EXHIBIT 10.39
ASSET PURCHASE AGREEMENT
BY AND AMONG
INTERACTIVE MAGIC, INC.,
VIRTUAL BUSINESS DESIGNS, INC.
DBA THE GAMERS NET
AND
XXXXX XXXXX
August 27, 1999
TABLE OF CONTENTS
1. Definitions
2. Basic Transaction
(a) Purchase and Sale of Assets
(b) Assumption of Liabilities
(c) Purchase Price
(d) The Closing
(e) Deliveries at the Closing
(f) Allocation
3. Representations and Warranties of the Seller
(a) Organization of the Seller
(b) Authorization of Transaction
(c) Noncontravention
(d) Brokers' Fees
(e) Title to Assets
(f) Absence of Material Events
(g) Undisclosed Liabilities
(h) Legal Compliance
(i) Tax Matters
(j) Intellectual Property
(k) Contracts
(l) Powers of Attorney
(m) Insurance
(n) Litigation
(o) Product Warranty
(p) Product Liability
(q) Disclosure
(r) Investment
(s) Year 2000 Compliance
4. Representations and Warranties of the Buyer
(a) Organization of the Buyer
(b) Authorization of Transaction
(c) Noncontravention
(d) Brokers' Fees
5. Post-Closing Covenants
(a) General
(b) Litigation Support
(c) Transition
(d) Confidentiality
(e) Buyer's Acquisition Shares
6. Remedies for Breaches of This Agreement
(a) Survival of Representations and Warranties
(b) Indemnification Provisions for Benefit of the Buyer
(c) Indemnification Provisions for Benefit of the Seller
(d) Matters Involving Third Parties
(e) Determination of Adverse Consequences
(f) Other Indemnification Provisions
7. Holdback Shares
(a) Purpose
(b) Adjustments
(c) Indemnification
(d) Termination of Holdback
8. Miscellaneous
(a) Press Releases and Public Announcements
(b) No Third-Party Beneficiaries
(c) Entire Agreement
(d) Succession and Assignment
(e) Counterparts
(f) Headings
(g) Notices
(h) Governing Law
(i) Amendments and Waivers
(j) Severability
(k) Expenses
(l) Construction
(m) Incorporation of Exhibits and Schedules
(n) Specific Performance
(o) Submission to Jurisdiction
(p) Bulk Transfer Laws
(q) Sales, Transfer and Documentary Taxes, etc.
Disclosure Schedule
Schedule of Assigned Contracts
Exhibit A--Form of Xxxx of Sale and Assignment
Exhibit B--Form of Assumption
Exhibit C--Consulting Agreement
Exhibit D - Registration Rights Agreement
Exhibit E--Allocation Schedule
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
August 27, 1999, by and among Interactive Magic, Inc., a North Carolina
corporation (the "Buyer"), Virtual Business Designs, Inc. (d/b/a The Gamers
Net), a Delaware corporation (the "Seller"), the sole owner of the Gamers Net
web site, located at xxx.xxxxxxxxx.xxx on the World-Wide Web, including its
related business (the "Web Site"), and Xxxxx Xxxxx, the sole shareholder of
Seller ("Shareholder"). The Buyer, the Seller and the Shareholder are referred
to collectively herein as the "Parties".
This Agreement contemplates a transaction in which the Buyer will
purchase certain of the assets of the Seller in return for Common Stock of the
Buyer.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Acquired Assets" means all right, title and interest in and to all of
the tangible and intangible assets of the Seller relating to the Web Site,
including the following items to the extent related to the Web Site:
(a) all current, unreleased or Beta versions of the software
relating to the Web Site, in both object and source code format,
including (but not limited to) games, game scenarios, game patches,
opponent locating and matching software and databases, bulletin boards,
chat programs, or other message posting systems;
(b) all customer names, lists, addresses, contact names and
registered user or player lists;
(c) Intellectual Property, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and
rights thereunder, remedies against infringements thereof, and rights
to protection of interests therein under the laws of all jurisdictions;
(d) the agreements, contracts, instruments, Security
Interests, other similar arrangements, and rights thereunder as listed
on the Schedule of Assigned Contracts (if any) attached hereto;
(e) claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment;
(f) franchises, approvals, permits, licenses, orders,
registrations, certificates and similar rights obtained from
governments and governmental agencies; and
(g) books, records, ledgers, files, documents, correspondence,
lists, creative materials, advertising and promotional materials,
studies, reports, scenario archives, articles, reviews, electronic
message board content, and other printed or written materials;
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Assigned Contracts" means the agreements, contracts, leases, licenses
and other arrangements being assigned to the Buyer hereunder, if any, as set
forth on the Schedule of Assigned Contracts attached hereto.
"Assumed Liabilities" means all obligations of the Seller under the
Assigned Contracts, including up to $6,000 of liabilities as set forth on the
Schedule of Assigned Contracts. The Assumed Liabilities specifically shall
exclude the Retained Liabilities.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Buyer's Acquisition Shares" means collectively the shares of the
Buyer's Common Stock issuable to the Seller in connection with the Buyer's
acquisition of the Acquired Assets pursuant to this Agreement.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date" has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of the Seller relating to the Web Site that is not
already generally available to the public.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
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"Financial Statements" has the meaning set forth in Section 3(f) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in Section 6(d) below.
"Indemnifying Party" has the meaning set forth in Section 6(d) below.
"Intellectual Property" means (a) all inventions (whether 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, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) 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, subscriber or user lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer
software (including web pages, game scenarios and patches, data and related
documentation) used independently or in conjunction with other programs, (g) all
registered or licensed domain names (including "xxx.xxxxxxxxx.xxx"), IP
addresses, and email addresses (including all those using the "@xxxxxxxxx.xxx"
suffix), (h) other proprietary rights, and (i) all copies and tangible
embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Process Agent" has the meaning set forth in Section 8(o) below.
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"Purchase Price" has the meaning set forth in Section 2(c) below.
"Retained Liabilities" means, without limitation, all of the following
liabilities being retained by the Seller:
(i) any Liability of the Seller for unpaid Taxes;
(ii) any Liability of the Seller for income, transfer, sales,
use, and other Taxes arising in connection with the consummation of the
transactions contemplated hereby (including any income Taxes arising
because the Seller is transferring the Acquired Assets);
(iii) any obligation of the Seller to indemnify any Person by
reason of the fact that such Person was an employee, independent
contractor, or agent of the Seller or was serving at the request of the
Seller as a partner, trustee, director, officer, employee, or agent of
another entity (whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such indemnification is pursuant to any
statute, charter document, bylaw, agreement, or otherwise);
(iv) any Liability of the Seller for costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby;
(v) any Liability relating to the ownership or operation of
the Web Site prior to Closing (except any Liability specifically
identified as an Assumed Liability as defined herein); and
(vi) any Liability or obligation of the Seller under this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest.
"Seller" has the meaning set forth in the preface above.
"Shareholder" has the meaning set forth in the preface above.
"Tax(es)" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use,
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transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 6(d) below.
"Web Site" has the meaning set forth in the preface above.
2. BASIC TRANSACTION.
(a) Purchase and Sale of Assets. On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell, transfer, convey and deliver to
the Buyer, all of the Acquired Assets at the Closing for the
consideration specified below in this Section 2.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible only for the Assumed Liabilities (if any) at the Closing.
The Buyer will not assume or have any responsibility, however, with
respect to any other obligation or Liability of the Seller or the Web
Site not specifically included within the definition of Assumed
Liabilities.
(c) Purchase Price. The Buyer agrees to issue to the Seller
one hundred seven thousand one hundred forty-three (107,143) shares of
the Buyer's Common Stock (the "Purchase Price"). Ten percent (10%) of
the Buyer's Common Stock included in the Purchase Price will be held
back pursuant to Section 7 (the "Holdback Shares").
(i) No fraction of a share of the Buyer's Common
Stock will be issued as part of the Purchase Price, but in
lieu thereof the Seller will receive from the Buyer an amount
of cash (rounded to the nearest whole cent) equal to the
product of (i) such fraction multiplied by (ii) the average of
the closing price per share of the Buyer's Common Stock on the
National Association of Securities Dealers Automated Quotation
System ("Nasdaq") as reported in THE WALL STREET JOURNAL for
the twenty (20) trading days prior to the date hereof.
(ii) The parties acknowledge and agree that the
Buyer's Acquisition Shares and the transactions contemplated
under this Agreement are and will be subject to the applicable
federal and state securities laws and regulations.
(iii) Promptly after the Closing Date, the Holdback
Shares will be delivered to the Buyer to be held pursuant to
Section 7.
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(d) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place simultaneous with
the execution of this Agreement at the offices of Xxxxxx Xxxxxxx Xxxxx
& Xxxxxx, LLP in Raleigh, North Carolina, commencing at 9:00 a.m. local
time or such other date as the Parties may mutually determine (the
"Closing Date").
(e) Deliveries at the Closing. At the Closing,
(i) the Seller will execute and deliver to the Buyer
(A) the Xxxx of Sale and Assignment in the form attached
hereto as Exhibit A and (B) such other instruments of sale,
transfer, conveyance and assignment as the Buyer and its
counsel reasonably may request;
(ii) the Buyer will execute and deliver to the Seller
(A) an assumption in the form attached hereto as Exhibit B and
(B) such other instruments of assumption as the Seller and its
counsel reasonably may request;
(iii) the Seller shall deliver to the Buyer UCC-3
termination statements signed by any party with a Security
Interest in any of the Acquired Assets in such form that will
permit the Buyer to terminate such interests of record;
(iv) the Seller shall deliver to the Buyer signed
consents and releases from any third parties whose consent or
release is required in connection with consummation of the
transactions contemplated by this Agreement;
(v) the Buyer will deliver to the Seller a copy of
its letter to the Buyer's stock transfer agent, authorizing
and directing the issuance of the Buyer's Acquisition Shares
issuable pursuant to Section 2(c) above (less the Holdback
Shares to be held by the Buyer) and otherwise in accordance
with the provisions of this Agreement;
(vi) the Buyer and the Shareholder shall have entered
into a Consulting Agreement with respect to the ongoing work
to be performed on the Web Site by the Seller in the form
attached hereto as Exhibit C (the "Consulting Agreement"); and
(vii) the Buyer and the Seller shall have entered
into a Registration Rights Agreement with respect to Seller's
registration rights in the Buyer's Acquisition Shares in
substantially the form of Exhibit D (the "Registration Rights
Agreement").
(f) Allocation. The Parties agree to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for
all purposes (including financial accounting and tax purposes) in
accordance with the allocation schedule attached hereto as Exhibit E.
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(g) Forfeiture.
(i) In the event that the Buyer is forced or elects
to declare bankruptcy, thus terminating the business, within
the initial twenty-four (24) months of the Consulting
Agreement period associated with this agreement, all rights
and property purchased within and by the terms of this
agreement will be forfeited and returned to the Seller, to
include intellectual property. Additional property both
physical and intellectual, acquired, purchased or developed
after the signing of this contract, for the purpose of
maintaining and developing the website/property, will remain
the property of the Buyer.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER.
The Seller and the Shareholder jointly and severally represent and
warrant to the Buyer that the statements contained in this Section 3 are correct
as of the date of this Agreement and as of the Closing Date, except as set forth
in the disclosure schedule accompanying this Agreement and initialed by the
Parties (the Disclosure Schedule). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 3.
(a) Good Standing of the Seller. The Seller is a corporation
duly incorporated, validly existing and in good standing under the laws
of the State of Delaware and is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where such
qualification is required, except where such failure to be qualified
would not have a material adverse effect on the Web Site.
(b) Authorization of Transaction. The Seller has full
corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. The execution, delivery and
performance of this agreement by the Seller have been duly and validly
authorized by all necessary corporate and shareholder action. This
Agreement constitutes the valid and legally binding obligation of the
Seller, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions referred
to in Section 2 above), will (i) conflict with or result in a breach of
the charter or bylaws of the Seller, (ii) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or
court to which the Seller or Web Site is subject or (iii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to
which the Seller or the Web Site is a party or by which either of them
is bound or to which any of their assets is subject (or result in the
imposition of any Security Interest upon any of their assets). Neither
the Seller nor the Web Site needs to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or
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governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers' Fees. The Seller has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Buyer could become liable or obligated.
(e) Title to Assets. The Seller has good and marketable title
to the Acquired Assets, free and clear of all Security Interests or
restrictions on transfer.
(f) Absence of Material Events. Since the date of the Web
Site's formation, there has not been any material adverse change in the
business, financial condition, operations, results of operations or
future prospects of the Seller or Web Site relating to the Acquired
Assets. Without limiting the generality of the foregoing, since that
date through the Closing Date:
(i) the Seller has not sold, leased, licensed,
transferred or assigned any of the Acquired Assets;
(ii) the Seller has not entered into any agreement,
contract, lease or license (or series of related agreements,
contracts, leases and licenses) relating to the Acquired
Assets either involving more than $5,000 or outside the
Ordinary Course of Business;
(iii) no party has accelerated, terminated, modified
or cancelled any agreement, contract, lease or license (or
series of related agreements, contracts, leases and licenses)
relating to the Acquired Assets involving more than $5,000 to
which the Seller is a party or by which it is bound;
(iv) the Seller has not imposed any Security Interest
upon any of the Acquired Assets;
(v) the Seller has not cancelled, compromised, waived
or released any right or claim (or series of related rights
and claims) relating to the Acquired Assets either involving
more than $5,000 or outside the Ordinary Course of Business;
(vi) the Seller has not granted any license or
sublicense of any rights under or with respect to any
Intellectual Property relating to the Acquired Assets;
(vii) there has been no change made or authorized in
the Seller's ownership and complete control of the Web Site;
(viii) the Seller has not experienced any damage,
destruction or loss (whether or not covered by insurance) to
the Acquired Assets;
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(ix) there has not been any other material
occurrence, event, incident, action, failure to act or
transaction outside the Ordinary Course of Business involving
the Acquired Assets; and
(x) the Seller has not committed to any of the
foregoing.
(g) Undisclosed Liabilities. The Seller does not have any
Liability (and there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against it giving rise to any Liability) relating to or
affecting, directly or indirectly, any of the Acquired Assets.
(h) Legal Compliance. No violation by the Seller or its
predecessors of any applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local and foreign governments
(and all agencies thereof), nor any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been
filed or commenced that will prohibit or adversely affect its ability
to enter into and to perform its obligations under this Agreement.
(i) Tax Matters.
(i) The Seller has filed all Tax Returns that he was
required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by the Seller
(whether or not shown on any Tax Return) have been paid. No
claim has ever been made by an authority in a jurisdiction
where the Seller does not file Tax Returns that he is or may
be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of the Seller that
arose in connection with any failure (or alleged failure) to
pay any Tax.
(ii) The Seller does not expect any authority to
assess any additional Taxes with respect to the Seller or any
of the Acquired Assets for any period for which Tax Returns
have been filed. There is no dispute or claim concerning any
Tax Liability of the Seller or pertaining to the Acquired
Assets.
(j) Intellectual Property.
(i) The Seller owns or has the right to use pursuant
to license, sublicense, agreement or permission all
Intellectual Property necessary or desirable for the operation
of the Web Site. Each item of Intellectual Property relating
to the Acquired Assets owned, licensed or used by the Seller
immediately prior to the Closing hereunder will be owned,
licensed or available for use by the Buyer on identical terms
and conditions immediately subsequent to the Closing
hereunder. The Seller has taken all necessary and desirable
action to maintain and protect each item of Intellectual
Property being transferred to the Buyer under this Agreement.
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(ii) The Seller has not interfered with, infringed
upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of third parties relating to the
Acquired Assets, and the Seller (and employees or agents with
responsibility for Intellectual Property matters of the Web
Site) has never received any charge, complaint, claim, demand
or notice alleging any such interference, infringement,
misappropriation or violation (including any claim that the
Seller or Web Site must license or refrain from using any
Intellectual Property rights of any third party relating to
the Acquired Assets). To the Knowledge of the Seller (and
employees or agents with responsibility for Intellectual
Property matters of the Web Site), no third party has
interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights
relating to the Acquired Assets.
(iii) Section 3(j)(iii) of the Disclosure Schedule
identifies, to the extent applicable, each: (i) patent or
registration which has been issued to the Seller, its
employees, partners, agents, or the Web Site with respect to
any of its Intellectual Property relating to the Acquired
Assets; (ii) pending patent application or application for
registration which the Seller, its employees, partners,
agents, or the Web Site has made with respect to any of its
Intellectual Property relating to the Acquired Assets; and
(iii) license, agreement or other permission which the Seller,
its employees, partners, agents, or the Web Site has granted
to any third party with respect to any of its Intellectual
Property relating to the Acquired Assets. The Seller has
delivered to the Buyer correct and complete copies of all such
patents, registrations, applications, licenses, agreements and
permissions (as amended to date). Section 3(j)(iii) of the
Disclosure Schedule also identifies each trade name or
unregistered trademark used by the Seller in connection with
the Web Site. With respect to each item of Intellectual
Property required to be identified in Section 3(j)(iii) of the
Disclosure Schedule:
(A) the Seller possesses all right, title
and interest in and to the item, free and clear of
any Security Interest, license or other restriction;
(B) the item is not subject to any
outstanding injunction, judgment, order, decree,
ruling or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is
pending or, to the Knowledge of the Seller, is
threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(D) the Seller has never agreed to indemnify
any Person for or against any interference,
infringement, misappropriation or other conflict with
respect to the item.
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(iv) Section 3(j)(iv) of the Disclosure Schedule
identifies each item of Intellectual Property that any third
party owns and that the Seller uses in the Web Site pursuant
to license, sublicense, agreement or permission. The Seller
has delivered to the Buyer correct and complete copies of all
such licenses, sublicenses, agreements and permissions (as
amended to date). With respect to each item of Intellectual
Property required to be identified in Section 3(j)(iv) of the
Disclosure Schedule:
(A) the license, sublicense, agreement or
permission covering the item is legal, valid,
binding, enforceable and in full force and effect;
(B) the license, sublicense, agreement or
permission will continue to be legal, valid, binding,
enforceable and in full force and effect on identical
terms following the consummation of the transactions
contemplated hereby;
(C) no party to the license, sublicense,
agreement or permission is in breach or default, and
no event has occurred which with notice or lapse of
time would constitute a breach or default or permit
termination, modification or acceleration thereunder;
and
(D) no party to the license, sublicense,
agreement or permission has repudiated any provision
thereof.
(k) Contracts. Section 3(k) of the Disclosure Schedule lists
all contracts and other agreements, if any, being assigned to the Buyer
hereunder and to which the Seller or Web Site is a party. The Seller
has delivered to the Buyer a correct and complete copy of each written
agreement listed in Section 3(k) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 3(k) of the Disclosure
Schedule, if any. With respect to each such agreement: (A) the
agreement is legal, valid, binding, enforceable and in full force and
effect; (B) the agreement will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby; (C) no party
is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit
termination, modification or acceleration under the agreement; and (D)
no party has repudiated any provision of the agreement.
(l) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of the Seller or Web Site.
(m) Litigation. Section 3(n) of the Disclosure Schedule sets
forth each instance relating to the Acquired Assets in which the Seller
(i) is subject to any outstanding injunction, judgment, order, decree,
ruling or charge or (ii) is a party or, to the Knowledge of the Seller,
is threatened to be made a party to any action, suit, proceeding,
hearing or
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investigation of, in, or before any court or quasi-judicial
or administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator. None of the actions, suits,
proceedings, hearings, and investigations set forth in Section 3(n) of
the Disclosure Schedule could result in any material adverse change in
the business, financial condition, operations, results of operations or
future prospects of the Web Site. The Seller has no reason to believe
that any such action, suit, proceeding, hearing or investigation may be
brought or threatened against the Seller or Web Site relating to or
adversely affecting the Acquired Assets.
(n) Product Warranty. Each product manufactured, displayed,
transmitted, sold, licensed, leased or delivered by the Seller related
to the Acquired Assets has been in conformity with all applicable
contractual commitments and all express and implied warranties, and the
Seller has no Liability (and there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any Liability) for
replacement or repair thereof or other damages in connection therewith.
No product manufactured, displayed, transmitted, sold, licensed, leased
or delivered by the Seller is subject to any guaranty, warranty or
other indemnity.
(o) Product Liability. The Seller has no Liability arising out
of any injury to individuals or property as a result of the ownership,
possession or use of any product manufactured, displayed, transmitted,
sold, leased, licensed or delivered by the Seller related to the
Acquired Assets.
(p) Disclosure. The representations and warranties contained
in this Section 3 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 3 not misleading.
(q) Investment. The Seller (i) understands that the Buyer's
Acquisition Shares will not be registered under the Securities Act and
are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (ii) is
acquiring the Buyer's Acquisition Shares solely for its own account for
investment purposes, and not with a view to the distribution thereof,
(iii) is a sophisticated investor with knowledge and experience in
business and financial matters, (iv) has received certain information
concerning the Buyer and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks
inherent in holding the Buyer's Acquisition Shares, and (v) is able to
bear the economic risk and lack of liquidity inherent in holding the
Buyer's Acquisition Shares.
(r) Year 2000 Compliance. The software of the Web Site and all
software which is part of the Acquired Assets are Year 2000 Compliant.
The term "Year 2000 Compliant" as used herein means that the software
(1) is capable of recognizing, processing, managing, representing,
interpreting, and manipulating correctly date related data for dates
earlier, during and later than January 1, 2000, including, but not
limited to, calculating, comparing, sorting, storing, tagging and
sequencing, without resulting in or causing logical
12
or mathematical errors or inconsistencies in any user-interface
functionalities or otherwise, including data input and retrieval, data
storage, data fields, calculations, reports, processing, or any other
input or output, (2) has the ability to provide date recognition for
any data element without limitation (including, but not limited to,
date-related data presented without a century designation, date-related
data whose year is represented by only two digits and date fields
assigned special values), (3) has the ability to automatically function
into and beyond the year 2000 without human intervention and without
any change in operations associated with the advent of the year 2000,
(4) has the ability to correctly interpret data, dates and time into
and beyond the year 2000, (5) has the ability not to produce
noncompliance in existing information, nor otherwise corrupt such data
into and beyond the year 2000, (6) has the ability to correctly process
after January 1, 2000 data containing dates before that date, and (7)
has the ability to recognize all "leap years," including February 29,
2000.
(i) The software which is part of the Acquired Assets
has the ability to properly interface and will continue to
properly interface with internal and external applications and
systems of third parties whether or not they have achieved
Year 2000 Compliance.
(ii) The Seller has inquired of all such third
parties whose lack of Year 2000 Compliance would be materially
or significantly adverse to the Seller or the Acquired Assets,
and all such third parties have represented that they are Year
2000 Compliant.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Seller and the Shareholder
that the statements contained in this Section 4 are correct as of the date of
this Agreement and as of the Closing Date, except as set forth in the Disclosure
Schedule. The Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Section 4.
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. The Buyer is duly authorized to
conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except where such
failure to be qualified would not have a material adverse effect on the
Buyer. The Buyer has made available to the Seller or its counsel
correct and complete copies of the Articles of Incorporation and Bylaws
of the Buyer (as amended to date).
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions.
13
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions referred
to in Section 2 above), will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which the Buyer is subject or any provision of its Articles of
Incorporation or Bylaws or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject. The Buyer
does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments
and assumptions referred to in Section 2 above).
(d) Brokers' Fees. The Buyer has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Seller could become liable or obligated.
5. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing.
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including
the execution and delivery of such further instruments and documents)
as the other Party reasonably may request, all at the sole cost and
expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under Section 6 below). The Seller
and the Shareholder acknowledge and agree that from and after the
Closing the Buyer will be entitled to possession of all documents,
books, records, agreements and financial data of any sort relating to
the Acquired Assets.
(b) Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure
to act or transaction on or prior to the Closing Date involving the
Acquired Assets, the other Party will cooperate with the contesting or
defending Party and its counsel in the contest or defense, make
available its personnel, and provide such testimony and access to its
books and records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled
to indemnification therefor under Section 6 below).
14
(c) Transition. Neither the Seller nor the Shareholder will
take any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier or other business
associate of the Seller's Web Site from maintaining the same business
relationships with the Buyer after the Closing as it maintained with
the Seller prior to the Closing. The Seller and the Shareholder will
refer all customer inquiries relating to the Web Site to the Buyer from
and after the Closing. If requested by the Buyers, the Seller agrees to
prepare and deliver, with the Buyer's guidance and approval, a letter
to the Seller's customers and business associates relating to the Web
Site announcing the sale and endorsing the Buyer as the successor to
its business relationship with such parties.
(d) Confidentiality. The Seller, the Shareholder, the Web
Site, and their agents will treat and hold confidential all of the
Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver
promptly to the Buyer or destroy, at the request and option of the
Buyer, all tangible embodiments (and all copies) of the Confidential
Information which are in their possession.
(e) Buyer's Acquisition Shares. The Buyer's Acquisition Shares
will be imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
Each holder desiring to transfer the Buyer's Acquisition Shares first
must furnish the Buyer with a written opinion reasonably satisfactory to the
Buyer in form and substance from counsel reasonably satisfactory to the Buyer by
reason of experience to the effect that the holder may transfer the Buyer's
Acquisition Shares as desired under the Securities Act.
6. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Buyer, the Seller and the
Shareholder contained in this Agreement shall survive the Closing (even
if the damaged Party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and
continue in full force and effect forever thereafter (subject to any
applicable statutes of limitations).
(b) Indemnification Provisions for Benefit of the Buyer.
15
(i) In the event the Seller or the Shareholder
breaches (or in the event any third party alleges facts that,
if true, would mean the Seller or the Shareholder has
breached) any of its or his representations, warranties and
covenants contained in this Agreement, and, if there is an
applicable survival period pursuant to Section 6(a) above,
provided that the Buyer makes a written claim for
indemnification against the Seller or the Shareholder pursuant
to Section 8(g) below within such survival period, then the
Seller and the Shareholder agree, jointly and severally, to
indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer may suffer through and after
the date of the claim for indemnification (including any
Adverse Consequences the Buyer may suffer after the end of any
applicable survival period) resulting from, arising out of,
relating to, in the nature of or caused by the breach (or the
alleged breach).
(ii) The Seller and the Shareholder agree, jointly
and severally, to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer
resulting from, arising out of, relating to, in the nature of
or caused by:
(A) any Liability of the Seller or the
Shareholder which is not an Assumed Liability
(including any Liability of the Seller or the
Shareholder that becomes a Liability of the Buyer
under any bulk transfer law of any jurisdiction,
under any common law doctrine of de facto merger or
successor liability or otherwise by operation of
law); or
(B) any Liability of any of the Seller or
the Shareholder for any unpaid Taxes.
(c) Indemnification Provisions for Benefit of the Seller and
the Shareholder.
(i) In the event the Buyer breaches (or in the event
any third party alleges facts that, if true, would mean the
Buyer has breached) any of its representations, warranties,
and covenants contained in this Agreement, and, if there is an
applicable survival period pursuant to Section 6(a) above,
provided that the Seller or the Shareholder makes a written
claim for indemnification against the Buyer pursuant to
Section 8(g) below within such survival period, then the Buyer
agrees to indemnify the Seller or the Shareholder from and
against the entirety of any Adverse Consequences the Seller or
the Shareholder may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences
the Seller or the Shareholder may suffer after the end of any
applicable survival period) resulting from, arising out of,
relating to, in the nature of or caused by the breach (or the
alleged breach).
(ii) The Buyer agrees to indemnify the Seller and the
Shareholder from and against the entirety of any Adverse
Consequences the Seller or the Shareholder
16
may suffer resulting from, arising out of, relating to, in the
nature of or caused by any Assumed Liability.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third
Party Claim") which may give rise to a claim for
indemnification against the other Party (the "Indemnifying
Party") under this Section 6, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying Party
thereby is prejudiced.
(ii) The Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within 15 days after
the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by
the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (C) the
Third Party Claim involves only money damages and does not
seek an injunction or other equitable relief, (D) settlement
of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the
Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
Section 6(d)(ii) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C)
the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section
6(d)(ii) above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and
17
consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, the
Indemnifying Party in connection therewith), (B) the
Indemnifying Party will reimburse the Indemnified Party
promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys' fees
and expenses), and (C) the Indemnifying Party will remain
responsible for any Adverse Consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 6.
(e) Determination of Adverse Consequences. The Parties shall
take into account the time cost of money (using the Applicable Rate as
the discount rate) in determining Adverse Consequences for purposes of
this Section 6. All indemnification payments under this Section 6 shall
be deemed adjustments to the Purchase Price.
(f) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation
of, any statutory, equitable, or common law remedy any Party may have
for breach of representation, warranty, or covenant any Party may have
with respect to the Seller or Web Site, or the transactions
contemplated by this Agreement.
7. HOLDBACK SHARES.
(a) Purpose. The Holdback Shares will be available to
compensate the Buyer for any Adverse Consequences, to the extent of the
amount of such Adverse Consequences that the Buyer has incurred by
reason of any of the items set forth in Section 6(b) and any reduction
in the Purchase Price pursuant to Section 7(b) below; provided,
however, if the Holdback Shares are exhausted or insufficient to cover
such resulting amount, Seller will immediately reimburse Buyer in cash
for any resulting amount over and above the available amount of
Holdback Shares.
(b) Adjustments. Adjustments to the Purchase Price will be
made from the Holdback Shares and will be valued at the Average Closing
Price. Seller will have provided the Buyer with no less than five (5)
executed stock powers (with the date and number of shares left blank)
to facilitate the cancellation of the Holdback Shares in compensation
for Adverse Consequences, if any, suffered by the Buyer hereunder.
(c) Indemnification. This Section 7 and the provision and
utilization of the Holdback Shares will not limit the Seller's and the
Shareholder's indemnification obligations under Section 6 provided that
any amounts owed to the Buyer pursuant to Section 7(b) will first be
satisfied from the Holdback Shares to the extent available.
(d) Termination of Holdback. The Holdback Shares, minus
adjustments made, if any, under Section 7(b), will be paid to the
Seller one (1) year following the Closing Date.
18
8. MISCELLANEOUS.
(a) Press Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of
the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its reasonable
best efforts to advise the other Party prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the
extent they have related in any way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party;
provided however, that the Buyer may (i) assign any or all of its
rights and interests hereunder to one or more of its Affiliates and
(ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations
hereunder).
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
19
If to the Seller:
Virtual Business Designs, Inc.
DBA The Gamers Net
0000 Xxxxxxxx Xxxxxx, Xxxxx. 000
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attn: Mr. Xxxxx Xxxxx
If to the Buyer:
Interactive Magic, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Executive Officer
Copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of North
Carolina without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any
jurisdiction other than the State of North Carolina.
(i) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by the Buyer and the Seller. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty
or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
20
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
(k) Expenses. Each of the Buyer, the Seller and the
Shareholder will bear his or its own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall
be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including"
shall mean including without limitation. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes
the relevant facts in reasonable detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy)
of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document
or other item itself). The Parties intend that each representation,
warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty,
or covenant contained herein in any respect, the fact that there exists
another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which
the Party has not breached shall not detract from or mitigate the fact
that the Party is in breach of the first representation, warranty, or
covenant.
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each
of the Parties agrees that the other Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and
the matter (subject to the provisions set forth in Section 8(o) below),
in addition to any other remedy to which it may be entitled, at law or
in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to
the jurisdiction of any state or federal court sitting in North
Carolina, in any action or proceeding arising out of
21
or relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court.
Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond,
surety, or other security that might be required of any other Party
with respect thereto. Each Party appoints the Buyer's corporate
registered agent in North Carolina (the "Process Agent") as its agent
to receive on its behalf service of copies of the summons and complaint
and any other process that might be served in the action or proceeding.
Any Party may make service on the other Party by sending or delivering
a copy of the process (i) to the Party to be served at the address and
in the manner provided for the giving of notices in Section 8(g) above
or (ii) to the Party to be served in care of the Process Agent at the
address and in the manner provided for the giving of notices in Section
8(g) above. Nothing in this Section 8(o), however, shall affect the
right of any Party to bring any action or proceeding arising out of or
relating to this Agreement in any other court or to serve legal process
in any other manner permitted by law or in equity. Each Party agrees
that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other
manner provided by law or in equity.
(p) Bulk Transfer Laws. The Buyer acknowledges that the Seller
will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this
Agreement. The Seller agrees to indemnify the Buyer from and against
any Adverse Consequences arising from or related to the Buyer's
noncompliance with such laws.
(q) Sales, Transfer and Documentary Taxes, etc. The Seller
will pay all federal, state and local sales, documentary and other
transfer taxes, if any, due as a result of the purchase, sale or
transfer of the Acquired Assets in accordance herewith imposed by law
on the Seller or Buyer, and the Seller will indemnify, reimburse and
hold harmless Buyer in respect of the liability for payment of or
failure to pay any such taxes or the filing of or failure to file any
reports required in connection therewith.
[THE NEXT PAGE IS THE SIGNATURE PAGE.]
22
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the date first above written.
Interactive Magic, Inc.
By: ___________________________________
Name: _________________________________
Title: __________________________________
Virtual Business Designs, Inc. (d/b/a The Gamers Net)
By: ___________________________________
Name: _________________________________
Title: __________________________________
Disclosure Schedule
None
Schedule of Assigned Contracts
1) Worlds Apart Contract
2) Online Golf Challenge Contract
