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EXHIBIT 10.1
AGREEMENT FOR PURCHASE OF ASSETS
THIS AGREEMENT made and entered into this 29 day of February, 2000, but
effective as of January 1, 2000 (hereinafter the "Effective Date"), by and
between LURO ASSOCIATES, L.L.C., a Michigan limited liability company (ID No.
B40-350) d/b/a XxxxxxXxx.xxx of 00000 Xxxxxxxx Xx., Xxxxxxxx, XX 00000
(hereinafter the "Seller") and Xxxx.Xxx, Inc., a Nevada corporation with
principal offices at 000 Xxxx Xxxx, Xxxxx, XX 00000 (hereinafter "Purchaser").
WITNESSETH:
WHEREAS, Seller has been engaged in developing, selling and servicing
proprietary and other software as well as selling related hardware products
primarily to the nursing home and home health industry, including certain
proprietary software products which it has developed (hereinafter the
"Software"); and
WHEREAS, Purchaser is a corporation that is in the electronic
commerce business with a specialty in medical technologies; and
WHEREAS, Seller wishes to gain the advantage of joining its products,
existing customer base, technology and know-how with that of the Purchaser so
as to enhance the marketability of Seller's existing and future products
through utilizing electronic commerce and the expertise of Purchase in that
industry; and
WHEREAS, Purchaser wishes to gain the benefit of the products and
technology of the Seller to add to its array of available products and services
offered through electronic commerce; and
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WHEREAS, both parties believe the combining of their specialties,
products and know-how will have a synergistic effect on both of their
businesses and accordingly wish to exploit that opportunity by joining the two
(2) companies; and
WHEREAS, the parties have negotiated various terms and conditions in
this regard which they wish to evidence by this writing.
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained and other good and valuable consideration, the parties and each of
them do for themselves, their respective heirs, successors and proper assigns,
covenant and agree as follows:
1. SALE OF ASSETS AND SELLER'S PERFORMANCE. In consideration of
the Purchase Price as described under Paragraph 2 below, and the Purchaser's
employment of Xxxxxxx X. Xxxxx a/k/a Xxxxxxx X. Xxxxx, (hereinafter "Xxxxx")
under the terms of the employment contract described in Paragraph 2 and other
consideration, at or before the Closing, Seller shall render the following
performances:
a. Seller shall assign, transfer and convey to the Purchaser all
of Seller's right, title and interest in and to the assets more
particularly described in the attached Schedule of Acquired Assets,
marked Schedule 1a and incorporated herein by reference (hereinafter
the "Acquired Assets").
b. Seller shall assign to Purchaser all of its software contracts
and licenses with its customers as more particularly described in the
attached Schedule of Customer Contracts, marked Schedule 1b and
incorporated herein by reference (hereinafter the "Customer Contracts")
so as to allow the Purchaser to stand in the position of the Seller
with regard to all of such software licenses.
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c. Seller shall assign to Purchaser all of its leases and licenses with
its suppliers and software licensors, including, but not limited to
those leases and licenses described in the Schedule of Leases and
Licenses attached hereto, marked Schedule 1c and incorporated herein by
reference (hereinafter the "Leases and Licenses"). To the extent that
the consent of the Lessor or the Licensor is required for such
assignment, Seller shall use its best efforts to obtain such consents.
It is the intention of the parties that the Seller shall transfer to
the Purchaser the rights under all Leases and Licenses to the full
extent enjoyed by the Seller.
d. Seller shall terminate its employment of the employees of Seller so
as to allow Xxxxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxx Xxxxxx to become
employees of the Purchaser. Seller shall be responsible for the
payment of all salary, vacation pay and fringe benefits for said
employees through December 31, 1999, without claim against the
Purchaser for the same. When hired by the Purchaser, said employees
shall be new employees of the Purchaser effective as of the date of
their hire under the terms and conditions established between the
Purchaser and each such employee in his or her respective Employment
Contract or letter of employment, as the case may be.
e. Seller shall deliver to Purchaser all of its customer files for
those customers whose licenses and contracts are being assigned to
Purchaser hereunder.
f. It is understood and agreed by the parties that Seller is retaining
and not selling to Purchaser its cash, accounts receivable, accounts
payable or the limited personal effects of the employees of Seller
(hereinafter referred to as the "Retained Assets"). It is also
contemplated that Seller may act as an agent for the Purchaser from
and after January 1, 2000 for the collection of annual maintenance fees
and other revenue attributable to the
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operation of the business being sold hereunder until the date of the Closing.
Seller agrees to keep such revenue in a separate account and to deliver the
same to the Purchaser at the Closing.
2. PURCHASE PRICE AND PURCHASER'S PERFORMANCE. As consideration for
Seller's sale to Purchaser of the Acquired Assets, Purchaser does hereby agree
to pay to Seller at the Closing and perform other acts as part of the following
consideration under the terms hereinafter stated:
a. At the Closing as hereinafter described, Purchaser shall deliver to
Seller One Hundred Forty-five Thousand (145,000) shares of its non-callable,
non-assessable voting common stock (hereinafter the "Stock") as follows:
(1) The Stock shall be issued in two (2) separate stock
certificates, one (1) issued in the name of Xxxxxx X. Xxxxxxxxxxx for
One Hundred Thousand (100,000) shares and the other issued in the name
of Xxxxxxx X. Xxxxx a/k/a Xxxxxxx X. Xxxxx for Forty-five Thousand
(45,000) shares, respectively.
(2) Each share of the Stock delivered to Seller hereunder shall be
duly authorized and so issued so as to establish the named certificate
holder as the proper owner of said shares on the stock transfer records
of the Purchaser.
(3) For purposes of this sale, the Stock is valued at Two and
00/100 ($2.00) Dollars per share, which the parties have established as
the fair market value of the shares as of the Effective Date of this
Agreement.
(4) The Stock shall be similar to the other shares of the
Purchaser held by its executive employees and shall be free of
encumbrance or restrictions except for
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those restrictions which are required by law and which limit the
period within which said shares may be sold to third parties.
b. In addition, Purchaser does hereby agree to assume and perform all
obligations of the Seller to Seller's customers who are utilizing the
Software under privately paid licenses of the Software, including, but not
limited to, providing ongoing service, consulting and maintenance to such
customers effective as of January 1, 2000. Purchaser and Seller confirm and
agree that, except as provided in Xxxxxxxxx 0x (0), Xxxxxxxxx is entitled
to xxxx, collect and retain the full amount of 2000 and subsequent annual
maintenance fees from each of Seller's customers who are licensed to
utilize the Software, in accordance with the terms of their respective
license contracts.
(1) In addition, Seller has sold five (5) packages of software,
consulting services and annual maintenance fees which have not been
fully delivered as of the Effective Date, but a portion of which sale
proceeds in each instance belongs to the Seller. The completion of the
installation of some of these packages, the consulting service and
annual maintenance will occur after the Effective Date. Accordingly,
the parties have worked out an allocation of the proceeds of these
sales between Seller and Purchaser as is more particularly set forth in
the attached Schedule of Allocated Purchases, marked Schedule 2b (1)
and incorporated herein by reference.
(2) Seller has previously sold consulting and training services to
its various customers. Most of these services have been fully performed
prior to the Effective Date under the terms of the contracts. However,
in a few instances (other than the five (5) customers listed in
Schedule 2b (1)), there are remaining
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consulting services and training classes to which several customers are entitled
and which were not fully performed by Seller prior to the Effective Date. These
sold but unperformed consulting services and class training are more
particularly identified on the Schedule of Unperformed Services attached hereto,
marked Schedule 2 b (2) and incorporated herein by reference. The Purchaser
agrees to perform those unperformed services and class training which Seller
sold, without additional charge to the customers as part of the consideration
for Seller's assignment to Purchaser of its customer base and the goodwill
associated with it. In addition, there were certain consulting services and
class training which were sold to customers by previous companies, not the
Seller. While Seller is not directly under contract to perform these services,
it has done so without charge as an action to xxxxxx and maintain goodwill. A
list of these unperformed services is also included on Schedule 2 b (2).
Purchaser should make its own decision as to the performance of the services
purchased from Seller's predecessors.
(3) As additional consideration for the purchase of the Acquired Assets,
Purchaser shall assume and perform all of Seller's obligations under the Leases
and Licenses identified in Schedule 1c.
(4) Except as expressly stated in the foregoing provisions of the Agreement,
Purchaser shall not be obligated to perform any service, provide any product, or
refund any monies to any of Seller's customers on account of any events which
occurred prior to the Effective Date of this Agreement, even though such
customer may have paid for such item or may have a claim arising out of
activities prior to the date of this Agreement. It is further agreed, however,
that
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should Purchaser decide to render service, correct problems or
otherwise accommodate a former customer of Seller, such accommodation
shall be for the purpose of Purchaser preserving the goodwill of
that customer and Purchaser shall do so at its own risk and expense
and without the right of recompense or reimbursement from Seller,
except as may otherwise be expressly provided under this Agreement.
(5) The parties acknowledge that some of the Software being utilized
by customers is supplied under license from the manufacturer of that
software (for example MAS 90) and Seller is assigning its position in
such licenses as part of the Acquired Assets. In such instances, the
Purchaser shall be liable to the respective third party suppliers of
such licensed software, from and after the Effective Date, for any
transfer fees and the annual license fee for such software utilized as
part of the Software licensed to customers. These obligations have
been taken into account by Seller in establishing its annual
maintenance fees paid by its customers.
c. Seller shall employ Xxxxxxx Xxxxx as of the Effective Date under the
terms and conditions set forth in the employment contract attached
hereto, marked Schedule 2c and incorporated herein by reference
(hereinafter referred to as the "Employment Contract").
3. NO ASSUMPTION OF LIABILITIES. Except as otherwise expressly provided
under Paragraph 2 above, Purchaser does not assume nor in any manner agree to
pay or perform any of Seller's liabilities or obligations to any third party
whatsoever.
4. WARRANTIES AND REPRESENTATIONS OF SELLER. By its signature below,
Seller does hereby warrant and represent as follows:
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a. The Seller is a duly organized Michigan limited liability
company in good standing and the parties signing on behalf of the
Seller have full authority to enter into this Agreement so as to fully
bind the Seller to the terms and conditions of this Agreement.
b. Seller has full title to all of the Acquired Assets being sold
to Purchaser and that such assets are free and clear of any and all
encumbrances except:
(1) The security interest in favor of Xxxxxxx Xxxxx
which will be waived or discharged at the Closing.
(2) Various obligations owing to the customers under the
customer contracts and licenses, obligations owing to the
licensors of portions of the Software and subject to obtaining
the consent of the licensors and lessors to the assignment of
Seller's rights in connection with the Leases and Licenses.
(3) Those Lessor interests in tangible personal property
under lease which apply to the personal property under the
Leases listed in Schedule 1c, which property does not appear
on Schedule 1a.
c. Seller is not aware of any litigation, proceeding or claim
which is pending or threatened against the Seller or the Acquired
Assets which would prevent, interfere with or encumber the Purchaser's
ability to acquire or utilize the Acquired Assets as part of
Purchaser's business, except for those obligations owed to customers
under the Customer Contracts and as identified in Schedule 2 b (2) and
to third parties under the Leases and Licenses.
d. The Software is useable, functioning and working software for
the purposes intended, except for certain software upgrades and
modifications as are typically required
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of similar types of software to meet changing interface requirements with
various new and developing hardware of the customers, changing governmental
regulations, individual state requirements and specific requested customer
tasks and requested interfaces with other software utilized by the customers.
Some customer requests are being made and others are being declined. To the
extent that any of the Software utilizes proprietary software products of
manufacturers other than the Seller, Seller has and will assign to Purchaser,
appropriate licenses for the use of such proprietary software and the
sublicense of the same as part of the license of the Software to customers.
e. Seller has paid all taxes which it owed on a timely basis, or if late
within the time allowed with penalty and interest, and as to all such late
payments, if any, the accrued interest and penalty, if any, has been fully
paid. Exceptions to the foregoing representation are Seller's liability for
those taxes which are currently due as of the Effective Date and as to such
taxes, the same will be fully paid in a timely manner, notwithstanding the fact
that there may be additional penalties due for Seller's failure to pay
appropriate estimated taxes for the current year. There are no outstanding
taxes owing by the Seller which would become the liability of Purchaser by
operation of the law of the State of Michigan or the United States, except for
those liabilities which might arise in the State of Michigan as a result of the
Purchaser being a deemed "Successor Employer" to the Seller under the Michigan
Employment Security Act (unemployment tax) in order to apprise Purchaser of any
potential liability for Seller's unpaid unemployment contributions. Seller
shall provide to Purchaser at least two (2) days prior to the Closing its
"Business Transferor's Notice to Transferee of Unemployment Tax Liability and
Rate" (Form MESC 1027) as required under Section 15(g) (MCL 421.15
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(g)) and will file the "Report of Employer" (Form MESC 1712) as required
under Section 24 (MCL 421.24) of the Act.
f. Neither Seller's execution or performance of this Agreement, nor
Xxxxxxx Xxxxx'x execution or performance of the Employment Contract
violates any contract, agreement, law or restriction which would prevent
the Seller or Xxxxxxx Xxxxx from performing their respective obligations
under this Agreement or the Employment Contract.
g. Seller has no United States registration of any tradename, trademark,
logo or other identity names or marks, nor has Seller obtained a U.S.
copyright registration for any of its Software. Seller has registered the
name "Xxxxxxxxx.xxx" with the Michigan Department of Consumer and Industry
Services as an assumed name and claims commonlaw trademark rights in such
name and has a registered internet domain for that name. Seller also claims
commonlaw trade xxxx rights as to all of its product names.
h. Neither Seller nor any agent of Seller has made any arrangement with
any broker, sales person or other third party which would entitled such
person to any fee, commission or compensation as a result of having
arranged the sale contemplated by this Agreement nor as a result of
introducing the parties to each other.
5. WARRANTIES AND REPRESENTATIONS OF PURCHASER. By its signature below,
Purchaser does hereby warrant and represent as follows:
a. The Purchaser is a duly organized corporation in good standing under
the laws of the State of Nevada and fully qualified to do business in the
State of Texas.
b. The parties signing this Agreement and the other documents on behalf
of the Purchaser have been fully authorized to do so by the Purchaser's
Board of Directors and
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have been authorized to enter into this Agreement so as to fully bind the
Purchaser to the terms and conditions of this Agreement.
c. The Stock being delivered to Seller hereunder is duly authorized and
issued as non-callable, non-assessable voting common stock of the
Purchaser.
d. The Stock shall be similar to the other shares of the Purchaser held by
its executive employees and shall be free of encumbrance or restrictions
except for those restrictions which are required by law and which limit the
period within which said shares may be sold to third parties.
e. Neither Purchaser's execution or performance of this Agreement, nor its
execution or performance of the Employment Contract violates any contract,
agreement, law or restriction which would prevent the Purchaser from
performing its obligations under this Agreement or the Employment Contract.
g. Neither Purchaser nor any agent of Purchaser has made any arrangement
with any broker, sales person or other third party which would entitled
such person to any fee, commission or compensation as a result of having
arranged the sale contemplated by this Agreement nor as a result of
introducing the parties to each other.
6. MUTUAL DISCLAIMER OF RELIANCE ON FINANCIAL INFORMATION. The parties to
this Agreement mutually acknowledge that the sale contemplated herein does not
rely upon the financial condition of the respective parties, but is based upon
the future opportunity which is presented by the combining of the business
goodwill and products of each party in order to benefit from the anticipated
market response to the combined products and capabilities of the parties.
Accordingly, each party does hereby expressly disclaim any right or claim which
it may have against the other, or against any third party in connection with
any financial information.
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tax return, financial statement or projection supplied to it by the party. In
addition, each party has been given a reasonable opportunity to investigate the
products of the other and was sufficiently satisfied with those products to
freely choose to combine forces for their mutual benefit in approaching the
market in the future. For this reason, the parties acknowledge that they
knowingly have not performed in depth investigations of the current capabilities
of the other and is not relying on such existing capabilities as the basis for
entering into this Agreement.
7. SUPPORTING DOCUMENTATION. As evidence of the sale of the
Acquired Assets, Seller shall execute and deliver to Purchaser at Closing the
following documents:
a. A warranty xxxx of sale for all of Acquired Assets except for
those for which Seller is expressly stated to own less than full title
(hereinafter referred to as the "Xxxx of Sale").
b. An assignment (subject to approval by the Lessor) in a form
acceptable to Purchaser, of Seller's interest in that certain Lease for
the premises located at 00000 Xxxxxxxx Xx., Xxxxxxxx, XX 00000 calling
for the assignment to Purchaser of a security deposit in the amount of
$1,500.00 (hereinafter referred to as the "Assignment of Lease").
c. An assignment (subject to approval by the Licensor), in a form
acceptable to Purchaser, of Seller's interest in all licenses and other
contracts which Seller has with manufactures or other suppliers of
software utilized by Seller in the Software (hereinafter referred to as
the "Assignment of Licenses").
d. An assignment in a form acceptable to Purchaser, of Seller's
interest in all customer contracts for current customers of Seller
(hereinafter referred to as the "Assignment of Customer Contracts").
The Assignment of Customer Contracts shall
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exclude Purchaser's right to that portion of the proceeds of the five (5)
contracts described in Schedule 2b(1).
e. Any other documentation reasonably requested by Purchaser in connection
with the consummation of the sale under this Agreement.
f. Seller shall deliver to Purchaser executable copies of the Software as
well as all source codes for all of the Software proprietary to Seller. In
addition, Seller shall deliver to Purchaser all customer files, service
files, and other literature and information which is reasonably requested
by Purchaser in connection with the customers for whom obligations have
been assumed hereunder and in connection with the Software.
8. CLOSING. The closing of the transaction contemplated by this Agreement
(referred to herein as the "Closing") shall take place at the offices of
Purchaser's Attorney in Austin, Texas, on such date as Buyer and Seller may
mutually determine, but in any event no later than February 29, 2000. The
Parties acknowledge and agree that regardless of the date of the Closing, once
closed, the transaction contemplated by this Agreement shall be deemed to be
effective as of the Effective Date.
a. At the Closing, Seller shall deliver to Purchaser the Xxxx of Sale, the
Assignment of Lease, the Assignment of Licenses, the Assignment of Customer
Contracts and the remainder of the documents referred to in Paragraph 6f
together with physical possession of the Acquired Assets which have not
previously been delivered to Purchaser. (Many of the files, customer
records, literature, etc. will be present at the Premises, occupancy of
which is being delivered to the Purchaser at the Closing.)
b. At the Closing, the Purchaser shall deliver to Seller the Stock, the
fully executed Assignment of Customer Contracts, Assignment of Lease,
Assignment of Licenses, Employment Contract, Certificate of Good Corporate
Standing issued by the State of Nevada and Certified
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Resolutions of the Board of Directors of Purchaser authorizing the purchase of
the Acquired Assets and the President's action in entering this Agreement and
performing the same.
c. At the Closing, the parties will prorate all periodic charges for
which Seller has paid or for which Seller has some liability in accordance with
the following agreements:
(1) All personal property taxes for which payment is first due in
the ordinary course prior to the Effective Date (the 1999 Personal
Property Tax) shall be paid by Seller with no reimbursement from
Purchaser. All personal property taxes for which payment is first due
in the ordinary course after the Effective Date (the 2000 Personal
Property Tax) shall be paid by Purchaser with no reimbursement from
Seller.
(2) All contractual or recurring payments for goods or services
such as rent, equipment leases, monthly license fees and the like,
shall be prorated between the parties to the Effective Date with the
Seller being liable for that portion of the covered period occurring
prior to the Effective Date and Purchaser being liable for that portion
of the covered period occurring after the Effective Date.
(3) All salary and benefits for the former employees of Seller who
are employed by the Purchaser shall be the responsibility of the
Purchaser. All salary and benefits owing to such employees on account
of their services to the Seller prior to the Effective Date shall be
the responsibility of the Seller.
(4) All monies collected by the Seller from customers for the 2000
annual maintenance fees shall be remitted to the Purchaser at the
Closing (except for that portion of such fees for the five (5)
customers described on Schedule 2b(1) which are allocated to the
Seller).
(5) Purchaser shall reimburse Seller for all security deposits and
other deposits which Seller has made on the leased premises, leased
equipment or on utilities or telephone services being taken over by
Purchaser.
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d. Each party shall also provide to the other at the Closing, all
documents reasonably requested by the attorney for the requesting party in order
to carry out the intentions of this Agreement.
9. Confidentiality and Non-Disclosure. The parties mutually acknowledge
that part of the value of the Software and the goodwill of Seller's customers
and business is the confidential nature of certain information known by the
Seller and being transferred to the Purchaser as part of the sale contemplated
under this Agreement. For purposes of this Agreement, "Confidential Information"
shall mean the source code of Seller's proprietary products, the manner in which
Seller's proprietary software has been integrated with third party software
licensed to Seller, prior history of modifications, corrections and failures of
Seller's proprietary software as well as specific information about how Seller's
customers are utilizing Seller's products, but only to the extent that said
information is not generally known in the industry. In order to preserve for
Purchaser the benefit of the Acquired Assets it is agreed by Seller and its two
(2) Members that
a. They shall treat and hold as confidential all of the Confidential
Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to
Purchaser or destroy, at the request and option of Purchaser, all
tangible embodiments and all copies of the Confidential Information
which are in their possession (except as otherwise expressly authorized
by Purchaser).
b. Unless otherwise authorized by Purchaser in writing, they shall not
disclose any Confidential Information to any third party except as may
be necessary to carry out this Agreement or to perform their
responsibilities for the benefit of Purchaser.
c. In the event that Seller or any one of its Members is requested or
required by oral question or written request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process to disclose any Confidential
Information, they shall notify Purchaser as promptly as possible of the
request or requirements so that Purchaser may seek an appropriate
protective order. If, in the absence of a protective order or the
receipt of
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a waiver from Purchaser, Seller is, on the advice of counsel, compelled
to disclose any Confidential Information to any tribunal or party to
the proceeding and could be held liable for contempt for failure to
disclose, then Seller may disclose the Confidential Information to the
tribunal or party. If possible Seller shall use reasonable efforts to
obtain, at the request and expense of Purchaser, an order or other
assurance that confidential treatment will be accorded to such portion
of the Confidential Information required to be disclosed. The
provisions of this Paragraph 8c shall not apply to any Confidential
Information which is generally available to the public immediately
prior to the time of disclosure.
10. COVENANT NOT TO COMPETE. In consideration of the purchase price and
performance by Purchaser, Seller and its two (2) Members agree that for a
period of two (2) years from and after the date of this Agreement, without
the written permission of the Purchaser, neither they nor any one (1) of
them:
a. shall engage in any activities which are directly competitive with
the products and business acquired by the Purchaser from Seller, except
that Xxxxx shall be entitled to engage in competitive activities after
the termination of his employment with Purchaser to the extent
permitted under the Employment Contract, even if such activities are
within the two (2) year period.
b. shall directly or indirectly solicit any customer of Purchaser for
the sale of any product or service which is competitive with those
products and services acquired by the Purchaser hereunder; except that
Xxxxx shall be entitled to engage in such solicitation of customers
after six (6) months following the termination of his employment with
Purchaser to the extent permitted under the Employment Contract, even
if such activity is within the two (2) year period.
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c. shall directly or indirectly solicit any employee of the Purchaser in
order to offer employment to such employee while he or she is employed by
the Purchaser nor shall they encourage such employee to leave his or her
employment with the Purchaser; provided, however, that this provision shall
not prevent the solicitation or employment of any former employee of the
Purchaser after he or she has terminated his or her employment with the
Purchaser.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Parties in this Agreement shall survive the Closing and
shall remain and continue in full force and effect thereafter subject to any
applicable contractual or statutory limitations.
12. INDEMNIFICATION PROVISIONS FOR BENEFIT OF PURCHASER. In the event that
Seller breaches this Agreement in any material respect or in the event that any
of Seller's representations and warranties stated in Paragraph 4 of this
Agreement are false in any material respect, then Purchaser shall have the right
to claim reimbursement for the loss it suffers as a result of such breach or
failure of representation or warranty. In order to have a right of reimbursement
under such circumstances, Purchaser must provide written notice of its claim to
Seller, which notice shall state in detail the specific breach or failure which
is claimed and the specific facts supporting such claim. Seller shall have
thirty (30) days from and after receipt of such written notice to investigate
the claim and to correct the breach, if possible. If no correction is possible,
Seller shall notify Purchaser within the thirty (30) day period whether it
accepts or denies the claim. If Seller fails to respond within the thirty (30)
day period, the claim will be deemed denied.
a. Since the consideration "paid" by the Purchaser for the Acquired Assets
is the Stock, the only medium in which Seller shall be obligated to "pay"
Purchaser for any losses is the Stock given as the consideration under this
Agreement; provided, however, that only One Hundred Twenty Thousand
(120,000) shares of the Stock shall be subject to such indemnification
payment. To the extent that One Hundred Twenty Thousand (120,000) shares of
the Stock is
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insufficient to fully compensate Purchaser for the loss which it
suffers, Seller shall be without a remedy for such loss.
b. Notwithstanding any other provisions of this Agreement, Purchaser
may not recover on any claim for any breach of this Agreement or for
any failure of any representation or warranty if such claim is not
presented to Seller within eighteen (18) months of the Closing, but as
to a claim for failure of the warranty contained in Paragraph 4d, such
claim must be made within six (6) months of the Closing. Any claim not
made within the time provided in this Paragraph 12, regardless of
Purchaser's discovery of the breach or failure of representation within
that time, is forever barred.
c. Neither Seller nor its Members shall have any liability to
Purchaser for Seller's breaches of the Agreement unless and until the
aggregate loss to Purchaser from such breaches and failures exceeds
Fifty Thousand and 00/100 ($50,000.00) Dollars and then Seller shall
only be liable to the extent of such loss in excess of Fifty Thousand
and 00/100 ($50,000.00) Dollars.
13. INDEMNIFICATION PROVISIONS FOR BENEFIT OF SELLER. In the
event that Purchaser breaches this Agreement in any material respect or in the
event that any of Purchaser's representations and warranties stated in
Paragraph 5 of this Agreement are false in any material respect, then Seller
shall have the right to require Purchaser to correct the defect, or in the
alternative, at Purchaser's option, to reimburse Seller for the loss it has
suffered as a result of such breach or failure of representation or warranty.
In order to have a right to its claim under such circumstances, Seller must
provide written notice of its claim to Purchaser, which notice shall state in
detail the specific breach or failure which is claimed and the specific facts
supporting such claim. Purchaser shall have thirty (30) days from and after
receipt of such written notice to investigate the claim and to correct the
breach, if possible. Purchaser shall notify Seller within the thirty (30) day
period whether it accepts or denies the claim and what action will be taken to
correct the breach. If Purchaser fails to respond within the thirty (30) day
period, the claim will be deemed denied.
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a. Since the consideration "paid" by the Purchaser for the Acquired
Assets is the Stock, the Seller shall be entitled to pursue its legal rights
to receive stock of the Purchaser in the form as represented under this
Agreement. To the extent that Purchaser is unable to deliver the proper stock
required, Seller shall be entitle to damages in the amount of the lost value
of the Stock which Purchaser was to have given as the consideration under this
Agreement. In the event that the breach is the failure of the Purchaser to
perform the obligations which it assumed under this Agreement and the related
documents, Seller shall be entitled to receive from Purchaser any and all money
which Seller is required to pay as a result of Purchaser's failure to perform
the assumed obligations.
b. Notwithstanding any other provisions of this Agreement, Seller may
not recover on any claim for any breach of this Agreement or for any failure of
any representation or warranty if such claim is not presented to Purchaser
within eighteen (18) months of the Closing. Any claim not made within the time
provided in this Paragraph 13, regardless of Seller's discovery of the breach or
failure of representation within that time, is forever barred.
14. MISCELLANEOUS PROVISIONS.
(a) ENTIRE AGREEMENT; MODIFICATION. All representations and
statements previously made by either party, as well as all prior memoranda and
agreements between the parties are superceded by this Agreement and the
attached documents and Schedules incorporated by reference, which constitute
the entire agreement between the parties. No amendment or modification of, nor
addition to, this Agreement shall be valid or binding unless the same shall be
in writing and signed by both parties.
(b) WAIVER. No waiver by a party of any default or breach by the
other party to this Agreement, nor any failure to pursue a claim which a party
has against the other,
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shall be deemed to be a waiver of any other default or breach under this
Agreement, except as otherwise specifically stated in the Agreement.
(c) SEVERABILITY. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall, to any extent, be held
invalid or unenforceable by any court of competent jurisdiction or legislative
act, then the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby, and each other term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
(d) NOTICES. All notices to be provided hereunder shall be deemed to
have been duly given if the same shall be in writing and delivered personally,
by private express company or by certified or registered mail, return receipt
requested, to the party designated to receive such notice at the addresses set
forth above. Any party may change the address to which notices are to be
addressed by giving written notice of such change in the manner stated above
(e) HEADINGS. The Section headings used throughout this Agreement are
for convenience and reference only, and the words contained therein shall in
no way be held to explain, modify, amplify, or aid in the interpretation,
construction, or meaning of the provisions of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which shall constitute one and the
same instrument.
(g) FURTHER ASSURANCES. The parties hereto agree to cooperate with each
other in good faith to achieve the purposes of this Agreement and, in connection
therewith, to
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take such further actions and execute such further documents as may be
reasonably requested and reasonably required by either party to carry out the
purposes of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
WITNESS: SELLER:
LURO ASSOCIATES, L.L.C., a Michigan
limited liability company
/s/ [ILLEGIBLE] By: /s/ XXXXXXX X. XXXXX
-------------------------- ---------------------------------
Xxxxxxx X. Xxxxx, Member
/s/ XXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXXXXXXXX
-------------------------- ---------------------------------
Xxxxxx X. Xxxxxxxxxxx, Member
PURCHASER:
XXXX.XXX, INC. a Nevada corporation
--------------------------
/s/ [ILLEGIBLE] By: /s/ XXXXXX X. XXX XXXX
-------------------------- ---------------------------------
Xxxxxx X. Xxx Xxxx, President
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