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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of the 5th day of May, 2000 (the "Effective Date"), by and among EBSCO
XXXXXX, Inc., an Alabama corporation, with its principal offices at 00 Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 ("Seller"), xXxxxx.xxx, Inc. a Delaware
corporation, with its principal offices at 00 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000 ("iNetze"), and ESRN Acquisition, LLC, a Delaware limited
liability company, with its principal offices at 0000 Xxxxxx Xxxxx Xxxx., Xxxxx
000, Xxxxxx, Xxxxx 00000 ("Buyer"), and CT Holdings, Inc., a Delaware
corporation and parent of Buyer ("CT"), with its principal offices at 0000
Xxxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxx, Xxxxx 00000.
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, substantially all of the assets of the Curriculum Network Core
Database Management and Tool Suite applications system (the "Business"). The
Business is a set of electronic tools designed for use by school administrators,
teachers, students and parents to assist in curriculum development,
implementation and management, and for student learning. The Business includes
Teacher Tool Suite, Student Tool Suite, Parent Tool Suite, Learning Application
Communications Component, Administration Tool Suite and Curriculum Network Core
Database Management System.
WHEREAS, the parties hereto acknowledge that simultaneously with the
purchase of the Business by Buyer, Buyer will contribute the Business to iNetze
as part of that single tax-free exchange under Section 351 of the Internal
Revenue Code of 1986, as amended ("the Code"), and the Treasury Regulations
promulgated thereunder, comprised of (i) the merger of ArtLog, Inc. with and
into iNetze, (ii) the merger of COR Decision Support Systems, L.L.C. with and
into iNetze, and (iii) the contribution of the Business by Buyer to iNetze.
WHEREAS, Seller acknowledges that iNetze is a party to this Agreement
solely for the purpose of receiving the representations and warranties of Seller
with respect to Seller, the Business (as defined hereinbelow) and the Assets (as
defined hereinbelow).
WHEREAS, Seller acknowledges that but for the agreement by and between
Buyer and iNetze for the contribution of the Assets to iNetze, Buyer would not
have entered into this Agreement to purchase the Business from Seller nor would
CT transfer any of the Common Stock (as defined hereinbelow) to Seller as
provided herein.
NOW, THEREFORE, for and in consideration of the mutual representations,
warranties, covenants and agreements hereinafter set forth and other good and
valuable consideration, and upon the terms and subject to the conditions
hereinafter set forth, the parties do hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale of Assets.
(a) Upon the terms and subject to the conditions of this
Agreement, Seller will sell, convey, transfer, assign and deliver to Buyer, and
Buyer will acquire and accept from
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Seller, at the Closing (as that term is defined in Section 9.1), all
source code of the files listed on Schedule 1.1A relating to the Business
(hereinafter collectively referred to as the "Assets"), free and clear of
any and all options, pledges, mortgages, security interests, liens,
charges, adverse claims, rights, restrictions, burdens and encumbrances
whatsoever (collectively and individually, "Encumbrances"). A more
complete description of the Assets is set forth on Schedule 1.1A attached
hereto and made a part hereof.
(b) The Assets shall not include the following items (the
"Excluded Assets"):
(i) Any existing curriculum product of Seller, including,
but not limited to, Seller's Online Reader product line and
EBSCOLearn product line; and
(ii) Any other property or right, tangible or intangible, of
Seller and any and all products, profits and proceeds of the
foregoing.
1.2 Transfer and Conveyance. Seller shall execute and deliver to Buyer at
the Closing a Xxxx of Sale and Assignment in substantially the form attached
hereto as Exhibit A and all such other assignments, endorsements and instruments
of transfer as shall be necessary or appropriate to carry out the intent of this
Agreement and as shall be sufficient to vest in Buyer title to all of the Assets
and all right, title and interest of Seller thereto.
1.3 No Assumption of Obligations. Buyer shall not assume and shall not be
liable for any debts, contracts, leases, liabilities, arrangements, commitments,
obligations, restrictions, disabilities or duties of Seller, other than the
assumed obligations listed on Schedule 1.3 (the "Assumed Liabilities") and those
arising on or after the Effective Date. Buyer shall execute and deliver to
Seller at the Closing (as defined in Section 9.1 hereof) an Assumption Agreement
in substantially the form attached hereto as Exhibit B.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. The purchase price for the Assets shall be
$1,587,334.13 to be paid on behalf of Buyer by CT by the issuance and delivery
of 666,667 shares of CT's unregistered common stock, par value $.01 per share
(the "Common Stock"). The market price of the Common Stock shall be deemed to be
the average of the closing prices for the Common Stock on the NASDAQ SmallCap
Market for the ten (10) consecutive trading days ending on the third trading day
preceding the Closing Date.
2.2 Tax Filings. Seller, Buyer and CT agree to file all income tax
returns or reports, including without limitation, IRS Form 8594, for their
respective taxable years in which the Closing occurs to reflect an allocation of
the total consideration in a consistent manner and not to take any position
inconsistent therewith before any governmental agency charged with the
collection of taxes or in any judicial proceeding relating solely to tax
reporting. Prior to Closing, Buyer and Seller shall jointly prepare and agree
upon a preliminary allocation of the total consideration of Seller.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, CT and iNetze as follows:
3.1 Due Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Alabama, and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on the Business as it is presently being
operated and in the place where such properties are owned, leased or operated
and such Business is conducted. Seller is duly qualified or licensed as a
foreign corporation and in good standing in each jurisdiction in which the
character or location of the property owned, leased or operated by it or the
nature of the Business conducted by it makes such qualification necessary,
except where the failure to be so qualified or licensed would not have a
material adverse effect on the business, operations, properties, assets or
condition (financial or otherwise), results of operations or prospects (a
"Material Adverse Effect") of Seller, the Assets or the Business. Set forth on
Schedule 3.1 is a list of the jurisdictions in which Seller is qualified or
licensed to do business as a foreign corporation. Set forth in Schedule 3.1 is a
listing of all names of all predecessor companies of Seller for the past five
(5) years, including the names of any entities from whom Seller acquired
material assets during such period, and of all names under which Seller does or
has done business during such period.
3.2 Title. Seller has, and upon conveyance of the Assets to Buyer at the
Closing, Buyer will acquire and hold, good and marketable title in and to all of
the Assets described on Schedule 1.1A and good title to all of the other Assets,
whether real, personal or mixed, owned by Seller, free and clear of any and all
Encumbrances except as set forth on Schedule 3.2.
3.3 Inventory and Other Assets. The inventory of Seller consists of
current items of a quality and quantity that are usable or marketable in the
ordinary course of the business of Seller and items not usable in the business
of Seller have been written down in value in accordance with the normal business
practice of Seller to estimated net realizable market values.
With regard to such of the Assets listed on Schedule 1.1A that are
software or software components of hardware (hereinafter called the "Software"),
Seller is the owner of the Software free and clear of any liens, encumbrances,
judgements, license agreements, user agreements, and rights of other persons not
party to this Agreement. The Software has not been "published" (within the
meaning of applicable copyright laws) and is confidential and proprietary to
Seller. Seller has protected the Software as a trade secret and no disclosure of
the Software has been made to any person in such a manner as would cause the
Software to lose, reduce, or impair its status as trade secrets that are
proprietary to Seller. To the extent that the Software, online access or Web
site has been developed by any party to this Agreement, such parties acknowledge
that such developed assets are currently owned by Seller, and such party
disclaims any personal interest in such assets. Any of the Software developed by
persons not parties to this Agreement has been fully paid for by Seller, and the
developer or developers of such portion of the Software have no rights to or in
any of the Software. Seller agrees to destroy all existing copies of the source
code of the Software in their personal possession or control in whatever form it
currently exists after delivering the Software to Buyer on the Closing Date
pursuant to the provisions of this Agreement.
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Each person, partnership, association, trust, limited liability company,
joint venture or governmental entity who have contributed to or participated in
the conception and development of the Software on behalf of Seller either have
been (i) employees of the Seller working within the scope of their employment at
the time of such contribution or participation, or (ii) agents, consultants or
contractors who have executed appropriate instruments of assignment in favor of
Seller as assignee that have conveyed to Seller full, effective, and exclusive
ownership of all tangible and intangible property thereby arising.
The transactions contemplated herein will not cause a breach or default
under any Contract relating to the Software or impair Buyer's (and ultimately
iNetze's) ability to use the Software in the same manner as such Software is
currently used in the business of Seller.
3.4 Intellectual Property. Schedule 3.4 lists the domestic and foreign
trade names, trademarks, service marks, trademark registrations and
applications, service xxxx registrations and applications, patents, patent
applications, patent licenses, software licenses and copyright registrations and
applications owned by Seller or used thereby in the operation of the Business
(collectively, the "Intellectual Property") and comprising a portion of the
Assets, which Schedule indicates (i) the term and exclusivity of its rights with
respect to the Intellectual Property and (ii) whether each item of Intellectual
Property is owned or licensed by Seller, and if licensed, the licensor and the
license fees therefor. Unless otherwise indicated on Schedule 3.4, Seller has
the right to use and license the Intellectual Property and to transfer and
convey the Intellectual Property. Each item constituting part of the
Intellectual Property has been, to the extent indicated on Schedule 3.4,
registered with, filed in or issued by, as the case may be, the United States
Patent and Trademark Office or such other government entity, domestic or
foreign, as is indicated on Schedule 3.4; all such registrations, filings and
issuances remain in full force and effect; and all fees and other charges with
respect thereto are current. Except as stated on Schedule 3.4, there are no
pending proceedings or adverse claims made or, to the best knowledge of Seller,
threatened against Seller with respect to the Intellectual Property; there has
been no litigation commenced or threatened in writing since August 1999 with
respect to the Intellectual Property or the rights of Seller therein; the
Intellectual Property performs in all respects in the manner described or
represented by Seller in all proposals, bids, specifications, documentation,
promotional materials and sales literature prepared thereby or delivered on
behalf of it and performs in all respects the functions necessary for the
conduct of Seller's business and operations, free of any deficiency,
imperfection or insufficiency that would be reasonably likely to have a Material
Adverse Effect; and Seller has no knowledge that (i) the Intellectual Property
or the use thereof by Seller or by Buyer or iNetze after the Closing conflicts
or will conflict with any trade names, trademarks, service marks, trademark or
service xxxx registrations or applications, patents, patent applications, patent
licenses or copyright registrations or applications of others ("Third Party
Intellectual Property"), or (ii) such Third Party Intellectual Property or its
use by others or any other conduct of a third party conflicts with or infringes
upon the Intellectual Property or its use by Seller or Buyer or iNetze after the
Closing.
3.5 Permits. Seller holds all licenses, franchises, permits and other
governmental authorizations, including permits, licenses, franchises,
certificates, trademarks, trade names, patents, patent applications and
copyrights owned or held by Seller, the absence of any of which would have a
Material Adverse Effect on the Business (the "Material Permits"). An accurate
list and summary description is set forth on Schedule 3.5 hereto of all such
Material Permits. Except as set forth in Schedule 3.5, the Material Permits are
valid and may be transferred to Buyer at the
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Closing, and Seller has not received any notice that any governmental authority
intends to cancel, terminate or not renew any such Material Permit. Seller has
conducted and is conducting the Business in compliance with the requirements,
standards, criteria and conditions set forth in applicable permits, licenses,
orders, approvals, variances, rules and regulations and is not in violation of
any of the foregoing except where such noncompliance or violation would not have
a Material Adverse Effect. Except as specifically provided on Schedule 3.5, the
transactions contemplated by this Agreement will not result in a default under
or a breach or violation of, or adversely affect the rights and benefits
afforded to Seller or to Buyer or iNetze after the Closing by, any such Material
Permits.
3.6 Compliance with Laws. Seller (i) has complied with all laws,
regulations, licensing requirements and orders applicable to its business or
personnel, (ii) has filed with the proper authorities all statements and reports
required by the laws, regulations, licensing requirements and orders to which it
or any of its employees (because of their activities on behalf of their
employer) is subject, and (iii) possesses all necessary licenses, franchises,
permits and governmental authorizations to conduct the Business in the manner in
which and in the jurisdictions and places where such Business is now conducted.
3.7 Contracts. Set forth on Schedule 3.7 is a list of all contracts,
leases, arrangements and commitments (whether oral or written) (copies of which,
to the extent written, have been provided to Buyer) by which any of the Assets
are directly affected or are bound, including, without limitation, contracts,
agreements, arrangements or commitments (the following, "Contracts") that
pertain to the Business and relate to: (i) the sale, lease or other disposition
by Seller of all or any substantial part of the Business; (ii) collective
bargaining with, or any representation of any employees by, any labor union or
association; (iii) the acquisition of services, supplies, equipment or other
personal property involving more than $1,000,000 or that is not terminable by
Seller upon not more than thirty (30) days' notice without obligation on the
part of Seller; (iv) noncompetition; (v) the purchase or sale of real property;
(vi) distribution, agency or construction; (vii) lease of real or personal
property as lessor or lessee or sublessor or sublessee; (viii) lending or
advancing of funds other than the extension of credit to trade purchasers in the
ordinary course of Seller's business consistent with past business practice;
(ix) borrowing of funds or receipt of credit other than by Seller in the
ordinary course of business consistent with good business practice and except
for trade payables in amounts and on terms consistent with past practice; (x)
incurring of any obligation or liability except for transactions engaged in by
Seller in the ordinary course of business consistent with good business
practice; (xi) the sale of personal property (other than sales of Inventory in
the ordinary course of business consistent with good business practice) or
services under which payments due after the date of this Agreement exceed
$1,000,000; and (xii) any matter or transaction not in the ordinary course of
the business of Seller or that is inconsistent with past business practice of
Seller. Except as set forth on Schedule 3.7, Seller has delivered invoices to
its customers or received monies therefrom only with respect to completed work.
3.8 Contract Defaults. Seller is not in default in any respect under any
Contract, and such Contracts are legal, valid and binding obligations of the
respective parties thereto in accordance with their terms and, except to the
extent reflected in Schedule 3.7, have not been amended; and no defenses,
offsets or counterclaims thereto have been asserted or to the best knowledge of
Seller, may be made, by any party thereto other than Seller nor has Seller
waived any substantial rights thereunder.
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3.9 Litigation; Products Liability. Set forth on Schedule 3.9 is a list
of all actions, suits, proceedings, investigations or grievances pending against
Seller or, to the best knowledge of Seller, threatened against Seller, the
Business or any property or rights of Seller, at law or in equity or before or
by any court or federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign
("Agencies"). None of the actions, suits, proceedings or investigations listed
on Schedule 3.9 either (i) results in or would, if adversely determined, have a
Material Adverse Effect or (ii) affects or would, if adversely determined,
affect the right or ability of Seller to carry on the Business substantially as
now conducted. Seller is not subject to any continuing court or Agency order,
writ, injunction or decree applicable specifically to the Assets, the Business
or employees of Seller, or in default with respect to any order, writ,
injunction or decree of any court or Agency with respect to the Assets, the
Business, operations or employees.
Seller does not have any liability, including, but not limited to, any
environmental, health or safety liability (and there is no basis for any present
or future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any liability) arising out
of any injury to individuals or property as a result of the ownership,
possession, or use of any product manufactured, sold, leased, or delivered by
Seller.
3.10 Corporate Power and Authority. The execution, delivery and
performance of this Agreement by Seller, and all other agreements by and among
the parties, and the consummation by it of the transactions contemplated hereby
and thereby, have been duly authorized by all requisite corporate action and no
further action or approval is required in order to permit Seller to consummate
the transactions contemplated hereby and thereby. This Agreement constitutes,
and all other agreements by and among the parties, when executed and delivered
in accordance with the terms thereof, will constitute the legal, valid and
binding obligations of Seller, enforceable in accordance with their terms,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, (ii) the remedy of specific performance and injunctive relief are
subject to certain equitable defenses and to the discretion of the court before
which any proceedings may be brought and (iii) rights to indemnification
hereunder may be limited under applicable securities laws (the "Equitable
Exceptions"). Seller has full power, authority and legal right to enter into
this Agreement, and all other agreements by and among the parties, and to
consummate the transactions contemplated hereby and thereby. The making and
performance of this Agreement, and all other agreements by and among the
parties, and the consummation of the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof will not (a) conflict
with the Articles of Incorporation or the Bylaws of Seller, (b) result in any
breach or termination of, or constitute a default under, or constitute an event
that with notice or lapse of time, or both, would become a default under, or
result in the creation of any Encumbrance upon any of the Assets under, or
create any rights of termination, cancellation or acceleration in any person
under, any Contract, or violate any order, writ, injunction or decree, to which
Seller is a party, by which any of the Assets, business or operations of Seller
may be bound or affected or under which any of the Assets, business or
operations of Seller receive benefits, (c) result in the loss or adverse
modification of any license, franchise, permit or other authorization granted to
or otherwise held by Seller and related to its business operations or (d) result
in the violation of any provisions of law applicable to Seller, the violation of
which could have an adverse effect upon the Assets, business or operations of
Seller.
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3.11 Employees. Except as set forth in Schedule 3.11, neither the
execution and delivery of this Agreement by Seller or the consummation of the
transactions contemplated hereby will (i) entitle any current or former employee
of Seller to severance pay, unemployment compensation or any similar payment,
(ii) accelerate the time of payment or vesting, or increase the amount of, any
compensation due to any such employee or former employee, or (iii) directly or
indirectly result in any payment made or to be made to or on behalf of any
person to constitute a "parachute payment" (within the meaning of Section 280G
of the Code).
3.12 Consents. Except as set forth on Schedule 3.12, no consent,
approval, notice to, registration or filing with, authorization or order of, any
court, Agency or any other person or under any Contract is required in order to
permit Seller to consummate the transactions contemplated by this Agreement.
3.13 Insurance. Seller's businesses are adequately insured with
responsible insurers, including with respect to the Assets used in the conduct
of the Business, against risks normally insured against by companies with
similar divisions as the Business. All such policies shall be in full force and
effect and shall remain in full force and effect through the Closing Date. All
premiums due prior to the date hereof for periods prior to the date hereof with
respect to such policies and contracts have been timely paid.
3.14 Taxes. Seller has duly filed all federal, state, county, local and
other excise, franchise, property, payroll, income, capital stock, sales and use
and other tax returns that are required to be filed by it and all such returns
are true, correct and complete in all respects. Seller has paid all taxes which
have become due or have been assessed against it or the Assets and all taxes,
penalties and interest which any taxing authority has proposed or asserted to be
owing. All tax liabilities to which the properties of Seller may have been
subjected have been discharged except for taxes assessed but not yet payable.
There are no tax claims presently being asserted against Seller or the Assets
and Seller knows of no basis for any such claim. Seller has not granted any
extension to any taxing authority of the limitation period during which any tax
liability may be asserted thereby.
3.15 Business Relations. Schedule 3.15 contains an accurate list of all
significant customers and suppliers of the Business. Except as set forth in
Schedule 3.15, Seller has not experienced any difficulties in obtaining any
inventory items necessary to the operation of the Business, and, to the best
knowledge of Seller, no such shortage of supply of inventory items is threatened
or pending.
3.16 Laws and Regulations. Seller has conducted its businesses,
including, but not limited to, the Business, in material compliance with all
applicable federal, state and local laws, ordinances, and regulations, including
without limitation, those governing health and safety, the discharge of
materials into the environment, or the storage or disposition of hazardous
wastes or substances.
3.17 Absence of Certain Changes or Events. From and after March 1, 2000,
there shall have occurred no changes in the business, operations, assets,
liabilities or financial condition of Seller that could have a Material Adverse
Effect on the Business or the Assets.
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3.18 True, Correct and Complete Information. All written agreements,
lists, schedules, instruments, exhibits, documents, certificates, reports,
statement and other writings furnished to Buyer pursuant hereto or in connection
with this Agreement or the transactions contemplated hereby are and will be
complete and accurate in all material respects. There is no fact known to Seller
that has specific application to Seller, the Business or the Assets (other than
general economic or industry conditions) and that materially adversely affects
or, as far as Seller can reasonably foresee, materially threatens, the assets,
business, prospects, financial condition, or results of operations of Seller,
the Business or the Assets that has not been set forth in this Agreement or any
schedule hereto.
3.19 Availability of Documents. Seller has made available for inspection
by Buyer at the offices of Seller true, correct and complete copies of its
Articles of Incorporation and Bylaws and all contracts, leases, arrangements,
commitments, certificates and documents referred to herein or in any Schedule
referred to herein, in each case together with all amendments and supplements
thereto.
3.20 Broker's and Finder's Fees. Seller has not made any agreement with
any person, or taken any action which would cause any person, to become entitled
to an agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
3.21 Solvency. Immediately prior to, and immediately subsequent to, the
consummation of the sale of the Assets pursuant to the provisions of this
Agreement, Seller will be a solvent corporation with the ability to pay its
debts as they become due. For purposes of this Agreement, solvent shall mean,
with respect to Seller, that the present fair saleable value of Seller's assets
is greater than the amount that will be required to pay its liability on its
existing debts as they become absolute and mature.
3.22 Reliance. The foregoing representations and warranties are made by
Seller with the knowledge and expectation that Buyer and iNetze are placing
complete reliance thereon.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND CT
Buyer and CT represent and warrant to Seller as follows:
4.1 Organization and Authority. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. CT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Buyer and CT has all
requisite corporate power and authority to own or lease its respective
properties and to carry on its respective business as it is presently being
operated and in the place where such properties are owned or leased and such
business is conducted. The execution, delivery and performance of this Agreement
by Buyer and CT, and all other agreements by and among the parties, and the
consummation by each of Buyer and CT of the transactions contemplated hereby and
thereby to which each is a party, have been duly authorized by all requisite
corporate action and no further action or approval is required in order to
permit Buyer and CT to consummate the transactions contemplated hereby and
thereby. This Agreement constitutes, and all other agreements by and among the
parties, when executed and delivered in accordance with the terms thereof, will
constitute the legal, valid and binding obligations of each of Buyer and CT,
enforceable in accordance with their terms, subject to the Equitable Exceptions.
Each of Buyer and CT has full power, authority and legal right to enter into
this Agreement and all other agreements by and among the parties and to
consummate the transactions contemplated hereby and thereby. The making and
performance of this Agreement, and all other agreements by and among the
parties, and the consummation of the transactions contemplated hereby and
thereby in accordance with the terms hereof and thereof will not (i) conflict
with the Certificate of Formation or Limited Liability Company Agreement of
Buyer, (ii) conflict with the Articles of Incorporation or the Bylaws of CT,
(iii) result in any breach or termination of, or constitute a default under, or
constitute an event which with notice or lapse of time, or both, would become a
default under, or result in the creation of any Encumbrance upon any material
asset of Buyer or CT under, or create any rights of termination, cancellation or
acceleration in any person under, any material contract, lease, arrangement or
commitment, or violate any order, writ, injunction or decree, to which Buyer or
CT is a party or by which Buyer or CT or their respective assets, business or
operations may be bound or affected or under which Buyer or CT or their
respective assets, business or operations receive benefits, (iv) result in the
loss or adverse modification of any material license, franchise, permit or other
authorization granted to or otherwise held by Buyer or CT that is material to
the business or financial condition of Buyer or CT or (v) result in the
violation of any provisions of law applicable to Buyer or CT, the violation of
which could have a material adverse effect upon the business, operations or
assets of Buyer or CT, respectively.
4.2 Capitalization. The authorized capital stock of CT consists of
60,000,000 shares of Common Stock, par value $.01 per share, and 1,000,000
shares of Preferred Stock, par value $.01 per share. CT has reserved no more
than 4,339,755 shares of Common Stock for issuance upon the exercise of options,
warrants, conversion rights or agreements, or for the issuance of Common Stock
under CT's employee benefit plans.
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4.3 Consents. No consent, approval, authorization or order of any court,
agency or any other person is required in order to permit Buyer or CT to
consummate the transactions contemplated by this Agreement.
4.4 Broker's and Finder's Fees. Neither Buyer nor CT has made any
agreement with any person, or taken any action which would cause any person, to
become entitled to an agent's, broker's or finder's fee or commission in
connection with the transactions contemplated by this Agreement.
4.5 Reliance. The foregoing representations and warranties are made by
Buyer and CT with the knowledge and expectation that Seller is placing complete
reliance thereon.
ARTICLE V
COVENANTS OF SELLER
Seller and covenants and agrees with Buyer and CT as follows:
5.1 Affirmative Covenants. Prior to the Closing Date, Seller will operate
the Business only in the usual, regular and ordinary course of business
consistent with good business practices, and will use its best efforts to: (i)
preserve intact the Business and the Assets; (ii) continue all existing policies
of insurance (or comparable insurance) in full force and effect up to and
including the Closing Date (and will not cancel any such insurance or take (or
fail to take) any action that would enable the insurers under such policies to
avoid liability for claims arising out of any occurrence prior to the Closing
Date without the prior written consent of Buyer); (iii) use its best efforts to
preserve its present relationships the Business's suppliers and customers; and
(iv) maintain the Business's books, accounts and records in the usual, regular
and ordinary manner on a basis consistently applied. Seller will notify Buyer,
CT and iNetze in writing within five (5) business days of learning of any facts,
event or circumstance that are reasonably likely to have a Material Adverse
Effect.
5.2 Negative Covenants. Prior to the Closing Date, Seller will operate
the Business only in the usual, regular and ordinary course of business
consistent with good business practices, and will not, without the prior written
consent of Buyer, except as contemplated by this Agreement or as will not effect
the Assets or the Business: (i) make any amendment to its Articles of
Incorporation, Bylaws or other organizational documents; (ii) make any material
change in the character of its business; (iii) incur any obligation or liability
(fixed or contingent) for its business except in the ordinary course of business
consistent with good business practices; (iv) discharge or satisfy any
Encumbrance or pay any obligation or liability (fixed or contingent) of the
Business other than in the ordinary course of business consistent with good
business practices; (v) mortgage, pledge, transfer or otherwise dispose of or
subject to any Encumbrance any of the Assets, except in the ordinary course of
business consistent with good business practices; (vi) acquire any assets or
properties for or relating to its business, except in the ordinary course of
business consistent with good business practices; (vii) cancel or compromise any
material debt or claim of its business; (viii) waive or release any rights of
its business of material value; (ix) transfer, grant or terminate contract,
lease, arrangement or commitment rights under any of its concessions, leases,
licenses, agreements, patents, patent licenses, inventions, trademarks, trade
names, service marks, trade dress or copyrights or registrations or licenses
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thereof or applications therefor or with respect to any know-how or other
proprietary or trade rights; (x) modify or change in any material respect or
terminate any existing contract, lease, arrangement or commitment included in
the Assets; (xi) undertake any material borrowing of any nature whatsoever for
or relating to its business other than in the ordinary course of business
consistent with good business practices; and (xii) make any loans or extensions
of credit for or on behalf of its business, except in the ordinary course of
business consistent with good business practices.
5.3 Access to Properties and Records. Seller will keep Buyer, CT and
iNetze advised of all material developments relevant to the consummation of the
transactions contemplated hereby and will cooperate fully in permitting Buyer to
make a full investigation of the business, properties, financial condition and
investments of Seller relating to the Business during regular business hours and
upon reasonable notice and in bringing about the consummation of the
transactions contemplated hereby. Seller will, during regular business hours and
upon reasonable notice, afford to Buyer and its representatives full access to
the offices, buildings, real properties, machinery and equipment, inventory and
supplies, records, files, books of account, tax returns, agreements and
commitments, corporate record books and stock books and personnel of Seller, and
will permit Buyer and its representatives to contact and interview Seller's
personnel, suppliers, vendors, referral sources and any other persons that Buyer
shall reasonably determine to be necessary for it to make a full investigation
of the Business. Seller will furnish to Buyer all such further information
concerning the business and affairs of Seller as Buyer may reasonably request.
5.4 Approvals of Third Parties. As of the date hereof, Seller shall have
secured all necessary consents, approvals and clearances of third parties that
shall be required to consummate the transactions contemplated hereby and will
otherwise use it best efforts to cause the consummation of such transactions in
accordance with the terms and conditions of this Agreement.
ARTICLE VI
COVENANTS OF CT
CT covenants and agrees with Seller as follows:
6.1 Registration of CT's Common Stock.
(a) CT shall use its reasonable best efforts to file a
registration statement on the appropriate form under the Securities Act
of 1933, as amended ("1933 Act") within ninety (90) days of the Closing
covering the registration of the Common Stock of CT issued hereunder (the
"Registrable Shares"). In connection with such registration statement, CT
shall:
(i) Use its reasonable best efforts to cause such
registration statement to become effective and keep such
registration statement effective until the earlier of (x) Seller's
disposition of the Registrable Shares, (y) the eligibility for
resale of the Registrable Shares by Seller pursuant to Rule 144
promulgated under the 0000
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Xxx, xx (x) one (1) year from the date such registration statement is
declared effective by the Securities and Exchange Commission ("SEC");
(ii) Use its reasonable best efforts to prepare and file with the
SEC such amendments and supplements to such registration statement as may
be necessary to comply with the applicable provisions of the 1933 Act;
(iii) No less than forty-eight (48) hours prior to filing such
registration statement or prospectus contained therein or any amendment
or supplement thereto, furnish to Seller copies of all documents proposed
to be filed to permit the reasonable and timely review of statements
contained in such documents pertaining to such parties and thereafter
furnish to Seller such number of copies of such registration statement,
each amendment and supplement thereto, such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the
Registrable Shares to be received by Seller pursuant to this Agreement,
and correct any inaccuracy in such registration documents with respect to
such Seller and communicated to CT within such forty-eight (48) hour
period;
(iv) Use its reasonable best efforts to register and qualify the
Registrable Shares covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Seller, and to keep such registration or
qualification effective during the period such registration statement is
to be kept effective, provided that CT shall not be required to become
subject to taxation, qualify to do business or file a general consent to
service of process in any such jurisdictions;
(v) Use its reasonable best efforts to maintain the authorization
for quotation of the securities covered by such registration statement on
the NASDAQ SmallCap Market;
(vi) Notify Seller, at any time when Seller must suspend offers or
sales of the Registrable Shares under the registration statement, either
because the prospectus included in such registration statement is
required to be amended for any reason, such as an amendment under the
1933 Act to provide current information, or because the prospectus
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. CT shall use its reasonable best efforts to enable Seller to
promptly recommence offers and sales under the registration statement.
Notwithstanding the foregoing and anything to the contrary set forth in
this Section 6.1, Seller acknowledges that there may occasionally be
times when CT must suspend the use of the prospectus included in such
registration statement until such time as an amendment to the
registration statement has been filed by CT and declared effective by the
SEC, or until such time as CT has filed an appropriate report with the
SEC pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"). Seller hereby covenants that it will not offer or sell any
shares of the
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Registrable Shares pursuant to such prospectus during the period
commencing when CT notifies Seller of the suspension of the use of
such prospectus and the reason therefor, and ending when CT notifies
Seller in writing that it may thereafter effect offers and sales
pursuant to such prospectus; and
(vii) Use its reasonable best efforts to cause all
Registrable Shares to be listed, by the date of the first sale of
the Registrable Shares pursuant to such registration statement, on
each securities exchange on which the shares of Common Stock of CT
are then listed or proposed to be listed.
(b) It is a condition precedent to the obligations of CT to take any
action pursuant to this Section 6.1 hereof with respect to the Registrable
Shares of Seller that such Seller shall furnish to CT such information
regarding such Seller, the Registrable Shares held thereby and the intended
method of disposition of such securities as shall be required to effect the
registration of such Registrable Shares and as may be required from time to
time to keep such registration current.
(c) Except as otherwise provided, all expenses incurred by or on
behalf of CT in connection with registrations, filings or qualifications
pursuant to this Section 6.2, including without limitation all
registration, filing and qualification fees, the fees and expenses incurred
in connection with the listing of the Registrable Shares to be registered
on each security exchange on which shares of Common Stock of CT are then
listed, printer's and accounting fees, and fees and disbursements of
counsel for CT, shall be borne by CT. In no event shall CT be obligated to
bear underwriting, brokerage or related fees, discounts or commissions or
the fees or expenses of counsel or advisors to Seller.
(d) Each of CT and Seller shall agree to such other reasonable and
customary arrangements, undertakings and indemnifications with respect to
the registration of the Registrable Shares to be received by Seller
pursuant to this Agreement as may be requested by any of them, but shall
not be obligated to enter into any underwriting arrangements.
(e) CT covenants that it will at all times use its reasonable best
efforts to timely file any reports required to be filed by it under the
1933 Act and the 1934 Act and that it will take such other actions as may
be reasonably necessary to enable Seller to sell the Common Stock without
registration under applicable exemptions provided for under the 1933 Act
including, without limitation, Rule 144.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER AND CT
The obligations of Buyer and CT to cause the purchase of the Assets and the
other transactions contemplated hereby to occur at Closing shall be subject to
the satisfaction on or prior to the Closing Date of all of the following
conditions, except such conditions as Buyer and CT may waive in writing:
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7.1 Representations and Warranties of Seller. All of the representations
and warranties of Seller contained in this Agreement and in any Schedule or
other disclosure in writing from Seller shall have been true and correct when
made, and shall be true and correct on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made on
and as of the Closing Date.
7.2 Covenants of Seller. All of the covenants and agreements herein on the
part of Seller to be complied with or performed on or before the Closing Date
shall have been fully complied with and performed.
7.3 Seller's Certificate. There shall be delivered to Buyer and CT a
certificate dated as of the Closing Date and signed by authorized officer of
Seller to the effect set forth in Sections 7.1 and 7.2, which certificate shall
have the effect of a representation and warranty made by Seller on and as of the
Closing Date.
7.4 No Casualty Losses. The Assets shall not have suffered any destruction
or damage by fire, explosion or other casualty or any taking by eminent domain
which has materially impaired the operation of the Assets or otherwise had a
Material Adverse Effect.
7.5 Certificates of Authorities. Seller shall have furnished to Buyer and
CT (i) certificates of the Secretary of State of Alabama dated as of a date not
more than twenty (20) days prior to the Closing Date, attesting to the
organization, existence and good standing of Seller and (ii) a copy, certified
by an authorized officer of Seller, of resolutions duly adopted by the Board of
Directors of Seller duly authorizing the transactions contemplated in this
Agreement.
7.6 Litigation. At the Closing Date, there shall not be pending or
threatened any litigation in any court or any proceeding before any Agency, (i)
in which it is sought to restrain, invalidate, set aside or obtain damages in
respect of the consummation of the purchase and sale of the Assets or the other
transactions contemplated hereby, (ii) that could, if adversely determined,
result in any Material Adverse Effect, or (iii) as a result of which, in the
reasonable judgment of Buyer, Buyer would be deprived of the material benefits
of its ownership of the Assets.
7.7 Satisfactory to Buyer's Counsel. All actions, proceedings, instruments
and documents required to carry out this Agreement or incidental thereto and all
other related matters shall have been satisfactory to Xxxxx Xxxxxxx & Xxxx LLP,
Dallas, Texas, counsel for Buyer.
7.8 No Material Adverse Effect. There shall not have occurred any Material
Adverse Effect.
7.9 Consents. Seller shall have obtained all orders, approvals, estoppel
certificates or consents of third parties, including, without limitation, any
orders, approvals, certificates or consents deemed necessary by counsel to Buyer
and by counsel to iNetze that shall be required to consummate the transactions
contemplated hereby, including, without limitation, consents to the assignment
of the Assumed Liabilities listed on Schedule 1.1A.
7.10 Further Assurances. Seller shall take all such further action as may
be reasonably requested by Buyer in order to effectuate the consummation of the
transactions contemplated by
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this Agreement. If Buyer shall reasonably determine that any further conveyance,
assignment or other document or any further action is necessary to vest in it
full title to the Assets, Seller shall cause the appropriate officers to execute
and deliver all such instruments and take all such action as Buyer may
reasonably determine to be necessary.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to cause the sale of the Assets and the other
transactions contemplated hereby to occur at Closing shall be subject to the
satisfaction on or prior to the Closing Date of all of the following conditions,
except such conditions as Seller may waive in writing:
8.1 Representations and Warranties of Buyer and CT. All of the
representations and warranties of Buyer and CT contained in this Agreement and
in any Schedule or other disclosure in writing from Buyer and CT shall have been
true and correct when made, and shall be true and correct on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date.
8.2 Covenants of Buyer. All of the covenants and agreements herein on the
part of the Buyer and CT to be complied with or performed on or before the
Closing Date shall have been fully complied with and performed.
8.3 Satisfactory to Seller's Counsel. All actions, proceedings, instruments
and documents required to carry out this Agreement or incidental thereto and all
other related legal matters shall have been satisfactory to counsel for Seller.
ARTICLE IX
DATE AND PLACE OF CLOSING
9.1 Date and Place of Closing. Subject to satisfaction or waiver of the
conditions to the obligations of the parties, the purchase and sale of the
Assets pursuant to this Agreement shall be consummated at a closing (the
"Closing") to be held in the offices of Xxxxx Liddell & Xxxx LLP, in Dallas,
Texas, or such other place as mutually agreed to by the parties, at 10:00 a.m.,
Eastern Daylight Time, on May __, 2000, or such other date as the parties may
mutually agree upon (the "Closing Date").
ARTICLE X
CLOSING
10.1 Performance by Seller. At the Closing, concurrently with performance
by Buyer and CT of their respective obligations to be performed at the Closing:
(a) Conveyances. Seller shall execute and deliver to Buyer, in form
and substance acceptable to Buyer (i) a Xxxx of Sale and Assignment in
substantially the form attached hereto as Exhibit A conveying to Buyer all
items of personalty included among
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the Assets, (ii) assignments of each of the contracts, leases, arrangements
and commitments listed on Schedule 1.1A and (iii) all other assignments,
endorsements and instruments of transfer as shall be necessary or
appropriate to carry out the intent of this Agreement and as shall be
sufficient to vest in Buyer title to all of the Assets and all right, title
and interest of Seller thereto. If requested by Buyer, such documents shall
be in a form suitable for recording.
(b) Records. Seller shall deliver to Buyer all documents, agreements,
reports, books, records and accounts pertaining specifically to the Assets
that are in Seller's possession.
(c) Certificates. Seller shall execute and deliver to Buyer the
certificate referred to in Section 7.3.
(d) Certificates of Authorities. Seller shall deliver to Buyer the
certificates of authorities referred to in Section 7.5.
(e) Consents. Seller shall deliver to Buyer the consents and approvals
required by Section 7.9.
(f) Other Actions. Seller shall take all such other steps as may be
necessary or appropriate to put Buyer in actual and complete ownership and
possession of the Assets.
10.2 Buyer's Performance. At the Closing, concurrently with the performance
by Seller of its obligations to be performed at the Closing, Buyer or CT shall:
(a) Delivery of Stock Certificate. Execute and deliver to Seller a
stock certificate representing the number of shares of Common Stock of CT
set forth in Section 2.1.
(b) Assumption Agreement. Execute and deliver to Seller the Assumption
Agreement in substantially the form attached hereto as Exhibit B.
10.3 Further Action.
(a) Further Action by Seller. At any time and from time to time, at or
after the Closing, upon request of Buyer, Seller shall do, execute,
acknowledge and deliver or shall cause to be done, executed, acknowledged
and delivered all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may reasonably be
required in order to evidence, vest in and confirm to Buyer full and
complete title to, possession of, and the right to use and enjoy, the
Assets.
(b) Further Action by Buyer. At any time and from time to time, at or
after the Closing, upon request of Seller, Buyer shall do, execute,
acknowledge and deliver or shall cause to be done, executed, acknowledged
and delivered all such further acts and assurances as may reasonably be
required in order to better assure and confirm to Seller the assumption by
Buyer of the obligations to render performance that are to be assumed by
Buyer pursuant to this Agreement.
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ARTICLE XI
TRANSFER RESTRICTIONS
11.1 Legend. The certificate representing the Common Stock to be issued
hereunder will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE NOT ISSUED IN A TRANSACTION
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED
HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
UNLESS SUCH SALE OR TRANSFER IS COVERED BY AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR,
IN THE OPINION OF COUNSEL TO THE ISSUER, IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.
THE HOLDER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL NOT SELL IN
ANY WEEK SUCH NUMBER OF SHARES AS TO EXCEED 15% OF THE AVERAGE WEEKLY
TRADING VOLUME OVER THE IMMEDIATELY PRECEDING FOUR (4) WEEK PERIOD.
11.2 Resale Limitations. During any registration period as described in
Article VI hereof, Seller shall not sell in any week such number of shares of
Common Stock of CT received hereunder as to exceed 15% of the average weekly
trading volume over the immediately preceding four (4) week period.
ARTICLE XII
SURVIVAL, INDEMNIFICATION AND CONFIDENTIALITY
12.1 Survival of Covenants, Agreements, Representations and Warranties.
(a) Covenants and Agreements. All covenants and agreements made
hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing and shall continue in full
force and effect thereafter according to their terms without limit as to
duration.
(b) Indemnification. Seller agrees to indemnify and hold harmless
Buyer, CT, iNetze, their respective affiliates, officers, servants,
employees, agents, successors and assigns, and each and all of them, from
and against any and all liabilities, claims, losses, suits, damages,
judgments, expenses, attorneys' fees, costs and charges of every kind and
nature arising out of or resulting from (i) the operation of business
pertaining to the Business prior to the Closing Date, including, without
limitation, any suit or claim relating to any violation of law or agreement
by Seller with respect to environmental, tax, copyright, ERISA or other
matters (without regard to whether a representation, warranty or covenant
of Seller herein is breached); (ii) any inaccuracy in or breach of any of
the representations, warranties or covenants made by the Seller herein; or
(iii) the
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transactions contemplated by this Agreement, including, without limitation,
noncompliance with the bulk transfer laws of any state and any suit or
claim brought by a current or former shareholder of Seller, or any
representative of such shareholder. Buyer and CT each agrees to indemnify
and hold harmless Seller against any and all liabilities, claims, losses,
suits, damages, judgments, expenses, attorneys' fees, costs and charges of
every kind and nature of Seller arising out of or resulting from any
inaccuracy in or breach of any of the representations, warranties or
covenants made by Buyer or CT herein. No party shall have any obligation to
indemnify any other party hereto unless the party seeking indemnification
under this Section 12 shall have notified the party from whom
indemnification is sought on or before the date which is two (2) years from
the Closing Date; provided that indemnification obligations relating to
environmental or tax matters shall continue in full force and effect until
ninety (90) days after all potential claims related thereto shall be barred
by the applicable statute of limitations.
(c) Notification. Upon obtaining knowledge thereof, Seller, Buyer, CT
or iNetze, as the case may be (for purposes of this paragraph referred to
as "Indemnitee"), shall promptly notify the other party (for purposes of
this paragraph referred to as "Indemnitor") in writing of any claim or
loss, damage or expense which Indemnitee has determined has given or
reasonably may give rise to a right of indemnification under this Agreement
and shall specify details thereof; without regard to whether the amount of
any loss, damage or expense has been finally determined. If such claim or
demand relates to a claim or demand by a third party against Indemnitee,
Indemnitor shall have the right to settle any such claim or demand (at
Indemnitor's expense and without admitting that Indemnitee had any
liability with respect thereto) or to employ counsel reasonably acceptable
to Indemnitee to defend any such claim or demand asserted against
Indemnitee and Indemnitee shall have the right (but no obligation) to
participate in the defense of any such claim with counsel of Indemnitee's
selection. So long as Indemnitor is defending in good faith any such claim
or demand, Indemnitee will not settle such claim or demand. Indemnitee
shall make available to Indemnitor or its representatives, at Indemnitor's
expense, all records and other materials required by them for their use in
contesting any such claim or demand asserted by a third party against
Indemnitee. Whether or not Indemnitor so elects to defend any such claim or
demand, Indemnitee shall have no obligation to do so. If such claim or
demand relates to a claim or demand other than one asserted by a third
party against Indemnitee, Indemnitee shall promptly notify Indemnitor of
Indemnitee's claim or demand against Indemnitor and of Indemnitee's demand
for indemnification under this Agreement. Indemnitor shall then promptly
pay to Indemnitee the amount of Indemnitee's claim or demand. In the event
that Indemnitor shall dispute such claim or demand, or any portion thereof,
Indemnitor shall immediately notify Indemnitee in writing, specifying in
detail the portion of such claim or demand (if less than all) which is
disputed and the facts relied upon by Indemnitor as a basis for such
dispute. Indemnitor and Indemnitee agree to negotiate in good faith to
attempt to reach a resolution of any disputed claim or demand for
indemnification hereunder in order to attempt to avoid resorting to a court
of competent jurisdiction for such resolution.
12.2 Confidentiality. All non-public information furnished pursuant to the
provisions of this Agreement, including without limitation this Section, will be
kept confidential and shall not, without the prior written consent of the party
disclosing such information, be disclosed by
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the other party in any manner whatsoever, in whole or in part, and shall not be
used for any purposes, other than in connection with the transactions
contemplated hereby. In no event shall either party or any of its
representatives use such information to the detriment of the other party. The
confidentiality obligations of this Section 12.2 shall not apply to information:
(a) which is required to be disclosed by judicial or administrative
process or order, or by other requirements of law;
(b) which is or becomes generally available to the public other than
as a result of a breach of this Section;
(c) which is received from a party or parties unaffiliated with either
party, as the case may be, who obtained such information other than under
an obligation of confidentiality;
(d) which either party discloses on a nonconfidential basis or
otherwise makes available to the general public or the trade; or
(e) which Buyer uses in connection with operating the Assets after the
Closing Date.
ARTICLE XIII
TERMINATION
13.1 Termination. This Agreement may be terminated and abandoned at any
time on or prior to the Closing Date:
(a) By the consent in writing of Buyer and Seller;
(b) By Buyer in writing if any of the material conditions to the
obligations of Buyer contained herein shall not have been satisfied as of
the Closing Date;
(c) By Seller in writing if any of the material conditions to the
obligations of Seller contained herein shall not have been satisfied as of
the Closing Date; and
(d) By Buyer, upon written notice to Seller, if the examination of
Seller and its Assets by Buyer, or its representatives or agents, discloses
the existence or nonexistence of any matters or things that, in the sole
judgment of Buyer would be reasonably likely to result in material loss or
damage to Buyer, the Assets or the Business.
13.2 No Further Force or Effect. In the event of termination and
abandonment of this Agreement pursuant to the provisions of Section 13.1, this
Agreement shall be of no further force or effect, except for Sections 12.2 and
14.1, which shall not be affected by termination of this Agreement.
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ARTICLE XIV
MISCELLANEOUS
14.1 Expenses. Except as otherwise expressly provided herein, Seller,
Buyer, CT and iNetze shall each pay their own expenses in connection with the
preparation of this Agreement, and the consummation of the transactions
contemplated hereby, including, without limitation, fees of its own counsel,
auditors and other experts, whether or not such transactions be consummated.
14.2 Entire Agreement. This Agreement (including the exhibits and schedules
hereto) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof, and no party shall be liable or bound to the other
in any manner by any representations or warranties not set forth herein.
14.3 Publicity. Except as otherwise required by law, no party hereto shall
issue any press release or make any public statement, in either case relating to
or in connection with or arising out of this Agreement or the matters contained
herein, without obtaining the prior written approval of the other parties hereto
to the content and manner of presentation and publication thereof, which consent
shall not be unreasonably withheld or delayed.
14.4 Successors and Assigns. This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of law), and the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any party, other than
the parties and their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of such agreements.
14.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
14.6 Headings. The headings of the paragraphs and subparagraphs of this
Agreement are inserted for convenience of reference only and shall not be deemed
to constitute part of this Agreement or to affect the construction hereof.
14.7 Use of Certain Terms. As used in this Agreement, the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular paragraph, subparagraph or other
subdivision.
14.8 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof, and this Agreement may be modified or amended by a written
instrument executed by Buyer, CT, Seller and iNetze. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
all of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
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14.9 Notices. All notices of communication required or permitted hereunder
shall be in writing and may be given by (a) depositing the same in United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, (b) delivering the same in person to an
officer or agent of such party, or (c) telecopying the same with electronic
confirmation of receipt.
(i) If to Seller: 0000 Xxxxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telecopy No. (000) 000-0000
with a copy to: Xxxxxxx Xxxxx Rose & White LLP
0000 Xxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No. (000) 000-0000
(ii) If to Buyer or CT: CT Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy Number: (000) 000-0000
with a copy to: Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. XxXxxxxx, Esq.
Telecopy Number: (000) 000-0000
(iii) If to iNetze: xXxxxx.xxx, Inc.
000X Xxxxxxxx Xxxxxx, Xxxx. 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy Number: (000) 000-0000
with a copy to: Hunton & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx XX
0000 Xxxx xx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy Number: (000) 000-0000
or at such other address or counsel as any party hereto shall specify pursuant
to this Section 14.9 from time to time.
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14.10 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
LAWS OF THE STATE OF TEXAS. ALL REMEDIES AT LAW, IN EQUITY, BY STATUTE OR
OTHERWISE SHALL BE CUMULATIVE AND MAY BE ENFORCED CONCURRENTLY OR FROM TIME TO
TIME AND, SUBJECT TO THE EXPRESS TERMS OF THIS AGREEMENT, THE ELECTION OF ANY
REMEDY OR REMEDIES SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT TO PURSUE ANY
OTHER AVAILABLE REMEDIES.
14.11 Arbitration. Any dispute pursuant to this Agreement ("Dispute") shall
be settled by binding arbitration in Boston, Massachusetts and, except as herein
specifically stated, in accordance with the commercial arbitration rules of the
American Arbitration Association ("AAA Rules") then in effect. However, in all
events, these arbitration provisions shall govern over any conflicting rules
that may now or hereafter be contained in the AAA Rules. Any judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
over the subject matter thereof. The arbitrator shall have the authority to
grant any equitable and legal remedies that would be available in any judicial
proceeding instituted to resolve a Dispute; provided, however, that the
arbitrator shall not have the power to award punitive or exemplary damages.
(a) Any such arbitration will be conducted before a single arbitrator
who will be compensated for his or her services at a rate to be determined
by the parties or by the American Arbitration Association, but based upon a
reasonable hourly or daily consulting rate for the arbitrator if the
parties are not able to agree upon his or her rate of compensation. The
American Arbitration Association will have the authority to select an
arbitrator from a list of arbitrators who are lawyers familiar with Texas
contract law; provided, however, that such lawyers cannot work for a firm
previously or then performing services for either party, that each party
will have the opportunity to make such reasonable objection to any of the
arbitrators listed as such party may wish and that the American Arbitration
Association will select the arbitrator from the list of arbitrators as to
whom neither party makes any such objection. If the foregoing procedure is
not followed, each party will choose one person from the list of
arbitrators provided by the American Arbitration Association (provided that
such person does not have a conflict of interest), and the two persons so
selected will select from the list provided by the American Arbitration
Association the person who will act as the arbitrator.
(b) Seller and Buyer will each pay 50% of the initial compensation to
be paid to the arbitrator in any such arbitration and 50% of the costs of
transcripts and other normal and regular expenses of the arbitration
proceedings; provided, however, that the prevailing party in any
arbitration will be entitled to an award of attorney's fees and costs, and
all costs of arbitration, including those provided for above, will be paid
by the non-prevailing party, and the arbitrator will be authorized to make
such determinations.
(c) For any Dispute submitted to arbitration, the burden of proof will
be as it would be if the claim were litigated in a Texas judicial
proceeding. Upon the conclusion of any arbitration proceedings hereunder,
the arbitrator will render findings of fact and conclusions of law and a
written opinion setting forth the basis and reasons for any decision
reached and will deliver such documents to each party to this Agreement
along with a signed copy of the award.
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(d) The arbitrator chosen in accordance with these provisions will not
have the power to alter, amend or otherwise affect the terms of these
arbitration provisions or the provisions of this Agreement. Except as
specifically otherwise provided in this Agreement, arbitration will be the
sole and exclusive remedy of the parties for any Dispute.
14.12 Reformation and Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as to most
nearly retain the intent of the parties, and if such modification is not
possible, such provision shall be severed from this Agreement, and in either
case the validity, legality and enforceability of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.
14.13 Remedies Cumulative. No right, remedy or election given by any term
of this Agreement shall be deemed exclusive but each shall be cumulative with
all other rights, remedies and elections available at law or in equity.
14.14 Specific Performance; Other Rights and Remedies. Each party hereto
recognizes and agrees that in the event the other party or parties should refuse
to perform any of its or their obligations under this Agreement, the remedy at
law would be inadequate and agrees that for breach of such provisions, each
party shall, in addition to such other remedies as may be available to it at law
or in equity, be entitled to injunctive relief and to enforce its rights by an
action for specific performance to the extent permitted by applicable law. Each
party hereby waives any requirement for security or the posting of any bond or
other surety in connection with any temporary or permanent award of injunctive,
mandatory or other equitable relief.
14.15 Participation by iNetze. Each party hereto recognizes and
acknowledges that iNetze is a party to this transaction solely for the purpose
of receiving and acknowledging the representations and warranties pertaining to
the Business and the Assets made by Seller herein and neither Buyer nor CT shall
incur any liability of any kind to iNetze as a result of this Agreement. It is
further recognized that the entire agreement by and between Buyer, CT and iNetze
shall be set forth in that certain Asset Contribution Agreement by and among
Buyer, CT, iNetze, Xxx Xxxxxxx, Xxxxxx X. Xxxxxxxxx, X. Xxxxxxxx XxXxxx, and
Xxxx Xxxxxxx of even date herewith pursuant to which agreement Buyer shall
contribute the Assets to iNetze.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be signed in counterparts all as of the date first above written.
EBSCO XXXXXX, INC.
By: /s/ Xxx Xxxxxxx
-----------------------------------------
Name: Xxx Xxxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
ESRN ACQUISITION, LLC
By: CT Holdings, Inc., its sole member
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
CT HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
XXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------------
Title: President
--------------------------------------
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ASSET PURCHASE AGREEMENT
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
1.1A Assets
1.1B Excluded Assets
1.3 Assumed Liabilities
3.1 Jurisdictions
3.2 Encumbrances
3.4 Intellectual Property
3.5 Permits
3.7 Contracts
3.9 Litigation
3.11 Employees
3.12 Consents
3.15 Business Relations
EXHIBITS
A Xxxx of Sale and Assignment
B Assumption Agreement
