PURCHASE AGREEMENT
EXHIBIT
2.5
THIS
PURCHASE AGREEMENT (the “Agreement”)
is
made and entered into as of the 6th
day of
February, 2006, by and between the following:
Xxxx
and
Xxxxxxx Xxxxx, individuals, (hereinafter, the “Sellers”);
and
IVI
COMMUNICATIONS, INC., a Nevada corporation (hereinafter “IVIC”).
W I T N E S S E T H
WHEREAS,
subject to the terms and conditions of this Agreement, IVIC and Sellers desire
for IVIC to purchase from Sellers, and for Sellers to sell to IVIC, all of
the
outstanding common stock of FUTURA, INC., an Arkansas corporation (the
“Futura Stock”
and
“Futura”
respectively); and
WHEREAS,
the Board of Directors of IVIC deems it desirable and in the best interests
of
IVIC and its stockholders that IVIC purchase the Futura Stock in consideration
of issuance by IVIC to Sellers of cash in the amount of one hundred fifty
thousand dollars ($150,000) and five hundred fifty thousand dollars ($550,000)
worth of unregistered IVIC Common Stock (the “IVIC
Shares”);
and
WHEREAS,
Sellers deem it desirable and in the best interests of Sellers that Sellers
sell
the Futura Stock to IVIC; and
WHEREAS,
IVIC and Sellers desire to provide for certain undertakings, conditions,
representations, warranties, and covenants in connection with the transactions
contemplated by this Agreement; and
WHEREAS,
Sellers and the Board of Directors of IVIC have approved and adopted this
Agreement, subject to the terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto do hereby agree as
follows:
1
SECTION
1
DEFINITIONS
1.1 “Agreement”,
“Futura”,
“Futura
Stock”,
“IVIC”,
“IVIC
Shares”,
“Sellers”,
respectively, shall have the meanings defined in the foregoing preamble and
recitals to this Agreement.
1.2 “Closing
Date”
shall
mean 10:00 a.m., local time, February 9, 2006, at Futura’s office in 000 Xxxxxxx
Xxxxx, Xxxxx, XX 00000, the date on which the parties hereto shall close the
transactions contemplated herein; provided that the parties can change the
Closing Date and place of Closing to such other time and place as the parties
shall mutually agree, in writing. As of the Closing Date, all Exhibits to this
Agreement shall be complete and attached to this Agreement.
1.3 “1933
Act”
shall
mean the Securities Act of 1933, as amended.
1.4 “1934
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
1.5 “SEC
Documents”
shall
have the meaning defined in Section 3.4 hereof.
1.6 “Confidential
information”
shall
have the meaning defined in Section 11.1 hereof.
SECTION
2
AGREEMENT
FOR PURCHASE AND SALE OF FUTURA STOCK
2.1 Substantive
Terms of the Purchase and Sale of Futura Stock.
Sellers
shall sell and deliver to IVIC one hundred percent (100%) of the issued and
outstanding capital stock of Futura in a form enabling IVIC, then and there,
to
become the record and beneficial owner of said common stock.
2.2 Consideration
Paid by IVIC.
(a) For
all
of the issued and outstanding stock of Futura, IVIC shall deliver to Sellers,
cash and the IVIC Shares, as follows: The $150,000 cash payment shall be paid
$75,000 at Close and $25,000 paid on the first day of the fourth month after
Close, and $25,000 paid on the first day of the seventh month after Close and
$25,000 paid on the first day of the tenth month after Close. The unregistered
common stock shall be issued at Close and the exact number of shares shall
be
determined by taking $ 550,000 and dividing that number by the average closing
price for the ten trading days immediately prior to the Close. The cash and
number of shares shall be issued to the Sellers in the following manner: 51%
to
Xxxx X. Xxxxx and 49% to Xxxxxxx X. Xxxxx. The IVIC Shares shall be issued
pursuant to an exemption from registration under the 1933 Act and from
registration under any and all applicable state securities laws and the
certificates representing the IVIC Shares shall bear the restrictive legend
set
forth in Rule 144 of the Rules and Regulations of the 1933 Act and any
appropriate legend required under applicable state securities laws. The IVIC
Shares shall be validly issued and outstanding, fully paid, and
non-assessable.
(b) It
is the
present intention of IVIC that, following the Closing Date, Futura will operate
as a wholly owned subsidiary (“Futura-Sub”) of IVIC.
2
SECTION
3
REPRESENTATIONS
AND WARRANTIES OF IVIC
IVIC,
in
order to induce the Sellers to execute this Agreement and to consummate the
transactions contemplated herein, represents and warrants to Sellers, as
follows:
3.1 Organization
and Qualification.
IVIC is
a corporation duly organized, validly existing, and in good standing under
the
laws of Nevada, with all requisite power and authority to own its property
and
to carry on its business as it is now being conducted. IVIC is duly qualified
as
a foreign corporation and in good standing in each jurisdiction where the
ownership, lease, or operation of property or the conduct of business requires
such qualification, except where the failure to be in good standing or so
qualified would not have a material, adverse effect on the financial condition
or business of IVIC.
3.2 Authorization
and Validity.
IVIC
has the requisite power and is duly authorized to execute and deliver and to
carry out the terms of this Agreement. The board of directors and stockholders
of IVIC have taken all action required by law, its Articles of Incorporation
and
Bylaws, both as amended, or otherwise to authorize the execution and delivery
of
this Agreement and the consummation of the transactions contemplated hereby,
subject to the satisfaction or waiver of the conditions precedent set forth
in
Section 8 of this Agreement. Assuming this Agreement has been approved by all
action necessary on the part of Sellers, this Agreement is a valid and binding
agreement of IVIC.
3.3 No
Defaults.
IVIC is
not in default under or in violation of any provision of its Articles of
Incorporation or Bylaws, both as amended. IVIC is not in default under or in
violation of any material provision of any indenture, mortgage, deed of trust,
lease, loan agreement, or other agreement or instrument to which it is a party
or by which it is bound or to which any of its is subject, if such default
would
have a material, adverse effect on the financial condition or business of IVIC.
IVIC is not in violation of any statute, law, ordinance, order, judgment, rule,
regulation, permit, franchise, or other approval or authorization of any court
or governmental agency or body having jurisdiction over it or any of its
properties which, if enforced, would have a material, adverse effect on the
financial condition or business of IVIC. Neither the execution and delivery
of
this Agreement, nor the consummation of the transactions contemplated herein,
will conflict with or result in a breach of or constitute a default under any
of
the foregoing or result in the creation of any lien, mortgage, pledge, charge,
or encumbrance upon any asset of IVIC and no consents or waivers thereunder
are
required to be obtained in connection therewith in order to consummate the
transactions contemplated by this Agreement.
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3.4 SEC
Documents; Financial Statements.
As of
the Closing, IVIC has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter
referred to as the “SEC
Documents”).
As of
their respective dates, the SEC Documents substantially complied in all material
respects with the requirements of the 1934 Act and the rules and regulations
of
the SEC promulgated thereunder applicable to the SEC Documents, and none of
the
SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of IVIC included in the SEC Documents
substantially complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with
respect thereto. Such financial statements have been prepared in substantial
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i)
as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii)
in the
case of unaudited interim statements, to the extent they may exclude footnotes
or may be condensed or summary statements) and fairly present in all material
respects the financial position of IVIC as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of IVIC to the Sellers which is not
included in the SEC Documents, including, without limitation, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are or were made, not misleading. Neither the
Company nor any of its officers, directors, employees or agents has provided
the
Sellers with any material, non-public information.
3.5 Absence
of Certain Changes.
Since
the most recent filing by IVIC with the SEC, there has been no material adverse
change and no material adverse development in the business, properties,
operations, financial condition, results of operations or prospects of IVIC.
IVIC has not taken any steps, and does not currently expect to take any steps,
to seek protection pursuant to any bankruptcy law nor does IVIC have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.
3.6 Documents.
The
copies of all agreements and other instruments that have been delivered by
IVIC
to Sellers are true, correct, and complete copies of such agreements and
instruments and include all amendments thereto.
3.7 Disclosure.
The
representations and warranties made by IVIC herein and in any schedule,
statement, certificate, or document furnished or to be furnished by IVIC to
Sellers pursuant to the provisions hereof or in connection with the transactions
contemplated hereby, taken as a whole, do not and will not as of their
respective dates contain any untrue statements of a material fact, or omit
to
state a material fact necessary to make the statements made not
misleading.
4
SECTION
4
REPRESENTATIONS
AND WARRANTIES OF SELLERS
Sellers,
in order to induce IVIC to execute this Agreement and to consummate the
transactions contemplated herein, represent and warrant to IVIC as
follows:
4.1 Organization
and Qualification.
Futura
is an Arkansas corporation, duly organized, validly existing, and in good
standing under the laws of the state of Arkansas with all requisite power and
authority to own its property and assets and to carry on its business as it
is
now being conducted. Futura does not conduct business and is not qualified
as a
foreign corporation in any other geographic location.
4.2 Ownership
of Futura Stock.
Futura
is authorized to issue one class of stock, common stock, with a par value of
$3.00 per share.
All of
the shares of common stock outstanding are owned of record and beneficially
by
the Sellers, who have not granted any options, warrants, or other securities
exercisable or convertible into or any calls, commitments, or agreements of
any
kind relating to any issued equity securities of Futura. There are no options,
warrants, or other securities exercisable or convertible into or any calls,
commitments, or agreements of any kind relating to any unissued equity
securities of Futura by or on behalf of Futura.
4.3 Authorization
and Validity.
The
Sellers have the requisite power and are duly authorized to execute and deliver
and to carry out the terms of this Agreement. Assuming this Agreement has been
approved by all action necessary on the part of IVIC, this Agreement is a valid
and binding agreement of Sellers.
4.4 Futura
Financial Statements.
(a) Futura
financial statements (as prepared by Sellers as the management of Futura) for
the three consecutive fiscal years ending August 31, 2005 and subsequent months
and any notes thereto, fairly and accurately present the financial condition
and
the results of operations, income, expenses, assets, liabilities, changes in
shareholders’ equity, and cash flows of Futura, consistent with the past
practices of Futura (collectively, “Futura Financial Statements”).
(b) Futura
Financial Statements are capable of being examined and reported upon with an
unqualified opinion expressed by an independent public or certified public
accountant and will comply with the requirements and standards set forth in
Regulation S-X, as promulgated and adopted by the Securities and Exchange
Commission.
4.5 Conduct
and Transactions of Futura.
Since
inception, Futura has conducted the operations of its business consistent with
past practice and used its best efforts to maintain and preserve its properties,
key employees, and relationships with customers and suppliers. Futura did pay
dividends from time to time since inception including a $12,000 dividend during
fiscal year ending August 31, 2005 and a $4,000 dividend on January 31, 2006.
Without limiting the foregoing, during such period Futura did not:
(a) Incur
any
liabilities except to maintain its facilities and assets in the ordinary course
of its business;
(b) Issue,
reissue, or sell, or issue options or rights to subscribe to, or enter into
any
contract or commitment to issue, reissue, or sell, any shares of capital stock
or acquire or agree to acquire any shares of capital stock;
(c) Amend
its
Articles of Incorporation or Bylaws or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change
in
any manner the rights of its capital stock or other securities, except as
specified on Exhibit 4.5(d) hereto;
(d) Pay
or
incur any obligation or liability, direct or contingent, except in the ordinary
course of its business;
5
(e) Incur
any
indebtedness for borrowed money, assume, guarantee, endorse, or otherwise become
responsible for obligations of any other party, or make loans or advances to
any
other party except in the ordinary course of its business;
(f) Increase
in any manner the compensation, direct or indirect, of any of its officers
or
executive employees, except as otherwise disclosed in Exhibit 4.5(g), hereto;
or
(g) Make
any
capital expenditures except in the ordinary course of its business.
4.6 Compensation
Due Employees.
As of
the Closing Date, Futura will not have any outstanding liability for payment
of
wages, payroll taxes, vacation pay (whether accrued or otherwise), salaries,
bonuses, pensions, contributions under any employee benefit plans or other
compensation, current or deferred, under any labor or employment contracts,
whether oral or written, based upon or accruing in respect of those services
of
employees of Futura that have been performed prior to the Closing Date, except
as specified on Exhibit 4.6 hereto. As of the Closing Date, Futura will not
have
any unfunded, contingent or other liability under any defined benefits plan
or
any other retirement or retirement-type plan, whether such plan(s) are to
continue or are thereupon terminated, except for the normal on-going obligations
for future contributions under such plan(s) not related, generally or
specifically, to the termination of such plan(s) or except as specified on
Exhibit 4.6 hereto.
4.7 Union
Agreements and Employment Agreements.
Futura
is not a party to any union agreement or any organized labor dispute. Futura
has
no written or verbal employment agreements with any of its employees, except
as
listed in Exhibit 4.7 hereto.
4.8 Contracts
and Leases.
Except
as listed in Exhibit 4.8 hereto, Futura is not a party
to
any written or oral leases, commitments, or any other agreements. On the Closing
Date, Futura has paid or performed in all material respects all obligations
required to be paid or performed by any of them to such date and will not be
in
default under any document, contract, agreement, lease, or other commitment
to
which any of them is a party.
4.9 Insurance.
All
insurance against losses or damages or other risks which are in force for the
benefit of any of Futura are set forth in Exhibit 4.9 hereto.
4.10 Liabilities.
Futura
has no liabilities, except as described in Exhibit 4.10 hereto, which
liabilities are also set forth in relevant detail on Futura Financial
Statements.
4.11 Proprietary
Rights.
Futura
owns or is duly licensed to use such trademarks and copyrights as are necessary
to conduct its business as presently conducted. The conduct of business by
Futura does not, to the best knowledge of Sellers, infringe upon the trademarks
or copyrights of any third party.
4.12 Internal
Controls.
Since
inception,
(a) There
have been no transactions except in accordance with the general or specific
authorization of management of Futura;
6
(b) Futura
has devised and maintained systems of internal accounting controls and
procedures (the “Internal
Controls”)
that
were designed with the objective of providing reasonable assurance that (1)
Futura transactions were properly authorized; (2) Futura assets were safeguarded
against unauthorized or improper use; and (3) Futura transactions were properly
recorded and reported, all (i)
to
permit the preparation of Futura financial statements in conformity with
generally accepted accounting principles and
(ii)
to
maintain accountability for assets and expenses.
(c) Futura’s
chief executive officer has evaluated Futura Internal Controls, which evaluation
included a review of the controls’ objectives and design and the controls’
implementation by Futura and its management. In the course of the Internal
Controls’ evaluation, Futura management sought to identify data errors, controls
problems, or acts of fraud and to confirm that appropriate corrective action,
including process improvements, were being undertaken. The Internal Controls
were also evaluated on an ongoing basis by other personnel in Futura
organization. Among other matters, Futura has sought to determine whether there
were any “significant deficiencies” or “material weaknesses” in the Internal
Controls, or whether Futura had identified any acts of fraud involving personnel
who had a significant role in the Internal Controls. For purposes of this
subsection, “significant deficiencies” means “reportable conditions” (control
issues that could have a significant adverse effect on the ability to record,
process, summarize and report financial data in the financial statements) and
“material weakness” means a particularly serious reportable condition where the
Internal Controls do not reduce to a relatively low level the risk that
misstatements caused by error or fraud may occur in amounts that would be
material in relation to Futura Financial Statements and not be detected within
a
timely period by employees in the normal course of performing their assigned
functions. Futura has also sought to deal with other Internal Controls matters
in the evaluation thereof, and, in each case if a problem were identified,
Futura considered what revision, improvement and/or correction to make in accord
with its on-going procedures.
4.13 Contracts
and Agreements.
Futura
is not a party to any material contracts or agreements in respect of the
operation of its business, except as listed in Exhibit 4.13 hereto.
4.14 Minute
Books.
The
minute books of Futura contains true, complete, and accurate records of all
meetings and other corporate actions of its shareholders and Board of Directors,
and true and accurate copies thereof have been delivered to counsel for IVIC
prior to the Closing Date. The signatures appearing on all documents contained
therein are the true signatures of the persons purporting to have signed the
same.
4.15 Litigation.
Except
as set forth in Exhibit 4.15, there are no actions, suits, proceedings, orders,
investigations, or claims (whether or not purportedly on behalf of Futura)
pending against or affecting Futura at law or in equity or before or by any
federal, state, municipal, or other governmental department, commission, board,
agency, or instrumentality, domestic or foreign, nor has any such action, suit,
proceeding, or investigation been pending or threatened in writing during the
12-month period preceding the date hereof, which, if adversely determined,
would
materially and adversely affect the financial condition of Futura which seeks
to
prohibit, restrict, or delay the consummation of the stock sale contemplated
hereby. Futura is not operating under or subject to, or in default with respect
to, any order, writ, injunction, or decree of any court or federal, state,
municipal, or other governmental department, commission, board, agency, or
instrumentality.
7
4.16 Taxes.
At the
Closing Date, all tax returns required to be filed with respect to the
operations or assets of Futura prior to Closing Date have been correctly
prepared in all material respects and timely filed, and all taxes required
to be
paid in respect of the periods covered by such returns have been paid in full
or
adequate reserves have been established for the payment of such taxes. Except
as
set forth in Exhibit 4.16, as of the Closing Date, Futura has not requested
any
extension of time within which to file any tax returns, and all known
deficiencies for any tax, assessment, or governmental charge or duty shall
have
been paid in full or adequate reserves have been established for the payment
of
such taxes. Futura tax returns are true and complete in all material respects.
No audits by federal or state authorities are currently pending or
threatened.
4.17 No
Defaults.
Futura
is not in default under or in violation of any provision of its Articles of
Incorporation or Bylaws. Futura is not in default under or in violation of
any
material provision of any indenture, mortgage, deed of trust, lease, loan
agreement, or other agreement or instrument to which it is a party or by which
it is bound or to which any of its assets are subject, if such default would
have a material, adverse effect on the financial condition or business of
Futura. Futura is not in violation of any statute, law, ordinance, order,
judgment, rule, regulation, permit, franchise, or other approval or
authorization of any court or governmental agency or body having jurisdiction
over it or any of its properties which, if enforced, would have a material,
adverse effect on the financial condition or business of Futura. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated herein, will conflict with or result in a breach
of or
constitute a default under any of the foregoing or result in the creation of
any
lien, mortgage, pledge, charge, or encumbrance upon any asset of Futura and
no
consents or waivers thereunder are required to be obtained in connection
therewith in order to consummate the transactions contemplated by this
Agreement.
4.18 Documents.
The
copies of all agreements and other instruments that have been delivered by
Sellers to IVIC are true, correct, and complete copies of such agreements and
instruments and include all amendments thereto.
4.19 Disclosure.
The
representations and warranties made by Sellers herein and in any schedule,
statement, certificate, or document furnished or to be furnished by Futura
and/or either of Sellers to IVIC pursuant to the provisions hereof or in
connection with the transactions contemplated hereby taken as a whole do not
and
will not as of their respective dates contain any untrue statements of a
material fact, or omit to state a material fact necessary to make the statements
made not misleading.
SECTION
5
INVESTIGATION;
PRESS RELEASE
5.1 Investigation.
(a) IVIC
acknowledges that it has made an investigation of Futura to confirm, among
other
things, the assets, liabilities, and status of business of Futura and the cash
position, accounts receivable, liabilities, and mortgages in process. In the
event of termination of this Agreement, IVIC will deliver to Sellers all
documents, work papers, and other materials and all copies thereof obtained
by
IVIC, or on its behalf, from Futura or Sellers, whether obtained before or
after
the execution hereof, will not use, directly or indirectly, any confidential
information obtained from Futura or Sellers hereunder or in connection herewith,
and will keep all such information confidential and not used in any way
detrimental to Futura or Sellers except to the extent the same is publicly
disclosed by Futura or Sellers.
8
(b) Sellers
acknowledge that they have made an investigation of IVIC, which has included,
among other things, the opportunity of discussions with executive officers
of
IVIC, and its accountants, investment bankers, and counsel. In the event of
termination of this Agreement, Sellers will deliver to IVIC all documents,
work
papers, and other materials and all copies thereof obtained by either of them,
or on behalf of either of them, from IVIC, whether obtained before or after
the
execution hereof and will not use, directly or indirectly, any confidential
information obtained from IVIC hereunder or in connection herewith, and will
keep all such information confidential and not used in any way detrimental
to
IVIC, except to the extent the same is publicly disclosed by IVIC.
(c) Except
in
the event that any party hereto discovers in the course of its respective
investigation any breach of a representation or warranty by the other party
hereto and does not disclose it to such other party prior to the Closing Date,
no investigation pursuant to this Section 5.1 shall affect or be deemed to
modify any representation or warranty made by any party hereto.
5.2 Press
Release.
IVIC
and Sellers shall agree with each other as to the form and substance of any
press releases and the filing of any documents with any federal or state agency
related to this Agreement and the transactions contemplated hereby and shall
consult with each other as to the form and substance of other public disclosures
related thereto; provided,
however,
that
nothing contained herein shall prohibit either party from making any disclosure
that its counsel deems necessary.
SECTION
6
BROKERAGE
6.1 Brokers
and Finders.
Except
for Stanton, Walker & Company, neither IVIC nor Futura nor the Sellers, or
any of their respective officers, directors, employees, or agents, has employed
any broker, finder, or financial advisor or incurred any liability for any
fee
or commissions in connection with initiating the transactions contemplated
herein. Stanton, Walker & Company has been engaged by IVIC and IVIC is
solely liable for any fee or commission earned by Stanton, Walker & Company.
Each party hereto agrees to indemnify and hold the other party harmless against
or in respect of any other commissions, finder’s fees, or brokerage fees
incurred or alleged to have been incurred with respect to initiating the
transactions contemplated herein as a result of any action of the indemnifying
party.
9
SECTION
7
CLOSING
AGREEMENTS AND POST-CLOSING
7.1 Closing
Agreements.
On the
Closing Date, the following activities shall occur, the following agreements
shall be executed and delivered, and the respective parties thereto shall have
performed all acts that are required by the terms of such activities and
agreements to have been performed simultaneously with the execution and delivery
thereof as of the Closing Date:
(a) Sellers
shall have executed and delivered documents to IVIC sufficient then and there
to
transfer record and beneficial ownership of the Futura Stock to
IVIC.
(b) IVIC
shall
have delivered to Sellers cash in the amount of $ 75,000 and the IVIC Shares
in
the names Xxxx X. Xxxxx and Xxxxxxx X. Xxxxx. The exact number of shares to
be
issued shall be determined by taking $ 550,000 and dividing that sum by the
average closing price of IVIC’s common stock for the ten day trading period
immediately prior to close.
(c) Sellers
shall have mutually executed Employment Agreements with Futura-Sub whereby
Sellers will have agreed to continue to act in their current capacities for
a
twenty four month period of time and thereafter by mutual agreement for
additional twelve month periods of time and to not compete with IVIC or any
of
its subsidiaries or affiliates for a period of thirty-six months from the Close.
SECTION
8
CONDITIONS
PRECEDENT TO IVIC’S OBLIGATIONS TO CLOSE
The
obligations of IVIC to consummate this Agreement are subject to satisfaction
on
or prior to the Closing Date of the following conditions:
8.1 Representations
and Warranties.
The
representations and warranties of Sellers contained in this Agreement shall
be
true and correct in all material respects on and as of the Closing Date, and
Sellers shall have performed in all material respects all of his obligations
hereunder theretofore to be performed.
8.2 Audited
Financial Statements.
Sellers
shall deliver three consecutive years of financial statements (Profit and Loss
Statements and Balance Sheets) ending on August 31, 2005 as well as subsequent
monthly statements. Subsequent to the Close, these financial statements shall
be
audited by an auditing firm which shall be selected by IVIC. The cost for this
audit shall be borne entirely by IVIC.
8.3 Other.
The
joint conditions precedent in Section 10 hereof shall have been satisfied and
all documents required for Closing shall be acceptable to Counsel for
IVIC.
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SECTION
9
CONDITIONS
PRECEDENT TO SELLERS’ OBLIGATIONS TO CLOSE
The
obligation of Sellers to consummate this Agreement is subject to the
satisfaction on or prior to the Closing Date of the following
conditions:
9.1 Representations
and Warranties.
The
representations and warranties of IVIC contained in this Agreement shall be
true
and correct in all material respects on and as of the Closing Date, and IVIC
shall have performed in all material respects all of its obligations hereunder
theretofore to be performed.
9.2 Other.
The
joint conditions precedent in Section 10 hereof shall have been
satisfied.
SECTION
10
JOINT
CONDITIONS PRECEDENT
The
obligations of IVIC and Sellers to consummate this Agreement shall be subject
to
satisfaction or waiver in writing by all parties of each and all of the
following additional conditions precedent at or prior to the Closing
Date:
10.1 Other
Agreements.
All of
the agreements contemplated by Section 7.1 of this Agreement shall have been
executed and delivered, and all acts required to be performed thereunder as
of
the Closing Date shall have been duly performed, including, without limitation,
completion of all exhibits to this Agreement.
10.2 Absence
of Litigation.
At the
Closing Date, there shall be no action, suit, or proceeding pending or
threatened against any of the parties hereto by any person, governmental agency,
or subdivision thereof, nor shall there be pending or threatened any action
in
any court or administrative tribunal, which would have the effect of inhibiting
the consummation of the transactions contemplated herein.
SECTION
11
CONFIDENTIALITY
11.1 IVIC
acknowledges that its principals have, and will, acquire information and
materials from Sellers and/or Futura and knowledge about the technology,
business, products, strategies, customers, clients and suppliers of Futura
and
that all such information, materials and knowledge acquired, are and will be
trade secrets and confidential and proprietary information of Futura
(collectively, such acquired information, materials, and knowledge are the
“Confidential
Information”).
IVIC,
itself, and behalf of its principals, covenants to hold such Confidential
Information in strict confidence, not to disclose it to others or use it in
any
way, commercially or otherwise, except in connection with the transactions
contemplated by this Agreement and not to allow any unauthorized person access
to such Confidential Information.
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11.2 The
Confidential Information disclosed by the Sellers and/or Futura to IVIC shall
remain the property of the disclosing party.
11.3 IVIC,
and
its principals, shall maintain in secrecy all Confidential Information disclosed
to them by Sellers and/or Futura using not less than reasonable care. IVIC,
and
its principals, shall not use or disclose in any manner to any third party
any
Confidential Information without the express written consent of the Sellers
unless or until the Confidential Information is:
(a) publicly
available or otherwise in the public domain; or
(b) rightfully
obtained by any third party without restriction; or
(c) disclosed
by Sellers and/or Futura without restriction pursuant to judicial action, or
government regulations or other requirements.
11.4 The
obligations of IVIC under Sections 11.1, 11.2, and 11.3 of this Agreement shall
expire upon the sooner of the Closing or one year from the date hereof as to
Confidential Information consisting of commercial and financial information
and
two years from the date hereof as to Confidential Information consisting of
technical information. For this purpose, technical information shall include
without limitation all developments, inventions, innovations, designs,
discoveries, trade secrets and know-how, whether or not patentable or
copyrightable.
SECTION
12
TERMINATION
AND WAIVER
12.1 Termination.
This
Agreement may be terminated and abandoned on the Closing Date by:
(a) the
mutual consent in writing of the parties hereto;
(b) IVIC,
if
the conditions precedent in Sections 8 and 10 of this Agreement have not been
satisfied or waived by the Closing Date; and
(c) Sellers,
if the conditions precedent in Sections 9 and 10 of this Agreement have not
been
satisfied or waived by the Closing Date.
If
this
Agreement is terminated pursuant to Section 12.1, the parties hereto shall
not
have any further obligations under this Agreement, and each party shall bear
all
costs and expenses incurred by it.
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SECTION
13
NATURE
AND SURVIVAL OF REPRESENTATIONS, ETC.
13.1 All
statements contained in any certificate or other instrument delivered by or
on
behalf of IVIC or Sellers pursuant to this Agreement or in connection with
the
transactions contemplated hereby shall be deemed representations and warranties
by such party. All representations and warranties and agreements made by IVIC
or
Sellers in this Agreement or pursuant hereto shall survive the Closing Date
hereunder until the expiration of the 12th
month
following the Closing Date.
SECTION
14
MISCELLANEOUS
14.1 Notices.
Any
notices or other communications required or permitted hereunder shall be
sufficiently given if written and delivered in person or sent by registered
mail, postage prepaid, addressed as follows:
to
Sellers: Xxxx
and
Xxxxxxx Xxxxx
XX
Xxx
0000
Xxxxxxxxxxxx,
XX 00000
to
IVIC: IVI
Communications, Inc.
Attn:
Xxxx
Xxxxxx
0000
X.
Xxxxxxx Xxxxxxxxx-Xxxxx 000
Xxx
Xxxxxxx, XX 00000
or
such
other address as shall be furnished in writing by the appropriate person, and
any such notice or communication shall be deemed to have been given as of the
date so mailed.
14.2 Time
of the Essence.
Time
shall be of the essence of this Agreement.
14.3 Costs.
Each
party will bear the costs and expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby.
14.4 Cancellation
of Agreement.
In the
event that this Agreement is canceled by mutual agreement of the parties or
by
failures of any of the conditions precedent set forth in Paragraphs 8, 9, and
10, neither Sellers nor IVIC shall be entitled to any damages, fees, costs,
or
other consideration.
14.5 Entire
Agreement and Amendment.
This
Agreement and documents delivered at the Closing Date hereunder contain the
entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement and supersedes all other agreements, written
or
oral, with respect thereto. This Agreement may be amended or modified in whole
or in part, and any rights hereunder may be waived, only by an agreement in
writing, duly and validly executed in the same manner as this Agreement or
by
the party against whom the waiver would be asserted. The waiver of any right
hereunder shall be effective only with respect to the matter specifically waived
and shall not act as a continuing waiver unless it so states by its
terms.
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14.6 Counterparts.
This
Agreement may be executed in one or more counterparts each of which shall be
deemed to constitute an original and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
party.
14.7 Governing
Law.
This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of California.
14.8 Attorneys’
Fees and Costs.
In the
event any party to this Agreement shall be required to initiate legal
proceedings to enforce performance of any term or condition of this Agreement,
including, but not limited to, the interpretation of any term or provision
hereof, the payment of moneys or the enjoining of any action prohibited
hereunder, the prevailing party shall be entitled to recover such sums, in
addition to any other damages or compensation received, as will reimburse the
prevailing party for reasonable attorneys’ fees and court costs incurred on
account thereof (including, without limitation, the costs of any appeal)
notwithstanding the nature of the claim or cause of action asserted by the
prevailing party.
14.9 Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, personal representatives, successors,
and
assigns, as the case may be.
14.10 Access
to Counsel.
Each
party hereto acknowledges that each has had access to legal counsel of her
or
its own choice and has obtained such advice therefrom, if any, as such party
has
deemed necessary and sufficient prior to the execution hereof. Each party hereto
acknowledges that the drafting of this Agreement has been a joint effort and
any
ambiguities or interpretative issues that may arise from and after the execution
hereof shall not be decided in favor or, or against, any party hereto because
the language reflecting any such ambiguities or issues may have been drafted
by
any specific party or her or its counsel.
14.11 Captions.
The
captions appearing in this Agreement are inserted for convenience of reference
only and shall not affect the interpretation of this Agreement.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
|
IVI
COMMUNICATIONS, INC.
|
||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Xxxx Xxxxxx
Chief Executive
Officer
|
||
SELLERS
| /s/ Xxxx X. Xxxxx | ||
|
Xxxx
X. Xxxxx, Seller
|
||
| /s/ Xxxxxxx X. Xxxxx | ||
|
Xxxxxxx X. Xxxxx, Seller |
||
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