EXHIBIT 99.2
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXXXXXXXXX.XXX, INC.
AND
XXXXXXX XXXXXX, XX.
DATED AS OF
June 17, 2002
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
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into as of June 17, 2002, by and between Xxxxxxx Xxxxxx, Xx., individually,
("Purchaser") and Xxxxxxxxxxxxx.xxx, Inc., a Nevada corporation ("Seller").
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Seller and Purchaser are referred to individually as a "Party", and collectively
as the "Parties".
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Seller was formerly engaged in the business of providing detailed
information about the automobile industry, new and used car sales as well as a
parts database and extended warranty information (the "Business"); and
WHEREAS, Seller owns certain assets comprising the Acquired Assets (as
hereinafter defined) which are related to the conduct of the Business; and
WHEREAS, Seller wishes to transfer, and Purchaser wishes to acquire, the
Acquired Assets, subject to the assumption by Purchaser of certain liabilities
of Seller comprising the Assumed Liabilities (as hereinafter defined) and the
release by the Purchaser of certain indebtedness owed by the Seller to the
Purchaser.
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 Definitions
1.1 Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
"Acquired Assets" shall have the meaning set forth in Section 2.1.
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"Acquired Receivables" shall have the meaning set forth in Section
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2.1(a)(xii).
"Affiliate" of any particular Person shall mean any other Person
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controlling, controlled by or under common control with such Person.
"Assignment and Assumption Agreement" shall mean the Assignment and
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Assumption Agreement, substantially in the form of Exhibit A hereto.
"Assumed Liabilities" shall have the meaning set forth in Section
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2.2(a).
"Balance Sheet" means the balance sheet of Seller as of December 31,
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2001, included in the Financial Statements Schedule and the Balance Sheet of the
Seller as of March 31, 2002, also included in the Financial Statements Schedule.
"Closing" shall have the meaning set forth in Section 2.3.
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"Closing Date" shall have the meaning set forth in Section 2.3.
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"control", including any variations thereof, including without limitation,
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such as "controls", "controlled" and "controlled by", shall mean, (i) with
respect to any corporation, the direct or indirect ownership by any Person or
one or more Subsidiaries of that Person, or any combination thereof, of a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof, or (ii) with respect to a partnership, limited
liability company, association or other business entity (other than a
corporation), the direct or indirect ownership by any Person or one or more
Subsidiaries of that Person, or any combination thereof, of a majority of
general partner, manager or other similar ownership interest thereof.
"Excluded Assets" shall have the meaning set forth in Section 2.1(b).
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"Excluded Liabilities" shall have the meaning set forth in Section
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2.2(b).
"Government Licenses" means all permits, licenses, franchises, orders,
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registrations, certificates, variances, approvals and other authorizations
obtained from foreign, federal, state or local governments or governmental
agencies or other similar rights, and all data and records pertaining thereto.
"Liens" shall mean any mortgage, pledge, security interest,
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conditional sale or other title retention agreement, encumbrance, lien,
easement, option, debt, charge, claim or restriction of any kind, excluding
liens for taxes not yet due and payable.
"Person" shall mean any individual, sole proprietorship, partnership,
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joint venture, trust, unincorporated association, corporation, limited liability
company, entity or governmental entity (whether federal, state, county, city or
otherwise and including, without limitation, any instrumentality, division,
agency or department thereof).
"Proprietary Rights" means all of the following owned by, issued to,
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or licensed to Seller, along with all associated income, royalties, damages and
payments due from or payable by any third Party (including, without limitation,
damages and payments for past, present, or future infringements or
misappropriations thereof), all other associated rights (including, without
limitation, the right to xxx and recover for past, present, or future
infringements or misappropriations thereof), and any and all corresponding
rights that, now or hereafter, may be secured throughout the world: (i)
trademarks, service marks, trade dress, logos, slogans, trade names and
corporate names and all registrations and applications for registration thereof,
together with all goodwill associated therewith; (ii) copyrights and works of
authorship, and all registrations and applications for registration thereof;
(iii) patents, patent rights and all registrations and applications for
registration thereof; (iv) computer software (including, without limitation,
data, data bases, source codes and related documentation); (v) trade secrets,
confidential information, and proprietary data and information (including,
without limitation, compilations of data (whether or not copyrighted or
copyrightable), ideas, formulae, compositions, blends, processes, know-how,
manufacturing and production processes and techniques, research and development
information, drawings, specifications, designs, plans, improvements, proposals,
technical data, financial and accounting data, business and marketing plans, and
customer and supplier lists and related information); (vi) all other
intellectual property rights including web addresses and domain names; and (vii)
all copies and tangible embodiments of the foregoing, if any (in whatever form
or medium), including, without limitation, in the case of each of the foregoing
items (i) through (vi), the items set forth on the "Proprietary Rights Schedule"
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attached hereto.
"Representatives" of a Party means the Party's Affiliates and their
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directors, officers, employees, agents, partners, advisors (including without
limitation, accountants, counsel, financial advisors and other authorized
representatives) and parents and other controlling persons.
"SEC" means the Securities and Exchange Commission and any successor
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agency thereto.
"Stockholders" shall mean the holders of the outstanding shares of
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common stock of Seller.
"Subsidiary" shall mean, with respect to any Person, any corporation,
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partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (irrespective
of whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof.
"Tax" shall mean any federal, state, local or foreign income, gross
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receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, real property gains, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, customs, duties, real property, personal property, capital stock,
social security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing;
the foregoing shall include any transferee or secondary liability for a Tax and
any liability assumed by agreement or arising as a result of being (or ceasing
to be) a member of any Affiliated Group or being included (or required to be
included) in any Tax Return relating thereto.
"Tax Return" shall mean any return, declaration, report, claim for
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refund, information return or other document (including any related or
supporting schedule, statement or information) filed or required to be filed in
connection with the determination, assessment or collection of any Tax of any
Party or the administration of any laws, regulations or administrative
requirements relating to any Tax.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
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2.1 Purchase and Sale of Assets.
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(a) Acquired Assets. On the terms and subject to the conditions
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contained in this Agreement, on the Closing Date, Purchaser shall acquire from
Seller, and Seller shall convey, assign, transfer and deliver to Purchaser by
appropriate instruments reasonably satisfactory to Purchaser and its counsel, on
an "as is" basis and subject to the assumption of all Liens relating to the
Acquired Assets and all other liabilities relating to the Acquired Assets and
the Business, all assets, properties, rights, titles and interests of every kind
and nature owned, licensed or leased by Seller to the extent related or used in
the Business including all of the following (collectively, the "Acquired
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Assets"), but excluding all Excluded Assets:
(i) all cash items listed on the Acquired Assets Schedule;
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(ii) all machinery, equipment, tools, furniture, spare parts and
supplies, computers and all related equipment, telephones and all other tangible
personal property listed on the Acquired Assets Schedule;
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(iii) all rights existing under all purchase orders to purchase or
sell goods or products, including, without limitation, any such purchase order
listed on the "Contracts Schedule" and under each other contract listed on the
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Contracts Schedule and specifically identified as a contract to be assigned to
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Purchaser (collectively, the "Assigned Contracts") See Schedule 2.1(a)(iii);
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(iv) all distribution systems and networks including, without
limitation, the right, from and after the Closing Date, to contact and do
business with any distributor, broker or sales representative that distributes
Seller's products ;
(v) all lists and records pertaining to customer accounts (whether
past or current), suppliers, distributors, personnel and agents and all other
books, correspondence and business records;
(vi) all Proprietary Rights, if any, including, without limitation,
those listed on the Proprietary Rights ;
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(vii) all trade accounts receivable as of the Closing Date, such accounts
receivable to be set forth on a schedule to be jointly prepared by Seller and
Purchaser as of the Closing (the "Acquired Receivables");
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(b) Excluded Assets. Notwithstanding the foregoing, the following
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assets are expressly excluded from the acquisition contemplated hereby (the
"Excluded Assets"): (i) the corporate charter, qualifications to conduct
business as a foreign corporation, arrangements with registered agents relating
to foreign qualifications, taxpayer and other identification numbers, seals,
minute books, tax returns, stock transfer books, blank stock certificates, and
other documents relating to the organization, maintenance, and existence of the
Seller as a corporation and (ii) any of the rights of the Seller under this
Agreement (or under any side agreement between any Seller on the one hand and
the Purchaser on the other hand entered into on or after the date of this
Agreement).
2.2 Limited Assumption of Liabilities.
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(a) Limited Assumed Liabilities. In addition to, and not in lieu
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of any other assumption of liabilities made by the Purchaser hereunder or under
any other agreement, from and after the Closing, Purchaser shall assume and
agree to pay, defend, discharge and perform as and when due all liabilities and
obligations of Seller relating to the Business, whether arising at any time
prior to the Closing or arising after the Closing, including, without limitation
all liabilities and obligations of the Seller listed on the Balance Sheet.
(b) Excluded Liabilities. Notwithstanding anything to the
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contrary contained in this Agreement and regardless of whether such liability is
disclosed herein or on any schedule or exhibit hereto, Purchaser will not assume
or be liable for any liabilities or obligations of Seller other than the Assumed
Liabilities (collectively, the "Excluded Liabilities").
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2.3 Closing Subject to the conditions contained
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in this Agreement, the closing of the transactions contemplated by this
Agreement (the "Closing") will occur at the offices of the Seller,
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simultaneously with the closing as defined in the Stock Purchase Agreement dated
May 22, 2002 between the Sellers and those Sellers and Buyers (as those terms
are defined therein) or on such other date as the Parties hereto mutually agree
(the "Closing Date"). The Closing shall be effective as of the opening of
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business on the Closing Date.
2.4 Purchase Price; Release.
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(a) Subject to the terms and conditions contained in this
Agreement, the consideration for the Acquired Assets shall be the forgiveness of
$114,000 owed by the Seller to the Buyer for accrued salary and the assumption
of the Assumed Liabilities contained herein. ("the Purchase Price").
(b) The Purchaser hereby acknowledges that the Releasees (as
defined below) are expressly relying on this release provision in consummating
the transactions contemplated by this Agreement, and would not consummate such
transactions but for this release provision. The release provided hereby is in
addition to, and not in lieu of, any other release provided by the Purchaser to
any Releasee.
The Purchaser, on behalf of himself and each of his Affiliates (if
any), hereby releases and forever discharges the Seller, Xxxxxxx Xxxx, CH
Ventures, Inc., Loyalty United (US), Inc. and their respective Affiliates,
officers, directors, employees and agents (collectively, the "Releasees") from
any and all claims, demands, judgments, proceedings, causes of action, orders,
obligations, contracts, agreements, liens, accounts, costs and expenses
(including attorney's fees and court costs), debts and liabilities whatsoever,
whether known or unknown, suspected or unsuspected, matured or unmatured, both
at law (including federal and state securities laws) and in equity, which the
Purchaser or any of the Purchaser's respective Affiliates now have, have ever
had or may hereafter have against the Releasees arising contemporaneously with
or prior to the date of this Agreement or on account of or arising out of any
matter, cause, event or omission occurring contemporaneously with or prior to
the date of this Agreement, including, but not limited to, (i) the $114,000 owed
to Purchaser by the Seller for accrued salary, and (ii) any rights to
indemnification or reimbursement from the Seller, whether pursuant to the
Company's articles of organization, resolution, contract or otherwise and
whether or not relating to claims pending on, or asserted after, the date of
this Release; provided, however, that nothing contained herein shall operate to
release any obligations of the Seller to the Purchaser arising exclusively as a
result of this Agreement or any other agreements entered into in connection with
the transactions contemplated by this Agreement or the obligations of Xxxxxxx
Xxxx, CH Ventures, Inc. or Loyalty United (US), Inc. arising exclusively as a
result of that certain Stock Purchase Agreement, dated as of May 22, 2002, among
the Purchaser, certain other stockholders of the Seller and Xxxxxxx Xxxx, CH
Ventures, Inc. and Loyalty United (US), Inc. or any other agreements entered
into in connection with the transactions contemplated by such Stock Purchase
Agreement.
The Purchaser hereby irrevocably covenants to refrain from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or causing
to be commenced, any proceeding of any kind against any Releasee, based upon any
matter purported to be released hereby.
Without in any way limiting any of the rights and remedies otherwise
available to any Releasee, the Purchaser shall indemnify and hold harmless each
Releasee from and against all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, security interests, taxes, liens,
losses, lost value, expenses and fees arising directly or indirectly from or in
connection with (i) the assertion by or on behalf of the Purchaser or such
Purchaser's Affiliates of any claim or other matter purported to be released
pursuant to this provision and (ii) the assertion by any third party of any
claim or demand against any Releasee which claim or demand arises directly or
indirectly from, or in connection with, any assertion by or on behalf of such
Purchaser, or any of such Purchaser's Affiliates against any third party of any
claims or other matters purported to be released pursuant to this provision.
ARTICLE 3
CONDITIONS TO CLOSING
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3.1 Conditions to Seller's Obligations. Except as otherwise expressly
provided herein, the obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the
following conditions on or before the Closing Date:
(a) the representations and warranties set forth in Article 5
hereof will be true and correct in all material respects at and as of the
Closing as though then made and as though the Closing Date were substituted for
the date of this Agreement or, in the case of any representations and warranties
made as of a specified date earlier than the Closing Date, on and as of such
earlier date;
(b) Purchaser will have performed in all material respects all the
covenants and agreements required to be performed by it under this Agreement
prior to the Closing;
(c) all necessary filings with regulatory authorities will have
been made and all waiting periods will have expired;
(d) no action or proceeding before any court or government body
will be pending or threatened which, in the reasonable judgment of Seller, makes
it inadvisable or undesirable to consummate the transactions contemplated by
this Agreement by reason of the probability that the action or proceeding will
result in a judgment, decree or order that would prevent the carrying out of
this Agreement or any of the transactions contemplated hereby, declare unlawful
the transactions contemplated hereby or cause such transactions to be rescinded;
(e) the Stockholders of the Seller shall have approved this
Agreement and the transactions contemplated hereby in accordance with Nevada
Law.
3.2 Conditions to Purchaser's Obligation
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Except as otherwise expressly provided in this Agreement,
the obligation of Purchaser to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) the representations and warranties set forth in Article 5
hereof will be true and correct in all respects at and as of the Closing as
though then made and as though the Closing Date were substituted for the date of
this Agreement or, in the case of any representations and warranties made as of
a specified date earlier than the Closing Date, on and as of such earlier date,
except where the failure of such representations and warranties to be true and
correct could not reasonably be expected to have a Material Adverse Effect;
(b) Seller will have performed in all material respects all of the
covenants and agreements required to be performed by them under this Agreement
prior to the Closing;
(c) all consents and approvals by governmental agencies and other
third Parties that are set forth on the attached "Required Consents Schedule"
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and releases of all Liens on the Acquired Assets will have been obtained on
terms and conditions reasonably satisfactory to Purchaser;
(d) all necessary filings with regulatory authorities will have
been made and all waiting periods will have expired;
(e) all Government Licenses that are required to own and operate
the Acquired Assets and to carry on the Business as now conducted will have been
transferred to or obtained by (or, if not required at Closing, applied for by)
Purchaser on terms and conditions no less favorable to Purchaser than they are
to Seller;
(f) Seller shall have delivered to Purchaser, copies of all
assignments and other instruments of transfer and conveyance as Purchaser may
reasonably request, in form and substance reasonably acceptable to Purchaser,
which are effective to vest in Purchaser all right, title and interest in and to
all Proprietary Rights (including any Proprietary Rights licensed from a third
Party);
(g) no action or proceeding before any court or government body
will be pending or threatened which, in the reasonable judgment of Purchaser,
makes it inadvisable or undesirable to consummate the transactions contemplated
by this Agreement by reason of the probability that the action or proceeding
will result in a judgment, decree or order that would prevent the carrying out
of this Agreement or any of the transactions contemplated hereby, declare
unlawful the transactions contemplated hereby or cause such transactions to be
rescinded;
(h) Seller shall have delivered to Purchaser copies of the resolutions
duly adopted by Seller's board of directors and Stockholders authorizing the
execution, delivery and performance of this Agreement and the other agreements
contemplated hereby, and the consummation of all transactions contemplated
hereby and thereby;
(i) Seller shall have delivered to Purchaser copies of all
necessary governmental and third Party consents, approvals, releases and filings
required in order to effect the transactions contemplated by this Agreement and
the other agreements contemplated hereby;
(j) Seller shall have delivered to Purchaser the Assignment and
Assumption Agreement, substantially in the form attached as Exhibit A, and such
other instruments of transfer, assignment, conveyance and delivery, in form and
substance reasonably satisfactory to counsel for Purchaser, as are required in
order to transfer to Purchaser the Seller's title to the Acquired Assets on an
"as is" basis subject to any Liens or other encumbrances on the Acquired Assets
(k) such other documents or instruments as Purchaser reasonably
requests to effect the transactions contemplated hereby;
(l) All proceedings to be taken by Seller in connection with the
consummation of the Closing and the other transactions contemplated hereby and
all certificates, instruments and other documents required to effect the
transactions contemplated hereby reasonably requested by Purchaser will be
reasonably satisfactory in form and substance to Purchaser and its counsel.
Any condition specified in this Section 3.2 may be waived by Purchaser; provided
that no such waiver will be effective unless it is set forth in a writing
executed by Purchaser.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
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As an inducement to Purchaser to enter into this Agreement, Seller
hereby represents and warrants to Purchaser that:
4.1 Organization and Power; Capitalization; Subsidiaries and
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Investments. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of Nevada. Seller has all requisite
power and authority to execute and deliver this Agreement and the other
agreements contemplated hereby and to perform its obligations hereunder and
thereunder.
4.2 Authorization The execution, delivery
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and performance by Seller of this Agreement, the other agreements contemplated
hereby and each of the transactions contemplated hereby or thereby have been
duly and validly authorized by Seller and no other corporate act or proceeding
on the part of Seller, its board of directors or Stockholders is necessary to
authorize the execution, delivery or performance by Seller of this Agreement or
any other agreement contemplated hereby or the consummation of any of the
transactions contemplated hereby or thereby, except for the approval of the
Stockholders of Seller of this Agreement and the transactions contemplated
hereby as required by Nevada Law. This Agreement has been duly executed and
delivered by Seller, and this Agreement constitutes, and the other agreements
contemplated hereby to which Seller is a Party, upon execution and delivery by
Seller (assuming due execution and delivery by any other party thereto), will
each constitute, a valid and binding obligation of Seller, enforceable against
Seller in accordance with their terms, except to the extent enforcement thereof
may be limited by applicable bankruptcy or insolvency laws or general equitable
principles.
4.3 No Breach The execution, delivery and
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performance by Seller of this Agreement and the other agreements contemplated
hereby and the consummation of each of the transactions contemplated hereby or
thereby do not and will not violate, conflict with, result in any breach of,
constitute a default under, result in the termination or acceleration of, create
in any Party the right to accelerate, terminate, modify or cancel, or require
any notice under Seller's Certificate of Incorporation or By-laws.
4.4 Closing Date. All of the representations and warranties of
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Seller contained in this Article 4 and elsewhere in this Agreement and all
information delivered in any schedule, attachment or exhibit hereto or in any
certificate delivered by Seller to Purchaser are true, correct and complete and
contain no untrue statement of a material fact on the date of this Agreement and
shall be true, correct and complete on the Closing Date, except with respect to
any representations and warranties made as of a specified date earlier than the
Closing Date, which shall be true, correct and complete as of such date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASE
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As an inducement to Seller to enter into this Agreement, Purchaser
represents and warrants to Seller that:
5.1 Organization and Power
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Purchaser, is an individual, has all requisite corporate power and authority to
execute and deliver this Agreement and the other agreements contemplated hereby
and to perform its obligations hereunder and thereunder.
5.2 Authorization The execution, delivery
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and performance by Purchaser of this Agreement and the other agreements
contemplated hereby to which Purchaser is a Party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate action, if needed. This Agreement has
been duly executed and delivered by and this Agreement constitutes, and the
other agreements contemplated hereby to which Purchaser is a Party upon
execution and delivery by Purchaser will each constitute, a valid and binding
obligation of Purchaser, enforceable in accordance with their terms, except to
the extent enforcement thereof may be limited by applicable bankruptcy or
insolvency laws or general equitable principles.
ARTICLE 6
6.1 Purchaser Indemnification. (a) Purchaser agrees to indemnify
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and defend Seller and the other Releasees and their respective Stockholders,
officers, directors, employees and Representatives ("Seller Indemnitees") and
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hold them harmless against any Loss which any Seller Indemnitee may suffer,
sustain or become subject to, as the result of (i) the breach by Purchaser of
any representation, warranty, covenant or agreement made by Purchaser contained
in this Agreement or in any writing delivered by Purchaser in connection with
this Agreement, (ii) any Assumed Liability or (iii) any Liability released by
the Purchaser pursuant to this Agreement. The indemnification provided by this
Section 6.1 is in addition to, and not in lieu of, any other indemnification
provided by the Buyer to the Seller Indemnities pursuant to any other agreement
or instrument.
(b) Matters Involving Third Parties.
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(i) If any third party shall notify a Seller Indemnitee with respect
to any matter (a "Third Party Claim") which may give rise to a claim for
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indemnification against the Buyer under this 6, then the Seller Indemnitee
shall promptly notify the Buyer thereof in writing; provided, however, that no
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delay on the part of the Seller Indemnitee in notifying the Buyer shall relieve
the Buyer from any obligation hereunder unless (and then solely to the extent)
the Buyer thereby is prejudiced.
(ii) The Buyer will have the right to defend the Seller Indemnitee
against the Third Party Claim with counsel of its choice reasonably satisfactory
to the Seller Indemnitee so long as (A) the Buyer notifies the Seller Indemnitee
in writing within 10 days after the Buyer has given notice of the Third Party
Claim that the Buyer will indemnify the Seller Indemnitee from and against the
entirety of any Loss the Seller Indemnitee may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim, (B)
the Buyer provides the Seller Indemnitee with evidence reasonably acceptable to
the Seller Indemnitee that the Buyer will have the financial resources to defend
against the Third Party Claim and fulfill its indemnification obligations
hereunder, (C) the Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good faith
judgment of the Seller Indemnitee, likely to establish a precedential custom or
practice adverse to the continuing business interests of the Seller Indemnitee,
and (E) the Buyer conducts the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Buyer is conducting the defense of the Third
Party Claim in accordance with 6(b)(ii) above, (A) the Seller Indemnitee may
retain separate co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (B) the Seller Indemnitee will not consent to
the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Buyer (not to be withheld
unreasonably), and (C) the Buyer will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Seller Indemnitee (not to be withheld
unreasonably).
(iv) In the event any of the conditions in 6(b)(ii) above is or
becomes unsatisfied, however, (A) the Seller Indemnitee may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Buyer need not consult with, or obtain any consent from, any Seller
Indemnitee in connection therewith), (B) the Buyer will reimburse the Seller
Indemnitee promptly and periodically for the costs of defending against the
Third Party Claim (including attorneys' fees and expenses), and (C) the Buyer
will remain responsible for any Loss the Seller Indemnitee may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this 6.
Article 7
7.2 Transition Assistance
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Seller and its Affiliates will not in any manner take any action which is
designed, intended or might be reasonably anticipated to have the effect of
discouraging customers, suppliers, lessors, licensors and other business
associates from maintaining the same business relationships with Purchaser and
its Affiliates after the date of this Agreement as were maintained with Seller
and its Affiliates prior to the date of this Agreement.
7.3 Non-Competition; Non-Solicitation
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As condition precedent to Purchaser to enter into and perform
its obligations under this Agreement, Seller agrees, on behalf of itself and its
Affiliates, that:
(a) For a period of two (2) years after the Closing Date (the
"Non-Competition Period"), it shall not, without the prior written consent of
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Purchaser, anywhere in the United States of America, directly or indirectly,
either for itself or for any other Person, own, operate, manage, control, engage
in, participate in, invest in, any Person that engages in or owns, invests in,
operates, manages or controls any venture or enterprise which directly or
indirectly engages or proposes to engage in the Business or act as a consultant
or advisor to or otherwise render services to any Person in connection with that
Person engaging in the Business. Nothing herein shall prohibit Seller from (i)
being a passive owner of not more than 5% of the outstanding stock of any class
of securities of a publicly traded corporation engaged in such business, so long
as it has no active participation in the business of such corporation, or (ii)
performing any services for Purchaser or its Affiliates.
(b) During the Non-Competition Period, it will not directly or
indirectly offer employment to or hire (in any capacity) any former employee of
Seller who is hired by Purchaser.
(c) If, at the time of enforcement of this Section 7.10, a court
shall hold that the duration, scope, geographic area or other restrictions
stated herein are unreasonable under circumstances then existing, the Parties
agree that the maximum duration, scope, geographic area or other restrictions
deemed reasonable under such circumstances by such court shall be substituted
for the stated duration, scope, geographic area or other restrictions.
(d) Seller recognizes and affirms that in the event of breach by
it of any of the provisions of this Section 7.10, money damages would be
inadequate and Purchaser would have no adequate remedy at law. Accordingly,
Seller agrees that Purchaser shall have the right, in addition to any other
rights and remedies existing in its favor, to enforce its rights and Seller's
obligations under this Section 7.10 not only by an action or actions for
damages, but also by an action or actions for specific performance, injunctive
and/or other equitable relief in order to enforce or prevent any violations
(whether anticipatory, continuing or future) of the provisions of this Section
7.10 (including, without limitation, the extension of the Non-Competition Period
by a period equal to (i) the length of the violation of this Section 7.10 plus
(ii) the length of any court proceedings necessary to stop such violation). In
the event of a breach or violation by Seller of any of the provisions of this
Section 7.10, the running of the Non-Competition Period (but not of Seller's
obligations under this Section 7.10) shall be tolled with respect to Seller
during the continuance of any actual breach or violation.
ARTICLE 8
MISCELLANEOUS
-------------
8.1 Amendment and Waiver
----------------------
This Agreement may be amended, and any provision of this Agreement may be
waived; provided that any such amendment or waiver will be binding on any Party
hereto only if such amendment or waiver is set forth in a writing executed by
such Party. No course of dealing between or among any persons having any
interest in this Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute, a waiver of any other provisions,
whether or not similar, nor shall any waiver constitute a continuing waiver.
8.2 Notices All notices, demands and other
-------
communications to be given or delivered to any Party hereto under or by reason
of the provisions of this Agreement will be in writing and will be deemed to
have been given when personally delivered, sent by reputable overnight courier
or transmitted by facsimile or telecopy, to the addresses indicated below
(unless another address is so specified in writing):
Notices to Purchaser:
----------------------
Xxxxxxx Xxxxxx, Xx.
XX Xxx 000
Xxx Xxxxx, Xxx Xxxx 00000
Facsimile Number:
Notices to Seller:
-------------------
Xxxxxxxxxxxxx.xxx
At its address as listed on
Its most recent report filed
With the Securities and Exchange Commission
8.3 Severability Whenever possible, each
------------
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
8.4 No Strict Construction
------------------------
The language used in this Agreement shall be deemed to be the language chosen by
the Parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any Person. The use of the word "including"
in this Agreement or in any of the agreements contemplated hereby shall be by
way of example rather than by limitation.
8.5 Captions The captions used in this Agreement
--------
are for convenience of reference only and do not constitute a part of this
Agreement and shall not be deemed to limit, characterize or in any way affect
any provision of this Agreement, and all provisions of this Agreement shall be
enforced and construed as if no caption had been used in this Agreement.
8.6 No Third Party Beneficiaries
-------------------------------
Beneficiaries. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person, firm or corporation, other than
the Parties hereto and the Releasees, the Stockholders and their respective
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement, such third Parties specifically including, without limitation,
employees or creditors of Seller.
8.7 Complete Agreement This Agreement
-------------------
contains the complete agreement between the Parties hereto with respect to the
subject matter hereof and supersedes any prior understandings, agreements or
representations by or between the Parties, written or oral, which may have
related to the subject matter hereof in any way.
8.8. Counterparts This Agreement may be
------------
executed in one or more counterparts (any one or more of which may be by
facsimile), all of which taken together shall constitute one and the same
agreement.
8.9. Governing Law This Agreement shall be
--------------
governed by and construed in accordance with the domestic laws of the State of
New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York.
8.10. Consent to Jurisdiction Each
-----------------------
of the Parties hereto (i) consents to submit itself to the co-exclusive personal
jurisdiction of any federal court located in the State of New York or any New
York state court in the event of any dispute arising out of this Agreement or
any of the transactions contemplated by this Agreement and (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
XXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxx
________________________________
Name:
Title:
By: /s/ Xxxxxxx Xxxxxx
______________________________
Name: Xxxxxxx Xxxxxx, Xx.
------
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of June , 2002 (the
"Assignment Agreement") by and between Xxxxxxxxxxxxx.xxx, Inc. a Nevada
corporation ("Assignor" or "Seller"), and Xxxxxxx Xxxxxx, Xx.,
individually("Purchaser" or "Assignee").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to an Asset Purchase Agreement
dated of as of June , 2002 (as amended, supplemented or otherwise modified
from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Purchaser agreed to assume certain
liabilities and obligations of Seller as are described in the Agreement and/or
its Schedules;
WHEREAS, it is the Parties' intention to reflect the transfer of the
Acquired Assets by the execution and delivery of this Assignment Agreement
between Seller and Purchaser.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree as follows:
1. Capitalized terms which are used in this Assignment Agreement but
are not defined herein shall have the meanings ascribed to such terms in the
Agreement.
2. Seller hereby assigns, conveys, transfers, delivers and sets over to
Purchaser, on an "as is" basis subject to all Liens, all of the right, title and
interest that Seller possesses and has the right to transfer in, to and under
the Acquired Assets.
3. Purchaser hereby assumes all liabilities and obligations of Seller
constituting the Assumed Liabilities, provided, however, that Purchaser is not
assuming or performing any liabilities or obligations that constitute Excluded
Liabilities.
4. Each party hereby agrees with the other party to execute and deliver to
such other party such further documents and instruments as may be necessary or
reasonably requested by such other party to further confirm and perfect the
assignment and transfer of the Acquired Assets to Purchaser and the Assumption
of the Assumed Liabilities by the Purchaser.
5. In the event that any provision of this Assignment Agreement is
construed to conflict with a provision of the Agreement, the provision in the
Agreement shall be deemed controlling.
6. This Assignment Agreement shall bind and shall inure to the benefit of
the respective parties and their assigns, transferees and successors.
7. This Assignment Agreement shall be construed and enforced in accordance
with the laws of the State of New York (without giving effect to conflict of law
principles).
8. This Assignment Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Assignment Agreement
as of the date first above written.
XXXXXXX XXXXXX, XX.
By: ______________________________
Name:
Title:
XXXXXXXXXXXXX.XXX, INC.
By: ______________________________
Name:
Title:
LIST OF DISCLOSURE SCHEDULES
----------------------------
Acquired Assets Schedule 2.1(a)
Conference table with six chairs
Dell computer with printer
1 executive desk with chair
2 waiting room chairs
2 shelves
1 Sprint telephone system
A 3 piece wall divider
1 fax and copier machine
4 filing cabinets
The domain name xxxx://xxx.xxxxxxxxxxxxx.xxx
The right to do business as "Dealer Direct Services"
Acquired Receivables Schedule 2.1(a)(vii)
All outstanding fees owed to the Company or to the Company DBA Dealer Direct
Services as of the date of Closing shall be transferred to Xxxxxxx
Xxxxxx.
Contracts Schedule 2.1(a)(iii)
a. Agreement between the Company and Warranty Gold
b. Agreement between the Company and Heritage
Proprietary Rights Schedule 2.1(a)(vi)
None
Required Consents Schedule 3.2(c)
a. Agreement between the Company and Warranty Gold
b. Agreement between the Company and Heritage
