ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made as of this 5th day
of August, 2008 by and between AVEROX, a private limited company organized under
the laws of Pakistan, ("Party I"), a subsidiary of AVEROX Inc., a Nevada, USA
corporation and sole shareholder of Party I (OTCBB:AVOX) ("Averox") and Provisus
LTD, a company incorporated under the laws of the United Kingdom (the "UK")
("Party II") and the shareholders of Party II that are a party hereto (the
"Party II Shareholders").
WITNESSETH:
WHEREAS, Party II owns the assets listed in Schedule I attached hereto
(collectively, the "Party I Acquired Assets"); and Party I owns the assets
listed in Schedule II attached hereto (collectively, the "Party II Acquired
Assets");
WHEREAS, Party I desires to purchase and otherwise acquire from Party II,
and also desires to sell, transfer and convey the Party I Acquired Assets to
Party II, and Party II desires to sell, transfer and convey the Party II
Acquired Assets to Party I, and also desires to purchase and otherwise acquire
from Party I pursuant to the terms and conditions hereof.
NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged herein, the parties agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the terms and subject to the conditions of this Agreement, Party
II agrees to sell, transfer, convey and assign to Party I and Party
I agrees to purchase, except as stated specifically herein, all of
the Party I Acquired Assets.
(b) On the terms and subject to the conditions of this Agreement and
subject to Section 9 hereof, Party I agrees to sell, transfer,
convey and assign to Party II and Party II agrees to purchase,
except as stated specifically herein, all of the Party II Assets.
2. PURCHASE PRICE; PAYMENTS.
(a) Purchase Price.
Party I shall pay to Party II, a royalty equal to twenty percent
(20%) of the total revenue generated from Provisus Software sales
and services included as part of the Party I Assets; provided
however, on the first five (5) million US dollars of total revenue
generated from Provisus Software sales and services, there will be
no royalty paid to Party II.
In addition to the twenty percent (20%) royalty, Party I shall pay
one (1) million US dollars to Party II on the first anniversary of
the date of this Agreement, provided that if cash is not available,
Party I shall deliver to Party II or its designee shares of Party
I's common stock (the "Shares") having a market value on the first
anniversary equal to five (5) million US dollars.
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3. ASSUMPTIONS OF LIABILITIES.
Except as expressly provided herein, Party II will retain and Party
I will not assume any liabilities or obligations of Party II of any
nature whatsoever, whether imposed by operation of law or otherwise,
including without limitation, (i)any expenses, liabilities or
obligations of Party II arising out of or in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby (nor may Party II pay any of such
expenses, or discharge any of such liabilities or obligations,
related to the Party I Acquired Assets); or (ii) any environmental
liability and any liabilities or obligations of Party II relating to
federal, state or local income or franchise taxes, or sales, use or
gross receipts taxes, or tax withholding obligations attributable to
Party II ownership of the Party I Acquired Assets, the transactions
contemplated hereby or the conduct of Party II's business prior to
the Closing Date. Averox has performed full due diligence of the
software IPR and is fully aware of the Provisus software mentioned
in Schedule I.
4. THE CLOSING.
The closing of the sale and purchase of the assets (the "Closing")
shall be effective as of 12:01 a.m. Islamabad, Pakistan time on
August 5, 2008 (the "Closing Date").
5. DELIVERIES AT THE CLOSING.
(a) On the Closing Date, Party II will deliver or cause to be
delivered to Party I the following:
i. all such other conveyances, assignments,
consents, bills of sale and other documents or
instruments of transfer, in form and substance
reasonably satisfactory to the parties,
effective to vest in Party I good and marketable
title to the Party II Acquired Assets as of the
Closing Date;
ii. possession of the Party II Acquired Assets;
iii. all other previously undelivered documents,
instruments and writings required to be
delivered to Party I by Party II at or prior to
the Closing pursuant to this Agreement.
(b) On the Closing Date, Party I will deliver or cause to be
delivered to Party II, the following:
i. all other previously undelivered documents,
instruments and writings required to be
delivered to Party II by Party I at or prior to
the Closing; pursuant to this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF PARTY II AND THE PARTY II
SHAREHOLDERS.
Except as disclosed in the schedules attached hereto, which
identifies the specific sections to which each such disclosure
relates, Party II and the Party II Shareholders represent and
warrant to Party I, as follows:
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(a) Organization.
Party II is a limited company organized under the laws of the
UK, duly-organized, validly existing and in good standing
under the laws of the UK with company incorporation number
0591155, with all requisite corporate power and authority to
own, lease and operate its properties and to carry on its
business as it is now being conducted.
(b) Authority.
The execution, delivery and performance of this Agreement have
been duly authorized by Party II Board of Directors and
shareholders. No other corporate proceedings on the part of
Party II are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This
Agreement is a valid and binding obligation of Party II,
enforceable in accordance with its terms, except as may be
affected by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights
generally or by equitable principles. Neither the execution
and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby will (i) violate, or conflict
with, or require any consent under, or result in a breach of
any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate
the performance required by, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
Acquired Assets of Party II under any of the terms, conditions
or provisions of the Articles of Incorporation or Bylaws of
Party II or of any note, bond, mortgage, indenture, deed of
trust, license, agreement or other instrument or obligation to
which Party II is party, or by which Party II or any of the
Acquired Assets may be bound or affected, or (ii) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to Party II or any of the Acquired Assets.
(c) Conflicts of Interest.
Except as stated in the preamble of this Agreement, no present
officer, director, employee, shareholder, or related entity of
Party II has or claims to have (i) any interest in the Party I
Acquired Assets or any of the Assets, or (ii) any Assumed
Contract.
(d) Title to Properties and Condition.
Party II has good and marketable title to all of the Party I
Acquired Assets, free and clear of all mortgages, liens,
pledges, charges, claims or encumbrances.
(e) Litigation.
There is no action, dispute, claim, litigation, arbitration,
investigation or other proceeding, at law or in equity or by
or before any court or governmental or administrative body,
pending or threatened against Party II with respect to its
business, properties, operations or personnel or the
transactions contemplated by this Agreement, and neither Party
II nor any of its officers know or have reasonable grounds to
know of the basis for any such action. Neither Party II nor
the Party I Acquired Assets are subject to any judicial,
governmental, or agency judgment or order.
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(f) Required Consents.
No consent or permission of any third party is required for
execution, delivery and performance of this Agreement or the
consummation of the transaction contemplated hereby. No
consent or permission of any third party is required to assign
any assumed contract to Party I hereunder, or for the
continuation, without default or breach or the right to
declare a default or breach thereof, after assignment to Party
I.
(g) Inventories.
The Party I Acquired Assets are in good and marketable
condition, and are of a quality useable in the ordinary course
of business. All inventories have been procured in the
ordinary course of business and consistent with anticipated
requirements as of the time commitments were made, and the
volume of use of inventory has not been reduced or increased
in anticipation of the transactions contemplated by this
Agreement.
(h) Shares.
In connection with the issuance of the Shares, if applicable,
Party II will make the following representations as a
condition to the issuance of the Shares:
(i) Party II has been supplied with or has had sufficient
access to all material information, including but not limited
to relevant financial statements and other financial
information of Averox, and has been afforded with an
opportunity to question and has received answers concerning
information to which a reasonable investor would attach
significance in making investment decisions, so that, as a
reasonable investor, Party II has been able to make the
decision to purchase the Shares.
(ii) Party II, in making the decision to acquire the Shares,
has relied upon independent investigations of Averox made by
it. Party II has such knowledge and experience in financial,
tax and business matters so as to enable Party II to utilize
the information made available to Party II in connection with
the offering of the Shares to evaluate the merits and risks of
an investment in the Shares and to make an informed investment
decision with respect thereto.
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(iii) Party II understands that the Shares are being and will
be sold in reliance on an exemption from the registration
requirements of U.S. and foreign securities laws, and that
Averox is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of Party II, set forth herein, in order to
determine the applicability of such exemptions and the
suitability of Party II to purchase the Shares. The
representations, warranties and agreements contained herein
are true and correct as of the date hereof and may be relied
upon by Averox, and Party II will notify Averox immediately of
any adverse change in any such representations and warranties
which may occur prior to the closing.
(iv) All offers and sales of the Shares prior to the
registration of the Shares under the Securities Act of 1933
(the "Securities Act") or pursuant to an exemption from
registration under the Securities Act shall be made only
pursuant to such a registration or such exemption from
registration.
(vi) Party II is acquiring the Shares for investment purposes.
(vii) Party II is not a U.S. Person and further makes the
representations and warranties to Party I as follows:
1. At the time of (a) the offer by Averox and (b) the
acceptance of the offer by Party II, of the Shares, Party II
was outside the United States.
2. No offer to acquire the Shares or otherwise to participate
in the transactions contemplated by this Agreement was made to
Party II or its representatives inside the United States.
3. Party II is not purchasing the Shares for the account or
benefit of any U.S. Person, or with a view towards
distribution to any U.S. Person, in violation of the
registration requirements of the Securities Act.
4. Party II will make all subsequent offers and sales of the
Shares either (x) outside of the United States in compliance
with Regulation S; (y) pursuant to a registration under the
Securities Act; or (z) pursuant to an available exemption from
registration under the Securities Act. Specifically, Party II
will not resell the Shares to any U.S. Person or within the
United States prior to the expiration of a period commencing
on the Closing Date and ending on the date that is one year
thereafter (the "Distribution Compliance Period"), except
pursuant to registration under the Securities Act or an
exemption from registration under the Securities Act.
5. Party II is acquiring the Shares for Party II's own
account, for investment and not for distribution or resale to
others.
6. Party II has no present plan or intention to sell the
Shares in the United States or to a U.S. Person at any
predetermined time, has made no predetermined arrangements to
sell the Shares and is not acting as a distributor of such
securities.
7. Neither Party II, its affiliates, nor any person or entity
acting on the Party II's behalf, has entered into, has the
intention of entering into, or will enter into any put option,
short position or other similar instrument or position in the
United States with respect to the Shares at any time after the
issuance thereof through the Distribution Compliance Period
except in compliance with the Securities Act.
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8. Party II is not acquiring the Shares in a transaction (or
an element of a series of transactions) that is part of any
plan or scheme to evade the registration provisions of the
Securities Act.
9. Party II understands the various risks of an investment in
the Shares and can afford to bear such risks for an indefinite
period of time, including, without limitation, the risk of
losing its entire investment in the Shares.
10. Party II has had access to Averox's publicly filed reports
with the SEC.
11. Party II has been furnished, during the course of the
transactions contemplated by this Agreement, with all other
public information regarding Averox that the Party II has
requested and all such public information is sufficient for
the Party II to evaluate the risks of investing in the Shares.
12. Party II is not relying on any representations and
warranties concerning Averox that have been made by Averox or
any officer, employee or agent of Averox, other than those
contained in this Agreement.
13. Party II understands and acknowledges that Averox is under
no obligation to register the Shares for sale under the
Securities Act.
14. Party II represents that the address furnished by Party II
in this Agreement is its principal business address if it is a
corporation or other entity.
15. Party II understands and acknowledges that the Shares have
not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing
authorities have not confirmed the accuracy or determined the
adequacy of any information concerning Averox that has been
supplied to Party II and that any representation to the
contrary is a criminal offense.
(viii) Party II agrees that the certificates representing the
Shares shall contain a legend to the following effect:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH
CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
7. REPRESENTATIONS AND WARRANTIES OF PARTY I.
Party I hereby represents and warrants to Party II, as follows:
(a) Organization.
Party I is a Private Limited Corporation organized under the
laws of Pakistan, a wholly owned subsidiary of Averox Inc.,
USA (OTCBB:AVOX), with all requisite authority to own, lease
and operate its properties and to carry on its business as it
is now being conducted.
(b) Authority.
The execution, delivery and performance of this Agreement has
been duly and effectively authorized by an authorized member
of Party I. No other corporate proceedings on the part of
Party I are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This
Agreement is a valid and binding obligation of Party I
enforceable in accordance with their terms, except as may be
affected by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights
generally or by equitable principles.
(c) No Conflict.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i)
violate, or conflict with, or require any consent under, or
result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by,
under any of the terms, conditions or provisions of the
Memorandum and Articles of Association Organization or
Operating Agreement of Party I or of any note, bond, mortgage,
indenture, deed of trust, license, agreement or other
instrument or obligation to which Party I is party, or by
which Party I or any of its assets or properties may be bound
or affected, or (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Party I or
any of its assets or properties.
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(d) Validity.
This agreement is subject to approval from Party I's legal
advisors and, if required by law, from the board of directors
and shareholders of Party I. The legal advisors, directors and
shareholders of Party I, where applicable, shall have a right
to suggest modifications to this agreement or cancel the whole
agreement within a period of seven (7) days of signing of this
agreement. After the lapse of seven (7) days, the whole
agreement will become binding on both the parties.
8. COVENANTS AND AGREEMENTS.
Upon the terms and subject to the conditions set forth in this
Agreement, Party II, Party II Shareholders and Party I shall each
use their respective commercially reasonable efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be
done, and to assist and cooperate with the other parties hereto in
doing, all things necessary, proper or advisable under applicable
laws to consummate the transactions contemplated hereby, including:
(i) obtaining all necessary material licenses, actions
or non-actions, waivers, consents, approvals, authorizations,
qualifications and other orders of any governmental
authorities with competent jurisdiction over the transactions
contemplated hereby;
(ii) obtaining all necessary consents, approvals or
waivers from third parties;
(iii) defending any lawsuits or other actions
challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have
vacated or reversed any stay or temporary restraining order
entered by any governmental authority prohibiting or otherwise
restraining the consummation of the transactions contemplated
hereby; and
(iv) executing and delivering any additional
instruments, certificates and other documents necessary or
advisable to consummate the transactions contemplated hereby
and to fully carry out the purposes of this Agreement.
9. AGREEMENT WITH REGARD TO PARTY I ACQUIRED ASSETS.
Party I shall not pay any legal cost for claim recovery mentioned in
Schedule II to Party II. Furthermore all the recovery and legal
costs shall be paid by Party II. Party II agrees to pay, perform and
discharge all of its obligations as they become due. Party I agrees
to pay, perform and discharge following the Closing all of the any
assumed liabilities. Furthermore, if any claim becomes due in result
of any legal proceedings to be paid by Party I after the execution
of this agreement, Party I will be considered fully exempted from
all encumbrances provided that Party II will be liable to that
claim.
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If Party II realizes recovery of 5 million US dollars ($5 million)
or more in respect of the Party I Acquired Assets, then seventy five
percent (75%) of the amount by which realization exceeds 5 million
US dollars ($5 million) will be paid to Party I by Party II.
10. EXPENSES; TRANSFER TAXES, ETC.
Party I and Party II each shall pay their respective costs, fees and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including without limitation all
fees of legal counsel and accountants, whether or not such
transactions are consummated hereunder.
11. FURTHER ASSURANCES.
From time to time after the Closing, at one party's request and
without further consideration, the other party will execute and
deliver such other instruments of conveyance and transfer and take
such other action as the other party may reasonably request to
effectuate the transactions contemplated by this Agreement.
12. TRANSFER NAME OF THE ACQUIRED ASSETS AND RIGHT TO MATERIAL THAT
COMES IN AFTER CLOSING.
(a) After the Closing Date, Party II and/or any affiliates of
Party II will not use, for any purpose, the names of the
Assets and all other names or any variant thereof or any of
the names likely to cause confusion with any such names.
(b) Party II agrees to promptly deliver to Party I, all electronic
mail messages intended for Party I but mistakenly misdirected
to Party II, if any, whether received by Party II prior or
subsequent to the execution of this Agreement, due to Party II
e-mail registration. Party II agrees to archive said
electronic mail messages in such a manner as to facilitate
Party I retrieval of said electronic mail messages. Party II
further agrees to immediately forward to Party I any and all
such misdirected e-mail messages which might be received
thereafter.
13. INDEMNIFICATION
(a) Indemnification by Party II and the Party II Shareholders.
Party II and the Party II Shareholders, jointly and severally,
shall indemnify and hold harmless Averox, Party I and its
affiliates (collectively, the "Party I Indemnified Parties")
from and against any loss, liability, deficiency, damage,
expense or cost (including reasonable attorneys' fees and
legal expenses) (each, a "Loss" and, collectively, "Losses"),
which the Party I Indemnified Parties may suffer, sustain or
become subject to (collectively, "Party I Losses"):
(i) as a result of any breach of any of the
representations and warranties of Party II contained in this
Agreement;
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(ii) as a result of any breach of, or failure to
perform, any agreement of Party II contained in this
Agreement; or
(iii) as a result of any claim demand, administrative
proceeding or suit (each a "Claim" and collectively, the
"Claims") arising out of or related to Party II operation of
the Party I Acquired Assets or obligations that are not being
assumed by Party I at Closing or that arose or accrued prior
to the Closing Date.
(b) Indemnification by Party I. Party I shall indemnify and hold
harmless Party II and its affiliates (collectively, the "Party
II Indemnified Parties") from and against any Losses which the
Party II Indemnified Parties may suffer, sustain or become
subject to (collectively, "Party II Losses"):
(i) as a result of any breach of any of the
representations and warranties of Party I contained in this
Agreement;
(ii) as a result of any breach of, or failure to
perform, any agreement of Party I contained in this Agreement;
or
(c) Neither party shall be required to commence litigation against
the other prior to exercising its rights to indemnification
hereunder.
14. NOTICES.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if
delivered in person, telegraphed, telexed or mailed by certified or
registered mail, return receipt requested and postage prepaid as
follows:
If to Party I: Averox Pvt. Ltd.
000, Xxxxxx 00, Xxxxxx X-00/0
Xxxxxxxxx, Xxxxxxxx
If to Party II: Provisus Ltd.
00 XXXXXXXXXX XXXXXXX
XXXXXX XXXXX
XX0 0XX
XX
15. GENERAL.
(a) This Agreement and the attached exhibits and schedules
constitute the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby
and supersedes all prior agreements, arrangements and
understandings. This Agreement may be amended or modified only
in a writing signed by the parties hereto. The parties have
had full and adequate opportunity to consult counsel and have
consulted counsel on this Agreement.
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(b) This Agreement may be executed in any number of counterparts,
and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall
constitute but one agreement. The facsimile signature of any
party to this Agreement for purposes of execution or otherwise
is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding
effect as an original signature on an original document. At
the request of any party, any facsimile or telecopy document
shall be re-executed in original form by the parties who
executed the facsimile or telecopy document. No party may
raise the use of a facsimile machine or telecopier or the fact
that any signature was transmitted through the use of a
facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any notice required thereof.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the Pakistan.
(d) Any of the terms and conditions of this Agreement may be
waived at any time and from time to time in writing by the
party entitled to the benefit thereof without affecting any
other terms and conditions of this Agreement. The waiver by
either party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach.
(e) The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
(f) The invalidity or unenforceability of any term of this
Agreement shall not affect the validity or enforceability of
any of the remaining terms or provisions hereof.
(g) This Agreement may not be assigned by either party, whether by
operation of law or otherwise without the written consent of
the other party hereto, provided however, that after Closing
Party I may assign its rights and interests herein to any
subsidiary or affiliate, direct or indirect. Should Party I
assign its rights and interests herein to any subsidiary or
affiliate, Party I shall remain liable for its obligations
hereunder.
16. Validity of this agreement:
This agreement is subject to approval from Party I's legal advisors
and if required by law from the board of directors and shareholders
of Party I and they have a right to suggest modifications to this
agreement or cancel the whole agreement within a period of seven
days of signing of this agreement. After the lapse of seven (7)
days, the whole agreement will become binding on both the parties.
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IN WITNESS WHEREOF, Party I and Party II have caused this Agreement to be duly
executed and delivered on the day and year first written above.
PARTY I:
AVEROX Pvt. Ltd
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Company Secretary/ CFO
PARTY II:
By: /s/ Xxxxxx Xxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxx
Title: Sole Shareholder/Director
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SCHEDULE I
List of Party II Acquired Assets by Party I
(1) Provisus Software, Service Activation and Provisioning
(2) Trademark, Website, Marketing Material
(3) Intellectual Proprietary Rights (IPR), Source Code of Core Module and all
the developed modules as of Date of execution of this agreement.
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SCHEDULE II
List of Party I Acquired Assets by Party II
(1) Claims for commissions from Azure Solutions
(2) Claims for Commissions and Receivable of $291,967 from AirCom Ltd
(3) Claims for commissions from ATIS Systems GMBH
(4) Claims for Commissions from Lucent Technologies
(5) Claims for Commissions from Intec Telecom
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