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XXXX OF SALE
AND
ASSET PURCHASE AGREEMENT
by and between
Axtive Software Corporation,
a Texas corporation
and
Edge Technology Group, Inc.,
a Delaware corporation
Dated: June 21, 2002
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XXXX OF SALE AND ASSET PURCHASE AGREEMENT
THIS XXXX OF SALE AND ASSET PURCHASE AGREEMENT (this
"Agreement") is made and entered into this 21st day of June, 2002
(the "Effective Date"), by and between Axtive Software
Corporation a Texas corporation (the "Company") and Edge
Technology Group, Inc., a Delaware corporation (the "Purchaser").
WITNESSETH:
WHEREAS, the Company desires to sell, and the Purchaser
desires to purchase, certain of the tangible and intangible
assets of the Purchaser, in accordance with the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the covenants, warranties
and representations set forth below, the parties hereto, each
intending to be legally bound, agree as follows:
AGREEMENT
1. Purchase and Sale of Purchased Assets. The Company
hereby sells, assigns, transfers, conveys and delivers to the
Purchaser, and the Purchaser hereby purchases from the Company,
free and clear of any and all liens, claims, charges,
liabilities, encumbrances and security interests of whatsoever
kind and nature all of the following assets (collectively, the
"Purchased Assets"):
a) Intangible Assets. All right, title and interest
in, to and under the intangible assets as listed on Schedule
1(a) hereto.
b) Tangible Assets. All right, title and interest in,
to and under the intangible assets as listed on Schedule
1(b) hereto.
2. Purchase Price. The consideration paid by the Purchaser
for the Purchased Assets (the "Common Stock Consideration") shall
consist of shares of the Purchaser's common stock, par value
$0.01 (the "Common Stock") to be issued to the Company as
follows:
a) An initial amount of 400,000 unregistered,
restricted, privately placed shares will be issued to the
Company (the "Initial Issuance") in the form of (i) a stock
certificate representing 200,000 shares of Common Stock to
be issued in the name of and delivered to the Company (the
"Delivered Stock Certificate") and (ii) a stock certificate
representing 200,000 shares of Common Stock to be issued in
the name of the Company and the possession of which shall be
retained by the Purchaser in accordance with Section 7 below
(the "Retained Stock Certificate").
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b) If during the period beginning on the Effective
Date and ending on the date that is one year after the
Effective Date (the "Measurement Date") the Purchaser's
Common Stock has not traded on the NASD Over-The-Counter
Bulletin Board (or other national exchange on which the
Purchaser's Common Stock is then traded) at a price equal to
or in excess of $0.75 per share, then on the Measurement
Date the Purchaser shall issue to the Company, but retain
possession of, an additional certificate (the "Second
Retained Stock Certificate") representing unregistered,
restricted, privately placed shares of Common Stock (the
"Subsequent Issuance") in an amount such that the aggregate
amount of shares received by the Company in both the Initial
Issuance and the Subsequent Issuance shall, when multiplied
by the "Market Value" of the Common Stock on the Measurement
Date, be equal to or greater than three-hundred thousand
dollars ($300,000); provided, however, that in no event
shall the Subsequent Issuance comprise an amount of Common
Stock in excess of 297,674 shares. For purposes of this
Agreement, the "Market Value" of the Common Stock on any
given day shall be the average closing bid price per share
of Edge's Common Stock on either (a) the exchange on which
the Purchaser's Common Stock is then listed or (b) the NASD
Over-The-Counter Bulletin Board, in either case for the 10
days through and including such given day.
c) Notwithstanding the foregoing, in the event either
(i) after reasonable efforts, the Purchaser is unable to
successfully prosecute the expansion of the scope of the
Intangible Assets to encompass the use by the Purchaser in
its current business operations, including for such purposes
the business operations of the Purchaser's subsidiaries (an
"Unsuccessful Expansion"), or (ii) during the period of
time beginning on the Effective Date and continuing until
two years after the Effective Date (the "Delivery Date"),
any trial court enters a final order prejudicing any of the
Purchaser's rights to own or use any of the Intangible
Assets (an "Unsuccessful Defense"), then none of the shares
represented by the Retained Stock Certificate and only one-
half of the shares (rounded up to the nearest whole number
of shares), if any, represented by the Second Retained Stock
Certificate will be delivered to the Company, all as set
forth in Section 7(e) below.
3. Representations and Warranties of the Company. The
Company represents and warrants to the Purchaser as follows:
a) Organization. The Company is a corporation duly
formed, validly existing and in good standing under laws of
the State of Texas.
b) Enforceability and Authority. This Agreement and
the other documents and instruments executed by the Company
in connection herewith (the "Ancillary Documents") have been
duly executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their
respective terms, except as may be limited by bankruptcy,
reorganization, fraudulent conveyance, insolvency and
similar laws of general application relating to or affecting
the enforcement of rights of creditors and subject to
general principles of equity. The Company has full power
and authority (both legal and corporate) to execute and
deliver this Agreement and the Ancillary Documents, and to
perform its obligations hereunder and thereunder, and all
required approvals of the Board of Directors and the
shareholders of the Company have been duly and properly
obtained.
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c) Title of Assets. The Company has good and
marketable title to all of the Purchased Assets, and the
Purchased Assets are free and clear of all liens, claims,
charges, liabilities, encumbrances, and security interests.
Furthermore, the Company (i) has not at any time preceding
the Effective Date, transferred or entered into any
agreement to transfer any of the goodwill of the Company and
(ii) has continued to use the marks transferred hereunder in
commerce and has affirmatively defended its use of and
prosecuted potential infringement upon such marks. As of
the Closing, the Purchaser will obtain good and marketable
title to the Purchased Assets and will own the Purchased
Assets free and clear of all liens, claims, charges,
liabilities, encumbrances, and security interests.
Notwithstanding the foregoing, the Purchaser agrees to
permit the Company a period of thirty (30) days from the
Effective Date in which to amend its articles of
incorporation to change its name from "Axtive Software
Corporation" to a name which does not contain the word
"Axtive" or any derivation of Axtive or any of the other
Intangible Assets transferred hereunder.
d) Litigation. There is no action, suit, proceeding,
claim, application, complaint or investigation in any court
or before any arbitrator or any regulatory or governmental
body pending against the Company affecting the transactions
contemplated by this Agreement or which, if decided
adversely, could affect the right of the Purchaser to
acquire or retain the Purchased Assets.
e) Information Delivered. The Company (i) has
received from the Purchaser copies of the Purchaser's
Reports (the "Reports") on Form 10-KSB for the fiscal year
ended December 31, 2001, and the Form 10-QSB for the fiscal
quarter ended March 31, 2002, the (the Reports collectively
referred to herein as the "SEC Documents") and (ii) has had
the opportunity to ask questions of and receive answers from
the Purchaser concerning the terms and conditions of this
Agreement and to obtain from the Purchaser any additional
information that the Purchaser possesses or can acquire
without unreasonable effort or expense necessary to verify
the accuracy of the information described in the SEC
Documents.
f) Accredited Investors. The Company (i) is an
"accredited investor" as that term is defined under
Regulation D under the Securities Act of 1933, as amended
(the "1933 Act"), and has such knowledge and experience in
financial and business matters that the Company is capable
of evaluating the merits and risks of an investment in the
Purchaser's Common Stock, (ii) fully understands the nature,
scope and duration of the limitations on transfer of the
Purchaser's Common Stock received hereunder, described in
this Agreement and (iii) can bear the economic risk of an
investment in the shares of the Purchaser's Common Stock and
can afford a complete loss of such investment.
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g) Investment Purposes. The Company further
represents, warrants, acknowledges and agrees that (i) it is
acquiring the shares of the Purchaser's Common Stock under
this Agreement for its own account, as principal and not on
behalf of other persons, and for investment and not with a
view to the resale or distribution of all or any part of
such shares in accordance with applicable securities laws,
(ii) it will not sell or otherwise transfer such shares
unless, in the opinion of counsel who is reasonably
satisfactory to the Purchaser, the transfer can be made
without violating the registration provisions of the 1933
Act and the rules and regulations thereunder, unless such
sale or transfer is under an effective registration
statement, and (iii) the certificates representing such
shares will also bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
NOT ISSUED IN A TRANSACTION REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS. THE SHARES REPRESENTED HEREBY
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER
IS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR, IN THE OPINION OF COUNSEL TO
THE ISSUER, IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.
4. Indemnification from the Company. The Company consents
and agrees to defend, indemnify and hold the Purchaser, its
officers, directors, agents, attorneys and accountants harmless
for, from and against any and all damages, losses which shall
include any diminution in value, liabilities (absolute and
contingent), payments, obligations, penalties, claims,
litigation, demands, defenses, judgments, suits, proceedings,
costs, disbursements or expenses (including, without limitation,
fees, disbursements and expenses of attorneys, accountants and
other professional advisors and of expert witnesses and costs of
investigation and preparation) of any kind or nature whatsoever
(collectively, "Damages"), directly or indirectly resulting from,
relating to or arising out of any breach or nonperformance
(partial or total) of or inaccuracy in any representation or
warranty or covenant or agreement of the Company contained in
this Agreement.
5. Survival. The representations, warranties, covenants,
acknowledgments and indemnifications set forth herein shall
survive the execution and delivery of this Agreement and the
Ancillary Documents for a period of twenty-four (24) months from
the Effective Date. The representations, warranties, covenants
and indemnifications contained herein shall not be affected by
any investigation, verification, approval or subsequent notice
made by or on behalf of any party hereto. No specific
representation or warranty shall limit the generality or
applicability of a more general representation or warranty.
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6. Xxxx of Sale. This Agreement is intended to also
operate as a xxxx of sale and shall be evidence of the transfer
of the Purchased Assets as provided for herein and such transfer
and assumption is made based in substantial part on the
representations and warranties and obligations provided for
herein.
7. Closing.
a) Simultaneous Closing. The transactions
contemplated by this Agreement (the "Closing") have taken
place at the offices of Xxxxx & Xxxxxx LLP, 0000 Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 on the Effective
Date, simultaneously with the execution and delivery of this
Agreement. In connection with the Closing, all of the
deliveries contemplated by Sections 7(b) and 7(c) below were
deemed to have been made simultaneously and no delivery or
payment was considered to have been made until all
transactions taken at the Closing have been completed.
b) Delivery of the Initial Stock Certificate. At the
Closing, the Purchaser shall provide to the Company the
Delivered Stock Certificate.
c) Issuance of the Retained Stock Certificate. At
the Closing, the Purchaser shall issue to the Company, but
retain possession of, the Retained Stock Certificate.
d) Issuance of the Second Retained Stock Certificate.
On the Measurement Date, if a Subsequent Issuance is
warranted pursuant to Section 2(b) above, then the Purchaser
shall issue to the Company, but retain possession of, the
Second Retained Stock Certificate.
e) Delivery of the Retained Stock Certificates. On
the Delivery Date, the Purchaser shall deliver possession
of the Retained Stock Certificate, and, if applicable, the
Second Retained Stock Certificate to the Company; provided
however, that in the event of either an Unsuccessful
Expansion or an Unsuccessful Defense the Purchaser shall
reduce the consideration deliverable on the Delivery Date by
the amount of stock represented by the entire Retained
Certificate and one-half of the shares (rounded up to the
nearest whole number of shares) represented by the Second
Retained Stock Certificate, if issued. The Purchaser's
ability to reduce the Purchase Price pursuant to this
Section 7(e) shall in no way be construed to limit the
Purchaser's remedies nor to in any way limit the Purchaser's
ability to pursue additional remedies, whether at law, in
equity, under the Indemnification provisions of Section 4 of
this Agreement, or otherwise.
f) Xxxxxx X. "Scooter" Xxxxxxx, III Indemnity. As
partial consideration for the Purchaser's agreement to
deliver possession of the Retained Stock Certificate, and,
if applicable, the Second Retained Stock Certificate to the
Company on the Measurement Date, Xxxxxx X. "Scooter"
Xxxxxxx, III ("Xxxxxxx") hereby agrees as follows:
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(i) Xxxxxxx hereby affirms and represents and warrants
to the Purchaser that the Company's representations and
warranties set forth in this Agreement are true and
correct. In addition to, and not in lieu of, the
Company's obligation to indemnify the Purchaser set
forth in Section 4 hereof if such representations and
warranties prove inaccurate within twenty four (24)
months from the Effective Date, the Purchaser shall be
entitled to seek recourse against Xxxxxxx if such
representations and warranties of the Company prove
incorrect on or before twenty four (24) months from the
Effective Date, subject to the limitations contained
herein.
(ii) Xxxxxxx'x obligation to the Purchaser shall be
limited to the lesser of (i) $150,000 or (ii) a dollar
amount calculated as follows. On the Measurement Date,
the aggregate number of shares of Common Stock issued
to the Company shall be calculated (which is the sum of
the Initial Issuance and any Subsequent Issuance).
Xxxxxxx'x obligation to the Purchaser shall equal the
dollar amount equal to the product of fifty percent
(50%) of such aggregate number of shares multiplied by
the Market Value of the Common Stock on the Measurement
Date (but not to exceed $150,000). By way of
illustration, if the aggregate number of shares issued
to Xxxxxxx on and through the Measurement Date is
600,000 shares (representing 400,000 Initial Shares and
200,000 shares issued in the Subsequent Issuance), and
the Market Value of the shares on the Measurement Date
is $.50 per share, then Xxxxxxx'x aggregate liability
to the Purchaser for any inaccuracy in the
representations and warranty of the Company shall be
$150,000 (calculated as 50% x 600,000 shares x $.50 per
share Market Value).
g) Additional Closing Deliveries. At the Closing,
the Company shall deliver such other documents of transfer
and assignment as shall be necessary to transfer title in
the Purchased Assets from the Company to the Purchaser.
8. Severable Provisions; Enforceability. Each provision of
this Agreement is intended to be severable. If any provision
hereof shall be declared by a court of competent jurisdiction to
be illegal, unenforceable or invalid for any reason whatsoever,
such illegality, unenforceability or invalidity will not affect
the validity of the remainder of this Agreement or any applicable
provision.
9. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF TEXAS, REGARDLESS OF ANY CONFLICT OF LAW RULES TO THE
CONTRARY.
10. Entire Agreement. This Agreement and the exhibits and
schedules attached hereto constitute the entire Agreement among
the parties with respect to the purchase and sale of the
Purchased Assets and the other matters referenced herein. This
Agreement, therefore, supersedes any and all prior agreements,
arrangements, communications, and representations, whether oral
or written, among the parties, or any of them, relating to the
subject matters hereof.
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11. Construction. The parties hereto acknowledge that each
party was represented by legal counsel, or had the opportunity to
obtain legal counsel, in connection with this Agreement and that
each party and each party's counsel, as applicable, have reviewed
and revised this Agreement, or have had an opportunity to do so,
and that any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.
12. Further Assurances. Each party hereto agrees to do all
acts and things and to make, execute, and deliver such written
instruments as shall from time to time be reasonably required to
further evidence the sale and transfer of the Purchased Assets,
and to carry out the terms and provisions of this Agreement.
13. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective permitted assigns, legal representatives, executors,
heirs and successors.
14. Amendment, Modification or Waiver. No amendment,
modification or waiver of any condition, provision or term of
this Agreement shall be valid or of any effect unless made in
writing, signed by the party or parties to be bound and
specifying with particularity the nature and extent of such
amendment, modification or waiver.
15. No Third Party Beneficiaries or Expansion of Rights.
Notwithstanding anything contained herein to the contrary,
nothing in this Agreement, express or implied, is intended to or
shall be construed to confer upon, or give to, any person,
partnership, corporation or other entity other than the Company
or the Purchaser, any remedy or claim under or by reason of this
Agreement or any terms, covenants or conditions hereof, and all
the terms, covenants and conditions, promises and agreements
contained in this Agreement shall be for the sole and exclusive
benefit of each of the Company and the Purchaser.
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16. Notices. Any notice or other communication required or
permitted to be given to any party pursuant to this Agreement
shall be in writing and shall be deemed to have been delivered:
(a) if mailed, three (3) days after deposited in the United
States mail, postage prepaid; (b) if telecopied, upon delivery;
(c) if hand-delivered, upon delivery against receipt or upon
refusal to accept the notice; or (d) if delivered by Federal
Express or other similar courier, one (1) day after deposited
with such courier, postage prepaid, in each case, addressed to
such party at the address set forth below:
a) If to the Company:
Axtive Software Corporation
0000 Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. "Scooter" Xxxxxxx III
b) If to the Purchaser:
Edge Technology Group, Inc.
0000 Xxxxxxxxx #000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
With a copy, which shall not constitute notice, to:
Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or to such other place as the respective addressee may have
designated in a written notice to the other party as provided in
this Section. Notices may be given by each party's respective
legal counsel.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original.
18. Execution by Facsimile; Delivery of Original Signed
Agreement. This Agreement may be executed by facsimile, and shall
be deemed effectively executed upon the receipt by the Purchaser
and the Company of the last page of this Agreement duly executed
by the other parties hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, Purchaser and the Company have executed
and delivered this Agreement as of the day and year first above
written.
PURCHASER:
Edge Technology Group, Inc.,
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
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COMPANY:
Axtive Software Corporation,
a Texas corporation
By:
--------------------------------
Name:
------------------------------
Title:
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Xxxxxx X. "Scooter" Xxxxxxx, III hereby agrees with the
terms of the foregoing Agreement, and specifically, Xx. Xxxxxxx'x
indemnity obligation under Section 7(f) of the Agreement.
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Xxxxxx X. "Scooter" Xxxxxxx, III
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LIST OF SCHEDULES
1(a) Intangible Assets
1(b) Tangible Assets
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Schedule 1.1(a)
Intangible Assets
1. The trademark for the "Axtive" name, Registration No.
2,159,847, including all uses of such name in connection
with such registration.
2. The trademark for the "Axtive" name and design, Registration
No. 2,159,847, including all uses of such name and design in
connection with such registration.
3. The trademark on the "X Logo" as filed on the Principal
Register on November 2, 1999.
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Schedule 1.1(b)
Tangible Assets
2 executive desks
1 credenza
1 glass conference table with 8 chairs
1 sign
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