Seller is incorporated and in each other jurisdiction in which Seller
conducts business;
(e) an
incumbency certificate executed on behalf of Seller by its secretary certifying
the signature and office of each officer executing this Agreement and the
other
documents and instruments contemplated in this Agreement;
(f) a
certificate that an officer of Seller executes, dated as of the Closing Date,
certifying as to the fulfillment of the conditions set forth in Sections
9.1
and
9.2;
and
(g) a
receipt
for the Cash to Close.
____________
*
Confidential Treatment Requested
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3.3.2 At
the
Closing, Purchaser will deliver to Seller:
(a) the
Cash
to Close;
(b) the
Closing Statement;
(c) a
copy of
the text of the resolutions adopted by the board of directors of Purchaser
authorizing the execution, delivery and performance of this Agreement and
the
consummation of all of the transactions contemplated in this Agreement, duly
certified by Purchaser’s secretary or assistant secretary to the effect that
such copies are true, correct and complete copies of such resolutions and
that
such resolutions were duly adopted and have not been amended or
rescinded;
(d) an
incumbency certificate executed on behalf of Purchaser by its secretary
certifying the signature and office of each officer or representative executing
this Agreement and the other documents and instruments contemplated in this
Agreement; and
(e) a
certificate that an officer of Purchaser executes, dated as of the Closing
Date,
certifying as to the fulfillment of the conditions set forth in Sections
8.1
and
8.2;
and
(f) a
certificate of good standing of Purchaser from the secretary of state of
the
state where Purchaser is incorporated and in each other jurisdiction in which
Purchaser conducts business.
3.3.3 At
the
Closing, the parties shall deliver to each other the following:
(a) the
Noncompete Agreements; and
(b) individual
instruments of assignment or transfer by country and corporate owner, of
the
patents, trademarks and copyrights which constitute the Intellectual Property,
sufficient to convey and vest full legal and equitable title in the Intellectual
Property to the Purchaser, in recordable form, if not already registered
or
applied for in the name of the Purchaser (the “Intellectual
Property Assignment and Assumption Agreements”).
4. REPRESENTATIONS
AND WARRANTIES OF SELLER AND STOCKHOLDER.
Seller
and Stockholder, jointly and severally, represent and warrant to Purchaser
and
Partners that, except as may be set forth in particularity and in detail
on the
disclosure schedules attached to this Agreement, which shall be arranged
in
paragraphs corresponding to the numbered paragraphs in this Section 4
(the
“Disclosure
Schedules”),
the
following statements are true and correct as of this date and will be true
and
correct as of the Closing Date:
4.1 Organization;
Good Standing; Ownership. Seller
is
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware.
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4.2 No
Violation. The
execution and delivery of this Agreement, the Collateral Agreements and any
documents and agreements that Seller or Stockholder are to execute and deliver
pursuant to this Agreement to consummate the transactions contemplated hereby
do
not and will not (i) to the knowledge of Seller and Stockholder, violate
any
provision of the terms of any applicable law, rule or regulation of any
governmental body having jurisdiction, the violation of which would have
a
material adverse effect on Seller or Stockholder, (ii) conflict with or result
in a breach of any provision of Seller’s articles of incorporation or bylaws or
result in a default under any of the terms, conditions or provisions of,
or
result in the breach of, conflict with, or accelerate or permit the acceleration
of the performance required by, any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation of any nature whatsoever, whether
written or oral, to which Seller or Stockholder is a party, or (iii) to Seller’s
or Stockholder’s knowledge, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Seller, Stockholder or any of their
respective properties or assets in a manner that would have a material adverse
effect on Seller or Stockholder.
4.3 Authorization
and Validity. The
execution, delivery, and performance of this Agreement and the Collateral
Agreements by Seller have been (or prior to the Closing will be) duly and
validly authorized and approved by all necessary action on the part of Seller,
and this Agreement and the Collateral Agreements are legally binding upon
and
enforceable against Seller and Stockholder in accordance with their respective
terms, except to the extent that such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relative to or affecting
the rights and remedies of creditors generally and by general principles
of
equity (regardless of whether in equity or at law).
4.4 Marketable
Title; No Liens. Seller
has good and marketable title to the Purchased Assets, free and clear of
all
Liens, except for Liens set forth in Schedule
4.4
to be
satisfied at Closing. Purchaser shall transfer to Purchaser at Closing good
and
marketable title to the Purchased Assets, and the Purchased Assets shall
be free
from all Liens.
4.5 Solvency. Stockholder
is the sole creditor of Seller. Seller and Stockholder shall not cause Seller
to
file for bankruptcy protection within ninety days from the Closing
Date.
4.6 Litigation.
There
are
no claims, lawsuits, actions, arbitrations or other proceedings pending with
respect to this Agreement and the transactions contemplated hereby. Other
than
as set forth on Schedule
4.6,
there
are no claims, lawsuits, actions, arbitrations or other proceedings or
governmental investigations pending or, to the knowledge of Seller and
Stockholder, threatened against Seller or any of its officers, directors,
employees or affiliates involving, affecting or relating to Seller or the
Purchased Assets (collectively, the “Claims”).
The
information contained on each Claim set forth on Schedule
4.6,
includes: (i) the name of each party to the Claim; (ii) the monetary amount
being demanded by each party to the Claim; (iii) if there are demands for
something other than monetary damages, a description of the relief being
sought;
(iv) a caption name and case number for the Claim; (v) the court or
administrative agency where such Claim is pending; (vi) the status of the
Claim,
including if any settlement discussions have occurred; and (vii) if such
Claim
is covered by insurance and if so, the name of the insurance carrier, and
whether or not the insurance carrier has reserved any rights with respect
to
such Claim. There are no outstanding judgments, orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency,
or
by arbitration) against Seller or the Purchased Assets.
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4.7 Intellectual
Property. With
respect to the Intellectual Property:
4.7.1 Seller
is
the owner of the Intellectual Property free and clear of any Liens, encumbrances
or defects in title, and Seller has the right to use the same in the conduct
of
the its business and to assign such rights to Purchaser;
4.7.2 Except
for patent prosecution activities, no proceedings or actions before any court
or
tribunal (including the USPTO or equivalent authority anywhere in the world)
have been instituted, are pending or, to the knowledge of Seller or Stockholder,
threatened which challenge any rights with respect to the validity or
enforceability of the Intellectual Property, or which in any way relate to
the
Intellectual Property;
4.7.3 No
issued
patent or pending patent application has been or is now involved in any
interference, reissue, reexamination or opposition proceeding, and, to the
knowledge of Seller or Shareholder, there is no potentially interfering patent
or patent application owned by any third party;
4.7.4 To
the
knowledge of Seller or Stockholder, all patents, patent applications, registered
trademarks and service marks, and copyrights included in the Intellectual
Property are valid, enforceable and subsisting;
4.7.5 To
the
knowledge of Seller or Stockholder, there are no defects in the prosecution
of
the Intellectual Property and all duties of disclosure owed to the USPTO
(or
equivalent patent authority anywhere in the world) have been fulfilled in
the
prosecution of the Intellectual Property;
4.7.6 To
the
knowledge of Seller or Stockholder, there has been no fraud or inequitable
conduct during the prosecution of the Intellectual Property;
4.7.7 Except
as
set forth on Schedule
4.7.7,
to the
knowledge of Seller or Stockholder, there is no unauthorized use, disclosure,
infringement or misappropriation of the Intellectual Property;
4.7.8 To
the
knowledge of Seller or Stockholder, neither Seller nor the Intellectual Property
(including the practice of any claimed invention in the Intellectual Property)
is infringing upon or otherwise violating the rights of others (including,
but
not limited to, the patent rights of any other party);
4.7.9 Except
for patent prosecution activities, the validity, enforceability, scope, content
or title of any Intellectual Property has not been challenged, questioned
or
threatened by any third party, in any way (including, but not limited to,
the
patentability of any claimed invention in a patent application);
4.7.10 The
patents and patent applications identified in Exhibit
A
are
currently in compliance with all applicable legal requirements (including
payment of filing, examination and maintenance fees), and are not subject
to any
maintenance fees, taxes or actions falling due prior to within thirty (30)
days
after the Closing Date;
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4.7.11 The
Intellectual Property is not subject to any outstanding order, decree, judgment,
stipulation or charge;
4.7.12 No
licenses, sublicenses or agreements granting rights in any of the Intellectual
Property have been granted or entered into by Seller, or will be granted
or
entered into by Seller other than to Purchaser or its designee;
4.7.13 Seller
has secured valid written assignments from all consultants, employees and
others
who contributed to the creation or development of Intellectual Property of
the
rights to such contributions that Seller does not already own by operation
of
law;
4.7.14 Seller
is
not obligated to pay any royalties or make similar payments in respect of
the
Intellectual Property;
4.7.15 The
Intellectual Property is all of the intellectual property used in the system
or
method patent business of Seller, and Exhibit
A
is a
complete list of all issued patents and pending patent applications included
in
Intellectual Property; and
4.7.16 There
have been no non-confidential disclosures and no use, offer for sale or sale
of
any inventions claimed under the Intellectual Property by Seller or Stockholder
prior to the filing date thereof.
4.8 Approvals.
Schedule
4.8 lists
all
registrations, filings, applications, notices, consents, approvals, orders,
qualifications and waivers required to be made, filed, given or obtained
by
Seller or Stockholder with, to or from any person or governmental authority
in
order to consummate the transactions contemplated herein (“Approvals”).
4.9 No
Material Adverse Change.
Since
March 8, 2006, (i) there has not been any material adverse change in the
business, assets, financial condition, or results of operations of Seller,
and
(ii) Seller has operated the its business in the ordinary course of business
consistent with past practices of the business in the last three
years..
4.10
Taxes.
Seller
has duly and timely filed (taking into account any extensions granted with
respect thereto) all Tax Returns (as defined below) required to have been
filed
by, or with respect to, Seller. All such Tax Returns are true, complete and
correct. All Taxes (as defined below) required to have been paid by (or
presently claimed by any governmental authority to be due from) Seller, or
with
respect to a period covered by a Tax Return of Seller, whether or not shown
on
any Tax Return of Seller, have been paid or are shown on the balance sheet
included in the financial statements of Seller that Seller has previously
delivered to Purchaser.“Tax
Returns”
means
any return, report, information return, schedule, certificate, statement
or
other document filed or required to be filed with a governmental authority
in
connection with any Tax. “Tax”
means:
(i) any income, alternative or add-on minimum tax, gross income, gross receipts,
franchise, profits, including estimated taxes relating to any of the foregoing,
or other similar tax or other like assessment or charge of similar kind
whatsoever, together with any interest and any penalty, or additional amount
imposed by any governmental authority responsible for the imposition of any
such
Tax (domestic or foreign); or (ii) any sales, use, ad valorem, business license,
withholding, payroll, employment, excise, stamp, transfer, recording,
occupation, premium, property, unclaimed property, value added, custom duty,
severance, windfall profit or license tax, governmental fee or other similar
assessment or charge, together with any interest and any penalty, or additional
amount imposed by any governmental authority responsible for the imposition
of
any such tax (domestic or foreign).
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4.11
Disclosure.
All
information, schedules, documents and other materials delivered to the Purchaser
by or on behalf of the Seller are true, correct and complete in all material
respects. Seller has provided Purchaser with all material information it
possesses, whether in written or non-written form, related to the Purchased
Assets. Seller does not have knowledge of any fact that has specific application
to Seller or the Purchased Assets (other than general economic or industry
conditions) and that may materially adversely affect the Purchased Assets
that
has not been otherwise set forth in this Agreement. Seller
has not knowingly provided access to any non-public information associated
with
the Purchased Assets to any third party other than its authorized
representatives.
4.12
Seller’s
and Stockholder’s representations and warranties contained in this Agreement
will survive the Closing Date for a period of two (2)
years; provided that the representations and warranties contained in Sections
4.7,
and
4.10
will
survive the Closing for a period equal to the relevant statute of limitations
plus sixty days. Seller’s covenants will survive indefinitely unless otherwise
stated in the individual covenant. The limitations on the survival of
representations and warranties in this Agreement shall not limit any rights,
causes of action or other claims Purchaser may have against Seller under
common
law, equity, statute or regulation.
4.13
For
purposes of all of the Representations and Warranties made by the Seller
or
Stockholder herein, any reference to the word(s) “knowledge” or “to the best of
Seller’s or Stockholder’s knowledge” shall refer to the actual knowledge of Xxxx
Xxxxx, Xxx Xxxxx and Xxxxxxx Xxxxx, upon reasonable investigation or inquiry,
as
of the date of this Agreement
5. REPRESENTATIONS
AND WARRANTIES OF PURCHASER.
5.1 Good
Standing and Organization. Purchaser
is duly organized, validly existing and in good standing under the laws of
the
State of Ohio.
5.2 Authority
and Validity. The
execution, delivery, and performance of this Agreement and the Collateral
Agreements by Purchaser have been (or prior to the Closing will be) duly
and
validly authorized and approved by all necessary action on the part of
Purchaser, and this Agreement and the Collateral Agreements are legally binding
upon and enforceable against Purchaser in accordance with their terms, except
to
the extent that such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relative to or affecting the rights
and
remedies of creditors generally and by general principles of equity (regardless
of whether in equity or at law).
5.3 No
Violation. The
execution and delivery of this Agreement and the documents and agreements
to be
executed and delivered pursuant to this Agreement to consummate the transactions
contemplated hereby do not and will not (i) to the knowledge of Purchaser,
violate any provision of the terms of any applicable law, rule or regulation
of
any governmental body having jurisdiction, (ii) result in a default under
any of
the terms, conditions or provisions of, or result in the breach of, or
accelerate or permit the acceleration of the performance required by, any
note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
of any nature whatsoever to which Purchaser is a party, or (iii) violate
any
order, writ, injunction, decree, statute, rule or regulation applicable to
Purchaser or any of its property or assets, and are enforceable in accordance
with their terms.
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5.4 Litigation.
There
are
no claims, lawsuits actions, arbitrations or other proceedings pending or,
to
the knowledge of Purchaser, threatened by or against Purchaser with respect
to
this Agreement, or which would materially affect the consummation of the
transactions contemplated hereunder or any of the representations and warranties
contained herein.
Purchaser’s
representations and warranties contained in this Agreement will survive the
Closing Date for a period of two (2)
years. The limitations on the survival of representations and warranties
in this
Agreement shall not limit any rights, causes of action or other claims Seller
may have against Purchaser under common law, equity, statute or regulation.
Purchaser’s covenants will survive indefinitely unless otherwise stated in the
individual covenant.
6. CERTAIN
PRE-CLOSING COVENANTS.
From
the
Effective Date through the Closing Date:
6.1 Access.
Seller
shall permit Purchaser and its representatives to have full access to Seller’s
auditors and legal counsel and to all books and records of Seller at reasonable
hours. Seller shall furnish Purchaser with such financial and operating data
and
other information with respect to any of the Purchased Assets as Purchaser
may
from time to time request.
6.2 Corporate
Existence. Seller
shall maintain its corporate existence and powers, shall not make any change
in
its articles of incorporation or bylaws and shall not dissolve or
liquidate.
6.3 No
Disposal of Purchased Assets. Except
pursuant to the terms of any contract executed on or before the Effective
Date
and made known to Purchaser, or upon the direction of Purchaser, Seller shall
not dispose of any of the Purchased Assets or enter into or assume any
obligation with respect thereto, or modify or amend in any material respect,
or
terminate, any of the Intellectual Property or any contract, agreement, lease,
license or commitment which is part of the Purchased Assets. Seller shall
not
subject any of the Purchased Assets to any Liens, or suffer any Liens to
exist.
6.4 No
Breach. Neither
Seller nor Stockholder shall knowingly do any act or omit to do any act that
will cause a breach of any contract, agreement, obligation, lease, license
or
commitment included in the Purchased Assets.
6.5 Notice
of Certain Events. Seller
and Stockholder shall promptly notify Purchaser in writing of any threatened
lawsuit, or claim against Seller or Stockholder relating to the business
of
Seller, or any adverse change or any projected or threatened adverse change
to
Seller or the Purchased Assets.
6.6 Obtaining
Consents. Seller
shall obtain any and all necessary consents and Approvals of creditors, whether
secured or unsecured, or other third parties with respect to the transactions
contemplated by this Agreement.
10
6.7 Representations
and Warranties. Seller,
Stockholder and Purchaser shall not take any action which would cause any
of the
representations or warranties made in this Agreement not to be true and correct
in all respects on and as of the Closing Date with the same force and effect
as
if such representation or warranty had been made on and as of the Closing
Date,
except for changes in any such representation or warranty approved in writing
by
Purchaser or Seller (as the case may be). The parties shall not agree to
take
any actions prohibited by this Section 6.7.
6.8 Public
Statements. Seller,
Stockholder and Purchaser hereby agree to make the public statement or press
release set forth on Exhibit
F
at
Closing and no other public statement or release with respect to this Agreement
and the transactions contemplated hereby shall be made by either Seller or
Purchaser before or after the Closing Date without the prior written consent
of
such other party.
7. COVENANTS
WHICH INCLUDE POST CLOSING ACTIONS.
7.1 Taxes.
From
and
after the Effective Date, except for Taxes contested in good faith and by
appropriate proceedings diligently conducted, Seller shall pay all Taxes
levied
against Seller or Stockholder or upon their properties, the Purchased Assets
or
the business of Seller, relating to events or time periods prior to the Closing
Date, as they become due, and shall timely file all returns relating to such
Taxes.
7.2 Access
to Books and Records. Following
the Closing, Seller and Purchaser shall allow each other access to available
books and records of the other related to the Purchased Assets as either
shall
reasonably request.
7.3 Disclosure.
Except
as
required by law, neither Seller, Stockholder nor Purchaser will, without
the
prior consent of the other parties, disclose any of the terms of this Agreement
other than as set forth on Exhibit
F
to any
third party, other than a party’s accountants, attorneys and
advisors. Notwithstanding
the foregoing, either party may file any documents it is legally required
to
file with the Securities and Exchange Commission upon timely notice to and
consultation with the other party, it being understood that it is the intent
of
the parties to limit the disclosure of confidential information to the extent
legally possible.
7.4 No
Solicitation. Seller
and Stockholder agree that neither they, nor any of their affiliates, nor
any of
their respective directors, executive officers, agents or representatives
will,
directly or indirectly, (i) solicit, initiate or encourage (including by
way of
furnishing information) any inquiries or the making of any proposal with
respect
to any merger, consolidation or other business combination involving Seller
or
the acquisition of all or any significant part of the assets or capital stock
(including, but not limited to, a control position voting interest) of Seller
(an “Acquisition
Transaction”),
(ii)
negotiate or otherwise engage in discussions with any person or entity with
respect to any Acquisition Transaction, or that may reasonably be expected
to
lead to a proposal for an Acquisition Transaction, or (iii) enter into any
agreement, arrangement or understanding (including any letter of intent,
agreement in principle or similar agreement) with respect to any such
Acquisition Transaction, in the case of each clauses (i), (ii) and (iii)
other
than in connection with the transactions with Purchaser contemplated by this
Agreement.
Seller
and Stockholder agree to promptly advise Purchaser of any inquiries or proposals
received by, any information requested from, or any negotiations or discussions
sought to be initiated or continued with, Seller, Stockholder, their affiliates,
or any of their respective directors, executive officers, agents or
representatives, in each case from a person or entity (other than Purchaser)
with respect to an Acquisition Transaction.
11
7.5 Maintenance
of Patents.
Purchaser agrees to prosecute and maintain all Intellectual Property in
accordance with all applicable laws, rules and regulations; provided that,
Purchaser shall in no event be obligated to continue prosecution of any
application contained in the Intellectual Property if Purchaser determines,
in
its reasonable judgment, that such prosecution efforts are unlikely to result
in
meaningful patent protection.
7.6 Reversion
upon Liquidation. Upon
the
liquidation or dissolution of Purchaser or its assignee, the Purchased Assets
shall be assigned back to Seller; provided that, any existing license of
the
Purchased Assets shall continue in force, and Seller shall continue to receive
Royalties.
8. CONDITIONS
TO SELLER’S AND STOCKHOLDER’S OBLIGATION TO CLOSE.
The
obligation of Seller and Stockholder to consummate this Agreement and the
Collateral Agreements is subject to the satisfaction of the following
conditions, unless waived by Seller and Stockholder:
8.1 Accuracy
of Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement shall
be
true and correct except where the failure to be true and correct would not
cause
a material adverse change on Purchaser taken as a whole (it being understood
that, notwithstanding anything to the contrary contained in this Agreement,
for
the sole purpose of determining whether there has been a material adverse
change
as a result of any inaccuracy of a representation or warranty of Purchaser,
such
representation or warranty shall be read as if it were not qualified by
“material” or “material adverse change” or other words of similar import), in
each case on the date hereof and on the Closing Date (unless the representations
and warranties address matters as of a particular date, in which case they
shall
remain true and correct in all respects as of such date).
8.2 Performance
of Obligations. Purchaser
shall have performed each obligation required to be performed by it under
this
Agreement prior to the Closing Date in all material respects.
8.3 Deliverables.
Seller
shall have received from Purchaser those items set forth in Sections
3.3.2
and
3.3.3.
8.4 No
Proceedings. No
action
or proceeding against Purchaser, Seller or Stockholder shall have been
instituted or, to knowledge of the parties, threatened that, if successful,
could prohibit consummation or require substantial rescission of the
transactions contemplated by this Agreement and the Collateral
Agreements.
8.5 Contemporaneous
Closing. The
closing of the transactions contemplated by that certain Asset Purchase
Agreement, of even date herewith, by and between Seller and NOVUS Displays,
LLC
shall have occurred.
12
9. CONDITIONS
TO PURCHASER’S OBLIGATION TO CLOSE.
The
obligation of Purchaser to consummate this Agreement and the Collateral
Agreements is subject to the satisfaction of the following conditions, on
or
before the Closing Date unless waived by Purchaser:
9.1 Accuracy
of Representations and Warranties. The
representations and warranties of Seller and Stockholder contained in this
Agreement shall be true and correct except where the failure to be true and
correct would not cause a material adverse change on Seller taken as a whole
(it
being understood that, notwithstanding anything to the contrary contained
in
this Agreement, for the sole purpose of determining whether there has been
a
material adverse change as a result of any inaccuracy of a representation
or
warranty of Seller or Stockholder, such representation or warranty shall
be read
as if it were not qualified by “material” or “material adverse change” or other
words of similar import), in each case on the date hereof and on the Closing
Date (unless the representations and warranties address matters as of a
particular date, in which case they shall remain true and correct in all
respects as of such date).
9.2 Performance
of Obligations. Seller
and Stockholder shall have performed each obligation required to be performed
by
it under this Agreement prior to the Closing Date in all material
respects.
9.3 Deliverables.
Purchaser
shall have received from Seller and Stockholder those items set forth in
Sections 3.3.1
and
3.3.3.
9.4 No
Proceedings. No
action
or proceeding against Purchaser, Seller or Stockholder shall have been
instituted or, to the knowledge of the parties, threatened that, if successful,
could prohibit consummation or require substantial rescission of the
transactions contemplated by this Agreement and the Collateral
Agreements.
9.5 Release
of Liens. Seller
shall have obtained a release of any and all security interests and Liens
affecting the Purchased Assets and shall have delivered transfer documents
satisfactory in form and substance to counsel for Purchaser assigning and
conveying all such assets free and clear of any and all mortgages, Liens,
pledges, charges, adverse claims or encumbrances of any nature
whatsoever.
9.6 No
Material Adverse Change. There
shall not have occurred any material adverse change in the business, operations,
result of operations, projected contract revenue or financial condition of
Seller.
9.7 Approvals.
Seller
shall have obtained all consents and Approvals necessary to effectuate the
transactions contemplated by this Agreement and the Collateral
Agreements.
9.8 Due
Diligence. Purchaser
shall be satisfied in its reasonable discretion with the results of its due
diligence investigation of the Purchased Assets.
13
9.9 Consent
by NOVUS Partners LLC. Partners
shall have consented in writing to the transactions contemplated by this
Agreement.
9.10
Contemporaneous
Closing. The
closing of the transactions contemplated by that certain Asset Purchase
Agreement, of even date herewith, by and between Seller and NOVUS Displays,
LLC
shall have occurred.
10. TERMINATION.
10.1
Right
To Terminate. This
Agreement may be terminated and the transactions contemplated hereby may
be
abandoned at any time prior to the Closing Date:
10.1.1 Mutual
Consent.
By
mutual written consent of Purchaser and Seller;
10.1.2 By
Purchaser.
By
Purchaser, if any of the conditions set forth in Section 9
shall
have become incapable of fulfillment (other than as a result of a breach
of this
Agreement by Purchaser);
10.1.3 By
Seller.
By
Seller, if any of the conditions set forth in Section 8
shall
have become incapable of fulfillment (other than as a result of a breach
of this
Agreement by any of the Seller or Stockholder);
10.1.4 Termination
Date.
By
either Purchaser or the Seller, if the transactions contemplated hereby are
not
consummated on or before July 16; provided that, any such termination shall
not
in any way prejudice Purchaser’s or Seller’s rights to seek specific performance
or other injunctive relief after such termination;
10.1.5 Breach
of Covenant.
By
either Purchaser or Seller, if the other party (or Stockholder, in case of
a
termination by Purchaser) shall be in material breach of any of its covenants
contained in this Agreement and such breach either is incapable of cure or
is
not cured within 30 days after notice from the party wishing to terminate;
provided, that the party seeking such termination (or Stockholder in the
case of
Seller) shall not also then be in material breach of this Agreement; and,
provided, further, that any material breach of the provisions of Section
7.4
shall
entitle Purchaser to an immediate right to termination without any notice
or
cure requirement;
10.1.6 Breach
of Representations and Warranties.
By
either Purchaser or Seller, if the other party (or Stockholder in the case
of
termination by Purchaser) shall be in breach of any of its representations
or
warranties contained in this Agreement, which breach, individually or together
with all other breaches, is reasonably expected to have a material adverse
change on such party, and such breach either is incapable of cure or is not
cured within 30 days after notice from the party wishing to terminate; provided,
that the party seeking such termination (or Stockholder in the case of Seller)
shall not also then be in material breach of this Agreement; or
10.1.7 Order
or Action by Governmental Entity.
By
either Purchaser or Seller, if a governmental entity shall have issued a
non-appealable final order or shall have taken any other action having the
effect of permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby.
14
10.2 Manner
and Effect of Termination. Termination
shall be effected by the giving of written notice to that effect by the party
seeking termination. If this Agreement is validly terminated and the
transactions contemplated hereby are not consummated, then this Agreement
shall
become null and void and of no further force and effect and no party shall
be
obligated to any other party hereunder; provided, however, that termination
shall not affect (a) the rights and remedies available to a party as a result
of
the breach by the other party or parties hereunder or (b) the provisions
of
Sections 6.8,
7.3,
18
and
19.11,
any
provisions concerning indemnification for broker’s or similar fees, or this
Section 10.2.
11. INDEMNIFICATION.
11.1 Seller
Indemnification. Seller
and Stockholder, jointly and severally, agree to indemnify, defend, release,
and
hold Purchaser and Partners and their affiliates, subsidiaries or related
companies, member and their directors, officers and employees harmless from
and
against any and all damages, losses, penalties, interest obligations,
liabilities (including tax liabilities), claims, judgments, causes of action,
deficiencies, costs, clean up costs, and expenses (including reasonable
attorneys’ fees and other costs) (“Damages”)
asserted against, incurred or required to be paid by Purchaser or Partners
on
account of or incident or pursuant to: (i) breach of any representation or
warranty made by Seller or Stockholder in this Agreement, the Collateral
Agreements or in any document delivered by Seller or Stockholder pursuant
to or
in connection with this Agreement; (ii) breach of any covenant or obligation
made by Seller or Stockholder in this Agreement, the Collateral Agreements
or
any document delivered by Seller or Stockholder pursuant to or in connection
with this Agreement; (iii) the business or operations of Seller or any conduct
or failure to act of Seller (or any of its employees or agents) before, at
or
after the Closing including any tax liability resulting therefrom; (iv) the
unauthorized disclosure of any terms of this Agreement or the transaction
contemplated hereby; and (v) any broker’s or finders fees due and payable to any
third party arising out of this Agreement or the transactions contemplated
hereby where such party claims that it entered into an agreement with Seller
or
Stockholder.
11.2 Purchaser
Indemnification. Purchaser
agrees to indemnify, defend, release, and hold Stockholder and Seller and
their
directors, officers and employees, as applicable, harmless from and against
any
and all Damages asserted against, incurred or required to be paid by Stockholder
or Seller on account of or incident to: (i) the breach of any representation
or
warranty made by Purchaser in this Agreement, the Collateral Agreements or
in
any document delivered pursuant to or in connection with this Agreement;
(ii)
the breach of any covenant or obligation made by Purchaser in this Agreement,
the Collateral Agreements or in any document delivered pursuant to or in
connection with this Agreement; (iii) the business or operations of Purchaser
before, at or after the date of this Agreement; (iv) the unauthorized disclosure
of any terms of this Agreement or the transaction contemplated hereby; and
(v)
any broker’s or finders fees due and payable to any third party arising out of
this Agreement or the transactions contemplated hereby where such party claims
that it entered into an agreement with Purchaser.
15
12. INDEMNIFICATION
PROCEDURE.
12.1 With
respect to any matter for which indemnification is claimed by Purchaser or
Partners, Purchaser and/or Partners will promptly notify Seller and Stockholder
in writing after Purchaser and/or Partners becomes aware of it, and Seller
and
Stockholder will promptly and diligently defend, contest, settle, compromise,
or
otherwise protect against any such suit, action, investigation, claim or
proceeding at their own cost and expense; provided, however, that Seller
and
Stockholder shall not, without the prior written consent of Purchaser and/or
Partners and, consent to an entry of judgment or enter into any settlement
(i)
which does not include an unconditional release of Purchaser and/or Partners
from all liability, or (ii) which requires action on the part of Purchaser
and/or Partners or otherwise subjects Purchaser and/or Partners to any
obligation or restriction to which it would not otherwise be subject. Any
delay
or failure to so notify Seller or Stockholder will only relieve Seller or
Stockholder of their obligations hereunder to the extent, if at all, that
they
or the proceedings are prejudiced by reason of such delay or failure. Purchaser
and/or Partners will have the right, but not the obligation, to participate,
at
its own expense, in the defense by counsel of its own choosing; however,
Seller
and/or Stockholder will be entitled to control the defense unless Purchaser
and/or Partners has relieved Seller or Stockholder in writing from liability
with respect to the particular matter. If Seller and Stockholder request
that
Purchaser and/or Partners participate in the defense and if Purchaser and/or
Partners so elects, at Purchaser’s and/or Partners' option, Seller and
Stockholder will reimburse Purchaser and/or Partners for its expenses and
the
cost of providing assistance at the request of Seller or Stockholder, including,
without limitation, reasonable attorneys’ fees and investigation expenses. If
Seller and Stockholder do not timely defend, contest or otherwise protect
against any suit, action, investigation, claim or proceeding after receipt
of
the required notice from Purchaser and/or Partners, Purchaser and/or Partners
will have the right, but not the obligation, to defend, contest or otherwise
protect against the same, make any compromise or settlement thereof, and
recover
all Damages as a result of such suit, action, investigation, claim, proceeding,
compromise, or settlement.
13. With
respect to any matter for which indemnification is claimed by Seller or
Stockholder, Seller or Stockholder will promptly notify Purchaser in writing
after Seller or Stockholder becomes aware of it, and Purchaser will promptly
and
diligently defend, contest, settle, compromise, or otherwise protect against
any
such suit, action, investigation, claim or proceeding at its own cost and
expense; provided, however, that Purchaser shall not, without the prior written
consent of Seller and Stockholder, consent to an entry of judgment or enter
into
any settlement (i) which does not include an unconditional release of Seller
and
Stockholder from all liability, or (ii) which requires action on the part
of
Seller and Stockholder or otherwise subjects Seller and Stockholder to any
obligation or restriction to which it would not otherwise be subject. Any
delay
or failure to so notify Purchaser will only relieve Purchaser of its obligations
hereunder to the extent, if at all, that it is prejudiced by reason of such
delay or failure. Seller or Stockholder will have the right, but not the
obligation, to participate, at their own expense, in the defense by counsel
of
their own choosing; however, Purchaser will be entitled to control the defense
unless Seller or Stockholder have relieved Purchaser in writing from liability
with respect to the particular matter. If Purchaser requests that Seller
or
Stockholder participate in the defense and if Seller or Stockholder so elect,
at
Seller’s or Stockholder’s option, Purchaser will reimburse Seller or Stockholder
for their expenses and the cost of providing assistance at the request of
Purchaser, including, without limitation, reasonable attorneys’ fees and
investigation expenses. If Purchaser does not timely defend, contest or
otherwise protect against any suit, action, investigation, claim or proceeding
after receipt of the required notice from Seller or Stockholder, Seller or
Stockholder will have the right, but not the obligation, to defend, contest
or
otherwise protect against the same, make any compromise or settlement thereof,
and recover all Damages from Purchaser as a result of such suit, action,
investigation, claim, proceeding, compromise, or settlement.
16
14. RIGHT
OF SET OFF.
14.1 Purchaser
and/or Partners may, at its sole option, withhold and set off, against any
and
all amounts payable under this Agreement or the Collateral Agreements, any
amounts for which Purchaser and or Partners is due pursuant to this Agreement
or
the Collateral Agreements; provided, however, (i) that Purchaser and Partners
shall not withhold or set off any such amounts if Purchaser or Partners elects
to seek any other remedy available to Purchaser and/or Partners, at law or
in
equity and (ii) the Purchaser and/or Partners may only exercise such right
of
offset in respect of claims relating to Damages actually incurred by it or
them
(in which case the amount of such offset shall be the amount of such actual
Damages) or claims actually asserted by a third party (in which case the
amount
of the offset shall not exceed the Purchaser’s and/or Partner's good faith
estimate of the amount of indemnifiable Damages that will ultimately be payable
to the Purchaser and/or Partners in respect of such claims). If any such
claims
for indemnity are resolved in favor of the Seller by mutual agreement or
otherwise, or if the amount withheld exceeds the amount ultimately payable
to
the Purchaser and/or Partners in respect of such claim, the Purchaser and/or
Partners shall pay to the Seller the excess amount withheld with respect
to such
claim, together with interest thereon for the period such amount has been
withheld at a rate equal to the published "prime rate" of interest for money
center banks as published in The
Wall Street Journal
(Eastern edition), in effect from time to time during the relevant
period.
14.2 In
no
event shall the Seller’s indemnity obligations under Section
11
exceed
an amount equal to sum of the Initial Consideration and the Royalties actually
paid to Seller pursuant to Section 3.2
hereof.
15. TAXES.
To
the
extent an obligation to pay any tax on the Purchased Assets arises under
applicable law, Seller agrees to pay any taxes duly imposed on the sale of
the
Purchased Assets.
16. DISCLAIMER
OF LIABILITIES.
With
respect to the Purchased Assets up to and as of the Effective Date, Purchaser
does not assume and will not be responsible for any debts, obligations or
liabilities of Seller, accrued or unaccrued, fixed or contingent regardless
of
the character thereof and regardless of when asserted, including without
limitation: (i) any employee liabilities for unemployment compensation or
premiums, workers’ compensation claims or premiums; (ii) property or casualty
insurance premiums; (iii) accrued employee vacations, unfunded or under funded
employee benefit plans, whether multi employer or otherwise; (iv) any liability
of Seller arising from indebtedness for borrowed money or long-term debt
of
Seller; (v) any liability arising from, or in connection with the conduct
of
Seller’s business or the ownership of the Purchased Assets by Seller on or prior
to the Closing Date; (vi) any liability of Seller for Taxes owed to any taxing
authority; (vii) any liability or obligation of Seller under any contract
or
commitment; (viii) any accounts payable; (ix) any liability arising out of
the
employment or termination of employment of any person employed by Seller;
or (x)
any other liability of any nature (collectively, the “Retained
Liabilities”),
it
being understood that all of the Retained Liabilities shall remain the sole
responsibility of and shall be retained, paid, performed and/or discharged
solely by Seller.
17
17. TAX
ALLOCATION OF INITIAL CONSIDERATION.
For
purposes of each party’s reporting of the transactions contemplated by this
Agreement to the United States Department of Internal Revenue Service, prior
to
the Closing, the parties shall agree as to a schedule allocating the Initial
Consideration amongst the Purchased Assets which shall be set forth on
Exhibit
G
adjusted
for additions and deletions of the Purchased Assets between the Effective
Date
of this Agreement and the Closing.
18. ASSIGNMENT
BY PURCHASER.
Notwithstanding
anything else to the contrary set forth herein, Purchaser is obligated to
assign
this Agreement and the Collateral Agreements and all of its rights and
obligations herein and thereto to Partners on the Closing Date. Upon such
assignment and Partners’ assumption of all obligations of Purchaser herein,
Purchaser shall be fully released from all of its obligations hereunder.
The
failure to complete such assignment in accordance herewith shall render the
transactions contemplated by this Agreement and the Collateral Agreements
null
and
void ab initio. The
parties hereby agree to cooperate with one another and take whatever action
may
be necessary to unwind the transactions contemplated by this Agreement in
the
event the foregoing assignment is not completed.
19. MISCELLANEOUS.
19.1 Headings.
The
headings in this Agreement are for convenience of reference only and do not
limit or otherwise affect any of the terms or provisions of this Agreement.
19.2 Governing
Law.
The laws
of the State of Ohio govern all matters arising out of this Agreement and
the
rights and obligations of the parties under this Agreement without consideration
of Ohio’s conflicts of laws principles.
19.3 Severability.
If any
provision of this Agreement is held to be illegal, invalid or unenforceable,
that provision will be fully severable, and this Agreement will be construed
and
enforced as if the illegal, invalid or unenforceable provision never comprised
a
part of this Agreement; and the remaining provisions of this Agreement will
remain in full force and effect. Furthermore, in lieu of the illegal, invalid
or
unenforceable provision, there will be added automatically as part of this
Agreement a provision as similar in its terms to the illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
19.4 Entire
Agreement.
This
Agreement and all documents and agreements referred to in this Agreement
supersede all prior or contemporaneous understandings, agreements, negotiations
and discussions, whether oral or written, between the parties concerning
this
subject matter and constitute the entire agreement between the parties with
regard to this subject matter; provided that the Mutual Non-Disclosure Agreement
executed by the parties on or about February 22, 2006, as the same has been
amended by that certain Summary of Principal Terms, shall survive the execution
of this Agreement and continue to bind the parties. The parties have not
relied
upon any promises, representations, warranties, agreements, covenants or
undertakings, other than those expressly set forth in this
Agreement.
18
19.5 Waiver.
Waiver
of the benefit of any provision of this Agreement must be in writing and
signed
by the party against whom enforcement is sought to be effective. The waiver
by
any party of a breach of any provision of this Agreement will not operate
or be
construed as a waiver of any subsequent breach. No action taken pursuant
to this
Agreement will be deemed to constitute a waiver by that party of compliance
by
the other party with any of the covenants or other obligations contained
in this
Agreement. A failure by a party to insist upon strict compliance with any
term
of this Agreement, enforce any right or seek any remedy upon any breach of
any
other party will not affect, or constitute a waiver of, that party's right
to
insist upon strict compliance, enforce that right or seek that remedy with
respect to that default or any prior, contemporaneous or subsequent
default.
19.6 Binding
on Successors.
This
Agreement applies to and binds the successors and permitted assigns of the
parties.
19.7 Amendments.
No
amendment of this Agreement is valid unless in writing and the party against
whom enforcement is sought signs it.
19.8 Notices.
The
parties shall give any notice or other communication required or permitted
in
this Agreement in writing and shall deliver any notice by personal delivery,
overnight delivery service, certified mail, return receipt requested, postage
prepaid, regular U.S. mail, postage prepaid or facsimile transmission. A
notice
is deemed given upon delivery of the notice in person, on the day after the
notice is deposited with an overnight delivery service, two days after the
notice is deposited with the United States Postal Service certified mail,
return
receipt requested, postage prepaid, two days after the notice is deposited
with
the United States Postal Service regular U.S. mail, postage prepaid, or
immediately when sent by facsimile transmission, and addressed or faxed as
follows:
|
If
to Seller or Stockholder:
|
Electronic
Billboard Technology, Inc.
|
|
c/o
Nano-Proprietary, Inc.
|
|
|
0000
Xxxxxxxx Xxxxxxxxx
|
|
|
Xxxxx
000
|
|
|
Xxxxxx,
Xxxxx 00000
|
|
|
Attn:
Xxxxxxx Xxxxx
|
|
|
With
a copy to:
|
Xxxxxx
Xxxx Xxxxxxx Xxxxxxx
|
|
0000
X Xxxxxx, XX
|
|
|
Xxxxx
000
|
|
|
Xxxxxxxxxx,
XX 00000
|
|
|
Attn:
Xxxxx Xxxxx, Esq.
|
19
|
If
to Purchaser:
|
NOVUS
Communication Technologies, Inc.
|
|
0000
Xxxx Xxxxxx Xxxxx
|
|
|
Xxxxx
000
|
|
|
Xxxxxxxxxx,
XX 00000
|
|
|
Attn:
Xxxxx Xxxxxxx
|
|
|
with
a copy to:
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Xxxxxxxx
& Shohl LLP
|
|
1900
Chemed Center
|
|
|
000
X. Xxxxx Xxxxxx
|
|
|
Xxxxxxxxxx,
Xxxx 00000
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|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
From
time
to time, either party may designate another address for all purposes of this
Agreement if it gives to the other party not less than three days advance
notice
of the change of address in accordance with the provisions of this Agreement.
The failure or refusal of a party to accept receipt of a notice or other
communication under this Agreement shall not invalidate the notice.
19.9 Presumption. This
Agreement or any section of this Agreement will not be construed against
any
party due to the fact that the party drafted this Agreement or any section
of
this Agreement.
19.10
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will
be
deemed to be an original but all of which together will constitute one and
the
same instrument. Execution of this Agreement via facsimile will be effective,
and signatures received via facsimile will be binding upon the parties and
effective as originals. The parties expressly acknowledge that, notwithstanding
any statutory or decisional law to the contrary, the printed product of a
facsimile transmittal will be deemed to be “written” and a “writing” for all
purposes of this Agreement.
19.11
Third
Party Beneficiaries. Except
as
otherwise set forth herein, the terms and provisions of this Agreement are
intended solely for the benefit of each party to this Agreement and their
respective successors or permitted assigns, and it is not the intention of
the
parties to confer third party beneficiary rights, and this Agreement does
not
confer any such rights, upon any other person or entity.
19.12
Expenses.
Seller,
Stockholder and Purchaser shall each pay their own expenses incidental to
this
Agreement, including, without limitation, fees and expenses of their respective
agents, representatives, counsel, accountants, and other experts.
19.13
Attorneys’
Fees. If
any
party resorts to legal action to enforce any of its rights under this Agreement,
the prevailing party will be entitled to recover its costs and expenses
associated with such legal action, including, but not limited to court costs
and
reasonable attorneys’ fees at trial or appeal.
19.14
Further
Assurances.
Before
and after the Closing, either party shall promptly execute and deliver to
the
other party (upon the other party's written request) such other instruments
or
documents as the other party reasonably deems necessary or appropriate to
carry
out and effect the purpose and intent of this Agreement.
[Signature
Page To Follow]
20
IN
WITNESS WHEREOF, this Agreement has been executed by or on behalf of each
of the
parties as of the Effective Date.
|
SELLER:
|
PURCHASER:
|
|
ELECTRONIC
BILLBOARD TECHNOLOGY, INC.
|
NOVUS
COMMUNICATION
|
|
TECHNOLOGIES,
INC.
|
|
|
By:
/s/ Xxxxxxx X. Xxxxx
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By:
/s/ Xxxxx Xxxxxxx
|
|
Title:
Vice President and Corporate Secretary
|
Title:
Chief Executive Officer
|
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STOCKHOLDER:
|
|
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NANO-PROPRIETARY,
INC.
|
|
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By:
/s/ Xxxxxxx X. Xxxxx
|
|
|
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21
LIST
OF EXHIBITS
|
Exhibit
A
|
Intellectual
Property
|
|
Exhibit
B
|
Form
of Noncompete Agreement
|
|
Exhibit
C
|
Royalty
Terms
|
|
Exhibit
D
|
Patent
Package
|
|
Exhibit
E
|
Xxxx
of Sale and Assignment and Assumption Agreement
|
|
Exhibit
F
|
Press
Release
|
|
Exhibit
G
|
Tax
Allocation of Initial Consideration
|
22
