Exhibit 2.2
ASSET PURCHASE AGREEMENT DATED MARCH 27, 2000, BY AND BETWEEN
XXXXXXXXXX.XXX, INC. AND XXXX AND XXXXXX XXXXXX
This Asset Purchase Agreement is entered into this ______ day
of March, 2000, by and between XXXXXXXXXX.XXX, INC., a Delaware corporation
("Purchaser") and XXXX AND XXXXXX XXXXXX, husband and wife ("Seller").
R E C I T A L S :
A. Seller operates a business primarily engaged in development
and maintenance of an Internet website featuring information on products,
resources and services available for the disabled, the handicapped, the
physically challenged, the elderly, caregivers and health care professionals and
providers (the "Business"). Seller's principal place of business is 000 Xxxxxx
Xxxxx, Xxx Xxxxxxx, XX 00000. Seller owns equipment, intellectual property,
contract rights and miscellaneous assets used in connection with the operation
of the Business.
B. Purchaser desires to acquire substantially all the assets
used or useful, or intended to be used, in the operation of the Business, and
Seller desires to sell such assets to Purchaser.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
A G R E E M E N T :
SECTION 1 - DESCRIPTION OF TRANSACTION
1.1 ASSETS PURCHASED. Seller shall sell to Purchaser and
Purchaser agrees to purchase from Seller, on the terms and conditions set forth
in this Agreement, the assets set forth on Exhibit A hereto (the "Assets").
1.2 LIABILITIES ASSUMED. Purchaser shall assume no liabilities
except the obligation to perform all of Seller's future obligations under the
agreements listed on Exhibit B hereto.
1.3 EXCLUDED ASSETS. Excluded from this sale and purchase are
any other assets of the Business not specified in Section 1.1.
1.4 PURCHASE PRICE FOR ASSETS. The purchase price for the
Assets shall be Two Hundred Fifty Thousand Dollars ($250,000) cash and Twenty
Thousand (20,000) shares of Xxxxxxxxxx.xxx, Inc. common stock (the "Netivation
Stock") valued as of the Closing Date.
1.5 PAYMENT OF PURCHASE PRICE. The cash portion of the
purchase price for the Assets shall be paid at Closing, by wire transfer to the
Seller. The shares of Netivation Stock shall be transferred to Seller as soon as
practicable after the Closing.
1.6 CLOSING. This Agreement shall be closed at the offices of
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields, Chtd, 000 X. Xxxxxxx Xxxx, 00xx Xxxxx,
Xxxxx, Xxxxx 00000 on or before March 31, 2000, or at such other time as the
parties may agree in writing (the "Closing" or the "Closing Date"). If Closing
has not occurred on or prior to March 31, 2000, then either party may elect to
terminate this Agreement. If, however, the Closing has not occurred because of a
breach of contract by one or more parties, the breaching party or parties shall
remain liable for breach of contract.
1.7 ADJUSTMENTS. The operation of the Business and related
income and expenses up to the close of business on the day before the Closing
Date shall be for the account of Seller and
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thereafter for the account of Purchaser. Expenses, including but not limited
to utilities, taxes and rents shall be prorated between Seller and Purchaser
as of the close of business on the Closing Date, the proration to be made and
paid, insofar as reasonably possible, on the Closing Date, with settlement of
any remaining items to be made within 30 days following the Closing Date.
1.8 SHARES ISSUED. Each certificate representing any of the
shares of Netivation Stock to be issued pursuant to this Agreement shall bear a
legend identical or similar in effect to the following legend (together with any
other legend or legends required by applicable state securities laws or
otherwise):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE
RESTRICTED WITHIN THE MEANING OF RULE 144 OF THE ACT AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE."
1.9 TAX TREATMENT . Purchaser and Seller intend that the
transaction contemplated by this Agreement be treated as a purchase and sale of
assets that would be reportable to the Internal Revenue Service as a taxable
transaction.
1.10 FURTHER ACTION . If, at any time after the Closing Date,
any further action is determined by Purchaser to be necessary or desirable to
carry out the purposes of this Agreement or to vest Purchaser with full right,
title and possession of and to all rights and property of the Business, the
officers and directors of Purchaser shall be fully authorized (in the name of
Seller and otherwise) to take such action.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in Schedule 2 (Seller's Schedule of
Exceptions), Seller represents and warrants, to and for the benefit of
Purchaser, as follows:
2.1 COMPANY EXISTENCE. Seller has all requisite power and
authority to own, operate and/or lease the Assets, as the case may be, and to
carry on the Business as now being conducted.
2.2 AUTHORIZATION. The execution, delivery, and performance of
this Agreement have been duly authorized and approved by the Seller, and this
Agreement constitutes a valid and binding Agreement of Seller in accordance with
its terms.
2.3 BROKERS AND FINDERS. Seller has not employed any broker or
finder in connection with the transactions contemplated by this Agreement, or
taken action that would give rise to a valid claim against any party for a
brokerage commission, finder's fee, or other like payment.
2.4 TRANSFER NOT SUBJECT TO ENCUMBRANCES OR THIRD-PARTY
APPROVAL. The execution and delivery of this Agreement by Seller, and the
consummation of the contemplated transactions, will not result in the creation
or imposition of any valid lien, charge, or encumbrance on any of the Assets,
and will not require the authorization, consent, or approval of any third party,
including any governmental subdivision or regulatory agency.
2.5 EMPLOYMENT MATTERS. Seller is not a party to or bound by
any currently effective employment contract, deferred compensation arrangement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation plan or agreement, and Seller has no employees.
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2.6 NONCANCELLABLE CONTRACTS. At the time of Closing, there
will be no material leases, employment contracts, contracts for services or
maintenance, or other similar contracts existing or relating to or connected
with the operation of the Business not cancellable within 30 days, except those
Agreements listed on Exhibit C.
2.7 TAX MATTERS AND LICENSES. Seller understands that it is
solely responsible for any and all liabilities for taxes (including liabilities
for interest, additions to tax, and penalties thereon and related expenses) with
respect to the operations, sale, or other activities of the Business. Seller
also understands that it was solely responsible for all material licenses,
permits, and authorizations, and any and all liabilities related thereto,
necessary to own and otherwise conduct its operation of the Business.
2.8 FINANCIAL INFORMATION. The financial information furnished
by Seller to Purchaser involving the Business was generated in the ordinary
course of operation of the Business, and to the best of Seller's knowledge, is
accurate utilizing generally accepted accounting principles.
2.9 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. Exhibit A is a
complete and accurate list of all material assets (whether leased or owned),
including intellectual property, of Seller which are used in the Business and
are to be purchased by Purchaser. Seller has good and marketable title to all of
its properties and assets, including those listed on Exhibit A, in each case
subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than
(i) those resulting from taxes which have not yet become due and payable, (ii)
minor liens and encumbrances which do not materially detract from the value of
the property subject thereto or materially impair the operations of the Business
and (iii) those that have arisen from purchase money security interests in an
amount not to exceed $10,000. All facilities, machinery, equipment, fixtures,
vehicles and other properties owned, leased or used by Seller in conjunction
with the Business are in good operating condition and repair and are reasonably
fit and usable for the purposes for which they are being used. Seller is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.
2.10 PATENTS AND TRADEMARKS . Seller owns or possesses
sufficient legal rights to all trademarks, service marks, trade names,
copyrights, trade secrets and licenses, and to all patents, information and
other proprietary rights and processes necessary for its business as now
conducted and as proposed to be conducted, without any known infringement of the
rights of others. There are no outstanding options, licenses or agreements of
any kind relating to the foregoing, nor is Seller bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from the purchase of "off
the shelf" or standard products. Seller has not received any communications
alleging that it either has violated or, by conducting the Business, would
violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or entity. None
of Seller's employees is obligated under any contract (including licenses,
covenants or commitments or any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Seller's business by the employees of Seller.
The conduct of the Business as proposed, will not, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any contract, covenant or instrument under which any employee is now obligated.
Seller does not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees made prior to
their employment by Seller, except for inventions, trade secrets or proprietary
information that have been assigned to Seller.
2.11 LITIGATION. Seller has no knowledge of any claim,
litigation, proceeding, or investigation pending or threatened against Seller
that might result in any material adverse change in the Business or condition of
Assets being conveyed under this Agreement.
2.12 SECURITIES LAWS MATTERS. Seller understands that the
Netivation Stock has not been registered under the Securities Act and that the
Netivation Stock being issued in the Transaction is being issued pursuant to a
private placement exemption from registration under Section 4(2) of the
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Securities Act, based in part upon the Seller's representations contained in
this Agreement. Seller hereby represents and warrants as follows:
(a) KNOWLEDGE AND EXPERIENCE. Seller is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act and/or Seller is knowledgeable and has substantial experience in
evaluating and investing in transactions in companies similar to Purchaser so
that Seller is capable of evaluating the merits and risks of its investment in
Purchaser. Seller has by reason of the Business or financial knowledge and
experience, the capacity to protect Seller's own interests in connection with
the transactions contemplated by this Agreement. Further, Seller is aware of no
publication of any advertisement in connection with the transactions
contemplated by this Agreement. Seller can bear the economic risk of the
transactions contemplated by this Agreement. Seller has been advised or is aware
of the provisions of Rule 144 promulgated under the Securities Act, including
affiliate status, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions. Seller acknowledges
that he or she will be required to hold the Netivation Stock for a period of one
year prior to resale in a public market transaction involving a broker or
dealer, consistent with Rule 144.
(b) PURCHASER INFORMATION. Seller has had an
opportunity to discuss Purchaser's business, management and financial affairs,
both as currently conducted and as proposed to be conducted following the
transactions contemplated by this Agreement, with directors, officers and
management of Purchaser and has had the opportunity to review Purchaser's
operations and facilities. Seller has also had the opportunity to ask questions
of, and receive answers from, Purchaser and its management regarding the terms
and conditions of the transactions contemplated by this Agreement and the
receipt of Netivation Stock.
(c) ACQUISITION FOR OWN ACCOUNT. Seller is acquiring
the Netivation Stock for Seller's own account for investment only, and not with
a view towards distribution.
2.13 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties of Seller contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make statements in this Agreement not misleading. Seller
knows of no fact that has resulted, or that will result in a material change in
the Business, operations, or assets of Seller that has not been set forth in
this Agreement or otherwise disclosed to Purchaser.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in Schedule 3 (Purchaser's Schedule of
Exceptions), Purchaser represents and warrants, to and for the benefit of
Seller, as follows:
3.1 COMPANY EXISTENCE. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the state of
Delaware. Purchaser has all requisite corporate power and authority to enter
into this Agreement and perform its obligations hereunder.
3.2 VALIDITY. This Agreement constitutes a valid and binding
Agreement of Purchaser in accordance with its terms.
3.3 BROKERS AND FINDERS. Purchaser has not employed any broker
or finder in connection with the transaction contemplated by this Agreement and
has taken no action that would give rise to a valid claim against any party for
a brokerage commission, finder's fee, or other like payment.
3.4 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties of Purchaser contain or will contain any untrue
statement of a material fact or omit or will omit or misstate a material fact
necessary in order to make the statements contained herein not misleading.
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SECTION 4 - CERTAIN COVENANTS OF SELLER
4.1 SELLER'S OPERATION OF BUSINESS PRIOR TO CLOSING. Seller
agrees that between the date of this Agreement and the Closing Date, Seller
will:
(a) Continue to operate the Business in the usual and
ordinary course and in substantial conformity with all applicable laws,
ordinances, regulations, rules, or orders, and will use its best efforts to
preserve its business organization and preserve the continued operation of the
Business with its customers, suppliers, and others having business relations
with Seller.
(b) Not assign, sell, lease, or otherwise transfer or
dispose of any of the assets used in the performance of the Business, whether
now owned or hereafter acquired, except in the normal and ordinary course of
business and in connection with its normal operation.
(c) Maintain all of its assets other than inventories
in their present condition, reasonable wear and tear and ordinary usage
excepted, and maintain the inventories at levels normally maintained.
4.2 ACCESS AND INVESTIGATION. Seller shall ensure that, at all
times during the Pre-Closing period:
(a) Seller and its representatives provide Purchaser
and its representatives with access, during normal business hours upon
reasonable notice, to Seller's representatives, personnel and assets and to all
existing books, records, tax returns, work papers and other documents and
information relating to Seller;
(b) Seller and its representatives provide Purchaser
and its representatives with such copies of existing books, records, tax
returns, work papers and other documents and information relating to Seller as
Purchaser may request in good faith; and
(c) Seller and its representatives compile and
provide Purchaser and its representatives with such additional financial,
operating and other data and information regarding Seller as Purchaser may
request in good faith. Without limiting the generality of the foregoing, during
the Pre-Closing Period, Seller shall promptly provide Purchaser with copies of:
(i) all material operating and financial
reports prepared by Seller for its senior management, including copies of the
unaudited monthly balance sheets of Seller and the related unaudited monthly
statements of operations and statements of cash flows;
(ii) any material notice, document or other
communication sent by or on behalf of Seller to any party to any Seller contract
or sent to Seller by any party to any Seller contract (other than any
communication that relates solely to commercial transactions of the type sent in
the ordinary course of business);
(iii) any written notice, report or other
document filed with or sent to any governmental body in connection with the
transactions contemplated by this Agreement; and
(iv) any material written notice, report or
other document received by Seller from any governmental body.
4.3 CHANGE OF NAME. On or prior to the Closing Date, Seller
will take all action necessary or appropriate to permit Purchaser to legally
commence use of Seller's name on the Closing Date. Seller shall not use the name
"DISABILITYMALL" or "XXXXXXXXXXXXXX.XXX" in any business whatsoever after the
Closing Date.
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4.4 NO NEGOTIATION. Seller shall ensure that, during the
Pre-Closing period, neither Seller nor any of its representatives directly or
indirectly:
(a) solicits or encourages the initiation of any
inquiry, proposal or offer from any person (other than Purchaser) relating to
any transaction contemplated by this Agreement;
(b) participates in any discussions or negotiations
with, or provides any non-public information to, any person (other than
Purchaser) relating to any transaction contemplated by this Agreement; or
(c) considers the merits of any unsolicited inquiry,
proposal or offer from any person (other than Purchaser) relating to any
transaction contemplated by this Agreement.
SECTION 5 - ADDITIONAL COVENANTS OF THE PARTIES
5.1 CONDITIONS AND BEST EFFORTS. Purchaser and Seller will use
their best efforts to effectuate the transactions contemplated by this Agreement
and to fulfill all the conditions of Purchaser's and Seller's obligations under
this Agreement, and shall do all acts and things as may be required to carry out
Purchaser's and Seller's obligations and to consummate this Agreement.
5.2 CONFIDENTIAL INFORMATION. If for any reason the sale of
Assets is not closed, Purchaser will not disclose to third parties any
confidential information received from Seller in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement.
5.3 RESALE. Seller shall not sell or otherwise transfer any
Netivation Stock until the requirements of Rule 144 are satisfied for such sale
or transfer unless the stock is earlier registered. Purchaser shall endeavor to
timely cooperate with Seller regarding the resale of Netivation Stock once the
requirements in the preceding sentence have been satisfied.
SECTION 6 - CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to effect the transaction
contemplated by this Agreement are subject to the satisfaction, at or prior to
Closing, of each of the following conditions (any of which may be waived by
Purchaser, in whole or in part):
6.1 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER. All
representations and warranties made in this Agreement by Seller shall be true as
of the Closing Date as fully as though such representations and warranties had
been made on and as of the Closing Date, and, as of the Closing Date, Seller
shall not have violated nor shall have failed to perform in accordance with any
covenant contained in this Agreement.
6.2 CONDITIONS OF THE BUSINESS. There shall have been no
material adverse change in the manner of operation of the Business prior to the
Closing Date.
6.3 NO SUITS OR ACTIONS. At the Closing Date no suit, action,
or other proceeding shall have been threatened or instituted to restrain,
enjoin, or otherwise prevent the consummation of this Agreement or the
contemplated transactions.
6.4 SECURITIES LAW COMPLIANCE. All applicable requirements of
the Securities Act of 1933 and any applicable state securities laws shall have
been satisfied.
6.5 APPROVALS. This Agreement and the consummation of the
transactions contemplated by this Agreement shall have been approved by all
necessary corporate action on the part of Purchaser.
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6.6 AGREEMENTS AND DOCUMENTS. Purchaser shall have received
the following agreements and documents, each of which shall be in full force and
effect:
(a) the Escrow Agreement, substantially in the form
of Exhibit D;
(b) a Xxxx of Sale and Assignment, substantially in
the form of Exhibit E;
(c) an Assignment of Intellectual Property,
substantially in the form of Exhibit F;
(d) a Prospective Offeree Questionnaire,
substantially in the form of Exhibit G executed by each of Xxxx Xxxxxx and
Xxxxxx Xxxxxx;
(e) a certificate executed by Seller containing the
representation and warranty that (i) each of the representations and warranties
made by Seller in this Agreement is accurate in all material respects as of the
Closing Date as if made on the Closing Date and (ii) the conditions set forth in
this Section 6 have been duly satisfied; and
(f) such other documents, to the extent such
documents are reasonably available or should be reasonably available, as
Purchaser may reasonably request in good faith for the purpose of (i) evidencing
the accuracy of any representation or warranty made by Seller, (ii) evidencing
the compliance by Seller with, or the performance by Seller of, any covenant or
obligation set forth in this Agreement, (iii) evidencing the compliance with any
applicable federal or state securities law, (iv) evidencing the satisfaction of
any condition set forth in this Section 6 or (v) otherwise facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.
SECTION 7 - CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to effect the transactions
contemplated by this Agreement are subject to the fulfillment, at or prior to
Closing, of each of the following conditions (any of which may be waived by
Seller, in whole or in part):
7.1 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF PURCHASER.
All representations and warranties made in this Agreement by Purchaser shall be
true as of the Closing Date as fully as though such representations and
warranties had been made on and as of the Closing Date, and Purchaser shall not
have violated or shall not have failed to perform in accordance with any
covenant contained in this Agreement.
7.2 AGREEMENTS AND DOCUMENTS. Seller shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) the Escrow Agreement, substantially in the form
of Exhibit D;
(b) a certificate executed by Purchaser containing
the representation and warranty that (i) each of the representations and
warranties made by Purchaser in this Agreement is accurate in all material
respects as of the Closing Date as if made on the Closing Date and (ii) the
conditions set forth in this Section 7 have been duly satisfied; and
(c) such other documents, to the extent such
documents are reasonably available or should be reasonably available, as Seller
may reasonably request in good faith for the purpose of (i) evidencing the
accuracy of any representation or warranty made by Purchaser, (ii) evidencing
the compliance by Purchaser with, or the performance by Purchaser of, any
covenant or obligation set forth in this Agreement, (iii) evidencing the
compliance with any applicable federal or state securities law, (iv) evidencing
the satisfaction of any condition set forth in this Section 7 or (v) otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement.
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SECTION 8 - TERMINATION
8.1 TERMINATION EVENTS. This Agreement may be terminated prior
to the Closing:
(a) by Purchaser if (i) there is a material breach of
any covenant or obligation of Seller or (ii) Purchaser reasonably determines
that the timely satisfaction of any condition set forth in Section 6 has become
impossible (other than as a result of any failure on the part of Purchaser to
comply with or perform any covenant or obligation of Purchaser set forth in this
Agreement);
(b) by Seller if (i) there is a material breach of
any covenant or obligation of Purchaser or (ii) Seller reasonably determines
that the timely satisfaction of any condition set forth in Section 7 has become
impossible (other than as a result of any failure on the part of Seller to
comply with or perform any covenant or obligation of Seller set forth in this
Agreement);
(c) by Purchaser at or after the Closing Date if any
condition set forth in Section 6 has not been satisfied by the Closing Date;
(d) by Seller at or after the Closing Date if any
condition set forth in Section 7 has not been satisfied by the Closing Date;
(e) by Purchaser if the Closing has not taken place
on or before March 31, 2000 (other than as a result of any failure on the part
of Purchaser to comply with or perform any covenant or obligation of Purchaser
set forth in this Agreement);
(f) by Seller if the Closing has not taken place on
or before March 31, 2000 (other than as a result of the failure on the part of
Seller to comply with or perform any covenant or obligation of Seller set forth
in this Agreement); or
(g) by the mutual consent of Purchaser and Seller.
8.2 TERMINATION PROCEDURES. If Purchaser wishes to terminate
this Agreement pursuant to Section 8.1, Purchaser shall deliver to Seller a
written notice stating that Purchaser is terminating this Agreement and setting
forth a brief description of the basis on which Purchaser is terminating this
Agreement. If Seller wishes to terminate this Agreement pursuant to Section 8.1,
Seller shall deliver to Purchaser a written notice terminating this Agreement
and setting forth a brief description of the basis on which this Agreement is
terminated.
8.3 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.1, all further obligations of the parties under this
Agreement shall automatically terminate; PROVIDED, HOWEVER, that: (a) neither
Purchaser nor Seller shall be relieved of any obligation or liability arising
from any prior breach by such party of any provision of this Agreement; and (b)
the parties shall, in all events, remain bound by and continue to be subject to
the provisions set forth in Section 9.
SECTION 9 - INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement shall survive the Closing
of this Agreement, except that any party to whom a representation or warranty
has been made in this Agreement shall be deemed to have waived any
misrepresentation or breach of representation or warranty of which such party
had knowledge prior to Closing. Any party learning of a misrepresentation or
breach of representation or warranty under this Agreement shall immediately give
written notice thereof to all other parties to this Agreement. The
representations and warranties in this Agreement shall terminate one year from
the Closing Date, and such representations or warranties shall thereafter be
without force or effect, except (i) any claim with respect to which notice has
been given to the party to be charged prior to such expiration date and (ii)
fraud claims and claims under Section 2.7, which shall survive for the statute
of limitations applicable to claims based on such matters.
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9.2 SELLER'S INDEMNIFICATION. Seller hereby agrees to
indemnify and hold Purchaser, its successors, and assigns harmless from and
against:
(a) Any and all claims, liabilities, and obligations
of every kind and description, contingent or otherwise, arising out of or
related to the operation of the Business prior to the close of business on the
day before the Closing Date, except for claims, liabilities, and obligations of
Seller expressly assumed by Purchaser under this Agreement or paid by insurance
maintained by Seller or Purchaser.
(b) Any and all damage or deficiency resulting from
any material misrepresentation, breach of warranty or covenant, or
nonfulfillment of any agreement on the part of Seller under this Agreement.
(c) Seller's indemnity obligations under Section 9.2
shall be subject to the following: if any claim is asserted against Purchaser
that would give rise to a claim by Purchaser against Seller for indemnification
under the provisions of this section, then Purchaser shall promptly give written
notice to Seller concerning such claim and Seller shall, at no expense to
Purchaser, defend the claim.
9.3 PURCHASER'S INDEMNIFICATION. Purchaser agrees to defend,
indemnify, and hold harmless Seller from and against:
(a) Any and all claims, liabilities, and obligations
of every kind and description arising out of or related to the operation of the
Business following Closing or arising out of Purchaser's failure to perform
obligations of Seller assumed by Purchaser pursuant to this Agreement.
(b) Any and all damage or deficiency resulting from
any material misrepresentation, breach of warranty or covenant, or
nonfulfillment of any agreement on the part of Purchaser under this Agreement.
9.4 INDEMNITY RESERVE. In order to secure Purchaser's right of
indemnity, Seller shall place 15,000 shares of Netivation Stock in escrow in
accordance with the terms of the Escrow Agreement, substantially in the form
attached hereto as Exhibit D.
SECTION 10 - MISCELLANEOUS PROVISIONS
10.1 PURCHASER'S ACCEPTANCE. Purchaser represents and
acknowledges that it has entered into this Agreement on the basis of its own
examination, personal knowledge, and opinion of the value of the Business.
Purchaser has not relied on any representations made by Seller other than those
specified in this Agreement. Purchaser further acknowledges that Seller has not
made any agreement or promise to repair or improve any of the equipment, or
other personal property being sold to Purchaser under this Agreement, and that
Purchaser takes all such property in the condition existing on the date of this
Agreement, except as otherwise provided in this Agreement.
10.2 RISK OF LOSS. The risk of loss, damage, or destruction to
any of the equipment, inventory, or other assets to be conveyed to Purchaser
under this Agreement shall be borne by Seller to the time of Closing. In the
event of such loss, damage, or destruction, Seller, to the extent reasonable,
shall replace the lost property or repair or cause to repair the damaged
property to its condition prior to the damage. If replacement, repairs, or
restorations are not completed prior to Closing, then the purchase price shall
be adjusted by an amount agreed upon by Purchaser and Seller that will be
required to complete the replacement, repair, or restoration following Closing.
If Purchaser and Seller are unable to agree, then Purchaser, at its sole option
and notwithstanding any other provision of this Agreement, upon notice to
Seller, may rescind this Agreement and declare it to be of no further force and
effect, in which event there shall be no Closing of this Agreement and all the
terms and provisions of this Agreement shall be deemed null and void.
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10.3 AGREEMENT NOT TO COMPETE. Seller, for a period of twelve
(12) months immediately following Closing, will not, directly or indirectly, at
any place in the world, engage or become interested (as owner, stockholder,
partner, director, officer, member, creditor, consultant, or employee) in any
business in competition with any portion of the Business as conducted by
Purchaser. Seller acknowledges that Purchaser is doing business throughout the
world and that the worldwide geographic scope of this covenant is reasonably
necessary to protect Purchaser's legitimate business interests.
10.4 AMENDMENT AND MODIFICATION. Subject to applicable law,
this Agreement may be amended, modified, or supplemented only by a written
agreement signed by all of the parties hereto.
10.5 NOTICES. All notices, requests, demands, and other
communications required or permitted hereunder will be in writing and will be
deemed to have been duly given when delivered by hand or two days after being
mailed by certified or registered mail, return receipt requested, with postage
prepaid:
If to Purchaser, to:
Xxxxxxxxxx.xxx, Inc.
000 Xxxxxxxxxx Xxxx, Xxxxx X
Xxxx Xxxxx, XX 00000
with copy to:
Xxxx Xxxxxxx
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields, Chtd.
000 X. Xxxxxxx Xxxx., 00xx Xxxxx
Post Xxxxxx Xxx 000
Xxxxx, XX 00000-0000
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to Seller to:
Xxxx and Xxxxxx Xxxxxx
000 Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
with copy to:
-------------------------
-------------------------
-------------------------
or to such other address as Seller furnishes to Purchaser pursuant to the above.
10.6 ATTORNEY FEES. In the event an arbitration, suit or
action is brought by any party under this Agreement to enforce any of its terms,
or in any appeal therefrom, it is agreed that the prevailing party shall be
entitled to reasonable attorneys fees to be fixed by the arbitrator, trial
court, and/or appellate court.
10.7 DISPUTE RESOLUTION. Any disputes or claims arising
hereunder shall be mediated by a mediator or mediation service in Boise, Idaho,
having no fewer than three (3) years of operating experience in Boise, Idaho. If
after good faith by the parties to this Agreement mediation is unsuccessful in
any particular, then as to any remaining controversy or claim arising out of or
relating to this Agreement or the breach thereof, same shall be settled by
arbitration in Boise, Idaho, in accordance
56
with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
10.8 PRESUMPTION. This Agreement or any section thereof shall
not be construed against any party due to the fact that said Agreement or any
section thereof was drafted by said party. Seller acknowledges that it has had
sufficient opportunity to obtain advice from its own counsel in regards to the
drafting and creation of this Agreement.
10.9 GOVERNING LAW, TIME, TITLES, PRONOUNS. This Agreement
shall be governed by and construed in accordance with the laws of the state of
Idaho. In computing any period of time pursuant to this Agreement, the day of
the act, event, or default from which the designated period of time begins to
run shall be included, unless it is a Saturday, Sunday, or a legal holiday, in
which event the period shall begin to run on the next day which is not a
Saturday, Sunday, or legal holiday. All section titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the
context nor affect the interpretation of this Agreement. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons may require. This
Agreement contains the entire understanding between and among the parties and
supersedes any prior understandings and agreements among them respecting the
subject matter of this Agreement. Any amendments to this Agreement must be in
writing and signed by the party against whom enforcement of that amendment is
sought. This Agreement shall be binding upon the heirs, executors,
administrators, successors, and assigns of the parties hereto.
10.10 FURTHER ACTION, COUNTERPARTS, SAVINGS CLAUSE. The
parties hereto shall execute and deliver all documents, provide all information,
and take or forbear from all such action as may be necessary or appropriate to
achieve the purpose of the Agreement. This Agreement may be executed in several
counterparts and transmitted by facsimile and all so executed shall constitute
one Agreement, binding on all the parties hereto even though all the parties are
not signatories to the original or the same counterpart. Nothing herein shall be
construed to be to the benefit of any third party, nor is it intended that any
provision shall be for the benefit of any third party. If any provision of this
Agreement, or the application of such provision to any person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those as to which it is
held invalid, shall not be affected thereby.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement the date and year set forth above.
PURCHASER:
XXXXXXXXXX.XXX, INC., a Delaware
corporation
By
---------------------------------------
Xxxxxxx X. Xxxxxx, President and
Chief Executive Officer
SELLER:
XXXX AND XXXXXX XXXXXX, husband and wife
-------------------------------------------
Xxxx Xxxxxx
-------------------------------------------
Xxxxxx Xxxxxx
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