STOCK PURCHASE AND SALE AGREEMENT
This Stock Purchase and Sale Agreement (the "Agreement") is entered into as
of this 13th day of December, 1996, by and among VDC PARADIGMS, INC., A
California corporation ("Buyer"), INFONOW CORPORATION, a Delaware corporation
("Seller"), XXXXX XXXXXXXXXXX ("Xxxxx") and XXXXX XXXXXXXXX ("Xxxxx").
RECITALS
A. Seller is the sole shareholder of INFOMERGERCO, INC. d.b.a. "NAVIGIST",
INC.", a Colorado corporation ("Navigist"), which conducts business in the State
of California.
B. Xxxxx and Xxxxx (collectively, "Owners") are the sole shareholders of
buyer and are employees of Navigist. Owners were also employees and
shareholders of Navigist's predecessor, also know as "Navigist, Inc.", which was
acquired by Seller as its subsidiary on August 23, 1995 through a triangular
merger.
C. Seller and Owners desire to disassociate completely, severing all prior
and existing relationships among them in connection with Navigist, through the
purchase by Buyer of all of the outstanding shares of Navigist and the
termination of all contracts and obligations between and among Navigist, Seller
and Owners.
D. In connection with the representations and warranties given herein, the
parties recognize that their ability to rely upon a representation or warranty
by another party is limited to the extent that the party making the
representation or warranty has knowledge of the facts superior to the knowledge
of the party to whom the representation is made. In that regard, Owners have
managed the day to day business and operations of Navigist in San Jose,
California, and Seller has managed the Board and certain administrative,
financial, tax and corporate matters for Navigist.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS. As used herein the following terms, and their derivatives,
shall have the meanings set forth below:
(a) "Assets" shall mean all of the assets used in the operation of
the Business, including, without limitation, those listed on Exhibit "A"
attached hereto and incorporate herein by this reference.
1
(b) "Business" shall mean the business presently conducted by
Navigist at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000.
(c) "Closing" shall mean the consummation of the purchase and sale of
the Shares as provided in this Agreement.
(d) "Closing Date" shall mean the day, which is no more than five (5)
days following the date of this Agreement, for the Closing as Buyer and Seller
may hereafter mutually agree.
(e) "Collateral" shall mean the "Collateral", as such term is defined in
the Security Agreement.
(f) "Confidentiality Agreements" shall mean those certain Confidentiality
and Assignment of Proprietary Inventions Agreements dated August 23, 1996
between Seller and Owners.
(g) "Contracts" shall mean the contracts, agreements and obligations of
Navigist listed on Exhibit "B" attached hereto and incorporated herein by this
reference.
(h) "Debt Payment" shall mean Ninety Seven Thousand Dollars ($97,000.00) to
be paid by Seller to Navigist at the Closing.
(i) "Employment Agreements" shall mean those certain Employment Agreements
dated August 23, 1995 by and between Seller and Owners.
(j) "Escrow Agreement" shall mean that certain Escrow Agreement dated
August 23, 1996 by and among Seller, Buyer, Owners and Former Shareholders and
Cooley, Godard, Xxxxxx, Xxxxxxxxx and Xxxxx pursuant to which the Shares are
held subject to the Security Agreement.
(k) "Financial Statements" shall mean all of the statements of earnings,
balance sheets and cash flows of Navigist.
(l) "Financing Statements" shall mean all of those certain UCC-1 Financing
Statements identified on Exhibit "C" attached hereto and incorporated herein by
this reference which evidence the security interest granted under the Security
Agreement.
(m) "Former Shareholders" shall mean Xxxx X. Xxxxxx and Xxxxxxx X.
Xxxxx.
(n) "Liabilities" shall mean the liabilities of Navigist of the
nature listed by payee and amount on Exhibit "D" attached hereto.
(o) "Navigist Debt" shall mean all debts owed by Navigist to Seller,
including, without limitation, the notes payable in the amount of One Hundred
Forty Two Thousand Five Hundred ($142,500.00).
2
(p) "Owner Releasees" shall mean Owners and their respective spouses,
Navigist and its past, present and future employees and agents, their respective
heirs, successors and assigns, and their respective insurance carriers and
attorney's.
(q) "Purchase Price" shall mean One Dollar ($1.00).
(r) "Secured Notes" shall mean those certain Secured Convertible
Promissory Notes of Seller dated August 23, 1995 in the aggregate amount of
Twenty Seven Thousand Nine Hundred Forty Dollars ($27,940.00) issued to Owners.
(s) "Security Agreement" shall mean that certain Stock Pledge and
Security Agreement dated August 23, 1995 between Seller and Owners and the
Former Shareholders which secures the Secured Notes.
(t) "Seller Releasees" shall mean Seller and its past, present and
future officers, directors, shareholders, employees and agents, their respective
heirs, successors and assigns, and their respective insurance carriers and
attorney's.
(u) "Shares" shall mean the Ten Thousand (10,000) Shares of Navigist
common stock held of record by Seller represented by Share Certificate number
C-1.
(v) "Stock" shall mean two hundred seventy four thousand fifty
(274,050) of those two hundred seventy eight thousand six hundred thirty
(278,630) shares of Seller's common stock held of record by Owners represented
by Share Certificate Numbers 880, 882, 883, 884, 886, 887, 894, 895, 896 and
897.
(w) "Stock Transfers" shall mean assignments separate from
certificate pursuant to which Owners transfer by gift shares of Seller's common
stock held by them to persons as set forth on Exhibit "E" attached hereto.
(x) "Terminating Obligations" shall mean all of the contracts,
obligations and agreements listed on Exhibit "F" attached hereto which are to be
terminated upon the Closing.
2. PURCHASE AND SALE.
2.1 PURCHASE AND SALE OBLIGATIONS. Subject to the terms and
conditions of this Agreement, at the Closing Seller shall sell, transfer,
convey, assign and deliver the Shares to Buyer and terminate the Terminating
Obligations, and Buyer shall purchase the Shares from Seller, terminate the
Terminating Obligations and transfer the Stock to Seller.
3
2.2. CLOSING. The Closing shall take place on the Closing Date at
10:00 a.m. at the offices of Xxxxxxx, Xxxxx & Xxxxxx, A Professional Law
Corporation, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000-X, Xxx Xxxxx, Xxxxxxxxxx, or at
such other time and place as Buyer and Seller may mutually agree.
2.3 OBLIGATIONS AT CLOSING.
(a) SELLER'S OBLIGATIONS. At the Closing, Seller shall deliver
to Buyer the following:
(i) Share Certificate Number C-1 of Navigist together with
a duly executed Assignment Separate From Certificate in a form approved by buyer
effecting the transfer of the Shares to Buyer;
(ii) The corporate books and records of Navigist;
(iii) The written resignations of all of the officers and
directors of Navigist;
(iv) Duly executed UCC-2 or UCC-3 Financing Statements or
other releases in forms acceptable to Buyer of all security interests in or to
the Assets other than security interests held by Owners or the Former
Shareholders;
(v) Duly executed releases from the Former Shareholders in
forms approved by Seller effecting the release of the Shares from the Escrow
Agreement;
(vi) The Debt Payment by wire transfer; and
(vii) A duly executed release of the Navigist Debt in a
form approved by Buyer together with all promissory notes evidencing the same
marked as cancelled.
(b) BUYER'S AND OWNERS' OBLIGATIONS. At the Closing, Buyer
and Owners, as applicable, shall deliver to Seller the following:
(i) One Dollar ($1.00) as payment of the Purchase
Price;
(ii) Duly executed UCC-2 or UCC-3 Financing Statements
in forms approved by Seller effecting the release of Owners' security interest
in the Collateral;
4
(iii) Duly executed releases of the Secured Notes in
forms approved by Seller together with the Secured Notes marked as cancelled;
(iv) Share Certificate Numbers 880, 882, 883, 884,
886, 887, 894, 895, 896 and 897 of Seller together with a duly executed
Assignment Separate From Certificate in a form approved by Seller effecting the
transfer of the Stock to Seller and duly executed Stock Transfers; and
(v) A duly executed guaranty by Navigist of Buyer and
Owners' indemnity obligations set forth in Section 12 of this Agreement.
3. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby represents and
warrants to Seller that, except as identified on Schedule 3, the facts and
circumstances set forth below are and, except as contemplated hereby, at all
times up to the Closing will be, true and correct, and hereby acknowledges that
such facts and circumstances constitute the basis upon which Seller is induced
to enter into and perform this Agreement.
(a) LEGAL CAPACITY OF BUYER. Buyer is a duly organized California
corporation, with full right, power, legal capacity and authority to enter into
and perform its obligations under this Agreement and all agreements, documents
and instruments executed by Buyer pursuant to this Agreement, and no approvals,
consents, orders, licenses, certificates or permits or any person (other than
parties to the Contracts from whom consent to assignment must be obtained) or
any governmental authority are necessary in connection with its execution,
delivery or performance of this Agreement or any agreements, documents and
instruments executed by Buyer pursuant to this Agreement.
(b) APPROVAL/BINDING EFFECT. The execution, delivery and performance
of this Agreement, and all documents, instruments and agreements executed by
Buyer pursuant to this Agreement, have been authorized by all necessary action
by buyer. Upon the execution of this Agreement by all parties hereto, Buyer's
obligations under this Agreement will constitute the legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their terms.
(c) ACKNOWLEDGMENT. Buyer acknowledges and agrees that there no
warranties or representations whatsoever are made with respect to the Assets
except for those regarding title and otherwise expressly set forth below.
4. OWNERS' REPRESENTATIONS AND WARRANTIES. Owners, (severally and not
jointly as to subsections (a) through (c) and jointly and severally as to
subsections (d) through (p), hereby represent and
5
warrant to Seller that, except as identified on Schedule 4, the facts and
circumstances set forth below are and, except as contemplated hereby, at all
times up to the Closing will be, true and correct, and hereby acknowledge that
such facts and circumstances constitute the basis upon which seller is induced
to enter into and perform this Agreement.
(a) LEGAL CAPACITY OF OWNERS. He has full right, power, legal
capacity and authority to enter into and perform his obligations under this
Agreement and all agreements, documents and instruments executed by him pursuant
to this Agreement, and no approvals, consents, orders, licenses, certificates or
permits of any person (other than parties to the Contracts from whom consent to
assignment must be obtained) or any governmental authority are necessary in
connection with his execution, delivery or performance of this Agreement or any
agreements, documents and instruments executed by him pursuant to this
Agreement.
(b) APPROVAL/BINDING EFFECT. Upon the execution of this Agreement by
all parties hereto, his obligations under this Agreement will constitute the
legal, valid and binding obligations, enforceable against him in accordance with
their terms
(c) TITLE TO STOCK UPON CLOSING. Upon the Closing, Buyer will have
good and marketable title to all of the Stock formerly held by him, free and
clear of any and all restrictions on transfer (other than those imposed by
securities laws) and all claims, liens and encumbrances or any nature.
(d) LEGAL CAPACITY OF BUYER. Buyer is a duly organized California
corporation, with full right, power, legal capacity and authority to enter into
and perform its obligations under this Agreement and all agreements, documents
and instruments executed by Buyer pursuant to this Agreement, and no approvals,
consents, orders, licenses, certificates or permits of any person (other than
parties to the Contracts from whom consent to assignment must be obtained) or
any governmental authority are necessary in connection with its execution,
delivery or performance of this Agreement or any agreements, documents and
instruments executed by Xxxx pursuant to this Agreement.
(e) APPROVAL/BINDING EFFECT. The execution, delivery and performance
of this Agreement, and all documents, instruments and agreements executed by
Buyer pursuant to this Agreement, have execution of this Agreement by all
parties hereto, Buyer's obligations under this Agreement by all parties hereto,
Buyer's obligations under this Agreement will constitute the legal, valid and
binding obligations of Buyer, enforceable against Buyer in accordance with their
terms.
6
(f) NO BREACHES. To the best of Owners' knowledge, neither the entry
into this Agreement nor the consummation of the transactions contemplated hereby
will result in or constitute any of the following:
(i) A default, breach or violation, or any event that with
notice or lapse of time, or both, would constitute a default, breach or
violation of any lease, contract, agreement, instrument, commitment, obligation
or arrangement by which Navigist offer the Assets are bound;
(ii) The creation or imposition of any lien, charge or
encumbrance on any of the Assets; or
(iii) The violation of any law, rule, regulation, ordinance,
judgment, order, writ, injunction or decree applicable to or affecting Navigist
or the Assets.
(g) COMPLIANCE WITH LAWS. To the best of Owners' knowledge, Navigist
has materially complied with, and is not in violation of, applicable federal,
state and local statutes, laws regulations and ordinances (including without
limitation any applicable building, zoning, environmental protection and
hazardous material statutes, laws, regulations and ordinances) affecting the
Business or the Assets.
(h) COMPLIANCE WITH OTHER INSTRUMENTS. To the best of Owners'
knowledge, Navigist is not in violation or default of any provisions of its
Articles of Incorporation or Bylaws or of any instrument, judgment, order, writ,
decree or contract to which it is a party or by which it is bound or of any
provision of federal or state statute, rule or regulation applicable to
Navigist. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any lien, charge or encumbrance upon any assets of Navigist.
(i) LITIGATION. To the best of Owners' knowledge, there have not
been, and as of the Closing Date since the date of this Agreement there will not
have been, any actions, proceedings, judgments or liens initiated or threatened
by or against Navigist or any of the Assets for amounts in excess of Ten
Thousand Dollars ($10,000.00) individually or Fifty Thousand Dollars
($50,000.00) in the aggregate, whether or not covered by insurance.
(j) TAXES. To the best of Owners' knowledge, within the times and in
the manner prescribed by law, Seller has filed, or will
7
timely file, all federal, state and local income tax returns for Navigist and
has paid or deposited, or will timely pay, all income taxes, assessments and
penalties required with respect to the Business prior to the Closing Date. To
the best of Owners' knowledge, all sales and use taxes, withholdings, including
employment taxes, and other tax liabilities and assessments of the Business
accruing prior to the Closing Date have been, or will timely be, fully satisfied
or provided for; and to the best of Owners' knowledge there are no present
disputes as to taxes of any nature payable by Seller or Navigist with respect to
the Business.
(k) LIST OF CONTRACTS. To the best of Owner's knowledge, the list of
contracts attached hereto as Exhibit "B" is a true, accurate and complete
listing of all of the material contracts, leases, insurance policies, agreements
and obligations of the Business, meaning those providing for monthly or total
payment in excess of Five Thousand Dollars ($5,000.00), including without
limitation distributor, customer, vendor, maintenance and service contracts.
Seller has been provided with copies of true and complete copies of each such
contract, agreement or obligation, as amended, which Seller has requested. To
the best of Owners' knowledge, all such contracts, agreements, and obligations
are in full force and effect and no event has occurred which, with notice or
lapse or time or both, would constitute a breach by either party to any such
contract, agreement or obligation intends to breach, cancel or terminate the
same.
(l) STATUS OF ASSETS. To the best of Owners' knowledge, the Assets
are all of the material assets, meaning a value of more than Five Thousand
Dollars ($5,000.00), used in the operation of the Business as of the date of
this Agreement and are the assets of Navigist. To the best of Owners'
knowledge, the Assets are free and clear of any and all restrictions on transfer
and all claims, liens and encumbrances or any nature. To the best of Owners'
knowledge, no person or entity has any right, claim, title or interest in or to,
nor asserted any right, claim, title or interest in or to, any of the Assets or
the Business. To the best of Owners' knowledge, with respect to the property
and assets Navigist leases, Navigist is in compliance with such leases and, to
its knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances.
(m) STATUS OF LIABILITIES. To the best of Owners' knowledge, the
list of liabilities attached hereto as Exhibit "D" is a complete list of all of
the material liabilities, meaning greater than One Thousand Dollars ($1,000.00),
of Navigist. The liabilities listed on Exhibit "D" are liabilities of only
Navigist and not Seller, irrespective of whether the underlying obligation was
incurred in the name of Seller and irrespective of any claim that Seller was the
beneficiary of products or services underlying such liabilities.
8
(n) ACCURACY OF FINANCIAL STATEMENTS. To the best of Owners'
knowledge, the Financial Statements for the Business provided by Owners to
Seller have been, or when prepared will be true and accurate and fairly present
on a consistent basis the financial position of the Business as of the
respective dates of the balance sheets included in such financial statements and
the earnings of its operations and cash flows for the respective periods
indicated.
(o) NO MATERIAL FINANCIAL CHANGES. To the best of Owners' knowledge,
since the date of the last Financial Statement of the business provided to
Seller there has not been any:
(i) Transaction by Navigist except in the ordinary course of
business as conducted on that date;
(ii) Capital expenditure by Navigist exceeding Two Thousand
Dollars ($2,000.00); or
(iii) Material adverse change in the financial condition,
liabilities, assets, or prospects of the Business.
5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby represents and
warrants to Buyer and Owners that, except as identified on Schedule 5, the facts
and circumstances set forth below are and, except as contemplated hereby, at all
times up to the Closing will be, true and correct, and hereby acknowledge that
such facts and circumstances constitute the basis upon which Buyer and Owners
are induced to enter into and perform this Agreement.
(a) LEGAL CAPACITY OF SELLER. Seller is a Delaware corporation duly
organized with full right, power, legal capacity and authority to enter into and
perform its obligations under this Agreement and all agreements, documents and
instruments executed by it pursuant to this Agreement, and no approvals,
consents, orders, licenses, certificates or permits of any person (other than
parties to the Contracts from whom consent to assignment must be obtained) or
any governmental authority are necessary in connection with its execution,
delivery or performance of this Agreement or any agreements, documents and
instruments executed by is pursuant to this Agreement.
(b) APPROVAL/BINDING EFFECT. The execution, delivery and performance
of this Agreement, and all documents, instruments and agreements executed by
Seller pursuant to this Agreement, have been authorized by all necessary action
by Seller. Seller's obligations under this Agreement constitute the legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms.
9
(c) NO BREACHES. To the best of Seller's knowledge, neither the
entry into this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following:
(i) A default, breach or violation, or any event that with
notice or lapse of time, or both, would constitute a default, breach or
violation of any lease, contract, agreement, instrument, commitment, obligation
or arrangement by which Navigist or the Assets are bound;
(ii) The creation or imposition of any lien, charge or
encumbrance on any of the Assets; or
(iii) The violation of any law, rule, regulation, ordinance,
judgment, order, writ, injunction or decree applicable to or affecting Navigist
or the Assets.
(d) CAPITALIZATION OF NAVIGIST. Navigist is a Colorado corporation,
duly organized and in good standing under the laws of the State of Colorado and
is duly qualified to conduct business in the State of California. The
authorized capital stock of Navigist consists of fifty thousand (50,000) shares
of common stock having a par value of $.001 of which ten thousand (10,000)
shares are issued and outstanding. All of the Shares are validly issued, fully
paid and nonassessable, and to the best of Seller's knowledge such shares have
been issued in full compliance with all federal and state securities laws.
There are no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating Navigist to issue or
transfer from treasury any additional shares of its capital stock of any class.
(e) COMPLIANCE WITH LAWS. To the best of Seller's knowledge, Navigist
has materially complied with, and is not in violation of, applicable federal,
State and local statutes, laws, regulations and ordinances (including without
limitation any applicable building, zoning, environmental protection and
hazardous material statutes, laws, regulations and ordinances) affecting the
Business or the Assets.
(d) COMPLIANCE WITH OTHER INSTRUMENTS. To the best of Seller's
knowledge, Navigist is not in violation or default of any provisions of its
Articles or Incorporation or Bylaws or of any instrument, judgment, order, writ,
decree or contract to which it is a party or by which it is bound or of any
provision of federal or state statute, rule or regulation applicable to
Navigist. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation or be in conflict with or constitute, with or
10
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event which results in the creation of any lien, charge or encumbrance upon any
assets or Navigist.
(e) TITLE UPON CLOSING. Upon the Closing, Buyer will have good and
marketable title to all of the Shares, free and clear of any and all
restrictions on transfer (except those imposed by securities laws) and all
claims, liens and encumbrances or any nature.
(f) LITIGATION. To the best of Seller's knowledge, there have not
been, and as of the Closing Date since the date of this Agreement there will not
have been, any actions, proceedings, judgments or liens initiated or threatened
by or against Navigist or any of the Assets for amounts in excess of Ten
Thousand Dollars ($10,000.00) individually or Fifty Thousand Dollars
($50,000.00) in the aggregate, whether or not covered by insurance.
(g) TAXES. To the best of Seller's knowledge, within the times and in the
manner prescribed by law, Seller has filed, or will timely and in the manner
prescribed by law, Seller has filed, or will timely file, all federal, state and
local income tax returns for Navigist and has paid or deposited, or will timely
pay, all income taxes, assessments and penalties required with respect to the
Business prior to the Closing Date. To the best of Seller's knowledged, all
sales and use taxes, withholdings, including employment taxes, and other tax
liabilities and assessments of the Business accruing prior to the Closing Date
have been, or will timely be, fully satisfied or provided for; and there are no
present disputes as to taxes of any nature payable by Seller or Navigist with
respect to the Business. Buyer has been provided with copies of true and
complete copies of each such tax return, as amended, and correspondence with
taxing authorities.
(h) LIST OF CONTRACTS. To the best of Seller's knowledge, the list of
contracts attached hereto as Exhibit "B" is a true, accurate and complete
listing of all of the material contracts, leases, insurance policies, agreements
and obligations of the Business, meaning those providing for monthly or total
payment in excess of Five Thousand Dollars ($5,000.00), including without
limitation distributor, customer, vendor, maintenance and service contracts.
Buyer has been provided with copies of true and complete copies of each such
contract, agreement or obligation, as amended, which Buyer has requested. To
the best of Seller's knowledge, all such contracts, agreements and obligations
are in full force and effect and no event has occurred which, with notice or
lapse or time or both, would constitute a breach by either party thereunder. To
the best of Seller's knowledge, no party to any such contract, agreement or
obligation intends to breach, cancel or terminate the same.
11
(i) STATUS OF ASSETS. The best of Seller's knowledge, the Assets are
all of the material assets, meaning a value of more than five Thousand Dollars
($5,000.00), used in the operation of the Business as of the date of this
Agreement and are the assets of Navigist. To the best of Seller's knowledge,
the Assets are free and clear of any and all restrictions on transfer and all
claims, liens and encumbrances or any nature. To the best of Seller's
knowledge, no person or entity has any right, claim, title or interest in or to,
nor asserted any right, claim, title or interest in or to, any of the Assets or
the Business. To the best of Seller's knowledge, with respect to the property
and assets Navigist leases, Navigist is in compliance with such leases and, to
its knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances.
(j) STATUS OF LIABILITIES. To the best of Seller's knowledge, the
list of liabilities attached hereto as Exhibit "F" is a complete list of all of
the material liabilities, meaning greater that One Thousand Dollars ($1,000.00),
of Navigist. The liabilities listed on Exhibit "D" are liabilities of only
Navigist and not Seller, irrespective of whether the underlying obligation was
incurred in the name of Seller and irrespective of any claim that Seller was the
beneficiary of products or services underlying such liabilities.
(k) ACCURACY OF FINANCIAL STATEMENTS. To the best of Seller's
knowledge, the Financial Statements for the Business provided by Seller to
Owners have been, or when prepared will be, true and accurate and fairly present
on a consistent basis the financial position of the Business as of the
respective dates of the balance sheets included in such financial statements and
the earnings of its operations and cash flows for the respective periods
indicated.
(1) NO MATERIAL FINANCIAL CHANGES. To the best of Seller's knowledge,
since the date of the last Financial Statement of the Business provided to
Owners there has not been any:
(i) Transaction by Navigist except in the ordinary course of business
as conducted o that date;
(ii) Capital expenditure by Navigist exceeding Two Thousand Dollars
($2,000.00); or
(iii) Material adverse change in the financial condition,
liabilities, assets, or prospects of the Business.
6. BUYER'S AND OWNERS' OBLIGATION BEFORE CLOSING. Buyer and Owner agree
and covenant that from the date of this Agreement until the Closing to perform
the obligations set forth below.
12
(a) RELEASES FROM FORMER OWNERS. Buyer and Owners shall use their
reasonable best efforts to pursue, in good faith, the release by the Former
Shareholders of their security interests under the Security Agreement and the
release of their rights and interests under the Escrow Agreement.
(b) PERFORMANCE OF EMPLOYMENT AGREEMENTS. Owners shall continue to
perform their respective Employment Agreements, including, without limitation,
negotiating on behalf of Navigist with respect to claims against Navigist,
continuing to operate the Business in its usual and ordinary manner in
accordance with the same methods as the Business has previously been carried on,
including, without limitation, collecting of accounts receivable and paying of
accounts payable.
(c) NO MODIFICATIONS. Owners shall not make or institute any
policies, methods or change that will materially vary from those used by the
Business as of the date of this Agreement. Owners shall not modify, amend,
cancel or terminate any of the contracts of the Business without the prior
written consent of Seller.
(d) PRESERVATION OF RELATIONSHIPS. Owners shall, except to the
extent expressly released thereunder, use their best efforts to preserve the
Business intact, to keep available to the Business its present employees, and to
preserve the present relationships with suppliers, customers and others having
business relationships with the Business.
(e) NO ASSET SALES. Owners shall not sell, transfer, assign, lease
or in any other manner alienate or encumber any of the material Assets except in
the ordinary course of business.
7. OBLIGATIONS OF SELLER BEFORE CLOSING. Seller agrees and covenants that
from the date of this Agreement until the Closing to perform the obligations set
forth below.
(a) NO OFFICE CHANGES. Seller shall not effect any changes in the
officers, directors or employees of the Business.
(b) NO TERMINATIONS. Seller shall not effect the termination of the
Employment Agreements of either Owner.
(c) NO MODIFICATIONS. Seller shall not make or institute any
policies, methods or changes that will materially vary from those used by the
Business as of the date of this Agreement. Seller shall not modify, amend,
cancel or terminate any of the contracts of the Business without the prior
written consent of Seller.
13
(d) PRESERVATION OF RELATIONSHIPS. Seller shall use its best efforts
to preserve the Business intact, to keep available to the Business its present
employees, and to preserve the present relationships with suppliers, customers
and others having business relationships with the Business.
(e) NO ASSET SALES. Seller shall not sell, transfer, assign, lease
or in any other manner alienate or encumber any of the material Assets except in
the ordinary course of business.
(f) ELIMINATION OF NAVIGIST DEBT. Seller shall effect the
elimination, without satisfaction, of the Navigist Debt through a contribution
to capital or through a contribution to capital or though some other means
agreed to in writing by Buyer and Seller.
(g) RELEASES FROM FORMER OWNERS. Seller shall use its reasonable
best efforts to pursue, in good faith, the release by the Former Shareholders of
their security interests under the Security Agreement and the release of their
rights and interests under the Escrow Agreement.
8. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE. The obligation of Buyer
to purchase the Shares under this Agreement is subject to the complete
satisfaction, at or before the closing, of all of the conditions set forth in
this Section 8. Buyer may waive any or all of these conditions; provided,
however, that no such waiver of a condition shall constitute a waiver by Buyer
of any of its other rights or remedies, at law or in equity, if Seller shall be
in default of any of its representations, warranties or covenants under this
Agreements.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties by Seller in this Agreement shall be true as of the Closing as
though made at that time.
(b) SELLER'S PERFORMANCE. Seller shall have in al material respects
performed, satisfied and complied with all covenants required by this Agreement
or any agreement, document or instrument executed pursuant to this Agreement to
be performed, satisfied or complied with by Seller at or before the Closing.
(c) CONSENTS. All necessary agreements and consents of any parties
to the consummation of the transactions contemplated by this Agreement, or
otherwise pertaining to the matters covered by this Agreement, shall have been
obtained by Buyer or Seller and delivered to Buyer.
(d) ADVERSE CHANGES. There shall have been no material adverse
change in the Business, and there shall have been no
14
destruction or loss of or damage to any of the Assets which materially and
adversely affects the Business or the Assets.
9. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE. The obligation of Seller
to sell the Shares under this Agreement is subject to the satisfaction, at or
before the Closing, of all of the conditions set forth in this Section 9.
Seller may waive any and all of these conditions; provided, however, that no
such waiver of a condition shall constitute a waiver by Seller of any of its
other rights or remedies, at law or in equity, if Buyer or Owners shall be in
default of any of its representations, warranties or covenants under this
Agreement.
(a) ACCURACY OF BUYER'S AND OWNERS' REPRESENTATIONS AND WARRANTIES.
All representations and warranties by buyer and Owners in this Agreement and all
agreements, documents and instruments executed pursuant to this Agreement shall
be true as of the Closing as though made at that time.
(b) BUYER'S AND OWNERS' PERFORMANCE. Buyer and Owners shall have in
all material respects performed, satisfied and complied with all covenants
required by this Agreement and all other agreements, documents and instruments
executed pursuant hereto to be performed, satisfied or complied with by them at
or before the Closing.
(c) CONSENTS. All necessary agreements and consents of any parties
to the consummation of the transactions contemplated by this Agreement, or
otherwise pertaining to the matters covered by this agreement, shall have been
obtained by Seller or Buyer and delivered to Seller.
10. EFFECT OF CLOSING. Upon the closing, all of the Terminating
Obligations shall automatically terminate and the releases set forth below shall
become effective.
(a) RELEASE BY OWNERS. Owners, on behalf of themselves and their
respective successors and assigns, releases, acquits and forever discharges the
Seller Releasees from any and all past, present or future rights, actions,
causes of action, claims, damages, demands, costs, losses, expenses and
compensation of any and every kind, nature, and character, known or unknown,
suspected or unsuspected, including any and all claims for attorneys' fees and
costs, which arise out of or relate to, in whole or in part, the Business,
Seller, Navigist, any duty of any person or entity with respect to such entities
or any claim, assertion or allegation made prior to the date of this Agreement.
15
(b) RELEASE BY SELLER. Seller, on behalf of itself and its
successors and assigns, releases, acquits and forever discharges the Owner
Releasees from any and all past, present or costs, losses, expenses and
compensation of any and every kind, nature, and character, known or unknown,
suspected or unsuspected, including any and all claims for attorneys' fees and
costs, which arise out of or relate to, in whole or in part, the Business,
Seller, Navigist, any duty of any person or entity with respect to such entities
or any claim, assertion or allegation made prior to the date of this Agreement.
(c) WAIVER OF CIVIL CODE SECTION 1542. The parties fully understand
the statutory language of Section 1542 of the Civil Code of the State of
California and, having been so apprised, agree nevertheless to waive any and all
rights or benefits which they may now have, or in the future may have, under the
terms of Section 1542 of the California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor.
The parties fully understand that if the facts upon which this Agreement is
given are found hereafter to be other than or different from the facts now
believed to be true, they expressly accept and assume the risk of such possible
difference in facts and agree that this Agreement shall be and remain effective
notwithstanding any such differences in facts.
(d) LIMITATION ON RELEASES. Notwithstanding any other provision of
this Agreement, the release set forth herein does not release any rights or
obligations of any party under this Agreement or any agreement, document or
instrument executed pursuant to this Agreement.
11. SELLER'S AND OWNERS' OBLIGATIONS AFTER THE CLOSING.
(a) SELLER'S INDEMNITIES. From and after the Closing, Seller shall
indemnify, defend and hold Buyer and Owners harmless from and against any and
all claims, demands, losses, obligations, liabilities, damages, costs and
expenses, including interest, penalties and reasonable attorneys' and experts'
fees, arising out of or relating to any of the following:
(i) Any material breach of, or failure by Seller to perform,
satisfy or comply with any of its covenants in this Agreement
16
or any agreement, document or instrument executed pursuant to this Agreement;
(ii) Any material breach of any of Seller's representations or
warranties in this Agreement or any agreement, document or instrument executed
pursuant to this Agreement;
(iii) Any act or action taken by Seller in connection with its
performance of, satisfaction of or compliance with any of its covenants in this
Agreement; or
(iv) Any liability of Seller.
(b) DELIVERY OF RECORDERS. Immediately after the Closing, Seller
shall cause to be delivered to Buyer all of the day to day operational records
of the Business necessary for the continued operation of the Business in its
possession or under its control.
12. BUYER'S AND OWNERS' OBLIGATIONS AFTER THE CLOSING.
(a) BUYER'S AND OWNERS' INDEMNITY. From and after the closing, Buyer
and Owners shall (severally and not jointly with respect to any obligation,
representation or warranty made severally and not jointly and jointly and
severally with respect to any obligation, representation or warranty made
jointly and severally), indemnify, defend and hold Seller harmless from and
against any and all claims, demands, losses, obligations, liabilities, damages,
costs and expenses, including interest, penalties and reasonable attorneys' and
experts' fees, arising out of or relating to any of the following:
(i) Any material breach of, or failure by him or it to perform,
satisfy or comply with any of his or its covenants in this Agreement or any
agreement, document or instrument executed pursuant to this Agreement;
(ii) Any material breach of any of any of his or its
representations or warranties in this Agreement or any agreement, document or
instrument executed pursuant to this Agreement; or
(iii) Any act or action taken by him or it in connection with
his or its performance of, satisfaction of or compliance with any of its
covenants in this Agreement.
(b) BUYER'S AND NAVIGIST'S INDEMNITY. From and after the Closing,
Buyer shall indemnify, defend and hold Seller harmless from and against any and
all claims, demands, losses, obligations, liabilities, damages, costs and
expenses, including interest, penalties and reasonable attorneys' and experts'
fees incurred following the Closing, arising out of or relating to any liability
of
17
the Business as conducted before or after the Closing, except to the extent such
liability is not disclosed by Seller in breach of its representations and
warranties herein.
13. TERMINATION. Buyer or Seller may terminate this Agreement by written
notice to the other if (i) the other has breached any covenant hereunder and
failed or refused to cure such breach within five (5) days following written
notice of such breach, (ii) if any representation or warranty of the other is
incorrect in any material respect and the party who made such incorrect
representation or warranty fails or refuses to correct the same to the
reasonable satisfaction of the other within five (5) days following written
notice of the inaccuracy or (iii) if the Closing does not occur on or before the
Closing Date.
14. REPRESENTATION OF PARTIES. This Agreement was negotiated at arms
length by the parties hereto with the assistance of counsel. This Agreement may
not be construed against either party as the drafter.
15. SUCCESSORS. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns.
16. FURTHER INSTRUMENTS. The parties shall execute and deliver such
further instruments and take such further actions as may be reasonably necessary
to carry out the purposes and intent of this Agreement.
17. GOVERNING LAW/VENUE. Venue and jurisdiction for any and all actions
to construe or enforce this Agreement or any agreement, document or instrument
executed pursuant hereto shall be proper only in Santa Xxxxx County, California
if brought or filed by Seller and only in the City and County of Denver if
brought or filed by Buyer, Owners and/or Navigist. This Agreement shall be
construed and enforced in accordance with the law of the State which has
jurisdiction over the action or proceeding.
18. SEVERABILITY. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision of this Agreement which may prove invalid or unenforceable
under any applicable law shall not affect the validity or enforceability of any
other provision hereof.
18
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. NOTICES. Any requests, demands or notices required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
upon personal delivery or by facsimile or forty-eight (48) hours after deposit
in the United States mail (postage prepaid), by certified mail, return receipt
requested, addressed to the receiving party at the address set forth below its
signature or at such other address as such party may specify by written notice
to the other party hereto.
21. AMENDMENTS. No amendment or variation of the terms of this
Agreement, with out without consideration, shall be valid unless made in
writing and signed by all of the parties to this Agreement at the time of
such amendment.
22. ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties concerning the subject matter contained
herein. There are no representations, agreements, arrangements or
understandings, oral or written, between or among the parties, related to
the subject matter of this Agreement which are not fully expressed herein.
23. TIME OF ESSENCE. Time is of the essence in the performance of
each and every obligation of the parties under this Agreement.
(signatures on following page)
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BUYER:
VDC PARADIGMS, INC.,
a California corporation
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Its: President
------------------------------------
Address: 0000 Xxxxx Xxxxx
--------------------------------
Xxx Xxxx, XX 00000
--------------------------------
Fax: 000-000-0000
--------------------------------
OWNERS:
/s/ Xxxxx Xxxxxxxxxxx
----------------------------------------
XXXXX XXXXXXXXXXX
Address: 1358 Cerro Verde
--------------------------------
Xxx Xxxx, XX 00000
--------------------------------
Fax: 000-000-0000
--------------------------------
/s/ Xxxxx Xxxxxxxxx
----------------------------------------
XXXXX XXXXXXXXX
Address: 0000 Xxx Xxxx Xxxxxx, Xxx X000
--------------------------------
Xxxxxxx, XX 00000
--------------------------------
Fax: 000-000-0000
--------------------------------
SELLER:
INFONOW CORPORATION, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
------------------------------------
Its: Vice President & CFO
------------------------------------
Address: 1875 Xxxxxxxx, Suite 1100
--------------------------------
Xxxxxx, XX 00000
--------------------------------
Fax: 000-000-0000
--------------------------------
20
