Exhibit 10.31
[EXECUTION COPY]
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SHARE EXCHANGE AGREEMENT
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BETWEEN
NEW AMERICA NETWORK, INC.
and
WORLDWIDE WEB NETWORX CORPORATON
Dated as of September 23, 1999
TABLE OF CONTENTS
ARTICLE I. EXCHANGE OF SHARES...................................................................................1
Section 1.01. Exchange of the Shares for the WWWX Stock.................................................1
Section 1.02 Closing...................................................................................2
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF NAI................................................................2
Section 2.01. Making of Representations and Warranties.................................................2
Section 2.02. Organization and Corporate Power of NAI..................................................2
Section 2.03. Organization and Corporate Power of RQ...................................................2
Section 2.04. Corporate Records of RQ..................................................................3
Section 2.05. Authorization and Non-Contravention......................................................3
Section 2.06. Capitalization of RQ.....................................................................3
Section 2.07. Subsidiaries; Investments................................................................4
Section 2.08. Prior Transactions.......................................................................4
Section 2.09. Financial Statements: Projections........................................................4
Section 2.10. Absence of Undisclosed Liabilities.......................................................4
Section 2.11. Absence of Certain Developments..........................................................4
Section 2.12. Books and Records........................................................................4
Section 2.13. Tax Matters..............................................................................5
Section 2.14. Certain Contracts and Arrangements.......................................................5
Section 2.15. Litigation...............................................................................5
Section 2.16. Permits; Compliance with Laws............................................................5
Section 2.17. Labor and Employment Issues..............................................................6
Section 2.18. Knowledge and Experience.................................................................6
Section 2.19. Opportunity to Ask Questions.............................................................6
Section 2.20. Investment Intent........................................................................6
Section 2.21. Unregistered Securities Legend...........................................................6
Section 2.22. Investment Banking; Brokerage Fees.......................................................7
Section 2.23. Expenses.................................................................................7
Section 2.24. Investment Company.......................................................................7
Section 2.25. Additional Stock.........................................................................7
TABLE OF CONTENTS
Section 2.26 Title to Shares..........................................................................7
Section 2.27 Disclosure...............................................................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF WWWX.............................................................7
Section 3.01. Making of Representations and Warranties.................................................7
Section 3.02. Organization and Good Standing...........................................................7
Section 3.03. Authorization and Non-Contravention......................................................8
Section 3.04. Prior Transactions.......................................................................8
Section 3.05. Knowledge and Experience.................................................................8
Section 3.06. Opportunity to Ask Questions.............................................................8
Section 3.07. Investment Intent........................................................................9
Section 3.08. Unregistered Securities Legend...........................................................9
Section 3.09 Investment Banking; Brokerage Fees.......................................................9
Section 3.10 Prohibited Transactions..................................................................9
Section 3.11 Investment Company.......................................................................9
Section 3.12 Capitalization of WWWX...................................................................9
Section 3.13 Absence of Certain Developments.........................................................10
Section 3.14 Tax Matters.............................................................................10
Section 3.15 Litigation..............................................................................10
Section 3.16 Disclosure..............................................................................10
Section 3.17 No Securities Law Violations............................................................11
ARTICLE IV. CONDITIONS.........................................................................................11
Section 4.01. Conditions to the Obligations of the Parties............................................11
Section 4.02. Conditions to the Obligations of WWWX...................................................11
Section 4.03. Conditions to the Obligations of NAI....................................................12
ARTICLE V. TAG-ALONG BENEFITS..................................................................................13
Section 5.01 Rights; Procedure.......................................................................13
Section 5.02 WWWX Right to Withdraw Registration Statement...........................................13
TABLE OF CONTENTS
ARTICLE VI. SURVIVAL; INDEMNIFICATION..........................................................................13
Section 6.01 Survival of Representations, Warranties, Etc.............................................13
Section 6.02. Indemnification.........................................................................13
ARTICLE VII. MISCELLANEOUS.....................................................................................14
Section 7.01. Law Governing...........................................................................14
Section 7.02. Notices.................................................................................14
Section 7.03. Entire Agreement........................................................................15
Section 7.04. Successors and Assigns..................................................................15
Section 7.05. Captions and Gender.....................................................................15
Section 7.06. Execution in Counterparts...............................................................15
Section 7.07. Certain Remedies; Severability..........................................................15
Section 7.08 Amendments, Waivers.....................................................................16
Section 7.09 Further Assurances......................................................................16
Section 7.10 Press Releases..........................................................................16
ARTICLE VIII. CONFIDENTIALITY..................................................................................16
Section 8.01. Defined.................................................................................16
Section 8.02. Identification as Confidential..........................................................16
Section 8.03 Maintain Confidentiality................................................................16
Section 8.04 Unauthorized Disclosure.................................................................17
Section 8.05 Exceptions..............................................................................17
Section 8.06 Termination.............................................................................17
Section 8.07 Equitable Remedies......................................................................17
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (this "AGREEMENT") is made as of this
23rd day of September, 1999, by and between NEW AMERICA NETWORK, INC., a
Delaware corporation ("NAI") and WORLDWIDE WEB NETWORX CORPORATION, a Delaware
corporation ("WWWX"). WWWX and NAI are sometimes referred to herein individually
as a "PARTY" and collectively as the "PARTIES".
BACKGROUND
NAI and WWWX have agreed to exchange shares of stock at the closing (as
defined below) as follows: NAI will transfer 80 shares of the common stock of
Real Quest, Inc., a New Jersey corporation and wholly-owned subsidiary of NAI
("RQ"), which on the Closing Date (as defined below) will represent 80% of the
issued and outstanding equity interest in RQ (the "RQ SHARES") to WWWX in
consideration for WWWX's transfer of 1,500,000 shares of WWWX common stock (the
"WWWX STOCK") to NAI in accordance with the terms and provisions hereof. It is
the intent of the Parties that this exchange qualify as a tax free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended (the "CODE"), and all of the provisions hereof are to be construed
consistently with that intent.
Simultaneously with the execution of this Agreement, the Parties and RQ
have entered into a Real Quest, Inc. Shareholders' Agreement, (the "RQ
SHAREHOLDERS' AGREEMENT"), and RQ and the other shareholders of NAI Direct,
Inc., a Delaware corporation ("NAI DIRECT"), have entered into an NAI Direct
Shareholders' Agreement (the "NAI DIRECT SHAREHOLDERS' AGREEMENT"). Any terms
used in this Agreement and not otherwise defined herein have the respective
meanings ascribed to them in the RQ Shareholders' Agreement or the NAI Direct
Shareholders' Agreement.
AGREEMENT
NOW, THEREFORE, the Parties hereby agree as follows:
ARTICLE I. EXCHANGE OF SHARES.
Section 1.01. EXCHANGE OF THE SHARES FOR THE WWWX STOCK. subject to the
terms and conditions of this Agreement and in reliance on the representations
and warranties herein set forth, WWWX agrees to issue to NAI the WWWX Stock, and
NAI agrees to transfer to WWWX, at the Closing (as defined in SECTION 1.02), the
RQ Shares.
(a) WWWX will issue and deliver 750,000 shares of the WWWX
Stock to NAI at closing; and
(b) WWWX will issue 750,000 shares of the WWWX Stock to NAI to
be held in escrow according to the terms of the Escrow Agreement
attached hereto as EXHIBIT 1.01 to be released and delivered to NAI
upon the meeting of the Revenue Goal as set out in the RQ Shareholders'
Agreement.
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Section 1.02. CLOSING. The exchange and delivery of the RQ Shares, and
the issuance and delivery of the WWWX Stock (the "CLOSING") shall take place at
the offices of WWWX, 000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxx, XX, subject
to the satisfaction or waiver of all of the conditions to Closing set forth in
this Agreement. The date the Closing occurs is referred to herein as the
"CLOSING DATE." At the Closing, NAI shall deliver to WWWX the RQ Shares, in
WWWX's name, and WWWX shall deliver the WWWX Stock as described in Section
1.01(a) and (b), registered in NAI's name or the name of NAI's nominee(s).
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF NAI.
Section 2.01. MAKING OF REPRESENTATIONS AND WARRANTIES. As a material
inducement to WWWX to enter into this Agreement and consummate the transactions
contemplated hereby, NAI hereby makes to WWWX the representations and warranties
contained in this ARTICLE II. Such representations and warranties are subject to
the qualifications and exceptions, if any, set forth in the disclosure schedule
delivered to WWWX pursuant to this Agreement (the "DISCLOSURE SCHEDULE"). The
Representations and Warranties of this ARTICLE II shall apply to any and all
agreements that are contemplated by this Agreement and that are entered into by
WWWX and any affiliates of NAI.
Section 2.02. ORGANIZATION AND CORPORATE POWER OF NAI. NAI is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware, and is duly qualified or registered to do business as
a foreign corporation in each jurisdiction in which the failure to be so
qualified or registered would have a Material Adverse Effect. As used in this
Agreement, the term "MATERIAL ADVERSE EFFECT" means any change or effect that is
materially adverse to the properties, assets, business, financial condition,
prospects or results of operations of the entity designated. NAI has all
required corporate power and authority to enter into and perform this Agreement
and the agreements contemplated hereby to which NAI is a party (such agreements,
together with this Agreement being sometimes hereinafter referred to as, the
"TRANSACTION DOCUMENTS") and to carry out the transactions contemplated hereby
and thereby, including without limitation the exchange of the RQ Shares.
Section 2.03. ORGANIZATION AND CORPORATE POWER OF RQ. RQ is a
corporation duly organized, validly existing and in good standing under the laws
of the state of New Jersey, and is duly qualified or registered to do business
as a foreign corporation in each jurisdiction in which the failure to be so
qualified or registered would have a Material Adverse Effect. As of the Closing
Date, RQ has all required corporate power and authority to carry on its business
as presently conducted, to enter into and perform the agreements contemplated by
this Agreement and to carry out the transactions contemplated hereby and
thereby, including without limitation the issuance of the RQ Shares. The copies
of the Certificate of Incorporation and By-laws of RQ, as amended to date, which
have been furnished to WWWX by RQ, are correct and complete at the date hereof
(the "CERTIFICATE OF INCORPORATION" and the "BY-LAWS," respectively). RQ is not
in violation of any term of its Certificate of Incorporation or By-laws. RQ is
not in violation of any term of any agreement, instrument, judgment, decree,
order, statute, rule or government regulation applicable to RQ or to which RQ is
a party.
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Section 2.04. CORPORATE RECORDS OF RQ. The corporate record books of RQ
accurately reflect all material corporate actions taken by its shareholders and
board of directors (the "RQ BOARD") and committees. The copies of the corporate
records of RQ, as made available to WWWX for review, are true and complete
copies of the originals of such documents.
Section 2.05. AUTHORIZATION AND NON-CONTRAVENTION. As of the Closing
Date, this Agreement and the other Transaction Documents are valid and binding
obligations of NAI and RQ enforceable in accordance with their terms, subject to
the laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules and laws governing specific performance, injunctive
relief and other equitable remedies. The execution, delivery and performance of
this Agreement, all other Transaction Documents and all agreements, documents
and instruments contemplated hereby or thereby and the issuance of the RQ
Shares, have been duly authorized by all necessary corporate or other action on
the part of NAI or RQ. The execution, delivery and performance of this Agreement
and the other Transaction Documents and the issuance of the RQ Shares, will not
(i) violate, conflict with or result in a default under any material contract or
obligation to which RQ or NAI is a party or by which it or its assets are bound,
or any provision of the certificate of incorporation or by-laws of RQ or NAI, or
cause the creation of any encumbrance upon any of the material assets of an RQ
or NAI; (ii) violate or result in a violation of, or constitute a default
(whether after the giving of notice, lapse of time or both) under, any provision
of any law, regulation or rule, or any order of, or any restriction imposed by,
any court or other governmental agency applicable to RQ or NAI; (iii) require
from RQ or NAI any notice to, declaration or filing with, or consent or approval
of any governmental authority or other third party; or (iv) accelerate any
obligation under, or give rise to a right of termination of, any material
agreement, permit, license or authorization to which RQ or NAI is a party or by
which it is bound.
Section 2.06. CAPITALIZATION OF RQ. As of the Closing, and after giving
effect to the transactions contemplated hereby, the authorized capital stock of
RQ will consist only of 2,000,000 shares of common stock, par value $.0l per
share, of RQ ("COMMON STOCK") of which 100 Shares will be issued and
outstanding. The outstanding shares of Common Stock are held beneficially and of
record by the persons identified in SECTION 2.06 of the Disclosure Schedule in
the amounts indicated thereon. Neither RQ nor NAI has issued or agreed to issue,
and is not obligated to issue, nor are there, any outstanding warrants, options
or other rights to purchase or acquire any shares of RQ's capital stock, nor any
outstanding securities convertible into such shares or any warrants, options or
other rights to acquire any such convertible securities. As of the Closing, and
after giving effect to the transactions contemplated hereby, all of the
outstanding shares of capital stock of RQ will have been duly and validly
authorized and issued and will be fully paid and nonassessable and will have
been offered, issued, sold and delivered in compliance with applicable federal
and state securities laws and not subject to any preemptive rights. There are no
preemptive rights, rights of first refusal, put or call rights or obligations or
anti-dilution rights with respect to the issuance, sale or redemption of any of
RQ's capital stock. There are no rights to have RQ's Common Stock registered for
sale to the public in connection with the laws of any jurisdiction, and there
are no agreements, other than this Agreement and the RQ Shareholders' Agreement,
relating to the voting of RQ's voting securities or restrictions on the transfer
of RQ's capital stock.
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Section 2.07. SUBSIDIARIES; INVESTMENTS. Other than NAI Direct when
formed, RQ does not have any subsidiaries. RQ does not own or have any direct or
indirect interest in or Control over any corporation, partnership, joint venture
or other entity of any kind. The term "CONTROL" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. As used in this Agreement, the term
"PERSON" shall mean an individual, a corporation, an association, a partnership,
an estate, a trust or any other entity or organization.
Section 2.08. PRIOR TRANSACTIONS. Except as included in Section 2.08 of
the Disclosure Schedule, neither RQ nor NAI is party to, or otherwise obligated
in any manner under, any agreement, arrangement or understanding regarding
acquisitions, mergers, consolidations, asset sales, joint ventures or similar
transactions with an internet company or with regard to internet operations.
Section 2.09. FINANCIAL STATEMENTS: PROJECTIONS. Included in Section
2.09 of the Disclosure Schedule are the following financial statements of RQ,
all of which statements (including the footnotes and schedules thereto) fairly
present in all material respects the financial condition of RQ as of the dates
of such statements and the results of its operations and its cash flows for the
periods covered thereby: (a) an unaudited balance sheet as at August 31, 1999
and the related statements of income, retained earnings and cash flow for the
year then ended, in each case certified by the Chief Financial Officer of NAI.
The unaudited balance sheet as of August 31, 1999 is hereafter referred to as
the "MOST RECENT BALANCE SHEET". Nothing has come to the attention of the
management of NAI since such respective dates which would indicate that such
financial statements were not true and correct in all material respects as of
the date thereof. The financial statements of RQ, all of which have been made
available to WWWX, were previously consolidated with those of NAI, and are
complete and correct in all material respects and have been prepared in
accordance with standard practices for closely held privately owned companies.
Section 2.10. ABSENCE OF UNDISCLOSED LIABILITIES. RQ does not have any
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown (including without limitation,
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for taxes due or then accrued or to become due or contingent or
potential liabilities relating to activities of RQ or the conduct of its
business prior to the date hereof or the Closing, as the case may be, regardless
of whether claims in respect thereof had been asserted as of such date), except
liabilities incurred as a result of or arising out of the transactions
contemplated under this Agreement.
Section 2.11. ABSENCE OF CERTAIN DEVELOPMENTS. Since the date of the
Most Recent Balance Sheet, RQ has conducted its business only in the ordinary
course consistent with past practice and, except as set forth in Section 2.11 of
the Disclosure Schedule, there has not been any event or development that has
had or is likely to have a Material Adverse Effect on RQ.
Section 2.12. BOOKS AND RECORDS. The books of account, minute books,
stock record books, and other records of NAI and RQ, all of which have been made
available to WWWWX, are complete and correct in all material respects and have
been maintained in accordance with standard practices for closely held privately
owned companies. The minute books of NAI and
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RQ contain records that are accurate in all material respects of all meetings
and other corporate action held of their respective shareholders and boards of
directors (including committees of their respective boards of directors.) At the
Closing, all of such books and records will be in the possession of WWWX.
Section 2.13. TAX MATTERS. RQ has at all times since inception
qualified and presently qualifies as an entity taxable as a "C" corporation as
defined in Section 1361 of the Code. RQ has filed all federal, state, local and
foreign tax returns required to be filed by it through the date hereof, and has
paid or caused to be paid all federal, state, local, foreign and other taxes,
including without limitation income taxes, estimated taxes, excise taxes, sales
taxes, use taxes, gross receipts taxes, franchise taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes, transfer taxes and
property taxes, whether or not measured in whole or in part by net income
(collectively, "TAXES"), required to be paid by RQ through the date hereof
whether disputed or not, except Taxes which have not yet accrued or otherwise
become due, for which adequate provision has been made in the pertinent
financial statements referred to in Section 2.10 above or which the failure to
pay would not have a Material Adverse Effect on RQ. The provisions for Taxes on
the Most Recent Balance Sheet are sufficient as of its date for the payment of
all accrued and unpaid Taxes of any nature of RQ, and any applicable Taxes owing
by RQ to any jurisdiction, whether or not assessed or disputed. All Taxes and
other assessments and levies which RQ is required to withhold or collect have
been withheld and collected and have been paid over to the proper governmental
authorities. Neither the Internal Revenue Service (the "IRS") nor any other
governmental authority is now asserting or threatening to assert against RQ any
deficiency or claim for additional Taxes. There has not been any audit of any
tax return filed by RQ. No waiver or agreement by RQ is in force for the
extension of time for the assessment or payment of any Taxes. At all times prior
to Closing, RQ and NAI have been consolidated for federal tax purposes.
Section 2.14. CERTAIN CONTRACTS AND ARRANGEMENTS. Except as set forth
in Section 2.14 of the Disclosure Schedule (with true and correct copies
delivered to WWWX), RQ is not a party or subject to or bound by any contract or
agreement that is material to RQ.
Section 2.15. LITIGATION. There is no litigation, claim, complaint,
action, suit or governmental or administrative proceeding or investigation
pending or threatened against RQ or affecting RQ's properties or assets, or, as
to matters related to RQ, against any officer, director, shareholder or key
employee of RQ, nor has there occurred any event nor does there exist any
condition on the basis of which any such claim may be asserted.
Section 2.16. PERMITS; COMPLIANCE WITH LAWS. As of the Closing Date RQ
will have all necessary franchises, authorizations, approvals, orders, consents,
licenses, certificates, permits, registrations, qualifications or other rights
and privileges (collectively "PERMITS") necessary to permit it to own its
property and to conduct its business as it is presently conducted and all such
Permits are valid and in full force and effect, except where the failure to
obtain such Permit would not have a Material Adverse Effect. No Permit is
subject to termination as a result of the execution of this Agreement or the
other Transaction Documents or the consummation of the transactions contemplated
hereby or thereby. RQ is now, and has heretofore been, in compliance with all
applicable statutes, ordinances, orders, rules and regulations promulgated by
any federal,
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state, municipal or other governmental authority which apply to the conduct of
its business, except for any such non-compliance or violation that, individually
or in the aggregate, would not have a Material Adverse Effect.
Section 2.17. LABOR AND EMPLOYMENT ISSUES. As of the date hereof, RQ
has no liability to employees or related to any employee benefit plan.
Section 2.18. KNOWLEDGE AND EXPERIENCE. NAI represents that it is an
"accredited investor" as such term is defined in RULE 501 under the Securities
Act of 1933, as amended (the "SECURITIES ACT") or that it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investment in the WWWX Stock contemplated by this
Agreement and making an informed investment decision with respect thereto. NAI
understands, agrees and acknowledges that except and until a registration
statement is filed with respect to the WWWX Stock, the WWWX Stock has not been
and is not being registered under the Securities Act or under the "blue sky"
laws of any jurisdiction and that WWWX, in issuing the WWWX Stock, is relying
upon, among other things, the representations of NAI contained in this ARTICLE
II.
Section 2.19. OPPORTUNITY TO ASK QUESTIONS. NAI represents that it has
had the opportunity to conduct a due diligence review of WWWX, including the
opportunity to ask questions and receive answers concerning the terms and
conditions of the WWWX Stock issued hereunder, as well as the opportunity to
obtain additional information necessary to verify the accuracy of information
furnished in connection with the WWWX Stock issued hereunder which NAI possesses
or can acquire without unreasonable effort or expense. Notwithstanding the
foregoing, NAI has relied upon the representations and warranties of WWWX set
forth in this Agreement, and this SECTION 2.19 shall not be interpreted to limit
that reliance.
Section 2.20. INVESTMENT INTENT. NAI is acquiring the WWWX Stock for
its own account, for investment, and not with a present view to, or for resale
in connection with, any "distribution" thereof within the meaning of the
Securities Act. NAI was not formed or organized for the purpose of acquiring the
WWWX Stock.
Section 2.21. UNREGISTERED SECURITIES LEGEND. NAI understands that,
because the WWWX Stock has not been registered under the Securities Act, it
cannot dispose of any or all of the WWWX Stock unless such securities are
subsequently registered under the Securities Act or exemptions from such
registration are available. NAI understands that each instrument or certificate
representing the WWWX Stock issuable hereunder will bear the following
restrictive legend or one substantially similar thereto:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the `Act') or any
applicable state securities law. These shares may not be sold,
transferred or assigned in the absence of an effective
registration statement for these shares under the Act or an
opinion of the Corporation's counsel that registration is not
required under the Act."
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Section 2.22. INVESTMENT BANKING; BROKERAGE FEES. Neither NAI nor RQ
has incurred or become liable for any broker's or finder's fee, banking fees or
similar compensation, relating to or in connection with the transactions
contemplated by this Agreement.
Section 2.23. EXPENSES. NAI and RQ have paid all of their own expenses
incurred in connection with this transaction.
Section 2.24. INVESTMENT COMPANY. Neither NAI nor RQ is an Investment
Company as defined in Sections 368(a)(2)(F)(iii) and (iv) of the Code.
Section 2.25. ADDITIONAL STOCK; REACQUISITION. RQ has no plan or
intention to issue additional shares of its stock. NAI has no plan or intention
to reacquire any of the RQ Shares.
Section 2.26. TITLE TO SHARES.
(a) all of the capital stock of RQ is owned by NAI free and
clear of all Liens, and
(b) the sale and delivery of the RQ Shares to WWWX pursuant to
this Agreement will vest in WWWX legal and beneficial title to the RQ Shares
free and clear of any Lien.
For purposes of this SECTION 2.26, "Lien" means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, charge, encumbrance, lien
(statutory or other), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
Section 2.27. DISCLOSURE. None of the representations and warranties of
NAI and none of the materials provided to WWWX in connection with this Agreement
contain or will contain any untrue statement of a material fact or omit or will
omit or misstate a material fact necessary in order to make the statements
contained herein and therein not misleading. NAI knows no fact which resulted,
or which, in its reasonable judgment, will result in a material change in the
business, operations or assets of RQ or NAI which is not set forth in this
Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF WWWX.
Section 3.01. MAKING OF REPRESENTATIONS AND WARRANTIES. As a material
inducement to NAI to enter into this Agreement and consummate the transactions
contemplated hereby, WWWX hereby makes to NAI the representations and warranties
contained in this ARTICLE III. Such representations and warranties are subject
to the qualifications and exceptions, if any, set forth in the disclosure
schedule delivered to NAI pursuant to this Agreement (the "DISCLOSURE
SCHEDULE"). The Representations and Warranties of this ARTICLE III shall apply
to any and all agreements that are contemplated by this Agreement and that are
entered into by WWWX and NAI and/or any affiliates of NAI.
Section 3.02. ORGANIZATION AND GOOD STANDING. WWWX is duly organized,
validly existing and in good standing under the laws of Delaware, and is duly
qualified or registered to do business as a foreign corporation in each
jurisdiction in which the failure to be so qualified or registered would have a
Material Adverse Effect . WWWX has all required corporate power and
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authority to carry on its business as presently conducted, to enter into and
perform this Agreement and the agreements contemplated hereby to which WWWX is a
party and to carry out the transactions contemplated hereby and thereby,
including the exchange of the WWWX Stock. WWWX is not in violation of any term
of its certificate of incorporation or by-laws. WWWX is not in violation of any
term of any agreement, instrument, judgment, decree, order, statute, rule or
government regulation applicable to WWWX or to which WWWX is a party.
Section 3.03. AUTHORIZATION AND NON-CONTRAVENTION. This Agreement and
all documents executed by WWWX pursuant hereto are valid and binding obligations
of WWWX, enforceable in accordance with their terms, subject to the laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and rules and laws governing specific performance, injunctive relief and other
equitable remedies. The execution, delivery and performance of this Agreement
and all agreements, documents and instruments contemplated hereby and the
issuance of the WWWX Stock have been duly authorized by all necessary corporate
or other action of WWWX. The execution by WWWX of this Agreement and the
performance of any transaction contemplated hereby and the issuance of the WWWX
Stock will not (i) violate, conflict with or result in a default under any
material contract or obligation to which WWWX is a party or by which it or its
assets are bound, or any provision of the organizational documents of WWWX, or
cause the creation of any encumbrance upon any of the material assets of WWWX;
(ii) violate or result in a violation of, or constitute a default (whether after
the giving of notice, lapse of time or both) under, any provision of any law,
regulation or rule, or any order of, or any restriction imposed by, any court or
other governmental agency applicable to WWWX; (iii) require from WWWX any notice
to, declaration or filing with, or consent or approval of any governmental
authority or other third party; or (iv) accelerate any obligation under, or give
rise to a right of termination of, any material agreement, permit, license or
authorization to which WWWX is a party or by which WWWX is bound.
Section 3.04. PRIOR TRANSACTIONS. Except has included in SECTION 3.04
of the Disclosure Schedule, WWWX is not party to, or otherwise obligated in any
manner under, any agreement, arrangement or understanding regarding
acquisitions, mergers, consolidations, asset sales, joint ventures or similar
transactions with any company engaged in commercial real estate business
activities or with regard to a commercial real estate web site.
Section 3.05. KNOWLEDGE AND EXPERIENCE. WWWX represents that it has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment contemplated by
this Agreement and making an informed investment decision with respect thereto.
WWWX represents that it is an "accredited investor" as such term is defined in
Rule 501 under the Securities Act. WWWX understands, agrees and acknowledges
that the RQ Shares have not been and are not being registered under the
Securities Act or under the "blue sky" laws of any jurisdiction and that NAI, in
transferring the RQ Shares to WWWX, is relying upon, among other things, the
representations of WWWX contained in this ARTICLE III.
Section 3.06. OPPORTUNITY TO ASK QUESTIONS. WWWX represents that it has
had the opportunity to conduct a due diligence review of RQ, including the
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of securities purchased hereunder, as well as the
opportunity to obtain additional information necessary to verify the
8
accuracy of information furnished in connection with such offering which RQ
possesses or can acquire without unreasonable effort or expense. Notwithstanding
the foregoing, WWWX has relied upon the representations and warranties of NAI
and RQ set forth in this Agreement, and this SECTION 3.06 shall not be
interpreted to limit that reliance.
Section 3.07. INVESTMENT INTENT. WWWX is acquiring the RQ Shares for
its own account, for investment, and not with a present view to, or for resale
in connection with, any "distribution" thereof within the meaning of the
Securities Act. WWWX was not formed or organized for the purpose of acquiring
the RQ Shares.
Section 3.08. UNREGISTERED SECURITIES LEGEND. WWWX understands that,
because the RQ Shares have not been registered under the Securities Act, it
cannot dispose of any or all of the RQ Shares unless such securities are
subsequently registered under the Securities Act or exemptions from such
registration are available. WWWX understands that each instrument or certificate
representing the RQ Shares issuable hereunder will bear the following
restrictive legend or one substantially similar thereto:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the `ACT') or any
applicable state securities law. These shares may not be sold,
transferred or assigned in the absence of an effective
registration statement for these shares under the Act or an
opinion of the Corporation's counsel that registration is not
required under the Act."
Section 3.09. INVESTMENT BANKING; BROKERAGE FEES. WWWX has not incurred
nor has it become liable for any broker's or finder's fee, banking fees or
similar compensation relating to or in connection with the transactions
contemplated hereby.
Section 3.10. PROHIBITED TRANSACTIONS. WWWX has no plan or intention to
liquidate RQ; to merge RQ into another corporation; to cause RQ to sell or
otherwise dispose of any of its assets, except for dispositions made in the
ordinary course of business; or to sell or otherwise dispose of any of the RQ
Shares. WWWX has no plan or intention to reacquire any of the WWWX Stock.
Section 3.11. INVESTMENT COMPANY. WWWX is not an investment company as
defined in Sections 368(a)(2)(F)(iii) and 368(a)(2)(F)(iv) of the Code.
Section 3.12. CAPITALIZATION OF WWWX. As of the Closing, and after
giving effect to the transactions contemplated hereby, the authorized capital
stock of WWWX will consist only of 100,000,000 shares of common stock, par value
$.00l per share, of WWWX of which 36,651,137 shares will be issued and
outstanding and 10,000,000 shares of preferred stock, par value $.0l per share,
of WWWX of which no shares will be issued and outstanding. Except as listed in
SECTION 3.12 of the Disclosure Schedule, WWWX has neither issued nor agreed to
issue, and is not obligated to issue, nor are there, any outstanding warrants,
options or other rights to purchase or acquire any shares of its capital stock,
nor any outstanding securities convertible into such shares or any warrants,
options or other rights to acquire any such convertible securities. As of the
Closing, and after giving effect to the transactions contemplated hereby, all of
the
9
WWWX Stock will have been duly and validly authorized and issued and will be
fully paid and nonassessable and will have been delivered in compliance with
applicable federal and state securities laws and not subject to any preemptive
rights. Except as listed in Section 3.12 of the Disclosure Schedule, there are
no pre-emptive rights, rights of first refusal, put or call rights or
obligations or anti-dilution rights with respect to the issuance, sale or
redemption of any of WWWX's capital stock. Except as listed in Section 3.12 of
the Disclosure Schedule, there are no rights to have WWWX's common stock
registered for sale to the public in connection with the laws of any
jurisdiction, and there are no agreements relating to the voting of WWWX's
voting securities or restrictions on the transfer of WWWX's common stock.
Section 3.13. ABSENCE OF CERTAIN DEVELOPMENTS. Since the date of the
WWWX balance sheet provided to NAI, WWWX has conducted its business only in the
ordinary course consistent with past practice and, except as set forth in
Section 3.13 of the Disclosure Schedule, there has not been any event or
development that has had or is likely to have a Material Adverse Effect on WWWX.
Section 3.14. TAX MATTERS. WWWX has filed all federal, state, local and
foreign tax returns required to be filed by it through the date hereof, and has
paid or caused to be paid all federal, state, local, foreign and other taxes,
including without limitation income taxes, estimated taxes, excise taxes, sales
taxes, use taxes, gross receipts taxes, franchise taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes, transfer taxes and
property taxes, whether or not measured in whole or in part by net income
(collectively, "WWWX TAXES"), required to be paid by WWWX through the date
hereof whether disputed or not, except WWWX Taxes which have not yet accrued or
otherwise become due, for which adequate provision has been made in the
pertinent financial statements or which the failure to pay would not have a
Material Adverse Effect on WWWX. The provisions for WWWX Taxes on the financial
statements of WWWX are sufficient as of its date for the payment of all accrued
and unpaid WWWX Taxes of any nature of WWWX, and any applicable WWWX Taxes owing
by WWWX to any jurisdiction, whether or not assessed or disputed. All WWWX Taxes
and other assessments and levies which WWWX is required to withhold or collect
have been withheld and collected and have been paid over to the proper
governmental authorities. Neither the IRS nor any other governmental authority
is now asserting or threatening to assert against WWWX any deficiency or claim
for additional WWWX Taxes. There has not been any audit of any tax return filed
by WWWX. No waiver or agreement by WWWX is in force for the extension of time
for the assessment or payment of any WWWX Taxes.
Section 3.15. LITIGATION. Except as listed in Section 3.15 of the
Disclosure Schedule, there is no litigation, claim, complaint, action, suit or
governmental or administrative proceeding or investigation pending or threatened
against WWWX or affecting WWWX's properties or assets, or, as to matters related
to WWWX, against any officer, director, shareholder or key employee of WWWX, nor
has there occurred any event nor does there exist any condition on the basis of
which any such claim may be asserted.
Section 3.16. DISCLOSURE. None of the representations and warranties of
WWWX and none of the materials provided to NAI in connection with this Agreement
contain or will contain any untrue statement of a material fact or omit or will
omit or misstate a material fact necessary in order to make the statements
contained herein and therein not misleading. WWWX knows no
10
fact which resulted, or which, in its reasonable judgment, will result in a
material change in the business, operations or assets of WWWX which is not set
forth in this Agreement.
Section 3.17. NO SECURITES LAW VIOLATIONS. To its knowledge, neither
WWWX nor anyone acting on its behalf has offered securities of WWWX for sale to,
or solicited any offers to the buy the same from, or sold securities of WWWX to,
any person or organization, in any case so as to subject WWWX, its promoter,
directors or officers to any liability under the Securities Act or any state
securities or "blue sky" law, or any other applicable laws.
ARTICLE IV. CONDITIONS.
Section 4.01. CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The
obligation of WWWX and NAI to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the Closing, of the
following conditions precedent:
(a) NO ACTIONS OR PROCEEDINGS. No action or proceeding by or
before any court, administrative body or governmental agency shall have been
instituted or threatened which seeks to enjoin, restrain or prohibit, or might
result in damages in respect of, this Agreement or any other Transaction
Document or the complete consummation of the transactions contemplated by this
Agreement or any other Transaction Document, and which would in the reasonable
judgment of WWWX or NAI make it inadvisable to consummate such transactions. No
law or regulation shall be in effect and no court order shall have been entered
in any action or proceeding instituted by any party which enjoins, restrains or
prohibits this Agreement or any other Transaction Document or the complete
consummation of the transactions contemplated by this Agreement or any other
Transaction Document.
(b) NAI DIRECT SHAREHOLDERS AGREEMENT. The NAI Direct
Shareholders' Agreement must have been duly executed and delivered by the
parties thereto.
(c) RQ SHAREHOLDERS AGREEMENT. The RQ Shareholders' Agreement
must have been duly executed and delivered by the parties thereto.
(d) EMPLOYMENT AGREEMENTS. The Employment Agreements between
(i) Xxxxxx X. Xxxx and NAI Direct and (ii) Xxxxxxx Xxxx and NAI Direct must have
been duly executed and delivered by the parties thereto.
(e) ESCROW AGREEMENT. The Escrow Agreement must have been duly
executed and delivered by the parties thereto.
(f) FORMATION OF NAI DIRECT. NAI Direct must have been formed
as a Delaware corporation consistent with the terms of the Shareholders
Agreement
Section 4.02. CONDITIONS TO THE OBLIGATIONS OF WWWX. The obligation of
WWWX to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
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(a) REPRESENTATIONS, WARRANTIES; COVENANTS Each of the
representations and warranties of NAI made pursuant to this Agreement and any
other Transaction Document shall be true and correct in all material respects on
and as of the Closing Date (it being understood that representations and
warranties made "as of the date hereof" shall also be deemed to have been made
as of the Closing Date); NAI shall, on or before the Closing Date, have
performed and satisfied all of its agreements set forth herein or therein which
by the terms hereof or thereof are to be performed and satisfied on or before
the Closing Date, including without limitation, delivery of the RQ Shares, and
NAI shall have delivered to WWWX a certificate signed by it and dated as of the
Closing Date certifying to the foregoing effect.
(b) NAI SECRETARY'S CERTIFICATE. WWWX has received a
certificate of the secretary of NAI, attaching (a) the certificate of
incorporation of NAI, (b) the bylaws of NAI, (c) resolutions of the board of
directors of NAI authorizing the transactions contemplated by this Agreement and
the other Transaction Documents (d) an incumbency certificate of NAI, (e) a good
standing certificate for NAI from the Secretary of the State of Delaware and (f)
a New Jersey State foreign qualification certificate.
(c) RQ SECRETARY'S CERTIFICATE. WWWX has received a
certificate of the secretary of RQ, attaching (i) the certificate of
incorporation of RQ, (b) the bylaws of RQ, (c) resolutions of the board of
directors of RQ authorizing the transactions contemplated by this Agreement and
the other Transaction Documents, (d) an incumbency certificate of RQ, and(e) a
good standing certificate for RQ from the Secretary of the State of New Jersey.
(d) DUE DILIGENCE. WWWX shall have completed, to its
reasonable satisfaction, the due diligence of RQ on or before September 14,
1999.
Section 4.03. CONDITIONS TO THE OBLIGATIONS OF NAI. The obligations of
NAI to consummate the transactions contemplated by this Agreement are subject to
the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations and warranties of WWWX contained in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, with the
same effect as though made on and as of the Closing Date (it being understood
that representations and warranties made "as of the date hereof" shall also be
deemed to have been made as of the Closing Date); WWWX shall, on or before the
Closing Date, have performed and satisfied all of its agreements set forth
herein which by the terms hereof are to be performed and satisfied by WWWX on or
before the Closing Date; and WWWX has delivered to NAI a certificate signed on
its behalf and dated as of the Closing Date certifying to the foregoing effect.
(a) (b) WWWX SECRETARY'S CERTIFICATE. NAI has received a
certificate of the secretary of WWWX, attaching (i) the certificate of
incorporation of WWWX , (b) the bylaws of WWWX, (c) resolutions of the board of
directors of WWWX authorizing the transactions contemplated by this Agreement
and the other Transaction Documents, (d) an incumbency certificate of WWWX, (e)
a good standing certificate for WWWX from the Secretary of the State of Delaware
and (f) such foreign qualification certificates as are necessary for WWWX to
12
conduct its business as now conducted and as contemplated to be conducted after
the Closing Date.
ARTICLE V. NAI PIGGYBACK REGISTRATION RIGHTS.
Section 5.01. RIGHTS; PROCEDURE. If WWWX proposes to file a
registration statement or statements under the Securities Act (a "REGISTRATION
STATEMENT") for the public sale of equity of WWWX (other than in connection with
a merger or pursuant to Form X-0, Xxxx X-0 or comparable registration statement)
and if any person other than those identified in Section 5.01 of the Disclosure
Schedule has the rights to register its shares of WWWX under such registration
statement; WWWX will give written notice by registered mail, at least 30 days
prior to the filing of each such Registration Statement, to NAI of its intention
to do so. If NAI notifies WWWX within 10 business days after receipt of any such
notice of its desire to sell the WWWX Stock (the "PIGGYBACK SHARES") in such
proposed Registration Statement, WWWX will afford NAI the opportunity to have
any Piggyback Shares owned by NAI registered under such Registration Statement
at no cost to NAI except for any incremental underwriter's commission incurred
in connection with the Piggyback Shares; PROVIDED, HOWEVER, that in the case of
an underwritten offering, if the managing underwriter notifies NAI or WWWX that
the inclusion in the Registration Statement of any portion of the Piggyback
Shares would have an adverse effect on such underwritten offering, then the
managing underwriter may limit the number of Piggyback Shares to be included in
such Registration Statement only to the extent necessary to avoid such adverse
effect (an "UNDERWRITER'S CUTBACK"). Such limit will apply pro rata among
selling shareholders other than those identified in Section 5.01 of the
Disclosure Schedule based upon the number of Piggyback Shares such selling
shareholders have requested to be so included. Notwithstanding the provisions of
this Section, NAI waives its right to have the WWWX Stock registered on any
WWWX's Registration Statement filed on or before January 1, 2000.
Section 5.02. WWWX RIGHT TO WITHDRAW REGISTRATION STATEMENT.
Notwithstanding the provisions of Section 5.01, WWWX shall have the right at any
time after it shall have given written notice pursuant to this Section
(irrespective of whether a written request for inclusion of any such Piggyback
Shares shall have been made) to elect not to file any such proposed Registration
Statement or to withdraw the same after the filing but prior to the effective
date thereof.
ARTICLE VI. SURVIVAL; INDEMNIFICATION.
Section 6.01. SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. All
representations, warranties, agreements and obligations of either party herein,
in any Transaction Document, in the Disclosure Schedule or in any certificate
delivered by any party incident to the transactions contemplated hereby or
thereby are material and may be relied upon by the other party and shall survive
the Closing for a period of one (1) year from the Closing Date regardless of any
investigation by or knowledge of the parties and shall not merge into the
performance of any obligation by any party hereto, all as subject to the
provisions of this ARTICLE VI.
Section 6.02. INDEMNIFICATION. Each party agrees to indemnify and hold
harmless the other party, its officers, directors, employees and agents
(individually, an "INDEMNIFIED PARTY"
13
and collectively, the "INDEMNIFIED PARTIES") from and against and in respect of
all losses, liabilities, obligations, damages, deficiencies, actions, suits,
proceedings, demands, assessments, orders, judgments, fines, penalties, costs
and expenses (including the reasonable fees, disbursements and expenses of
attorneys, accountants and consultants) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) sustained, suffered or
incurred by or made against any Indemnified Party (a "LOSS" or "LOSSES") arising
out of, based upon or in connection with:
(a) any breach of any representation or warranty made in this
Agreement or any other Transaction Document or in any schedule, exhibit,
certificate, financial statement or any other Transaction Document, agreement or
other instrument delivered under or in connection with this Agreement, or by
reason of any claim, action or proceeding asserted or instituted arising out of
any matter or thing covered by any such representations or warranties; and
(b) any breach of any other agreement made in this Agreement
or any other Transaction Document or in any schedule, exhibit, certificate,
financial statement, agreement or other instrument delivered under or in
connection with this Agreement or any other Transaction Document, or by reason
of any claim, action or proceeding asserted or instituted arising out of any
matter or thing covered by any such covenant or agreement.
ARTICLE VII. MISCELLANEOUS.
Section 7.01. LAW GOVERNING. THIS AGREEMENT SHALL BE CONSTRUED UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARDS TO ITS
CONFLICTS OF LAW PRINCIPLES.
Section 7.02. NOTICES. Any notice, request, demand or other
communication required or permitted hereunder shall be in writing and will be
deemed to have been given upon receipt, or if delivered or sent by facsimile
transmission, upon confirmation of transmission, or if sent by overnight
courier, the second day after deposit, or if by certified or registered mail,
return receipt requested, postage prepaid, 3 days after deposit in the United
States mail, as follows:
TO WWWX: WorldWide Web NetworX Corporation
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: President and CEO
Fax Number: (000) 000-0000
with a copy to: Xxxxx X. Xxxxx, Esq.
General Counsel
Fax Number: (000) 000-0000
14
TO NAI: New America Network, Inc.
X.X. Xxx 000
000 XX Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Chairman and CEO
Fax Number: (000) 000-0000
with a copy to: Xxxxxx X. Xxxx, Esq.
General Counsel
Fax Number: (000) 000-0000
or to such other address of which any party may notify the other parties as
provided above.
Section 7.03. ENTIRE AGREEMENT. This Agreement and the agreements
specifically referenced in this Agreement herewith constitute the entire
agreement between the parties and incorporate all prior discussions,
negotiations and agreements.
Section 7.04. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement may not be assigned by either party without the prior
written consent of the other party. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective successors, heirs,
permitted assigns and legal representatives.
Section 7.05. CAPTIONS AND GENDER. The captions in this Agreement are
for convenience only and shall not affect the construction or interpretation of
any term or provision hereof. The use in this Agreement of the masculine pronoun
in reference to a party hereto shall be deemed to include the feminine or neuter
pronoun, as the context may require.
Section 7.06. EXECUTION IN COUNTERPARTS. For the convenience of the
Parties and to facilitate execution, this Agreement may be executed in two
counterparts, each of which shall be deemed an original, but together which
shall constitute one and the same document.
Section 7.07. CERTAIN REMEDIES; SEVERABILITY. It is specifically
understood and agreed that any breach of this Agreement by either of the Parties
hereto will result in irreparable injury to the other that the remedy at law
alone will be an inadequate remedy for such breach and that in addition to any
other remedy it may have, the aggrieved Party shall be entitled to enforce the
specific performance of this Agreement by the breaching Party and to seek both
temporary and permanent injunctive relief, without the necessity of proving
actual damages, but without limitation of its rights to recover such damages. In
case any of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, any such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had been limited or modified (consistent with
its general intent) to the extent necessary to make it valid, legal and
enforceable, or if it shall not be possible to so limit or modify such invalid,
illegal or unenforceable provision or part of a provision, this Agreement shall
be
15
construed as if such invalid, illegal or unenforceable provision or part of a
provision had never been contained in this Agreement.
Section 7.08. AMENDMENTS, WAIVERS. This Agreement may not be amended or
modified except by a writing duly and validly executed by the Parties hereto.
Either party hereto may waive any covenant or condition intended for its benefit
in its discretion, but delay on the part of any Party in exercising any right,
power or privilege hereunder shall not operate as a waiver thereof, nor shall an
waiver on the part of either party of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege.
Section 7.09. FURTHER ASSURANCES. In addition to the actions, contracts
and other agreements and documents specifically required to be taken or
delivered pursuant to this Agreement, each of the Parties hereto shall execute
such contracts and other agreements and documents and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
Section 7.10. PRESS RELEASES. Neither Party shall make any public
statements or issue any press release concerning this agreement, the transaction
contemplated herein, or the other agreements executed simultaneously herewith
without the review and consent of the other.
ARTICLE VIII. CONFIDENTIALITY.
Section 8.01. DEFINED. As used in this ARTICLE 8, "CONFIDENTIAL
INFORMATION" shall mean any and all technical and non-technical information
provided by either Party to the other, including but not limited to (a) patent
and patent applications, (b) trade secret, and (c) proprietary information
ideas, media, techniques, sketches, drawings, works of authorship, models,
inventions, know-how, processes, apparatuses, equipment, algorithms, software
programs, software source documents, and formulae related to the current,
future, and proposed products and services of each of the Parties, and
including, without limitation, their respective information concerning research,
experimental work, development, design details and specifications, engineering,
financial information, procurements requirements, purchasing, manufacturing,
customer lists, investor, employees, business and contractual relationships,
business forecasts, sales and merchandising, marketing plans and information the
disclosing Party provides regarding third parties.
Section 8.02. IDENTIFICATION AS CONFIDENTIAL. If the Confidential
Information is embodied in tangible materials (including without limitation,
software, hardware, drawings, graphs, charts, disks, tapes, prototypes and
samples), it shall be labeled as "Confidential" or bear a similar legend. If the
Confidential Information is disclosed orally or visually, it shall be identified
as confidential at the time of disclosure and may (but is not required to) be
confirmed in a writing to the receiving Party within 10 days of such disclosure.
Section 8.03. MAINTAIN CONFIDENTIALITY. Each Party agrees that at all
times and notwithstanding any termination or expiration of this Agreement it
will hold in strict confidence and not disclose to any third party Confidential
Information of the other, except as approved in writing by the other Party to
this Agreement, and will use the Confidential Information for no purpose other
than evaluating or pursuing a business relationship with the other Party to this
16
Agreement. Each Party shall only permit access to Confidential Information of
the other Party to those of its employees or authorized representatives having a
need to know and who have signed confidentiality agreements or are otherwise
bound by confidentiality obligations at least as restrictive as those contained
herein.
Section 8.04. UNAUTHORIZED DISCLOSURE. Each Party shall immediately
notify the other upon discovery of any loss or unauthorized disclosure of the
Confidential Information of the other Party.
Section 8.05. EXCEPTIONS. Each Party's obligations under this agreement
with respect to any portion of the other Party's Confidential Information shall
terminate when the Party to whom Confidential Information was disclosed (the
"Recipient") can document that: (a) it was in the public domain at the time it
was communicated to the Recipient by the other Party; (b) it entered the public
domain subsequent to the time it was communicated to the Recipient by the other
Party through no fault of the Recipient; (c) it was in the Recipient's
possession free of any obligation of confidence at the time it was communicated
to the Recipient by the other Party; (d) it was rightfully communicated to the
Recipient free of any obligation of confidence subsequent to the time it was
communicated to the Recipient by the other Party; (e) it was developed by
employees or agents of the Recipient independently of and without reference to
any information communicated to the Recipient by the other Party; (f) it was
communicated by the other Party to an unaffiliated third party free of any
obligation of confidence; or (g) the communication was in response to a valid
order by a court or other governmental body, was otherwise required by law, or
was necessary to establish the rights of either Party under this Agreement.
Section 8.06. TERMINATION. The obligations of the Parties under this
ARTICLE 8 shall terminate 2 years after the date of this Agreement or upon the
date of the termination of the RQ Shareholders' Agreement, if earlier. The
Recipient's obligations under this ARTICLE 8 shall be binding upon the
Recipient's heirs, successors and assigns.
Section 8.07 EQUITABLE REMEDIES. Each Party acknowledges that its
breach of the provisions of this ARTICLE 8 will cause irreparable damage and
hereby agrees that the other Party shall be entitled to seek injunctive relief
under this Agreement, as well as such further relief as may be granted by a
court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed a date set forth above.
NEW AMERICA NETWORK, INC.
By: //S// XXXXXX X. XXXX
---------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman and CEO
17
WORLDWIDE WEB NETWORX
CORPORATION
By: //S// XXXXXX X. XXXX
----------------------------
Name: Xxxxxx X. Xxxx
Title: President and CEO
18