ASSET PURCHASE AGREEMENT Dated as of April __, 2008
Exhibit 10.4
Dated
as of April __, 2008
TABLE
OF CONTENTS
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1
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Section
1.1 Agreement to Sell and to
Purchase.
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1
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Section
1.2 Excluded Assets.
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2
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Section
1.3 No Assumption of Liabilities.
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2
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Section
1.4 Purchase Price.
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2
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3
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Section
2.1 Sole Proprietorship.
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3
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Section
2.2 Authorization, No Conflicts.
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3
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Section
2.3 Assets Necessary to Business.
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4
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Section
2.4 Status of Assets.
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4
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Section
2.5 Liabilities.
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4
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Section
2.6 Taxes and Tax Returns.
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4
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Section
2.7 Intellectual Property Rights.
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5
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Section
2.8 Litigation; Compliance.
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5
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Section
2.9 Contracts.
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6
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Section
2.10 Traffic Statistics Reports.
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6
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Section
2.11 No Material Adverse Change; Accounting.
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6
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Section
2.12 No Brokers or Finders.
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7
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Section
2.13 Investment Intent.
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7
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8
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Section
3.1 Organization and Existence.
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8
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Section
3.2 Corporate Authorization.
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9
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Section
3.3 Brokers.
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9
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Section
3.4 Shares.
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9
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9
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9
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10
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Section
6.1 Closing.
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10
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10
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Section
7.1 Nondisclosure.
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10
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Section
7.2 Noncompetition.
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Error!
Bookmark not defined.
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Section
7.3 Nonsolicitation.
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Error!
Bookmark not defined.
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Section
7.4 Miscellaneous.
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Error!
Bookmark not defined.
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11
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Section
8.1 Indemnification.
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11
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i
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12
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Section
9.1 Notices.
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12
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Section
9.2 Amendments.
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12
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Section
9.3 Announcements.
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12
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Section
9.4 Expenses.
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13
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Section
9.5 Entire Agreement.
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13
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Section
9.6 Descriptive Headings.
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13
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Section
9.7 Counterparts.
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13
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Section
9.8 Governing Law; Jurisdiction.
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13
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Section
9.9 Construction; Interpretation.
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13
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Section
9.10 Severability.
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13
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Section
9.11 Specific Performance.
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14
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Section
9.12 Survival.
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14
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ii
This
Asset Purchase Agreement (“Agreement”)
is entered into as of April __, 2008 by and among Abundantad Incorporated, a
Nevada corporation (“Purchaser”)
and ▇▇▇ and ▇▇▇, LLC, a ______________ limited liability company (“Seller”),
▇▇▇▇▇ ▇▇▇ (“▇▇▇”) and
▇▇▇▇▇▇ ▇▇▇ (“Hom”).
RECITALS
WHEREAS,
Seller owns all of the assets and business of ▇▇▇ and ▇▇▇, LLC, [an Internet
website] (the “Business”);
and
WHEREAS,
Purchaser desires to purchase from Seller, and Seller desires to sell to
Purchaser, the Business, upon the terms and subject to the conditions set forth
in this Agreement;
NOW,
THEREFORE, in consideration of the premises, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SALE
AND PURCHASE
Section
1.1 Agreement
to Sell and to Purchase.
On the
terms and subject to the conditions set forth in this Agreement,
Purchaser agrees to purchase from Seller, and Seller agrees to sell,
transfer, assign, convey and deliver to Purchaser, on the Closing Date (as
defined in Section 6.1 hereof), free and clear of all Liens (as such term is
defined in Section 2.4), all of Seller’s right, title and interest in, to and
under all of the assets, properties, privileges, claims, rights and business of
the Business, whether real, personal and mixed, tangible and intangible,
absolute or contingent, wherever located and whether or not reflected on the
books and records of Seller, relating to or used in connection with, the
Business (the “Purchased
Assets”), except for the Excluded Assets. The Purchased Assets include
but are not limited to the following items:
(a) the
Business, its good will, its name (and any derivatives or combinations thereof)
and any other tangible or intangible assets owned by Seller and used in the
operation of the Business;
(b) all
contracts, licenses, sales orders, commitments, pricing and marketing
arrangements with customers, users or suppliers, and other arrangements,
agreements or understandings, whether in written or oral form, related to the
Business as set forth on Schedule 1.1(b)
hereto (the “Assumed
Contracts”);
(c) all
internet domain names and URLs of the Business, inventions, art works, product
plans, logos, trademarks, trademark applications, service marks, copyrights,
trade names, trade secrets, customer lists, patents, patent rights and
applications, trade name, trademark and copyright registrations and
applications, source and object codes, whether owned or possessed by Seller and
used in or related to the Business as set forth on Schedule 1.1(c)
hereto (the “Intellectual
Property”);
1
(d) all books
and records of Seller related to the Business, including without limitation,
accounting records, sales data, logs and other documents, customer and vendor
lists, mailing lists, and other records and files related to the
Business;
(e) information
systems and computer hardware and software and other equipment of the Business
as set forth on Schedule 1.1(e);
and
(f) all other
assets, properties and rights of Seller of every kind and nature owned or held
by Seller which are used in the Business, or in which Seller has an interest,
known or unknown, fixed or unfixed, ▇▇▇▇▇▇ or inchoate, accrued, absolute,
contingent or otherwise, including, without limitation, as set forth on Schedule 1.1(f)
hereof.
Section
1.2 Excluded
Assets.
The
assets that constitute the Excluded Assets shall include only those assets set
forth on Schedule
1.2 hereto (the “Excluded
Assets”).
Section
1.3 No
Assumption of Liabilities.
Purchaser
shall not assume, shall not take subject to, and shall not in any way be liable
for, any liabilities or obligations of any kind or nature, whether absolute,
contingent, accrued, known or unknown, of Seller.
Section
1.4 Purchase
Price.
The total
purchase price (the “Purchase
Price”) for the Purchased Assets to be paid to Seller by Purchaser shall
be paid as follows:
(a) $550,000
cash payable $200,000 on the Closing Date by wire transfer of immediately
available funds and $350,000 on the first anniversary of the Closing Date
provided ▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ are employees in good standing on the first
anniversary of the Closing Date and have timely and faithfully performed all of
their obligations to the Purchaser; and
(b) that
number of shares of common stock of Abundantad Incorporated as shall equal
250,000 shares of any public company (the “Pubco
Shares”) that shall by merger or exchange (the “Pubco
Transaction”) become the parent of the Company following the date hereof
(“Pubco”),
payable promptly on the Closing Date which shares shall be delivered promptly
following the later of the Closing Date or closing of the Pubco
transaction.
(c) The
number of Pubco Shares shall be adjusted, after taking into account any merger,
consolidation, recapitalization or similar transaction, by issuance of
additional Shares of Pubco to Seller on the first anniversary of the Closing
Date if the product of (A) the Pubco Shares issued to Seller multiplied by (B)
the VWAP for the Pubco Shares issued to Seller for the 10 trading days
immediately prior to the first anniversary of the Closing Date on the principal
trading market on which Pubco shall then be quoted or trading, shall not equal
or exceed $750,000 (the “Make-Whole”).
2
(d) Purchaser
shall have the option to satisfy the Make Whole provision in cash at its
election.
(e) A revenue
target (the “Target”)
based bonus shall be paid in the amount of $100,000 payable in cash upon the
Business generating a minimum $3,000,000 in annual audited revenues for the
fiscal year ended December 31, 2008, in accordance with GAAP, as determined by
the Purchasers auditors.
(f) Pubco
shall adopt and maintain an employee stock option plan under which on the
Closing Date, ▇▇▇ and Hom (or their designees) shall each be issued 5 year
non-qualified options to purchase 75,000 shares of Pubco common stock, subject
to adjustment for any merger, consolidation, recapitalization or similar
transaction, which shall vest 1/3 on each of first, second and third
anniversaries of the date of award provided the grantee has fully complied with
all obligations to the Company and is employed on such anniversary
dates.
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller,
▇▇▇ and ▇▇▇ hereby jointly and severally represent and warrant to Purchaser as
follows:
Section
2.1 Sole
Proprietorship.
Seller is
a limited liability company possessing full capacity, power and authority to
own, operate and lease its properties and assets, to carry on the Business as
now conducted, and to consummate the transactions contemplated by this
Agreement.
Section
2.2 Authorization,
No Conflicts.
This
Agreement and the other documents to be executed in connection with the
transactions contemplated hereby, including, without limitation, the Employment
Agreements of ▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇, the Domain Name Assignment, and the
Inventions and Trade Secret Agreements (as defined herein) (the “Transaction
Documents”) constitute the legal, valid and binding obligations of Seller
and such parties (other than Purchaser) thereto, enforceable against Seller and
such parties (other than Purchaser) in accordance with their respective
terms. The execution, delivery and performance of this Agreement and
the Transaction Documents by Seller and such parties thereto (other than
Purchaser) and the transaction contemplated hereby and thereby had been
authorized by all appropriate limited liability or other action and do not and
will not (i) conflict with or result in a breach or violation of any term
or provision of, or (with or without notice or passage of time, or both)
constitute a breach or default under, any Assumed Contract, or other contractual
obligation of Seller (ii) result in the imposition of any Lien on any of
the Purchased Assets or (iii) violate any applicable law, rule, regulation
or order of any governmental body or any arbitrator having jurisdiction over
Seller or such parties. There are no options, rights or agreement providing any
party with preferential purchase rights, including without limitation, rights of
first refusal or first offer, with respect to the Purchased Assets or the
Business.
3
Section
2.3 Assets
Necessary to Business.
The
Purchased Assets constitute all of the assets, properties, rights and goodwill
necessary to carry on the Business in a manner consistent with current
operations and as described to Purchaser in order to continue the Business
substantially as conducted prior to the purchase by Purchaser. No part of the
Business is conducted by or through any person or entity other than
Seller.
Section
2.4 Status
of Assets.
(a) Except as
set forth on Schedule
2.4, hereto, Seller has and is conveying to Purchaser, good and
marketable title to, each of the Purchased Assets, free and clear of all liens,
security interests, pledges, mortgages, charges, adverse claims, preferential
arrangements or rights, and encumbrances (each a “Lien”).
Seller owns and has all right, power and authority to sell, convey, assign,
transfer and deliver the Purchased Assets to Purchaser in accordance with the
terms of this Agreement. All of the Purchased Assets are adequate and
fit to be used for the purposes for which they are currently used.
(b) There is
not now pending or to the knowledge of Seller, threatened any claim with respect
to any third-party rights, and all user-submitted and other content which
appears on any website or other property maintained or owned by Seller is, and
has historically been, deleted from the site as soon as reasonably practicable
following receipt by Seller of any notice relating to a third party’s alleged
rights in any such user-submitted content.
Section
2.5 Liabilities.
There are
no liabilities, debts or obligations of any nature (whether liquidated,
unliquidated, direct, accrued, unmatured, absolute, contingent or otherwise and
whether due or to become due), relating to the Purchased Assets or Business,
except liabilities that were incurred in the ordinary course of business since
December 31, 2007 and do not individually or in the aggregate exceed $1,000 and
which are set forth on Schedule 2.5
hereto.
Section
2.6 Taxes
and Tax Returns.
Seller
has timely and properly filed all required tax returns and has paid all taxes
due with respect to the Business and the Purchased Assets for all periods ending
on or before the Closing Date. No unresolved claim or Lien for assessment or
collection of taxes has been asserted against Seller with respect to the
Business or the Purchased Assets, nor is there any basis for such a claim or
Lien.
4
Section
2.7 Intellectual
Property Rights.
(a) Set forth
on Schedule 2.7
hereto is a true and complete list of all Intellectual Property. Seller has
complete rights to and ownership of all Intellectual Property required for use
in the Business, and such Intellectual Property is sufficient for Purchaser to
operate the Business as currently operated and in accordance with its plans as
described to Purchaser. Schedule 2.7
specifies, as applicable: (i) the title of the patent, trademark, trade name,
service ▇▇▇▇, copyright or application therefore; (ii) the jurisdiction by or in
which such patent, trademark, trade name, service ▇▇▇▇ or copyright exists and
has been issued or registered or in which an application has been filed,
including the registration or application numbers and (iii) all Licenses (copies
of which have been previously delivered to Purchaser). For the purposes of this
Agreement, “Licenses”
means all licenses, sub-licenses, agreements, permits, undertakings,
understandings, and url registrations, pursuant to which any third party is
licensed or authorized to use any Intellectual Property of Seller or pursuant to
which Seller is authorized to use the intellectual property of any third
party.
(b) The
execution, delivery and performance of this Agreement, and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby will not constitute a material breach of any instrument or
agreement governing any Intellectual Property, will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Intellectual Property nor impair the value or right of Seller to use, sell or
license any Intellectual Property or portion thereof.
(c) Neither
the production, marketing, license, sale or intended use of any product or
service currently licensed or sold by Seller or currently under development by
Seller violates any License or agreement between Seller and any third party
relating to such product or service, nor infringes upon any intellectual
property rights of any other party. There are no pending or threatened claims or
litigation contesting the validity and ownership by Seller or its right to use,
sell, license or dispose of any Intellectual Property, nor is there any basis
for such a claim. Seller has not received any notice (or is not otherwise aware)
that any Intellectual Property, or its use, sale, license or disposition,
conflicts or will conflict with or infringes or will infringe upon the rights of
any other person or entity, nor is there any basis for such an
assertion.
(d) No
current or prior employees, consultants, contractors, or agents
of Seller have asserted an ownership interest or other right in or to
any Intellectual Property.
Section
2.8 Litigation;
Compliance.
No
action, complaint, petition, suit, claim, order, ruling, injunction, judgment,
decree, investigation or other proceeding, whether civil or criminal, in law or
in equity, or before any arbitrator or governmental body, is pending or
threatened, nor is there any basis therefore, against or affecting the Seller,
the Purchased Assets (or the use, operation or value thereof), the Business,
Seller’s ability to perform under this Agreement or any other Transaction
Document or any aspect of the transaction contemplated by this Agreement. The
Business has been conducted in accordance with all applicable laws and
regulations.
5
Section
2.9 Contracts.
Except
for the Assumed Contracts listed and described on Schedule 1.1(b),
Seller is not a party to any contract whatsoever relating to the Business or the
Purchased Assets. Each of the Assumed Contracts is valid and subsisting, and is
in full force and effect, and enforceable in accordance with its respective
terms, and upon assignment pursuant to this Agreement, will be enforceable by
Purchaser. No party thereto is in default and no claim of default by any party
has been made or is now pending, and no event exists which, with or without the
lapse of time or the giving of notice, or both, would constitute a breach or
default, cause the acceleration of any obligation, permit the termination or
excuse the performance by any party thereto, or would otherwise adversely affect
the Business or the Purchased Assets. Except as noted on Schedule 1.1(b), each
Assumed Contract is assignable by Seller to Purchaser without the consent of any
third party. True and complete copies of the Assumed Contracts, including all
amendments and supplements thereto, have been delivered to
Purchaser.
Section
2.10 Traffic
Statistics Reports.
The
website traffic statistic reports provided to Purchaser by Seller are true,
complete and correct representations of actual results realized for the periods
covered by such reports, as reported by Google Analytics website traffic
reporting service and internal traffic statistics of each of the websites and
other properties transferred to Buyer and are not the result of any
manipulation, directions, bought traffic or similar actions, directly or
indirectly, of Seller, ▇▇▇, Hom or any of their
affiliates.
Section
2.11 No
Material Adverse Change; Accounting.
Except as
set forth on Schedule
2.11, since December 31, 2007, there has not been, occurred or
arisen:
(a) any sale,
lease or other disposition of any of the Purchased Assets;
(b) any
casualty, loss, damage or destruction (whether or not covered by insurance) of
any of the Purchased Assets;
(c) any Lien
created on the Purchased Assets; or
(d) any
reduction in rank below the ________ ranked website in the organic search return
for “____________________” on [▇▇▇▇▇▇.▇▇▇]; and
(e) any
material adverse change in the Purchased Assets, including the Assumed
Contracts, the financial condition, results of operations, the accounting
practices historically used by Seller in connection with Business (except to the
extent such changes in accounting practices were made at the request of
Purchaser as part of transactions contemplated by this Agreement).
Seller’s
records accurately and validly reflect the transactions relating to the
Business.
6
Section
2.12 No
Brokers or Finders.
No agent,
broker, finder, or other person or firm engaged by or acting on behalf of Seller
in connection with the negotiation, execution or performance of this Agreement,
the other Transaction Documents or the transactions contemplated hereby or
thereby, is or shall be entitled to any broker’s or finder’s or similar fee or
other commission as a result of this Agreement, the other Transaction Documents
or the transactions contemplated hereby or thereby.
Section
2.13 Investment
Intent.
With
respect to the Pubco Shares (for the purposes hereof such term shall include any
and all shares or right to receive shares of common stock of the Buyer which
will be exchanged for Pubco Shares) to be received by Seller, ▇▇▇ or
▇▇▇:
(a) Seller,
▇▇▇ and Hom acknowledge that the Pubco Shares to be issued and delivered
hereunder or under any of the Transaction Documents shall be issued in reliance
upon the exemption afforded by Section 4(2) of the Securities Act of 1933, as
amended (the “Act”), and
that Purchaser is relying upon the truth and accuracy of the representations set
forth in this Section 2.13.
(b) The Pubco
Shares shall be acquired for such person’s own account, not as nominee or agent,
and not with a view to the resale or other transfer or distribution of any
portion thereof or interest therein in violation of the Act, and such person has
no present intention of selling, granting any participation in, or otherwise
transferring or distributing the Pubco Shares or any portion thereof or interest
therein in violation of the Act. The recipient of the Pubco Shares is
not a registered broker-dealer or an entity engaged in the business of being a
broker-dealer.
(c) Each
recipient of Pubco Shares acknowledges that it can bear the economic risk and
complete loss of its investment in the Pubco Shares, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby. Such
recipient of Pubco Shares must continue to bear the economic risk of the
investment in the Pubco Shares unless they are subsequently registered under the
Act or an exemption from such registration is available.
(d) Seller,
▇▇▇ and ▇▇▇ are each “accredited investors” as such term is defined under the
Act.
(e) Seller,
▇▇▇ and Hom acknowledge that the market value of the Pubco Shares will fluctuate
from their value on the Closing Date and, at the time of disposition of the
Pubco Shares, such Pubco Shares may be worth more or less than their market
value on the Closing Date.
(f) Seller
has had an opportunity to receive all additional information related to
Purchaser and requested by it and to ask questions of and receive answers from
Purchaser regarding Buyer, and its businesses, operations and
conditions. In accepting the Pubco Shares, no oral or written
representations (other than those specifically made in this Agreement) have been
made to Seller, ▇▇▇ or ▇▇▇.
7
(g) Seller
understands and agrees that the Pubco Shares are characterized as “restricted
securities” under the Act inasmuch as they are being acquired from Buyer (and
will be exchanged for Pubco shares) in a transaction not involving a public
offering and that under the Act and applicable regulations such securities may
not be resold without registration under the Act, or availability of an
exemption therefrom under the Act.
(h) Seller
understands that the Shares have not been registered under the Act, and have not
been registered or qualified under the securities laws of any state of the
United States. Seller acknowledges that it has no right to require
Purchaser or Pubco register the Shares under the Act or to register or qualify
the Shares under the securities laws of any state of the United States, except
as set forth in this Agreement.
(i) It is
understood that, until the earlier of: (a) registration under the Act or (b) the
time when any of the Shares may be sold pursuant to Rule 144(k) under the Act,
stock certificates evidencing such Shares shall bear the following
legend:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE]
[CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
REPRESENTATIONS
AND WARRANTIES OF PURCHASER’
Purchaser
hereby represents and warrants to Seller as follows:
Section
3.1 Organization
and Existence.
Purchaser
is a company validly existing and in good standing under the laws of the State
of the state of Nevada, and has all corporate power and authority necessary to
enable it to own, lease or otherwise hold its properties and assets and to carry
on its business as now conducted.
8
Section
3.2 Corporate
Authorization.
This
Agreement has been duly authorized, executed and when delivered by Purchaser
will constitute a valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms except as may be subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or affecting or qualifying the rights of creditors
generally and general principles of equity.
Section
3.3 Brokers.
No agent,
broker, finder, or other person or firm engaged by or acting on behalf of
Purchaser in connection with the negotiation, execution or performance of this
Agreement, the other Transaction Documents or the transactions contemplated
hereby or thereby, is or will be entitled to any broker’s or finder’s or similar
fee or other commission as a result of this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby.
Section
3.4 Shares.
To the
Purchaser’s best knowledge, the Shares, when issued in accordance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable. The Shares will, to the Purchaser’s best knowledge, be
free of any Liens, except as provided in the Registration Rights Agreement and
the other Transaction Documents, and provided, however, that the Shares are
subject to all applicable securities laws, including but not limited to any
restrictions on transferability.
PURCHASER’S
CLOSING DELIVERIES
The
obligation of Seller to effect the Closing shall be subject to Purchaser’s
delivery of the following items on or prior to the Closing Date:
(a) Employment
Agreements for ____ and ____ substantially in the form of Exhibit
A.
(b) Payment
of the Purchase Price.
SELLER’S
CLOSING DELIVERIES
The
obligation of Purchaser to effect the Closing shall be subject to Seller’s
delivery of the following items on or prior to the Closing Date:
(a) Employment
Agreements for _____ and ____ substantially in the form of Exhibit
A.
9
(b) Non-Competition,
Secrecy, Invention and Technology Transfer Agreements from each of the employees
and owners of Seller substantially in the form of Exhibit B.
(c) Opinion
of counsel to Seller, substantially in the form attached hereto as Exhibit
C.
(d) ▇▇▇▇ of
Sale in the form attached hereto as Exhibit D , executed
by Seller.
(e) Evidence
of receipt of all consents, if any, needed to convey the Purchased
Assets.
(f) Lock up
agreements substantially in the form attached hereto as Exhibit
E
(g) Domain
name assignment agreement in the form attached hereto as Exhibit F (the
“Domain
Name Assignment”).
(h) Audited
financial statements of Seller for the prior two (2) full fiscal years and
Unaudited financial statements through the last completed financial quarterly
period, which complies with the parties agreement as to the assets, liabilities
and results of operations of the Business as set forth in the Letter of Intent
by and between Purchaser, ▇▇▇ and ▇▇▇ dated as of March 22, 2008.
(i) Such
other instruments of assignment, transfer and conveyance as Purchaser may
reasonably request to transfer to and vest in Purchaser all of Seller’s right,
title and interest in, to and under the Purchased Assets.
THE
CLOSING
Section
6.1 Closing.
The
Closing of the transactions contemplated hereby (the “Closing”)
shall be held on April __, 2008 (the “Closing
Date”) at the offices of ______________,
___________________________________ or at such other time or place as the
parties may mutually agree. Alternatively, the parties may mutually
agree that the Closing may occur by mail, fascimile, overnight courier or a
combination thereof.
NONDISCLOSURE;
NONCOMPETITION; NON-SOLICITATION
Section
7.1 Nondisclosure.
Seller,
▇▇▇ and Hom agree that they will not, at any time, directly or indirectly use,
divulge, disclose, copy, furnish or make accessible to any person or entity any
proprietary, non-public, confidential or secret information of the Seller or
Purchaser, including, but not limited to, the Purchased Assets, or the existence
or content of this Agreement.
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(a) Seller
agrees that a breach of this Article 7 may cause irreparable
injury to Purchaser, that Purchaser’s remedies at law in the event of such
breach would be inadequate and that accordingly, Purchaser shall be entitled, in
addition to any other rights and remedies it may have at law or in equity, to an
injunction enjoining and restraining Seller from doing or continuing to do any
such violation and any other violations or threatened violations of this Article
7.
INDEMNIFICATION
Section
8.1 Indemnification.
(a) Seller,
▇▇▇ and ▇▇▇ shall indemnify, defend and hold harmless Purchaser and its
stockholders, directors, officers, members, managers, employees, agents,
representatives and assigns (each an “Affiliate”)
from and against any and all liabilities, losses, damages, costs and expenses
(including reasonable attorney’s fees and costs) (collectively, “Losses”),
directly or indirectly, as a result of, in connection with, or based upon or
arising from any of the following: (i) any inaccuracy in or breach or non
performance of any of the representations, warranties, covenants or agreements
made by Seller in this Agreement or any Transaction Document; (ii) the failure
of Seller to perform fully any covenant, provision or agreement to be performed
or observed by it pursuant to this Agreement or any related agreement; (iii) any
other matter as to which Seller in other provisions of this Agreement or any
related agreement has agreed to indemnify Purchaser; and (iv) any claims of
third parties in respect of the Purchased Assets, including the Assumed
Contracts or regarding the conduct of the Business prior to the Closing that are
asserted prior to, on or after the Closing. Seller shall reimburse the Purchaser
or its Affiliates promptly upon demand for any un-reimbursed payment made or
Loss suffered by Purchaser or its Affiliates, as such payment is made or Loss
suffered, in respect of any Loss, liability, judgment, claim or demand to which
the foregoing indemnity relates. With respect to any and all claims by Purchaser
under this Section 8.1 arising out of or in connection with this Agreement,
whether such liability arises from any claim based upon contract, warranty,
tort, failure of essential purpose or otherwise, Seller’s, Kim’s and Hom’s
aggregate indemnification obligations shall not exceed $500,000; provided,
however that no claim may be made by Purchaser under this Section unless the
total of the Losses associated with any single event or occurrence triggering an
indemnification claim exceeds ten thousand dollars
$10,000. Notwithstanding the foregoing, with respect to any claims
arising under clause (iv) of this Section 8.1(a), the limitations set forth in
this Section 8.1(a) shall not apply and Purchaser or its Affiliates shall be
entitled to recover the entirety of the indemnifiable amounts.
(b) Purchaser
shall indemnify, defend and hold harmless Seller from and against any and all
Losses, directly or indirectly, as a result of, in connection with, or based
upon (i) the failure of Purchaser to perform fully any covenant, provision or
agreement to be performed by it pursuant to this Agreement or any related
agreement, and (ii) any third party claims in respect of the Business or
Purchased Assets, or relating to the conduct of the Business by the
Purchaser after the Closing. Purchaser shall reimburse the Seller or its
Affiliates promptly upon demand for any unreimbursed payment made or Loss
suffered by the Seller or its Affiliates at any time after the Closing Date in
respect of any Loss to which the foregoing indemnity relates.
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(c) Nothing
in this Article 8 shall be deemed to preclude or otherwise limit in any way the
Purchaser or the Seller from exercising his or its other rights or from pursuing
other remedies specified in this Agreement.
MISCELLANEOUS
PROVISIONS
Section
9.1 Notices.
All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered personally to the recipient, (b)
when sent to the recipient by telecopy (receipt electronically confirmed by
sender’s telecopy machine) if during normal business hours of the recipient,
otherwise on the next business day, (c) two (2) business says after the date
when sent to the recipient by reputable express courier service (charges
prepaid), or (d) seven business days after the date when mailed to the recipient
by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent
to Seller and to Purchaser at the addresses indicated below:
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If
to Seller:
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With
a copy to:
(which
shall not constitute notice)
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If
to Purchaser:
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With
a copy to:
(which
shall not constitute notice)
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or to
such other address as either party hereto may, from time to time, designate in
writing delivered to the other party pursuant to the terms of this Section
9.1.
Section
9.2 Amendments.
The
terms, provisions and conditions of this Agreement may not be changed, modified
or amended in any manner except by an instrument in writing duly executed by
both of the parties hereto.
Section
9.3 Announcements.
Seller
agrees not issue any press release, publicity statement or issue any other
public notice or announcement with respect to this Agreement or any related
agreement, or the transactions contemplated hereby or thereby.
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Section
9.4 Expenses.
Except as
set forth in this Agreement or the Transaction Documents, each party to this
Agreement shall bear its own expenses in the negotiation, preparation and
performance of this Agreement and the Transaction Documents, including but not
limited to, legal, accounting, or other professional fees and
expenses.
Section
9.5 Entire
Agreement.
This
Agreement, together with the Exhibits and Schedules hereto, and the other
Transaction Documents, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof, and supersede any and all
prior agreements and understandings among them, whether oral or written,
relating to such subject matter hereunder and thereunder. The
Exhibits and Schedules to this Agreement are hereby incorporated and made a part
hereof.
Section
9.6 Descriptive
Headings.
The
descriptive headings of the several sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
Section
9.7 Counterparts.
This
Agreement and any Transaction Document and any amendment hereto or thereto, may
be executed in counterpart by any one or more parties hereto, and each such
executed counterpart shall be deemed to be an original, and all of which shall
be deemed to constitute, one and the same instrument.
Section
9.8 Governing
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with internal laws of
the State of Nevada without reference to principles of conflicts of laws. The
parties hereto consent to the exclusive jurisdiction of the federal or state
court located in Reno, Nevada, with respect to any claim or controversy or
dispute related to the enforcement or interpretation of this
Agreement.
Section
9.9 Construction;
Interpretation.
Seller
acknowledges that he has been represented by counsel of his choice in connection
with this Agreement and the transactions contemplated by this Agreement.
Accordingly, any rule of law that would require interpretation of any claimed
ambiguities in this Agreement is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent
of Purchaser and Seller.
Section
9.10 Severability.
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In the
event that any one or more of the provisions contained in this Agreement or in
any other Transaction Document, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
Section
9.11 Specific
Performance.
Without
limiting or waiving in any respect any rights or remedies of the parties under
this Agreement now or hereinafter existing at law or in equity or by statute,
each of the parties hereto shall be entitled to seek specific performance of the
obligations to be performed by the other in accordance with the provisions of
this Agreement.
Section
9.12 Survival.
The
provisions of Articles 2, 7 and 8 shall survive the termination of this
Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the day and year first written above.
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SELLER
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PURCHASER
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ABUNDANTAD
INCORPORATED
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By:
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Name:
Title: Chief
Executive Officer
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