EXHIBIT 16.1
ASSET PURCHASE AGREEMENT
AMONG
WATCH JUNCTION, INC.
("BUYER")
AND
TAKE TO XXXXXXX.XXX, INC.
("SELLER")
DATED AS OF FEBRUARY 19, 2003
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") entered into as of February 19,
2003, by and among WATCH JUNCTION, INC., a Florida Corporation ("Buyer"), and
TAKE TO XXXXXXX.XXX, INC., a Florida corporation ("Seller"). Buyer and Seller
are referred to collectively herein as the "Parties".
R E C I T A L S
WHEREAS, the respective Boards of Directors of Buyer and Seller have
approved and have declared advisable the sale by Seller of certain assets to
Buyer (the "Sale") upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Parties desire to make certain representations,
warranties, covenants and agreements in connection with the Sale and also to
prescribe various conditions to the Sale;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.01 DEFINED TERMS. The following terms shall have the meanings set forth
herein for the purposes of the transactions described in this
Agreement. All defined terms shall include the singular and plural.
ACTION means any claim, action, suit, arbitration, inquiry, proceeding
actually filed and for which any of the Sellers have received notice or
those Sellers' managers know are threatened.
AFFILIATE means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
specified Person.
ASSET PURCHASE PRICE has the meaning set forth in SECTION 2.02.
BUSINESS DAY means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by Law to be closed in
the State of Florida.
BUYER has the meaning set forth in the preface above.
CLOSING has the meaning set forth in SECTION 2.03.
CLOSING DATE has the meaning set forth in SECTION 2.03.
CONFIDENTIAL INFORMATION means any information concerning the Purchased
Assets, Seller or the businesses and affairs of Seller that is not
already generally available to the public.
ENCUMBRANCE means any security interest, pledge, mortgage, lien,
charge, encumbrance, preferential arrangement or restriction of any
kind, including, without limitation, any restriction on the use,
voting, transfer, receipt of income or other exercise of any attributes
of ownership.
GOVERNMENTAL AUTHORITY means any United States federal, state or local
or any foreign government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or
arbitral body.
GOVERNMENTAL ORDER means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
INDEBTEDNESS means, for any Person without double counting, (a) all
indebtedness or other obligations of such Person for borrowed money or
for the deferred purchase price of property or services, (b) all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person, or (c) all obligations under leases that are or should be, in
accordance with generally-accepted accounting principles, recorded as
capital leases in respect of which such Person is liable as lessee.
INTELLECTUAL PROPERTY means (a) trademarks, service marks, trade dress,
logos, trade names and corporate names, whether or not registered, (b)
copyrights, whether or not registered, and all patents, patent
applications and inventions and discoveries, (c) registrations of and
applications for registration of any of the foregoing, (d) computer
software, including, without limitation, source code, operating systems
and specifications, data, data bases, files, documentation and other
materials related thereto, (e) trade secrets and confidential,
technical and business information, and (f) whether or not
confidential, technology (including, without limitation, know-how and
show-how), research and development information, drawings, plans,
proposals, technical data, copyrightable works, financial, marketing
and business data, pricing information, business and marketing plans
and customer and supplier lists and information whether or not such
items are (1) created by Seller or any other Person or (2) are complete
and functional or incomplete.
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KNOWLEDGE (including, without limitation, the terms "KNOW", "KNOWING",
"BEST KNOWLEDGE", or "TO THE BEST KNOWLEDGE OF") means knowledge with
reasonable investigation.
LAW or LAWS means any United States federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, order, permit, other
legal requirement or rule of law.
LEASE means any and all leases, subleases, sale/leaseback agreements,
occupancy agreements or similar arrangements, whether or not
capitalized, comprising a portion of the Purchased Assets.
LIABILITIES means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured
or determined or determinable, including, without limitation, those
arising under any Law (including, without limitation, any Environmental
Law), Action or Governmental Order and those arising under any
contract, agreement, arrangement, commitment or undertaking.
LICENSED INTELLECTUAL PROPERTY means all Intellectual Property,
comprising a portion of the Purchased Assets, licensed or sub-licensed
to Seller from a third party.
MATERIAL ADVERSE EFFECT means any circumstance, change in, or effect on
the Purchased Assets or Sellers that, individually or in the aggregate
with any other circumstances, changes in, or effects on, the Purchased
Assets or Sellers, and which: (a) is materially adverse to the
Purchased Assets, Sellers, their operations, prospects, results of
operations or financial condition, or (b) materially and adversely
affects the ability of the Buyer to own and operate the Purchased
Assets in the manner in which they are currently owned and operated by
Sellers.
OFFICERS means the corporate officers and managers of Seller.
OWNED INTELLECTUAL PROPERTY means all Intellectual Property, comprising
a portion of the Purchased Assets, in and to which Sellers hold, or has
a right to hold, any right, title and interest.
PARTY has the meaning set forth in the preface above.
PERSON means an individual, a partnership, a limited partnership, a
limited liability 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).
PURCHASED ASSETS has the meaning set forth in SECTION 2.01.
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SALE has the meaning set forth in the Recitals above.
SELLER has the meaning set forth in the preface above.
SUBSIDIARIES means any and all corporations, partnerships, joint
ventures, limited liability companies, associations and other entities
controlled by the Seller directly or indirectly through one or more
intermediaries.
1.02 OTHER CAPITALIZED TERMS. All capitalized terms not otherwise defined in
SECTION 1.01 shall have the meaning given such terms elsewhere in this
Agreement.
1.03 INTERPRETATION. All defined terms in this Agreement shall include the
singular and plural, and the masculine and feminine of such terms.
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.01 PURCHASE AND SALE OF PURCHASED ASSETS. On and subject to the terms and
conditions of this Agreement, at the Closing, Buyer agrees to purchase
from the Seller, and the Seller agrees to sell, convey and transfer to
the Buyer, all of the Seller's right, title and interest in and to the
assets and properties identified on SCHEDULE 2.01 (the "Purchased
Assets") for the consideration specified in SECTION 2.02. Seller shall
convey good and marketable title to the Purchased Assets, free and
clear of all Encumbrances.
At time of Closing, Seller will grant Xxxxxxxxxx.xxx, Inc. and Buyer an
exclusive right to use any and all systems and Intellectual Property
needed to run and operate TTA Direct and Xxxxxxxxxx.xxx.
Buyer retains the sole exclusive ownership of TTA Auctions and TTA
Superstores.
2.02 PURCHASE PRICE. The purchase price for the Purchased Assets shall be
Fifty Thousand and No/100 ($50,000.00) Dollars (the "Asset Purchase
Price"), which shall be allocated among the Purchased Assets as set
forth on SCHEDULE 2.01. The Asset Purchase Price shall be payable as
follows:
(A) upon the execution of this Agreement at the Closing:
(1) Fifty Thousand and No/100 ($50,000.00) Dollars by
wire transfer to an account designated in writing by
Seller; and
(2) Three hundred and five thousand six hundred and ten
(305,610) Shares of Nimbus Group, Inc. common stock
(the "Shares") to Parent.
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2.03 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Nimbus
Group, Inc. in Fort Lauderdale, Florida on February 19, 2003 (the
"Closing Date").
2.04 CLOSING DELIVERIES BY THE SELLERS. At the Closing, the Seller shall
deliver or cause to be delivered to the Buyer:
(A) a receipt from the Seller; and
(B) Board of Director minutes approving this Agreement.
2.05 CLOSING DELIVERIES BY THE BUYER. At the Closing, the Buyer shall
deliver to the Seller:
(A) the cash portion of the Asset Purchase Price; and
(B) notice of the transfer of the Shares.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Seller and Parent, jointly, severally and IN SOLIDO, represent and
warrant to Buyer that the statements contained in this Article 3 are correct and
complete as of the Closing.
3.01 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Seller is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Florida and has the corporate power and
authority to own its properties and assets and to carry on its business
as it is now being conducted and is duly qualified to do business and
is in good standing in each jurisdiction in which the ownership of its
properties or the conduct of its business requires such qualification.
3.02 AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION. Seller has the
corporate power and authority to enter into this Agreement and to carry
out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been authorized by the Board of Directors of the Seller. No other
corporate or other proceedings are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Seller and, assuming
this Agreement constitutes a valid and binding Agreement of the other
parties hereto, this Agreement constitutes a valid and binding
agreement of Seller, enforceable against Seller in accordance with its
terms.
3.03 INVESTIGATIONS; LITIGATION.
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(A) No investigation or review by any governmental body or
authority with respect to Seller is pending, nor has any
governmental body or authority notified Seller of an intention
to conduct the same; and
(B) There are no Actions, suits, or proceedings pending or
threatened (to the knowledge of Seller or its respective
officers, directors and managers) against or affecting Seller,
or any of its respective properties at law or in equity, or
before any federal, state, local, or foreign governmental body
or authority.
3.04 INTELLECTUAL PROPERTY.
(A) SCHEDULE 2.01 sets forth a list of the Owned Intellectual
Property including any trademarks, service marks, corporate
and assumed names, trade names and copyrights, patents and
pending registrations and applications. To the best of
Seller's knowledge, the rights of Seller in or to such
Intellectual Property do not conflict with or infringe on the
rights of any other Person, and Seller has not received any
claim or written notice of infringement or conflict in respect
of any Intellectual Property.
(B) (i) All the Owned Intellectual Property is owned by Seller,
free and clear of any Encumbrance, (ii) Seller has the right,
pursuant to valid and enforceable licenses, to use the
Licensed Intellectual Property in the manner in which the
Licensed Intellectual Property is currently being used and
(iii) no Actions have been made or asserted or are pending
(nor, to the best of Seller's knowledge, has any such Action
been threatened) against Seller, either (A) based upon or
challenging or seeking to deny or restrict the use by Seller,
of any of the Intellectual Property or (B) alleging that any
services provided or products sold by Sellers are being
provided or sold in violation of any trademarks, or any other
rights, of any Person. To the best of Seller's knowledge, no
Person is using any trademarks, service marks, trade names, or
similar property that are confusingly similar to the Owned
Intellectual Property, and no Person is making, using, or
selling any product or practicing any method that infringes
upon the Owned Intellectual Property or upon the rights of
Seller therein. Seller has not granted any license or other
right to any other Person with respect to the Owned
Intellectual Property. The consummation of the transactions
contemplated by this Agreement will not result in the
termination or impairment of any of the Owned Intellectual
Property or any of the rights of Seller in any of the Licensed
Intellectual Property.
(C) The Intellectual Property described in SCHEDULE 2.01
constitutes most of the Intellectual Property used or held or
intended to be used by Seller or forming a part of all such
Intellectual Property necessary and material in the conduct of
Seller's business.
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3.05 TANGIBLE PERSONAL PROPERTY.
(A) SCHEDULE 2.01 lists the equipment, inventory, supplies,
furniture, fixtures, and other tangible personal property
comprising a portion of the Purchased Assets (the "Tangible
Personal Property").
3.06 OWNERSHIP, TITLE, CONDITION, ETC., OF THE PURCHASED ASSETS.
(A) Seller owns the Purchased Assets of which it is identified as
the owner including, without limitation, the Tangible Personal
Property identified in Schedule 2.01. No Person other than
Seller owns, holds title to or has any other direct or
indirect or beneficial interest in the Tangible Purchased
Assets. Seller has good and marketable title to all of the
Tangible Purchased Assets owned by them, free and clear of all
Encumbrances.
(B) All the Purchased Assets, are (as a whole) structurally sound,
are in good operating condition and repair, and are adequate
for the uses to which they are being put, and none of the
other assets (as a whole) is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs. Such
assets (as a whole) are sufficient and able to conduct
Seller's business as it is being conducted by Seller prior to
the Closing and are sold in an "as is" condition.
(C) Immediately following the Closing, Buyer will own, pursuant to
good and marketable title, the Purchased Assets, without
incurring any penalty or other adverse consequence, including,
without limitation, any increase in rentals, royalties, or
licenses or other fees imposed as a result of, or arising
from, the consummation of the transactions contemplated by
this Agreement. Immediately following the Closing, Buyer shall
own and possess all presently existing documents, books,
records, agreements and financial data of any sort relating to
such Purchased Assets used by Seller or necessary for the
conduct of Seller's business as it is being conducted by
Seller prior to the Closing.
ARTICLE 4
CONDITIONS TO CLOSING
4.01 CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived by Seller in writing,
and Buyer shall use its reasonable best efforts to cause such
conditions to be fulfilled:
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(A) COVENANTS. The covenants and agreements contained in this
Agreement to be complied with by the Seller on or before the
Closing shall have been complied with;
(B) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations
and warranties of Seller contained in this Agreement shall
have been true and correct as of the date as of which they
were deemed to have been made and shall be true and correct in
all material respects as of the Closing, with the same force
and effect as if made as of the Closing except for such
changes as are permitted or contemplated by this Agreement,
other than such representations and warranties as are made as
of another date. The covenants and agreements contained in
this Agreement to be complied with by Seller on or before the
Closing shall have been complied with. Buyer shall have
received a certificate from Seller to such effect dated as of
the Closing Date;
(C) NO PROCEEDING OR LITIGATION. No Action shall have been
commenced or threatened by or before any Governmental
Authority against Seller seeking to restrain or adversely
alter the transactions contemplated hereby or which is likely
to render it impossible or unlawful to consummate the
transactions contemplated by this Agreement;
(D) RELEASE OF ENCUMBRANCES. Buyer shall have received evidence of
removal of all Encumbrances on the Purchased Assets, each to
be in form and substance reasonably satisfactory to Buyer;
(E) RESOLUTIONS. Buyer shall have received true and complete
copies, certified by the Secretary or an Assistant Secretary
of Seller's resolutions duly and validly adopted by the Board
of Directors or other governing body of Seller evidencing
their authorization of the execution and delivery of this
Agreement and the other agreements to be executed by Seller as
contemplated hereby and the consummation of the transactions
contemplated hereby;
(F) NO MATERIAL ADVERSE EFFECT. No event or events shall have
occurred which, individually or in the aggregate, have a
Material Adverse Effect on Seller taken as a whole.
4.02 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any of which may be waived by Buyer in writing,
and Seller shall use its reasonable best efforts to cause such
conditions to be fulfilled:
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(A) COVENANTS. The covenants and agreements contained in this
Agreement to be complied with by the Buyer on or before the
Closing shall have been complied with;
(B) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations
and warranties of Buyer contained in this Agreement shall have
been true and correct as of the date as of which they were
deemed to have been made and shall be true and correct in all
material respects as of the Closing, with the same force and
effect as if made as of the Closing except for such changes as
are permitted or contemplated by this Agreement, other than
such representations and warranties as are made as of another
date. The covenants and agreements contained in this Agreement
to be complied with by Buyer on or before the Closing shall
have been complied with. ;
(C) NO PROCEEDING OR LITIGATION. No Action shall have been
commenced or threatened by or before any Governmental
Authority against Buyer seeking to restrain or adversely alter
the transactions contemplated hereby or which is likely to
render it impossible or unlawful to consummate the
transactions contemplated by this Agreement;
(D) RESOLUTIONS. Seller shall have received true and complete
copies, certified by the Secretary or an Assistant Secretary
of Buyer's resolutions duly and validly adopted by the Board
of Directors or other governing body of Buyer evidencing their
authorization of the execution and delivery of this Agreement
and the other agreements to be executed by Buyer as
contemplated hereby and the consummation of the transactions
contemplated hereby;
(E) NO MATERIAL ADVERSE EFFECT. No event or events shall have
occurred which, individually or in the aggregate, have a
Material Adverse Effect on Buyer taken as a whole.
ARTICLE 5
POST-CLOSING COVENANTS; RELATED TRANSACTIONS
5.01 FURTHER ASSURANCES. In case up to 30 days after the Closing any further
action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers of Seller and Buyer shall take all such
necessary action.
ARTICLE 6
INDEMNIFICATION
6.01 INDEMNIFICATION. Seller, severally and IN SOLIDO, shall indemnify and
hold harmless Buyer, its parent corporation, Subsidiaries, Affiliates,
officers, directors, shareholders employees and agent, for any and all
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liabilities, losses, damages, claims, costs and expenses, including the
reasonable attorney, accountant and expert fees (collectively,
"Losses") actually suffered or incurred by Buyer arising out of (i) the
inaccuracy of any representation and warranty made by Seller in this
Agreement, (ii) the breach of any covenant or (iii) any Liabilities or
Indebtedness of Seller, Parent or their Subsidiaries or Affiliates that
is not an Assumed Liability of Buyer.
Buyer, severally and IN SOLIDO, shall indemnify and hold harmless
Seller, its Subsidiaries, Affiliates, officers, directors, shareholders
employees and agent, for any and all liabilities, losses, damages,
claims, costs and expenses, including the reasonable attorney,
accountant and expert fees (collectively, "Losses") actually suffered
or incurred by Seller arising out of (i) the inaccuracy of any
representation and warranty made by Buyer in this Agreement, (ii) the
breach of any covenant or (iii) any Liabilities or Indebtedness of
Buyer or their Subsidiaries or Affiliates that is not an Assumed
Liability of Seller.
ARTICLE 7
MISCELLANEOUS
7.01 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; provided, however, that
the provisions in ARTICLE 2 above concerning payment of the Asset
Purchase Price are intended for the benefit of Seller and its
stockholders.
7.02 ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by
or among the Parties, written or oral, to the extent they related in
any way to the subject matter hereof.
7.03 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 Parties.
7.04 COUNTERPARTS. This Agreement may be executed in one or more
counterparts by facsimile, each of which shall be deemed an original
but all of which together will constitute one and the same instrument.
Facsimile signatures will be followed-up with original signatures being
sent to the other parties
7.05 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.
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7.06 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, or by
facsimile transmission (with confirmation) and addressed to the
intended recipient as set forth below:
IF TO BUYER
Xxxxxx Xxxxxxxx
Watch Junction, Inc.
0000 XX 00xx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
(000) 000-0000
IF TO SELLER:
Xxxx Xxxxxx
Take to Xxxxxxx.xxx, Inc.
0000 Xxxxxxx Xxx.
Xxxxx 00
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
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
Parties notice in the manner herein set forth.
7.07 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without
regard to the principles of conflicts of laws thereof.
7.08 SEVERABILITY. Any term or provision of this Agreement that is
determined to be invalid or unenforceable by a court of competent
jurisdiction 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. The Parties agree
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that a court of competent jurisdiction shall have the authority to
reform any clause or provision that is deemed to be overbroad or
unenforceable in order to make said clause or provision enforceable
within its jurisdiction. Such reformation shall not modify this
Agreement and its enforceability of the original provision within other
jurisdictions.
7.09 EXPENSES. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
7.10 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 otherwise requires. The word "including" shall mean
including without limitation.
7.11 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and
made a part hereof.
7.12 UNDERSTANDING. The Parties stipulate and agree that at all times during
the course of the negotiations surrounding the execution and delivery
of this Agreement, they, to the extent deemed necessary or advisable in
their sole discretion, have been advised and assisted by competent
counsel of their own choosing and that they have been fully advised by
such counsel of the effect of each term, condition, provision and
stipulation contained herein.
7.13 SURVIVAL. The representations, warranties, covenants and
indemnification obligations of the Parties will survive the Closing
Date for a period of eighteen (18) months.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
WATCH JUNCTION, INC.
BUYER
By: /s/ XXXXXX XXXXXXXX
---------------------------
Xxxxxx Xxxxxxxx
President
TAKE TO XXXXXXX.XXX, INC.
SELLER
By: /s/ XXXX XXXXXX
---------------------------
XXXX XXXXXX
Chief Executive Officer
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