THIS ASSET PURCHASE AGREEMENT ("Agreement") is dated as of March 18,
1999, by and between Regenesis Holdings, Corp., a Florida corporation ("Buyer);
and NetDisc, Inc., a Florida corporation (the "Company").
R E C I T A L S
WHEREAS, the Company is engaged in the business of marketing Internet
and e-commerce web sites through a specialized and unique advertising campaign
which intergrates CD ROM video productions and print media distribution to
provide a direct connection to the targeted web site, including e-commerce
products such as: cars, boats, cosmetics, travel, fishing, diving, and gym
equipment (the "Business").
WHEREAS, the parties have entered into a letter of intent, security
agreement, promissory note and non-compete (the "Letter of Intent") providing
for, among other things, the purchase and pledge by Buyer of all of the assets
of the Company, (the "Assets").
WHEREAS, Sellers wish to sell, and Buyer wishes to purchase, the Assets
for the purchase price and upon the terms and subject to the conditions
described in this Agreement, as contemplated by the Letter of Intent.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, terms, and conditions herein made, the parties, intending to be
legally bound, agree as follows:
ARTICLE I
Definitions
1.1 Definitions. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1.
(a) "Business Assets" has the meaning given that term in Section 2.2
(b) "Buyers' Documents" means this Agreement and any other agreements,
notes, certificates, exhibits, schedules and documents executed or delivered or
to be executed or delivered by Buyer in connection herewith.
(c) "Closing" has the meaning given that term in Section 3.1
(d) "Closing Date" has the meaning given that term in Section 3.1
(e) "Encumbrance" means any liability, debt, mortgage, security
interest, lien, claim, encumbrance, title defect, pledge, charge, assessment,
covenant, encroachment and burdens of any kind or nature whatsoever.
(f) "Governing Documents" means the certificate or articles of
incorporation, bylaws, deed of trust, formation or governing agreement and other
charter documents or organization or governing documents or instruments.
(g) "Intellectual Property" has the meaning given that term in Section
4.15.
1
(h) "Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, any other legal entity, or
a Governmental Body.
(i) "Regenesis Shares" means shares of common stock of Regenesis
Holdings, Corp., par value $.01 per share.
(j) "Sellers' Documents " means this Agreement and any other
agreements, notes, certificates, exhibits, schedules and documents executed or
delivered or to be executed or delivered by Seller in connection herewith.
1.2 Construction. As used herein, unless the context otherwise
requires: (i) references to "Article" or "Section" are to an article or section
hereof; (ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits
and Schedules attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include," "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the table of contents, captions and
other headings of the various articles, sections and other subdivisions hereof
are for convenience of reference only and shall not modify, define or limit, or
affect the interpretation of any of the terms, meaning or provisions hereof.
Purchase Price, Assets.
2.1 Purchase Price. Subject to any adjustment to be made by reason of
the other terms of this Agreement, the consideration to be paid by Buyer to or
upon the order of Seller for their property to be sold and conveyed as stated
shall be 10,000 Shares of Buyers' Common Stock par value $.01.
2.2 Assets. Included within the Business would be all the assets of the
Business as set forth in the Schedule A for the Business dated March 7, 1999
adjusted for transactions conducted in the ordinary course of business,
including among other things, the name(s) of the Business, the Business
organization, all property, rights, contracts of any nature, inventories,
accounts receivable, cash, stock and other investments, rights under domestic
and foreign copyrights, patents, trademarks and licensing agreements, know-how
and know-how agreements, subscription and circulation lists and goodwill related
to the Business.
2.3 Liabilities. Not included within the Business would be any of
Seller's liabilities and obligations. Seller will continue to be responsible for
all of its liabilities and obligations not expressly assumed by Buyer.
Closing, Delivery of Shares
3.1 Location. The closing hereunder (the "Closing") shall take place at
10:00 A.M. on the 18th day of March 1999 (the "Closing Date") at the offices of
Buyer 000 X. Xxxxx Xxxx 0 Xxxxxxx XX (or at such other time and place as may be
agreed by Buyer and Seller).
2
3.2 Deliveries at Closing.
(a) By the Company. Contemporaneously herewith, the Company shall
deliver the documents listed below:
(i) Consents and Approvals. Any written consents, waivers,
permits and approvals from third parties, or any Governmental Body or
administrative authorities, in form and substance satisfactory to
Buyer; any consents necessary to transfer and continue in effect all
contracts listed on any Schedule to this Agreement as in effect on the
date hereof.
(ii) The Assets. A list of Assets as set forth in Schedule A.
(iii) Other Documents. Such other certificates, instruments
and other documents as Buyer shall reasonably require in connection
with the transactions contemplated by this Agreement.
(b) By Buyer. Within 30 days of closing herewith, the Buyer shall
deliver:
(i) The Shares. 10,000 Shares of Regenesis Common Stock
contemplated by this Agreement.
Representations and Warranties of the Company
The Company represents, warrant and agree, as follows:
4.1 Corporate Status of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. The Company is qualified to do business and in good standing in each
jurisdiction where the operation of its business requires that it be so
qualified. The Company has all requisite corporate power and authority to own,
operate and sell its properties and assets, to conduct its business as it is now
being conducted, to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
4.2 Authority Concerning this Agreement. The execution, delivery and
performance by the Company of this Agreement and any document executed by the
Company, and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized and approved by all necessary
corporate action of the Company.
4.3 Title to Assets. Except as described in Schedule B hereto, the
Company has good and marketable title to all its assets, free and clear of any
and all Encumbrances. The Company's assets constitute all of the assets that are
used in connection with, necessary for, or beneficial to the operation of the
Business.
4.4 No Violation. The authorization, execution, delivery, and
performance of this Agreement and any Sellers' Document, and the consummation of
the transactions as contemplated hereby and thereby, do not and will not (1)
violate any of the provisions of the Governing Documents of the Company; (2)
violate, conflict with, result in the breach of or constitute a default under,
3
require any notice or consent under, give rise to a right of termination of, or
accelerate the performance required by, any terms or provisions of any material
agreement, instrument, or writing of any nature to which the Company is a party
or is bound; or (3) violate, or result in the breach of, conflict with, or
require any notice, filing or consent under any statute, rule, regulation or
other provision of law, or any order, judgment or other direction of a court or
other tribunal, or any other governmental requirement, permit, registration,
license or authorization applicable to the Company, or any of its assets or the
Business; or (4) result in the creation of any lien, claim, encumbrance, or
restriction on any of the Company's assets. The Company is not a party to any
non-competition or similar agreement that in any way restricts the sale of the
Assets.
4.5 Liabilities. All liabilities of the Company (whether accrued,
unmatured, contingent, or otherwise and whether due or to become due) are either
set forth on Schedule D in the ordinary course of business as theretofore
conducted, or are not materially adverse to the operations or prospects of the
Business.
4.6 No Adverse Change. Since the Letter of Intent Date, the Company has
operated its business diligently and only in the ordinary course of business as
theretofore conducted, and the Company has not and through the Closing Date, the
Company shall not have:
(a) failed to maintain its books, accounts and records in the
usual, regular and ordinary manner and in accordance with good business
practices and consistent with past practice;
(b) experienced any loss of customers which adversely affects
or could adversely affect the Company or the Business or operations of the
Company;
(c) to the best of Sellers' and the Company's knowledge,
suffered any material adverse effects to the Assets;
(d) incurred any accepted purchase order or quotation,
arrangement or understanding for the future sale of services or products of the
Company that has not shown a gross profit or which the Company expects will not
be profitable;
4.7 Intellectual Property.
(a) Schedule A hereto contains a true and correct description
of the following:
(i) All patents, trade marks, copyrights, trade names, service
marks and other trade designations, including common law rights, registrations,
applications for registration, domain names (Xxxxxxx.xxx), web site, technology,
know-how or processes ("Intellectual Property") currently owned, in whole or in
part, by the Company and all licenses, royalties, assignments and other similar
agreements relating to the foregoing to which the Company is a party;
(ii) All agreements relating to Intellectual Property that the
Company is licensed or authorized to use from others or which the Company
licenses or authorizes others to use.
4
(b) Except as set forth on Schedule C, the Company owns the
Intellectual Property free and clear of and without conflict with the rights of
others. Each item of Intellectual Property owned or used by the Company
immediately prior to the Closing shall be owned or available for use by Buyer on
identical terms and conditions immediately subsequent to the Closing. The
Company has not interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of third parties, and
the Company has not received any charge, complaint, claim, demand or notice
alleging any such interference, infringement, misappropriation or violation. To
the best of Sellers' and the Company's knowledge, no third party has interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of the Company.
4.8 Contracts, Leases and Commitments; Customers and Suppliers. The
Company has furnished to Buyer true copies of all contracts, leases, agreements
and commitments to which the Company is a party or by which it or its assets are
bound or which otherwise relate to the Business, which contracts, leases and
commitments are listed in Schedule _____, including summaries of the terms of
any unwritten commitments. Except as set forth in Schedule ________ : (1) the
Company and the other parties thereto, have complied in all material respects
with all of the Company's contracts, leases, and commitments, all of which are
valid and enforceable; (2) all of the Company's contracts, leases, and
commitments are in full force and effect and there exists no event or condition
which with or without notice or lapse of time would be a default thereunder,
give rise to a right to accelerate or terminate any provision thereof, or give
rise to any lien, claim, encumbrance, or restriction on any of the assets or
properties of the Company; (3) all of the Company's contracts, leases, and
commitments have been entered into on an arm's-length basis; and (4) none of the
Company's purchase commitments is in excess of the normal requirements of its
business or at an excessive price. Except for purchase orders or sales orders or
invoices made, taken, or received by the Company in the ordinary course of its
business consistent with past practice, the Company is not a party, nor is any
of its assets or Business subject, to any contract, lease, or commitment not
listed in such Schedule (including, without limitation, financing or security
agreements or guaranties, repurchase agreements, agency agreements,
manufacturers' representative agreements, commission agreements, employment, or
collective bargaining agreements, pension, bonus, or profit-sharing agreements,
group insurance, medical or other fringe benefit plans, and leases of real or
personal property), other than (i) contracts terminable without penalty on not
more than thirty days' notice that do not involve the receipt or expenditure of
more than $10,000 in any one year, or (ii) contracts that do not involve the
receipt or expenditure of more than $5,000 individually or $10,000 in the
aggregate in any one year.
4.9 Inventory. The Company does not maintain any inventory.
4.10 Accounts Receivable. Except as set forth in Schedule E hereto, all
of the Company's accounts receivable have arisen in the ordinary course of
business. All such accounts receivable are bona fide, valid and binding
receivables representing obligations for the face dollar amount thereof and will
be collected in full within ninety (90) days of their due date and are subject
to no defenses, counterclaims or set-offs of any nature whatsoever.
4.11 Compliance with Law. During the three years preceding the date
hereof, no notice, citation, summons or order has been received by the Company
and no complaint has been served on the Company no penalty has been assessed and
no investigation, proceeding or review has been instituted or threatened (a)
with respect to alleged violation by the Company of any law. No event has
occurred or condition or state of facts exists that could give rise to any such
violation of any law.
5
4.12 Litigation. There are no actions, suits, proceedings, claims, or
governmental investigations pending or threatened against, the Company or any of
its assets, or, in connection with the Company's Business, or any of the
Company's officers, directors, or employees (provided that for the purposes of
this sentence, a lawsuit which has been filed but which has not been served
shall be deemed to be merely threatened and not pending and a governmental
investigation which has been initiated but for which no notice has been given to
the Company shall also be deemed to be merely threatened and not pending). To
the best of Sellers' and the Company's knowledge, there are no facts or state of
facts existing that (with or without the giving of notice or the passage of time
or both) could form the basis for any such suit, proceeding, action, claim or
investigation.
4.13 Books and Records. The books and records of the Company are
complete and correct in all material respects and have been maintained in
accordance with good business practices.
4.14 Improper Payments. The Company and its officers and agents have
not made any illegal or improper payments to, or provided any illegal or
improper benefit or inducement for, any governmental official, supplier,
customer, or other person, in an attempt to influence any such person to take or
to refrain from taking any action relating to the Company. The Company's
employees may from time to time have made customary holiday gifts of nominal
value to suppliers or customers.
4.15 No Misstatements. No representation, warranty, or other statement
by the Sellers or Company herein or in any Sellers' Document contains or will
contain an untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
materially misleading. The Company is not aware of any matter that could
reasonably be expected to have a materially adverse effect on the sale of the
Company's Assets that has not been disclosed in writing to Buyer.
Representations and Warranties of Buyer
Buyer represents, warrant and agree that:
5.1 Corporate Status of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida.
Buyer has all requisite corporate power and authority to own, operate and lease
its properties and assets, to conduct its business as it is now being conducted,
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.
5.2 Authority Concerning this Agreement. The execution, delivery and
performance by Buyer of this Agreement and any document and the consummation of
the transactions contemplated hereby and thereby, have been duly and validly
authorized and approved by all necessary corporate action. This Agreement is
valid and binding upon Buyer and enforceable against Buyer in accordance with
their respective terms, except to the extent that enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency or moratorium laws,
or other laws affecting the enforcement of creditors' rights or by the
principles governing the availability of equitable remedies.
6
5.3 No Violation. The authorization, execution, delivery, and
performance of this Agreement and the consummation of the transactions as
contemplated hereby and thereby do not and will not (1) violate any of the
provisions of the Governing Documents of Buyer; (2) violate, conflict with,
result in the breach of or constitute a default under, require any notice or
consent under, give rise to a right of termination of, or accelerate the
performance required by, any terms or provisions of any material agreement,
instrument, or writing of any nature to which Buyer is a party or is bound; or
(3) violate, or result in the breach of, conflict with, or require any notice,
filing or consent under any statute, rule, regulation or other provision of law,
or any order, judgment or other direction of a court or other tribunal, or any
other governmental requirement, permit, registration, license or authorization
applicable to Buyer; or (4) result in the creation of any lien, claim,
encumbrance, or restriction on any of its Assets.
5.4 Securities. Regenesis Shares, when issued and paid for pursuant to
the terms of this Agreement will be duly authorized, validly issued, fully paid
and nonassessable.
Miscellaneous Provisions
6.1 Nature and Survival of Representations and Warranties.
All representations and warranties made by Buyer and Sellers hereunder shall
survive the Closing until the earlier to occur of the third anniversary of the
date of this Agreement or the date at which the Buyer sells the Division to a
third party, except that with respect to a breach of the representations and
warranties relating to taxes, such representations and warranties shall survive
the Closing until six months after the expiration of the applicable statute of
limitations. The expiration of any representation or warranty shall not affect
any claim made in writing prior to the date of such expiration. The
representations and warranties hereunder shall not be affected or diminished by
any investigation made or any information provided at any time by or on behalf
of the party for whose benefit such representations and warranties were made or
by the closing of the transactions contemplated hereby.
6.2 Further Actions. At any time and from time to time after the
Closing, at Buyer's request and without further consideration, Sellers shall
cooperate and execute and deliver such other instruments of sale, conveyance,
transfer, assignment and confirmation and take such further action as Buyer may
reasonably deem necessary or desirable in order to more effectively convey,
transfer and assign to Buyer, and to confirm Buyer's title to, all of the Shares
of Sellers, to put Buyer in actual possession and operating control of the
Company and the Business, and to assist Buyer in exercising all rights with
respect thereto.
6.3 Brokers. Each party represents to the other that it has had no
dealings with any broker or finder in connection with the transactions
contemplated by this Agreement. Should any claim be made for a broker's,
finder's or similar fee, on account of any actions or dealings by a party or its
agents, such party shall indemnify, defend, protect and hold the other party
harmless from and against any and all liability and expenses, including
reasonable attorneys' fees, incurred by reason of any claim made by such broker.
6.4 Indemnification.
(a) By Seller. Seller shall, jointly and severally, indemnify,
defend, protect and hold harmless Buyer, promptly upon demand at any time and
from time to time, against any and all losses, liabilities, claims, actions,
damages, and expenses, including, without limitation, reasonable attorneys' fees
and disbursements incurred by Buyer or its affiliates (collectively, "Losses"),
7
arising out of or in connection with any of the following: (i) any
misrepresentation or breach of any warranty made by Sellers in any Sellers'
Document; (ii) any breach or non-fulfillment of any covenant or agreement made
by Sellers in Sellers' Documents; (iii) the claims of any broker or finder
engaged by Sellers; and (iv) without in any manner limiting the foregoing, any
liabilities or obligations of, or claims or causes of action against, Sellers or
the Company which arise with respect to or relate to any period or periods on or
prior to the Closing Date hereof, except for those which are set forth or
reserved against in the Closing Balance Sheet or are set forth in a schedule
hereto, or were incurred in the ordinary course of business as heretofore
conducted and are not materially adverse to the operations or prospects of the
Business.
(b) By Buyer. Buyer shall, jointly and severally, indemnify,
defend, protect and hold Sellers and its affiliates (including its shareholders)
harmless, promptly upon demand at any time and from time to time, against any
and all Losses arising out of or in connection with any of the following: (a)
any misrepresentation or breach of any warranty made by Buyer in any of Buyer's
Documents or (b) any breach or non-fulfillment of any covenant or agreement made
by Buyer in Buyer's Documents.
(c) Threshold for Indemnification. Neither Buyer nor Seller
shall be required to indemnify the other pursuant to this Section 6.4 until the
aggregate amount required to be paid thereunder exceeds Twenty-five Thousand
Dollars, in which case the Indemnifying Party shall then be required to so
indemnify the indemnified party for any and all Damages exceeding $25,000.
(d) Defense. The obligations and liabilities of the parties
hereunder with respect to a third party claim shall be subject to the following
terms and conditions:
(e) An indemnified party shall give the indemnifying party
written notice of a third party claim promptly after receipt by the indemnified
party of notice thereof, and the indemnifying party may undertake at its sole
cost and expense the defense, compromise and settlement thereof by
representatives of its own choosing reasonably acceptable to the indemnified
party. The assumption of the defense, compromise and settlement of any such
third party claim by the indemnifying party shall be an acknowledgment of the
obligation of indemnifying party to indemnify the indemnified party with respect
to such claim hereunder. If the indemnified party desires to participate in, but
not control, any such defense, compromise and settlement, it may do so at its
sole cost and expense. If, however, the indemnifying party fails or refuses to
undertake the defense of such third party claim within ten (10) days after
written notice of such claim has been given to the indemnifying party by the
indemnified party, the indemnified party shall have the right to undertake the
defense of such claim with counsel of its own choosing with all costs charged to
the indemnifying party.
(f) No settlement of a third party claim involving the
asserted liability of the indemnifying party under this Section 6.4 shall be
made without the prior written consent of both the indemnifying party and the
indemnified party. In the event that the indemnifying party wishes to accept or
to offer a settlement of a third party claim and the indemnified party rejects
the settlement, and the claim is later resolved by settlement, compromise or by
final judgment of a court of law, the indemnifying party's maximum liability to
the indemnified party shall not exceed the rejected settlement amount.
8
(g) Right of Set-Off.
(i) In the event any claim of a right to indemnification
is made by Buyer, or other indemnified party under this Section 6.4, such party
may, at its sole option, satisfy all or a portion of its Losses by way of
set-off against the Earn-out Consideration and any other payments due to
Sellers.
(ii) This Section in no way constitutes a limitation on
Buyer's rights hereunder or a measure of liquidated damages and Buyer may seek
full indemnification for all damages suffered and may pursue all rights and
remedies available to it, at law or in equity, against any party hereto, jointly
with other parties hereto or severally, without seeking recourse against any
other party and without exercising any right of offset.
(h) Insurance proceeds/tax benefits. The liability of the
Sellers with respect to any claim for indemnification shall be reduced by the
tax benefit actually realized by Buyer and any insurance proceeds received by
Buyer as a result of any Loss upon which the claim for indemnification is based.
The amount of any such tax benefit shall be determined by taking into account
the effect, if any and to the extent determinable, of timing differences
resulting in acceleration of Losses or deferral of gains.
6.5 Notices. All notices or other communications in connection with
this Agreement shall be in writing and shall be considered given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent via commercial courier or telecopier,
directed as follows:
If to Sellers: Netdisc
----------------------------
----------------------------
With a copy to:
----------------------------
----------------------------
----------------------------
If to Buyer: Regenesis Holdings, Inc.
0000 X. Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxxx Xxxxx, Esq.
0000 X.X. 000xx Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
6.6 Miscellaneous.
(a) Entire Agreement. This Agreement (which includes the
schedules and exhibits hereto) sets forth the parties' final and entire
agreement with respect to its subject matter and supersedes any and all prior
understandings and agreements, including, but not limited to the Letter of
9
Intent. This Agreement can be amended, supplemented, or changed, and any
provision hereof can be waived, only by a written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, change, or waiver is sought.
(b) Successors. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors, and assigns;
provided, however, that neither this Agreement nor any right or obligation
hereunder may be assigned or transferred, except that Buyer may assign this
Agreement and its rights hereunder to any direct or indirect wholly-owned
subsidiary of Buyer and to financial institutions providing financing for the
transaction.
(c) Construction of Agreement. The section headings in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. When the context in which the words
are used in this Agreement indicates that such is the intent, words in the
singular number shall include the plural and vice versa. References to any
gender shall include any other gender that may be applicable in the
circumstances. This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Agreement to be drafted.
(d) Publicity. No party shall issue any press release or make
any other publicly available disclosure of the terms of this transaction without
the prior written consent of Buyer and Sellers; provided, however, that the
restrictions of this covenant shall not apply (i) if otherwise required by law,
(ii) if necessary or appropriate in connection with the transactions
contemplated hereunder, (iii) to the extent such information shall have
otherwise become publicly available.
(e) Severability. If any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, invalid, or
unenforceable, such provision shall be construed and enforced as if it had been
more narrowly drawn so as not to be illegal, invalid or unenforceable, and such
illegality, invalidity or unenforceability shall have no effect upon and shall
not impair the enforceability of any other provision of this Agreement.
(f) Counterparts. This Agreement may be executed in one or
more counterparts, each one of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Delivery of an
executed counterpart of this Agreement via telephone facsimile transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement.
10
IN WITNESS WHEREOF, on the date first above written, the parties have duly
executed this Agreement.
Very truly yours,
/s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Regenesis Holdings, Inc.
Name: Xxxxxxxx X. Xxxxxxx
Title: President
Accepted as of the date
First above written:
/s/ Xxxx Xxxxxx
----------------------------------
Xxxx Xxxxxx, President
NetDisc, Inc.
A Florida Corporation
11
