ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into this 21st day
of November, 2001, by and between XVARIANT, INC. ("Purchaser"), a Nevada
corporation, and BID TRAC, INC., a Delaware corporation ("Seller").
WHEREAS, Seller is engaged in the business ("Business") of providing
certain scheduling software via the Internet to real estate agents throughout
the United States and is the owner of certain assets including, but not
limited to, the name "Bid Trac", intellectual property, copyrights, contracts
rights, and miscellaneous assets all used in connection with the operation of
the Business; and,
WHEREAS, Seller principally conducts the Business at 00 Xxxx Xxxx Xxxx,
Xxxx Xxxxxx, Xxxxxxxxxxxx; and,
WHEREAS, Purchaser desires to purchase, and Seller desires to sell, all
of the essential assets used or useful, or intended to be used, in the
operation of the Business and listed on Schedule 1 attached hereto and made a
part hereof (the "Assets"), excluding all cash on deposit in Seller's bank
account on the date of Closing.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereafter
set forth, and intending to be legally bound thereby, the parties agree as
follows:
1.0 Purchase and Sale. Seller agrees to sell, convey, assign,
transfer and deliver to Purchaser and Purchaser shall purchase, acquire and
accept from Seller, on the terms and conditions set forth in the Agreement,
all Assets. Only those Assets specifically listed on Schedule 1.0 are deemed
essential to the operation of the Business and are sold, assigned, transferred
or conveyed to Purchaser pursuant to the terms hereof.
2.0 Liabilities Assumed.
2.1 Purchaser shall not assume any liabilities of Seller.
3.0 Consideration. In full consideration for the Assets (the
"Purchase Price"), at the Closing, Purchaser shall (a) issue to Seller
450,000 shares of common stock of Purchaser ("Initial Issuance Shares"), which
shares shall be fully paid and non-assessable and free and clear of all liens,
and (b) grant to Seller the right to purchase up to 600,000 additional shares
of common stock of Purchaser ("Warrant Shares") pursuant to the terms and
conditions of the stock purchase warrant (the "Stock Purchase Warrant")
attached hereto as Exhibit A and incorporated herein by reference.
4.0 Tax Allocation. Seller and Purchaser agree that the Purchase
Price shall be allocated in accordance with Section 1060 of the Internal
Revenue Code of 1986, as amended, and all applicable regulations thereunder.
Each of Seller and Purchaser shall (a) be bound by the allocation for purposes
of determining any taxes, (b) prepare and file its tax returns on a basis
consistent with the allocation and (c) take no position inconsistent with the
allocation on any applicable tax return.
5.0 Restriction on Transfer of Stock.
5.1 The Initial Issuance Shares shall be subject to certain
restrictions on the sale or transfer of such shares in the public market.
Seller agrees that it will not sell or attempt to sell the Initial Issuance
Shares for a period of two years from the Closing Date, as defined hereafter,
whether in the public market or otherwise (other than distributions of such
Initial Issuance Shares by Seller to one or more of its stockholders following
the Closing Date).
5.2 The Initial Issuance Shares shall bear a legend reflecting
the terms of restriction on transfer described herein as well as a standard
restricted securities legend. A copy of the certificate representing the
Initial Issuance Shares and bearing the herein described restrictive legends
is attached hereto as Exhibit B.
6.0 Closing.
6.1 The closing ("Closing") of the sale and purchase of the
Assets shall take place by the delivery of the Assets by Seller and delivery
of the Initial Issuance Shares and Stock Purchase Warrant to Seller and
execution and delivery by facsimile of this Agreement and other relevant
exhibits and schedules without physical attendance at the Closing on November
21, 2001 (the "Closing Date"). If Closing has not occurred on or prior to the
Closing Date, then either party may elect to terminate this Agreement.
6.2 At the Closing, Seller shall deliver to Purchaser the
following:
(a) A xxxx of sale from Seller conveying title to all of the
Assets to Purchaser in the form attached hereto and made apart hereof as
Exhibit C;
(b) A receipt for the Initial Issuance Shares;
(c) An executed officers' certificate and certified copies of
corporate resolutions of Seller authorizing the consummation of the
transactions contemplated by this Agreement;
(d) All necessary consents of third parties, including customers,
if any; and
(e) Such other assignments, bills of sale, or instruments of
conveyance, certificates of officers, and other documents as reasonably may be
requested by Purchaser prior to the Closing to consummate this Agreement and
the transactions contemplated hereby.
6.3 At the Closing, Purchaser shall deliver or cause to be
delivered to Seller the following:
(a) The Initial Issuance Shares;
(b) The Stock Purchase Warrant;
(c) An executed officers' certificate and certified copies of
corporate resolutions of Purchaser authorizing the consummation of the
transactions contemplated by this Agreement; and
(d) All other documents, instruments and writings as may be
reasonably requested by Seller prior to the Closing to consummate this
Agreement and the transactions contemplated hereby.
7.0 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser, as of the Closing Date, as follows:
7.1 Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease, and operate the Assets.
7.2 Seller has the requisite corporate power and authority to
execute and deliver this Agreement and the Exhibits which form a part of this
Agreement to which it is a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Exhibits
which form a part hereof to which Seller is a party by Seller and the
performance of its obligations hereunder and thereunder have been duly and
validly authorized by all requisite corporate action of the part of Seller.
This Agreement has been duly executed and delivered by Seller and this
Agreement constitutes, a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar laws
of general application relating to or affecting the enforcement of creditors'
rights.
7.3 Seller holds good and marketable title to the Assets, free
and clear of restrictions or conditions to transfer or assignment, and free
and clear of liens, pledges, charges, or encumbrances (other than certain of
the Assets that are leased by Seller as disclosed on Exhibit A hereof).
7.4 Seller is acquiring the Initial Issuance Shares and Warrant
Shares of Purchaser for its own account for investment and not with a view to,
or for sale or other disposition in connection with, any distribution thereof,
nor with any present intention of selling or otherwise disposing of the same
(other than distribution of such Initial Issuance Shares by Seller to one or
more of its stockholders following the Closing Date). Seller is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act of 1933, as amended. Seller acknowledges that the Initial
Issuance shares and Warrant Shares of Purchaser are being issued and sold
under exemptions from registration provided under said act and under
applicable state securities laws and, therefore, cannot be sold unless
subsequently registered under said act and applicable state securities laws or
an exemption from such registration is available.
7.5 The Assets are being sold pursuant to this Agreement AS
IS, WHERE IS, without any representations warranties, liabilities or other
obligations on the part of Seller whatsoever, whether expressed or implied,
except as specifically provided for herein.
8.0 Purchaser's Representations and Warranties. Purchaser
represents and warrants to Seller, as of the date of Closing, as follows:
8.1 Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has
all requisite corporate power and authority to acquire, own, lease, and
operate the Assets.
8.2 Purchaser has the requisite corporate power and authority
to execute and deliver this Agreement and Exhibits which form a part of this
Agreement to which it is a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Exhibits to
which it is a party, by Purchaser and the performance of its obligations
hereunder and thereunder have been duly and validly authorized by all
requisite corporate action of the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and this Agreement constitutes the
legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency or other similar laws of general application
relating to or affecting the enforcement of creditors' rights.
8.3 The total authorized capital stock of Purchaser consists
of 50,000,000 shares of common stock, $.001 par value, of which 21,121,100 are
issued and outstanding immediately prior to the Closing and 16,171,100
(including the Initial Issuance Shares) will be outstanding as of the Closing.
Purchaser shall also cancel not less than another 450,000 shares on or before
November 30, 2001 and, to the extent Purchaser fails to cancel such shares,
Purchaser shall issue an additional 150,000 shares of common stock, $.001 par
value, to Seller on December 1, 2001 (the "Additional Shares"), which
Additional Shares shall be deemed to be part of the Initial Issuance Shares
for purposes of this Agreement. All of the issued and outstanding shares of
Purchaser's common stock have been duly authorized and validly issued, are
fully paid and non-assessable, and were issued in compliance with all
applicable charter documents of Purchaser and all applicable federal and state
securities laws. There are, and have been, no preemptive rights with respect
to the issuance of Purchaser's capital stock.
8.4 Purchaser has conducted its own independent review and
analysis of the business, operations, technology, assets, liabilities,
results of operations, financial condition and prospects of the Business and
acknowledges that Seller has provided Purchaser with access to all information
it has requested in conducting its review. Purchaser acknowledges that
neither Seller nor any of its officers, directors, controlling persons,
agents, outside consultants or representatives makes or has made, other than
as specifically made in this Agreement, any representation or warranty, either
express or implied, as to the accuracy or completeness of any of the
information provided or made available to Purchaser or its officers,
directors, employees, agents or representatives.
8.5 Purchaser has made and shall continue to make all filings
with the Securities Exchange Commission and all stock exchanges necessary to
enable Seller to avail itself of Rule 144 of the Securities Exchange Act of
1934, as amended (the "Securities Act"), in connection with the sale of any
Initial Issuance Shares after the Closing Date.
8.6 Purchaser has complied and will comply with all applicable
federal and state securities laws in connection with all prior offers, sales
and issuance by it of its securities. Neither Purchaser nor anyone acting on
its behalf has offered the Initial Issuance Shares or similar securities, or
solicited any offers to purchase any of such securities, so as to render
unavailable for the issuance and sale of the Initial Issuance Shares, the
Stock Purchase Warrant and the Warrant Shares an exemption from the
registration provisions of the Securities Act.
8.7 The issuance, sale and delivery of the Stock Purchase Warrant
by Purchaser has been duly authorized by all requisite corporate action of
Purchaser, and the Warrant Shares, when issued upon the exercise thereof
against payment of the exercise price therefor, will be duly and validly
issued and outstanding, fully paid and nonassessable with no personal
liability attached thereto and not subject to preemptive or any other similar
rights of the shareholders of Purchaser or others.
8.8 For a period of two years from the Closing Date,
Purchaser and its management shall allow Seller to designate one person
("Seller's Representative") to serve on the Board of Directors of Purchaser.
Seller's Representative shall be included in the proxy statements sent to
Purchaser's shareholders as one of the directors recommended for election by
the Board of Directors. As soon as practicable following the Closing Date,
Purchaser shall take all action necessary to appoint Seller's Representative
to the Board of Directors.
9.0 Dispute Resolution. In the event of any dispute between the
parties with respect to the terms and conditions of this Agreement, the
parties shall resolve such disputes by and through an arbitration proceeding
to be conducted pursuant to the rules of the American Arbitration Association
in Salt Lake City, Utah. The results, determination, finding, judgment and or
award rendered through any such arbitration proceeding, shall be final and
binding on the parties hereto and may be specifically enforced by legal
proceedings.
10.0 Indemnification. After the Closing Seller will indemnify
Purchaser, its employees, officers and directors and hold Purchaser, its
officers, directors, and employees harmless from and against any loss,
liability, deficiency, damage or expense (including reasonable legal expenses
and costs and any cost or expense arising from or incurred in connection with
any action, suit, proceeding, claim or judgment) relating to or arising from
any litigation, investigation, proceeding, or other claim by any governmental
entity or any other person to the extent that the same actually arises from
the transfer of the Assets or otherwise relates to the Business or operation
of the Business prior to the Closing.
After the Closing, Purchaser will indemnify Seller, its officers,
directors, and employees and hold such officers, directors, and employees
harmless from and against any loss, liability, deficiency, damage or expense
(including reasonable legal expenses and costs and any cost or expense arising
from or incurred in connection with any action, suit, proceeding, claim or
judgment) relating to or arising from any litigation, investigation,
proceeding, or other claim by any governmental entity or any other third party
to the extent that the same actually arises from or relates to the Business or
operation of the Business subsequent to the Closing.
11.0 Title to Bid Trac Assets. In the event that Purchaser fails to
continue its business operations for two (2) consecutive years following the
Closing, title to the software, source code and/or general intangibles used in
the "Bid Trac" business and transferred as part of the Assets hereunder (the
"Bid Trac Assets") shall automatically revert to Seller or its successors and
assigns. Purchaser covenants and agrees that it will notify Seller promptly
upon the cessation or discontinuation of its business and, thereafter, shall
take all such steps reasonably necessary to transfer the Bid Trac Assets to
Seller as provided herein.
12.0 Funding by Applied Technology Consultants, Inc. As a material
inducement to Seller to enter into this Agreement and transfer the Assets to
Purchaser, Applied Technology Consultants, Inc. ("ATC") hereby agrees that it
will continue to fund Purchaser's negative cashflow for a period of not less
than six (6) months following the Closing. ATC hereby acknowledges and agrees
that Seller would not enter into this Agreement unless ATC agreed to fund
Purchaser's negative cashflow as provided herein and ATC hereby further agrees
that Seller is an intended third party beneficiary of ATC's undertaking
herein.
13.0 Miscellaneous Provisions.
13.1 All section titles or captions to this Agreement are for
convenience only and shall not be deemed part of this Agreement and in no way
define, limit, augment, extend or describe the scope, content or intent of any
part or parts of this Agreement.
13.2 Whenever the context may require, any pronoun used herein
shall include the corresponding masculine, feminine or neuter forms and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa. Each of the foregoing genders and plurals is understood to refer to a
corporation, partnership, individual, or other legal entity when the context
so requires.
13.3 The parties shall execute and deliver all documents,
provide all information and take or forebear all such action as may be
reasonably necessary or appropriate to carry out the intent of this Agreement.
13.4 This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania. Any action or
proceeding seeking to interpret or enforce the provisions of this Agreement
shall be brought in the Commonwealth of Pennsylvania.
13.5 This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns; provided
that this provision shall not be construed as permitting assignment,
substitution, delegation or other transfer of rights or obligations except
strictly in accordance with the provisions of the other sections of this
Agreement.
13.6 This Agreement, and the documents referred to herein,
constitutes the entire agreement between the parties pertaining to the subject
matter hereof, and supersedes all prior agreements and understandings
pertaining thereto. No covenant, representation or condition not expressed in
this Agreement shall affect or be deemed to interpret, change or restrict the
express provisions hereof. The failure of either party to inspect the
documents referred to herein constitutes a waiver of any objection, contention
or claim that may be based upon such an inspection.
13.7 This Agreement is solely for the benefit of the parties
hereto and this Agreement shall not be deemed to confer upon or give to any
other third party any remedy, claim, liability, reimbursement, cause of action
or other right except as specifically provided herein. None of the provisions
of this Agreement shall be for the benefit of or enforceable by any creditors
of any party hereto.
13.8 In the event either party hereto fails to carry out its
obligations hereunder or breaches a warranty or representation and the
non-breaching party files a request for arbitration as provided herein, the
losing party in any such arbitration shall pay all costs and expenses,
including reasonable attorneys' fees incurred by the prevailing party in
enforcing its rights or in obtaining redress for the breach.
13.9 Purchaser and Seller, from time to time after the Closing
(but without obligation separate from the obligations expressly provided by
this Agreement), hereby agree to execute, acknowledge and deliver such other
documents, certifications and further assurances as any such party may
reasonably request with respect to the assignment, transfer and delivery of
the Assets in order to consummate in full the transaction provided for herein.
13.10 This Agreement, together with all Exhibits and Schedules,
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties or any of them with
respect to the subject matter hereof.
13.11 This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and same Agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement
provided a manually executed counterpart is delivered within three (3) days
following execution by facsimile.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
"Purchaser" "Seller"
XVARIANT, INC. BID TRAC, INC.
By: /s/ By: /s/
Its: Xxxxxxxx X. Xxxxxxxx, President
By its execution hereof, Applied Technology Consultants, Inc. hereby
agrees to be bound by the terms of Section 12.0 hereof.
Applied Technology Consultants, Inc.
By: /s/
Name:
Title:
