ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into
this 29th day of December, 1998, by and between Cymitar Technology Group, Inc.,
a Texas corporation ("Seller"), Xxxxxxx Xxx ("Xxx"), Xxxx Xxxxxxxxx
("Xxxxxxxxx"), Xxxxxxx Xxxxxx ("Xxxxxx") (Xxx, Xxxxxxxxx and Xxxxxx are
sometimes referred to herein as the "Shareholders") and Rackspace, Ltd.
("Buyer").
WHEREAS, Seller owns and operates a business under the name "Rackspace"
which involves the leasing of internet servers, bandwidth, connectivity, and
administration of all aspects of servers, as well as other inter-net businesses
(collectively, the "Business"); and
WHEREAS, Buyer desires to purchase all or substantially all of the assets
of the Seller pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties agree as follows:
1. SALE AND PURCHASE OF ASSETS.
1.1 SALE AND PURCHASE OF ASSETS. Subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell, convey, transfer,
assign, grant and deliver to Buyer, and Buyer, in reliance on the
representations, warranties and covenants of Seller and the Shareholders, agrees
to purchase, acquire and accept from Seller, all of Seller's right, title and
interest in and to all of the tangible and intangible assets, including real,
personal and mixed property, owned or held by Seller, including but not limited
to all assets used or useful in connection with the operation of the Business
(collectively, the "Assets") which are described on Exhibit A attached hereto.
The Assets shall not include the Excluded Assets, as defined in Section 1.2
below. The Assets shall include but are not limited to:
(a) the leasehold interest under the real property lease
described on Exhibit A (the "Real Property Lease") a true and correct copy of
which have been provided to the Buyer;
(b) all equipment and other tangible personal property used
or useful in connection with the operation of the Business including, all of
which are set forth and described on Exhibit A, and all of Seller's interest in
and to all manufacturer's, distributor's or other warranties relating to any of
the foregoing;
(c) all licenses, permits, franchises, authorizations and
other similar rights issued by any federal, state or local governmental
authority (collectively, the "Authorizations");
(d) those contracts and other agreements to which Seller is
a party and which are listed on Exhibit A (the "Assumed Contracts"), true,
correct and complete copies of which have been delivered to Buyer;
(e) all patents, trade names, trade marks, service marks,
copyrights, computer programs, data, trade secrets, business information,
customer lists, supplier lists, marketing plans, intellectual property rights
(whether or not reduced to writing or other tangible form) and other intangible
property owned or held by Seller and all of the rights associated therewith
(including any and all applications, registrations, extensions and renewals
relating thereto);
(f) all business and other books, papers, files,
correspondence and records pertaining to the operation of the Business; and
(g) all contract rights, accounts and accounts receivable of
Seller.
The Assets to be sold hereunder shall be transferred to Buyer at the
Closing free and clear of all liens, claims, security interests encumbrances and
liabilities of any kind or nature whatsoever ("Encumbrances"). Buyer is not, and
shall not be deemed to have assumed any liability or obligation of the Seller,
except for those liabilities arising after the Closing under the Assumed
Liabilities (as herein defined) as expressly provided for herein.
1.2 EXCLUDED ASSETS. The Assets shall not include the following
(the "Excluded Assets"):
(a) Any and all cash, bank deposits (other than cash
deposits to secure contract obligations which shall be included within the
Assets);
(b) all contracts of insurance and claims against insurers;
(c) all employee benefit plans and assets thereof and all
employment contracts;
(d) All commitments, contracts and agreements not
specifically assumed by Buyer pursuant to Section 1.1 hereof; and
(e) All other items listed on Schedule 1.2 hereto.
2. PURCHASE PRICE; METHOD OF PAYMENT
2.1 PURCHASE PRICE. The purchase price for the Assets is the sum
of $192,369.00 (the "Purchase Price"). The Purchase Price is equal to the
aggregate amount of the liabilities of the Seller listed on Exhibit B. Seller
and the Shareholders represent that Exhibit B accurately describes the names of
all creditors of the Seller (the "Creditors") and the amounts owed by each of
them. Seller and the Shareholders expressly agree to use the proceeds of the
Purchase Price to pay all of the Creditors the amounts owed, and further agree
to make such payments as soon as possible after the execution of this Agreement,
but in no event later than January 10, 1999. All of Seller's Liabilities
(including the name of the creditor and the amount owed) are set forth on
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Exhibit B attached hereto. The Buyer may pay the Seller's creditors directly.
Any such payments will be for the account of Seller and shall reduce the
Purchase Price accordingly. In the event that any additional liabilities of
Seller become known after closing, provided that (i) such liabilities were
incurred prior to closing and not afterward, (ii) the aggregate of all
liabilities of the Seller do not exceed $200,000.00 (which shall include all
liabilities listed on Exhibit B and any other liability of Seller) and (iii) the
shareholders of Seller and Seller did not intentionally or recklessly fail to
disclose such liabilities, at Buyer's election, Buyer shall pay either Seller or
Buyer shall pay such creditors directly. All above notwithstanding, the
aggregate amount of all payments to be made by Buyer under this Agreement shall
not exceed $200,000.00.
2.2 ASSUMPTION OF LIABILITIES. At the Closing, Buyer shall assume
only the liabilities and obligations of Seller to be performed on or after the
Closing Date under (i) the Real Property Lease, and (ii) the Assumed Contracts
(collectively, the "Assumed Liabilities"), except to the extent that such
liabilities arise prior to the Closing. Buyer is not and shall not assume any
other liability of the Seller whatsoever.
2.3 NO OTHER LIABILITIES ASSUMED. Except as expressly provided in
Section 2.2 hereof, Buyer shall not and does not assume any liability or
obligation of Seller, fixed or contingent, disclosed or undisclosed, including
without limitation, (i) contractual obligations, (ii) employment or consulting
contracts or commitments or obligations to employ any employee of Seller, (iii)
obligations for pensions, vacation pay, severance or other employee benefit
plans, programs or practices, (iv) obligations or liabilities for Taxes and (v)
any other liabilities or claims against Seller of any kind or nature whatsoever,
no matter when raised. Except as expressly provided herein, Buyer shall not be
required to defend any suit or claim arising out of any act, event or
transaction occurring prior to the Closing Date or out of any condition existing
prior to the Closing Date, in connection with the ownership or operation of the
Business, including without limitation, any successor or transferee liability.
2.4 ALLOCATION OF PURCHASE PRICE. Within sixty days after the
execution of this Agreement, Buyer and Seller shall use their best efforts to
agree upon an allocation of the Purchase Price amongst the Assets. To the extent
Buyer and Seller reach an agreement on the allocation of the Purchase Price,
Buyer and Seller shall each file with their respective federal income tax return
for the tax year in which the closing occurs, IRS Form 8594 and IRS form 8824,
as applicable, containing the information agreed upon by the parties pursuant to
the immediately preceding sentence. Buyer agrees to report the purchase of the
Assets, and Seller agrees to report the sale of such Assets on all federal,
state and local tax returns in a manner consistent with the information agreed
upon by the parties pursuant to this section and contained in its respective IRS
Form 8594 and IRS Form 8824, as applicable. Notwithstanding any other provision
of this Agreement, the provisions of this Section 2.4 shall survive the Closing
without limitation.
3. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller and the
Shareholders jointly and severally represent and warrant to Buyer as follows:
3.1 BINDING AGREEMENT. This Agreement, and the agreements entered
into pursuant to this Agreement (the "Collateral Agreements") constitutes, and
upon execution and delivery by Seller will constitute, valid and binding
agreements and obligations of Seller enforceable against Seller in accordance
with their respective terms, except as the enforceability hereof may be
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affected by bankruptcy, insolvency or similar laws affecting creditors'
rights generally or court applied equitable remedies. There is no agreement,
understanding, or option between Seller and any third party that encumbers
the Assets or obligates Seller to sell any portion of the Assets.
3.2 FINANCIAL STATEMENTS. Seller represents that all financial
statements, financial information, and reports regarding the financial condition
of the Seller, provided or to be provided to Purchaser are true and correct in
all material respects.
3.3 NO CONFLICT OR BREACH. Except as set forth on Schedule 3.3,
the execution and delivery of this Agreement, the fulfillment of and the
compliance with the respective terms and provisions of this Agreement, and the
consummation of the transactions described in this Agreement, will not and do
not (i) conflict with or constitute a violation of (with or without the giving
of notice or the lapse of time or both) any law, ordinance, regulation, order,
award, judgment, injunction or decree of any legislative body, court,
governmental or regulatory authority or arbitrator which is applicable or
relates to Seller or any of the Assets or of the Business, or (ii) violate or
conflict with, constitute a material default under, result in a material breach,
acceleration or termination of any provision of, require the consent of any
third party under, or result in the creation of any Encumbrance upon any of the
Assets pursuant to, any contract, agreement, commitment, indenture, or other
instrument or obligation to which Seller is a party or by which Seller is bound
or to which any of the Assets may be subject.
3.4 GOVERNMENTAL AND THIRD PARTY CONSENTS. Neither the execution
and delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby, nor compliance by Seller with any provisions
of this Agreement or the Collateral Agreements will require any filing with, or
the obtaining of any permit, authorization, consent or approval of, any
governmental or regulatory authority or any third party.
3.5 LITIGATION; COMPLIANCE WITH LAW. Except as set forth in
Schedule 3.5, there is no action, suit, investigation, claim, arbitration,
proceeding or litigation pending or to the knowledge of the Seller or the
Shareholders, threatened against or involving any of the Seller, the Assets,
or the Business at law or in equity, or before or by any court, arbitrator or
governmental authority. The Business is not operating under or subject to any
order, judgment, decree or injunction of any court, arbitrator or governmental
authority. Seller has complied in all material respects and are in compliance
in all material respects with all laws, ordinances, regulations, awards,
orders, judgments, decrees and injunctions applicable to the Assets and to
the Business and operations of Seller, including the federal, state and local
laws, ordinances, regulations and orders pertaining to employment of labor,
zoning and other matters.
3.6 LEASED REAL PROPERTY.
(a) LEASED OR LICENSED REAL PROPERTY. The Real Property
Lease (complete and accurate copies of which have been provided to the Buyer) is
a legal, valid and binding obligation of the parties thereto that is enforceable
in accordance with its terms and is in full force and effect. Seller enjoys
peaceful and undisturbed possession thereunder and is not in default thereunder
and, to the knowledge of Seller and the Shareholders, no circumstances or events
have occurred which, with notice or the lapse of time or both, could constitute
a default by Seller, or to the knowledge of the Seller or the Shareholders, any
other party, under any of the Real Property Lease.
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(b) COMPLIANCE. The Seller and the Shareholders have not
received notice of any facts or circumstances which lead them to believe that
the Leased Real Property is not in material compliance with applicable
federal, state, and local laws, including zoning, land use, lighting and
marking requirements, and building code laws, ordinances and regulations
necessary to conduct the operations of the Business as presently conducted.
All of the improvements located on the Leased Real Property (the
"Improvements") are in good condition and repair.
(c) TITLE TO LEASED REAL PROPERTY. Seller has, and at
Closing Buyer will receive good and valid leasehold interest in all the Leased
Real Property, free and clear of all Encumbrances.
3.7 TITLE TO ASSETS; SUFFICIENCY OF ASSETS. Seller has good and
valid title to all of the Assets, free and clear of all Encumbrances. At Closing
shall transfer to Buyer good and valid title to all of the Assets free and clear
of all Encumbrances. The Assets constitute all of the assets which are material
to the conduct of the Business.
3.8 CONDITION OF TANGIBLE ASSETS. All of the tangible personal
property included in the Assets to be conveyed to Buyer are in good operating
condition and repair, normal wear and tear excepted; and are suitable, adequate
and fit for the uses for which they are being used by Seller; and such Assets
and the present use thereof are not in violation in any respect of applicable
laws or regulations.
3.9 INTELLECTUAL PROPERTY. Seller has provided Buyer with an
accurate list of all franchises, licenses, service marks, trademarks, trade
names, copyrights, patents and applications therefor, trade secrets, customer
lists, supplier lists, business information, computer programs and other
intellectual property rights (the "Intellectual Property") owned or licensed for
use by or registered in the name of Seller, all of which are valid and in full
force and effect and are transferable to Buyer by the sole act and deed of
Seller and no consent on the part of any other person is necessary to validate
the transfer to Buyer. All Intellectual Property developed by the Seller and all
Intellectual Property developed by any shareholder or employee of the Seller
which relates to the Business, is owned by the Seller and the Seller is free to
transfer and assign such Intellectual Property to the Buyer. To Seller's and
Shareholders' knowledge, the activities of the Business or Seller's use of any
of the foregoing Intellectual Property has not infringed and Buyer's use of such
Intellectual Property will not infringe upon any trademark, trade name,
copyright, patent, trade secret or legally protectable right of another. No
claim or demand has been made by any third party alleging such infringement by
the Seller, nor does the Seller or the Shareholders have any reason to believe
that the use of the Intellectual Property might infringe the rights of a third
party).
3.10 REPORTS AND RECORDS. All returns, reports and statements
relating to the Business currently required to be filed by Seller with any
governmental instrumentality have been filed and complied with in all material
respects and are true, correct and complete in all material respects, and true,
correct and complete copies thereof have been made available for inspection by
Buyer. All such reports, returns and statements shall continue to be filed on a
current basis until the Closing Date, and will be true, correct, and complete in
all material respects.
3.11 LABOR MATTERS. Seller is in material compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages
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and hours with respect to its employees. No employee of the Seller is
represented by any labor union or collective bargaining agreement and there
are no collective bargaining or other labor agreements with respect to
employees of the Seller. Seller is not engaged in any unfair labor practice
with respect to any such employees of the Seller, and no unfair labor
practice charge or complaint against Seller with respect to the Business has
been filed before the National Labor Relations Board, any state labor
relations board or any court or tribunal, and none is threatened. There is no
labor strike, dispute, request for representation, slowdown or stoppage
pending and none is or has been threatened.
3.12 TAXES. (i) Seller has filed or caused to be filed all
returns, declarations of estimated taxes, reports, statements, information
statements and the like ("Tax Returns") required to be filed with any taxing
authority prior to the date hereof; except those Tax Returns for which requests
for extensions have been timely filed, and all such Tax Returns are correct and
complete in all material respects.
(ii) Seller has paid or caused to be paid all taxes
(including, without limitation, income, gross receipts, ad valorem, excise,
value-added, sales, use, transfer, franchise, license, stamp, occupation,
withholding, employment, payroll, property or environmental tax or premium,
together with any interest, penalty, addition to tax or additional amount
imposed by any governmental body or authority; collectively, "Taxes") shown to
be due and payable on such Tax Returns.
(iii) Seller has not executed any waiver or waivers which
extend or have the effect of extending any applicable statute of limitations
with respect to the assessment or collection of Taxes.
(iv) No federal, state, local or foreign audits or other
administrative or court proceedings are presently pending with regard to any Tax
Returns or Taxes of Seller and Seller has not received notice from any
governmental authority of the expected commencement of such proceedings.
(v) There are no liens for Taxes on the Assets of Seller
other than liens for taxes not yet due and payable.
(vi) None of the Assets is subject to a lease.
3.13 UNDISCLOSED LIABILITIES. Seller does not have any liabilities
except to the extent disclosed on Exhibit B attached hereto.
3.14 CONTRACTS/ASSIGNMENTS. Each of the Assumed Contracts is a
valid and binding obligation of Seller. Seller and Shareholder have no reason to
believe that the Assumed Contracts are not binding upon all the parties. None of
the parties to any of such Assumed Contract has terminated, canceled, or
substantially modified any of such Assumed Contracts and neither Seller nor, to
Seller's and Shareholders' knowledge, any other party is in default thereunder.
Each of the Assumed Contracts may be freely assigned by Seller to Buyer without
the requirement of any consent or approval, except as otherwise noted on Exhibit
A.
3.15 EMPLOYEE BENEFITS. Seller has no and has never had any
employee benefit plans (as defined in Section (3) of the Employee Retirement
Income Security Act of 1974, as
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amended ("ERISA"), maintained by or contributed to by Seller (all such plans
are referred to as the "Plans"), or any employee stock option or stock
purchase, bonus, incentive compensation, severance pay and fringe benefit
arrangements. During the five-year period ending at the Closing, Seller has
not made or been required to make any contributions to any "multiemployer
plan" (as defined in Section 3(37) of ERISA).
3.16 TRUE AND CORRECT COPIES. Seller has delivered or made
available to Buyer true, correct, and complete copies of all contracts,
agreements and documents referred to in this Agreement or related to the
Business, together with all modifications thereof and amendments thereto. A true
and correct list of all contracts and agreements between Seller and any third
party related to the Business, other than the Assumed Contracts, whether written
or oral, is contained in Schedule 3.16, all of which shall be terminated by the
Seller prior to Closing.
3.17 INSURANCE. All insurance policies maintained by Seller with
respect to the Assets and operation of the Business have been provided to the
Buyer.
3.18 ADVERSE BUSINESS CHANGES. Since December 23, 1998, there has
not been (i) any adverse change in the financial condition, assets, liabilities,
business, or results or operations of the Seller other than changes in the
ordinary course of business, none of which has been materially adverse, (ii) any
damage, destruction or loss (whether or not covered by insurance) materially and
adversely affecting the Business, (iii) any amendment or termination of any
contract, agreement, plan, lease, or license to which Seller is a party or by
which it is bound, otherwise than in the ordinary course of business or as
required elsewhere in this Agreement, or (iv) any disposition, mortgage, pledge,
or subjection to any lien, claim, charge, option, or encumbrance of any of the
Assets.
3.19 DISCLOSURE. Neither this Agreement nor any written instrument,
list, exhibit or certificate furnished or to be furnished to Buyer pursuant
hereto contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order to make the statements
not misleading. There is no state of facts or circumstances known to Seller or
the Shareholders and not disclosed to Buyer which should be disclosed to Buyer
in order not to make any of the warranties and representations contained herein
not false or misleading or which may have an adverse effect on the Assets.
4. REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer represents, warrants
and covenants to Seller as follows:
4.1 ORGANIZATION AND STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Buyer has all requisite corporate power and corporate authority to enter
into, execute and deliver this Agreement and the Collateral Agreements, and to
perform and comply with all of the terms, covenants and conditions to be
performed or complied with by Buyer in this Agreement and the Collateral
Agreements, and to consummate the transactions contemplated by this Agreement
and the Collateral Agreements.
4.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and of the Collateral Agreements, and the consummation of the
transactions contemplated by this Agreement and the Collateral Agreements, have
been duly and validly authorized by all necessary corporate action on the part
of Buyer. This Agreement constitutes, and upon execution and delivery the
Collateral Agreements will constitute, valid and binding agreements and
obligations of Buyer,
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enforceable in accordance with their respective terms, except as the
enforceability hereof may be affected by bankruptcy, insolvency or similar
laws affecting generally creditors' rights or by court applied equitable
remedies.
5. THE CLOSING; CLOSING DATE.
5.1 CLOSING. The Closing hereunder shall be held upon the
execution of this Agreement at the offices of Xxxxxxxx & Xxxxxxxxx, P.C. located
at 000 X. Xx. Xxxx'x Xxxxxx, Xxx Xxxxxxx, Xxxxx 00000 or such other mutually
agreeable time or location.
5.2 DELIVERY BY SELLER. At or before the Closing, Seller shall
deliver to Buyer:
(a) TRANSFER DOCUMENTS. The following bills of sale,
statements, assignments and other instruments of transfer and consents, in form
prepared by and satisfactory to Buyer, sufficient to transfer and convey to
Buyer, free and clear title (of the quality provided for in this Agreement) to
the Assets to the Buyer, and dated as of the Closing Date:
(i) One or more bills of sale conveying to the Buyer
the tangible personal property;
(iii) One or more assignments of the Assumed Contracts
and the Leased Real Property;
(iv) One or more assignments of the intangible assets;
(v) Any and all tax clearance certificates from state
and local tax authorities as may be requested by the Buyer; provided that Seller
shall be responsible for obtaining all such certificates.
(vi) Such other instruments or documents as Buyer may
reasonably request to effectuate the transfer to Buyer of the Assets.
(vii) Estoppel letters and any other agreement or
document requested by the Buyer, evidencing that there is no default under any
of the Assumed Contracts or the Real Property Lease to be assigned to Buyer and
that such agreements may be assigned to the Buyer.
(viii) UCC-3 termination statements and any other
document requested by the Buyer which evidences the release and termination of
any Encumbrance on the Assets.
(B) SHAREHOLDER AND DIRECTOR RESOLUTIONS. A certified copy
of the resolution of the board of directors and shareholders of the Seller,
authorizing the transactions contemplated by this agreement.
5.3 DELIVERY BY BUYER. At or before the Closing, Buyer shall
deliver to Seller:
(a) PURCHASE PRICE PAYMENT. The Purchase Price by
cashier's check or by wire transfer pursuant to wire instructions that Seller
shall deliver to Buyer prior to the Closing.
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(b) ASSUMPTION AGREEMENTS. One or more assumption agreements
in a form satisfactory to the Buyer, pursuant to which Buyer shall assume the
obligations of Seller under the Assumed Contracts and the Real Property Lease.
6. SURVIVAL; INDEMNIFICATION.
6.1 SURVIVAL OF REPRESENTATIONS/LIMITATION OF LIABILITY/SECURITY
INTEREST. All representations and warranties made by any party to this Agreement
shall survive the Closing for a period of eighteen months, except for
representations and warranties regarding taxes which shall survive for a period
of two years. Notwithstanding anything in this Agreement to the contrary, the
Buyer's sole and exclusive remedy in the event of any breach by the Seller or
any of the Shareholders of any provision, representation or warranty contained
in this Agreement, and Buyer's sole and exclusive recourse for any right to
indemnification under Section 6.2 below, shall be to foreclose upon the Units
(limited partnership interests in Rackspace, Ltd. owned by the Shareholders)
held by the Shareholders (or a portion of such Units), and the Buyer expressly
waives the right to pursue the Shareholders directly for monetary damages. For
this purpose, the Shareholders grant to the Buyer, a security interest in the
Units they own in Rackspace, Ltd. as security for the damages which may result
from any breach of the representations and warranties made by the Shareholders
under this Agreement and as security for the indemnity obligations set forth in
Section 6.2 below. The Buyer shall not exercise any right it may have to
foreclose upon any of the Shareholder's Units unless the aggregate amount of
financial loss to the Buyer exceeds $25,000.00. The Shareholders agree that to
sign a UCC-1 financing statement to perfect the Buyer's lien against their
Units, upon request by Buyer. The parties hereby waive any provision of law to
the extent that it would limit or restrict the agreements set forth in this
Section 6.1. The Buyer shall provide the Shareholders with 15 business days
advance written notice of any such foreclose and the Shareholders shall have
until the end of such 15 business day period to pay the the claim arising
hereunder in cash, in which event no such foreclosure shall occur. The Buyer
shall release its security interest on the Shareholders' Units and such Units
shall no longer be subject to a claim hereunder, upon the earlier to occur of
two years from the date of this Agreement (but only to the extent no unsatisfied
claims have been made on or before such date) or upon the Shareholders escrowing
$250,000 in cash to satisfy any claims that may arise hereunder under an escrow
agreement reasonably acceptable to the Buyer.
6.2 INDEMNIFICATION BY SELLER. Subject to the conditions and
provisions of this Section 6.2 and Section 6.4 hereof, Seller agrees to
indemnify, defend and hold harmless Buyer from and against any and all demands,
claims, complaints, actions or causes of action, suits, proceedings,
investigations, arbitrations, assessments, losses, damages, liabilities, costs
and expenses, including, but not limited to, interest, penalties and reasonable
attorneys' fees and disbursements, asserted against, imposed upon or incurred by
Buyer, directly or indirectly, by reason of or resulting from any
misrepresentation or breach of the representations and warranties of Seller and
the Shareholders contained in or made pursuant to this Agreement.
6.3 INDEMNIFICATION BY BUYER. Subject to the conditions and
provisions of this Section 6.3 and the provision of Section 6.4, Buyer hereby
agrees to indemnify, defend and hold harmless Seller from and against all
demands, claims, complaints, actions or causes of action, suits, proceedings,
investigations, arbitrations, assessments, losses, damages, liabilities, costs
and expenses, including, but not limited to, interest, penalties and reasonable
attorneys' fees and disbursements, asserted against, imposed upon or incurred by
Seller, directly or indirectly, by reason of or resulting from (a) any
liability or obligation of or claims against Seller (whether absolute, accrued,
contingent
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or otherwise and whether contractual, tax or any other type of liability or
obligation or claim) expressly assumed by Buyer pursuant to Section 2.2
hereof; or (b) any misrepresentation or breach of the representations and
warranties of Buyer contained in or made pursuant to this Agreement.
6.4 CONDITIONS OF INDEMNIFICATION. The obligations and liabilities
of Seller and of Buyer hereunder with respect to their respective indemnities
pursuant to this Section 6, resulting from any claim or other assertion of
liability by third parties (hereinafter called collectively, "Claims"), shall be
subject to the following terms and conditions:
(a) The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Claim promptly after the Indemnified
Party receives notice thereof.
(b) The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
of such Claim.
(c) In the event that the Indemnifying Party shall elect not
to undertake such defense, or within a reasonable time after notice of any such
Claim from the Indemnified Party shall fail to defend, the Indemnified Party
(upon further written notice to the Indemnifying Party) shall have the right to
undertake the defense, compromise or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the Indemnifying Party (subject to the right of the Indemnifying Party
to assume defense of such Claim at any time prior to settlement, compromise or
final determination thereof).
(d) Anything in this Section 6.4 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense, compromise or
settlement of the Claim; (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Claim or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such Claim, and (iii) in the event that
the Indemnifying Party undertakes defense of any Claim, the Indemnified Party,
by counsel or other representative of its own choosing and at its sole cost
and expense, shall have the right to consult with the Indemnfiying Party and
its counsel or other representatives concerning such Claim and the Indemnifying
Party and the Indemnified Party and their respective counsel or other
representatives shall cooperate with respect to such Claim.
6.5. NOTICES. All notices, demands, requests, or other
communications which may be or are required to be given or made by any party to
any other party pursuant to this Agreement shall be in writing and shall be
delivered by first class, registered, certified or express mail, return receipt
requested, postage prepaid, or, hand-delivered, addressed as follows:
If to Buyer:
000 Xxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
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If to Seller or the Shareholders:
Xxxxxxx X. Xxx
000 Xxxxxx #000
Xxx Xxxxxxx, Xx 00000
With copy to:
Fulbright & Xxxxxxxx
Attn: Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
or such other address or facsimile number as the respective addressee may
indicate by written notice. Each notice, demand, request or communication which
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, or the affidavit
of messenger) or at such time as delivery is intentionally refused by the
individual named addressee upon presentation.
7. POST CLOSING OBLIGATIONS.
7.1 CHANGE OF NAME. As soon as practicable after the Closing,
Seller shall change (and the Shareholders shall cause Seller to make such
change) its name to a name which is substantially dissimilar to "Cymitar."
Seller agrees never to use the name "Cymitar" or a name similar to Cymitar at
anytime in the future.
8. MISCELLANEOUS.
8.1. SPECIFIC PERFORMANCE. Seller acknowledges that the Assets to
be sold and delivered by Buyer pursuant to this Agreement are unique and that
Buyer has no adequate remedy at law if Seller shall fail to perform any of their
obligations hereunder, and Seller therefore confirm and agree that Buyer's
right to specific performance is essential to protect the rights and interests
of
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Buyer. Accordingly, in addition to any other remedies which Buyer may have
hereunder or at law or in equity or otherwise, Seller hereby agree that Buyer
shall have the right to have all obligations, undertakings, agreements and
other provisions of this Agreement specifically performed by Seller and that
Buyer shall have the right to obtain an order or decree of such specific
performance in any of the courts of the United States or of any state or
other political subdivision thereof.
8.2. FURTHER ASSURANCES. Each of the parties hereto agrees that it
will, at any time, prior to, at or after Closing, take or cause to be taken such
further actions, and execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and obtain such
consents, as may reasonably be necessary or reasonably requested in connection
with the consummation of the purchase and sale contemplated by this Agreement or
in order to fully effectuate the purposes, terms and conditions of this
Agreement.
8.3 BROKERS. Each of Seller and Buyer represents to the other that
it has not retained any broker or person in connection with the transactions
contemplated by this Agreement.
8.4 SCHEDULES AND EXHIBITS. Any item set forth on or in any
Schedule or Exhibit to this Agreement shall be deemed to be incorporated by
reference into this Agreement and any information disclosed in any Schedule
shall be deemed to have been disclosed pursuant to all other Schedules to this
Agreement.
8.5 WAIVER. Except as otherwise provided in this Agreement, no
delay or failure on the part of any party hereto in exercising any right, power
or privilege under this Agreement or under any other instrument or document
given in connection with or pursuant to this Agreement shall impair any such
right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of any such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any party hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then only to the
extent expressly specified therein.
8.6 REMEDIES CUMULATIVE. Except as specifically provided herein,
the remedies provided herein shall be cumulative and shall not preclude the
assertion by Seller or by Buyer of any other rights or the seeking of any other
remedies against the other, or its successors or assigns. Nothing contained
herein shall preclude a party from seeking equitable relief, where appropriate.
8.7 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including the
Schedules and Exhibits hereto and other instruments and documents referred to
herein or delivered pursuant hereto, contains the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior oral
or written agreements, commitments or understandings with respect to such
matters. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification or discharge is sought.
8.8 HEADINGS. The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.
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8.9 SIGNATURE IN COUNTERPARTS. This Agreement may be executed in
separate counterparts, none of which need contain the signature of all parties,
each of which shall be deemed to be an original, and all of which taken together
constitute one and the same instrument. It shall not be necessary in making
proof of this Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto.
8.10 CONSTRUCTION. This Agreement shall be construed and enforced
in accordance with the laws of the State of Texas, excluding the conflicts of
law principles thereof.
8.11 MEDIATION AND ARBITRATION. The parties agree that all
disputes, controversies or claims that may arise between them which relate to
this Agreement, including, without limitation, any dispute, controversy or
claim as to the interpretation or enforcement of any of the provisions of
this Agreement, shall be submitted first to mediation and then to binding
arbitration in the city of San Antonio, Texas in accordance with the rules of
the American Arbitration Association and judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction.
(1) MEDIATION. If a controversy or claim arises between the
parties then that controversy or claim will be mediated within one month of its
identification by the parties.
(2) BINDING ARBITRATION. In the event that the parties
cannot resolve their dispute by mediation within one month, the parties then
agree to bring the dispute to binding arbitration within one month of the
conclusion of the mediation.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or has caused this Agreement to be duly executed and delivered in its
name on its behalf, all as of the day and year first above written.
BUYER:
RACKSPACE, LTD.
BY: Macroweb, LC, its General Partner
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Title: member
----------------------------
SELLER:
CYMITAR TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxxx Xxx
-------------------------------------
Its: President
-------------------------------------
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SHAREHOLDERS:
/s/ XXXXXXX XXX
--------------------------------------
XXXXXXX XXX
/s/ XXXX XXXXXXXXX
--------------------------------------
XXXX XXXXXXXXX
/s/ XXXXXXX XXXXXX
--------------------------------------
XXXXXXX XXXXXX
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