ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), is made and entered into as
of the 9th day of November, 2000 (the "Effective Date") by and between (i)
Cypost Corporation, a Delaware corporation ("Buyer"); (ii) Internet Arena, Inc.,
an Oregon corporation ("Seller"); and (iii) Xxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxx X.
Xxxxxxxx, Xxxxxxxx and Xxxx Xxxx Living Trust, Xxxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxx Xxxxxx, and Xxxx Xxxxxxxx (individually a "Selling Shareholder";
collectively, "Selling Shareholders"); and Xxxxxxxx Xxxx, individually.
RECITALS:
A. Seller operates a business under the trade name "Internet Arena," which
business includes, but is not necessarily limited to, the following services:
(i) third-party Internet connectivity-related services (including, but not
limited to, dial-up Internet access services, virtual server services, Internet
routing services, and Internet server co-location services); (ii) custom
Internet research services; (iii) Internet/computer education services; (iv)
on-site computer/Internet rental services; and (v) web site design services
(collectively, the "Business"). Seller's principal place of business is at 0000
XX Xxxxxx, Xxxxxxxx, Xxxxxx 00000. Seller owns equipment, inventories, contract
rights, leasehold interests, intellectual property rights, domain name
registrations, and other assets used in connection with the operation of the
Business.
B. Buyer desires to acquire substantially all the assets used or useful in
the operation of the Business, and Seller desires to sell such assets to Buyer.
C. Selling Shareholders are the sole shareholders of Seller.
AGREEMENT:
SECTION 1. ASSETS PURCHASED; EXCLUDED ASSETS
1.1. Assets Purchased. Seller agrees to sell to Buyer and Buyer agrees to
purchase from Seller, on the terms and conditions set forth in this
Agreement, the following assets used or useful in the Business
("Assets"), excluding, however, any and all "Excluded Liabilities"
as such term is defined in Section 2.2 below:
1.1.1. All fixed assets, including, without limitation, furniture,
equipment, machinery, motor vehicles, leasehold improvements,
and supplies and tools, including without limitation those
items described in Exhibit 1.1.1 attached hereto and by this
reference incorporated herein (collectively, the "Fixed
Assets").
1.1.2. All of Seller's interest in any agreements or contracts
relating to the Business that Buyer elects to assume,
including, but not necessarily limited to, the agreements and
contracts listed by Seller in Exhibit 1.1.2 attached hereto
and by this reference incorporated herein (collectively, the
"Assumed Contracts").
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 1
1.1.3. All customer lists, including those listed in Exhibit 1.1.3
attached hereto and by this reference incorporated herein
(collectively, the "Customer Lists").
1.1.4. All "Intellectual Property", as such term is defined below in
Section 6.6, including, but not limited to those trade names
(including the name "Internet Arena"), trademarks, copyrights,
and patents listed in Exhibit 1.1.4 attached hereto and by
this reference incorporated herein.
1.1.5. The ownership of all Internet domain names and associated
registrations owned by Seller, including, but not limited to,
the domain names: (i) "xxxxxxxxxxxxx.xxx", (ii)
"xxxxxxxxx.xxx", (iii) "xxxxxx.xxx", (iv) "xxxxxxxxxx.xxx",
and (v) "xxxxxxxxxx.xxx", but excluding those domain names
enumerated in the Excluded Assets, as such term is defined in
Section 1.2.
1.1.6. All of: (i) Seller's goodwill; (ii) manuals, catalogs, sales
literature, files, books and records (excluding Seller's
corporate and business records, copies of which shall be
provided to Buyer); and (iii) Seller's rights to use Seller's
telephone numbers, but excluding legal correspondence between
Xxxxxx Xxxxxxxxx and Seller in connection with this Agreement.
1.1.7. All inventory owned by Seller, together with any replacements
or additions to the inventory made prior to the Closing Date
(as defined in Section 10.1).
1.1.8. All licenses, permits, and registrations, to the extent
transferable, used in any way in the operation of the
Business.
1.2. Excluded Assets. Excluded from this sale and purchase are those
assets set forth on Exhibit 1.2 attached hereto and by this
reference incorporated herein (hereinafter, "Excluded Assets").
SECTION 2. ASSUMED LIABILITIES AND EXCLUDED LIABILITIES
2.1. Assumed Liabilities. Buyer shall accept the assignment of, and
assume duty for Seller's performance under, only the following: (a)
only those accounts payable of Seller listed in Exhibit 2.1 attached
hereto and by this reference incorporated herein ("Accounts
Payable"); (b) the "Assumed Contracts" (as such term is defined in
Section 1.1.2 above and as listed on Exhibit 1.1.2) which Buyer has
elected to assume in its sole discretion and listed in Exhibit
1.1.2; and (c) only those other liabilities or obligations of Seller
specifically listed in Exhibit 2.1 (the items listed in (a), (b),
and (c) of this section shall collectively be referred to as
"Permitted Assumed Liabilities"). Without limiting the generality of
the foregoing sentence, the Permitted Assumed Liabilities shall not
include any amounts owed by Seller to U.S. Bank pursuant to any
financing arrangements with said bank.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 2
2.2. Excluded Liabilities. All liabilities (which includes all types of
debts or obligations) of Seller or the Business that are not
expressly assumed by Buyer pursuant to, and as specifically set
forth in Section 2.1 above, shall remain the sole and exclusive
obligation and duty of Seller ("Excluded Liabilities"). "Excluded
Liabilities" specifically include, but are not limited to, the
following: (i) any indebtedness for borrowed money; (ii) any claims
or potential claims by third parties, together with all related
losses, expenses, damages, amounts, attorneys' fees and court costs
(collectively "Claims"), including, but not limited to, any Claims
relating in any way to: (a) products or services sold and delivered
or performed by Seller or Seller's agents; (b) actions taken by, or
omissions of, Seller or Seller's agents; and (c) actions taken, or
omissions of, any of Seller's customers; (iii) any Claims for
federal, state, local, or foreign income taxes, or any other taxes,
or related interest or penalties of Seller; (iv) any Claims under
any employee benefit or welfare plan or regarding any compensation,
withholding taxes, or payroll taxes owed to or with respect to any
employee or agent of Seller; (v) any Claim of any past or present
employee of Seller (including, without limitation, claims for
accrued vacation, sick leave, or other benefits); (vi) any Claims
regarding compliance with any applicable federal, state, or local
law, ordinance, regulation, order, or decree in connection with any
activity or omission of Seller at any time; and (vii) any legal
proceedings against Seller.
2.3. Shareholder Debt. Without in any way limiting the generality of
Section 2.2 and the meaning of Excluded Liabilities, the parties
hereby agree to the terms and conditions of this Section 2.3. The
Seller and Selling Shareholders hereby acknowledge that one or more
Selling Shareholders may have lent funds to Seller, and Seller may
have borrowed funds from one or more Selling Shareholders,
including, but not limited to, that certain loan in the amount of
$130,000 evidenced by that certain promissory note, dated June 1,
1999, payable to the Seller and executed by Xxxxx Xxxx (hereinafter
collectively referred to as "Shareholder Debts"). All Selling
Shareholders and the Seller hereby agree that any and all
indebtedness and other obligations of Seller pursuant to any
Shareholder Debts are solely and exclusively the responsibility of
the Seller, any Shareholder Debts are owed to any Selling
Shareholder solely by Seller, and that Buyer has no liability or
obligations whatever arising out of any Shareholder Debts. All
Selling Shareholders and Seller further agree that Seller and
Selling Shareholders (including their successors and assigns) shall
not seek any recourse whatsoever against Buyer or the Acquired
Assets with regard to the Shareholder Debts, including any amounts
not repaid to Selling Shareholders. Without limiting the generality
of the foregoing, it is hereby further agreed by all parties that
Buyer does not assume any of Seller's obligations under any of the
Shareholder Debt.
2.4. Employee Matters. Notwithstanding any provision to the contrary
herein, and notwithstanding the representations and warranties
relating to employee matters contained in Section 6.12 hereof, Buyer
assumes no obligation whatsoever to hire any employee of Seller on
or after Closing. Any hiring by Buyer of employees after Closing
shall be in Buyer's complete and sole discretion. This provision
shall
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 3
not effect Buyer's and Seller's duties under Section 5, Section
10.2.9. and Section 10.3.2 of this Agreement with regard to the Xxxx
Employment Agreement.
SECTION 3. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE
3.1. Purchase Price; Payment of Purchase Price. The purchase price for
the Assets shall be United States Six Hundred Thousand Dollars
(US$600,000) (the "Purchase Price"), such Purchase Price to be paid
in accordance with the following terms and conditions:
3.1.1. Buyer shall transfer to those Selling Shareholders
identified, and as set forth, in Exhibit 3.1.1 attached hereto
and by this reference incorporated herein, , from the treasury
of CyPost Corporation, a Delaware corporation, that number of
shares of common stock of CyPost Corporation (hereinafter, the
"CyPost Shares") which equals the number obtained by dividing
$300,000 by the trading price for such CyPost Shares on the
NASD OTC bulletin board as of the close of market on the date
the Letter of Intent between the Buyer and Seller was signed
by the President of the Buyer (namely, July 12, 1999, with a
price per share of that date being US$4.4688), adjusted to
reflect the September 24, 1999 record date three-for-two stock
split of CyPost stock ;the exact number of such shares of
CyPost common stock being issued being described in the middle
column of Exhibit 3.1.1 (hereinafter, the "CyPost Share
Payment"). The parties acknowledge and agree that the second
column of Exhibit 3.1.1 contains the true value of such CyPost
Shares pursuant to the NASD OTC valuation of such CyPost
Shares as of the close of business on the immediately
preceding business day prior to the Closing Date (hereinafter
referred to as the "Closing Date Valuation of CyPost Shares").
The transfer of such CyPost Shares shall be subject to, and
governed by, all applicable regulatory approvals, consents and
terms and conditions, and all other terms and conditions
imposed on holders of the common stock of CyPost Corporation.
All certificates of CyPost Shares delivered by Buyer pursuant
to this Agreement shall bear the following legend: "These
securities have not been registered under the U.S. Securities
Act of 1933, as amended (the "Act") and no sale, offer to
sell, or transfer of the securities represented by this
certificate may be made unless a registration statement under
the Act with respect to such shares is then in effect or an
exemption from the registration requirements of such Act is
then, in fact, applicable to such shares, and an opinion of
counsel, acceptable to the company's counsel, as to the
availability of such exemption has previously been delivered
to the company."
3.1.2. Buyer and Seller Agree that the CyPost Shares, as calculated
in accordance with Section 3.1.1 above, shall be delivered to
Seller as follows:
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 4
3.1.2.1. twenty percent (20%)of the CyPost Shares (the "Closing Date
CyPost Shares") which a Selling Shareholder is entitled to
received pursuant to Exhibit 3.1.1 shall be delivered to such
Selling Shareholder by Buyer at the Closing. The parties
acknowledge and agree that the aggregate real consideration
for the Closing Date CyPost Shares will be equal to twenty
percent of the Closing Date Valuation of CyPost Shares
described in the far right column of Exhibit 3.1.1; and
3.1.2.2. the remaining eighty percent (80%) of the CyPost Shares
(the "Remaining CyPost Shares") shall be issued to the Selling
Shareholders entitled to receive such shares in accordance
with Exhibit 3.1.1 as of the later of the forty-second (42)
day after the Closing Date or January 4, 2000 (the "Remaining
Shares Issuance Date"), and such Remaining CyPost Shares shall
be delivered to such Selling Shareholders within three (3)
business days after the Remaining Shares Issuance Date. The
parties acknowledge and agree that the aggregate real
consideration for the Remaining CyPost Shares will be equal to
eighty percent of the Closing Date Valuation of CyPost Shares
described in the second column of Exhibit 3.1.1 (such fifty
percent amount may hereinafter be referred to as the "Closing
Date Valuation of the Remaining CyPost Shares").
3.1.3. Buyer and Seller shall agree on the valuation of the Permitted
Assumed Liabilities (such Permitted Assumed Liabilities being set
forth in Exhibit 2.1), on or before September 29, 1999 and shall set
forth such valuation in Exhibit 2.1 (hereinafter, the "Permitted
Assumed Liabilities Value").
3.1.4. Buyer shall pay, in accordance with the terms and conditions of
this Section 3.1.3, the amount equal to the difference between
United States Six Thousand Dollars (US$600,000) and the aggregate
value of: (i) the CyPost Share Payment which the parties acknowledge
and agree is valued at Three Hundred Thousand Dollars ($300,000) for
purposes of this Section 3.1.3, and (ii) the Permitted Assumed
Liabilities Value set forth in Exhibit 2.1 (such difference
hereinafter referred to as the "Balance Value"). Buyer shall pay
Seller the Balance Value in the form of two cash payments, as
follows:
3.1.4.1. Seventy-five percent of the Balance Value, which amount
shall be One Hundred Seventy Three Thousand Five Hundred
Fifteen United States Dollars and Twenty Seven Cents
(US$173,515.27) ,which payment shall be made in certified
check or by wire transfer at Closing (the "Closing Cash
Payment"); and
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 5
3.1.4.2. Twenty-five percent of the Balance Value, which amount
shall be Fifty Seven Thousand Eight Hundred Thirty Eight
United States Dollars and Forty Two Cents (US$57,838.42),
which payment shall be made in certified check or by wire
transfer as of the later of the forty-second (42) day after
the Closing Date or January 4, 2000 (the "Remaining Cash
Payment").In order to evidence and secure Buyer's obligation
to pay Seller the Remaining Cash Payment and to issue the
Remaining CyPost Shares to those Selling Shareholders entitled
to receive the same pursuant to Exhibit 3.1.1, the parties
agree that the Buyer will execute and deliver at the Closing a
promissory note in favor of the Seller only, dated as of the
Closing Date, in an amount equal to (i) the Remaining Cash
Payment (as such term is defined above in Section 3.1.4.2);
and (ii) an amount equal to the Closing Date Valuation of the
Remaining CyPost Shares (as such term is defined in Section
3.1.2.2) (hereinafter, the "Promissory Note"), such Promissory
Note to be substantially in the form of Exhibit 3.1.5 attached
hereto and by this reference incorporated herein. Such
Promissory Note shall (a) bear no interest; (b) will be due
and payable on the later of the forty-second (42) day after
the Closing Date or January 4, 2000 (the "Maturity Date"); and
(iii) will be deemed fully paid and satisfied by Buyer by
Buyer's payment of the Remaining Cash Payment in accordance
with the requirements of Section 3.1.4.2 and the delivery of
the Remaining CyPost Shares in accordance with Section
3.1.2.2, upon which Seller must xxxx such Promissory Note
"paid in full and void" and return the same to Buyer.
3.2. Allocation of Purchase Price. The true value of the Purchase Price
as of the Closing Date shall be allocated as mutually agreed by
Buyer's and Seller's tax counsel and accountants and as set forth in
Exhibit 3.2 attached hereto and by this reference incorporated
herein. The parties agree to comply with IRC ss. 1060 and to use the
allocation of the Purchase Price as so agreed on their income tax
returns and other returns.
SECTION 4. PRORATES AND ADJUSTMENTS
The operation of the Business and related income and expenses up to the
close of business on Tuesday November 9, 1999(hereinafter, the "Proration Date")
shall be for the account of Seller and thereafter for the account of Buyer.
Utilities, personal property taxes relating to the Assets, rent and other
obligations under any lease, and other items customarily prorated shall be
prorated between Seller and Buyer as of the close of business on the Proration
Date, the proration to be made and paid, insofar as reasonably possible, on the
Closing Date, with settlement of any remaining items to be made within thirty
(30) days following the Closing Date. Seller shall receive an adjustment credit
in an amount equal to all lease deposits transferred under the
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 6
Assumed Contracts including, but not limited to, the real property premises
lease being assumed by Buyer; provided, however, that in the event any lessor
delivers any lease deposit directly to the Seller, Seller will not be entitled
to any adjustment credit under this Agreement by Buyer for said refunded lease
deposit.
SECTION 5. OTHER AGREEMENTS
The following additional agreements shall be executed by the Closing Date
and delivered at the Closing : (i) that certain Employment Agreement by and
between Buyer and Xxxxx Xxxx substantially in the form attached hereto as
Exhibit 5.1 (hereinafter referred to as the "Xxxx Employment Agreement"); and
(ii) that certain Non-Competition Agreement by and between the Buyer, Seller,
Xxxxx Xxxx and Xxxxxxxx Xxxx, substantially in the form attached hereto as
Exhibit 5.2 (hereinafter referred to as the "Non-Competition Agreement").
SECTION 6. SELLER'S REPRESENTATIONS AND WARRANTIES
Seller, Xxxxx Xxxx, Xxxxxxxx Xxxx, and the Xxxxxxxx and Xxxx Xxxx Living
Trust (hereinafter Xxxxx Xxxx, Xxxxxxxx Xxxx and the Xxxxxxxx and Xxxx Xxxx
Living Trust may be collectively referred to as the "Seller's Active
Businessmen") jointly and severally, hereby represent and warrant to the Buyer
as follows:
6.1. Corporate Existence. Seller is now and on the Closing Date will be a
corporation duly organized, validly existing, and in good standing
under the laws of the state of Oregon and is duly qualified to
conduct business, and is in corporate and tax good standing, under
the laws of each jurisdiction in which the nature of its business or
the ownership or leasing of its properties requires such
qualification. Seller has all requisite corporate power and
authority to own, operate, and/or lease its properties and assets,
as the case may be, and to carry on its Business as now being
conducted.
6.2. Capitalization of Seller. As of the Closing Date, the authorized
capital stock of the Seller consists of 35,000 shares of common
stock, 26,680 shares of which are issued and outstanding in the
amounts, and to the Selling Shareholders, as listed in Exhibit 6.2
attached hereto and by this reference incorporated herein. The
26,680 shares represent 100% of the equity interest of the Seller,
and therefore there will be no rights of appraisal, nor any other
remedy, generally available to non-consenting shareholders in
connection with the purchase of the Assets. All issued and
outstanding shares of Seller's common stock have been duly
authorized, validly issued, fully paid and nonassessable. There are
no outstanding options, warrants, or other rights to purchase from
the Seller any of its securities.
6.3. Authorization; Binding Obligation. The execution, delivery, and
performance of this Agreement have been duly authorized and approved
by the board of directors and shareholders of Seller. Each of the
Selling Shareholders has the absolute and unrestricted right, power,
and capacity to enter into and to perform his/her obligations under
this Agreement. This Agreement constitutes a legal,
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 7
valid, and binding obligation of the Seller and each of the Selling
Shareholders, enforceable against the Seller and each of the Selling
Shareholders in accordance with its terms.
6.4. Title to Assets; Condition of Assets. Seller holds, or will at
Closing hold, good and marketable title to all of the Assets, free
and clear of restrictions on or conditions to transfer or
assignment, and free and clear of liens, pledges, charges, or
encumbrances of any kind. All leases pursuant to which Seller or
Selling Shareholders leases real or personal property are in good
standing and are valid and effective in accordance with their
respective terms and, to the knowledge of Seller and Seller's Active
Businessmen, there exists no default thereunder or occurrence or
condition which could result in a default thereunder or termination
thereof. Seller's equipment and other tangible assets are in good
operating condition and are usable in the ordinary course of
business, and Seller owns, or has a valid leasehold interest in, all
assets necessary for the conduct of its business as presently
conducted.
6.5. Transfer Not Subject to Encumbrances or Third-Party Approval. Except
as disclosed in Exhibit 6.5 attached hereto and by this reference
incorporated herein, the execution and delivery of this Agreement by
Seller and Selling Shareholders, and the consummation of the
contemplated transactions, will not result in the creation or
imposition, by or through Seller, of any valid lien, charge, or
encumbrance on any of the Assets, and will not require the
authorization, consent, or approval of any third party, including
any governmental subdivision or regulatory agency, which will not
have been obtained at or prior to Closing.
6.6. Intellectual Property and Other Proprietary Rights; Invention
Agreements.
6.6.1. Neither Seller nor Seller's Active Businessmen have received
any communications alleging that Seller has violated or, by
conducting its business as proposed would violate, any
intellectual property or other proprietary rights of any other
person, nor is the Seller or Seller's Active Businessmen aware
of any basis for the foregoing.
6.6.2. Neither Seller nor Seller's Active Businessmen have received
any communications alleging that Seller has violated or, by
conducting its business as proposed would violate, any
intellectual property or other proprietary rights of any other
person, nor is the Seller or Seller's Active Businessmen aware
of any basis for the foregoing.
6.6.3. The term "Intellectual Property" shall mean: (i) patents,
patent applications, registrations, and applications for the
registration thereof; (ii) trademarks, trade names, service
marks, and registrations, and applications for the
registration thereof; (iii) copyrights and registrations, and
applications for the registration thereof; (iv) mask works and
registrations, and applications for the registration thereof;
(v) software, data, and
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 8
documentation; (vi) trade secrets and confidential
business information, know-how, research and development
information, copyrightable works, financial, marketing and
business data, pricing and cost information, marketing plans
and customer lists and information; and (vii) other
proprietary rights relating to the Business, including, but
not necessarily limited to, the Intellectual Property listed
in Exhibit 1.1.4 attached hereto and by this reference
incorporated herein.
6.6.4. Seller owns or licenses all Intellectual Property (as such
term is defined below) used by Seller in the operation of its
Business, such ownership or licenses being free and clear of
any liens, encumbrances or other claims of any kind.
6.6.5. All current and former employees and consultants of Seller
have executed an agreement regarding (i) the transfer to
Seller of all Intellectual Property (as such term is defined
above) in any work(s) performed or produced by such person(s);
and (ii) the maintenance of confidentiality regarding Seller's
Intellectual Property. Seller and Seller's Active Businessmen
are not aware of any employees or consultants of Seller who
are in violation thereof. It will not be necessary for Buyer
in the operation of the Business to utilize any Intellectual
Property (as such term is defined above) of any of Seller's
employees that was made prior to their employment by Seller or
any Intellectual Property of consultants of Seller which
Intellectual Property is not covered by the above mentioned
agreement with all such consultants.
6.6.6. Seller has conducted its business without infringement or
claim of infringement of any license, patent, copyright,
service xxxx, trademark, trade name, trade secret or other
intellectual property right of others that would have a
material adverse effect on the Business or assets of Seller.
There are no claims of infringement by others of any license,
patent, copyright, service xxxx, trademark, trade name, trade
secret or other Intellectual Property right of Seller.
6.7. Contracts. Seller has furnished to Buyer true and complete lists and
copies of all contracts, agreements, commitments, and undertakings
of any nature, written or oral, of the Seller, and all amendments,
supplements, modifications and waivers thereof, which relate in any
way to the operation of the Business, including, but not limited to,
all Assumed Contracts, as such term is defined in Section 1.1.2
above (collectively referred to as "Material Contracts"). All
Material Contracts are in full force and effect and are binding upon
the Seller and the other parties thereto, and the Seller has fully
performed all of its obligations thereunder. No party to a Material
Contract has made a claim to the effect that the Seller has failed
to perform an obligation thereunder. There is no known plan,
intention or indication of any contracting party to a Material
Contract to cause the termination, cancellation or modification of
such Material Contract or to reduce or otherwise
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 9
change its activity thereunder so as to adversely affect the
benefits derived or expected to be derived therefrom by the Seller.
On the Closing Date, there will be no Material Contracts existing or
relating to the operation of the Business that will be binding on
Buyer upon Closing except for the Assumed Contracts.
6.8. Litigation. There is no action, suit, claim, litigation, proceeding,
or investigation pending, or, to the knowledge of the Seller and the
Seller's Active Businessmen, threatened against the Seller, or
Seller's properties or rights, before any court, or by or before any
governmental body or arbitration board or tribunal.
6.9. Compliance With Laws, Regulations and Others
6.9.1. Seller has at all times conducted its Business in compliance
with its articles of incorporation and its bylaws.
6.9.2. Exhibit 6.9 attached hereto and by this reference
incorporated herein, contains a list of every current material
governmental license, permit, approval, order, directive and
agreement, pending, issued, or given to Seller with respect to
its conduct of the Business and its operations. Exhibit 6.9
also contains a list of all notices, reports and other
documents filed by the Seller with any government agency or
department. The Seller possesses all material licenses,
permits, and governmental approvals and authorizations which
are required in order to operate its business as presently
conducted, and the Seller is in compliance in all material
respects with all such licenses, permits, approvals, and
authorizations.
6.9.3. The Seller has complied with all applicable laws and
regulations material to its Business, including, without
limitation, all federal and state laws relating to the
employment of labor, including the provisions thereof relating
to wages, hours, collective bargaining and the payment of
social security taxes.
6.9.4. There are no investigations, proceedings, or actions of any
kind or nature pending or, to the knowledge of Seller and
Seller's Active Businessmen, threatened against the Seller by
any federal, state or local governmental or administrative
authority or agency, nor are there any outstanding orders of
such authorities and agencies limiting the Seller in the
operation of its Business.
6.10. Governmental Action. No authorization, consent or approval of, or
filing with, any court or any federal, state or local governmental
authority or agency is required in connection with the execution and
delivery of this Agreement.
6.11. No Conflict. Neither the execution and delivery of this Agreement by
the Seller and the Selling Shareholders nor the consummation by the
Seller and the Selling Shareholders of the transactions contemplated
by this Agreement will (i) conflict
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 10
with or result in any breach of any provision of its articles of
incorporation or bylaws; (ii) contravene or conflict with any
resolution adopted by the Seller or directors of the Seller; (iii)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, or other evidence
of indebtedness related to the Seller or any material license
agreement, lease, or other material contract, instrument, or
obligation related to the Seller to which it is a party or by which
it may be bound; (iv) violate any statute, rule, regulations, order,
writ, injunction, decree or arbitration award applicable to the
Seller; (v) result in the loss of, or in a violation or breach of
any of the terms, conditions or provisions of, any license, permit,
approval, or authorization related to the Seller; (vi) result in the
creation or imposition of, or subject Buyer to any liability for,
any conveyance or transfer tax or any similar tax; or (vii) result
in the creation of any material (individually or in the aggregate)
lien, including any claims, mortgages, pledges, liens, security
interests, encumbrances, or charges of any kind on any of the assets
owned or used by the Seller.
6.12. Employment Matters
6.12.1. Labor Matters
6.12.1.1. Seller has no collective bargaining agreements with
any of its employees. There is no labor union organizing
activity pending or threatened with respect to Seller.
6.12.1.2. There is no (1) unfair labor practice complaint
against Seller pending before the National Labor
Relations Board or any other local, state, or federal
governmental authority; (2) labor strike, slowdown, or
work stoppage actually occurring or, to the knowledge of
Seller and the Shareholders, threatened against Seller;
(3) representation petition respecting Seller's
employees pending before the National Labor Relations
Board; or (4) grievance or any arbitration proceeding
pending arising out of or under collective bargaining
agreements applicable to Seller.
6.12.1.3. Seller has not experienced any primary work stoppage
or other organized work stoppage involving its employees
in the past two years.
6.12.2. Employment Claims. There are no pending claims and, to
Seller and Seller's Active Businessmen's knowledge, no
threatened claims, by or on behalf of any of Seller's
employees under any federal, state, or local labor or
employment laws or regulations.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 11
6.12.3. Employee Benefits. Exhibit 6.12.3 (attached hereto and by
this reference incorporated herein) lists all pension,
retirement, profit-sharing, deferred compensation, bonus,
commission, incentive, life insurance, health and disability
insurance, hospitalization, and all other employee benefit
plans or arrangements (including, without limitation, any
contracts or agreements with trustees, insurance companies, or
others relating to any such employee benefit plans or
arrangements) established or maintained by Seller (the
"Plans"), and complete and accurate copies of all of the Plans
have been provided to Buyer.
6.12.4. Employment or other Agreements. Except as disclosed on
Exhibit 6.12.4 (attached hereto and by this reference
incorporated herein), each of Seller's employees is an
"at-will" employee and there are no written or oral
employment, commission, or compensation agreements of any kind
between Seller and any of its employees. Exhibit 6.12.4 lists
all written or oral employment, commission, or compensation
agreements of any kind between Seller and any independent
contractor. There are no pending claims and, to Seller's and
Seller's Active Businessmen's knowledge, no threatened claims
by or on behalf of any of its employees or independent
contractor alleging any violation of any agreement or contract
between Seller and any such employee or independent
contractor. Exhibit 6.12.4 lists all of Seller's current
employment or supervisory manuals, employment or supervisory
policies, and written information generally provided to
employees (such as applications or notices), and true and
complete copies of those manuals, policies, and written
information have been provided to Buyer.
6.12.5. List of All Employees and Independent Contractors;
Compensation. Exhibit 6.12.5 (attached hereto and by this
reference incorporated herein) contains a complete and
accurate list of the following, specifying all full names and
applicable job titles or other titles: (i) all employees of
Seller; (ii) all individuals who are currently performing
services for Seller related to its Business and are classified
as "consultants" or "independent contractors"; and (iii) all
officers of Seller. Exhibit 6.12.5 also completely and
accurately specifies the total amount paid or payable as
compensation to each employee and independent contractor of
Seller, and the basis of such compensation, whether fixed or
commission or a combination thereof, and accrued benefits for
such persons as of the date of this Agreement.
6.12.6. Severance. Seller has no severance pay plan, policy,
practice, or agreement with any of its employees.
6.13. Financial Position
6.13.1. Seller has delivered to Purchaser the financial statements
(the "Financial Statements") attached hereto as Exhibit 6.13.1
and by this reference
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 12
incorporated herein. The Financial Statements (i) present
fairly the financial condition and results of operations of
Seller as of the dates and for the periods specified therein,
(ii) are in accordance with the books and records of Seller,
and (iii) are prepared in accordance with consistently applied
accounting principles.
6.13.2. Seller does not have any liability or obligation (whether
absolute, accrued, contingent, or other, and whether due or to
become due) that is not accrued, reserved against, or
disclosed in the most recent balance sheet (the "Balance
Sheet") contained in the Financial Statements other than
liabilities incurred in the ordinary course of business
consistent with past practice since the date of such Balance
Sheet and the items set forth in Exhibit 6.13.2 attached
hereto, and by this reference incorporated herein.
6.13.3. Since the date of the Balance Sheet:
6.13.3.1. Seller has not entered into any transaction, which
was not in the ordinary course of its business;
6.13.3.2. Other than the Seller's Brokerage Fee as defined in
Section 6.16 below, there has been no material adverse
change in the condition (financial or otherwise) of
Seller;
6.13.3.3. there has been no damage to, or destruction or loss
of, physical property (whether or not covered by
insurance) which may have a material adverse effect on
the business or operations of Seller;
6.13.3.4. Seller has not declared or paid any dividend or made
any distribution on its securities, redeemed, purchased
or otherwise acquired any of its securities, granted any
options to purchase any securities, or issued any
securities;
6.13.3.5. Seller has not increased the compensation of any of
its officers or the rate of pay of its employees as a
group, except as part of regular compensation increases
in the ordinary course of its business;
6.13.3.6. Seller has not received notice that there has been a
loss of, or cancellation of a material order by, any
customer of Seller;
6.13.3.7. there has been no resignation or termination of
employment of any officer or key employee of Seller;
6.13.3.8. there has been no borrowing or agreement to borrow
by Seller or change in the contingent obligations of
Seller by way of guaranty, endorsement, indemnity,
warranty or otherwise or
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 13
grant of a mortgage or security interest in any
property of Seller;
6.13.3.9. there have been no loans made by Seller to its
stockholders, employees, officers and directors other
than travel advances and office advances made in the
ordinary course of business;
6.13.3.10. there has not been any payment of any obligation or
liability of Seller other than current liabilities paid
in the ordinary course of business;
6.13.3.11. there has been no sale, assignment or transfer of
any tangible asset of Seller, except in the ordinary
course of business and no sale, assignment or transfer
of any patent, trademark, trade secret or other
intangible asset of Seller;
6.13.3.12. other than the Seller's Brokerage Fee as defined in
Section 6.16 below, Seller has not incurred any
liabilities that in the aggregate exceed $5,000; and
6.13.3.13. Seller has not been a party to any transaction with
any officer, director, shareholder, or any entity with
whom the foregoing are associated whether through
control, common control, contractual, or other legal
relationship.
6.14. Tax Matters. All federal, state, foreign, county, local and other
tax returns required to be filed by or on behalf of Seller have been
timely filed and when filed were true and correct in all material
respects, and the taxes shown as due thereon were paid or adequately
accrued. Seller has duly withheld and paid all taxes which it is
required to withhold and pay relating to salaries, wages and other
compensation, remuneration or benefits paid to the employees of
Seller, and Seller shall be entitled to all tax refunds attributable
to its filings for the periods for which it is responsible. Seller
is not engaged in any dispute with any state or local jurisdiction
in respect of sales, use, real property or personal property taxes.
6.15. Insurance.
6.15.1. Seller has delivered to Purchaser (i) true and complete
copies of all policies of insurance to which Seller is a party
or under which it is or has been covered at any time within
the two (2) years preceding the date of this Agreement and
(ii) true and complete copies of all pending applications for
policies of insurance.
6.15.2. Seller has paid all premiums due, and has otherwise
performed all of its obligations, under each policy to which
it is a party or that provides coverage to it or any of its
directors or officers in connection with their performance of
services to Seller.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 14
6.16. Finders and Brokers. Seller will indemnify Buyer and hold it
harmless from any liability or expense arising from any claim for
brokerage commissions, finder's fees or other similar compensation
based upon any agreement, arrangement or understanding made by or on
behalf of Seller, including, but not limited to, any claim by Xxxxx
Xxxxxx or the Xxxxxx Group, Inc. (the "Seller's Brokerage Fee").
6.17. Books and Records. The books and records of Seller with respect to
its business are in all material respects complete and correct and
have been maintained in accordance with good business practices.
6.18. Investment Representation. The CyPost shares issued to each Selling
Shareholder have not been registered under the Securities Act of
1933, as amended, and each the Seller is acquiring such shares for
investment purposes only and not with a view to any further
distribution thereof or public offering thereof, within the meaning
of the Securities Act of 1933, as amended, and that each such
Selling Shareholder may be required to bear the risks of holding the
shares indefinitely, or until such time as they may be disposed of
in accordance with Rule 144 which contains a number of conditions to
be met such as (i) the availability of then current public
information about CyPost, (ii) restrictions on the manner of sale,
(iii) a one year holding period, and (iv) applicable volume
limitations on the number of securities that may be sold. In
addition, each such Selling Shareholder is aware that Rule 144
restricts more severely the resale of securities of "affiliates" of
an insurer and that each such Selling Shareholder's ability to
resell such securities, may depend, in part upon such status. Each
such Selling Shareholder has also been afforded the opportunity to
meet with and discuss the business condition, management, prospects,
and financial condition of CyPost, and has been afforded the
opportunity to question CyPost's chief executive officer as to these
matters, and while CyPost has described to you its business and
prospects, in material respects, such description does not purport
to be exhaustive in nature or scope. Each such Selling Shareholder
has been advised that the current version of CyPost's Registration
Statement on Form 10-SB under the Securities and Exchange Act of
1934, as amended, is publicly available for inspection on the SEC's
website found at xxx.xxx.xxx, and has been provided copies of
CyPost's five (5) most recent Form 8-K filings with the SEC, and has
had a chance to review such documents, and that either by each such
Selling Shareholder, or together with an investment representative
that each such Selling Shareholder has retained, each such Selling
Shareholder has the knowledge and experience in financial matters to
evaluate the risks and merits of the prospective investment.
6.19. Truth and Completeness of Representations and Warranties. Neither
this Agreement nor any exhibit or schedule hereto nor any other
document furnished by Seller or its officers in connection with the
transactions contemplated herein contains any untrue statement of
any material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading; and
there is no fact which materially and adversely affects the
business, prospects, affairs,
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 15
operations, condition, financial or otherwise, of Seller, which has
not been disclosed to Buyer by Seller. The representations and
warranties of Seller and Seller's Active Businessmen and such other
materials are accurate and complete in all material respects.
SECTION 7. REPRESENTATIONS OF BUYER
Buyer represents and warrants to Seller as follows:
7.1. Corporate Existence. Buyer is a corporation duly organized and
validly existing under the laws of the state of Delaware. Buyer has
all requisite corporate power and authority to enter into this
Agreement and perform its obligations hereunder.
7.2. Binding Effect. This Agreement constitutes the valid and binding
agreement of Buyer, as applicable, enforceable in accordance with
their respective terms, except as enforceability may be limited by
bankruptcy, reorganization, insolvency, or similar laws affecting
the enforcement of creditors' rights or by the application of
general principles of equity.
7.3. Transfer Not Subject to Third-Party Approval. Except as disclosed in
Exhibit 7.3, attached hereto and by this reference incorporated
herein, the execution and delivery of this Agreement by Buyer and
the consummation of the contemplated transactions will not require
the authorization, consent, or approval of any third party,
including any governmental subdivision or regulatory agency, which
will not have been obtained at or prior to Closing.
SECTION 8. COVENANTS OF SELLER
8.1. Seller's Operation of Business Prior to Closing. Seller agrees that
between the date of this Agreement and the Closing Date, Seller will
use its best efforts to conduct the Business in a reasonable and
prudent manner in accordance with past practices; will engage in no
transaction out of the ordinary course of business; will enter into
no agreement extending beyond the Closing Date except with respect
to transactions entered into in the ordinary course of business; and
will use its best efforts to preserve its existing business
organization and relations with its employees, customers, suppliers,
and others with whom it has a business relationship.
8.2. Access to Business and Information. Until the Closing Date, Seller
will provide Buyer and its representatives with reasonable access
during business hours (or at other times with Seller's approval) to
the Assets, titles, contracts, and records of Seller and furnish
such additional information concerning the Business as Buyer from
time to time may reasonably request.
8.3. Employee Matters.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 16
8.3.1. Before Closing, Seller will deliver to Buyer a list of the
names of all persons on the payroll of Seller, together with a
statement of amounts paid to each during Seller's most recent
fiscal year and amounts paid for services from the beginning
of the current fiscal year to the Closing date. Seller will
also provide Buyer with a schedule of all employee bonus
arrangements and a schedule of other material compensation or
personnel benefits or policies in effect.
8.3.2. Before the Closing Date, Seller will not, without Buyer's
prior written consent, except for the terminations described
below, enter into any material agreement with its employees,
materially increase the rate of compensation or bonus payable
to or to become payable to any employee, or effect any
material changes in the management, personnel policies, or
employee benefits, except in accordance with existing
employment practices.
8.3.3. Seller and Seller's Active Businessmen will undertake, at
Buyer's expense, all reasonable action necessary or
appropriate to permit Buyer, if Buyer so desires, to take over
Seller's pension and profit-sharing plan, if any, as a
successor employer, and will cooperate with Buyer with respect
to this undertaking.
8.3.4. As of the Closing Date, Seller will terminate all of its
employees and will pay each employee all wages, commissions,
and accrued vacation pay earned up to the time of termination,
including overtime pay, as required by law or contract.
8.4. Change of Name. On or before the Closing Date, Seller will take all
action necessary or appropriate to permit Buyer to legally commence
use of Seller's name on the Closing Date.
8.5. Removal of Chat Site Promotion from Web Site. On or before the
Closing Date, Seller will remove from its web sites any reference to
third party chat room-related web sites, including, but not limited
to, the following: (i) xxxxxxxxx.xxx; (ii) xxxxxxxxxx.xxx; (iii)
xxxxxxxxx.xxx; and (iv) xxxxxxxxxx.xxx.
8.6. Conditions and Best Efforts. Seller will use its best efforts to
effectuate the transactions contemplated by this Agreement, and will
do all acts and things as may be required to carry out its
obligations under this Agreement and to consummate this Agreement.
8.7. Broker. Seller has retained Xxxxx Xxxxxx and/or Xxxxxx Group, Inc.
as its broker, and Seller shall be solely responsible for payment of
all amounts due Xxxxxx Group, Inc. in connection with the sale of
the Assets and shall hold Buyer harmless therefrom.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 17
8.8. Confidentiality. Seller and all Selling Shareholders acknowledge the
confidential and proprietary nature of the Confidential Information
(as defined below) and agree that, absent the prior written consent
of Buyer, none of them shall reveal or disclose any Confidential
Information for any purpose to any other person, firm, corporation
or other entity, or use any Confidential Information for their
direct or indirect benefit or for any other purpose. Seller or
Selling Members may disclose Confidential Information to their
attorney or accountants, but only if such persons agree to be bound
by the terms of this Section 8.8. Seller and the Selling
Shareholders acknowledge and agree that in the event of their breach
of this Section 8.8, Buyer will suffer irreparable injuries not
compensated by money damages and therefore shall not have an
adequate remedy at law. Accordingly, Buyer shall be entitled to a
preliminary and final injunction to prevent any further breach of
this Section 8.8 or further unauthorized use of Confidential
Information. This remedy is separate and apart from any other remedy
Buyer may have. As used herein, "Confidential Information" means (i)
any and all proprietary memos, research, forms, databases, other
data, drawings, specifications, computer programs, customer lists,
customer files, marketing plans, and other records and documentation
related to the Seller's Business, operations, financial status,
technology and/or Intellectual Property; (ii) any other information
marked or designated as confidential; (iii) all information, whether
or not in written form and whether or not designated as
confidential, which is known to the covenanting party as being
treated by Seller as confidential; and (iv) all information provided
to Seller by third parties which Seller is obligated to keep
confidential. This provision shall survive the Closing of this
Agreement indefinitely.
SECTION 9. CONDITIONS PRECEDENT TO CLOSING
9.1. Buyer's Conditions. The obligation of Buyer to purchase the Assets
and otherwise close the transactions contemplated by this Agreement
are subject to the fulfillment, before or on the Closing Date, of
each of the following conditions, any one or a portion of which may
be waived in writing by Buyer:
9.1.1. All representations and warranties made in this Agreement by
Seller and Seller's Active Businessmen shall be true in all
material respects as of the Closing Date as fully as though
such representations and warranties had been made on and as of
the Closing Date, and, as of the Closing Date, neither Seller
nor any Selling Shareholder or Xxxxxxxx Xxxx shall have failed
in any material respect to perform any covenant contained in
this Agreement.
9.1.2. There shall have been no material adverse change in the
manner of the operation of the Business between the date of
this Agreement and the Closing Date.
9.1.3. At the Closing Date no suit, action, or other proceeding
shall have been threatened or instituted against the Seller or
any Selling Shareholder
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 18
affecting in any way the Business or the Assets, or which
attempts to, restrain, enjoin, or otherwise prevent the
consummation of this Agreement or its contemplated
transactions.
9.1.4. All obligations of each of the Seller, Selling Shareholders
and Xxxxxxxx Xxxx set forth in Section 10.2 below shall have
been fully performed to the sole satisfaction of Buyer.
9.2. Seller's Conditions. The obligation of Seller to sell the Assets is
subject to the fulfillment, before or on the Closing Date, of each
of the following conditions, any one or portion of which may be
waived in writing by Seller:
9.2.1. All representations and warranties made in this Agreement by
Buyer shall be true in all material respects as of the Closing
Date as fully as though such representations and warranties
had been made on and as of the Closing Date, and, as of the
Closing Date, Buyer shall not have failed in any material
respect to perform any covenant contained in this Agreement.
9.2.2. At the Closing Date no suit, action, or other proceeding
shall have been threatened or instituted against the Seller to
restrain, enjoin, or otherwise prevent the consummation of
this Agreement or the contemplated transactions.
9.2.3. All obligations of Buyer set forth in Section 10.3 below
shall have been fully performed to the sole satisfaction of
Seller.
SECTION 10. CLOSING
10.1. Time and Place. The transactions contemplated by this Agreement
shall be closed ("Closing") at the offices of Xxxxxxx Xxxxx & Xxxxx
LLP at 000 X.X. Columbia Street, Suite 1400, Portland, Oregon, on a
date mutually agreed to by Buyer and Seller, but in no event later
than November 9, 1999 ("Closing Date").
10.2. Obligations of Seller at Closing. At Closing, Seller shall execute
(where applicable) and deliver to Buyer the following:
10.2.1. A Xxxx of Sale substantially in the form of Exhibit 10.2.1
attached hereto, , properly endorsed certificates of title,
and other instruments of transfer, in form and substance
satisfactory to Buyer, necessary to transfer and convey all of
the Assets to Buyer.
10.2.2. Assignment of the lease, as amended, on the premises at 0000
X.X. Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx (the "Premises Lease"),
executed by Xxxxx Xxxx, in form and substance satisfactory to
Buyer, along with the lessor's consent to the same, and all
consents to all assignments of all other Assumed Contract.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 19
10.2.3. Possession of the leased premises described in the Premises
Lease.
10.2.4. Properly executed assignments of all intellectual property
rights associated with the Business, including, but not
limited to: (i) all federal and state registered trademarks,
including the goodwill associated therewith; (ii) copyrights,
including, but not limited to, rights in software and rights
in the visual, textual, and/or audio elements of any web site
or chat site associated with the Business, with the exception
of those certain web sites or chat sites specified in the
Excluded Assets; (iii) domain names owned by Seller and/or
used in association with the Business, with the exception of
those certain domain names specified in the Excluded Assets;
and (iv) any other proprietary or intellectual property rights
owned by or used in association with the Business, all in form
and substance satisfactory to Buyer. Without limiting the
generality of the foregoing, Seller shall execute and deliver
the Trademark/Service Xxxx Assignment substantially in the
form of Exhibit 10.2.4 attached hereto.
10.2.5. Properly executed Articles of Amendment changing Seller's
corporate name from "Internet Arena, Inc" to "Neffco, Inc."
10.2.6. All licenses and permits necessary to the operation of the
Business.
10.2.7. An officer's certificate from Seller's corporate secretary
affirming the authority of Seller's President to validly
execute this Agreement and all other necessary documentation
in connection with this Agreement on behalf of Seller.
10.2.8. An officer's certificate from Seller's corporate secretary
certifying the genuineness and completeness of corporate
resolutions of Seller's Board of Directors and shareholders
approving all transactions contemplated by this Agreement.
10.2.9. Delivery of a fully executed Xxxx Employment Agreement
contemplated by Section 5(i) and Exhibit 5.1 of this Agreement
in form and substance satisfactory to Buyer.
10.2.10. Delivery of a fully executed Non-Competition Agreement
contemplated by Section 5(ii) and Exhibit 5.2 of this
Agreement in form and substance satisfactory to Buyer.
10.2.11. Such other certificates and documents as may be called for
by the provisions of this Agreement.
10.3. Obligations of Buyer at Closing. At Closing (or on such other date
as indicated below), Buyer shall execute (where applicable) and
deliver to Seller the following:
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 20
10.3.1. Delivery of the Closing Cash Payment and Promissory Note as
contemplated by Section 3.1.
10.3.2. Delivery of a fully executed Xxxx Employment Agreement
contemplated by Section 5 and Exhibit 5.1 of this Agreement in
form and substance satisfactory to Seller.
10.3.3. Delivery of the Closing Date CyPost Shares within ten (10)
full business days after the Closing Date.
10.4. Other Closing Documentation.
10.4.1. The parties shall prorate all expenses as set forth in
Section 4 within the time period mandated by Section 4..
10.4.2. Exhibit 10.4(a) shall set forth any wiring instructions for
payments to be made at Closing.
SECTION 11. INDEMNIFICATION AND SURVIVAL
11.1. Survival of Representations and Warranties and Certain Covenants.
All representations and warranties made in this Agreement shall
survive the Closing of this Agreement. All covenants which, in
accordance with a provision of this Agreement, shall be performed
after the Closing Date and all other covenants which by their nature
shall or will be performed after the Closing, shall all survive the
Closing of this Agreement, including, but not limited to, Sections
3.1.2, 3.1.4, 3.2, and 4 of this Agreement. After the Closing,
Seller and Selling Shareholders agree to take such actions as
reasonably requested by Buyer to complete any obligations of Seller
or Selling Shareholders in this Agreement that have not been fully
performed by the Closing Date.
11.2. Seller's and Seller's Active Businessmen's Indemnification. Seller
and Selling Shareholder each hereby agree jointly and severally to
indemnify and hold Buyer, its successors and assigns, harmless from
and against (a) claims, demands, causes of action, liabilities,
costs (including attorney fees), damages, and all other obligations
of every kind and description, contingent or otherwise, arising out
of or related to the operation of the Business prior to the close of
business on the Closing Date, except for claims, liabilities, and
obligations of Seller expressly assumed by Buyer under this
Agreement; and (b) any and all claims, demands, causes of action,
liabilities, costs (including attorney fees), damages, and all other
obligations or deficiencies of every kind and description resulting
from any misrepresentation, breach of warranty or covenant, or
nonfulfillment of any agreement on the part of any Seller and
Selling Shareholder under this Agreement, including, but not limited
to, any breach of any representation and warranty in Section 7 of
this Agreement.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 21
11.3. Buyer's Indemnification. Buyer agrees to defend, indemnify, and hold
harmless Seller and the Seller's Active Businessmen from and against
any and all damage or deficiency resulting from (a) any and all
claims, demands, causes of action, liabilities, costs (including
attorney fees), damages, and all other obligations of every kind and
description, contingent or otherwise, arising out of or related to
the operation of the Business after the close of ----- business on
the Closing Date, except for claims, liabilities, and obligations of
Seller existing as of the Closing Date and not assumed by Buyer
under this Agreement and claims, liabilities and obligations paid by
insurance maintained by Seller, Selling Shareholder, or Buyer; and
(b) any and all claims, demands, causes of action, liabilities,
costs (including attorney fees), damages, and all other obligations
or deficiencies of every kind and description resulting from any
misrepresentation, breach of warranty or covenant, or nonfulfillment
of any agreement on the part of Buyer under this Agreement.
11.4. Buyer's Limited Indemnification of Certain Parties. In the event
that Xxxxx Xxxx, Xxxxxxxx Xxxx, or Xxxx Xxxxxxxx (hereinafter
"Limited Indemnitees") incurs liability arising out of personal
guarantees provided by one or more such Limited Indemnitees of any
of the Assumed Contracts, Buyer agrees to indemnify such Limited
Indemnitees for liabilities actually paid by such Limited
Indemnitees pursuant to such personal guaranty, up to, but in no
event more than, an aggregate maximum amount of Seven Hundred Thirty
Four Thousand and Two Hundred Sixty United States Dollars and Eighty
Eight Cents ($734,260.88).
11.5. Notice. If any claim is asserted against any party that would give
rise to a claim for indemnification by such party against any party
to this Agreement under the provisions of Sections 11.2 through
11.4, the party seeking indemnification shall promptly give written
notice to the other party concerning such claim.
11.6. Conflicts Between This Section 11 and Provisions of Consents to
Assignment of Assumed Contracts. The parties agree that if any
provision of any agreement pursuant to which a lessor consents to
the assignment of any Assumed Contract by Seller to Buyer
(hereinafter, "Lessor's Consent Agreement") conflicts with any
provisions of this Agreement, including, but not limited to, any
provision governing indemnifications between Buyer and Seller, that,
as between the Buyer and Seller, the terms and conditions of this
Agreement shall govern over any conflicting provisions in such
Lessor's Consent Agreement.
SECTION 12. TERMINATION OF AGREEMENT
This Agreement may be terminated by (i) mutual written consent of Buyer
and Seller; or (ii) upon Buyer's election to terminate this Agreement by notice
to Seller, or upon Seller's election to terminate this Agreement by notice to
Buyer, if any one of the following conditions occurs: (a) the terminating party
shall have discovered a material error, misstatement, or omission in the
representations and warranties made in this Agreement by the other party which
shall not have been cured by such other party within 14 days after written
notice to such other party specifying in detail such asserted error,
misstatement, or omission, or by the Closing Date,
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 22
whichever first occurs; or (b) all of the conditions precedent of the
terminating party's obligations under this Agreement have not occurred and have
not been waived by the terminating party on or prior to the Closing Date. The
party with a right to terminate this Agreement pursuant to Section 12(ii) above
shall not be bound to exercise such right, and its failure to exercise such
right shall not constitute a waiver of any other right it may have under this
Agreement, including but not limited to remedies for breach of a representation,
warranty, or covenant.
SECTION 13. RISK OF LOSS
The risk of loss, damage, or destruction to any of the equipment,
inventory, or other personal property to be conveyed to Buyer under this
Agreement shall be borne by Seller to the time of Closing. In the event of such
loss, damage, or destruction, Seller, to the extent reasonable, shall replace
the lost property or repair or cause to repair the damaged property to its
condition before the damage. If replacement, repairs, or restorations are not
completed before Closing, then the Purchase Price shall be adjusted by an amount
agreed upon by Buyer and Seller that will be required to complete the
replacement, repair, or restoration following Closing. If Buyer and Seller are
unable to agree and the damage or destruction is material (i.e., exceeds $5,000
to replace or repair), then Buyer, at its sole option and notwithstanding any
other provision of this Agreement, upon notice to Seller, may rescind this
Agreement and declare it to be of no further force and effect, in which event
there shall be no closing of this Agreement and all the terms and provisions of
this Agreement shall be deemed null and void. If, before Closing, the Premises
are damaged such that is cannot reasonably be used by Buyer as contemplated in
the Premises Lease, or if the Premises are destroyed, then Buyer may rescind
this Agreement in the manner provided above unless arrangements for repair
satisfactory to all parties involved are made prior to Closing.
SECTION 14. MISCELLANEOUS
14.1. Binding Effect. This Agreement shall be binding on and inure to the
benefit of the parties and their heirs, personal representatives,
successors and assigns.
14.2. Assignment. Neither Seller nor Buyer shall assign its rights and
obligations under this Agreement without the prior written consent
of the other, except that Buyer may upon written notice to Seller
assign this Agreement to a company affiliated with Buyer ("Buyer's
Affiliate"). In the event of such assignment to Buyer's Affiliate,
Buyer shall remain secondarily liable to Seller on the obligations
contained in this Agreement.
14.3. Notices. Any notice or other communication required or permitted to
be given under this Agreement shall be in writing and shall be
mailed by certified mail, return receipt requested, postage prepaid,
or by overnight delivery service provided such service is in the
practice of keeping verifiable records of the time and date of
delivery, addressed to the parties at the addresses as set forth
below:
If to Buyer: CyPost Corporation
000 X. Xxxxxxxxx
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 00
Xxxxx Xxxxxxxxx, X.X. X0X 0X0
XXXXXX
with a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxx & Xxxxx, LLP
000 X.X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
If to Seller: Internet Arena, Inc.
0000 X.X. Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
with a copy to: Xxxxxx Xxxxxxxxx, Esq.
0000 X.X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Any notice or other communication shall be deemed to be given at the
expiration of the seventh (7th) day after the date of deposit in the
United States or Canadian mail, or, in the case of overnight
delivery service, immediately on receipt. The addresses to which
notices or other communications shall be mailed may be changed from
time to time by giving written notice to the other party as provided
in this section.
14.4. Attorney Fees. If any suit or action is filed by any party to
enforce this Agreement or otherwise with respect to the subject
matter of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney fees incurred in preparation or in
prosecution or defense of such suit or action as fixed by the trial
court, and if any appeal is taken from the decision of the trial
court, reasonable attorney fees as fixed by the appellate court.
14.5. Amendments. This Agreement may be amended only by an instrument in
writing executed by all the parties.
14.6. Headings. The headings used in this Agreement are solely for
convenience of reference, are not part of this Agreement, and are
not to be considered in construing or interpreting this Agreement.
14.7. Entire Agreement. This Agreement (including the exhibits) sets forth
the entire understanding of the parties with respect to the subject
matter of this Agreement and supersedes any and all prior
understandings and agreements, whether written or oral, between the
parties with respect to such subject matter.
14.8. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when executed and delivered
shall be an original, but all of which together shall constitute one
and the same instrument.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 24
14.9. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any respect for any reason, the validity and
enforceability of any such provision in any other respect and of the
remaining provisions of this Agreement shall not be in any way
impaired.
14.10. Waiver. A provision of this Agreement may be waived only by a
written instrument executed by the party waiving compliance. No
waiver of any provision of this Agreement shall constitute a waiver
of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. Failure to enforce any provision of
this Agreement shall not operate as a waiver of such provision or
any other provision.
14.11. Further Assurances. From time to time, each of the parties shall
execute, acknowledge, and deliver any instruments or documents
necessary to carry out the purposes of this Agreement.
14.12. Time of Essence. Time is of the essence for each and every
provision of this Agreement.
14.13. No Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer on any person, other than the parties
to this Agreement, any right or remedy of any nature whatsoever.
14.14. Expenses. Each party shall bear its own expenses in connection with
this Agreement and the transactions contemplated by this Agreement.
14.15. Governing Law; Venue. This Agreement has been made entirely within
the state of Oregon, and shall be governed by and construed in
accordance with the laws of the state of Oregon. If any suit or
action is filed by any party to enforce this Agreement or otherwise
with respect to the subject matter of this Agreement, venue shall be
in the federal or state courts in Multnomah County, Oregon.
14.16. Representation. Xxxxxxx Xxxxx & Xxxxx LLP represents only Buyer in
this transaction, and Seller acknowledges it has been advised to
have this Agreement reviewed by its own independent counsel.
14.17. Xxxxxx Xxxxxxxxx, PC represents Seller only; Selling Shareholders
acknowledge that they have been advised to have this Agreement
reviewed by their own independent counsel.
The remainder of this page intentionally left blank.
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 25
The parties have executed this Agreement as of the date set forth above.
BUYER SELLER:
CYPOST CORPORATION INTERNET ARENA, INC.
By: By:
------------------------------ -------------------------------
Its: Its:
------------------------------ -------------------------------
SELLING SHAREHOLDERS:
-----------------------------------
Xxxxx Xxxx
-----------------------------------
Xxxxxxx Xxxxxx
-----------------------------------
Xxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxxx and Xxxx Xxxx Living Trust,
by ____________________, Trustee
-----------------------------------
Xxxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
-----------------------------------
Xxxx Xxxxxxxx
-----------------------------------
XXXXXXXX XXXX:
Xxxxxxxx Xxxx, individually
CyPost/Internet Arena -- Asset Purchase Agreement -- Page 26
