EXHIBIT 10.2
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (this "Agreement") is dated as of July 30, 1999 (the
"Effective Date"), and is between Xxxx Xxxxxx, M.D., an individual resident
of California ("Xxxxxx") and Xxxxxx Xxxx, an individual resident of
California ("Xxxx") (Xxxxxx and Xxxx collectively referred to as "Sellers"),
and X.X.X.X. Software, Inc. ("Purchaser"), a Georgia corporation.
BACKGROUND
Sellers maintain and are the co-owners of a web site on the Internet at
xxxx://xxx.xxxxxxxx.xxx (the "Site").
Sellers desire to sell, assign, grant, convey, and transfer, and
Purchaser desires to purchase and acquire, the domain name and Internet
protocol address of the Site, and all of Sellers' right, title and interest
in the text, images, ideas, content, trademarks, service marks, trade names
and other copyrightable material of every kind and description found on the
Site, and certain computer hardware, software and other assets, in accordance
with the terms and conditions of this Agreement.
The Parties agree as follows:
SECTION 1
SALE OF ASSETS
1.1 Sellers hereby sell, assign, transfer, grant, convey and relinquish
exclusively to Purchaser, and Purchaser hereby purchases and acquires from
Sellers, the following (collectively, the "Assets"), free and clear of all
mortgages, liens, pledges, security interests, charges, claims, restrictions
and encumbrances of any nature whatsoever:
(a) All of Sellers' worldwide right, title, and interest in the Site
and all tangible and intangible property comprising the Site, including:
(i) The domain name and Internet protocol address of the Site;
(ii) All of Xxxxxx'x images and pictures displayed at the Site
on and prior to the Effective Date;
(iii) Title to and possession of all media that constitute all
copies and versions of the text and content of the Site, their respective
component parts, and all documentation relating thereto;
(iv) All copyright interests owned or claimed by either of the
Sellers pertaining to the content of the Site, together with any and all
other copyright interests relating thereto accruing by reason of U.S. or
international copyright conventions (collectively, the "Copyright
Interests");
(v) All right, title, and interest of Sellers in and to the
inventions, discoveries, improvements, ideas, trade secrets, know-how,
confidential information and all other intellectual property owned or
claimed by Sellers pertaining to the Site;
(vi) All interests owned or claimed by Sellers in the
trademarks, service marks and trade names listed on SCHEDULE 1.1(a)(vi),
together with all U.S. and foreign applications and registrations
therefor, accompanied by the goodwill of all business connected with the
use of and symbolized by such marks including the right to xxx for,
settle, or release any past, present, or future infringement thereof or
unfair competition involving the same (collectively, the "Trademark
Interests"); and
(vii) All right, title, and interest, and benefit of Sellers
in, to, and under all agreements, contracts, licenses, and leases
entered into by Sellers (all such agreements are listed on SCHEDULE
1.1(a)(vii)), or having Sellers as a beneficiary, pertaining to the Site.
(b) All equipment, business machines, computer hardware and
software, tooling and other fixed assets or personal property identified
on SCHEDULE 1.1(b) (collectively, the "Personal Property").
(c) All inventory of the text and content of the Site owned by
Sellers, any public relations and marketing and promotional items
related to the Site, and any artwork or related materials related to the
Site (collectively, the "Inventory"), including the items listed on
SCHEDULE 1.1(c).
(d) All of Sellers' information, files, correspondence, records,
data, plans and recorded knowledge that relate to the Site, including
customer and supplier lists and data on traffic to the Site
(collectively, the "Books and Records").
(e) All of the goodwill of Sellers relating to the Site.
1.2 Notwithstanding anything to the contrary in this Agreement, the term
"Assets" as used herein shall not include, nor shall any provision of this
Agreement be construed to involve any transfer, sale, assignment or grant of
rights with respect to, any of the items listed in SCHEDULE 1.2
(collectively, the "Excluded Assets"), except that at the time of the Closing
(as defined below) if any content included within the Excluded Assets is in
fact contained on the Site ("Loaned Content"), then, Purchaser is hereby
granted a perpetual, irrevocable, royalty-free license to use such Loaned
Content in Purchaser's business and create derivative works solely for
publication on Purchaser's web site. Each Seller agrees that such Seller
shall not allow, permit, or grant permission or a license to, any other party
whose core business is the publication of health, medical, wellness or any
other health related information distributed via a web site or
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the Internet to use the Loaned Content in any form without the prior writ6ten
consent of Purchaser.
1.3 In consideration for transfer of the Assets, and subject to the
terms and conditions of this Agreement, Purchaser shall issue to each Seller
at the Closing 42,000 shares ("collectively, the XXXX Shares") of the common
stock of Purchaser, $.01 par value ("Common Stock"). Such number of XXXX
Shares shall be adjusted for stock splits, stock dividends, and the like
relating to Purchaser's Common Stock occurring before the Closing Date (as
defined below). The XXXX Shares shall be non-registered shares when delivered
to the Sellers.
1.4 Purchaser does not assume any liability or obligation of Sellers
(whether or not related to the Assets) and shall not be responsible for any
debts, liabilities or obligations of Sellers whether occurred now or
hereafter and whether known, unknown, contingent or otherwise.
1.5 In connection with the sale of the Assets to Purchaser, each Seller
shall become an employee of Purchaser pursuant to Sections 9.1 and 10.1, and
shall receive stock option grants for shares of Common Stock pursuant to
Section 10.2.
SECTION 2
DELIVERY OF INSTRUMENTS, PHYSICAL OBJECTS AND PAYMENT
2.1 Upon the terms and subject to the conditions of this Agreement, the
sale of the Assets and purchase of the XXXX Shares (as defined below) shall
take place at a closing (the "Closing") to be held at the offices of King &
Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, at 1:00 p.m., local
time, on July 9, 1999 or at such other time or such other date or such other
place and before such notary as Sellers and Purchaser shall agree to in
writing (the "Closing Date").
2.2 At the Closing or at a reasonable time thereafter, Sellers will
deliver to Purchaser:
(a) All system and user documentation pertaining to the Site,
including design or development specifications and related
correspondence and memoranda;
(b) All necessary consents to the assignment by Sellers and
assumption by Purchaser of the rights and obligations under any contract
relating to the Site; and
(c) All Inventory, Books and Records and Personal Property.
2.3 At the Closing or at a reasonable time thereafter, Purchaser will
deliver to each Seller a certificate for 42,000 shares of Common Stock (as
adjusted) and each certificate shall bear the legend set forth in Section
4.2(q) below.
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SECTION 3
ADDITIONAL COVENANTS AND AGREEMENTS
OF THE PARTIES
3.1 Prior to December 31, 1999, Purchaser shall file a shelf
registration statement on Form S-3 (or other applicable form) under the
Securities Act of 1933 (the "Securities Act") and such registration statement
shall cover the resale by the Sellers all of the XXXX Shares to be issued to
the Sellers pursuant to Section 2.3 Purchaser will use commercially
reasonable efforts to cause such registration statement to become effective
as soon as reasonably practicable.
3.2 Without limiting the foregoing, if at any time prior to the date
that the shelf registration statement is declared effective by the Securities
and Exchange Commission, XXXX proposes to file a registration statement under
the Securities Act with the Securities and Exchange Commission covering any
of its shares of Common Stock (whether for XXXX or for any other party),
other than a registration statement solely covering shares issuable pursuant
to employment benefit plans of XXXX or solely covering shares to be issued in
connection with a corporate acquisition, then XXXX agrees to include all of
the XXXX Shares to be issued to the Sellers pursuant to Section 2.3 on such
registration statement (the "Piggy Back Registration Right"). In such case,
Sellers agree to cooperate with XXXX and the underwriters with respect to the
offering, including execution of an underwriting agreement.
3.3 XXXX shall pay all costs of the registration statement filed
pursuant to Section 3.1 or Section 3.2, except that Sellers shall pay (i) to
retain counsel to the Sellers and (ii) all underwriting discounts, fees and
commissions applicable to the sale of their XXXX Shares.
3.4 Notwithstanding anything to the contrary set forth in this
Agreement, if XXXX is at any time in possession of material, non-public
information that it deems advisable not to disclose publicly or XXXX
otherwise determines in good faith that an event shall have occurred or a
condition shall exist that results in the applicable registration statement
filed pursuant to Section 3.1 or Section 3.2 containing a material
misstatement or omission and it delivers written notice to each Seller to the
effect that such Seller may not make offers or sales under the registration
statement until further notified by XXXX, Sellers shall refrain from making
offers or sales under the registration statement until the registration
statement has been amended or supplemented and Sellers receive written notice
to such effect from XXXX.
3.5 If Purchaser becomes insolvent or makes an assignment for the
benefit of creditors or ceases to do business in the ordinary course
(excluding any acquisition, merger or business combination involving
Purchaser), then Sellers shall have an option to repurchase the Assets
including domain name and Internet protocol address of the Site from
Purchaser at a mutually agreeable price.
3.6 To effect the transfer of ownership of the Trademark Interests to
Purchaser, including the goodwill of all business connected with the use of
and symbolized by the Trademark Interests, Sellers will:
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(a) Provide Purchaser with information and documentation regarding
the standards and specifications applicable to the Site;
(b) Furnish Purchaser with the files evidencing all proceedings
involving the Trademark Interests;
(c) Execute the Assignment of Intellectual Property substantially in
the form attached hereto as EXHIBIT A; and
(d) Provide all reasonable assistance to Purchaser in preparing
applications for registration of all non-registered trademarks, service
marks and trade names pertaining to the Site and when reasonably
requested by Purchaser, provided that any out of pocket expenses
associated therewith shall be borne by Purchaser.
3.7 Sellers covenant not to use or display the Trademark Interests, or
any xxxx confusingly similar thereto, anywhere in the world, and further
covenant not to content or challenge the validity of the Trademark Interests,
any applicable registrations thereof or the ownership of the Trademark
Interests by Purchaser.
3.8 To effect the transfer of ownership of the Copyright Interests to
Purchaser, Sellers will execute the Assignment of Intellectual Property
substantially in the form attached hereto as EXHIBIT A.
3.9 Xxxxxx covenants to identify himself in all publications and
speaking engagements as an employee or consultant (as applicable) of
Purchaser (whether or not such publication or speaking engagement is related
to Purchaser) so long as Xxxxxx is employed by or providing consulting
services to Purchaser.
3.10 Each Seller covenants to use his or her best efforts to provide all
existing documentation relating to the Site or Assets and to do all things
that Purchaser reasonably requests to transfer the Assets.
SECTION 4
REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on SCHEDULE 4.1, each of the Sellers, jointly
and severally, represents and warrants to Purchaser as follows:
(a) Sellers have good and marketable title to the Assets, free and
clear of any liens, claims, encumbrances, rights or equities whatsoever
of any third party. Purchaser will receive, as of the Closing Date,
complete and exclusive right, title, and interest in and to the Assets.
(b) Sellers have developed the Site entirely through their own
efforts for their own account, and the Site is free and clear of all
liens, claims, encumbrances, rights, or equities whatsoever of any third
party.
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(c) To the best knowledge of Sellers', the text and content of the
Site and the Site itself does not infringe on any copyright, trademark,
service xxxx, trade name, trade secret or patent of any third party.
(d) No one other than Sellers have contributed to or participated in
the conception and development of the Site or any of the content of the
Site, provided that it is understood that users regularly submit text
that becomes content on the Site (for example, questions submitted and
published in the Q&A portion of the Site) ("User Content"). Sellers make
no representation whatsoever regarding the extent of Sellers right,
title and interest in any User Content, except that it is understood and
agreed that Sellers at the Closing are conveying to Purchaser any and
all right, title and interest of Sellers in any such User Content.
(e) No litigation regarding the Site, the content of the Site, or
the Assets is pending or has been threatened.
(f) Sellers have the full power and authority to execute and deliver
this Agreement and any other certificate, agreement, document or other
instrument in connection with this transaction and to perform their
obligations hereunder and the consummation of the transaction
contemplated hereby. No consent of any third party is required for the
transactions contemplated by this Agreement.
(g) All copyright registrations, or applications therefor, with
respect to the Copyright Interests are listed on SCHEDULE 4.1(g).
(h) The execution, delivery and performance of this Agreement, the
consummation of transactions contemplated by this Agreement and the
fulfillment of and compliance with the terms and conditions of this
Agreement do not or will not (as the case may be), with the passing of
time or the giving of notice or both, violate or conflict with,
constitute a breach of or default under, result in the loss of any
benefit under, or permit the acceleration of any obligation under, (a)
any assumed contracts (which are listed in SCHEDULE 1.1(a)(vii)), (b)
any other contracts of any kind, (c) any judgment decree or order of any
court or governmental authority or agency to which Sellers are a party
or by which Sellers or any of their properties is bound, or (d) any
statute, law, rule or regulation applicable to either Sellers, their
business or the Assets.
(i) All trademark, service xxxx, trade name or similar
registrations, or applications therefor, with respect to the Trademark
Interests are listed on SCHEDULE 4.1(i).
(j) All agreements, arrangements or understandings in effect with
respect to the Assets are listed on SCHEDULE 4.1(j), and a true and
complete copy of all agreements, arrangements and understandings have
been provided to Purchaser by Sellers.
(k) No representation, warranty or covenant made by Sellers in this
Agreement, the Schedules or the Exhibits attached hereto or any
information provided by Sellers to
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Purchaser in connection with the acquisition described in this Agreement
contains an untrue statement of a material fact or omits to state a
material fact required to be stated herein or therein or necessary to
make the statements contained herein or therein not misleading.
(l) Sellers are not a party to or bound by, any license or other
agreement related to the Site or its content requiring the payment of a
royalty.
(m) Sellers do not use any of the customer information they receive
through the Site in an unlawful manner or in a manner violative of the
rights of privacy of their customers. Seller do not, and have not,
collected personally identifiable information from viewers of the Site
except in a manner disclosed in a privacy statement prominently
displayed on the Site. Sellers have reasonably adequate security
measures in place to protect the customer information they receives
through the Site from illegal use by third parties or use by third
parties in a manner violative of the rights of privacy of their
customers. Sellers do not guarantee security of any information they
receive from their customers from the Site.
(n) Sellers represent to Purchaser that during April 1999 according
to the User Profile report prepared by Webtrends (a copy of which has
been provided to Purchaser), the Site had at least 80,000 "User
Sessions" (as that term is used in the Webtrends report). Sellers have
no reason to believe that the Webtrends report is inaccurate. Sellers
represent to Purchaser that the Site has 8,000 registered users who have
given their email addresses and each receives a periodic electronic
newsletter.
(o) The Assets constitute all of the assets necessary and sufficient
to conduct the operations of the Site in accordance with Seller's past
practices. All assets owned by the Sellers that are used or held for use
in the operation of the Site are included in the Assets. The Sellers
have and will convey to Purchaser at the Closing good and marketable
title to the Assets free and clear of all liens, pledges, security
interests, charges, claims, restrictions and encumbrances of any nature
whatsoever. All equipment and other items of tangible property and
assets included in the Assets have continuously been maintained in the
ordinary course of business.
(p) There are no existing agreements, options, commitments or rights
with, of or to any person to acquire any of the Assets or any interest
in the Site.
(q) Each Seller understands that the XXXX Shares to be issued to
such Seller under this Agreement have not been and will not at the
Closing Date be registered under the Securities Act, in reliance upon
exceptions contained in the Securities Act or interpretations thereof,
and cannot be offered for sale, sold or otherwise transferred unless the
XXXX Shares are so registered or qualify for exemption from registration
under the Securities Act. Each Seller acknowledges and agrees that each
certificate representing XXXX Shares issued pursuant to Section 2.3
shall be imprinted with a legend in substantially the following form:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"FEDERAL ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE
SECURITIES LAWS, BUT HAVE BEEN ACQUIRED BY THE REGISTERED HOLDER
HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY
EXEMPTIONS UNDER THE FEDERAL ACT AND UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, PLEDGED, TRANSFERRED
OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER
PROVISIONS OF THE FEDERAL ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A
TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE STATE AND
FEDERAL SECURITIES LAWS; AND IN THE CASE OF AN EXEMPTION, ONLY IF
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION OF THE
SHARES.
(r) The XXXX Shares being issued to the Sellers pursuant to this
Agreement are being acquired by the Sellers in good faith solely for
their own accounts, for investment and not with a view toward resale or
other distribution within the meaning of the Securities Act. Such shares
will not be offered for sale, sold or otherwise transferred by the
Sellers without either registration or exemption from registration under
the Securities Act.
(s) Each Seller has such knowledge and experience in financial and
business matters that such Seller is capable of evaluating the merits
and risks of the Sellers' investment in the XXXX Shares being acquired
hereunder. Each Seller understands and is able to bear any economic
risks associated with such investment (including, without limitation,
the necessity of holding such shares for an indefinite period of time,
inasmuch as the shares have not been registered under the Securities
Act). Each Seller is an "accredited investor", as that term is defined
in Regulation D promulgated under the Securities Act. Each Seller
confirms that Purchaser has made available to such Seller and his or her
representatives and agents such information that has been reasonably
requested and provided with the opportunity to ask questions of the
officers and management employees of Purchaser about the business and
financial condition of Purchaser as such Seller has requested.
4.2 Purchaser represents and warrants to each Seller as follows:
(a) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Georgia. Purchaser has
the requisite power and authority to own, lease and operate its assets
and properties, to carry on its business as now being conducted and to
perform the terms of this Agreement and the transactions
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contemplated hereby. Purchaser is duly qualified to conduct its
business, and is in good standing, in each jurisdiction where the
ownership or leasing of its properties or the nature of its activities
in connection with the conduct of its business makes such qualification
necessary.
(b) The execution and delivery of this Agreement by Purchaser and
the consummation by Purchaser of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action
and no other corporate proceedings on the part of Purchaser are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered
by Purchaser and, assuming the due authorization, execution and delivery
by the Sellers, constitutes a legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to
or affecting creditors' rights generally and by the application of
general principles of equity.
(c) The execution and delivery of this Agreement by Purchaser do
not, and the performance by Purchaser of its obligations under this
Agreement, including, without limitation, the issuance of the XXXX
Shares, will not, (i) conflict with or violate the certificate of
incorporation or bylaws of Purchaser, (ii) conflict with or violate any
Law applicable to Purchaser or its assets and properties, or (iii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Purchaser is a
party or by which Purchaser is bound, or to which any of its properties
or assets is subject.
(d) When issued in accordance with the terms of this Agreement the
XXXX Shares shall be duly and validly authorized and issued fully paid
and nonassessable. As of June 25, 1999, Purchaser's authorized capital
stock consisted of 20,000,000 shares of $0.01 par value common stock, of
which 4,612,307 were outstanding, 847,240 were held in Treasury, and
1,400,000 were reserved under Purchaser's stock option plans.
SECTION 5
FURTHER ASSURANCES
Sellers will execute and deliver such further conveyance instruments and
take such further actions as may be necessary or desirable to evidence more
fully the transfer of ownership of all of the Assets to Purchaser. Sellers
therefore agree:
(a) To execute, acknowledge, and deliver any affidavits or documents
of assignment and conveyance regarding the Assets reasonably requested
by Purchaser;
(b) To provide testimony in connection with any proceeding affecting
the right, title, or interest of Purchaser in the Assets; and
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(c) To perform any other acts Purchaser reasonably deems necessary
to carry out the intent of this Agreement.
SECTION 6
NONCOMPETITION
6.1 For the purposes of this Section 6, the following definitions shall
apply:
(a) "Seller Activities" shall mean, with respect to each Seller, the
publication of health, medical, wellness or any other health related
information distributed via a web site or the Internet, including all
activities of the type currently conducted, offered, or provided by the
Site.
(b) "Noncompete Period" or shall mean, with respect to each Seller,
the period beginning on the Closing Date and continuing for a period of
two (2) years from the date of last employment by the Purchaser.
(c) The term "Territory" as used herein shall mean worldwide, such
area being where the Site is operating as of the Closing Date.
6.2 Noncompetition.
(a) Each Seller hereby acknowledges that the Site conducts Seller
Activities throughout the Territory. Each Seller acknowledges that to
protect adequately the interest of Purchaser in the business of the
Site, it is essentially that any noncompete covenant with respect
thereto cover all Seller Activities and the entire Territory.
(b) Each Seller hereby agrees that such Seller shall not, during the
Noncompete Period, in any manner, directly or by assisting others,
engage in, have an equity or profit interest in (other than an equity
interest in any publicly traded enterprise that constitutes less than 5%
of the total equity of such enterprise), render services (of an
executive, marketing, manufacturing, research and development,
administrative, financial or consulting nature) to, or affiliate with,
any business with a core business that conducts, or assist a business in
the development of a core business to conduct, any of the Seller
Activities in the Territory.
6.3 Each Seller hereby agrees that such Seller shall not, during the
Noncompete Period, directly or by assisting others, own, manage, operate,
join, control or participate in the ownership, management, operation or
control of any business (including without limitation any Internet web site)
conducted under any corporate or trade name of the Site or any name similar
enough thereto to give rise to confusion without the prior written consent of
Purchaser which consent shall not be unreasonably withheld.
6.4 If a judicial or arbitral determination is made that any of the
provisions of this Section 6 constitutes an unreasonable or otherwise
unenforceable restriction against any Seller,
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the provisions of the Section 6 shall be rendered void only to the extent
that such judicial or arbitral determination finds such provisions to be
unreasonable or otherwise unenforceable with respect to such Seller. In this
regard, Sellers and Purchaser hereby agree that any judicial or arbitral
authority construing this Agreement shall be empowered to sever any portion
of the Territory, any prohibited business activity or any time period from
the coverage of this Section 6 and to apply the provisions of this Section 6
to the remaining portion of the Territory, the remaining business activities
and the remaining time period not so severed by such judicial or arbitral
authority. Moreover, notwithstanding the fact that any provision of this
Section 6 is determined not be specifically enforceable, Purchaser shall
nevertheless be entitled to recover monetary damages as a result of the
breach of such provision by a Seller.
6.5 Each Seller hereby agrees that any remedy at law for any breach of
the provisions contained in this Section 6 shall be inadequate and that
Purchaser shall be entitled to injunctive relief in addition to any other
remedy Purchaser might have under this Agreement.
SECTION 7
ACKNOWLEDGMENT OF RIGHTS
In furtherance of this Agreement, Sellers hereby acknowledge that, from
and after the Effective Date and provided that Purchaser makes the payment
described in Section 1.2, Purchaser has acceded to all of Sellers' right,
title, and standing to:
(a) Receive all rights and benefits pertaining to the Site and the
Assets;
(b) Institute and prosecute all suits and proceedings and take all
actions that Purchaser, in its sole discretion, may deem necessary or
proper to collect, assert, or enforce any claim, right, or title of any
kind in and to any and all of the Site and the Assets; and
(c) Defend and comprise any and all such action, suits, or
proceedings relating to such transferred and assigned rights, title,
interest, and benefits, and perform all other such acts in relation
thereto as Purchaser, in its sole discretion, deems advisable.
SECTION 8
INDEMNIFICATION
8.1 Each Seller agrees to indemnify and hold harmless Purchaser, its
successors and assigns, including any subsidiary, officer, director,
employee, agent, contractor, licensee or customer, from and against any loss,
liability, claim or damage (including court costs and Attorney fees)
sustained by it or them as a result of (1) a claim or allegation that the
Assets, the Site or any of the text or content, as constituted at the time
the Closing, infringes any copyright, trade secret, trademark, service xxxx,
trade name or other intellectual property right of any third party (an "IP
Claim"), (2) any liability or obligation relating to the Assets, the Site or
any of the content not expressly assumed by Purchaser (a "Commercial Claim"),
or (3) any breach by either Seller of any of his or her representations,
warranties or covenants under this Agreement (a
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"Misrepresentation Claim") (all of which will survive the Closing of this
Agreement for a period of two (2) years from the Closing Date), provided,
however, absent fraud, that the total maximum financial liability of any
Seller hereunder shall not exceed an amount equal to the value of the
XXXX Shares issued to such Seller at the Closing (with such value being
measured for such purpose at the time of the Closing based on the average
closing trading price for shares of the Common Stock of XXXX on the ten (10)
trading days immediately proceeding, but not including the Closing Date).
8.2 Nothing in this Section 8.2 is intended to limit any legal or
contractual obligation of any Seller in the event of fraud by such Seller.
Otherwise, however, no Seller shall have any indemnification liability under
Section 8.1, unless it has received from XXXX written notice of the alleged
loss, liability, claim or damage within a reasonable time after the loss,
liability, claim or damage arises and, in any event, prior to the two (2)
year anniversary of the Closing Date (the "Claim Notice"). Furthermore, no
Seller shall have any indemnification liability with respect to an IP Claim
or a Commercial Claim, unless the Seller is given a reasonable opportunity
(i) to participate in the defense of such claim, at Seller's expense, and
(ii) to approve any proposed settlement thereof.
SECTION 9
CONDITIONS TO THE OBLIGATION OF
PURCHASER TO CLOSE
The obligation of the Purchaser to close the transaction and to deliver
the XXXX Shares at the Closing and to perform any obligations hereunder shall
be subject to the satisfaction as determined by, or waived by, Purchaser of
the following conditions on or before the Closing Date.
9.1 The representations and warranties made by Sellers in Section 4.1
shall be true and correct in all material respects on the Closing Date.
9.2 Purchaser and Xxxxxx shall have duly executed and delivered the
Employment Agreement, substantially in the form attached hereto as EXHIBIT B,
and Purchaser and Xxxx shall have duly executed and delivered the Employment
Agreement, substantially in the form attached as EXHIBIT C.
9.3 There shall not be on the Closing Date any order of a court of
competent jurisdiction or an ruling of any governmental authority or such
condition imposed under any law, rule or regulation which would, in the
judgment of such Purchaser, (a) prohibit or restrict (i) the receipt of the
XXXX Shares by either Seller or (ii) the consummation of the transactions
contemplated by this Agreement, (b) subject such Purchaser to any penalty or
onerous condition under or pursuant to any law, rule or regulation, or (c)
restrict the operation of the Site as conducted on the date hereof in a
manner that would have a material adverse effect on the condition of the Site
or the Assets.
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9.4 No action, suit, proceeding, claim or dispute shall have been
brought or otherwise arisen at law, in equity, in arbitration or before any
governmental authority against either Seller which would, if adversely
determined, (a) have a material adverse effect on the ability of the Seller
to perform his or her obligations under this Agreement or any of the other
transaction documents.
9.5 Each Seller shall have duly executed and delivered the Xxxx of Sale,
substantially in the form attached hereto as EXHIBIT D.
9.6 Neither any investigation of Sellers' business, the Site and the
Assets by Purchaser, nor the schedules hereto, nor any other document
delivered to Purchaser as contemplated by this Agreement, shall have revealed
any facts or circumstances that, in the good faith judgment of Purchaser,
reflect in a material adverse way on Sellers' business, the Site, or the
Assets.
SECTION 10
CONDITIONS TO THE OBLIGATION OF
SELLERS TO CLOSE
The obligation of the Sellers to close the transaction and to deliver
the Assets at the Closing and to perform any obligations hereunder shall be
subject to the satisfaction as determined by, or waiver by, Sellers of the
following conditions on or before the Closing Date.
10.1 The representations and warranties made by Purchaser in Section 4.2
shall be true and correct in all material respects on the Closing Date.
10.2 Purchaser and Xxxxxx shall have duly executed and delivered the
Employment Agreement, substantially in the form attached hereto as EXHIBIT B,
and Purchaser and Xxxx shall have duly executed and delivered the Employment
Agreement, substantially in the form attached as EXHIBIT C.
10.3 Purchaser and Xxxxxx shall have duly executed and delivered a Stock
Option Grant for 10,000 shares of XXXX Stock, and Purchaser and Xxxx shall
have duly executed and delivered a Stock Option Grant for 5,000 shares of
Common Stock, each Stock Option Grant substantially in the form attached
hereto as EXHIBIT E.
SECTION 11
TERMINATION
11.1 This Agreement may be terminated at any time prior to the Closing
Date (the "Termination Date"):
(a) in writing by mutual agreement by the Purchaser and Sellers;
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(b) by written notice from Sellers to Purchaser, if between the
date hereof and the Closing Date: (i) there shall have been a breach of
any material representation or warranty of the Purchaser contained in
this Agreement or (ii) the Purchaser shall not have complied with any
material covenant or agreement to be complied with by it and contained
in this Agreement; and
(c) by written notice from Purchaser to Sellers, if between the date
hereof and the Closing Date: (i) there shall been a breach of any
material representation or warranty of the Sellers contained in this
Agreement, or (ii) the Sellers shall not have complied with any material
covenant or agreement to be complied with by it and contained in this
Agreement.
11.2 If this Agreement is terminated pursuant to this Section 11, this
Agreement shall forthwith cease to have effect by and among the parties and
all further obligations of the parties shall terminate without further
liability.
SECTION 12
MISCELLANEOUS
12.1 This Agreement will inure to the benefit of, and be binding upon,
the parties hereto, together with their respective legal representatives,
successors, and assigns.
12.2 This Agreement will be governed by, and construed in accordance
with, the laws of the State of Georgia, excluding its principles of conflicts
of law.
12.3 This Agreement (along with the agreements expressly contemplated
hereby) merges and supersedes all prior and contemporaneous agreements,
assurances, representations, and communications between the parties.
12.4 All notices and other communications to be given by either party to
this Agreement to the other party hereto will be in writing, and will be
given by personal delivery or by depositing such notice in the United States
mail, postage prepaid, certified mail, return receipt requested, addressed as
follows:
If to Sellers: Xxxx Xxxxxx, M.D.
Xxxxxx Xxxx
0 Xxxx 00xx Xxxxxx, #000
Xxx Xxxxx, XX 00000
Telephone No.: 650/000-0000
Facsimile No.: 650/358-9410
If to Purchaser: X.X.X.X. Software, Inc.
0000 XxxxxXxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Attn: Xx. Xxxxxx X. Xxxxxx
Telephone No.: 404/000-0000
Facsimile No.: 404/989-4970
Any party to whom notices are being sent pursuant to this Agreement may, from
time to time, change its address for future communications hereunder by
giving notice in the manner described herein to the other party hereto.
Notices will be deemed given on the date delivered (provided that, in the
case of notice sent by facsimile, sender received a facsimile report
indicating that the facsimile was sent in its entirety to the facsimile
number of the addressee).
12.5 The parties will pay the fees and expenses of their respective
consultants, counsel, accountants and other experts, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.
12.6 The terms of this Agreement may not be amended, modified or
eliminated, and the observance or performance of any term, covenant,
condition or provision herein may not be waived except by written consent of
the party charged with such amendment, modification or waiver. Failure of any
party to insist upon the strict performance of any provision of this
Agreement or to exercise any right or remedy under this Agreement shall not
be deemed a waiver of any right or remedy with respect to any existing or
subsequent breach or default; the election by any party of any particular
right or remedy shall not be deemed to exclude any other; and all rights and
remedies of all parties shall be cumulative.
12.7 If any provision of this Agreement is contrary to, prohibited by or
deemed invalid under applicable laws or regulations, such provisions will be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder of this Agreement will not be invalidated thereby
and will be given effect so far as possible. If any provision of this
Agreement is contrary to, prohibited by or deemed invalid under the laws and
regulations of one jurisdiction, said provision is not thereby rendered
invalid in any other jurisdiction.
12.8 This Agreement may be executed in two or more counterparts, or any
number of duplicate originals, each of which will be deemed an original, but
all of which together will constitute one and the same instruments.
12.9 The following rules of interpretation must be applied in
interpreting this Agreement: (1) the section headings used in this Agreement
are for reference and convenience only, and will not enter into the
interpretation of this Agreement, (2) all references to Sections and Exhibits
are to Sections in this Agreement and Exhibits to this Agreement, as the case
may be, (3) the provisions of the Exhibits are incorporated in this
Agreement, and (4) as used in this Agreement, the term "including" will
always be deemed to mean "including without limitation".
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date shown above.
X.X.X.X. SOFTWARE. INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
Chairman and CEO
Date: July 30, 1999
XXXX XXXXXX, M.D.
/s/ Xxxx Xxxxxx, M.D.
------------------------------------
Date: July 30, 1999
XXXXXX XXXX
/s/ Xxxxxx Xxxx
------------------------------------
Date: July 30, 1999
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