EXHIBIT 10.3
Asset Purchase Agreement
Between
INTERNATIONAL MANUFACTURERS GATEWAY, INC.
a Delaware corporation,
and
DTOMI, INC.
a Nevada corporation,
DATED:
January 14, 2002
TABLE OF CONTENTS
1. Definitions................................................................................ 1
2. Purchase and Sale of Assets................................................................ 4
2.1 Purchase and Sale................................................................. 4
2.2 Purchased Assets................................................................. 4
2.3 Excluded Assets................................................................... 4
2.4 Assumption of Certain Liabilities................................................. 4
2.5 Excluded Liabilities.............................................................. 4
3. Purchase Price and Payment................................................................. 4
3.1 Purchase Price.................................................................... 4
3.2 Tax and Accounting Consequences................................................... 5
3.3 Price Reduction Upon Certain Events............................................... 5
4. Pre-Closing Matters........................................................................ 5
4.1 Operation of Purchased Assets..................................................... 5
4.2 Consents ......................................................................... 6
4.3 Notification of Certain Events.................................................... 6
4.4 Access to Information............................................................. 7
4.5 Public Announcements.............................................................. 7
5. Conditions to Closing...................................................................... 7
5.1 Transferor's Conditions........................................................... 7
5.2 Acquiror's Conditions............................................................. 8
6. Closing.................................................................................... 9
6.1 Time and Place of Closing......................................................... 9
6.2 Closing Deliveries................................................................ 9
6.3 Closing Costs..................................................................... 10
6.4 Possession........................................................................ 10
7. Representations and Warranties............................................................. 10
7.1 Transferor's Representations and Warranties ...................................... 10
7.2 Acquiror's Representations and Warranties......................................... 13
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8. Additional Covenants.................................................................................... 14
8.1 Covenants by Each Party........................................................................ 14
8.2 Idemnification................................................................................. 14
8.3 Retention of and Access to Books and Records................................................... 14
9. Termination............................................................................................. 14
9.1 Termination Events............................................................................. 14
9.2 Effect of Termination.......................................................................... 15
10. Default; Remedies....................................................................................... 15
10.1 Time of Essence................................................................................ 15
10.2 Remedies....................................................................................... 15
11. Construction and Interpretation......................................................................... 15
12. Miscellaneous Provisions................................................................................ 16
12.1 Survival of Covenants.......................................................................... 16
12.2 Expenses....................................................................................... 16
12.3 Binding Effect................................................................................. 16
12.4 Assignment..................................................................................... 16
12.5 Notices........................................................................................ 16
12.6 Waiver......................................................................................... 17
12.7 Amendment...................................................................................... 17
12.8 Severability................................................................................... 17
12.9 Integration.................................................................................... 17
12.10 Governing Law.................................................................................. 18
12.11 Arbitration.................................................................................... 18
12.12 Execution...................................................................................... 18
12.13 Incorporation of Recitals, Exhibits, and Schedules...................... ...................... 18
12.14 Further Assurances............................................................................. 18
12.15 No Third Party Beneficiaries .................................................................. 19
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
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as of January 14, 2002 (the "Effective Date") by and between International
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Manufacturers Gateway, Inc., a Delaware corporation ("IMG")("Transferor") and
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Dtomi, Inc., a Nevada corporation ("Dtomi")("Acquiror").
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RECITALS
A. IMG is a technology company utilizing proprietary database algorithms
to compile and sell marketing information to sales and marketing professionals
(the "Business").
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B. Transferor wishes to sell to Acquiror certain assets as described in
Section 2.2 associated with Transferor's Business and Acquiror wishes to
purchase such assets from Transferor, in each case on the terms and conditions
set forth in this Agreement (this term and all other capitalized terms used
herein having the respective meanings set forth in this Agreement).
AGREEMENTS
In consideration of the foregoing, the mutual covenants of the parties set
forth in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
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respective meanings set forth below:
"Agreement" shall mean this Asset Purchase Agreement.
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"Acquiror" shall have the meaning set forth in the preamble to this
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Agreement.
"Acquiror's Knowledge" shall mean that any of the officers or
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directors of Acquiror are actually aware of a particular fact or other matter.
"Assumed Liabilities" shall have the meaning set forth in Section 2.4.
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"Best Efforts" shall mean the efforts that a prudent Person who wishes
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to achieve a result would use in similar circumstances to achieve such result as
expeditiously as reasonably possible.
"Xxxx of Sale" shall mean the document described in Section 6.2.1(a).
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"Books and Records" shall mean all books and records of Transferor
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that are necessary to conduct the Business, the ownership, use, and operation of
the Purchased Assets, or the payment or performance of the Assumed Liabilities,
including any such records maintained on computer and all related computer
software.
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"Breach" shall mean any material inaccuracy in or material breach of,
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or any material failure to perform or comply with, any representation, warranty,
covenant, obligation, or other provision of this Agreement or any document
delivered pursuant to this Agreement.
"Business" shall have the meaning set forth in the Recitals.
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"Business Day" shall mean any day other than a Saturday, Sunday, or
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other day on which commercial banks in Seattle, Washington are authorized or
required by applicable Legal Requirements to be closed.
"Closing" shall mean the closing of this transaction, at which the
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events set forth in Section 6.2 shall occur.
"Closing Date" shall mean the date on which the Closing occurs.
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"Common Stock" shall have the meaning set forth in Section 3.1.
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"Consent" shall mean any approval, consent, ratification, waiver, or
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other authorization, including any Governmental Authorization.
"Contract" shall mean any agreement, contract, lease, obligation,
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promise, or understanding, whether written or oral and whether express or
implied, that is legally binding.
"Damages" shall have the meaning set forth in Section 8.2.
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"Effective Date" shall have the meaning set forth in the preamble to
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this Agreement.
"Excluded Assets" shall have the meaning set forth in Section 2.3.
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"Governmental Authority" shall mean any national, federal, state,
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provincial, county, municipal, or local government, foreign or domestic, or the
government of any political subdivision of the any of the foregoing, or any
entity, authority, agency, ministry, or other similar body exercising executive,
legislative, judicial, regulatory, or administrative authority or functions of
or pertaining to the government, including any quasi-governmental entity
established to perform any such functions.
"Governmental Authorization" shall mean any Consent, license, permit,
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waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Authority or
pursuant to any Legal Requirement.
"Intellectual Property" shall mean (a) all inventions (whether
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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, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptation, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c)
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all copyrightable works, all copyrights, and all applications, registrations,
and renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) 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), (f) all computer software (including data and related
documentation) and (g) all other proprietary rights.
"Legal Requirement" shall mean any federal, state, local, municipal,
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foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, rule,
statute, or treaty.
"Lien" shall mean a monetary encumbrance against a Purchased Asset.
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"Ordinary Course of Business" shall mean any action taken by a Person
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if, and only if, such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person.
"Organizational Documents" shall mean (i) the articles or certificate
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of incorporation and the bylaws of a corporation, (ii) the partnership agreement
and any statement of partnership of a general partnership, (iii) the limited
partnership agreement and certificate of limited partnership of a limited
partnership, (iv) any charter, operating agreement, or similar document adopted
or filed in connection with the creation, formation, or organization of a
Person, and (v) any amendment to any of the foregoing.
"Permitted Encumbrances" shall mean those encumbrances incurred in the
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ordinary course of business or otherwise in existence as of the Closing Date.
"Person" shall mean an individual, partnership, corporation, limited
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liability company, joint stock company, trust, unincorporated organization or
association, joint venture, or other organization, whether or not a legal
entity, or a Governmental Authority.
"Possession Date" shall mean 12:01 a.m., on the day following the
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Closing Date.
"Proceeding" shall mean any action, arbitration, audit, hearing,
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litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Authority, arbitrator, or mediator.
"Purchase Price" shall have the meaning set forth in Section 3.1.
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"Purchased Assets" shall have the meaning set forth in Section 2.2.
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"Representative" shall mean, with respect to a particular Person, any
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director, officer, employee, agent, consultant, advisor, or other representative
of or to such Person, including such Person's attorneys, accountants, and
financial advisors.
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"Transferor" shall have the meaning set forth in the preamble to this
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Agreement.
"Transferor Shareholders" shall have the meaning set forth in Section
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3.2.
"Transferor's Knowledge" shall mean that any of the officers or
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directors of Transferor are actually aware of a particular fact or other matter.
"Tax" shall mean any tax (including any income tax, capital gains tax,
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value-added tax, sales tax, excise tax, property tax, gift tax, or estate tax),
levy, assessment, tariff, duty (including any customs duty), deficiency, or
other fee, and any related charge or amount (including any fine, penalty,
interest, or addition to tax), imposed, assessed, or collected by or under the
authority of any Governmental Authority or payable pursuant to any tax-sharing
agreement or other Contract relating to the sharing or payment of any such tax,
levy, assessment, tariff, duty, deficiency, or fee
2. Purchase and Sale of Assets.
2.1 Purchase and Sale. Transferor agrees to transfer the Purchased
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Assets to Acquiror, and Acquiror agrees to acquire the Purchased Assets from
Transferor, in each case for the price and on the terms and conditions set forth
in this Agreement. Upon payment of the Purchase Price as described in Section 3
hereof and the satisfaction of the other terms of this Agreement, Transferor
shall sell, transfer, assign and deliver the Purchased Assets to Acquiror on the
Closing Date free and clear of any and all liens, encumbrances, security
interests or obligations, except for Permitted Encumbrances.
2.2 Purchased Assets. The assets to be sold by Transferor to Acquiror
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pursuant to this Agreement (the "Purchased Assets") shall be all of the
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Transferor's assets described on Exhibit A attached hereto, with the exception
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of the Excluded Assets described in Section 2.3.
2.3 Excluded Assets. All assets of Transferor not specifically
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included in the Purchased Assets (the "Excluded Assets") shall not be acquired
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by Acquiror pursuant to this Agreement.
2.4 Assumption of Certain Liabilities. Acquiror shall at Closing
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assume the liabilities of Transferor described on Exhibit B (the "Assumed
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Liabilities"), but excluding any other liabilities of Transferor whatsoever.
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Excluded Liabilities. Acquiror shall not assume any of the liabilities
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of Transferor not identified in Section 2.4 above. Without limiting the
generality of the foregoing, Acquiror shall not assume any liabilities
attributable to any of the Excluded Assets.
3. Purchase Price and Payment.
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3.1 Purchase Price. In consideration of (i) the sale, transfer and
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conveyance to Acquiror of the Purchased Assets, Acquiror shall, at the Closing,
transfer to Transferor Nine Million Six Hundred Seventy-Three Thousand Seven
Hundred Ninety-Four (9,673,794) shares of Dtomi common stock (the "Common
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Stock") owned by Acquiror (the "Shares"). The number
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of Shares to be transferred to Transferor shall be appropriately adjusted to
reflect the effect of any stock split, reverse split, stock dividend,
reorganization, recapitalization or other like change with respect to
Transferor's common stock occurring after the Effective Date and prior to
Closing, so as to provide Transferor the same economic effect as contemplated by
this Agreement prior to such stock split, reverse split, stock dividend,
reorganization, recapitalization, or like change. The consideration described in
this Section 3.1 is herein referred to as the "Purchase Price."
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3.2 Tax and Accounting Consequences. As a result of the transfer of
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the Shares to Transferor, in accordance with the terms and conditions set forth
in this Agreement, there may be certain Tax and accounting consequences to the
shareholders of the Transferor (the "Transferor Shareholders"), who will be the
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ultimate recipients of the Shares.
ACQUIROR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, NOR ARE ANY
INTENDED OR SHOULD ANY BE INFERRED, REGARDING THE ECONOMIC RETURN OR THE TAX
CONSEQUENCES TO THE TRANSFEROR SHAREHOLDERS WHO WILL ACQUIRE THE SHARES.
ACQUIROR, THEREFORE, RECOMMENDS THAT THE TRANSFEROR SHAREHOLDERS CONSULT THEIR
OWN ATTORNEYS, ACCOUNTANTS AND FINANCIAL ADVISORS ABOUT THE LEGAL AND TAX
CONSEQUENCES AND THE FINANCIAL RISKS AND MERITS OF RECEIVING THE SHARES.
3.3 Price Reduction Upon Certain Events. In the event of any damage
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to or destruction or condemnation of any of the Purchased Assets (excluding
damage or destruction caused by Acquiror or any of its affiliates), any taking
of any of the Purchased Assets by eminent domain or any material adverse change
to the Transferor's business, operations or financial condition between the
Effective Date and the Closing Date, Acquiror shall have the right, by notice
given to Transferor within five (5) days of such event (but in any case prior to
the Closing Date), to terminate this Agreement. If Acquiror does not elect to
terminate this Agreement, the Purchase Price shall be reduced by an amount equal
to the resulting reduction in the value of the Purchased Assets, which shall be
attributed to the Transferor whose respective Purchased Assets were so damaged,
destroyed or condemned. Transferor shall be entitled to retain any insurance
proceeds or condemnation awards paid or payable on account of such damage or
destruction or such taking. Transferor and Acquiror agree to negotiate in good
faith regarding the reduction in value resulting from any damage to or
destruction or condemnation of the Purchased Assets.
3.4 Escrow. The Shares shall be subject to the terms and conditions
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of an Escrow Agreement attached hereto as Exhibit D (the "Escrow
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Agreement").
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4. Pre-Closing Matters.
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4.1 Operation of Purchased Assets. Between the Effective Date and the
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Closing Date, Transferor, with respect to the Business, shall:
4.1.1 Conduct the Business and operate and maintain the Purchased
Assets in the Ordinary Course of Business;
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4.1.2 Not sell, lease, or otherwise transfer or dispose of any
Purchased Assets, or any interest therein, other than transfers and dispositions
made in the Ordinary Course of Business or transfers and dispositions otherwise
authorized by its President;
4.1.3 Not permit or allow any Purchased Assets to become subject
to any additional Lien (other than Permitted Encumbrances);
4.1.4 Maintain the levels of inventories and supplies in the
Business at customary levels; and
4.1.5 Use its Best Efforts to maintain the relations and goodwill
with suppliers, customers, and others having business relationships with
Transferor in connection with the Business.
4.2 Consents.
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4.2.1 Schedule 4.2.1 to this Agreement sets forth a complete and
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accurate list of all Consents to transfer required under (i) all material
Contracts (a) to which Transferor is a party and which relate to Transferor's
Business or the ownership, use, or operation of the Purchased Assets, or (b) by
which any of the Purchased Assets is bound; and (ii) all material Governmental
Authorizations that are held by Transferor and relate to Transferor's Business
or the ownership, use or operation of the Purchased Assets. Acquiror and
Transferor shall use their respective Best Efforts, each at its own expense, to
obtain all such Consents as soon as practicable after the Effective Date. In the
event any such Consent is not obtained by the Closing Date, Transferor agrees to
continue to use its Best Efforts thereafter, in cooperation with Acquiror, to
obtain such Consent as soon as practicable.
4.2.2 Acquiror shall provide all cooperation reasonably requested
by Transferor in connection with obtaining the Consents described on Schedule
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4.2.1, including the provision of any information relating to Acquiror that may
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be requested by the Person from whom any such Consent is required.
4.3 Notification of Certain Events.
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4.3.1 By Transferor. Between the Effective Date and the Closing
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Date, Transferor shall give prompt notice to Acquiror in the event Transferor
becomes aware of (i) any fact or condition that causes or constitutes a Breach
of any representation or warranty of Transferor set forth herein as of the
Effective Date, (ii) any fact or condition that would cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition, (iii) the occurrence of any Breach of any covenant of Transferor in
this Agreement, or (iv) the occurrence of any event that Transferor believes
will make the satisfaction of any of the conditions set forth in Section 5
impossible or unlikely. In the event that any fact or condition of the type
described in the foregoing clause (i) or (ii) would have required any change in
any of the Schedules or Exhibits to this Agreement if such fact or condition had
occurred or been known as of the Effective Date, Transferor shall promptly
deliver to Acquiror a supplement to such Schedule or Exhibit specifying the
necessary change.
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4.3.2 By Acquiror. Between the Effective Date and the Closing
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Date, Acquiror shall give prompt notice to Transferor in the event Acquiror
becomes aware of (i) any fact or condition that causes or constitutes a Breach
of any representation or warranty of Acquiror set forth herein as of the
Effective Date, (ii) any fact or condition that would cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition, (iii) the occurrence of any Breach of any covenant of Acquiror in
this Agreement, or (iv) the occurrence of any event that Acquiror believes will
make the satisfaction of any of the conditions set forth in Section 5 impossible
or unlikely. In the event that any fact or condition of the type described in
the foregoing clause (i) or (ii) would have required any change in any of the
Schedules or Exhibits to this Agreement if such fact or condition had occurred
or been known as of the Effective Date, Acquiror shall promptly deliver to
Transferor a supplement to such Schedule or Exhibit specifying the necessary
change.
4.3.3 No Effect on Remedies. The delivery of a notice or
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supplement pursuant to Sections 4.3.1 and 4.3.2 shall have no effect on the
remedies of any party hereunder.
4.4 Access to Information. Between the Effective Date and the Closing
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Date, Transferor shall, upon reasonable notice from Acquiror, (i) give Acquiror
and its representatives access (during normal business hours), in a manner so as
not to interfere with Transferor's normal operations and subject to reasonable
restrictions imposed by any such representative, to all key employees and to the
Purchased Assets, including the Books and Records relating thereto, and (ii)
cause its representatives to make available to Acquiror for the purpose of
making copies thereof such financial and operating data and other information
with respect to the Business and the Purchased Assets as Acquiror may reasonably
request.
4.5 Public Announcements. Except as otherwise required by applicable
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Legal Requirements, any public announcement or similar publicity with respect to
this Agreement or this transaction shall be issued, if at all, only with such
contents, at such time and in such manner as the parties may agree. If a party
believes that it is required by applicable Legal Requirements to make any such
public announcement, it shall first provide to the other party the content of
the proposed announcement, the reasons such announcement is required to be made,
and the time and place that the announcement will be made.
5. Conditions to Closing.
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5.1 Transferor's Conditions. Transferor's obligation to close this
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transaction shall be subject to and contingent upon the satisfaction (or waiver
by Transferor in writing in its sole discretion) of each of the following
conditions:
5.1.1 All representations and warranties of Acquiror set forth in
this Agreement and each such representation and warranty shall have been
accurate in all respects as of the Effective Date and shall be accurate in all
respects as of the Closing Date, as if made on the Closing Date.
5.2.2 (i) All of the covenants and obligations that Acquiror is
obligated to perform or comply with pursuant to this Agreement prior to or at
the Closing and each such
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covenant and obligation (considered individually) shall have been performed and
complied with in all respects; and (ii) Acquiror shall have made the deliveries
of documents required to be made pursuant to Section 6.2.2; provided, however,
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that with respect to the covenants and obligations described in this Section
5.1.2, a failure of the foregoing condition shall not be deemed to have occurred
unless (a) Transferor has given Acquiror notice specifying the nature of any
Breach of such covenants or obligations in reasonable detail, and (b) either (y)
Acquiror has failed to cure such Breach within ten (10) Business Days after such
notice is given, or (z) if such Breach cannot be cured solely by the payment of
money and cannot reasonably be cured within ten (10) Business Days despite the
exercise of Best Efforts, Acquiror has failed to commence curative action within
ten (10) Business Days after such notice is given or thereafter fails to
complete the cure of such Breach as soon as practicable.
5.2 Acquiror's Conditions. Acquiror's obligation to close this
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transaction shall be subject to and contingent upon the satisfaction (or waiver
by Acquiror in its sole discretion) of each of the following conditions:
5.2.1 All representations and warranties of Transferor set forth
in this Agreement shall have been accurate as of the Effective Date and shall be
accurate as of the Closing Date, as if made on the Closing Date.
5.2.2 All of the covenants and obligations that Transferor are
obligated to perform or comply with pursuant to this Agreement prior to or at
the Closing shall have been performed and complied with; and (ii) Transferor
shall have made the deliveries of documents required to be made pursuant to
Section 6.2.1.
5.2.3 To the extent, if any, that Acquiror is required to obtain
any Governmental Authorizations that relate to the Businesses or the ownership,
use, and operation of the Purchased Assets, Acquiror shall have obtained such
Governmental Authorizations and such Governmental Authorizations shall be in
full force and effect as of the Closing Date or subject to issuance to Acquiror
upon consummation of this transaction.
5.2.4 As of the Closing Date, there shall not be in effect any
legal requirement or any injunction or other order that prohibits the transfer
of any portion of the Purchased Assets by Transferor to Acquiror.
5.2.5 Between the Effective Date and the Closing Date, there
shall have been no damage to or destruction of any of the Purchased Assets
(excluding damage or destruction (i) caused by Acquiror or any of its
affiliates; or (ii) that does not have a material adverse effect on the
Businesses), nor any taking of any material portion of the Purchased Assets by
eminent domain.
5.2.6 Since the Effective Date, there shall not have been
commenced or threatened against Acquiror or Transferor or any related person of
Acquiror or Transferor any proceeding (i) seeking damages or other relief in
connection with, any aspect of this transaction, or (ii) that could reasonably
be expected to have the effect of preventing this transaction or making this
transaction illegal.
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5.2.7 Transferor shall have executed all documents necessary to
transfer and assign any of the Transferor's Intellectual Property which is being
transferred pursuant to this Agreement.
5.2.8 Transferor shall have executed the Escrow Agreement, on
terms and conditions acceptable to Acquiror.
5.2.9 Transferor shall have delivered to Acquiror a true and
complete listing of the Purchased Assets, which listing shall be acceptable to
Acquiror.
5.2.10 Transferor shall have delivered to Acquiror a true and
complete listing of the Assumed Liabilities, including evidence of the
liabilities acceptable to Acquiror.
5.2.11 Transferor shall have delivered to Acquiror a true and
complete listing of all Consents.
6. Closing.
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6.1 Time and Place of Closing. The Closing shall take place at the
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offices of The Xxxx Law Group, PLLC, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxx, or at such other location as the parties may mutually agree. Subject
to the provisions of Section 7, the Closing shall take place commencing at 10:00
a.m. (Pacific Standard Time) on January __, 2002, unless Transferor, in its sole
discretion, determines that shareholder approval of the transactions
contemplated by this Agreement is necessary or desirable, in which case Closing
shall take place on January __, 2002 or, in either case, on such other date as
is mutually acceptable to the parties.
6.2 Closing Deliveries.
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6.2.1 At the Closing, Transferor shall deliver, or cause to be
delivered, to Acquiror:
(a) A fully executed Xxxx of Sale and Assignment and Assumption
in the form of Exhibit C to this Agreement (the "Xxxx of Sale")
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conveying to Acquiror all personal property to be acquired by Acquiror
pursuant to this Agreement and providing for (i) the assignment to
Acquiror of the contract rights, and all other intangible personal
property included in the Purchased Assets and (ii) Acquiror's
assumption of the Assumed Liabilities;
(b) A duly authorized and executed Escrow Agreement required by
Section 3.4;
(c) A Certificate of an officer of Transferor certifying to the
attached resolutions of the board of directors and shareholders, if
the board of directors deems it necessary, of Transferor authorizing
this transaction;
(d) A Certificate of an authorized officer of the Transferor
certifying as to the accuracy of the Transferor's representations and
warranties under Section 7.1;
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(e) All Consents necessary to permit Transferor to transfer
the Purchased Assets to Acquiror;
(f) All necessary documents to transfer and assign any
Intellectual Property which is being transferred pursuant to this
Agreement;
(g) A true and complete listing of the Purchased Assets; and
(h) A true and complete listing of the Assumed Liabilities.
(i) A true and complete listing of all Consents required by
Section 4.2.1.
6.2.2 At the Closing, Acquiror shall deliver, or cause to be
delivered, to Transferor:
(a) A counterpart copy of the Xxxx of Sale, executed by
Acquiror;
(b) A counterpart copy of the Escrow Agreement, executed by
Acquiror;
(c) A Certificate of an authorized officer of Acquiror
certifying attached resolutions of the boards of directors and
shareholders of Acquiror authorizing this transaction;
(d) A Certificate of an authorized officer of the Acquiror
certifying as to the accuracy of the Acquiror's representations and
warranties under Section 7.2;
(e) A Certificate of an authorized officer of the Acquiror
certifying the number of shares that Transferor shall be entitled to
in accordance with the terms and conditions of this Agreement; and
(f) A counterpart copy of necessary documents to transfer and
assign any Intellectual Property which is being transferred pursuant
to this Agreement.
6.3 Closing Costs. Transferor and Acquiror shall each pay one-half
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(1/2) of the following costs associated with the Closing: (i) recording fees
with respect to the assignment of any Intellectual Property and (ii) all sales
and excise taxes due in connection with this transaction.
6.4 Possession. Acquiror shall be entitled to possession of the
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Purchased Assets on the Possession Date as that term is defined in Section 1.
7. Representations and Warranties.
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7.1 Transferor's Representations and Warranties. Transferor
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represents and warrants to Acquiror as follows:
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7.1.1 Organization and Good Standing. Transferor is a
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corporation, duly formed, validly existing and in good standing under the laws
of the State of Delaware.
7.1.2 Title to Purchased Assets. Transferor has good and
-------------------------
marketable title to the Purchased Assets, free and clear of all mortgages,
pledges, liens, encumbrances, security interests, equities, charges and
restrictions of any nature whatsoever, except such Permitted Encumbrances, as
that term is defined in Section 1. By virtue of the deliveries made at the
Closing, Acquiror will obtain good and marketable title to the Purchased Assets,
free and clear of all liens, mortgages, pledges, encumbrances, security
interests, equities, charges and restrictions of any nature whatsoever, except
any Permitted Encumbrances.
7.1.3 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid, and binding
obligation of Transferor, enforceable against Transferor in
accordance with its terms. Upon its execution and delivery by
Transferor at the Closing, the Transferor's closing documents will
constitute the legal, valid, and binding obligations of Transferor,
enforceable against Transferor in accordance with its respective
terms. Transferor has full corporate power, authority, and capacity
to execute and deliver this Agreement and Transferor's closing
documents and to perform its obligations hereunder and thereunder.
Without limiting the generality of the foregoing, the Boards of
Directors, and shareholders, if the Boards of Directors deems it
necessary, of Transferor has approved this Agreement and the
transactions contemplated hereby.
(b) Neither the execution and delivery of this Agreement, nor the
performance of any of Transferor's obligations hereunder, nor the
consummation of the transactions contemplated by this Agreement will,
directly or indirectly (with or without notice, lapse of time, or
both), (i) contravene, conflict with or result in a violation of any
provision of Transferor's Organizational Documents or any resolution
adopted by the Boards of Directors or shareholders of Transferor;
(ii) contravene, conflict with, or result in a violation of, or give
any Governmental Authority or other person the right to challenge
this transaction or to exercise any remedy or obtain any relief
under, any legal requirement or any order to which Transferor or any
of the Purchased Assets is subject; (iii) contravene, conflict with,
or result in a violation of any of the terms or requirements of any
governmental authorization; (iv) contravene, conflict with, or result
in a violation or breach of any provision of, or give any person the
right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate,
or modify, any Contract; or (v) result in the imposition or creation
of any lien upon or with respect to any of the Purchased Assets;
except, in the case of clauses (i), (ii) and (iii) above, for
contraventions, conflicts or violations which do not have a material
adverse effect on the ability of Transferor
(c) to consummate the transactions contemplated hereby.
11
(d) Transferor represents and warrants that it is not and will
not be required to give any notice to, make any filing with, or
obtain any material Consent from any person in connection with the
execution and delivery of this Agreement, the performance of its
obligations hereunder, or the consummation of this transaction, other
than the Consents described on Schedule 4.2.1. except, for Consents,
--------------
the failure of which to obtain would not have a material adverse
effect on the ability of the Transferor to consummate the
transactions contemplated hereby.
7.1.4 Books and Records. The Books and Records are complete and
-----------------
correct in all material respects and have been maintained in accordance with
sound business practices.
7.1.5 Possession of Purchased Assets. The Purchased Assets are
------------------------------
assets of the Transferor as of the Effective Date and are in Transferor's
possession as of the Effective Date, and that Transferor has all requisite title
or license to convey the Purchased Assets to Acquiror as contemplated by the
Agreement.
7.1.6 No Material Adverse Changes. There have been no material
---------------------------
adverse changes to Transferor's business, operations or financial condition
other than as disclosed in filings heretofore made with the Securities and
Exchange Commission.
7.1.7 Certain Proceedings. No proceeding is pending or, to
-------------------
Transferor's Knowledge, has been threatened against Transferor that challenges,
or could reasonably be expected to have the effect of preventing, making
illegal, or otherwise materially interfering with, this transaction.
7.1.8 Assumed Liabilities.
-------------------
(a) The individuals and/or entities, as the case may be, listed
in Exhibit B as having certain debts owed to such individual and/or
---------
entity by the Transferor have agreed to convert all or a portion of
the debt owed to such individual and/or entity by Transferor in the
amounts set forth in Exhibit B into certain shares of the Acquiror's
---------
Common Stock in accordance with the following formula:
No. Shares = Total Debt
-----------
0.40
(b) Acquiror shall not assume certain of the Transferor's
liabilities in the amount of One Hundred Ninety-Two Thousand Four
Hundred Sixty-Four Dollars and Twenty Nine Cents ($192,464.29)(the
"Unassumed Liabilities") as set forth in Exhibit B. The Transferor
--------------------- ---------
hereby acknowledges and agrees that all the obligations with respect
to the Unassumed Liabilities shall remain with the Transferor."
12
7.2 Acquiror's Representations and Warranties. Acquiror represents
-----------------------------------------
and warrants to Transferor as follows:
7.2.1 Organization and Good Standing. Acquiror is a corporation
------------------------------
duly incorporated, validly existing and in good standing under the laws of the
State of Nevada.
7.2.2 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid, and binding
obligation of Acquiror, enforceable against Acquiror in accordance
with its terms. Upon their execution and delivery by Acquiror at the
Closing, the Acquiror's closing documents will constitute the legal,
valid, and binding obligations of Acquiror, enforceable against
Acquiror in accordance with their respective terms. Acquiror has full
corporate power, authority, and capacity to execute and deliver this
Agreement and the Acquiror's closing documents and to perform its
obligations hereunder and thereunder. Without limiting the generality
of the foregoing, the Board of Directors of the Acquiror has approved
this Agreement and the transactions contemplated hereby.
(b) Neither the execution and delivery of this Agreement, nor
the performance of any of Acquiror's obligations hereunder, nor the
consummation of this transaction will, directly or indirectly (with
or without notice, lapse of time, or both), (i) contravene, conflict
with, or result in a violation of any provision of Acquiror's
Organizational Documents or any resolution adopted by the Board of
Directors or the shareholders of Acquiror; or (ii) give any Person
the right to prevent or otherwise interfere with this transaction
pursuant to any legal requirement or order to which Acquiror is
subject or any Contract to which Acquiror is a party or by which it
or any of its assets is bound.
7.2.3 Certain Proceedings. No proceeding is pending or, to
-------------------
Acquiror's Knowledge, has been threatened against Acquiror that challenges, or
could reasonably be expected to have the effect of preventing, making illegal,
or otherwise materially interfering with, this transaction.
7.2.4 Title to Shares. Acquiror owns the Shares free and clear of
---------------
all liens and encumbrances whatsoever and that, upon the consummation of the
transactions set forth herein, Transferor will own the Shares free and clear of
all liens and encumbrances whatsoever.
8. Additional Covenants.
--------------------
8.1 Covenants by Each Party.
-----------------------
8.1.1 Cooperation. Each of the parties hereto shall cooperate
-----------
with the other parties in every reasonable way in carrying out the transactions
contemplated herein, and in delivering all documents and instruments deemed
reasonably necessary or useful by counsel for each party hereto.
13
8.1.2 Expenses. Except as otherwise provided in this Agreement,
--------
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
or expenses.
8.1.3 Further Assurances. From time to time after the Closing,
------------------
Transferor will, at its own expense, execute and deliver, or cause to be
executed and delivered, such documents to Acquiror as Acquiror may reasonably
request in order more effectively to vest in Acquiror good title to the
Purchased Assets and otherwise to consummate the transactions contemplated by
this Agreement, and from time to time after the Closing, Acquiror will, at its
own expense, execute and deliver such documents to Transferor as Transferor may
reasonably request in order more effectively to consummate the assumption of the
Assumed Liabilities by Acquiror and otherwise to consummate the transactions
contemplated by this Agreement.
8.2 Indemnification.
---------------
8.2.1 By Acquiror. In the event the Acquiror (i) breaches or is
-----------
deemed to have breached any of the representations and warranties contained in
this Agreement or (ii) fails to perform or comply with any of the covenants and
agreements set forth in this Agreement, then the Acquiror shall hold harmless,
indemnify and defend Transferor, and each of its directors, officers,
shareholders, attorneys, representatives and agents, from and against any
Damages incurred or paid by Transferor to the extent such Damages arise or
result from a breach by the Acquiror of any such representations and warranties
or a violation of any covenant in this Agreement.
8.2.2 By Transferor. In the event Transferor (i) breaches or is
-------------
deemed to have breached any of the representations and warranties contained in
this Agreement or (ii) fails to perform or comply with any of the covenants and
agreements set forth in this Agreement, Transferor shall hold harmless,
indemnify and defend Acquiror, and each of its directors, officers,
shareholders, attorneys, representatives and agents, from and against any
Damages incurred or paid by the acquirer to the extent such Damages arise or
result from a breach by Transferor of any such representations or warranties or
a violation of any covenant in this Agreement. For purposes of this Section 8.2,
"Damages" shall mean any and all costs, losses, damages, liabilities, demands,
-------
claims, suits, actions, judgments, causes of action, assessments or expenses,
including interest, penalties, fines and attorneys' fees and expenses incident
thereto, incurred in connection with any claim for indemnification arising out
of this Agreement, and any and all amounts paid in settlement of any such claim.
8.3 Retention of and Access to Books and Records. Transferor agree to
--------------------------------------------
retain the Books and Records for a period of five (5) years after the Closing
Date and to make them available to Acquiror for the purpose of making copies
thereof at Acquiror's expense of.
9. Termination.
-----------
9.1 Termination Events. Except as otherwise provided for, this
------------------
Agreement may, by notice given prior to or at the Closing (which notice shall
specify the grounds for termination), be terminated by mutual written agreement
of both Transferor and Acquiror.
14
9.2 Effect of Termination. Each party's right of termination under
---------------------
Section 9.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination shall not constitute an
election of remedies. If this Agreement is terminated pursuant to Section 9.1,
all further obligations of the parties under this Agreement shall thereupon
terminate, except that Sections 10 and 12 shall survive; provided, however, that
-------- -------
if this Agreement is terminated by a party because of a material Breach of this
Agreement by any of the parties or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of any party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies shall
survive such termination unimpaired.
10. Default; Remedies.
-----------------
10.1 Time of Essence. Time is of the essence of the parties'
---------------
obligations under this Agreement.
10.2 Remedies. If any party fails to perform its obligations under
--------
this Agreement, the other party shall be entitled to pursue all remedies
available at law or in equity, including, in the case of a failure to consummate
this transaction following satisfaction (or waiver) of the conditions set forth
in Section 6.2, as applicable, the remedy of specific performance; provided,
--------
however, that except with respect to a failure to close this transaction as
-------
provided herein, a party shall not be in default hereunder unless (i) the
non-Breaching party has given the Breaching party notice specifying the nature
of the Breach in reasonable detail, and (ii) the Breaching party either (a) has
failed to cure such Breach within ten (10) Business Days after such notice is
given, or (b) if such Breach cannot be cured solely by the payment of money and
cannot reasonably be cured within ten (10) Business Days despite the exercise of
Best Efforts, has failed to commence curative action within ten (10) Business
Days after such notice is given or thereafter fails to complete the cure of such
Breach as soon as practicable.
11. Construction and Interpretation.
-------------------------------
11.1 The headings or titles of the sections of this Agreement are
intended for ease of reference only and shall have no effect whatsoever on the
construction or interpretation of any provision of this Agreement. References
herein to sections are to sections of this Agreement unless otherwise specified.
11.2 Meanings of defined terms used in this Agreement are equally
applicable to singular and plural forms of the defined terms. The masculine
gender shall also include the feminine and neutral genders and vice versa.
11.3 As used herein, (i) the term "party" refers to a party to this
Agreement, unless otherwise specified, (ii) the terms "hereof," "herein,"
"hereunder," and similar terms refer to this Agreement as a whole and not to any
particular provision of this Agreement, (iii) the term "this transaction" refers
to the transaction contemplated by this Agreement, (iv) the term "including" is
not limiting and means "including without limitation," (v) the term "documents"
includes all instruments, documents, agreements, certificates, indentures,
notices, and other
15
writings, however evidenced, and (vi) the term "property" includes any kind of
property or asset, real, personal, or mixed, tangible or intangible.
11.4 In the event any period of time specified in this Agreement ends
on a day other than a Business Day, such period shall be extended to the next
following Business Day. In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including," the
words "to" and "until" each mean "to but excluding," and the word "through"
means "to and including."
11.5 This Agreement is the product of arm's length negotiations among,
and has been reviewed by counsel to the parties and is the product of all the
parties. Accordingly, this Agreement shall not be construed for or against any
party by reason of the authorship or alleged authorship of any provision hereof.
12. Miscellaneous Provisions.
------------------------
12.1 Survival of Covenants. Each covenant or agreement of the parties
---------------------
set forth in this Agreement which by its terms expressly provides for
performance after the Closing Date shall survive the Closing and be fully
enforceable thereafter.
12.2 Expenses. Except as otherwise provided, each party shall bear its
--------
own expenses incurred in connection with the preparation, execution, and
performance of this Agreement and this transaction, including all fees and
expenses of its own Representatives or any other similar payment in connection
with this transaction.
12.3 Binding Effect. The provisions of this Agreement shall be binding
--------------
upon and inure to the benefit of the parties and, subject to the restrictions on
assignment set forth herein, their respective successors and assigns.
12.4 Assignment. Neither party shall assign any of its rights or
----------
obligations under this Agreement without the prior written consent of the other
party. No assignment of this Agreement shall release the assigning party from
its obligations under this Agreement.
12.5 Notices. All notices under this Agreement shall be in writing.
-------
Notices may be (i) delivered personally, (ii) transmitted by facsimile, (iii)
delivered by a recognized national overnight delivery service, or (iv) mailed by
certified United States mail, postage prepaid and return receipt requested.
Notices to any party shall be directed to its address set forth below, or to
such other or additional address as any party may specify by notice to the other
party. Any notice delivered in accordance with this Section 13.5 shall be deemed
given when actually received or, if earlier, (a) in the case of any notice
transmitted by facsimile, on the date on which the transmitting party receives
confirmation of receipt by facsimile transmission, telephone, or otherwise, if
sent during the recipient's normal business hours or, if not, on the next
Business Day, (b) in the case of any notice delivered by a recognized national
overnight delivery service, on the next Business Day after delivery to the
service or, if different, on the day designated for delivery, or (c) in the case
of any notice mailed by certified U.S. mail, two (2) Business Days after deposit
therein.
16
If to IMG International Manufacturers Gateway, Inc.
000X Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn: President
With a copy to: The Xxxx Law Group, PLLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: Xxxxx X. Xxxx
If to Dtomi: Dtomi, Inc.
000 0xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn: President
With a copy to: The Xxxx Law Group, PLLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: Xxxxx X. Xxxx
12.6 Waiver. Any party's failure to exercise any right or remedy under
------
this Agreement, delay in exercising any such right or remedy, or partial
exercise of any such right or remedy shall not constitute a waiver of that or
any other right or remedy hereunder. A waiver of any Breach of any provision of
this Agreement shall not constitute a waiver of any succeeding Breach of such
provision or a waiver of such provision itself. No waiver of any provision of
this Agreement shall be binding on a party unless it is set forth in writing and
signed by such party.
12.7 Amendment. This Agreement may not be modified or amended except
---------
by the written agreement of the parties.
12.8 Severability. If any provision of this Agreement is held invalid,
------------
illegal, or unenforceable, then (i) such provision shall be enforceable to the
fullest extent permitted by applicable law, and (ii) the validity and
enforceability of the other provisions of this Agreement shall not be affected
and all such provisions shall remain in full force and effect.
12.9 Integration. This Agreement, including the Exhibits and
-----------
Schedules hereto, contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements with respect thereto. The
17
parties acknowledge and agree that there are no agreements or representations
relating to the subject matter of this Agreement, either written or oral,
express or implied, that are not set forth in this Agreement, in the Exhibits
and Schedules to this Agreement.
12.10 Governing Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of Washington (without regard
to the principles thereof relating to conflicts of laws).
12.11 Arbitration. All disputes or claims arising out of or relating to
-----------
this Agreement, or the breach hereof, including disputes as to the validity
and/or enforceability of this Agreement or any portion thereof, and any claims
for indemnification under the provisions of this Agreement, shall be resolved by
arbitration conducted in Seattle, Washington. Any arbitration pursuant to this
Section 12.11 shall be conducted, upon the request of any party, before a single
arbitrator selected by the parties or, failing agreement on the choice of an
arbitrator within thirty (30) days of service of written demand for arbitration,
by an arbitrator designated by the Presiding Judge of the Superior Court for
King County, Washington. The arbitrator shall be a practicing attorney licensed
to practice in one or more of the fifty (50) states, with substantial experience
in commercial and/or commercial litigation matters, who has been in active
practice for at least ten (10) years. Such arbitration shall be conducted in
accordance with the laws of the State of Washington and pursuant to the
commercial arbitration rules of the American Arbitration Association (although
not under the auspices of the American Arbitration Association) and such of the
federal rules of civil procedure as the arbitrator may determine. The
arbitration shall be conducted within forty-five (45) days of the selection of
the arbitrator and the arbitrator shall render his or her decision within twenty
(20) days after conclusion of the arbitration. The prevailing party in the
arbitration shall be entitled as a part of the arbitration award to the costs
and expenses (including reasonable attorneys' fees and the fees of the
arbitrator) of investigating, preparing, and pursuing or defending the
arbitration claim as such costs and expenses are awarded by the arbitrator. The
duty to arbitrate shall survive a termination or cancellation of this Agreement
and shall be specifically enforceable under applicable federal law and the
prevailing arbitration law of the State of Washington. The decision of the
arbitrator shall be final and binding upon the parties and enforceable in any
court of competent jurisdiction.
12.12 Execution. This Agreement may be executed in any number of
---------
counterparts, all of which together shall constitute one and the same agreement.
Each party may rely upon the signature of each other party on this Agreement
that is transmitted by facsimile as constituting a duly authorized, irrevocable,
actual, current delivery of this Agreement with the original ink signature of
the transmitting party.
12.13 Incorporation of Recitals, Exhibits, and Schedules. The Recitals
--------------------------------------------------
to this Agreement and all Exhibits and Schedules to this Agreement are
incorporated herein by this reference.
12.14 Further Assurances. Each party agrees to execute and deliver such
------------------
additional documents and instruments as may reasonably be required to effect
this transaction fully, so long as the terms thereof are consistent with the
terms of this Agreement.
18
12.15 No Third Party Beneficiaries. This Agreement is made and entered
----------------------------
into for the sole protection and legal benefit of Transferor and Acquiror, and,
subject to the restrictions on assignment set forth herein, their respective
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement.
[SIGNATURE PAGE FOLLOWS]
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
IMG: INTERNATIONAL MANUFACTURERS
GATEWAY, INC.,
a Delaware corporation
By: /s/ R. Xxxxx Xxxxxx
Name: R. Xxxxx Xxxxxx
Its: President
DTOMI: DTOMI, INC,
a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Its: President
20
EXHIBIT A
---------
PURCHASED ASSETS
----------------
The following are the assets owned by IMG, which under the terms and conditions
of this Agreement are being acquired by Dtomi.
[to be finalized post closing pursuant to Amendment No. 1 to the Asset
Purchase Agreement, dated January 21, 2002, by and between Dtomi and IMG]
1
EXHIBIT B
---------
ASSUMED LIABILITIES
-------------------
The following liabilities of IMG, pursuant to the terms and conditions
of this Agreement, are being assumed by Dtomi:
[to be finalized post closing pursuant to Amendment No. 1 to the Asset
Purchase Agreement, dated January 21, 2002, by and between Dtomi and
IMG]
1
EXHIBIT C
---------
XXXX OF SALE
AND
ASSIGNMENT AND ASSUMPTION
This Xxxx of Sale and Assignment and Assumption Agreement (this "Xxxx of
-------
Sale"), dated January 14, 2002 (the "Effective Date") by and between
---- --------------
International Manufacturers Gateway, Inc., a Delaware corporation
("IMG")("Transferor"), and Dtomi, Inc., a Nevada corporation ("Dtomi" or
--- ---------- -----
"Acquiror").
--------
Recitals:
--------
A. IMG and Dtomi entered into that certain Asset Purchase Agreement, dated
January 14, 2002 (the "Agreement"), which provides, on the terms and conditions
---------
set forth therein, for the transfer by Transferor and purchase by Acquiror of
certain assets of Transferor as set forth in the Agreement. Capitalized terms
used herein without definition shall have the meanings ascribed to them in the
Agreement.
B. The assets being sold by Transferor and purchased by Acquiror include,
but are not limited to, certain of Transferor's tangible and intangible property
(the "Purchased Assets") as set forth in the Agreement.
----------------
C. Acquiror desires to obtain all right, title and interest in and to any
and all of the Purchased Assets.
D. This Xxxx of Sale is being executed and delivered in order to effect the
transfer of the Purchased Assets to Acquiror, as provided in the Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Transferor agree as follows:
1. Assignment. Transferor hereby sells, grants, conveys, bargains,
----------
transfers, assigns and delivers to Acquiror, and to Acquiror's successors and
assigns, all of Transferor's rights, titles and interests, legal and equitable,
throughout the world, in and to the Purchased Assets, to have and to hold the
same forever. This is a transfer and conveyance by Transferor to Acquiror of
good and marketable title to the Purchased Assets, free and clear of all
encumbrances except as provided in the Agreement or on the Schedules thereto.
Subject to the conditions and limitations contained in the Agreement, Transferor
hereby covenants and agrees to warrant and defend title to the Purchased Assets
against any and all claims whatsoever to the extent represented and warranted to
in the Agreement.
2. Assumption. Acquiror, in consideration of the assignment, hereby assumes
----------
and undertakes to discharge, as appropriate in accordance with their terms, all
of the Assumed
1
Liabilities except as otherwise set forth in the Agreement. Except as provided
for in this Xxxxxxxxx 0, Xxxxxxxx is not hereby assuming, and the Acquiror shall
not assume or otherwise be obligated to pay, perform, satisfy or discharge, any
liabilities or obligations of Transferor or the Business.
3. Further Assurances. Transferor agrees that it will, at Acquiror's
------------------
request at any time and from time to time after the date hereof and without
further consideration, do, execute, acknowledge and deliver or will cause to be
done, executed, acknowledged and delivered all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and other instruments
and assurances as may be considered by Acquiror, its successors and assigns, to
be necessary or proper to better effect the sale, conveyance, transfer,
assignment, assurance, confirmation and delivery of ownership of the Purchased
Assets to Acquiror, or to aid and assist in collecting and reducing to the
possession of Acquiror, any and all Purchased Assets.
4. Amendment or Termination; Successors and Assigns. This Xxxx of Sale may
------------------------------------------------
not be amended or terminated except by a written instrument duly signed by each
of the parties hereto. This Xxxx of Sale shall inure to the benefit of, and be
binding upon, each of the parties hereto and their respective successors and
assigns.
5. No Third Parties. Nothing in this Xxxx of Sale, expressed or implied, is
----------------
intended or shall be construed to confer upon or give to any person, firm or
corporation other than Acquiror and Transferor, their successors and assigns,
any remedy or claim under or by reason of this instrument or any term, covenant
or condition hereof, and all of the terms, covenants, conditions, promises and
agreements contained in this instrument shall be for the sole and exclusive
benefit of the Acquiror and Transferor, their successors and assigns.
6. Construction. This Xxxx of Sale, being further documentation of a
------------
portion of the conveyances, transfers and assignments provided for in and by the
Agreement, neither supersedes, amends, or modifies any of the terms or
provisions of the Agreement nor does it expand upon or limit the rights,
obligations or warranties of the parties under the Agreement. In the event of a
conflict or ambiguity between the provisions of this Xxxx of Sale and the
Agreement, the provisions of the Agreement will be controlling.
7. Governing Law. The rights and obligations of the parties under this Xxxx
-------------
of Sale will be construed under and governed by the internal laws of the State
of Washington (regardless of its or any other jurisdiction's conflict-of-law
provisions).
8. Counterparts. This Xxxx of Sale may be executed by facsimile in one or
------------
more counterparts and by facsimile, each of which shall be deemed an original
and all of which taken together shall constitute one and the same instrument.
2
IN WITNESS WHEREOF, the parties have executed this Xxxx of Sale as of
the Effective Date.
TRANSFEROR: INTERNATIONAL MANUFACTURERS
GATEWAY, INC.,
a Delaware corporation
By: /s/ R. Xxxxx Xxxxxx
Name: R. Xxxxx Xxxxxx
Its: President
ACQUIROR: DTOMI, INC,
a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Its: President
3
EXHIBIT D
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is entered into as of January
---------
14, 2002 (the "Effective Date") by and among Dtomi, Inc., a Nevada corporation
--------------
("Dtomi"), International Manufacturers Gateway, Inc., a Delaware corporation
("IMG") and The Xxxx Law Group, PLLC, a Washington professional limited
---
liability company (the "Escrow Agent").
------------
RECITALS
Dtomi and IMG are parties to that certain Asset Purchase Agreement
dated January 14, 2002 (the "Asset Purchase Agreement") pursuant to which IMG
------------------------
will acquire Nine Million Six Hundred Seventy-Three Thousand Seven Hundred
Ninety-Four (9,673,794) shares of Dtomi common stock (the "Escrow Shares") in
-------------
exchange for transferring to Dtomi certain assets and certain liabilities of
IMG, which Escrow Shares shall be held subject to the terms and conditions of
this Agreement;
AGREEMENT
In consideration of the foregoing premises and the mutual and dependent
promises set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Delivery of Documents
Concurrent with the execution of this Agreement, and all documents in connection
with the closing of the Asset Purchase Agreement, the Escrow Shares shall be
delivered to the Escrow Agent. The Escrow Agent hereby agrees to hold all such
shares and other documents delivered by the parties to the Escrow Agent and to
only deal with the same in accordance with the terms of this Agreement.
2. Capital Changes - IMG
IMG shall have all the rights of a stockholder with respect to the Escrow Shares
while such shares are held by the Escrow Agent in accordance with the terms of
this Agreement. In the event of any capital adjustment by Dtomi during the term
of this Agreement, any and all new, substituted or additional securities to
which IMG is entitled shall be immediately subject to the terms of this
Agreement and shall be included in the definition of Escrow Shares. IMG hereby
irrevocably instructs the Escrow Agent to instruct the transfer agent for Dtomi
to forward such substituted securities to the attention of the Escrow Agent.
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3. Instructions to Escrow Agent
The parties hereto jointly instruct the Escrow Agent as follows:
(a) in the event that on or before February 15, 2002, the Asset Purchase
Agreement has closed (the "Asset Purchase Closing"), the Escrow Agent shall,
----------------------
within thirty (30) days of the Asset Purchase Closing, instruct Dtomi's transfer
agent to deliver the appropriate Escrow Shares to IMG, who shall, in turn,
deliver such Escrow Shares in accordance with the attached Share Allocation
----------------
Schedule.
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or:
(b) in the event that by February 15, 2001, the Asset Purchase Closing
has not occurred, the Escrow Agent shall immediately return the Escrow Shares to
Dtomi by overnight courier;
4. Further Instructions
The instructions to the Escrow Agent may only be amended by further instructions
in writing executed and delivered to the Escrow Agent by all parties to this
Agreement. The Escrow Agent shall have no liability for any act or omission
hereunder while acting in good faith in the exercise of its own judgment.
5. Ownership of Escrow Shares
Until such time as the Escrow Shares are transferred, pursuant to either Section
3(a) or 3(b), the Escrow Shares shall be owned by IMG and all voting authority
and power, with respect to the Escrow Shares, shall be, and remain, vested in
IMG.
6. Notices
Any notice required or permitted to be given under this Agreement will be in
writing and may be given by delivering, sending by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy, or sending by prepaid registered mail, the notice to the following
address or number:
If to IMG: International Manufacturers Gateway, Inc.
000X Xxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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If to Dtomi: Dtomi, Inc.
000 0/xx/ Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn: President
With a copy to: The Xxxx Law Group, PLLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: Xxxxx X. Xxxx
If to Escrow Agent: The Xxxx Law Group, PLLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: Xxxxx X. Xxxx
Any notice delivered or sent by electronic facsimile transmission or other means
of electronic communication capable of producing a printed copy on a business
day will be deemed conclusively to have been effectively given on the day the
notice was delivered, or the transmission was sent successfully to the number
set out above, as the case may be. Any notice sent by prepaid registered mail
will be deemed conclusively to have been effectively given on the third business
day after posting; but if at the time of posting or between the time of posting
and the third business day thereafter there is a strike, lockout, or other
labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered.
7. Entire Agreement; Headings
This Agreement, together with the Asset Purchase Agreement, contains the entire
understanding and agreement of the parties with respect to the transactions
contemplated by this Agreement and supersedes, and may not be supplemented or
varied by, any prior oral or written understandings or agreements. The headings
in this Agreement are inserted for convenience of reference only and shall not
be a part of or control or affect the meaning of this Agreement.
8. Assigns and Assignment
This Agreement shall extend to, inure to the benefit of and be binding upon all
of the parties and their respective permitted successors and assigns.
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9. Amendment and Waiver
This Agreement may be amended, modified, supplemented or altered only by a
writing duly executed by all parties hereto. No failure or delay by a party in
exercising any right, power or privilege under this Agreement shall operate as a
waiver, and no single or partial exercise shall preclude any right of further
exercise or the exercise of any other right, power or privilege. No waiver of
any right, power or privilege under this Agreement shall be effective unless set
forth in writing, executed by the party against whom the waiver is sought to be
enforced.
10. Severability
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the fullest extent possible.
11. Governing Law
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Washington, as applied to contracts executed and
to be fully performed in Washington.
12. Counterparts
This Agreement may be executed by the parties individually or in any
combination, in one (1) or more counterparts and by facsimile, each of which
shall be an original and all of which shall together constitute one (1) and the
same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
DTOMI, INC.
/s/ Xxxxxxx Xxxxxxx
By: Xxxxxxx Xxxxxxx
Its: President
INTERNATIONAL MANUFACTURERS
GATEWAY, INC.
/s/ R. Xxxxx Xxxxxx
By: R. Xxxxx Xxxxxx
Its: President
THE XXXX LAW GROUP, PLLC
/s/ Xxxxx X. Xxxx
By: Xxxxx X. Xxxx
Its: President
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SHARE ALLOCATION SCHEDULE
-------------------------
The Escrow Shares shall be distributed in accordance with the following
schedule:
[to be finalized post closing pursuant to Amendment No. 1 to the Asset
Purchase Agreement, dated January 21, 2002, by and between Dtomi and IMG]
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SCHEDULE 4.2.1
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CONSENTS
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[to be finalized post closing pursuant to Amendment No. 1 to the Asset
Purchase Agreement, dated January 21, 2002, by and between Dtomi and IMG]
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