EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, is made and entered into as of the 13th day of
September, 2004, by and among Your Auction Stop, LLC, a Georgia limited
liability company ("Seller"), Xxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, and Xxxxxxx
Xxxxxxx (collectively "Principals") and Your Auction Stop, Inc. a Delaware
corporation, or its assigns ("Buyer"). Buyer and Seller are referred to
collectively as the "Parties."
RECITALS:
A. Seller is engaged in the business of advertising and selling goods
of third parties on eBay and/or other on-line auctions (the "Business");
B. Buyer desires to purchase and Seller desires to sell certain assets
related to the Business upon the terms and conditions set forth herein; and
C. The Principals are members and/or creditors of the Seller and desire
that Buyer purchase and the Seller sell certain assets related to the Business
upon the terms and conditions set forth herein and will benefit materially from
the purchase and sale.
AGREEMENTS:
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants, representations, and warranties contained herein, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1. DEFINITIONS. For purposes of this agreement, the following terms
are defined as follows:
(a) "Ancillary Document" shall mean any agreement, letter, or
other document by and between (i) Buyer and (ii) Seller that is referred to
herein or relates to the transactions contemplated hereby.
(b) "Agreement" shall mean this Asset Purchase Agreement and all
schedules and exhibits attached hereto and referred to herein.
(c) "Closing" shall have the meaning given such term in Section 3.1.
(d) "Closing Date" shall have the meaning given such term in
Section 3.1.
(e) "Excluded Assets" shall mean Seller's taxpayer and other
identification numbers, tax returns, minute books, ownership ledgers and other
documents of the Seller relating to the organization and existence of Seller as
a limited liability company (provided that Buyer shall have access thereto to
the extent reasonably necessary for the operation of the Business or the
preparation of tax returns and financial statements of Buyer following the
Closing Date).
(f) "Note" shall have the meaning given such term in Section
2.2(a)(i).
(g) "Purchased Assets" shall have the meaning given such term in
Section 2.1.
(h) "Site" shall mean 0000-x Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxx, XX
00000.
2. SALE AND PURCHASE OF ASSETS.
2.1 Transfer of Assets. On the terms and subject to the conditions of
this Agreement, Buyer shall purchase from Seller, and Seller shall sell, assign,
transfer and deliver to Buyer, on the Closing Date, all of the properties and
assets of such Seller related to, derived from, or used in the operation of the
Business, wherever located, excepting only the Excluded Assets (the "Purchased
Assets"), specifically including, without limitation, the following:
(a) Equipment and Fixtures. All equipment, furniture, fixtures,
signs, motor vehicles and other personal property related to or used in
connection with the Business or located on the Site, including, without
limitation, the assets set forth on the attached Schedule 2.1(a).
(b) Inventory and Merchandise. All raw materials, inventory, goods
and supplies of whatsoever nature or kind and all wrapping, packaging and
advertising materials and any documents related thereto or located on the Site,
including, without limitation, the inventory set forth on the attached Schedule
2.1(b).
(c) Contracts. All of Seller's right, title and interest under
agreements, contracts, indentures, mortgages, leases, instruments, security
interests, guaranties, other similar arrangements, and rights thereunder
relating to the Business or the Purchased Assets arising in the ordinary course
of business including, without limitation, the contracts identified on the
attached Schedule 2.1(c).
(d) Prepaid Assets. All deposits and prepaid assets of Seller
acquired in connection with the operation of the Business, including, without
limitation, those prepaid assets set forth in the attached Schedule 2.1(d).
(e) Intellectual Property. All intellectual property related to
the operation of the Business or use or ownership of the Purchased Assets,
including, but not limited to, those items set forth in the attached Schedule
2.1(e), and more specifically described as follows (the "Intellectual
Property"):
(i) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof;
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(ii) all trademarks, service marks, trade dress, logos, trade
names, and corporate names (including but not limited to the xxxx "Your Auction
Stop"), together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith;
(iii) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith;
(iv) all mask works and all applications, registrations, and
renewals in connection therewith;
(v) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals);
(vi) all computer software (including data and related
documentation);
(vii) all domain names (including but not limited to the name
"xxxxxxxxxxxxxxx.xxx");
(viii) all other proprietary rights; and
(ix) all copies and tangible embodiments thereof (in whatever
form or medium).
(f) Permits and Licenses. All permits, licenses, orders, consents
and approvals of any federal, state or local governmental or regulatory
authority related to the operation of the Business, to the extent assignable,
including, without limitation, the permits and licenses listed on the attached
Schedule 2.1(f).
(g) Cash and Accounts Receivable. All cash on hand, accounts
receivable, refunds and other rights to receive payment of the Seller;
(h) Books and records. All books, records, ledgers, files,
documents, correspondence, lists, plats, architectural plans, drawings, and
specifications, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials; and
(h) Other Assets. All other assets, properties, claims and rights
of Seller not part of the Excluded Assets related to or used in the operation of
the Business.
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2.2 Consideration and Payment for Purchased Assets. The aggregate
purchase price to be paid by Buyer in consideration for the Purchased Assets
shall be as follows:
(a) At Closing. At Closing Buyer shall deliver to Seller:
(i) A payment by wire transfer or cashiers check in the
amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00);
(ii) A promissory note in the principal amount of
Seventy-Five Thousand and No/100 Dollars ($75,000.00) payable in twelve (12)
equal monthly installments (the "Note") in the form set forth on the attached
Schedule 2.2(a)(ii); and
(iii) 588,235 shares of Common Stock, $.001 par value, of
LoyaltyPoint, Inc. (the "Parent Common Stock") (such number of shares having
been determined by dividing One Hundred Thousand and No/100 Dollars
($100,000.00) by the average closing price of a share of Parent Common Stock on
the Over-the-Counter Bulletin Board for the five (5) consecutive trading days
ending on the third trading day prior to the Closing Date).
(b) Assumed Liabilities. At Closing, Buyer shall assume those
liabilities and obligations of Seller set forth on Schedule 2.2 (b). Except as
expressly listed on the attached Schedule 2.2(b), Buyer shall not assume any
liabilities or obligations of Seller or the Principals, and Seller and the
Principals shall be solely liable for all liabilities and obligations arising
from the ownership and operation of the Business and the Purchased Assets and
the use and occupation of the Site prior to the Closing Date, contingent or
fixed, whether or not reflected on the book and records of Seller or the
Principals.
3. CLOSING OF TRANSACTION.
3.1. Closing. Subject to the conditions contained herein, the closing
of the transactions to be effected hereunder (the "Closing") shall be held at
the offices of Buyer's counsel commencing at 10:00 a.m. local time on the first
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Parties may mutually determine;
provided, however, that the Closing shall occur no later than the date of this
Agreement (the actual date of such Closing is herein called the "Closing Date").
3.2 Deliveries at Closing. Subject to the terms and conditions set
forth in this Agreement, at the Closing (a) Seller and the Principals shall
deliver or cause to be delivered the various documents, certificates and
instruments listed in Article 6, hereof; and (b) Buyer shall cause to be
delivered the various documents, certificates and instruments listed in Article
7, hereof.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and the Principals, jointly and severally, represents and
warrants to Buyer that the following representations and warranties are true,
correct and complete as of the date hereof and will be true, correct and
complete as of the Closing Date
4.1 Organization and Good Standing of the Seller. Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Georgia. Seller has all requisite power and authority,
licenses, permits and franchises to own, lease and operate its properties and
assets and to carry on the Business as currently conducted. Seller has full
power and authority to make the representations, warranties and agreements made
hereunder, to execute and deliver this Agreement and the Ancillary Documents,
and to perform its obligations under this Agreement and the Ancillary Documents.
Seller is duly licensed or qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conduced by it makes such
qualification or licensing necessary, except for such failures to be so
licensed, qualified or in good standing which could not reasonably be expected
to have a material adverse effect on the Business.
4.2 Authorization of Agreement and Enforceability. This Agreement and
the Ancillary Documents have been (or will be prior to Closing) duly and validly
authorized, executed and delivered by Seller and the Principals, and constitute
legal, valid and binding obligations of Seller and the Principals, enforceable
against Seller and the Principals, in accordance with their respective terms.
4.3 Effect of Agreement. Neither the execution, delivery, and
performance of this Agreement or the Ancillary Documents, nor the consummation
of the transactions contemplated hereby or thereby by Seller or the Principals
will (a) conflict with or result in a beach of any provision of the articles of
organization or operating agreement of the Seller, (b) constitute or result in
the breach of, conflict with or give rise to a right or forfeiture, termination,
cancellation or acceleration with respect to, any term, condition or provision
of, any note, bond, mortgage, indenture, license or other contract or obligation
to which Seller or the Principals is a party or by which any of their properties
or assets may be bound, except for such conflicts, breaches or defaults as to
which written waivers or consents shall have been obtained on or prior to the
Closing Date, or (c) violate any law, statute, regulation, judgment, order,
writ, injunction, or decree applicable to Seller or the Principals or any of
their properties or assets, which violation could reasonably be expected to have
a material adverse effect on the Business.
4.4 Government and Other Consents. To the knowledge of Seller and the
Principals no consent, order, authorization, qualification, or approval of, or
exemption by, or filing with any governmental, public, or regulatory body or
authority is required in connection with the
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execution, delivery and performance by Seller or the Principals of this
Agreement or any Ancillary Document.
4.5 Title to Property; Absence of Liens and Encumbrances, Etc. Seller
owns and has good and marketable title to its respective personal property and
assets (including, without limitation, the Purchased Assets), free and clear of
all security interests, claims, liens, mortgages, charges and encumbrances. At
closing, Buyer will obtain from Seller good and marketable title to all of the
Purchased Assets free and clear of all security interests, claims, liens,
mortgages, charges and encumbrances.
4.6 Tax Matters. Seller has timely filed all federal, state, local and
other tax and information returns as required by law, and has paid all taxes
shown as due on such returns. Each such return is true, correct and complete,
and to the knowledge of Seller or the Principals, Seller does not have or will
not have any additional liability for taxes with respect to any return
heretofore filed.
4.7 Litigation. There is no claim, action, suit, proceeding,
arbitration, investigation or inquiry pending before any federal, state, local,
foreign or other court or governmental, administrative, or self-regulatory body
or agency, or any private arbitration tribunal, or to the knowledge of Seller or
the Principals threatened against Seller, the Principals, the Business, or any
of their properties or the transactions contemplated by this Agreement or the
Ancillary Documents; nor to the knowledge of Seller or the Principals is there
any basis for any such claim, action, suit, proceeding, arbitration,
investigation or inquiry which may have any adverse effect upon the Business,
the Purchased Assets or the transactions contemplated by this Agreement or the
Ancillary Documents.
4.8 Labor Disputes. To the knowledge of Seller and the Principals, the
Seller is in compliance with all applicable domestic (federal, state and local)
and foreign laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and are not engaged in any unfair
labor practices, and have not discriminated on the basis of age or sex in their
employment conditions or practices.
4.9 Environmental Matters. With respect to Hazardous Materials (as
hereinafter defined), neither the Seller nor the Principals has:
(a) participated in or received notice or has knowledge of any
current or prior use of the Business premises involving the use, generation,
release, treatment, discharge, emission, storage, handling, transportation or
disposal of Hazardous Materials;
(b) received notice or has knowledge that the Site is not free
from contamination by or the presence of Hazardous Materials or that the
activities conducted thereon impose any significant hazard to human health or
the environment or violate applicable federal, state or local statutes, laws,
ordinances, rules and regulations pertaining to Hazardous Materials
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(collectively, the "Environmental Laws"), including, without limitation, the
Federal Comprehensive Environmental Response, Compensation and Liability Act and
all amendments thereof; or
(c) has received or has knowledge that Seller received any
written complaint, order, citation or notice relating to the happening of any
event involving the use, generation, release, treatment, discharge, emission,
handling, storage, transportation, disposal or cleanup of any Hazardous
Materials or the Environmental Laws.
For purposes of this Section 4.9, "Hazardous Materials" includes, but is not
limited to, asbestos, radon, polychlorinated biphenyle, petroleum products and
other waste, substances and materials described as hazardous, toxic, polluting
or dangerous under the Environmental Laws.
4.10 Trademarks, Trade Names, Etc. None of Seller's trade names (including
Your Auction Stop and xxxxxxxxxxxxxxx.xxx), trademarks or domain names
(including 0xxxxxxxxxxxxxx.xxx) have been called into question or challenged
and, to the knowledge of Seller and the Principals, Seller is not infringing
upon any patents, trade names, trademarks, service marks, copyrights, domestic
or foreign, or any other intellectual property rights of any other person, firm
or entity. Seller has not granted any right, title or interest in and to any of
its trade names, trademarks or domain names to any other firm. Seller is the
owner thereof and has the exclusive right to use the same. Seller has not
received any notice (written or oral) claiming that the conduct of Seller's
Business infringes upon any patents, trademarks, trade names, service marks or
copyrights, domestic or foreign, or any other intellectual property rights of
any other person, firm or corporation.
4.11 Financial Statements. Attached hereto as Schedule 4.11 are copies of
certain financial statements of Seller ("Financial Statements"). The Financial
Statements fairly present the financial condition of Seller as of the indicated
dates and the results of operations of Seller for the indicated periods and were
correct and complete in all material respects as of their respective dates and
are consistent with the books and records of Seller. No event has occurred since
the preparation of the Financial Statements which materially adversely affects
the foregoing. The Financial Statements represent bona fide transactions, and do
not contain any untrue statement of any material facts and do not omit to state
any material fact necessary in order to make the statements contained in this
Section 4.11 or therein not misleading.
4.12 Absence of Certain Changes or Events. Except as set forth in Schedule
4.12, since the period end of the most recent Financial Statements, Seller has
not:
(a) taken any action that is not in accordance with the ordinary
course of Seller's business as such business was conducted prior to such period
end; or
(b) suffered the occurrence of any events which, individually or in
the aggregate, have had, or might reasonably be expected to have, a material
adverse effect on its properties or assets, financial condition, results or
operations, business or prospects;
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4.13 Real Property Leases. Schedule 4.13 sets forth a complete and accurate
list of all real property, office or warehouse space, or other facilities
leased, used or occupied by the Seller.. With respect to each such lease, Seller
is not in breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default by Seller. Seller does not
own any real estate.
4.14 Contracts. Schedule 4.14 lists the following contracts and other
agreements to which the Seller is a party:
(a) any agreement (or group of related agreements) for the lease of
personal property providing for lease payments in excess of $500 per annum;
(b) any agreement (or group of related agreements) for the purchase or
sale of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, which cannot be
terminated with thirty days notice, which would result in a material loss to
Seller, or involves consideration in excess of $500;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of $500 or under which it has
imposed a security interest or lien on any of its assets, tangible or
intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any agreement involving any of the Principals and their affiliates
(other than Seller);
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers, and employees;
(h) any collective bargaining agreement;
(i) any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in excess of
$500 or providing severance benefits;
(j) any agreement under which it has advanced or loaned any amount to
any of its directors, officers, and employees;
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(k) any agreement under which the consequences of a default or
termination could have an adverse effect on the business, financial condition,
operations, results of operations, or future prospects of the Target; or
(l) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $500 singly, or $2,500
in the aggregate.
Seller has delivered to the Buyer a correct and complete copy of each
written agreement listed in Schedule 4.14 (as amended as of the Closing Date)
and a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 4.14. With respect to each such agreement: (i)
the agreement is legal, valid, binding, enforceable, and in full force and
effect; (ii) the agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby (to the extent that it is
being assigned and assumed hereunder); (iii) to the knowledge of Seller and the
Principals no party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; and (iv) no
party has repudiated any provision of the agreement.
4.15 No Broker or Finder. The Seller has not taken any action
which would give to any Person a right to a finder's fee or any type of
brokerage commission in relation to or in connection with the transactions
contemplated by this Agreement.
4.16 Other Information. None of the information and documents
which have been or may be furnished by Seller, or its representatives, or the
Principals to Buyer, or to any of its representatives, in connection with the
transactions contemplated by this Agreement, is or will be materially false or
misleading or contains or will contain any material misstatements of fact or
omits or will omit any material fact necessary to be stated in order to make the
statements therein not misleading, nor has Seller withheld from Buyer any
material facts relating to the assets, property or business of the Seller.
4.17 Investment. Seller (i) understands that Parent Common
Stock has not been, and will not be, registered under the Securities Act of 1933
(the "Securities Act"), or under any state securities laws, (ii) understands
that the Parent Common Stock will be subject to restrictions on transferability
or resale and may not be transferred or resold except as permitted under the
Securities Act and applicable state securities laws, (iii) is acquiring the
Parent Common Stock solely for its own account for investment purposes, and not
with a view to the distribution thereof (except to the Seller's Stockholders),
(iv) is a sophisticated investor with knowledge and experience in business and
financial matters, (v) has received certain information concerning LoyaltyPoint,
Inc., a Delaware corporation, and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the Parent Common Stock, and (vi) is able to bear the economic risk and
lack of liquidity inherent in holding the Parent Common Stock.
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Seller further acknowledges that it has received copies of all reports
of LoyaltyPoint, Inc. filed with the SEC since the Form 10-KSB for the period
ending December 31, 2003.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and Principals that the following
representations and warranties are true, correct and complete as of the date
hereof and will be true, correct and complete as of the Closing Date:
5.1 Organization and Good Standing of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to make
the representations, warranties and agreements made hereunder, to execute and
deliver this Agreement and the Ancillary Documents and to perform its
obligations hereunder and thereunder.
5.2 Authorization of Agreement and Enforceability. This Agreement and
the Ancillary Documents have been (or will be prior to Closing) duly and validly
authorized, executed and delivered by Buyer and constitute the legal, valid and
binding obligations of Buyer enforceable against Buyer in accordance with their
terms, except to the extent that such enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws presently or hereinafter in effect.
5.3 Effect of Agreement. Neither the execution, delivery, and
performance of this Agreement or the Ancillary Documents nor the consummation of
the transactions contemplated hereby by Buyer will (a) conflict with or result
in a beach of any provision of the certificate of incorporation or bylaws or the
Buyer or (b) constitute or result in the breach of, conflict with or give rise
to a right of termination, cancellation or acceleration with respect to, any
term, condition or provision of, any note, bond, mortgage, indenture, license or
other contract or obligation to which the Buyer is a party of by which Buyer or
any of its properties or assets may be bound, except for such conflicts,
breaches or defaults as to which written waivers or consents shall have been
obtained on or prior to the Closing Date, or (c) violate any law, statute,
regulation, judgment, order, writ, injunction, or decree applicable to Buyer or
any of its properties or assets.
5.4 Government and Other Consents. No consent, order, authorization,
qualification or approval of, or exemption by, or filing with any governmental,
public, or regulatory body or authority is required in connection with the
execution, delivery and performance by Buyer of this Agreement or any Ancillary
Document, except for filings required under state and federal securities laws.
5.5 Litigation. There are no claims, actions, suits, proceedings,
arbitrations, investigations, or hearings or notice of hearings pending, or to
Buyer's knowledge, threatened before any federal, state, local or foreign court
or governmental, administrative or self-regulatory body or
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agency that adversely affects the ability of Buyer to execute and deliver this
Agreement or the Ancillary Documents and perform its obligations hereunder or
thereunder or which otherwise relates to the consummation of the transaction
contemplated by this Agreement or any Ancillary Document.
5.6 Other Information. None of the information and documents which
have been or may be furnished by Buyer, or its representatives, in connection
with the transactions contemplated by this Agreement, is or will be materially
false or misleading or contains or will contain any material misstatements of
fact or omits or will omit any material fact necessary to be stated in order to
make the statements therein not misleading, nor has Buyer withheld from Seller
or the Principals any material facts relating to the assets, property or
business of the Buyer.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the fulfillment at
Closing of each of the following conditions to the reasonable satisfaction of
Buyer; provided that Buyer, in its discretion, may waive any one or more of such
conditions:
6.1 Accuracy of Representations and Warranties. The representations
and warranties of Seller and the Principals contained in this Agreement and in
any Ancillary Document shall be true in all material respects on and as of the
Closing Date except as affected by transactions contemplated hereby and except
to the extent that any such representations or warranties which were made as of
a specified date shall have been true on and as of such date.
6.2 Performance of Agreements. Seller and the Principals shall have
performed all obligations and agreements and complied with all covenants and
conditions contained in this Agreement on its part to be performed or complied
with at or prior to the Closing Date.
6.3 Required Consents. Seller shall have obtained all consents (in
writing) required for the assignment to Buyer of the Purchased Assets.
6.4 Deliveries. Seller and the Principals shall have delivered or
caused to be delivered to Buyer at or prior to Closing all of the following:
(a) A certificate of the Seller and Principals, dated the Closing
Date, certifying as to the satisfaction of the conditions set forth in Sections
6.1, 6.2 and 6.3 hereof;
(b) A certificate of the Seller, dated the Closing Date, certifying
the consent of the members of the Seller approving this Agreement, the Ancillary
Documents and the transactions contemplated thereby;
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(c) One or more bills of sale, assignments, and other instruments of
transfer conveying good and marketable title to the Purchased Assets to Buyer,
in form and substance satisfactory to Buyer and its counsel;
(d) The written consents contemplated by Section 6.3 in form and
substance satisfactory to Buyer and its counsel;
(e) Executed confidentiality and non-compete agreements among Buyer,
Seller and Principals in the forms set forth as Schedule 6.4(e) attached hereto;
and
(f) Such other documents, opinions and certificates as may be
required under this Agreement or reasonably requested by Buyer.
6.5 Name Change. Seller shall have filed an amendment to its Articles
of Organization and such other documents as may be necessary to change its name
in all jurisdictions in which it transacts business.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER
The obligations of Seller are subject to the fulfillment at the Closing of
each of the following conditions to the reasonable satisfaction of Seller;
provided that Seller may waive any one or more of such conditions:
7.1 Accuracy of Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement or in any Ancillary Document
shall be true in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date, except as
affected by transactions contemplated hereby and except to the extent that any
such representations or warranties which were made as of a specified date shall
have been true on and as of such date.
7.2 Performance of Agreement. Buyer shall have performed all
obligations and agreements and complied with all covenants and conditions
contained in this Agreement to be performed or complied with by it at or prior
to the Closing Date.
7.3 Deliveries by Buyer. Buyer shall have delivered to Seller at or
prior to the Closing all of the following:
(a) The purchase consideration in accordance with Section 2.2(a);
(b) A certificate of an executive officer of Buyer, dated the
Closing Date, certifying as to the satisfaction of the conditions set forth in
Sections 7.1 and 7.2 hereof; and
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(c) A certificate of the Secretary or Assistant Secretary of
Buyer, dated the Closing Date, certifying (i) the resolutions adopted by the
Board of Directors of Buyer approving this Agreement and the transactions
contemplated hereby and (ii) the incumbency of each officer of Buyer executing
this Agreement and any Ancillary Document.
8. OBLIGATIONS AFTER CLOSING
8.1 Further Assurances by Seller. After the Closing hereunder, Seller
shall, at the request of Buyer, execute, acknowledge and deliver to Buyer
without further consideration, all such further assignments, conveyances,
endorsements, deeds, special powers of attorney, consents and other documents,
and take such other action, as Buyer may reasonably request (a) to transfer to,
vest and protect in Buyer and its right, title and interest in the Purchased
Assets, and (b) otherwise to consummate or effectuate the transactions
contemplated by this Agreement.
8.2 Employees and Employee Benefits. On the Closing Date, Seller shall
terminate all employees of Seller and Buyer may, but shall have no obligation
to, employ any such persons on terms and conditions acceptable to Buyer, in its
discretion. Seller shall cooperate with Buyer in communicating with all
employees of Seller that Buyer, in its discretion, desires to employ. Buyer
assumes no obligations or liabilities whatsoever with regard to any employees,
employee benefits or employee benefits plans provided by Seller to its
respective employees. Without limiting the generality of the foregoing, Buyer
specifically does not assume, and Seller shall indemnify and hold Buyer harmless
against, any liabilities arising out of termination of Seller's employees or
employee benefit plans, including, without limitation, liabilities or
obligations imposed by ERISA, COBRA or any other applicable federal, state, or
local laws, rules or regulations.
9. INDEMNIFICATION
9.1 Indemnification by Seller and Principals. Seller and Principals
shall, jointly and severally, indemnify and hold harmless Buyer from, against
and in respect of, any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses (including without limitation interest which may
be imposed in connection therewith, and court costs and reasonable fees and
disbursements of counsel) ("Buyer Loss") resulting from, arising out of or
incurred by Buyer in connection with the following:
(a) any breach of the representations or warranties made by the
Seller and/or the Principals in this Agreement or any Ancillary Document;
(b) any failure or default by the Seller or the Principals with
regard to any of the covenants or agreements made by the Seller or the
Principals in this Agreement or any Ancillary Document, provided that in the
case of any failure or default with respect to any Ancillary Document to which
only one of the Principals is a party, such indemnification obligations shall
not be joint and several among the Principals but shall apply only to such
Principal and the Seller;
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provided further that failure or default by any of the Principals with regard to
his or her employment agreement entered into in connection with this Agreement
shall be excluded from the provisions of this Section 9.1; or
(c) except for the Assumed Liabilities specifically set forth on
Schedule 2.3, any debts, obligations, liabilities, claims, penalties, fines or
damages pertaining to the Seller, its assets, or the Business arising on or
before or related to incidents and occurrences prior to Closing, whether or not
known to the Seller or the Principals.
The amount of any Buyer Loss shall be the amount of cash reimbursement or
set-off that, when received by Buyer, shall place Buyer in the same financial
position it would have been in if such Buyer Loss has not occurred.
9.2 [Intentionally Omitted]
9.3 Limitation on Indemnification. The aggregate liability of the Seller
and Principals pursuant to Section 9.1 shall not exceed the consideration paid
by Buyer pursuant to Section 2.2. Notwithstanding the preceding, the limitation
on indemnification set forth in this Section 9.3 shall not apply to claims for
Losses based upon or relating to (i) any tax liability pursuant to Section 4.7,
or (ii) any liability relating to employees, employee benefits or employee
benefit plans pursuant to Section 8.2.
9.4 Indemnification by Buyer. Buyer shall indemnify and hold harmless
Seller and Principals from, against and in respect of, any and all costs,
losses, claims, liabilities, fines, penalties, damages and expenses (including
without limitation interest which may be imposed in connection therewith, and
court costs and reasonable fees and disbursements of counsel) ("Seller Loss")
resulting from, arising out of or incurred by Seller and Principals in
connection with either of the following:
(a) any breach of the representations or warranties made by the
Buyer in this Agreement or any Ancillary Document;
(b) any failure or default by Buyer with regard to any of the
covenants or agreements made by Buyer in this Agreement or any Ancillary
Document; or
(c) any of the Assumed Liabilities specifically set forth on
Schedule 2.3 and any debts, obligations, liabilities, claims, penalties, fines
or damages pertaining to the ownership, sale, license or use of the Purchased
Assets arising after the Closing, excluding any Loss subject to indemnification
pursuant to Section 9.1.
9.5 Limitation on Indemnification. The aggregate liability of the Buyer
pursuant to Section 9.4 shall not exceed the consideration paid by Buyer
pursuant to Section 2.2.
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The amount of any Seller Loss shall be the amount of cash reimbursement that,
when received by Seller or the Principals, shall place Seller or the Principals
in the same financial position they would have been in if such Seller Loss has
not occurred.
10. MISCELLANEOUS
10.1 Expenses, Etc. Each of the Parties shall pay their own respective
counsel, accountants and other experts' fees and expenses arising in connection
with the negotiation and preparation of this Agreement and the Ancillary
Documents and the consummation of the transactions contemplated hereby and
thereby.
10.2 Survival of Representations and Warranties. Each of the Parties
covenants and agrees that all of the representations, warranties, covenants, and
agreements set forth in this Agreement and in any Ancillary Document shall
survive the Closing and shall not be merged into any instruments of transfer or
other Ancillary Documents delivered by any of the Parties at Closing or at any
other time.
10.3 No Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the Parties
or their respective heirs, successors and assigns any rights, remedies,
obligations, or other liabilities under or by reason of this Agreement.
10.4 Notices. All notices, requests, demands and other communications
which are required to be or may be given under this Agreement shall be in
writing and shall be deemed to have been duly delivered (a) on the date of
delivery if by personal delivery; (b) on the date of transmission with confirmed
receipt by telephone if delivered by telecopier; or (c) on the date on which
return receipt is signed or delivery is refused if dispatched by certified or
registered first class mail, Federal Express or similar service, postage
prepaid, return receipt requested, to the party to whom the same is so given or
made;
If to Seller, to:
0000-x Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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If to Principals, to:
Xxxx Xxxxxxxx
LoyaltyPoint, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Xxxxxxx Xxxxxxx
LoyaltyPoint, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Xxxxxxx Xxxxxxx
0000-x Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Buyer, to: With a copy to:
Schoolpop, Inc. Xxxxx Xxxxxx & Associates, P.A.
0000 Xxxxxxxxx Xxxxxxx 0000 XXX Xxxxxxxxx, Xxxxx 000
Xxxxx 000 Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Xxxxxx, XX 00000 Attn: Xxxxx, X. Xxxxxx, Esq.
Attn: Xxxx Xxxxxxxx, CEO Telephone No.: (000) 000-0000
Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or to such other address as such party shall have specified by notice to the
other party hereto.
10.5 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) supersedes all prior agreements and understandings, oral and
written, between the Parties hereto with respect to the subject matter hereof
and thereof, and this Agreement, together with the Ancillary Documents executed
in connection herewith, constitutes the entire agreement of the Parties as to
the matters set forth herein and therein.
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10.6 Headings. The article and section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
10.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original,
and all of which together shall be deemed to be one and the same instrument.
10.8 Governing Law. This Agreement shall be construed as to both
validity and performance and governed by and enforced in accordance with the
laws of the State of Delaware, without giving effect to the choice of law
principles thereof.
10.9 Severability. If any term, covenant, condition, or provision of
this Agreement or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions, and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition, and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
10.10. Amendments. This Agreement may not be modified or changed
except by an instrument or instruments in writing signed by all Parties.
10.11 Assignment. No party hereto shall assign its rights or
obligations under this Agreement without the prior written consent of the other
Parties hereto, except that Buyer may assign this Agreement to any Affiliate of
Buyer without the consent of Seller.
10.12 Successors and Assigns. Subject to the provisions of Section
10.11 hereof, the covenants, agreements, and conditions contained herein or
granted hereby shall be binding upon and shall inure to the benefit of the
Parties and their respective heirs, successors and permitted assigns.
10.12 No Joint Venture. Buyer, by entering this Agreement and the
Ancillary Documents, and consummating the transactions contemplated hereby and
thereby, shall not be and shall not be considered a partner or joint venturer of
the Seller.
10.13 Construction of Agreement. This Agreement and the Ancillary
Documents are documents negotiated at arm's-length by the Parties and their
respective counsel. Neither this Agreement nor any of the Ancillary Documents
shall be construed as having been "drafted" by any one Party and shall not be
construed against any Party as a drafting party.
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10.4 Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding including an
arbitration proceeding is commenced to enforce the provisions of this Agreement,
the prevailing Party shall be entitled to an award by the court or arbitrator,
as appropriate, of reasonable attorney's fees, including the fees on appeal,
costs and expenses.
[Signature Page Attached]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the date first written above.
BUYER:
YOUR AUCTION STOP, INC., a Delaware corporation
By: _________________________________
Xxxx Xxxxxxxx, Chief Executive Officer
SELLER:
YOUR AUCTION STOP, LLC, a Georgia limited liability
company
By: _________________________________
Xxxxxxx Xxxxxxx, Managing Member
PRINCIPALS:
------------------------------------
XXXX XXXXXXXX
------------------------------------
XXXXXXX XXXXXXX
------------------------------------
XXXXXXX XXXXXXX
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