ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of December ___, 1998 (the
"Agreement"), is made and entered into by and among Innovacom, Inc., a Nevada
corporation ("Innovacom") and Xxxxxxxx Xxxxxx Enterprises, Inc., a California
corporation ("CTEI").
RECITALS
WHEREAS, Innovacom has been developing applications for its video
encoder in the telemedicine field, (hereinafter referred to as "Telemedicine
Opportunity");
WHEREAS, Innovacom has decided that it is in the best interest of
Innovacom and its shareholders to discontinue the development of the
Telemedicine Opportunity and not directly pursue the telemedicine market as a
business opportunity;
WHEREAS, CTEI, a corporation partially owned by Xxxx Xxxxxxxx, a
director of Innovacom, is desirous of pursuing the telemedicine market as a
business opportunity and is willing to assume the liabilities incurred in the
development of telemedicine market in exchange for certain assets provided
herein; and
WHEREAS, the Board of Directors of Innovacom deems it advisable and in
the best interests of the stockholders of Innovacom to sell all assets
associated with Telemedicine Opportunity to CTEI in exchange for CTEI's
assumption of the liabilities associated with the development of Telemedicine
Opportunity.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
I. SALE AND PURCHASE OF ASSETS.
1.1 Purchase of Assets. On the terms and conditions of this Agreement,
Innovacom agrees to sell, transfer, assign, and convey to CTEI, all of the
assets, properties, and rights associated with the Telemedicine Opportunity as
of the Closing Date (as defined in Section 4.2), which assets are more
particularly set forth in "Exhibit A" hereto (the "Assets").
1.2 Assumption of Liabilities. In connection with the transfer of
Innovacom's right, title, and interest in and to the Assets, CTEI will accept
the assignment of, and also agrees to assume the duties and obligations of
performance under those specific contracts and liabilities to which Innovacom is
a party as identified in "Exhibit B" hereto (the "Liabilities").
II. ADDITIONAL AGREEMENT
2.1 Software License. As an integral part of the transaction
contemplated hereunder, Innovacom shall have entered into those additional
covenants and agreements set forth in the Software License Agreement attached
hereto as "Exhibit C" and incorporated by this reference (the "Software License
Agreement").
III. CONDITIONS.
3.1 Conditions of the Obligations of Each Party. The obligations of
Innovacom, on the one hand, and CTEI on the other hand, to consummate the
transactions contemplated by this Agreement are subject to the satisfaction (or,
if permissible, waiver by the party for whose benefit such conditions exist) of
the following conditions:
(a) The parties shall have executed the Software License
Agreement;
(b) CTEI shall have cause Xx. Xxxx Xxxxxxxx and Dr. Xxxxx Xxxxxx,
each individually, to execute a "General Release" releasing Innovacom of its
obligations and liabilities related to the Telemedicine Opportunity, a copy of
the General Release is hereto attached as "Exhibit D" and "Exhibit E,"
respectively.
(c) The parties shall have agreed upon the allocation of the
sales price and prepared an Asset Acquisition Statement on Form 8594 as required
by Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code");
(d) All actions by or in respect of or filings with any court,
arbitral tribunal, administrative agency, commission, or other governmental or
regulatory authority or agency (a "Governmental Entity") required to permit the
consummation of the asset purchase shall have been obtained;
(e) All material consents of third parties (other than
Governmental Entities), if applicable, shall have been obtained; and
(e) No claim or threat of legal action by any third party as a
result of this transaction has been communicated to Innovacom, which claim or
threat remains unresolved as of the Closing Date.
IV. SIGNING AND CLOSING
4.1 Deliveries at Signing of Agreement. Prior to or substantially
contemporaneous with the execution this Agreement, Innovacom shall deliver or
cause to be delivered to the CTEI evidence of the corporate authorizations
approving the terms of this Agreement and the transactions contemplated herein
and therein; and
4.2 Closing of Transaction. The closing of the transactions contemplated
hereby (the "Closing") shall take place when all deliveries provided for in this
Article IV shall have been made, which shall occur on, December ____, 1998, at
or before 11:00 p.m., Pacific Daylight Time, (the "Closing Date").
4.3 Deliveries on the Closing Date by Innovacom. Provided that all of
the terms and conditions of this Agreement have been satisfied, Innovacom shall
deliver or cause to be delivered to CTEI the following on or before the Closing
Date:
(a) The executed Software License Agreement;
(b) (i) Bills of sale or documents of assignment as shall be
required to vest in CTEI good and marketable title to all the Assets, and (ii)
operating control of the Assets; and
(c) A certificate signed by the President of Innovacom that all
of the representations and warranties of the Innovacom set forth in this
Agreement are true and correct in all material respects and that all of the
conditions of this Agreement applicable to the Closing Date have been satisfied
or waived.
4.4 Deliveries on the Closing Date by CTEI. Provided that all of the
terms and conditions of this Agreement have been satisfied, CTEI shall deliver
or cause to be delivered to Innovacomthe following on or before the Closing
Date:
(a) The General Release signed by Xx. Xxxx Xxxxxxxx;
(b) The General Release signed by Dr. Xxxxx Xxxxxx; and
(c) A certificate signed by the President of CTEI that all of the
representations and warranties of the Innovacom set forth in this Agreement are
true and correct in all material respects and that all of the conditions of this
Agreement applicable to the Closing Date have been satisfied or waived; and
4.5 Filings; Cooperation. Innovacom and CTEI shall, on request and
without further consideration, cooperate with one another by furnishing or using
their best efforts to cause others to furnish any additional information and/or
executing and delivering or using their best efforts to cause others to execute
and deliver any additional documents and/or instruments, and doing or using
their best efforts to cause others to do any and all such other things as may be
reasonably required by the parties or their counsel to consummate or otherwise
implement the transactions contemplated by this Agreement. Unless otherwise
provided herein, all such instruments so delivered shall be dated the Closing
Date.
V. REPRESENTATIONS AND WARRANTIES OF INNOVACOM.
5.1 Title to Property. Exhibit A accurately identifies all of the Assets
of Innovacom in connection with Telemedicine Opportunity. Innovacom has good and
marketable title to the Assets free and clear of all liens, encumbrances,
security interests, charges, restrictions, options, mortgages, easements,
rights-of-way, or other encumbrances and restrictions of any nature whatsoever,
except as described in "Exhibit F" and upon consummation of the transactions
contemplated hereby, Innovacom shall transfer, assign, and convey to CTEI, and
CTEI shall receive from Innovacom, good and marketable title to all of the
Assets free and clear of any and all liens, encumbrances, security interests,
charges, or restrictions against transfer except as disclosed in "Exhibit F"
5.2 Organization. Innovacom is a corporation duly organized, validly
existing, duly qualified or licensed to do business, and in good standing under
the laws of the jurisdiction of its incorporation or organization and in each
jurisdiction in which the nature of the business conducted by it makes such
qualification or licensing necessary, and has all requisite corporate or other
power and authority and all necessary governmental approvals to own, lease, and
operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing, and in good standing or
to have such power, authority, and governmental approvals would not have a
material adverse effect on Innovacom.
5.3 Corporate Authorization; Validity of Agreement. Innovacom has full
corporate power and authority to execute and deliver this Agreement and the
Software License Agreement to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Innovacom of this Agreement and the Software License Agreements and the
consummation by them of the transactions contemplated hereby and thereby have
been duly and validly authorized. This Agreement and the Software License
Agreement has been duly executed and delivered by Innovacom and constitutes a
valid and binding obligation of Innovacom, enforceable against each of them as
applicable in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
VI. REPRESENTATIONS AND WARRANTIES OF CTEI.
6.1 Organization. CTEI is a corporation duly organized, validly
existing, duly qualified or licensed to do business, and in good standing under
the laws of the jurisdiction of its incorporation or organization and in each
jurisdiction in which the nature of the business conducted by it makes such
qualification or licensing necessary, and has all requisite corporate or other
power and authority and all necessary governmental approvals to own, lease, and
operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing, and in good standing or
to have such power, authority, and governmental approvals would not have a
material adverse effect on CTEI.
6.2 Corporate Authorization; Validity of Agreement. CTEI has full
corporate power and authority to execute and deliver this Agreement to which it
is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by CTEI of this Agreement and the consummation by
them of the transactions contemplated hereby and thereby have been duly and
validly authorized. This Agreement has been duly executed and delivered by CTEI
and constitutes a valid and binding obligation of CTEI, enforceable against each
of them as applicable in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, or other
similar laws, now or hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
VII. INDEMNIFICATION.
7.1 Indemnification Obligations of CTEI. CTEI shall indemnify and hold
Innovacom harmless from any and all liabilities and obligations arising from
CTEI's operation and/or development of the Telemedicine Opportunity after the
Closing Date.
7.2 Indemnification Obligations of Innovacom. Innovacom shall indemnify
and hold CTEI harmless from any and all liabilities and obligations arising from
Innovacom's operation and/or development of the Telemedicine Opportunity prior
to the Closing Date except for those obligations and liabilities appearing in
"Exhibit B" and expressly assumed by CTEI in Section 1.2 of this Agreement.
VIII. MISCELLANEOUS.
8.1 Fees and Expenses. Except as contemplated by this Agreement, all
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such expenses.
8.2 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified, and supplemented in any and all respects by
written agreement of the parties hereto at any time prior to the Closing Date
with respect to any of the terms contained herein.
8.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by a nationally recognized overnight courier service to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Innovacom:
Innovacom, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Eng Xxxx & Xxxxxxxx
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(b) if to CTEI, to:
Xxxxxxxx Xxxxxx Enterprises, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
8.4 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation".
8.5 Assignment. Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by the parties and their respective
successors and assigns.
8.6 Jurisdiction and Venue. Any and all suits for any breach of this
Agreement or for rescission or specific performance of this Agreement shall be
filed and maintained in any court of competent jurisdiction in Santa Xxxxx
County, California. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8.7 Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents and the instruments referred to herein): (a) constitute
the entire agreement and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof, and (b) are not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
8.8 Severability. If any term, provision, covenant, or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
8.9 Counterparts. This Agreement may be executed in two or more
counterparts, by facsimile signature or otherwise, all of which shall be
considered one and the same agreement and shall become effective when two or
more counterparts have been signed by parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
IN WITNESS WHEREOF, Innovacom and CTEI have executed this Agreement as
of the date specified above.
INNOVACOM, INC.
By:
Xxxxx Xxxxxx
President and Chief Executive
Officer
Xxxxxxxx Xxxxxx Enterprises, Inc.
By: Xx. Xxxx Xxxxxxxx
President
