EXHIBIT 10.8
ASSET AND STOCK PURCHASE AGREEMENT
This Asset and Stock Purchase Agreement ("Agreement"), dated as of
October 4, 2003 ("Effective Date") is entered into by and among ICEWEB ONLINE,
INC., a Virginia corporation being formed ("IOI"), successor to ICEWEB WORLDWIDE
ACQUISITION CORPORATION II, a Delaware corporation that was to be formed, party
of the first part; ICEWEB, INC. a Delaware corporation ("Iceweb"); party of the
second part; I-PLICITY, INC, a Virginia corporation ("I-Plicity"), party of the
third part; and I-PLICITY SHAREHOLDERS (collectively the "Shareholders"),
parties of the fourth part
RECITALS
A. The Shareholders are the owners of the percentage of the
issued and outstanding capital stock of I-Plicity necessary to
consent to this Agreement.
B. I-Plicity is the owner of certain assets which IOI wishes to
acquire.
C. IOI wishes to acquire 19% of the capital stock of I-Plicity in
exchange for authorized but unissued shares of common stock,
par value $.001 per share (the "Common Stock") of Iceweb as
hereinafter provided.
D. It is the intention of the parties hereto that: (i) Iceweb
shall acquire 19% of the capital stock of I-Plicity owned by
the Shareholders in exchange solely for the consideration set
forth below (the "Exchange"); (ii) the Exchange shall qualify
as a transaction in securities exempt from registration or
qualification under the Securities Act of 1933, as amended,
and under the applicable securities laws of each jurisdiction
where the Shareholders reside; and (iii) the Exchange is
intended to qualify as a "tax-free" transaction within the
meaning of Section 368 of the Internal Revenue Code of 1986.
E. It is the intention of the parties hereto that IOI will
acquire 19% of the capital stock of I-Plicity and purchase
certain assets of I-Plicity. Neither IOI nor Iceweb will
assume the liabilities of I-Plicity. On an asset by asset
basis, certain liabilities may be assumed in connection with
certain assets being purchased.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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ARTICLE I
ACQUISITION OF SHARES AND ASSETS
SECTION 1.0 - ACQUISITION OF SHARES
1.01 Acquisition of Shares. IOI, Iceweb and the Shareholders hereby
agree that the Shareholders shall, on the Closing Date (as hereinafter defined),
exchange 4,750 shares of the Common Stock of I-Plicity, which constitute 19% of
the 25,000 issued and outstanding shares of capital stock of I-Plicity (the
"I-Plicity Shares"), by transferring the I-Plicity Shares to IOI, a wholly owned
subsidiary of Iceweb, and, in exchange therefor, Iceweb shall issue to the
Shareholders 1,531,046 shares of Iceweb's Common Stock (the "Iceweb Shares") to
be divided among 12 shareholders. 968,954 shares are to be split between the
executive management team and distributed at Closing. The remaining 562,092
shares will be distributed to I-Plicity investors and non-executive employee
shareholders at closing.
1.02 Delivery of I-Plicity and Iceweb Shares. On the Closing Date, the
Shareholders will deliver to IOI the certificates representing the I-Plicity
Shares, duly endorsed for transfer (or with executed stock powers), so as to
make IOI the sole owner thereof. Simultaneously, Iceweb will deliver
certificates representing the Iceweb Shares to the Shareholders as provided in
Exhibit A.
1.03 Investment Intent. The Iceweb shares have not been registered
under the Securities Act of 1933, as amended (the "Act"), and may not be resold
unless the Iceweb Shares are registered under the Act or an exemption from such
registration is available. The Shareholders represent and warrant that they are
acquiring the Iceweb Shares for their respective accounts for investment, and
not with a view to the sale or distribution of the Iceweb Shares. Each
certificate representing the Iceweb Shares will have a legend thereon
incorporating language as follows:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") or any state
securities laws. The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective Registration
Statement for the shares under the Act unless in the opinion of counsel
satisfactory to the Company, registration is not required under the Act
or any applicable state securities laws."
1.04 Registration Rights.
a. Incidental Registration. In connection with any Public
Offering of Iceweb securities, Shareholders shall have the right to require
Iceweb to include all or (at Shareholder's election) any portion of the Iceweb
Shares. Notwithstanding the foregoing, if the underwriters shall advise Iceweb
in writing that, in their experience and professional opinion arrived at in good
faith based upon existing market conditions, inclusion of such number of Iceweb
Shares (together with the shares of Common Stock requested for registration by
any other selling equityholders) will adversely affect the price or distribution
of the securities to be offered in such
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Public Offering solely for the account of Iceweb, then Holder shall then have
the right to include only such number of Iceweb Shares that such advice by the
underwriters indicates may be distributed without adversely affecting the
distribution of the securities solely for Iceweb's account. As between
Shareholders and any other holders of Iceweb Common Stock requesting to be
included in such Public Offering, such availability for inclusion in the
registration for such Public Offering shall be allocated pro rata based upon the
total number of shares of Iceweb Common Stock owned or purchasable. In
connection with any underwritten Public Offering, provided that all other
holders of equity interests of Iceweb are subject to identical (or more
restrictive) restrictions with respect to their equity interests, then
Shareholders shall agree to refrain from selling or otherwise transferring
(other than to affiliates) any Iceweb Shares not included in such Public
Offering for a period of time (not to exceed 14 calendar days prior to and 180
calendar days after the effective date of the registration statement for such
Public Offering) as may be appropriate under the circumstances and reasonably
requested by Iceweb and the underwriters for such offering.
b. Certain Additional Agreements in Connection with
Registrations. In connection with any Public Offering, Iceweb (i) shall furnish
Shareholders such numbers of copies of registration statements and prospectuses
(and amendments and supplements thereto) as Shareholder may reasonably request,
and (ii) shall take all such other actions as are necessary or advisable to
facilitate the registration and sale of such Iceweb Shares. In connection with
any Public Offering as to which Shareholder is requesting registration of Iceweb
Shares, Shareholder (A) shall provide Iceweb with such information regarding
itself, himself or herself as may be reasonably required by Iceweb, and (B)
shall reasonably cooperate with Iceweb in the preparation of the registration
statement. In connection with any offering of Iceweb Shares pursuant to the
provisions of this Section, Iceweb and Shareholders shall provide each other
with customary indemnifications that are no more favorable to Iceweb than those
applicable to any other Persons participating in such Public Offering.
c. Public Offering means any issuance or other sale of any
Common Stock (or securities convertible into, or exchangeable for, Common Stock
or rights to acquire common Stock or such securities) of Iceweb pursuant to a
registration statement filed with the Commission under the Securities Act, other
than a registration on Form S-8 (or any successor form) relating solely to
employee benefits or stock plans provided, however, that if a registration
statement is filed at the request of holders of the Common Stock of Iceweb and
no shares of Common Stock will be sold under such registration statement on
account of the Iceweb, then such registration statement will only be considered
a Public Offering if such offering will result in gross proceeds of at least
$5,000,000 to the selling security holders.
SECTION 1.1 - ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES
1.11 Acquisition of Assets. IOI and I-Plicity hereby agree that for and
in consideration of the sum of US SIXTY FIVE THOUSAND FIVE HUNDRED AND NO/100
DOLLARS (us $65,500.00) I-Plicity shall sell to IOI, and IOI shall purchase from
I-Plicity, free of all liens and encumbrances, the following I-Plicity assets
("Assets):
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a. SOFTWARE AND DOCUMENTATION. All software and documentation
developed, under development, and used in what is referred to as the Kashmere
CMS suite of software products, plus all other software and documentation
developed by or for I-Plicity at any time. Every software program developed or
used by I-Plicity shall be described in Schedule 1.11.a. and, if the program is
designated by name, the name for the program shall be provided in Schedule
1.11.a. (the "Software Programs"). Without limiting the generality of the
foregoing, I-Plicity shall convey to Buyer the following:
(i) CODE. All computer programming code. Code shall
include both Object Code and Source Code. "Object Code" is defined as the
machine-readable form of the Code. "Source Code" is defined as the
human-readable form of the Code, including all comments and any procedural code
such as job control language. All Code is currently resident on computer servers
owned or controlled by I-Plicity, IOI, or Iceweb. At or after Closing, a
mutually acceptable software expert must warrant that all computer programming
code as set forth in Schedule 1.11.a. remains on the computer servers.
(ii) PRODUCTS AND DERIVATIVE PRODUCTS. All products
in Source Code and, if in existence, Object Code. Products may have taken the
form of either an original product, derivative work, or a copy of the product,
and may have been licensed to I-Plicity's customers as a basic Software Program,
or a modification, addition, or replacement of or to the Product, whether in the
form of a fix, new release, enhancement, upgrade, new product, or otherwise. A
"Derivative Work" means a work that is based upon one or more preexisting works,
such as a revision, modification, translation, abridgement, condensation,
expansion, or any other form in which such preexisting works may be recast,
transformed, or adapted, and which, if prepared without authorization of the
owner of the copyright in such preexisting work, would constitute a copyright
infringement. For purposes of this Agreement, a Derivative Work shall also
include any compilation that incorporates such a preexisting work. All Products
and Derivative Works developed and/or sold by I-Plicity, the rights to all of
which are being assigned hereunder, are described and listed in Schedule 1.11.a.
attached.
(iii) DOCUMENTATION. All Documentation, including
written materials (and machine-readable text subject to display and printout)
that directly relate to and/or describe particular Code. Documentation shall
include Development Documentation and User Documentation. Development
Documentation means Documentation used in conjunction with Source Code in the
development process. User Documentation means Documentation in the form of
instructions and manuals provided to end-user customers. All Documentation, the
rights to all of which are being assigned hereunder, are described and listed in
Schedule 1.11.a. attached.
(iv) EXISTING LICENSES. All license agreements
between I-Plicity and its customers, which relate to Products or Derivative
Products that have already been fully or partially delivered and installed
("Existing Licenses"). All Existing Licenses are described and listed in
Schedule 1.11.a. attached.
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(v) GENERIC CODE. All Generic Code. "Generic Code"
means the Code identified in Schedule 1.11.a. attached hereto, consisting of
subroutines that are currently part of a Product or Derivative Work and used by
I-Plicity or any of its Software developers in other products or for other
purposes.
(vi) THIRD PARTY SOFTWARE LICENSES. All software
developed or licensed by third parties to I-Plicity as licensee, and used by
I-Plicity in development of Software or otherwise used in I-Plicity's business.
All Third Party Software Licenses, the rights to all of which are being assigned
hereunder, are described and listed in Schedule 1.11.a. attached.
b. OTHER CONTENT. All content not included in the Software
assets described in subparagraph a. above, whether said content is analog or
digital voice, video, or data content stored on tape, disk, or any form of
analog, digital, electronic, or other media. All Other Content, the rights to
all of which are being assigned hereunder, are described and listed in Schedule
1.11.b attached.
c. CUSTOMER CONTRACTS. All contracts, agreements, licenses,
and other commitments and arrangements, oral or written, with any person or
entity (including for-profit businesses, non-profit organizations, and
government entities) respecting the ownership, license, acquisition, design,
development, distribution, marketing, use, hosting or maintenance of computer
program code, analog recordings, related technical or user documentation, and
databases, arising out of the businesses in which I-Plicity has been engaged,
AND WHICH IOI SPECIFICALLY AGREES TO ACCEPT. EXCLUDED FROM THE ASSIGNMENT OF
CUSTOMER CONTRACTS ARE THOSE CUSTOMER CONTRACTS WHICH IOI DOES NOT ACCEPT.
REJECTION OF ASSIGNMENT OF CUSTOMER CONTRACTS MAY OCCUR FROM TIME TO TIME AS IOI
DEEMS APPROPRIATE, FOLLOWING COMPLETION OF DUE DILIGENCE BY IOI. Also included
are sales leads, teaming arrangements in process, hosting opportunities, and
application service provider software provision opportunities. All Customer
Contracts, the rights to all of which are being assigned hereunder, are
described and listed in Schedule 1.11.c. attached.
1.12 Assumption of Liabilities. IOI and I-Plicity hereby agree that, in
connection with the Assets being acquired by IOI from I-Plicity, I-Plicity shall
delegate to IOI those liabilities as set forth in Schedule 1.12 only, and IOI
agrees to accept and assume those liabilities. It is the intention of the
parties that IOI's assumption of liabilities is to be restricted to only those
liabilities that transfer in connection with assets being assigned. By way of
example only, Customer Contracts being assigned under this Agreement include
liabilities to the Customer. That liability is assumed by IOI in connection with
the asset being assigned to IOI hereunder. IOI WILL CONDUCT DUE DILIGENCE WITH
RESPECT TO LIABILITIES AND MAY REVOKE ITS PRIOR ACCEPTANCE OF DELEGATED
LIABILITIES IF IOI DETERMINES THAT ALL ASPECTS OF ANY GIVEN LIABILITY HAVE NOT
BEEN COMPLETELY DISCLOSED TO IOI.
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ARTICLE II
CLOSING
2.01 Time and Place of Closing. If not consummated simultaneously
herewith, the transactions contemplated by this Agreement shall be consummated
on or about October 4, 2003, at such place as the parties shall mutually agree
(the "Closing Date"). The time and place at which the transactions contemplated
hereby are consummated is hereinafter referred to as the "Closing".
2.02 Deliveries at Closing. At the Closing:
(a) The Shareholders shall cause the I-Plicity Common Stock to
be delivered to IOI, duly endorsed for transfer;
(b) Iceweb shall deliver, or provide irrevocable instructions
to issue and deliver, the Iceweb Shares;
(c) I-Plicity shall deliver the Assets to IOI;
(d) Iceweb shall pay to I-Plicity or its creditors, or forgive
prior advances, either at Closing or as the same become due, the sum of
$65,500.00;
(e) Employment Agreements for XXXXXXX X. XXXXX, XXXXXX XXXXXX,
XXXXXX XXXXXX, XXXXXXX X. XXXXXXX, XXXXX X. XXXXX, XXXX XXXXXX, XXXXXX XXXXXXX
AND XXXXXXXXXXX XXXXXX, in the form attached as Exhibit A.
(f) Incentive stock option Agreements XXXXXXX X. XXXXX, XXXXXX
XXXXXX, XXXXXX XXXXXX, XXXXXXX X. XXXXXXX, XXXXX X. XXXXX, XXXX XXXXXX, XXXXXX
XXXXXXX AND XXXXXXXXXXX XXXXXX, in the forms attached as Exhibit B.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF I-PLICITY AND THE SHAREHOLDERS
I-Plicity and the Shareholders, jointly and severally, hereby represent
and warrant to Iceweb as follows:
3.01 Legal Capacity of I-Plicity.
(a) I-Plicity has the legal capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
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(b) The execution and delivery of this Agreement by I-Plicity,
and the consummation by it of the transactions contemplated hereby, does not
violate or conflict with (i) any material terms of any organizational document
or any instrument, contractual restriction or commitment of any kind or
character to which I-Plicity is a party or by which it is bound, or (ii) any
requirement of law or any judgment, decree or order of any governmental or
regulatory authority to which I-Plicity is subject or by which I-Plicity or any
of its respective assets or properties is bound.
(c) This Agreement has been duly and validly executed by
I-Plicity, and constitutes a valid and binding obligation of I-Plicity
enforceable against I-Plicity in accordance with its terms except to the extent
that (i) such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) the availability of remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
3.02 Organization and Authority of I-Plicity. I-Plicity is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has all requisite corporate power and
authority to carry on its business as presently conducted and to own or lease
and to operate its properties. I-Plicity is qualified to transact business as a
foreign corporation in each jurisdiction wherein the failure to so qualify would
have a material adverse effect on the business, financial condition, results of
operations, assets or properties of I-Plicity (an "I-Plicity Material Adverse
Effect"). I-Plicity has no subsidiaries.
3.03 Capitalization. The authorized capital stock of I-Plicity consists
of 25,000 shares of I-Plicity Common Stock, of which 25,000 shares of Common
Stock are issued and outstanding on the date hereof. I-Plicity is not a party to
or bound by any options, calls, voting agreements, contracts, or commitments of
any character relating to any issued or unissued capital stock or any other
equity security issued or to be issued by I-Plicity. The issued and outstanding
I-Plicity Common Stock has been duly authorized and is validly issued, fully
paid and non-assessable and not subject to the preemptive or anti-dilution
rights of any person.
3.04 Consents and Approvals. This Agreement and the transactions
contemplated hereby have been duly authorized by the Board of Directors and by
the Shareholders. No approval, order or consent of, filing or registration with
or notice or payment to, any foreign, federal, state, county, local or other
governmental or regulatory body, and no other approval or consent of, or filing
with or notice or payment to, any other person is required by or with respect to
I-Plicity in connection with the execution and delivery by I-Plicity of this
Agreement and the consummation and performance by it of the transactions
contemplated hereby. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, and the performance by
I-Plicity of this Agreement in accordance with its terms and conditions will not
(a) conflict with or result in the breach or violation of any of the terms or
conditions of, or give rise to any acceleration of I-Plicity's obligations or
constitute (or with notice or lapse of time or both would constitute) a default
under (i) the Articles of Incorporation or By-Laws of I-Plicity, as the same
have been amended and/or restated from time to time (ii) any instrument,
contract or other material agreement by or to which I-Plicity is a party or by
or to which I-Plicity's assets or properties are bound or subject; (iii) any
statute, law or regulation of any
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jurisdiction or any order, writ, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding upon,
I-Plicity or the assets or properties of I-Plicity; or (iv) any license,
franchise, approval, certificate, permit or authorization applicable to
I-Plicity or any of I-Plicity's assets; or (b) result in the creation of any
lien, charge or encumbrance of any nature, upon the I-Plicity Shares or assets
or property of I-Plicity.
3.05 Financial Statements, Books and Records. The following I-Plicity
financial statements are attached hereto as Schedule 3.05: the unaudited balance
sheet of I-Plicity as of August 2003 (the "Balance Sheet"), and the related
unaudited statement of operations for the period then ended (the "Financial
Statements"). The Financial Statements are true and accurate and fairly
represent the financial position of I-Plicity as at such date and the results of
its operations for the period then ended, and have been prepared in accordance
with generally accepted accounting principles consistently applied, except for
the omission of footnotes or otherwise as indicated therein. Since the date of
the Balance Sheet there has not been:
(a) any change which could reasonably be expected to have an
I-Plicity Material Adverse Effect:
(b) any damage, destruction or loss which could reasonably be
expected to have an I-Plicity Material Adverse Effect;
(c) any declaration, setting aside or payment of any
distribution or with respect to any redemption or repurchase of I-Plicity's
capital stock; or
(d) any sale of an asset (other than in the ordinary course of
business) or any mortgage or pledge by I-Plicity of any properties or assets.
3.06 Litigation. Except as disclosed in Schedule 3.06 hereto, there is
no action, suit or proceeding pending or threatened, or any investigation, at
law or in equity, before any arbitrator, court or other governmental authority,
pending or threatened, nor any judgment, decree, injunction, award or order
outstanding, against or in any manner involving I-Plicity or any of I-Plicity's
properties or rights which (a) could reasonably be expected to have an I-Plicity
Material Adverse Effect, or (b) could reasonably be expected to prevent the
consummation of any of the transactions contemplated by this Agreement.
3.07 Taxes. I-Plicity has filed all tax returns that it was required to
file, and has paid all taxes indicated on such returns for such periods which
are due and payable as of the date hereof. All such tax returns were in all
respects true, complete and correct and filed on a timely basis. None of the
income tax returns filed by, on behalf of or with respect to I-Plicity is
currently the Subject of an audit, and no notice of a planned audit has been
received by I-Plicity.
3.08 Corporate Records. I-Plicity has granted Iceweb access to all the
tax, accounting, corporate and financial books and records relating to the
business of I-Plicity. Such books and records have been maintained on a current
basis, are true and complete in all material respects, and fairly reflect the
financial condition and results of operations of I-Plicity as of the dates
thereof and the periods ended. The minute books of I-Plicity contain complete
and accurate
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records of all meetings and other corporate actions of its Board of Directors
and stockholders and have been made available to Iceweb for review.
3.09 I-Plicity's Properties. I-Plicity has good and marketable title to
all its personal property, equipment, processes, patents copyrights, trademarks,
franchises, licenses and other properties and assets (except for items leased or
licensed to I-Plicity), including all property reflected in I-Plicity's
Financial Statements (except for assets reflected therein which have been sold
in the normal course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial statements of
I-Plicity), in each case free and clear of all liens, claims and encumbrances of
every kind and character, except as set for the in Schedule 3.09. I-Plicity has
no ownership interest in any real property. The assets and properties owned,
operated or leased by I-Plicity and used in its business are in good operating
condition, reasonable wear and tear excepted, and suitable for the uses for
which intended.
3.10 Insurance. Schedule 3.10 contains an accurate and complete list
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers compensation,
products liability, property, and other forms of insurance or indemnity the
bonds held by I-Plicity. I-Plicity is not in default with respect to any
provisions of any such policy or indemnity the Shareholders and has not failed
to give any notice or present any claim hereunder in due and timely fashion. All
policies of insurance and the bonds are: (1) in full force and effect; (2) are
sufficient for compliance by I-Plicity with all requirements of law and of all
agreements and instruments to which I-Plicity is a party; (3) are valid,
outstanding and enforceable; (4) provide adequate insurance coverage for the
assets, business and operations of I-Plicity in amounts at least equal to
customary coverage in I-Plicity's industry; (5) will remain in full force and
effect through the Closing; and (6) will not be affected by, and will terminate
or lapse by reason of, the transactions contemplated by this Agreement.
3.11 Transactions with Certain Persons. Except as disclosed in Schedule
3.11, I-Plicity has no outstanding agreement, understanding, contract, lease,
commitment, loan or other arrangement with any officer, director or shareholder
of I-Plicity or any relative of any such person, or any corporation or other
entity in which such person owns beneficial interest.
3.12 Material Contracts. I-Plicity has no purchase, sale, commitment,
or other contract, the breach or termination of which would have an I-Plicity
Materially Adverse Effect on the financial condition of I-Plicity.
3.13 Employment Matters. Schedule 3.13 contains a list of all officers,
their contracts, base salaries, accrued vacation pay, sick pay, and severance
pay. I-Plicity has not incurred any unfunded deficiency or liability within the
meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), has
not incurred any liability to the Pension Benefit Guaranty Corporation
established under ERISA in connection with any employee benefit plan and has no
outstanding obligations or liabilities under any employee benefit plan.
I-Plicity has not been a party to a "prohibited transaction," which would
Subject I-Plicity to any tax or penalty. There is no collective bargaining
agreement or negotiations therefore, labor grievance or arbitration proceeding
against I-Plicity pending or threatened, and to the knowledge of I-Plicity,
there are no union organizing activities currently pending or threatened against
or involving I-Plicity.
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3.14 Authorizations. I-Plicity has no licenses, permits, approvals and
other authorizations from any governmental agencies and any other entities that
are necessary for the conduct of its business except as set for the in Schedule
3.14, which contains a list of all licenses, permits approvals, and other
authorizations, as well as a list of all copyrights, patents, trademarks, trade
names, service marks, franchises, licenses and other permits, each of which is
valid and in full force and effect.
3.15 Compliance with Laws. I-Plicity is not in violation of any
federal, state local or other law, ordinance, rule or regulation applicable to
its business, and has not received any actual or threatened complaint, citation
or notice of violation or investigation from any governmental authority.
3.16 Compliance with Environmental Laws. I-Plicity is in Compliance
with all applicable pollution control and environmental laws, rules and
regulations. I-Plicity has no environmental licenses, permits and other
authorizations relative to compliance with environmental laws, rules and
regulations.
3.17 No Litigation. There are no actions, suits, claims, complaints or
proceedings pending or threatened against I-Plicity, at law or in equity, or
before or by any governmental department, commission, court, board, bureau,
agency or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders, judgments or
decrees or any governmental authority outstanding, which specifically apply to
I-Plicity or any of its assets.
3.18 Validity. All contracts, agreements, leases and licenses to which
I-Plicity is a party or by which it or any of its properties or assets are bound
or affected, are valid and in full force and effect; and no breach or default
exists, or upon the giving of notice or lapse of time, or both, would exist, on
the part of I-Plicity or by any other party thereto.
3.19 No Brokers. Neither I-Plicity nor The Shareholders is a party to
any agreement pursuant to which I-Plicity or Iceweb will become obligated to pay
a commission to any person as a result of consummation of the transactions
contemplated hereby.
3.20 Information on the Shareholders. Except as set forth on Schedule
3.20, the Shareholders each represent that they are each an "accredited
investor," as such term is defined in Regulation D promulgated by the Act, are
experienced in investments and business matters, has made investments of a
speculative nature and, with its representatives, have such knowledge and
experience in financial, tax and other business matters as to enable them to
utilize the information made available by Iceweb to evaluate the merits and
risks of and to make an informed investment decision with respect to this
Agreement, which represents a speculative investment. The Shareholders are able
to bear the risk of such investment for an indefinite period and to afford a
complete loss thereof.
3.21 Ownership of I-Plicity Shares and Authorization of Agreement. Each
of the Shareholders represents that he is the sole owner of record and
beneficially owns all of the shares
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of capital stock of I-Plicity attributed to him in Exhibit A, all of which
shares are owned free and clear of all rights, claims, liens and encumbrances,
and have not been sold, pledged, assigned or otherwise transferred except
pursuant to this Agreement. There are no outstanding subscriptions, rights,
options, warrants or other agreements obligating either I-Plicity or the
Shareholders to issue, sell or transfer any stock or other securities of
I-Plicity. The Shareholders have the power to enter into this Agreement and to
carry out the obligations hereunder This Agreement has been duly executed by the
Shareholders and constitutes the valid and binding obligation of the
Shareholders and is enforceable against the Shareholders in accordance with its
terms.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ICEWEB
Iceweb hereby represents and warrants to I-Plicity and the Shareholders as
follows:
4.01 Legal Capacity of Iceweb.
(a) Iceweb has the legal capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by Iceweb,
and the consummation of the transactions contemplated hereby, do not violate or
conflict with (i) any material terms of any organizational document or any
instrument, contractual restriction or commitment of any kind or character to
which Iceweb a party or by which it is bound, or (ii) any requirement of law or
any judgment, decree or order of any governmental or regulatory authority to
which Iceweb is subject or by which Iceweb or any of its respective assets or
properties is bound.
(c) This Agreement has been duly and validly executed by
Iceweb, and constitutes a valid and binding obligation of Iceweb enforceable
against Iceweb in accordance with its terms except to the extent that (i) such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and (ii) the availability of remedies, including specific performance, is
Subject to the discretion of the court before which any proceeding therefor may
be brought.
4.02 Organization and Authority of Iceweb. Iceweb is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all requisite corporate power and
authority to carry on its business as presently conducted and to own or lease
and to operate its properties. Iceweb is qualified to transact business as a
foreign corporation in each jurisdiction wherein the failure to so qualify would
have a material adverse effect on the business, financial condition, results of
operations, assets or properties of Iceweb (a "Iceweb Material Adverse Effect").
4.03 Capitalization. The authorized capital stock of Iceweb consists of
100,000,000 shares of Common Stock, of which 31,053,000 shares are issued and
outstanding on the date hereof and 1,000,000 shares of Preferred Stock, no
shares of which are issued and outstanding.
11
The Iceweb Shares have been duly authorized and, upon issuance as contemplated
hereby, will be validly issued, fully paid and non-assessable and not Subject to
the preemptive or anti-dilution rights of any person.
4.04 Consents and Approvals. This Agreement and the transactions
contemplated hereby have been duly authorized by the Board of Directors. No
approval, order or consent of, filing or registration with or notice or payment
to, any foreign, federal, state, county, local or other governmental or
regulatory body, and no approval or consent of, or filing with or notice or
payment to, any other person is required by or with respect to Iceweb in
connection with the execution and delivery by Iceweb of this Agreement and its
consummation and performance of the transactions contemplated hereby. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, and the performance by Iceweb of this Agreement in
accordance with its terms and conditions will not (a) conflict with or result in
the breach or violation of any of the terms or conditions of, or give rise to
any acceleration of Iceweb's obligations or constitute (or with notice or lapse
of time or both would constitute) a default under (i) the Certificate of
Incorporation or By-Laws of Iceweb (ii) any material instrument, contract or
other agreement by or to which Iceweb is a party or by or to which Iceweb's
assets or properties are bound or Subject; (iii) any statute, law or regulation
of any jurisdiction or any order, writ, judgment, injunction, award or decree of
any court, arbitrator or governmental or regulatory body against, or binding
upon, Iceweb or the assets or properties of Iceweb; or (iv) any license,
franchise, approval, certificate, permit or authorization applicable to Iceweb
or any of the its assets; or (b) result in the creation of any lien, charge or
encumbrance of any nature, upon the assets or property of Iceweb.
4.05 Filings. The Common Stock of Iceweb is registered under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Iceweb has filed with the United States Securities and Exchange Commission
("SEC") all reports required to be filed by it under the Exchange Act (the "SEC
Filings"), and Iceweb is current in its filing obligations under the Exchange
Act. The cumulative SEC Filings are true, complete and accurate in all material
respects.
4.06 Litigation. There is no action, suit or proceeding pending or
threatened, or any investigation, at law or in equity, before any arbitrator,
court or other governmental authority, pending or threatened, nor any judgment,
decree, injunction, award or order outstanding, against or in any manner
involving Iceweb or Iceweb or any of their respective properties or rights which
(i) could reasonably be expected to have an Iceweb Material Adverse Effect, or
(ii) could reasonably be expected to prevent the consummation of any of the
transactions contemplated by this Agreement.
4.07 Taxes. Iceweb has filed all tax returns that it was required to
file, and has paid all taxes indicated on such returns for such periods which
are due and payable as of the date hereof. All such tax returns were in all
respects true, complete and correct and filed on a timely basis. None of the
income tax returns filed by, on behalf of or with respect to Iceweb is currently
the Subject of an audit, and no notice of a planned audit has been received by
or on behalf of Iceweb.
12
4.08 Corporate Records. Iceweb has provided I-Plicity access to all the
tax, accounting, corporate and financial books and records relating to Iceweb.
Such books and records have been maintained on a current basis, are true and
complete and fairly reflect the financial condition and results of operations of
Iceweb as of the dates thereof and the periods ended.
4.09 No Brokers. Iceweb is not a party to any agreement pursuant to
which I-Plicity, the Shareholders, Iceweb, or IOI will become obligated to pay a
commission to any person as a result of consummation of the transactions
contemplated hereby and any action by Iceweb.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF IOI
IOI hereby represents and warrants to I-Plicity and the Shareholders,
as of the date of IOI's incorporation in the Commonwealth of Virginia, as the
context requires, as follows:
5.01 Legal Capacity of IOI.
(a) IOI is a Virginia corporation being formed. IOI by its
promoter Xxxx Xxxxxxxxxx, has the legal capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by IOI, and
the consummation of the transactions contemplated hereby, do not violate or
conflict with (i) any material terms of any organizational document or any
instrument, contractual restriction or commitment of any kind or character to
which IOI a party or by which it is bound, or (ii) any requirement of law or any
judgment, decree or order of any governmental or regulatory authority to which
IOI is subject or by which IOI or any of its respective assets or properties is
bound.
(c) This Agreement has been duly and validly executed by IOI,
and constitutes a valid and binding obligation of IOI enforceable against IOI in
accordance with its terms except to the extent that (i) such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) the
availability of remedies, including specific performance, is Subject to the
discretion of the court before which any proceeding therefor may be brought.
4.02 Organization and Authority of IOI. IOI is a corporation being
formed.
4.03 Capitalization. The authorized capital stock of IOI consists of
5,000 shares of Common Stock, of which 1,000 shares will be issued and
outstanding following formation of IOI.
4.04 Consents and Approvals. This Agreement and the transactions
contemplated hereby have been duly authorized by the Board of Directors. No
approval, order or consent of, filing or registration with or notice or payment
to, any foreign, federal, state, county, local or other governmental or
regulatory body, and no approval or consent of, or filing with or notice or
13
payment to, any other person is required by or with respect to IOI in connection
with the execution and delivery by IOI of this Agreement and its consummation
and performance of the transactions contemplated hereby. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, and the performance by IOI of this Agreement in accordance with its
terms and conditions will not (a) conflict with or result in the breach or
violation of any of the terms or conditions of, or give rise to any acceleration
of IOI's obligations or constitute (or with notice or lapse of time or both
would constitute) a default under (i) the Articles of Incorporation or By-Laws
of IOI (ii) any material instrument, contract or other agreement by or to which
IOI is a party or by or to which IOI's assets or properties are bound or
Subject; (iii) any statute, law or regulation of any jurisdiction or any order,
writ, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, IOI or the assets or
properties of IOI; or (iv) any license, franchise, approval, certificate, permit
or authorization applicable to IOI or any of the its assets; or (b) result in
the creation of any lien, charge or encumbrance of any nature, upon the assets
or property of IOI.
4.05 Litigation. There is no action, suit or proceeding pending or
threatened, or any investigation, at law or in equity, before any arbitrator,
court or other governmental authority, pending or threatened, nor any judgment,
decree, injunction, award or order outstanding, against or in any manner
involving IOI or IOI or any of their respective properties or rights which (i)
could reasonably be expected to have an IOI Material Adverse Effect, or (ii)
could reasonably be expected to prevent the consummation of any of the
transactions contemplated by this Agreement.
4.06 Taxes. IOI has filed all tax returns that it was required to file,
and has paid all taxes indicated on such returns for such periods which are due
and payable as of the date hereof. All such tax returns were in all respects
true, complete and correct and filed on a timely basis. None of the income tax
returns filed by, on behalf of or with respect to IOI is currently the Subject
of an audit, and no notice of a planned audit has been received by or on behalf
of IOI.
4.07 No Brokers. IOI is not a party to any agreement pursuant to which
I-Plicity, the Shareholders or IOI will become obligated to pay a commission to
any person as a result of consummation of the transactions contemplated hereby
and any action by IOI.
ARTICLE VI
COVENANTS OF I-PLICITY AND THE SHAREHOLDERS AND ICEWEB
6.01 I-Plicity and the Shareholders covenant and agree that from the
date hereof through and after Closing without the prior written consent of
Iceweb:
(a) Ordinary Course of Business. I-Plicity will operate the
business of I-Plicity only in the ordinary course and will use its best efforts
to preserve I-Plicity's business, origination, goodwill and relationships with
persons having business dealings with them.
14
(b) Maintain Properties. I-Plicity will maintain all of
I-Plicity's properties in good working order, repair and condition (reasonable
wear and use excepted) and cause I-Plicity to take all steps reasonably
necessary to maintain in full force and effect its patents, trademarks, service
marks, trade names, brand names, copyrights and other intangible assets.
(c) Compensation. I-Plicity will not (i) enter into or alter
any employment agreements; (ii) grant any increase in compensation other than
normal merit increases consistent with I-Plicity's general prevailing practices
to any officer or employee; or (iii) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(d) No Indebtedness. I-Plicity will create, incur, assume
guarantee or otherwise become liable with respect to any obligation for borrowed
money, indebtedness, capitalized lease or similar obligation, except in the
ordinary course of business consistent with past practices where the entire net
proceeds thereof are deposited with and used by and in connection with the
business of I-Plicity.
(e) No Disposition on Encumbrance. Except in the ordinary
course of business consistent with past practice, I-Plicity will not (i) dispose
of or encumber any of its properties and assets, (ii) discharge or satisfy any
lien or encumbrance or pay any obligation or liability (fixed or contingent)
except for previously scheduled repayment of debt, (iii) cancel or compromise
any debt or claim, (iv) transfer or grant any rights under any concessions,
leases, licenses, agreements, patents, inventions, proprietary technology or
process, trademarks, service marks or copyrights, or with respect to any
know-how, or (v) enter into or modify in any material respect or terminate any
existing license, lease, or contract.
(f) No Securities Issuances. Neither I-Plicity nor the
Shareholders will issue any shares of any class of capital stock, or enter into
any contract, option, warrant or right calling for the issuance of any such
shares of capital stock, or create or issue any securities convertible into any
securities of I-Plicity except for the transactions contemplated herein.
(g) Capital Commitments. I-Plicity will not make or commit to
make any capital expenditure, capital addition or capital improvement.
(h) Notice of Change. I-Plicity will promptly advise Iceweb in
writing of any I-Plicity Material Adverse Change, or the occurrence of any event
which involves any Icewebstantial possibility of a material adverse change, in
the business, financial condition, results of operations, assets, liabilities or
prospects of I-Plicity.
ARTICLE VII
CONDITIONS PRECEDENT TO THE
OBLIGATION OF ICEWEB AND IOI TO CLOSE
The obligation of Iceweb and IOI to close the transactions contemplated
hereby is Subject to the fulfillment by I-Plicity and the Shareholders prior to
Closing of each of the following conditions, which may be waived in whole or in
part by Iceweb and IOI:
15
7.01 Compliance with Representations, Warranties and Covenants. The
representations and warranties and covenants of I-Plicity and the Shareholders
contained in this Agreement shall have been true and correct when made.
7.02 No Adverse Change. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of I-Plicity.
7.03 No Legal Proceedings. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the transactions
contemplated hereby.
7.04 Documents to be Delivered by I-Plicity. I-Plicity or the
Shareholders shall have delivered the following documents to IOI:
(a) Stock certificates representing the I-Plicity Common Stock
being transferred hereunder, duly endorsed or in blank or accompanied by duly
executed stock powers.
(b) All corporate and other records of applicable to I-Plicity
including, but not limited to, current and up to date minute books, stock
transfer books and registers, books or accounts, leases and material contracts.
7.05 Assets to be Delivered by I-Plicity. I-Plicity or the Shareholders
shall have delivered the Assets to IOI and the Assets shall be as represented
hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF I-PLICITY AND THE SHAREHOLDERS TO CLOSE
The obligation of I-Plicity and the Shareholders to close the
transactions is subject to the fulfillment prior to Closing of each of the
following conditions, any of which may be waived, in whole or in part, by
I-Plicity:
8.01 Compliance with Representations, Warranties and Covenants. The
representations and warranties made by Iceweb and IOI in this Agreement shall
have been true and correct when made and shall be true and correct in all
material respects at the Closing with the same force and effect as if made at
the Closing, and Iceweb shall have performed all agreements, covenants and
conditions required to be performed by Iceweb prior to the Closing.
8.02 No Legal Proceedings. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
16
8.03 Issuance of Iceweb Shares. Iceweb shall issue 1,394,004 shares and
deliver the certificates representing such shares.
8.04 Deliveries. Iceweb shall enter into the agreements contemplated by
Section 2.02(e) and Section 2.02(f).
ARTICLE IX
MODIFICATION, WAIVERS, TERMINATION AND EXPENSES
9.01 Modifications. Iceweb, IOI, I-Plicity and the Shareholders may
amend, modify or supplement this Agreement in any manner as they may mutually
agree in writing.
9.02 Waivers. Iceweb and I-Plicity and the Shareholders may, in
writing, extend the time for or waive compliance by the other with any of the
covenants or conditions of the other contained herein.
9.03 Termination by Abandonment. This Agreement may be terminated
before the Closing:
(a) By the mutual consent of Iceweb, IOI, I-Plicity and the
Shareholders;
(b) By Iceweb and IOI, if the representations and warranties
of I-Plicity and the Shareholders set forth herein shall not be accurate, or
conditions precedent set forth herein shall not have been satisfied in all
material respects;
(c) By I-Plicity and the Shareholders, if the representations
and warranties of Iceweb set forth herein shall not be accurate, or conditions
precedent set forth herein shall not have been satisfied in all material
respects; and
(d) In the event of any such termination, each party shall
bear their own expenses.
ARTICLE X
INDEMNIFICATION
10.01 Indemnification by Shareholders. The Executive Management
Shareholders hereby indemnify and hold Iceweb harmless from and against any and
all damages, losses, liabilities, obligations, costs or expenses incurred by
Iceweb and arising out of the breach of any representation or warranty to the
extent such breach results in a material adverse effect to the business and
operation of Iceweb taken as a whole or covenant of I-Plicity or the
Shareholders hereunder, or failure to perform any covenant or obligation
required to be performed by them hereunder. Executive Management Shareholders
means Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx.
17
10.02 Indemnification by Iceweb. Iceweb hereby indemnifies and holds
I-Plicity and the Shareholders harmless from and against any and all damages,
losses, liabilities, obligations, costs or expenses incurred by I-Plicity and
arising out of the breach of any representation or warranty of Iceweb hereunder,
or Iceweb's failure to perform any covenant or obligation required to be
performed by either of them hereunder.
10.03 Time for Assertion. No party to this Agreement shall have any
liability (for indemnification or otherwise) with respect to any representation,
warranty or covenant or obligation to be performed and complied hereunder,
unless notice of any such liability is provided on or before 12 months from the
date hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01 Waiver. Any party hereto may with respect to any other party
hereto (a) extend the time for the performance of any of the obligations or
other acts, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
11.02 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made (a) when delivered personally,
including by courier service, (b) three business days following deposit in the
United Sates mail, certified mail, return receipt requested, or (c) when
transmitted by facsimile provided that electronic confirmation of receipt is
retained by the party transmitting such facsimile. The addresses to which
notices are to be provided are as follows:
If to Iceweb: Iceweb, INC.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, President
Facsimile: (000) 000-0000
If to I-Plicity: I-Plicity
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile: (___) ___-____
If to the Shareholders: To the respective shareholder addresses
18
Any party may change the address to which notice is to be provided to it by
written notice to the other party hereto delivered pursuant to this Section.
11.03 Governing Law. This Agreement and the rights and duties of the
parties hereto shall be construed and determined in accordance with the laws of
the Commonwealth of Virginia, without regard to the choice of laws provisions
thereof.
11.04 Successors and Assigns. This Agreement shall be binding upon the
parties and their successors and assigns and shall inure to the benefit of the
other parties and successors and assigns.
11.05 Counterparts. This Agreement may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one instrument.
11.06 Entire Agreement. This Agreement constitutes the entire
understanding of the parties with respect to transactions contemplated hereby,
and all prior understandings with respect thereto, whether written or oral,
shall be of no force and effect.
11.07 Partial Invalidity. If any term of this Agreement shall be held
to be invalid or unenforceable, such term shall be deemed to be severable and
the validity of the other terms of this Agreement shall in no way be affected
thereby.
11.08 Headings. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
11.09. Promoter Liability. IOI is executing this Agreement by Xxxx
Xxxxxxxxxx, IOI's promoter. Following the formation of IOI as a Virginia
corporation, all promoter liability of Xxxx Xxxxxxxxxx shall be extinguished.
Thereafter, IOI shall be considered the party to this Agreement and Xxxx
Xxxxxxxxxx shall be released of all promoter liability.
19
IN WITNESS WHEREOF, the undersigned have executed this Asset and Stock
Purchase Agreement, effective as of the 4th day of October, 2003.
IOI:
ICEWEB ONLINE, INC.,
a Virginia corporation being formed
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxxxx, Promoter
ICEWEB:
ICEWEB, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxxxx, Chairman and CEO
I-PLICITY:
I-PLICITY, INC.,
a Virginia corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx, President/CEO
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx, CTO
By: /s/ Xxxxxx Xxxxxx Xx.
----------------------------------------
Xxxxxx Xxxxxx Xx. Chief Scientist
By: /s/ Xxxxxx Xxxxxx Xx.
----------------------------------------
Xxxxxxx X. Xxxxxxx COO
20
SHAREHOLDERS:
I-PLICITY SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx Xx.
--------------------------------------------
Xxxxxx Xxxxxx Xx.
/s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxxx
--------------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxxxxxx Xxxxxx
--------------------------------------------
Xxxxxxxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
--------------------------------------------
Xxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ J.P. Xxxxx Xxxxx
--------------------------------------------
J.P. Xxxxx Xxxxx
LIEBHABER & ASSOCIATES
By: /s/ Liebhaber & Associates
----------------------------------------
21
