STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of the 12th
day of March, 1999, by and between Ergovision, Inc. (the "Purchaser"), a
Delaware corporation, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III (the "Seller") an individual
residing at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
W I T N E S S E T H:
WHEREAS, the Seller has operated a business consisting of selling
eyewear, optical products and accessories over the Internet (the "Business") as
a division of ▇▇▇▇▇▇▇▇▇▇'▇ of Florence, Inc., a South Carolina corporation; and
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ have
caused ▇▇▇▇▇▇▇▇▇▇'▇ of Florence, Inc. (▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
▇▇. and ▇▇▇▇▇▇▇▇▇▇'▇ of ▇▇▇▇▇▇▇▇, Inc. are hereinafter each a "Principal" and
collectively, the "Principals") to transfer and the Seller has conveyed all of
the Seller's interest in certain assets used in connection with the Business to
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (the "Company"), a Delaware Corporation; and
WHEREAS, the Company has issued and outstanding 100 shares of common
stock, par value $.01 per share (the "Common Stock"), constituting all of the
issued and outstanding capital stock of the Company; and
WHEREAS, the Seller is the holder of all of the issued and
outstanding Common Stock; and
WHEREAS, the Purchaser desires to acquire from the Seller, and the
Seller desires to sell to the Purchaser, one hundred percent (100%) of the
issued and outstanding shares of Common Stock (the "Purchased Shares"), on the
terms and subject to the conditions set forth herein; and
WHEREAS, the Purchaser's acquisition of the Purchased Shares (the
"Acquisition") is intended to be treated as a tax-free reorganization pursuant
to the provisions of Section 368(a) of the Internal Revenue Code of 1986, as
amended.
NOW, THEREFORE, the parties hereto hereby agree as follows:
Article 1.
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, any successor statute thereto and all final or temporary regulations
promulgated thereunder and generally applicable published rulings entitled to
precedential effect.
"Consulting Agreement" means the agreement between Seller and
Purchaser in the form of Exhibit A hereto.
"Environment" means soil, surface waters, ground waters, land,
stream, sediments, surface or subsurface strata and ambient air.
"Environmental Condition" means any condition with respect to the
Environment on any Facility, whether or not yet discovered, which could or does
result in any Losses (as defined in Section 9.01 hereof), including any
condition resulting from the operation of the business of the Company or the
operation of the business of any subtenant or occupant of any Facility.
"Environmental Laws" means all Governmental Rules relating to injury
to, or the protection of, real or personal property or human health or the
Environment as in effect prior to the Closing Date, including, without
limitation, all valid and lawful requirements of courts and other Governmental
Bodies pertaining to reporting, licensing, permitting, investigation,
remediation and removal of emissions, discharges, releases or threatened
releases of Hazardous Substances, chemical substances, pesticides, petroleum or
petroleum products, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, liquid or gaseous in nature, into the
Environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances,
pollutants, contaminants or hazardous or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature.
"Ergovision Stock" means the Common Stock, par value $0.001 per
share, of the Purchaser.
"Ergovision Stock Price" means, with respect to any business day,
the closing asked price of a share of Ergovision Stock as quoted on the Over the
Counter Bulletin Board System, the NASDAQ National Market System, the NASDAQ
Small Cap Market, or on any national securities exchange on which the Ergovision
Stock is then traded and quoted, for any such day.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, any successor statute thereto and all final or
temporary regulations promulgated thereunder and generally applicable published
rulings entitled to precedential effect.
"Escrow Agent" means Rosenman & Colin LLP.
"Escrow Agreement" means the Escrow Agreement among the Purchaser,
the Seller and the Escrow Agent in substantially the form of Exhibit B hereto.
"Facility" means any facility which is now or has heretofore been
owned or used by the Company.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Body" means any federal, state, local or foreign
governmental authority or regulatory body, any subdivision, agency, commission
or authority thereof (including, without limitation, environmental protection,
planning and zoning), or any quasi-governmental or private body exercising any
regulatory authority thereunder (including, without limitation, Network
Solutions, Inc.) and any person directly or indirectly owned by and subject
2
to the control of any of the foregoing, or any court, arbitrator or other
judicial or quasi-judicial tribunal.
"Governmental Rules" means any statute, law, treaty, rule, code,
ordinance, regulation, policy, permit, certificate or order of any Governmental
Body or any judgment, decree, injunction, writ, order or like action of any
Governmental Body.
"Hazardous Substances" means any substance:
(a) the presence of which requires notification,
investigation, or remediation under any Environmental Law as in effect prior to
the Closing Date;
(b) which prior to the Closing Date is or becomes defined as a
"hazardous waste", "hazardous material" or "hazardous substance" or "pollutant"
or "contaminant" under any present or future Environmental Law or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et seq.), the
Resource Conservation and Recovery Act ("RCRA") (42 U.S.C. Section 6901 et
seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.) and any Environmental
Law applicable to any jurisdiction in which or from which the Company conducts
or has conducted its business;
(c) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is
or becomes regulated by any Governmental Body under Environmental Laws prior to
the Closing Date;
(d) without limitation, which contains gasoline, diesel fuel
or other petroleum hydrocarbons or volatile organic compounds;
(e) without limitation, which contains polychlorinated
byphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or
(f) without limitation, which contains or emits radioactive
particles, waves or materials, including radon gas.
"Lien" means any mortgage, charge, pledge, lien, security interest,
claim, encumbrance or restriction, of any kind or nature.
"Release" means a general release in substantially the form of
Exhibit C hereto to be executed by the Seller and each of the directors and
officers of the Company in favor of the Purchaser.
Article 2.
PURCHASE AND SALE
Section 2.01 Closing. The closing (the "Closing") of the transactions set
forth in Section 2.02 hereof shall take place at 10:00 A.M., at the offices of
Rosenman & Colin LLP, 575 Madison Avenue, New York, New York, within ten (10)
business days of the date hereof, or on such other date as the Purchaser and the
Seller shall agree, but in any event by no later than March 31, 1999.
(Hereinafter, the date on which the Closing shall take place is referred to as
the
3
"Closing Date", the time on the Closing Date when the Closing shall take place
is referred to as the "Closing Time" and such offices are referred to as the
"Closing Place.")
Section 2.02 Purchase of the Common Stock and Payment of Purchase Price.
(a) Subject to the terms and conditions and in reliance upon the representations
and warranties herein set forth, the Seller agrees to sell and deliver to the
Purchaser the Purchased Shares, as evidenced by certificates duly endorsed in
blank or accompanied by stock powers executed in blank, with signatures
guaranteed by a commercial bank or trust company, and with all necessary
transfer stamps affixed thereto, free and clear of all Liens, and the Purchaser
agrees to purchase from the Sellers the Purchased Shares in consideration of the
aggregate payment to the Seller of 100,000 shares of Ergovision Common Stock
(the "Purchase Price"). The Seller shall deliver to the Purchaser the Closing
certificates representing all of the Purchased Shares.
(b) The Seller shall deliver to the Escrow Agent at the Closing all
of the shares of Ergovision Common Stock received by the Seller from the
Purchaser as part of the Purchase Price, which shall be held by the Escrow Agent
pursuant to the terms of the Escrow Agreement.
Section 2.03 Tax-Free Reorganization. The parties intend that the
Acquisition be treated as a tax-free plan of reorganization under Section 368(a)
of the Code. The Ergovision Stock issued in the Acquisition will be issued
solely in exchange for the Purchased Shares, and no other transaction (other
than the Acquisition and as provided in this Agreement) is intended to be an
adjustment to the consideration paid for the Purchased Shares. The parties
intend that no consideration that could constitute "other property" within the
meaning of Section 356(a) of the Code is being transferred by the Purchaser for
the Purchased Shares. The parties shall not take a position on any tax return or
before any taxing authority that is inconsistent with this Section 2.03 unless
otherwise required by a final and binding determination or resolution of a
Governmental Body with appropriate jurisdiction, and each party agrees to
promptly notify the other party of any assertion by a taxing authority of a
position that is inconsistent with this Section 2.03. Section
2.04 Power of Attorney. The Seller hereby constitutes and appoints the
Purchaser the true and lawful attorney of the Seller with full power of
substitution, in the name of the Seller or in the name of the Purchaser, for the
benefit of the Purchaser and at no cost, expense or liability to Seller, subject
to Article 9 hereof, (a) to collect, assert or enforce any claim, right or title
of any kind in or to the Assets, to institute and prosecute all actions, suits
and proceedings which the Purchaser may reasonably deem proper in order to
collect, assert or enforce any such claim, right or title, and to do all such
acts and things in relation thereto as the Purchaser shall reasonably deem
advisable and (b) to take all action which the Purchaser may reasonably deem
proper in order to provide for the Purchaser the benefits of or under any of the
Assets where any required consent of a third party to the assignment thereof to
the Purchaser shall not have been obtained. The Seller acknowledges that such
powers are coupled with an interest and shall not be revocable by it in any
manner or for any reason, and that the Purchaser shall be entitled to retain for
its own account any amounts collected pursuant to such powers, including any
amounts payable as interest in respect thereof.
4
Article 3.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser, that:
Section 3.01 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware on the date hereof and has the corporate power and authority
to own or lease all of its properties and assets and to carry on its business as
it is now being conducted.
Section 3.02 Foreign Qualification. The Company is not licensed or
qualified to do business as a foreign corporation in any jurisdiction, and the
character and location of the assets owned or leased by the Company and the
nature or conduct of the Company's business as it is now being conducted do not
make such license or qualification necessary.
Section 3.03 Capitalization; Authority of Seller. (a) The Seller has good
and valid title to all issued and outstanding shares of the Common Stock of the
Company free and clear of all Liens.
(b) The Seller has the power and authority to execute and deliver
this Agreement, the Escrow Agreement, the Release executed by the Seller and all
other documents hereby contemplated to be executed by the Seller, to consummate
the transactions hereby and thereby contemplated and to take all other actions
required to be taken by him pursuant to the provisions hereof and thereof. The
execution, delivery and performance of this Agreement and all other documents
hereby contemplated to be executed by the Seller and the Principals has been,
and the consummation by the Seller of the transactions hereby and thereby
contemplated has been, duly authorized by all necessary action, corporate or
otherwise, of the Seller and the Principals. This Agreement and all other
documents hereby contemplated to be executed by the Seller and/or the Principals
constitute the legal, valid and binding obligations of the Seller and/or the
Principals, as applicable, enforceable against the Seller and/or the Principals
in accordance with their respective terms.
Section 3.04 Corporate Instruments. The Seller has heretofore made
available to the Purchaser true and complete copies of the Certificate of
Incorporation, the By-laws and the stock transfer books of the Company.
Section 3.05 Capitalization; Options; Common Stock. (a) The Company is
authorized to issue only 100 shares of Common Stock, par value $0.01 per share,
all of which shares of Common Stock are issued and outstanding. There are no
other series or classes of capital stock of the Company authorized or issued.
(b) There are no outstanding warrants, options, contracts,
rights (pre-emptive or otherwise), calls, commitments or demands of any
character relating to any authorized and issued or unissued shares of the
capital stock of the Company or other instruments convertible into or
exchangeable for such stock, or which obligate the Company to seek authorization
to issue additional shares of any class of stock, nor will any be created by
virtue of this Agreement or the transactions hereby contemplated.
5
(c) The Common Stock owned by the Seller has been duly
authorized and legally and validly issued, is fully paid and nonassessable, and
represents all of the issued and outstanding shares of capital stock of the
Corporation. None of the Common Stock has been issued in violation of the
securities or blue sky laws of the United States of America or any state or
territory thereof.
Section 3.06 No Violation of Other Instruments or Obligations. The
execution and delivery by the Seller of this Agreement or any other documents
hereby contemplated the consummation of the transactions hereby and thereby
contemplated by the Seller shall not (i) constitute any violation or breach of
the Certificate of Incorporation or the By-laws of the Company, (ii) constitute
a default under or a violation or breach of, or result in the acceleration of
any obligation under, any provision of any contract, mortgage or other
instrument to which the Seller or the Company is a party or by which any of its
assets may be affected or secured, (iii) violate any Governmental Rule affecting
the Company or any of its assets, (iv) result in the creation of any Lien on any
of the assets or properties of the Company, or (v) result in the termination of
any license, franchise, lease or permit to which the Company is a party or by
which it is bound.
Section 3.07 Compliance with Law; Consents and Approvals. The Company has
complied in all material respects with all Governmental Rules (including,
without limitation, any federal, state or local laws, rules or regulations
regulating the safety of the workplace and/or the discharge of materials into
the environment or otherwise relating to the protection of the environment)
applicable to the Company or the Business as conducted on and prior to the date
hereof. The Company has maintained in full force and effect all licenses,
approvals, permits and consents for the lawful conduct of the Business. Neither
the Company nor the Seller is in violation of any Governmental Rule applicable
to the Seller or the Company, and has not received any notice of any such
violation. Except as set forth on Schedule 3.07 hereof, no authorization,
approval, order, license, permit, franchise or consent, and no registration,
declaration, notice or filing by or with any domestic or foreign Governmental
Body (including, without limitation, any filing or registration pursuant to the
securities or blue sky laws of the United States of America or any state or
territory thereof) by the Company is required in connection with the execution
and delivery by the Seller of this Agreement and the consummation by the Seller
and the Principals of the transactions hereby contemplated.
Section 3.08 Financial Statements. Schedule 3.08 hereto contains (i) the
unaudited sales report of the Business as of December 31, 1998 (the "December
Statement"), for the year then ended and (ii) the unaudited sales report of the
Business as of February 28, 1999 (the "February Statement"), for the two-month
period then ended, all of which have been certified by the Company's president
and delivered to the Purchaser. Such sales reports present fairly, in all
material respects, the sales of the Business as of December 31, 1998 and
February 28, 1999, respectively, and the results of the Business' sales for the
year ended December 31, 1998 and the two-month period ended February 28, 1999.
Section 3.09 Accounts Receivable. Except to the extent of the amount of
the reserve for doubtful accounts reflected on Schedule 3.09, all the Accounts
Receivable of the Business reflected therein and all accounts receivable that
have arisen since the December Statement and February Statement (except Accounts
Receivable that have been collected since such date) are valid and enforceable
claims, and constitute bona fide accounts receivable resulting from the sale of
goods and services in the ordinary course of the Business' business. The
Accounts Receivable are subject to no valid defense, offsets, returns,
allowances or credits of any kind, and are fully
6
collectible within 90 days from their due date, except to the extent of the
amount of the reserve, if any, for doubtful accounts reflected on Schedule 3.09.
Except for Accounts Receivable, neither the Business nor the Company has made
any loan or advance to any person.
Section 3.10 Liabilities, Borrowings and Guarantees. The Company has no
debts, liabilities or other obligations, accrued, absolute, contingent or
otherwise, due or to become due, other than liabilities disclosed or provided
for on Schedule 3.10 and liabilities incurred since February 28, 1999, in the
ordinary and usual course of its business consistent with past practice, but in
no event aggregating more than $5,000 collectively.
Section 3.11 Title to Assets; Inventories. (a) Except for Liens (i) for
any current taxes or assessments not yet delinquent or (ii) created by statute
of carriers, warehousemen, mechanics, laborers and materialmen incurred in the
ordinary course of business for sums not yet due, the Company has good and
marketable title, free and clear of all Liens, to all of its assets and personal
property.
(b) All inventories reflected on Schedule 3.11, are, and all
inventories owned by the Company as of the Closing Time shall be (i) valued at
the lower of cost or market value on a first-in, first-out basis in accordance
with GAAP and (ii) current and readily merchantable, containing no material
amount of obsolete or damaged goods which have not been written down or reserved
in conformity with GAAP. No inventory is held on consignment by the Company, as
consignee or consignor. To the Seller's knowledge, all inventory included in the
Assets is free of any material defect or other deficiency.
Section 3.12 Real Property; Leases. Except as set forth on Schedule 3.12,
the Company does not own or lease any real property.
Section 3.13 Litigation. There are no claims, actions, suits, litigations,
proceedings, audits, controversies or investigations, pending or, to the
knowledge of the Seller, threatened against or affecting the Company or any of
its assets, and the Company has not been charged with or, to the knowledge of
the Seller, threatened with a charge of any violation of, and is not under
investigation with respect to a possible violation of, any provision of any
federal, state or local law or administrative ruling or regulation relating to
its business.
Section 3.14 Taxes. (a) The Company has timely and duly filed (giving
effect to extensions duly taken) all federal, state, local or foreign tax
returns or reports required to be filed by or with respect to the Company on or
prior to the Closing Date.
(b) The tax returns and reports described in subparagraph (a)
above reflect accurately all liability for taxes, charges, fees, levies or other
assessments of any nature whatsoever (including, without limitation, all
federal, state, local and foreign income taxes, estimated taxes, excise taxes,
sales taxes, use taxes, transfer taxes, gross receipts taxes, franchise taxes,
employment and payroll related taxes, property taxes and import duties, whether
or not measured in whole or in part by net income), together with any related
penalties, interest and additions to taxes (any of the foregoing being referred
to herein as a "Tax"), for the periods covered thereby. The Company has paid all
Taxes required to be paid by it with respect to the periods covered by the
returns and reports described in subparagraph (a) above. The Company has fully
collected, withheld and/or paid over all Taxes required to be collected,
withheld and/or paid over to a taxing authority.
7
(c) The Company is not currently being audited by any taxing
authority with respect to the returns and reports described in subparagraph (a)
above and there are no claims or assessments pending against the Company. The
Company has not agreed to waive or extend the statute of limitations with
respect to any Taxes or tax returns and has not filed any consent under section
341(f) of the Code (or any corresponding provision of state, local or foreign
tax law). No written claim has ever been made by a taxing authority in a
jurisdiction where the Company does not presently file Tax returns that the
Company is or may be subject to taxation by that jurisdiction. Accurate, correct
and complete copies of all tax returns and reports filed by the Company during
the five-year period preceding the Closing Date have been made available to the
Purchaser. Accurate, correct and complete copies of any closing agreements with
respect to the Company which were entered into with the Internal Revenue Service
or any other taxing authority have heretofore been furnished to the Purchaser.
Section 3.15 Insurance. The Company has insurance for its assets and
operations in amounts and for coverages customary for businesses of its kind and
size. Schedule 3.15 hereto is a complete and correct list of all policies of
insurance carried by the Company or pursuant to which the Company is a named
beneficiary or pursuant to which the business or assets of the Company are
insured and true and complete copies of which have been provided to the
Purchaser. All of such policies are in full force and effect, all premiums due
and payable in respect of such policies have been paid in full, and there exists
no default or other circumstance which would create the substantial likelihood
of the cancellation or non-renewal of any such policy. The Company has notified
such insurers of any claim known to the Company which it believes is covered by
any such insurance policy and has provided the Purchaser with a copy of such
claim.
Section 3.16 Labor Disputes. The Company is not party to a union agreement
and there are no labor unions or other organizations representing or attempting
to represent any employee of the Company. There are no work stoppages or other
labor disputes, disturbances, grievances or claims pending or, to the knowledge
of the Seller, threatened in connection with the employees of the Company. There
is no unfair labor practice charge or complaint pending or, to the knowledge of
Seller, threatened against the Company before the National Labor Relations Board
or any State Labor Relations Board. There are no claims of discrimination of any
kind pending or, to the knowledge of Seller, threatened against the Company
before any Governmental Body.
Section 3.17 Customers. Schedule 3.17 hereto is a complete and accurate
list of all agreements, understandings and commitments with all customers of the
Company.
Section 3.18 Contracts. Schedule 3.18 contains a complete and correct list
of all contracts, arrangements and agreements in effect on the date hereof (the
"Contracts") to which the Company is a party, whether written or oral, including
but not limited to agency or advertising contracts, agreements with employees,
sales representatives, suppliers, wholesalers, manufacturers and distributors,
arrangements with web hosting service providers, website designers, software
vendors or licensors, computer or technical service providers, and agreements
with factors, banks or other lending institutions. A true and complete copy of
each written Contract, and a complete and correct summary of each oral Contract,
has heretofore been made available to the Purchaser. The Company has performed
all of its obligations required to be performed by it, has paid all amounts
required to be paid by it and is not in default in any material respect under
any Contract, and no event has occurred which, with the lapse of time or the
giving of notice or both, would constitute such a default, and no other party to
any Contract is
8
in default in any material respect thereunder. Each of the Contracts constitutes
a legal, valid and binding obligation of the Company and the other parties
thereto enforceable in accordance with its terms. Neither the Seller nor the
Company has received notice that any other party to any of the Contracts is in
default thereunder. None of the Contracts requires the consent of a third party
in connection with the transactions contemplated hereby.
Section 3.19 Intellectual Property. (a) The Company owns free and clear of
all Liens, possesses and has the exclusive right to use, all patents, patent
applications, patent rights, trademarks, trademark applications, trade names,
service marks, service ▇▇▇▇ applications, domain names, domain name
applications, copyrights, copyright registrations, know-how, licenses, trade
secrets, proprietary processes, computer programs and other computer software,
technology and formulae (the "Proprietary Rights") necessary, required or
desirable for the conduct of its business as presently conducted or as proposed
to be conducted. All Proprietary Rights are identified on Schedule 3.19 hereto.
The Company owns and has the sole and exclusive right to use each of the
Proprietary Rights for the categories of goods and services with respect to
which such Proprietary Rights are registered to the extent that such goods and
services are currently being used. The Seller (i) is not bound by or a party to
any options, licenses, or agreements of any kind with respect to the Proprietary
Rights and (ii) has not assigned, licensed or in any manner encumbered or
impaired any rights in the Proprietary Rights. No Proprietary Right infringes or
violates any personal, property, statutory or common law or any other rights of
any third parties (including, without limitation, copyright, trademark and the
rights of privacy and publicity), and no claim alleging any such infringement or
violation by the Company or its Proprietary Rights has been received by the
Seller or the Company.
(b) No royalties, honoraria or fees are payable to and no
consents or approvals are needed from any third persons or entities in
connection with the ownership, use or exploitation of the Proprietary Rights in
the ordinary course of the Company's business.
Section 3.20 Software. (a) Schedule 3.20 sets forth a complete and
accurate list of all software programs, systems and applications (i) designed or
developed (or in the process of being designed or developed) by employees of the
Company or by consultants on the Company's behalf (the "Company Owned Software")
or (ii) licensed by the Company from any third party (other than "off-the-shelf"
software) (the "Licensed Software") pursuant to the License Agreements specified
on Schedule 3.18, in each case that is manufactured, developed or used by the
Company in the operation of the Company's business or integrated into the
Company Owned Software or marketed, licensed or sold by the Company to third
parties (collectively, the "Software").
(b) All of the Company Owned Software are original works of
authorship and are protected by the copyright laws of the United States. The
Company owns all right, title and interest in and to the Company Owned Software,
free and clear of any Liens and, except as set forth on Schedule 3.20 hereof,
has not sold, assigned, licensed, distributed or in any other way disposed of
the Company Owned Software or subjected the Company Owned Software to any Lien,
and none of the employees or consultants referenced in Section 3.20(a) has any
interest or claim whatsoever to any of the Company Owned Software or any
component or constituent part thereof.
(c) The Licensed Software is validly held and used by the
Company and is fully and freely utilizable by the Company pursuant to the
license agreement with respect thereto without the consent of or notice to any
third party. The Company is in compliance with
9
all material terms and conditions of each license with respect to the Licensed
Software, and neither the Seller nor the Company has received any notice that
the Company is in breach of any such license.
(d) To the best of Seller's knowledge, the Software does not
contain any copy protection, computer virus, malicious code or destructive
feature.
Section 3.21 Year 2000. All Software is designed to be used prior to,
during, and after calendar year 2000 and the Software will operate during each
such time period without error relating to date data, specifically including any
error relating to, or the conduct of, date data which represents or references
different centuries or more than one century. Without limiting the generality of
the foregoing, (a) the Software will not abnormally end or provide invalid or
incorrect results as a result of date data and (b) the Software will be capable,
upon installation, of accurately processing, providing and/or receiving date
data from, into, and between the twentieth and twenty-first centuries, including
the years 1999 and 2000, and leap year calculations, and (ii) the Software will
lose no functionality with respect to the introduction of records containing
dates falling before, on or after January 1, 2000, and that the Software will be
interoperable with other software and systems that may deliver records to,
receive record from or otherwise interact with the Software, including but not
limited to, back-up and archived data, date data, century recognition
calculations that accommodate same century and multi-century formulas and date
values and date data interface values that reflect the century.
Section 3.22 Licenses and Permits. The Company has all licenses, permits,
consents and approvals necessary for the Company to conduct its business as
required by any Governmental Body, and all such licenses, permits, consents and
approvals are set forth in Schedule 3.22 hereto.
Section 3.23 ERISA. (a) Except as set forth on Schedule 3.23 hereto, the
Company does not maintain, administer or contribute to, nor has it maintained,
administered or contributed to, nor do the employees of the Company receive or
expect to receive as a condition of employment, benefits pursuant to any:
employee pension benefit plan (as defined in Section 3(2) of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA")) (a "Plan"),
including, without limitation, any multiemployer plan as defined in Section
3(37) of ERISA (a "Multiemployer Plan"); employee welfare benefit plan (as
defined in Section 3(1) of ERISA) (a "Welfare Plan"); or bonus, deferred
compensation, stock purchase, stock option, severance plan, salary continuation,
vacation, sick leave, fringe benefit, incentive, insurance, welfare or similar
arrangement (an "Employee Benefit Plan"). Neither the Company nor any affiliate
of the Company as determined under the Internal revenue Code of 1986, as amended
(the "Code") section 414(b), (c), (m) or (o) (an "ERISA Affiliate") maintains,
administers or contributes to, nor have any of them maintained, administered or
contributed to, nor do the employees of the Company or any ERISA Affiliate
receive or expect to receive as a condition of employment, benefits pursuant to
any Plan which is subject to section 412 of the Code or Title IV of ERISA. All
Plans, Welfare Plans and Employee Benefit Plans and any related trust agreements
or annuity contracts comply in all material respects with and are and have been
operated in accordance with each applicable provision of ERISA and the Code
(including, without limitation, requirements of Code 401(a) to the extent any
Plan is intended to conform to that section), other Federal statutes, state law
(including, without limitation, state insurance law) and the regulations and
rules promulgated pursuant thereto or in connection therewith. Neither the
Company nor any ERISA Affiliate has any notice or knowledge of any violation of
any of the foregoing by any Plan, Welfare Plan, or Employee Benefit Plan.
10
(b) Each Welfare Plan which is a group health plan (within the
meaning of section 5000(b)(1) of the Code) complies with and has been maintained
and operated in all material respects in accordance with the requirements of
section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA. There
are no pending or, to the Company's knowledge, threatened claims against any of
the Plans, Welfare Plans, or Employee Benefit Plans by any employee or
beneficiary covered under any Plans, Welfare Plans or Employee Benefit Plans or
otherwise involving any Plan, Welfare Plan or Employee Benefit Plan (other than
routine claims for benefits).
Section 3.24 Employees and Other Matters. Schedule 3.24 hereto is a
correct and complete list of (i) the directors and officers of the Company and
all of the present employees, sales personnel and independent contractors
regularly employed by or in connection with the business of the Company, either
as employees or independent contractors, together with a statement of the full
amount payable by way of salary, bonuses, perquisites, fringe benefits and other
direct or indirect compensation to each such person and (ii) the names of all
persons, if any, holding powers of attorney from the Company and a summary
statement of the terms thereof.
Section 3.25 Transfer of Assets. (a) Pursuant to the agreements,
certificates, filings and other documents between the Seller and the Principals
and the Company (collectively, the "Transfer Documents"), copies of which have
been provided to the Purchaser, the Seller and the Principals have, on or prior
to the date hereof, permanently, absolutely and irrevocably transferred,
assigned, conveyed and delivered to the Company all of the Seller's and the
Principals' right, title and interest in and to (the "Transfer") the following
assets (collectively, the "Assets"):
(i) all trade and other accounts receivable related to
the Company which are listed on Schedule 3.25(a)(i);
(ii) all inventory, including goods in transit,
containers, packaging and supplies, catalogues,
brochures, advertising, sales and promotional materials,
labels and stationery related to or used in connection
with the Company's business which are listed on Schedule
3.25(a)(ii);
(iii) all fixed assets, including spare parts,
maintenance parts and supplies used in connection with
the Company's business which are listed on Schedule
3.25(a)(iii);
(iv) all rights of the Seller and the Principals with
respect to the Company's business under all contracts,
leases, licenses, permits, arrangements, agreements and
commitments to which they and/or the Company is a party,
including prepaid expenses and security deposits
thereunder, listed on Schedule 3.25(a)(iv);
(v) all rights of the Seller and the Principals to the
Proprietary Rights and the Software relating to the
Company's business which are listed on Schedules
3.25(a)(v) and 3.25(a)(vi), respectively;
11
(vi) all customer lists, supplier lists and other data
relating to the Company's business which are, including,
without limitation, those listed on Schedule
3.25(a)(vii) hereto; and
(vii) all business and goodwill, including the right of
Purchaser to use the names "SunglassSource,"
"EyeGlassPlace" and all variations and derivations
thereof and the phone number of the Company.
(b) The sale, transfer and delivery by the Seller and the
Principals of the Assets to the Company pursuant to the Transfer Documents
shall, except as hereinafter provided, be made free and clear of all Liens. The
Transfer Documents constitute all of the actions necessary, and no other
consents, filings, notices or instruments need to be executed or delivered, in
connection with the Transfer and to vest in the Company all right, title and
interest in and to the Assets.
(c) The Company shall not assume any liabilities, debts or
obligations of the Principals.
(d) The Seller and the Principals each have the power and
authority to execute and deliver the Transfer Documents and all other documents
to be executed by the Seller or the Principals to consummate the transactions
thereby contemplated and to take all other actions required to be taken by each
of them pursuant to the provisions thereof. The execution, delivery and
performance of the Transfer Documents and all other documents thereby
contemplated to be executed by each of the Seller and the Principals has been,
and the consummation by the Seller and the Principals of the transactions
thereby contemplated has been, duly authorized by all necessary action,
corporate or otherwise, of the Seller and each of the Principals, as applicable.
The Transfer Documents and all other documents thereby contemplated to be
executed by the Seller and the Principals constitute the legal, valid and
binding obligations of the Seller and the Principals, enforceable against the
Seller and the Principals in accordance with their respective terms.
(e) Neither the execution and delivery by the Seller or any of
the Principals of the Transfer Documents or any other documents thereby
contemplated nor the consummation of the transactions thereby contemplated by
the Seller or any of the Principals shall (i) constitute any violation or breach
of the Certificate of Incorporation or the By-laws of ▇▇▇▇▇▇▇▇▇▇'▇ of ▇▇▇▇▇▇▇▇,
Inc. or the Company, (ii) constitute a default under or a violation or breach
of, or result in the acceleration of any obligation under, any provision of any
contract, agreement, arrangement, mortgage or other instrument to which the
Seller or any of the Principals is a party or by which any of the Assets may be
affected or secured, (iii) violate any Governmental Rule affecting the Seller or
any of the Principals or any of the Assets, (iv) result in the creation of any
Lien on any of the Assets, or (v) result in the termination of any license,
franchise, lease or permit comprising any of the Assets or to which the Seller
or any of the Principals is a party or by which it is bound.
(f) The Company is a sole purpose entity formed solely for
participation in the Transfer Documents, ownership of the Assets transferred
thereby and the conduct of its business in the ordinary course in accordance
with past practice. Except as contemplated by this Agreement or the Transfer
Documents, the Company has not engaged in any activity or become party to or
bound by any contract, agreement, arrangement, mortgage or other instrument.
12
Section 3.26 Environmental Matters. (a) The Company has obtained and
continues to maintain all permits, licenses, consents and approvals (the
"Environmental Approvals"), if any, necessary for conducting the business of the
Company which are required under Environmental Laws, and the Company has not
operated in violation of any Environmental Law or the terms of any Environmental
Approval.
(b) (i) The Company has not used, stored, generated,
discharged, emitted, transported, disposed of or treated Hazardous Substances
except in a manner which complies with Environmental Laws, (ii) to the best
knowledge of the Seller or the Principals, no prior owner, occupant, tenant or
user of any Facility has ever used, stored, generated, discharged, emitted,
transported, disposed of or treated Hazardous Substances, at, on or from any
Facility except in compliance with all Environmental Laws, and (iii) to the best
knowledge of the Seller or the Principals, there is not, and there has not been,
any Environmental Condition or release or threat of release (as those terms are
defined in Section 101 of CERCLA) of Hazardous Substances at, on or from any
Facility.
(c) Neither the Company nor the Seller has received written
notice of any pending or threatened investigation, claims, enforcement
proceedings, cleanup orders, citizen suits or other actions instituted by any
private party, employee or Governmental Body arising out of the conduct or the
operations of the Company, in connection with any Environmental Laws, or as a
result of any Environmental Condition at any Facility.
Section 3.27 Sales Target. The net sales generated by the Business ("Net
Sales") for the eleven months ended December 31, 1998, were at least $130,000
(exclusive of shipping charges), and including sales through February 28, 1999
will be at least $160,000 (exclusive of shipping charges).
Section 3.28 Ordinary Course; No Material Adverse Change. Since February
28, 1999, the Seller and the Principals have conducted the Business and the
Company's business in the ordinary and regular course thereof and there has not
been (i) any material adverse change in the assets, business, prospects,
financial condition or results of operations of the Business or the Company,
(ii) any damage, destruction or loss, whether or not covered by insurance, which
has materially adversely affected the Business or the assets or the business of
the Company or (iii) any event or condition of any character whatsoever the
occurrence of which affects or threatens to materially adversely affect the
assets, business, prospects, financial condition or results of operations of the
Business or the Company.
Section 3.29 Finder's Fees. Neither the Seller nor the Company has
incurred any liability for finder's or brokerage fees or agent's commissions in
connection with this Agreement or the transactions hereby contemplated.
Section 3.30 Full Disclosure. No representation or warranty of the Company
or the Seller in this Agreement or in any other certificate, schedule or other
document delivered to the Purchaser pursuant to this Agreement contains an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements herein and therein not misleading in light of
the circumstances in which they were made.
13
Article 4.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller that:
Section 4.01 Organization and Good Standing. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to own or
lease all of its properties and assets and carry on its business as it is now
being conducted.
Section 4.02 Authority Relative to Agreement. The Purchaser has the
corporate power and authority to execute and deliver this Agreement, the Escrow
Agreement and all other documents hereby contemplated, to consummate the
transactions hereby and thereby contemplated and to take all other actions
required to be taken by it pursuant to the provisions hereof and thereof. The
execution, delivery and performance of this Agreement and all other documents
hereby contemplated to be executed by the Purchaser has been, and the
consummation by the Purchaser of the transactions hereby and thereby
contemplated has been, duly authorized by any and all necessary corporate action
of the Purchaser. This Agreement and all other documents hereby contemplated to
be executed by the Purchaser constitute the legal, valid and binding obligations
of the Purchaser, enforceable against the Purchaser in accordance with their
respective terms.
Section 4.03 No Violation of Other Instruments or Obligations. Neither the
execution and delivery of this Agreement or any other documents hereby
contemplated nor the consummation of the transactions hereby and thereby
contemplated shall (i) constitute any violation or breach of the Certificate of
Incorporation or By-laws of the Purchaser, (ii) constitute a default under or a
violation or breach of, or result in acceleration of any obligation under, any
provision of any contract, lease, mortgage or other instrument to which it is a
party, or (iii) violate any judgment, order, writ, injunction, decree, statute,
rule or regulation affecting the Purchaser or any of its assets.
Section 4.04 Consents and Approvals. No authorization, approval, order,
license, permit, franchise or consent, and no registration, declaration, notice
or filing by or with any domestic or foreign Governmental Body by the Purchaser
is required in connection with the execution and delivery of this Agreement and
the consummation of the transactions hereby contemplated.
Section 4.05 Common Stock. The Ergovision Stock to be issued pursuant to
the provisions of this Agreement will, upon such issuance, be duly authorized,
legally and validly issued, and fully paid and nonassessable.
Section 4.06 Finder's Fees. The Purchaser has not incurred any liability
for finder's or brokerage fees or agent's commissions in connection with this
Agreement or the transactions hereby contemplated.
Section 4.07 Full Disclosure. No representation or warranty of the
Purchaser in this Agreement or in any other certificate, schedule or other
document delivered to the Seller pursuant to this Agreement contains any untrue
statement of a material fact or omits to state a
14
material fact necessary in order to make the statements herein and therein not
misleading in light of the circumstances in which they were made.
Article 5.
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
All obligations of the Purchaser under this Agreement are subject to
the fulfillment of each of the following conditions:
Section 5.01 Consulting Agreement. The Seller shall have entered into a
consulting agreement substantially in the form of Exhibit A hereto.
Section 5.02 Powers of Attorney. There shall have been terminated or
revoked all powers of attorney of the Company.
Section 5.03 Escrow Agreement. The Seller, Purchaser and the Escrow Agent
shall enter into an Escrow Agreement substantially in the form of Exhibit B
hereto.
Section 5.04 Releases. The Seller shall have executed and delivered the
Releases.
Section 5.05 Non-Competition Agreement. The Seller shall have entered into
a non-competition agreement substantially in the form of Exhibit D hereto.
Section 5.06 Resignations. The Seller shall have caused to be delivered to
the Purchaser written resignations, effective as of the Closing, of each of the
directors and officers of the Company from all offices and directorships of the
Company held.
Section 5.07 Governmental Permits and Approvals; Consents. The Company
shall have obtained (with the reasonable assistance of Buyer to the extent
required to obtain such approvals) (i) all permits and approvals from any
Governmental Body required to be obtained by the Company for the lawful
consummation of the Closing and (ii) the consents set forth or required to be
set forth on Schedule 3.08. Notwithstanding the foregoing, the Company shall not
be required to pay any consideration to any third party in order to obtain any
such permit, approval, consent or estoppel representation letter.
Section 5.08 Assignment of Contracts. The Company shall obtain (with the
reasonable assistance of the Buyer to the extent necessary to obtain such
consents) the consent of all other parties to an assignment of any Contract in
all cases in which such consent is required thereunder. Notwithstanding the
foregoing, the Company shall not be required to pay any consideration to any
third party in order to obtain any such consent.
Section 5.09 Officer's Certificate. The Seller shall have caused to be
delivered to Purchaser a certificate signed by the Chief Executive Officer
and/or the Secretary of the Company stating that (a) the representations and
warranties of the Company as set forth in Article 3 hereof are true and accurate
on and as of the Closing Date and (b) all conditions of the Purchaser's
obligations as set forth in Article 5 hereof have been entirely fulfilled by the
Seller.
Section 5.10 Additional Documents. The Seller has executed and delivered
such additional closing documents, certificates and agreements as Purchaser may
reasonably request.
15
Article 6.
CONDITIONS TO THE SELLER'S OBLIGATIONS
All obligations of the Seller under this Agreement are subject to
the fulfillment of each of the following conditions:
Section 6.01 Consulting Agreement. The Purchaser shall have entered into a
consulting agreement with the Seller substantially in the form of Exhibit A
hereto.
Section 6.02 Escrow Agreement. The Seller, Purchaser and the Escrow Agent
shall enter into an Escrow Agreement substantially in the form of Exhibit B
hereto.
Section 6.03 Officer's Certificate. The Purchaser shall have caused to be
delivered to the Seller a certificate signed by the Chief of Executive Officer
and/or the Secretary of the Purchaser stating that (a) the representations and
warranties of the Purchaser as set forth in Article 4 hereof are true and
accurate on and as of the Closing Date and (b) all conditions of the Seller's
obligations as set forth in Article 6 hereof have been entirely fulfilled by the
Purchaser.
Section 6.04 Additional Documents. The Purchaser has executed and
delivered such additional closing documents, certificates and agreements as the
Seller may reasonably request.
Article 7.
COVENANTS
Section 7.01 Further Assurances. From and after the date hereof, the
Seller shall, at any time and from time to time, at his sole cost and expense,
make, execute and deliver, or cause to be made, executed and delivered, such
assignments, deeds, drafts, checks, stock certificates, returns, filings and
other instruments, agreements, consents and assurances and take or cause to be
taken all such actions as counsel for the Purchaser may reasonably request for
the effectual consummation, confirmation and particularization of this Agreement
and the transactions hereby contemplated.
Section 7.02 Collection of Receivables. After the Closing Date, the Seller
will use reasonable efforts to assist the Purchaser in collection procedures in
order to collect all receivables of the Company outstanding as of the Closing
Date so as not to jeopardize Purchaser's future customer relations. In the event
that the Seller receives any amounts after the Closing Date in respect of the
Company's accounts receivable that existed prior to the Closing Date, the Seller
agrees to promptly forward all such amounts to the Purchaser.
Article 8.
INVESTMENT INTENT; RESTRICTIONS ON TRANSFER
Section 8.01 Investment Representation. The Seller (i) represents and
warrants to the Purchaser that he is acquiring all of the shares of Ergovision
Stock to be issued to him pursuant to the provisions of this Agreement for his
own account and for the purposes of investment and not with a view to, or for
sale in connection with, any distribution thereof, and (ii) agrees that he
16
will not at anytime sell or otherwise transfer, or permit the sale or other
transfer of, such shares of Ergovision Stock other than in transactions that are
not in violation of the Securities Act of 1933 or the provisions of any other
applicable securities laws, rules or regulations.
Section 8.02 Stock Legend. All certificates representing shares of
Ergovision Stock to be delivered to the Seller under this Agreement shall bear
the following legend:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, or under the securities laws of any
state and may not be sold, assigned, transferred, pledged or otherwise
disposed of except in compliance with, or pursuant to an exemption from,
the requirements of such Act or such laws."
Article 9.
INDEMNIFICATION
Section 9.01 By the Seller. The Seller agrees to indemnify and hold
harmless the Purchaser and its directors, officers, employees and agents (the
"Purchaser Parties") against, and to reimburse the Purchaser Parties on demand
with respect to, any and all losses, liabilities, obligations, suits,
proceedings, demands, judgments, damages, claims, expenses and costs (including,
without limitation, reasonable fees, expenses and disbursements of counsel)
(collectively, "Losses") which each may suffer, incur or pay by reason of (i)
the breach by the Seller of any representation or warranty made by him in this
Agreement or in any agreement, certificate or other document executed by the
Seller and delivered to the Purchaser pursuant to the provisions of this
Agreement; (ii) the failure of the Seller to perform any agreement required by
this Agreement or any agreement executed pursuant to the provisions of this
Agreement; (iii) the allegation by any third party of the existence of any
liability, obligation, lease, agreement, contract, other commitment or state of
facts which, if such allegation were true, would constitute a breach by the
Seller of any representation or warranty made by him in this Agreement or in any
agreement, certificate or other document delivered by or on behalf of the Seller
to the Purchaser pursuant to the provisions of this Agreement or of any covenant
made by the Seller herein or therein.
Section 9.02 By the Purchaser. The Purchaser agrees to indemnify and hold
harmless the Seller against, and to reimburse the Seller on demand with respect
to, any and all Losses which the Seller may suffer, incur or pay by reason of
(i) the breach by the Purchaser of any representation or warranty made by it in
this Agreement or in any agreement, certificate or other document executed by
the Purchaser and delivered to the Seller pursuant to the provisions of this
Agreement; (ii) the failure of the Purchaser to perform any agreement required
by this Agreement or any agreement executed pursuant to the provisions of this
Agreement; and (iii) the allegation by any third party of the existence of any
liability, obligation, lease, agreement, contract, other commitment or state of
facts which, if such allegation were true, would constitute a breach by the
Purchaser of any representation or warranty made by it in this Agreement or in
any agreement, certificate or other document delivered by or on behalf of the
Purchaser to the Seller pursuant to the provisions of this Agreement or of any
covenant made by the Purchaser herein or therein.
Section 9.03 Indemnification Procedure. The Purchaser Parties, in the case
of Section 9.01 hereof, and the Seller, in the case of Section 9.02 hereof
(hereinafter, the applicable party or
17
parties providing indemnity, the "Indemnifying Party" and the party or parties
being indemnified, the "Indemnified Party") agree to give the Indemnifying Party
prompt written notice of the allegation by any third party of the existence of
any liability, obligation, lease, agreement, contract, other commitment or state
of facts referred to in clause (iii) of Sections 9.01 and 9.02 hereof, as
applicable. The Indemnifying Party shall be entitled, at his or its sole cost
and expense, to participate in and to control the contest, defense, settlement
or compromise of any claim if the Indemnifying Party shall agree in writing
within 15 days after the receipt of notice of such claim that it is required,
pursuant to this Article 9, to indemnify the Indemnified Party for the full
amount of such claim (the "Claim Acknowledgement Procedure"). If the
Indemnifying Party shall assume the defense of a claim hereunder, the
Indemnified Party shall be kept informed with respect to, and shall have the
right to participate in, the contest, defense, settlement or compromise of any
such claim. If the Indemnifying Party does not assume the defense of a claim
within a reasonable time after notice thereof or, after assumption, does not
thereafter diligently pursue such defense or does not comply with the Claim
Acknowledgement Procedure, the Indemnified Party shall be entitled to defend,
settle or compromise such matter for the account and at the expense of the
Indemnifying Party. Notwithstanding the foregoing provisions of this Section
9.03, the Indemnified Party shall have the sole right to control the contest,
defense, settlement or compromise of any claim if such claim is not a claim
solely for monetary damages.
Article 10.
MISCELLANEOUS
Section 10.01 Survival of Representations and Warranties. All statements,
certifications, indemnification's, representations and warranties made hereby by
the parties to this Agreement and their respective covenants, agreements and
obligations to be performed pursuant to the terms hereof shall, unless waived in
writing and notwithstanding any examination by or on behalf of any party hereto
and notwithstanding the consummation of the transactions hereby contemplated,
survive the closing of the transactions hereby contemplated for a period of 24
months; provided, however, that the representations and warranties set forth in
Section 3.20 and Section 3.21 shall survive the closing of the transactions
hereby contemplated for a period of five years.
Section 10.02 Merger Provision. All prior or contemporaneous agreements,
contracts, promises, representations and statements, if any, among the parties
hereto as to the subject matter hereof, are merged into this Agreement. This
Agreement, together with all agreements, schedules, exhibits, documents and
other instruments to be attached hereto or delivered herewith sets forth the
entire understanding between the parties, and there are no terms, conditions,
representations, warranties or covenants other than those contained herein and
in such agreements, schedules, exhibits, documents and other instruments to be
attached hereto or delivered herewith.
Section 10.03 Amendment and Modification. No term or provision of the
Agreement may be amended, released, discharged or modified in any respect except
in writing signed by the party to be charged and only to the extent therein set
forth.
Section 10.04 Waiver. (a) No waiver shall be deemed to be made by any of
the parties to any of its rights hereunder unless that waiver shall be in a
writing signed by the waiving party and only to the extent therein set forth.
18
(b) No failure of any of the parties to exercise any power
given such party hereunder or to insist upon strict compliance by any other
party with its obligations hereunder, and no custom or practice of the parties
at variance with the terms hereof shall constitute a waiver of the right of any
party to demand precise compliance with the terms of the Agreement.
Section 10.05 Notices. (a) All notices, consents, demands or other
communications required or permitted to be given pursuant to the Agreement shall
be in writing and shall be deemed sufficiently given on (i) the day on which
delivered personally or by telecopy (with prompt confirmation by mail) during a
business day to the appropriate location listed as the address below, (ii) three
business days after the posting thereof by United States registered or certified
first class mail, return receipt requested with postage and fees prepaid, or
(iii) one business day after deposit thereof for overnight delivery. Such
notices, consents, demands or other communications shall be addressed
respectively:
As to the Seller: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
As to the Purchaser: Ergovision, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Rosenman & Colin LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to any other address or telecopy number which such party may have
subsequently communicated to the other parties in writing.
(b) Except as otherwise provided in this Agreement, any
notice, consent, demand or other communication given hereunder may be signed on
behalf of a party by any duly authorized representative of that party.
Section 10.06 Governing Law; Service of Process. This Agreement and any
other agreement entered into in connection herewith shall be governed by, and
construed under and in accordance with, the laws of the State of New York
applicable to contracts made and wholly to be performed therein by residents
thereof, without giving effect to the conflict of laws principles thereof. All
actions or proceedings seeking the interpretation and/or enforcement of this
agreement shall be brought only in the state or federal courts located in New
York County, all parties hereby submitting themselves to the jurisdiction of
such courts for such purpose. Any process in any action or proceeding commenced
in the courts of the State of New York arising out of any claim, dispute or
disagreement, may, among other methods, be served upon any party
19
by delivering or mailing the same, via registered or certified mail, addressed
to such party pursuant to Section 10.05 hereof. Any such delivery or mail
service shall be deemed to have the same force and effect as personal service
within the State of New York, New York County.
Section 10.07 Captions. The captions and the table of contents appearing
in this Agreement, are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope or intent of this
Agreement or any of the provisions hereof.
Section 10.08 Severability. If any term or provision of this Agreement,
the application thereof to any person, or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of the Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held void or unenforceable, shall not be affected thereby, and each term
and provision of the Agreement shall be valid and be enforced to the fullest
extent permitted by law.
Section 10.09 Publicity. Any communications and notices to third parties
and all other publicity concerning the transactions contemplated by the
Agreement (other than governmental or regulatory filings) shall be planned and
coordinated by and among the parties. Unless required by applicable law, none of
the parties shall disseminate or make public or cause to be disseminated or made
public any information regarding the transactions contemplated hereunder without
the prior written approval of the other parties, which approval shall not be
unreasonably withheld.
Section 10.10 Cumulative Rights and Remedies. The rights and remedies
provided for in this Agreement are cumulative and in addition to, and shall not
restrict or limit, any other rights and remedies available at law or in equity.
Section 10.11 Expenses. Each of the parties hereto shall bear its own
expenses associated with the negotiation and execution of the Agreement and the
consummation of the transactions contemplated hereby including, without
limitation, legal and accounting fees and expenses.
Section 10.12 Costs of Enforcement. The prevailing party in any proceeding
brought to enforce any provision of the Agreement shall be entitled to recover
the reasonable fees and costs of its counsel, plus all other costs of such
proceeding.
Section 10.13 Third Parties Other than the parties hereto, no person shall
have any rights under or to enforce any provision of this Agreement.
Section 10.14 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
administrators, executors, successors and assigns; provided, however, that this
Agreement may not be assigned by any of the parties hereto other than by and
among the Purchaser and its subsidiaries.
Section 10.15 Counterparts. The Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single agreement.
20
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
12th day of March, 1999.
ERGOVISION, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
21