Execution Copy
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
the effective date set forth below by and between (i) AdMission, Inc., a
Delaware corporation (the "Buyer") and (ii) IPIX Corporation, a Delaware
corporation (the "Seller"). The Buyer and the Seller are referred to herein
individually as a "Party" and collectively as the "Parties." The capitalized
terms used herein and not otherwise defined have the meanings given to such
terms as set forth in Appendix A hereto.
WHEREAS, the Seller, through its three business units, IPIX Security,
IPIX AdMission and IPIX InfoMedia, provides solutions for the creation,
processing and management of media, including still images, Full-360 degree
immersive images and video;
WHEREAS, the AdMission division of the Seller currently offers services
that visually enhance advertisements for directional advertising publishers and
other media sharing applications (the "AdMission Business");
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell,
on the terms and conditions set forth herein, the assets and contracts
constituting the AdMission Business in exchange for the consideration described
below;
WHEREAS, the Seller desires to retain and continue to operate its IPIX
Security and IPIX InfoMedia divisions;
WHEREAS, the Buyer will provide the Seller with a license to certain
patent rights included in the AdMission Business which are required to continue
to operate and develop the IPIX Security and IPIX InfoMedia business units; and
WHEREAS, the respective Board of Directors of each of the Seller and
the Buyer has approved this transaction;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF PURCHASED ASSETS
1.1. Purchased Assets. On the terms and subject to the conditions of
this Agreement, the Seller hereby agrees to sell, convey, assign, transfer and
deliver to the Buyer and the Buyer hereby agrees to purchase, accept and take
from the Seller, all of the Seller's right, title and interest in the following
(the "Purchased Assets"):
(a) The following items (the "AdMission Products"):
(i) the trademarks, trade names, service marks, domain names and business
brands set forth on Schedule 1.1(a)(i) and the goodwill associated therewith;
(ii) the copyrights and trade secrets set forth on Schedule 1.1(a)(ii); and
(iii) the proprietary AdMission Business information, including all Software,
processes, methods, technologies and business know-how (including, but not
limited to, any invention assignment agreements and customer or vendor
information obtained in the ordinary course of the AdMission Business) used
exclusively in the conduct of the AdMission Business and specifically set forth
on Schedule 1.1(a)(iii).
(b) The following Contracts relating exclusively to the AdMission Business:
(i) contracts with customers, suppliers and vendors and support agreements
set forth on Schedule 1.1(b)(i) (the "Conveying Contracts"); and
(ii) works-in-process and new business prospects set forth on Schedule
1.1(b)(ii).
(c) The Other Assets;
(d) The AdMission Business Working Capital; and
(e) The patents set forth on Schedule A to the Patent Purchase, License and
Repurchase Agreement (as defined below) subject to the terms and conditions of
the Patent Purchase, License and Repurchase Agreement including, but not limited
to, the repurchase rights described therein in favor of the Seller.
1.2. Excluded Assets. Notwithstanding Section 1.1 or any other
provision of this Agreement, the following assets (the "Excluded Assets") shall
not be assigned or transferred to the Buyer:
(a) All Intellectual Property of the Seller except the AdMission
Intellectual Property;
(b) All of the Seller's and the AdMission Business's accounts receivable;
(c) Except for the AdMission Business Working Capital, all of the Seller's
cash, bank accounts, marketable securities, certificates of deposit and cash
equivalents;
(d) All trademarks, service marks, trade names and logos, and all
registrations and applications thereto, not specifically set forth on Schedule
1.1(a)(i), including, without limitation, all trademarks, service marks, trade
names, logos and any contraction or abbreviation that includes, employs or
simulates the term "IPIX", and all registrations and applications thereto and
goodwill thereof;
(e) All insurance policies maintained by the Seller;
(f) The Seller's corporate minute books and stock books, certificates of
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incorporation, tax returns, tax preparation work papers, financial statements
and the books, records, books of account, correspondence, personnel records, and
other records relating to the AdMission Business;
(g) All claims, defenses and rights against third parties (including,
without limitation, insurance carriers), of whatever kind or nature, to the
extent they relate to liabilities or obligations that are not assumed by Buyer
hereunder;
(h) All claims relating to refunds or reductions in Taxes and other
governmental charges;
(i) All contracts not solely and exclusively related to the AdMission
Business;
(j) All prepaid expenses and deposits except as otherwise specifically
provided in Section 1.1 hereof;
(k) All intercompany and Affiliate receivables;
(l) All licenses and permits and other rights and authority granted or
issued by any governmental or quasi-governmental authority; and
(m) All other assets, rights or properties of any nature, except those
assets, rights or properties set out in Schedule 1.1 or Schedule 3.4.
1.3. Assumed Liabilities. Subject to the satisfaction or waiver of the
conditions set forth herein, the Buyer shall assume, discharge and perform when
lawfully due the following (the "Assumed Liabilities"):
(a) All liabilities and obligations arising or accruing subsequent to the
Closing and relating to the Purchased Assets or to conduct of the AdMission
Business, including all Liabilities arising subsequent to the Closing under the
Conveying Contracts;
(b) All liabilities and obligations expressly assumed or incurred by Buyer
pursuant to this Agreement or the other agreements, certificates and instruments
contemplated hereby;
(c) Service liabilities and obligations and warranty liabilities and
obligations of the Seller under the terms of any contract, commitment or sale
transaction entered into in the ordinary course of the AdMission Business
relating to products shipped or services provided after the Closing;
(d) All liabilities and obligations provided with respect to employment or
retention for the Transferring Employees after the Closing;
(e) The accrued payroll and benefits and other accrued expenses, arising in
the ordinary course of the Admission Business and relating to the Transferring
Employees as of the Closing;
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(f) The accrued liability of the Seller with respect to vacation pay and
accrued leave owed to the Transferring Employees;
(g) The accrued liability of the Seller, for contributions required to be
made by the Seller to the Seller 401(k) Plan (as defined herein) with respect to
the Transferring Employees; and
(h) Permitted Liens.
1.4. Excluded Liabilities. The Parties specifically acknowledge that,
except as specifically provided in Section 1.3 above, the Buyer assumes no
liabilities or obligations of the Seller whether related to the Purchased Assets
or otherwise, including any liability for payments under the Seller's employee
stock purchase plan or bonus program or the Winthrop leases.
1.5. Purchase Price. Upon the terms and subject to the conditions set
forth in this Agreement and in consideration of and in exchange for the sale,
conveyance, assignment, transfer and delivery of the Purchased Assets, the Buyer
agrees to provide and deliver to the Seller the following consideration (the
"Purchase Price"):
(a) the Buyer shall assume the Assumed Liabilities as set forth in Section
1.3 hereof;
(b) the Buyer shall deliver, or cause to be delivered, certificates
representing 1,035,000 shares of its Series A Convertible Preferred Stock (the
"Buyer Convertible Preferred Stock"); and
(c) the Buyer shall deliver, or cause to be delivered, a warrant to
purchase 200,000 shares of the Common Stock of the Buyer (the "Buyer Common
Stock") in the form attached hereto as Exhibit A (the "Common Stock Warrant").
ARTICLE II
CLOSING AND DELIVERIES
2.1. Time and Place of the Closing. The closing of the purchase and
sale of the Purchased Assets and the consummation of the other transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxx Xxxxxxx LLP, 0000 Xxxxxx Xxxxxxxxx, 00xx Xxxxx, XxXxxx, Xxxxxxxx
00000-0000 on January 25, 2005 or as soon thereafter as reasonably possible
following satisfaction or waiver of such conditions set forth in Article VII,
which shall be no later than the second (2nd) business day after the
satisfaction or waiver of such conditions (such date, the "Closing Date"). The
Closing will be effective as of the close of business on the Closing Date.
2.2. Closing Deliveries of the Seller. Contemporaneously with the
Closing, unless waived by the Buyer, the Seller shall:
(a) transfer, convey, assign and deliver to the Buyer all of Seller's
right, title and interest in the Purchased Assets;
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(b) execute and deliver to the Buyer the Common Stock Warrant in the form
attached hereto as Exhibit A;
(c) execute and deliver to the Buyer the Patent Purchase, License and
Repurchase Agreement in the form attached hereto as Exhibit B;
(d) execute and deliver to the Buyer the IPIX Trademark/Service Xxxx
License Agreement in the form attached hereto as Exhibit C;
(e) execute and deliver to the Buyer the Investors' Rights Agreement in the
form attached hereto as Exhibit D;
(f) execute and deliver to the Buyer the Qwest Assignment Agreement in the
form attached hereto as Exhibit E;
(g) execute and deliver to the Buyer the Intercompany Agreement in the form
attached hereto as Exhibit F;
(h) execute and deliver to the Buyer a certificate of its secretary,
setting forth: (i) the resolutions of its board of directors authorizing the
execution and delivery of this Agreement and the documents contemplated hereby
and the consummation of the transactions contemplated hereby and thereby, and
certifying that such resolutions have not been amended or rescinded and are in
full force and effect and (ii) the Certificate of Incorporation and Bylaws of
the Seller, certifying that such documents have not been amended or rescinded
and are in full force and effect;
(i) execute and deliver a certificate of an appropriate officer of the
Seller dated the Closing Date stating that the conditions set forth in Sections
7.1 have been satisfied;
(j) deliver an updated Disclosure Schedule, prepared as though this
Agreement has been dated as of the Closing Date; and
(k) deliver duly executed copies of all agreements, instruments,
certificates and other documents necessary or appropriate, in the opinion of
Buyer's counsel, to release any and all Encumbrances against the Purchased
Assets, other than Permitted Liens.
2.3. Closing Deliveries of the Buyer. Contemporaneously with the
Closing, unless waived by the Seller, the Buyer shall:
(a) tender to the Seller the Purchase Price as set forth in Section 1.4
above;
(b) execute and deliver to the Seller such assumption agreements and other
documents of assumption as required in order to effect the assumption by Buyer
of the Assumed Liabilities;
(c) deliver to the Seller evidence, to the Seller's reasonable
satisfaction, that the Buyer has received at least $3,500,000 for the sale of
not more than 3,500,000 shares of Buyer Convertible Preferred Shares;
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(d) execute and deliver a certificate of an appropriate officer of Buyer
dated the Closing Date stating that the conditions set forth in Section 7.2 have
been satisfied;
(e) execute and deliver to the Seller the Common Stock Warrant in the form
attached hereto as Exhibit A;
(f) execute and deliver to the Seller the Patent Purchase, License and
Repurchase Agreement in the form attached hereto as Exhibit B;
(g) execute and deliver to the Seller the IPIX Trademark/Service Xxxx
License Agreement in the form attached hereto as Exhibit C;
(h) deliver to the Seller the Investors' Rights Agreement in the form
attached hereto as Exhibit D, executed by the Buyer, Swiftsure Capital LLC and
any other investors in the Buyer as of the Closing Date, giving effect to the
transactions contemplated by this Agreement;
(i) deliver to the Seller the Qwest Assignment and Services Agreement in
the form attached hereto as Exhibit E executed by the Buyer and Qwest;
(j) execute and deliver to the Seller the Intercompany Agreement in the
form attached hereto as Exhibit F; and;
(k) execute and deliver to the Seller a certificate of its secretary,
setting forth: (i) the resolutions of its board of directors authorizing the
execution and delivery of this Agreement and the documents contemplated hereby
and the consummation of the transactions contemplated hereby and thereby, and
certifying that such resolutions have not been amended or rescinded and are in
full force and effect and (ii) the Certificate of Incorporation and Bylaws of
the Buyer, certifying that such documents have not been amended or rescinded and
are in full force and effect.
2.4. Timing of Deliveries. All items delivered by the parties at the
Closing will be deemed to have been delivered simultaneously, and no items will
be deemed delivered or waived until all have been delivered.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As a material inducement to the Buyer to enter into this Agreement and
to consummate the transactions contemplated by this Agreement, the Seller
represents and warrants to the Buyer, that, except as set forth on the
Disclosure Schedule, the statements contained in this Article III are true and
correct as of the date hereof. The Disclosure Schedule shall be arranged in
sections and subsections corresponding to the numbered and lettered sections and
subsections contained in this Article III. The disclosures in any section or
subsection of the Disclosure Schedule shall be deemed to qualify all other
sections and subsections in this Article
III.
3.1. Organization. The Seller is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own and operate
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the AdMission Business and the Purchased Assets. The Seller is qualified as a
foreign corporation in each jurisdiction where the character or location of its
assets or property owned, leased or operated in conjunction with the AdMission
Business make such qualifications necessary, except where the failure to be so
authorized or qualified would not have a Material Adverse Effect on the
business, results of operations or financial condition of the AdMission
Business. The Seller is in compliance with all provisions of its Certificate of
Incorporation and Bylaws, except where the failure to be in compliance would not
have a Material Adverse Effect on the business, results of operations or
financial condition of the AdMission Business.
3.2. Authority of the Seller. The Seller has full power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Seller and is, and each other agreement or instrument of the Seller contemplated
by it will be, the legal, valid and binding agreement or instrument of the
Seller, enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by principles of public policy and subject to
the laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive
relief or other equitable remedies. The execution, delivery and performance of
this Agreement and the other agreements of the Seller contemplated hereby
(collectively, the "Seller's Agreements") do not require the consent of or
notice to any third party. Neither the execution and delivery of the Seller's
Agreements nor the consummation of the transactions contemplated thereby will
(a) conflict with or result in any violation of or constitute a default under
any term of the Certificate of Incorporation or Bylaws of the Seller, or any
agreement, mortgage, debt instrument, indenture, or other instrument, judgment,
decree, order, award, law or regulation by which any of the Seller is bound,
(b) result in the creation of any lien, security interest, charge or encumbrance
upon the Purchased Assets, (c) result in the cancellation, modification,
revocation or suspension of any license, certificate, permit or authorization
held by the Seller and relating to the AdMission Business, (d) breach any Laws;
except to the extent any of the foregoing occurrences or conditions would not,
in the aggregate, have a Material Adverse Effect.
3.3. Working Capital. Except as set forth on Schedule 3.3, to the
Knowledge of the Seller, there exist no: (i) amounts collected by the Seller for
services to be provided by the AdMission Business for services which have not
yet been performed; (ii) any obligations or liabilities incurred by the Seller
or the AdMission Business and not yet paid for services or goods received prior
to the date hereof; or (iii) amounts paid by the Seller for goods and services
to be used exclusively by the AdMission Business to be delivered to the
AdMission Business after the date hereof.
3.4. Personal Property. To the Knowledge of the Seller, Schedule
3.4(i) is a list of certain Software and hardware, including servers,
workstations, switches, and routers, owned or leased by the Seller. To the
Knowledge of the Seller, Schedule 3.4(ii) contains a list of certain other
office equipment used as of November 24, 2004 by the Seller. The Seller has
good and marketable title to, or a valid leasehold interest in, the property set
forth on Schedules 3.4(i) and (ii) free and clear of all Encumbrances, except
for Encumbrances listed on Schedules 3.4(i) or (ii). As of the Closing, the
foregoing assets will be assigned and conveyed to the Buyer, except such assets
which have been retired, removed, sold, leased, or otherwise disposed of or
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encumbered in the ordinary course of the AdMission Business consistent with past
practices of the Seller or the AdMission Business.
3.5. Employee Matters.
(a) Schedule 3.5 contains a complete and correct list of the respective
titles of each of the Transferring Employees as of the date hereof.
(b) To the Knowledge of Seller, none of the Transferring Employees is
subject to any secrecy or noncompetition agreement (other than such agreements
with Seller) that would materially impede the ability of such Transferring
Employees to continue to perform the activities currently being performed by
each such employee for the AdMission Business.
(c) The Seller has paid in full to all employees all wages, salaries and
commissions due and payable to the Transferring Employees.
3.6. Taxes. The Seller has filed or will file on a timely basis all
Tax Returns it is required to have filed in connection with the Purchased
Assets. All such Tax Returns are or will be correct and complete when filed.
3.7. Intellectual Property.
(a) Except as set forth on Schedule 3.7(a), to the Knowledge of the Seller,
(i) the Seller has sole title to and ownership of the AdMission Intellectual
Property free and clear of all Encumbrances; (ii) no employee or former
employee or independent contractor of the Seller has made any claim in writing
of ownership, misappropriation or infringement with respect to any AdMission
Intellectual Property; (iii) no Person has asserted in writing that any
AdMission Intellectual Property is invalid or is not enforceable; (iv) Seller
has taken appropriate actions to keep the Registered Intellectual Property
Rights registered and in effect, including the payment of filing, examination,
annuity, and maintenance fees and filing of renewals, statements of use or
working, affidavits of incontestability and other similar actions; and (v)
Seller has not received written notice that any Registered Intellectual Property
Right is the subject of any interference, opposition, cancellation, nullity,
re-examination or other proceeding placing in question the validity or scope of
such rights.
(b) To the Knowledge of the Seller, Schedule 3.7(b) lists each currently
effective or pending (i) trademark, service xxxx and domain name registration
and applications therefor and (ii) copyright registration and application
therefor, in each case, included in the AdMission Intellectual Property.
(c) To the Knowledge of the Seller, Schedule 3.7(c) lists all agreements
and other arrangements under which the Seller, has provided, or has agreed to
provide, the source code included in the Purchased Assets to any third party,
other than end users for their internal use.
(d) To the Knowledge of the Seller, all Software that is included in the
Purchased Assets is owned by the Seller or is subject to a current license
agreement that covers all use of the Software in the AdMission Business as now
conducted.
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(e) To the Knowledge of the Seller, no action, suit, proceeding or claim
with respect to the AdMission Intellectual Property has been instituted, or is
pending or threatened against the Seller.
(f) Commercially reasonable precautions have been taken to protect the
secrecy, confidentiality and value of the trade secrets and all other
proprietary information used by the Seller exclusively in the AdMission
Business, including the implementation and enforcement of policies requiring
each employee or independent contractor who has access to trade secrets to
execute proprietary information and confidentiality agreements substantially
in a standard form.
3.8. Brokers. Except for payments due to Swiftsure Capital LLC in
connection with fundraising by the Buyer, no Person has, or will have, as a
result of the transactions contemplated by this Agreement, any right, interest
or claim against or upon the Buyer or the Seller for any commission fee or other
compensation payable as a finder or broker because of any act or omission by the
Seller.
3.9. Conveying Contracts. To the Knowledge of the Seller, Seller has
materially performed all obligations required to be performed by it in
connection with each Conveying Contract. The Seller has not received any notice
of any claim of default by it under or termination of any Conveying Contract,
and, to the Knowledge of Seller, Seller is not in breach or default under any
Conveying Contract. Except as set forth on Schedule 3.9, no Person has made
written demand for any renegotiations of, any outstanding rights or material
terms of any Conveying Contract. Except as set forth on Schedule 3.9, each
Conveying Contract is assignable to Buyer without the consent of any Person.
3.10. Litigation. There is no suit, proceeding, action, claim, at law or in
equity, or arbitration pending, or, to the Knowledge of the Seller, threatened,
against the Seller which would materially adversely affect the performance of
the Seller under this Agreement or the consummation of the transactions
contemplated by this Agreement.
3.11. Investment. The Seller (a) understands that the Buyer Convertible
Preferred Stock and Common Stock Warrant, and any securities issuable upon
conversion or exercise thereof, have not been, and will not be, registered under
the Securities Act or under any state securities laws, are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering and will contain a legend restricting transfer;
(b) is acquiring the Buyer Convertible Preferred Stock and Common Stock Warrant,
and any securities issuable upon conversion or exercise thereof solely for the
Seller's own account for investment purposes, and not with a view to the
distribution thereof; (c) is a sophisticated investor with knowledge and
experience in business and financial matters; (d) has received such information
concerning Buyer and has had the opportunity to obtain additional information
as requested in order to evaluate the merits and the risks inherent in holding
the Buyer Convertible Preferred Stock and Common Stock Warrant, and any
securities issuable upon conversion or exercise thereof; (e) is able to bear the
economic risk and lack of liquidity inherent in holding the Buyer Convertible
Preferred Stock and Common Stock Warrant, and any securities issuable upon
conversion or exercise thereof; and (f) is an "Accredited Investor" as that term
is defined in Rule 501 promulgated under the Securities Act.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As a material inducement to the Seller to enter into this Agreement and
to consummate the transactions contemplated by this Agreement, the Buyer
represents and warrants to the Seller, as of the date hereof:
4.1. Organization. The Buyer is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own or lease all
of its assets and to carry on its business as now conducted. The Buyer is
qualified as a foreign corporation in each jurisdiction where the character or
location of its assets or property owned, leased or operated make such
qualifications necessary, except where the failure to be so authorized or
qualified would not have a material adverse effect on the business, results of
operations or financial condition of the Buyer. Buyer is in compliance with all
provisions of its Certificate of Incorporation and Bylaws, except where the
failure to be in compliance would not have a material adverse effect on the
business, results of operations or financial condition of the Buyer.
4.2. Authority of the Buyer. The Buyer has full power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by the
Buyer and is, and each other agreement or instrument of the Buyer contemplated
by it will be, the legal, valid and binding agreement or instrument of the
Buyer, enforceable against the Buyer in accordance with its terms, except as
such enforceability may be limited by principles of public policy and subject to
the laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive
relief or other equitable remedies. The execution, delivery and performance of
this Agreement and the other agreements of the Buyer contemplated hereby
(collectively, the "Buyer's Agreements") do not require the consent of or notice
to any third-party. Neither the execution and delivery of the Buyer's
Agreements nor the consummation of the transactions contemplated thereby will
(a) conflict with or result in any violation of or constitute a default under
any term of the Certificate of Incorporation or Bylaws of the Buyer, or any
agreement, mortgage, debt instrument, indenture, or other instrument, judgment,
decree, order, award, law or regulation by which any of the Buyer is bound, (b)
result in the creation of any lien, security interest, charge or encumbrance
upon the assets of the Buyer, (c) result in the cancellation, modification,
revocation or suspension of any license, certificate, permit or authorization
held by the Buyer, (d) breach any Laws; except to the extent any of the
foregoing occurrences or conditions would not, in the aggregate, have a material
adverse effect.
4.3. Capitalization. Schedule 4.3 sets forth, as of the date hereof
and giving effect to the transactions contemplated by this Agreement, (i) the
number of authorized shares of each class of the Buyer's capital stock, (ii) the
number of issued and outstanding shares of each class of the Buyer's capital
stock, (iii) the names of all holders of issued and outstanding shares of each
class of the Buyer's capital stock, together with the number of such shares
owned and/or controlled by each such holder and the percentage of the issued and
outstanding shares of each class of the Buyer's capital stock which such holder
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owns or controls and (iv) the number of shares of each class, if any, which are
held in treasury. The Buyer Convertible Preferred Stock being delivered to the
Seller as part of the Purchase Price will represent, as of the Closing Date: (i)
twenty two and eight tenths percent (22.8%) of the Buyer Convertible Preferred
Stock; and (ii) eleven and sixty-seven hundredths percent (11.67%) of the
capital stock of the Buyer, on a broad-based (including all granted options and
options available for grant), fully diluted, as-converted-to common stock basis.
Except as set forth on Schedule 4.3, there are no outstanding or authorized
rights, options, warrants, convertible securities, subscription rights,
conversion rights, exchange rights or other agreements or commitments of any
kind that could require the Buyer to issue or sell any shares of the Buyer
Common Stock (or securities convertible into or exchangeable for shares of
Buyer Common Stock) or the Buyer Convertible Preferred Stock. Except with
respect to the Investor's Rights Agreement or as otherwise set forth on Schedule
4.3, there are no proxies, voting rights, stockholders agreements or other
agreements or understandings with respect to the voting or transfer of the
capital stock of the Buyer.
4.4. Transferring Employees. Schedule 4.4 lists the AdMission
Employees to whom the Buyer has made an offer of employment, such offer to be
effective immediately following the Closing.
4.5. No Subsidiaries. The Buyer has no subsidiaries and does not own
(directly or indirectly) any equity interest in any corporation, partnership,
limited liability company, joint venture or other entity.
4.6. Litigation. There is no suit, proceeding, action, claim, at law
or in equity, or arbitration pending, or, to the Knowledge of the Buyer,
threatened, against the Buyer which would adversely affect the performance of
the Buyer under this Agreement or the consummation of the transactions
contemplated by this Agreement.
4.7. Due Diligence. In making its determination to proceed with the
transactions contemplated by this Agreement, the Buyer has relied solely on the
results of its own independent investigation and the representations and
warranties of the Seller set forth in Article III, including the schedules
thereto. Such representations and warranties by the Seller constitute the sole
and exclusive representations and warranties of the Seller to the Buyer in
connection with the transactions contemplated hereby, and the Buyer acknowledges
and agrees that the Seller is not making any representation or warranty
whatsoever, express or implied, beyond those expressly given in this Agreement,
including any implied warranty as to condition, merchantability or suitability
as to any of the Purchased Assets and it is understood that the Buyer is taking
the Purchased Assets as is and where is. The Buyer acknowledges and agrees
that, notwithstanding anything contained herein to the contrary, the Seller is
not making any representation or warranty as to the operation without error or
interruption of any of the Purchased Assets. The Buyer has no knowledge that
any of the representations and warranties of the Seller in this Agreement are
not true and correct, and the Buyer has no knowledge of any errors in, or
omissions from, the information set forth in the schedules to this Agreement.
4.8. Brokers. Except for payments due to Swiftsure Capital LLC in
connection with fundraising by the Buyer, no Person has or will have, as a
result of the transactions contemplated by this Agreement, any right, interest
or claim against or upon the Seller or the Buyer for any commission, fee or
other compensation payable as a finder or broker because of any act or omission
by the Buyer.
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4.9. Buyer Securities. The shares of Buyer Convertible Preferred Stock
and the shares of Common Stock issuable upon conversion of the Common Stock
Warrant, will, when issued and delivered in accordance with this Agreement and,
with respect to the Common Stock Warrant, the terms of such Common Stock
Warrant, be duly authorized, validly issued, fully paid and nonassessable.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Publicity and Disclosure. The Seller and the Buyer shall agree
with each other as to the form, substance and timing of any press release,
publicity or other communication related to this Agreement or the transactions
contemplated hereby. No Party shall make any disclosure of this Agreement or
the existence, terms and conditions hereof (whether or not in response to an
inquiry about the existence or subject matter of this Agreement) unless
previously approved in writing by the Buyer and the Seller. Notwithstanding the
foregoing, nothing contained herein shall prohibit the Buyer or the Seller from
making any disclosure which the Buyer or the Seller, respectively, in good faith
believes is required by, or advisable according to, applicable Laws, regulations
or stock market rules, after using reasonable efforts to give advance notice to
the other parties and providing such parties an opportunity to review and
comment on such disclosure.
5.2. Conduct of the Business. Until the Closing Date, unless this
Agreement is otherwise terminated pursuant to Article VIII;
(a) the Seller will conduct its business only in, and will not take any
action except in, the ordinary course of the AdMission Business and in
accordance with applicable Law, unless the failure to do so would not have a
Material Adverse Effect on the AdMission Business or the Purchased Assets;
(b) the Seller will not amend or modify any Conveying Contract without the
prior written consent of the Buyer, which consent shall not be unreasonably
withheld; and
(c) the Seller will (i) use reasonable efforts to preserve the AdMission
Business's organization and goodwill, keep available the services of its
officers, employees and consultants and maintain satisfactory relationships with
vendors, customers and others having business relationships with it, and (ii)
subject to applicable Laws, confer with representatives of Buyer to report any
changes or occurrences which have caused any representation or warranty made by
the Seller in this Agreement to be untrue.
5.3. Tax Disclosure Authorization. Notwithstanding anything herein to
the contrary, the Parties (and each Affiliate and Person acting on behalf of any
Party) agree that each Party (and each employee, representative, and other agent
of such Party) may disclose to any and all Persons, without limitation of any
kind, the transaction's tax treatment and tax structure (as such terms are used
in Code Sections 6011 and 6112 and regulations thereunder) contemplated by this
agreement and all materials of any kind (including opinions or other tax
analyses) provided to such Party or such Person relating to such tax treatment
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and tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws. This authorization is not intended to permit
disclosure of any other information including, without limitation, (A) any
portion of any materials to the extent not related to the transaction's tax
treatment or tax structure, (B) the identities of participants or potential
participants, (C) the existence or status of any negotiations, (D) any pricing
or financial information (except to the extent such pricing or financial
information is related to the transaction's tax treatment or tax structure), or
(E) any other term or detail not relevant to the transaction's tax treatment or
the tax structure.
5.4. Sales, Use and Transfer Taxes. All Transfer Taxes, if any,
imposed upon, arising out of or resulting from, the consummation of the
transactions contemplated by this Agreement shall be paid by the Buyer not later
than the required due date of such Taxes under applicable Law.
5.5. Litigation Support. Each Party shall afford to each other Party
and to such Party's authorized accountants, counsel and other designated
representatives, during normal business hours in a manner so as to not
unreasonably interfere with the conduct of business, reasonable access to the
personnel of such Party. With regard to making personnel available, a Party so
doing pursuant to this Section 5.5 shall be entitled to receive from such other
Party, upon the presentation of invoices therefor, payments for such out-of-
pocket amounts as may be reasonably incurred in making such personnel available;
provided, however, that no such reimbursements shall be required for the salary
or cost of fringe benefits or similar expenses pertaining to employees of the
providing Party. The information received pursuant to this Section 5.4 shall
not be disclosed to third parties, except that the receiving party may disclose
such information to its advisors in connection with the prosecution, defense or
settlement of any litigation or any other proper business purpose.
5.6. Hiring of the Seller's Employees. The Parties acknowledge that
the Buyer has made an offer of employment to the Transferring Employees. The
Seller hereby waives any rights that it may have under any non-competition and
non-disclosure (solely for the purpose and to the extent required to disclose
information included in the Purchased Assets) provisions pursuant to any
employment, non-compete or other arrangements with any Transferring Employees
who are employed by the Buyer immediately after the Closing.
5.7. Bulk Transfer Provisions. The Seller and the Buyer hereby waive
compliance with the provisions of any applicable bulk transfer law; provided,
however, that the Buyer agrees: (i) to pay and discharge when due or to contest
or litigate all claims of creditors which are asserted against the Seller, and
(ii) to indemnify, defend and hold harmless the Seller from and against any and
all such claims in the manner provided in Article VI.
5.8. Use of Names. Except as specifically set forth in the IPIX
Trademark/Service Xxxx License Agreement attached hereto as Exhibit C, after the
Closing, the Buyer shall have no right to use any trademarks, tradenames, logos
or any contraction, abbreviation or simulation of the Seller's and will not hold
itself out as having any affiliations with the Seller.
5.9. Inadvertent Delivery; Delivery of Items Not Included in Purchased
Assets. Buyer acknowledges that at or immediately following Closing, the Seller
will provide the Buyer with constructive possession and control of certain
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tangible items included within the Purchased Assets including, without
limitation, certain physical files and computer equipment. Buyer agrees that
to the extent that it discovers that such physical files or computer equipment
contain records or copies of any items of Intellectual Property of the Seller
(including, without limitation, software, files, databases, correspondence or
documentation) that do not constitute part of the Purchased Assets (whether or
not falling within the definition of Excluded Assets), Buyer shall make no use
whatsoever of such items and shall immediately notify Seller of such possession
and thereafter, at Seller's election return such items or delete or destroy such
items and notify the Seller that it has done so. The Buyer further acknowledges
and agrees that it is not entitled to any other items which do not constitute
part of the Purchased Assets (whether or not falling within the definition
of Excluded Assets), including, without limitation any prepaid expenses or
deposits, including but not limited to those set forth on Schedule 5.8. The
Buyer agrees that to the extent it shall at any time have or be provided with
constructive possession of any such Excluded Assets, Buyer shall make no use
whatsoever of such items and shall immediately notify Seller of such possession
and thereafter immediately return such items to the Seller.
5.10. Allocation of Purchase Price. The parties agree that the Purchase
Price, including the Assumed Liabilities, shall be allocated among the Purchased
Assets in accordance with the Allocation Schedule attached hereto as Exhibit G.
Each of the parties hereto will file all Tax Returns (including without
limitation the IRS Form 8594 and any disclosures that are required under Code
Section 1060) in a manner consistent with such Allocation Schedule.
5.11. No Sale. Until the Closing or the termination of this Agreement
pursuant to the terms of Article VIII, other than as contemplated by this
Agreement, the Seller will not sell, pledge, transfer or otherwise place any
Encumbrance on any Purchased Assets except in the ordinary course of business.
5.12. Confidentiality.
(a) The Seller will keep confidential and protect, and will not divulge,
allow access to or use, except in the ordinary course of business or as
otherwise provided in this Agreement or the agreements contemplated hereunder,
(i) AdMission Intellectual Property, including product specifications, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, Software, database technologies, systems,
structures, architectures and data (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information) relating solely to the
AdMission Business, and (ii) any and all notes, analyses, compilations, studies,
summaries and other material containing or based, in whole or in part, on any
information included in the foregoing ("Confidential Information"). The
foregoing obligations of confidentiality will not apply to any Excluded
Information. "Excluded Information" shall include information that: (a) was
publicly known at the time of the execution of this Agreement or subsequently
disclosed through no fault of the Seller; or (b) was communicated by the
Buyer to an unaffiliated third party free of any obligation of confidence,
provided, however, that, except as set forth in Section 9.9 hereof, nothing
herein shall release the Buyer from its obligations pursuant to the Mutual
Nondisclosure Agreement between the Buyer and the Seller dated as of December 1,
2004 (the "Mutual NDA").
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(b) In the event that the Seller is requested or required (by oral question
or request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information, the Seller will notify Buyer promptly of the request
or requirement so that Buyer may seek an appropriate protective order or waive
compliance with the provisions of this Section 5.12. If, in the absence of a
protective order or the receipt of a waiver from Buyer, the Seller is, on the
advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, the Seller may disclose the
Confidential Information to the tribunal; provided, however, that the Seller
will use its best efforts to obtain, at the request of Buyer, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as Buyer designates.
5.13. Assignment of Confidentiality Agreements. Effective upon the Closing,
the Seller will assign to Buyer all of the Seller's right, title and interest in
and to any confidentiality agreement to which the Seller may be a party
regarding to the confidentiality of information relating exclusively to the
Purchased Assets.
5.14. Schedules. Prior to the date hereof, Seller has delivered to Buyer,
and Buyer has received to its satisfaction, all Schedules required to be
prepared and delivered by Seller hereunder. Seller shall be entitled further to
supplement or amend any Schedule before the Closing Date to the extent required
to update such Schedule to reflect events or occurrences after the date hereof.
5.15. Further Assurances. The Parties will, after the Closing, execute such
further documents, deeds, bills of sale, assignments and instruments of
assumption, obtain such consents or approvals and give such notices, and take
such further actions as may reasonably be required to consummate the sale,
transfer and assignment of the Purchased Assets and the assumption of the
Assumed Liabilities and to effect the other purposes of this Agreement.
ARTICLE VI
INDEMNIFICATION
6.1. Seller's Indemnification. Subject to the terms and conditions of
this Article VI, the Seller covenants and agrees to indemnify, defend, protect
and hold harmless the Buyer and its officers, directors, employees, assigns,
successors and affiliates (individually a "Buyer Indemnified Party" and
collectively the "Buyer Indemnified Parties") from, against and in respect of
all Damages suffered, sustained, incurred or paid by any Buyer Indemnified
Party, in each case in connection with, resulting from or arising out of: (a)
the inaccuracy or breach of any representation or warranty made by the Seller
set forth in this Agreement or any agreement contemplated hereby; or (b) the
nonfulfillment of any covenant or agreement on the part of the Seller set forth
in this Agreement or any agreement contemplated hereby; (c) any product sold,
manufactured, or licensed by and any services provided by the Seller prior to
Closing; (d) any liability of the Seller for Taxes incurred on or prior to the
Closing; or (e) failure of the Seller to assume, pay and discharge the
obligations of the Seller not assumed by Buyer pursuant to this Agreement.
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6.2. Buyer's Indemnification. Subject to the terms and conditions of
this Article VI, the Buyer covenants and agrees to indemnify, defend, protect
and hold harmless the Seller and its officers, directors, employees, assigns,
successors and affiliates (individually a "Seller Indemnified Party" and
collectively the "Seller Indemnified Parties") from, against and in respect of
all Damages suffered, sustained, incurred or paid by any Seller Indemnified
Party, in each case in connection with, resulting from or arising out of: (a)
the inaccuracy or breach of any representation or warranty made by the Buyer set
forth in this Agreement or any agreement contemplated hereby; (b) the
nonfulfillment of any covenant or agreement on the part of the Buyer set forth
in this Agreement or any agreement contemplated hereby; (c) the Assumed
Liabilities; or (d) the Liabilities incurred by the Buyer as a result of the
Buyer's operation of the Purchased Assets after the Closing.
6.3. Indemnification Procedures.
(a) Third Party Claims. All claims for indemnification made under this
Agreement resulting from, related to or arising out of a third party claim
against an Indemnified Party (as defined below) shall be made in accordance
with the following procedures. A person entitled to indemnification under this
Article VI (an "Indemnified Party") shall give prompt written notification to
the person from whom indemnification is sought (the "Indemnifying Party") of the
commencement of any action, suit or proceeding relating to a third party claim
for which indemnification may be sought or, if earlier, upon the assertion of
any such claim by a third party. Such notification shall include a description
in reasonable detail (to the extent known by the Indemnified Party) of the facts
constituting the basis for such third party claim and the amount of the Damages
claimed. Within 20 days after delivery of such notification, the Indemnifying
Party may, upon written notice thereof to the Indemnified Party, assume control
of the defense of such action, suit, proceeding or claim with counsel reasonably
satisfactory to the Indemnified Party. If the Indemnifying Party does not
assume control of such defense, the Indemnified Party shall control such
defense. The Party not controlling such defense may participate therein at its
own expense; provided that if the Indemnifying Party assumes control of such
defense and the Indemnified Party reasonably concludes, based on advice from
counsel, that the Indemnifying Party and the Indemnified Party have conflicting
interests with respect to such action, suit, proceeding or claim, the reasonable
fees and expenses of counsel to the Indemnified Party solely in connection
therewith shall be considered indemnifiable "Damages" for purposes of this
Agreement; provided, however, that in no event shall the Indemnifying Party be
responsible for the fees and expenses of more than one counsel for all
Indemnified Parties. The Party controlling such defense shall keep the other
Party advised of the status of such action, suit, proceeding or claim and the
defense thereof and shall consider recommendations made by the other Party with
respect thereto. The Indemnified Party shall not agree to any settlement of
such action, suit, proceeding or claim without the prior written consent of the
Indemnifying Party. The Indemnifying Party shall not agree to any settlement of
such action, suit, proceeding or claim that does not include a complete release
of the Indemnified Party from all liability with respect thereto or that imposes
any liability or obligation on the Indemnified Party without the prior written
consent of the Indemnified Party.
(b) Procedure for Claims. An Indemnified Party wishing to assert a claim
for indemnification under this Article VI shall deliver to the Indemnifying
Party a written notice (a "Claim Notice") which contains (i) a description and
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the amount (the "Claimed Amount") of any Damages incurred by the Indemnified
Party, (ii) a statement that the Indemnified Party is entitled to
indemnification under this Article VI and a reasonable explanation of the basis
therefor, and (iii) a demand for payment in the amount of such Damages. Within
20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver
to the Indemnified Party a written response in which the Indemnifying Party
shall: (I) agree that the Indemnified Party is entitled to receive all of the
Claimed Amount (in which case such response shall be accompanied by a payment by
the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check
or by wire transfer), (II) agree that the Indemnified Party is entitled to
receive part, but not all, of the Claimed Amount (the "Agreed Amount") (in which
case such response shall be accompanied by a payment by the Indemnifying Party
to the Indemnified Party of the Agreed Amount, by check or by wire transfer), or
(III) contest that the Indemnified Party is entitled to receive any of the
Claimed Amount. If the Indemnifying Party in such response contests the payment
of all or part of the Claimed Amount, the Indemnifying Party and the Indemnified
Party shall use good faith efforts to resolve such dispute. If such dispute is
not resolved within 30 days following the delivery by the Indemnifying Party of
such response, the Indemnifying Party and the Indemnified Party shall each have
the right to submit such dispute to a court of competent jurisdiction. If a
written notice does not state the amount claimed, such omission will not
preclude the Indemnified Party from recovering from the Indemnifying Party with
respect to the claim described in such notice if the Claimed Amount is promptly
provided after it is determined. In order to assert its right to
indemnification under this Article VI, the Indemnified Party will not be
required to provide any notice except as provided in this Section 6.3(b).
6.4. Survival of Representations, Warranties and Covenants. Each
covenant and agreement contained in this Agreement shall survive the Closing and
be enforceable until such covenant or agreement has been fully performed. All
representations and warranties contained in this Agreement shall survive the
Closing and continue until the first (1st) anniversary of the date of the
Closing, at which time they shall expire. If an indemnification claim is
properly asserted in writing pursuant to Section 6.3 prior to the expiration of
the representation or warranty that is the basis for such claim, then such
representation or warranty shall survive until, but only for the purpose of,
the resolution of such claim.
6.5. Limitations on Indemnification.
(a) Notwithstanding anything to the contrary contained in this Agreement,
the following limitations shall apply to indemnification claims under this
Agreement:
(i) (A) the aggregate indemnification obligation of the Seller hereunder
shall not exceed in the aggregate $350,000 and (B) the Seller shall have no
obligation to indemnify, hold harmless, defend or bear the cost of defending the
Buyer or its successors or assigns unless and until the aggregate amount of all
Damages exceeds $100,000 and then only for Damages in excess of $100,000; and
(ii) (A) the aggregate indemnification obligation of the Buyer hereunder
shall not exceed in the aggregate $350,000 and (B) the Buyer shall have no
obligation to indemnify, hold harmless, defend or bear the cost of defending
the Seller or its successors or assigns unless and until the aggregate amount
of all Damages exceeds $100,000 and then only for Damages in excess of $100,000.
17
(b) In no event shall the Seller or the Buyer be responsible or liable for
any Damages or other amounts under this Article VI that are consequential, in
the nature of lost profits, diminution in value of property, special or punitive
damages or otherwise not actual damages. Except as set forth in clause (c)
below, each Party shall (and shall cause its Affiliates to) use reasonable
efforts to pursue all legal rights and remedies available in order to minimize
the Damages for which indemnification is provided to it under this Article VI.
(c) The amount of Damages recoverable by an Indemnified Party under this
Article VI with respect to an indemnity claim shall be reduced by the amount of
any payment received by such Indemnified Party (or an Affiliate thereof), with
respect to the Damages to which such indemnity claim relates, from an insurance
carrier. The Parties to this Agreement may pursue such payments of insurance
claims, however, no Party is obligated to pursue such insurance claims. If an
Indemnified Party (or an Affiliate) receives any insurance payment in connection
with any claim for Damages for which it has already received an indemnification
payment from the Indemnifying Party, it shall pay to the Indemnifying Party,
within 30 days of receiving such insurance payment, an amount equal to the
excess of (i) the amount previously received by the Indemnified Party under this
Article VI with respect to such claim plus the amount of insurance payments
received, over (ii) the amount of Damages with respect to such claim which the
Indemnified Party has become entitled to receive under this Article VI.
(d) To the extent any representation or warranty of the Seller in Article
III is, to the Knowledge of the Buyer on or prior to the date hereof, untrue or
incorrect, the Buyer shall have no rights to indemnification under this Article
VI by reason of such untruth or inaccuracy. To the extent any representation or
warranty of the Buyer in Article IV is, to the Knowledge of the Seller on or
prior to the date hereof, untrue or incorrect, the Seller shall have no rights
to indemnification under this Article VI by reason of such untruth or
inaccuracy.
6.6. Exclusive Remedy. Except with respect to claims for equitable
relief, including specific performance, made with respect to breaches of any
covenant or agreement contained in this Agreement and for claims based on fraud,
the rights of the Buyer Indemnified Parties and the Seller Indemnified Parties
under this Article VI shall be the sole and exclusive remedies of the Buyer
Indemnified Parties and the Seller Indemnified Parties with respect to claims
covered by Sections 6.1 or 6.2 or otherwise relating to the transactions that
are the subject of this Agreement.
ARTICLE VII
CONDITIONS TO CLOSING
7.1. Conditions to Buyer's Obligations. The obligation of Buyer to take
the actions required to be taken by it at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Buyer's sole discretion (but no
such waiver will waive any rights or remedy otherwise available to Buyer), of
each of the following conditions at or prior to the Closing:
(a) The representations and warranties set forth in Article III that are
not subject to materiality or Material Adverse Effect qualifications will be
true and correct in all material respects at and as of the Closing Date as
though then made and as though the Closing Date had been substituted for the
18
date of this Agreement in such representations and warranties, except that any
representation or warranty expressly made as of a specified date will only need
to have been true on and as of such date, and the representations and warranties
set forth in Article III that are subject to materiality or Material Adverse
Effect qualifications will be true and correct in all respects at and as of the
Closing Date as though then made and as though the Closing Date had been
substituted for the date of this Agreement in such representations and
warranties, except that any representation or warranty expressly made as of a
specified date will only need to have been true on and as of such date (without
taking into account any supplemental disclosures after the date of this
Agreement by the Seller);
(b) The Seller will have performed and complied with each of its agreements
contained in this Agreement in all material respects;
(c) Buyer will have received evidence reasonably acceptable to it that no
litigation is pending or threatened (i) challenging or seeking to prevent or
delay consummation of any of the transactions contemplated by this Agreement,
(ii) asserting the illegality of or seeking to render unenforceable any material
provision of this Agreement or any of the ancillary agreements, (iii) imposing
or seeking to impose material damages or sanctions directly arising out of the
transactions contemplated by this Agreement on Buyer or any of its officers or
directors or with respect to any portion of the Purchased Assets;
(d) The Buyer will have received aggregate proceeds of at least $750,000
for the sale of no more than 750,000 shares of Buyer Preferred Convertible
Shares to the Transferring Employees;
(e) The Buyer will have received evidence that the Seller has received an
executed copy of the IPIX Corporation Employee Certificate, in the form attached
hereto as Exhibit H from each of Xxxxx Xxxx and Xxxx Xxxxxx and an executed copy
of the IPIX Corporation Employee Intellectual Property Certificate in the form
attached hereto as Exhibit I from each of Xxxxx Xxxxx and Xxxxxx Xxxxxx;
(f) The Buyer will have entered into an Invention Assignment Agreement in
substantially the form attached hereto as Exhibit J with each of the
Transferring Employees;
(g) After the date of this Agreement, no Material Adverse Effect will have
occurred;
(h) No Person will have asserted or threatened that, other than as set
forth in the Disclosure Schedule, such Person (i) is the owner of, or has the
right to acquire or to obtain ownership of, any material of the Purchased Assets
which would materially impair the value of the Purchased Assets or (ii) is
entitled to a material portion of the Purchase Price;
(i) Buyer will not have discovered any fact or circumstance existing as of
the date of this Agreement not disclosed on the Disclosure Schedule that
constitutes a Material Adverse Effect; and
(j) The Seller will have delivered each of the certificates, instruments
and other documents that it is obligated to deliver pursuant to Section 2.2.
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7.2. Conditions to the Seller's Obligations. The obligation of the
Seller to take the actions required to be taken by it at the Closing is subject
to the satisfaction or waiver, in whole or in part, in the Seller's sole
discretion (but no such waiver will waive any right or remedy otherwise
available under this Agreement), of each of the following conditions at or prior
to the Closing:
(a) The representations and warranties set forth in Article IV that are not
subject to materiality qualifications will be true and correct in all material
respects at and as of the Closing Date as though then made and as though the
Closing Date had been substituted for the date of this Agreement in such
representations and warranties, except that any representation or warranty
expressly made as of a specified date will only need to have been true on and as
of such date, and the representations and warranties set forth in Article IV
that are subject to materiality qualifications will be true and correct in all
respects at and as of the Closing Date as though then made and as though the
Closing Date had been substituted for the date of this Agreement in such
representations and warranties, except that any representation or warranty
expressly made as of a specified date will only need to have been true on and as
of such date (without taking into account any supplemental disclosures after the
date of this Agreement by the Buyer or the discovery of information by Seller);
(b) Buyer shall have received at least Three Million Five Hundred Thousand
Dollars ($3,500,000) for the sale of not more than 3,500,000 Shares of Buyer
Convertible Shares;
(c) Buyer will have performed and complied with each of its agreements
contained in this Agreement in all material respects; and
(d) Buyer will have delivered each of the certificates, instruments and
other documents that it is obligated to deliver pursuant to Section 2.3.
ARTICLE VIII
TERMINATION
8.1. Termination. This Agreement may be terminated prior to the
Closing:
(a) by the mutual written consent of Buyer and the Seller;
(b) by the Seller, if:
(i) Buyer has breached any representation, warranty or agreement contained
in this Agreement in any material respect in any such case such that Section
7.2(a) or Section 7.2(b) will not be satisfied and such breach or condition has
not been promptly cured within thirty (30) days following receipt by Buyer of
written notice of such breach;
(ii) the transactions contemplated by this Agreement have not been
consummated on or before February 15, 2005; provided, that the Seller will not
be entitled to terminate this Agreement pursuant to this Section 8.1(b)(ii) if
the Seller's failure to comply in all material respects with its obligations
under this Agreement has prevented the consummation of the transactions
contemplated by this Agreement; or
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(iii) any of the conditions set forth in Section 7.2 have become impossible
to satisfy;
(c) by Buyer, if:
(i) the Seller has breached any representation, warranty or agreement
contained in this Agreement in any material respect in any such case such that
Section 7.1(a) or Section 7.1(b) will not be satisfied and such breach or
condition has not been promptly cured within thirty (30) days following receipt
by Seller of written notice of such breach;
(ii) the transactions contemplated by this Agreement will not have been
consummated on or before February 15, 2005; provided, that the Buyer will not be
entitled to terminate this Agreement pursuant to this Section 8.1(c)(ii) if the
Buyer's failure to comply in all material respects with its obligations under
this Agreement has prevented the consummation of the transactions contemplated
by this Agreement; or
(iii) any of the conditions set forth in Section 7.1 have become impossible
to satisfy.
8.2. Effect of Termination. The right of termination under Section 8.1
is in addition to any other rights Buyer or the Seller may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies and will not preclude an action for breach of this
Agreement. If this Agreement is terminated, all continuing obligations of the
parties under this Agreement will terminate except that 9.2 (governing law) and
9.8 (expenses) will survive indefinitely unless sooner terminated or modified by
the parties in writing.
ARTICLE IX
MISCELLANEOUS
9.1. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the Parties and their respective permitted successors and
assigns; provided, however, that no Party may assign either this Agreement or
any of its rights, interests or obligations hereunder, whether by operation of
law or otherwise, without the prior written approval of the Buyer (in the case
of an assignment by the Seller) or the Seller (in the case of an assignment by
the Buyer). Any such purported assignment without such prior written consent
shall be void and of no force or effect.
9.2. Governing Law. This Agreement shall in all respects be
interpreted, construed and governed by and in accordance with the laws of the
State of Delaware, without regard to its conflicts of laws principles.
9.3. Specific Performance; Remedies Not Exclusive. Each Party
acknowledges that the other Parties shall be irreparably harmed and that there
shall be no adequate remedy at law for any violation by any of them of any of
the covenants or agreements contained in this Agreement. It is accordingly
agreed that, in addition to, but not in lieu of, any other remedies which may be
available upon the breach of any such covenants or agreements, each Party shall
have the right to obtain injunctive relief to restrain a breach or threatened
breach of, or otherwise to obtain specific performance of, the other Party's
21
covenants and agreements contained in this Agreement. All rights and remedies
of the Parties under this Agreement shall be cumulative, and the exercise of
one or more rights or remedies will not preclude the exercise of any other right
or remedy available under this Agreement or applicable law.
9.4. Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect.
9.5. Amendment. This Agreement may only be amended, supplemented or
modified by execution of an instrument in writing signed by all the Parties.
9.6. Waiver. Any Party hereto may to the extent permitted by
applicable Laws (i) extend the time for the performance of any of the
obligations or other acts of the other Parties hereto, (ii) waive any
inaccuracies in the representations and warranties of the other Parties hereto
contained herein or in any document delivered pursuant hereto, or (iii) waive
compliance with any of the agreements of the other Parties hereto contained
herein. No such extension or waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the Party extending the time
of performance or waiving any such inaccuracy or non-compliance. No waiver by
any Party of any term of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term of this
Agreement on any future occasion.
9.7. Notices. All notices, requests, consents, waivers and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (i) if personally delivered, on the
day it is delivered (if not delivered on a business day, the first business day
after it is delivered); (ii) if mailed by registered or certified United States
mail, return receipt requested, postage prepaid, four business days after it is
sent; or (iii) if sent for next business day delivery by a nationally recognized
overnight delivery service, one business day after it is sent. All notices,
consents, waivers or other communications required or permitted to be given
hereunder shall be addressed as follows:
(a) If to the Seller:
IPIX Corporation
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx, President
and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Xxxx Xxxxxxx LLP
0000 Xxxxxx Xxxxxxxxx, 00xx Xxxxx
XxXxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If to the Buyer:
AdMission, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxx & Xxxxxxx LLP
U.S. Bank Centre
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address or addresses as the Party addressed may from time to
time designate in writing pursuant to notice given in accordance with this
section.
9.8. Expenses. Except as otherwise provided in Article VI, all costs
and expenses (including, without limitation, financial advisory fees, legal fees
and expenses, broker and finder fees, and fees and expenses of accountants)
incurred by the Seller in connection with the transactions contemplated hereby
shall be borne by the Seller and all costs and expenses (including, without
limitation, financial advisory fees, legal fees and expenses, broker and finder
fees, and fees and expenses of accountants) incurred by the Buyer in connection
with the transactions contemplated hereby shall be borne by the Buyer.
9.9. Complete Agreement. This Agreement, those documents expressly
referred to herein, including all exhibits and schedules hereto, and the other
documents of even date herewith embody the complete agreement and understanding
among the Parties and supersede and preempt any prior understandings, agreements
or representation by or among the Parties, written or oral, which may have
related to the subject matter herein. Notwithstanding the foregoing, the Mutual
NDA and the Mutual Nondisclosure Agreement dated October 6, 2004 between
Swiftsure Capital LLC and the Seller (the "Swiftsure NDA") shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect in accordance with their terms from and after the Closing, provided,
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however, that, effective from and after the Closing the Purchased Assets and
the information related solely and exclusively to the AdMission Business shall
constitute Excluded Information solely for purposes of Buyer's obligations under
the Mutual NDA and shall not constitute Evaluation Materials under the Swiftsure
NDA solely for purposes of Swiftsure's obligations thereunder.
9.10. Absence of Third Party Beneficiary Rights. No provision of this
Agreement is intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, Subsidiary, Affiliate, stockholder, employee or partner of any Party
hereto or any other Person.
9.11. Mutual Drafting. This Agreement is the mutual product of the Parties,
and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of each of the Parties, and shall not be construed for
or against any Party hereto.
9.12. Further Representations. Each Party to this Agreement acknowledges and
represents that it has been represented by its own legal counsel in connection
with the transactions contemplated by this Agreement, with the opportunity to
seek advice as to its legal rights from such counsel. Each Party further
represents that it is being independently advised as to the Tax or securities
consequences of the transactions contemplated by this Agreement and is not
relying on any representation or statements made by any other Party as to such
Tax and securities consequences.
9.13. Gender. Unless the context clearly indicates otherwise, where
appropriate the singular shall include the plural and the masculine shall
include the feminine or neuter, and vice versa, to the extent necessary to give
the terms defined herein and/or the terms otherwise used in this Agreement the
proper meanings.
9.14. Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
9.15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when executed and delivered shall be deemed an
original and all of which, taken together, shall constitute the same agreement.
This Agreement and any document or schedule required hereby may be executed by
facsimile signature, which shall be considered legally binding for all purposes.
[Signatures appear on following pages.]
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IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the effective date set
forth below.
BUYER:
ADMISSION, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Treasurer
SELLER:
IPIX CORPORATION
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Director
Effective Date: January 11, 2005
[Signatures Page to Asset Purchase Agreement]
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APPENDIX A
DEFINED TERMS
1. "AdMission Business" has the meaning given to such term in the
preamble.
2. "AdMission Business Working Capital Requirement" means funds
immediately available for use by the AdMission Business, calculated by taking
the sum of the amounts set forth on Schedule 3.3(i) and 3.3(ii), and subtracting
therefrom the amounts set forth on Schedule 3.3(iii).
3. "AdMission Employees" means the current employees of the Seller who are
exclusively or primarily involved in providing services relating to the
Purchased Assets.
4. "AdMission Intellectual Property" means all Intellectual Property
included in the Purchased Assets.
5. "AdMission Products" has the meaning given to such term in Section
1.1(a).
6. "Affiliat" means, as to any Party, any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Party, including any Person who would be treated as a member of a
controlled group under Section 414 of the Code and any officer or director of
such Party. For purposes of this definition, an entity shall be deemed to be
"controlled by" a Person if the Person possesses, directly or indirectly, power
either to (i) vote thirty percent (30%) or more of the securities (including
convertible securities) having ordinary voting power or (ii) direct or cause the
direction of the management or policies of such entity whether by contract or
otherwise; and, as to a Party who is a natural person, such Party's spouse,
parents, siblings and lineal descendants.
7. "Agreement" has the meaning given to such term in the preamble.
8. "Assumed Liabilities" has the meaning given such term in Section 1.3
of the Agreement.
9. "Buyer" has the meaning given such term in the preamble.
10. "Buyer Indemnified Party" means the Buyer and its officers, directors,
permitted assigns, successors and Affiliates.
11. "Claim Notice" has the meaning given to such term in Section 6.3(b).
12. "Claimed Amount" has the meaning given to such term in Section 6.3(b).
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13. "Closing" has the meaning given to such term in Section 2.1.
14. "Closing Date" has the meaning given to such term in Section 2.1
15. "Code" shall mean the Internal Revenue Code of 1986, as amended.
16. "Contract" means any note, bond, mortgage, contract, license, lease,
sublease, covenant, commitment, power of attorney, proxy, indenture, purchase
and sale order, or other agreement or arrangement, oral or written, to which the
Seller is a party and by which the Seller or any of the Purchased Assets is
bound including, without limitation, (a) all customer, partner, employee,
contractor, and third party contracts, agreements or understandings, as the case
may be, relating to the license, use, distribution and support of the Purchased
Assets; (b) OEM, VAR or otherwise integrated reseller agreements relating to the
Purchased Assets; (c) source code escrow arrangements relating to the Purchased
Assets; and (d) third party contracts, including any partner contracts granting
the Seller access to or use of third party products necessary for the testing
and development of the Purchased Assets.
17. "Conveying Contracts" has the meaning given to such term in Section
1.1(b).
18. "Damages" means all losses, claims, damages, punitive damages,
assessments, adjustments, judgments, settlement payments, deficiencies,
penalties, fines, Taxes, and costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements of every kind, nature and
description), including without limitation, any such Damages suffered,
sustained, incurred or paid in connection with, resulting from or arising out of
any causes of actions, lawsuits or administrative proceedings (including
informal proceedings).
19. "Encumbrance" means any lien, pledge, assignment, option, charge,
easement, security interest, right-of-way, encumbrance, mortgage or other
similar right.
20. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder.
21. "Exchange Act" means the Securities Act of 1934, as amended.
22. "Excluded Assets" has the meaning given such term on Section 1.2 of the
Agreement.
23. "Government Authority" means any agency or other instrumentality of the
United States, or any state, local, or foreign entity or authority exercising
executive, legislative, judicial, regulatory, administrative or taxing functions
of government.
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24. "Governmental Authorization" means any approval, consent, license,
permit, waiver, registration or other authorization issued, granted, given, or
otherwise required by any Governmental Authority or pursuant to Laws.
25. "Indemnified Party" shall have the meaning given to such term in
Section 6.3(a).
26. "Indemnifying Party" shall have the meaning given to such term in
Section 6.3(a).
27. "IRS" means the Internal Revenue Service or any successor agency
thereto.
28. "Intellectual Property" means all (i) patents, patent applications and
patent disclosures, (ii) trademarks, service marks, trade dress, trade names,
logos, domain names, URLs, and corporate names and registrations and
applications or registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
together with all authors' and moral rights, (iv) Software (including, without
limitation, source code, object code, macros, scripts, objects, routines,
modules and other components), data, data bases and documentation thereof, (v)
trade secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, products, processes,
techniques, methods, research and development information and results, drawings,
specifications, designs, plans, proposals, technical data, marketing plans and
customer, prospect and supplier lists and information), (vi) other intellectual
property rights, (vii) "technical data" as defined in 48 Code of Federal
Regulations, Chapter 1, and (viii) copies and tangible embodiments thereof (in
whatever form or medium).
29. "Knowledge" means (i) in the case an individual, knowledge of a
particular fact or other matter only if such individual is actually aware of
such fact or other matter, (ii) in the case of the Seller, it will be deemed to
have "Knowledge" of a particular fact or other matter only if (a) the President,
Chief Executive Officer or Chief Financial Officer has "Knowledge" (as
contemplated by clause (i) above) of such fact or other matter on the date of
this Agreement or (b) any of Xxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxx, or Xxxxxx
Xxxxxx has Knowledge (as contemplated by clause (i) above) of such fact or other
matter as of the date that such person executes the IPIX Corporation Employee
Certificate attached to the Agreement as Exhibit H (in the case of Xxxx Xxxxxx
and Xxxxx Xxxx) or the IPIX Employee Intellectual Property Certificate attached
to the Agreement as Exhibit I (in the case of Xxxxx Xxxxx and Xxxxxx Xxxxxx),
and then only if and to the extent such fact or other matter is disclosed on
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such certificate, and (iii) in the case of the Buyer, it will be deemed to have
"Knowledge" of a particular fact or other matter if the President, Chief
Executive Officer, Chief Financial Officer or Xxxxx Xxxxxx has "Knowledge" (as
contemplated by clause (i) above) of such fact or other matter on the date of
this Agreement.
30. "Laws" means all laws, statutes, ordinances, rules and regulations of
any Government Authority, including all orders, judgments, injunctions, awards,
decisions or decrees of any court having effect of law.
31. "Liability" or "Liabilities" means, without limitation, any direct or
indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility, either accrued,
absolute, contingent, mature, unmature or otherwise and whether known or
unknown, fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated,
secured or unsecured.
32. "Material Adverse Effect" means any effect, event or change which,
individually or in the aggregate, has or could reasonably be expected to have a
material adverse effect on the Purchased Assets or on the right or ability of
the Seller to consummate the transactions contemplated hereby, other than (i)
changes or effects which are or result from occurrences relating to the economy
in general or the Seller's industry and not specifically related to the Seller,
(ii) changes or effects which result from the loss of customers or delay or
cancellation or cessation of orders for any Seller's products or services
directly attributable to the announcement of this Agreement, or (iii)
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby.
33. "Other Assets" means the assets specified on Schedule 3.4 to the Asset
Purchase Agreement.
34. "Party" and "Parties" have the meaning given to such terms in the
preamble.
35. "Permitted Liens" shall mean (i) liens, claims, changes, encumbrances,
leases, pledges, security interests, mortgages, defects in title or other
restrictions set forth on any schedule to the Agreement, (ii) the Assumed
Liabilities, and (iii) current liabilities, not unusual in amount, incurred in
the ordinary course of the AdMission Business.
36. "Person" means any person, limited liability company, partnership,
trust, unincorporated organization, corporation, association, joint stock
company, business, group, Governmental Authority or other entity.
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37. "Purchase Price" has the meaning given to such term in Section 1.4.
38. "Purchased Assets" has the meaning set forth in Section 1.1 of the
Agreement.
39. "QWEST Agreement" means the Collocation Agreement by and between the
Seller and QWEST Communications Corporation, dated as of February 11, 2003, and
all amendments thereto.
40. "Registered Intellectual Property Rights" means Intellectual Property
Rights that are the subject of an issued patent, trademark, copyright, design
right or other similar registration formalizing government-granted rights.
41. "Securities Act" means the Securities Act of 1933, as amended.
42. "Seller" has the meaning given to such term in the preamble.
43. "Seller Indemnified Party" means the Seller and its officers,
directors, permitted assigns, successors and Affiliates.
44. "Software" means any and all (i) computer programs, including any and
all software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable, on paper or
otherwise, (iii) descriptions, flow charts and other work product used to
design, plan, organize and develop any of the foregoing, and (iv) all
documentation and other works of authorship, including user manuals and
training materials, relating to any of the foregoing.
45. "Subsidiary" or "Subsidiaries" means any corporation, partnership,
joint venture or other legal entity of which the Seller (either alone or through
or together with any other Subsidiary) owns, directly or indirectly, sufficient
amounts of the stock or other equity securities entitling it or another
Subsidiary to vote for the election of at least a majority of the board of
directors or other governing body of such corporation or other legal entity.
46. "Tax" or "Taxes" means all federal, state, local, foreign or other tax
of any kind whatsoever, including, without limitation, all income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock, ad
valorem, value added, inventory, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, unclaimed property, escheat, sales, use, transfer, registration,
alternative or add-on minimum, or estimated tax, and including any interest,
penalty or addition thereto, whether disputed or not.
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47. "Tax Return" means any report, return, statement, claim for refund,
election, declaration or other information with respect to any Tax required to
be filed, permitted to be filed or actually filed with a taxing authority,
including any schedule or attachment thereto, and including any amendment
thereof.
48. "Transfer Taxes" means any transfer, documentary, sales, use, stamp,
registration or other similar Taxes and fees.
49. "Transferring Employees" shall have the meaning set forth in Section
4.4.
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