ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement') is made effective as of
March 28, 2003, by and between AMERICAN INSTITUTE OF TECHNOLOGY, INC., a New
York corporation ("Purchaser" or "Buyer"), and XXXXXXXX XXX ("Seller").
This Agreement contemplates a transaction in which the Purchaser will
purchase assets (the "Assets") (excluding all liabilities of Seller unless
otherwise agreed by the parties) from Seller in return for shares of common
stock of Purchaser.
NOW, THEREFORE, in consideration of the premises and the mutual promises
made herein, and in consideration of the representations, warranties, and
covenants contained herein, the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
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meanings indicated:
1.01. Assets. The Assets to be sold and transferred by Seller to Purchaser
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pursuant to this Agreement consist of the Assets more specifically detailed
in Schedule 1.01 of this Agreement.
1.02. Closing. The consummation of the transactions contemplated by this
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Agreement.
1.03. Liabilities. Those liabilities of Seller to be assumed by Purchaser
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pursuant to this Agreement, which consist of those liabilities of Seller
specifically disclosed on Schedule 1.03. Purchaser shall not assume any
liabilities, contingent or certain, of Seller, unless disclosed in the
manner provided in this paragraph 1.03. In addition, Purchaser is not
assuming (i) any expenses, liabilities, or obligations of Seller arising
out of the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby (nor may Seller pay any of such
expenses out of the Assets), (ii) any liabilities or obligations of Seller
relating to taxes attributable to the transactions contemplated hereby or
the conduct of Seller's Business, except for any accrued sales tax
attributable to this asset acquisition, or (iii) any obligation of Seller
to pay a fee to any agent, broker, or finder.
1.04. Material Adverse Effect. Any change in the financial condition or
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operation of the business that would materially effect Seller's Business
adversely, including, but not limited to, material changes to management,
business conditions, or financial standing.
2. Agreement to Sell and Purchase. Subject to the terms and conditions of
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this Agreement, Purchaser agrees to purchase, and Seller agrees to sell,
transfer, convey, assign, and deliver to Purchaser at Closing, the Assets,
free and clear of all liabilities, liens, conditions, and encumbrances,
except those liabilities listed in Schedule 1.03.
2.01. The Closing. The Closing of the transactions contemplated by this
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Agreement shall be effective upon the execution date of this Agreement.
3. Purchase Price. The purchase price in consideration of the sale,
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transfer, conveyance, assignment, and delivery of the Assets to Purchaser,
subject to the terms and conditions of this Agreement, shall be 150 shares
of Purchaser's common stock.
3.01. Consideration. The consideration of 150 shares of Purchaser's common
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stock issuable to the order of Seller shall constitute all the
consideration to be paid by Purchaser in connection with the transactions
contemplated by this Agreement.
4. Assumption of Liabilities. In connection with the purchase of the Assets
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hereunder, Purchaser hereby specifically assumes only those Liabilities of
Seller specifically disclosed on Schedule 1.03. Purchaser shall not assume
any liabilities, contingent or certain, of Seller except pursuant to the
provisions of Section 1.03. and this Section 4 of this Agreement.
5. Representations and Warranties of Seller. Seller hereby agrees,
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represents, and warrants to Purchaser, on the date of this Agreement and on
the Closing Date, as follows:
5.01. Intellectual Property. Seller hereby agrees, represents, and warrants
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to Purchaser, on the date of this Agreement as follows:
5.01.01. Seller is the beneficial owner of the Assets and has good and
marketable title to and the absolute right to sell, assign, and
transfer the Assets to Purchaser, free and clear of any interests,
security interest, claims, liens, pledges, penalties, charges,
encumbrances, buy-sell agreements, or other rights of any party
whatsoever of every kind and character except those items listed in
Schedule 1.03. Upon delivery of and payment of the purchase price in
accordance with this Agreement, good and marketable title thereto
shall be delivered to Purchaser, free and clear of any interest,
security interest, claims, liens, pledges, penalties, charges,
encumbrances, buy-sell agreements, or other rights of any party
whatsoever.
5.01.02. Seller has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and Seller has never received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including
any claim that Seller must license or refrain from using any
Intellectual Property rights of any third party). No third party has
interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of Seller.
5.01.03. Schedule 5.01.03 identifies each patent, trademark,
registration or copyright registration issued to Seller with respect
to any of its Intellectual Property, identifies each pending patent
application or application for registration which Seller has made with
respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which Seller has granted to
any third party with respect to any of its Intellectual Property
(together with any exceptions). Seller has delivered to the Buyer
correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to
date) and has made available to the Buyer correct and complete copies
of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. Schedule 5.01.03 also
identifies each trade name, trademark or service xxxx, whether
registered or unregistered, used by Seller in connection with any of
its businesses. With respect to each item of Intellectual Property
required to be identified in Schedule 5.01.03:
(a) Seller solely possesses all rights, title and interest in and
to the assets, free and clear of any security interest, license,
or other restriction;
(b) the Assets are not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(c) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or threatened which
challenges the legality, validity, enforceability, use, or
ownership of the Assets;
(d) Seller has never agreed to indemnify any person or persons
for or against any interference, cancellation, infringement,
misappropriation, or other conflict with respect to the Assets.
(e) Seller does hereby agree to sign and otherwise execute any
further documents or instruments which may be necessary, lawful
and proper in the preparation, filing, prosecution, issuance or
registration of any patents, trademarks or copyrights relating to
or arising from the Assets, including , without limitation, any
continuation, continuation in part, substitution, divisional,
reissue, renewal, opposition, cancellation, term extension or
enforcement action.
5.02. Due Authorization; Consent of Third Parties. Seller has the full
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right, power, legal capacity, and authority to enter into and perform
Seller's obligations under this Agreement. Seller does not need the consent
of any third parties to execute this Agreement. This Agreement constitutes
a legal and binding obligation of Seller, and is valid and enforceable
against Seller in accordance with its terms.
5.03. Absence of Liens. The Assets are free and clear of restrictions on
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any security interest or conditions to transfer or assignment, and are free
and clear of liens, pledges, charges, encumbrances, equities, claims,
conditions, or restrictions, except for any lien for current taxes not yet
due and payable.
5.04. Litigation. There is not any suit, action, arbitration, mediation or
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legal, administrative, or other proceeding or governmental investigation,
pending or, to the best of Seller's knowledge, threatened (in the form of
threats made to representatives of Seller), against or affecting Seller or
any of the Assets.
5.05. Insurance. Seller is not in default with respect to any provisions of
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any insurance policy or indemnity bond and has not failed to give any
notice or present any claim thereunder in due and timely fashion, which
failure or failures to give such notice or present such claim, individually
or in the aggregate, could materially adversely affect the Assets.
5.06. Contracts, Agreements and Instruments. Schedule 5.06 accurately and
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completely sets forth the following contracts and agreements which Seller
has furnished to Purchaser:
5.06.01. True and correct copies of all material contracts, agreements
and other instruments; and
5.06.02. True and correct written descriptions of all service,
material supply, distribution, agency, financing or other arrangements
or understandings.
Except for matters which, in the aggregate, would not have a Material
Adverse Effect or are otherwise disclosed in the Agreement, to the knowledge of
Seller, no other party to any such contract, agreement, instrument, leases, or
license is now in violation or breach of, or in default with respect to
complying with, any material provision thereof, and each such contract,
agreement, instrument, lease, or license contained in the Schedules attached
hereto is in full force and effect and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to them in accordance
with its terms.
5.07. Permits and Licenses. Seller has all permits, licenses, and other
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similar authorizations necessary for the conduct of its business as now
being conducted by it, and it is not in default in any respect under any
such permits, licenses, or authorizations. All permits, licenses, and other
similar authorizations necessary for the conduct of Seller's business as
now being conducted by them as set forth in Schedule 5.07.
5.08. No Defaults. The consummation of the transactions contemplated by
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this Agreement will not result in or constitute any of the following: (i) a
breach of any term or provision of any other agreement of Seller that will
not be waived or released at Closing; (ii) an event that will not be waived
or released at Closing and that would permit any party to terminate any
agreement or to accelerate the maturity of any indebtedness or other
obligation of Seller; (iii) the creation or imposition of any lien, charge,
or encumbrance on any of the Assets; or (iv) a violation of any law or any
rule or regulation of any administrative agency or governmental body of any
order, writ, injunction or decree of any court, administrative agency or
governmental body to which Seller is subject.
5.09. No Prohibited Payments. Neither Seller nor any employee, or agent of
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Seller, has made or authorized any payment of funds of Seller or on behalf
of Seller prohibited by law, and no funds of Seller have been set aside to
be used for any payment prohibited by law.
5.10. Completeness of Disclosure. No representation or warranty and no
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Schedule, Exhibit, or certificate prepared by Seller pursuant hereto and no
statement made or other document prepared by Seller and furnished to
Purchaser by Seller contains any untrue statement of a material fact or
omits or will omit any material fact necessary in order to make the
statements contained therein not misleading.
6. Representations and Warranties of Purchaser. Purchaser hereby agrees,
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represents, and warrants to Seller, on the date of this Agreement as
follows:
6.01. Organization. Purchaser is a corporation duly organized, validly
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existing, and in good standing under the laws of the jurisdiction of its
incorporation.
6.02. Due Authorization; Third Party Consents. Purchaser has the right,
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power, legal capacity, and authority to enter into and perform its
obligations under this Agreement and to perform its obligations hereunder.
This Agreement constitutes a legal and binding obligation of the Purchaser,
and is valid and enforceable in accordance with its terms.
7. Conditions to Obligations of Purchaser. The obligations of Purchaser
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under this Agreement are subject, at the option of Purchaser, to the
following conditions:
7.01. Closing Documents. In connection with the Closing, Seller shall
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deliver to Purchaser the following items:
7.01.01. Bills of sale, endorsements, assignments, drafts, checks and
other instruments of transfer in form and substance reasonably
satisfactory to Purchaser and its counsel in order to transfer all
right, title and interest in the Assets to Purchaser;
7.01.02. Original evidences of title or ownership of the Assets;
7.01.03. Original data and records relating to the Assets;
7.01.04. Evidence (including, if applicable, the delivery of duly
executed UCC-3 Termination Statements) reasonably satisfactory to
Purchaser and its counsel, of the satisfaction and discharge by Seller
of all existing liens, claims, and encumbrances upon or affecting the
Assets. Such other instruments and documents in form and content
reasonably satisfactory to counsel for Purchaser, as may be necessary
or appropriate to (i) effectively transfer and assign to and vest in
Purchaser good and marketable title to the Assets and/or to consummate
more effectively the transactions contemplated hereby and (ii) in
order to enable Purchaser to determine whether the conditions to
Seller's obligations under this Agreement have been met and otherwise
to carry out the provisions of this Agreement.
7.02. Contractual Consents Needed. The parties to this Agreement shall have
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obtained at or prior to the Closing all consents required for the
consummation of the transactions contemplated by this Agreement from any
party to any contract, agreement, instrument, license, arrangement, or
understanding to which any of them is a party, or to which any of their
respective businesses, properties, or assets are subject, except where the
failure would not have a Material Adverse Effect.
8. Conditions to Obligations of Seller. The obligations of Seller under
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this Agreement are subject, at the option of Seller, to the following
conditions:
8.01. Board Approval. The Board of Directors of Purchaser shall have
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approved the transactions contemplated herein.
9. Covenants and Agreements of Seller. Seller covenants and agrees to
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execute assignments to reflect the assignment of Intellectual Property.
10. Miscellaneous.
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10.01. Further Actions. At any time and from time to time, the parties
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agree, at their expense, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of
this Agreement.
10.02. Availability of Equitable Remedies. Since a breach of the provisions
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of this Agreement could not adequately be compensated by money damages, the
parties shall be entitled before, and only before, Closing, in addition to
any other right or remedy available to them, to an injunction restraining
such breach or a threatened breach and to specific performance of any such
provision of this Agreement; and in either case, no bond or other security
shall be required in connection therewith, and the parties hereby consent
to the issuance of such an injunction and to the ordering of specific
performance.
10.03. Survival. The covenants, agreements, representations, and warranties
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contained in or made pursuant to this Agreement shall survive for a period
of 15 months from the Closing date, irrespective of any investigation made
by or on behalf of any party (the "Survival Date"). No claim for
indemnification may be brought pursuant to this Section 10.03 unless
asserted by written notice as provided herein by the party claiming
indemnification on or before the Survival Date.
10.04. Modification. The Agreement and the schedules and exhibits attached
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hereto set forth the entire understanding of the parties with respect to
the subject matter hereof supersede all existing agreements among them
concerning such subject matter, and may be modified only by a written
instrument duly executed by the Parties.
10.05. Notices. Any notice or other communication required or permitted to
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be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested (or by the most nearly comparable method if
mailed from or to a location outside of the United States), or delivered
against receipt to the party to whom it is to be given at the address of
such party set forth in the preamble or signature pages to this Agreement.
Any notice or other communication given by certified mail (or by such
comparable method) shall be deemed given at the time of mailing (or
comparable act), except for a notice changing a party's address, which will
be deemed given at the time of receipt thereof.
10.06. Waiver. Any waiver by any party of a breach of any provision of this
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Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions will not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must
be in writing and, in the case of a corporate party, be authorized by a
resolution of the Board of Directors or by an officer of the waiving party.
10.07. Binding Effect. The provisions of this Agreement shall be binding
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upon and inure to the benefit of each party's respective successors,
assigns, heirs, and personal representatives.
10.08. No Third-Party Beneficiaries. This Agreement does not create, and
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shall not be construed as creating, any rights enforceable by any person
not a party to this Agreement.
10.09. Severability. If any provision of this Agreement is invalid,
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illegal, or unenforceable, the balance of this Agreement shall remain in
effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and
circumstances.
10.10. Headings. The headings of this Agreement are solely for convenience
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of reference and shall be given no effect in the construction or
interpretation of this Agreement.
10.11. Counterparts, Governing Law. This Agreement may be executed in any
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number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Texas
without giving effect to conflict of laws.
10.12. Indemnification. Seller shall indemnify, defend and hold harmless
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Purchaser and each of its officers, directors, agents and affiliates from
and against any damage, loss, claim, liability, cost or expense, including
fees and disbursements of counsel, accountants, experts and other
consultants (collectively, "Damages"), resulting from, arising out of,
based upon or occasioned by any misstatement or omission from any
representation by, or any breach of warranty, covenant or agreement of
Seller contained herein.
10.13. Indemnification Procedures. Promptly after receipt by Purchaser, on
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the one hand, or Seller on the other hand (in any such case, the
"Indemnitee"), of notice of any action, suit, proceeding, audit, claim or
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potential claim (any of which is hereinafter individually referred to as a
"Circumstance"), which could give rise to a right to indemnification for
damages pursuant to Section 10.12, the Indemnitee shall give the party who
may become obligated to provide indemnification hereunder (the
"Indemnitor") written notice describing the Circumstance in reasonable
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detail; provided, that failure of an Indemnitee to give such notice to the
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Indemnitor shall not relieve the Indemnitor from any of its indemnification
obligations hereunder unless (and then only to the extent) that the failure
to give such notice prejudices the defense of the Circumstance by the
Indemnitee. Such Indemnitor shall have the right, at its option and upon
its acknowledgment to the Indemnitee of Indemnitor's liability to indemnify
Indemnitee in respect of such asserted liability, to compromise or defend,
at its own expense and by its own counsel, any such matter involving the
asserted liability of the Indemnitee; provided, that any such compromise
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(i) shall include as a unconditional term thereof the giving by the
claimant or the plaintiff to such Indemnitee of a release from all
liability in respect of such claim and (ii) shall not result in the
imposition on the Indemnitee of any remedy other than monetary damages to
be paid in full by the Indemnitor pursuant to this Section 10.13. If any
indemnitor shall undertake to compromise or defend any such asserted
liability, it shall promptly notify the Indemnitee of its intention to do
so, and the Indemnitee agrees to, and to cause its own independent counsel
to, cooperate fully with the Indemnitor and its counsel in the compromise
of, or defense against, any such asserted liability. All reasonable
out-of-pocket costs and expenses incurred by the Indemnitee in connection
with such cooperation (including, without limitation, the reasonable fees
and expenses of the Indemnitee's own independent counsel) shall be borne by
the Indemnitor. In any event, the Indemnitee shall have the right to
participate with its own counsel (the reasonable fees and expenses of which
will be borne by Indemnitor) in the defense of such asserted liability;
provided that if with respect to a Circumstance, Indemnitor shall have
acknowledged Indemnitor's liability to indemnify Indemnitee if and to the
extent of any loss arising out of such Circumstance and Indemnitor shall be
diligently defending such matter, Indemnitor shall not be obligated to
indemnify Indemnitee for the cost of Indemnitee's participation in such
defense, including Indemnitee's attorney's fees. Under no circumstances
shall the Indemnitee compromise any such asserted liability without the
written consent of the Indemnitor (which consent shall not be unreasonably
withheld), unless the Indemnitor shall have failed or refused to undertake
the defense of any such asserted liability after a reasonable period of
time has elapsed following the notice of a Circumstance received by such
Indemnitor pursuant to this Section 10.13.
IN WITNESS WHEREOF, the parties have duly executed this Agreement effective
as of the date written in the preamble of this Agreement.
AMERICAN INSTITUTE OF TECHNOLOGY, INC.
By: /s/ Xx. Xxxxxxx Xxxxx
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Name: Xx. Xxxxxxx Xxxxx
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Title: President
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XXXXXXXX XXX
/s/ Xxxxxxxx Xxx
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SCHEDULE 1.01
List of Assets
SCHEDULE 1.03
Assumed Liabilities
SCHEDULE 5.01.03.
Intellectual Property
SCHEDULE 5.06
Material Contracts, etc.
SCHEDULE 5.07
Permits and Licenses
