SALE AND PURCHASE OF ASSETS AGREEMENT
THIS AGREEMENT is made and entered into as of the 30th day of September, 1995,
by and between XIOX CORPORATION, a Delaware corporation ("Seller"), and XXXXXXX
XXXXX, an individual ("Purchaser").
RECITALS
A. Seller is engaged in, among other activities, the business of selling,
installing and maintaining call accounting, answer detection and is
contemplating providing voicemail products in the hospitality market including
equipment and services sold under the names Gemini Telemanagement Systems
("GTS") and RBC Systems ("RBC").
B. Seller desires to sell and Purchaser desires to purchase certain of Seller's
assets related to the business of GTS ("GTS Business") and RBC Systems ("RBC
Business") on the terms and conditions set forth in this Agreement.
C. Seller wishes to appoint Purchaser to be a distributor of Seller's call
accounting, answer detection and voicemail products in the hospitality market
and Purchaser desires to accept such appointment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
hereinafter contained, the parties hereby agree as follows:
1. Definitions.
1.1 "Accounts Receivable" refers to those accounts identified in Schedule
1.1.
1.2 "Assets" means (a) the assets of the Business set forth in Schedule
1.2, (b) the Inventory, Accounts Receivable and Support Assets as defined in
this Agreement, (c) all customer databases in Service Magic and the RBC and GTS
databases in Goldmine, contacts, contracts, telephone numbers currently used in
the Business, (d) trademarks, service marks, trade names, brand names related to
the names "Gemini Telemanagement Systems", "GTS", "GTS 2000", "RBC Systems",
"RBC", "RBC Mini", "RBC -2", "RBC-2000", "RBC-3000" and all derivatives thereof,
(e) copyrights, and any related registrations, if any and all other products,
goodwill, technology, specifications, trade secrets, third party software used
in conjunction with the operation of the Business, records, files, evidence of
title, written customer sales referrals and leads and correspondence relating
solely thereto. Notwithstanding the above, "Assets" specifically do not include
the call accounting and related rate tables, answer detection or voice mail
products, or related software (both object and source code) owned by Xiox, GTS
or RBC prior to the Closing, whether previously owned or developed by GTS or
RBC. The above exclusions include all inventions, trade secrets, formulas,
process engineering, technical data, artwork, schematic drawings, secret
processes, engineering drawings, proprietary rights,
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proprietary drawings, know-how, algorithms, flow charts, trademarks,
servicemarks and other marks, logos, copyright, patents, and all applications
therefore, registration thereof and licenses in respect there to relating to the
above referenced products and related software.
1.3 "Xxxx of Sale", see Section 5.2.b.
1.4 "Business" means the sale, installation and servicing of the GTS
Business and RBC Business product offerings and the "Assets" as defined and
subject to the limitations set forth in Section 1.2 above.
1.5 "Closing" and "Closing Date" shall refer to September 30, 1995.
1.6 "Consideration", see Section 2.3.
1.7 "Inventory" means those items of inventory and spare parts held by
Seller listed in Schedule 1.7.
1.8 "Support Assets" means those assets used by Seller in support of the
Business, which assets are listed in Schedule 1.8 attached hereto.
1.9 "Warranty/Sales Obligations" means the obligations of Seller to provide
services under warranties extended to purchasers of GTS systems or RBC systems
and related products and service contracts listed in Schedule 1.9 and only
Schedule 1.9.
2. Transfer of Assets.
2.1 Commitment to Sell. Upon the terms and subject to the conditions set
forth in this Agreement, Seller shall sell, convey, transfer, assign and deliver
to Purchaser by xxxx of sale, assignment or other appropriate instruments, the
Assets, free and clear of all liens, pledges, mortgages, restrictions, charges,
equities or encumbrances of any kind whatsoever.
2.2 Commitment to Purchase. Upon the terms and subject to the conditions
set forth in this Agreement, Purchaser shall purchase the Assets and in full
payment for such purchase shall pay to Seller the Consideration.
2.3 Consideration.
a. In consideration of the sale by Seller to Purchaser of the Assets,
Purchaser shall deliver the promissory note in the form attached as Exhibit
2.3.a to Seller at Closing in the amount of $52,254.95 and (b) assume the
Warranty/Sales Obligations (the "Consideration").
b. Seller grants Purchaser a non-exclusive, perpetual license to
utilize the brochures, manuals and lead databases set forth in Act and Goldmine
related to the Business in existence as of the Closing Date.
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c. Except as specifically set forth in Section 1.2, it is specifically
understood that the rights being transferred by Seller to Purchaser hereunder
includes all trade secrets and other proprietary rights of GTS and RBC Systems
created, developed or enhanced while such entities were owned by Seller which
relate to the Business.
3. Representations, Warranties and Covenants of Seller. Seller represents and
warrants to Purchaser and agrees as follows:
3.1 Organization and Standing. Seller 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 own or lease and operate
its properties and carry on its business as it is now being conducted.
3.2 Title to Assets. Except for the Assets acquired by Seller pursuant to
that certain Agreement for Business Combination dated August 17, 1994, by and
among Seller, Purchaser and certain other individuals (the "GTS Assets") for
which Seller only represents and warrants to Purchaser that Seller conveys to
Purchaser all of Seller's right, title and interest in the GTS Assets, Seller
has, and on the Closing Date will have, good and marketable title to the Assets,
free and clear of all liens, pledges, mortgages and encumbrances.
3.3 Power to Consummate Transaction. Seller has full power and authority to
enter into the transactions contemplated herein.
3.4 Conflicting Agreement. The execution and delivery of this Agreement on
the part of Seller shall not, at the Closing Date, conflict with or result in a
breach of any of the terms, conditions or provisions of any material agreement
or instrument to which Seller is a party, or by which it is or may be bound, or
constitute a default thereunder, or result in the creation or imposition of any
lien, charge or encumbrances upon, or give to any other person any interest or
rights, including rights of termination or cancellation, in or with respect to
any of the assets or contracts being sold to Purchaser hereunder.
3.5 Litigation. There is no litigation or proceedings pending or threatened
against the Seller relating to the Assets.
3.6 Inventory Condition. The Inventory, as set forth in Schedule 1.7,
consists of items of a quality useable and saleable as new, used or refurbished
products in the normal course of Seller's business.
3.7 Confidential Information. Seller heretofore has not transferred,
conveyed or assigned, its interest in or title to the Assets and has not
disclosed to any party any technology, specifications, trade secrets, software,
records or files which, at the time of any such disclosure, constituted trade
secrets or confidential information of the Business.
4. Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller that Purchaser has full power and authority to enter into the
transactions contemplated herein, including, but not limited to, the assumption
of the Warranty/Sales Obligations.
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5. The Closing.
5.1 Time and Place. The transactions contemplated hereby shall be
consummated at a closing (the "Closing") which shall take place at the offices
of Xxxx & Xxxxxxxx, A Professional Corporation, 10:00 a.m. on September 30,
1995, or such place and time upon which the parties may otherwise agree in
writing (the "Closing Date").
5.2 Actions of Seller. At the Closing, Seller shall deliver an executed
counterpart or counterparts of the following to Purchaser:
a. A detailed list of the Assets as set forth in Schedule 1.2;
b. A xxxx of sale as set forth in Exhibit 5.2.b (the "Xxxx of Sale");
c. A detailed list of the Warranty/Sales Obligations as set forth in
Schedule 1.9;
d. A detailed list of the Inventory as set forth in Schedule 1.7;
e. A detailed list of the Support Assets as set forth in Schedule 1.8;
f. All books, records, files, evidence of title, written sales
references and leads and correspondence relating solely to the Business; and
g. Such other documents as may be reasonably required by Purchaser.
h. A distribution agreement as set forth in Exhibit 5.2.i (the
"Distribution Agreement").
5.3 Actions of Purchaser. At the Closing, Purchaser shall deliver an
executed counterpart or counterparts of the following to Seller:
a. The Consideration;
b. The Distribution Agreement; and
c. Such other documents as may reasonably be required by Seller.
5.4 Employment Status. As of the Closing Date Purchaser's employment
status with Seller shall be modified as follows:
a. Purchaser shall receive $1,714.26 on the 15th and
last day of each month through January 15, 1996.
b. Purchaser shall be relieved of his proprietary rights and
nondisclosure obligations as set forth in (a) the Employment Agreement between
Purchaser and Seller dated Xxxxxx 00, 0000, (x) the Agreement for Business
Combination among Purchaser, Seller et. al.
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dated August 17, 1994 and (c) except for Purchaser's obligation not to solicit
employees of Seller, which prohibition shall terminate September 30, 1996 and
Purchaser obligation not to disclose the proprietary property of Seller not
transferred to Purchaser pursuant to this Agreement, the Proprietary Information
and Inventions Agreement between the parties dated August 17, 1994.
c. All work Purchaser performs, any inventions he develops and all
information he obtains after the Closing Date shall be the exclusive property of
Purchaser.
5.5 Both Parties.
a. Third Parties. Each party agrees it will not sell products to or
perform any services for the benefit of any third party if such third party is
delinquent in its payment obligations to the other party as of the Closing Date
and such delinquency has not been cured as the date of the proposed transaction.
Except for the above restriction, Purchaser shall have the right to sell
products and services in the hotel industry.
x. Xxxxxx. Prior to the Closing Date, Purchaser shall inform Xxxxxx
Xxxxxx of this transaction and offer Xxxxxx a position with Purchaser. After
such offer is made, Purchaser shall inform Seller of their discussion and at
that point Seller may approach Xxxxxx and indicate to him they would be willing
to retain him at his then current salary. If Xxxxxx decides to be employed by
Purchaser, except as provided above, Seller agrees to not solicit the employment
of Xxxxxx for a period of one year from the Closing Date.
c. NANP. Purchaser shall have the right to purchase NANP upgrades for RBC
units for a maximum price of $ [REDACTED] per unit for one year from September
30, 1995 and a minimum of fifteen units per year from September 30, 1996 through
September 30, 1998. Purchaser also shall have the right to purchase RBC rate
tables for $ [REDACTED] per unit or a subscription of four rate table updates
per year for $ [REDACTED] per year through September 30, 1998. Rate table prices
may be increased proportionate to any increase in the Xiox Summa Pro rate table
prices. The rate tables will be downloaded electronically to Purchaser.
Purchaser shall then burn a single set of Eproms. The NANP upgrades for the
Prophet and PCX series products shall be $ [REDACTED] per unit and rate tables
shall be $ [REDACTED] per unit through September 30, 1998.
d. Additional Inventory. Prior to December 16, 1995, if available,
Purchaser shall have the right to purchase the inventory listed on Exhibit 6.1.d
at the prices indicated. If prior to December 16, 1995, a third party expresses
an interest in purchasing all or part of such inventory on a bona fide, arms
length basis, Purchaser shall have a right of first refusal to purchase such
inventory.
x. Xxxxxxxxxx. Purchaser shall have the right to offer Xxxxx
Xxxxxxxxxx a position with Purchaser.
f. Service Payments. All checks for service or service renewal
commencing after September 30, 1995 will be forwarded to Purchaser. Service
contracts that expire prior to
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October 1, 1995 have thirty (30) days maximum to send in payment for renewal or
contract will be deemed expired. Payments for such shall be Seller's.
g. Sales. Any sales from GTS or RBC Systems after the CLOSING DATE
shall be for the benefit of Purchaser and Seller shall immediately forward to
Purchaser all proceeds from the sale and installation of such products.
h. Support. For a period of three years from the Closing Date Seller
shall provide support and upgrades to Purchaser for the RBC and PCX products
(collectively "Upgrades") on terms no less favorable than those provided to any
other customer of Seller. In the event Seller has not done the Upgrade requested
by Purchaser, Seller shall provide Purchaser such Upgrade on a time and
materials basis at its then standard rates. If Seller is unable or unwilling to
provide such services, Seller shall immediately provide Purchaser with a copy of
the source code and other materials necessary to complete such Upgrade at no
cost to Purchaser. Purchaser only shall use such source code to complete the
Upgrade and shall return the source code and any copies thereof to Seller
immediately upon the conclusion of such project.
i. Trade Ins. For each RBC product traded in to Seller, Purchaser shall
have the right to purchase one Summa Pro unit for the Seller's distributor list
price for such unit less [REDACTED] %, less the discount the Purchaser receives
in the distributor agreement (Exhibit 5.2.i) until September 30, 1998 or unless
mutually agreed, providing the Distribution Agreement is in force.
j. Rate Tables. Purchaser shall purchase rate tables from Seller on a
product by product basis. Purchaser shall not have the right to copy or
otherwise duplicate Seller's rate table for any other site, including, without
limitation, any site within the same NPA-NXX.
k. Technical Support. Seller shall on behalf of Purchaser on a
contract basis at $12,000 for 70% Xxxx Xxxxxxx and Xxxxx Xxxxx'x time through
December 31, 1995, provide telephone- based technical support for the Business
on a 24 hour per day basis in a manner consistent with its past practices
through December 31, 1995. Payments of $4,000 each shall be made on November 1,
1995, December 1, 1995 and January 1, 1996.
l. Use of Seller's Facilities. Commencing and conditioned upon the
Closing, Seller hereby grants to Purchaser the right, but not the obligation to
use that portion of Seller's Tempe, Arizona facility and those common areas of
the facility related thereto which are necessary and appropriate for the
transitional operation of the Business. Such right shall terminate December 31,
1995 (the "Period"). At or prior to termination of the Period, Purchaser shall
remove all property owned or used by Purchaser not belonging to Seller.
Purchaser must maintain insurance satisfactory to Seller and name Seller as
additionally insured. Seller will not be responsible for Purchaser's assets.
5.6 Seller.
a. Cooperation. Seller shall use its best efforts to cause the sale
contemplated by this Agreement to be consummated and to obtain all consents and
authorizations of third parties related to Seller at or prior to Closing and
make all filings with and give all notices to such
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third parties which may be reasonably necessary or desirable in order to effect
the transactions contemplated hereby.
b. Additional Actions. Upon request from time to time, Seller shall
execute and deliver all documents, testify in any proceedings and do all other
acts that may be reasonably necessary or desirable, in the opinion of Purchaser,
to effect the transactions contemplated hereby, all without further
consideration.
c. [REDACTED].
i. [REDACTED]
ii. It is intended the covenants and agreements contained in this
section shall be considered severable. If any judicial proceeding or court shall
refuse to enforce any of these separate covenants deemed included in this
section, then the unenforceable covenant shall be deemed eliminated from these
provisions for the purpose of those proceedings to the extent necessary to
permit the remaining separate covenants to be enforced.
iii. [REDACTED]
iv. If the Distribution Agreement is terminated for any reason by
Seller, except for cause, the provisions of this Section 6.2.c shall remain in
effect.
5.7 Covenants of Purchaser.
a. Assumption of Obligations. Purchaser agrees to assume the duties,
obligations and liabilities of Seller under the Warranty/Sales Obligations. Any
rate table obligations associated with those transferred customers shall be
addressed by Purchaser at no cost to the customer. Seller shall give Purchaser
the rate table updates it needs to fulfill its obligations under this Section at
no cost to Purchaser.
b. Cooperation. Purchaser shall use its best efforts to cause the sale
contemplated by this Agreement to be consummated and to obtain all consents and
authorizations of third parties related to Purchaser at or prior to Closing and
make all filings with and give all
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notices to such third parties which may be reasonably necessary or desirable in
order to effect the transactions contemplated hereby.
c. Additional Actions. Upon request from time to time, Purchaser shall
execute and deliver all documents, testify in any proceedings and do all other
acts that may be reasonably necessary or desirable, in the opinion of Seller, to
effect the transactions contemplated hereby, all without further consideration.
d. Call Manager. Purchaser shall have no right to use the name "Call
Manager".
6. Conditions Precedent to Obligations of Seller. Seller's obligation to
consummate the transactions contemplated hereby is contingent upon all of the
representations and warranties made by Purchaser hereunder being true, complete
and correct as if made by Purchaser on the Closing Date and Purchaser shall have
performed in all material respects its obligations hereunder which are intended
to be performed at or prior to Closing.
7. Conditions Precedent to Obligations of Purchaser. Purchaser's obligation to
consummate the transactions contemplated hereby is contingent upon all of the
representations and warranties made by Seller hereunder being true, complete and
correct as if made by Seller on the Closing Date, and Seller shall have
performed in all material respects its obligations hereunder which are intended
to be performed at or prior to Closing.
8. General.
8.1 Remedies Upon Default. In the event that either party breaches this
Agreement by failing to close pursuant to the terms hereof, the nondefaulting
party may xxx for specific performance and exercise any other right or remedy
available to it pursuant to the terms of this Agreement, at law or in equity.
8.2 Notices. Any notice, request, demand, advice, schedule, report,
certificate, direction, instruction or other document or communication required
or permitted to be given or delivered hereunder shall be in writing and shall be
deemed to have been duly given or delivered if (i) mailed by United States mail,
certified, return receipt requested, with proper postage prepaid, or (ii)
otherwise delivered by hand or by overnight delivery, against written receipt,
by a common carrier or commercial courier or delivery service, to the party to
whom it is to be given at the address of such party as set forth below (or to
such other address as a party shall have designated by notice to the other
parties given pursuant hereto):
If to Seller:
Xiox Corporation
000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: President
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If to Purchaser:
0000 Xxxxxx Xx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxxxx Xxxxx
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8.3 Attorneys' Fees. In the event either party shall bring any action or
legal proceeding for an alleged breach of any provision of this Agreement, to
recover rent, to terminate this Agreement or to otherwise enforce, protect or
establish any term or covenant of this Agreement, or right of either party, the
prevailing party shall be entitled to recover as a part of such action or
proceedings, or in a separate action brought for that purpose, reasonable
attorneys' fees and court costs as may be fixed by the court.
8.4 Post Judgment. In addition to any such amount, the party prevailing in
any action related to this Agreement also shall be entitled to receive from the
party held to be liable, an amount equal to the attorneys' fees and costs
incurred in enforcing any judgment against such party. This Section is severable
from the other provisions of this Agreement and survives any judgment and is not
deemed merged into any judgment.
8.5 Entire Agreement. This Agreement sets forth the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior written agreements, and all prior or contemporaneous oral agreements and
understandings, express or implied.
8.6 Written Modification and Waiver. No modification to this Agreement, nor
any waiver of any rights, shall be effective unless assented to in writing by
the party to be charged, and the waiver of any breach or default shall not
constitute a waiver of any other right or any subsequent breach or default.
Seller:
Xiox Corporation, a Delaware corporation
By
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Xxxxxxx X. Xxxxxxx
Title
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Chairman/CEO
Purchaser:
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Xxxxxxx Xxxxx
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