EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") effective as of the 24th
day of July, 2001, by and between Disease Sciences, Inc., formerly know as
XxxxxxxXxxxxxxx.xxx, Inc., a Delaware corporation (the "Seller") and Xxxxxxx X.
Xxxxxxxx, an individual (the "Buyer").
RECITALS:
WHEREAS, Seller has been engaged in the business of providing
Internet-related services including, (i) Internet Business Solutions, a service
which establishes and hosts auctions, e-commerce and/or other dynamically driven
web sites for other business and organization primarily in both the
business-to-business and business-to-consumer markets, (ii) XxxxxxXxxxxxx.xxx,
an auction/e-commerce web site that has been licensed to Memories and
Memorabilia, Inc., a third party fulfillment house, and (iii) Xxxx.xxx, an
Internet service provider, all through its wholly-owned subsidiary, North
Orlando Sports Promotions, Inc., a Florida corporation ("North Orlando").
WHEREAS, the Seller has recently acquired all of the issued and
outstanding capital stock of Disease S.I., Inc., a Florida corporation
("Disease"), which is a development stage biopharmaceutical/clinical diagnostics
company whose long-term goal is to become a partially integrated pharmaceutical
company with capabilities in research, drug development, clinical investigation,
and regulatory affairs.
WHEREAS, the Seller is a publicly-held company and Buyer is a former
officer and director of Seller, and currently an officer and director of North
Orlando.
WHEREAS, the Buyer remains a shareholder of the Seller.
WHEREAS, the Seller's Board of Directors believe that it is in the best
interest of the Seller and that the success of the Seller will be better
achieved by the concentration of its resources and management time in the
development of the business and operations of Disease.
WHEREAS, the Buyer has previously conducted the operations and business
of North Orlando, and desires to conduct the operations of North Orlando as a
separate business unrelated to the Seller.
WHEREAS, the parties hereto believe that it is in the interest of the
Seller to dispose of the assets and all of the liabilities associated with the
conduct of operations of North Orlando.
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NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1 - SALE AND PURCHASE OF ASSETS
1.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions of this Agreement, the Buyer will at the Closing (as hereinafter
defined), acquire from the Seller (collectively the "Assets") all of the issued
and outstanding capital stock of North Orlando, including (i) all of the rights
and liabilities of North Orlando, (ii) all of the assets, tangible or
intangible, associated with the business and operations of North Orlando
including the web sites ("Web Sites") located at xxx.xxxxxxxxxxxxxxx.xxx,and
xxx.xxxxxxxxxxxxx.xxx, and various domain names registered to the Seller, (iii)
any and all rights, title or interest the Seller may have in and to the trade
names "XxxxxxxXxxxxxxx.xxx" or "XxxxxxXxxxxxx.xxx" including but not limited to
any and trademarks, copyrights or other intellectual property related thereto,
and (iv) all customer records and other documents, records, minute book of North
Orlando and files, regardless of the form or medium in which they are
maintained, which pertain to the Assets.
Attached as Schedule 1.1 hereto and incorporated herein by such
reference is a schedule of all of the Assets included in the purchase by Buyer
pursuant to the terms and conditions of this Agreement.
1.2 Assumption of Liabilities. As full and complete consideration for
the purchase of the Assets, the Buyer shall assume all liabilities associated
with the business and operations of North Orlando, or derived from the conduct
of business activities by North Orlando prior to and subsequent to July 24,
2001. In addition, the Buyer shall assume all liabilities and obligations of the
Seller not specifically contracted or previously assumed by the Seller if they
pertain to the conduct of activities by North Orlando or were conducted for the
benefit of North Orlando and whether or not such liabilities are reflected on
the books or records of Seller on the date hereof or on the Closing Date
(collective all of the aforementioned liabilities are collectively the
"Liabilities"). Attached as Schedule 1.2 hereto and incorporated herein by such
reference is a schedule of all of the Liabilities being assumed by Buyer
pursuant to the terms and conditions of this Agreement. The Buyer represents and
warrants to the Seller that the $30,000 previously lent to the Seller by
Seller's current management has been utilized by the Buyer, in his former role
as management of the Seller, to reduce the amounts due by Seller to KPMG.
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Accordingly, the Buyer is not assuming the $30,000 as a component of the
Liabilities. Likewise, the Buyer and Xxxxxx Xxxxx, a former officer and director
of the Seller, have each executed immediately prior to the Closing a forgiveness
of certain accrued payroll in the aggregate amount of $91,500 due from Seller,
and, accordingly, such liability is not being assumed by the Buyer. The parties
agree to proceed in good faith to identify all liabilities associated with the
conduct of operations of the Seller and North Orlando which pertain to North
Orlando and to make good faith allocations in the event of any uncertainty as to
responsibility for such liabilities by the Seller and North Orlando.
SECTION 2. THE CLOSING
2.1 The Closing and the transfer of title to and possession of the
Assets and assumption of the Liabilities shall take place on July 24, 2001 (the
"Closing Date"). Both parties will execute and deliver at the Closing all
instruments reasonably required to carry out the terms and intent of this
Agreement.
2.2 At Closing, the Seller shall deliver to the Buyer (i) all of
Seller's right, title and interest in and to 708.33 uncertificated shares of
North Orlando purchased by Buyer pursuant to this Agreement, and (ii) such
deeds, bills of sale, endorsements, assignments (except those which shall be the
responsibility of Buyer as set forth in Section 2.3 hereof), and other good and
sufficient instruments of conveyance, transfer and assignment as reasonably
requested by Buyer in order to vest in Buyer all the right, title and interest
of Seller in and to the Assets to be transferred pursuant to this Agreement. At
or after the Closing, and without further consideration, Seller will execute and
deliver such further instruments of conveyance and transfer and take such other
action as Buyer may reasonably request in order to convey and transfer to Buyer
any of the Assets, to be transferred pursuant to this Agreement, or to quiet
Seller's title thereto.
2.3 At Closing, the Buyer shall deliver to Sellers assignments to North
Orlando of the contracts set forth on Schedule 2.3 attached hereto and
incorporated herein by such reference. Seller acknowledges that Buyer may not
have received the assignments executed by each of Memories & Memorabilia, Inc.,
Showcases USA, DotCom, Inc., Numismatic Consultants and XxxxXxxxxx.xxx prior to
the Closing, and Buyer has agreed to use his best efforts to deliver such
assignments within five (5) days after the Closing. Subsequent to the Closing
Date, the Seller shall execute such additional documents and take such
additional actions as are reasonably necessary to facilitate the transactions
contemplated by this Agreement.
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2.4 Within five (5) business days following the Closing Date, the Buyer
shall remove, or caused to be removed, from the Web Sites any references to or
information concerning the Seller, including but not limited all contact
information, investor relations contacts, historical description of the company,
and press releases, as well as any and all references to "XxxxxxxXxxxxxxx.xxx,
Inc." as a corporate entity. Without limiting the foregoing, the Buyer shall
revise, or cause to be revised, the Web Sites so that a visitor to the site(s)
will not see any information which could lead such visitor to believe the site
was owned or operated by the Seller.
2.5 For a period of three (3) years from the Closing Date, the Buyer
shall maintain all corporate and financial records of North Orlando for all
periods prior to the Closing Date in good order and shall (i) provide access to
such documents at such time and from time to time as shall be requested by the
Seller, and (ii) cooperate at Seller's expense with the Seller or Seller's
agents in the preparation of any financial statements of Seller for either prior
fiscal periods preceding the Closing Date, or for subsequent fiscal periods
after the Closing Date in which information concerning North Orlando and its
operations is necessary in the opinion of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, to the best of its knowledge, makes the representations and
warranties to Buyer set forth below.
3.1 Due Incorporation. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.2 Corporate Power of Seller. Seller has the full legal right
and power and all authority and approval required to enter into, execute and
deliver this Agreement and to perform fully its obligations hereunder.
3.3 Due Authority. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by it have been authorized by all
necessary corporate action on the part of Seller. This Agreement is a valid and
binding agreement of Seller, enforceable against the Seller in accordance with
its terms.
3.4 No Consents. No governmental filings, authorizations,
approvals or consents are required to permit Seller to fulfill its obligations
under this Agreement.
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3.5 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) violate any provision of the Certificate of Incorporation of Seller; (ii)
violate, conflict with or result in the breach of any of the terms of, result in
a material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both) a default
under any contract or other agreement to which the Seller is a party; (iii)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon Seller,
or upon the properties or business of the Seller; or (iv) violate any statute,
law or regulation of any jurisdiction applicable to the Seller.
3.6 Compliance with Laws. Seller has complied in all material respects
with all federal, state, county and local laws, ordinances, regulations,
inspections, orders, judgments, injunctions, awards or decrees applicable to the
Assets.
3.7 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Seller in respect of, or in
connection with, the Assets or Liabilities; and there is no action, suit, claim
or legal, administrative or arbitration proceeding or, to the best knowledge of
Seller after due inquiry, any investigation (whether or not the defense thereof
or liabilities in respect thereof are covered by insurance) pending, which would
effect the Assets and the Liabilities.
3.8 Brokers' Fees. The Seller has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyers could become
liable or obligated.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer, to the best of his knowledge, represents and warrants to
Seller as follows:
4.1 Due Authority. Buyer has all power and authority necessary to
enable him to carry out the transactions contemplated by this Agreement. This
Agreement is a valid and binding agreement of Buyer, enforceable against Buyer
in accordance with its terms.
4.2 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
(i) violate, conflict with or result in the breach of any of the terms of,
result in a material modification of, otherwise give any other contracting party
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the right to terminate, or constitute (or with notice or lapse of time or both)
a default under any contract or other agreement to which Buyer is a party; (ii)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon Buyer, or
upon the properties or business of Buyer; or (iii) violate any statute, law or
regulation of any jurisdiction applicable to Buyer.
4.3 Brokers' Fees. Buyer nor his affiliates has no liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which the Seller
could become liable or obligated.
SECTION 5. INDEMNIFICATION
5.1 Obligation to Indemnify. Buyer agree to (i) indemnify, defend and
hold harmless Seller and its directors, officers, employees, affiliates and
assigns from and against any losses, liabilities, damages, deficiencies, costs
or expenses (including interest, penalties and reasonable attorney's fees and
disbursements) ("Loss") and (ii) reimburse the Seller for any legal or other
expense reasonably incurred in connection with investigating and defending
against any such Loss to which such indemnity obligation applies, arising out of
or otherwise due to:
5.1.1 Any failure by Buyer to fulfill the obligations
undertaken by him in connection with the transactions contemplated by this
Agreement, including, but not limited to, any failure by Buyer to pay in full
according to the terms in effect as of the date of this Agreement all
Liabilities assumed by them as set forth in Section 1.2 hereof or any failure by
Buyer to fulfill the terms and conditions of the contracts assigned to Buyer
pursuant to the provisions of Sections 1.1 and 2.3 hereof;
5.1.2 All obligations and claims arising out of the Buyer not
obtaining assignments to all of the contracts described in Section 2.3 hereof
prior to Closing; and
5.1.3 Facts or circumstances existing after the Closing Date
which give rise to claims by any third parties against Seller, including (but
not limited to) any claims arising with respect to the Assets, and claims in
connection with Liabilities specifically assumed by Buyer hereunder.
The foregoing indemnity agreements will be in addition to any
liability which the Seller may otherwise have. The future sale, transfer or
assignment by the Buyer of any of the Assets acquired hereunder or any of the
Liabilities assumed by the Buyer shall not serve as a waiver or mitigation of
Buyer's obligations to indemnify Seller as herein set forth.
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5.2 Claims by Third Parties. Promptly after receipt by Seller of notice
of any demand, claim or circumstances which, with the lapse or time, would give
rise to a claim or the commencement (or threatened commencement) of any action,
proceeding or investigation (an "Asserted Liability") that may result in a Loss,
Seller shall give notice thereof (the "Claims Notice") to Buyer. The Claims
Notice shall describe the Asserted Liability in reasonable detail, and shall
indicate the amount (if stated) of the Loss that has been or may be suffered by
Seller.
5.3 Opportunity to Defend. Buyer may elect to compromise or defend, at
their own expense and by his own counsel, any Asserted Liability. If Buyer
elects to compromise or defend such Asserted Liability, he shall within thirty
(30) days (or sooner, if the nature of the Asserted Liability so requires)
notify Seller of his intent to do so, and Seller shall cooperate, at the expense
of Buyer, in the compromise of, or defense against, such Asserted Liability.
Seller may elect to participate at its own expense, in the defense of such
Asserted Liability. If Buyer elects not to compromise or defend the Asserted
Liability, fails to notify Seller of his election as herein provided, contests
his obligations to indemnify under this Agreement, or at any time fails to
pursue in good faith the resolution of any Asserted Liability, in the sole
opinion of Seller, then Seller may, upon thirty (30) days notice to Buyer pay,
compromise or defend any such Asserted Liability. Buyer shall then promptly
reimburse the Seller for all amounts paid in connection with such Loss. If Buyer
choose to defend any claim, Seller shall make available to Buyer any books,
records or other documents or personnel within its control that are necessary or
appropriate for such defense.
SECTION 6. MISCELLANEOUS
6.1 Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered, or express mail, postage prepaid, and shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or
if mailed, four (4) days after the date of mailing, as follows:
If to Seller: Disease Sciences, Inc.
00000 Xxxxx Xxxx 0
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
If to Buyer: 00 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notice hereunder.
6.2 Entire Agreement. This Agreement and any collateral agreement
executed in connection with the consummation of the transactions contemplated
herein contain the entire agreement among the parties with respect to the
subject matter hereof and related transactions, and supersede all prior
agreements, written or oral, with respect thereto.
6.3 Waivers and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance.
6.4 Construction and Enforcement. This Agreement shall be construed in
accordance with the laws of the State of Florida, without and application of the
principles of conflicts of laws. If it becomes necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
and such legal action results in a final judgment in favor of such party
("Prevailing Party"), then the party or parties against whom said final judgment
is obtained shall reimburse the Prevailing Party for all direct, indirect or
incidental expenses incurred, including, but not limited to, all attorney's's
fees, court costs and other expenses incurred throughout all negotiations,
trials or appeals undertaken in order to enforce the Prevailing Party's rights
hereunder. Any suit, action or proceeding with respect to this Agreement shall
be brought in the state or federal courts located in Palm Beach County in the
State of Florida. The parties hereto hereby accept the exclusive jurisdiction
and venue of those courts for the purpose of any such suit, action or
proceeding. The parties hereto hereby irrevocably waive, to the fullest extent
permitted by law, any objection that any of them may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or any judgment entered by any court in respect thereof
brought in Palm Beach County, Florida, and hereby further irrevocably waive any
claim that any suit, action or proceeding brought in Palm Beach County, Florida,
has been brought in an inconvenient forum.
6.5 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
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6.6 Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance shall, to any extent, be
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall constitute but one and the same
document.
6.8 Independent Legal Counsel. The parties have either (i) been
represented by independent legal counsel in connection with the negotiation and
execution of this Agreement, or (ii) each has had the opportunity to obtain
independent legal counsel, has been advised that it is in their best interests
to do so, and by execution of this Agreement has waived such right.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
SELLER:
DISEASE SCIENCES, INC.
By:
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Xx. Xxxxx Xxxxxxxxx
Chief Executive Officer and President
BUYER:
Xxxxxxx X. Xxxxxxxx
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