AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") dated as of March
31, 1999, is by and between Xxxxxxxxxxxxxx.xxx Corporation, a Nevada corporation
("Buyer"), and Xxxx Xxxxx ("Seller") the sole stockholder of Xxxxxxxxxx.xxx
Corp., a Massachusetts corporation (the "Company").
BACKGROUND:
The Seller has created and has operated as a sole proprietorship a site on
the World Wide Web under the Xxxxxxxxxx.xxx domain name. The Seller has, or
will, simultaneously with the execution of this Agreement transfer to the
Company all assets used or useful in the ownership and operation of such
Website.
The Seller owns 100 Shares of voting common stock, no par value, of the
Company, constituting all of the issued and outstanding capital stock of the
Company (the "Shares"). The Buyer desires to acquire all of the Shares, and the
Seller desires to exchange all of the Shares for 100,000 Shares of voting common
stock, par value $.001 per Share, of the Buyer, in an exchange that qualifies
under Sections 354 and 368 of the Internal Revenue Code of 1986, as amended.
This Agreement is being entered into for the purpose of implementing the
foregoing desires, and sets forth the terms and conditions pursuant to which the
Seller is selling to the Buyer, and the Buyer is purchasing from the Seller
solely in exchange for Shares of voting common stock of the Buyer, all of the
Shares.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement; and its Exhibits and Schedules the
following terms have the meanings specified or referred to in this Section 1:
"ASSETS"-- All tangible and intangible property owned or used by
Seller or the Company in the operation of the Website, including, but not
limited to those assets described in Schedule 1.1 hereto.
"APPLICABLE CONTRACT" -- any Contract (a) under which the Company
has or may acquire any rights, (b) under which the Company has or may become
subject to any obligation or liability, or (c) by which the Company or any of
the assets owned or used by it is or may become bound, including, without
limitation all contracts assigned by Seller to the Company, which Contracts
constitute all Contracts relating in any way to the Website, which Contracts are
listed in Schedule 1.2 hereto.
"BREACH" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform
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or comply with, such representation, warranty, covenant, obligation, or other
provision, or (b) any claim (by any Person) or other occurrence or circumstance
that is or was inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term "Breach" means any such inaccuracy,
breach, failure, claim, occurrence, or circumstance.
"BUYER" -- as defined in the first paragraph of this Agreement.
"BUYER'S SHARES" -- as defined in Section 2.2.
"CLOSING" -- as defined in Section 2.3.
"CLOSING DATE" -- the date and time as of which the Closing actually
takes place.
"COMPANY" -- as defined in the first paragraph of this Agreement.
"CONSENT" -- any approval, Consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONSULTING AGREEMENT" - as defined in Section 2.4(b).
"CONTEMPLATED TRANSACTIONS" -- all of the transactions contemplated
by this Agreement, including:
(a) the sale of the Shares by Seller to Buyer;
(b) the performance by Buyer and Seller of their respective
covenants and obligations under this Agreement; and
(c) Buyer's acquisition and ownership of the Shares and
exercise of control over the Company.
"CONTRACT" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"DAMAGES" -- as defined in Section 5.2.
"DISCLOSURE LETTER" -- the disclosure letter delivered by Seller to
Buyer concurrently with the execution and delivery of this Agreement.
"ENCUMBRANCE" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"GOVERNMENTAL AUTHORIZATION" -- any approval, Consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" -- any:
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(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 3.12.
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if
(a) such individual is actually aware of such fact or other
matter; or.
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
"LEGAL REQUIREMENT" -- any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
"ORDER" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORGANIZATIONAL DOCUMENTS" -- (a) the articles or certificate of
incorporation, minutes of organization meetings, and the bylaws of a
corporation; and (b) any amendment to any of the foregoing.
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING" -- any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"RELATED PERSON" -- with respect to a particular individual:
(a) each other member of such individual's Family;
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(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 5% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 5% of the outstanding equity securities or
equity interests in a Person.
"REPRESENTATIVE" -- with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"SECURITIES ACT" -- the Securities Act of 1933 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.
"SELLER" -- as defined in the first paragraph of this Agreement.
"SELLER'S RELEASE" -- as defined in Section 2.4.
"SHARES" -- as defined in the Background to this Agreement.
"WEBSITE" - the WorldWide Web Internet site operated under the
Healthseek domain name at xxx.Xxxxxxxxxx.xxx.
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2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES. Subject to the terms and conditions of this Agreement,
at the Closing, Seller will sell and transfer the Shares to Buyer, and Buyer
will purchase the Shares from Seller.
2.2 CONSIDERATION. In consideration of the sale and transfer of the
Shares, the Buyer will issue and deliver to Seller in full payment for the
Shares, 100,000 Shares of common stock, $.001 par value, of Buyer ("Buyer's
Shares"), and will assume, from the date of Closing, any and all costs and
expenses related to the ongoing maintenance of the Website and the Company,
which Seller represents currently averages approximately $100 per month.
2.3 CLOSING. The purchase and sale (the "Closing") provided for in
this Agreement will take place simultaneously with the execution of this
Agreement or as soon thereafter as possible and practical.
2.4 CLOSING OBLIGATIONS. At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock
powers), for transfer to Buyer;
(ii) a release in the form of Exhibit 2.4(a)(ii)
executed by Seller ("Seller's Release"); and,
(iii) an opinion of Seller's counsel in the form
attached hereto as Exhibit 2.4(a)(iii)
(b) Buyer will cause its transfer agent to deliver to Seller
certificates representing the Buyer's Shares within a reasonable time after the
closing. Such certificates shall bear a restrictive legend in the form attached
hereto as Exhibit 2.4(b). Buyer will also cause the Company to enter into a
Consulting Agreement with Seller in the form attached hereto as Exhibit 2.4(b).2
(the "Consulting Agreement").
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 THE WEBSITE. Seller is the sole creator of the Website and,
prior to their conveyance to the Company, owned the Assets, free and clear of
all Encumbrances.
3.2 ORGANIZATION AND GOOD STANDING.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of Massachusetts, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts.
(b) Seller has delivered to Buyer copies of the Organizational
Documents of the Company, as currently in effect.
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3.3 AUTHORITY; NO CONFLICT; RECEIPT OF INFORMATION.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Seller has the absolute and unrestricted right, power, authority, and capacity
to execute and deliver this Agreement and to perform his obligations under this
Agreement.
(b) Except as set forth in Part 3.3 of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation
of (A) any provision of the Organizational Documents of the Company, or (B) any
resolution adopted by the board of directors or the Seller;
(ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge any of
the Contemplated Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which the Company or Seller, or any
of the Assets, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by the Company or that otherwise relates
to the business of, or any of the assets owned or used by, the Company;
(iv) cause Buyer or the Company to become subject to, or
to become liable for the payment of, any Tax;
(v) contravene, conflict with, or result in a violation
or Breach of any provision of, or give any Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any Applicable Contract or any Contract to
which Seller is subject; or
(vi) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by the
Company.
Except as set forth in Part 3.3 of the Disclosure Letter, neither
Seller nor the Company is or will be required to give any notice to or obtain
any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
(c) Seller is acquiring the Buyer's Shares for his own account
and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act. Seller understands and agrees that the Buyer's Shares
constitute "restricted securities" and cannot be sold without registration,
unless an exemption from registration is available.
(d) Seller acknowledges that he has received copies of all
Forms 10-K and 10-Q and the Proxy Statement dated February 9, 1999 filed by
Buyer with the Securities and Exchange Commission and that he has been given an
opportunity to ask questions of and receive answers from Buyer with respect to
Buyer's business, financial condition, management, prospects and any other
relevant matters. Seller has not requested any additional information from Buyer
and has made his decision to accept the Buyer's Shares in reliance solely upon
the foregoing documents.
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Seller acknowledges that Buyer did not solicit Seller by any means of general
solicitation or advertisement. Seller has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of an investment in the Buyer's Shares and is able to bear the economic
risk of such investment for an indefinite period of time. Seller understands
that the Buyer's Shares are restricted and that Seller is acquiring the Buyer's
Shares without the expectation or desire of a resale or distribution with
respect thereto and has no need for liquidity with respect to the Buyer's
Shares. Seller recognizes that an investment in the Buyer's Shares involves
risks and that he may not be able to sell or dispose of the Buyer's Shares
readily. Seller understands that the Certificates evidencing the Buyer's Shares
will bear a restrictive legend, as described herein and also referring to the
rights of set-off provided for in this Agreement. Seller is familiar with the
resale requirements of Rule 144 of the Securities and Exchange Commission and
understands that one of those requirements is a holding period of one or two
years.
3.4 CAPITALIZATION. The authorized equity securities of the Company
consists of 100 Shares, no par value, of which 100 Shares are issued and
outstanding and constitute the Shares. Seller is the record and beneficial owner
and holder of the Shares, free and clear of all Encumbrances. No legend or other
reference to any purported Encumbrance appears upon any certificate representing
equity securities of the Company. All of the outstanding equity securities of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts relating to the issuance, sale, or
transfer of any equity securities or other securities of the Company. None of
the outstanding equity securities or other securities of the Company was issued
in violation of the Securities Act or any other Legal Requirement. The Company
does not own, nor does the Company have any Contract to acquire, any equity
securities or other securities of any Person (other than the Company) or any
direct or indirect equity or ownership interest in any other business.
3.5 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of the Company, all of which have been made
available to Buyer, are complete and correct. The minute book of the Company
contains accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Board of Directors, and committees of the
Board of Directors of the Company, and no meeting of any such stockholders,
Board of Directors, or committee has been held for which minutes have not been
prepared and are not contained in such minute books. All of those books and
records are in the possession of the Company.
3.6 TITLE TO ASSETS; ENCUMBRANCES. The Company owns all the
Assets free and clear of all Encumbrances.
3.7 NO LIABILITIES. The Company has no liabilities or obligations of
any nature whether known or unknown and whether absolute, accrued, contingent,
or otherwise, except the obligation to perform Seller's obligations under the
Applicable Contracts.
3.8 EMPLOYEES. The Company has no employees.
3.9 COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) The Company is and, during the period the Website was
operated by Seller, Seller was in full compliance with each Legal Requirement
that is or was applicable to the Website or to the operation of the Website or
the ownership or use of any of the Assets;
(b) No event has occurred or circumstance exists that (with or
without notice or lapse of time) (i) may constitute or result in a violation by
the Company of, or a failure on
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the part of the Company to comply with, any Legal Requirement, or (ii) may give
rise to any obligation on the part of the Company to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature; and
(c) Neither Seller nor the Company have received any notice or
other communication (whether oral or written) from any Governmental Body or any
other Person regarding (i) any actual, alleged, possible, or potential violation
of, or failure to comply with, any Legal Requirement, or (ii) any actual,
alleged, possible, or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature.
(d) Part 3.9 of the Disclosure Letter contains a complete and
accurate list of each Governmental Authorization that is held by the Company or
that otherwise relates to the business of, or to any of the assets owned or used
by, the Company. Each Governmental Authorization listed or required to be listed
in Part 3.9 of the Disclosure Letter is valid and in full force and effect.
Except as set forth in Part 3.9 of the Disclosure Letter:
(i) the Company is, and Seller has at all times been, in
full compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Part 3.9 of the
Disclosure Letter;
(ii) no event has occurred or circumstance exists that
may (with or without notice or lapse of time) (A) constitute or result directly
or indirectly in a violation of or a failure to comply with any term or
requirement of any Governmental Authorization listed or required to be listed in
Part 3.9 of the Disclosure Letter, or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or required to be listed
in Part 3.9 of the Disclosure Letter;
(iii) neither Seller nor the Company has received, at
any time, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to any Governmental Authorization; and
(iv) all applications required to have been filed for
the renewal of the Governmental Authorizations listed or required to be listed
in Part 3.9 of the Disclosure Letter have been duly filed on a timely basis with
the appropriate Governmental Bodies, and all other filings required to have been
made with respect to such Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.9 of the
Disclosure Letter collectively constitute all of the Governmental Authorizations
necessary to permit the Company to lawfully conduct and operate the Website in
the manner it currently conducts and operates such business and to permit the
Company to own and use its assets in the manner in which it currently owns and
uses such assets of Seller previously owned and used such assets.
3.10 LEGAL PROCEEDINGS; ORDERS.
(a) There is no pending Proceeding:
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(i) that has been commenced by or against Seller or the
Company or that otherwise relates to or may affect the business of the Company,
or any of the Assets; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of Seller and the Company, (1) no such Proceeding
has been threatened, and (2) no event has occurred or circumstance exists that
may give rise to or serve as a basis for the commencement of any such
Proceeding.
(b) Except as set forth in Part 3.10 of the Disclosure
Letter:
(i) there is no Order to which the Seller or Company, or
any of the Assets, is subject;
(ii) Seller is not subject to any Order that relates to
the business of, the Company or any of the Assets; and
(iii) to the Knowledge of Seller and the Company, no
officer, director, agent, or employee of the Company is subject to any Order
that prohibits such officer, director, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the business of the
Company.
(c) Except as set forth in Part 3.10 of the Disclosure
Letter:
(i) Seller and the Company are and at all times have
been, in full compliance with all of the terms and requirements of each Order to
which they are subject;
(ii) no event has occurred or circumstance exists that
may constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any Order to
which the Seller or the Company, or the Assets, is subject; and
(iii) neither Seller nor the Company have received, any
notice or other communication (whether oral or written) from any Governmental
Body or any other Person regarding any actual, alleged, possible, or potential
violation of, or failure to comply with, any term or requirement of any Order to
which Seller, the Company, or the Assets is or has been subject.
3.11 CONTRACTS; NO DEFAULTS.
(a) Part 3.11(a) of the Disclosure Letter contains a complete
and accurate list, and Seller has delivered to Buyer true and complete copies,
of each Applicable Contract and each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
(b) Each Applicable Contract is in full force and effect and
is valid and enforceable in accordance with its terms.
(c) Except as set forth in Part 3.11(c) of the Disclosure
Letter:
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(i) Seller and the Company are, and at all times have
been, in full compliance with all applicable terms and requirements of each
Applicable Contract;
(ii) each other Person that has or had any obligation or
liability under any Applicable Contract is in full compliance with all
applicable terms and requirements of such Applicable Contract;
(iii) no event has occurred or circumstance exists that
(with or without notice or lapse of time) may contravene, conflict with, or
result in a violation or Breach of, or give Seller or the Company or other
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract; and
(iv) neither Seller nor the Company have given to or
received from any other Person any notice or other communication (whether oral
or written) regarding any actual, alleged, possible, or potential violation or
Breach of, or default under, any Applicable Contract.
(e) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or payable to
Seller or the Company under current or completed Applicable Contracts and no
such Person has made written demand for such renegotiation.
(f) The Applicable Contracts have been entered into in the
Ordinary Course of Business and have been entered into without the commission of
any act alone or in concert with any other Person, or any consideration having
been paid or promised, that is or would be in violation of any Legal
Requirement.
3.12 INTELLECTUAL PROPERTY.
(a) INTELLECTUAL PROPERTY ASSETS -- The term "Intellectual
Property Assets" includes:
(i) the name Xxxxxxxxxx.xxx, all fictional business
names, trading names, registered and unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions
and discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights;
(iv) the Website and all know-how, trade secrets,
confidential information, customer lists, computer software (including access
codes and source codes), technical information, data, process technology, plans,
drawings, and blueprints (collectively, "Trade Secrets"); owned, used, or
licensed by the Company as licensee or licensor.
(b) KNOW-HOW NECESSARY FOR THE BUSINESS. The Intellectual
Property Assets are all those necessary for the operation of the Website as it
is currently conducted. The Company is the owner of all right, title, and
interest in and to each of the Intellectual Property Assets, only as they relate
directly to Xxxxxxxxxx.xxx and subject to the qualification and disclaimer
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below, free and clear of all Encumbrances, equities, and other adverse claims,
and has the right to use same without payment to a third party all of the
Intellectual Property Assets.
(c) QUALIFICATION AND DISCLAIMER. Any and all representations
and warranties in this Agreement are expressly qualified by the following
disclaimer. Seller is not the owner of and otherwise does not have express
permission to use the various business names (with the exception of the name
Xxxxxxxxxx.xxx), trading names, registered and unregistered trademarks, service
marks and applications currently used on the Website. Those marks and related
links are provided only as general resources to those who visit the Website.
(d) TRADE SECRETS.
(i) With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper use without
reliance on the Knowledge or memory of any individual.
(ii) Seller and the Company have taken all reasonable
precautions to protect the secrecy, confidentiality, and value of their Trade
Secrets.
(iii) The Company has good title and an absolute right
to use the Trade Secrets. The Trade Secrets are not part of the public Knowledge
or literature and have not been used, divulged, or appropriated either for the
benefit of any Person (other than the Company) or to the detriment of the
Company. No Trade Secret is subject to any adverse claim or has been challenged
or threatened in any way.
3.13 DISCLOSURE.
(a) No representation or warranty of Seller in this Agreement
and no statement in the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not
misleading.
(b) No notice given pursuant to Section 5.4 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
(c) There is no fact known to Seller that has specific
application to Seller, the Company or the Website (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 the Company that has
not been set forth in this Agreement or the Disclosure Letter.
3.14 RELATIONSHIPS WITH RELATED PERSONS. Neither Seller nor any
Related Person of Seller or of the Company has any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the Company's business. Neither Seller nor any Related Person
of Seller or of the Company owns (of record or as a beneficial owner) an equity
interest or any other financial or profit interest in, a Person that has (i) had
business dealings or a material financial interest in any transaction with the
Company, or (ii) engaged in competition with the Company with respect to the
Website (a "Competing Business"). Neither Seller nor any Related Person of
Seller or of the Company is a party to any Contract with, or has any claim or
right against, the Company, with the exception of related Consulting Agreement
between Seller and the Company.
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3.15 BROKERS OR FINDERS. Seller and his agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
3.16 WEBSITE NOT A WORK FOR HIRE. The Website and all related
computer software was not created by Seller as a "work for hire", as that term
is used in 17 U.S.C. ss.201(b) for or an behalf of any employer of Seller.
3.17 LEGAL ADVICE. Seller has relied solely upon Seller's legal
counsel with respect to the legal and tax aspects of the Contemplated
Transactions.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power, and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or
the stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may
be subject; or
(iv) any Contract to which Buyer is a party or by which
Buyer may be bound.
Buyer is not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement or the
consummation or performance
of any of the Contemplated Transactions.
4.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act.
4.4 CERTAIN PROCEEDINGS. There is no pending Proceeding that has
been commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
threatened.
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4.5 BROKERS OR FINDERS. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold Seller harmless from any such payment
alleged to be due by or through Buyer as a result of the action of Buyer or its
officers or agents.
5. INDEMNIFICATION; REMEDIES
5.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants, and obligations in this Agreement,
the Disclosure Letter, and any other document delivered pursuant to this
Agreement will survive the Closing. The right to indemnification, payment of
Damages or other remedy based on such representations, warranties, covenants,
and obligations will not be affected by any investigation conducted with respect
to, or any Knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant, or obligation. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
5.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller will
indemnify and hold harmless Buyer, the Company, and their respective
Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Seller in this Agreement (without giving effect to any supplement to the
Disclosure Letter), the Disclosure Letter, the supplements to the Disclosure
Letter, or any other certificate or document delivered by Seller pursuant to
this Agreement;
(b) any Breach of any representation or warranty made by
Seller in this Agreement;
(c) any Breach by Seller of any covenant or obligation of such
Seller in this Agreement or in the Consulting Agreement;
(d) all business done by Seller and/or the Company with
respect to the Website prior to the Closing;
(e) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with Seller or the Company (or any
Person acting on their behalf) in connection with any of the Contemplated
Transactions.
The remedies provided in this Section 5.2 will not be exclusive of
or limit any other remedies that may be available to Buyer or the other
Indemnified Persons.
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5.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Seller, and will pay to Seller the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions.
5.4 PROCEDURE FOR INDEMNIFICATION -- THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under
Section 5.2, 5.3, or of notice of the commencement of any Proceeding against it,
such indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 5.4(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will, unless the
claim involves Taxes, be entitled to participate in such Proceeding and, to the
extent that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 5 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's Consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary Damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its Consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary Damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the
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indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its Consent (which may
not be unreasonably withheld).
(d) Seller hereby Consent to the non-exclusive jurisdiction of
any court in which a Proceeding is brought against any Indemnified Person for
purposes of any claim that an Indemnified Person may have under this Agreement
with respect to such Proceeding or the matters alleged therein, and agree that
process may be served on Seller with respect to such a claim anywhere in the
world.
5.5 PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
5.6 RIGHT OF SETOFF. Notwithstanding anything contained herein to
the contrary, the right of setoff set forth in this Section 5.6 shall be the
sole and exclusive remedy of all Indemnified Persons in the event any of same
are entitled to indemnification hereunder and Seller shall have no personal
liability to any Indemnified Persons hereunder. In addition to any and all other
remedies, Buyer shall have the right to exercise, by delivery of written notice
to Seller, one or more setoffs against the Buyer's Shares all Damages to which
Buyer is entitled under Section 5.2. The certificate(s) evidencing the Buyer's
Shares shall bear a legend referring to such right. Setoffs hereunder shall be
based on the value of the Buyer's Shares, which shall be based on the public
trading price of Buyer's common stock, with appropriate discount for the
restricted nature of such shares. If a setoff is effected by Buyer, Seller shall
forthwith after receipt of notice from Buyer deliver to Buyer certificates
evidencing ownership of the setoff shares for cancellation.
6. GENERAL PROVISIONS
6.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, Representatives, counsel, and accountants. Seller will cause the Company
not to incur any out-of-pocket expenses in connection with this Agreement.
6.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as Buyer determines.
Unless Consented to by Buyer in advance or required by Legal Requirements, prior
to the Closing Seller shall, and shall cause the Company to, keep this Agreement
strictly confidential and may not make any disclosure of this Agreement to any
Person. Seller and Buyer will consult with each other concerning the means by
which the Company's customers and others having dealings with the Company will
be informed of the Contemplated Transactions, and Buyer will have the right to
be present for any such communication.
6.3 NOTICES. All notices, Consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
Seller: Xxxx Xxxxx
00 Xxxxxxxxx Xxxx Xxxx
00
Xxxxxxxxx, XX 00000
Facsimile No.: (___) ___-____
with copy to: Xxxxx X. Xxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxx
6 New England Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Buyer: Xxxxxxxxxxxxxx.xxx Corporation
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx X. Xxxxxxxx, Esq.
Johnson, Blakely, Pope,
Bokor, Xxxxxx & Xxxxx, X.X.
Xxxx Xxxxxx Xxx 0000
Xxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
6.4 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Florida, County of Pinellas, or, if it has or can acquire jurisdiction, in
the United States District Court for the Middle District of Florida, and each of
the parties Consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
6.5 FURTHER ASSURANCES. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
6.6 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
6.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject
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matter. This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment.
6.8 DISCLOSURE LETTER. In the event of any inconsistency between the
statements in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
6.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither
party may assign any of its rights under this Agreement without the prior
Consent of the other parties, which will not be unreasonably withheld, except
that Buyer may assign any of its rights under this Agreement to any Subsidiary
of Buyer. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
6.10 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
6.11 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
6.12 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
6.13 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Florida without regard to conflicts of laws principles.
6.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER:
XXXXXXXXXXXXXX.XXX CORPORATION,
a Nevada corporation
By: _______________________
Xxxxx X. Xxxxxx, CEO
SELLER:
___________________________
Xxxx Xxxxx
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